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109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                      109-9

======================================================================



 
                  JOB TRAINING IMPROVEMENT ACT OF 2005

                                _______
                                

 February 25, 2005.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                         [To accompany H.R. 27]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 27) to enhance the workforce investment 
system of the Nation by strengthening one-stop career centers, 
providing for more effective governance arrangements, promoting 
access to a more comprehensive array of employment, training, 
and related services, establishing a targeted approach to 
serving youth, and improving performance accountability, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Job Training Improvement Act of 
2005''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.

 TITLE I--AMENDMENTS TO TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998

Sec. 101. Definitions.
Sec. 102. Purpose.
Sec. 103. State workforce investment boards.
Sec. 104. State plan.
Sec. 105. Local workforce investment areas.
Sec. 106. Local workforce investment boards.
Sec. 107. Local plan.
Sec. 108. Establishment of one-stop delivery systems.
Sec. 109. Eligible providers of training services.
Sec. 110. Eligible providers of youth activities.
Sec. 111. Youth Activities.
Sec. 112. Comprehensive programs for adults.
Sec. 113. Performance accountability system.
Sec. 114. Authorization of appropriations.
Sec. 115. Job corps.
Sec. 116. Native American programs.
Sec. 117. Migrant and seasonal farmworker programs.
Sec. 118. Veterans' workforce investment programs.
Sec. 119. Youth challenge grants.
Sec. 120. Technical assistance.
Sec. 121. Demonstration, pilot, multiservice, research and multi-State 
projects.
Sec. 122. Community-based job training.
Sec. 123. Personal Reemployment Accounts.
Sec. 124. Training for realtime writers.
Sec. 125. Business partnership grants.
Sec. 126. National dislocated worker grants.
Sec. 127. Authorization of appropriations for national activities.
Sec. 128. Requirements and restrictions.
Sec. 129. Nondiscrimination.
Sec. 130. Administrative provisions.
Sec. 131. General program requirements.

 TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY EDUCATION

Sec. 201. Table of contents.
Sec. 202. Amendment.

             TITLE III--AMENDMENTS TO THE WAGNER-PEYSER ACT

Sec. 301. Amendments to the Wagner-Peyser Act.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

Sec. 401. Findings.
Sec. 402. Rehabilitation Services Administration.
Sec. 403. Director.
Sec. 404. Definitions.
Sec. 405. State plan.
Sec. 406. Scope of services.
Sec. 407. Standards and indicators.
Sec. 408. Reservation for expanded transition services.
Sec. 409. Client assistance program.
Sec. 410. Protection and advocacy of individual rights.
Sec. 411. Chairperson.
Sec. 412. Authorizations of appropriations.
Sec. 413. Conforming amendment.
Sec. 414. Helen Keller National Center Act.

                 TITLE V--TRANSITION AND EFFECTIVE DATE

Sec. 501. Transition provisions.
Sec. 502. Effective date.

SEC. 3. REFERENCES.

  Except as otherwise expressly provided, wherever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the amendment or repeal shall be 
considered to be made to a section or other provision of the Workforce 
Investment Act of 1998 (20 U.S.C. 9201 et seq.).

 TITLE I--AMENDMENTS TO TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998

SEC. 101. DEFINITIONS.

  Section 101 (29 U.S.C. 2801) is amended--
          (1) by striking paragraphs (13) and (24) and redesignating 
        paragraphs (1) through (12) as paragraphs (3) through (14), and 
        paragraphs (14) through (23) as paragraphs (15) through (24), 
        respectively;
          (2) by inserting after ``In this title:'' the following new 
        paragraphs:
          ``(1) Accrued expenditures.--The term `accrued expenditures' 
        means charges incurred by recipients of funds under this title 
        for a given period requiring the provision of funds for goods 
        or other tangible property received; services performed by 
        employees, contractors, subgrantees, and other payees; and 
        other amounts becoming owed under programs assisted under this 
        title for which no current services or performance is required, 
        such as annuities, insurance claims, and other benefit 
        payments.
          ``(2) Administrative costs.--The term `administrative costs' 
        means expenditures incurred by State and local workforce 
        investment boards, direct recipients (including State grant 
        recipients under subtitle B and recipients of awards under 
        subtitle D), local grant recipients, local fiscal agents or 
        local grant subrecipients, and one-stop operators in the 
        performance of administrative functions and in carrying out 
        activities under this title which are not related to the direct 
        provision of workforce investment services (including services 
        to participants and employers). Such costs include both 
        personnel and non-personnel and both direct and indirect.'';
          (3) in paragraph (6) (as so redesignated), by inserting ``(or 
        such other level as the Governor may establish)'' after ``8th 
        grade level'';
          (4) in paragraph (10) (as so redesignated)--
                  (A) in subparagraph (B), by striking ``and'' after 
                the semicolon;
                  (B) in subparagraph (C)--
                          (i) by striking ``not less than 50 percent of 
                        the cost of the training'' and inserting ``a 
                        significant portion of the cost of training, as 
                        determined by the local board''; and
                          (ii) by striking the period and inserting ``; 
                        and''; and
                  (C) by adding at the end the following:
                  ``(D) in the case of customized training with an 
                employer in multiple local areas in the State, for 
                which such employer pays a significant portion of the 
                cost of the training, as determined by the Governor.'';
          (5) in paragraph (11)(A)(ii)(II) (as so redesignated) by 
        striking ``section 134(c)'' and inserting ``section 121(e)'';
          (6) in paragraph (14)(A) (as so redesignated) by striking 
        ``section 122(e)(3)'' and inserting ``section 122'';
          (7) in paragraph (25)--
                  (A) in subparagraph (B), by striking ``higher of--'' 
                and all that follows through clause (ii) and inserting 
                ``poverty line for an equivalent period;''; and
                  (B) by redesignating subparagraphs (D) through (F) as 
                subparagraphs (E) through (G), respectively, and 
                inserting after subparagraph (C) the following:
                  ``(D) receives or is eligible to receive free or 
                reduced price lunch under the Richard B. Russell 
                National School Lunch Act (42 U.S.C. 1751 et seq.);'';
          (8) in paragraph (32) by striking ``the Republic of the 
        Marshall Islands, the Federated States of Micronesia,''; and
          (9) by striking paragraph (33) and redesignating paragraphs 
        (34) through (53) as paragraphs (33) through (52), 
        respectively.

SEC. 102. PURPOSE.

  Section 106 (29 U.S.C. 2811) is amended by inserting at the end the 
following: ``It is also the purpose of this subtitle to provide 
workforce investment activities in a manner that promotes the informed 
choice of participants and actively involves participants in decisions 
affecting their participation in such activities.''.

SEC. 103. STATE WORKFORCE INVESTMENT BOARDS.

  (a) Membership.--
          (1) In general.--Section 111(b) (29 U.S.C. 2821(b)) is 
        amended--
                  (A) by amending paragraph (1)(C) to read as follows:
                  ``(C) representatives appointed by the Governor, who 
                are--
                          ``(i)(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;
                          ``(II) in any case in which no lead State 
                        agency official has responsibility for such a 
                        program or activity, a representative in the 
                        State with expertise relating to such program 
                        or activity; and
                          ``(III) if not included under subclause (I), 
                        the director of the State unit, defined in 
                        section 7(8)(B) of the Rehabilitation Act of 
                        1973 (29 U.S.C. 705(8)(B)) except that in a 
                        State that has established 2 or more designated 
                        State units to administer the vocational 
                        rehabilitation program, the board 
                        representative shall be the director of the 
                        designated State unit that serves the most 
                        individuals with disabilities in the State;
                          ``(ii) the State agency officials responsible 
                        for economic development;
                          ``(iii) representatives of business in the 
                        State who--
                                  ``(I) are owners of businesses, chief 
                                executive or operating officers of 
                                businesses, and other business 
                                executives or employers with optimum 
                                policy making or hiring authority, 
                                including members of local boards 
                                described in section 117(b)(2)(A)(i);
                                  ``(II) represent businesses with 
                                employment opportunities that reflect 
                                employment opportunities in the State; 
                                and
                                  ``(III) are appointed from among 
                                individuals nominated by State business 
                                organizations and business trade 
                                associations;
                          ``(iv) chief elected officials (representing 
                        both cities and counties, where appropriate);
                          ``(v) representatives of labor organizations, 
                        who have been nominated by State labor 
                        federations; and
                          ``(vi) such other representatives and State 
                        agency officials as the Governor may 
                        designate.''; and
                  (B) in paragraph (3), by striking ``paragraph 
                (1)(C)(i)'' and inserting ``paragraph (1)(C)(iii)''.
          (2) Conforming amendment.--Section 111(c) (29 U.S.C 2811(c)) 
        is amended by striking ``subsection (b)(1)(C)(i)'' and 
        inserting ``subsection (b)(1)(C)(iii)''.
  (b) Functions.--Section 111(d) (29 U.S.C. 2811(d)) is amended--
          (1) in paragraph (2), by striking ``section 134(c)'' and 
        inserting ``section 121(e)'';
          (2) by amending paragraph (3) to read as follows:
          ``(3) development and review of statewide policies affecting 
        the integrated provision of services through the one-stop 
        delivery system described in section 121, including--
                  ``(A) the development of criteria for, and the 
                issuance of, certifications of one-stop centers;
                  ``(B) the criteria for the allocation of one-stop 
                center infrastructure funding under section 121(h), and 
                oversight of the use of such funds;
                  ``(C) approaches to facilitating equitable and 
                efficient cost allocation in one-stop delivery systems; 
                and
                  ``(D) such other matters that may promote statewide 
                objectives for, and enhance the performance of, one-
                stop delivery systems within the State;'';
          (3) in paragraph (4), by inserting ``and the development of 
        State criteria relating to the appointment and certification of 
        local boards under section 117'' after ``section 116'';
          (4) in paragraph (5), by striking ``sections 128(b)(3)(B) and 
        133(b)(3)(B)'' and inserting ``sections 128(b)(3) and 
        133(b)(3)''; and
          (5) in paragraph (9), by striking ``section 503'' and 
        inserting ``section 136(i)''.
  (c) Elimination of Alternative Entity and Provision of Authority to 
Hire Staff.--Section 111(e) (29 U.S.C. 2821(e)) is amended to read as 
follows:
  ``(e) Authority To Hire Staff.--The State board may hire staff to 
assist in carrying out the functions described in subsection (d).''.

SEC. 104. STATE PLAN.

  (a) Planning Cycle.--Section 112(a) (29 U.S.C. 2822(a)) is amended by 
striking ``5-year strategy'' and inserting ``2-year strategy''.
  (b) Contents.--Section 112(b) (29 U.S.C. 2822(b)) is amended--
          (1) in paragraph (12)(A), by striking ``sections 128(b)(3)(B) 
        and 133(b)(3)(B)'' and inserting ``sections 128(b)(3) and 
        133(b)(3)'';
          (2) in paragraph (14), by striking ``section 134(c)'' and 
        inserting ``section 121(e)'';
          (3) in paragraph (17)(A)--
                  (A) in clause (iii) by striking ``and'';
                  (B) by amending clause (iv) to read as follows:
                          ``(iv) how the State will serve the 
                        employment and training needs of dislocated 
                        workers (including displaced homemakers and 
                        formerly self-employed and transitioning 
                        farmers, ranchers, and fisherman) low income 
                        individuals (including recipients of public 
                        assistance), individuals with limited English 
                        proficiency, homeless individuals, ex-
                        offenders, individuals training for 
                        nontraditional employment, and other 
                        individuals with multiple barriers to 
                        employment (including older individuals); 
                        and''; and
                  (C) by inserting after clause (iv) the following:
                          ``(v) how the State will serve the employment 
                        and training needs of individuals with 
                        disabilities, consistent with section 188 and 
                        Executive Order 13217 (42 U.S.C. 12131 note; 
                        relating to community-based alternatives for 
                        individuals with disabilities) including the 
                        provision of outreach, intake, assessments, and 
                        service delivery, the development of 
                        performance measures, the training of staff, 
                        and other aspects of accessibility to program 
                        services, consistent with sections 504 and 508 
                        of the Rehabilitation Act of 1973; and'';
          (4) in paragraph (18)(D), by striking ``youth opportunity 
        grants'' and inserting ``youth challenge grants''; and
          (5) by adding at the end the following new paragraphs:
          ``(19) a description of the methodology for determining one-
        stop partner program contributions for the cost of the 
        infrastructure of one-stop centers under section 121(h)(1) and 
        of the formula for allocating such infrastructure funds to 
        local areas under section 121(h)(3); and
          ``(20) a description of any programs and strategies the State 
        will utilize to meet the needs of businesses in the State, 
        including small businesses, which may include providing 
        incentives and technical assistance to assist local areas in 
        engaging employers in local workforce development 
        activities.''.
  (c) Modification to Plan.--Section 112(d) (29 U.S.C. 2822(d)) is 
amended by striking ``5-year period'' and inserting ``2-year period''.

SEC. 105. LOCAL WORKFORCE INVESTMENT AREAS.

  (a) Designation of Areas.--
          (1) Considerations.--Section 116(a)(1)(B) (29 U.S.C. 
        2831(a)(1)(B)) is amended by adding at the end the following 
        clause:
                          ``(vi) The extent to which such local areas 
                        will promote efficiency in the administration 
                        and provision of services.''.
          (2) Automatic designation.--Section 116(a)(2) (29 U.S.C. 
        2831(a)(2)) is amended to read as follows:
          ``(2) Automatic designation.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B) of this paragraph and subsection (b), the Governor 
                shall approve a request for designation as a local area 
                from--
                          ``(i) any unit of general local government 
                        with a population of 500,000 or more; and
                          ``(ii) an area served by a rural concentrated 
                        employment program grant recipient that served 
                        as a service delivery area or substate area 
                        under the Job Training Partnership Act (29 
                        U.S.C. 1501 et seq.),
                for the 2-year period covered by a State plan under 
                section 112 if such request is made not later than the 
                date of the submission of the State plan.
                  ``(B) Continued designation based on performance.--
                The Governor may deny a request for designation 
                submitted pursuant to subparagraph (A) if such unit of 
                government was designated as a local area for the 
                preceding 2-year period covered by a State plan and the 
                Governor determines that such local area did not 
                perform successfully during such period.''.
  (b) Regional Planning.--Section 116(c)(1) (29 U.S.C. 2831(c)(1)) is 
amended by adding at the end the following: ``The State may require the 
local boards for the designated region to prepare a single regional 
plan that incorporates the elements of the local plan under section 118 
and that is submitted and approved in lieu of separate local plans 
under such section.''.

SEC. 106. LOCAL WORKFORCE INVESTMENT BOARDS.

  (a) Composition.--Section 117(b)(2)(A) (29 U.S.C. 2832(b)(2)(A)) is 
amended--
          (1) in clause (i)(II), by inserting ``, businesses that are 
        in the leading industries in the local area, and large and 
        small businesses in the local area'' after ``local area'';
          (2) by amending clause (ii) to read as follows:
                          ``(ii) a superintendent of the local 
                        secondary school system, an administrator of an 
                        entity providing adult education and literacy 
                        activities that is not a one-stop partner 
                        designated under section 121(b)(1)(B), and the 
                        president or chief executive officer of a 
                        postsecondary educational institution serving 
                        the local area (including community colleges, 
                        where such entities exist);'';
          (3) in clause (iv), by striking the semicolon and inserting 
        ``and faith-based organizations; and''; and
          (4) by striking clause (vi).
  (b) Authority of Board Members.--Section 117(b)(3) (29 U.S.C. 2832(b) 
is amended--
          (1) in the heading, by inserting ``and representation'' after 
        ``members''; and
          (2) by adding at the end the following: ``The members of the 
        board shall represent diverse geographic sections within the 
        local area.''.
  (c) Functions.--Section 117(d) (29 U.S.C. 2832(d)) is amended--
          (1) in paragraph (2)(B), by striking ``by awarding grants'' 
        and all that follows through ``youth council''; and
          (2) in paragraph (4) by inserting ``, and ensure the 
        appropriate use and management of the funds provided under this 
        title for such programs, activities, and system'' after 
        ``area''.
  (d) Authority To Establish Councils and Elimination of Requirement 
for Youth Councils.--Section 117(h) (29 U.S.C. 2832(h)) is amended to 
read as follows:
  ``(h) Establishment of Councils.--The local board may establish 
councils to provide information and advice to assist the local board in 
carrying out activities under this title. Such councils may include a 
council composed of one-stop partners to advise the local board on the 
operation of the one-stop delivery system, a youth council composed of 
experts and stakeholders in youth programs to advise the local board on 
activities for youth, and such other councils as the local board 
determines are appropriate.''.
  (e) Repeal of Alternative Entity Provision.--Section 117 (29 U.S.C. 
2832) is further amended by striking subsection (i).

SEC. 107. LOCAL PLAN.

  (a) Planning Cycle.--Section 118(a) (29 U.S.C. 2833(a)) is amended by 
striking ``5-year'' and inserting ``2-year''.
  (b) Contents.--Section 118(b) (29 U.S.C. 2833(b)) is amended--
          (1) by amending paragraph (2) to read as follows:
          ``(2) a description of the one-stop delivery system to be 
        established or designated in the local area, including 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;'';
          (2) in paragraph (4), by striking ``and dislocated worker'';
          (3) in paragraph (9), by striking ``; and'' and inserting a 
        semicolon; and
          (4) by redesignating paragraph (10) as paragraph (12) and 
        inserting after paragraph (9) the following:
          ``(10) a description of the strategies and services that will 
        be initiated in the local area to engage employers, including 
        small employers, in workforce development activities;
          ``(11) how the local area will serve the employment and 
        training needs of individuals with disabilities, consistent 
        with section 188 and Executive Order 13217 (42 U.S.C. 12131 
        note) including the provision of outreach, intake, assessments, 
        and service delivery, the development of performance measures, 
        the training of staff, and other aspects of accessibility to 
        program services, consistent with sections 504 and 508 of the 
        Rehabilitation Act of 1973; and''.

SEC. 108. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS.

  (a) One-Stop Partners.--
          (1) Required partners.--Section 121(b)(1) (29 U.S.C. 
        2841(b)(1)) is amended--
                  (A) in subparagraph (B)--
                          (i) by striking clauses (ii) and (v);
                          (ii) by redesignating clauses (iii) and (iv) 
                        as clauses (ii) and (iii), respectively, and by 
                        redesignating clauses (vi) through (xii) as 
                        clauses (iv) through (x), respectively;
                          (iii) in clause (ix) (as so redesignated), by 
                        striking ``and'' at the end;
                          (iv) in clause (x) (as so redesignated), by 
                        striking the period and inserting ``; and''; 
                        and
                          (v) by inserting after clause (x)(as so 
                        redesignated) the following:
                          ``(xi) programs authorized under part A of 
                        title IV of the Social Security Act (42 U.S.C. 
                        601 et. seq.), subject to subparagraph (C).''; 
                        and
                  (B) by adding after subparagraph (B) the following:
                  ``(C) Determination by the governor.--The program 
                referred to in clause (xi) of subparagraph (B) shall be 
                included as a required partner for purposes of this 
                title in a State unless the Governor of the State 
                notifies the Secretary and the Secretary of Health and 
                Human Services in writing of a determination by the 
                Governor not to include such programs as required 
                partners for purposes of this title in the State.''.
          (2) Additional partners.--Section 121(b)(2)(B) (29 U.S.C. 
        2841(b)(2)(B)) is amended--
                  (A) by striking clause (i) and redesignating clauses 
                (ii) through (v) as clauses (i) through (iv) 
                respectively;
                  (B) in clause (iii) (as so redesignated) by striking 
                ``and'' at the end;
                  (C) in clause (iv) (as so redesignated) by striking 
                the period and inserting a semicolon; and
                  (D) by adding at the end the following new clauses:
                          ``(v) employment and training programs 
                        administered by the Social Security 
                        Administration, including the Ticket to Work 
                        program (established by Public Law 106-170);
                          ``(vi) employment and training programs 
                        carried out by the Small Business 
                        Administration;
                          ``(vii) programs under part D of title IV of 
                        the Social Security Act (42 U.S.C. 451 et seq.) 
                        (relating to child support enforcement);
                          ``(viii) employment, training, and literacy 
                        services carried out by public libraries; and
                          ``(ix) programs carried out in the local area 
                        for individuals with disabilities, including 
                        programs carried out by State agencies relating 
                        to mental health, mental retardation, and 
                        developmental disabilities, State Medicaid 
                        agencies, State Independent Living Councils, 
                        and Independent Living Centers.''.
  (b) Provision of Services.--Subtitle B of title I is amended--
          (1) in section 121(d)(2), by striking ``section 134(c)'' and 
        inserting ``subsection (e)'';
          (2) by striking subsection (e) of section 121;
          (3) by moving subsection (c) of section 134 from section 134, 
        redesignating such subsection as subsection (e), and inserting 
        such subsection (as so redesignated) after subsection (d) of 
        section 121; and
          (4) by amending subsection (e) of section 121 (as moved and 
        redesignated by paragraph (2))--
                  (A) in paragraph (1)(A), by striking ``subsection 
                (d)(2)'' and inserting ``section 134(c)(2)'';
                  (B) in paragraph (1)(B)--
                          (i) by striking ``subsection (d)'' and 
                        inserting ``section 134(c)''; and
                          (ii) by striking ``subsection (d)(4)(G)'' and 
                        inserting ``section 134(c)(4)(G)'';
                  (C) in paragraph (1)(C), by striking ``subsection 
                (e)'' and inserting ``section 134(d)'';
                  (D) in paragraph (1)(D), by striking ``section 
                121(b)'' and inserting ``subsection (b)''; and
                  (E) by amending paragraph (1)(E) to read as follows:
                  ``(E) shall provide access to the information 
                described in section 15(e) of the Wagner-Peyser Act (29 
                U.S.C. 49l-2(e)).''.
  (c) Certification and Funding of One-Stop Centers.--Section 121 (as 
amended by subsection (b)) is further amended by adding at the end the 
following new subsections:
  ``(g) Certification of One-Stop Centers.--
          ``(1) In general.--The State board shall establish procedures 
        and criteria for periodically certifying one-stop centers for 
        the purpose of awarding the one-stop infrastructure funding 
        described in subsection (h).
          ``(2) Criteria.--The criteria for certification under this 
        subsection shall include minimum standards relating to the 
        scope and degree of service integration achieved by the centers 
        involving the programs provided by the one-stop partners, and 
        how the centers ensure that such providers meet the employment 
        needs of local employers and participants.
          ``(3) Effect of certification.--One-stop centers certified 
        under this subsection shall be eligible to receive the 
        infrastructure grants authorized under subsection (h).
  ``(h) One-Stop Infrastructure Funding.--
          ``(1) Partner contributions.--
                  ``(A) Provision of funds.--Notwithstanding any other 
                provision of law, as determined under subparagraph (B), 
                a portion of the Federal funds provided to the State 
                and areas within the State under the Federal laws 
                authorizing the one-stop partner programs described in 
                subsection (b)(1)(B) and participating additional 
                partner programs described in (b)(2)(B) for a fiscal 
                year shall be provided to the Governor by such programs 
                to carry out this subsection.
                  ``(B) Determination of governor.--Subject to 
                subparagraph (C), the Governor, in consultation with 
                the State board, shall determine the portion of funds 
                to be provided under subparagraph (A) by each one-stop 
                partner and in making such determination shall consider 
                the proportionate use of the one-stop centers by each 
                partner, the costs of administration for purposes not 
                related to one-stop centers for each partner, and other 
                relevant factors described in paragraph (3).
                  ``(C) Limitations.--
                          ``(i) Provision from administrative funds.--
                        The funds provided under this paragraph by each 
                        one-stop partner shall be provided only from 
                        funds available for the costs of administration 
                        under the program administered by such partner, 
                        and shall be subject to the limitations with 
                        respect to the portion of funds under such 
                        programs that may be used for administration.
                          ``(ii) Federal direct spending programs.--
                        Programs that are Federal direct spending under 
                        section 250(c)(8) of the Balanced Budget and 
                        Emergency Deficit Control Act of 1985 (2 U.S.C. 
                        900(c)(8)) shall not, for purposes of this 
                        paragraph, be required to provide an amount in 
                        excess of the amount determined to be 
                        equivalent to the proportionate use of the one-
                        stop centers by such programs in the State.
                          ``(iii) Native american programs.--Native 
                        American programs established under section 166 
                        shall not be subject to the provisions of this 
                        subsection. The method for determining the 
                        appropriate portion of funds to be provided by 
                        such Native American programs to pay for the 
                        costs of infrastructure of a one-stop center 
                        certified under subsection (g) shall be 
                        determined as part of the development of the 
                        memorandum of understanding under subsection 
                        (c) for the one-stop center and shall be stated 
                        in the memorandum.
          ``(2) Allocation by governor.--From the funds provided under 
        paragraph (1), the Governor shall allocate funds to local areas 
        in accordance with the formula established under paragraph (3) 
        for the purposes of assisting in paying the costs of the 
        infrastructure of One-Stop centers certified under subsection 
        (g).
          ``(3) Allocation formula.--The State board shall develop a 
        formula to be used by the Governor to allocate the funds 
        described in paragraph (1). The formula shall include such 
        factors as the State board determines are appropriate, which 
        may include factors such as the number of centers in the local 
        area that have been certified, the population served by such 
        centers, and the performance of such centers.
          ``(4) Costs of infrastructure.--For purposes of this 
        subsection, the term `costs of infrastructure' means the 
        nonpersonnel costs that are necessary for the general operation 
        of a one-stop center, including the rental costs of the 
        facilities, the costs of utilities and maintenance, equipment 
        (including adaptive technology for individuals with 
        disabilities), strategic planning activities for the center, 
        and common outreach activities.
  ``(i) Other Funds.--
          ``(1) In general.--In addition to the funds provided to carry 
        out subsection (h), a portion of funds made available under 
        Federal law authorizing the one-stop partner programs described 
        in subsection (b)(1)(B) and participating partner programs 
        described in subsection (b)(2)(B), or the noncash resources 
        available under such programs shall be used to pay the costs 
        relating to the operation of the one-stop delivery system that 
        are not paid for from the funds provided under subsection (h), 
        to the extent not inconsistent with the Federal law involved 
        including--
                  ``(A) infrastructure costs that are in excess of the 
                funds provided under subsection (h);
                  ``(B) common costs that are in addition to the costs 
                of infrastructure; and
                  ``(C) the costs of the provision of core services 
                applicable to each program.
          ``(2) Determination and guidance.--The method for determining 
        the appropriate portion of funds and noncash resources to be 
        provided by each program under paragraph (1) shall be 
        determined as part of the memorandum of understanding under 
        subsection (c). The State board shall provide guidance to 
        facilitate the determination of appropriate allocation of the 
        funds and noncash resources in local areas.''.

SEC. 109. ELIGIBLE PROVIDERS OF TRAINING SERVICES.

  Section 122 (29 U.S.C. 2842) is amended to read as follows:

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

  ``(a) In General.--The Governor shall establish criteria and 
procedures regarding the eligibility of providers of training services 
described in section 134(c)(4) to receive funds provided under section 
133(b) for the provision of such training services.
  ``(b) Criteria.--
          ``(1) In general.--The criteria established pursuant to 
        subsection (a) shall take into account the performance of 
        providers of training services with respect to the indicators 
        described in section 136 or other appropriate indicators 
        (taking into consideration the characteristics of the 
        population served and relevant economic conditions), and such 
        other factors as the Governor determines are appropriate to 
        ensure the quality of services, the accountability of 
        providers, how the centers ensure that such providers meet the 
        needs of local employers and participants, whether providers of 
        training allow participants to attain a certification, 
        certificate, or mastery, and the informed choice of 
        participants under chapter 5. Such criteria shall require that 
        the provider submit appropriate, accurate and timely 
        information to the State for purposes of carrying out 
        subsection (d). The criteria shall also provide for periodic 
        review and renewal of eligibility under this section for 
        providers of training services. The Governor may authorize 
        local areas in the State to establish additional criteria or to 
        modify the criteria established by the Governor under this 
        section for purposes of determining the eligibility of 
        providers of training services to provide such services in the 
        local area.
          ``(2) Limitation.--In carrying out the requirements of this 
        subsection, no personally identifiable information regarding a 
        student, including Social Security number, student 
        identification number, or other identifier, may be disclosed 
        without the prior written consent of the parent or eligible 
        student in compliance with section 444 of the General Education 
        Provisions Act (20 U.S.C. 1232g).
  ``(c) Procedures.--The procedures established under subsection (a) 
shall identify the application process for a provider of training 
services to become eligible to receive funds under section 133(b) for 
the provision of training services, and identify the respective roles 
of the State and local areas in receiving and reviewing applications 
and in making determinations of eligibility based on the criteria 
established under this section. The procedures shall also establish a 
process for a provider of training services to appeal a denial or 
termination of eligibility under this section that includes an 
opportunity for a hearing and prescribes appropriate time limits to 
ensure prompt resolution of the appeal.
  ``(d) Information to Assist Participants in Choosing Providers.--
          ``(1) In general.--In order to facilitate and assist 
        participants under chapter 5 in choosing providers of training 
        services, the Governor shall ensure that an appropriate list or 
        lists of providers determined eligible under this section in 
        the State, accompanied by such information as the Governor 
        determines is appropriate, is provided to the local boards in 
        the State to be made available to such participants and to 
        members of the public through the one-stop delivery system in 
        the State.
          ``(2) Special rule.--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.) shall be included on the list of eligible 
        providers described in paragraph (1) for so long as such entity 
        remains certified by the Department of Labor.
  ``(e) Agreements With Other States.--States may enter into 
agreements, on a reciprocal basis, to permit eligible providers of 
training services to accept individual training accounts provided in 
another State.
  ``(f) Recommendations.--In developing the criteria, procedures, and 
information required under this section, the Governor shall solicit and 
take into consideration the recommendations of local boards and 
providers of training services within the State.
  ``(g) Opportunity to Submit Comments.--During the development of the 
criteria, procedures, and information required under this section, the 
Governor shall provide an opportunity for interested members of the 
public, including representatives of business and labor organizations, 
to submit comments regarding such criteria, procedures, and 
information.
  ``(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 (g).
          ``(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.''.

SEC. 110. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

  (a) Eligible Providers of Youth Activities.--Section 123 (29 U.S.C. 
2843) is amended to read as follows:

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

  ``(a) In General.--From the funds allocated under section 128(b) to a 
local area, the local board for such area shall award grants or 
contracts on a competitive basis to providers of youth activities 
identified based on the criteria in the State plan and shall conduct 
oversight with respect to such providers.
  ``(b) Exceptions.--A local board may award grants or contracts on a 
sole-source basis if such board determines there are an insufficient 
number of eligible providers of training services in the local area 
involved (such as rural areas) for grants to be awarded on a 
competitive basis under subsection (a).''.
  (b) Clerical Amendment.--The table of contents in section 1(b) is 
amended by amending the item related to section 123 to read as follows:

``Sec. 123. Eligible providers of youth activities.''.

SEC. 111. YOUTH ACTIVITIES.

  (a) State Allotments.--
          (1) In general.--Section 127(a) (29 U.S.C. 2852(a)) is 
        amended to read as follows:
  ``(a) Allotment Among States.--
          ``(1) Youth activities.--
                  ``(A) Youth challenge grants.--
                          ``(i) Reservation of funds.--Of the amount 
                        appropriated under section 137(a) for each 
                        fiscal year, the Secretary shall reserve 25 
                        percent to provide youth challenge grants under 
                        section 169.
                          ``(ii) Limitation.--Notwithstanding clause 
                        (i), if the amount appropriated under section 
                        137(a) for a fiscal year exceeds 
                        $1,000,000,000, the Secretary shall reserve 
                        $250,000,000 to provide youth challenge grants 
                        under section 169.
                  ``(B) Outlying areas and native americans.--
                          ``(i) In general.--After determining the 
                        amount to be reserved under subparagraph (A), 
                        of the remainder of the amount appropriated 
                        under section 137(a) for each fiscal year the 
                        Secretary shall--
                                  ``(I) reserve not more than \1/4\ of 
                                one percent of such amount to provide 
                                assistance to the outlying areas to 
                                carry out youth activities and 
                                statewide workforce investment 
                                activities; and
                                  ``(II) reserve not more than 1 and 
                                \1/2\ percent of such amount to provide 
                                youth activities under section 166 
                                (relating to Native Americans).
                          ``(ii) Restriction.--The Republic of Palau 
                        shall cease to be eligible to receive funding 
                        under this subparagraph upon entering into an 
                        agreement for extension of United States 
                        educational assistance under the Compact of 
                        Free Association (approved by the Compact of 
                        Free Association Amendments Act of 2003 (Public 
                        Law 108-188)) after the date of enactment of 
                        the Job Training Improvement Act of 2005.
                  ``(C) States.--
                          ``(i) In general.--Of the remainder of the 
                        amount appropriated under section 137(a) for a 
                        fiscal year that is available after determining 
                        the amounts to be reserved under subparagraphs 
                        (A) and (B), the Secretary shall allot--
                                  ``(I) the amount of the remainder 
                                that is less than or equal to the total 
                                amount that was allotted to States for 
                                fiscal year 2005 under section 
                                127(b)(1)(C) of this Act (as in effect 
                                on the day before the date of enactment 
                                of the Job Training Improvement Act of 
                                2005) in accordance with the 
                                requirements of such section 
                                127(b)(1)(C); and
                                  ``(II) the amount of the remainder, 
                                if any, in excess of the amount 
                                referred to in subclause (I) in 
                                accordance with clause (ii).
                          ``(ii) Formulas for excess funds.--Subject to 
                        clauses (iii) and (iv), of the amounts 
                        described in clause (i)(II)--
                                  ``(I) 33\1/3\ percent shall be 
                                allotted on the basis of the relative 
                                number of individuals in the civilian 
                                labor force who are ages 16-19 in each 
                                State, compared to the total number of 
                                individuals in the civilian labor force 
                                who are ages 16-19 in all States;
                                  ``(II) 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; and
                                  ``(III) 33\1/3\ percent shall be 
                                allotted on the basis of the relative 
                                number of disadvantaged youth who are 
                                ages 16 through 21 in each State, 
                                compared to the total number of 
                                disadvantaged youth who are ages 16 
                                through 21 in all States.
                          ``(iii) Minimum and maximum percentages.--The 
                        Secretary shall ensure that no State shall 
                        receive an allotment for a fiscal year that is 
                        less than 90 percent or greater than 130 
                        percent of the allotment percentage of that 
                        State for the preceding fiscal year.
                          ``(iv) Small state minimum allotment.--
                        Subject to clause (iii), the Secretary shall 
                        ensure that no State shall receive an allotment 
                        under this paragraph that is less than \3/10\ 
                        of 1 percent of the amount available under 
                        subparagraph (A).
          ``(2) Definitions.--For the purposes of paragraph (1), the 
        following definitions apply:
                  ``(A) Allotment percentage.--The term `allotment 
                percentage', used with respect to fiscal year 2006 or a 
                subsequent fiscal year, means a percentage of the 
                remainder described in paragraph (1)(C)(i) that is 
                received through an allotment made under this 
                subsection for the fiscal year. The term, with respect 
                to fiscal year 2005, means the percentage of the 
                amounts allotted to States under this chapter (as in 
                effect on the day before the date of enactment of the 
                Job Training Improvement Act of 2005) that is received 
                by the State involved for fiscal year 2005.
                  ``(B) Disadvantaged youth.--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 poverty line.
          ``(3) Special rule.--For purposes of the formulas 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.''.
          (2) Reallotment.--Section 127 (29 U.S.C. 2552) is further 
        amended--
                  (A) by striking subsection (b);
                  (B) by redesignating subsection (c) as subsection 
                (b);
                  (C) in subsection (b) (as so redesignated)--
                          (i) by amending paragraph (2) to read as 
                        follows:
          ``(2) Amount.--The amount available for reallotment for a 
        program year is equal to the amount by which the unexpended 
        balance at the end of the program year prior to the program 
        year for which the determination is made exceeds 30 percent of 
        the total amount of funds available to the State under this 
        section during such prior program year (including amounts 
        allotted to the State in all prior program years that remained 
        available). For purposes of this paragraph, the expended 
        balance is the amount that is the difference between--
                  ``(A) the total amount of funds available to the 
                State under this section during the program year prior 
                to the program year for which the determination is made 
                (including amounts allotted to the State in all prior 
                program years that remained available); and
                  ``(B) the accrued expenditures during such prior 
                program year.'';
                          (ii) in paragraph (3)--
                                  (I) by striking ``for the prior 
                                program year'' and inserting ``for the 
                                program year in which the determination 
                                is made''; and
                                  (II) by striking ``such prior program 
                                year'' and inserting ``such program 
                                year'';
                          (iii) by amending paragraph (4) to read as 
                        follows:
          ``(4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State which does not have an amount 
        available for reallotment under paragraph (2) for the program 
        year for which the determination under paragraph (2) is 
        made.''; and
                          (iv) in paragraph (5), by striking 
                        ``obligation'' and inserting ``accrued 
                        expenditure''.
  (b) Within State Allocations.--
          (1) Reservation for statewide activities.--Section 128(a) is 
        amended to read as follows:
  ``(a) Reservation for Statewide Activities.--
          ``(1) In general.--The Governor of a State shall reserve not 
        more than 10 percent of the amount allotted to the State under 
        section 127(a)(1)(C) for a fiscal year for statewide 
        activities.
          ``(2) Use of funds.--Regardless of whether the amounts are 
        allotted under section 127(a)(1)(C) and reserved under 
        paragraph (1) or allotted under section 132 and reserved under 
        section 133(a), the Governor may use the reserved amounts to 
        carry out statewide youth activities under section 129(b) or 
        statewide employment and training activities under section 
        133.''.
          (2) Within state allocations.--Section 128(b) is amended to 
        read as follows:
  ``(b) Within State Allocation.--
          ``(1) In general.--Of the amounts allotted to the State under 
        section 127(a)(1)(C) and not reserved under subsection (a)(1)--
                  ``(A) 80 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (2); and
                  ``(B) 20 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (3).
          ``(2) Established formula.--
                  ``(A) In general.--Of the amounts described in 
                paragraph (1)(A), the Governor shall allocate--
                          ``(i) 33\1/3\ percent shall be allotted on 
                        the basis of the relative number of individuals 
                        in the civilian labor force who are ages 16-19 
                        in each local area, compared to the total 
                        number of individuals in the civilian labor 
                        force who are ages 16-19 in all local areas in 
                        the State;
                          ``(ii) 33\1/3\ percent shall be allotted on 
                        the basis of the relative number of unemployed 
                        individuals in each local area, compared to the 
                        total number of unemployed individuals in all 
                        local areas in the State; and
                          ``(iii) 33\1/3\ percent on the basis of the 
                        relative number of disadvantaged youth who are 
                        ages 16 through 21 in each local area, compared 
                        to the total number of disadvantaged youth who 
                        are ages 16 through 21 in all local areas in 
                        the State.
                  ``(B) Minimum and maximum percentages.--The Governor 
                shall ensure that no local area shall receive an 
                allocation for a fiscal year under this paragraph that 
                is less than 90 percent or greater than 130 percent of 
                the allocation percentage of the local area for the 
                preceding fiscal year.
                  ``(C) Definitions.--
                          ``(i) Allocation percentage.--For purposes of 
                        this paragraph, the term `allocation 
                        percentage', used with respect to fiscal year 
                        2006 or a subsequent fiscal year, means a 
                        percentage of the amount described in 
                        paragraph(1)(A) that is received through an 
                        allocation made under this paragraph for the 
                        fiscal year. The term, with respect to fiscal 
                        year 2005, means the percentage of the amounts 
                        allocated to local areas under this chapter (as 
                        in effect on the day before the date of 
                        enactment of the Job Training Improvement Act 
                        of 2005) that is received by the local area 
                        involved for fiscal year 2005.
                          ``(ii) Disadvantaged youth.--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 poverty line.
          ``(3) Youth discretionary allocation.--The Governor shall 
        allocate to local areas the amounts described in paragraph 
        (1)(B) in accordance with such demographic and economic factors 
        as the Governor, after consultation with the State board and 
        local boards, determines are appropriate.
          ``(4) Local administrative cost limit.--
                  ``(A) In general.--Of the amounts 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 boards for the administrative 
                costs of carrying out local workforce investment 
                activities under this chapter or chapter 5.
                  ``(B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may be used 
                for the administrative costs of any of the local 
                workforce investment activities described in this 
                chapter or chapter 5, regardless of whether the funds 
                were allocated under this subsection or section 
                133(b).''.
          (3) Reallocation.--Section 128(c) (29 U.S.C. 2853(c)) is 
        amended--
                  (A) in paragraph (1), by striking ``paragraph (2)(A) 
                or (3) of'';
                  (B) by amending paragraph (2) to read as follows:
          ``(2) Amount.--The amount available for reallocation for a 
        program year is equal to the amount by which the unexpended 
        balance at the end of the program year prior to the program 
        year for which the determination is made exceeds 30 percent of 
        the total amount of funds available to the local area under 
        this section during such prior program year, (including amounts 
        allotted to the local area in prior program years that remain 
        available). For purposes of this paragraph, the unexpended 
        balance is the amount that is the difference between--
                  ``(A) the total amount of funds available to the 
                local area under this section during the program year 
                prior to the program year for which the determination 
                is made (including amounts allocated to the local area 
                in all prior program years that remained available); 
                and
                  ``(B) the accrued expenditures during such prior 
                program year.'';
                  (C) by amending paragraph (3)--
                          (i) by striking ``subsection (b)(3)'' the 
                        first two places it appears and inserting 
                        ``subsection (b)'';
                          (ii) by striking ``the prior program year'' 
                        and inserting ``the program year in which the 
                        determination is made'';
                          (iii) by striking ``such prior program year'' 
                        and inserting ``such program year''; and
                          (iv) by striking the last sentence; and
                  (D) by amending paragraph (4) to read as follows:
          ``(4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not have an 
        amount available for reallocation under paragraph (2) for the 
        program year for which the determination under paragraph (2) is 
        made.''.
  (c) Youth Participant Eligibility.--Section 129(a) (29 U.S.C. 
2854(a)) is amended to read as follows:
  ``(a) Youth Participant Eligibility.--
          ``(1) In general.--The individuals participating in 
        activities carried out under this chapter by a local area 
        during any program year shall be individuals who, at the time 
        the eligibility determination is made, are--
                  ``(A) not younger than age 16 or older than age 24; 
                and
                  ``(B) one or more of the following:
                          ``(i) school dropouts;
                          ``(ii) recipients of a secondary school 
                        diploma, General Educational Development 
                        credential (GED), or other State-recognized 
                        equivalent (including recognized alternative 
                        standards for individuals with disabilities) 
                        who are deficient in basic skills and not 
                        attending any school;
                          ``(iii) court-involved youth attending an 
                        alternative school;
                          ``(iv) youth in foster care or who have been 
                        in foster care; or
                          ``(v) in school youth who are low-income 
                        individuals and one or more of the following:
                                  ``(I) Deficient in literacy skills.
                                  ``(II) Homeless, runaway, or foster 
                                children.
                                  ``(III) Pregnant or parents.
                                  ``(IV) Offenders.
                                  ``(V) Individuals who require 
                                additional assistance to complete an 
                                educational program, or to secure and 
                                hold employment.
          ``(2) Priority for school dropouts.--A priority in the 
        provision of services under this chapter shall be given to 
        individuals who are school dropouts.
          ``(3) Limitations on activities for in-school youth.--
                  ``(A) Percentage of funds.--For any program year, not 
                more than 30 percent of the funds available for 
                statewide activities under subsection (b), and not more 
                than 30 percent of funds available to local areas under 
                subsection (c), may be used to provide activities for 
                in-school youth meeting the requirements of paragraph 
                (1)(B)(v).
                  ``(B) Non-school hours required.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), activities carried out under this 
                        chapter for in-school youth meeting the 
                        requirements of paragraph (1)(B)(v) shall only 
                        be carried out in non-school hours or periods 
                        when school is not in session (such as before 
                        and after school or during recess).
                          ``(ii) Exception.--The requirements of clause 
                        (i) shall not apply to activities carried out 
                        for in-school youth meeting the requirements of 
                        paragraph (1)(B)(v) during school hours that 
                        are part of a program that has demonstrated 
                        effectiveness in high school youth attaining 
                        diplomas.''.
  (d) Statewide Youth Activities.--Section 129(b) (29 U.S.C. 2854(b)) 
is amended to read as follows:
  ``(b) Statewide Activities.--
          ``(1) In general.--Funds reserved by a Governor for a State 
        as described in sections 128(a) and 133(a)(1) may be used for 
        statewide activities including--
                  ``(A) additional assistance to local areas that have 
                high concentrations of eligible youth;
                  ``(B) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop delivery 
                system;
                  ``(C) conducting evaluations under section 136(e) of 
                activities authorized under this chapter and chapter 5 
                in coordination with evaluations carried out by the 
                Secretary under section 172, research, and 
                demonstration projects;
                  ``(D) providing incentive grants to local areas for 
                regional cooperation among local boards (including 
                local boards in 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;
                  ``(E) providing technical assistance and capacity 
                building to local areas, one-stop operators, one-stop 
                partners, and eligible providers, including the 
                development and training of staff, the development of 
                exemplary program activities, and the provision of 
                technical assistance to local areas that fail to meet 
                local performance measures;
                  ``(F) operating a fiscal and management 
                accountability system under section 136(f); and
                  ``(G) carrying out monitoring and oversight of 
                activities under this chapter and chapter 5.
          ``(2) Limitation.--Not more than 5 percent of the funds 
        allotted under section 127(b) shall be used by the State for 
        administrative activities carried out under this subsection and 
        section 133(a).
          ``(3) Prohibition.--No funds described in this subsection or 
        in section 134(a) may be used to develop or implement education 
        curricula for school systems in the State.''.
  (e) Local Elements and Requirements.--
          (1) Program design.--Section 129(c)(1) (29 U.S.C. 2854(c) 
        (1)) is amended--
                  (A) in the matter preceding subparagraph (A), by 
                striking ``paragraph (2)(A) or (3), as appropriate, 
                of'';
                  (B) in subparagraph (B), by inserting ``are directly 
                linked to one or more of the performance outcomes 
                relating to this chapter under section 136, and that'' 
                after ``for each participant that''; and
                  (C) in subparagraph (C)--
                          (i) by redesignating clauses (i) through (iv) 
                        as clauses (ii) through (v), respectively;
                          (ii) by inserting before clause (ii) (as so 
                        redesignated) the following:
                          ``(i) activities leading to the attainment of 
                        a secondary school diploma, General Educational 
                        Development credential (GED), or other State-
                        recognized equivalent (including recognized 
                        alternative standards for individuals with 
                        disabilities);'';
                          (iii) in clause (ii) (as so redesignated), by 
                        inserting ``and advanced training'' after 
                        ``opportunities'';
                          (iv) in clause (iii) (as so redesignated), by 
                        inserting ``that lead to the attainment of 
                        recognized credentials'' after ``learning''; 
                        and
                          (v) by amending clause (v) (as redesignated 
                        by this subparagraph) to read as follows:
                          ``(v) effective connections to employers in 
                        sectors of the local labor market experiencing 
                        high growth in employment opportunities.''.
          (2) Program elements.--Section 129(c)(2) (29 U.S.C. 
        2854(c)(2)) is amended--
                  (A) in subparagraph (A), by striking ``secondary 
                school, including dropout prevention strategies'' and 
                inserting ``secondary school diploma, General 
                Educational Development credential (GED), or other 
                State-recognized equivalent (including recognized 
                alternative standards for individuals with 
                disabilities), including dropout prevention 
                strategies'';
                  (B) in subparagraph (I), by striking ``and'' at the 
                end;
                  (C) in subparagraph (J), by striking the period at 
                the end and inserting a semicolon; and
                  (D) by adding at the end the following:
                  ``(K) on-the-job training opportunities; and
                  ``(L) financial literacy skills.''.
          (3) Additional requirements.--Section 129(c)(3)(A) (29 U.S.C. 
        2854(c)(3)(A)) is amended in the matter preceding clause (i) by 
        striking ``or applicant who meets the minimum income criteria 
        to be considered an eligible youth''.
          (4) Priority and exceptions.--Section 129(c) (29 U.S.C. 
        2854(c)) is further amended--
                  (A) by striking paragraphs (4) and (5);
                  (B) by redesignating paragraph (6) as paragraph (4);
                  (C) by redesignating paragraph (7) as paragraph (5), 
                and in such redesignated paragraph (5) by striking 
                ``youth councils'' and inserting ``local boards''; and
                  (D) by redesignating paragraph (8) as paragraph (6).

SEC. 112. COMPREHENSIVE PROGRAMS FOR ADULTS.

  (a) Title Amendment.--
          (1) The title heading of chapter 5 is amended to read as 
        follows:

   ``CHAPTER 5--COMPREHENSIVE EMPLOYMENT AND TRAINING ACTIVITIES FOR 
                               ADULTS''.

          (2) Clerical amendment.--The table of contents in section 
        1(b) is amended by amending the item related to the heading for 
        chapter 5 to read as follows:

   ``Chapter 5--Comprehensive Employment and Training Activities for 
                               Adults''.

  (b) General Authorization.--Section 131 (29 U.S.C. 2861) is amended--
          (1) by striking ``paragraphs (1)(B) and (2)(B) of''; and
          (2) by striking ``, and dislocated workers,''.
  (c) State Allotments.--
          (1) In general.--Section 132(a) (29 U.S.C. 2862(a)) is 
        amended to read as follows:
  ``(a) In General.--The Secretary shall--
          ``(1) reserve 10 percent of the amount appropriated under 
        section 137(b) for a fiscal year, of which--
                  ``(A) not less than 75 percent shall be used for 
                national dislocated worker grants under section 173, of 
                which up to $125,000,000 may be used to carry out 
                section 171(d);
                  ``(B) not more than 20 percent may be used for 
                demonstration projects under section 171; and
                  ``(C) not more than 5 percent may be used to provide 
                technical assistance under section 170; and
          ``(2) make allotments from 90 percent of the amount 
        appropriated under section 137(b) for a fiscal year in 
        accordance with subsection (b).''.
          (2) Allotment among states.--Section 132(b) (29 U.S.C. 
        2862(b)) is amended to read as follows:
  ``(b) Allotment Among States for Adult Employment and Training 
Activities.--
          ``(1) Reservation for outlying areas.--
                  ``(A) 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 to provide assistance to outlying areas to 
                carry out employment and training activities for adults 
                and statewide workforce investment activities.
                  ``(B) Restriction.--The Republic of Palau shall cease 
                to be eligible to receive funding under this paragraph 
                upon entering into an agreement for extension of United 
                States educational assistance under the Compact of Free 
                Association (approved by the Compact of Free 
                Association Amendments Act of 2003 (Public Law 108-
                188)) after the date of enactment of the Job Training 
                Improvement Act of 2005.
          ``(2) States.--Subject to paragraph (5), of the remainder of 
        the amount referred to under subsection (a)(2) for a fiscal 
        year that is available after determining the amount to be 
        reserved under paragraph (1), the Secretary shall allot to the 
        States for employment and training activities for adults and 
        for statewide workforce investment activities--
                  ``(A) 26 percent in accordance with paragraph (3); 
                and
                  ``(B) 74 percent in accordance with paragraph (4).
          ``(3) Base formula.--
                  ``(A) Fiscal year 2006.--
                          ``(i) In general.--Subject to clause (ii), 
                        the amount referred to in paragraph (2)(A) 
                        shall be allotted for fiscal year 2006 on the 
                        basis of allotment percentage of each State 
                        under section 6 of the Wagner-Peyser Act for 
                        fiscal year 2005.
                          ``(ii) Excess amounts.--If the amount 
                        referred to in paragraph (2)(A) for fiscal year 
                        2006 exceeds the amount that was available for 
                        allotment to the States under the Wagner-Peyser 
                        Act for fiscal year 2005, such excess amount 
                        shall be allotted on the basis of the relative 
                        number of individuals in the civilian labor 
                        force in each State, compared to the total 
                        number of individuals in the civilian labor 
                        force in all States, adjusted to ensure that no 
                        State receives less than \3/10\ of one percent 
                        of such excess amount.
                          ``(iii) Definition.--For purposes of this 
                        subparagraph, the term `allotment percentage' 
                        means the percentage of the amounts allotted to 
                        States under section 6 of the Wagner-Peyser Act 
                        that is received by the State involved for 
                        fiscal year 2005.
                  ``(B) Fiscal years 2007 and thereafter.--
                          ``(i) In general.--Subject to clause (ii), 
                        the amount referred to in paragraph(2)(A) shall 
                        be allotted for fiscal year 2007 and each 
                        fiscal year thereafter on the basis of the 
                        allotment percentage of each State under this 
                        paragraph for the preceding fiscal year.
                          ``(ii) Excess amounts.--If the amount 
                        referred to in paragraph (2)(A) for fiscal year 
                        2007 or any fiscal year thereafter exceeds the 
                        amount that was available for allotment under 
                        this paragraph for the prior fiscal year, such 
                        excess amount shall be allotted on the basis of 
                        the relative number of individuals in the 
                        civilian labor force in each State, compared to 
                        the total number of individuals in the civilian 
                        labor force in all States, adjusted to ensure 
                        that no State receives less than \3/10\ of one 
                        percent of such excess amount.
                          ``(iii) Definition.--For purposes of this 
                        subparagraph, the term `allotment percentage' 
                        means the percentage of the amounts allotted to 
                        States under this paragraph in a fiscal year 
                        that is received by the State involved for such 
                        fiscal year.
          ``(4) Consolidated formula.--
                  ``(A) In general.--Subject to subparagraphs (B) and 
                (C), of the amount referred to in paragraph (2)(B)--
                          ``(i) 60 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) 25 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) 15 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.
                  ``(B) Minimum and maximum percentages.--
                          ``(i) Minimum percentage.--The Secretary 
                        shall ensure that no State shall receive an 
                        allotment under this paragraph for a fiscal 
                        year that is less than 90 percent of the 
                        allotment percentage of the State under this 
                        paragraph for the preceding fiscal year.
                          ``(ii) Maximum percentage.--Subject to clause 
                        (i), the Secretary shall ensure that no State 
                        shall receive an allotment for a fiscal year 
                        under this paragraph that is more than 130 
                        percent of the allotment of the State under 
                        this paragraph for the preceding fiscal year.
                  ``(C) Small state minimum allotment.--Subject to 
                subparagraph (B), the Secretary shall ensure that no 
                State shall receive an allotment under this paragraph 
                that is less than \2/10\ of 1 percent of the amount 
                available under subparagraph (A).
                  ``(D) Definitions.--For the purposes of this 
                paragraph:
                          ``(i) Allotment percentage.--The term 
                        `allotment percentage', used with respect to 
                        fiscal year 2006 or a subsequent fiscal year, 
                        means a percentage of the amounts described in 
                        paragraph (2)(B) that is received through an 
                        allotment made under this paragraph for the 
                        fiscal year. The term, with respect to fiscal 
                        year 2005, means the percentage of the amounts 
                        allotted to States under this chapter (as in 
                        effect on the day before the date of enactment 
                        of the Job Training Improvement Act of 2005) 
                        and under reemployment service grants received 
                        by the State involved for fiscal year 2005.
                          ``(ii) Disadvantaged adult.--The term 
                        `disadvantaged adult' means an individual who 
                        is age 22 through 72 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 poverty line.
                          ``(iii) Excess number.--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\1/2\ 
                        percent of the civilian labor force in the 
                        State.
          ``(5) Adjustments in allotments based on differences with 
        unconsolidated formulas.--
                  ``(A) In general.--The Secretary shall ensure that 
                for any fiscal year no State has an allotment 
                difference, as defined in subparagraph (C), that is 
                less than zero. The Secretary shall adjust the amounts 
                allotted to the States under this subsection in 
                accordance with subparagraph (B) if necessary to carry 
                out this subparagraph.
                  ``(B) Adjustments in allotments.--
                          ``(i) Redistribution of excess amounts.--
                                  ``(I) In general.--If necessary to 
                                carry out subparagraph (A), the 
                                Secretary shall reduce the amounts that 
                                would be allotted under paragraphs (3) 
                                and (4) to States that have an excess 
                                allotment difference, as defined in 
                                subclause (II), by the amount of such 
                                excess, and use such amounts to 
                                increase the allotments to States that 
                                have an allotment difference less than 
                                zero.
                                  ``(II) Excess amounts.--For purposes 
                                of subclause (I), the term `excess' 
                                allotment difference means an allotment 
                                difference for a State that is--
                                          ``(aa) in excess of 3 percent 
                                        of the amount described in 
                                        subparagraph (C)(i)(II); or
                                          ``(bb) in excess of a 
                                        percentage established by the 
                                        Secretary that is greater than 
                                        3 percent of the amount 
                                        described in subparagraph 
                                        (C)(i)(II) if the Secretary 
                                        determines that such greater 
                                        percentage is sufficient to 
                                        carry out subparagraph (A).
                          ``(ii) Use of amounts available under 
                        national reserve account.--If the funds 
                        available under clause (i) are insufficient to 
                        carry out subparagraph (A), the Secretary shall 
                        use funds reserved under section 132(a) in such 
                        amounts as are necessary to increase the 
                        allotments to States to meet the requirements 
                        of subparagraph (A). Such funds shall be used 
                        in the same manner as the States use the other 
                        funds allotted under this subsection.
                  ``(C) Definition of allotment difference.--
                          ``(i) In general.--For purposes of this 
                        paragraph, the term `allotment difference' 
                        means the difference between--
                                  ``(I) the total amount a State would 
                                receive of the amounts available for 
                                allotment under subsection (b)(2) for a 
                                fiscal year pursuant to paragraphs (3) 
                                and (4); and
                                  ``(II) the total amount the State 
                                would receive of the amounts available 
                                for allotment under subsection (b)(2) 
                                for the fiscal year if such amounts 
                                were allotted pursuant to the 
                                unconsolidated formulas (applied as 
                                described in clause (iii)) that were 
                                used in allotting funds for fiscal year 
                                2005.
                          ``(ii) Unconsolidated formulas.--For purposes 
                        of clause (i), the unconsolidated formulas are:
                                  ``(I) The requirements for the 
                                allotment of funds to the States 
                                contained in section 132(b)(1)(B) of 
                                this Act (as in effect on the day 
                                before the date of enactment of the Job 
                                Training Improvement Act of 2005) that 
                                were applicable to the allotment of 
                                funds under such section for fiscal 
                                year 2005.
                                  ``(II) The requirements for the 
                                allotment of funds to the States 
                                contained in section 132(b)(2)(B) of 
                                this Act (as in effect on the day 
                                before the date of enactment of the Job 
                                Training Improvement Act of 2005) that 
                                were applicable to the allotment of 
                                funds under such section for fiscal 
                                year 2005.
                                  ``(III) The requirements for the 
                                allotment of funds to the States that 
                                were contained in section 6 of the 
                                Wagner-Peyser Act (as in effect on the 
                                day before the date of enactment of the 
                                Job Training Improvement Act of 2005) 
                                that were applicable to the allotment 
                                of funds under such Act for fiscal year 
                                2005.
                                  ``(IV) The requirements for the 
                                allotment of funds to the States that 
                                were established by the Secretary for 
                                Reemployment Services Grants that were 
                                applicable to the allotment of funds 
                                for such grants for fiscal year 2005.
                          ``(iii) Proportionate application of 
                        unconsolidated formulas based on fiscal year 
                        2005.--In calculating the amount under clause 
                        (i)(II), each of the unconsolidated formulas 
                        identified in clause (ii) shall be applied, 
                        respectively, only to the proportionate share 
                        of the total amount of funds available for 
                        allotment under subsection (b)(2) for a fiscal 
                        year that is equal to the proportionate share 
                        to which each of the unconsolidated formulas 
                        applied with respect to the total amount of 
                        funds allotted to the States under all of the 
                        unconsolidated formulas in fiscal year 2005.
                          ``(iv) Rule of construction.--The amounts 
                        used to adjust the allotments to a State under 
                        subparagraph (B) for a fiscal year shall not be 
                        included in the calculation of the amounts 
                        under clause (i) for a subsequent fiscal year, 
                        including the calculation of allocation 
                        percentages for a preceding fiscal year 
                        applicable to paragraphs (3) and (4) and to the 
                        unconsolidated formulas described in clause 
                        (ii).''.
          (3) Reallotment.--Section 132(c) (29 U.S.C. 2862(c)) is 
        amended--
                  (A) by amending paragraph (2) to read as follows:
          ``(2) Amount.--The amount available for reallotment for a 
        program year is equal to the amount by which the unexpended 
        balance at the end of the program year prior to the program 
        year for which the determination is made exceeds 30 percent of 
        the total amount of funds available to the State under this 
        section during such prior program year (including amounts 
        allotted to the State in all prior program years that remained 
        available). For purposes of this paragraph, the expended 
        balance is the amount that is the difference between--
                  ``(A) the total amount of funds available to the 
                State under this section during the program year prior 
                to the program year for which the determination is made 
                (including amounts allotted to the State in all prior 
                program years that remained available); and
                  ``(B) the accrued expenditures during such prior 
                program year.'';
                  (B) in paragraph (3)--
                          (i) by striking ``for the prior program 
                        year'' and inserting ``for the program year in 
                        which the determination is made''; and
                          (ii) by striking ``such prior program year'' 
                        and inserting ``such program year'';
                  (C) by amending paragraph (4) to read as follows:
          ``(4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State that does not have an amount 
        available for reallotment under paragraph (2) for the program 
        year for which the determination under paragraph (2) is 
        made.''; and
                  (D) in paragraph (5), by striking ``obligation'' and 
                inserting ``accrued expenditure''.
  (d) Within State Allocations.--
          (1) Reservation for state activities.--Section 133(a) (29 
        U.S.C. 2863(a)) is amended to read as follows:
  ``(a) Reservation for Statewide Activities.--The Governor of a State 
may reserve up to 50 percent of the total amount allotted to the State 
under section 132 for a fiscal year to carry out the statewide 
activities described in section 134(a).''.
          (2) Allocations to local areas.--Section 133(b) (29 U.S.C. 
        2863(b)) is amended to read as follows:
  ``(b) Allocations to Local Areas.--
          ``(1) In general.--Of the amounts allotted to the State under 
        section 132(b)(2) and not reserved under subsection (a)--
                  ``(A) 85 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (2); and
                  ``(B) 15 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (3).
          ``(2) Established formula.--
                  ``(A) In general.--Of the amounts described in 
                paragraph (1)(A), the Governor shall allocate--
                          ``(i) 60 percent on the basis of the relative 
                        number of unemployed individuals in each local 
                        area, compared to the total number of 
                        unemployed individuals in all local areas in 
                        the State;
                          ``(ii) 25 percent on the basis of the 
                        relative excess number of unemployed 
                        individuals in each local area, compared to the 
                        total excess number of unemployed individuals 
                        in all local areas in the State; and
                          ``(iii) 15 percent shall be allotted on the 
                        basis of the relative number of disadvantaged 
                        adults in each local area, compared to the 
                        total number of disadvantaged adults in all 
                        local areas in the State.
                  ``(B) Minimum and maximum percentages.--The Governor 
                shall ensure that no local area shall receive an 
                allocation for a fiscal year under this paragraph that 
                is less than 90 percent or greater than 130 percent of 
                the allocation percentage of the local area for the 
                preceding fiscal year.
                  ``(C) Definitions.--
                          ``(i) Allocation percentage.--The term 
                        `allocation percentage', used with respect to 
                        fiscal year 2006 or a subsequent fiscal year, 
                        means a percentage of the amount described in 
                        paragraph (1)(A) that is received through an 
                        allocation made under this paragraph for the 
                        fiscal year. The term, with respect to fiscal 
                        year 2005, means the percentage of the amounts 
                        allocated to local areas under this chapter (as 
                        in effect on the day before the date of 
                        enactment of the Job Training Improvement Act 
                        of 2005) that is received by the local area 
                        involved for fiscal year 2005.
                          ``(ii) Disadvantaged adult.--The term 
                        `disadvantaged adult' means an individual who 
                        is age 22 through 72 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 poverty line.
                          ``(iii) Excess number.--The term `excess 
                        number' means, used with respect to the excess 
                        number of unemployed individuals within a local 
                        area, the number that represents the number of 
                        unemployed individuals in excess of 4.5 percent 
                        of the civilian labor force in the local area.
          ``(3) Discretionary allocation.--The Governor shall allocate 
        to local areas the amounts described in paragraph (1)(B) based 
        on a formula developed in consultation with the State board and 
        local boards. Such formula shall be objective and 
        geographically equitable and may include such demographic and 
        economic factors as the Governor, after consultation with the 
        State board and local boards, determines are appropriate.
          ``(4) Local administrative cost limit.--
                  ``(A) In general.--Of the amounts allocated to a 
                local area under this subsection and section 128(b) for 
                a fiscal year, not more than 10 percent of the amount 
                may be used by the local boards for the administrative 
                costs of carrying out local workforce investment 
                activities under this chapter or chapter 4.
                  ``(B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may be used 
                for the administrative costs of any of the local 
                workforce investment activities described in this 
                chapter or chapter 4, regardless of whether the funds 
                were allocated under this subsection or section 
                128(b).''.
          (3) Reallocation among local areas.--Section 133(c) (29 
        U.S.C. 2863(c)) is amended--
                  (A) in paragraph (1), by striking ``paragraph (2)(A) 
                or (3) of'';
                  (B) by amending paragraph (2) to read as follows:
          ``(2) Amount.--The amount available for reallocation for a 
        program year is equal to the amount by which the unexpended 
        balance at the end of the program year prior to the program 
        year for which the determination is made exceeds 30 percent of 
        the total amount of funds available to the local area under 
        this section during such prior program year (including amounts 
        allotted to the local area in prior program years that remain 
        available). For purposes of this paragraph, the unexpended 
        balance is the amount that is the difference between--
                  ``(A) the total amount of funds available to the 
                local area under this section during the program year 
                prior to the program year for which the determination 
                is made (including amounts allocated to the local area 
                in all prior program years that remained available); 
                and
                  ``(B) the accrued expenditures during such prior 
                program year.'';
                  (C) by amending paragraph (3)--
                          (i) by striking ``subsection (b)(3)'' the 
                        first two places it appears and inserting 
                        ``subsection (b)'';
                          (ii) by striking ``the prior program year'' 
                        and inserting ``the program year in which the 
                        determination is made'';
                          (iii) by striking ``such prior program year'' 
                        and inserting ``such program year''; and
                          (iv) by striking the last sentence; and
                  (D) by amending paragraph (4) to read as follows:
          ``(4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not have an 
        amount available for reallocation under paragraph (2) for the 
        program year for which the determination under paragraph (2) is 
        made.''.
  (e) Use of Funds for Employment and Training Activities.--
          (1) Statewide employment and training activities.--
                  (A) In general.--Section 134(a)(1) (29 U.S.C. 
                2864(a)(1) is amended to read as follows:
          ``(1) In general.--
                  ``(A) Required use of funds.--Not less than 50 
                percent of the funds reserved by a Governor under 
                section 133(a) shall be used to support the provision 
                of core services in local areas, consistent with the 
                local plan, through one-stop delivery systems by 
                distributing funds to local areas in accordance with 
                subparagraph (B). Such funds may be used by States to 
                employ State personnel to provide such services in 
                designated local areas in consultation with local 
                boards.
                  ``(B) Method of distributing funds.--The method of 
                distributing funds under this paragraph shall be 
                developed in consultation with the State board and 
                local boards. Such method of distribution, which may 
                include the formula established under section 
                121(h)(3), shall be objective and geographically 
                equitable, and may include factors such as the number 
                of centers in the local area that have been certified, 
                the population served by such centers, and the 
                performance of such centers.
                  ``(C) Other use of funds.--Funds reserved by a 
                Governor for a State--
                          ``(i) under section 133(a) and not used under 
                        subparagraph (A), may be used for statewide 
                        activities described in paragraph (2); and
                          ``(ii) under section 133(a) and not used 
                        under subparagraph (A), and under section 
                        128(a) may be used to carry out any of the 
                        statewide employment and training activities 
                        described in paragraph (3).''.
                  (B) Statewide rapid response activities.--Section 
                134(a)(2) (29 U.S.C. 2864(a)(2)) is amended to read as 
                follows:
          ``(2) Statewide rapid response activities.--A State shall 
        carry out statewide rapid response activities using funds 
        reserved as described in section 133(a). Such activities shall 
        include--
                  ``(A) 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
                  ``(B) 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, working in 
                conjunction with the local boards and the chief elected 
                officials in the local areas.''.
                  (C) Statewide employment and training activities.--
                Section 134(a)(3) (29 U.S.C. 2864(a)(3)) is amended to 
                read as follows:
          ``(3) Statewide activities.--Funds reserved by a Governor for 
        a State as described in sections 133(a) and 128(a) may be used 
        for statewide activities including--
                  ``(A) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop delivery 
                system;
                  ``(B) conducting evaluations under section 136(e) of 
                activities authorized under this chapter and chapter 4 
                in coordination with evaluations carried out by the 
                Secretary under section 172, research, and 
                demonstration projects;
                  ``(C) providing incentive grants to local areas for 
                regional cooperation among local boards (including 
                local boards in 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;
                  ``(D) providing technical assistance and capacity 
                building to local areas, one-stop operators, one-stop 
                partners, and eligible providers, including the 
                development and training of staff, the development of 
                exemplary program activities, and the provision of 
                technical assistance to local areas that fail to meet 
                local performance measures;
                  ``(E) operating a fiscal and management 
                accountability system under section 136(f);
                  ``(F) carrying out monitoring and oversight of 
                activities carried out under this chapter and chapter 
                4;
                  ``(G) implementing innovative programs, such as 
                incumbent worker training programs, programs and 
                strategies designed to meet the needs of businesses in 
                the State, including small businesses, and engage 
                employers in workforce activities, and programs serving 
                individuals with disabilities consistent with section 
                188;
                  ``(H) developing strategies for effectively serving 
                hard-to-serve populations and for integrating programs 
                and services among one-stop partners;
                  ``(I) implementing innovative programs for displaced 
                homemakers, which for purposes of this subparagraph 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.);
                  ``(J) implementing programs to increase the number of 
                individuals training for and placed in nontraditional 
                employment; and
                  ``(K) carrying out activities to facilitate remote 
                access to services provided through a one-stop delivery 
                system, including facilitating access through the use 
                of technology.''.
                  (D) Limitation on state administrative 
                expenditures.--Section 134(a) is further amended by 
                adding the following new paragraph:
          ``(4) Limitation.--Not more than 5 percent of the funds 
        allotted under section 132(b) shall be used by the State for 
        administrative activities carried out under this subsection and 
        section 128(a).''.
          (2) Local employment and training activities.--Section 134(b) 
        (29 U.S.C. 2864(b)) is amended--
                  (A) by striking ``under paragraph (2)(A)'' and all 
                that follows through ``section 133(b)(2)(B)'' and 
                inserting ``under section 133(b)''; and
                  (B) in paragraphs (1) and (2), by striking ``or 
                dislocated workers, respectively'' .
          (3) Technical amendment.--Section 134 is further amended by 
        redesignating subsections (d) and (e) as subsections (c) and 
        (d), respectively.
          (4) Required local employment and training activities.--
                  (A) Allocated funds.--Section 134(c)(1) (29 U.S.C. 
                2864(c)(1)) (as redesignated by paragraph (3)) is 
                amended to read as follows:
          ``(1) In general.--Funds allocated to a local area for adults 
        under section 133(b) shall be used--
                  ``(A) to establish a one-stop delivery system as 
                described in section 121(e);
                  ``(B) to provide the core services described in 
                paragraph (2) through the one-stop delivery system in 
                accordance with such paragraph;
                  ``(C) to provide the intensive services described in 
                paragraph (3) to adults described in such paragraph; 
                and
                  ``(D) to provide training services described in 
                paragraph (4) to adults described in such paragraph.''.
                  (B) Core services.--Section 134(c)(2) (29 U.S.C. 
                2864(c)(2)) (as redesignated by paragraph (3)) is 
                amended--
                          (i) by striking ``who are adults or 
                        dislocated workers'';
                          (ii) in subparagraph (A), by striking ``under 
                        this subtitle'' and inserting ``under the one-
                        stop partner programs described in section 
                        121(b)'';
                          (iii) by amending subparagraph (D) to read as 
                        follows:
                  ``(D) labor exchange services, including--
                          ``(i) job search and placement assistance, 
                        and where appropriate career counseling;
                          ``(ii) appropriate recruitment services for 
                        employers; and
                          ``(iii) reemployment services provided to 
                        unemployment claimants.'';
                          (iv) in subparagraph (I), by inserting ``and 
                        the administration of the work test for the 
                        unemployment compensation system'' after 
                        ``compensation''; and
                          (v) by amending subparagraph (J) to read as 
                        follows:
                  ``(J) assistance in establishing eligibility for 
                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''.
                  (C) Intensive services.--Section 134(c)(3) (29 U.S.C. 
                2864(c)(3) (as redesignated by paragraph (3) of this 
                subsection) is amended--
                          (i) by amending subparagraph (A) to read as 
                        follows:
                  ``(A) In general.--
                          ``(i) Eligibility.--Funds allocated to a 
                        local area under section 133(b) shall be used 
                        to provide intensive services for adults who--
                                  ``(I) are unemployed and who have 
                                been determined by the one-stop 
                                operator to be--
                                          ``(aa) unlikely or unable to 
                                        obtain suitable employment 
                                        through core services; and
                                          ``(bb) in need of intensive 
                                        services in order to obtain 
                                        suitable employment; or
                                  ``(II) are employed, but who are 
                                determined by a one-stop operator to be 
                                in need of intensive services to obtain 
                                or retain suitable employment.
                          ``(ii) Definition.--The Governor shall define 
                        the term `suitable employment' for purposes of 
                        this subparagraph.''; and
                          (ii) in subparagraph (C)--
                                  (I) in clause (v), by striking ``for 
                                participants seeking training services 
                                under paragraph (4)''; and
                                  (II) by adding the following clauses 
                                after clause (vi):
                          ``(vii) Internships and work experience.
                          ``(viii) Literacy activities relating to 
                        basic work readiness, information and 
                        communication technology literacy activities, 
                        and financial literacy activities.
                          ``(ix) Out-of-area job search assistance and 
                        relocation assistance.''.
                  (D) Training services.--Section 134(c)(4) (as 
                redesignated by paragraph (3) of this subsection) is 
                amended--
                          (i) by amending subparagraph (A) to read as 
                        follows:
                  ``(A) In general.--
                          ``(i) Eligibility.--Funds allocated to a 
                        local area under section 133(b) shall be used 
                        to provide training services to adults who--
                                  ``(I) after an interview, evaluation, 
                                or assessment, and case management, 
                                have been determined by a one-stop 
                                operator or one-stop partner, as 
                                appropriate, to--
                                          ``(aa) be unlikely or unable 
                                        to obtain or retain suitable 
                                        employment through intensive 
                                        services under paragraph 
                                        (3)(A);
                                          ``(bb) be in need of training 
                                        services to obtain or retain 
                                        suitable employment; and
                                          ``(cc) have the skills and 
                                        qualifications to successfully 
                                        participate in the selected 
                                        program of training services;
                                  ``(II) 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 receiving such 
                                services are willing to commute or 
                                relocate;
                                  ``(III) who meet the requirements of 
                                subparagraph (B); and
                                  ``(IV) who are determined eligible in 
                                accordance with the priority system in 
                                effect under subparagraph (E).
                          ``(ii) Definition.--The Governor shall define 
                        the term `suitable employment' for purposes of 
                        this subparagraph.'';
                          (ii) in subparagraph (B)(i), by striking 
                        ``Except'' and inserting ``Notwithstanding 
                        section 479B of the Higher Education Act of 
                        1965 (20 U.S.C. 1087uu) and except'';
                          (iii) in subparagraph (D)--
                                  (I) by amending clause (iv) to read 
                                as follows:
                          ``(iv) entrepreneurial training, including 
                        providing information about obtaining 
                        microcredit loans for the purpose of starting a 
                        business, including contact information of 
                        microcredit lenders operating within the local 
                        area;'';
                                  (II) in clause (viii) by inserting 
                                ``(including English as a Second 
                                Language)'' after ``activities''; and
                                  (III) by redesignating clause (ix) as 
                                clause (x) and inserting after clause 
                                (viii) the following:
                          ``(ix) training that integrates occupational 
                        skills training and English language 
                        acquisition;'';
                          (iv) by amending subparagraph (E) to read as 
                        follows:
                  ``(E) Priority.--
                          ``(i) In general.--A priority shall be given 
                        to unemployed individuals for the provision of 
                        intensive and training services under this 
                        subsection.
                          ``(ii) Additional priority.--If the funds in 
                        the local area, including the funds allocated 
                        under section 133(b), for serving recipients of 
                        public assistance and other low-income 
                        individuals, including single parents, 
                        displaced homemakers, and pregnant single 
                        women, is limited, the priority for the 
                        provision of intensive and training services 
                        under this subsection shall include such 
                        recipients and individuals.
                          ``(iii) Determinations.--The Governor and the 
                        appropriate local board shall direct the one-
                        stop operators in the local area with regard to 
                        making determinations with respect to the 
                        priority of service under this subparagraph.'';
                          (v) in subparagraph (F), by adding the 
                        following clause after clause (iii):
                          ``(iv) Enhanced individual training 
                        accounts.--Each local board may, through one-
                        stop centers, assist individuals receiving 
                        individual training accounts through the 
                        establishment of such accounts that include, in 
                        addition to the funds provided under this 
                        paragraph, funds from other programs and 
                        sources that will assist the individual in 
                        obtaining training services.'';
                          (vi) in subparagraph (G)(iv), by 
                        redesignating subclause (IV) as subclause (V) 
                        and inserting after subclause (III) the 
                        following:
                                  ``(IV) Individuals with 
                                disabilities.''; and
                          (vii) by adding at the end the following:
                  ``(H) Computer technology.--In providing training 
                services under subparagraph (G), funds allocated to a 
                local area under this title may be used to purchase 
                computer technology for use by an individual who is 
                eligible pursuant to subsection (A), only if--
                          ``(i) such purchase is part of an ongoing 
                        training program; and
                          ``(ii) such purchase is necessary to ensure 
                        the individual can participate in such training 
                        program.
                Any purchase of computer technology under this 
                subparagraph shall remain the property of the one-stop 
                operator.''.
          (5) Permissible activities.--Section 134(d) (as redesignated 
        by paragraph (3)) is amended--
                  (A) by amending paragraph (1) to read as follows:
          ``(1) Discretionary one-stop delivery activities.--
                  ``(A) In general.--Funds allocated to a local area 
                under section 133(b) may be used to provide, through 
                the one-stop delivery system--
                          ``(i) customized screening and referral of 
                        qualified participants in training services to 
                        employers;
                          ``(ii) customized employment-related services 
                        to employers on a fee-for-service basis;
                          ``(iii) customer support to navigate among 
                        multiple services and activities for special 
                        participant populations that face multiple 
                        barriers to employment, including individuals 
                        with disabilities;
                          ``(iv) employment and training assistance 
                        provided in coordination with child support 
                        enforcement activities of the State agency 
                        carrying out subtitle D of title IV of the 
                        Social Security Act;
                          ``(v) activities to improve services to local 
                        employers, including small employers in the 
                        local area, and increase linkages between the 
                        local workforce investment system and 
                        employers; and
                          ``(vi) activities to facilitate remote access 
                        to services provided through a one-stop 
                        delivery system, including facilitating access 
                        through the use of technology.
                  ``(B) Work support activities for low-wage workers.--
                          ``(i) In general.--Funds allocated to a local 
                        area under 133(b) may be used to provide, 
                        through the one-stop delivery system and in 
                        collaboration with the appropriate programs and 
                        resources of the one-stop partners, work 
                        support activities designed to assist low-wage 
                        workers in retaining and enhancing employment.
                          ``(ii) Activities.--The activities described 
                        in clause (i) may include assistance in 
                        accessing financial supports for which such 
                        workers may be eligible and the provision of 
                        activities available through the one-stop 
                        delivery system in a manner that enhances the 
                        opportunities of such workers to participate, 
                        such as the provision of employment and 
                        training activities during nontraditional hours 
                        and the provision of on-site child care while 
                        such activities are being provided.''; and
                  (B) by adding after paragraph (3) the following new 
                paragraph:
          ``(4) Incumbent worker training programs.--
                  ``(A) In general.--The local board may use up to 10 
                percent of the funds allocated to a local area under 
                section 133(b) to carry out incumbent worker training 
                programs in accordance with this paragraph.
                  ``(B) Training activities.--The training programs for 
                incumbent workers under this paragraph shall be carried 
                out by the local area in conjunction with the employers 
                of such workers for the purpose of assisting such 
                workers in obtaining the skills necessary to retain 
                employment and avert layoffs.
                  ``(C) Employer match required.--
                          ``(i) In general.--Employers participating in 
                        programs under this paragraph shall be required 
                        to pay a proportion of the costs of providing 
                        the training to the incumbent workers. The 
                        Governor shall establish, or may authorize the 
                        local board to establish, the required portion 
                        of such costs, which shall not be less than--
                                  ``(I) 10 percent of the costs, for 
                                employers with 50 or fewer employees;
                                  ``(II) 25 percent of the costs, for 
                                employers with more than 50 employees 
                                but fewer than 100 employees; and
                                  ``(III) 50 percent of the costs, for 
                                employers with 100 or more employees.
                          ``(ii) Calculation of match.--The wages paid 
                        by an employer to a worker while they are 
                        attending training may be included as part of 
                        the requirement payment of the employer.''.

SEC. 113. PERFORMANCE ACCOUNTABILITY SYSTEM.

  (a) State Performance Measures.--
          (1) In general.--Section 136(b)(1) (29 U.S.C. 2871(b)(1)) is 
        amended--
                  (A) in subparagraph (A)(i), by striking ``and the 
                customer satisfaction indicator of performance 
                described in paragraph (2)(B)''; and
                  (B) in subparagraph (A)(ii), by striking ``paragraph 
                (2)(C)'' and inserting ``paragraph (2)(B)''.
          (2) Indicators of performance.--Section 136(b)(2) (29 U.S.C. 
        2871(b)(2)) is amended--
                  (A) in subparagraph (A)(i), by striking ``(except for 
                self-service and information activities) and (for 
                participants who are eligible youth age 19 through 21) 
                for youth activities authorized under section 129'';
                  (B) in subparagraph (A)(i)(II), by inserting ``and'' 
                after the semicolon;
                  (C) in subparagraph (A)(i)(III), by striking ``; 
                and'' and inserting a period;
                  (D) by striking subparagraph (A)(i)(IV);
                  (E) by amending subparagraph (A)(ii) to read as 
                follows:
                          ``(ii) Core indicators for eligible youth.--
                        The core indicators of performance for youth 
                        activities authorized under section 129 shall 
                        consist of--
                                  ``(I) entry into employment, 
                                education or advanced training, or 
                                military service;
                                  ``(II) attainment of secondary school 
                                diploma, General Educational 
                                Development credential (GED), or other 
                                State-recognized equivalent (including 
                                recognized alternative standards for 
                                individuals with disabilities); and
                                  ``(III) literacy or numeracy 
                                gains.'';
                  (F) by striking subparagraph (B); and
                  (G) by redesignating subparagraph (C) as subparagraph 
                (B), and by adding at the end of such subparagraph (as 
                so redesignated) the following new sentence: ``Such 
                indicators may include customer satisfaction of 
                employers and participants with services received from 
                the workforce investment activities authorized under 
                this subtitle.''.
          (3) Levels of performance.--Section 136(b)(3)(A) (29 U.S.C. 
        2871(b)(3)(A)) is amended--
                  (A) in clause (i), by striking ``and the customer 
                satisfaction indicator described in paragraph (2)(B)'';
                  (B) in clause (ii), by striking ``and the customer 
                satisfaction indicator of performance, for the first 
                3'' and inserting ``for the 2'';
                  (C) in clause (iii)--
                          (i) in the heading, by striking ``for first 3 
                        years''; and
                          (ii) by striking ``and the customer 
                        satisfaction indicator of performance, for the 
                        first 3'' and inserting ``for the 2'';
                  (D) in clause (iv)--
                          (i) by striking subclause (I);
                          (ii) by redesignating subclauses (II) and 
                        (III) as subclauses (I) and (II), respectively; 
                        and
                          (iii) in subclause (I) (as so redesignated)--
                                  (I) by striking ``taking into 
                                account'' and inserting ``which shall 
                                be adjusted based on'';
                                  (II) by inserting ``, such as 
                                unemployment rates and job losses or 
                                gains in particular industries'' after 
                                ``economic conditions''; and
                                  (III) by inserting ``, such as 
                                indicators of poor work history, lack 
                                of work experience, low levels of 
                                literacy or English proficiency, 
                                disability status, including the number 
                                of veterans with disabilities, and 
                                welfare dependency'' after ``program'';
                  (E) by striking clause (v); and
                  (F) by redesignating clause (vi) as clause (v).
          (4) Additional indicators.--Section 136(b)(3)(B) is amended 
        by striking ``paragraph (2)(C)'' and inserting ``paragraph 
        (2)(B)''.
  (b) Local Performance Measures.--Section 136(c) (29 U.S.C 2871(c)) is 
amended--
          (1) in paragraph (1)(A)(i), by striking ``, and the customer 
        satisfaction indicator of performance described in subsection 
        (b)(2)(B),'';
          (2) in paragraph (1)(A)(ii), by striking ``subsection 
        (b)(2)(C)'' and inserting ``subsection (b)(2)(B)''; and
          (3) by amending paragraph (3) to read as follows:
          ``(3) Determinations.--In determining such local levels of 
        performance, the local board, the chief elected official, and 
        the Governor shall ensure such levels are adjusted based on the 
        specific economic characteristics (such as unemployment rates 
        and job losses or gains in particular industries), demographic 
        characteristics, or other characteristics of the population to 
        be served in the local area, such as poor work history, lack of 
        work experience, low levels of literacy or English proficiency, 
        disability status, including the number of veterans with 
        disabilities, and welfare dependency.''.
  (c) Report.--Section 136(d) (29 U.S.C. 2871(d)) is amended--
          (1) in paragraph (1), by striking ``and the customer 
        satisfaction indicator'' in both places that it appears;
          (2) in paragraph (2)--
                  (A) in subparagraph (E), by striking ``(excluding 
                participants who received only self-service and 
                informational activities); and'' and inserting a 
                semicolon;
                  (B) in subparagraph (F), by striking the period and 
                inserting ``; and''; and
                  (C) by adding at the end the following:
                  ``(G) the number of participants served and the cost 
                per participant.''; and
          (3) by adding at the end the following:
          ``(4) Data validation.--In preparing the reports described in 
        this subsection, the States shall establish procedures, 
        consistent with guidelines issued by the Secretary, to ensure 
        the information contained in the report is valid and 
        reliable.''.
  (d) Sanctions for State.--Section 136(g) (29 U.S.C. 2871(g)) is 
amended--
          (1) in paragraph (1)(A), by striking ``or (B)''; and
          (2) in paragraph (2), by striking ``section 503'' and 
        inserting ``section 136(i)''.
  (e) Sanctions for Local Areas.--Section 136(h) (29 U.S.C. 2871(h)) is 
amended--
          (1) in paragraph (1), by striking ``or (B)''; and
          (2) by amending paragraph (2)(B) to read as follows:
                  ``(B) 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 than 30 days 
                after the receipt of the appeal.''.
  (f) Incentive Grants.--Section 136(i) (29 U.S.C. 2871(i)) is amended 
to read as follows:
  ``(i) Incentive Grants for States and Local Areas.--
          ``(1) Incentive grants for states.--
                  ``(A) In general.--From funds appropriated under 
                section 174, the Secretary may award grants to States 
                for exemplary performance in carrying programs under 
                chapters 4 and 5 of this title. Such awards may be 
                based on States meeting or exceeding the performance 
                measures established under this section, on the 
                performance of the State in serving special 
                populations, including the levels of service provided 
                and the performance outcomes, and such other factors 
                relating to the performance of the State under this 
                title as the Secretary determines is appropriate.
                  ``(B) Use of funds.--The funds awarded to a State 
                under this paragraph may be used to carry out any 
                activities authorized under chapters 4 and 5 of this 
                title, including demonstrations and innovative programs 
                for special populations.
          ``(2) Incentive grants for local areas.--
                  ``(A) In general.--From funds reserved under sections 
                128(a) and 133(a), the Governor may award incentive 
                grants to local areas for exemplary performance with 
                respect to the measures established under this section 
                and with the performance of the local area in serving 
                special populations, including the levels of service 
                and the performance outcomes.
                  ``(B) Use of funds.--The funds awarded to a local 
                area may be used to carry out activities authorized for 
                local areas under chapters 4 and 5 of this title, and 
                such demonstration or other innovative programs to 
                serve special populations as may be approved by the 
                Governor.''.
  (g) Use of Core Indicators for Other Programs.--Section 136 (29 
U.S.C. 2871) is further amended by adding at the end the following 
subsection:
  ``(j) Use of Core Indicators for Other Programs.--In addition to the 
programs carried out under chapters 4 and 5, and consistent with the 
requirements of the applicable authorizing laws, the Secretary shall 
use the core indicators of performance described in subsection 
(b)(2)(A) to assess the effectiveness of the programs described under 
section 121(b)(1)(B) that are carried out by the Secretary.''.
  (h) Repeal of Definitions.--Sections 502 and 503 (and the items 
related to such sections in the table of contents) are repealed.

SEC. 114. AUTHORIZATION OF APPROPRIATIONS.

  (a) Youth Activities.--Section 137(a) (29 U.S.C. 2872(a)) is amended 
by striking ``such sums as may be necessary for each of fiscal years 
1999 through 2003'' and inserting ``$1,250,000,000 for fiscal year 2006 
and such sums as may be necessary for each of fiscal years 2007 through 
2011''.
  (b) Adult Employment and Training Activities.--Section 137(b) (29 
U.S.C. 2872(b)) is amended by striking ``section 132(a)(1), such sums 
as may be necessary for each of fiscal years 1999 through 2003'' and 
inserting ``section 132(a), $3,140,000,000 for fiscal year 2006 and 
such sums as may be necessary for each of fiscal years 2007 through 
2011''.
  (c) Dislocated Worker Employment and Training Activities.--Section 
137 is further amended by striking subsection (c).

SEC. 115. JOB CORPS.

  (a) Industry Councils.--Section 154(b) (29 U.S.C. 2894(b)) is 
amended--
          (1) in paragraph (1)(A), by striking ``local and distant''; 
        and
          (2) by adding after paragraph (2) the following:
          ``(3) Employers outside of local areas.--The industry council 
        may include, or otherwise provide for consultation with, 
        employers from outside the local area who are likely to hire a 
        significant number of enrollees from the Job Corps center.''.
  (b) Indicators of Performance and Additional Information.--Section 
159(c) (29 U.S.C. 2893(c)) is amended--
          (1) by amending paragraph (1) to read as follows:
          ``(1) Core indicators.--The Secretary shall annually 
        establish expected levels of performance for Job Corps centers 
        and the Job Corps program relating to each of the core 
        indicators for youth identified in section 136(b)(2)(A)(ii).''; 
        and
          (2) in paragraph (2), by striking ``measures'' each place it 
        appears and inserting ``indicators''.
  (c) Authorization of Appropriations.--Section 161 (29 U.S.C. 2901) is 
amended by striking ``1999 through 2003'' and inserting ``2006 through 
2011''.

SEC. 116. NATIVE AMERICAN PROGRAMS.

  (a) Advisory Council.--Section 166(h)(4)(C) (29 U.S.C. 2911(h)(4)(C)) 
is amended to read as follows:
                  ``(C) Duties.--The Council shall advise the Secretary 
                on the operation and administration of the programs 
                assisted under this section.''.
  (b) Assistance to American Samoans in Hawaii.--Section 166 (29 U.S.C. 
2911) is further amended by striking subsection (j).

SEC. 117. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

  Section 167(d) is amended by inserting ``(including permanent 
housing)'' after ``housing''.

SEC. 118. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

  Section 168(a)(3)(C) (29 U.S.C. 2913 (a)(3)(C)) is amended by 
striking ``section 134(c)'' and inserting ``section 121(e)''.

SEC. 119. YOUTH CHALLENGE GRANTS.

  (a) In General.--Section 169 (29 U.S.C. 2914) is amended to read as 
follows:

``SEC. 169. YOUTH CHALLENGE GRANTS.

  ``(a) In General.--Of the amounts reserved by the Secretary under 
section 127(a)(1)(A) for a fiscal year--
          ``(1) the Secretary shall use not less than 80 percent to 
        award competitive grants under subsection (b); and
          ``(2) the Secretary may use not more than 20 percent to award 
        discretionary grants under subsection (c).
  ``(b) Competitive Grants to States and Local Areas.--
          ``(1) Establishment.--From the funds described in subsection 
        (a)(1), the Secretary shall award competitive grants to 
        eligible entities to carry out activities authorized under this 
        section to assist eligible youth in acquiring the skills, 
        credentials and employment experience necessary to succeed in 
        the labor market.
          ``(2) Eligible entities.--Grants under this subsection may be 
        awarded to States, local boards, recipients of grants under 
        section 166 (relating to Native American programs), and public 
        or private entities (including consortia of such entities) 
        applying in conjunction with local boards.
          ``(3) Grant period.--The Secretary may make a grant under 
        this section for a period of 1 year and may renew the grants 
        for each of the 4 succeeding years.
          ``(4) Authority to require match.--The Secretary may require 
        that grantees under this subsection provide a non-Federal share 
        of the cost of activities carried out under a grant awarded 
        under this subsection.
          ``(5) Participant eligibility.--Youth ages 14 through 19 as 
        of the time the eligibility determination is made may be 
        eligible to participate in activities provided under this 
        subsection.
          ``(6) Use of funds.--Funds under this subsection may be used 
        for activities that are designed to assist youth in acquiring 
        the skills, credentials and employment experience that are 
        necessary to succeed in the labor market, including the 
        activities identified in section 129. The activities may 
        include activities such as--
                  ``(A) training and internships for out-of-school 
                youth in sectors of the economy experiencing or 
                projected to experience high growth;
                  ``(B) after-school dropout prevention activities for 
                in-school youth;
                  ``(C) activities designed to assist special youth 
                populations, such as court-involved youth and youth 
                with disabilities; and
                  ``(D) activities combining remediation of academic 
                skills, work readiness training, and work experience, 
                and including linkages to postsecondary education, 
                apprenticeships, and career-ladder employment.
          ``(7) Applications.--To be eligible to receive a grant under 
        this subsection, an eligible entity shall submit an application 
        to the Secretary at such time, in such manner, and containing 
        such information as the Secretary may require, including--
                  ``(A) a description of the activities the eligible 
                entity will provide to eligible youth under this 
                subsection;
                  ``(B) a description of the programs of demonstrated 
                effectiveness on which the provision of the activities 
                under subparagraph (A) are based, and a description of 
                how such activities will expand the base of knowledge 
                relating to the provision of activities for youth;
                  ``(C) a description of the private and public, and 
                local and State resources that will be leveraged to 
                provide the activities described under subparagraph (A) 
                in addition to the funds provided under this 
                subsection; and
                  ``(D) the levels of performance the eligible entity 
                expects to achieve with respect to the indicators of 
                performance for youth specified in section 
                136(b)(2)(A)(ii).
          ``(8) Factors for award.--In awarding grants under this 
        subsection the Secretary may consider the quality of the 
        proposed project, the goals to be achieved, the likelihood of 
        successful implementation, the extent to which the project is 
        based on proven strategies or the extent to which the project 
        will expand the knowledge base on activities for youth, and the 
        additional State, local or private resources that will be 
        provided.
          ``(9) Evaluation.--The Secretary may reserve up to 5 percent 
        of the funds described in subsection(a)(1) to provide technical 
        assistance to, and conduct evaluations of the projects funded 
        under this subsection (using appropriate techniques as 
        described in section 172(c)).
  ``(c) Discretionary Grants for Youth Activities.--
          ``(1) In general.--From the funds described in 
        subsection(a)(2), the Secretary may award grants to eligible 
        entities to provide activities that will assist youth in 
        preparing for, and entering and retaining, employment.
          ``(2) Eligible entities.--Grants under this subsection may be 
        awarded to public or private entities that the Secretary 
        determines would effectively carry out activities relating to 
        youth under this subsection.
          ``(3) Participant eligibility.--Youth ages 14 through 19 at 
        the time the eligibility determination is made may be eligible 
        to participate in activities under this subsection.
          ``(4) Use of funds.--Funds provided under this subsection may 
        be used for activities that will assist youth in preparing for, 
        and entering and retaining, employment, including the 
        activities described in section 129 for out-of-school youth, 
        activities designed to assist in-school youth to stay in school 
        and gain work experience, and such other activities that the 
        Secretary determines are appropriate.
          ``(5) Applications.--To be eligible to receive a grant under 
        this subsection, an eligible entity shall submit an application 
        to the Secretary at such time, in such manner, and containing 
        such information as the Secretary may require.
          ``(6) Additional requirements.--The Secretary may require the 
        provision of a non-Federal share for projects funded under this 
        subsection and may require participation of grantees in 
        evaluations of such projects, including evaluations using the 
        techniques as described in section 172(c).''.
  (b) Clerical Amendment.--The table of contents in section 1(b) is 
amended by amending the item related to section 169 to read as follows:

``Sec. 169. Youth challenge grants.''.

SEC. 120. TECHNICAL ASSISTANCE.

  Section 170 (29 U.S.C. 2915) is amended--
          (1) by striking subsection (b);
          (2) by striking
  ``(a) General Technical Assistance.--'';
          (3) by redesignating paragraphs (1), (2), and (3) as 
        subsections (a), (b), and (c) respectively, and moving such 
        subsections 2 ems to the left;
          (4) in subsection (a) (as redesignated by paragraph (3))--
                  (A) by inserting ``the training of staff providing 
                rapid response services, the training of other staff of 
                recipients of funds under this title, peer review 
                activities under this title, assistance regarding 
                accounting and program operation practices (when such 
                assistance would not be duplicative to assistance 
                provided by the State), technical assistance to States 
                that do not meet State performance measures described 
                in section 136,'' after ``localities,''; and
                  (B) by striking ``from carrying out activities'' and 
                all that follows up to the period and inserting ``to 
                implement the amendments made by the Job Training 
                Improvement Act of 2005''; and
          (5) by inserting, after subsection (c) (as redesignated by 
        paragraph (3)), the following:
  ``(d) Best Practices Coordination.--The Secretary shall establish a 
system whereby States may share information regarding best practices 
with regard to the operation of workforce investment activities under 
this Act.''.

SEC. 121. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH AND MULTI-STATE 
                    PROJECTS.

  (a) Demonstration and Pilot Projects.--Section 171(b) (29 U.S.C. 
2916(b)) is amended--
          (1) in paragraph (1)--
                  (A) by striking ``Under a'' and inserting 
                ``Consistent with the priorities specified in the'';
                  (B) by amending subparagraphs (A) through (D) to read 
                as follows:
                  ``(A) projects that assist national employers in 
                connecting with the workforce investment system 
                established under this title in order to facilitate the 
                recruitment and employment of needed workers and to 
                provide information to such system on skills and 
                occupations in demand;
                  ``(B) projects that promote the development of 
                systems that will improve the effectiveness and 
                efficiency of programs carried out under this title;
                  ``(C) projects that focus on opportunities for 
                employment in industries and sectors of industries that 
                are experiencing or are likely to experience high rates 
                of growth, including those relating to information 
                technology;
                  ``(D) projects carried out by States and local areas 
                to test innovative approaches to delivering employment-
                related services;'';
                  (C) by striking subparagraph (E);
                  (D) by redesignating subparagraphs (F) and (G) as 
                subparagraphs (E) and (F), respectively;
                  (E) in subparagraph (F) (as so redesignated, by 
                striking ``; and'' and inserting a semicolon;
                  (F) by inserting after subparagraph (F) (as so 
                redesignated) the following:
                  ``(G) projects that provide retention grants to 
                qualified job training programs upon placement or 
                retention of a low-income individual trained by that 
                program in employment with a single employer for a 
                period of 1 year, provided that such employment is 
                providing to the low-income individual an income not 
                less than twice the poverty line for that 
                individual;'';
                  (G) by amending subparagraph (H) to read as follows:
                  ``(H) projects that focus on opportunities for 
                employment in industries and sectors of industries that 
                are being transformed by technology and innovation 
                requiring new knowledge or skill sets for workers, 
                including advanced manufacturing; and''; and
                  (H) by adding at the end the following:
                  ``(I) projects carried out by States and local areas 
                to assist adults or out of school youth in starting a 
                small business, including training and assistance in 
                business or financial management or in developing other 
                skills necessary to operate a business.''; and
          (2) in paragraph (2)--
                  (A) by striking subparagraph (B); and
                  (B) by redesignating subparagraph (C) as subparagraph 
                (B).
  (b) Multiservice Projects.--Section 171(c)(2)(B) (29 U.S.C. 
2916(c)(2)(B)) is amended to read as follows:
                  ``(B) Net impact studies and reports.--The Secretary 
                shall conduct studies to determine the net impacts of 
                programs, services, and activities carried out under 
                this title. The Secretary shall prepare and disseminate 
                to Congress and the public reports containing the 
                results of such studies.''.

SEC. 122. COMMUNITY-BASED JOB TRAINING.

  Section 171(d) of the Workforce Investment Act of 1998 is amended to 
read as follows:
  ``(d) Community-Based Job Training.--
          ``(1) Demonstration project.--In addition to the 
        demonstration projects under subsection (b), the Secretary may 
        establish and implement a national demonstration project 
        designed to develop local solutions to the workforce challenges 
        facing high-growth, high-skill industries with labor shortages, 
        and increase opportunities for workers to gain access to 
        employment in high-growth, high-demand occupations by promoting 
        the establishment of partnerships among education entities, the 
        workforce investment system, and businesses in high-growth, 
        high-skill industries.
          ``(2) Grants.--In carrying out the demonstration project 
        under this subsection, the Secretary shall award competitive 
        grants, in accordance with generally applicable Federal 
        requirements, to eligible entities to carry out activities 
        authorized under this subsection.
          ``(3) Definitions.--
                  ``(A) Eligible entity.--In this subsection, the term 
                `eligible entity' means a community college or 
                consortium of community colleges that shall work in 
                conjunction with--
                          ``(i) the local workforce investment system; 
                        and
                          ``(ii) business or businesses in a qualified 
                        industry or an industry association in a 
                        qualified industry.
                  ``(B) Qualified industry.--In this subsection, the 
                term `qualified industry' means an industry or economic 
                sector that is projected to experience significant 
                growth, such as an industry and economic sector that--
                          ``(i) is projected to add substantial numbers 
                        of new jobs to the economy;
                          ``(ii) has significant impact on the economy;
                          ``(iii) impacts the growth of other 
                        industries and economic sectors;
                          ``(iv) is being transformed by technology and 
                        innovation requiring new knowledge or skill 
                        sets for workers;
                          ``(v) is a new or emerging industry or 
                        economic sector that is projected to grow; or
                          ``(vi) has high-skilled occupations and 
                        significant labor shortages in the local area.
                  ``(C) Community college.--As used in this subsection, 
                the term `community college' means an institution of 
                higher education, as defined in section 101 of the 
                Higher Education Act of 1965 (20 U.S.C. 1001), that 
                provides not less than a 2-year program that is 
                acceptable for full credit toward a bachelor's degree, 
                or is a tribally controlled college or university.
          ``(4) Authority to require non-federal share.--The Secretary 
        may require that recipients of grants under this subsection 
        provide a non-Federal share, from either cash or noncash 
        resources, of the costs of activities carried out under a grant 
        awarded under this subsection.
          ``(5) Use of funds.--Grants awarded under this subsection may 
        be used for--
                  ``(A) the development, by a community college, in 
                consultation with representatives of qualified 
                industries, of rigorous training and education programs 
                related to employment in a qualified industry 
                identified in the eligible entity's application;
                  ``(B) training of adults and dislocated workers in 
                the skills and competencies needed to obtain or upgrade 
                employment in a qualified industry identified in the 
                eligible entity's application;
                  ``(C) disseminating to adults and dislocated workers, 
                through the one-stop delivery system, information on 
                high-growth, high-demand occupations in qualified 
                industries;
                  ``(D) placing, through the one-stop delivery system, 
                trained individuals into employment in qualified 
                industries; and
                  ``(E) increasing the integration of community 
                colleges with activities of businesses and the one-stop 
                delivery system to meet the training needs for 
                qualified industries.
          ``(6) Applications.--To be eligible to receive a grant under 
        this subsection, an eligible entity shall submit an application 
        to the Secretary at such time, in such manner, and containing 
        such information as the Secretary may require, including--
                  ``(A) a description of the community college that 
                will offer training under the grant;
                  ``(B) an economic analysis of the local labor market 
                to identify high-growth, high-demand industries and 
                identify the workforce issues faced by those 
                industries;
                  ``(C) a description of the qualified industry for 
                which training will occur and the availability of 
                competencies on which training will be based;
                  ``(D) an assurance that the application was developed 
                in consultation with the local board or boards in the 
                area or areas where the proposed grant will be used;
                  ``(E) performance outcomes for the grant, including 
                expected number of individuals to be trained in a 
                qualified industry, the employment and retention rates 
                for such individuals in a qualified industry, and 
                earnings increases for such individuals;
                  ``(F) a description of how the activities funded by 
                the proposed grant will be coordinated with activities 
                provided through the one-stop delivery system in the 
                local area or areas; and
                  ``(G) a description of any local or private resources 
                that will support the activities carried out under this 
                subsection and allow the entity to carry out and expand 
                such activities after the expiration of the grant.
          ``(7) Factors for award of grant.--
                  ``(A) In general.--In awarding grants under this 
                subsection the Secretary shall consider--
                          ``(i) the extent of public and private 
                        collaboration, including existing partnerships 
                        among industries, community colleges, and the 
                        public workforce investment system;
                          ``(ii) the extent to which the grant will 
                        provide job seekers with employment 
                        opportunities in high-growth, high-demand 
                        occupations;
                          ``(iii) the extent to which the grant will 
                        expand the local one-stop delivery system's 
                        capacity to be demand-driven and responsive to 
                        local economic needs;
                          ``(iv) the extent to which local businesses 
                        commit to hire or retain individuals who 
                        receive training through the grant; and
                          ``(v) the extent to which the eligible entity 
                        commits to make any newly developed products, 
                        such as competencies or training curriculum, 
                        available for distribution nationally.
                  ``(B) Leveraging of resources.--In awarding grants 
                under this subsection, the Secretary shall also 
                consider--
                          ``(i) the extent to which local or private 
                        resources, in addition to the funds provided 
                        under this subsection, will be made available 
                        to support the activities carried out under 
                        this subsection; and
                          ``(ii) the ability of an eligible entity to 
                        continue to carry out and expand such 
                        activities after the expiration of the grant.
                  ``(C) Distribution of grants.--In awarding grants 
                under this subsection the Secretary shall ensure an 
                equitable distribution of such grants across 
                geographically diverse areas.
          ``(8) Performance accountability and evaluation.--
                  ``(A) Performance accountability.--The Secretary 
                shall require an eligible entity that receives a grant 
                under this subsection to report to the Secretary on the 
                employment outcomes obtained by individuals receiving 
                training under this subsection using the indicators of 
                performance identified in the eligible entity's grant 
                application.
                  ``(B) Evaluation.--The Secretary may require that an 
                eligible entity that receives a grant under this 
                subsection participate in an evaluation of activities 
                carried out under this subsection, including an 
                evaluation using the techniques described in section 
                172(c).''.

SEC. 123. PERSONAL REEMPLOYMENT ACCOUNTS.

  Section 171 of the Workforce Investment Act of 1998 is further 
amended by adding at the end the following:
  ``(e) Personal Reemployment Accounts.--
          ``(1) Definition.--In this subsection, the term `State' means 
        each of the several States of the United States, the District 
        of Columbia, the Commonwealth of Puerto Rico, and the United 
        States Virgin Islands.
          ``(2) Demonstration project.--In addition to the 
        demonstration projects under subsection (b), the Secretary may 
        establish and implement a national demonstration project 
        designed to analyze and provide data on workforce training 
        programs that accelerate the reemployment of unemployed 
        individuals, promote the retention in employment of such 
        individuals, and provide such individuals with enhanced 
        flexibility, choice, and control in obtaining intensive 
        reemployment, training, and supportive services.
          ``(3) Grants.--
                  ``(A) In general.--In carrying out the demonstration 
                project, the Secretary shall make grants, on a 
                competitive basis, to eligible entities to provide 
                personal reemployment accounts to eligible individuals. 
                In awarding grants under this subsection the Secretary 
                shall take into consideration awarding grants to 
                eligible entities from diverse geographic areas, 
                including rural areas.
                  ``(B) Duration.--The Secretary shall make the grants 
                for periods of not less than 2 years and may renew the 
                grant for each of the succeeding 3 years.
          ``(4) Eligible entity.--In this subsection, the term 
        `eligible entity' means--
                  ``(A) a State; or
                  ``(B) a local board or consortium of local boards.
          ``(5) Use of funds.--
                  ``(A) In general.--An eligible entity that receives a 
                grant under this subsection shall use the grant funds 
                to provide, through a local area or areas, eligible 
                individuals with personal reemployment accounts. An 
                eligible individual may receive only 1 personal 
                reemployment account.
                  ``(B) Geographic area and amount.--
                          ``(i) In general.--The eligible entity shall 
                        establish the amount of a personal reemployment 
                        account for each eligible individual 
                        participating, which shall be uniform 
                        throughout the area represented by the eligible 
                        entity, and shall not exceed $3,000.
                          ``(ii) Option for states.--If the eligible 
                        entity is a State, the eligible entity may 
                        choose to use the grant statewide, if 
                        practicable, or only in specified local areas 
                        within a State.
                  ``(C) Eligible individuals.--
                          ``(i) In general.--Each eligible entity shall 
                        establish eligibility criteria for individuals 
                        for personal reemployment accounts in 
                        accordance with this subparagraph.
                          ``(ii) Eligibility criteria requirements.--
                                  ``(I) In general.--Subject to 
                                subclause (II), an individual shall be 
                                eligible to receive a personal 
                                reemployment account under a grant 
                                awarded under this subsection if, 
                                beginning after the date of enactment 
                                of this subsection, the individual--
                                          ``(aa) is identified by the 
                                        State pursuant to section 
                                        303(j)(1) of the Social 
                                        Security Act (42 U.S.C. 
                                        503(j)(1)) as likely to exhaust 
                                        regular unemployment 
                                        compensation and in need of job 
                                        search assistance to make a 
                                        successful transition to new 
                                        employment, or the individual's 
                                        unemployment can be attributed 
                                        in substantial part to unfair 
                                        competition from Federal Prison 
                                        Industries, Incorporated;
                                          ``(bb) is receiving regular 
                                        unemployment compensation under 
                                        any Federal or State 
                                        unemployment compensation 
                                        program administered by the 
                                        State; and
                                          ``(cc) is eligible for not 
                                        less than 20 weeks of regular 
                                        unemployment compensation 
                                        described in item (bb).
                                  ``(II) Additional eligibility and 
                                priority criteria.--An eligible entity 
                                may establish criteria that are in 
                                addition to the criteria described in 
                                subclause (I) for the eligibility of 
                                individuals to receive a personal 
                                reemployment account under this 
                                subsection. An eligible entity may also 
                                establish criteria for priority in the 
                                provision of a personal reemployment 
                                account to such eligible individuals 
                                under a grant awarded under this 
                                subsection.
                          ``(iii) Transition rule.--
                                  ``(I) Previously identified as likely 
                                to exhaust unemployment compensation.--
                                          ``(aa) In general.--At the 
                                        option of the eligible entity, 
                                        and subject to item (bb), an 
                                        individual may be eligible to 
                                        receive a personal reemployment 
                                        account under this subsection 
                                        if the individual--
                                                  ``(AA) during the 13-
                                                week period ending the 
                                                week prior to the date 
                                                of the enactment of the 
                                                subsection, was 
                                                identified by the State 
                                                pursuant to section 
                                                303(j)(1) of the Social 
                                                Security Act (42 U.S.C. 
                                                503(j)(1)) as likely to 
                                                exhaust regular 
                                                unemployment 
                                                compensation and in 
                                                need of job search 
                                                assistance to make a 
                                                successful transition 
                                                to new employment; and
                                                  ``(BB) otherwise 
                                                meets the requirements 
                                                of clause (ii)(I)(bb) 
                                                and (cc).
                                          ``(bb) Additional eligibility 
                                        and priority criteria.--An 
                                        eligible entity may establish 
                                        criteria that is in addition to 
                                        the criteria described in item 
                                        (aa) for the eligibility of 
                                        individuals to receive a 
                                        personal reemployment account 
                                        under this subsection. An 
                                        eligible entity may also 
                                        establish criteria for priority 
                                        in the provision of such 
                                        accounts to such eligible 
                                        individuals under this 
                                        subsection.
                                  ``(II) Previously exhausted 
                                unemployment compensation.--At the 
                                option of the eligible entity, an 
                                individual may be eligible to receive a 
                                personal reemployment account under a 
                                grant awarded under this subsection if 
                                the individual--
                                          ``(aa) during the 26-week 
                                        period ending the week prior to 
                                        the date of the enactment of 
                                        this subsection, exhausted all 
                                        rights to any unemployment 
                                        compensation; and
                                          ``(bb)(AA) is enrolled in 
                                        training and needs additional 
                                        support to complete such 
                                        training, with a priority of 
                                        service to be provided to such 
                                        individuals who are training 
                                        for shortage occupations or 
                                        high-growth industries; or
                                          ``(BB) is separated from 
                                        employment in an industry or 
                                        occupation that has experienced 
                                        declining employment, or no 
                                        longer provides any employment, 
                                        in the local labor market 
                                        during the 2-year period ending 
                                        on the date of the 
                                        determination of eligibility of 
                                        the individual under this 
                                        subparagraph.
                          ``(iv) No individual entitlement.--Nothing in 
                        this subsection shall be construed to entitle 
                        any individual to receive a personal 
                        reemployment account.
                  ``(D) Limitations.--
                          ``(i) Information and attestation.--Prior to 
                        the establishment of a personal reemployment 
                        account for an eligible individual, the 
                        eligible entity receiving a grant, through the 
                        one-stop delivery system in the participating 
                        local area or areas, shall ensure that the 
                        individual--
                                  ``(I) is informed of the requirements 
                                applicable to the personal reemployment 
                                account, including the allowable uses 
                                of funds from the account, the 
                                limitations on access to services 
                                described in paragraph (7)(A)(iii) and 
                                a description of such services, and the 
                                conditions for receiving a reemployment 
                                bonus;
                                  ``(II) has the option to develop a 
                                personal reemployment plan which will 
                                identify the employment goals and 
                                appropriate combination of services 
                                selected by the individual to achieve 
                                the employment goals; and
                                  ``(III) signs an attestation that the 
                                individual has been given the option to 
                                develop a personal reemployment plan in 
                                accordance with subclause (II), will 
                                comply with the requirements under this 
                                subsection relating to the personal 
                                reemployment accounts, and will 
                                reimburse the account or, if the 
                                account has been terminated, the grant 
                                awarded under this subsection, for any 
                                amounts expended from the account that 
                                are not allowable.
                          ``(ii) Periodic interviews.--If a recipient 
                        exhausts his or her rights to any unemployment 
                        compensation, and the recipient has a remaining 
                        balance in his or her personal reemployment 
                        account, the one-stop delivery system shall 
                        conduct periodic interviews with the recipient 
                        to assist the recipient in meeting his or her 
                        individual employment goals.
                          ``(iii) Use of personal reemployment 
                        accounts.--The eligible entity receiving a 
                        grant shall ensure that eligible individuals 
                        receiving a personal reemployment account use 
                        the account in accordance with paragraph (7).
          ``(6) Application for grants.--To be eligible to receive a 
        grant under this subsection, an eligible entity shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may require, 
        including--
                  ``(A) if the eligible entity is a State--
                          ``(i) assurance that the application was 
                        developed in conjunction with the local board 
                        or boards and chief elected officials where the 
                        personal reemployment accounts shall be made 
                        available; and
                          ``(ii) a description of the methods and 
                        procedures for providing funds to local areas 
                        where the personal reemployment accounts shall 
                        be made available;
                  ``(B) a description of the criteria and methods to be 
                used for determining eligibility for the personal 
                reemployment account, including whether the eligible 
                entity intends to include the optional categories 
                described in paragraph (5)(C)(iii), and the additional 
                criteria and priority for service that the eligible 
                entity intends to apply, if any, pursuant to paragraph 
                (5)(C)(ii)(II);
                  ``(C) a description of the methods or procedures to 
                be used to provide eligible individuals information 
                relating to services and providers;
                  ``(D) a description of safeguards to ensure that 
                funds from the personal reemployment accounts are used 
                for purposes authorized under this subsection and to 
                ensure the quality and integrity of services and 
                providers, consistent with the purpose of providing 
                eligible individuals with enhanced flexibility, choice, 
                and control in obtaining intensive reemployment, 
                training, and supportive services;
                  ``(E) a description of how the eligible entity will 
                coordinate the activities carried out under this 
                subsection with the employment and training activities 
                carried out under section 134 and other activities 
                carried out by local boards through the one-stop 
                delivery system in the State or local area; and
                  ``(F) an assurance that the eligible entity will 
                comply with any evaluation and reporting requirements 
                the Secretary may require.
          ``(7) Use of personal reemployment accounts.--
                  ``(A) Allowable activities.--
                          ``(i) In general.--Subject to the 
                        requirements contained in clauses (ii) and 
                        (iii), a recipient of a personal reemployment 
                        account may use amounts in a personal 
                        reemployment account to purchase 1 or more of 
                        the following:
                                  ``(I) Intensive services, including 
                                those type of services specified in 
                                section 134(d)(3)(C).
                                  ``(II) Training services, including 
                                those types of services specified in 
                                section 134(d)(4)(D).
                                  ``(III) Supportive services, except 
                                for needs related payments.
                          ``(ii) Delivery of services.--The following 
                        requirements relating to delivery of services 
                        shall apply to the grants under this 
                        subsection:
                                  ``(I) Recipients may use funds from 
                                the personal reemployment account to 
                                purchase the services described in 
                                clause (i) through the one-stop 
                                delivery system on a fee-for-service 
                                basis, or through other providers, 
                                consistent with the safeguards 
                                described in paragraph (6)(D).
                                  ``(II) The eligible entity, through 
                                the one-stop delivery system in the 
                                participating local area, may pay costs 
                                for such services directly on behalf of 
                                the recipient, through a voucher 
                                system, or by reimbursement to the 
                                recipient upon receipt of appropriate 
                                cost documentation.
                                  ``(III) Each eligible entity, through 
                                the one-stop delivery system in the 
                                participating local area, shall make 
                                available to recipients information on 
                                training providers specified in section 
                                134(d)(4)(F)(ii), information available 
                                to the one-stop delivery system on 
                                providers of the intensive and 
                                supportive services described in clause 
                                (i), and information relating to 
                                occupations in demand in the local 
                                area.
                          ``(iii) Limitations.--The following 
                        limitations shall apply with respect to 
                        personal reemployment accounts under this 
                        subsection:
                                  ``(I) Amounts in a personal 
                                reemployment account may be used for up 
                                to 1 year from the date of the 
                                establishment of the account.
                                  ``(II) Each recipient shall submit 
                                cost documentation as required by the 
                                one-stop delivery system.
                                  ``(III) For the 1-year period 
                                following the establishment of the 
                                account, recipients may not receive 
                                intensive, supportive, or training 
                                services funded under this title except 
                                on a fee-for-services basis as 
                                specified in clause (ii)(I).
                                  ``(IV) Amounts in a personal 
                                reemployment account shall be 
                                nontransferable.
                  ``(B) Reemployment bonus.--
                          ``(i) In general.--Subject to clause (ii)--
                                  ``(I) if a recipient determined 
                                eligible under paragraph (5)(C)(ii) 
                                obtains full-time employment before the 
                                13th week of unemployment for which 
                                unemployment compensation is paid, the 
                                balance of his or her personal 
                                reemployment account shall be provided 
                                directly to the recipient in cash; and
                                  ``(II) if a recipient determined 
                                eligible under paragraph (5)(C)(iii) 
                                obtains full-time employment before the 
                                end of the 13th week after the date on 
                                which the account is established, the 
                                balance of his or her personal 
                                reemployment account shall be provided 
                                directly to the recipient in cash.
                          ``(ii) Limitations.--The following 
                        limitations shall apply with respect to a 
                        recipient described in clause (i):
                                  ``(I) 60 percent of the remaining 
                                personal reemployment account balance 
                                shall be paid to the recipient at the 
                                time of employment.
                                  ``(II) 40 percent of the remaining 
                                personal reemployment account shall be 
                                paid to the recipient after 26 weeks of 
                                employment retention.
                          ``(iii) Exception regarding subsequent 
                        employment.--If a recipient described in clause 
                        (i) subsequently becomes unemployed due to a 
                        lack of work after receiving the portion of the 
                        reemployment bonus specified under clause 
                        (ii)(I), the individual may use the amount 
                        remaining in the personal reemployment account 
                        for the purposes described in subparagraph (A) 
                        but may not be eligible for additional cash 
                        payments under this subparagraph.
          ``(8) Program information and evaluation.--
                  ``(A) Information.--The Secretary may require from 
                eligible entities the collection and reporting on such 
                financial, performance, and other program-related 
                information as the Secretary determines is appropriate 
                to carry out this subsection, including the evaluation 
                described in subparagraph (B).
                  ``(B) Evaluation.--
                          ``(i) In general.--The Secretary, pursuant to 
                        the authority provided under section 172, 
                        shall, directly or through grants, contracts, 
                        or cooperative agreement with appropriate 
                        entities, conduct an evaluation of the 
                        activities carried out under any grants awarded 
                        under this subsection.
                          ``(ii) Report.--The report to Congress under 
                        section 172(e) relating to the results of the 
                        evaluations required under section 172 shall 
                        include the recommendation of the Secretary 
                        with respect to the use of personal 
                        reemployment account as a mechanism to assist 
                        individuals in obtaining and retaining 
                        employment.''.

SEC. 124. TRAINING FOR REALTIME WRITERS.

  Section 171 of the Workforce Investment Act of 1998 is further 
amended by adding at the end the following:
  ``(f) Training for Realtime Writers.--
          ``(1) In general.--The Secretary may make competitive grants 
        to eligible entities under paragraph (2)(A) to promote training 
        and placement of individuals as realtime writers in order to 
        meet the requirements for closed captioning of video 
        programming set forth in section 723 of the Communications Act 
        of 1934 (47 U.S.C. 613) and the rules prescribed thereunder.
          ``(2) Limitations.--
                  ``(A) Eligible entities.--For purposes of this 
                subsection, an eligible entity is a court reporting or 
                realtime writing training program that--
                          ``(i) can document and demonstrate to the 
                        Secretary that it meets appropriate standards 
                        of educational and financial accountability, 
                        with a curriculum capable of training realtime 
                        writers, qualified to provide captioning 
                        services and includes arrangements to assist in 
                        the placement of such individuals in employment 
                        as realtime writers; and
                          ``(ii) is and entity that--
                                  ``(I) is an eligible provider of 
                                training services under section 122; or
                                  ``(II) is accredited by an 
                                accrediting agency recognized by the 
                                Department of Education; and 
                                participates in student aid programs 
                                under title IV of the Higher Education 
                                Act of 1965 (20 U.S.C. 1070 et seq.).
                  ``(B) Priority in grants.--In determining whether to 
                award grants under this section, the Secretary shall 
                give priority to eligible entities that--
                          ``(i) demonstrate the greatest ability to 
                        increase their capacity to train realtime 
                        writers;
                          ``(ii) demonstrate the most promising 
                        collaboration with local workforce investment 
                        boards, local educational institutions, 
                        businesses, labor organizations, or other 
                        community-based organization having the 
                        potential to train or provide job placement 
                        assistance to realtime writers; and
                          ``(iii) propose the most promising and 
                        innovative approaches for initiating or 
                        expanding training or job placement assistance 
                        efforts for realtime writers.
                  ``(C) Duration of grant.--A grant under this 
                subsection shall be for a period of 2 years.
                  ``(D) Maximum amount of grant.--The amount of a grant 
                provided under paragraph (1) to an entity eligible may 
                not exceed $1,500,000.
          ``(3) Application.--To receive a grant under paragraph (1), 
        an eligible entity shall submit an application to the Secretary 
        at such time and in such manner as the Secretary may require. 
        The application shall include--
                  ``(A) a description of the training and assistance to 
                be funded using the grant amount, including how such 
                training and assistance will increase the number of 
                realtime writers;
                  ``(B) a description of performance measures to be 
                utilized to evaluate the progress of individuals 
                receiving such training and assistance in matters 
                relating to enrollment, completion of training, and job 
                placement and retention;
                  ``(C) a description of the manner in which the 
                eligible entity intends to continue providing the 
                training and assistance to be funded by the grant after 
                the end of the grant period, including any partnerships 
                or arrangements established for that purpose;
                  ``(D) a description of how the eligible entity will 
                work with local workforce investment boards to ensure 
                that training and assistance to be funded with the 
                grant will further local workforce goals, including the 
                creation of educational opportunities for individuals 
                who are from economically disadvantaged backgrounds or 
                are dislocated workers; and
                  ``(E) such other information as the Secretary may 
                require.
          ``(4) Use of funds.--
                  ``(A) In general.--An eligible entity receiving a 
                grant under paragraph (1) shall use the grant amount 
                for purposes relating to the recruitment, training, 
                assistance, and job placement of individuals (including 
                individuals who have completed a court reporting 
                training program) as realtime writers, including--
                          ``(i) recruitment activities;
                          ``(ii) the provision of training grants to 
                        individuals for training in realtime writing;
                          ``(iii) distance learning;
                          ``(iv) design and development of curriculum 
                        to more effectively train realtime writing 
                        skills and education in the knowledge bases 
                        necessary for the delivery of high quality 
                        closed captioning services;
                          ``(v) assistance in job placement for 
                        upcoming and recent graduates with all types of 
                        captioning employers; and
                          ``(vi) encouragement of individuals with 
                        disabilities to pursue a career in realtime 
                        writing.
                  ``(B) Administrative costs.--The recipient of a grant 
                under paragraph (1) may not use more than 5 percent of 
                the grant amount to pay administrative costs associated 
                with activities funded by the grant.
          ``(5) Reports.--Each eligible entity receiving a grant under 
        paragraph (1) shall submit to the Secretary, at the end of each 
        year of the grant period, a report which shall include--
                  ``(A) a description of the use of grant amounts by 
                the entity during such year;
                  ``(B) an assessment, utilizing the performance 
                measures submitted by the entity in the application for 
                the grant under paragraph (2)(D), of the effectiveness 
                of activities carried out using such funds in 
                increasing the number of realtime writers; and
                  ``(C) a description of the best practices identified 
                by the entity as a result of the grant for increasing 
                the number of individuals who are trained, employed, 
                and retained in employment as realtime writers.''.

SEC. 125. BUSINESS PARTNERSHIP GRANTS.

  Section 171 (29 U.S.C. 2916) is further amended by adding at the end 
the following:
  ``(g) Business Partnership Grants.--
          ``(1) Demonstration project.--In addition to the 
        demonstration projects under subsection (b), (d), and (e), the 
        Secretary may make up to 10 competitive grants per year to 
        eligible entities to expand local sector-focused training and 
        workforce development in high growth, high wage industry 
        sectors in one or more regions of particular States.
          ``(2) Eligible entities.--For purposes of this subsection an 
        eligible entity is a business or business partnership, 
        including associations of single or related industry employers 
        and employee representatives, consortia of such employers, 
        employee representatives, and workforce development community-
        based organizations, and higher education institutions.
          ``(3) Use of funds.--Grants awarded under this subsection may 
        be used to--
                  ``(A) provide workforce-directed business services to 
                help employers in targeted industries better retain, 
                support and advance their skilled workers;
                  ``(B) provide capacity building through regional 
                skill alliances, workforce intermediaries, and other 
                collaborative entities to link businesses to public 
                workforce systems and service providers targeted for 
                their industry;
                  ``(C) conduct analyses of skills that are needed in 
                the workforce in such industries currently and in the 
                future to project new market opportunities in 
                particular industries;
                  ``(D) develop rigorous training and education 
                programs related to employment in high-growth, high-
                wage industries;
                  ``(E) develop skill standards and industry-certified 
                curricula used in preparing workers for employment in 
                such industries;
                  ``(F) train adults and dislocated workers in the 
                skills and competencies needed to obtain or upgrade 
                employment;
                  ``(G) disseminate information on high-growth, high-
                wage occupations;
                  ``(H) place trained individuals into employment in 
                high-growth, high-wage industries;
                  ``(I) increase integration between training 
                providers, businesses, and the one-stop delivery system 
                to meet the training needs of particular industries.
          ``(4) Reports.--The Secretary shall track and annually report 
        to the chairmen and ranking minority members of the Committee 
        on Education and the Workforce of the House of Representatives 
        and the Committee on Health, Education, Labor and Pensions of 
        the Senate, on the industries receiving grants under this 
        subsection, the performance results of each such grant, and the 
        percentage and amount of grants awarded to eligible entities 
        for programs serving each of the following populations: 
        incumbent workers, dislocated workers, adults, and youth.''.

SEC. 126. NATIONAL DISLOCATED WORKER GRANTS.

  (a) In General.--Section 173 (29 U.S.C. 2916) is amended--
          (1) by amending the designation and heading to read as 
        follows:

``SEC. 173. NATIONAL DISLOCATED WORKER GRANTS.''; AND

          (2) in subsection (a)--
                  (A) by striking ``national emergency grants'' in the 
                matter preceding paragraph (1) and inserting ``national 
                dislocated worker grants''; and
                  (B) in paragraph (1), by striking ``subsection (c)'' 
                and inserting ``subsection (b)''.
  (b) Administration.--Section 173 (29 U.S.C. 2918) is further 
amended--
          (1) by striking subsection (b) and redesignating subsections 
        (c) and (d) as subsections (b) and (c), respectively; and
          (2) by striking subsection (e) and redesignating subsections 
        (f) and (g) as subsection (d) and (e), respectively.
  (c) Eligible Entities.--Section 173(b)(1)(B) (29 U.S.C. 
2918(b)(1)(B)) (as redesignated by subsection (b)(1) of this section) 
is amended by striking ``, and other entities'' and all that follows 
and inserting a period.
  (d) Participant Eligibility for Military Spouses.--Section 
173(b)(2)(A) (29 U.S.C. 2918(b)(2)(A)) (as redesignated by subsection 
(b)(1) of this section) is amended--
          (1) in clause (iii), by striking ``; or'' and inserting a 
        semicolon;
          (2) in clause (iv)(IV) by striking the period and inserting 
        ``; or''; and
          (3) by inserting at the end the following:
                          ``(v) is the spouse of a member of the Armed 
                        Forces who is on active duty or full-time 
                        National Guard duty, or who was recently 
                        separated from such duties, and such spouse is 
                        in need of employment and training assistance 
                        to obtain or retain employment.''.
  (e) Conforming Amendment.--The table of contents in section 1(b) is 
amended by amending the item related to section 173 to read as follows:

``Sec. 173. National dislocated worker grants.''.

SEC. 127. AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL ACTIVITIES.

  (a) In General.--Section 174(a)(1) (29 U.S.C. 2919(a)(1)) is amended 
by striking ``1999 through 2003'' and inserting ``2006 through 2011''.
  (b) Reservations.--Section 174(b) is amended to read as follows:
  ``(b) Technical Assistance; Demonstration and Pilot Projects; 
Evaluations; Incentive Grants.--
          ``(1) Demonstration and pilot projects.--
                  ``(A) In general.--There are authorized to be 
                appropriated to carry out section 171, $211,000,000 for 
                fiscal year 2006 and such sums as may be necessary for 
                fiscal years 2007 through 2011.
                  ``(B) Reservation for community-based job training.--
                Of the amount appropriated pursuant to subparagraph 
                (A), the Secretary shall reserve up to $125,000,000 for 
                carrying out section 171(d).
          ``(2) Technical assistance, evaluations.--There are 
        authorized to be appropriated to carry out section 170, section 
        172, and section 136 such sums as may be necessary for each of 
        fiscal years 2006 through 2011.''.

SEC. 128. REQUIREMENTS AND RESTRICTIONS.

  (a) In General.--Section 181(c)(2)(A) (29 U.S.C. 2931(c)(2)(A)) is 
amended in the matter preceding clause (i) by striking ``shall'' and 
inserting ``may''.
  (b) Limitations.--Section 181(e) (29 U.S.C. 2931(e)) is amended by 
striking ``training for'' and inserting ``the entry into employment, 
retention in employment, or increases in earnings of''.
  (c) Reports to Congress.--Section 185(e)(2) (29 U.S.C. 2935(e)(2)) is 
amended by inserting ``and the Secretary shall submit to the Committee 
on Education and the Workforce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pensions of the Senate,'' 
after ``Secretary,''.

SEC. 129. NONDISCRIMINATION.

  Section 188(a)(2) (29 U.S.C. 2931(a)(2)) is amended to read as 
follows:
          ``(2) Prohibition of discrimination regarding participation, 
        benefits, and employment.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), 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.
                  ``(B) Exemption for religious organizations.--
                Subparagraph (A) shall not apply to a recipient of 
                financial assistance under this title that is a 
                religious corporation, association, educational 
                institution, or society, with respect to the employment 
                of individuals of a particular religion to perform work 
                connected with the carrying on by such corporation, 
                association, educational institution, or society of its 
                activities. Such recipients shall comply with the other 
                requirements contained in subparagraph (A).''.

SEC. 130. ADMINISTRATIVE PROVISIONS.

  (a) Program Year.--Section 189(g)(1) (29 U.S.C. 2939(g)(1)) is 
amended to read as follows:
          ``(1) In general.--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) Availability.--Section 189(g)(2) (29 U.S.C. 2939(g)(2)) is 
amended by striking ``each State'' and inserting ``each recipient''.
  (c) General Waivers.--Section 189(i)(4) (29 U.S.C. 2939(i)(4)) is 
amended--
          (1) in subparagraph (A), in the matter preceding clause (i), 
        by inserting ``, or in accordance with subparagraph (D)'' after 
        ``subparagraph (B)''; and
          (2) by adding the following subparagraph:
                  ``(D) Expedited process for extending approved 
                waivers to additional states.--In lieu of the 
                requirements of subparagraphs (B) and (C), the 
                Secretary may establish an expedited procedure for the 
                purpose of extending to additional States the waiver of 
                statutory or regulatory requirements that have been 
                approved for a State pursuant to a request under 
                subparagraph (B). Such procedure shall ensure that the 
                extension of such waivers to additional States are 
                accompanied by appropriate conditions relating the 
                implementation of such waivers.''.

SEC. 131. GENERAL PROGRAM REQUIREMENTS.

  Section 195 (29 U.S.C. 2945) is amended by adding at the end the 
following new paragraphs:
          ``(14) Funds provided under this title shall not be used to 
        establish or operate stand-alone fee-for-service enterprises 
        that compete with private sector employment agencies within the 
        meaning of section 701(c) of the Civil Rights Act of 1964 (42 
        U.S.C. 2000e(c)). For purposes of this paragraph, such an 
        enterprise does not include one-stop centers.
          ``(15) Any report required to be submitted to Congress, or to 
        a Committee of Congress, under this title shall be submitted to 
        both the chairmen and ranking minority members of the Committee 
        on Education and the Workforce of the House of Representatives 
        and the Committee on Health, Education, Labor, and Pensions of 
        the Senate.''.

 TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY EDUCATION

SEC. 201. TABLE OF CONTENTS.

  The table of contents in section 1(b) is amended by amending the 
items relating to title II to read as follows:

    ``TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY 
                               EDUCATION

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

                    ``Chapter 1--Federal Provisions

        ``Sec. 211. Reservation of funds; grants to eligible agencies; 
                        allotments.
        ``Sec. 212. Performance accountability system.
        ``Sec. 213. Incentive grants for States.

                     ``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.''.

SEC. 202. AMENDMENT.

  Title II (29 U.S.C. 2901 et seq.) is amended to read as follows:

    ``TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY 
                               EDUCATION

``SEC. 201. SHORT TITLE.

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

``SEC. 202. PURPOSE.

  ``It is the purpose of this title to provide instructional 
opportunities for adults seeking to improve their literacy skills, 
including their basic reading, writing, speaking, and math skills, and 
support States and local communities in providing, on a voluntary 
basis, adult education, basic skills, and family literacy education 
programs, in order to--
          ``(1) increase the literacy of adults, including the basic 
        reading, writing, speaking, and math skills, to a level of 
        proficiency necessary for adults to obtain employment and self-
        sufficiency and to successfully advance in the workforce;
          ``(2) assist adults in the completion of a secondary school 
        education (or its equivalent) and the transition to a 
        postsecondary educational institution;
          ``(3) assist adults who are parents to enable them to support 
        the educational development of their children and make informed 
        choices regarding their children's education including, through 
        instruction in basic reading, writing, speaking, and math 
        skills; and
          ``(4) assist immigrants who are not proficient in English in 
        improving their reading, writing, speaking, and math skills and 
        acquiring an understanding of the American free enterprise 
        system, individual freedom, and the responsibilities of 
        citizenship.

``SEC. 203. DEFINITIONS.

  ``In this title:
          ``(1) Adult education, basic skills, and family literacy 
        education programs.--The term `adult education, basic skills, 
        and family literacy education programs' means a sequence of 
        academic instruction and educational services below the 
        postsecondary level that increase an individual's ability to 
        read, write, and speak in English and perform mathematical 
        computations leading to a level of proficiency equivalent to at 
        least a secondary school completion that is provided for 
        individuals--
                  ``(A) who are at least 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 
                        reading, writing, speaking, and math skills to 
                        enable the individuals to function effectively 
                        in society;
                          ``(ii) do not have a secondary school 
                        diploma, General Educational Development 
                        credential (GED), or other State-recognized 
                        equivalent and have not achieved an equivalent 
                        level of education; or
                          ``(iii) are unable to read, write, or speak 
                        the English language.
          ``(2) Eligible agency.--The term `eligible agency'--
                  ``(A) means the primary entity or agency in a State 
                or an outlying area responsible for administering or 
                supervising policy for adult education, basic skills, 
                and family literacy education programs in the State or 
                outlying area, respectively, consistent with the law of 
                the State or outlying area, respectively; and
                  ``(B) may be the State educational agency, the State 
                agency responsible for administering workforce 
                investment activities, or the State agency responsible 
                for administering community or technical colleges.
          ``(3) Eligible provider.--The term `eligible provider' 
        means--
                  ``(A) a local educational agency;
                  ``(B) a community-based or faith-based organization 
                of demonstrated effectiveness;
                  ``(C) a volunteer literacy organization of 
                demonstrated effectiveness;
                  ``(D) an institution of higher education;
                  ``(E) a public or private educational agency;
                  ``(F) a library;
                  ``(G) a public housing authority;
                  ``(H) an institution that is not described in any of 
                subparagraphs (A) through (G) and has the ability to 
                provide adult education, basic skills, and family 
                literacy education programs to adults and families; or
                  ``(I) a consortium of the agencies, organizations, 
                institutions, libraries, or authorities described in 
                any of subparagraphs (A) through (H).
          ``(4) English language acquisition program.--The term 
        `English language acquisition program' means a program of 
        instruction designed to help individuals with limited English 
        proficiency achieve competence in reading, writing, and 
        speaking the English language.
          ``(5) Essential components of reading instruction.--The term 
        `essential components of reading instruction' has the meaning 
        given to that term in section 1208 of the Elementary and 
        Secondary Education Act of 1965.
          ``(6) Family literacy education program.--The term `family 
        literacy education program' means an educational program that--
                  ``(A) assists parents and students, on a voluntary 
                basis, in achieving the purposes of this title as 
                described in section 202; and
                  ``(B) is of sufficient intensity in terms of hours 
                and of sufficient duration to make sustainable changes 
                in a family, is based upon scientific research-based 
                principles, and, for the purpose of substantially 
                increasing the ability of parents and children to read, 
                write, and speak English, integrates--
                          ``(i) interactive literacy activities between 
                        parents and their children;
                          ``(ii) training for parents regarding how to 
                        be the primary teacher for their children and 
                        full partners in the education of their 
                        children;
                          ``(iii) parent literacy training that leads 
                        to economic self-sufficiency; and
                          ``(iv) an age-appropriate education to 
                        prepare children for success in school and life 
                        experiences.
          ``(7) Governor.--The term `Governor' means the chief 
        executive officer of a State or outlying area.
          ``(8) 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).
                  ``(B) Individuals with disabilities.--The term 
                `individuals with disabilities' means more than one 
                individual with a disability.
          ``(9) Individual with limited english proficiency.--The term 
        `individual with limited English proficiency' means an adult or 
        out-of-school youth who has limited ability in reading, 
        writing, speaking, 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.
          ``(10) Institution of higher education.--The term 
        `institution of higher education' has the meaning given to that 
        term in section 101 of the Higher Education Act of 1965.
          ``(11) Literacy.--The term `literacy' means an individual's 
        ability to read, write, and speak in English, compute, and 
        solve problems at a level of proficiency necessary to obtain 
        employment and to successfully make the transition to 
        postsecondary education.
          ``(12) Local educational agency.--The term `local educational 
        agency' has the meaning given to that term in section 9101 of 
        the Elementary and Secondary Education Act of 1965.
          ``(13) Outlying area.--The term `outlying area' has the 
        meaning given to that term in section 101 of this Act.
          ``(14) 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.
          ``(15) Reading.--The term `reading' has the meaning given to 
        that term in section 1208 of the Elementary and Secondary 
        Education Act of 1965.
          ``(16) Scientifically based research.--The term 
        `scientifically based research' has the meaning given to that 
        term in section 9101 of the Elementary and Secondary Education 
        Act of 1965.
          ``(17) Secretary.--The term `Secretary' means the Secretary 
        of Education.
          ``(18) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
          ``(19) State educational agency.--The term `State educational 
        agency' has the meaning given to that term in section 9101 of 
        the Elementary and Secondary Education Act of 1965.
          ``(20) Workplace literacy program.--The term `workplace 
        literacy program' means an educational program that is offered 
        in collaboration between eligible providers and employers or 
        employee organizations for the purpose of improving the 
        productivity of the workforce through the improvement of 
        reading, writing, speaking, and math skills.

``SEC. 204. HOME SCHOOLS.

  ``Nothing in this title shall be construed to affect home schools, 
whether or not a home school is treated as a home school or a private 
school under State law, or to compel a parent engaged in home schooling 
to participate in an English language acquisition program, a family 
literacy education program, or an adult education, basic skills, and 
family literacy education program.

``SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to carry out this title 
$590,127,000 for fiscal year 2006 and such sums as may be necessary for 
fiscal years 2007 through 2011.

                    ``CHAPTER 1--FEDERAL PROVISIONS

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

  ``(a) Reservation of Funds.--From the sums appropriated under section 
205 for a fiscal year, the Secretary--
          ``(1) shall reserve up to 1.72 percent for incentive grants 
        under section 213;
          ``(2) shall reserve 1.75 percent to carry out section 242; 
        and
          ``(3) shall reserve up to 1.55 percent to carry out section 
        243.
  ``(b) Grants to Eligible Agencies.--
          ``(1) In general.--From the sums 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).
          ``(2) Purpose of grants.--The Secretary may award a grant 
        under paragraph (1) only if the eligible agency involved agrees 
        to expend the grant in accordance with the provisions of this 
        title.
  ``(c) Allotments.--
          ``(1) Initial allotments.--From the sums 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--
                  ``(A) $100,000, in the case of an eligible agency 
                serving an outlying area; and
                  ``(B) $250,000, in the case of any other eligible 
                agency.
          ``(2) Additional allotments.--From the sums 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 sums 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;
          ``(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, General 
        Educational Development credential (GED), or other State-
        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 Palau, the Secretary shall 
        award grants to Guam, American Samoa, the Commonwealth of the 
        Northern Mariana Islands, or the Republic of Palau to carry out 
        activities described in this title in accordance with the 
        provisions of this title as determined by the Secretary.
          ``(2) Termination of eligibility.--Notwithstanding any other 
        provision of law, the Republic of Palau shall be eligible to 
        receive a grant under this title until an agreement for the 
        extension of United States education assistance under the 
        Compact of Free Association for the Republic of Palau becomes 
        effective.
          ``(3) 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 Provisions.--
          ``(1) In general.--Notwithstanding subsection (c), and 
        subject to paragraphs (2) and (3), for fiscal year 2006 and 
        each succeeding fiscal year, no eligible agency shall receive 
        an allotment under this title that is less than 90 percent of 
        the allotment the eligible agency received for the preceding 
        fiscal year under this title.
          ``(2) Exception.--An eligible agency that receives for the 
        preceding fiscal year only an initial allotment under 
        subsection (c)(1) (and no additional allotment under subsection 
        (c)(2)) shall receive an allotment equal to 100 percent of the 
        initial allotment.
          ``(3) Ratable reduction.--If for any fiscal year the amount 
        available for allotment under this title 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 title 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 title, 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 title for such year.

``SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

  ``(a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, composed of the 
activities described in this section, to assess the effectiveness of 
eligible agencies in achieving continuous improvement of adult 
education, basic skills, and family literacy education programs funded 
under this title, in order to optimize the return on investment of 
Federal funds in adult education, basic skills, and family literacy 
education programs.
  ``(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) employment performance indicators 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) Measurable improvements in literacy, 
                        including basic skill levels in reading, 
                        writing, and speaking the English language and 
                        basic math, leading to proficiency in each 
                        skill.
                          ``(ii) Receipt of a secondary school diploma, 
                        General Educational Development credential 
                        (GED), or other State-recognized equivalent.
                          ``(iii) Placement in postsecondary education 
                        or other training programs.
                  ``(B) Employment performance indicators.--Consistent 
                with applicable Federal and State privacy laws, an 
                eligible agency shall identify in the State plan the 
                following individual participant employment performance 
                indicators:
                          ``(i) Entry into employment.
                          ``(ii) Retention in employment.
                          ``(iii) Increase in earnings.
          ``(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, basic 
                        skills, and family literacy education programs 
                        authorized under this title. 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 and 
                                significantly improving the agency's 
                                performance outcomes in an objective, 
                                quantifiable, and measurable form.
                          ``(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, 
                        basic skills, and family literacy education 
                        programs authorized under this title, the 
                        Secretary and each eligible agency shall reach 
                        agreement on levels of student 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's adjusted 
                                levels of performance, taking into 
                                account factors including the 
                                characteristics of participants when 
                                the participants entered the program; 
                                and
                                  ``(II) the extent to which such 
                                levels promote continuous and 
                                significant improvement in performance 
                                on the student proficiencymeasures used 
by such eligible agency and ensure optimal return on the investment of 
Federal funds.
                          ``(v) Agreement on eligible agency adjusted 
                        levels of performance for second 3 years.--
                        Prior to the fourth program year covered by the 
                        State plan, the Secretary and each eligible 
                        agency shall reach agreement on levels of 
                        student performance for each of the core 
                        indicators of performance for the fourth, 
                        fifth, and sixth 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)(I), the eligible agency may request 
                        that the eligible agency adjusted levels of 
                        performance agreed to under clause (iii) or (v) 
                        be revised.
                  ``(B) Levels of employment performance.--The eligible 
                agency shall identify, in the State plan, eligible 
                agency levels of performance for each of the employment 
                performance indicators described in paragraph (2)(B). 
                Such levels shall be considered to be eligible agency 
                adjusted levels of performance for purposes of this 
                title.
  ``(c) Report.--
          ``(1) In general.--Each eligible agency that receives a grant 
        under section 211(b) shall annually prepare and submit to the 
        Secretary, the Governor, the State legislature, and eligible 
        providers a report on the progress of the eligible agency in 
        achieving eligible agency performance measures, including the 
        following:
                  ``(A) Information on the levels of performance 
                achieved by the eligible agency with respect to the 
                core indicators of performance and employment 
                performance indicators.
                  ``(B) The number and type of each eligible provider 
                that receives funding under such grant.
          ``(2) Information dissemination.--The Secretary--
                  ``(A) shall make the information contained in such 
                reports available to the general public through 
                publication (including on the Internet site of the 
                Department of Education) and other appropriate methods;
                  ``(B) shall disseminate State-by-State comparisons of 
                the information; and
                  ``(C) shall provide the appropriate committees of the 
                Congress with copies of such reports.

``SEC. 213. INCENTIVE GRANTS FOR STATES.

  ``(a) In General.--From funds appropriated under section 211(a)(1), 
the Secretary may award grants to States for exemplary performance in 
carrying out programs under this title. Such awards shall be based on 
States exceeding the core indicators of performance established under 
section 212(b)(2)(A) and may be based on the performance of the State 
in serving populations, such as those described in section 224(b)(10), 
including the levels of service provided and the performance outcomes, 
and such other factors relating to the performance of the State under 
this title as the Secretary determines appropriate.
  ``(b) Use of Funds.--The funds awarded to a State under this 
paragraph may be used to carry out any activities authorized under this 
title, including demonstrations and innovative programs for hard-to-
serve populations.

                     ``CHAPTER 2--STATE PROVISIONS

``SEC. 221. STATE ADMINISTRATION.

  ``Each eligible agency shall be responsible for the following 
activities under this title:
          ``(1) The development, submission, implementation, and 
        monitoring 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 title.
          ``(3) Coordination and avoidance of duplication 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 title for a fiscal year--
          ``(1) shall use an amount 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 
        such amount 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 $75,000, 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, basic skills, and family 
        literacy education programs for which the grant is awarded, a 
        non-Federal contribution in an amount at least 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, basic skills, and family 
                literacy education programs 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, basic skills, and family literacy 
                education programs 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, basic skills, and family literacy education programs 
        in a manner that is consistent with the purpose of this title.

``SEC. 223. STATE LEADERSHIP ACTIVITIES.

  ``(a) In General.--Each eligible agency may use funds made available 
under section 222(a)(2) for any of the following adult education, basic 
skills, and family literacy education programs:
          ``(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 the essential 
        components of reading instruction 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, basic skills, and family literacy 
        education programs, including for the development and 
        dissemination of scientifically based research instructional 
        practices in reading, writing, speaking, math, and English 
        language acquisition programs.
          ``(3) The provision of assistance to eligible providers in 
        developing, implementing, and reporting measurable progress in 
        achieving the objectives of this title.
          ``(4) The provision of technology assistance, including staff 
        training, to eligible providers of adult education, basic 
        skills, and family literacy education programs, including 
        distance learning activities, to enable the eligible providers 
        to improve the quality of such activities.
          ``(5) The development and implementation of technology 
        applications or distance learning, including professional 
        development to support the use of instructional technology.
          ``(6) Coordination with other public programs, including 
        welfare-to-work, workforce development, and job training 
        programs.
          ``(7) 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, basic skills, and family literacy education 
        programs, for adults enrolled in such activities.
          ``(8) The development and implementation of a system to 
        assist in the transition from adult basic education to 
        postsecondary education.
          ``(9) Activities to promote workplace literacy programs.
          ``(10) Activities to promote and complement local outreach 
        initiatives described in section 243(7).
          ``(11) Other activities of statewide significance, including 
        assisting eligible providers in achieving progress in improving 
        the skill levels of adults who participate in programs under 
        this title.
          ``(12) Integration of literacy, instructional, and 
        occupational skill training and promotion of linkages with 
        employees.
  ``(b) Coordination.--In carrying out this section, eligible agencies 
shall coordinate 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 title 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 imposed by the State or outlying area.

``SEC. 224. STATE PLAN.

  ``(a) 6-Year Plans.--
          ``(1) In general.--Each eligible agency desiring a grant 
        under this title for any fiscal year shall submit to, or have 
        on file with, the Secretary a 6-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.--The eligible agency shall include in the State 
plan or any revisions to the State plan--
          ``(1) an objective assessment of the needs of individuals in 
        the State or outlying area for adult education, basic skills, 
        and family literacy education programs, including individuals 
        most in need or hardest to serve;
          ``(2) a description of the adult education, basic skills, and 
        family literacy education programs that will be carried out 
        with funds received under this title;
          ``(3) a description of how the eligible agency will evaluate 
        and measure annually the effectiveness and improvement of the 
        adult education, basic skills, and family literacy education 
        programs based on the performance measures described in section 
        212 including--
                  ``(A) how the eligible agency will evaluate and 
                measure annually such effectiveness on a grant-by-grant 
                basis; and
                  ``(B) how the eligible agency--
                          ``(i) will hold eligible providers 
                        accountable regarding the progress of such 
                        providers in improving the academic achievement 
                        of participants in adult education programs 
                        under this title and regarding the core 
                        indicators of performance described in section 
                        212(b)(2)(A); and
                          ``(ii) will use technical assistance, 
                        sanctions, and rewards (including allocation of 
                        grant funds based on performance and 
                        termination of grant funds based on 
                        nonperformance);
          ``(4) a description of the performance measures described in 
        section 212 and how such performance measures have 
        significantly improved adult education, basic skills, and 
        family literacy education programs in the State or outlying 
        area;
          ``(5) an assurance that the eligible agency will, in addition 
        to meeting all of the other requirements of this title, award 
        not less than one grant under this title to an eligible 
        provider that--
                  ``(A) 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, basic skills, and 
                family literacy education programs; and
                  ``(B) attempts to coordinate with support services 
                that are not provided under this title prior to using 
                funds for adult education, basic skills, and family 
                literacy education programs provided under this title 
                for support services;
          ``(6) an assurance that the funds received under this title 
        will not be expended for any purpose other than for activities 
        under this title;
          ``(7) a description of how the eligible agency will fund 
        local activities in accordance with the measurable goals 
        described in section 231(d);
          ``(8) an assurance that the eligible agency will expend the 
        funds under this title 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, which process--
                  ``(A) shall include consultation with the State 
                workforce investment board, the State board responsible 
                for administering community or technical colleges, the 
                Governor, the State educational agency, the State board 
                or agency responsible for administering block grants 
                for temporary assistance to needy families under title 
                IV of the Social Security Act, the State council on 
                disabilities, the State vocational rehabilitation 
                agency, other State agencies that promote the 
                improvement of adult education, basic skills, and 
                family literacy education programs, and direct 
                providers of such programs; and
                  ``(B) may include consultation with the State agency 
                on higher education, institutions responsible for 
                professional development of adult education, basic 
                skills, and family literacy education programs 
                instructors, representatives of business and industry, 
                refugee assistance programs, and faith-based 
                organizations;
          ``(10) a description of the eligible agency's strategies for 
        serving populations that include, at a minimum--
                  ``(A) low-income individuals;
                  ``(B) individuals with disabilities;
                  ``(C) the unemployed;
                  ``(D) the underemployed; and
                  ``(E) individuals with multiple barriers to 
                educational enhancement, including individuals with 
                limited English proficiency;
          ``(11) a description of how the adult education, basic 
        skills, and family literacy education programs that will be 
        carried out with any funds received under this title 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;
          ``(12) a description of the steps the eligible agency will 
        take to ensure direct and equitable access, as required in 
        section 231(c)(1), including--
                  ``(A) how the State will build the capacity of 
                community-based and faith-based organizations to 
                provide adult education, basic skills, and family 
                literacy education programs; and
                  ``(B) how the State will increase the participation 
                of business and industry in adult education, basic 
                skills, and family literacy education programs;
          ``(13) an assessment of the adequacy of the system of the 
        State or outlying area to ensure teacher quality and a 
        description of how the State or outlying area will use funds 
        received under this subtitle to improve teacher quality, 
        including professional development on the use of scientifically 
        based research to improve instruction; and
          ``(14) a description of how the eligible agency will consult 
        with any State agency responsible for postsecondary education 
        to develop adult education that prepares students to enter 
        postsecondary education without the need for remediation upon 
        completion of secondary school equivalency programs.
  ``(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 of 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, the chief State school officer, or the 
        State officer responsible for administering community or 
        technical colleges, or outlying area for review and comment; 
        and
          ``(2) ensure that any comments regarding the State plan by 
        the Governor, the chief State school officer, or the State 
        officer responsible for administering community or technical 
        colleges, and any revision to the State plan, are submitted to 
        the Secretary.
  ``(e) Plan Approval.--A State plan submitted to the Secretary shall 
be approved by the Secretary only if the plan is consistent with the 
specific provisions of this title.

``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 and 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 skills education;
          ``(2) special education programs as determined by the 
        eligible agency;
          ``(3) reading, writing, speaking, and math programs; and
          ``(4) secondary school credit or diploma programs or their 
        recognized equivalent.
  ``(c) Priority.--Each eligible agency that is using assistance 
provided under this section to carry out a program for criminal 
offenders within a correctional institution shall give priority to 
serving individuals who are likely to leave the correctional 
institution within 5 years of participation in the program.
  ``(d) Definitions.--For purposes of this section:
          ``(1) 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.
          ``(2) Criminal offender.--The term `criminal offender' means 
        any individual who is charged with, or convicted of, any 
        criminal offense.

                     ``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 that meet the conditions and requirements of 
this title to enable the eligible providers to develop, implement, and 
improve adult education, basic skills, and family literacy education 
programs within the State.
  ``(b) Local Activities.--The eligible agency shall require eligible 
providers receiving a grant or contract under subsection (a) to 
establish or operate one or more programs of instruction that provide 
services or instruction in one or more of the following categories:
          ``(1) Adult education, basic skills, and family literacy 
        education programs (including proficiency in reading, writing, 
        speaking, and math).
          ``(2) Workplace literacy programs.
          ``(3) English language acquisition programs.
          ``(4) Family literacy education programs.
  ``(c) Direct and Equitable Access; Same Process.--Each eligible 
agency receiving funds under this title 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) Measurable Goals.--The eligible agency shall require eligible 
providers receiving a grant or contract under subsection (a) to 
demonstrate--
          ``(1) the eligible provider's measurable goals for 
        participant outcomes to be achieved annually on the core 
        indicators of performance and employment performance indicators 
        described in section 212(b)(2);
          ``(2) the past effectiveness of the eligible provider in 
        improving the basic academic skills of adults and, for eligible 
        providers receiving grants in the prior year, the success of 
        the eligible provider receiving funding under this title in 
        exceeding its performance goals in the prior year;
          ``(3) the commitment of the eligible provider to serve 
        individuals in the community who are the most in need of basic 
        academic skills instruction services, including individuals who 
        are low-income or have minimal reading, writing, speaking, and 
        math skills, or limited English proficiency;
          ``(4) the program--
                  ``(A) is of sufficient intensity and duration for 
                participants to achieve substantial learning gains; and
                  ``(B) uses instructional practices that include the 
                essential components of reading instruction;
          ``(5) educational practices are based on scientifically based 
        research;
          ``(6) the activities of the eligible provider effectively 
        employ advances in technology, as appropriate, including the 
        use of computers;
          ``(7) the activities provide instruction in real-life 
        contexts, when appropriate, to ensure that an individual has 
        the skills needed to compete in the workplace and exercise the 
        rights and responsibilities of citizenship;
          ``(8) the activities are staffed by well-trained instructors, 
        counselors, and administrators;
          ``(9) the activities are coordinated with other available 
        resources in the community, such as through strong links with 
        elementary schools and secondary schools, postsecondary 
        educational institutions, one-stop centers, job training 
        programs, community-based and faith-based organizations, and 
        social service agencies;
          ``(10) 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) the activities include a high-quality information 
        management system that has the capacity to report measurable 
        participant outcomes and to monitor program performance against 
        the performance measures established by the eligible agency;
          ``(12) the local communities have a demonstrated need for 
        additional English language acquisition programs;
          ``(13) the capacity of the eligible provider to produce valid 
        information on performance results, including enrollments and 
        measurable participant outcomes;
          ``(14) adult education, basic skills, and family literacy 
        education programs offer rigorous reading, writing, speaking, 
        and math content that are based on scientifically based 
        research; and
          ``(15) applications of technology, and services to be 
        provided by the eligible providers, are of sufficient intensity 
        and duration to increase the amount and quality of learning and 
        lead to measurable learning gains within specified time 
        periods.
  ``(e) Special Rule.--Eligible providers may use grant funds under 
this title to serve children participating in family literacy programs 
assisted under this part, provided that other sources of funds 
available to provide similar services for such children are used first.

``SEC. 232. LOCAL APPLICATION.

  ``Each eligible provider desiring a grant or contract under this 
title 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 title 
        will be spent consistent with the requirements of this title;
          ``(2) a description of any cooperative arrangements the 
        eligible provider has with other agencies, institutions, or 
        organizations for the delivery of adult education, basic 
        skills, and family literacy education programs; and
          ``(3) each of the demonstrations required by section 231(d).

``SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

  ``(a) In General.--Subject to subsection (b), of the amount that is 
made available under this title to an eligible provider--
          ``(1) at least 95 percent shall be expended for carrying out 
        adult education, basic skills, and family literacy education 
        programs; and
          ``(2) the remaining amount shall be used for planning, 
        administration, personnel and professional development, 
        development of measurable goals in reading, writing, speaking, 
        and math, 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 may 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, basic skills, and family literacy education programs under 
this title shall supplement and not supplant other State or local 
public funds expended for adult education, basic skills, and family 
literacy education programs.
  ``(b) Maintenance of Effort.--
          ``(1) In general.--
                  ``(A) Determination.--An eligible agency may receive 
                funds under this title for any fiscal year if the 
                Secretary finds that the fiscal effort per student or 
                the aggregate expenditures of such eligible agency for 
                activities under this title, in the second preceding 
                fiscal year, were not less than 90 percent of the 
                fiscal effort per student or the aggregate expenditures 
                of such eligible agency for adult education, basic 
                skills, and family literacy education programs, 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 title for such program year to the agency 
                        for adult education, basic skills, and family 
                        literacy education programs 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, basic skills, and family 
        literacy education programs under this title for a fiscal year 
        is less than the amount made available for adult education, 
        basic skills, and family literacy education programs under this 
        title 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 not more than 1 fiscal year, 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) In General.--
          ``(1) Purpose.--The purpose of the National Institute for 
        Literacy is to promote the improvement of literacy, including 
        skills in reading, writing, and English language acquisition 
        for children, youth, and adults, through practices derived from 
        the findings of scientifically based research.
          ``(2) Establishment.--There is established a 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, reviewed 
        annually, and modified as needed by the Secretary of Education 
        with the Secretary of Health and Human Services and the 
        Secretary of Labor (in this section referred to as the 
        `Interagency Group').
          ``(3) Offices.--The Institute shall have offices separate 
        from the offices of the Department of Education, the Department 
        of Health and Human Services, and the Department of Labor.
          ``(4) Administrative support.--The Department of Education 
        shall provide administrative support for the Institute.
          ``(5) Daily operations.--The Director of the Institute shall 
        administer the daily operations of the Institute.
  ``(b) Duties.--
          ``(1) In general.--To carry out its purpose, the Institute 
        may--
                  ``(A) identify and disseminate rigorous scientific 
                research on the effectiveness of instructional 
                practices and organizational strategies relating to 
                programs on the acquisition of skills in reading, 
                writing, and English language acquisition for children, 
                youth, and adults;
                  ``(B) create and widely disseminate materials about 
                the acquisition and application of skills in reading, 
                writing, and English language acquisition for children, 
                youth, and adults based on scientifically based 
                research;
                  ``(C) ensure a broad understanding of scientifically 
                based research on reading, writing, and English 
                language acquisition for children, youth, and adults 
                among Federal agencies with responsibilities for 
                administering programs that provide related services, 
                including State and local educational agencies;
                  ``(D) facilitate coordination and information sharing 
                among national organizations and associations 
                interested in programs that provide services to improve 
                skills in reading, writing, and English language 
                acquisition for children, youth, and adults;
                  ``(E) coordinate with the appropriate offices in the 
                Department of Education, the Department of Health and 
                Human Services, the Department of Labor, and other 
                Federal agencies to apply the findings of 
                scientifically based research related to programs on 
                reading, writing, and English language acquisition for 
                children, youth, and adults;
                  ``(F) establish a national electronic database and 
                Internet site describing and fostering communication on 
                scientifically based programs in reading, writing, and 
                English language acquisition for children, youth, and 
                adults, including professional development programs; 
                and
                  ``(G) provide opportunities for technical assistance, 
                meetings, and conferences that will foster increased 
                coordination among Federal, State, and local agencies 
                and entities and improvement of reading, writing, and 
                English language acquisition skills for children, 
                youth, and adults.
          ``(2) Coordination.--In identifying scientifically based 
        research on reading, writing, and English language acquisition 
        for children, youth, and adults, the Institute shall use 
        standards for research quality that are consistent with those 
        established by the Institute of Education Sciences.
          ``(3) Grants, contracts, and cooperative agreements.--
                  ``(A) In general.--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 individuals, 
                institutions, agencies, or organizations, to carry out 
                the activities of the Institute.
                  ``(B) Regulations.--The Director may adopt the 
                general administrative regulations of the Department of 
                Education, as applicable, for use by the Institute.
                  ``(C) Relation to other laws.--The duties and powers 
                of the Institute under this title are in addition to 
                the duties and powers of the Institute under subparts 
                1, 2, and 3 of part B of the Elementary and Secondary 
                Education Act of 1965 (commonly referred to as Reading 
                First, Early Reading First, and the William F. Goodling 
                Even Start Family Literacy Program, respectively).
  ``(c) Visiting Scholars.--The Institute may establish a visiting 
scholars program, with such stipends and allowances as the Director 
considers necessary, for outstanding researchers, scholars, and 
individuals who--
          ``(1) have careers in adult education, workforce development, 
        or scientifically based reading, writing, or English language 
        acquisition; and
          ``(2) can assist the Institute in translating research into 
        practice and providing analysis that advances instruction in 
        the fields of reading, writing, and English language 
        acquisition for children, youth, and adults.
  ``(d) Interns and Volunteers.--The Institute, in consultation with 
the National Institute for Literacy Advisory Board, may award paid and 
unpaid internships to individuals seeking to assist the Institute in 
carrying out its purpose. 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) Qualifications.--The Board shall be composed of 
                individuals who--
                          ``(i) are not otherwise officers or employees 
                        of the Federal Government; and
                          ``(ii) are knowledgeable about current 
                        effective scientifically based research 
                        findings on instruction in reading, writing, 
                        and English language acquisition for children, 
                        youth, and adults.
                  ``(C) Composition.--The Board may include--
                          ``(i) representatives of business, industry, 
                        labor, literacy organizations, adult education 
                        providers, community colleges, students with 
                        disabilities, and State agencies, including 
                        State directors of adult education; and
                          ``(ii) individuals who, and representatives 
                        of entities that, have been successful in 
                        improving skills in reading, writing, and 
                        English language acquisition for children, 
                        youth, and adults.
          ``(2) Duties.--The Board shall--
                  ``(A) make recommendations concerning the appointment 
                of the Director of the Institute;
                  ``(B) provide independent advice on the operation of 
                the Institute;
                  ``(C) receive reports from the Interagency Group and 
                the Director; and
                  ``(D) review the biennial report to the Congress 
                under subsection (k).
          ``(3) Federal advisory committee act.--Except as otherwise 
        provided, the Board shall be subject to the provisions of the 
        Federal Advisory Committee Act.
          ``(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 one-third 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. A 
        recommendation of the Board may be passed only by a majority of 
        the Board's members present at a meeting for which there is a 
        quorum.
          ``(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) Director.--The Secretary of Education, after considering 
recommendations made by the Board and consulting with the Interagency 
Group, shall appoint and fix the pay of the Director of the Institute 
and, when necessary, shall appoint an Interim Director of the 
Institute.
  ``(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) Biennial Report.--
          ``(1) In general.--The Institute shall submit a report 
        biennially to the Committee on Education and the Workforce of 
        the House of Representatives and the Committee on Health, 
        Education, Labor, and Pensions of the Senate. Each report 
        submitted under this subsection shall include--
                  ``(A) a comprehensive and detailed description of the 
                Institute's operations, activities, financial 
                condition, and accomplishments in identifying and 
                describing programs on reading, writing, and English 
                language acquisition for children, youth, and adults 
                for the period covered by the report; and
                  ``(B) a description of how plans for the operation of 
                the Institute for the succeeding 2 fiscal years will 
                facilitate achievement of the purpose of the Institute.
          ``(2) First report.--The Institute shall submit its first 
        report under this subsection to the Congress not later than 1 
        year after the date of the enactment of the Job Training 
        Improvement Act of 2005.
  ``(l) Additional Funding.--In addition to the funds authorized under 
section 205 and reserved for the Institute under section 211, the 
Secretary of Education, the Secretary of Health and Human Services, the 
Secretary of Labor, or the head of any other Federal agency or 
department that participates in the activities of the Institute may 
provide funds to the Institute for activities that the Institute is 
authorized to perform under this section.

``SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

  ``The Secretary shall establish and carry out a program of national 
leadership activities that may include the following:
          ``(1) Technical assistance, on request, including 
        assistance--
                  ``(A) on request to volunteer community- and faith-
                based organizations, including but not limited to, 
                improving their fiscal management, research-based 
                instruction, and reporting requirements, and the 
                development of measurable objectives to carry out the 
                requirements of this title;
                  ``(B) in developing valid, measurable, and reliable 
                performance data, and using performance information for 
                the improvement of adult education basic skills, 
                English language acquisition, and family literacy 
                education programs;
                  ``(C) on adult education professional development; 
                and
                  ``(D) in using distance learning and improving the 
                application of technology in the classroom, including 
                instruction in English language acquisition for 
                individuals who have limited English proficiency.
          ``(2) Providing for the conduct of research on national 
        literacy basic skill acquisition levels among adults, including 
        the number of limited English proficient adults functioning at 
        different levels of reading proficiency.
          ``(3) Improving the coordination, efficiency, and 
        effectiveness of adult education and workforce development 
        services at the national, State, and local levels.
          ``(4) Determining how participation in adult education basic 
        skills, English language acquisition, and family literacy 
        education programs prepares individuals for entry into and 
        success in postsecondary education and employment, and in the 
        case of prison-based services, the effect on recidivism.
          ``(5) Evaluating how different types of providers, including 
        community and faith-based organizations or private for-profit 
        agencies measurably improve the skills of participants in adult 
        education basic skills, English language acquisition, and 
        family literacy education programs.
          ``(6) Identifying model integrated basic and workplace skills 
        education programs, including programs for individuals with 
        limited English proficiency coordinated literacy and employment 
        services, and effective strategies for serving adults with 
        disabilities.
          ``(7) Supporting the development of an entity that would 
        produce and distribute technology-based programs and materials 
        for adult education, basic skills, and family literacy 
        education programs using an intercommunication system, as that 
        term is defined in section 397 of the Communications Act of 
        1934, and expand the effective outreach and use of such 
        programs and materials to adult education eligible providers.
          ``(8) Initiating other activities designed to improve the 
        measurable quality and effectiveness of adult education basic 
        skills, English language acquisition, and family literacy 
        education programs nationwide.''.

             TITLE III--AMENDMENTS TO THE WAGNER-PEYSER ACT

SEC. 301. AMENDMENTS TO THE WAGNER-PEYSER ACT.

  The Wagner-Peyser Act (29 U.S.C. 49 et. seq.) is amended--
          (1) by striking sections 1 through 13;
          (2) in section 14 by inserting ``of Labor'' after 
        ``Secretary''; and
          (3) by amending section 15 to read as follows:

``SEC. 15. WORKFORCE AND LABOR MARKET INFORMATION SYSTEM.

  ``(a) System Content.--
          ``(1) In general.--The Secretary of Labor, in accordance with 
        the provisions of this section, shall oversee the development, 
        maintenance, and continuous improvement of a nationwide 
        workforce and labor market information system 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 in 
                subparagraphs (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 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 workforce and labor market information 
        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 workforce and labor market 
                information 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 workforce and labor market information 
                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) National Electronic Tools to Provide Services.--The Secretary 
is authorized to assist in the development of national electronic tools 
that may be used to facilitate the delivery of core services described 
in section 134 and to provide workforce information to individuals 
through the one-stop delivery systems described in section 121 and 
through other appropriate delivery systems.
  ``(d) Coordination With the States.--
          ``(1) In general.--The Secretary, working through the Bureau 
        of Labor Statistics and the Employment and Training 
        Administration, shall regularly consult with representatives of 
        State agencies carrying out workforce information activities 
        regarding strategies for improving the workforce and labor 
        market information system.
          ``(2) Formal consultations.--At least twice each year, the 
        Secretary, working through the Bureau of Labor Statistics, 
        shall conduct formal consultations regarding programs carried 
        out by the Bureau of Labor Statistics with representatives of 
        each of the 10 Federal regions of the Department of Labor, 
        elected from the State directors affiliated with State agencies 
        that perform the duties described in subsection (e)(2).
  ``(e) State Responsibilities.--
          ``(1) In general.--In order to receive Federal financial 
        assistance under this section, the Governor of a State shall--
                  ``(A) be responsible for the management of the 
                portions of the workforce and labor market information 
                system described in subsection (a) that comprise a 
                statewide workforce and labor market information system 
                and for the State's participation in the development of 
                the annual plan;
                  ``(B) establish a process for the oversight of such 
                system;
                  ``(C) 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 
                workforce and labor market information system;
                  ``(D) 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;
                  ``(E) 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);
                  ``(F) maintain and continuously improve the statewide 
                workforce and labor market information system in 
                accordance with this section;
                  ``(G) perform contract and grant responsibilities for 
                data collection, analysis, and dissemination for such 
                system;
                  ``(H) conduct such other data collection, analysis, 
                and dissemination activities as will ensure an 
                effective statewide workforce and labor market 
                information system;
                  ``(I) 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;
                  ``(J) participate in the development of the annual 
                plan described in subsection (c); and
                  ``(K) 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.
          ``(2) Rule of construction.--Nothing in this section shall be 
        construed as limiting the ability of a Governor 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 2006 through 2011.
  ``(h) Definition.--In this section, the term `local area' means the 
smallest geographical area for which data can be produced with 
statistical reliability.''.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

SEC. 401. FINDINGS.

  Section 2(a) of the Rehabilitation Act of 1973 (29 U.S.C. 701(a)) is 
amended--
          (1) in paragraph (5), by striking ``and'' at the end;
          (2) in paragraph (6), by striking the period and inserting 
        ``; and''; and
          (3) by adding at the end the following:
          ``(7) there is a substantial need to improve and expand 
        services for students with disabilities under this Act.''.

SEC. 402. REHABILITATION SERVICES ADMINISTRATION.

  Section 3(a) of the Rehabilitation Act of 1973 (29 U.S.C. 702(a)) is 
amended--
          (1) by striking ``Office of the Secretary'' and inserting 
        ``Department of Education'';
          (2) by striking ``President by and with the advice and 
        consent of the Senate'' and inserting ``Secretary, except that 
        the Commissioner appointed under the authority existing on the 
        day prior to the date of enactment of the Job Training 
        Improvement Act of 2005 may continue to serve in the former 
        capacity''; and
          (3) by striking ``, and the Commissioner shall be the 
        principal officer,''.

SEC. 403. DIRECTOR.

  (a) In General.--The Rehabilitation Act of 1973 (29 U.S.C. 701 et 
seq.) is amended--
          (1) by striking ``Commissioner'' each place it appears, 
        except in sections 3(a) (as amended by section 402) and 21, and 
        inserting ``Director'';
          (2) in section 100(d)(2)(B), by striking ``commisioner'' and 
        inserting ``director'';
          (3) in section 706, by striking ``commisioner'' and inserting 
        ``director''; and
          (4) in section 723(a)(3), by striking ``commisioner'' and 
        inserting ``director''.
  (b) Exception.--Section 21 of the Rehabilitation Act of 1973 (29 
U.S.C. 718) is amended--
          (1) in subsection (b)(1)--
                  (A) by striking ``Commissioner'' the first place it 
                appears and inserting ``Director of the Rehabilitation 
                Services Administration''; and
                  (B) by striking ``(referred to in this subsection as 
                the `Director')''; and
          (2) by striking ``Commissioner and the Director'' each place 
        it appears and inserting ``both such Directors''.

SEC. 404. DEFINITIONS.

  Section 7 of the Rehabilitation Act of 1973 (29 U.S.C. 705) is 
amended--
          (1) by redesignating paragraphs (35) through (39) as 
        paragraphs (36), (37), (38), (40), and (41), respectively;
          (2) in subparagraph (A)(ii) of paragraph (36) (as 
        redesignated in paragraph (1)), by striking ``paragraph 
        (36)(C)'' and inserting ``paragraph (37)(C)'';
          (3) by inserting after paragraph (34) the following:
          ``(35)(A) The term `student with a disability' means an 
        individual with a disability who--
                  ``(i) is not younger than 16 and not older than 21;
                  ``(ii) has been determined to be eligible under 
                section 102(a) for assistance under this title; and
                  ``(iii)(I) is eligible for, and is receiving, special 
                education under part B of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1411 et seq.); or
                  ``(II) is an individual with a disability, for 
                purposes of section 504.
          ``(B) The term `students with disabilities' means more than 1 
        student with a disability.''; and
          (4) by inserting after paragraph (38) (as redesignated by 
        paragraph (1)) the following:
          ``(39) The term `transition services expansion year' means--
                  ``(A) the first fiscal year for which the amount 
                appropriated under section 100(b) exceeds the amount 
                appropriated under section 100(b) for fiscal year 2004 
                by not less than $100,000,000; and
                  ``(B) each fiscal year subsequent to that first 
                fiscal year.''.

SEC. 405. STATE PLAN.

  (a) Coordination With Education Officials and Assistive Technology 
Programs.--Section 101(a)(11) of the Rehabilitation Act of 1973 (29 
U.S.C. 721(a)(11)) is amended--
          (1) in subparagraph (D)(i) by inserting ``, which may be 
        provided using alternative means of meeting participation (such 
        as video conferences and conference calls)'' before the 
        semicolon; and
          (2) by adding at the end the following:
                  ``(G) Coordination with assistive technology 
                programs.--The State plan shall include an assurance 
                that the designated State unit and the lead agency 
                responsible for carrying out duties under the Assistive 
                Technology Act of 1998 (29 U.S.C. 3001), as amended, 
                have developed working relationships and coordinate 
                their activities.''.
  (b) Assessment and Strategies.--Section 101(a)(15) of the 
Rehabilitation Act of 1973 (29 U.S.C. 721(a)(15)) is amended--
          (1) in subparagraph (A)
                  (A) in clause (i)--
                          (i) in subclause (II), by striking ``and'' at 
                        the end;
                          (ii) in subclause (III), by adding ``and'' at 
                        the end; and
                          (iii) by adding at the end the following:
                                  ``(IV) in a transition services 
                                expansion year, students with 
                                disabilities, including their need for 
                                transition services;''; and
                  (B) by redesignating clauses (ii) and (iii) as 
                clauses (iii) and (iv), respectively, and inserting 
                after clause (i) the following:
                          ``(ii) include an assessment of the 
                        transition services provided under this Act, 
                        and coordinated with transition services under 
                        the Individuals with Disabilities Education 
                        Act, as to those services meeting the needs of 
                        individuals with disabilities;''; and
          (2) in subparagraph (D)--
                  (A) by redesignating clauses (iii), (iv), and (v) as 
                clauses (iv), (v), and (vi), respectively; and
                  (B) by inserting after clause (ii) the following:
                          ``(iii) in a transition services expansion 
                        year, the methods to be used to improve and 
                        expand vocational rehabilitation services for 
                        students with disabilities, including the 
                        coordination of services designed to facilitate 
                        the transition of such students from the 
                        receipt of educational services in school to 
                        the receipt of vocational rehabilitation 
                        services under this title or to postsecondary 
                        education or employment;''.
  (c) Services for Students With Disabilities.--Section 101(a) of the 
Rehabilitation Act of 1973 (29 U.S.C. 721(a)) is further amended by 
adding at the end the following:
          ``(25) Services for students with disabilities.--The State 
        plan for a transition services expansion year shall provide an 
        assurance satisfactory to the Secretary that the State--
                  ``(A) has developed and implemented strategies to 
                address the needs identified in the assessment 
                described in paragraph (15), and achieve the goals and 
                priorities identified by the State, to improve and 
                expand vocational rehabilitation services for students 
                with disabilities on a statewide basis in accordance 
                with paragraph (15); and
                  ``(B) from funds reserved under section 110A, shall 
                carry out programs or activities designed to improve 
                and expand vocational rehabilitation services for 
                students with disabilities that--
                          ``(i) 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, at a minimum, those 
                        services specified in the interagency agreement 
                        required in paragraph (11)(D);
                          ``(ii) improve the achievement of post-school 
                        goals of students with disabilities, including 
                        improving the achievement through participation 
                        (as appropriate when vocational goals are 
                        discussed) in meetings regarding individualized 
                        education programs developed under section 614 
                        of the Individuals with Disabilities Education 
                        Act (20 U.S.C. 1414);
                          ``(iii) provide vocational guidance, career 
                        exploration services, and job search skills and 
                        strategies and technical assistance to students 
                        with disabilities;
                          ``(iv) support the provision of training and 
                        technical assistance to State and local 
                        educational agency and designated State agency 
                        personnel responsible for the planning and 
                        provision of services to students with 
                        disabilities; and
                          ``(v) support outreach activities to students 
                        with disabilities who are eligible for, and 
                        need, services under this title.''.

SEC. 406. SCOPE OF SERVICES.

  Section 103 of the Rehabilitation Act of 1973 (29 U.S.C. 723) is 
amended--
          (1) in subsection (a), by striking paragraph (15) and 
        inserting the following:
          ``(15) transition services for students with disabilities, 
        that facilitate the achievement of the employment outcome 
        identified in the individualized plan for employment, 
        including, in a transition services expansion year, services 
        described in clauses (i) through (iii) of section 
        101(a)(25)(B);'';
          (2) in subsection (b), by striking paragraph (6) and 
        inserting the following:
          ``(6)(A)(i) Consultation and technical assistance services to 
        assist State and local educational agencies in planning for the 
        transition of students with disabilities from school to post-
        school activities, including employment.
          ``(ii) In a transition services expansion year, training and 
        technical assistance described in section 101(a)(25)(B)(iv).
          ``(B) In a transition services expansion year, services for 
        groups of individuals with disabilities who meet the 
        requirements of clauses (i) and (iii) of section 7(35)(A), 
        including services described in clauses (i), (ii), (iii), and 
        (v) of section 101(a)(25)(B), to assist in the transition from 
        school to post-school activities.''; and
          (3) in subsection (b) by inserting at the end, the following:
          ``(7) The establishment, development, or improvement of 
        assistive technology demonstration, loan, reutilization, or 
        financing programs in coordination with activities authorized 
        under the Assistive Technology Act of 1998 (29. U.S.C. 3001), 
        as amended, to promote access to assistive technology for 
        individuals with disabilities and employers.''.

SEC. 407. STANDARDS AND INDICATORS.

  Section 106(a) of the Rehabilitation Act of 1973 (29 U.S.C. 726(a)) 
is amended by striking paragraph (1)(C) and all that follows through 
paragraph (2) and inserting the following:
          ``(2) Measures.--The standards and indicators shall include 
        outcome and related measures of program performance that--
                  ``(A) facilitate the accomplishment of the purpose 
                and policy of this title;
                  ``(B) to the maximum extent practicable, are 
                consistent with the core indicators of performance, and 
                corresponding State adjusted levels of performance, 
                established under section 136(b) of the Workforce 
                Investment Act of 1998 (29 U.S.C. 2871(b)); and
                  ``(C) include measures of the program's performance 
                with respect to the transition to post-school 
                vocational activities, and achievement of the post-
                school vocational goals, of students with disabilities 
                served under the program.''.

SEC. 408. RESERVATION FOR EXPANDED TRANSITION SERVICES.

  The Rehabilitation Act of 1973 is amended by inserting after section 
110 (29 U.S.C. 730) the following:

``SEC. 110A. RESERVATION FOR EXPANDED TRANSITION SERVICES.

  ``(a) Reservation.--From the State allotment under section 110 in a 
transition services expansion year, each State shall reserve an amount 
calculated by the Director under subsection (b) to carry out programs 
and activities under sections 101(a)(25)(B) and 103(b)(6).
  ``(b) Calculation.--The Director shall calculate the amount to be 
reserved for such programs and activities for a fiscal year by each 
State by multiplying $50,000,000 by the percentage determined by 
dividing--
          ``(1) the amount allotted to that State under section 110 for 
        the prior fiscal year, by
          ``(2) the total amount allotted to all States under section 
        110 for that prior fiscal year.''.

SEC. 409. CLIENT ASSISTANCE PROGRAM.

  Section 112(e)(1) of the Rehabilitation Act of 1973 (29 U.S.C. 
732(e)(1)) is amended by redesignating subparagraph (D) as subparagraph 
(E) and inserting after subparagraph (C) the following:
  ``(D) The Secretary shall make grants to the protection and advocacy 
system serving the American Indian Consortium to provide services in 
accordance with this section. The amount of such grants shall be the 
same as provided to territories under this subsection. ''.

SEC. 410. PROTECTION AND ADVOCACY OF INDIVIDUAL RIGHTS.

  Section 509(g)(2) of the Rehabilitation Act of 1973 (29 U.S.C. 
794e(g)(2)) is amended by striking ``was paid'' and inserting ``was 
paid, except that program income generated from such amount shall 
remain available to such system for one additional fiscal year''.

SEC. 411. CHAIRPERSON.

  Section 705(b)(5) of the Rehabilitation Act of 1973 (29 U.S.C. 
796d(b)(5)) is amended to read as follows:
          ``(5) Chairperson.--The Council shall select a chairperson 
        from among the voting membership of the Council.''.

SEC. 412. AUTHORIZATIONS OF APPROPRIATIONS.

  The Rehabilitation Act of 1973 is further amended--
          (1) in section 100(b)(1) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2006 through 
        2011'';
          (2) in section 100(d)(1)(B) by striking ``fiscal year 2003'' 
        and inserting ``fiscal year 2011'';
          (3) in section 110(c) by amending paragraph (2) to read as 
        follows:
          ``(2) The sum referred to in paragraph (1) shall be, as 
        determined by the Secretary, not less than 1 percent and not 
        more than 1.5 percent of the amount referred to in paragraph 
        (1) for each of fiscal years 2003 through 2011.'';
          (4) in section 112(h) by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (5) in section 201(a) by striking ``fiscal years 1999 through 
        2003'' each place it appears and inserting ``fiscal years 2006 
        through 2011'';
          (6) in section 302(i) by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (7) in section 303(e) by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (8) in section 304(b) by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (9) in section 305(b) by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (10) in section 405 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (11) in section 502(j) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2006 through 
        2011'';
          (12) in section 509(l) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2006 through 
        2011'';
          (13) in section 612 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (14) in section 628 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (15) in section 714 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011'';
          (16) in section 727 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011''; and
          (17) in section 753 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2006 through 2011''.

SEC. 413. CONFORMING AMENDMENT.

  Section 1(b) of the Rehabilitation Act of 1973 is amended by 
inserting after the item relating to section 110 the following:

``Sec. 110A. Reservation for expanded transition services.''.

SEC. 414. HELEN KELLER NATIONAL CENTER ACT.

  (a) General Authorization of Appropriations.--The first sentence of 
section 205(a) of the Helen Keller National Center Act (29 U.S.C. 
1904(a)) is amended by striking ``1999 through 2003'' and inserting 
``2006 through 2011''.
  (b) Helen Keller National Center Federal Endowment Fund.--The first 
sentence of section 208(h) of such Act (29 U.S.C. 1907(h)) is amended 
by striking ``1999 through 2003'' and inserting ``2006 through 2011''.

                 TITLE V--TRANSITION AND EFFECTIVE DATE

SEC. 501. TRANSITION PROVISIONS.

  The Secretary of Labor shall take such actions as the Secretary 
determines to be appropriate to provide for the orderly implementation 
of this Act.

SEC. 502. EFFECTIVE DATE.

  Except as otherwise provided in this Act, this Act and the amendments 
made by this Act, shall take effect on the date of enactment of this 
Act.

                                Purpose

    H.R. 27, the Job Training Improvement Act of 2005, enhances 
the workforce investment system created under the Workforce 
Investment Act of 1998 by strengthening One-Stop Career 
Centers, providing for more effective governance arrangements, 
promoting consumer choice, establishing a more targeted 
approach to serving youth, and improving performance 
accountability. The bill also improves our nation's adult 
education system using practices based on scientific research, 
and enhances vocational rehabilitation services for individuals 
with disabilities seeking to return to or enter the integrated 
workplace.

                            Committee Action


                             107TH CONGRESS

Subcommittee hearings

    On Tuesday, March 12, 2002, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington D.C. on ``Welfare to Work: Ties 
Between Temporary Assistance for Needy Families (TANF) and 
Workforce Development.'' The purpose of the hearing was to 
learn about the interaction between the TANF block grant and 
the workforce investment system created through the Workforce 
Investment Act (WIA). Sigurd Nilsen, Ph.D., Director of Health, 
Education, and Human Services Division, General Accounting 
Office (now known as the Government Accountability Office, 
GAO), Washington, D.C. testified before the Subcommittee about 
the GAO study regarding an increased coordination between the 
TANF programs and the One-Stop Centers. Mr. John B. O'Reilly, 
Jr., Executive Director, Southeast Michigan Community Alliance, 
Taylor, Michigan; Ms. Barbara Gault, Ph.D., Director of 
Research, Institute for Women's Policy Research, Washington, 
D.C.; Mr. Greg Gardner, Acting Director, Utah Department of 
Workforce Services, Salt Lake City, Utah; and Ms. Erika Kates, 
Ph.D., Executive Director, Welfare Education Training Access 
Coalition Center for Youth and Communities, Brandeis 
University, Boston, Massachusetts, also testified before the 
Committee.
    On Thursday, September 12, 2002, the Committee on Education 
and the Workforce, Subcommittee on 21st Century 
Competitiveness, held a hearing in Washington D.C. on the 
``Implementation of the Workforce Investment Act: Promising 
Practices in Workforce Development.'' The purpose of the 
hearing was to encourage and promote a seamless system that 
improves services to job seekers and employers. Testifying 
before the Subcommittee were Mr. Bruce Stenslie, Director, 
Ventura County Workforce Investment Board, Ventura, California; 
Ms. Diane D. Rath, Chair, Texas Workforce Commission, Austin, 
Texas; Mr. Danny Wegman, President, Wegmans Food Markets, 
Rochester, New York; and Mr. Timothy Barnicle, Co-Director, 
Workforce Development Program, National Center on Education and 
the Economy, Washington, D.C.

                             108TH CONGRESS

Subcommittee hearings

    On Tuesday, March 4, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C. on ``Improving Adult 
Education for the 21st Century.'' The purpose of the hearing 
was to learn about pertinent issues to be addressed in the 
reauthorization of the Adult Education and Family Literacy Act, 
Title II of the Workforce Investment Act. The Honorable Carol 
D'Amico, Assistant Secretary, U.S. Department of Education, 
Washington, D.C. testified before the Subcommittee on the first 
panel on methods to improve accountability for academic results 
while ensuring the flexibility necessary to help adult 
education participants receive the services they need. Dr. Beth 
Buelmann, Executive Director, Center for Workforce Preparation 
for the U.S. Chamber of Commerce, Washington, D.C.; Dr. Randy 
Whitfield, Associate Vice President of Academic and Student 
Services, North Carolina Community College System, Raleigh, 
North Carolina; Ms. Ann-Marie Panella, Director of Human 
Resources, MCS Industries, Inc., Easton, Pennsylvania; and, Ms. 
Hermelinda Morales Herrera, Adult Education Participant, 
Aurora, Colorado, testified before the Subcommittee on the 
second panel.
    On Tuesday, March 11, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington D.C. on ``Workforce Investment and 
Rehabilitation Acts: Improving Services and Empowering 
Individuals.'' The purpose of the hearing was to learn about 
methods to strengthen and improve current programs and results 
for both job seekers and employers. The Honorable Emily 
DeRocco, Assistant Secretary, U.S. Department of Labor, 
Washington, D.C., and the Honorable Robert Pasternack, 
Assistant Secretary, U.S. Department of Education, Washington, 
D.C., testified before the Subcommittee on the first panel 
about the potential benefits of streamlining programs and 
funding to better serve populations as well as the need to 
improve coordination between vocational rehabilitation services 
and WIA programs to better serve individuals with disabilities. 
Mr. Thomas J. White, President and CEO, Greater Durham Chamber 
of Commerce, Durham, North Carolina; Mr. Steven Savner, Senior 
Staff Attorney, Center for Law and Social Policy, Washington, 
D.C.; Mr. John Twomey, President, National Workforce 
Association, Washington, D.C.; and Ms. Bettie Shaw-Henderson, 
District Manager, Michigan Department of Vocational 
Rehabilitation, Grand Rapids, Michigan, testified before the 
Subcommittee on the second panel.

Full committee hearing

    On Wednesday, February 12, 2003, the Committee on Education 
and the Workforce held a hearing in Washington D.C. on ``Back 
to Work: The Administration's Plan for Economic Recovery and 
the Workforce Investment Act.'' The purpose of the hearing was 
to learn about the Administration's proposal to speed the 
country's economic recovery, a component of which included 
Personal Reemployment Accounts that provide assistance to help 
unemployed Americans who are struggling to return to work, and 
to learn about the Administration's proposal for the Workforce 
Investment Act reauthorization. The Honorable Elaine Chao, 
Secretary of Labor, Washington, D.C., testified before the 
Committee on the first panel. Mr. Kenneth Mayfield, President, 
National Association of Counties, Washington, D.C., and Dr. 
Lawrence Mishel, President, Economic Policy Institute, 
Washington, D.C. testified before the Committee on the second 
panel.
    On Tuesday, February 18, 2003, the Committee on Education 
and the Workforce held a field hearing in Las Vegas, Nevada on 
``H.R. 444, the Back to Work Incentive Act.'' The purpose of 
the hearing was to examine and discuss the Back to Work 
Incentive Act, which reflected the Administration's initial 
plan to create personal reemployment accounts to help 
unemployed individuals return to work quickly. Ms. Myla 
Florence, Director, Nevada Department of Employment, Training, 
and Rehabilitation, Carson City, Nevada; Mr. Ardell Galbreth, 
Deputy Board Manager, Southern Nevada Workforce Investment 
Board, Las Vegas, Nevada; Mr. Robert Brewer, Chair, Southern 
Nevada Workforce Investment Board, Las Vegas, Nevada; and, Ms. 
Debi Lindemenn, Employment Specialist Supervisor, Department of 
Employment, Training, and Rehabilitation, North Las Vegas, 
Nevada testified before the Committee at the field hearing.

Legislative action

    On March 13, 2003, 21st Century Competitiveness 
Subcommittee Chairman Howard P. ``Buck'' McKeon (R-CA) and 
Chairman John Boehner (R-OH) introduced H.R. 1261, the 
Workforce Reinvestment and Adult Education Act of 2003, a bill 
to amend the Workforce Investment Act of 1998 to provide for 
the nation's One-Stop workforce development system. The 
legislation also contains the Adult Basic Education Skills Act, 
which reauthorizes state programs for adult education, and 
reauthorizes the Rehabilitation Act of 1973, which provides 
services to help individuals with disabilities become 
employable and achieve full integration into society.
    On March 20, 2003, the Subcommittee on 21st Century 
Competitiveness considered H.R. 1261 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by a vote of 15-12. The 
Subcommittee accepted two amendments, including a substitute 
amendment offered by Subcommittee Chairman McKeon (R-CA).
    On March 27, 2003, the Committee on Education and the 
Workforce considered H.R. 1261 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a vote of 26-21. The Committee considered 19 
amendments and adopted nine amendments, including a substitute 
amendment offered by Subcommittee Chairman McKeon (R-CA).
    On May 8, 2003, the House of Representatives passed H.R. 
1261 by a vote of 220-204.
    On November 14, 2003, the Senate passed a substitute 
version of H.R. 1261 by unanimous consent.
    On June 3, 2004, the House of Representatives appointed 
conferees to resolve differences with the Senate on H.R. 1261.
    The Senate did not appoint conferees to resolve differences 
with the House on H.R. 1261.

                             109TH CONGRESS

Legislative action

    On January 4, 2005, 21st Century Competitiveness 
Subcommittee Chairman Howard P. ``Buck'' McKeon (R-CA) and 
Chairman John Boehner (R-OH) introduced H.R. 27, the Job 
Training Improvement Act of 2005, a bill to amend the Workforce 
Investment Act of 1998 to provide for the nation's One-Stop 
workforce development system. The legislation also contains the 
Adult Basic Education Skills Act, which reauthorizes state 
programs for adult education, and provisions reauthorizing the 
Rehabilitation Act of 1973, which provides services to help 
individuals with disabilities become employable and achieve 
full integration into society. Original cosponsors included 
Rep. Pat Tiberi (R-OH), Rep. Jon Porter (R-NV), and Rep. John 
Kline (R-MN). The bill is substantially the same as H.R. 1261, 
which was considered by the House in the 108th Congress.
    On February 9, 2005, the Subcommittee on 21st Century 
Competitiveness considered H.R. 27 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by a vote of 18-15. The 
Subcommittee considered 13 amendments and accepted the 
following amendments:
     The Subcommittee adopted, by voice vote, a 
substitute amendment offered by Subcommittee Chairman McKeon 
(R-CA). The amendment creates new authority within the 
demonstration section of the WIA to authorize the President's 
proposal for community-based job training grants; defines 
administrative costs; makes projects that focus on employment 
in advanced manufacturing allowable pilot projects; removes the 
calculation of program efficiency as a core indicator of 
performance; clarifies that in order to be eligible for WIA 
youth services, an out-of-school youth who has finished high 
school and has low basic skills must not be attending any 
school; allows services for youth during the school day if 
youth are participating in programs that have demonstrated 
effectiveness in high school youth achieving diplomas; 
reinstates the business and community liaison for Job Corps 
centers; and makes other technical and conforming changes to 
Titles I and II.
     The Subcommittee adopted, by voice vote, an en 
bloc amendment offered by Mr. Fortuno (R-PR) that requires 
states to describe in their plans how they will serve 
individuals with limited English proficiency and allows local 
areas to offer training that integrates occupational skills 
training with English language acquisition.
     The Subcommittee adopted, by voice vote, an 
amendment offered by Mr. Kind (D-WI) that allows the Secretary, 
through available demonstration funding, to award competitive 
grants to train real-time writers.
     The Subcommittee adopted, by voice vote, an 
amendment offered by Mr. Holt (D-NJ) that requires the 
Secretary to submit states' quarterly reports to the House 
Committee on Education and the Workforce and the Senate 
Committee on Health, Education, Labor and Pensions.
    On February 16 and 17, 2005, the Committee on Education and 
the Workforce considered H.R. 27 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a vote of 26-20. The Committee considered 20 
amendments and adopted the following 4 amendments:
     The Committee adopted, by voice vote, a substitute 
amendment offered by Subcommittee Chairman McKeon (R-CA). The 
substitute amendment authorizes $211 million for the WIA pilot 
and demonstration authority (of which $125 million could be 
used for the President's community-based job training grants) 
and also authorizes the Labor Secretary to use up to $125 
million more from WIA national reserve funds to fund the 
community-based job training grants; clarifies that community 
colleges are the only training providers eligible to 
participate in the community-based job training grants; allows 
governors to consider whether training providers allow 
participants to attain a certification, credential, or mastery 
as they develop their criteria for determining eligible 
providers of training; authorizes the American Indian 
Consortium to receive funds under the Client Assistance Program 
to provide protection and advocacy services to Native 
Americans; allows programs under the Protection and Advocacy of 
Individual Rights program to retain program income generated by 
the system for up to one additional year after it was 
generated; requires the state vocational rehabilitation agency 
to coordinate with the lead agencies established under the 
Assistive Technology Act of 1998, as amended; allows state 
vocational rehabilitation agencies to spend funds to support 
activities authorized under the Assistive Technology Act of 
1998, as amended; and makes other technical and conforming 
changes.
     The Committee adopted, by voice vote, an amendment 
offered by Rep. Drake (R-VA) to require state and local 
performance indicators to be adjusted based on the number of 
veterans with disabilities being served.
     The Committee adopted, by unanimous consent, an 
amendment offered by Rep. Andrews (D-NJ) to allow local areas 
to provide information regarding the availability of micro-
credit loans when providing entrepreneurship training.
     The Committee adopted, by unanimous consent, an 
amendment offered by Rep. Andrews (D-NJ) to allow the Secretary 
to award competitive grants to business partnerships, using 
pilot and demonstration funding.

                                Summary

    H.R. 27, the Job Training Improvement Act of 2005, 
reauthorizes and amends the Workforce Investment Act of 1998 
(WIA), which provides for the nation's One-Stop workforce 
development system. The legislation also contains the Adult 
Basic Education Skills Act, which reauthorizes state programs 
for adult education, and reauthorizes the Rehabilitation Act of 
1973, which provides services to assist individuals with 
disabilities become employable and achieve full integration 
into society. The bill extends the authorization of these 
programs, which expired on September 30, 2003, through fiscal 
year 2011.

                          WORKFORCE INVESTMENT

    H.R. 27 provides workforce investment services and programs 
through state and local One-Stop Career Center systems. The 
goals of the legislation are to provide (1) enhanced 
employment, retention, and earnings of individuals; (2) 
increased occupational skills attainment; and (3) improved 
national economic growth through increased productivity and 
competitiveness. The bill adds that it also is the purpose of 
WIA to provide workforce investment activities in a manner that 
promotes the informed choice of participants and actively 
involves participants in decisions affecting their 
participation.
    The bill streamlines current WIA funding in order to 
provide more efficient and results-oriented services and 
programs to strengthen the corresponding infrastructure, 
eliminate duplication, strengthen resource allocation, improve 
accountability, enhance the role of employers, and increase 
state and local flexibility. H.R. 27 provides enhanced 
improvements to the WIA system to effectively address the 
changing needs of both workers and employers and further 
address the needs of special populations by promoting a more 
productive workforce and youth development programs that are 
connected to the private sector, postsecondary education and 
training, social services, and economic development systems.

              STATE AND LOCAL WORKFORCE INVESTMENT BOARDS

    H.R. 27 strengthens the membership requirements and the 
role of the State Workforce Investment Boards. Required 
membership includes: (1) state agencies responsible for 
administering the One-Stop partner programs; (2) the state 
economic development agency; (3) business representatives; (4) 
local elected officials; (5) worker advocates; and (6) state 
legislators. The bill continues the current law requirement 
that a majority of the board represents business, and a member 
of the business community must chair the board. State boards 
will establish criteria for certification of One-Stop Career 
Centers for the purpose of awarding infrastructure funds. 
Furthermore, state boards will set policies and priorities 
affecting the integration of services at the One-Stop Career 
Center to increase support for partner usage and create a more 
coordinated approach to addressing the workforce needs of each 
community.
    Local Workforce Investment Board membership is streamlined 
to ensure greater responsiveness to local area needs by 
appropriately reflecting leading industry sectors and 
geographical areas and removing the requirement that One-Stop 
partner programs have a seat on the local boards. H.R. 27 
eliminates the requirement that each area have a Youth Council. 
Local boards will have the option of creating advisory 
committees, including a Youth Council, comprised of One-Stop 
partners and other key parties to provide advice on operational 
issues. State and local area requirements to submit strategic 
plans are reduced from five to two years to reflect better 
economic conditions or state/local priorities.

                     ONE-STOP CAREER CENTER SYSTEM

    The bill streamlines the operational cost of the One-Stop 
system through One-Stop infrastructure funding to alleviate 
current local negotiation issues. Each mandatory partner 
program will contribute a portion of its funding, which will be 
determined by the governor in consultation with the state 
board, toward One-Stop infrastructure funding. In addition, the 
state board will establish criteria for and issue 
certifications of One-Stop Career Centers to ensure appropriate 
integration of services and consistency across states. Only 
certified centers are eligible for infrastructure grants.

                   COMPREHENSIVE SERVICES FOR ADULTS

    H.R. 27 combines the funding streams of the WIA Adult, WIA 
Dislocated Worker and Wagner-Peyser programs into one funding 
structure to reduce current duplication and inefficiency. H.R. 
27 authorizes this program at $3.14 billion for fiscal year 
2006 and such sums as necessary for fiscal years 2007 through 
2011. The bill reserves 10 percent of the funds for the 
Secretary for national activities. A new formula is instituted, 
but the bill holds states harmless against what they would have 
received under the current law formulas for the three separate 
programs. Fifty percent of the funds are allocated to the local 
areas and 50 percent is retained by states. Of the state 
portion, 50 percent is required to go to the local areas for 
the delivery of core services, which can include the provision 
of state staff to provide the services. In addition, the bill 
defines ``accrued expenditures'' and bases the re-allotment of 
funds among states and the redistribution of funds within 
states on expenditures, minus accrued expenditures, rather than 
obligations to effectively redistribute unspent, available 
funds among areas with greater needs.
    H.R. 27 also provides greater flexibility in the delivery 
of services. Individuals are no longer required to spend a 
specific amount of time in one tier of service. Individuals are 
now able to receive the services that are most appropriate for 
their needs. A priority is placed on unemployed workers, and if 
funds are determined by a state to be limited, a second-tier 
priority is placed on low-income individuals. In addition, the 
bill gives states the authority to determine the standards, 
information, and data required for eligible training providers 
to offer services to individuals. Such criteria must comply 
with the Family Educational Rights and Privacy Act (FERPA). In 
addition, states will address the needs of individuals with 
barriers to employment, including individuals with 
disabilities.
    The bill allows faith-based providers to engage fully as 
service providers in the One-Stop Career Centers without 
relinquishing their religious identities by restoring the civil 
liberties these organizations already enjoy under Title VII of 
the Civil Rights Act, including the right to hire on a 
religious basis.
    The bill allows demonstration and pilot project funding 
under WIA to be used by states and local boards to offer 
personal reemployment accounts (PRAs) of up to $3,000 to help 
unemployed individuals return to work. With the funds from 
these accounts, unemployed workers may purchase a variety of 
employment-related services, such as training, child care, 
transportation, career counseling, relocation services, and 
more, to help them find a new job and reenter the workforce. 
Workers who become reemployed within 13 weeks keep the balance 
of the account as a reemployment bonus.
    H.R. 27 strengthens the role of community colleges that 
provide job training services to Americans striving to get a 
new or better job. The bill authorizes a community-based job 
training demonstration program to enhance partnerships among 
high-growth, high demand industries, community colleges, and 
the local workforce investment system.

                          PERFORMANCE MEASURES

    H.R. 27 reduces the number of required performance measures 
from seventeen to six, three for adult outcomes and three for 
youth outcomes, to effectively evaluate the system. As provided 
under current law, the performance indicators are negotiated 
between each state and the Department of Labor. State-specific 
performance targets shall reflect appropriate economic and 
demographic factors of the population served so as not to 
create a disincentive to serve hard-to-serve populations. 
Governors have the authority to add additional measures for use 
within their state.

                             YOUTH PROGRAM

    H.R. 27 authorizes the youth program at $1.25 billion for 
fiscal year 2006. The Secretary may reserve 25 percent of the 
funds, up to $250 million, to provide Youth Challenge Grants. 
The remaining funds are distributed to states and local 
workforce investment boards to operate youth programs. Of these 
funds, states and local areas must spend at least 70 percent of 
the funds on out-of-school youth. Such youth currently are 
underserved and face significant challenges to post-secondary 
activities. States and local areas may use up to 30 percent of 
youth funds to serve in-school youth during non-school hours.

                      ADULT EDUCATION AND LITERACY

    Title II of H.R. 27 maintains the structure and purpose of 
the 1998 consolidation of adult education programs as reflected 
in P.L. 105-220. The funding formula remains the same, however 
accountability measures have been strengthened, and faith-based 
providers are allowed to compete to be local providers of adult 
education services. Because of the increasing number of 
individuals needing basic skills education in reading, writing, 
English language acquisition, and math, there is more focus on 
providing courses in these areas. Programs offered by local 
providers should include a sequence of rigorous, academic 
courses and activities leading to proficiency in the basic 
skills and family literacy. The mission of the National 
Institute for Literacy is to include all levels of instruction 
in reading for children, youth and adults, improving the 
management structure by streamlining the decision making 
process, and aligning the activities with the objectives of the 
No Child Left Behind Act in areas of reading instruction and 
scientifically based research.

                       VOCATIONAL REHABILITATION

    H.R. 27 contains the vocational rehabilitation state grants 
program, which is the primary federal program to assist 
individuals with disabilities prepare for, obtain, and retain 
employment in order to achieve full integration into society. 
The bill reauthorizes through fiscal year 2011 a variety of 
vocational rehabilitation services, research, training, and 
advocacy programs designed to assist individuals with 
disabilities obtain employment. H.R. 27 also includes 
transition improvements, state plan strategies used to address 
the needs identified in an assessment of transition services, 
and coordination with the Individuals with Disabilities 
Education Act (IDEA) services, including authorizing the use of 
alternative means of communication when participating in 
meetings under IDEA. Once annual appropriations exceed $100 
million over the fiscal year 2004 funding level, the bill 
requires states to reserve a portion of their formula grant 
funds to provide transition services to students with 
disabilities served under IDEA as they prepare to move out of 
school to postsecondary education, employment, or independent 
living.
    The bill also reauthorizes the Helen Keller National Center 
Act through fiscal year 2011.

                             EFFECTIVE DATE

    The Job Training Improvement Act of 2005 shall be effective 
immediately upon enactment.

                            Committee Views


          TITLE I--AMENDMENTS TO THE WORKFORCE INVESTMENT ACT

    The Job Training Improvement Act of 2005 builds upon the 
historic Workforce Investment Act (WIA). In 1998, under this 
Committee's leadership, Congress passed WIA to reform the 
nation's job training system that formerly was fragmented, 
contained overlapping programs, and did not serve either job 
seekers or employers well. WIA consolidated and integrated 
employment and training services at the local level in a more 
unified workforce development system.
    The WIA system contains the federal government's primary 
programs for investment in our nation's workforce preparation. 
Even though the system is still maturing since its full 
implementation in July 2000, states and local areas have 
created effective one-stop delivery systems.
    During program year 2003, which ended June 30, 2004, 1.1 
million people were assisted through WIA funds. (This figure 
captures only those individuals who receive intensive or 
training services. Millions of additional individuals accessed 
self-service job listings and placement assistance through core 
services available in the one-stop centers.) Nationally, states 
and localities met or exceeded negotiated performance levels 
for 15 of 17 required performance indicators. Of the adults 
served, who are mostly low-income individuals, 74.3 percent 
achieved employment. Of these individuals, 84.5 percent 
retained employment after six months. Overall, 82 percent of 
dislocated workers gained employment and 90.2 percent of these 
individuals retained employment after six months. In addition, 
62.2 percent of youth attained diplomas, up from 54 percent in 
2001.
    Strengthening and improving programs that help Americans 
get back to work is essential in this time of economic growth. 
Since August 2003, the U.S. economy has added 2.7 million jobs. 
As of January 2005, the unemployment rate is 5.2 percent, which 
is the lowest level in three years and lower than the average 
unemployment rate during the 1970s, 1980s, and 1990s. However, 
even during this time of dramatic growth, many individuals need 
training to find new or better jobs in our knowledge-based 
economy. We know that the majority of jobs and career fields 
require at least some postsecondary education and training to 
succeed. H.R. 27 aims tostrengthen opportunities for 
individuals to get the training they need to acquire employment in 
high-growth, high-demand occupations.
    This legislation builds upon and improves the innovative 
system created in WIA. The Committee believes it is essential 
that Congress remove barriers in current law that hamper 
Americans in their efforts to take full advantage of the 
assistance WIA offers.
    Locally elected officials, who are accountable for 
implementation at the local level, support H.R. 27. Larry E. 
Naake, Executive Director of the National Association of 
Counties, wrote Subcommittee Chairman McKeon on January 19, 
2005 to express the Association's support:

          NACo is very pleased to offer support of H.R. 27, the 
        Job Training Improvement Act of 2005 * * * America's 
        counties believe that you and members of the Committee 
        have crafted a bill that is fair, balanced and designed 
        to add in the further development and improvement of 
        the nation's job training, one stop and workforce 
        development system. As you know, enactment of the 
        Workforce Investment Act reauthorization legislation is 
        extremely important at this pivotal time in our 
        nation's economic recovery. The United States 
        prosperity and long-term economic security depend in 
        large part on a highly skilled workforce. Meeting the 
        ever-increasing needs of America's workers and 
        employers is crucial to U.S. Competitiveness, both 
        today and in the future.

Purpose

    The Committee believes that all individuals should be able 
to participate actively in the decisions that will affect his 
or her employment and training choices. Therefore, the 
Committee has added that it is also the purpose of WIA ``to 
provide workforce investment activities in a manner that 
promotes the informed choice of participants and actively 
involves participants in decisions affecting their 
participation in such activities.''

State workforce investment boards

    The bill amends the membership requirements and required 
functions of state workforce investment boards. To better focus 
the state board on statewide labor market and economic issues, 
H.R. 27 streamlines membership requirements. Members include 
the state agencies responsible for administering the one-stop 
partner programs; the state economic development agency; 
business representatives; labor representatives; chief local 
elected officials; and, state legislators. As under current 
law, governors would retain the right to expand board 
membership. In addition, the Committee has maintained the 
requirements that a majority of board members be business 
representatives and the chairperson of the board be a business 
representative in order to emphasize the importance of the role 
of business in the system.
    The Committee notes that, while strategic planning and 
delivery of services most appropriately belongs with the local 
delivery system, the one-stop delivery system created through 
WIA would be improved with greater continuity of services 
within states. As a result, H.R. 27 includes new functions for 
the state board regarding statewide policies for the one-stop 
career center system. These include the development of criteria 
for and issuance of certifications of one-stop centers, 
allocation of one-stop infrastructure funding, and approaches 
to facilitating equitable and efficient cost allocation in the 
one-stop delivery system. The establishment of state-level 
criteria for one-stop centers should lead to more consistent 
and better performance within states. In addition, through the 
functions of the state board, the state-level administrators of 
the one-stop partner programs will have greater involvement in 
setting policies regarding the integration of services within 
the one-stop centers. The Committee asserts that new role 
should result in their increased participation in the one-stop 
system.
    H.R. 27 eliminates the grandfathering provisions that give 
authority for states to use entities that were in existence 
prior to the enactment of WIA in place of state workforce 
investment boards. The Committee notes that the state boards 
are an important component of the reforms underlying WIA, and 
this change is intended to ensure state boards, with their 
enhanced functions, are established. Without enforcing the new 
board membership, one-stop partner programs may not have 
appropriate involvement in the workforce development system. 
The bill also allows the state board to hire staff to assist in 
carrying out its functions.
    H.R. 27 also revises the WIA planning cycle to require that 
state plans be submitted every two years instead of every five 
years. This is intended to ensure that the state plans are 
dynamic documents that are regularly updated to reflect 
changing economic situations and reflect state and local 
priorities. The Committee believes that this change will not 
create an undo burden on states because the submission of a new 
plan simply requires the review and updating of the previous 
plan if significant changes are not warranted.
    The Committee wants to ensure that the workforce 
development needs of certain populations are addressed. 
Therefore, H.R. 27 adds additional groups to those for which 
the states already must include a description in their state 
plans of how the states will address their needs. The new 
groups are individuals with limited English proficiency; 
homeless individuals; ex-offenders; and displaced farmers, 
ranchers and fishermen. Added emphasis is placed on serving 
individuals with disabilities by requiring states to assure 
that services for such individuals are consistent with 
President Bush's Executive Order 13217, which promotes 
community-based alternatives for assisting individuals with 
disabilities.
    The Committee recognizes the obligation that states and 
local agencies have in providing services to individuals with 
disabilities in a manner consistent with the requirements of 
civil rights laws, such as the Americans with Disabilities Act 
and sections 504 and 508 of the Rehabilitation Act of 1973. 
These laws are crucial to protecting the rights of individuals 
with disabilities to participate fully in society. In H.R. 27, 
the Committee reaffirms this obligation by including 
requirements for state plans and local plans to ensure that the 
rights of individuals with disabilities are protected, and to 
ensure that reasonable accommodations are provided so that 
individuals with disabilities can fully participate in the 
programs and services supported under this Act, and not just 
physically access them. The Committee expects the Department of 
Labor to carefully review state plans, and states to review 
local plans. The Committee also expects the Department of Labor 
to improve enforcement of existing federal statutes that 
protect the rights of individuals with disabilities. The 
Committee believes the Department's role in enforcing theselaws 
extends beyond just physical access to one stop centers and services 
and must increase its focus on ensuring that individuals with 
disabilities are afforded reasonable accommodations in accessing and 
benefiting from these programs and services.
    In addition, the states must address in their plans the 
methodology they will use for determining one-stop partner 
programs' contributions to one-stop infrastructure funding. The 
issue of infrastructure is discussed in more detail later in 
the report.
    The Committee seeks to make the entire workforce investment 
system more demand-driven and responsive to the needs of 
employers. By doing so, the workforce system will train workers 
for available jobs in growing sectors of the economy or those 
that are being transformed by technology or other innovations. 
Therefore, H.R. 27 requires states to include in their plans a 
description of any programs and strategies that the states will 
utilize to meet the needs of businesses in the states, 
including small businesses. These could include providing 
incentives and technical assistance to assist local areas in 
engaging employers in local workforce development activities.

Local workforce investment boards

    Currently, a unit of local government with a population of 
500,000 or more, or an area served by a rural concentrated 
employment program grant recipient, receives an automatic 
designation as a local workforce investment area, if so 
desired. H.R. 27 retains this requirement but limits the 
duration of such designation to each two-year planning cycle 
and provides that continued automatic designation may be denied 
if the local area did not perform successfully during the 
preceding two-year period. The bill retains other provisions 
regarding the designation of local areas so as not to disrupt 
the operations of local areas.
    Current law also permits states to require regional 
planning and cooperation among local areas that serve a single 
labor market area, economic development region, or other 
appropriate contiguous sub-area of a state. H.R. 27 enhances 
this authority by allowing states to require a regional plan 
from such local areas in lieu of separate local plans.
    The Committee acknowledges that the large size of the local 
workforce investment boards under current law have been 
unwieldy, making strategic decisions more difficult and 
deterring the participation of business representatives, in 
particular. The General Accounting Office, now known as the 
Government Accountability Office (GAO), in its October 2001 
report entitled ``Workforce Investment Act: Better Guidance 
Needed to Address Concerns Over New Requirements,'' observed:

          Private-sector representatives we spoke with are 
        frustrated with the operations of the workforce 
        investment boards under WIA, believing that the boards 
        are too large to effectively address their concerns * * 
        * We were told that the size of the boards makes it 
        difficult to recruit the necessary private-sector board 
        members for several reasons * * * because private-
        sector representatives must make up the majority of 
        board membership, the larger the board, the greater the 
        requirement for private-sector members, which increases 
        the difficulty of recruiting the requisite number of 
        private-sector members.

    The Committee believes that streamlined local board 
membership will provide greater representation and influence by 
local business representatives, education officials 
(particularly community colleges), community groups, and 
representatives of employees who frequently are frustrated that 
they are not able to connect with or access resources from the 
local boards.
    To facilitate a more manageable board size, the requirement 
that each of the one-stop partner programs have a seat on the 
board is eliminated. The partners would retain significant 
opportunities to affect local policy, including as a part to 
the local memoranda of understanding (MOU) establishing one-
stop arrangements. In addition, the partner programs have new 
authority as members of the state boards. The bill also permits 
the creation of specialized advisory councils as necessary, 
such as a council of one-stop partners.
    Local leaders support the changes to the local workforce 
investment boards. In a letter to Subcommittee Chairman McKeon 
regarding the bill considered last Congress, dated March 20, 
2003, Stephanie Powers, Chief Executive Officer of the National 
Association of Workforce Boards (which represents the nation's 
local business-led boards), said, ``We support the changes you 
have proposed in H.R. 1261 for local WIBs (workforce investment 
boards), especially the emphasis on private sector leadership 
and increased local flexibility regarding size and 
membership.'' H.R. 27 includes the same changes.
    To increase the effectiveness of the local boards further, 
the bill provides additional guidance on the type of 
representatives from business (including representatives from 
leading industries and large and small businesses), education 
(including the local secondary school superintendents and 
presidents or chief executive officers of postsecondary 
education institutions), adult education providers that are not 
representing a mandatory partner, and community-based 
organizations (including faith-based organizations) that are to 
be appointed. In addition, board members must represent diverse 
geographic sections within each local area.
    Current law requires each local area to have a youth 
council to advise the local board on activities related to 
youth. The Committee understands that these councils have been 
ineffective in some areas and burdensome to create and operate. 
Maintaining participation by parents, youth, educators, and 
other groups has proven difficult. However, local areas should 
have the option to create such councils if they add value and 
benefit services to youth in the area. Therefore, H.R. 27 
eliminates the requirement that local boards establish a youth 
council component, but permits a local board to maintain a 
youth council if it chooses.
    Under WIA, states were given authority to use entities that 
were in existence prior to the enactment of WIA in place of 
local boards. This grandfathering provision is eliminated to 
ensure that the most effective local boards are in place. 
Further, the local workforce investment planning cycle is 
reduced from five years to two years to be consistent with the 
state planning cycle and to promote using the plan to address 
changing economic circumstances and priorities.
    Just as states are required to describe in their plans how 
they will address the needs of individuals with disabilities 
consistent with civil rights laws, local areas also must 
provide services to individuals with disabilities in a manner 
consistent with the requirements of civil rights laws, such as 
the Americans with Disabilities Act and sections 504 and 508 of 
the Rehabilitation Act of 1973. To that end, the bill includes 
the same requirement for local plans as for state plans.
    The Committee recognizes that the economy is dynamic and 
the types of growing industries are changing. Many new jobs are 
in technology-based industries and services industries, such as 
health care, retail, construction, advanced manufacturing, 
information technology (IT), geospatial technology, and 
biotechnology, just to name a few. In order to ensure that the 
local workforce investment activities remain demand-driven and 
responsive to changing employer needs, the local areas must 
include in their plans a description of the strategies and 
services that will be initiated in the local area to engage 
employers, including small employers, in workforce development 
activities. Some local areas successfully have initiated 
employer-focused efforts such as sectoral training, career 
ladder programs, utilization of business intermediaries, and 
coordination with economic development activities. Numerous 
other strategies could help local areas ensure that the one-
stop system contributes to the economic growth of local areas. 
The Committee encourages local areas to continue such outreach 
to employers.
    In recognition of the growing importance of the Information 
Technology (IT) industry, the Committee believes greater 
involvement of IT industry representatives is needed on the 
local and state workforce investment boards. Although there 
remains significant demand for certified IT workers in many 
parts of the country, many workforce investment boards have 
failed to adequately address the needs of the IT industry and 
the need for IT skilled workers by employers in industries 
across the board. There needs to be greater awareness within 
workforce investment boards on the importance of investing 
training funds in IT-training. Once a determination is made for 
the need for IT skilled workers, matches can be made between 
workers selecting IT training, or dislocated IT workers, and 
employers.

One-stop delivery system

    One of the hallmarks of WIA is that, in order to encourage 
the development of comprehensive efforts that improve services 
to both employers and job seekers, local services are provided 
through a one-stop delivery system. The one-stop delivery 
system is a methodology for service delivery. It is an effort 
to increase access to federal and state resources available to 
help individuals obtain training of their choice. While the WIA 
funding streams are available for occupational training, there 
are numerous other federal programs that provide employment and 
training services. WIA created One-Stop Career Centers to 
provide a single point of access for individuals desiring 
services through these programs.
    Currently, 17 federal programs operate as mandatory partner 
programs within the one-stop delivery system. In addition to 
the programs authorized under WIA, the programs include 
vocational education, veterans' employment and training 
programs, welfare-to-work, employment services, vocational 
rehabilitation, trade adjustment assistance, and adult 
education, just to name a few. These programs must make their 
services available through the one-stop centers. In addition, 
optional partner programs may provide their services through 
the system if the local board and the chief elected official 
for the area permit the inclusion and the partner program 
agrees to such participation.
    The Committee believes that mandatory partnership creates 
benefits for the partner programs, in addition to improving 
service delivery for consumers. For example, Dr. Robert 
Pasternack, Assistant Secretary for Special Education and 
Rehabilitative Services at the Department of Education, 
testified before the 21st Century Competitiveness Subcommittee 
on March 11, 2003 regarding the value of including state 
vocational rehabilitation programs as a mandatory partner in 
the one-stop delivery system:

          As partners in the one-stop center, State VR programs 
        have contributed significantly to the enhancement of 
        the one-stop system and the expansion of its 
        capabilities. State VR agencies provide expertise 
        relating to the needs of people with disabilities in 
        many of the local workforce areas. Participation of VR 
        agencies has also been instrumental in creating an 
        awareness of its consumer population among other 
        partners * * * Our partnership in WIA allows greater 
        access to the traditional employment and training 
        resource of one-stop centers for those individuals with 
        less significant disabilities who might otherwise be 
        forced to wait for services, or not receive any 
        services. The VR program has also benefited from closer 
        coordination and collaboration among related workforce 
        programs and services and from increased exposure to an 
        array of additional service providers and resources 
        (such as the Individual Training Accounts).

    The bill makes the Temporary Assistance for Needy Families 
(TANF) program a mandatory partner program within the one-stop 
centers. However, a governor may opt-out of this requirement if 
the governor notifies the Secretaries of Labor and Health and 
Human Services in writing of a determination by the governor 
not to include the program as a required partner. The Committee 
strongly encourages states to include TANF in the one-stop 
delivery system. In many states, the TANF system and the 
workforce development systems are overseen by different 
entities at the state and local levels. Yet, both operate work 
programs. The Committee believes that operating TANF in 
conjunction with the one-stop system will reduce the stigma 
associated with accessing welfare services and should increase 
TANF clients' exposure to employers who utilize the one-stop 
centers to find new workers. In addition, it would encourage a 
continuum of services for low-income families that may become 
unemployed after leaving welfare, or may need additional 
training to move up the career ladder. Creating a formal 
connection to the WIA system would ensure TANF clients have 
access to labor market information and job listings maintained 
at the One-Stops and should enhance connections to the business 
community. It also could eliminate some duplication at the 
state level.
    The bill removes from the mandatory partner list the 
welfare-to-work program authorized under Section 403 of the 
Social Security Act because the program has expired and funding 
was rescinded.
    H.R. 27 includes additional optional partner programs, 
which are child support enforcement programs, employment and 
training programs operated by the Small BusinessAdministration, 
employment and training services provided by public libraries, and 
programs serving individuals with disabilities. The addition of these 
programs will enhance opportunities to coordinate employment and 
training services, particularly for special populations.
    Under H.R. 27, the current provisions regarding the 
establishment of one-stop delivery systems is moved from 
Chapter 5 (Comprehensive Adult Employment and Training 
Activities) to Chapter 3 (Workforce Investment Activities 
Providers) so as to reinforce the creation of a one-stop 
delivery system that is independent of WIA employment and 
training funds. Incorporating these provisions in the general 
one-stop delivery system chapter is intended to clarify the 
requirements applicable to the one-stop delivery system.
    As previously stated in the description of the state 
boards' functions, the one-stop centers across states have not 
provided consistent services to consumers, both job seekers and 
employers. Therefore, H.R. 27 provides that the state board is 
to establish procedures and criteria for certifying one-stop 
centers and to issue certifications based on those procedures 
and criteria. The criteria are to include state-developed 
minimum standards relating to the scope and degree of service 
integration achieved by the centers involving the programs 
provided by the one-stop partners. The effect of certification 
would be to make one-stop centers eligible for infrastructure 
grants. The intent of the certification process is to promote 
consistency and quality in the services provided by one-stop 
centers in a state. No one-stop is required to obtain 
certification, and local boards retain authority over the 
identification of one-stop operators.
    Under current law, one stop centers must provide access to 
the programs and activities carried out by the partner 
programs. In addition, each partner must make available to 
clients the core services that are applicable to their program. 
There must be at least one comprehensive one-stop center in 
each local area, which can be supplemented through a network of 
affiliated sites if the mandatory partners do not fully co-
locate. One-stop partner programs are required to contribute a 
portion of their funds for the operation of the one-stop 
delivery system. The appropriate portion is to be determined 
through the MOU development process at the local level. 
However, this process has resulted in uncertainty of funding 
and contention among program operators and has forced the WIA 
funding streams to pay for a large share of infrastructure 
costs, thus reducing the funds available for training. This 
concern was highlighted by Bruce Stenslie, Director of the 
Ventura County, CA, Workforce Investment Board who testified 
before the 21st Century Competitiveness Subcommittee on 
September 12, 2002, when he said, ``Currently, local Boards and 
administrators have little to no leverage to require local 
participation, and few incentives to offer those who do engage. 
The result of this non-participation is that WIA dollars pay an 
extraordinary share of One-Stop infrastructure costs for core 
services, leaving little revenue for training.''
    In order to provide a stable source of infrastructure 
funding on a statewide basis, H.R. 27 provides that each of the 
one-stop partner programs shall provide a portion of program 
funds to the governor, who then will allocate such funds to the 
local areas for the certified one-stop centers in the state. 
The portion of funds to be provided by each one-stop partner 
will be determined by the governor in consultation with the 
state board. Therefore, the directors of each mandatory partner 
program will have input into the appropriate amount to 
contribute. The Committee believes the decision on the amount 
of such funding is best determined within each state depending 
on each state's needs and delivery systems and arbitrary limits 
or floors should not be established at the federal level.
    When determining the amount of contribution from each 
program, the governor must consider the proportionate use of 
the one-stop centers by the programs and costs of 
administration for the programs not related to one-stop 
centers. The infrastructure funding must come from the 
programs' administrative funds and are subject to the programs' 
administrative cost limits. All mandatory partner programs, 
except vocational rehabilitation and unemployment insurance, 
have administrative caps that either are established in statute 
or are negotiated as part of a grant. For instance, vocational 
education currently has a five percent administrative cap, and 
veterans programs' administrative limits are negotiated as part 
of the grant. For federal mandatory spending programs, which 
include TANF and vocational rehabilitation services, the 
programs' contributions cannot be in excess of their 
proportionate use of the centers. The Native American program, 
authorized under WIA, is excluded from this requirement because 
the tribes operating these programs are sovereign and the 
governors should not have authority over programs not operated 
by states. Native American programs will continue to determine 
their contribution to the costs of infrastructure through the 
development of MOUs. The Committee expects the portion of the 
funds provided by remaining mandatory partners for 
infrastructure costs will be a very small percentage of the 
programs' funds, proportionate to the programs' contribution to 
and use of the one-stop system.
    The governor shall distribute the funds to certified one-
stop centers based on a formula that the state board will 
develop. The formula shall include such factors as the state 
determines are appropriate, which may include the number of 
certified centers in a local area, the population served by 
such centers, and the centers' performance.
    While the infrastructure funding provided through these 
grants will address the primary common costs of operating one-
stop centers, some common costs that would not be covered by 
these funds would remain. Thus, partner programs and the local 
boards would continue to develop MOUs to specify how such costs 
would be paid. Remaining common costs include personnel and the 
costs of providing the core services that are applicable to 
participants for each program. Since the basic infrastructure 
costs would already be addressed, these remaining cost items 
should be easier to resolve.

Providers of training services

    H.R. 27 significantly changes the requirements relating to 
the certification of eligible providers of training services. 
WIA created an eligible training provider list to allow 
customers flexibility in selecting a provider that meets their 
individual training needs. (Under the law preceding WIA, the 
Job Training Partnership Act, training participants could only 
receive services through contracted providers.) However, 
current eligible training provider provisions include 
requirements that have proven to be overly burdensome with 
respect to the specific information required and the scope of 
the reporting (i.e. reporting performance outcomes for all 
students in a training program and not just WIA-funded 
students). Rather than increasing consumer choice as intended, 
the current requirements have had the unintended effect 
ofreducing customer choice, as many qualified providers choose not to 
participate in the system. Community colleges, in particular, have 
chosen in many areas not to participate in the system.
    H.R. 27 gives states the authority to determine what 
provider information and data will be required to establish a 
list of eligible training providers. This will allow for 
flexibility to design procedures that respond to the needs of 
each state. To ensure the quality of providers, states must 
establish criteria including the performance of providers with 
respect to WIA's performance indicators. A state may include 
other factors appropriate to ensure the quality of services and 
the accountability of providers, including whether providers of 
training allow participants to attain a certification, 
credential, or mastery. In addition, the state shall require 
that the provider submit appropriate information to assist 
consumers in selecting a training program. Such state-developed 
criteria will be developed with the input of local areas and 
training providers.
    The intent is to ensure the retention of key elements 
promoting consumer choice and provider accountability while 
allowing states to simplify the process so that more qualified 
training providers will participate.
    The Committee encourages states to examine whether 
providers of training offer the opportunity to obtain an 
industry-developed and maintained certification or credential. 
The Committee recognizes that such certifications or 
credentials may allow states to validate the training that 
providers offer, and the attainment of a certification or 
credential may increase individuals' ability to find good jobs 
that utilize such training.
    The Committee remains committed to protecting the 
confidentiality of all personally identifiable information 
about students, and believes such information must not be 
released without permission of the students or their parents, 
as appropriate. Therefore, H.R. 27 specifies that the new 
training provider eligibility criteria must comply with the 
Family Educational Rights and Privacy Act (FERPA).
    Certified apprenticeship programs are automatically 
qualified to serve as training providers. In addition, H.R. 27 
retains language from current law that allows governors to 
create separate requirements for providers of on-the-job 
training or customized training, since these generally are 
tailored specifically to one employer or occupational field.
    Current law requires local areas to determine eligible 
providers of youth services using a competitive process. The 
Committee notes that this has proven overly prescriptive and 
difficult in areas with few providers, particularly rural 
areas. Therefore, the bill allows a local board to award grants 
or contracts on a sole source basis if the board determines 
that there are insufficient numbers of eligible providers in a 
local area for grants to be awarded on a competitive basis.

Youth activities

    H.R. 27 refocuses the current youth development program 
under Chapter 4 of WIA by targeting activities to out-of-school 
youth. These youth are currently underserved and face 
significant challenges to successful employment. No other 
federal funding stream that is operated through states and 
local areas is dedicated toward addressing the needs of the 
out-of-school youth population.
    However, there are numerous programs that serve in-school 
youth, largely through the Department of Education. These 
include: Title I grants to improve education for the 
disadvantaged, Reading First, Neglected and Delinquent grants 
to local educational agencies, Safe and Drug Free state grants, 
bilingual education instructional services, dropout prevention, 
special education grants to states through the Individuals with 
Disabilities Education Act, vocational education, and tech prep 
education.
    H.R. 27 revises the allotment of funds to the states for 
youth programs. The Secretary will reserve 25 percent of the 
appropriation for any fiscal year (up to a maximum amount of 
$250 million) to provide Youth Challenge Grants. These new 
grants will replace the expired Youth Opportunity Grant 
program. The bill authorizes $1.25 billion for the youth 
program, which will ensure stable funding for the state and 
local youth program while also providing funds for the Youth 
Challenge Grants.
    Of the remaining 75 percent of the appropriated funds, 
current law reservations of funds for youth activities in 
outlying areas and Native American programs would be retained. 
The bill clarifies that the Republic of Palau shall receive 
funding only until such time as Palau enters into an agreement 
for extension of United States educational assistance under the 
Compact of Free Association, just as the Federated States of 
Micronesia and the Republic of the Marshall Islands already 
have.
    The Committee recognizes that under current law, the 
formula for distribution of funds to states for youth 
activities is based on factors that do not reflect the number 
of at-risk youth in states. Two-thirds of the allocation is 
based on the relative number of unemployed individuals in the 
state and the relative number of excess unemployed individuals 
in the state, only one-third is based on the relative number of 
disadvantaged youth in the state. However, altering the 
methodology for distribution of funds to states could produce 
significant funding changes and result in program disruption. 
Therefore, H.R. 27 keeps the current formula but institutes a 
new formula to distribute any funds appropriated above the 
amount provided in fiscal year 2005. This amount will be 
allotted to states on the basis of three factors: 33\1/3\ 
percent on the relative number of individuals in the civilian 
labor force who are ages 16-19 in the state; 33\1/3\ percent on 
the relative number of unemployed individuals in the state; and 
33\1/3\ on the relative number of disadvantaged youth who are 
ages 16-21 in the state. The formula for new funds would target 
funds based on the youth population that is to be served by the 
amended program.
    No state may receive an allotment that is less than 90 
percent of the allotment percentage of the state for the 
preceding fiscal year (as under current law), nor can a state 
receive an allotment that is more than 130 percent of the 
allotment percentage of the state for the previous fiscal year 
(which is new). The Committee intends these stop-loss and stop-
gain measures to promote funding stability and enhance 
planning. In addition, the bill contains a small-state minimum 
of at least \3/10\ of one percent of the amount available for 
allotment to the states to ensure that all states have 
sufficient resources to administer a viable program.
    States are permitted to retain up to 10 percent of the 
youth funds for statewide activities (down from 15 percent 
under current law) to ensure that more funds are distributed by 
formula to local areas. Eighty percent of the remaining funds 
will be distributed to local areas based on the relative number 
of individuals in the civilian labor force who are ages 16-19 
in each local area, the relative number of unemployed 
individuals in each local area, and the relative number of 
disadvantaged youth who are ages 16-21 in each local area. The 
remaining 20 percent of the funds will be allocated using a 
formula determined by the governor in consultation with the 
state board and local boards. The formula is to reflect 
appropriate demographic and economic factors. The discretionary 
distribution will allow the states to address state-specific 
issues.
    H.R. 27 establishes new eligibility criteria for the 
revised youth program. These criteria target services to out-
of-school youth. The age for eligibility is changed from 14-21 
years old to 16-24 years old. The exclusion of 14 and 15 year 
olds reflects a shift to focus on serving out-of-school youth. 
The maximum age is increased to allow greater coordination with 
other federal programs in which the maximum age is 24, which 
include YouthBuild and Job Corps. To be eligible, youths must 
be one or more of the following: school dropouts; recipients of 
a secondary diploma, General Educational Development credential 
(GED), or other state-recognized equivalent (including 
recognized alternative standards for individuals with 
disabilities), but who are basic skills deficient and not 
attending school; court-involved youth attending an alternative 
school; or youth in or formerly in foster care. Priority in the 
provision of services would be given to school dropouts.
    While the primary focus will be on serving out-of-school 
youth, the Committee recognizes that low-income, at-risk in-
school youth can be served effectively with WIA funds, largely 
through summer employment programs and dropout prevention 
programs. Therefore, H.R. 27 allows state and local areas to 
continue to use up to 30 percent of their youth funds to serve 
in-school youth if they choose. Services may be provided on 
school grounds, as appropriate, but only during non-school 
hours (such as before and after school, or during the summer). 
The bill allows services to be provided during school hours 
only if youth are participating in a program that has 
demonstrated effectiveness in high school youth attaining 
diplomas. This exception will allow programs with proven 
success rates, like the Jobs for America's Graduates program, 
to continue to offer elective programs to at-risk youth.
    Eligible in-school youth include low-income youth who are 
one or more of the following: deficient in literacy skills; 
homeless, runaway, or foster children; pregnant or parents; 
offenders; or individuals who require additional assistance to 
complete an educational program, or to secure and hold 
employment. To help ease eligibility determinations for in-
school youth, those eligible to receive or who are receiving 
free or reduced price school lunch will meet the definition of 
``low-income'' for purposes of this program.
    H.R. 27 establishes a revised list of discretionary 
statewide activities that includes: assistance to local areas 
that have a high concentration of eligible youth; supporting 
the provision of core services in the one-stop delivery system; 
conducting evaluations of youth activities (in coordination 
with evaluations carried out by the Department of Labor); 
providing incentive grants to local areas; providing technical 
assistance and capacity building to local areas, one-stop 
operators, one-stop partners, and eligible providers; operating 
a fiscal and management accountability system; and carrying out 
monitoring and oversight. Not more than five percent of the 
youth funds allotted to the state may be used by the state for 
administrative activities related to youth and adult programs.
    Local program design requirements are revised to require 
that service strategies developed for each participant be 
directly linked to one or more of the performance outcomes 
relating to youth activities.
    Additions to the program design requirements include 
activities leading to the attainment of a secondary school 
diploma, GED, or other state-recognized equivalent (including 
recognized alternative standards for individuals with 
disabilities); preparation for advanced training; and effective 
connections to employers in sectors of the local labor market 
experiencing high growth in employment opportunities. The 
Committee notes that some states and local areas have 
interpreted the phrase ``secondary school diploma or its 
recognized equivalent,'' which is used in current law, to 
include skill credentials other than a diploma or an academic 
equivalent, contrary to Congressional intent. Therefore, in all 
areas of the legislation, such language is replaced with 
``secondary school diploma, the General Educational Development 
credential (GED), or other state-recognized equivalent 
(including recognized alternative standards for individuals 
with disabilities).''
    The Committee added on-the-job training opportunities and 
financial literacy skills to the program elements that youth 
service providers may offer.
    H.R. 27 maintains current law safeguards against using WIA 
youth funds in schools. These protections include prohibitions 
against federal control over education, the use of the funds 
for the School-to-Work Opportunities Act, interference with or 
replacement of regular academic requirements, and development 
of curricula.

Re-allotment and reallocation of funds

    For both the youth and adult programs, current law re-
allots states' unobligated funds that at the end of a program 
year are in excess of 20 percent of the prior year's allotment 
and re-allots the funds in accordance with the prior year's 
formula distribution. The amended provision would re-allot 
unexpended funds that are in excess of 30 percent of all funds 
available to the state during the program year prior to the 
program year for which the determination is being made, 
including funds carried-over from previous allotments, and re-
allot the funds based on the most recent formula distribution. 
Since expenditures indicate the funds have actually been used 
by the program, while obligations only indicate commitment to 
some future use, the change to unexpended funds as the basis 
for re-allotment provides a better indicator of whether the 
state is using the resources provided. However, H.R. 27 
excludes accrued expenditures from the amount considered to be 
unexpended. Such accrued costs may include overhead costs and 
unpaid bills for training contracts or services rendered. In 
practice, local areas must set-aside funds for accrued costs 
and therefore such funds truly are not available for other 
expenditures. The bill defines accrued expenditures.
    To accommodate these tighter standards, the required level 
of use is reduced from 80 percent to 70 percent. However, the 
overall effect of these changes would be to better identify 
those states with a significant percentage of unused funds. As 
under current law, only those states that do not have funds 
that are being re-allotted are eligible to receive re-allotted 
funds.
    Similar language is included in both the youth and adult 
programs for re-allotment among state and reallocation among 
local areas within states.
    This revised re-allotment and reallocation language 
addresses a need to identify accurately the amount of funds 
available in state and local areas. The Administration has 
argued that states are carrying over significant amounts of 
funding from year to year, yet states and local areas respond 
that these funds have been obligated, meaning the funds have 
been committed on behalf of WIA customers. Unfortunately, no 
uniform definition for obligation exists, so the Department of 
Labor has considered such information unreliable. Therefore, 
the Department has been using only expenditure data to gauge 
budgetary need. For the Committee, the GAO examined states' 
levels of spending and determined that currently, ``Labor does 
not take into account longer-term commitments made to customers 
and service providers and, as a result, overestimates available 
funds. Budget decisions based on underestimated spending levels 
contribute to funding instability in the system and impair the 
ability of state and local officials to plan.'' \1\ GAO's 
analysis shows that states have spent an average of 90 percent 
of program year funding within two years, and the law allows 
states three years to spend the funds.
---------------------------------------------------------------------------
    \1\ Workforce Investment Act: State's Spending Is on Track, but 
Better Guidance Would Improve Financial Reporting, GAO, November 2002, 
page 30.
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    In addition, the GAO suggests that the Department needs to 
communicate spending benchmarks that states should meet. The 
revised re-allotment provisions for youth and adult funding do 
just that. H.R. 27 makes clear the expectation that states 
should spend at least 70 percent of their available funds each 
year, while maintaining the ability to carry-forward some funds 
to address unexpected future needs.

Comprehensive employment and training activities for adults

    H.R. 27 amends Chapter 5 of WIA to establish a 
comprehensive program of employment and training activities for 
adults. The Committee consolidates three separate funding 
streams currently providing overlapping employment-related 
services to adults into a single, more flexible, comprehensive 
and effective program. The three current funding streams are 
the adult employment and training funding stream and the 
dislocated worker employment and training funding stream 
authorized under Chapter 5 of WIA and the Wagner-Peyser Act 
funding for state-administered employment services. These three 
programs have separate funding formulas, eligibility criteria, 
performance measures, reporting requirements and other 
elements, although they largely serve the same populations. 
Employment services are to be co-located with the one-stop 
centers now. However, contrary to the intent of WIA, some areas 
have retained separate employment services offices. 
Consequently, unnecessary duplication of services and confusion 
for customers (both job seekers and employers) has resulted. 
Consistent with the principles of program integration 
underlying WIA, this consolidation will simplify and enhance 
the delivery of services to adults.
    Consolidated funding will allow states and local areas to 
tailor services to meet the needs of their local communities. 
Diane Rath, Chair of the Texas Workforce Commission, testified 
before the 21st Century Competitiveness Subcommittee on 
September 12, 2002 on the need for additional flexibility:

          The restrictive formula allocations in WIA, however, 
        limit the assistance that states and local workforce 
        areas can provide * * * one-size-fits all truly does 
        not fit in a large and diverse state such as Texas * * 
        * in the Rio Grande Valley, the unemployment rate in 
        the McAllen-Edinburg-Mission MSA stood at 13.3 percent 
        in July 2002, the state's highest. Despite this high 
        rate, the area does not need additional Dislocated 
        Worker funding or Youth funds, but instead needs 
        funding to upgrade the skills of Adult residents in the 
        area to enable them to meet employers' needs. Similarly 
        in the Dallas area, with unemployment at 7.2 percent, 
        the local workforce board does not need Adult funds, 
        but it desperately needs Dislocated Worker funding in 
        order to respond to the needs of the employers and 
        residents in the area.

    The Committee also believes that the consolidated grant 
will help facilitate further coordination with the welfare 
system authorized under the Temporary Assistance for Needy 
Families (TANF) program. In areas where TANF is provided 
through the one-stop delivery system, TANF funds could be used 
for low-income individuals and WIA funds would be available to 
assist unemployed workers and those seeking better jobs or new 
careers.
    H.R. 27 changes the title of chapter 5 of WIA from ``Adult 
and Dislocated Worker Employment and Training Activities'' to 
``Comprehensive Employment and Training Activities for 
Adults.'' Throughout the bill, references to the separate 
dislocated worker funding, which is being consolidated, are 
eliminated.
    The bill revises the allotment of funds to states and 
reservations for national activities. Under current law, the 
Secretary of Labor reserves 20 percent of the dislocated worker 
funding stream to fund national activities. H.R. 27 allows the 
Secretary to reserve 10 percent of the amount appropriated for 
the consolidated adult program, with not less than 75 percent 
of that amount to be used for national dislocated worker grants 
(currently referred to as national emergency grants) to assist 
workers displaced by mass layoffs and natural disasters. The 
Secretary may use up to $125 million of funds reserved for 
national dislocated worker grants to provide community-based 
job training grants, as well. These grants are described in 
more detail later in the report. In addition, not more than 20 
percent of the Secretary's reserved funds are to be used for 
demonstration projects, and not more than five percent are to 
be used to provide technical assistance. The national 
reservation will provide some additional resources specifically 
dedicated for serving dislocated workers. These grants 
(currently called national emergency grants) have proven to be 
invaluable in providing additional, targeted assistance to 
states and local areas responding to large worker dislocations. 
The remaining 90 percent of the appropriated amount would be 
allotted to the states, with up to \1/4\ of one percent 
reserved for the provision of services in outlying areas.
    Under current law, the funds are distributed based on three 
separate formulas for the three adult programs. H.R. 27 creates 
a new formula and revises the allotment formula to the states 
to reflect the more relevant criteria from the funding streams 
that are being consolidated. The formula will be two-part. Part 
one, 26 percent of the funds, is intended to create a base 
amount of funding for each state in 2006 that reflects each 
state's relative share of funds currently received under the 
Wagner-Peyser Act for employment services in 2005. If funds 
available exceed the required base amount, such excess funds 
would be distributed based on a state's relative share of the 
civilian labor force.
    Part two of the formula would dictate the distribution of 
the remaining 74 percent of the consolidated adult grant to 
states. Sixty percent of these remaining funds would be 
distributed on the basis of the relative number of unemployed 
individuals in each state, 25 percent would be distributed on 
the basis of relative excess number of unemployed individuals 
in each state, and 15 percent would be distributed on the basis 
of the relative number of disadvantaged adults in each state. 
These factors are similar to the current formula factors for 
adult and dislocated workers, but minimize the most volatile 
factors.
    The bill also contains a provision that holds states 
harmless against what they would have received under the 
current law formulas for the three separate programs. For 
states that would receive an increase in 2006 under the new 
formula as compared to what they would have received under the 
old formulas, their increases will be capped at three percent. 
Any funding that would have supported a gain above three 
percent is redistributed to states that come out worse under 
the new formula than under current law, so no state will lose 
funds. If additional funds are needed to ensure states are held 
harmless, the Secretary will use national reserve funds to make 
up the difference.
    The allotment formula includes a minimum percentage that 
would ensure states receive an allotment percentage not less 
than 90 percent of the previous year's allotment percentage 
(for fiscal year 2006 the previous year's percentage would be 
based on the percentage of funds allotted to states under the 
three separate funding streams). The Adult and Wagner-Peyser 
funding streams currently include this 90-percent hold 
harmless. The allotment formula also includes a maximum 
percentage of 130 percent of the previous year's allotment 
percentage, which is part of the current adult formula. The 
Committee notes that these protections should create more 
stability in funding for states. Currently, the dislocated 
worker funding stream has no stop-loss or stop-gain 
protections. While the formula in current law was designed to 
allow funds to flow to those states most in need, there have 
been significant shifts in funding from year to year. As a 
result, states have been unable to plan their programs 
effectively. The new provisions should reduce this instability.
    The formula also includes a small state minimum allotment 
of \2/10\ of one percent to ensure small states have sufficient 
resources to operate a viable program. Currently, both the 
adult and Wagner-Peyser formulas include small state minimums.
    H.R. 27 further specifies within state allocation of 
funding. A governor may reserve up to 50 percent of the state's 
allotment for statewide activities. The adult program under WIA 
currently allows the governor to reserve up to 15 percent for 
statewide activities, the dislocated worker program allows the 
governor to reserve up to 40 percent (including 25 percent for 
rapid response, which will continue to be a statewide 
activity), and employment services under the Wagner-Peyser Act 
are entirely state-administered. The 50 percent reserve allows 
the state to retain a comparable level of resources to what is 
currently administered at the state level under the three 
programs.
    However, the Committee notes that funds currently received 
by states to operate the employment services system largely are 
administered at the local level through the One-Stop Career 
Centers or in separate employment services offices. The 
Committee aims to provide funding for the provision of local 
employment and training services at least equivalent to current 
funding. Therefore, governors are required to use at least 50 
percent of each state's share of the adult funding to support 
``core'' services in local areas, consistent with local plans, 
through one-stop delivery systems. The governor of each state 
will distribute such funds to local areas through a method of 
distribution developed in consultation with the state board and 
local boards. The method of distribution shall be objective and 
geographically equitable. The funds may be used by states to 
employ state personnel to provide core services in designated 
local areas in consultation with local boards.
    The remaining 50 percent of the overall state allotment is 
to be allocated to the local areas within the state. The 
separate formulas for adults and dislocated workers are 
eliminated. Under the bill, 85 percent of the funds are to be 
allocated in accordance with an established formula (i.e., 60 
percent on each local area's relative share of unemployment, 25 
percent on excess unemployment, and 15 percent on disadvantaged 
adults) and also include stop-loss and stop-gain provisions to 
stabilize funding.
    The remaining 15 percent of funds are to be allocated to 
local areas based on a state-developed formula. Currently, the 
WIA adult program permits states to use a discretionary formula 
under which 70 percent of the formula is based on established 
factors and 30 percent may be based on factors that relate to 
excess unemployment or excess poverty. The dislocated worker 
program allows the governor to establish a formula that 
includes certain prescribed factors. Under the bill, the 
governor is to determine, after consultation with the state 
board and local boards, the appropriate economic and 
demographic factors to be used to allocate this portion of the 
funds. The formula must be objective and geographically 
equitable. This provision gives state and local areas the 
ability to target funds as necessary to address unique state or 
local factors.
    H.R. 27 also retains the current local administrative cost 
limit under which local areas may not expend more than 10 
percent of the allocation for administrative costs. As under 
current law, these funds may be used for the administrative 
costs of both the adult and youth programs (as may youth 
administrative funds).
    H.R. 27 adds a new definition of ``administrative costs'' 
which includes expenditures incurred by state and local 
workforce investment boards, direct recipients, local grant 
recipients, local fiscal agents or local grant subrecipients, 
and one-stop operators in the performance of administrative 
functions and in carrying out activities which are not related 
to the direct provision of workforce investment services 
(including services to participants and 
employers).Administrative costs currently are defined by regulation. 
The Committee intends this definition to be a placeholder definition, 
pending further discussion on the issue. The Department of Labor 
asserts that WIA program funds are inappropriately being spent on 
overhead costs at one-stop centers. The Committee is examining this 
issue and will continue to explore what functions or activities should 
be classified as administrative as the reauthorization process moves 
forward. The Committee hopes to find common ground that maximizes 
program services while also ensuring the local one-stop delivery system 
is able to perform all of the functions necessary to serve our job 
seekers and employers well.
    The bill also specifies statewide employment and training 
activities. Under current law, rapid response services to 
assist dislocated workers are a required statewide activity 
with a specific reserve of 25 percent of the state's dislocated 
worker allotment. The bill would retain the requirement that 
these services be provided by the state, but eliminates a 
specific reserve amount. The intent is to allow the governor to 
manage the portion of the state reserve that is not spent to 
support core services, in accordance with the needs of the 
state.
    After requiring rapid response activities, the bill, 
similar to the provisions relating to statewide activities for 
youth, removes the remaining categories distinguishing 
allowable and required statewide activities to allow greater 
administrative flexibility. The developing of strategies for 
effectively serving hard-to-serve populations, for integrating 
one-stop partner programs, and for meeting the needs of 
businesses, including small businesses, are added as allowable 
statewide activities. In addition, states are permitted to 
carry out activities to facilitate remote access to services 
provided through a one-stop delivery system including 
facilitating access through the use of technology. Utilization 
of the internet and other methods, such as on-line training, 
are especially important for serving rural areas. The other 
identified activities, including incumbent worker training 
projects and services to displaced homemakers, are retained 
from current law. Also retained is the current law limitation 
on state administrative expenses, which are not to exceed five 
percent of the allotment.
    With the consolidation of the three adult funding streams, 
the Committee expects that all former employment services 
functions will be maintained through the provision of core 
services within the one-stop delivery system. Under current 
law, both WIA and the Wagner-Peyser Act provide funds for 
services to connect job seekers with available jobs, including 
job search and placement assistance. Regardless of income, all 
adults are eligible to receive these services. Many One-Stop 
Career Centers offer such services through self-serve computer 
stations where individuals may access job listings, write a 
resume, and more. Under WIA, these are called ``core services'' 
while under Wagner-Peyser they are called ``labor exchange 
services.'' Although each law has a different term, the 
services are essentially the same.
    H.R. 27 incorporates as core services two functions 
specifically identified in the Wagner-Peyser Act that are not 
specified as core services in current law: appropriate 
recruitment services for employers and the administration of 
the work test for the unemployment compensation system.
    Through the consolidation of the three adult funding 
streams, the Committee aims to provide states and local areas 
flexibility to provide core services without the bureaucratic 
headache of administering three funding streams that provide 
the same services under current law. This structure should 
allow funds to be freed to provide other services and 
activities. As a witness before the Subcommittee on 21st 
Century Competitiveness on March 11, 2003, Emily Stover 
DeRocco, Assistant Secretary at the Department of Labor for the 
Employment and Training Administration, testified that ``[i]n 
this streamlined proposal, labor exchange services would be the 
foundation of the One-Stop Career Center system, with the 
remaining funds focused on training and intensive services.''
    As previously described, H.R. 27 also includes a sub-state 
allocation that provides local areas with adequate funding to 
maintain services, while also assuring that state funds that 
formerly supported employment services flow locally to support 
core services. Governors have the option of either providing 
the funds to the local areas or utilizing the talents of state 
employees to provide the services locally in the One-Stop 
Centers. Therefore, the expertise of current state employees 
will be maintained and will continue to benefit individuals and 
employers seeking services through the One-Stop Centers.
    Under current WIA law, one-stop operations can be 
competitively bid with services typically being provided by 
government employees. Under Wagner-Peyser, there is a 
regulatory requirement that labor exchange services be provided 
by state merit staff employees. However, there is a 
demonstration program operating in Colorado, Michigan and 
Massachusetts through which the three states are relieved of 
this burdensome requirement. Having local government staffs 
provide all core and labor exchange services in these three 
states has worked well, and the Committee believes all states 
should be afforded this same flexibility.
    Through WIA, two other levels of services also are 
provided. ``Intensive'' services include comprehensive 
assessments, case management and one-on-one career counseling, 
short-term prevocational services, and more. ``Training'' 
services include occupational skills training, on-the-job 
training, entrepreneurial training, customized training, and 
more. Under current law, one must utilize at least one service 
in each level before moving on to the next level of service, 
but there is no federally required minimum time period for 
participation in core and intensive services before one can 
access training assistance. However, some states have 
interpreted current law as requiring that all participants must 
participate in core services for a specified period of time 
before being eligible for intensive services, and likewise 
requiring intensive services before training. This has 
sometimes resulted in services being denied or delayed, and 
limited the flexibility of states and local areas in tailoring 
services to meet individual needs. There have also been 
questions as to what sort of employment is the appropriate goal 
in assessing whether an individual can obtain employment 
through particular services. Current law simply refers to the 
term ``employment'' in reference to unemployed individuals and 
uses the term ``employment that leads to self-sufficiency'' for 
employed workers.
    To address these issues regarding the ``sequencing of 
services,'' H.R. 27 amends the eligibility requirements for 
intensive services to provide that if an individual is 
``unlikely or unable to obtain suitable employment'' through 
core services, and, as in current law, is determined to be in 
need of those services, he or she would be eligible. This 
provision also provides that the governor is to define the term 
``suitable employment.'' Adding the language ``unlikely or'' 
clarifies that the determination of whether core services will 
be sufficient to obtainemployment may be made prospectively, 
not only after a time period has elapsed. Therefore, if an assessment 
indicates that intensive services will be needed in addition to core 
services, those services could be provided. In addition, by identifying 
the employment for purposes of this determination to be ``suitable 
employment,'' as defined by the governor, the particular circumstances 
of the participant could be taken into account. For example, while one 
might be able to find a job it may not be comparable to the person's 
previous employment or consistent with the individual's employment 
goals, and therefore it would not be suitable employment. Individuals 
should be able to pursue employment in high-growth fields or other 
areas that allow advancement. Similar provisions apply to individuals' 
eligibility for training services. These amendments, therefore, provide 
important flexibility to states and local areas in the provision of 
core, intensive, and training services.
    Tim Barnicle, Co-Director of the Workforce Development 
Program at the National Center on Education and the Economy, 
who testified before the 21st Century Competitiveness 
Subcommittee on September 12, 2002, explained how the required 
sequencing of services may have resulted in individuals failing 
to receive some necessary training when he said, ``While 
training is increasingly being provided to individuals in need 
of such services throughout the workforce system, there was 
some confusion in the initial implementation of the Act. Many 
states and localities interpreted WIA as encouraging a ``work-
first'' only approach to service delivery resulting in a 
reduction in the provision of training services.''
    Three services are added to the list of allowable intensive 
services: internships and work experience; literacy activities 
relating to basic work readiness, information and communication 
technology literacy activities, and financial literacy 
activities; and out-of-area job search assistance and 
relocation assistance. The Committee believes that allowing 
literacy activities to be provided as an intensive service, and 
not just as a training service, will increase access to such 
services for those who need them. The Committee also recognizes 
that common among nearly all job seekers is the need to know 
how to find, use, manage, and evaluate information resources 
efficiently so that they can create and effectively convey 
information and ideas to others. The Committee encourages one-
stop centers to offer opportunities to acquire skills in the 
area of communication technology literacy.
    Among the types of entities local boards may contract with 
to provide intensive services are public non-profit service 
providers. The Committee notes that this current law language 
should not be construed as limiting eligibility to non-profit 
entities that exist solely to provide these types of services. 
In particular, the Committee notes that there are a wide 
variety of non-profit entities that may have broader missions, 
but have the capacity to leverage funds that would be received 
through local workforce boards. One such example is public 
libraries. Although not a common provider of intensive services 
under WIA, there are examples of such arrangements. In 
Jacksonville, Florida the local library works with WorkSource, 
the regional workforce development board, to provide training 
and recruitment assistance and operate a number of regional 
centers where local job seekers can go to search a database of 
job listings, develop resumes and sharpen their interview 
skills. The Committee encourages local areas to consider 
creating relationships with entities such as libraries in cases 
where they already are providing similar intensive services.
    The Committee also notes that private-sector employment 
agencies play an important role in providing employment 
opportunities to America's workforce. The Committee encourages 
local boards and one-stop operators to refer to and contract 
with such firms. This would enhance the ability of local boards 
and one-stop operators to make job placements, especially to 
businesses that do not traditionally use one-stop services to 
fill vacancies.
    The Committee aims to address the unique training needs of 
individuals with limited English proficiency. Therefore, H.R. 
27 allows occupational skills training to be combined with 
English language acquisition. Integrated training programs that 
provide language instruction in the context of job training 
have demonstrated remarkable employment outcomes for job 
seekers and positive results for employers. These enhancements 
to training opportunities should increase the employment for 
our country's immigrant populations.
    Local areas already may offer entrepreneurial training. 
H.R. 27 builds upon this opportunity by also allowing local 
areas to provide information on the availability of micro-
credit loans. The Committee encourages local areas to provide 
such information to help individuals start small businesses.
    Since H.R. 27 consolidates three funding streams, a new 
priority of service delivery must be included. Under current 
law, the dislocated worker funding stream serves primarily 
unemployed workers, and the adult funding stream has a priority 
for low-income individuals. The revised provision would create 
a priority of service for unemployed individuals in the 
provision of intensive or training services under the 
comprehensive adult program. In addition, if funds in the local 
area for serving recipients of public assistance and other low-
income individuals are limited, then the priority for intensive 
or training services is to be extended to such recipients and 
low-income individuals.
    Training currently is provided primarily through 
``individual training accounts,'' or ITAs. Individuals that 
receive an ITA voucher can choose training courses available 
through eligible training providers.
    The Committee believes that local areas should have the 
flexibility to combine funds available for training under WIA 
with other training resources. Therefore, H.R. 27 authorizes 
local areas to assist participants in enhancing these accounts 
so that funds from sources other than the adult program may be 
included. This is intended to facilitate the acquisition of 
training and maximize the number of individuals that can be 
assisted through training.
    H.R. 27 clarifies that local areas may purchase computer 
technology for use by an individual if the purchase is part of 
an ongoing training program and such purchase is necessary to 
ensure the individual can participate in such training. Any 
computer technology purchased shall remain property of the one-
stop operator. However, the Committee intends that the one-stop 
operator may temporarily permit individuals participating in 
training to use such computer technology at home.
    H.R. 27 adds new activities to the current list of 
permissible activities that local areas may carry out. Current 
activities include customized screening and referral services 
foremployers and other customized employment-related services 
for employers on a fee-for-service basis. The first new allowable 
activity is customer support to navigate among multiple services and 
activities for special participant populations that face multiple 
barriers to employment, including individuals with disabilities. These 
``navigators'' are intended to facilitate the access of special 
populations to the services and activities available through the one-
stop system. The Committee has heard that such populations, especially 
individuals with disabilities, have not been as well served through the 
one-stop system as Congress intended. The Committee anticipates this 
additional assistance to such individuals will increase their 
utilization of the one-stop delivery system and improve the quality of 
services they receive.
    The second new permissible activity is employment and 
training assistance provided in coordination with child support 
enforcement activities of the state agency carrying out title 
IV-D of the Social Security Act. This coordination is intended 
to facilitate the employment of unemployed or underemployed 
non-custodial parents, thus enabling them to pay child support.
    In addition, local areas may engage in activities to 
improve services to businesses, including small employers in 
the local area, and increase linkages between the local 
workforce investment system and employers. Local areas also may 
facilitate remote access to services provided through the one-
stop delivery system, including facilitating access through the 
use of technology. This is critical for ensuring rural areas 
are served adequately.
    Program operators continue to search for ways to ``make 
work pay'' for low-income families. Work supports, such as 
child care, often contribute to job retention. In addition, 
many low-income workers need and desire advancement services. 
Therefore, H.R. 27 authorizes the provision of work support 
activities for low-wage workers. Specifically, the adult 
program, in collaboration with appropriate one-stop partners, 
is authorized to provide work support activities designed to 
assist low-wage workers in retaining and enhancing employment. 
These activities may include assistance in accessing financial 
supports. In addition, these activities may include the 
provision of services through the one-stop delivery system in a 
manner that makes it easier for these workers to participate in 
the one-stop activities, such as employment and training 
activities during non-traditional hours, and on-site child 
care.
    An additional permissible activity for local areas will be 
incumbent worker training programs. Under current law incumbent 
worker programs are only authorized at the state level. Under 
this provision, the local board may use up to ten percent of 
funds allocated to a local area to provide incumbent worker 
training. The training must be carried out in conjunction with 
the workers' employers for the purpose of helping the workers 
in obtaining the skills necessary to retain employment and 
avert layoffs. Training leaders recognize that, increasingly, 
employers must upgrade the skills of their workers to remain 
competitive. ASTD, the American Society for Training and 
Development, expressed this dynamic in a January 21, 2005 
letter to Congressman McKeon:

          In today's economy, there are ample jobs in high-
        demand fields but not enough trained workers to fill 
        them. As a result, it has become critically important 
        for organizations to retrain and upskill incumbent 
        workers. According to ASTD's 2004 State of the Industry 
        Report, investing in employee learning continues to be 
        a priority for business. The report shows that leading 
        organizations--those that understand the critical link 
        between employee learning and organizational 
        performance--typically invest more in employee learning 
        than the average organization. These leaders align 
        learning with business goals and measure the efficiency 
        and effectiveness of their learning investments. They 
        know that they must attract and retain highly skilled 
        employees in order to sustain competitive advantage and 
        growth.

    Employers participating in incumbent worker training 
programs would be required to pay a portion of the costs of 
training for the incumbent workers. The governor may establish 
the portion or delegate this responsibility to the local board, 
but the portion may not be less than 10 percent for employers 
of 50 or fewer employees, 25 percent for employers with 51-99 
employees, and 50 percent for employers with 100 or more 
employees. The wages paid by an employer may be included in the 
calculation of the match.
    This provision is intended to provide some flexibility for 
the one-stop system to respond to the needs in the local area 
and assist in avoiding potential layoffs. The matching 
requirement is intended to ensure there is appropriate employer 
commitment to the training program.
    Bruce Stenslie, Director of the Ventura County, CA, 
Workforce Investment Board, testified before the Subcommittee 
on 21st Century Competitiveness on September 12, 2002 that 
incumbent worker training is valuable for several reasons:

          Our work doesn't stop when a welfare recipient or any 
        worker is employed, but rather continues to help 
        clients attain self-sufficiency and to become full 
        participating members of the labor force. This requires 
        a continuing engagement with employers * * * We have 
        documented the prevention of layoffs by investing in 
        business through employed and incumbent worker 
        training, to improve their skills and to keep them 
        employed.

Performance accountability system

    Since implementation of WIA, states and local areas have 
raised concerns regarding the seventeen statutory performance 
measures applicable to the formula programs. The current 
performance measures have been perceived as too numerous and 
overly burdensome. In addition, the utility of some of the 
measures (such as customer satisfaction) as federally required 
measures has been raised. In order to promote consistency in 
the measures applicable to federal employment and job training, 
the Bush Administration has undertaken a common measures 
initiative for all employment and training programs. In 
response to the concerns raised and in furtherance of the 
common measures objectives presented by the Administration, the 
Committee reduced the number of performance measures from 
seventeen to six (three for adults and three for youth).
    The Committee believes that the customer satisfaction 
measure does not provide a uniform measurement by which to 
evaluate the program on a national level. Therefore, the bill 
strikes references to the customer satisfaction measure. 
However, states are explicitly permittedto utilize customer 
satisfaction measures, and the Committee urges states and local areas 
to utilize such measures to evaluate the effectiveness of their 
outreach programs and to engage in continuous improvement.
    To simplify the adult measures, the bill also eliminates 
the current adult program performance indicator regarding the 
attainment of a credential. The core indicators for the 
consolidated adult program, which are retained from current 
law, are entered employment, earnings, and retention in 
employment.
    In addition, H.R. 27 amends the youth performance 
indicators to establish the following three indicators: entry 
into employment, education or advanced training, or military 
service; attainment of a secondary school diploma, GED, or 
other state-recognized equivalent (including a recognized 
alternative standard for individuals with disabilities); and 
attainment of literacy or numeracy skills.
    Currently, outcomes data only is collected for those 
individuals that register for intensive or training services. 
Individuals accessing only core services are not required to 
register for such services and little information is available 
regarding the employment status of such individuals and the 
impact of one-stop services. Therefore, performance data is 
collected only on a small percentage of individuals utilizing 
the one-stop delivery system. For instance, according to the 
U.S. Conference of Mayors, in San Diego County 30,000 
individuals were served in the county's six One-Stop Centers 
during program year 2001. Of those individuals, 1,200 received 
training through WIA. The Committee believes that it is 
critical to capture performance information about all those 
that the system serves and not just those receiving training. 
H.R. 27 drops the exclusion of those receiving self-service and 
information activities from the measures. Therefore, all 
participants would be included in the performance measures. 
This change is intended to ensure accountability in the 
provision of basic core services, which is a significant 
component of the one-stop delivery system. The Committee notes 
that this new requirement should not create a new burden on 
local areas as most local areas already have the technology 
(such as swipe cards) to capture information about those that 
are using the system.
    In addition, in an effort to gauge program efficiency, 
states also will report the number of participants served and 
the cost per participant.
    Under current law, the levels of performance for each 
indicator are negotiated between the Secretary of Labor and 
each state. One concern that has been raised is that these 
negotiations do not sufficiently take into account economic 
conditions and the characteristics of the population to be 
served, thus discouraging services to special populations. H.R. 
27 would revise the current language requiring that such 
factors shall be taken into account by the Secretary and 
replace it with a requirement that levels must be adjusted 
based on those factors. The bill also identifies the kinds of 
economic (unemployment rates and job losses in particular 
industries) and participant characteristics (indicators of poor 
work history, lack of work experience, disability status, low 
levels of literacy or English proficiency, and welfare 
dependency) to be considered.
    H.R. 27 clarifies that, when states adjust performance 
indicators based on disability status, they must consider the 
number of veterans with disabilities to be served by the state. 
The one-stop delivery system already has a general priority to 
provide services to veterans. Unfortunately, at this time of 
war, numerous veterans have disabilities and may need 
additional and specialized assistance to find new work. States 
and local areas with a large military presence and populations 
of service members must assist such individuals as they 
transition into civilian life. By taking into account the 
number of veterans with disabilities, the Committee aims to 
ensure that states and local one-stops do not have any 
disincentive to serve our veterans. The Committee wants to 
provide as much assistance as our military veterans need to get 
back to work--it is the least we can do, given the sacrifices 
they have made for us.
    Local performance measures parallel the amendments made 
regarding the state performance measures. The same performance 
indicators are applied to local areas and the requirement that 
the levels of performance negotiated between the governor and 
local areas be adjusted based on economic conditions and the 
characteristics of the population served is incorporated.
    State and local performance measures will be negotiated 
every two years, consistent with the length of the planning 
cycles.
    Under current law, performance incentives are only 
available to states that meet or exceed performance measures 
for all of the following three programs: WIA, adult literacy 
and vocational education. This approach separates the 
incentives from the performance of a particular program, and 
thus reduces the incentive effect. H.R. 27 links the funding 
and process for awarding incentives specifically to WIA Title I 
performance measures. The Secretary may use funds appropriated 
for national activities to award grants to states for exemplary 
performance. The Secretary may base the award on performance of 
states with respect to the performance measures or the 
performance of the state in serving special populations (which 
includes individuals with disabilities). The states may use 
these funds to carry out any youth or adult activities 
authorized under chapters 4 or 5 of WIA, including 
demonstrations and innovative programs for special populations.
    The bill contains parallel language for rewarding local 
areas' performance. The governor may use state reserve funds 
under chapters 4 and 5 toward grants for exemplary performance, 
which may be tied to the performance measures or services to 
special populations. Local areas may use the funds for 
authorized youth or adult activities.
    Consistent with the Bush Administration's efforts to ensure 
consistency in performance requirements across federal 
employment and training programs, the bill requires the 
Secretary to use the core indicators of performance included in 
WIA to assess the effectiveness of mandatory partner programs 
that are carried out by DOL. This action must be consistent 
with the requirements of the applicable authorizing laws of 
those programs.

Authorized appropriations

    H.R. 27 authorizes appropriations for the youth and adult 
funding streams for fiscal years 2006 through 2011. The 
Committee authorizes $1,250,000,000 for fiscal year 2006 and 
such sums as may be necessary for each of fiscal years 2007 
through 2011 for youth activities. TheCommittee authorizes 
$3,140,000,000 for fiscal year 2006 and such sums as may be necessary 
for each of fiscal years 2007 through 2011 for adult activities. The 
Committee notes that this is the same funding for 2006 that was 
provided through the three separate adult funding streams in 2005. The 
separate authorizations for adult and dislocated worker funding streams 
are deleted.

Job Corps

    Current law requires that each Job Corps center establish 
an industry council responsible for such activities as 
reviewing labor market information to determine the employment 
opportunities in the local areas for Job Corps students. The 
bill removes the requirement that the majority of industry 
council members be ``local and distant'' employers and instead 
adds language that encourages the participation of employers 
outside of the local area who are likely to hire a large 
portion of Job Corps students. In addition, the Committee 
specifies that the same performance indicators applicable to 
the WIA formula youth program are applicable to the Job Corps 
program. This is consistent with the Bush Administration's 
initiative to apply common performance indicators to federal 
job training programs.
    The Committee commends Job Corps for efforts to increase 
opportunities for participants to earn a high school diploma. 
While Job Corps' success rate to date is encouraging, obstacles 
at the state and local levels make it difficult for the program 
to ensure that all participants, regardless of center location, 
have access to the opportunity to obtain a high school diploma. 
The Committee urges the Department of Labor, in consultation 
with the Department of Education, states and local educational 
agencies, to examine obstacles to Job Corps' participants' 
ability to earn and receive high school diplomas from a local 
educational agency.
    The bill authorizes the appropriation of such sums as 
necessary for the continuation of the Job Corps program through 
fiscal year 2011.

National activities

    H.R. 27 removes language within the national Native 
American program that was necessary to help programs transition 
from the former Job Training Partnership Act (JTPA) to WIA, 
since it no longer is needed. In addition, the bill clarifies 
the duties of the Native American Employment and Training 
Council.
    The Committee has maintained authorization for the Migrant 
and Seasonal Farmworker Programs. However, the Committee 
encourages one-stops to improve services to the population 
served through this separate program and further notes that the 
allowance for one-stop centers to provide access to social and 
supportive services, housing, and other assistance available 
through partner programs should increase services for such 
populations in one-stop centers. The bill ensures that housing 
assistance provided through the program will include permanent 
housing.
    As noted previously, 25 percent of the youth activities 
appropriation, up to $250 million, is reserved for the 
Secretary to provide Youth Challenge Grants. Of the funds 
available for the grants, 80 percent would be available for 
competitive grants and 20 percent would be available for 
discretionary grants.
    The purpose of the competitive grants is to promote 
collaboration and innovation in providing activities to assist 
youth in acquiring the skills and employment experience 
necessary for employment. The competitive grants may be awarded 
to states, local boards, recipients of Native American program 
grants, and public or private entities (including consortia of 
such entities) applying in conjunction with local boards. 
Initial awards would be made for one year, with four option 
years available depending upon satisfactory progress and 
availability of funds. The Secretary is authorized to require 
that grantees provide a nonfederal share of the cost of 
activities carried out under a grant.
    Funds would be used for the activities described in the 
youth formula program to states and for other activities 
designed to assist youth. These include internships in high-
growth sectors for out-of-school youth; after-school dropout 
prevention programs for in-school youth; activities to assist 
special youth populations, such as court-involved youth and 
youth with disabilities; and activities combining remediation 
of academic skills, work readiness training, and work 
experience.
    To be eligible to receive a Youth Challenge Grant, an 
entity must submit an application to the Secretary that 
includes a description of the activities the eligible entity 
will provide to eligible youth; a description of the programs 
of demonstrated effectiveness on which the provision of the 
activities are based; a description of how such activities will 
expand the base of knowledge relating to the provision of 
activities for youth; a description of the private and public 
local and state resources that will be leveraged to provide the 
activities described; and the levels of performance the 
eligible entity expects to achieve with respect to the 
indicators of performance for youth.
    Factors to be considered in awarding Youth Challenge Grants 
include the quality of the proposed project, the goals to be 
achieved, the likelihood of successful implementation, the 
extent to which the project is based on proven strategies or 
the extent to which the project will expand the knowledge base 
on activities for youth, and the additional state, local or 
private resources that will be provided. The Secretary may 
reserve up to five percent of the Youth Challenge Grant funds 
to conduct evaluations of the projects.
    The Secretary is encouraged to consider the economic and 
demographic factors of local areas when determining whether to 
approve a Youth Challenge Grant application. The Committee 
expects such funds will be targeted toward at risk areas, such 
as those previously served through the youth opportunity 
grants, particularly rural areas. In addition, the Committee 
encourages the Secretary to provide technical assistance to 
such rural areas to assist them in competing for the grants.
    Discretionary Youth Challenge Grants for youth activities 
are intended to provide the flexibility to assist a variety of 
entities and organizations in providing innovative and 
effective activities for eligible youth, including special 
populations. The Secretary may award discretionary grants to 
public or private entities that the Secretary determines would 
effectively carry out activities relating to youth. 
Discretionary grant funds may be used for activities that will 
assist youth in preparing for, entering into, and retaining 
employment. These include theactivities described in the youth 
formula program for out-of-school youth, activities designed to assist 
in-school youth to stay in school, and other activities the Secretary 
determines are appropriate. To be eligible to receive a discretionary 
grant, an eligible entity must submit an application to the Secretary. 
The Secretary may require the provision of a nonfederal share for 
discretionary projects, and may require participation of grantees in 
evaluations of such projects.
    H.R. 27 amends the current provisions authorizing the 
Secretary of Labor to provide, coordinate and support training, 
technical assistance, and other activities. The current law 
provision establishing separate technical assistance activities 
under the dislocated worker funding stream would be deleted. 
However, the staff training activities for rapid response are 
retained. Funding for peer review activities and training of 
staff of recipients of funds under WIA and assistance on 
implementation of the Job Training Improvement Act of 2005 also 
are authorized as allowable uses of technical assistance funds, 
and the Secretary may provide technical assistance to states to 
assist them in meeting their state-developed performance 
indicators. In addition, the Secretary shall establish a system 
for the sharing of best practices among states.
    Current law relating to demonstration, pilot, multi-
service, research and multi-state projects is amended to align 
requirements better with current priorities and the new overall 
direction of the workforce investment system. Allowable 
projects include: projects that assist national employers to 
enhance connections with the workforce investment system; 
systems development activities that benefit recipients under 
this title and improve the effectiveness and efficiency of 
programs; projects focused on high-growth industry sectors, 
including information technology; projects focused on 
industries and sectors of industries being transformed by 
technology and innovation requiring new knowledge or skill sets 
for workers, including advanced manufacturing; and projects 
that promote states and local areas to test innovative 
approaches to delivering workforce services. In addition, the 
Secretary may establish projects carried out by states and 
local areas to assist adults or out-of-school youth in starting 
a small business. The Committee recognizes the contributions 
that small businesses make to our economy and encourages making 
them a viable option for job seekers. The list of entities 
eligible to carry out demonstration and pilot programs is 
removed in order to allow a broader array of entities to carry 
out these programs, promoting greater innovation.
    The Committee encourages the Secretary to fund a pilot or 
project focused on the opportunities for workforce development 
in the aerospace industry, which is a high-growth and high-wage 
industry. The aerospace industry generates nearly 15 percent of 
the gross domestic product of the United States, supports 
approximately 11 million jobs in the United States, and leads 
the United States economy in net exports. The aerospace 
industry contributes directly to the economic and national 
security of the United States through military, space, air 
transport, and information technology applications. However, in 
2004, total employment in the aerospace industry fell to its 
lowest point in 50 years, and over 27 percent of the aerospace 
manufacturing workforce will become eligible for retirement by 
2008. Employers within the aerospace industry are concerned 
that U.S. students, who rank near the bottom of leading 
industrialized countries of the world in performance on math 
and science tests, lack the necessary training and skills to 
fulfill the anticipated workforce needs of the industry. This 
industry could benefit from a national investment in aerospace 
workforce recruitment, training, and cultivation.

Community-based job training

    President Bush proposed $250 million in his fiscal year 
2005 budget for community-based job training grants. These 
funds would be used to build upon the Department's successful 
High Growth Job Training Initiative. The fiscal year 2005 
appropriations process provided the Department with $125 
million in new funds and authority to use $125 million in WIA 
national reserve funds to support these grants.
    The Job Training Improvement Act creates new authority 
within the demonstration section of WIA, section 171, to 
authorize the Department to award these grants using available 
funding. The demonstration project would serve to enhance 
training and opportunities for employment in high-growth, high-
skill occupations. The grants would support partnerships among 
community colleges, the public workforce investment system, and 
businesses in high-growth, high-skill industries to develop 
solutions to the workforce challenges facing these industries 
and develop maximum access for American workers to gain the 
education and skills they need to get good jobs in these 
industries.
    Through the demonstration, the Secretary shall award 
competitive grants, in accordance with generally applicable 
federal requirements, to community colleges that shall work in 
conjunction with the local workforce investment system and a 
business or businesses in a qualified industry or an industry 
association in a qualified industry.
    Community colleges are institutions of higher education, as 
defined by section 101 of the Higher Education Act of 1965, 
that provide not less than a 2-year program that is acceptable 
for full credit toward a bachelor's degree, or are tribally 
controlled colleges or universities. The Committee recognizes 
that the nation's public community colleges have substantial 
experience preparing the American workforce and the ability to 
respond quickly to emerging training needs. The Committee 
believes that these institutions, which in most areas already 
work with industry and the one-stop delivery system, are well-
suited to meet the requirements of these grants.
    In addition, consortia of community colleges, working with 
applicable required partners, could apply for a grant. This 
would allow grants to be used to address regional training 
needs, or even statewide needs where practicable, in particular 
sectors of the economy. For example, the California community 
colleges have established networks to address the workforce 
needs within particular industries, such as health occupations 
and biotechnology. The colleges participating in such networks 
may choose to work collaboratively to address broader workforce 
needs.
    The initiative targets growing industries. Industries 
qualified to participate include those projected to add 
substantial numbers of new jobs to the economy, have 
significant impact on the economy, impact the growth of other 
industries and economic sectors, are being transformed by 
technology and innovation requiring new knowledge or skill sets 
for workers, are new or emerging industries or economic sectors 
that are projected to grow, or have high-skilled occupations 
with significant labor shortages in the local area.
    Grants awarded under this demonstration may be used for: 
the development, in consultation with industry representatives, 
of rigorous training and education programs related to 
employment in the high-growth industry identified in the 
application; training of workers in the skills and competencies 
needed to obtain or upgrade employment in a qualified industry; 
disseminating, through the one-stop delivery system, 
information on high-growth, high-demand occupations in such 
industries; placing, through the one-stop delivery system, 
trained individuals; and increasing the integration of 
qualified training providers with the activities of businesses 
and the one-stop delivery system to meet training needs.
    The community college shall submit an application to the 
Secretary, containing at a minimum: a description of the 
training provider; an economic analysis of the local labor 
market identifying the high-growth, high-demand industry and 
its workforce challenges; a description of the industry for 
which training will occur and the availability of competencies 
on which training will be based; an assurance that the 
application was developed in consultation with the local 
workforce investment board or board in the area or areas where 
the grant will be used; performance outcomes for the grant; a 
description of how the activities funded by the grant will be 
coordinated with the one-stop delivery system; and a 
description of any local or private resources that will support 
the activities and allow the activities to continue after the 
expiration of the grant.
    The Committee believes that this effort should be 
consistent with the efforts of the local workforce investment 
boards and within the framework of the local one-stop delivery 
system. To ensure that appropriate coordination occurs and that 
separate training systems are not created, the community 
college must obtain the input of the local board or boards 
where the grant is to be used. The local boards' analysis of 
local labor market needs and the expertise of the local boards' 
business majority will help inform the development of the 
applications and lead to successful implementation.
    The Secretary shall require that grant recipients report on 
the employment outcomes obtained by individuals receiving 
training under the grant and may require that they participate 
in an evaluation of the activities.

Personal reemployment accounts

    H.R. 27 incorporates President Bush's proposal to allow 
states and local areas to offer innovative new assistance to 
unemployed workers in the form of Personal Reemployment 
Accounts (PRAs) to those workers most likely to need additional 
assistance in finding new jobs. PRAs offer new flexibility and 
individual choice in accessing services. The language in H.R. 
27 on this issue is identical to H.R. 26, the Worker 
Reemployment Accounts Act of 2005, and H.R. 444, which passed 
the House last Congress. Both bills were introduced by 
Congressman Jon Porter (R-NV).
    Training leaders recognize the potential PRAs hold for job 
seekers. ASTD, the American Society for Training and 
Development, states in a January 21, 2005 letter to Congressman 
McKeon that the PRA proposal ``will provide eligible workers 
with the necessary flexibility to purchase job training and key 
services so they can obtain employment. ASTD supports its 
flexibility, which encourages--but does not mandate--
individuals to seek out training that connects them to the 
high-growth industries identified by the Department of Labor.''
    The Secretary already has used her discretionary authority 
to begin a small demonstration project, funded at approximately 
$7.9 million, to test the PRA concept in seven states. The 
seven states are Florida, Idaho, Minnesota, Mississippi, 
Montana, Texas, and West Virginia.
    The bill allows the Secretary, using demonstration funding 
available under section 171 of WIA, to award competitive grants 
to states or local boards or a consortium of local boards for 
the purpose of providing PRAs to eligible unemployed workers. 
For purposes of this demonstration, states include the 50 
states, the District of Columbia, the Commonwealth of Puerto 
Rico, and the United States Virgin Islands. The Virgin Islands 
is the only outlying area permitted to participate because no 
other outlying area operates an unemployment insurance program. 
In awarding grants under this demonstration authority, the 
Secretary shall take into consideration awarding grants to 
entities from diverse geographic areas, including rural areas.
    States or local areas that receive a grant under a 
demonstration shall use the grant funds to provide, through a 
local area or areas, eligible individuals with personal 
reemployment accounts. If the recipient is a state, the state 
may choose to use the grant statewide if practicable. The grant 
recipient shall set the amount of the PRAs, but the amount must 
be uniform in the area in which the PRAs are to be available 
and cannot exceed $3,000. U.S. Labor Secretary Elaine Chao 
testified before the Committee on February 12, 2003 that $3,000 
is the average amount that local areas spend on an individual 
to help obtain employment. The $3,000 maximum is a reasonable 
level that allows choice of a wide array of reemployment 
services while maximizing the number of individuals who can be 
served under any funding made available for the new initiative.
    The grant recipients shall establish eligibility criteria 
for the accounts and may establish criteria for the priority in 
the provision of assistance to such eligible individuals. 
However, at a minimum, to be eligible an individual must be 
receiving regular unemployment compensation and be eligible for 
at least 20 weeks of such compensation. Under current law, when 
individuals apply for unemployment compensation benefits, 
states profile such individuals to determine whether they are 
likely to exhaust their benefits. To do this, the state 
identifies permanently separated workers who are not expecting 
recall to their previous employers and then determines whether 
such workers are likely to be long-term benefit recipients. 
Criteria often used when making this determination include 
education, job tenure, changes in employment in the previous 
industry or occupation, and the local unemployment rate. 
Variables for age, gender, and race are prohibited by civil 
rights laws. States will use this profiling system to determine 
those most likely to benefit from this new assistance. To be 
eligible for a PRA, an unemployed person also must be 
identified as likely to exhaust regular unemployment 
compensation and in need of job search assistance to make a 
successful transition to new employment or be an individual 
whose unemployment can be attributed in substantial part to 
unfair competition from Federal Prison Industries, Inc.
    Currently such profiled individuals are referred to the 
One-Stop Career Center system created under WIA for 
reemployment assistance. Therefore, the personal 
reemploymentaccounts will be administered efficiently through the 
easily accessible one-stop delivery system where the unemployed already 
seek assistance in obtaining employment.
    This assistance is in addition to unemployment benefits 
payments if the eligible individual has not exhausted such 
benefits. However, instead of only providing temporary income 
support, as the unemployment compensation system does, H.R. 27 
provides services designed exclusively to help someone to 
return to work.
    Grant recipients also may make individuals who were 
similarly profiled within the 13 week period ending the week 
prior to the week of enactment eligible for assistance, as long 
as such individuals also are eligible for at least 20 weeks of 
regular unemployment compensation. In addition, to address the 
needs of individuals who already may have exhausted all 
unemployment compensation benefits, states may make individuals 
who have exhausted such benefits within 26 weeks prior to the 
date of enactment eligible for a PRA if such individuals are 
enrolled in training and need additional support to complete 
the training or if the individuals are separated from 
employment in an industry or occupation that has experienced 
declining enrollment in the local labor market.
    H.R. 27 specifies that there is no individual entitlement 
to a personal reemployment account.
    An account holder may use his or her PRA to purchase 
intensive services, supportive services, or training. Examples 
of intensive services include one-on-one career counseling and 
short-term prevocational classes. Supportive services include 
child care, transportation assistance, housing assistance, and 
relocation assistance. Generally, an individual could access 
any service or product that would help him or her become 
reemployed.
    Recipients have full flexibility to use their PRAs to 
tailor a package of reemployment services that best meets their 
needs and helps them to get a job of their choice. As such, 
recipients may use the account funds to purchase such services 
through the one-stop delivery system on a fee-for-service basis 
or through other providers, consistent with safeguards 
described in the grant recipient's application. The flexibility 
afforded recipients of PRAs is particularly valuable since 
these individuals are struggling to return to work.
    The grant recipient, through the one-stop delivery system, 
may pay for the costs for such services directly on behalf of 
the recipient, through a voucher system, or by reimbursement to 
the recipient upon receipt of appropriate cost documentation.
    Certain limitations on the use of the accounts apply. 
Recipients may use the PRAs for up to one year from the date of 
the establishment of the account, and for the one-year period 
following the establishment of the account recipients may only 
receive intensive, supportive or training services provided 
through the one-stop delivery system on a fee-for-service basis 
using the account funds. Also, amounts in the PRA are 
nontransferable.
    The Committee wants to ensure eligible individuals have the 
opportunity to make an informed choice when selecting to accept 
a PRA. Consequently, before becoming a recipient of an account, 
the grant recipient, through the one-stop delivery system, 
shall ensure that the individual is informed of the 
requirements applicable to the PRA, the limitations on access 
to services, a description of the allowable services, and the 
conditions for receiving a reemployment bonus. An eligible 
individual must sign an attestation that he or she will comply 
with the requirements relating to the PRA and will reimburse 
the account or one-stop delivery system for any amounts 
expended that are not allowable.
    In addition, the Committee intends for eligible individuals 
to have access to the expertise of the professional career 
counselors available through the one-stop delivery system. H.R. 
27 requires the grant recipient, through the one-stop delivery 
system, to provide an eligible individual the option to create 
a reemployment plan that will identify the employment goals and 
appropriate combination of services selected by the individual 
to achieve the employment goals. In addition, to receive an 
account, an individual must attest in writing that he or she 
was given the option to create such a plan before accepting the 
account.
    The Committee believes that it is important for individuals 
to be aware of the options they have as they pursue employment, 
including the jobs that are in demand in the local areas. As a 
result, H.R. 27 requires each grant recipient, through the one-
stop delivery system, to make available to account holders 
information on training providers that are on the eligible 
training provider list, information available to the one-stop 
delivery system on providers of intensive and supportive 
services, and information relating to occupations in demand in 
the local area.
    No individual will be required to accept a PRA. If an 
individual needs training that costs more than $3,000, the 
individual will have the choice to refuse the PRA and access 
training through the current WIA system.
    However, a wide variety of training services can be 
purchased for under $3,000. Examples of training services that 
can be purchased for $3,000 or less include information 
technology certifications (including Microsoft Systems), 
courses to become a licensed realtor, courses to become a 
certified financial planner, preparation classes for other 
certifications or credential exams, training to become a 
licensed insurance planner, plus numerous courses of training 
available through community colleges. In addition, using a PRA, 
an individual could pay to take a certification exam. The 
Committee notes that during the year the account is in effect 
an individual could obtain, at a minimum, a year's education 
from a public community college, where the average annual 
tuition is $1,518.\2\
---------------------------------------------------------------------------
    \2\ Statistic from National Profile of Community Colleges: Trends 
and Statistics, Third Edition (2000).
---------------------------------------------------------------------------
    The added flexibility available through the use of the 
account will allow some recipients to customize a package of 
services that may not be readily available in all local areas. 
For example, while all local areas are to provide information 
on supportive services in the area, paying for such services is 
optional now. Therefore, if an individual previously received 
child care through an employer and now needs child care 
assistance in order to look for new employment, he or she could 
use the account to pay for child care. In addition, if he or 
she did not meet the current prioritization for training in the 
local area, the recipient still could choose immediately to use 
the funds for training.
    Even if a recipient expends the funds in the account, he or 
she will have access at all times to core services available at 
the One-Stop Career Centers. These services include job search 
and placement assistance, information on available providers of 
services, initial career counseling, and access to a variety of 
labor market information.
    H.R. 27 rewards individuals who find jobs quickly. 
Recipients will be able to keep the balance of the account as a 
cash reemployment bonus if they become reemployed in full-time 
employment within 13 weeks. To encourage workers to stay on the 
job longer, the remaining balance will be paid in two 
installments--60 percent at the time of employment, and the 
remaining 40 percent after six months job retention. The sooner 
one gets a job, the larger the employment bonus will be.
    If an individual becomes unemployed again before the second 
portion of the bonus is provided, he or she may use the amount 
remaining in the account for reemployment services but may not 
receive any additional cash payments.
    Past experiments with cash reemployment bonuses have proven 
to be effective in reducing individuals' weeks of unemployment 
compensation benefits while not compromising the quality of 
jobs and have been cost effective to the government.
    Between 1984 and 1989, four reemployment bonus experiments 
were conducted on unemployment insurance recipients in 
Illinois, New Jersey, Washington, and Pennsylvania. When 
Secretary Chao appeared before the Committee in February 2003, 
she testified that the Department of Labor's evaluations of the 
reemployment bonuses in these states showed that such a bonus 
motivated the recipients to become reemployed, reduced the 
duration of unemployment compensation benefits by approximately 
one week, and resulted in new jobs comparable in earnings to 
those obtained by workers who were not eligible for the bonus. 
An additional evaluation in Illinois showed that bonuses did 
not lead to lower earnings at the worker's next job.
    The final report on the Pennsylvania Reemployment Bonus 
Demonstration, prepared for the Department of Labor by 
Mathematica Policy Research, Inc. and published in September 
1991, expands on these assertions. According to the report, 
``There is no evidence that the bonus offers prompted claimants 
to take less desirable jobs in an effort to qualify for the 
bonus * * *, the first post-unemployment jobs held by bonus-
eligible claimants were similar to their pre-unemployment jobs 
in many respects, including their weekly wage rate.''
    In addition, the Committee believes that labor market 
attachment helps individuals advance in the workplace and 
taking a job may lead to promotions and new career 
opportunities. Being reemployed quickly is important to 
maintaining skills and work habits, and builds self-esteem.
    Staff of the W.E. Upjohn Institute for Employment Research 
recently reviewed available research on the impact of 
reemployment bonuses. The staff working paper, published in 
January 2003, suggests that targeting those most likely to 
exhaust their unemployment compensation benefits could be the 
most cost effective mechanism for providing reemployment 
bonuses. H.R. 27 targets those that have been so profiled.
    Another likely benefit of the reemployment bonuses is a 
reduction in the duration of unemployment compensation benefits 
for those eligible for a bonus. According to Walter A. Corson 
and Robert G. Spiegelman of the Upjohn Institute, who published 
a book titled ``Reemployment Bonuses in the Unemployment 
Insurance System in 2001'', studies have found that, ``the 
availability of unemployment benefits led to voluntary and 
unproductive reduction in work effort, thereby leading to 
unnecessarily high costs to the UI system.'' (page 1) R. Glenn 
Hubbard, then-Chairman of the Council of Economic Advisors, 
corroborated this statement when he testified before the Joint 
Economic Committee of Congress on February, 26, 2003 when he 
stated, ``One advantage of these (personal reemployment) 
accounts compared to traditional unemployment insurance is that 
traditional insurance encourages workers to wait until their 
insurance runs out before finding a new job.'' Mr. Hubbard 
presented evidence that reemployment spikes when benefits 
expire, whether regular or extended benefits.
    In order for a state, local board, or consortium of local 
boards to receive funding under this chapter, the entity must 
submit to the Secretary an application containing such 
information as the Secretary may require. If the applicant is a 
state, the state must provide assurance that the application 
was developed in conjunction with the local board or boards and 
chief elected officials where the personal reemployment 
accounts are to be made available and must specify the methods 
and procedures for providing funds to the local areas where 
accounts are to be made available. Requiring these assurances 
reinforces that both states and local workforce investment 
areas have significant roles to play in the delivery of 
workforce development services. The inclusion of local boards 
in the development of the application will ensure that services 
are integrated at the local level with the one-stop delivery 
system.
    In addition, at a minimum, the application must include a 
description of the criteria and methods to be used for 
determining eligibility for a PRA; a description of the methods 
or procedures to be used to provide eligible individuals 
information relating to services and providers; a description 
of safeguards to ensure that funds from the PRAs are used for 
purposes authorized and to ensure the quality and integrity of 
service providers, consistent with the purpose of providing 
individuals with enhanced flexibility, choice and control in 
obtaining services; and a description of how the entity will 
coordinate the activities carried out as part of the 
demonstration with other employment and training activities 
provided through the one-stop delivery system.
    The Committee intends that safeguards specified through the 
state or local applications will provide accountability for the 
use of federal funds spent through personal reemployment 
accounts and enable recipients to select appropriate service 
providers. Through these safeguards, the state and local areas 
will be able to guard against the use of funds for ``fly-by-
night'' providers that otherwise may try to entice recipients 
into using their services. The provisions are intended to 
maintain individual flexibility and choice while ensuring 
program integrity.
    The Secretary may require from grant recipients the 
collection and reporting on such financial, performance, and 
other program-related information as the Secretary determines 
appropriate to carry out this chapter. The Committee 
anticipates that the Secretary will work with states and local 
areas to establish appropriate tracking mechanisms so that 
information willbe readily available regarding use of funds and 
results achieved. Such information will be essential for conducting an 
evaluation of the assistance. The Committee expects the Secretary to 
work with states and local areas to minimize any administrative burden.
    H.R. 27 requires the Secretary to conduct an evaluation of 
any PRA demonstration. The Secretary shall report the results 
to Congress, including the recommendation of the Secretary with 
respect to the use of personal reemployment accounts as a 
mechanism to assist individuals in obtaining and retaining 
employment.

Realtime writers

    The Telecommunications Act of 1996 requires that by 2006, 
100 percent of all new broadcast programming must be closed 
captioned. However, over the past five years, student 
enrollment in programs that train court reporters to become 
realtime writers has decreased to the point that several such 
programs have closed. Due to the highly specialized nature of 
this service, the workforce is unlikely to expand adequately 
without federal assistance. Estimates suggest that twice the 
number of individuals currently providing these closed 
captioning services for television will be needed to meet the 
government ordered increase in services. Accordingly, H.R. 27 
authorizes the Secretary to award competitive grants, under 
existing demonstration authority in section 171, to qualified, 
accredited college and university programs to promote the 
training and placement of realtime writers. Grant funds could 
be used for recruitment activities, the development and 
provision of training, job placement of individuals as realtime 
writers, and to encourage individuals with disabilities to 
pursue careers in realtime writing.

Business partnership grants

    Section 171 is further amended to allow the Secretary to 
utilize existing demonstration funding to award up to ten 
competitive grants to expand local sector-focused training and 
workforce development in high-growth, high-wage industry 
sectors. Grants may be awarded to a business or business 
partnership, including associations of industry employers and 
employee representatives. Grants may be used to help employers 
in targeted industries retain, support and advance their 
skilled workers; provide capacity building through regional 
alliances to link businesses to the public workforce investment 
system; conduct analyses of skills that are needed in the 
workforce in such industries; develop rigorous training and 
education programs related to employment in high-growth, high-
wage industries; and train workers in the skills and 
competencies needed to obtain or upgrade employment.

National dislocated worker grants

    Currently the Secretary can provide supplemental funds, 
upon request of a state, to assist states and local areas in 
addressing the needs of dislocated workers through national 
emergency grants. H.R. 27 changes the name of ``National 
Emergency Grants'' to ``National Dislocated Worker Grants'' to 
better reflect the population that is to be served through the 
grants. Current law that requires the Secretary to designate a 
dislocated worker office to coordinate the functions of the 
Secretary under title I of WIA relating to employment and 
training activities for dislocated workers, including 
activities carried out under the national emergency grants, is 
repealed to allow the Secretary the discretion to determine how 
the grants could best be administered within the Department of 
Labor.
    The separate funding authorization for the grants that were 
authorized under the Trade Act of 2002 to provide assistance in 
providing health insurance coverage to certain participants in 
the Trade Adjustment Assistance (TAA) program and certain 
beneficiaries of the Pension Benefit Guaranty Corporation is 
maintained.
    The Committee recognizes that spouses of members of our 
Armed Forces often make great sacrifices for their families and 
in service to our country as they move based on their spouses' 
military assignment. Such individuals may not be able to find 
employment that fits their skills and experience. In addition, 
during this time of war when many military reservists and 
National Guard members have been called to active duty, some 
military spouses have chosen to pursue employment to supplement 
their families' incomes. In order to help such spouses with 
obtaining new or better employment, the bill allows states to 
use a national dislocated worker grant to serve a spouse of a 
member of the Armed Forces who is on active duty or full-time 
National Guard duty, or who was recently separated from some 
duties if such spouse is in need of employment and training 
assistance to obtain or retain employment. Some existing 
National Emergency Grants already have included special 
exemptions to provide such services, including those in San 
Diego, CA and Hampton Roads, VA.
    Current law permits ``other entities that demonstrate to 
the Secretary the capability to effectively respond to the 
circumstances relating to particular dislocations'' to apply 
for a national emergency grant. This provision is deleted, 
since the appropriate entities to carry out these grants are 
the grantees in the workforce investment system and entities 
approved by the Governor. No entity in this deleted category 
has received these grants under WIA.

Authorization for national activities

    H.R. 27 authorizes $211 million to be appropriated for 
section 171, pilots and demonstrations, for fiscal year 2006 
and such sums as may be necessary for fiscal years 2007 through 
2011. Of this amount, the Secretary may use up to $125 million 
to fund the community-based job training grants. When combined 
with funding available to the Secretary under the national 
reserve of the consolidated adult grant, up to $250 million 
would be available to provide these grants.
    Such sums as may be necessary are authorized to be 
appropriated for fiscal years 2006 through 2011 to provide 
technical assistance, evaluations and incentive grants. Current 
law reservations within these programs are eliminated to 
provide the Secretary with greater flexibility in determining 
how funds will be utilized.

Faith-based providers

    Faith-based organizations, such as churches, synagogues, 
mosques and faith-based charities are a central part of the 
fabric of communities across America. Many of these 
organizations provide assistance and services to the neediest 
members of society, offering ahelping hand to the least 
fortunate among us. And many of these same faith-based organizations 
can make a vital contribution to federal assistance programs. These 
organizations have a federally protected right to maintain their 
religious nature and character through those they hire.
    Currently under federal law, religious organizations may 
consider religion in employment decisions, and any federal 
legislation governing federal social service or workforce 
development funds should continue to protect the rights of 
religious organizations to hire on a religious basis when they 
take part in federal social services (in this case, job 
training) efforts. President Bill Clinton signed four laws that 
explicitly allow religious organizations to retain their right 
to staff on a religious basis when they receive federal funds, 
including the Substance Abuse and Mental Health Services 
Administration Act; the Community Services Block Grant Act of 
1998; the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (the welfare reform law); and the 
Community Renewal Tax Relief Act of 2000. In Corporation of the 
Presiding Bishop v. Amos, a unanimous Supreme Court upheld the 
freedom to hire those who share the religious organization's 
beliefs. Faith-based organizations cannot be expected to 
sustain their religious mission without the ability to employ 
individuals who share the tenets and practices of their faith 
because it is that faith that motivates them to serve their 
neighbors in need.
    However, often these faith-based organizations have been 
excluded from delivering services for which the federal 
government commits substantial resources--many simply because 
they have a religious name or identity. President Bush has 
called on his Administration and Congress to remove these 
barriers. Accordingly, the programmatic provisions of WIA are 
amended in this bill to restore the civil liberties of 
religious organizations participating in the program. This 
language incorporates the current protections regarding 
employment decisions by religious organizations contained in 
Title VII of the Civil Rights Act. This change is supported by 
a diverse coalition including the Center for Public Justice, 
the Coalition to Preserve Religious Freedom, World Vision, the 
National Center for Neighborhood Enterprise, the Latino 
Coalition for Faith and Community Initiatives, the National 
Commander of the Salvation Army, Family and Children Faith 
Coalition, and Evangelicals for Social Action. Consequently, 
faith-based organizations can now serve their communities by 
participating in job training services without being forced to 
give up their civil liberties.

Administration

    Under current law, the Secretary must investigate each 
allegation of violations of the requirements of title I of WIA. 
This provision is amended to authorize investigations of such 
allegations since it may not be necessary or appropriate to 
conduct an investigation of each one.
    H.R. 27 requires the Secretary to submit states' quarterly 
reports to the House Committee on Education and the Workforce 
and the Senate Committee on Health, Education, Labor and 
Pensions to ensure the committees have sufficient information 
to evaluate the program.
    Current law prohibits use of WIA funds for employment 
generating activities, economic development activities and 
similar activities that are not directly related to training 
for eligible title I participants. The bill clarifies this 
restriction in order to encourage closer ties between workforce 
development and economic development activities. The new 
language only would prohibit such activities if they do not 
relate to the entry in employment, retention of employment, or 
increases in earnings.
    Under current law, funds under title I of WIA are to be 
made available for obligation only on the basis of a program 
year beginning on July 1 in the fiscal year for which the 
appropriation is made. Youth funds were made available on April 
1 of any fiscal year. The bill would delete this exception. 
This provision was important when summer employment 
opportunities were a key part of the youth strategy. Having the 
funds available on April 1 allowed local areas to plan their 
summer activities. Since the youth program now will be focused 
on services to out-of-school youth, the funds should be made 
available on July 1, the same date as are the funds for the 
consolidated adult program. This change will also reduce 
planning and reporting burdens on states and local areas.
    Under current law, states have three years to spend each 
year's allotment. H.R. 27 clarifies that this allowance also 
applies to Native American grantees.
    H.R. 27 provides new waiver authority for the Secretary. 
DOL will establish an expedited process for extending waivers 
approved for one state to additional states, provided they meet 
other applicable requirements. In administering the waiver 
process it has been found that some waivers to address 
particular issues appear to be appropriate for all states, but 
under current authority each state must go through a detailed 
application process to have a waiver extended to their state. 
This provision would allow the Secretary to expedite that 
process.
    In addition, H.R. 27 prohibits using funds provided under 
WIA from being used to establish or operate stand-alone fee-
for-service enterprises that compete with private sector 
employment agencies. Such an enterprise does not include one-
stop centers. The Committee understands that in some local 
areas, local boards have established free-standing enterprises 
specifically designed to compete with private sector employment 
agencies. This is contrary to the intent of WIA.

                       TITLE II--ADULT EDUCATION

    The purpose of the federal adult education program is to 
ensure that eligible adults have opportunities to improve their 
basic and literacy skills in high-quality research-based 
programs that will equip them to succeed in the next step of 
their education and employment.
    As we begin the 21st Century, the need for an educated 
populace is critical to our success in maintaining our place in 
the knowledge-based economy, and providing opportunities for 
all our citizens to reach their highest potential. But there 
are major challenges ahead of us. In 2001, English as a Second 
Language (ESL) enrollment was 42 percent of the total 
enrollment in state-administered adult education programs. The 
U.S. Census Bureau data from 1999 show that full-time workers, 
18 years and older, who have not completed high school earn an 
average of $23,447 per year. The average for all workers is 
$43,396. Those without a high school diploma or its equivalent 
on average earn almost half the salary of the average worker. 
Employers searching for qualified employees over the past five 
years have noticed an increasing trend in the number of 
employees lacking the basic skills needed in the workplace. 
Increasing numbers ofbeginning college students are required to 
take basic skills courses in reading and math before moving into the 
standard college program.
    Currently the federal adult education program serves 2.7 
million adults in more than 5,000 federally sponsored centers 
with 53,000 part time teachers and 10,000 full time teachers.
    The 21st Century Workforce Commission reported that, ``As 
never before, there is a premium on American workers who are 
able to read and understand complex material, think 
analytically, and use technology efficiently. To stay 
competitive in the knowledge-based economy employers will need 
workers who can read, write, compute, solve problems, and 
communicate well.''
    In reauthorizing Title II, the Adult Basic Skills and 
Family Literacy Education section of WIA, the Committee has 
placed additional emphasis on ensuring that states and local 
providers offer research validated basic skills instruction in 
reading, writing, English language acquisition, and math. 
Making sure that these skills are solidly in place for all 
students is a priority, whether it is those with limited 
English proficiency, high school dropouts who have not mastered 
these vital skills, or even high school graduates who have 
slipped through the cracks in the system and need additional 
instruction in the basics.

Purpose

    In revising the purpose of Title II the Committee believes 
that clearly defining the skills that are necessary for an 
adult to become educated enough to compete in a knowledge-based 
economy is essential. Reading with comprehension, writing with 
clarity and purpose, speaking the English language proficiently 
and fluently, and mastering the basic computational math skills 
remain essential if an individual is to move on to higher 
levels of education and employment. To make sure that states 
and local providers clearly understand the terms included in 
this reauthorization the definitions section has been expanded, 
or modified to correspond with those in the No Child Left 
Behind Act. The Committee specifically added definitions for 
the ``essential components of reading instruction,'' 
``reading,'' and ``scientifically based reading research.''

Measuring success

    The Committee has expanded the accountability provisions 
for both state and local providers. The requirement for 
measuring improvement in ``basic skills levels in reading, 
writing, English language acquisition, and math, leading to 
proficiency in each skill'' have been added to the ``eligible 
agency performance measures'' that are in current law. Course 
offerings in the basic skills must include ``sufficiently 
rigorous instructional practices'' as to assure continuous and 
significant improvement. Progress in these skills must be 
``objective, quantifiable, and measurable'' if the purposes of 
this title are to be achieved.
    The Committee also has provided funds for states to use in 
offering eligible providers of adult education technical 
assistance and professional development training on ways to 
``develop, implement and report measurable progress in 
achieving the objectives of this title.'' States are required 
to include in their state plans ``how they will evaluate and 
measure annually such effectiveness on a grant-by-grant 
basis,'' and how they will hold eligible providers accountable 
in ``improving the academic achievement of participants in 
adult education programs.'' The Committee believes that 
cooperation and coordination between state and local providers 
in offering research based instructional programs in reading, 
writing, English Language Acquisition and math will ensure that 
participants will reach their goals. States are authorized to 
``use technical assistance, sanctions, and rewards (including 
allocation of grant funds based on performance and termination 
of grant funds based on nonperformance'' to hold local adult 
education providers accountable.

Coordination between adult educators, employers, and providers of 
        higher education

    The Committee believes that it is essential that adult 
educators work closely with ``State Workforce Investment 
Boards, state agencies on higher education, representatives of 
business and industry, immigrant assistance organizations, 
including community-based and faith based organizations'' in 
providing appropriate skill development programs for eligible 
adults.

National leadership activities

    The Committee has authorized national activities to assist 
states and local providers in developing valid, measurable, and 
reliable performance data, and in using such performance 
information for the improvement of adult basic skills and 
family literacy education programs. The development of model 
basic and workplace skills education programs, and their 
effective integration with employment services are important 
components of improving the delivery of adult education 
programs. In addition, the Committee has encouraged support for 
the development of a more efficient delivery system of 
technology-based, basic skills programs and materials for adult 
reading, writing, English language acquisition, math, and 
family literacy education.

Authorization

    Title II (A) is authorized at $590,000,000 for fiscal year 
2006 and such sums as are necessary for fiscal years 2007 
through 2011.

              SECTION 242--NATIONAL INSTITUTE FOR LITERACY

    The National Institute for Literacy (NIFL) was established 
in 1991, and its mission was primarily focused on disseminating 
information on adult literacy. In 1998, the mission was 
expanded to include dissemination on scientifically based 
reading research on 
K-3 programs as identified through the Reading Excellence Act 
and the Even Start Act. More than $96 million has been 
appropriated for NIFL since 1991. In this reauthorization, the 
National Institute for Literacy is re-focused on dissemination 
of scientifically based research in reading at all levels of 
instruction, identification of model programs in professional 
development for reading teachers, and assistance with state and 
local schools, adult education programs, and family literacy 
programs to improve their delivery of reading instruction.

Purpose

    The mission of NIFL has been modified to be consistent with 
the provisions of the No Child Left Behind Act (NCLB) for 
national leadership in ``promoting reading research, reading 
instruction, and professional development in reading based on 
scientifically based research.'' In addition to the $6.7 
million currently authorized for NIFL an additional $7 million 
is authorized under Part B of NCLB and the Even Start Family 
literacy program for NIFL. The Committee has modified the 
mission to focus on widely disseminating ``information on 
scientifically based reading research to improve academic 
achievement for children, youth, and adults.'' Since learning 
to read is the gateway skill that opens the door to all other 
learning, the Committee believes that the most effective way to 
reduce the number of illiterate adults is to educate children 
and youth before they graduate from high school. That process 
will take time, and thus the Committee is committed to ensuring 
that adults receive the most effective instruction in reading 
that is available.

Establishment

    NIFL is to be administered by a Director appointed by the 
Secretary of Education in consultation with the Secretary of 
Labor, and the Secretary of Health and Human Services. The 
Director manages the day-to-day activities of the Institute. 
The Committee has ensured that there will be coordination 
between other federal agencies, such as the Departments of 
Labor, Health and Human Services, and the National Institute 
for Child Health and Human Development as part of an 
interagency group consisting of the three Cabinet Departments 
referred to above.

Administration and accountability

    A biennial report is to be submitted to the Committee on 
Education and the Workforce in the House, and the Committee on 
Health, Education, Labor, and Pensions in the Senate providing 
a comprehensive and detailed description of the Institute's 
operations, activities, financial condition, and 
accomplishments in carrying out the purposes of the Institute, 
along with a summary description of how the Institute will 
advance its mission in the next biennium.

National leadership

    It is the intent of the Committee that the National 
Institute for Literacy (NIFL) will work closely with the 
Secretary of Education, in particular with the Reading First 
Director, the Director of the Institute for Education Sciences, 
the Director of the National Institute for Child Health and 
Human Development, and the National Research Council in 
advancing scientifically based reading instruction for 
children, youth and adults. For decades reading scores for 
children, youth and adults have been inadequate for a nation 
with more resources and programs dedicated to improving reading 
instruction than any other nation on earth. Under the No Child 
Left Behind Act (NCLB), the budget for reading instruction was 
tripled, and the Committee believes it is essential to provide 
the currently available information on scientifically based 
reading instruction for teachers, parents, school boards, state 
legislators, Members of Congress, and federal agencies.
    The National Institute for Literacy will ``establish a 
national electronic database and Internet site describing and 
fostering communication on scientifically based programs in 
reading, writing, and English language acquisition for 
children, youth, and adults, including professional development 
programs.'' The Committee continues to be specifically 
concerned that the ``Literacy Information And Communications 
System (LINCS),'' has strayed from the specific intent of 
Congress and continues to be abused by those who have a 
political agenda. The ``national electronic database'' 
envisioned by Congress is to be specifically designed to 
provide adult educators, parents, teachers and policymakers 
with the most up to date information on scientifically based, 
effective instructional practices on reading, writing, 
speaking, English language acquisition and math knowledge. The 
Committee has made it clear that debating particular political 
philosophies, or lobbying on behalf of any legislation is 
outside the mission of the NIFL, and should be stopped 
immediately. The Committee believes that the best and most 
effective way to provide the American public with the tools 
necessary to reduce and ultimately eliminate the scourge of 
illiteracy is to widely disseminate objective, unbiased 
information on reading instruction and not promote a political 
agenda through a federally-funded electronic database.

Definitions

    The Committee has included the definitions of 
``scientifically based reading research,'' ``reading'' and the 
``essential components of reading instruction'' that have the 
meanings given to those terms in NCLB. It is important to have 
definitions that are consistent throughout federal law so that 
states and local providers understand the intent of Congress in 
federal reading policy.

             TITLE III--AMENDMENTS TO THE WAGNER-PEYSER ACT

    The Wagner-Peyser Act authorizes the current employment 
services system and the employment statistics system. Because 
the employment services funding is part of the consolidated 
adult grant under WIA, and because the employment services 
functions are being assumed into the one-stop delivery system, 
H.R. 27 repeals sections one through thirteen of the Wagner-
Peyser Act. These sections authorize the stand-alone employment 
services system.
    H.R. 27 amends the current employment statistics system 
authorized under the Wagner-Peyser Act and renames the system 
the Workforce and Labor Market Information System. The 
requirement for the Secretary to prepare an annual plan for 
management of the nationwide employment statistics system is 
eliminated. This plan has not proven useful. In place of the 
plan requirement is an authorization for the Secretary to 
assist in the development of national electronic tools that may 
be used to facilitate the delivery of core services and provide 
workforce information to individuals through the one-stop and 
other appropriate delivery systems.
    The bill eliminates the requirement that the governor 
designate a state agency to oversee the labor market 
information system and gives the governor flexibility to 
operate the system as appropriate for the state's delivery 
system. Our rapidly changing economy and labor markets require 
a new, flexible, demand-driven workforce investment system that 
is fully aligned with the state's economic development 
strategies. This system, in turn, requires a broader view 
ofworkforce, labor market, and economic data and information than the 
traditional labor market information system of the past. Governors need 
to have the flexibility to determine how this function is performed and 
not be bound by outdated institutional arrangements. Through this 
change, the Committee recognizes that quality workforce information is 
more important than ever; it should be utilized as a tool to drive 
system investments, including types of training needed by individuals 
to compete in local labor markets, the development of targeted high 
growth strategies as part of economic development, and use by 
businesses looking to grow and compete both locally and globally.
    The current law provisions relating to consultations 
between the Secretary and state employment statistics officials 
would be simplified to provide that the Secretary, working 
through the Bureau of Labor Statistics (BLS) and the Employment 
and Training Administration, must regularly consult with 
representatives from the designated state agencies on 
strategies for improving the workforce and labor market 
information system. At least twice each year, the Secretary, 
working through BLS, would conduct formal consultations on BLS 
programs with representatives, elected by and from state 
directors affiliated with state entities, from each of the ten 
Department of Labor regions. This formal consultation and 
election process is similar to current law.
    The authorization for appropriation for the Workforce and 
Labor Market Information System is extended to 2006 through 
2011.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

    The Rehabilitation Act of 1973 is the nation's major 
program providing comprehensive vocational rehabilitation (VR) 
services to help persons with disabilities become employable 
and achieve full integration into society. The primary program 
within the Act is the state grant VR program under Title I. It 
provides formula grant funds to states for VR services to 
assist persons with significant disabilities to become employed 
in integrated work settings.
    The 1998 reauthorization of this Act simplified certain 
aspects for VR consumers, expanded consumer choice of services 
and providers, and required that the VR system be coordinated 
with the WIA system. The last reauthorization also required VR 
consumers to be involved in their VR planning process, giving 
them more choice in the development of their individualized 
plans for employment. The Committee believes these changes are 
impacting the VR system positively and are resulting in 
improved outcomes for clients. As a result, few changes are 
deemed necessary in this Act.
    The President's Commission on Excellence in Special 
Education suggested that the transition from Individuals with 
Disabilities Education Act (IDEA) services to postsecondary 
education, employment, and independent living needed 
significant improvement. Therefore, H.R. 27 contains new 
language requiring states to set clear goals about improving 
the alignment of transition services in both vocational 
rehabilitation and special education. There is also new 
language directing states to conduct an assessment of 
transition services and how those services are coordinated with 
services under IDEA. The bill provides additional coordination 
with IDEA services by clarifying that rehabilitation counselors 
(under VR) may use alternative means of communication (such as 
video conferencing and conference calls) when participating in 
Individualized Education Program meetings under IDEA.
    The Committee recognizes that with unemployment rates of 
adults with disabilities approaching 70 percent, the need to 
improve the transition of youth with disabilities from school 
to postsecondary education and employment is significant. With 
an increased focus on improved results in education, providing 
a successful transition to post-school employment or education 
is an essential component of providing services to individuals 
with disabilities.
    A 2003 General Accounting Office (now known as the 
Government Accountability Office, GAO) report states that poor 
linkages between schools and youth service providers and a lack 
of community work experience impedes the successful transition 
of youth. Without the involvement of agencies that support 
youth with disabilities, the responsibility for transition is 
left to special education teachers who may not have the 
capacity or training to access the necessary community 
resources. The involvement of the VR program in transition 
provides students with disabilities and special education 
teachers with assistance, training, and access to community 
resources that can be critical to success. However, many youth 
with disabilities who are eligible for VR services while in 
high school do not access them because they lack knowledge of 
the program or the program does not have the capacity to serve 
all those who are eligible.
    The Committee recognizes that state vocational 
rehabilitation agencies currently have an affirmative 
obligation to provide transition services to students with 
disabilities as they prepare to leave secondary education and 
move on to post-secondary education, employment, and 
independent living. Despite this obligation, the state 
vocational rehabilitation agencies have not sufficiently 
addressed this important problem. To improve and expand the 
provision of vocational rehabilitation services to students 
with disabilities during their transition years, the Committee 
makes several improvements to the Rehabilitation Act. In order 
to improve planning and coordination, states will be required 
to address the needs of students with disabilities as a part of 
the state's comprehensive statewide assessment of vocational 
rehabilitation needs and to describe the methods to be used to 
expand and improve services to students with disabilities, 
including the coordination of services designed to facilitate 
the transition of such students to post-secondary education or 
employment. The bill establishes a trigger to target $50 
million for the expanded transition services beginning in the 
first year that the appropriation under section 100(b) exceeds 
the fiscal year 2004 appropriation by $100 million. States 
would be required to use these targeted funds to carry out 
programs or activities to improve and expand services that 
facilitate student transition, improve the achievement of post-
school goals, support training and technical assistance to 
personnel, support outreach activities, and to provide 
vocational guidance, career exploration services, and job 
search skills to students with disabilities.
    The bill also changes the position that heads the 
Rehabilitation Services Administration within the Department of 
Education from a Commissioner appointed by the President and 
approved by the Senate to a Director appointed by the 
Secretary. The Committee notes that this is a simple and 
important change to the administrative functioning of the 
Department of Education to help make the Department operate 
more effectively and ensure that there is a consistent policy 
view over all the Department's programs that deal with 
disability policy. Thischange is consistent with President 
Bush's Management Agenda, through which the President is calling on 
agencies to reduce the number of managers and organizational layers 
thereby reducing the time it takes to make a decision and ensuring 
there is one unified voice speaking for the Department on disability 
policy.
    The Assistant Secretary of Special Education and 
Rehabilitation Services oversees the Director of the Office of 
Special Education Programs and the Director of the National 
Institute of Disability Research and Rehabilitation. This 
proposal places the Rehabilitation Services Administration on 
equal footing with those two important offices, and reaffirms 
the importance of coordinating federal policy across these 
three vital offices through the office of the Assistant 
Secretary.
    Administration after Administration has struggled with 
having two individuals appointed by the President and confirmed 
by the Senate working within the same office. Providing this 
clarity will establish a clear sense of purpose to these 
offices, enabling the Department to focus more on providing 
high-quality services to individuals with disabilities.
    H.R. 27 makes two important additions to programs involving 
protection and advocacy programs. In the Client Assistance 
Program authorized in section 112 of the Act, the American 
Indian Consortium is added as an entity eligible to receive 
funds under the Act to provide protection and advocacy services 
related to assistive technology to their clients. In the 
Protection and Advocacy of Individual Rights program, the 
Committee included language allowing protection and advocacy 
systems to retain their program income for one additional year. 
The Committee is very interested in the effective use of these 
funds and requires the protection and advocacy systems to 
report on their use of any carryover money to ensure the 
transparency and accountability of these funds.
    On October 24, 2004 the President signed H.R. 4278, the 
Assistive Technology Act of 2004, into law to reauthorize and 
reform the Assistive Technology Act of 1998. Congress made a 
series of significant changes to improve the structure and 
operation of that important program. H.R. 27 follows up on that 
reform legislation by further incorporating those reforms into 
the Rehabilitation Act of 1973 by ensuring that the state 
vocational rehabilitation programs coordinate and cooperate 
with the lead agency responsible for assistive technology to 
ensure that individuals with disabilities have access to 
assistive technology to improve their educational, employment, 
or independent living opportunities. In addition, the bill 
provides state vocational rehabilitation programs the option to 
coordinate their activities with programs authorized under the 
Assistive Technology Act of 1998, including device loan, device 
demonstration, device reutilization, and alternative financing 
programs.
    The bill authorizes programs under the Rehabilitation Act 
of 1973 through 2011. H.R. 27 also reauthorizes the Helen 
Keller National Center Act through 2011.

                 TITLE V--TRANSITION AND EFFECTIVE DATE

    Title III contains transition provisions and the effective 
date. The Secretary shall take such actions as the Secretary 
determines to be appropriate for the orderly implementation of 
this Act. Except as otherwise provided by this Act, the 
amendments made by this Act are to take effect upon enactment.

                      Section-by-Section Analysis

    Section 1. Designates the short title of this act as the 
``Job Training Improvement Act of 2005.''
    Section 2. Establishes the table of contents for the Act.
    Section 3. Specifies that, if there is an amendment or a 
repeal in the Act, unless otherwise specified it is considered 
made to the Workforce Investment Act of 1998.

 TITLE I. AMENDMENTS TO TITLE I OF THE WORKFORCE INVESTMENT ACT OF 1998

    Section 101. Modifies and adds definitions under this 
Title.
    Section 102. Amends the purposes of the Workforce 
Investment Act of 1998 (WIA).
    Section 103. Amends section 111 to stipulate the members 
and functions of the State Workforce Investment Boards and 
authorizes the State board to hire the necessary staff to carry 
out this mandate.
    Section 104. Amends Section 112 to change the state 
planning cycle from a 5-year strategy, to a 2-year strategy and 
revise the contents of the state plan.
    Section 105. Amends Section 116 to clarify the automatic 
designation of local areas and allows regional planning in lieu 
of separate local plans.
    Section 106. Amends section 117 of WIA to specify the 
composition and functions of the Local Workforce Investment 
Boards. Eliminates the requirement for Youth Councils.
    Section 107. Amends section 118 to change the local 
planning cycle from 5-years to 2-years and promote continuous 
improvement in service delivery.
    Section 108. Amends section 121 to add Ticket to Work, 
child support, employment and training programs at the Small 
Business Administration and programs for individuals with 
disabilities as new optional partner programs within the one-
stop delivery system. Moves the creation of the one-stop 
delivery system from section 134 to section 121, requires State 
boards to certify one-stop centers for the purposes of awarding 
infrastructure funds, and requires one-stop partners to 
contribute funds for infrastructure grants.
    Section 109. Amends section 122 to allow Governors to 
identify eligible providers of training services.
    Section 110. Amends section 123 to allow local boards to 
award grants or contracts to eligible providers of youth 
activities.
    Section 111. Amends chapter 4 of WIA to target out-of-
school youth, while allowing States and local areas to serve 
some in-school youth. Allots 25% of the appropriation for any 
fiscal year, up to $250 million, for national Youth Challenge 
Grants. Amends the allotment of funds to states and local 
areas, youth participant eligibility, and statewide and local 
youth activities.
    Section 112. Amends chapter 5 of WIA to establish a 
comprehensive program of employment and training activities for 
adults. The section amends the allotment of funds to states, 
changes the allotment formula for states and local areas, 
amends the reallotmment provisions, retains current local 
administrative cost limit, and removes references to separate 
dislocated work funding stream. The section also amends the use 
of funds for employment and training activities and the State 
and local level and removes the current sequencing of services 
requirements.
    Section 113. Simplifies the performance accountability 
system established in section 136 and authorizes state and 
local incentive grants.
    Section 114. Amends section 137 to authorize appropriations 
for all programs in the legislation for 2006 through 2011.
    Section 115. Amends subtitle C to clarify the business and 
community participation under the Job Corps program and 
authorize appropriations through 2011.
    Section 116. Amends the Native American Programs authorized 
under section 166.
    Section 117. Amends the Migrant and Seasonal Farmworker 
Programs authorized under section 167.
    Section 118. Makes a technical amendment to the Veterans' 
Workforce Investment Programs authorized under section 168.
    Section 119. Amends section 169 to authorize Youth 
Challenge Grants to assist youth in acquiring education, 
credentials, and employment experience.
    Section 120. Amends Section 170 to provide technical 
assistance and support training to dislocated workers.
    Section 121. Amends section 171(b) and (c) to clarify the 
Demonstration, Pilot, Multiservice, Research and Multi-State 
projects.
    Section 122. Amends section 171(d) to authorize the 
Secretary to establish and implement community-based job 
training.
    Section 123. Amends section 171 by adding Personal 
Reemployment Accounts demonstration authority.
    Section 124. Amends section 171 by adding Training for 
Realtime Writers demonstration authority.
    Section 125. Amends section 171 by adding Business 
Partnership Grants demonstration authority.
    Section 126. Changes the program in Section 173 entitled 
``National Emergency Grants'' to ``National Dislocated Worker 
Grants'' and amends the uses of the grants.
    Section 127. Extends the authorization of appropriations in 
Section 174 of the Workforce Investment Act for national 
activities through 2011.
    Section 128. Amends the limitations in section 181(e).
    Section 129. Amends Section 188 to apply current law 
exemption for Faith Based Organizations with respect to hiring 
people of a particular religion.
    Section 130. Amends administrative provisions in Section 
189 and expands the Secretary's waiver authority.
    Section 131. Clarifies in Section 195 that no funds under 
this act shall be used to establish fee-for-service agencies 
that compete with private sector employment agencies.

 TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY EDUCATION

    Section 201. Establishes the table of contents of Title II.
    Section 202. Amends Title II to read as follows:

 TITLE II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY EDUCATION

    Section 201. States the short title as the `Adult 
Education, Basic Skills, and Family Literacy Education Act'.
    Section 202. Sets forth the purpose of this Title.
    Section 203. Modifies and adds definitions under this 
Title.
    Section 204. Sets forth provisions exempting home schools 
from requirements of this Act.
    Section 205. Contains provisions pertaining to the 
authorization of appropriations.

                     CHAPTER 1. FEDERAL PROVISIONS

    ``Section 211. Contains provisions pertaining to 
reservation of funds; sets forth provisions regarding grant 
eligibility, purpose, and allotment of funds, states the 
definition of a qualifying adult; and contains provisions 
regarding eligibility for the Freely Associated States.
    ``Section 212. Establishes a performance accountability 
system; sets forth performance measures and indicators; and 
contains provisions regarding the submission of an annual 
report by eligible agencies and requirement on its 
dissemination by the Secretary.
    ``Section 213. Sets forth provisions regarding incentive 
grants for states.

                     ``CHAPTER 2. STATE PROVISIONS

    ``Section 221. Sets forth provisions regarding state 
administration and state-imposed requirements.
    ``Section 222. Contains provisions regarding state 
distribution of funds and sets forth requirements regarding 
non-federal matching contributions for eligible agencies.
    ``Section 223. Contains provisions regarding allowable 
state leadership activities.
    ``Section 224. Requires the submission of a six-year state 
plan by grant applicants and sets forth requirements for six-
year state plans, plan revisions, and plan approval.
    ``Section 225. Authorizes a program for corrections 
education and education for institutionalized individuals; and 
states definitions of criminal offender and correctional 
institution.

                     ``CHAPTER 3. LOCAL PROVISIONS

    ``Section 231. Contains provisions regarding grants and 
contracts for local providers and local activities; sets forth 
provisions regarding direct and equitable access for eligible 
providers; and requires eligible providers to establish a set 
of measurable goals.
    ``Section 232. Sets forth provisions regarding requirements 
for local grant and contract applications.
    ``Section 233. Contains provisions regarding local 
administrative cost limits.

                    ``CHAPTER 4. GENERAL PROVISIONS

    ``Section 241. Requires that federal funds supplement not 
supplant state or local funds expended and contains provisions 
regarding the maintenance of effort.
    ``Section 242. Establishes the National Institute for 
Literacy and contains provisions with regard to the purpose and 
administration of this Part.
    ``Section 243. Requires the Secretary to establish and 
carry out a national leadership activities program and contains 
provisions regarding allowable activities.''.

             TITLE III. AMENDMENTS TO THE WAGNER-PEYSER ACT

    Section 301. Amends the Wagner-Peyser Act by striking 
Sections 1 through 13 (29 U.S.C. 49 et seq.). Also amends 
section 15 of the Act to require the Secretary of Labor to 
oversee a nationwide workforce and labor market information 
system; sets forth provisions with regard to system content, 
confidentiality of information, system responsibilities, and 
immunity from legal process; authorizes the Secretary to assist 
in the development of national electronic tools to provide 
services; requires the Secretary to consult with 
representatives of State agencies involved in carrying out 
workforce information strategies; and authorizes appropriations 
for the program through 2011.

         TITLE IV. AMENDMENTS TO THE REHABILITATION ACT OF 1973

    Section 401. Amends Section 2(a) of the Rehabilitation Act 
of 1973 (29 U.S.C. 701(a)) to add an additional finding with 
regard to expanding services for students with disabilities.
    Section 402. Amends Section 3(a) of the Rehabilitation Act 
of 1973 (29 U.S.C. 702(a)) with regard to the Commissioner of 
the rehabilitation services administration.
    Section 403. Amends The Rehabilitation Act of 1973 (29 
U.S.C. 701 et seq.) to replace ``Commissioner'' with 
``Director.''
    Section 404. Amends Section 7 of the Rehabilitation Act of 
1973 (29 U.S.C. 705) by defining terms.
    Section 405. Amends Section 101(a) (29 U.S.C. 721(a)) by 
including additional transition services in the state plan.
    Section 406. Amends Section 103 of the Rehabilitation Act 
of 1973 (29 U.S.C. 723) with regard to transition services.
    Section 407. Amends Section 106(a) of the Rehabilitation 
Act of 1973 (29 U.S.C. 726(a)) with regard to standards and 
indicators.
    Section 408. Amends Section 110 of the Rehabilitation Act 
of 1973 (19 U.S.C. 730) with regards to reservation for 
expanded transition services.
    Section 409. Amends Section 112 of the Rehabilitation Act 
of 1973 (19 U.S.C. 730) to authorize the American Indian 
Consortium to receive funds under the Client Assistance 
Program.
    Section 410. Amends Section 509 of the Rehabilitation Act 
of 1973 (19 U.S.C. 730) to allow the Protection and Advocacy of 
Individual Rights program to retain program income generated by 
the system for up to one additional year after it was 
generated.
    Section 411. Makes changes to Section 705(b)(5) of the 
Rehabilitation Act of 1973 (29 U.S.C. 796d(b)(5)) regarding the 
selection of the chairperson.
    Section 412. Amends The Rehabilitation Act of 1973 to 
provide authorization of appropriations through 2011.
    Section 413. Amends the table of contents in Section 1(b).
    Section 414. Authorizes appropriations for the Helen Keller 
National Center Act for 2006 through 2011.

                 TITLE V. TRANSITION AND EFFECTIVE DATE

    Section 501. Grants the Secretary of Labor authority to 
take appropriate action to provide for the orderly 
implementation of this Act.
    Section 502. States that this Act and the amendments made 
by this Act shall take effect on the date of its enactment.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. The purpose of H.R. 27 is enhance the workforce 
investment system created under the Workforce Investment Act of 
1998 by strengthening one-stop career centers, providing for 
more effective governance arrangements, promoting consumer 
choice, establishing a more targeted approach to serving youth, 
and improving performance accountability. The bill also 
improves our nation's adult education system using practices 
based on scientific research, and enhances vocational 
rehabilitation services for individuals with disabilities 
seeking to return to or enter the integrated workplace. The 
bill does not prevent legislative branch employees from 
receiving the benefits of this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. H.R. 27 amends the Workforce Investment Act and the 
Vocation Rehabilitation Act. As such, the bill does not contain 
any unfunded mandates.


                        Committee Correspondence

                                  House of Representatives,
                                 Washington, DC, February 17, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number five on amendment number nine offered by 
Representative Van Hollen. Had I been present, I would have 
voted against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                           Thomas E. Petri,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 17, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 3 on the amendment offered by 
Representative Owens. Had I been present, I would have voted 
against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                               Sam Johnson,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 17, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 1 on the 2nd amendment offered by 
Representative Holt, and rollcall number 2 on the 4th amendment 
offered by Representative Ryan. Had I been present, I would 
have voted against both amendments.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                           Charlie Norwood,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                                 February 23, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Boehner: Due to car mechanical problems, I 
was unavoidably delayed in route to the February 17th Education 
and the Workforce Committee meeting regarding the consideration 
of H.R. 27. Had I arrived in a timely manner, I would have 
voted in favor of committee passage of said legislation. I 
would appreciate your including this letter in the Committee 
Report to accompany H.R. 27. Thank you for your attention to 
this matter. Best wishes.
            Sincerely,
                                       Todd Russell Platts,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 22, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
absent from amendment number 7 offered by Representative Owens 
during Committee consideration of H.R. 27, ``Job Training 
Improvement Act of 2005.'' Consequently, I missed rollcall 
number 3 on the amendment. Had I been present, I would have 
voted against the amendment to H.R. 27.
    I would appreciate the inclusion of this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                         Patrick J. Tiberi,
                                        Representative to Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 22, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 2 on the 4th amendment offered by 
Representative Ryan, And en block rollcall number 7 which 
includes the 12th amendment offered by Representative Kildee, 
the 14th amendment offered by Representative Woolsey, the 17th 
amendment offered by Representative Woolsey, and the 19th 
amendment offered by Representative Kildee. Had I been present, 
I would have voted against the amendment.
    I would appreciate the inclusion of this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                                Ric Keller,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 24, 2005.
Hon. John Boehner,
Chairman, Committee On Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear John: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed roll call number 2 on amendment 4 offered by 
Representative Tim Ryan. Had I been present, I would have voted 
against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Best Wishes,
                                               Tom Osborne,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                                 February 17, 2005.
Hon. John Boehner,
Chairman, Committee On Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed roll call number 4 on the amendment numbered 8, offered 
by Representative Scott. Had I been present, I would have voted 
against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                             Jon C. Porter,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 17, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed roll call number three, the vote on amendment number 
seven, offered by Representative Owens. Had I been present, I 
would have voted against the amendment.
    I would appreciate your including this letter in the 
Committee Report that is to accompany H.R. 27. Thank you for 
your attention to this matter.
            Sincerely,
                                                        Bob Inglis.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 18, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed roll call number 1 on the 2nd amendment offered by 
Representative Holt; and roll call number 3 on the 7th 
amendment offered by Representative Owens. Had I been present, 
I would have voted against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                            Cathy McMorris,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 25, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn HOB, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 3 on amendment #7 offered by 
Representative Owens. Had I been present I would have voted 
against the amendment.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
consideration to this matter.
            Sincerely,
                                           Luis G. Fortuno,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 25, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 1 on the 2nd amendment offered by 
Representative Holt; rollcall number 4 on the 8th amendment 
offered by Representative Scott; and en bloc rollcall number 7, 
which included amendment number 12 offered by Representative 
Kildee, amendment number 14 offered by Representative Woolsey, 
amendment number 17 offered by Representative Woolsey, and 
amendment number 19 offered by Representative Kildee. Had I 
been present I would have voted against these amendments.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                              Bobby Jindal,
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 18, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 3 on amendment number 7 offered by 
Representative Owens and en bloc rollcall number 7, which 
included amendment number 12 offered by Representative Kildee, 
amendment number 14 offered by Representative Woolsey, 
amendment number 17 offered by Representative Woolsey, and 
amendment number 19 offered by Representative Kildee. Had I 
been present, I would have voted against all of the amendments.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                   Charles W. Boustany, Jr.
                                                Member of Congress.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 17, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number 1 on the 2nd amendment offered by 
Representative Holt and rollcall number 3 on the 7th amendment 
offered by Representative Owens. Had I been present, I would 
have voted against both of the amendments.
    I would appreciate your including this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                                     Virginia Foxx.
                                ------                                

                                  House of Representatives,
                                 Washington, DC, February 22, 2005.
Hon. John Boehner,
Chairman, Committee on Education and the Workforce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Due to other legislative duties, I was 
unavoidably detained during Committee consideration of H.R. 27, 
``Job Training Improvement Act of 2005.'' Consequently, I 
missed rollcall number seven on amendment number twelve, 
offered by Representative Kildee, amendment number fourteen, 
offered by Representative Woolsey, amendment number seventeen, 
offered by Representative Woolsey, and amendment number 
nineteen, offered by Representative Kildee. Had I been present, 
I would have voted against the amendments.
    I would appreciate the inclusion of this letter in the 
Committee Report to accompany H.R. 27. Thank you for your 
attention to this matter.
            Sincerely,
                                                  John R. Kuhl, Jr.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 27 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 24, 2005.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 27, the Job 
Training Improvement Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                        Elizabeth Robinson,
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 27--Job Training Improvement Act of 2005

    Summary: H.R. 27 would make numerous changes to the 
Workforce Investment Act of 1998 (WIA), amend the Wagner-Peyser 
Act and the Adult Education and Family Literacy Act, and extend 
the authorization for programs under the Rehabilitation Act of 
1973 (RA). These programs, which received discretionary funding 
of $7.3 billion and mandatory funding of $2.6 billion for 
fiscal year 2005, provide a framework for adult education, job 
training, and employment service assistance. Some of the 
affected programs are permanently authorized (most of Wagner-
Peyser), but others are currently authorized through 2005.
    H.R. 27 would extend, through 2011, the existing mandatory 
program of state grants for vocational rehabilitation services, 
which is currently authorized through 2005 (including automatic 
extensions for two years provided by law). By law, that program 
is assumed to be extended indefinitely in CBO's baseline, so 
its extension would add no costs relative to the baseline. CBO 
estimates that outlays for that program over the 2006-2011 
period would total about $16.5 billion.
    The bill would affect discretionary spending, however. CBO 
estimates that implementing H.R. 27 would cost $251 million in 
2006 and $31.6 billion over the 2006-2011 period, assuming 
appropriation of the necessary amounts.
    H.R. 27 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs incurred by state, local, or tribal governments would 
result from complying with conditions of federal aid.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 27 is shown in the following table. 
The costs of this legislation would fall within budget function 
500 (education, employment, training, and social services).

----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                  --------------------------------------------------------------
                                                     2005     2006     2007     2008     2009     2010     2011
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Discretionary Spending Under Current Law:
    Estimated Authorization Level \1\............    7,294    3,324      875      891      908      925      944
    Estimated Outlays............................    7,258    6,769    2,617    1,262      970      916      933
Proposed Changes:
    Title I: Amendment to the Workforce
     Investment Act of 1998:
        Estimated Authorization Level............        0    6,325    6,426    6,548    6,679    6,806    6,949
        Estimated Outlays........................        0      427    4,629    6,000    6,432    6,643    6,771
    Title II: Adult Education:
        Estimated Authorization Level............        0      590      599      610      621      632      644
        Estimated Outlays........................        0       18      443      568      607      618      629
    Title III: Amendments to the Wagner-Peyser
     Act:
        Estimated Authorization Level............        0     -773     -786     -800     -816     -831     -848
        Estimated Outlays........................        0     -366     -831     -802     -809     -825     -841
    Title IV: Amendments to the Rehabilitation
     Act of 1973:
        Estimated Authorization Level............        0      422      429      437      445      453      461
        Estimated Outlays........................        0      172      342      431      439      447      455
    Total Changes:
        Estimated Authorization Level............        0    6,564    6,668    6,795    6,930    7,060    7,206
        Estimated Outlays........................        0      251    4,583    6,197    6,669    6,883    7,014
Discretionary Spending Under H.R. 27:
    Estimated Authorization Level................    7,294    9,888    7,543    7,686    7,838    7,985    8,150
    Estimated Outlays............................    7,258    7,020    7,200    7,459    7,639    7,799    7,948
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level includes advance appropriations of $2.5 billion for job training for the program year
  beginning July 1, 2005.
\2\ Authorization levels are for program years beginning July 1, 2006, and do not assume any advance
  appropriations.

Notes.--Components may not sum to totals because of rounding. The estimated costs shown above assume that ``such
  sums'' authorizations increase each year for inflation. If, instead, costs were assumed to remain level over
  time, outlays over the 2006-2011 period would be about $1.2 billion less.

    Basis of Estimate: This estimate assumes that H.R. 27 will 
be enacted by the end of 2005, and that the necessary sums will 
be appropriated for fiscal year 2006 and each subsequent fiscal 
year. The estimated outlays reflect historical spending 
patterns for the affected programs.

Direct spending

    Grants to states for vocational rehabilitation services, 
authorized under title I of the RA, are currently authorized 
through fiscal year 2005. H.R. 27 would extend the 
authorization for the state grants through 2013, assuming both 
the automatic one-year extension in the RA and the automatic 
one-year extension under the General Education Provisions Act 
(GEPA). Although the authorization for RA state grants expires, 
the Balanced Budget and Emergency Deficit Control Act requires 
that baseline spending projections assume extension of any 
mandatory program (created prior to 1997) with outlays in 
excess of $50 million. Because H.R. 27 makes no substantive 
changes in the funding formula for RA state grants, the bill 
would not affect direct spending relative to the CBO's 
baseline.
    Funding for the mandatory state grants is determined by a 
formula. It is set at the previous year's funding level 
adjusted by the year-over-year change in the consumer price 
index as of October 15 of the second preceding year. In fiscal 
year 2005, RA state grants were funded at $2.5 billion; by 211 
state grants would cost an estimated $3.0 billion. CBO 
estimates that outlays over the 2006-2011 period would total 
about $16.5 billion (as projected in the baseline).

Discretionary spending

    H.R. 27 would reauthorize and amend the WIA, the Adult 
Education and Family Literacy Act, provisions of the Wagner-
Peyser Act, and the RA. Under H.R. 27, authorizations for these 
programs would be increased by $6.6 billion in 2006, bringing 
the total authorized level to $9.9 billion in that year. 
Authorizations for 2006 include $2.5 billion already 
appropriated for that year.
    Title I: Amendments to the Workforce Investment Act. H.R. 
27 would revise and reauthorize the WIA, which currently is 
authorized through 2005. These programs, which received 
appropriations totaling $5.3 billion in fiscal year 2005, would 
be authorized for fiscal years 2006 through 2011. In addition, 
employment service functions that currently are authorized 
under the Wagner-Payser Act would be authorized under WIA. CBO 
estimates that authorizations under title I would total $6.3 
billion in fiscal year 2006 and about $39.7 billion over the 
2006-2011 period.
    The bill would authorize the appropriation of $1.25 billion 
in fiscal year 2006, and such sums as may be necessary through 
2011, for youth activities. Grants to provide employment and 
training services to adults and dislocated workers would be 
authorized at $3.14 billion in 2006, with such sums as may be 
necessary through 2011. In addition, the bill specifies $211 
million to be authorized for 2006, with such sums as may be 
necessary through 2011, for demonstrations and pilot programs, 
including projects for community-based job training, personal 
reemployment accounts, training of individuals in providing 
closed captioning of video programming, and business 
partnership grants.
    Other WIA programs would be authorized at such sums as may 
be necessary for fiscal years 2006 through 2011. CBO estimated 
authorization levels for these programs based on the amounts 
appropriated for them in 2005. These programs include Job Corps 
and other national activities such as grants to assist Native 
Americans, migrant and seasonal farm workers, and veterans, as 
well as for technical assistance programs and evaluations. Job 
Corps operations and construction received combined advance and 
current-year appropriations for fiscal year 2005 totaling $1.5 
billion. In addition, Job Corps received an advance 
appropriation for fiscal year 2006 of $0.7 billion to 
supplement amounts available for program year 2005. Based on 
the amount provided for 2005, and assuming adjustments for 
inflation, CBO estimates that H.R. 27 would authorize an 
additional $1.6 billion for fiscal year 2006. The remaining 
programs (for Native Americans, migrant and seasonal farm 
workers, veterans, and evaluations) received appropriations 
totaling $149 million for fiscal year 2005. CBO estimates their 
authorizations would total $151 million in 2006, assuming 
adjustments for inflation.
    Title II: Adult Education and Literacy. Title II of H.R. 27 
would revise and reauthorize the Adult Education State Grant 
program and the national Institute for Literacy, both of which 
are currently authorized through 2005. H.R. 27 would authorize 
$590 million for fiscal year 2006 and such sums as may be 
necessary through 2012 under GEPA for programs under title II. 
The bill would continue to provide formula grants to states but 
would focus more on basic skills, such as reading, writing, and 
mathematics. Of the total, up to 1.75 percent would be reserved 
for the National Institute for Literacy, up to 1.72 percent for 
incentive grants for states, and up to 1.55 percent for 
national leadership activities.
    CBO estimates the authorized funding for title II for the 
2006-2011 period would total about $2.9 billion, assuming 
adjustments for inflation, with resulting outlays of $2.9 
billion. These programs were funded at $585 million in 2005.
    Title III: Amendments to the Wagner-Peyser Act. Title III 
of H.R. 27 would reauthorize labor market information functions 
that currently are authorized through 2005. H.R. 27 would 
authorize such sums as may be necessary for fiscal years 2006 
through 2011. CBO estimates this authorization would amount to 
$85 million in fiscal year 2006, and $536 million over the 
2006-2011 period. However, other activities that are 
permanently authorized under the Wagner-Peyser Act would be 
transferred to WIA, and authorized as part of the $3.14 billion 
adult job training grant. As a result, net authorizations under 
the Wagner-Peyser Act would decline by $0.8 billion in 2006, 
and by $4.9 billion over the 2006-2011 period.
    Title IV: Amendments to the Rehabilitation Act. H.R. 27 
would extend the current ``such sums'' authorizations for 
existing discretionary grant programs under the RA as well as 
for the Helen Keller National Center. Most of these programs 
are authorized through the 2005 appropriations act for the 
Department of Education, and would be extended through 2011 
under this bill.
    RA Programs. Discretionary grant programs under the RA 
received total funding of $398 million in 2005. These funds 
support many different types of categorical grants and 
demonstration programs primarily aimed at training, supported 
employment, independent living, research, and advocacy 
projects. Based on the 2005 appropriation levels (adjusted for 
inflation), CBO estimates discretionary grant authorization 
levels for RA programs to total $402 million in 2006 and $2.5 
billion over the 2006-2011 period.
    National Council on Disability. The bill would extend the 
authorization for the National Council on Disability. The 
Council is responsible for reviewing federal law and policies 
affecting individuals with disabilities. Based on its 2005 
appropriation of $3 million, CBO estimates that reauthorization 
would amount to $3 million in 2006 and $18 million over the 
six-year period, with outlays of $17 million through 2011.
    Architectural and Transportation Barriers Compliance Board. 
Under H.R. 27, the Architectural and Transportation Barriers 
Compliance Board would be reauthorized for the 2006-2011 
period. The Board develops guidelines to ensure access to 
buildings, transportation vehicles, and telecommunications 
equipment for individuals with disabilities. Based on the 2005 
funding level of $6 million, CBO estimates the reauthorization 
would total $40 million over the 2006-2011 period, and would 
result in outlays of $38 million over the same time frame.
    Helen Keller National Center. H.R. 27 would reauthorize the 
Helen Keller National Center over the 2006-2011 period. The 
authorization for the Helen Keller National Center is estimated 
to total $11 million in 2006 and $67 million over the 2006-2011 
period. The resulting outlays would be $4 million in 2006 and 
$58 million for 2006 through 2011. The Center received $11 
million in funding for 2005.
    Intergovernmental and private-sector impact: H.R. 27 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would reauthorize funding for job 
training and literacy programs administered by state and local 
agencies and would consolidate some adult employment services 
and state administrative costs into a single program. States 
and localities would be guaranteed minimum allotments that 
provide between 90 percent and 130 percent of the prior year's 
funding level. Any costs to by state, local, or tribal 
governments would result from complying with conditions of 
federal aid, and thus would be incurred voluntarily.
    Estimate prepared by: Federal Spending: Workforce 
Investment Act and Wagner-Peyser: Christina Hawley Sadoti; 
Adult Education and National Institute for Literacy: Justine 
Humphrey; and Rehabilitation Act: Deborah Kalcevic. Impact on 
State, Local, and Tribal Governments: Sara Puro. Impact on the 
Private Sector: Ralph Smith and Nabeel Alsalam.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with Clause (3)(c) of House Rule XIII, the 
goal of H.R. 27 is to enhance the workforce investment system 
created under the Workforce Investment Act of 1998 by 
strengthening one-stop career centers, providing for more 
effective governance arrangements, promoting consumer choice, 
establishing a more targeted approach to serving youth, and 
improving performance accountability. The bill also improves 
our nation's adult education system using practices based on 
scientific research, and enhances vocational rehabilitation 
services for individuals with disabilities seeking to return to 
or enter the integrated workplace. The Committee expects the 
Department of Labor and Department of Education to comply with 
H.R. 27 and implement the changes to the law in accordance with 
the changes.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 27. The 
Committee believes that the amendments made by this bill, which 
authorize appropriations for the Workforce Investment Act, are 
within Congress' authority under Article I, section 8, clause 1 
of the Constitution.

                           Committee Estimate

    Clauses 3(d)(2) of Rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 27. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

WORKFORCE INVESTMENT ACT OF 1998

           *       *       *       *       *       *       *



SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--The table of contents for this Act is 
as follows:
Sec. 1. Short title; table of contents.
     * * * * * * *
[Sec. 123. Identification of eligible providers of youth activities.]
Sec. 123. Eligible providers of youth activities.
     * * * * * * *

    [Chapter 5--Adult and Dislocated Worker Employment and Training 
                               Activities]

 Chapter 5--Comprehensive Employment and Training Activities for Adults

     * * * * * * *
[Sec. 169. Youth opportunity grants.]
Sec. 169. Youth challenge grants.
     * * * * * * *
[Sec. 173. National emergency grants.]
Sec. 173. National dislocated worker grants.
     * * * * * * *

                 [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 II--ADULT EDUCATION, BASIC SKILLS, AND FAMILY LITERACY EDUCATION

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

                      Chapter 1--Federal Provisions

Sec. 211. Reservation of funds; grants to eligible agencies; allotments.
Sec. 212. Performance accountability system.
Sec. 213. Incentive grants for States.

                       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.
     * * * * * * *
[Sec. 502. Definitions for indicators of performance.
[Sec. 503. Incentive grants.]

           *       *       *       *       *       *       *


                 TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

SEC. 101. DEFINITIONS.

  In this title:
          (1) Accrued expenditures.--The term ``accrued 
        expenditures'' means charges incurred by recipients of 
        funds under this title for a given period requiring the 
        provision of funds for goods or other tangible property 
        received; services performed by employees, contractors, 
        subgrantees, and other payees; and other amounts 
        becoming owed under programs assisted under this title 
        for which no current services or performance is 
        required, such as annuities, insurance claims, and 
        other benefit payments.
          (2) Administrative costs.--The term ``administrative 
        costs'' means expenditures incurred by State and local 
        workforce investment boards, direct recipients 
        (including State grant recipients under subtitle B and 
        recipients of awards under subtitle D), local grant 
        recipients, local fiscal agents or local grant 
        subrecipients, and one-stop operators in the 
        performance of administrative functions and in carrying 
        out activities under this title which are not related 
        to the direct provision of workforce investment 
        services (including services to participants and 
        employers). Such costs include both personnel and non-
        personnel and both direct and indirect.
          [(1)] (3) Adult.--Except in sections 127 and 132, the 
        term ``adult'' means an individual who is age 18 or 
        older.
          [(2)] (4) 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)] (5) Area vocational education school.--The term 
        ``area vocational education school'' has the meaning 
        given the term in section 3 of the Carl D. Perkins 
        Vocational and Technical Education Act of 1998.
          [(4)] (6) 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 (or such other level as the Governor may 
        establish) on a generally accepted standardized test or 
        a comparable score on a criterion-referenced test.
          [(5)] (7) Case management.--The term ``case 
        management'' means the provision of a client-centered 
        approach in the 
        delivery of services, designed--
                  (A) * * *

           *       *       *       *       *       *       *

          [(6)] (8) Chief elected official.--The term ``chief 
        elected 
        official'' means--
                  (A) * * *

           *       *       *       *       *       *       *

          [(7)] (9) 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)] (10) Customized training.--The term 
        ``customized 
        training '' means training--
                  (A) * * *
                  (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.] a 
                significant portion of the cost of training, as 
                determined by the local board; and
                  (D) in the case of customized training with 
                an employer in multiple local areas in the 
                State, for which such employer pays a 
                significant portion of the cost of the 
                training, as determined by the Governor.
          [(9)] (11) Dislocated worker.--The term ``dislocated 
        worker'' means an individual who--
                  (A)(i) * * *
                  (ii)(I) * * *
                  (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)] 121(e), 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

           *       *       *       *       *       *       *

          [(10)] (12) Displaced homemaker.--The term 
        ``displaced homemaker'' means an individual who has 
        been providing unpaid services to family members in the 
        home and who--
                  (A) * * *

           *       *       *       *       *       *       *

          [(11)] (13) 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)] (14) 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)] section 122;

           *       *       *       *       *       *       *

          [(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 one 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)] (15) 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)] (16) 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) * * *

           *       *       *       *       *       *       *

          [(16)] (17) Governor.--The term ``Governor'' means 
        the chief executive of a State.
          [(17)] (18) Individual with a disability.--
                  (A) * * *

           *       *       *       *       *       *       *

          [(18)] (19) 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)] (20) Literacy.--The term ``literacy'' has the 
        meaning given the term in section 203.
          [(20)] (21) Local area.--The term ``local area'' 
        means a local workforce investment area designated 
        under section 116.
          [(21)] (22) Local board.--The term ``local board'' 
        means a local workforce investment board established 
        under section 117.
          [(22)] (23) Local performance measure.--The term 
        ``local performance measure'' means a performance 
        measure established under section 136(c).
          [(23)] (24) Local educational agency.--The term 
        ``local educational agency'' has the meaning given the 
        term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.
          [(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) * * *
                  (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;] poverty line for an 
                        equivalent period;

           *       *       *       *       *       *       *

                  (D) receives or is eligible to receive free 
                or reduced price lunch under the Richard B. 
                Russell National School Lunch Act (42 U.S.C. 
                1751 et seq.);
                  [(D)] (E) 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)] (F) is a foster child on behalf of whom 
                State or local government payments are made; or
                  [(F)] (G) 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.

           *       *       *       *       *       *       *

          (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)] (33) 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)] (34) Postsecondary educational institution.--
        The term ``postsecondary educational institution'' 
        means an institution of higher education, as defined in 
        section 102 of the Higher Education Act of 1965.
          [(36)] (35) 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)] (36) 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)] (37) 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) * * *

           *       *       *       *       *       *       *

          [(39)] (38) 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)] (39) Secondary school.--The term ``secondary 
        school'' has the meaning given the term in section 9101 
        of the Elementary and Secondary Education Act of 1965.
          [(41)] (40) Secretary.--The term ``Secretary'' means 
        the Secretary of Labor, and the term means such 
        Secretary for purposes of section 503.
          [(42)] (41) 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)] (42) 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)] (43) State board.--The term ``State board'' 
        means a State workforce investment board established 
        under section 111.
          [(45)] (44) State performance measure.--The term 
        ``State performance measure'' means a performance 
        measure established under section 136(b).
          [(46)] (45) 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)] (46) 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)] (47) 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)] (48) Veteran; related definition.--
                  (A) * * *

           *       *       *       *       *       *       *

          [(50)] (49) 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)] (50) Workforce investment activity.--The term 
        ``workforce investment activity'' means an employment 
        and training activity, and a youth activity.
          [(52)] (51) 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)] (52) 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. It 
is also the purpose of this subtitle to provide workforce 
investment activities in a manner that promotes the informed 
choice of participants and actively involves participants in 
decisions affecting their participation in such activities.

                      CHAPTER 1--STATE PROVISIONS

SEC. 111. STATE WORKFORCE INVESTMENT BOARDS.

  (a) * * *
  (b) Membership.--
          (1) In general.--The State Board shall include--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(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.]
                  (C) representatives appointed by the 
                Governor, who are--
                          (i)(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;
                          (II) in any case in which no lead 
                        State agency official has 
                        responsibility for such a program or 
                        activity, a representative in the State 
                        with expertise relating to such program 
                        or activity; and
                          (III) if not included under subclause 
                        (I), the director of the State unit, 
                        defined in section 7(8)(B) of the 
                        Rehabilitation Act of 1973 (29 U.S.C. 
                        705(8)(B)) except that in a State that 
                        has established 2 or more designated 
                        State units to administer the 
                        vocational rehabilitation program, the 
                        board representative shall be the 
                        director of the designated State unit 
                        that serves the most individuals with 
                        disabilities in the State;
                          (ii) the State agency officials 
                        responsible for economic development;
                          (iii) representatives of business in 
                        the State who--
                                  (I) are owners of businesses, 
                                chief executive or operating 
                                officers of businesses, and 
                                other business executives or 
                                employers with optimum policy 
                                making or hiring authority, 
                                including members of local 
                                boards described in section 
                                117(b)(2)(A)(i);
                                  (II) represent businesses 
                                with employment opportunities 
                                that reflect employment 
                                opportunities in the State; and
                                  (III) are appointed from 
                                among individuals nominated by 
                                State business organizations 
                                and business trade 
                                associations;
                          (iv) chief elected officials 
                        (representing both cities and counties, 
                        where appropriate);
                          (v) representatives of labor 
                        organizations, who have been nominated 
                        by State labor federations; and
                          (vi) such other representatives and 
                        State agency officials as the Governor 
                        may designate.

           *       *       *       *       *       *       *

          (3) Majority.--A majority of the members of the State 
        Board shall be representatives described in [paragraph 
        (1)(C)(i)] paragraph (1)(C)(iii).
  (c) Chairperson.--The Governor shall select a chairperson for 
the State Board from among the representatives described in 
[subsection (b)(1)(C)(i)] subsection (b)(1)(C)(iii).
  (d) Functions.--The State Board shall assist the Governor 
in--
          (1) * * *
          (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)] section 
        121(e) that receives funds under this subtitle 
        (referred to in this title as a ``statewide workforce 
        investment system''), including--
                  (A) * * *

           *       *       *       *       *       *       *

          [(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));]
          (3) development and review of statewide policies 
        affecting the integrated provision of services through 
        the one-stop delivery system described in section 121, 
        including--
                  (A) the development of criteria for, and the 
                issuance of, certifications of one-stop 
                centers;
                  (B) the criteria for the allocation of one-
                stop center infrastructure funding under 
                section 121(h), and oversight of the use of 
                such funds;
                  (C) approaches to facilitating equitable and 
                efficient cost allocation in one-stop delivery 
                systems; and
                  (D) such other matters that may promote 
                statewide objectives for, and enhance the 
                performance of, one-stop delivery systems 
                within the State;
          (4) designation of local areas as required in section 
        116 and the development of State criteria relating to 
        the appointment and certification of local boards under 
        section 117;
          (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)] sections 128(b)(3) and 133(b)(3);

           *       *       *       *       *       *       *

          (9) development of an application for an incentive 
        grant under [section 503] section 136(i).
  [(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.]
  (e) Authority to Hire Staff.--The State board may hire staff 
to assist in carrying out the functions described in subsection 
(d).

           *       *       *       *       *       *       *


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] 2-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) * * *

           *       *       *       *       *       *       *

          (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)] sections 128(b)(3) and 133(b)(3), 
        including--
                  (i) * * *

           *       *       *       *       *       *       *

          (14) with respect to the one-stop delivery systems 
        described in [section 134(c)] section 121(e) (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;

           *       *       *       *       *       *       *

          (17) with respect to the employment and training 
        activities authorized in section 134--
                  (A) a description of--
                          (i) * * *

           *       *       *       *       *       *       *

                          (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]
                          (iv) how the State will serve the 
                        employment and training needs of 
                        dislocated workers (including displaced 
                        homemakers and formerly self-employed 
                        and transitioning farmers, ranchers, 
                        and fisherman) low income individuals 
                        (including recipients of public 
                        assistance), individuals with limited 
                        English proficiency, homeless 
                        individuals, ex-offenders, individuals 
                        training for nontraditional employment, 
                        and other individuals with multiple 
                        barriers to employment (including older 
                        individuals); and
                          (v) how the State will serve the 
                        employment and training needs of 
                        individuals with disabilities, 
                        consistent with section 188 and 
                        Executive Order 13217 (42 U.S.C. 12131 
                        note; relating to community-based 
                        alternatives for individuals with 
                        disabilities) including the provision 
                        of outreach, intake, assessments, and 
                        service delivery, the development of 
                        performance measures, the training of 
                        staff, and other aspects of 
                        accessibility to program services, 
                        consistent with sections 504 and 508 of 
                        the Rehabilitation Act of 1973; and

           *       *       *       *       *       *       *

          (18) with respect to youth activities authorized in 
        section 129, information--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) describing how the State will coordinate 
                youth activities described in subparagraph (C) 
                with activities carried out through the [youth 
                opportunity grants] youth challenge grants 
                under section 169.
          (19) a description of the methodology for determining 
        one-stop partner program contributions for the cost of 
        the infrastructure of one-stop centers under section 
        121(h)(1) and of the formula for allocating such 
        infrastructure funds to local areas under section 
        121(h)(3); and
          (20) a description of any programs and strategies the 
        State will utilize to meet the needs of businesses in 
        the State, including small businesses, which may 
        include providing incentives and technical assistance 
        to assist local areas in engaging employers in local 
        workforce development activities.

           *       *       *       *       *       *       *

  (d) Modifications to Plan.--A State may submit modifications 
to a State plan in accordance with the requirements of 
thissection and section 111 as necessary during the [5-year] 2-year 
period covered by the plan.

                      CHAPTER 2--LOCAL PROVISIONS


SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS.

  (a) Designation of Areas.--
          (1) In general.--
                  (A) * * *
                  (B) Considerations.--In making the 
                designation of local areas, the Governor shall 
                take into consideration the following:
                          (i) * * *

           *       *       *       *       *       *       *

                          (vi) The extent to which such local 
                        areas will promote efficiency in the 
                        administration and provision of 
                        services.
          [(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.]
          (2) Automatic designation.--
                  (A) In general.--Except as provided in 
                subparagraph (B) of this paragraph and 
                subsection (b), the Governor shall approve a 
                request for designation as a local area from--
                          (i) any unit of general local 
                        government with a population of 500,000 
                        or more; and
                          (ii) an area served by a rural 
                        concentrated employment program grant 
                        recipient that served as a service 
                        delivery area or substate area under 
                        the Job Training Partnership Act (29 
                        U.S.C. 1501 et seq.),
                for the 2-year period covered by a State plan 
                under section 112 if such request is made not 
                later than the date of the submission of the 
                State plan.
                  (B) Continued designation based on 
                performance.--The Governor may deny a request 
                for designation submitted pursuant to 
                subparagraph (A) if such unit of government was 
                designated as a local area for the preceding 2-
                year period covered by a State plan and the 
                Governor determines that such local area did 
                not perform successfully during such period.

           *       *       *       *       *       *       *

  (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. The State may require the local boards for 
        the designated region to prepare a single regional plan 
        that incorporates the elements of the local plan under 
        section 118 and that is submitted and approved in lieu 
        of separate local plans under such section.

           *       *       *       *       *       *       *


SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

  (a) * * *
  (b) Membership.--
          (1) * * *
          (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) * * *
                                  (II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the local 
                                area, businesses that are in 
                                the leading industries in the 
                                local area, and large and small 
                                businesses in the local area; 
                                and

           *       *       *       *       *       *       *

                          [(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;]
                          (ii) a superintendent of the local 
                        secondary school system, an 
                        administrator of an entity providing 
                        adult education and literacy activities 
                        that is not a one-stop partner 
                        designated under section 121(b)(1)(B), 
                        and the president or chief executive 
                        officer of a postsecondary educational 
                        institution serving the local area 
                        (including community colleges, where 
                        such entities exist);

           *       *       *       *       *       *       *

                          (iv) representatives of community-
                        based organizations (including 
                        organizations representing individuals 
                        with disabilities and veterans, for a 
                        local area in which such organizations 
                        are present)[;] and faith-based 
                        organizations; and

           *       *       *       *       *       *       *

                          [(vi) representatives of each of the 
                        one-stop partners; and]

           *       *       *       *       *       *       *

          (3) Authority of board members and representation.--
        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 geographic sections 
        within the local area.

           *       *       *       *       *       *       *

  (d) Functions of Local Board.--The functions of the local 
board shall include the following:
          (1) * * *
          (2) Selection of operators and providers.--
                  (A) * * *
                  (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].

           *       *       *       *       *       *       *

          (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, and ensure the appropriate use and 
        management of the funds provided under this title for 
        such programs, activities, and system.

           *       *       *       *       *       *       *

  [(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); and
                  [(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 
                        labororganizations), nominated by local 
labor federations; or
                          [(II) other representatives of 
                        employees in the local area (for a 
                        local area in which no employees are 
                        represented by such organizations).
          [(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.]
  (h) Establishment of Councils.--The local board may establish 
councils to provide information and advice to assist the local 
board in carrying out activities under this title. Such 
councils may include a council composed of one-stop partners to 
advise the local board on the operation of the one-stop 
delivery system, a youth council composed of experts and 
stakeholders in youth programs to advise the local board on 
activities for youth, and such other councils as the local 
board determines are appropriate.

SEC. 118. LOCAL PLAN.

  (a) In General.--Each local board shall develop and submit to 
the Governor a comprehensive [5-year] 2-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) * * *
          [(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;]
          (2) a description of the one-stop delivery system to 
        be established or designated in the local area, 
        including 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;

           *       *       *       *       *       *       *

          (4) a description and assessment of the type and 
        availability of adult [and dislocated worker] 
        employment and training activities in the local area;

           *       *       *       *       *       *       *

          (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) a description of the strategies and services 
        that will be initiated in the local area to engage 
        employers, including small employers, in workforce 
        development activities;
          (11) how the local area will serve the employment and 
        training needs of individuals with disabilities, 
        consistent with section 188 and Executive Order 13217 
        (42 U.S.C. 12131 note) including the provision of 
        outreach, intake, assessments, and service delivery, 
        the development of performance measures, the training 
        of staff, and other aspects of accessibility to program 
        services, consistent with sections 504 and 508 of the 
        Rehabilitation Act of 1973; and
          [(10)] (12) such other information as the Governor 
        may require.

           *       *       *       *       *       *       *


          CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS

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

  (a) * * *
  (b) One-Stop Partners.--
          (1) Required partners.--
                  (A) * * *
                  (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)] (ii) adult education and 
                        literacy activities 
                        authorized under title II;
                          [(iv)] (iii) programs authorized 
                        under title I of the Rehabilitation Act 
                        of 1973 (29 U.S.C. 720 et seq.) (other 
                        than part C of title I of such Act and 
                        subject to subsection (f ));
                          [(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)] (iv) activities authorized 
                        under title V of the Older Americans 
                        Act of 1965 (42 U.S.C. 3056 et seq.);
                          [(vii)] (v) postsecondary vocational 
                        education activities authorized under 
                        the Carl D. Perkins Vocational and 
                        Applied Technology Education Act (20 
                        U.S.C. 2301 et seq.);
                          [(viii)] (vi) activities authorized 
                        under chapter 2 of title II of the 
                        Trade Act of 1974 (19 U.S.C. 2271 et 
                        seq.);
                          [(ix)] (vii) activities authorized 
                        under chapter 41 of title 38, United 
                        States Code;
                          [(x)] (viii) employment and training 
                        activities carried out under the 
                        Community Services Block Grant Act (42 
                        U.S.C. 9901 et seq.);
                          [(xi)] (ix) employment and training 
                        activities carried out by the 
                        Department of Housing and Urban 
                        Development; [and]
                          [(xii)] (x) programs authorized under 
                        State unemployment compensation laws 
                        (in accordance with applicable Federal 
                        law)[.]; and
                          (xi) programs authorized under part A 
                        of title IV of the Social Security Act 
                        (42 U.S.C. 601 et. seq.), subject to 
                        subparagraph (C).
                  (C) Determination by the governor.--The 
                program referred to in clause (xi) of 
                subparagraph (B) shall be included as a 
                required partner for purposes of this title in 
                a State unless the Governor of the State 
                notifies the Secretary and the Secretary of 
                Health and Human Services in writing of a 
                determination by the Governor not to include 
                such programs as required partners for purposes 
                of this title in the State.
          (2) Additional partners.--
                  (A) * * *
                  (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)] (i) programs authorized under 
                        section 6(d)(4) of the Food Stamp Act 
                        of 1977 (7 U.S.C. 2015(d)(4));
                          [(iii)] (ii) work programs authorized 
                        under section 6(o) of the Food Stamp 
                        Act of 1977 (7 U.S.C. 2015(o));
                          [(iv)] (iii) programs authorized 
                        under the National and Community 
                        Service Act of 1990 (42 U.S.C. 12501 et 
                        seq.); [and]
                          [(v)] (iv) other appropriate Federal, 
                        State, or local 
                        programs, including programs in the 
                        private sector[.];
                          (v) employment and training programs 
                        administered by the Social Security 
                        Administration, including the Ticket to 
                        Work program (established by Public Law 
                        106-170);
                          (vi) employment and training programs 
                        carried out by the Small Business 
                        Administration;
                          (vii) programs under part D of title 
                        IV of the Social Security Act (42 
                        U.S.C. 451 et seq.) (relating to child 
                        support enforcement);
                          (viii) employment, training, and 
                        literacy services carried out by public 
                        libraries; and
                          (ix) programs carried out in the 
                        local area for individuals with 
                        disabilities, including programs 
                        carried out by State agencies relating 
                        to mental health, mental retardation, 
                        and developmental disabilities, State 
                        Medicaid agencies, State Independent 
                        Living Councils, and Independent Living 
                        Centers.

           *       *       *       *       *       *       *

  (d) One-Stop Operators.--
          (1) * * *
          (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)] subsection 
        (e), an entity (which may be a consortium of 
        entities)--
                  (A) * * *

           *       *       *       *       *       *       *

  [(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).]
  [(c)] (e) 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)] section 134(c)(2);
                  (B) shall provide access to intensive 
                services and training services as described in 
                paragraphs (3) and (4) of [subsection (d)] 
                section 134(c), including serving as the point 
                of access to individual training accounts for 
                training services to participants in accordance 
                with [subsection (d)(4)(G)] section 
                134(c)(4)(G);
                  (C) shall provide access to the activities 
                carried out under [subsection (e)] section 
                134(d), if any;
                  (D) shall provide access to programs and 
                activities carried out by one-stop partners and 
                described in [section 121(b)] subsection (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.).]
                  (E) shall provide access to the information 
                described in section 15(e) of the Wagner-Peyser 
                Act (29 U.S.C. 49l-2(e)).

           *       *       *       *       *       *       *

  (g) Certification of One-Stop Centers.--
          (1) In general.--The State board shall establish 
        procedures and criteria for periodically certifying 
        one-stop centers for the purpose of awarding the one-
        stop infrastructure funding described in subsection 
        (h).
          (2) Criteria.--The criteria for certification under 
        this subsection shall include minimum standards 
        relating to the scope and degree of service integration 
        achieved by the centers involving the programs provided 
        by the one-stop partners, and how the centers ensure 
        that such providers meet the employment needs of local 
        employers and participants.
          (3) Effect of certification.--One-stop centers 
        certified under this subsection shall be eligible to 
        receive the infrastructure grants authorized under 
        subsection (h).
  (h) One-Stop Infrastructure Funding.--
          (1) Partner contributions.--
                  (A) Provision of funds.--Notwithstanding any 
                other provision of law, as determined under 
                subparagraph (B), a portion of the Federal 
                funds provided to the State and areas within 
                the State under the Federal laws authorizing 
                the one-stop partner programs described in 
                subsection (b)(1)(B) and participating 
                additional partner programs described in 
                (b)(2)(B) for a fiscal year shall be provided 
                to the Governor by such programs to carry out 
                this subsection.
                  (B) Determination of governor.--Subject to 
                subparagraph (C), the Governor, in consultation 
                with the State board, shall determine the 
                portion of funds to be provided under 
                subparagraph (A) by each one-stop partner and 
                in making such determination shall consider the 
                proportionate use of the one-stop centers by 
                each partner, the costs of administration for 
                purposes not related to one-stop centers for 
                each partner, and other relevant factors 
                described in paragraph (3).
                  (C) Limitations.--
                          (i) Provision from administrative 
                        funds.--The funds provided under this 
                        paragraph by each one-stop partner 
                        shall be provided only from funds 
                        available for the costs of 
                        administration under the program 
                        administered by such partner, and shall 
                        be subject to the limitations with 
                        respect to the portion of funds under 
                        such programs that may be used for 
                        administration.
                          (ii) Federal direct spending 
                        programs.--Programs that are Federal 
                        direct spending under section 250(c)(8) 
                        of the Balanced Budget and Emergency 
                        Deficit Control Act of 1985 (2 U.S.C. 
                        900(c)(8)) shall not, for purposes of 
                        this paragraph, be required to provide 
                        an amount in excess of the amount 
                        determined to be equivalent to the 
                        proportionate use of the one-stop 
                        centers by such programs in the State.
                          (iii) Native american programs.--
                        Native American programs established 
                        under section 166 shall not be subject 
                        to the provisions of this subsection. 
                        The method for determining the 
                        appropriate portion of funds to be 
                        provided by such Native American 
                        programs to pay for the costs of 
                        infrastructure of a one-stop center 
                        certified under subsection (g) shall be 
                        determined as part of the development 
                        of the memorandum of understanding 
                        under subsection (c) for the one-stop 
                        center and shall be stated in the 
                        memorandum.
          (2) Allocation by governor.--From the funds provided 
        under paragraph (1), the Governor shall allocate funds 
        to local areas in accordance with the formula 
        established under paragraph (3) for the purposes of 
        assisting in paying the costs of the infrastructure of 
        One-Stop centers certified under subsection (g).
          (3) Allocation formula.--The State board shall 
        develop a formula to be used by the Governor to 
        allocate the funds described in paragraph (1). The 
        formula shall include such factors as the State board 
        determines are appropriate, which may include factors 
        such as the number of centers in the local area that 
        have been certified, the population served by such 
        centers, and the performance of such centers.
          (4) Costs of infrastructure.--For purposes of this 
        subsection, the term ``costs of infrastructure'' means 
        the nonpersonnel costs that are necessary for the 
        general operation of a one-stop center, including the 
        rental costs of the facilities, the costs of utilities 
        and maintenance, equipment (including adaptive 
        technology for individuals with disabilities), 
        strategic planning activities for the center, and 
        common outreach activities.
  (i) Other Funds.--
          (1) In general.--In addition to the funds provided to 
        carry out subsection (h), a portion of funds made 
        available under Federal law authorizing the one-stop 
        partner programs described in subsection (b)(1)(B) and 
        participating partner programs described in subsection 
        (b)(2)(B), or the noncash resources available under 
        such programs shall be used to pay the costs relating 
        to the operation of the one-stop delivery system that 
        are not paid for from the funds provided under 
        subsection (h), to the extent not inconsistent with the 
        Federal law involved including--
                  (A) infrastructure costs that are in excess 
                of the funds provided under subsection (h);
                  (B) common costs that are in addition to the 
                costs of infrastructure; and
                  (C) the costs of the provision of core 
                services applicable to each program.
          (2) Determination and guidance.--The method for 
        determining the appropriate portion of funds and 
        noncash resources to be provided by each program under 
        paragraph (1) shall be determined as part of the 
        memorandum of understanding under subsection (c). The 
        State board shall provide guidance to facilitate the 
        determination of appropriate allocation of the funds 
        and noncash resources in local areas.

           *       *       *       *       *       *       *


[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.]

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

  (a) In General.--The Governor shall establish criteria and 
procedures regarding the eligibility of providers of training 
services described in section 134(c)(4) to receive funds 
provided under section 133(b) for the provision of such 
training services.
  (b) Criteria.--
          (1) In general.--The criteria established pursuant to 
        subsection (a) shall take into account the performance 
        of providers of training services with respect to the 
        indicators described in section 136 or other 
        appropriate indicators (taking into consideration the 
        characteristics of the population served and relevant 
        economic conditions), and such other factors as the 
        Governor determines are appropriate to ensure the 
        quality of services, the accountability of providers, 
        how the centers ensure that such providers meet the 
        needs of local employers and participants, whether 
        providers of training allow participants to attain a 
        certification, certificate, or mastery, and the 
        informed choice of participants under chapter 5. Such 
        criteria shall require that the provider submit 
        appropriate, accurate and timely information to the 
        State for purposes of carrying out subsection (d). The 
        criteria shall also provide for periodic review and 
        renewal of eligibility under this section for providers 
        of training services. The Governor may authorize local 
        areas in the State to establish additional criteria or 
        to modify the criteria established by the Governor 
        under this section for purposes of determining the 
        eligibility of providers of training services to 
        provide such services in the local area.
          (2) Limitation.--In carrying out the requirements of 
        this subsection, no personally identifiable information 
        regarding a student, including Social Security number, 
        student identification number, or other identifier, may 
        be disclosed without the prior written consent of the 
        parent or eligible student in compliance with section 
        444 of the General Education Provisions Act (20 U.S.C. 
        1232g).
  (c) Procedures.--The procedures established under subsection 
(a) shall identify the application process for a provider of 
training services to become eligible to receive funds under 
section 133(b) for the provision of training services, and 
identify the respective roles of the State and local areas in 
receiving and reviewing applications and in making 
determinations of eligibility based on the criteria established 
under this section. The procedures shall also establish a 
process for a provider of training services to appeal a denial 
or termination of eligibility under this section that includes 
an opportunity for a hearing and prescribes appropriate time 
limits to ensure prompt resolution of the appeal.
  (d) Information To Assist Participants in Choosing 
Providers.--
          (1) In general.--In order to facilitate and assist 
        participants under chapter 5 in choosing providers of 
        training services, the Governor shall ensure that an 
        appropriate list or lists of providers determined 
        eligible under this section in the State, accompanied 
        by such information as the Governor determines is 
        appropriate, is provided to the local boards in the 
        State to be made available to such participants and to 
        members of the public through the one-stop delivery 
        system in the State.
          (2) Special rule.--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.) shall be 
        included on the list of eligible providers described in 
        paragraph (1) for so long as such entity remains 
        certified by the Department of Labor.
  (e) Agreements With Other States.--States may enter into 
agreements, on a reciprocal basis, to permit eligible providers 
of training services to accept individual training accounts 
provided in another State.
  (f) Recommendations.--In developing the criteria, procedures, 
and information required under this section, the Governor shall 
solicit and take into consideration the recommendations of 
local boards and providers of training services within the 
State.
  (g) Opportunity To Submit Comments.--During the development 
of the criteria, procedures, and information required underthis 
section, the Governor shall provide an opportunity for interested 
members of the public, including representatives of business and labor 
organizations, to submit comments regarding such criteria, procedures, 
and information.
  (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 (g).
          (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.

SEC. 123. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

  (a) In General.--From the funds allocated under section 
128(b) to a local area, the local board for such area shall 
award grants or contracts on a competitive basis to providers 
of youth activities identified based on the criteria in the 
State plan and shall conduct oversight with respect to such 
providers.
  (b) Exceptions.--A local board may award grants or contracts 
on a sole-source basis if such board determines there are an 
insufficient number of eligible providers of training services 
in the local area involved (such as rural areas) for grants to 
be awarded on a competitive basis under subsection (a).

CHAPTER 4--YOUTH ACTIVITIES

           *       *       *       *       *       *       *


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 
        appropriateand 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.]
  (a) Allotment Among States.--
          (1) Youth activities.--
                  (A) Youth challenge grants.--
                          (i) Reservation of funds.--Of the 
                        amount appropriated under section 
                        137(a) for each fiscal year, the 
                        Secretary shall reserve 25 percent to 
                        provide youth challenge grants under 
                        section 169.
                          (ii) Limitation.--Notwithstanding 
                        clause (i), if the amount appropriated 
                        under section 137(a) for a fiscal year 
                        exceeds $1,000,000,000, the Secretary 
                        shall reserve $250,000,000 to provide 
                        youth challenge grants under section 
                        169.
                  (B) Outlying areas and native americans.--
                          (i) In general.--After determining 
                        the amount to be reserved under 
                        subparagraph (A), of the remainder of 
                        the amount appropriated under section 
                        137(a) for each fiscal year the 
                        Secretary shall--
                                  (I) reserve not more than \1/
                                4\ of one percent of such 
                                amount to provide assistance to 
                                the outlying areas to carry out 
                                youth activities and statewide 
                                workforce investment 
                                activities; and
                                  (II) reserve not more than 1 
                                and \1/2\ percent of such 
                                amount to provide youth 
                                activities under section 166 
                                (relating to Native Americans).
                          (ii) Restriction.--The Republic of 
                        Palau shall cease to be eligible to 
                        receive funding under this subparagraph 
                        upon entering into an agreement for 
                        extension of United States educational 
                        assistance under the Compact of Free 
                        Association (approved by the Compact of 
                        Free Association Amendments Act of 2003 
                        (Public Law 108-188)) after the date of 
                        enactment of the Job Training 
                        Improvement Act of 2005.
                  (C) States.--
                          (i) In general.--Of the remainder of 
                        the amount appropriated under section 
                        137(a) for a fiscal year that is 
                        available after determining the amounts 
                        to be reserved under subparagraphs (A) 
                        and (B), the Secretary shall allot--
                                  (I) the amount of the 
                                remainder that is less than or 
                                equal to the total amount that 
                                was allotted to States for 
                                fiscal year 2005 under section 
                                127(b)(1)(C) of this Act (as in 
                                effect on the day before the 
                                date of enactment of the Job 
                                Training Improvement Act of 
                                2005) in accordance with the 
                                requirements of such section 
                                127(b)(1)(C); and
                                  (II) the amount of the 
                                remainder, if any, in excess of 
                                the amount referred to in 
                                subclause (I) in accordance 
                                with clause (ii).
                          (ii) Formulas for excess funds.--
                        Subject to clauses (iii) and (iv), of 
                        the amounts described in clause 
                        (i)(II)--
                                  (I) 33\1/3\ percent shall be 
                                allotted on the basis of the 
                                relative number of individuals 
                                in the civilian labor force who 
                                are ages 16-19 in each State, 
                                compared to the total number of 
                                individuals in the civilian 
                                labor force who are ages 16-19 
                                in all States;
                                  (II) 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; and
                                  (III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged youth who are 
                                ages 16 through 21 in each 
                                State, compared to the total 
                                number of disadvantaged youth 
                                who are ages 16 through 21 in 
                                all States.
                          (iii) Minimum and maximum 
                        percentages.--The Secretary shall 
                        ensure that no State shall receive an 
                        allotment for a fiscal year that is 
                        less than 90 percent or greater than 
                        130 percent of the allotment percentage 
                        of that State for the preceding fiscal 
                        year.
                          (iv) Small state minimum allotment.--
                        Subject to clause (iii), the Secretary 
                        shall ensure that no State shall 
                        receive an allotment under this 
                        paragraph that is less than \3/10\ of 1 
                        percent of the amount available under 
                        subparagraph (A).
          (2) Definitions.--For the purposes of paragraph (1), 
        the following definitions apply:
                  (A) Allotment percentage.--The term 
                ``allotment percentage'', used with respect to 
                fiscal year 2006 or a subsequent fiscal year, 
                means a percentage of the remainder described 
                in paragraph (1)(C)(i) that is received through 
                an allotment made under this subsection for the 
                fiscal year. The term, with respect to fiscal 
                year 2005, means the percentage of the amounts 
                allotted to States under this chapter (as in 
                effect on the day before the date of enactment 
                of the Job Training Improvement Act of 2005) 
                that is received by the State involved for 
                fiscal year 2005.
                  (B) Disadvantaged youth.--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 poverty line.
          (3) Special rule.--For purposes of the formulas 
        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.
  [(c)] (b) Reallotment.--
          (1) * * *
          [(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.]
          (2) Amount.--The amount available for reallotment for 
        a program year is equal to the amount by which the 
        unexpended balance at the end of the program year prior 
        to the program year for which the determination is made 
        exceeds 30 percent of the total amount of funds 
        available to the State under this section during such 
        prior program year (including amounts allotted to the 
        State in all prior program years that remained 
        available). For purposes of this paragraph, the 
        expended balance is the amount that is the difference 
        between--
                  (A) the total amount of funds available to 
                the State under this section during the program 
                year prior to the program year for which the 
                determination is made (including amounts 
                allotted to the State in all prior program 
                years that remained available); and
                  (B) the accrued expenditures during such 
                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] for the program 
        year in which the determination is made, 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.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State which does not have an 
        amount available for reallotment under paragraph (2) 
        for 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] 
        accrued expenditure 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'' shallbe 
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.]
  (a) Reservation for Statewide Activities.--
          (1) In general.--The Governor of a State shall 
        reserve not more than 10 percent of the amount allotted 
        to the State under section 127(a)(1)(C) for a fiscal 
        year for statewide activities.
          (2) Use of funds.--Regardless of whether the amounts 
        are allotted under section 127(a)(1)(C) and reserved 
        under paragraph (1) or allotted under section 132 and 
        reserved under section 133(a), the Governor may use the 
        reserved amounts to carry out statewide youth 
        activities under section 129(b) or statewide employment 
        and training activities under section 133.
  (b) Within State Allocation.--
          (1) In general.--Of the amounts allotted to the State 
        under section 127(a)(1)(C) and not reserved under 
        subsection (a)(1)--
                  (A) 80 percent of such amounts shall be 
                allocated by the Governor to local areas in 
                accordance with paragraph (2); and
                  (B) 20 percent of such amounts shall be 
                allocated by the Governor to local areas in 
                accordance with paragraph (3).
          (2) Established formula.--
                  (A) In general.--Of the amounts described in 
                paragraph (1)(A), the Governor shall allocate--
                          (i) 33\1/3\ percent shall be allotted 
                        on the basis of the relative number of 
                        individuals in the civilian labor force 
                        who are ages 16-19 in each local area, 
                        compared to the total number of 
                        individuals in the civilian labor force 
                        who are ages 16-19 in all local areas 
                        in the State;
                          (ii) 33\1/3\ percent shall be 
                        allotted on the basis of the relative 
                        number of unemployed individuals in 
                        each local area, compared to the total 
                        number of unemployed individuals in all 
                        local areas in the State; and
                          (iii) 33\1/3\ percent on the basis of 
                        the relative number of disadvantaged 
                        youth who are ages 16 through 21 in 
                        each local area, compared to the total 
                        number of disadvantaged youth who are 
                        ages 16 through 21 in all local areas 
                        in the State.
                  (B) Minimum and maximum percentages.--The 
                Governor shall ensure that no local area shall 
                receive an allocation for a fiscal year under 
                this paragraph that is less than 90 percent or 
                greater than 130 percent of the allocation 
                percentage of the local area for the preceding 
                fiscal year.
                  (C) Definitions.--
                          (i) Allocation percentage.--For 
                        purposes of this paragraph, the term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2006 or a 
                        subsequent fiscal year, means a 
                        percentage of the amount described in 
                        paragraph(1)(A) that is received 
                        through an allocation made under this 
                        paragraph for the fiscal year. The 
                        term, with respect to fiscal year 2005, 
                        means the percentage of the amounts 
                        allocated to local areas under this 
                        chapter (as in effect on the day before 
                        the date of enactment of the Job 
                        Training Improvement Act of 2005) that 
                        is received by the local area involved 
                        for fiscal year 2005.
                          (ii) Disadvantaged youth.--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 poverty line.
          (3) Youth discretionary allocation.--The Governor 
        shall allocate to local areas the amounts described in 
        paragraph (1)(B) in accordance with such demographic 
        and economic factors as the Governor, after 
        consultation with the State board and local boards, 
        determines are appropriate.
          (4) Local administrative cost limit.--
                  (A) In general.--Of the amounts 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 
                boards for the administrative costs of carrying 
                out local workforce investment activities under 
                this chapter or chapter 5.
                  (B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may 
                be used for the administrative costs of any of 
                the local workforce investment activities 
                described in this chapter or chapter 5, 
                regardless of whether the funds were allocated 
                under this subsection or section 133(b).
  (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.]
          (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unexpended balance at the end of the program year prior 
        to the program year for which the determination is made 
        exceeds 30 percent of the total amount of funds 
        available to the local area under this section during 
        such prior program year, (including amounts allotted to 
        the local area in prior program years that remain 
        available). For purposes of this paragraph, the 
        unexpended balance is the amount that is the difference 
        between--
                  (A) the total amount of funds available to 
                the local area under this section during the 
                program year prior to the program year for 
                which the determination is made (including 
                amounts allocated to the local area in all 
                prior program years that remained available); 
                and
                  (B) the accrued expenditures during such 
                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)] subsection 
        (b) for such activities for [the prior program year] 
        the program year in which the determination is made, as 
        compared to the total amount allocated to all eligible 
        local areas in the State under [subsection (b)(3)] 
        subsection (b) 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.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not 
        have an amount available for reallocation under 
        paragraph (2) for 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 theState 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.]
  (a) Youth Participant Eligibility.--
          (1) In general.--The individuals participating in 
        activities carried out under this chapter by a local 
        area during any program year shall be individuals who, 
        at the time the eligibility determination is made, 
        are--
                  (A) not younger than age 16 or older than age 
                24; and
                  (B) one or more of the following:
                          (i) school dropouts;
                          (ii) recipients of a secondary school 
                        diploma, General Educational 
                        Development credential (GED), or other 
                        State-recognized equivalent (including 
                        recognized alternative standards for 
                        individuals with disabilities) who are 
                        deficient in basic skills and not 
                        attending any school;
                          (iii) court-involved youth attending 
                        an alternative school;
                          (iv) youth in foster care or who have 
                        been in foster care; or
                          (v) in school youth who are low-
                        income individuals and one or more of 
                        the following:
                                  (I) Deficient in literacy 
                                skills.
                                  (II) Homeless, runaway, or 
                                foster children.
                                  (III) Pregnant or parents.
                                  (IV) Offenders.
                                  (V) Individuals who require 
                                additional assistance to 
                                complete an educational 
                                program, or to secure and hold 
                                employment.
          (2) Priority for school dropouts.--A priority in the 
        provision of services under this chapter shall be given 
        to individuals who are school dropouts.
          (3) Limitations on activities for in-school youth.--
                  (A) Percentage of funds.--For any program 
                year, not more than 30 percent of the funds 
                available for statewide activities under 
                subsection (b), and not more than 30 percent of 
                funds available to local areas under subsection 
                (c), may be used to provide activities for in-
                school youth meeting the requirements of 
                paragraph (1)(B)(v).
                  (B) Non-school hours required.--
                          (i) In general.--Except as provided 
                        in clause (ii), activities carried out 
                        under this chapter for in-school youth 
                        meeting the requirements of paragraph 
                        (1)(B)(v) shall only be carried out in 
                        non-school hours or periods when school 
                        is not in session (such as before and 
                        after school or during recess).
                          (ii) Exception.--The requirements of 
                        clause (i) shall not apply to 
                        activities carried out for in-school 
                        youth meeting the requirements of 
                        paragraph (1)(B)(v) during school hours 
                        that are part of a program that has 
                        demonstrated effectiveness in high 
                        school youth attaining diplomas.
  (b) Statewide Activities.--
          (1) In general.--Funds reserved by a Governor for a 
        State as described in sections 128(a) and 133(a)(1) may 
        be used for statewide activities including--
                  (A) additional assistance to local areas that 
                have high concentrations of eligible youth;
                  (B) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop 
                delivery system;
                  (C) conducting evaluations under section 
                136(e) of activities authorized under this 
                chapter and chapter 5 in coordination with 
                evaluations carried out by the Secretary under 
                section 172, research, and demonstration 
                projects;
                  (D) providing incentive grants to local areas 
                for regional cooperation among local boards 
                (including local boards in 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;
                  (E) providing technical assistance and 
                capacity building to local areas, one-stop 
                operators, one-stop partners, and eligible 
                providers, including the development and 
                training of staff, the development of exemplary 
                program activities, and the provision of 
                technical assistance to local areas that fail 
                to meet local performance measures;
                  (F) operating a fiscal and management 
                accountability system under section 136(f); and
                  (G) carrying out monitoring and oversight of 
                activities under this chapter and chapter 5.
          (2) Limitation.--Not more than 5 percent of the funds 
        allotted under section 127(b) shall be used by the 
        State for administrative activities carried out under 
        this subsection and section 133(a).
          (3) Prohibition.--No funds described in this 
        subsection or in section 134(a) may 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) * * *
                  (B) develop service strategies for each 
                participant that are directly linked to one or 
                more of the performance outcomes relating to 
                this chapter under section 136, and 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) activities leading to the 
                        attainment of a secondary school 
                        diploma, General Educational 
                        Development credential (GED), or other 
                        State-recognized equivalent (including 
                        recognized alternative standards for 
                        individuals with disabilities);
                          [(i)] (ii) preparation for 
                        postsecondary educational opportunities 
                        and advanced training, in appropriate 
                        cases;
                          [(ii)] (iii) strong linkages between 
                        academic and occupational learning that 
                        lead to the attainment of recognized 
                        credentials;
                          [(iii)] (iv) 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.]
                          (v) effective connections to 
                        employers in sectors of the local labor 
                        market experiencing high growth in 
                        employment opportunities.
          (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] secondary school diploma, General 
                Educational Development credential (GED), or 
                other State-recognized equivalent (including 
                recognized alternative standards for 
                individuals with disabilities), including 
                dropout prevention strategies;

           *       *       *       *       *       *       *

                  (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[.];
                  (K) on-the-job training opportunities; and
                  (L) financial literacy skills.
          (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) * * *

           *       *       *       *       *       *       *

          [(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 one 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 one 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)] (4) Prohibitions.--
                  (A) * * *

           *       *       *       *       *       *       *

          [(7)] (5) Linkages.--In coordinating the programs 
        authorized under this section, [youth councils] local 
        boards shall establish linkages with educational 
        agencies responsible for services to participants as 
        appropriate.
          [(8)] (6) 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]


 CHAPTER 5--COMPREHENSIVE EMPLOYMENT AND TRAINING ACTIVITIES FOR ADULTS

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, other than 
        under subsection (a)(4), (f), and (g)); 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 
totalexcess 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.]
  (a) In General.--The Secretary shall--
          (1) reserve 10 percent of the amount appropriated 
        under section 137(b) for a fiscal year, of which--
                  (A) not less than 75 percent shall be used 
                for national dislocated worker grants under 
                section 173, of which up to $125,000,000 may be 
                used to carry out section 171(d);
                  (B) not more than 20 percent may be used for 
                demonstration projects under section 171; and
                  (C) not more than 5 percent may be used to 
                provide technical assistance under section 170; 
                and
          (2) make allotments from 90 percent of the amount 
        appropriated under section 137(b) for a fiscal year in 
        accordance with subsection (b).
  (b) Allotment Among States for Adult Employment and Training 
Activities.--
          (1) Reservation for outlying areas.--
                  (A) 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 to provide assistance to 
                outlying areas to carry out employment and 
                training activities for adults and statewide 
                workforce investment activities.
                  (B) Restriction.--The Republic of Palau shall 
                cease to be eligible to receive funding under 
                this paragraph upon entering into an agreement 
                for extension of United States educational 
                assistance under the Compact of Free 
                Association (approved by the Compact of Free 
                Association Amendments Act of 2003 (Public Law 
                108-188)) after the date of enactment of the 
                Job Training Improvement Act of 2005.
          (2) States.--Subject to paragraph (5), of the 
        remainder of the amount referred to under subsection 
        (a)(2) for a fiscal year that is available after 
        determining the amount to be reserved under paragraph 
        (1), the Secretary shall allot to the States for 
        employment and training activities for adults and for 
        statewide workforce investment activities--
                  (A) 26 percent in accordance with paragraph 
                (3); and
                  (B) 74 percent in accordance with paragraph 
                (4).
          (3) Base formula.--
                  (A) Fiscal year 2006.--
                          (i) In general.--Subject to clause 
                        (ii), the amount referred to in 
                        paragraph (2)(A) shall be allotted for 
                        fiscal year 2006 on the basis of 
                        allotment percentage of each State 
                        under section 6 of the Wagner-Peyser 
                        Act for fiscal year 2005.
                          (ii) Excess amounts.--If the amount 
                        referred to in paragraph (2)(A) for 
                        fiscal year 2006 exceeds the amount 
                        that was available for allotment to the 
                        States under the Wagner-Peyser Act for 
                        fiscal year 2005, such excess amount 
                        shall be allotted on the basis of the 
                        relative number of individuals in the 
                        civilian labor force in each State, 
                        compared to the total number of 
                        individuals in the civilian labor force 
                        in all States, adjusted to ensure that 
                        no State receives less than \3/10\ of 
                        one percent of such excess amount.
                          (iii) Definition.--For purposes of 
                        this subparagraph, the term ``allotment 
                        percentage'' means the percentage of 
                        the amounts allotted to States under 
                        section 6 of the Wagner-Peyser Act that 
                        is received by the State involved for 
                        fiscal year 2005.
                  (B) Fiscal years 2007 and thereafter.--
                          (i) In general.--Subject to clause 
                        (ii), the amount referred to in 
                        paragraph(2)(A) shall be allotted for 
                        fiscal year 2007 and each fiscal year 
                        thereafter on the basis of the 
                        allotment percentage of each State 
                        under this paragraph for the preceding 
                        fiscal year.
                          (ii) Excess amounts.--If the amount 
                        referred to in paragraph (2)(A) for 
                        fiscal year 2007 or any fiscal year 
                        thereafter exceeds the amount that was 
                        available for allotment under this 
                        paragraph for the prior fiscal year, 
                        such excess amount shall be allotted on 
                        the basis of the relative number of 
                        individuals in the civilian labor force 
                        in each State, compared to the total 
                        number of individuals in the civilian 
                        labor force in all States, adjusted to 
                        ensure that no State receives less than 
                        \3/10\ of one percent of such excess 
                        amount.
                          (iii) Definition.--For purposes of 
                        this subparagraph, the term ``allotment 
                        percentage'' means the percentage of 
                        the amounts allotted to States under 
                        this paragraph in a fiscal year that is 
                        received by the State involved for such 
                        fiscal year.
          (4) Consolidated formula.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), of the amount referred to in paragraph 
                (2)(B)--
                          (i) 60 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) 25 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) 15 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.
                  (B) Minimum and maximum percentages.--
                          (i) Minimum percentage.--The 
                        Secretary shall ensure that no State 
                        shall receive an allotment under this 
                        paragraph for a fiscal year that is 
                        less than 90 percent of the allotment 
                        percentage of the State under this 
                        paragraph for the preceding fiscal 
                        year.
                          (ii) Maximum percentage.--Subject to 
                        clause (i), the Secretary shall ensure 
                        that no State shall receive an 
                        allotment for a fiscal year under this 
                        paragraph that is more than 130 percent 
                        of the allotment of the State under 
                        this paragraph for the preceding fiscal 
                        year.
                  (C) Small state minimum allotment.--Subject 
                to subparagraph (B), the Secretary shall ensure 
                that no State shall receive an allotment under 
                this paragraph that is less than \2/10\ of 1 
                percent of the amount available under 
                subparagraph (A).
                  (D) Definitions.--For the purposes of this 
                paragraph:
                          (i) Allotment percentage.--The term 
                        ``allotment percentage'', used with 
                        respect to fiscal year 2006 or a 
                        subsequent fiscal year, means a 
                        percentage of the amounts described in 
                        paragraph (2)(B) that is received 
                        through an allotment made under this 
                        paragraph for the fiscal year. The 
                        term, with respect to fiscal year 2005, 
                        means the percentage of the amounts 
                        allotted to States under this chapter 
                        (as in effect on the day before the 
                        date of enactment of the Job Training 
                        Improvement Act of 2005) and under 
                        reemployment service grants received by 
                        the State involved for fiscal year 
                        2005.
                          (ii) Disadvantaged adult.--The term 
                        ``disadvantaged adult'' means an 
                        individual who is age 22 through 72 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 poverty line.
                          (iii) Excess number.--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\1/2\ percent of the civilian labor 
                        force in the State.
          (5) Adjustments in allotments based on differences 
        with unconsolidated formulas.--
                  (A) In general.--The Secretary shall ensure 
                that for any fiscal year no State has an 
                allotment difference, as defined in 
                subparagraph (C), that is less than zero. The 
                Secretary shall adjust the amounts allotted to 
                the States under this subsection in accordance 
                with subparagraph (B) if necessary to carry out 
                this subparagraph.
                  (B) Adjustments in allotments.--
                          (i) Redistribution of excess 
                        amounts.--
                                  (I) In general.--If necessary 
                                to carry out subparagraph (A), 
                                the Secretary shall reduce the 
                                amounts that would be allotted 
                                under paragraphs (3) and (4) to 
                                States that have an excess 
                                allotment difference, as 
                                defined in subclause (II), by 
                                the amount of such excess, and 
                                use such amounts to increase 
                                the allotments to States that 
                                have an allotment difference 
                                less than zero.
                                  (II) Excess amounts.--For 
                                purposes of subclause (I), the 
                                term ``excess'' allotment 
                                difference means an allotment 
                                difference for a State that 
                                is--
                                          (aa) in excess of 3 
                                        percent of the amount 
                                        described in 
                                        subparagraph 
                                        (C)(i)(II); or
                                          (bb) in excess of a 
                                        percentage established 
                                        by the Secretary that 
                                        is greater than 3 
                                        percent of the amount 
                                        described in 
                                        subparagraph (C)(i)(II) 
                                        if the Secretary 
                                        determines that such 
                                        greater percentage is 
                                        sufficient to carry out 
                                        subparagraph (A).
                          (ii) Use of amounts available under 
                        national reserve account.--If the funds 
                        available under clause (i) are 
                        insufficient to carry out subparagraph 
                        (A), the Secretary shall use funds 
                        reserved under section 132(a) in such 
                        amounts as are necessary to increase 
                        the allotments to States to meet the 
                        requirements of subparagraph (A). Such 
                        funds shall be used in the same manner 
                        as the States use the other funds 
                        allotted under this subsection.
                  (C) Definition of allotment difference.--
                          (i) In general.--For purposes of this 
                        paragraph, the term ``allotment 
                        difference'' means the difference 
                        between--
                                  (I) the total amount a State 
                                would receive of the amounts 
                                available for allotment under 
                                subsection (b)(2) for a fiscal 
                                year pursuant to paragraphs (3) 
                                and (4); and
                                  (II) the total amount the 
                                State would receive of the 
                                amounts available for allotment 
                                under subsection (b)(2) for the 
                                fiscal year if such amounts 
                                were allotted pursuant to the 
                                unconsolidated formulas 
                                (applied as described in clause 
                                (iii)) that were used in 
                                allotting funds for fiscal year 
                                2005.
                          (ii) Unconsolidated formulas.--For 
                        purposes of clause (i), the 
                        unconsolidated formulas are:
                                  (I) The requirements for the 
                                allotment of funds to the 
                                States contained in section 
                                132(b)(1)(B) of this Act (as in 
                                effect on the day before the 
                                date of enactment of the Job 
                                Training Improvement Act of 
                                2005) that were applicable to 
                                the allotment of funds under 
                                such section for fiscal year 
                                2005.
                                  (II) The requirements for the 
                                allotment of funds to the 
                                States contained in section 
                                132(b)(2)(B) of this Act (as in 
                                effect on the day before the 
                                date of enactment of the Job 
                                Training Improvement Act of 
                                2005) that were applicable to 
                                the allotment of funds under 
                                such section for fiscal year 
                                2005.
                                  (III) The requirements for 
                                the allotment of funds to the 
                                States that were contained in 
                                section 6 of the Wagner-Peyser 
                                Act (as in effect on the day 
                                before the date of enactment of 
                                the Job Training Improvement 
                                Act of 2005) that were 
                                applicable to the allotment of 
                                funds under such Act for fiscal 
                                year 2005.
                                  (IV) The requirements for the 
                                allotment of funds to the 
                                States that were established by 
                                the Secretary for Reemployment 
                                Services Grants that were 
                                applicable to the allotment of 
                                funds for such grants for 
                                fiscal year 2005.
                          (iii) Proportionate application of 
                        unconsolidated formulas based on fiscal 
                        year 2005.--In calculating the amount 
                        under clause (i)(II), each of the 
                        unconsolidated formulas identified in 
                        clause (ii) shall be applied, 
                        respectively, only to the proportionate 
                        share of the total amount of funds 
                        available for allotment under 
                        subsection (b)(2) for a fiscal year 
                        that is equal to the proportionate 
                        share to which each of the 
                        unconsolidated formulas applied with 
                        respect to the total amount of funds 
                        allotted to the States under all of the 
                        unconsolidated formulas in fiscal year 
                        2005.
                          (iv) Rule of construction.--The 
                        amounts used to adjust the allotments 
                        to a State under subparagraph (B) for a 
                        fiscal year shall not be included in 
                        the calculation of the amounts under 
                        clause (i) for a subsequent fiscal 
                        year, including the calculation of 
                        allocation percentages for a preceding 
                        fiscal year applicable to paragraphs 
                        (3) and (4) and to the unconsolidated 
                        formulas described in clause (ii).
  (c) Reallotment.--
          (1) * * *
          [(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.]
          (2) Amount.--The amount available for reallotment for 
        a program year is equal to the amount by which the 
        unexpended balance at the end of the program year prior 
        to the program year for which the determination is made 
        exceeds 30 percent of the total amount of funds 
        available to the State under this section during such 
        prior program year (including amounts allotted to the 
        State in all prior program years that remained 
        available). For purposes of this paragraph, the 
        expended balance is the amount that is the difference 
        between--
                  (A) the total amount of funds available to 
                the State under this section during the program 
                year prior to the program year for which the 
                determination is made (including amounts 
                allotted to the State in all prior program 
                years that remained available); and
                  (B) the accrued expenditures during such 
                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] for the program 
        year in which the determination is made, 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.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State that does not have an 
        amount available for reallotment under paragraph (2) 
        for 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] 
        accrued expenditure 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 providedto 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.]
  (a) Reservation for Statewide Activities.--The Governor of a 
State may reserve up to 50 percent of the total amount allotted 
to the State under section 132 for a fiscal year to carry out 
the statewide activities described in section 134(a).
  (b) Allocations to Local Areas.--
          (1) In general.--Of the amounts allotted to the State 
        under section 132(b)(2) and not reserved under 
        subsection (a)--
                  (A) 85 percent of such amounts shall be 
                allocated by the Governor to local areas in 
                accordance with paragraph (2); and
                  (B) 15 percent of such amounts shall be 
                allocated by the Governor to local areas in 
                accordance with paragraph (3).
          (2) Established formula.--
                  (A) In general.--Of the amounts described in 
                paragraph (1)(A), the Governor shall allocate--
                          (i) 60 percent on the basis of the 
                        relative number of unemployed 
                        individuals in each local area, 
                        compared to the total number of 
                        unemployed individuals in all local 
                        areas in the State;
                          (ii) 25 percent on the basis of the 
                        relative excess number of unemployed 
                        individuals in each local area, 
                        compared to the total excess number of 
                        unemployed individuals in all local 
                        areas in the State; and
                          (iii) 15 percent shall be allotted on 
                        the basis of the relative number of 
                        disadvantaged adults in each local 
                        area, compared to the total number of 
                        disadvantaged adults in all local areas 
                        in the State.
                  (B) Minimum and maximum percentages.--The 
                Governor shall ensure that no local area shall 
                receive an allocation for a fiscal year under 
                this paragraph that is less than 90 percent or 
                greater than 130 percent of the allocation 
                percentage of the local area for the preceding 
                fiscal year.
                  (C) Definitions.--
                          (i) Allocation percentage.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2006 or a 
                        subsequent fiscal year, means a 
                        percentage of the amount described in 
                        paragraph (1)(A) that is received 
                        through an allocation made under this 
                        paragraph for the fiscal year. The 
                        term, with respect to fiscal year 2005, 
                        means the percentage of the amounts 
                        allocated to local areas under this 
                        chapter (as in effect on the day before 
                        the date of enactment of the Job 
                        Training Improvement Act of 2005) that 
                        is received by the local area involved 
                        for fiscal year 2005.
                          (ii) Disadvantaged adult.--The term 
                        ``disadvantaged adult'' means an 
                        individual who is age 22 through 72 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 poverty line.
                          (iii) Excess number.--The term 
                        ``excess number'' means, used with 
                        respect to the excess number of 
                        unemployed individuals within a local 
                        area, the number that represents the 
                        number of unemployed individuals in 
                        excess of 4.5 percent of the civilian 
                        labor force in the local area.
          (3) Discretionary allocation.--The Governor shall 
        allocate to local areas the amounts described in 
        paragraph (1)(B) based on a formula developed in 
        consultation with the State board and local boards. 
        Such formula shall be objective and geographically 
        equitable and may include such demographic and economic 
        factors as the Governor, after consultation with the 
        State board and local boards, determines are 
        appropriate.
          (4) Local administrative cost limit.--
                  (A) In general.--Of the amounts allocated to 
                a local area under this subsection and section 
                128(b) for a fiscal year, not more than 10 
                percent of the amount may be used by the local 
                boards for the administrative costs of carrying 
                out local workforce investment activities under 
                this chapter or chapter 4.
                  (B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may 
                be used for the administrative costs of any of 
                the local workforce investment activities 
                described in this chapter or chapter 4, 
                regardless of whether the funds were allocated 
                under this subsection or section 128(b).
  (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.]
          (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unexpended balance at the end of the program year prior 
        to the program year for which the determination is made 
        exceeds 30 percent of the total amount of funds 
        available to the local area under this section during 
        such prior program year (including amounts allotted to 
        the local area in prior program years that remain 
        available). For purposes of this paragraph, the 
        unexpended balance is the amount that is the difference 
        between--
                  (A) the total amount of funds available to 
                the local area under this section during the 
                program year prior to the program year for 
                which the determination is made (including 
                amounts allocated to the local area in all 
                prior program years that remained available); 
                and
                  (B) the accrued expenditures during such 
                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)] subsection 
        (b) for such activities for [the prior program year] 
        the program year in which the determination is made, as 
        compared to the total amount allocated to all eligible 
        local areas in the State under [subsection (b)(3)] 
        subsection (b) 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.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not 
        have an amount available for reallocation under 
        paragraph (2) for 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 youthactivities 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).]
          (1) In general.--
                  (A) Required use of funds.--Not less than 50 
                percent of the funds reserved by a Governor 
                under section 133(a) shall be used to support 
                the provision of core services in local areas, 
                consistent with the local plan, through one-
                stop delivery systems by distributing funds to 
                local areas in accordance with subparagraph 
                (B). Such funds may be used by States to employ 
                State personnel to provide such services in 
                designated local areas in consultation with 
                local boards.
                  (B) Method of distributing funds.--The method 
                of distributing funds under this paragraph 
                shall be developed in consultation with the 
                State board and local boards. Such method of 
                distribution, which may include the formula 
                established under section 121(h)(3), shall be 
                objective and geographically equitable, and may 
                include factors such as the number of centers 
                in the local area that have been certified, the 
                population served by such centers, and the 
                performance of such centers.
                  (C) Other use of funds.--Funds reserved by a 
                Governor for a State--
                          (i) under section 133(a) and not used 
                        under subparagraph (A), may be used for 
                        statewide activities described in 
                        paragraph (2); and
                          (ii) under section 133(a) and not 
                        used under subparagraph (A), and under 
                        section 128(a) may be used to carry out 
                        any of the statewide employment and 
                        training activities described in 
                        paragraph (3).
          (2) Statewide rapid response activities.--A State 
        shall carry out statewide rapid response activities 
        using funds reserved as described in section 133(a). 
        Such activities shall include--
                  (A) 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
                  (B) 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, working in conjunction with 
                the local boards and the chief elected 
                officials in the local areas.
          (3) Statewide activities.--Funds reserved by a 
        Governor for a State as described in sections 133(a) 
        and 128(a) may be used for statewide activities 
        including--
                  (A) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop 
                delivery system;
                  (B) conducting evaluations under section 
                136(e) of activities authorized under this 
                chapter and chapter 4 in coordination with 
                evaluations carried out by the Secretary under 
                section 172, research, and demonstration 
                projects;
                  (C) providing incentive grants to local areas 
                for regional cooperation among local boards 
                (including local boards in 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;
                  (D) providing technical assistance and 
                capacity building to local areas, one-stop 
                operators, one-stop partners, and eligible 
                providers, including the development and 
                training of staff, the development of exemplary 
                program activities, and the provision of 
                technical assistance to local areas that fail 
                to meet local performance measures;
                  (E) operating a fiscal and management 
                accountability system under section 136(f);
                  (F) carrying out monitoring and oversight of 
                activities carried out under this chapter and 
                chapter 4;
                  (G) implementing innovative programs, such as 
                incumbent worker training programs, programs 
                and strategies designed to meet the needs of 
                businesses in the State, including small 
                businesses, and engage employers in workforce 
                activities, and programs serving individuals 
                with disabilities consistent with section 188;
                  (H) developing strategies for effectively 
                serving hard-to-serve populations and for 
                integrating programs and services among one-
                stop partners;
                  (I) implementing innovative programs for 
                displaced homemakers, which for purposes of 
                this subparagraph 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.);
                  (J) implementing programs to increase the 
                number of individuals training for and placed 
                in nontraditional employment; and
                  (K) carrying out activities to facilitate 
                remote access to services provided through a 
                one-stop delivery system, including 
                facilitating access through the use of 
                technology.
          (4) Limitation.--Not more than 5 percent of the funds 
        allotted under section 132(b) shall be used by the 
        State for administrative activities carried out under 
        this subsection and section 128(a).
  (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)] 
under section 133(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].
  [(d)] (c) 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.]
          (1) In general.--Funds allocated to a local area for 
        adults under section 133(b) shall be used--
                  (A) to establish a one-stop delivery system 
                as described in section 121(e);
                  (B) to provide the core services described in 
                paragraph (2) through the one-stop delivery 
                system in accordance with such paragraph;
                  (C) to provide the intensive services 
                described in paragraph (3) to adults described 
                in such paragraph; and
                  (D) to provide training services described in 
                paragraph (4) to adults described in such 
                paragraph.
          (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] under the one-stop partner programs 
                described in section 121(b);

           *       *       *       *       *       *       *

                  [(D) job search and placement assistance, and 
                where appropriate, career counseling;]
                  (D) labor exchange services, including--
                          (i) job search and placement 
                        assistance, and where appropriate 
                        career counseling;
                          (ii) appropriate recruitment services 
                        for employers; and
                          (iii) reemployment services provided 
                        to unemployment claimants.

           *       *       *       *       *       *       *

                  (I) provision of information regarding filing 
                claims for unemployment compensation and the 
                administration of the work test for the 
                unemployment compensation system;
                  [(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]
                  (J) assistance in establishing eligibility 
                for 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

           *       *       *       *       *       *       *

          (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.]
                  (A) In general.--
                          (i) Eligibility.--Funds allocated to 
                        a local area under section 133(b) shall 
                        be used to provide intensive services 
                        for adults who--
                                  (I) are unemployed and who 
                                have been determined by the 
                                one-stop operator to be--
                                          (aa) unlikely or 
                                        unable to obtain 
                                        suitable employment 
                                        through core services; 
                                        and
                                          (bb) in need of 
                                        intensive services in 
                                        order to obtain 
                                        suitable employment; or
                                  (II) are employed, but who 
                                are determined by a one-stop 
                                operator to be in need of 
                                intensive services to obtain or 
                                retain suitable employment.
                          (ii) Definition.--The Governor shall 
                        define the term ``suitable employment'' 
                        for purposes of this subparagraph.

           *       *       *       *       *       *       *

                  (C) Types of services.--Such intensive 
                services may include the following:
                          (i) * * *

           *       *       *       *       *       *       *

                          (v) Case management [for participants 
                        seeking training services under 
                        paragraph (4)].

           *       *       *       *       *       *       *

                          (vii) Internships and work 
                        experience.
                          (viii) Literacy activities relating 
                        to basic work readiness, information 
                        and communication technology literacy 
                        activities, and financial literacy 
                        activities.
                          (ix) Out-of-area job search 
                        assistance and relocation assistance.
          (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).]
                  (A) In general.--
                          (i) Eligibility.--Funds allocated to 
                        a local area under section 133(b) shall 
                        be used to provide training services to 
                        adults who--
                                  (I) after an interview, 
                                evaluation, or assessment, and 
                                case management, have been 
                                determined by a one-stop 
                                operator or one-stop partner, 
                                as appropriate, to--
                                          (aa) be unlikely or 
                                        unable to obtain or 
                                        retain suitable 
                                        employment through 
                                        intensive services 
                                        under paragraph (3)(A);
                                          (bb) be in need of 
                                        training services to 
                                        obtain or retain 
                                        suitable employment; 
                                        and
                                          (cc) have the skills 
                                        and qualifications to 
                                        successfully 
                                        participate in the 
                                        selected program of 
                                        training services;
                                  (II) 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 receiving such services 
                                are willing to commute or 
                                relocate;
                                  (III) who meet the 
                                requirements of subparagraph 
                                (B); and
                                  (IV) who are determined 
                                eligible in accordance with the 
                                priority system in effect under 
                                subparagraph (E).
                          (ii) Definition.--The Governor shall 
                        define the term ``suitable employment'' 
                        for purposes of this subparagraph.
                  (B) Qualification.--
                          (i) Requirement.--[Except] 
                        Notwithstanding section 479B of the 
                        Higher Education Act of 1965 (20 U.S.C. 
                        1087uu) and except as provided in 
                        clause (ii), provision of such training 
                        services shall be limited to 
                        individuals who--
                                  (I) * * *

           *       *       *       *       *       *       *

                  (D) Training services.--Training services may 
                include--
                          (i) * * *

           *       *       *       *       *       *       *

                          [(iv) training programs operated by 
                        the private sector;]
                          (iv) entrepreneurial training, 
                        including providing information about 
                        obtaining microcredit loans for the 
                        purpose of starting a business, 
                        including contact information of 
                        microcredit lenders operating within 
                        the local area;

           *       *       *       *       *       *       *

                          (viii) adult education and literacy 
                        activities (including English as a 
                        Second Language) provided in 
                        combination with services described in 
                        any of clauses (i) through (vii); and
                          (ix) training that integrates 
                        occupational skills training and 
                        English language acquisition;
                          [(ix)] (x) 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.]
                  (E) Priority.--
                          (i) In general.--A priority shall be 
                        given to unemployed individuals for the 
                        provision of intensive and training 
                        services under this subsection.
                          (ii) Additional priority.--If the 
                        funds in the local area, including the 
                        funds allocated under section 133(b), 
                        for serving recipients of public 
                        assistance and other low-income 
                        individuals, including single parents, 
                        displaced homemakers, and pregnant 
                        single women, is limited, the priority 
                        for the provision of intensive and 
                        training services under this subsection 
                        shall include such recipients and 
                        individuals.
                          (iii) Determinations.--The Governor 
                        and the appropriate local board shall 
                        direct the one-stop operators in the 
                        local area with regard to making 
                        determinations with respect to the 
                        priority of service under this 
                        subparagraph.
                  (F) Consumer choice requirements.--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) Enhanced individual training 
                        accounts.--Each local board may, 
                        through one-stop centers, assist 
                        individuals receiving individual 
                        training accounts through the 
                        establishment of such accounts that 
                        include, in addition to the funds 
                        provided under this paragraph, funds 
                        from other programs and sources that 
                        will assist the individual in obtaining 
                        training services.
                  (G) Use of individual training accounts.--
                          (i) * * *

           *       *       *       *       *       *       *

                          (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 one or more of the 
                        following categories:
                                  (I) Individuals with 
                                substantial language or 
                                cultural barriers.
                                  (II) Offenders.
                                  (III) Homeless individuals.
                                  (IV) Individuals with 
                                disabilities.
                                  [(IV)] (V) Other hard-to-
                                serve populations as defined by 
                                the Governor involved.
                  (H) Computer technology.--In providing 
                training services under subparagraph (G), funds 
                allocated to a local area under this title may 
                be used to purchase computer technology for use 
                by an individual who is eligible pursuant to 
                subsection (A), only if--
                          (i) such purchase is part of an 
                        ongoing training program; and
                          (ii) such purchase is necessary to 
                        ensure the individual can participate 
                        in such training program.
                Any purchase of computer technology under this 
                subparagraph shall remain the property of the 
                one-stop operator.
  [(e)] (d) 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.]
          (1) Discretionary one-stop delivery activities.--
                  (A) In general.--Funds allocated to a local 
                area under section 133(b) may be used to 
                provide, through the one-stop delivery system--
                          (i) customized screening and referral 
                        of qualified participants in training 
                        services to employers;
                          (ii) customized employment-related 
                        services to employers on a fee-for-
                        service basis;
                          (iii) customer support to navigate 
                        among multiple services and activities 
                        for special participant populations 
                        that face multiple barriers to 
                        employment, including individuals with 
                        disabilities;
                          (iv) employment and training 
                        assistance provided in coordination 
                        with child support enforcement 
                        activities of the State agency carrying 
                        out subtitle D of title IV of the 
                        Social Security Act;
                          (v) activities to improve services to 
                        local employers, including small 
                        employers in the local area, and 
                        increase linkages between the local 
                        workforce investment system and 
                        employers; and
                          (vi) activities to facilitate remote 
                        access to services provided through a 
                        one-stop delivery system, including 
                        facilitating access through the use of 
                        technology.
                  (B) Work support activities for low-wage 
                workers.--
                          (i) In general.--Funds allocated to a 
                        local area under 133(b) may be used to 
                        provide, through the one-stop delivery 
                        system and in collaboration with the 
                        appropriate programs and resources of 
                        the one-stop partners, work support 
                        activities designed to assist low-wage 
                        workers in retaining and enhancing 
                        employment.
                          (ii) Activities.--The activities 
                        described in clause (i) may include 
                        assistance in accessing financial 
                        supports for which such workers may be 
                        eligible and the provision of 
                        activities available through the one-
                        stop delivery system in a manner that 
                        enhances the opportunities of such 
                        workers to participate, such as the 
                        provision of employment and training 
                        activities during nontraditional hours 
                        and the provision of on-site child care 
                        while such activities are being 
                        provided.

           *       *       *       *       *       *       *

          (4) Incumbent worker training programs.--
                  (A) In general.--The local board may use up 
                to 10 percent of the funds allocated to a local 
                area under section 133(b) to carry out 
                incumbent worker training programs in 
                accordance with this paragraph.
                  (B) Training activities.--The training 
                programs for incumbent workers under this 
                paragraph shall be carried out by the local 
                area in conjunction with the employers of such 
                workers for the purpose of assisting such 
                workers in obtaining the skills necessary to 
                retain employment and avert layoffs.
                  (C) Employer match required.--
                          (i) In general.--Employers 
                        participating in programs under this 
                        paragraph shall be required to pay a 
                        proportion of the costs of providing 
                        the training to the incumbent workers. 
                        The Governor shall establish, or may 
                        authorize the local board to establish, 
                        the required portion of such costs, 
                        which shall not be less than--
                                  (I) 10 percent of the costs, 
                                for employers with 50 or fewer 
                                employees;
                                  (II) 25 percent of the costs, 
                                for employers with more than 50 
                                employees but fewer than 100 
                                employees; and
                                  (III) 50 percent of the 
                                costs, for employers with 100 
                                or more employees.
                          (ii) Calculation of match.--The wages 
                        paid by an employer to a worker while 
                        they are attending training may be 
                        included as part of the requirement 
                        payment of the employer.

           *       *       *       *       *       *       *


                     CHAPTER 6--GENERAL PROVISIONS

SEC. 136. PERFORMANCE ACCOUNTABILITY SYSTEM.

  (a) * * *
  (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)] paragraph (2)(B); and

           *       *       *       *       *       *       *

          (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; and
                                  (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.]
                          (ii) Core indicators for eligible 
                        youth.--The core indicators of 
                        performance for youth activities 
                        authorized under section 129 shall 
                        consist of--
                                  (I) entry into employment, 
                                education or advanced training, 
                                or military service;
                                  (II) attainment of secondary 
                                school diploma, General 
                                Educational Development 
                                credential (GED), or other 
                                State-recognized equivalent 
                                (including recognized 
                                alternative standards for 
                                individuals with disabilities); 
                                and
                                  (III) literacy or numeracy 
                                gains.
                  [(C)] (B) Additional indicators.--A State may 
                identify in the State plan additional 
                indicators for workforce investment activities 
                authorized under this subtitle. Such indicators 
                may include customer satisfaction of employers 
                and participants with services received from 
                the 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) * * *

           *       *       *       *       *       *       *

                          (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] for the 2 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] for the 2 
                        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)] (I) how the levels 
                                involved compare with the State 
                                adjusted levels of performance 
                                established for other States, 
                                [taking into account] which 
                                shall be adjusted based on 
                                factors including differences 
                                in economic conditions, such as 
                                unemployment rates and job 
                                losses or gains in particular 
                                industries, the characteristics 
                                of participants when the 
                                participants entered the 
                                program, such as indicators of 
                                poor work history, lack of work 
                                experience, low levels of 
                                literacy or English 
                                proficiency, disability status, 
                                including the number of 
                                veterans with disabilities, and 
                                welfare dependency, and the 
                                services to be provided; and
                                  [(III)] (II) 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 4th 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 4th and 5th 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)] (v) 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)] paragraph (2)(B). 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)] subsection (b)(2)(B) for activities 
                described in such subsection, other than 
                statewide workforce investment activities; and

           *       *       *       *       *       *       *

          [(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.]
          (3) Determinations.--In determining such local levels 
        of performance, the local board, the chief elected 
        official, and the Governor shall ensure such levels are 
        adjusted based on the specific economic characteristics 
        (such as unemployment rates and job losses or gains in 
        particular industries), demographic characteristics, or 
        other characteristics of the population to be served in 
        the local area, such as poor work history, lack of work 
        experience, low levels of literacy or English 
        proficiency, disability status, including the number of 
        veterans with disabilities, and welfare dependency.
  (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) * * *

           *       *       *       *       *       *       *

                  (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[.]; and
                  (G) the number of participants served and the 
                cost per participant.

           *       *       *       *       *       *       *

          (4) Data validation.--In preparing the reports 
        described in this subsection, the States shall 
        establish procedures, consistent with guidelines issued 
        by the Secretary, to ensure the information contained 
        in the report is valid and reliable.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

          (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] section 136(i).
  (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) * * *
                  [(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.]
                  (B) 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 than 30 
                days after the receipt of the appeal.

           *       *       *       *       *       *       *

  [(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.]
  (i) Incentive Grants for States and Local Areas.--
          (1) Incentive grants for states.--
                  (A) In general.--From funds appropriated 
                under section 174, the Secretary may award 
                grants to States for exemplary performance in 
                carrying programs under chapters 4 and 5 of 
                this title. Such awards may be based on States 
                meeting or exceeding the performance measures 
                established under this section, on the 
                performance of the State in serving special 
                populations, including the levels of service 
                provided and the performance outcomes, and such 
                other factors relating to the performance of 
                the State under this title as the Secretary 
                determines is appropriate.
                  (B) Use of funds.--The funds awarded to a 
                State under this paragraph may be used to carry 
                out any activities authorized under chapters 4 
                and 5 of this title, including demonstrations 
                and innovative programs for special 
                populations.
          (2) Incentive grants for local areas.--
                  (A) In general.--From funds reserved under 
                sections 128(a) and 133(a), the Governor may 
                award incentive grants to local areas for 
                exemplary performance with respect to the 
                measures established under this section and 
                with the performance of the local area in 
                serving special populations, including the 
                levels of service and the performance outcomes.
                  (B) Use of funds.--The funds awarded to a 
                local area may be used to carry out activities 
                authorized for local areas under chapters 4 and 
                5 of this title, and such demonstration or 
                other innovative programs to serve special 
                populations as may be approved by the Governor.
  (j) Use of Core Indicators for Other Programs.--In addition 
to the programs carried out under chapters 4 and 5, and 
consistent with the requirements of the applicable authorizing 
laws, the Secretary shall use the core indicators of 
performance described in subsection (b)(2)(A) to assess the 
effectiveness of the programs described under section 
121(b)(1)(B) that are carried out by the Secretary.

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] $1,250,000,000 for fiscal year 2006 and such 
sums as may be necessary for each of fiscal years 2007 through 
2011.
  (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] section 132(a), 
$3,140,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of fiscal years 2007 through 2011.
  [(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. 154. INDUSTRY COUNCILS.

  (a) * * *
  (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) * * *

           *       *       *       *       *       *       *

          (3) Employers outside of local areas.--The industry 
        council may include, or otherwise provide for 
        consultation with, employers from outside the local 
        area who are likely to hire a significant number of 
        enrollees from the Job Corps center.

           *       *       *       *       *       *       *


SEC. 159. MANAGEMENT INFORMATION.

  (a) * * *

           *       *       *       *       *       *       *

  (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.]
          (1) Core indicators.--The Secretary shall annually 
        establish expected levels of performance for Job Corps 
        centers and the Job Corps program relating to each of 
        the core indicators for youth identified in section 
        136(b)(2)(A)(ii).
          (2) Performance of recruiters.--The Secretary shall 
        also establish performance [measures] indicators, and 
        expected performance levels on the performance 
        [measures] indicators, for local and national 
        recruitment service providers serving the Job Corps 
        program. The performance [measures] indicators 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.

           *       *       *       *       *       *       *


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] 2006 through 2011.

                     Subtitle D--National Programs

SEC. 166. NATIVE AMERICAN PROGRAMS.

  (a) * * *

           *       *       *       *       *       *       *

  (h) Administrative Provisions.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Advisory council.--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(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).]
                  (C) Duties.--The Council shall advise the 
                Secretary on the operation and administration 
                of the programs assisted under this section.

           *       *       *       *       *       *       *

  [( 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) * * *

           *       *       *       *       *       *       *

  (d) Authorized Activities.--Funds made available under this 
section and section 127(b)(1)(A)(iii) 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 
(including permanent housing), supportive services, dropout 
prevention activities, followup 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.

           *       *       *       *       *       *       *


SEC. 168. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

  (a) Authorization.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Required activities.--Programs supported under 
        this section shall include--
                  (A) * * *

           *       *       *       *       *       *       *

                  (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)] section 121(e).

           *       *       *       *       *       *       *


[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