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105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-659
_______________________________________________________________________


 
                    WORKFORCE INVESTMENT ACT OF 1998

                                _______
                                

                 July 29, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Goodling, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 1385]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the bill (H.R. 
1385), to consolidate, coordinate, and improve employment, 
training, literacy, and vocational rehabilitation programs in 
the United States, and for other purposes, having met, after 
full and free conference, have agreed to recommend and do 
recommend to their respective Houses as follows:
      That the House recede from its disagreement to the 
amendment of the Senate and agree to the same with an amendment 
as follows:
      In lieu of the matter proposed to be inserted by the 
Senate amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Workforce 
Investment Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. Short title; table of contents.

                  TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

Sec. 101. Definitions.

      Subtitle B--Statewide and Local Workforce Investment Systems

Sec. 106. Purpose.

                       Chapter 1--State Provisions

Sec. 111. State workforce investment boards.
Sec. 112. State plan.

                       Chapter 2--Local Provisions

Sec. 116. Local workforce investment areas.
Sec. 117. Local workforce investment boards.
Sec. 118. Local plan.

          Chapter 3--Workforce Investment Activities Providers

Sec. 121. Establishment of one-stop delivery systems.
Sec. 122. Identification of eligible providers of training services.
Sec. 123. Identification of eligible providers of youth activities.

                       Chapter 4--Youth Activities

Sec. 126. General authorization.
Sec. 127. State allotments.
Sec. 128. Within State allocations.
Sec. 129. Use of funds for youth activities.

     Chapter 5--Adult And Dislocated Worker Employment and Training 
                               Activities

Sec. 131. General authorization.
Sec. 132. State allotments.
Sec. 133. Within State allocations.
Sec. 134. Use of funds for employment and training activities.

                      Chapter 6--General Provisions

Sec. 136. Performance accountability system.
Sec. 137. Authorization of appropriations.

                          Subtitle C--Job Corps

Sec. 141. Purposes.
Sec. 142. Definitions.
Sec. 143. Establishment.
Sec. 144. Individuals eligible for the job corps.
Sec. 145. Recruitment, screening, selection, and assignment of 
          enrollees.
Sec. 146. Enrollment.
Sec. 147. Job corps centers.
Sec. 148. Program activities.
Sec. 149. Counseling and job placement.
Sec. 150. Support.
Sec. 151. Operating plan.
Sec. 152. Standards of conduct.
Sec. 153. Community participation.
Sec. 154. Industry councils.
Sec. 155. Advisory committees.
Sec. 156. Experimental, research, and demonstration projects.
Sec. 157. Application of provisions of Federal law.
Sec. 158. Special provisions.
Sec. 159. Management information.
Sec. 160. General provisions.
Sec. 161. Authorization of appropriations.

                      Subtitle D--National Programs

Sec. 166. Native american programs.
Sec. 167. Migrant and seasonal farmworker programs.
Sec. 168. Veterans' workforce investment programs.
Sec. 169. Youth opportunity grants.
Sec. 170. Technical assistance.
Sec. 171. Demonstration, pilot, multiservice, research, and multistate 
          projects.
Sec. 172. Evaluations.
Sec. 173. National emergency grants.
Sec. 174. Authorization of appropriations.

                       Subtitle E--Administration

Sec. 181. Requirements and restrictions.
Sec. 182. Prompt allocation of funds.
Sec. 183. Monitoring.
Sec. 184. Fiscal controls; sanctions.
Sec. 185. Reports; recordkeeping; investigations.
Sec. 186. Administrative adjudication.
Sec. 187. Judicial review.
Sec. 188. Nondiscrimination.
Sec. 189. Administrative provisions.
Sec. 190. Reference.
Sec. 191. State legislative authority.
Sec. 192. Workforce flexibility plans.
Sec. 193. Use of certain real property.
Sec. 194. Continuation of State activities and policies.
Sec. 195. General program requirements.

              Subtitle F--Repeals and Conforming Amendments

Sec. 199. Repeals.
Sec. 199A. Conforming amendments.

                 TITLE II--ADULT EDUCATION AND LITERACY

Sec. 201. Short title.
Sec. 202. Purpose.
Sec. 203. Definitions.
Sec. 204. Home schools.
Sec. 205. Authorization of appropriations.

            Subtitle A--Adult Education and Literacy Programs

                      Chapter 1--Federal Provisions

Sec. 211. Reservation; grants to eligible agencies; allotments.
Sec. 212. Performance accountability system.

                       Chapter 2--State Provisions

Sec. 221. State administration.
Sec. 222. State distribution of funds; matching requirement.
Sec. 223. State leadership activities.
Sec. 224. State plan.
Sec. 225. Programs for corrections education and other institutionalized 
          individuals.

                       Chapter 3--Local Provisions

Sec. 231. Grants and contracts for eligible providers.
Sec. 232. Local application.
Sec. 233. Local administrative cost limits.

                      Chapter 4--General Provisions

Sec. 241. Administrative provisions.
Sec. 242. National institute for literacy.
Sec. 243. National leadership activities.

                           Subtitle B--Repeals

Sec. 251. Repeals.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                      Subtitle A--Wagner-Peyser Act

Sec. 301. Definitions.
Sec. 302. Functions.
Sec. 303. Designation of State agencies.
Sec. 304. Appropriations.
Sec. 305. Disposition of allotted funds.
Sec. 306. State plans.
Sec. 307. Repeal of Federal advisory council.
Sec. 308. Regulations.
Sec. 309. Employment statistics.
Sec. 310. Technical amendments.
Sec. 311. Effective date.

                Subtitle B--Linkages With Other Programs

Sec. 321. Trade act of 1974.
Sec. 322. Veterans' employment programs.
Sec. 323. Older americans act of 1965.

          Subtitle C--Twenty-First Century Workforce Commission

Sec. 331. Short title.
Sec. 332. Findings.
Sec. 333. Definitions.
Sec. 334. Establishment of twenty-first century workforce commission.
Sec. 335. Duties of the commission.
Sec. 336. Powers of the commission.
Sec. 337. Commission personnel matters.
Sec. 338. Termination of the commission.
Sec. 339. Authorization of appropriations.

Subtitle D--Application of Civil Rights and Labor-Management Laws to the 
                         Smithsonian Institution

Sec. 341. Application of civil rights and labor-management laws to the 
          Smithsonian Institution.

             TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

Sec. 401. Short title.
Sec. 402. Title.
Sec. 403. General provisions.
Sec. 404. Vocational rehabilitation services.
Sec. 405. Research and training.
Sec. 406. Professional development and special projects and 
          demonstrations.
Sec. 407. National Council on Disability.
Sec. 408. Rights and advocacy.
Sec. 409. Employment opportunities for individuals with disabilities.
Sec. 410. Independent living services and centers for independent 
          living.
Sec. 411. Repeal.
Sec. 412. Helen Keller National Center Act.
Sec. 413. President's Committee on Employment of People With 
          Disabilities.
Sec. 414. Conforming amendments.

                       TITLE V--GENERAL PROVISIONS

Sec. 501. State unified plan.
Sec. 502. Definitions for indicators of performance.
Sec. 503. Incentive grants.
Sec. 504. Privacy.
Sec. 505. Buy-american requirements.
Sec. 506. Transition provisions.
Sec. 507. Effective date.

                 TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

SEC. 101. DEFINITIONS.

    In this title:
            (1) Adult.--Except in sections 127 and 132, the 
        term ``adult'' means an individual who is age 18 or 
        older.
            (2) Adult education; adult education and literacy 
        activities.--The terms ``adult education'' and ``adult 
        education and literacy activities'' have the meanings 
        given the terms in section 203.
            (3) Area vocational education school.--The term 
        ``area vocational education school'' has the meaning 
        given the term in section 521 of the Carl D. Perkins 
        Vocational and Applied Technology Education Act (20 
        U.S.C. 2471).
            (4) Basic skills deficient.--The term ``basic 
        skills deficient'' means, with respect to an 
        individual, that the individual has English reading, 
        writing, or computing skills at or below the 8th grade 
        level on a generally accepted standardized test or a 
        comparable score on a criterion-referenced test.
            (5) Case management.--The term ``case management'' 
        means the provision of a client-centered approach in 
        the delivery of services, designed--
                    (A) to prepare and coordinate comprehensive 
                employment plans, such as service strategies, 
                for participants to ensure access to necessary 
                workforce investment activities and supportive 
                services, using, where feasible, computer-based 
                technologies; and
                    (B) to provide job and career counseling 
                during program participation and after job 
                placement.
            (6) Chief elected official.--The term ``chief 
        elected official'' means--
                    (A) the chief elected executive officer of 
                a unit of general local government in a local 
                area; and
                    (B) in a case in which a local area 
                includes more than 1 unit of general local 
                government, the individuals designated under 
                the agreement described in section 
                117(c)(1)(B).
            (7) Community-based organization.--The term 
        ``community-based organization'' means a private 
        nonprofit organization that is representative of a 
        community or a significant segment of a community and 
        that has demonstrated expertise and effectiveness in 
        the field of workforce investment.
            (8) Customized training.--The term ``customized 
        training'' means training--
                    (A) that is designed to meet the special 
                requirements of an employer (including a group 
                of employers);
                    (B) that is conducted with a commitment by 
                the employer to employ an individual on 
                successful completion of the training; and
                    (C) for which the employer pays for not 
                less than 50 percent of the cost of the 
                training.
            (9) Dislocated worker.--The term ``dislocated 
        worker'' means an individual who--
                    (A)(i) has been terminated or laid off, or 
                who has received a notice of termination or 
                layoff, from employment;
                    (ii)(I) is eligible for or has exhausted 
                entitlement to unemployment compensation; or
                    (II) has been employed for a duration 
                sufficient to demonstrate, to the appropriate 
                entity at a one-stop center referred to in 
                section 134(c), attachment to the workforce, 
                but is not eligible for unemployment 
                compensation due to insufficient earnings or 
                having performed services for an employer that 
                were not covered under a State unemployment 
                compensation law; and
                    (iii) is unlikely to return to a previous 
                industry or occupation;
                    (B)(i) has been terminated or laid off, or 
                has received a notice of termination or layoff, 
                from employment as a result of any permanent 
                closure of, or any substantial layoff at, a 
                plant, facility, or enterprise;
                    (ii) is employed at a facility at which the 
                employer has made a general announcement that 
                such facility will close within 180 days; or
                    (iii) for purposes of eligibility to 
                receive services other than training services 
                described in section 134(d)(4), intensive 
                services described in section 134(d)(3), or 
                supportive services, is employed at a facility 
                at which the employer has made a general 
                announcement that such facility will close;
                    (C) was self-employed (including employment 
                as a farmer, a rancher, or a fisherman) but is 
                unemployed as a result of general economic 
                conditions in the community in which the 
                individual resides or because of natural 
                disasters; or
                    (D) is a displaced homemaker.
            (10) Displaced homemaker.--The term ``displaced 
        homemaker'' means an individual who has been providing 
        unpaid services to family members in the home and who--
                    (A) has been dependent on the income of 
                another family member but is no longer 
                supported by that income; and
                    (B) is unemployed or underemployed and is 
                experiencing difficulty in obtaining or 
                upgrading employment.
            (11) Economic development agencies.--The term 
        ``economic development agencies'' includes local 
        planning and zoning commissions or boards, community 
        development agencies, and other local agencies and 
        institutions responsible for regulating, promoting, or 
        assisting in local economic development.
            (12) Eligible provider.--The term ``eligible 
        provider'', used with respect to--
                    (A) training services, means a provider who 
                is identified in accordance with section 
                122(e)(3);
                    (B) intensive services, means a provider 
                who is identified or awarded a contract as 
                described in section 134(d)(3)(B);
                    (C) youth activities, means a provider who 
                is awarded a grant or contract in accordance 
                with section 123; or
                    (D) other workforce investment activities, 
                means a public or private entity selected to be 
                responsible for such activities, such as a one-
                stop operator designated or certified under 
                section 121(d).
            (13)  Eligible youth.--Except as provided in 
        subtitles C and D, the term ``eligible youth'' means an 
        individual who--
                    (A) is not less than age 14 and not more 
                than age 21;
                    (B) is a low-income individual; and
                    (C) is an individual who is 1 or more of 
                the following:
                            (i) Deficient in basic literacy 
                        skills.
                            (ii) A school dropout.
                            (iii) Homeless, a runaway, or a 
                        foster child.
                            (iv) Pregnant or a parent.
                            (v) An offender.
                            (vi) An individual who requires 
                        additional assistance to complete an 
                        educational program, or to secure and 
                        hold employment.
            (14) Employment and training activity.--The term 
        ``employment and training activity'' means an activity 
        described in section 134 that is carried out for an 
        adult or dislocated worker.
            (15) Family.--The term ``family'' means two or more 
        persons related by blood, marriage, or decree of court, 
        who are living in a single residence, and are included 
        in one or more of the following categories:
                    (A) A husband, wife, and dependent 
                children.
                    (B) A parent or guardian and dependent 
                children.
                    (C) A husband and wife.
            (16) Governor.--The term ``Governor'' means the 
        chief executive of a State.
            (17) Individual with a disability.--
                    (A) In general.--The term ``individual with 
                a disability'' means an individual with any 
                disability (as defined in section 3 of the 
                Americans with Disabilities Act of 1990 (42 
                U.S.C. 12102)).
                    (B) Individuals with disabilities.--The 
                term ``individuals with disabilities'' means 
                more than 1 individual with a disability.
            (18) Labor market area.--The term ``labor market 
        area'' means an economically integrated geographic area 
        within which individuals can reside and find employment 
        within a reasonable distance or can readily change 
        employment without changing their place of residence. 
        Such an area shall be identified in accordance with 
        criteria used by the Bureau of Labor Statistics of the 
        Department of Labor in defining such areas or similar 
        criteria established by a Governor.
            (19) Literacy.--The term ``literacy'' has the 
        meaning given the term in section 203.
            (20) Local area.--The term ``local area'' means a 
        local workforce investment area designated under 
        section 116.
            (21) Local board.--The term ``local board'' means a 
        local workforce investment board established under 
        section 117.
            (22) Local performance measure.--The term ``local 
        performance measure'' means a performance measure 
        established under section 136(c).
            (23) Local educational agency.--The term ``local 
        educational agency'' has the meaning given the term in 
        section 14101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 8801).
            (24) Lower living standard income level.--The term 
        ``lower living standard income level'' means that 
        income level (adjusted for regional, metropolitan, 
        urban, and rural differences and family size) 
        determined annually by the Secretary based on the most 
        recent lower living family budget issued by the 
        Secretary.
            (25) Low-income individual.--The term ``low-income 
        individual'' means an individual who--
                    (A) receives, or is a member of a family 
                that receives, cash payments under a Federal, 
                State, or local income-based public assistance 
                program;
                    (B) received an income, or is a member of a 
                family that received a total family income, for 
                the 6-month period prior to application for the 
                program involved (exclusive of unemployment 
                compensation, child support payments, payments 
                described in subparagraph (A), and old-age and 
                survivors insurance benefits received under 
                section 202 of the Social Security Act (42 
                U.S.C. 402)) that, in relation to family size, 
                does not exceed the higher of--
                            (i) the poverty line, for an 
                        equivalent period; or
                            (ii) 70 percent of the lower living 
                        standard income level, for an 
                        equivalent period;
                    (C) is a member of a household that 
                receives (or has been determined within the 6-
                month period prior to application for the 
                program involved to be eligible to receive) 
                food stamps pursuant to the Food Stamp Act of 
                1977 (7 U.S.C. 2011 et seq.);
                    (D) qualifies as a homeless individual, as 
                defined in subsections (a) and (c) of section 
                103 of the Stewart B. McKinney Homeless 
                Assistance Act (42 U.S.C. 11302);
                    (E) is a foster child on behalf of whom 
                State or local government payments are made; or
                    (F) in cases permitted by regulations 
                promulgated by the Secretary of Labor, is an 
                individual with a disability whose own income 
                meets the requirements of a program described 
                in subparagraph (A) or of subparagraph (B), but 
                who is a member of a family whose income does 
                not meet such requirements.
            (26) Nontraditional employment.--The term 
        ``nontraditional employment'' refers to occupations or 
        fields of work for which individuals from one gender 
        comprise less than 25 percent of the individuals 
        employed in each such occupation or field of work.
            (27) Offender.--The term ``offender'' means any 
        adult or juvenile--
                    (A) who is or has been subject to any stage 
                of the criminal justice process, for whom 
                services under this Act may be beneficial; or
                    (B) who requires assistance in overcoming 
                artificial barriers to employment resulting 
                from a record of arrest or conviction.
            (28) Older individual.--The term ``older 
        individual'' means an individual age 55 or older.
            (29) One-stop operator.--The term ``one-stop 
        operator'' means 1 or more entities designated or 
        certified under section 121(d).
            (30) One-stop partner.--The term ``one-stop 
        partner'' means--
                    (A) an entity described in section 
                121(b)(1); and
                    (B) an entity described in section 
                121(b)(2) that is participating, with the 
                approval of the local board and chief elected 
                official, in the operation of a one-stop 
                delivery system.
            (31) On-the-job training.--The term ``on-the-job 
        training'' means training by an employer that is 
        provided to a paid participant while engaged in 
        productive work in a job that--
                    (A) provides knowledge or skills essential 
                to the full and adequate performance of the 
                job;
                    (B) provides reimbursement to the employer 
                of up to 50 percent of the wage rate of the 
                participant, for the extraordinary costs of 
                providing the training and additional 
                supervision related to the training; and
                    (C) is limited in duration as appropriate 
                to the occupation for which the participant is 
                being trained, taking into account the content 
                of the training, the prior work experience of 
                the participant, and the service strategy of 
                the participant, as appropriate.
            (32) Outlying area.--The term ``outlying area'' 
        means the United States Virgin Islands, Guam, American 
        Samoa, the Commonwealth of the Northern Mariana 
        Islands, the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of 
        Palau.
            (33) Out-of-school youth.--The term ``out-of-school 
        youth'' means--
                    (A) an eligible youth who is a school 
                dropout; or
                    (B) an eligible youth who has received a 
                secondary school diploma or its equivalent but 
                is basic skills deficient, unemployed, or 
                underemployed.
            (34) Participant.--The term ``participant'' means 
        an individual who has been determined to be eligible to 
        participate in and who is receiving services (except 
        followup services authorized under this title) under a 
        program authorized by this title. Participation shall 
        be deemed to commence on the first day, following 
        determination of eligibility, on which the individual 
        began receiving subsidized employment, training, or 
        other services provided under this title.
            (35) Postsecondary educational institution.--The 
        term ``postsecondary educational institution'' means an 
        institution of higher education, as defined in section 
        481 of the Higher Education Act of 1965 (20 U.S.C. 
        1088).
            (36) Poverty line.--The term ``poverty line'' means 
        the poverty line (as defined by the Office of 
        Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
            (37) Public assistance.--The term ``public 
        assistance'' means Federal, State, or local government 
        cash payments for which eligibility is determined by a 
        needs or income test.
            (38) Rapid response activity.--The term ``rapid 
        response activity'' means an activity provided by a 
        State, or by an entity designated by a State, with 
        funds provided by the State under section 134(a)(1)(A), 
        in the case of a permanent closure or mass layoff at a 
        plant, facility, or enterprise, or a natural or other 
        disaster, that results in mass job dislocation, in 
        order to assist dislocated workers in obtaining 
        reemployment as soon as possible, with services 
        including--
                    (A) the establishment of onsite contact 
                with employers and employee representatives--
                            (i) immediately after the State is 
                        notified of a current or projected 
                        permanent closure or mass layoff; or
                            (ii) in the case of a disaster, 
                        immediately after the State is made 
                        aware of mass job dislocation as a 
                        result of such disaster;
                    (B) the provision of information and access 
                to available employment and training 
                activities;
                    (C) assistance in establishing a labor-
                management committee, voluntarily agreed to by 
                labor and management, with the ability to 
                devise and implement a strategy for assessing 
                the employment and training needs of dislocated 
                workers and obtaining services to meet such 
                needs;
                    (D) the provision of emergency assistance 
                adapted to the particular closure, layoff, or 
                disaster; and
                    (E) the provision of assistance to the 
                local community in developing a coordinated 
                response and in obtaining access to State 
                economic development assistance.
            (39) School dropout.--The term ``school dropout'' 
        means an individual who is no longer attending any 
        school and who has not received a secondary school 
        diploma or its recognized equivalent.
            (40) Secondary school.--The term ``secondary 
        school'' has the meaning given the term in section 
        14101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 8801).
            (41) Secretary.--The term ``Secretary'' means the 
        Secretary of Labor, and the term means such Secretary 
        for purposes of section 503.
            (42) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, and the Commonwealth of Puerto Rico.
            (43) State adjusted level of performance.--The term 
        ``State adjusted level of performance'' means a level 
        described in clause (iii) or (v) of section 
        136(b)(3)(A).
            (44) State board.--The term ``State board'' means a 
        State workforce investment board established under 
        section 111.
            (45) State performance measure.--The term ``State 
        performance measure'' means a performance measure 
        established under section 136(b).
            (46) Supportive services.--The term ``supportive 
        services'' means services such as transportation, child 
        care, dependent care, housing, and needs-related 
        payments, that are necessary to enable an individual to 
        participate in activities authorized under this title, 
        consistent with the provisions of this title.
            (47) Unemployed individual.--The term ``unemployed 
        individual'' means an individual who is without a job 
        and who wants and is available for work. The 
        determination of whether an individual is without a job 
        shall be made in accordance with the criteria used by 
        the Bureau of Labor Statistics of the Department of 
        Labor in defining individuals as unemployed.
            (48) Unit of general local government.--The term 
        ``unit of general local government'' means any general 
        purpose political subdivision of a State that has the 
        power to levy taxes and spend funds, as well as general 
        corporate and police powers.
            (49) Veteran; related definition.--
                    (A) Veteran.--The term ``veteran'' means an 
                individual who served in the active military, 
                naval, or air service, and who was discharged 
                or released from such service under conditions 
                other than dishonorable.
                    (B) Recently separated veteran.--The term 
                ``recently separated veteran'' means any 
                veteran who applies for participation under 
                this title within 48 months after the discharge 
                or release from active military, naval, or air 
                service.
            (50) Vocational education.--The term ``vocational 
        education'' has the meaning given the term in section 
        521 of the Carl D. Perkins Vocational and Applied 
        Technology Education Act (20 U.S.C. 2471).
            (51) Workforce investment activity.--The term 
        ``workforce investment activity'' means an employment 
        and training activity, and a youth activity.
            (52) Youth activity.--The term ``youth activity'' 
        means an activity described in section 129 that is 
        carried out for eligible youth (or as described in 
        section 129(c)(5)).
            (53) Youth council.--The term ``youth council'' 
        means a council established under section 117(h).

      Subtitle B--Statewide and Local Workforce Investment Systems

SEC. 106. PURPOSE.

    The purpose of this subtitle is to provide workforce 
investment activities, through statewide and local workforce 
investment systems, that increase the employment, retention, 
and earnings of participants, and increase occupational skill 
attainment by participants, and, as a result, improve the 
quality of the workforce, reduce welfare dependency, and 
enhance the productivity and competitiveness of the Nation.

                      CHAPTER 1--STATE PROVISIONS

SEC. 111. STATE WORKFORCE INVESTMENT BOARDS.

    (a) In General.--The Governor of a State shall establish a 
State workforce investment board to assist in the development 
of the State plan described in section 112 and to carry out the 
other functions described in subsection (d).
    (b) Membership.--
            (1) In general.--The State Board shall include--
                    (A) the Governor;
                    (B) 2 members of each chamber of the State 
                legislature, appointed by the appropriate 
                presiding officers of each such chamber; and
                    (C) representatives appointed by the 
                Governor, who are--
                            (i) representatives of business in 
                        the State, who--
                                    (I) are owners of 
                                businesses, chief executives or 
                                operating officers of 
                                businesses, and other business 
                                executives or employers with 
                                optimum policymaking or hiring 
                                authority, including members of 
                                local boards described in 
                                section 117(b)(2)(A)(i);
                                    (II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the State; and
                                    (III) are appointed from 
                                among individuals nominated by 
                                State business organizations 
                                and business trade 
                                associations;
                            (ii) chief elected officials 
                        (representing both cities and counties, 
                        where appropriate);
                            (iii) representatives of labor 
                        organizations, who have been nominated 
                        by State labor federations;
                            (iv) representatives of individuals 
                        and organizations that have experience 
                        with respect to youth activities;
                            (v) representatives of individuals 
                        and organizations that have experience 
                        and expertise in the delivery of 
                        workforce investment activities, 
                        including chief executive officers of 
                        community colleges and community-based 
                        organizations within the State;
                            (vi)(I) the lead State agency 
                        officials with responsibility for the 
                        programs and activities that are 
                        described in section 121(b) and carried 
                        out by one-stop partners; and
                            (II) in any case in which no lead 
                        State agency official has 
                        responsibility for such a program, 
                        service, or activity, a representative 
                        in the State with expertise relating to 
                        such program, service, or activity; and
                            (vii) such other representatives 
                        and State agency officials as the 
                        Governor may designate, such as the 
                        State agency officials responsible for 
                        economic development and juvenile 
                        justice programs in the State.
            (2) Authority and regional representation of board 
        members.--Members of the board that represent 
        organizations, agencies, or other entities shall be 
        individuals with optimum policymaking authority within 
        the organizations, agencies, or entities. The members 
        of the board shall represent diverse regions of the 
        State, including urban, rural, and suburban areas.
            (3) Majority.--A majority of the members of the 
        State Board shall be representatives described in 
        paragraph (1)(C)(i).
    (c) Chairman.--The Governor shall select a chairperson for 
the State Board from among the representatives described in 
subsection (b)(1)(C)(i).
    (d) Functions.--The State Board shall assist the Governor 
in--
            (1) development of the State plan;
            (2) development and continuous improvement of a 
        statewide system of activities that are funded under 
        this subtitle or carried out through a one-stop 
        delivery system described in section 134(c) that 
        receives funds under this subtitle (referred to in this 
        title as a ``statewide workforce investment system''), 
        including--
                    (A) development of linkages in order to 
                assure coordination and nonduplication among 
                the programs and activities described in 
                section 121(b); and
                    (B) review of local plans;
            (3) commenting at least once annually on the 
        measures taken pursuant to section 113(b)(14) of the 
        Carl D. Perkins Vocational and Applied Technology 
        Education Act (20 U.S.C 2323(b)(14));
            (4) designation of local areas as required in 
        section 116;
            (5) development of allocation formulas for the 
        distribution of funds for adult employment and training 
        activities and youth activities to local areas as 
        permitted under sections 128(b)(3)(B) and 133(b)(3)(B);
            (6) development and continuous improvement of 
        comprehensive State performance measures, including 
        State adjusted levels of performance, to assess the 
        effectiveness of the workforce investment activities in 
        the State as required under section 136(b);
            (7) preparation of the annual report to the 
        Secretary described in section 136(d);
            (8) development of the statewide employment 
        statistics system described in section 15(e) of the 
        Wagner-Peyser Act; and
            (9) development of an application for an incentive 
        grant under section 503.
    (e) Alternative Entity.--
            (1) In general.--For purposes of complying with 
        subsections (a), (b), and (c), a State may use any 
        State entity (including a State council, State 
        workforce development board, combination of regional 
        workforce development boards, or similar entity) that--
                    (A) was in existence on December 31, 1997;
                    (B)(i) was established pursuant to section 
                122 or title VII of the Job Training 
                Partnership Act, as in effect on December 31, 
                1997; or
                    (ii) is substantially similar to the State 
                board described in subsections (a), (b), and 
                (c); and
                    (C) includes representatives of business in 
                the State and representatives of labor 
                organizations in the State.
            (2) References.--References in this Act to a State 
        board shall be considered to include such an entity.
    (f) Conflict of Interest.--A member of a State board may 
not--
            (1) vote on a matter under consideration by the 
        State board--
                    (A) regarding the provision of services by 
                such member (or by an entity that such member 
                represents); or
                    (B) that would provide direct financial 
                benefit to such member or the immediate family 
                of such member; or
            (2) engage in any other activity determined by the 
        Governor to constitute a conflict of interest as 
        specified in the State plan.
    (g) Sunshine Provision.--The State board shall make 
available to the public, on a regular basis through open 
meetings, information regarding the activities of the State 
board, including information regarding the State plan prior to 
submission of the plan, information regarding membership, and, 
on request, minutes of formal meetings of the State board.

SEC. 112. STATE PLAN.

    (a) In General.--For a State to be eligible to receive an 
allotment under section 127 or 132, or to receive financial 
assistance under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), 
the Governor of the State shall submit to the Secretary for 
consideration by the Secretary, a single State plan (referred 
to in this title as the ``State plan'') that outlines a 5-year 
strategy for the statewide workforce investment system of the 
State and that meets the requirements of section 111 and this 
section.
    (b) Contents.--The State plan shall include--
            (1) a description of the State board, including a 
        description of the manner in which such board 
        collaborated in the development of the State plan and a 
        description of how the board will continue to 
        collaborate in carrying out the functions described in 
        section 111(d);
            (2) a description of State-imposed requirements for 
        the statewide workforce investment system;
            (3) a description of the State performance 
        accountability system developed for the workforce 
        investment activities to be carried out through the 
        statewide workforce investment system, that includes 
        information identifying State performance measures as 
        described in section 136(b)(3)(A)(ii);
            (4) information describing--
                    (A) the needs of the State with regard to 
                current and projected employment opportunities, 
                by occupation;
                    (B) the job skills necessary to obtain such 
                employment opportunities;
                    (C) the skills and economic development 
                needs of the State; and
                    (D) the type and availability of workforce 
                investment activities in the State;
            (5) an identification of local areas designated in 
        the State, including a description of the process used 
        for the designation of such areas;
            (6) an identification of criteria to be used by 
        chief elected officials for the appointment of members 
        of local boards based on the requirements of section 
        117;
            (7) the detailed plans required under section 8 of 
        the Wagner-Peyser Act (29 U.S.C. 49g);
            (8)(A) a description of the procedures that will be 
        taken by the State to assure coordination of and avoid 
        duplication among--
                    (i) workforce investment activities 
                authorized under this title;
                    (ii) other activities authorized under this 
                title;
                    (iii) programs authorized under the Wagner-
                Peyser Act (29 U.S.C. 49 et seq.), title II of 
                this Act, title I of the Rehabilitation Act of 
                1973 (29 U.S.C. 720 et seq.), part A of title 
                IV of the Social Security Act (42 U.S.C. 601 et 
                seq.), and section 6(d)(4) of the Food Stamp 
                Act of 1977 (7 U.S.C. 2015(d)(4)), activities 
                authorized under title V of the Older Americans 
                Act of 1965 (42 U.S.C. 3056 et seq.), and 
                postsecondary vocational education activities 
                authorized under the Carl D. Perkins Vocational 
                and Applied Technology Education Act (20 U.S.C. 
                2301 et seq.);
                    (iv) work programs authorized under section 
                6(o) of the Food Stamp Act of 1977 (7 U.S.C. 
                2015(o));
                    (v) activities authorized under chapter 2 
                of title II of the Trade Act of 1974 (19 U.S.C. 
                2271 et seq.);
                    (vi) activities authorized under chapter 41 
                of title 38, United States Code;
                    (vii) employment and training activities 
                carried out under the Community Services Block 
                Grant Act (42 U.S.C. 9901 et seq.);
                    (viii) activities authorized under the 
                National and Community Service Act of 1990 (42 
                U.S.C. 12501 et seq.);
                    (ix) employment and training activities 
                carried out by the Department of Housing and 
                Urban Development; and
                    (x) programs authorized under State 
                unemployment compensation laws (in accordance 
                with applicable Federal law); and
            (B) a description of the common data collection and 
        reporting processes used for the programs and 
        activities described in subparagraph (A);
            (9) a description of the process used by the State, 
        consistent with section 111(g), to provide an 
        opportunity for public comment, including comment by 
        representatives of businesses and representatives of 
        labor organizations, and input into development of the 
        plan, prior to submission of the plan;
            (10) information identifying how the State will use 
        funds the State receives under this subtitle to 
        leverage other Federal, State, local, and private 
        resources, in order to maximize the effectiveness of 
        such resources, and to expand the participation of 
        business, employees, and individuals in the statewide 
        workforce investment system;
            (11) assurances that the State will provide, in 
        accordance with section 184 for fiscal control and fund 
        accounting procedures that may be necessary to ensure 
        the proper disbursement of, and accounting for, funds 
        paid to the State through the allotments made under 
        sections 127 and 132;
            (12)(A) a description of the methods and factors 
        the State will use in distributing funds to local areas 
        for youth activities and adult employment and training 
        activities under sections 128(b)(3)(B) and 
        133(b)(3)(B), including--
                    (i) a description of how the individuals 
                and entities represented on the State board 
                were involved in determining such methods and 
                factors of distribution; and
                    (ii) a description of how the State 
                consulted with chief elected officials in local 
                areas throughout the State in determining such 
                distribution;
            (B) assurances that the funds will be distributed 
        equitably throughout the State, and that no local areas 
        will suffer significant shifts in funding from year to 
        year; and
            (C) a description of the formula prescribed by the 
        Governor pursuant to section 133(b)(2)(B) for the 
        allocation of funds to local areas for dislocated 
        worker employment and training activities;
            (13) information specifying the actions that 
        constitute a conflict of interest prohibited in the 
        State for purposes of sections 111(f) and 117(g);
            (14) with respect to the one-stop delivery systems 
        described in section 134(c) (referred to individually 
        in this title as a ``one-stop delivery system''), a 
        description of the strategy of the State for assisting 
        local areas in development and implementation of fully 
        operational one-stop delivery systems in the State;
            (15) a description of the appeals process referred 
        to in section 116(a)(5);
            (16) a description of the competitive process to be 
        used by the State to award grants and contracts in the 
        State for activities carried out under this title;
            (17) with respect to the employment and training 
        activities authorized in section 134--
                    (A) a description of--
                            (i) the employment and training 
                        activities that will be carried out 
                        with the funds received by the State 
                        through the allotment made under 
                        section 132;
                            (ii) how the State will provide 
                        rapid response activities to dislocated 
                        workers from funds reserved under 
                        section 133(a)(2) for such purposes, 
                        including the designation of an 
                        identifiable State rapid response 
                        dislocated worker unit to carry out 
                        statewide rapid response activities;
                            (iii) the procedures the local 
                        boards in the State will use to 
                        identify eligible providers of training 
                        services described in section 134(d)(4) 
                        (other than on-the-job training or 
                        customized training), as required under 
                        section 122; and
                            (iv) how the State will serve the 
                        employment and training needs of 
                        dislocated workers (including displaced 
                        homemakers), low-income individuals 
                        (including recipients of public 
                        assistance), individuals training for 
                        nontraditional employment, and other 
                        individuals with multiple barriers to 
                        employment (including older individuals 
                        and individuals with disabilities); and
                    (B) an assurance that veterans will be 
                afforded the employment and training activities 
                by the State, to the extent practicable; and
            (18) with respect to youth activities authorized in 
        section 129, information--
                    (A) describing the State strategy for 
                providing comprehensive services to eligible 
                youth, particularly those eligible youth who 
                are recognized as having significant barriers 
                to employment;
                    (B) identifying the criteria to be used by 
                local boards in awarding grants for youth 
                activities, including criteria that the 
                Governor and local boards will use to identify 
                effective and ineffective youth activities and 
                providers of such activities;
                    (C) describing how the State will 
                coordinate the youth activities carried out in 
                the State under section 129 with the services 
                provided by Job Corps centers in the State 
                (where such centers exist); and
                    (D) describing how the State will 
                coordinate youth activities described in 
                subparagraph (C) with activities carried out 
                through the youth opportunity grants under 
                section 169.
    (c) Plan Submission and Approval.--A State plan submitted 
to the Secretary under this section by a Governor shall be 
considered to be approved by the Secretary at the end of the 
90-day period beginning on the day the Secretary receives the 
plan, unless the Secretary makes a written determination, 
during the 90-day period, that--
            (1) the plan is inconsistent with the provisions of 
        this title; and
            (2) in the case of the portion of the plan 
        described in section 8(a) of the Wagner-Peyser Act (29 
        U.S.C. 49g(a)), the portion does not satisfy the 
        criteria for approval provided in section 8(d) of such 
        Act.
    (d) Modifications to Plan.--A State may submit 
modifications to a State plan in accordance with the 
requirements of this section and section 111 as necessary 
during the 5-year period covered by the plan.

                      CHAPTER 2--LOCAL PROVISIONS

SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS.

    (a) Designation of Areas.--
            (1) In general.--
                    (A) Process.--Except as provided in 
                subsection (b), and consistent with paragraphs 
                (2), (3), and (4), in order for a State to 
                receive an allotment under section 127 or 132, 
                the Governor of the State shall designate local 
                workforce investment areas within the State--
                            (i) through consultation with the 
                        State board; and
                            (ii) after consultation with chief 
                        elected officials and after 
                        consideration of comments received 
                        through the public comment process as 
                        described in section 112(b)(9).
                    (B) Considerations.--In making the 
                designation of local areas, the Governor shall 
                take into consideration the following:
                            (i) Geographic areas served by 
                        local educational agencies and 
                        intermediate educational agencies.
                            (ii) Geographic areas served by 
                        postsecondary educational institutions 
                        and area vocational education schools.
                            (iii) The extent to which such 
                        local areas are consistent with labor 
                        market areas.
                            (iv) The distance that individuals 
                        will need to travel to receive services 
                        provided in such local areas.
                            (v) The resources of such local 
                        areas that are available to effectively 
                        administer the activities carried out 
                        under this subtitle.
            (2) Automatic designation.--The Governor shall 
        approve any request for designation as a local area--
                    (A) from any unit of general local 
                government with a population of 500,000 or 
                more;
                    (B) of the area served by a rural 
                concentrated employment program grant recipient 
                of demonstrated effectiveness that served as a 
                service delivery area or substate area under 
                the Job Training Partnership Act, if the grant 
                recipient has submitted the request; and
                    (C) of an area that served as a service 
                delivery area under section 101(a)(4)(A)(ii) of 
                the Job Training Partnership Act (as in effect 
                on the day before the date of enactment of this 
                Act) in a State that has a population of not 
                more than 1,100,000 and a population density 
                greater than 900 persons per square mile.
            (3) Temporary and subsequent designation.--
                    (A) Criteria.--Notwithstanding paragraph 
                (2)(A), the Governor shall approve any request, 
                made not later than the date of submission of 
                the initial State plan under this subtitle, for 
                temporary designation as a local area from any 
                unit of general local government (including a 
                combination of such units) with a population of 
                200,000 or more that was a service delivery 
                area under the Job Training Partnership Act on 
                the day before the date of enactment of this 
                Act if the Governor determines that the area--
                            (i) performed successfully, in each 
                        of the last 2 years prior to the 
                        request for which data are available, 
                        in the delivery of services to 
                        participants under part A of title II 
                        and title III of the Job Training 
                        Partnership Act (as in effect on such 
                        day); and
                            (ii) has sustained the fiscal 
                        integrity of the funds used by the area 
                        to carry out activities under such part 
                        and title.
                    (B) Duration and subsequent designation.--A 
                temporary designation under this paragraph 
                shall be for a period of not more than 2 years, 
                after which the designation shall be extended 
                until the end of the period covered by the 
                State plan if the Governor determines that, 
                during the temporary designation period, the 
                area substantially met (as defined by the State 
                board) the local performance measures for the 
                local area and sustained the fiscal integrity 
                of the funds used by the area to carry out 
                activities under this subtitle.
                    (C) Technical assistance.--The Secretary 
                shall provide the States with technical 
                assistance in making the determinations 
                required by this paragraph. The Secretary shall 
                not issue regulations governing determinations 
                to be made under this paragraph.
                    (D) Performed successfully.--In this 
                paragraph, the term ``performed successfully'' 
                means that the area involved met or exceeded 
                the performance standards for activities 
                administered in the area that--
                            (i) are established by the 
                        Secretary for each year and modified by 
                        the adjustment methodology of the State 
                        (used to account for differences in 
                        economic conditions, participant 
                        characteristics, and combination of 
                        services provided from the combination 
                        assumed for purposes of the established 
                        standards of the Secretary); and
                            (ii)(I) if the area was designated 
                        as both a service delivery area and a 
                        substate area under the Job Training 
                        Partnership Act (as in effect on the 
                        day before the date of enactment of 
                        this Act)--
                                    (aa) relate to job 
                                retention and earnings, with 
                                respect to activities carried 
                                out under part A of title II of 
                                such Act (as in effect on such 
                                day); or
                                    (bb) relate to entry into 
                                employment, with respect to 
                                activities carried out under 
                                title III of such Act (as in 
                                effect on such day);
                            (II) if the area was designated 
                        only as a service delivery area under 
                        such Act (as in effect on such day), 
                        relate to the standards described in 
                        subclause (I)(aa); or
                            (III) if the area was only 
                        designated as a substate area under 
                        such Act (as in effect on such day), 
                        relate to the standards described in 
                        subclause (I)(bb) .
                    (E) Sustained the fiscal integrity.--In 
                this paragraph, the term ``sustained the fiscal 
                integrity'', used with respect to funds used by 
                a service delivery area or local area, means 
                that the Secretary has not made a final 
                determination during any of the last 3 years 
                for which data are available, prior to the date 
                of the designation request involved, that 
                either the grant recipient or the 
                administrative entity of the area misexpended 
                the funds due to willful disregard of the 
                requirements of the Act involved, gross 
                negligence, or failure to observe accepted 
                standards of administration.
            (4) Designation on recommendation of state board.--
        The Governor may approve a request from any unit of 
        general local government (including a combination of 
        such units) for designation (including temporary 
        designation) as a local area if the State board 
        determines, taking into account the factors described 
        in clauses (i) through (v) of paragraph (1)(B), and 
        recommends to the Governor, that such area should be so 
        designated.
            (5) Appeals.--A unit of general local government 
        (including a combination of such units) or grant 
        recipient that requests but is not granted designation 
        of an area as a local area under paragraph (2) or (3) 
        may submit an appeal to the State board under an appeal 
        process established in the State plan. If the appeal 
        does not result in such a designation, the Secretary, 
        after receiving a request for review from the unit or 
        grant recipient and on determining that the unit or 
        grant recipient was not accorded procedural rights 
        under the appeal process established in the State plan 
        or that the area meets the requirements of paragraph 
        (2) or (3), as appropriate, may require that the area 
        be designated as a local area under such paragraph.
    (b) Small States.--The Governor of any State that was a 
single State service delivery area under the Job Training 
Partnership Act as of July 1, 1998, may designate the State as 
a single State local area for the purposes of this title. In 
the case of such a designation, the Governor shall identify the 
State as a local area under section 112(b)(5).
    (c) Regional Planning and Cooperation.--
            (1) Planning.--As part of the process for 
        developing the State plan, a State may require regional 
        planning by local boards for a designated region in the 
        State. The State may require the local boards for a 
        designated region to participate in a regional planning 
        process that results in the establishment of regional 
        performance measures for workforce investment 
        activities authorized under this subtitle. The State 
        may award regional incentive grants to the designated 
        regions that meet or exceed the regional performance 
        measures.
            (2) Information sharing.--The State may require the 
        local boards for a designated region to share, in 
        feasible cases, employment statistics, information 
        about employment opportunities and trends, and other 
        types of information that would assist in improving the 
        performance of all local areas in the designated region 
        on local performance measures.
            (3) Coordination of services.--The State may 
        require the local boards for a designated region to 
        coordinate the provision of workforce investment 
        activities authorized under this subtitle, including 
        the provision of transportation and other supportive 
        services, so that services provided through the 
        activities may be provided across the boundaries of 
        local areas within the designated region.
            (4) Interstate regions.--Two or more States that 
        contain an interstate region that is a labor market 
        area, economic development region, or other appropriate 
        contiguous subarea of the States may designate the area 
        as a designated region for purposes of this subsection, 
        and jointly exercise the State functions described in 
        paragraphs (1) through (3).
            (5) Definitions.--In this subsection:
                    (A) Designated region.--The term 
                ``designated region'' means a combination of 
                local areas that are partly or completely in a 
                single labor market area, economic development 
                region, or other appropriate contiguous subarea 
                of a State, that is designated by the State, 
                except as provided in paragraph (4).
                    (B) Local board for a designated region.--
                The term ``local board for a designated 
                region'' means a local board for a local area 
                in a designated region.

SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

    (a) Establishment.--There shall be established in each 
local area of a State, and certified by the Governor of the 
State, a local workforce investment board, to set policy for 
the portion of the statewide workforce investment system within 
the local area (referred to in this title as a ``local 
workforce investment system'').
    (b) Membership.--
            (1) State criteria.--The Governor of the State, in 
        partnership with the State board, shall establish 
        criteria for use by chief elected officials in the 
        local areas for appointment of members of the local 
        boards in such local areas in accordance with the 
        requirements of paragraph (2).
            (2) Composition.--Such criteria shall require, at a 
        minimum, that the membership of each local board--
                    (A) shall include--
                            (i) representatives of business in 
                        the local area, who--
                                    (I) are owners of 
                                businesses, chief executives or 
                                operating officers of 
                                businesses, and other business 
                                executives or employers with 
                                optimum policymaking or hiring 
                                authority;
                                    (II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the local 
                                area; and
                                    (III) are appointed from 
                                among individuals nominated by 
                                local business organizations 
                                and business trade 
                                associations;
                            (ii) representatives of local 
                        educational entities, including 
                        representatives of local educational 
                        agencies, local school boards, entities 
                        providing adult education and literacy 
                        activities, and postsecondary 
                        educational institutions (including 
                        representatives of community colleges, 
                        where such entities exist), selected 
                        from among individuals nominated by 
                        regional or local educational agencies, 
                        institutions, or organizations 
                        representing such local educational 
                        entities;
                            (iii) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations, or (for a 
                        local area in which no employees are 
                        represented by such organizations), 
                        other representatives of employees;
                            (iv) representatives of community-
                        based organizations (including 
                        organizations representing individuals 
                        with disabilities and veterans, for a 
                        local area in which such organizations 
                        are present);
                            (v) representatives of economic 
                        development agencies, including private 
                        sector economic development entities; 
                        and
                            (vi) representatives of each of the 
                        one-stop partners; and
                    (B) may include such other individuals or 
                representatives of entities as the chief 
                elected official in the local area may 
                determine to be appropriate.
            (3) Authority of board members.--Members of the 
        board that represent organizations, agencies, or other 
        entities shall be individuals with optimum policymaking 
        authority within the organizations, agencies, or 
        entities.
            (4) Majority.--A majority of the members of the 
        local board shall be representatives described in 
        paragraph (2)(A)(i).
            (5) Chairperson.--The local board shall elect a 
        chairperson for the local board from among the 
        representatives described in paragraph (2)(A)(i).
    (c) Appointment and Certification of Board.--
            (1) Appointment of board members and assignment of 
        responsibilities.--
                    (A) In general.--The chief elected official 
                in a local area is authorized to appoint the 
                members of the local board for such area, in 
                accordance with the State criteria established 
                under subsection (b).
                    (B) Multiple units of local government in 
                area.--
                            (i) In general.--In a case in which 
                        a local area includes more than 1 unit 
                        of general local government, the chief 
                        elected officials of such units may 
                        execute an agreement that specifies the 
                        respective roles of the individual 
                        chief elected officials--
                                    (I) in the appointment of 
                                the members of the local board 
                                from the individuals nominated 
                                or recommended to be such 
                                members in accordance with the 
                                criteria established under 
                                subsection (b); and
                                    (II) in carrying out any 
                                other responsibilities assigned 
                                to such officials under this 
                                subtitle.
                            (ii) Lack of agreement.--If, after 
                        a reasonable effort, the chief elected 
                        officials are unable to reach agreement 
                        as provided under clause (i), the 
                        Governor may appoint the members of the 
                        local board from individuals so 
                        nominated or recommended.
                    (C) Concentrated employment programs.--In 
                the case of a local area designated in 
                accordance with section 116(a)(2)(B), the 
                governing body of the concentrated employment 
                program involved shall act in consultation with 
                the chief elected official in the local area to 
                appoint members of the local board, in 
                accordance with the State criteria established 
                under subsection (b), and to carry out any 
                other responsibility relating to workforce 
                investment activities assigned to such official 
                under this Act.
            (2) Certification.--
                    (A) In general.--The Governor shall, once 
                every 2 years, certify 1 local board for each 
                local area in the State.
                    (B) Criteria.--Such certification shall be 
                based on criteria established under subsection 
                (b) and, for a second or subsequent 
                certification, the extent to which the local 
                board has ensured that workforce investment 
                activities carried out in the local area have 
                enabled the local area to meet the local 
                performance measures.
                    (C) Failure to achieve certification.--
                Failure of a local board to achieve 
                certification shall result in reappointment and 
                certification of another local board for the 
                local area pursuant to the process described in 
                paragraph (1) and this paragraph.
            (3) Decertification.--
                    (A) Fraud, abuse, failure to carry out 
                functions.--Notwithstanding paragraph (2), the 
                Governor may decertify a local board, at any 
                time after providing notice and an opportunity 
                for comment, for--
                            (i) fraud or abuse; or
                            (ii) failure to carry out the 
                        functions specified for the local board 
                        in any of paragraphs (1) through (7) of 
                        subsection (d).
                    (B) Nonperformance.--Notwithstanding 
                paragraph (2), the Governor may decertify a 
                local board if a local area fails to meet the 
                local performance measures for such local area 
                for 2 consecutive program years (in accordance 
                with section 136(h)).
                    (C) Plan.--If the Governor decertifies a 
                local board for a local area under subparagraph 
                (A) or (B), the Governor may require that a new 
                local board be appointed and certified for the 
                local area pursuant to a reorganization plan 
                developed by the Governor, in consultation with 
                the chief elected official in the local area, 
                and in accordance with the criteria established 
                under subsection (b).
            (4) Single state area.--Notwithstanding subsection 
        (b) and paragraphs (1) and (2), if a State described in 
        section 116(b) indicates in the State plan that the 
        State will be treated as a local area for purposes of 
        the application of this title, the Governor may 
        designate the State board to carry out any of the 
        functions described in subsection (d).
    (d) Functions of Local Board.--The functions of the local 
board shall include the following:
            (1) Local plan.--Consistent with section 118, each 
        local board, in partnership with the chief elected 
        official for the local area involved, shall develop and 
        submit a local plan to the Governor.
            (2) Selection of operators and providers.--
                    (A) Selection of one-stop operators.--
                Consistent with section 121(d), the local 
                board, with the agreement of the chief elected 
                official--
                            (i) shall designate or certify one-
                        stop operators as described in section 
                        121(d)(2)(A); and
                            (ii) may terminate for cause the 
                        eligibility of such operators.
                    (B) Selection of youth providers.--
                Consistent with section 123, the local board 
                shall identify eligible providers of youth 
                activities in the local area by awarding grants 
                or contracts on a competitive basis, based on 
                the recommendations of the youth council.
                    (C) Identification of eligible providers of 
                training services.--Consistent with section 
                122, the local board shall identify eligible 
                providers of training services described in 
                section 134(d)(4) in the local area.
                    (D) Identification of eligible providers of 
                intensive services.--If the one-stop operator 
                does not provide intensive services in a local 
                area, the local board shall identify eligible 
                providers of intensive services described in 
                section 134(d)(3) in the local area by awarding 
                contracts.
            (3) Budget and administration.--
                    (A) Budget.--The local board shall develop 
                a budget for the purpose of carrying out the 
                duties of the local board under this section, 
                subject to the approval of the chief elected 
                official.
                    (B) Administration.--
                            (i) Grant recipient.--
                                    (I) In general.--The chief 
                                elected official in a local 
                                area shall serve as the local 
                                grant recipient for, and shall 
                                be liable for any misuse of, 
                                the grant funds allocated to 
                                the local area under sections 
                                128 and 133, unless the chief 
                                elected official reaches an 
                                agreement with the Governor for 
                                the Governor to act as the 
                                local grant recipient and bear 
                                such liability.
                                    (II) Designation.--In order 
                                to assist in the administration 
                                of the grant funds, the chief 
                                elected official or the 
                                Governor, where the Governor 
                                serves as the local grant 
                                recipient for a local area, may 
                                designate an entity to serve as 
                                a local grant subrecipient for 
                                such funds or as a local fiscal 
                                agent. Such designation shall 
                                not relieve the chief elected 
                                official or the Governor of the 
                                liability for any misuse of 
                                grant funds as described in 
                                subclause (I).
                                    (III) Disbursal.--The local 
                                grant recipient or an entity 
                                designated under subclause (II) 
                                shall disburse such funds for 
                                workforce investment activities 
                                at the direction of the local 
                                board, pursuant to the 
                                requirements of this title, if 
                                the direction does not violate 
                                a provision of this Act. The 
                                local grant recipient or entity 
                                designated under subclause (II) 
                                shall disburse the funds 
                                immediately on receiving such 
                                direction from the local board.
                            (ii) Staff.--The local board may 
                        employ staff.
                            (iii) Grants and donations.--The 
                        local board may solicit and accept 
                        grants and donations from sources other 
                        than Federal funds made available under 
                        this Act.
            (4) Program oversight.--The local board, in 
        partnership with the chief elected official, shall 
        conduct oversight with respect to local programs of 
        youth activities authorized under section 129, local 
        employment and training activities authorized under 
        section 134, and the one-stop delivery system in the 
        local area.
            (5) Negotiation of local performance measures.--The 
        local board, the chief elected official, and the 
        Governor shall negotiate and reach agreement on local 
        performance measures as described in section 136(c).
            (6) Employment statistics system.--The local board 
        shall assist the Governor in developing the statewide 
        employment statistics system described in section 15(e) 
        of the Wagner-Peyser Act.
            (7) Employer linkages.--The local board shall 
        coordinate the workforce investment activities 
        authorized under this subtitle and carried out in the 
        local area with economic development strategies and 
        develop other employer linkages with such activities.
            (8) Connecting, brokering, and coaching.--The local 
        board shall promote the participation of private sector 
        employers in the statewide workforce investment system 
        and ensure the effective provision, through the system, 
        of connecting, brokering, and coaching activities, 
        through intermediaries such as the one-stop operator in 
        the local area or through other organizations, to 
        assist such employers in meeting hiring needs.
    (e) Sunshine Provision.--The local board shall make 
available to the public, on a regular basis through open 
meetings, information regarding the activities of the local 
board, including information regarding the local plan prior to 
submission of the plan, and regarding membership, the 
designation and certification of one-stop operators, and the 
award of grants or contracts to eligible providers of youth 
activities, and on request, minutes of formal meetings of the 
local board.
    (f) Limitations.--
            (1) Training services.--
                    (A) In general.--Except as provided in 
                subparagraph (B), no local board may provide 
                training services described in section 
                134(d)(4).
                    (B) Waivers of training prohibition.--The 
                Governor of the State in which a local board is 
                located may, pursuant to a request from the 
                local board, grant a written waiver of the 
                prohibition set forth in subparagraph (A) 
                (relating to the provision of training 
                services) for a program of training services, 
                if the local board--
                            (i) submits to the Governor a 
                        proposed request for the waiver that 
                        includes--
                                    (I) satisfactory evidence 
                                that there is an insufficient 
                                number of eligible providers of 
                                such a program of training 
                                services to meet local demand 
                                in the local area;
                                    (II) information 
                                demonstrating that the board 
                                meets the requirements for an 
                                eligible provider of training 
                                services under section 122; and
                                    (III) information 
                                demonstrating that the program 
                                of training services prepares 
                                participants for an occupation 
                                that is in demand in the local 
                                area;
                            (ii) makes the proposed request 
                        available to eligible providers of 
                        training services and other interested 
                        members of the public for a public 
                        comment period of not less than 30 
                        days; and
                            (iii) includes, in the final 
                        request for the waiver, the evidence 
                        and information described in clause (i) 
                        and the comments received pursuant to 
                        clause (ii).
                    (C) Duration.--A waiver granted to a local 
                board under subparagraph (B) shall apply for a 
                period of not to exceed 1 year. The waiver may 
                be renewed for additional periods of not to 
                exceed 1 year, pursuant to requests from the 
                local board, if the board meets the 
                requirements of subparagraph (B) in making the 
                requests.
                    (D) Revocation.--The Governor may revoke a 
                waiver granted under this paragraph during the 
                appropriate period described in subparagraph 
                (C) if the State determines that the local 
                board involved has engaged in a pattern of 
                inappropriate referrals to training services 
                operated by the local board.
            (2) Core services; intensive services; designation 
        or certification as one-stop operators.--A local board 
        may provide core services described in section 
        134(d)(2) or intensive services described in section 
        134(d)(3) through a one-stop delivery system described 
        in section 134(c) or be designated or certified as a 
        one-stop operator only with the agreement of the chief 
        elected official and the Governor.
            (3) Limitation on authority.--Nothing in this Act 
        shall be construed to provide a local board with the 
        authority to mandate curricula for schools.
    (g) Conflict of Interest.--A member of a local board may 
not--
            (1) vote on a matter under consideration by the 
        local board--
                    (A) regarding the provision of services by 
                such member (or by an entity that such member 
                represents); or
                    (B) that would provide direct financial 
                benefit to such member or the immediate family 
                of such member; or
            (2) engage in any other activity determined by the 
        Governor to constitute a conflict of interest as 
        specified in the State plan.
    (h) Youth Council.--
            (1) Establishment.--There shall be established, as 
        a subgroup within each local board, a youth council 
        appointed by the local board, in cooperation with the 
        chief elected official for the local area.
            (2) Membership.--The membership of each youth 
        council--
                    (A) shall include--
                            (i) members of the local board 
                        described in subparagraph (A) or (B) of 
                        subsection (b)(2) with special interest 
                        or expertise in youth policy;
                            (ii) representatives of youth 
                        service agencies, including juvenile 
                        justice and local law enforcement 
                        agencies;
                            (iii) representatives of local 
                        public housing authorities;
                            (iv) parents of eligible youth 
                        seeking assistance under this subtitle;
                            (v) individuals, including former 
                        participants, and representatives of 
                        organizations, that have experience 
                        relating to youth activities; and
                            (vi) representatives of the Job 
                        Corps, as appropriate; and
                    (B) may include such other individuals as 
                the chairperson of the local board, in 
                cooperation with the chief elected official, 
                determines to be appropriate.
            (3) Relationship to local board.--Members of the 
        youth council who are not members of the local board 
        described in subparagraphs (A) and (B) of subsection 
        (b)(2) shall be voting members of the youth council and 
        nonvoting members of the board.
            (4) Duties.--The duties of the youth council 
        include--
                    (A) developing the portions of the local 
                plan relating to eligible youth, as determined 
                by the chairperson of the local board;
                    (B) subject to the approval of the local 
                board and consistent with section 123--
                            (i) recommending eligible providers 
                        of youth activities, to be awarded 
                        grants or contracts on a competitive 
                        basis by the local board to carry out 
                        the youth activities; and
                            (ii) conducting oversight with 
                        respect to the eligible providers of 
                        youth activities, in the local area;
                    (C) coordinating youth activities 
                authorized under section 129 in the local area; 
                and
                    (D) other duties determined to be 
                appropriate by the chairperson of the local 
                board.
    (i) Alternative Entity.--
            (1) In general.--For purposes of complying with 
        subsections (a), (b), and (c), and paragraphs (1) and 
        (2) of subsection (h), a State may use any local entity 
        (including a local council, regional workforce 
        development board, or similar entity) that--
                    (A) is established to serve the local area 
                (or the service delivery area that most closely 
                corresponds to the local area);
                    (B) is in existence on December 31, 1997;
                    (C)(i) is established pursuant to section 
                102 of the Job Training Partnership Act, as in 
                effect on December 31, 1997; or
                    (ii) is substantially similar to the local 
                board described in subsections (a), (b), and 
                (c), and paragraphs (1) and (2) of subsection 
                (h);
                    (D) includes--
                            (i) representatives of business in 
                        the local area; and
                            (ii)(I) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations; or
                            (II) (for a local area in which no 
                        employees are represented by such 
                        organizations), other representatives 
                        of employees in the local area.
            (2) References.--References in this Act to a local 
        board or a youth council shall be considered to include 
        such an entity or a subgroup of such an entity, 
        respectively.

SEC. 118. LOCAL PLAN.

    (a) In General.--Each local board shall develop and submit 
to the Governor a comprehensive 5-year local plan (referred to 
in this title as the ``local plan''), in partnership with the 
appropriate chief elected official. The plan shall be 
consistent with the State plan.
    (b) Contents.--The local plan shall include--
            (1) an identification of--
                    (A) the workforce investment needs of 
                businesses, jobseekers, and workers in the 
                local area;
                    (B) the current and projected employment 
                opportunities in the local area; and
                    (C) the job skills necessary to obtain such 
                employment opportunities;
            (2) a description of the one-stop delivery system 
        to be established or designated in the local area, 
        including--
                    (A) a description of how the local board 
                will ensure the continuous improvement of 
                eligible providers of services through the 
                system and ensure that such providers meet the 
                employment needs of local employers and 
                participants; and
                    (B) a copy of each memorandum of 
                understanding described in section 121(c) 
                (between the local board and each of the one-
                stop partners) concerning the operation of the 
                one-stop delivery system in the local area;
            (3) a description of the local levels of 
        performance negotiated with the Governor and chief 
        elected official pursuant to section 136(c), to be used 
        to measure the performance of the local area and to be 
        used by the local board for measuring the performance 
        of the local fiscal agent (where appropriate), eligible 
        providers, and the one-stop delivery system, in the 
        local area;
            (4) a description and assessment of the type and 
        availability of adult and dislocated worker employment 
        and training activities in the local area;
            (5) a description of how the local board will 
        coordinate workforce investment activities carried out 
        in the local area with statewide rapid response 
        activities, as appropriate;
            (6) a description and assessment of the type and 
        availability of youth activities in the local area, 
        including an identification of successful providers of 
        such activities;
            (7) a description of the process used by the local 
        board, consistent with subsection (c), to provide an 
        opportunity for public comment, including comment by 
        representatives of businesses and comment by 
        representatives of labor organizations, and input into 
        the development of the local plan, prior to submission 
        of the plan;
            (8) an identification of the entity responsible for 
        the disbursal of grant funds described in section 
        117(d)(3)(B)(i)(III), as determined by the chief 
        elected official or the Governor under section 
        117(d)(3)(B)(i);
            (9) a description of the competitive process to be 
        used to award the grants and contracts in the local 
        area for activities carried out under this subtitle; 
        and
            (10) such other information as the Governor may 
        require.
    (c) Process.--Prior to the date on which the local board 
submits a local plan under this section, the local board 
shall--
            (1) make available copies of a proposed local plan 
        to the public through such means as public hearings and 
        local news media;
            (2) allow members of the local board and members of 
        the public, including representatives of business and 
        representatives of labor organizations, to submit 
        comments on the proposed local plan to the local board, 
        not later than the end of the 30-day period beginning 
        on the date on which the proposed local plan is made 
        available; and
            (3) include with the local plan submitted to the 
        Governor under this section any such comments that 
        represent disagreement with the plan.
    (d) Plan Submission and Approval.--A local plan submitted 
to the Governor under this section shall be considered to be 
approved by the Governor at the end of the 90-day period 
beginning on the day the Governor receives the plan, unless the 
Governor makes a written determination during the 90-day period 
that--
            (1) deficiencies in activities carried out under 
        this subtitle have been identified, through audits 
        conducted under section 184 or otherwise, and the local 
        area has not made acceptable progress in implementing 
        corrective measures to address the deficiencies; or
            (2) the plan does not comply with this title.

          CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS

SEC. 121. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS.

    (a) In General.--Consistent with the State plan, the local 
board for a local area, with the agreement of the chief elected 
official for the local area, shall--
            (1) develop and enter into the memorandum of 
        understanding described in subsection (c) with one-stop 
        partners;
            (2) designate or certify one-stop operators under 
        subsection (d); and
            (3) conduct oversight with respect to the one-stop 
        delivery system in the local area.
    (b) One-Stop Partners.--
            (1) Required partners.--
                    (A) In general.--Each entity that carries 
                out a program or activities described in 
                subparagraph (B) shall--
                            (i) make available to participants, 
                        through a one-stop delivery system, the 
                        services described in section 134(d)(2) 
                        that are applicable to such program or 
                        activities; and
                            (ii) participate in the operation 
                        of such system consistent with the 
                        terms of the memorandum described in 
                        subsection (c), and with the 
                        requirements of the Federal law in 
                        which the program or activities are 
                        authorized.
                    (B) Programs and activities.--The programs 
                and activities referred to in subparagraph (A) 
                consist of--
                            (i) programs authorized under this 
                        title;
                            (ii) programs authorized under the 
                        Wagner-Peyser Act (29 U.S.C. 49 et 
                        seq.);
                            (iii) adult education and literacy 
                        activities authorized under title II;
                            (iv) programs authorized under 
                        title I of the Rehabilitation Act of 
                        1973 (29 U.S.C. 720 et seq.);
                            (v) programs authorized under 
                        section 403(a)(5) of the Social 
                        Security Act (42 U.S.C. 603(a)(5)) (as 
                        added by section 5001 of the Balanced 
                        Budget Act of 1997);
                            (vi) activities authorized under 
                        title V of the Older Americans Act of 
                        1965 (42 U.S.C. 3056 et seq.);
                            (vii) postsecondary vocational 
                        education activities authorized under 
                        the Carl D. Perkins Vocational and 
                        Applied Technology Education Act (20 
                        U.S.C. 2301 et seq.);
                            (viii) activities authorized under 
                        chapter 2 of title II of the Trade Act 
                        of 1974 (19 U.S.C. 2271 et seq.);
                            (ix) activities authorized under 
                        chapter 41 of title 38, United States 
                        Code;
                            (x) employment and training 
                        activities carried out under the 
                        Community Services Block Grant Act (42 
                        U.S.C. 9901 et seq.);
                            (xi) employment and training 
                        activities carried out by the 
                        Department of Housing and Urban 
                        Development; and
                            (xii) programs authorized under 
                        State unemployment compensation laws 
                        (in accordance with applicable Federal 
                        law).
            (2) Additional partners.--
                    (A) In general.--In addition to the 
                entities described in paragraph (1), other 
                entities that carry out a human resource 
                program described in subparagraph (B) may--
                            (i) make available to participants, 
                        through the one-stop delivery system, 
                        the services described in section 
                        134(d)(2) that are applicable to such 
                        program; and
                            (ii) participate in the operation 
                        of such system consistent with the 
                        terms of the memorandum described in 
                        subsection (c), and with the 
                        requirements of the Federal law in 
                        which the program is authorized;
                if the local board and chief elected official 
                involved approve such participation.
                    (B) Programs.--The programs referred to in 
                subparagraph (A) may include--
                            (i) programs authorized under part 
                        A of title IV of the Social Security 
                        Act (42 U.S.C. 601 et seq.);
                            (ii) programs authorized under 
                        section 6(d)(4) of the Food Stamp Act 
                        of 1977 (7 U.S.C. 2015(d)(4));
                            (iii) work programs authorized 
                        under section 6(o) of the Food Stamp 
                        Act of 1977 (7 U.S.C. 2015(o));
                            (iv) programs authorized under the 
                        National and Community Service Act of 
                        1990 (42 U.S.C. 12501 et seq.); and
                            (v) other appropriate Federal, 
                        State, or local programs, including 
                        programs in the private sector.
    (c) Memorandum of Understanding.--
            (1) Development.--The local board, with the 
        agreement of the chief elected official, shall develop 
        and enter into a memorandum of understanding (between 
        the local board and the one-stop partners), consistent 
        with paragraph (2), concerning the operation of the 
        one-stop delivery system in the local area.
            (2) Contents.--Each memorandum of understanding 
        shall contain--
                    (A) provisions describing--
                            (i) the services to be provided 
                        through the one-stop delivery system;
                            (ii) how the costs of such services 
                        and the operating costs of the system 
                        will be funded;
                            (iii) methods for referral of 
                        individuals between the one-stop 
                        operator and the one-stop partners, for 
                        the appropriate services and 
                        activities; and
                            (iv) the duration of the memorandum 
                        and the procedures for amending the 
                        memorandum during the term of the 
                        memorandum; and
                    (B) such other provisions, consistent with 
                the requirements of this title, as the parties 
                to the agreement determine to be appropriate.
    (d) One-Stop Operators.--
            (1) Designation and certification.--Consistent with 
        paragraphs (2) and (3), the local board, with the 
        agreement of the chief elected official, is authorized 
        to designate or certify one-stop operators and to 
        terminate for cause the eligibility of such operators.
            (2) Eligibility.--To be eligible to receive funds 
        made available under this subtitle to operate a one-
        stop center referred to in section 134(c), an entity 
        (which may be a consortium of entities)--
                    (A) shall be designated or certified as a 
                one-stop operator--
                            (i) through a competitive process; 
                        or
                            (ii) in accordance with an 
                        agreement reached between the local 
                        board and a consortium of entities 
                        that, at a minimum, includes 3 or more 
                        of the one-stop partners described in 
                        subsection (b)(1); and
                    (B) may be a public or private entity, or 
                consortium of entities, of demonstrated 
                effectiveness, located in the local area, which 
                may include--
                            (i) a postsecondary educational 
                        institution;
                            (ii) an employment service agency 
                        established under the Wagner-Peyser Act 
                        (29 U.S.C. 49 et seq.), on behalf of 
                        the local office of the agency;
                            (iii) a private, nonprofit 
                        organization (including a community-
                        based organization);
                            (iv) a private for-profit entity;
                            (v) a government agency; and
                            (vi) another interested 
                        organization or entity, which may 
                        include a local chamber of commerce or 
                        other business organization.
            (3) Exception.--Elementary schools and secondary 
        schools shall not be eligible for designation or 
        certification as one-stop operators, except that 
        nontraditional public secondary schools and area 
        vocational education schools shall be eligible for such 
        designation or certification.
    (e) Established One-Stop Delivery System.--If a one-stop 
delivery system has been established in a local area prior to 
the date of enactment of this Act, the local board, the chief 
elected official, and the Governor involved may agree to 
certify an entity carrying out activities through the system as 
a one-stop operator for purposes of subsection (d), consistent 
with the requirements of subsection (b), of the memorandum of 
understanding, and of section 134(c).

SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING SERVICES.

    (a) Eligibility Requirements.--
            (1) In general.--Except as provided in subsection 
        (h), to be identified as an eligible provider of 
        training services described in section 134(d)(4) 
        (referred to in this section as ``training services'') 
        in a local area and to be eligible to receive funds 
        made available under section 133(b) for the provision 
        of training services, a provider of such services shall 
        meet the requirements of this section.
            (2) Providers.--Subject to the provisions of this 
        section, to be eligible to receive the funds, the 
        provider shall be--
                    (A) a postsecondary educational institution 
                that--
                            (i) is eligible to receive Federal 
                        funds under title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1070 
                        et seq.); and
                            (ii) provides a program that leads 
                        to an associate degree, baccalaureate 
                        degree, or certificate;
                    (B) an entity that carries out programs 
                under the Act of August 16, 1937 (commonly 
                known as the ``National Apprenticeship Act''; 
                50 Stat. 664, chapter 663; 29 U.S.C. 50 et 
                seq.); or
                    (C) another public or private provider of a 
                program of training services.
    (b) Initial Eligibility Determination.--
            (1) Postsecondary educational institutions and 
        entities carrying out apprenticeship programs.--To be 
        initially eligible to receive funds as described in 
        subsection (a) to carry out a program described in 
        subparagraph (A) or (B) of subsection (a)(2), a 
        provider described in subparagraph (A) or (B), 
        respectively, of subsection (a)(2) shall submit an 
        application, to the local board for the local area in 
        which the provider desires to provide training 
        services, at such time, in such manner, and containing 
        such information as the local board may require.
            (2) Other eligible providers.--
                    (A) Procedure.--Each Governor of a State 
                shall establish a procedure for use by local 
                boards in the State in determining the initial 
                eligibility of a provider described in 
                subsection (a)(2)(C) to receive funds as 
                described in subsection (a) for a program of 
                training services, including the initial 
                eligibility of--
                            (i) a postsecondary educational 
                        institution to receive such funds for a 
                        program not described in subsection 
                        (a)(2)(A); and
                            (ii) a provider described in 
                        subsection (a)(2)(B) to receive such 
                        funds for a program not described in 
                        subsection (a)(2)(B).
                    (B) Recommendations.--In developing such 
                procedure, the Governor shall solicit and take 
                into consideration the recommendations of local 
                boards and providers of training services 
                within the State.
                    (C) Opportunity to submit comments.--The 
                Governor shall provide an opportunity, during 
                the development of the procedure, for 
                interested members of the public, including 
                representatives of business and labor 
                organizations, to submit comments on such 
                procedure.
                    (D) Requirements.--In establishing the 
                procedure, the Governor shall require that, to 
                be initially eligible to receive funds as 
                described in subsection (a) for a program, a 
                provider described in subsection (a)(2)(C)--
                            (i) shall submit an application, to 
                        the local board for the local area in 
                        which the provider desires to provide 
                        training services, at such time and in 
                        such manner as may be required, and 
                        containing a description of the 
                        program;
                            (ii) if the provider provides 
                        training services through a program on 
                        the date of application, shall include 
                        in the application an appropriate 
                        portion of the performance information 
                        and program cost information described 
                        in subsection (d) for the program, as 
                        specified in the procedure, and shall 
                        meet appropriate levels of performance 
                        for the program, as specified in the 
                        procedure; and
                            (iii) if the provider does not 
                        provide training services on such date, 
                        shall meet appropriate requirements, as 
                        specified in the procedure.
    (c) Subsequent Eligibility Determination.--
            (1) Procedure.--Each Governor of a State shall 
        establish a procedure for use by local boards in the 
        State in determining the eligibility of a provider 
        described in subsection (a)(2) to continue to receive 
        funds as described in subsection (a) for a program 
        after an initial period of eligibility under subsection 
        (b) (referred to in this section as ``subsequent 
        eligibility'').
            (2) Recommendations.--In developing such procedure, 
        the Governor shall solicit and take into consideration 
        the recommendations of local boards and providers of 
        training services within the State.
            (3) Opportunity to submit comments.--The Governor 
        shall provide an opportunity, during the development of 
        the procedure, for interested members of the public, 
        including representatives of business and labor 
        organizations, to submit comments on such procedure.
            (4) Considerations.--In developing such procedure, 
        the Governor shall ensure that the procedure requires 
        the local boards to take into consideration, in making 
        the determinations of subsequent eligibility--
                    (A) the specific economic, geographic, and 
                demographic factors in the local areas in which 
                providers seeking eligibility are located; and
                    (B) the characteristics of the populations 
                served by providers seeking eligibility, 
                including the demonstrated difficulties in 
                serving such populations, where applicable.
            (5) Requirements.--In establishing the procedure, 
        the Governor shall require that, to be eligible to 
        continue to receive funds as described in subsection 
        (a) for a program after the initial period of 
        eligibility, a provider described in subsection (a)(2) 
        shall--
                    (A) submit the performance information and 
                program cost information described in 
                subsection (d)(1) for the program and any 
                additional information required to be submitted 
                in accordance with subsection (d)(2) for the 
                program annually to the appropriate local board 
                at such time and in such manner as may be 
                required; and
                    (B) annually meet the performance levels 
                described in paragraph (6) for the program, as 
                demonstrated utilizing quarterly records 
                described in section 136, in a manner 
                consistent with section 136.
            (6) Levels of performance.--
                    (A) In general.--At a minimum, the 
                procedure described in paragraph (1) shall 
                require the provider to meet minimum acceptable 
                levels of performance based on the performance 
                information referred to in paragraph (5)(A).
                    (B) Higher levels of performance 
                eligibility.--The local board may require 
                higher levels of performance than the levels 
                referred to in subparagraph (A) for subsequent 
                eligibility to receive funds as described in 
                subsection (a).
    (d) Performance and Cost Information.--
            (1) Required information.--For a provider of 
        training services to be determined to be subsequently 
        eligible under subsection (c) to receive funds as 
        described in subsection (a), such provider shall, under 
        subsection (c), submit--
                    (A) verifiable program-specific performance 
                information consisting of--
                            (i) program information, 
                        including--
                                    (I) the program completion 
                                rates for all individuals 
                                participating in the applicable 
                                program conducted by the 
                                provider;
                                    (II) the percentage of all 
                                individuals participating in 
                                the applicable program who 
                                obtain unsubsidized employment, 
                                which may also include 
                                information specifying the 
                                percentage of the individuals 
                                who obtain unsubsidized 
                                employment in an occupation 
                                related to the program 
                                conducted; and
                                    (III) the wages at 
                                placement in employment of all 
                                individuals participating in 
                                the applicable program; and
                            (ii) training services information 
                        for all participants who received 
                        assistance under section 134 to 
                        participate in the applicable program, 
                        including--
                                    (I) the percentage of 
                                participants who have completed 
                                the applicable program and who 
                                are placed in unsubsidized 
                                employment;
                                    (II) the retention rates in 
                                unsubsidized employment of 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment;
                                    (III) the wages received by 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment involved; and
                                    (IV) where appropriate, the 
                                rates of licensure or 
                                certification, attainment of 
                                academic degrees or 
                                equivalents, or attainment of 
                                other measures of skills, of 
                                the graduates of the applicable 
                                program; and
                    (B) information on program costs (such as 
                tuition and fees) for participants in the 
                applicable program.
            (2) Additional information.--Subject to paragraph 
        (3), in addition to the performance information 
        described in paragraph (1)--
                    (A) the Governor may require that a 
                provider submit, under subsection (c), such 
                other verifiable program-specific performance 
                information as the Governor determines to be 
                appropriate to obtain such subsequent 
                eligibility, which may include information 
                relating to--
                            (i) retention rates in employment 
                        and the subsequent wages of all 
                        individuals who complete the applicable 
                        program;
                            (ii) where appropriate, the rates 
                        of licensure or certification of all 
                        individuals who complete the program; 
                        and
                            (iii) the percentage of individuals 
                        who complete the program who attain 
                        industry-recognized occupational skills 
                        in the subject, occupation, or industry 
                        for which training is provided through 
                        the program, where applicable; and
                    (B) the Governor, or the local board, may 
                require a provider to submit, under subsection 
                (c), other verifiable program-specific 
                performance information to obtain such 
                subsequent eligibility.
            (3) Conditions.--
                    (A) In general.--If the Governor or a local 
                board requests additional information under 
                paragraph (2) that imposes extraordinary costs 
                on providers, or if providers experience 
                extraordinary costs in the collection of 
                information required under paragraph 
                (1)(A)(ii)), the Governor or the local board 
                shall provide access to cost-effective methods 
                for the collection of the information involved, 
                or the Governor shall provide additional 
                resources to assist providers in the collection 
                of such information from funds made available 
                as described in sections 128(a) and 133(a)(1), 
                as appropriate.
                    (B) Higher education eligibility 
                requirements.--The local board and the 
                designated State agency described in subsection 
                (i) may accept program-specific performance 
                information consistent with the requirements 
                for eligibility under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.) 
                from a provider for purposes of enabling the 
                provider to fulfill the applicable requirements 
                of this subsection, if such information is 
                substantially similar to the information 
                otherwise required under this subsection.
    (e) Local Identification.--
            (1) In general.--The local board shall place on a 
        list providers submitting an application under 
        subsection (b)(1) and providers determined to be 
        initially eligible under subsection (b)(2), and retain 
        on the list providers determined to be subsequently 
        eligible under subsection (c), to receive funds as 
        described in subsection (a) for the provision of 
        training services in the local area served by the local 
        board. The list of providers shall be accompanied by 
        any performance information and program cost 
        information submitted under subsection (b) or (c) by 
        the provider.
            (2) Submission to state agency.--On placing or 
        retaining a provider on the list, the local board shall 
        submit, to the designated State agency described in 
        subsection (i), the list and the performance 
        information and program cost information referred to in 
        paragraph (1). If the agency determines, within 30 days 
        after the date of the submission, that the provider 
        does not meet the performance levels described in 
        subsection (c)(6) for the program (where applicable), 
        the agency may remove the provider from the list for 
        the program. The agency may not remove from the list an 
        agency submitting an application under subsection 
        (b)(1).
            (3) Identification of eligible providers.--A 
        provider who is placed or retained on the list under 
        paragraph (1), and is not removed by the designated 
        State agency under paragraph (2), for a program, shall 
        be considered to be identified as an eligible provider 
        of training services for the program.
            (4) Availability.--
                    (A) State list.--The designated State 
                agency shall compile a single list of the 
                providers identified under paragraph (3) from 
                all local areas in the State and disseminate 
                such list, and the performance information and 
                program cost information described in paragraph 
                (1), to the one-stop delivery systems within 
                the State. Such list and information shall be 
                made widely available to participants in 
                employment and training activities authorized 
                under section 134 and others through the one-
                stop delivery system.
                    (B) Selection from state list.--Individuals 
                eligible to receive training services under 
                section 134(d)(4) shall have the opportunity to 
                select any of the eligible providers, from any 
                of the local areas in the State, that are 
                included on the list described in subparagraph 
                (A) to provide the services, consistent with 
                the requirements of section 134.
            (5) Acceptance of individual training accounts by 
        other states.--States may enter into agreements, on a 
        reciprocal basis, to permit eligible providers of 
        training services in a State to accept individual 
        training accounts provided in another State.
    (f) Enforcement.--
            (1) Accuracy of information.--If the designated 
        State agency, after consultation with the local board 
        involved, determines that an eligible provider or 
        individual supplying information on behalf of the 
        provider intentionally supplies inaccurate information 
        under this section, the agency shall terminate the 
        eligibility of the provider to receive funds described 
        in subsection (a) for any program for a period of time, 
        but not less than 2 years.
            (2) Noncompliance.--If the designated State agency, 
        or the local board working with the State agency, 
        determines that an eligible provider described in 
        subsection (a) substantially violates any requirement 
        under this Act, the agency, or the local board working 
        with the State agency, may terminate the eligibility of 
        such provider to receive funds described in subsection 
        (a) for the program involved or take such other action 
        as the agency or local board determines to be 
        appropriate.
            (3) Repayment.--A provider whose eligibility is 
        terminated under paragraph (1) or (2) for a program 
        shall be liable for repayment of all funds described in 
        subsection (a) received for the program during any 
        period of noncompliance described in such paragraph.
            (4) Construction.--This subsection and subsection 
        (g) shall be construed to provide remedies and 
        penalties that supplement, but do not supplant, other 
        civil and criminal remedies and penalties.
    (g) Appeal.--The Governor shall establish procedures for 
providers of training services to appeal a denial of 
eligibility by the local board or the designated State agency 
under subsection (b), (c), or (e), a termination of eligibility 
or other action by the board or agency under subsection (f), or 
a denial of eligibility by a one-stop operator under subsection 
(h). Such procedures shall provide an opportunity for a hearing 
and prescribe appropriate time limits to ensure prompt 
resolution of the appeal.
    (h) On-the-Job Training or Customized Training Exception.--
            (1) In general.--Providers of on-the-job training 
        or customized training shall not be subject to the 
        requirements of subsections (a) through (e).
            (2) Collection and dissemination of information.--A 
        one-stop operator in a local area shall collect such 
        performance information from on-the-job training and 
        customized training providers as the Governor may 
        require, determine whether the providers meet such 
        performance criteria as the Governor may require, and 
        disseminate information identifying providers that meet 
        the criteria as eligible providers, and the performance 
        information, through the one-stop delivery system. 
        Providers determined to meet the criteria shall be 
        considered to be identified as eligible providers of 
        training services.
    (i) Administration.--The Governor shall designate a State 
agency to make the determinations described in subsection 
(e)(2), take the enforcement actions described in subsection 
(f), and carry out other duties described in this section.

SEC. 123. IDENTIFICATION OF ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

    From funds allocated under paragraph (2)(A) or (3) of 
section 128(b) to a local area, the local board for such area 
shall identify eligible providers of youth activities by 
awarding grants or contracts on a competitive basis, based on 
the recommendations of the youth council and on the criteria 
contained in the State plan, to the providers to carry out the 
activities, and shall conduct oversight with respect to the 
providers, in the local area.

                      CHAPTER 4--YOUTH ACTIVITIES

SEC. 126. GENERAL AUTHORIZATION.

    The Secretary shall make an allotment under section 
127(b)(1)(C) to each State that meets the requirements of 
section 112 and a grant to each outlying area that complies 
with the requirements of this title, to assist the State or 
outlying area, and to enable the State or outlying area to 
assist local areas, for the purpose of providing workforce 
investment activities for eligible youth in the State or 
outlying area and in the local areas.

SEC. 127. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
            (1) for each fiscal year in which the amount 
        appropriated under section 137(a) exceeds 
        $1,000,000,000, reserve a portion determined under 
        subsection (b)(1)(A) of the amount appropriated under 
        section 137(a) for use under sections 167 (relating to 
        migrant and seasonal farmworker programs) and 169 
        (relating to youth opportunity grants); and
            (2) use the remainder of the amount appropriated 
        under section 137(a) for a fiscal year to make 
        allotments and grants in accordance with subparagraphs 
        (B) and (C) of subsection (b)(1) and make funds 
        available for use under section 166 (relating to Native 
        American programs).
    (b) Allotment Among States.--
            (1) Youth activities.--
                    (A) Youth opportunity grants.--
                            (i) In general.--For each fiscal 
                        year in which the amount appropriated 
                        under section 137(a) exceeds 
                        $1,000,000,000, the Secretary shall 
                        reserve a portion of the amount to 
                        provide youth opportunity grants and 
                        other activities under section 169 
                        (relating to youth opportunity grants) 
                        and provide youth activities under 
                        section 167 (relating to migrant and 
                        seasonal farmworker programs).
                            (ii) Portion.--The portion referred 
                        to in clause (i) shall equal, for a 
                        fiscal year--
                                    (I) except as provided in 
                                subclause (II), the difference 
                                obtained by subtracting 
                                $1,000,000,000 from the amount 
                                appropriated under section 
                                137(a) for the fiscal year; or
                                    (II) for any fiscal year in 
                                which the amount is 
                                $1,250,000,000 or greater, 
                                $250,000,000.
                            (iii) Youth activities for 
                        farmworkers.--From the portion 
                        described in clause (i) for a fiscal 
                        year, the Secretary shall make 
                        available 4 percent of such portion to 
                        provide youth activities under section 
                        167.
                            (iv) Role model academy project.--
                        From the portion described in clause 
                        (i) for fiscal year 1999, the Secretary 
                        shall make available such sums as the 
                        Secretary determines to be appropriate 
                        to carry out section 169(g).
                    (B) Outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection (a)(2) 
                        for a fiscal year, the Secretary shall 
                        reserve not more than \1/4\ of 1 
                        percent of the amount appropriated 
                        under section 137(a) for the fiscal 
                        year--
                                    (I) to provide assistance 
                                to the outlying areas to carry 
                                out youth activities and 
                                statewide workforce investment 
                                activities; and
                                    (II) for each of fiscal 
                                years 1999, 2000, and 2001, to 
                                carry out the competition 
                                described in clause (ii), 
                                except that the funds reserved 
                                to carry out such clause for 
                                any such fiscal year shall not 
                                exceed the amount reserved for 
                                the Freely Associated States 
                                for fiscal year 1997, from 
                                amounts reserved under sections 
                                252(a) and 262(a)(1) of the Job 
                                Training Partnership Act (as in 
                                effect on the day before the 
                                date of enactment of this Act).
                            (ii) Limitation for freely 
                        associated states.--
                                    (I) Competitive grants.--
                                The Secretary shall use funds 
                                described in clause (i)(II) to 
                                award grants to Guam, American 
                                Samoa, the Commonwealth of the 
                                Northern Mariana Islands, and 
                                the Freely Associated States to 
                                carry out youth activities and 
                                statewide workforce investment 
                                activities.
                                    (II) Award basis.--The 
                                Secretary shall award grants 
                                pursuant to subclause (I) on a 
                                competitive basis and pursuant 
                                to the recommendations of 
                                experts in the field of 
                                employment and training, 
                                working through the Pacific 
                                Region Educational Laboratory 
                                in Honolulu, Hawaii.
                                    (III) Assistance 
                                requirements.--Any Freely 
                                Associated State that desires 
                                to receive assistance under 
                                this subparagraph shall submit 
                                an application to the Secretary 
                                and shall include in the 
                                application for assistance--
                                            (aa) information 
                                        demonstrating that the 
                                        Freely Associated State 
                                        will meet all 
                                        conditions that apply 
                                        to States under this 
                                        title;
                                            (bb) an assurance 
                                        that, notwithstanding 
                                        any other provision of 
                                        this title, the Freely 
                                        Associated State will 
                                        use such assistance 
                                        only for the direct 
                                        provision of services; 
                                        and
                                            (cc) such other 
                                        information and 
                                        assurances as the 
                                        Secretary may require.
                                    (IV) Termination of 
                                eligibility.--Notwithstanding 
                                any other provision of law, the 
                                Freely Associated States shall 
                                not receive any assistance 
                                under this subparagraph for any 
                                program year that begins after 
                                September 30, 2001.
                                    (V) Administrative costs.--
                                The Secretary may provide not 
                                more than 5 percent of the 
                                funds made available for grants 
                                under subclause (I) to pay the 
                                administrative costs of the 
                                Pacific Region Educational 
                                Laboratory in Honolulu, Hawaii, 
                                regarding activities assisted 
                                under this clause.
                            (iii) Additional requirement.--The 
                        provisions of Public Law 95-134, 
                        permitting the consolidation of grants 
                        by the outlying areas, shall not apply 
                        to assistance provided to those areas, 
                        including the Freely Associated States, 
                        under this subparagraph.
                    (C) States.--
                            (i) In general.--After determining 
                        the amounts to be reserved under 
                        subparagraph (A) (if any) and 
                        subparagraph (B), the Secretary shall--
                                    (I) from the amount 
                                referred to in subsection 
                                (a)(2) for a fiscal year, make 
                                available not more than 1.5 
                                percent to provide youth 
                                activities under section 166 
                                (relating to Native Americans); 
                                and
                                    (II) allot the remainder of 
                                the amount referred to in 
                                subsection (a)(2) for a fiscal 
                                year to the States pursuant to 
                                clause (ii) for youth 
                                activities and statewide 
                                workforce investment 
                                activities.
                            (ii) Formula.--Subject to clauses 
                        (iii) and (iv), of the remainder--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in areas of 
                                substantial unemployment in 
                                each State, compared to the 
                                total number of unemployed 
                                individuals in areas of 
                                substantial unemployment in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged youth in each 
                                State, compared to the total 
                                number of disadvantaged youth 
                                in all States, except as 
                                described in clause (iii).
                            (iii) Calculation.--In determining 
                        an allotment under clause (ii)(III) for 
                        any State in which there is a local 
                        area designated under section 
                        116(a)(2)(B) (relating to the area 
                        served by a rural concentrated 
                        employment program grant recipient), 
                        the allotment shall be based on the 
                        higher of--
                                    (I) the number of 
                                individuals who are age 16 
                                through 21 in families with an 
                                income below the low-income 
                                level in such area; or
                                    (II) the number of 
                                disadvantaged youth in such 
                                area.
                            (iv) Minimum and maximum 
                        percentages and minimum allotments.--In 
                        making allotments under this 
                        subparagraph, the Secretary shall 
                        ensure the following:
                                    (I) Minimum percentage and 
                                allotment.--Subject to 
                                subclause (IV), the Secretary 
                                shall ensure that no State 
                                shall receive an allotment for 
                                a fiscal year that is less than 
                                the greater of--
                                            (aa) an amount 
                                        based on 90 percent of 
                                        the allotment 
                                        percentage of the State 
                                        for the preceding 
                                        fiscal year; or
                                            (bb) 100 percent of 
                                        the total of the 
                                        allotments of the State 
                                        under sections 252 and 
                                        262 of the Job Training 
                                        Partnership Act (as in 
                                        effect on the day 
                                        before the date of 
                                        enactment of this Act) 
                                        for fiscal year 1998.
                                    (II) Small state minimum 
                                allotment.--Subject to 
                                subclauses (I), (III), and 
                                (IV), the Secretary shall 
                                ensure that no State shall 
                                receive an allotment under this 
                                subparagraph that is less than 
                                the total of--
                                            (aa) \3/10\ of 1 
                                        percent of 
                                        $1,000,000,000 of the 
                                        remainder described in 
                                        clause (i)(II) for the 
                                        fiscal year; and
                                            (bb) if the 
                                        remainder described in 
                                        clause (i)(II) for the 
                                        fiscal year exceeds 
                                        $1,000,000,000, \2/5\ 
                                        of 1 percent of the 
                                        excess.
                                    (III) Maximum percentage.--
                                Subject to subclause (I), the 
                                Secretary shall ensure that no 
                                State shall receive an 
                                allotment percentage for a 
                                fiscal year that is more than 
                                130 percent of the allotment 
                                percentage of the State for the 
                                preceding fiscal year.
                                    (IV) Minimum funding.--In 
                                any fiscal year in which the 
                                remainder described in clause 
                                (i)(II) does not exceed 
                                $1,000,000,000, the minimum 
                                allotments under subclauses (I) 
                                and (II) shall be calculated by 
                                the methodology for calculating 
                                the corresponding allotments 
                                under parts B and C of title II 
                                of the Job Training Partnership 
                                Act, as in effect on July 1, 
                                1998.
            (2) Definitions.--For the purpose of the formula 
        specified in paragraph (1)(C):
                    (A) Allotment percentage.--The term 
                ``allotment percentage'', used with respect to 
                fiscal year 2000 or a subsequent fiscal year, 
                means a percentage of the remainder described 
                in paragraph (1)(C)(i)(II) that is received 
                through an allotment made under paragraph 
                (1)(C) for the fiscal year. The term, used with 
                respect to fiscal year 1998 or 1999, means the 
                percentage of the amounts allotted to States 
                under sections 252(b) and 262(a) of the Job 
                Training Partnership Act (as in effect on the 
                day before the date of enactment of this Act) 
                that is received under such sections by the 
                State involved for fiscal year 1998 or 1999.
                    (B) Area of substantial unemployment.--The 
                term ``area of substantial unemployment'' means 
                any area that is of sufficient size and scope 
                to sustain a program of workforce investment 
                activities carried out under this subtitle and 
                that has an average rate of unemployment of at 
                least 6.5 percent for the most recent 12 
                months, as determined by the Secretary. For 
                purposes of this subparagraph, determinations 
                of areas of substantial unemployment shall be 
                made once each fiscal year.
                    (C) Disadvantaged youth.--Subject to 
                paragraph (3), the term ``disadvantaged youth'' 
                means an individual who is age 16 through 21 
                who received an income, or is a member of a 
                family that received a total family income, 
                that, in relation to family size, does not 
                exceed the higher of--
                            (i) the poverty line; or
                            (ii) 70 percent of the lower living 
                        standard income level.
                    (D) Excess number.--The term ``excess 
                number'' means, used with respect to the excess 
                number of unemployed individuals within a 
                State, the higher of--
                            (i) the number that represents the 
                        number of unemployed individuals in 
                        excess of 4.5 percent of the civilian 
                        labor force in the State; or
                            (ii) the number that represents the 
                        number of unemployed individuals in 
                        excess of 4.5 percent of the civilian 
                        labor force in areas of substantial 
                        unemployment in such State.
                    (E) Low-income level.--The term ``low-
                income level'' means $7,000 with respect to 
                income in 1969, and for any later year means 
                that amount that bears the same relationship to 
                $7,000 as the Consumer Price Index for that 
                year bears to the Consumer Price Index for 
                1969, rounded to the nearest $1,000.
            (3) Special rule.--For the purpose of the formula 
        specified in paragraph (1)(C), the Secretary shall, as 
        appropriate and to the extent practicable, exclude 
        college students and members of the Armed Forces from 
        the determination of the number of disadvantaged youth.
            (4) Definition.--In this subsection, the term 
        ``Freely Associated State'' means the Republic of the 
        Marshall Islands, the Federated States of Micronesia, 
        and the Republic of Palau.
    (c) Reallotment.--
            (1) In general.--The Secretary shall, in accordance 
        with this subsection, reallot to eligible States 
        amounts that are allotted under this section for youth 
        activities and statewide workforce investment 
        activities and that are available for reallotment.
            (2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotment under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotment for the prior program year.
            (3) Reallotment.--In making reallotments to 
        eligible States of amounts available pursuant to 
        paragraph (2) for a program year, the Secretary shall 
        allot to each eligible State an amount based on the 
        relative amount allotted to such State under this 
        section for such activities for the prior program year, 
        as compared to the total amount allotted to all 
        eligible States under this section for such activities 
        for such prior program year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.
            (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the obligation of 
        funds by local areas within the State in order to avoid 
        the requirement that funds be made available for 
        reallotment under this subsection. The Governor shall 
        further prescribe equitable procedures for making funds 
        available from the State and local areas in the event 
        that a State is required to make funds available for 
        reallotment under this subsection.

SEC. 128. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
            (1) In general.--The Governor of a State shall 
        reserve not more than 15 percent of each of the amounts 
        allotted to the State under section 127(b)(1)(C) and 
        paragraphs (1)(B) and (2)(B) of section 132(b) for a 
        fiscal year for statewide workforce investment 
        activities.
            (2) Use of funds.--Regardless of whether the 
        reserved amounts were allotted under section 
        127(b)(1)(C), or under paragraph (1)(B) or (2)(B) of 
        section 132(b), the Governor may use the reserved 
        amounts to carry out statewide youth activities 
        described in section 129(b) or statewide employment and 
        training activities, for adults or for dislocated 
        workers, described in paragraph (2)(B) or (3) of 
        section 134(a).
    (b) Within State Allocation.--
            (1) Methods.--The Governor, acting in accordance 
        with the State plan, and after consulting with chief 
        elected officials in the local areas, shall allocate 
        the funds that are allotted to the State for youth 
        activities and statewide workforce investment 
        activities under section 127(b)(1)(C) and are not 
        reserved under subsection (a), in accordance with 
        paragraph (2) or (3).
            (2) Formula allocation.--
                    (A) Youth activities.--
                            (i) Allocation.--In allocating the 
                        funds described in paragraph (1) to 
                        local areas, a State may allocate--
                                    (I) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(I);
                                    (II) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(II); 
                                and
                                    (III) 33\1/3\ percent of 
                                the funds on the basis 
                                described in clauses (ii)(III) 
                                and (iii) of section 
                                127(b)(1)(C).
                            (ii) Minimum percentage.--Effective 
                        at the end of the second full fiscal 
                        year after the date on which a local 
                        area is designated under section 116, 
                        the local area shall not receive an 
                        allocation percentage for a fiscal year 
                        that is less than 90 percent of the 
                        average allocation percentage of the 
                        local area for the 2 preceding fiscal 
                        years. Amounts necessary for increasing 
                        such allocations to local areas to 
                        comply with the preceding sentence 
                        shall be obtained by ratably reducing 
                        the allocations to be made to other 
                        local areas under this subparagraph.
                            (iii) Definition.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2000 or a 
                        subsequent fiscal year, means a 
                        percentage of the funds referred to in 
                        clause (i), received through an 
                        allocation made under this 
                        subparagraph, for the fiscal year.
                    (B) Application.--For purposes of carrying 
                out subparagraph (A)--
                            (i) references in section 127(b) to 
                        a State shall be deemed to be 
                        references to a local area;
                            (ii) references in section 127(b) 
                        to all States shall be deemed to be 
                        references to all local areas in the 
                        State involved; and
                            (iii) except as described in clause 
                        (i), references in section 127(b)(1) to 
                        the term ``excess number'' shall be 
                        considered to be references to the term 
                        as defined in section 127(b)(2).
            (3) Youth discretionary allocation.--In lieu of 
        making the allocation described in paragraph (2)(A), in 
        allocating the funds described in paragraph (1) to 
        local areas, a State may distribute--
                    (A) a portion equal to not less than 70 
                percent of the funds in accordance with 
                paragraph (2)(A); and
                    (B) the remaining portion of the funds on 
                the basis of a formula that--
                            (i) incorporates additional factors 
                        (other than the factors described in 
                        paragraph (2)(A)) relating to--
                                    (I) excess youth poverty in 
                                urban, rural, and suburban 
                                local areas; and
                                    (II) excess unemployment 
                                above the State average in 
                                urban, rural, and suburban 
                                local areas; and
                            (ii) was developed by the State 
                        board and approved by the Secretary as 
                        part of the State plan.
            (4) Limitation.--
                    (A) In general.--Of the amount allocated to 
                a local area under this subsection and section 
                133(b) for a fiscal year, not more than 10 
                percent of the amount may be used by the local 
                board for the administrative cost of carrying 
                out local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c).
                    (B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may 
                be used for the administrative cost of any of 
                the local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c), regardless of whether 
                the funds were allocated under this subsection 
                or section 133(b).
                    (C) Regulations.--The Secretary, after 
                consulting with the Governors, shall develop 
                and issue regulations that define the term 
                ``administrative cost'' for purposes of this 
                title. Such definition shall be consistent with 
                generally accepted accounting principles.
    (c) Reallocation Among Local Areas.--
            (1) In general.--The Governor may, in accordance 
        with this subsection, reallocate to eligible local 
        areas within the State amounts that are allocated under 
        paragraph (2)(A) or (3) of subsection (b) for youth 
        activities and that are available for reallocation.
            (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.
            (3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under subsection (b)(3) for such 
        activities for the prior program year, as compared to 
        the total amount allocated to all eligible local areas 
        in the State under subsection (b)(3) for such 
        activities for such prior program year. For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.

SEC. 129. USE OF FUNDS FOR YOUTH ACTIVITIES.

    (a) Purposes.--The purposes of this section are--
            (1) to provide, to eligible youth seeking 
        assistance in achieving academic and employment 
        success, effective and comprehensive activities, which 
        shall include a variety of options for improving 
        educational and skill competencies and provide 
        effective connections to employers;
            (2) to ensure on-going mentoring opportunities for 
        eligible youth with adults committed to providing such 
        opportunities;
            (3) to provide opportunities for training to 
        eligible youth;
            (4) to provide continued supportive services for 
        eligible youth;
            (5) to provide incentives for recognition and 
        achievement to eligible youth; and
            (6) to provide opportunities for eligible youth in 
        activities related to leadership, development, 
        decisionmaking, citizenship, and community service.
    (b) Statewide Youth Activities.--
            (1) In general.--Funds reserved by a Governor for a 
        State as described in sections 128(a) and 133(a)(1)--
                    (A) shall be used to carry out the 
                statewide youth activities described in 
                paragraph (2); and
                    (B) may be used to carry out any of the 
                statewide youth activities described in 
                paragraph (3),

        regardless of whether the funds were allotted to the 
        State under section 127(b)(1) or under paragraph (1) or 
        (2) of section 132(b).
            (2) Required statewide youth activities.--A State 
        shall use funds reserved as described in sections 
        128(a) and 133(a)(1) (regardless of whether the funds 
        were allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        statewide youth activities, which shall include--
                    (A) disseminating a list of eligible 
                providers of youth activities described in 
                section 123;
                    (B) carrying out activities described in 
                clauses (ii) through (vi) of section 
                134(a)(2)(B), except that references in such 
                clauses to activities authorized under section 
                134 shall be considered to be references to 
                activities authorized under this section; and
                    (C) providing additional assistance to 
                local areas that have high concentrations of 
                eligible youth to carry out the activities 
                described in subsection (c).
            (3) Allowable statewide youth activities.--A State 
        may use funds reserved as described in sections 128(a) 
        and 133(a)(1) (regardless of whether the funds were 
        allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        additional statewide youth activities, which may 
        include--
                    (A) carrying out activities described in 
                clauses (i), (ii), (iii), (iv)(II), and 
                (vi)(II) of section 134(a)(3)(A), except that 
                references in such clauses to activities 
                authorized under section 134 shall be 
                considered to be references to activities 
                authorized under this section; and
                    (B) carrying out, on a statewide basis, 
                activities described in subsection (c).
            (4) Prohibition.--No funds described in this 
        subsection or section 134(a) shall be used to develop 
        or implement education curricula for school systems in 
        the State.
    (c) Local Elements and Requirements.--
            (1) Program design.--Funds allocated to a local 
        area for eligible youth under paragraph (2)(A) or (3), 
        as appropriate, of section 128(b) shall be used to 
        carry out, for eligible youth, programs that--
                    (A) provide an objective assessment of the 
                academic levels, skill levels, and service 
                needs of each participant, which assessment 
                shall include a review of basic skills, 
                occupational skills, prior work experience, 
                employability, interests, aptitudes (including 
                interests and aptitudes for nontraditional 
                jobs), supportive service needs, and 
                developmental needs of such participant, except 
                that a new assessment of a participant is not 
                required if the provider carrying out such a 
                program determines it is appropriate to use a 
                recent assessment of the participant conducted 
                pursuant to another education or training 
                program;
                    (B) develop service strategies for each 
                participant that shall identify an employment 
                goal (including, in appropriate circumstances, 
                nontraditional employment), appropriate 
                achievement objectives, and appropriate 
                services for the participant taking into 
                account the assessment conducted pursuant to 
                subparagraph (A), except that a new service 
                strategy for a participant is not required if 
                the provider carrying out such a program 
                determines it is appropriate to use a recent 
                service strategy developed for the participant 
                under another education or training program; 
                and
                    (C) provide--
                            (i) preparation for postsecondary 
                        educational opportunities, in 
                        appropriate cases;
                            (ii) strong linkages between 
                        academic and occupational learning;
                            (iii) preparation for unsubsidized 
                        employment opportunities, in 
                        appropriate cases; and
                            (iv) effective connections to 
                        intermediaries with strong links to--
                                    (I) the job market; and
                                    (II) local and regional 
                                employers.
            (2) Program elements.--The programs described in 
        paragraph (1) shall provide elements consisting of--
                    (A) tutoring, study skills training, and 
                instruction, leading to completion of secondary 
                school, including dropout prevention 
                strategies;
                    (B) alternative secondary school services, 
                as appropriate;
                    (C) summer employment opportunities that 
                are directly linked to academic and 
                occupational learning;
                    (D) as appropriate, paid and unpaid work 
                experiences, including internships and job 
                shadowing;
                    (E) occupational skill training, as 
                appropriate;
                    (F) leadership development opportunities, 
                which may include community service and peer-
                centered activities encouraging responsibility 
                and other positive social behaviors during non-
                school hours, as appropriate;
                    (G) supportive services;
                    (H) adult mentoring for the period of 
                participation and a subsequent period, for a 
                total of not less than 12 months;
                    (I) followup services for not less than 12 
                months after the completion of participation, 
                as appropriate; and
                    (J) comprehensive guidance and counseling, 
                which may include drug and alcohol abuse 
                counseling and referral, as appropriate.
            (3) Additional requirements.--
                    (A) Information and referrals.--Each local 
                board shall ensure that each participant or 
                applicant who meets the minimum income criteria 
                to be considered an eligible youth shall be 
                provided--
                            (i) information on the full array 
                        of applicable or appropriate services 
                        that are available through the local 
                        board or other eligible providers or 
                        one-stop partners, including those 
                        receiving funds under this subtitle; 
                        and
                            (ii) referral to appropriate 
                        training and educational programs that 
                        have the capacity to serve the 
                        participant or applicant either on a 
                        sequential or concurrent basis.
                    (B) Applicants not meeting enrollment 
                requirements.--Each eligible provider of a 
                program of youth activities shall ensure that 
                an eligible applicant who does not meet the 
                enrollment requirements of the particular 
                program or who cannot be served shall be 
                referred for further assessment, as necessary, 
                and referred to appropriate programs in 
                accordance with subparagraph (A) to meet the 
                basic skills and training needs of the 
                applicant.
                    (C) Involvement in design and 
                implementation.--The local board shall ensure 
                that parents, participants, and other members 
                of the community with experience relating to 
                programs for youth are involved in the design 
                and implementation of the programs described in 
                paragraph (1).
            (4) Priority.--
                    (A) In general.--At a minimum, 30 percent 
                of the funds described in paragraph (1) shall 
                be used to provide youth activities to out-of-
                school youth.
                    (B) Exception.--A State that receives a 
                minimum allotment under section 127(b)(1) in 
                accordance with section 127(b)(1)(C)(iv)(II) or 
                under section 132(b)(1) in accordance with 
                section 132(b)(1)(B)(iv)(II) may reduce the 
                percentage described in subparagraph (A) for a 
                local area in the State, if--
                            (i) after an analysis of the 
                        eligible youth population in the local 
                        area, the State determines that the 
                        local area will be unable to meet the 
                        percentage described in subparagraph 
                        (A) due to a low number of out-of-
                        school youth; and
                            (ii)(I) the State submits to the 
                        Secretary, for the local area, a 
                        request including a proposed reduced 
                        percentage for purposes of subparagraph 
                        (A), and the summary of the eligible 
                        youth population analysis; and
                            (II) the request is approved by the 
                        Secretary.
            (5) Exceptions.--Not more than 5 percent of 
        participants assisted under this section in each local 
        area may be individuals who do not meet the minimum 
        income criteria to be considered eligible youth, if 
        such individuals are within 1 or more of the following 
        categories:
                    (A) Individuals who are school dropouts.
                    (B) Individuals who are basic skills 
                deficient.
                    (C) Individuals with educational attainment 
                that is 1 or more grade levels below the grade 
                level appropriate to the age of the 
                individuals.
                    (D) Individuals who are pregnant or 
                parenting.
                    (E) Individuals with disabilities, 
                including learning disabilities.
                    (F) Individuals who are homeless or runaway 
                youth.
                    (G) Individuals who are offenders.
                    (H) Other eligible youth who face serious 
                barriers to employment as identified by the 
                local board.
            (6) Prohibitions.--
                    (A) Prohibition against federal control of 
                education.--No provision of this Act shall be 
                construed to authorize any department, agency, 
                officer, or employee of the United States to 
                exercise any direction, supervision, or control 
                over the curriculum, program of instruction, 
                administration, or personnel of any educational 
                institution, school, or school system, or over 
                the selection of library resources, textbooks, 
                or other printed or published instructional 
                materials by any educational institution, 
                school, or school system.
                    (B) Nonduplication.--All of the funds made 
                available under this Act shall be used in 
                accordance with the requirements of this Act. 
                None of the funds made available under this Act 
                may be used to provide funding under the 
                School-to-Work Opportunities Act of 1994 (20 
                U.S.C. 6101 et seq.) or to carry out, through 
                programs funded under this Act, activities that 
                were funded under the School-to-Work 
                Opportunities Act of 1994, unless the programs 
                funded under this Act serve only those 
                participants eligible to participate in the 
                programs under this Act.
                    (C) Noninterference and nonreplacement of 
                regular academic requirements.--No funds 
                described in paragraph (1) shall be used to 
                provide an activity for eligible youth who are 
                not school dropouts if participation in the 
                activity would interfere with or replace the 
                regular academic requirements of the youth.
            (7) Linkages.--In coordinating the programs 
        authorized under this section, youth councils shall 
        establish linkages with educational agencies 
        responsible for services to participants as 
        appropriate.
            (8) Volunteers.--The local board shall make 
        opportunities available for individuals who have 
        successfully participated in programs carried out under 
        this section to volunteer assistance to participants in 
        the form of mentoring, tutoring, and other activities.

    CHAPTER 5--ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING 
                               ACTIVITIES

SEC. 131. GENERAL AUTHORIZATION.

    The Secretary shall make allotments under paragraphs (1)(B) 
and (2)(B) of section 132(b) to each State that meets the 
requirements of section 112 and a grant to each outlying area 
that complies with the requirements of this title, to assist 
the State or outlying area, and to enable the State or outlying 
area to assist local areas, for the purpose of providing 
workforce investment activities for adults, and dislocated 
workers, in the State or outlying area and in the local areas.

SEC. 132. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
            (1) make allotments and grants from the total 
        amount appropriated under section 137(b) for a fiscal 
        year in accordance with subsection (b)(1); and
            (2)(A) reserve 20 percent of the amount 
        appropriated under section 137(c) for a fiscal year for 
        use under subsection (b)(2)(A), and under sections 
        170(b) (relating to dislocated worker technical 
        assistance), 171(d) (relating to dislocated worker 
        projects), and 173 (relating to national emergency 
        grants); and
            (B) make allotments from 80 percent of the amount 
        appropriated under section 137(c) for a fiscal year in 
        accordance with subsection (b)(2)(B).
    (b) Allotment Among States.--
            (1) Adult employment and training activities.--
                    (A) Reservation for outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection (a)(1) 
                        for a fiscal year, the Secretary shall 
                        reserve not more than \1/4\ of 1 
                        percent to provide assistance to the 
                        outlying areas.
                            (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for adult employment and training 
                        activities and statewide workforce 
                        investment activities in accordance 
                        with the requirements of section 
                        127(b)(1)(B), except that the reference 
                        in section 127(b)(1)(B)(i)(II) to 
                        sections 252(d) and 262(a)(1) of the 
                        Job Training Partnership Act shall be 
                        deemed to be a reference to section 
                        202(a)(1) of the Job Training 
                        Partnership Act (as in effect on the 
                        day before the date of enactment of 
                        this Act).
                    (B) States.--
                            (i) In general.--After determining 
                        the amount to be reserved under 
                        subparagraph (A), the Secretary shall 
                        allot the remainder of the amount 
                        referred to in subsection (a)(1) for a 
                        fiscal year to the States pursuant to 
                        clause (ii) for adult employment and 
                        training activities and statewide 
                        workforce investment activities.
                            (ii) Formula.--Subject to clauses 
                        (iii) and (iv), of the remainder--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in areas of 
                                substantial unemployment in 
                                each State, compared to the 
                                total number of unemployed 
                                individuals in areas of 
                                substantial unemployment in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged adults in each 
                                State, compared to the total 
                                number of disadvantaged adults 
                                in all States, except as 
                                described in clause (iii).
                            (iii) Calculation.--In determining 
                        an allotment under clause (ii)(III) for 
                        any State in which there is a local 
                        area designated under section 
                        116(a)(2)(B), the allotment shall be 
                        based on the higher of--
                                    (I) the number of adults in 
                                families with an income below 
                                the low-income level in such 
                                area; or
                                    (II) the number of 
                                disadvantaged adults in such 
                                area.
                            (iv) Minimum and maximum 
                        percentages and minimum allotments.--In 
                        making allotments under this 
                        subparagraph, the Secretary shall 
                        ensure the following:
                                    (I) Minimum percentage and 
                                allotment.--Subject to 
                                subclause (IV), the Secretary 
                                shall ensure that no State 
                                shall receive an allotment for 
                                a fiscal year that is less than 
                                the greater of--
                                            (aa) an amount 
                                        based on 90 percent of 
                                        the allotment 
                                        percentage of the State 
                                        for the preceding 
                                        fiscal year; or
                                            (bb) 100 percent of 
                                        the allotment of the 
                                        State under section 202 
                                        of the Job Training 
                                        Partnership Act (as in 
                                        effect on the day 
                                        before the date of 
                                        enactment of this Act) 
                                        for fiscal year 1998.
                                    (II) Small state minimum 
                                allotment.--Subject to 
                                subclauses (I), (III), and 
                                (IV), the Secretary shall 
                                ensure that no State shall 
                                receive an allotment under this 
                                subparagraph that is less than 
                                the total of--
                                            (aa) \3/10\ of 1 
                                        percent of $960,000,000 
                                        of the remainder 
                                        described in clause (i) 
                                        for the fiscal year; 
                                        and
                                            (bb) if the 
                                        remainder described in 
                                        clause (i) for the 
                                        fiscal year exceeds 
                                        $960,000,000, \2/5\ of 
                                        1 percent of the 
                                        excess.
                                    (III) Maximum percentage.--
                                Subject to subclause (I), the 
                                Secretary shall ensure that no 
                                State shall receive an 
                                allotment percentage for a 
                                fiscal year that is more than 
                                130 percent of the allotment 
                                percentage of the State for the 
                                preceding fiscal year.
                                    (IV) Minimum funding.--In 
                                any fiscal year in which the 
                                remainder described in clause 
                                (i) does not exceed 
                                $960,000,000, the minimum 
                                allotments under subclauses (I) 
                                and (II) shall be calculated by 
                                the methodology for calculating 
                                the corresponding allotments 
                                under part A of title II of the 
                                Job Training Partnership Act, 
                                as in effect on July 1, 1998.
                            (v) Definitions.--For the purpose 
                        of the formula specified in this 
                        subparagraph:
                                    (I) Adult.--The term 
                                ``adult'' means an individual 
                                who is not less than age 22 and 
                                not more than age 72.
                                    (II) Allotment 
                                percentage.--The term 
                                ``allotment percentage'', used 
                                with respect to fiscal year 
                                2000 or a subsequent fiscal 
                                year, means a percentage of the 
                                remainder described in clause 
                                (i) that is received through an 
                                allotment made under this 
                                subparagraph for the fiscal 
                                year. The term, used with 
                                respect to fiscal year 1998 or 
                                1999, means the percentage of 
                                the amounts allotted to States 
                                under section 202(a) of the Job 
                                Training Partnership Act (as in 
                                effect on the day before the 
                                date of enactment of this Act) 
                                that is received under such 
                                section by the State involved 
                                for fiscal year 1998 or 1999.
                                    (III) Area of substantial 
                                unemployment.--The term ``area 
                                of substantial unemployment'' 
                                means any area that is of 
                                sufficient size and scope to 
                                sustain a program of workforce 
                                investment activities carried 
                                out under this subtitle and 
                                that has an average rate of 
                                unemployment of at least 6.5 
                                percent for the most recent 12 
                                months, as determined by the 
                                Secretary. For purposes of this 
                                subclause, determinations of 
                                areas of substantial 
                                unemployment shall be made once 
                                each fiscal year.
                                    (IV) Disadvantaged adult.--
                                Subject to subclause (V), the 
                                term ``disadvantaged adult'' 
                                means an adult who received an 
                                income, or is a member of a 
                                family that received a total 
                                family income, that, in 
                                relation to family size, does 
                                not exceed the higher of--
                                            (aa) the poverty 
                                        line; or
                                            (bb) 70 percent of 
                                        the lower living 
                                        standard income level.
                                    (V) Disadvantaged adult 
                                special rule.--The Secretary 
                                shall, as appropriate and to 
                                the extent practicable, exclude 
                                college students and members of 
                                the Armed Forces from the 
                                determination of the number of 
                                disadvantaged adults.
                                    (VI) Excess number.--The 
                                term ``excess number'' means, 
                                used with respect to the excess 
                                number of unemployed 
                                individuals within a State, the 
                                higher of--
                                            (aa) the number 
                                        that represents the 
                                        number of unemployed 
                                        individuals in excess 
                                        of 4.5 percent of the 
                                        civilian labor force in 
                                        the State; or
                                            (bb) the number 
                                        that represents the 
                                        number of unemployed 
                                        individuals in excess 
                                        of 4.5 percent of the 
                                        civilian labor force in 
                                        areas of substantial 
                                        unemployment in such 
                                        State.
            (2) Dislocated worker employment and training.--
                    (A) Reservation for outlying areas.--
                            (i) In general.--From the amount 
                        made available under subsection 
                        (a)(2)(A) for a fiscal year, the 
                        Secretary shall reserve not more than 
                        \1/4\ of 1 percent of the amount 
                        appropriated under section 137(c) for 
                        the fiscal year to provide assistance 
                        to the outlying areas.
                            (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for dislocated worker employment 
                        and training activities and statewide 
                        workforce investment activities in 
                        accordance with the requirements of 
                        section 127(b)(1)(B), except that the 
                        reference in section 
                        127(b)(1)(B)(i)(II) to sections 252(a) 
                        and 262(a)(1) of the Job Training 
                        Partnership Act shall be deemed to be a 
                        reference to section 302(e) of the Job 
                        Training Partnership Act (as in effect 
                        on the day before the date of enactment 
                        of this Act).
                    (B) States.--
                            (i) In general.--The Secretary 
                        shall allot the amount referred to in 
                        subsection (a)(2)(B) for a fiscal year 
                        to the States pursuant to clause (ii) 
                        for dislocated worker employment and 
                        training activities and statewide 
                        workforce investment activities.
                            (ii) Formula.--Of the amount--
                                    (I) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of unemployed 
                                individuals in each State, 
                                compared to the total number of 
                                unemployed individuals in all 
                                States;
                                    (II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                    (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of individuals 
                                in each State who have been 
                                unemployed for 15 weeks or 
                                more, compared to the total 
                                number of individuals in all 
                                States who have been unemployed 
                                for 15 weeks or more.
                            (iii) Definition.--In this 
                        subparagraph, the term ``excess 
                        number'' means, used with respect to 
                        the excess number of unemployed 
                        individuals within a State, the number 
                        that represents the number of 
                        unemployed individuals in excess of 4.5 
                        percent of the civilian labor force in 
                        the State.
            (3) Definitions.--For the purpose of the formulas 
        specified in this subsection:
                    (A) Freely associated states.--The term 
                ``Freely Associated States'' means the Republic 
                of the Marshall Islands, the Federated States 
                of Micronesia, and the Republic of Palau.
                    (B) Low-income level.--The term ``low-
                income level'' means $7,000 with respect to 
                income in 1969, and for any later year means 
                that amount that bears the same relationship to 
                $7,000 as the Consumer Price Index for that 
                year bears to the Consumer Price Index for 
                1969, rounded to the nearest $1,000.
    (c) Reallotment.--
            (1) In general.--The Secretary shall, in accordance 
        with this subsection, reallot to eligible States 
        amounts that are allotted under this section for 
        employment and training activities and statewide 
        workforce investment activities and that are available 
        for reallotment.
            (2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotments under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotments for the prior program year.
            (3) Reallotment.--In making reallotments to 
        eligible States of amounts available pursuant to 
        paragraph (2) for a program year, the Secretary shall 
        allot to each eligible State an amount based on the 
        relative amount allotted to such State under this 
        section for such activities for the prior program year, 
as compared to the total amount allotted to all eligible States under 
this section for such activities for such prior program year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.
            (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the obligation of 
        funds by local areas within the State in order to avoid 
        the requirement that funds be made available for 
        reallotment under this subsection. The Governor shall 
        further prescribe equitable procedures for making funds 
        available from the State and local areas in the event 
        that a State is required to make funds available for 
        reallotment under this subsection.

SEC. 133. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
            (1) Statewide workforce investment activities.--The 
        Governor of a State shall make the reservation required 
        under section 128(a).
            (2) Statewide rapid response activities.--The 
        Governor of the State shall reserve not more than 25 
        percent of the total amount allotted to the State under 
        section 132(b)(2)(B) for a fiscal year for statewide 
        rapid response activities described in section 
        134(a)(2)(A).
    (b) Within State Allocation.--
            (1) Methods.--The Governor, acting in accordance 
        with the State plan, and after consulting with chief 
        elected officials in the local areas, shall allocate--
                    (A) the funds that are allotted to the 
                State for adult employment and training 
                activities and statewide workforce investment 
                activities under section 132(b)(1)(B) and are 
                not reserved under subsection (a)(1), in 
                accordance with paragraph (2) or (3); and
                    (B) the funds that are allotted to the 
                State for dislocated worker employment and 
                training activities under section 132(b)(2)(B) 
                and are not reserved under paragraph (1) or (2) 
                of subsection (a), in accordance with paragraph 
                (2).
            (2) Formula allocations.--
                    (A) Adult employment and training 
                activities.--
                            (i) Allocation.--In allocating the 
                        funds described in paragraph (1)(A) to 
                        local areas, a State may allocate--
                                    (I) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 132(b)(1)(B)(ii)(I);
                                    (II) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 132(b)(1)(B)(ii)(II); 
                                and
                                    (III) 33\1/3\ percent of 
                                the funds on the basis 
                                described in clauses (ii)(III) 
                                and (iii) of section 
                                132(b)(1)(B).
                            (ii) Minimum percentage.--Effective 
                        at the end of the second full fiscal 
                        year after the date on which a local 
                        area is designated under section 116, 
                        the local area shall not receive an 
                        allocation percentage for a fiscal year 
                        that is less than 90 percent of the 
                        average allocation percentage of the 
                        local area for the 2 preceding fiscal 
                        years. Amounts necessary for increasing 
                        such allocations to local areas to 
                        comply with the preceding sentence 
                        shall be obtained by ratably reducing 
                        the allocations to be made to other 
                        local areas under this subparagraph.
                            (iii) Definition.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2000 or a 
                        subsequent fiscal year, means a 
                        percentage of the funds referred to in 
                        clause (i), received through an 
                        allocation made under this 
                        subparagraph, for the fiscal year.
                    (B) Dislocated worker employment and 
                training activities.--
                            (i) Formula.--In allocating the 
                        funds described in paragraph (1)(B) to 
                        local areas, a State shall allocate the 
                        funds based on an allocation formula 
                        prescribed by the Governor of the 
                        State. Such formula may be amended by 
                        the Governor not more than once for 
                        each program year. Such formula shall 
                        utilize the most appropriate 
                        information available to the Governor 
                        to distribute amounts to address the 
                        State's worker readjustment assistance 
                        needs.
                            (ii) Information.--The information 
                        described in clause (i) shall include 
                        insured unemployment data, unemployment 
                        concentrations, plant closing and mass 
                        layoff data, declining industries data, 
                        farmer-rancher economic hardship data, 
                        and long-term unemployment data.
                    (C) Application.--For purposes of carrying 
                out subparagraph (A)--
                            (i) references in section 132(b) to 
                        a State shall be deemed to be 
                        references to a local area;
                            (ii) references in section 132(b) 
                        to all States shall be deemed to be 
                        references to all local areas in the 
                        State involved; and
                            (iii) except as described in clause 
                        (i), references in section 132(b)(1) to 
                        the term ``excess number'' shall be 
                        considered to be references to the term 
                        as defined in section 132(b)(1).
            (3) Adult employment and training discretionary 
        allocations.--In lieu of making the allocation 
        described in paragraph (2)(A), in allocating the funds 
        described in paragraph (1)(A) to local areas, a State 
        may distribute--
                    (A) a portion equal to not less than 70 
                percent of the funds in accordance with 
                paragraph (2)(A); and
                    (B) the remaining portion of the funds on 
                the basis of a formula that--
                            (i) incorporates additional factors 
                        (other than the factors described in 
                        paragraph (2)(A)) relating to--
                                    (I) excess poverty in 
                                urban, rural, and suburban 
                                local areas; and
                                    (II) excess unemployment 
                                above the State average in 
                                urban, rural, and suburban 
                                local areas; and
                            (ii) was developed by the State 
                        board and approved by the Secretary as 
                        part of the State plan.
            (4) Transfer authority.--A local board may 
        transfer, if such a transfer is approved by the 
        Governor, not more than 20 percent of the funds 
        allocated to the local area under paragraph (2)(A) or 
        (3), and 20 percent of the funds allocated to the local 
        area under paragraph (2)(B), for a fiscal year 
        between--
                    (A) adult employment and training 
                activities; and
                    (B) dislocated worker employment and 
                training activities.
            (5) Allocation.--
                    (A) In general.--The Governor of the State 
                shall allocate the funds described in paragraph 
                (1) to local areas under paragraphs (2) and (3) 
                for the purpose of providing a single system of 
                employment and training activities for adults 
                and dislocated workers in accordance with 
                subsections (d) and (e) of section 134.
                    (B) Additional requirements.--
                            (i) Adults.--Funds allocated under 
                        paragraph (2)(A) or (3) shall be used 
                        by a local area to contribute 
                        proportionately to the costs of the 
                        one-stop delivery system described in 
                        section 134(c) in the local area, and 
                        to pay for employment and training 
                        activities provided to adults in the 
                        local area, consistent with section 
                        134.
                            (ii) Dislocated workers.--Funds 
                        allocated under paragraph (2)(B) shall 
                        be used by a local area to contribute 
                        proportionately to the costs of the 
                        one-stop delivery system described in 
                        section 134(c) in the local area, and 
                        to pay for employment and training 
                        activities provided to dislocated 
                        workers in the local area, consistent 
                        with section 134.
    (c) Reallocation Among Local Areas.--
            (1) In general.--The Governor may, in accordance 
        with this subsection, reallocate to eligible local 
        areas within the State amounts that are allocated under 
        paragraph (2)(A) or (3) of subsection (b) for adult 
        employment and training activities and that are 
        available for reallocation.
            (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.
            (3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under subsection (b)(3) for such 
        activities for the prior program year, as compared to 
        the total amount allocated to all eligible local areas 
        in the State under subsection (b)(3) for such 
        activities for such prior program year. For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.
            (4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.

SEC. 134. USE OF FUNDS FOR EMPLOYMENT AND TRAINING ACTIVITIES.

    (a) Statewide Employment and Training Activities.--
            (1) In general.--Funds reserved by a Governor for a 
        State--
                    (A) as described in section 133(a)(2) shall 
                be used to carry out the statewide rapid 
                response activities described in paragraph 
                (2)(A); and
                    (B) as described in sections 128(a) and 
                133(a)(1)--
                            (i) shall be used to carry out the 
                        statewide employment and training 
                        activities described in paragraph 
                        (2)(B); and
                            (ii) may be used to carry out any 
                        of the statewide employment and 
                        training activities described in 
                        paragraph (3),
                regardless of whether the funds were allotted 
                to the State under section 127(b)(1) or under 
                paragraph (1) or (2) of section 132(b).
            (2) Required statewide employment and training 
        activities.--
                    (A) Statewide rapid response activities.--A 
                State shall use funds reserved as described in 
                section 133(a)(2) to carry out statewide rapid 
                response activities, which shall include--
                            (i) provision of rapid response 
                        activities, carried out in local areas 
                        by the State or by an entity designated 
                        by the State, working in conjunction 
                        with the local boards and the chief 
                        elected officials in the local areas; 
                        and
                            (ii) provision of additional 
                        assistance to local areas that 
                        experience disasters, mass layoffs or 
                        plant closings, or other events that 
                        precipitate substantial increases in 
                        the number of unemployed individuals, 
                        carried out in local areas by the State 
                        or by an entity designated by the 
                        State, working in conjunction with the 
                        local boards and the chief elected 
                        officials in the local areas.
                    (B) Other required statewide employment and 
                training activities.--A State shall use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out other statewide employment and 
                training activities, which shall include--
                            (i) disseminating the State list of 
                        eligible providers of training 
                        services, including eligible providers 
                        of nontraditional training services, 
                        information identifying eligible 
                        providers of on-the-job training and 
                        customized training, and performance 
                        information and program cost 
                        information, as described in 
                        subsections (e) and (h) of section 122;
                            (ii) conducting evaluations, under 
                        section 136(e), of activities 
                        authorized in this section, in 
                        coordination with the activities 
                        carried out under section 172;
                            (iii) providing incentive grants to 
                        local areas for regional cooperation 
                        among local boards (including local 
                        boards for a designated region as 
                        described in section 116(c)), for local 
                        coordination of activities carried out 
                        under this Act, and for exemplary 
                        performance by local areas on the local 
                        performance measures;
                            (iv) providing technical assistance 
                        to local areas that fail to meet local 
                        performance measures;
                            (v) assisting in the establishment 
                        and operation of one-stop delivery 
                        systems described in subsection (c); 
                        and
                            (vi) operating a fiscal and 
                        management accountability information 
                        system under section 136(f).
            (3) Allowable statewide employment and training 
        activities.--
                    (A) In general.--A State may use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out additional statewide employment and 
                training activities, which may include--
                            (i) subject to subparagraph (B), 
                        administration by the State of the 
                        activities authorized under this 
                        section;
                            (ii) provision of capacity building 
                        and technical assistance to local 
                        areas, one-stop operators, one-stop 
                        partners, and eligible providers, 
                        including the development and training 
                        of staff and the development of 
                        exemplary program activities;
                            (iii) conduct of research and 
                        demonstrations;
                            (iv)(I) implementation of 
                        innovative incumbent worker training 
                        programs, which may include the 
                        establishment and implementation of an 
                        employer loan program to assist in 
                        skills upgrading; and
                            (II) the establishment and 
                        implementation of programs targeted to 
                        empowerment zones and enterprise 
                        communities;
                            (v) support for the identification 
                        of eligible providers of training 
                        services as required under section 122;
                            (vi)(I) implementation of 
                        innovative programs for displaced 
                        homemakers, which for purposes of this 
                        subclause may include an individual who 
                        is receiving public assistance and is 
                        within 2 years of exhausting lifetime 
                        eligibility under part A of title IV of 
                        the Social Security Act (42 U.S.C. 601 
                        et seq.); and
                            (II) implementation of programs to 
                        increase the number of individuals 
                        training for and placed in 
                        nontraditional employment; and
                            (vii) carrying out other activities 
                        authorized in this section that the 
                        State determines to be necessary to 
                        assist local areas in carrying out 
                        activities described in subsection (d) 
                        or (e) through the statewide workforce 
                        investment system.
                    (B) Limitation.--
                            (i) In general.--Of the funds 
                        allotted to a State under sections 
                        127(b) and 132(b) and reserved as 
                        described in sections 128(a) and 
                        133(a)(1) for a fiscal year--
                                    (I) not more than 5 percent 
                                of the amount allotted under 
                                section 127(b)(1);
                                    (II) not more than 5 
                                percent of the amount allotted 
                                under section 132(b)(1); and
                                    (III) not more than 5 
                                percent of the amount allotted 
                                under section 132(b)(2),
                        may be used by the State for the 
                        administration of youth activities 
                        carried out under section 129 and 
                        employment and training activities 
                        carried out under this section.
                            (ii) Use of funds.--Funds made 
                        available for administrative costs 
                        under clause (i) may be used for the 
                        administrative cost of any of the 
                        statewide youth activities or statewide 
                        employment and training activities, 
                        regardless of whether the funds were 
                        allotted to the State under section 
                        127(b)(1) or paragraph (1) or (2) of 
                        section 132(b).
    (b) Local Employment and Training Activities.--Funds 
allocated to a local area for adults under paragraph (2)(A) or 
(3), as appropriate, of section 133(b), and funds allocated to 
a local area for dislocated workers under section 
133(b)(2)(B)--
            (1) shall be used to carry out employment and 
        training activities described in subsection (d) for 
        adults or dislocated workers, respectively; and
            (2) may be used to carry out employment and 
        training activities described in subsection (e) for 
        adults or dislocated workers, respectively.
    (c) Establishment of One-Stop Delivery System.--
            (1) In general.--There shall be established in a 
        State that receives an allotment under section 132(b) a 
        one-stop delivery system, which--
                    (A) shall provide the core services 
                described in subsection (d)(2);
                    (B) shall provide access to intensive 
                services and training services as described in 
                paragraphs (3) and (4) of subsection (d), 
                including serving as the point of access to 
                individual training accounts for training 
                services to participants in accordance with 
                subsection (d)(4)(G);
                    (C) shall provide access to the activities 
                carried out under subsection (e), if any;
                    (D) shall provide access to programs and 
                activities carried out by one-stop partners and 
                described in section 121(b); and
                    (E) shall provide access to the information 
                described in section 15 of the Wagner-Peyser 
                Act and all job search, placement, recruitment, 
                and other labor exchange services authorized 
                under the Wagner-Peyser Act (29 U.S.C. 49 et 
                seq.).
            (2) One-stop delivery.--At a minimum, the one-stop 
        delivery system--
                    (A) shall make each of the programs, 
                services, and activities described in paragraph 
                (1) accessible at not less than 1 physical 
                center in each local area of the State; and
                    (B) may also make programs, services, and 
                activities described in paragraph (1) 
                available--
                            (i) through a network of affiliated 
                        sites that can provide 1 or more of the 
                        programs, services, and activities to 
                        individuals; and
                            (ii) through a network of eligible 
                        one-stop partners--
                                    (I) in which each partner 
                                provides 1 or more of the 
                                programs, services, and 
                                activities to such individuals 
                                and is accessible at an 
                                affiliated site that consists 
                                of a physical location or an 
                                electronically or 
                                technologically linked access 
                                point; and
                                    (II) that assures 
                                individuals that information on 
                                the availability of the core 
                                services will be available 
                                regardless of where the 
                                individuals initially enter the 
                                statewide workforce investment 
                                system, including information 
                                made available through an 
                                access point described in 
                                subclause (I).
            (3) Specialized centers.--The centers and sites 
        described in paragraph (2) may have a specialization in 
        addressing special needs, such as the needs of 
        dislocated workers.
    (d) Required Local Employment and Training Activities.--
            (1) In general.--
                    (A) Allocated funds.--Funds allocated to a 
                local area for adults under paragraph (2)(A) or 
                (3), as appropriate, of section 133(b), and 
                funds allocated to the local area for 
                dislocated workers under section 133(b)(2)(B), 
                shall be used--
                            (i) to establish a one-stop 
                        delivery system described in subsection 
                        (c);
                            (ii) to provide the core services 
                        described in paragraph (2) to adults 
                        and dislocated workers, respectively, 
                        through the one-stop delivery system in 
                        accordance with such paragraph;
                            (iii) to provide the intensive 
                        services described in paragraph (3) to 
                        adults and dislocated workers, 
                        respectively, described in such 
                        paragraph; and
                            (iv) to provide training services 
                        described in paragraph (4) to adults 
                        and dislocated workers, respectively, 
                        described in such paragraph.
                    (B) Other funds.--A portion of the funds 
                made available under Federal law authorizing 
                the programs and activities described in 
                section 121(b)(1)(B), including the Wagner-
                Peyser Act (29 U.S.C. 49 et seq.), shall be 
                used as described in clauses (i) and (ii) of 
                subparagraph (A), to the extent not 
                inconsistent with the Federal law involved.
            (2) Core services.--Funds described in paragraph 
        (1)(A) shall be used to provide core services, which 
        shall be available to individuals who are adults or 
        dislocated workers through the one-stop delivery system 
        and shall, at a minimum, include--
                    (A) determinations of whether the 
                individuals are eligible to receive assistance 
                under this subtitle;
                    (B) outreach, intake (which may include 
                worker profiling), and orientation to the 
                information and other services available 
                through the one-stop delivery system;
                    (C) initial assessment of skill levels, 
                aptitudes, abilities, and supportive service 
                needs;
                    (D) job search and placement assistance, 
                and where appropriate, career counseling;
                    (E) provision of employment statistics 
                information, including the provision of 
                accurate information relating to local, 
                regional, and national labor market areas, 
                including--
                            (i) job vacancy listings in such 
                        labor market areas;
                            (ii) information on job skills 
                        necessary to obtain the jobs described 
                        in clause (i); and
                            (iii) information relating to local 
                        occupations in demand and the earnings 
                        and skill requirements for such 
                        occupations; and
                    (F) provision of performance information 
                and program cost information on eligible 
                providers of training services as described in 
                section 122, provided by program, and eligible 
                providers of youth activities described in 
                section 123, providers of adult education 
                described in title II, providers of 
                postsecondary vocational education activities 
                and vocational education activities available 
                to school dropouts under the Carl D. Perkins 
                Vocational and Applied Technology Education Act 
                (20 U.S.C. 2301 et seq.), and providers of 
                vocational rehabilitation program activities 
                described in title I of the Rehabilitation Act 
                of 1973 (29 U.S.C. 720 et seq.);
                    (G) provision of information regarding how 
                the local area is performing on the local 
                performance measures and any additional 
                performance information with respect to the 
                one-stop delivery system in the local area;
                    (H) provision of accurate information 
                relating to the availability of supportive 
                services, including child care and 
                transportation, available in the local area, 
                and referral to such services, as appropriate;
                    (I) provision of information regarding 
                filing claims for unemployment compensation;
                    (J) assistance in establishing eligibility 
                for--
                            (i) welfare-to-work activities 
                        authorized under section 403(a)(5) of 
                        the Social Security Act (as added by 
                        section 5001 of the Balanced Budget Act 
                        of 1997) available in the local area; 
                        and
                            (ii) programs of financial aid 
                        assistance for training and education 
                        programs that are not funded under this 
                        Act and are available in the local 
                        area; and
                    (K) followup services, including counseling 
                regarding the workplace, for participants in 
                workforce investment activities authorized 
                under this subtitle who are placed in 
                unsubsidized employment, for not less than 12 
                months after the first day of the employment, 
                as appropriate.
            (3) Intensive services.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to the local area for dislocated 
                workers under section 133(b)(2)(B), shall be 
                used to provide intensive services to adults 
                and dislocated workers, respectively--
                            (i)(I) who are unemployed and are 
                        unable to obtain employment through 
                        core services provided under paragraph 
                        (2); and
                            (II) who have been determined by a 
                        one-stop operator to be in need of more 
                        intensive services in order to obtain 
                        employment; or
                            (ii) who are employed, but who are 
                        determined by a one-stop operator to be 
                        in need of such intensive services in 
                        order to obtain or retain employment 
                        that allows for self-sufficiency.
                    (B) Delivery of services.--Such intensive 
                services shall be provided through the one-stop 
                delivery system--
                            (i) directly through one-stop 
                        operators identified pursuant to 
                        section 121(d); or
                            (ii) through contracts with service 
                        providers, which may include contracts 
                        with public, private for-profit, and 
                        private nonprofit service providers, 
                        approved by the local board.
                    (C) Types of services.--Such intensive 
                services may include the following:
                            (i) Comprehensive and specialized 
                        assessments of the skill levels and 
                        service needs of adults and dislocated 
                        workers, which may include--
                                    (I) diagnostic testing and 
                                use of other assessment tools; 
                                and
                                    (II) in-depth interviewing 
                                and evaluation to identify 
                                employment barriers and 
                                appropriate employment goals.
                            (ii) Development of an individual 
                        employment plan, to identify the 
                        employment goals, appropriate 
                        achievement objectives, and appropriate 
                        combination of services for the 
                        participant to achieve the employment 
                        goals.
                            (iii) Group counseling.
                            (iv) Individual counseling and 
                        career planning.
                            (v) Case management for 
                        participants seeking training services 
                        under paragraph (4).
                            (vi) Short-term prevocational 
                        services, including development of 
                        learning skills, communication skills, 
                        interviewing skills, punctuality, 
                        personal maintenance skills, and 
                        professional conduct, to prepare 
                        individuals for unsubsidized employment 
                        or training.
            (4) Training services.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to a local area for dislocated 
                workers under section 133(b)(2)(B) shall be 
                used to provide training services to adults and 
                dislocated workers, respectively--
                            (i) who have met the eligibility 
                        requirements for intensive services 
                        under paragraph (3)(A) and who are 
                        unable to obtain or retain employment 
                        through such services;
                            (ii) who after an interview, 
                        evaluation, or assessment, and case 
                        management, have been determined by a 
                        one-stop operator or one-stop partner, 
                        as appropriate, to be in need of 
                        training services and to have the 
                        skills and qualifications to 
                        successfully participate in the 
                        selected program of training services;
                            (iii) who select programs of 
                        training services that are directly 
                        linked to the employment opportunities 
                        in the local area involved or in 
                        another area in which the adults or 
                        dislocated workers receiving such 
                        services are willing to relocate;
                            (iv) who meet the requirements of 
                        subparagraph (B); and
                            (v) who are determined to be 
                        eligible in accordance with the 
                        priority system, if any, in effect 
                        under subparagraph (E).
                    (B) Qualification.--
                            (i) Requirement.--Except as 
                        provided in clause (ii), provision of 
                        such training services shall be limited 
                        to individuals who--
                                    (I) are unable to obtain 
                                other grant assistance for such 
                                services, including Federal 
                                Pell Grants established under 
                                title IV of the Higher 
                                Education Act of 1965 (20 
                                U.S.C. 1070 et seq.); or
                                    (II) require assistance 
                                beyond the assistance made 
                                available under other grant 
                                assistance programs, including 
                                Federal Pell Grants.
                            (ii) Reimbursements.--Training 
                        services may be provided under this 
                        paragraph to an individual who 
                        otherwise meets the requirements of 
                        this paragraph while an application for 
                        a Federal Pell Grant is pending, except 
                        that if such individual is subsequently 
                        awarded a Federal Pell Grant, 
                        appropriate reimbursement shall be made 
                        to the local area from such Federal 
                        Pell Grant.
                    (C) Provider qualification.--Training 
                services shall be provided through providers 
                identified in accordance with section 122.
                    (D) Training services.--Training services 
                may include--
                            (i) occupational skills training, 
                        including training for nontraditional 
                        employment;
                            (ii) on-the-job training;
                            (iii) programs that combine 
                        workplace training with related 
                        instruction, which may include 
                        cooperative education programs;
                            (iv) training programs operated by 
                        the private sector;
                            (v) skill upgrading and retraining;
                            (vi) entrepreneurial training;
                            (vii) job readiness training;
                            (viii) adult education and literacy 
                        activities provided in combination with 
                        services described in any of clauses 
                        (i) through (vii); and
                            (ix) customized training conducted 
                        with a commitment by an employer or 
                        group of employers to employ an 
                        individual upon successful completion 
                        of the training.
                    (E) Priority.--In the event that funds 
                allocated to a local area for adult employment 
                and training activities under paragraph (2)(A) 
                or (3) of section 133(b) are limited, priority 
                shall be given to recipients of public 
                assistance and other low-income individuals for 
                intensive services and training services. The 
                appropriate local board and the Governor shall 
                direct the one-stop operators in the local area 
                with regard to making determinations related to 
                such priority.
                    (F) Consumer choice requirements.--
                            (i) In general.--Training services 
                        provided under this paragraph shall be 
                        provided in a manner that maximizes 
                        consumer choice in the selection of an 
                        eligible provider of such services.
                            (ii) Eligible providers.--Each 
                        local board, through one-stop centers 
                        referred to in subsection (c), shall 
                        make available--
                                    (I) the State list of 
                                eligible providers of training 
                                services required under section 
                                122(e), with a description of 
                                the programs through which the 
                                providers may offer the 
                                training services, and the 
                                information identifying 
                                eligible providers of on-the-
                                job training and customized 
                                training required under section 
                                122(h); and
                                    (II) the performance 
                                information and performance 
                                cost information relating to 
                                eligible providers of training 
                                services described in 
                                subsections (e) and (h) of 
                                section 122.
                    (G) Use of individual training accounts.--
                            (i) In general.--Except as provided 
                        in clause (ii), training services 
                        provided under this paragraph shall be 
                        provided through the use of individual 
                        training accounts in accordance with 
                        this paragraph, and shall be provided 
                        to eligible individuals through the 
                        one-stop delivery system.
                            (ii) Exceptions.--Training services 
                        authorized under this paragraph may be 
                        provided pursuant to a contract for 
                        services in lieu of an individual 
                        training account if the requirements of 
                        subparagraph (F) are met and if--
                                    (I) such services are on-
                                the-job training provided by an 
                                employer or customized 
                                training;
                                    (II) the local board 
                                determines there are an 
                                insufficient number of eligible 
                                providers of training services 
                                in the local area involved 
                                (such as in a rural area) to 
                                accomplish the purposes of a 
                                system of individual training 
                                accounts; or
                                    (III) the local board 
                                determines that there is a 
                                training services program of 
                                demonstrated effectiveness 
                                offered in the local area by a 
                                community-based organization or 
                                another private organization to 
                                serve special participant 
                                populations that face multiple 
                                barriers to employment.
                            (iii) Linkage to occupations in 
                        demand.--Training services provided 
                        under this paragraph shall be directly 
                        linked to occupations that are in 
                        demand in the local area, or in another 
                        area to which an adult or dislocated 
                        worker receiving such services is 
                        willing to relocate, except that a 
                        local board may approve training 
                        services for occupations determined by 
                        the local board to be in sectors of the 
                        economy that have a high potential for 
                        sustained demand or growth in the local 
                        area.
                            (iv) Definition.--In this 
                        subparagraph, the term ``special 
                        participant population that faces 
                        multiple barriers to employment'' means 
                        a population of low-income individuals 
                        that is included in 1 or more of the 
                        following categories:
                                    (I) Individuals with 
                                substantial language or 
                                cultural barriers.
                                    (II) Offenders.
                                    (III) Homeless individuals.
                                    (IV) Other hard-to-serve 
                                populations as defined by the 
                                Governor involved.
    (e) Permissible Local Employment and Training Activities.--
            (1) Discretionary one-stop delivery activities.--
        Funds allocated to a local area for adults under 
        paragraph (2)(A) or (3), as appropriate, of section 
        133(b), and funds allocated to the local area for 
        dislocated workers under section 133(b)(2)(B), may be 
        used to provide, through one-stop delivery described in 
        subsection (c)(2)--
                    (A) customized screening and referral of 
                qualified participants in training services 
                described in subsection (d)(4) to employment; 
                and
                    (B) customized employment-related services 
                to employers on a fee-for-service basis.
            (2) Supportive services.--Funds allocated to a 
        local area for adults under paragraph (2)(A) or (3), as 
        appropriate, of section 133(b), and funds allocated to 
        the local area for dislocated workers under section 
        133(b)(2)(B), may be used to provide supportive 
        services to adults and dislocated workers, 
        respectively--
                    (A) who are participating in programs with 
                activities authorized in any of paragraphs (2), 
                (3), or (4) of subsection (d); and
                    (B) who are unable to obtain such 
                supportive services through other programs 
                providing such services.
            (3) Needs-related payments.--
                    (A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to the local area for dislocated 
                workers under section 133(b)(2)(B), may be used 
                to provide needs-related payments to adults and 
                dislocated workers, respectively, who are 
                unemployed and do not qualify for (or have 
                ceased to qualify for) unemployment 
                compensation for the purpose of enabling such 
                individuals to participate in programs of 
                training services under subsection (d)(4).
                    (B) Additional eligibility requirements.--
                In addition to the requirements contained in 
                subparagraph (A), a dislocated worker who has 
                ceased to qualify for unemployment compensation 
                may be eligible to receive needs-related 
                payments under this paragraph only if such 
                worker was enrolled in the training services--
                            (i) by the end of the 13th week 
                        after the most recent layoff that 
                        resulted in a determination of the 
                        worker's eligibility for employment and 
                        training activities for dislocated 
                        workers under this subtitle; or
                            (ii) if later, by the end of the 
                        8th week after the worker is informed 
                        that a short-term layoff will exceed 6 
                        months.
                    (C) Level of payments.--The level of a 
                needs-related payment made to a dislocated 
                worker under this paragraph shall not exceed 
                the greater of--
                            (i) the applicable level of 
                        unemployment compensation; or
                            (ii) if such worker did not qualify 
                        for unemployment compensation, an 
                        amount equal to the poverty line, for 
                        an equivalent period, which amount 
                        shall be adjusted to reflect changes in 
                        total family income.

                     CHAPTER 6--GENERAL PROVISIONS

SEC. 136. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of 
the activities described in this section, to assess the 
effectiveness of States and local areas in achieving continuous 
improvement of workforce investment activities funded under 
this subtitle, in order to optimize the return on investment of 
Federal funds in statewide and local workforce investment 
activities.
    (b) State Performance Measures.--
            (1) In general.--For each State, the State 
        performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in paragraph (2)(A) and the customer 
                satisfaction indicator of performance described 
                in paragraph (2)(B); and
                    (ii) additional indicators of performance 
                (if any) identified by the State under 
                paragraph (2)(C); and
                    (B) a State adjusted level of performance 
                for each indicator described in subparagraph 
                (A).
            (2) Indicators of performance.--
                    (A) Core indicators of performance.--
                            (i) In general.--The core 
                        indicators of performance for 
                        employment and training activities 
                        authorized under section 134 (except 
                        for self-service and informational 
                        activities) and (for participants who 
                        are eligible youth age 19 through 21) 
                        for youth activities authorized under 
                        section 129 shall consist of--
                                    (I) entry into unsubsidized 
                                employment;
                                    (II) retention in 
                                unsubsidized employment 6 
                                months after entry into the 
                                employment;
                                    (III) earnings received in 
                                unsubsidized employment 6 
                                months after entry into the 
                                employment; and
                                    (IV) attainment of a 
                                recognized credential relating 
                                to achievement of educational 
                                skills, which may include 
                                attainment of a secondary 
                                school diploma or its 
                                recognized equivalent, or 
                                occupational skills, by 
                                participants who enter 
                                unsubsidized employment, or by 
                                participants who are eligible 
                                youth age 19 through 21 who 
                                enter postsecondary education, 
                                advanced training, or 
                                unsubsidized employment.
                            (ii) Core indicators for eligible 
                        youth.--The core indicators of 
                        performance (for participants who are 
                        eligible youth age 14 through 18) for 
                        youth activities authorized under 
                        section 129, shall include--
                                    (I) attainment of basic 
                                skills and, as appropriate, 
                                work readiness or occupational 
                                skills;
                                    (II) attainment of 
                                secondary school diplomas and 
                                their recognized equivalents; 
                                and
                                    (III) placement and 
                                retention in postsecondary 
                                education or advanced training, 
                                or placement and retention in 
                                military service, employment, 
                                or qualified apprenticeships.
                    (B) Customer satisfaction indicators.--The 
                customer satisfaction indicator of performance 
                shall consist of customer satisfaction of 
                employers and participants with services 
                received from the workforce investment 
                activities authorized under this subtitle. 
                Customer satisfaction may be measured through 
                surveys conducted after the conclusion of 
                participation in the workforce investment 
                activities.
                    (C) Additional indicators.--A State may 
                identify in the State plan additional 
                indicators for workforce investment activities 
                authorized under this subtitle.
            (3) Levels of performance.--
                    (A) State adjusted levels of performance 
                for core indicators and customer satisfaction 
                indicator.--
                            (i) In general.--For each State 
                        submitting a State plan, there shall be 
                        established, in accordance with this 
                        subparagraph, levels of performance for 
                        each of the core indicators of 
                        performance described in paragraph 
                        (2)(A) and the customer satisfaction 
                        indicator described in paragraph (2)(B) 
                        for workforce investment activities 
                        authorized under this subtitle. The 
                        levels of performance established under 
                        this subparagraph shall, at a minimum--
                                    (I) be expressed in an 
                                objective, quantifiable, and 
                                measurable form; and
                                    (II) show the progress of 
                                the State toward continuously 
                                improving in performance.
                            (ii) Identification in state 
                        plan.--Each State shall identify, in 
                        the State plan submitted under section 
                        112, expected levels of performance for 
                        each of the core indicators of 
                        performance and the customer 
                        satisfaction indicator of performance, 
                        for the first 3 program years covered 
                        by the State plan.
                            (iii) Agreement on state adjusted 
                        levels of performance for first 3 
                        years.--In order to ensure an optimal 
                        return on the investment of Federal 
                        funds in workforce investment 
                        activities authorized under this 
                        subtitle, the Secretary and each 
                        Governor shall reach agreement on 
                        levels of performance for each of the 
                        core indicators of performance and the 
                        customer satisfaction indicator of 
                        performance, for the first 3 program 
                        years covered by the State plan, taking 
                        into account the levels identified in 
                        the State plan under clause (ii) and 
                        the factors described in clause (iv). 
                        The levels agreed to under this clause 
                        shall be considered to be the State 
                        adjusted levels of performance for the 
                        State for such years and shall be 
                        incorporated into the State plan prior 
                        to the approval of such plan.
                            (iv) Factors.--The agreement 
                        described in clause (iii) or (v) shall 
                        take into account--
                                    (I) the extent to which the 
                                levels involved will assist the 
                                State in attaining a high level 
                                of customer satisfaction;
                                    (II) how the levels 
                                involved compare with the State 
                                adjusted levels of performance 
                                established for other States, 
                                taking into account factors 
                                including differences in 
                                economic conditions, the 
                                characteristics of participants 
                                when the participants entered 
                                the program, and the services 
                                to be provided; and
                                    (III) the extent to which 
                                such levels involved promote 
                                continuous improvement in 
                                performance on the performance 
                                measures by such State and 
                                ensure optimal return on the 
                                investment of Federal funds.
                            (v) Agreement on state adjusted 
                        levels of performance for 4th and 5th 
                        years.--Prior to the fourth program 
                        year covered by the State plan, the 
                        Secretary and each Governor shall reach 
                        agreement on levels of performance for 
                        each of the core indicators of 
                        performance and the customer 
                        satisfaction indicator of performance, 
                        for the fourth and fifth program years 
                        covered by the State plan, taking into 
                        account the factors described in clause 
                        (iv). The levels agreed to under this 
                        clause shall be considered to be the 
                        State adjusted levels of performance 
                        for the State for such years and shall 
                        be incorporated into the State plan.
                            (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause 
                        (iv)(II), the Governor may request that 
                        the State adjusted levels of 
                        performance agreed to under clause 
                        (iii) or (v) be revised. The Secretary, 
                        after collaboration with the 
                        representatives described in subsection 
                        (i), shall issue objective criteria and 
                        methods for making such revisions.
                    (B) Levels of performance for additional 
                indicators.--The State may identify, in the 
                State plan, State levels of performance for 
                each of the additional indicators described in 
                paragraph (2)(C). Such levels shall be 
                considered to be State adjusted levels of 
                performance for purposes of this title.
    (c) Local Performance Measures.--
            (1) In general.--For each local area in a State, 
        the local performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in subsection (b)(2)(A), and the 
                customer satisfaction indicator of performance 
                described in subsection (b)(2)(B), for 
                activities described in such subsections, other 
                than statewide workforce investment activities; 
                and
                    (ii) additional indicators of performance 
                (if any) identified by the State under 
                subsection (b)(2)(C) for activities described 
                in such subsection, other than statewide 
                workforce investment activities; and
                    (B) a local level of performance for each 
                indicator described in subparagraph (A).
            (2) Local level of performance.--The local board, 
        the chief elected official, and the Governor shall 
        negotiate and reach agreement on the local levels of 
        performance based on the State adjusted levels of 
        performance established under subsection (b).
            (3) Determinations.--In determining such local 
        levels of performance, the local board, the chief 
        elected official, and the Governor shall take into 
        account the specific economic, demographic, and other 
        characteristics of the populations to be served in the 
        local area.
    (d) Report.--
            (1) In general.--Each State that receives an 
        allotment under section 127 or 132 shall annually 
        prepare and submit to the Secretary a report on the 
        progress of the State in achieving State performance 
        measures, including information on the levels of 
        performance achieved by the State with respect to the 
        core indicators of performance and the customer 
        satisfaction indicator. The annual report also shall 
        include information regarding the progress of local 
        areas in the State in achieving local performance 
        measures, including information on the levels of 
        performance achieved by the areas with respect to the 
        core indicators of performance and the customer 
        satisfaction indicator. The report also shall include 
        information on the status of State evaluations of 
        workforce investment activities described in subsection 
        (e).
            (2) Additional information.--In preparing such 
        report, the State shall include, at a minimum, 
        information on participants in workforce investment 
        activities authorized under this subtitle relating to--
                    (A) entry by participants who have 
                completed training services provided under 
                section 134(d)(4) into unsubsidized employment 
                related to the training received;
                    (B) wages at entry into employment for 
                participants in workforce investment activities 
                who entered unsubsidized employment, including 
                the rate of wage replacement for such 
                participants who are dislocated workers;
                    (C) cost of workforce investment activities 
                relative to the effect of the activities on the 
                performance of participants;
                    (D) retention and earnings received in 
                unsubsidized employment 12 months after entry 
                into the employment;
                    (E) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of participants in 
                workforce investment activities who received 
                the training services compared with the 
                performance of participants in workforce 
                investment activities who received only 
                services other than the training services 
                (excluding participants who received only self-
                service and informational activities); and
                    (F) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of recipients of public 
                assistance, out-of-school youth, veterans, 
                individuals with disabilities, displaced 
                homemakers, and older individuals.
            (3) Information dissemination.--The Secretary--
                    (A) shall make the information contained in 
                such reports available to the general public 
                through publication and other appropriate 
                methods;
                    (B) shall disseminate State-by-State 
                comparisons of the information; and
                    (C) shall provide the appropriate 
                congressional committees with copies of such 
                reports.
    (e) Evaluation of State Programs.--
            (1) In general.--Using funds made available under 
        this subtitle, the State, in coordination with local 
        boards in the State, shall conduct ongoing evaluation 
        studies of workforce investment activities carried out 
        in the State under this subtitle in order to promote, 
        establish, implement, and utilize methods for 
        continuously improving the activities in order to 
        achieve high-level performance within, and high-level 
        outcomes from, the statewide workforce investment 
        system. To the maximum extent practicable, the State 
        shall coordinate the evaluations with the evaluations 
        provided for by the Secretary under section 172.
            (2) Design.--The evaluation studies conducted under 
        this subsection shall be designed in conjunction with 
        the State board and local boards and shall include 
        analysis of customer feedback and outcome and process 
        measures in the statewide workforce investment system. 
        The studies may include use of control groups.
            (3) Results.--The State shall periodically prepare 
        and submit to the State board, and local boards in the 
        State, reports containing the results of evaluation 
        studies conducted under this subsection, to promote the 
        efficiency and effectiveness of the statewide workforce 
        investment system in improving employability for 
        jobseekers and competitiveness for employers.
    (f) Fiscal and Management Accountability Information 
Systems.--
            (1) In general.--Using funds made available under 
        this subtitle, the Governor, in coordination with local 
        boards and chief elected officials in the State, shall 
        establish and operate a fiscal and management 
        accountability information system based on guidelines 
        established by the Secretary after consultation with 
        the Governors, local elected officials, and one-stop 
        partners. Such guidelines shall promote efficient 
        collection and use of fiscal and management information 
        for reporting and monitoring the use of funds made 
        available under this subtitle and for preparing the 
        annual report described in subsection (d).
            (2) Wage records.--In measuring the progress of the 
        State on State and local performance measures, a State 
        shall utilize quarterly wage records, consistent with 
        State law. The Secretary shall make arrangements, 
        consistent with State law, to ensure that the wage 
        records of any State are available to any other State 
        to the extent that such wage records are required by 
        the State in carrying out the State plan of the State 
        or completing the annual report described in subsection 
        (d).
            (3) Confidentiality.--In carrying out the 
        requirements of this Act, the State shall comply with 
        section 444 of the General Education Provisions Act (20 
        U.S.C. 1232g) (as added by the Family Educational 
        Rights and Privacy Act of 1974).
    (g) Sanctions for State Failure To Meet State Performance 
Measures.--
            (1) States.--
                    (A) Technical assistance.--If a State fails 
                to meet State adjusted levels of performance 
                relating to indicators described in 
                subparagraph (A) or (B) of subsection (b)(2) 
                for a program for any program year, the 
                Secretary shall, upon request, provide 
                technical assistance in accordance with section 
                170, including assistance in the development of 
                a performance improvement plan.
                    (B) Reduction in amount of grant.--If such 
                failure continues for a second consecutive 
                year, or if a State fails to submit a report 
                under subsection (d) for any program year, the 
                Secretary may reduce by not more than 5 
                percent, the amount of the grant that would (in 
                the absence of this paragraph) be payable to 
                the State under such program for the 
                immediately succeeding program year. Such 
                penalty shall be based on the degree of failure 
                to meet State adjusted levels of performance.
            (2) Funds resulting from reduced allotments.--The 
        Secretary shall use an amount retained, as a result of 
        a reduction in an allotment to a State made under 
        paragraph (1)(B), to provide incentive grants under 
        section 503.
    (h) Sanctions for Local Area Failure To Meet Local 
Performance Measures.--
            (1) Technical assistance.--If a local area fails to 
        meet levels of performance relating to indicators 
        described in subparagraph (A) or (B) of subsection 
        (b)(2) for a program for any program year, the 
        Governor, or upon request by the Governor, the 
        Secretary, shall provide technical assistance, which 
        may include assistance in the development of a 
        performance improvement plan, or the development of a 
        modified local plan.
            (2) Corrective actions.--
                    (A) In general.--If such failure continues 
                for a second consecutive year, the Governor 
                shall take corrective actions, which may 
                include development of a reorganization plan 
                through which the Governor may--
                            (i) require the appointment and 
                        certification of a new local board 
                        (consistent with the criteria 
                        established under section 117(b));
                            (ii) prohibit the use of eligible 
                        providers and one-stop partners 
                        identified as achieving a poor level of 
                        performance; or
                            (iii) take such other actions as 
                        the Governor determines are 
                        appropriate.
                    (B) Appeal by local area.--
                            (i) Appeal to governor.--A local 
                        area that is subject to a 
                        reorganization plan under subparagraph 
                        (A) may, not later than 30 days after 
                        receiving notice of the reorganization 
                        plan, appeal to the Governor to rescind 
                        or revise such plan. In such case, the 
                        Governor shall make a final decision 
                        not later then 30 days after the 
                        receipt of the appeal.
                            (ii) Subsequent action.--The local 
                        area may, not later than 30 days after 
                        receiving a decision from the Governor 
                        pursuant to clause (i), appeal such 
                        decision to the Secretary. In such 
                        case, the Secretary shall make a final 
                        decision not later than 30 days after 
                        the receipt of the appeal.
                    (C) Effective date.--The decision made by 
                the Governor under clause (i) of subparagraph 
                (B) shall become effective at the time the 
                Governor issues the decision pursuant to such 
                clause. Such decision shall remain effective 
                unless the Secretary rescinds or revises such 
                plan pursuant to clause (ii) of subparagraph 
                (B).
    (i) Other Measures and Terminology.--
            (1) Responsibilities.--In order to ensure 
        nationwide comparability of performance data, the 
        Secretary, after collaboration with representatives of 
        appropriate Federal agencies, and representatives of 
        States and political subdivisions, business and 
        industry, employees, eligible providers of employment 
        and training activities, educators, and participants, 
        with expertise regarding workforce investment policies 
        and workforce investment activities, shall issue--
                    (A) definitions for information required to 
                be reported under subsection (d)(2);
                    (B) terms for a menu of additional 
                indicators of performance described in 
                subsection (b)(2)(C) to assist States in 
                assessing their progress toward State workforce 
                investment goals; and
                    (C) objective criteria and methods 
                described in subsection (b)(3)(A)(vi) for 
                making revisions to levels of performance.
            (2) Definitions for core indicators.--The Secretary 
        and the representatives described in paragraph (1) 
        shall participate in the activities described in 
        section 502 concerning the issuance of definitions for 
        indicators of performance described in subsection 
        (b)(2)(A).
            (3) Assistance.--The Secretary shall make the 
        services of staff available to the representatives to 
        assist the representatives in participating in the 
        collaboration described in paragraph (1) and in the 
        activities described in section 502.

SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

    (a) Youth Activities.--There are authorized to be 
appropriated to carry out the activities described in section 
127(a), such sums as may be necessary for each of fiscal years 
1999 through 2003.
    (b) Adult Employment and Training Activities.--There are 
authorized to be appropriated to carry out the activities 
described in section 132(a)(1), such sums as may be necessary 
for each of fiscal years 1999 through 2003.
    (c) Dislocated Worker Employment and Training Activities.--
There are authorized to be appropriated to carry out the 
activities described in section 132(a)(2), such sums as may be 
necessary for each of fiscal years 1999 through 2003.

                         Subtitle C--Job Corps

SEC. 141. PURPOSES.

    The purposes of this subtitle are--
            (1) to maintain a national Job Corps program, 
        carried out in partnership with States and communities, 
        to assist eligible youth who need and can benefit from 
        an intensive program, operated in a group setting in 
        residential and nonresidential centers, to become more 
        responsible, employable, and productive citizens;
            (2) to set forth standards and procedures for 
        selecting individuals as enrollees in the Job Corps;
            (3) to authorize the establishment of Job Corps 
        centers in which enrollees will participate in 
        intensive programs of activities described in this 
        subtitle; and
            (4) to prescribe various other powers, duties, and 
        responsibilities incident to the operation and 
        continuing development of the Job Corps.

SEC. 142. DEFINITIONS.

    In this subtitle:
            (1) Applicable local board.--The term ``applicable 
        local board'' means a local board--
                    (A) that provides information for a Job 
                Corps center on local employment opportunities 
                and the job skills needed to obtain the 
                opportunities; and
                    (B) that serves communities in which the 
                graduates of the Job Corps center seek 
                employment.
            (2) Applicable one-stop center.--The term 
        ``applicable one-stop center'' means a one-stop 
        customer service center that provides services, such as 
        referral, intake, recruitment, and placement, to a Job 
        Corps center.
            (3) Enrollee.--The term ``enrollee'' means an 
        individual who has voluntarily applied for, been 
        selected for, and enrolled in the Job Corps program, 
        and remains with the program, but has not yet become a 
        graduate.
            (4) Former enrollee.--The term ``former enrollee'' 
        means an individual who has voluntarily applied for, 
        been selected for, and enrolled in the Job Corps 
        program, but left the program before completing the 
        requirements of a vocational training program, or 
        receiving a secondary school diploma or recognized 
        equivalent, as a result of participation in the Job 
        Corps program.
            (5) Graduate.--The term ``graduate'' means an 
        individual who has voluntarily applied for, been 
        selected for, and enrolled in the Job Corps program and 
        has completed the requirements of a vocational training 
        program, or received a secondary school diploma or 
        recognized equivalent, as a result of participation in 
        the Job Corps program.
            (6) Job corps.--The term ``Job Corps'' means the 
        Job Corps described in section 143.
            (7) Job corps center.--The term ``Job Corps 
        center'' means a center described in section 147.
            (8) Operator.--The term ``operator'' means an 
        entity selected under this subtitle to operate a Job 
        Corps center.
            (9) Region.--The term ``region'' means an area 
        served by a regional office of the Employment and 
        Training Administration.
            (10) Service provider.--The term ``service 
        provider'' means an entity selected under this subtitle 
        to provide services described in this subtitle to a Job 
        Corps center.

SEC. 143. ESTABLISHMENT.

    There shall be within the Department of Labor a ``Job 
Corps''.

SEC. 144. INDIVIDUALS ELIGIBLE FOR THE JOB CORPS.

    To be eligible to become an enrollee, an individual shall 
be--
            (1) not less than age 16 and not more than age 21 
        on the date of enrollment, except that--
                    (A) not more than 20 percent of the 
                individuals enrolled in the Job Corps may be 
                not less than age 22 and not more than age 24 
                on the date of enrollment; and
                    (B) either such maximum age limitation may 
                be waived by the Secretary, in accordance with 
                regulations of the Secretary, in the case of an 
                individual with a disability;
            (2) a low-income individual; and
            (3) an individual who is 1 or more of the 
        following:
                    (A) Basic skills deficient.
                    (B) A school dropout.
                    (C) Homeless, a runaway, or a foster child.
                    (D) A parent.
                    (E) An individual who requires additional 
                education, vocational training, or intensive 
                counseling and related assistance, in order to 
                participate successfully in regular schoolwork 
                or to secure and hold employment.

SEC. 145. RECRUITMENT, SCREENING, SELECTION, AND ASSIGNMENT OF 
                    ENROLLEES.

    (a) Standards and Procedures.--
            (1) In general.--The Secretary shall prescribe 
        specific standards and procedures for the recruitment, 
        screening, and selection of eligible applicants for the 
        Job Corps, after considering recommendations from the 
        Governors, local boards, and other interested parties.
            (2) Methods.--In prescribing standards and 
        procedures under paragraph (1), the Secretary, at a 
        minimum, shall--
                    (A) prescribe procedures for informing 
                enrollees that drug tests will be administered 
                to the enrollees and the results received 
                within 45 days after the enrollees enroll in 
                the Job Corps;
                    (B) establish standards for recruitment of 
                Job Corps applicants;
                    (C) establish standards and procedures 
                for--
                            (i) determining, for each 
                        applicant, whether the educational and 
                        vocational needs of the applicant can 
                        best be met through the Job Corps 
                        program or an alternative program in 
                        the community in which the applicant 
                        resides; and
                            (ii) obtaining from each applicant 
                        pertinent data relating to background, 
                        needs, and interests for determining 
                        eligibility and potential assignment;
                    (D) where appropriate, take measures to 
                improve the professional capability of the 
                individuals conducting screening of the 
                applicants; and
                    (E) assure that an appropriate number of 
                enrollees are from rural areas.
            (3) Implementation.--To the extent practicable, the 
        standards and procedures shall be implemented through 
        arrangements with--
                    (A) applicable one-stop centers;
                    (B) community action agencies, business 
                organizations, and labor organizations; and
                    (C) agencies and individuals that have 
                contact with youth over substantial periods of 
                time and are able to offer reliable information 
                about the needs and problems of youth.
            (4) Consultation.--The standards and procedures 
        shall provide for necessary consultation with 
        individuals and organizations, including court, 
        probation, parole, law enforcement, education, welfare, 
        and medical authorities and advisers.
            (5) Reimbursement.--The Secretary is authorized to 
        enter into contracts with and make payments to 
        individuals and organizations for the cost of 
        conducting recruitment, screening, and selection of 
        eligible applicants for the Job Corps, as provided for 
        in this section. The Secretary shall make no payment to 
        any individual or organization solely as compensation 
        for referring the names of applicants for the Job 
        Corps.
    (b) Special Limitations on Selection.--
            (1) In general.--No individual shall be selected as 
        an enrollee unless the individual or organization 
        implementing the standards and procedures described in 
        subsection (a) determines that--
                    (A) there is a reasonable expectation that 
                the individual considered for selection can 
                participate successfully in group situations 
                and activities, and is not likely to engage in 
                behavior that would prevent other enrollees 
                from receiving the benefit of the Job Corps 
                program or be incompatible with the maintenance 
                of sound discipline and satisfactory 
                relationships between the Job Corps center to 
                which the individual might be assigned and 
                communities surrounding the Job Corps center;
                    (B) the individual manifests a basic 
                understanding of both the rules to which the 
                individual will be subject and of the 
                consequences of failure to observe the rules; 
                and
                    (C) the individual has passed a background 
                check conducted in accordance with procedures 
                established by the Secretary.
            (2) Individuals on probation, parole, or supervised 
        release.--An individual on probation, parole, or 
        supervised release may be selected as an enrollee only 
        if release from the supervision of the probation or 
        parole official involved is satisfactory to the 
        official and the Secretary and does not violate 
        applicable laws (including regulations). No individual 
        shall be denied a position in the Job Corps solely on 
        the basis of individual contact with the criminal 
        justice system.
    (c) Assignment Plan.--
            (1) In general.--Every 2 years, the Secretary shall 
        develop and implement an assignment plan for assigning 
        enrollees to Job Corps centers. In developing the plan, 
        the Secretary shall, based on the analysis described in 
        paragraph (2), establish targets, applicable to each 
        Job Corps center, for--
                    (A) the maximum attainable percentage of 
                enrollees at the Job Corps center that reside 
                in the State in which the center is located; 
                and
                    (B) the maximum attainable percentage of 
                enrollees at the Job Corps center that reside 
                in the region in which the center is located, 
                and in surrounding regions.
            (2) Analysis.--In order to develop the plan 
        described in paragraph (1), the Secretary shall, every 
        2 years, analyze, for the Job Corps center--
                    (A) the size of the population of 
                individuals eligible to participate in Job 
                Corps in the State and region in which the Job 
                Corps center is located, and in surrounding 
                regions;
                    (B) the relative demand for participation 
                in the Job Corps in the State and region, and 
                in surrounding regions; and
                    (C) the capacity and utilization of the Job 
                Corps center, including services provided 
                through the center.
    (d) Assignment of Individual Enrollees.--
            (1) In general.--After an individual has been 
        selected for the Job Corps in accordance with the 
        standards and procedures of the Secretary under 
        subsection (a), the enrollee shall be assigned to the 
        Job Corps center that is closest to the home of the 
        enrollee, except that the Secretary may waive this 
        requirement if--
                    (A) the enrollee chooses a vocational 
                training program, or requires an English 
                literacy program, that is not available at such 
                center;
                    (B) the enrollee would be unduly delayed in 
                participating in the Job Corps program because 
                the closest center is operating at full 
                capacity; or
                    (C) the parent or guardian of the enrollee 
                requests assignment of the enrollee to another 
                Job Corps center due to circumstances in the 
                community of the enrollee that would impair 
                prospects for successful participation in the 
                Job Corps program.
            (2) Enrollees who are younger than 18.--An enrollee 
        who is younger than 18 shall not be assigned to a Job 
        Corps center other than the center closest to the home 
        of the enrollee pursuant to paragraph (1) if the parent 
        or guardian of the enrollee objects to the assignment.

SEC. 146. ENROLLMENT.

    (a) Relationship Between Enrollment and Military 
Obligations.--Enrollment in the Job Corps shall not relieve any 
individual of obligations under the Military Selective Service 
Act (50 U.S.C. App. 451 et seq.).
    (b) Period of Enrollment.--No individual may be enrolled in 
the Job Corps for more than 2 years, except--
            (1) in a case in which completion of an advanced 
        career training program under section 148(c) would 
        require an individual to participate in the Job Corps 
        for not more than 1 additional year; or
            (2) as the Secretary may authorize in a special 
        case.

SEC. 147. JOB CORPS CENTERS.

    (a) Operators and Service Providers.--
            (1) Eligible entities.--
                    (A) Operators.--The Secretary shall enter 
                into an agreement with a Federal, State, or 
                local agency, an area vocational education 
                school or residential vocational school, or a 
                private organization, for the operation of each 
                Job Corps center.
                    (B) Providers.--The Secretary may enter 
                into an agreement with a local entity to 
                provide activities described in this subtitle 
                to the Job Corps center.
            (2) Selection process.--
                    (A) Competitive basis.--Except as provided 
                in subsections (c) and (d) of section 303 of 
                the Federal Property and Administrative 
                Services Act of 1949 (41 U.S.C. 253), the 
                Secretary shall select on a competitive basis 
                an entity to operate a Job Corps center and 
                entities to provide activities described in 
                this subtitle to the Job Corps center. In 
                developing a solicitation for an operator or 
                service provider, the Secretary shall consult 
                with the Governor of the State in which the 
                center is located, the industry council for the 
                Job Corps center (if established), and the 
                applicable local board regarding the contents 
                of such solicitation, including elements that 
                will promote the consistency of the activities 
                carried out through the center with the 
                objectives set forth in the State plan or in a 
                local plan.
                    (B) Recommendations and considerations.--
                            (i) Operators.--In selecting an 
                        entity to operate a Job Corps center, 
                        the Secretary shall consider--
                                    (I) the ability of the 
                                entity to coordinate the 
                                activities carried out through 
                                the Job Corps center with 
                                activities carried out under 
                                the appropriate State plan and 
                                local plans;
                                    (II) the degree to which 
                                the vocational training that 
                                the entity proposes for the 
                                center reflects local 
                                employment opportunities in the 
                                local areas in which enrollees 
                                at the center intend to seek 
                                employment;
                                    (III) the degree to which 
                                the entity is familiar with the 
                                surrounding communities, 
                                applicable one-stop centers, 
                                and the State and region in 
                                which the center is located; 
                                and
                                    (IV) the past performance 
                                of the entity, if any, relating 
                                to operating or providing 
                                activities described in this 
                                subtitle to a Job Corps center.
                            (ii) Providers.--In selecting a 
                        service provider for a Job Corps 
                        center, the Secretary shall consider 
                        the factors described in subclauses (I) 
                        through (IV) of clause (i), as 
                        appropriate.
    (b) Character and Activities.--Job Corps centers may be 
residential or nonresidential in character, and shall be 
designed and operated so as to provide enrollees, in a well-
supervised setting, with access to activities described in this 
subtitle. In any year, no more than 20 percent of the 
individuals enrolled in the Job Corps may be nonresidential 
participants in the Job Corps.
    (c) Civilian Conservation Centers.--
            (1) In general.--The Job Corps centers may include 
        Civilian Conservation Centers operated under agreements 
        with the Secretary of Agriculture or the Secretary of 
        the Interior, located primarily in rural areas, which 
        shall provide, in addition to other vocational training 
        and assistance, programs of work experience to 
        conserve, develop, or manage public natural resources 
        or public recreational areas or to develop community 
        projects in the public interest.
            (2) Selection process.--The Secretary may select an 
        entity to operate a Civilian Conservation Center on a 
        competitive basis, as provided in subsection (a), if 
        the center fails to meet such national performance 
        standards as the Secretary shall establish.
    (d) Indian Tribes.--
            (1) General authority.--The Secretary may enter 
        into agreements with Indian tribes to operate Job Corps 
        centers for Indians.
            (2) Definitions.--In this subsection, the terms 
        ``Indian'' and ``Indian tribe'', have the meanings 
        given such terms in subsections (d) and (e), 
        respectively, of section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).

SEC. 148. PROGRAM ACTIVITIES.

    (a) Activities Provided by Job Corps Centers.--
            (1) In general.--Each Job Corps center shall 
        provide enrollees with an intensive, well organized, 
        and fully supervised program of education, vocational 
        training, work experience, recreational activities, 
        physical rehabilitation and development, and 
        counseling. Each Job Corps center shall provide 
        enrollees assigned to the center with access to core 
        services described in section 134(d)(2) and the 
        intensive services described in section 134(d)(3).
            (2) Relationship to opportunities.--
                    (A) In general.--The activities provided 
                under this subsection shall provide work-based 
                learning throughout the enrollment of the 
                enrollees and assist the enrollees in obtaining 
                meaningful unsubsidized employment, 
                participating in secondary education or 
                postsecondary education programs, enrolling in 
                other suitable vocational training programs, or 
                satisfying Armed Forces requirements, on 
                completion of their enrollment.
                    (B) Link to employment opportunities.--The 
                vocational training provided shall be linked to 
                the employment opportunities in the local area 
                in which the enrollee intends to seek 
                employment after graduation.
    (b) Education and Vocational Training.--The Secretary may 
arrange for education and vocational training of enrollees 
through local public or private educational agencies, 
vocational educational institutions, or technical institutes, 
whenever such entities provide education and training 
substantially equivalent in cost and quality to that which the 
Secretary could provide through other means.
    (c) Advanced Career Training Programs.--
            (1) In general.--The Secretary may arrange for 
        programs of advanced career training for selected 
        enrollees in which the enrollees may continue to 
        participate for a period of not to exceed 1 year in 
        addition to the period of participation to which the 
        enrollees would otherwise be limited. The advanced 
        career training may be provided through the eligible 
        providers of training services identified under section 
        122.
            (2) Benefits.--
                    (A) In general.--During the period of 
                participation in an advanced career training 
                program, an enrollee shall be eligible for full 
                Job Corps benefits, or a monthly stipend equal 
                to the average value of the residential 
                support, food, allowances, and other benefits 
                provided to enrollees assigned to residential 
                Job Corps centers.
                    (B) Calculation.--The total amount for 
                which an enrollee shall be eligible under 
                subparagraph (A) shall be reduced by the amount 
                of any scholarship or other educational grant 
                assistance received by such enrollee for 
                advanced career training.
            (3) Demonstration.--Each year, any operator seeking 
        to enroll additional enrollees in an advanced career 
        training program shall demonstrate that participants in 
        such program have achieved a satisfactory rate of 
        completion and placement in training-related jobs 
        before the operator may carry out such additional 
        enrollment.
    (d) Continued Services.--The Secretary shall also provide 
continued services to graduates, including providing counseling 
regarding the workplace for 12 months after the date of 
graduation of the graduates. In selecting a provider for such 
services, the Secretary shall give priority to one-stop 
partners.
    (e) Child Care.--The Secretary shall, to the extent 
practicable, provide child care at or near Job Corps centers, 
for individuals who require child care for their children in 
order to participate in the Job Corps.

SEC. 149. COUNSELING AND JOB PLACEMENT.

    (a) Counseling and Testing.--The Secretary shall arrange 
for counseling and testing for each enrollee at regular 
intervals to measure progress in the education and vocational 
training programs carried out through the Job Corps.
    (b) Placement.--The Secretary shall arrange for counseling 
and testing for enrollees prior to their scheduled graduations 
to determine their capabilities and, based on their 
capabilities, shall make every effort to arrange to place the 
enrollees in jobs in the vocations for which the enrollees are 
trained or to assist the enrollees in obtaining further 
activities described in this subtitle. In arranging for the 
placement of graduates in jobs, the Secretary shall utilize the 
one-stop delivery system to the fullest extent possible.
    (c) Status and Progress.--The Secretary shall determine the 
status and progress of enrollees scheduled for graduation and 
make every effort to assure that their needs for further 
activities described in this subtitle are met.
    (d) Services to Former Enrollees.--The Secretary may 
provide such services as the Secretary determines to be 
appropriate under this subtitle to former enrollees.

SEC. 150. SUPPORT.

    (a) Personal Allowances.--The Secretary may provide 
enrollees assigned to Job Corps centers with such personal 
allowances as the Secretary may determine to be necessary or 
appropriate to meet the needs of the enrollees.
    (b) Readjustment Allowances.--
            (1) Graduates.--The Secretary shall arrange for a 
        readjustment allowance to be paid to graduates. The 
        Secretary shall arrange for the allowance to be paid at 
        the one-stop center nearest to the home of the graduate 
        who is returning home, or at the one-stop center 
        nearest to the location where the graduate has 
        indicated an intent to seek employment. If the 
        Secretary uses any organization, in lieu of a one-stop 
        center, to provide placement services under this Act, 
        the Secretary shall arrange for that organization to 
        pay the readjustment allowance.
            (2) Former enrollees.--The Secretary may provide 
        for a readjustment allowance to be paid to former 
        enrollees. The provision of the readjustment allowance 
        shall be subject to the same requirements as are 
        applicable to the provision of the readjustment 
        allowance paid to graduates under paragraph (1).

SEC. 151. OPERATING PLAN.

    (a) In General.--The provisions of the contract between the 
Secretary and an entity selected to operate a Job Corps center 
shall, at a minimum, serve as an operating plan for the Job 
Corps center.
    (b) Additional Information.--The Secretary may require the 
operator, in order to remain eligible to operate the Job Corps 
center, to submit such additional information as the Secretary 
may require, which shall be considered part of the operating 
plan.
    (c) Availability.--The Secretary shall make the operating 
plan described in subsections (a) and (b), excluding any 
proprietary information, available to the public.

SEC. 152. STANDARDS OF CONDUCT.

    (a) Provision and Enforcement.--The Secretary shall 
provide, and directors of Job Corps centers shall stringently 
enforce, standards of conduct within the centers. Such 
standards of conduct shall include provisions forbidding the 
actions described in subsection (b)(2)(A).
    (b) Disciplinary Measures.--
            (1) In general.--To promote the proper moral and 
        disciplinary conditions in the Job Corps, the directors 
        of Job Corps centers shall take appropriate 
        disciplinary measures against enrollees. If such a 
        director determines that an enrollee has committed a 
        violation of the standards of conduct, the director 
        shall dismiss the enrollee from the Job Corps if the 
        director determines that the retention of the enrollee 
        in the Job Corps will jeopardize the enforcement of 
        such standards or diminish the opportunities of other 
        enrollees.
            (2) Zero tolerance policy and drug testing.--
                    (A) Guidelines.--The Secretary shall adopt 
                guidelines establishing a zero tolerance policy 
                for an act of violence, for use, sale, or 
                possession of a controlled substance, for abuse 
                of alcohol, or for other illegal or disruptive 
                activity.
                    (B) Drug testing.--The Secretary shall 
                require drug testing of all enrollees for 
                controlled substances in accordance with 
                procedures prescribed by the Secretary under 
                section 145(a).
                    (C) Definitions.--In this paragraph:
                            (i) Controlled substance.--The term 
                        ``controlled substance'' has the 
                        meaning given the term in section 102 
                        of the Controlled Substances Act (21 
                        U.S.C. 802).
                            (ii) Zero tolerance policy.--The 
                        term ``zero tolerance policy'' means a 
                        policy under which an enrollee shall be 
                        automatically dismissed from the Job 
                        Corps after a determination by the 
                        director that the enrollee has carried 
                        out an action described in subparagraph 
                        (A).
    (c) Appeal.--A disciplinary measure taken by a director 
under this section shall be subject to expeditious appeal in 
accordance with procedures established by the Secretary.

SEC. 153. COMMUNITY PARTICIPATION.

    (a) Business and Community Liaison.--Each Job Corps center 
shall have a Business and Community Liaison (referred to in 
this Act as a ``Liaison''), designated by the director of the 
center.
    (b) Responsibilities.--The responsibilities of the Liaison 
shall include--
            (1) establishing and developing relationships and 
        networks with--
                    (A) local and distant employers; and
                    (B) applicable one-stop centers and 
                applicable local boards,
        for the purpose of providing job opportunities for Job 
        Corps graduates; and
            (2) establishing and developing relationships with 
        members of the community in which the Job Corps center 
        is located, informing members of the community about 
        the projects of the Job Corps center and changes in the 
        rules, procedures, or activities of the center that may 
        affect the community, and planning events of mutual 
        interest to the community and the Job Corps center.
    (c) New Centers.--The Liaison for a Job Corps center that 
is not yet operating shall establish and develop the 
relationships and networks described in subsection (b) at least 
3 months prior to the date on which the center accepts the 
first enrollee at the center.

SEC. 154. INDUSTRY COUNCILS.

    (a) In General.--Each Job Corps center shall have an 
industry council, appointed by the director of the center after 
consultation with the Liaison, in accordance with procedures 
established by the Secretary.
    (b) Industry Council Composition.--
            (1) In general.--An industry council shall be 
        comprised of--
                    (A) a majority of members who shall be 
                local and distant owners of business concerns, 
                chief executives or chief operating officers of 
                nongovernmental employers, or other private 
                sector employers, who--
                            (i) have substantial management, 
                        hiring, or policy responsibility; and
                            (ii) represent businesses with 
                        employment opportunities that reflect 
                        the employment opportunities of the 
                        applicable local area;
                    (B) representatives of labor organizations 
                (where present) and representatives of 
                employees; and
                    (C) enrollees and graduates of the Job 
                Corps.
            (2) Local board.--The industry council may include 
        members of the applicable local boards who meet the 
        requirements described in paragraph (1).
    (c) Responsibilities.--The responsibilities of the industry 
council shall be--
            (1) to work closely with all applicable local 
        boards in order to determine, and recommend to the 
        Secretary, appropriate vocational training for the 
        center;
            (2) to review all the relevant labor market 
        information to--
                    (A) determine the employment opportunities 
                in the local areas in which the enrollees 
                intend to seek employment after graduation;
                    (B) determine the skills and education that 
                are necessary to obtain the employment 
                opportunities; and
                    (C) recommend to the Secretary the type of 
                vocational training that should be implemented 
                at the center to enable the enrollees to obtain 
                the employment opportunities; and
            (3) to meet at least once every 6 months to 
        reevaluate the labor market information, and other 
        relevant information, to determine, and recommend to 
        the Secretary, any necessary changes in the vocational 
        training provided at the center.
    (d) New Centers.--The industry council for a Job Corps 
center that is not yet operating shall carry out the 
responsibilities described in subsection (c) at least 3 months 
prior to the date on which the center accepts the first 
enrollee at the center.

SEC. 155. ADVISORY COMMITTEES.

    The Secretary may establish and use advisory committees in 
connection with the operation of the Job Corps program, and the 
operation of Job Corps centers, whenever the Secretary 
determines that the availability of outside advice and counsel 
on a regular basis would be of substantial benefit in 
identifying and overcoming problems, in planning program or 
center development, or in strengthening relationships between 
the Job Corps and agencies, institutions, or groups engaged in 
related activities.

SEC. 156. EXPERIMENTAL, RESEARCH, AND DEMONSTRATION PROJECTS.

    The Secretary may carry out experimental, research, or 
demonstration projects relating to carrying out the Job Corps 
program and may waive any provisions of this subtitle that the 
Secretary finds would prevent the Secretary from carrying out 
the projects.

SEC. 157. APPLICATION OF PROVISIONS OF FEDERAL LAW.

    (a) Enrollees Not Considered To Be Federal Employees.--
            (1) In general.--Except as otherwise provided in 
        this subsection and in section 8143(a) of title 5, 
        United States Code, enrollees shall not be considered 
        to be Federal employees and shall not be subject to the 
        provisions of law relating to Federal employment, 
        including such provisions regarding hours of work, 
        rates of compensation, leave, unemployment 
        compensation, and Federal employee benefits.
            (2) Provisions relating to taxes and social 
        security benefits.--For purposes of the Internal 
        Revenue Code of 1986 and title II of the Social 
        Security Act (42 U.S.C. 401 et seq.), enrollees shall 
        be deemed to be employees of the United States and any 
        service performed by an individual as an enrollee shall 
        be deemed to be performed in the employ of the United 
        States.
            (3) Provisions relating to compensation to federal 
        employees for work injuries.--For purposes of 
        subchapter I of chapter 81 of title 5, United States 
        Code (relating to compensation to Federal employees for 
        work injuries), enrollees shall be deemed to be civil 
        employees of the Government of the United States within 
        the meaning of the term ``employee'' as defined in 
        section 8101 of title 5, United States Code, and the 
        provisions of such subchapter shall apply as specified 
        in section 8143(a) of title 5, United States Code.
            (4) Federal tort claims provisions.--For purposes 
        of the Federal tort claims provisions in title 28, 
        United States Code, enrollees shall be considered to be 
        employees of the Government.
    (b) Adjustments and Settlements.--Whenever the Secretary 
finds a claim for damages to a person or property resulting 
from the operation of the Job Corps to be a proper charge 
against the United States, and the claim is not cognizable 
under section 2672 of title 28, United States Code, the 
Secretary may adjust and settle the claim in an amount not 
exceeding $1,500.
    (c) Personnel of the Uniformed Services.--Personnel of the 
uniformed services who are detailed or assigned to duty in the 
performance of agreements made by the Secretary for the support 
of the Job Corps shall not be counted in computing strength 
under any law limiting the strength of such services or in 
computing the percentage authorized by law for any grade in 
such services.

SEC. 158. SPECIAL PROVISIONS.

    (a) Enrollment.--The Secretary shall ensure that women and 
men have an equal opportunity to participate in the Job Corps 
program, consistent with section 145.
    (b) Studies, Evaluations, Proposals, and Data.--The 
Secretary shall assure that all studies, evaluations, 
proposals, and data produced or developed with Federal funds in 
the course of carrying out the Job Corps program shall become 
the property of the United States.
    (c) Transfer of Property.--
            (1) In general.--Notwithstanding title II of the 
        Federal Property and Administrative Services Act of 
        1949 (40 U.S.C. 481 et seq.) and any other provision of 
        law, the Secretary and the Secretary of Education shall 
        receive priority by the Secretary of Defense for the 
        direct transfer, on a nonreimbursable basis, of the 
        property described in paragraph (2) for use in carrying 
        out programs under this Act or under any other Act.
            (2) Property.--The property described in this 
        paragraph is real and personal property under the 
        control of the Departmentof Defense that is not used by 
such Department, including property that the Secretary of Defense 
determines is in excess of current and projected requirements of such 
Department.
    (d) Gross Receipts.--Transactions conducted by a private 
for-profit or nonprofit entity that is an operator or service 
provider for a Job Corps center shall not be considered to be 
generating gross receipts. Such an operator or service provider 
shall not be liable, directly or indirectly, to any State or 
subdivision of a State (nor to any person acting on behalf of 
such a State or subdivision) for any gross receipts taxes, 
business privilege taxes measured by gross receipts, or any 
similar taxes imposed on, or measured by, gross receipts in 
connection with any payments made to or by such entity for 
operating or providing services to a Job Corps center. Such an 
operator or service provider shall not be liable to any State 
or subdivision of a State to collect or pay any sales, excise, 
use, or similar tax imposed on the sale to or use by such 
operator or service provider of any property, service, or other 
item in connection with the operation of or provision of 
services to a Job Corps center.
    (e) Management Fee.--The Secretary shall provide each 
operator and (in an appropriate case, as determined by the 
Secretary) service provider with an equitable and negotiated 
management fee of not less than 1 percent of the amount of the 
funding provided under the appropriate agreement specified in 
section 147.
    (f) Donations.--The Secretary may accept on behalf of the 
Job Corps or individual Job Corps centers charitable donations 
of cash or other assistance, including equipment and materials, 
if such donations are available for appropriate use for the 
purposes set forth in this subtitle.
    (g) Sale of Property.--Notwithstanding any other provision 
of law, if the Administrator of General Services sells a Job 
Corps center facility, the Administrator shall transfer the 
proceeds from the sale to the Secretary, who shall use the 
proceeds to carry out the Job Corps program.

SEC. 159. MANAGEMENT INFORMATION.

    (a) Financial Management Information System.--
            (1) In general.--The Secretary shall establish 
        procedures to ensure that each operator, and each 
        service provider, maintains a financial management 
        information system that will provide--
                    (A) accurate, complete, and current 
                disclosures of the costs of Job Corps 
                operations; and
                    (B) sufficient data for the effective 
                evaluation of activities carried out through 
                the Job Corps program.
            (2) Accounts.--Each operator and service provider 
        shall maintain funds received under this subtitle in 
        accounts in a manner that ensures timely and accurate 
        reporting as required by the Secretary.
            (3) Fiscal responsibility.--Operators shall remain 
        fiscally responsible and control costs, regardless of 
        whether the funds made available for Job Corps centers 
        are incrementally increased or decreased between fiscal 
        years.
    (b) Audit.--
            (1) Access.--The Secretary, the Inspector General 
        of the Department of Labor, the Comptroller General of 
        the United States, and any of their duly authorized 
        representatives, shall have access to any books, 
        documents, papers, and records of the operators and 
        service providers described in subsection (a) that are 
        pertinent to the Job Corps program, for purposes of 
        conducting surveys, audits, and evaluations of the 
        operators and service providers.
            (2) Surveys, audits, and evaluations.--The 
        Secretary shall survey, audit, or evaluate, or arrange 
        for the survey, audit, or evaluation of, the operators 
        and service providers, using Federal auditors or 
        independent public accountants. The Secretary shall 
        conduct such surveys, audits, or evaluations not less 
        often than once every 3 years.
    (c) Information on Indicators of Performance.--
            (1) Establishment.--The Secretary shall, with 
        continuity and consistency from year to year, establish 
        indicators of performance, and expected levels of 
        performance for Job Corps centers and the Job Corps 
        program, relating to--
                    (A) the number of graduates and the rate of 
                such graduation, analyzed by type of vocational 
                training received through the Job Corps program 
                and by whether the vocational training was 
                provided by a local or national service 
                provider;
                    (B) the number of graduates who entered 
                unsubsidized employment related to the 
                vocational training received through the Job 
                Corps program and the number who entered 
                unsubsidized employment not related to the 
                vocational training received, analyzed by 
                whether the vocational training was provided by 
                a local or national service provider and by 
                whether the placement in the employment was 
                conducted by a local or national service 
                provider;
                    (C) the average wage received by graduates 
                who entered unsubsidized employment related to 
                the vocational training received through the 
                Job Corps program and the average wage received 
                by graduates who entered unsubsidized 
                employment unrelated to the vocational training 
                received;
                    (D) the average wage received by graduates 
                placed in unsubsidized employment after 
                completion of the Job Corps program--
                            (i) on the first day of the 
                        employment;
                            (ii) 6 months after the first day 
                        of the employment; and
                            (iii) 12 months after the first day 
                        of the employment,
                analyzed by type of vocational training 
                received through the Job Corps program;
                    (E) the number of graduates who entered 
                unsubsidized employment and were retained in 
                the unsubsidized employment--
                            (i) 6 months after the first day of 
                        the employment; and
                            (ii) 12 months after the first day 
                        of the employment;
                    (F) the number of graduates who entered 
                unsubsidized employment--
                            (i) for 32 hours per week or more;
                            (ii) for not less than 20 but less 
                        than 32 hours per week; and
                            (iii) for less than 20 hours per 
                        week;
                    (G) the number of graduates who entered 
                postsecondary education or advanced training 
                programs, including apprenticeship programs, as 
                appropriate; and
                    (H) the number of graduates who attained 
                job readiness and employment skills.
            (2) Performance of recruiters.--The Secretary shall 
        also establish performance measures, and expected 
        performance levels on the performance measures, for 
        local and national recruitment service providers 
        serving the Job Corps program. The performance measures 
        shall relate to the number of enrollees retained in the 
        Job Corps program for 30 days and for 60 days after 
        initial placement in the program.
            (3) Report.--The Secretary shall collect, and 
        annually submit a report to the appropriate committees 
        of Congress containing, information on the performance 
        of each Job Corps center, and the Job Corps program, on 
        the core performance measures, as compared to the 
        expected performance level for each performance 
        measure. The report shall also contain information on 
        the performance of the service providers described in 
        paragraph (2) on the performance measures established 
        under such paragraph, as compared to the expected 
        performance levels for the performance measures.
    (d) Additional Information.--The Secretary shall also 
collect, and submit in the report described in subsection (c), 
information on the performance of each Job Corps center, and 
the Job Corps program, regarding--
            (1) the number of enrollees served;
            (2) the average level of learning gains for 
        graduates and former enrollees;
            (3) the number of former enrollees and graduates 
        who entered the Armed Forces;
            (4) the number of former enrollees who entered 
        postsecondary education;
            (5) the number of former enrollees who entered 
        unsubsidized employment related to the vocational 
        training received through the Job Corps program and the 
        number who entered unsubsidized employment not related 
        to the vocational training received;
            (6) the number of former enrollees and graduates 
        who obtained a secondary school diploma or its 
        recognized equivalent;
            (7) the number and percentage of dropouts from the 
        Job Corps program including the number dismissed under 
        the zero tolerance policy described in section 152(b); 
        and
            (8) any additional information required by the 
        Secretary.
    (e) Methods.--The Secretary may collect the information 
described in subsections (c) and (d) using methods described in 
section 136(f)(2) consistent with State law.
    (f) Performance Assessments and Improvements.--
            (1) Assessments.--The Secretary shall conduct an 
        annual assessment of the performance of each Job Corps 
        center. Based on the assessment, the Secretary shall 
        take measures to continuously improve the performance 
        of the Job Corps program.
            (2) Performance improvement plans.--With respect to 
        a Job Corps center that fails to meet the expected 
        levels of performance relating to the core performance 
        measures specified in subsection (c), the Secretary 
        shall develop and implement a performance improvement 
        plan. Such a plan shall require action including--
                    (A) providing technical assistance to the 
                center;
                    (B) changing the vocational training 
                offered at the center;
                    (C) changing the management staff of the 
                center;
                    (D) replacing the operator of the center;
                    (E) reducing the capacity of the center;
                    (F) relocating the center; or
                    (G) closing the center.
            (3) Additional performance improvement plans.--In 
        addition to the performance improvement plans required 
        under paragraph (2), the Secretary may develop and 
        implement additional performance improvement plans. 
        Such a plan shall require improvements, including the 
        actions described in paragraph (2), for a Job Corps 
        center that fails to meet criteria established by the 
        Secretary other than the expected levels of performance 
        described in paragraph (2).
    (g) Closure of Job Corps Center.--Prior to the closure of 
any Job Corps center, the Secretary shall ensure--
            (1) that the proposed decision to close the center 
        is announced in advance to the general public through 
        publication in the Federal Register or other 
        appropriate means;
            (2) the establishment of a reasonable comment 
        period, not to exceed 30 days, for interested 
        individuals to submit written comments to the 
        Secretary; and
            (3) that the Member of Congress who represents the 
        district in which such center is located is notified 
        within a reasonable period of time in advance of any 
        final decision to close the center.

SEC. 160. GENERAL PROVISIONS.

    The Secretary is authorized to--
            (1) disseminate, with regard to the provisions of 
        section 3204 of title 39, United States Code, data and 
        information in such forms as the Secretary shall 
        determine to be appropriate, to public agencies, 
        private organizations, and the general public;
            (2) subject to section 157(b), collect or 
        compromise all obligations to or held by the Secretary 
        and exercise all legal or equitable rights accruing to 
        the Secretary in connection with the payment of 
        obligations until such time as such obligations may be 
        referred to the Attorney General for suit or 
        collection; and
            (3) expend funds made available for purposes of 
        this subtitle--
                    (A) for printing and binding, in accordance 
                with applicable law (including regulation); and
                    (B) without regard to any other law 
                (including regulation), for rent of buildings 
                and space in buildings and for repair, 
                alteration, and improvement of buildings and 
                space in buildings rented by the Secretary, 
                except that the Secretary shall not expend 
                funds under the authority of this 
                subparagraph--
                            (i) except when necessary to obtain 
                        an item, service, or facility, that is 
                        required in the proper administration 
                        of this subtitle, and that otherwise 
                        could not be obtained, or could not be 
                        obtained in the quantity or quality 
                        needed, or at the time, in the form, or 
                        under the conditions in which the item, 
                        service, or facility is needed; and
                            (ii) prior to having given written 
                        notification to the Administrator of 
                        General Services (if the expenditure 
                        would affect an activity that otherwise 
                        would be under the jurisdiction of the 
                        General Services Administration) of the 
                        intention of the Secretary to make the 
                        expenditure, and the reasons and 
                        justifications for the expenditure.

SEC. 161. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
subtitle such sums as may be necessary for each of the fiscal 
years 1999 through 2003.

                     Subtitle D--National Programs

SEC. 166. NATIVE AMERICAN PROGRAMS.

    (a) Purpose.--
            (1) In general.--The purpose of this section is to 
        support employment and training activities for Indian, 
        Alaska Native, and Native Hawaiian individuals in 
        order--
                    (A) to develop more fully the academic, 
                occupational, and literacy skills of such 
                individuals;
                    (B) to make such individuals more 
                competitive in the workforce; and
                    (C) to promote the economic and social 
                development of Indian, Alaska Native, and 
                Native Hawaiian communities in accordance with 
                the goals and values of such communities.
            (2)  Indian policy.--All programs assisted under 
        this section shall be administered in a manner 
        consistent with the principles of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450 et seq.) and the government-to-government 
        relationship between the Federal Government and Indian 
        tribal governments.
    (b) Definitions.--As used in this section:
            (1) Alaska native.--The term ``Alaska Native'' 
        means a Native as such term is defined in section 3(b) 
        of the Alaska Native Claims Settlement Act (43 U.S.C. 
        1602(b)).
            (2) Indian, indian tribe, and tribal 
        organization.--The terms ``Indian'', ``Indian tribe'', 
        and ``tribal organization'' have the meanings given 
        such terms in subsections (d), (e), and (l), 
        respectively, of section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
            (3) Native hawaiian and native hawaiian 
        organization.--The terms ``Native Hawaiian'' and 
        ``Native Hawaiian organization'' have the meanings 
        given such terms in paragraphs (1) and (3), 
        respectively, of section 9212 of the Native Hawaiian 
        Education Act (20 U.S.C. 7912).
    (c) Program Authorized.--
            (1) In general.--The Secretary shall, on a 
        competitive basis, make grants to, or enter into 
        contracts or cooperative agreements with, Indian 
        tribes, tribal organizations, Alaska Native entities, 
        Indian-controlled organizations serving Indians, or 
        Native Hawaiian organizations to carry out the 
        authorized activities described in subsection (d).
            (2) Exception.--The competition for grants, 
        contracts, or cooperative agreements conducted under 
        paragraph (1) shall be conducted every 2 years, except 
        that if a recipient of such a grant, contract, or 
        agreement has performed satisfactorily, the Secretary 
        may waive the requirements for such competition on 
        receipt from the recipient of a satisfactory 2-year 
        program plan for the succeeding 2-year period of the 
        grant, contract, or agreement.
    (d) Authorized Activities.--
            (1) In general.--Funds made available under 
        subsection (c) shall be used to carry out the 
        activities described in paragraph (2) that--
                    (A) are consistent with this section; and
                    (B) are necessary to meet the needs of 
                Indians or Native Hawaiians preparing to enter, 
                reenter, or retain unsubsidized employment.
            (2) Workforce investment activities and 
        supplemental services.--
                    (A) In general.--Funds made available under 
                subsection (c) shall be used for--
                            (i) comprehensive workforce 
                        investment activities for Indians or 
                        Native Hawaiians; or
                            (ii) supplemental services for 
                        Indian or Native Hawaiian youth on or 
                        near Indian reservations and in 
                        Oklahoma, Alaska, or Hawaii.
                    (B) Special rule.--Notwithstanding any 
                other provision of this section, individuals 
                who were eligible to participate in programs 
                under section 401 of the Job Training 
                Partnership Act (29 U.S.C. 1671) (as such 
                section was in effect on the day before the 
                date of enactment of this Act) shall be 
                eligible to participate in an activity assisted 
                under this section.
    (e) Program Plan.--In order to receive a grant or enter 
into a contract or cooperative agreement under this section an 
entity described in subsection (c) shall submit to the 
Secretary a program plan that describes a 2-year strategy for 
meeting the needs of Indian, Alaska Native, or Native Hawaiian 
individuals, as appropriate, in the area served by such entity. 
Such plan shall--
            (1) be consistent with the purpose of this section;
            (2) identify the population to be served;
            (3) identify the education and employment needs of 
        the population to be served and the manner in which the 
        activities to be provided will strengthen the ability 
        of the individuals served to obtain or retain 
        unsubsidized employment;
            (4) describe the activities to be provided and the 
        manner in which such activities are to be integrated 
        with other appropriate activities; and
            (5) describe, after the entity submitting the plan 
        consults with the Secretary, the performance measures 
        to be used to assess the performance of entities in 
        carrying out the activities assisted under this 
        section.
    (f) Consolidation of Funds.--Each entity receiving 
assistance under subsection (c) may consolidate such assistance 
with assistance received from related programs in accordance 
with the provisions of the Indian Employment, Training and 
Related Services Demonstration Act of 1992 (25 U.S.C. 3401 et 
seq.).
    (g) Nonduplicative and Nonexclusive Services.--Nothing in 
this section shall be construed--
            (1) to limit the eligibility of any entity 
        described in subsection (c) to participate in any 
        activity offered by a State or local entity under this 
        Act; or
            (2) to preclude or discourage any agreement, 
        between any entity described in subsection (c) and any 
        State or local entity, to facilitate the provision of 
        services by such entity or to the population served by 
        such entity.
    (h) Administrative Provisions.--
            (1) Organizational unit established.--The Secretary 
        shall designate a single organizational unit within the 
        Department of Labor that shall have primary 
        responsibility for the administration of the activities 
        authorized under this section.
            (2) Regulations.--The Secretary shall consult with 
        the entities described in subsection (c) in--
                    (A) establishing regulations to carry out 
                this section, including performance measures 
                for entities receiving assistance under such 
                subsection, taking into account the economic 
                circumstances of such entities; and
                    (B) developing a funding distribution plan 
                that takes into consideration previous levels 
                of funding (prior to the date of enactment of 
                this Act) to such entities.
            (3) Waivers.--
                    (A) In general.--With respect to an entity 
                described in subsection (c), the Secretary, 
                notwithstanding any other provision of law, 
                may, pursuant to a request submitted by such 
                entity that meets the requirements established 
                under paragraph (2), waive any of the statutory 
                or regulatory requirements of this title that 
                are inconsistent with the specific needs of the 
                entities described in such subsection, except 
                that the Secretary may not waive requirements 
                relating to wage and labor standards, worker 
                rights, participation and protection of workers 
                and participants, grievance procedures, and 
                judicial review.
                    (B) Request and approval.--An entity 
                described in subsection (c) that requests a 
                waiver under subparagraph (A) shall submit a 
                plan to the Secretary to improve the program of 
                workforce investment activities carried out by 
                the entity, which plan shall meet the 
                requirements established by the Secretary and 
                shall be generally consistent with the 
                requirements of section 189(i)(4)(B).
            (4) Advisory council.--
                    (A) In general.--Using funds made available 
                to carry out this section, the Secretary shall 
                establish a Native American Employment and 
                Training Council to facilitate the consultation 
                described in paragraph (2).
                    (B) Composition.--The Council shall be 
                composed of individuals, appointed by the 
                Secretary, who are representatives of the 
                entities described in subsection (c).
                    (C) Duties.--The Council shall advise the 
                Secretary on all aspects of the operation and 
                administration of the programs assisted under 
                this section, including the selection of the 
                individual appointed as the head of the unit 
                established under paragraph (1).
                    (D) Personnel matters.--
                            (i) Compensation of members.--
                        Members of the Council shall serve 
                        without compensation.
                            (ii) Travel expenses.--The members 
                        of the Council shall be allowed travel 
                        expenses, including per diem in lieu of 
                        subsistence, at rates authorized for 
                        employees of agencies under subchapter 
                        I of chapter 57 of title 5, United 
                        States Code, while away from their 
                        homes or regular places of business in 
                        the performance of services for the 
                        Council.
                            (iii) Administrative support.--The 
                        Secretary shall provide the Council 
                        with such administrative support as may 
                        be necessary to perform the functions 
                        of the Council.
                    (E) Chairperson.--The Council shall select 
                a chairperson from among its members.
                    (F) Meetings.--The Council shall meet not 
                less than twice each year.
                    (G) Application.--Section 14 of the Federal 
                Advisory Committee Act (5 U.S.C. App.) shall 
                not apply to the Council.
            (5) Technical assistance.--The Secretary, acting 
        through the unit established under paragraph (1), is 
        authorized to provide technical assistance to entities 
        described in subsection (c) that receive assistance 
        under subsection (c) to enable such entities to improve 
        the activities authorized under this section that are 
        provided by such entities.
            (6) Agreement for certain federally-recognized 
        indian tribes to transfer funds to the program.--A 
        federally-recognized Indian tribe that administers 
        funds provided under this section and funds provided by 
        more than 1 State under other sections of this title 
        may enter into an agreement with the Secretary and the 
        Governors of the affected States to transfer the funds 
        provided by the States to the program administered by 
        the tribe under this section.
    (i) Compliance With Single Audit Requirements; Related 
Requirement.--Grants, contracts, and cooperative agreements 
entered into under this section shall be subject to the 
requirements of chapter 75 of subtitle V of title 31, United 
States Code (enacted by the Single Audit Act of 1984) and 
charging of costs under this section shall be subject to 
appropriate circulars issued by the Office of Management and 
Budget.
    (j) Assistance to American Samoans in Hawaii.--
            (1) In general.--Notwithstanding any other 
        provision of law, the Secretary is authorized to 
        provide assistance to American Samoans who reside in 
        Hawaii for the co-location of federally-funded and 
        State-funded workforce investment activities.
            (2) Authorization of appropriations.--There are 
        authorized to be appropriated for fiscal year 1999 such 
        sums as may be necessary to carry out this subsection.

SEC. 167. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

    (a) In General.--Every 2 years, the Secretary shall, on a 
competitive basis, make grants to, or enter into contracts 
with, eligible entities to carry out the activities described 
in subsection (d).
    (b) Eligible Entities.--To be eligible to receive a grant 
or enter into a contract under this section, an entity shall 
have an understanding of the problems of eligible migrant and 
seasonal farmworkers (including dependents), a familiarity with 
the area to be served, and the ability to demonstrate a 
capacity to administer effectively a diversified program of 
workforce investment activities (including youth activities) 
and related assistance for eligible migrant and seasonal 
farmworkers.
    (c) Program Plan.--
            (1) In general.--To be eligible to receive a grant 
        or enter into a contract under this section, an entity 
        described in subsection (b) shall submit to the 
        Secretary a plan that describes a 2-year strategy for 
        meeting the needs of eligible migrant and seasonal 
        farmworkers in the area to be served by such entity.
            (2) Contents.--Such plan shall--
                    (A) identify the education and employment 
                needs of the population to be served and the 
                manner in which the services to be provided 
                will strengthen the ability of the eligible 
                migrant and seasonal farmworkers and dependents 
                to obtain or retain unsubsidized employment or 
                stabilize their unsubsidized employment;
                    (B) describe the related assistance and 
                supportive services to be provided and the 
                manner in which such assistance and services 
                are to be integrated and coordinated with other 
                appropriate services; and
                    (C) describe the indicators of performance 
                to be used to assess the performance of such 
                entity in carrying out the activities assisted 
                under this section.
            (3) Administration.--Grants and contracts awarded 
        under this section shall be centrally administered by 
        the Department of Labor and competitively awarded by 
        the Secretary using procedures consistent with standard 
        Federal Government competitive procurement policies.
            (4) Competition.--
                    (A) In general.--The competition for grants 
                made and contracts entered into under this 
                section shall be conducted every 2 years.
                    (B) Exception.--Notwithstanding 
                subparagraph (A), if a recipient of such a 
                grant or contract has performed satisfactorily 
                under the terms of the grant agreement or 
                contract, the Secretary may waive the 
                requirement for such competition for such 
                recipient upon receipt from the recipient of a 
                satisfactory 2-year plan described in paragraph 
                (1) for the succeeding 2-year grant or contract 
                period. The Secretary may exercise the waiver 
                authority of the preceding sentence not more 
                than once during any 4-year period with respect 
                any single recipient.
    (d) Authorized Activities.--Funds made available under this 
section shall be used to carry out workforce investment 
activities (including youth activities) and provide related 
assistance for eligible migrant and seasonal farmworkers, which 
may include employment, training, educational assistance, 
literacy assistance, an English language program, worker safety 
training, housing, supportive services, dropout prevention 
activities, follow-up services for those individuals placed in 
employment, self-employment and related business enterprise 
development education as needed by eligible migrant and 
seasonal farmworkers and identified pursuant to the plan 
required by subsection (c), and technical assistance relating 
to capacity enhancement in such areas as management information 
technology.
    (e) Consultation With Governors and Local Boards.--In 
making grants and entering into contracts under this section, 
the Secretary shall consult with the Governors and local boards 
of the States in which the eligible entities will carry out the 
activities described in subsection (d).
    (f) Regulations.--The Secretary shall consult with eligible 
migrant and seasonal farmworkers groups and States in 
establishing regulations to carry out this section, including 
performance measures for eligible entities that take into 
account the economic circumstances and demographics of eligible 
migrant and seasonal farmworkers.
    (g) Compliance With Single Audit Requirements; Related 
Requirement.--Grants and contracts entered into under this 
section shall be subject to the requirements of chapter 75 of 
subtitle V of title 31, United States Code (enacted by the 
Single Audit Act of 1984) and charging of costs under this 
section shall be subject to appropriate circulars issued by the 
Office of Management and Budget.
    (h) Definitions.--In this section:
            (1) Disadvantaged.--The term ``disadvantaged'', 
        used with respect to a farmworker, means a farmworker 
        whose income, for 12 consecutive months out of the 24 
        months prior to application for the program involved, 
        does not exceed the higher of--
                    (A) the poverty line (as defined in section 
                334(a)(2)(B)) for an equivalent period; or
                    (B) 70 percent of the lower living standard 
                income level, for an equivalent period.
            (2) Eligible migrant and seasonal farmworkers.--The 
        term ``eligible migrant and seasonal farmworkers'' 
        means individuals who are eligible migrant farmworkers 
        or are eligible seasonal farmworkers.
            (3) Eligible migrant farmworker.--The term 
        ``eligible migrant farmworker'' means--
                    (A) an eligible seasonal farmworker 
                described in paragraph (4)(A) whose 
                agricultural labor requires travel to a job 
                site such that the farmworker is unable to 
                return to a permanent place of residence within 
                the same day; and
                    (B) a dependent of the farmworker described 
                in subparagraph (A).
            (4) Eligible seasonal farmworker.--The term 
        ``eligible seasonal farmworker'' means--
                    (A) a disadvantaged person who, for 12 
                consecutive months out of the 24 months prior 
                to application for the program involved, has 
                been primarily employed in agricultural labor 
                that is characterized by chronic unemployment 
                or underemployment; and
                    (B) a dependent of the person described in 
                subparagraph (A).

SEC. 168. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

    (a) Authorization.--
            (1) In general.--The Secretary shall conduct, 
        directly or through grants or contracts, programs to 
        meet the needs for workforce investment activities of 
        veterans with service-connected disabilities, veterans 
        who have significant barriers to employment, veterans 
        who served on active duty in the armed forces during a 
        war or in a campaign or expedition for which a campaign 
        badge has been authorized, and recently separated 
        veterans.
            (2) Conduct of programs.--Programs supported under 
        this section may be conducted through grants and 
        contracts with public agencies and private nonprofit 
        organizations, including recipients of Federal 
        assistance under other provisions of this title, that 
        the Secretary determines have an understanding of the 
        unemployment problems of veterans described in 
        paragraph (1), familiarity with the area to be served, 
        and the capability to administer effectively a program 
        of workforce investment activities for such veterans.
            (3) Required activities.--Programs supported under 
        this section shall include--
                    (A) activities to enhance services provided 
                to veterans by other providers of workforce 
                investment activities funded by Federal, State, 
                or local government;
                    (B) activities to provide workforce 
                investment activities to such veterans that are 
                not adequately provided by other public 
                providers of workforce investment activities; 
                and
                    (C) outreach and public information 
                activities to develop and promote maximum job 
                and job training opportunities for such 
                veterans and to inform such veterans about 
                employment, job training, on-the-job training 
                and educational opportunities under this title, 
                under title 38, United States Code, and under 
                other provisions of law, which activities shall 
                be coordinated with activities provided through 
                the one-stop centers described in section 
                134(c).
    (b) Administration of Programs.--
            (1) In general.--The Secretary shall administer 
        programs supported under this section through the 
        Assistant Secretary for Veterans' Employment and 
        Training.
            (2) Additional responsibilities.--In carrying out 
        responsibilities under this section, the Assistant 
        Secretary for Veterans' Employment and Training shall--
                    (A) be responsible for the awarding of 
                grants and contracts and the distribution of 
                funds under this section and for the 
                establishment of appropriate fiscal controls, 
                accountability, and program performance 
                measures for recipients of grants and contracts 
                under this section; and
                    (B) consult with the Secretary of Veterans 
                Affairs and take steps to ensure that programs 
                supported under this section are coordinated, 
                to the maximum extent feasible, with related 
                programs and activities conducted under title 
                38, United States Code, including programs and 
                activities conducted under subchapter II of 
                chapter 77 of such title, chapters 30, 31, 32, 
                and 34 of such title, and sections 1712A, 
                1720A, 3687, and 4103A of such title.

SEC. 169. YOUTH OPPORTUNITY GRANTS.

    (a) Grants.--
            (1) In general.--Using funds made available under 
        section 127(b)(1)(A), the Secretary shall make grants 
        to eligible local boards and eligible entities 
        described in subsection (d) to provide activities 
        described in subsection (b) for youth to increase the 
        long-term employment of youth who live in empowerment 
        zones, enterprise communities, and high poverty areas 
        and who seek assistance.
            (2) Definition.--In this section, the term 
        ``youth'' means an individual who is not less than age 
        14 and not more than age 21.
            (3) Grant period.--The Secretary may make a grant 
        under this section for a 1-year period, and may renew 
        the grant for each of the 4 succeeding years.
            (4) Grant awards.--In making grants under this 
        section, the Secretary shall ensure that grants are 
        distributed equitably among local boards and entities 
        serving urban areas and local boards and entities 
        serving rural areas, taking into consideration the 
        poverty rate in such urban and rural areas, as 
        described in subsection (c)(3)(B).
    (b) Use of Funds.--
            (1) In general.--A local board or entity that 
        receives a grant under this section shall use the funds 
        made available through the grant to provide activities 
        that meet the requirements of section 129, except as 
        provided in paragraph (2), as well as youth development 
        activities such as activities relating to leadership 
        development, citizenship, and community service, and 
        recreation activities.
            (2) Intensive placement and followup services.--In 
        providing activities under this section, a local board 
        or entity shall provide--
                    (A) intensive placement services; and
                    (B) followup services for not less than 24 
                months after the completion of participation in 
                the other activities described in this 
                subsection, as appropriate.
    (c) Eligible Local Boards.--To be eligible to receive a 
grant under this section, a local board shall serve a community 
that--
            (1) has been designated as an empowerment zone or 
        enterprise community under section 1391 of the Internal 
        Revenue Code of 1986;
            (2)(A) is a State without a zone or community 
        described in paragraph (1); and
            (B) has been designated as a high poverty area by 
        the Governor of the State; or
            (3) is 1 of 2 areas in a State that--
                    (A) have been designated by the Governor as 
                areas for which a local board may apply for a 
                grant under this section; and
                    (B) meet the poverty rate criteria set 
                forth in subsections (a)(4), (b), and (d) of 
                section 1392 of the Internal Revenue Code of 
                1986.
    (d) Eligible Entities.--To be eligible to receive a grant 
under this section, an entity (other than a local board) 
shall--
            (1) be a recipient of financial assistance under 
        section 166; and
            (2) serve a community that--
                    (A) meets the poverty rate criteria set 
                forth in subsections (a)(4), (b), and (d) of 
                section 1392 of the Internal Revenue Code of 
                1986; and
                    (B) is located on an Indian reservation or 
                serves Oklahoma Indians or Alaska Native 
                villages or Native groups (as such terms are 
                defined in section 3 of the Alaska Native 
                Claims Settlement Act (43 U.S.C. 1602)).
    (e) Application.--To be eligible to receive a grant under 
this section, a local board or entity shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require, 
including--
            (1) a description of the activities that the local 
        board or entity will provide under this section to 
        youth in the community described in subsection (c);
            (2) a description of the performance measures 
        negotiated under subsection (f), and the manner in 
        which the local boards or entities will carry out the 
        activities to meet the performance measures;
            (3) a description of the manner in which the 
        activities will be linked to activities described in 
        section 129; and
            (4) a description of the community support, 
        including financial support through leveraging 
        additional public and private resources, for the 
        activities.
    (f) Performance Measures.--
            (1) In general.--The Secretary shall negotiate and 
        reach agreement with the local board or entity on 
        performance measures for the indicators of performance 
        referred to in subparagraphs (A) and (B) of section 
        136(b)(2) that will be used to evaluate the performance 
        of the local board or entity in carrying out the 
        activities described in subsection (b). Each local 
        performance measure shall consist of such a indicator 
        of performance, and a performance level referred to in 
        paragraph (2).
            (2) Performance levels.--The Secretary shall 
        negotiate and reach agreement with the local board or 
        entity regarding the levels of performance expected to 
        be achieved by the local board or entity on the 
        indicators of performance.
    (g) Role Model Academy Project.--
            (1) In general.--Using the funds made available 
        pursuant to section 127(b)(1)(A)(iv) for fiscal year 
        1999, the Secretary shall provide assistance to an 
        entity to carry out a project establishing a role model 
        academy for out-of-school youth.
            (2) Residential center.--The entity shall use the 
        assistance to establish an academy that consists of a 
        residential center located on the site of a military 
        installation closed or realigned pursuant to a law 
        providing for closures and realignments of such 
        installations.
            (3) Services.--The academy established pursuant to 
        this subsection shall provide services that--
                    (A) utilize a military style model that 
                emphasizes leadership skills and discipline, or 
                another model of demonstrated effectiveness; 
                and
                    (B) include vocational training, secondary 
                school course work leading to a secondary 
                school diploma or recognized equivalent, and 
                the use of mentors who serve as role models and 
                who provide academic training and career 
                counseling to the youth.

SEC. 170. TECHNICAL ASSISTANCE.

    (a) General Technical Assistance.--
            (1) In general.--The Secretary shall provide, 
        coordinate, and support the development of, appropriate 
        training, technical assistance, staff development, and 
        other activities, including assistance in replicating 
        programs of demonstrated effectiveness, to States and 
        localities, and, in particular, to assist States in 
        making transitions from carrying out activities under 
        the provisions of law repealed under section 199 to 
        carrying out activities under this title.
            (2) Form of assistance.--In carrying out paragraph 
        (1) on behalf of a State, or recipient of financial 
        assistance under any of sections 166 through 169, the 
        Secretary, after consultation with the State or grant 
        recipient, may award grants and enter into contracts 
        and cooperative agreements.
            (3) Limitation.--Grants or contracts awarded under 
        paragraph (1) to entities other than States or local 
        units of government that are for amounts in excess of 
        $100,000 shall only be awarded on a competitive basis.
    (b) Dislocated Worker Technical Assistance.--
            (1) Authority.--Of the amounts available pursuant 
        to section 132(a)(2), the Secretary shall reserve not 
        more than 5 percent of such amounts to provide 
        technical assistance to States that do not meet the 
        State performance measures described in section 136 
        with respect to employment and training activities for 
        dislocated workers. Using such reserved funds, the 
        Secretary may provide such assistance to other States, 
        local areas, and other entities involved in providing 
        assistance to dislocated workers, to promote the 
        continuous improvement of assistance provided to 
        dislocated workers, under this title.
            (2) Training.--Amounts reserved under this 
        subsection may be used to provide for the training of 
        staff, including specialists, who provide rapid 
        response services. Such training shall include 
        instruction in proven methods of promoting, 
        establishing, and assisting labor-management 
        committees. Such projects shall be administered through 
        the dislocated worker office described in section 
        174(b).

SEC. 171. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND MULTISTATE 
                    PROJECTS.

    (a) Strategic Plan.--
            (1) In general.--After consultation with States, 
        localities, and other interested parties, the Secretary 
        shall, every 2 years, publish in the Federal Register, 
        a plan that describes the demonstration and pilot 
        (including dislocated worker demonstration and pilot), 
        multiservice, research, and multistate project 
        priorities of the Department of Labor concerning 
        employment and training for the 5-year period following 
        the submission of the plan. Copies of the plan shall be 
        transmitted to the appropriate committees of Congress.
            (2) Factors.--The plan published under paragraph 
        (1) shall contain strategies to address national 
        employment and training problems and take into account 
        factors such as--
                    (A) the availability of existing research 
                (as of the date of the publication);
                    (B) the need to ensure results that have 
                interstate validity;
                    (C) the benefits of economies of scale and 
                the efficiency of proposed projects; and
                    (D) the likelihood that the results of the 
                projects will be useful to policymakers and 
                stakeholders in addressing employment and 
                training problems.
    (b) Demonstration and Pilot Projects.--
            (1) In general.--Under a plan published under 
        subsection (a), the Secretary shall, through grants or 
        contracts, carry out demonstration and pilot projects 
        for the purpose of developing and implementing 
        techniques and approaches, and demonstrating the 
        effectiveness of specialized methods, in addressing 
        employment and training needs. Such projects shall 
        include the provision of direct services to individuals 
        to enhance employment opportunities and an evaluation 
        component and may include--
                    (A) the establishment of advanced 
                manufacturing technology skill centers 
                developed through local partnerships of 
                industry, labor, education, community-based 
                organizations, and economic development 
                organizations to meet unmet, high-tech skill 
                needs of local communities;
                    (B) projects that provide training to 
                upgrade the skills of employed workers who 
                reside and are employed in enterprise 
                communities or empowerment zones;
                    (C) programs conducted jointly with the 
                Department of Defense to develop training 
                programs utilizing computer-based and other 
                innovative learning technologies;
                    (D) projects that promote the use of 
                distance learning, enabling students to take 
                courses through the use of media technology 
                such as videos, teleconferencing computers, and 
                the Internet;
                    (E) projects that assist in providing 
                comprehensive services to increase the 
                employment rates of out-of-school youth 
                residing in targeted high poverty areas within 
                empowerment zones and enterprise communities;
                    (F) the establishment of partnerships with 
                national organizations with special expertise 
                in developing, organizing, and administering 
                employment and training services, for 
                individuals with disabilities, at the national, 
                State, and local levels;
                    (G) projects to assist public housing 
                authorities that provide, to public housing 
                residents, job training programs that 
                demonstrate success in upgrading the job skills 
                and promoting employment of the residents; and
                    (H) projects that assist local areas to 
                develop and implement local self-sufficiency 
                standards to evaluate the degree to which 
                participants in programs under this title are 
                achieving self-sufficiency.
            (2) Limitations.--
                    (A) Competitive awards.--Grants or 
                contracts awarded for carrying out 
                demonstration and pilot projects under this 
                subsection shall be awarded only on a 
                competitive basis, except that a noncompetitive 
                award may be made in the case of a project that 
                is funded jointly with other public or private 
                sector entities that provide a portion of the 
                funding for the project.
                    (B) Eligible entities.--Grants or contracts 
                may be awarded under this subsection only to--
                            (i) entities with recognized 
                        expertise in--
                                    (I) conducting national 
                                demonstration projects;
                                    (II) utilizing state-of-
                                the-art demonstration methods; 
                                or
                                    (III) conducting 
                                evaluations of workforce 
                                investment projects; or
                            (ii) State and local entities with 
                        expertise in operating or overseeing 
                        workforce investment programs.
                    (C) Time limits.--The Secretary shall 
                establish appropriate time limits for carrying 
                out demonstration and pilot projects under this 
                subsection.
    (c) Multiservice Projects, Research Projects, and 
Multistate Projects.--
            (1) Multiservice projects.--Under a plan published 
        under subsection (a), the Secretary shall, through 
        grants or contracts, carry out multiservice projects--
                    (A) that will test an array of approaches 
                to the provision of employment and training 
                services to a variety of targeted populations;
                    (B) in which the entity carrying out the 
                project, in conjunction with employers, 
                organized labor, and other groups such as the 
                disability community, will design, develop, and 
                test various training approaches in order to 
                determine effective practices; and
                    (C) that will assist in the development and 
                replication of effective service delivery 
                strategies for targeted populations for the 
                national employment and training system as a 
                whole.
            (2) Research projects.--
                    (A) In general.--Under a plan published 
                under subsection (a), the Secretary shall, 
                through grants or contracts, carry out research 
                projects that will contribute to the solution 
                of employment and training problems in the 
                United States.
                    (B) Formula improvement study and report.--
                            (i) Study.--The Secretary shall 
                        conduct a 2-year study concerning 
                        improvements in the formulas described 
                        in section 132(b)(1)(B) and paragraphs 
                        (2)(A) and (3) of section 133(b) 
                        (regarding distributing funds under 
                        subtitle B to States and local areas 
                        for adult employment and training 
                        activities). In conducting the study, 
                        the Secretary shall examine means of 
                        improving the formulas by--
                                    (I) developing formulas 
                                based on statistically reliable 
                                data;
                                    (II) developing formulas 
                                that are consistent with the 
                                goals and objectives of this 
                                title; and
                                    (III) developing formulas 
                                based on organizational and 
                                financial stability of State 
                                boards and local boards.
                            (ii) Report.--The Secretary shall 
                        prepare and submit to Congress a report 
                        containing the results of the study, 
                        including recommendations for improved 
                        formulas.
            (3) Multistate projects.--
                    (A) In general.--
                            (i) Authority.--Under a plan 
                        published under subsection (a), the 
                        Secretary may, through grants or 
                        contracts, carry out multistate 
                        projects that require demonstrated 
                        expertise that is available at the 
                        national level to effectively 
                        disseminate best practices and models 
                        for implementing employment and 
                        training services, address the 
                        specialized employment and training 
                        needs of particular service 
                        populations, or address industry-wide 
                        skill shortages.
                            (ii) Design of grants.--Grants or 
                        contracts awarded under this subsection 
                        shall be designed to obtain information 
                        relating to the provision of services 
                        under different economic conditions or 
                        to various demographic groups in order 
                        to provide guidance at the national and 
                        State levels about how best to 
                        administer specific employment and 
                        training services.
            (4) Limitations.--
                    (A) Competitive awards.--Grants or 
                contracts awarded for carrying out projects 
                under this subsection in amounts that exceed 
                $100,000 shall be awarded only on a competitive 
                basis, except that a noncompetitive award may 
                be made in the case of a project that is funded 
                jointly with other public or private sector 
                entities that provide a substantial portion of 
                assistance under the grant or contract for the 
                project.
                    (B) Time limits.--A grant or contract shall 
                not be awarded under this subsection to the 
                same organization for more than 3 consecutive 
                years unless such grant or contract is 
                competitively reevaluated within such period.
                    (C) Peer review.--
                            (i) In general.--The Secretary 
                        shall utilize a peer review process--
                                    (I) to review and evaluate 
                                all applications for grants in 
                                amounts that exceed $500,000 
                                that are submitted under this 
                                section; and
                                    (II) to review and 
                                designate exemplary and 
                                promising programs under this 
                                section.
                            (ii) Availability of funds.--The 
                        Secretary is authorized to use funds 
                        provided under this section to carry 
                        out peer review activities under this 
                        subparagraph.
                    (D) Priority.--In awarding grants or 
                contracts under this subsection, priority shall 
                be provided to entities with nationally 
                recognized expertise in the methods, 
                techniques, and knowledge of workforce 
                investment activities and shall include 
                appropriate time limits, established by the 
                Secretary, for the duration of such projects.
    (d) Dislocated Worker Projects.--Of the amount made 
available pursuant to section 132(a)(2)(A) for any program 
year, the Secretary shall use not more than 10 percent of such 
amount to carry out demonstration and pilot projects, 
multiservice projects, and multistate projects, relating to the 
employment and training needs of dislocated workers. Of the 
requirements of this section, such projects shall be subject 
only to the provisions relating to review and evaluation of 
applications under subsection (c)(4)(C). Such projects may 
include demonstration and pilot projects relating to promoting 
self-employment, promoting job creation, averting dislocations, 
assisting dislocated farmers, assisting dislocated fishermen, 
and promoting public works. Such projects shall be administered 
through the dislocated worker office described in section 
173(b).

SEC. 172. EVALUATIONS.

    (a) Programs and Activities Carried Out Under This Title.--
For the purpose of improving the management and effectiveness 
of programs and activities carried out under this title, the 
Secretary shall provide for the continuing evaluation of the 
programs and activities, including those programs and 
activities carried out under section 171. Such evaluations 
shall address--
            (1) the general effectiveness of such programs and 
        activities in relation to their cost, including the 
        extent to which the programs and activities--
                    (A) improve the employment competencies of 
                participants in comparison to comparably-
                situated individuals who did not participate in 
                such programs and activities; and
                    (B) to the extent feasible, increase the 
                level of total employment over the level that 
                would have existed in the absence of such 
                programs and activities;
            (2) the effectiveness of the performance measures 
        relating to such programs and activities;
            (3) the effectiveness of the structure and 
        mechanisms for delivery of services through such 
        programs and activities;
            (4) the impact of the programs and activities on 
        the community and participants involved;
            (5) the impact of such programs and activities on 
        related programs and activities;
            (6) the extent to which such programs and 
        activities meet the needs of various demographic 
        groups; and
            (7) such other factors as may be appropriate.
    (b) Other Programs and Activities.--The Secretary may 
conduct evaluations of other federally funded employment-
related programs and activities under other provisions of law.
    (c) Techniques.--Evaluations conducted under this section 
shall utilize appropriate methodology and research designs, 
including the use of control groups chosen by scientific random 
assignment methodologies. The Secretary shall conduct as least 
1 multisite control group evaluation under this section by the 
end of fiscal year 2005.
    (d) Reports.--The entity carrying out an evaluation 
described in subsection (a) or (b) shall prepare and submit to 
the Secretary a draft report and a final report containing the 
results of the evaluation.
    (e) Reports to Congress.--Not later than 30 days after the 
completion of such a draft report, the Secretary shall transmit 
the draft report to the Committee on Education and the 
Workforce of the House of Representatives and the Committee on 
Labor and Human Resources of the Senate. Not later than 60 days 
after the completion of such a final report, the Secretary 
shall transmit the final report to such committees of the 
Congress.
    (f) Coordination.--The Secretary shall ensure the 
coordination of evaluations carried out by States pursuant to 
section 136(e) with the evaluations carried out under this 
section.

SEC. 173. NATIONAL EMERGENCY GRANTS.

    (a) In General.--The Secretary is authorized to award 
national emergency grants in a timely manner--
            (1) to an entity described in subsection (c) to 
        provide employment and training assistance to workers 
        affected by major economic dislocations, such as plant 
        closures, mass layoffs, or closures and realignments of 
        military installations;
            (2) to provide assistance to the Governor of any 
        State within the boundaries of which is an area that 
        has suffered an emergency or a major disaster as 
        defined in paragraphs (1) and (2), respectively, of 
        section 102 of The Robert T. Stafford Disaster Relief 
        and Emergency Assistance Act (42 U.S.C. 5122 (1) and 
        (2)) (referred to in this section as the ``disaster 
        area'') to provide disaster relief employment in the 
        area; and
            (3) to provide additional assistance to a State or 
        local board for eligible dislocated workers in a case 
        in which the State or local board has expended the 
        funds provided under this section to carry out 
        activities described in paragraphs (1) and (2) and can 
        demonstrate the need for additional funds to provide 
        appropriate services for such workers, in accordance 
        with requirements prescribed by the Secretary.
    (b) Administration.--The Secretary shall designate a 
dislocated worker office to coordinate the functions of the 
Secretary under this title relating to employment and training 
activities for dislocated workers, including activities carried 
out under the national emergency grants.
    (c) Employment and Training Assistance Requirements.--
            (1) Grant recipient eligibility.--
                    (A) Application.--To be eligible to receive 
                a grant under subsection (a)(1), an entity 
                shall submit an application to the Secretary at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
                    (B) Eligible entity.--In this paragraph, 
                the term ``entity'' means a State, a local 
                board, an entity described in section 166(c), 
                entities determined to be eligible by the 
                Governor of the State involved, and other 
                entities that demonstrate to the Secretary the 
                capability to effectively respond to the 
                circumstances relating to particular 
                dislocations.
            (2) Participant eligibility.--
                    (A) In general.--In order to be eligible to 
                receive employment and training assistance 
                under a national emergency grant awarded 
                pursuant to subsection (a)(1), an individual 
                shall be--
                            (i) a dislocated worker;
                            (ii) a civilian employee of the 
                        Department of Defense or the Department 
                        of Energy employed at a military 
                        installation that is being closed, or 
                        that will undergo realignment, within 
                        the next 24 months after the date of 
                        the determination of eligibility;
                            (iii) an individual who is employed 
                        in a nonmanagerial position with a 
                        Department of Defense contractor, who 
                        is determined by the Secretary of 
                        Defense to be at-risk of termination 
                        from employment as a result of 
                        reductions in defense expenditures, and 
                        whose employer is converting operations 
                        from defense to nondefense applications 
                        in order to prevent worker layoffs; or
                            (iv) a member of the Armed Forces 
                        who--
                                    (I) was on active duty or 
                                full-time National Guard duty;
                                    (II)(aa) is involuntarily 
                                separated (as defined in 
                                section 1141 of title 10, 
                                United States Code) from active 
                                duty or full-time National 
                                Guard duty; or
                                    (bb) is separated from 
                                active duty or full-time 
                                National Guard duty pursuant to 
                                a special separation benefits 
                                program under section 1174a of 
                                title 10, United States Code, 
                                or the voluntary separation 
                                incentive program under section 
                                1175 of that title;
                                    (III) is not entitled to 
                                retired or retained pay 
                                incident to the separation 
                                described in subclause (II); 
                                and
                                    (IV) applies for such 
                                employment and training 
                                assistance before the end of 
                                the 180-day period beginning on 
                                the date of that separation.
                    (B) Retraining assistance.--The individuals 
                described in subparagraph (A)(iii) shall be 
                eligible for retraining assistance to upgrade 
                skills by obtaining marketable skills needed to 
                support the conversion described in 
                subparagraph (A)(iii).
                    (C) Additional requirements.--The Secretary 
                shall establish and publish additional 
                requirements related to eligibility for 
                employment and training assistance under the 
                national emergency grants to ensure effective 
                use of the funds available for this purpose.
                    (D) Definitions.--In this paragraph, the 
                terms ``military institution'' and 
                ``realignment'' have the meanings given the 
                terms in section 2910 of the Defense Base 
                Closure and Realignment Act of 1990 (Public Law 
                101-510; 10 U.S.C. 2687 note).
    (d) Disaster Relief Employment Assistance Requirements.--
            (1) In general.--Funds made available under 
        subsection (a)(2)--
                    (A) shall be used to provide disaster 
                relief employment on projects that provide 
                food, clothing, shelter, and other humanitarian 
                assistance for disaster victims, and projects 
                regarding demolition, cleaning, repair, 
                renovation, and reconstruction of damaged and 
                destroyed structures, facilities, and lands 
                located within the disaster area;
                    (B) may be expended through public and 
                private agencies and organizations engaged in 
                such projects; and
                    (C) may be expended to provide employment 
                and training activities.
            (2) Eligibility.--An individual shall be eligible 
        to be offered disaster relief employment under 
        subsection (a)(2) if such individual is a dislocated 
        worker, is a long-term unemployed individual, or is 
        temporarily or permanently laid off as a consequence of 
        the disaster.
            (3) Limitations on disaster relief employment.--No 
        individual shall be employed under subsection (a)(2) 
        for more than 6 months for work related to recovery 
        from a single natural disaster.

SEC. 174. AUTHORIZATION OF APPROPRIATIONS.

    (a) Native American Programs; Migrant and Seasonal 
Farmworker Programs; Veterans' Workforce Investment Programs.--
            (1) In general.--Subject to paragraph (2), there 
        are authorized to be appropriated to carry out sections 
        166 through 168 such sums as may be necessary for each 
        of the fiscal years 1999 through 2003.
            (2) Reservations.--Of the amount appropriated 
        pursuant to the authorization of appropriations under 
        paragraph (1) for a fiscal year, the Secretary shall--
                    (A) reserve not less than $55,000,000 for 
                carrying out section 166;
                    (B) reserve not less than $70,000,000 for 
                carrying out section 167; and
                    (C) reserve not less than $7,300,000 for 
                carrying out section 168.
    (b) Technical Assistance; Demonstration and Pilot Projects; 
Evaluations; Incentive Grants.--
            (1) In general.--Subject to paragraph (2), there 
        are authorized to be appropriated to carry out sections 
        170 through 172 and section 503 such sums as may be 
        necessary for each of the fiscal years 1999 through 
        2003.
            (2) Reservations.--Of the amount appropriated 
        pursuant to the authorization of appropriations under 
        paragraph (1) for a fiscal year, the Secretary shall--
                    (A)(i) for fiscal year 1999, reserve up to 
                40 percent for carrying out section 170 (other 
                than subsection (b) of such section);
                    (ii) for fiscal year 2000, reserve up to 25 
                percent for carrying out section 170 (other 
                than subsection (b) of such section); and
                    (iii) for each of the fiscal years 2001 
                through 2003, reserve up to 20 percent for 
                carrying out section 170 (other than subsection 
                (b) of such section);
                    (B)(i) for fiscal year 1999, reserve not 
                less than 50 percent for carrying out section 
                171; and
                    (ii) for each of the fiscal years 2000 
                through 2003, reserve not less than 45 percent 
                for carrying out section 171;
                    (C)(i) for fiscal year 1999, reserve not 
                less than 10 percent for carrying out section 
                172; and
                    (ii) for each of the fiscal years 2000 
                through 2003, reserve not less than 10 percent 
                for carrying out section 172; and
                    (D)(i) for fiscal year 1999, reserve no 
                funds for carrying out section 503;
                    (ii) for fiscal year 2000, reserve up to 20 
                percent for carrying out section 503; and
                    (iii) for each of the fiscal years 2001 
                through 2003, reserve up to 25 percent for 
                carrying out section 503.

                       Subtitle E--Administration

SEC. 181. REQUIREMENTS AND RESTRICTIONS.

    (a) Benefits.--
            (1) Wages.--
                    (A) In general.--Individuals in on-the-job 
                training or individuals employed in activities 
                under this title shall be compensated at the 
                same rates, including periodic increases, as 
                trainees or employees who are similarly 
                situated in similar occupations by the same 
                employer and who have similar training, 
                experience, and skills, and such rates shall be 
                in accordance with applicable law, but in no 
                event less than the higher of the rate 
                specified in section 6(a)(1) of the Fair Labor 
                Standards Act of 1938 (29 U.S.C. 206(a)(1)) or 
                the applicable State or local minimum wage law.
                    (B) Rule of construction.--The reference in 
                subparagraph (A) to section 6(a)(1) of the Fair 
                Labor Standards Act of 1938 (29 U.S.C. 
                206(a)(1))--
                            (i) shall be deemed to be a 
                        reference to section 6(a)(3) of that 
                        Act for individuals in American Samoa; 
                        and
                            (ii) shall not be applicable for 
                        individuals in other territorial 
                        jurisdictions in which section 6 of the 
                        Fair Labor Standards Act of 1938 does 
                        not apply.
            (2) Treatment of allowances, earnings, and 
        payments.--Allowances, earnings and payments to 
        individuals participating in programs under this title 
        shall not be considered as income for the purposes of 
        determining eligibility for and the amount of income 
        transfer and in-kind aid furnished under any Federal or 
        federally assisted program based on need, other than as 
        provided under the Social Security Act (42 U.S.C. 301 
        et seq.).
    (b) Labor Standards.--
            (1) Limitations on activities that impact wages of 
        employees.--No funds provided under this title shall be 
        used to pay the wages of incumbent employees during 
        their participation in economic development activities 
        provided through a statewide workforce investment 
        system.
            (2) Displacement.--
                    (A) Prohibition.--A participant in a 
                program or activity authorized under this title 
                (referred to in this section as a ``specified 
                activity'') shall not displace (including a 
                partial displacement, such as a reduction in 
                the hours of nonovertime work, wages, or 
                employment benefits) any currently employed 
                employee (as of the date of the participation).
                    (B) Prohibition on impairment of 
                contracts.--A specified activity shall not 
                impair an existing contract for services or 
                collective bargaining agreement, and no such 
                activity that would be inconsistent with the 
                terms of a collective bargaining agreement 
                shall be undertaken without the written 
                concurrence of the labor organization and 
                employer concerned.
            (3) Other prohibitions.--A participant in a 
        specified activity shall not be employed in a job if--
                    (A) any other individual is on layoff from 
                the same or any substantially equivalent job;
                    (B) the employer has terminated the 
                employment of any regular employee or otherwise 
                reduced the workforce of the employer with the 
                intention of filling the vacancy so created 
                with the participant; or
                    (C) the job is created in a promotional 
                line that will infringe in any way upon the 
                promotional opportunities of currently employed 
                individuals (as of the date of the 
                participation).
            (4) Health and safety.--Health and safety standards 
        established under Federal and State law otherwise 
        applicable to working conditions of employees shall be 
        equally applicable to working conditions of 
        participants engaged in specified activities. To the 
        extent that a State workers' compensation law applies, 
        workers' compensation shall be provided to participants 
        on the same basis as the compensation is provided to 
        other individuals in the State in similar employment.
            (5) Employment conditions.--Individuals in on-the-
        job training or individuals employed in programs and 
        activities under this title, shall be provided benefits 
        and working conditions at the same level and to the 
        same extent as other trainees or employees working a 
        similar length of time and doing the same type of work.
            (6) Opportunity to submit comments.--Interested 
        members of the public, including representatives of 
        businesses and of labor organizations, shall be 
        provided an opportunity to submit comments to the 
        Secretary with respect to programs and activities 
        proposed to be funded under subtitle B.
            (7) No impact on union organizing.--Each recipient 
        of funds under this title shall provide to the 
        Secretary assurances that none of such funds will be 
        used to assist, promote, or deter union organizing.
    (c) Grievance Procedure.--
            (1) In general.--Each State and local area 
        receiving an allotment under this title shall establish 
        and maintain a procedure for grievances or complaints 
        alleging violations of the requirements of this title 
        from participants and other interested or affected 
        parties. Such procedure shall include an opportunity 
        for a hearing and be completed within 60 days after the 
        filing of the grievance or complaint.
            (2) Investigation.--
                    (A) In general.--The Secretary shall 
                investigate an allegation of a violation 
                described in paragraph (1) if--
                            (i) a decision relating to such 
                        violation has not been reached within 
                        60 days after the date of the filing of 
                        the grievance or complaint and either 
                        party appeals to the Secretary; or
                            (ii) a decision relating to such 
                        violation has been reached within such 
                        60 days and the party to which such 
                        decision is adverse appeals such 
                        decision to the Secretary.
                    (B) Additional requirement.--The Secretary 
                shall make a final determination relating to an 
                appeal made under subparagraph (A) no later 
                than 120 days after receiving such appeal.
            (3) Remedies.--Remedies that may be imposed under 
        this section for a violation of any requirement of this 
        title shall be limited--
                    (A) to suspension or termination of 
                payments under this title;
                    (B) to prohibition of placement of a 
                participant with an employer that has violated 
                any requirement under this title;
                    (C) where applicable, to reinstatement of 
                an employee, payment of lost wages and 
                benefits, and reestablishment of other relevant 
                terms, conditions, and privileges of 
                employment; and
                    (D) where appropriate, to other equitable 
                relief.
            (4) Rule of construction.--Nothing in paragraph (3) 
        shall be construed to prohibit a grievant or 
        complainant from pursuing a remedy authorized under 
        another Federal, State, or local law for a violation of 
        this title.
    (d) Relocation.--
            (1) Prohibition on use of funds to encourage or 
        induce relocation.--No funds provided under this title 
        shall be used, or proposed for use, to encourage or 
        induce the relocation of a business or part of a 
        business if such relocation would result in a loss of 
        employment for any employee of such business at the 
        original location and such original location is within 
        the United States.
            (2) Prohibition on use of funds for customized or 
        skill training and related activities after 
        relocation.--No funds provided under this title for an 
        employment and training activity shall be used for 
        customized or skill training, on-the-job training, or 
        company-specific assessments of job applicants or 
        employees, for any business or part of a business that 
        has relocated, until the date that is 120 days after 
        the date on which such business commences operations at 
        the new location, if the relocation of such business or 
        part of a business results in a loss of employment for 
        any employee of such business at the original location 
        and such original location is within the United States.
            (3) Repayment.--If the Secretary determines that a 
        violation of paragraph (1) or (2) has occurred, the 
        Secretary shall require the State that has violated 
        such paragraph to repay to the United States an amount 
        equal to the amount expended in violation of such 
        paragraph.
    (e) Limitation on Use of Funds.--No funds available under 
this title shall be used for employment generating activities, 
economic development activities, investment in revolving loan 
funds, capitalization of businesses, investment in contract 
bidding resource centers, and similar activities that are not 
directly related to training for eligible individuals under 
this title. No funds available under subtitle B shall be used 
for foreign travel.
    (f) Testing and Sanctioning for Use of Controlled 
Substances.--
            (1) In general.--Notwithstanding any other 
        provision of law, a State shall not be prohibited by 
        the Federal Government from--
                    (A) testing participants in programs under 
                subtitle B for the use of controlled 
                substances; and
                    (B) sanctioning such participants who test 
                positive for the use of such controlled 
                substances.
            (2) Additional requirements.--
                    (A) Period of sanction.--In sanctioning 
                participants in programs under subtitle B who 
                test positive for the use of controlled 
                substances--
                            (i) with respect to the first 
                        occurrence for which a participant 
                        tests positive, a State may exclude the 
                        participant from the program for a 
                        period not to exceed 6 months; and
                            (ii) with respect to the second 
                        occurrence and each subsequent 
                        occurrence for which a participant 
                        tests positive, a State may exclude the 
                        participant from the program for a 
                        period not to exceed 2 years.
                    (B) Appeal.--The testing of participants 
                and the imposition of sanctions under this 
                subsection shall be subject to expeditious 
                appeal in accordance with due process 
                procedures established by the State.
                    (C) Privacy.--A State shall establish 
                procedures for testing participants for the use 
                of controlled substances that ensure a maximum 
                degree of privacy for the participants.
            (4) Funding requirement.--In testing and 
        sanctioning of participants for the use of controlled 
        substances in accordance with this subsection, the only 
        Federal funds that a State may use are the amounts made 
        available for the administration of statewide workforce 
        investment activities under section 134(a)(3)(B).

SEC. 182. PROMPT ALLOCATION OF FUNDS.

    (a) Allotments Based on Latest Available Data.--All 
allotments to States and grants to outlying areas under this 
title shall be based on the latest available data and estimates 
satisfactory to the Secretary. All data relating to 
disadvantaged adults and disadvantaged youth shall be based on 
the most recent satisfactory data from the Bureau of the 
Census.
    (b) Publication in Federal Register Relating to Formula 
Funds.--Whenever the Secretary allots funds required to be 
allotted under this title, the Secretary shall publish in a 
timely fashion in the Federal Register the proposed amount to 
be distributed to each recipient of the funds.
    (c) Requirement for Funds Distributed by Formula.--All 
funds required to be allotted under section 127 or 132 shall be 
allotted within 45 days after the date of enactment of the Act 
appropriating the funds, except that, if such funds are 
appropriated in advance as authorized by section 189(g), such 
funds shall be allotted or allocated not later than the March 
31 preceding the program year for which such funds are to be 
available for obligation.
    (d) Publication in Federal Register Relating to 
Discretionary Funds.--Whenever the Secretary utilizes a formula 
to allot or allocate funds made available for distribution at 
the Secretary's discretion under this title, the Secretary 
shall, not later than 30 days prior to such allotment or 
allocation, publish such formula in the Federal Register for 
comments along with the rationale for the formula and the 
proposed amounts to be distributed to each State and local 
area. After consideration of any comments received, the 
Secretary shall publish final allotments and allocations in the 
Federal Register.
    (e) Availability of Funds.--Funds shall be made available 
under sections 128 and 133 for a local area not later than 30 
days after the date the funds are made available to the 
Governor involved, under section 127 or 132 (as the case may 
be), or 7 days after the date the local plan for the area is 
approved, whichever is later.

SEC. 183. MONITORING.

    (a) In General.--The Secretary is authorized to monitor all 
recipients of financial assistance under this title to 
determine whether the recipients are complying with the 
provisions of this title, including the regulations issued 
under this title.
    (b) Investigations.--The Secretary may investigate any 
matter the Secretary determines to be necessary to determine 
the compliance of the recipients with this title, including the 
regulations issued under this title. The investigations 
authorized by this subsection may include examining records 
(including making certified copies of the records), questioning 
employees, and entering any premises or onto any site in which 
any part of a program or activity of such a recipient is 
conducted or in which any of the records of the recipient are 
kept.
    (c) Additional Requirement.--For the purpose of any 
investigation or hearing conducted under this title by the 
Secretary, the provisions of section 9 of the Federal Trade 
Commission Act (15 U.S.C. 49) (relating to the attendance of 
witnesses and the production of documents) apply to the 
Secretary, in the same manner and to the same extent as the 
provisions apply to the Federal Trade Commission.

SEC. 184. FISCAL CONTROLS; SANCTIONS.

    (a) Establishment of Fiscal Controls by States.--
            (1) In general.--Each State shall establish such 
        fiscal control and fund accounting procedures as may be 
        necessary to assure the proper disbursal of, and 
        accounting for, Federal funds allocated to local areas 
        under subtitle B. Such procedures shall ensure that all 
        financial transactions carried out under subtitle B are 
        conducted and records maintained in accordance with 
        generally accepted accounting principles applicable in 
        each State.
            (2) Cost principles.--
                    (A) In general.--Each State (including the 
                Governor of the State), local area (including 
                the chief elected official for the area), and 
                provider receiving funds under this title shall 
                comply with the applicable uniform cost 
                principles included in the appropriate 
                circulars of the Office of Management and 
                Budget for the type of entity receiving the 
                funds.
                    (B) Exception.--The funds made available to 
                a State for administration of statewide 
                workforce investment activities in accordance 
                with section 134(a)(3)(B) shall be allocable to 
                the overall administration of workforce 
                investment activities, but need not be 
                specifically allocable to--
                            (i) the administration of adult 
                        employment and training activities;
                            (ii) the administration of 
                        dislocated worker employment and 
                        training activities; or
                            (iii) the administration of youth 
                        activities.
            (3) Uniform administrative requirements.--
                    (A) In general.--Each State (including the 
                Governor of the State), local area (including 
                the chief elected official for the area), and 
                provider receiving funds under this title shall 
                comply with the appropriate uniform 
                administrative requirements for grants and 
                agreements applicable for the type of entity 
                receiving the funds, as promulgated in 
                circulars or rules of the Office of Management 
                and Budget.
                    (B) Additional requirement.--Procurement 
                transactions under this title between local 
                boards and units of State or local governments 
                shall be conducted only on a cost-reimbursable 
                basis.
            (4) Monitoring.--Each Governor of a State shall 
        conduct on an annual basis onsite monitoring of each 
        local area within the State to ensure compliance with 
        the uniform administrative requirements referred to in 
        paragraph (3).
            (5) Action by governor.--If the Governor determines 
        that a local area is not in compliance with the uniform 
        administrative requirements referred to in paragraph 
        (3), the Governor shall--
                    (A) require corrective action to secure 
                prompt compliance; and
                    (B) impose the sanctions provided under 
                subsection (b) in the event of failure to take 
                the required corrective action.
            (6) Certification.--The Governor shall, every 2 
        years, certify to the Secretary that--
                    (A) the State has implemented the uniform 
                administrative requirements referred to in 
                paragraph (3);
                    (B) the State has monitored local areas to 
                ensure compliance with the uniform 
                administrative requirements as required under 
                paragraph (4); and
                    (C) the State has taken appropriate action 
                to secure compliance pursuant to paragraph (5).
            (7) Action by the secretary.--If the Secretary 
        determines that the Governor has not fulfilled the 
        requirements of this subsection, the Secretary shall--
                    (A) require corrective action to secure 
                prompt compliance; and
                    (B) impose the sanctions provided under 
                subsection (e) in the event of failure of the 
                Governor to take the required appropriate 
                action to secure compliance.
    (b) Substantial Violation.--
            (1) Action by governor.--If, as a result of 
        financial and compliance audits or otherwise, the 
        Governor determines that there is a substantial 
        violation of a specific provision of this title, and 
        corrective action has not been taken, the Governor 
        shall--
                    (A) issue a notice of intent to revoke 
                approval of all or part of the local plan 
                affected; or
                    (B) impose a reorganization plan, which may 
                include--
                            (i) decertifying the local board 
                        involved;
                            (ii) prohibiting the use of 
                        eligible providers;
                            (iii) selecting an alternative 
                        entity to administer the program for 
                        the local area involved;
                            (iv) merging the local area into 1 
                        or more other local areas; or
                            (v) making other such changes as 
                        the Secretary or Governor determines 
                        necessary to secure compliance.
            (2) Appeal.--
                    (A) In general.--The actions taken by the 
                Governor pursuant to subparagraphs (A) and (B) 
                of paragraph (1) may be appealed to the 
                Secretary and shall not become effective 
                until--
                            (i) the time for appeal has 
                        expired; or
                            (ii) the Secretary has issued a 
                        decision.
                    (B) Additional requirement.--The Secretary 
                shall make a final decision under subparagraph 
                (A) not later than 45 days after the receipt of 
                the appeal.
            (3) Action by the secretary.--If the Governor fails 
        to promptly take the actions required under paragraph 
        (1), the Secretary shall take such actions.
    (c) Repayment of Certain Amounts to the United States.--
            (1) In general.--Every recipient of funds under 
        this title shall repay to the United States amounts 
        found not to have been expended in accordance with this 
        title.
            (2) Offset of repayment.--If the Secretary 
        determines that a State has expended funds made 
        available under this title in a manner contrary to the 
        requirements of this title, the Secretary may offset 
        repayment of such expenditures against any other amount 
        to which the State is or may be entitled, except as 
        provided under subsection (d)(1).
            (3) Repayment from deduction by state.--If the 
        Secretary requires a State to repay funds as a result 
        of a determination that a local area of the State has 
        expended funds contrary to the requirements of this 
        title, the Governor of the State may use an amount 
        deducted under paragraph (4) to repay the funds, except 
        as provided under subsection (e)(1).
            (4) Deduction by state.--The Governor may deduct an 
        amount equal to the misexpenditure described in 
        paragraph (3) from subsequent program year allocations 
        to the local area from funds reserved for the 
        administrative costs of the local programs involved, as 
        appropriate.
            (5) Limitations.--A deduction made by a State as 
        described in paragraph (4) shall not be made until such 
        time as the Governor has taken appropriate corrective 
        action to ensure full compliance within such local area 
        with regard to appropriate expenditures of funds under 
        this title.
    (d) Repayment of Amounts.--
            (1) In general.--Each recipient of funds under this 
        title shall be liable to repay the amounts described in 
        subsection (c)(1), from funds other than funds received 
        under this title, upon a determination by the Secretary 
        that the misexpenditure of funds was due to willful 
        disregard of the requirements of this title, gross 
        negligence, failure to observe accepted standards of 
        administration, or a pattern of misexpenditure as 
        described inparagraphs (2) and (3) of subsection (c). 
No such determination shall be made under this subsection or subsection 
(c) until notice and opportunity for a fair hearing has been given to 
the recipient.
            (2) Factors in imposing sanctions.--In determining 
        whether to impose any sanction authorized by this 
        section against a recipient for violations by a 
        subgrantee or contractor of such recipient under this 
        title (including the regulations issued under this 
        title), the Secretary shall first determine whether 
        such recipient has adequately demonstrated that the 
        recipient has--
                    (A) established and adhered to an 
                appropriate system for the award and monitoring 
                of grants and contracts with subgrantees and 
                contractors that contains acceptable standards 
                for ensuring accountability;
                    (B) entered into a written grant agreement 
                or contract with such subgrantee or contractor 
                that established clear goals and obligations in 
                unambiguous terms;
                    (C) acted with due diligence to monitor the 
                implementation of the grant agreement or 
                contract, including the carrying out of the 
                appropriate monitoring activities (including 
                audits) at reasonable intervals; and
                    (D) taken prompt and appropriate corrective 
                action upon becoming aware of any evidence of a 
                violation of this title, including regulations 
                issued under this title, by such subgrantee or 
                contractor.
            (3) Waiver.--If the Secretary determines that the 
        recipient has demonstrated substantial compliance with 
        the requirements of paragraph (2), the Secretary may 
        waive the imposition of sanctions authorized by this 
        section upon such recipient. The Secretary is 
        authorized to impose any sanction consistent with the 
        provisions of this title and any applicable Federal or 
        State law directly against any subgrantee or contractor 
        for violation of this title, including regulations 
        issued under this title.
    (e) Immediate Termination or Suspension of Assistance in 
Emergency Situations.--In emergency situations, if the 
Secretary determines it is necessary to protect the integrity 
of the funds or ensure the proper operation of the program or 
activity involved, the Secretary may immediately terminate or 
suspend financial assistance, in whole or in part, to the 
recipient if the recipient is given prompt notice and the 
opportunity for a subsequent hearing within 30 days after such 
termination or suspension. The Secretary shall not delegate any 
of the functions or authority specified in this subsection, 
other than to an officer whose appointment is required to be 
made by and with the advice and consent of the Senate.
    (f) Discrimination Against Participants.--If the Secretary 
determines that any recipient under this title has discharged 
or in any other manner discriminated against a participant or 
against any individual in connection with the administration of 
the program involved, or against any individual because such 
individual has filed any complaint or instituted or caused to 
be instituted any proceeding under or related to this title, or 
has testified or is about to testify in any such proceeding or 
investigation under or related to this title, or otherwise 
unlawfully denied to any individual a benefit to which that 
individual is entitled under the provisions of this title or 
the Secretary's regulations, the Secretary shall, within thirty 
days, take such action or order such corrective measures, as 
necessary, with respect to the recipient or the aggrieved 
individual, or both.
    (g) Remedies.--The remedies described in this section shall 
not be construed to be the exclusive remedies available for 
violations described in this section.

SEC. 185. REPORTS; RECORDKEEPING; INVESTIGATIONS.

    (a) Reports.--
            (1) In general.--Recipients of funds under this 
        title shall keep records that are sufficient to permit 
        the preparation of reports required by this title and 
        to permit the tracing of funds to a level of 
        expenditure adequate to ensure that the funds have not 
        been spent unlawfully.
            (2) Submission to the secretary.--Every such 
        recipient shall maintain such records and submit such 
        reports, in such form and containing such information, 
        as the Secretary may require regarding the performance 
        of programs and activities carried out under this 
        title. Such records and reports shall be submitted to 
        the Secretary but shall not be required to be submitted 
        more than once each quarter unless specifically 
        requested by Congress or a committee of Congress, in 
        which case an estimate may be provided.
            (3) Maintenance of standardized records.--In order 
        to allow for the preparation of the reports required 
        under subsection (c), such recipients shall maintain 
        standardized records for all individual participants 
        and provide to the Secretary a sufficient number of 
        such records to provide for an adequate analysis of the 
        records.
            (4) Availability to the public.--
                    (A) In general.--Except as provided in 
                subparagraph (B), records maintained by such 
                recipients pursuant to this subsection shall be 
                made available to the public upon request.
                    (B) Exception.--Subparagraph (A) shall not 
                apply to--
                            (i) information, the disclosure of 
                        which would constitute a clearly 
                        unwarranted invasion of personal 
                        privacy; and
                            (ii) trade secrets, or commercial 
                        or financial information, that is 
                        obtained from a person and privileged 
                        or confidential.
                    (C) Fees to recover costs.--Such recipients 
                may charge fees sufficient to recover costs 
                applicable to the processing of requests for 
                records under subparagraph (A).
    (b) Investigations of Use of Funds.--
            (1) In general.--
                    (A) Secretary.--In order to evaluate 
                compliance with the provisions of this title, 
                the Secretary shall conduct, in several States, 
                in each fiscal year, investigations of the use 
                of funds received by recipients under this 
                title.
                    (B) Comptroller general of the united 
                states.--In order to ensure compliance with the 
                provisions of this title, the Comptroller 
                General of the United States may conduct 
                investigations of the use of funds received 
                under this title by any recipient.
            (2) Prohibition.--In conducting any investigation 
        under this title, the Secretary or the Comptroller 
        General of the United States may not request the 
        compilation of any information that the recipient is 
        not otherwise required to compile and that is not 
        readily available to such recipient.
            (3) Audits.--
                    (A) In general.--In carrying out any audit 
                under this title (other than any initial audit 
                survey or any audit investigating possible 
                criminal or fraudulent conduct), either 
                directly or through grant or contract, the 
                Secretary, the Inspector General of the 
                Department of Labor, or the Comptroller General 
                of the United States shall furnish to the 
                State, recipient, or other entity to be 
                audited, advance notification of the overall 
                objectives and purposes of the audit, and any 
                extensive recordkeeping or data requirements to 
                be met, not later than 14 days (or as soon as 
                practicable), prior to the commencement of the 
                audit.
                    (B) Notification requirement.--If the 
                scope, objectives, or purposes of the audit 
                change substantially during the course of the 
                audit, the entity being audited shall be 
                notified of the change as soon as practicable.
                    (C) Additional requirement.--The reports on 
                the results of such audits shall cite the law, 
                regulation, policy, or other criteria 
                applicable to any finding contained in the 
                reports.
                    (D) Rule of construction.--Nothing 
                contained in this title shall be construed so 
                as to be inconsistent with the Inspector 
                General Act of 1978 (5 U.S.C. App.) or 
                government auditing standards issued by the 
                Comptroller General of the United States.
    (c) Accessibility of Reports.--Each State, each local 
board, and each recipient (other than a subrecipient, 
subgrantee, or contractor of a recipient) receiving funds under 
this title--
            (1) shall make readily accessible such reports 
        concerning its operations and expenditures as shall be 
        prescribed by the Secretary;
            (2) shall prescribe and maintain comparable 
        management information systems, in accordance with 
        guidelines that shall be prescribed by the Secretary, 
        designed to facilitate the uniform compilation, cross 
        tabulation, and analysis of programmatic, participant, 
        and financial data, on statewide, local area, and other 
        appropriate bases, necessary for reporting, monitoring, 
        and evaluating purposes, including data necessary to 
        comply with section 188; and
            (3) shall monitor the performance of providers in 
        complying with the terms of grants, contracts, or other 
        agreements made pursuant to this title.
    (d) Information To Be Included in Reports.--
            (1) In general.--The reports required in subsection 
        (c) shall include information regarding programs and 
        activities carried out under this title pertaining to--
                    (A) the relevant demographic 
                characteristics (including race, ethnicity, 
                sex, and age) and other related information 
                regarding participants;
                    (B) the programs and activities in which 
                participants are enrolled, and the length of 
                time that participants are engaged in such 
                programs and activities;
                    (C) outcomes of the programs and activities 
                for participants, including the occupations of 
                participants, and placement for participants in 
                nontraditional employment;
                    (D) specified costs of the programs and 
                activities; and
                    (E) information necessary to prepare 
                reports to comply with section 188.
            (2) Additional requirement.--The Secretary shall 
        ensure that all elements of the information required 
        for the reports described in paragraph (1) are defined 
        and reported uniformly.
    (e) Quarterly Financial Reports.--
            (1) In general.--Each local board in the State 
        shall submit quarterly financial reports to the 
        Governor with respect to programs and activities 
        carried out under this title. Such reports shall 
        include information identifying all program and 
        activity costs by cost category in accordance with 
        generally accepted accounting principles and by year of 
        the appropriation involved.
            (2) Additional requirement.--Each State shall 
        submit to the Secretary, on a quarterly basis, a 
        summary of the reports submitted to the Governor 
        pursuant to paragraph (1).
    (f) Maintenance of Additional Records.--Each State and 
local board shall maintain records with respect to programs and 
activities carried out under this title that identify--
            (1) any income or profits earned, including such 
        income or profits earned by subrecipients; and
            (2) any costs incurred (such as stand-in costs) 
        that are otherwise allowable except for funding 
        limitations.
    (g) Cost Categories.--In requiring entities to maintain 
records of costs by category under this title, the Secretary 
shall require only that the costs be categorized as 
administrative or programmatic costs.

SEC. 186. ADMINISTRATIVE ADJUDICATION.

    (a) In General.--Whenever any applicant for financial 
assistance under this title is dissatisfied because the 
Secretary has made a determination not to award financial 
assistance in whole or in part to such applicant, the applicant 
may request a hearing before an administrative law judge of the 
Department of Labor. A similar hearing may also be requested by 
any recipient for whom a corrective action has been required or 
a sanction has been imposed by the Secretary under section 184.
    (b) Appeal.--The decision of the administrative law judge 
shall constitute final action by the Secretary unless, within 
20 days after receipt of the decision of the administrative law 
judge, a party dissatisfied with the decision or any part of 
the decision has filed exceptions with the Secretary 
specifically identifying the procedure, fact, law, or policy to 
which exception is taken. Any exception not specifically urged 
shall be deemed to have been waived. After the 20-day period 
the decision of the administrative law judge shall become the 
final decision of the Secretary unless the Secretary, within 30 
days after such filing, has notified the parties that the case 
involved has been accepted for review.
    (c) Time Limit.--Any case accepted for review by the 
Secretary under subsection (b) shall be decided within 180 days 
after such acceptance. If the case is not decided within the 
180-day period, the decision of the administrative law judge 
shall become the final decision of the Secretary at the end of 
the 180-day period.
    (d) Additional Requirement.--The provisions of section 187 
shall apply to any final action of the Secretary under this 
section.

SEC. 187. JUDICIAL REVIEW.

    (a) Review.--
            (1) Petition.--With respect to any final order by 
        the Secretary under section 186 by which the Secretary 
        awards, declines to award, or only conditionally 
        awards, financial assistance under his title, or any 
        final order of the Secretary under section 186 with 
        respect to a corrective action or sanction imposed 
        under section 184, any party to a proceeding which 
        resulted in such final order may obtain review of such 
        final order in the United States Court of Appeals 
        having jurisdiction over the applicant or recipient of 
        funds involved, by filing a review petition within 30 
        days after the date of issuance of such final order.
            (2) Action on petition.--The clerk of the court 
        shall transmit a copy of the review petition to the 
        Secretary who shall file the record on which the final 
        order was entered as provided in section 2112 of title 
        28, United States Code. The filing of a review petition 
        shall not stay the order of the Secretary, unless the 
        court orders a stay. Petitions filed under this 
        subsection shall be heard expeditiously, if possible 
        within 10 days after the date of filing of a reply to 
        the petition.
            (3) Standard and scope of review.--No objection to 
        the order of the Secretary shall be considered by the 
        court unless the objection was specifically urged, in a 
        timely manner, before the Secretary. The review shall 
        be limited to questions of law and the findings of fact 
        of the Secretary shall be conclusive if supported by 
        substantial evidence.
    (b) Judgment.--The court shall have jurisdiction to make 
and enter a decree affirming, modifying, or setting aside the 
order of the Secretary in whole or in part. The judgment of the 
court regarding the order shall be final, subject to certiorari 
review by the Supreme Court as provided in section 1254(1) of 
title 28, United States Code.

SEC. 188. NONDISCRIMINATION.

    (a) In General.--
            (1) Federal financial assistance.--For the purpose 
        of applying the prohibitions against discrimination on 
        the basis of age under the Age Discrimination Act of 
        1975 (42 U.S.C. 6101 et seq.), on the basis of 
        disability under section 504 of the Rehabilitation Act 
        of 1973 (29 U.S.C. 794), on the basis of sex under 
        title IX of the Education Amendments of 1972 (20 U.S.C. 
        1681 et seq.), or on the basis of race, color, or 
        national origin under title VI of the Civil Rights Act 
        of 1964 (42 U.S.C. 2000d et seq.), programs and 
        activities funded or otherwise financially assisted in 
        whole or in part under this Act are considered to be 
        programs and activities receiving Federal financial 
        assistance.
            (2) Prohibition of discrimination regarding 
        participation, benefits, and employment.--No individual 
        shall be excluded from participation in, denied the 
        benefits of, subjected to discrimination under, or 
        denied employment in the administration of or in 
        connection with, any such program or activity because 
        of race, color, religion, sex (except as otherwise 
        permitted under title IX of the Education Amendments of 
        1972), national origin, age, disability, or political 
        affiliation or belief.
            (3) Prohibition on assistance for facilities for 
        sectarian instruction or religious worship.--
        Participants shall not be employed under this title to 
        carry out the construction, operation, or maintenance 
        of any part of any facility that is used or to be used 
        for sectarian instruction or as a place for religious 
        worship (except with respect to the maintenance of a 
        facility that is not primarily or inherently devoted to 
        sectarian instruction or religious worship, in a case 
        in which the organization operating the facility is 
        part of a program or activity providing services to 
        participants).
            (4) Prohibition on discrimination on basis of 
        participant status.--No person may discriminate against 
        an individual who is a participant in a program or 
        activity that receives funds under this title, with 
        respect to the terms and conditions affecting, or 
        rights provided to, the individual, solely because of 
        the status of the individual as a participant.
            (5) Prohibition on discrimination against certain 
        noncitizens.--Participation in programs and activities 
        or receiving funds under this title shall be available 
        to citizens and nationals of the United States, 
        lawfully admitted permanent resident aliens, refugees, 
        asylees, and parolees, and other immigrants authorized 
        by the Attorney General to work in the United States.
    (b) Action of Secretary.--Whenever the Secretary finds that 
a State or other recipient of funds under this title has failed 
to comply with a provision of law referred to in subsection 
(a)(1), or with paragraph (2), (3), (4), or (5) of subsection 
(a), including an applicable regulation prescribed to carry out 
such provision or paragraph, the Secretary shall notify such 
State or recipient and shall request that the State or 
recipient comply. If within a reasonable period of time, not to 
exceed 60 days, the State or recipient fails or refuses to 
comply, the Secretary may--
            (1) refer the matter to the Attorney General with a 
        recommendation that an appropriate civil action be 
        instituted; or
            (2) take such other action as may be provided by 
        law.
    (c) Action of Attorney General.--When a matter is referred 
to the Attorney General pursuant to subsection (b)(1), or 
whenever the Attorney General has reason to believe that a 
State or other recipient of funds under this title is engaged 
in a pattern or practice of discrimination in violation of a 
provision of law referred to in subsection (a)(1) or in 
violation of paragraph (2), (3), (4), or (5) of subsection (a), 
the Attorney General may bring a civil action in any 
appropriate district court of the United States for such relief 
as may be appropriate, including injunctive relief.
    (d) Job Corps.--For the purposes of this section, Job Corps 
members shall be considered as the ultimate beneficiaries of 
Federal financial assistance.
    (e) Regulations.--The Secretary shall issue regulations 
necessary to implement this section not later than one year 
after the date of the enactment of the Workforce Investment Act 
of 1998. Such regulations shall adopt standards for determining 
discrimination and procedures for enforcement that are 
consistent with the Acts referred to in a subsection (a)(1), as 
well as procedures to ensure that complaints filed under this 
section and such Acts are processed in a manner that avoids 
duplication of effort.

SEC. 189. ADMINISTRATIVE PROVISIONS.

    (a) In General.--The Secretary may, in accordance with 
chapter 5 of title 5, United States Code, prescribe rules and 
regulations to carry out this title only to the extent 
necessary to administer and ensure compliance with the 
requirements of this title. Such rules and regulations may 
include provisions making adjustments authorized by section 204 
of the Intergovernmental Cooperation Act of 1968. All such 
rules and regulations shall be published in the Federal 
Register at least 30 days prior to their effective dates. 
Copies of each such rule or regulation shall be transmitted to 
the appropriate committees of Congress on the date of such 
publication and shall contain, with respect to each material 
provision of such rule or regulation, a citation to the 
particular substantive section of law that is the basis for the 
provision.
    (b) Acquisition of Certain Property and Services.--The 
Secretary is authorized, in carrying out this title, to accept, 
purchase, or lease in the name of the Department of Labor, and 
employ or dispose of in furtherance of the purposes of this 
title, any money or property, real, personal, or mixed, 
tangible or intangible, received by gift, devise, bequest, or 
otherwise, and to accept voluntary and uncompensated services 
notwithstanding the provisions of section 1342 of title 31, 
United States Code.
    (c) Authority To Enter Into Certain Agreements and To Make 
Certain Expenditures.--The Secretary may make such grants, 
enter into such contracts or agreements, establish such 
procedures, and make such payments, in installments and in 
advance or by way of reimbursement, or otherwise allocate or 
expend such funds under this title, as may be necessary to 
carry out this title, including making expenditures for 
construction, repairs, and capital improvements, and including 
making necessary adjustments in payments on account of over-
payments or underpayments.
    (d) Annual Report.--The Secretary shall prepare and submit 
to Congress an annual report regarding the programs and 
activities carried out under this title. The Secretary shall 
include in such report--
            (1) a summary of the achievements, failures, and 
        problems of the programs and activities in meeting the 
        objectives of this title;
            (2) a summary of major findings from research, 
        evaluations, pilot projects, and experiments conducted 
        under this title in the fiscal year prior to the 
        submission of the report;
            (3) recommendations for modifications in the 
        programs and activities based on analysis of such 
        findings; and
            (4) such other recommendations for legislative or 
        administrative action as the Secretary determines to be 
        appropriate.
    (e) Utilization of Services and Facilities.--The Secretary 
is authorized, in carrying out this title, under the same 
procedures as are applicable under subsection (c) or to the 
extent permitted by law other than this title, to accept and 
use the services and facilities of departments, agencies, and 
establishments of the United States. The Secretary is also 
authorized, in carrying out this title, to accept and use the 
services and facilities of the agencies of any State or 
political subdivision of a State, with the consent of the State 
or political subdivision.
    (f) Obligational Authority.--Notwithstanding any other 
provision of this title, the Secretary shall have no authority 
to enter into contracts, grant agreements, or other financial 
assistance agreements under this title except to such extent 
and in such amounts as are provided in advance in 
appropriations Acts.
    (g) Program Year.--
            (1) In general.--
                    (A) Program year.--Except as provided in 
                subparagraph (B), appropriations for any fiscal 
                year for programs and activities carried out 
                under this title shall be available for 
                obligation only on the basis of a program year. 
                The program year shall begin on July 1 in the 
                fiscal year for which the appropriation is 
                made.
                    (B) Youth activities.--The Secretary may 
                make available for obligation, beginning April 
                1 of any fiscal year, funds appropriated for 
                such fiscal year to carry out youth activities 
                under subtitle B.
            (2) Availability.--Funds obligated for any program 
        year for a program or activity carried out under this 
        title may be expended by each State receiving such 
        funds during that program year and the 2 succeeding 
        program years. Funds obligated for any program year for 
        a program or activity carried out under section 171 or 
        172 shall remain available until expended. Funds 
        received by local areas from States under this title 
        during a program year may be expended during that 
        program year and the succeeding program year. No amount 
        of the funds described in this paragraph shall be 
        deobligated on account of a rate of expenditure that is 
        consistent with a State plan, an operating plan 
        described in section 151, or a plan, grant agreement, 
        contract, application, or other agreement described in 
        subtitle D, as appropriate.
    (h) Enforcement of Military Selective Service Act.--The 
Secretary shall ensure that each individual participating in 
any program or activity established under this title, or 
receiving any assistance or benefit under this title, has not 
violated section 3 of the Military Selective Service Act (50 
U.S.C. App. 453) by not presenting and submitting to 
registration as required pursuant to such section. The Director 
of the Selective Service System shall cooperate with the 
Secretary to enable the Secretary to carry out this subsection.
    (i) Waivers and Special Rules.--
            (1) Existing waivers.--With respect to a State that 
        has been granted a waiver under the provisions relating 
        to training and employment services of the Department 
        of Labor in title I of the Departments of Labor, Health 
        and Human Services, and Education, and Related Agencies 
        Appropriations Act, 1997 (Public Law 104-208; 110 Stat. 
        3009-234), the authority provided under such waiver 
        shall continue in effect and apply, and include a 
        waiver of the related provisions of subtitle B and this 
        subtitle, for the duration of the initial waiver.
            (2) Special rule regarding designated areas.--A 
        State that has enacted, not later than December 31, 
        1997, a State law providing for the designation of 
        service delivery areas for the delivery of workforce 
        investment activities, may use such areas as local 
        areas under this title, notwithstanding section 116.
            (3) Special rule regarding sanctions.--A State that 
        enacts, not later than December 31, 1997, a State law 
        providing for the sanctioning of such service delivery 
        areas for failure to meet performance measures for 
        workforce investment activities, may use the State law 
        to sanction local areas for failure to meet State 
        performance measures under this title.
            (4) General waivers of statutory or regulatory 
        requirements.--
                    (A) General authority.--Notwithstanding any 
                other provision of law, the Secretary may waive 
                for a State, or a local area in a State, 
                pursuant to a request submitted by the Governor 
                of the State (in consultation with appropriate 
                local elected officials) that meets the 
                requirements of subparagraph (B)--
                            (i) any of the statutory or 
                        regulatory requirements of subtitle B 
                        or this subtitle (except for 
                        requirements relating to wage and labor 
                        standards, including nondisplacement 
                        protections, worker rights, 
                        participation and protection of workers 
                        and participants, grievance procedures 
                        and judicial review, nondiscrimination, 
                        allocation of funds to local areas, 
                        eligibility of providers or 
                        participants, the establishment and 
                        functions of local areas and local 
                        boards, and procedures for review and 
                        approval of plans); and
                            (ii) any of the statutory or 
                        regulatory requirements of sections 8 
                        through 10 of the Wagner-Peyser Act (29 
                        U.S.C. 49g through 49i) (excluding 
                        requirements relating to the provision 
                        of services to unemployment insurance 
                        claimants and veterans, and 
                        requirements relating to universal 
                        access to basic labor exchange services 
                        without cost to jobseekers).
                    (B) Requests.--A Governor requesting a 
                waiver under subparagraph (A) shall submit a 
                plan to the Secretary to improve the statewide 
                workforce investment system that--
                            (i) identifies the statutory or 
                        regulatory requirements that are 
                        requested to be waived and the goals 
                        that the State or local area in the 
                        State, as appropriate, intends to 
                        achieve as a result of the waiver;
                            (ii) describes the actions that the 
                        State or local area, as appropriate, 
                        has undertaken to remove State or local 
                        statutory or regulatory barriers;
                            (iii) describes the goals of the 
                        waiver and the expected programmatic 
                        outcomes if the request is granted;
                            (iv) describes the individuals 
                        impacted by the waiver; and
                            (v) describes the process used to 
                        monitor the progress in implementing 
                        such a waiver, and the process by which 
                        notice and an opportunity to comment on 
                        such request has been provided to the 
                        local board.
                    (C) Conditions.--Not later than 90 days 
                after the date of the original submission of a 
                request for a waiver under subparagraph (A), 
                the Secretary shall provide a waiver under this 
                paragraph if and only to the extent that--
                            (i) the Secretary determines that 
                        the requirements requested to be waived 
                        impede the ability of the State or 
                        local area, as appropriate, to 
                        implement the plan described in 
                        subparagraph (B); and
                            (ii) the State has executed a 
                        memorandum of understanding with the 
                        Secretary requiring such State to meet, 
                        or ensure that the local area meets, 
                        agreed-upon outcomes and to implement 
                        other appropriate measures to ensure 
                        accountability.

SEC. 190. REFERENCE.

    Effective on the date of the enactment of the Workforce 
Investment Act of 1998, all references in any other provision 
of law (other than section 665 of title 18, United States Code) 
to the Comprehensive Employment and Training Act, or to the Job 
Training Partnership Act, as the case may be, shall be deemed 
to refer to Workforce Investment Act of 1998.''.

SEC. 191. STATE LEGISLATIVE AUTHORITY.

    (a) Authority of State Legislature.--Nothing in this title 
shall be interpreted to preclude the enactment of State 
legislation providing for the implementation, consistent with 
the provisions of this title, of the activities assisted under 
this title. Any funds received by a State under this title 
shall be subject to appropriation by the State legislature, 
consistent with the terms and conditions required under this 
title.
    (b) Interstate Compacts and Cooperative Agreements.--In the 
event that compliance with provisions of this title would be 
enhanced by compacts and cooperative agreements between States, 
the consent of Congress is given to States to enter into such 
compacts and agreements to facilitate such compliance, subject 
to the approval of the Secretary.

SEC. 192. WORKFORCE FLEXIBILITY PLANS.

    (a) Plans.--A State may submit to the Secretary, and the 
Secretary may approve, a workforce flexibility plan under which 
the State is authorized to waive, in accordance with the plan--
            (1) any of the statutory or regulatory requirements 
        applicable under this title to local areas, pursuant to 
        applications for such waivers from the local areas, 
        except for requirements relating to the basic purposes 
        of this title, wage and labor standards, grievance 
        procedures and judicial review, nondiscrimination, 
        eligibility of participants, allocation of funds to 
        local areas, establishment and functions of local areas 
        and local boards, review and approval of local plans, 
        and worker rights, participation, and protection;
            (2) any of the statutory or regulatory requirements 
        applicable under sections 8 through 10 of the Wagner-
        Peyser Act (29 U.S.C. 49g through 49i) to the State, 
        except for requirements relating to the provision of 
        services to unemployment insurance claimants and 
        veterans, and to universal access to basic labor 
        exchange services without cost to jobseekers; and
            (3) any of the statutory or regulatory requirements 
        applicable under the Older Americans Act of 1965 (42 
        U.S.C. 3001 et seq.) to State agencies on aging with 
        respect to activities carried out using funds allotted 
        under section 506(a)(3) of such Act (42 U.S.C. 
        3056d(a)(3)), except for requirements relating to the 
        basic purposes of such Act, wage and labor standards, 
        eligibility of participants in the activities, and 
        standards for agreements.
    (b) Content of Plans.--A workforce flexibility plan 
implemented by a State under subsection (a) shall include 
descriptions of--
            (1)(A) the process by which local areas in the 
        State may submit and obtain approval by the State of 
        applications for waivers of requirements applicable 
        under this title; and
            (B) the requirements described in subparagraph (A) 
        that are likely to be waived by the State under the 
        plan;
            (2) the requirements applicable under sections 8 
        through 10 of the Wagner-Peyser Act that are proposed 
        to be waived, if any;
            (3) the requirements applicable under the Older 
        Americans Act of 1965 that are proposed to be waived, 
        if any;
            (4) the outcomes to be achieved by the waivers 
        described in paragraphs (1) through (3); and
            (5) other measures to be taken to ensure 
        appropriate accountability for Federal funds in 
        connection with the waivers.
    (c) Periods.--The Secretary may approve a workforce 
flexibility plan for a period of not more than 5 years.
    (d) Opportunity for Public Comments.--Prior to submitting a 
workforce flexibility plan to the Secretary for approval, the 
State shall provide to all interested parties and to the 
general public adequate notice and a reasonable opportunity for 
comment on the waiver requests proposed to be implemented 
pursuant to such plan.

SEC. 193. USE OF CERTAIN REAL PROPERTY.

    (a) In General.--Notwithstanding any other provision of 
law, the Governor may authorize a public agency to make 
available, for the use of a one-stop service delivery system 
within the State which is carried out by a consortium of 
entities that includes the public agency, real property in 
which, as of the date of the enactment of the Workforce 
Investment Act of 1998, the Federal Government has acquired 
equity through the use of funds provided under title III of the 
Social Security Act (42 U.S.C. 501 et seq.), section 903(c) of 
such Act (42 U.S.C. 1103(c)), or the Wagner-Peyser Act (29 
U.S.C. 49 et seq.).
    (b) Use of Funds.--Subsequent to the commencement of the 
use of the property described in subsection (a) for the 
functions of a one-stop service delivery system, funds provided 
under the provisions of law described in subsection (a) may 
only be used to acquire further equity in such property, or to 
pay operating and maintenance expenses relating to such 
property in proportion to the extent of the use of such 
property attributable to the activities authorized under such 
provisions of law.

SEC. 194. CONTINUATION OF STATE ACTIVITIES AND POLICIES.

    (a) In General.--Notwithstanding any other provision of 
this title, the Secretary may not deny approval of a State plan 
for a covered State, or an application of a covered State for 
financial assistance, under this title or find a covered State 
(including a State board or Governor), or a local area 
(including a local board or chief elected official) in a 
covered State, in violation of a provision of this title, on 
the basis that--
            (1)(A) the State proposes to allocate or disburse, 
        allocates, or disburses, within the State, funds made 
        available to the State under section 127 or 132 in 
        accordance with the allocation formula for the type of 
        activities involved, or in accordance with a disbursal 
        procedure or process, used by the State under prior 
        consistent State laws; or
            (B) a local board in the State proposes to 
        disburse, or disburses, within the local area, funds 
        made available to a State under section 127 or 132 in 
        accordance with a disbursal procedure or process used 
        by a private industry council under prior consistent 
        State law;
            (2) the State proposes to carry out or carries out 
        a State procedure through which local areas use, as 
        fiscal agents for funds made available to the State 
        under section 127 or 132 and allocated within the 
        State, fiscal agents selected in accordance with a 
        process established under prior consistent State laws;
            (3) the State proposes to carry out or carries out 
        a State procedure through which the local board in the 
        State (or the local boards, the chief elected officials 
        in the State, and the Governor) designate or select the 
        one-stop partners and one-stop operators of the 
        statewide system in the State under prior consistent 
        State laws, in lieu of making the designation, or 
        certification described in section 121 (regardless of 
        the date the one-stop delivery systems involved have 
        been established);
            (4) the State proposes to carry out or carries out 
        a State procedure through which the persons responsible 
        for selecting eligible providers for purposes of 
        subtitle B are permitted to determine that a provider 
        shall not be selected to provide both intake services 
        under section 134(d)(2) and training services under 
        section 134(d)(4), under prior consistent State laws;
            (5) the State proposes to designate or designates a 
        State board, or proposes to assign or assigns functions 
        and roles of the State board (including determining the 
        time periods for development and submission of a State 
        plan required under section 112), for purposes of 
        subtitle B in accordance with prior consistent State 
        laws; or
            (6) a local board in the State proposes to use or 
        carry out, uses, or carries out a local plan (including 
        assigning functions and roles of the local board) for 
        purposes of subtitle B in accordance with the 
        authorities and requirements applicable to local plans 
        and private industry councils under prior consistent 
        State laws.
    (b) Definition.--In this section:
            (1) Covered state.--The term ``covered State'' 
        means a State that enacted State laws described in 
        paragraph (2).
            (2) Prior consistent state laws.--The term ``prior 
        consistent State laws'' means State laws, not 
        inconsistent with the Job Training Partnership Act or 
        any other applicable Federal law, that took effect on 
        September 1, 1993, September 1, 1995, and September 1, 
        1997.

SEC. 195. GENERAL PROGRAM REQUIREMENTS.

    Except as otherwise provided in this title, the following 
conditions are applicable to all programs under this title:
            (1) Each program under this title shall provide 
        employment and training opportunities to those who can 
        benefit from, and who are most in need of, such 
        opportunities. In addition, efforts shall be made to 
        develop programs which contribute to occupational 
        development, upward mobility, development of new 
        careers, and opportunities for nontraditional 
        employment.
            (2) Funds provided under this title shall only be 
        used for activities that are in addition to those that 
        would otherwise be available in the local area in the 
        absence of such funds.
            (3)(A) Any local area may enter into an agreement 
        with another local area (including a local area that is 
        a city or county within the same labor market) to pay 
        or share the cost of educating, training, or placing 
        individuals participating in programs assisted under 
        this title, including the provision of supportive 
        services.
            (B) Such agreement shall be approved by each local 
        board providing guidance to the local area and shall be 
        described in the local plan under section 118.
            (4) On-the-job training contracts under this title 
        shall not be entered into with employers who have 
        received payments under previous contracts and have 
        exhibited a pattern of failing to provide on-the-job 
        training participants with continued long-term 
        employment as regular employees with wages and 
        employment benefits (including health benefits) and 
        working conditions at the same level and to the same 
        extent as other employees working a similar length of 
        time and doing the same type of work.
            (5) No person or organization may charge an 
        individual a fee for the placement or referral of the 
        individual in or to a workforce investment activity 
        under this title.
            (7) The Secretary shall not provide financial 
        assistance for any program under this title that 
        involves political activities.
            (8)(A) Income under any program administered by a 
        public or private nonprofit entity may be retained by 
        such entity only if such income is used to continue to 
        carry out the program.
            (B) Income subject to the requirements of 
        subparagraph (A) shall include--
                    (i) receipts from goods or services 
                (including conferences) provided as a result of 
                activities funded under this title;
                    (ii) funds provided to a service provider 
                under this title that are in excess of the 
                costs associated with the services provided; 
                and
                    (iii) interest income earned on funds 
                received under this title.
            (C) For purposes of this paragraph, each entity 
        receiving financial assistance under this title shall 
        maintain records sufficient to determine the amount of 
        such income received and the purposes for which such 
        income is expended.
            (9)(A) The Secretary shall notify the Governor and 
        the appropriate local board and chief elected official 
        of, and consult with the Governor and such board and 
        official concerning, any activity to be funded by the 
        Secretary under this title within the corresponding 
        State or local area.
            (B) The Governor shall notify the appropriate local 
        board and chief elected official of, and consult with 
        such board and official concerning, any activity to be 
        funded by the Governor under this title within the 
        corresponding local area.
            (10)(A) All education programs for youth supported 
        with funds provided under chapter 4 of subtitle B shall 
        be consistent with applicable State and local 
        educational standards.
            (B) Standards and procedures with respect to 
        awarding academic credit and certifying educational 
        attainment in programs conducted under such chapter 
        shall be consistent with the requirements of applicable 
        State and local law, including regulation.
            (11) No funds available under this title may be 
        used for public service employment except as 
        specifically authorized under this title.
            (12) The Federal requirements governing the title, 
        use, and disposition of real property, equipment, and 
        supplies purchased with funds provided under this title 
        shall be the Federal requirements generally applicable 
        to Federal grants to States and local governments.
            (13) Nothing in this title shall be construed to 
        provide an individual with an entitlement to a service 
        under this title.
            (14) Services, facilities, or equipment funded 
        under this title may be used, as appropriate, on a fee-
        for-service basis, by employers in a local area in 
        order to provide employment and training activities to 
        incumbent workers--
                    (A) when such services, facilities, or 
                equipment are not in use for the provision of 
                services for eligible participants under this 
                title;
                    (B) if such use for incumbent workers would 
                not have an adverse effect on the provision of 
                services to eligible participants under this 
                title; and
                    (C) if the income derived from such fees is 
                used to carry out the programs authorized under 
                this title.

             Subtitle F--Repeals and Conforming Amendments

SEC. 199. REPEALS.

    (a) General Immediate Repeals.--The following provisions 
are repealed:
            (1) Section 204 of the Immigration Reform and 
        Control Act of 1986 (8 U.S.C. 1255a note).
            (2) Title II of Public Law 95-250 (92 Stat. 172).
            (3) The Displaced Homemakers Self-Sufficiency 
        Assistance Act (29 U.S.C. 2301 et seq.).
            (4) Section 211 of the Appalachian Regional 
        Development Act of 1965 (40 U.S.C. App. 211).
            (5) Subtitle C of title VII of the Stewart B. 
        McKinney Homeless Assistance Act (42 U.S.C. 11441 et 
        seq.), except section 738 of such title (42 U.S.C. 
        11448).
            (6) Subchapter I of chapter 421 of title 49, United 
        States Code.
    (b) Subsequent Repeals.--The following provisions are 
repealed:
            (1) Title VII of the Stewart B. McKinney Homeless 
        Assistance Act (42 U.S.C. 11421 et seq.), except 
        subtitle B and section 738 of such title (42 U.S.C. 
        11431 et seq. and 11448).
            (2) The Job Training Partnership Act (29 U.S.C. 
        1501 et seq.).
    (c) Effective Dates.--
            (1) Immediate repeals.--The repeals made by 
        subsection (a) shall take effect on the date of 
        enactment of this Act.
            (2) Subsequent repeals.--
                    (A) Stewart b. mckinney homeless assistance 
                act.--The repeal made by subsection (b)(1) 
                shall take effect on July 1, 1999.
                    (B) Job training partnership act.--The 
                repeal made by subsection (b)(2) shall take 
                effect on July 1, 2000.

SEC. 199A. CONFORMING AMENDMENTS.

    (a) Preparation.--After consultation with the appropriate 
committees of Congress and the Director of the Office of 
Management and Budget, the Secretary shall prepare recommended 
legislation containing technical and conforming amendments to 
reflect the changes made by this subtitle.
    (b) Submission to Congress.--Not later than 6 months after 
the date of enactment of this Act, the Secretary shall submit 
to Congress the recommended legislation referred to under 
subsection (a).
    (c) References.--All references in any other provision of 
law to a provision of the Comprehensive Employment and Training 
Act, or of the Job Training Partnership Act, as the case may 
be, shall be deemed to refer to the corresponding provision of 
this title.

                 TITLE II--ADULT EDUCATION AND LITERACY

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Adult Education and Family 
Literacy Act''.

SEC. 202. PURPOSE.

    It is the purpose of this title to create a partnership 
among the Federal Government, States, and localities to 
provide, on a voluntary basis, adult education and literacy 
services, in order to--
            (1) assist adults to become literate and obtain the 
        knowledge and skills necessary for employment and self-
        sufficiency;
            (2) assist adults who are parents to obtain the 
        educational skills necessary to become full partners in 
        the educational development of their children; and
            (3) assist adults in the completion of a secondary 
        school education.

SEC. 203. DEFINITIONS.

    In this subtitle:
            (1) Adult education.--The term ``adult education'' 
        means services or instruction below the postsecondary 
        level for individuals--
                    (A) who have attained 16 years of age;
                    (B) who are not enrolled or required to be 
                enrolled in secondary school under State law; 
                and
                    (C) who--
                            (i) lack sufficient mastery of 
                        basic educational skills to enable the 
                        individuals to function effectively in 
                        society;
                            (ii) do not have a secondary school 
                        diploma or its recognized equivalent, 
                        and have not achieved an equivalent 
                        level of education; or
                            (iii) are unable to speak, read, or 
                        write the English language.
            (2) Adult education and literacy activities.--The 
        term ``adult education and literacy activities'' means 
        activities described in section 231(b).
            (3) Educational service agency.--The term 
        ``educational service agency'' means a regional public 
        multiservice agency authorized by State statute to 
        develop and manage a service or program, and to provide 
        the service or program to a local educational agency.
            (4) Eligible agency.--The term ``eligible agency'' 
        means the sole entity or agency in a State or an 
        outlying area responsible for administering or 
        supervising policy for adult education and literacy in 
        the State or outlying area, respectively, consistent 
        with the law of the State or outlying area, 
        respectively.
            (5) Eligible provider.--The term ``eligible 
        provider'' means--
                    (A) a local educational agency;
                    (B) a community-based organization of 
                demonstrated effectiveness;
                    (C) a volunteer literacy organization of 
                demonstrated effectiveness;
                    (D) an institution of higher education;
                    (E) a public or private nonprofit agency;
                    (F) a library;
                    (G) a public housing authority;
                    (H) a nonprofit institution that is not 
                described in any of subparagraphs (A) through 
                (G) and has the ability to provide literacy 
                services to adults and families; and
                    (I) a consortium of the agencies, 
                organizations, institutions, libraries, or 
                authorities described in any of subparagraphs 
                (A) through (H).
            (6) English literacy program.--The term ``English 
        literacy program'' means a program of instruction 
        designed to help individuals of limited English 
        proficiency achieve competence in the English language.
            (7) Family literacy services.--The term ``family 
        literacy services'' means services that are of 
        sufficient intensity in terms of hours, and of 
        sufficient duration, to make sustainable changes in a 
        family, and that integrate all of the following 
        activities:
                    (A) Interactive literacy activities between 
                parents and their children.
                    (B) Training for parents regarding how to 
                be the primary teacher for their children and 
                full partners in the education of their 
                children.
                    (C) Parent literacy training that leads to 
                economic self-sufficiency.
                    (D) An age-appropriate education to prepare 
                children for success in school and life 
                experiences.
            (8) Governor.--The term ``Governor'' means the 
        chief executive officer of a State or outlying area.
            (9) Individual with a disability.--
                    (A) In general.--The term ``individual with 
                a disability'' means an individual with any 
                disability (as defined in section 3 of the 
                Americans with Disabilities Act of 1990 (42 
                U.S.C. 12102)).
                    (B) Individuals with disabilities.--The 
                term ``individuals with disabilities'' means 
                more than 1 individual with a disability.
            (10) Individual of limited english proficiency.--
        The term ``individual of limited English proficiency'' 
        means an adult or out-of-school youth who has limited 
        ability in speaking, reading, writing, or understanding 
        the English language, and--
                    (A) whose native language is a language 
                other than English; or
                    (B) who lives in a family or community 
                environment where a language other than English 
                is the dominant language.
            (11) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given the term in section 1201 of the Higher Education 
        Act of 1965 (20 U.S.C. 1141).
            (12) Literacy.--The term ``literacy'' means an 
        individual's ability to read, write, and speak in 
        English, compute, and solve problems, at levels of 
        proficiency necessary to function on the job, in the 
        family of the individual, and in society.
            (13) Local educational agency.--The term ``local 
        educational agency'' has the meaning given the term in 
        section 14101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 8801).
            (14) Outlying area.--The term ``outlying area'' has 
        the meaning given the term in section 101.
            (15) Postsecondary educational institution.--The 
        term ``postsecondary educational institution'' means--
                    (A) an institution of higher education that 
                provides not less than a 2-year program of 
                instruction that is acceptable for credit 
                toward a bachelor's degree;
                    (B) a tribally controlled community 
                college; or
                    (C) a nonprofit educational institution 
                offering certificate or apprenticeship programs 
                at the postsecondary level.
            (16) Secretary.--The term ``Secretary'' means the 
        Secretary of Education.
            (17) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, and the Commonwealth of Puerto Rico.
            (18) Workplace literacy services.--The term 
        ``workplace literacy services'' means literacy services 
        that are offered for the purpose of improving the 
        productivity of the workforce through the improvement 
        of literacy skills.

SEC. 204. HOME SCHOOLS.

    Nothing in this subtitle shall be construed to affect home 
schools, or to compel a parent engaged in home schooling to 
participate in an English literacy program, family literacy 
services, or adult education.

SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this 
subtitle such sums as may be necessary for each of the fiscal 
years 1999 through 2003.

           Subtitle A--Adult Education and Literacy Programs

                     CHAPTER 1--FEDERAL PROVISIONS

SEC. 211. RESERVATION OF FUNDS; GRANTS TO ELIGIBLE AGENCIES; 
                    ALLOTMENTS.

    (a) Reservation of Funds.--From the sum appropriated under 
section 205 for a fiscal year, the Secretary--
            (1) shall reserve 1.5 percent to carry out section 
        242, except that the amount so reserved shall not 
        exceed $8,000,000;
            (2) shall reserve 1.5 percent to carry out section 
        243, except that the amount so reserved shall not 
        exceed $8,000,000; and
            (3) shall make available, to the Secretary of 
        Labor, 1.72 percent for incentive grants under section 
        503.
    (b) Grants to Eligible Agencies.--
            (1) In general.--From the sum appropriated under 
        section 205 and not reserved under subsection (a) for a 
        fiscal year, the Secretary shall award a grant to each 
        eligible agency having a State plan approved under 
        section 224 in an amount equal to the sum of the 
        initial allotment under subsection (c)(1) and the 
        additional allotment under subsection (c)(2) for the 
        eligible agency for the fiscal year, subject to 
        subsections (f) and (g), to enable the eligible agency 
        to carry out the activities assisted under this 
        subtitle.
            (2) Purpose of grants.--The Secretary may award a 
        grant under paragraph (1) only if the eligible entity 
        involved agrees to expend the grant for adult education 
        and literacy activities in accordance with the 
        provisions of this subtitle.
    (c) Allotments.--
            (1) Initial allotments.--From the sum appropriated 
        under section 205 and not reserved under subsection (a) 
        for a fiscal year, the Secretary shall allot to each 
        eligible agency having a State plan approved under 
        section 224(f)--
                    (A) $100,000, in the case of an eligible 
                agency serving an outlying area.
                    (B) $250,000, in the case of any other 
                eligible agency.
            (2) Additional allotments.--From the sum 
        appropriated under section 205, not reserved under 
        subsection (a), and not allotted under paragraph (1), 
        for a fiscal year, the Secretary shall allot to each 
        eligible agency that receives an initial allotment 
        under paragraph (1) an additional amount that bears the 
        same relationship to such sum as the number of 
        qualifying adults in the State or outlying area served 
        by the eligible agency bears to the number of such 
        adults in all States and outlying areas.
    (d) Qualifying Adult.--For the purpose of subsection 
(c)(2), the term ``qualifying adult'' means an adult who--
            (1) is at least 16 years of age, but less than 61 
        years of age;
            (2) is beyond the age of compulsory school 
        attendance under the law of the State or outlying area;
            (3) does not have a secondary school diploma or its 
        recognized equivalent; and
            (4) is not enrolled in secondary school.
    (e) Special Rule.--
            (1) In general.--From amounts made available under 
        subsection (c) for the Republic of the Marshall 
        Islands, the Federated States of Micronesia, and the 
        Republic of Palau, the Secretary shall award grants to 
        Guam, American Samoa, the Commonwealth of the Northern 
        Mariana Islands, the Republic of the Marshall Islands, 
        the Federated States of Micronesia, or the Republic of 
        Palau to carry out activities described in this 
        subtitle in accordance with the provisions of this 
        subtitle that the Secretary determines are not 
        inconsistent with this subsection.
            (2) Award basis.--The Secretary shall award grants 
        pursuant to paragraph (1) on a competitive basis and 
        pursuant to recommendations from the Pacific Region 
        Educational Laboratory in Honolulu, Hawaii.
            (3) Termination of eligibility.--Notwithstanding 
        any other provision of law, the Republic of the 
        Marshall Islands, the Federated States of Micronesia, 
        and the Republic of Palau shall not receive any funds 
        under this subtitle for any fiscal year that begins 
        after September 30, 2001.
            (4) Administrative costs.--The Secretary may 
        provide not more than 5 percent of the funds made 
        available for grants under this subsection to pay the 
        administrative costs of the Pacific Region Educational 
        Laboratory regarding activities assisted under this 
        subsection.
    (f) Hold-Harmless.--
            (1) In general.--Notwithstanding subsection (c)--
                    (A) for fiscal year 1999, no eligible 
                agency shall receive an allotment under this 
                subtitle that is less than 90 percent of the 
                payments made to the State or outlying area of 
                the eligible agency for fiscal year 1998 for 
                programs for which funds were authorized to be 
                appropriated under section 313 of the Adult 
                Education Act (as such Act was in effect on the 
                day before the date of the enactment of the 
                Workforce Investment Act of 1998); and
                    (B) for fiscal year 2000 and each 
                succeeding fiscal year, no eligible agency 
                shall receive an allotment under this subtitle 
                that is less than 90 percent of the allotment 
                the eligible agency received for the preceding 
                fiscal year under this subtitle.
            (2) Ratable reduction.--If for any fiscal year the 
        amount available for allotment under this subtitle is 
        insufficient to satisfy the provisions of paragraph 
        (1), the Secretary shall ratably reduce the payments to 
        all eligible agencies, as necessary.
    (g) Reallotment.--The portion of any eligible agency's 
allotment under this subtitle for a fiscal year that the 
Secretary determines will not be required for the period such 
allotment is available for carrying out activities under this 
subtitle, shall be available for reallotment from time to time, 
on such dates during such period as the Secretary shall fix, to 
other eligible agencies in proportion to the original 
allotments to such agencies under this subtitle for such year.

SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, comprised of 
the activities described in this section, to assess the 
effectiveness of eligible agencies in achieving continuous 
improvement of adult education and literacy activities funded 
under this subtitle, in order to optimize the return on 
investment of Federal funds in adult education and literacy 
activities.
    (b) Eligible Agency Performance Measures.--
            (1) In general.--For each eligible agency, the 
        eligible agency performance measures shall consist of--
                    (A)(i) the core indicators of performance 
                described in paragraph (2)(A); and
                    (ii) additional indicators of performance 
                (if any) identified by the eligible agency 
                under paragraph (2)(B); and
                    (B) an eligible agency adjusted level of 
                performance for each indicator described in 
                subparagraph (A).
            (2) Indicators of performance.--
                    (A) Core indicators of performance.--The 
                core indicators of performance shall include 
                the following:
                            (i) Demonstrated improvements in 
                        literacy skill levels in reading, 
                        writing and speaking the English 
                        language, numeracy, problem-solving, 
                        English language acquisition, and other 
                        literacy skills.
                            (ii) Placement in, retention in, or 
                        completion of, postsecondary education, 
                        training, unsubsidized employment or 
                        career advancement.
                            (iii) Receipt of a secondary school 
                        diploma or its recognized equivalent.
                    (B) Additional indicators.--An eligible 
                agency may identify in the State plan 
                additional indicators for adult education and 
                literacy activities authorized under this 
                subtitle.
            (3) Levels of performance.--
                    (A) Eligible agency adjusted levels of 
                performance for core indicators.--
                            (i) In general.--For each eligible 
                        agency submitting a State plan, there 
                        shall be established, in accordance 
                        with this subparagraph, levels of 
                        performance for each of the core 
                        indicators of performance described in 
                        paragraph (2)(A) for adult education 
                        and literacy activities authorized 
                        under this subtitle. The levels of 
                        performance established under this 
                        subparagraph shall, at a minimum--
                                    (I) be expressed in an 
                                objective, quantifiable, and 
                                measurable form; and
                                    (II) show the progress of 
                                the eligible agency toward 
                                continuously improving in 
                                performance.
                            (ii) Identification in state 
                        plan.--Each eligible agency shall 
                        identify, in the State plan submitted 
                        under section 224, expected levels of 
                        performance for each of the core 
                        indicators of performance for the first 
                        3 program years covered by the State 
                        plan.
                            (iii) Agreement on eligible agency 
                        adjusted levels of performance for 
                        first 3 years.--In order to ensure an 
                        optimal return on the investment of 
                        Federal funds in adult education and 
                        literacy activities authorized under 
                        this subtitle, the Secretary and each 
                        eligible agency shall reach agreement 
                        on levels of performance for each of 
                        the core indicators of performance, for 
                        the first 3 program years covered by 
                        the State plan, taking into account the 
                        levels identified in the State plan 
                        under clause (ii) and the factors 
                        described in clause (iv). The levels 
                        agreed to under this clause shall be 
                        considered to be the eligible agency 
                        adjusted levels of performance for the 
                        eligible agency for such years and 
                        shall be incorporated into the State 
                        plan prior to the approval of such 
                        plan.
                            (iv) Factors.--The agreement 
                        described in clause (iii) or (v) shall 
                        take into account--
                                    (I) how the levels involved 
                                compare with the eligible 
                                agency adjusted levels of 
                                performance established for 
                                other eligible agencies, taking 
                                into account factors including 
                                the characteristics of 
                                participants when the 
                                participants entered the 
                                program, and the services or 
                                instruction to be provided; and
                                    (II) the extent to which 
                                such levels involved promote 
                                continuous improvement in 
                                performance on the performance 
                                measures by such eligible 
                                agency and ensure optimal 
                                return on the investment of 
                                Federal funds.
                            (v) Agreement on eligible agency 
                        adjusted levels of performance for 4th 
                        and 5th years.--Prior to the fourth 
                        program year covered by the State plan, 
                        the Secretary and each eligible agency 
                        shall reach agreement on levels of 
                        performance for each of the core 
                        indicators of performance for the 
                        fourth and fifth program years covered 
                        by the State plan, taking into account 
                        the factors described in clause (iv). 
                        The levels agreed to under this clause 
                        shall be considered to be the eligible 
                        agency adjusted levels of performance 
                        for the eligible agency for such years 
                        and shall be incorporated into the 
                        State plan.
                            (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause 
                        (iv)(II), the eligible agency may 
                        request that the eligible agency 
                        adjusted levels of performance agreed 
                        to under clause (iii) or (v) be 
                        revised. The Secretary, after 
                        collaboration with the representatives 
                        described in section 136(j), shall 
                        issue objective criteria and methods 
                        for making such revisions.
                    (B) Levels of performance for additional 
                indicators.--The eligible agency may identify, 
                in the State plan, eligible agency levels of 
                performance for each of the additional 
                indicators described in paragraph (2)(B). Such 
                levels shall be considered to be eligible 
                agency adjusted levels of performance for 
                purposes of this subtitle.
    (c) Report.--
            (1) In general.--Each eligible agency that receives 
        a grant under section 211(b) shall annually prepare and 
        submit to the Secretary a report on the progress of the 
        eligible agency in achieving eligible agency 
        performance measures, including information on the 
        levels of performance achieved by the eligible agency 
        with respect to the core indicators of performance.
            (2) Information dissemination.--The Secretary--
                    (A) shall make the information contained in 
                such reports available to the general public 
                through publication and other appropriate 
                methods;
                    (B) shall disseminate State-by-State 
                comparisons of the information; and
                    (C) shall provide the appropriate 
                committees of Congress with copies of such 
                reports.

                      CHAPTER 2--STATE PROVISIONS

SEC. 221. STATE ADMINISTRATION.

    Each eligible agency shall be responsible for the State or 
outlying area administration of activities under this subtitle, 
including--
            (1) the development, submission, and implementation 
        of the State plan;
            (2) consultation with other appropriate agencies, 
        groups, and individuals that are involved in, or 
        interested in, the development and implementation of 
        activities assisted under this subtitle; and
            (3) coordination and nonduplication with other 
        Federal and State education, training, corrections, 
        public housing, and social service programs.

SEC. 222. STATE DISTRIBUTION OF FUNDS; MATCHING REQUIREMENT.

    (a) State Distribution of Funds.--Each eligible agency 
receiving a grant under this subtitle for a fiscal year--
            (1) shall use not less than 82.5 percent of the 
        grant funds to award grants and contracts under section 
        231 and to carry out section 225, of which not more 
        than 10 percent of the 82.5 percent shall be available 
        to carry out section 225;
            (2) shall use not more than 12.5 percent of the 
        grant funds to carry out State leadership activities 
        under section 223; and
            (3) shall use not more than 5 percent of the grant 
        funds, or $65,000, whichever is greater, for the 
        administrative expenses of the eligible agency.
    (b) Matching Requirement.--
            (1) In general.--In order to receive a grant from 
        the Secretary under section 211(b) each eligible agency 
        shall provide, for the costs to be incurred by the 
        eligible agency in carrying out the adult education and 
        literacy activities for which the grant is awarded, a 
        non-Federal contribution in an amount equal to--
                    (A) in the case of an eligible agency 
                serving an outlying area, 12 percent of the 
                total amount of funds expended for adult 
                education and literacy activities in the 
                outlying area, except that the Secretary may 
                decrease the amount of funds required under 
                this subparagraph for an eligible agency; and
                    (B) in the case of an eligible agency 
                serving a State, 25 percent of the total amount 
                of funds expended for adult education and 
                literacy activities in the State.
            (2) Non-Federal contribution.--An eligible agency's 
        non-Federal contribution required under paragraph (1) 
        may be provided in cash or in kind, fairly evaluated, 
        and shall include only non-Federal funds that are used 
        for adult education and literacy activities in a manner 
        that is consistent with the purpose of this subtitle.

SEC. 223. STATE LEADERSHIP ACTIVITIES.

    (a) In General.--Each eligible agency shall use funds made 
available under section 222(a)(2) for 1 or more of the 
following adult education and literacy activities:
            (1) The establishment or operation of professional 
        development programs to improve the quality of 
        instruction provided pursuant to local activities 
        required under section 231(b), including instruction 
        incorporating phonemic awareness, systematic phonics, 
        fluency, and reading comprehension, and instruction 
        provided by volunteers or by personnel of a State or 
        outlying area.
            (2) The provision of technical assistance to 
        eligible providers of adult education and literacy 
        activities.
            (3) The provision of technology assistance, 
        including staff training, to eligible providers of 
        adult education and literacy activities to enable the 
        eligible providers to improve the quality of such 
        activities.
            (4) The support of State or regional networks of 
        literacy resource centers.
            (5) The monitoring and evaluation of the quality 
        of, and the improvement in, adult education and 
        literacy activities.
            (6) Incentives for--
                    (A) program coordination and integration; 
                and
                    (B) performance awards.
            (7) Developing and disseminating curricula, 
        including curricula incorporating phonemic awareness, 
        systematic phonics, fluency, and reading comprehension.
            (8) Other activities of statewide significance that 
        promote the purpose of this title.
            (9) Coordination with existing support services, 
        such as transportation, child care, and other 
        assistance designed to increase rates of enrollment in, 
        and successful completion of, adult education and 
        literacy activities, to adults enrolled in such 
        activities.
            (10) Integration of literacy instruction and 
        occupational skill training, and promoting linkages 
        with employers.
            (11) Linkages with postsecondary educational 
        institutions.
    (b) Collaboration.--In carrying out this section, eligible 
agencies shall collaborate where possible, and avoid 
duplicating efforts, in order to maximize the impact of the 
activities described in subsection (a).
    (c) State-Imposed Requirements.--Whenever a State or 
outlying area implements any rule or policy relating to the 
administration or operation of a program authorized under this 
subtitle that has the effect of imposing a requirement that is 
not imposed under Federal law (including any rule or policy 
based on a State or outlying area interpretation of a Federal 
statute, regulation, or guideline), the State or outlying area 
shall identify, to eligible providers, the rule or policy as 
being State- or outlying area-imposed.

SEC. 224. STATE PLAN.

    (a) 5-Year Plans.--
            (1) In general.--Each eligible agency desiring a 
        grant under this subtitle for any fiscal year shall 
        submit to, or have on file with, the Secretary a 5-year 
        State plan.
            (2) Comprehensive plan or application.--The 
        eligible agency may submit the State plan as part of a 
        comprehensive plan or application for Federal education 
        assistance.
    (b) Plan Contents.--In developing the State plan, and any 
revisions to the State plan, the eligible agency shall include 
in the State plan or revisions--
            (1) an objective assessment of the needs of 
        individuals in the State or outlying area for adult 
        education and literacy activities, including 
        individuals most in need or hardest to serve;
            (2) a description of the adult education and 
        literacy activities that will be carried out with any 
        funds received under this subtitle;
            (3) a description of how the eligible agency will 
        evaluate annually the effectiveness of the adult 
        education and literacy activities based on the 
        performance measures described in section 212;
            (4) a description of the performance measures 
        described in section 212 and how such performance 
        measures will ensure the improvement of adult education 
        and literacy activities in the State or outlying area;
            (5) an assurance that the eligible agency will 
        award not less than 1 grant under this subtitle to an 
        eligible provider who offers flexible schedules and 
        necessary support services (such as child care and 
        transportation) to enable individuals, including 
        individuals with disabilities, or individuals with 
        other special needs, to participate in adult education 
        and literacy activities, which eligible provider shall 
        attempt to coordinate with support services that are 
        not provided under this subtitle prior to using funds 
        for adult education and literacy activities provided 
        under this subtitle for support services;
            (6) an assurance that the funds received under this 
        subtitle will not be expended for any purpose other 
        than for activities under this subtitle;
            (7) a description of how the eligible agency will 
        fund local activities in accordance with the 
        considerations described in section 231(e);
            (8) an assurance that the eligible agency will 
        expend the funds under this subtitle only in a manner 
        consistent with fiscal requirements in section 241;
            (9) a description of the process that will be used 
        for public participation and comment with respect to 
        the State plan;
            (10) a description of how the eligible agency will 
        develop program strategies for populations that 
        include, at a minimum--
                    (A) low-income students;
                    (B) individuals with disabilities;
                    (C) single parents and displaced 
                homemakers; and
                    (D) individuals with multiple barriers to 
                educational enhancement, including individuals 
                with limited English proficiency;
            (11) a description of how the adult education and 
        literacy activities that will be carried out with any 
        funds received under this subtitle will be integrated 
        with other adult education, career development, and 
        employment and training activities in the State or 
        outlying area served by the eligible agency; and
            (12) a description of the steps the eligible agency 
        will take to ensure direct and equitable access, as 
        required in section 231(c)(1).
    (c) Plan Revisions.--When changes in conditions or other 
factors require substantial revisions to an approved State 
plan, the eligible agency shall submit the revisions to the 
State plan to the Secretary.
    (d) Consultation.--The eligible agency shall--
            (1) submit the State plan, and any revisions to the 
        State plan, to the Governor of the State or outlying 
        area for review and comment; and
            (2) ensure that any comments by the Governor 
        regarding the State plan, and any revision to the State 
        plan, are submitted to the Secretary.
    (e) Peer Review.--The Secretary shall establish a peer 
review process to make recommendations regarding the approval 
of State plans.
    (f) Plan Approval.--A State plan submitted to the Secretary 
shall be approved by the Secretary unless the Secretary makes a 
written determination, within 90 days after receiving the plan, 
that the plan is inconsistent with the specific provisions of 
this subtitle.

SEC. 225. PROGRAMS FOR CORRECTIONS EDUCATION AND OTHER 
                    INSTITUTIONALIZED INDIVIDUALS.

    (a) Program Authorized.--From funds made available under 
section 222(a)(1) for a fiscal year, each eligible agency shall 
carry out corrections education or education for other 
institutionalized individuals.
    (b) Uses of Funds.--The funds described in subsection (a) 
shall be used for the cost of educational programs for criminal 
offenders in correctional institutions and for other 
institutionalized individuals, including academic programs 
for--
            (1) basic education;
            (2) special education programs as determined by the 
        eligible agency;
            (3) English literacy programs; and
            (4) secondary school credit programs.
    (c) Priority.--Each eligible agency that is using 
assistance provided under this section to carry out a program 
for criminal offenders in a correctional institution shall give 
priority to serving individuals who are likely to leave the 
correctional institution with 5 years of participation in the 
program.
    (d) Definition of Criminal Offender.--
            (1) Criminal offender.--The term ``criminal 
        offender'' means any individual who is charged with or 
        convicted of any criminal offense.
            (2) Correctional institution.--The term 
        ``correctional institution'' means any--
                    (A) prison;
                    (B) jail;
                    (C) reformatory;
                    (D) work farm;
                    (E) detention center; or
                    (F) halfway house, community-based 
                rehabilitation center, or any other similar 
                institution designed for the confinement or 
                rehabilitation of criminal offenders.

                      CHAPTER 3--LOCAL PROVISIONS

SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

    (a) Grants and Contracts.--From grant funds made available 
under section 211(b), each eligible agency shall award 
multiyear grants or contracts, on a competitive basis, to 
eligible providers within the State or outlying area to enable 
the eligible providers to develop, implement, and improve adult 
education and literacy activities within the State.
    (b) Required Local Activities.--The eligible agency shall 
require that each eligible provider receiving a grant or 
contract under subsection (a) use the grant or contract to 
establish or operate 1 or more programs that provide services 
or instruction in 1 or more of the following categories:
            (1) Adult education and literacy services, 
        including workplace literacy services.
            (2) Family literacy services.
            (3) English literacy programs.
    (c) Direct and Equitable Access; Same Process.--Each 
eligible agency receiving funds under this subtitle shall 
ensure that--
            (1) all eligible providers have direct and 
        equitable access to apply for grants or contracts under 
        this section; and
            (2) the same grant or contract announcement process 
        and application process is used for all eligible 
        providers in the State or outlying area.
    (d) Special Rule.--Each eligible agency awarding a grant or 
contract under this section shall not use any funds made 
available under this subtitle for adult education and literacy 
activities for the purpose of supporting or providing programs, 
services, or activities for individuals who are not individuals 
described in subparagraphs (A) and (B) of section 203(1), 
except that such agency may use such funds for such purpose if 
such programs, services, or activities are related to family 
literacy services. In providing family literacy services under 
this subtitle, an eligible provider shall attempt to coordinate 
with programs and services that are not assisted under this 
subtitle prior to using funds for adult education and literacy 
activities under this subtitle for activities other than adult 
education activities.
    (e) Considerations.--In awarding grants or contracts under 
this section, the eligible agency shall consider--
            (1) the degree to which the eligible provider will 
        establish measurable goals for participant outcomes;
            (2) the past effectiveness of an eligible provider 
        in improving the literacy skills of adults and 
        families, and, after the 1-year period beginning with 
        the adoption of an eligible agency's performance 
        measures under section 212, the success of an eligible 
        provider receiving funding under this subtitle in 
        meeting or exceeding such performance measures, 
        especially with respect to those adults with the lowest 
        levels of literacy;
            (3) the commitment of the eligible provider to 
        serve individuals in the community who are most in need 
        of literacy services, including individuals who are 
        low-income or have minimal literacy skills;
            (4) whether or not the program--
                    (A) is of sufficient intensity and duration 
                for participants to achieve substantial 
                learning gains; and
                    (B) uses instructional practices, such as 
                phonemic awareness, systematic phonics, 
                fluency, and reading comprehension that 
                research has proven to be effective in teaching 
                individuals to read;
            (5) whether the activities are built on a strong 
        foundation of research and effective educational 
        practice;
            (6) whether the activities effectively employ 
        advances in technology, as appropriate, including the 
        use of computers;
            (7) whether the activities provide learning in real 
        life contexts to ensure that an individual has the 
        skills needed to compete in the workplace and exercise 
        the rights and responsibilities of citizenship;
            (8) whether the activities are staffed by well-
        trained instructors, counselors, and administrators;
            (9) whether the activities coordinate with other 
        available resources in the community, such as by 
        establishing strong links with elementary schools and 
        secondary schools, postsecondary educational 
        institutions, one-stop centers, job training programs, 
        and social service agencies;
            (10) whether the activities offer flexible 
        schedules and support services (such as child care and 
        transportation) that are necessary to enable 
        individuals, including individuals with disabilities or 
        other special needs, to attend and complete programs;
            (11) whether the activities maintain a high-quality 
        information management system that has the capacity to 
        report participant outcomes and to monitor program 
        performance against the eligible agency performance 
        measures; and
            (12) whether the local communities have a 
        demonstrated need for additional English literacy 
        programs.

SEC. 232. LOCAL APPLICATION.

    Each eligible provider desiring a grant or contract under 
this subtitle shall submit an application to the eligible 
agency containing such information and assurances as the 
eligible agency may require, including--
            (1) a description of how funds awarded under this 
        subtitle will be spent; and
            (2) a description of any cooperative arrangements 
        the eligible provider has with other agencies, 
        institutions, or organizations for the delivery of 
        adult education and literacy activities.

SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

    (a) In General.--Subject to subsection (b), of the amount 
that is made available under this subtitle to an eligible 
provider--
            (1) not less than 95 percent shall be expended for 
        carrying out adult education and literacy activities; 
        and
            (2) the remaining amount, not to exceed 5 percent, 
        shall be used for planning, administration, personnel 
        development, and interagency coordination.
    (b) Special Rule.--In cases where the cost limits described 
in subsection (a) are too restrictive to allow for adequate 
planning, administration, personnel development, and 
interagency coordination, the eligible provider shall negotiate 
with the eligible agency in order to determine an adequate 
level of funds to be used for noninstructional purposes.

                     CHAPTER 4--GENERAL PROVISIONS

SEC. 241. ADMINISTRATIVE PROVISIONS.

    (a) Supplement Not Supplant.--Funds made available for 
adult education and literacy activities under this subtitle 
shall supplement and not supplant other State or local public 
funds expended for adult education and literacy activities.
    (b) Maintenance of Effort.--
            (1) In general.--
                    (A) Determination.--An eligible agency may 
                receive funds under this subtitle for any 
                fiscal year if the Secretary finds that the 
                fiscal effort per student or the aggregate 
                expenditures of such eligible agency for adult 
                education and literacy activities, in the 
                second preceding fiscal year, was not less than 
                90 percent of the fiscal effort per student or 
                the aggregate expenditures of such eligible 
                agency for adult education and literacy 
                activities, in the third preceding fiscal year.
                    (B) Proportionate reduction.--Subject to 
                paragraphs (2), (3), and (4), for any fiscal 
                year with respect to which the Secretary 
                determines under subparagraph (A) that the 
                fiscal effort or the aggregate expenditures of 
                an eligible agency for the preceding program 
                year were less than such effort or expenditures 
                for the second preceding program year, the 
                Secretary--
                            (i) shall determine the percentage 
                        decreases in such effort or in such 
                        expenditures; and
                            (ii) shall decrease the payment 
                        made under this subtitle for such 
                        program year to the agency for adult 
                        education and literacy activities by 
                        the lesser of such percentages.
            (2) Computation.--In computing the fiscal effort 
        and aggregate expenditures under paragraph (1), the 
        Secretary shall exclude capital expenditures and 
        special one-time project costs.
            (3) Decrease in federal support.--If the amount 
        made available for adult education and literacy 
        activities under this subtitle for a fiscal year is 
        less than the amount made available for adult education 
        and literacy activities under this subtitle for the 
        preceding fiscal year, then the fiscal effort per 
        student and the aggregate expenditures of an eligible 
        agency required in order to avoid a reduction under 
        paragraph (1)(B) shall be decreased by the same 
        percentage as the percentage decrease in the amount so 
        made available.
            (4) Waiver.--The Secretary may waive the 
        requirements of this subsection for 1 fiscal year only, 
        if the Secretary determines that a waiver would be 
        equitable due to exceptional or uncontrollable 
        circumstances, such as a natural disaster or an 
        unforeseen and precipitous decline in the financial 
        resources of the State or outlying area of the eligible 
        agency. If the Secretary grants a waiver under the 
        preceding sentence for a fiscal year, the level of 
        effort required under paragraph (1) shall not be 
        reduced in the subsequent fiscal year because of the 
        waiver.

SEC. 242. NATIONAL INSTITUTE FOR LITERACY.

    (a) Purpose.--The purpose of this section is to establish a 
National Institute for Literacy that--
            (1) provides national leadership regarding 
        literacy;
            (2) coordinates literacy services and policy; and
            (3) serves as a national resource for adult 
        education and literacy programs by--
                    (A) providing the best and most current 
                information available, including the work of 
                the National Institute of Child Health and 
                Human Development in the area of phonemic 
                awareness, systematic phonics, fluency, and 
                reading comprehension, to all recipients of 
                Federal assistance that focuses on reading, 
                including programs under titles I and VII of 
                the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 6301 et seq. and 7401 et seq.), 
                the Head Start Act (42 U.S.C. 9831 et seq.), 
                the Individuals with Disabilities Education Act 
                (20 U.S.C. 1400 et seq.), and this Act; and
                    (B) supporting the creation of new ways to 
                offer services of proven effectiveness.
    (b) Establishment.--
            (1) In general.--There is established the National 
        Institute for Literacy (in this section referred to as 
        the ``Institute''). The Institute shall be administered 
        under the terms of an interagency agreement entered 
        into by the Secretary of Education with the Secretary 
        of Labor and the Secretary of Health and Human Services 
        (in this section referred to as the ``Interagency 
        Group''). The Interagency Group may include in the 
        Institute any research and development center, 
        institute, or clearinghouse established within the 
        Department of Education, the Department of Labor, or 
        the Department of Health and Human Services the purpose 
        of which is determined by the Interagency Group to be 
        related to the purpose of the Institute.
            (2) Offices.--The Institute shall have offices 
        separate from the offices of the Department of 
        Education, the Department of Labor, and the Department 
        of Health and Human Services.
            (3) Recommendations.--The Interagency Group shall 
        consider the recommendations of the National Institute 
        for Literacy Advisory Board (in this section referred 
        to as the ``Board'') established under subsection (e) 
        in planning the goals of the Institute and in the 
        implementation of any programs to achieve the goals. If 
        the Board's recommendations are not followed, the 
        Interagency Group shall provide a written explanation 
        to the Board concerning actions the Interagency Group 
        takes that are inconsistent with the Board's 
        recommendations, including the reasons for not 
        following the Board's recommendations with respect to 
        the actions. The Board may also request a meeting of 
        the Interagency Group to discuss the Board's 
        recommendations.
            (4) Daily operations.--The daily operations of the 
        Institute shall be administered by the Director of the 
        Institute.
    (c) Duties.--
            (1) In general.--In order to provide leadership for 
        the improvement and expansion of the system for 
        delivery of literacy services, the Institute is 
        authorized--
                    (A) to establish a national electronic data 
                base of information that disseminates 
                information to the broadest possible audience 
                within the literacy and basic skills field, and 
                that includes--
                            (i) effective practices in the 
                        provision of literacy and basic skills 
                        instruction, including instruction in 
                        phonemic awareness, systematic phonics, 
                        fluency, and reading comprehension, and 
                        the integration of literacy and basic 
                        skills instruction with occupational 
                        skills training;
                            (ii) public and private literacy 
                        and basic skills programs, and Federal, 
                        State, and local policies, affecting 
                        the provision of literacy services at 
                        the national, State, and local levels;
                            (iii) opportunities for technical 
                        assistance, meetings, conferences, and 
                        other opportunities that lead to the 
                        improvement of literacy and basic 
                        skills services; and
                            (iv) a communication network for 
                        literacy programs, providers, social 
                        service agencies, and students;
                    (B) to coordinate support for the provision 
                of literacy and basic skills services across 
                Federal agencies and at the State and local 
                levels;
                    (C) to coordinate the support of reliable 
                and replicable research and development on 
                literacy and basic skills in families and 
                adults across Federal agencies, especially with 
                the Office of Educational Research and 
                Improvement in the Department of Education, and 
                to carry out basic and applied research and 
                development on topics that are not being 
                investigated by other organizations or 
                agencies, such as the special literacy needs of 
                individuals with learning disabilities;
                    (D) to collect and disseminate information 
                on methods of advancing literacy that show 
                great promise, including phonemic awareness, 
                systematic phonics, fluency, and reading 
                comprehension based on the work of the National 
                Institute of Child Health and Human 
                Development;
                    (E) to provide policy and technical 
                assistance to Federal, State, and local 
                entities for the improvement of policy and 
                programs relating to literacy;
                    (F) to fund a network of State or regional 
                adult literacy resource centers to assist State 
                and local public and private nonprofit efforts 
                to improve literacy by--
                            (i) encouraging the coordination of 
                        literacy services;
                            (ii) enhancing the capacity of 
                        State and local organizations to 
                        provide literacy services; and
                            (iii) serving as a link between the 
                        Institute and providers of adult 
                        education and literacy activities for 
                        the purpose of sharing information, 
                        data, research, expertise, and literacy 
                        resources;
                    (G) to coordinate and share information 
                with national organizations and associations 
                that are interested in literacy and workforce 
                investment activities;
                    (H) to advise Congress and Federal 
                departments and agencies regarding the 
                development of policy with respect to literacy 
                and basic skills; and
                    (I) to undertake other activities that lead 
                to the improvement of the Nation's literacy 
                delivery system and that complement other such 
                efforts being undertaken by public and private 
                agencies and organizations.
            (2) Grants, contracts, and cooperative 
        agreements.--The Institute may award grants to, or 
        enter into contracts or cooperative agreements with, 
        individuals, public or private institutions, agencies, 
        organizations, or consortia of such institutions, 
        agencies, or organizations to carry out the activities 
        of the Institute.
    (d) Literacy Leadership.--
            (1) In general.--The Institute, in consultation 
        with the Board, may award fellowships, with such 
        stipends and allowances that the Director considers 
        necessary, to outstanding individuals pursuing careers 
        in adult education or literacy in the areas of 
        instruction, management, research, or innovation.
            (2) Fellowships.--Fellowships awarded under this 
        subsection shall be used, under the auspices of the 
        Institute, to engage in research, education, training, 
        technical assistance, or other activities to advance 
        the field of adult education or literacy, including the 
        training of volunteer literacy providers at the 
        national, State, or local level.
            (3) Interns and volunteers.--The Institute, in 
        consultation with the Board, may award paid and unpaid 
        internships to individuals seeking to assist the 
        Institute in carrying out its mission. Notwithstanding 
        section 1342 of title 31, United States Code, the 
        Institute may accept and use voluntary and 
        uncompensated services as the Institute determines 
        necessary.
    (e) National Institute for Literacy Advisory Board.--
            (1) Establishment.--
                    (A) In general.--There shall be a National 
                Institute for Literacy Advisory Board (in this 
                section referred to as the ``Board''), which 
                shall consist of 10 individuals appointed by 
                the President with the advice and consent of 
                the Senate.
                    (B) Composition.--The Board shall be 
                comprised of individuals who are not otherwise 
                officers or employees of the Federal Government 
                and who are representative of entities such 
                as--
                            (i) literacy organizations and 
                        providers of literacy services, 
                        including nonprofit providers, 
                        providers of English literacy programs 
                        and services, social service 
                        organizations, and eligible providers 
                        receiving assistance under this 
                        subtitle;
                            (ii) businesses that have 
                        demonstrated interest in literacy 
                        programs;
                            (iii) literacy students, including 
                        literacy students with disabilities;
                            (iv) experts in the area of 
                        literacy research;
                            (v) State and local governments;
                            (vi) State Directors of adult 
                        education; and
                            (vii) representatives of employees, 
                        including representatives of labor 
                        organizations.
            (2) Duties.--The Board shall--
                    (A) make recommendations concerning the 
                appointment of the Director and staff of the 
                Institute;
                    (B) provide independent advice on the 
                operation of the Institute; and
                    (C) receive reports from the Interagency 
                Group and the Director.
            (3) Federal advisory committee act.--Except as 
        otherwise provided, the Board established by this 
        subsection shall be subject to the provisions of the 
        Federal Advisory Committee Act (5 U.S.C. App.).
            (4) Appointments.--
                    (A) In general.--Each member of the Board 
                shall be appointed for a term of 3 years, 
                except that the initial terms for members may 
                be 1, 2, or 3 years in order to establish a 
                rotation in which \1/3\ of the members are 
                selected each year. Any such member may be 
                appointed for not more than 2 consecutive 
                terms.
                    (B) Vacancies.--Any member appointed to 
                fill a vacancy occurring before the expiration 
                of the term for which the member's predecessor 
                was appointed shall be appointed only for the 
                remainder of that term. A member may serve 
                after the expiration of that member's term 
                until a successor has taken office.
            (5) Quorum.--A majority of the members of the Board 
        shall constitute a quorum but a lesser number may hold 
        hearings. Any recommendation of the Board may be passed 
        only by a majority of the Board's members present.
            (6) Election of officers.--The Chairperson and Vice 
        Chairperson of the Board shall be elected by the 
        members of the Board. The term of office of the 
        Chairperson and Vice Chairperson shall be 2 years.
            (7) Meetings.--The Board shall meet at the call of 
        the Chairperson or a majority of the members of the 
        Board.
    (f) Gifts, Bequests, and Devises.--
            (1) In general.--The Institute may accept, 
        administer, and use gifts or donations of services, 
        money, or property, whether real or personal, tangible 
        or intangible.
            (2) Rules.--The Board shall establish written rules 
        setting forth the criteria to be used by the Institute 
        in determining whether the acceptance of contributions 
        of services, money, or property whether real or 
        personal, tangible or intangible, would reflect 
        unfavorably upon the ability of the Institute or any 
        employee to carry out the responsibilities of the 
        Institute or employee, or official duties, in a fair 
        and objective manner, or would compromise the integrity 
        or the appearance of the integrity of the Institute's 
        programs or any official involved in those programs.
    (g) Mails.--The Board and the Institute may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the United States.
    (h) Staff.--The Interagency Group, after considering 
recommendations made by the Board, shall appoint and fix the 
pay of a Director.
    (i) Applicability of Certain Civil Service Laws.--The 
Director and staff of the Institute may be appointed without 
regard to the provisions of title 5, United States Code, 
governing appointments in the competitive service, and may be 
paid without regard to the provisions of chapter 51 and 
subchapter III of chapter 53 of that title relating to 
classification and General Schedule pay rates, except that an 
individual so appointed may not receive pay in excess of the 
annual rate of basic pay payable for level IV of the Executive 
Schedule.
    (j) Experts and Consultants.--The Institute may procure 
temporary and intermittent services under section 3109(b) of 
title 5, United States Code.
    (k) Report.--The Institute shall submit a report biennially 
to the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate. Each report submitted under this subsection 
shall include--
            (1) a comprehensive and detailed description of the 
        Institute's operations, activities, financial 
        condition, and accomplishments in the field of literacy 
        for the period covered by the report;
            (2) a description of how plans for the operation of 
        the Institute for the succeeding 2 fiscal years will 
        facilitate achievement of the goals of the Institute 
        and the goals of the literacy programs within the 
        Department of Education, the Department of Labor, and 
        the Department of Health and Human Services; and
            (3) any additional minority, or dissenting views 
        submitted by members of the Board.
    (l) Funding.--Any amounts appropriated to the Secretary, 
the Secretary of Labor, the Secretary of Health and Human 
Services, or any other department that participates in the 
Institute for purposes that the Institute is authorized to 
perform under this section may be provided to the Institute for 
such purposes.

SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

    The Secretary shall establish and carry out a program of 
national leadership activities to enhance the quality of adult 
education and literacy programs nationwide. Such activities may 
include the following:
            (1) Technical assistance, including--
                    (A) assistance provided to eligible 
                providers in developing and using performance 
                measures for the improvement of adult education 
                and literacy activities, including family 
                literacy services;
                    (B) assistance related to professional 
                development activities, and assistance for the 
                purposes of developing, improving, identifying, 
                and disseminating the most successful methods 
                and techniques for providing adult education 
                and literacy activities, including family 
                literacy services, based on scientific evidence 
                where available; and
                    (C) assistance in distance learning and 
                promoting and improving the use of technology 
                in the classroom.
            (2) Funding national leadership activities that are 
        not described in paragraph (1), either directly or 
        through grants, contracts, or cooperative agreements 
        awarded on a competitive basis to or with postsecondary 
        educational institutions, public or private 
        organizations or agencies, or consortia of such 
        institutions, organizations, or agencies, such as--
                    (A) developing, improving, and identifying 
                the most successful methods and techniques for 
                addressing the education needs of adults, 
                including instructional practices using 
                phonemic awareness, systematic phonics, 
                fluency, and reading comprehension, based on 
                the work of the National Institute of Child 
                Health and Human Development;
                    (B) increasing the effectiveness of, and 
                improving the quality of, adult education and 
                literacy activities, including family literacy 
                services;
                    (C) carrying out research, such as 
                estimating the number of adults functioning at 
                the lowest levels of literacy proficiency;
                    (D)(i) carrying out demonstration programs;
                    (ii) developing and replicating model and 
                innovative programs, such as the development of 
                models for basic skill certificates, 
                identification of effective strategies for 
                working with adults with learning disabilities 
                and with individuals with limited English 
                proficiency who are adults, and workplace 
                literacy programs; and
                    (iii) disseminating best practices 
                information, including information regarding 
                promising practices resulting from federally 
                funded demonstration programs;
                    (E) providing for the conduct of an 
                independent evaluation and assessment of adult 
                education and literacy activities through 
                studies and analyses conducted independently 
                through grants and contracts awarded on a 
                competitive basis, which evaluation and 
                assessment shall include descriptions of--
                            (i) the effect of performance 
                        measures and other measures of 
                        accountability on the delivery of adult 
                        education and literacy activities, 
                        including family literacy services;
                            (ii) the extent to which the adult 
                        education and literacy activities, 
                        including family literacy services, 
                        increase the literacy skills of adults 
                        (and of children, in the case of family 
                        literacy services), lead the 
                        participants in such activities to 
                        involvement in further education and 
                        training, enhance the employment and 
                        earnings of such participants, and, if 
                        applicable, lead to other positive 
                        outcomes, such as reductions in 
                        recidivism in the case of prison-based 
                        adult education and literacy 
                        activities;
                            (iii) the extent to which the 
                        provision of support services to adults 
                        enrolled in adult education and family 
                        literacy programs increase the rate of 
                        enrollment in, and successful 
                        completion of, such programs; and
                            (iv) the extent to which eligible 
                        agencies have distributed funds under 
                        section 231 to meet the needs of adults 
                        through community-based organizations;
                    (F) supporting efforts aimed at capacity 
                building at the State and local levels, such as 
                technical assistance in program planning, 
                assessment, evaluation, and monitoring of 
                activities carried out under this subtitle;
                    (G) collecting data, such as data regarding 
                the improvement of both local and State data 
                systems, through technical assistance and 
                development of model performance data 
                collection systems; and
                    (H) other activities designed to enhance 
                the quality of adult education and literacy 
                activities nationwide.

                          Subtitle B--Repeals

SEC. 251. REPEALS.

    (a) Repeals.--
            (1) Adult education act.--The Adult Education Act 
        (20 U.S.C. 1201 et seq.) is repealed.
            (2) National literacy act of 1991.--The National 
        Literacy Act of 1991 (20 U.S.C. 1201 note) is repealed.
    (b) Conforming Amendments.--
            (1) Refugee education assistance act.--Subsection 
        (b) of section 402 of the Refugee Education Assistance 
        Act of 1980 (8 U.S.C. 1522 note) is repealed.
            (2) Elementary and secondary education act of 
        1965.--
                    (A) Section 1202 of esea.--Section 
                1202(c)(1) of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 6362(c)(1)) is 
                amended by striking ``Adult Education Act'' and 
                inserting ``Adult Education and Family Literacy 
                Act''.
                    (B) Section 1205 of esea.--Section 
                1205(8)(B) of such Act (20 U.S.C. 6365(8)(B)) 
                is amended by striking ``Adult Education Act'' 
                and inserting ``Adult Education and Family 
                Literacy Act''.
                    (C) Section 1206 of esea.--Section 
                1206(a)(1)(A) of such Act (20 U.S.C. 
                6366(a)(1)(A)) is amended by striking ``an 
                adult basic education program under the Adult 
                Education Act'' and inserting ``adult education 
                and literacy activities under the Adult 
                Education and Family Literacy Act''.
                    (D) Section 3113 of esea.--Section 3113(1) 
                of such Act (20 U.S.C. 6813(1)) is amended by 
                striking ``section 312 of the Adult Education 
                Act'' and inserting ``section 203 of the Adult 
                Education and Family Literacy Act''.
                    (E) Section 9161 of esea.--Section 9161(2) 
                of such Act (20 U.S.C. 7881(2)) is amended by 
                striking ``section 312(2) of the Adult 
                Education Act'' and inserting ``section 203 of 
                the Adult Education and Family Literacy Act''.
            (3) Older americans act of 1965.--Section 203(b)(8) 
        of the Older Americans Act of 1965 (42 U.S.C. 
        3013(b)(8)) is amended by striking ``Adult Education 
        Act'' and inserting ``Adult Education and Family 
        Literacy Act''.

           TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES

                     Subtitle A--Wagner-Peyser Act

SEC. 301. DEFINITIONS.

    Section 2 of the Wagner-Peyser Act (29 U.S.C. 49a) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``or officials''; and
                    (B) by striking ``Job Training Partnership 
                Act'' and inserting ``Workforce Investment Act 
                of 1998'';
            (2) by striking paragraphs (2) and (4);
            (3) by redesignating paragraph (3) as paragraph 
        (4);
            (4) by inserting after paragraph (1) the following:
            ``(2) the term `local workforce investment board' 
        means a local workforce investment board established 
        under section 117 of the Workforce Investment Act of 
        1998;
            ``(3) the term `one-stop delivery system' means a 
        one-stop delivery system described in section 134(c) of 
        the Workforce Investment Act of 1998;''; and
            (5) in paragraph (4) (as redesignated in paragraph 
        (3)), by striking the semicolon and inserting ``; 
        and''.

SEC. 302. FUNCTIONS.

    (a) In General.--Section 3 of the Wagner-Peyser Act (29 
U.S.C. 49b) is amended--
            (1) in subsection (a), by striking ``United States 
        Employment Service'' and inserting ``Secretary''; and
            (2) by adding at the end the following:
    ``(c) The Secretary shall--
            ``(1) assist in the coordination and development of 
        a nationwide system of public labor exchange services, 
        provided as part of the one-stop customer service 
        systems of the States;
            ``(2) assist in the development of continuous 
        improvement models for such nationwide system that 
        ensure private sector satisfaction with the system and 
        meet the demands of jobseekers relating to the system; 
        and
            ``(3) ensure, for individuals otherwise eligible to 
        receive unemployment compensation, the provision of 
        reemployment services and other activities in which the 
        individuals are required to participate to receive the 
        compensation.''.
    (b) Conforming Amendments.--Section 508(b)(1) of the 
Unemployment Compensation Amendments of 1976 (42 U.S.C. 
603a(b)(1)) is amended--
            (1) by striking ``the third sentence of section 
        3(a)'' and inserting ``section 3(b)''; and
            (2) by striking ``49b(a)'' and inserting 
        ``49b(b))''.

SEC. 303. DESIGNATION OF STATE AGENCIES.

    Section 4 of the Wagner-Peyser Act (29 U.S.C. 49c) is 
amended--
            (1) by striking ``, through its legislature,'' and 
        inserting ``, pursuant to State statute,'';
            (2) by inserting after ``the provisions of this Act 
        and'' the following: ``, in accordance with such State 
        statute, the Governor shall''; and
            (3) by striking ``United States Employment 
        Service'' and inserting ``Secretary''.

SEC. 304. APPROPRIATIONS.

    Section 5(c) of the Wagner-Peyser Act (29 U.S.C. 49d(c)) is 
amended by striking paragraph (3).

SEC. 305. DISPOSITION OF ALLOTTED FUNDS.

    Section 7 of the Wagner-Peyser Act (29 U.S.C. 49f) is 
amended--
            (1) in subsection (b)(2), by striking ``private 
        industry council'' and inserting ``local workforce 
        investment board'';
            (2) in subsection (c)(2), by striking ``any program 
        under'' and all that follows and inserting ``any 
        workforce investment activity carried out under the 
        Workforce Investment Act of 1998.'';
            (3) in subsection (d)--
                    (A) by striking ``United States Employment 
                Service'' and inserting ``Secretary''; and
                    (B) by striking ``Job Training Partnership 
                Act'' and inserting ``Workforce Investment Act 
                of 1998''; and
            (4) by adding at the end the following:
    ``(e) All job search, placement, recruitment, labor 
employment statistics, and other labor exchange services 
authorized under subsection (a) shall be provided, consistent 
with the other requirements of this Act, as part of the one-
stop delivery system established by the State.''.

SEC. 306. STATE PLANS.

    Section 8 of the Wagner-Peyser Act (29 U.S.C. 49g) is 
amended--
            (1) in subsection (a) to read as follows:
    ``(a) Any State desiring to receive assistance under this 
Act shall submit to the Secretary, as part of the State plan 
submitted under section 112 of the Workforce Investment Act of 
1998, detailed plans for carrying out the provisions of this 
Act within such State.'';
            (2) by striking subsections (b) and (c);
            (3) by redesignating subsection (d) as subsection 
        (b);
            (4) by inserting after subsection (b) (as 
        redesignated by paragraph (3)) the following:
    ``(c) The part of the State plan described in subsection 
(a) shall include the information described in paragraphs (8) 
and (14) of section 112(b) of the Workforce Investment Act of 
1998.'';
            (5) by redesignating subsection (e) as subsection 
        (d); and
            (6) in subsection (d) (as redesignated in paragraph 
        (5)), by striking ``such plans'' and inserting ``such 
        detailed plans''.

SEC. 307. REPEAL OF FEDERAL ADVISORY COUNCIL.

    Section 11 of the Wagner-Peyser Act (29 U.S.C. 49j) is 
amended--
            (1) by striking ``11.'' and all that follows 
        through ``(b) In'' and inserting ``11. In''; and
            (2) by striking ``Director'' and inserting 
        ``Secretary''.

SEC. 308. REGULATIONS.

    Section 12 of the Wagner-Peyser Act (29 U.S.C. 49k) is 
amended by striking ``The Director, with the approval of the 
Secretary of Labor,'' and inserting ``The Secretary''.

SEC. 309. EMPLOYMENT STATISTICS.

    The Wagner-Peyser Act is amended--
            (1) by redesignating section 15 (29 U.S.C. 49 note) 
        as section 16; and
            (2) by inserting after section 14 (29 U.S.C. 49l-1) 
        the following:

``SEC. 15. EMPLOYMENT STATISTICS.

    ``(a) System Content.--
            ``(1) In general.--The Secretary, in accordance 
        with the provisions of this section, shall oversee the 
        development, maintenance, and continuous improvement of 
        a nationwide employment statistics system of employment 
        statistics that includes--
                    ``(A) statistical data from cooperative 
                statistical survey and projection programs and 
                data from administrative reporting systems 
                that, taken together, enumerate, estimate, and 
                project employment opportunities and conditions 
                at national, State, and local levels in a 
                timely manner, including statistics on--
                            ``(i) employment and unemployment 
                        status of national, State, and local 
                        populations, including self-employed, 
                        part-time, and seasonal workers;
                            ``(ii) industrial distribution of 
                        occupations, as well as current and 
                        projected employment opportunities, 
                        wages, benefits (where data is 
                        available), and skill trends by 
                        occupation and industry, with 
                        particular attention paid to State and 
                        local conditions;
                            ``(iii) the incidence of, 
                        industrial and geographical location 
                        of, and number of workers displaced by, 
                        permanent layoffs and plant closings; 
                        and
                            ``(iv) employment and earnings 
                        information maintained in a 
                        longitudinal manner to be used for 
                        research and program evaluation;
                    ``(B) information on State and local 
                employment opportunities, and other appropriate 
                statistical data related to labor market 
                dynamics, which--
                            ``(i) shall be current and 
                        comprehensive;
                            ``(ii) shall meet the needs 
                        identified through the consultations 
                        described in subparagraphs (A) and (B) 
                        of subsection (e)(2); and
                            ``(iii) shall meet the needs for 
                        the information identified in section 
                        134(d);
                    ``(C) technical standards (which the 
                Secretary shall publish annually) for data and 
                information described insubparagraphs (A) and 
(B) that, at a minimum, meet the criteria of chapter 35 of title 44, 
United States Code;
                    ``(D) procedures to ensure compatibility 
                and additivity of the data and information 
                described in subparagraphs (A) and (B) from 
                national, State, and local levels;
                    ``(E) procedures to support standardization 
                and aggregation of data from administrative 
                reporting systems described in subparagraph (A) 
                of employment-related programs;
                    ``(F) analysis of data and information 
                described in subparagraphs (A) and (B) for uses 
                such as--
                            ``(i) national, State, and local 
                        policymaking;
                            ``(ii) implementation of Federal 
                        policies (including allocation 
                        formulas);
                            ``(iii) program planning and 
                        evaluation; and
                            ``(iv) researching labor market 
                        dynamics;
                    ``(G) wide dissemination of such data, 
                information, and analysis in a user-friendly 
                manner and voluntary technical standards for 
                dissemination mechanisms; and
                    ``(H) programs of--
                            ``(i) training for effective data 
                        dissemination;
                            ``(ii) research and demonstration; 
                        and
                            ``(iii) programs and technical 
                        assistance.
            ``(2) Information to be confidential.--
                    ``(A) In general.--No officer or employee 
                of the Federal Government or agent of the 
                Federal Government may--
                            ``(i) use any submission that is 
                        furnished for exclusively statistical 
                        purposes under the provisions of this 
                        section for any purpose other than the 
                        statistical purposes of this section 
                        for which the submission is furnished;
                            ``(ii) make any publication or 
                        media transmittal of the data contained 
                        in the submission described in clause 
                        (i) that permits information concerning 
                        individual subjects to be reasonably 
                        inferred by either direct or indirect 
                        means; or
                            ``(iii) permit anyone other than a 
                        sworn officer, employee, or agent of 
                        any Federal department or agency, or a 
                        contractor (including an employee of a 
                        contractor) of such department or 
                        agency, to examine an individual 
                        submission described in clause (i);
                without the consent of the individual, agency, 
                or other person who is the subject of the 
                submission or provides that submission.
                    ``(B) Immunity from legal process.--Any 
                submission (including any data derived from the 
                submission) that is collected and retained by a 
                Federal department or agency, or an officer, 
                employee, agent, or contractor of such a 
                department or agency, for exclusively 
                statistical purposes under this section shall 
                be immune from the legal process and shall not, 
                without the consent of the individual, agency, 
                or other person who is the subject of the 
                submission or provides that submission, be 
                admitted as evidence or used for any purpose in 
                any action, suit, or other judicial or 
                administrative proceeding.
                    ``(C) Rule of construction.--Nothing in 
                this section shall be construed to provide 
                immunity from the legal process for such 
                submission (including any data derived from the 
                submission) if the submission is in the 
                possession of any person, agency, or entity 
                other than the Federal Government or an 
                officer, employee, agent, or contractor of the 
                Federal Government, or if the submission is 
                independently collected, retained, or produced 
                for purposes other than the purposes of this 
                Act.
    ``(b) System Responsibilities.--
            ``(1) In general.--The employment statistics system 
        described in subsection (a) shall be planned, 
        administered, overseen, and evaluated through a 
        cooperative governance structure involving the Federal 
        Government and States.
            ``(2) Duties.--The Secretary, with respect to data 
        collection, analysis, and dissemination of labor 
        employment statistics for the system, shall carry out 
        the following duties:
                    ``(A) Assign responsibilities within the 
                Department of Labor for elements of the 
                employment statistics system described in 
                subsection (a) to ensure that all statistical 
                and administrative data collected is consistent 
                with appropriate Bureau of Labor Statistics 
                standards and definitions.
                    ``(B) Actively seek the cooperation of 
                other Federal agencies to establish and 
                maintain mechanisms for ensuring 
                complementarity and nonduplication in the 
                development and operation of statistical and 
                administrative data collection activities.
                    ``(C) Eliminate gaps and duplication in 
                statistical undertakings, with the 
                systemization of wage surveys as an early 
                priority.
                    ``(D) In collaboration with the Bureau of 
                Labor Statistics and States, develop and 
                maintain the elements of the employment 
                statistics system described in subsection (a), 
                including the development of consistent 
                procedures and definitions for use by the 
                States in collecting the data and information 
                described in subparagraphs (A) and (B) of 
                subsection (a)(1).
                    ``(E) Establish procedures for the system 
                to ensure that--
                            ``(i) such data and information are 
                        timely;
                            ``(ii) paperwork and reporting for 
                        the system are reduced to a minimum; 
                        and
                            ``(iii) States and localities are 
                        fully involved in the development and 
                        continuous improvement of the system at 
                        all levels, including ensuring the 
                        provision, to such States and 
                        localities, of budget information 
                        necessary for carrying out their 
                        responsibilities under subsection (e).
    ``(c) Annual Plan.--The Secretary, working through the 
Bureau of Labor Statistics, and in cooperation with the States, 
and with the assistance of other appropriate Federal agencies, 
shall prepare an annual plan which shall be the mechanism for 
achieving cooperative management of the nationwide employment 
statistics system described in subsection (a) and the statewide 
employment statistics systems that comprise the nationwide 
system. The plan shall--
            ``(1) describe the steps the Secretary has taken in 
        the preceding year and will take in the following 5 
        years to carry out the duties described in subsection 
        (b)(2);
            ``(2) include a report on the results of an annual 
        consumer satisfaction review concerning the performance 
        of the system, including the performance of the system 
        in addressing the needs of Congress, States, 
        localities, employers, jobseekers, and other consumers;
            ``(3) evaluate the performance of the system and 
        recommend needed improvements, taking into 
        consideration the results of the consumer satisfaction 
        review, with particular attention to the improvements 
        needed at the State and local levels;
            ``(4) justify the budget request for annual 
        appropriations by describing priorities for the fiscal 
        year succeeding the fiscal year in which the plan is 
        developed and priorities for the 5 subsequent fiscal 
        years for the system;
            ``(5) describe current (as of the date of the 
        submission of the plan) spending and spending needs to 
        carry out activities under this section, including the 
        costs to States and localities of meeting the 
        requirements of subsection (e)(2); and
            ``(6) describe the involvement of States in the 
        development of the plan, through formal consultations 
        conducted by the Secretary in cooperation with 
        representatives of the Governors of every State, and 
        with representatives of local workforce investment 
        boards, pursuant to a process established by the 
        Secretary in cooperation with the States.
    ``(d) Coordination With the States.--The Secretary, working 
through the Bureau of Labor Statistics, and in cooperation with 
the States, shall--
            ``(1) develop the annual plan described in 
        subsection (c) and address other employment statistics 
        issues by holding formal consultations, at least once 
        each quarter (beginning with the calendar quarter in 
        which the Workforce Investment Act of 1998 is enacted) 
        on the products and administration of the nationwide 
        employment statistics system; and
            ``(2) hold the consultations with representatives 
        from each of the 10 Federal regions of the Department 
        of Labor, elected (pursuant to a process established by 
        the Secretary) by and from the State employment 
        statistics directors affiliated with the State agencies 
        that perform the duties described in subsection (e)(2).
    ``(e) State Responsibilities.--
            ``(1) Designation of state agency.--In order to 
        receive Federal financial assistance under this 
        section, the Governor of a State shall--
                    ``(A) designate a single State agency to be 
                responsible for the management of the portions 
                of the employment statistics system described 
                in subsection (a) that comprise a statewide 
                employment statistics system and for the 
                State's participation in the development of the 
                annual plan; and
                    ``(B) establish a process for the oversight 
                of such system.
            ``(2) Duties.--In order to receive Federal 
        financial assistance under this section, the State 
        agency shall--
                    ``(A) consult with State and local 
                employers, participants, and local workforce 
                investment boards about the labor market 
                relevance of the data to be collected and 
                disseminated through the statewide employment 
                statistics system;
                    ``(B) consult with State educational 
                agencies and local educational agencies 
                concerning the provision of employment 
                statistics in order to meet the needs of 
                secondary school and postsecondary school 
                students who seek such information;
                    ``(C) collect and disseminate for the 
                system, on behalf of the State and localities 
                in the State, the information and data 
                described in subparagraphs (A) and (B) of 
                subsection (a)(1);
                    ``(D) maintain and continuously improve the 
                statewide employment statistics system in 
                accordance with this section;
                    ``(E) perform contract and grant 
                responsibilities for data collection, analysis, 
                and dissemination for such system;
                    ``(F) conduct such other data collection, 
                analysis, and dissemination activities as will 
                ensure an effective statewide employment 
                statistics system;
                    ``(G) actively seek the participation of 
                other State and local agencies in data 
                collection, analysis, and dissemination 
                activities in order to ensure complementarity, 
                compatibility, and usefulness of data;
                    ``(H) participate in the development of the 
                annual plan described in subsection (c); and
                    ``(I) utilize the quarterly records 
                described in section 136(f)(2) of the Workforce 
                Investment Act of 1998 to assist the State and 
                other States in measuring State progress on 
                State performance measures.
            ``(3) Rule of construction.--Nothing in this 
        section shall be construed as limiting the ability of a 
        State agency to conduct additional data collection, 
        analysis, and dissemination activities with State funds 
        or with Federal funds from sources other than this 
        section.
    ``(f) Nonduplication Requirement.--None of the functions 
and activities carried out pursuant to this section shall 
duplicate the functions and activities carried out under the 
Carl D. Perkins Vocational and Applied Technology Education Act 
(20 U.S.C. 2301 et seq.).
    ``(g) Authorization of Appropriations.--There are 
authorized to be appropriated to carry out this section such 
sums as may be necessary for each of the fiscal years 1999 
through 2004.
    ``(h) Definition.--In this section, the term `local area' 
means the smallest geographical area for which data can be 
produced with statistical reliability.''.

SEC. 310. TECHNICAL AMENDMENTS.

    Sections 3(b), 6(b)(1), and 7(d) of the Wagner-Peyser Act 
(29 U.S.C. 49b(b), 49e(b)(1), and 49f(d)) are amended by 
striking ``Secretary of Labor'' and inserting ``Secretary''.

SEC. 311. EFFECTIVE DATE.

    The amendments made by this subtitle shall take effect on 
July 1, 1999.

                Subtitle B--Linkages With Other Programs

SEC. 321. TRADE ACT OF 1974.

    Section 239 of the Trade Act of 1974 (19 U.S.C. 2311) is 
amended by adding at the end the following:
    ``(g) In order to promote the coordination of workforce 
investment activities in each State with activities carried out 
under this chapter, any agreement entered into under this 
section shall provide that the State shall submit to the 
Secretary, in such form as the Secretary may require, the 
description and information described in paragraphs (8) and 
(14) of section 112(b) of the Workforce Investment Act of 
1998.''.

SEC. 322. VETERANS' EMPLOYMENT PROGRAMS.

    Chapter 41 of title 38, United States Code, is amended by 
adding at the end the following:

``Sec. 4110B. Coordination and nonduplication

    ``In carrying out this chapter, the Secretary shall require 
that an appropriate administrative entity in each State enter 
into an agreement with the Secretary regarding the 
implementation of this Act that includes the description and 
information described in paragraphs (8) and (14) of section 
112(b) of the Workforce Investment Act of 1998.''.

SEC. 323. OLDER AMERICANS ACT OF 1965.

    Section 502(b)(1) of the Older Americans Act of 1965 (42 
U.S.C. 3056(b)(1)) is amended--
            (1) in subparagraph (O), by striking ``; and'' and 
        inserting a semicolon;
            (2) in subparagraph (P), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following 
        subparagraph:
            ``(Q) will provide to the Secretary the description 
        and information described in paragraphs (8) and (14) of 
        section 112(b) of the Workforce Investment Act of 
        1998.''.

         Subtitle C--Twenty-First Century Workforce Commission

SEC. 331. SHORT TITLE.

    This subtitle may be cited as the ``Twenty-First Century 
Workforce Commission Act''.

SEC. 332. FINDINGS.

    Congress finds that--
            (1) information technology is one of the fastest 
        growing areas in the United States economy;
            (2) the United States is a world leader in the 
        information technology industry;
            (3) the continued growth and prosperity of the 
        information technology industry is important to the 
        continued prosperity of the United States economy;
            (4) highly skilled employees are essential for the 
        success of business entities in the information 
        technology industry and other business entities that 
        use information technology;
            (5) employees in information technology jobs are 
        highly paid;
            (6) as of the date of enactment of this Act, these 
        employees are in high demand in all industries and all 
        regions of the United States; and
            (7) through a concerted effort by business 
        entities, the Federal Government, the governments of 
        States and political subdivisions of States, and 
        educational institutions, more individuals will gain 
        the skills necessary to enter into a technology-based 
        job market, ensuring that the United States remains the 
        world leader in the information technology industry.

SEC. 333. DEFINITIONS.

    In this subtitle:
            (1) Business entity.--The term ``business entity'' 
        means a firm, corporation, association, partnership, 
        consortium, joint venture, or other form of enterprise.
            (2) Commission.--The term ``Commission'' means the 
        Twenty-First Century Workforce Commission established 
        under section 334.
            (3) Information technology.--The term ``information 
        technology'' has the meaning given that term in section 
        5002 of the Information Technology Management Reform 
        Act of 1996 (110 Stat. 679).
            (4) State.--The term ``State'' means each of the 
        several States of the United States and the District of 
        Columbia.

SEC. 334. ESTABLISHMENT OF TWENTY-FIRST CENTURY WORKFORCE COMMISSION.

    (a) Establishment.--There is established a commission to be 
known as the Twenty-First Century Workforce Commission.
    (b) Membership.--
            (1) Composition.--
                    (A) In general.--The Commission shall be 
                composed of 15 voting members, of which--
                            (i) 5 members shall be appointed by 
                        the President;
                            (ii) 5 members shall be appointed 
                        by the Majority Leader of the Senate; 
                        and
                            (iii) 5 members shall be appointed 
                        by the Speaker of the House of 
                        Representatives.
                    (B) Governmental representatives.--Of the 
                members appointed under this subsection, 3 
                members shall be representatives of the 
                governments of States and political 
                subdivisions of States, 1 of whom shall be 
                appointed by the President, 1 of whom shall be 
                appointed by the Majority Leader of the Senate, 
                and 1 of whom shall be appointed by the Speaker 
                of the House of Representatives.
                    (C) Educators.--Of the members appointed 
                under this subsection, 3 shall be educators who 
                are selected from among elementary, secondary, 
                vocational, and postsecondary educators--
                            (i) 1 of whom shall be appointed by 
                        the President;
                            (ii) 1 of whom shall be appointed 
                        by the Majority Leader of the Senate; 
                        and
                            (iii) 1 of whom shall be appointed 
                        by the Speaker of the House of 
                        Representatives.
                    (D) Business representatives.--
                            (i) In general.--Of the members 
                        appointed under this subsection, 8 
                        shall be representatives of business 
                        entities (at least 3 of which shall be 
                        individuals who are employed by non-
                        information technology business 
                        entities), 2 of whom shall be appointed 
                        by the President, 3 of whom shall be 
                        appointed by the Majority Leader of the 
                        Senate, and 3 of whom shall be 
                        appointed by the Speaker of the House 
                        of Representatives.
                            (ii) Size.--Members appointed under 
                        this subsection in accordance with 
                        clause (i) shall, to the extent 
                        practicable, include individuals from 
                        business entities of a size that is 
                        small or average.
                    (E) Labor representative.--Of the members 
                appointed under this subsection, 1 shall be a 
                representative of a labor organization who has 
                been nominated by a national labor federation 
                and who shall be appointed by the President.
                    (F) Ex-officio members.--The Commission 
                shall include 2 non-voting members, of which--
                            (i) 1 member shall be an officer or 
                        employee of the Department of Labor, 
                        who shall be appointed by the 
                        President; and
                            (ii) 1 member shall be an officer 
                        or employee of the Department of 
                        Education, who shall be appointed by 
                        the President.
            (2) Date.--The appointments of the members of the 
        Commission shall be made by the later of--
                    (A) October 31, 1998; or
                    (B) the date that is 45 days after the date 
                of enactment of this Act.
    (c) Period of Appointment; Vacancies.--Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not affect its powers, but shall be filled in 
the same manner as the original appointment.
    (d) Initial Meeting.--No later than 30 days after the date 
on which all members of the Commission have been appointed, the 
Commission shall hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the 
Chairperson.
    (f) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.
    (g) Chairperson and Vice Chairperson.--The Commission shall 
select by vote a chairperson and vice chairperson from among 
its voting members.

SEC. 335. DUTIES OF THE COMMISSION.

    (a) Study.--
            (1) In general.--The Commission shall conduct a 
        thorough study of all matters relating to the 
        information technology workforce in the United States.
            (2) Matters studied.--The matters studied by the 
        Commission shall include an examination of--
                    (A) the skills necessary to enter the 
                information technology workforce;
                    (B) ways to expand the number of skilled 
                information technology workers; and
                    (C) the relative efficacy of programs in 
                the United States and foreign countries to 
                train information technology workers, with 
                special emphasis on programs that provide for 
                secondary education or postsecondary education 
                in a program other than a 4-year baccalaureate 
                program (including associate degree programs 
                and graduate degree programs).
            (3) Public hearings.--As part of the study 
        conducted under this subsection, the Commission shall 
        hold public hearings in each region of the United 
        States concerning the issues referred to in 
        subparagraphs (A) and (B) of paragraph (2).
            (4) Existing information.--To the extent 
        practicable, in carrying out the study under this 
        subsection, the Commission shall identify and use 
        existing information related to the issues referred to 
        in subparagraphs (A) and (B) of paragraph (2).
            (5) Consultation with chief information officers 
        council.--In carrying out the study under this 
        subsection, the Commission shall consult with the Chief 
        Information Officers Council established under 
        Executive Order No. 13011.
    (b) Report.--Not later than 6 months after the first 
meeting of the Commission, the Commission shall submit a report 
to the President and the Congress that shall contain a detailed 
statement of the findings and conclusions of the Commission 
resulting from the study, together with its recommendations for 
such legislation and administrative actions as the Commission 
considers to be appropriate.
    (c) Facilitation of Exchange of Information.--In carrying 
out the study under subsection (a), the Commission shall, to 
the extent practicable, facilitate the exchange of information 
concerning the issues that are the subject of the study among--
            (1) officials of the Federal Government and the 
        governments of States and political subdivisions of 
        States; and
            (2) educators from Federal, State, and local 
        institutions of higher education and secondary schools.

SEC. 336. POWERS OF THE COMMISSION.

    (a) Hearings.--The Commission may hold such hearings, sit 
and act at such times and places, take such testimony, and 
receive such evidence as the Commission considers advisable to 
carry out the purposes of this subtitle.
    (b) Information From Federal Agencies.--The Commission may 
secure directly from any Federal department or agency such 
information as the Commission considers necessary to carry out 
the provisions of this subtitle. Upon request of the 
Chairperson of the Commission, the head of such department or 
agency shall furnish such information to the Commission.
    (c) Postal Services.--The Commission may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Federal Government.
    (d) Gifts.--The Commission may accept, use, and dispose of 
gifts or donations of services or property.

SEC. 337. COMMISSION PERSONNEL MATTERS.

    (a) Compensation of Members.--Except as provided in 
subsection (b), each member of the Commission who is not an 
officer or employee of the Federal Government shall serve 
without compensation. All members of the Commission who are 
officers or employees of the United States shall serve without 
compensation in addition to that received for their services as 
officers or employees of the United States.
    (b) Travel Expenses.--The members of the Commission shall 
be allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of business 
in the performance of services for the Commission.
    (c) Staff.--
            (1) In general.--The Chairperson of the Commission 
        may, without regard to the civil service laws and 
        regulations, appoint and terminate an executive 
        director and such other additional personnel as may be 
        necessary to enable the Commission to perform its 
        duties. The employment of an executive director shall 
        be subject to confirmation by the Commission.
            (2) Compensation.--The Chairperson of the 
        Commission may fix the compensation of the executive 
        director and other personnel without regard to the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of title 5, United States Code, relating to 
        classification of positions and General Schedule pay 
        rates, except that the rate of pay for the executive 
        director and other personnel may not exceed the rate 
        payable for level V of the Executive Schedule under 
        section 5316 of such title.
    (d) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Commission without 
reimbursement, and such detail shall be without interruption or 
loss of civil service status or privilege.
    (e) Procurement of Temporary and Intermittent Services.--
The Chairperson of the Commission may procure temporary and 
intermittent services under section 3109(b) of title 5, United 
States Code, at rates for individuals that do not exceed the 
daily equivalent of the annual rate of basic pay prescribed for 
level V of the Executive Schedule under section 5316 of such 
title.

SEC. 338. TERMINATION OF THE COMMISSION.

    The Commission shall terminate on the date that is 90 days 
after the date on which the Commission submits its report under 
section 335(b).

SEC. 339. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated 
such sums as may be necessary for fiscal year 1999 to the 
Commission to carry out the purposes of this subtitle.
    (b) Availability.--Any sums appropriated under the 
authorization contained in this section shall remain available, 
without fiscal year limitation, until expended.

 Subtitle D--Application of Civil Rights and Labor-Management Laws to 
                      the Smithsonian Institution

SEC. 341. APPLICATION OF CIVIL RIGHTS AND LABOR-MANAGEMENT LAWS TO THE 
                    SMITHSONIAN INSTITUTION.

    (a) Prohibition on Employment Discrimination on Basis of 
Race, Color, Religion, Sex, and National Origin.--Section 
717(a) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16(a)) 
is amended by inserting ``in the Smithsonian Institution,'' 
before ``and in the Government Printing Office,''.
    (b) Prohibition on Employment Discrimination on Basis of 
Age.--Section 15(a) of the Age Discrimination in Employment Act 
of 1967 (29 U.S.C. 633a(a)) is amended by inserting ``in the 
Smithsonian Institution,'' before ``and in the Government 
Printing Office,''.
    (c) Prohibition on Employment Discrimination on Basis of 
Disability.--Section 501 of the Rehabilitation Act of 1973 (29 
U.S.C. 791) is amended--
            (1) in the fourth sentence of subsection (a), in 
        paragraph (1), by inserting ``and the Smithsonian 
        Institution'' after ``Government'';
            (2) in the first sentence of subsection (b)--
                    (A) by inserting ``and the Smithsonian 
                Institution'' after ``in the executive 
                branch''; and
                    (B) by striking ``such department, agency, 
                or instrumentality'' and inserting ``such 
                department, agency, instrumentality, or 
                Institution''; and
            (3) in subsection (d), by inserting ``and the 
        Smithsonian Institution'' after ``instrumentality''.
    (d) Application.--The amendments made by subsections (a), 
(b), and (c) shall take effect on the date of enactment of this 
Act and shall apply to and may be raised in any administrative 
or judicial claim or action brought before such date of 
enactment but pending on such date, and any administrative or 
judicial claim or action brought after such date regardless of 
whether the claim or action arose prior to such date, if the 
claim or action was brought within the applicable statute of 
limitations.
    (e) Labor-Management Laws.--Section 7103(a)(3) of title 5, 
United States Code, is amended--
            (1) by striking ``and'' after ``Library of 
        Congress,''; and
            (2) by inserting ``and the Smithsonian 
        Institution'' after ``Government Printing Office,''.

            TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Rehabilitation Act 
Amendments of 1998''.

SEC. 402. TITLE.

    The title of the Rehabilitation Act of 1973 is amended by 
striking ``to establish special responsibilities'' and all that 
follows and inserting the following: ``to create linkage 
between State vocational rehabilitation programs and workforce 
investment activities carried out under title I of the 
Workforce Investment Act of 1998, to establish special 
responsibilities for the Secretary of Education for 
coordination of all activities with respect to individuals with 
disabilities within and across programs administered by the 
Federal Government, and for other purposes.''.

SEC. 403. GENERAL PROVISIONS.

    The Rehabilitation Act of 1973 is amended by striking the 
matter preceding title I and inserting the following:

``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    ``(a) Short Title.--This Act may be cited as the 
`Rehabilitation Act of 1973'.
    ``(b) Table of Contents.--The table of contents for this 
Act is as follows:

``Sec. 1. Short title; table of contents.
``Sec. 2. Findings; purpose; policy.
``Sec. 3. Rehabilitation Services Administration.
``Sec. 4. Advance funding.
``Sec. 5. Joint funding.
``Sec. 7. Definitions.
``Sec. 8. Allotment percentage.
``Sec. 10. Nonduplication.
``Sec. 11. Application of other laws.
``Sec. 12. Administration of the Act.
``Sec. 13. Reports.
``Sec. 14. Evaluation.
``Sec. 15. Information clearinghouse.
``Sec. 16. Transfer of funds.
``Sec. 17. State administration.
``Sec. 18. Review of applications.
``Sec. 19. Carryover.
``Sec. 20. Client assistance information.
``Sec. 21. Traditionally underserved populations.

              ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``Part A--General Provisions

``Sec. 100. Declaration of policy; authorization of appropriations.
``Sec. 101. State plans.
``Sec. 102. Eligibility and individualized plan for employment.
``Sec. 103. Vocational rehabilitation services.
``Sec. 104. Non-Federal share for establishment of program.
``Sec. 105. State Rehabilitation Council.
``Sec. 106. Evaluation standards and performance indicators.
``Sec. 107. Monitoring and review.
``Sec. 108. Expenditure of certain amounts.
``Sec. 109. Training of employers with respect to Americans with 
          Disabilities Act of 1990.

           ``Part B--Basic Vocational Rehabilitation Services

``Sec. 110. State allotments.
``Sec. 111. Payments to States.
``Sec. 112. Client assistance program.

      ``Part C--American Indian Vocational Rehabilitation Services

``Sec. 121. Vocational rehabilitation services grants.

     ``Part D--Vocational Rehabilitation Services Client Information

``Sec. 131. Data sharing.

                    ``TITLE II--RESEARCH AND TRAINING

``Sec. 200. Declaration of purpose.
``Sec. 201. Authorization of appropriations.
``Sec. 202. National Institute on Disability and Rehabilitation 
          Research.
``Sec. 203. Interagency Committee.
``Sec. 204. Research and other covered activities.
``Sec. 205. Rehabilitation Research Advisory Council.

     ``TITLE III--PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS AND 
                             DEMONSTRATIONS

``Sec. 301. Declaration of purpose and competitive basis of grants and 
          contracts.
``Sec. 302. Training.
``Sec. 303. Demonstration and training programs.
``Sec. 304. Migrant and seasonal farmworkers.
``Sec. 305. Recreational programs.
``Sec. 306. Measuring of project outcomes and performance.

               ``TITLE IV--NATIONAL COUNCIL ON DISABILITY

``Sec. 400. Establishment of National Council on Disability.
``Sec. 401. Duties of National Council.
``Sec. 402. Compensation of National Council members.
``Sec. 403. Staff of National Council.
``Sec. 404. Administrative powers of National Council.
``Sec. 405. Authorization of Appropriations.

                     ``TITLE V--RIGHTS AND ADVOCACY

``Sec. 501. Employment of individuals with disabilities.
``Sec. 502. Architectural and Transportation Barriers Compliance Board.
``Sec. 503. Employment under Federal contracts.
``Sec. 504. Nondiscrimination under Federal grants and programs.
``Sec. 505. Remedies and attorneys' fees.
``Sec. 506. Secretarial responsibilities.
``Sec. 507. Interagency Disability Coordinating Council.
``Sec. 508. Electronic and information technology regulations.
``Sec. 509. Protection and advocacy of individual rights.

 ``TITLE VI--EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES

``Sec. 601. Short title.

                    ``Part A--Projects With Industry

``Sec. 611. Projects with industry.
``Sec. 612. Authorization of appropriations.

 ``Part B--Supported Employment Services for Individuals With the Most 
                        Significant Disabilities

``Sec. 621. Purpose.
``Sec. 622. Allotments.
``Sec. 623. Availability of services.
``Sec. 624. Eligibility.
``Sec. 625. State plan.
``Sec. 626. Restriction.
``Sec. 627. Savings provision.
``Sec. 628. Authorization of appropriations.

  ``TITLE VII--INDEPENDENT LIVING SERVICES AND CENTERS FOR INDEPENDENT 
                                 LIVING

         ``Chapter 1--Individuals With Significant Disabilities

                      ``Part A--General Provisions

``Sec. 701. Purpose.
``Sec. 702. Definitions.
``Sec. 703. Eligibility for receipt of services.
``Sec. 704. State plan.
``Sec. 705. Statewide Independent Living Council.
``Sec. 706. Responsibilities of the Commissioner.

                  ``Part B--Independent Living Services

``Sec. 711. Allotments.
``Sec. 712. Payments to States from allotments.
``Sec. 713. Authorized uses of funds.
``Sec. 714. Authorization of appropriations.

                ``Part C--Centers for Independent Living

``Sec. 721. Program authorization.
``Sec. 722. Grants to centers for independent living in States in which 
          Federal funding exceeds State funding.
``Sec. 723. Grants to centers for independent living in States in which 
          State funding equals or exceeds Federal funding.
``Sec. 724. Centers operated by State agencies.
``Sec. 725. Standards and assurances for centers for independent living.
``Sec. 726. Definitions.
``Sec. 727. Authorization of appropriations.

 ``Chapter 2--Independent Living Services for Older Individuals Who Are 
                                  Blind

``Sec. 751. Definition.
``Sec. 752. Program of grants.
``Sec. 753. Authorization of appropriations.


                      ``findings; purpose; policy


    ``Sec. 2. (a) Findings.--Congress finds that--
            ``(1) millions of Americans have one or more 
        physical or mental disabilities and the number of 
        Americans with such disabilities is increasing;
            ``(2) individuals with disabilities constitute one 
        of the most disadvantaged groups in society;
            ``(3) disability is a natural part of the human 
        experience and in no way diminishes the right of 
        individuals to--
                    ``(A) live independently;
                    ``(B) enjoy self-determination;
                    ``(C) make choices;
                    ``(D) contribute to society;
                    ``(E) pursue meaningful careers; and
                    ``(F) enjoy full inclusion and integration 
                in the economic, political, social, cultural, 
                and educational mainstream of American society;
            ``(4) increased employment of individuals with 
        disabilities can be achieved through implementation of 
        statewide workforce investment systems under title I of 
        the Workforce Investment Act of 1998 that provide 
        meaningful and effective participation for individuals 
        with disabilities in workforce investment activities 
        and activities carried out under the vocational 
        rehabilitation program established under title I, and 
        through the provision of independent living services, 
        support services, and meaningful opportunities for 
        employment in integrated work settings through the 
        provision of reasonable accommodations;
            ``(5) individuals with disabilities continually 
        encounter various forms of discrimination in such 
        critical areas as employment, housing, public 
        accommodations, education, transportation, 
        communication, recreation, institutionalization, health 
        services, voting, and public services; and
            ``(6) the goals of the Nation properly include the 
        goal of providing individuals with disabilities with 
        the tools necessary to--
                    ``(A) make informed choices and decisions; 
                and
                    ``(B) achieve equality of opportunity, full 
                inclusion and integration in society, 
                employment, independent living, and economic 
                and social self-sufficiency, for such 
                individuals.
    ``(b) Purpose.--The purposes of this Act are--
            ``(1) to empower individuals with disabilities to 
        maximize employment, economic self-sufficiency, 
        independence, and inclusion and integration into 
        society, through--
                    ``(A) statewide workforce investment 
                systems implemented in accordance with title I 
                of the Workforce Investment Act of 1998 that 
                include, as integral components, comprehensive 
                and coordinated state-of-the-art programs of 
                vocational rehabilitation;
                    ``(B) independent living centers and 
                services;
                    ``(C) research;
                    ``(D) training;
                    ``(E) demonstration projects; and
                    ``(F) the guarantee of equal opportunity; 
                and
            ``(2) to ensure that the Federal Government plays a 
        leadership role in promoting the employment of 
        individuals with disabilities, especially individuals 
        with significant disabilities, and in assisting States 
        and providers of services in fulfilling the aspirations 
        of such individuals with disabilities for meaningful 
        and gainful employment and independent living.
    ``(c) Policy.--It is the policy of the United States that 
all programs, projects, and activities receiving assistance 
under this Act shall be carried out in a manner consistent with 
the principles of--
            ``(1) respect for individual dignity, personal 
        responsibility, self-determination, and pursuit of 
        meaningful careers, based on informed choice, of 
        individuals with disabilities;
            ``(2) respect for the privacy, rights, and equal 
        access (including the use of accessible formats), of 
        the individuals;
            ``(3) inclusion, integration, and full 
        participation of the individuals;
            ``(4) support for the involvement of an 
        individual's representative if an individual with a 
        disability requests, desires, or needs such support; 
        and
            ``(5) support for individual and systemic advocacy 
        and community involvement.


                ``rehabilitation services administration


    ``Sec. 3. (a) There is established in the Office of the 
Secretary a Rehabilitation Services Administration which shall 
be headed by a Commissioner (hereinafter in this Act referred 
to as the `Commissioner') appointed by the President by and 
with the advice and consent of the Senate. Except for titles IV 
and V and as otherwise specifically provided in this Act, such 
Administration shall be the principal agency, and the 
Commissioner shall be the principal officer, of such Department 
for carrying out this Act. The Commissioner shall be an 
individual with substantial experience in rehabilitation and in 
rehabilitation program management. In the performance of the 
functions of the office, the Commissioner shall be directly 
responsible to the Secretary or to the Under Secretary or an 
appropriate Assistant Secretary of such Department, as 
designated by the Secretary. The functions of the Commissioner 
shall not be delegated to any officer not directly responsible, 
both with respect to program operation and administration, to 
the Commissioner. Any reference in this Act to duties to be 
carried out by the Commissioner shall be considered to be a 
reference to duties to be carried out by the Secretary acting 
through the Commissioner. In carrying out any of the functions 
of the office under this Act, the Commissioner shall be guided 
by general policies of the National Council on Disability 
established under title IV of this Act.
    ``(b) The Secretary shall take whatever action is necessary 
to ensure that funds appropriated pursuant to this Act are 
expended only for the programs, personnel, and administration 
of programs carried out under this Act.


                           ``advance funding


    ``Sec. 4. (a) For the purpose of affording adequate notice 
of funding available under this Act, appropriations under this 
Act are authorized to be included in the appropriation Act for 
the fiscal year preceding the fiscal year for which they are 
available for obligation.
    ``(b) In order to effect a transition to the advance 
funding method of timing appropriation action, the authority 
provided by subsection (a) of this section shall apply 
notwithstanding that its initial application will result in the 
enactment in the same year (whether in the same appropriation 
Act or otherwise) of two separate appropriations, one for the 
then current fiscal year and one for the succeeding fiscal 
year.


                            ``joint funding


    ``Sec. 5. Pursuant to regulations prescribed by the 
President, and to the extent consistent with the other 
provisions of this Act, where funds are provided for a single 
project by more than one Federal agency to an agency or 
organization assisted under this Act, the Federal agency 
principally involved may be designated to act for all in 
administering the funds provided, and, in such cases, a single 
non-Federal share requirement may be established according to 
the proportion of funds advanced by each agency. When the 
principal agency involved is the Rehabilitation Services 
Administration, it may waive any grant or contract requirement 
(as defined by such regulations) under or pursuant to any law 
other than this Act, which requirement is inconsistent with the 
similar requirements of the administering agency under or 
pursuant to this Act.

``SEC. 7. DEFINITIONS.

    ``For the purposes of this Act:
            ``(1) The term `administrative costs' means 
        expenditures incurred in the performance of 
        administrative functions under the vocational 
        rehabilitation program carried out under title I, 
        including expenses related to program planning, 
        development, monitoring, and evaluation, including 
        expenses for--
                    ``(A) quality assurance;
                    ``(B) budgeting, accounting, financial 
                management, information systems, and related 
                data processing;
                    ``(C) providing information about the 
                program to the public;
                    ``(D) technical assistance and support 
                services to other State agencies, private 
                nonprofit organizations, and businesses and 
                industries, except for technical assistance and 
                support services described in section 
                103(b)(5);
                    ``(E) the State Rehabilitation Council and 
                other advisory committees;
                    ``(F) professional organization membership 
                dues for designated State unit employees;
                    ``(G) the removal of architectural barriers 
                in State vocational rehabilitation agency 
                offices and State operated rehabilitation 
                facilities;
                    ``(H) operating and maintaining designated 
                State unit facilities, equipment, and grounds;
                    ``(I) supplies;
                    ``(J) administration of the comprehensive 
                system of personnel development described in 
                section 101(a)(7), including personnel 
                administration, administration of affirmative 
                action plans, and training and staff 
                development;
                    ``(K) administrative salaries, including 
                clerical and other support staff salaries, in 
                support of these administrative functions;
                    ``(L) travel costs related to carrying out 
                the program, other than travel costs related to 
                the provision of services;
                    ``(M) costs incurred in conducting reviews 
                of rehabilitation counselor or coordinator 
                determinations under section 102(c); and
                    ``(N) legal expenses required in the 
                administration of the program.
            ``(2) Assessment for determining eligibility and 
        vocational rehabilitation needs.--The term `assessment 
        for determining eligibility and vocational 
        rehabilitation needs' means, as appropriate in each 
        case--
                    ``(A)(i) a review of existing data--
                            ``(I) to determine whether an 
                        individual is eligible for vocational 
                        rehabilitation services; and
                            ``(II) to assign priority for an 
                        order of selection described in section 
                        101(a)(5)(A) in the States that use an 
                        order of selection pursuant to section 
                        101(a)(5)(A); and
                    ``(ii) to the extent necessary, the 
                provision of appropriate assessment activities 
                to obtain necessary additional data to make 
                such determination and assignment;
                    ``(B) to the extent additional data is 
                necessary to make a determination of the 
                employment outcomes, and the objectives, 
                nature, and scope of vocational rehabilitation 
                services, to be included in the individualized 
                plan for employment of an eligible individual, 
                a comprehensive assessment to determine the 
                unique strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice, including the need for 
                supported employment, of the eligible 
                individual, which comprehensive assessment--
                            ``(i) is limited to information 
                        that is necessary to identify the 
                        rehabilitation needs of the individual 
                        and to develop the individualized plan 
                        for employment of the eligible 
                        individual;
                            ``(ii) uses, as a primary source of 
                        such information, to the maximum extent 
                        possible and appropriate and in 
                        accordance with confidentiality 
                        requirements--
                                    ``(I) existing information 
                                obtained for the purposes of 
                                determining the eligibility of 
                                the individual and assigning 
                                priority for an order of 
                                selection described in section 
                                101(a)(5)(A) for the 
                                individual; and
                                    ``(II) such information as 
                                can be provided by the 
                                individual and, where 
                                appropriate, by the family of 
                                the individual;
                            ``(iii) may include, to the degree 
                        needed to make such a determination, an 
                        assessment of the personality, 
                        interests, interpersonal skills, 
                        intelligence and related functional 
                        capacities, educational achievements, 
                        work experience, vocational aptitudes, 
                        personal and social adjustments, and 
                        employment opportunities of the 
                        individual, and the medical, 
                        psychiatric, psychological, and other 
                        pertinent vocational, educational, 
                        cultural, social, recreational, and 
                        environmental factors, that affect the 
                        employment and rehabilitation needs of 
                        the individual; and
                            ``(iv) may include, to the degree 
                        needed, an appraisal of the patterns of 
                        work behavior of the individual and 
                        services needed for the individual to 
                        acquire occupational skills, and to 
                        develop work attitudes, work habits, 
                        work tolerance, and social and behavior 
                        patterns necessary for successful job 
                        performance, including the utilization 
                        of work in real job situations to 
                        assess and develop the capacities of 
                        the individual to perform adequately in 
                        a work environment;
                    ``(C) referral, for the provision of 
                rehabilitation technology services to the 
                individual, to assess and develop the 
                capacities of the individual to perform in a 
                work environment; and
                    ``(D) an exploration of the individual's 
                abilities, capabilities, and capacity to 
                perform in work situations, which shall be 
                assessed periodically during trial work 
                experiences, including experiences in which the 
                individual is provided appropriate supports and 
                training.
            ``(3) Assistive technology device.--The term 
        `assistive technology device' has the meaning given 
        such term in section 3(2) of the Technology-Related 
        Assistance for Individuals With Disabilities Act of 
        1988 (29 U.S.C. 2202(2)), except that the reference in 
        such section to the term `individuals with 
        disabilities' shall be deemed to mean more than one 
        individual with a disability as defined in paragraph 
        (20)(A).
            ``(4) Assistive technology service.--The term 
        `assistive technology service' has the meaning given 
        such term in section 3(3) of the Technology-Related 
        Assistance for Individuals With Disabilities Act of 
        1988 (29 U.S.C. 2202(3)), except that the reference in 
        such section--
                    ``(A) to the term `individual with a 
                disability' shall be deemed to mean an 
                individual with a disability, as defined in 
                paragraph (20)(A); and
                    ``(B) to the term `individuals with 
                disabilities' shall be deemed to mean more than 
                one such individual.
            ``(5) Community rehabilitation program.--The term 
        `community rehabilitation program' means a program that 
        provides directly or facilitates the provision of 
        vocational rehabilitation services to individuals with 
        disabilities, and that provides, singly or in 
        combination, for an individual with a disability to 
        enable the individual to maximize opportunities for 
        employment, including career advancement--
                    ``(A) medical, psychiatric, psychological, 
                social, and vocational services that are 
                provided under one management;
                    ``(B) testing, fitting, or training in the 
                use of prosthetic and orthotic devices;
                    ``(C) recreational therapy;
                    ``(D) physical and occupational therapy;
                    ``(E) speech, language, and hearing 
                therapy;
                    ``(F) psychiatric, psychological, and 
                social services, including positive behavior 
                management;
                    ``(G) assessment for determining 
                eligibility and vocational rehabilitation 
                needs;
                    ``(H) rehabilitation technology;
                    ``(I) job development, placement, and 
                retention services;
                    ``(J) evaluation or control of specific 
                disabilities;
                    ``(K) orientation and mobility services for 
                individuals who are blind;
                    ``(L) extended employment;
                    ``(M) psychosocial rehabilitation services;
                    ``(N) supported employment services and 
                extended services;
                    ``(O) services to family members when 
                necessary to the vocational rehabilitation of 
                the individual;
                    ``(P) personal assistance services; or
                    ``(Q) services similar to the services 
                described in one of subparagraphs (A) through 
                (P).
            ``(6) Construction; cost of construction.--
                    ``(A) Construction.--The term 
                `construction' means--
                            ``(i) the construction of new 
                        buildings;
                            ``(ii) the acquisition, expansion, 
                        remodeling, alteration, and renovation 
                        of existing buildings; and
                            ``(iii) initial equipment of 
                        buildings described in clauses (i) and 
                        (ii).
                    ``(B) Cost of construction.--The term 
                ``cost of construction'' includes architects' 
                fees and the cost of acquisition of land in 
                connection with construction but does not 
                include the cost of offsite improvements.
            ``(7) Criminal act.--The term `criminal act' means 
        any crime, including an act, omission, or possession 
        under the laws of the United States or a State or unit 
        of general local government, which poses a substantial 
        threat of personal injury, notwithstanding that by 
        reason of age, insanity, or intoxication or otherwise 
        the person engaging in the act, omission, or possession 
        was legally incapable of committing a crime.
            ``(8) Designated state agency; designated state 
        unit.--
                    ``(A) Designated state agency.--The term 
                `designated State agency' means an agency 
                designated under section 101(a)(2)(A).
                    ``(B) Designated state unit.--The term 
                `designated State unit' means--
                            ``(i) any State agency unit 
                        required under section 
                        101(a)(2)(B)(ii); or
                            ``(ii) in cases in which no such 
                        unit is so required, the State agency 
                        described in section 101(a)(2)(B)(i).
            ``(9) Disability.--The term `disability' means--
                    ``(A) except as otherwise provided in 
                subparagraph (B), a physical or mental 
                impairment that constitutes or results in a 
                substantial impediment to employment; or
                    ``(B) for purposes of sections 2, 14, and 
                15, and titles II, IV, V, and VII, a physical 
                or mental impairment that substantially limits 
                one or more major life activities.
            ``(10) Drug and illegal use of drugs.--
                    ``(A) Drug.--The term `drug' means a 
                controlled substance, as defined in schedules I 
                through V of section 202 of the Controlled 
                Substances Act (21 U.S.C. 812).
                    ``(B) Illegal use of drugs.--The term 
                `illegal use of drugs' means the use of drugs, 
                the possession or distribution of which is 
                unlawful under the Controlled Substances Act. 
                Such term does not include the use of a drug 
                taken under supervision by a licensed health 
                care professional, or other uses authorized by 
                the Controlled Substances Act or other 
                provisions of Federal law.
            ``(11) Employment outcome.--The term `employment 
        outcome' means, with respect to an individual--
                    ``(A) entering or retaining full-time or, 
                if appropriate, part-time competitive 
                employment in the integrated labor market;
                    ``(B) satisfying the vocational outcome of 
                supported employment; or
                    ``(C) satisfying any other vocational 
                outcome the Secretary may determine to be 
                appropriate (including satisfying the 
                vocational outcome of self-employment, 
                telecommuting, or business ownership),
        in a manner consistent with this Act.
            ``(12) Establishment of a community rehabilitation 
        program.--The term `establishment of a community 
        rehabilitation program' includes the acquisition, 
        expansion, remodeling, or alteration of existing 
        buildings necessary to adapt them to community 
        rehabilitation program purposes or to increase their 
        effectiveness for such purposes (subject, however, to 
        such limitations as the Secretary may determine, in 
        accordance with regulations the Secretary shall 
        prescribe, in order to prevent impairment of the 
        objectives of, or duplication of, other Federal laws 
        providing Federal assistance in the construction of 
        facilities for community rehabilitation programs), and 
        may include such additional equipment and staffing as 
        the Commissioner considers appropriate.
            ``(13) Extended services.--The term `extended 
        services' means ongoing support services and other 
        appropriate services, needed to support and maintain an 
        individual with a most significant disability in 
        supported employment, that--
                    ``(A) are provided singly or in combination 
                and are organized and made available in such a 
                way as to assist an eligible individual in 
                maintaining supported employment;
                    ``(B) are based on a determination of the 
                needs of an eligible individual, as specified 
                in an individualized plan for employment; and
                    ``(C) are provided by a State agency, a 
                nonprofit private organization, employer, or 
                any other appropriate resource, after an 
                individual has made the transition from support 
                provided by the designated State unit.
            ``(14) Federal share.--
                    ``(A) In general.--Subject to subparagraph 
                (B), the term `Federal share' means 78.7 
                percent.
                    ``(B) Exception.--The term ``Federal 
                share'' means the share specifically set forth 
                in section 111(a)(3), except that with respect 
                to payments pursuant to part B of title I to 
                any State that are used to meet the costs of 
                construction of those rehabilitation facilities 
                identified in section 103(b)(2) in such State, 
                the Federal share shall be the percentages 
                determined in accordance with the provisions of 
                section 111(a)(3) applicable with respect to 
                the State.
                    ``(C) Relationship to expenditures by a 
                political subdivision.--For the purpose of 
                determining the non-Federal share with respect 
                to a State, expenditures by a political 
                subdivision thereof or by a local agency shall 
                be regarded as expenditures by such State, 
                subject to such limitations and conditions as 
                the Secretary shall by regulation prescribe.
            ``(15) Governor.--The term `Governor' means a chief 
        executive officer of a State.
            ``(16) Impartial hearing officer.--
                    ``(A) In general.--The term `impartial 
                hearing officer' means an individual--
                            ``(i) who is not an employee of a 
                        public agency (other than an 
                        administrative law judge, hearing 
                        examiner, or employee of an institution 
                        of higher education);
                            ``(ii) who is not a member of the 
                        State Rehabilitation Council described 
                        in section 105;
                            ``(iii) who has not been involved 
                        previously in the vocational 
                        rehabilitation of the applicant or 
                        client;
                            ``(iv) who has knowledge of the 
                        delivery of vocational rehabilitation 
                        services, the State plan under section 
                        101, and the Federal and State rules 
                        governing the provision of such 
                        services and training with respect to 
                        the performance of official duties; and
                            ``(v) who has no personal or 
                        financial interest that would be in 
                        conflict with the objectivity of the 
                        individual.
                    ``(B) Construction.--An individual shall 
                not be considered to be an employee of a public 
                agency for purposes of subparagraph (A)(i) 
                solely because the individual is paid by the 
                agency to serve as a hearing officer.
            ``(17) Independent living core services.--The term 
        `independent living core services' means--
                    ``(A) information and referral services;
                    ``(B) independent living skills training;
                    ``(C) peer counseling (including cross-
                disability peer counseling); and
                    ``(D) individual and systems advocacy.
            ``(18) Independent living services.--The term 
        `independent living services' includes--
                    ``(A) independent living core services; and
                    ``(B)(i) counseling services, including 
                psychological, psychotherapeutic, and related 
                services;
                    ``(ii) services related to securing housing 
                or shelter, including services related to 
                community group living, and supportive of the 
                purposes of this Act and of the titles of this 
                Act, and adaptive housing services (including 
                appropriate accommodations to and modifications 
                of any space used to serve, or occupied by, 
                individuals with disabilities);
                    ``(iii) rehabilitation technology;
                    ``(iv) mobility training;
                    ``(v) services and training for individuals 
                with cognitive and sensory disabilities, 
                including life skills training, and interpreter 
                and reader services;
                    ``(vi) personal assistance services, 
                including attendant care and the training of 
                personnel providing such services;
                    ``(vii) surveys, directories, and other 
                activities to identify appropriate housing, 
                recreation opportunities, and accessible 
                transportation, and other support services;
                    ``(viii) consumer information programs on 
                rehabilitation and independent living services 
                available under this Act, especially for 
                minorities and other individuals with 
                disabilities who have traditionally been 
                unserved or underserved by programs under this 
                Act;
                    ``(ix) education and training necessary for 
                living in a community and participating in 
                community activities;
                    ``(x) supported living;
                    ``(xi) transportation, including referral 
                and assistance for such transportation and 
                training in the use of public transportation 
                vehicles and systems;
                    ``(xii) physical rehabilitation;
                    ``(xiii) therapeutic treatment;
                    ``(xiv) provision of needed prostheses and 
                other appliances and devices;
                    ``(xv) individual and group social and 
                recreational services;
                    ``(xvi) training to develop skills 
                specifically designed for youths who are 
                individuals with disabilities to promote self-
                awareness and esteem, develop advocacy and 
                self-empowerment skills, and explore career 
                options;
                    ``(xvii) services for children;
                    ``(xviii) services under other Federal, 
                State, or local programs designed to provide 
                resources, training, counseling, or other 
                assistance, of substantial benefit in enhancing 
                the independence, productivity, and quality of 
                life of individuals with disabilities;
                    ``(xix) appropriate preventive services to 
                decrease the need of individuals assisted under 
                this Act for similar services in the future;
                    ``(xx) community awareness programs to 
                enhance the understanding and integration into 
                society of individuals with disabilities; and
                    ``(xxi) such other services as may be 
                necessary and not inconsistent with the 
                provisions of this Act.
            ``(19) Indian; american indian; indian american; 
        indian tribe.--
                    ``(A) In general.--The terms `Indian', 
                `American Indian', and `Indian American' mean 
                an individual who is a member of an Indian 
                tribe.
                    ``(B) Indian tribe.--The term `Indian 
                tribe' means any Federal or State Indian tribe, 
                band, rancheria, pueblo, colony, or community, 
                including any Alaskan native village or 
                regional village corporation (as defined in or 
                established pursuant to the Alaska Native 
                Claims Settlement Act).
            ``(20) Individual with a disability.--
                    ``(A) In general.--Except as otherwise 
                provided in subparagraph (B), the term 
                `individual with a disability' means any 
                individual who--
                            ``(i) has a physical or mental 
                        impairment which for such individual 
                        constitutes or results in a substantial 
                        impediment to employment; and
                            ``(ii) can benefit in terms of an 
                        employment outcome from vocational 
                        rehabilitation services provided 
                        pursuant to title I, III, or VI.
                    ``(B) Certain programs; limitations on 
                major life activities.--Subject to 
                subparagraphs (C), (D), (E), and (F), the term 
                `individual with a disability' means, for 
                purposes of sections 2, 14, and 15, and titles 
                II, IV, V, and VII of this Act, any person 
                who--
                            ``(i) has a physical or mental 
                        impairment which substantially limits 
                        one or more of such person's major life 
                        activities;
                            ``(ii) has a record of such an 
                        impairment; or
                            ``(iii) is regarded as having such 
                        an impairment.
                    ``(C) Rights and advocacy provisions.--
                            ``(i) In general; exclusion of 
                        individuals engaging in drug use.--For 
                        purposes of title V, the term 
                        `individual with a disability' does not 
                        include an individual who is currently 
                        engaging in the illegal use of drugs, 
                        when a covered entity acts on the basis 
                        of such use.
                            ``(ii) Exception for individuals no 
                        longer engaging in drug use.--Nothing 
                        in clause (i) shall be construed to 
                        exclude as an individual with a 
                        disability an individual who--
                                    ``(I) has successfully 
                                completed a supervised drug 
                                rehabilitation program and is 
                                no longer engaging in the 
                                illegal use of drugs, or has 
                                otherwise been rehabilitated 
                                successfully and is no longer 
                                engaging in such use;
                                    ``(II) is participating in 
                                a supervised rehabilitation 
                                program and is no longer 
                                engaging in such use; or
                                    ``(III) is erroneously 
                                regarded as engaging in such 
                                use, but is not engaging in 
                                such use;
                        except that it shall not be a violation 
                        of this Act for a covered entity to 
                        adopt or administer reasonable policies 
                        or procedures, including but not 
                        limited to drug testing, designed to 
                        ensure that an individual described in 
                        subclause (I) or (II) is no longer 
                        engaging in the illegal use of drugs.
                            ``(iii) Exclusion for certain 
                        services.--Notwithstanding clause (i), 
                        for purposes of programs and activities 
                        providing health services and services 
                        provided under titles I, II, and III, 
                        an individual shall not be excluded 
                        from the benefits of such programs or 
                        activities on the basis of his or her 
                        current illegal use of drugs if he or 
                        she is otherwise entitled to such 
                        services.
                            ``(iv) Disciplinary action.--For 
                        purposes of programs and activities 
                        providing educational services, local 
                        educational agencies may take 
                        disciplinary action pertaining to the 
                        use or possession of illegal drugs or 
                        alcohol against any student who is an 
                        individual with a disability and who 
                        currently is engaging in the illegal 
                        use of drugs or in the use of alcohol 
                        to the same extent that such 
                        disciplinary action is taken against 
                        students who are not individuals with 
                        disabilities. Furthermore, the due 
                        process procedures at section 104.36 of 
                        title 34, Code of Federal Regulations 
                        (or any corresponding similar 
                        regulation or ruling) shall not apply 
                        to such disciplinary actions.
                            ``(v) Employment; exclusion of 
                        alcoholics.--For purposes of sections 
                        503 and 504 as such sections relate to 
                        employment, the term `individual with a 
                        disability' does not include any 
                        individual who is an alcoholic whose 
                        current use of alcohol prevents such 
                        individual from performing the duties 
                        of the job in question or whose 
                        employment, by reason of such current 
                        alcohol abuse, would constitute a 
                        direct threat to property or the safety 
                        of others.
                    ``(D) Employment; exclusion of individuals 
                with certain diseases or infections.--For the 
                purposes of sections 503 and 504, as such 
                sections relate to employment, such term does 
                not include an individual who has a currently 
                contagious disease or infection and who, by 
                reason of such disease or infection, would 
                constitute a direct threat to the health or 
                safety of other individuals or who, by reason 
                of the currently contagious disease or 
                infection, is unable to perform the duties of 
                the job.
                    ``(E) Rights provisions; exclusion of 
                individuals on basis of homosexuality or 
                bisexuality.--For the purposes of sections 501, 
                503, and 504--
                            ``(i) for purposes of the 
                        application of subparagraph (B) to such 
                        sections, the term `impairment' does 
                        not include homosexuality or 
                        bisexuality; and
                            ``(ii) therefore the term 
                        `individual with a disability' does not 
                        include an individual on the basis of 
                        homosexuality or bisexuality.
                    ``(F) Rights provisions; exclusion of 
                individuals on basis of certain disorders.--For 
                the purposes of sections 501, 503, and 504, the 
                term `individual with a disability' does not 
                include an individual on the basis of--
                            ``(i) transvestism, transsexualism, 
                        pedophilia, exhibitionism, voyeurism, 
                        gender identity disorders not resulting 
                        from physical impairments, or other 
                        sexual behavior disorders;
                            ``(ii) compulsive gambling, 
                        kleptomania, or pyromania; or
                            ``(iii) psychoactive substance use 
                        disorders resulting from current 
                        illegal use of drugs.
                    ``(G) Individuals with disabilities.--The 
                term `individuals with disabilities' means more 
                than one individual with a disability.
            ``(21) Individual with a significant disability.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or (C), the term `individual 
                with a significant disability' means an 
                individual with a disability--
                            ``(i) who has a severe physical or 
                        mental impairment which seriously 
                        limits one or more functional 
                        capacities (such as mobility, 
                        communication, self-care, self-
                        direction, interpersonal skills, work 
                        tolerance, or work skills) in terms of 
                        an employment outcome;
                            ``(ii) whose vocational 
                        rehabilitation can be expected to 
                        require multiple vocational 
                        rehabilitation services over an 
                        extended period of time; and
                            ``(iii) who has one or more 
                        physical or mental disabilities 
                        resulting from amputation, arthritis, 
                        autism, blindness, burn injury, cancer, 
                        cerebral palsy, cystic fibrosis, 
                        deafness, head injury, heart disease, 
                        hemiplegia, hemophilia, respiratory or 
                        pulmonary dysfunction, mental 
                        retardation, mental illness, multiple 
                        sclerosis, muscular dystrophy, musculo-
                        skeletal disorders, neurological 
                        disorders (including stroke and 
                        epilepsy), paraplegia, quadriplegia, 
                        and other spinal cord conditions, 
                        sickle cell anemia, specific learning 
                        disability, end-stage renal disease, or 
                        another disability or combination of 
                        disabilities determined on the basis of 
                        an assessment for determining 
                        eligibility and vocational 
                        rehabilitation needs described in 
                        subparagraphs (A) and (B) of paragraph 
                        (2) to cause comparable substantial 
                        functional limitation.
                    ``(B) Independent living services and 
                centers for independent living.--For purposes 
                of title VII, the term `individual with a 
                significant disability' means an individual 
                with a severe physical or mental impairment 
                whose ability to function independently in the 
                family or community or whose ability to obtain, 
                maintain, or advance in employment is 
                substantially limited and for whom the delivery 
                of independent living services will improve the 
                ability to function, continue functioning, or 
                move towards functioning independently in the 
                family or community or to continue in 
                employment, respectively.
                    ``(C) Research and training.--For purposes 
                of title II, the term `individual with a 
                significant disability' includes an individual 
                described in subparagraph (A) or (B).
                    ``(D) Individuals with significant 
                disabilities.--The term `individuals with 
                significant disabilities' means more than one 
                individual with a significant disability.
                    ``(E) Individual with a most significant 
                disability.--
                            ``(i) In general.--The term 
                        `individual with a most significant 
                        disability', used with respect to an 
                        individual in a State, means an 
                        individual with a significant 
                        disability who meets criteria 
                        established by the State under section 
                        101(a)(5)(C).
                            ``(ii) Individuals with the most 
                        significant disabilities.--The term 
                        `individuals with the most significant 
                        disabilities' means more than one 
                        individual with a most significant 
                        disability.
            ``(22) Individual's representative; applicant's 
        representative.--The terms `individual's 
        representative' and `applicant's representative' mean a 
        parent, a family member, a guardian, an advocate, or an 
        authorized representative of an individual or 
        applicant, respectively.
            ``(23) Institution of higher education.--The term 
        `institution of higher education' has the meaning given 
        the term in section 1201(a) of the Higher Education Act 
        of 1965 (20 U.S.C. 1141(a)).
            ``(24) Local agency.--The term `local agency' means 
        an agency of a unit of general local government or of 
        an Indian tribe (or combination of such units or 
        tribes) which has an agreement with the designated 
        State agency to conduct a vocational rehabilitation 
        program under the supervision of such State agency in 
        accordance with the State plan approved under section 
        101. Nothing in the preceding sentence of this 
        paragraph or in section 101 shall be construed to 
        prevent the local agency from arranging to utilize 
        another local public or nonprofit agency to provide 
        vocational rehabilitation services if such an 
        arrangement is made part of the agreement specified in 
        this paragraph.
            ``(25) Local workforce investment board.--The term 
        `local workforce investment board' means a local 
        workforce investment board established under section 
        117 of the Workforce Investment Act of 1998.
            ``(26) Nonprofit.--The term `nonprofit', when used 
        with respect to a community rehabilitation program, 
        means a community rehabilitation program carried out by 
        a corporation or association, no part of the net 
        earnings of which inures, or may lawfully inure, to the 
        benefit of any private shareholder or individual and 
        the income of which is exempt from taxation under 
        section 501(c)(3) of the Internal Revenue Code of 1986.
            ``(27) Ongoing support services.--The term `ongoing 
        support services' means services--
                    ``(A) provided to individuals with the most 
                significant disabilities;
                    ``(B) provided, at a minimum, twice 
                monthly--
                            ``(i) to make an assessment, 
                        regarding the employment situation, at 
                        the worksite of each such individual in 
                        supported employment, or, under special 
                        circumstances, especially at the 
                        request of the client, off site; and
                            ``(ii) based on the assessment, to 
                        provide for the coordination or 
                        provision of specific intensive 
                        services, at or away from the worksite, 
                        that are needed to maintain employment 
                        stability; and
                    ``(C) consisting of--
                            ``(i) a particularized assessment 
                        supplementary to the comprehensive 
                        assessment described in paragraph 
                        (2)(B);
                            ``(ii) the provision of skilled job 
                        trainers who accompany the individual 
                        for intensive job skill training at the 
                        worksite;
                            ``(iii) job development, job 
                        retention, and placement services;
                            ``(iv) social skills training;
                            ``(v) regular observation or 
                        supervision of the individual;
                            ``(vi) followup services such as 
                        regular contact with the employers, the 
                        individuals, the individuals' 
                        representatives, and other appropriate 
                        individuals, in order to reinforce and 
                        stabilize the job placement;
                            ``(vii) facilitation of natural 
                        supports at the worksite;
                            ``(viii) any other service 
                        identified in section 103; or
                            ``(ix) a service similar to another 
                        service described in this subparagraph.
            ``(28) Personal assistance services.--The term 
        `personal assistance services' means a range of 
        services, provided by one or more persons, designed to 
        assist an individual with a disability to perform daily 
        living activities on or off the job that the individual 
        would typically perform if the individual did not have 
        a disability. Such services shall be designed to 
        increase the individual's control in life and ability 
        to perform everyday activities on or off the job.
            ``(29) Public or nonprofit.--The term `public or 
        nonprofit', used with respect to an agency or 
        organization, includes an Indian tribe.
            ``(30) Rehabilitation technology.--The term 
        `rehabilitation technology' means the systematic 
        application of technologies, engineering methodologies, 
        or scientific principles to meet the needs of and 
        address the barriers confronted by individuals with 
        disabilities in areas which include education, 
        rehabilitation, employment, transportation, independent 
        living, and recreation. The term includes 
        rehabilitation engineering, assistive technology 
        devices, and assistive technology services.
            ``(31) Secretary.--The term `Secretary', except 
        when the context otherwise requires, means the 
        Secretary of Education.
            ``(32) State.--The term `State' includes, in 
        addition to each of the several States of the United 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.
            ``(33) State workforce investment board.--The term 
        `State workforce investment board' means a State 
        workforce investment board established under section 
        111 of the Workforce Investment Act of 1998.
            ``(34) Statewide workforce investment system.--The 
        term `statewide workforce investment system' means a 
        system described in section 111(d)(2) of the Workforce 
        Investment Act of 1998.
            ``(35) Supported employment.--
                    ``(A) In general.--The term `supported 
                employment' means competitive work in 
                integrated work settings, or employment in 
                integrated work settings in which individuals 
                are working toward competitive work, consistent 
                with the strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice of the individuals, for 
                individuals with the most significant 
                disabilities--
                            ``(i)(I) for whom competitive 
                        employment has not traditionally 
                        occurred; or
                            ``(II) for whom competitive 
                        employment has been interrupted or 
                        intermittent as a result of a 
                        significant disability; and
                            ``(ii) who, because of the nature 
                        and severity of their disability, need 
                        intensive supported employment services 
                        for the period, and any extension, 
                        described in paragraph (36)(C) and 
                        extended services after the transition 
                        described in paragraph (13)(C) in order 
                        to perform such work.
                    ``(B) Certain transitional employment.--
                Such term includes transitional employment for 
                persons who are individuals with the most 
                significant disabilities due to mental illness.
            ``(36) Supported employment services.--The term 
        `supported employment services' means ongoing support 
        services and other appropriate services needed to 
        support and maintain an individual with a most 
        significant disability in supported employment, that--
                    ``(A) are provided singly or in combination 
                and are organized and made available in such a 
                way as to assist an eligible individual to 
                achieve competitive employment;
                    ``(B) are based on a determination of the 
                needs of an eligible individual, as specified 
                in an individualized plan for employment; and
                    ``(C) are provided by the designated State 
                unit for a period of time not to extend beyond 
                18 months, unless under special circumstances 
                the eligible individual and the rehabilitation 
                counselor or coordinator involved jointly agree 
                to extend the time in order to achieve the 
                rehabilitation objectives identified in the 
                individualized plan for employment.
            ``(37) Transition services.--The term `transition 
        services' means a coordinated set of activities for a 
        student, designed within an outcome-oriented process, 
        that promotes movement from school to post school 
        activities, including postsecondary education, 
        vocational training, integrated employment (including 
        supported employment), continuing and adult education, 
        adult services, independent living, or community 
        participation. The coordinated set of activities shall 
        be based upon the individual student's needs, taking 
        into account the student's preferences and interests, 
        and shall include instruction, community experiences, 
        the development of employment and other post school 
        adult living objectives, and, when appropriate, 
        acquisition of daily living skills and functional 
        vocational evaluation.
            ``(38) Vocational rehabilitation services.--The 
        term `vocational rehabilitation services' means those 
        services identified in section 103 which are provided 
        to individuals with disabilities under this Act.
            ``(39) Workforce investment activities.--The term 
        `workforce investment activities' means workforce 
        investment activities, as defined in section 101 of the 
        Workforce Investment Act of 1998, that are carried out 
        under that Act.


                         ``allotment percentage


    ``Sec. 8. (a)(1) For purposes of section 110, the allotment 
percentage for any State shall be 100 per centum less that 
percentage which bears the same ratio to 50 per centum as the 
per capita income of such State bears to the per capita income 
of the United States, except that--
            ``(A) the allotment percentage shall in no case be 
        more than 75 per centum or less than 33\1/3\ per 
        centum; and
            ``(B) the allotment percentage for the District of 
        Columbia, Puerto Rico, Guam, the Virgin Islands, 
        American Samoa, and the Commonwealth of the Northern 
        Mariana Islands shall be 75 per centum.
    ``(2) The allotment percentages shall be promulgated by the 
Secretary between October 1 and December 31 of each even-
numbered year, on the basis of the average of the per capita 
incomes of the States and of the United States for the three 
most recent consecutive years for which satisfactory data are 
available from the Department of Commerce. Such promulgation 
shall be conclusive for each of the two fiscal years in the 
period beginning on the October 1 next succeeding such 
promulgation.
    ``(3) The term `United States' means (but only for purposes 
of this subsection) the fifty States and the District of 
Columbia.
    ``(b) The population of the several States and of the 
United States shall be determined on the basis of the most 
recent data available, to be furnished by the Department of 
Commerce by October 1 of the year preceding the fiscal year for 
which funds are appropriated pursuant to statutory 
authorizations.


                            ``nonduplication


    ``Sec. 10. In determining the amount of any State's Federal 
share of expenditures for planning, administration, and 
services incurred by it under a State plan approved in 
accordance with section 101, there shall be disregarded (1) any 
portion of such expenditures which are financed by Federal 
funds provided under any other provision of law, and (2) the 
amount of any non-Federal funds required to be expended as a 
condition of receipt of such Federal funds. No payment may be 
made from funds provided under one provision of this Act 
relating to any cost with respect to which any payment is made 
under any other provision of this Act, except that this section 
shall not be construed to limit or reduce fees for services 
rendered by community rehabilitation programs.


                      ``application of other laws


    ``Sec. 11. The provisions of the Act of December 5, 1974 
(Public Law 93-510) and of title V of the Act of October 15, 
1977 (Public Law 95-134) shall not apply to the administration 
of the provisions of this Act or to the administration of any 
program or activity under this Act.


                      ``administration of the act


    ``Sec. 12. (a) In carrying out the purposes of this Act, 
the Commissioner may--
            ``(1) provide consultative services and technical 
        assistance to public or nonprofit private agencies and 
        organizations, including assistance to enable such 
        agencies and organizations to facilitate meaningful and 
        effective participation by individuals with 
        disabilities in workforce investment activities;
            ``(2) provide short-term training and technical 
        instruction, including training for the personnel of 
        community rehabilitation programs, centers for 
        independent living, and other providers of services 
        (including job coaches);
            ``(3) conduct special projects and demonstrations;
            ``(4) collect, prepare, publish, and disseminate 
        special educational or informational materials, 
        including reports of the projects for which funds are 
        provided under this Act; and
            ``(5) provide monitoring and conduct evaluations.
    ``(b)(1) In carrying out the duties under this Act, the 
Commissioner may utilize the services and facilities of any 
agency of the Federal Government and of any other public or 
nonprofit agency or organization, in accordance with agreements 
between the Commissioner and the head thereof, and may pay 
therefor, in advance or by way of reimbursement, as may be 
provided in the agreement.
    ``(2) In carrying out the provisions of this Act, the 
Commissioner shall appoint such task forces as may be necessary 
to collect and disseminate information in order to improve the 
ability of the Commissioner to carry out the provisions of this 
Act.
    ``(c) The Commissioner may promulgate such regulations as 
are considered appropriate to carry out the Commissioner's 
duties under this Act.
    ``(d) The Secretary shall promulgate regulations regarding 
the requirements for the implementation of an order of 
selection for vocational rehabilitation services under section 
101(a)(5)(A) if such services cannot be provided to all 
eligible individuals with disabilities who apply for such 
services.
    ``(e) Not later than 180 days after the date of enactment 
of the Rehabilitation Act Amendments of 1998, the Secretary 
shall receive public comment and promulgate regulations to 
implement the amendments made by the Rehabilitation Act 
Amendments of 1998.
    ``(f) In promulgating regulations to carry out this Act, 
the Secretary shall promulgate only regulations that are 
necessary to administer and ensure compliance with the specific 
requirements of this Act.
    ``(g) There are authorized to be appropriated to carry out 
this section such sums as may be necessary.


                               ``reports


    ``Sec. 13. (a) Not later than one hundred and eighty days 
after the close of each fiscal year, the Commissioner shall 
prepare and submit to the President and to the Congress a full 
and complete report on the activities carried out under this 
Act, including the activities and staffing of the information 
clearinghouse under section 15.
    ``(b) The Commissioner shall collect information to 
determine whether the purposes of this Act are being met and to 
assess the performance of programs carried out under this Act. 
The Commissioner shall take whatever action is necessary to 
assure that the identity of each individual for which 
information is supplied under this section is kept 
confidential, except as otherwise required by law (including 
regulation).
    ``(c) In preparing the report, the Commissioner shall 
annually collect and include in the report information based on 
the information submitted by States in accordance with section 
101(a)(10), including information on administrative costs as 
required by section 101(a)(10)(D). The Commissioner shall, to 
the maximum extent appropriate, include in the report all 
information that is required to be submitted in the reports 
described in section 136(d) of the Workforce Investment Act of 
1998 and that pertains to the employment of individuals with 
disabilities.


                              ``evaluation


    ``Sec. 14. (a) For the purpose of improving program 
management and effectiveness, the Secretary, in consultation 
with the Commissioner, shall evaluate all the programs 
authorized by this Act, their general effectiveness in relation 
to their cost, their impact on related programs, and their 
structure and mechanisms for delivery of services, using 
appropriate methodology and evaluative research designs. The 
Secretary shall establish and use standards for the evaluations 
required by this subsection. Such an evaluation shall be 
conducted by a person not immediately involved in the 
administration of the program evaluated.
    ``(b) In carrying out evaluations under this section, the 
Secretary shall obtain the opinions of program and project 
participants about the strengths and weaknesses of the programs 
and projects.
    ``(c) The Secretary shall take the necessary action to 
assure that all studies, evaluations, proposals, and data 
produced or developed with Federal funds under this Act shall 
become the property of the United States.
    ``(d) Such information as the Secretary may determine to be 
necessary for purposes of the evaluations conducted under this 
section shall be made available upon request of the Secretary, 
by the departments and agencies of the executive branch.
    ``(e)(1) To assess the linkages between vocational 
rehabilitation services and economic and noneconomic outcomes, 
the Secretary shall continue to conduct a longitudinal study of 
a national sample of applicants for the services.
    ``(2) The study shall address factors related to attrition 
and completion of the program through which the services are 
provided and factors within and outside the program affecting 
results. Appropriate comparisons shall be used to contrast the 
experiences of similar persons who do not obtain the services.
    ``(3) The study shall be planned to cover the period 
beginning on the application of individuals with disabilities 
for the services, through the eligibility determination and 
provision of services for the individuals, and a further period 
of not less than 2 years after the termination of services.
    ``(f)(1) The Commissioner shall identify and disseminate 
information on exemplary practices concerning vocational 
rehabilitation.
    ``(2) To facilitate compliance with paragraph (1), the 
Commissioner shall conduct studies and analyses that identify 
exemplary practices concerning vocational rehabilitation, 
including studies in areas relating to providing informed 
choice in the rehabilitation process, promoting consumer 
satisfaction, promoting job placement and retention, providing 
supported employment, providing services to particular 
disability populations, financing personal assistance services, 
providing assistive technology devices and assistive technology 
services, entering into cooperative agreements, establishing 
standards and certification for community rehabilitation 
programs, converting from nonintegrated to integrated 
employment, and providing caseload management.
    ``(g) There are authorized to be appropriated to carry out 
this section such sums as may be necessary.


                      ``information clearinghouse


    ``Sec. 15. (a) The Secretary shall establish a central 
clearinghouse for information and resource availability for 
individuals with disabilities which shall provide information 
and data regarding--
            ``(1) the location, provision, and availability of 
        services and programs for individuals with 
        disabilities, including such information and data 
        provided by State workforce investment boards regarding 
        such services and programs authorized under title I of 
        such Act;
            ``(2) research and recent medical and scientific 
        developments bearing on disabilities (and their 
        prevention, amelioration, causes, and cures); and
            ``(3) the current numbers of individuals with 
        disabilities and their needs.
The clearinghouse shall also provide any other relevant 
information and data which the Secretary considers appropriate.
    ``(b) The Commissioner may assist the Secretary to develop 
within the Department of Education a coordinated system of 
information and data retrieval, which will have the capacity 
and responsibility to provide information regarding the 
information and data referred to in subsection (a) of this 
section to the Congress, public and private agencies and 
organizations, individuals with disabilities and their 
families, professionals in fields serving such individuals, and 
the general public.
    ``(c) The office established to carry out the provisions of 
this section shall be known as the `Office of Information and 
Resources for Individuals with Disabilities'.
    ``(d) There are authorized to be appropriated to carry out 
this section such sums as may be necessary.


                          ``transfer of funds


    ``Sec. 16. (a) Except as provided in subsection (b) of this 
section, no funds appropriated under this Act for any program 
or activity may be used for any purpose other than that for 
which the funds were specifically authorized.
    ``(b) No more than 1 percent of funds appropriated for 
discretionary grants, contracts, or cooperative agreements 
authorized by this Act may be used for the purpose of providing 
non-Federal panels of experts to review applications for such 
grants, contracts, or cooperative agreements.


                         ``state administration


    ``Sec. 17. The application of any State rule or policy 
relating to the administration or operation of programs funded 
by this Act (including any rule or policy based on State 
interpretation of any Federal law, regulation, or guideline) 
shall be identified as a State imposed requirement.


                        ``review of applications


    ``Sec. 18. Applications for grants in excess of $100,000 in 
the aggregate authorized to be funded under this Act, other 
than grants primarily for the purpose of conducting 
dissemination or conferences, shall be reviewed by panels of 
experts which shall include a majority of non-Federal members. 
Non-Federal members may be provided travel, per diem, and 
consultant fees not to exceed the daily equivalent of the rate 
of pay for level 4 of the Senior Executive Service Schedule 
under section 5382 of title 5, United States Code.

``SEC. 19. CARRYOVER.

    ``(a) In General.--Except as provided in subsection (b), 
and notwithstanding any other provision of law--
            ``(1) any funds appropriated for a fiscal year to 
        carry out any grant program under part B of title I, 
        section 509 (except as provided in section 509(b)), 
        part B of title VI, part B or C of chapter 1 of title 
        VII, or chapter 2 of title VII (except as provided in 
        section 752(b)), including any funds reallotted under 
        any such grant program, that are not obligated and 
        expended by recipients prior to the beginning of the 
        succeeding fiscal year; or
            ``(2) any amounts of program income, including 
        reimbursement payments under the Social Security Act 
        (42 U.S.C. 301 et seq.), received by recipients under 
        any grant program specified in paragraph (1) that are 
        not obligated and expended by recipients prior to the 
        beginning of the fiscal year succeeding the fiscal year 
        in which such amounts were received,
shall remain available for obligation and expenditure by such 
recipients during such succeeding fiscal year.
    ``(b) Non-Federal Share.--Such funds shall remain available 
for obligation and expenditure by a recipient as provided in 
subsection (a) only to the extent that the recipient complied 
with any Federal share requirements applicable to the program 
for the fiscal year for which the funds were appropriated.

``SEC. 20. CLIENT ASSISTANCE INFORMATION.

    ``All programs, including community rehabilitation 
programs, and projects, that provide services to individuals 
with disabilities under this Act shall advise such individuals 
who are applicants for or recipients of the services, or the 
applicants' representatives or individuals' representatives, of 
the availability and purposes of the client assistance program 
under section 112, including information on means of seeking 
assistance under such program.

``SEC. 21. TRADITIONALLY UNDERSERVED POPULATIONS.

    ``(a) Findings.--With respect to the programs authorized in 
titles II through VII, the Congress finds as follows:
            ``(1) Racial profile.--The racial profile of 
        America is rapidly changing. While the rate of increase 
        for white Americans is 3.2 percent, the rate of 
        increase for racial and ethnic minorities is much 
        higher: 38.6 percent for Latinos, 14.6 percent for 
        African-Americans, and 40.1 percent for Asian-Americans 
        and other ethnic groups. By the year 2000, the Nation 
        will have 260,000,000 people, one of every three of 
        whom will be either African-American, Latino, or Asian-
        American.
            ``(2) Rate of disability.--Ethnic and racial 
        minorities tend to have disabling conditions at a 
        disproportionately high rate. The rate of work-related 
        disability for American Indians is about one and one-
        half times that of the general population. African-
        Americans are also one and one-half times more likely 
        to be disabled than whites and twice as likely to be 
        significantly disabled.
            ``(3) Inequitable treatment.--Patterns of 
        inequitable treatment of minorities have been 
        documented in all major junctures of the vocational 
        rehabilitation process. As compared to white Americans, 
        a larger percentage of African-American applicants to 
        the vocational rehabilitation system is denied 
        acceptance. Of applicants accepted for service, a 
        larger percentage of African-American cases is closed 
        without being rehabilitated. Minorities are provided 
        less training than their white counterparts. 
        Consistently, less money is spent on minorities than on 
        their white counterparts.
            ``(4) Recruitment.--Recruitment efforts within 
        vocational rehabilitation at the level of preservice 
        training, continuing education, and in-service training 
        must focus on bringing larger numbers of minorities 
        into the profession in order to provide appropriate 
        practitioner knowledge, role models, and sufficient 
        manpower to address the clearly changing demography of 
        vocational rehabilitation.
    ``(b) Outreach to Minorities.--
            ``(1) In general.--For each fiscal year, the 
        Commissioner and the Director of the National Institute 
        on Disability and Rehabilitation Research (referred to 
        in this subsection as the `Director') shall reserve 1 
        percent of the funds appropriated for the fiscal year 
        for programs authorized under titles II, III, VI, and 
        VII to carry out this subsection. The Commissioner and 
        the Director shall use the reserved funds to carry out 
        1 or more of the activities described in paragraph (2) 
        through a grant, contract, or cooperative agreement.
            ``(2) Activities.--The activities carried out by 
        the Commissioner and the Director shall include 1 or 
        more of the following:
                    ``(A) Making awards to minority entities 
                and Indian tribes to carry out activities under 
                the programs authorized under titles II, III, 
                VI, and VII.
                    ``(B) Making awards to minority entities 
                and Indian tribes to conduct research, 
                training, technical assistance, or a related 
                activity, to improve services provided under 
                this Act, especially services provided to 
                individuals from minority backgrounds.
                    ``(C) Making awards to entities described 
                in paragraph (3) to provide outreach and 
                technical assistance to minority entities and 
                Indian tribes to promote their participation in 
                activities funded under this Act, including 
                assistance to enhance their capacity to carry 
                out such activities.
            ``(3) Eligibility.--To be eligible to receive an 
        award under paragraph (2)(C), an entity shall be a 
        State or a public or private nonprofit agency or 
        organization, such as an institution of higher 
        education or an Indian tribe.
            ``(4) Report.--In each fiscal year, the 
        Commissioner and the Director shall prepare and submit 
        to Congress a report that describes the activities 
        funded under this subsection for the preceding fiscal 
        year.
            ``(5) Definitions.--In this subsection:
                    ``(A) Historically black college or 
                university.--The term `historically Black 
                college or university' means a part B 
                institution, as defined in section 322(2) of 
                the Higher Education Act of 1965 (20 U.S.C. 
                1061(2)).
                    ``(B) Minority entity.--The term `minority 
                entity' means an entity that is a historically 
                Black college or university, a Hispanic-serving 
                institution of higher education, an American 
                Indian tribal college or university, or another 
                institution of higher education whose minority 
                student enrollment is at least 50 percent.
    ``(c) Demonstration.--In awarding grants, or entering into 
contracts or cooperative agreements under titles I, II, III, 
VI, and VII, and section 509, the Commissioner and the 
Director, in appropriate cases, shall require applicants to 
demonstrate how the applicants will address, in whole or in 
part, the needs of individuals with disabilities from minority 
backgrounds.''.

SEC. 404. VOCATIONAL REHABILITATION SERVICES.

    Title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et 
seq.) is amended to read as follows:

             ``TITLE I--VOCATIONAL REHABILITATION SERVICES

                      ``PART A--GENERAL PROVISIONS

``SEC. 100. DECLARATION OF POLICY; AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Findings; Purpose; Policy.--
            ``(1) Findings.--Congress finds that--
                    ``(A) work--
                            ``(i) is a valued activity, both 
                        for individuals and society; and
                            ``(ii) fulfills the need of an 
                        individual to be productive, promotes 
                        independence, enhances self-esteem, and 
                        allows for participation in the 
                        mainstream of life in the United 
                        States;
                    ``(B) as a group, individuals with 
                disabilities experience staggering levels of 
                unemployment and poverty;
                    ``(C) individuals with disabilities, 
                including individuals with the most significant 
                disabilities, have demonstrated their ability 
                to achieve gainful employment in integrated 
                settings if appropriate services and supports 
                are provided;
                    ``(D) reasons for significant numbers of 
                individuals with disabilities not working, or 
                working at levels not commensurate with their 
                abilities and capabilities, include--
                            ``(i) discrimination;
                            ``(ii) lack of accessible and 
                        available transportation;
                            ``(iii) fear of losing health 
                        coverage under the medicare and 
                        medicaid programs carried out under 
                        titles XVIII and XIX of the Social 
                        Security Act (42 U.S.C. 1395 et seq. 
                        and 1396 et seq.) or fear of losing 
                        private health insurance; and
                            ``(iv) lack of education, training, 
                        and supports to meet job qualification 
                        standards necessary to secure, retain, 
                        regain, or advance in employment;
                    ``(E) enforcement of title V and of the 
                Americans with Disabilities Act of 1990 (42 
                U.S.C. 12101 et seq.) holds the promise of 
                ending discrimination for individuals with 
                disabilities;
                    ``(F) the provision of workforce investment 
                activities and vocational rehabilitation 
                services can enable individuals with 
                disabilities, including individuals with the 
                most significant disabilities, to pursue 
                meaningful careers by securing gainful 
                employment commensurate with their abilities 
                and capabilities; and
                    ``(G) linkages between the vocational 
                rehabilitation programs established under this 
                title and other components of the statewide 
                workforce investment systems are critical to 
                ensure effective and meaningful participation 
                by individuals with disabilities in workforce 
                investment activities.
            ``(2) Purpose.--The purpose of this title is to 
        assist States in operating statewide comprehensive, 
        coordinated, effective, efficient, and accountable 
        programs of vocational rehabilitation, each of which 
        is--
                    ``(A) an integral part of a statewide 
                workforce investment system; and
                    ``(B) designed to assess, plan, develop, 
                and provide vocational rehabilitation services 
                for individuals with disabilities, consistent 
                with their strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice, so that such individuals 
                may prepare for and engage in gainful 
                employment.
            ``(3) Policy.--It is the policy of the United 
        States that such a program shall be carried out in a 
        manner consistent with the following principles:
                    ``(A) Individuals with disabilities, 
                including individuals with the most significant 
                disabilities, are generally presumed to be 
                capable of engaging in gainful employment and 
                the provision of individualized vocational 
                rehabilitation services can improve their 
                ability to become gainfully employed.
                    ``(B) Individuals with disabilities must be 
                provided the opportunities to obtain gainful 
                employment in integrated settings.
                    ``(C) Individuals who are applicants for 
                such programs or eligible to participate in 
                such programs must be active and full partners 
                in the vocational rehabilitation process, 
                making meaningful and informed choices--
                            ``(i) during assessments for 
                        determining eligibility and vocational 
                        rehabilitation needs; and
                            ``(ii) in the selection of 
                        employment outcomes for the 
                        individuals, services needed to achieve 
                        the outcomes, entities providing such 
                        services, and the methods used to 
                        secure such services.
                    ``(D) Families and other natural supports 
                can play important roles in the success of a 
                vocational rehabilitation program, if the 
                individual with a disability involved requests, 
                desires, or needs such supports.
                    ``(E) Vocational rehabilitation counselors 
                that are trained and prepared in accordance 
                with State policies and procedures as described 
                in section 101(a)(7)(B) (referred to 
                individually in this title as a `qualified 
                vocational rehabilitation counselor'), other 
                qualified rehabilitation personnel, and other 
                qualified personnel facilitate the 
                accomplishment of the employment outcomes and 
                objectives of an individual.
                    ``(F) Individuals with disabilities and the 
                individuals' representatives are full partners 
                in a vocational rehabilitation program and must 
                be involved on a regular basis and in a 
                meaningful manner with respect to policy 
                development and implementation.
                    ``(G) Accountability measures must 
                facilitate the accomplishment of the goals and 
                objectives of the program, including providing 
                vocational rehabilitation services to, among 
                others, individuals with the most significant 
                disabilities.
    ``(b) Authorization of Appropriations.--
            ``(1) In general.--For the purpose of making grants 
        to States under part B to assist States in meeting the 
        costs of vocational rehabilitation services provided in 
        accordance with State plans under section 101, there 
        are authorized to be appropriated such sums as may be 
        necessary for fiscal years 1999 through 2003, except 
        that the amount to be appropriated for a fiscal year 
        shall not be less than the amount of the appropriation 
        under this paragraph for the immediately preceding 
        fiscal year, increased by the percentage change in the 
        Consumer Price Index determined under subsection (c) 
        for the immediately preceding fiscal year.
            ``(2) Reference.--The reference in paragraph (1) to 
        grants to States under part B shall not be considered 
        to refer to grants under section 112.
    ``(c) Consumer Price Index.--
            ``(1) Percentage change.--No later than November 15 
        of each fiscal year (beginning with fiscal year 1979), 
        the Secretary of Labor shall publish in the Federal 
        Register the percentage change in the Consumer Price 
        Index published for October of the preceding fiscal 
        year and October of the fiscal year in which such 
        publication is made.
            ``(2) Application.--
                    ``(A) Increase.--If in any fiscal year the 
                percentage change published under paragraph (1) 
                indicates an increase in the Consumer Price 
                Index, then the amount to be appropriated under 
                subsection (b)(1) for the subsequent fiscal 
                year shall be at least the amount appropriated 
                under subsection (b)(1) for the fiscal year in 
                which the publication is made under paragraph 
                (1) increased by such percentage change.
                    ``(B) No increase or decrease.--If in any 
                fiscal year the percentage change published 
                under paragraph (1) does not indicate an 
                increase in the Consumer Price Index, then the 
                amount to be appropriated under subsection 
                (b)(1) for the subsequent fiscal year shall be 
                at least the amount appropriated under 
                subsection (b)(1) for the fiscal year in which 
                the publication is made under paragraph (1).
            ``(3) Definition.--For purposes of this section, 
        the term `Consumer Price Index' means the Consumer 
        Price Index for All Urban Consumers, published monthly 
        by the Bureau of Labor Statistics.
    ``(d) Extension.--
            ``(1) In general.--
                    ``(A) Authorization or duration of 
                program.--Unless the Congress in the regular 
                session which ends prior to the beginning of 
                the terminal fiscal year--
                            ``(i) of the authorization of 
                        appropriations for the program 
                        authorized by the State grant program 
                        under part B of this title; or
                            ``(ii) of the duration of the 
                        program authorized by the State grant 
                        program under part B of this title;
                has passed legislation which would have the 
                effect of extending the authorization or 
                duration (as the case may be) of such program, 
                such authorization or duration is automatically 
                extended for 1 additional year for the program 
                authorized by this title.
                    ``(B) Calculation.--The amount authorized 
                to be appropriated for the additional fiscal 
                year described in subparagraph (A) shall be an 
                amount equal to the amount appropriated for 
                such program for fiscal year 2003, increased by 
                the percentage change in the Consumer Price 
                Index determined under subsection (c) for the 
                immediately preceding fiscal year, if the 
                percentage change indicates an increase.
            ``(2) Construction.--
                    ``(A) Passage of legislation.--For the 
                purposes of paragraph (1)(A), Congress shall 
                not be deemed to have passed legislation unless 
                such legislation becomes law.
                    ``(B) Acts or determinations of 
                commissioner.--In any case where the 
                Commissioner is required under an applicable 
                statute to carry out certain acts or make 
                certain determinations which are necessary for 
                the continuation of the program authorized by 
                this title, if such acts or determinations are 
                required during the terminal year of such 
                program, such acts and determinations shall be 
                required during any fiscal year in which the 
                extension described in that part of paragraph 
                (1) that follows clause (ii) of paragraph 
                (1)(A) is in effect.

``SEC. 101. STATE PLANS.

    ``(a) Plan Requirements.--
            ``(1) In general.--
                    ``(A) Submission.--To be eligible to 
                participate in programs under this title, a 
                State shall submit to the Commissioner a State 
                plan for vocational rehabilitation services 
                that meets the requirements of this section, on 
                the same date that the State submits a State 
                plan under section 112 of the Workforce 
                Investment Act of 1998.
                    ``(B) Nonduplication.--The State shall not 
                be required to submit, in the State plan for 
                vocational rehabilitation services, policies, 
                procedures, or descriptions required under this 
                title that have been previously submitted to 
                the Commissioner and that demonstrate that such 
                State meets the requirements of this title, 
                including any policies, procedures, or 
                descriptions submitted under this title as in 
                effect on the day before the effective date of 
                the Rehabilitation Act Amendments of 1998.
                    ``(C) Duration.--The State plan shall 
                remain in effect subject to the submission of 
                such modifications as the State determines to 
                be necessary or as the Commissioner may require 
                based on a change in State policy, a change in 
                Federal law (including regulations), an 
                interpretation of this Act by a Federal court 
                or the highest court of the State, or a finding 
                by the Commissioner of State noncompliance with 
                the requirements of this Act, until the State 
                submits and receives approval of a new State 
                plan.
            ``(2) Designated state agency; designated state 
        unit.--
                    ``(A) Designated state agency.--The State 
                plan shall designate a State agency as the sole 
                State agency to administer the plan, or to 
                supervise the administration of the plan by a 
                local agency, except that--
                            ``(i) where, under State law, the 
                        State agency for individuals who are 
                        blind or another agency that provides 
                        assistance or services to adults who 
                        are blind is authorized to provide 
                        vocational rehabilitation services to 
                        individuals who are blind, that agency 
                        may be designated as the sole State 
                        agency to administer the part of the 
                        plan under which vocational 
                        rehabilitation services are provided 
                        for individuals who are blind (or to 
                        supervise the administration of such 
                        part by a local agency) and a separate 
                        State agency may be designated as the 
                        sole State agency to administer or 
                        supervise the administration of the 
                        rest of the State plan;
                            ``(ii) the Commissioner, on the 
                        request of a State, may authorize the 
                        designated State agency to share 
                        funding and administrative 
                        responsibility with another agency of 
                        the State or with a local agency in 
                        order to permit the agencies to carry 
                        out a joint program to provide services 
                        to individuals with disabilities, and 
                        may waive compliance, with respect to 
                        vocational rehabilitation services 
                        furnished under the joint program, with 
                        the requirement of paragraph (4) that 
                        the plan be in effect in all political 
                        subdivisions of the State; and
                            ``(iii) in the case of American 
                        Samoa, the appropriate State agency 
                        shall be the Governor of American 
                        Samoa.
                    ``(B) Designated state unit.--The State 
                agency designated under subparagraph (A) shall 
                be--
                            ``(i) a State agency primarily 
                        concerned with vocational 
                        rehabilitation, or vocational and other 
                        rehabilitation, of individuals with 
                        disabilities; or
                            ``(ii) if not such an agency, the 
                        State agency (or each State agency if 2 
                        are so designated) shall include a 
                        vocational rehabilitation bureau, 
                        division, or other organizational unit 
                        that--
                                    ``(I) is primarily 
                                concerned with vocational 
                                rehabilitation, or vocational 
                                and other rehabilitation, of 
                                individuals with disabilities, 
                                and is responsible for the 
                                vocational rehabilitation 
                                program of the designated State 
                                agency;
                                    ``(II) has a full-time 
                                director;
                                    ``(III) has a staff 
                                employed on the rehabilitation 
                                work of the organizational unit 
                                all or substantially all of 
                                whom are employed full time on 
                                such work; and
                                    ``(IV) is located at an 
                                organizational level and has an 
                                organizational status within 
                                the designated State agency 
                                comparable to that of other 
                                major organizational units of 
                                the designated State agency.
                    ``(C) Responsibility for services for the 
                blind.--If the State has designated only 1 
                State agency pursuant to subparagraph (A), the 
                State may assign responsibility for the part of 
                the plan under which vocational rehabilitation 
                services are provided for individuals who are 
                blind to an organizational unit of the 
                designated State agency and assign 
                responsibility for the rest of the plan to 
                another organizational unit of the designated 
                State agency, with the provisions of 
                subparagraph (B) applying separately to each of 
                the designated State units.
            ``(3) Non-federal share.--The State plan shall 
        provide for financial participation by the State, or if 
        the State so elects, by the State and local agencies, 
        to provide the amount of the non-Federal share of the 
        cost of carrying out part B.
            ``(4) Statewideness.--The State plan shall provide 
        that the plan shall be in effect in all political 
        subdivisions of the State, except that--
                    ``(A) in the case of any activity that, in 
                the judgment of the Commissioner, is likely to 
                assist in promoting the vocational 
                rehabilitation of substantially larger numbers 
                of individuals with disabilities or groups of 
                individuals with disabilities, the Commissioner 
                may waive compliance with the requirement that 
                the plan be in effect in all political 
                subdivisions of the State to the extent and for 
                such period as may be provided in accordance 
                with regulations prescribed by the 
                Commissioner, but only if the non-Federal share 
                of the cost of the vocational rehabilitation 
                services involved is met from funds made 
                available by a local agency (including funds 
                contributed to such agency by a private agency, 
                organization, or individual); and
                    ``(B) in a case in which earmarked funds 
                are used toward the non-Federal share and such 
                funds are earmarked for particular geographic 
                areas within the State, the earmarked funds may 
                be used in such areas if the State notifies the 
                Commissioner that the State cannot provide the 
                full non-Federal share without such funds.
            ``(5) Order of selection for vocational 
        rehabilitation services.--In the event that vocational 
        rehabilitation services cannot be provided to all 
        eligible individuals with disabilities in the State who 
        apply for the services, the State plan shall--
                    ``(A) show the order to be followed in 
                selecting eligible individuals to be provided 
                vocational rehabilitation services;
                    ``(B) provide the justification for the 
                order of selection;
                    ``(C) include an assurance that, in 
                accordance with criteria established by the 
                State for the order of selection, individuals 
                with the most significant disabilities will be 
                selected first for the provision of vocational 
                rehabilitation services; and
                    ``(D) provide that eligible individuals, 
                who do not meet the order of selection 
                criteria, shall have access to services 
                provided through the information and referral 
                system implemented under paragraph (20).
            ``(6) Methods for administration.--
                    ``(A) In general.--The State plan shall 
                provide for such methods of administration as 
                are found by the Commissioner to be necessary 
                for the proper and efficient administration of 
                the plan.
                    ``(B) Employment of individuals with 
                disabilities.--The State plan shall provide 
                that the designated State agency, and entities 
                carrying out community rehabilitation programs 
                in the State, who are in receipt of assistance 
                under this title shall take affirmative action 
                to employ and advance in employment qualified 
                individuals with disabilities covered under, 
                and on the same terms and conditions as set 
                forth in, section 503.
                    ``(C) Facilities.--The State plan shall 
                provide that facilities used in connection with 
                the delivery of services assisted under the 
                State plan shall comply with the Act entitled 
                `An Act to insure that certain buildings 
                financed with Federal funds are so designed and 
                constructed as to be accessible to the 
                physically handicapped', approved on August 12, 
                1968 (commonly known as the `Architectural 
                Barriers Act of 1968'), with section 504, and 
                with the Americans with Disabilities Act of 
                1990.
            ``(7) Comprehensive system of personnel 
        development.--The State plan shall--
                    ``(A) include a description (consistent 
                with the purposes of this Act) of a 
                comprehensive system of personnel development, 
                which shall include--
                            ``(i) a description of the 
                        procedures and activities the 
                        designated State agency will undertake 
                        to ensure an adequate supply of 
                        qualified State rehabilitation 
                        professionals and paraprofessionals for 
                        the designated State unit, including 
                        the development and maintenance of a 
                        system for determining, on an annual 
                        basis--
                                    ``(I) the number and type 
                                of personnel that are employed 
                                by the designated State unit in 
                                the provision of vocational 
                                rehabilitation services, 
                                including ratios of qualified 
                                vocational rehabilitation 
                                counselors to clients; and
                                    ``(II) the number and type 
                                of personnel needed by the 
                                State, and a projection of the 
                                numbers of such personnel that 
                                will be needed in 5 years, 
                                based on projections of the 
                                number of individuals to be 
                                served, the number of such 
                                personnel who are expected to 
                                retire or leave the vocational 
                                rehabilitation field, and other 
                                relevant factors;
                            ``(ii) where appropriate, a 
                        description of the manner in which 
                        activities will be undertaken under 
                        this section to coordinate the system 
                        of personnel development with personnel 
                        development activities under the 
                        Individuals with Disabilities Education 
                        Act (20 U.S.C. 1400 et seq.);
                            ``(iii) a description of the 
                        development and maintenance of a system 
                        of determining, on an annual basis, 
                        information on the programs of 
                        institutions of higher education within 
                        the State that are preparing 
                        rehabilitation professionals, 
                        including--
                                    ``(I) the numbers of 
                                students enrolled in such 
                                programs; and
                                    ``(II) the number of such 
                                students who graduated with 
                                certification or licensure, or 
                                with credentials to qualify for 
                                certification or licensure, as 
                                a rehabilitation professional 
                                during the past year;
                            ``(iv) a description of the 
                        development, updating, and 
                        implementation of a plan that--
                                    ``(I) will address the 
                                current and projected 
                                vocational rehabilitation 
                                services personnel training 
                                needs for the designated State 
                                unit; and
                                    ``(II) provides for the 
                                coordination and facilitation 
                                of efforts between the 
                                designated State unit, 
                                institutions of higher 
                                education, and professional 
                                associations to recruit, 
                                prepare, and retain qualified 
                                personnel, including personnel 
                                from minority backgrounds, and 
                                personnel who are individuals 
                                with disabilities; and
                            ``(v) a description of the 
                        procedures and activities the 
                        designated State agency will undertake 
                        to ensure that all personnel employed 
                        by the designated State unit are 
                        appropriately and adequately trained 
                        and prepared, including--
                                    ``(I) a system for the 
                                continuing education of 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit, 
                                particularly with respect to 
                                rehabilitation technology; and
                                    ``(II) procedures for 
                                acquiring and disseminating to 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit 
                                significant knowledge from 
                                research and other sources, 
                                including procedures for 
                                providing training regarding 
                                the amendments to this Act made 
                                by the Rehabilitation Act 
                                Amendments of 1998;
                    ``(B) set forth policies and procedures 
                relating to the establishment and maintenance 
                of standards to ensure that personnel, 
                including rehabilitation professionals and 
                paraprofessionals, needed within the designated 
                State unit to carry out this part are 
                appropriately and adequately prepared and 
                trained, including--
                            ``(i) the establishment and 
                        maintenance of standards that are 
                        consistent with any national or State 
                        approved or recognized certification, 
                        licensing, registration, or other 
                        comparable requirements that apply to 
                        the area in which such personnel are 
                        providing vocational rehabilitation 
                        services; and
                            ``(ii) to the extent that such 
                        standards are not based on the highest 
                        requirements in the State applicable to 
                        a specific profession or discipline, 
                        the steps the State is taking to 
                        require the retraining or hiring of 
                        personnel within the designated State 
                        unit that meet appropriate professional 
                        requirements in the State; and
                    ``(C) contain provisions relating to the 
                establishment and maintenance of minimum 
                standards to ensure the availability of 
                personnel within the designated State unit, to 
                the maximum extent feasible, trained to 
                communicate in the native language or mode of 
                communication of an applicant or eligible 
                individual.
            ``(8) Comparable services and benefits.--
                    ``(A) Determination of availability.--
                            ``(i) In general.--The State plan 
                        shall include an assurance that, prior 
                        to providing any vocational 
                        rehabilitation service to an eligible 
                        individual, except those services 
                        specified in paragraph (5)(D) and in 
                        paragraphs (1) through (4) and (14) of 
                        section 103(a), the designated State 
                        unit will determine whether comparable 
                        services and benefits are available 
                        under any other program (other than a 
                        program carried out under this title) 
                        unless such a determination would 
                        interrupt or delay--
                                    ``(I) the progress of the 
                                individual toward achieving the 
                                employment outcome identified 
                                in the individualized plan for 
                                employment of the individual in 
                                accordance with section 102(b);
                                    ``(II) an immediate job 
                                placement; or
                                    ``(III) the provision of 
                                such service to any individual 
                                at extreme medical risk.
                            ``(ii) Awards and scholarships.--
                        For purposes of clause (i), comparable 
                        benefits do not include awards and 
                        scholarships based on merit.
                    ``(B) Interagency agreement.--The State 
                plan shall include an assurance that the 
                Governor of the State, in consultation with the 
                entity in the State responsible for the 
                vocational rehabilitation program and other 
                appropriate agencies, will ensure that an 
                interagency agreement or other mechanism for 
                interagency coordination takes effect between 
                any appropriate public entity, including the 
                State entity responsible for administering the 
                State medicaid program, a public institution of 
                higher education, and a component of the 
                statewide workforce investment system, and the 
                designated State unit, in order to ensure the 
                provision of vocational rehabilitation services 
                described in subparagraph (A) (other than those 
                services specified in paragraph (5)(D), and in 
                paragraphs (1) through (4) and (14) of section 
                103(a)), that are included in the 
                individualized plan for employment of an 
                eligible individual, including the provision of 
                such vocational rehabilitation services during 
                the pendency of any dispute described in clause 
                (iii). Such agreement or mechanism shall 
                include the following:
                            ``(i) Agency financial 
                        responsibility.--An identification of, 
                        or a description of a method for 
                        defining, the financial responsibility 
                        of such public entity for providing 
                        such services, and a provision stating 
                        the financial responsibility of such 
                        public entity for providing such 
                        services.
                            ``(ii) Conditions, terms, and 
                        procedures of reimbursement.--
                        Information specifying the conditions, 
                        terms, and procedures under which a 
                        designated State unit shall be 
                        reimbursed by other public entities for 
                        providing such services, based on the 
                        provisions of such agreement or 
                        mechanism.
                            ``(iii) Interagency disputes.--
                        Information specifying procedures for 
                        resolving interagency disputes under 
                        the agreement or other mechanism 
                        (including procedures under which the 
                        designated State unit may initiate 
                        proceedings to secure reimbursement 
                        from other public entities or otherwise 
                        implement the provisions of the 
                        agreement or mechanism).
                            ``(iv) Coordination of services 
                        procedures.--Information specifying 
                        policies and procedures for public 
                        entities to determine and identify the 
                        interagency coordination 
                        responsibilities of each public entity 
                        to promote the coordination and timely 
                        delivery of vocational rehabilitation 
                        services (except those services 
                        specified in paragraph (5)(D) and in 
                        paragraphs (1) through (4) and (14) of 
                        section 103(a)).
                    ``(C) Responsibilities of other public 
                entities.--
                            ``(i) Responsibilities under other 
                        law.--Notwithstanding subparagraph (B), 
                        if any public entity other than a 
                        designated State unit is obligated 
                        under Federal or State law, or assigned 
                        responsibility under State policy or 
                        under this paragraph, to provide or pay 
                        for any services that are also 
                        considered to be vocational 
                        rehabilitation services (other than 
                        those specified in paragraph (5)(D) and 
                        in paragraphs (1) through (4) and (14) 
                        of section 103(a)), such public entity 
                        shall fulfill that obligation or 
                        responsibility, either directly or by 
                        contract or other arrangement.
                            ``(ii) Reimbursement.--If a public 
                        entity other than the designated State 
                        unit fails to provide or pay for the 
                        services described in clause (i) for an 
                        eligible individual, the designated 
                        State unit shall provide or pay for 
                        such services to the individual. Such 
                        designated State unit may claim 
                        reimbursement for the services from the 
                        public entity that failed to provide or 
                        pay for such services. Such public 
                        entity shall reimburse the designated 
                        State unit pursuant to the terms of the 
                        interagency agreement or other 
                        mechanism described in this paragraph 
                        according to the procedures established 
                        in such agreement or mechanism pursuant 
                        to subparagraph (B)(ii).
                    ``(D) Methods.--The Governor of a State may 
                meet the requirements of subparagraph (B) 
                through--
                            ``(i) a State statute or 
                        regulation;
                            ``(ii) a signed agreement between 
                        the respective officials of the public 
                        entities that clearly identifies the 
                        responsibilities of each public entity 
                        relating to the provision of services; 
                        or
                            ``(iii) another appropriate method, 
                        as determined by the designated State 
                        unit.
            ``(9) Individualized plan for employment.--
                    ``(A) Development and implementation.--The 
                State plan shall include an assurance that an 
                individualized plan for employment meeting the 
                requirements of section 102(b) will be 
                developed and implemented in a timely manner 
                for an individual subsequent to the 
                determination of the eligibility of the 
                individual for services under this title, 
                except that in a State operating under an order 
                of selection described in paragraph (5), the 
                plan will be developed and implemented only for 
                individuals meeting the order of selection 
                criteria of the State.
                    ``(B) Provision of services.--The State 
                plan shall include an assurance that such 
                services will be provided in accordance with 
                the provisions of the individualized plan for 
                employment.
            ``(10) Reporting requirements.--
                    ``(A) In general.--The State plan shall 
                include an assurance that the designated State 
                agency will submit reports in the form and 
                level of detail and at the time required by the 
                Commissioner regarding applicants for, and 
                eligible individuals receiving, services under 
                this title.
                    ``(B) Annual reporting.--In specifying the 
                information to be submitted in the reports, the 
                Commissioner shall require annual reporting on 
                the eligible individuals receiving the 
                services, on those specific data elements 
                described in section 136(d)(2) of the Workforce 
                Investment Act of 1998 that are determined by 
                the Secretary to be relevant in assessing the 
                performance of designated State units in 
                carrying out the vocational rehabilitation 
                program established under this title.
                    ``(C) Additional data.--In specifying the 
                information required to be submitted in the 
                reports, the Commissioner shall require 
                additional data with regard to applicants and 
                eligible individuals related to--
                            ``(i) the number of applicants and 
                        the number of individuals determined to 
                        be eligible or ineligible for the 
                        program carried out under this title, 
                        including--
                                    ``(I) the number of 
                                individuals determined to be 
                                ineligible because they did not 
                                require vocational 
                                rehabilitation services, as 
                                provided in section 102(a); and
                                    ``(II) the number of 
                                individuals determined, on the 
                                basis of clear and convincing 
                                evidence, to be too severely 
                                disabled to benefit in terms of 
                                an employment outcome from 
                                vocational rehabilitation 
                                services;
                            ``(ii) the number of individuals 
                        who received vocational rehabilitation 
                        services through the program, 
                        including--
                                    ``(I) the number who 
                                received services under 
                                paragraph (5)(D), but not 
                                assistance under an 
                                individualized plan for 
                                employment;
                                    ``(II) of those recipients 
                                who are individuals with 
                                significant disabilities, the 
                                number who received assistance 
                                under an individualized plan 
                                for employment consistent with 
                                section 102(b); and
                                    ``(III) of those recipients 
                                who are not individuals with 
                                significant disabilities, the 
                                number who received assistance 
                                under an individualized plan 
                                for employment consistent with 
                                section 102(b);
                            ``(iii) of those applicants and 
                        eligible recipients who are individuals 
                        with significant disabilities--
                                    ``(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                    ``(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                            ``(aa) the number 
                                        who earned the minimum 
                                        wage rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                            ``(bb) the number 
                                        who received employment 
                                        benefits from an 
                                        employer during such 
                                        employment; and
                            ``(iv) of those applicants and 
                        eligible recipients who are not 
                        individuals with significant 
                        disabilities--
                                    ``(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                    ``(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                            ``(aa) the number 
                                        who earned the minimum 
                                        wage rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                            ``(bb) the number 
                                        who received employment 
                                        benefits from an 
                                        employer during such 
                                        employment.
                    ``(D) Costs and results.--The Commissioner 
                shall also require that the designated State 
                agency include in the reports information on--
                            ``(i) the costs under this title of 
                        conducting administration, providing 
                        assessment services, counseling and 
                        guidance, and other direct services 
                        provided by designated State agency 
                        staff, providing services purchased 
                        under individualized plans for 
                        employment, supporting small business 
                        enterprises, establishing, developing, 
                        and improving community rehabilitation 
                        programs, providing other services to 
                        groups, and facilitating use of other 
                        programs under this Act and title I of 
                        the Workforce Investment Act of 1998 by 
                        eligible individuals; and
                            ``(ii) the results of annual 
                        evaluation by the State of program 
                        effectiveness under paragraph (15)(E).
                    ``(E) Additional information.--The 
                Commissioner shall require that each designated 
                State unit include in the reports additional 
                information related to the applicants and 
                eligible individuals, obtained either through a 
                complete count or sampling, including--
                            ``(i) information on--
                                    ``(I) age, gender, race, 
                                ethnicity, education, category 
                                of impairment, severity of 
                                disability, and whether the 
                                individuals are students with 
                                disabilities;
                                    ``(II) dates of 
                                application, determination of 
                                eligibility or ineligibility, 
                                initiation of the 
                                individualized plan for 
                                employment, and termination of 
                                participation in the program;
                                    ``(III) earnings at the 
                                time of application for the 
                                program and termination of 
                                participation in the program;
                                    ``(IV) work status and 
                                occupation;
                                    ``(V) types of services, 
                                including assistive technology 
                                services and assistive 
                                technology devices, provided 
                                under the program;
                                    ``(VI) types of public or 
                                private programs or agencies 
                                that furnished services under 
                                the program; and
                                    ``(VII) the reasons for 
                                individuals terminating 
                                participation in the program 
                                without achieving an employment 
                                outcome; and
                            ``(ii) information necessary to 
                        determine the success of the State in 
                        meeting--
                                    ``(I) the State performance 
                                measures established under 
                                section 136(b) of the Workforce 
                                Investment Act of 1998, to the 
                                extent the measures are 
                                applicable to individuals with 
                                disabilities; and
                                    ``(II) the standards and 
                                indicators established pursuant 
                                to section 106.
                    ``(F) Completeness and confidentiality.--
                The State plan shall include an assurance that 
                the information submitted in the reports will 
                include a complete count, except as provided in 
                subparagraph (E), of the applicants and 
                eligible individuals, in a manner permitting 
                the greatest possible cross-classification of 
                data and that the identity of each individual 
                for which information is supplied under this 
                paragraph will be kept confidential.
            ``(11) Cooperation, collaboration, and 
        coordination.--
                    ``(A) Cooperative agreements with other 
                components of statewide workforce investment 
                systems.--The State plan shall provide that the 
                designated State unit or designated State 
                agency shall enter into a cooperative agreement 
                with other entities that are components of the 
                statewide workforce investment system of the 
                State, regarding the system, which agreement 
                may provide for--
                            ``(i) provision of intercomponent 
                        staff training and technical assistance 
                        with regard to--
                                    ``(I) the availability and 
                                benefits of, and information on 
                                eligibility standards for, 
                                vocational rehabilitation 
                                services; and
                                    ``(II) the promotion of 
                                equal, effective, and 
                                meaningful participation by 
                                individuals with disabilities 
                                in workforce investment 
                                activities in the State through 
                                the promotion of program 
                                accessibility, the use of 
                                nondiscriminatory policies and 
                                procedures, and the provision 
                                of reasonable accommodations, 
                                auxiliary aids and services, 
                                and rehabilitation technology, 
                                for individuals with 
                                disabilities;
                            ``(ii) use of information and 
                        financial management systems that link 
                        all components of the statewide 
                        workforce investment system, that link 
                        the components to other electronic 
                        networks, including nonvisual 
                        electronic networks, and that relate to 
                        such subjects as employment statistics, 
                        and information on job vacancies, 
                        career planning, and workforce 
                        investment activities;
                            ``(iii) use of customer service 
                        features such as common intake and 
                        referral procedures, customer 
                        databases, resource information, and 
                        human services hotlines;
                            ``(iv) establishment of cooperative 
                        efforts with employers to--
                                    ``(I) facilitate job 
                                placement; and
                                    ``(II) carry out any other 
                                activities that the designated 
                                State unit and the employers 
                                determine to be appropriate;
                            ``(v) identification of staff 
                        roles, responsibilities, and available 
                        resources, and specification of the 
                        financial responsibility of each 
                        component of the statewide workforce 
                        investment system with regard to paying 
                        for necessary services (consistent with 
                        State law and Federal requirements); 
                        and
                            ``(vi) specification of procedures 
                        for resolving disputes among such 
                        components.
                    ``(B) Replication of cooperative 
                agreements.--The State plan shall provide for 
                the replication of such cooperative agreements 
                at the local level between individual offices 
                of the designated State unit and local entities 
                carrying out activities through the statewide 
                workforce investment system.
                    ``(C) Interagency cooperation with other 
                agencies.--The State plan shall include 
                descriptions of interagency cooperation with, 
                and utilization of the services and facilities 
                of, Federal, State, and local agencies and 
                programs, including programs carried out by the 
                Under Secretary for Rural Development of the 
                Department of Agriculture and State use 
                contracting programs, to the extent that such 
                agencies and programs are not carrying out 
                activities through the statewide workforce 
                investment system.
                    ``(D) Coordination with education 
                officials.--The State plan shall contain plans, 
                policies, and procedures for coordination 
                between the designated State agency and 
                education officials responsible for the public 
                education of students with disabilities, that 
                are designed to facilitate the transition of 
                the students with disabilities from the receipt 
                of educational services in school to the 
                receipt of vocational rehabilitation services 
                under this title, including information on a 
                formal interagency agreement with the State 
                educational agency that, at a minimum, provides 
                for--
                            ``(i) consultation and technical 
                        assistance to assist educational 
                        agencies in planning for the transition 
                        of students with disabilities from 
                        school to post-school activities, 
                        including vocational rehabilitation 
                        services;
                            ``(ii) transition planning by 
                        personnel of the designated State 
                        agency and educational agency personnel 
                        for students with disabilities that 
                        facilitates the development and 
                        completion of their individualized 
                        education programs under section 614(d) 
                        of the Individuals with Disabilities 
                        Education Act (as added by section 101 
                        of Public Law 105-17);
                            ``(iii) the roles and 
                        responsibilities, including financial 
                        responsibilities, of each agency, 
                        including provisions for determining 
                        State lead agencies and qualified 
                        personnel responsible for transition 
                        services; and
                            ``(iv) procedures for outreach to 
                        and identification of students with 
                        disabilities who need the transition 
                        services.
                    ``(E) Coordination with statewide 
                independent living councils and independent 
                living centers.--The State plan shall include 
                an assurance that the designated State unit, 
                the Statewide Independent Living Council 
                established under section 705, and the 
                independent living centers described in part C 
                of title VII within the State have developed 
                working relationships and coordinate their 
                activities.
                    ``(F) Cooperative agreement with recipients 
                of grants for services to american indians.--In 
                applicable cases, the State plan shall include 
                an assurance that the State has entered into a 
                formal cooperative agreement with each grant 
                recipient in the State that receives funds 
                under part C. The agreement shall describe 
                strategies for collaboration and coordination 
                in providing vocational rehabilitation services 
                to American Indians who are individuals with 
                disabilities, including--
                            ``(i) strategies for interagency 
                        referral and information sharing that 
                        will assist in eligibility 
                        determinations and the development of 
                        individualized plans for employment;
                            ``(ii) procedures for ensuring that 
                        American Indians who are individuals 
                        with disabilities and are living near a 
                        reservation or tribal service area are 
                        provided vocational rehabilitation 
                        services; and
                            ``(iii) provisions for sharing 
                        resources in cooperative studies and 
                        assessments, joint training activities, 
                        and other collaborative activities 
                        designed to improve the provision of 
                        services to American Indians who are 
                        individuals with disabilities.
            ``(12) Residency.--The State plan shall include an 
        assurance that the State will not impose a residence 
        requirement that excludes from services provided under 
        the plan any individual who is present in the State.
            ``(13) Services to american indians.--The State 
        plan shall include an assurance that, except as 
        otherwise provided in part C, the designated State 
        agency will provide vocational rehabilitation services 
        to American Indians who are individuals with 
        disabilities residing in the State to the same extent 
        as the designated State agency provides such services 
        to other significant populations of individuals with 
        disabilities residing in the State.
            ``(14) Annual review of individuals in extended 
        employment or other employment under special 
        certificate provisions of the fair labor standards act 
        of 1938.--The State plan shall provide for--
                    ``(A) an annual review and reevaluation of 
                the status of each individual with a disability 
                served under this title who has achieved an 
                employment outcome either in an extended 
                employment setting in a community 
                rehabilitation program or any other employment 
                under section 14(c) of the Fair Labor Standards 
                Act (29 U.S.C. 214(c)) for 2 years after the 
                achievement of the outcome (and thereafter if 
                requested by the individual or, if appropriate, 
                the individual's representative), to determine 
                the interests, priorities, and needs of the 
                individual with respect to competitive 
                employment or training for competitive 
                employment;
                    ``(B) input into the review and 
                reevaluation, and a signed acknowledgment that 
                such review and reevaluation have been 
                conducted, by the individual with a disability, 
                or, if appropriate, the individual's 
                representative; and
                    ``(C) maximum efforts, including the 
                identification and provision of vocational 
                rehabilitation services, reasonable 
                accommodations, and other necessary support 
                services, to assist the individuals described 
                in subparagraph (A) in engaging in competitive 
                employment.
            ``(15) Annual state goals and reports of 
        progress.--
                    ``(A) Assessments and estimates.--The State 
                plan shall--
                            ``(i) include the results of a 
                        comprehensive, statewide assessment, 
                        jointly conducted by the designated 
                        State unit and the State Rehabilitation 
                        Council (if the State has such a 
                        Council) every 3 years, describing the 
                        rehabilitation needs of individuals 
                        with disabilities residing within the 
                        State, particularly the vocational 
                        rehabilitation services needs of--
                                    ``(I) individuals with the 
                                most significant disabilities, 
                                including their need for 
                                supported employment services;
                                    ``(II) individuals with 
                                disabilities who are minorities 
                                and individuals with 
                                disabilities who have been 
                                unserved or underserved by the 
                                vocational rehabilitation 
                                program carried out under this 
                                title; and
                                    ``(III) individuals with 
                                disabilities served through 
                                other components of the 
                                statewide workforce investment 
                                system (other than the 
                                vocational rehabilitation 
                                program), as identified by such 
                                individuals and personnel 
                                assisting such individuals 
                                through the components;
                            ``(ii) include an assessment of the 
                        need to establish, develop, or improve 
                        community rehabilitation programs 
                        within the State; and
                            ``(iii) provide that the State 
                        shall submit to the Commissioner a 
                        report containing information regarding 
                        updates to the assessments, for any 
                        year in which the State updates the 
                        assessments.
                    ``(B) Annual estimates.--The State plan 
                shall include, and shall provide that the State 
                shall annually submit a report to the 
                Commissioner that includes, State estimates 
                of--
                            ``(i) the number of individuals in 
                        the State who are eligible for services 
                        under this title;
                            ``(ii) the number of such 
                        individuals who will receive services 
                        provided with funds provided under part 
                        B and under part B of title VI, 
                        including, if the designated State 
                        agency uses an order of selection in 
                        accordance with paragraph (5), 
                        estimates of the number of individuals 
                        to be served under each priority 
                        category within the order; and
                            ``(iii) the costs of the services 
                        described in clause (i), including, if 
                        the designated State agency uses an 
                        order of selection in accordance with 
                        paragraph (5), the service costs for 
                        each priority category within the 
                        order.
                    ``(C) Goals and priorities.--
                            ``(i) In general.--The State plan 
                        shall identify the goals and priorities 
                        of the State in carrying out the 
                        program. The goals and priorities shall 
                        be jointly developed, agreed to, and 
                        reviewed annually by the designated 
                        State unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council. Any revisions to the goals and 
                        priorities shall be jointly agreed to 
                        by the designated State unit and the 
                        State Rehabilitation Council, if the 
                        State has such a Council. The State 
                        plan shall provide that the State shall 
                        submit to the Commissioner a report 
                        containing information regarding 
                        revisions in the goals and priorities, 
                        for any year in which the State revises 
                        the goals and priorities.
                            ``(ii) Basis.--The State goals and 
                        priorities shall be based on an 
                        analysis of--
                                    ``(I) the comprehensive 
                                assessment described in 
                                subparagraph (A), including any 
                                updates to the assessment;
                                    ``(II) the performance of 
                                the State on the standards and 
                                indicators established under 
                                section 106; and
                                    ``(III) other available 
                                information on the operation 
                                and the effectiveness of the 
                                vocational rehabilitation 
                                program carried out in the 
                                State, including any reports 
                                received from the State 
                                Rehabilitation Council, under 
                                section 105(c) and the findings 
                                and recommendations from 
                                monitoring activities conducted 
                                under section 107.
                            ``(iii) Service and outcome goals 
                        for categories in order of selection.--
                        If the designated State agency uses an 
                        order of selection in accordance with 
                        paragraph (5), the State shall also 
                        identify in the State plan service and 
                        outcome goals and the time within which 
                        these goals may be achieved for 
                        individuals in each priority category 
                        within the order.
                    ``(D) Strategies.--The State plan shall 
                contain a description of the strategies the 
                State will use to address the needs identified 
                in the assessment conducted under subparagraph 
                (A) and achieve the goals and priorities 
                identified in subparagraph (C), including--
                            ``(i) the methods to be used to 
                        expand and improve services to 
                        individuals with disabilities, 
                        including how a broad range of 
                        assistive technology services and 
                        assistive technology devices will be 
                        provided to such individuals at each 
                        stage of the rehabilitation process and 
                        how such services and devices will be 
                        provided to such individuals on a 
                        statewide basis;
                            ``(ii) outreach procedures to 
                        identify and serve individuals with 
                        disabilities who are minorities and 
                        individuals with disabilities who have 
                        been unserved or underserved by the 
                        vocational rehabilitation program;
                            ``(iii) where necessary, the plan 
                        of the State for establishing, 
                        developing, or improving community 
                        rehabilitation programs;
                            ``(iv) strategies to improve the 
                        performance of the State with respect 
                        to the evaluation standards and 
                        performance indicators established 
                        pursuant to section 106; and
                            ``(v) strategies for assisting 
                        entities carrying out other components 
                        of the statewide workforce investment 
                        system (other than the vocational 
                        rehabilitation program) in assisting 
                        individuals with disabilities.
                    ``(E) Evaluation and reports of progress.--
                The State plan shall--
                            ``(i) include the results of an 
                        evaluation of the effectiveness of the 
                        vocational rehabilitation program, and 
                        a joint report by the designated State 
                        unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council, to the Commissioner on the 
                        progress made in improving the 
                        effectiveness from the previous year, 
                        which evaluation and report shall 
                        include--
                                    ``(I) an evaluation of the 
                                extent to which the goals 
                                identified in subparagraph (C) 
                                were achieved;
                                    ``(II) a description of 
                                strategies that contributed to 
                                achieving the goals;
                                    ``(III) to the extent to 
                                which the goals were not 
                                achieved, a description of the 
                                factors that impeded that 
                                achievement; and
                                    ``(IV) an assessment of the 
                                performance of the State on the 
                                standards and indicators 
                                established pursuant to section 
                                106; and
                            ``(ii) provide that the designated 
                        State unit and the State Rehabilitation 
                        Council, if the State has such a 
                        Council, shall jointly submit to the 
                        Commissioner an annual report that 
                        contains the information described in 
                        clause (i).
            ``(16) Public comment.--The State plan shall--
                    ``(A) provide that the designated State 
                agency, prior to the adoption of any policies 
                or procedures governing the provision of 
                vocational rehabilitation services under the 
                State plan (including making any amendment to 
                such policies and procedures), shall conduct 
                public meetings throughout the State, after 
                providing adequate notice of the meetings, to 
                provide the public, including individuals with 
                disabilities, an opportunity to comment on the 
                policies or procedures, and actively consult 
                with the Director of the client assistance 
                program carried out under section 112, and, as 
                appropriate, Indian tribes, tribal 
                organizations, and Native Hawaiian 
                organizations on the policies or procedures; 
                and
                    ``(B) provide that the designated State 
                agency (or each designated State agency if 2 
                agencies are designated) and any sole agency 
                administering the plan in a political 
                subdivision of the State, shall take into 
                account, in connection with matters of general 
                policy arising in the administration of the 
                plan, the views of--
                            ``(i) individuals and groups of 
                        individuals who are recipients of 
                        vocational rehabilitation services, or 
                        in appropriate cases, the individuals' 
                        representatives;
                            ``(ii) personnel working in 
                        programs that provide vocational 
                        rehabilitation services to individuals 
                        with disabilities;
                            ``(iii) providers of vocational 
                        rehabilitation services to individuals 
                        with disabilities;
                            ``(iv) the director of the client 
                        assistance program; and
                            ``(v) the State Rehabilitation 
                        Council, if the State has such a 
                        Council.
            ``(17) Use of funds for construction of 
        facilities.--The State plan shall provide that if, 
        under special circumstances, the State plan includes 
        provisions for the construction of facilities for 
        community rehabilitation programs--
                    ``(A) the Federal share of the cost of 
                construction for the facilities for a fiscal 
                year will not exceed an amount equal to 10 
                percent of the State's allotment under section 
                110 for such year;
                    ``(B) the provisions of section 306 (as in 
                effect on the day before the date of enactment 
                of the Rehabilitation Act Amendments of 1998) 
                shall be applicable to such construction and 
                such provisions shall be deemed to apply to 
                such construction; and
                    ``(C) there shall be compliance with 
                regulations the Commissioner shall prescribe 
                designed to assure that no State will reduce 
                its efforts in providing other vocational 
                rehabilitation services (other than for the 
                establishment of facilities for community 
                rehabilitation programs) because the plan 
                includes such provisions for construction.
            ``(18) Innovation and expansion activities.--The 
        State plan shall--
                    ``(A) include an assurance that the State 
                will reserve and use a portion of the funds 
                allotted to the State under section 110--
                            ``(i) for the development and 
                        implementation of innovative approaches 
                        to expand and improve the provision of 
                        vocational rehabilitation services to 
                        individuals with disabilities under 
                        this title, particularly individuals 
                        with the most significant disabilities, 
                        consistent with the findings of the 
                        statewide assessment and goals and 
                        priorities of the State as described in 
                        paragraph (15); and
                            ``(ii) to support the funding of--
                                    ``(I) the State 
                                Rehabilitation Council, if the 
                                State has such a Council, 
                                consistent with the plan 
                                prepared under section 
                                105(d)(1); and
                                    ``(II) the Statewide 
                                Independent Living Council, 
                                consistent with the plan 
                                prepared under section 
                                705(e)(1);
                    ``(B) include a description of how the 
                reserved funds will be utilized; and
                    ``(C) provide that the State shall submit 
                to the Commissioner an annual report containing 
                a description of how the reserved funds will be 
                utilized.
            ``(19) Choice.--The State plan shall include an 
        assurance that applicants and eligible individuals or, 
        as appropriate, the applicants' representatives or 
        individuals' representatives, will be provided 
        information and support services to assist the 
        applicants and individuals in exercising informed 
        choice throughout the rehabilitation process, 
        consistent with the provisions of section 102(d).
            ``(20) Information and referral services.--
                    ``(A) In general.--The State plan shall 
                include an assurance that the designated State 
                agency will implement an information and 
                referral system adequate to ensure that 
                individuals with disabilities will be provided 
                accurate vocational rehabilitation information 
                and guidance, using appropriate modes of 
                communication, to assist such individuals in 
                preparing for, securing, retaining, or 
                regaining employment, and will be appropriately 
                referred to Federal and State programs (other 
                than the vocational rehabilitation program 
                carried out under this title), including other 
                components of the statewide workforce 
                investment system in the State.
                    ``(B) Referrals.--An appropriate referral 
                made through the system shall--
                            ``(i) be to the Federal or State 
                        programs, including programs carried 
                        out by other components of the 
                        statewide workforce investment system 
                        in the State, best suited to address 
                        the specific employment needs of an 
                        individual with a disability; and
                            ``(ii) include, for each of these 
                        programs, provision to the individual 
                        of--
                                    ``(I) a notice of the 
                                referral by the designated 
                                State agency to the agency 
                                carrying out the program;
                                    ``(II) information 
                                identifying a specific point of 
                                contact within the agency 
                                carrying out the program; and
                                    ``(III) information and 
                                advice regarding the most 
                                suitable services to assist the 
                                individual to prepare for, 
                                secure, retain, or regain 
                                employment.
            ``(21) State independent consumer-controlled 
        commission; state rehabilitation council.--
                    ``(A) Commission or council.--The State 
                plan shall provide that either--
                            ``(i) the designated State agency 
                        is an independent commission that--
                                    ``(I) is responsible under 
                                State law for operating, or 
                                overseeing the operation of, 
                                the vocational rehabilitation 
                                program in the State;
                                    ``(II) is consumer-
                                controlled by persons who--
                                            ``(aa) are 
                                        individuals with 
                                        physical or mental 
                                        impairments that 
                                        substantially limit 
                                        major life activities; 
                                        and
                                            ``(bb) represent 
                                        individuals with a 
                                        broad range of 
                                        disabilities, unless 
                                        the designated State 
                                        unit under the 
                                        direction of the 
                                        commission is the State 
                                        agency for individuals 
                                        who are blind;
                                    ``(III) includes family 
                                members, advocates, or other 
                                representatives, of individuals 
                                with mental impairments; and
                                    ``(IV) undertakes the 
                                functions set forth in section 
                                105(c)(4); or
                            ``(ii) the State has established a 
                        State Rehabilitation Council that meets 
                        the criteria set forth in section 105 
                        and the designated State unit--
                                    ``(I) in accordance with 
                                paragraph (15), jointly 
                                develops, agrees to, and 
                                reviews annually State goals 
                                and priorities, and jointly 
                                submits annual reports of 
                                progress with the Council;
                                    ``(II) regularly consults 
                                with the Council regarding the 
                                development, implementation, 
                                and revision of State policies 
                                and procedures of general 
                                applicability pertaining to the 
                                provision of vocational 
                                rehabilitation services;
                                    ``(III) includes in the 
                                State plan and in any revision 
                                to the State plan, a summary of 
                                input provided by the Council, 
                                including recommendations from 
                                the annual report of the 
                                Council described in section 
                                105(c)(5), the review and 
                                analysis of consumer 
                                satisfaction described in 
                                section 105(c)(4), and other 
                                reports prepared by the 
                                Council, and the response of 
                                the designated State unit to 
                                such input and recommendations, 
                                including explanations for 
                                rejecting any input or 
                                recommendation; and
                                    ``(IV) transmits to the 
                                Council--
                                            ``(aa) all plans, 
                                        reports, and other 
                                        information required 
                                        under this title to be 
                                        submitted to the 
                                        Secretary;
                                            ``(bb) all 
                                        policies, and 
                                        information on all 
                                        practices and 
                                        procedures, of general 
                                        applicability provided 
                                        to or used by 
                                        rehabilitation 
                                        personnel in carrying 
                                        out this title; and
                                            ``(cc) copies of 
                                        due process hearing 
                                        decisions issued under 
                                        this title, which shall 
                                        be transmitted in such 
                                        a manner as to ensure 
                                        that the identity of 
                                        the participants in the 
                                        hearings is kept 
                                        confidential.
                    ``(B) More than 1 designated state 
                agency.--In the case of a State that, under 
                section 101(a)(2), designates a State agency to 
                administer the part of the State plan under 
                which vocational rehabilitation services are 
                provided for individuals who are blind (or to 
                supervise the administration of such part by a 
                local agency) and designates a separate State 
                agency to administer the rest of the State 
                plan, the State shall either establish a State 
                Rehabilitation Council for each of the 2 
                agencies that does not meet the requirements in 
                subparagraph (A)(i), or establish 1 State 
                Rehabilitation Council for both agencies if 
                neither agency meets the requirements of 
                subparagraph (A)(i).
            ``(22) Supported employment state plan 
        supplement.--The State plan shall include an assurance 
        that the State has an acceptable plan for carrying out 
        part B of title VI, including the use of funds under 
        that part to supplement funds made available under part 
        B of this title to pay for the cost of services leading 
        to supported employment.
            ``(23) Annual updates.--The plan shall include an 
        assurance that the State will submit to the 
        Commissioner reports containing annual updates of the 
        information required under paragraph (7) (relating to a 
        comprehensive system of personnel development) and any 
        other updates of the information required under this 
        section that are requested by the Commissioner, and 
        annual reports as provided in paragraphs (15) (relating 
        to assessments, estimates, goals and priorities, and 
        reports of progress) and (18) (relating to innovation 
        and expansion), at such time and in such manner as the 
        Secretary may determine to be appropriate.
            ``(24) Certain contracts and cooperative 
        agreements.--
                    ``(A) Contracts with for-profit 
                organizations.--The State plan shall provide 
                that the designated State agency has the 
                authority to enter into contracts with for-
                profit organizations for the purpose of 
                providing, as vocational rehabilitation 
                services, on-the-job training and related 
                programs for individuals with disabilities 
                under part A of title VI, upon a determination 
                by such agency that such for-profit 
                organizations are better qualified to provide 
                such rehabilitation services than nonprofit 
                agencies and organizations.
                    ``(B) Cooperative agreements with private 
                nonprofit organizations.--The State plan shall 
                describe the manner in which cooperative 
                agreements with private nonprofit vocational 
                rehabilitation service providers will be 
                established.
    ``(b) Approval; Disapproval of the State Plan.--
            ``(1) Approval.--The Commissioner shall approve any 
        plan that the Commissioner finds fulfills the 
        conditions specified in this section, and shall 
        disapprove any plan that does not fulfill such 
        conditions.
            ``(2) Disapproval.--Prior to disapproval of the 
        State plan, the Commissioner shall notify the State of 
        the intention to disapprove the plan and shall afford 
        the State reasonable notice and opportunity for a 
        hearing.

``SEC. 102. ELIGIBILITY AND INDIVIDUALIZED PLAN FOR EMPLOYMENT.

    ``(a) Eligibility.--
            ``(1) Criterion for eligibility.--An individual is 
        eligible for assistance under this title if the 
        individual--
                    ``(A) is an individual with a disability 
                under section 7(20)(A); and
                    ``(B) requires vocational rehabilitation 
                services to prepare for, secure, retain, or 
                regain employment.
            ``(2) Presumption of benefit.--
                    ``(A) Demonstration.--For purposes of this 
                section, an individual shall be presumed to be 
                an individual that can benefit in terms of an 
                employment outcome from vocational 
                rehabilitation services under section 7(20)(A), 
                unless the designated State unit involved can 
                demonstrate by clear and convincing evidence 
                that such individual is incapable of benefiting 
                in terms of an employment outcome from 
                vocational rehabilitation services due to the 
                severity of the disability of the individual.
                    ``(B) Methods.--In making the demonstration 
                required under subparagraph (A), the designated 
                State unit shall explore the individual's 
                abilities, capabilities, and capacity to 
                perform in work situations, through the use of 
                trial work experiences, as described in section 
                7(2)(D), with appropriate supports provided 
                through the designated State unit, except under 
                limited circumstances when an individual can 
                not take advantage of such experiences. Such 
                experiences shall be of sufficient variety and 
                over a sufficient period of time to determine 
                the eligibility of the individual or to 
                determine the existence of clear and convincing 
                evidence that the individual is incapable of 
                benefiting in terms of an employment outcome 
                from vocational rehabilitation services due to 
                the severity of the disability of the 
                individual.
            ``(3) Presumption of eligibility.--
                    ``(A) In general.--For purposes of this 
                section, an individual who has a disability or 
                is blind as determinedpursuant to title II or 
title XVI of the Social Security Act (42 U.S.C. 401 et seq. and 1381 et 
seq.) shall be--
                            ``(i) considered to be an 
                        individual with a significant 
                        disability under section 7(21)(A); and
                            ``(ii) presumed to be eligible for 
                        vocational rehabilitation services 
                        under this title (provided that the 
                        individual intends to achieve an 
                        employment outcome consistent with the 
                        unique strengths, resources, 
                        priorities, concerns, abilities, 
                        capabilities, interests, and informed 
                        choice of the individual) unless the 
                        designated State unit involved can 
                        demonstrate by clear and convincing 
                        evidence that such individual is 
                        incapable of benefiting in terms of an 
                        employment outcome from vocational 
                        rehabilitation services due to the 
                        severity of the disability of the 
                        individual in accordance with paragraph 
                        (2).
                    ``(B) Construction.--Nothing in this 
                paragraph shall be construed to create an 
                entitlement to any vocational rehabilitation 
                service.
            ``(4) Use of existing information.--
                    ``(A) In general.--To the maximum extent 
                appropriate and consistent with the 
                requirements of this part, for purposes of 
                determining the eligibility of an individual 
                for vocational rehabilitation services under 
                this title and developing the individualized 
                plan for employment described in subsection (b) 
                for the individual, the designated State unit 
                shall use information that is existing and 
                current (as of the date of the determination of 
                eligibility or of the development of the 
                individualized plan for employment), including 
                information available from other programs and 
                providers, particularly information used by 
                education officials and the Social Security 
                Administration, information provided by the 
                individual and the family of the individual, 
                and information obtained under the assessment 
                for determining eligibility and vocational 
                rehabilitation needs.
                    ``(B) Determinations by officials of other 
                agencies.--Determinations made by officials of 
                other agencies, particularly education 
                officials described in section 101(a)(11)(D), 
                regarding whether an individual satisfies 1 or 
                more factors relating to whether an individual 
                is an individual with a disability under 
                section 7(20)(A) or an individual with a 
                significant disability under section 7(21)(A) 
                shall be used, to the extent appropriate and 
                consistent with the requirements of this part, 
                in assisting the designated State unit in 
                making such determinations.
                    ``(C) Basis.--The determination of 
                eligibility for vocational rehabilitation 
                services shall be based on--
                            ``(i) the review of existing data 
                        described in section 7(2)(A)(i); and
                            ``(ii) to the extent that such data 
                        is unavailable or insufficient for 
                        determining eligibility, the provision 
                        of assessment activities described in 
                        section 7(2)(A)(ii).
            ``(5) Determination of ineligibility.--If an 
        individual who applies for services under this title is 
        determined, based on the review of existing data and, 
        to the extent necessary, the assessment activities 
        described in section 7(2)(A)(ii), not to be eligible 
        for the services, or if an eligible individual 
        receiving services under an individualized plan for 
        employment is determined to be no longer eligible for 
        the services--
                    ``(A) the ineligibility determination 
                involved shall be made only after providing an 
                opportunity for full consultation with the 
                individual or, as appropriate, the individual's 
                representative;
                    ``(B) the individual or, as appropriate, 
                the individual's representative, shall be 
                informed in writing (supplemented as necessary 
                by other appropriate modes of communication 
                consistent with the informed choice of the 
                individual) of the ineligibility determination, 
                including--
                            ``(i) the reasons for the 
                        determination; and
                            ``(ii) a description of the means 
                        by which the individual may express, 
                        and seek a remedy for, any 
                        dissatisfaction with the determination, 
                        including the procedures for review by 
                        an impartial hearing officer under 
                        subsection (c);
                    ``(C) the individual shall be provided with 
                a description of services available from the 
                client assistance program under section 112 and 
                information on how to contact that program; and
                    ``(D) any ineligibility determination that 
                is based on a finding that the individual is 
                incapable of benefiting in terms of an 
                employment outcome shall be reviewed--
                            ``(i) within 12 months; and
                            ``(ii) thereafter, if such a review 
                        is requested by the individual or, if 
                        appropriate, by the individual's 
                        representative.
            ``(6) Timeframe for making an eligibility 
        determination.--The designated State unit shall 
        determine whether an individual is eligible for 
        vocational rehabilitation services under this title 
        within a reasonable period of time, not to exceed 60 
        days, after the individual has submitted an application 
        for the services unless--
                    ``(A) exceptional and unforeseen 
                circumstances beyond the control of the 
                designated State unit preclude making an 
                eligibility determination within 60 days and 
                the designated State unit and the individual 
                agree to a specific extension of time; or
                    ``(B) the designated State unit is 
                exploring an individual's abilities, 
                capabilities, and capacity to perform in work 
                situations under paragraph (2)(B).
    ``(b) Development of an Individualized Plan for 
Employment.--
            ``(1) Options for developing an individualized plan 
        for employment.--If an individual is determined to be 
        eligible for vocational rehabilitation services as 
        described in subsection (a), the designated State unit 
        shall complete the assessment for determining 
        eligibility and vocational rehabilitation needs, as 
        appropriate, and shall provide the eligible individual 
        or the individual's representative, in writing and in 
        an appropriate mode of communication, with information 
        on the individual's options for developing an 
        individualized plan for employment, including--
                    ``(A) information on the availability of 
                assistance, to the extent determined to be 
                appropriate by the eligible individual, from a 
                qualified vocational rehabilitation counselor 
                in developing all or part of the individualized 
                plan for employment for the individual, and the 
                availability of technical assistance in 
                developing all or part of the individualized 
                plan for employment for the individual;
                    ``(B) a description of the full range of 
                components that shall be included in an 
                individualized plan for employment;
                    ``(C) as appropriate--
                            ``(i) an explanation of agency 
                        guidelines and criteria associated with 
                        financial commitments concerning an 
                        individualized plan for employment;
                            ``(ii) additional information the 
                        eligible individual requests or the 
                        designated State unit determines to be 
                        necessary; and
                            ``(iii) information on the 
                        availability of assistance in 
                        completing designated State agency 
                        forms required in developing an 
                        individualized plan for employment; and
                    ``(D)(i) a description of the rights and 
                remedies available to such an individual 
                including, if appropriate, recourse to the 
                processes set forth in subsection (c); and
                    ``(ii) a description of the availability of 
                a client assistance program established 
                pursuant to section 112 and information about 
                how to contact the client assistance program.
            ``(2) Mandatory procedures.--
                    ``(A) Written document.--An individualized 
                plan for employment shall be a written document 
                prepared on forms provided by the designated 
                State unit.
                    ``(B) Informed choice.--An individualized 
                plan for employment shall be developed and 
                implemented in a manner that affords eligible 
                individuals the opportunity to exercise 
                informed choice in selecting an employment 
                outcome, the specific vocational rehabilitation 
                services to be provided under the plan, the 
                entity that will provide the vocational 
                rehabilitation services, and the methods used 
                to procure the services, consistent with 
                subsection (d).
                    ``(C) Signatories.--An individualized plan 
                for employment shall be--
                            ``(i) agreed to, and signed by, 
                        such eligible individual or, as 
                        appropriate, the individual's 
                        representative; and
                            ``(ii) approved and signed by a 
                        qualified vocational rehabilitation 
                        counselor employed by the designated 
                        State unit.
                    ``(D) Copy.--A copy of the individualized 
                plan for employment for an eligible individual 
                shall be provided to the individual or, as 
                appropriate, to the individual's 
                representative, in writing and, if appropriate, 
                in the native language or mode of communication 
                of the individual or, as appropriate, of the 
                individual's representative.
                    ``(E) Review and amendment.--The 
                individualized plan for employment shall be--
                            ``(i) reviewed at least annually 
                        by--
                                    ``(I) a qualified 
                                vocational rehabilitation 
                                counselor; and
                                    ``(II) the eligible 
                                individual or, as appropriate, 
                                the individual's 
                                representative; and
                            ``(ii) amended, as necessary, by 
                        the individual or, as appropriate, the 
                        individual's representative, in 
                        collaboration with a representative of 
                        the designated State agency or a 
                        qualified vocational rehabilitation 
                        counselor (to the extent determined to 
                        be appropriate by the individual), if 
                        there are substantive changes in the 
                        employment outcome, the vocational 
                        rehabilitation services to be provided, 
                        or the service providers of the 
                        services (which amendments shall not 
                        take effect until agreed to and signed 
                        by the eligible individual or, as 
                        appropriate, the individual's 
                        representative, and by a qualified 
                        vocational rehabilitation counselor 
                        employed by the designated State unit).
            ``(3) Mandatory components of an individualized 
        plan for employment.--Regardless of the approach 
        selected by an eligible individual to develop an 
        individualized plan for employment, an individualized 
        plan for employment shall, at a minimum, contain 
        mandatory components consisting of--
                    ``(A) a description of the specific 
                employment outcome that is chosen by the 
                eligible individual, consistent with the unique 
                strengths, resources, priorities, concerns, 
                abilities, capabilities, interests, and 
                informed choice of the eligible individual, 
                and, to the maximum extent appropriate, results 
                in employment in an integrated setting;
                    ``(B)(i) a description of the specific 
                vocational rehabilitation services that are--
                            ``(I) needed to achieve the 
                        employment outcome, including, as 
                        appropriate, the provision of assistive 
                        technology devices and assistive 
                        technology services, and personal 
                        assistance services, including training 
                        in the management of such services; and
                            ``(II) provided in the most 
                        integrated setting that is appropriate 
                        for the service involved and is 
                        consistent with the informed choice of 
                        the eligible individual; and
                    ``(ii) timelines for the achievement of the 
                employment outcome and for the initiation of 
                the services;
                    ``(C) a description of the entity chosen by 
                the eligible individual or, as appropriate, the 
                individual's representative, that will provide 
                the vocational rehabilitation services, and the 
                methods used to procure such services;
                    ``(D) a description of criteria to evaluate 
                progress toward achievement of the employment 
                outcome;
                    ``(E) the terms and conditions of the 
                individualized plan for employment, including, 
                as appropriate, information describing--
                            ``(i) the responsibilities of the 
                        designated State unit;
                            ``(ii) the responsibilities of the 
                        eligible individual, including--
                                    ``(I) the responsibilities 
                                the eligible individual will 
                                assume in relation to the 
                                employment outcome of the 
                                individual;
                                    ``(II) if applicable, the 
                                participation of the eligible 
                                individual in paying for the 
                                costs of the plan; and
                                    ``(III) the responsibility 
                                of the eligible individual with 
                                regard to applying for and 
                                securing comparable benefits as 
                                described in section 101(a)(8); 
                                and
                            ``(iii) the responsibilities of 
                        other entities as the result of 
                        arrangements made pursuant to 
                        comparable services or benefits 
                        requirements as described in section 
                        101(a)(8);
                    ``(F) for an eligible individual with the 
                most significant disabilities for whom an 
                employment outcome in a supported employment 
                setting has been determined to be appropriate, 
                information identifying--
                            ``(i) the extended services needed 
                        by the eligible individual; and
                            ``(ii) the source of extended 
                        services or, to the extent that the 
                        source of the extended services cannot 
                        be identified at the time of the 
                        development of the individualized plan 
                        for employment, a description of the 
                        basis for concluding that there is a 
                        reasonable expectation that such source 
                        will become available; and
                    ``(G) as determined to be necessary, a 
                statement of projected need for post-employment 
                services.
    ``(c) Procedures.--
            ``(1) In general.--Each State shall establish 
        procedures for mediation of, and procedures for review 
        through an impartial due process hearing of, 
        determinations made by personnel of the designated 
        State unit that affect the provision of vocational 
        rehabilitation services to applicants or eligible 
        individuals.
            ``(2) Notification.--
                    ``(A) Rights and assistance.--The 
                procedures shall provide that an applicant or 
                an eligible individual or, as appropriate, the 
                applicant's representative or individual's 
                representative shall be notified of--
                            ``(i) the right to obtain review of 
                        determinations described in paragraph 
                        (1) in an impartial due process hearing 
                        under paragraph (5);
                            ``(ii) the right to pursue 
                        mediation with respect to the 
                        determinations under paragraph (4); and
                            ``(iii) the availability of 
                        assistance from the client assistance 
                        program under section 112.
                    ``(B) Timing.--Such notification shall be 
                provided in writing--
                            ``(i) at the time an individual 
                        applies for vocational rehabilitation 
                        services provided under this title;
                            ``(ii) at the time the 
                        individualized plan for employment for 
                        the individual is developed; and
                            ``(iii) upon reduction, suspension, 
                        or cessation of vocational 
                        rehabilitation services for the 
                        individual.
            ``(3) Evidence and representation.--The procedures 
        required under this subsection shall, at a minimum--
                    ``(A) provide an opportunity for an 
                applicant or an eligible individual, or, as 
                appropriate, the applicant's representative or 
                individual's representative, to submit at the 
                mediation session or hearing evidence and 
                information to support the position of the 
                applicant or eligible individual; and
                    ``(B) include provisions to allow an 
                applicant or an eligible individual to be 
                represented in the mediation session or hearing 
                by a person selected by the applicant or 
                eligible individual.
            ``(4) Mediation.--
                    ``(A) Procedures.--Each State shall ensure 
                that procedures are established and implemented 
                under this subsection to allow parties 
                described in paragraph (1) to disputes 
                involving any determination described in 
                paragraph (1) to resolve such disputes through 
                a mediation process that, at a minimum, shall 
                be available whenever a hearing is requested 
                under this subsection.
                    ``(B) Requirements.--Such procedures shall 
                ensure that the mediation process--
                            ``(i) is voluntary on the part of 
                        the parties;
                            ``(ii) is not used to deny or delay 
                        the right of an individual to a hearing 
                        under this subsection, or to deny any 
                        other right afforded under this title; 
                        and
                            ``(iii) is conducted by a qualified 
                        and impartial mediator who is trained 
                        in effective mediation techniques.
                    ``(C) List of mediators.--The State shall 
                maintain a list of individuals who are 
                qualified mediators and knowledgeable in laws 
                (including regulations) relating to the 
                provision of vocational rehabilitation services 
                under this title, from which the mediators 
                described in subparagraph (B) shall be 
                selected.
                    ``(D) Cost.--The State shall bear the cost 
                of the mediation process.
                    ``(E) Scheduling.--Each session in the 
                mediation process shall be scheduled in a 
                timely manner and shall be held in a location 
                that is convenient to the parties to the 
                dispute.
                    ``(F) Agreement.--An agreement reached by 
                the parties to the dispute in the mediation 
                process shall be set forth in a written 
                mediation agreement.
                    ``(G) Confidentiality.--Discussions that 
                occur during the mediation process shall be 
                confidential and may not be used as evidence in 
                any subsequent due process hearing or civil 
                proceeding. The parties to the mediation 
                process may be required to sign a 
                confidentiality pledge prior to the 
                commencement of such process.
                    ``(H) Construction.--Nothing in this 
                subsection shall be construed to preclude the 
                parties to such a dispute from informally 
                resolving the dispute prior to proceedings 
                under this paragraph or paragraph (5), if the 
                informal process used is not used to deny or 
                delay the right of the applicant or eligible 
                individual to a hearing under this subsection 
                or to deny any other right afforded under this 
                title.
            ``(5) Hearings.--
                    ``(A) Officer.--A due process hearing 
                described in paragraph (2) shall be conducted 
                by an impartial hearing officer who shall issue 
                a decision based on the provisions of the 
                approved State plan, this Act (including 
                regulations implementing this Act), and State 
                regulations and policies that are consistent 
                with the Federal requirements specified in this 
                title. The officer shall provide the decision 
                in writing to the applicant or eligible 
                individual, or, as appropriate, the applicant's 
                representative or individual's representative, 
                and to the designated State unit.
                    ``(B) List.--The designated State unit 
                shall maintain a list of qualified impartial 
                hearing officers who are knowledgeable in laws 
                (including regulations) relating to the 
                provision of vocational rehabilitation services 
                under this title from which the officer 
                described in subparagraph (A) shall be 
                selected. For the purposes of maintaining such 
                list, impartial hearing officers shall be 
                identified jointly by--
                            ``(i) the designated State unit; 
                        and
                            ``(ii) members of the Council or 
                        commission, as appropriate, described 
                        in section 101(a)(21).
                    ``(C) Selection.--Such an impartial hearing 
                officer shall be selected to hear a particular 
                case relating to a determination--
                            ``(i) on a random basis; or
                            ``(ii) by agreement between--
                                    ``(I) the Director of the 
                                designated State unit and the 
                                individual with a disability; 
                                or
                                    ``(II) in appropriate 
                                cases, the Director and the 
                                individual's representative.
                    ``(D) Procedures for seeking review.--A 
                State may establish procedures to enable a 
                party involved in a hearing under this 
                paragraph to seek an impartial review of the 
                decision of the hearing officer under 
                subparagraph (A) by--
                            ``(i) the chief official of the 
                        designated State agency if the State 
                        has established both a designated State 
                        agency and a designated State unit 
                        under section 101(a)(2); or
                            ``(ii) an official from the office 
                        of the Governor.
                    ``(E) Review request.--If the State 
                establishes impartial review procedures under 
                subparagraph (D), either party may request the 
                review of the decision of the hearing officer 
                within 20 days after the decision.
                    ``(F) Reviewing official.--The reviewing 
                official described in subparagraph (D) shall--
                            ``(i) in conducting the review, 
                        provide an opportunity for the 
                        submission of additional evidence and 
                        information relevant to a final 
                        decision concerning the matter under 
                        review;
                            ``(ii) not overturn or modify the 
                        decision of the hearing officer, or 
                        part of the decision, that supports the 
                        position of the applicant or eligible 
                        individual unless the reviewing 
                        official concludes, based on clear and 
                        convincing evidence, that the decision 
                        of the impartial hearing officer is 
                        clearly erroneous on the basis of being 
                        contrary to the approved State plan, 
                        this Act (including regulations 
                        implementing this Act) or any State 
                        regulation or policy that is consistent 
                        with the Federal requirements specified 
                        in this title; and
                            ``(iii) make a final decision with 
                        respect to the matter in a timely 
                        manner and provide such decision in 
                        writing to the applicant or eligible 
                        individual, or, as appropriate, the 
                        applicant's representative or 
                        individual's representative, and to the 
                        designated State unit, including a full 
                        report of the findings and the grounds 
                        for such decision.
                    ``(G) Finality of hearing decision.--A 
                decision made after a hearing under 
                subparagraph (A) shall be final, except that a 
                party may request an impartial review if the 
                State has established procedures for such 
                review under subparagraph (D) and a party 
                involved in a hearing may bring a civil action 
                under subparagraph (J).
                    ``(H) Finality of review.--A decision made 
                under subparagraph (F) shall be final unless 
                such a party brings a civil action under 
                subparagraph (J).
                    ``(I) Implementation.--If a party brings a 
                civil action under subparagraph (J) to 
                challenge a final decision of a hearing officer 
                under subparagraph (A) or to challenge a final 
                decision of a State reviewing official under 
                subparagraph (F), the final decision involved 
                shall be implemented pending review by the 
                court.
                    ``(J) Civil action.--
                            ``(i) In general.--Any party 
                        aggrieved by a final decision described 
                        in subparagraph (I), may bring a civil 
                        action for review of such decision. The 
                        action may be brought in any State 
                        court of competent jurisdiction or in a 
                        district court of the United States of 
                        competent jurisdiction without regard 
                        to the amount in controversy.
                            ``(ii) Procedure.--In any action 
                        brought under this subparagraph, the 
                        court--
                                    ``(I) shall receive the 
                                records relating to the hearing 
                                under subparagraph (A) and the 
                                records relating to the State 
                                review under subparagraphs (D) 
                                through (F), if applicable;
                                    ``(II) shall hear 
                                additional evidence at the 
                                request of a party to the 
                                action; and
                                    ``(III) basing the decision 
                                of the court on the 
                                preponderance of the evidence, 
                                shall grant such relief as the 
                                court determines to be 
                                appropriate.
            ``(6) Hearing board.--
                    ``(A) In general.--A fair hearing board, 
                established by a State before January 1, 1985, 
                and authorized under State law to review 
                determinations or decisions under this Act, is 
                authorized to carry out the responsibilities of 
                the impartial hearing officer under this 
                subsection.
                    ``(B) Application.--The provisions of 
                paragraphs (1), (2), and (3) that relate to due 
                process hearings do not apply, and paragraph 
                (5) (other than subparagraph (J)) does not 
                apply, to any State to which subparagraph (A) 
                applies.
            ``(7) Impact on provision of services.--Unless the 
        individual with a disability so requests, or, in an 
        appropriate case, the individual's representative, so 
        requests, pending a decision by a mediator, hearing 
        officer, or reviewing officer under this subsection, 
        the designated State unit shall not institute a 
        suspension, reduction, or termination of services being 
        provided for the individual, including evaluation and 
        assessment services and plan development, unless such 
        services have been obtained through misrepresentation, 
        fraud, collusion, or criminal conduct on the part of 
        the individual, or the individual's representative.
            ``(8) Information collection and report.--
                    ``(A) In general.--The Director of the 
                designated State unit shall collect information 
                described in subparagraph (B) and prepare and 
                submit to the Commissioner a report containing 
                such information. The Commissioner shall 
                prepare a summary of the information furnished 
                under this paragraph and include the summary in 
                the annual report submitted under section 13. 
                The Commissioner shall also collect copies of 
                the final decisions of impartial hearing 
                officers conducting hearings under this 
                subsection and State officials conducting 
                reviews under this subsection.
                    ``(B) Information.--The information 
                required to be collected under this subsection 
                includes--
                            ``(i) a copy of the standards used 
                        by State reviewing officials for 
                        reviewing decisions made by impartial 
                        hearing officers under this subsection;
                            ``(ii) information on the number of 
                        hearings and reviews sought from the 
                        impartial hearing officers and the 
                        State reviewing officials, including 
                        the type of complaints and the issues 
                        involved;
                            ``(iii) information on the number 
                        of hearing decisions made under this 
                        subsection that were not reviewed by 
                        the State reviewing officials; and
                            ``(iv) information on the number of 
                        the hearing decisions that were 
                        reviewed by the State reviewing 
                        officials, and, based on such reviews, 
                        the number of hearing decisions that 
                        were--
                                    ``(I) sustained in favor of 
                                an applicant or eligible 
                                individual;
                                    ``(II) sustained in favor 
                                of the designated State unit;
                                    ``(III) reversed in whole 
                                or in part in favor of the 
                                applicant or eligible 
                                individual; and
                                    ``(IV) reversed in whole or 
                                in part in favor of the 
                                designated State unit.
                    ``(C) Confidentiality.--The confidentiality 
                of records of applicants and eligible 
                individuals maintained by the designated State 
                unit shall not preclude the access of the 
                Commissioner to those records for the purposes 
                described in subparagraph (A).
    ``(d) Policies and Procedures.--Each designated State 
agency, in consultation with the State Rehabilitation Council, 
if the State has such a council, shall, consistent with section 
100(a)(3)(C), develop and implement written policies and 
procedures that enable each individual who is an applicant for 
or eligible to receive vocational rehabilitation services under 
this title to exercise informed choice throughout the 
vocational rehabilitation process carried out under this title, 
including policies and procedures that require the designated 
State agency--
            ``(1) to inform each such applicant and eligible 
        individual (including students with disabilities who 
        are making the transition from programs under the 
        responsibility of an educational agency to programs 
        under the responsibility of the designated State unit), 
        through appropriate modes of communication, about the 
        availability of, and opportunities to exercise, 
        informed choice, including the availability of support 
        services for individuals with cognitive or other 
        disabilities who require assistance in exercising 
        informed choice, throughout the vocational 
        rehabilitation process;
            ``(2) to assist applicants and eligible individuals 
        in exercising informed choice in decisions related to 
        the provision of assessment services under this title;
            ``(3) to develop and implement flexible procurement 
        policies and methods that facilitate the provision of 
        services, and that afford eligible individuals 
        meaningful choices among the methods used to procure 
        services, under this title;
            ``(4) to provide or assist eligible individuals in 
        acquiring information that enables those individuals to 
        exercise informed choice under this title in the 
        selection of--
                    ``(A) the employment outcome;
                    ``(B) the specific vocational 
                rehabilitation services needed to achieve the 
                employment outcome;
                    ``(C) the entity that will provide the 
                services;
                    ``(D) the employment setting and the 
                settings in which the services will be 
                provided; and
                    ``(E) the methods available for procuring 
                the services; and
            ``(5) to ensure that the availability and scope of 
        informed choice provided under this section is 
        consistent with the obligations of the designated State 
        agency under this title.

``SEC. 103. VOCATIONAL REHABILITATION SERVICES.

    ``(a) Vocational Rehabilitation Services for Individuals.--
Vocational rehabilitation services provided under this title 
are any services described in an individualized plan for 
employment necessary to assist an individual with a disability 
in preparing for, securing, retaining, or regaining an 
employment outcome that is consistent with the strengths, 
resources, priorities, concerns, abilities, capabilities, 
interests, and informed choice of the individual, including--
            ``(1) an assessment for determining eligibility and 
        vocational rehabilitation needs by qualified personnel, 
        including, if appropriate, an assessment by personnel 
        skilled in rehabilitation technology;
            ``(2) counseling and guidance, including 
        information and support services to assist an 
        individual in exercising informed choice consistent 
        with the provisions of section 102(d);
            ``(3) referral and other services to secure needed 
        services from other agencies through agreements 
        developed under section 101(a)(11), if such services 
        are not available under this title;
            ``(4) job-related services, including job search 
        and placement assistance, job retention services, 
        followup services, and follow-along services;
            ``(5) vocational and other training services, 
        including the provision of personal and vocational 
        adjustment services, books, tools, and other training 
        materials, except that no training services provided at 
        an institution of higher education shall be paid for 
        with funds under this title unless maximum efforts have 
        been made by the designated State unit and the 
        individual to secure grant assistance, in whole or in 
        part, from other sources to pay for such training;
            ``(6) to the extent that financial support is not 
        readily available from a source (such as through health 
        insurance of the individual or through comparable 
        services and benefits consistent with section 
        101(a)(8)(A)), other than the designated State unit, 
        diagnosis and treatment of physical and mental 
        impairments, including--
                    ``(A) corrective surgery or therapeutic 
                treatment necessary to correct or substantially 
                modify a physical or mental condition that 
                constitutes a substantial impediment to 
                employment, but is of such a nature that such 
                correction or modification may reasonably be 
                expected to eliminate or reduce such impediment 
                to employment within a reasonable length of 
                time;
                    ``(B) necessary hospitalization in 
                connection with surgery or treatment;
                    ``(C) prosthetic and orthotic devices;
                    ``(D) eyeglasses and visual services as 
                prescribed by qualified personnel who meet 
                State licensure laws and who are selected by 
                the individual;
                    ``(E) special services (including 
                transplantation and dialysis), artificial 
                kidneys, and supplies necessary for the 
                treatment of individuals with end-stage renal 
                disease; and
                    ``(F) diagnosis and treatment for mental 
                and emotional disorders by qualified personnel 
                who meet State licensure laws;
            ``(7) maintenance for additional costs incurred 
        while participating in an assessment for determining 
        eligibility and vocational rehabilitation needs or 
        while receiving services under an individualized plan 
        for employment;
            ``(8) transportation, including adequate training 
        in the use of public transportation vehicles and 
        systems, that is provided in connection with the 
        provision of any other service described in this 
        section and needed by the individual to achieve an 
        employment outcome;
            ``(9) on-the-job or other related personal 
        assistance services provided while an individual is 
        receiving other services described in this section;
            ``(10) interpreter services provided by qualified 
        personnel for individuals who are deaf or hard of 
        hearing, and reader services for individuals who are 
        determined to be blind, after an examination by 
        qualified personnel who meet State licensure laws;
            ``(11) rehabilitation teaching services, and 
        orientation and mobility services, for individuals who 
        are blind;
            ``(12) occupational licenses, tools, equipment, and 
        initial stocks and supplies;
            ``(13) technical assistance and other consultation 
        services to conduct market analyses, develop business 
        plans, and otherwise provide resources, to the extent 
        such resources are authorized to be provided through 
        the statewide workforce investment system, to eligible 
        individuals who are pursuing self-employment or 
        telecommuting or establishing a small business 
        operation as an employment outcome;
            ``(14) rehabilitation technology, including 
        telecommunications, sensory, and other technological 
        aids and devices;
            ``(15) transition services for students with 
        disabilities, that facilitate the achievement of the 
        employment outcome identified in the individualized 
        plan for employment;
            ``(16) supported employment services;
            ``(17) services to the family of an individual with 
        a disability necessary to assist the individual to 
        achieve an employment outcome; and
            ``(18) specific post-employment services necessary 
        to assist an individual with a disability to, retain, 
        regain, or advance in employment.
    ``(b) Vocational Rehabilitation Services for Groups of 
Individuals.--Vocational rehabilitation services provided for 
the benefit of groups of individuals with disabilities may also 
include the following:
            ``(1) In the case of any type of small business 
        operated by individuals with significant disabilities 
        the operation of which can be improved by management 
        services and supervision provided by the designated 
        State agency, the provision of such services and 
        supervision, along or together with the acquisition by 
        the designated State agency of vending facilities or 
        other equipment and initial stocks and supplies.
            ``(2)(A) The establishment, development, or 
        improvement of community rehabilitation programs, 
        including, under special circumstances, the 
        construction of a facility. Such programs shall be used 
        to provide services that promote integration and 
        competitive employment.
            ``(B) The provision of other services, that promise 
        to contribute substantially to the rehabilitation of a 
        group of individuals but that are not related directly 
        to the individualized plan for employment of any 1 
        individual with a disability.
            ``(3) The use of telecommunications systems 
        (including telephone, television, satellite, radio, and 
        other similar systems) that have the potential for 
        substantially improving delivery methods of activities 
        described in this section and developing appropriate 
        programming to meet the particular needs of individuals 
        with disabilities.
            ``(4)(A) Special services to provide nonvisual 
        access to information for individuals who are blind, 
        including the use of telecommunications, Braille, sound 
        recordings, or other appropriate media.
            ``(B) Captioned television, films, or video 
        cassettes for individuals who are deaf or hard of 
        hearing.
            ``(C) Tactile materials for individuals who are 
        deaf-blind.
            ``(D) Other special services that provide 
        information through tactile, vibratory, auditory, and 
        visual media.
            ``(5) Technical assistance and support services to 
        businesses that are not subject to title I of the 
        Americans with Disabilities Act of 1990 (42 U.S.C. 
        12111 et seq.) and that are seeking to employ 
        individuals with disabilities.
            ``(6) Consultative and technical assistance 
        services to assist educational agencies in planning for 
        the transition of students with disabilities from 
        school to post-school activities, including employment.

``SEC. 104. NON-FEDERAL SHARE FOR ESTABLISHMENT OF PROGRAM OR 
                    CONSTRUCTION.

    ``For the purpose of determining the amount of payments to 
States for carrying out part B (or to an Indian tribe under 
part C), the non-Federal share, subject to such limitations and 
conditions as may be prescribed in regulations by the 
Commissioner, shall include contributions of funds made by any 
private agency, organization, or individual to a State or local 
agency to assist in meeting the costs of establishment of a 
community rehabilitation program or construction, under special 
circumstances, of a facility for such a program, which would be 
regarded as State or local funds except for the condition, 
imposed by the contributor, limiting use of such funds to 
establishment of such a program or construction of such a 
facility.

``SEC. 105. STATE REHABILITATION COUNCIL.

    ``(a) Establishment.--
            ``(1) In general.--Except as provided in section 
        101(a)(21)(A)(i), to be eligible to receive financial 
        assistance under this title a State shall establish a 
        State Rehabilitation Council (referred to in this 
        section as the `Council') in accordance with this 
        section.
            ``(2) Separate agency for individuals who are 
        blind.--A State that designates a State agency to 
        administer the part of the State plan under which 
        vocational rehabilitation services are provided for 
        individuals who are blind under section 101(a)(2)(A)(i) 
        may establish a separate Council in accordance with 
        this section to perform the duties of such a Council 
        with respect to such State agency.
    ``(b) Composition and Appointment.--
            ``(1) Composition.--
                    ``(A) In general.--Except in the case of a 
                separate Council established under subsection 
                (a)(2), the Council shall be composed of--
                            ``(i) at least one representative 
                        of the Statewide Independent Living 
                        Council established under section 705, 
                        which representative may be the 
                        chairperson or other designee of the 
                        Council;
                            ``(ii) at least one representative 
                        of a parent training and information 
                        center established pursuant to section 
                        682(a) of the Individuals with 
                        Disabilities Education Act (as added by 
                        section 101 of the Individuals with 
                        Disabilities Education Act Amendments 
                        of 1997; Public Law 105-17);
                            ``(iii) at least one representative 
                        of the client assistance program 
                        established under section 112;
                            ``(iv) at least one qualified 
                        vocational rehabilitation counselor, 
                        with knowledge of and experience with 
                        vocational rehabilitation programs, who 
                        shall serve as an ex officio, nonvoting 
                        member of the Council if the counselor 
                        is an employee of the designated State 
                        agency;
                            ``(v) at least one representative 
                        of community rehabilitation program 
                        service providers;
                            ``(vi) four representatives of 
                        business, industry, and labor;
                            ``(vii) representatives of 
                        disability advocacy groups representing 
                        a cross section of--
                                    ``(I) individuals with 
                                physical, cognitive, sensory, 
                                and mental disabilities; and
                                    ``(II) individuals' 
                                representatives of individuals 
                                with disabilities who have 
                                difficulty in representing 
                                themselves or are unable due to 
                                their disabilities to represent 
                                themselves;
                            ``(viii) current or former 
                        applicants for, or recipients of, 
                        vocational rehabilitation services;
                            ``(ix) in a State in which one or 
                        more projects are carried out under 
                        section 121, at least one 
                        representative of the directors of the 
                        projects;
                            ``(x) at least one representative 
                        of the State educational agency 
                        responsible for the public education of 
                        students with disabilities who are 
                        eligible to receive services under this 
                        title and part B of the Individuals 
                        with Disabilities Education Act; and
                            ``(xi) at least one representative 
                        of the State workforce investment 
                        board.
                    ``(B) Separate council.--In the case of a 
                separate Council established under subsection 
                (a)(2), the Council shall be composed of--
                            ``(i) at least one representative 
                        described in subparagraph (A)(i);
                            ``(ii) at least one representative 
                        described in subparagraph (A)(ii);
                            ``(iii) at least one representative 
                        described in subparagraph (A)(iii);
                            ``(iv) at least one vocational 
                        rehabilitation counselor described in 
                        subparagraph (A)(iv), who shall serve 
                        as described in such subparagraph;
                            ``(v) at least one representative 
                        described in subparagraph (A)(v);
                            ``(vi) four representatives 
                        described in subparagraph (A)(vi);
                            ``(vii) at least one representative 
                        of a disability advocacy group 
                        representing individuals who are blind;
                            ``(viii) at least one individual's 
                        representative, of an individual who--
                                    ``(I) is an individual who 
                                is blind and has multiple 
                                disabilities; and
                                    ``(II) has difficulty in 
                                representing himself or herself 
                                or is unable due to 
                                disabilities to represent 
                                himself or herself;
                            ``(ix) applicants or recipients 
                        described in subparagraph (A)(viii);
                            ``(x) in a State described in 
                        subparagraph (A)(ix), at least one 
                        representative described in such 
                        subparagraph;
                            ``(xi) at least one representative 
                        described in subparagraph (A)(x); and
                            ``(xii) at least one representative 
                        described in subparagraph (A)(xi).
                    ``(C) Exception.--In the case of a separate 
                Council established under subsection (a)(2), 
                any Council that is required by State law, as 
                in effect on the date of enactment of the 
                Rehabilitation Act Amendments of 1992, to have 
                fewer than 15 members shall be deemed to be in 
                compliance with subparagraph (B) if the 
                Council--
                            ``(i) meets the requirements of 
                        subparagraph (B), other than the 
                        requirements of clauses (vi) and (ix) 
                        of such subparagraph; and
                            ``(ii) includes at least--
                                    ``(I) one representative 
                                described in subparagraph 
                                (B)(vi); and
                                    ``(II) one applicant or 
                                recipient described in 
                                subparagraph (B)(ix).
            ``(2) Ex officio member.--The Director of the 
        designated State unit shall be an ex officio, nonvoting 
        member of the Council.
            ``(3) Appointment.--Members of the Council shall be 
        appointed by the Governor. The Governor shall select 
        members after soliciting recommendations from 
        representatives of organizations representing a broad 
        range of individuals with disabilities and 
        organizations interested in individuals with 
        disabilities. In selecting members, the Governor shall 
        consider, to the greatest extent practicable, the 
        extent to which minority populations are represented on 
        the Council.
            ``(4) Qualifications.--
                    ``(A) In general.--A majority of Council 
                members shall be persons who are--
                            ``(i) individuals with disabilities 
                        described in section 7(20)(A); and
                            ``(ii) not employed by the 
                        designated State unit.
                    ``(B) Separate council.--In the case of a 
                separate Council established under subsection 
                (a)(2), a majority of Council members shall be 
                persons who are--
                            ``(i) blind; and
                            ``(ii) not employed by the 
                        designated State unit.
            ``(5) Chairperson.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Council shall select a 
                chairperson from among the membership of the 
                Council.
                    ``(B) Designation by governor.--In States 
                in which the chief executive officer does not 
                have veto power pursuant to State law, the 
                Governor shall designate a member of the 
                Council to serve as the chairperson of the 
                Council or shall require the Council to so 
                designate such a member.
            ``(6) Terms of appointment.--
                    ``(A) Length of term.--Each member of the 
                Council shall serve for a term of not more than 
                3 years, except that--
                            ``(i) a member appointed to fill a 
                        vacancy occurring prior to the 
                        expiration of the term for which a 
                        predecessor was appointed, shall be 
                        appointed for the remainder of such 
                        term; and
                            ``(ii) the terms of service of the 
                        members initially appointed shall be 
                        (as specified by the Governor) for such 
                        fewer number of years as will provide 
                        for the expiration of terms on a 
                        staggered basis.
                    ``(B) Number of terms.--No member of the 
                Council, other than a representative described 
                in clause (iii) or (ix) of paragraph (1)(A), or 
                clause (iii) or (x) of paragraph (1)(B), may 
                serve more than two consecutive full terms.
            ``(7) Vacancies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any vacancy occurring in the 
                membership of the Council shall be filled in 
                the same manner as the original appointment. 
                The vacancy shall not affect the power of the 
                remaining members to execute the duties of the 
                Council.
                    ``(B) Delegation.--The Governor may 
                delegate the authority to fill such a vacancy 
                to the remaining members of the Council after 
                making the original appointment.
    ``(c) Functions of Council.--The Council shall, after 
consulting with the State workforce investment board--
            ``(1) review, analyze, and advise the designated 
        State unit regarding the performance of the 
        responsibilities of the unit under this title, 
        particularly responsibilities relating to--
                    ``(A) eligibility (including order of 
                selection);
                    ``(B) the extent, scope, and effectiveness 
                of services provided; and
                    ``(C) functions performed by State agencies 
                that affect or that potentially affect the 
                ability of individuals with disabilities in 
                achieving employment outcomes under this title;
            ``(2) in partnership with the designated State 
        unit--
                    ``(A) develop, agree to, and review State 
                goals and priorities in accordance with section 
                101(a)(15)(C); and
                    ``(B) evaluate the effectiveness of the 
                vocational rehabilitation program and submit 
                reports of progress to the Commissioner in 
                accordance with section 101(a)(15)(E);
            ``(3) advise the designated State agency and the 
        designated State unit regarding activities authorized 
        to be carried out under this title, and assist in the 
        preparation of the State plan and amendments to the 
        plan, applications, reports, needs assessments, and 
        evaluations required by this title;
            ``(4) to the extent feasible, conduct a review and 
        analysis of the effectiveness of, and consumer 
        satisfaction with--
                    ``(A) the functions performed by the 
                designated State agency;
                    ``(B) vocational rehabilitation services 
                provided by State agencies and other public and 
                private entities responsible for providing 
                vocational rehabilitation services to 
                individuals with disabilities under this Act; 
                and
                    ``(C) employment outcomes achieved by 
                eligible individuals receiving services under 
                this title, including the availability of 
                health and other employment benefits in 
                connection with such employment outcomes;
            ``(5) prepare and submit an annual report to the 
        Governor and the Commissioner on the status of 
        vocational rehabilitation programs operated within the 
        State, and make the report available to the public;
            ``(6) to avoid duplication of efforts and enhance 
        the number of individuals served, coordinate activities 
        with the activities of other councils within the State, 
        including the Statewide Independent Living Council 
        established under section 705, the advisory panel 
        established under section 612(a)(21) of the Individual 
        with Disabilities Education Act (as amended by section 
        101 of the Individuals with Disabilities Education Act 
        Amendments of 1997; Public Law 105-17), the State 
        Developmental Disabilities Council described in section 
        124 of the Developmental Disabilities Assistance and 
        Bill of Rights Act (42 U.S.C. 6024), the State mental 
        health planning council established under section 
        1914(a) of the Public Health Service Act (42 U.S.C. 
        300x-4(a)), and the State workforce investment board;
            ``(7) provide for coordination and the 
        establishment of working relationships between the 
        designated State agency and the Statewide Independent 
        Living Council and centers for independent living 
        within the State; and
            ``(8) perform such other functions, consistent with 
        the purpose of this title, as the State Rehabilitation 
        Council determines to be appropriate, that are 
        comparable to the other functions performed by the 
        Council.
    ``(d) Resources.--
            ``(1) Plan.--The Council shall prepare, in 
        conjunction with the designated State unit, a plan for 
        the provision of such resources, including such staff 
        and other personnel, as may be necessary and sufficient 
        to carry out the functions of the Council under this 
        section. The resource plan shall, to the maximum extent 
        possible, rely on the use of resources in existence 
        during the period of implementation of the plan.
            ``(2) Resolution of disagreements.--To the extent 
        that there is a disagreement between the Council and 
        the designated State unit in regard to the resources 
        necessary to carry out the functions of the Council as 
        set forth in this section, the disagreement shall be 
        resolved by the Governor consistent with paragraph (1).
            ``(3) Supervision and evaluation.--Each Council 
        shall, consistent with State law, supervise and 
        evaluate such staff and other personnel as may be 
        necessary to carry out its functions under this 
        section.
            ``(4) Personnel conflict of interest.--While 
        assisting the Council in carrying out its duties, staff 
        and other personnel shall not be assigned duties by the 
        designated State unit or any other agency or office of 
        the State, that would create a conflict of interest.
    ``(e) Conflict of Interest.--No member of the Council shall 
cast a vote on any matter that would provide direct financial 
benefit to the member or otherwise give the appearance of a 
conflict of interest under State law.
    ``(f) Meetings.--The Council shall convene at least 4 
meetings a year in such places as it determines to be necessary 
to conduct Council business and conduct such forums or hearings 
as the Council considers appropriate. The meetings, hearings, 
and forums shall be publicly announced. The meetings shall be 
open and accessible to the general public unless there is a 
valid reason for an executive session.
    ``(g) Compensation and Expenses.--The Council may use funds 
allocated to the Council by the designated State unit under 
this title (except for funds appropriated to carry out the 
client assistance program under section 112 and funds reserved 
pursuant to section 110(c) to carry out part C) to reimburse 
members of the Council for reasonable and necessary expenses of 
attending Council meetings and performing Council duties 
(including child care and personal assistance services), and to 
pay compensation to a member of the Council, if such member is 
not employed or must forfeit wages from other employment, for 
each day the member is engaged in performing the duties of the 
Council.
    ``(h) Hearings and Forums.--The Council is authorized to 
hold such hearings and forums as the Council may determine to 
be necessary to carry out the duties of the Council.

``SEC. 106. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.

    ``(a) Establishment.--
            ``(1) In general.--
                    ``(A) Establishment of standards and 
                indicators.--The Commissioner shall, not later 
                than July 1, 1999, establish and publish 
                evaluation standards and performance indicators 
                for the vocational rehabilitation program 
                carried out under this title.
                    ``(B) Review and revision.--Effective July 
                1, 1999, the Commissioner shall review and, if 
                necessary, revise the evaluation standards and 
                performance indicators every 3 years. Any 
                revisions of the standards and indicators shall 
                be developed with input from State vocational 
                rehabilitation agencies, related professional 
                and consumer organizations, recipients of 
                vocational rehabilitation services, and other 
                interested parties. Any revisions of the 
                standards and indicators shall be subject to 
                the publication, review, and comment provisions 
                of paragraph (3).
                    ``(C) Bases.--Effective July 1, 1999, to 
                the maximum extent practicable, the standards 
                and indicators shall be consistent with the 
                core indicators of performance established 
                under section 136(b) of the Workforce 
                Investment Act of 1998.
            ``(2) Measures.--The standards and indicators shall 
        include outcome and related measures of program 
        performance that facilitate the accomplishment of the 
        purpose and policy of this title.
            ``(3) Comment.--The standards and indicators shall 
        be developed with input from State vocational 
        rehabilitation agencies, related professional and 
        consumer organizations, recipients of vocational 
        rehabilitation services, and other interested parties. 
        The Commissioner shall publish in the Federal Register 
        a notice of intent to regulate regarding the 
        development of proposed standards and indicators. 
        Proposed standards and indicators shall be published in 
        the Federal Register for review and comment. Final 
        standards and indicators shall be published in the 
        Federal Register.
    ``(b) Compliance.--
            ``(1) State reports.--In accordance with 
        regulations established by the Secretary, each State 
        shall report to the Commissioner after the end of each 
        fiscal year the extent to which the State is in 
        compliance with the standards and indicators.
            ``(2) Program improvement.--
                    ``(A) Plan.--If the Commissioner determines 
                that the performance of any State is below 
                established standards, the Commissioner shall 
                provide technical assistance to the State, and 
                the State and the Commissioner shall jointly 
                develop a program improvement plan outlining 
                the specific actions to be taken by the State 
                to improve program performance.
                    ``(B) Review.--The Commissioner shall--
                            ``(i) review the program 
                        improvement efforts of the State on a 
                        biannual basis and, if necessary, 
                        request the State to make further 
                        revisions to the plan to improve 
                        performance; and
                            ``(ii) continue to conduct such 
                        reviews and request such revisions 
                        until the State sustains satisfactory 
                        performance over a period of more than 
                        1 year.
    ``(c) Withholding.--If the Commissioner determines that a 
State whose performance falls below the established standards 
has failed to enter into a program improvement plan, or is not 
complying substantially with the terms and conditions of such a 
program improvement plan, the Commissioner shall, consistent 
with subsections (c) and (d) of section 107, reduce or make no 
further payments to the State under this program, until the 
State has entered into an approved program improvement plan, or 
satisfies the Commissioner that the State is complying 
substantially with the terms and conditions of such a program 
improvement plan, as appropriate.
    ``(d) Report to Congress.--Beginning in fiscal year 1999, 
the Commissioner shall include in each annual report to the 
Congress under section 13 an analysis of program performance, 
including relative State performance, based on the standards 
and indicators.

``SEC. 107. MONITORING AND REVIEW.

    ``(a) In General.--
            ``(1) Duties.--In carrying out the duties of the 
        Commissioner under this title, the Commissioner shall--
                    ``(A) provide for the annual review and 
                periodic onsite monitoring of programs under 
                this title; and
                    ``(B) determine whether, in the 
                administration of the State plan, a State is 
                complying substantially with the provisions of 
                such plan and with evaluation standards and 
                performance indicators established under 
                section 106.
            ``(2) Procedures for reviews.--In conducting 
        reviews under this section the Commissioner shall 
        consider, at a minimum--
                    ``(A) State policies and procedures;
                    ``(B) guidance materials;
                    ``(C) decisions resulting from hearings 
                conducted in accordance with due process;
                    ``(D) State goals established under section 
                101(a)(15) and the extent to which the State 
                has achieved such goals;
                    ``(E) plans and reports prepared under 
                section 106(b);
                    ``(F) consumer satisfaction reviews and 
                analyses described in section 105(c)(4);
                    ``(G) information provided by the State 
                Rehabilitation Council established under 
                section 105, if the State has such a Council, 
                or by the commission described in section 
                101(a)(21)(A)(i), if the State has such a 
                commission;
                    ``(H) reports; and
                    ``(I) budget and financial management data.
            ``(3) Procedures for monitoring.--In conducting 
        monitoring under this section the Commissioner shall 
        conduct--
                    ``(A) onsite visits, including onsite 
                reviews of records to verify that the State is 
                following requirements regarding the order of 
                selection set forth in section 101(a)(5)(A);
                    ``(B) public hearings and other strategies 
                for collecting information from the public;
                    ``(C) meetings with the State 
                Rehabilitation Council, if the State has such a 
                Council or with the commission described in 
                section 101(a)(21)(A)(i), if the State has such 
                a commission;
                    ``(D) reviews of individual case files, 
                including individualized plans for employment 
                and ineligibility determinations; and
                    ``(E) meetings with qualified vocational 
                rehabilitation counselors and other personnel.
            ``(4) Areas of inquiry.--In conducting the review 
        and monitoring, the Commissioner shall examine--
                    ``(A) the eligibility process;
                    ``(B) the provision of services, including, 
                if applicable, the order of selection;
                    ``(C) such other areas as may be identified 
                by the public or through meetings with the