[Congressional Record (Bound Edition), Volume 149 (2003), Part 16]
[Senate]
[Pages 22363-22405]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REED:
  S. 1624. A bill to amend the Magnuson-Stevens Fishery Conservation 
and Management Act to add Rhode Island to the Mid-Atlantic Fishery 
Management Council; to the Committee on Commerce, Science, and 
Transportation.
  Mr. REED. Mr. President, I rise today to introduce the Rhode Island 
Fishermen's Fairness Act of 2003. This legislation would address a 
serious flaw in our Nation's regional fisheries management system by 
adding Rhode Island to the Mid-Atlantic Fishery Management Council 
(MAFMC), which currently consists of representatives from New York, New 
Jersey, Delaware, Pennsylvania, Maryland, Virginia, and North Carolina.
  The MAFMC manages the following 13 species, all of which are landed 
in Rhode Island: Illex squid, loligo squid, Atlantic mackerel, black 
sea bass, bluefish, butterfish, monkfish, scup, spiny dogfish, summer 
flounder, surfclam, ocean quahog, and tilefish.
  In 2001, the most recent year for which final data are available, 
Rhode Island fishermen brought in over 21 percent of MAFMC landings by 
weight--more than any of the MAFMC member States except New Jersey, 
which is responsible for about 56 percent of total MAFMC landings. In 
fact, with the exception of New Jersey, Rhode Island's total 2001 MAFMC 
landings, 44.1 million pounds, nearly equaled those of all other MAFMC 
member States combined, 45.9 million pounds.
  If Rhode Island fishermen are responsible for a large percentage of 
overall MAFMC landings, these species make up an even larger proportion 
of landings within Rhode Island every year. Between 1995 and 2002, 
MAFMC species represented between 29 percent and 58 percent of all 
finfish landed in Rhode Island annually, for an average of 43 percent 
of total landings by weight. In eight of the years between 1990 and 
2002, squid, Illex and loligo, was the number one finfish landed in 
Rhode Island, with a value of between $13 million and $20 million 
annually.
  Yet Rhode Island has no voice in the management of these species.
  Following council tradition and Federal fisheries law, the Rhode 
Island Fishermen's Fairness Act would create two seats on the MAFMC for 
Rhode Island: one seat nominated by the Governor of Rhode Island and 
appointed by the Secretary of Commerce, and a second seat filled by 
Rhode Island's principal State official with marine fishery management 
responsibility. The MAFMC would increase in size from 21 voting members 
to 23.
  There is a precedent for this proposed legislation. In 1996, North 
Carolina's representatives in Congress succeeded in adding that State 
to the MAFMC through an amendment to the Sustainable Fisheries Act. 
Like Rhode Island, a significant proportion of North Carolina's landed 
fish species were managed by the MAFMC, yet the State had no vote on 
the council. Today, Rhode Island's share of total landings for species 
managed by the MAFMC is more than six times greater than that of North 
Carolina.
  I look forward to working with my colleagues to restore a measure of 
equity to the fisheries management process by passing the Rhode Island 
Fishermen's Fairness Act. I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1624

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

     SECTION 1. ADDITION OF RHODE ISLAND TO THE MID-ATLANTIC 
                   FISHERY MANAGEMENT COUNCIL.

       Section 302(a)(1)(B) of the Magnuson-Stevens Fishery 
     Conservation and Management Act (16 U.S.C. 1852(a)(1)(B)) is 
     amended--
       (1) by inserting ``Rhode Island,'' after ``Virginia,'';
       (2) by inserting ``Rhode Island,'' after ``except North 
     Carolina,'';
       (3) by striking ``21'' and inserting ``23''; and
       (4) by striking ``13'' and inserting ``14''.
                                 ______
                                 
      By Mr. ALLARD:
  S. 1625. To amend the Internal Revenue Code of 1986 to allow small 
business employers a credit against income tax for certain expenses for 
long-term training of employees in highly skilled small business 
trades; to the Committee on Finance.
  Mr. ALLARD. Mr. President, it gives me great pleasure to introduce 
today a bill to provide a tax credit for apprenticeship training 
programs for various construction trades recognized by the Bureau of 
Labor Statistics (BLS), including masonry, electrical contract work, 
plumbing and heating and a host of other important vocations.
  There are several reasons why I believe this legislation is necessary 
for apprenticeship training in these trades. First and foremost, these 
are highly skilled trades requiring many years of training. Second, 
there is a significant shortage of workers in these trades; in fact it 
is my understanding that many contractors often have to look outside 
the country to find a craftsman trained in one of these particular 
fields. Third, the average age of some of the workers in these crafts 
is over 50 and we must make every effort to ensure that we retain and 
recruit the most capable people in these jobs. And finally, many of 
these industries are very capital intensive and it makes sense to me to 
offer small businesses a short term tax credit to encourage 
productivity and stimulate economic growth and job creation.
  During the last Congress a similar bill was introduced in the House 
of Representatives by Congressman Foley of Florida. Regrettably the 
bill was not met with a great deal of enthusiasm, primarily due to the 
price tag attached to it. The legislation I am introducing, the 
Apprenticeship Training and Education Act of 2003, has been modified to 
address budgetary concerns as well as the concerns of those in some of 
the building trades that the apprenticeship training programs were 
indeed legitimate ones that would ultimately produce certified 
craftsmen. I greatly appreciate the assistance of the Mason Contractors 
Association of America and the Independent Electrical Contractors in 
crafting a bill that is fiscally responsible and credible.
  I believe this tax credit will go a long way toward encouraging 
companies with a certified apprenticeship program to hire and train new 
workers. As the population of these workers continues to age and 
decline, it is absolutely essential that we look for ways to attract 
more, younger workers to what I believe to be excellent, high-paying 
and high skilled jobs in these construction trades.
  Under my bill, a tax credit of up to $10,000 per year for the first 2 
years of a 4-year program would be provided and companies could hire 
three new apprentices each year. The normal business deduction taken 
for this expense would be offset by the amount of the tax credit. The 
bill also specifically targets trades in the construction industry 
recognized by the BLS and only those programs certified by a State's or 
the Federal Department of Labor would qualify for the credit.
  In my view there are many companies across the country that would 
benefit tremendously from this tax credit.

[[Page 22364]]

I commend this legislation to my colleagues and urge them to cosponsor 
it with me. These are jobs and trades to be proud of and I encourage 
other Members of this body to promote the skills and education 
necessary to keep them viable in the United States.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1625

       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 ``Apprenticeship, Training, 
     and Employment Act of 2003''.

     SEC. 2. CREDIT FOR EXPENSES FOR LONG-TERM TRAINING OF 
                   EMPLOYEES IN HIGHLY SKILLED SMALL BUSINESS 
                   TRADES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45G. EXPENSES FOR LONG-TERM TRAINING OF EMPLOYEES IN 
                   HIGHLY SKILLED SMALL BUSINESS TRADES.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a small business employer, the highly skilled trades 
     training credit determined under this section for the taxable 
     year is $10,000 for each employee (not to exceed 3 employees) 
     having a qualified training year ending with or within such 
     taxable year (whether or not such employee is an employee of 
     the taxpayer as of the close of such taxable year).
       ``(b) Definitions.--For purposes of this section--
       ``(1) Small business employer.--
       ``(A) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     qualifies during such taxable year as a specialty trade 
     contractor under subsector 238 of sector 23 contained in the 
     table under section 121.201 of title 13, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(B) Controlled groups.--For purposes of subparagraph (A), 
     all persons treated as a single employer under subsection 
     (b), (c), (m), or (o) of section 414 shall be treated as a 
     single employer.
       ``(2) Qualified training year.--
       ``(A) In general.--The term `qualified training year' means 
     each year during the training period in which the employee 
     received at least 1,500 hours of training (including on-the-
     job training and training at multi-employer training 
     facilities) from the taxpayer (or any predecessor) under a 
     qualified training program as an apprentice in any highly 
     skilled trade.
       ``(B) Highly skilled trades.--For purposes of subparagraph 
     (A), the term `highly skilled trades' means any specialty 
     trade specified under subsector 238 of sector 23 contained in 
     the table under section 121.201 of title 13, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section. Such term shall not include any trade if the 
     customary apprenticeship period for such trade is less than 2 
     years.
       ``(C) Qualified training program.--
       ``(i) In general.--The term `qualified training program' 
     means a written plan of study and training for individuals 
     in, or entering into, highly skilled trades.
       ``(ii) Description of programs.--A plan under clause (i) 
     must be a program which meets the requirements of clause 
     (iii) and is either--

       ``(I) an apprenticeship program registered and certified 
     with the Secretary of Labor under section 1 of the National 
     Apprenticeship Act (29 U.S.C. 50), or
       ``(II) a program licensed, registered, or certified by the 
     workforce investment board or apprenticeship agency or 
     council of a State or administered in compliance with 
     apprenticeship laws of a State.

       ``(iii) Requirements.--A program meets the requirements of 
     this clause if such program--

       ``(I) is accessible to individuals without discrimination 
     on the basis of race, sex, color, religion, or national 
     origin,
       ``(II) provides an overview of the trade, including the 
     history and modern developments in such trade,
       ``(III) provides related instruction of the fundamental, 
     intermediate, and advanced skills, techniques, and materials 
     of the trade,
       ``(IV) provides training in math, measurement, and 
     blueprint reading skills, if such skills are required in the 
     trade,
       ``(V) provides training on trade-specific tools and 
     equipment,
       ``(VI) provides trade specific safety and health training,
       ``(VII) provides on-the-job training which allows 
     performance of work under close supervision of an instructor 
     or skilled worker, and
       ``(VIII) provides periodic review and evaluation of 
     participants to demonstrate proficiency in skills, including 
     the use of tests and assessment of individual and group 
     projects.

       ``(3) Training period.--The term `training period' means, 
     with respect to an employee, the period--
       ``(A) beginning on the date that the employee begins 
     employment with the taxpayer as an apprentice in the highly 
     skilled trade, and
       ``(B) ending on the earlier of--
       ``(i) the date that such apprenticeship with the employer 
     ends, or
       ``(ii) the date which is 2 years after the date referred to 
     in subparagraph (A).
       ``(c) Coordination With Other Credits.--The amount of 
     credit otherwise allowable under sections 51(a) and 1396(a) 
     with respect to any employee shall be reduced by the credit 
     allowed by this section with respect to such employee.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 of such Code is amended by 
     striking ``plus'' at the end of paragraph (14), by striking 
     the period at the end of paragraph (15) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(16) in the case of a small business employer (as defined 
     in section 45G(b)), the highly skilled trades training credit 
     determined under section 45G(a).''.
       (c) Denial of Double Benefit.--Section 280C of such Code is 
     amended by adding at the end the following new subsection:
       ``(d) Credit for Training Expenses for Employees in Highly 
     Skilled Small Business Trades.--No deduction shall be allowed 
     for that portion of the expenses otherwise allowable as a 
     deduction for the taxable year which is equal to the amount 
     of the credit determined for the taxable year under section 
     45G(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of such Code is 
     amended by adding at the end the following new item:

``Sec. 45G. Expenses for long-term training of employees in highly 
              skilled small business trades.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to expenses paid or incurred in the taxable years 
     ending after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. ENZI (for himself, Mr. Kennedy, Mr. Gregg. and Mrs. 
        Murray):
  S. 1627. A bill to reauthorize the Workforce Investment Act of 1998, 
and for other purposes; to the Committee on Health, Education, Labor, 
and Pensions.
  Mr. ENZI. Mr. President, as I consulted the morning weather reports, 
the thought occurred to me that today's economic forecast sounds a lot 
like the weather forecast. There is good reason to believe dramatic 
change is on the way. Yet, unlike the weather, how dramatic the 
economic change will be and how prepared we will be for it is in our 
hands. While we can't do anything about the weather, we can do 
something about helping America's workers get back to work.
  We have already taken action to lay the groundwork for our economic 
recovery. We have ensured the presence of more capital in our economy 
which will lead to the creation of more jobs for our people. We have 
also begun to deal with the changing face of our Nation's economy. 
Because the kinds of jobs that will be available in the days to come 
will be different from those that were highly valued just months ago, 
we need to ensure that those who are looking for jobs find them. To do 
that we must ensure they have the training they will need for these new 
positions. We must also bring workforce supply and demand together to 
ensure that our businesses have the skilled employees they need to 
compete in a more global economy.
  Workforce development is a powerful economic development tool. In 
these challenging times, the reauthorization of the Workforce 
Investment Act will give us an opportunity to improve the lives of 
millions of our workers, and increase the strength of our businesses 
and communities.
  Legislation I am introducing today, the Workforce Investment Act 
Amendments of 2003, along with my colleagues Senator Kennedy, Senator 
Gregg and Senator Murray, will build upon the success of the Workforce 
Investment Act while addressing its shortcomings.
  In 1998 the Workforce Investment Act was enacted to create a 
streamlined job training and employment system that would be responsive 
to the needs of employers and workers. The system may be fairly new, 
but we've already

[[Page 22365]]

learned a great deal about its strengths and weaknesses. These lessons 
reinforce what I learned as a small business owner in Wyoming: real 
opportunity in America comes from the small business sector; economic 
development and workforce development go hand in hand; rural areas face 
unique workforce development challenges; Washington cannot--and should 
not--determine state, local and individual workforce needs; and overly 
burdensome administrative requirements divert resources from serving 
customers.
  Prior to coming to the Senate, my wife and I owned a small chain of 
shoe stores. We were not shoe salesmen, we were shoe fitters. There is 
a big difference. Shoe fitters listen to their customers and then meet 
their need for footwear with something comfortable to wear. Some people 
may be born salesmen, but they have to be trained to be shoe fitters. 
We had a series of courses we put our employees through. Few people are 
aware that slight changes can be made in a shoe to make it especially 
comfortable as well as useful and attractive. They aren't aware of the 
possibilities because they haven't been coming to see shoe fitters--
they've been dealing with salesmen.
  We taught listening, needs questioning, and technical fitting. Any 
staff person could advance through our training and begin filling foot 
doctor's prescriptions. The value of the training was that it made our 
stores special. We made sure our customers received the help they 
needed--even though they didn't know to ask for it--because they didn't 
know it was available.
  Along the way we got to see some very special people achieve. One 
young returning Vietnam vet became a store manager, then bought that 
store--and later--bought a second store from us. Now he owns his own 
building and is also in the motel business. Bill Schepeler of Miles 
City, MT has and is playing a role in building three communities. I 
also consider him to be one of my good friends. He went through a 
workforce training program that we had approved in conjunction with the 
federal government.
  My wife has also served on several boards that dealt with training 
and jobs and is currently on the Advisory Committee On Apprenticeship 
of the Department of Labor. She and I know that real opportunity in 
America comes from the small business sector where the American dream 
can still happen.
  This bipartisan legislation I am introducing today wil help keep the 
American dream alive for millions of American workers. It will provide 
workers with the training they need to find new or better jobs.
  Our bill improves upon the existing one-stop career center delivery 
system to ensure that it can respond quickly and effectively to the 
changing needs of employers and workers in the new economy and address 
the needs of hard-to-serve populations. The bill also better connects 
the job training system with the private sector and with post-secondary 
education and training, social services, and economic development 
systems. Doing so will prepare the 21st century workforce for career 
opportunities and skills in high-growing sectors. Our bill removes 
barriers in the laws that have discouraged business involvement in 
workforce training. As a result, job training and employment services 
will be more demand-driven and responsive to the needs of employers, 
both large and small.
  One-stop career centers are the focal point of WIA's job training and 
employment system. However, distance can create a barrier to delivering 
job training and employment services in many rural and frontier areas, 
like Wyoming. A job seeker or employer in Dubois, WY has to travel 150 
miles round trip to get to the nearest one-stop center in Lander. It 
isn't hard to understand the impact that traveling distances like that 
can have on a trainee or business owner. If you live in a big city--
there's probably a facility just down the road--or a short bus ride 
downtown. There is an answer to that problem--technology can 
effectively remove the barrier created by distance. This legislation 
will leverage technology to improve access to WIA services throughout 
each state, including rural areas.
  Some states and localities have found creative ways to overcome the 
challenges imposed by current law. Wyoming has done a magnificent job 
with the resources they have been allotted, and I commend their 
ingenuity. With this legislation, we will give Wyoming and the other 
states and localities the tools they need to help the unemployed or 
underemployed.
  I want to thank my colleagues on the HELP Committee for all their 
work on this bipartisan Workforce Amendment Act. I also want to thank 
the Department of Labor for their assistance. I look forward to working 
with my colleagues and the administration to expeditiously address 
outstanding issues and enact this vital legislation. A demand-driven, 
flexible, and accountable system that works in all areas of the country 
in all economic times is what we can achieve through the 
reauthorization of the Workforce Investment Act.
  We can't do anything to change the path of Hurricane Isabel. However, 
we can do something to put our workers on the path to new and better 
jobs. In fact, this bill means more than just jobs--it means good, 
solid careers for the workers of this country.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1627

       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 Investment Act 
     Amendments of 2003''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of 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

                        Subtitle A--Definitions

Sec. 101. Definitions.

      Subtitle B--Statewide and Local Workforce Investment Systems

Sec. 111. Purpose.
Sec. 112. State workforce investment boards.
Sec. 113. State plan.
Sec. 114. Local workforce investment areas.
Sec. 115. Local workforce investment boards.
Sec. 116. Local plan.
Sec. 117. Establishment of one-stop delivery systems.
Sec. 118. Eligible providers of training services.
Sec. 119. Eligible providers of youth activities.
Sec. 120. Youth activities.
Sec. 121. Adult and dislocated worker employment and training 
              activities.
Sec. 122. Performance accountability system.
Sec. 123. Authorization of appropriations.

                         Subtitle C--Job Corps

Sec. 131. Job Corps.

                     Subtitle D--National Programs

Sec. 141. Native American programs.
Sec. 142. Migrant and seasonal farmworker programs.
Sec. 143. Veterans' workforce investment programs.
Sec. 144. Youth challenge grants.
Sec. 145. Technical assistance.
Sec. 146. Demonstration, pilot, multiservice, research, and multistate 
              projects.
Sec. 147. National dislocated worker grants.
Sec. 148. Authorization of appropriations for national activities.

                       Subtitle E--Administration

Sec. 151. Requirements and restrictions.
Sec. 152. Cost principles.
Sec. 153. Reports.
Sec. 154. Administrative provisions.
Sec. 155. Use of certain real property.

  TITLE II--AMENDMENTS TO THE ADULT EDUCATION AND FAMILY LITERACY ACT

Sec. 201. Short title; purpose.
Sec. 202. Definitions.
Sec. 203. Authorization of appropriations.
Sec. 204. Reservation of funds; grants to eligible agencies; 
              allotments.
Sec. 205. Performance accountability system.
Sec. 206. State administration.
Sec. 207. State distribution of funds; matching requirement.
Sec. 208. State leadership activities.
Sec. 209. State plan.
Sec. 210. Programs for corrections education and other 
              institutionalized individuals.

[[Page 22366]]

Sec. 211. Grants and contracts for eligible providers.
Sec. 212. Local application.
Sec. 213. Local administrative cost limits.
Sec. 214. Administrative provisions.
Sec. 215. National Institute for Literacy.
Sec. 216. National leadership activities.
Sec. 217. Integrated English literacy and civics education.
Sec. 218. Transition.

            TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW

Sec. 301. Wagner-Peyser Act.

                TITLE IV--REHABILITATION ACT AMENDMENTS

Sec. 401. Short title.
Sec. 402. Technical amendments to table of contents.
Sec. 403. Purpose.
Sec. 404. Definitions.
Sec. 405. Administration of the Act.
Sec. 406. Carryover.

             Subtitle A--Vocational Rehabilitation Services

Sec. 411. Declaration of policy; authorization of appropriations.
Sec. 412. State plans.
Sec. 413. Eligibility and individualized plan for employment.
Sec. 414. Vocational rehabilitation services.
Sec. 415. State rehabilitation council.
Sec. 416. Evaluation standards and performance indicators.
Sec. 417. State allotments.
Sec. 418. Client assistance program.
Sec. 419. Incentive grants.
Sec. 420. Vocational rehabilitation services grants.
Sec. 421. GAO studies.

                   Subtitle B--Research and Training

Sec. 431. Authorization of appropriations.
Sec. 432. National Institute on Disability and Rehabilitation Research.
Sec. 433. Research and other covered activities.
Sec. 434. Rehabilitation research advisory council.

     Subtitle C--Professional Development and Special Projects and 
                             Demonstrations

Sec. 441. Training.
Sec. 442. Demonstration and training programs.
Sec. 443. Migrant and seasonal farmworkers.
Sec. 444. Recreational programs.

               Subtitle D--National Council on Disability

Sec. 451. Authorization of appropriations.

                    Subtitle E--Rights and Advocacy

Sec. 461. Architectural and transportation barriers compliance board.
Sec. 462. Protection and advocacy of individual rights.

 Subtitle F--Employment Opportunities for Individuals With Disabilities

Sec. 471. Projects with industry authorization of appropriations.
Sec. 472. Services for individuals with significant disabilities 
              authorization of appropriations.

  Subtitle G--Independent Living Services and Centers for Independent 
                                 Living

Sec. 481. State plan.
Sec. 482. Statewide independent living council.
Sec. 483. Independent living services authorization of appropriations.
Sec. 484. Program authorization.
Sec. 485. Grants to centers for independent living in States in which 
              Federal funding exceeds State funding.
Sec. 486. Grants to centers for independent living in States in which 
              State funding equals or exceeds Federal funding.
Sec. 487. Standards and assurances for centers for independent living.
Sec. 488. Centers for independent living authorization of 
              appropriations.
Sec. 489. Independent living services for older individuals who are 
              blind.
Sec. 490. Program of grants.
Sec. 491. Independent living services for older individuals who are 
              blind authorization of appropriations.

                       Subtitle H--Miscellaneous

Sec. 495. 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 (29 U.S.C. 2801 et seq.).

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

                        Subtitle A--Definitions

     SEC. 101. DEFINITIONS.

       Section 101 (29 U.S.C. 2801) is amended--
       (1) by striking paragraph (24);
       (2) by redesignating paragraphs (1) through (4), (5) 
     through (16), (17), (18) through (23), (25) through (41), and 
     (42) through (53) as paragraphs (2) through (5), (7) through 
     (18), (20), (23) through (28), (29) through (45), and (47) 
     through (58), respectively;
       (3) by inserting before paragraph (3) (as redesignated by 
     paragraph (2)) the following:
       ``(1) Accrued expenditures.--The term `accrued 
     expenditures' means charges incurred by recipients of funds 
     under this title for a given period requiring the provision 
     of funds for--
       ``(A) goods or other tangible property received;
       ``(B) services performed by employees, contractors, 
     subgrantees, subcontractors, and other payees; and
       ``(C) other amounts becoming owed under programs assisted 
     under this title for which no current services or performance 
     is required, such as annuities, insurance claims, and other 
     benefit payments.
       (4) in paragraph (2) (as redesignated by paragraph (2)), by 
     striking ``Except in sections 127 and 132,'' and inserting 
     ``Except in section 132,'';
       (5) by inserting after paragraph (5) (as redesignated by 
     paragraph (2)) the following:
       ``(6) Business intermediary.--The term `business 
     intermediary' means an entity that brings together various 
     stakeholders with an expertise in an industry or business 
     sector.'';
       (6) in paragraph (9) (as redesignated by paragraph (2)), by 
     inserting ``, including a faith-based organization,'' after 
     ``nonprofit organization'';
       (7) in paragraph (10) (as redesignated by paragraph (2))--
       (A) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (C)--
       (i) by striking ``not less than 50 percent of the cost of 
     the training'' and inserting ``a significant portion of the 
     cost of training as determined by the local board, taking 
     into account the size of the employer and such other factors 
     as the local board determines to be appropriate''; and
       (ii) by striking the period and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) for customized training with employers in various 
     parts of the State, a significant portion of the cost of the 
     training, as determined by the Governor, taking into account 
     the size of the employer and such other factors as the 
     Governor determines appropriate.'';
       (8) in paragraph (11) (as redesignated by paragraph (2))--
       (A) in subparagraph (A)(ii)(II), by striking ``section 
     134(c)'' and inserting ``section 121(e)'';
       (B) in subparagraph (C), by striking ``or'' after the 
     semicolon;
       (C) in subparagraph (D), by striking the period and 
     inserting ``; or''; and
       (D) by adding at the end the following:
       ``(E)(i) is a member of the Armed Forces on active duty, 
     who has been involuntarily separated with an honorable 
     discharge, from the Armed Forces, or who has received notice 
     of such separation;
       ``(ii) is the spouse or adult dependent of a member of the 
     Armed Forces who has experienced the loss of employment as a 
     direct result of relocation to accommodate a change in duty 
     station of such member; or
       ``(iii) is the spouse of a member of the Armed Forces on 
     active duty who meets the criteria described in paragraph 
     (13)(B).'';
       (9) in paragraph (12)(A) (as redesignated by paragraph 
     (2))--
       (A) by striking ``and'' after the semicolon and inserting 
     ``or'';
       (B) by striking ``(A)'' and inserting ``(A)(i)''; and
       (C) by adding at the end the following:
       ``(ii) is the dependent spouse of a member of the Armed 
     Forces, whose family income is significantly reduced because 
     of a deployment, an activation, a transfer of duty station, 
     or the service-connected death or disability of the spouse; 
     and'';
       (10) in paragraph (14)(A) (as redesignated by paragraph 
     (2)), by striking ``section 122(e)(3)'' and inserting 
     ``section 122'';
       (11) by inserting after paragraph (18) (as redesignated by 
     paragraph (2)) the following:
       ``(19) Hard-to-serve populations.--The term `hard-to-serve 
     populations' means populations of individuals who are hard-
     to-serve, including displaced homemakers, low-income 
     individuals, Native Americans, individuals with disabilities, 
     older individuals, ex-offenders, homeless individuals, 
     individuals with limited English proficiency, individuals who 
     do not meet the definition of literacy in section 203, 
     individuals facing substantial cultural barriers, migrant and 
     seasonal farmworkers, individuals 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 such 
     other groups as the Governor determines to be hard-to-
     serve.'';
       (12) by inserting after paragraph (20) (as redesignated by 
     paragraph (2)) the following:
       ``(21) Integrated training program.--The term `integrated 
     training program' means a program that combines occupational 
     skills training with language acquisition.
       ``(22) Institution of higher education.--The term 
     `institution of higher education' has the meaning given the 
     term in section 102(a)(1) (A) and (B) of the Higher Education 
     Act of 1965 (20 U.S.C. 1002(a)(1)).'';
       (13) in paragraph (29) (as redesignated by paragraph (2))--

[[Page 22367]]

       (A) in subparagraph (B), by striking ``higher of--'' and 
     all that follows through ``level, for an equivalent period'' 
     and inserting ``poverty line for an equivalent period'';
       (B) by redesignating subparagraphs (D) through (F) as 
     subparagraphs (E) through (G), respectively; and
       (C) by inserting after subparagraph (C) the following:
       ``(D) receives or is eligible to receive a free or reduced 
     price lunch under the Richard B. Russell National School 
     Lunch Act (42 U.S.C. 1751 et seq.);'';
       (14) in paragraph (34) (as redesignated by paragraph (2)), 
     by inserting ``, subject to section 121(b)(1)(C)'' after 
     ``121(b)(1)'';
       (15) by striking paragraph (37) (as redesignated by 
     paragraph (2)) and inserting the following:
       ``(37) Out-of-school youth.--The term `out-of-school youth' 
     means an out-of-school youth as defined in section 
     129(a)(1)(B).'';
       (16) in paragraph (45) (as redesignated by paragraph (2)), 
     by striking ``, and the term means such Secretary for 
     purposes of section 503'';
       (17) by inserting after paragraph (45) (as redesignated by 
     paragraph (2)) the following:
       ``(46) Self-sufficiency.--The term `self-sufficiency' has 
     the meaning given the term in section 134(a)(3)(A)(4)(x) and 
     section 134(e)(1)(A)(ix).'';
       (18) in paragraph (48) (as redesignated by paragraph (2)), 
     by striking ``clause (iii) or (v) of section 136(b)(3)(A)'' 
     and inserting ``section 136(b)(3)(A)(iii)'';
       (19) in paragraph (57) (as redesignated by paragraph (2)), 
     by striking ``(or as described in section 129(c)(5))'' and 
     inserting ``(or as described in section 129(a)(2))''; and
       (20) in paragraph (58) (as redesignated by paragraph (2)), 
     by striking ``established under section 117(h)'' and 
     inserting ``that may be established under section 
     117(h)(2)''.

      Subtitle B--Statewide and Local Workforce Investment Systems

     SEC. 111. PURPOSE.

       Section 106 (29 U.S.C. 2811) is amended to read as follows:

     ``SEC. 106. PURPOSES.

       ``The purposes of this subtitle are the following:
       ``(1)(A) Primarily, to provide workforce investment 
     activities, through statewide and local workforce investment 
     systems, that increase the employment, retention, self-
     sufficiency, and earnings of participants, and increase 
     occupational skill attainment by participants.
       ``(B) As a result of the provision of the activities, to 
     improve the quality of the workforce, reduce welfare 
     dependency, increase self-sufficiency, and enhance the 
     productivity and competitiveness of the Nation.
       ``(2) To enhance the workforce investment system of the 
     Nation by strengthening one-stop centers, providing for more 
     effective governance arrangements, promoting access to a more 
     comprehensive array of employment and training and related 
     services, establishing a targeted approach to serving youth, 
     improving performance accountability, and promoting State and 
     local flexibility.
       ``(3) 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.
       ``(4) To provide workforce investment systems that are 
     demand-driven and responsive to the needs of all employers, 
     including small employers.
       ``(5) To provide workforce investment systems that work in 
     all areas of the Nation, including urban and rural areas.
       ``(6) To allow flexibility to meet State, local, regional, 
     and individual workforce investment needs.
       ``(7) To recognize and reinforce the vital link between 
     economic development and workforce investment activities.
       ``(8) To provide for accurate data collection, reporting, 
     and performance measures that are not unduly burdensome.
       ``(9) To address the ongoing shortage of essential skills 
     in the United States workforce related to both manufacturing 
     and knowledge-based economies to ensure that the United 
     States remains competitive in the global economy.
       ``(10) To equip workers with higher skills and contribute 
     to lifelong education.
       ``(11) To eliminate training disincentives for hard-to-
     serve populations and minority workers, including effectively 
     utilizing community programs, services, and agencies.
       ``(12) To educate limited English proficient individuals 
     about skills and language so the individuals are employable.
       ``(13) To increase the employment, retention and earnings 
     of individuals with disabilities.''.

     SEC. 112. STATE WORKFORCE INVESTMENT BOARDS.

       (a) Membership.--
       (1) In general.--Section 111(b) (29 U.S.C. 2821(b)) is 
     amended--
       (A) in paragraph (1), by striking subparagraph (C) and 
     inserting the following:
       ``(C) representatives appointed by the Governor, who--
       ``(i) are 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, except that--

       ``(I) in any case in which no lead State agency official 
     has responsibility for such a program or activity, the 
     representative shall be a representative in the State with 
     expertise relating to such program or activity; and
       ``(II) in the case of the programs authorized under title I 
     of the Rehabilitation Act of 1973, the representative shall 
     be the head of the designated State unit, as defined in 
     section 7 of the Rehabilitation Act of 1973 (29 U.S.C. 705);

       ``(ii) are the State agency officials responsible for 
     economic development;
       ``(iii) are representatives of all business in the State, 
     including small businesses, who--

       ``(I) are owners of businesses, chief executive or 
     operating officers of businesses, or other business 
     executives or employers with optimum policymaking or hiring 
     authority;
       ``(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, business trade associations, 
     and local boards;

       ``(iv) is a chief elected official (representing cities and 
     counties, where appropriate)
       ``(v) are representatives of labor organizations, who have 
     been nominated by State labor federations; and
       ``(vi) are such other State agency officials and other 
     representatives 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. 
     2821(c)) is amended by striking ``subsection (b)(1)(C)(i)'' 
     and inserting ``subsection (b)(1)(C)(iii)''.
       (b) Functions.--Section 111(d) (29 U.S.C. 2811(d)) is 
     amended--
       (1) in paragraph (1), by striking ``development'' and 
     inserting ``development, implementation, and revision'';
       (2) in paragraph (2), by striking ``section 134(c)'' and 
     inserting ``section 121(e)'';
       (3) by striking paragraph (3) and inserting the following:
       ``(3) reviewing and providing comment on the State plans of 
     all one-stop partner programs, where applicable, in order to 
     provide effective strategic leadership in the development of 
     a high quality, comprehensive statewide workforce investment 
     system, including commenting at least once annually on the 
     measures taken pursuant to section 113(b)(3) of the Carl D. 
     Perkins Vocational and Technical Education Act of 1998 (20 
     U.S.C 2323(b)(3)) and title II of this Act;
       (4) by redesignating paragraphs (4) through (9) as 
     paragraphs (5) through (10), respectively;
       (5) by inserting after paragraph (3) the following:
       ``(4) development and review of statewide policies 
     affecting the coordinated provision of services through the 
     one-stop delivery systems described in section 121(e) within 
     the State, including--
       ``(A) the development of objective procedures and criteria 
     for use by local boards in assessing the effectiveness and 
     continuous improvement of one-stop centers under section 
     121(g);
       ``(B) the development of guidance for the allocation of 
     one-stop center infrastructure funds under section 
     121(h)(1)(B);
       ``(C) the development of--
       ``(i) statewide policies relating to the appropriate roles 
     and contributions of one-stop partner programs within the 
     one-stop delivery system, including approaches to 
     facilitating equitable and efficient cost allocation in the 
     one-stop delivery system;
       ``(ii) statewide strategies for providing effective 
     outreach to individuals, including hard-to-serve populations, 
     and employers who could benefit from services provided 
     through the one-stop delivery system; and
       ``(iii) strategies for technology improvements to 
     facilitate access to services provided through the one-stop 
     delivery system, in remote areas, and for individuals with 
     disabilities, which may be utilized throughout the State;
       ``(D) identification and dissemination of information on 
     best practices for effective operation of one-stop centers, 
     including use of innovative business outreach, partnerships, 
     and service delivery strategies, including for hard-to-serve 
     populations; and
       ``(E) such other matters as may promote statewide 
     objectives for, and enhance the performance of, the one-stop 
     delivery systems;'';
       (6) in paragraph (5) (as redesignated by paragraph (4)), by 
     inserting ``and the development of Statewide criteria to be 
     used by chief elected officials for the appointment of local 
     boards and for use in certification of local boards 
     consistent with section 117'' after ``section 116'';
       (7) in paragraph (6) (as redesignated by paragraph (4)), by 
     striking ``sections 128(b)(3)(B) and 133(b)(3)(B)'' and 
     inserting ``sections 128(b)(3) and 133(b)(3)(B)'';
       (8) in paragraph (8) (as redesignated by paragraph (4), by 
     striking ``and'' after the semicolon;
       (9) in paragraph (10) (as redesignated by paragraph (4))--

[[Page 22368]]

       (A) by striking ``section 503'' and inserting ``section 
     136(i)(1)''; and
       (B) by striking the period and inserting ``; and''; and
       (10) by adding at the end the following:
       ``(11) increasing the availability of skills training, 
     employment opportunities, and career advancement for hard-to-
     serve populations.''.
       (c) Alternative Entity.--Section 111(e) (29 U.S.C. 2811(e)) 
     is amended--
       (1) in paragraph (1), by striking ``For'' and inserting 
     ``Subject to paragraph (3), for''; and
       (2) by adding at the end the following:
       ``(3) Failure to meet performance measures.--If a State 
     fails to meet the State adjusted levels of performance 
     established pursuant to section 136, the Secretary may 
     require the State to establish a State board in accordance 
     with subsections (a), (b), and (c) in lieu of the alternative 
     entity established under paragraph (1).''.
       (d) Sunshine Provision.--Section 111(g) (29 U.S.C. 2822(g)) 
     is amended--
       (1) by inserting ``, and modifications to the State plan,'' 
     before ``prior''; and
       (2) by inserting ``, and modifications to the State plan'' 
     after ``the plan''.
       (e) Authority To Hire Staff.--Section 111 (29 U.S.C. 2811)) 
     is amended by adding at the end the following:
       ``(h) Authority To Hire Staff.--The State board may hire 
     staff to assist in carrying out the functions described in 
     subsection (d) using funds allocated under section 
     127(b)(1)(C) and section 132(b).''.

     SEC. 113. STATE PLAN.

       (a) Planning Cycle.--Section 112(a) (29 U.S.C. 2822(a)) is 
     amended--
       (1) by striking ``5-year strategy'' and inserting ``4-year 
     strategy''; and
       (2) by adding at the end the following: ``At the end of the 
     first 2-year period of the 4-year State plan, the State board 
     shall review and, as needed, amend the 4-year State plan to 
     reflect labor market and economic conditions. In addition, 
     the State shall submit a modification to the State plan at 
     the end of the first 2-year period of the State plan, which 
     may include redesignation of local areas pursuant to section 
     116(a) and the levels of performance under sections 136 for 
     the third and fourth years of the plan.''.
       (b) Contents.--Section 112(b) (29 U.S.C. 2822(b)) is 
     amended--
       (1) in paragraph (8)(A)--
       (A) in clause (ix), by striking ``and'' after the 
     semicolon; and
       (B) by adding at the end the following:
       ``(xi) programs authorized under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) (relating to Federal 
     old-age, survivors, and disability insurance benefits), title 
     XVI of such Act (42 U.S.C. 1381 et seq.) (relating to 
     supplemental security income), title XIX of such Act (42 
     U.S.C. 1396 et seq.) (relating to medicaid), and title XX of 
     such Act (relating to block grants to States for social 
     services), programs authorized under title VII of the 
     Rehabilitation Act of 1973 (29 U.S.C. 796 et seq.), and 
     programs carried out by State agencies relating to mental 
     retardation and developmental disabilities; and'';
       (2) by striking paragraph (10) and inserting the following:
       ``(10) a description of how the State will use funds the 
     State received under this subtitle to leverage other Federal, 
     State, local, and private resources, in order to maximize the 
     effectiveness of such resources, expand resources for the 
     provision of education and training services, and expand the 
     participation of businesses, employees, and individuals in 
     the Statewide workforce investment system, including a 
     description of incentives and technical assistance the State 
     will provide to local areas for such purposes;'';
       (3) in paragraph (12)(A), by striking ``sections 
     128(b)(3)(B) and 133(b)(3)(B)'' and inserting ``sections 
     128(b)(3) and 133(b)(3)(B)'';
       (4) in paragraph (14), by striking ``section 134(c)'' and 
     inserting ``section 121(e)'';
       (5) in paragraph (17)--
       (A) in subparagraph (A)--
       (i) in clause (iii)--

       (I) by inserting ``local'' before ``customized training''; 
     and
       (II) by striking ``and'' at the end;

       (ii) in clause (iv), by striking ``homemakers),'' and all 
     that follows through ``disabilities)'' and inserting ``hard-
     to-serve populations and individuals training for 
     nontraditional employment''; and
       (iii) by adding after clause (iv) the following:
       ``(v) how the State will serve the employment and training 
     needs of individuals with disabilities, consistent with 
     section 188 and Executive Order 13217 (42 U.S.C. 12131 note; 
     relating to community-based alternatives for individuals with 
     disabilities), including the provision of outreach, intake, 
     the conduct of assessments, service delivery, the development 
     of performance measures, and the training of staff; and''; 
     and
       (B) in subparagraph (B), by striking ``and'' at the end;
       (6) in paragraph (18)(D)--
       (A) by striking ``youth opportunity grants'' and inserting 
     ``youth challenge grants authorized under section 169 and 
     other federally funded youth programs''; and
       (B) by striking the period and inserting a semicolon; and
       (7) by adding at the end the following:
       ``(19) a description of how the State will utilize 
     technology to facilitate access to services in remote areas, 
     which may be utilized throughout the State;
       ``(20) a description of the State strategy for coordinating 
     workforce investment activities and economic development 
     activities;
       ``(21) a description of the State strategy and assistance 
     needed for ensuring regional cooperation;
       ``(22) a description of how the State will use funds the 
     State receives under this subtitle to--
       ``(A) implement innovative programs and strategies designed 
     to meet the needs of all businesses in the State, including 
     small businesses, which may include incumbent worker training 
     programs, sectoral and industry cluster strategies, regional 
     skills alliances, career ladder programs, utilization of 
     effective business intermediaries, and other business 
     services and strategies that better engage employers in 
     workforce activities and make the statewide workforce 
     investment system more relevant to the needs of State and 
     local businesses, consistent with the purposes of this Act; 
     and
       ``(B) provide incentives and technical assistance to assist 
     local areas in more fully engaging large and small employers 
     in local workforce development activities, to make the 
     workforce investment system more relevant to the needs of 
     area businesses, and to better coordinate workforce 
     investment and economic development efforts to contribute to 
     the economic well being of the local area, as determined 
     appropriate by the local board;
       ``(23) a description of the State strategy for ensuring 
     cooperation between transportation providers, including 
     public transportation providers, and workforce investment 
     activities;
       ``(24) a description of how the State will assist local 
     areas in assuring physical and programmatic assessability for 
     individuals with disabilities at one-stop centers;
       ``(25) a description of the process and methodology that 
     will be used by the State board to--
       ``(A) review statewide policies and provide guidance on the 
     coordinated provision of services through the one-stop 
     delivery system described in section 121;
       ``(B) establish, in consultation with chief elected 
     officials and local boards, procedures and objective criteria 
     for use by local boards in periodically assessing the 
     effectiveness and continuous improvement of one-stop centers 
     and one-stop delivery systems as described in section 121(g); 
     and
       ``(C) determine one-stop partner program contributions 
     for--
       ``(i) the costs of the infrastructure of one-stop centers 
     under section 121(h)(2); and
       ``(ii) the formula for allocating the funds described in 
     section 121(h)(2) to local areas; and
       ``(26) a description of the State strategy for ensuring 
     that activities carried out under this title are placing men 
     and women in jobs, education, or training that lead to 
     comparable pay.''.
       (c) Modifications to Plan.--Section 112(d) (29 U.S.C. 
     2822(d)) is amended--
       (1) by striking ``5-year period'' and inserting ``4-year 
     period''; and
       (2) by adding at the end the following: ``In addition, the 
     State shall submit the modifications to the State plan 
     required under subsection (a), and under circumstances 
     prescribed by the Secretary that are due to changes in 
     Federal law that significantly affect elements of the State 
     plan.''.

     SEC. 114. 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:
       ``(vi) The extent to which such local areas will promote 
     maximum effectiveness 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.--The Governor shall approve a request for 
     designation as a local area that is submitted prior to the 
     submission of the State plan, or of a modification to the 
     State plan relating to area designation, from any area that--
       ``(i) is a unit of general local government with a 
     population of 500,000 or more, except that after the initial 
     2-year period following such designation pursuant to this 
     clause that occurs after the date of enactment of the 
     Workforce Investment Act Amendments of 2003, the Governor 
     shall only be required to approve a request for designation 
     from such area if such area--

       ``(I) performed successfully; and
       ``(II) sustained fiscal integrity;

       ``(ii) was a local area under this title for the preceding 
     2-year period, if such local area--

       ``(I) performed successfully; and
       ``(II) sustained fiscal integrity; or

       ``(iii) is served by a rural concentrated employment 
     program grant recipient, except that after the 2-year period 
     following any such designation under the initial State plan 
     submitted after the date of enactment of the Workforce 
     Investment Act Amendments of 2003, the Governor shall only be 
     required to approve a request for designation under this 
     clause if such area--

[[Page 22369]]

       ``(I) performed successfully; and
       ``(II) sustained fiscal integrity.

       ``(B) Definitions.--For purposes of this paragraph:
       ``(i) Performed successfully.--The term `performed 
     successfully' means that the local area involved is not 
     subject to sanctions under section 136(h)(2) due to the 
     failure to meet the levels of performance established under 
     section 136(c) for 2 consecutive years.
       ``(ii) Sustained fiscal integrity.--The term `sustained 
     fiscal integrity' means that the Secretary has not made a 
     formal determination during the preceding 2-year period that 
     either the grant recipient or the administrative entity of 
     the area misexpended funds provided under this title due to 
     willful disregard of the requirements of the Act involved, 
     gross negligence, or failure to comply with accepted 
     standards of administration.''.
       (3) Conforming amendments.--Section 116(a) (29 U.S.C. 
     2831(a)) is amended--
       (A) by striking paragraph (3);
       (B) by redesignating paragraphs (4) and (5) as paragraph 
     (3) and (4), respectively;
       (C) in paragraph (3) (as redesignated by subparagraph 
     (B))--
       (i) by striking ``(including temporary designation)''; and
       (ii) by striking ``(v)'' and inserting ``(vi)''; and
       (D) in paragraph (4) (as redesignated by subparagraph 
     (B))--
       (i) by striking ``under paragraph (2) or (3)'' and 
     inserting ``under paragraph (2)''; and
       (ii) by striking the second sentence.
       (b) Single Local Area States.--Section 116(b) (29 U.S.C. 
     2831(b)) is amended to read as follows:
       ``(b) Single Local Area States.--
       ``(1) Continuation of previous designation.--
     Notwithstanding subsection (a)(2), the Governor of any State 
     that was a single local area for purposes of this title as of 
     July 1, 2002, may continue to designate the State as a single 
     local area for purposes of this title if the Governor 
     identifies the State as a local area in the State plan under 
     section 112(b)(5).
       ``(2) Redesignation.--The Governor may redesignate the 
     State as a single local area if, prior to the submission of 
     the State plan or modification to such plan so designating 
     the State, no local area meeting the requirements for 
     automatic designation under subsection (a)(2) requests such 
     designation as a separate local area.
       ``(3) Effect on local plan.--In any case in which a State 
     is designated as a local area pursuant to this subsection, 
     the local plan prepared under section 118 for the area shall 
     be submitted to the Secretary for approval as part of the 
     State plan under section 112.''.
       (c) Regional Planning.--Section 116(c) (29 U.S.C. 2831(c)) 
     is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Planning.--
       ``(A) In general.--As part of the process for developing 
     the State plan, a State may require regional planning by 
     local boards for a designated region in the State. The State 
     may require the local boards for a designated region to 
     participate in a regional planning process that results in 
     the establishment of regional performance measures for 
     workforce investment activities authorized under this 
     subtitle. The State, after consultation with local boards and 
     chief elected officials, may require the local boards for the 
     designated region to prepare, submit, and obtain approval of 
     a single regional plan that incorporates local plans for each 
     of the local areas in the region, as required under section 
     118. The State may award regional incentive grants to the 
     designated regions that meet or exceed the regional 
     performance measures pursuant to section 134(a)(2)(C).
       ``(B) Technical assistance.--If the State requires regional 
     planning as provided in subparagraph (A), the State shall 
     provide technical assistance and labor market information to 
     such local areas in the designated regions to assist with 
     such regional planning and subsequent service delivery 
     efforts.'';
       (2) in paragraph (2), by inserting ``information about the 
     skill requirements of existing and emerging industries and 
     industry clusters,'' after ``information about employment 
     opportunities and trends,''; and
       (3) in paragraph (3), by adding at the end the following: 
     ``Such services may be required to be coordinated with 
     regional economic development services and strategies.''.

     SEC. 115. LOCAL WORKFORCE INVESTMENT BOARDS.

       (a) Composition.--Section 117(b) (29 U.S.C. 2832(b)) is 
     amended--
       (1) in paragraph (2)(A)--
       (A) in clause (i), by striking subclause (II) and inserting 
     the following:

       ``(II) collectively, represent businesses with employment 
     opportunities that reflect the employment opportunities of 
     the local area, and include representatives of businesses 
     that are in high-growth and emerging industries, and 
     representatives of all businesses, including small 
     businesses, in the local area; and'';

       (B) by striking clause (ii) and inserting the following:
       ``(ii)(I) a superintendent representing the local school 
     districts involved or another high-level official from such 
     districts;
       ``(II) the president or highest ranking official of an 
     institution of higher education serving the local area; and
       ``(III) an administrator of local entities providing adult 
     education and literacy activities in the local area;'';
       (C) in clause (iv), by inserting ``, hard-to-serve 
     populations,'' after ``disabilities''; and
       (D) by striking clause (vi) and inserting the following:
       ``(vi) if the local board does not establish a youth 
     council, representatives with experience serving out-of-
     school youth, particularly out-of-school youth facing 
     barriers to employment.''; and
       (2) by adding at the end the following:
       ``(6) Special rule.--In the case that there are multiple 
     school districts or institutions of higher education serving 
     a local area, the representatives described in paragraph 
     (2)(A)(ii) shall be appointed from among individuals 
     nominated by regional or local educational agencies, 
     institutions, or organizations representing such agencies or 
     institutions.''.
       (b) Authority of Board Members.--Section 117(b)(3) (29 
     U.S.C. 2832(b)(3)) is amended--
       (1) in the heading, by inserting ``and representation'' 
     after ``Authority''; and
       (2) by adding at the end the following: ``The members of 
     the board shall represent diverse geographic sections within 
     the local area.''.
       (c) Conforming Amendment.--Section 117(c)(1)(C) (29 U.S.C. 
     2832 (c)(1)(C)) is amended by striking ``section 
     116(a)(2)(B)'' and inserting ``section 116(a)(2)(A)(ii)''.
       (d) Functions.--Section 117(d) (29 U.S.C. 2832(d)) is 
     amended--
       (1) in paragraph (2)--
       (A) in subparagraph (B)--
       (i) by inserting ``(except as provided in section 123(b))'' 
     after ``basis''; and
       (ii) by inserting ``where appropriate'' after ``youth 
     council''; and
       (B) by adding at the end the following:
       ``(E) Consumer choice requirements.--Consistent with 
     section 134(d)(3) and (d)(4), the local board shall work to 
     ensure there are sufficient providers of intensive services 
     and training services serving the local area in a manner that 
     maximizes consumer choice, including providers with expertise 
     in assisting individuals with disabilities.'';
       (2) in paragraph (4), by inserting ``, and shall ensure the 
     appropriate use and management of the funds provided under 
     this subtitle for such programs, activities, and system'' 
     after ``area'';
       (3) in paragraph (8)--
       (A) by inserting ``all'' before ``private sector'';
       (B) by inserting ``, including small employers,'' after 
     ``private sector employers''; and
       (C) by striking the period and inserting ``, taking into 
     account the unique needs of small businesses.''; and
       (4) by adding at the end the following:
       ``(9) Technology improvements.--The local board shall 
     develop strategies for technology improvements to facilitate 
     access to services, in remote areas, for services authorized 
     under this subtitle and carried out in the local area.''.
       (e) Conforming Amendment.--Section 117(f)(2) (29 U.S.C. 
     2832(f)(2)) is amended by striking ``described in section 
     134(c)''.
       (f) 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) Councils.--The local board may establish or continue 
     councils to provide information and advice to assist the 
     local board in carrying out activities under this title. Such 
     councils may include--
       ``(1) a council composed of one-stop partners to advise the 
     local board on the operation of the one-stop delivery system 
     involved;
       ``(2) a youth council composed of experts and stakeholders 
     in youth programs to advise the local board on youth 
     activities; and
       ``(3) such other councils as the local board determines are 
     appropriate.''.
       (g) Alternative Entity Provision.--Section 117(i)(1) (29 
     U.S.C. 2832(i)(1)) is amended--
       (1) by striking subparagraph (B) and inserting the 
     following:
       ``(B) was in existence on August 7, 1998, pursuant to State 
     law; and'';
       (2) by striking subparagraph (C); and
       (3) by redesignating subparagraph (D) as subparagraph (C).

     SEC. 116. LOCAL PLAN.

       (a) Planning Cycle.--Section 118(a) (29 U.S.C. 2833(a)) is 
     amended--
       (1) by striking ``5-year'' and inserting ``4-year''; and
       (2) by adding at the end the following: ``At the end of the 
     first 2-year period of the 4-year plan, the local board shall 
     review and, as needed, amend the 4-year plan to reflect labor 
     market and economic conditions.''.
       (b) Contents.--Section 118(b) (29 U.S.C. 2833(b)) is 
     amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A), by striking ``and'' after the 
     semicolon;
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) a description of how the local board will facilitate 
     access to services provided through the one-stop delivery 
     system, in remote areas, including facilitating access 
     through the use of technology; and''; and

[[Page 22370]]

       (C) by adding at the end the following:
       ``(C) a description of how the local board will ensure 
     physical and programmatic assessability for individuals with 
     disabilities at one-stop centers;'';
       (2) in paragraph (9), by striking ``; and'' and inserting a 
     semicolon;
       (3) by redesignating paragraph (10) as paragraph (14); and
       (4) by inserting after paragraph (9) the following:
       ``(10) a description of how the local board will coordinate 
     workforce investment activities carried out in the local area 
     with economic development activities carried out in the local 
     area;
       ``(11) a description of the strategies and services that 
     will be initiated in the local area to more fully engage all 
     employers, including small employers, in workforce 
     development activities, to make the workforce investment 
     system more relevant to the needs of area businesses, and to 
     better coordinate workforce investment and economic 
     development efforts, which may include the implementation of 
     innovative initiatives such as incumbent worker training 
     programs, sectoral and industry cluster strategies, regional 
     skills alliances, career ladder programs, utilization of 
     effective business intermediaries, and other business 
     services and strategies designed to meet the needs of area 
     employers and contribute to the economic well being of the 
     local area, as determined appropriate by the local board, 
     consistent with the purposes of this Act;
       ``(12) a description of how the local board will expand 
     access to education and training services for eligible 
     individuals who are in need of such services through--
       ``(A) the utilization of programs funded under this title ; 
     and
       ``(B) the increased leveraging of resources other than 
     those provided under this title, including tax credits, 
     private sector-provided training, and other Federal, State, 
     local, and private funding sources that are brokered through 
     the one-stop centers for training;
       ``(13) a description of how the local board will coordinate 
     workforce investment activities carried out in the local area 
     with the provision of transportation, including public 
     transportation, in the local area; and''.

     SEC. 117. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS.

       (a) One-Stop Partners.--
       (1) Required partners.--Section 121(b)(1) (29 U.S.C. 
     2841(b)(1)) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Roles and responsibilities of one-stop partners.--
     Each entity that carries out a program or activities 
     described in subparagraph (B) shall--
       ``(i) provide access through the one-stop delivery system 
     to the programs and activities carried out by the entity, 
     including making the core services described in section 
     134(d)(2) that are applicable to the program of the entity 
     available at the comprehensive one-stop centers (in addition 
     to any other appropriate locations);
       ``(ii) use a portion of the funds available to the program 
     of the entity to maintain the one-stop delivery system, 
     including payment of the infrastructure costs of one-stop 
     centers in accordance with subsection (h);
       ``(iii) enter into the local memorandum of understanding 
     with the local board relating to the operation of the one-
     stop system that meets the requirements of subsection (c);
       ``(iv) participate in the operation of the one-stop system 
     consistent with the terms of the memorandum of understanding, 
     the requirements of this title, and the requirements of the 
     Federal laws authorizing the programs carried out by the 
     entity; and
       ``(v) provide representation on the State board to the 
     extent provided under section 111.'';
       (B) in subparagraph (B)--
       (i) by striking clause (v);
       (ii) by redesignating clauses (vi) through (xii) as clauses 
     (v) through (xi), respectively;
       (iii) in clause (x) (as redesignated by clause (ii)), by 
     striking ``and'' at the end;
       (iv) in clause (xi) (as redesignated by clause (ii)), by 
     striking the period and inserting ``; and''; and
       (v) by adding at the end the following:
       ``(xii) programs authorized under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.), subject to 
     subparagraph (C).''; and
       (C) by adding at the end the following:
       ``(C) Determination by the governor.--
       ``(i) In general.--An entity that carries out programs 
     referred to in subparagraph (B)(xii) shall be included in the 
     one-stop partners for the local area, as a required partner, 
     for purposes of this title unless the Governor of the State 
     provides the notification described in clause (ii).
       ``(ii) Notification.--The notification referred to in 
     clause (i) is a notification that--

       ``(I) is made in writing of a determination by the Governor 
     not to include such entity in the one-stop partners described 
     in clause (i); and
       ``(II) is provided to the Secretary and the Secretary of 
     Health and Human Services.''.

       (2) Additional partners.--
       (A) In general.--Section 121(b)(2)(A) (29 U.S.C. 
     2841(b)(2)(A)) is amended to read as follows:
       ``(A) In general.--With the approval of the local board and 
     chief elected official, in addition to the entities described 
     in paragraph (1), other entities that carry out a human 
     resource program described in subparagraph (B) may be a one-
     stop partner and carry out the responsibilities described in 
     paragraph (1)(A).''.
       (B) Additional partners.--Section 121(b)(2)(B) (29 U.S.C. 
     2841(b)(2)(B)) is amended--
       (i) by redesignating clauses (iv) and (v) as clauses (v) 
     and (vi), respectively; and
       (ii) by striking clauses (i) through (iii) and inserting 
     the following:
       ``(i) employment and training programs administered by the 
     Social Security Administration, including the Ticket to Work 
     and Self-Sufficiency program established under section 1148 
     of the Social Security Act (42 U.S.C. 1320b-19);
       ``(ii) programs carried out in the local area for 
     individuals with disabilities, including programs carried out 
     by State agencies relating to mental retardation and 
     developmental disabilities, Statewide Independent Living 
     Councils established under section 705 of the Rehabilitation 
     Act of 1973 (29 U.S.C. 796d), and centers for independent 
     living defined in section 702 of the Rehabilitation Act of 
     1973 (29 U.S.C. 796a);
       ``(iii) employment and training programs carried out by the 
     Small Business Administration;
       ``(iv) programs authorized under section 6(d)(4) of the 
     Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4));''.
       (b) Local Memorandum of Understanding.--
       (1) Contents of memorandum.--Section 121(c)(2)(A) (29 
     U.S.C. 2841(c)(2)(A)) is amended to read as follows:
       ``(A) provisions describing--
       ``(i) the services to be provided through the one-stop 
     delivery system consistent with the requirements of this 
     section, including the manner in which the services will be 
     coordinated through such system;
       ``(ii) how the costs of such services and the operating 
     costs of such system will be funded to provide a stable and 
     equitable funding stream for ongoing one-stop system 
     operations, including the funding of the infrastructure costs 
     of one-stop centers in accordance with subsection (h);
       ``(iii) methods of referral of individuals between the one-
     stop operator and the one-stop partners for appropriate 
     services and activities;
       ``(iv) methods to ensure the needs of hard-to-serve 
     populations are addressed in accessing services through the 
     one-stop system; and
       ``(v) the duration of the memorandum of understanding and 
     the procedures for amending the memorandum during the term of 
     the memorandum, and assurances that such memorandum shall be 
     reviewed not less than once every 2-year period to ensure 
     appropriate funding and delivery of services; and''.
       (c) Conforming Amendment.--Section 121(d)(2) (29 U.S.C. 
     2841(d)(2)) is amended by striking ``section 134(c)'' and 
     inserting ``section 121(e)''.
       (d) Provision of Services.--
       (1) Elimination of provisions concerning established 
     systems.--Section 121 (29 U.S.C. 2841) is amended by striking 
     subsection (e).
       (2) Redesignation.--Subtitle B of title I is amended--
       (A) in section 134 (29 U.S.C. 2864), by redesignating 
     subsection (c) as subsection (e); and
       (B) by transferring that subsection (e) so that the 
     subsection appears after subsection (d) of section 121.
       (3) One-stop delivery systems.--Paragraph (1) of section 
     121(e) (29 U.S.C. 2841(e)) (as redesignated by paragraph (2)) 
     is amended--
       (A) in subparagraph (A), by striking ``subsection (d)(2)'' 
     and inserting ``section 134(d)(2)'';
       (B) in subparagraph (B)--
       (i) by striking ``subsection (d)'' and inserting ``section 
     134(d)'';
       (ii) by striking ``individual training accounts'' and 
     inserting ``career scholarship accounts''; and
       (iii) by striking ``subsection (d)(4)(G)'' and inserting 
     ``section 134(d)(4)(G)'';
       (C) in subparagraph (C), by striking ``subsection (e)'' and 
     inserting ``section 134(e)'';
       (D) in subparagraph (D), by striking ``section 121(b)'' and 
     inserting ``subsection (b)''; and
       (E) in subparagraph (E), by striking ``information 
     described in section 15'' and inserting ``data, information, 
     and analysis described in section 15(a)''.
       (e) Continuous Improvement of One-Stop Centers.--Section 
     121 (29 U.S.C. 2841) is amended by adding at the end the 
     following:
       ``(g) Continuous Improvement of One-Stop Centers.--
       ``(1) In general.--The State board, in consultation with 
     chief local elected officials and local boards, shall 
     establish procedures and objective criteria for use by local 
     boards in periodically assessing the effectiveness, physical 
     and programmatic accessibility, and continuous improvement of 
     one-stop centers and one-stop delivery systems.
       ``(2) Criteria.--The procedures and criteria developed 
     under this subsection shall include minimum standards 
     relating to the scope and degree of service coordination 
     achieved by the one-stop delivery system with respect

[[Page 22371]]

     to the programs administered by the one-stop partners at the 
     one-stop centers, consistent with the guidance provided by 
     the Governor and by the State board, in consultation with the 
     chief elected official and local boards, for such partners' 
     participation under subsections (h)(1)(B) and subsection (i), 
     respectively, and such other factors relating to the quality, 
     accessibility, and effectiveness of the one-stop delivery 
     system as the State board determines appropriate.
       ``(3) Local boards.--Consistent with the criteria developed 
     by the State, the local board may develop additional criteria 
     of higher standards to respond to local labor market and 
     demographic conditions and trends.
       ``(h) Funding of One-Stop Infrastructure and Other Costs.--
       ``(1) In general.--
       ``(A) Options for infrastructure funding.--
       ``(i) Local options.--The local board, chief elected 
     officials, and one-stop partners in a local area may choose 
     to fund the costs of the infrastructure of one-stop centers 
     through--

       ``(I) alternative methods described in the local memorandum 
     of understanding, if one-stop partners, the local board, and 
     chief elected official agree to such alternative methods; or
       ``(II) the State infrastructure funding mechanism described 
     in paragraph (2).

       ``(ii) Failure to reach agreement on funding methods.--If, 
     as of July 1, 2004, the local board, chief elected official, 
     and one-stop partners in a local area fail to reach agreement 
     on methods of funding the infrastructure costs of one-stop 
     centers, the State infrastructure funding mechanism described 
     in paragraph (2) shall be applicable to such local area.''.
       ``(B) Guidance for infrastructure funding.--In addition to 
     carrying out the requirements relating the State mechanism 
     for one-stop center infrastructure funding described in 
     paragraph (2), the Governor, after consultation with chief 
     local elected official, local boards, and the State board, 
     and consistent with the guidelines provided by the State 
     board under subsection (i), shall provide--
       ``(i) guidelines for State administered one-stop partner 
     programs in determining such program's contributions to and 
     participation in the one-stop delivery system, including 
     funding for the costs of infrastructure as described in 
     paragraph (4), negotiated pursuant to the local memorandum of 
     understanding under subsection (b); and
       ``(ii) guidance to assist local areas in identifying 
     equitable and stable alternative methods of funding of the 
     costs of the infrastructure of one-stop centers in local 
     areas.
       ``(2) State one-stop infrastructure funding.--
       ``(A) Partner contributions.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, but subject to clause (iii), a portion determined under 
     clause (ii) of the Federal funds provided to the State and 
     areas within the State under the Federal laws authorizing the 
     programs described in subsection (b) and administered by one-
     stop partners for a fiscal year shall be provided to the 
     Governor from such programs to assist in paying the costs of 
     infrastructure of one-stop centers in those local areas of 
     the State not funded under the option described in paragraph 
     (1)(B)(i)(I).
       ``(ii) Determination of governor.--

       ``(I) In general.--Subject to subclause (II) and clause 
     (iii), the Governor, after consultation with chief local 
     elected officials, local boards, and the State board, shall 
     determine the portion of funds to be provided under clause 
     (i) by each one-stop partner from each program described in 
     clause (i). In making such determination, the Governor shall 
     consider the proportionate use of the one-stop centers 
     pursuant to clause (i)(II) or (ii) of paragraph (1)(A) by 
     each partner, the costs of administration for purposes not 
     related to one-stop centers for each partner, and other 
     relevant factors described in paragraph (3). The Governor 
     shall exclude from such determination the portion of funds 
     and use of one-stop centers attributable to the programs of 
     one-stop partners for those local areas of the State where 
     the infrastructure of one-stop centers is funded under the 
     option described in paragraph (1)(B)(i)(I).
       ``(II) Special rule.--In a State in which the State 
     constitution places policymaking authority that is 
     independent of the authority of the Governor in an entity or 
     official with respect to the funds provided for adult 
     education and literacy activities authorized under title II 
     and for postsecondary vocational and technical education 
     activities authorized under the Carl D. Perkins Vocational 
     and Technical Education Act of 1998 (20 U.S.C. 2301 et seq.), 
     or vocational rehabilitation services offered under the 
     Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), the 
     determination described in subclause (I) with respect to the 
     programs authorized under that title and that Act shall be 
     made by the Governor and the appropriate entity or official 
     with such independent policymaking authority.
       ``(III) Appeal by one-stop partners.--The Governor shall 
     establish a procedure for the one-stop partner administering 
     a program described in subsection (b) to appeal a 
     determination regarding the portion of funds to be 
     contributed under this paragraph on the basis that such 
     determination is inconsistent with the criteria described in 
     the State plan or with the requirements of this paragraph. 
     Such procedure shall ensure prompt resolution of the appeal.

       ``(iii) Limitations.--

       ``(I) Provision from administrative funds.--The funds 
     provided under this paragraph by each one-stop partner shall 
     be provided only from funds available for the costs of 
     administration under the program administered by such 
     partner, and shall be subject to the program limitations with 
     respect to the portion of funds under such program that may 
     be used for administration.
       ``(II) Cap on required contributions.--

       ``(aa) WIA formula programs and employment service.--The 
     portion of funds required to be contributed under this 
     paragraph by the programs authorized under chapters 4 and 5 
     of this title and under the Wagner-Peyser Act shall not be in 
     excess of 3 percent of the amount of Federal funds provided 
     to carry out each such program in the State for a fiscal 
     year.
       ``(bb) Other one-stop partners.--The portion of funds 
     required to be contributed under paragraph (1)(B)(ii) by a 
     one-stop partner from a program described in subsection 
     (b)(1) other than the programs described under item (aa) 
     shall not be in excess of 1 and \1/2\ percent of the amount 
     of Federal funds provided to carry out such program in the 
     State for a fiscal year.
       ``(cc) Special rule.--Notwithstanding items (aa) and (bb), 
     an agreement, including local memorandums of understanding, 
     entered into prior to the date of enactment of the Workforce 
     Investment Act Amendments of 2003 by an entity regarding 
     contributions under this title that permits the percentages 
     described in such items to be exceeded, may continue to be in 
     effect until terminated by the parties.
       ``(dd) Vocational rehabilitation.--Notwithstanding items 
     (aa) and (bb), an entity administering a program under title 
     I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.) 
     shall not be required to provide, for the purposes of this 
     paragraph, an amount in excess of--
       ``(AA) 0.75 percent of the amount provided for such program 
     in the State for the second program year that begins after 
     the date of enactment of the Workforce Investment Act 
     Amendments of 2003;
       ``(BB) 1.0 percent of the amount provided for such program 
     in the State for the third program year that begins after 
     such date;
       ``(CC) 1.25 percent of the amount provided for such program 
     in the State for the fourth program year that begins after 
     such date; and
       ``(DD) 1.5 percent of the amount provided for such program 
     in the State for the fifth and each succeeding program year 
     that begins after such date.

       ``(III) Federal direct spending programs.--An entity 
     administering a program funded with direct spending as 
     defined in section 250(c)(8) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)(8)) 
     shall not be required to provide, for purposes of this 
     paragraph, an amount in excess of the amount determined to be 
     equivalent to the cost of the proportionate use of the one-
     stop centers for such program in the State.
       ``(IV) Native american programs.--Native American programs 
     established under section 166 shall not be subject to the 
     provisions of this subsection or subsection (i). The method 
     for determining the appropriate portion of funds to be 
     provided by such Native American programs to pay for the 
     costs of infrastructure of a one-stop center certified under 
     subsection (g) shall be determined as part of the development 
     of the memorandum of understanding under subsection (c) for 
     the one-stop center and shall be stated in the memorandum.

       ``(B) Allocation by governor.--From the funds provided 
     under subparagraph (A), the Governor shall allocate the funds 
     to local areas in accordance with the formula established 
     under subparagraph (C) for the purposes of assisting in 
     paying the costs of infrastructure of one-stop centers.
       ``(C) Allocation formula.--The State board shall develop a 
     formula to be used by the Governor to allocate the funds 
     provided under subparagraph (A) to local areas not funding 
     infrastructure costs under the option described in paragraph 
     (1)(B)(i)(II). The formula shall be based on factors 
     including the number of one-stop centers in a local area, the 
     population served by such centers, the services provided by 
     such centers, and other factors relating to the performance 
     of such centers that the State board determines are 
     appropriate.
       ``(D) Costs of infrastructure.--In this subsection, the 
     term `costs of infrastructure', used with respect to a one-
     stop center, means the nonpersonnel costs that are necessary 
     for the general operation of the one-stop center, including 
     the rental costs of the facilities, the costs of utilities 
     and maintenance, equipment (including adaptive technology for 
     individuals with disabilities), and technology to facilitate 
     remote access to the one-stop center's strategic planning 
     activities, and common outreach activities.
       ``(i) Other Funds.--

[[Page 22372]]

       ``(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 programs described in 
     subsection (b) and administered by one-stop partners, or the 
     noncash resources available under such programs, shall be 
     used to pay the additional costs relating to the operation of 
     the one-stop delivery system involved that are not paid from 
     the funds provided under subsection (h), as determined in 
     accordance with paragraph (2), to the extent not inconsistent 
     with the Federal law involved. Such costs shall include the 
     costs of the provision of core services described in section 
     134(d)(2) applicable to each program and may include--
       ``(A) costs of infrastructure, as defined in subsection 
     (h), that are in excess of the amount of funds provided under 
     subsection (h); and
       ``(B) common costs that are in addition to the costs of 
     infrastructure that are not paid from the funds provided 
     under subsection (h).
       ``(2) Determination and guidance.--The method for 
     determining the appropriate portion of funds and noncash 
     resources to be provided by each program under paragraph (1) 
     for a one-stop center shall be determined as part of the 
     development of the memorandum of understanding under 
     subsection (c) for the one-stop center and shall be stated in 
     the memorandum. The State board shall provide guidance to 
     facilitate the determination of an appropriate allocation of 
     the funds and noncash resources in local areas.''.

     SEC. 118. 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, after consultation with 
     the State board, shall establish criteria and procedures 
     regarding the eligibility of providers of training services 
     described in section 134(d)(4) (referred to in this section 
     as `training services') to receive funds provided under 
     section 133(b) for the provision of training services.
       ``(b) Criteria.--
       ``(1) In general.--The criteria established by the Governor 
     pursuant to subsection (a) shall take into account--
       ``(A) the performance of providers of training services 
     with respect to the performance measures described in section 
     136 or other appropriate measures of performance outcomes for 
     those individuals receiving training services under this 
     subtitle (taking into consideration the characteristics of 
     the population served and relevant economic conditions);
       ``(B) the need to ensure access to training services 
     throughout the State, including any rural areas;
       ``(C) the information such providers are required to report 
     to State agencies with respect to Federal and State programs 
     (other than the program carried out under this subtitle), 
     including partner programs;
       ``(D) the requirements for State licensing of providers of 
     training services, and the licensing status of each provider 
     of training services if applicable;
       ``(E) to the extent practicable, encouraging the use of 
     industry recognized standards and certification;
       ``(F) the ability to provide training services to hard-to-
     serve populations, including individuals with disabilities; 
     and
       ``(G) such other factors as the Governor determines are 
     appropriate to ensure--
       ``(i) the quality of services provided;
       ``(ii) the accountability of the providers;
       ``(iii) that the one-stop centers in the State will ensure 
     that such providers meet the needs of local employers and 
     participants;
       ``(iv) the informed choice of participants under chapter 5; 
     and
       ``(v) that the collection of information required is not 
     unduly burdensome or costly to providers.
       ``(2) Information and renewal.--The criteria established by 
     the Governor shall require that a provider of training 
     services submit appropriate, accurate, and timely information 
     to the State for purposes of carrying out subsection (d). The 
     criteria shall also provide for annual review and renewal of 
     eligibility under this section for providers of training 
     services.
       ``(3) Local criteria.--A local board in the State may 
     establish criteria in addition to the criteria established by 
     the Governor, or may require higher levels of performance 
     than required under the criteria established by the Governor, 
     for purposes of determining the eligibility of providers of 
     training services to receive funds described in subsection 
     (a) to provide the services in the local areas involved.
       ``(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 provided under section 133(b) for the provision of 
     training services, and identify the respective roles of the 
     State and local areas in receiving and reviewing the 
     applications and in making determinations of such eligibility 
     based on the criteria established under this section. The 
     procedures shall also establish a process for a provider of 
     training services to appeal a denial or termination of 
     eligibility under this section, that includes an opportunity 
     for a hearing and prescribes appropriate time limits to 
     ensure prompt resolution of the appeal.
       ``(d) Information To Assist Participants in Choosing 
     Providers.--
       ``(1) In general.--In order to facilitate and assist 
     participants in choosing employment and training activities 
     under chapter 5 and in choosing providers of training 
     services, the Governor shall ensure that an appropriate list 
     of providers determined to be eligible under this section in 
     the State, accompanied by appropriate information provided by 
     providers of training in the State in accordance with 
     subsection (b) and such other information as the Governor 
     determines is appropriate, including information on program 
     costs for participants in applicable programs, is provided to 
     the one-stop delivery system in the State. The list and the 
     information shall be made available to such participants and 
     to members of the public through the one-stop delivery system 
     in the State.
       ``(2) Special rule.--An entity that carries out programs 
     under the Act of August 16, 1937 (commonly known as the 
     `National Apprenticeship Act', 50 Stat. 664, chapter 663; 29 
     U.S.C. 50 et seq.) shall be included on the list of eligible 
     providers described in paragraph (1) for so long as such 
     entity remains certified by the Department of Labor.
       ``(e) Enforcement.--
       ``(1) In general.--The criteria and procedures established 
     under this section shall provide the following:
       ``(A) Intentionally supplying inaccurate information.--Upon 
     a determination that a provider of training services, or 
     individual providing information on behalf of the provider, 
     intentionally supplied inaccurate information under this 
     section, the eligibility of such provider to receive funds 
     under chapter 5 shall be terminated for a period of time that 
     is not less than 2 years.
       ``(B) Substantial violations.--Upon a determination that a 
     provider of training services substantially violated any 
     requirement under this title, the eligibility of such 
     provider to receive funds under the program involved may be 
     terminated, or other appropriate action may be taken.
       ``(C) Repayment.--A provider of training services whose 
     eligibility is terminated under subparagraph (A) or (B) shall 
     be liable for the repayment of funds received under chapter 5 
     during a period of noncompliance described in such paragraph.
       ``(2) Construction.--Paragraph (1) shall be construed to 
     provide remedies and penalties that supplement, but do not 
     supplant, other civil and criminal remedies and penalties.''.
       ``(f) Agreements With Other States.--States may enter into 
     agreements, on a reciprocal basis, to permit eligible 
     providers of training services to accept career scholarship 
     accounts provided in another State.
       ``(g) Opportunity To Submit Comments.--In establishing 
     criteria, procedures, and information required under this 
     section, the Governor shall provide an opportunity for 
     interested members of the public to make recommendations and 
     submit comments regarding such criteria, procedures, and 
     information.
       ``(h) Transition Period for Implementation.--The 
     requirements of this section shall be implemented not later 
     than December 31, 2004. In order to facilitate early 
     implementation of this section, the Governor may establish 
     transition procedures under which providers eligible to 
     provide training services under chapter 5 of this title as 
     such chapter was in effect on the day before the date of 
     enactment of the Workforce Investment Act Amendments of 2003 
     may continue to be eligible to provide such services until 
     December 31, 2004, or until such earlier date as the Governor 
     determines appropriate.
       ``(i) On-the-Job Training or Customized Training 
     Exception.--
       ``(1) In general.--Providers of on-the-job training or 
     customized training shall not be subject to the requirements 
     of subsections (a) through (h).
       ``(2) Collection and dissemination of information.--A one-
     stop operator in a local area shall collect such performance 
     information from on-the-job training and customized training 
     providers as the Governor may require, determine whether the 
     providers meet such performance criteria as the Governor may 
     require, and disseminate information identifying providers 
     that meet the criteria as eligible providers, and the 
     performance information, through the one-stop delivery 
     system. Providers determined to meet the criteria shall be 
     considered to be identified as eligible providers of training 
     services.''.

     SEC. 119. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

       Section 123 (29 U.S.C. 2843) is amended to read as follows:

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

       ``(a) In General.--From the funds allocated under section 
     128(b) to a local area, the local board for such area shall 
     award grants or contracts on a competitive basis to providers 
     of youth activities identified based on the criteria in the 
     State plan described in section 112 and shall conduct 
     oversight with respect to such providers.
       ``(b) Exceptions.--A local board may award grants or 
     contracts on a sole-source basis if such board determines 
     there is an insufficient number of eligible providers of

[[Page 22373]]

     youth activities in the local area involved (such as a rural 
     area) for grants and contracts to be awarded on a competitive 
     basis under subsection (a).''.

     SEC. 120. YOUTH ACTIVITIES.

       (a) State Allotments.--Section 127 (29 U.S.C. 2852) is 
     amended--
       (1) in subsection (a)(1), by striking ``opportunity'' and 
     inserting ``challenge''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Allotment Among States.--
       ``(1) Youth activities.--
       ``(A) Youth challenge grants.--
       ``(i) In general.--For each fiscal year in which the amount 
     appropriated under section 137(a) exceeds $1,000,000,000, the 
     Secretary shall reserve a portion of the amount to provide 
     youth challenge grants and other activities under section 169 
     (relating to youth challenge grants) and provide youth 
     activities under section 167 (relating to migrant and 
     seasonal farmworker programs).
       ``(ii) Portion.--The portion referred to in clause (i) 
     shall equal, for a fiscal year--

       ``(I) except as provided in subclause (II), the difference 
     obtained by subtracting $1,000,000,000 from the amount 
     appropriated under section 137(a) for the fiscal year; or
       ``(II) for any fiscal year in which the amount is 
     $1,250,000,000 or greater, $250,000,000.

       ``(iii) Youth activities for farmworkers.--The Secretary 
     shall reserve the greater of $10,000,000 or 4 percent of the 
     portion described in clause (i) for a fiscal year to provide 
     youth activities under section 167.
       ``(iv) Native americans.--From the remainder of the amount 
     appropriated under section 137(a) for each fiscal year the 
     Secretary shall reserve not more than 1\1/2\ percent of such 
     amount to provide youth activities under section 166 
     (relating to native Americans).
       ``(B) Outlying areas.--
       ``(i) In general.--From the amount made available under 
     subsection (a)(2) for each fiscal year the Secretary shall 
     reserve not more than \1/4\ of 1 percent of the amount 
     appropriated under section 137(a) for the fiscal year to 
     provide assistance to the outlying areas to carry out youth 
     activities and statewide workforce investment activities.
       ``(ii) Limitation for freely associated states.--

       ``(I) Competitive grants.--The Secretary shall use funds 
     described in clause (i)(II) to award grants to Guam, American 
     Samoa, the Commonwealth of the Northern Mariana Islands, and 
     the Freely Associated States to carry out youth activities 
     and statewide workforce investment activities.
       ``(II) Award basis.--The Secretary shall award grants 
     pursuant to subclause (I) on a competitive basis and pursuant 
     to the recommendations of experts in the field of employment 
     and training, working through the Pacific Region Educational 
     Laboratory in Honolulu, Hawaii.
       ``(III) Assistance requirements.--Any Freely Associated 
     State that desires to receive assistance under this 
     subparagraph shall submit an application to the Secretary and 
     shall include in the application for assistance--

       ``(aa) information demonstrating that the Freely Associated 
     State will meet all conditions that apply to States under 
     this title;
       ``(bb) an assurance that, notwithstanding any other 
     provision of this title, the Freely Associated State will use 
     such assistance only for the direct provision of services; 
     and
       ``(cc) such other information and assurances as the 
     Secretary may require.

       ``(IV) Administrative costs.--The Secretary may provide not 
     more than 5 percent of the funds made available for grants 
     under subclause (I) to pay the administrative costs of the 
     Pacific Region Educational Laboratory in Honolulu, Hawaii, 
     regarding activities assisted under this clause.

       ``(iii) Additional requirement.--The provisions of Public 
     Law 95-134, permitting the consolidation of grants by the 
     outlying areas, shall not apply to assistance provided to 
     those areas, including the Freely Associated States, under 
     this subparagraph.
       ``(C) States.--
       ``(i) In general.--From the remainder of the amount 
     appropriated under section 137(a) for a fiscal year that 
     exists after the Secretary determines the amounts to be 
     reserved under subparagraphs (A) and (B), the Secretary shall 
     allot to the States--

       ``(I) an amount of the remainder that is less than or equal 
     to the total amount that was allotted to States for fiscal 
     year 2003 under section 127(b)(1)(C) of this Act (as in 
     effect on the day before the date of enactment of the 
     Workforce Investment Act Amendments of 2003), in accordance 
     with the requirements of such section 127(b)(1)(C); and
       ``(II) the amount of the remainder, if any, in excess of 
     the amount referred to in subclause (I), in accordance with 
     clause (ii).

       ``(ii) Formula.--Subject to clauses (iii) and (iv), of the 
     amount described in clause (i)(II)--

       ``(I) 33\1/3\ percent shall be allotted on the basis of the 
     relative number of individuals in the civilian labor force 
     who are ages 16 through 21 in each State, compared to the 
     total number of individuals in the civilian labor force who 
     are ages 16 through 21 in all States;
       ``(II) 33\1/3\ percent shall be allotted on the basis of 
     the relative number of unemployed individuals in each State, 
     compared to the total number of unemployed individuals in all 
     States; and
       ``(III) 33\1/3\ percent shall be allotted on the basis of 
     the relative number of disadvantaged youth who are ages 16 
     through 21 in each State, compared to the total number of 
     disadvantaged youth who are ages 16 through 21 in all States.

       ``(iii) Minimum and maximum percentages.--

       ``(I) Minimum percentage.--The Secretary shall ensure that 
     no State shall receive an allotment percentage under this 
     subparagraph for a fiscal year that is less than 90 percent 
     of the allotment percentage of the State for the preceding 
     fiscal year.
       ``(II) Maximum percentage.--Subject to subclause (I), the 
     Secretary shall ensure that no State shall receive an 
     allotment percentage under this subparagraph for a fiscal 
     year that is more than 130 percent of the allotment 
     percentage of the 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 subparagraph that is less than the 
     total of--

       ``(I) \3/10\ of 1 percent of $1,000,000,000 of the 
     remainder described in clause (i) for the fiscal year; and
       ``(II) if the remainder described in clause (i) for the 
     fiscal year exceeds $1,000,000,000, \2/5\ of 1 percent of the 
     excess.

       ``(2) Definitions.--For the purposes of paragraph (1):
       ``(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 by the 
     State involved through an allotment made under this 
     subsection for the fiscal year. The term, used with respect 
     to fiscal year 2003, means the percentage of the amounts 
     allotted to States under this chapter (as in effect on the 
     day before the date of enactment of the Workforce Investment 
     Act Amendments of 2003) that is received by the State 
     involved for fiscal year 2003.
       ``(B) Disadvantaged youth.--Subject to paragraph (3), the 
     term `disadvantaged youth' means an individual who is age 16 
     through 21 who received an income, or is a member of a family 
     that received a total family income, that, in relation to 
     family size, does not exceed the poverty line.
       ``(C) Freely associated states.--The term `Freely 
     Associated States' means the Republic of the Marshall 
     Islands, the Federated States of Micronesia, and the Republic 
     of Palau.
       ``(3) Special rule.--For purposes of the formula specified 
     in paragraph (1)(C), the Secretary shall, as appropriate and 
     to the extent practicable, exclude college students and 
     members of the Armed Forces from the determination of the 
     number of disadvantaged youth.''.
       (b) Reallotment.--
       (1) Amendment.--Section 127(c) (29 U.S.C. 2852(c)) is 
     amended--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Amount.--The amount available for reallotment for a 
     program year is equal to the amount by which the unexpended 
     balance at the end of the program year prior to the program 
     year for which the determination is made exceeds 30 percent 
     of the total amount of funds available to the State under 
     this section during such prior program year (including 
     amounts allotted to the State in all prior program years that 
     remained available). For purposes of this paragraph, the 
     unexpended balance is the amount that is the difference 
     between--
       ``(A) the total amount of funds available to the State 
     under this section during the program year prior to the 
     program year for which the determination is made (including 
     amounts allotted to the State in all prior program years that 
     remained available); and
       ``(B) the accrued expenditures during such prior program 
     year.'';
       (B) in paragraph (3)--
       (i) by striking ``for the prior program year'' and 
     inserting ``for the program year for which the determination 
     is made''; and
       (ii) by striking ``such prior program year'' and inserting 
     ``such program year'';
       (C) by striking paragraph (4) and inserting the following:
       ``(4) Eligibility.--For purposes of this subsection, an 
     eligible State means a State that does not have an amount 
     available for reallotment under paragraph (2) for the program 
     year for which the determination under paragraph (2) is 
     made.''; and
       (D) in paragraph (5), by striking ``obligation'' and 
     inserting ``expenditure''.
       (2) Effective date.--The amendments made by paragraph 
     (1)(C) shall take effect for the later of--
       (A) the program year that begins after the date of 
     enactment of this Act; or
       (B) program year 2004.
       (c) Within State Allocations.--
       (1) Reservation for statewide activities.--Section 128(a) 
     (29 U.S.C. 2853(a)) is amended to read as follows:
       ``(a) Reservations for Statewide Activities.--
       ``(1) In general.--The Governor of a State shall reserve 
     not more than 15 percent of

[[Page 22374]]

     each of the amounts allotted to the State under section 
     127(b)(1)(C) and paragraphs (1)(B) and (2)(B) of section 
     132(b) for a fiscal year for statewide workforce investment 
     activities.
       ``(2) Use of funds.--Regardless of whether the reserved 
     amounts were allotted under section 127(b)(1)(C), or under 
     paragraph (1)(B) or (2)(B) of section 132(b), the Governor 
     may use the reserved amounts to carry out statewide youth 
     activities under section 129(b) or statewide employment and 
     training activities, for adults or dislocated workers, under 
     section 134(a).''.
       (2) Within state allocation.--Section 128(b) (29 U.S.C. 
     2853(b)) is amended to read as follows:
       ``(b) Within State Allocations.--
       ``(1) In general.--Of the amount allotted to the State 
     under section 127(b)(1)(C) and not reserved under subsection 
     (a)(1)--
       ``(A) a portion equal to not less than 80 percent of such 
     amount shall be allocated by the Governor to local areas in 
     accordance with paragraph (2); and
       ``(B) a portion equal to not more than 20 percent of such 
     amount may be allocated by the Governor to local areas in 
     accordance with paragraph (3).
       ``(2) Established formula.--
       ``(A) In general.--Of the portion described in paragraph 
     (1)(A), the Governor shall allocate--
       ``(i) 33\1/3\ percent on the basis of the relative number 
     of individuals in the civilian labor force who are ages 16 
     through 21 in each local area, compared to the total number 
     of individuals in the civilian labor force who are ages 16 
     through 21 in all local areas in the State;
       ``(ii) 33\1/3\ 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; and
       ``(iii) 33\1/3\ percent on the basis of the relative number 
     of disadvantaged youth who are ages 16 through 21 in each 
     local area, compared to the total number of disadvantaged 
     youth who are ages 16 through 21 in all local areas in the 
     State.
       ``(B) Minimum and maximum percentages.--
       ``(i) Minimum percentage.--The Governor shall ensure that 
     no local area shall receive an allocation percentage under 
     this paragraph for a fiscal year that is less than 90 percent 
     of the allocation percentage of the local area for the 
     preceding fiscal year.
       ``(ii) Maximum percentage.--Subject to clause (i), the 
     Governor shall ensure that no local area shall receive an 
     allocation percentage under this paragraph for a fiscal year 
     that is more than 130 percent of the allocation percentage of 
     the local area for the preceding fiscal year.
       ``(C) Definitions.--In this paragraph:
       ``(i) Allocation percentage.--The term `allocation 
     percentage', used with respect to fiscal year 2004 or a 
     subsequent fiscal year, means a percentage of the portion 
     described in paragraph (1)(A) that is received by the local 
     area involved through an allocation made under this paragraph 
     for the fiscal year. The term, used with respect to fiscal 
     year 2003, means the percentage of the amounts allocated to 
     local areas under this chapter (as in effect on the day 
     before the date of enactment of the Workforce Investment Act 
     Amendments of 2003) that is received by the local area 
     involved for fiscal year 2003.
       ``(ii) Disadvantaged youth.--The term `disadvantaged youth' 
     means an individual who--

       ``(I) is age 16 through 21;
       ``(II) is not a college student or member of the Armed 
     Forces; and
       ``(III) received an income, or is a member of a family that 
     received a total family income, that, in relation to family 
     size, does not exceed the poverty line.

       ``(3) Youth discretionary allocation.--The Governor may 
     allocate the portion described in paragraph (1)(B) to local 
     areas where there are a significant number of eligible youth, 
     after consultation with the State board and local board.
       ``(4) Local administrative cost limit.--
       ``(A) In general.--Of the amount allocated to a local area 
     under this subsection and section 133(b) for a fiscal year, 
     not more than 10 percent of the amount may be used by the 
     local board involved 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.--
       (A) Amendment.--Section 128(c) (29 U.S.C. 2853(c)) is 
     amended--
       (i) in paragraph (1), by striking ``paragraph (2)(A) or (3) 
     of'';
       (ii) by striking paragraph (2) and inserting the following:
       ``(2) Amount.--The amount available for reallocation for a 
     program year is equal to the amount by which the unexpended 
     balance at the end of the program year prior to the program 
     year for which the determination is made exceeds 30 percent 
     of the total amount of funds available to the local area 
     under this section during such prior program year (including 
     amounts allocated to the local area in all prior program 
     years that remained available). For purposes of this 
     paragraph, the unexpended balance is the amount that is the 
     difference between--
       ``(A) the total amount of funds available to the local area 
     under this section during the program year prior to the 
     program year for which the determination is made (including 
     amounts allocated to the local area in all prior program 
     years that remained available); and
       ``(B) the accrued expenditures during such prior program 
     year.'';
       (iii) by amending paragraph (3)--

       (I) by striking ``subsection (b)(3)'' each place it appears 
     and inserting ``subsection (b)'';
       (II) by striking ``for the prior program year'' and 
     inserting ``for the program year for 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

       (iv) by striking paragraph (4) and inserting the following:
       ``(4) Eligibility.--For purposes of this subsection, an 
     eligible local area means a local area that does not have an 
     amount available for reallocation under paragraph (2) for the 
     program year for which the determination under paragraph (2) 
     is made.''.
       (B) Effective date.--The amendments made by subparagraph 
     (A) shall take effect for the later of--
       (i) the program year that begins after the date of 
     enactment of this Act; or
       (ii) program year 2004.
       (d) Youth Participant Eligibility.--Section 129(a) (29 
     U.S.C. 2854(a)) is amended to read as follows:
       ``(a) Youth Participant Eligibility.--
       ``(1) Eligibility.--
       ``(A) In general.--To be eligible to participate in 
     activities carried out under this chapter during any program 
     year an individual shall, at the time the eligibility 
     determination is made, be an out-of-school youth or an in-
     school youth.
       ``(B) Out-of-school youth.--In this section the term `out-
     of-school youth' means an individual who is--
       ``(i) not younger than age 16 (subject to paragraph (3)) 
     nor older than age 21; and
       ``(ii) one of the following:

       ``(I) A school dropout.
       ``(II) A youth who is within the age for compulsory school 
     attendance, but has not attended school for at least 1 school 
     year calendar quarter.
       ``(III) A recipient of a secondary school diploma or its 
     equivalent who is--

       ``(aa) deficient in basic skills, including limited English 
     proficiency;
       ``(bb) a low-income individual; and
       ``(cc) not attending any school; or

       ``(IV) Subject to the juvenile justice system or ordered by 
     a court to an alternative school.
       ``(V) A low-income individual who is pregnant or parenting 
     and not attending any school.
       ``(VI) A youth who is not attending school or a youth 
     attending an alternative school, who is homeless, a runaway, 
     a foster child, a child eligible for assistance under section 
     477 of the Social Security Act, or in an out-of-home 
     placement.

       ``(C) In-school youth.--In this section the term `in-school 
     youth' means an individual who is--
       ``(i) not younger than age 14 nor older than age 21;
       ``(ii) a low-income individual; and
       ``(iii) one or more of the following:

       ``(I) Deficient in basic literacy skills, including limited 
     English proficiency.
       ``(II) Homeless, a runaway, a foster child, a child 
     eligible for assistance under section 477 of the Social 
     Security Act, or in an out-of-home placement.
       ``(III) Pregnant or parenting.
       ``(IV) An offender (other than an individual described in 
     subparagraph (B)(ii)(IV)).
       ``(V) An individual who requires additional assistance to 
     complete an educational program, or to secure or hold 
     employment.

       ``(2) Exception.--Not more than 5 percent of the 
     individuals assisted under this section in each local area 
     may be individuals who are not low-income with respect to 
     individuals for whom low-income is a requirement for 
     eligibility under this section.
       ``(3) Limitations on activities for in-school youth.--
       ``(A) In general.--For any program year, not more than 60 
     percent of the funds available for statewide activities that 
     serve youth under subsection (b), and not more than 60 
     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).
       ``(B) Exception.--A State that receives a minimum allotment 
     under section 127(b)(1) in accordance with section 
     127(b)(1)(C)(iv)(II) or under section 132(b)(1) in accordance 
     with section 132(b)(1)(B)(iv)(II) may increase the percentage 
     described in subparagraph (A) for a local area in the State, 
     if--
       ``(i) after an analysis of the eligible youth population in 
     the local area, the State determines that the local area will 
     be unable to

[[Page 22375]]

     use at least 40 percent of the funds available for activities 
     that serve youth under subsection (b) to serve out-of-school 
     youth due to a low number of out-of-school youth; and
       ``(ii)(I) the State submits to the Secretary, for the local 
     area, a request including a proposed reduced percentage for 
     purposes of subparagraph (A), and the summary of the eligible 
     youth population analysis; and
       ``(II) the request is approved by the Secretary.
       ``(4) Consistency with compulsory school attendance laws.--
     In providing assistance under this section to an individual 
     who is required to attend school under applicable State 
     compulsory school attendance laws, the priority in providing 
     such assistance shall be for the individual to attend school 
     regularly.''.
       (e) Statewide 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) shall be used, 
     regardless of whether the funds were allotted to the State 
     under section 127(b)(1)(C) or under paragraph (1) or (2) of 
     section 132(b) for statewide activities, which may include--
       ``(A) conducting--
       ``(i) 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;
       ``(ii) research; and
       ``(iii) demonstration projects;
       ``(B) 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 title, and for exemplary performance by local 
     areas under section 136(i)(2);
       ``(C) providing technical assistance and capacity building 
     activities 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, the provision of technical assistance to local 
     areas that fail to meet local performance measures described 
     in section 136(c), and the provision of technology to 
     facilitate remote access to services provided through one-
     stop delivery systems;
       ``(D) operating a fiscal and management accountability 
     information system under section 136(f);
       ``(E) carrying out monitoring and oversight of activities 
     carried out under this chapter and chapter 5, which may 
     include a review comparing the services provided to male and 
     female youth;
       ``(F) providing additional assistance to local areas that 
     have high concentrations of eligible youth;
       ``(G) supporting the development of alternative programs 
     and other activities that enhance the choices available to 
     eligible youth and encourage such youth to reenter secondary 
     education, enroll in postsecondary education and advanced 
     training, and obtain career path employment; and
       ``(H) supporting the provision of core services described 
     in section 134(d)(2) in the one-stop delivery system in the 
     State;
       ``(2) Limitation.--Not more than 5 percent of the funds 
     allotted to a State under section 127(b)(1)(C) shall be used 
     by the State for administrative activities carried out under 
     this subsection or section 134(a).
       ``(3) Prohibition.--No funds described in this subsection 
     may be used to develop or implement education curricula for 
     school systems in the State.''.
       (f) Local Elements and Requirements.--
       (1) Program design.--Section 129(c)(1) (29 U.S.C. 
     2854(c)(1)) is amended--
       (A) in the matter that precedes subparagraph (A), by 
     striking ``paragraph (2)(A) or (3), as appropriate, of'';
       (B) in subparagraph (B), by inserting ``are directly linked 
     to 1 or more of the performance measures 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 redesignated by 
     clause (i)) the following:
       ``(i) activities leading to the attainment of a secondary 
     school diploma or its equivalent, or another recognized 
     credential;'';
       (iii) in clause (ii) (as redesignated by clause (i)), by 
     inserting ``and advanced training'' after ``opportunities'';
       (iv) in clause (iii) (as redesignated by clause (i))--

       (I) by inserting ``instruction based on State academic 
     content and student academic achievement standards 
     established under section 1111 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6311)'' after 
     ``academic''; and
       (II) by inserting ``that lead to the attainment of 
     recognized credentials'' after ``learning''; and

       (v) by striking clause (v) (as redesignated by clause (i)) 
     and inserting the following:
       ``(v) effective connections to all employers, including 
     small employers, in sectors of the local and regional labor 
     markets that are 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 ``the 
     requirements for a secondary school diploma or its recognized 
     equivalent (including recognized alternative standards for 
     individuals with disabilities) or for another recognized 
     credential, including dropout prevention strategies'';
       (B) in subparagraph (B), by inserting ``, with a priority 
     on exposing youth to technology and nontraditional jobs'' 
     before the semicolon;
       (C) in subparagraph (F), by striking ``during nonschool 
     hours'';
       (D) in subparagraph (I), by striking ``and'' at the end;
       (E) in subparagraph (J), by striking the period at the end 
     and inserting a semicolon; and
       (F) by adding at the end the following:
       ``(K) on-the-job training opportunities;
       ``(L) opportunities to acquire financial literacy skills;
       ``(M) entrepreneurial skills training and microenterprise 
     services; and
       ``(N) information about average wages for a range of jobs 
     available in the local area, including technology jobs.''.
       (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 amended by striking paragraphs (4) and (5).
       (5) Prohibitions and linkages.--Section 129(c) (29 U.S.C. 
     2854(c)), as amended by paragraph (4), is further amended--
       (A) by redesignating paragraphs (6), (7), and (8) as 
     paragraphs (4), (5), and (6), respectively;
       (B) in paragraph (4) (as redesignated by subparagraph 
     (A))--
       (i) by striking subparagraph (B); and
       (ii) by redesignating subparagraph (C) as subparagraph (B); 
     and
     (C) in paragraph (5) (as redesignated by subparagraph (A)), 
     by striking ``youth councils'' and inserting ``local 
     boards''.

     SEC. 121. ADULT AND DISLOCATED WORKER EMPLOYMENT AND TRAINING 
                   ACTIVITIES.

       (a) State Allotments.--
       (1) Reservations.--Section 132(a)(2)(A) is amended by 
     striking ``national emergency grants'' and inserting 
     ``national dislocated worker grants''.
       (2) Allotment among states.--Section 132(b) (29 U.S.C. 
     2862(b)) is amended--
       (A) in paragraph (1)(A)(ii), by striking ``section 
     127(b)(1)(B)'' and all that follows and inserting ``section 
     127(b)(1)(D).'';
       (B) by striking paragraph (1)(B)(ii) and inserting the 
     following:
       ``(ii) Formula.--Subject to clauses (iii) and (iv), of the 
     remainder--

       ``(I) 40 percent shall be allotted on the basis of the 
     relative number of unemployed individuals in areas of 
     substantial unemployment in each State, compared to the total 
     number of unemployed individuals in areas of substantial 
     unemployment in all States;
       ``(II) 25 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 such individuals 
     in all States; and
       ``(III) 35 percent shall be allotted on the basis of the 
     relative number of disadvantaged adults in each State, 
     compared to the total number of disadvantaged adults in all 
     States, except as described in clause (iii).'';

       (C) in paragraph (1)(B)(iii), by striking ``section 
     116(a)(2)(B)'' and inserting ``section 116(a)(2)(A)(ii)''; 
     and
       (D) in paragraph (2)(A)(ii), by striking ``section 
     127(b)(1)(B)'' and all that follows and inserting ``section 
     127(b)(1)(D).''.
       (3) Reallotment.--Section 132(c) (29 U.S.C. 2862(c)) is 
     amended--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Amount.--The amount available for reallotment for a 
     program year for programs funded under subsection (b)(1)(B) 
     (relating to adult employment and training) and subsection 
     (b)(2)(B) (relating to dislocated worker employment and 
     training), respectively, is equal to the amount by which the 
     unexpended balance at the end of the program year prior to 
     the program year for which the determination is made exceeds 
     30 percent of the total amount of funds available to the 
     State under subsection (b)(1)(B) or (b)(2)(B), respectively, 
     during such prior program year (including amounts allotted to 
     the State in all prior program years under such provisions 
     that remained available). For purposes of this paragraph, the 
     unexpended balance is the amount that is the difference 
     between--
       ``(A) the total amount of funds available to the State 
     under subsection (b)(1)(B) or (b)(2)(B), respectively, during 
     the program year prior to the program year for which the 
     determination is made (including amounts allotted to the 
     State in all prior program years under such provisions that 
     remained available); and

[[Page 22376]]

       ``(B) the accrued expenditures from such total amount of 
     funds available under subsection (b)(1)(B) or (b)(2)(B), 
     respectively, during such prior program year.'';
       (B) in paragraph (3)--
       (i) by striking ``under this section for such activities 
     for the prior program year'' and inserting ``under subsection 
     (b)(1)(B) or (b)(2)(B), as appropriate, for the program year 
     for which the determination is made''; and
       (ii) by striking ``under this subsection for such 
     activities for such prior program year'' and inserting 
     ``under subsection (b)(1)(B) or (b)(2)(B), as appropriate, 
     for such program year'';
       (C) by striking paragraph (4) and inserting the following:
       ``(4) Eligibility.--For purposes of this subsection, an 
     eligible State means--
       ``(A) with respect to funds allotted under subsection 
     (b)(1)(B), a State that does not have an amount of such funds 
     available for reallotment under paragraph (2) for the program 
     year for which the determination under paragraph (2) is made; 
     and
       ``(B) with respect to funds allotted under subsection 
     (b)(2)(B), a State that does not have an amount of such funds 
     available for reallotment under paragraph (2) for the program 
     year for which the determination under paragraph (2) is 
     made.''; and
       (D) in paragraph (5), by striking ``obligation'' and 
     inserting ``expenditure''.
       (4) Effective date.--The amendments made by paragraph (3) 
     shall take effect for the later of--
       (A) the program year that begins after the date of 
     enactment of this Act; or
       (B) program year 2004.
       (b) Within State Allocations.--
       (1) Allocation.--Section 133(b)(5)(B)(ii) (29 U.S.C. 
     2863(b)(5)(B)(ii)) is amended by striking ``section 134(c)'' 
     and inserting ``section 121(e)''.
       (2) Reallocation.--Section 133(c) (29 U.S.C. 2863(c)) is 
     amended--
       (A) in paragraph (1), by inserting ``, and under subsection 
     (b)(2)(B) for dislocated worker employment and training 
     activities,'' after ``activities'';
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Amount.--The amount available for reallocation for a 
     program year for programs funded under paragraphs (2)(A) and 
     (3) of subsection (b) (relating to adult employment and 
     training) and subsection (b)(2)(B) (relating to dislocated 
     worker employment and training), respectively, is equal to 
     the amount by which the unexpended balance at the end of the 
     program year prior to the program year for which the 
     determination is made exceeds 30 percent of the total amount 
     of funds available to the local area under paragraphs (2)(A) 
     and (3) of subsection (b), or subsection (b)(2)(B), 
     respectively, during such prior program year (including 
     amounts allocated to the local area in all prior program 
     years under such provisions that remained available). For 
     purposes of this paragraph, the unexpended balance is the 
     amount that is the difference between--
       ``(A) the total amount of funds available to the local area 
     under paragraphs (2)(A) and (3) of subsection (b), or 
     subsection (b)(2)(B), respectively, during the program year 
     prior to the program year for which the determination is made 
     (including amounts allotted to the local area in all prior 
     program years under such provisions that remained available); 
     and
       ``(B) the accrued expenditures from such total amount of 
     funds available under paragraphs (2)(A) and (3) of subsection 
     (b), or subsection (b)(2)(B), respectively, during such prior 
     program year.'';
       (C) by striking paragraph (3) and inserting the following:
       ``(3) Reallocation.--In making reallocations to eligible 
     local areas of amounts available pursuant to paragraph (2) 
     for a program year, the Governor shall allocate to each 
     eligible local area within the State--
       ``(A) with respect to amounts that are available for 
     reallocation under paragraph (2) that were allocated under 
     paragraphs (2)(A) or (3) of subsection (b), an amount based 
     on the relative amount allocated to such local area under 
     paragraphs (2)(A) or (3) of subsection (b), as appropriate, 
     for the program year for which the determination is made, as 
     compared to the total amount allocated to all eligible local 
     areas under paragraphs (2)(A) or (3) of subsection (b), as 
     appropriate, of such program year; and
       ``(B) with respect to amounts that are available for 
     reallocation under paragraph (2) that were allocated under 
     subsection (b)(2)(B), an amount based on the relative amount 
     allocated to such local area under subsection (b)(2)(B) for 
     the program year for which the determination is made, as 
     compared to the total amount allocated to all eligible local 
     areas under subsection (b)(2)(B) for such program year.''; 
     and
       (D) by striking paragraph (4) and inserting the following:
       ``(4) Eligibility.--For purposes of this subsection, an 
     eligible local area means--
       ``(A) with respect to funds allocated under paragraphs 
     (2)(A) or (3) of subsection (b), a local area that does not 
     have an amount of such funds available for reallocation under 
     paragraph (2) for the program year for which the 
     determination under paragraph (2) is made; and
       ``(B) with respect to funds allocated under subsection 
     (b)(2)(B), a local area that does not have an amount of such 
     funds available for reallocation under paragraph (2) for the 
     program year for which the determination under paragraph (2) 
     is made.''.
       (3) Effective date.--The amendments made by paragraph (2) 
     shall take effect for the later of--
       (A) the program year that begins after the date of 
     enactment of this Act; or
       (B) program year 2004.
       (c) Use of Funds for Employment and Training Activities.--
       (1) Statewide employment and training activities.--
       (A) Statewide rapid response activities.--Section 
     134(a)(2)(A) (29 U.S.C. 2864(a)(2)(A)) is amended to read as 
     follows:
       ``(A) Statewide rapid response activities.--
       ``(i) In general.--A State shall carry out statewide rapid 
     response activities using funds reserved by a Governor for a 
     State under section 133(a)(2). Such activities shall 
     include--

       ``(I) provision of rapid response activities, carried out 
     in local areas by the State or by an entity designated by the 
     State, working in conjunction with the local boards and the 
     chief elected officials for the local areas; and
       ``(II) provision of additional assistance to local areas 
     that experience disasters, mass layoffs, or plant closings, 
     or other events that precipitate substantial increases in the 
     number of unemployed individuals, carried out in local areas 
     by the State, working in conjunction with the local boards 
     and the chief elected officials for the local areas.

       ``(ii) Use of unexpended funds.--Funds reserved under 
     section 133(a)(2) to carry out this subparagraph that remain 
     unexpended after the first program year for which such funds 
     were allotted may be used by the Governor to carry out 
     statewide activities authorized under subparagraphs (B) and 
     (C) in addition to activities under this subparagraph.''.
       (B) Statewide employment and training activities.--Section 
     134(a)(2) (29 U.S.C. 2864(a)(2)) is amended by striking 
     subparagraph (B) and inserting the following:
       ``(B) Statewide employment and training activities.--Funds 
     reserved by a Governor for a State under sections 128(a)(1) 
     and 133(a)(1) and not used under paragraph (1)(A) shall be 
     used for statewide employment and training activities, 
     including--
       ``(i) disseminating--

       ``(I) the State list of eligible providers of training 
     services, including eligible providers of nontraditional 
     training services;
       ``(II) information identifying eligible providers of on-
     the-job training and customized training;
       ``(III) performance information and program cost 
     information, as described in subsections (e) and (h) of 
     section 122; and
       ``(IV) information on physical and programmatic 
     assessability for individuals with disabilities;

       ``(ii) 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;
       ``(iii) providing incentive grants to local areas in 
     recognition of exceptional achievement relating to--

       ``(I) regional cooperation among local boards (including 
     local boards in a designated region as described in section 
     116(c));
       ``(II) expanded local coordination of programs and 
     activities carried out as part of a comprehensive workforce 
     investment system, including--

       ``(aa) coordination of employment services under the 
     Wagner-Peyser Act and core activities under this title; and
       ``(bb) partner programs described in section 121;

       ``(III) exemplary performance by local areas as described 
     in section 136(i)(2); and
       ``(IV) providing expanded access to education and training 
     services, especially through increased leveraging of 
     resources other than those provided through programs under 
     this title;

       ``(iv) 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 described in section 
     136(c), which may include the development and training of 
     staff to provide opportunities for hard-to-serve populations 
     to enter high-wage, high-skilled, and nontraditional 
     occupations;
       ``(v) operating a fiscal and management accountability 
     system under section 136(f); and
       ``(vi) carrying out monitoring and oversight of activities 
     carried out under this chapter and chapter 4.''.
       (C) Allowable statewide employment and training 
     activities.--Section 134(a)(3)(A) (29 U.S.C. 2864(a)(3)(A) is 
     amended to read as follows:
       ``(A) In general.--A State may use funds reserved as 
     described in sections 128(a) and 133(a)(1) (regardless of 
     whether the funds were allotted to the State under section 
     127(b)(1) or paragraph (1) or (2) of section

[[Page 22377]]

     132(b)) to carry out additional statewide employment and 
     training activities, which may include--
       ``(i) implementing innovative programs and strategies 
     designed to meet the needs of all businesses in the State, 
     including small businesses, which may include incumbent 
     worker training programs, sectoral and industry cluster 
     strategies and partnerships, including regional skills 
     alliances, career ladder programs, micro-enterprise and 
     entrepreneurial training and support programs, utilization of 
     effective business intermediaries, activities to improve 
     linkages between the one-stop delivery systems in the State 
     and all employers (including small employers), in the State 
     and other business services and strategies that better engage 
     employers in workforce activities and make the workforce 
     investment system more relevant to the needs of State and 
     local businesses, consistent with the purposes of this Act;
       ``(ii) developing strategies for effectively serving hard-
     to-serve populations and for coordinating programs and 
     services among one-stop partners;
       ``(iii) 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.);
       ``(iv) developing strategies for ensuring that activities 
     carried out under this section are placing men and women in 
     jobs, education, and training that lead to comparable pay;
       ``(v) implementing programs to increase the number of 
     individuals training for and placed in nontraditional 
     employment;
       ``(vi) carrying out activities to facilitate remote access 
     to services, including training services described in 
     subsection (d)(4), provided through a one-stop delivery 
     system, including facilitating access through the use of 
     technology;
       ``(vii) supporting the provision of core services described 
     in subsection (d)(2) in the one-stop delivery system in the 
     State;
       ``(viii) coordinating with the child welfare system to 
     facilitate services for children in foster care and those who 
     are eligible for assistance under section 477 of the Social 
     Security Act;
       ``(ix) activities--

       ``(I) to improve coordination between workforce investment 
     activities carried out within the State involved and economic 
     development activities;
       ``(II) to improve coordination between employment and 
     training assistance and child support services and assistance 
     provided by State and local agencies carrying out part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.);
       ``(III) to improve coordination between employment and 
     training assistance and cooperative extension programs 
     carried out by the Department of Agriculture; and
       ``(IV) to develop and disseminate workforce and labor 
     market information;

       ``(x) conducting--

       ``(I) research; and
       ``(II) demonstration projects; and

       ``(xi) adopting, calculating, or commissioning a minimum 
     self-sufficiency standard that specifies the income needs of 
     families, by family size, the number and ages of children in 
     the family, and sub-State geographical considerations.''.
       (2) Required local employment and training activities.--
       (A) Allocated funds.--Section 134(d)(1) (29 U.S.C. 
     2864(d)(1)) is amended--
       (i) in clause (i), by striking ``described in subsection 
     (c)'';
       (ii) in clause (iii), by striking ``and'' at the end;
       (iii) in clause (iv), by striking the period and inserting 
     a semicolon; and
       (iv) by adding at the end the following:
       ``(v) to designate a dedicated business liaison in the 
     local area who may be funded with funds provided under this 
     title or from other sources to establish and develop 
     relationships and networks with large and small employers and 
     their intermediaries; and
       ``(vi) in order to avoid duplication of services and 
     enhance coordination of services, to require the colocation 
     of employment services provided under the Wagner-Peyser Act 
     at the comprehensive one-stop centers.''.
       (B) Core services.--Section 134(d)(2) (29 U.S.C. 
     2864(d)(2)) is amended--
       (i) in the matter preceding subparagraph (A), by striking 
     ``paragraph (1)(A)'' and inserting ``paragraph (1)'';
       (ii) in subparagraph (A), by striking ``under this 
     subtitle'' and inserting ``under the programs described in 
     section 121(b) and administered by one-stop partners, 
     consistent with the requirements of such programs'';
       (iii) by striking subparagraph (D) and inserting the 
     following:
       ``(D) labor exchange services, including--
       ``(i) job search and placement assistance and, in 
     appropriate cases, career counseling, including--

       ``(I) exposure to high wage, high skill jobs; and
       ``(II) nontraditional employment; and

       ``(ii) appropriate recruitment and other business services 
     for all employers, including small employers, in the local 
     area, which may include services described in this 
     subsection, including information and referral to specialized 
     business services not traditionally offered through the one-
     stop delivery system;'';
       (iv) in subparagraph (E)(iii)--

       (I) by inserting ``, career ladders,'' after ``earnings''; 
     and
       (II) by striking ``and'' at the end;

       (v) in subparagraph (F)--

       (I) by striking ``and program cost information''; and
       (II) by striking ``described in section 123'';

       (vi) by striking subparagraph (H) and inserting the 
     following:
       ``(H) provision of accurate information, in formats that 
     are usable and understandable to all one-stop customers, 
     relating to the availability of supportive services or 
     assistance, including childcare, child support, medical or 
     child health assistance under title XIX or XXI of the Social 
     Security Act, benefits under the Food Stamp Act of 1977, the 
     earned income tax credit under section 32 of the Internal 
     Revenue Code of 1986, and assistance under a State program 
     funded under part A of title IV of the Social Security Act 
     and other supportive services and transportation provided 
     through funds made available under such part, available in 
     the local area, and referral to such services or assistance 
     as appropriate;''; and
       (vii) in subparagraph (J), by striking 
     ``for--'' and all that follows through ``(ii) programs'' and 
     inserting ``for programs''.
       (C) Intensive services.--Section 134(d)(3) (29 U.S.C. 
     2864(d)(3)) is amended--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--
       ``(i) Eligibility.--Except as provided in clause (ii), 
     funds allocated to a local area for adults under paragraph 
     (2)(A) or (3), as appropriate, of section 133(b), and funds 
     allocated to the local area for dislocated workers under 
     section 133(b)(2)(B), shall be used to provide intensive 
     services to adults and dislocated workers, respectively--

       ``(I) who are unemployed and who, after an interview, 
     evaluation, or assessment, have been determined by a one-stop 
     operator or one-stop partner to be--

       ``(aa) unlikely or unable to obtain employment, that leads 
     to self-sufficiency or wages comparable to or higher than 
     previous employment, through core services described in 
     paragraph (2); and
       ``(bb) in need of intensive services in order to obtain 
     employment that leads to self-sufficiency or wages comparable 
     to or higher than previous employment; or

       ``(II) who are employed, but who, after an interview, 
     evaluation, or assessment are determined by a one-stop 
     operator or one-stop partner to be in need of intensive 
     services to obtain or retain employment that leads to self-
     sufficiency.

       ``(ii) Special rule.--A new interview, evaluation, or 
     assessment of a participant is not required under clause (i) 
     if the one-stop operator or one-stop partner determines that 
     it is appropriate to use a recent assessment of the 
     participant conducted pursuant to another education or 
     training program.''; and
       (ii) in subparagraph (C)--

       (I) in clause (v), by striking ``for participants seeking 
     training services under paragraph (4)''; and
       (II) by adding at the end the following:

       ``(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.
       ``(x) English language acquisition and integrated training 
     programs.''.
       (D) Training services.--Section 134(d)(4) (29 U.S.C. 
     2864(d)(4)) is amended--
       (i) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--
       ``(i) Eligibility.--Except as provided in clause (ii), 
     funds allocated to a local area for adults under paragraph 
     (2)(A) or (3), as appropriate, of section 133(b), and funds 
     allocated to the local area for dislocated workers under 
     section 133(b)(2)(B), shall be used to provide training 
     services to adults and dislocated workers, respectively--

       ``(I) who, after an interview, evaluation, or assessment, 
     and case management, have been determined by a one-stop 
     operator or one-stop partner, as appropriate, to--

       ``(aa) be unlikely or unable to obtain or retain 
     employment, that leads to self-sufficiency or wages 
     comparable to or higher than previous employment, through the 
     intensive services described in paragraph (3);
       ``(bb) be in need of training services to obtain or retain 
     employment that leads to self-sufficiency or wages comparable 
     to or higher than previous employment; and
       ``(cc) have the skills and qualifications to successfully 
     participate in the selected program of training services;

       ``(II) who select programs of training services that are 
     directly linked to the employment opportunities in the local 
     area or region involved or in another area to which the 
     adults or dislocated workers are willing to commute or 
     relocate;
       ``(III) who meet the requirements of subparagraph (B); and
       ``(IV) who are determined to be eligible in accordance with 
     the priority system in effect under subparagraph (E).

[[Page 22378]]

       ``(ii) Special rule.--A new interview, evaluation, or 
     assessment of a participant is not required under clause (i) 
     if the one-stop operator or one-stop partner determines that 
     it is appropriate to use a recent assessment of the 
     participant conducted pursuant to another education or 
     training program.'';
       (ii) in subparagraph (B)(i), by striking ``Except'' and 
     inserting ``Notwithstanding section 479B of the Higher 
     Education Act of 1965 (20 U.S.C. 1087uu) and except'';
       (iii) in subparagraph (D)--

       (I) in clause (viii), by striking ``and'' after the 
     semicolon;
       (II) in clause (ix), by striking the period and inserting 
     ``; and''; and
       (III) by adding at the end the following:

       ``(x) English language acquisition and integrated training 
     programs.'';
       (iv) in subparagraph (F)--

       (I) in clause (ii), by striking ``referred to in subsection 
     (c), shall make available--'' and all that follows and 
     inserting ``shall make available a list of eligible providers 
     of training services, and accompanying information, in 
     accordance with section 122(d).'';
       (II) in the heading of clause (iii), by striking 
     ``Individual training accounts'' and inserting ``Career 
     scholarship accounts'';
       (III) in clause (iii)--

       (aa) by striking ``identifying information'' and inserting 
     ``accompanying information'';
       (bb) by striking ``clause (ii)(I)'' and inserting ``clause 
     (ii)''; and
       (cc) by striking ``individual training account'' and 
     inserting ``career scholarship account''; and

       (IV) by adding the following clause after clause (iii):

       ``(iv) Coordination.--Each local board may, through one-
     stop centers, coordinate career scholarship accounts with 
     other Federal, State, local, or private job training programs 
     or sources to assist the individual in obtaining training 
     services.''; and
       (v) in subparagraph (G)--

       (I) in the subparagraph heading, by striking ``individual 
     training accounts'' and inserting ``career scholarship 
     accounts'';
       (II) in clause (i), by striking ``individual training 
     accounts'' and inserting ``career scholarship accounts'';
       (III) in clause (ii)--

       (aa) by striking ``individual training account'' and 
     inserting ``career scholarship account''; and
       (bb) in subclause (II), by striking ``individual training 
     accounts'' and inserting ``career scholarship accounts'';
       (cc) in subclause (II), by striking ``or'' after the 
     semicolon;
       (dd) in subclause (III), by striking the period and 
     inserting '``; or''; and
       (ee) by adding at the end the following:

       ``(IV) the local board determines that it would be most 
     appropriate to award a contract to an institution of higher 
     education in order to facilitate the training of multiple 
     individuals in high-demand occupations, if such contract does 
     not limit customer choice.''; and
       (IV) in clause (iv)--

       (aa) by redesignating subclause (IV) as subclause (V); and
       (bb) by inserting after subclause (III) the following:

       ``(IV) Individuals with disabilities.''.

       (3) Permissible activities.--Section 134(e) (29 U.S.C. 
     2864(e)) is amended--
       (A) by striking the matter preceding paragraph (2) and 
     inserting the following:
       ``(e) Permissible Local Employment and Training 
     Activities.--
       ``(1) In general.--
       ``(A) Activities.--Funds allocated to a local area for 
     adults under paragraph (2)(A) or (3), as appropriate, of 
     section 133(b), and funds allocated to the local area for 
     dislocated workers under section 133(b)(2)(B), may be used to 
     provide, through the one-stop delivery system involved--
       ``(i) customized screening and referral of qualified 
     participants in training services described in subsection 
     (d)(4) to employment;
       ``(ii) customized employment-related services to employers 
     on a fee-for-service basis;
       ``(iii) customer support to enable members of hard-to-serve 
     populations, including individuals with disabilities, to 
     navigate among multiple services and activities for such 
     populations;
       ``(iv) technical assistance and capacity building for 
     serving individuals with disabilities in local areas, and by 
     one-stop operators, one-stop partners, and eligible 
     providers, including the development and training of staff, 
     the provision of outreach, intake, assessments, and service 
     delivery, and the development of performance measures;
       ``(v) employment and training assistance provided in 
     coordination with child support enforcement activities of the 
     State and local agencies carrying out part D of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.);
       ``(vi) activities to improve coordination between 
     employment and training assistance and child support services 
     and assistance provided by State and local agencies carrying 
     out part D of title IV of the Social Security Act (42 U.S.C. 
     651 et seq.);
       ``(vii) activities to improve coordination between 
     employment and training assistance and cooperative extension 
     programs carried out by the Department of Agriculture;
       ``(viii) activities to facilitate remote access to services 
     provided through a one-stop delivery system, including 
     facilitating access through the use of technology;
       ``(ix) activities--

       ``(I) to improve coordination between workforce investment 
     activities carried out within the local area involved and 
     economic development activities; and
       ``(II) to improve services and linkages between the local 
     workforce investment system including the local one-stop 
     delivery system, and all employers, including small employers 
     in the local area, through services described under this 
     section, including subparagraph (B);

       ``(x) training programs for displaced homemakers and for 
     individuals training for nontraditional occupations, in 
     conjunction with programs operated in the local area;
       ``(xi) using a portion of the funds allocated under section 
     133(b), activities to carry out business services and 
     strategies that meet the workforce development needs of local 
     area employers, as determined by the local board, consistent 
     with the local plan under section 118, which services--

       ``(I) may be provided through effective business 
     intermediaries working in conjunction with the local board, 
     and may also be provided on a fee for service basis or 
     through the leveraging of economic development and other 
     resources as determined appropriate by the local board; and
       ``(II) may include--

       ``(aa) identifying for and disseminating to business, 
     educators, and job seekers, information related to the 
     workforce, economic and community development needs, and 
     opportunities of the local economy;
       ``(bb) development and delivery of innovative workforce 
     investment services and strategies for area businesses, which 
     may include sectoral, industry cluster, regional skills 
     alliances, career ladder, skills upgrading, skill standard 
     development and certification, apprenticeship, and other 
     effective initiatives for meeting the workforce development 
     needs of area employers and workers;
       ``(cc) participation in seminars and classes offered in 
     partnership with relevant organizations focusing on the 
     workforce-related needs of area employers and job seekers;
       ``(dd) training consulting, needs analysis, and brokering 
     services for area businesses, including the organization and 
     aggregation of training (which may be paid for with funds 
     other than those provided under this title), for individual 
     employers and coalitions of employers with similar interests, 
     products, or workforce needs;
       ``(ee) assistance to area employers in the aversion of 
     layoffs and in managing reductions in force in coordination 
     with rapid response activities;
       ``(ff) the marketing of business services offered under 
     this Act, to appropriate area employers, including small and 
     mid-sized employers;
       ``(gg) information referral on concerns affecting local 
     employers; and
       ``(hh) other business services and strategies designed to 
     better engage employers in workforce development activities 
     and to make the workforce investment system more relevant to 
     the workforce development needs of area businesses, as 
     determined by the local board to be consistent with the 
     purposes of this Act; and
       ``(xii) activities to adjust the self-sufficiency standards 
     for local factors, or activities to adopt, calculate, or 
     commission a self-sufficiency standard that specifies the 
     income needs of families, by family size, the number and ages 
     of children in the family, and sub-State geographical 
     considerations.
       ``(B) Work support activities for low-wage workers.--
       ``(i) In general.--Funds allocated to a local area for 
     adults under paragraph (2)(A) or (3), as appropriate, of 
     section 133(b), and funds allocated to the local area for 
     dislocated workers under section 133(b)(2)(B), may be used to 
     provide, through the one-stop delivery system involved, work 
     support activities designed to assist low-wage workers in 
     retaining and enhancing employment. The one-stop partners 
     shall coordinate the appropriate programs and resources of 
     the partners with the activities and resources provided under 
     this subparagraph.
       ``(ii) Activities.--The activities described in clause (i) 
     may include the provision of activities described in this 
     section through the one-stop delivery system in a manner that 
     enhances the opportunities of such workers to participate in 
     the activities, such as the provision of activities described 
     in this section during nontraditional hours and the provision 
     of on-site child care while such activities are being 
     provided.'';
       (B) in paragraph (2), by striking the matter preceding 
     subparagraph (A) and inserting the following:
       ``(2) Supportive services.--Funds allocated to a local area 
     for adults under paragraph (2)(A) or (3), as appropriate, of 
     section 133(b), and funds allocated to the local area for 
     dislocated workers under section 133(b)(2)(B), may be used to 
     provide supportive services to adults and dislocated workers, 
     respectively--''; and
       (C) by adding at the end the following:
       ``(4) Incumbent worker training programs.--
       ``(A) In general.--The local board may use up to 10 percent 
     of the funds allocated to the

[[Page 22379]]

     local area involved under section 133(b) to pay for the 
     Federal share of the cost of providing training through an 
     incumbent worker training program carried out in accordance 
     with this paragraph. The Governor or State board may make 
     recommendations to the local board regarding incumbent worker 
     training with statewide impact.
       ``(B) Training activities.--The training program for 
     incumbent workers carried out under this paragraph shall be 
     carried out by the local board in conjunction with the 
     employers or groups of employers of such workers for the 
     purpose of assisting such workers in obtaining the skills 
     necessary to retain employment or avert layoffs.
       ``(C) Employer share required.--
       ``(i) In general.--Employers participating in the program 
     carried out under this paragraph shall be required to pay the 
     non-Federal share of the costs of providing the training to 
     incumbent workers of the employers. The local board shall 
     establish the non-Federal share of such costs, which may 
     include in kind contributions. The non-Federal share 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 employer share.--The non-Federal 
     share paid by such an employer may include the amount of the 
     wages paid by the employer to a worker while the worker is 
     attending a training program under this paragraph.''.

     SEC. 122. PERFORMANCE ACCOUNTABILITY SYSTEM.

       (a) State Performance Measures.--
       (1) Indicators of performance.--Section 136(b)(2)(A) (29 
     U.S.C. 2871(b)(2)(A)) is amended--
       (A) in clause (i)--
       (i) in the matter preceding subclause (I), by striking `` 
     and (for participants who are eligible youth age 19 through 
     21) for youth activities authorized under section 129'';
       (ii) by striking subclause (III) and inserting the 
     following:

       ``(III) increases in earnings from unsubsidized employment; 
     and''; and

       (iii) in subclause (IV), by striking ``, or by 
     participants'' and all that follows through ``unsubsidized 
     employment''; and
       (B) by striking clause (ii) and inserting the following:
       ``(ii) Core indicators for eligible youth.--The core 
     indicators of performance for youth activities authorized 
     under section 129 shall consist of--

       ``(I) entry into employment, education or advanced 
     training, or military service;
       ``(II) attainment of secondary school diplomas or their 
     recognized equivalents, and postsecondary certificates; and
       ``(III) literacy or numeracy gains.''.

       (2) Additional indicators.--Section 136(b)(2)(C) (29 U.S.C. 
     2871(b)(2)(C)) is amended to read as follows:
       ``(C) Additional indicators.--A State may identify in the 
     State plan additional indicators for workforce investment 
     activities under this subtitle, including indicators 
     identified in collaboration with State business and industry 
     associations, with employee representatives where applicable, 
     and with local boards, to measure the performance of the 
     workforce investment system in serving the workforce needs of 
     business and industry in the State.''.
       (3) Levels of performance.--Section 136(b)(3)(A) (29 U.S.C. 
     2871(b)(3)(A)) is amended--
       (A) in clause (iii)--
       (i) in the heading, by striking ``for first 3 years'';
       (ii) by striking ``and the customer satisfaction indicator 
     of performance, for the first 3'' and inserting ``described 
     in clauses (i) and (ii) of paragraph (2)(A) and the customer 
     satisfaction indicator of performance, for the first 2''; and
       (iii) by inserting at the end the following: ``Agreements 
     on levels of performance for each of the core indicators of 
     performance for the third and fourth program years covered by 
     the State plan shall be reached prior to the beginning of the 
     third program year covered by the State plan, and 
     incorporated as a modification to the State plan.'';
       (B) in clause (iv)--
       (i) in subclause (II)--

       (I) by striking ``taking into account'' and inserting ``and 
     shall ensure that the levels involved are adjusted, using 
     objective statistical methods, based on'';
       (II) by inserting ``(such as differences in unemployment 
     rates and job losses or gains in particular industries)'' 
     after ``economic conditions'';
       (III) by inserting ``(such as indicators of poor work 
     history, lack of work experience, educational or occupational 
     skills attainment, dislocation from high-wage and benefit 
     employment, low levels of literacy or English proficiency, 
     disability status, homelessness, and welfare dependency)'' 
     after ``program''; and
       (IV) by striking ``and'' at the end;

       (ii) in subclause (III), by striking the period and 
     inserting ``; and''; and
       (iii) by adding at the end the following:

       ``(IV) the extent to which the levels involved will assist 
     the State in meeting the national goals described in clause 
     (v).'';

       (C) by striking clause (v) and inserting the following:
       ``(v) Establishment of national goals.--In order to promote 
     enhanced performance outcomes on the performance measures and 
     to facilitate the process of reaching agreements with the 
     States under clause (iii) and to measure systemwide 
     performance for the one-stop delivery systems of the States, 
     the Secretary shall establish long-term national goals for 
     the adjusted levels of performance for that systemwide 
     performance to be achieved by the programs assisted under 
     chapters 4 and 5 on the core indicators of performance 
     described in subparagraphs (A) and (B) of subsection (b)(2). 
     Such goals shall be established in accordance with the 
     Government Performance and Results Act of 1993 in 
     consultation with the States and other appropriate 
     parties.''; and
       (D) in clause (vi)--
       (i) by striking ``or (v)''; and
       (ii) by striking ``with the representatives described in 
     subsection (i)'' and inserting ``with the States and other 
     interested parties''.
       (b) Local Performance Measures.--Section 136(c)(3) (29 
     U.S.C 2871(c)(3))--
       (1) by striking ``shall take into account'' and inserting 
     ``shall ensure such levels are adjusted based on'';
       (2) by inserting ``(characteristics such as unemployment 
     rates and job losses or gains in particular industries)'' 
     after ``economic''; and
       (3) by inserting ``(characteristics such as indicators of 
     poor work history, lack of work experience, educational and 
     occupational skills attainment, dislocation from high-wage 
     and benefit employment, low levels of literacy or English 
     proficiency, disability status, homelessness, and welfare 
     dependency)'' after ``demographic''.
       (c) Report.--Section 136(d) (29 U.S.C. 2871(d)) is 
     amended--
       (1) in paragraph (1), by adding at the end the following: 
     ``In the case of a State or local area that chooses to expend 
     funds under section 134(a)(3)(A)(i) or 134(e)(1)(A)(vii), 
     respectively, the report also shall include the amount of 
     such funds so expended and the percentage that such funds are 
     of the funds available under section 134;
       (2) in paragraph (2)--
       (A) in subparagraph (E)--
       (i) by striking ``(excluding participants who received only 
     self-service and informational activities)''; and
       (ii) by striking ``and'' after the semicolon;
       (B) in subparagraph (F)--
       (i) by inserting ``noncustodial parents with child support 
     obligations, homeless individuals,'' after ``displaced 
     homemakers,''; and
       (ii) by striking the period and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(G) the number of participants served and the cost per 
     participant; and
       ``(H) the amount of adult and dislocated worker funds spent 
     on--
       ``(i) core, intensive, and training services, respectively; 
     and
       ``(ii) services provided under section 134(a)(3)(A)(i) or 
     134(e)(1)(A)(iii), if applicable.''; 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 
     that the information contained in the reports is valid and 
     reliable.''.
       (d) Sanctions for State.--Section 136(g) is amended--
       (1) in paragraph (1)(B), by striking ``If such failure 
     continues for a second consecutive year'' and inserting ``If 
     a State performs at less than 80 percent of the adjusted 
     level of performance for a core indicator of performance 
     described in subsection (b)(2)(A) for 2 consecutive years 
     with respect to the same indicator of performance''; and
       (2) in paragraph (2), by striking ``section 503'' and 
     inserting ``subsection (i)(1)''.
       (e) Sanctions for Local Area.--Section 136(h)(2)(A) (29 
     U.S.C. 2871(h)(2)(A)) is amended--
       (1) in the matter preceding clause (i), by striking ``If 
     such failure continues for a second consecutive year'' and 
     inserting ``If a local area performs at less than 80 percent 
     of the adjusted level of performance for a core indicator of 
     performance described in subsection (b)(2)(A) for 2 
     consecutive years with respect to the same indicator of 
     performance'';
       (2) in clause (ii), by striking ``or'' after the semicolon;
       (3) by redesignating clause (iii) as clause (iv); and
       (4) by inserting after clause (ii) the following:
       ``(iii) redesignate the local area in accordance with 
     section 116(a)(2); or''.
       (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(b) and made available under subsection (g)(2), the 
     Secretary

[[Page 22380]]

     may award incentive grants to States for exemplary 
     performance in carrying out programs under chapters 4 and 5.
       ``(B) Basis.--The Secretary shall award the grants on the 
     basis--
       ``(i) of the States meeting or exceeding the performance 
     measures established under subsection (b)(3)(A)(iii);
       ``(ii) of exemplary performance of the States in serving 
     hard-to-serve populations (including performance relating to 
     the levels of service provided and the performance outcomes 
     on such performance measures with respect to the 
     populations);
       ``(iii) of States that are effectively--

       ``(I) coordinating multiple systems into a more effective 
     workforce development system, including coordination of 
     employment services under the Wagner-Peyser Act and core 
     activities under this title as well as partner programs 
     described in section 121;
       ``(II) expanding access to training, including through 
     increased leveraging of resources other than those funded 
     through programs under this title; or
       ``(III) implementing innovative business and economic 
     development initiatives.

       ``(iv) of such other factors relating to the performance of 
     the States under this title as the Secretary determines are 
     appropriate.
       ``(C) Use of funds.--The funds awarded to a State under 
     this paragraph may be used to carry out any activities 
     authorized for States under chapters 4 and 5, title II of 
     this Act, and the Carl D. Perkins Vocational and Technical 
     Education Act of 1998, including demonstration projects and 
     innovative programs for hard-to-serve populations.
       ``(2) Incentive grants for local areas.--
       ``(A) In general.--From funds reserved under sections 
     128(a) and 133(a)(1), the Governor involved shall award 
     incentive grants to local areas for exemplary performance in 
     carrying out programs under chapters 4 and 5.
       ``(B) Basis.--The Governor shall award the grants on the 
     basis--
       ``(i) that the local areas met or exceeded the performance 
     measures established under subsection (c)(2) relating to 
     indicators described in subsection (b)(3)(A)(iii);
       ``(ii) of exemplary performance of the local areas in 
     serving hard-to-serve populations; or
       ``(iii) of States and local areas that are effectively--

       ``(I) coordinating multiple systems into a comprehensive 
     workforce development system, including coordination of 
     employment services under the Wagner-Peyser Act and core 
     activities under this title as well as partner programs 
     described in section 121;
       ``(II) expanding access to training, including through 
     increased leveraging of resources other than those funded 
     through programs under this title; or
       ``(III) implementing innovative business and economic 
     development initiatives.

       ``(C) Use of funds.--The funds awarded to a local area 
     under this paragraph may be used to carry out activities 
     authorized for local areas under chapters 4 and 5, and such 
     demonstration projects or innovative programs for hard-to-
     serve populations as may be approved by the Governor.''.
       (g) Use of Core Measures in Other Department of Labor 
     Programs.--Section 136 (29 U.S.C. 2871) is amended by adding 
     at the end the following:
       ``(j) Use of Core Indicators for Other Programs.--In 
     addition to the programs carried out under chapters 4 and 5, 
     and consistent with the requirements of the applicable 
     authorizing laws, the Secretary shall use the indicators of 
     performance described in subparagraphs (A) and (B) of 
     subsection (b)(2) to assess the effectiveness of the programs 
     described in clauses (i), (ii), and (vi) of section 
     121(b)(1)(B) that are carried out by the Secretary.''.
       (h) Previous Definitions of Core Indicators and Incentive 
     Grants.--Sections 502 and 503 (29 U.S.C. 9272 and 9273) are 
     repealed.

     SEC. 123. 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 `` 
     such sums as may be necessary for each of fiscal years 2004 
     through 2009''.
       (b) Adult Employment and Training Activities.--Section 
     137(b) (29 U.S.C. 2872(b)) is amended by striking ``such sums 
     as may be necessary for each of fiscal years 1999 through 
     2003'' and inserting `` such sums as may be necessary for 
     each of fiscal years 2004 through 2009''.
       (c) Dislocated Worker Employment and Training Activities.--
     Section 137(c) (29 U.S.C. 2872(c)) is amended by striking 
     ``such sums as may be necessary for each of fiscal years 1999 
     through 2003'' and inserting ``such sums as may be necessary 
     for each of fiscal years 2004 through 2009''.

                         Subtitle C--Job Corps

     SEC. 131. JOB CORPS.

       (a) Eligibility.--Section 144(3) (29 U.S.C. 2884(3)) is 
     amended by adding at the end the following:
       ``(F) A child eligible for assistance under section 477 of 
     the Social Security Act.''.
       (b) Implementation of Standards and Procedures.--Section 
     145(a)(3) (29 U.S.C. 2885(a)(3)) is amended--
       (1) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (2) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) child welfare agencies that are responsible for 
     children in foster care and children eligible for assistance 
     under section 477 of the Social Security Act.''.
       (c) 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 at the end the following:
       ``(3) Employers outside of local area.--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.
       ``(4) Special rule for single local area states.--In the 
     case of a single local area State designated under section 
     116(b), the industry council shall include a representative 
     of the State Board.''.
       (d) Indicators of Performance.--Section 159 (29 U.S.C. 
     2983) is amended--
       (1) in subsection (c)--
       (A) by striking paragraph (1) and inserting the following:
       ``(1) Performance 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 of performance for youth activities 
     identified in section 136(b)(2)(A)(ii).'';
       (B) in paragraph (2), by striking ``measures'' each place 
     it appears and inserting ``indicators''; and
       (C) in paragraph (3)--
       (i) in the first sentence, by striking ``core performance 
     measures, as compared to the expected performance level for 
     each performance measure'' and inserting ``performance 
     indicators described in paragraph (1), as compared to the 
     expected level of performance established under paragraph (1) 
     for each performance measure''; and
       (ii) in the second sentence, by striking ``measures'' each 
     place it appears and inserting ``indicators''; and
       (2) in subsection (f)(2), in the first sentence, by 
     striking ``core performance measures'' and inserting 
     ``indicators of performance''.
       (e) Authorization of Appropriations.--Section 161 (29 
     U.S.C. 2901) is amended by striking ``1999 through 2003'' and 
     inserting ``2004 through 2009''.

                     Subtitle D--National Programs

     SEC. 141. NATIVE AMERICAN PROGRAMS.

       (a) Advisory Council.--Section 166(h)(4)(C) (29 U.S.C. 
     2911(h)(4)(C)) is amended to read as follows:
       ``(C) Duties.--The Council shall advise the Secretary on 
     the operation and administration of the programs assisted 
     under this section, including the selection of the individual 
     appointed as head of the unit established under paragraph 
     (1).''.
       (b) Assistance to Unique Native Populations in Alaska and 
     Hawaii.--Section 166(j) (29 U.S.C. 2911(j)) is amended to 
     read as follows:
       ``(j) Assistance to Unique Native Populations in Alaska and 
     Hawaii.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Secretary is authorized to provide assistance to 
     unique native populations who reside in Alaska or Hawaii to 
     improve job training and workforce investment activities.
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection 
     such sums as may be necessary for fiscal year 2004.''.
       (c) Performance Indicators.--Section 166 (29 U.S.C. 2911 is 
     amended by adding at the end the following':
       ``(c) Performance Indicators.--
       ``(1) Development of indicators.--The Secretary, in 
     consultation with the Native American Employment and Training 
     Council, shall develop a set of performance indicators and 
     standards which shall be applicable to programs under this 
     section.
       ``(2) Special considerations.--Such performance indicators 
     and standards shall take into account--
       ``(A) the purposes of the programs under this section as 
     described in paragraph (a)(1);
       ``(B) the needs of the groups served by this section, 
     including the differences in needs among such groups in 
     various geographic service areas; and
       ``(C) the economic circumstances of the communities served, 
     including differences in circumstances among various 
     geographic service areas.''.

     SEC. 142. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

       Section 167(d) (29 U.S.C. 2912(d)) is amended by inserting 
     ``(including permanent housing)'' after ``housing''.

     SEC. 143. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

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

     SEC. 144. 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--

[[Page 22381]]

       ``(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 subsection to assist eligible youth in 
     acquiring the skills, credentials, and employment experience 
     necessary to achieve the performance outcomes for youth 
     described in section 136
       ``(2) Eligible entity.--In this subsection, the term 
     `eligible entity' means--
       ``(A) a State or consortium of States;
       ``(B) a local board or consortium of local boards;
       ``(C) a recipient of a grant under section 166 (relating to 
     Native American programs); or
       ``(D) a public or private entity (including a consortium of 
     such entities) with expertise in the provision of youth 
     activities, applying in partnership with a local board or 
     consortium of local boards.
       ``(3) 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, and how 
     the eligible entity will collaborate with State and local 
     workforce investments systems established under this title in 
     the provision of such activities;
       ``(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 State, local, and private 
     resources that will be leveraged to provide the activities 
     described under subparagraph (A) in addition to funds 
     provided under this subsection, and a description of the 
     extent of the involvement of employers in the activities;
       ``(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); and
       ``(E) an assurance that the State board of each State in 
     which the proposed activities are to be carried out had the 
     opportunity to review the application, and including the 
     comments, if any, of the affected State boards on the 
     application, except that this subparagraph shall not apply to 
     an eligible entity described in paragraph (2)(C).
       ``(4) Factors for award.--
       ``(A) In general.--In awarding grants under this subsection 
     the Secretary shall consider--
       ``(i) the quality of the proposed activities;
       ``(ii) the goals to be achieved;
       ``(iii) the likelihood of successful implementation;
       ``(iv) the extent to which the proposed activities are 
     based on proven strategies or the extent to which the 
     proposed activities will expand the base of knowledge 
     relating to the provision of activities for youth;
       ``(v) the extent of collaboration with the State and local 
     workforce investment systems in carrying out the proposed 
     activities;
       ``(vi) the extent of employer involvement in the proposed 
     activities;
       ``(vii) whether there are other Federal and non-Federal 
     funds available for similar activities to the proposed 
     activities, and the additional State, local, and private 
     resources that will be provided to carry out the proposed 
     activities; and
       ``(viii) the quality of proposed activities in meeting the 
     needs of the youth to be served.
       ``(B) Equitable geographic distribution.--In awarding 
     grants under this subsection the Secretary shall ensure an 
     equitable distribution of such grants across geographically 
     diverse areas.
       ``(5) Use of funds.--
       ``(A) In general.--An eligible entity that receives a grant 
     under this subsection shall use the grant funds to carry out 
     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.
       ``(B) Activities.--The activities carried out pursuant to 
     subparagraph (A) may include the following:
       ``(i) Training and internships for out-of-school youth in 
     sectors of the economy experiencing, or projected to 
     experience, high growth.
       ``(ii) Dropout prevention activities for in-school youth.
       ``(iii) Activities designed to assist special youth 
     populations, such as court-involved youth and youth with 
     disabilities.
       ``(iv) Activities combining remediation of academic skills, 
     work readiness training, and work experience, and including 
     linkages to postsecondary education, apprenticeships, and 
     career-ladder employment.
       ``(v) Activities, including work experience, paid 
     internships, and entrepreneurial training, in areas where 
     there is a migration of youth out of the areas.
       ``(C) Participant eligibility.--Youth who are 14 years of 
     age through 21 years of age, as of the time the eligibility 
     determination is made, may be eligible to participate in 
     activities carried out under this subsection.
       ``(6) Grant period.--The Secretary shall make a grant under 
     this subsection for a period of 2 years and may renew the 
     grant, if the eligible entity has performed successfully, for 
     a period of not more than 3 succeeding years.
       ``(7) Matching funds required.--The Secretary shall require 
     that an eligible entity that receives a grant under this 
     subsection provide non-Federal matching funds in an amount to 
     be determined by the Secretary that is not less than 10 
     percent of the cost of activities carried out under the 
     grant. The Secretary may require that such non-Federal 
     matching funds be provided in cash resources, noncash 
     resources, or a combination of cash and noncash resources.
       ``(8) Evaluation.--The Secretary shall reserve not more 
     than 3 percent of the funds described in subsection (a)(1) to 
     provide technical assistance to, and conduct evaluations of 
     (using appropriate techniques as described in section 
     172(c)), the projects funded under this subsection.
       ``(c) Discretionary Grants for Youth Activities.--
       ``(1) In general.--From the funds described in subsection 
     (a)(2), the Secretary may award grants to eligible entities 
     to provide activities that will assist youth in preparing 
     for, and entering and retaining, employment.
       ``(2) Eligible entity.--In this subsection, the term 
     `eligible entity' means a public or private entity that the 
     Secretary determines would effectively carry out activities 
     relating to youth under this subsection.
       ``(3) Equitable distribution to rural areas.--In awarding 
     grants under this subsection the Secretary shall ensure an 
     equitable distribution of such grants to rural areas.
       ``(4) 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.
       ``(5) Use of funds.--
       ``(A) In general.--An eligible entity that receives a grant 
     under this subsection shall use the grant funds to carry 
     out--
       ``(i) 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;
       ``(ii) activities designed to assist in-school youth to 
     stay in school and gain work experience;
       ``(iii) activities designed to assist youth in economically 
     distressed areas; and
       ``(iv) such other activities that the Secretary determines 
     are appropriate to ensure that youth entering the workforce 
     have the skills needed by employers.
       ``(B) Participant eligibility.--Youth who are 14 years of 
     age through 21 years of age, as of the time the eligibility 
     determination is made, may be eligible to participate in 
     activities carried out under this subsection.
       ``(6) Matching funds required.--The Secretary shall require 
     that an eligible entity that receives a grant under this 
     subsection provide non-Federal matching funds in an amount to 
     be determined by the Secretary that is not less than 10 
     percent of the cost of activities carried out under the 
     grant. The Secretary may require that such non-Federal 
     matching funds be provided in cash resources, noncash 
     resources, or a combination of cash and noncash resources.
       ``(7) Evaluations.--The Secretary may require that an 
     eligible entity that receives a grant under this subsection 
     participate in an evaluation of activities carried out under 
     this subsection, including an evaluation using the techniques 
     described in section 172(c).''.

     SEC. 145. TECHNICAL ASSISTANCE.

       Section 170 (29 U.S.C. 2915) is amended--
       (1) in subsection (a)(1), by--
       (A) inserting ``the training of staff providing rapid 
     response services, the training of other staff of recipients 
     of funds under this title, the training of members of State 
     boards and local boards, peer review activities under this 
     title,'' after ``localities,''; and
       (B) striking ``from carrying out activities'' and all that 
     follows through the period and inserting ``to implement the 
     amendments made by the Workforce Investment Act Amendments of 
     2003.'';
       (2) in subsection (a)(2), by adding at the end the 
     following: ``The Secretary shall also hire staff qualified to 
     provide the assistance described in paragraph (1).'';
       (3) in subsection (b)(2), by striking the last sentence and 
     inserting ``Such projects shall be administered by the 
     Employment and Training Administration.''; and
       (4) by adding at the end the following:
       ``(c) Best Practices Coordination.--The Secretary shall--
       ``(1) establish a system through which States may share 
     information regarding best practices with regard to the 
     operation of workforce investment activities under this Act;

[[Page 22382]]

       ``(2) evaluate and disseminate information regarding best 
     practices and identify knowledge gaps; and
       ``(3) commission research under section 172 to address 
     knowledge gaps identified under paragraph (2).''.

     SEC. 146. 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 striking subparagraphs (A) through (E) and inserting 
     the following:
       ``(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 for career ladder jobs 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 maximum effectiveness 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 and jobs with wages leading to self-sufficiency;
       ``(D) projects that establish and implement innovative 
     integrated systems training programs targeted to dislocated, 
     disadvantaged incumbent workers that utilize equipment and 
     curriculum designed in partnership with local, regional, or 
     national industries that is computerized, individualized, 
     self-paced, and interactive that delivers skills and 
     proficiencies that are measurable to train workers for 
     employment in the operations, repair, and maintenance of 
     high-tech equipment that is used in integrated systems 
     technology;
       ``(E) projects carried out by States and local areas to 
     test innovative approaches to delivering employment-related 
     services;'';
       (C) in subparagraph (G), by striking ``and'' after the 
     semicolon; and
       (D) by striking subparagraph (H) and inserting the 
     following:
       ``(H) projects that provide retention grants to qualified 
     job training programs upon placement or retention of a low-
     income individual trained by the program in employment with a 
     single employer for a period of 1 year, if such employment 
     provides the low-income individual with an annual salary that 
     is not less than twice the poverty line applicable to the 
     individual;
       ``(I) targeted innovation projects that improve access to 
     and delivery of employment and training services, with 
     emphasis given to projects that incorporate advanced 
     technologies to facilitate the connection of individuals to 
     the information and tools they need to upgrade skills; and
       ``(J) projects that promote the use of distance learning, 
     enabling students to take courses through the use of media 
     technology such as videos, teleconferencing computers, and 
     the Internet.''; 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) Studies and reports.--
       ``(i) Net impact studies and reports.--

       ``(I) In general.--The Secretary shall conduct studies to 
     determine the net impacts of programs, services, and 
     activities carried out under this title.
       ``(II) Reports.--The Secretary shall prepare and 
     disseminate to the public reports containing the results of 
     the studies conducted under subclause (I).

       ``(ii) Study on resources available to assist out-of-school 
     youth.--The Secretary, in coordination with the Secretary of 
     Education, may conduct a study examining the resources 
     available at the Federal, State, and local levels to assist 
     out-of-school youth in obtaining the skills, credentials, and 
     work experience necessary to become successfully employed, 
     including the availability of funds provided through average 
     daily attendance and other methodologies used by States and 
     local areas to distribute funds.
       ``(iii) Study of industry-based certification and 
     credentials.--

       ``(I) In general.--The Secretary shall conduct a study 
     concerning the role and benefits of credentialing and 
     certification to businesses and workers in the economy and 
     the implications of certification to the services provided 
     through the workforce investment system. The study may 
     examine issues such as--

       ``(aa) the characteristics of successful credentialing and 
     certification systems that serve business and individual 
     needs;
       ``(bb) the relative proportions of certificates and 
     credentials attained with assistance from the public sector, 
     with private-sector training of new hires or incumbent 
     workers, and by individuals on their own initiative without 
     other assistance, respectively;
       ``(cc) the return on human capital investments from 
     occupational credentials and industry-based skill 
     certifications, including the extent to which acquisition of 
     such credentials or certificates enhances outcomes such as 
     entry into employment, retention, earnings (including the 
     number and amount of wage increases), career advancement, and 
     layoff aversion;
       ``(dd) the implications of the effects of skill 
     certifications and credentials to the types and delivery of 
     services provided through the workforce investment system;
       ``(ee) the role that Federal and State governments play in 
     fostering the development of and disseminating credentials 
     and skill standards; and
       ``(ff) the use of credentials by businesses to achieve 
     goals for workforce skill upgrading and greater operating 
     efficiency.

       ``(II) Report to congress.--The Secretary shall prepare and 
     submit to Congress a report containing the results of the 
     study conducted pursuant to subclause (I). Such report may 
     include any recommendations that the Secretary determines are 
     appropriate to include in such report relating to promoting 
     the acquisition of industry-based certification and 
     credentials, and the appropriate role of the Department of 
     Labor and the workforce investment system in supporting the 
     needs of business and individuals with respect to such 
     certification and credentials.

       ``(iv) Study of effectiveness of workforce investment 
     system in meeting business needs.--

       ``(I) In general.--Using funds available to carry out this 
     section jointly with funds available to the Secretary of 
     Commerce and Administrator of the Small Business 
     Administration, the Secretary, in coordination with the 
     Secretary of Commerce and the Administrator of the Small 
     Business Administration, may conduct a study of the 
     effectiveness of the workforce investment system in meeting 
     the needs of business, with particular attention to the needs 
     of small business, including in assisting workers to obtain 
     the skills needed to utilize emerging technologies. In 
     conducting the study, the Secretary, in coordination with the 
     Secretary of Commerce and the Administrator of the Small 
     Business Administration, may examine issues such as--

       ``(aa) methods for identifying the workforce needs of 
     businesses and how the requirements of small businesses may 
     differ from larger establishments;
       ``(bb) business satisfaction with the workforce investment 
     system, with particular emphasis on the satisfaction of small 
     businesses;
       ``(cc) the extent to which business is engaged as a 
     collaborative partner in the workforce investment system, 
     including the extent of business involvement as members of 
     State boards and local boards, and the extent to which such 
     boards and one-stop centers effectively collaborate with 
     business and industry leaders in developing workforce 
     investment strategies, including strategies to identify high 
     growth opportunities;
       ``(dd) ways in which the workforce investment system 
     addresses changing skill needs of business that result from 
     changes in technology and work processes;
       ``(ee) promising practices for serving small businesses;
       ``(ff) the extent and manner in which the workforce 
     investment system uses technology to serve business and 
     individual needs, and how uses of technology could enhance 
     efficiency and effectiveness in providing services; and
       ``(gg) the extent to which various segments of the labor 
     force have access to and utilize technology to locate job 
     openings and apply for jobs, and characteristics of 
     individuals utilizing such technology (such as age, gender, 
     race or ethnicity, industry sector, and occupational groups).

       ``(II) Report to congress.--The Secretary shall prepare and 
     submit to Congress a report containing the results of the 
     study described in clause (I). Such report may include any 
     recommendations the Secretary determines are appropriate to 
     include in such report, including ways to enhance the 
     effectiveness of the workforce investment system in meeting 
     the needs of business for skilled workers.''.

       (c) Conforming Amendment.--Section 171(d) (29 U.S.C. 
     2916(d)) is amended by striking the last sentence.
       (d) Waiver Authority To Carry Out Demonstrations and 
     Evaluations.--Section 171 (29 U.S.C. 2916) is amended by 
     adding at the end the following:
       ``(d) Waiver Authority.--In carrying out demonstration, 
     pilot, multiservice, research, and multistate projects under 
     this section and evaluations under section 172, the Secretary 
     may waive any provisions of this section that the Secretary 
     determines would prevent the Secretary from carrying out such 
     projects and evaluations, except for provisions relating to 
     wage and labor standards such as nondisplacement protections, 
     grievance procedures and judicial review, and 
     nondiscrimination provisions.''.
       (e) Next Generation Technologies.--Section 171 (29 U.S.C. 
     2916) is amended further by adding at the end the following:
       ``(e) Skill Certification Pilot Projects.--
       ``(1) Pilot projects.--In accordance with subsection (b) 
     and from funds appropriated pursuant to paragraph (10), the 
     Secretary of Labor shall establish and carry out not more 
     than 10 pilot projects to establish a system

[[Page 22383]]

     of industry-validated national certifications of skills, 
     including--
       ``(A) not more than 8 national certifications of skills in 
     high-technology industries, including biotechnology, 
     telecommunications, highly automated manufacturing (including 
     semiconductors), nanotechnology, and energy technology; and
       ``(B) not more than 2 cross-disciplinary national 
     certifications of skills in homeland security technology.
       ``(2) Grants to eligible entities.--In carrying out the 
     pilot projects, the Secretary of Labor shall make grants to 
     eligible entities, for periods of not less than 36 months and 
     not more than 48 months, to carry out the authorized 
     activities described in paragraph (7) with respect to the 
     certifications described in paragraph (1). In awarding grants 
     under this subsection the Secretary of Labor shall take into 
     consideration awarding grants to eligible entities from 
     diverse geographic areas, including rural areas.
       ``(3) Eligible entities.--
       ``(A) Definition of eligible entity.--In this subsection 
     the term `eligible entity' means an entity that shall work in 
     conjunction with a local board and shall include as a 
     principal participant one or more of the following:
       ``(i) A community college or consortium of community 
     colleges.
       ``(ii) An advanced technology education center.
       ``(iii) A local workforce investment board.
       ``(iv) A representative of a business in a target industry 
     for the certification involved.
       ``(v) A representative of an industry association, labor 
     organization, or community development organization.
       ``(B) History of demonstrated capability required.--To be 
     eligible to receive a grant under this subsection, an 
     eligible entity shall have a history of demonstrated 
     capability for effective collaboration with industry on 
     workforce development activities that is consistent with the 
     goals of this Act.
       ``(4) Applications.--To be eligible to receive a grant 
     under this subsection, an eligible entity shall submit an 
     application to the Secretary of Labor at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(5) -Criteria.--The Secretary of Labor shall establish 
     criteria, consistent with paragraph (6), for awarding grants 
     under this subsection.
       ``(6) Priority.--In selecting eligible entities to receive 
     grants under this subsection, the Secretary of Labor shall 
     give priority to eligible entities that demonstrate the 
     availability of and ability to provide matching funds from 
     industry or nonprofit sources. Such matching funds may be 
     provided in cash or in kind.
       ``(7) Authorized activities.--
       ``(A) In general.--An eligible entity that receives a grant 
     under this subsection shall use the funds made available 
     through the grant--
       ``(i) to facilitate the establishment of certification 
     requirements for a certification described in paragraph (1) 
     for an industry;
       ``(ii) to develop and initiate a certification program that 
     includes preparatory courses, course materials, procedures, 
     and examinations, for the certification; and
       ``(iii) to collect and analyze data related to the program 
     at the program's completion, and to identify best practices 
     (consistent with paragraph (8)) that may be used by local and 
     State workforce investment boards in the future.
       ``(B) Basis for requirements.--The certification 
     requirements shall be based on applicable skill standards for 
     the industry involved that have been developed by or linked 
     to national centers of excellence under the National Science 
     Foundation's Advanced Technological Education Program. The 
     requirements shall require an individual to demonstrate an 
     identifiable set of competencies relevant to the industry in 
     order to receive certification. The requirements shall be 
     designed to provide evidence of a transferable skill set that 
     allows flexibility and mobility of workers within a high 
     technology industry.
       ``(C) Relationship to training and education programs.--The 
     eligible entity shall ensure that--
       ``(i) a training and education program related to 
     competencies for the industry involved, that is flexible in 
     mode and timeframe for delivery and that meets the needs of 
     those seeking the certification, is offered; and
       ``(ii) the certification program is offered at the 
     completion of the training and education program.
       ``(D) Relationship to the associate degree.--The eligible 
     entity shall ensure that the certification program is 
     consistent with the requirements for a 2-year associate 
     degree.
       ``(E) Availability.--The eligible entity shall ensure that 
     the certification program is open to students pursuing 
     associate degrees, employed workers, and displaced workers.
       ``(8) Consultation.--The Secretary of Labor shall consult 
     with the Director of the National Science Foundation to 
     ensure that the pilot projects build on the expertise and 
     information about best practices gained through the 
     implementation of the National Science Foundation's Advanced 
     Technological Education Program.
       ``(9) Core components; guidelines; reports.--After 
     collecting and analyzing the data obtained from the pilot 
     programs, the Secretary of Labor shall--
       ``(A) establish the core components of a model high-
     technology certification program;
       ``(B) establish guidelines to assure development of a 
     uniform set of standards and policies for such programs;
       ``(C) submit and prepare a report on the pilot projects to 
     the Committee on Health, Education, Labor, and Pensions of 
     the Senate and the Committee on Education and the Workforce 
     of the House of Representatives; and
       ``(D) make available to the public both the data and the 
     report.
       ``(10) Authorization of appropriations.--In addition to 
     amounts authorized to be appropriated under section 174(b), 
     there is authorized to be appropriated $30,000,000 for fiscal 
     year 2004 to carry out this subsection.''.
       (f) Integrated Workforce Training Programs for Adults With 
     Limited English Proficiency.--Section 171 (29 U.S.C. 2916) is 
     amended further by adding at the end the following:
       ``(f) Integrated Workforce Training Programs for Adults 
     With Limited English Proficiency.--
       ``(1) Definitions.--In this subsection:
       ``(A) Integrated workforce training.--The term `integrated 
     workforce training' means training that integrates 
     occupational skills training with language acquisition.
       ``(B) Secretary.--The term `Secretary' means the Secretary 
     of Labor in consultation with the Secretary of Education.
       ``(2) Demonstration project.--In accordance with subsection 
     (b) and from funds appropriated pursuant to paragraph (11), 
     the Secretary shall establish and implement a national 
     demonstration project designed to both analyze and provide 
     data on workforce training programs that integrate English 
     language acquisition and occupational training.
       ``(3) Grants.--
       ``(A) In general.--In carrying out the demonstration 
     project, the Secretary shall make not less than 10 grants, on 
     a competitive basis, to eligible entities to provide the 
     integrated workforce training programs. In awarding grants 
     under this subsection the Secretary shall take into 
     consideration awarding grants to eligible entities from 
     diverse geographic areas, including rural areas.
       ``(B) Periods.--The Secretary shall make the grants for 
     periods of not less than 24 months and not more than 48 
     months.
       ``(4) Eligible entities.--
       ``(A) In general.--To be eligible to receive a grant under 
     this subsection, an eligible entity shall work in conjunction 
     with a local board and shall include as a principal 
     participant one or more of the following:
       ``(i) An employer or employer association.
       ``(ii) A nonprofit provider of English language 
     instruction.
       ``(iii) A provider of occupational or skills training.
       ``(iv) A community-based organization.
       ``(v) An educational institution, including a 2- or 4-year 
     college, or a technical or vocational school.
       ``(vi) A labor organization.
       ``(vii) A local board.
       ``(B) Expertise.--To be eligible to receive a grant under 
     this subsection, an eligible entity shall have proven 
     expertise in--
       ``(i) serving individuals with limited English proficiency, 
     including individuals with lower levels of oral and written 
     English; and
       ``(ii) providing workforce programs with training and 
     English language instruction.
       ``(5) Applications.--
       ``(A) In general.--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.
       ``(B) Contents.--Each application submitted under 
     subparagraph (A) shall--
       ``(i) contain information, including capability statements, 
     that demonstrates that the eligible entity has the expertise 
     described in paragraph (4)(B); and
       ``(ii) include an assurance that the program to be assisted 
     shall--

       ``(I) establish a generalized adult bilingual workforce 
     training and education model that integrates English language 
     acquisition and occupational training, and incorporates the 
     unique linguistic and cultural factors of the participants;
       ``(II) establish a framework by which the employer, 
     employee, and other relevant members of the eligible entity 
     can create a career development and training plan that 
     assists both the employer and the employee to meet their 
     long-term needs;
       ``(III) ensure that this framework takes into consideration 
     the knowledge, skills, and abilities of the employee with 
     respect to both the current and economic conditions of the 
     employer and future labor market conditions relevant to the 
     local area; and

[[Page 22384]]

       ``(IV) establish identifiable measures so that the progress 
     of the employee and employer and the relative efficacy of the 
     program can be evaluated and best practices identified.

       ``(6) -Criteria.--The Secretary of Labor shall establish 
     criteria for awarding grants under this subsection.
       ``(7) Integrated workforce training programs.--
       ``(A) Program components.--
       ``(i) Required components.--Each program that receives 
     funding under this subsection shall--

       ``(I) test an individual's English language proficiency 
     levels to assess oral and literacy gains from the beginning 
     and throughout program enrollment;
       ``(II) combine training specific to a particular occupation 
     or occupational cluster, with--

       ``(aa) English language instruction, such as instruction 
     through English as a Second Language program, or English for 
     Speakers of Other Languages;
       ``(bb) basic skills instruction; and
       ``(cc) supportive services;

       ``(III) effectively integrate public and private sector 
     entities, including the local workforce investment system and 
     its functions, to achieve the goals of the program; and
       ``(IV) require matching or in-kind resources from private 
     and nonprofit entities.

       ``(ii) Permissible components.--The program may offer other 
     services, as necessary to promote successful participation 
     and completion, including work-based learning, substance 
     abuse treatment, and mental health services.
       ``(B) Goal.--Each program that receives funding under this 
     subsection shall be designed to prepare limited English 
     proficient adults for and place such adults in employment in 
     growing industries with identifiable career ladder paths.
       ``(C) Program types.--In selecting programs to receive 
     funding under this subsection, the Secretary shall select 
     programs that meet 1 or more of the following criteria:
       ``(i) A program that--

       ``(I) serves unemployed, limited English proficient 
     individuals with significant work experience or substantial 
     education but persistently low wages; and
       ``(II) aims to prepare such individuals for and place such 
     individuals in higher paying employment, defined for purposes 
     of this subparagraph as employment that provides at least 75 
     percent of the median wage in the local area.

       ``(ii) A program that--

       ``(I) serves limited English proficient individuals with 
     lower levels of oral and written fluency, who are working but 
     at persistently low wages; and
       ``(II) aims to prepare such individuals for and place such 
     individuals in higher paying employment, through services 
     provided at the worksite, or at a location central to several 
     worksites, during work hours.

       ``(iii) A program that--

       ``(I) serves unemployed, limited English proficient 
     individuals with lower levels of oral and written fluency, 
     who have little or no work experience; and
       ``(II) aims to prepare such individuals for and place such 
     individuals in employment through services that include 
     subsidized employment, in addition to the components required 
     in subparagraph (A)(i).

       ``(iv) A program that includes funds from private and 
     nonprofit entities.
       ``(D) Program approaches.--In selecting programs to receive 
     funding under this subsection, the Secretary shall select 
     programs with different approaches to integrated workforce 
     training, in different contexts, in order to obtain 
     comparative data on multiple approaches to integrated 
     workforce training and English language instruction, to 
     ensure programs are tailored to characteristics of 
     individuals with varying skill levels and to assess how 
     different curricula work for limited English proficient 
     populations. Such approaches may include--
       ``(i) bilingual programs in which the workplace language 
     component and the training are conducted in a combination of 
     an individual's native language and English;
       ``(ii) integrated workforce training programs that combine 
     basic skills, language instruction, and job specific skills 
     training; or
       ``(iii) sequential programs that provide a progression of 
     skills, language, and training to ensure success upon an 
     individual's completion of the program.
       ``(8) Evaluation by eligible entity.--Each eligible entity 
     that receives a grant under this subsection for a program 
     shall carry out a continuous program evaluation and an 
     evaluation specific to the last phase of the program 
     operations.
       ``(9) Evaluation by secretary.--
       ``(A) In general.--The Secretary shall conduct an 
     evaluation of program impacts of the programs funded under 
     the demonstration project, with a random assignment, 
     experimental design impact study done at each worksite at 
     which such a program is carried out.
       ``(B) Data collection and analysis.--The Secretary shall 
     collect and analyze the data from the demonstration project 
     to determine program effectiveness, including gains in 
     language proficiency, acquisition of skills, and job 
     advancement for program participants.
       ``(C) Report.--The Secretary shall prepare and submit to 
     the Committee on Health, Education, Labor, and Pensions of 
     the Senate and the Committee on Education and the Workforce 
     of the House of Representatives, and make available to the 
     public, a report on the demonstration project, including the 
     results of the evaluation.
       ``(10) Technical assistance.--The Secretary shall provide 
     technical assistance to recipients of grants under this 
     subsection throughout the grant periods.
       ``(11) Authorization of appropriations.--In addition to 
     amounts authorized to be appropriated under section 174(b), 
     there is authorized to be appropriated $10,000,000 for fiscal 
     year 2004 to carry out this subsection.''.

     SEC. 147. NATIONAL DISLOCATED WORKER GRANTS.

       (a) In General.--Section 173 (29 U.S.C. 2918) is amended--
       (1) by striking the heading and inserting the following:

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

       and
       (2) in subsection (a)--
       (A) by striking ``national emergency grants'' and inserting 
     ``national dislocated worker grants'';
       (B) in paragraph (1), by striking ``subsection (c)'' and 
     inserting ``subsection (b)'';
       (C) in paragraph (3), by striking ``and'' after the 
     semicolon; and
       (D) by striking paragraph (4) and inserting the following:
       ``(4) to a State or entity (as defined in subsection 
     (b)(1)(B)) to carry out subsection (d), including providing 
     assistance to eligible individuals;
       ``(5) to a State or entity (as defined in subsection 
     (b)(1)(B)) to carry out subsection (e), including providing 
     assistance to eligible individuals; and
       ``(6) to provide additional assistance to a State board or 
     local board where a higher than average demand for employment 
     and training services for dislocated members of the Armed 
     Forces, or spouses of members of the Armed Forces as 
     described in subsection (c)(2)(A)(iv), exceeds State and 
     local resources for providing such services, and where such 
     programs are to be carried out in partnership with the 
     Departments of Defense and Veterans Affairs transition 
     assistance programs.''.
       (b) Administration and Additional Assistance.--Section 173 
     (29 U.S.C. 2918) is amended--
       (1) by striking subsection (b);
       (2) by redesignating subsections (c) through (g) as 
     subsections (b) through (f), respectively;
       (3) by striking subsection (d) (as redesignated by 
     paragraph (2)) and inserting the following:
       ``(d) Additional Assistance.--
       ``(1) In general.--From the amount appropriated and made 
     available to carry out this section for any program year, the 
     Secretary shall use not more than $20,000,000 to make grants 
     to States to provide employment and training activities under 
     section 134, in accordance with subtitle B.
       ``(2) Eligible states.--The Secretary shall make a grant 
     under paragraph (1) to a State for a program year if--
       ``(A) the amount of the allotment that would be made to the 
     State for the program year 2003 under the formula specified 
     in section 132(b)(1)(B) as such section was in effect on July 
     1, 2003, is greater than
       ``(B) the amount of the allotment that would be made to the 
     State for the program year under the formula specified in 
     section 132(b)(1)(B).
       ``(3) Amount of grants.--Subject to paragraph (1), the 
     amount of the grant made under paragraph (1) to a State for a 
     program year shall be based on the difference between--
       ``(A) the amount of the allotment that would be made to the 
     State for the program year 2003 under the formula specified 
     in section 132(b)(1)(B) as such section was in effect on July 
     1, 2003; and
       ``(B) the amount of the allotment that would be made to the 
     State for the program year under the formula specified in 
     section 132(b)(1)(B).'';
       (4) in subsection (e) (as redesignated by paragraph (2))--
       (A) in paragraph (1), by striking ``paragraph (4)(A)'' and 
     inserting ``paragraph (4)'';
       (B) in paragraph (2), by striking ``subsection (g)'' and 
     inserting ``subsection (e)'';
       (C) in paragraph (4), by striking ``subsection (g)'' and 
     inserting ``subsection (e)'';
       (D) in paragraph (5), by striking ``subsection (g)'' and 
     inserting ``subsection (e)''; and
       (E) in paragraph (6)--
       (i) by striking ``subsection (g)'' and inserting 
     ``subsection (e)''; and
       (ii) by striking ``subsection (c)(1)(B)'' and inserting 
     ``subsection (b)(1)(B)''; and
       (5) in subsection (f)(1) (as redesignated by paragraph 
     (2))--
       (A) by striking ``paragraph (4)(B)'' and inserting 
     ``paragraph (4)''; and
       (B) by striking ``subsection (f)(1)(A)'' and inserting 
     ``subsection (d)(1)(A)''.

[[Page 22385]]



     SEC. 148. 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) (29 U.S.C. 2919(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(i) such sums as may be necessary 
     for each of fiscal years 2004 through 2009.''.

                       Subtitle E--Administration

     SEC. 151. REQUIREMENTS AND RESTRICTIONS.

       Section 181(e) (29 U.S.C. 2931(e)) is amended by striking 
     ``economic development activities,''.

     SEC. 152. COST PRINCIPLES.

       The matter preceding clause (i) of section 184(a)(2)(B) (29 
     U.S.C. 2934(a)(2)(B)) is amended by striking ``section 
     134(a)(3)(B)'' and inserting ``section 134(a)(4)''.

     SEC. 153. REPORTS.

       Section 185(c) (29 U.S.C. 2935(c)) is amended--
       (1) in paragraph (2), by striking ``and'' after the 
     semicolon``
       (2) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(4) shall have the option to submit or disseminate 
     electronically any reports, records, plans, or any other data 
     that are required to be collected or disseminated under this 
     Act.''.

     SEC. 154. ADMINISTRATIVE PROVISIONS.

       (a) Annual Report.--Section 189(d) (29 U.S.C. 2939(d)) is 
     amended--
       (1) in paragraph (3), by striking ``and'' after the 
     semicolon;
       (2) by redesignating paragraph (4) as paragraph (5); and
       (3) by inserting after paragraph (3) the following:
       ``(4) the negotiated levels of performance of the States, 
     the States' requests for adjustments of such levels, and the 
     adjustments of such levels that are made; and''.
       (b) Program Year.--Section 189(g)(1)(B) (29 U.S.C. 
     2939(g)(1)(B)) is amended--
       (1) by striking ``The'' and inserting ``For fiscal years 
     preceding fiscal year 2005, the''; and
       (2) by inserting ``such'' after ``any''.
       (c) Availability.--Section 189(g)(2) (29 U.S.C. 2939(g)(2)) 
     is amended, in the first sentence--
       (1) by striking ``Funds'' and inserting ``Except as 
     otherwise provided in this paragraph, funds''; and
       (2) by striking ``each State receiving'' and inserting 
     ``each recipient of''.
       (d) General Waivers.--Section 189(i)(4) (29 U.S.C. 
     2939(i)(4)) is amended by adding at the end the following:
       ``(D) Expedited requests.--The Secretary shall expedite 
     requests for waivers of statutory or regulatory requirements 
     that have been approved for a State pursuant to subparagraph 
     (B), provided the requirements of this section have been 
     satisfied.''.

     SEC. 155. USE OF CERTAIN REAL PROPERTY.

       Section 193 (29 U.S.C. 2943) is amended to read as follows:

     ``SEC. 193. TRANSFER OF FEDERAL EQUITY IN STATE EMPLOYMENT 
                   SECURITY AGENCY REAL PROPERTY TO THE STATES.

       ``(a) Transfer of Federal Equity.--Notwithstanding any 
     other provision of law, any Federal equity acquired in real 
     property through grants to States awarded under title III of 
     the Social Security Act (42 U.S.C. 501 et seq.) or under the 
     Wagner-Peyser Act is transferred to the States that used the 
     grants for the acquisition of such equity. The portion of any 
     real property that is attributable to the Federal equity 
     transferred under this section shall be used to carry out 
     activities authorized under title III of the Social Security 
     Act or the Wagner-Peyser Act. Any disposition of such real 
     property shall be carried out in accordance with the 
     procedures prescribed by the Secretary and the portion of the 
     proceeds from the disposition of such real property that is 
     attributable to the Federal equity transferred under this 
     section shall be used to carry out activities authorized 
     under title III of the Social Security Act or the Wagner-
     Peyser Act.
       ``(b) Limitation on Use.--A State shall not use funds 
     awarded under title III of the Social Security Act or the 
     Wagner-Peyser Act to amortize the costs of real property that 
     is purchased by any State on or after the effective date of 
     this provision.''.

     SEC. 156. TABLE OF CONTENTS.

       Section 1(b) (29 U.S.C. 9201 note) is amended--
       (1) by striking the item relating to section 123 and 
     inserting the following:

``Sec. 123. Eligible providers of youth activities.'';
       (2) by striking the item relating to section 169 and 
     inserting the following:

``Sec. 169. Youth challenge grants.'';
       (3) by striking the item relating to section 193 and 
     inserting the following:

``Sec. 193. Transfer of Federal equity in State employment security 
              agency real property to the States.'';
       (4) by striking the item relating to section 173 and 
     inserting the following:

``Sec. 173. National dislocated worker grants.'';
       (5) by inserting after the item relating to section 212 the 
     following:

``Sec. 213. Incentive grants for States.'';
     and
       (6) by inserting after the item relating to section 243 the 
     following:

``Sec. 244. Integrated english literacy and civics education.''.

  TITLE II--AMENDMENTS TO THE ADULT EDUCATION AND FAMILY LITERACY ACT

     SEC. 201. SHORT TITLE; PURPOSE.

       (a) Short Title.--This title may be cited as the ``Adult 
     Education and Family Literacy Act Amendments of 2003''.
       (b) Purpose.--Section 202 of the Adult Education and Family 
     Literacy Act (20 U.S.C. 9201) is amended--
       (1) in paragraph (2), by striking ``and'' after the 
     semicolon;
       (2) in paragraph (3), by striking ``education.'' and 
     inserting ``education and in the transition to postsecondary 
     education; and''; and
       (3) by adding at the end the following:
       ``(4) assist immigrants and other individuals with limited 
     English proficiency in improving their reading, writing, 
     speaking, and mathematics skills and acquiring an 
     understanding of the American free enterprise system, 
     individual freedom, and the responsibilities of 
     citizenship.''.

     SEC. 202. DEFINITIONS.

       Section 203 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9202) is amended--
       (1) in paragraph (1)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``services or instruction below the postsecondary level'' and 
     inserting ``academic instruction and education services below 
     the postsecondary level that increase an individual's ability 
     to read, write, and speak in English and perform mathematics 
     skills''; and
       (B) by striking subparagraph (C)(i) and inserting the 
     following:
       ``(i) are basic skills deficient as defined in section 
     101;'';
       (2) in paragraph (2), by striking ``activities described in 
     section 231(b)'' and inserting ``programs and services which 
     include reading, writing, speaking, or mathematics skills, 
     workplace literacy activities, family literacy activities, 
     English language acquisition activities, or other activities 
     necessary for the attainment of a secondary school diploma or 
     its State recognized equivalent'';
       (3) in paragraph (5)--
       (A) by inserting ``an organization that has demonstrated 
     effectiveness in providing adult education, that may 
     include'' after ``means'';
       (B) in subparagraph (B), by striking ``of demonstrated 
     effectiveness'';
       (C) in subparagraph (C), by striking ``of demonstrated 
     effectiveness''; and
       (D) in subparagraph (I), by inserting ``or coalition'' 
     after ``consortium'';
       (4) in paragraph (6)--
       (A) by striking ``literacy program'' and inserting 
     ``language acquisition program'';
       (B) by striking ``literacy program'' and inserting 
     ``language acquisition program''; and
       (C) by inserting ``reading, writing, and speaking'' after 
     ``competence in'';
       (5) by redesignating paragraphs (7) through (18) as 
     paragraphs (8) through (19), respectively;
       (6) by inserting after paragraph (6) the following:
       ``(7) Essential components of reading instruction.--The 
     term `essential components of reading instruction' has the 
     meaning given the term in section 1208 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6368).''; and
       (7) by striking paragraph (19), as redesignated by 
     paragraph (4), and inserting the following:
       ``(19) Workplace literacy program.--The term `workplace 
     literacy program' means an educational program designed to 
     improve the productivity of the workforce through the 
     improvement of literacy skills that is offered by an eligible 
     provider in collaboration with an employer or an employee 
     organization at a workplace, at an off-site location, or in a 
     simulated workplace environment.''.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       Section 205 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9204) is amended--
       (1) by striking ``1999'' and inserting ``2004''; and
       (2) by striking ``2003'' and inserting ``2009''.

     SEC. 204. RESERVATION OF FUNDS; GRANTS TO ELIGIBLE AGENCIES; 
                   ALLOTMENTS.

       Section 211 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9211) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Reservation of Funds.--From the sum appropriated 
     under section 205 for a fiscal year, the Secretary--
       ``(1) shall reserve 1.5 percent to carry out section 242, 
     except that the amount so reserved shall not exceed 
     $10,000,000;
       ``(2) shall reserve 1.5 percent to carry out section 243, 
     except that the amount so reserved shall not exceed 
     $8,000,000;

[[Page 22386]]

       ``(3) shall make available, to the Secretary of Labor, 1.72 
     percent for incentive grants under section 136(i); and
       ``(4) shall reserve 12 percent of the amount that remains 
     after reserving funds under paragraphs (1), (2) and (3) to 
     carry out section 244.'';
       (2) by striking subsection (d) and inserting the following:
       ``(d) Qualifying Adult.--For the purpose of subsection 
     (c)(2), the term `qualifying adult' means an adult who--
       ``(1) is not less than 16 years of age;
       ``(2) is beyond the age of compulsory school attendance 
     under the law of the State or outlying area;
       ``(3) does not have a secondary school diploma or its 
     recognized equivalent (including recognized alternative 
     standards for individuals with disabilities); and
       ``(4) is not enrolled in secondary school.'';
       (3) in subsection (e)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Award basis.--The Secretary shall award grants 
     pursuant to paragraph (1) on a competitive basis and pursuant 
     to recommendations from the Pacific Region Educational 
     Laboratory in Honolulu, Hawaii.''; and
       (B) in paragraph (3), by striking ``shall'' and all that 
     follows through the period and inserting ``shall be eligible 
     to receive a grant under this title until the date when an 
     agreement for the extension of the United States education 
     assistance under the Compact of Free Association for each of 
     the Freely Associated States becomes effective.''; and
       (4) in subsection (f)--
       (A) in the heading, by inserting ``Provisions'' after 
     ``Hold-Harmless'';
       (B) by redesignating paragraph (2) as paragraph (3); and
       (C) by striking paragraph (1) and inserting the following:
       ``(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) 100 percent allotment.--An eligible agency shall 
     receive an allotment under this title that is equal to 100 
     percent of the allotment the eligible agency received for the 
     preceding fiscal year under this title if the eligible agency 
     received, for the preceding fiscal year, only an initial 
     allotment under subsection (c)(1) and did not receive an 
     additional allotment under subsection (c)(2).''.

     SEC. 205. PERFORMANCE ACCOUNTABILITY SYSTEM.

       Section 212 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9212) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)(A)(ii), by striking ``additional 
     indicators of performance (if any)'' and inserting 
     ``employment performance indicators'';
       (B) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) in clause (i), by striking ``Demonstrated'' and 
     inserting ``Measurable'';
       (II) by striking clause (ii) and inserting the following:

       ``(ii) Placement in, retention in, or completion of, 
     postsecondary education or other training programs.''; and

       (III) in clause (iii), by inserting ``(including recognized 
     alternative standards for individuals with disabilities)'' 
     after ``equivalent'';

       (ii) by redesignating subparagraph (B) as subparagraph (C);
       (iii) by inserting after subparagraph (A), the following:
       ``(B) Employment performance indicators.--An eligible 
     agency shall identify in the State plan individual 
     participant employment performance indicators, including 
     entry into unsubsidized employment, retention in unsubsidized 
     employment, and career advancement. The State workforce 
     investment board shall assist the eligible agency in 
     obtaining and using quarterly wage records to collect data 
     for such indicators, consistent with applicable Federal and 
     State privacy laws.'';
       (iv) in subparagraph (C), as redesignated by clause (ii), 
     by inserting ``relevant'' after ``additional''; and
       (v) by adding at the end the following:
       ``(D) Indicators for workplace literacy programs.--Special 
     accountability measures may be negotiated for workplace 
     literacy programs.''; and
       (C) in paragraph (3)--
       (i) in subparagraph (A)--

       (I) in clause (i)(II), by striking ``in performance'' and 
     inserting ``the agency's performance outcomes in an 
     objective, quantifiable, and measurable form'';
       (II) in clause (ii), by striking ``3 programs years'' and 
     inserting ``2 program years'';
       (III) in clause (iii), by striking ``first 3 years'' and 
     inserting ``first 2 years'';
       (IV) in clause (iii), by striking ``first 3 program years'' 
     and inserting ``first 2 program years'';
       (V) in clause (v), by striking ``4th and 5th'' and 
     inserting ``3rd and 4th'';
       (VI) in clause (v), by striking ``to the fourth'' and 
     inserting ``to the third'';
       (VII) in clause (v), by striking ``fourth and fifth'' and 
     inserting ``third and fourth''; and
       (VIII) in clause (vi), by striking ``(II)'' and inserting 
     ``(I)'';

       (ii) in subparagraph (B)--

       (I) by striking the heading and inserting ``Levels of 
     employment performance'';
       (II) by striking ``may'' and inserting ``shall''; and
       (III) by striking ``additional'' and inserting 
     ``employment''; and

       (iii) by adding at the end the following:
       ``(C) Alternative assessment systems.--Eligible agencies 
     may approve the use of assessment systems that are not 
     commercially available standardized systems if such systems 
     meet the Standards for Educational and Psychological Testing 
     issued by the Joint Committee on Standards for Educational 
     and Psychological Testing of the American Educational 
     Research Association, the American Psychological Association, 
     and the National Council on Measurement in Education.'';
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) by inserting ``the Governor, the State legislature, and 
     the State workforce investment board'' after ``Secretary''; 
     and
       (ii) by striking ``including'' and all that follows through 
     the period and inserting ``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.
       ``(C) The number of enrollees 16 to 18 years of age who 
     enrolled in adult education not later than 1 year after 
     participating in secondary school education.'';
       (B) in paragraph (2)(A), by inserting ``eligible providers 
     and'' after ``available to''; and
       (C) by adding at the end the following:
       ``(3) Data Access.--The report made available under 
     paragraph (2) shall indicate which eligible agencies did not 
     have access to State unemployment insurance wage data in 
     measuring employment performance indicators.''; and
       (3) by adding at the end the following:
       ``(d) Program Improvement.--
       ``(1) In general.--If the Secretary determines that an 
     eligible agency did not meet its adjusted levels of 
     performance for the core indicators of performance described 
     in subsection (b)(2)(A) for any program year, the eligible 
     agency shall--
       ``(A) work with the Secretary to develop and implement a 
     program improvement plan for the 2 program years succeeding 
     the program year in which the eligible agency did not meet 
     its adjusted levels of performance; and
       ``(B) revise its State plan under section 224, if 
     necessary, to reflect the changes agreed to in the program 
     improvement plan.
       ``(2) Further assistance.--If, after the period described 
     in paragraph (1)(A), the Secretary has provided technical 
     assistance to the eligible agency but determines that the 
     eligible agency did not meet its adjusted levels of 
     performance for the core indicators of performance described 
     in subsection (b)(2)(A), the Secretary may require the 
     eligible agency to make further revisions to the program 
     improvement plan described in paragraph (1). Such further 
     revisions shall be accompanied by further technical 
     assistance from the Secretary.''.

     SEC. 206. STATE ADMINISTRATION.

       Section 221(1) of the Adult Education and Family Literacy 
     Act (20 U.S.C. 9221(1)) is amended by striking ``and 
     implementation'' and inserting ``implementation, and 
     monitoring''.

     SEC. 207. STATE DISTRIBUTION OF FUNDS; MATCHING REQUIREMENT.

       Section 222 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9222) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``82.5'' the first place such term appears 
     and inserting ``80''; and
       (ii) by striking ``the 82.5 percent'' and inserting ``such 
     amount'';
       (B) in paragraph (2), by striking ``not more than 12.5 
     percent'' and inserting ``not more than 15 percent''; and
       (C) in paragraph (3), by striking ``$65,000'' and inserting 
     ``$75,000''; and
       (2) in subsection (b)(1), by striking ``equal to'' and 
     inserting ``that is not less than''.

     SEC. 208. STATE LEADERSHIP ACTIVITIES.

       Section 223 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9223) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``to develop or enhance the adult education system of the 
     State'' after ``activities'';
       (B) in paragraph (1), by striking ``instruction 
     incorporating'' and all that follows through the period and 
     inserting ``instruction incorporating the essential 
     components of reading instruction and instruction provided by 
     volunteers or by personnel of a State or outlying area.'';
       (C) in paragraph (2), by inserting ``, including 
     development and dissemination of instructional and 
     programmatic practices

[[Page 22387]]

     based on the most rigorous research available in reading, 
     writing, speaking, mathematics, English language acquisition 
     programs, distance learning and staff training'' after 
     ``activities'';
       (D) in paragraph (5), by striking ``monitoring and'';
       (E) by striking paragraph (6) and inserting the following:
       ``(6) The development and implementation of technology 
     applications, translation technology, or distance learning, 
     including professional development to support the use of 
     instructional technology.''; and
       (F) by striking paragraph (7) through paragraph (11) and 
     inserting the following:
       ``(7) Coordination with--
       ``(A) other partners carrying out activities authorized 
     under this Act;
       ``(B) existing support services, such as transportation, 
     child care, mental health services, and other assistance 
     designed to increase rates of enrollment in, and successful 
     completion of adult education and literacy activities, for 
     adults enrolled in such activities.
       ``(8) Developing and disseminating curricula, including 
     curricula incorporating the essential components of reading 
     instruction as they relate to adults.
       ``(9) The provision of assistance to eligible providers in 
     developing, implementing, and reporting measurable progress 
     in achieving the objectives of this subtitle.
       ``(10) The development and implementation of a system to 
     assist in the transition from adult basic education to 
     postsecondary education, including linkages with 
     postsecondary educational institutions.
       ``(11) Integration of literacy and English language 
     instruction with occupational skill training, and promoting 
     linkages with employers.
       ``(12) Activities to promote workplace literacy programs.
       ``(13) Activities to promote and complement local outreach 
     initiatives described in section 243(c)(2)(H).
       ``(14) In cooperation with efforts funded under sections 
     242 and 243, the development of curriculum frameworks and 
     rigorous content standards that--
       ``(A) specify what adult learners should know and be able 
     to do in the areas of reading and language arts, mathematics, 
     and English language acquisition; and
       ``(B) take into consideration the following:
       ``(i) State academic standards established under section 
     1111(b) of the Elementary and Secondary Education Act of 
     1965.
       ``(ii) The current adult skills and literacy assessments 
     used in the State.
       ``(iii) The core indicators of performance established 
     under section 212(b)(2)(A).
       ``(iv) Standards and academic requirements for enrollment 
     in non-remedial, for-credit, courses in State supported 
     postsecondary education institutions.
       ``(v) Where appropriate, the basic and literacy skill 
     content of occupational and industry skill standards widely 
     used by business and industry in the State.
       ``(15) In cooperation with efforts funded under sections 
     242 and 243, development and piloting of--
       ``(A) new assessment tools and strategies that identify the 
     needs and capture the gains of students at all levels, with 
     particular emphasis on--
       ``(i) students at the lowest achievement level;
       ``(ii) students who have limited English proficiency; and
       ``(iii) adults with learning disabilities;
       ``(B) options for improving teacher quality and retention; 
     and
       ``(C) assistance in converting research into practice.
       ``(16) The development and implementation of programs and 
     services to meet the needs of adult learners with learning 
     disabilities or limited English proficiency.
       ``(17) Other activities of statewide significance that 
     promote the purpose of this title.''; and
       (2) in subsection (c), by striking ``being State- or 
     outlying area-imposed'' and inserting ``being imposed by the 
     State or outlying area''.

     SEC. 209. STATE PLAN.

       Section 224 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9224) is amended--
       (1) in subsection (a)--
       (A) by striking the heading and inserting ``4-Year Plans''; 
     and
       (B) in paragraph (1), by striking ``5'' and inserting 
     ``4'';
       (2) in subsection (b)--
       (A) in paragraph (1), by inserting ``and the role of 
     provider and cooperating agencies in preparing the 
     assessment'' after ``serve'';
       (B) by striking paragraph (2) and inserting the following:
       ``(2) a description of how the eligible agency will address 
     the adult education and literacy needs identified under 
     paragraph (1) in each workforce development area of the 
     State, using funds received under this subtitle, as well as 
     other Federal, State, or local funds received in partnership 
     with other agencies for the purpose of adult literacy as 
     applicable;'';
       (C) in paragraph (3)--
       (i) by inserting ``and measure'' after ``evaluate'';
       (ii) by inserting ``and improvement'' after 
     ``effectiveness''; and
       (iii) by striking ``212'' and inserting ``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 subtitle 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 
     performance)'';
       (D) in paragraph (4), by striking ``will ensure the 
     improvement of'' and inserting ``improved'';
       (E) by redesignating paragraphs (5) through (12) as 
     paragraphs (6) through (13), respectively;
       (F) by inserting after paragraph (4) the following:
       ``(5) a description of how the eligible agency will improve 
     teacher quality, the professional development of eligible 
     providers, and instruction;'';
       (G) in paragraph (6) (as redesignated by subparagraph (E)), 
     by striking ``who'' and all that follows through the 
     semicolon and inserting ``that--
       ``(A) offers flexible schedules and coordinates with 
     necessary Federal, State, and local support services (such as 
     child care, transportation, mental health services, and case 
     management) to enable individuals, including individuals with 
     disabilities or individuals with other special needs, to 
     participate in adult education and literacy activities; and
       ``(B) attempts to coordinate with support services that are 
     not provided under this subtitle prior to using funds for 
     adult education and literacy activities provided under this 
     subtitle for support services;'';
       (H) in paragraph (10) (as redesignated by subparagraph 
     (E)), by striking ``plan'' and inserting ``plan, which 
     process--
       ``(A) shall include the State Workforce Investment Board, 
     the Governor, State officials representing public schools, 
     community colleges, welfare agencies, agencies that provide 
     services to individuals with disabilities, other State 
     agencies that promote or operate adult education and literacy 
     activities, and direct providers of such adult literacy 
     services;
       ``(B) may include consultation with the State agency for 
     higher education, institutions responsible for professional 
     development of adult education and literacy education program 
     instructors, institutions of higher education, 
     representatives of business and industry, refugee assistance 
     programs, and community-based organizations, as defined in 
     section 101;'';
       (I) in paragraph (11) (as redesignated by subparagraph 
     (E))--
       (i) by inserting ``assess potential population needs and'' 
     after ``will'';
       (ii) in subparagraph (A), by striking ``students'' and 
     inserting ``individuals'';
       (iii) in subparagraph (C), by striking ``and'' after the 
     semicolon; and
       (iv) by adding at the end the following:
       ``(E) the unemployed; and
       ``(F) those who are employed, but at levels below self-
     sufficiency, as defined in section 101.'';
       (J) in paragraph (12) (as redesignated by subparagraph 
     (E))--
       (i) by inserting ``and how the plan submitted under this 
     subtitle is coordinated with the plan submitted by the State 
     under title I'' after ``eligible agency''; and
       (ii) by striking ``and'' after the semicolon;
       (K) in paragraph (13) (as redesignated by subparagraph 
     (E)), by striking ``231(c)(1).'' and inserting ``231(c)(1), 
     including--
       ``(A) how the State will build the capacity of 
     organizations that provide adult education and literacy 
     activities; and
       ``(B) how the State will increase the participation of 
     business and industry in adult education and literacy 
     activities;''; and
       (L) by adding at the end the following:
       ``(14) a description of how the eligible agency will 
     consult with any State agency responsible for postsecondary 
     education to develop adult education programs and services 
     (including academic skill development and support services) 
     that prepare students to enter postsecondary education upon 
     completion of secondary school programs or their recognized 
     equivalent;
       ``(15) a description of how the eligible agency will 
     consult with the State agency responsible for workforce 
     development to develop adult education programs and services 
     that are designed to prepare students to enter the workforce; 
     and
       ``(16) a description of how the eligible agency will 
     improve the professional development of eligible providers of 
     adult education and literacy activities.'';
       (3) in subsection (c), by adding at the end the following: 
     ``At a minimum, such revision shall occur every 2 years.''; 
     and
       (4) in subsection (d)--
       (A) in paragraph (1), by inserting ``, the chief State 
     school officer, the State officer

[[Page 22388]]

     responsible for administering community and technical 
     colleges, and the State Workforce Investment Board'' after 
     ``Governor''; and
       (B) in paragraph (2), by striking ``comments'' and all that 
     follows through the period and inserting ``comments regarding 
     the State plan by the Governor, the chief State school 
     officer, the State officer responsible for administering 
     community and technical colleges, and the State Workforce 
     Investment Board, and any revision to the State plan, are 
     submitted to the Secretary.''.

     SEC. 210. PROGRAMS FOR CORRECTIONS EDUCATION AND OTHER 
                   INSTITUTIONALIZED INDIVIDUALS.

       Section 225 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9225) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``basic education'' and 
     inserting ``adult education and literacy activities'';
       (B) in paragraph (2) by inserting ``and'' after the 
     semicolon;
       (C) by striking paragraph (3); and
       (D) by redesignating paragraph (4) as paragraph (3); and
       (2) in subsection (d), by striking ``Definition of Criminal 
     Offender.--'' and inserting ``Definitions.--In this 
     section:''.

     SEC. 211. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

       Section 231 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9241) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``workplace literacy 
     services'' and inserting ``workplace literacy programs''; and
       (B) in paragraph (3), by striking ``literacy'' and 
     inserting ``language acquisition'';
       (2) in subsection (e)--
       (A) in paragraph (1), by inserting ``to be achieved 
     annually on the core indicators of performance and employment 
     performance indicators described in section 212(b)(2)'' after 
     ``outcomes'';
       (B) by striking paragraph (3) and inserting the following:
       ``(3) the commitment of the eligible provider to be 
     responsive to local needs and to serve individuals in the 
     community who were identified by the assessment as most in 
     need of adult literacy services, including individuals who 
     are low-income, have minimal literacy skills, have learning 
     disabilities, or have limited English proficiency;'';
       (C) in paragraph (4)(B), by striking ``, such as'' and all 
     that follows through the semicolon and inserting ``that 
     include the essential components of reading instruction;'';
       (D) in paragraph (5), by striking ``research'' and 
     inserting ``the most rigorous research available'';
       (E) in paragraph (7), by inserting ``, when appropriate and 
     based on the most rigorous research available,'' after ``real 
     life contexts'';
       (F) in paragraph (9), by inserting ``education, job-
     training, and social service'' after ``other available'';
       (G) in paragraph (10)--
       (i) by inserting ``coordination with Federal, State, and 
     local'' after ``schedules and''; and
     (ii) by striking ``and transportation'' and inserting ``, 
     transportation, mental health services, and case 
     management'';
       (H) in paragraph (11)--
       (i) by inserting ``measurable'' after ``report'';
       (ii) by striking ``eligible agency'';
       (iii) by inserting ``established by the eligible agency'' 
     after ``performance measures''; and
       (iv) by striking ``and'' after the semicolon;
       (I) in paragraph (12), by striking ``literacy programs.'' 
     and inserting ``language acquisition programs and civics 
     education programs;''; and
       (J) by adding at the end the following:
       ``(13) the capacity of the eligible provider to produce 
     information on performance results, including enrollments and 
     measurable participant outcomes;
       ``(14) whether reading, writing, speaking, mathematics, and 
     English language acquisition instruction provided by the 
     eligible provider are based on the best practices derived 
     from the most rigorous research available;
       ``(15) whether the eligible provider's applications of 
     technology and services to be provided are sufficient to 
     increase the amount and quality of learning and lead to 
     measurable learning gains within specified time periods; and
       ``(16) the capacity of the eligible provider to serve adult 
     learners with learning disabilities.''.

     SEC. 212. LOCAL APPLICATION.

       Section 232 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9242) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``consistent with the requirements of this 
     subtitle'' after ``spent''; and
       (B) by striking ``and'' after the semicolon;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) each of the demonstrations required under section 
     231(e).''.

     SEC. 213. LOCAL ADMINISTRATIVE COST LIMITS.

       Section 233 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9243) is amended--
       (1) in subsection (a)(2)--
       (A) by inserting ``and professional'' after ``personnel''; 
     and
       (B) by inserting ``development of measurable goals in 
     reading, writing, and speaking the English language, and in 
     mathematical computation,'' after ``development,''; and
       (2) in subsection (b)--
       (A) by inserting ``and professional'' after ``personnel''; 
     and
       (B) by inserting ``development of measurable goals in 
     reading, writing, and speaking the English language, and in 
     mathematical computation,'' after ``development,''.

     SEC. 214. ADMINISTRATIVE PROVISIONS.

       Section 241(b) of the Adult Education and Family Literacy 
     Act (20 U.S.C. 9251(b)) is amended--
       (1) in paragraph (1)(A)--
       (A) by striking ``adult education and literacy activities'' 
     both places such terms appear and inserting ``activities 
     under this subtitle''; and
       (B) by striking ``was'' and inserting ``were''; and
       (2) in paragraph (4)--
       (A) by inserting ``not more than'' after ``this subsection 
     for''; and
       (B) by striking ``only''.

     SEC. 215. NATIONAL INSTITUTE FOR LITERACY.

       Section 242 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9252) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``literacy'' and 
     inserting ``effective literacy programs for children, youth, 
     adults, and families'';
       (B) in paragraph (2), by inserting ``and disseminates 
     information on'' after ``coordinates''; and
       (C) by striking paragraph (3)(A) and inserting the 
     following:
       ``(A) coordinating and participating in the Federal effort 
     to identify and disseminate information on literacy that is 
     derived from scientifically based research, or the most 
     rigorous research available and effective programs that serve 
     children, youth, adults, and families.'';
       (2) by striking subsection (b)(3) and inserting the 
     following:
       ``(3) Recommendations.--The Interagency Group, in 
     consultation with the National Institute for Literacy 
     Advisory Board (in this section referred to as the `Board') 
     established under subsection (e), shall plan the goals of the 
     Institute and the implementation of any programs to achieve 
     the goals. The Board may also request a meeting of the 
     Interagency Group to discuss any recommendations the Board 
     may make.'';
       (3) in subsection (c)--
       (A) in paragraph (1)--
       (i) in subparagraph (A)--

       (I) by striking ``to establish'' and inserting ``to 
     maintain'';
       (II) in clause (i), by striking ``phonemic awareness, 
     systematic phonics, fluency, and reading comprehension'' and 
     inserting ``the essential components of reading 
     instruction'';
       (III) in clause (iii), by striking ``and'' after the 
     semicolon;
       (IV) in clause (iv), by inserting ``and'' after the 
     semicolon; and
       (V) by adding at the end the following:

       ``(v) a list of local adult education and literacy 
     programs;'';
       (ii) in subparagraph (C)--

       (I) by striking ``reliable and replicable research'' and 
     inserting ``reliable and replicable research as defined by 
     the Institute of Education Sciences''; and
       (II) by striking ``especially with the Office of 
     Educational Research and Improvement in the Department of 
     Education,'';

       (iii) in subparagraph (D), by striking ``phonemic 
     awareness, systematic phonics, fluency, and reading 
     comprehension based on'' and inserting ``the essential 
     components of reading instruction and'';
       (iv) in subparagraph (H), by striking ``and'' after the 
     semicolon;
       (v) in subparagraph (I), by striking the period at the end 
     and inserting a semicolon; and
       (vi) by adding at the end the following:
       ``(J) to work cooperatively with the Department of 
     Education to assist States that are pursuing the 
     implementation of standards-based educational improvements 
     for adults through the dissemination of training, technical 
     assistance, and related support and through the development 
     and dissemination of related standards-based assessment 
     instruments; and
       ``(K) to identify rigorous research on the effectiveness of 
     instructional practices and organizational strategies 
     relating to literacy programs on the acquisition of skills in 
     reading, writing, English acquisition, and mathematics.''; 
     and
       (B) by adding at the end the following:
       ``(3) Coordination.--In identifying the reliable and 
     replicable research the Institute will support, the Institute 
     shall use standards for research quality that are consistent 
     with those of the Institute of Education Sciences.'';
       (4) in subsection (e)--
       (A) in paragraph (1)(B)--

[[Page 22389]]

       (i) in clause (i), by striking ``literacy programs'' and 
     inserting ``language acquisition programs'';
       (ii) in clause (ii), by striking ``literacy programs'' and 
     inserting ``or have participated in or partnered with 
     workplace literacy programs'';
       (iii) in clause (iv), by inserting ``, including adult 
     literacy research'' after ``research'';
       (iv) in clause (vi), by striking ``and'' after the 
     semicolon;
       (v) in clause (vii), by striking the period at the end and 
     inserting ``; and''; and
       (vi) by adding at the end the following:
       ``(viii) institutions of higher education.'';
       (B) in paragraph (2)--
       (i) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (ii) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(D) review the biennial report submitted to Congress 
     pursuant to subsection (k).''; and
       (C) in paragraph (5), by striking the second sentence and 
     inserting the following: ``A recommendation of the Board may 
     be passed only by a majority of the Board's members present 
     at a meeting for which there is a quorum.''; and
       (5) in subsection (k)--
       (A) by striking ``Labor and Human Resources'' and inserting 
     ``Health, Education, Labor, and Pensions''; and
       (B) by striking ``The Institute shall submit a report 
     biennially to'' and inserting ``Not later than 1 year after 
     the date of enactment of the Adult Education and Family 
     Literacy Act Amendments of 2003, and biennially thereafter, 
     the Institute shall submit a report to''.

     SEC. 216. NATIONAL LEADERSHIP ACTIVITIES.

       Section 243 of the Adult Education and Family Literacy Act 
     (20 U.S.C. 9253) is amended to read as follows:

     ``SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

       ``(a) In General.--The Secretary shall establish and carry 
     out a program of national leadership activities to enhance 
     the quality of adult education and literacy programs 
     nationwide.
       ``(c) Permissive Activities.--The national leadership 
     activities described in subsection (a) may include the 
     following:
       ``(1) Technical assistance, including--
       ``(A) assistance provided to eligible providers in 
     developing and using performance measures for the improvement 
     of adult education and literacy activities, including family 
     literacy services;
       ``(B) assistance related to professional development 
     activities, and assistance for the purposes of developing, 
     improving, identifying, and disseminating the most successful 
     methods and techniques for providing adult education and 
     literacy activities, including family literacy services, 
     based on scientific evidence where available;
       ``(C) assistance in distance learning and promoting and 
     improving the use of technology in the classroom;
       ``(D) assistance in developing valid, measurable, and 
     reliable performance data, including data around employment 
     and employment outcome, and using performance information for 
     the improvement of adult education and literacy programs; and
       ``(E) assistance to help States, particularly low-
     performing States, meet the requirements of section 212.
       ``(2) A program of grants, contracts, or cooperative 
     agreements awarded on a competitive basis to national, 
     regional, or local networks of private nonprofit 
     organizations, public libraries, or institutions of higher 
     education to build the capacity of such networks' members to 
     meet the performance requirements of eligible providers under 
     this title and involve adult learners in program improvement.
       ``(3) Funding national leadership activities that are not 
     described in paragraph (1), either directly or through 
     grants, contracts, or cooperative agreements awarded on a 
     competitive basis to or with postsecondary educational 
     institutions, public or private organizations or agencies, or 
     consortia of such institutions, organizations, or agencies, 
     such as--
       ``(A) developing, improving, and identifying the most 
     successful methods and techniques for addressing the 
     education needs of adults, including instructional practices 
     using the essential components of reading instruction based 
     on the work of the National Institute of Child Health and 
     Human Development;
       ``(B) increasing the effectiveness of, and improving the 
     quality of, adult education and literacy activities, 
     including family literacy services;
       ``(C) carrying out research on national literacy basic 
     skill acquisition for adult learning, including estimating 
     the number of adults functioning at the lowest levels of 
     literacy proficiency;
       ``(D)(i) carrying out demonstration programs;
       ``(ii) disseminating best practices information, including 
     information regarding promising practices resulting from 
     federally funded demonstration programs; and
       ``(iii) developing and replicating best practices and 
     innovative programs, including--
       ``(I) the development of models for basic skill 
     certificates;
       ``(II) the identification of effective strategies for 
     working with adults with learning disabilities and with 
     adults with limited English proficiency;
       ``(III) integrated basic and workplace skills education 
     programs;
       ``(IV) coordinated literacy and employment services; and
       ``(V) postsecondary education transition programs;
       ``(E) providing for the conduct of an independent 
     evaluation and assessment of adult education and literacy 
     activities through studies and analyses conducted 
     independently through grants and contracts awarded on a 
     competitive basis, which evaluation and assessment shall 
     include descriptions of--
       ``(i) the effect of performance measures and other measures 
     of accountability on the delivery of adult education and 
     literacy activities, including family literacy services;
       ``(ii) the extent to which the adult education and literacy 
     activities, including family literacy services, increase the 
     literacy skills of adults (and of children, in the case of 
     family literacy services), lead the participants in such 
     activities to involvement in further education and training, 
     enhance the employment and earnings of such participants, 
     and, if applicable, lead to other positive outcomes, such as 
     reductions in recidivism in the case of prison-based adult 
     education and literacy activities;
       ``(iii) the extent to which the provision of support 
     services to adults enrolled in adult education and family 
     literacy programs increase the rate of enrollment in, and 
     successful completion of, such programs; and
       ``(iv) the extent to which different types of providers 
     measurably improve the skills of participants in adult 
     education and literacy programs;
       ``(F) supporting efforts aimed at capacity building of 
     programs at the State and local levels such as technical 
     assistance in program planning, assessment, evaluation, and 
     monitoring of activities carried out under this subtitle;
       ``(G) collecting data, such as data regarding the 
     improvement of both local and State data systems, through 
     technical assistance and development of model performance 
     data collection systems;
       ``(H) supporting the development of an entity that would 
     produce and distribute technology-based programs and 
     materials for adult education and literacy programs using an 
     interconnection system (as 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;
       ``(I) determining how participation in adult education and 
     literacy activities prepares individuals for entry into 
     postsecondary education and employment and, in the case of 
     prison-based services, has an effect on recidivism; and
       ``(J) other activities designed to enhance the quality of 
     adult education and literacy activities nationwide.''.

     SEC. 217. INTEGRATED ENGLISH LITERACY AND CIVICS EDUCATION.

       Chapter 4 of subtitle A of title II (29 U.S.C. 9251 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 244. INTEGRATED ENGLISH LITERACY AND CIVICS EDUCATION.

       ``(a) In General.--From funds made available under section 
     211(a)(4) for each fiscal year the Secretary shall award 
     grants to States, from allotments under subsection (b), for 
     integrated English literacy and civics education.
       ``(b) Allotment.--
       ``(1) In general.--Subject to paragraph (2), from amounts 
     made available under section 211(a)(4) for a fiscal year the 
     Secretary shall allocate--
       ``(A) 65 percent to the States on the basis of a State's 
     need for integrated English literacy and civics education as 
     determined by calculating each State's share of a 10-year 
     average of the Immigration and Naturalization Service data 
     for immigrants admitted for legal permanent residence for the 
     10 most recent years; and
       ``(B) 35 percent to the States on the basis of whether the 
     State experienced growth as measured by the average of the 3 
     most recent years for which Immigration and Naturalization 
     Service data for immigrants admitted for legal permanent 
     residence are available.
       ``(2) Minimum.--No State shall receive an allotment under 
     paragraph (1) in an amount that is less than $60,000.''.

     SEC. 218. TRANSITION.

       The Secretary shall take such steps as the Secretary 
     determines to be appropriate to provide for the orderly 
     transition to the authority of the Adult Education and Family 
     Literacy Act (as amended by this title) from any authority 
     under provisions of the Adult Education and Family Literacy 
     Act (as such Act was in effect on the day before the date of 
     enactment of the Adult Education and Family Literacy Act 
     Amendments of 2003).

            TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW

     SEC. 301. WAGNER-PEYSER ACT.

       (a) Conforming Amendment.--Section 2(3) of the Wagner-
     Peyser Act (29 U.S.C. 49a(3)) is amended by striking 
     ``section 134(c)'' and inserting ``section 121(e)''.
       (b) Colocation.--Section 3 of the Wagner-Peyser Act (29 
     U.S.C. 49b) is amended by adding at the end the following:

[[Page 22390]]

       ``(d) In order to avoid duplication of services and enhance 
     integration of services, employment services offices in each 
     State shall be colocated with comprehensive one-stop centers 
     established under title I of the Workforce Investment Act of 
     1998.''.
       (c) Cooperative Statistical Program.--Section 14 of the 
     Wagner-Peyser Act (29 U.S.C. 49l-1) is amended by striking 
     the section heading and all that follows through ``There'' 
     and inserting the following:

     ``SEC. 14. COOPERATIVE STATISTICAL PROGRAM.

       ``There''.
       (d) Workforce and Labor Market Information System.--Section 
     15 of the Wagner-Peyser Act (29 U.S.C. 49l-2) is amended--
       (1) by striking the section heading and inserting the 
     following:

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

       (2) by striking ``employment statistics system'' each place 
     it appears and inserting ``workforce and labor market 
     information system'';
       (3) in subsection (a)(1), by striking ``of employment 
     statistics'';
       (4) in subsection (b)(2)(E)--
       (A) in clause (i), by adding ``and'' at the end;
       (B) in clause (ii), by striking ``; and'' and inserting a 
     period; and
       (C) by striking clause (iii);
       (5) by striking subsections (c) and (d) and inserting the 
     following:
       ``(c) National Electronic Tools To Provide Services.--The 
     Secretary, in consultation with States, is authorized to 
     assist in the development of national electronic tools that 
     may be used to improve access to workforce information for 
     individuals through--
       ``(1) the one-stop delivery systems established under 
     section 121(e); and
       ``(2) such other delivery systems as the Secretary 
     determines to be appropriate.
       ``(d) Two-Year Plan.--The Secretary, working through the 
     Bureau of Labor Statistics, and in cooperation with the 
     States and with the assistance of the Employment and Training 
     Administration and other appropriate Federal agencies, shall 
     prepare a 2-year plan which shall be the mechanism for 
     achieving cooperative management of the nationwide workforce 
     and labor market information system described in subsection 
     (a) and the statewide workforce and labor market information 
     systems that comprise the nationwide system. The plan shall--
       ``(1) describe the steps the to be taken in the following 2 
     years to carry out the duties described in subsection (b)(2);
       ``(2) evaluate the performance of the system and recommend 
     needed improvements, with particular attention to the 
     improvements needed at the State and local levels; and
       ``(3) describe the involvement of States in the development 
     of the plan, pursuant to a process established by the 
     Secretary in cooperation with the States in accordance with 
     subsection (d).
       ``(e) Coordination With the States.--The Secretary, working 
     though the Bureau of Labor Statistics and in coordination 
     with the Employment and Training Administration, shall 
     consult at least annually with representatives of each of the 
     10 Federal regions of the Department of Labor, elected 
     (pursuant to a process established by the Secretary) by and 
     from the State workforce and labor market information 
     directors affiliated with the State agencies that perform the 
     duties described in subsection (e)(2).'';
       (6) in subsection (e)(2)--
       (A) in subparagraph (G), by adding ``and'' at the end;
       (B) by striking subparagraph (H); and
       (C) by redesignating subparagraph (I) as subparagraph (H); 
     and
       (7) in subsection (g), by striking ``1999 through 2004'' 
     and inserting ``2004 through 2009 to enable the Secretary to 
     carry out the provisions of this section through grants or 
     cooperative agreements with the States''.

                TITLE IV--REHABILITATION ACT AMENDMENTS

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Rehabilitation Act 
     Amendments of 2003''.

     SEC. 402. TECHNICAL AMENDMENTS TO TABLE OF CONTENTS.

       (a) Incentive Grants.--Section 1(b) of the Rehabilitation 
     Act of 1973 (29 U.S.C. 701 note) is amended by inserting 
     after the item relating to section 112 the following:

``Sec. 113. Incentive grants.''.
       (b) Independent Living Services for Older Individuals Who 
     Are Blind.--Section 1(b) of the Rehabilitation Act of 1973 
     (29 U.S.C. 701 note) is amended by striking the items 
     relating to sections 752 and 753 and inserting the following:

``Sec. 752. Training and technical assistance.
``Sec. 753. Program of grants.
``Sec. 754. Authorization of appropriations.''.

     SEC. 403. PURPOSE.

       Section 2(b) of the Rehabilitation Act of 1973 (29 U.S.C. 
     701(b)) is amended--
       (1) in paragraph (1)(F), by striking ``and'' after the 
     semicolon;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) to provide opportunities for employers and 
     rehabilitation service providers to provide meaningful input 
     at all levels of government to ensure successful employment 
     of individuals with disabilities.''.

     SEC. 404. DEFINITIONS.

       Section 7 of the Rehabilitation Act of 1973 (29 U.S.C. 705) 
     is amended--
       (1) in paragraph (2)(B)--
       (A) in the matter preceding clause (i), by inserting ``and 
     literacy services'' after ``supported employment''; and
       (B) in clause (iii), by inserting ``and literacy skills'' 
     after ``educational achievements'';
       (2) in paragraph (17)--
       (A) in subparagraph (C), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(E) maintaining individuals with disabilities in, or 
     transitioning individuals with disabilities to, community-
     based living.'';
       (3) by redesignating paragraphs (24) through (28), (29) 
     through (34), and (35) through (39), as paragraphs (25) 
     through (29), (31) through (36), and (38) through (42), 
     respectively;
       (4) by inserting after paragraph (23) the following:
       ``(24) Literacy.--The term `literacy' has the meaning given 
     the term in section 203 of the Adult Education and Family 
     Literacy Act (20 U.S.C. 9202).'';
       (5) by inserting after paragraph (29), as redesignated by 
     paragraph (3), the following:
       ``(30) Post-employment service.--The term `post-employment' 
     service means a service identified in section 103(a) that 
     is--
       ``(A) provided subsequent to the achievement of an 
     employment outcome; and
       ``(B) necessary for an individual to maintain, regain, or 
     advance in employment, consistent with the individual's 
     strengths, resources, priorities, concerns, abilities, 
     capabilities, interests, and informed choice.'';
       (6) by inserting after paragraph (36), as redesignated by 
     paragraph (3), the following:
       ``(37) Student with a disability.--
       ``(A) In general.--The term `student with a disability' 
     means an individual with a disability who attends an 
     elementary school or secondary school and who--
       ``(i) is not younger than 14 years of age;
       ``(ii) is not older than 21 years of age;
       ``(iii) has been determined to be eligible under section 
     102(a) for assistance under title I; and
       ``(iv)(I) is eligible for, and receiving, special education 
     and related services under part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.); or
       ``(II) is an individual with a disability, for purposes of 
     section 504.
       ``(B) Students with disabilities.--The term `students with 
     disabilities' means more than 1 student with a disability.''; 
     and
       (7) in paragraph (38)(A)(ii), as redesignated by paragraph 
     (3), by striking ``paragraph (36)(C)'' and inserting 
     ``paragraph (39)(C)''.

     SEC. 405. ADMINISTRATION OF THE ACT.

       Section 12(a)(1) of the Rehabilitation Act of 1973 (29 
     U.S.C. 709(a)(1)) is amended--
       (1) by inserting ``(A)'' after ``(1)'';
       (2) by striking the semicolon and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(B) provide technical assistance to the designated State 
     units on developing successful partnerships with 
     employers;''.

     SEC. 406. CARRYOVER.

       Section 19 of the Rehabilitation Act of 1973 (29 U.S.C. 
     716) is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``, section 509 (except as provided in 
     section 509(b))'';
       (B) by striking ``or (C)''; and
       (C) by striking ``752(b)'' and inserting ``753(b)''; and
       (2) by adding at the end the following:
       ``(c) Protection and Advocacy of Individual Rights.--
       ``(1) Appropriated amounts.--Notwithstanding any other 
     provision of law, any funds appropriated for a fiscal year to 
     carry out a grant program under section 509 (except as 
     provided in section 509(b)), including any funds reallotted 
     under such grant program, that are not obligated and expended 
     by recipients prior to the beginning of the succeeding fiscal 
     year shall remain available for obligation and expenditure by 
     such recipients during such succeeding fiscal year.
       ``(2) Program income.--Notwithstanding any other provision 
     of law, any amounts of program income received by recipients 
     under a grant program under section 509 that are not 
     obligated and expended by recipients prior to the beginning 
     of the fiscal year succeeding the fiscal year in which such 
     amounts were received, shall remain available for obligation 
     and expenditure by such recipients during any of the 4 
     succeeding fiscal years.''.

             Subtitle A--Vocational Rehabilitation Services

     SEC. 411. DECLARATION OF POLICY; AUTHORIZATION OF 
                   APPROPRIATIONS.

       Section 100(b)(1) of the Rehabilitation Act of 1973 (29 
     U.S.C. 720(b)(1)) is amended by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

     SEC. 412. STATE PLANS.

       Section 101(a) of the Rehabilitation Act of 1973 (29 U.S.C. 
     721(a)) is amended--

[[Page 22391]]

       (1) in paragraph (6)(B), by striking ``to employ and 
     advance in employment'' and inserting ``to recruit, employ, 
     and advance in employment'';
       (2) in paragraph (8)(A), by adding at the end the 
     following:
       ``(iii) Services identified in individualized work plan.--
     For purposes of clause (i), for an individual who receives 
     assistance under the Ticket to Work and Self-Sufficiency 
     Program established under section 1148 of the Social Security 
     Act (42 U.S.C. 1320b-19), comparable benefits and services 
     available under such program only include those benefits and 
     services identified in the individual's individualized work 
     plan developed by an employment network pursuant to such 
     section.'';
       (3) in paragraph (11)--
       (A) by striking subparagraph (D)(ii) and inserting the 
     following:
       ``(ii) transition planning by personnel of the designated 
     State agency and the State educational agency that will 
     facilitate the development and completion of the 
     individualized education programs under section 614(d) of the 
     Individuals with Disabilities Education Act (20 U.S.C. 
     1414(d)) and, as appropriate, the development and completion 
     of the individualized plan for employment, in order to 
     achieve post-school employment outcomes of students with 
     disabilities;''; and
       (B) by adding at the end the following:
       ``(G) Coordination with ticket to work and self-sufficiency 
     program.--The State plan shall provide that the designated 
     State unit will coordinate activities with any other State 
     agency that administers a Ticket to Work and Self-Sufficiency 
     Program established under section 1148 of the Social Security 
     Act (42 U.S.C. 1320b-19).''; and
       (4) in paragraph (20)--
       (A) by redesignating subparagraph (B) as subparagraph (D);
       (B) by inserting after subparagraph (A) the following:
       ``(B) Information on assistance for beneficiaries of 
     assistance under title ii or xvi of the social security 
     act.--The State plan shall include an assurance that the 
     designated State agency will make available to individuals 
     entitled to benefits under title II or XVI of the Social 
     Security Act (42 U.S.C. 401 et seq., 1381 et seq.) on the 
     basis of a disability or blindness, information on the 
     availability of--
       ``(i) medical assistance under the State medicaid program 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.);
       ``(ii) benefits under the medicare program under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.);
       ``(iii) assistance through benefits planning and assistance 
     programs under section 1149 of the Social Security Act (42 
     U.S.C. 1320b-20) and protection and advocacy programs under 
     section 1150 of the Social Security Act (42 U.S.C. 1320b-21); 
     and
       ``(iv) medical assistance under other federally-funded 
     programs.
       ``(C) Information for individuals under the ticket to work 
     program.--The State plan shall include an assurance that the 
     designated State agency will make available to individuals 
     entitled to benefits under title II or XVI of the Social 
     Security Act (42 U.S.C. 401 et seq., 1381 et seq.) on the 
     basis of a disability or blindness and eligible for 
     assistance under the Ticket to Work and Self-Sufficiency 
     Program established under section 1148 of the Social Security 
     Act (42 U.S.C. 1320b-19), general information regarding the 
     Ticket to Work and Self-Sufficiency Program and specific 
     information on how to contact the program manager of the 
     Ticket to Work and Self-Sufficiency Program to obtain 
     information on approved employment networks.''; and
       (C) in subparagraph (D)(ii), as redesignated by 
     subparagraph (A)--
       (i) in subclause (II), by inserting ``, to the maximum 
     extent possible,'' after ``point of contact''; and
       (ii) in subclause (III), by striking ``or regain'' and 
     inserting ``regain, or advance in''.

     SEC. 413. ELIGIBILITY AND INDIVIDUALIZED PLAN FOR EMPLOYMENT.

       Section 102 of the Rehabilitation Act of 1973 (29 U.S.C. 
     722) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking the semicolon at the 
     end and inserting ``, including a listing of all the 
     community resources (including resources from organizations 
     of individuals with disabilities), to the maximum extent 
     possible, to assist in the development of such individual's 
     individualized plan for employment to enable the individual 
     to make informed and effective choices in developing the 
     individualized plan for employment;''; and
       (ii) in subparagraph (D)--

       (I) in clause (i), by striking ``and'' after the semicolon;
       (II) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (III) by adding at the end the following:

       ``(iii) for individuals entitled to benefits under title II 
     or XVI of the Social Security Act (42 U.S.C. 401 et seq., 
     1381 et seq.) on the basis of a disability or blindness, 
     information on the availability of--
       ``(I) medical assistance under the State medicaid program 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.);
       ``(II) benefits under the medicare program under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.);
       ``(III) assistance through benefits planning and assistance 
     programs under section 1149 of the Social Security Act (42 
     U.S.C. 1320b-20) and protection and advocacy programs under 
     section 1150 of the Social Security Act (42 U.S.C. 1320b-21); 
     and
       ``(IV) medical assistance under other federally-funded 
     programs; and
       ``(iv) for individuals entitled to benefits under title II 
     or XVI of the Social Security Act (42 U.S.C. 401 et seq., 
     1381 et seq.) on the basis of a disability or blindness and 
     eligible for assistance under the Ticket to Work and Self-
     Sufficiency Program established under section 1148 of the 
     Social Security Act (42 U.S.C. 1320b-19), information--
       ``(I) on the options under the Ticket to Work and Self-
     Sufficiency Program; and
       ``(II) on how to contact the program manager of the Ticket 
     to Work and Self-Sufficiency Program who has contact 
     information on approved employment networks, the benefits 
     planning and assistance programs in the area, and the 
     protection and advocacy programs in the area.'';
       (B) in paragraph (2)(E)--
       (i) in clause (i)(II), by striking ``and'' after the 
     semicolon;
       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(iii) amended, as necessary, to include the post-
     employment services and service providers that are necessary 
     for the individual to maintain, regain, or advance in 
     employment, consistent with the individual's strengths, 
     resources, priorities, concerns, abilities, capabilities, 
     interests, and informed choice.''; and
       (C) in paragraph (3)--
       (i) in subparagraph (B)(i)(I), by striking ``and personal 
     assistance services'' and inserting ``mentoring services, and 
     personal assistance services'';
       (ii) in subparagraph (F)(ii), by striking ``and'' after the 
     semicolon;
       (iii) in subparagraph (G), by striking the period at the 
     end and inserting a semicolon; and
       (iv) by adding at the end the following:
       ``(H) for a student with a disability, the description--
       ``(i) in paragraph (3)(A), may be a description of the 
     student's projected post-school employment outcome; and
       ``(ii) in paragraph (3)(B), shall include the specific 
     transition services (including, as appropriate, work 
     experience and mentoring activities) needed to achieve the 
     student's employment outcome or projected employment outcome; 
     and
       ``(I) for an individual who is receiving assistance under 
     the Ticket to Work and Self-Sufficiency Program established 
     under section 1148 of the Social Security Act (42 U.S.C. 
     1320b-19), a list of services such individual receives from 
     an employment network other than the designated State 
     unit.''; and
       (2) in subsection (c)(7), by inserting ``that take into 
     consideration the informed choice of the individual,'' after 
     ``plan development,''.

     SEC. 414. VOCATIONAL REHABILITATION SERVICES.

       Section 103(a) of the Rehabilitation Act of 1973 (29 U.S.C. 
     723(a)) is amended--
       (1) in paragraph (5), by inserting ``literacy services,'' 
     after ``vocational adjustment services,'';
       (2) in paragraph (17), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (18), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(19) mentoring services.''.

     SEC. 415. STATE REHABILITATION COUNCIL.

       Section 105(b)(1)(A)(ix) of the Rehabilitation Act of 1973 
     (29 U.S.C. 725(b)(1)(A)(ix)) is amended to read as follows:
       ``(ix) in a State in which 1 or more projects provide 
     services under section 121, not less than 1 representative of 
     the directors of the projects;''.

     SEC. 416. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.

       Section 106(b)(2)(B)(i) of the Rehabilitation Act of 1973 
     (29 U.S.C. 726(b)(2)(B)(i)) is amended by striking ``, if 
     necessary'' and all that follows through the semicolon and 
     inserting ``if the State has not improved its performance to 
     acceptable levels, as determined by the Commissioner, direct 
     the State to make further revisions to the plan to improve 
     performance, which may include allocating a higher proportion 
     of the State's resources for services to individuals with 
     disabilities if the State's spending on such services is low 
     in comparison to spending on such services in comparable 
     agencies in other States;''.

     SEC. 417. STATE ALLOTMENTS.

       Section 110 of the Rehabilitation Act of 1973 (29 U.S.C. 
     730) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Reallotment.--
       ``(1) Determination.--Not later than 45 days prior to the 
     end of the fiscal year, the Commissioner shall determine, 
     after reasonable opportunity for the submission to the 
     Commissioner of comments by the State agency administering or 
     supervising the program established under this title, that 
     any

[[Page 22392]]

     payment of an allotment to a State under section 111(a) for 
     any fiscal year will not be utilized by such State in 
     carrying out the purposes of this title.
       ``(2) Formula.--
       ``(A) In general.--As soon as practicable but not later 
     than the end of the fiscal year, the Commissioner shall 
     reallot the amount available under paragraph (1) to other 
     States, consistent with subparagraphs (B) and (C), for 
     carrying out the purposes of this title to the extent the 
     Commissioner determines such other State will be able to use 
     such additional amount during that fiscal year or the 
     subsequent fiscal year for carrying out such purposes.
       ``(B) Formula.--
       ``(i) Eligible states.--The Commissioner shall reallot the 
     amount available under paragraph (1) for a fiscal year to 
     each State whose allotment under subsection (a) for such 
     fiscal year is less than such State's allotment under 
     subsection (a) for the immediately preceding fiscal year 
     increased by the percentage change in the funds available for 
     subsection (a) from the immediately preceding fiscal year.
       ``(ii) Amount.--

       ``(I) In general.--A State that is eligible to receive a 
     reallotment under clause (i) shall receive an amount for a 
     fiscal year from the amount available for reallotment under 
     paragraph (1) that is equal to the difference between--

       ``(aa) the amount such State received for such fiscal year; 
     and
       ``(bb) the amount such State was allotted under subsection 
     (a) for the immediately preceding fiscal year adjusted by the 
     percentage change in the funds available for subsection (a) 
     from the immediately preceding fiscal year.

       ``(II) Insufficient funds.--If the amount available for 
     reallotment under paragraph (1) is insufficient to provide 
     each State eligible to receive a reallotment with the amount 
     described in subclause (I), the amount reallotted to each 
     eligible State shall be determined by the Commissioner.

       ``(C) Remaining funds.--If there are funds remaining after 
     each State eligible to receive a reallotment under 
     subparagraph (B)(i) receives the amount described in 
     subparagraph (B)(ii), the Commissioner shall reallot the 
     remaining funds among the States requesting a reallotment.
       ``(3) Non-federal share.--The Commissioner shall reallot an 
     amount to a State under this subsection only if the State 
     will be able to make sufficient payments from non-Federal 
     sources to pay for the non-Federal share of the cost of 
     vocational rehabilitation services under the State plan for 
     the fiscal year for which the amount was appropriated.
       ``(4) Increase in allotment.--For the purposes of this 
     part, any amount made available to a State for any fiscal 
     year pursuant to this subsection shall be regarded as an 
     increase of such State's allotment (as determined under the 
     preceding provisions of this section) for such year.''; and
       (2) by striking subsection (c)(2) and inserting the 
     following:
       ``(2)(A) In this paragraph:
       ``(i) The term `appropriated amount' means the amount 
     appropriated under section 100(b)(1) for allotment under this 
     section.
       ``(ii) The term `covered year' means a fiscal year--
       ``(I) that begins after September 30, 2003; and
       ``(II) for which the appropriated amount exceeds the total 
     of--
       ``(aa) the appropriated amount for the preceding fiscal 
     year; and
       ``(bb) 0.1 percent of the appropriated amount for the 
     preceding fiscal year.
       ``(B) For each covered year, the sum referred to in 
     paragraph (1) shall be, as determined by the Secretary, the 
     lesser of--
       ``(i) the total of the sum reserved under this subsection 
     for the preceding fiscal year and 0.1 percent of the 
     appropriated amount for the covered year; and
       ``(ii) 1.5 percent of the appropriated amount for the 
     covered year.''.

     SEC. 418. CLIENT ASSISTANCE PROGRAM.

       Section 112 of the Rehabilitation Act of 1973 (29 U.S.C. 
     732) is amended--
       (1) in subsection (a), by striking ``States'' and inserting 
     ``agencies designated under subsection (c)'';
       (2) in subsection (e)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``The Secretary'' and 
     all that follows through the period and inserting the 
     following: ``After reserving funds under subparagraphs (E) 
     and (F), the Secretary shall allot the remainder of the sums 
     appropriated for each fiscal year under this section among 
     the agencies designated under subsection (c) within the 
     States on the basis of relative population of each State, 
     except that no such agency shall receive less than 
     $50,000.'';
       (ii) in subparagraph (B), by inserting ``the designated 
     agencies located in'' after ``each to'';
       (iii) in subparagraph (D)(i)--

       (I) by inserting ``the designated agencies located in'' 
     after ``$100,000 for''; and
       (II) by inserting ``the designated agencies located in'' 
     after ``$45,000 for''; and

       (iv) by adding at the end the following:
       ``(E)(i) Beginning on October 1, 2004, for any fiscal year 
     for which the amount appropriated to carry out this section 
     equals or exceeds $13,000,000, the Secretary shall reserve 
     funds appropriated under this section to make grants to the 
     protection and advocacy system serving the American Indian 
     Consortium to provide client assistance services in 
     accordance with this section. The amount of such grants shall 
     be the same amount as provided to territories under 
     subparagraph (B), as increased under clauses (i) and (ii) of 
     subparagraph (D).
       ``(ii) In this subparagraph:
       ``(I) The term `American Indian Consortium' has the meaning 
     given the term in section 102 of the Developmental 
     Disabilities Assistance and Bill of Rights Act of 2000 (42 
     U.S.C. 15002).
       ``(II) The term `protection and advocacy system' means a 
     protection and advocacy system established under subtitle C 
     of title I of the Developmental Disabilities Assistance and 
     Bill of Rights Act of 2000 (42 U.S.C. 15041 et seq.).
       ``(F) For any fiscal year for which the amount appropriated 
     to carry out this section equals or exceeds $14,000,000, the 
     Secretary shall reserve not less than 1.8 percent and not 
     more than 2.2 percent of such amount to provide training and 
     technical assistance to the programs established under this 
     section. Such training and technical assistance shall be 
     coordinated with funds available under section 
     509(c)(1)(A).'';
       (B) in paragraph (2)--
       (i) by striking ``State'' each place such term appears and 
     inserting ``designated agency''; and
       (ii) by striking ``States'' each place such term appears 
     and inserting ``designated agencies''; and
       (C) in paragraph (3), by striking ``Except as specifically 
     prohibited by or as otherwise provided in State law, the 
     Secretary shall pay'' and inserting ``The Secretary shall pay 
     directly'';
       (3) in subsection (f), by striking ``State'' and inserting 
     ``agency designated under subsection (c)''; and
       (4) in subsection (h), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

     SEC. 419. INCENTIVE GRANTS.

       Part B of title I of the Rehabilitation Act of 1973 (29 
     U.S.C. 730 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 113. INCENTIVE GRANTS.

       ``(a) Authority.--The Commissioner is authorized to make 
     incentive grants to States that, based on the criteria 
     established under subsection (b)(1), demonstrate--
       ``(1) a high level of performance; or
       ``(2) a significantly improved level of performance as 
     compared to the previous reporting period or periods.
       ``(b) Criteria.--
       ``(1) Establishment.--Not later than 180 days after the 
     date of enactment of this section, the Commissioner shall 
     establish, and publish in the Federal Register, criteria for 
     making grant awards under subsection (a).
       ``(2) Development and evaluation standards.--The criteria 
     under paragraph (1) shall--
       ``(A) be developed with input from State vocational 
     rehabilitation agencies and other vocational rehabilitation 
     stakeholders, including vocational rehabilitation consumers 
     and consumer organizations; and
       ``(B) be based upon the evaluation standards and 
     performance indicators established under section 106 and 
     other performance related measures that the Commissioner 
     determines to be appropriate.
       ``(c) Use of Funds.--A State that receives a grant under 
     subsection (a) shall use the grant funds for any approved 
     activities in the State's State plan submitted under section 
     101.
       ``(d) No Non-Federal Share Requirement.--The provisions of 
     sections 101(a)(3) and 111(a)(2) shall not apply to this 
     section.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2004 
     through 2009.''.

     SEC. 420. VOCATIONAL REHABILITATION SERVICES GRANTS.

       Section 121 of the Rehabilitation Act of 1973 (29 U.S.C. 
     741) is amended--
       (1) in subsection (a), in the first sentence, by inserting 
     ``, consistent with such individuals' strengths, resources, 
     priorities, concerns, abilities, capabilities, interests, and 
     informed choice, so that such individuals may prepare for, 
     and engage in, gainful employment'' before the period at the 
     end; and
       (2) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (ii) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(D) contains assurances that--
       ``(i) all decisions affecting eligibility for vocational 
     rehabilitation services, the nature and scope of available 
     services, and the provision of such services, will be made by 
     a representative of the tribal vocational rehabilitation 
     program; and
       ``(ii) such decisions will not be delegated to another 
     agency or individual.'';
       (B) in paragraph (3), by striking the first sentence and 
     inserting the following: ``An application approved under this 
     part that

[[Page 22393]]

     complies with the program requirements set forth in the 
     regulations promulgated to carry out this part shall be 
     effective for 5 years and shall be renewed for additional 5-
     year periods if the Commissioner determines that the grantee 
     demonstrated acceptable past performance and the grantee 
     submits a plan, including a proposed budget, to the 
     Commissioner that the Commissioner approves that identifies 
     future performance criteria, goals, and objectives.''; and
       (C) by striking paragraph (4) and inserting the following:
       ``(4) In allocating funds under this part, the Secretary 
     shall give priority to paying the continuation costs of 
     existing projects and may provide for increases in funding 
     for such projects as determined necessary.''.

     SEC. 421. GAO STUDIES.

       (a) Study on Title I and Ticket to Work.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study on the interaction of title I of 
     the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.) with 
     the Ticket to Work and Self-Sufficiency Program established 
     under section 1148 of the Social Security Act (42 U.S.C. 
     1320b-19), including the impact of the interaction on 
     beneficiaries, community rehabilitation programs, and State 
     vocational rehabilitation agencies.
       (2) Conduct of study.--In conducting the study under 
     paragraph (1), the Comptroller General of the United States 
     shall consult with all participants in the Ticket to Work and 
     Self-Sufficiency Program, including the Social Security 
     Administration, the Rehabilitation Services Administration, 
     ticketholders, State agencies, community rehabilitation 
     programs (including employment networks and nonemployment 
     networks), protection and advocacy agencies, MAXIMUS, and 
     organizations representing the interests of ticketholders.
       (3) Report to congress.--Not later than 18 months after the 
     date of enactment of this title, the Comptroller General of 
     the United States shall submit the study conducted pursuant 
     to this subsection to the appropriate committees of Congress.
       (b) Study on the Allotment Formula.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study on the relationship between the 
     State allotment formula under section 110 of the 
     Rehabilitation Act of 1973 (29 U.S.C. 730) and the ability of 
     States to provide vocational rehabilitation services in 
     accordance with the State's State plan under section 101 of 
     such Act.
       (2) Conduct of study.--In conducting the study under 
     paragraph (1), the Comptroller General of the United States 
     shall consult with appropriate entities.
       (3) Report to congress.--Not later than 12 months after the 
     date of enactment of this title, the Comptroller General of 
     the United States shall submit the study conducted pursuant 
     to this subsection to the appropriate committees of Congress.

                   Subtitle B--Research and Training

     SEC. 431. AUTHORIZATION OF APPROPRIATIONS.

       Section 201(a) of the Rehabilitation Act of 1973 (29 U.S.C. 
     761(a)) is amended--
       (1) in paragraph (1), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''; and
       (2) in paragraph (2), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

     SEC. 432. NATIONAL INSTITUTE ON DISABILITY AND REHABILITATION 
                   RESEARCH.

       Section 202(f)(1) of the Rehabilitation Act of 1973 (29 
     U.S.C. 762(f)(1)) is amended by striking ``Federal 
     employees'' and inserting ``Department of Education 
     employees''.

     SEC. 433. RESEARCH AND OTHER COVERED ACTIVITIES.

       Section 204(c)(2) of the Rehabilitation Act of 1973 (29 
     U.S.C. 764(c)(2)) is amended by striking ``$500,000'' and 
     inserting ``$750,000''.

     SEC. 434. REHABILITATION RESEARCH ADVISORY COUNCIL.

       Section 205(c) of the Rehabilitation Act of 1973 (29 U.S.C. 
     765(c)) is amended by adding at the end the following: ``The 
     Council also shall include a representative from the business 
     community who has experience with the vocational 
     rehabilitation system and hiring individuals with 
     disabilities.''.

     Subtitle C--Professional Development and Special Projects and 
                             Demonstrations

     SEC. 441. TRAINING.

       Section 302 of the Rehabilitation Act of 1973 (29 U.S.C. 
     772) is amended--
       (1) in subsection (b)(1)(B)(i), by striking ``or 
     prosthetics and orthotics'' and inserting ``prosthetics and 
     orthotics, rehabilitation for the blind, or orientation and 
     mobility instruction''; and
       (2) in subsection (i), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

     SEC. 442. DEMONSTRATION AND TRAINING PROGRAMS.

       Section 303 of the Rehabilitation Act of 1973 (29 U.S.C. 
     773) is amended--
       (1) by redesignating subsection (e) as subsection (f);
       (2) in subsection (f), as redesignated by paragraph (1), by 
     striking ``fiscal years 1999 through 2003'' and inserting 
     ``fiscal years 2004 through 2009''; and
       (3) by inserting after subsection (d) the following:
       ``(e) Access to Telework.--
       ``(1) Definition of telework.--In this subsection, the term 
     `telework' means to work from home and other telework sites 
     with the assistance of a computer and with reasonable 
     accommodations, including the necessary equipment to 
     facilitate successful work from home and other telework 
     sites.
       ``(2) Authorization of program.--The Commissioner is 
     authorized to make grants to States and governing bodies of 
     American Indian tribes located on Federal and State 
     reservations (and consortia of such governing bodies) to pay 
     for the Federal share of the cost of establishing or 
     expanding a telework program.
       ``(3) Application.--A State that desires to receive a grant 
     under this subsection shall submit an application to the 
     Commissioner at such time, in such manner, and containing 
     such information as the Commissioner may require.
       ``(4) Use of funds.--A State that receives a grant under 
     this subsection shall establish or expand a telework program 
     that shall provide loans or other alternative financing 
     mechanisms to individuals with disabilities to enable such 
     individuals to purchase computers or other equipment, 
     including adaptive equipment, that facilitates work from home 
     and other telework sites so that such individuals are able to 
     telework.
       ``(5) Annual report.--
       ``(A) In general.--A State that receives a grant under this 
     subsection shall submit an annual report to the Commissioner.
       ``(B) Contents.--The report under subparagraph (A) shall 
     include the following:
       ``(i) The characteristics of each individual with a 
     disability that receives a loan or other alternative 
     financing mechanism under the program, including information 
     about the individual such as the following:

       ``(I) Age.
       ``(II) Ethnicity.
       ``(III) Type of disability.
       ``(IV) Employment status at the time of application for a 
     loan or other alternative financing mechanism under this 
     subsection.
       ``(V) Whether the individual attempted to secure financial 
     support from other sources to enable the individual to 
     telework and, if so, a description of such sources.
       ``(VI) Whether the individual is working and, if so, 
     whether the individual teleworks, the occupation in which the 
     individual is working, the hourly salary the individual 
     receives, and the hourly salary of the individual prior to 
     receiving a loan or other alternative financing mechanism 
     under the program.
       ``(VII) Whether the individual has repaid the loan or other 
     alternative financing mechanism received under the program, 
     is in repayment status, is delinquent on repayments, or has 
     defaulted on the loan or other alternative financing 
     mechanism.

       ``(ii) Any other information that the Commissioner may 
     require.
       ``(6) Federal share.--The Federal share of the cost of 
     establishing a telework program shall be 10 percent of the 
     cost.''.

     SEC. 443. MIGRANT AND SEASONAL FARMWORKERS.

       Section 304(b) of the Rehabilitation Act of 1973 (29 U.S.C. 
     774(b)) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

     SEC. 444. RECREATIONAL PROGRAMS.

       Section 305 of the Rehabilitation Act of 1973 (29 U.S.C. 
     775) is amended--
       (1) in subsection (a)(1)(B), by striking ``construction of 
     facilities for aquatic rehabilitation therapy,''; and
       (2) in subsection (b), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

               Subtitle D--National Council on Disability

     SEC. 451. AUTHORIZATION OF APPROPRIATIONS.

       Section 405 of the Rehabilitation Act of 1973 (29 U.S.C. 
     785) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

                    Subtitle E--Rights and Advocacy

     SEC. 461. ARCHITECTURAL AND TRANSPORTATION BARRIERS 
                   COMPLIANCE BOARD.

       Section 502(j) of the Rehabilitation Act of 1973 (29 U.S.C. 
     792(j)) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

     SEC. 462. PROTECTION AND ADVOCACY OF INDIVIDUAL RIGHTS.

       Section 509 of the Rehabilitation Act of 1973 (29 U.S.C. 
     794e) is amended--
       (1) in subsection (g)(2), by striking ``was paid'' and 
     inserting ``was paid, except that program income generated 
     from the amount paid to an eligible system shall remain 
     available to such system for obligation during any succeeding 
     fiscal year''; and
       (2) in subsection (l), by striking ``fiscal years 1999 
     through 2003'' and inserting ``fiscal years 2004 through 
     2009''.

 Subtitle F--Employment Opportunities for Individuals With Disabilities

     SEC. 471. PROJECTS WITH INDUSTRY AUTHORIZATION OF 
                   APPROPRIATIONS.

       Section 612 of the Rehabilitation Act of 1973 (29 U.S.C. 
     795a) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

     SEC. 472. SERVICES FOR INDIVIDUALS WITH SIGNIFICANT 
                   DISABILITIES AUTHORIZATION OF APPROPRIATIONS.

       Section 628 of the Rehabilitation Act of 1973 (29 U.S.C. 
     795n) is amended by striking

[[Page 22394]]

     ``fiscal years 1999 through 2003'' and inserting ``fiscal 
     years 2004 through 2009''.

  Subtitle G--Independent Living Services and Centers for Independent 
                                 Living

     SEC. 481. STATE PLAN.

       Section 704 of the Rehabilitation Act of 1973 (42 U.S.C. 
     795c) is amended by adding at the end the following:
       ``(o) Promoting Full Access to Community Life.--The plan 
     shall describe how the State will provide independent living 
     services that promote full access to community life for 
     individuals with significant disabilities. The services shall 
     include, as appropriate, facilitating transitions from 
     nursing homes and other institutions, including institutions 
     serving individuals with cognitive disabilities, to 
     community-based residences, assisting individuals with 
     significant disabilities at risk of entering institutions to 
     remain in the community, and promoting home ownership among 
     individuals with significant disabilities.''.

     SEC. 482. STATEWIDE INDEPENDENT LIVING COUNCIL.

       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. 483. INDEPENDENT LIVING SERVICES AUTHORIZATION OF 
                   APPROPRIATIONS.

       Section 714 of the Rehabilitation Act of 1973 (29 U.S.C. 
     796e-3) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

     SEC. 484. PROGRAM AUTHORIZATION.

       Section 721 of the Rehabilitation Act of 1973 (42 U.S.C. 
     796f) is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) Allotments to States.--
       ``(1) Definitions.--In this subsection:
       ``(A) Additional appropriation.--The term `additional 
     appropriation' means the amount (if any) by which the 
     appropriation for a fiscal year exceeds the total of--
       ``(i) the amount reserved under subsection (b) for that 
     fiscal year; and
       ``(ii) the appropriation for fiscal year 2003.
       ``(B) Appropriation.--The term `appropriation' means the 
     amount appropriated to carry out this part.
       ``(C) Base appropriation.--The term `base appropriation' 
     means the portion of the appropriation for a fiscal year that 
     is equal to the lesser of--
       ``(i) an amount equal to 100 percent of the appropriation, 
     minus the amount reserved under subsection (b) for that 
     fiscal year; or
       ``(ii) the appropriation for fiscal year 2003.
       ``(2) Allotments to states from base appropriation.--After 
     the reservation required by subsection (b) has been made, the 
     Commissioner shall allot to each State whose State plan has 
     been approved under section 706 an amount that bears the same 
     ratio to the base appropriation as the amount the State 
     received under this subsection for fiscal year 2003 bears to 
     the total amount that all States received under this 
     subsection for fiscal year 2003.
       ``(3) Allotments to states of additional appropriation.--
     From any additional appropriation for each fiscal year, the 
     Commissioner shall allot to each State whose State plan has 
     been approved under section 706 an amount equal to the sum 
     of--
       ``(A) an amount that bears the same ratio to 50 percent of 
     the additional appropriation as the population of the State 
     bears to the population of all States; and
       ``(B) \1/56\ of 50 percent of the additional 
     appropriation.''; and
       (2) by adding at the end the following:
       ``(e) Carryover Authority.--Any amount paid to an agency to 
     operate a center for independent living under this chapter 
     for a fiscal year and any amount of program income that 
     remains unobligated at the end of such year shall remain 
     available to such agency for obligation during the next 2 
     fiscal years for the purposes for which such amount was 
     paid.''.

     SEC. 485. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES 
                   IN WHICH FEDERAL FUNDING EXCEEDS STATE FUNDING.

       Section 722(c) of the Rehabilitation Act of 1973 (29 U.S.C. 
     796f-1(c)) is amended by striking ``by September 30, 1997'' 
     and inserting ``during the preceding year''.

     SEC. 486. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES 
                   IN WHICH STATE FUNDING EQUALS OR EXCEEDS 
                   FEDERAL FUNDING.

       Section 723(c) of the Rehabilitation Act of 1973 (29 U.S.C. 
     796f-2(c)) is amended by striking ``by September 30, 1997'' 
     and inserting ``during the preceding year''.

     SEC. 487. STANDARDS AND ASSURANCES FOR CENTERS FOR 
                   INDEPENDENT LIVING.

       Section 725(b) of the Rehabilitation Act of 1973 (29 U.S.C. 
     796f-4(b)) is amended--
       (1) in paragraph (4), by striking ``disabilities.'' and 
     inserting ``disabilities, including maintaining individuals 
     with disabilities in, or transitioning individuals with 
     disabilities to, community-based living.''; and
       (2) by adding at the end the following:
       ``(8) Promoting full access to community life.--The center 
     shall provide independent living services that promote full 
     access to community life for individuals with significant 
     disabilities. The services shall include, as appropriate, 
     facilitating transitions from nursing homes and other 
     institutions, including institutions serving individuals with 
     cognitive disabilities, to community-based residences, 
     assisting individuals with significant disabilities at risk 
     of entering institutions to remain in the community, and 
     promoting home ownership among individuals with significant 
     disabilities.''.

     SEC. 488. CENTERS FOR INDEPENDENT LIVING AUTHORIZATION OF 
                   APPROPRIATIONS.

       Section 727 of the Rehabilitation Act of 1973 (29 U.S.C. 
     796f-6) is amended by striking ``fiscal years 1999 through 
     2003'' and inserting ``fiscal years 2004 through 2009''.

     SEC. 489. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS 
                   WHO ARE BLIND.

       Chapter 2 of title VII of the Rehabilitation Act of 1973 
     (29 U.S.C. 796j et seq.) is amended--
       (1) by redesignating sections 752 and 753 as sections 753 
     and 754, respectively; and
       (2) by inserting after section 751 the following:

     ``SEC. 752. TRAINING AND TECHNICAL ASSISTANCE.

       ``(a) Grants; Contracts; Other Arrangements.--For any 
     fiscal year for which the funds appropriated to carry out 
     this chapter exceed the funds appropriated to carry out this 
     chapter for fiscal year 2003, the Commissioner shall first 
     reserve from such excess, to provide training and technical 
     assistance to eligible entities for such fiscal year, not 
     less than 1.8 percent, and not more than 2 percent, of the 
     funds appropriated to carry out this chapter for the fiscal 
     year involved.
       ``(b) Allocation.--From the funds reserved under subsection 
     (a), the Commissioner shall make grants to, and enter into 
     contracts and other arrangements with, entities that 
     demonstrate expertise in the provision of services to older 
     individuals who are blind to provide training and technical 
     assistance with respect to planning, developing, conducting, 
     administering, and evaluating independent living programs for 
     older individuals who are blind.
       ``(c) Funding Priorities.--The Commissioner shall conduct a 
     survey of designated State agencies that receive grants under 
     section 753 regarding training and technical assistance needs 
     in order to determine funding priorities for grants, 
     contracts, and other arrangements under this section.
       ``(d) Review.--To be eligible to receive a grant or enter 
     into a contract or other arrangement under this section, an 
     eligible entity shall submit an application to the 
     Commissioner at such time, in such manner, containing a 
     proposal to provide such training and technical assistance, 
     and containing such additional information as the 
     Commissioner may require.
       ``(e) Prohibition on Combined Funds.--No funds reserved by 
     the Commissioner under this section may be combined with 
     funds appropriated under any other Act or part of this Act if 
     the purpose of combining funds is to make a single 
     discretionary grant or a single discretionary payment, unless 
     such funds appropriated under this chapter are separately 
     identified in such grant or payment and are used for the 
     purposes of this chapter.''.

     SEC. 490. PROGRAM OF GRANTS.

       Section 753 of the Rehabilitation Act of 1973, as 
     redesignated by section 489, is amended--
       (1) in subsection (g), by inserting ``, or contracts 
     with,'' after ``grants to'';
       (2) by striking subsection (h);
       (3) by redesignating subsections (i) and (j) as subsections 
     (h) and (i), respectively;
       (4) in subsection (b), by striking ``section 753'' and 
     inserting ``section 754'';
       (5) in subsection (c)--
       (A) in paragraph (1), by striking ``section 753'' and 
     inserting ``section 754''; and
       (B) in paragraph (2)--
       (i) by striking ``subsection (i)'' and inserting 
     ``subsection (h)''; and
       (ii) by striking ``subsection (j)'' and inserting 
     ``subsection (i)'';
       (6) in subsection (h), as redesignated by paragraph (3)--
       (A) in paragraph (1), by striking ``subsection (j)(4)'' and 
     inserting ``subsection (i)(4)''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A)(vi), by adding ``and'' after the 
     semicolon;
       (ii) in subparagraph (B)(ii)(III), by striking ``; and'' 
     and inserting a period; and
       (iii) by striking subparagraph (C); and
       (7) in subsection (i), as redesignated by paragraph (3)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Minimum allotment.--
       ``(A) States.--In the case of the several States, the 
     District of Columbia, and the Commonwealth of Puerto Rico, 
     the amount referred to in paragraph (1)(A) for a fiscal year 
     is the greater of--
       ``(i) $350,000;
       ``(ii) an amount equal to the amount the State, the 
     District of Columbia, or the Commonwealth of Puerto Rico 
     received to carry out this chapter for fiscal year 2003; or
       ``(iii) an amount equal to \1/3\ of 1 percent of the amount 
     appropriated under section 754, and not reserved under 
     section 752, for the

[[Page 22395]]

     fiscal year and available for allotments under subsection 
     (a).
       ``(B) Certain territories.--In the case of Guam, American 
     Samoa, the United States Virgin Islands, and the Commonwealth 
     of the Northern Mariana Islands, the amount referred to in 
     paragraph (1)(A) for a fiscal year is $60,000.'';
       (B) in paragraph (3)(A), by striking ``section 753'' and 
     inserting ``section 754, and not reserved under section 
     752,''; and
       (C) in paragraph (4)(B)(i), by striking ``subsection (i)'' 
     and inserting ``subsection (h)''.

     SEC. 491. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS 
                   WHO ARE BLIND AUTHORIZATION OF APPROPRIATIONS.

       Section 754 of the Rehabilitation Act of 1973, as 
     redesignated by section 489, is amended by striking ``fiscal 
     years 1999 through 2003'' and inserting ``fiscal years 2004 
     through 2009''.

                       Subtitle H--Miscellaneous

     SEC. 495. 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 the Helen Keller 
     National Center 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, at the discretion of the 
     Secretary, 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.
                                 ______
                                 
      By Mr. ALEXANDER (for himself, Mr. Schumer, Mr. Burns, Mr. 
        Sessions, Mr. Graham of South Carolina, Mr. Inhofe, Mr. 
        Roberts, Mr. Enzi, Mr. Thomas, Mr. Craig, Mr. Allard, Mr. 
        Coleman, Mr. Cochran, Mr. Bunning, Mr. Cornyn, Mr. McConnell, 
        Mrs. Hutchison, Mr. Bennett, Mr. Brownback, Mr. Voinovich, Mr. 
        Lott, Mr. Domenici, Ms. Murkowski, Mr. McCain, Mr. Kyl, Mr. 
        Ensign, Mrs. Dole, Mr. Santorum, Mr. Grassley, Mr. Allen, and 
        Mr. Chambliss):
  S. 1628. A bill to prescribe the oath of renunciation and allegiance 
for purposes of the Immigration and Nationality Act; to the Committee 
on the Judiciary.
  Mr. ALEXANDER. Mr. President, today is Citizenship Day. On this day 
in 1787 the Constitution of the United States was signed. In 1952, 
Congress passed a law designating Citizenship Day on this day with the 
intent of recognizing those who had become American citizens during the 
preceding year.
  In the ceremony where an immigrant becomes a naturalized citizen of 
this country, where he or she becomes a new American, he or she swears 
an oath of renunciation and allegiance.
  Last week, on September 11, I noted that the oath of allegiance is 
currently a matter of mere Federal regulation and not a matter of law. 
I said that Congress ought to enshrine the oath in law.
  Today, on behalf of Mr. Burns, Mr. Sessions, and 30 Members of the 
Senate, I rise to introduce legislation to do precisely that--to make 
the current oath of allegiance the law of the land. Doing so will give 
the oath of allegiance the same status enjoyed by other key symbols and 
statements of being an American--the American flag, the Pledge of 
Allegiance, the national anthem, and our national motto. All these 
symbols and statements have been specifically approved by Congress and 
are now a matter of law. The oath of allegiance ought to be treated 
with the same dignity.
  The Bureau of Citizenship and Immigration Services--or BCIS--an 
agency of the Department of Homeland Security, was recently planning to 
change the oath of allegiance that immigrants take to become a citizen 
of this Nation. While those changes seem now to be on hold, it seems 
inappropriate to me that the BCIS, or any other Government agency, no 
matter how well intentioned, should have the power to alter the oath 
without congressional approval.
  In the first 5 months of this fiscal year, 166,968 immigrants took 
the oath and were naturalized as new citizens of this country.
  The oath assumed its present form in the 1950s and was first adopted 
in Federal regulations in 1929. But some of the language dates all the 
way back to 1790.
  Yesterday, I attended a naturalization ceremony for new citizens. 
They were proud to take the oath of allegiance to the United States. 
They were proud to become Americans. This is the oath they took to 
become U.S. citizens--the oath which will become law if the bill I will 
introduce today should pass and be signed by the President.
  I quote:

       I--and the citizen states his or her name--hereby declare, 
     on oath, that I absolutely and entirely renounce and abjure 
     all allegiance and fidelity to any foreign prince, potentate, 
     state, or sovereignty of whom or which I have heretofore been 
     a subject or citizen; that I will support and defend the 
     Constitution and laws of the United States of America against 
     all enemies, foreign and domestic; that I will bear true 
     faith and allegiance to the same; that I will bear arms on 
     behalf of the United States when required by the law; that I 
     will perform noncombatant service in the Armed Forces of the 
     United States when required by the law; that I will perform 
     work of national importance under civilian direction when 
     required by the law; and that I take this obligation freely 
     without any mental reservation or purpose of evasion; so help 
     me God.

  That is the oath of allegiance. That is quite an oath. It has 
strength. It has clarity. It sounds as if it might have been written by 
some rowdy patriots in Philadelphia or Williamsburg.
  Yet, surprisingly, Congress has never voted on the content of this 
oath. We have left it to Federal regulators. It is time to protect it.
  This is a straightforward bill that simply codifies the oath of 
allegiance as it presently stands. The bill I introduce today has, as I 
mentioned, already attracted 30 cosponsors, including the distinguished 
Senator from North Carolina who is presiding today.
  I hope more Senators will join us in protecting this key statement on 
what it means to become an American.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mr. Dodd):
  S. 1629. A bill to improve the palliative and end-of-life care 
provided to children with life-threatening conditions, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Mr. DeWINE. Mr. President, I would like to take a few moments to talk 
about a bill I will be introducing today, along with Senator Chris 
Dodd, a bill that has to do with children. It is an issue that is 
difficult to think about or talk about but one that is critical to many 
children and their families in our Nation.
  What I am taking about is what we do, or what we can do, when a child 
develops a life-threatening or terminal illness. What I am talking 
about is we need to make sure we do everything in our power to make 
sick children as comfortable as possible and as happy as possible--
everything in our power to ease their suffering. What I am talking 
about is the pressing need for comprehensive, compassionate, continuous 
care for children who are facing death as a result of serious illness; 
the need to make palliative care available to any child who is 
seriously ill and who might possibly be facing death.
  No parent or family member ever expects a child to die. With today's 
modern medicine and research advances, it is easy to think that only 
older people die, but, tragically, we all know that is not the case. 
That is why today, along with Senator Dodd and Congresswoman Pryce and 
Congressman Murtha, we are introducing a bill, the Compassionate Care 
for Children Act, 2003, in an effort to help ensure that very sick 
children receive a continuum of care and that young lives do not end in 
preventable pain or fear or sadness.
  Every year, over 55,000 children die in the United States. Some 
children will die suddenly and unexpectedly, in a car accident, by 
drowning, or fire, or by choking. Some may even be murdered.
  Others, though, thousands of children, will be diagnosed with life-

[[Page 22396]]

threatening illnesses or disease that might eventually, over a period 
of time, take away their lives. Children with these kinds of illnesses 
are in and out of hospitals and clinics. They receive chemotherapy and 
radiation treatments. They might undergo multiple surgeries.
  They might have nurses and doctors poking and prodding at them nearly 
all the time. Some of these children are old enough to realize that 
they might die if the treatments for their diseases might not work. 
Others are too young to understand that reality.
  One poor girl--Liza--knew she was going to die. Shortly after her 
fourth birthday, she was diagnosed with a form of leukemia. For the 
next year, Liza's parents explored every possible medical option for 
her, and every possible treatment. They took her to doctor after doctor 
after doctor, and they had access to the most cutting-edge therapies 
available to treat Liza's disease. But nothing seemed to work. At the 
age of 5, Liza began to ask her mother about what would come next, and 
whether she would soon die after her bone marrow transplant--her last 
chance for a cure--had failed.
  Once the medical treatments had failed, hospitals has little else to 
offer Liza. There was no discussion, tragically, about end-of-life care 
at the hospital for this little child. No one wanted to admit that they 
were out of treatment options, that there was no cure, that she wasn't 
going to get better, have her life restored and her health restored, 
and that she wasn't going to grow up and become an adult and have her 
own children someday. There was no discussion of that. No one in that 
hospital wanted to talk with Liza about death, even though this little 
girl pleaded with them to do so.
  Liza's mother told the Washington Post that Liza asked her oncologist 
to tell her when death was near. This little 5-year-old girl asked her 
doctor to tell her when she was going to die. Yet on the final night of 
her life, as this little child lay dying in her mother's arms, near her 
father and her older sister, Liza asked, ``Why didn't the doctor call 
to tell me.''
  Liza's parents were able to get some hospice care for their daughter 
during the last 3 months of her life. Tragically, fewer than 10 percent 
of children who die in the United States ever receive any sort of 
hospice care. When children like Liza are terminally ill, parents are 
forced to make decisions for their children under extremely emotional 
and stressful conditions. The decisions that confront these parents are 
ones that they never, of course, expected to have to make. Parents want 
what is best for their children. They want their children to get better 
and be healthy. They want their children to be pain free. They want 
their children to receive comfort and care when they are sick.
  God forbid that parents find out their children are very sick--so 
sick they are never going to get better, so sick there are no more 
treatments and no more cures, and so sick they know their children are 
going to die. Those parents will try to do everything imaginable and 
everything possible in their power to help their children and make them 
comfortable, pain-free, and happy in their remaining days.
  We have an obligation to help those parents achieve those goals.
  Children with life-threatening diseases and illnesses require special 
medical attention to make their shortened lives more comfortable. We 
know that. Yet despite that knowledge, the fact is, current Federal law 
and regulations do not take into consideration the special care needs 
of a gravely ill or dying child. In fact, these Federal laws and 
regulations get in the way of taking care of these children.
  The legislation we are introducing today would help correct the 
deficiencies in current law and help sick children facing possible 
death live more comfortably and live with dignity and would help them 
receive the comprehensive care they deserve and the comprehensive care 
we would expect for our own children.
  Let me take a few moments to explain what our bill actually does.
  First, it offers grants so doctors and nurses can receive training 
and education to enable them to better understand these issues and to 
help them provide end-of-life care for these kids. The goal of these 
grants is to improve the quality of care terminally ill children 
receive. One of the ways we do this is to make sure doctors and nurses 
truly understand these issues so they can provide the care and be 
better informed.
  Our bill also provides money for the National Institutes of Health to 
conduct research in pain and symptom management in children. This 
research is critically important to improve the type of care dying 
children receive.
  A recent article in the New England Journal of Medicine stated that 
89 percent of children dying of cancer die experiencing ``a lot or a 
great deal'' of pain and suffering.
  This does not have to happen. We can change that, and we must. This 
is simply not acceptable. Research has to be done so that children will 
not suffer needlessly.
  In addition to grants, the second piece of our bill changes the way 
care is delivered to children with life-threatening illnesses. Right 
now, doctors, hospitals, and parents have to overcome significant 
insurance and eligibility barriers to enroll a dying child in hospice. 
First, to qualify for hospice, a doctor must certify that a child has 6 
months or less to live. The problem with this ``6-month rule'' is that 
it is harder for a doctor to determine the life expectancy of a sick 
child than it is to determine the life expectancy of a sick adult or 
elderly person. A child dying of cancer, for example, may die in 6 
months or 6 years, making that child ineligible for hospice care that 
would ensure a comfortable life while that child is alive. It is very 
difficult many times to estimate how long that child is going to live. 
This very rigid 6-month predictability rule which denies care is very 
inhumane for these kids. It is wrong, and we have to change that rule.
  According to Dr. Joanne Hilden and Dr. Dan Tobin, ``Sick children are 
still growing, which is a biological process very much like healing. So 
when a child is diagnosed with illness such as cancer or heart disease, 
he is much more likely to be cured than an adult.''
  Simply put, diseases progress differently in children than adults, 
and children with terminal diseases get lost in the health care system 
designed for adults--a health care system that does not take into 
consideration the special needs of children.
  Furthermore, the current system does not allow a patient to receive 
curative and palliative care simultaneously. In other words, current 
law does not allow doctors to continue trying life-prolonging 
treatments--treatments that could cure an illness or extend their life, 
and also at the same time provide palliative care to that patient. In 
other words, current law does not allow the assistance, the doctors to 
go in to try to provide typical hospice care where you make that child 
comfortable and do all the things to alleviate the pain and at the same 
time you are still trying to save the child's life.
  That is wrong. That is simply wrong. That presents a parent with a 
horrible choice, a choice that no parent should have.
  That is tragic. Palliative care offers a continuum of care, care that 
involves counseling to families and patients about how to confront 
death, care that involves making the patient comfortable in his or her 
sickest hours, care that acknowledges that death is a real possibility.
  Federal law requires a person who wishes to receive end-of-life care 
to discontinue receiving curative or life-prolonging treatment. When a 
child is involved, this means a parent must agree to no longer provide 
curative treatment, treatment that could cure the child--that is 
wrong--in order for their child to receive care and support for the 
possible end of life.
  This should not be an either/or decision for parents. I don't know of 
any parent who would give up trying to cure a sick child when there was 
any chance that child might be saved. They should not be put in this 
position.
  Current law places parents in impossible positions. We simply must 
fix

[[Page 22397]]

this. End-of-life care should be integrated with curative care so that 
parents, children, and doctors have access to a range of benefits and 
services. As I said earlier, palliative care should not be confined to 
the dying. It should be available to any child who is seriously ill.
  That is why our bill creates Medicare and private market 
demonstration programs to remove these barriers, making it simpler and 
easier for doctors and parents to make end-of-life decisions for 
children. the demonstration program will allow children to receive 
curative and palliative care concurrently. This means children can 
continue to receive treatment and life-prolonging care while receiving 
palliative care at the same time. The demonstration program also 
removes the 6-month rule so children can receive palliative care 
benefit at the time of diagnosis.
  I take a moment to tell my colleagues about another girl, Rachel Ann. 
Rachel Ann was a little girl who did receive palliative care from the 
time she was diagnosed with a grave heart problem. Rachel Ann had a 
heart that doctors describe as ``incompatible with life.'' Most babies 
with heart malformations like Rachel Ann die within a matter of days 
after birth. Rachel Ann's parents were devastated and distraught to see 
their tiny baby connected to a sea of wire and tubes, clinging to life.
  Rachel Ann's parents were referred to a pediatric hospice and decided 
to bring their daughter home from the hospital so she could experience 
life with her family, surrounded by parents, brothers, relatives and 
church community at home. Rachel Ann's parents say she seemed truly 
happy at home. She smiled and wiggled in response to voices and being 
held. Her brothers doted on their baby sister.
  Rachel Ann was able to spend her life at home in comfort with her 
family. She lived for 42 days and her family was able to make every 
single moment count. On Christmas day, after spending the morning with 
her family, Rachel Ann passed away.
  This is truly a tragic story. Fortunately, Rachel Ann and her family 
were able to spend as much time together as possible with Rachel Ann as 
comfortable as possible. Her brothers were able to know their sister 
and to talk with hospice professionals about what was happening to her. 
Rachel Ann's parents and grandparents also were able to talk about her 
condition with hospice professionals and maintained an active role in 
her care. There was a support system in place for this family.
  The terminal illness of a child must be an incredibly difficult thing 
to confront for a parent and a family. No one wants to think about 
children dying. No one wants to believe that children suffer, 
especially in this age of great medical advances. It is a horrible 
situation. But it is one that we must face. We can always do more to 
improve the care that our children receive. We should continue to 
support research and finding cures for the diseases and illnesses from 
which children suffer. But until those cures are found, and as long as 
children die from these diseases, we must provide care and support for 
a dying child. We have an obligation to provide that care and that 
support.
  The bill we will introduce later today will be an important step in 
this direction. It will provide tools and support networks to help 
grieving families in their time of need. It is the right thing to do. I 
encourage my colleagues to join us in cosponsoring this important piece 
of legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1629

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Children's 
     Compassionate Care Act of 2003''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

   TITLE I--GRANTS TO EXPAND PEDIATRIC PALLIATIVE CARE SERVICES AND 
                                RESEARCH

Sec. 101. Education and training.
Sec. 102. Grants to expand pediatric palliative care.
Sec. 103. Health professions fellowships and residency grants.
Sec. 104. Model program grants.
Sec. 105. Research.

       TITLE II--PEDIATRIC PALLIATIVE CARE DEMONSTRATION PROJECTS

Sec. 201. Medicare pediatric palliative care demonstration projects.
Sec. 202. Private sector pediatric palliative care demonstration 
              projects.
Sec. 203. Authorization of appropriations.

   TITLE I--GRANTS TO EXPAND PEDIATRIC PALLIATIVE CARE SERVICES AND 
                                RESEARCH

     SEC. 101. EDUCATION AND TRAINING.

       Subpart 2 of part E of title VII of the Public Health 
     Service Act (42 U.S.C. 295 et seq.) is amended--
       (1) in section 770(a) by inserting ``except for section 
     771,'' after ``carrying out this subpart''; and
       (2) by adding at the end the following:

     ``SEC. 771. PEDIATRIC PALLIATIVE CARE SERVICES EDUCATION AND 
                   TRAINING.

       ``(a) Establishment.--The Secretary may award grants to 
     eligible entities to provide training in pediatric palliative 
     care and related services.
       ``(b) Eligible Entity Defined.--
       ``(1) In general.--In this section the term `eligible 
     entity' means a health care provider that is affiliated with 
     an academic institution, that is providing comprehensive 
     pediatric palliative care services, alone or through an 
     arrangement with another entity, and that has demonstrated 
     experience in providing training and consultative services in 
     pediatric palliative care including--
       ``(A) children's hospitals or other hospitals or medical 
     centers with significant capacity in caring for children with 
     life-threatening conditions;
       ``(B) pediatric hospices or hospices with significant 
     pediatric palliative care programs;
       ``(C) home health agencies with a demonstrated capacity to 
     serve children with life-threatening conditions and that 
     provide pediatric palliative care; and
       ``(D) any other entity that the Secretary determines is 
     appropriate.
       ``(2) Life-threatening condition defined.--In this 
     subsection, the term `life-threatening condition' has the 
     meaning given such term by the Secretary (in consultation 
     with hospice programs (as defined in section 1861(dd)(2) of 
     the Social Security Act (42 U.S.C. 1395x(dd)(2))) and 
     academic experts in end-of-life care), except that the 
     Secretary may not limit such term to individuals who are 
     terminally ill (as defined in section 1861(dd)(3) of the 
     Social Security Act (42 U.S.C. 1395x(dd)(3))).
       ``(c) Authorized Activities.--Grant funds awarded under 
     subsection (a) shall be used to--
       ``(1) provide short-term training and education programs in 
     pediatric palliative care for the range of interdisciplinary 
     health professionals and others providing such care;
       ``(2) provide consultative services and guidance to health 
     care providers that are developing and building comprehensive 
     pediatric palliative care programs;
       ``(3) develop regional information outreach and other 
     resources to assist clinicians and families in local and 
     outlying communities and rural areas;
       ``(4) develop or evaluate current curricula and educational 
     materials being used in providing such education and guidance 
     relating to pediatric palliative care;
       ``(5) facilitate the development, assessment, and 
     implementation of clinical practice guidelines and 
     institutional protocols and procedures for pediatric 
     palliative, end-of-life, and bereavement care; and
       ``(6) assure that families of children with life-
     threatening conditions are an integral part of these 
     processes.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for each of fiscal years 2004 through 2008.''.

     SEC. 102. GRANTS TO EXPAND PEDIATRIC PALLIATIVE CARE.

       Part Q of title III of the Public Health Service Act (42 
     U.S.C. 280h et seq.) is amended by adding at the end the 
     following:

     ``SEC. 399Z-1. GRANTS TO EXPAND PEDIATRIC PALLIATIVE CARE.

       ``(a) Establishment.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration may award grants to eligible entities to 
     implement or expand pediatric palliative care programs for 
     children with life-threatening conditions.
       ``(b) Eligible Entity Defined.--In this section, the term 
     `eligible entity' means--
       ``(1) children's hospitals or other hospitals with a 
     capacity and ability to care for children with life-
     threatening conditions;
       ``(2) hospices with a demonstrated capacity and ability to 
     care for children with life-threatening conditions and their 
     families; and
       ``(3) home health agencies with--

[[Page 22398]]

       ``(A) a demonstrated capacity and ability to care for 
     children with life-threatening conditions; and
       ``(B) expertise in providing palliative care.
       ``(c) Authorized Activities.--Grant funds awarded under 
     subsection (a) shall be used to--
       ``(1) create new pediatric palliative care programs;
       ``(2) start or expand needed additional care settings, such 
     as respite, hospice, inpatient day services, or other care 
     settings to provide a continuum of care across inpatient, 
     home, and community-based settings;
       ``(3) expand comprehensive pediatric palliative care 
     services, including care coordination services, to greater 
     numbers of children and broader service areas, including 
     regional and rural outreach; and
       ``(4) support communication linkages and care coordination, 
     telemedicine and teleconferencing, and measures to improve 
     patient safety.
       ``(d) Application.--Each eligible entity desiring a grant 
     under this section shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for each of fiscal years 2004 through 2008.''.

     SEC. 103. PEDIATRIC PALLIATIVE CARE TRAINING AND RESIDENCY 
                   GRANTS.

       Part A of title IV of the Public Health Service Act (42 
     U.S.C. 281 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 404F. PEDIATRIC PALLIATIVE CARE TRAINING AND RESIDENCY 
                   GRANTS.

       ``(a) Establishment.--The Director of the National 
     Institutes of Health is authorized to award training grants 
     to eligible entities to expand the number of physicians, 
     nurses, mental health professionals, and appropriate allied 
     health professionals and specialists (as determined by the 
     Secretary) with pediatric palliative clinical training and 
     research experience.
       ``(b) Eligible Entity Defined.--In this section, the term 
     `eligible entity' means--
       ``(1) a pediatric department of a medical school and other 
     related departments including--
       ``(A) oncology;
       ``(B) virology;
       ``(C) neurology; and
       ``(D) psychiatry;
       ``(2) a school of nursing;
       ``(3) a school of psychology and social work; and
       ``(4) a children's hospital or other hospital with a 
     significant number of pediatric patients with life-
     threatening conditions.
       ``(c) Application.--Each eligible entity desiring a grant 
     under this section shall submit an application to the 
     Director at such time, in such manner, and containing such 
     information as the Director may require.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for each of fiscal years 2004 through 2008.''.

     SEC. 104. MODEL PROGRAM GRANTS.

       Part Q of title III of the Public Health Service Act (42 
     U.S.C. 280h et seq.), as amended by section 102, is further 
     amended by adding at the end the following:

     ``SEC. 399Z-2. MODEL PROGRAM GRANTS.

       ``(a) Establishment.--The Secretary may award grants to 
     eligible entities to enhance pediatric palliative care and 
     care for children with life-threatening conditions in general 
     pediatric or family practice residency training programs 
     through the development of model programs.
       ``(b) Eligible Entity Defined.--In this section the term 
     `eligible entity' means a pediatric department of--
       ``(1) a medical school;
       ``(2) a children's hospital; or
       ``(3) any other hospital with a general pediatric or family 
     practice residency program that serves a significant number 
     of pediatric patients with life-threatening conditions.
       ``(c) Application.--Each eligible entity desiring a grant 
     under this section shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for each of fiscal years 2004 through 2008.''.

     SEC. 105. RESEARCH.

       (a) Pain and Symptom Management.--The Director of the 
     National Institutes of Health (in this section referred to as 
     the ``Director'') shall provide translational research grants 
     to fund research in pediatric pain and symptom management 
     that will utilize existing facilities of the National 
     Institutes of Health including--
       (1) pediatric pharmacological research units;
       (2) the general clinical research centers; and
       (3) other centers providing infrastructure for patient 
     oriented research.
       (b) Eligible Entities.--In carrying out subsection (a), the 
     Director may award grants for the conduct of research to--
       (1) children's hospitals or other hospitals serving a 
     significant number of children with life-threatening 
     conditions;
       (2) pediatric departments of medical schools;
       (3) institutions currently participating in National 
     Institutes of Health network of pediatric pharmacological 
     research units; and
       (4) hospices with pediatric palliative care programs and 
     academic affiliations.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $10,000,000, to 
     remain available until expended.

       TITLE II--PEDIATRIC PALLIATIVE CARE DEMONSTRATION PROJECTS

     SEC. 201. MEDICARE PEDIATRIC PALLIATIVE CARE DEMONSTRATION 
                   PROJECTS.

       (a) Definitions.--In this section:
       (1) Care coordination services.--The term ``care 
     coordination services'' means services that provide for the 
     coordination of, and assistance with, referral for medical 
     and other services, including multidisciplinary care 
     conferences, coordination with other providers involved in 
     care of the eligible child, patient and family caregiver 
     education and counseling, and such other services as the 
     Secretary determines to be appropriate in order to facilitate 
     the coordination and continuity of care furnished to an 
     individual.
       (2) Demonstration project.--The term ``demonstration 
     project'' means a demonstration project established by the 
     Secretary under subsection (b)(1).
       (3) Eligible child.--The term ``eligible child'' means an 
     individual with a life-threatening condition who is entitled 
     to benefits under part A of the medicare program and who is 
     under 18 years of age.
       (4) Eligible provider.--The term ``eligible provider'' 
     means--
       (A) a pediatric palliative care program that is a public 
     agency or private organization (or a subdivision thereof) 
     which--
       (i)(I) is primarily engaged in providing the care and 
     services described in section 1861(dd)(1) of the Social 
     Security Act (42 U.S.C. 1395(dd)(1)) and makes such services 
     available (as needed) on a 24-hour basis and which also 
     provides counseling (including bereavement counseling) for 
     the immediate family of eligible children;
       (II) provides for such care and services in eligible 
     children's homes, on an outpatient basis, and on a short-term 
     inpatient basis, directly or under arrangements made by the 
     agency or organization, except that--

       (aa) the agency or organization must routinely provide 
     directly substantially all of each of the services described 
     in subparagraphs (A), (C), and (H) of such section 
     1861(dd)(1);
       (bb) in the case of other services described in such 
     section 1861(dd)(1) which are not provided directly by the 
     agency or organization, the agency or organization must 
     maintain professional management responsibility for all such 
     services furnished to an eligible child, regardless of the 
     location or facility in which such services are furnished; 
     and

       (III)(aa) identifies medical, community, and social service 
     needs;
       (bb) simplifies access to service;
       (cc) uses the full range of community resources, including 
     the friends and family of the eligible child; and
       (dd) provides educational opportunities relating to health 
     care; and
       (ii) has an interdisciplinary group of personnel which--

       (I) includes at least--

       (aa) 1 physician (as defined in section 1861(r)(1) of the 
     Social Security Act (42 U.S.C. 1395x(r)(1)));
       (bb) 1 registered professional nurse; and
       (cc) 1 social worker;

     employed by or, in the case of a physician described in item 
     (aa), under contract with the agency or organization, and 
     also includes at least 1 pastoral or other counselor;

       (II) provides (or supervises the provision of) the care and 
     services described in such section 1861(dd)(1); and
       (III) establishes the policies governing the provision of 
     such care and services;
       (iii) maintains central clinical records on all patients;
       (iv) does not discontinue the palliative care it provides 
     with respect to an eligible child because of the inability of 
     the eligible child to pay for such care;
       (v)(I) uses volunteers in its provision of care and 
     services in accordance with standards set by the Secretary, 
     which standards shall ensure a continuing level of effort to 
     use such volunteers; and
       (II) maintains records on the use of these volunteers and 
     the cost savings and expansion of care and services achieved 
     through the use of these volunteers;
       (vi) in the case of an agency or organization in any State 
     in which State or applicable local law provides for the 
     licensing of agencies or organizations of this nature, is 
     licensed pursuant to such law;
       (vii) seeks to ensure that children and families receive 
     complete, timely, understandable information about diagnosis, 
     prognosis, treatments, and palliative care options;
       (viii) ensures that children and families participate in 
     effective and timely prevention, assessment, and treatment of 
     physical and psychological symptoms of distress; and
       (ix) meets such other requirements as the Secretary may 
     find necessary in the interest of the health and safety of 
     the eligible children who are provided with palliative care 
     by such agency or organization; and

[[Page 22399]]

       (B) any other individual or entity with an agreement under 
     section 1866 of the Social Security Act (42 U.S.C. 1395cc) 
     that--
       (i) has demonstrated experience in providing 
     interdisciplinary team-based palliative care and care 
     coordination services (as defined in paragraph (1)) to 
     pediatric populations; and
       (ii) the Secretary determines is appropriate.
       (5) Life-threatening condition.--The term ``life-
     threatening condition'' has the meaning given such term by 
     the Secretary (in consultation with hospice programs (as 
     defined in section 1861(dd)(2) of the Social Security Act (42 
     U.S.C. 1395x(dd)(2))) and academic experts in end-of-life 
     care), except that the Secretary may not limit such term to 
     individuals who are terminally ill (as defined in section 
     1861(dd)(3) of the Social Security Act (42 U.S.C. 
     1395x(dd)(3))).
       (6) Medicare program.--The term ``medicare program'' means 
     the health benefits program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Pediatric Palliative Care Demonstration Projects.--
       (1) Establishment.--The Secretary shall establish 
     demonstration projects in accordance with the provisions of 
     this subsection to provide pediatric palliative care to 
     eligible children.
       (2) Participation.--
       (A) Eligible providers.--Any eligible provider may furnish 
     items or services covered under the pediatric palliative care 
     benefit.
       (B) Eligible children.--The Secretary shall permit any 
     eligible child residing in the service area of an eligible 
     provider participating in a demonstration project to 
     participate in such project on a voluntary basis.
       (c) Services Under Demonstration Projects.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the provisions of section 1814(i) of the Social 
     Security Act (42 U.S.C. 1395f(i)) shall apply to the payment 
     for pediatric palliative care provided under the 
     demonstration projects in the same manner in which such 
     section applies to the payment for hospice care (as defined 
     in section 1861(dd)(1) of the Social Security Act (42 U.S.C. 
     1395x(dd)(1))) provided under the medicare program.
       (2) Coverage of pediatric palliative care.--
       (A) In general.--Notwithstanding section 1862(a)(1)(C) of 
     the Social Security Act (42 U.S.C. 1395y(a)(1)(C)), the 
     Secretary shall provide for reimbursement for items and 
     services provided under the pediatric palliative care benefit 
     made available under the demonstration projects in a manner 
     that is consistent with the requirements of subparagraph (B).
       (B) Benefit.--Under the pediatric palliative care benefit, 
     the following requirements shall apply:
       (i) Waiver of requirement to elect hospice care.--Each 
     eligible child may receive benefits without an election under 
     section 1812(d)(1) of the Social Security Act (42 U.S.C. 
     1395d(d)(1)) to receive hospice care (as defined in section 
     1861(dd)(1) of such Act (42 U.S.C. 1395x(dd)(1))) having been 
     made with respect to the eligible child.
       (ii) Authorization for curative treatment.--Each eligible 
     child may continue to receive benefits for disease and 
     symptom modifying treatment under the medicare program.
       (iii) Provision of care coordination services.--Each 
     eligible child shall receive care coordination services (as 
     defined in subsection (a)(1)) and hospice care (as so 
     defined) through an eligible provider participating in a 
     demonstration project, regardless of whether such individual 
     has been determined to be terminally ill (as defined in 
     section 1861(dd)(3) of the Social Security Act (42 U.S.C. 
     1395x(dd)(3))).
       (iv) Availability of information on pediatric palliative 
     care.--Each eligible child and the family of such child shall 
     receive information and education in order to better 
     understand the utility of pediatric palliative care.
       (v) Availability of bereavement counseling.--Each family of 
     an eligible child shall receive bereavement counseling, if 
     appropriate.
       (vi) Additional benefits.--Under the demonstration 
     projects, the Secretary may include any other item or 
     service--

       (I) for which payment may otherwise be made under the 
     medicare program; and
       (II) that is consistent with the recommendations contained 
     in the report published in 2003 by the Institute of Medicine 
     of the National Academy of Sciences entitled ``When Children 
     Die: Improving Palliative and End-of-Life Care for Children 
     and Their Families''.

       (C) Payment.--
       (i) Establishment of payment methodology.--The Secretary 
     shall establish a methodology for determining the amount of 
     payment for pediatric palliative care furnished under the 
     demonstration projects that is similar to the methodology for 
     determining the amount of payment for hospice care (as 
     defined in section 1861(dd)(1) of the Social Security Act (42 
     U.S.C. 1395x(dd)(1))) under section 1814(i) of such Act (42 
     U.S.C. 1395f(i)), except as provided in the following 
     subclauses:

       (I) Amount of payment.--Subject to subclauses (II) and 
     (III), the amount of payment for pediatric palliative care 
     shall be equal to the amount that would be paid for hospice 
     care (as so defined), increased by an appropriate percentage 
     to account for the additional costs of providing bereavement 
     counseling and care coordination services (as defined in 
     subsection (a)(1)).
       (II) Waiver of hospice cap.--The limitation under section 
     1814(i)(2) of the Social Security Act (42 U.S.C. 1395f(i)(2)) 
     shall not apply with respect to pediatric palliative care and 
     amounts paid for pediatric palliative care under this 
     subparagraph shall not be counted against the cap amount 
     described in such section.
       (III) Separate payment for counseling services.--
     Notwithstanding section 1814(i)(1)(A) of the Social Security 
     Act (42 U.S.C. 1395f(i)(1)(A)), the Secretary may pay for 
     bereavement counseling as a separate service.

       (ii) Special rules for payment of medicare+choice 
     organizations.--The Secretary shall establish procedures 
     under which the Secretary provides for an appropriate 
     adjustment in the monthly payments made under section 1853 of 
     the Social Security Act (42 U.S.C. 1395w-23) to any 
     Medicare+Choice organization that provides health care items 
     or services to an eligible child who is participating in a 
     demonstration project.
       (3) Coverage of pediatric palliative care consultation 
     services.--Under the demonstration projects, the Secretary 
     shall provide for a one-time payment on behalf of each 
     eligible child who has not yet elected to participate in the 
     demonstration project for services that are furnished by a 
     physician who is either the medical director or an employee 
     of an eligible provider participating in such a project and 
     that consist of--
       (A) an evaluation of the individual's need for pain and 
     symptom management, including the need for pediatric 
     palliative care;
       (B) counseling the individual and the family of such 
     individual with respect to the benefits of pediatric 
     palliative care and care options; and
       (C) if appropriate, advising the individual and the family 
     of such individual regarding advanced care planning.
       (d) Conduct of Demonstration Projects.--
       (1) Sites.--The Secretary shall conduct demonstration 
     projects in at least 4, but not more than 8, sites.
       (2) Selection of sites.--The Secretary shall select 
     demonstration sites on the basis of proposals submitted under 
     paragraph (3) that are located in geographic areas that--
       (A) include both urban and rural eligible providers; and
       (B) are geographically diverse and readily accessible to a 
     significant number of eligible children.
       (3) Proposals.--The Secretary shall accept proposals to 
     furnish pediatric palliative care under the demonstration 
     projects from any eligible provider at such time, in such 
     manner, and in such form as the Secretary may reasonably 
     require.
       (4) Facilitation of evaluation.--The Secretary shall design 
     the demonstration projects to facilitate the evaluation 
     conducted under subsection (e)(1).
       (5) Duration.--The Secretary shall complete the 
     demonstration projects within a period of 5 years that 
     includes a period of 1 year during which the Secretary shall 
     complete the evaluation under subsection (e)(1).
       (e) Evaluation and Reports to Congress.--
       (1) Evaluation.--During the 1-year period following the 
     first 4 years of the demonstration projects, the Secretary 
     shall complete an evaluation of the demonstration projects in 
     order--
       (A) to determine the short-term and long-term costs and 
     benefits of changing--
       (i) hospice care (as defined in section 1861(dd)(1) of the 
     Social Security Act (42 U.S.C. 1395x(dd)(1))) provided under 
     the medicare program to children to include the pediatric 
     palliative care furnished under the demonstration projects; 
     and
       (ii) the medicare program to permit eligible children to 
     receive curative and palliative care simultaneously;
       (B) to review the implementation of the demonstration 
     projects compared to recommendations contained in the report 
     published in 2003 by the Institute of Medicine of the 
     National Academy of Sciences entitled ``When Children Die: 
     Improving Palliative and End-of-Life Care for Children and 
     Their Families'';
       (C) to determine the quality and duration of palliative 
     care for individuals who receive such care under the 
     demonstration projects who would not be eligible to receive 
     such care under the medicare program;
       (D) whether any increase in payments for pediatric 
     palliative care is offset by savings in other parts of the 
     medicare program; and
       (E) the projected cost of implementing the demonstration 
     projects on a national basis.
       (2) Reports.--
       (A) Interim report.--Not later than the date that is 2 
     years after the date on which the demonstration projects are 
     implemented,

[[Page 22400]]

     the Secretary shall submit an interim report to Congress on 
     the demonstration projects.
       (B) Final report.--Not later than the date that is 1 year 
     after the date on which the demonstration projects end, the 
     Secretary shall submit a final report to Congress on the 
     demonstration projects that includes the results of the 
     evaluation conducted under paragraph (1) together with such 
     recommendations for legislation or administrative action as 
     the Secretary determines is appropriate.
       (f) Waiver of Medicare Requirements.--The Secretary shall 
     waive compliance with such requirements of the medicare 
     program to the extent and for the period the Secretary finds 
     necessary to conduct the demonstration projects.

     SEC. 202. PRIVATE SECTOR PEDIATRIC PALLIATIVE CARE 
                   DEMONSTRATION PROJECTS.

       (a) Definitions.--In this section:
       (1) Demonstration project.--The term ``demonstration 
     project'' means a demonstration project established by the 
     Secretary under subsection (b)(1).
       (2) Eligible child.--The term ``eligible child'' means an 
     individual with a life-threatening condition who is--
       (A) under 18 years of age;
       (B) enrolled for health benefits coverage under an eligible 
     health plan; and
       (C) not enrolled under (or entitled to) benefits under a 
     health plan described in paragraph (3)(C).
       (3) Eligible health plan.--
       (A) In general.--Subject to clauses (ii) and (iii), the 
     term ``eligible health plan'' means an individual or group 
     plan that provides, or pays the cost of, medical care (as 
     such term is defined in section 2791 of the Public Health 
     Service Act (42 U.S.C. 300gg-91)).
       (B) Types of plans included.--For purposes of subparagraph 
     (A), the term ``eligible health plan'' includes the following 
     health plans, and any combination thereof:
       (i) A group health plan (as defined in section 2791(a) of 
     the Public Health Service Act (42 U.S.C. 300gg-91(a))), but 
     only if the plan--

       (I) has 50 or more participants (as defined in section 3(7) 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002(7))); or
       (II) is administered by an entity other than the employer 
     who established and maintains the plan.

       (ii) A health insurance issuer (as defined in section 
     2791(b) of the Public Health Service Act (42 U.S.C. 300gg-
     91(b))).
       (iii) A health maintenance organization (as defined in 
     section 2791(b) of the Public Health Service Act (42 U.S.C. 
     300gg-91(b))).
       (iv) A long-term care policy, including a nursing home 
     fixed indemnity policy (unless the Secretary determines that 
     such a policy does not provide sufficiently comprehensive 
     coverage of a benefit so that the policy should be treated as 
     a health plan).
       (v) An employee welfare benefit plan or any other 
     arrangement which is established or maintained for the 
     purpose of offering or providing health benefits to the 
     employees of 2 or more employers.
       (vi) Health benefits coverage provided under a contract 
     under the Federal employees health benefits program under 
     chapter 89 of title 5, United States Code.
       (C) Types of plans excluded.--For purposes of subparagraph 
     (A), the term ``eligible health plan'' does not include any 
     of the following health plans:
       (i) The medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.).
       (ii) The medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.).
       (iii) A medicare supplemental policy (as defined in section 
     1882(g)(1) of the Social Security Act (42 U.S.C. 1395ss et 
     seq.).
       (iv) The health care program for active military personnel 
     under title 10, United States Code.
       (v) The veterans health care program under chapter 17 of 
     title 38, United States Code.
       (vi) The Civilian Health and Medical Program of the 
     Uniformed Services (CHAMPUS), as defined in section 1072(4) 
     of title 10, United States Code.
       (vii) The Indian health service program under the Indian 
     Health Care Improvement Act (25 U.S.C. 1601 et seq.).
       (4) Eligible organization.--The term ``eligible 
     organization'' means an organization that provides health 
     benefits coverage under an eligible health plan.
       (5) Life-threatening condition.--The term ``life-
     threatening condition'' has the meaning given such term under 
     section 201(a)(4).
       (6) Pediatric palliative care.--The term ``pediatric 
     palliative care'' means services of the type to be furnished 
     under the demonstration projects under section 201, including 
     care coordination services (as defined in subsection (a)(1) 
     of such section).
       (7) Pediatric palliative care consultation services.--The 
     term ``pediatric palliative care consultation services'' 
     means services of the type described in section 201(c)(3).
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services, acting through the Director of 
     the Agency for Healthcare Research and Quality.
       (b) Nonmedicare Pediatric Palliative Care Demonstration 
     Projects.--
       (1) Establishment.--The Secretary shall establish 
     demonstration projects under this section at the same time as 
     the Secretary establishes the demonstration projects under 
     section 201 and in accordance with the provisions of this 
     subsection to demonstrate the provision of pediatric 
     palliative care and pediatric palliative care consultation 
     services to eligible children who are not entitled to (or 
     enrolled for) coverage under the health plans described in 
     subsection (a)(3)(C).
       (2) Participation.--
       (A) Eligible organizations.--The Secretary shall permit any 
     eligible organization to participate in a demonstration 
     project on a voluntary basis.
       (B) Eligible children.--Any eligible organization 
     participating in a demonstration project shall permit any 
     eligible child enrolled in an eligible health plan offered by 
     the organization to participate in such project on a 
     voluntary basis.
       (c) Services Under Demonstration Projects.--
       (1) Provision of pediatric palliative care and consultation 
     services.--Under a demonstration project, each eligible 
     organization electing to participate in the demonstration 
     project shall provide pediatric palliative care and pediatric 
     palliative care consultation services to each eligible child 
     who is enrolled with the organization and who elects to 
     participate in the demonstration project.
       (2) Availability of administrative grants.--
       (A) In general.--Subject to subparagraph (B), the Secretary 
     shall award grants to eligible organizations electing to 
     participate in a demonstration project for the administrative 
     costs incurred by the eligible organization in participating 
     in the demonstration project, including the costs of 
     collecting and submitting the data required to be submitted 
     under subsection (d)(4)(B).
       (B) No payment for services.--The Secretary may not pay 
     eligible organizations for pediatric palliative care or 
     pediatric palliative care consultation services furnished 
     under the demonstration projects.
       (d) Conduct of Demonstration Projects.--
       (1) Sites.--The Secretary shall conduct demonstration 
     projects in at least 4, but not more than 8, sites.
       (2) Selection of sites.--The Secretary shall select 
     demonstration sites on the basis of proposals submitted under 
     paragraph (3) that are located in geographic areas that--
       (A) include both urban and rural eligible organizations; 
     and
       (B) are geographically diverse and readily accessible to a 
     significant number of eligible children.
       (3) Proposals.--
       (A) In general.--The Secretary shall accept proposals to 
     furnish pediatric palliative care and pediatric palliative 
     care consultation services under the demonstration projects 
     from any eligible organization at such time, in such manner, 
     and in such form as the Secretary may require.
       (B) Application for administrative grants.--If the eligible 
     organization desires to receive an administrative grant under 
     subsection (c)(2), the proposal submitted under subparagraph 
     (A) shall include a request for the grant, specify the amount 
     requested, and identify the purposes for which the 
     organization will use any funds made available under the 
     grant.
       (4) Collection and submission of data.--
       (A) Collection.--Each eligible organization participating 
     in a demonstration project shall collect such data as the 
     Secretary may require to facilitate the evaluation to be 
     completed under subsection (e)(1).
       (B) Submission.--Each eligible organization shall submit 
     the data collected under subparagraph (A) to the Secretary at 
     such time, in such manner, and in such form as the Secretary 
     may require.
       (5) Duration.--The Secretary shall complete the 
     demonstration projects within a period of 5 years that 
     includes a period of 1 year during which the Secretary shall 
     complete the evaluation under subsection (e)(1).
       (e) Evaluation and Reports to Congress and Eligible 
     Organizations.--
       (1) Evaluation.--During the 1-year period following the 
     first 4 years of the demonstration projects, the Secretary 
     shall complete an evaluation of the demonstration projects.
       (2) Reports.--
       (A) Interim report.--Not later than the date that is 2 
     years after the date on which the demonstration projects are 
     implemented, the Secretary shall submit an interim report to 
     Congress and each eligible organization participating in a 
     demonstration project on the demonstration projects.
       (B) Final report.--Not later than the date that is 1 year 
     after the date on which the demonstration projects end, the 
     Secretary shall submit a final report to Congress and each 
     eligible organization participating in a demonstration 
     project on the demonstration projects that includes the 
     results of the evaluation conducted under paragraph (1) 
     together with such recommendations for legislation or 
     administrative action as the Secretary determines is 
     appropriate.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated--
       (1) $2,500,000, to carry out the demonstration projects 
     under section 201; and

[[Page 22401]]

       (2) $2,500,000, to carry out the demonstration projects 
     under section 202, including for awarding grants under 
     subsection (c)(2) of such section.
       (b) Availability.--Sums appropriated under subsection (a) 
     shall remain available, without fiscal year limitation, until 
     expended.
                                 ______
                                 
      By Mrs. CLINTON (for herself, Mrs. Dole, Ms. Cantwell, Mr. 
        Bennett, Mr. Bingaman, Mrs. Murray, and Ms. Landrieu):
  S. 1630. A bill to facilitate nationwide availability of 2-1-1 
telephone service for information and referral services, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.
  Mrs. CLINTON. Mr. President, I want to thank you, Len Roberts, and 
the people of United Way for making this day possible. The tremendous 
board members, including Brian Gallagher and Dr. Johnnetta Cole. And 
Paul Thornell and Bridget Gavaghan, of the staff.
  I also want to thank Senator Dole for working with me on this 
project. Because of her long history with the Red Cross, she 
understands the important of 2-1-1, and I am so pleased to be working 
with her to champion the Calling for 2-1-1 Act. I know that she will be 
a tremendous help in getting this legislation passed into law.
  Representatives Richard Burr and Anna Eshoo are leading this effort 
in the House and I appreciate their efforts.
  I also want to thank you Major Dennis E. Fowler who was here this 
morning from Florida to share his perspective on the value of 2-1-1.
  And of course, I have to mention George Clooney who is on the board 
of United Way and came to a press conference this morning to help 
publicize this legislation. I am always happy to thank people who take 
time away from K Street to help Main Street.
  This is a piece of legislation whose time has come.
  As you all know, I represent a State that experienced a horrible 
tragedy on September 11. The silver lining in that tragedy was the 
tremendous outgrowth of volunteerism. We saw thousands of individuals--
people from all over the country--who came to New York just to lend a 
hand.
  But the biggest challenge the city experienced was coordinating those 
efforts. Making sure we knew exactly how many people were needed to 
heal the wounded, clean up debris at the site, donate blood, bring food 
and coffee to the firefighters and police officers who were working 
round the clock, and so much more.
  The needs were great and the people of America rose to the challenge. 
But our infrastructure struggled to keep up.
  As time wore on, the economic repercussions of the disaster became 
more and more apparent. More than 100,000 people lost their jobs. Close 
to 2,000 families applied for housing assistance because they couldn't 
pay their rent or mortgage. Ninety thousand people developed symptoms 
of posttraumatic stress disorder or clinical depression within 8 weeks 
of the attacks. Another 34,000 people met the criteria for both 
diagnoses.
  Again, our communities rose to the challenge. Philanthropic 
organizations like United Way, along with corporations, foundations, 
and community organizations raised more than $1 billion to help the 
victims.
  But our government did not have the infrastructure to handle the 
outpouring of support. In a study of the aftermath of September 11, the 
Brookings Institution and Urban Institute found that as the dislocated 
workers struggled to obtain assistance. People ``found it difficult to 
connect with resources due to a social-services infrastructure that 
does not support a simple and deficient method for people to learn 
about and access services and for agencies to coordinate their 
activities.''
  That's what 2-1-1 is all about. It provides a single, efficient, 
coordinated way for people who need help to connect with those who can 
provide it.
  The Federal Communications Commission laid the groundwork for a 2-1-1 
number in 2000 when it directed the telephone number to be reserved for 
information and referral to social- and human-services agencies. The 2-
1-1 system opens the way to a user-friendly social-services network, by 
providing an easy-to-remember and universally available phone number 
that links individuals and families in need to the appropriate non-
profit and government agencies.
  Where 2-1-1 is now active, it has done just that. 2-1-1 is helping 
our youth to navigate through difficult situations like exiting a gang, 
assisting a suicidal friend, and rejecting illegal drugs.
  2-1-1 was already operating in Connecticut during September 11 and it 
was critical in helping identify the whereabouts of victims, connecting 
frightened children with their parents, providing information on 
terrorist suspects, and linking ready volunteers with coordinated 
efforts and victims with necessary mental and physical health services. 
2-1-1 provided locations of vigils and support groups, and information 
on bioterrorism.
  I want those services to be available to New Yorkers who continue to 
need services in the recovery process. Some have mental health 
problems. Other are still out of work. Others need legal and financial 
advice. Whatever the need, 2-1-1 can help.
  So I am thrilled to announce today that I am introducing the Calling 
for 2-1-1 Act. I hope that we soon reach a day when all Americans have 
the 4-1-1 on 2-1-1 so it can help them through life's toughest 
challenges. Thank you.
                                 ______
                                 
      By Mr. AKAKA (for himself and Mr. Inouye):
  S. 1632. A bill to extend eligibility for certain Federal benefits to 
citizens of the Freely Associated States; to the Committee on Finance.
  Mr. AKAKA. Mr. President, I rise today to introduce legislation with 
my friend and colleague from Hawaii, Senator Inouye, to provide certain 
Federal public benefits for citizens of the Freely Associated States 
(FAS) who are residing in the United States. The bill would provide 
eligibility for non-emergency Medicaid, Food Stamps, Temporary 
Assistance to Needy Families, and Supplemental Security Income to FAS 
citizens residing in the United States.
  Citizens from the FAS are citizens from the Republic of the Marshall 
Islands (RMI), Federated States of Micronesia (FSM), and Palau. The 
United States has a very unique relationship with the FSM, RMI, and 
Palau. The Compact of Free Association established these Nations as 
sovereign States responsible for their own foreign policies. However, 
the Freely Associated States remain dependent upon the United States 
for military protection and economic assistance.
  The Compact provides that the United States has the prerogative to 
reject the strategic use of, or military access to, the FAS by other 
countries, which is often referred to as the ``right of strategic 
denial.'' The Compact also provides that the United States may block 
FAS government policies that it deems inconsistent with its duty to 
defend the FAS, which is referred to as the ``defense veto.'' Under the 
Compact, the United States has exclusive military base rights in the 
FAS. In exchange, the United States is required to support the FAS 
economically, with the goal of producing self-sufficiency, and FAS 
citizens are allowed entry into the United States as non-immigrants for 
the purposes of education, medical treatment, and employment.
  The Senate is considering S.J. Res. 16, the Compact of Free 
Association Amendments Act of 2003, which was favorably reported by the 
Senate Committee on Energy and Natural Resources this morning. S.J. 
Res. 16 is the codification of title II of the Compact pertaining to 
economic relations.
  As FAS citizens are allowed free entry into the United States as part 
of the Compact, many FAS citizens reside in the State of Hawaii. Since 
1997, when Hawaii began reporting its impact costs, the State has 
identified over $140 million in costs associated with FAS citizens. In 
2002, the State of Hawaii expended over $32 million in assistance to 
FAS citizens. S.J. Res. 16 provides $30 million in annual funding for 
Compact impact assistance to be

[[Page 22402]]

shared between the State of Hawaii, Guam, the Commonwealth of the 
Northern Mariana Islands, and American Samoa. While this funding is a 
positive step forward, it does not begin to reimburse the affected 
jurisdictions for the costs associated with FAS citizens living in 
Hawaii.
  The legislation we are introducing today would provide assistance to 
States and territories who have continued to shoulder the majority of 
the costs associated with the Compact. The Federal Government must 
provide appropriate resources to help States meet the needs of the FAS 
citizens--an obligation based on a Federal commitment. It is 
unconscionable for a State or territory to shoulder the entire 
financial burden of providing necessary education, medical, and social 
services to individuals who are residing in that State or territory 
when the obligation is that of the Federal Government. For that reason, 
I am seeking to provide reimbursement of these costs. It is time for 
the Federal Government to take up some of the financial responsibility 
that until now has been carried by the State of Hawaii, CNMI, and Guam, 
by restoring public benefits to FAS citizens.
  This bill would restore eligibility of FAS citizens for non-emergency 
Medicaid. FAS citizens lost many of their public benefits as a result 
of the Personal Responsibility and Work Opportunity (PRWORA) Act of 
1996, including Medicaid coverage. FAS citizens were previously 
eligible for Medicaid as aliens permanently residing under color of law 
in the United States.
  After the enactment of welfare reform, the State of Hawaii could no 
longer claim Federal matching funds for services rendered to FAS 
citizens. Since then, the State of Hawaii, Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Islands have continued to meet 
the health care needs of FAS citizens. The State of Hawaii has used 
State resources to provide Medicaid services to FAS citizens. In 2002 
alone, the State spent approximately $6.75 million to provide Medicaid 
services without receiving any Federal matching funds.
  There has been an increasing trend in the need for health care 
services among FAS citizens. During the current fiscal year, the number 
of individuals served in the State of Hawaii's Medicaid Program has 
grown from 3,291 to 4,818 people based on the average monthly 
enrollment. This is an increase of 46 percent. For only the first half 
of the fiscal year, the State of Hawaii has spent $4.66 million for the 
Medicaid costs incurred for FAS citizens. These Medicaid costs do not 
reflect additional State expenditures on medical care contracts to care 
for the uninsured, for community health care services, and for the 
activities of the Department of Health's Communicable Disease Branch.
  This bill would also provide eligibility for FAS citizens residing in 
the United States to participate in the Temporary Assistance for Needy 
Families and Supplemental Security Income programs. According to 
Hawaii's Attorney General, financial assistance in the form of the 
Temporary Assistance to Other Needy Families (TAONF) program, a State 
program, provided $4.5 million to FAS citizens in State Fiscal Year 
2002. Of this total, $390,000 was provided through the General 
Assistance program, which supports individuals and couples with little 
or no income and who have a temporary, incapacitating medical 
condition; $532,000 supported aged, blind, and disabled FAS citizens 
with little or no income who are not eligible for Federally funded 
Supplemental Security Income; and $3.6 million was spent on the State's 
TAONF program that assists other needy families who are not eligible 
for Federal funding under the Temporary Assistance to Needy Families 
program. The number of FAS citizens served by the Hawaii Department of 
Human Services has increased by almost 20 percent in the span of one 
year alone. The financial assistance that the State of Hawaii provides 
to FAS citizens in the form of TAONF is a great support to those 
families attempting to achieve economic stability, but it has a 
significant financial impact on the State's budget.
  The bill would also provide eligibility for the Food Stamp Program. 
The Food Stamp Program serves as the first line of defense against 
hunger. It is the cornerstone of the Federal food assistance program 
and provides crucial support to needy households and those making the 
transition from welfare to work. We have partially addressed the 
complicated issue of alien eligibility for public benefits such as food 
stamps, but again, I must say it is just partial. Not only should all 
legal immigrants receive these benefits, but so too citizens of the 
FAS. Exclusion of FAS citizens from Federal, State, or local public 
benefits or programs is an unintended and misguided consequence of the 
welfare reform law.
  We allow certain legal immigrants eligibility in the program. Yet FAS 
citizens, who are not considered immigrants, but who are required to 
sign up for the Selective Service if they are residing in the United 
States, are ineligible to receive food stamps. This bill corrects this 
inequity.
  I look forward to working with my colleagues to enact this measure 
which is of critical importance to my State of Hawaii, which has borne 
the costs of these benefits for FAS citizens living in Hawaii for the 
past 17 years.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1632

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

     SECTION 1. EXCEPTION FOR CITIZENS OF FREELY ASSOCIATED 
                   STATES.

       (a) In General.--Section 402(a)(2) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (8 U.S.C. 1612(a)(2)) is amended by adding at the end 
     the following:
       ``(M) Exception for citizens of freely associated states.--
     With respect to eligibility for benefits for the specified 
     Federal programs described in subparagraphs (A) and (B) of 
     paragraph (3), paragraph (1) shall not apply to any 
     individual who lawfully resides in the United States 
     (including territories and possessions of the United States) 
     in accordance with--
       ``(i) section 141 of the Compact of Free Association 
     between the Government of the United States and the 
     Government of the Federated States of Micronesia, approved by 
     Congress in the Compact of Free Association Amendments Act of 
     2003;
       ``(ii) section 141 of the Compact of Free Association 
     between the Government of the United States and the 
     Government of the Republic of the Marshall Islands, approved 
     by Congress in the Compact of Free Association Amendments Act 
     of 2003; or
       (iii) section 141 of the Compact of Free Association 
     between the Government of the United States and the 
     Government of Palau, approved by Congress in Public Law 99-
     658 (100 Stat. 3672).''.
       (b) Medicaid and TANF Exceptions.--Section 402(b)(2) of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996 (8 U.S.C. 1612(b)(2)) is amended by adding at the 
     end the following:
       ``(G) Medicaid exception for citizens of freely associated 
     states.--With respect to eligibility for benefits for the 
     program defined in paragraph (3)(C) (relating to the medicaid 
     program), section 401(a) and paragraph (1) shall not apply to 
     any individual who lawfully resides in the United States 
     (including territories and possessions of the United States) 
     in accordance with a Compact of Free Association referred to 
     in section 402(a)(2)(M).
       ``(H) TANF exception for citizens of freely associated 
     states.--With respect to eligibility for benefits for the 
     program defined in paragraph (3)(A) (relating to the 
     temporary assistance for needy families program), section 
     401(a) and paragraph (1) shall not apply to any individual 
     who lawfully resides in the United States (including 
     territories and possessions of the United States) in 
     accordance with a Compact of Free Association referred to in 
     section 402(a)(2)(M).''.
       (c) Qualified Alien.--Section 431(b) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (8 U.S.C. 1641(b)) is amended--
       (1) in paragraph (6), by striking ``or'' at the end;
       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(8) an individual who lawfully resides in the United 
     States (including territories and possessions of the United 
     States) in accordance with a Compact of Free Association 
     referred to in section 402(a)(2)(M).''.

[[Page 22403]]


                                 ______
                                 
      By Mr. CORZINE:
  S. 1633. A bill to require financial institutions and financial 
services providers to notify customers of the unauthorized use of 
personal information, to amend the Fair Credit Reporting Act to require 
fraud alerts to be included in consumer credit files in such cases, and 
to provide customers with enhanced access to credit reports in such 
cases; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, I rise today to introduce legislation, 
the Identity Theft Notification and Credit Restoration Act, to help 
prevent Americans from being victimized by the growing problem of 
identity theft. The bill would require financial institutions to notify 
consumers, credit reporting agencies and law enforcement entities when 
their security information systems have been breached in a manner that 
compromises the protection of their customers' personal financial 
information. By increasing awareness of identity theft and empowering 
consumers, early on, about potential threats, the legislation can help 
close the window of opportunity that criminals now exploit to abuse, 
and wreak financial devastation, on unsuspecting individuals.
  There is no doubt that we should be doing all we can to reduce the 
threat of identity theft to consumers, and the harm it brings to our 
economy. Today, identity theft is the single most frequent consumer-
related crime in the United States and it is growing at an alarming 
rate.
  According to the Federal Trade Commission (FTC), reported instances 
of identity theft rose 88 percent in 2002, to 380,000 from 220,000 in 
2001. And that does not even come close to reflecting the bigger threat 
posed by identity theft. A recent FTC survey suggests that the actual 
number of identity theft occurrences probably was in the ten million 
range--and that was last year alone. Over the past five years, over one 
in ten Americans has been a victim of identity theft. And I do not know 
anyone who does not have a close friend or family member who has been a 
victim of identity theft. It truly can happen to anyone, anywhere, at 
any time.
  The cost of this crime also is astounding. In situations in which 
offenders use stolen information to open new credit accounts, identity 
thieves abuse victims' credit to purchase an average of more than 
$10,000 in goods and services. And those costs grow as identity thieves 
become savvier and more brazen. From a macro-economic perspective, the 
damage is equally astounding. Last year, consumers spent an estimated 
five billion dollars in out-of-pocket expenses to cover losses 
attributed to identity theft.
  This data underscores the magnitude of the growing problem. But it is 
one that can be mitigated, when detected early on. The FTC has reported 
that early discovery, and disclosure, of identity theft directly 
reduces the time and money victims must invest to undo the damage 
wreaked upon them. When identity theft is uncovered in less than 6 
months, most consumers do not incur any costs. But, when this fraud is 
unnoticed for more than 6 months, an astounding 60 percent of victims 
must make payments out of their own pocket to cover the costs--and 
those numbers are often in the thousands of dollars.
  Consumers' experiences and the FTC's data demonstrate that awareness 
and notification are critical to reducing the harm that identity theft 
inflicts upon consumers. My bill, the Identity Theft Notification and 
Credit Restoration Act is based on three key principles--disclosure, 
prevention and credit restoration.
  First, the bill would require financial institutions to promptly 
disclose to affected customers, credit reporting agencies, and law 
enforcement when their information systems, either computerized or 
paper records, have been breached in a manner that compromises the 
security, confidentiality, or integrity of the ``personal financial 
information'' of that institution's customers.
  Second, the bill requires credit reporting agencies, upon 
notification of the breach, to place ``fraud alerts'' in the credit 
files of the affected individuals. This red flag will alert issuers of 
credit to undertake enhanced preau-
thorization procedures prior to issuing credit in the name of an 
individual who has this alert on their credit file, an important step 
that should prevent the fraudulent issuance of credit in the name of an 
identity theft victim.
  Finally, the bill provides victims of identity theft with access to 
four credit reports the year following the theft of their identity, to 
ensure that inaccurate and credit damaging information resulting from 
the identity theft does not end up on their credit file.
  The bill also improves the ability of all consumers to monitor the 
content, and accuracy, of the information contained in their individual 
credit file by providing them with access to one free credit report, 
and their credit score, per year.
  Congress has taken important steps towards minimizing the threat of 
identity theft. The most important was recognizing the problem and 
making identity theft a Federal crime in 1998. Since then, other steps 
have been taken. Industry groups are proactively combating identity 
theft--by using cutting-edge data encryption and truncating credit card 
numbers. And later this week, the Senate Banking Committee will mark up 
reauthorization of the Fair Credit Reporting Act, which will include an 
entire section dedicated to identity theft protection.
  But we can do more, and we must do more.
  Empowering consumers and increasing awareness of identity theft will 
minimize the risk, and impact, of this particularly harmful crime. This 
bill does just that. I urge my colleagues to support this legislation 
and ask unanimous consent that the text of the Identity Theft 
Notification and Credit Restoration Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1633

       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 ``Identity Theft Notification 
     and Credit Restoration Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the privacy and financial security of individuals is 
     increasingly at risk due to the ever more widespread 
     collection of personal information by both the private and 
     public sector;
       (2) credit card transactions, real estate records, consumer 
     surveys, credit reports, and Internet websites are all 
     sources of personal information and form the source material 
     for identity thieves;
       (3) identity theft is one of the fastest growing crimes 
     committed in the United States, and identity theft has become 
     one of the major law enforcement challenges of the new 
     economy, as vast quantities of sensitive personal information 
     are now vulnerable to criminal interception and misuse;
       (4) criminals who steal personal information use the 
     information to open fraudulent credit card accounts, write 
     bad checks, buy products, and commit other financial crimes 
     with assumed financial identities;
       (5) in 2002, more than 160,000 people notified the Federal 
     Trade Commission that they had been victims of identity 
     theft, more than 3 times the number reported in 2000;
       (6) identity theft is costly to consumers and to the United 
     States marketplace;
       (7) victims of identity theft are often required to contact 
     numerous Federal, State, and local law enforcement agencies, 
     consumer credit reporting agencies, and creditors over many 
     years, as each event of fraud arises;
       (8) the Government, financial institutions, financial 
     service providers, and credit reporting agencies that handle 
     sensitive personal information of consumers have a shared 
     responsibility to protect the information from identity 
     thieves, to assist identity theft victims, and to mitigate 
     the harm that results from fraud perpetrated in the name of 
     the victim; and
       (9) the private sector can better protect consumers by 
     improving customer notification, implementing effective fraud 
     alerts, affording greater consumer access to credit reports, 
     and establishing other financial identity theft prevention 
     measures.

     SEC. 3. TIMELY NOTIFICATION OF UNAUTHORIZED ACCESS TO 
                   PERSONAL INFORMATION.

       Subtitle B of title V of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6821 et seq.) is amended--
       (1) by redesignating sections 526 and 527 as sections 528 
     and 529, respectively; and
       (2) by inserting after section 525 the following:

[[Page 22404]]



     ``SEC. 526. NOTIFICATION TO CUSTOMERS OF UNAUTHORIZED ACCESS 
                   TO PERSONAL INFORMATION.

       ``(a) Definitions.--In this section--
       ``(1) the term `breach'--
       ``(A) means unauthorized acquisition of computerized data 
     or paper records which compromises the security, 
     confidentiality, or integrity of personal information 
     maintained by or on behalf of a financial institution; and
       ``(B) does not include a good faith acquisition of personal 
     information by an employee or agent of a financial 
     institution for a business purpose of the institution, if the 
     personal information is not subject to further unauthorized 
     disclosure; and
       ``(2) with respect to a customer of a financial 
     institution, the term `personal information' means the first 
     name or first initial and last name of the customer, in 
     combination with any one or more of the following data 
     elements, when either the name or the data element is not 
     encrypted:
       ``(A) A social security number.
       ``(B) A driver's license number or other officially 
     recognized form of identification.
       ``(C) A credit card number, debit card number, or any 
     required security code, access code, or password that would 
     permit access to financial account information relating to 
     that customer.
       ``(b) Notification Relating to Breach of Personal 
     Information.--
       ``(1) Financial institution requirement.--In any case in 
     which there has been a breach of personal information at a 
     financial institution, or such a breach is reasonably 
     believed to have occurred, the financial institution shall 
     promptly notify--
       ``(A) each customer affected by the violation or suspected 
     violation;
       ``(B) each consumer reporting agency described in section 
     603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a); 
     and
       ``(C) appropriate law enforcement agencies, in any case in 
     which the financial institution has reason to believe that 
     the breach or suspected breach affects a large number of 
     customers, including as described in subsection (e)(1)(C), 
     subject to regulations of the Federal Trade Commission.
       ``(2) Other entities.--For purposes of paragraph (1), any 
     person that maintains personal information for or on behalf 
     of a financial institution shall promptly notify the 
     financial institution of any case in which such customer 
     information has been, or is reasonably believed to have been, 
     breached.
       ``(c) Timing.--Notification required by this section shall 
     be made--
       ``(1) promptly and without unreasonable delay, upon 
     discovery of the breach or suspected breach; and
       ``(2) consistent with--
       ``(A) the legitimate needs of law enforcement, as provided 
     in subsection (d); and
       ``(B) any measures necessary to determine the scope of the 
     breach or restore the reasonable integrity of the information 
     security system of the financial institution.
       ``(d) Delays for Law Enforcement Purposes.--Notification 
     required by this section may be delayed if a law enforcement 
     agency determines that the notification would impede a 
     criminal investigation, and in any such case, notification 
     shall be made promptly after the law enforcement agency 
     determines that it would not compromise the investigation.
       ``(e) Form of Notice.--Notification required by this 
     section may be provided--
       ``(1) to a customer--
       ``(A) in writing;
       ``(B) in electronic form, if the notice provided is 
     consistent with the provisions regarding electronic records 
     and signatures set forth in section 101 of the Electronic 
     Signatures in Global and National Commerce Act (15 U.S.C. 
     7001);
       ``(C) if the Federal Trade Commission determines that the 
     number of all customers affected by, or the cost of providing 
     notifications relating to, a single breach or suspected 
     breach would make other forms of notification prohibitive, or 
     in any case in which the financial institution certifies in 
     writing to the Federal Trade Commission that it does not have 
     sufficient customer contact information to comply with other 
     forms of notification, in the form of--
       ``(i) an e-mail notice, if the financial institution has 
     access to an e-mail address for the affected customer that it 
     has reason to believe is accurate;
       ``(ii) a conspicuous posting on the Internet website of the 
     financial institution, if the financial institution maintains 
     such a website; or
       ``(iii) notification through the media that a breach of 
     personal information has occurred or is suspected that 
     compromises the security, confidentiality, or integrity of 
     customer information of the financial institution; or
       ``(D) in such other form as the Federal Trade Commission 
     may by rule prescribe; and
       ``(2) to consumer reporting agencies and law enforcement 
     agencies (where appropriate), in such form as the Federal 
     Trade Commission may prescribe, by rule.
       ``(f) Content of Notification.--Each notification to a 
     customer under subsection (b) shall include--
       ``(1) a statement that--
       ``(A) credit reporting agencies have been notified of the 
     relevant breach or suspected breach; and
       ``(B) the credit report and file of the customer will 
     contain a fraud alert to make creditors aware of the breach 
     or suspected breach, and to inform creditors that the express 
     authorization of the customer is required for any new 
     issuance or extension of credit (in accordance with section 
     605(g) of the Fair Credit Reporting Act); and
       ``(2) such other information as the Federal Trade 
     Commission determines is appropriate.
       ``(g) Compliance.--Notwithstanding subsection (e), a 
     financial institution shall be deemed to be in compliance 
     with this section if--
       ``(1) the financial institution has established a 
     comprehensive information security program that is consistent 
     with the standards prescribed by the appropriate regulatory 
     body under section 501(b);
       ``(2) the financial institution notifies affected customers 
     and consumer reporting agencies in accordance with its own 
     internal information security policies in the event of a 
     breach or suspected breach of personal information; and
       ``(3) such internal security policies incorporate 
     notification procedures that are consistent with the 
     requirements of this section and the rules of the Federal 
     Trade Commission under this section.
       ``(h) Civil Penalties.--
       ``(1) Damages.--Any customer injured by a violation of this 
     section may institute a civil action to recover damages 
     arising from that violation.
       ``(2) Injunctions.--Actions of a financial institution in 
     violation or potential violation of this section may be 
     enjoined.
       ``(3) Cumulative effect.--The rights and remedies available 
     under this section are in addition to any other rights and 
     remedies available under applicable law.
       ``(i) Rules of Construction.--
       ``(1) In general.--Compliance with this section by a 
     financial institution shall not be construed to be a 
     violation of any provision of subtitle (A), or any other 
     provision of Federal or State law prohibiting the disclosure 
     of financial information to third parties.
       ``(2) Limitation.--Except as specifically provided in this 
     section, nothing in this section requires or authorizes a 
     financial institution to disclose information that it is 
     otherwise prohibited from disclosing under subtitle A or any 
     other provision of Federal or State law.
       ``(3) No new recordkeeping obligation.--Nothing in this 
     section creates an obligation on the part of a financial 
     institution to obtain, retain, or maintain information or 
     records that are not otherwise required to be obtained, 
     retained, or maintained in the ordinary course of its 
     business or under other applicable law.''.

     SEC. 4. INCLUSION OF FRAUD ALERTS IN CONSUMER CREDIT REPORTS.

       Section 605 of the Fair Credit Reporting Act (15 U.S.C. 
     1681c) is amended by adding at the end the following:
       ``(g) Fraud Alerts.--
       ``(1) Defined term.--In this subsection, the term `fraud 
     alert' means a clear and conspicuous statement in the file of 
     a consumer that notifies all prospective users of the 
     consumer credit report (or any portion thereof) relating to 
     the consumer, that--
       ``(A) the identity of the consumer may have been used, 
     without the consent of the consumer, to fraudulently obtain 
     goods or services in the name of the consumer; and
       ``(B) the consumer does not authorize the issuance or 
     extension of credit in the name of the consumer, unless the 
     issuer of such credit, upon receiving appropriate evidence of 
     the true identity of the consumer--
       ``(i) obtains express preauthorization from the consumer at 
     a telephone number designated by the consumer; or
       ``(ii) utilizes another reasonable means of communication 
     to obtain the express preauthorization of the consumer.
       ``(2) Inclusion of fraud alert in consumer file.--
       ``(A) Upon notification by financial institution.--A 
     consumer reporting agency shall include a fraud alert meeting 
     the requirements of this subsection in the file of a consumer 
     promptly upon receipt of a notice from a financial 
     institution under section 526(b)(1)(B) of the Gramm-Leach-
     Bliley Act relating to the consumer.
       ``(B) Upon request of consumer.--A consumer reporting 
     agency shall include a fraud alert meeting the requirements 
     of this subsection in the file of a consumer promptly upon 
     receipt of--
       ``(i) a request by the consumer; and
       ``(ii) appropriate evidence of--

       ``(I) the true identity of the person making the request; 
     and
       ``(II) the claim of identity theft forming the basis for 
     the request.

       ``(3) Consumer reporting agency responsibilities.--A 
     consumer reporting agency shall ensure that each person 
     procuring consumer credit information with respect to a 
     consumer is made aware of the existence of a fraud alert in 
     the file of that consumer, regardless of whether a full 
     credit report, credit score, or summary report is requested.

[[Page 22405]]

       ``(4) Removal of fraud alerts.--The Federal Trade 
     Commission shall issue appropriate regulations to establish--
       ``(A) the duration of fraud alerts required by this 
     subsection, which standard shall be applied consistently to 
     all consumer reporting agencies, to the extent possible; and
       ``(B) procedures for the removal of fraud alerts included 
     in the files of consumers under this subsection.
       ``(5) Violations.--
       ``(A) Consumer reporting agency.--A consumer reporting 
     agency that fails to notify any user of a consumer credit 
     report of the existence of a fraud alert in that report shall 
     be in violation of this section.
       ``(B) User of a consumer report.--A user of a consumer 
     report that fails to comply with preauthorization procedures 
     contained in a fraud alert in the file of a consumer and 
     issues or extends credit in the name of the consumer to a 
     person other than the consumer shall be in violation of this 
     subsection.
       ``(C) No adverse action based solely on fraud alert.--It 
     shall be a violation of this title for the user of a consumer 
     report to take adverse action with respect to a consumer 
     based solely on the inclusion of a fraud alert in the file of 
     that consumer, as required by this subsection.''.

     SEC. 5. ACCESS TO CREDIT REPORTS AND SCORES.

       (a) No Fee In Certain Cases.--Section 612(c) of the Fair 
     Credit Reporting Act (15 U.S.C. 1681j(c)) is amended to read 
     as follows:
       ``(c) No-Cost Access to Credit Reports and Scores.--
       ``(1) In general.--Upon request of a consumer, and without 
     charge to the consumer, a consumer reporting agency shall 
     make all of the disclosures listed under section 609 to the 
     consumer--
       ``(A) once during each calendar year; and
       ``(B) once every 3 months during the 1-year period 
     beginning on the date on which a fraud alert is included in 
     the file of a consumer under section 605(g).
       ``(2) Fee authorized.--A credit reporting agency may charge 
     a reasonable fee for the costs of disclosures under paragraph 
     (1)(B) to the financial institution providing the 
     notification that is the basis for the subject fraud alert, 
     as required by section 526(b)(1)(B) of the Gramm-Leach-Bliley 
     Act.''.
       (b) Inclusion of Credit Scores.--Section 609(a)(1) of the 
     Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is amended 
     by striking ``except that'' and all that follows through 
     ``predictors'' and inserting ``, including any credit 
     score''.

     SEC. 6. REGULATIONS.

       Not later than 180 days after the date of enactment of this 
     Act, the Federal Trade Commission, after consultation with 
     Federal banking agencies, the Securities and Exchange 
     Commission, and other appropriate financial services 
     regulatory agencies, shall issue final regulations to carry 
     out the amendments made by this Act.
                                 ______
                                 
      By Mr. CHAMBLISS:
  S. 1635. A bill to amend the Immigration and Nationality Act to 
ensure the integrity of the L-1 visa for intracompany transferees; to 
the Committee on the Judiciary.
  Mr. CHAMBLISS. Mr. President, I rise today to introduce the L-1 Visa 
Reform Act which affects intracompany transferees seeking entry to the 
United States. Congress created the L-1 visa to allow international 
companies to move executives, managers, and other key personnel within 
the company and into the U.S. temporarily. The L-1 is an important tool 
for our multi-national corporations, however, some companies are making 
an end-run around the visa process by bringing in professional workers 
on L-1 visas and then outsourcing those workers to a third party 
company. In other words, some firms are using the so-called ``L-1 
loophole'' to become the international equivalent of temp agencies, or 
``job shops.'' As a result, American workers are being displaced by 
foreign workers who are brought to the U.S. essentially for their 
labor. This must stop--my legislation targets the problem, closes the 
loophole, and protects U.S. jobs from inappropriate use of the L-1 
visa.
  The situation in question arises when a company with both foreign and 
U.S.-based operations obtains an L-1 visa to transfer a foreign 
employee who has ``specialized knowledge'' of the company's product or 
processes. The problem occurs only when an employee with specialized 
knowledge is placed offsite at the business location of a third party 
company. In this context, if the L-1 employee does not bring anything 
more than generic knowledge of the third party company's operations, 
the foreign worker is acting more like an H-1B professional than a true 
intracompany transferee. Outsourcing an L-1 worker in this way has 
resulted in American workers being displaced at the third party 
company. In these difficult economic times, we must ensure that 
American workers aren't losing their jobs to cheap foreign labor by 
those circumventing protections already in law.
  Several weeks ago I held a hearing on L-1 visa concerns in the 
Immigration Subcommittee. We heard from a full-range of witnesses--from 
a displaced worker and labor unions to small and large U.S. companies 
to business immigration experts. The hearing clearly demonstrated a 
problem exists, and the testimony of our witnesses directed attention 
to Congress' intent in creating the L-1 visa. The bill I am introducing 
today clarifies Congress' intent and restricts the inappropriate use of 
the L-1 visa. The bill does so without forcing unnecessary restrictions 
on the visa that would only result in adverse effects on legitimate L-1 
users.
  The L-1 Visa Reform Act prevents companies from using the L-1 visa 
when an H-1B visa with its worker protections is appropriate. The 
legislation requires that any employee with specialized knowledge who 
is located offsite must, first, be controlled and supervised by the 
petitioning company and, second, be provided in connection with an 
exchange of products or services between the petitioning company and 
the third-party company. This will stop the practice of a consulting 
company bringing in foreign workers to send over to a manufacturer when 
the consulting company does nothing more than cut the foreign worker's 
paycheck once a month. Instead, the bill requires the third-party 
company to have a pre-existing business relationship with the 
petitioning company that is more than just supplying workers.
  In addition, the legislation requires companies to employ a worker 
for at least one year before sending the employee over on an L-1 intra-
company transfer. One year is a reasonable amount of time to require an 
employee to have attained the specialized knowledge of the company's 
products, services or processes to qualify for the visa. The bill also 
mandates the Department of Homeland Security to maintain statistics 
differentiating between L-1 transferees who are managers and executives 
and those who are specialized knowledge employees. This will provide 
better accountability and fraud prevention when L-1 petitions are 
reviewed and approved.
  We need the best people in the world to come to the United States, to 
bring their skills and innovative ideas, and to support our business 
enterprises. The L-1 visa is an important tool to achieve these 
purposes. But we must ensure that American workers are not displaced by 
foreign workers, particularly when we have safeguards in place albeit a 
loophole in law. The L-1 Visa Reform Act will close that loophole for 
the benefit of U.S. workers and for U.S. businesses who use the visa as 
it is intended.
  I yield the floor.

                          ____________________