[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1261 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1261

      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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 13, 2003

Mr. McKeon (for himself and Mr. Boehner) introduced the following bill; 
   which was referred to the Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
      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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Reinvestment and Adult 
Education Act of 2003''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

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 program for adults.
Sec. 113. Personal reemployment accounts.
Sec. 114. Performance accountability system.
Sec. 115. Authorization of appropriations.
Sec. 116. Job Corps.
Sec. 117. Native American programs.
Sec. 118. Youth challenge grants.
Sec. 119. Technical assistance.
Sec. 120. Demonstration, pilot, multiservice, research and multistate 
                            projects.
Sec. 121. Evaluations.
Sec. 122. Authorization of appropriations for national activities.
Sec. 123. Requirements and restrictions.
Sec. 124. Nondiscrimination.
Sec. 125. Administrative provisions.
                       TITLE II--ADULT EDUCATION

Sec. 201. Table of contents.
Sec. 202. Amendment.
            TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW

Sec. 301. Repeal of Wagner-Peyser provisions.
         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

Sec. 401. Chairperson.
Sec. 402. Rehabilitation Services Administration.
Sec. 403. Director.
Sec. 404. State goals.
Sec. 405. Authorizations of appropriations.
                 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) in paragraph (8)(C), by striking ``not less than 50 
        percent of the cost of training'' and inserting ``a significant 
        portion of the cost of training, as determined by the local 
        board'';
            (2) by striking paragraph (13) and redesignating paragraphs 
        (14) through (23) as paragraphs (13) through (22), 
        respectively;
            (3) by striking paragraph (24) and redesignating paragraphs 
        (25) through (32) as paragraphs (23) through (30), 
        respectively; and
            (4) by striking paragraph (33) and redesignating paragraphs 
        (34) through (53) as paragraphs (31) through (50), 
        respectively.

SEC. 102. PURPOSE.

    Section 106 (29 U.S.C. 2811) is amended to insert the following 
sentence after the period: ``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 designated State 
                        entity responsible for carrying out title I of 
                        the Rehabilitation Act (29 U.S.C. 701 et seq.);
                            ``(ii) the State agency officials 
                        responsible for economic development;
                            ``(iii) representatives of business in the 
                        State who--
                                    ``(I) are owners of businesses, 
                                chief executive 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 ``section (b)(1)(C)(i)'' and 
        inserting ``section (b)(1)(C)(iii)''.
    (b) Functions.--Section 111(d) (29 U.S.C. 2811(d)) is amended--
            (1) 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(g), 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;'';
            (2) 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'';
            (3) 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)'';
            (4) in paragraph (8), by striking ``section 15(e) of the 
        Wagner-Peyser Act'' and inserting ``section 302(e)''; 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. 2811(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)(17)(A) (29 U.S.C. 2822(b)(17(A)) is 
amended--
            (1) in clause (iii) by striking ``and'';
            (2) in clause (iv)--
                    (A) by inserting ``homeless individuals,'' after 
                ``public assistance),''; and
                    (B) by striking ``and individuals with 
                disabilities''; and
            (3) by adding the following new clause after clause (iv):
                            ``(v) how the State will serve the 
                        employment and training needs of individuals, 
                        consistent with section 188 and Executive Order 
                        13217 (relating to community-based alternatives 
                        for individuals with disabilities) including 
                        the provision of outreach, intake, assessments, 
                        and service delivery, the development of 
                        performance measures, and the training of 
                        staff; and''.
    (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)(2), the Governor shall approve a request for 
                designation as a local area from any unit of general 
                local government with a population of 500,000 or more 
                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.''.
            (3) Repeal of appeals.--Section 116(a) is further amended 
        by striking paragraph (5).
    (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(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) superintendents of the local 
                        secondary school systems and the presidents of 
                        community colleges;'';
            (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 ``local area'' and all 
        that follows and inserting ``local area.'';
            (2) in paragraph (3)(B)(i)(I), by striking ``sections 128 
        and 133'' and inserting ``sections 128, 133, and 135D''; and
            (3) in paragraph (4)--
                    (A) by inserting ``, activities authorized under 
                section 135F'' after ``section 134''; and
                    (B) 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. (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(i) (29 
U.S.C. 2832(i)) is repealed.

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 meets the employment 
        needs of local employers and participants.''; and
            (2) in paragraph (4), by striking ``and dislocated 
        worker''.

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

    (a) One-Stop Partners.--Section 121(b)(2)(B) (29 U.S.C. 
2841(b)(2)(B)) is amended--
            (1) in clause (iv) by striking ``; and'' and inserting 
        ``;'';
            (2) in clause (v) by striking the period; and
            (3) by adding at the end the following new clauses:
                            ``(vi) employment and training programs 
                        administered by the Social Security 
                        Administration, including the Ticket to Work 
                        program;
                            ``(vii) programs under part D of title IV 
                        of the Social Security Act (relating to child 
                        support enforcement); and
                            ``(viii) 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) by striking subsection (e) of section 121;
            (2) 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;
            (3) by amending subsection (e) (as moved and redesignated 
        by paragraph (3))--
                    (A) in paragraph (1)(A), by striking ``subsection 
                (d)(2)'' and inserting ``section 134(d)(2)'';
                    (B) in paragraph (1)(B)--
                            (i) by striking ``subsection (d)'' and 
                        inserting ``section 134(d)''; and
                            (ii) by striking ``subsection (d)(4)(G)'' 
                        and inserting ``section 134(d)(4)(G)'';
                    (C) in paragraph (1)(C), by striking ``subsection 
                (e)'' and inserting ``section 134(e)'';
                    (D) in paragraph (1)(D)--
                            (i) by striking ``section 121(b)'' and 
                        inserting ``subsection (b)''; and
                            (ii) by striking ``; and'' at the end and 
                        inserting ``;'';
                    (E) by amending paragraph (1)(E) to read as 
                follows:
                    ``(E) shall provide access to the information 
                described in section 302(e); and''; and
                    (F) by adding at the end the following:
                    ``(F) shall provide access to personal reemployment 
                accounts in accordance with section 135E.''.
    (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.
            ``(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.
            ``(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) for a fiscal year 
                shall be provided to the Governor by such programs to 
                carry out this subsection.
                    ``(B) Determination.--The portion of funds to be 
                provided under subparagraph (A) by each one-stop 
                partner shall be determined by the Governor, after 
                consultation with the State board.
            ``(2) Allocation by governor.--From the funds provided 
        under paragraph (1), the Governor shall allocate funds to local 
        areas 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) 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 (g);
                    ``(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 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 funding allocation 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(b)(4) to receive funds provided under section 
133(b) for the provision of such training services.
    ``(b) Criteria.--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, 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.
    ``(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), 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.--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.
    ``(e) Agreements With Other States.--States may enter into 
agreements, on a reciprocal basis, to permit eligible providers of 
training services to accept career scholarship 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.''.

SEC. 110. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

    Section 123 (29 U.S.C. 2843) and the item relating to such section 
in the table of contents are repealed.

SEC. 111. YOUTH ACTIVITIES.

    (a) State Allotments.--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.--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.
                    ``(B) Outlying areas and native americans.--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).
                    ``(C) States.--
                            ``(i) In general.--After determining the 
                        amounts to be reserved under subparagraphs (A) 
                        and (B), the Secretary shall allot the 
                        remainder of the amount appropriated under 
                        section 137(a) for each 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 and \1/3\ percent shall be 
                                allotted on the basis of the relative 
                                number of high school dropouts who are 
                                ages 16 through 21 in the State, 
                                compared to the total number of high 
                                school dropouts who are ages 16 through 
                                21 in all States;
                                    ``(II) 33 and \1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of jobless out-of-
                                school youth who are ages 16 through 21 
                                in the State, compared to the total 
                                number of jobless out-of-school youth 
                                who are ages 16 through 21 in all 
                                States; and
                                    ``(III) 33 and \1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of disadvantaged youth 
                                who are ages 16 through 21 in the 
                                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 2004 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 2003, 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 
                Workforce Investment Act Amendments of 2003) that is 
                received by the State involved for fiscal year 2003.
                    ``(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.
                    ``(C) Number of high school dropouts.--The term 
                `number of high school dropouts' means the number of 
                high school dropouts as is determined by the Secretary 
                based on the Current Population Survey.
                    ``(D) Number of jobless out-of-school youth.--The 
                term `number of jobless out-of-school youth' means the 
                number of jobless out-of-school youth as is determined 
                by the Secretary based on the Current Population 
                Survey.
            ``(3) Special rule.--For purposes of the formula specified 
        in paragraph (1)(C), the Secretary shall, as appropriate and to 
        the extent practicable, exclude college students and members of 
        the Armed Forces from the determination of the number of 
        disadvantaged youth.''.
    (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 allocation.--Paragraphs (1), (2), and (3) 
        of section 128(b) are amended to read as follows:
            ``(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) percent on the basis of the relative 
                        number of high school dropouts who are ages 16 
                        through 21 in each local area, compared to the 
                        total number of high school dropouts who are 
                        ages 16 through 21 in all local areas in the 
                        State;
                            ``(ii) 33 and \1/3\ percent on the basis of 
                        the relative number of jobless out-of-school 
                        youth who are ages 16 through 21 in each local 
                        area, compared to the total number of jobless 
                        out-of-school youth who are ages 16 through 21 
                        in all local areas in the State; and
                            ``(iii) 33 and \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 
                        2004 or a subsequent fiscal year, means a 
                        percentage of 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 2003, 
                        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 
                        Workforce Investment Act Amendments of 2003) 
                        that is received by the local area involved for 
                        fiscal year 2003.
                            ``(ii) Other terms.--For purposes of this 
                        paragraph, all other terms shall have the 
                        meaning given such terms in section 127(a)(2).
            ``(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) 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 21; 
                and
                    ``(B) one or more of the following:
                            ``(i) school dropouts;
                            ``(ii) recipients of a secondary school 
                        diploma or its equivalent, but are basic skills 
                        deficient and are not attending any school;
                            ``(iii) court-involved youth attending an 
                        alternative school; or
                            ``(iv) youth aging out of foster care.
            ``(2) Priority for school dropouts.--A priority in the 
        provision of services under this chapter shall be given to 
        individuals who are school dropouts.''.
    (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(d)(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 text that precedes 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 the following new clause 
                        (i):
                            ``(i) activities leading to the attainment 
                        of a secondary school diploma or its recognized 
                        equivalent;'';
                            (iii) in clause (ii) (as redesignated by 
                        this subparagraph), by inserting ``and advanced 
                        training'' after ``opportunities'';
                            (iv) in clause (iii) (as redesignated by 
                        this subparagraph), 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 or its recognized 
                equivalent''; and
                    (B) by amending subparagraph (C) to read as 
                follows:
                    ``(C) on-the-job training opportunities;''.
            (3) Additional requirements.--Section 129(c)(3) (29 U.S.C. 
        2854(c)(3)) is amended 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 PROGRAM FOR ADULTS.

    (a) Title of Chapter 5.-- The title of chapter 5 is amended 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 emergency grants under section 173;
                    ``(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.--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.
            ``(2) States.--
                    ``(A) In general.--After determining the amount to 
                be reserved under paragraph (1), the Secretary shall 
                allot the remainder of the amount referred to under 
                subsection (a)(2) for a fiscal year to the States 
                pursuant to subparagraph (B) for employment and 
                training activities for adults and statewide workforce 
                investment activities.
                    ``(B) Formula.--Subject to subparagraphs (C) and 
                (D), of the remainder--
                            ``(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) 15 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;
                            ``(iii) 15 percent 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; and
                            ``(iv) 10 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.
                    ``(C) 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 the State for the preceding fiscal year.
                    ``(D) Small state minimum allotment.--Subject to 
                subparagraph (C), 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).
                    ``(E) Definitions.--For the purposes of this 
                paragraph, the following definitions apply:
                            ``(i) Allotment percentage.--The term 
                        `allotment percentage', used with respect to 
                        fiscal year 2004 or a subsequent fiscal year, 
                        means a percentage of the remainder described 
                        in subparagraph (A) that is received through an 
                        allotment made under this paragraph for the 
                        fiscal year. The term, with respect to fiscal 
                        year 2003, 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 Workforce Investment Act Amendments of 
                        2003) and under section 6 of the Wagner-Peyser 
                        Act that is received by the State involved for 
                        fiscal year 2003.
                            ``(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 4.5 percent 
                        of the civilian labor force in the State.''.
    (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 40 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) 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) 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) 15 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;
                            ``(iii) 15 percent on the basis of the 
                        relative number of individuals in the civilian 
                        labor force in each local area, compared to the 
                        total number of individuals in the civilian 
                        labor force in all local areas in the State; 
                        and
                            ``(iv) 10 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 
                        States.
                    ``(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 2004 or a subsequent fiscal year, 
                        means a percentage of 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 2003, 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 Workforce Investment Act 
                        Amendments of 2003) that is received by the 
                        local area involved for fiscal year 2003.
                            ``(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) 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 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).''.
    (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)) is amended to read as follows:
            ``(1) In general.--Funds reserved by a Governor for a 
        State--
                    ``(A) under section 133(a) shall be used for 
                statewide rapid response activities described in 
                paragraph (2); and
                    ``(B) under section 133(a) and 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) is amended to read as follows:
            ``(2) Statewide rapid response activities.--A State shall 
        use funds reserved as described in section 133(a) to carry out 
        statewide rapid response activities, which 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) 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(d)(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 serving 
                individuals with disabilities consistent with section 
                188; and
                    ``(H) developing strategies for effectively serving 
                hard-to-serve populations and for integrating programs 
                and services among one-stop partners.''.
                    (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) 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)'';
                    (B) in paragraphs (1) and (2), by striking ``or 
                dislocated workers'' both places it appears; and
                    (C) by redesignating subsections (d) and (e) as 
                subsections (c) and (d), respectively.
            (3) Required local employment and training activities.--
                    (A) Allocated funds.--Section 134(c)(1) (as 
                redesignated by paragraph (2)) is amended to read as 
                follows:
            ``(1) 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--
                    ``(A) to establish a one-stop delivery system as 
                described in section 121(e);
                    ``(B) 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;
                    ``(C) to provide the intensive services described 
                in paragraph (3) to adults and dislocated workers, 
                respectively, described in such paragraph; and
                    ``(D) to provide training services described in 
                paragraph (4) to adults and dislocated workers, 
                respectively, described in such paragraph.''.
                    (B) Core services.--Section 134(c)(2) (as 
                redesignated by paragraph (2)) 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) in subparagraph (D), by inserting 
                        ``and appropriate recruitment services for 
                        employers'' after ``counseling'';
                            (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(b)(3) (as 
                redesignated by paragraph (2) 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 provided; 
                                        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.'';
                            (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, and financial literacy 
                        activities.
                            ``(ix) Out-of-area job search assistance 
                        and relocation assistance.''.
                    (D) Training services.--Section 134(b)(4) (as 
                redesignated by paragraph (2) 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) 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. 1077uu) and except'';
                            (iii) 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 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.'';
                            (iv) 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.''; and
                            (v) in subparagraph (G)(iv), by 
                        redesignating subclause (IV) as subclause (V) 
                        and inserting the following new subclause (IV):
                                    ``(IV) Individuals with 
                                disabilities.''.
            (4) Permissible activities.--Section 134(d) (as 
        redesignated by paragraph (2)) 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 on a fee-for-service basis;
                            ``(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; and
                            ``(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.
                    ``(B) Work support activities for low-wage 
                workers.--
                            ``(i) In general.--Funds allocated to a 
                        local area under section 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. PERSONAL REEMPLOYMENT ACCOUNTS.

    Subtitle B of title I (29 U.S.C. 2811 et seq.) is amended by 
inserting after chapter 5 the following new chapter:

              ``CHAPTER 5A--PERSONAL REEMPLOYMENT ACCOUNTS

``SEC. 135A. PURPOSES.

    ``The purposes of this chapter are to provide for the establishment 
of personal reemployment accounts for certain individuals identified as 
likely to exhaust their unemployment compensation in order to--
            ``(1) accelerate the reemployment of such individuals;
            ``(2) promote the retention in employment of such 
        individuals; and
            ``(3) provide such individuals with enhanced flexibility, 
        choice, and control in obtaining intensive reemployment, 
        training, and supportive services.

``SEC. 135B. DEFINITION.

    ``In this chapter, 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.

``SEC. 135C. GRANTS TO STATES.

    ``(a) Grants.--The Secretary shall--
            ``(1) reserve \2/10\ of 1 percent of the amount 
        appropriated under section 137(d) for use under section 135I; 
        and
            ``(2) use the remainder of the amount appropriated under 
        section 137(d) to make allotments in accordance with subsection 
        (b).
    ``(b) Allotment Among States.--
            ``(1) In general.--From the amount made available under 
        subsection (a)(2), the Secretary shall allot to each State an 
        amount that is proportionate to the relative number of 
        unemployed individuals in the State as compared to the total 
        number of unemployed individuals in all States in order to 
        provide assistance for eligible individuals in accordance with 
        this chapter.
            ``(2) Small state minimum allotment.--The Secretary shall 
        ensure that--
                    ``(A) each State (other than the United States 
                Virgin Islands) shall receive an allotment under 
                paragraph (1) that is not less than \3/10\ of 1 percent 
                of the amount made available under subsection (a)(2) 
                for the fiscal year; and
                    ``(B) the United States Virgin Islands shall 
                receive an allotment under paragraph (1) that is not 
                less than \1/10\ of 1 percent of the amount made 
                available under subsection (a)(2) for the fiscal year.
    ``(c) Availability.--Notwithstanding section 189(g)(1), amounts 
made available under subsection (a) to carry out this chapter shall be 
available for obligation and expenditure beginning on the date of the 
enactment of the Back to Work Incentive Act of 2003.

``SEC. 135D. WITHIN STATE ALLOCATION.

    ``(a) Allocation.--Of the amount allotted to a State under section 
135C--
            ``(1) not more than 2 percent of the amount may be reserved 
        by the Governor of the State to enhance the system of worker 
        profiling described in section 303(j) of the Social Security 
        Act and to establish and operate a data management system, as 
        necessary, and carry out other appropriate activities to 
        implement this chapter;
            ``(2) 5 percent of the amount shall be allocated by the 
        State to local areas in accordance with the formula described 
        in subsection (b) for start-up costs and other operating costs 
        related to the provision of assistance under this chapter; and
            ``(3) the remainder of the amount shall be provided to 
        local areas consistent with the methods and procedures 
        described in section 135G(a)(4) for the establishment of 
        personal reemployment accounts described in section 135E for 
        eligible individuals in such local areas.
    ``(b) Formula.--A State shall allocate funds to local areas in the 
State under subsection (a)(2) in an amount that is proportionate to the 
relative number of unemployed individuals in the local area as compared 
to the total number of unemployed individuals in the State.
    ``(c) Availability.--Notwithstanding section 189(g)(2), amounts 
allotted to a State under section 135C, and amounts subsequently 
provided to a local area under this section, shall be available for 
obligation and expenditure only for the 3-year period beginning on the 
date of the enactment of the Back to Work Incentive Act of 2003.

``SEC. 135E. PERSONAL REEMPLOYMENT ACCOUNTS.

    ``(a) Accounts.--
            ``(1) In general.--Funds provided to a local area under 
        section 135D shall be used to provide eligible individuals with 
        personal reemployment accounts to be used in accordance with 
        section 135F. An eligible individual may receive only one 
        personal reemployment account.
            ``(2) Amount.--The State shall establish the amount of a 
        personal reemployment account, which shall be uniform 
        throughout the State, and shall not exceed $3,000.
    ``(b) Eligible Individuals.--
            ``(1) In general.--Each State shall establish eligibility 
        criteria for individuals for personal reemployment accounts in 
        accordance with this subsection.
            ``(2) Eligibility criteria requirements.--
                    ``(A) In general.--Subject to subparagraph (B), an 
                individual shall be eligible to receive assistance 
                under this chapter if, beginning after the date of 
                enactment of the Back to Work Incentive Act of 2003, 
                the individual--
                            ``(i) is identified by the State pursuant 
                        to section 303(j)(1) of the Social Security Act 
                        as likely to exhaust regular unemployment 
                        compensation and in need of job search 
                        assistance to make a successful transition to 
                        new employment or an individual's unemployment 
                        can be attributed in substantial part to unfair 
                        competition from Federal Prison Industries, 
                        Inc.;
                            ``(ii) is receiving regular unemployment 
                        compensation under any State or Federal 
                        unemployment compensation program administered 
                        by the State; and
                            ``(iii) is eligible for not less than 20 
                        weeks of regular unemployment compensation 
                        described in clause (ii).
                    ``(B) Additional eligibility and priority 
                criteria.--A State may establish criteria that is in 
                addition to the criteria described in subparagraph (A) 
                for the eligibility of individuals to receive 
                assistance under this chapter. A State may also 
                establish criteria for priority in the provision of 
                assistance to such eligible individuals under this 
                chapter.
            ``(3) Transition rule.--
                    ``(A) Previously identified as likely to exhaust 
                unemployment compensation.--
                            ``(i) In general.--At the option of the 
                        State, and subject to clause (ii), an 
                        individual may be eligible to receive 
                        assistance under this chapter if the 
                        individual--
                                    ``(I) during the 13-week period 
                                ending the week prior to the date of 
                                the enactment of the Back to Work 
                                Incentive Act of 2003, was identified 
                                by the State pursuant to section 
                                303(j)(1) of the Social Security Act as 
                                likely to exhaust regular unemployment 
                                compensation and in need of job search 
                                assistance to make a successful 
                                transition to new employment; and
                                    ``(II) otherwise meets the 
                                requirements of clauses (ii) and (iii) 
                                of paragraph (2)(A).
                            ``(ii) Additional eligibility and priority 
                        criteria.--A State may establish criteria that 
                        is in addition to the criteria described in 
                        clause (i) for the eligibility of individuals 
                        to receive assistance under this chapter. A 
                        State may also establish criteria for priority 
                        in the provision of assistance to such eligible 
                        individuals under this chapter.
                    ``(B) Previously exhausted unemployment 
                compensation.--At the option of the State, an 
                individual may be eligible to receive assistance under 
                this chapter if the individual--
                            ``(i) during the 26-week period ending the 
                        week prior to the date of the enactment of the 
                        Back to Work Incentive Act of 2003, exhausted 
                        all rights to any unemployment compensation; 
                        and
                            ``(ii)(I) 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
                            ``(II) 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 two-year period ending on the date of the 
                        determination of eligibility of the individual 
                        under this subparagraph.
            ``(4) No individual entitlement.--Nothing in this chapter 
        shall be construed to entitle any individual to receive a 
        personal reemployment account.
    ``(c) Local Administration.--
            ``(1) Information and attestation.--Prior to the 
        establishment of a personal reemployment account for an 
        eligible individual under this chapter, the local board, 
        through the one-stop delivery system, shall ensure that the 
        individual--
                    ``(A) 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 under 
                section 135F(a)(3)(C) and a description of such 
                services, and the conditions for receiving a 
                reemployment bonus;
                    ``(B) 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
                    ``(C) signs an attestation that the individual has 
                been given the option to develop a personal 
                reemployment plan in accordance with subparagraph (B), 
                will comply with the requirements relating to the 
                personal reemployment accounts under this chapter, and 
                will reimburse the account or, if the account has been 
                terminated, the program under this chapter, for any 
                amounts expended from the account that are not 
                allowable.
            ``(2) 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.

``SEC. 135F. USE OF FUNDS.

    ``(a) Allowable Activities.--
            ``(1) In general.--Subject to the requirements contained in 
        paragraphs (2) and (3), a recipient may use amounts in a 
        personal reemployment account to purchase one or more of the 
        following:
                    ``(A) Intensive services, including those types of 
                services specified in section 134(d)(3)(C).
                    ``(B) Training services, including those types of 
                services specified in section 134(d)(4)(D).
                    ``(C) Supportive services, except for needs-related 
                payments.
                    ``(D) Assistance to purchase or lease an 
                automobile, if such assistance is necessary to allow 
                the recipient to accept a bona fide offer of employment 
                for which there is a reasonable expectation of long-
                term duration.
            ``(2) Delivery of services.--The following requirements 
        relating to delivery of services shall apply to the program 
        under this chapter:
                    ``(A) Recipients may use funds from the personal 
                reemployment account to purchase the services described 
                in paragraph (1) through the one-stop delivery system 
                on a fee-for-service basis, or through other providers, 
                consistent with safeguards described in the State and 
                local plans under section 135G.
                    ``(B) The local board, through the one-stop 
                delivery system, 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, consistent 
                with safeguards described in the State plan under 
                section 135G.
                    ``(C) Each local board, through the one-stop 
                delivery system, 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 paragraph (1), and 
                information relating to occupations in demand in the 
                local area.
            ``(3) Limitations.--The following limitations shall apply 
        with respect to personal reemployment accounts under this 
        chapter:
                    ``(A)(i) Amounts in a personal reemployment account 
                may be used for up to one year from the date of the 
                establishment of the account.
                    ``(ii) No personal reemployment account may be 
                established beginning 2 years after the date of the 
                enactment of the Back to Work Incentive Act of 2003.
                    ``(B) Each recipient shall submit cost 
                documentation as required by the one-stop delivery 
                system.
                    ``(C) 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 paragraph (2)(A).
                    ``(D) Amounts in a personal reemployment account 
                shall be nontransferable.
    ``(b) Income Support.--A State may authorize recipients determined 
eligible under section 135E(b)(3)(B) to withdraw amounts from the 
personal reemployment account on a weekly basis for purposes of income 
support in amounts up to the average weekly amount of unemployment 
compensation that the individual received prior to his or her 
exhaustion of rights to unemployment compensation if the individual is 
engaged in job search, intensive services, or training that is expected 
to lead to employment.
    ``(c) Reemployment Bonus.--
            ``(1) In general.--Subject to paragraph (2)--
                    ``(A) if a recipient determined eligible under 
                section 135E(b)(2) obtains full-time employment before 
                the end of 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
                    ``(B) if a recipient determined eligible under 
                section 135E(b)(3) 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.
            ``(2) Limitations.--The following limitations shall apply 
        with respect to a recipient described in paragraph (1):
                    ``(A) 60 percent of the remaining personal 
                reemployment account balance shall be paid to the 
                recipient at the time of reemployment.
                    ``(B) 40 percent of the remaining personal 
                reemployment account balance shall be paid to the 
                recipient after 26 weeks of employment retention.
            ``(3) Exception regarding subsequent unemployment.--If a 
        recipient described in paragraph (1) subsequently becomes 
        unemployed due to a lack of work after receiving the portion of 
        the reemployment bonus specified under paragraph (2)(A), the 
        individual may use the amount remaining in the personal 
        reemployment account for the purposes described in subsection 
        (a) but may not be eligible for additional cash payments under 
        this subsection.

``SEC. 135G. STATE AND LOCAL PLANS.

    ``(a) State Plan.--In order for a State to receive an allotment 
under section 135C, the Governor of the State shall submit to the 
Secretary a plan for approval that includes a description of how the 
State intends to carry out the personal reemployment accounts 
authorized under this chapter, including--
            ``(1) the criteria and methods to be used for determining 
        eligibility for the personal reemployment accounts, including 
        whether the State intends to include the optional categories 
        described in section 135E(b)(3), and the additional criteria 
        and priority for service that the State intends to apply, if 
        any, pursuant to section 135E(b)(2)(B);
            ``(2) the methods or procedures, developed in consultation 
        with local boards and chief elected officials, to be used to 
        provide eligible individuals information relating to services 
        and providers, and safeguards, developed in consultation with 
        such boards and officials, to ensure that funds from the 
        personal reemployment accounts are used for purposes authorized 
        under this chapter and to ensure the quality and integrity of 
        services and providers, consistent with the purpose of 
        providing such individuals with enhanced flexibility, choice, 
        and control in obtaining intensive reemployment, training, and 
        supportive services;
            ``(3) how the State will coordinate the activities carried 
        out under this chapter with the employment and training 
        activities carried out under section 134 and other activities 
        carried out by each local board through the one-stop delivery 
        system in the State; and
            ``(4) the methods and procedures for providing funds to 
        local areas under section 135D(a)(3).
    ``(b) Local Plan.--In order for a local area to receive an 
allocation under section 135D, the local board, in partnership with the 
chief elected official for the local area involved, shall submit to the 
Governor a plan for approval that includes a description of how the 
local board intends to carry out the personal reemployment accounts, 
consistent with the requirements of this chapter and with the State 
plan established under subsection (a), including--
            ``(1) a description of how the local board will coordinate 
        the activities carried out under this chapter with the 
        employment and training activities carried out in the local 
        area under section 134; and
            ``(2) a description of the methods or procedures to be used 
        to provide eligible individuals information relating to the 
        jobs that are available in the local area in high demand 
        occupations and information on services and providers, and the 
        safeguards the local area will initiate to ensure that funds 
        from the personal reemployment accounts are used for purposes 
        authorized under this chapter and to ensure the quality and 
        integrity of services and providers, consistent with the 
        purpose of providing such individuals with enhanced 
        flexibility, choice, and control in obtaining intensive 
        reemployment, training, and supportive services, and consistent 
        with the State plan.
    ``(c) State Plan Submission and Approval.--A State plan submitted 
to the Secretary under subsection (a) by a Governor shall be considered 
to be approved by the Secretary at the end of the 30-day period 
beginning on the date the Secretary receives the plan, unless the 
Secretary makes a written determination during such period that the 
plan is incomplete or otherwise inconsistent with the provisions of 
this chapter.

``SEC. 135H. PROGRAM INFORMATION.

    ``The Secretary may require from States the collection and 
reporting on such financial, performance, and other program-related 
information as the Secretary determines is appropriate to carry out 
this chapter, including the evaluation described in section 135I.

``SEC. 135I. EVALUATION.

    ``(a) Evaluation.--From the amount made available under section 
135C(a)(1), the Secretary, pursuant to the authority provided under 
section 172, shall, directly or through grants, contracts, or 
cooperative agreements with appropriate entities, conduct an evaluation 
of the activities carried out under this chapter.
    ``(b) Conduct of Evaluation.--The evaluation shall examine the 
effectiveness of such activities in achieving the purposes described in 
section 135A and such other purposes as the Secretary determines are 
appropriate.
    ``(c) 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 accounts as a mechanism to assist individuals in 
obtaining and retaining employment.''.

SEC. 114. 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) by amending subparagraph (A)(i)(IV) to read as 
                follows:
                                    ``(IV) the efficiency of the 
                                program in obtaining the outcomes 
                                described in subclauses (I) through 
                                (III).'';
                    (C) 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 diplomas or their recognized 
                                equivalents;
                                    ``(III) attainment of literacy or 
                                numeracy skills; and
                                    ``(IV) the efficiency of the 
                                program in obtaining the outcomes 
                                described in subclauses (I) through 
                                (III).'';
                    (D) by striking subparagraph (B); and
                    (E) by redesignating subparagraph (C) as 
                subparagraph (B).
            (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'';
                            (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 inserting ``such as 
                                unemployment rates and job losses or 
                                gains in particular industries'' after 
                                ``economic conditions''; and
                                    (II) by inserting ``such as 
                                indicators of poor work history, lack 
                                of work experience, low levels of 
                                literacy or English proficiency, 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, 
        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; and
            (2) in paragraph (1)(E), by striking ``(excluding 
        participants who received only self-service and informational 
        activities)''.
    (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) Repeal of Definitions.--Sections 502 and 503 are repealed.

SEC. 115. AUTHORIZATION OF APPROPRIATIONS.

    (a) Youth Activities.-- Section 137(a) is amended by striking 
``such sums as may be necessary for each of fiscal years 1999 through 
2003'' and inserting ``$1,001,000,000 for fiscal year 2004 and such 
sums as may be necessary for each of fiscal years 2005 through 2009''.
    (b) Adult Employment and Training Activities.--Section 137(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 ``132(a), 
$3,079,800,000 for fiscal year 2004 and such sums as may be necessary 
for each of fiscal years 2005 through 2009''.
    (c) Dislocated Worker Employment and Training Activities.--Section 
137 is further amended by striking subsection (c), and adding the 
following new subsection:
    ``(c) Personal Reemployment Accounts.--Out of any money in the 
Treasury of the United States not otherwise appropriated, there are 
appropriated $3,600,000 for fiscal year 2003 to carry out chapter 
5A.''.

SEC. 116. JOB CORPS.

    (a) Community Participation.-- Section 153 (29 U.S.C. 2983) is 
amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Business and Community Participation.--The director of each 
Job Corps center shall ensure the establishment and development of the 
business and community relationships and networks described in 
subsection (b) in order to enhance the effectiveness of such center.'';
            (2) in subsection (b)--
                    (A) in the heading, by striking 
                ``Responsibilities'' and inserting ``Networks''; and
                    (B) by striking ``The responsibilities of the 
                Liaison'' and inserting ``The activities carried out by 
                each Job Corps center under this section''; and
            (3) in subsection (c), by striking ``The Liaison for'' and 
        inserting ``The director of''.
    (b) Industry Councils.--Section 154(b) (29 U.S.C. 2894) is 
amended--
            (1) in paragraph (1)(A), by striking ``local and distant''; 
        and
            (2) by adding the following new paragraph (3):
            ``(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.''.
    (c) Indicators of Performance and Additional Information.--Section 
159(c) (29 U.S.C. 2983(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'' in each 
        place it appears and inserting ``indicators''.

SEC. 117. NATIVE AMERICAN PROGRAMS.

    (a) Authorized Activities.--Section 166(d)(2) (29 U.S.C. 
2911(d)(2)) is amended to read as follows:
            ``(2) Workforce investment activities and supplemental 
        services.--Funds made available under subsection (c) shall be 
        used for--
                    ``(A) comprehensive workforce investment activities 
                for Indians or Native Hawaiians; or
                    ``(B) supplemental services for Indian or Native 
                Hawaiian youth on or near Indian reservations and in 
                Oklahoma, Alaska, or Hawaii.''.
    (b) 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.''.
    (c) Assistance to American Samoans in Hawaii.--Section 166(j) (29 
U.S.C. 2911(j)) is repealed.

SEC. 118. YOUTH CHALLENGE GRANTS.

    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 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 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 conduct 
        evaluations of the projects funded under this subsection.
    ``(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''.

SEC. 119. 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
            (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,'' 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 Workforce 
                Investment Act Amendments of 2003''.

SEC. 120. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH AND MULTISTATE 
              PROJECTS.

    (a) Demonstration and Pilot Projects.--Section 171(b) (29 U.S.C. 
2916(b)(1)) 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;
                    ``(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; and
                    (E) by striking subparagraph (H); 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) 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 the public reports containing the 
                results of such studies.''.
    (c) Waiver Authority To Carry Out Demonstrations and Evaluations.--
Section 171 (29 U.S.C. 2916(d)) is further amended by striking 
subsection (d).

SEC. 121. EVALUATIONS.

    (a) In General.--Section 173 (29 U.S.C. 2916) is amended--
            (1) by amending the heading to read as follows: ``NATIONAL 
        DISLOCATED WORKER GRANTS'';
            (2) in subsection (a)--
                    (A) by striking ``national emergency grants'' and 
                inserting ``national dislocated worker grants'';
                    (B) in paragraph (1), by striking ``subsection 
                (c)'' and inserting ``subsection (b)''; and
                    (C) in paragraph (4), by striking the matter that 
                precedes subparagraph (A).
    (b) Administration.--Section 173 (29 U.S.C. 2916) 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 subsections (d) and (e), 
        respectively.
    (c) Eligible Entities.--Section 173(b)(1)(B) (as redesignated by 
subsection (b) of this section) is amended by striking ``, and other 
entities'' and all that follows up to the period.

SEC. 122. AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL ACTIVITIES.

    (a) In General.--Section 174(a)(1) is amended by striking ``1999 
through 2003'' and inserting ``2004 through 2009''.
    (b) Reservations.--Section 174(b) is amended to read as follows:
    ``(b) Technical Assistance; Demonstration and Pilot Projects; 
Evaluations; Incentive Grants.--There are authorized to be appropriated 
to carry out sections 170 through 172 and section 136 such sums as may 
be necessary for each of fiscal years 2004 through 2009.''.

SEC. 123. REQUIREMENTS AND RESTRICTIONS.

    (a) In General.--Section 181(c)(2)(A) is amended by striking 
``shall'' and inserting ``may''.
    (b) Limitations.--Section 181(e) is amended by striking the first 
sentence.

SEC. 124. NONDISCRIMINATION.

    Section 188(a)(2) is amended--
            (1) by striking ``No'' and inserting ``(A) in general.--
        Except as provided in subparagraph (B), no''; and
            (2) by adding the following subparagraph:
            ``(B) Exemption for religious organizations.--Subparagraph 
        (A) shall not apply to recipients 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. 125. ADMINISTRATIVE PROVISIONS.

    (a) Program Year.--Section 189(g)(1) (29 U.S.C. 2939(g)(1)) is 
amended--
            (1) by striking ``(A) program year.--Except'' and inserting 
        ``Except''; and
            (2) by striking subparagraph (B)
    (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), by inserting ``, or in accordance 
        with subparagraph (D),'' after ``subparagraph (B)'';
            (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.''.

                       TITLE II--ADULT EDUCATION

SEC. 201. TABLE OF CONTENTS.

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

                ``TITLE II--ADULT BASIC SKILLS 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.
                     ``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 leadership activities.''.

SEC. 202. AMENDMENT.

    Title II is amended to read as follows:

                ``TITLE II--ADULT BASIC SKILLS EDUCATION

``SEC. 201. SHORT TITLE.

    ``This title may be cited as the `Adult Basic Skills Education 
Act'.

``SEC. 202. PURPOSE.

    ``It is the purpose of this title to provide instructional 
opportunities for adults seeking to improve their basic reading, 
writing, speaking, and math skills, and support States and local 
communities in providing, on a voluntary basis, adult basic skills and 
literacy education, in order to--
            ``(1) increase the basic reading, writing, speaking, and 
        math skills 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 
        postsecondary education;
            ``(3) increase the basic reading, writing, speaking, and 
        math skills of parents to enable them to support the 
        educational development of their children and make informed 
        choices regarding their children's education; 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.--The term `adult education' 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 
        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 or its recognized equivalent, and have 
                        not achieved an equivalent level of education; 
                        or
                            ``(iii) are unable to read, write, or speak 
                        the English language.
            ``(2) Adult education and basic skills activities.--The 
        term `adult education and basic skills activities' means 
        activities described in section 231(b).
            ``(3) Eligible agency.--The term `eligible agency'--
                    ``(A) means the sole entity or agency in a State or 
                an outlying area responsible for administering or 
                supervising policy for adult education and basic skills 
                activities 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.
            ``(4) 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 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 basic education and basic skills 
                activities to adults and families; or
                    ``(I) a consortium of the agencies, organizations, 
                institutions, libraries, or authorities described in 
                any of subparagraphs (A) through (H).
            ``(5) 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.
            ``(6) 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 (20 U.S.C. 6368).
            ``(7) Family literacy programs.--The term `family literacy 
        programs' means educational programs that--
                    ``(A) assist parents and students, on a voluntary 
                basis, in achieving the purposes of this title as 
                described in section 202; and
                    ``(B) are of sufficient intensity in terms of 
                hours, of sufficient duration, and based upon 
                scientific research-based principles, so as to 
                substantially increase the ability of both parents and 
                children to read, write, and speak English and perform 
                mathematical computations.
            ``(8) Governor.--The term `Governor' means the chief 
        executive officer of a State or outlying area.
            ``(9) Individual with a disability.--
                    ``(A) In general.--The term `individual with a 
                disability' means an individual with any disability (as 
                defined in section 3 of the Americans with Disabilities 
                Act of 1990 (42 U.S.C. 12102)).
                    ``(B) Individuals with disabilities.--The term 
                `individuals with disabilities' means more than one 
                individual with a disability.
            ``(10) 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.
            ``(11) 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 (20 
        U.S.C. 1001).
            ``(12) Literacy.--The term `literacy' means the ability to 
        read and write the English language with competence, knowledge, 
        and comprehension.
            ``(13) 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 (20 U.S.C. 7801).
            ``(14) Outlying area.--The term `outlying area' has the 
        meaning given to that term in section 101 of this Act.
            ``(15) Postsecondary educational institution.--The term 
        `postsecondary educational institution' means--
                    ``(A) an institution of higher education that 
                provides not less than a 2-year program of instruction 
                that is acceptable for credit toward a bachelor's 
                degree;
                    ``(B) a tribally controlled community college; or
                    ``(C) a nonprofit educational institution offering 
                certificate or apprenticeship programs at the 
                postsecondary level.
            ``(16) Reading.--The term `reading' has the meaning given 
        to that term in section 1208 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6368).
            ``(17) Scientifically based reading research.--The term 
        `scientifically based reading research' has the meaning given 
        to that term in section 1208 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6368).
            ``(18) Secretary.--The term `Secretary' means the Secretary 
        of Education.
            ``(19) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
            ``(20) 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 U.S.C. 7801).
            ``(21) Workplace literacy program.--The term `workplace 
        literacy program' means an educational program that is offered 
        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, 
or to compel a parent engaged in home schooling to participate in an 
English literacy program, family literacy services, or adult education.

``SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this title 
$584,300,000 for fiscal year 2004 and such sums as may be necessary for 
fiscal years 2005 through 2009.

                    ``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 make available, to the Secretary of Labor, 1.72 
        percent for incentive grants under section 503; and
            ``(2) shall reserve up to 1.55 percent to carry out section 
        242.
    ``(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 or its 
        recognized equivalent; and
            ``(4) is not enrolled in secondary school.
    ``(e) Special Rule.--
            ``(1) In general.--From amounts made available under 
        subsection (c) for the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of Palau, the 
        Secretary shall award grants to Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, the Republic of 
        the Marshall Islands, the Federated States of Micronesia, or 
        the Republic of Palau to carry out activities described in this 
        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 the Marshall Islands, 
        the Federated States of Micronesia, and 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 each of 
        the Freely Associated States 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), for 
        fiscal year 2004 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) 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 and basic skills activities funded under this title, in order 
to optimize the return on investment of Federal funds in adult 
education and basic skills activities.
    ``(b) Eligible Agency Performance Measures.--
            ``(1) In general.--For each eligible agency, the eligible 
        agency performance measures shall consist of--
                    ``(A)(i) the core indicators of performance 
                described in paragraph (2)(A); and
                    ``(ii) 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 basic 
                        skill levels in reading, writing, and speaking 
                        the English language and math, and English 
                        language acquisition leading to proficiency in 
                        each skill.
                            ``(ii) Receipt of a secondary school 
                        diploma or its recognized equivalent.
                            ``(iii) Placement in postsecondary 
                        education.
                    ``(B) Employment performance indicators.--An 
                eligible agency shall identify in the State plan the 
                following individual participant employment performance 
                indicators--
                            ``(i) entry into employment;
                            ``(ii) retention in employment; and
                            ``(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 and basic 
                        skills activities 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 its 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 and basic skills activities 
                        authorized under this title, the Secretary and 
                        each eligible agency shall reach agreement on 
                        levels of student proficiency 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 proficiency measures 
                                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 
                        performance for each of the core indicators of 
                        student proficiency 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, eligible 
        providers, and the general public within the State, 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 and other appropriate methods;
                    ``(B) shall disseminate State-by-State comparisons 
                of the information; and
                    ``(C) shall provide the appropriate committees of 
                Congress with copies of such reports.

                     ``CHAPTER 2--STATE PROVISIONS

``SEC. 221. STATE ADMINISTRATION.

    ``Each eligible agency shall be responsible for the 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.
            ``(4) Assisting eligible providers in providing 
        sufficiently rigorous instructional practices for continuous 
        and significant improvement and in implementing and reporting 
        measurable progress in achieving the objectives of this title.

``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 $65,000, whichever is greater, for the administrative 
        expenses of the eligible agency.
    ``(b) Matching Requirement.--
            ``(1) In general.--In order to receive a grant from the 
        Secretary under section 211(b), each eligible agency shall 
        provide, for the costs to be incurred by the eligible agency in 
        carrying out the adult education and basic skills activities 
        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 and literacy activities in 
                the outlying area, except that the Secretary may 
                decrease the amount of funds required under this 
                subparagraph for an eligible agency; and
                    ``(B) in the case of an eligible agency serving a 
                State, 25 percent of the total amount of funds expended 
                for adult education and basic skills activities in the 
                State.
            ``(2) Non-federal contribution.--An eligible agency's non-
        Federal contribution required under paragraph (1) may be 
        provided in cash or in kind, fairly evaluated, and shall 
        include only non-Federal funds that are used for adult 
        education and basic skills activities 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 and basic skills activities:
            ``(1) The establishment or operation of professional 
        development programs to improve the quality of instruction 
        provided pursuant to local activities required under section 
        231(b), including instruction incorporating 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 and basic skills activities for 
        development and dissemination of scientific research-based 
        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 and 
        basic skills activities, 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 and basic skills activities, 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) Other activities of statewide significance, 
        including assisting eligible agencies in achieving progress in 
        improving the skill levels of adults who participate in 
        programs under this title.
    ``(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 and basic 
        skills activities, including individuals most in need or 
        hardest to serve;
            ``(2) a description of the adult education and basic skills 
        activities 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 and basic skills activities 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 and basic skills 
        activities 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 
                and basic skills activities; and
                    ``(B) attempts to coordinate with support services 
                that are not provided under this title prior to using 
                funds for adult education and basic skills activities 
                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 basic education and literacy 
                levels, and direct providers of adult basic skills 
                education programs; and
                    ``(B) may include consultation with the State 
                agency on higher education, institutions responsible 
                for professional development of adult basic education 
                and reading 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 and basic 
        skills activities 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 basic and literacy education; and
                    ``(B) how the State will increase the participation 
                of business and industry in adult basic and literacy 
                education; and
            ``(13) 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 to the State plan to the Secretary.
    ``(d) Consultation.--The eligible agency shall--
            ``(1) submit the State plan, and any revisions to the State 
        plan, to the Governor of the State or outlying area for review 
        and comment; and
            ``(2) ensure that any comments 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.
    ``(f) Transition.--The provisions of this section shall be subject 
to section 506(b).

``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) Definition of Criminal Offender.--
            ``(1) Criminal offender.--The term `criminal offender' 
        means any individual who is charged with, or convicted of, any 
        criminal offense.
            ``(2) Correctional institution.--The term `correctional 
        institution' means any--
                    ``(A) prison;
                    ``(B) jail;
                    ``(C) reformatory;
                    ``(D) work farm;
                    ``(E) detention center; or
                    ``(F) halfway house, community-based rehabilitation 
                center, or any other similar institution designed for 
                the confinement or rehabilitation of criminal 
                offenders.

                     ``CHAPTER 3--LOCAL PROVISIONS

``SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

    ``(a) Grants and Contracts.--From grant funds made available under 
section 211(b), each eligible agency shall award multiyear grants or 
contracts, on a competitive basis, to eligible providers within the 
State or outlying area that meet the conditions and requirements of 
this title to enable the eligible providers to develop, implement, and 
improve adult education and basic skills activities 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 basic skills education and literacy programs, 
        including essential workplace skills (including proficiency in 
        reading, writing, speaking, and math).
            ``(2) Workplace literacy programs.
            ``(3) English language acquisition programs.
            ``(4) Family literacy 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 
        meeting or 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) whether or not 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) whether educational practices are based on 
        scientifically based research;
            ``(6) whether the activities of the eligible provider 
        effectively employ advances in technology, as appropriate, 
        including the use of computers;
            ``(7) whether the activities provide instruction in real-
        life contexts, to ensure that an individual has the skills 
        needed to compete in the workplace and exercise the rights and 
        responsibilities of citizenship;
            ``(8) whether the activities are staffed by well-trained 
        instructors, counselors, and administrators;
            ``(9) whether the activities 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) whether the activities offer flexible schedules and 
        support services (such as child care and transportation) that 
        are necessary to enable individuals, including individuals with 
        disabilities or other special needs, to attend and complete 
        programs;
            ``(11) whether the activities 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) whether 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; and
            ``(14) whether there is a sequence of rigorous courses in 
        reading, writing, speaking, and math, instructional practices 
        based on scientific research, applications of technology, and 
        services to be provided by the eligible provider, of sufficient 
        intensity and duration to increase the amount and quality of 
        learning and lead to measurable learning gains within specified 
        time periods.

``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 and basic 
        skills activities; 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 and basic skills activities; 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 and basic skills activities under this title shall supplement 
and not supplant other State or local public funds expended for adult 
education and basic skills activities.
    ``(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 and basic skills activities, in the third 
                preceding fiscal year.
                    ``(B) Proportionate reduction.--Subject to 
                paragraphs (2), (3), and (4), for any fiscal year with 
                respect to which the Secretary determines under 
                subparagraph (A) that the fiscal effort or the 
                aggregate expenditures of an eligible agency for the 
                preceding program year were less than such effort or 
                expenditures for the second preceding program year, the 
                Secretary--
                            ``(i) shall determine the percentage 
                        decreases in such effort or in such 
                        expenditures; and
                            ``(ii) shall decrease the payment made 
                        under this title for such program year to the 
                        agency for adult education and basic skills 
                        activities by the lesser of such percentages.
            ``(2) Computation.--In computing the fiscal effort and 
        aggregate expenditures under paragraph (1), the Secretary shall 
        exclude capital expenditures and special one-time project 
        costs.
            ``(3) Decrease in federal support.--If the amount made 
        available for adult education and basic skills activities under 
        this title for a fiscal year is less than the amount made 
        available for adult education and basic skills activities 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 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) 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 basic and literacy education 
                programs;
                    ``(C) on adult education professional development; 
                and
                    ``(D) in using distance learning and improving the 
                application of technology in the classroom.
            ``(2) Providing for the conduct of research on basic skills 
        acquisition among adults, including the number of 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 basic and 
        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 basic and literacy education programs.
            ``(6) Identifying model integrated basic and workplace 
        skills education programs, coordinated literacy and employment 
        services, and effective strategies for serving adults with 
        disabilities.
            ``(7) Initiating other activities designed to improve the 
        measurable quality and effectiveness of adult education and 
        literacy programs nationwide.''.

            TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW

SEC. 301. REPEAL OF WAGNER-PEYSER PROVISIONS.

    Sections 1 through 13 of the Wagner-Peyser Act (29 U.S.C. 49 et. 
seq.) are repealed.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

SEC. 401. 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. 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 of the United States by and 
        with the advice and consent of the Senate'' and inserting 
        ``Secretary''; and
            (3) by striking ``, and the Commissioner shall be the 
        principal officer,''.

SEC. 403. DIRECTOR.

    The Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) is amended 
by striking ``Commissioner'' each place it appears and inserting 
``Director''.

SEC. 404. STATE GOALS.

    Section 101(a)(29 U.S.C. 721(a)) is amended--
            (1) in paragraph (11)(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) in paragraph (15)--
                    (A) in subparagraph (A), by redesignating clauses 
                (ii) and (iii) as clauses (iii) and (iv), respectively, 
                and inserting the following new clause:
                            ``(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
                    (B) by amending subparagraph (D)(i) to read as 
                follows:
                            ``(i) the methods to be used to expand and 
                        improve the services to individuals with 
                        disabilities including--
                                    ``(I) how a broad range of 
                                assistive technology services and 
                                assistive technology devices will be 
                                provided to such individuals at each 
                                stage of the rehabilitative process and 
                                how such services and devices will be 
                                provided to such individuals on a 
                                statewide basis; and
                                    ``(II) how transition services will 
                                be better coordinated with those 
                                services under the Individuals with 
                                Disabilities Education Act in order to 
                                improve transition services for 
                                individuals with disabilities served 
                                under this Act;''.

SEC. 405. 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 2004 through 
        2009'';
            (2) in section 100(d)(B) by striking ``fiscal year 2003'' 
        and inserting ``fiscal year 2009'';
            (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 2009.'';
            (4) in section 112(h) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (5) in section 201 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009'' each 
        place it appears;
            (6) in section 302(i) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (7) in section 303(e) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (8) in section 304(b) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (9) in section 305(b) by striking ``fiscal years 1999 
        through 2003'' and insert ``fiscal years 2004 through 2009'';
            (10) in section 405 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009'';
            (11) in section 502(j) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (12) in section 509(l) by striking ``fiscal years 1999 
        through 2003'' and inserting ``fiscal years 2004 through 
        2009'';
            (13) in section 612 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009'';
            (14) in section 628 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009'';
            (15) in section 714 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009'';
            (16) in section 727 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009''; and
            (17) in section 753 by striking ``fiscal years 1999 through 
        2003'' and inserting ``fiscal years 2004 through 2009''.

                 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.
                                 <all>