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

                                                  Union Calendar No. 46
108th CONGRESS
  1st Session
                                H. R. 1261

                          [Report No. 108-82]

      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

                              May 1, 2003

Additional sponsors: Mr. Ballenger, Mr. Cole, Mr. Tiberi, Mr. Isakson, 
                     Mr. Norwood, and Mr. Bereuter

                              May 1, 2003

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                               13, 2003]

_______________________________________________________________________

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

                       Title II--ADULT EDUCATION

        Part A--Adult Basic Skills and Family Literacy Education

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

                Part B--National Institute for Literacy

Sec. 211. Short title; purpose.
Sec. 212. Establishment.
Sec. 213. Administration.
Sec. 214. Duties.
Sec. 215. Leadership in scientifically based reading instruction.
Sec. 216. National Institute for Literacy Advisory Board.
Sec. 217. Gifts, bequests, and devises.
Sec. 218. Mails.
Sec. 219. Applicability of certain civil service laws.
Sec. 220. Experts and consultants.
Sec. 221. Report.
Sec. 222. Definitions.
Sec. 223. Authorization of appropriations.
Sec. 224. Reservation.
Sec. 225. Authority to publish.

             Title III--AMENDMENTS TO THE WAGNER-PEYSER ACT

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

         Title IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

Sec. 401. Chairperson.
Sec. 402. Rehabilitation Services Administration.
Sec. 403. Director.
Sec. 404. State goals.
Sec. 405. Authorizations of appropriations.
Sec. 406. Helen Keller National Center Act.

                 Title V--TRANSITION AND EFFECTIVE DATE

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

SEC. 3. REFERENCES.

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

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

SEC. 101. DEFINITIONS.

    Section 101 (29 U.S.C. 2801) is amended--
            (1) in paragraph (8)(C), by striking ``not less than 50 
        percent of the cost of the training'' and inserting ``a 
        significant portion of the cost of training, as determined by 
        the local board'';
            (2) by striking paragraph (13) and redesignating paragraphs 
        (1) through (12) as paragraphs (2) through (13) respectively;
            (3) by inserting the following new paragraph after ``In 
        this title:'':
            ``(1) Accrued expenditures.--The term `accrued 
        expenditures' includes the sum of actual cash disbursements for 
        direct charges for goods and services, the net increase or 
        decrease in the amounts owed by recipients, goods and other 
        property received for services performed by employees, 
        contractors, subgrantees, or other payees, and other amounts 
        becoming owned for which no current service or performance is 
        required.'';
            (4) by striking paragraph (24) and redesignating paragraphs 
        (25) through (32) as paragraphs (24) through (31), 
        respectively;
            (5) in paragraph (24) (as so redesignated)--
                    (A) in subparagraph (B), by striking ``higher of--
                '' and all that follows through such subparagraph and 
                inserting ``poverty line for an equivalent period;''; 
                and
                    (B) by redesignating subparagraphs (D) through (F) 
                as subparagraph (E) through (G), respectively, and 
                inserting after subparagraph (C) the following:
                    ``(D) receives or is eligible to receive free or 
                reduced price lunch;''; and
            (6) by striking paragraph (33) and redesignating paragraphs 
        (34) through (53) as paragraphs (32) through (51), 
        respectively.

SEC. 102. PURPOSE.

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

SEC. 103. STATE WORKFORCE INVESTMENT BOARDS.

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

SEC. 104. STATE PLAN.

    (a) Planning Cycle.--Section 112(a) (29 U.S.C. 2822(a)) is amended 
by striking ``5-year strategy'' and inserting ``2-year strategy''.
    (b) Contents.--Section 112(b)(17)(A) (29 U.S.C. 2822(b)(17)(A)) is 
amended--
            (1) in clause (iii) by striking ``and'';
            (2) by amending clause (iv) to read as follows:
                            ``(iv) how the State will serve the 
                        employment and training needs of dislocated 
                        workers (including displaced homemakers and 
                        formerly self-employed and transitioning 
                        farmers, ranchers, and fisherman) low income 
                        individuals (including recipients of public 
                        assistance), homeless individuals, ex-
                        offenders, individuals training for 
                        nontraditional employment, and other 
                        individuals with multiple barriers to 
                        employment (including older individuals);''; 
                        and
            (3) by adding the following new clause after clause (iv):
                            ``(v) how the State will serve the 
                        employment and training needs of individuals 
                        with disabilities, 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), 
                the Governor shall approve a request for designation as 
                a local area from--
                            ``(i) any unit of general local government 
                        with a population of 500,000 or more; and
                            ``(ii) an area served by a rural 
                        concentrated employment program grant recipient 
                        that served as a service delivery area or 
                        substate area under the Job training 
                        Partnership Act (29 U.S.C. 1501 et seq.),
                for the 2-year period covered by a State plan under 
                section 112 if such request is made not later than the 
                date of the submission of the State plan.
                    ``(B) Continued designation based on performance.--
                The Governor may deny a request for designation 
                submitted pursuant to subparagraph (A) if such unit of 
                government was designated as a local area for the 
                preceding 2-year period covered by a State plan and the 
                Governor determines that such local area did not 
                perform successfully during such period.''.
    (b) Regional Planning.--Section 116(c)(1) (29 U.S.C. 2831(c)(1)) is 
amended by adding at the end the following: ``The State may require the 
local boards for the designated region to prepare a single regional 
plan that incorporates the elements of the local plan under section 118 
and that is submitted and approved in lieu of separate local plans 
under such section.''.

SEC. 106. LOCAL WORKFORCE INVESTMENT BOARDS.

    (a) Composition.--Section 117(b)(2)(A) (29 U.S.C. 2832(b)(2)(A)) is 
amended--
            (1) in clause (i)(II), by inserting ``, businesses that are 
        in the leading industries in the local area, and large and 
        small businesses in the local area'' after ``local area'';
            (2) by amending clause (ii) to read as follows:
                            ``(ii) superintendents of the local 
                        secondary school systems and the presidents or 
                        chief executive officers of postsecondary 
                        educational institutions (including community 
                        colleges, where such entities exist);'';
            (3) in clause (iv), by striking the semicolon and inserting 
        ``and faith-based organizations; and''; and
            (4) by striking clause (vi).
    (b) Authority of Board Members.--Section 117(b)(3) (29 U.S.C. 
2832(b) is amended--
            (1) in the heading, by inserting ``and representation'' 
        after ``members''; and
            (2) by adding at the end the following: ``The members of 
        the board shall represent diverse geographic sections within 
        the local area.''.
    (c) Functions.--Section 117(d) (29 U.S.C. 2832(d)) is amended--
            (1) in paragraph (2)(B), by striking ``local area'' and all 
        that follows and inserting ``local area.''; and
            (2) in paragraph (4) by inserting ``and ensure the 
        appropriate use and management of the funds provided under this 
        title for such programs, activities, and system'' after 
        ``area''.
    (d) Authority to Establish Councils and Elimination of Requirement 
for Youth Councils.--Section 117(h) (29 U.S.C. 2832(h)) is amended to 
read as follows:
    ``(h) Establishment of Councils.--The local board may establish 
councils to provide information and advice to assist the local board in 
carrying out activities under this title. Such councils may include a 
council composed of one-stop partners to advise the local board on the 
operation of the one-stop delivery system, a youth council composed of 
experts and stakeholders in youth programs to advise the local board on 
activities for youth, and such other councils as the local board 
determines are appropriate.''.
    (e) Repeal of Alternative Entity Provision.--Section 117 (29 U.S.C. 
2832) is further amended by striking subsection (i).

SEC. 107. LOCAL PLAN.

    (a) Planning Cycle.--Section 118(a) (29 U.S.C. 2833(a)) is amended 
by striking ``5-year'' and inserting ``2-year''.
    (b) Contents.--Section 118(b) (29 U.S.C. 2833(b)) is amended--
            (1) by amending paragraph (2) to read as follows:
            ``(2) a description of the one-stop delivery system to be 
        established or designated in the local area, including a 
        description of how the local board will ensure the continuous 
        improvement of eligible providers of services through the 
        system and ensure that such providers 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'' at the end;
            (2) in clause (v) by striking the period and inserting a 
        semicolon; 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 (established by Public Law 106-170);
                            ``(vii) programs under part D of title IV 
                        of the Social Security Act (42 U.S.C. 451 et 
                        seq.) (relating to child support enforcement); 
                        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; and
            (3) by amending subsection (e) (as moved and redesignated 
        by paragraph (2))--
                    (A) in paragraph (1)(A), by striking ``subsection 
                (d)(2)'' and inserting ``section 134(c)(2)'';
                    (B) in paragraph (1)(B)--
                            (i) by striking ``subsection (d)'' and 
                        inserting ``section 134(c)''; and
                            (ii) by striking ``subsection (d)(4)(G)'' 
                        and inserting ``section 134(c)(4)(G)'';
                    (C) in paragraph (1)(C), by striking ``subsection 
                (e)'' and inserting ``section 134(d)'';
                    (D) in paragraph (1)(D)--
                            (i) by striking ``section 121(b)'' and 
                        inserting ``subsection (b)''; and
                            (ii) by striking ``and'' at the end; and
                    (E) by amending paragraph (1)(E) to read as 
                follows:
                    ``(E) shall provide access to the information 
                described in section 15(e) of the Wagner-Peyser Act (29 
                U.S.C. 49l-2(e)).''.
    (c) Certification and Funding of One-Stop Centers.--Section 121 (as 
amended by subsection (b)) is further amended by adding at the end the 
following new subsections:
    ``(g) Certification of One-Stop Centers.--
            ``(1) In general.--The State board shall establish 
        procedures and criteria for periodically certifying one-stop 
        center for the purpose of awarding the one-stop infrastructure 
        funding described in subsection (h).
            ``(2) Criteria.--The criteria for certification under this 
        subsection shall include minimum standards relating to the 
        scope and degree of service integration achieved by the centers 
        involving the programs provided by the one-stop partners.
            ``(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 (h);
                    ``(B) common costs that are in addition to the 
                costs of infrastructure; and
                    ``(C) the costs of the provision of core services 
                applicable to each program.
            ``(2) Determination and guidance.--The method for 
        determining the appropriate portion of funds 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(c)(4) to receive funds provided under section 
133(b) for the provision of such training services.
    ``(b) Criteria.--
            ``(1) In general.--The criteria established pursuant to 
        subsection (a) shall take into account the performance of 
        providers of training services with respect to the indicators 
        described in section 136 or other appropriate indicators 
        (taking into consideration the characteristics of the 
        population served and relevant economic conditions), and such 
        other factors as the Governor determines are appropriate to 
        ensure the quality of services, the accountability of 
        providers, and the informed choice of participants under 
        chapter 5. Such criteria shall require that the provider submit 
        appropriate, accurate and timely information to the State for 
        purposes of carrying out subsection (d). The criteria shall 
        also provide for periodic review and renewal of eligibility 
        under this section for providers of training services. The 
        Governor may authorize local areas in the State to establish 
        additional criteria or to modify the criteria established by 
        the Governor under this section for purposes of determining the 
        eligibility of providers of training services to provide such 
        services in the local area.
            ``(2) Limitation.--In carrying out the requirements of this 
        subsection, no personally identifiable information regarding a 
        student, including Social Security number, student 
        identification number, or other identifier, may be disclosed 
        without the prior written consent of the parent or eligible 
        student in compliance with section 444 of the General Education 
        Provisions Act (20 U.S.C. 1232g).
    ``(c) Procedures.--The procedures established under subsection (a) 
shall identify the application process for a provider of training 
services to become eligible to receive funds under section 133(b), 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 individual training accounts provided in 
another State.
    ``(f) Recommendations.--In developing the criteria, procedures, and 
information required under this section, the Governor shall solicit and 
take into consideration the recommendations of local boards and 
providers of training services within the State.
    ``(g) Opportunity to Submit Comments.--During the development of 
the criteria, procedures, and information required under this section, 
the Governor shall provide an opportunity for interested members of the 
public, including representatives of business and labor organizations, 
to submit comments regarding such criteria, procedures, and 
information.''.

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.--
            (1) In general.--Section 127(a) (29 U.S.C. 2852(a)) is 
        amended to read as follows:
    ``(a) Allotment Among States.--
            ``(1) Youth activities.--
                    ``(A) Youth challenge grants.--
                            ``(i) Reservation of funds.--Of the amount 
                        appropriated under section 137(a) for each 
                        fiscal year, the Secretary shall reserve 25 
                        percent to provide youth challenge grants under 
                        section 169.
                            ``(ii) Limitation.--Notwithstanding clause 
                        (i), if the amount appropriated under section 
                        137(a) for a fiscal year exceeds 
                        $1,000,000,000, the Secretary shall reserve 
                        $250,000,000 to provide youth challenge grants 
                        under section 169.
                    ``(B) Outlying areas and native americans.--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 Reinvestment and Adult Education Act 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.
            ``(4) Minimum allotment.--Notwithstanding any other 
        provision of this section, no State shall receive an allotment 
        under this section that is less than the amount received by 
        such State for fiscal year 2003.''.
            (2) Reallotment.--Section 127 (29 U.S.C. 2552) is further 
        amended--
                    (A) by striking subsection (b);
                    (B) by redesignating subsection (c) as subsection 
                (b);
                    (C) in subsection (b) (as so redesignated)
                            (i) by amending paragraph (2) to read as 
                        follows:
            ``(2) Amount.--The amount available for reallotment for a 
        program year is equal to the amount by which the unexpended 
        balance, excluding accrued expenditures, at the end of such 
        program year of the total amount of funds available to the 
        State under this section during such program year (including 
        amounts allotted to the State in prior program years that 
        remain available during the program year for which the 
        determination is made) exceeds 30 percent of such total 
        amount.'';
                            (ii) in paragraph (3)--
                                    (I) by striking ``for the prior 
                                program year'' and inserting ``for the 
                                program year in which the determination 
                                is made''; and
                                    (II) by striking ``such prior 
                                program year'' and inserting ``such 
                                program year'';
                            (iii) by amending paragraph (4) to read as 
                        follows:
            ``(4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State which does not have an amount 
        available for reallotment under paragraph (2) for the program 
        year for which the determination under paragraph (2) is 
        made.''.
    (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.--Section 128(b) is amended to 
        read as follows:
    ``(b) Within State Allocation.--
            ``(1) In general.--Of the amounts allotted to the State 
        under section 127(a)(1)(C) and not reserved under subsection 
        (a)(1)--
                    ``(A) 80 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (2); and
                    ``(B) 20 percent of such amounts shall be allocated 
                by the Governor to local areas in accordance with 
                paragraph (3).
            ``(2) Established formula.--
                    ``(A) In general.--Of the amounts described in 
                paragraph (1)(A), the Governor shall allocate--
                            ``(i) 33 and \1/3\ 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).''.
            (3) Reallocation.--Section 128(c) (29 U.S.C. 2853(c)) is 
        amended--
                    (A) in paragraph (1), by striking ``paragraph 
                (2)(A) or (3) of'';
                    (B) by amending paragraph (2) to read as follows:
            ``(2) Amount.--The amount available for reallocation for a 
        program year is equal to the amount by which the unexpended 
        balance, excluding accrued expenditures, at the end of such 
        program year of the total amount of funds available to the 
        local area under this section during such program year 
        (including amounts allotted to the local area in prior program 
        years that remain available during the program year for which 
        the determination is made) exceeds 30 percent of such total 
        amount.'';
                    (C) by amending paragraph (3)--
                            (i) by striking ``subsection (b)(3)'' each 
                        place it appears and inserting ``subsection 
                        (b)'';
                            (ii) by striking ``the prior program year'' 
                        and inserting ``the program year in which the 
                        determination is made'';
                            (iii) by striking ``such prior program 
                        year'' and inserting ``such program year''; and
                            (iv) by striking the last sentence; and
                    (D) by amending paragraph (4) to read as follows:
            ``(4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not have an 
        amount available for reallocation under paragraph (2) for the 
        program year for which the determination under paragraph (2) is 
        made.''.
    (c) Youth Participant Eligibility.--Section 129(a) (29 U.S.C. 
2854(a)) is amended to read as follows:
    ``(a) Youth Participant Eligibility.--
            ``(1) In general.--The individuals participating in 
        activities carried out under this chapter by a local area 
        during any program year shall be individuals who, at the time 
        the eligibility determination is made, are--
                    ``(A) not younger than age 16 or older than age 21; 
                and
                    ``(B) one or more of the following:
                            ``(i) school dropouts;
                            ``(ii) recipients of a secondary school 
                        diploma or the General Equivalency Diploma 
                        (GED) (including recognized alternative 
                        standards for individuals with disabilities);
                            ``(iii) court-involved youth attending an 
                        alternative school;
                            ``(iv) youth in foster care or who have 
                        been in foster care; or
                            ``(v) in school youth who are low-income 
                        individuals and one or more of the following:
                                    ``(I) Deficient in literacy skills.
                                    ``(II) Homeless, runaway, or foster 
                                children.
                                    ``(III) Pregnant or parents.
                                    ``(IV) Offenders.
                                    ``(V) Individuals who require 
                                additional assistance to complete an 
                                educational program, or to secure and 
                                hold employment.
            ``(2) Priority for school dropouts.--A priority in the 
        provision of services under this chapter shall be given to 
        individuals who are school dropouts.
            ``(3) Limitations on activities for in-school youth.--
                    ``(A) Percentage of funds.--For any program year, 
                not more than 30 percent of the funds available for 
                statewide activities under subsection (b), and not more 
                than 30 percent of funds available to local areas under 
                subsection (c), may be used to provide activities for 
                in-school youth meeting the requirements of paragraph 
                (1)(B)(v).
                    ``(B) Non-school hours required.--Activities 
                carried out under this chapter for in-school youth 
                meeting the requirements of paragraph (1)(B)(v) shall 
                only be carried out in non-school hours or periods when 
                school is not in session (such as before and after 
                school or during summer recess.''.
    (d) Statewide Youth Activities.--Section 129(b) (29 U.S.C. 2854(b)) 
is amended to read as follows:
    ``(b) Statewide Activities.--
            ``(1) In general.--Funds reserved by a Governor for a State 
        as described in sections 128(a) and 133(a)(1) may be used for 
        statewide activities including--
                    ``(A) additional assistance to local areas that 
                have high concentrations of eligible youth;
                    ``(B) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop delivery 
                system;
                    ``(C) conducting evaluations under section 136(e) 
                of activities authorized under this chapter and chapter 
                5 in coordination with evaluations carried out by the 
                Secretary under section 172, research, and 
                demonstration projects;
                    ``(D) providing incentive grants to local areas for 
                regional cooperation among local boards (including 
                local boards in a designated region as described in 
                section 116(c)), for local coordination of activities 
                carried out under this Act, and for exemplary 
                performance by local areas on the local performance 
                measures;
                    ``(E) providing technical assistance and capacity 
                building to local areas, one-stop operators, one-stop 
                partners, and eligible providers, including the 
                development and training of staff, the development of 
                exemplary program activities, and the provision of 
                technical assistance to local areas that fail to meet 
                local performance measures;
                    ``(F) operating a fiscal and management 
                accountability system under section 136(f); and
                    ``(G) carrying out monitoring and oversight of 
                activities under this chapter and chapter 5.
            ``(2) Limitation.--Not more than 5 percent of the funds 
        allotted under section 127(b) shall be used by the State for 
        administrative activities carried out under this subsection and 
        section 133(a).
            ``(3) Prohibition.--No funds described in this subsection 
        or in section 134(a) may be used to develop or implement 
        education curricula for school systems in the State.''.
    (e) Local Elements and Requirements.----
            (1) Program design.--Section 129(c)(1) (29 U.S.C. 2854(c) 
        (1)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``paragraph (2)(A) or (3), as appropriate, 
                of'';
                    (B) in subparagraph (B), by inserting ``are 
                directly linked to one or more of the performance 
                outcomes relating to this chapter under section 136, 
                and that'' after ``for each participant that''; and
                    (C) in subparagraph (C)--
                            (i) by redesignating clauses (i) through 
                        (iv) as clauses (ii) through (v), respectively;
                            (ii) by inserting before clause (ii) (as so 
                        redesignated) the following:
                            ``(i) activities leading to the attainment 
                        of a secondary school diploma or the General 
                        Equivalency Diploma (GED) (including recognized 
                        alternative standards for individuals with 
                        disabilities);'';
                            (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 the General 
                Equivalency Diploma (GED) (including recognized 
                alternative standards for individuals with 
                disabilities), including dropout prevention 
                strategies'';
                    (B) in subparagraph (I), by striking ``and'' at the 
                end;
                    (C) in subparagraph (J), by striking the period at 
                the end and inserting a semicolon; and
                    (D) by adding at the end the following:
                    ``(K) on-the-job training opportunities; and
                    ``(L) financial literacy skills.''.
            (3) Additional requirements.--Section 129(c)(3)(A) (29 
        U.S.C. 2854(c)(3)(A)) is amended in the matter preceding clause 
        (i) by striking ``or applicant who meets the minimum income 
        criteria to be considered an eligible youth'';
            (4) Priority and exceptions.--Section 129(c) (29 U.S.C. 
        2854(c)) is further amended--
                    (A) by striking paragraphs (4) and (5);
                    (B) by redesignating paragraph (6) as paragraph 
                (4);
                    (C) by redesignating paragraph (7) as paragraph 
                (5), and in such redesignated paragraph (5) by striking 
                ``youth councils'' and inserting ``local boards''; and
                    (D) by redesignating paragraph (8) as paragraph 
                (6).

SEC. 112. COMPREHENSIVE PROGRAM FOR ADULTS.

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

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

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

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

    (b) General Authorization.--Section 131 (29 U.S.C. 2861) is 
amended--
            (1) by striking ``paragraphs (1)(B) and (2)(B)
        of''; and
            (2) by striking ``, and dislocated workers,''.
    (c) State Allotments.--
            (1) In general.--Section 132(a) (29 U.S.C. 2862(a)) is 
        amended to read as follows:
    ``(a) In General.--The Secretary shall--
            ``(1) reserve 10 percent of the amount appropriated under 
        section 137(b) for a fiscal year, of which--
                    ``(A) not less than 75 percent shall be used for 
                national dislocated worker grants under section 173;
                    ``(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) Minimum allotment.--Notwithstanding any other 
                provision of this section, no State shall receive an 
                allotment under this section that is less than the 
                amount received by such State for fiscal year 2003.
                    ``(E) 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).
                    ``(F) 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 Reinvestment and Adult 
                        Education Act 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.''.
            (3) Reallotment.--Section 132(c) (29 U.S.C. 2862(c)) is 
        amended--
                    (A) by amending paragraph (2) to read as follows:
            ``(2) Amount.--The amount available for reallotment for a 
        program year is equal to the amount by which the unexpended 
        balance, excluding accrued expenditures, at the end of such 
        program year of the total amount of funds available to the 
        State under this section during such program year (including 
        amounts allotted to the State in prior program years that 
        remain available during the program year for which the 
        determination is made) exceeds 30 percent of such total 
        amount.'';
                    (B) in paragraph (3)--
                            (i) by striking ``for the prior program 
                        year'' and inserting ``for the program year in 
                        which the determination is made''; and
                            (ii) by striking ``such prior program 
                        year'' and inserting ``such program year''; and
                    (C) by amending paragraph (4) to read as follows:
            ``(4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State that does not have an amount 
        available for reallotment under paragraph (2) for the program 
        year for which the determination under paragraph (2) is 
        made.''.
    (d) Within State Allocations.--
            (1) Reservation for state activities.--Section 133(a) (29 
        U.S.C. 2863(a)) is amended to read as follows:
    ``(a) Reservation for Statewide Activities.--The Governor of a 
State may reserve up to 50 percent of the total amount allotted to the 
State under section 132 for a fiscal year to carry out the statewide 
activities described in section 134(a).''.
            (2) Allocations to local areas.--Section 133(b) (29 U.S.C. 
        2863(b)) is amended to read as follows:
    ``(b) Allocations to Local Areas.--
            ``(1) In general.--Of the amounts allotted to the State 
        under section 132(b)(2) and not reserved under subsection (a)--
                    ``(A) 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 
                        local areas in the State.
                    ``(B) Minimum and maximum percentages.--The 
                Governor shall ensure that no local area shall receive 
                an allocation for a fiscal year under this paragraph 
                that is less than 90 percent or greater than 130 
                percent of the allocation percentage of the local area 
                for the preceding fiscal year.
                    ``(C) Definitions.--
                            ``(i) Allocation percentage.--The term 
                        `allocation percentage', used with respect to 
                        fiscal year 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 Reinvestment and 
                        Adult Education Act 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) based on a formula developed in consultation with the 
        State board and local boards. Such formula shall be objective 
        and geographically equitable and may include such demographic 
        and economic factors as the Governor, after consultation with 
        the State board and local boards, determines are appropriate.
            ``(4) Local administrative cost limit.--
                    ``(A) In general.--Of the amounts allocated to a 
                local area under this subsection and section 128(b) for 
                a fiscal year, not more than 10 percent of the amount 
                may be used by the local boards for the administrative 
                costs of carrying out local workforce investment 
                activities under this chapter or chapter 4.
                    ``(B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may be used 
                for the administrative costs of any of the local 
                workforce investment activities described in this 
                chapter or chapter 4, regardless of whether the funds 
                were allocated under this subsection or section 
                128(b).''.
            (3) Reallocation among local areas.--Section 133(c) (29 
        U.S.C. 2863(c)) is amended--
                    (A) in paragraph (1), by striking ``paragraph 
                (2)(A) or (3) of'';
                    (B) by amending paragraph (2) to read as follows:
            ``(2) Amount.--The amount available for reallocation for a 
        program year is equal to the amount by which the unexpended 
        balance, excluding accrued expenditures, at the end of such 
        program year of the total amount of funds available to the 
        local area under this section during such program year 
        (including amounts allotted to the local area in prior program 
        years that remain available during the program year for which 
        the determination is made) exceeds 30 percent of such total 
        amount.'';
                    (C) by amending paragraph (3)--
                            (i) by striking ``subsection (b)(3)'' each 
                        place it appears and inserting ``subsection 
                        (b)'';
                            (ii) by striking ``the prior program year'' 
                        and inserting ``the program year in which the 
                        determination is made'';
                            (iii) by striking ``such prior program 
                        year'' and inserting ``such program year''; and
                            (iv) by striking the last sentence; and
                    (D) by amending paragraph (4) to read as follows:
            ``(4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area which does not have an 
        amount available for reallocation under paragraph (2) for the 
        program year for which the determination under paragraph (2) is 
        made.''.
    (e) Use of Funds for Employment and Training Activities.--
            (1) Statewide employment and training activities.--
                    (A) In general.--Section 134(a)(1) (29 U.S.C. 
                2864(a)(1) is amended to read as follows:
            ``(1) In general.--
                    ``(A) Required use of funds.--Not less than 50 
                percent of the funds reserved by a Governor under 
                section 133(a) shall be used to support the provision 
                of core services in local areas, consistent with the 
                local plan, through one-stop delivery systems by 
                distributing funds to local areas in accordance with 
                subparagraph (B). Such funds may be used by States to 
                employ State personnel to provide such services in 
                designated local areas in consultation with local 
                boards.
                    ``(B) Method of distributing funds.--The method of 
                distributing funds under this paragraph shall be 
                developed in consultation with the State board and 
                local boards. Such method of distribution, which may 
                include the formula established under section 
                121(h)(3), shall be objective and geographically 
                equitable, and may include factors such as the number 
                of centers in the local area that have been certified, 
                the population served by such centers, and the 
                performance of such centers.
                    ``(C) Other use of funds.--Funds reserved by a 
                Governor for a State--
                            ``(i) under section 133(a) and not used 
                        under subparagraph (A), may be used for 
                        statewide activities described in paragraph 
                        (2); and
                            ``(ii) under section 133(a) and not used 
                        under subparagraph (A), and under section 
                        128(a) may be used to carry out any of the 
                        statewide employment and training activities 
                        described in paragraph (3).''.
                    (B) Statewide rapid response activities.--Section 
                134(a)(2) (29 U.S.C. 2864(a)(2)) is amended to read as 
                follows:
            ``(2) Statewide rapid response activities.--A State shall 
        carry out statewide rapid response activities using funds 
        reserved as described in section 133(a). Such activities shall 
        include--
                    ``(A) provision of rapid response activities, 
                carried out in local areas by the State or by an entity 
                designated by the State, working in conjunction with 
                the local boards and the chief elected officials in the 
                local areas; and
                    ``(B) provision of additional assistance to local 
                areas that experience disasters, mass layoffs or plant 
                closings, or other events that precipitate substantial 
                increases in the number of unemployed individuals, 
                carried out in local areas by the State, working in 
                conjunction with the local boards and the chief elected 
                officials in the local areas.''.
                    (C) Statewide employment and training activities.--
                Section 134(a)(3) (29 U.S.C. 2864(a)(3)) is amended to 
                read as follows:
            ``(3) Statewide activities.--Funds reserved by a Governor 
        for a State as described in sections 133(a) and 128(a) may be 
        used for statewide activities including--
                    ``(A) supporting the provision of core services 
                described in section 134(c)(2) in the one-stop delivery 
                system;
                    ``(B) conducting evaluations under section 136(e) 
                of activities authorized under this chapter and chapter 
                4 in coordination with evaluations carried out by the 
                Secretary under section 172, research, and 
                demonstration projects;
                    ``(C) providing incentive grants to local areas for 
                regional cooperation among local boards (including 
                local boards in a designated region as described in 
                section 116(c)), for local coordination of activities 
                carried out under this Act, and for exemplary 
                performance by local areas on the local performance 
                measures;
                    ``(D) providing technical assistance and capacity 
                building to local areas, one-stop operators, one-stop 
                partners, and eligible providers, including the 
                development and training of staff, the development of 
                exemplary program activities, and the provision of 
                technical assistance to local areas that fail to meet 
                local performance measures;
                    ``(E) operating a fiscal and management 
                accountability system under section 136(f);
                    ``(F) carrying out monitoring and oversight of 
                activities carried out under this chapter and chapter 
                4;
                    ``(G) implementing innovative programs, such as 
                incumbent worker training programs, programs serving 
                individuals with disabilities consistent with section 
                188;
                    ``(H) developing strategies for effectively serving 
                hard-to-serve populations and for integrating programs 
                and services among one-stop partners;
                    ``(I) implementing innovative programs for 
                displaced homemakers, which for purposes of this 
                subparagraph may include an individual who is receiving 
                public assistance and is within 2 years of exhausting 
                lifetime eligibility under Part A of title IV of the 
                Social Security Act (42 U.S.C. 601 et seq.); and
                    ``(J) implementing programs to increase the number 
                of individuals training for and placed in 
                nontraditional employment.''.
                    (D) Limitation on state administrative 
                expenditures.--Section 134(a) is further amended by 
                adding the following new paragraph:
            ``(4) Limitation.--Not more than 5 percent of the funds 
        allotted under section 132(b) shall be used by the State for 
        administrative activities carried out under this subsection and 
        section 128(a).''.
            (2) Local employment and training activities.-- Section 
        134(b) (29 U.S.C. 2864(b)) is amended--
                    (A) by striking ``under paragraph (2)(A)'' and all 
                that follows through ``section 133(b)(2)(B)'' and 
                inserting ``under section 133(b)'';
                    (B) in paragraphs (1) and (2), by striking ``or 
                dislocated workers, respectively'' 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) (29 U.S.C. 
                2864(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 section 133(b) shall be used--
                    ``(A) to establish a one-stop delivery system as 
                described in section 121(e);
                    ``(B) to provide the core services described in 
                paragraph (2) through the one-stop delivery system in 
                accordance with such paragraph;
                    ``(C) to provide the intensive services described 
                in paragraph (3) to adults described in such paragraph; 
                and
                    ``(D) to provide training services described in 
                paragraph (4) to adults described in such paragraph.''.
                    (B) Core services.--Section 134(c)(2) (29 U.S.C. 
                2864(c)(2)) (as redesignated by paragraph (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) by amending subparagraph (D) to read 
                        as follows:
                    ``(D) labor exchange services, including--
                            ``(i) job search and placement assistance, 
                        and where appropriate career counseling; and
                            ``(ii) appropriate recruitment services for 
                        employers;'';
                            (iv) in subparagraph (I), by inserting 
                        ``and the administration of the work test for 
                        the unemployment compensation system'' after 
                        ``compensation''; and
                            (v) by amending subparagraph (J) to read as 
                        follows:
                    ``(J) assistance in establishing eligibility for 
                programs of financial aid assistance for training and 
                education programs that are not funded under this Act 
                and are available in the local area; and''.
                    (C) Intensive services.--Section 134(c)(3) (29 
                U.S.C. 2864(c)(3) (as redesignated by paragraph (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; and
                                            ``(bb) in need of intensive 
                                        services in order to obtain 
                                        suitable employment; or
                                    ``(II) are employed, but who are 
                                determined by a one-stop operator to be 
                                in need of intensive services to obtain 
                                or retain suitable employment.
                            ``(ii) Definition.--The Governor shall 
                        define the term `suitable employment' for 
                        purposes of this subparagraph.''; and
                            (ii) in subparagraph (C)--
                                    (I) in clause (v), by striking 
                                ``for participants seeking training 
                                services under paragraph (4)''; and
                                    (II) by adding the following 
                                clauses after clause (vi):
                            ``(vii) Internships and work experience.
                            ``(viii) Literacy activities relating to 
                        basic work readiness, and financial literacy 
                        activities.
                            ``(ix) Out-of-area job search assistance 
                        and relocation assistance.''.
                    (D) Training services.--Section 134(c)(4) (as 
                redesignated by paragraph (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. 1087uu) 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 after subclause (III) the 
                        following:
                                    ``(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;
                            ``(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 133(b) may be used to provide, 
                        through the one-stop delivery system and in 
                        collaboration with the appropriate programs and 
                        resources of the one-stop partners, work 
                        support activities designed to assist low-wage 
                        workers in retaining and enhancing employment.
                            ``(ii) Activities.--The activities 
                        described in clause (i) may include assistance 
                        in accessing financial supports for which such 
                        workers may be eligible and the provision of 
                        activities available through the one-stop 
                        delivery system in a manner that enhances the 
                        opportunities of such workers to participate, 
                        such as the provision of employment and 
                        training activities during nontraditional hours 
                        and the provision of on-site child care while 
                        such activities are being provided.''; and
                    (B) by adding after paragraph (3) the following new 
                paragraph:
            ``(4) Incumbent worker training programs.--
                    ``(A) In general.--The local board may use up to 10 
                percent of the funds allocated to a local area under 
                section 133(b) to carry out incumbent worker training 
                programs in accordance with this paragraph.
                    ``(B) Training activities.--The training programs 
                for incumbent workers under this paragraph shall be 
                carried out by the local area in conjunction with the 
                employers of such workers for the purpose of assisting 
                such workers in obtaining the skills necessary to 
                retain employment and avert layoffs.
                    ``(C) Employer match required.--
                            ``(i) In general.--Employers participating 
                        in programs under this paragraph shall be 
                        required to pay a proportion of the costs of 
                        providing the training to the incumbent 
                        workers. The Governor shall establish, or may 
                        authorize the local board to establish, the 
                        required portion of such costs, which shall not 
                        be less than--
                                    ``(I) 10 percent of the costs, for 
                                employers with 50 or fewer employees;
                                    ``(II) 25 percent of the costs, for 
                                employers with more than 50 employees 
                                but fewer than 100 employees; and
                                    ``(III) 50 percent of the costs, 
                                for employers with 100 or more 
                                employees.
                            ``(ii) Calculation of match.--The wages 
                        paid by an employer to a worker while they are 
                        attending training may be included as part of 
                        the requirement payment of the employer.''.

SEC. 113. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) State Performance Measures.--
            (1) In general.--Section 136(b)(1) (29 U.S.C. 2871(b)(1)) 
        is amended--
                    (A) in subparagraph (A)(i), by striking ``and the 
                customer satisfaction indicator of performance 
                described in paragraph (2)(B)''; and
                    (B) in subparagraph (A)(ii), by striking 
                ``paragraph (2)(C)'' and inserting ``paragraph 
                (2)(B)''.
            (2) Indicators of performance.--Section 136(b)(2) (29 
        U.S.C. 2871(b)(2)) is amended--
                    (A) in subparagraph (A)(i), by striking ``(except 
                for self-service and information activities) and (for 
                participants who are eligible youth age 19 through 21) 
                for youth activities authorized under section 129'';
                    (B) 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 the General 
                                Equivalency Diploma (GED) (including 
                                recognized alternative standards for 
                                individuals with disabilities);
                                    ``(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);
                    (E) by redesignating subparagraph (C) as 
                subparagraph (B), and by adding at the end of such 
                subparagraph (as so redesignated) the following new 
                sentence: ``Such indicators may include customer 
                satisfaction of employers and participants with 
                services received from the workforce investment 
                activities authorized under this subtitle.''.
            (3) Levels of performance.--Section 136(b)(3)(A) (29 U.S.C. 
        2871(b)(3)(A)) is amended--
                    (A) in clause (i), by striking ``and the customer 
                satisfaction indicator described in paragraph (2)(B)'';
                    (B) in clause (ii), by striking ``and the customer 
                satisfaction indicator of performance, for the first 
                3'' and inserting ``for the 2'';
                    (C) in clause (iii)--
                            (i) in the heading, by striking ``for first 
                        3 years''; and
                            (ii) by striking ``and the customer 
                        satisfaction indicator of performance, for the 
                        first 3'' and inserting ``for the 2'';
                    (D) in clause (iv)--
                            (i) by striking subclause (I);
                            (ii) by redesignating subclauses (II) and 
                        (III) as subclauses (I) and (II), respectively; 
                        and
                            (iii) in subclause (I) (as so 
                        redesignated)--
                                    (I) by striking ``taking into 
                                account'' and inserting ``which shall 
                                be adjusted based on'';
                                    (II) by inserting ``such as 
                                unemployment rates and job losses or 
                                gains in particular industries'' after 
                                ``economic conditions''; and
                                    (III) by inserting ``such as 
                                indicators of poor work history, lack 
                                of work experience, low levels of 
                                literacy or English proficiency, 
                                disability status, and welfare 
                                dependency'' after ``program'';
                    (E) by striking clause (v); and
                    (F) by redesignating clause (vi) as clause (v).
            (4) Additional indicators.--Section 136(b)(3)(B) is amended 
        by striking ``paragraph (2)(C)'' and inserting ``paragraph 
        (2)(B)''.
    (b) Local Performance Measures.--Section 136(c) (29 U.S.C 2871(c)) 
is amended--
            (1) in paragraph (1)(A)(i), by striking ``, and the 
        customer satisfaction indicator of performance described in 
        subsection (b)(2)(B),'';
            (2) in paragraph (1)(A)(ii), by striking ``subsection 
        (b)(2)(C)'' and inserting ``subsection (b)(2)(B)''; and
            (3) by amending paragraph (3) to read as follows:
            ``(3) Determinations.--In determining such local levels of 
        performance, the local board, the chief elected official, and 
        the Governor shall ensure such levels are adjusted based on the 
        specific economic characteristics (such as unemployment rates 
        and job losses or gains in particular industries), demographic 
        characteristics, or other characteristics of the population to 
        be served in the local area, such as poor work history, lack of 
        work experience, low levels of literacy or English proficiency, 
        disability status, and welfare dependency.''.
    (c) Report.--Section 136(d) (29 U.S.C. 2871(d)) is amended--
            (1) in paragraph (1), by striking ``and the customer 
        satisfaction indicator'' in both places that it appears;
            (2) in paragraph (2)(E), by striking ``(excluding 
        participants who received only self-service and informational 
        activities)''; and
            (3) by adding at the end the following:
            ``(4) Data validation.--In preparing the reports described 
        in this subsection, the States shall establish procedures, 
        consistent with guidelines issued by the Secretary, to ensure 
        the information contained in the report is valid and 
        reliable.''.
    (d) Sanctions for State.--Section 136(g) (29 U.S.C. 2871(g)) is 
amended--
            (1) in paragraph (1)(A), by striking ``or (B)''; and
            (2) in paragraph (2), by striking ``section 503'' and 
        inserting ``section 136(i)''.
    (e) Sanctions for Local Areas.--Section 136(h) (29 U.S.C. 2871(h)) 
is amended--
            (1) in paragraph (1), by striking ``or (B)''; and
            (2) by amending paragraph (2)(B) to read as follows:
                    ``(B) Appeal to governor.--A local area that is 
                subject to a reorganization plan under subparagraph (A) 
                may, not later than 30 days after receiving notice of 
                the reorganization plan, appeal to the Governor to 
                rescind or revise such plan. In such case, the Governor 
                shall make a final decision not later than 30 days 
                after the receipt of the appeal.''.
    (f) Incentive Grants.--Section 136(i) (29 U.S.C. 2871(i)) is 
amended to read as follows:
    ``(i) Incentive Grants for States and Local Areas.--
            ``(1) Incentive grants for states.--
                    ``(A) In general.--From funds appropriated under 
                section 174, the Secretary may award grants to States 
                for exemplary performance in carrying programs under 
                this 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 (and the items 
related to such sections in the table of contents) are repealed.

SEC. 114. AUTHORIZATION OF APPROPRIATIONS.

    (a) Youth Activities.-- Section 137(a) (29 U.S.C. 2872(a)) is 
amended by striking ``such sums as may be necessary for each of fiscal 
years 1999 through 2003'' and inserting ``$1,001,000,000 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) (29 
U.S.C. 2872(b)) is amended by striking ``section 132(a)(1), such sums 
as may be necessary for each of fiscal years 1999 through 2003'' and 
inserting ``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).

SEC. 115. JOB CORPS.

    (a) Community Participation.--Section 153 (29 U.S.C. 2893) 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(b)) is 
amended--
            (1) in paragraph (1)(A), by striking ``local and distant''; 
        and
            (2) by adding after paragraph (2) the following:
            ``(3) Employers outside of local areas.--The industry 
        council may include, or otherwise provide for consultation 
        with, employers from outside the local area who are likely to 
        hire a significant number of enrollees from the Job Corps 
        center.''.
    (c) Indicators of Performance and Additional Information.--Section 
159(c) (29 U.S.C. 2893(c)) is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Core indicators.--The Secretary shall annually 
        establish expected levels of performance for Job Corps centers 
        and the Job Corps program relating to each of the core 
        indicators for youth identified in section 136(b)(2)(A)(ii).''; 
        and
            (2) in paragraph (2), by striking ``measures'' each place 
        it appears and inserting ``indicators''.

SEC. 116. 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 (29 
U.S.C. 2911) is further amended by striking subsection (j).

SEC. 117. 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 provide 
        technical assistance to, and conduct evaluations of the 
        projects funded under this subsection (using appropriate 
        techniques as described in section 172(c)).
    ``(c) Discretionary Grants for Youth Activities.--
            ``(1) In general.--From the funds described in 
        subsection(a)(2), the Secretary may award grants to eligible 
        entities to provide activities that will assist youth in 
        preparing for, and entering and retaining, employment.
            ``(2) Eligible entities.--Grants under this subsection may 
        be awarded to public or private entities that the Secretary 
        determines would effectively carry out activities relating to 
        youth under this subsection.
            ``(3) Participant eligibility.--Youth ages 14 through 19 at 
        the time the eligibility determination is made may be eligible 
        to participate in activities under this subsection.
            ``(4) Use of funds.--Funds provided under this subsection 
        may be used for activities that will assist youth in preparing 
        for, and entering and retaining, employment, including the 
        activities described in section 129 for out-of-school youth, 
        activities designed to assist in-school youth to stay in school 
        and gain work experience, and such other activities that the 
        Secretary determines are appropriate.
            ``(5) Applications.--To be eligible to receive a grant 
        under this subsection, an eligible entity shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may require.
            ``(6) Additional requirements.--The Secretary may require 
        the provision of a non-Federal share for projects funded under 
        this subsection and may require participation of grantees in 
        evaluations of such projects, including evaluations using the 
        techniques as described in section 172(c).''.

SEC. 118. TECHNICAL ASSISTANCE.

    Section 170 (29 U.S.C. 2915) is amended--
            (1) by striking subsection (b);
            (2) by striking ``(a) General Technical Assistance.--'';
            (3) by redesignating paragraphs (1), (2), and (3) as 
        subsections (a), (b), and (c) respectively, and moving such 
        subsections 2 ems to the left; 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 under this title,'' 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 
                Reinvestment and Adult Education Act of 2003''.

SEC. 119. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH AND MULTISTATE 
              PROJECTS.

    (a) Demonstration and Pilot Projects.--Section 171(b) (29 U.S.C. 
2916(b)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``Under a'' and inserting 
                ``Consistent with the priorities specified in the'';
                    (B) by amending subparagraphs (A) through (D) to 
                read as follows:
                    ``(A) projects that assist national employers in 
                connecting with the workforce investment system 
                established under this title in order to facilitate the 
                recruitment and employment of needed workers and to 
                provide information to such system on skills and 
                occupations in demand;
                    ``(B) projects that promote the development of 
                systems that will improve the effectiveness and 
                efficiency of programs carried out under this title;
                    ``(C) projects that focus on opportunities for 
                employment in industries and sectors of industries that 
                are experiencing or are likely to experience high rates 
                of growth;
                    ``(D) projects carried out by States and local 
                areas to test innovative approaches to delivering 
                employment-related services;'';
                    (C) by striking subparagraph (E);
                    (D) by redesignating subparagraphs (F) and (G) as 
                subparagraphs (E) and (F), respectively;
                    (E) by inserting after subparagraph (F) (as so 
                redesignated) the following:
                    ``(G) projects that provide retention grants to 
                qualified job training programs upon placement or 
                retention of a low-income individual trained by that 
                program in employment with a single employer for a 
                period of 1 year, provided that such employment is 
                providing to the low-income individual an income not 
                less than twice the poverty line for that 
                individual.''; and
                    (F) 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) (29 U.S.C. 
2916(c)(2)(B)) is amended to read as follows:
                    ``(B) Net impact studies and reports.--The 
                Secretary shall conduct studies to determine the net 
                impacts of programs, services, and activities carried 
                out under this title. The Secretary shall prepare and 
                disseminate to 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. 120. EVALUATIONS.

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

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

        and
            (2) in subsection (a)--
                    (A) by striking ``national emergency grants'' in 
                the matter preceding paragraph (1) and inserting 
                ``national dislocated worker grants''; and
                    (B) in paragraph (1), by striking ``subsection 
                (c)'' and inserting ``subsection (b)''.
    (b) Administration.--Section 173 (29 U.S.C. 2918) is further 
amended--
            (1) by striking subsection (b) and redesignating 
        subsections (c) and (d) as subsections (b) and (c), 
        respectively; and
            (2) by striking subsection (e) and redesignating 
        subsections (f) and (g) as subsection (d) and (e), 
        respectively.
    (c) Eligible Entities.--Section 173(b)(1)(B) (29 
U.S.C.2918(b)(1)(B)) (as redesignated by subsection (b) of this 
section) is amended by striking ``, and other entities'' and all that 
follows and inserting a period.
    (d) Conforming Amendment.--The table of contents in section 1(b) is 
amended by amending the item related to section 173 to read as follows:

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

SEC. 121. AUTHORIZATION OF APPROPRIATIONS FOR NATIONAL ACTIVITIES.

    (a) In General.--Section 174(a)(1) (29 U.S.C. 2919(a)(1)) is 
amended by striking ``1999 through 2003'' and inserting ``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. 122. REQUIREMENTS AND RESTRICTIONS.

    (a) In General.--Section 181(c)(2)(A) (29 U.S.C. 2931(c)(2)(A)) is 
amended in the matter preceding clause (i) by striking ``shall'' and 
inserting ``may''.
    (b) Limitations.--Section 181(e) is amended by striking the first 
sentence.

SEC. 123. NONDISCRIMINATION.

    Section 188(a)(2) (29 U.S.C. 2931(a)(2)) is amended--
            (1) by striking ``employment.--No'' and inserting 
        ``employment.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no''; and
            (2) by adding at the end 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. 124. ADMINISTRATIVE PROVISIONS.

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

SEC. 125. GENERAL PROGRAM REQUIREMENTS.

    Section 195 (29 U.S.C. 2945) is amended by adding at the end the 
following new paragraph:
            ``(14) Funds provided under this title shall not be used to 
        establish or operate stand-alone fee-for-service enterprises 
        that compete with private sector employment agencies within the 
        meaning of section 701(c) of the Civil Rights Act of 1964 (42 
        U.S.C. 2000e(c)). For purposes of this paragraph, such an 
        enterprise does not include one-stop centers.''.

                       TITLE II--ADULT EDUCATION

        PART A--ADULT BASIC SKILLS AND FAMILY LITERACY EDUCATION

SEC. 201. TABLE OF CONTENTS.

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

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

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

                    ``Chapter 1--Federal Provisions

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

                     ``Chapter 2--State Provisions

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

                     ``Chapter 3--Local Provisions

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

                    ``Chapter 4--General Provisions

``Sec. 241. Administrative provisions.
``Sec. 242. National leadership activities.''.

SEC. 202. AMENDMENT.

    Title II is amended to read as follows:

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

``SEC. 201. SHORT TITLE.

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

``SEC. 202. PURPOSE.

    ``It is the purpose of this title to provide instructional 
opportunities for adults seeking to improve their basic reading, 
writing, speaking, and math skills, and support States and local 
communities in providing, on a voluntary basis, adult basic skills and 
family literacy programs, 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 a 
        postsecondary educational institution;
            ``(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 basic skills and family literacy education 
        programs.--The term `adult basic skills and family literacy 
        education programs' means a sequence of academic instruction 
        and educational services below the postsecondary level that 
        increase an individual's ability to read, write, and speak in 
        English and perform mathematical computations leading to a 
        level of proficiency equivalent to 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 the General Equivalency Diploma 
                        (GED) (including recognized alternative 
                        standards for individuals with disabilities), 
                        and have not achieved an equivalent level of 
                        education; or
                            ``(iii) are unable to read, write, or speak 
                        the English language.
            ``(2) Eligible agency.--The term `eligible agency'--
                    ``(A) means the sole entity or agency in a State or 
                an outlying area responsible for administering or 
                supervising policy for adult basic skills and family 
                literacy education programs in the State or outlying 
                area, respectively, consistent with the law of the 
                State or outlying area, respectively; and
                    ``(B) may be the State educational agency, the 
                State agency responsible for administering workforce 
                investment activities, or the State agency responsible 
                for administering community or technical colleges.
            ``(3) Eligible provider.--The term `eligible provider' 
        means--
                    ``(A) a local educational agency;
                    ``(B) a community-based or faith-based organization 
                of demonstrated effectiveness;
                    ``(C) a volunteer literacy organization of 
                demonstrated effectiveness;
                    ``(D) an institution of higher education;
                    ``(E) a public or private educational agency;
                    ``(F) a library;
                    ``(G) a public housing authority;
                    ``(H) an institution that is not described in any 
                of subparagraphs (A) through (G) and has the ability to 
                provide adult basic skills and family literacy 
                education programs to adults and families; or
                    ``(I) a consortium of the agencies, organizations, 
                institutions, libraries, or authorities described in 
                any of subparagraphs (A) through (H).
            ``(4) English language acquisition program.--The term 
        `English language acquisition program' means a program of 
        instruction designed to help individuals with limited English 
        proficiency achieve competence in reading, writing, and 
        speaking the English language.
            ``(5) Essential components of reading instruction.--The 
        term `essential components of reading instruction' has the 
        meaning given to that term in section 1208 of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 6368).
            ``(6) Family literacy education programs.--The term `family 
        literacy education 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 
                and of sufficient duration to make sustainable changes 
                in a family, are based upon scientific research-based 
                principles, and for the purpose of substantially 
                increasing the ability of parents and children to read, 
                write, and speak English integrate--
                            ``(i) interactive literacy activities 
                        between parents and their children;
                            ``(ii) training for parents regarding how 
                        to be the primary teacher for their children 
                        and full partners in the education of their 
                        children;
                            ``(iii) parent literacy training that leads 
                        to economic self-sufficiency; and
                            ``(iv) an age-appropriate education to 
                        prepare children for success in school and life 
                        experiences.
            ``(7) Governor.--The term `Governor' means the chief 
        executive officer of a State or outlying area.
            ``(8) Individual with a disability.--
                    ``(A) In general.--The term `individual with a 
                disability' means an individual with any disability (as 
                defined in section 3 of the Americans with Disabilities 
                Act of 1990 (42 U.S.C. 12102)).
                    ``(B) Individuals with disabilities.--The term 
                `individuals with disabilities' means more than one 
                individual with a disability.
            ``(9) Individual with limited english proficiency.--The 
        term `individual with limited English proficiency' means an 
        adult or out-of-school youth who has limited ability in 
        reading, writing, speaking, or understanding the English 
        language, and--
                    ``(A) whose native language is a language other 
                than English; or
                    ``(B) who lives in a family or community 
                environment where a language other than English is the 
                dominant language.
            ``(10) Institution of higher education.--The term 
        `institution of higher education' has the meaning given to that 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            ``(11) Literacy.--The term `literacy' means the ability to 
        read, write, and speak the English language with competence, 
        knowledge, and comprehension.
            ``(12) Local educational agency.--The term `local 
        educational agency' has the meaning given to that term in 
        section 9101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
            ``(13) Outlying area.--The term `outlying area' has the 
        meaning given to that term in section 101 of this Act.
            ``(14) Postsecondary educational institution.--The term 
        `postsecondary educational institution' means--
                    ``(A) an institution of higher education that 
                provides not less than a 2-year program of instruction 
                that is acceptable for credit toward a bachelor's 
                degree;
                    ``(B) a tribally controlled community college; or
                    ``(C) a nonprofit educational institution offering 
                certificate or apprenticeship programs at the 
                postsecondary level.
            ``(15) Reading.--The term `reading' has the meaning given 
        to that term in section 1208 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6368).
            ``(16) 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).
            ``(17) Secretary.--The term `Secretary' means the Secretary 
        of Education.
            ``(18) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
            ``(19) State educational agency.--The term `State 
        educational agency' has the meaning given to that term in 
        section 9101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
            ``(20) Workplace literacy program.--The term `workplace 
        literacy program' means an educational program that is offered 
        in collaboration between eligible providers and employers or 
        employee organizations for the purpose of improving the 
        productivity of the workforce through the improvement of 
        reading, writing, speaking, and math skills.

``SEC. 204. HOME SCHOOLS.

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

``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 reserve 1.75 percent to carry out the National 
        Institute for Literacy Establishment Act;
            ``(2) shall reserve up to 1.72 percent for incentive grants 
        under section 213; and
            ``(3) 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 the 
        General Equivalency Diploma (GED) (including recognized 
        alternative standards for individuals with disabilities); 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), and 
        subject to paragraphs (2) and (3), 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) Exception.--An eligible agency that receives for the 
        preceding fiscal year only an initial allotment under 
        subsection 211(c)(1) (and no additional allotment under 
        211(c)(2)) shall receive an allotment equal to 100 percent of 
        the initial allotment.
            ``(3) Ratable reduction.--If for any fiscal year the amount 
        available for allotment under this title is insufficient to 
        satisfy the provisions of paragraph (1), the Secretary shall 
        ratably reduce the payments to all eligible agencies, as 
        necessary.
    ``(g) Reallotment.--The portion of any eligible agency's allotment 
under this title for a fiscal year that the Secretary determines will 
not be required for the period such allotment is available for carrying 
out activities under this title, shall be available for reallotment 
from time to time, on such dates during such period as the Secretary 
shall fix, to other eligible agencies in proportion to the original 
allotments to such agencies under this title for such year.

``SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

    ``(a) Purpose.--The purpose of this section is to establish a 
comprehensive performance accountability system, composed of the 
activities described in this section, to assess the effectiveness of 
eligible agencies in achieving continuous improvement of adult basic 
skills and family literacy education programs funded under this title, 
in order to optimize the return on investment of Federal funds in adult 
basic skills and family literacy education programs.
    ``(b) Eligible Agency Performance Measures.--
            ``(1) In general.--For each eligible agency, the eligible 
        agency performance measures shall consist of--
                    ``(A)(i) the core indicators of performance 
                described in paragraph (2)(A); and
                    ``(ii) employment performance indicators identified 
                by the eligible agency under paragraph (2)(B); and
                    ``(B) an eligible agency adjusted level of 
                performance for each indicator described in 
                subparagraph (A).
            ``(2) Indicators of performance.--
                    ``(A) Core indicators of performance.--The core 
                indicators of performance shall include the following:
                            ``(i) Measurable improvements in 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 the General Equivalency Diploma 
                        (GED) (including recognized alternative 
                        standards for individuals with disabilities).
                            ``(iii) Placement in postsecondary 
                        education or other training programs.
                    ``(B) Employment performance indicators.--
                Consistent with applicable Federal and State privacy 
                laws, an eligible agency shall identify in the State 
                plan the following individual participant employment 
                performance indicators--
                            ``(i) entry into employment;
                            ``(ii) retention in employment; 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 basic skills and 
                        family literacy education programs authorized 
                        under this title. The levels of performance 
                        established under this subparagraph shall, at a 
                        minimum--
                                    ``(I) be expressed in an objective, 
                                quantifiable, and measurable form; and
                                    ``(II) show the progress of the 
                                eligible agency toward continuously and 
                                significantly improving the agency's 
                                performance outcomes in an objective, 
                                quantifiable, and measurable form.
                            ``(ii) Identification in state plan.--Each 
                        eligible agency shall identify, in the State 
                        plan submitted under section 224, expected 
                        levels of performance for each of the core 
                        indicators of performance for the first 3 
                        program years covered by the State plan.
                            ``(iii) Agreement on eligible agency 
                        adjusted levels of performance for first 3 
                        years.--In order to ensure an optimal return on 
                        the investment of Federal funds in adult basic 
                        skills and family literacy education programs 
                        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 
                        student proficiency for each of the core 
                        indicators of performance for the fourth, 
                        fifth, and sixth program years covered by the 
                        State plan, taking into account the factors 
                        described in clause (iv). The levels agreed to 
                        under this clause shall be considered to be the 
                        eligible agency adjusted levels of performance 
                        for the eligible agency for such years and 
                        shall be incorporated into the State plan.
                            ``(vi) Revisions.--If unanticipated 
                        circumstances arise in a State resulting in a 
                        significant change in the factors described in 
                        clause (iv)(I), the eligible agency may request 
                        that the eligible agency adjusted levels of 
                        performance agreed to under clause (iii) or (v) 
                        be revised.
                    ``(B) Levels of employment performance.--The 
                eligible agency shall identify, in the State plan, 
                eligible agency levels of performance for each of the 
                employment performance indicators described in 
                paragraph (2)(B). Such levels shall be considered to be 
                eligible agency adjusted levels of performance for 
                purposes of this title.
    ``(c) Report.--
            ``(1) In general.--Each eligible agency that receives a 
        grant under section 211(b) shall annually prepare and submit to 
        the Secretary, the Governor, the State legislature, 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 
                the Congress with copies of such reports.

``SEC. 213. INCENTIVE GRANTS FOR STATES.

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

                     ``CHAPTER 2--STATE PROVISIONS

``SEC. 221. STATE ADMINISTRATION.

    ``Each eligible agency shall be responsible for the following 
activities under this title:
            ``(1) The development, submission, implementation, and 
        monitoring of the State plan.
            ``(2) Consultation with other appropriate agencies, groups, 
        and individuals that are involved in, or interested in, the 
        development and implementation of activities assisted under 
        this title.
            ``(3) Coordination and avoidance of duplication with other 
        Federal and State education, training, corrections, public 
        housing, and social service programs.

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

    ``(a) State Distribution of Funds.--Each eligible agency receiving 
a grant under this title for a fiscal year--
            ``(1) shall use an amount not less than 82.5 percent of the 
        grant funds to award grants and contracts under section 231 and 
        to carry out section 225, of which not more than 10 percent of 
        such amount shall be available to carry out section 225;
            ``(2) shall use not more than 12.5 percent of the grant 
        funds to carry out State leadership activities under section 
        223; and
            ``(3) shall use not more than 5 percent of the grant funds, 
        or $75,000, whichever is greater, for the administrative 
        expenses of the eligible agency.
    ``(b) Matching Requirement.--
            ``(1) In general.--In order to receive a grant from the 
        Secretary under section 211(b), each eligible agency shall 
        provide, for the costs to be incurred by the eligible agency in 
        carrying out the adult basic skills and family literacy 
        education programs for which the grant is awarded, a non-
        Federal contribution in an amount at least equal to--
                    ``(A) in the case of an eligible agency serving an 
                outlying area, 12 percent of the total amount of funds 
                expended for adult basic skills and family literacy 
                education programs in the outlying area, except that 
                the Secretary may decrease the amount of funds required 
                under this subparagraph for an eligible agency; and
                    ``(B) in the case of an eligible agency serving a 
                State, 25 percent of the total amount of funds expended 
                for adult basic skills and family literacy education 
                programs in the State.
            ``(2) Non-federal contribution.--An eligible agency's non-
        Federal contribution required under paragraph (1) may be 
        provided in cash or in kind, fairly evaluated, and shall 
        include only non-Federal funds that are used for adult basic 
        skills and family literacy education programs in a manner that 
        is consistent with the purpose of this title.

``SEC. 223. STATE LEADERSHIP ACTIVITIES.

    ``(a) In General.--Each eligible agency may use funds made 
available under section 222(a)(2) for any of the following adult basic 
skills and family literacy education programs:
            ``(1) The establishment or operation of professional 
        development programs to improve the quality of instruction 
        provided pursuant to local activities required under section 
        231(b), including instruction incorporating the essential 
        components of reading instruction and instruction provided by 
        volunteers or by personnel of a State or outlying area.
            ``(2) The provision of technical assistance to eligible 
        providers of adult basic skills and family literacy education 
        programs 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 basic skills and 
        family literacy education programs, including distance learning 
        activities, to enable the eligible providers to improve the 
        quality of such activities.
            ``(5) The development and implementation of technology 
        applications or distance learning, including professional 
        development to support the use of instructional technology.
            ``(6) Coordination with other public programs, including 
        welfare-to-work, workforce development, and job training 
        programs.
            ``(7) Coordination with existing support services, such as 
        transportation, child care, and other assistance designed to 
        increase rates of enrollment in, and successful completion of, 
        adult basic skills and family literacy education programs, for 
        adults enrolled in such activities.
            ``(8) The development and implementation of a system to 
        assist in the transition from adult basic education to 
        postsecondary education.
            ``(9) Activities to promote workplace literacy programs.
            ``(10) Activities to promote and complement local outreach 
        initiatives described in section 242(7).
            ``(11) 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 basic skills and family 
        literacy education programs, including individuals most in need 
        or hardest to serve;
            ``(2) a description of the adult basic skills and family 
        literacy education programs that will be carried out with funds 
        received under this title;
            ``(3) a description of how the eligible agency will 
        evaluate and measure annually the effectiveness and improvement 
        of the adult basic skills and family literacy education 
        programs based on the performance measures described in section 
        212 including--
                    ``(A) how the eligible agency will evaluate and 
                measure annually such effectiveness on a grant-by-grant 
                basis; and
                    ``(B) how the eligible agency--
                            ``(i) will hold eligible providers 
                        accountable regarding the progress of such 
                        providers in improving the academic achievement 
                        of participants in adult education programs 
                        under this title and regarding the core 
                        indicators of performance described in section 
                        212(b)(2)(A); and
                            ``(ii) will use technical assistance, 
                        sanctions, and rewards (including allocation of 
                        grant funds based on performance and 
                        termination of grant funds based on 
                        nonperformance);
            ``(4) a description of the performance measures described 
        in section 212 and how such performance measures have 
        significantly improved adult basic skills and family literacy 
        education programs in the State or outlying area;
            ``(5) an assurance that the eligible agency will, in 
        addition to meeting all of the other requirements of this 
        title, award not less than one grant under this title to an 
        eligible provider that--
                    ``(A) offers flexible schedules and necessary 
                support services (such as child care and 
                transportation) to enable individuals, including 
                individuals with disabilities, or individuals with 
                other special needs, to participate in adult basic 
                skills and family literacy education programs; and
                    ``(B) attempts to coordinate with support services 
                that are not provided under this title prior to using 
                funds for adult basic skills and family literacy 
                education programs provided under this title for 
                support services;
            ``(6) an assurance that the funds received under this title 
        will not be expended for any purpose other than for activities 
        under this title;
            ``(7) a description of how the eligible agency will fund 
        local activities in accordance with the measurable goals 
        described in section 231(d);
            ``(8) an assurance that the eligible agency will expend the 
        funds under this title only in a manner consistent with fiscal 
        requirements in section 241;
            ``(9) a description of the process that will be used for 
        public participation and comment with respect to the State 
        plan, which process--
                    ``(A) shall include consultation with the State 
                workforce investment board, the State board responsible 
                for administering community or technical colleges, the 
                Governor, the State educational agency, the State board 
                or agency responsible for administering block grants 
                for temporary assistance to needy families under title 
                IV of the Social Security Act, the State council on 
                disabilities, the State vocational rehabilitation 
                agency, other State agencies that promote the 
                improvement of adult basic skills and family literacy 
                education programs, and direct providers of such 
                programs; and
                    ``(B) may include consultation with the State 
                agency on higher education, institutions responsible 
                for professional development of adult basic skills and 
                family literacy education programs instructors, 
                representatives of business and industry, refugee 
                assistance programs, and faith-based organizations;
            ``(10) a description of the eligible agency's strategies 
        for serving populations that include, at a minimum--
                    ``(A) low-income individuals;
                    ``(B) individuals with disabilities;
                    ``(C) the unemployed;
                    ``(D) the underemployed; and
                    ``(E) individuals with multiple barriers to 
                educational enhancement, including individuals with 
                limited English proficiency;
            ``(11) a description of how the adult basic skills and 
        family literacy education programs that will be carried out 
        with any funds received under this title will be integrated 
        with other adult education, career development, and employment 
        and training activities in the State or outlying area served by 
        the eligible agency;
            ``(12) a description of the steps the eligible agency will 
        take to ensure direct and equitable access, as required in 
        section 231(c)(1), including--
                    ``(A) how the State will build the capacity of 
                community-based and faith-based organizations to 
                provide adult basic skills and family literacy 
                education programs; and
                    ``(B) how the State will increase the participation 
                of business and industry in adult basic skills and 
                family literacy education programs; 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 of the State plan to the Secretary.
    ``(d) Consultation.--The eligible agency shall--
            ``(1) submit the State plan, and any revisions to the State 
        plan, to the Governor, the chief State school officer, or the 
        State officer responsible for administering community or 
        technical colleges, or outlying area for review and comment; 
        and
            ``(2) ensure that any comments regarding the State plan by 
        the Governor, the chief State school officer, or the State 
        officer responsible for administering community or technical 
        colleges, and any revision to the State plan, are submitted to 
        the Secretary.
    ``(e) Plan Approval.--A State plan submitted to the Secretary shall 
be approved by the Secretary only if the plan is consistent with the 
specific provisions of this title.

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

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

                     ``CHAPTER 3--LOCAL PROVISIONS

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

    ``(a) Grants and Contracts.--From grant funds made available under 
section 211(b), each eligible agency shall award multiyear grants or 
contracts, on a competitive basis, to eligible providers within the 
State or outlying area that meet the conditions and requirements of 
this title to enable the eligible providers to develop, implement, and 
improve adult basic skills and family literacy education programs 
within the State.
    ``(b) Local Activities.--The eligible agency shall require eligible 
providers receiving a grant or contract under subsection (a) to 
establish or operate one or more programs of instruction that provide 
services or instruction in one or more of the following categories:
            ``(1) Adult basic skills and family literacy education 
        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 education programs.
    ``(c) Direct and Equitable Access; Same Process.--Each eligible 
agency receiving funds under this title shall ensure that--
            ``(1) all eligible providers have direct and equitable 
        access to apply for grants or contracts under this section; and
            ``(2) the same grant or contract announcement process and 
        application process is used for all eligible providers in the 
        State or outlying area.
    ``(d) Measurable Goals.--The eligible agency shall require eligible 
providers receiving a grant or contract under subsection (a) to 
demonstrate--
            ``(1) the eligible provider's measurable goals for 
        participant outcomes to be achieved annually on the core 
        indicators of performance and employment performance indicators 
        described in section 212(b)(2);
            ``(2) the past effectiveness of the eligible provider in 
        improving the basic academic skills of adults and, for eligible 
        providers receiving grants in the prior year, the success of 
        the eligible provider receiving funding under this title in 
        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;
            ``(14) whether adult basic skills and family literacy 
        education programs offer rigorous reading, writing, speaking, 
        and math content that are based on scientific research; and
            ``(15) whether applications of technology, and services to 
        be provided by the eligible providers, is 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 basic skills and family 
        literacy education programs; and
            ``(3) each of the demonstrations required by section 
        231(d).

``SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

    ``(a) In General.--Subject to subsection (b), of the amount that is 
made available under this title to an eligible provider--
            ``(1) at least 95 percent shall be expended for carrying 
        out adult basic skills and family literacy education programs; 
        and
            ``(2) the remaining amount shall be used for planning, 
        administration, personnel and professional development, 
        development of measurable goals in reading, writing, speaking, 
        and math, and interagency coordination.
    ``(b) Special Rule.--In cases where the cost limits described in 
subsection (a) are too restrictive to allow for adequate planning, 
administration, personnel development, and interagency coordination, 
the eligible provider may negotiate with the eligible agency in order 
to determine an adequate level of funds to be used for noninstructional 
purposes.

                    ``CHAPTER 4--GENERAL PROVISIONS

``SEC. 241. ADMINISTRATIVE PROVISIONS.

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

``SEC. 242. NATIONAL LEADERSHIP ACTIVITIES.

    ``The Secretary shall establish and carry out a program of national 
leadership activities that may include the following:
            ``(1) Technical assistance, on request, including 
        assistance--
                    ``(A) on requests 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 skills and family 
                literacy education programs;
                    ``(C) on adult education professional development; 
                and
                    ``(D) in using distance learning and improving the 
                application of technology in the classroom.
            ``(2) Providing for the conduct of research on national 
        literacy basic skill acquisition levels 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 skills 
        and family literacy education programs prepares individuals for 
        entry into and success in postsecondary education and 
        employment, and in the case of prison-based services, the 
        effect on recidivism.
            ``(5) Evaluating how different types of providers, 
        including community and faith-based organizations or private 
        for-profit agencies measurably improve the skills of 
        participants in adult basic skills and family 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) Supporting the development of an entity that would 
        produce and distribute technology-based programs and materials 
        for adult basic skills and family literacy education programs 
        using an intercommunication system, as that term is defined in 
        section 397 of the Communications Act of 1934 (47 U.S.C. 397), 
        and expand the effective outreach and use of such programs and 
        materials to adult education eligible providers.
            ``(8) Initiating other activities designed to improve the 
        measurable quality and effectiveness of adult basic skills and 
        family literacy education programs nationwide.''.

                PART B--NATIONAL INSTITUTE FOR LITERACY

SEC. 211. SHORT TITLE; PURPOSE.

    (a) Short Title.--This part may be cited as the ``National 
Institute for Literacy Establishment Act''.
    (b) Purpose.--The purpose of this part is to establish a National 
Institute for Literacy to provide national leadership in promoting 
reading research, reading instruction, and professional development in 
reading based on scientifically based research by--
            (1) disseminating widely information on scientifically 
        based reading research to improve academic achievement for 
        children, youth, and adults;
            (2) identifying and disseminating information about 
        schools, local educational agencies, and State educational 
        agencies that have effectively developed and implemented 
        classroom reading programs that meet the requirements of 
        subpart 1 of part B of title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6361 et seq.), including those 
        State educational agencies, local educational agencies, and 
        schools that are identified as effective through the External 
        Evaluation of Reading First under section 1205 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6365);
            (3) serving as a national resource for information on 
        reading instruction programs that contain the essential 
        components of reading instruction as supported by 
        scientifically based reading research, and that can lead to 
        improved reading outcomes for children, youth, and adults;
            (4) developing print and electronic materials that describe 
        and model the application of scientifically based reading 
        research;
            (5) providing national and regional reading leadership for 
        State and local personnel for the application and 
        implementation of scientifically based reading research;
            (6) coordinating efforts among Federal agencies, especially 
        the Department of Labor, the Department of Health and Human 
        Services, and the National Institute of Child Health and Human 
        Development, that provide reading programs, conduct research, 
        and provide services to recipients of Federal financial 
        assistance under titles I and III of the Elementary and 
        Secondary Education Act of 1965, the Head Start Act, the 
        Individuals with Disabilities Education Act, and the Adult 
        Basic Skills and Family Literacy Education Act, and each Bureau 
        funded school (as defined in title XI of the Education 
        Amendments of 1978 (25 U.S.C. 2001 et seq.)); and
            (7) informing the Congress, Federal departments and 
        agencies, schools of education, and the public of successful 
        local, State, and Federal program activities in reading 
        instruction that are determined to be effective based on the 
        findings of scientifically based reading research.

SEC. 212. ESTABLISHMENT.

    (a) In General.--There is established within the executive branch 
an independent establishment (as defined in title 104 of title 5, 
United States Code) to be known as the ``National Institute for 
Literacy''. The Institute shall be administered, in accordance with 
this part, under the supervision and direction of a Director in 
consultation with the Board, and subject to all fiscal and ethical 
requirements of an executive branch agency.
    (b) Director.--
            (1) Appointment.--The Board (established under section 216 
        of this part), in consultation with the Secretary of Education, 
        shall appoint a Director of the Institute, who has an 
        understanding of, supports, and is familiar with scientifically 
        based reading research, instruction, and professional 
        development applicable to children, youth, and adults.
            (2) Pay.--The Director of the Institute shall receive the 
        rate of basic pay for level IV of the Executive Schedule.
            (3) Term.--The Director of the Institute shall be appointed 
        for an initial term of 3 years and, if approved by the Board, 
        may serve not more than 1 additional term of 3 years.

SEC. 213. ADMINISTRATION.

    (a) In General.--The Institute shall be administered by the 
Director of the Institute in consultation with the Board.
    (b) Authority.--Subject to the general policies, decisions, 
findings, and determinations of the Board, the Director of the 
Institute shall be responsible for administering the Institute. The 
Director may delegate the powers granted under this paragraph to an 
officer, employee, or office of the Institute. The Director shall--
            (1) provide leadership for the Institute, consistent with 
        the purposes defined in section 211;
            (2) appoint and supervise all employees in the Institute, 
        including attorneys, to provide legal aid and service to the 
        Board and the Institute, and to represent the Board and the 
        Institute in any case in court;
            (3) appoint the heads of offices in the Institute with the 
        approval of the Board;
            (4) assign responsibility to carry out the duties of the 
        Institute among officers and employees, and offices of the 
        Institute;
            (5) prepare requests for appropriations for the Institute 
        and submit those requests to the President and the Congress 
        with the prior approval of the Board;
            (6) oversee the expenditure of all funds allocated for the 
        Institute to carry out the purposes under section 211; and
            (7) confer regularly with the Board on matters of policy, 
        personnel, and progress in carrying out the mission of the 
        Institute.
    (c) Agency Designation.--For purposes of section 552b of title 5, 
United States Code, the Institute is deemed to be an agency.
    (d) Budget Requests.--In each annual request for appropriations by 
the President, the Director of the Institute, in consultation with the 
Board, shall submit a budget to carry out the mission of the Institute 
including--
            (1) the amount requested by the Institute in its budgetary 
        presentation to the Office of Management and Budget; and
            (2) an assessment of the budgetary needs of the Institute.
    (e) Budget Transmittal to Congress.--The Institute shall transmit 
to the Congress copies of budget estimates, requests, and information 
(including personnel needs), legislative recommendations, prepared 
testimony for congressional hearings, and comments on legislation.
    (f) Offices.--The Institute shall have offices separate from the 
offices of the Department of Education.
    (g) Administrative Support.--
            (1) In general.--The Secretary of Education shall provide 
        administrative support for the Institute, including the 
        administration of grants, contracts and cooperative agreements, 
        personnel, legal counsel, and payroll after the Office of 
        Management and Budget has approved the Institute's budget.
            (2) Other departments and agencies.--In addition to any 
        support obtained under paragraph (1) from the Secretary of 
        Education, the Institute may obtain administrative support 
        services from other departments and agencies within the 
        executive branch if determined by the Director of the 
        Institute, in consultation with the Board, to be in the best 
        interest of the Institute.

SEC. 214. DUTIES.

    (a) In General.--In order to provide leadership for the improvement 
and expansion of the system for delivery of scientifically based 
reading instructional practices, the Institute shall--
            (1) establish a national electronic database of effective 
        reading programs for children, youth, and adults that include 
        the essential components of reading instruction, and 
        disseminate such information to parents, teachers, State and 
        Federal elected officials, and the public;
            (2) develop print and electronic materials for professional 
        development that provide applications of scientifically based 
        reading research, and instructional practices in reading for 
        children, youth, and adults;
            (3) provide, when requested, policy and technical 
        assistance to the Congress, school Boards, Federal agencies, 
        State departments of education, adult education programs, local 
        school districts, local public and private schools, and schools 
        of education, on scientifically based reading instructional 
        practices including diagnostic and assessment instruments and 
        instructional materials;
            (4) collaborate and support Federal research programs in 
        reading instruction, including, where appropriate, those areas 
        of study addressed by the National Institute of Child Health 
        and Human Development, the Institute for Education Sciences, 
        the National Science Foundation, the Department of Labor, and 
        the National Research Council;
            (5) coordinate with the Department of Education, the 
        Department of Labor, the Department of Health and Human 
        Services, and the National Institute of Child Health and Human 
        Development on all programs that include improving reading 
        instructional practices for children, youth, and adults, and 
        teacher training in reading instructional practices;
            (6) use and support the collection of the best possible 
        information in carrying out this section, and where 
        appropriate, including reviews of research on instruction using 
        the criteria for quality identified by the Institute for 
        Education Sciences; and
            (7) conduct reviews of research, including randomized field 
        trials, on reading programs, and conduct reviews of Federal 
        reading policies and reading program implementation using a 
        board of visitors as described in subchapter 300 of the 
        National Science Foundation Administrative Manual.
    (b) Grants, Contracts, and Cooperative Agreements.--The Institute 
may award grants to, or enter into contracts or cooperative agreements 
with, individuals, public or private institutions, agencies, 
organizations, or other legal entities to carry out the activities of 
the Institute.
    (c) Relation to Other Laws.--The duties and powers of the Institute 
under this part are in addition to the duties and powers of the 
Institute under subparts 1, 2, and 3 of part B of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 1201 et seq.) (commonly 
referred to as Reading First, Early Reading First, and the William F. 
Goodling Even Start Family Literacy Programs, respectively).

SEC. 215. LEADERSHIP IN SCIENTIFICALLY BASED READING INSTRUCTION.

    (a) In General.--The Institute, in consultation with the Board, may 
award fellowships, with such stipends and allowances as the Director of 
the Institute considers necessary, to outstanding individuals who are 
pursuing careers in scientifically based research in reading 
instruction or pre-service or in-service training in reading 
instruction, including teaching children and adults to read.
    (b) Fellowships.--Fellowships awarded under this subsection shall 
be used, under the auspices of the Institute, to engage in research, 
education training, technical assistance, or other activities to 
advance the field of scientifically based reading instruction for 
children, youth, and adults, including the training of volunteers in 
such reading skills instruction.
    (c) Interns and Volunteers.--The Institute, in consultation with 
the Board, may award paid and unpaid internships to individuals seeking 
to assist the Institute in carrying out its mission. Notwithstanding 
section 1342 of title 31, United States Code, the Institute may accept 
and use voluntary and uncompensated services as the Institute deems 
necessary.

SEC. 216. NATIONAL INSTITUTE FOR LITERACY ADVISORY BOARD.

    (a) Establishment.--
            (1) In general.--There shall be a National Institute for 
        Literacy Advisory Board, which shall consist of 10 individuals 
        appointed by the President with the advice and consent of the 
        Senate.
            (2) Composition.--The Board shall be comprised of 
        individuals who are not otherwise officers or employees of the 
        Federal Government and who are knowledgeable about 
        scientifically based reading instruction, and the findings of 
        scientifically based reading research. The members of the Board 
        may include--
                    (A) representatives from teacher training 
                institutions where scientifically based reading 
                instruction is a major component of pre-service 
                training;
                    (B) teachers who have been successful in teaching 
                children to read proficiently;
                    (C) members of the business community who have 
                developed successful employee reading instruction 
                programs;
                    (D) volunteer tutors in reading who are using 
                scientifically based reading instruction;
                    (E) reading researchers who have conducted 
                scientifically based research; and
                    (F) other qualified individuals knowledgeable about 
                scientifically based reading instruction, including 
                adult education.
    (b) Duties.--The Board shall--
            (1) work closely with the Director of the Institute to 
        ensure that the purposes of the Institute under section 211 are 
        carried out effectively;
            (2) approve the annual report to the Congress;
            (3) provide policy guidance and advice to the Director of 
        the Institute in the administration of the Institute; and
            (4) appoint the Director of the Institute, in consultation 
        with the Secretary.
    (c) Federal Advisory Committee Act.--Except as otherwise provided 
in this part, the Board established by this section shall be subject to 
the provisions of the Federal Advisory Committee Act (5 U.S.C. App.).
    (d) Appointments.--
            (1) In general.--Each member of the Board shall be 
        appointed for a term of 3 years, except that the initial terms 
        for members may be 1, 2, or 3 years in order to establish a 
        rotation, in which \1/3\ of the members are selected each year. 
        Any such member may be appointed for not more than 2 
        consecutive terms.
            (2) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office.
    (e) Quorum.--A majority of the members of the Board shall 
constitute a quorum, but a lesser number may hold hearings. Any 
recommendation of the Board may be passed only by a majority of the 
Board members present.
    (f) Election of Officers.--The Chairperson and Vice Chairperson of 
the Board shall be elected by the members of the Board. The term of 
office of the Chairperson and Vice Chairperson shall be 2 years.
    (g) Meetings.--The Board shall meet at the call of the Chairperson, 
or a majority of the members of the Board, but not less than quarterly.

SEC. 217. GIFTS, BEQUESTS, AND DEVISES.

    (a) In General.--The Institute may accept, administer, and use 
gifts or donations of services, money, or property, whether real or 
personal, tangible or intangible.
    (b) Rules.--The Board, in consultation with the Director of the 
Institute, shall establish written rules setting forth the criteria to 
be used by the Institute in determining whether the acceptance of 
contributions of services, money, or property whether real or personal, 
tangible or intangible, would reflect unfavorably upon the ability of 
the Institute or any employee to carry out the responsibilities of the 
Institute or employee, or official duties, in a fair and objective 
manner, or would compromise the integrity or the appearance of the 
integrity of the Institute's programs or any official involved in those 
programs.

SEC. 218. MAILS.

    The Board and the Institute may use the United States mails in the 
same manner and under the same conditions as other departments and 
agencies of the United States.

SEC. 219. APPLICABILITY OF CERTAIN CIVIL SERVICE LAWS.

    The Director of the Institute and the staff of the Institute may be 
appointed without regard to the provisions of title 5, United States 
Code, governing appointments in the competitive service, and may be 
paid without regard to the provisions of chapter 51 and subchapter III 
of chapter 53 of that title relating to classification and General 
Schedule pay rates, except that an individual so appointed may not 
receive pay in excess of the annual rate of basic pay payable for level 
IV of the Executive Schedule.

SEC. 220. EXPERTS AND CONSULTANTS.

    The Institute may procure temporary and intermittent services under 
section 3109(b) of title 5, United States Code.

SEC. 221. REPORT.

    (a) In General.--The Institute shall submit a biennial report to 
the Committee on Education and the Workforce of the House of 
Representatives and the Committee on Labor and Human Resources of the 
Senate. Each report submitted under this section shall include--
            (1) a comprehensive and detailed description of the 
        Institute's operations, activities, financial condition, and 
        accomplishments in carrying out the purposes of the Institute 
        as specified in section 211, for the period covered by the 
        report; and
            (2) a summary description of how the Institute will advance 
        the purposes of the Institute for the next biennium.
    (b) First Report.--The Institute shall submit a report under this 
section not later than 1 year after the date of enactment of this part.

SEC. 222. DEFINITIONS.

    For purposes of this part--
            (1) the term ``Board'' means the National Institute for 
        Literacy Advisory Board;
            (2) the term ``Institute'' means the National Institute for 
        Literacy; and
            (3) the terms ``reading'', ``scientifically based reading 
        research'', and ``essential components of reading instruction'' 
        have the meanings given those terms in section 1208 of part B 
        of title I of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 6368).

SEC. 223. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to administer and carry out 
this part $6,700,000 for fiscal year 2004 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

SEC. 224. RESERVATION.

    From amounts appropriated to the Institute, the Director of the 
Institute may use not more than 5 percent of such amounts for 
information dissemination under section 1207 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6367).

SEC. 225. AUTHORITY TO PUBLISH.

    The Institute, including the Board, may prepare, publish, and 
present (including through oral presentations) such research-based 
information and research reports as needed to carry out the purposes 
and mission of the Institute.

             TITLE III--AMENDMENTS TO THE WAGNER-PEYSER ACT

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

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

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

    ``(a) System Content.--
            ``(1) In general.--The Secretary of Labor, in accordance 
        with the provisions of this section, shall oversee the 
        development, maintenance, and continuous improvement of a 
        nationwide workforce and labor market information system that 
        includes--
                    ``(A) statistical data from cooperative statistical 
                survey and projection programs and data from 
                administrative reporting systems that, taken together, 
                enumerate, estimate, and project employment 
                opportunities and conditions at national, State, and 
                local levels in a timely manner, including statistics 
                on--
                            ``(i) employment and unemployment status of 
                        national, State, and local populations, 
                        including self-employed, part-time, and 
                        seasonal workers;
                            ``(ii) industrial distribution of 
                        occupations, as well as current and projected 
                        employment opportunities, wages, benefits 
                        (where data is available), and skill trends by 
                        occupation and industry, with particular 
                        attention paid to State and local conditions;
                            ``(iii) the incidence of, industrial and 
                        geographical location of, and number of workers 
                        displaced by, permanent layoffs and plant 
                        closings; and
                            ``(iv) employment and earnings information 
                        maintained in a longitudinal manner to be used 
                        for research and program evaluation;
                    ``(B) information on State and local employment 
                opportunities, and other appropriate statistical data 
                related to labor market dynamics, which--
                            ``(i) shall be current and comprehensive;
                            ``(ii) shall meet the needs identified 
                        through the consultations described in 
                        subparagraphs (A) and (B) of subsection (e)(2); 
                        and
                            ``(iii) shall meet the needs for the 
                        information identified in section 134(d);
                    ``(C) technical standards (which the Secretary 
                shall publish annually) for data and information 
                described in subparagraphs (A) and (B) that, at a 
                minimum, meet the criteria of chapter 35 of title 44, 
                United States Code;
                    ``(D) procedures to ensure compatibility and 
                additivity of the data and information described in 
                subparagraphs (A) and (B) from national, State, and 
                local levels;
                    ``(E) procedures to support standardization and 
                aggregation of data from administrative reporting 
                systems described in subparagraph (A) of employment-
                related programs;
                    ``(F) analysis of data and information described in 
                subparagraphs (A) and (B) for uses such as--
                            ``(i) national, State, and local 
                        policymaking;
                            ``(ii) implementation of Federal policies 
                        (including allocation formulas);
                            ``(iii) program planning and evaluation; 
                        and
                            ``(iv) researching labor market dynamics;
                    ``(G) wide dissemination of such data, information, 
                and analysis in a user-friendly manner and voluntary 
                technical standards for dissemination mechanisms; and
                    ``(H) programs of--
                            ``(i) training for effective data 
                        dissemination;
                            ``(ii) research and demonstration; and
                            ``(iii) programs and technical assistance.
            ``(2) Information to be confidential.--
                    ``(A) In general.--No officer or employee of the 
                Federal Government or agent of the Federal Government 
                may--
                            ``(i) use any submission that is furnished 
                        for exclusively statistical purposes under the 
                        provisions of this section for any purpose 
                        other than the statistical purposes for which 
                        the submission is furnished;
                            ``(ii) make any publication or media 
                        transmittal of the data contained in the 
                        submission described in clause (i) that permits 
                        information concerning individual subjects to 
                        be reasonably inferred by either direct or 
                        indirect means; or
                            ``(iii) permit anyone other than a sworn 
                        officer, employee, or agent of any Federal 
                        department or agency, or a contractor 
                        (including an employee of a contractor) of such 
                        department or agency, to examine an individual 
                        submission described in clause (i);
                without the consent of the individual, agency, or other 
                person who is the subject of the submission or provides 
                that submission.
                    ``(B) Immunity from legal process.--Any submission 
                (including any data derived from the submission) that 
                is collected and retained by a Federal department or 
                agency, or an officer, employee, agent, or contractor 
                of such a department or agency, for exclusively 
                statistical purposes under this section shall be immune 
                from the legal process and shall not, without the 
                consent of the individual, agency, or other person who 
                is the subject of the submission or provides that 
                submission, be admitted as evidence or used for any 
                purpose in any action, suit, or other judicial or 
                administrative proceeding.
                    ``(C) Rule of construction.--Nothing in this 
                section shall be construed to provide immunity from the 
                legal process for such submission (including any data 
                derived from the submission) if the submission is in 
                the possession of any person, agency, or entity other 
                than the Federal Government or an officer, employee, 
                agent, or contractor of the Federal Government, or if 
                the submission is independently collected, retained, or 
                produced for purposes other than the purposes of this 
                Act.
    ``(b) System Responsibilities.--
            ``(1) In general.--The workforce and labor market 
        information system described in subsection (a) shall be 
        planned, administered, overseen, and evaluated through a 
        cooperative governance structure involving the Federal 
        Government and States.
            ``(2) Duties.--The Secretary, with respect to data 
        collection, analysis, and dissemination of labor employment 
        statistics for the system, shall carry out the following 
        duties:
                    ``(A) Assign responsibilities within the Department 
                of Labor for elements of the workforce and labor market 
                information system described in subsection (a) to 
                ensure that all statistical and administrative data 
                collected is consistent with appropriate Bureau of 
                Labor Statistics standards and definitions.
                    ``(B) Actively seek the cooperation of other 
                Federal agencies to establish and maintain mechanisms 
                for ensuring complementarity and nonduplication in the 
                development and operation of statistical and 
                administrative data collection activities.
                    ``(C) Eliminate gaps and duplication in statistical 
                undertakings, with the systemization of wage surveys as 
                an early priority.
                    ``(D) In collaboration with the Bureau of Labor 
                Statistics and States, develop and maintain the 
                elements of the workforce and labor market information 
                system described in subsection (a), including the 
                development of consistent procedures and definitions 
                for use by the States in collecting the data and 
                information described in subparagraphs (A) and (B) of 
                subsection (a)(1).
                    ``(E) Establish procedures for the system to ensure 
                that--
                            ``(i) such data and information are timely;
                            ``(ii) paperwork and reporting for the 
                        system are reduced to a minimum; and
                            ``(iii) States and localities are fully 
                        involved in the development and continuous 
                        improvement of the system at all levels, 
                        including ensuring the provision, to such 
                        States and localities, of budget information 
                        necessary for carrying out their 
                        responsibilities under subsection (e).
    ``(c) National Electronic Tools To Provide Services.--The Secretary 
is authorized to assist in the development of national electronic tools 
that may be used to facilitate the delivery of core services described 
in section 134 and to provide workforce information to individuals 
through the one-stop delivery systems descried in section 121 and 
through other appropriate delivery systems.
    ``(d) Coordination With the States.--
            ``(1) In general.--The Secretary, working through the 
        Bureau of Labor Statistics and the Employment and Training 
        Administration, shall regularly consult with representatives of 
        State agencies carrying out workforce information activities 
        regarding strategies for improving the workforce and labor 
        market information system.
            ``(2) Formal consultations.--At least twice each year, the 
        Secretary, working through the Bureau of Labor Statistics, 
        shall conduct formal consultations regarding programs carried 
        out by the Bureau of Labor Statistics with representatives of 
        each of the 10 Federal regions of the Department of Labor, 
        elected from the State directors affiliated with State agencies 
        that perform the duties described in subsection (e)(2).
    ``(e) State Responsibilities.--
            ``(1) Designation of state agency.--In order to receive 
        Federal financial assistance under this section, the Governor 
        of a State shall--
                    ``(A) designate a single State agency to be 
                responsible for the management of the portions of the 
                workforce and labor market information system described 
                in subsection (a) that comprise a statewide workforce 
                and labor market information system and for the State's 
                participation in the development of the annual plan; 
                and
                    ``(B) establish a process for the oversight of such 
                system.
            ``(2) Duties.--In order to receive Federal financial 
        assistance under this section, the State agency shall--
                    ``(A) consult with State and local employers, 
                participants, and local workforce investment boards 
                about the labor market relevance of the data to be 
                collected and disseminated through the statewide 
                workforce and labor market information system;
                    ``(B) consult with State educational agencies and 
                local educational agencies concerning the provision of 
                employment statistics in order to meet the needs of 
                secondary school and postsecondary school students who 
                seek such information;
                    ``(C) collect and disseminate for the system, on 
                behalf of the State and localities in the State, the 
                information and data described in subparagraphs (A) and 
                (B) of subsection (a)(1);
                    ``(D) maintain and continuously improve the 
                statewide workforce and labor market information system 
                in accordance with this section;
                    ``(E) perform contract and grant responsibilities 
                for data collection, analysis, and dissemination for 
                such system;
                    ``(F) conduct such other data collection, analysis, 
                and dissemination activities as will ensure an 
                effective statewide workforce and labor market 
                information system;
                    ``(G) actively seek the participation of other 
                State and local agencies in data collection, analysis, 
                and dissemination activities in order to ensure 
                complementarity, compatibility, and usefulness of data;
                    ``(H) participate in the development of the annual 
                plan described in subsection (c); and
                    ``(I) utilize the quarterly records described in 
                section 136(f)(2) of the Workforce Investment Act of 
                1998 to assist the State and other States in measuring 
                State progress on State performance measures.
            ``(3) Rule of construction.--Nothing in this section shall 
        be construed as limiting the ability of a State agency to 
        conduct additional data collection, analysis, and dissemination 
        activities with State funds or with Federal funds from sources 
        other than this section.
    ``(f) Nonduplication Requirement.--None of the functions and 
activities carried out pursuant to this section shall duplicate the 
functions and activities carried out under the Carl D. Perkins 
Vocational and Applied Technology Education Act (20 U.S.C. 2301 et 
seq.).
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the fiscal years 2004 through 2009.
    ``(h) Definition.--In this section, the term `local area' means the 
smallest geographical area for which data can be produced with 
statistical reliability.''.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

SEC. 401. 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 by and with the advice and 
        consent of the Senate'' and inserting ``Secretary, except that 
        the current Commissioner appointed under the authority existing 
        on the day prior to the date of enactment of this Act may 
        continue to serve in the former capacity''; and
            (3) by striking ``, and the Commissioner shall be the 
        principal officer,''.

SEC. 403. DIRECTOR.

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

SEC. 404. STATE GOALS.

    Section 101(a) of the Rehabilitation Act of 1973 (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 after clause (i) the following:
                            ``(ii) include an assessment of the 
                        transition services provided under this Act, 
                        and coordinated with transition services under 
                        the Individuals with Disabilities Education 
                        Act, as to those services meeting the needs of 
                        individuals with disabilities.''; and
                    (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)(1)(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(a) by striking ``fiscal years 1999 
        through 2003'' each place it appears and inserting ``fiscal 
        years 2004 through 2009'';
            (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''.

SEC. 406. HELEN KELLER NATIONAL CENTER ACT.

    (a) General Authorization of Appropriations.--The first sentence of 
section 205(a) of the Helen Keller National Center Act (29 U.S.C. 
1904(a)) is amended by striking ``1999 through 2003'' and inserting 
``2004 through 2009''.
    (b) Helen Keller National Center Federal Endowment Fund.--The first 
sentence of section 208(h) of such Act (29 U.S.C. 1907(h)) is amended 
by striking ``1999 through 2003'' and inserting ``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.




                                                  Union Calendar No. 46

108th CONGRESS

  1st Session

                               H. R. 1261

                          [Report No. 108-82]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                              May 1, 2003

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed