[Senate Report 108-187]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 366
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-187

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



 
                    WORKFORCE INVESTMENT ACT OF 1998

                                _______
                                

                November 5, 2003.--Ordered to be printed

                                _______
                                

    Mr. Gregg, from the Committee on Health, Education, Labor, and 
                   Pensions, submitted the following

                              R E P O R T

                         [To accompany S. 1627]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 1627) to reauthorize the 
Workforce Investment Act of 1998, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment in the nature of a substitute and recommends that the 
bill (as amended) do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary of Legislation...............................1
 II. Background and Need for the Legislation..........................5
III. Legislative History and Votes in Committee.......................7
 IV. Explanation of Bill and Committee Views..........................8
  V. Cost Estimate...................................................51
 VI. Application of Law to the Legislative Branch....................55
VII. Regulatory Impact Statement.....................................56
VIII.Section-by-Section Analysis.....................................56

 IX. Changes in Existing Law.........................................93

                 I. Purpose and Summary of Legislation

    The purpose of S. 1627, the Workforce Investment Act 
Amendments of 2003, is to reauthorize and improve the workforce 
investment system created under the Workforce Investment Act of 
1998. The bill also reauthorizes and enhances the Adult 
Education and Family Literacy Act and the Rehabilitation Act.

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

    S. 1627 is the product of an extensive bipartisan effort, 
as well as significant input from stakeholders and the 
Department of Labor. The goals of the legislation include: 
helping workers find new or better jobs, thereby increasing 
self-sufficiency; providing employers, including small 
employers, with an appropriately trained workforce they need to 
compete in the global marketplace; improving 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 can address the 
needs of hard-to-serve populations, including individuals with 
disabilities, in all areas of the Nation; better connecting the 
job training system with the private sector and with post-
secondary education and training, social services, and economic 
development systems to prepare the 21st century workforce for 
career opportunities and skills in high-growth sectors; 
promoting the informed choice of participants; allowing 
flexibility to meet State, local, regional, and individual 
workforce investment needs; removing barriers in the law that 
have discouraged business involvement in workforce training, 
that have discouraged qualified training providers from 
participating, and that have discouraged States and localities 
from serving hard-to-serve populations.

State Workforce Investment Boards

    This legislation streamlines membership on the State 
workforce investment boards. To improve the link between 
workforce development and economic development, State boards 
must include the State economic development agency. The 
legislation requires that business representatives include 
representatives of small businesses. The State board functions 
are expanded, including the development and review statewide 
policies affecting the coordinated provision of services 
through the one-stop systems, and the development of objective 
criteria for use by local boards in assessing the effectiveness 
and continuous improvement of one-stops.

State Plans

    State are required to submit strategic plans every 4 years, 
and amend such plans, as needed, after 2 years to reflect labor 
market and economic conditions. S. 1627 expands the contents of 
the state plan to reflect the additional purposes of the 
legislation.

Local Workforce Investment Areas

    Automatic designation of local areas is tied to successful 
performance and fiscal integrity.

Local Workforce Investment Boards

    Membership on local workforce investment boards is 
streamlined by eliminating the requirement that one-stop 
partners serve on the local board. Local boards have the option 
of creating advisory committees and youth councils.

Local Plans

    Local boards are required to submit strategic plans every 4 
years, and amend such plans, as needed, after 2 years to 
reflect labor market and economic conditions. S. 1627 expands 
the contents of the local plan to reflect the additional 
purposes of the legislation.

One-Stop Delivery System

    The legislation places greater emphasis on the role of the 
one-stop partners in the delivery of program services, 
consistent with the local Memorandum of Understanding. The 
State board, in consultation with chief local elected officials 
and local boards, is required to establish criteria for use by 
the local board in assessing the effectiveness, physical and 
programmatic accessibility, and continuous improvement of one-
stop centers and delivery systems. If local areas fail to come 
to an agreement with mandatory partners regarding sufficient 
funding of one-stop infrastructure costs, a State one-stop 
infrastructure funding mechanism can be imposed. Mandatory 
partner program contributions pursuant to the State one-stop 
infrastructure funding mechanism are based on the proportionate 
use of the one-stop centers and subject to specified caps.

Eligible Providers of Training Services

    The legislation amends the current eligibility requirements 
to authorize the Governors to establish new criteria and 
procedures for the eligibility of training providers. The 
Criteria must take into account such factors as: performance, 
access throughout the State, information required to be 
reported to State agencies, applicable State licensing 
requirments, encouraging industry recognized standards where 
practicable, and the ability to serve hard-to-serve 
populations. Local boards may establish additional performance 
criteria. The legislation provides a transition period for 
implementation and an exception for on-the-job or customized 
training. Local boards may award grants or contracts to 
providers of youth activities on a sole-source basis if there 
is an insufficient number of eligible providers in the local 
area.

Youth Activities

    The legislation authorizes up to $250,000,000 for Youth 
Challenge Grants for each year in which the appropriation for 
youth activities exceeds $1,000,000,000. At least 80 percent of 
the funds for Youth Challenge Grants are to be awarded by the 
Secretary on a competitive basis. The Secretary is authorized 
to use up to 20 percent of the funds for Youth Challenge Grants 
to award discretionary grants. The Secretary must reserve at 
least $10,000,000 for migrant and seasonal farmworker youth 
activities. State allotments up to the 2003 allotted amount are 
distributed pursuant to the current law formula. State 
allotments in excess of the 2003 allotted amount are 
distributed as follows: \1/3\ on the basis of the relative 
number of the labor force aged 16-21 in the State, \1/3\ of the 
basis of the relative number of unemployed individuals in the 
State, \1/3\ on the basis of the number of disadvantaged youth 
aged 16-21 in the State. The Governor is allowed to reserve up 
to 15 percent of the State allotment for statewide workforce 
investment activities. S. 1627 defines in-school and out-of-
school youth for purposes of youth participant eligibility. The 
legislation requires that no more than 60 percent of the State 
and local funds be spent on in-school youth.

Adult and Dislocated Worker Employment and Training Activities

    S. 1627 retains the three separate funding streams of WIA 
Adult, WIA Dislocated Workers, and Wagner-Peyser Act employment 
service program. The formula for allotting the Adult funding to 
States is revised as follows: 40 percent is allotted of the 
basis of the relative number of unemployed in areas of 
substantial unemployment in each State, 25 percent is allotted 
on the basis of the relative number in the civilian workforce 
in each State, 35 percent is allotted on the basis of the 
relative number of disadvantaged workers in each State. States 
that lose funding because of formula change will be made whole 
from a Secretary's reserve fund of up to $20,000,000. The 
legislation bases the reallotment of funds on the amount by 
which the unexpended balance exceeds 30 percent of the previous 
year's allotment. Unexpended balance is defined as the total 
amount of funds available the previous year less accrued 
expenditures.
    As under current law, the Governor must reserve up to 25 
percent of dislocated worker funds for statewide rapid response 
activities. S. 1627 allows the Governor to redistribute rapid 
response funds unexpended after the program year. The 
legislation adds required and allowable statewide activities 
which reflect the purposes of the legislation.
    In order to avoid duplication of services, the legislation 
requires the co-location of employment services under the 
Wagner-Peyser Act at comprehensive one-stop centers. To provide 
greater flexibility in the delivery of services. the provisions 
regarding eligibility for intensive and training services are 
amended. Participants are not required to spend a specific 
amount of time in one tier of service. The legislation 
continues to utilize the term self-sufficiency for purposes of 
determining eligibility for intensive and training services. S. 
1627 adds permissible local activities which reflect the 
purposes of the legislation. S. 1627 allows a local board to 
use up to 10 percent of local funds for incumbent worker 
training.

Performance Measures

    The legislation amends current law to provide for more 
accurate and complete data collection, reporting, and 
performance measures that are not unduly burdensome. S. 1627 
requires adjustment of performance measures to reflect economic 
conditions and the characteristics of the population served to 
remove disincentives to serving hard-to-serve populations. 
States are required to provide more complete information on the 
type of services being provided with WIA funds.

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

    This title reauthorizes and amends the Adult Education and 
Family Literacy Act of 1998. It includes the formula 
allocations for State adult education programs, the required 
content of State plans submitted, national and State leadership 
activities that may be performed with funds appropriated for 
this Act, and authorizes such sums as necessary to carry out 
this title.
    Because of the increasing number of individuals needing 
basic skills education in reading, writing, English language 
acquisition, and math, there is more focus on providing courses 
in these areas. Programs offered by local providers should 
include a sequence of rigorous, academic courses and activities 
leading to proficiency in the basic literacy and mathematics 
skills, as well as family literacy. Accountability provisions 
are strengthened to ensure programmatic effectiveness.
    The National Institute for Literacy is reauthorized and 
includes literacy activities across the life span of 
individuals: children, youth, adults and families. It continues 
to be instrumental in the federal effort to promote literacy 
activities, and is charged with disseminating scientifically-
based literacy information to eligible programs and providers.

         TITLE IV--AMENDMENTS TO THE REHABILITATION ACT OF 1973

    Title IV of the bill reauthorizes and amends the 
Rehabilitation Act of 1973. The major goals of the 
Rehabilitation Act Amendments of 2003 provisions are to: 
strengthen individual choice and transition planning for 
individuals with disabilities; create a stronger link between 
the Rehabilitation Act, the President's New Freedom Initiative 
and the Olmstead Executive Order (13217: Community-Based 
Alternatives for Individuals with Disabilities); increase the 
opportunity to expand Vocational Rehabilitation partnerships 
with business/employers; and improve coordination with other 
employment programs such as the Workforce Investment Act and 
the Ticket to Work Act.

              II. Background and Need for the Legislation


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

    The Workforce Investment Act (WIA) was enacted in 1998 to 
unify a fragmented employment and training system into a more 
comprehensive workforce investment system that better serves 
job seekers and employers. At the time WIA was enacted, the 
Nation's job training system was a complex patchwork of 
numerous rules and overlapping bureaucracies. Individuals 
seeking employment opportunities and employers seeking to hire 
them faced a duplicative maze of narrowly focused programs that 
lacked coordination or a coherent strategy. The result was a 
Federal job training, adult education, and vocational education 
system that failed to meet the needs of those seeking 
assistance.
    WIA abolished the Job Training Partnership Act (JTPA) and 
created 3 new funding Streams: Adult, Dislocated Worker, and 
Youth. The foundation of WIA was the creation of the one-stop 
center system through which 17 mandatory programs where 
required to deliver employment and training services that job 
seekers and employers could readily access. WIA expected such 
mandatory partners to share the costs of operating one-stop 
centers through memorandums of understanding negotiated at the 
local level.
    WIA also sought to engage business to ensure that the 
workforce investment system was responsive to employers' needs. 
The private sector was to drive the system through 
participation on State and Local workforce investment boards. 
WIA services were redesigned from those offered under JTPA and 
included core, intensive and training services. WIA training 
services were offered primarily through the use of vouchers for 
eligible training providers. Recognizing that Washington cannot 
and should not determine State and local workforce needs. WIA 
intended to provide flexibility to States and localities to 
meet their own workforce needs.
    WIA represented a fundamental change in the delivery of the 
Nation's employment and training services. States were required 
to implement major provisions of WIA by July 1, 2000. 
Therefore, WIA is still a fairly new system. While the system 
has certainly experienced some successes as States and 
localities increase their understanding of WIA, the full 
promise of WIA has yet to be realized. As the dust has settled 
after 3 years of implementation, challenges to WIA's full 
success have become clearer.
    The General Accounting Office (GAO) identified aspects of 
the law that have hampered implementation in its study on 
``Exemplary One-Stops Devised Strategies to Strengthen 
Services, but Challenges Remain for Reauthorization'' (GAO-03-
884T). The GAO found that the performance measurement system 
developed under WIA may be causing some clients to be denied 
service and does not allow for an accurate understanding of 
WIA's effectiveness. Local areas are reluctant to provide WIA-
funded services to job seekers who may be less likely to find 
employment or experience an increase in earnings when they are 
placed in a job.
    The GAO also identified flaws in the funding formula, 
including the problem that formula factors used to allocate 
funds are not aligned with the target populations. 
Implementation of WIA has also been hampered by uncertainty and 
inconsistency of funding for one-stop infrastructure costs. The 
GAO found that across all the sites it visited for an early 
implementation study, WIA's Adult and Dislocated Worker 
programs and, across most sites, Wagner-Peyser Employment 
Service, were the only partners consistently making monetary 
contributions to pay for the one-stops' operational costs. 
According to GAO's study, WIA's system for certifying training 
providers may reduce training options for job seekers. Many 
training providers consider the current process for certifying 
their eligibility to be overly burdensome, and reduce their 
course offerings available for WIA participants. Such 
eligibility requirements have undermined the ``consumer 
choice'' that WIA was intended to provide.
    WIA replaced a public job training and employment system in 
which employers have lost confidence. Prior to the enactment of 
WIA, many employers turned to nonpublic sources to identify and 
train workers. WIA envisioned statewide and local partnerships, 
led by employers, to develop the strategy for the comprehensive 
State workforce investment system. These partnerships at the 
State and local level were to be ``policy entities'' outlining 
the employment, training and skills needs, not entities 
burdened by bureaucratic and administrative duties. 
Unfortunately, the public-private workforce investment 
partnership remains burdened by bureaucratic and administrative 
duties, which has discouraged business involvement. Many 
businesses, including small businesses, remain unengaged or 
unaware of WIA's workforce investment system.
    Some States and localities have found creative ways to 
overcome the challenges imposed by current law. Many others 
remain impeded by these barriers. The Workforce Investment Act 
Amendments of 2003 removes the barriers and builds upon the 
successes of the landmark 1998 legislation.
    As was the case in 1998, reform of the Nation's job 
training and employment system is needed because the economic 
future of our country depends on a well-trained workforce. To 
keep the American dream within the grasp of all Americans, we 
have to deal with the changing face of our Nation's economy. 
The kind of jobs that are available today and will be in the 
future are different from those that were highly valued a few 
years, or even a few months, ago. Those seeking new or better 
jobs must have the training they will need for these new 
positions. Our businesses must have the skilled employees they 
need to compete in the new, more global economy. Improving the 
Workforce Investment Act will improve the lives of America's 
workers and their families and increase the strength of our 
Nation's businesses and communities.

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

    There is a significant need for services that can reach the 
adult population that lacks basic mathematics and literacy 
skills. The Bureau of the Census has reported that 9.8 percent 
of the nation's young people between the ages of 16 and 19 have 
not completed the work necessary for a high school diploma or 
its equivalent. Of all Americans over age 25, 7.5 percent have 
a ninth grade education or lower.
    According to 2002 data from the National Assessment of 
Education Progress (NAEP), roughly two thirds of the students 
leaving high school read at basic levels of literacy or below. 
This extraordinary statistic is appropriately being addressed 
through the landmark No Child Left Behind Act, but there is a 
definite need for services provided for those individuals who 
are now beyond the secondary education system and still lack 
basic literacy skills.
    In addition, the growing immigrant and limited English 
proficient population, which makes up a growing share of adult 
education participants, has a demonstrated need for a stronger 
background in American history and civics education. The 
Committee believes that the adult education and family literacy 
programs are a natural programmatic fit for efforts to help 
immigrants to this country identify the principles that make 
this nation great.

            III. Legislative History and Votes in Committee

    The Subcommittee on Employment, Safety and Training held 
two hearings on the reauthorization of the Workforce Investment 
Act. The first hearing was held on March 6, 2003. The only 
witness to testify was D. Cameron Findlay, Deputy Secretary of 
Labor.
    The second hearing was held on June 18, 2003. The hearing 
included two panels. Testifying at the first panel was Sigurd 
Nilsen, representing the General Accounting Office. The second 
panel was made up of Curtis Austin, executive director, 
Workforce Florida Inc., James Ellenberger, deputy commissioner, 
Virginia Employment Commission; Michael Kennedy, executive 
director, Pacific Mountain Workforce Development Council; 
Michael Smeltzer, executive director, Manufacturers' 
Association of South Central Pennsylvania; Charles Ware, 
chairman, Wyoming Workforce Development Council.
    Senator Enzi introduced S. 1627 on September 27, 2003, with 
Senators Gregg, Kennedy, and Murray as cosponsors. On October 
2, 2003, the Senate Committee on Health, Education, Labor and 
Pensions met in executive session and favorably reported the 
bill unanimously after also unanimously accepting an amendment 
from Senator Clinton.

              IV. Explanation of Bill and Committee Views


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

    The Workforce Investment Act of 1998 (WIA) was enacted to 
create a streamlined workforce development system that could 
effectively respond to the needs of workers and employers 
alike. WIA has helped many Americans seeking new or better 
jobs. However, the full promise of WIA has yet to be realized. 
This legislation reflects the Committee's bipartisan belief 
that our Nation's workforce development system must work at all 
stages of the economic cycle and in all areas of the country. 
The Committee believes that reauthorization of WIA gives 
Congress the opportunity to improve the lives of our Nation's 
workers and increase the strength of our businesses and 
communities. Reauthorization of WIA is an opportunity to 
complete the transformation of fragmented employment and 
training programs into a seamless workforce investment system.
    The Workforce Investment Act Amendments of 2003 builds upon 
the success of WIA while addressing its shortcomings. The 
Committee believes that reauthorization of WIA should address 
concerns that have come to light in the implementation of this 
relatively new workforce development system and push the system 
towards innovation and needed reforms. The bill focuses on 
changes to the law that: fix problems with the statute that 
stand in the way of successful implementation; encourage the 
building of a comprehensive, high quality workforce investment 
system; encourage innovation in serving workers and in 
providing enhanced services to businesses, both large and 
small; improve access to services in all areas; and expand 
opportunities for education and training.
    S. 1627 is the product of an extensive bipartisan effort. 
The Committee solicited and received extensive input from 
stakeholders in crafting the bill. The principal organizations 
representing the local workforce delivery system, the National 
Association of Counties, the National Association of Workforce 
Boards, the National Workforce Association, and the United 
States Conference of Mayors, wrote a letter on September 24, 
2003 in strong support of S. 1627:

          S. 1627 represents the committee's sincere commitment 
        to responding to the workforce development needs of 
        business and workers throughout America at a time when 
        joblessness remains a major impediment to full economic 
        recovery. We believe that this bill will do much to 
        strengthen the workforce investment system by enhancing 
        services to business, unemployed and dislocated workers 
        and others in need of workforce development assistance, 
        while strengthening the relationships between the 
        public and private sectors and states, counties and 
        cities.

The committee also received significant assistance from the 
Department of Labor in crafting the bill.

Purpose

    The committee believes that the self-sufficiency of 
participants is a key goal of WIA. Therefore, the committee 
added as an additional purpose of WIA to provide workforce 
investment activities that increase self-sufficiency. The 
committee wants to ensure that the workforce investment system 
is demand driven and responsive to the needs of employers, 
including small employers. The committee also wants to ensure 
that the system works in all areas of the Nation, allows 
flexibility to meet State, local, regional, and individual 
needs, recognizes the vital link between economic development 
and workforce development, equips workers with higher skills 
and contributes to livelong education, eliminates training 
disincentives for hard-to-serve population, educates limited 
English proficient individuals to become employable, and 
increases the employment, retention and earnings of individuals 
with disabilities. As reflected throughout S. 1627, the 
committee included these objectives among additional purposes 
of WIA.
    One of the purposes of the bill is to increase the 
employment, retention, and earnings of individuals with 
disabilities. The committee intends that the Vocational 
Rehabilitation System and the One-Stops work together 
appropriately to meet the employment needs of all people with 
disabilities. The committee notes that only 30 percent of 
people with disabilities are employed, compared to 82 percent 
for those without disabilities, and approximately 79 percent of 
people with disabilities who are not working want to work. The 
committee strongly believes that the WIA one-stops should play 
a vital role helping to increase employment and training 
opportunities for individuals with disabilities. According to 
the Department of Labor, ``in strengthening the ability of the 
One-Stops and mainstream employment systems to serve people 
with disabilities, there are multiple challenges relating to 
physical and programmatic accessibility, customer relations, 
and access to knowledge about accommodations and effective 
service strategies.''
    In recognition of these challenges, the committee has 
included numerous provisions designed to improve employment 
outcomes for people with disabilities. To ensure successful 
employment outcomes the one-stop system must be accessible to 
people with disabilities both physically and programmatically, 
as section 188 requires. The term programmatic access means 
policies, practices, and procedures providing effective and 
meaningful opportunity for persons with disabilities to 
participate in or benefit from core, intensive, training, and 
support services.
    Programmatic access includes providing reasonable 
accommodations for individuals with disabilities, making 
reasonable modifications to policies, practices, and 
procedures, administering programs in the most integrated 
setting appropriate, communicating with persons with 
disabilities as effectively as with others, and providing 
appropriate auxiliary aids or services, including assistive 
technology devices and services, where necessary to afford 
individuals with disabilities an equal opportunity to 
participate in, and enjoy the benefits of, the program or 
activity. Key aspects of the ``program'' include registration, 
customer outreach, service delivery and coordination, and 
performance measures and outcome data collection.
    The committee intends that one-stops to be both physically 
and programmatically accessible to all participants and 
commends the Civil Rights Center (CRC) in the Office of the 
Assistant Secretary for Administration and Management, the 
Assistant Secretary for Disability Employment Policy (ODEP), 
and the Assistant Secretary for Employment and Training (ETA) 
for their efforts to improve employment outcomes for people 
with disabilities by working together to issue the WIA Section 
188 Disability Checklist and awarding numerous grants as part 
of the New Freedom Initiative. The committee expects that ODEP, 
working in conjunction with ETA, CRC, other program operating 
components with DOL and other agencies and departments, will 
continue to enhance meaningful and effective employment 
opportunities for persons with disabilities consistent with the 
disability-related amendments included in S. 1627. The 
committee also expects that ETA and CRC will carry out their 
responsibilities under section 183 for the various disability 
related amendments included in S. 1627.

State Workforce Investment Boards

    S. 1627 amends the State workforce investment board 
membership requirements to better focus the State board on 
statewide workforce and economic issues. Required members 
include the lead State agency officials for one-stop partner 
programs, the State economic development agency, 
representatives of business, including small business, a chief 
local elected officials, labor representatives, and state 
legislators. Governors retain the right to designate additional 
members. To ensure that the system is demand-driven and 
responsive to the needs of employers, the Committee retains the 
requirement that a majority of board members be business 
representatives.
    S. 1627 adds to the State board a representative of the 
Vocational Rehabilitation (VR) program authorized under the 
Rehabilitation Act of 1973. If a State has established a 
separate agency or unit to provide VR services to individuals 
who are blind, the Governor may appoint this person to the 
State board as well as the head of the state VR agency.
    It is important that States play a pivotal role in 
providing resources and support for the one-stop delivery 
system and in providing rapid response assistance for 
dislocated workers, in conjunction with local efforts. States 
also play an essential role in providing leadership, guidance, 
technical assistance, professional development opportunities, 
and incentives for carrying out initiatives that foster 
comprehensive workforce investment systems, innovative service 
strategies for meeting the needs of business and workers, 
linkages between workforce and economic development, and 
expanded opportunities for training tied to the skill needs of 
workers and employers in the State. State Boards are an 
important resource in providing such strategic leadership and 
guidance in the buildings and implementation of comprehensive 
statewide workforce investment systems in each State. In 
particular, the committee concluded that the boards should 
provide guidance to all WIA partner programs on the integration 
of service delivery and on appropriate resource contributions 
to the one-stop infrastructure in each State.
    With regard to the one-stop delivery system, while the 
committee did not provide State boards with authority to 
certify the selection and operation of one-stops, S. 1627 does 
require that State Boards develop objective criteria for use by 
local boards in determining one-stop effectiveness and 
continuous improvement. This function of the State boards is 
very important to ensure consistency and high quality one-stop 
delivery systems throughout the State without undermining or 
lessening the role of local boards in the selection and 
oversight of the one-stop delivery system within each local 
area.
    The committee believes that technology can, and should, be 
used to make the one-stop delivery system more accessible. 
Therefore, S. 1627 adds as a State board function the 
development of strategies to leverage technology to facilitate 
access to services provided through the one-stop delivery 
system in remote areas and for individuals with disabilities. 
Charles Ware, Chairman of the Wyoming Workforce Development 
Council, testified before the Subcommittee on Employment, 
Safety and Training on June 18, 2003 regarding the use of 
technology to improve access to WIA services in rural areas. 
Mr. Ware stated that: ``As Wyoming moves into its fourth year 
of WIA implementation we look to new technologies like our 
state's video conferencing system and Internet based programs 
as a means to provide rural access to workforce services.'' The 
committee urges other States and localities to leverage 
technology to expand access to services.
    To avoid undue disruption to the workforce investment 
system, the bill retains the alternative entity grandfathering 
provisions in section 111(e) of WIA. However, the committee 
strongly believes that the system must be built on a 
performance-based structure. Therefore, the committee decided 
to base eligibility for alternative entity grandfathering on 
the State's successful performance. Such determination of 
whether of not a State performed successfully would be 
determined by the same criteria used to determined whether or 
not the State is sanctioned under section 136 of WIA.
    S. 1627 also adds a section providing that the State board 
has the authority to hire staff to carry out its functions 
using funds allocated to the State for WIA youth and adult 
activities.

State Plans

    For a state to be eligible to receive money under section 
127 or 132, or to receive financial assistance under the Wagner 
Peyser Act, the Governor of the state must continue to submit a 
state plan that outlines a 4-year strategy. This is a change 
from the 5-year plan required under the previous Act. The 
committee unanimously agreed that the plan should be review, 
updated, and modified as needed at the end of 2 years, to 
accurately reflect the labor market and economic conditions of 
the state. Should the State determine that modifications are 
necessary, such modifications shall be submitted to the 
Secretary.
    The State plan shall continue to include:
          (1) A description of the State board;
          (2) The requirements for the State workforce 
        investment system;
          (3) A description of the State accountability system;
          (4) Information on the current employment needs 
        within the state by occupation, the skills necessary to 
        obtain those jobs, the skills and economic development 
        needs of the State, and the type and availability of 
        workforce investment needs;
          (5) Designation of local areas within the State;
          (6) Identification of criteria to be used by chief 
        elected officials for local boards' membership;
          (7) The Wagner-Peyser plan;
          (8) A description of the procedures to assure 
        coordination of and avoid duplication among programs 
        under Title II of the Social Security Act, Title XIX of 
        such act, programs authorized under Title VII of the 
        Rehabilitation Act of 1972, and programs carried out by 
        State agencies relating to mental retardation and 
        developmental disabilities;
          (9) A description of the process used by the state to 
        provide an opportunity for public comment;
          (10) Information about how the State will use 
        resources to leverage other funds and maximize 
        effectiveness, including a new provision to include how 
        the State will provide incentives for improved 
        performance and technical assistance;
          (11) Assurance that the State will provide the fiscal 
        control and fund accounting procedures to ensure proper 
        disbursement of funds under this act;
          (12) A description of the methods and factors the 
        State will use in distributing funds for youth 
        activities and adult employment and training 
        activities;
          (13) Information specifying the actions that 
        constitute conflict of interest;
          (14) A description of how the State will operate an 
        effective one-stop delivery system;
          (15) A description of the appeals process;
          (16) A description of the competitive process to 
        award grants and contracts;
          (17) A description of the employment and training 
        process, rapid response activities, procedures for 
        selecting training providers, and specifically how the 
        State will meet the needs of hard to serve populations, 
        including the use for the first time of local 
        customized training and training for non-traditional 
        employment; and
          (18) A description of the State strategy for 
        providing comprehensive services to youth, particularly 
        those facing barriers to employment, for identifying 
        criteria to be used by local boards in awarding grants 
        for youth activities, describing the coordination with 
        Job Corps, and describing how the State will coordinate 
        youth activities with the newly created youth challenge 
        grants.
    To reflect the purpose of the bill, S. 1627 expands the 
provisions of the State plan to also include a description of 
the following:
          How the State will use technology to facilitate 
        access to services in remote areas;
          The State strategy for coordinating workforce 
        investment activities with economic development 
        activities;
          The State strategy for regional cooperation and 
        planning;
          The State strategy for innovative programs to meet 
        the needs of businesses, including small businesses 
        which may include incumbent workers training programs, 
        sectoral and industry cluster strategies, regional 
        skills alliances, career ladder programs, utilization 
        of effective business intermediaries, and providing 
        technical assistance;
          The State strategy for ensuring cooperation between 
        transportation providers and workforce investment 
        activities;
          How the State will assist local areas in assuring 
        physical and programmatic accessibility for individuals 
        with disabilities at one-stop centers;
          The process and methodology that will be used by the 
        State board to review statewide policies, establish in 
        consultation with local elected officials the 
        procedures and objective criteria for use by local 
        boards in assessing the effectiveness and continuous 
        improvement of one-stop centers and the one-stop 
        delivery system, and determine the costs of the 
        infrastructure of the centers and the formula for 
        allocating the refunds for such infrastructure if it is 
        in use;
          The State strategy for ensuring that activities 
        carried out under this title are placing women and men 
        in jobs, education and training that lead to comparable 
        employment; and
          The technical assistance available to one-stop 
        operators and training providers for strategies to 
        serve hard-to-serve populations and promoting placement 
        in non-traditional employment.
    The State must also describe how it will serve the 
employment and training needs of individuals with disabilities, 
consistent with Executive Order 13217, relating to community-
based alternatives for individuals with disabilities. In 
addition, the State must also coordinate Independent Living 
Services with other programs and activities under the State 
plan.
    Further, the State must describe how it will assist local 
areas in assuring physical and programmatic accessibility for 
individuals with disabilities at the one stop centers. The 
Committee suggests that the WIA Section 188 Checklist provides 
useful information to States in meeting this requirement.

Local Workforce Investment Areas

    The committee believes strongly that the reauthorization of 
the Workforce Investment Act must build upon the locally based, 
private sector led workforce investment system established in 
1998. It should in no way impede local progress, innovation, 
and partnerships forged with the private sector. The wholesale 
re-designation of local areas, including the Nation's largest 
metropolitan areas, would be tremendously disruptive to the 
entire workforce development system.
    We believe that local workforce investment areas 
established under the Workforce Investment Act of 1998 should 
be maintained based upon their fiscal integrity and performance 
established jointly with the states as defined in section 
136(c). Furthermore, local areas with a population of 500,000 
or above and local areas which have grown in population to 
500,000 or above according to the 2000 Census should be given 
the opportunity to be automatically designated by the Governor 
and given a 2-year grace period to prove their performance and 
fiscal integrity under the new Act.
    The committee also believes that Governors should have the 
flexibility to maintain their single local area state 
designations if the Governor identifies the State as a local 
area in the State plan under section 112(b)(5).
    In keeping with the committee's theme of increasing 
flexibility in the reauthorization, the Governor of a State 
does have the ability to designate the State as a single local 
area if no local area meeting automatic designation 
requirements in the bill requests such designation.
    The committee strongly believes that regional planning 
among local boards may be an effective tool in appropriately 
leveraging and targeting scarce training resources in local 
labor markets. The committee encourages those local workforce 
areas, where a common regional labor market may exist, to 
develop a coordinated regional plan to better assist workers 
and employers with their employment needs.

Local Boards

    The committee has heard concerns that the large size of 
local boards and focus on bureaucratic issues has deterred the 
engagement of local business representatives. The committee 
believes that the involvement of local businesses, including 
small businesses, is critical to an effective workforce 
development system. To increase the involvement of the business 
sector and focus the board on workforce planning and decision-
making, S. 1627 eliminates the requirement that each of the 
one-stop partners be a member of the local board. While one-
stop partner programs are no longer required local board 
members, the bill allows the local board to establish or 
continue advisory councils to assist the board. Such advisory 
council(s) could include one-stop partners. Furthermore, the 
bill retains the authority of the chief local elected official 
to appoint to the local board such other individuals or 
representatives as the chief local elected official deems 
appropriate.
    S. 1627 also provides direction on the types of 
representatives to be appointed to the local board. The 
workforce investment system must effectively tap into the 
opportunities provided by small businesses and high-growth and 
emerging industries. The committee believes that greater 
involvement of high-growth and emerging technologies and small 
businesses is needed.
    In order to keep up with the rapid rate of technological 
changes, information technology (IT) skills training is 
essential to create a more effective and productive workforce 
and remain globally competitive. A comprehensive array of IT 
services and solutions should be offered to meet the needs of 
the worker and employer. As the U.S. economy becomes more 
dynamic, the types of growing industries are changing. Many new 
jobs are in technology-based industries and service industries 
and the demand for IT-skilled workers is increasing.
    To ensure that business representatives reflect a cross-
section of businesses and the changing economy in the area, S. 
1627 requires that the local board include representatives of 
high-growth and emerging technologies in the local area, as 
well as small businesses. S. 1627 also requires that board 
members represent diverse geographic areas within each local 
area.
    Current law requires that all local boards establish a 
youth council. While some local youth councils have no doubt 
been effective, other youth councils have not. Because of the 
burden of establishing and operating youth councils that are 
not consistently effective, the committee has decided to 
eliminate the requirement for establishing a youth council. 
However, the bill gives local boards the option of continuing 
or establishing a youth council. While, youth councils are no 
longer mandatory, the committee believes that the needs of out-
of-school youth must be represented at the local level. 
Therefore, if the local board opts not to have a youth council, 
the bill requires experts on serving out-of-school youth to be 
represented on the board.
    The committee believes that participants in the workforce 
investment system should be able to choose among qualified 
training providers that best meet their individual needs. To 
enhance consumer choice and integration of individuals with 
disabilities, the local workforce board must ensure that there 
are sufficient providers of intensive and training services in 
a manner that maximizes local choice, including providers with 
expertise in assisting individuals with disabilities. The 
committee believes that community providers often have creative 
and innovative approaches for addressing the needs of 
individuals with disabilities, particularly those with the most 
significant disabilities.
    The committee believes that technology can, and should, be 
used to make the one-stop delivery system more accessible. 
Therefore, S. 1627 adds as a local board function the 
development of strategies to leverage technology to facilitate 
access to services provided through the one-stop delivery 
system in remote areas.
    The committee has decided to include a limited alternative 
entity grandfathering provision. Eligibility for alternative 
entity continuation is limited to a local entity that was in 
existence on August 7, 1989 pursuant to State law.

Local Plans

    As in the State plan, the local plan is changed to a 4-year 
plan with a provision that at the end of year 2, the local 
workforce board will review and amend the plan as needed to 
reflect labor market and economic conditions.
    The plan will include:
          (1) An identification of businesses, job seekers and 
        workers in a local area, the current and projected 
        employment opportunities, and the job skills necessary 
        to obtain employment;
          (2) A description of the one-stop delivery system, 
        including a description of how the local board will 
        ensure the continuous improvement of the training 
        providers and a description of how the local board will 
        ensure within remote areas physical and programmatic 
        accessibility for individuals with disabilities at one-
        stop centers. There is no longer a requirement to 
        include a physical copy of the memorandum of 
        understanding;
          (3) A description of the local levels of performance 
        negotiated with the Governor and chief elected 
        official;
          (4) A description and assessment of the type and 
        availability of adult and dislocated worker training 
        activities;
          (5) A description of how the local board will 
        coordinate workforce investment activities carried out 
        in the local area with rapid response activities;
          (6) A description and assessment of youth activities 
        in the local area;
          (7) A description of the process used by the local 
        area to ensure adequate public comment by various 
        stakeholder groups;
          (8) An identification of the entity responsible for 
        the disbursal of grant funds;
          (9) A description of the competitive process for 
        grants and contracts;
          (10) A new requirement for a description of how the 
        local board will coordinate workforce investment 
        activities with economic development activities;
          (11) A new requirement for a description of the 
        strategies and service that will be initiated in the 
        local area to more fully engage employers, including 
        small employers, to improve workforce and economic 
        development, including such activities as incumbent 
        worker training, sectoral and industry cluster 
        programs, career ladder programs, the use of business 
        intermediaries, and other business services and 
        strategies;
          (12) A new requirement for a description of how the 
        local board will expand access to education and 
        training services and the utilization of other 
        resources;
          (13) A new requirement for a description of how the 
        local board will coordinate workforce investment 
        activities carried out in the local area with the 
        provision of transportation; and
          (14) As in current law, any other information that 
        the Governor may require.
    As in current law, the local plan submitted to the Governor 
shall be considered approved at the end of the 90-day period, 
beginning on the day the Governor receives the plan, unless the 
Governor makes a written determination during the 90-day period 
that there are deficiencies in activities or the plan does not 
comply with the title.

Establishment of One-Stop Delivery Systems

    The committee is very concerned about the ongoing 
challenges facing local areas to maintain infrastructure 
funding for the one-stops in their communities. Members 
explored a variety of options seeking to ensure long-range 
financial stability for the operations of the one-stops.
    There are significant infrastructure costs incurred in 
establishing and maintaining the approximately 1,900 one-stops 
around the country. Local boards have sought to develop 
Memoranda of Understanding (MOUs) with each participating 
partner program in order to cover some of these infrastructure 
costs. While the process has worked well in some local 
communities, in other local areas problems have arisen because 
of uncertainty in determining the amount of partner 
contributions.
    The bill provides for continued use of MOUs to establish 
partner contributions at the local level. The committee 
encourages the development of local memoranda of understanding 
so that the infrastructure funding of one-stops is accomplished 
with the cooperation and participation of one-stop programs 
partners while minimizing any disruption of program partners' 
ability to meet the service needs of their target populations.
    However, if a local area fails to successfully negotiate 
MOUs, the Governor is given the authority to require and 
determine the amount of contributions from partner programs. 
There are limitations placed on the amount non-WIA partner 
programs can be required to contribute (1.5%). In all cases, 
committee strongly believes that the contributions from non-WIA 
partners should be an amount equivalent to the cost of the 
proportionate use of the one-stop centers in the local area. 
The bill does recognize and allow for the continuation of pre-
existing agreements that exceed the cap until terminated by the 
parties.
    In States where a State government official other than the 
Governor has authority over the administration of a program, 
such as VR, the bill allows the State official to determine the 
infrastructure costs for that program, in consultation with the 
Governor.
    The bill also provides a phase-in for contributions by 
vocational rehabilitation programs administered under the 
Rehabilitation Act. Section 117 of the bill places special 
limitations on infrastructure contributions from vocational 
rehabilitation (VR) programs administered under the 
Rehabilitation Act. In cases where the Governor must determine 
infrastructure contributions, a VR program will not be required 
to provide more than .75 percent of the amount it receives in 
the second program year beginning after the date of enactment 
of the bill; more than 1 percent of the amount it receives in 
the third program year; more than 1.25 percent of the amount it 
receives in the fourth program year; and more than 1.5 percent 
of what it receives in the fifth and each succeeding program 
year. The committee believes that this provision will result in 
a fair and equitable determination of infrastructure costs for 
VR programs. In addition, the committee emphasizes that VR 
programs would be subject to the Governor's determination only 
in cases when partners in a local area cannot agree on a 
Memorandum of Understanding. In addition, the committee does 
not intend that solely referring an individual with a 
disability to the Vocational Rehabilitation Agency be 
considered ``proportionate use'' for the purposes of 
calculating infrastructure support.
    While the committee feels strongly enough about the 
importance of ensuring adequate financial support for one-stop 
development to allow Governors, working in concert with State 
workforce investment boards, to allocate for this purpose a 
percentage of program partner administrative funds, the 
effective course for achieving the same goal is likely to be 
found through the collaborative process of developing a 
Memorandum of Understanding carried out at the local level.
    The committee also believes that the concept of 
proportionate use means the same thing as the cost of 
allocation concept embedded in the Office of Management and 
Budget (OMB) Cost Principles Circulars. The Circulars establish 
the principle that Federal programs should bear an equitable 
proportion of shared costs based on the benefit received by 
each program and the benefits received by the population served 
by each program. The specific method for determining 
proportionate costs may vary, but the principle of cost 
allocation is applicable to all methods of financing one-stop 
systems under the bill.
    The committee notes that only postsecondary vocational and 
technical activities authorized under the Carl D. Perkins 
Vocational and Technical Education Act are included as a 
required one-stop partner under WIA. Therefore, S. 1627 
requires contributions to the one-stop system from only that 
portion of the administrative funds allocated to a State's 
postsecondary vocational and technical education activities 
authorized under Carl D. Perkins Vocational and Technical 
Education Act.

Continuous Improvement of One-Stop Systems

    Many stakeholders have raised concerns about the lack of 
accessibility of one-stop centers for hard-to-serve 
populations, particularly individuals with disabilities and 
individuals with limited English speaking proficiency.
    In part to address these concerns, the bill requires the 
State board, in consultation with the chief local elected 
official and local boards, to 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 systems. 
Physical and programmatic accessibility applies to all 
populations listed in the hard-to-serve population definition, 
including individuals with disabilities and individuals with 
limited English speaking proficiency.
    The committee suggests that the WIA Section 188 Checklist 
is a very useful tool to assist State boards with respect to 
assessing physical and programmatic accessibility for people 
with disabilities.

Eligible Providers of Training Services

    The committee considers the eligibility criteria and 
corresponding reporting requirements for training providers in 
current law to be major obstacles to full participation by 
would-be WIA training providers. In many areas, qualified 
training providers have refused to make large numbers, or even 
any, of their programs eligible to receive WIA training 
referrals because of the burden imposed by these requirements--
clearly an unfortunate and unintended development. The primary 
intent of the eligible training provider list is to ensure that 
WIA participants can make informed choices between training 
programs.
    The General Accounting Office (GAO) presented testimony to 
the Subcommittee on Employment, Safety, and Training on July 
18, 2003 regarding the impact of reporting requirements on the 
availability of training options for job seekers:

          Training options for job seekers may be diminishing 
        rather than improving, as training providers reduce the 
        number of course offerings they make available to WIA 
        job seekers. According to training providers, the data 
        collection burden resulting from participation in WIA 
        can be significant and may discourage them from 
        participating. For example, the requirement that 
        training providers collect outcome data on all students 
        in a class may mean calling hundreds of students to 
        obtain placement and wage information, even if there is 
        only one WIA-funded student in that class.

    The committee intends to promote consumer choice and 
provider accountability, while simplifying the process to 
increase the participation of qualified training providers. 
Eligibility requirements for the Eligible Training Provider 
List vary widely among local areas. As a result, many excellent 
training provider organizations cannot attain approval and thus 
are precluded from formal approval on the Eligible Training 
Provider List. The committee envisions more user-friendly 
protocols in order to enhance training provider access to the 
Provider List. This also would ensure that workers have access 
to a wider selection of approved training providers as well as 
greater choice of training programs.
    S. 1627 eliminates the current eligibility requirements and 
authorizes Governors to establish new criteria in their stead. 
Governors are in the best position to devise eligibility 
criteria that will ensure that quality training options are 
available to WIA participants, while not imposing unduly 
burdensome reporting requirements on training providers. For 
this reason, S. 1627 invests final discretion with the 
Governors, but lists a number of factors that the Governors 
shall take into account when devising their criteria.
    S. 1627 requires the Governor's criteria to take into 
account the performance of training providers on outcomes ``for 
those individuals receiving training services under this 
subtitle.'' Training providers repeatedly cite the requirement 
to report outcomes data for all students in an eligible 
program, regardless of the number of WIA participants in that 
program, as the most burdensome of the current requirements. 
Although S. 1627 does not prohibit Governors from requiring 
such reporting, by specifically referring to outcomes for WIA 
participants, the training providers will be statutorily 
required by WIA to report outcomes data for WIA participants 
only.
    To improve access to services in rural areas, S. 1627 
requires the Governor's criteria to take into account the need 
to ensure access to training services throughout the State. The 
committee believes that the use of industry recognized 
standards should be encouraged where practicable, but should 
not be required. The committee also determined that the ability 
to provide training services to hard-to-serve populations, 
including individuals with disabilities must be a criterion.
    S. 1627 requires Governors to take into account the 
information such providers are required to report to State 
agencies with respect to Federal and State programs, including 
partner programs, when devising eligibility criteria. The 
committee notes that, outside of WIA, most public institutions 
of higher education report substantial amounts of performance 
outcome data to the States. In such instances, the committee 
encourages governors to devise eligibility criteria derived 
from the information already reported to the State by training 
providers. This would represent a significant reduction of the 
burden placed on training providers, while still adequately 
safeguarding the interests of WIA participants.
    The committee determined that States should continue to 
publish statewide lists, and be allowed to determine exactly 
what information should be reported. The committee expects that 
such information will be closely aligned with the performance 
measures established under this Act and be relevant to the 
vitally important underpinning of informed choice established 
in WIA. The committee determined, however, that it was 
important that local workforce investment boards continue to 
have the ability to add performance criteria for training 
providers within their local areas, for use in determining 
eligibility and continued participation of such providers in 
the WIA system. However, the committee does not intend such 
additional local criteria to impede consumer choice.
    S. 1627 further retains language exempting on-the-job 
training and customized training providers from the requirement 
that they must be listed on the statewide list in order to be 
eligible to provide services under WIA. Such services and 
service arrangements are so locally negotiated that they do not 
lend themselves to such statewide requirement.
    The committee recognizes the need for a transition period 
for implementation of the new requirements. S. 1627 requires 
that the amendments to the eligible provider requirements be 
implemented not later than December 31, 2004. The committee 
encourages Governors to implement such changes prior to 
December 31, 2004. To avoid undue disruption to the system and 
facilitate early implementation, the Governor is authorized to 
establish procedures for allowing currently eligible training 
providers to continue to provide services until December 31, 
2004.
    Under current law, local areas are required to determine 
eligible providers of youth services using a competitive 
process. The committee has found that the competitive bidding 
requirement has been difficult to implement in areas with few 
providers, particularly rural providers. Therefore, the bill 
authorizes local boards to award grants or contracts on a sole-
source basis if the local board determines that there are not a 
sufficient number of providers in the local area.

Youth Activities

    The Secretary shall continue to make an allotment to 
provide services for eligible youth. For each fiscal year in 
which the amount appropriated exceeds $1 billion, the Secretary 
shall reserve 1.5 percent of such amount to provide youth 
services to Native Americans, the greater of $10 million or 4 
percent of the total for migrant and seasonal farm work youth, 
and up to $250 million for the new youth challenge grants. One-
fourth of 1 percent will be appropriated to provide assistance 
to the outlying areas, and the Secretary shall use those funds 
to award grants to Guam, American Samoa, the Commonwealth of 
the Northern Mariana Islands and the Freely Associated States 
through the Pacific Regional Educational Laboratory. The 
committee recognizes the importance of the migrant farm worker 
youth program, which serves the unique needs of this vulnerable 
youth population.
    This bill eliminates the mandatory youth councils. This 
committee recognizes the important role that Youth Councils 
have played in the design and implementation of programs geared 
to the unique needs of young people. Local areas are encouraged 
to continue successful youth councils or develop advisory 
groups on or beyond the local board to adequately meet the 
educational and occupational needs of young people.
    The committee addressed a very important issue plaguing the 
workforce investment system over the past several years--
questions over workforce system expenditures--by requiring that 
states' and local areas' total accrued expenditures must reach 
70 percent each program year, or the unspent amounts shall be 
subject to reallotment or reallocation, respectively. To ensure 
that States and localities have adequate time to plan for such 
a major change in spending requirements, the Committee 
established the effective date for such new requirements as the 
latter of PY 2004, or the program year after the date of 
enactment of the WIA Amendments of 2003. With respect to the 
definition of ``accrued expenditures'', the annuities, 
insurance claims, and other benefits are not intended to be the 
exclusive list of other amounts becoming owed under programs 
for which no current services or performance are required. 
Other long-term training obligations would also fall within 
accrued expenditures.
    Under youth activities, up to 60 percent of the funds will 
serve in-school youth, age 14-21, and not less than 40 percent 
will fund activities for out-of-school youth, age 16-21. States 
may supply information to say that the unique needs in their 
state require that they serve more in-school youth.
    Out-of-school youth are defined as 16-21 year olds who have 
dropped out of school, or who are within the compulsory age of 
school attendance but have not attended for a calendar quarter, 
or who are a low-income individual who is deficient in basic 
skills or LEP and not attending any school but has received a 
diploma, subject to the juvenile justice system, a low-income 
youth who is pregnant or parenting, a homeless, runaway, or 
foster child who is not attending school, or a low-income 
individual who requires assistance in completing an education 
program or to secure or hold a job.
    In-school youth are youth aged 14-21 who are low-income and 
deficient in basic skills or LEP, or homeless, a runaway, or a 
foster child, or pregnant or parenting, or an offender, or an 
individual who requires additional help to complete an 
education program or to secure a job. Up to 5 percent of the 
participants in each local area may be individuals who are not 
low-income with respect to the individuals for whom low-income 
is a requirement for eligibility under this section. The 
committee believes that students should be able to be served 
during school hours to provide drop out prevention counseling 
and programs, in addition to before and after school and in the 
summer.
    Statewide activities may include conducting evaluations, 
research and demonstration projects; providing incentive grants 
to local areas for regional cooperation and for exemplary 
performance providing technical assistance and capacity 
building to local areas, one stop partners, and eligible 
providers; operating a fiscal and management accountability 
information system; carrying out monitoring and oversight 
activities; providing additional assistance to local areas that 
have high concentrations of eligible; supporting the 
development of alternative programs and other activities; and 
supporting the provision of core services.
    Only 5 percent of the money can be used for administrative 
activities. The committee carefully considered the implications 
of any proposed changes to the definition of administrative 
cost. Members of the committee strongly urge the Department of 
Labor to work the States, localities, and other system 
stakeholders in consideration of any changes to the existing 
regulatory definition of administrative cost.
    The purposes remain the same as current law. Local programs 
are to provide an assessment of the academic levels, skill 
levels, and service needs of each participant, basic skills, 
occupational skills, prior work experience, employability, 
interest and aptitudes. This bill adds activities leading to 
the attainment of a secondary school diploma or its equivalent, 
and effective connections to employers in the state, in sectors 
of the local and regional labor markets that are experiencing 
high growth in employment opportunities.
    The program elements must include a priority on exposing 
youth to technology and nontraditional jobs, and may use 
techniques such as on-the-job training, or opportunities to 
acquire financial literacy skills.

Adult and Dislocated Worker Employment and Training Activities

    Witnesses at the hearing held in June before the 
Subcommittee on Employment, Safety, and Training testified 
extensively about the challenges in providing appropriate 
levels of training under the new Act. The principal problem 
identified was the DOL interpretation of the sequencing of 
services language found in the current Act.
    The committee recognizes that the number of adults and 
dislocated workers who received training in the initial year of 
full WIA implementation fell by 73 percent as compared to the 
number who received training during the final year of the Job 
Training Partnership Act (JTPA). While the number of 
individuals who received training in the second year of WIA 
increased slightly, the number was still far lower than under 
the final year of JTPA.
    The committee has concluded that the sequential eligibility 
rules have caused confusion at the state and local level, and 
delays and denials of services to those who could benefit from 
them. Further, the committee believes the sequential 
eligibility rules have sent the wrong message that intensive 
and training services should be reserved for individuals who 
truly cannot find employment on their own.
    This interpretation has often precluded the use of WIA 
training to help low-wage workers, whether between jobs or 
currently employed, advance to better jobs. The bill amends 
current law to provide that if an individual were unlikely or 
unable to obtain employment that leads to self-sufficiency or 
wages comparable to or higher than previous employment (with 
respect to unemployed individuals) through core services, and 
is in need of intensive services, the individual would be 
eligible for intensive services.
    Eligibility for training services is also changed in the 
bill to require a determination that an individual is unlikely 
or unable to obtain or retain employment that leads to self-
sufficiency wages comparable to or higher than previous 
employment through intensive services.
    To allow greater flexibility to meet State workforce needs, 
the bill allows the Governor to redistribute rapid response 
funds that are unexpended at the end of the program year.
    To avoid duplication of services and enhance coordination 
of services, the committee agreed to require the collocation of 
Wagner-Peyser employment services at the comprehensive one-stop 
centers.
    S. 1627 allows local areas to spend up to 10 percent of 
their local funding for adults and dislocated workers to serve 
incumbent workers and is in keeping with one of the key themes 
of the bill--a workforce investment system that has the 
capacity to provide a broad range of workforce development 
products and services that businesses need to remain 
competitive.
    The committee strongly believes that the system must be 
``user-friendly'' for both job seekers and employers. The 
committee recognizes that small businesses face unique 
workforce needs and challenges. The workforce investment system 
must meet the needs of small employers, as well as larger 
employers. The committee the designated of a local business 
liaison in the local to make the workforce system more ``user-
friendly'' to business and responsive to employer needs.
    Since its initial implementation, the workforce investment 
system has progressed significantly to establish relevant 
initiatives and services to meet employers' needs. Much of this 
work has occurred as a result of the private sector leadership 
on local workforce investment boards. Consequently, in 
considering changes to WIA that would make the system more 
relevant for employers, it was clear that the leadership role 
of business in the design and implementation of the workforce 
investment system should be strengthened, and that services for 
business should be significantly improved, to encourage 
employers to fully utilize the WIA system.
    S. 1627 accomplishes this by building upon and 
strengthening the roles of State and local business-led boards 
over design of the comprehensive workforce system. The bill 
requires strong linkages between State and local economic and 
workforce development efforts. It encourages the 
identification, development, and implementation of innovative 
and successful services and strategies that are designed to 
meet the needs of business, which may include: incumbent worker 
training programs; sector and industry cluster strategies; 
brokering and business intermediary strategies; career ladder 
programs; 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.
    The bill expands allowable Statewide and local employment 
and training activities to include activities that improve 
coordination between employment and training assistance and 
programs for individuals with disabilities. These include 
programs relating to mental retardation, development 
disabilities, and independent living.

Performance Accountability Measures

    Congress passed WIA to better serve our Nation's job 
seekers and employers. The committee strongly believes that 
States and localities must be held accountable for their 
performance. However, the committee is concerned that WIA's 
performance measures do not provide a complete and accurate 
assessment of how well States and localities are serving the 
needs of workers and employers. The committee is also concerned 
that the performance measures are discouraging states and 
localities from serving job seekers who face greater difficulty 
in finding employment or increasing their earnings.
    The General Accounting Office (GAO), in its June 18, 2003 
report entitled ``Exemplary One-Stops Devised Strategies to 
Strengthen Services, but Challenges Remain For Authorization,'' 
found that:

          The performance measurement system under WIA may be 
        causing some clients to be denied services and does not 
        allow for an accurate understanding of WIA's 
        effectiveness. First, the need to meet performance 
        levels may be the driving factor in deciding who 
        receives WIA-funded services at the local level. 
        Officials in all five states we visited for one study 
        told us that local areas are not registering many WIA 
        participants, largely because local staff are reluctant 
        to provide WIA-funded services to job seekers who may 
        be less likely to find employment or experience 
        earnings increases when they are placed in a job.

    After extensive deliberation over the performance measures 
in WIA, the committee determined not to include an efficiency 
measures due to concerns that such a measure may lead to 
creaming (serving only those workers who are most job-ready) 
and to a lessening of more costly services, including training, 
for individuals with the most serious barriers to employment 
(i.e., individuals with disabilities, low education and skills 
levels, limited English proficient, etc.).
    The committee also provides for the use of a regression 
model for further adjustment of performance measures to reflect 
the local economy and characteristics of population receiving 
services. Such a model ensures that local areas are not 
penalized for serving people with multiple barriers to 
employment and takes into account changes in local economic 
conditions when evaluating performance outcomes. Finally, to 
further capture the system's success in meeting the needs of 
employers, the bill encourages States to work with State 
business and industry associations, employee representatives, 
and with local boards to identify additional indicators to 
measure the performance of the workforce system in meeting the 
needs of employers in the State and local areas.
    The committee also decided to retain customer satisfaction 
and skills attainment as core indicators of performance. 
Customer satisfaction is essential in determining whether or 
not the system is meeting the needs of its customers. However, 
the committee recognizes the difficulty of measuring customer 
satisfaction in a uniform and comprehensive manner. Therefore, 
the committee determined that states and localities should not 
be subject to sanctions based on customer satisfaction. The 
committee believes that skills attainment is essential if the 
workforce investment system is to meet the skill requirements 
of American employers.
    The committee was concerned by the lack of measures to 
gauge the performance of the one-stop system as a whole. In 
order to measure the system wide performance for the one-stop 
delivery systems, the bill requires the Secretary of Labor to 
establish national goals for the adjusted levels of performance 
for system wide performance.
    The General Accounting Office (GAO), in its June 18, 2003 
report entitled ``Exemplary One-Stops Devised Strategies to 
Strengthen Services, but Challenges Remain For Authorization,'' 
observed that:

          [N]o program has a measure to track job seekers who 
        only use self-service or informational activities 
        offered through the one-stop, which may constitute a 
        large proportion of job seekers. Not knowing how many 
        job seekers use the one-stop's services limits the one-
        stop's ability to assess its impact.

    The committee carefully considered removing the exclusion 
of those receiving self-service and information activities from 
the performance measures. In response to concerns raised by 
states and localities that removing the exemption is not 
practical, the committee decided to retain the exclusion. The 
committee strongly encourages local areas to utilize technology 
(such as swipe cards) to capture information about those that 
are using the system.
    States are not currently required to report to the 
Department of Labor on the amount of WIA funds spent on 
training versus core and intensive services. As a result, 
stakeholders and taxpayers do not have access to national data 
on the amount of federal WIA funds spent on training; only 
three States included information on the share of funds spent 
on training in their 2001 WIA annual reports. In connection 
with the Committee's intent to increase access to training, the 
bill requires State annual reports to include information on 
the amount of adult and dislocated worker funds spent on core, 
intensive, and training services, respectively. The bill also 
requires the State report to include the amount and percentage 
of funds, if any, spent on business services.
    Many stakeholders have raised concerns that the current 
system of negotiating performance levels, which was intended to 
allow the adjustment of expected levels, has not worked well. 
Therefore, the bill requires that both State and local 
performance measures be adjusted using objective statistical 
methods based on characteristics of hard-to-serve populations. 
The committee also wants to ensure that the negotiation of 
performance levels between the Department of Labor and the 
States is indeed occurring. The committee also believes that 
effective negotiation between the Governor, the local board and 
the chief elected official is essential to effective 
performance at the local level. This negotiation and agreement 
must take place in order for states and localities to meet 
desired performance.
    When reconsidering both local areas' designation and the 
system's performance standards, the committee determined that 
it should continue to build upon the performance-base structure 
established under WIA. Members decided to base continued local 
area designation, largely upon the performance and fiscal 
integrity of local workforce investment areas. Such 
determination of whether or not a local area performed 
successfully would be determined by the same criteria used to 
determine whether or not states and local areas are sanctioned 
for poor performance under section 136 of WIA.
    In order to address concerns that good, even exceptional 
programs may have problems meeting a specific standard due to 
economic or other circumstances in a local community, the 
committee decided to allow sanctions to be imposed only when 
the State's or local area respectively, performs at less than 
80 percent of the local area's sum or cumulative adjusted level 
of performance for the core indicators of performance described 
in WIA, for two consecutive years. In other words, a state or 
local area that performs very well on average--maybe even at an 
A- or B+ cumulative average, but fails to meet a single 
measure, such as the wage increase standard for two consecutive 
years (which may be due to economic circumstances in the local 
area beyond their control), will not be sanctioned or lose 
their local area designation as long as they retain an 80 
percent cumulative average. The bill does not require 
performance of less than 80 percent on all the core indicators 
for two consecutive years in order for sanctions to be applied.
    It is the committee's intent to provide additional funds to 
the local areas exceeding their performance measures. The 
Committee also aims to encourage local areas to serve hard-to-
serve populations, coordinate employment services under the 
Wagner-Peyser Act and WIA core services, expand access to 
training, and implements innovative business and economic 
development strategies. It is the committee's intent to provide 
additional funding to local areas that do an exemplary job of 
serving hard-to serve populations or effectively coordinating 
employment services under the Wagner-Peyser Act and WIA core 
services, expanding access to training, or implementing 
innovative business and economic development strategies.

Appropriations

    While the 1998 law provided for an authorization of 
appropriations for a 5-year period, S. 1627 authorizes 
appropriations for a 6-year time period. In Section 123, the 
committee authorizes such sums as may be necessary for each of 
fiscal years 2004 through 2009 for youth activities, adult 
employment and training activities, and dislocated worker 
employment and training activities. Current law is retained and 
remains applicable as to the disbursement of these funds. For 
single local area States, the Governor could decide to do 
statewide activities with such incentive grant funds.

Job Corps

    The committee made very few changes to the 1998 law 
regarding the Jobs Corps program. The bill expands Job Corps 
eligibility for individuals who qualify for the Chafee Foster 
Care Independence Program (which relates to youth aging out of 
the foster care system), as long as these individuals meet 
other criteria under WIA.
    Current law requires that each Job Corps center establish 
an industry council responsible for such activities as 
reviewing labor market information to determine the employment 
opportunities in the local areas for Job Corps students. S. 
1627 includes new language to ensure that council members who 
are employers from outside the local area should those who are 
likely to hire a significant number of Job Corps enrollees. The 
bill also requires that industry councils within single local 
area States must include a representative of the State Board.
    S. 1627 amends significantly the performance indicators for 
Job Corps Centers by directing the Secretary to establish 
annually expected levels of performance for Centers that relate 
to each of the core indicators for youth activities, namely the 
entry into employment, education or advanced training, or 
military service, the attainment of secondary school diplomas 
or their recognized equivalents, and postsecondary 
certificates; or literacy or numeracy gains. The committee 
believes that using common performance measures for all federal 
youth programs will assist in comparing the effectiveness of 
these programs with each other.
    The committee commends Job Corps for its recent efforts to 
increase opportunities for participants to earn a high school 
diploma through the establishment of its High School Diploma 
Initiative (HSDI). The committee encourages the Department of 
Labor, in consultation with the Department of Education, to 
examine any potential barriers to Job Corps' participants 
ability to earn and receive high school diplomas.

Native American Programs

    The committee recognizes the unique relationship between 
the American Indian, Alaska Native and Native Hawaiian 
populations and the Federal government. The programs authorized 
under Section 166 of WIA are to be implemented in a manner 
consistent with the overall Federal policy toward these groups.
    The committee believes that, in order for these programs to 
be effective, the services of WIA Native American programs must 
be delivered in a way the meets the special characteristics of 
these groups and the economic circumstances of Native 
communities. The bill includes language providing for 
performance indicators and standards for such programs 
developed in consultation with the Native American Employment 
and Training Council and which are based on these special 
characteristics and circumstances.
    The WIA Native American programs are an important component 
of the full array of Federal programs provided specifically for 
Native Americans. The committee urges the Native American 
programs authorized under WIA to work closely with other 
services provided for Native Americans. The committee 
recognizes that many tribes and off-reservation organizations 
have long provided workforce and other services within their 
own communities.

Migrant and Seasonal Farmworker Programs

    The committee has retained authorization of the Migrant and 
Seasonal Farmworker Program. While the committee encourages 
one-stops to improve services to migrant and seasonal farm 
workers, the committee recognizes the unique needs of this 
population which necessitate retention of this program. S. 1627 
adds a specific reference to the provision of permanent housing 
as an authorized activity.

Youth Challenge Grants

    Not less than 80 percent of the funds over $1 billion that 
are reserved by the Secretary shall be used to fund competitive 
Youth Challenge Grants; up to 20 percent of the money shall be 
used to fund discretionary youth programs.
    A State or consortium of States, a local board or 
consortium of boards, an eligible Native American program, or a 
public or private entity with expertise in the provision of 
youth activities apply with a local board or consortium of 
boards may apply for the competitive grants.
    The eligible entities shall apply to the Secretary and 
include a description of the activities and the collaboration 
with state and local workforce investment systems, a 
description of the programs of demonstrated effectiveness, a 
description of the State, local and private resources that will 
be leveraged by the grant funds, the levels of performance the 
eligible entity expects to achieve, an assurance that the State 
board will endorse these activities, and any other information 
that the Secretary shall require.
    In awarding grants under this program, the Secretary shall 
make 2-year grants that may be renewed for an additional 3 
years if successful, that take into account the quality of the 
proposed activities, the goals of the project, the extent to 
which the proposed activities are based on proven strategies, 
the extent of collaboration with the State and local workforce 
investment systems, the extent of employer involvement, whether 
there are other federal funds available for such activities, 
and the quality of the proposed activities in meeting the needs 
of the youth to be served. The Secretary shall make sure that 
there is equitable distribution in awarding the grants.
    An eligible entity that is awarded a grant shall use the 
grant funds to carry out activities that are designed to assist 
youth, 14-21, in acquiring the skill, credentials, and 
employment experience that are necessary to succeed in the 
labor market. Activities may include training and internships 
for our-of-school youth, dropout prevention activities, 
activities designed to assist special youth populations, 
activities that include work experience, paid internships, and 
entrepreneurial training in areas where there is a migration of 
youth out of the area.
    Grantees shall provide a match of no less than 10 percent 
that the Secretary may require as cash or in-kind non-federal 
resource.
    The Secretary shall reserve up to 3 percent of the funds 
for technical assistance and evaluation of program outcomes.
    In the establishment of the National Youth Challenge Grants 
program, Members of the Committee urge the Secretary of Labor 
to give consideration for the continued funding of successful 
Youth Opportunity Grant programs. The Youth Opportunity Grants 
represented a billion dollar investment to increase the long-
term employment of youth between the ages of 14 and 21 living 
in 36 high-poverty urban, rural, and Native American sites. To 
achieve this goal, the Youth Opportunity Grants concentrated 
resolves in these areas to bring about community-wide impacts 
on employment rates, high school completion rates and college 
enrollment rates. Its successor, the Youth Challenge Grants, 
should draw on the lessons learned through this billion dollar 
investment and give priority in the award of Youth Challenge 
Grants to successfully performing Youth Opportunity Grants. 
Such an approach will ensure the continuation of Youth 
Opportunity Grant sites already improving the local employment 
rates for at risk youth, and avoid the unnecessary waste of 
limited youth funding by eliminating the need for the 
substantial start up costs that other new Youth Challenge 
Grants will require.
    The Secretary's discretionary grants shall be made to a 
public or private entity, ensuring an equitable geographic 
distribution, to provide eligible youth, age 14-21, in 
economically distressed communities, to complete school and 
gain the skills necessary to qualify for employment. The 
Secretary will determine at least a 10-percent match, and may 
require an evaluation of all funded projects. The committee 
recognizes that rural areas are often disadvantaged in a 
competitive grant process. Therefore, the bill directs the 
Secretary to ensure an equitable distribution to rural areas in 
awarding discretionary grants.

Technical Assistance

    The committee recognizes the importance of guidance and 
technical assistance the Department of Labor provides to State 
and local boards around the country. The committee strongly 
encourages the Department to ensure adequate technical 
assistance and guidance to State and local areas in 
implementing the amendments to WIA. The General Accounting 
Office (GAO) has issued a series of reports recognizing the 
critical need for adequate levels of technical assistance.
    The committee recognizes that a number of States and 
localities have been able to effectively implement that Act 
because of strong leadership exhibited by elected officials, 
the private sector, labor and other workforce stakeholders at 
the State and local levels.
    The committee believes the best practices established by 
various State and local workforce boards can provide invaluable 
help to those areas still struggling to effectively fully 
implement the Act. The committee bill directs the Secretary of 
Labor to develop a system to help States and localities share 
information regarding their best practices with their 
counterparts from other States, regions and localities around 
the country.
    Due to the additional complications of implementing the 
amendments to WIA, the committee strongly urges the Department 
of Labor to carefully consider the implications of reducing 
regional Employment and Training Administration (ETA) offices.

Demonstrations, Pilot, Multiservice, Research, and Multistate Projects

    S. 1627 amends the provisions of section 171 of WIA 
relating to pilot, multiservice, research, and multistate 
projects to better reflect the revised purposes of the 
legislation. Projects that assist national employers in 
connecting with the workforce investment system are among the 
new list of projects authorized. The committee encourages the 
Secretary to enter into national partnerships that lead to the 
jobs providing self-sufficiency. Authorized projects also 
include: systems development to improve the maximum 
effectiveness of WIA programs, projects focused on high-growth 
industries and sectors and jobs with wages leading to self-
sufficiency, integrated systems technology projects, projects 
that provide retention grants to certain qualified job training 
programs, innovative projects that improve access to and 
delivery of workforce services, projects that promote the use 
of distance learning, and projects that provide comprehensive 
education, training and support services in coordination with 
local boards for populations in targeted high poverty areas.
    S. 1627 requires the Secretary to conduct a study 
concerning the role and benefits of industry-based 
certification and credentials to businesses and workers and the 
implications of certification to services provided through the 
system. The committee encourages, where practicable, industry-
based certification to be used with respect to the criteria for 
selecting eligible training providers. However, the committee 
does not believe that such certification should be required. 
The effectiveness of the workforce investment system is 
dependent upon the system's ability to meet business needs, 
including small businesses. Therefore, S. 1627 authorizes the 
Secretary, in coordination with the Secretary of Commerce and 
Small Business Administration, to conduct a study on the 
effectiveness of the workforce investment system in meeting 
business needs.
    The committee recognizes that science and technology-based 
industries have been and will continue to be critical to the 
economic and national security of the United States, and that 
the workforce investment system should play an essential role 
in training individuals for these industries. The committee 
recognizes that the National Science Foundation's Advanced 
Technological Education Program has established a successful 
model that can be used by the Department of Labor for a science 
and technology and homeland security national skills 
certification program. In particular, this program has 
suggested that: (1) Effective skill certification curricula can 
be developed leading to employment in high-technology 
industries; (2) strong cooperative links can be created between 
the various stakeholders in the workforce area; and (3) 
innovative care pathways can be established for individuals 
that previously lacked economic opportunity. The committee 
encourages the Secretary of Labor to fund the national skills 
certification demonstration project established under this 
section so the purposes of the project can be effectively 
attained.
    The committee recognizes that individuals of limited 
English proficiency (LEP) now form a substantial portion of the 
civilian workforce and are employed in a range of industries 
essential to the economic and national security of the United 
States. The committee recognizes that in order to serve the 
needs of these individuals and to maintain the competitive 
advantage of the United States, new approaches to workforce 
training must be identified and pursued. In particular, efforts 
must be made to develop innovative, flexible programs that: (1) 
Integrate occupational skills training with English language 
acquisition; (2) encourage cooperation between stakeholders in 
the workforce area; and (3) increase the career-ladder economic 
opportunities of workers. The committee encourages the 
Secretary of Labor to fund the integrated workforce training 
demonstration project established under this section so the 
purposes of the project can be effectively attained.

National Dislocated Worker Grants

    The National Emergency Grants will now be known as National 
Dislocated Worker Grants. These grants will continue to assist 
State and local areas respond with job training and assistance 
when to significant numbers of workers suffer from dislocation 
due to mass layoffs or plant closings. This bill adds the 
ability of the secretary to respond in partnership with the 
Department of Defense Veterans' Affairs transition assistance 
programs. When an area faces a higher than average demand for 
employment and training for dislocated members of the Armed 
Forces and their spouses it is the opinion of this committee 
that the area can apply for a National Dislocated Worker Grant.
    The committee recognizes that States may experience 
dislocations across multiple sectors or across multiple local 
workforce areas, in a manner that leads to significant overall 
reduction in employment opportunities and economic growth, 
especially in rural areas. The committee authorizes the 
Secretary to provide assistance to a State for statewide or 
local use in order to address such dislocations.
    Not more than $20 million will be used to lessen the burden 
of formulas shifts in the Disadvantaged adult formula.

Administration

    The 1998 law prohibits WIA funds from being used for 
economic development activities. The committee has removed this 
prohibition in S. 1627, as it believes it to be advantageous to 
encourage closer links between the job training system and 
economic development systems to prepare the 21st century 
workforce for career opportunities and skills in high-growth 
sectors.
    In keeping with the committee's emphasis on tracking 
performance, S. 1627 includes a new provision requiring the 
Secretary of Labor's annual report to Congress to include the 
negotiated levels of performance of the States, the requests 
for adjustments of such levels from the States, and any 
adjustments of such levels that are made.
    The bill makes clear that the Secretary cannot waive 
statutory or regulatory requirements relating to the funding of 
infrastructure costs for one-stop centers. Further, S. 1627 
instructs the Secretary to expedite waiver requests that have 
been approved for a State.
    Finally, the bill amends current law to provide that 
property purchased with Federal equity can be sold and the 
proceeds used for UI or Wagner-Peyser.

Incentive Grants to States

    It is the committee's intent to provide additional funds to 
those States exceeding their performance measures for WIA, 
Adult Education, and vocational education. Beginning on July 1, 
2005, it is also the committee's intent to provide additional 
funds to those States doing an exemplary job of serving hard-
to-serve populations and those that are effectively 
coordinating employment services under the Wagner-Peyser Act 
and WIA core services, expanding access to training, or 
implementing innovative business and economic development 
strategies. Incentive grants awarded to States are to be used 
to carry out activities authorized under chapter 4 and 5 of 
WIA, Adult Education, and Carl D. Perkins Vocational and 
Technical Education Act, including demonstration projects and 
innovative programs for serving hard-to-serve populations.

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


Purpose

    The committee believes that attention to the nation's 
growing immigrant population is appropriately included in the 
purposes of this Act. The Amendments to the Adult and Family 
Literacy Act include a new paragraph specifying the need for 
adult education and literacy programs to give attention to 
immigrant and limited English proficiency populations, 
including a focus on American civics and history, in addition 
to reading, writing, speaking, and mathematics skills.
    Additionally, the committee has added assisting adults in 
the transition to postsecondary education to the Act's stated 
purposes. In a 2001 survey by the GED Testing Service, over 65% 
of the GED examinees indicated that they were obtaining the 
credential in order to pursue further education, and yet 
research shows that only about one-third of GED holders obtain 
any postsecondary education. The committee recognizes that 
adult education and literacy programs are poised to provide the 
support, tools, and motivation to help pave the way for adults 
to complete a secondary school education and continue on to 
postsecondary education.

Performance Accountability System

    The committee believes that eligible agencies should take 
appropriate steps to measure the impact of their services in 
adult education and literacy. In order to reach this objective, 
it is important to strengthen the current accountability 
provisions. Thus, new employment performance indicators are 
established for States, including entry into employment, 
retention in unsubsidized employment, and career advancement. 
Eligible agencies are also required to include in their State 
plans a description of how they will annually evaluate and 
measure their effectiveness on a grant-by-grant basis, and how 
they will hold eligible providers accountable regarding their 
progress in improving academic achievement and the core 
indicators of performance. Eligible agencies are authorized to 
use technical assistance, allocate grant funds based on 
performance, and terminate grant funds based on performance, in 
order to hold adult education providers accountable. The 
committee also believes it is important for programs that are 
not meeting performance indicators to work with the Secretary 
to develop and implement plans for improving outcomes. Further 
revisions of a State plan may be required as an eligible agency 
develops a plan to improve outcomes.
    The committee also believes it is important to treat 
workplace literacy programs in a way that is consistent with 
their unique design. Workplace literacy programs address 
specific reading, writing and math skills in the context of 
work and are likely to be of shorter duration and have more 
specific, customized goals than other types of adult education 
programs. Adult educators work with employers to develop a 
curriculum that integrates basic skills instruction based on 
job-specific needs. Math instruction for manufacturing 
employees, for example, may include lessons in reading and 
interpreting statistical processing control charts, while 
reading and writing instruction may incorporate technical 
manuals and reporting forms that are used on the job. Student 
assessments must often be customized as well because learning 
gains made in using job-related materials may be only partially 
reflected in a standardized test that evaluates general 
literacy skills. Employers may also wish to use indicators of 
workplace productivity, such as error or accident rates, to 
evaluate the effectiveness of instruction in improving the 
performance of their employees. For these reasons, S. 1627 
gives the Secretary the authority to work with individual 
States, on a voluntary basis, to agree upon alternative 
approaches to measuring the learning gains of adults who 
participate in workplace literacy programs.
    The committee recognizes that not all States have access to 
unemployment insurance wage data, and that those States with 
such access are better equipped to accurately comply with the 
Act's requirements regarding certain employment performance 
indicators. For that reason, the report made available to the 
Secretary by each State's eligible agency should reflect the 
State's status with respect to that issue.

Workplace Literacy Performance Measures

    Workplace literacy programs address specific reading, 
writing and math skills in the context of work and are likely 
to be of shorter duration and have more specific, customized 
goals than other types of adult education programs. Adult 
educators work with employers to develop a curriculum that 
integrates basic skills instruction based on job-specific 
needs. Math instruction for manufacturing employees, for 
example, may include lessions in reading and interpreting 
statistical processing control charts, while reading and 
writing instruction may incorporate technical manuals and 
reporting forms that are used on the job. Student assessments 
must often be customized as well because learning gains made in 
using job-related materials may be only partially reflected in 
a standardized test that evaluates general literacy skills. 
Employers may also wish to use indicators of workplace 
productivity to evaluate the effectiveness of instruction in 
improving the performance of their employees. For these 
reasons, S. 1627 gives the Secretary the authority to work with 
individual States, on a voluntary basis, to agree upon 
alternative approaches to measuring the learning gains of 
adults who participate in workplace literacy programs.
    Facilitating training sessions in a simulated work 
environment is an innovative and very effective way to bring 
about the best possible outcomes in a short period of time. The 
opportunity for students to perform specific writing tasks, 
tracking & logging different types of data, and various other 
simulated work activities in an environment that looks, feels, 
and functions like the real thing is invaluable. When actual 
workplace forms, documentation, and materials are used and 
standard workplace procedures followed, the experience for 
students is extremely relevant and completely authentic.

State Plan

    The committee believes it is important to align the 
Workforce Investment programs with the Adult Education and 
Family Literacy programs. S. 1627 would replace the current 
five year State plan with four year plans in both the workforce 
and adult education portions of the bill.
    Recognizing that collaboration between services is 
essential, S. 1627 revises the requirements of the State plans 
to emphasize greater collaboration between adult education 
programs and other federal, State or local efforts, including 
those authorized under Title I, to reach the same eligible 
population. The State must also demonstrate in its State plan 
how it will hold eligible providers accountable for improving 
the academic achievement of eligible participants in adult 
education programs according to the core indicators of 
performance and the requirements of the performance 
accountability system section. Underscoring the need to provide 
services to an ever-growing adult population, the State must 
also focus on building the capacity of organizations that 
provide adult education and literacy activities.
    The committee is interested in ensuring that States make 
the necessary effort to include professional development in 
their plans in order to improve teacher quality, as well as 
coordinate with the appropriate federal, State and local 
support services to permit the greatest number of eligible 
participants to receive adult education and literacy training. 
Support services, such as child care, transportation, mental 
health services, and case management, help adult learners get 
the assistance they need so they can focus on, and successfully 
complete, their studies. These coordination efforts should take 
into account the needs of individuals with disabilities, 
limited English proficiency or other special needs.

Programs for Corrections Education

    The committee continues to support the provision of adult 
literacy activities in correctional institutions and for other 
institutionalized individuals. The provision of literacy skills 
instruction, instruction in the English language, special 
education instruction and secondary school credit programs 
assist offenders as they begin the difficult task of re-entry 
after serving their time. The committee continues the priority 
for those individuals who are within 5 years of completing 
their sentences.

Maintenance of Effort

    This section upholds the committee's strong belief that 
adult literacy activities are a partnership between the State 
and Federal Government to maintain funding to address the 
growing needs of young and working adults in this country to 
improve their literacy skills in order to support themselves 
and their families.
    Federal funding for adult education and family literacy 
activities historically has been provided to establish Federal 
and State partnershipsto provide adult education and literacy 
services. It has been recognized that State and local 
governments should and would contribute funding that responds 
to their adult learning needs and supplements the base 
operating funds provided by the Congress.
    The Maintenance of Effort provisions in Section 251(b) hold 
the States responsible for maintaining that commitment at not 
less than a 90 percent rate and limit the erosion of State and 
local funds that would cause instability in program services.
    To that end, the technical language amendments to section 
241 are not to be interpreted to mean that State maintenance of 
effort requirements should be reduced in any way.

Integrated English Literacy and Civics Education

    The committee recognizes the need for integrated English 
literacy and civics education programs to help States and 
communities provide limited English proficient adults with 
expanded access to high quality English literacy programs 
linked to civics education. In recent years, appropriations 
legislation has mandated that a certain amount of the State 
adult education grants under the Act be provided according to 
the formula contained in section 218. The committee feels that 
this is a worthwhile funding mechanism for serving a key 
population of adults, and for that reason has included this 
mechanism in S. 1627.
    The committee notes that the formula is based on data that 
had previously been maintained by the Immigration and 
Naturalization Services (INS). The Homeland Security Act of 
2002 (P.L. 107-296) consolidated the INS into the Department of 
Homeland Security and redesignated the Immigration and 
Naturalization Service as the United States Citizenship and 
Immigration Services (USCIS). The committee expects that the 
redesignation will not interrupt the availability of the 
appropriate data.

Numeracy

    The committee feels that mathematical skill, or 
``numeracy,'' is a key element of adult basic skills. It is 
vitally important that adults completing adult education 
programs funded under this act be able to effectively manage 
the mathematical demands of the workplace, the family and 
society generally.

Adult Learners With Learning Disabilities

    The committee, through provisions such as those in the 
State Leadership Activities, State Plan, and Grants and 
Contracts for Eligible Providers sections of the Act, has 
placed an emphasis on serving adult education students with 
learning disabilities. Individuals with learning disabilities 
make up a large proportion of the population in need of adult 
education and literacy programs, and yet their disability often 
goes undiagnosed or there are no services available that are 
tailored to their specific needs. As such, the committee adds 
these provisions in order to ensure the evaluation of adult 
students for learning disabilities and the development of 
programs to meet the needs of such students.

                TITLE IV--REHABILITATION ACT AMENDMENTS


Introduction

    The major goals of the Rehabilitation Act Amendments of 
2003 provisions are to: strengthen individual choice and 
transition planning for individuals with disabilities; create a 
stronger link between the Rehabilitation Act, the President's 
New Freedom Initiative and the Olmstead Executive Order (13217: 
Community-Based Alternatives for Individuals with 
Disabilities); increase the opportunity to expand Vocational 
Rehabilitation partnerships with business/employers; and 
improve coordination with other employment programs such as the 
Workforce Investment Act and the Ticket to Work Act.
    The intent of the reauthorization is to create a seamless 
Federal job training system. Title I of the Workforce 
Investment Act (WIA) dramatically reforms the nation's job 
training system in an attempt to better serve more people. 
Although the Rehabilitation Act is a disability program, its 
central function is to provide job training and employment 
supports for persons with disabilities. To properly develop a 
comprehensive national job training system, this program must 
be synchronized with the amended programs under WIA. Therefore, 
the committee desires to facilitate that goal by aligning the 
two systems. The Rehabilitation Act includes extensive links 
between State vocational rehabilitation agencies and State 
workforce systems. Amendments fostering alignment are found 
throughout the bill in sections pertaining to the findings and 
purposes of the legislation, definitions, program 
administration, reports, information dissemination, and State 
plan requirements, including data reporting. WIA also includes 
complementary and parallel provisions to promote a link between 
vocational rehabilitation agencies and State workforce systems. 
The committee strongly intends that this partnership not 
violate the integrity of the vocational rehabilitation system.
    The committee desires to build a stronger connection 
between the Rehabilitation Act, the President's New Freedom 
Initiative and the Olmstead Executive Order (13217: Community-
Based Alternatives for Individuals with Disabilities). A major 
objective of both the New Freedom Initiative and the Olmstead 
Executive Order is to ensure that all Americans have the 
opportunity to engage in productive employment, to live close 
to their families and friends, to live more independently, and 
to participate in community life. The Rehabilitation Act 
supports this laudable objective and promotes the full 
participation of people with disabilities in all areas of 
society by increasing access to assistive technologies, 
expanding employment services and opportunities, and promoting 
increased access into daily community life.
    The committee also believes that it is critical to 
coordinate the activities and objectives of the Rehabilitation 
Act with the Ticket to Work Act and the Individuals with 
Disabilities Education Act. State vocational rehabilitation 
agencies should proactively provide information to Social 
Security Title II and Title XVI disability beneficiaries who 
may or may not be eligible for the Ticket to Work program. This 
should include information on the availability of other 
federally funded employment and health services and information 
and referral services for individuals that are not eligible for 
vocational rehabilitation services due to an order of 
selection. The committee also intends to increase exposure to 
career options and vocational exploration for students with 
disabilities in high school in order to facilitate the 
student's transition to the vocational rehabilitation program. 
Additionally, S. 1627 requires transition planning for each 
student in order to link the individualized education plan 
(IEP) with the individualized plan for employment (IPE) to 
ensure that the IPE integrates planning, information, and 
assessments from the IEP for students age 14 or younger.
    During the reauthorization process, the committee conducted 
panel discussions on the reauthorization with stakeholders and 
engaged in an open and lengthy negotiation process that 
included vocational rehabilitation consumers, consumer 
advocates, the U.S. Department of Education, and State 
vocational rehabilitation agencies representatives.
    Through those processes, the committee learned that it 
needs to simplify the delivery of vocational rehabilitation 
services and increase the ability of State vocational 
rehabilitation agencies and job training agencies to work 
together to reach and assist individuals with disabilities. In 
this reauthorization, the committee creates new opportunities 
and expands existing ones to improve employment options for 
individuals with disabilities. S. 1627 includes a requirement 
that vocational rehabilitation agencies provide a list of 
community resources for vocational rehabilitation consumers, 
including community organizations or individuals with 
disabilities that may be able to assist the individual in 
creating an individualized plan for employment (IPE). The 
committee strongly encourages agencies to allow individuals to 
develop their own IPEs and have the opportunity to work with an 
individual of their choice who has experience in developing 
such a plan. This enhances the consumers' ability to make 
informed, independent, and effective choices.
    The committee permanently authorizes the Administration's 
Vocational Rehabilitation Incentive Grants, encouraging 
vocational rehabilitation agencies to adopt effective 
strategies to improve employment outcomes for individuals with 
disabilities under the vocational rehabilitation program. 
Finally, S. 1627 strengthens the Commissioner's authority to 
direct States to make revisions to their State plan to improve 
performance, which may include allocating a higher proportion 
of resources to services to individuals with disabilities.

Provisions Preceding Title I

Purposes and Definitions

    The bill adds an additional purpose of the Rehabilitation 
Act: to give employers and rehabilitation service providers the 
opportunity to provide meaningful input at all levels of 
government to ensure successful employment of individuals with 
disabilities. The committee wants to ensure that business and 
employment providers play a critical role in helping 
individuals with disabilities obtain successful employment 
outcomes.
    The committee added and revised a number of definitions in 
the Rehabilitation Act. S. 1627 adds the term ``literary 
services'' to the list of specifically authorized vocational 
rehabilitation services for individuals to ensure that 
individuals with significant disabilities have the necessary 
literacy skills to achieve high-quality, competitive employment 
outcomes. The committee used the same definition of 
``literacy'' as used in the Adult Education and Family Literacy 
Act for the sake of consistency across Federal programs. The 
bill also adds a definition of ``consumer organization'' to 
help facilitate access to individuals and organizations that 
can assist consumers in making fully informed and effective 
choices in developing their individual plan for employment. The 
committee has also expanded the definition of ``independent 
living core services'' to include maintaining individuals with 
significant disabilities or transitioning individuals with 
significant disabilities to community-based living. This change 
is intended to help carry-out the goals and objectives of the 
President's New Freedom Initiative and the Olmstead Executive 
Order.
    The committee has included the term ``post-employment 
services,'' intending to make vocational rehabilitation 
services readily available to consumers who have already 
achieved an employment outcome. This provision authorizes 
programs and additional services necessary for an individual to 
retain his or her job or advance in his or her career.
    Finally, the term ``student with a disability'' means an 
individual with a disability who attends elementary or 
secondary school and who: (1) Is between the ages of 14 and 21; 
(2) is eligible for VR services; and (3) receives special 
education under IDEA or is considered an individual with a 
disability under section 504. The definition is consistent with 
the definition in Title II of S. 1248 ``Individuals With 
Disabilities Education Improvement Act of 2003.''
    The committee notes that the Commissioner of the 
Rehabilitation Services Administration has been appointed by 
the President to administer programs under the Rehabilitation 
Act and concurrently has been appointed to represent the 
Department of Education on the Committee for Purchase From 
People Who Are Blind or Severely Disabled, which administers 
the Javits-Wagner-O'Day (JWOD) Program. The committee 
recognizes confusion among designated State units under Title I 
of the Rehabilitation Act in implementing a regulation issued 
in 2001 which narrowed the definition of ``employment outcome'' 
to exclude placements in what RSA defined as ``non-integrated 
settings.'' The committee recommends that the RSA Commissioner 
review and clarify policies to include consideration of wages 
(when above minimum-wage), benefits and opportunities for 
upward mobility as well as the number of other individuals with 
disabilities in a workplace when approving a client's choice of 
employment outcome goal under a proposed Individual Plan for 
Employment.

Administration

    As stated earlier, the committee recognizes the importance 
of including local businesses as key players in the vocational 
rehabilitation system. In order to create additional employment 
opportunities for consumers of vocational rehabilitation 
services it is imperative that the business community be viewed 
as partners in the system. It is the business community that 
can bring success to the VR program by hiring individuals with 
disabilities as employees. To help accomplish this, section 405 
of the bill authorizes the RSA to provide technical assistance 
to vocational rehabilitation agencies on developing successful 
partnerships with local employers, with the intent of enhancing 
choice and employment opportunities for people with 
disabilities. The committee notes one example of a successful 
partnership developed under the Projects with Industry program 
of the Rehabilitation Act. Over 2,500 businesses are 
represented on Business Advisory Councils that assist in 
developing and directing placement programs across the country. 
The committee encourages the RSA to continue to be innovative 
in building partnerships with business and to use readily 
available resources, such as the Business Advisory Councils, 
for support and guidance while developing technical assistance 
to vocational rehabilitation agencies.

Carry Over

    Section 406 eliminates the carry over funds provision for 
centers for independent living and for independent living 
services for the older blind. The bill also adds a new separate 
provision relating to unobligated and expended funds for the 
Protection and Advocacy for Individual Rights (PAIR) program 
similar to use of unobligated and unexpended funds for other 
programs. Finally, section 406 authorizes the PAIR program to 
carry over appropriated funds for 1 year and program income 
until expended. The committee intends to give PAIR programs the 
ability to plan activities and have greater flexibility when 
using dollars paid to a PAIR program for a fiscal year that 
remain unobligated at the end of such year.

              TITLE I--VOCATIONAL REHABILITATION SERVICES


             Subtitle A--Vocational Rehabilitation Services


                AMENDMENTS TO PART A--GENERAL PROVISIONS

Declaration of Policy; Authorization of Appropriations

    Section 1627 authorizes appropriations for the 
Rehabilitation Act Amendments of 2003 for six years, from 
fiscal years 2004 through 2009.

State Plans

    Section 412 of S. 1627 amends the State plan requirements 
to encourage the recruitment of qualified people with 
disabilities as VR counselors and other VR personnel. The 
committee believes that people with disabilities are uniquely 
qualified to provide assistance and guidance to consumers of 
vocational rehabilitation services. The bill also requires that 
continuing education for rehabilitation personnel coordinate 
with State programs carried out under the Assistive Technology 
Act.
    Additionally, State plan requirements are changed by 
including training implemented in coordination with State 
programs carried out under section 101 of the Assistive 
Technology Act of 1998.
    The committee recognizes that a number of policy issues 
arise as State vocational rehabilitation agencies implement the 
Ticket to Work and Self-Sufficiency Program, authorized under 
title I of the Ticket to Work and Work Incentives Improvement 
Act of 1999. Of particular concern is the impact of the Ticket 
to Work program on the requirement that vocational 
rehabilitation agencies determine whether comparable services 
and benefits exist under any other programs, and whether those 
services and benefits are available to the individuals seeking 
services from the vocational rehabilitation agency. This is 
currently required prior to the agency's agreeing to vocational 
rehabilitation services to the eligible individual. Under the 
Ticket to Work program, a private provider may be approved by 
the Social Security Administration (SSA) to function as an 
Employment Network (EN). The EN receives payments from SSA when 
the services provided to a beneficiary, whose ticket is 
assigned to that EN, goes to work and meets the requirements 
for milestone and outcome payments. In Section 412, the 
committee intends to clarify that a State vocational 
rehabilitation agency is expected to consider, as a comparable 
service or benefit, those services actually provided to a 
beneficiary under the individualized work plan (IWP) developed 
by the beneficiary and the EN to which the beneficiary's ticket 
is assigned. The committee also intends to clarify any 
misconception that all services and benefits listed on an EN's 
application to SSA may be considered as comparable services and 
benefits. The committee recognizes that State vocational 
rehabilitation agencies may experience difficulty in 
identifying the services and benefits that a particular 
beneficiary is receiving from an EN because of privacy rules. 
Notwithstanding these confidentiality concerns, the committee 
intends that, when a beneficiary is seeking assistance from 
both an EN and a vocational rehabilitation agency, the 
information on the EN, the services, and benefits being 
provided under the beneficiary's IWP, be made available to the 
vocational rehabilitation agency for the purposes of 
identifying comparable services and benefits.
    In section 412, the committee has streamlined the 
administration of the State vocational rehabilitation program 
by conforming the data reporting requirements of the 
Rehabilitation Act with the federal job training system in 
Title I of S. 1627. The specific data reporting requirements 
include: the cord indicators of performance; the number of 
individuals with significant disabilities who exited the 
program carried out under this title, including the number of 
such individuals who achieved employment outcomes after 
receiving vocational rehabilitation services; and the number of 
individuals who received vocational rehabilitation services who 
entered and retained employment and the increases in earnings 
of such individuals.
    The committee expects State vocational rehabilitation 
programs to also include descriptions of interagency 
cooperation as a requirement in their State plan with State 
programs carried out under section 101 of the Assistive 
Technology Act of 1998.
    The committee intends to coordinate the activities and 
objectives of the Rehabilitation Act with the Individuals with 
Disabilities Education Act. To this end, Section 412 requires 
transition planning for each student in order to align the 
individualized plan for employment (IPE) with the 
individualized education plan (IEP) to ensure that the IPE 
integrates planning, information and assessments from the IEP 
process for students age 14 or older.
    The committee desires to increase coordination between the 
various employment training programs for people with 
disabilities, and sees the need for a stronger relationship 
between the vocational rehabilitation system and the Ticket to 
Work Act. Therefore, section 412 requires the State vocational 
rehabilitation agency to coordinate its activities with the 
State agency that administers the Ticket to Work and Self-
Sufficiency Program. The State plan must also include 
descriptions of interagency cooperation with other agencies 
that carry out other programs, such as the Assistive Technology 
Act.
    Section 412 of the bill also authorizes State vocational 
rehabilitation agencies to establish an expanded program of 
information and referral services for States with restrictive 
orders of selection. In addition, the bill authorizes a program 
of information and referral for Social Security disability 
beneficiaries eligible for the ticket to work program but who 
may not meet the eligibility criteria of the State vocational 
rehabilitation agency. This program will provide important 
information on the Benefits Planning, Assistance, and Outreach 
Program authorized under Section 1149(d) of the Social Security 
Act, the Protection and Advocacy for Beneficiaries of Social 
Security program authorized under Section 1150 of the Social 
Security Act, Medicaid, Medicare, and other federally-funded 
medical assistance programs. The committee encourages a 
reciprocal exchange of information by Employment Networks, 
Medicaid and Medicare agencies, as well as Social Security 
District Offices, to inform consumers about the vocational 
rehabilitation system if such services would benefit that 
person.
    The committee also encourages State agencies to keep in 
mind the new definition of ``post-employment services'' as they 
conduct information and referral services, so that consumers 
may receive these services as they advance in employment.
    The committee recognizes the administrative burden and cost 
to State vocational rehabilitation agencies to maintain a 
specific point of contact for referrals made. Of critical 
importance to the consumer, however, is access to up-to-date 
and accurate information as they attempt to navigate the often 
unfamiliar employment training process offered by recommended 
agency or organization. Therefore, section 412 revises the 
point of contact requirement so that the vocational 
rehabilitation agency will provide point of contact information 
to the maximum extent possible. It is not the intent of the 
committee, however, for vocational rehabilitation agencies to 
stop collecting and providing this information.

Eligibility and Individualized Plan for Employment

    The committee believes that it is the responsibility of the 
vocational rehabilitation counselor to inform an eligible 
individual about available options, including consumer 
organizations, to assist in developing the individualized plan 
for employment (IPE) and for exercising informed choice, as 
well as making sure the individual understands these options. 
Based on the needs or expressed interests of the individual, 
the committee authorizes the State vocational rehabilitation 
agency to make available any information it routinely collects, 
requests, or receives from consumer organizations on the 
availability of such resources to assist the individual in 
developing the IPE. The committee realizes that it would take 
considerable time and resources for a State vocational 
rehabilitation agency to develop and maintain a list of such 
resources and organizations. Therefore, the committee is only 
requiring the State vocational rehabilitation agency provide 
such information to individuals that it serves to the extent 
that such information has been made available to the State 
vocational rehabilitation agency and is requested by the 
consumer. Additionally, the committee expects consumer 
organizations such as the State Independent Living Councils, 
Independent Living Centers, University Centers for Excellence 
in Developmental Disabilities, and grantees under subtitle C of 
this act, and other local disability related organizations, to 
submit information on such resources and organizations to the 
State vocational rehabilitation agency for dissemination to 
individuals interested in exercising the option of seeking 
outside assistance in developing their IPE.
    As previously mentioned, there are several employment 
training programs for people with disabilities, and it is the 
intent of the committee to coordinate these programs. 
Therefore, the committee includes the benefits offered through 
the Ticket to Work Act as options for individuals developing 
the individualized plan for employment.
    Section 413 also adds a new provision specifying that the 
IPE of an individual be amended, as necessary, to include post-
employment services and service providers necessary for the 
individual to maintain or regain employment, consistent with 
their strengths, resources, priorities, concerns, abilities, 
capabilities, interests, and informed choice.
    In addition, section 413 requires that mentoring services 
be a mandatory component of an IPE if they are necessary to 
achieve an employment outcome.
    The committee believes that it is both necessary and 
desirable to coordinate the activities of the Individuals with 
Disabilities Education Act with the new post-employment goal 
provision of the Rehabilitation Act. Therefore, section 413 of 
the bill clarifies that for a student with a disability, the 
description of the specific employment outcome in the student's 
IPE may also be a description of the student's post-school 
goals and projected/anticipated employment outcome. 
Additionally, the committee clarifies that the IPE must 
describe the specific transition services that the student 
needs to achieve the employment outcome, including work 
experience and mentoring activities as appropriate.
    It is important to coordinate the various federal 
employment training programs for people with disabilities. 
Therefore, section 413 requires that the IPE of an individual 
who is receiving assistance under the Ticket to Work program 
must include a list of services that individual is receiving 
from an Employment Network other than the designated State 
unit.
    The committee supports informed choice for consumers of 
vocational rehabilitation services. To further this goal, 
section 413 amends the due process requirements of the law to 
acknowledge the importance of a consumer's right of informed 
choice when engaged in due process with the State vocational 
rehabilitation agency.

Vocational Rehabilitation Services

    Section 414 of the bill amends Section 103 of the 
Rehabilitation Act to add literacy services and mentoring 
services to the list of vocational rehabilitation services 
provided under the act.

State Rehabilitation Council

    The committee recognizes that several States do not have an 
American Indian Vocational Rehabilitation Services (AIVRS) 
representative on the State rehabilitation council because the 
projects serving American Indians in those States are not 
physically located in that particular State. AIVRS projects are 
currently authorized to serve Native American/American Indian 
consumers that reside in other States. The committee addresses 
this issue in Section 415 of the bill by modifying language in 
Section 121 of the Rehabilitation Act. Under this new 
provision, in a State in which one or more AIVRS projects 
provide services under section 121, and the project does not 
physically reside in the State where it provides the services, 
at least one representative of the directors of the projects 
must serve on the State rehabilitation council.
    Section 415 also gives the Council the authority to select 
a chairperson from among the voting membership of the Council.

Evaluation Standards and Performance Indicators

    Current statutory authority to address poor performance as 
measured by the vocational rehabilitation program's standards 
and indicators is extremely limited. The committee believes 
that additional authority is needed to ensure that poor 
performing States reach acceptable levels of performance. 
Therefore, section 416 authorizes the Commissioner to review 
the program improvement efforts of the State on a biannual 
basis and, if performance has not improved to acceptable 
levels, direct the State as necessary to make further revisions 
to the plan to improve performance, including allocating 
additional resources to services for individuals with 
disabilities.

     AMENDMENTS TO PART B--BASIC VOCATIONAL REHABILITATION SERVICES

State Allotments

    Each year, under current law, the appropriation for the 
vocational rehabilitation services program under Subtitle A of 
the Rehabilitation Act is automatically increased by a cost of 
living adjustment (COLA) based on the Consumer Price Index 
(CPI). While the entire appropriation for vocational 
rehabilitation programs receives an overall funding increase 
that, at a minimum, keeps pace with increases in the CPI, each 
State agency does not necessarily receive an increase that 
keeps pace with the CPI. The allocation that each vocational 
rehabilitation program receives is based on a funding formula, 
in which the State's overall population and per capita income 
determine the allocation that a State vocational rehabilitation 
program receives. The committee recognizes that in States where 
caseloads are constant or increasing, but the State is losing 
general population, the State typically does not receive a 
percentage increase in funding that equals the percentage 
increase for the amount appropriated for the entire vocational 
rehabilitation system. Additionally, the committee recognizes 
that the per capita income factors authorize significantly more 
funds, on a per capita basis, to States with lower per capita 
incomes. Yearly, States return millions of federally 
appropriated dollars to carry out vocational rehabilitation 
services program under Subtitle A to the Department of 
Education to redistribute, as they were unable to match the 
allotted funds with State dollars. The committee has addressed 
this issue in section 417 by giving States that did not receive 
a cost of living increase priority in applying for these 
returned appropriated dollars. However, committee intends that 
these States be eligible only for an amount that will give them 
an increase that equals the COLA for that particular fiscal 
year, taking into account the amount the State's initial 
allotment increase for that fiscal year. The committee does not 
intend that the reallotted funds be unavailable to States that 
did receive a COLA through the initial allotment. Rather, the 
committee intends to give the States that did not receive a 
full COLA increase a priority for applying for reallotment 
funds, and then open up the reallotment funding to all State 
vocational rehabilitation programs that can meet the necessary 
State match requirements.
    The committee understands the need to strengthen the 
American Indian Vocational Rehabilitation Services (AIVRS) 
program by improving program stability. Therefore, section 417 
authorizes a steady expansion of the AIVRS program by 
increasing the allotted amount for the programs 0.075 percent 
each year until it reaches the current maximum of 1.5 percent. 
The committee intends that RSA will not create/award new AIVRS 
programs until all existing AIVRS programs are funded at their 
required level.

Client Assistance Program

    Section 418 amends the Client Assistance Program (CAP) to 
allow the public or private agency designated by the Governor 
to operate the program to apply for CAP funding. Under current 
law, the agency that has been designated by the Governor to 
operate the CAP does not submit the application for funding. 
Additionally, under current law, the State is required to 
submit the application and is accountable to the Department of 
Education for the performance of the CAP. The committee 
believes that authorizing the designated agency to apply 
directly for CAP funding will improve and streamline the 
application process by having the entity responsible for the 
day-to-day operation of the CAP submit the application, 
including the necessary assurances, rather than the Governor, 
who is removed from the day-to-day operation of the CAP. The 
committee does not believe this change will affect the 
Department's ability to ensure program accountability.
    The committee recognizes that the American Indian 
Consortium is a protection and advocacy system as defined in 
the Development Disabilities Assistance and Bill of Rights Act 
and was established and designated by the region's tribal 
council. The American Indian Consortium currently administers 
seven protection and advocacy programs; however Native 
Americans with disabilities that reside within the Consortium 
do not have access to the services of the Client Assistance 
Program. Therefore, section 418 authorizes funding for the 
Client Assistance Program to serve this group of Native 
Americans as soon as the annual appropriation for the CAPs 
reach $13 million.
    The committee understands the importance of training and 
technical assistance and how it would benefit the Client 
Assistance Program. To this end, section 418 authorizes 
training and technical assistance for the Client Assistance 
Programs as soon as the annual appropriation for the CAP 
program reaches $14 million. The committee intends that these 
funds be coordinated with, but distinct from, the existing 
interagency contract providing training and technical 
assistance to the other protection and advocacy programs.

Incentive Grants

    Based on program data and other sources of information, it 
is apparent that there is wide variation in the performance of 
individual State vocational rehabilitation agencies. In section 
419 of S. 1627, the committee permanently authorizes the 
Administration's Vocational Rehabilitation Incentive Grants 
Program as a method to encourage State vocational 
rehabilitation agencies to improve their performance. The 
committee intends that grant funds be used primarily to 
encourage State VR agencies to adopt effective strategies to 
improve employment outcomes for individuals with disabilities 
receiving assistance under the VR program. Grants are awarded 
to State VR agencies based on their performance on the 
vocational rehabilitation performance indicators established 
under the Rehabilitation Act and other appropriate performance 
indicators as determined by the Commissioner of RSA. The 
committee also intends that the criteria for applying for funds 
be developed in collaboration with State VR agencies and other 
vocational rehabilitation stakeholders, including vocational 
rehabilitation consumers and consumer organizations. 
Additionally, the committee believes that an appropriate use of 
Incentive Grant funds includes supplementing the federal 
allotment for vocational rehabilitation services for those 
States that did not receive a full cost of living increase if 
the funds returned for reallotment are not sufficient to 
support such increases per the new reallotment priority 
established in section 417 of the bill.

 AMENDMENTS TO PART C--AMERICAN INDIAN VOCATIONAL HABILITATION SERVICES

Vocational Rehabilitation Services Grants

    In Section 420 of the bill, the committee better 
coordinates the American Indian Vocational Rehabilitation 
Services (AIVRS) program with the Vocational Rehabilitation 
State grants program by referencing vocational rehabilitation 
services that are consistent with an individual's strengths, 
resources, priorities, concerns, abilities, capabilities, 
interests, and informed choice.
    The committee is concerned with reports from the American 
Indian Vocational Rehabilitation Services (AIVRS) and the 
Consortia of Administrators for Native American Rehabilitation 
(CANAR) that tribal councils for other administering programs 
often try to utilize inappropriately vocational rehabilitation 
funding or make programmatic decisions. In response to this 
concern, section 420 protects AIVRS programs from having other 
entities make decisions concerning consumers so that all 
decisions affecting eligibility for vocational rehabilitation 
services, the nature and scope of available services, and the 
provision of these services will be made by a representative of 
the AIVRS program.
    The committee also intends to strengthen the AIVRS program 
by improving program stability. A recent evaluation of the 
AIVRS program found that program stability continues to be a 
major concern of American Indian tribes operating these 
projects. The study also noted that better outcomes and greater 
cost-effectiveness were positively related to project staff 
with more vocational rehabilitation experience and projects 
with more years of federal funding. Under current law, AIVRS 
projects must re-compete for funding every 5 years. Therefore 
Section 420 provides that AIVRS programs must be renewed for 
additional 5-year periods if the Commissioner of RSA determines 
that the grantee has demonstrated acceptable past performance, 
and submits a plan to be approved by the Commissioner that 
identifies future performance criteria, goals, and objectives.
    Finally, section 420 adds a new provision requiring the 
Secretary to give priority to paying the continuation costs of 
existing projects and authorizing the Secretary to provide for 
increases in funding for such projects as necessary.

GAO Studies

    As discussed earlier, the goal of this reauthorization is 
to coordinate all employment-training programs available for 
individuals with disabilities. The committee wishes to track 
the interplay between the Ticket to Work and Work Incentives 
Improvement Act, the Ticket to Work program and the VR program 
in Subtitle A of the WIA. To that end, section 421 provides for 
an independent review of the interaction between the Title I 
Vocational Rehabilitation Program and the Ticket to Work and 
Self Sufficiency Program, and the impact of this relationship 
on beneficiaries, community rehabilitation programs and State 
VR agencies. The bill requires the Comptroller General to issue 
a comprehensive report on these issues to enable Congress to 
determine what appropriate steps can be made to help resolve 
challenges that the two programs face as they attempt to serve 
a similar population of individuals.
    Additionally, the committee calls for a study of the 
relationship between the Title I State allotment formula and 
the ability of States to provide vocational rehabilitation 
services in accordance with State plan requirements. The bill 
requires GAO to consult with the appropriate entities, and the 
Comptroller General to issue a report on its study to enable 
Congress to determine what appropriate steps can be made to 
help resolve funding inequities between State vocational 
rehabilitation agencies.

                   Subtitle B--Research and Training


             AMENDMENTS TO TITLE II--RESEARCH AND TRAINING

National Institute on Disability and Rehabilitation Research

    In section 432, the committee modified the requirements for 
the peer grant reviewers under this subtitle so that non-
Department of Education staff are the reviewers. The committee 
recognizes that many of the national experts in the 
rehabilitation field are employed by the National Institutes of 
Health and other Federal agencies, and desires to tap the 
expertise of these individuals.

Research and Other Covered Activities

    The committee understands the budgetary restrictions faced 
by the Department of Education. Section 433 amends the law to 
require that the Department must make a site visit to a 
potential award grantee if that award is over $750,000. The 
current law amount is $500,000.

Rehabilitation Research Advisory Council

    To create additional employment options for people with 
disabilities in the vocational rehabilitation system, the 
business community must be a partner and supporter of that 
system. One way to accomplish this is to give the business 
community a role in developing research priorities. Therefore, 
section 434 requires that the Rehabilitation Research Advisory 
Council include a representative of the business community who 
has experience with the vocational rehabilitation system and 
hiring individuals with disabilities. The committee believes 
this will help ensure that research, training, and 
demonstration projects conducted under the Rehabilitation Act 
are relevant to the business world.

     Subtitle C--Professional Development and Special Projects and 
                             Demonstrations


AMENDMENTS TO TITLE III--PROFESSIONAL DEVELOPMENT AND SPECIAL PROJECTS 
                           AND DEMONSTRATIONS

Training

    Millions of Americans are affected by orthopedic 
impairments or neurological conditions, which are treated 
through the use of orthoses, or orthopedic braces, to 
straighten arms, legs or spine and prostheses, or artificial 
limbs. Without an increase in the number of orthotic and 
prothestic students, by the year 2020, only 61 percent or less 
of the population using orthoses will be served--a population 
expected to increase by 31 percent by that year. The committee 
is therefore concerned that over the last few years, RSA has 
ceased to support orthotic and prosthetic training programs and 
the committee strongly encourages the RSA to honor its 
commitment to ensuring skilled personnel are available to serve 
the rehabilitation needs of individuals living with limb loss, 
paralysis and other conditions requiring the use of artificial 
limbs or braces.
    Additionally, the committee recognizes that degree granting 
programs in rehabilitation training and mobility instruction is 
a small, specialized area that faces challenges in attracting 
potential students and attaining support from colleges and 
universities. To help meet these challenges, in section 441 the 
committee adds ``prosthetics and orthotics, rehabilitation for 
the blind, or orientation and mobility instruction'' to the 
types of academic training projects that may be supported in 
order to meet the shortage of orientation and mobility 
instructors.
    Section 441 also authorizes such sums as necessary for the 
title III of the Rehabilitation Act for fiscal years 2004 
through 2009.

Demonstrations and Training Programs

    The committee intends for this reauthorization to focus on 
training for persons with disabilities who have been 
underserved by traditional vocational rehabilitation programs. 
To address these goals, in section 442, the committee expands 
upon language in current law that authorizes model 
demonstration projects. This expansion provides the framework 
for two separate, but related, model demonstration projects. 
Both projects are of critical importance to promoting 
employment opportunities for people often excluded from current 
federally funded employment training programs. The committee 
wants to encourage the development of training programs that 
will encourage permanent employment and increased self 
sufficiency.
    The first project is intended to provide seamless a 
transition for students age 14 to 21 who have intellectual 
disabilities or mental illness. These students presently 
receive special education and related services under the 
Individual with Disabilities Education Act. Many of these 
students, however, require additional training to ensure 
successful employment outcomes. This model demonstration 
project will make available additional training, including 
important on-site job training, designed to maximize employment 
opportunities. It is the goal of this demonstration project to 
provide training programs that will promote specialized job 
skills along with the social skills necessary to effectively 
transition from secondary education on the job market.
    The second project targets development of training programs 
for individuals who are deaf and low functioning. This project 
expands upon the successful results of three small model 
demonstration projects conducted during the early 1990s. This 
population faces unique, and significant, challenges to 
employment training. The combination of deafness and low 
literacy requires the development of very specialized programs 
of instruction. Few professionals have the expertise to train 
individuals who are both deaf and low functioning or those who 
are deaf and have secondary disabilities. The committee intends 
to encourage the development of a national training program 
that utilizes the expertise of these professionals, and 
provides hands on experience and employment supports necessary 
to ensure successful employment outcomes.
    The committee authorizes $5 million for each of these 
demonstration programs in fiscal year 2004, and such sums as 
necessary in the next succeeding years.
    The committee acknowledges that lack of affordable 
assistive technology is a barrier to disabled individuals' 
maintaining and advancing in employment. In section 442, the 
committee permanently authorizes the Administration's Telework 
program, introduced as part of the New Freedom Initiative. The 
goal of this program is to increase access to assistive 
technologies by expanding educational opportunities, increasing 
the ability of individuals with disabilities to integrate into 
the workforce, and promoting increased access into daily 
community life. The committee intends that Telework program 
grantees coordinate services with entities providing services 
through the Assistive Technology Act of 1998.

Recreational Programs

    Currently, Section 305 of the Rehabilitation Act allows the 
construction of swimming pools as an authorized use of funds 
under recreational programs. The committee finds that the 
construction authorization is inconsistent with the 3-year 
funding design. Therefore, Section 444 amends the law to 
prohibit funding for construction of facilities for aquatic 
rehabilitation therapy.

                    Subtitle E--Rights and Advocacy


               AMENDMENTS TO TITLE V--RIGHTS AND ADVOCACY

Protection and Advocacy of Individual Rights

    The committee understands that in order for the Protection 
and Advocacy for Individual Rights (PAIR) program to plan for 
the future, the program must be authorized to carry over 
program income funds for five years. Therefore, section 462 
allows the PAIR program to keep program income generated from 
the grant for use until expended, making the fiscal 
administration of the PAIR program consistent with other 
protection and advocacy programs.

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


  AMENDMENTS TO TITLE VII--INDEPENDENT LIVING SERVICES AND CENTER FOR 
                           INDEPENDENT LIVING

State Plan

    Section 481 amends the State plan requirements for 
independent living services to require the State to conduct 
activities centered on maintaining and/or transitioning 
individuals with disabilities to community-based living. This 
is consistent with and will assist in carrying out the goals 
and objectives of the President's New Freedom Initiative and 
the Olmstead Executive Order.

Statewide Independent Living Council

    Section 482 of the bill clarifies that the Statewide 
Independent Living Council (SILC) shall select a chairperson 
from among the voting membership of the Council. In the 
Rehabilitation Act Amendments of 1992, Congress recognized that 
it was vital for people with disabilities to have a voice in 
the services that they receive under the Act. The name of 
``State Independent Living Advisory Councils'' was changed to 
State Independent Living Councils, giving the Councils and 
consumers more authority and responsibility. When Congress 
created SILCs, it was clear that these organizations were not 
to be a part of any State agency. Governors were given the 
power to make the appointments to the SILC. Under current law, 
a Governor's power over the SILC is confined to the appointment 
process with one exception. Section 705(b)(5)(B) of the 
Rehabilitation Act provides a protection for Governors that do 
not have veto power over State legislation. Governors that do 
not have veto power over legislation may elect the chairperson 
of the SILC. The committee has heard concerns regarding the 
interpretation of the term ``veto power over legislation.'' RSA 
has interpreted this term to mean that the Governor must 
specifically have veto power over the selection of the SILC's 
chairperson, and that this authority must be identified in 
State law in order for the SILC to be able to select its own 
chairperson. The problem with this interpretation is that it 
only allows the Council to elect its own chair when there is a 
State law giving the governor ``veto power'' over the Council's 
selection. Currently, no States have such a law. At the time 
the exception was included, at least two Governors did not have 
the ability to veto State legislation. Since 1992, however, all 
Governors have gained veto power over legislation and this 
protection is no longer needed. The committee intends to give 
the SILC the authority to select a chairperson from its 
membership. The committee does not intend to diminish a 
Governor's authority. Governors still have the authority to 
make appointments to the SILC and can remove a member, 
including the chairperson, and appoint someone else.
    The committee recognizes that several States do not have an 
American Indian Vocational Rehabilitation Services (AIVRS) 
representative on the State independent living council because 
the projects serving American Indians in those States are not 
physically located in that particular State. AIVRS projects are 
currently authorized to serve Native American/American Indian 
consumers that reside in other States. The committee addresses 
this issue in Section 482 of the bill by modifying language in 
Section 705 of the Rehabilitation Act. Under this new 
provision, in a State in which one or more AIVRS projects 
provide services under section 121, and the project does not 
physically reside in the State where it provides the services, 
at least one representative of the directors of the projects 
must serve on the State rehabilitation council.

Program Authorization

    Prior to this authorization, the State Independent Living 
Councils unanimously agreed upon a proposal to change SILCs 
allotments. The rationale for a formula change is to create a 
more equitable distribution of funds for States with smaller 
populations. The committee confirmed with several SILCs that 
they agreed upon the formula change. The SILCs understand that 
under this proposal some States will likely not receive as 
large of an increase as under the formula in current law. 
Therefore, the committee has obliged the request of the SILCs, 
and in Section 484, modifies the formula and the way in which 
allotments are disbursed to State and Territory Independent 
Living Councils.
    Section 484 also allows Centers for Independent Living to 
carryover Title VII, Part C funding for two years following the 
appropriation year. Centers for Independent Living are funded 
late in the fiscal year, which prevents them from planning, 
expending funds, and carrying over unexpended funds. The 
committee intends for this new provision to allow Centers to 
utilize their funding in a more efficient manner.

Grants to Centers for Independent Living in States in Which Federal 
        Funding Exceeds State Funding

    Section 485 of the bill requires the Commissioner to award 
grants to any eligible entity that has bean awarded a grant 
during the preceding fiscal year. The committee intends for 
this provision to provide continuity in independent living 
services and enable grantees to focus on service provision, 
instead of grant competitions, as long as the Center meets the 
standards and assurances for program performance.

Grants to Centers for Independent Living in States in Which State 
        Funding Equals or Exceeds Federal Funding

    Similar to section 485, section 486 requires the director 
of a designated State unit to award grants to any eligible 
entity that has been awarded a grant during the preceding 
fiscal year.

Standards and Assurances for Centers for Independent Living

    Section 487 adds to the standards and assurances for 
Centers for Independent Living reporting requirements centered 
on maintaining and/or transitioning individuals with 
disabilities to community-based living. This is consistent with 
and will assist in carrying out the goals and objectives of the 
President's New Freedom Initiative and the Olmstead Executive 
Order.

Independent Living Services for Older Individuals Who Are Blind

    The committee acknowledges the need for training and 
technical assistance for the staff of Independent Living 
Services for Older Individuals who are Blind programs. 
Therefore, section 489 adds a new provision requiring training 
and technical assistance to be authorized in a manner similar 
to that which is currently authorized for the Centers for 
Independent Living.

Program of Grants

    Section 490 authorizes grantees under the Independent 
Living Services for Older Individuals who are Blind programs to 
expend funds either through grants or contracts to purchase 
needed authorized services. Extending this authorization to the 
Older Blind program grantees will enable grantees to use funds 
more efficiently and potentially enhance program performance.
    The committee has also removed references to the State plan 
for independence living in Chapter 1, Subtitle G, for the 
Independent Living Services for Older Blind programs in Chapter 
2, Subtitle G. The committee recognizes that such references 
cause confusion regarding the relationship between the broad 
Chapter 1 State plan requirements and the discrete, age- and 
disability-specific components of the Chapter 2 application.
    Finally, the committee found it necessary to increase the 
minimum allotment for the Independent Living Services for Older 
Blind programs to reflect inflationary increases in the basic 
cost of administering this program.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 3, 2003.
Hon. Judd Gregg,
Chairman, Committee on Health, Education, Labor, and Pensions,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1627, the Workforce 
Investment Act Amendments of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 1627--Workforce Investment Act Amendments of 2003

    Summary: S. 1627 would make numerous changes to the 
Workforce Investment Act of 1998 (WIA), amend the Wagner-Peyser 
Act, extend the authorization for programs under the 
Rehabilitation Act of 1973 (RA), and create one new program 
under the RA. These programs, which received discretionary 
funding of $7.1 billion and mandatory funding of $2.5 billion 
for fiscal year 2003, provide a framework for adult education, 
job training, and employment service assistance. Some of the 
affected programs are permanently authorized (most of Wagner-
Peyser), but others are currently authorized through 2003, 
2004, or 2005.
    S. 1627 would extend, through 2009, the existing mandatory 
program of State grants for vocational rehabilitation services, 
which is currently authorized through 2005 (including automatic 
extensions for 2 years provided by law). By law, that program 
is assumed to be extended indefinitely in CBO's baseline, so 
its extension would add no costs relative to the baseline. CBO 
estimates that outlays for that program over the 2006-2011 
period would total about $17.1 billion.
    CBO estimates that enacting S. 1627 would increase 
discretionary authorizations by $5.3 billion in 2004, and by 
$32.5 billion over the 2004-2008 period. Assuming appropriation 
of the necessary amounts, implementing the bill would cost $0.4 
billion in 2004 and $23.0 billion over the 2004-2008 period.
    S. 1627 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Any costs incurred by State, local, or tribal governments would 
result from complying with conditions of Federal aid.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1627 is shown in the following table. 
The costs of this legislation would fall within budget function 
500 (education, employment, training, and social services).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Discretionary Spending Under Current Law:
    Estimated Authorization Level \1\..............................    4,387      840      859      879      901
    Estimated Outlays..............................................    6,717    3,339    1,660      985      888
Proposed Changes:
    Title I: Amendments to the Workforce Investment Act of 1998:
        Estimated Authorization Level \2\..........................    5,294    5,406    5,533    5,669    5,832
        Estimated Outlays..........................................      358    3,340    4,694    5,317    5,608
    Title II: Adult Education:
        Estimated Authorization Level..............................        0      605      618      631      645
        Estimated Outlays..........................................        0       30      455      585      628
    Title III: Amendments to the Wagner-Peyser Act:
        Estimated Authorization Level..............................        0      104      106      108      110
        Estimated Outlays..........................................        0       10       42       95      107
    Title IV: Amendments to the Rehabilitation Act of 1973:
        Estimated Authorization Level..............................       38      446      456      466      475
        Estimated Outlays..........................................       27      323      441      462      472
    Total Changes:
        Estimated Authorization Level..............................    5,332    6,562    6,713    6,874    7,063
        Estimated Outlays..........................................      385    3,703    5,732    6,459    6,815
Discretionary Spending Under S. 1627:
        Estimated Authorization Level..............................    9,718    7,402    7,572    7,753    7,964
        Estimated Outlays..........................................    7,102    7,042    7,291    7,445    7,703
----------------------------------------------------------------------------------------------------------------
\1\ The 2004 level includes advance appropriations of $2.5 billion for job training for the program year
  beginning July 1, 2003.
\2\ Authorization levels are for program years beginning July 1 and do not assume any advance appropriations.

Notes.--Components may not sum to totals because of rounding.
* --Less than $500,000.
The estimated costs shown above assume that ``such sums'' authorization increase each year for inflation. If,
  instead, costs were assumed to remain level over time, outlays over the 2004-2008 period would be about $1.1
  billion less. The 2005-2008 levels are permanently authorized Wagner-Peyser (Employment Services).

    Basis of estimate: This estimate assumes that S. 1627 will 
be enacted by the end of 2003, and that the necessary sums will 
be appropriated for fiscal year 2004 and each subsequent fiscal 
year. The estimated outlays reflect historical spending 
patterns for the affected programs.

Direct spending

    Grants to States for vocational rehabilitation services, 
authorized under title I of the RA, are currently authorized 
through fiscal year 2005, assuming both the automatic one-year 
extension in the RA and the automatic one-year extension under 
the General Education Provisions Act (GEPA), which provides an 
automatic extension for all programs in the Department of 
Education. S. 1627 would extend the authorization for the State 
grants through 2011, assuming the automatic extensions in law. 
Although the authorization for RA State grants expires, the 
Balanced Budget and Emergency Deficit Control Act requires that 
baseline spending projections assume extension of any mandatory 
program (created prior to 1997) with outlays in excess of $50 
million. Because S. 1627 makes no substantive changes to RA 
State grants, the bill would not affect direct spending 
relative to the CBO's baseline.
    Funding for the mandatory State grants is determined by a 
formula. It is set at the previous year's funding level 
adjusted by the year-over-year change in the consumer price 
index as of October 15 of the second preceding year. In fiscal 
year 2003, RA State grants were funded at $2.5 billion; by 2011 
State grants would cost an estimated $3.1 billion. CBO 
estimates that outlays over the 2006-2011 period would total 
about $17.1 billion.

Discretonary spending

    S. 1627 would reauthorize and amend the Workforce 
Investment Act of 1998, the Adult Education and Family Literacy 
Act, provisions of the Wagner-Peyser Act, and the 
Rehabilitation Act of 1973. The bill also would create a 
program of incentive grants under the RA. Under S. 1627, 
authorizations for these programs would be increased by $5.3 
billion in 2004, bringing the total authorized level to $9.7 
billion in that year.
    Title I: Amendments to the Workforce Investment Act. S. 
1627 would revise and reauthorize the Workforce Investment Act 
of 1998, which is currently authorized through 2003. These 
programs, which received appropriations totaling $5.2 billion 
in fiscal year 2003, would be authorized for fiscal years 2004 
through 2009. CBO estimates that authorizations under title I 
would total $5.3 billion in fiscal year 2004 and about $27.7 
billion over the 2004-2008 period.
    The bill would authorize the appropriation of such sums as 
may be necessary for youth activities, grants to provide job 
training activities to adults and dislocated workers, Job 
Corps, and other national activities such as grants to assist 
migrant and seasonal farm workers, technical assistance 
programs, demonstration and pilot programs. In addition, the 
bill specifies $57 million to be authorized for 2004 for 
training programs that serve Native Americans. Furthermore, the 
bill would authorize pilot programs aimed at using new 
technologies and aiding adults with limited proficiency in 
English language skills at $30 million and $10 million, 
respectively, for fiscal year 2004. Based on the fiscal year 
2003 appropriations for these programs (adjusted for 
inflation), or the amount stated in the bill (where 
applicable), CBO estimates that these programs would be 
authorized at $5.3 billion for fiscal year 2004 and would grow 
to $6 billion by 2009.
    Title II: Adult Education and Literacy. Title II of S. 1627 
would revise and reauthorize the Adult Education State Grant 
program and the National Institute for Literacy, both of which 
are currently authorized through 2004 by GEPA. S. 1627 would 
authorize such sums as may be necessary for programs under 
title II. CBO estimates the total funding for title II for the 
2004-2008 period would be about $2.5 billion, assuming 
adjustments for inflation, with resulting outlays of $1.7 
billion. These programs were funded at $587 million in 2003.
    Title III: Amendments to the Wagner-Peyser Act. Title III 
of S. 1627 would reauthorize labor market information functions 
which currently are authorized through 2004. S. 1627 would 
authorize such sums as may be necessary for fiscal years 2004 
through 2009. CBO estimates this authorization would amount to 
$104 million in fiscal year 2005, and $429 million over the 
2005-2008 period. Assuming the appropriation of the estimated 
authorized amounts, outlays would increase by $254 over the 
2005-2008 period.
    Title IV: Amendments to the Rehabilitation Act. S. 1627 
would extend the current ``such sums'' authorizations for 
existing discretionary grant programs under the RA as well as 
for the Helen Keller National Center. Most of these programs 
are authorized through 2004 under GEPA and would be extended 
through 2010 under this bill. There are, however, a few 
exceptions--the authorizations for the National Council on 
Disability, funded in 2003 at $3 million, and the Architectural 
and Transportation Barriers Compliance Board, funded in 2003 at 
$5 million, expired at the end of 2003, but the bill would 
extend the programs through 2009. In addition, the bill would 
create a new program of incentive grants under the RA, and 
would require the General Accounting Office (GAO) to undertake 
two studies.
    Existing RA Programs. Discretionary grant programs under 
the RA received total funding of $393 million in 2003. The 
programs are currently operating under the GEPA extension. 
Based on the 2003 appropriation levels (adjusted for 
inflation), CBO estimates discretionary grant authorization 
levels for the existing RA programs are estimated to total $407 
million in 2005 and $1.7 billion over the 2005-2008 period.
    Incentive Grants Program. The incentive grant program 
created under S. 1627 would award funds to State vocational 
rehabilitation (VR) agencies to encourage the adoption of 
effective strategies to improve employment outcomes of the 
disabled individuals provided VR services. The awards would be 
based on performance standards specified under the RA or on 
other performance measures the Secretary of Education deems are 
appropriate. The program would be authorized to receive 
appropriations of such sums as may be necessary for the 2004-
2009 period. Based on discussions with committee staff, CBO 
assesses that the program would be similar to that proposed by 
the Administration in its fiscal year 2003 budget. 
Consequently, CBO estimates the authorized program level to be 
$30 million in 2004, with annual adjustments for inflation in 
subsequent years. Assuming the appropriation of the authorized 
amounts, CBO estimates outlays would total $21 million in 2004 
and $146 million over the 2004-2008 period.
    GAO Studies and Reports. Title IV also would require the 
GAO to conduct two new studies: one would analyze how well VR 
services are being coordinated with the requirements of the 
Ticket to Work and Self-Sufficiency Program established under 
section 1148 of the Social Security Act, while the other would 
assess how the VR State grant allocation formula relates to a 
State's delivery of VR services. Based on information from GAO, 
CBO estimates that the total cost of the studies would be less 
than $500,000 over the 2004-2006 period.
    National Council on Disability. The bill would extend the 
authorization for the National Council on Disability. The 
Council is responsible for reviewing Federal law and policies 
affecting individuals with disabilities. Based on its 2003 
appropriation of $3 million, CBO estimates that reauthorization 
would amount to $3 million in 2004 and $15 million over the 5-
year period, with outlays of $14 million through 2008.
    Architectural and Transportation Barriers Compliance Board. 
Under S. 1627, the Architectural and Transportation Barriers 
Compliance Board would be reauthorized for the 2004-2009 
period. The Board develops guidelines to ensure access for 
individuals with disabilities for buildings, transportation 
vehicles, and telecommunications equipment. Based on the 2003 
funding level of $5 million, CBO estimates the reauthorization 
would total $28 million over the 2004-2008 period, and result 
in outlays of $27 million over the same time frame.
    Helen Keller National Center. S. 1627 would reauthorize the 
Helen Keller National Center over the 2004-2009 period, 
although GEPA has already established an authorization level 
for 2004. The authorization for the Helen Keller National 
Center is estimated to total $9 million in 2005 and $37 million 
over the 2005-2008 period. The resulting outlays would be $6 
million in 2005 and $34 million for 2005 through 2008.
    Intergovernmental and private-sector impact: S. 1627 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would reauthorize funding for adult 
and youth job training, literacy activities, and vocational 
rehabilitative services administered by State and local 
agencies. Along with the conditions of Federal aid, States' job 
training programs would be guaranteed minimum allotments for 
subsequent fiscal years that equal fiscal year 2003 funding, 
subject to the availability of appropriations. Any costs 
incurred by State, local, and tribal governments would result 
from complying with conditions of Federal aid, and would thus 
be voluntary.
    Estimate prepared by: Federal Spending: Workforce 
Investment Act and Wagner-Peyser: Christina Hawley Sadoti; 
Adult Education and National Institute for Literacy: Donna 
Wong; Rehabilitation Act: Deborah Kalcevic and Paul Cullinan; 
Impact on State, Local, and Tribal Governments: Sarah Puro; 
Impact on the Private Sector: Ralph Smith and Nabeel Alsalam.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. S. 1627 
does not amend any act that applies to the legislative branch.

                    VII. Regulatory Impact Statement

    The committee has determined that the bill may result in 
some additional paperwork, time, and costs to the Department of 
Labor and the Department of Education, which would be entrusted 
with implementation and enforcement of the act. It is difficult 
to estimate the volume of additional paperwork necessity by the 
bill, but the committee does not believe it will be 
significant.

                   VIII. Section-by-Section Analysis


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

    Section 1 cites the bill as the Workforce Investment Act 
Amendments of 2003.
    Section 2 sets forth the table of contents.
    Section 3 specifies that 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.

Section 101. Definitions

    Section 101 adds definitions for the following terms: 
accrued expenditures, business intermediary, hard-to-serve 
populations, integrated training program, institution of higher 
education, and self-sufficiency.
    Section 101 amends the definitions of the following terms:
    Basic skills deficient. Amends the term to include an 
individual who is unable to compute or solve problems, read, 
write, or speak English at a level necessary to function on the 
job, in the individual's family, or in society.
    Community-based organization. Amends the term to include a 
faith-based organization.
    Customized training. Amends the term to require employer to 
pay for a significant cost of the training. (Under current law, 
the employer must pay less than 50 percent.)
    Dislocated worker. Amends the term to include the spouse of 
a member of the Armed Forces on active duty for a period of 
more than 30 days who has experienced a loss of employment as a 
direct result of relocation to accommodate a permanent change 
in duty station of the member.
    Displaced homemaker. Amends the term to include the 
dependent spouse of a member of the Armed Forces on active duty 
for a period of more than 30 days whose family income is 
significantly reduced because of a deployment, a call or order 
to active duty, a permanent change of station, death or 
disability of the member or is a spouse who is unemployed or 
underemployed and is experiencing difficulty obtaining or 
upgrading employment.
    Low-income individual. Amends the term to include an 
individual who receives or is eligible to receive a free or 
reduced price lunch.
    Out-of-school youth. Amends the terms to give it the 
meaning as defined in section 129(a)(1)(b) of WIA.

Section 111. Purpose

    Section 111 adds twelve purposes to the broad purpose to 
provide workforce investment activities that increase 
employment, retention, self-sufficiency, and earnings of 
participants and increase occupation skill attainment by 
participants, and, as a result, improve the quality of the 
workforce, reduce welfare dependency, and enhance the 
productivity of and competitiveness of the Nation. Among other 
things, the new purposes include:
           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;
           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; and
           To provide workforce investment systems that 
        are demand-driven and responsive to the needs of all 
        employers, including small employers.

Section 112. State Workforce Investment Boards

    Membership. Section 112 clarifies that in the case of the 
programs authorized under title I of the Rehabilitation Act of 
1973, the representative to the State Workforce Investment 
Board shall be the head of the designated State unit, as 
defined in section 7 of the Rehabilitation Act.
    Section 112 adds the requirement that the State agency 
officials responsible for economic development be a member of 
the State Board. This section also requires that 
representatives of businesses on the board include 
representatives of small business and that business 
representatives be appointed from among individuals nominated 
by local boards in addition to nominations by State business 
organizations and business trade organizations.
    Section 112 eliminates the requirement that membership on 
the State Board include representatives of individuals and 
organizations that have experience with respect to youth 
activities. This section also eliminates the requirement that 
membership on the Board include representative of individuals 
and organizations that have experience and expertise in the 
delivery of workforce investment activities, including chief 
executive officers of community colleges and community-based 
organizations within the State.
    Functions. Section 112 adds the following State board 
functions:
           Implement and revise the State plan (in 
        addition to develop);
           Review and comment on the State plans of all 
        one-stop partner programs;
           Develop and review statewide policies 
        affecting the coordinated provision of services through 
        the one-stop delivery systems;
           Develop statewide criteria to be used by 
        chief elected officials for the appointment of local 
        boards and for use in certification of local boards; 
        and
           Increase the availability of skills 
        training, employment opportunities, and career 
        advancement for hard-to-serve populations.
    Alternative Entity. Section 112 amends the provisions 
regarding the State board alternative entity to stipulate that 
if a State fails to have performed successfully, the Secretary 
of Labor may require the State to establish a State board.
    Sunshine Provision. Section 112 amends the sunshine 
provisions to require that the State board include 
modifications to the State plan in the information it makes 
available to the public.
    Authority to Hire Staff. Section 112 adds a provision 
allowing the State board to hire staff to assist in carrying 
out the functions of the board.

Section 113. State Plan

    Planning Cycle. Section 113 stipulates that the State plan 
outline a 4-year strategy (rather than the current law 
requirement of a 5-year strategy) for the statewide workforce 
investment system. This section further stipulates that at the 
end of the first 2-year period, the State board shall review 
and, as needed, amend the State plan to reflect labor market 
and economic conditions. This section also requires the State 
to submit a modification to the State plan at the end of the 
first 2-year period, which may include redesignation of local 
areas and levels of performance for the third and fourth years 
of the plan.
    Contents. Section 113 expands the contents of the State 
plan to include, among other things, a description of:
           The procedures that will be taken to assure 
        coordination and avoid duplication among programs, 
        including certain programs authorized under the Social 
        Security Act, programs authorized under title VII of 
        the Rehabilitation Act of 1973, and programs carried 
        out by State agencies relating to mental retardation 
        and developmental disabilities;
           How a State will use WIA Title I, Subtitle B 
        funds to leverage other resources in order to, among 
        other things, expand resources for the provision of 
        employment and training services, and of the incentive 
        and technical assistance the State will provide to 
        local areas regarding leveraging funds;
           How the State will serve the employment and 
        training needs of persons with disabilities;
           How the State will utilize technology to 
        facilitate access to services in remote areas;
           The State strategy for coordinating 
        workforce investment activities and economic 
        development activities;
           How the State will use WIA Title I, Subtitle 
        B funds to implement innovative programs and strategies 
        designed to meet the needs of all businesses in the 
        State; and
           How the State will assist local areas in 
        assuring physical and programmatic accessibility for 
        individuals with disabilities at one-stop centers.
    Modifications to State Plan. Section 113 adds the 
stipulation that the State submit modifications to the State 
plan required by statute, and under circumstances prescribed by 
the Secretary that are due to changes in Federal law that 
significantly affect elements of the State plan.

Section 114. Local Investment Areas

    Designation of Areas. Section 114 adds as a consideration 
that the Governor take into account in designating local areas, 
the extent to which the local area will promote maximum 
effectiveness in the administration and provision of services. 
Section 114 also adds the requirement that in order to receive 
an automatic designation as a local area, the local area must 
have performed successfully and sustained fiscal integrity 
during a statutorily two-year period.
    ``Performed successfully'' means that the local area 
performed at 80 percent or more of the adjusted level of 
performance for core indicators of performance. ``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 
local area ``misexpended'' WIA Title I funds due to willful 
disregard of the requirements of the Act involved, gross 
negligence, or failure to comply with accepted standards of 
administration.
    Section 114 eliminates the authority of the Secretary to 
review the appeal of a unit of general local government or 
grant recipient to the State board when an area was not 
designated as a local workforce investment area.
    Single Local Area States. Section 114 provides that the 
Governor of any State that was a single local area as of July 
1, 2002, may continue to designate the State as a single local 
area if the Governor identifies the States as a local area in 
the State plan. If the State was not a single local area, the 
Governor may designate the State as one if no local area 
meeting the requirements for automatic designation requests 
designation as a separate local area. If a State is designated 
as a local area, the local plan shall be submitted to the 
Secretary for approval as part of the State plan.
    Regional Planning. Section 114 provides, as does current 
law, that a State may require regional planning by local boards 
for a designated region in the State. Section 114 adds a 
provision permitting the State to 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. If the State requires 
regional planning, the State shall provide technical assistance 
and labor market information to the local areas.
    Section 114 adds to the types of information that States 
may require local boards for a designated area to share, 
information about the skill requirements of existing and 
emerging industries and industry clusters. This section also 
permits the State to require the local boards for a designated 
area to coordinate services with regional economic development 
services and strategies.

Section 115. Local Workforce Investment Boards

    Membership. Section 115 clarifies that members of the board 
representing business shall include representatives who 
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 
local businesses, including small businesses.
    Section 115 adds the stipulation that membership of the 
local board include a superintendent representing the local 
school districts involved or another high-level official, the 
president or highest ranking official of an institution of 
higher education serving the local area, and an administrator 
of local entities providing adult education and literacy 
activities. If there are multiple school districts or 
institutions of higher education serving a local area, the 
representatives shall be appointed from among individuals 
nominated by regional or local educational agencies, 
institutions, or organizations representing such agencies or 
institutions.
    Section 115 clarifies that representatives of community-
based organizations include organizations representing hard-to-
serve populations. This section also eliminates the requirement 
that representatives of each of the one-stop partners serve on 
the local board. Section 115 adds the requirements that 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 shall be included 
on the board.
    Section 115 adds the requirements that members of the board 
represent diverse geographic sections within the local area.
    Functions. Section 115 adds the following local board 
functions:
           Work to ensure there are sufficient 
        providers of intensive and training services serving 
        the local area in a manner that maximizes consumer 
        choice, including providers with expertise in assisting 
        individuals with disabilities;
           Ensure the appropriate use and management of 
        WIA Title I, Subtitle B funds; and
           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.
    Section 115 clarifies that the local board shall include 
promoting the participation of small employers in its function 
to promote the participation of private sector employers in the 
statewide workforce investment system. The board shall take 
into account the needs of small business when it works to 
ensure assistance to employers in meeting hiring needs.
    Youth Council. Section 115 eliminates the requirement that 
the local board establish a youth council within each local 
board. Instead, this section allows the local board to 
establish or continue councils to provide information and 
advice to assist the local board in carrying out activities 
under this title. These councils may include a council composed 
of one-stop partners to advise the local board on the operation 
of the one-stop delivery system involved, a youth council 
composed of experts and stakeholders in youth programs to 
advise the local board on youth activities, and other councils 
as the local board determines are appropriate.
    Alternative Entity. Section 115 revises the conditions 
under which an alternative entity may serve as a local board 
to, among other things, require that the alternative entity was 
in existence on August 7, 1889, pursuant to State law.

Section 116. Local Plan

    Planning Cycle. Section 116 stipulates that the local board 
shall develop a 4-year local plan (rather than the current law 
requirement of a 5-year plan). This section further stipulates 
that at the end of the first 2-year period, the local board 
shall review and, as needed, amend the local plan to reflect 
labor market and economic conditions.
    Contents. Section 116 expands the contents of the local 
plan to include, among other things, 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.
           How the local board will ensure physical and 
        programmatic accessibility for individuals with 
        disabilities at one-stop centers;
           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; and
           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.

Section 117. Establishment of One-Stop Partners

    Roles and Responsibilities of Required One-Stop Partners. 
Section 117 adds the following new roles and responsibilities:
           Provide access through the one-stop delivery 
        system to the programs and activities carried out by 
        the one-stop partner, including making the program's 
        core services available at the comprehensive one-stop 
        centers and any other appropriate locations;
           Use a portion of the funds available to the 
        partner's program to maintain the one-stop delivery 
        system, including payment of the infrastructure costs 
        of one-stop centers;
           Enter into the local memorandum of 
        understanding with the local board relating to the 
        operation of the one-stop system; and
           Provide representation on the State board.
    Required One-Stop Partners. Section 117 eliminates as a 
required one-stop partner the entity that administers the 
welfare-to-work program. (This program is being phased out; all 
expenditures have to be completed by end of fiscal year 2004.) 
Section 117 adds as a required one-stop partner the entity that 
administers the Temporary Assistance for Needy Families (TANF) 
program, unless the Governor provides written notification to 
the Secretaries of the Departments of Labor and Health and 
Human Services that the entity will not be included as a one-
stop partner.
    Additional One-Stop Partners. Section 117 adds as 
additional partners that may participate in the one-stop 
delivery system, entities that administer employment and 
training programs administered by the Social Security 
Administration, including the Ticket to Work and Self-
Sufficiency program, and employment and training programs 
carried out by the Small Business Administration.
    Memorandum of Understanding. Section 117 modifies the 
memorandum of understanding developed between the local board 
and each one-stop partner to include provisions describing:
           The services to be provided through the one-
        stop delivery system consistent with the requirements 
        Section 121 of WIA, including the manner in which the 
        services will be coordinated;
           How the costs of services and the operating 
        costs of the 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;
           Methods of referral of individuals between 
        the one-stop operator and the one-stop partners for 
        appropriate services and activities;
           Methods to ensure the needs of hard-to-serve 
        populations are addressed in accessing services through 
        the one-stop system; and
           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.
    Established One-Stop Delivery System. Section 117 
eliminates the provision permitting the local board, the chief 
elected official, and the Governor to certify an entity as a 
one-stop partner if there has been a one-stop delivery system 
established in the local area prior to enactment of the Act.
    Establishment of One-Stop Delivery System. Section 117 
replaces reference to ``individual training accounts'' with 
reference to ``career scholarship accounts.''
    Continuous Improvement of One-Stop Centers. Section 117 
adds the requirement that the State board, in consultation with 
chief local elected officials and local boards, to establish 
procedures and 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. This new subsection stipulates 
that the procedures and criteria shall include minimum 
standards relating to the scope and degree of service 
coordination achieved by the one-stop delivery system with 
respect 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. This new section 
further stipulates that 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.
    One-Stop Infrastructure Funding. Section 117 defines 
``costs of infrastructure'' as the nonpersonnel costs that are 
necessary for the general operation of the one-stop center.
    Local Option for One-Stop Infrastructure Funding. Section 
117 adds a provision allowing the local board, chief elected 
officials, and one-stop partners in a local area to choose to 
fund the costs of the infrastructure of one-stop centers 
through methods described in the local memorandum of 
understanding. 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 sufficient funding of the 
infrastructure costs of one-stop centers, as determined by the 
local area, the State infrastructure funding mechanism, 
described below, shall be used.
    Section 117 adds the requirement that the Governor, after 
consultation with chief local elected official, local boards, 
and the State board, provide 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 infrastructure costs, and 
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.
    Partner Contributions to the State Infrastructure Funding 
Mechanism. Section 117 adds the stipulation that if the 
infrastructure of one-stop centers is not funded under the 
local option, described above, then the Governor, after 
consultation with chief local elected officials, local boards, 
and the State board, shall determine the portion of funds to be 
provided by each one-stop partner. In making this 
determination, the Governor shall consider the proportionate 
use of the one-stop centers by each partner, and the costs of 
administration for purposes not related to one-stop centers for 
each partner.
    Section 117 also stipulates that 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 WIA Title II and for 
postsecondary vocational and technical education activities 
authorized under the Carl D. Perkins Vocational and Technical 
Education Act of 1998, or vocational rehabilitation services 
offered under the Rehabilitation Act of 1973, the portion of 
funds to be provided by partners administering these programs 
shall be made by the chief officer of the entity with such 
authority in consultation with the Governor.
    Section 117 adds the requirement that the Governor 
establish a procedure for one-stop partners 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 statutory requirements.
    Section 117 also stipulates that the funds provided by each 
one-stop partner be provided only from funds available for the 
costs of administration under the program administered by such 
partner.
    Section 117 sets the following caps on required 
contributions:
           The portion of funds required to be 
        contributed by WIA formula programs and the employment 
        service authorized under the Wagner-Peyser Act shall 
        not be in excess of 3 percent of the amount of Federal 
        funds provided to carry out each program in the State 
        for a fiscal year unless there is 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 that 
        permits the percentages to be exceeded;
           The portion of funds required to be 
        contributed by other required one-stop partners, except 
        for partners administering the Vocational 
        Rehabilitation program shall not be in excess of 1.5 
        percent of the amount of Federal funds provided to 
        carry out each program in the State for a fiscal year 
        unless there is 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 that permits the 
        percentages to be exceeded;
           An entity administering a vocational 
        rehabilitation program shall not be required to provide 
        an amount in excess of 0.75 percent of the amount 
        provided for the program in the State for the second 
        program year that begins after the date of enactment of 
        the Workforce Investment Act Amendments of 2003, 1.0 
        percent of the amount provided for the third program 
        year, 1.25 percent of the amount provided for the 
        fourth program year, and 1.5 percent of the amount 
        provided for the fifth and each succeeding program 
        year;
           An entity administering a Federal direct 
        spending program shall not be required to provide an 
        amount in excess of the amount determined to be 
        equivalent to the cost of the proportionate use of the 
        one-stop centers for the program; and
           The method for determining the appropriate 
        portion of funds to be provided by WIA Native American 
        programs to pay for the costs of infrastructure of a 
        one-stop center shall be determined as part of the 
        development of the memorandum of understanding for the 
        one-stop center and shall be stated in the memorandum.
    Allocation by the Governor of Partner Contributions to the 
State Infrastructure Funding Mechanism. Section 117 adds the 
requirement that the State board develop a formula to be used 
by the Governor to allocate the funds to local areas not 
funding infrastructure costs under the local option. 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 the centers that the 
State board determines are appropriate.
    Other Funds. Section 117 stipulates that a portion of other 
Federal funds for one-stop partner programs or the noncash 
resources available to these programs shall be used to pay the 
additional costs relating to the operation of the one-stop 
delivery system, such as the costs of the provision of core 
services. The method for determining the appropriate portion of 
funds and noncash resources to be provided by each program for 
a one-stop center shall be determined as part of the 
development of the memorandum of understanding 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.

Section 118. Eligible Providers of Training Services

    Criteria. Section 118 adds the requirement that the 
Governor, after consultation with the State board, establish 
criteria regarding the eligibility of providers of training 
services to receive WIA funds. Among other things, the criteria 
shall take into account the following:
           The performance of providers of training 
        services with respect to the performance measures for 
        those individuals receiving training services;
           The need to ensure access to training 
        services throughout the State, including any rural 
        areas;
           The information providers are required to 
        report to State agencies with respect to Federal and 
        State programs; and
           The requirements for State licensing of 
        providers of training services, and the licensing 
        status of each provider of training services if 
        applicable.
    Section 118 stipulates that the criteria established by the 
Governor shall require that a provider of training services 
submit appropriate, accurate, and timely information to the 
State to assist participants in choosing providers. The 
criteria shall also provide for annual review and renewal of 
eligibility for providers of training services.
    Section 118 also allows local boards to establish criteria 
in addition to the criteria established by the Governor, or to 
require higher levels of performance than required under the 
criteria established by the Governor.
    Procedures. Section 118 adds the requirement that the 
Governor, after consultation with the State board, establish 
criteria regarding the eligibility of providers of training 
services to receive WIA funds. Among other things, the 
procedures shall identify the application process for a 
provider of training services to become eligible to receive 
funds to provide training services, and identifying the 
respective roles of the State and local areas in receiving and 
reviewing the applications and in making determinations of 
eligibility.
    Information To Assist Participants in Choosing Providers. 
Section 118 adds the requirement that the Governor ensure that 
a list of eligible providers is provided to the one-stop 
delivery system in the State. Section 118 also stipulates that 
an entity that carries out programs under the National 
Apprenticeship Act shall be included on the list of eligible 
providers as long as the entity remains certified by the 
Department of Labor.
    Agreements With Other States. Section 118 adds a provision 
that allows States to enter into agreements, on a reciprocal 
basis, to permit eligible providers of training services to 
accept career scholarship accounts provided in another State.
    Opportunity To Submit Comments. Section 118 adds the 
requirement that the Governor provide an opportunity for 
interested members of the public to make recommendations and 
submit comments regarding criteria, procedures, and 
information.
    Transition Period for Implementation. Section 118 adds the 
stipulation that the requirements regarding eligible providers 
of training services shall be implemented not later than 
December 31, 2004. Section 118 also provides that in order to 
facilitate early implementation of the requirements, the 
Governor may establish transition procedures under which 
providers eligible to provide training services 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.
    Section 118 contains provisions regarding ``Enforcement'' 
and ``On-the-Job Training or Customized Training'' that are 
similar to current-law provisions.

Section 119. Eligible Providers of Youth Activities

    Section 119 adds an exception to the current law 
requirement that local boards award WIA youth grants or 
contracts on a competitive basis to providers of youth 
activities identified based on the criteria in the State plan. 
This exception allows a local board to award grants or 
contracts on a sole-source basis if the board determines there 
is an insufficient number of eligible providers of youth 
activities in the local area for grants and contracts to be 
awarded on a competitive basis.

Section 120. Youth Activities

    State Allotments. Section 120 provides that the portion of 
funds that is reserved for youth opportunity grants under 
current law instead be reserved for youth challenge grants 
under Section 169 of WIA. Section 120 adds the requirement that 
a minimum amount of $10 million be reserved for youth 
activities for farm workers under section 167 of WIA Section 
120. Section 120 deletes the requirement that the Secretary 
reserve funds for a role model academy project. (Current law 
provides that funds can be reserved only for fiscal year 1999.)
    Section 120 stipulates that of the funds remaining after 
funds are reserved for youth challenge grants, youth activities 
for farm-wives and Native Americans, and for the outlying 
areas, the Secretary shall allot to the States an amount 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 WIA 
(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 section 127(b)(1)(C). (The State 
formula under this section is based on one-third State relative 
share of total unemployed in areas of substantial unemployment, 
one-third State relative share of excess unemployed, and one-
third State relative share of economically disadvantaged 
youth.) The amount of any funds in excess of the amount to be 
distributed according to current-law provisions is to be 
distributed on the basis of one-third State relative share of 
individuals in the civilian labor force who are ages 16 through 
21, one-third State relative share of unemployed individuals, 
and one-third relative share of disadvantaged youth who are 
ages 16 through 21.
    Section 120 deletes the allotment calculation for an area 
served by the rural concentrated employment program grant 
recipient. Section 120 also deletes the requirement that no 
State receive an allotment for a fiscal year that is less than 
the greater of an amount based on 90 percent of the allotment 
percentage of the State for the preceding fiscal year of 100 
percent of the total allotment for the summer youth and year-
round youth programs authorized under the Job Training 
Partnership Act for fiscal year 10998. Instead, section 120 
requires the Secretary to ensure that no state shall receive an 
allotment percentage that is less than 90 percent of the 
allotment percentage of the State for the preceding fiscal 
year. Section 120 also deletes the requirement that for any 
fiscal year in which the amount available for allocation to 
States does not exceed $1 billion, then the minimum State 
allotments shall be calculated by the methodology for 
calculating the corresponding allotments under parts B and C of 
title II of the Job Training Partnership Act, as in effect on 
July 1, 1998.
    Section 120 also amends the provisions regarding the 
reallotment of State funds to require that the amount available 
for reallotment for a program year is equal to the amount by 
which the unexpended balance at the end of the previous program 
year exceeds 30 percent of the State's allotment for the 
previous program year. The unexpended balance is the amount 
that is the difference between the total amount of funds 
available to the State during the previous program year and the 
accrued expenditures during the previous program year.
    Section 120 stipulates that the State allotment provisions 
are effective for the program year that begins after the date 
of enactment of this Act.
    Within State Allocations. Section 120 amends the provisions 
regarding the allocation of funds to local areas to require 
that the Governor allot not less than 80 percent of the funds 
available for local allocation in a State on the basis of one-
third local relative share of individuals in the civilian labor 
force who are ages 16 through 21, one-third local relative 
share of unemployed individuals, and one-third local relative 
share of disadvantaged youth who are ages 16 through 21. The 
Governor can allot not more than 20 percent of the funds 
available for local allocation in a State to local areas where 
there are a significant number of eligible youth, after 
consultation with the State board and local board. Section 120 
establishes a maximum percentage allotment of 130 percent of 
the allocation percentage of the local area for the preceding 
year for the allocation of the 80 percent portion of funds.
    Section 120 also amends the provisions regarding the 
reallocation of local funds to require that the amount 
available for reallocation for a program year be equal to the 
amount by which the unexpended balance at the end of the 
previous program year exceeds 30 percent of the total among of 
funds available to a local area for the previous program year. 
The unexpended balance is the amount that is the difference 
between the total amount of funds available to the local area 
during the previous program year and the accrued expenditures 
during the previous program year.
    Youth Participant Eligibility. Section 120 clarifies that 
out-of-school youth and in-school youth are eligible for WIA 
services. Section 120 defines ``out-of-school youth'' as an 
individual who is not younger than age 16 or older than age 21, 
and is one of the following:
           A school dropout;
           A youth who is within the age for compulsory 
        school attendance, but has not attended school for at 
        least one school year calendar quarter;
           A recipient of a secondary school diploma or 
        its equivalent who is deficient in basic skills, a low-
        income, and not attending any school;
           An individual subject to the juvenile 
        justice system or ordered by court to attend an 
        alternative school.
           An out-of school low-income individual who 
        is pregnant or parenting;
           A youth who is not attending school or a 
        youth attending an alternative school, who is homeless, 
        a runaway, a foster child, an older foster youth or 
        former foster youth, or a youth who is in an out-of-
        home placement; or
           A low-income individual who requires 
        additional assistance to complete an educational 
        program to secure or hold employment.
    Section 120 defines ``in-school-youth'' as an individual 
who is not younger than age 14 or older than age 21, a low-
income individual, and is one or more of the following:
           Deficient in basic literacy skills, 
        including limited English proficiency;
           Homeless, a runaway, a foster child, an 
        older foster youth or former foster youth, or a youth 
        who is in an out-of-home placement;
           Pregnant or parenting;
           An offender; or
           An individual who requires additional 
        assistance to complete an educational program, or to 
        secure or hold employment.
    Section 120 specifies that not more than 5 percent of youth 
in a local area (for whom being low-income is an eligibility 
requirement) may be individuals who are not low-income. (Under 
current law, all youth are required to be low-income, except 
for 5 percent of youth in a local area if they meet one or more 
specified criteria, such as being a school dropout.)
    Section 120 adds the requirement that not more than 60 
percent of funds may be used to provide activities for in-
school youth. (Under current law, not more than 70 percent of 
funds may be used to provide activities for in-school youth.)
    Section 120 also adds a requirement that in providing 
assistance to an individual who is required to attend school 
under applicable State compulsory school attendance laws, the 
priority in providing assistance shall be for the individual to 
attend school regularly.
    Statewide Activities. Section 120 amends the list of 
permissible statewide activities to include, among other 
things:
           Conducting evaluations, research, and 
        demonstration projects;
           Providing incentive grants to local areas 
        for regional cooperation among local boards, for local 
        coordination of activities, and for exemplary 
        performance by local areas;
           Providing technical assistance and capacity 
        building activities to local areas, one-stop operators, 
        one-stop partners, and eligible providers;
           Operating a fiscal and management 
        accountability information system;
           Carrying out monitoring and oversight of 
        activities; and
           Providing additional assistance to local 
        areas that have high concentrations of eligible youth.
    Local Elements and Requirements. Section 120 adds the 
requirement that service strategies developed for each 
individual be directly linked to one or more performance 
measures. Section 120 also adds new requirements that programs 
provide activities leading to the attainment of a secondary 
school diploma or its equivalent, or another recognized 
credential; preparation for postsecondary educational advanced 
training opportunities; strong linkages between academic 
instruction based on State academic content and student 
academic achievement standards established under section 1111 
of the Elementary and Secondary Education Act of 1965 and 
occupational learning that lead to the attainment of recognized 
credentials; and 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.
    Section 120 adds the following new program elements:
           On-the-job training opportunities;
           Opportunities to acquire financial literacy 
        skills;
           Entrepreneurial skills training and micro 
        enterprise services; and
           Information about average wages for a range 
        of jobs available in the local area, including 
        technology jobs.
    Section 120 adds the requirement that local boards 
establish linkages with educational agencies responsible for 
services to participants. (Under current law, youth council are 
required to establish the linkages.)

Section 121. Adult and Dislocated Worker Employment and Training 
        Activities

    State Allotments. Section 121 amends the formula for 
determining the allotment among States for Adult Employment and 
Training Activities. Funds shall be allotted according to the 
following formula: 40 percent on the basis of the relative 
number of unemployed individuals in areas of substantial 
unemployment in each State, 25 percent on the basis of the 
relative number of individuals in the civilian labor force in 
each State, 35 percent on the basis of the relative number of 
disadvantaged adults in each State. This section also amends 
the small state minimum allotment by eliminating the minimum 
funding calculated under the Job Training Partnership Act. This 
section also amends the provisions regarding the reallotment of 
funds to require that that amount available for reallotment for 
a program year exceeds 30 percent of the State's allotment for 
the previous program year. Unexpended balance is defined as the 
difference between the total amount of funds allotted to the 
State the previous program year and accrued expenditures.
    Within State Allocations. Section 121 amends Section 133 of 
WIA regarding within State Allocations to be consistent with 
the changes to the State reallotment provisions.
    Required Statewide Employment and Training Activities. 
Section 121 adds a provision authorizing Governors to use rapid 
response funds that remain unexpended after the end of the 
program year to be used for other required statewide employment 
and training activities and allowable employment and training 
activities. Section 121 amends required statewide employment 
and training activities to include: disseminating an eligible 
provider list and information identifying eligible providers of 
on-the-job and customized training; disseminating performance 
and cost information on providers; disseminating information on 
physical and programmatic accessibility; conducting 
evaluations, providing incentive grants; developing strategies 
to ensure that activities are placing men and women in jobs, 
education, and training that lead to comparable pay; providing 
technical assistance and capacity building; operating fiscal 
and management accountability; monitoring and oversight.
    Allowable Statewide Employment and Training Activities. 
Section 121 amends allowable statewide employment and training 
activities to include: implementing innovative programs and 
strategies to meet business needs; developing strategies for 
effectively serving hard-to-serve populations; implementing 
innovative programs for displaced homemakers; implementing 
programs to increase individuals trained for or placed in 
nontraditional employment; facilitating remote access to 
services; supporting the provision of core services; improving 
coordination with the child welfare system; improving 
coordination with economic development activities, child 
support services, Department of Agriculture cooperative 
extension programs, and programs carried out in the local area 
for individuals with disabilities; developing and disseminating 
workforce and labor market information; conduction research and 
demonstration projects; and adopting, calculating or 
commissioning a minimum self-sufficiency standard.
    Required Local Employment and Training Activities. Section 
121 amends Section 134 of WIA to add the requirement that local 
areas designate a dedicated business liaison in the local area 
and that Wagner-Peyser employment services co-locate at 
comprehensive one-stop centers. Section 121 expands core 
services to also include job search and placement assistance 
for exposure to high wage, high skill jobs and nontraditional 
employment, and recruitment and other business services. 
Section 121 also amends the eligibility requirements for 
intensive services. Unemployed individuals are eligible for 
intensive services if they have been determined to be unlikely 
or unable to obtain employment that leads to self-sufficiency 
or wages comparable or higher than previous employment through 
core services and in need of intensive services to obtain such 
employment. Employed individuals are eligible for intensive 
services if they have been determined to be in need of 
intensive services to obtain employment that leads to self-
sufficiency. Section 121 expands intensive services to also 
include internships and work experience; literacy and financial 
literacy activities; out-of-area job search and relocation 
assistance; and English language acquisition and integrated 
training programs. Section 121 authorizes case management for 
intensive as well as training participants.
    Section 121 also amends the eligibility requirements for 
training services. Adults and dislocated workers eligible for 
training services must have been determined to be unlikely or 
unable to obtain employment that leads to self-sufficiency or 
wages comparable or higher than previous employment through 
intensive services, in need of training services to obtain such 
employment, and have the skills and qualifications to 
participate in training. Section 121 adds English language 
acquisition and integrated training programs to the list of 
training services. Individual Training Accounts are renamed 
Career Scholarship Accounts. Local boards are authorized to 
coordinate career scholarship accounts with other job training 
programs or sources to assist the individual in obtaining 
training. Section 121 adds an exception that allows local 
boards to contract with an institute of higher education for 
training services in order to facilitate the training of 
multiple individuals in high-demand occupations, if such 
contract does not limit customer choice.
    Permissible Local Activities. The list of permissible local 
activities is amended to include: customized screening and 
referral of participants; customized fee-for-service employment 
services; customer support for hard-to-serve populations; 
technical assistance and capacity building for serving 
individuals with disabilities; coordinating with the child 
support enforcement activities; improving coordination with 
child support services; improving coordination with Department 
of Agriculture cooperative extension programs, facilitating 
remote access to services; improving coordination with economic 
development activities; improving linkages with employers; 
training programs for displaced homemakers and individuals 
training for nontraditional occupations; activities to carry 
out business services and strategies; adjusting the self-
sufficiency standard; and improving coordination with programs 
carried out in the local area for individuals with 
disabilities. Section 121 authorizes local areas to use funds 
to provide work support activities for low-wage workers through 
the one-stop delivery system. Section 121 authorizes local 
boards to use up to 10 percent of local funds to pay for the 
Federal share of incumbent worker training. Employers are 
required to share the cost of incumbent worker training, 
depending on the size of the employer.

Section 122. Performance Accountability System

    State Performance Measures. Section 122 amends Section 136 
of WIA to replace the adult performance indicator of earnings 
received in unsubsidized employment 6 months after entry into 
employment with increases in earning from unsubsidized 
employment. Core indicators for youth are amended to include 
entry into employment, education, advanced training or military 
service; attainment of secondary school diplomas or recognized 
equivalents, and post secondary certificates; and literacy and 
numeracy gains. Section 122 also requires that State 
performance levels be adjusted to reflect economic conditions 
and characteristics of the population to be served; Section 121 
requires the Secretary of Labor to establish national goals for 
adjusted levels for systemwide performance.
    Local Performance Measure. Section 122 requires that local 
performance measures be adjusted to reflect economic conditions 
and characteristics of the population to be served.
    Report. Section 122 expands State reporting requirements to 
include information on the amount and percentage of funds, if 
any, spent on business services; the number of participants 
served and the cost per participant; and the amount of adult 
and dislocated worker funds spent on core, intensive and 
training services.
    Sanctions. Section 122 amends Section 136 of WIA to 
stipulate that States and Local areas are subject to sanctions 
if the State or local area, respectively, performed at less 
than 80 percent of the adjusted level of performance for core 
indicators of performance for 2 consecutive years.
    Incentive Grants. Section 122 expands the basis on which 
incentive grants to local areas can be awarded to include: 
exemplary performance in serving hard-to-serve populations; 
effectively coordinating multiple systems in a comprehensive 
workforce development system; expanding access to training; and 
implementing innovative business and economic development 
initiatives.

Section 123. Authorization of Appropriations

    Section 123 authorizes such funds as may be necessary for 
fiscal years 2004 through 2009 for youth activities, adult 
activities, and dislocated worker activities.

Section 131. Job Corps

    Section 131 strikes the inclusion of local and distant 
employers on industry councils and instead includes language 
that would allow the Industry Council to include employers from 
outside the local area who are likely to hire a significant 
number of enrollees from Job Corps Centers. The bills add the 
requirement that industry councils within single local area 
States must include a representative of the State board. The 
bill strikes current law relating to the establishment of 
performance indicators and directs the Secretary to annually 
establish expected levels of performance for Job Corps centers 
and the Job Corps program relating to each of the core 
indicators for WIA youth activities.
    The bill authorizes the appropriations of such sums as may 
be necessary for fiscal years 2004-2005.

Section 141. Native American Programs

    Sec. 141 amends Section 166 of WIA regarding Native 
American Programs. The Senate bill retains current law duty of 
the Native American Employment and Training Council to advise 
the Secretary on the selection of the individual appointed as 
head of the Division of the Indian and Native American Programs 
at the Department of Labor.
    The bill amends Section 116(j) to provide assistance to 
unique populations in Alaska and Hawaii to improve job training 
and workforce investment activities and authorizes 
appropriations of such sums as may be necessary for fiscal year 
2004.
    The bill adds a requirement that the Secretary, in 
consultation with the Native American Employment and Training 
Council to develop performance indicators that are appropriate 
to the Native American program.

Section 142. Migrant and Seasonal Farmworkers

    No change is made to current law except the addition of 
``permanent housing'' to allowable activities.

Section 143. Veterans

    No change to current law is made except a citation update.

Section 144. Youth Challenge Grants

    In General. Section 144 replaces youth opportunity grants 
with youth challenge grants. Under the amended section 169 of 
WIA, of the amounts reserved for Youth Challenge Grants, not 
less than 80 percent shall be used by the Secretary to award 
competitive grants and not more than 20 percent may be used by 
the Secretary to award discretionary grants.
    Competitive Grants. Competitive grants may be awarded to 
States, local boards, recipients of Native American grants, and 
public or private entities with expertise in youth activities 
applying in partnership with local boards. The bill establishes 
the factors for awarding grants and requires the Secretary to 
ensure an equitable geographic distribution of grants across 
geographically diverse areas. Youth aged 14 to 21 may be 
eligible to participate in activities that are designed to 
assist youth in acquiring the skills, credentials, and 
employment experience necessary to succeed in the labor market. 
The Secretary shall require matching funds from grant 
recipients of at least 10 percent. The bill stipulates that 
initial grants are for a period of 2 years, which may be 
renewed for up to 3 succeeding years if the recipient performed 
successfully.
    Discretionary Grants. The bill stipulates that the 
Secretary may award discretionary grants to eligible entities 
to provide activities that assist youth in preparing for, 
entering, and retaining employment; assist in-school youth to 
stay in school and gain work experience; assist youth in 
economically distressed areas; and such other activities as the 
Secretary determines are appropriate to ensure that youth 
entering the workforce have needed skills. The bill directs the 
Secretary to ensure equitable distribution to rural areas in 
awarding grants. Youth aged 14 to 21 may be eligible to 
participate in activities. The Secretary shall require matching 
funds from grant recipients of at least 10 percent.

Section 145. Technical Assistance

    Sec. 145 amends Section 170 of WIA relating to technical 
assistance. Funding for peer review activities and training of 
staff, and training of state and local boards, are specifically 
authorized as an allowable use of funds. The bill requires the 
Secretary to establish a system for States to share best 
practices, and evaluate and disseminate information on best-
practices and commission research to address knowledge gaps.

Section 146. Demonstration Pilot, Multiservice, Research, and 
        Multistate Projects

    Section 146 amends the provisions of section 171 of WIA 
relating to demonstration, pilot, multiservice, research, and 
multistate projects. The list of projects contained in section 
171(b)(1) of WIA is amended to include: projects that assist 
national employers to enhance facilitate the recruitment and 
employment of workers for career ladder jobs; systems 
development activities that improve the maximum effectiveness 
of programs; projects that focus on industries and sectors that 
experience, or are likely to experience, high-growth and job 
leading to self-sufficiency, integrated systems training 
projects; State and local projects to test innovative 
approaches to workforce delivering services; projects that 
provide retention grants to qualified job training programs; 
targeted innovation projects that improve access to and 
delivery of workforce services; projects that promote the use 
of distance learning; projects that provide comprehensive 
education and training services and support services, in 
coordination with local boards, for populations in high poverty 
areas.
    The bill replaces existing formula studies to be carried 
out by the Secretary under Section 171(c)(2)(B) with the 
following: net impact studies on resources available to assist 
out-of-school youth; study on industry-based certification and 
credentials; study on the effectiveness of workforce investment 
system in meeting business needs.
    The bill adds a new subsection 171(c) that directs the 
Secretary of Labor to carry out 10 pilot projects to establish 
a system of industry-validated certifications of skills, 
including 8 in high-technology industries and 2 in cross-
disciplinary skills related to homeland security. Grants 
applications will be submitted to the Department of Labor, 
which will create criteria for the application consistent with 
the goals of the subsection. Grants are competitive, and will 
be made to eligible entities for periods of 36-48 months. 
Graphic diversity, including rural areas, shall be considered 
in the award of grants. Eligible entities shall work with the 
local workforce investment board and shall include as a 
principal participant one of the following: (1) A community 
college; (2) an advanced technology education center; (3) a 
local workforce investment board; (4) a representative of a 
business in the target industry for the certification involved; 
and (5) a representative of an industry organization, labor 
organization, or community development organization. The 
eligible entity shall have a history of demonstrated capacity 
for effective collaboration with industry on workforce 
development activities. Authorized activities for funding are: 
(1) To establish certification requirements for an industry; 
(2) to develop and initiate certification programs including 
preparatory courses, course materials, procedures, and 
examinations; and (3) to collect and analyze data at the 
program's completion, including best practices that may be used 
by local and State workforce investment boards. Certification 
requirements shall be linked to those developed by the National 
Science Foundation Advanced Technological Education Program, 
requiring that an individual demonstrate an identifiable set of 
competencies related to an industry, including evidence of a 
transferable skill that allows flexibility and mobility for the 
individual. The Secretary of Labor shall consult with the 
Director of the National Science Foundation to ensure that the 
pilot projects are created consistent with the best practices 
obtained from the National Science Foundation Advanced 
Technological Education Program. After analyzing and collecting 
the data obtained from the programs, the Secretary shall: (1) 
Establish the core components of a model high-technology 
certification program; (2) establish guidelines to assure the 
development of a uniform set of standards and policies for such 
programs; (3) submit a report to the Senate Health, Education, 
Labor, and Pensions Committee and the House Committee on 
Education and Workforce; and (4) make the data and report 
available to the public. $30 million is authorized in fiscal 
year 2004 for the purposes of this subsection.
    The bill adds a new subsection 171(f) that directs the 
Secretary of Labor to award not less than 10 competitive grants 
to eligible entities designed to integrate English language 
proficiency and occupational training. Grants applications will 
be submitted to Department of Labor, which will create criteria 
for the application consistent with the goals of the 
subsection. To be eligible for a grant under this subsection, 
entities shall have experience: (1) Serving individuals with 
limited language proficiency, including individuals with lower 
levels of oral and written English; and (2) providing workforce 
programs with training and English language instruction. 
Included in this application shall be: (1) Capability 
statements; (2) assurances that the program shall establish: 
(a) a generalized adult bilingual workforce training and 
education model that integrates English language acquisition 
occupational training, including the unique linguistic and 
cultural factors of the participants; (b) a framework by which 
the employer, employee, and other relevant members of the 
eligible entity can create a career-development and training 
plan that assist the employer and employee to meet their long-
term needs; (c) 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 the future labor market 
conditions relevant to the local area; (d) identifiable 
measures so the progress of the employer, employee, and program 
can be evaluated, including best practices. The Secretary shall 
select programs for awards to ensure that competitive data on 
multiple approaches to integrated workforce training and 
language instruction be obtained. Grants are competitive, and 
will be made to eligible entities for periods of 24-48 months. 
Geographic diversity, including rural areas, shall be 
considered. Eligible entities shall work with the local 
workforce investment board and shall include as a principal 
participant one or more of the following: (1) An employer or 
employer organization; (2) a non-profit provider of English 
instruction; (3) a provider of occupational or skills training; 
(4) a community based organization; (5) an educational 
institution, including a 2- or 4-year college, or a technical 
or vocational school; (6) a labor organization; and (7) a local 
workforce investment board. After analyzing and collecting the 
data obtained from the programs, the Secretary shall submit a 
report to the Senate Health, Education, Labor and Pensions 
Committee and the House Committee on Education and Workforce 
and make the data and the report available to the public. $10 
million is authorized in fiscal year 2004 for the purposes of 
this subsection.

Section 147. National Dislocated Worker Grants

    The National Emergency Grants will now be known as National 
Dislocated Worker Grants (NDWG). These grants will continue to 
assist state and local areas to respond with job training and 
assistance when significant numbers of workers suffer from 
dislocation, due to mass layoffs or plant closings. This bill 
adds the ability of the secretary to respond in partnership 
with the Department of Defense Veterans' Affairs transition 
assistance programs. When an area faces a higher than average 
demand for employment and training for dislocated members of 
the Armed Forces and their spouses, it is the opinion of this 
Committee that the area can apply for a NDWG.

Section 148. Authorization of Appropriations for National Activities

    The bill amends section 174 of WIA to authorize 
appropriations of such sums as may be necessary for 2004 
through 2009. The bill strikes the current law reservations and 
authorizes appropriations of such sums as may be necessary to 
carry out section 170 through 172 of WIA for 2004 through 2009.

Section 151. Administration

    Section 151 amends section 181(e) of WIA to strike economic 
development activities from the list of activities for which 
WIA Title I funds shall not be used.

Section 152. Cost Principles

    The bill amends the citation.

Section 153. Reports

    Section 153 amends Section 185(e) of WIA to allow the use 
of electronic methods to submit information or disseminate 
information.

Section 154. Administrative Provisions

    Section 154 amends the annual report provisions of section 
189(d) of WIA to require the Secretary of Labor to include 
information on 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. The bill 
provides that the Secretary shall not waive statutory or 
regulatory requirements relating to the funding of 
infrastructure costs for one-stop centers. The bill directs the 
Secretary to expedite requests for waivers for statutory or 
regulatory requirements that have been approved for a State, 
provided the requirements of section 189 have been satisfied.

Section 155. Use of Certain Real Property

    Section 155 amends section 193 of WIA to provide for the 
transfer of any Federal equity acquired in real property 
through grant to States awarded under title III of the Social 
Security Act or the Wagner-Peyser Act is transferred to the 
States that used the grants to acquire the equity. The portion 
of the proceeds from the sale of such real property 
attributable to transferred equity is to be used for Wagner-
Peyser or UI activities under Title III of the Social Security 
Act.

Section 161

    Section 161 amends section 502 of WIA relating to incentive 
grants to States. Prior to July 1, 2005, incentive grants shall 
be awarded in accordance with existing law. Beginning on July 
1, 2005, the Secretary shall award incentive grants to States 
that have exceeded their adjusted levels of performance for WIA 
Title I, Title II, and Carl D. Perkins Vocational and Technical 
Education Act. Incentive grants shall also be awarded to States 
on the basis of exemplary performance in serving hard-to-serve 
populations; effectively coordinating multiple systems into a 
more effective workforce development system; expanding access 
to training; implementing innovative business and economic 
development activities; and such other performance factors as 
the Secretary determines. The bill stipulates that funds 
awarded for incentive grants may be used for activities for WIA 
youth or adult activities, Title II, and Carl D. Perkins 
Vocational and Technical Education Act.

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


Section 201. Short Title; Purpose

    Title II of S. 1627 may be cited as the Adult Education and 
Family Literacy Act Amendments of 2003.
    This section amends Section 202 of the Adult Education and 
Family Literacy Act (20 U.S.C. 9201) to list the purposes of 
this act as follows: (1) assist adults to become literate and 
obtain the knowledge and skills necessary for employment and 
self-sufficiency; (2) assist adults who are parents to obtain 
the educational skills necessary to become full partners in the 
educational development of their children; (3) assist adults in 
the completion of a secondary school education and in the 
transition to postsecondary education; and (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.

Section 202. Definitions

    Updates and defines the following terms.
    Adult Education--S. 1627 adds the word academic to 
instruction and education to services to the current law 
definition and includes the ability to perform mathematics 
skills as an additional indicator of literacy.
    Adult Education and Literacy Activities--is amended to 
provide a more expansive list of eligible activities, including 
programs which include mathematics skills and workplace 
literacy activities, along with reading, writing, speaking and 
family literacy activities leading to a secondary school 
diploma or its state recognized equivalent.
    Eligible Providers--must now be an organization of 
demonstrated effectiveness; the bill does not change the types 
of eligible providers found in current law. The bill adds the 
word coalition to the current definition of consortium.
    English Literacy Program--the bill strikes literacy program 
and inserts language acquisition program to better reflect the 
term of art in the field.
    Essential Components of Reading Instruction--new 
definition: has the meaning given the term in section 1208 of 
the Elementary and Secondary Education Act of 1965.
    Workplace Literacy Program--replaces the current law 
definition with: 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.

Section 203. Authorization of Appropriations

    Changes the authorization to a 6-year period and continues 
the out years to 2009. This is a 6 year reauthorization so the 
appropriations are authorized as such sums until 2009.

Section 204. Home Schools

    The section exempts home schools from the requirements of 
this Act, and applies regardless of whether a home school is 
treated as a home school or a private school under State law.

Section 205. Reservation of Funds; Grants to Eligible Agencies; 
        Allotments

    This section provides for the reservation of funds for the 
National Institute for Literacy, and the national leadership 
activities authorized in Section 243 of the Adult Education and 
Family Literacy Act. It also allows 1.72 percent of funds to be 
used for incentive grants and 12 percent of the sums 
appropriated to be used for distribution according to Section 
244 of the Adult Education and Family Literacy Act (as credited 
by S. 1627).

Section 206. Performance Accountability System

    This section establishes employment performance indicators, 
allows for special accountability measures for workplace 
literacy programs, revises the timetable for agreement on 
eligible agency adjusted levels of performance, and allows the 
use of assessment systems that are not commercially available 
standardized systems if certain standards are met. Furthermore, 
it revises the content and recipients of the eligible agencies' 
required annual report, and establishes a program improvement 
plan (to be accompanied by technical assistance from the 
Secretary) if eligible agencies do not meet their adjusted 
levels of performance for the core indicators of performance.

Section 207. State Administration

    Adds monitoring to the list of state required activities. 
The eligible agency is still responsible for the development, 
submission, and implementation and this bill adds monitoring; 
consultation with other appropriate agencies, groups, and 
individuals that are involved in, or interested in, the 
development and implementation of activities in adult literacy, 
and the coordination and non-duplication with other Federal and 
State programs.

Section 208. State Distribution of Funds; Matching Requirement

    This section updates and amends the requirements governing 
State distribution of funds and the matching requirement. It 
permits the States to use up to 15 percent of their grants for 
State leadership activities, and increases the minimum 
administrative set aside to $75,000.

Section 209. State Leadership Activities

    This section revises and amends the current set of 
activities that can be undertaken by States, all of which now 
must be designed to develop or enhance their adult education 
systems. S. 1627 adds a new State leadership activity, which 
permits States to implement technology related applications, 
translation technology, or distance learning, including 
professional development to support the use of instructional 
technology.
    In addition, this section further expands State leadership 
activities to include efforts to expand collaboration between 
agencies, including postsecondary institutions; coordination 
with mental health services activities to promote workplace 
literacy programs; creation of scientifically based curricula; 
development of assessments; in order to identify the needs and 
capture the gains of students, with particular emphasis on 
students at the lowest achievement level, students who have 
limited English proficiency, and adults with learning 
disabilities; and programs to meet the needs of individuals 
with disabilities, limited English proficiency, or other 
special needs.
    This section also eliminates State incentive grant and 
bonus programs because S. 1627 provides for a much larger 
incentive grant system.

Section 210. State Plan

    This section establishes a four-year State plan along with 
a review of that plan after the first two years, and revises 
the list of entities the eligible agency is required to consult 
with concerning the State plan. Furthermore, it revises the 
required content of the State plan to include a description of: 
how the adult education and literacy needs in each workforce 
development area will be addressed; how the eligible agency 
will hold eligible providers accountable for performance; how 
the eligible agency will improve the quality of teaching and 
instruction; an assurance that the eligible agency will award 
not less than one grant to an eligible provider that offers 
flexible schedules and coordinates with necessary federal, 
state, and local support services (such as child care, 
transportation, mental health services, and case management); 
how the eligible agency shall include various stakeholders in 
the process of public participation and comment with respect to 
the State plan; how the unemployed and under-employed will be 
addressed by strategies in the State plan; how the State plan 
will be coordinated with the plan submitted under Title I; how 
the State will build the capacity of adult education and 
literacy providers and increase the participation of business 
and industry; how the eligible agency will consult with any 
State agencies 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; how the eligible 
agency will consult with the State agency responsible for 
workforce development to develop adult education programs and 
services that prepare students to enter the workforce; and how 
the eligible agency will improve the professional development 
of eligible providers.

Section 211. Programs for Corrections Education and Other 
        Institutionalized Individuals

    Changes the term basic education to adult education and 
literacy activities. Changes the heading from Definition of 
Criminal Offender to Definitions in this section.

Section 212. Grants and Contracts for Eligible Providers

    This section revises and amends the eligibility of 
providers to receive grants or contracts to provide adult 
education services. It emphasizes the need for the eligible 
provider to be responsive to local needs and to serve 
individuals identified in the assessment as having the greatest 
need for adult education services. It also requires eligible 
agencies, in awarding grants or contracts with eligible 
providers, to consider whether eligible providers are able to 
produce information on performance results, provide services 
based on the most rigorous research available, identify whether 
or not the provider's applications of technology and services 
will improve quality and learning, offer flexible schedules and 
coordinate with Federal, State, and local support services 
(such as child care, transportation, mental health services, 
and case management), and demonstrate that they have the 
capacity to serve adult learners with learning disabilities.

Section 213. Local Application

    This section maintains requirements that local providers be 
able to demonstrate where the funding was used and adds a 
requirement that funds be spent consistent with the 
requirements of this subtitle.

Section 214. Local Administrative Cost Limits

    This section allows local providers to spend their 
administrative cost allowance on professional development, and 
the development of measurable goals in reading, writing, 
speaking, and mathematical computation.

Section 215. Administrative Provisions

    This section continues to have 90 percent maintenance of 
effort and continues to allow the Secretary to make 
proportionate reductions if a State fails to maintain that 
effort. The Secretary continues to have the authority to waive 
this provision for not more than 1 year.

Section 216. National Institute for Literacy

    This section amends and revises the mission of the National 
Institute for Literacy. It includes a requirement that the 
Institute coordinate and participate in the Federal effort to 
identify and disseminate information on literacy that is 
derived from the most rigorous research available. In literacy 
areas where scientifically-based research is available, that 
research should be disseminated.
    This section also requires that the Institute work with the 
United States Department of Education to provide training and 
technical assistance to State that are pursuing the 
implementation of standards based educational improvements for 
adults, and to identify rigorous research on the effectiveness 
of instructional practices related to literacy programs.

Section 217. National Leadership Activities

    This section also provides authority for the Secretary to 
support the development of 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) 
and expands the effective outreach and use of such programs and 
materials to adult education eligible providers.
    It also creates authority for the Secretary to pursue 
activities that would help determine 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.

Section 218. Integrated English Literacy and Civics Education

    This section adds a new section to the Adult Education and 
Family Literacy Act that would authorize the allocation of 
funds under Title II activities to be distributed based in part 
on the formula derived from the eligible participants described 
in Section 203, and to distribute 12 percent of the total 
allocation based on a formula that takes into account the 
immigrant population based on data obtained from the United 
States Citizenship and Immigration Services.

Section 219. Transition

    Adds a new provision that instructs the Secretary to make 
the necessary changes to ensure a smooth and orderly transition 
from current law to the new Act.

            TITLE III--AMENDMENTS TO OTHER PROVISIONS OF LAW

    Section 301 amends Section 2(3) of the Wagner-Peyser Act to 
employment services offices in each State be collocated with 
comprehensive one-stop centers.
    Section 301 also amends Section 15 of the Wagner-Peyser Act 
relating to labor market information. The Secretary of Labor, 
in consultation with the States, is authorized to assist in the 
development of national electronic tools to provide services. 
The bill requires the Secretary of Labor to prepare a 2-year 
plan as the mechanism for achieving cooperative management of 
the nationwide workforce and labor market information system. 
The bill also requires the Secretary of Labor to consult at 
least annually with regional representatives of the State 
workforce and labor market information directors. The bill 
authorizes appropriation of such sums as may be necessary for 
fiscal years 2004 through 2005 to enable the Secretary to carry 
out activities in a timely manner through grants or cooperative 
agreements with the States, and requires the funds to be 
distributed in the same manner as under current law.

                TITLE IV--REHABILITATION ACT AMENDMENTS


Section 401. Short Title

    Section 401 provides the title of this Act, the 
``Rehabilitation Act Amendments of 2003''.

Section 402. Technical Amendments to Table of Contents

    Section 402 amends the table of contents of the 
Rehabilitation Act to add section 112, Incentive Grants. It 
also adds a new section 752 and 753, under Title VII, Training 
and Technical Assistance, and renumbers other sections.

Section 403. Purpose

    Section 403 adds a new purpose of the act: 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.

Section 404. Definitions

    In General. Section 404 amends section 7 of the 
Rehabilitation Act.
    Literacy Services and Skills. References to a person's need 
for literacy services and skills is added as part of the 
assessment of needs and eligibility for services. Also added is 
a definition of literacy-, defined as the meaning of the term 
in section 203 of the Adult Education and Family Literacy Act.
    Consumer Organizations. A definition of consumer 
organization is added to describe a membership organization in 
which a majority of the organization's members and a majority 
of the organization's officers are individuals with 
disabilities.
    Core Services. Independent living core services are 
expanded to include maintaining individuals with significant 
disabilities in, or transitioning individuals with significant 
disabilities to, community-based living.
    Post-Employment Services. A definition of post-employment 
services is added as meaning provided subsequent to the 
achievement of an employment outcome, and 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.
    Student With a Disability. A definition of student with a 
disability is added as meaning an individual with a disability 
who attends an elementary school or secondary school and who is 
age 14-21, and has been determined to be eligible for 
vocational rehabilitation services (under section 102(a) of the 
rehabilitation Act). It also refers to an individual who is 
eligible for and receiving special education and related 
services under part B of the Individuals with Disabilities 
Education Act, or is an individual with a disability under 
section 504 of the Rehabilitation Act. It also defines students 
with disabilities to be more than one student with a 
disability.

Section 405. Administration of the Act

    Section 405 amends section 12(a)(1) of the Rehabilitation 
Act by adding a provision authorizing the Commissioner of the 
Rehabilitation Service Administration to provide technical 
assistance to the designated State units on developing 
successful partnerships with employers.

Section 406. Carryover

    Centers for Independent Living and for Independent Living 
Services for the Older Blind. Section 406 amends section 19(a) 
of the Rehabilitation Act by eliminating the carry over funds 
provision for centers for independent living and for 
independent living services for the older blind.
    Protection and Advocacy for Individual Rights. Section 406 
amends section 19 of the Rehabilitation Act by adding a new 
separate provision relating to unobligated funds for protection 
and advocacy for individual rights programs similar to the use 
of unobligated and unexpended funds for other protection and 
advocacy programs. It also specifies that program income 
attributed to the protection and advocacy program is to remain 
available until expended.

             Subtitle A--Vocational Rehabilitation Services


Section 411. Declaration of Policy; Authorization of Appropriations

    Section 411 amends section 100(b)(1) of the Rehabilitation 
Act authorizing such sums as may be necessary for fiscal years 
2004-2009.

Section 412. State Plans

    Employment of Qualified Individuals With Disabilities. 
Section 412 adds a requirement to section 101(a)(6)(B) of the 
Rehabilitation Act that the designated State agencies and the 
community rehabilitation programs also recruit individuals with 
disabilities.
    Comprehensive System of Personnel Development. Section 
101(a)(7)(v)(I) is amended by including training implemented in 
coordination with State programs carried out under section 101 
of the Assistive Technology Act of 1998.
    Comparable Services and Benefits. Section 101(a)(8)(A) of 
the Rehabilitation Act by stipulating that for purposes of 
determining comparable benefits of services for persons who 
receive services under the Ticket to Work and Self-Sufficiency 
Program, comparable benefits include only those benefits and 
services identified in the individual's individualized work 
plan developed by an employment network.
    Reporting Requirements. Section 101(a)(10) of the 
Rehabilitation Act is amended by deleting specific data 
elements described in section 136(d)(2) of the Workforce 
Investment Act of 1998 and adding annual reporting of 
information on eligible individuals receiving services that is 
needed to assess performance on the core indicators of 
performance described in section 136(b)(2)(A)(I) of the 
Workforce Investment Act of 1998. This includes the number of 
applicants and eligible recipients, including the number of 
individuals with significant disabilities, who exited the 
program carried out under this title and the number of such 
individuals who achieved employment outcomes after receiving 
vocational rehabilitation services and the number of 
individuals who received vocational rehabilitation services who 
entered and retained employment and the increases in earnings 
of such individuals, consistent with State reporting 
responsibilities pursuant to section 136(b)(2)(A)(I) of the 
Workforce Investment Act of 1998. Additionally, subparagraph 
(E)(ii) is amended by striking ``in meeting'' and everything 
thereafter and replacing it with ``in meeting the standards and 
indicators established pursuant to section 106.''
    Cooperation, Collaboration and Coordination. Subparagraph 
(C) of Section 101(a)(11) of the Rehabilitation Act is renamed 
Interagency Cooperation with other Agencies and includes the 
State programs carried out under section 101 of the Assistive 
Technology Act of 1998 in the requirement of the State plan to 
include descriptions of interagency cooperation with, Federal, 
State, and local agencies and programs.
    Coordination With Education Officials. Amends Section 
101(a)(11)(D)(ii) of the Rehabilitation Act to require that the 
State agency and the State education agency also plan for the 
development and completion of the individualized plan for 
employment under the vocational rehabilitation program, in 
order to achieve post-school employment outcomes of students 
with disabilities as appropriate.
    Coordination With Ticket To Work and Self-Sufficiency 
Program. Subparagraph (G) is added to Section 101(a)(11) of the 
Rehabilitation Act requiring the designated State agency to 
coordinate activities with any other State agency that 
administers a Ticket to Work and Self-Sufficiency Program.
    Information and Referral Services. Section 101(a)(20) of 
the Rehabilitation Act is amended to require the Secretary 
agency to provide to individuals entitled to social security or 
Supplemental Security Income (SSI) benefits on the basis of a 
disability or blindness, information on the availability of 
benefits under Medicaid and Medicare, the work incentive 
planning and assistance grant program, and protection and 
advocacy programs under State grants for work incentives, and 
medical assistance under other federally-funded programs. 
Additionally, the State agency is required to provide to the 
individuals specified in this paragraph who are also eligible 
for assistance under the Ticket to Work and Self-Sufficiency 
program, specific information on how to contact the program 
manager of that program to obtain information on approved 
employment networks. Subclause (II) is amended to stipulate 
that the referral to a specific point of contact be made ``to 
the maximum extent possible.'' Subclause (III) is also amended 
to refer to information that will assist the individual to 
``advance in'' employment.

Section 413. Eligibility and Individual Plan for Employment

    Options for Developing an Individualized Plan for 
Employment. Amends section 102(b)(1) of the Rehabilitation Act 
to require the designated State unit to provide the individual 
with a listing of community resources (including resources from 
consumer organizations) that are available to assist in the 
development of the individualized plan for employment, to 
enable the individual to make informed choices in developing 
the individualized plan for employment.
    Mandatory Procedures. Section 102(b)(1)(D) of the 
Rehabilitation Act is amended to require that the individual 
plan for employment include, for individuals entitled to Social 
Security or Supplemental Security Income (SSI) benefits on the 
basis of disability or blindness, information on the 
availability of benefits under Medicaid, Medicare, the work 
incentive planning and assistance grants program, and 
protection and advocacy programs under State grants for work 
incentives, and medical assistance under other federally-funded 
programs. Additionally, the State agency is required to provide 
to the individuals specified in this paragraph who are also 
eligible for assistance under the Ticket to Work and Self-
Sufficiency program specific information on options under that 
program, how to contact the program manager of that program on 
approved employment networks, the benefits planning and 
assistance programs in the area, and the protection and 
advocacy programs in the area.
    Review and Amendment. A provision is added to section 
102(b)(2)(E) of the Rehabilitation Act specifying that the 
individualized plan for employment be 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.
    Mandatory Components of an Individualized Plan for 
Employment. Mentoring is added to the list of vocational 
rehabilitation services in section 102(b)(3)(B)(I)(I) of the 
Rehabilitation Act. Subparagraph (H) is a new provision 
regarding the individualized plan for employment for students 
with disabilities. The individualized plan for employment must 
include a description of the student's projected post-school 
employment outcome and the specific transition services 
(including, as appropriate, work experience and mentoring 
activities) needed to achieve the student's employment outcome 
or projected employment outcome. Additionally, subparagraph (1) 
is added to stipulate that for an individual who is receiving 
assistance under the Ticket to Work and Self-Sufficiency 
Program, the individualized plan for employment must include a 
list of services the individual receives from an employment 
network other than the vocational rehabilitation agency.
    Impact on Provision of Services. A stipulation is added to 
section 102(c)(7) of the Rehabilitation Act that the procedures 
take into consideration an individual's informed choice.

Section 414. Vocational Rehabilitation Services

    Section 414 amends section 103(a)(5) of the Rehabilitation 
Act by adding literacy services and mentoring services to the 
list of vocational rehabilitation services.

Section 415. State Rehabilitation Council

    Composition. Section 105(b)(1)(A)(ix) of the Rehabilitation 
Act is amended by clarifying that at least one American Indian 
Vocational Rehabilitation Service director be on the Council in 
a State in which 1 or more projects provide services under 
section 121 of Title I of the Rehabilitation Act.
    Chairperson. Section 105(b)(5) of the Rehabilitation Act is 
amended by giving the Council the authority to select a 
chairperson from among the voting membership of the Council.

Section 416. Evaluation Standards and Performance Indicators

    Section 416 amends section 106(b)(2)(B)(I) of the 
Rehabilitation Act by requiring that if the State has not 
improved its performance to acceptable levels, as determined by 
the Commissioner, then the Commissioner must direct the State 
to make further revisions to the plan to improve performance. 
This 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 by comparable agencies in other States.

Section 417. State Allotments

    Reallotment. Section 417 adds a new provision for 
distribution of funds available for reallotment to other States 
and defines States eligible for reallotment funds to section 
110(b) of the Rehabilitation Act. The formula for distribution 
of funds available for reallotment is as follows: such funds 
shall be allotted to each State whose allotment is less than 
its allotment for the immediately preceding fiscal year 
increased by the percentage change in the funds available for 
allotment for all States. The amount to be provided to States 
eligible for reallotment shall be equal to the difference 
between: the amount such State received for the fiscal year, 
and the amount the State received for the immediately preceding 
fiscal year adjusted by the percent change in the funds 
available for allotment for all States. If the amount available 
for reallotment is insufficient to provide each eligible State 
the amount specified in the bill, the amount related to each 
eligible State shall be determined by the Commissioner. If 
there are funds remaining after each State eligible receives 
the amount specified by the bill, the Commissioner shall 
reallot the remaining funds among the States requesting a 
reallotment.
    Increase in Allotment. Section 417 changes the amount to be 
set aside for the American Indian Vocational Rehabilitation 
Services program in section 110(c)(2) of the Rehabilitation 
Act. Beginning in 2004, if the amount appropriated for services 
under Title I of the Rehabilitation Act exceeds the total 
appropriations for the preceding fiscal year plus 0.075 percent 
of that amount, then the amount to be set aside for American 
Indian Vocational Rehabilitation Services is to be (a) the 
total amount reserved for the preceding fiscal year 0.1 percent 
of the appropriated amount, or (b) 1.5 percent of the 
appropriated amount, whichever is less.

Section 418. Client Assistance Program

    Grants to States. Section 418 requires the Secretary of the 
Department of Education to make grants to public or private 
agencies designated by the Governor of each State, pursuant to 
section 112(c) of the Rehabilitation Act. It also specifies 
that the recipient of funds in America Samoa, Guam, the Virgin 
Islands, and the Commonwealth of the Northern Mariana Islands 
are to be designated agencies located in these territories.
    Grants to Protection and Advocacy Systems for the American 
Indian Consortium. Section 418 creates a new subparagraph (E) 
in the Rehabilitation Act so that beginning on October 1, 2004, 
for any fiscal year for which the amount appropriated exceeds 
$13,000,000, the Secretary is required to reserve funds under 
section 112 of the Rehabilitation Act for grants to the 
protection and advocacy system serving the American Indian 
Consortium for client assistance services. The amount to be 
reserved by the consortium is $45,000. American Indian 
Consortium is defined in the Developmental Disabilities 
Assistance and Bill of Rights Act of 2000. Protection and 
advocacy system is defined as in Title I of the Developmental 
Disabilities Assistance and Bill of Rights Act of 2000.
    Reservation of Funds for Training and Technical Assistance. 
Section 418 creates a new subparagraph (F) in section 112 of 
the Rehabilitation Act requiring that for any fiscal year for 
which the amount appropriated for the Client Assistance Program 
equals or exceeds $14,000,000, the Secretary is required to 
reserve at least 1.8 percent and not more than 2.2 percent for 
training and technical assistance for client assistance 
programs. These activities are to be coordinated with 
protection and advocacy activities under Title V of the 
Rehabilitation Act.
    Authorization of Appropriations for the Client Assistance 
Program. Section 418 amends section 112(g) of the 
Rehabilitation Act authorizing such sums as may be necessary 
for fiscal years 2004-2009.

Section 419. Incentive Grants

    In General. Section 419 amends Part B of Title I of the 
Rehabilitation Act by authorizing the Commissioner to make 
incentive grants to States that demonstrate a high level of 
performance, and a significantly improved level of performance 
compared to the previous reporting period(s).
    Criteria. No later than 180 days after the date of 
enactment of this provision, the Commissioner is required to 
establish criteria for making grant awards. The criteria are to 
be developed with input from State vocational rehabilitation 
agencies and other vocational rehabilitation stakeholders, 
including consumers and consumer organizations, and be based 
upon the evaluation standards and performance indicators 
established under section 106 of the Rehabilitation Act and 
other performance related measures that the Commissioner 
determines to be appropriate.
    Use of Funds. A State that receives incentive grant awards 
is required to use funds for approved State plan activities.
    Non-Federal Share. There is no Federal share required for 
incentive grants.
    Authorization of Appropriations. The bill authorizes such 
sums as may be necessary for fiscal years 2004-2009.

Section 420. Vocational Rehabilitation Services Grants

    Section 420 amends Section 121 of the Rehabilitation Act by 
adding a reference that vocational rehabilitation services 
provided are required to be consistent with individuals' 
strengths, resources, priorities, concerns, abilities, 
capabilities, interests, and informed choice, so that they may 
prepare for, and engage in, gainful employment. 121(b)(1) is 
amended by adding subparagraph (d), which requires that an 
applicant must contain certain assurances that 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 that such 
decisions will not be delegated to another agency or 
individual. Paragraph 3 is amended by requiring that 
applications that comply with regulatory requirements are to be 
effective for 5 years and must be renewed for additional 5-year 
periods if the Commissioner of Rehabilitation Services 
Administration determines that the grantee demonstrated 
acceptable past performance, and submits a plan to be approved 
by the Commissioner that identifies future performance 
criteria, goals, and objectives. Paragraph 4 adds a new 
provision requiring the Secretary to give priority to paying 
the continuation costs of existing projects and authorizing the 
Secretary to provide for increases in funding for such projects 
as necessary.

Section 421. GAO Studies

    Section 421 requires the Comptroller General of the United 
States to conduct a study on the interaction of Title I of the 
Rehabilitation Act with the Ticket to Work and Self-Sufficiency 
Program, including the impact on beneficiaries, community 
rehabilitation programs, and State vocational rehabilitation 
agencies. In conducting the study, GAO must consult with all 
participants in the Ticket to Work and Self-Sufficiency 
Program, including the Social Security Administration, the 
Rehabilitation Services Administration, ticket holders, State 
agencies, community rehabilitation programs (including 
employment networks and non-employment networks), protection 
and advocacy agencies, MAXIMUS, and organizations representing 
the interests of ticket holders. GAO is required to submit a 
report on its study to the appropriate committees of Congress, 
no later than 18 months after the date of enactment of this 
title of the bill. Additionally, section 421 requires the 
Comptroller General of the United States to conduct a study on 
the relationship between the Title I state allotment formula 
and the ability of States to provide vocational rehabilitation 
services in accordance with State plan requirements. In 
conducting the study GAO must consult with appropriate 
entities. GAO is required to submit a report on its study to 
the appropriate committees of Congress, no later than 12 months 
after the date of enactment of this title of the bill.

                   Subtitle B--Research and Training


Section 431. Authorization of Appropriations

    Authorization of Appropriations for the Client Assistance 
Program. Section 418 amends section 201(a) of the 
Rehabilitation Act to authorize such sums as may be necessary 
for fiscal years 2004-2009.

Section 432. National Institute on Disability and Rehabilitation 
        Research

    Section 432 amends section 202(f)(1) of the Rehabilitation 
Act by specifying that scientific peer review shall be 
conducted by individuals who are not Department of Education 
employees.

Section 433. Research and Covered Activities

    Section 433 amends section 204(c)(2) of the Rehabilitation 
Act by increasing the amount limitation to $750,000.

Section 434. Rehabilitation Research Advisory Council

    Section 434 amends section 205(c) of the Rehabilitation Act 
to require the Council to 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


Section 441. Training

    Types of Projects. Section 441 amends section 
302(b)(1)(B)(i) of the Rehabilitation Act by adding to the list 
of academic training projects rehabilitation for the blind or 
orientation and mobility instruction.
    Authorization of Appropriations. Section 302(i) of the 
Rehabilitation Act is amended to authorize such sums as may be 
necessary for fiscal years 2004-2009.

Section 442. Demonstration and Training Programs

    Priority for Demonstrations. Section 303(b)5)(A)(i) of the 
Rehabilitation Act stipulates that at least two special 
projects and demonstration programs for adults who are either 
low-functioning and deaf or low-functioning and hard of 
hearing.
    Demonstration Projects for Employment of Students With 
Intellectual Disabilities or Mental Illness. Section 442 
includes a new demonstration project for students with 
intellectual disabilities or mental illness under section 
303(c) of the Rehabilitation Act. Authorizes the Secretary to 
make grants to organizations to support demonstration projects 
to provide supported and competitive employment experiences for 
students with intellectual disabilities or students with mental 
illness, and training for personnel that work with these 
students to enable them to gain employment skills and 
experience that will promote effective transitions from school 
to employment and adult living. Requires that each organization 
applying for a grant, contract, or cooperative agreement must 
submit an application to the Secretary. Specifies that 
organizations that receive grants shall develop innovative and 
effective supported and competitive employment experiences that 
lead to competitive high-paying jobs, and the development and 
deployment of experts to work with transition programs 
(including personnel working with students on transition) so 
that personnel from the programs develop skills needed to train 
students in competitive employment in a range of settings, 
including office settings. Authorizes $5,000,000 to be 
appropriated for fiscal year 2004 and such sums as may be 
necessary for fiscal years 2005 through 2008.
    Demonstration Project for Employment of Individuals Who Are 
Deaf and Low-Functioning. Section 442 includes the following 
provision for a new demonstration project for adults who are 
low-functioning and deaf in section 303(d) of the 
Rehabilitation Act. Defines an ``individual who is deaf and 
low-functioning'' as an individual who has been deaf from birth 
or very early childhood, reads at or below the second grade 
level, has little or no intelligible speech, and lacks a high 
school diploma or GED, including an individual with a secondary 
disability. Requires that each organization applying for a 
grant, contract, or cooperative agreement must submit an 
application to the Secretary. Specifies that State agencies, 
other public agencies or organizations, or not-for-profit 
organizations that receive funds shall develop innovative, 
comprehensive program of instruction for deaf and low-
functioning individuals that can be implemented at multiple 
training locations through such means as distance learning and 
use of advanced technology. Requires each State agency, other 
public agencies or organizations, or not-for-profit 
organizations that receive funds shall provide annual reports 
and a final report to the Commissioner within 2 years after the 
grant is awarded. The contents of annual reports must include 
the number of individuals who are participating in the 
demonstration project, the employment and other skills being 
taught in the project, and the number of individuals who have 
dropped out of the project and the reasons for their 
terminating participation. Contents of the final report must 
include the number of individuals who participated in the 
training program, a description of the job sites in which 
individuals were placed, and a written analysis of the model 
project, including both the strengths and weaknesses of the 
project, to assist other entities in replicating the training 
program developed. Authorizes $5,000,000 to be appropriated for 
fiscal year 2004 and such sums as may be necessary for each of 
fiscal years 2005 through 2008.
    Access to Telework. Section 442 includes the following 
provisions under a new Access to Telework program in section 
303(g) of the Rehabilitation Act. Defines telework as 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. Authorizes the Commissioner 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 a telework program. States that desire to receive 
a grant fund must submit an application to the Commissioner. 
Requires States that receive grants under the Access to 
Telework fund shall establish and expand a telework program 
that shall provide loans to individuals with disabilities to 
enable them to purchase computers or other equipment. Requires 
States that receive grants under the Access to Telework fund to 
provide an annual report to the Commissioner. The contents 
shall include, among other things, characteristics of each 
individual with a disability that requires a loan or other 
alternative financing mechanism, employment status at the time 
of application, and 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. The Federal share of the cost of establishing 
a telework program is established at 10 percent of the cost.

Section 443. Migrant and Seasonal Farmworkers

    Section 443 amends section 304(b) of the Rehabilitation Act 
to authorize such sums as may be necessary for fiscal years 
2004-2009.

Section 444. Recreational Programs

    Recreational Programs. Section 444 amends section 
305(a)(1)(B) of the Rehabilitation Act to prohibit funding for 
construction of facilities for aquatic rehabilitation therapy.
    Authorization of Appropriations for Recreational Programs. 
Section 444 amends section 305(b) of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

               Subtitle D--National Council on Disability


Section 451. Authorization of Appropriations

    Section 451 amends section 405 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

                    Subtitle E--Rights and Advocacy


Section 461. Architectural and Transportation Barriers Compliance Board

    Authorization of Appropriations. Section 461 amends section 
502(j) of the Rehabilitation Act to authorize such sums as may 
be necessary for fiscal years 2004-2009.

Section 462. Protection and Advocacy of Individual Rights

    Protection and Advocacy of Individual Rights. Section 462 
amends 509(g) by allowing the eligible system to keep program 
income generated from the grant for use until expended.
    Authorization of Appropriations. Section 462 amends section 
509(l) of the Rehabilitation Act to authorize such sums as may 
be necessary for fiscal years 2004-2009.

 Subtitle F--Employment Opportunities for Individuals With Disabilities


Section 471. Projects with Industry

    Section 471 amends section 612 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

Section 472. Services for Individuals With Significant Disabilities 
        Authorization of Appropriation

    Section 472 amends section 628 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

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


Section 481. State Plan

    Section 481 amends section 704(o) of the Rehabilitation Act 
by adding a new provision to the State plan, requiring the plan 
to describe how the State will provide independent living 
services that promote full access to community life for 
individuals with significant disabilities. The services the 
State shall provide 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.

Section 482. State Independent Living Council

    Composition and Appointment. Section 705(b)(2)(C) of the 
Rehabilitation Act is amended by clarifying that at least one 
American Indian Vocational Rehabilitation Service director be 
on the Council in a State in which 1 or more projects provide 
services under section 121 of Title I of the Rehabilitation 
Act.
    Chairperson. Section 705(b)(5) of the Rehabilitation Act is 
amended by giving the Council the authority to select a 
chairperson from among the voting membership of the Council.

Section 483. Independent Living Services Appropriations

    Section 483 amends section 714 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

Section 484. Program Authorization

    Section 484 amends section 721(c) of the Rehabilitation Act 
current allotment method as follows: Defines additional 
appropriation as the amount (if any) by which the appropriation 
a fiscal year exceeds the total of (i) the amount reserved for 
training and technical assistance for FY2003 and (ii) the 
appropriation for fiscal year 2003. Appropriation is defined as 
the amount appropriated to carry out section 721 of the 
Rehabilitation Act. Base appropriation is defined as the 
portion of the appropriation for a fiscal year equal to the 
lesser of--the total appropriation minus the amount set aside 
for training and technical assistance for that or the 
appropriation for FY2003. Funds would be continued to be 
reserved for training and technical assistance (same proportion 
as current law). Any amount in excess of the FY2003 amount and 
the training and technical assistance reservation would be 
distributed in the following manner: 50 percent of the excess 
would be allocated based on a State's relative share of the 
population of all States, and the other 50 percent of the 
excess would be allocated as an equal share among each of the 
States and territories. A new provision is added that allows 
for any amount paid to an agency to operate a center for 
independent living, and any amount of program income that 
remains unobligated at the end of a FY to be available to the 
agency for obligation during the next 2 fiscal years.

Section 485. Grants to Centers for Independent Living in State in Which 
        Federal Funding Exceeds State Funding

    Section 485 amends 722(c) of the Rehabilitation Act by 
requiring the Commissioner to award grants to any eligible 
agency that has been awarded a grant under this section during 
the preceding fiscal year.

Section 486. Grants to Centers for Independent Living in State in Which 
        State Funding Exceeds Federal Funding

    Section 486 amends 723(c) of the Rehabilitation Act by 
requiring the Director of a State designated unit to award 
grants to any eligible agency that has been awarded a grant 
under this section during the preceding fiscal year.

Section 487. Standards and Assurances for Centers for Independent 
        Living

    Section 487 amends 725(b)(8) of the Rehabilitation Act by 
adding a provision requiring independent living centers (ILCs) 
to provide independent living services that promote full access 
to community life for individuals with significant 
disabilities. The services that ILCs shall provide 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.

Section 488. Centers for Independent Living Authorization of 
        Appropriations

    Section 488 amends section 727 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

Section 489. Independent Living Services for Older Individuals Who Are 
        Blind

    Section 489 amends 752(a) of the Rehabilitation Act by 
adding a new provision for training and technical assistance. 
The new provision requires the Commissioner to set aside an 
amount not less than 1.8 percent and not more than 2 percent, 
of the excess appropriation, in any fiscal year in which the 
funds appropriated exceed the funds appropriated in FY2003 to 
carry out training and other technical assistance programs 
under this section. Requires the Commissioner to 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 and to provide 
training and technical assistance with respect to planning, 
developing, conducting, administering, and evaluating 
independent living programs for older individuals who are 
blind. Requires the Commissioner to 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. Requires an eligible entity to 
submit an application to the Commissioner containing a proposal 
to provide training and technical assistance, and additional 
information as the Commissioner may require in order to be 
eligible to receive a grant or enter into a contract or other 
arrangement under this section. Prohibits funds reserved by the 
Commissioner under this section to 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.

Section 490. Program of Grants

    Certain Expenditures of Grants. Section 490 amends section 
489(g) of the Rehabilitation Act by allowing States to expend 
funds either through grants or contracts.
    Requirements Regarding State Plan. Section 752(h) is 
deleted, thereby removing references to the State plan for 
independent living in Chapter 1.
    Amount of Formula Grant. Section 490 amends section 
752(j)(2)(A) of the Rehabilitation Act by increasing the 
minimum allotment for a fiscal year for States from $225,000 to 
$350,000.
    Amount of Formula Grant. Section 490 amends section 
752(j)(2)(B) of the Rehabilitation Act by increasing the 
minimum allotment for a fiscal year for territories from 
$40,000 to $60,000.

Section 491. Independent Living Services for Older Individuals Who Are 
        Blind Authorization of Appropriations

    Section 491 amends section 753 of the Rehabilitation Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.

                       Subtitle H--Miscellaneous


Section 495. Helen Keller National Center Act

    General Authorization of Appropriations. Section 495 amends 
section 205(a) of the Helen Keller National Center Act to 
authorize such sums as may be necessary for fiscal years 2004-
2009.
    Helen Keller National Center Federal Endowment Fund. 
Section 495 amends section 208(h) of the Helen Keller National 
Center Act to authorize such sums as may be necessary for 
fiscal years 2004-2009.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

WORKFORCE INVESTMENT ACT OF 1998

           *       *       *       *       *       *       *



SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

                  TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

Sec. 101. Definitions.

      Subtitle B--Statewide and Local Workforce Investment Systems

[Sec. 106. Purpose.]
Sec. 106. Purposes.
     * * * * * * *

          Chapter 3--Workforce Investment Activities Providers

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

                      Subtitle D--National Programs

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

                       Subtitle E--Administration

     * * * * * * *
[Sec. 193. Use of certain real property.]
Sec. 193. Transfer of Federal equity in State employment security agency 
          real property to the States.
Sec. 194. Continuation of State activities and policies.
Sec. 195. General program requirements.

                 TITLE II--ADULT EDUCATION AND LITERACY

     * * * * * * *

            Subtitle A--Adult Education and Literacy Programs

     * * * * * * *

                      Chapter 4--General Provisions

Sec. 241. Administrative provisions.
Sec. 242. National Institute for Literacy.
Sec. 243. National leadership activities.
Sec. 244. Integrated English literacy and civics education.
     * * * * * * *

                 TITLE I--WORKFORCE INVESTMENT SYSTEMS

              Subtitle A--Workforce Investment Definitions

SEC. 101. DEFINITIONS.

    In this title:
          (1) Accrued expenditures.--The term ``accrued 
        expenditures'' means charges incurred by recipients of 
        funds under this title for a given period requiring the 
        provision of funds for--
                  (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.
          [(1)] (2) Adult.--[Except in sections 127 and 132,] 
        Except in section 132, the term ``adult'' means an 
        individual who is age 18 or older.
          [(2)] (3) Adult education; adult education and 
        literacy activities.--The terms ``adult education'' and 
        ``adult education and literacy activities'' have the 
        meanings given the terms in section 203.
          [(3)] (4) Area vocational education school.--The term 
        ``area vocational education school'' has the meaning 
        given the term in section 3 of the Carl D. Perkins 
        Vocational and Technical Education Act of 1998.
          [(4) Basic skills deficient.--The term ``basic skills 
        deficient'' means, with respect to an individual, that 
        the individual has English reading, writing, or 
        computing skills at or below the 8th grade level on a 
        generally accepted standardized test or a comparable 
        score on a criterion-referenced test.]
          (5) Basic skills deficient.--The term ``basic skills 
        deficient'' means, with respect to an individual, that 
        the individual--
                  (A) has English reading, writing, or 
                computing skills at or below the 8th grade 
                level on a generally accepted standardized test 
                or a comparable score on a criterion-referenced 
                test; or
                  (B) is unable to compute or solve problems, 
                read, write, or speak English at a level 
                necessary to function on the job, in the 
                individual's family, or in society.
          (6) Business intermediary.--The term ``business 
        intermediary'' means an entity that brings together 
        various stakeholders with an expertise in an industry 
        or business sector.
          [(5)] (7) Case management.--The term ``case 
        management'' means the provision of a client-centered 
        approach in the delivery of services, designed--
                  (A) to prepare and coordinate comprehensive 
                employment plans, such as service strategies, 
                for participants to ensure access to necessary 
                workforce investment activities and supportive 
                services, using, where feasible, computer-based 
                technologies; and
                  (B) to provide job and career counseling 
                during participation and after job placement.
          [(6)] (8) Chief elected official.--The term ``chief 
        elected official'' means--
                  (A) the chief elected executive officer of a 
                unit of general local government in a local 
                area; and
                  (B) in a case in which a local area includes 
                more than one unit of general local government, 
                the individuals designated under the agreement 
                described in section 117(c)(1)(B).
          [(7)] (9) Community-based organization.--The term 
        ``community-based organization'' means a private 
        nonprofit organization, including a faith-based 
        organization, that is representative of a community or 
        a significant segment of a community and that has 
        demonstrated expertise and effectiveness in the field 
        of workforce investment.
          [(8)] (10) Customized training.--The term 
        ``customized training'' means training--
                  (A) that is designed to meet the special 
                requirements of an employer (including a group 
                of employers);
                  (B) that is conducted with a commitment by 
                the employer to employ an individual on 
                successful completion of the training; and
                  (C) for which the employer pays [for not less 
                than 50 percent of the cost of the training.] 
                for--
                          (i) 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) for customized training (as 
                        defined in subparagraphs (A) and (B)) 
                        with an employer in multiple local 
                        areas in 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 to be appropriate.
          [(9)] (11) Dislocated worker.--The term ``dislocated 
        worker'' means an individual who--
                  (A)(i) has been terminated or laid off, or 
                who has received a notice of termination or 
                layoff, from employment;
                  (ii)(I) is eligible for or has exhausted 
                entitlement to unemployment compensation; or
                  (II) has been employed for a duration 
                sufficient to demonstrate, to the appropriate 
                entity at a one-stop center referred to in 
                [section 134(c)] section 121(e), attachment to 
                the workforce, but is not eligible for 
                unemployment compensation due to insufficient 
                earnings or having performed services for an 
                employer that were not covered under a State 
                unemployment compensation law; and
                  (iii) is unlikely to return to a previous 
                industry or occupation;
                  (B)(i) * * *
                  (ii) * * *
                  (iii) * * *
                  (C) was self-employed (including employment 
                as a farmer, a rancher, or a fisherman) but is 
                unemployed as a result of general economic 
                conditions in the community in which the 
                individual resides or because of natural 
                disasters; [or]
                  (D) is a displaced homemaker[.]; or
                  (E)(i) is the spouse of a member of the Armed 
                Forces on active duty for a period of more than 
                30 days (as defined in section 101(d)(2) of 
                title 10, United States Code) who has 
                experienced a loss of employment as a direct 
                result of relocation to accommodate a permanent 
                change in duty station of such member; or
                  (ii) is the spouse of a member of the Armed 
                Forces on active duty who meets the criteria 
                described in paragraph (12)(B).
          [(10)] (12) Displaced homemaker.--The term 
        ``displaced homemaker'' means an individual who has 
        been providing unpaid services to family members in the 
        home and who--
                  [(A)] (A)(i) has been dependent on the income 
                of another family member but is no longer 
                supported by that income; [and] or
                  (ii) is the dependent spouse of a member of 
                the Armed Forces on active duty for a period of 
                more than 30 days (as defined in section 
                101(d)(2) of title 10, United States Code) 
                whose family income is significantly reduced 
                because of a deployment (as defined in section 
                991(b) of title 10, United States Code, or 
                pursuant to paragraph (4) of such section), a 
                call or order to active duty pursuant to a 
                provision of law referred to in section 
                101(a)(13)(B) of title 10, United States Code, 
                a permanent change of station, or the service-
                connected (as defined in section 101(16) of 
                title 38, United States Code) death or 
                disability of the member; and
                  (B) is unemployed or underemployed and is 
                experiencing difficulty in obtaining or 
                upgrading employment.
          [(11)] (13) Economic development agencies.--The term 
        ``economic development agencies'' includes local 
        planning and zoning commissions or boards, community 
        development agencies, and other local agencies and 
        institutions responsible for regulating, promoting, or 
        assisting in local economic development.
          [(12)] (14) Eligible provider.--The term ``eligible 
        provider'', used with respect to--
                  (A) training services, means a provider who 
                is identified in accordance with [section 
                122(e)(3)] section 122;
                  (B) * * *
                  (C) * * *
                  (D) * * *
          [(13)] (15) Eligible youth.--Except as provided in 
        subtitles C and D, the term ``eligible youth'' means an 
        individual who--
                  (A) * * *
                  (B) * * *
                  (C) * * *
          [(14)] (16) Employment and training activity.--The 
        term ``employment and training activity'' means an 
        activity described in section 134 that is carried out 
        for an adult or dislocated worker.
          [(15)] (17) Family.--The term ``family'' means two or 
        more persons related by blood, marriage, or decree of 
        court, who are living in a single residence, and are 
        included in one or more of the following categories:
                  (A) A husband, wife, and dependent children.
                  (B) A parent or guardian and dependent 
                children.
                  (C) A husband and wife.
          [(16)] (18) Governor.--The term ``Governor'' means 
        the chief executive of a State.
          (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.
          [(17)] (20) Individual with a disability.--
                  (A) * * *
                  (B) * * *
          (21) Integrated training program.--The term 
        ``integrated training program'' means a program that 
        combines occupational skills training with English 
        language acquisition.
          (22) Institution of higher education.--The term 
        institution of higher education has the meaning given 
        the term in section 101(a), and subparagraphs (A) and 
        (B) of section 102(a)(1), of the Higher Education Act 
        of 1965 (20 U.S.C. 1001(a), 1002(a)(1)).
          [(18)] (23) Labor market area.--The term ``labor 
        market area'' means an economically integrated 
        geographic area within which individuals can reside and 
        find employment within reasonable distance or can 
        readily change employment without changing their place 
        of residence. Such an area shall be identified in 
        accordance with criteria used by the Bureau of Labor 
        Statistics of the Department of Labor in defining such 
        areas or similar criteria established by a Governor.
          [(19)] (24) Literacy.--The term ``literacy'' has the 
        meaning given the term in section 203.
          [(20)] (25) Local area.--The term ``local area'' 
        means a local workforce investment area designated 
        under section 116.
          [(21)] (26) Local board.--The term ``local board'' 
        means a local workforce investment board established 
        under section 117.
          [(22)] (27) Local performance measure.--The term 
        ``local performance measure'' means a performance 
        measure established under section 136(c).
          [(23)] (28) Local educational agency.--The term 
        ``local educational agency'' has the meaning given the 
        term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.
          [(24)] (29) Lower living standard income level.--The 
        term ``lower living standard income level'' means that 
        income level (adjusted for regional, metropolitan, 
        urban, and rural differences and family size) 
        determined annually by the Secretary based on the most 
        recent lower living family budget issued by the 
        Secretary.
          [(25)] (30) Low-income individual.--The term ``low-
        income individual'' means an individual who--
                  (A) * * *
                  (B) * * *
                  (C) * * *
                  (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.);
                  [(D)] (E) qualifies as a homeless individual, 
                as defined in subsections (a) and (c) of 
                section 103 of the Stewart B. McKinney 
                Homelessness Assistance Act (42 U.S.C. 11302);
                  [(E)] (F) is a foster child on behalf of whom 
                State or local government payments are made; or
                  [(F)] (G) in cases permitted by regulations 
                promulgated by the Secretary of Labor, is an 
                individual with a disability whose own income 
                meets the requirements of a program described 
                in subparagraph (A) or of subparagraph (B), but 
                who is a member of a family whose income does 
                not meet such requirements.
          [(26)] (31) Nontraditional employment.--The term 
        ``nontraditional employment'' refers to occupations or 
        fields of work for which individuals from one gender 
        comprise less than 25 percent of the individuals 
        employed in each such occupation or field of work.
          [(27)] (32) Offender.--The term ``offender'' means 
        any adult or juvenile--
                  (A) who is or has been subject to any stage 
                of the criminal justice process, for whom 
                services under this Act may be beneficial; or
                  (B) who requires assistance in overcoming 
                artificial barriers to employment resulting 
                from a record of arrest or conviction.
          [(28)] (33) Older individual.--The term ``older 
        individual'' means an individual age 55 or older.
          [(29)] (34) One-stop operator.--The term ``one-stop 
        operator'' means 1 or more entities designated or 
        certified under section 121(d).
          [(30)] (35) One-stop partner.--The term ``one-stop 
        partner'' means--
                  (A) an entity described in section 121(b)(1), 
                subject to section 121(b)(1)(C); and
                  (B) an entity described in section 121(b)(2) 
                that is participating, with the approval of the 
                local board and chief elected official, in the 
                operation of a one stop delivery system.
          [(31)] (36) On-the-job-training.--The term ``on-the-
        job training'' by an employer that is provided to a 
        paid participant while engaged in productive work in a 
        job that--
                  (A) * * *
                  (B) * * *
                  (C) * * *
          [(32)] (37) Outlying area.--The term ``outlying 
        area'' means the United States Virgin Islands, Guam, 
        American Samoa, the Commonwealth of the Northern 
        Mariana Islands, the Republic of the Marshall Islands, 
        the Federated States of Micronesia, and the Republic of 
        Palau.
          [(33) Out-of-school youth.--The term ``out-of-school 
        youth'' means--
                  [(A) an eligible youth who is a school 
                dropout; or
                  [(B) an eligible youth who has received a 
                secondary school diploma or its equivalent but 
                is basic skills deficient, unemployed, or 
                underemployed.]
          (38) Out-of-school youth.--The term ``out-of-school 
        youth'' means an out-of-school youth as defined in 
        section 129(a)(1)(B).
          [(34)] (39) Participant.--The term ``participant'' 
        means an individual who has been determined to be 
        eligible to participate in and who is receiving 
        services (except followup services authorized under 
        this title) under a program authorized by this title. 
        Participation shall be deemed to commence on the first 
        day, following determination of eligibility, on which 
        the individual began receiving subsidized employment, 
        training, or other services provided under this title.
          [(35)] (40) Postsecondary educational institution.--
        The term ``postsecondary educational institution'' 
        means an institution of higher education, as defined in 
        section 102 of the Higher Education Act of 1965.
          [(36)] (41) Poverty line.--The term ``poverty line'' 
        means the poverty line (as defined by the Office of 
        Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902)) applicable 
        to a family of the size involved.
          [(37)] (42) Public assistance.--The term ``public 
        assistance'' means Federal, State, or local government 
        cash payments for which eligibility is determined by a 
        needs or income test.
          [(38)] (43) Rapid response activity.--* * *

           *       *       *       *       *       *       *

          [(39)] (44) School dropout.--The term ``school 
        dropout'' means an individual who is no longer 
        attending any school and who has not received a 
        secondary school diploma or its recognized equivalent.
          [(40)] (45) Secondary school.--The term ``secondary 
        school'' has the meaning given the term in section 9101 
        of the Elementary and Secondary Education Act of 1965.
          [(41)] (46) Secretary.--The term ``Secretary'' means 
        the Secretary of Labor[, and the term means such 
        Secretary for purposes of section 503].
          (47) Self-sufficiency.--The term ``self-sufficiency'' 
        means self-sufficiency within the meaning of 
        subsections (a)(3)(A)(x) and (e)(1)(A)(xii) of section 
        134.
          [(42)] (48) State.--The term ``State'' means each of 
        the several States of the United States, the District 
        of Columbia, and the Commonwealth of Puerto Rico.
          [(43)] (49) State adjusted level of performance.--The 
        term ``State adjusted level of performance'' means a 
        level described in [clause (iii) or (v) of section 
        136(b)(3)(A)] section 136(b)(3)(A)(iii).
          [(44)] (50) State board.--The term ``State board'' 
        means a State workforce investment board established 
        under section 111.
          [(45)] (51) State performance measure.--The term 
        ``State performance measure'' means a performance 
        measure established under section 136(b).
          [(46)] (52) Supportive services.--The term 
        ``supportive services'' means services such as 
        transportation, child care, dependent care, housing, 
        and needs-related payments, that are necessary to 
        enable an individual to participate in activities 
        authorized under this title, consistent with the 
        provisions of this title.
          [(47)] (53) Unemployed individual.--The term 
        ``unemployed individual'' means an individual who is 
        without a job and who wants and is available for work. 
        The determination of whether an individual is without a 
        job shall be made in accordance with the criteria used 
        by the Bureau of Labor Statistics of the Department of 
        Labor in defining individuals as unemployed.
          [(48)] (54) Unit of general local government.--The 
        term ``unit of general government'' means any general 
        purpose political subdivision of a State that has the 
        power to levy taxes and spend funds, as well as general 
        corporate and police powers.
          [(49)] (55) Veteran; related definition.--
                  (A) Veteran.--The term ``veteran'' means an 
                individual who served in the active military, 
                naval, or air service, and who was discharged 
                or released from such service under conditions 
                other than dishonorable.
                  (B) Recently separated veteran.--The term 
                ``recently separated veteran'' means any 
                veteran who applies for participation under 
                this title within 48 months after the discharge 
                or release from active military, naval, or air 
                service.
          [(50)] (56) Vocational education.--The term 
        ``vocational education'' has the meaning given the term 
        in section 521 of the Carl D. Perkins Vocational and 
        Applied Technology Education Act (20 U.S.C. 2471).
          [(51)] (57) Workforce investment activity.--The term 
        ``workforce investment activity'' means an employment 
        and training activity and a youth activity.
          [(52)] (58) Youth activity.--The term ``youth 
        activity'' means an activity described in section 129 
        that is carried out for eligible youth [(or as 
        described in section 129(c)(5)] (or as described in 
        section 129(a)(2)).
          [(53)] (59) Youth council.--The term ``youth 
        council'' means a council [established under section 
        117(h)] that may be established under section 
        117(h)(2).

           *       *       *       *       *       *       *


      Subtitle B--Statewide and Local Workforce Investment Systems

[SEC. 106. PURPOSE.

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

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.

           *       *       *       *       *       *       *


                      CHAPTER 1--STATE PROVISIONS


SEC. 111. STATE WORKFORCE INVESTMENT BOARDS.

    (a) In General.--The Governor of a State shall establish a 
State workforce investment board to assist in the development 
of the State plan described in section 112 and to carry out the 
other functions described in subsection (d).
    (b) Membership.--
          (1) In general.--The State Board shall include--
                  (A) the Governor;
                  (B) 2 members of each chamber of the State 
                legislature, appointed by the appropriate 
                presiding officers of each such chamber; and
                  [(C) representatives appointed by the 
                Governor, who are--
                          [(i) representatives of business in 
                        the State, who--
                                 [(I) are owners of businesses, 
                                chief executives or operating 
                                officers of businesses, and 
                                other business executives or 
                                employers with optimum policy-
                                making or hiring authority, 
                                including members of local 
                                boards described in section 
                                117(b)(2)(A)(i);
                                  [(II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the State; and
                                  [(III) are appointed from 
                                among individuals nominated by 
                                State business organizations 
                                and business trade 
                                associations;
                          [(ii) chief elected officials 
                        (representing both cities and counties, 
                        where appropriate);
                          [(iii) representatives of labor 
                        organizations, who have been nominated 
                        by State labor federations;
                          [(iv) representatives of individuals 
                        and organizations that have experience 
                        with respect to youth activities;
                          [(v) representatives of individuals 
                        and organizations that have experience 
                        and expertise in the delivery of 
                        workforce investment activities, 
                        including chief executive officers of 
                        community colleges and community-based 
                        organizations within the State;
                          [(vi)(I) the lead State agency 
                        officials with responsibility for the 
                        programs and activities that are 
                        described in section 121(b) and carried 
                        out by one-stop partners; and
                          [(II) in any case in which no lead 
                        State agency official has 
                        responsibility for such a program, 
                        service, or activity, a representative 
                        in the State with expertise relating to 
                        such program, service, or activity; and
                          [(vii) such other representatives and 
                        State agency officials as the Governor 
                        may designate, such as the State agency 
                        officials responsible for economic 
                        development and juvenile justice 
                        programs in the State.]
                  (C) representatives appointed by the 
                Governor, who--
                          (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 director 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 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) are chief elected officials 
                        (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.
          (2) Authority and regional representation of board 
        members.--Members of the board that represent 
        organizations, agencies, or other entities shall be 
        individuals with optimum policymaking authority within 
        the organizations, agencies, or entities. The members 
        of the board shall represent diverse regions of the 
        State, including urban, rural, and suburban areas.
          (3) Majority.--A majority of the members of the State 
        Board shall be representatives described in [paragraph 
        (1)(C)(i)] paragraph (1)(C)(iii).
    (c) Chairperson.--The Governor shall select a chairperson 
for the State Board from among the representatives described in 
[subsection (b)(1)(C)(i)] subsection (b)(1)(C)(iii).
    (d) Functions.--The State Board shall assist the Governor 
in--
          (1) [development] development, implementation, and 
        revision of the State plan;
          (2) development and continuous improvement of a 
        statewide system of activities that are funded under 
        this subtitle or carried out through a one-stop 
        delivery system described in [section 134(c)] section 
        121(e) that receives funds under this subtitle 
        (referred to in this title as a ``statewide workforce 
        investment system''), including--
                  (A) development of linkages in order to 
                assure coordination and nonduplication among 
                the programs and activities described in 
                section 121(b); and
                  (B) review of local plans;
          [(3) commenting at least once annually on the 
        measures taken pursuant to section 113(b)(14) of the 
        Carl D. Perkins Vocational and Applied Technology 
        Education Act (20 U.S.C. 2323(b)(14));]
          (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 11 of this 
        Act;
          (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 criteria and 
                procedures 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) conduct of such other matters as may 
                promote statewide objectives for, and enhance 
                the performance of, the one-stop delivery 
                systems;
          [(4)] (5) designation of local areas as required in 
        section 116 and the development of statewide criteria 
        to be used by chief elected officials for the 
        appointment of local boards consistent with section 
        117;
          [(5)] (6) development of allocation formulas for the 
        distribution of funds for adult employment and training 
        activities and youth activities to local areas as 
        permitted under [sections 128(b)(3)(B) and 
        133(b)(3)(B)] sections 128(b)(3) and 133(b)(3)(B);
          [(6)] (7) development and continuous improvement of 
        comprehensive State performance measures, including 
        State adjusted levels of performance, to assess the 
        effectiveness of the workforce investment activities in 
        the State as required under section 136(b);
          [(7)] (8) preparation of the annual report to the 
        Secretary described in section 136(d);
          [(8)] (9) development of the statewide employment 
        statistics system described in section 15(e) of the 
        Wagner-Peyser Act; [and]
          [(9)] (10) development of an application for an 
        incentive grant under [section 503.] section 136(i)(1); 
        and
          (11) increasing the availability of skills training, 
        employment opportunities, and career advancement, for 
        hard-to-serve populations.
    (e) Alternative Entity.--
          (1) In general.--[For] Subject to paragraph (3), for 
        purposes of complying with subsections (a), (b), and 
        (c), a State may use any State entity (including a 
        State council, State workforce development board, 
        combination of regional workforce development boards, 
        or similar entity) that--
                  (A) * * *

           *       *       *       *       *       *       *

          (2) References.--References in this Act to a State 
        board shall be considered to include such an entity.

           *       *       *       *       *       *       *

          [(10) information identifying how the State will use 
        funds the State receives under this subtitle to 
        leverage other Federal, State, local, and private 
        resources, in order to maximize the effectiveness of 
        such resources, and to expand the participation of 
        business, employees, and individuals in the statewide 
        workforce investment system;]
          (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;

           *       *       *       *       *       *       *

          (12)(A) a description of the methods and factors the 
        State will use in distributing funds to local areas for 
        youth activities and adult employment and training 
        activities under [sections 128(b)(3)(B) and 
        133(b)(3)(B)] sections 128(b)(3) and 133(b)(3)(B), 
        including--

           *       *       *       *       *       *       *

          (8)(A) a description of the procedures that will be 
        taken by the State to assure coordination of and avoid 
        duplication among--
                  (i) workforce investment activities 
                authorized under this title;

           *       *       *       *       *       *       *

                  (ix) employment and training activities 
                carried out by the Department of Housing and 
                Urban Development; [and]
                  (x) programs authorized under State 
                unemployment compensation laws (in accordance 
                with applicable Federal law); and
                  (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

           *       *       *       *       *       *       *


SEC. 112. STATE PLAN.

    (a) In General.--For a State to be eligible to receive an 
allotment under section 127 or 132, or to receive financial 
assistance under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), 
the Governor of the State shall submit to the Secretary for 
consideration by the Secretary, a single State plan (referred 
to in this title as the ``State plan'') that outlines a [5-year 
strategy] 4-year strategy for the statewide workforce 
investment system of the State and that meets the requirements 
of section 111 and this section.
    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 specification of the levels of 
performance under sections 136 for the third and fourth years 
of the plan.
    (b) Contents.--The State plan shall include--
          (1) a description of the State board, including a 
        description of the manner in which such board 
        collaborated in the development of the State plan and a 
        description of how the board will continue to 
        collaborate in carrying out the functions described in 
        section 111(d);

           *       *       *       *       *       *       *

          (3) Failure to meet performance measures.--If a State 
        fails to have performed successfully, as defined in 
        section 116(a)(2), 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).

           *       *       *       *       *       *       *

    (f) Conflict of Interest.--A member of a State board may 
not--
          (1) vote on a matter under consideration by the State 
        board--
                  (A) regarding the provision of services by 
                such member (or by an entity that such member 
                represents); or
                  (B) that would provide direct financial 
                benefit to such member or the immediate family 
                of such member; or
          (2) engage in any other activity determined by the 
        Governor to constitute a conflict of interest as 
        specified in the State plan.
    (g) Sunshine Provision.--The State board shall make 
available to the public, on a regular basis through open 
meetings, information regarding the activities of the State 
board, including information regarding the State plan, and 
modifications to the State plan, prior to submission of the 
plan, and modifications to the State plan, information 
regarding membership, and, on request, minutes of formal 
meetings of the State board.
    (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 sections 
127(b)(1)(C) and 132(b).

           *       *       *       *       *       *       *

          (14) with respect to the one-stop delivery systems 
        described, in [section 134(c)] section 121(e) (referred 
        to individually in this title as a ``one-shop delivery 
        system''), a description of the strategy of the State 
        for assisting local areas in development and 
        implementation of fully operational one-stop delivery 
        systems in the State;
          (15) a description of the appeals process referred to 
        in section 116(a)(5);
          (16) a description of the competitive process to be 
        used by the State to award grants and contracts in the 
        State for activities carried out under this title;
          (17) with respect to the employment and training 
        activities authorized in section 134--
                  (A) a description of--
                          (i) the employment and training 
                        activities that will be carried out 
                        with the funds received by the State 
                        through the allotment made under 
                        section 132;
                          (ii) how the State will provide rapid 
                        response activities to dislocated 
                        workers from funds reserved under 
                        section 133(a)(2) for such purposes, 
                        including the designation of an 
                        identifiable State rapid response 
                        dislocated worker unit to carry out 
                        statewide rapid response activities;
                          (iii) the procedures the local boards 
                        in the State will use to identify 
                        eligible providers of training services 
                        described in section 134(d)(4) (other 
                        than on-the-job training or local 
                        customized training), as required under 
                        section 122; [and]
                          (iv) how the State will serve the 
                        employment and training needs of 
                        dislocated workers [(including 
                        displaced homemakers), low-income 
                        individuals (including recipients of 
                        public assistance), individuals 
                        training for nontraditional employment, 
                        and other individuals with multiple 
                        barriers to employment (including older 
                        individuals and individuals with 
                        disabilities], hard-to-serve 
                        populations and individuals training 
                        for nontraditional employment; and
                          (v) how the State will serve the 
                        employment and training needs of 
                        individuals with disabilities, 
                        consistent with section 188 and 
                        Executive Order 13217 (42 U.S.C. 12131 
                        note; relating to community-based 
                        alternatives for individuals with 
                        disabilities), including the provision 
                        of outreach, intake, the conduct of 
                        assessments, service delivery, the 
                        development of adjustments to 
                        performance measures established under 
                        section 136, and the training of staff; 
                        and
                  (B) an assurance that veterans will be 
                afforded the employment and training activities 
                by the State, to the extent practicable; [and]
          (18) with respect to youth activities authorized in 
        section 129, information--
                  (A) describing the State strategy for 
                providing comprehensive services to eligible 
                youth, particularly those eligible youth who 
                are recognized as having significant barriers 
                to employment;

           *       *       *       *       *       *       *

                  (D) describing how the State will coordinate 
                youth activities described in subparagraph (C) 
                with activities carried out through [youth 
                opportunity grants] youth challenge grants 
                authorized under section 169 and other 
                federally funded youth programs under section 
                169[.];
          (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 to be provided for ensuring regional 
        cooperation within the State and across State borders 
        as appropriate;
          (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 investment 
                activities and make the statewide workforce 
                investment system more relevant to the needs of 
                State and local businesses, consistent with the 
                objectives of this title; and
                  (B) provide incentives and technical 
                assistance to assist local areas in more fully 
                engaging all employers, including small 
                employers, in local workforce investment 
                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--
                  (A) for ensuring cooperation between 
                transportation providers, including public 
                transportation providers, and providers of 
                workforce investment activities; and
                  (B) for ensuring coordination among 
                appropriate State agencies and programs to make 
                available skills training, employment services 
                and opportunities, and career advancement 
                activities, that will assist ex-offenders in 
                reentering the workforce;
          (24) a description of how the State will assist local 
        areas in assuring physical and programmatic 
        accessibility 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, objective 
                criteria and procedures 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 as described in 
                section 121(g); and
                  (C) determine--
                          (i) one-stop partner program 
                        contributions for 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;
          (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; and
          (27) a description of the technical assistance 
        available to one-stop operators and providers of 
        training services for strategies to serve hard-to-serve 
        populations and promote placement in nontraditional 
        employment.
    (c) Plan Submission and Approval.--* * *

           *       *       *       *       *       *       *

    (d) Modifications to Plan.--A State may submit 
modifications to a State plan in accordance with the 
requirements of this section and section 111 as necessary 
during the [5-year period] 4-year period covered by the plan.
    In addition, the State shall submit the modifications to 
the State plan required under subsection (a), under 
circumstances prescribed by the Secretary that are due to 
changes in Federal law that significantly affect elements of 
the State plan.

           *       *       *       *       *       *       *


                      CHAPTER 2--LOCAL PROVISIONS


SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS.

    (a) Designation of Areas.--
          (1) In general.--
                  (A) Process.--Except as provided in 
                subsection (b), and consistent with paragraphs 
                (2), (3), and (4), in order for a State to 
                receive an allotment under section 127 or 132, 
                the Governor of the State shall designate local 
                workforce investment areas within the State--
                          (i) through consultation with the 
                        State board; and
                          (ii) after consultation with chief 
                        elected officials and after 
                        consideration of comments received 
                        through the public comment process as 
                        described in section 112(b)(9).
                  (B) Considerations.--In making the 
                designation of local areas, the Governor shall 
                take into consideration the following:
                          (i) Geographic areas served by local 
                        educational agencies and intermediate 
                        educational agencies.
                          (ii) Geographic areas served by 
                        postsecondary educational institutions 
                        and area vocational education schools.
                          (iii) The extent to which such local 
                        areas are consistent with labor market 
                        areas.
                          (iv) The distance that individuals 
                        will need to travel to receive services 
                        provided in such local areas.
                          (v) The resources of such local areas 
                        that are available to effectively 
                        administer the activities carried out 
                        under this subtitle.
                          (vi) The extent to which such local 
                        areas will promote maximum 
                        effectiveness in the administration and 
                        provision of services.
          [(2) Automatic designation.--The Governor shall 
        approve any request for designation as a local area--
                  [(A) from any unit of general local 
                government with a population of 500,000 or 
                more;
                  [(B) of the area served by a rural 
                concentrated employment program grant recipient 
                of demonstrated effectiveness that served as a 
                service delivery area or substate area under 
                the Job Training Partnership Act, if the grant 
                recipient has submitted the request; and
                  [(C) of an area that served as a service 
                delivery area under section 101(a)(4)(A)(ii) of 
                the Job Training Partnership Act (as in effect 
                on the day before the date of enactment of this 
                Act) in a State that has a population of not 
                more than 1,100,000 and a population density 
                greater than 900 persons per square mile.]
          (2) Automatic designation.--
                  (A) In general.--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;
                          (iii) is served by a rural 
                        concentrated employment program grant 
                        recipient, except that after the 
                        initial 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 for such area if such area--
                                  (I) performed successfully; 
                                and
                                  (II) sustained fiscal 
                                integrity; or
                          (iv) was a local area under section 
                        116(a)(2)(C) (as in effect on the day 
                        before the date of enactment of the 
                        Workforce Investment Act Amendments of 
                        2003), except that after the initial 2-
                        year period following such designation 
                        pursuant to this clause that occurs 
                        after that date of enactment, the 
                        Governor shall only be required to 
                        approve a request for designation under 
                        this clause for such area if such 
                        area--
                                  (I) performed successfully; 
                                and
                                  (II) sustained fiscal 
                                integrity.
                  (B) Definitions.--For purposes of this 
                paragraph:
                          (i) Performed successfully.--The term 
                        ``performed successfully'', when used 
                        with respect to a local area, means the 
                        local area performed at 80 percent or 
                        more of the adjusted level of 
                        performance for core indicators of 
                        performance described in section 
                        136(b)(2)(A) for 2 consecutive years.
                          (ii) Sustained fiscal integrity.--The 
                        term ``sustained fiscal integrity'', 
                        used with respect to an area, 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) Temporary and subsequent designation.--
                  [(A) Criteria.--Notwithstanding paragraph 
                (2)(A), the Governor shall approve any request, 
                made not later than the date of submission of 
                the initial State plan under this subtitle, for 
                temporary designation as a local area from any 
                unit of general local government (including a 
                combination of such units) with a population of 
                200,000 or more that was a service delivery 
                area under the Job Training Partnership Act on 
                the day before the date of enactment of this 
                Act if the Governor determines that the area--
                          [(i) performed successfully, in each 
                        of the last 2 years prior to the 
                        request for which data are available, 
                        in the delivery of services to 
                        participants under part A of title II 
                        and title III of the Job Training 
                        Partnership Act (as in effect on such 
                        day); and
                          [(ii) has sustained the fiscal 
                        integrity of the funds used by the area 
                        to carry out activities under such part 
                        and title.
                  [(B) Duration and subsequent designation.--A 
                temporary designation under this paragraph 
                shall be for a period of not more than 2 years, 
                after which the designation shall be extended 
                until the end of the period covered by the 
                State plan if the Governor determines that, 
                during the temporary designation period, the 
                area substantially met (as defined by the State 
                board) the local performance measures for the 
                local area and sustained the fiscal integrity 
                of the funds used by the area to carry out 
                activities and under this subtitle.
                  [(C) Technical assistance.--The Secretary 
                shall provide the States with technical 
                assistance in making the determinations 
                required by this paragraph. The Secretary shall 
                not issue regulations governing determinations 
                to be made under this paragraph.
                  [(D) Performed successfully.--In this 
                paragraph, the term ``performed successfully'' 
                means that the area involved met or exceeded 
                the performance standards for activities 
                administered in the area that--
                          [(i) are established by the Secretary 
                        for each year and modified by the 
                        adjustment methodology of the State 
                        (used to account for differences in 
                        economic condition, participant 
                        characteristics, and combination of 
                        services provided from the combination 
                        assumed for purposes of the established 
                        standards of the Secretary); and
                          [(ii)(I) if the area was designated 
                        as both a service delivery area and a 
                        substate area under the Job Training 
                        Partnership Act (as in effect on the 
                        day before the date of enactment of 
                        this Act)--
                                  [(aa) relate to job retention 
                                and earnings, with respect to 
                                activities carried out under 
                                part A of title II of such Act 
                                (as in effect on such day); and
                                  [(bb) relate to entry into 
                                employment, with respect to 
                                activities carried out under 
                                title III of such Act (as in 
                                effect on such day);
                          [(II) if the area was designated only 
                        as a service delivery area under such 
                        Act (as in effect on such day), relate 
                        to the standards described in subclause 
                        (I)(aa); or
                          [(III) if the area was only 
                        designated as a substate area under 
                        such Act (as in effect on such day), 
                        relate to the standards described in 
                        subclause (I)(bb).
                  [(E) Sustained the fiscal integrity.--In this 
                paragraph, the term ``sustained the fiscal 
                integrity'', used with respect to funds used by 
                a service delivery area or local area, means 
                that the Secretary has not made a final 
                determination during any of the last 3 years 
                for which data are available, prior to the date 
                of the designation request involved, that 
                either the grant recipient or the 
                administrative entity of the area misexpended 
                the funds due to willful disregard of the 
                requirements of the Act involved, gross 
                negligence, or failure to observe accepted 
                standards of administration.]
          [(4)] (3) Designation on recommendation of state 
        board.--The Governor may approve a request from any 
        unit of general local government (including a 
        combination of such units) for designation [(including 
        temporary designation)] as a local area if the State 
        board determines, taking into account the factors 
        described in clauses (i) through [(v)] (vi) of 
        paragraph (1)(B), and recommends to the Governor, that 
        such area should be so designated.
          [(5)] (4) Appeals.--A unit of general local 
        government (including a combination of such units) or 
        grant recipient that requests but is not granted 
        designation of an area as a local area [under paragraph 
        (2) or (3)] under paragraph (2) may submit an appeal to 
        the State board under an appeal process established in 
        the State plan. [If the appeal does not result in such 
        a designation, the Secretary, after receiving a request 
        for review from the unit or grant recipient and on 
        determining that the unit or grant recipient was not 
        accorded procedural rights under the appeal process 
        established in the State plan or that the area meets 
        the requirements of paragraph (2) or (3), as 
        appropriate, may require that the area be designated as 
        a local area under such paragraph.]
    [(b) Small States.--The Governor of any State that was a 
single State service delivery area under the Job Training 
Partnership Act as of July 1, 1998, may designate the State as 
a single State local area for the purposes of this title. In 
the case of such a designation, the Governor shall identify the 
State as a local area under section 112(b)(5).]
    (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 of a State not 
        described in paragraph (1) may designate 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 and Cooperation.--
          [(1) Planning.--As part of the process for developing 
        the State plan, a State may require regional planning 
        by local boards for a designated region in the State. 
        The State may require the local boards for a designated 
        region to participate in a regional planning process 
        that results in the establishment of regional 
        performance measures for workforce investment 
        activities authorized under this subtitle. The State 
        may award regional incentive grants to the designated 
        regions that meet or exceed the regional performance 
        measures.]
          (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)(B)(iii).
                  (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) Information sharing.--The State may require the 
        local boards for a designated region to share, in 
        feasible cases, employment statistics, [information 
        about employment opportunities and trends,] information 
        about the skill requirements of existing and emerging 
        industries and industry clusters, and other types of 
        information that would assist in improving the 
        performance of all local areas in the designated region 
        on local performance measures.
          (3) Coordination of services.--The State may require 
        the local boards for a designated region to coordinate 
        the provision of workforce investment activities 
        authorized under this subtitle, including the provision 
        of transportation and other supportive services, so 
        that services provided through the activities may be 
        provided across the boundaries of local areas within 
        the designated region. Such services may be required to 
        be coordinated with regional economic development 
        services and strategies.

           *       *       *       *       *       *       *


SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS.

    (a) Establishment.--There shall be established in each 
local area of a State, and certified by the Governor of the 
State, a local workforce investment board, to set policy for 
the portion of the statewide workforce investment system within 
the local area (referred to in this title as a ``local 
workforce investment system'').
    (b) Membership.--
          (1) State criteria.--The Governor of the State, in 
        partnership with the State board, shall establish 
        criteria for use by chief elected officials in the 
        local areas for appointment of members of the local 
        boards in such local areas in accordance with the 
        requirements of paragraph (2).
          (2) Composition.--Such criteria shall require, at a 
        minimum, that the membership of each local board--
                  (A) shall include--
                          (i) representatives of business in 
                        the local area, who--
                                  (I) are owners of businesses, 
                                chief executives or operating 
                                officers of businesses, and 
                                other business executives or 
                                employers with optimum policy-
                                making or hiring authority;
                                  [(II) represent businesses 
                                with employment opportunities 
                                that reflect the employment 
                                opportunities of the local 
                                area; and]
                                  (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 businesses, 
                                including small businesses, in 
                                the local area; and
                                  (III) are appointed from 
                                among individuals nominated by 
                                local business organizations 
                                and business trade 
                                associations;
                          [(ii) representatives of local 
                        educational entities, including 
                        representatives of local educational 
                        agencies, local school boards, entities 
                        providing adult education and literacy 
                        activities, and postsecondary 
                        educational institutions (including 
                        representatives of community colleges, 
                        where such entities exist), selected 
                        from among individuals nominated by 
                        regional or local educational agencies, 
                        institutions, or organizations 
                        representing such local educational 
                        entities;]
                          (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;
                          (iii) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations, or (for a 
                        local area in which no employees are 
                        represented by such organizations), 
                        other representatives of employees;
                          (iv) representatives of community-
                        based organizations (including 
                        organizations representing individuals 
                        with disabilities, hard-to-serve 
                        populations, and veterans, for a local 
                        area in which such organizations 
                        arepresent);
                          (v) representatives of economic 
                        development agencies, including private 
                        sector economic development entities; 
                        and
                          [(vi) representatives of each of the 
                        one-stop partners; and]
                          (vi) if the local board does not 
                        establish or continue a youth council, 
                        representatives with experience serving 
                        out-of-school youth, particularly out-
                        of-school youth facing barriers to 
                        employment; and
                  (B) may include such other individuals or 
                representatives of entities as the chief 
                elected official in the local area may 
                determine to be appropriate.
          (3) Authority and representation of board members.--
        Members of the board that represent organizations, 
        agencies, or other entities shall be individuals with 
        optimum policymaking authority within the 
        organizations, agencies, or entities. The members of 
        the board shall represent diverse geographic sections 
        within the local area.
          (4) Majority.--A majority of the members of the local 
        board shall be representatives described in paragraph 
        (2)(A)(i).
          (5) Chairperson.--The local board shall elect a 
        chairperson for the local board from among the 
        representatives described in paragraph (2)(A)(i).
          (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 subclause (I) or (II) of paragraph 
        (2)(A)(ii), respectively, shall be appointed from among 
        individuals nominated by regional or local educational 
        agencies, institutions, or organizations representing 
        such agencies or institutions.
    (c) Appointment and Certification of Board.--
          (1) Appointment of board members and assignment of 
        responsibilities.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

                  (C) Concentrated employment programs.--In the 
                case of a local area designated in accordance 
                with [section 116(a)(2)(B)] section 
                116(a)(2)(A)(ii), the governing body of the 
                concentrated employment program involved shall 
                act in consultation with the chief official in 
                the local area to appoint members of the local 
                board, in accordance with the State criteria 
                established under subsection (b), and to carry 
                out any other responsibility relating to 
                workforce investment activities assigned to 
                such official under this Act.

           *       *       *       *       *       *       *

    (d) Functions of Local Board.--The functions of the local 
board shall include the following:
          (1) Local plan.--Consistent with section 118, each 
        local board, in partnership with the chief elected 
        official for the local area involved, shall develop and 
        submit a local plan to the Governor.
          (2) Selection of operators and providers.--
                  (A) Selection of one-stop operators.--
                Consistent with section 121(d), the local 
                board, with the agreement of the chief elected 
                official--
                          (i) shall designate or certify one-
                        stop operators as described in section 
                        121(d)(2)(A); and
                          (ii) may terminate for cause the 
                        eligibility of such operators.
                  (B) Selection of youth providers.--Consistent 
                with section 123, the local board shall 
                identify eligible providers of youth activities 
                in the local area by awarding grants or 
                contracts on a competitive basis (except as 
                provided in section 123(b)), based on the 
                recommendations of the youth council (where 
                appropriate).
                  (C) Identification of eligible providers of 
                training services.--Consistent with section 
                122, the local board shall identify eligible 
                providers of training services described in 
                section 134(d)(4) in the local area.
                  (D) Identification of eligible providers of 
                intensive services.--If the one-stop operator 
                does not provide intensive services in a local 
                area, the local board shall identify eligible 
                providers of intensive services described in 
                section 134(d)(3) in the local area by awarding 
                contracts.
                  (E) Consumer choice requirements.--Consistent 
                with sections 122 and paragraphs (3) and (4) of 
                134(d), 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.

           *       *       *       *       *       *       *

          (4) Program oversight.--The local board, in 
        partnership with the chief elected official, shall 
        conduct oversight with respect to local programs of 
        youth activities authorized under section 129, local 
        employment and training activities authorized under 
        section 134, and the one-stop delivery system in the 
        local area, and shall ensure the appropriate use and 
        management of the funds provided under this subtitle 
        for such programs, activities, and system.

           *       *       *       *       *       *       *

          (8) Connecting, brokering, and coaching.--The local 
        board shall promote the participation of private sector 
        employers, including small employers, in the statewide 
        workforce investment system and ensure the effective 
        provision, through the system, of connecting, 
        brokering, and coaching activities, through 
        intermediaries such as the one-stop operator in the 
        local area or through other organizations, to assist 
        such employers in meeting hiring needs[.], taking into 
        account the unique needs of small businesses.
          (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.

           *       *       *       *       *       *       *

    (f) Limitations.--
          (1) Training services.--
                  (A) In general.-- * * *

           *       *       *       *       *       *       *

          (2) Core services; intensive services; designation or 
        certification as one-stop operators.--A local board may 
        provide core services described in section 134(d)(2) or 
        intensive services described in section 134(d)(3) 
        through a one-stop delivery system [described in 
        section 134(c)] or be designated or certified as a one-
        stop operator only with the agreement of the chief 
        elected official and the Governor.

           *       *       *       *       *       *       *

    [(h) Youth Council.--
          [(1) Establishment.--There shall be established, as a 
        subgroup within each local board, a youth council 
        appointed by the local board, in cooperation with the 
        chief elected official for the local area.
          [(2) Membership.--The membership of each youth 
        council--
                  [(A) shall include--
                          [(i) members of the local board 
                        described in subparagraph (A) or (B) of 
                        subsection (b)(2) with special interest 
                        or expertise in youth policy;
                          [(ii) representatives of youth 
                        service agencies, including juvenile 
                        justice and local law enforcement 
                        agencies;
                          [(iii) representatives of local 
                        public housing authorities;
                          [(iv) parents of eligible youth 
                        seeking assistance under this subtitle;
                          [(v) individuals, including former 
                        participants, and representatives of 
                        organizations, that have experience 
                        relating to youth activities; and
                          [(vi) representatives of the Job 
                        Corps, as appropriate; and
                  [(B) may include such other individuals as 
                the chairperson of the local board, in 
                cooperation with the chief elected official, 
                determines to be appropriate.
          [(3) Relationship to local board.--Members of the 
        youth council who are not members of the local board 
        described in subparagraphs (A) and (B) of subsection 
        (b)(2) shall be voting members of the youth council and 
        nonvoting members of the board.
          [(4) Duties.--The duties of the youth council 
        include--
                  [(A) developing the portions of the local 
                plan relating to eligible youth, as determined 
                by the chairperson of the local board;
                  [(B) subject to the approval of the local 
                board and consistent with section 123--
                          [(i) recommending eligible providers 
                        of youth activities, to be awarded 
                        grants or contracts on a competitive 
                        basis by the local board to carry out 
                        the youth activities; and
                          [(ii) conducting oversight with 
                        respect to the eligible providers of 
                        youth activities, in the local area;
                  [(C) coordinating youth activities authorized 
                under section 129 in the local area; and
                  [(D) other duties determined to be 
                appropriate by the chairperson of the local 
                board.]
    (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.
    (i) Alternative Entity.--
          (1) In general.--For purposes of complying with 
        subsections (a), (b), and (c), and paragraphs (1) and 
        (2) of subsection (h), a State may use any local entity 
        (including a local council, regional workforce 
        development board, or similar entity) that--
                  (A) is established to serve the local area 
                (or the service delivery area that most closely 
                corresponds to the local area);
                  [(B) is in existence on December 31, 1997;]
                  (B) was in existence on August 7, 1998, 
                pursuant to State law; and
                  [(C)(i) is established pursuant to section 
                102 of the Job Training Partnership Act, as in 
                effect on December 31, 1997 or
                  [(ii) is substantially similar to the local 
                board described in subsections (a), (b), and 
                (c), and paragraphs (1) and (2) of subsection 
                (h); and]
                  [(D)] (C) includes--
                          (i) representatives of business in 
                        the local area; and
                          (ii)(I) representatives of labor 
                        organizations (for a local area in 
                        which employees are represented by 
                        labor organizations), nominated by 
                        local labor federations; or
                          (II) other representatives of 
                        employees in the local area (for a 
                        local area in which no employees are 
                        represented by such organizations).
          (2) References.--References in this Act to a local 
        board or a youth council shall be considered to include 
        such an entity or a subgroup of such an entity, 
        respectively.

           *       *       *       *       *       *       *


SEC. 118. LOCAL PLAN.

    (a) In General.--Each local board shall develop and submit 
to the Governor a comprehensive [5-year] 4-year local plan 
(referred to in this title as the ``local plan''), in 
partnership with the appropriate chief elected official. The 
plan shall be consistent with the State plan. 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.--The local plan shall include--
          (1) an identification of--
                  (A) the workforce investment needs of 
                businesses, jobseekers, and workers in the 
                local area;
                  (B) the current and projected employment 
                opportunities in the local area; and
                  (C) the job skills necessary to obtain such 
                employment opportunities;
          (2) a description of the one-stop delivery system to 
        be established or designated in the local area, 
        including--
                  (A) a description of how the local board will 
                ensure the continuous improvement of eligible 
                providers of services through the system and 
                ensure that such providers meet the employment 
                needs of local employers and participants; 
                [and]
                  [(B) a copy of each memorandum of 
                understanding described in section 121(c) 
                (between the local board and each of the one-
                stop partners) concerning the operation of the 
                one-stop delivery system in the local area;]
                  (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
                  (C) a description of how the local board will 
                ensure physical and programmatic accessibility 
                for individuals with disabilities at one-stop 
                centers;

           *       *       *       *       *       *       *

          (9) a description of the competitive process to be 
        used to award the grants and contracts in the local 
        area for activities carried out under this subtitle[; 
        and];
          (10) a description of 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 investment 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 
        alliance initiatives, 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 
        objectives of this title;
          (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 funds that are brokered through the 
                one-stop centers for training services;
          (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
          [(10)] (14) such other information as the Governor 
        may require.

           *       *       *       *       *       *       *


          CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS


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

    (a) In General.--Consistent with the State plan, the local 
board for a local area, with the agreement of the chief elected 
official for the local area, shall--
      (1) * * *
      (2) * * *
      (3) * * *
    (b) One-Stop Partners.--
          (1) Required partners.--
                  [(A) In general.--Each entity that carries 
                out a program or activities described in 
                subparagraph (B) shall--
                          [(i) make available to participants, 
                        through a one-stop delivery system, the 
                        services described in section 134(d)(2) 
                        that are applicable to such program or 
                        activities;
                          [(ii) participate in the operation of 
                        such system consistent with the terms 
                        of the memorandum described in 
                        subsection (c), and with the 
                        requirements of the Federal law in 
                        which the program or activities are 
                        authorized.]
                  (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 a 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) Programs and activities.--The programs 
                and activities referred to in subparagraph (A) 
                consist of--
                          (i) * * *

           *       *       *       *       *       *       *

                          [(v) programs authorized under 
                        section 403(a)(5) of the Social 
                        Security Act (42 U.S.C. 603(a)(5)) (as 
                        added by section 5001 of the Balanced 
                        Budget Act of 1997);]
                          [(vi)] (v) activities authorized 
                        under title V of the Older Americans 
                        Act of 1965 (42 U.S.C. 3056 et seq.);
                          [(vii)] (vi) postsecondary vocational 
                        education activities authorized under 
                        the Carl D. Perkins Vocational and 
                        Applied Technology Education Act (20 
                        U.S.C. 2301 et seq.);
                          [(viii)] (vii) activities authorized 
                        under chapter 2 of title II of the 
                        Trade Act of 1974 (19 U.S.C. 2271 et 
                        seq.);
                          [(ix)] (viii) activities authorized 
                        under chapter 41 of title 38, United 
                        States Code;
                          [(x)] (ix) employment and training 
                        activities carried out under the 
                        Community Services Block Grant Act (42 
                        U.S.C. 9901 et seq.);
                          [(xi)] (x) employment and training 
                        activities carried out by the 
                        Department of Housing and Urban 
                        Development; [and]
                          [(xii)] (xi) programs authorized 
                        under State unemployment compensation 
                        laws (in accordance with applicable 
                        Federal law)[.]; and
                          (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).
                  (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.--In addition to the entities 
                described in paragraph (1), other entities that 
                carry out a human resource program described in 
                subparagraph (B) may--
                          [(i) make available to participants, 
                        through the one-stop delivery system, 
                        the services described in section 
                        134(d)(2) that are applicable to such 
                        program; and
                          [(ii) participate in the operation of 
                        such system consistent with the terms 
                        of the memorandum described in 
                        subsection (c), and with the 
                        requirements of the Federal law in 
                        which the program is authorized;
                if the local board and chief elected official 
                involved approve such participation.]
                  (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 human 
                resource programs described in subparagraph (B) 
                may be one-stop partners and carry out the 
                responsibilities described in paragraph (1)(A).
                  (B) Programs.--The programs referred to in 
                subparagraph (A) may include--
                          [(i) programs authorized under part A 
                        of title IV of the Social Security Act 
                        (42 U.S.C. 601 et seq.);
                          [(ii) programs authorized under 
                        section 6(d)(4) of the Food Stamp Act 
                        of 1977 (7 U.S.C. 2015(d)(4));
                          [(iii) work programs authorized under 
                        section 6(o) of the Food Stamp Act of 
                        1977 (7 U.S.C. 2015(o));]
                          (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) employment and training programs 
                        carried out by the Small Business 
                        Administration;
                          (iii) programs authorized under 
                        section 6(d)(4) of the Food Stamp Act 
                        of 1977 (7 U.S.C. 2015(d)(4));

           *       *       *       *       *       *       *

    (c) Memorandum of Understanding.--
          (1) Development.--The local board, with the agreement 
        of the chief elected official, shall develop and enter 
        into a memorandum of understanding (between the local 
        board and the one-stop partners), consistent with 
        paragraph (2), concerning the operation of the one-stop 
        delivery system in the local area.
          (2) Contents.--Each memorandum of understanding shall 
        contain--
                  [(A) Provisions describing--
                          [(i) the services to be provided 
                        through the one-stop delivery system;
                          [(ii) how the costs of such services 
                        and the operating costs of the system 
                        will be funded;
                          [(iii) methods for referral of 
                        individuals between the one-stop 
                        operator and the one-stop partners, for 
                        the appropriate services and 
                        activities; and
                          [(iv) the duration of the memorandum 
                        and the procedures for amending the 
                        memorandum during the term of the 
                        memorandum; and]
                  (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 providing access to 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

           *       *       *       *       *       *       *

    (d) One-Stop Operators.--
          (1) Designation and certification.--Consistent with 
        paragraphs (2) and (3), the local board, with the 
        agreement of the chief elected official, is authorized 
        to designate or certify one-stop operators and to 
        terminate for cause the eligibility of such operators.
          (2) Eligibility.--To be eligible to receive funds 
        made available under this subtitle to operate a one-
        stop center referred to in [section 134(c)] section 
        121(e), an entity (which may be a consortium of 
        entities)--

           *       *       *       *       *       *       *

    [(e) Established One-Stop Delivery System.--If a one-stop 
delivery system has been established in a local area prior to 
the date of enactment of this Act, the local board, the chief 
elected official, and the Governor involved may agree to 
certify an entity carrying out activities through the system as 
a one-stop operator for purposes of subsection (d), consistent 
with the requirements of subsection (b), of the memorandum of 
understanding, and of section 134(c).]
    [(c)] (e) Establishment of One-Stop Delivery System.--
          (1) In general.--There shall be established in a 
        State that receives an allotment under section 132(b) a 
        one-stop delivery system, which--
                  (A) shall provide the core services described 
                in [subsection (d)(2)] section 134(d)(2);
                  (B) shall provide access to intensive 
                services and training services as described in 
                paragraphs (3) and (4) of [subsection (d)] 
                section 134(d), including serving as the point 
                of access to [individual training accounts] 
                career scholarship accounts for training 
                services to participants in accordance with 
                [subsection (d)(4)(G)] section 134(d)(4)(G);
                  (C) shall provide access to the activities 
                carried out under [subsection (e)] section 
                134(e), if any;
                  (D) shall provide access to programs and 
                activities carried out by one-stop partners and 
                described in [section 121(b)] subsection (b); 
                and
                  (E) shall provide access to the [information 
                described in section 15] data, information, and 
                analysis described in section 15(a) of the 
                Wagner-Peyser Act and all job search, 
                placement, recruitment, and other labor 
                exchange services authorized under the Wagner-
                Peyser Act (29 U.S.C. 49 et seq.).
          (2) One-stop delivery.--At a minimum, the one-stop 
        delivery system--
                  (A) shall make each of the programs, 
                services, and activities described in paragraph 
                (1) accessible at not less than one physical 
                center in each local area of the State; and
                  (B) may also make programs, services, and 
                activities described in paragraph (1) 
                available--
                          (i) through a network of affiliated 
                        sites that can provide one or more of 
                        the programs, services, and activities 
                        to individuals; and
                          (ii) through a network of eligible 
                        one-stop partners--
                                  (I) in which each partner 
                                provides one or more of the 
                                programs, services, and 
                                activities to such individuals 
                                and is accessible at an 
                                affiliated site that consists 
                                of a physical location or an 
                                electronically or 
                                technologically linked access 
                                point; and
                                  (II) that assures individuals 
                                that information on the 
                                availability of the core 
                                services will be available 
                                regardless of where the 
                                individuals initially enter the 
                                statewide workforce investment 
                                system, including information 
                                made available through an 
                                access point described in 
                                subclause (I).
          (3) Specialized centers.--The centers and sites 
        described in paragraph (2) may have a specialization in 
        addressing special needs, such as the needs of 
        dislocated workers.

           *       *       *       *       *       *       *

    (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 objective criteria and procedures 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 to the programs administered by the one-
        stop partners at the one-stop centers, consistent with 
        the guidelines and 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 subsection (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 
        to be 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.--
          (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) methods described in the 
                                local memorandum of 
                                understanding, if, the local 
                                board, chief elected officials, 
                                and one-stop partners agree to 
                                such 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 
                        officials, and one-stop partners in a 
                        local area fail to reach agreement on 
                        methods of sufficient funding of the 
                        infrastructure costs of one-stop 
                        centers, as determined by the local 
                        area, 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 to the State mechanism for one-stop 
                center infrastructure funding described in 
                paragraph (2), the Governor, after consultation 
                with chief local elected officials, 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 programs' 
                        contributions to and participation in 
                        the one-stop delivery system, including 
                        funding for the costs of infrastructure 
                        as defined in paragraph (2)(D), 
                        negotiated pursuant to the local 
                        memorandum of understanding under 
                        subsection (c); 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.--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)(1) 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)(A)(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 calculate the 
                                proportionate use of the one-
                                stop centers for the purpose of 
                                determining funding 
                                contributions pursuant to 
                                clause (i)(II) or (ii) of 
                                paragraph (1)(A) by each 
                                partner, and the costs of 
                                administration for purposes not 
                                related to one-stop centers for 
                                each partner. 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)(A)(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 those Acts shall 
                                be made by the chief officer of 
                                the entity with such authority 
                                in consultation with the 
                                Governor.
                                  (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 
                                        clause (i)(II) or (ii) 
                                        of paragraph (1)(A) by 
                                        the programs authorized 
                                        under chapters 4 and 5 
                                        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 
                                        clause (i)(II) or (ii) 
                                        of paragraph (1)(A) 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\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 a 
                                        local memorandum 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 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)(A)(i)(I). 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.--
          (1) In general.--Subject to the memorandum of 
        understanding described in subsection (c) for the one-
        stop delivery system involved, 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 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 common costs 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. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING SERVICES.

    [(a) Eligibility Requirements.--
          [(1) In general.--Except as provided in subsection 
        (h), to be identified as an eligible provider of 
        training services described in section 134(d)(4) 
        (referred to in this section as ``training services'') 
        in a local area and to be eligible to receive funds 
        made available under section 133(b) for the provision 
        of training services, a provider of such services shall 
        meet the requirements of this section.
          [(2) Providers.--Subject to the provisions of this 
        section, to be eligible to receive the funds, the 
        provider shall be--
                  [(A) a postsecondary educational institution 
                that--
                          [(i) is eligible to receive Federal 
                        funds under title IV of the Higher 
                        Education Act of 1965 (20 U.S.C. 1070 
                        et seq.); and
                          [(ii) provides a program that leads 
                        to an associate degree, baccalaureate 
                        degree, or certificate;
                  [(B) an entity that carries out programs 
                under the Act of August 16, 1937 (commonly 
                known as the ``National Apprenticeship Act''; 
                50 Stat. 664, chapter 663; 29 U.S.C. 50 et 
                seq.); or
                  [(C) another public or private provider of a 
                program of training services.
    [(b) Initial Eligibility Determination.--
          [(1) Postsecondary educational institutions and 
        entities carrying out apprenticeship programs.--To be 
        initially eligible to receive funds as described in 
        subsection (a) to carry out a program described in 
        subparagraph (A) or (B) of subsection (a)(2), a 
        provider described in subparagraph (A) or (B), 
        respectively, of subsection (a)(2) shall submit an 
        application, to the local board for the local area in 
        which the provider desires to provide training 
        services, at such time, in such manner, and containing 
        such information as the local board may require.
          [(2) Other eligible providers.--
                  [(A) Procedure.--Each Governor of a State 
                shall establish a procedure for use by local 
                boards in the State in determining the initial 
                eligibility of a provider described in 
                subsection (a)(2)(C) to receive funds as 
                described in subsection (a) for a program of 
                training services, including the initial 
                eligibility of--
                          [(i) a postsecondary educational 
                        institution to receive such funds for a 
                        program not described in subsection 
                        (a)(2)(A); and
                          [(ii) a provider described in 
                        subsection (a)(2)(B) to receive such 
                        funds for a program not described in 
                        subsection (a)(2)(B).
                  [(B) Recommendations.--In developing such 
                procedure, the Governor shall solicit and take 
                into consideration the recommendations of local 
                boards and providers of training services 
                within the State.
                  [(C) Opportunity to submit comments.--The 
                Governor shall provide an opportunity, during 
                the development of the procedure, for 
                interested members of the public, including 
                representatives of business and labor 
                organizations, to submit comments on such 
                procedure.
                  [(D) Requirements.--In establishing the 
                procedure, the Governor shall require that, to 
                be initially eligible to receive funds as 
                descried in subsection (a) for a program, a 
                provide described in subsection (a)(2)(C)--
                          [(i) shall submit an application, to 
                        the local board for the local area in 
                        which the provider desires to provide 
                        training services, at such time and in 
                        such manner as may be required, and 
                        containing a description of the 
                        program;
                          [(ii) if the provider provides 
                        training services through a program on 
                        the date of application, shall include 
                        in the application an appropriate 
                        portion of the performance information 
                        and program cost information described 
                        in subsection (d) for the program, as 
                        specified in the procedure, and shall 
                        meet appropriate levels of performance 
                        for the program, as specified in the 
                        procedure; and
                          [(iii) if the provider does not 
                        provide training services on such date, 
                        shall meet appropriate requirements, as 
                        specified in the procedure.
    [(c) Subsequent Eligibility Determination.--
          [(1) Procedure.--Each Governor of a State shall 
        establish a procedure for use by local boards in the 
        State in determining the eligibility of a provider 
        described in subsection (a)(2) to continue to receive 
        funds as described in subsection (a) for a program 
        after an initial period of eligibility under subsection 
        (b) referred to in this section as ``subsequent 
        eligibility'').
          [(2) Recommendations.--In developing such procedure, 
        the Governor shall solicit and take into consideration 
        the recommendations of local boards and providers of 
        training services within the State.
          [(3) Opportunity to submit comments.--The Governor 
        shall provide an opportunity, during the development of 
        the procedure, for interested members of the public, 
        including representatives of business and labor 
        organizations, to submit comments on such procedure.
          [(4) Considerations.--In developing such procedure, 
        the Governor shall ensure that the procedure requires 
        the local boards to take into consideration, in making 
        the determinations of Subsequent eligibility
                  [(A) the specific economic, geographic, and 
                demographic factors in the local areas in which 
                providers seeking eligibility are located; and
                  [(B) the characteristics of the populations 
                served by providers seeking eligibility, 
                including the demonstrated difficulties in 
                serving such populations, where applicable.
          [(5) Requirements.--In establishing the procedure, 
        the Governor shall require that, to be eligible to 
        continue to receive funds as described in subsection 
        (a) for a program after the initial period of 
        eligibility, a provider described in subsection (a)(2) 
        shall--
                  [(A) submit the performance information and 
                program cost information described in 
                subsection (d)(1) for the program and any 
                additional information required to be submitted 
                in accordance with subsection (d)(2) for the 
                program annually to the appropriate local board 
                at such time and in such manner as may be 
                required; and
                  [(B) annually meet the performance levels 
                described in paragraph (6) for the program, as 
                demonstrated utilizing quarterly records 
                described in section 136, in a manner 
                consistent with section 136.
          [(6) Levels of performance.--
                  [(A) In general.--At a minimum, the procedure 
                described in paragraph (1) shall require the 
                provider to meet minimum acceptable levels of 
                performance based on the performance 
                information referred to in paragraph (5)(A).
                  [(B) Higher levels of performance 
                eligibility.--The local board may require 
                higher levels of performance than the levels 
                referred to in subparagraph (A) for subsequent 
                eligibility to receive funds as described in 
                subsection (a).
    [(d) Performance and Cost Information.--
          [(1) Required information.--For a provider of 
        training services to be determined to be subsequently 
        eligible under subsection (c) to receive funds as 
        descried in subsection (a), such provider shall, under 
        subsection (c), submit--
                  [(A) verifiable program-specific performance 
                information consisting of--
                          [(i) program information, including--
                                  [(I) the program completion 
                                rates for all individuals 
                                participating in the applicable 
                                program conducted by the 
                                provider;
                                  [(II) the percentage of all 
                                individuals participating in 
                                the applicable program who 
                                obtain unsubsidized employment, 
                                which may also include 
                                information specifying the 
                                percentage of the individuals 
                                who obtain unsubsidized 
                                employment in and occupation 
                                related to the program 
                                conducted; and
                                  [(III) the wages at placement 
                                in employment of all 
                                individuals participating in 
                                the applicable program; and
                          [(ii) training services information 
                        for all participants who received 
                        assistance under section 134 to 
                        participate in the applicable program, 
                        including--
                                  [(I) the percentage of 
                                participants who have completed 
                                the applicable program and who 
                                are placed in unsubsidized 
                                employment;
                                  [(II) the retention rates in 
                                unsubsidized employment of 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment;
                                  [(III) the wages received by 
                                participants who have completed 
                                the applicable program, 6 
                                months after the first day of 
                                the employment involved; and
                                  [(IV) where appropriate, the 
                                rates of licensure or 
                                certification, attainment of 
                                academic degrees or 
                                equivalents, or attainment of 
                                other measures of skills, of 
                                the graduates of the applicable 
                                program; and
                  [(B) information on program costs (such as 
                tuition and fees) for participants in the 
                applicable program.
          [(2) Additional information.--Subject to paragraph 
        (3), in addition to the performance information 
        described in paragraph (1)--
                  [(A) the Governor may require that a provider 
                submit, under subsection (c), such other 
                verifiable program-specific performance 
                information as the Governor determines to be 
                appropriate to obtain such subsequent 
                eligibility, which may include information 
                relating to--
                          [(i) retention rates in employment 
                        and the subsequent wages of all 
                        individuals who complete the applicable 
                        program;
                          [(ii) where appropriate, the rates of 
                        licensure or certification of all 
                        individuals who complete the program; 
                        and
                          [(iii) the percentage of individuals 
                        who complete the program who attain 
                        industry-recognized occupational skills 
                        in the subject, occupation, or industry 
                        for which training is provided through 
                        the program, where applicable; and
                  [(B) the Governor, or the local board, may 
                require a provider to submit, under subsection 
                (c), other verifiable program-specific 
                performance information to obtain such 
                subsequent eligibility.
          [(3) Conditions.--
                  [(A) In general.--If the Governor or a local 
                board requests additional information under 
                paragraph (2) that imposes extraordinary costs 
                on providers, or if providers experience 
                extraordinary costs in the collection of 
                information required under paragraph 
                (1)(A)(ii), the Governor or the local board 
                shall provide access to cost-effective methods 
                for the collection of the information involved, 
                or the Governor shall provide additional 
                resources to assist providers in the collection 
                of such information from funds made available 
                as described in sections 128(a) and 133(a)(1), 
                as appropriate.
                  [(B) Higher education eligibility 
                requirements.--The local board and the 
                designated State agency described in subsection 
                (i) may accept program-specific performance 
                information consistent with the requirements 
                for eligibility under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.) 
                from a provider for purposes of enabling the 
                provider to fulfill the applicable requirements 
                of this subsection, if such information is 
                substantially similar to the information 
                otherwise required under this subsection.
      [(e) Local Identification.--
          [(1) In general.--The local board shall place on a 
        list providers submitting an application under 
        subsection (b)(1) and providers determined to be 
        initially eligible under subsection (b)(2), and retain 
        on the list providers determined to be subsequently 
        eligible under subsection (c), to receive funds as 
        described in subsection (a) for the provision of 
        training services in the local area served by the local 
        board. The list of providers shall be accompanied by 
        any performance information and program cost 
        information submitted under subsection (b) or (c) by 
        the provider.
          [(2) Submission to state agency.--On placing or 
        retaining a provider on the list, the local board shall 
        submit, to the designated State agency described in 
        subsection (i), the list and the performance 
        information and program cost information referred to in 
        paragraph (1). If the agency determines, within 30 days 
        after the date of the submission, that the provider 
        does not meet the performance levels described in 
        subsection (c)(6) for the program (where applicable), 
        the agency may remove the provider from the list for 
        the program. The agency may not remove from the list an 
        agency submitting an application under subsection 
        (b)(1).
          [(3) Identification of eligible providers.--A 
        provider who is placed or retained on the list under 
        paragraph (1), and is not removed by the designated 
        State agency under paragraph (2), for a program, shall 
        be considered to be identified as an eligible provider 
        of training services for the program.
          [(4) Availability.--
                  [(A) State list.--The designated State agency 
                shall compile a single list of the providers 
                identified under paragraph (3) from all local 
                areas in the State and disseminate such list, 
                and the performance information and program 
                cost information described in paragraph (1), to 
                the one-stop delivery systems within the State. 
                Such list and information shall be made widely 
                available to participants in employment and 
                training activities authorized under section 
                134 and others through the one-stop delivery 
                system.
                  [(B) Selection from state list.--Individuals 
                eligible to receive training services under 
                section 134(d)(4) shall have the opportunity to 
                select any of the eligible providers, from any 
                of the local areas in the State, that are 
                included on the list described in subparagraph 
                (A) to provide the services, consistent with 
                the requirements of section 134.
          [(5) Acceptance of individual training accounts by 
        other states.--States may enter into agreements, on a 
        reciprocal basis, to permit eligible providers of 
        training services in a State to accept individual 
        training accounts provided in another State.
    [(f) Enforcement.--
          [(1) Accuracy of information.--If the designated 
        State agency, after consultation with the local board 
        involved, determines that an eligible provider or 
        individual supplying information on behalf of the 
        provider intentionally supplies inaccurate information 
        under this section, the agency shall terminate the 
        eligibility of the provider to receive funds described 
        in subsection (a) for any program for a period of time, 
        but not less than years.
          [(2) Noncompliance.--If the designated State agency, 
        or the local board working with the State agency, 
        determines that an eligible provider described in 
        subsection (a) substantially violates any requirement 
        under this Act, the agency, or the local board working 
        with the State agency, may terminate the eligibility of 
        such provider to receive funds described in subsection 
        (a) for the program involved or take such other action 
        as the agency or local board determines to be 
        appropriate.
          [(3) Repayment.--A provider whose eligibility is 
        terminated under paragraph (1) or (2) for a program 
        shall be liable for repayment of all funds described in 
        subsection (a) received for the program during any 
        period of noncompliance described in such paragraph.
          [(4) Construction.--This subsection and subsection 
        (g) shall be construed to provide remedies and 
        penalties that supplement, but do not supplant, other 
        civil and criminal remedies and penalties.
    [(g) Appeal.--The Governor shall establish procedures for 
providers of training services to appeal a denial of 
eligibility by the local board or the designated State agency 
under subsection (b), (c), or (e), a termination of eligibility 
or other action by the board or agency under subsection (f), or 
a denial of eligibility by a one-stop operator under subsection 
(h). Such procedures shall provide an opportunity for a hearing 
and prescribe appropriate time limits to ensure prompt 
resolution of the appeal.
    [(h) On-the-Job Training or Customized Training 
Exception.--
          [(1) In general.--Providers of on-the-job training or 
        customized training shall not be subject to the 
        requirements of subsections (a) through (e).
          [(2) Collection and dissemination of information.--A 
        one-stop operator in a local area shall collect such 
        performance information from on-the-job training and 
        customized training providers as the Governor may 
        require, determine whether the providers meet such 
        performance criteria as the Governor may require, and 
        disseminate information identifying providers that meet 
        the criteria as eligible providers, and the performance 
        information, through the one-stop delivery system. 
        Providers determined to meet the criteria shall be 
        considered to be identified as eligible providers of 
        training services.
    [(i) Administration.--The Governor shall designate a State 
agency to make the determinations described in subsection 
(e)(2), take the enforcement actions described in subsection 
(f), and carry out other duties described in this section.]
    (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 one-stop 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 area 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 services 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, by an 
                individual or entity specified in the criteria 
                or procedures, 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, by an individual or entity 
                specified in the criteria or procedures, 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 subparagraph.
          (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 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 to be 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. 123. IDENTIFICATION OF ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

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

SEC. 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 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. 127. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
          (1) for each fiscal year in which the amount 
        appropriated under section 137(a) exceeds 
        $1,000,000,000, reserve a portion determined under 
        subsection (b)(1)(A) of the amount appropriated under 
        section 137(a) for use under sections 167 (relating to 
        migrant and seasonal farmworker programs) and 169 
        (relating to youth) [opportunity] challenge grants; and

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

    (c) Reallotment.--

           *       *       *       *       *       *       *

          [(2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotment under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotment for the prior program year.]
          (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.
          (3) Reallotment.--In making reallotments to eligible 
        States of amounts available pursuant to paragraph (2) 
        for a program year, the Secretary shall allot to each 
        eligible State an amount based on the relative amount 
        allotted to such State under this section for such 
        activities [for the prior program year] for the program 
        year for which the determination is made, as compared 
        to the total amount allotted to all eligible States 
        under this section for such activities for [such prior 
        program year] such program year.
          [(4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible State means a State that does not have an 
        amount available for reallotment under paragraph (2) 
        for the program year for which the determination under 
        paragraph (2) is made.
          (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the [obligation] 
        accrued expenditure of funds by local areas within the 
        State in order to avoid the requirement that funds be 
        made available for reallotment under this subsection. 
        The Governor shall further prescribe equitable 
        procedures for making funds available from the State 
        and local areas in the event that a State is required 
        to make funds available for reallotment under this 
        subsection.

           *       *       *       *       *       *       *


SEC. 128. WITHIN STATE ALLOCATIONS.

    [(a) Reservations for State Activities.--
          [(1) In general.--The Governor of a State shall 
        reserve not more than 15 percent of each of the amounts 
        allotted to the State under section 127(b)(1)(C) and 
        paragraphs (1)(B) and (2)(B) of section 132(b) for a 
        fiscal year for statewide workforce investment 
        activities.
          [(2) Use of funds.--Regardless of whether the 
        reserved amounts were allotted under section 
        127(b)(1)(C), or under paragraph (1)(B) or (2)(B) of 
        section 132(b), the Governor may use the reserved 
        amounts to carry out statewide youth activities 
        described in section 129(b) or statewide employment and 
        training activities, for adults or for dislocated 
        workers, described in paragraph (2)(B) or (3) of 
        section 134(a).]
    (a) Reservations for Statewide Activities.--
          (1) In general.--The Governor of a State shall 
        reserve not more than 15 percent of each of the amounts 
        allotted to the State under section 127(b)(1)(C) and 
        paragraphs (1)(B) and (2)(B) of section 132(b) for a 
        fiscal year for statewide workforce investment 
        activities.
          (2) Use of funds.--Regardless of whether the reserved 
        amounts were allotted under section 127(b)(1)(C), or 
        under paragraph (1)(B) or (2)(B) of section 132(b), the 
        Governor may use the reserved amounts to carry out 
        statewide activities under section 129(b) or statewide 
        employment and training activities, for adults or 
        dislocated workers, under section 134(a).
    [(b) Within State Allocation.--
          [(1) Methods.--The Governor, acting in accordance 
        with the State plan, and after consulting with chief 
        elected officials in the local areas, shall allocate 
        the funds that are allotted to the State for youth 
        activities and statewide workforce investment 
        activities under section 127(b)(1)(C) and are not 
        reserved under subsection (a), in accordance with 
        paragraph (2) or (3).
          [(2) Formula allocation.--
                  [(A) Youth activities.--
                          [(i) Allocation.--In allocating the 
                        funds described in paragraph (1) to 
                        local areas, a State may allocate--
                                  [(I) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(I);
                                  [(II) 33\1/3\ percent of the 
                                funds on the basis described in 
                                section 127(b)(1)(C)(ii)(II); 
                                and
                                  [(III) 33\1/3\ percent of the 
                                funds on the basis described in 
                                clauses (ii)(III) and (iii) of 
                                section 127(b)(1)(C).
                          [(ii) Minimum percentage.--Effective 
                        at the end of the second full fiscal 
                        year after the date on which a local 
                        area is designated under section 116, 
                        the local area shall not receive an 
                        allocation percentage for a fiscal year 
                        that is less than 90 percent of the 
                        average allocation percentage of the 
                        local area for the 2 preceding fiscal 
                        years. Amounts necessary for increasing 
                        such allocations to local areas to 
                        comply with the preceding sentence 
                        shall be obtained by ratably reducing 
                        the allocations to be made to other 
                        local areas under this subparagraph.
                          [(iii) Definition.--The term 
                        ``allocation percentage'', used with 
                        respect to fiscal year 2000 or a 
                        subsequent fiscal year, means a 
                        percentage of the funds referred to in 
                        clause (i), received through an 
                        allocation made under this 
                        subparagraph, for the fiscal year.
                  [(B) Application.--For purposes of carrying 
                out subparagraph (A)--
                          [(i) references in section 127(b) to 
                        a State shall be deemed to be 
                        references to a local area;
                          [(ii) references in section 127(b) to 
                        all States shall be deemed to be 
                        references to all local areas in the 
                        State involved; and
                          [(iii) except as described in clause 
                        (i), references in section 127(b)(1) to 
                        the term ``excess number'' shall be 
                        considered to be references to the term 
                        as defined in section 127(b)(2).
          [(3) Youth discretionary allocation.--In lieu of 
        making the allocation described in paragraph (2)(A), in 
        allocating the funds described in paragraph (1) to 
        local areas, a State may distribute--
                  [(A) a portion equal to not less than 70 
                percent of the funds in accordance with 
                paragraph (2)(A); and
                  [(B) the remaining portion of the funds on 
                the basis of a formula that--
                          [(i) incorporates additional factors 
                        (other than the factors described in 
                        paragraph (2)(A)) relating to--
                                  [(I) excess youth poverty in 
                                urban, rural, and suburban 
                                local areas; and
                                  [(II) excess unemployment 
                                above the State average in 
                                urban, rural, and suburban 
                                local areas; and
                          [(ii) was developed by the State 
                        board and approved by the Secretary as 
                        part of the State plan.
          [(4) Limitation.--
                  [(A) In general.--Of the amount allocated to 
                a local area under this subsection and section 
                133(b) for a fiscal year, not more than 10 
                percent of the amount may be used by the local 
                board for the administrative cost of carrying 
                out local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c).
                  [(B) Use of funds.--Funds made available for 
                administrative costs under subparagraph (A) may 
                be used for the administrative cost of any of 
                the local workforce investment activities 
                described in subsection (d) or (e) of section 
                134 or in section 129(c), regardless of whether 
                the funds were allocated under this subsection 
                or section 133(b).
                  [(C) Regulations.--The Secretary, after 
                consulting with the Governors, shall develop 
                and issue regulations that define the term 
                ``administrative cost'' for purposes of this 
                title. Such definition shall be consistent with 
                generally accepted accounting principles.]
    (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 
                                higher of--
                                          (aa) the poverty 
                                        line; or
                                          (bb) 70 percent of 
                                        the lower living 
                                        standard income level.
          (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 boards.
          (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).
    (c) Reallocation Among Local Areas.--
          (1) In general.--The Governor may, in accordance with 
        this subsection, reallocate to eligible local areas 
        within the State amounts that are allocated under 
        [paragraph (2)(A) or (3) of] subsection (b) for youth 
        activities and that are available for reallocation.
          [(2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.]
          (2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unexpended balance at the end of the program year prior 
        to the program year for which the determination is made 
        exceeds 30 percent of the total amount of funds 
        available to the local area under this section during 
        such prior program year (including amounts 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.
          (3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under [subsection (b)(3)] subsection 
        (b) for such activities [for the prior program year] 
        for the program year for which the determination is 
        made, as compared to the total amount allocated to all 
        eligible local areas in the State under [subsection 
        (b)(3)] subsection (b) for such activities for [such 
        prior program year] such program year. [For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.]
          [(4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible local area means a local area 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.

           *       *       *       *       *       *       *


SEC. 129. USE OF FUNDS FOR YOUTH ACTIVITIES.

    [(a) Purposes.--The purposes of this section are--
          [(1) to provide, to eligible youth seeking assistance 
        in achieving academic and employment success, effective 
        and comprehensive activities, which shall include a 
        variety of options for improving educational and skill 
        competencies and provide effective connections to 
        employers;
          [(2) to ensure on-going mentoring opportunities for 
        eligible youth with adults committed to providing such 
        opportunities;
          [(3) to provide opportunities for training to 
        eligible youth;
          [(4) to provide continued supportive services for 
        eligible youth;
          [(5) to provide incentives for recognition and 
        achievement to eligible youth; and
          [(6) to provide opportunities for eligible youth in 
        activities related to leadership, development, 
        decisionmaking, citizenship, and community service.]
    (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 title 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.
                                  (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.
                                  (VII) A low-income individual 
                                who requires additional 
                                assistance to complete an 
                                educational program or to 
                                secure or hold employment.
                  (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, in the case of individuals for whom low income is 
        a requirement for eligibility under this section, may 
        be individuals who are not low income.
          (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 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) 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 use at least 40 
                        percent of the funds available for 
                        activities under subsection (b) or (c) 
                        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 increased 
                        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.
    [(b) Statewide Youth Activities.--
          [(1) In general.--Funds reserved by a Governor for a 
        State as described in sections 128(a) and 133(a)(1)--
                  [(A) shall be used to carry out the statewide 
                youth activities described in paragraph (2); 
                and
                  [(B) may be used to carry out any of the 
                statewide youth activities described in 
                paragraph (3),
        regardless of whether the funds were allotted to the 
        State under section 127(b)(1) or under paragraph (1) or 
        (2) of section 132(b).
          [(2) Required statewide youth activities.--A State 
        shall use funds reserved as described in sections 
        128(a) and 133(a)(1) (regardless of whether the funds 
        were allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        statewide youth activities, which shall include--
                  [(A) disseminating a list of eligible 
                providers of youth activities described in 
                section 123;
                  [(B) carrying out activities described in 
                clauses (ii) through (vi) of section 
                134(a)(2)(B), except that references in such 
                clauses to activities authorized under section 
                134 shall be considered to be references to 
                activities authorized under this section; and
                  [(C) providing additional assistance to local 
                areas that have high concentrations of eligible 
                youth to carry out the activities described in 
                subsection (c).
          [(3) Allowable statewide youth activities.--A State 
        may use funds reserved as described in sections 128(a) 
        and 133(a)(1) (regardless of whether the funds were 
        allotted to the State under section 127(b)(1) or 
        paragraph (1) or (2) of section 132(b)) to carry out 
        additional statewide youth activities, which may 
        include--
                  [(A) carrying out activities described in 
                clauses (i), (ii), (iii), (iv)(II), and 
                (vi)(XII) of section 134(a)(3)(A), except that 
                references in such clauses to activities 
                authorized under section 134 shall be 
                considered to be references to activities 
                authorized under this section; and
                  [(B) carrying out, on a statewide basis, 
                activities described in subsection (c).
          [(4) Prohibition.--No funds described in this 
        subsection or section 134(a) shall be used to develop 
        or implement education curricula for school systems in 
        the State.]
    (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)(B) or (2)(B) 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 performance by local areas 
                as described in 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.
    (c) Local Elements and Requirements.--
          (1) Program design.--Funds allocated to a local area 
        for eligible youth under [paragraph (2)(A) or (3), as 
        appropriate, of] section 128(b) shall be used to carry 
        out, for eligible youth, programs that--
                  (A) provide an objective assessment of the 
                academic levels, skill levels, and service 
                needs of each participant, which assessment 
                shall include a review of basic skills, 
                occupational skills, prior work experience, 
                employability, interests, aptitudes (including 
                interests and aptitudes for nontraditional 
                jobs), supportive service needs, and 
                developmental needs of such participant, except 
                that a new assessment of a participant is not 
                required if the provider carrying out such a 
                program determines it is appropriate to use a 
                recent assessment of the participant conducted 
                pursuant to another education or training 
                program;
                  (B) develop service strategies for each 
                participant that are directly linked to 1 or 
                more of the performance measures relating to 
                this chapter under section 136, and that shall 
                identify an employment goal (including, in 
                appropriate circumstances, nontraditional 
                employment), appropriate achievement 
                objectives, and appropriate services for the 
                participant taking into account the assessment 
                conducted pursuant to subparagraph (A), except 
                that a new service strategy for a participant 
                is not required if the provider carrying out 
                such a program determines it is appropriate to 
                use a recent service strategy developed for the 
                participant under another education or training 
                program; and
                  (C) provide--
                          (i) activities leading to the 
                        attainment of a secondary school 
                        diploma or its equivalent, or another 
                        recognized credential;
                          [(i)] (ii) preparation for 
                        postsecondary educational opportunities 
                        and advanced training, in appropriate 
                        cases;
                          [(ii)] (iii) strong linkages between 
                        academics that lead to the attainment 
                        of recognized credentials and 
                        occupational learning 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);
                          [(iii)] (iv) preparation for 
                        unsubsidized employment opportunities, 
                        in appropriate cases;
                          [(iv) effective connections to 
                        intermediaries with strong links to--
                                  [(I) the job market; and
                                  [(II) local and regional 
                                employers.]
                          (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.--The programs described in 
        paragraph (1) shall provide elements consisting of--
                  (A) tutoring, study skills training, and 
                instruction, leading to completion of 
                [secondary school, including dropout prevention 
                strategies] 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) alternative secondary school services, as 
                appropriate, with a priority on exposing youth 
                to technology and nontraditional jobs;

           *       *       *       *       *       *       *

                  (F) leadership development opportunities, 
                which may include community service and peer-
                centered activities enouraging responsibility 
                and other positive social behaviors [during 
                non-school hours], as appropriate;

           *       *       *       *       *       *       *

                  (I) followup services for not less than 12 
                months after the completion of participation, 
                as appropriate; [and]
                  (J) comprehensive guidance and counseling, 
                which may include drug and alcohol abuse 
                counseling and referral, as appropriate[.];
                  (K) on-the-job training opportunities;
                  (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.

           *       *       *       *       *       *       *

          [(4) Priority.--
                  [(A) In general.--At a minimum, 30 percent of 
                the funds described in paragraph (1) shall be 
                used to provide youth activities to out-of-
                school youth.
                  [(B) Exception.--A State that receives a 
                minimum allotment under section 127(b)(1) in 
                accordance with section 127(b)(1)(C)(iv)(II) or 
                under section 132(b)(1) in accordance with 
                section 132(b)(1)(B)(iv)(II) may reduce the 
                percentage described in subparagraph (A) for a 
                local area in the State, if--
                          [(i) after an analysis of the 
                        eligible youth population in the local 
                        area, the State determines that the 
                        local area will be unable to meet the 
                        percentage described in subparagraph 
                        (A) due to a low number of out-of-
                        school youth; and
                          [(ii)(I) the State submits to the 
                        Secretary, for the local area, a 
                        request including a proposed reduced 
                        percentage for purposes of subparagraph 
                        (A), and the summary of the eligible 
                        youth population analysis; and
                          [(II) the request is approved by the 
                        Secretary.
          [(5) Exceptions.--Not more than 5 percent of 
        participants assisted under this section in each local 
        area may be individuals who do not meet the minimum 
        income criteria to be considered eligible youth, if 
        such individuals are within one or more of the 
        following categories:
                  [(A) Individuals who are school dropouts.
                  [(B) Individuals who are basic skills 
                deficient.
                  [(C) Individuals with educational attainment 
                that is one or more grade levels below the 
                grade level appropriate to the age of the 
                individuals.
                  [(D) Individuals who are pregnant or 
                parenting.
                  [(E) Individuals with disabilities, including 
                learning disabilities.
                  [(F) Individuals who are homeless or runaway 
                youth.
                  [(G) Individuals who are offenders.
                  [(H) Other eligible youth who face serious 
                barriers to employment as identified by the 
                local board.]
          [(6)] (4) Prohibitions.--
                  (A) Prohibition against federal control of 
                education.--No provision of this Act shall be 
                construed to authorize any department, agency, 
                officer, or employee of the United States to 
                exercise any direction, supervision, or control 
                over the curriculum, program of instruction, 
                administration, or personnel of any educational 
                institution, school, or school system, or over 
                the selection of library resources, textbooks, 
                or other printed or published instructional 
                materials by any educational institution, 
                school, or school system.
                  [(B) Nonduplication.--All of the funds made 
                available under this Act shall be used in 
                accordance with the requirements of this Act. 
                None of the funds made available under this Act 
                may be used to provide funding under the 
                School-to-Work Opportunities Act of 1994 (20 
                U.S.C. 6101 et seq.) or to carry out, through 
                programs funded under this Act, activities that 
                were funded under the School-to-Work 
                Opportunities Act of 1994, unless the programs 
                funded under this Act serve only those 
                participants eligible to participate in the 
                programs under this Act.]
                  [(C)] (B) Noninterference and nonreplacement 
                of regular academic requirements.--No funds 
                described in paragraph (1) shall be used to 
                provide an activity for eligible youth who are 
                not school dropouts if participation in the 
                activity would interfere with or replace the 
                regular academic requirements of the youth.
          [(7)] (5) Linkages.--In coordinating the programs 
        authorized under this section, [youth councils] local 
        boards shall establish linkages with educational 
        agencies responsible for services to participants as 
        appropriate.
          [(8)] (6) Volunteers.--The local board shall make 
        opportunities available for individuals who have 
        successfully participated in programs carried out under 
        this section to volunteer assistance to participants in 
        the form of mentoring, tutoring, and other activities.

           *       *       *       *       *       *       *


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


SEC. 131. * * *

           *       *       *       *       *       *       *


SEC. 132. STATE ALLOTMENTS.

    (a) In General.--The Secretary shall--
          (1) make allotments and grants from the total amount 
        appropriated under section 137(b) for a fiscal year in 
        accordance with subsection (b)(1); and
          (2)(A) reserve 20 percent of the amount appropriated 
        under section 137(c) for a fiscal year for use under 
        subsection (b)(2)(A), and under sections 170(b) 
        (relating to dislocated worker technical assistance), 
        171(d) (relating to dislocated worker projects), and 
        173 (relating to [national emergency grants] national 
        dislocated worker grants, other than under subsection 
        (a)(4), (f), and (g)); and
          (B) make allotments from 80 percent of the amount 
        appropriated under section 137(c) for a fiscal year in 
        accordance with subsection (b)(2)(B).
    (b) Allotment Among States.--
          (1) Adult employment and training activities.--
                  (A) Reservation for outlying areas.--
                          (i) In general.--* * *
                          (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for adult employment and training 
                        activities and Statewide workforce 
                        investment activities in accordance 
                        with the requirements of section 
                        [127(b)(1)(B), except that the 
                        reference in section 
                        127(b)(1)(B)(i)(II) to sections 252(d) 
                        and 262(a)(1) of the Job Training 
                        Partnership Act shall be deemed to be a 
                        reference to section 202(a)(1) of the 
                        Job Training Partnership Act (as in 
                        effect on the day before the date of 
                        enactment of this Act),] 127(b)(1)(B).
                  (B) States.--
                          (i) In general.--* * *
                          [(ii) Formula.--Subject to clauses 
                        (iii) and (iv), of the remainder--
                                  [(I) 33\1/3\ percent shall be 
                                allotted on the basis of the 
                                relative number of unemployed 
                                individuals in areas of 
                                substantial unemployment in 
                                each State, compared to the 
                                total number of unemployed 
                                individuals in areas of 
                                substantial unemployment in all 
                                States;
                                  [(II) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative excess number of 
                                unemployed individuals in each 
                                State, compared to the total 
                                excess number of unemployed 
                                individuals in all States; and
                                  [(III) 33\1/3\ percent shall 
                                be allotted on the basis of the 
                                relative number of 
                                disadvantaged adults in each 
                                State, compared to the total 
                                number of disadvantaged adults 
                                in all States, except as 
                                described in clause (iii).]
                          (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).
                          (iii) Calculation.--In determining an 
                        allotment under clause (ii)(111) for 
                        any State in which there is a local 
                        area designated under [section 
                        116(a)(2)(B)] section 
                        116(a)(2)(A)(iii), the allotment shall 
                        be based on the higher of--

           *       *       *       *       *       *       *

                                  (II) Small state minimum 
                                allotment.--Subject to 
                                [subclauses (I), (III), and 
                                (IV)] subclauses (I) and (III), 
                                the Secretary shall ensure that 
                                no State shall receive an 
                                allotment under this 
                                subparagraph that is less than 
                                the total of--

           *       *       *       *       *       *       *

                                  [(IV) Minimum funding.--In 
                                any fiscal year in which the 
                                remainder described in clause 
                                (i) does not exceed 
                                $960,000,000, the minimum 
                                allotments under subclauses (I) 
                                and (II) shall be calculated by 
                                the methodology for calculating 
                                the corresponding allotments 
                                under part A of title II of the 
                                Job Training Partnership Act, 
                                as in effect on July 1, 1998.]

           *       *       *       *       *       *       *

          (2) Dislocated worker employment and training.--
                  (A) Reservation for outlying areas.--
                          (i) In general.--* * *
                          (ii) Applicability of additional 
                        requirements.--From the amount reserved 
                        under clause (i), the Secretary shall 
                        provide assistance to the outlying 
                        areas for dislocated worker employment 
                        and training activities and statewide 
                        workforce investment activities in 
                        accordance with the requirements of 
                        [section 127(b)(1)(B), except that the 
                        reference in section 
                        127(b)(1)(B)(i)(II) to sections 252(a) 
                        and 262(a)(1) of the Job Training 
                        Partnership Act shall be deemed to be a 
                        reference to section 302(e) of the Job 
                        Training Partnership Act (as in effect 
                        on the day before the date of enactment 
                        of this Act).] section 127(b)(1)(B).

           *       *       *       *       *       *       *

    (c) Reallotment.--
          (1) In general.--* * *
          [(2) Amount.--The amount available for reallotment 
        for a program year is equal to the amount by which the 
        unobligated balance of the State allotments under this 
        section for such activities, at the end of the program 
        year prior to the program year for which the 
        determination under this paragraph is made, exceeds 20 
        percent of such allotments for the prior program year.]
          (2) Amount.--The amount available for reallotment for 
        a program year 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
                  (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.
          (3) Reallotment.--In making reallotments to eligible 
        States of amounts available pursuant to paragraph (2) 
        for a program year, the Secretary shall allot to each 
        eligible State an amount based on the relative amount 
        allotted to such State [under this section for such 
        activities for the prior program year] under subsection 
        (b)(1)(B) or (b)(2)(B), as appropriate, for the program 
        year for which the determination is made, as compared 
        to the total amount allotted to all eligible States 
        [under this section for such activities for such prior 
        program year] under subsection (b)(1)(B) or (B)(2)(B), 
        as appropriate, for such program year.
          [(4) Eligibility.--For purposes of this subsection, 
        an eligible State means a State that has obligated at 
        least 80 percent of the State allotment under this 
        section for such activities for the program year prior 
        to the program year for which the determination under 
        paragraph (2) is made.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible State means--
                  (A) 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
          (5) Procedures.--The Governor of each State shall 
        prescribe uniform procedures for the [obligation] 
        accrued expenditure of funds by local areas within the 
        State in order to avoid the requirement that funds be 
        made available for reallotment under this subsection. 
        The Governor shall further prescribe equitable 
        procedures for making funds available from the State 
        and local areas in the event that a State is required 
        to make funds available for reallotment under this 
        subsection.

           *       *       *       *       *       *       *


SEC. 133. WITHIN STATE ALLOCATIONS.

    (a) Reservations for State Activities.--
          (1) Statewide workforce investment activities.--* * *

           *       *       *       *       *       *       *

          (5) * * *

           *       *       *       *       *       *       *

                  (B) * * *
                          (ii) Dislocated workers.--Funds 
                        allocated under paragraph (2)(B) shall 
                        be used by a local area to contribute 
                        proportionately to the costs of the 
                        one-stop delivery system described in 
                        [section 134(c)] section 121(e) in the 
                        local area, and to pay for employment 
                        and training activities provided to 
                        dislocated workers in the local area, 
                        consistent with section 134.

           *       *       *       *       *       *       *

    (c) Reallocation Among Local Areas.--
          (1) In general.--The Governor may, in accordance with 
        this subsection, reallocate to eligible local areas 
        within the State amounts that are allocated under 
        paragraph (2)(A) or (3) of subsection (b) for adult 
        employment and training activities, and under 
        subsection (b)(2)(B) for dislocated worker employment 
        and training activities, and that are available for 
        reallocation.
          [(2) Amount.--The amount available for reallocation 
        for a program year is equal to the amount by which the 
        unobligated balance of the local area allocation under 
        paragraph (2)(A) or (3) of subsection (b) for such 
        activities, at the end of the program year prior to the 
        program year for which the determination under this 
        paragraph is made exceeds 20 percent of such allocation 
        for the prior program year.]
          (2) Amount.--The amount available for reallocation 
        for a program year 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.
          [(3) Reallocation.--In making reallocations to 
        eligible local areas of amounts available pursuant to 
        paragraph (2) for a program year, the Governor shall 
        allocate to each eligible local area within the State 
        an amount based on the relative amount allocated to 
        such local area under subsection (b)(3) for such 
        activities for the prior program year, as compared to 
        the total amount allocated to all eligible local areas 
        in the State under subsection (b)(3) for such 
        activities for such prior program year. For purposes of 
        this paragraph, local areas that received allocations 
        under subsection (b)(2)(A) for the prior program year 
        shall be treated as if the local areas received 
        allocations under subsection (b)(3) for such year.]
          (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.
          [(4) Eligibility.--For purposes of this subsection, 
        an eligible local area means a local area that has 
        obligated at least 80 percent of the local area 
        allocation under paragraph (2)(A) or (3) of subsection 
        (b) for such activities, for the program year prior to 
        the program year for which the determination under 
        paragraph (2) is made.]
          (4) Eligibility.--For purposes of this subsection, an 
        eligible local area means--
                  (A) 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.

           *       *       *       *       *       *       *


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

    (a) Statewide Employment and Training Activities.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

          (2) Required statewide employment and training 
        activities.--
                  [(A) Statewide rapid response activities.--A 
                State shall use funds reserved as described in 
                section 133(a)(2) to carry out statewide rapid 
                response activities, which shall include--
                          [(i) provision of rapid response 
                        activities, carried out in local areas 
                        by the State or by an entity designated 
                        by the State, working in conjunction 
                        with the local boards and the chief 
                        elected officials in the local areas; 
                        and
                          [(ii) provision of additional 
                        assistance to local areas that 
                        experience disasters, mass layoffs or 
                        plant closings, or other events that 
                        precipitate substantial increases in 
                        the number of unemployed individuals, 
                        carried out in local areas by the State 
                        or by an entity designated by the 
                        State, working in conjunction with the 
                        local boards and the chief elected 
                        officials in the local areas.]
                  (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 
                        subparagraph (B) and paragraph (3)(A) 
                        in addition to activities under this 
                        subparagraph.
                  [(B) Other required statewide employment and 
                training activities.--A State shall use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out other statewide employment and 
                training activities, which shall include--
                          [(i) disseminating the State list of 
                        eligible providers of training 
                        services, including eligible providers 
                        of nontraditional training services, 
                        information identifying eligible 
                        providers of on-the-job training and 
                        customized training, and performance 
                        information and program cost 
                        information, as described in 
                        subsections (e) and (h) of section 122;
                          [(ii) conducting evaluations, under 
                        section 136(e), of activities 
                        authorized in this section, in 
                        coordination with the activities 
                        carried out under section 172;
                          [(iii) providing incentive grants to 
                        local areas for regional cooperation 
                        among local boards (including local 
                        boards for a designated region as 
                        described in section 116(c)), for local 
                        coordination of activities carried out 
                        under this Act, and for exemplary 
                        performance by local areas on the local 
                        performance measures;
                          [(iv) providing technical assistance 
                        to local areas that fail to meet local 
                        performance measures;
                          [(v) assisting in the establishment 
                        and operation of one-stop delivery 
                        systems described in subsection (c); 
                        and
                          [(vi) operating a fiscal and 
                        management accountability information 
                        system under section 136(f).]
                  (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) (regardless 
                of whether the funds were allotted to the 
                States under section 127(b)(1)(C) or paragraph 
                (1)(B) or (2)(B) of section 132(b)) 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 (d) 
                                and (i) of section 122; and
                                  (IV) information on physical 
                                and programmatic accessibility 
                                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) employment 
                                        services under the 
                                        Wagner-Peyser Act and 
                                        core activities under 
                                        this title; and
                                          (bb) one-stop partner 
                                        programs described in 
                                        section 121;
                                  (III) performance by local 
                                areas as described in section 
                                136(1)(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) 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) 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;
                          (vi) operating a fiscal and 
                        management accountability system under 
                        section 136(f); and
                          (vii) carrying out monitoring and 
                        oversight of activities carried out 
                        under this chapter and chapter 4.
          (3) Allowable statewide employment and training 
        activities.--
                  [(A) In general.--A State may use funds 
                reserved as described in sections 128(a) and 
                133(a)(1) (regardless of whether the funds were 
                allotted to the State under section 127(b)(1) 
                or paragraph (1) or (2) of section 132(b)) to 
                carry out additional statewide employment and 
                training activities, which may include--
                          [(i) subject to subparagraph (B), 
                        administration by the State of the 
                        activities authorized under this 
                        section;
                          [(ii) provision of capacity building 
                        and technical assistance to local 
                        areas, one-stop operators, one-stop 
                        partners, and eligible providers, 
                        including the development and training 
                        of staff and the development of 
                        exemplary program activities;
                          [(iii) conduct of research and 
                        demonstrations;
                          [(iv)(I) implementation of innovative 
                        incumbent worker training programs, 
                        which may include the establishment and 
                        implementation of an employer loan 
                        program to assist in skills upgrading; 
                        and
                          [(II) the establishment and 
                        implementation of programs targeted to 
                        empowerment zones and enterprise 
                        communities;
                          [(v) support for the identification 
                        of eligible providers of training 
                        services as required under section 122;
                          [(vi)(I) implementation of innovative 
                        programs for displaced homemakers, 
                        which for purposes of this subclause 
                        may include an individual who is 
                        receiving public assistance and is 
                        within 2 years of exhausting lifetime 
                        eligibility under part A of title IV of 
                        the Social Security Act (42 U.S.C. 601 
                        et seq.); and
                          [(II) implementation of programs to 
                        increase the number of individuals 
                        training for and placed in 
                        nontraditional employment; and
                          [(vii) carrying out other activities 
                        authorized in this section that the 
                        State determines to be necessary to 
                        assist local areas in carrying out 
                        activities described in subsection (d) 
                        or (e) through the statewide workforce 
                        investment system.]
                  (A) In general.--Funds reserved by a Governor 
                for a State under sections 128(a)(1) and 
                133(a)(1) and not used under paragraph (1)(A) 
                or (2)(B) (regardless of whether the funds were 
                allotted to the State under section 
                127(b)(1)(C) or paragraph (1)(B) or (2)(B) of 
                section 132(b)) may be used 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 
                        investment activities and make the 
                        workforce investment system more 
                        relevant to the needs of State and 
                        local businesses, consistent with the 
                        objectives of this title;
                          (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 clause 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) implementing programs to 
                        increase the number of individuals 
                        training for and placed in 
                        nontraditional employment;
                          (v) 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;
                          (vi) supporting the provision of core 
                        services described in subsection (d)(2) 
                        in the one-stop delivery system in the 
                        State;
                          (vii) 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;
                          (viii) 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, 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;
                                  (IV) to improve coordination 
                                between employment and training 
                                assistance and 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);
                                  (V) to develop and 
                                disseminate workforce and labor 
                                market information; and
                                  (VI) to improve coordination 
                                with the corrections system to 
                                facilitate provision of 
                                training services and 
                                employment opportunities that 
                                will assist ex-offenders in 
                                reentering the workforce;
                          (ix) conducting--
                                  (I) research; and
                                  (II) demonstration projects; 
                                and
                          (x) 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.

           *       *       *       *       *       *       *

    (d) Required Local Employment and Training Activities.--
          (1) In general.--
                (A) Allocated funds.--* * *
                          (i) to establish a one-stop delivery 
                        system [described in subsection (c)];
                          (ii) to provide the core services 
                        described in paragraph (2) to adults 
                        and dislocated workers, respectively, 
                        through the one-stop delivery system in 
                        accordance with such paragraph;
                          (iii) to provide the intensive 
                        services described in paragraph (3) to 
                        adults and dislocated workers, 
                        respectively, described in such 
                        paragraph; [and]
                          (iv) to provide training services 
                        described in paragraph (4) to adults 
                        and dislocated workers, respectively, 
                        described in such paragraph[.];
                          (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 collocation of 
                        employment services provided under the 
                        Wagner-Peyser Act at the comprehensive 
                        one-stop centers.

           *       *       *       *       *       *       *

          (2) Core services.--Funds described in [paragraph 
        (1)(A)] paragraph (1) shall be used to provide core 
        services, which shall be available to individuals who 
        are adults or dislocated workers through the one-stop 
        delivery system and shall, at a minimum, include--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(D) job search and placement assistance, and 
                where appropriate, career counseling;]
                  (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 
                        onestop delivery system;
                  (E) provision of employment statistics 
                information, including the provision of 
                accurate information relating to local, 
                regional, and national labor market areas, 
                including--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) information relating to local 
                        occupations in demand and the earnings, 
                        career ladders, and skill requirements 
                        for such occupations; [and]
                  (F) provision of performance information [and 
                program cost information] on eligible providers 
                of training services as described in section 
                122, provided by program, and eligible 
                providers of youth activities [described in 
                section 123], providers of adult education 
                described in title II, providers of 
                postsecondary vocational education activities 
                and vocational education activities available 
                to school dropouts under the Carl D. Perkins 
                Vocational and Applied Technology Education Act 
                (20 U.S.C. 2301 et seq.), and providers of 
                vocational rehabilitation program activities 
                described in title I of the Rehabilitation Act 
                of 1973 (29 U.S.C. 720 et seq.);

           *       *       *       *       *       *       *

                  [(H) provision of accurate information 
                relating to the availability of supportive 
                services, including child care and 
                transportation, available in the local area, 
                and referral to such services, as appropriate;]
                  (H) provision of accurate information, in 
                formats that are usable and understandable to 
                all one-stop center customers, relating to the 
                availability of supportive services or 
                assistance, including child care, 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;

           *       *       *       *       *       *       *

                  (J) assistance in establishing eligibility 
                [for--
                          [(i) welfare-to-work activities 
                        authorized under section 403(a)(5) of 
                        the Social Security Act (as added by 
                        section 5001 of the Balanced Budget Act 
                        of 1997) available in the local area; 
                        and
                          [(ii) programs] for programs of 
                        financial aid assistance for training 
                        and education programs that are not 
                        funded under this Act and are available 
                        in the local area; and

           *       *       *       *       *       *       *

          (3) Intensive services.--
                  [(A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to the local area for dislocated 
                workers under section 133(b)(2)(B), shall be 
                used to provide intensive services to adults 
                and dislocated workers, respectively--
                          [(i)(I) who are unemployed and are 
                        unable to obtain employment through 
                        core services provided under paragraph 
                        (2); and
                          [(II) who have been determined by a 
                        one-stop operator to be in need of more 
                        intensive services in order to obtain 
                        employment; or
                          [(ii) who are employed, but who are 
                        determined by a one-stop operator to be 
                        in need of such intensive services in 
                        order to obtain or retain employment 
                        that allows for self-sufficiency.]
                  (A) In general.--
                          (i) Eligibility.--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 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.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                          (vii) Internships and work 
                        experience.
                          (viii) Literacy activities relating 
                        to basic work readiness, and financial 
                        literacy activities.
                          (ix) Out-of-area job search 
                        assistance and relocation assistance.
                          (x) English language acquisition and 
                        integrated training programs.

           *       *       *       *       *       *       *

          (4) Training services.--
                  [(A) In general.--Funds allocated to a local 
                area for adults under paragraph (2)(A) or (3), 
                as appropriate, of section 133(b), and funds 
                allocated to a local area for dislocated 
                workers under section 133(b)(2)(B) shall be 
                used to provide training services to adults and 
                dislocated workers, respectively--
                          [(i) who have met the eligibility 
                        requirements for intensive services 
                        under paragraph (3)(A) and who are 
                        unable to obtain or retain employment 
                        through such services;
                          [(ii) who after an interview, 
                        evaluation, or assessment, and case 
                        management, have been determined by a 
                        one-stop operator or one-stop partner, 
                        as appropriate, to be in need of 
                        training services and to have the 
                        skills and qualifications to 
                        successfully participate in the 
                        selected program of training services;
                          [(iii) who select programs of 
                        training services that are directly 
                        linked to the employment opportunities 
                        in the local area involved or in 
                        another area in which the adults or 
                        dislocated workers receiving such 
                        services are willing to relocate;
                          [(iv) who meet the requirements of 
                        subparagraph (B); and
                          [(v) who are determined to be 
                        eligible in accordance with the 
                        priority system, if any, in effect 
                        under subparagraph (E).]
                  (A) In general.--
                          (i) Eligibility.--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).
                          (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.
                  (B) Qualification.--
                          (i) Requirement.--[Except] 
                        Notwithstanding section 479B of the 
                        Higher Education Act of 1965 (20 U.S.C. 
                        1087uu) and except as provided in 
                        clause (ii), provision of such training 
                        services shall be limited to 
                        individuals who--

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                          (viii) adult education and literacy 
                        activities provided in combination with 
                        services described in any of clauses 
                        (i) through (vii); [and]
                          (ix) customized training conducted 
                        with a commitment by an employer or 
                        group of employers to employ an 
                        individual upon successful completion 
                        of the training[.] ; and
                          (x) English language acquisition and 
                        integrated training programs.

           *       *       *       *       *       *       *

                  (F) Consumer choice requirements.--
                          (i) In general.--* * *
                          (ii) Eligible providers.--Each local 
                        board, through one-stop centers shall 
                        make available a list of eligible 
                        providers of training services, and 
                        accompanying information, in accordance 
                        with section 122(d). [referred to in 
                        subsection (c), shall make available--
                                  [(I) the State list of 
                                eligible providers of training 
                                services required under section 
                                122(e), with a description of 
                                the programs through which the 
                                providers may offer the 
                                training services, and the 
                                information identifying 
                                eligible providers of on-the-
                                job training and customized 
                                training required under section 
                                122(h); and
                                  [(II) the performance 
                                information and performance 
                                cost information relating to 
                                eligible providers of training 
                                services described in 
                                subsections (e) and (h) of 
                                section 122.]
                          (iii) [Individual training accounts] 
                        Career scholarship accounts.--An 
                        individual who seeks training services 
                        and who is eligible pursuant to 
                        subparagraph (A), may, in consultation 
                        with a case manager, select an eligible 
                        provider of training services from the 
                        list or [identifying information] 
                        accompanying information for providers 
                        described in [clause (ii)(I)] clause 
                        (ii). Upon such selection, the one-stop 
                        operator involved shall, to the extent 
                        practicable, refer such individual to 
                        the eligible provider of training 
                        services, and arrange for payment for 
                        such services through an [individual 
                        training account] career scholarship 
                        account.
                          (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.
                  (G) Use of [individual training Accounts] 
                career scholarship accounts.--
                          (i) In general.--Except as provided 
                        in clause (ii), training services 
                        provided under this paragraph shall be 
                        provided through the use of [individual 
                        training accounts] career scholarship 
                        accounts in accordance with this 
                        paragraph, and shall be provided to 
                        eligible individuals through the one-
                        stop delivery system.
                          (ii) Exceptions.--Training services 
                        authorized under this paragraph may be 
                        provided pursuant to a contract for 
                        services in lieu of a[n individual 
                        training account] career scholarship 
                        account if the requirements of 
                        subparagraph (F) are met and if--
                                  (I) such services are on-the-
                                job training provided by an 
                                employer or customized 
                                training;
                                  (II) the local board 
                                determines there are an 
                                insufficient number of eligible 
                                providers of training services 
                                in the local area involved 
                                (such as in a rural area) to 
                                accomplish the purposes of a 
                                system of [individual training 
                                accounts] career scholarship 
                                accounts; [or]
                                  (III) the local board 
                                determines that there is a 
                                training services program of 
                                demonstrated effectiveness 
                                offered in the local area by a 
                                community-based organization or 
                                another private organization to 
                                serve [special participant 
                                populations that face multiple 
                                barriers to employment] hard-
                                to-serve populations[.]; or
                                  (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.

           *       *       *       *       *       *       *

                          (iv) Definition.--* * *
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (IV) Individuals with 
                                disabilities.
                                  [(IV)] (V) Other hard-to-
                                serve populations as defined by 
                                the Governor involved.
    [(e) Permissible Local Employment and Training 
Activities.--
          [Discretionary one-stop delivery activities.--Funds 
        allocated to a local area for adults under paragraph 
        (2)(A) or (3), as appropriate, of section 133(b), and 
        funds allocated to the local area for dislocated 
        workers under section 133(b)(2)(B), may be used to 
        provide, through one-stop delivery described in 
        subsection (c)(2)--
                  [(A) customized screening and referral of 
                qualified participants in training services 
                described in subsection (d)(4) to employment; 
                and
                  [(B) customized employment-related services 
                to employers on a fee-for-service basis.]
    (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, for 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, 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 in 
                                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 investment 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 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 
                                        investment 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 
                                        title, to appropriate 
                                        area employers, 
                                        including small and 
                                        midsized employers;
                                          (gg) information 
                                        referral on concerns 
                                        affecting local 
                                        employers; and
                                          (hh) other business 
                                        services and strategies 
                                        designed to better 
                                        engage employers in 
                                        workforce investment 
                                        activities and to make 
                                        the workforce 
                                        investment system more 
                                        relevant to the 
                                        workforce investment 
                                        needs of area 
                                        businesses, as 
                                        determined by the local 
                                        board to be consistent 
                                        with the objectives of 
                                        this title;
                          (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; and
                          (xiii) improved coordination between 
                        employment and training assistance and 
                        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).
          (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 onsite child care while such 
                activities are being provided.
          [(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--]
          (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--

           *       *       *       *       *       *       *

          (4) Incumbent worker training programs.--
                  (A) In general.--The local board may use up 
                to 10 percent of the funds allocated to the 
                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.

           *       *       *       *       *       *       *


                     CHAPTER 6--GENERAL PROVISIONS


SEC. 136. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--* * *

           *       *       *       *       *       *       *

          (2) Indicators of performance.--
                  (A) Core indicators of performance.--
                          (i) In general.--The core indicators 
                        of performance for employment and 
                        training activities authorized under 
                        section 134 (except for self-service 
                        and informational activities) [and (for 
                        participants who are eligible youth age 
                        19 through 21) for youth activities 
                        authorized under section 129] shall 
                        consist of--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  [(III) earnings received in 
                                unsubsidized employment 6 
                                months after entry into the 
                                employment; and]
                                  (III) increases in earnings 
                                from unsubsidized employment; 
                                and
                                  (IV) attainment of a 
                                recognized credential relating 
                                to achievement of educational 
                                skills, which may include 
                                attainment of a secondary 
                                school diploma or its 
                                recognized equivalent, or 
                                occupational skills, by 
                                participants who enter 
                                unsubsidized employment[, or by 
                                participants who are eligible 
                                youth age 19 through 21 who 
                                enter postsecondary education, 
                                advanced training, or 
                                unsubsidized employment].
                          [(ii) Core indicators for eligible 
                        youth.--The core indicators of 
                        performance (for participants who are 
                        eligible youth age 14 through 18) for 
                        youth activities authorized under 
                        section 129, shall include--
                                  [(I) attainment of basic 
                                skills and, as appropriate, 
                                work readiness or occupational 
                                skills;
                                  [(II) attainment of secondary 
                                school diplomas their 
                                recognized equivalents; and
                                  [(III) placement and 
                                retention in postsecondary 
                                education or advanced training, 
                                or placement and retention in 
                                military service, employment, 
                                or qualified apprenticeships.]
                          (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.

           *       *       *       *       *       *       *

                  [(C) Additional indicators.--A State may 
                identify in the State plan additional 
                indicators for workforce investment activities 
                authorized under this subtitle.]
                  (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.--
                  (A) State adjusted levels of performance for 
                core indicators and customer satisfaction 
                indicator.--
                          (i) In general.--* * *

           *       *       *       *       *       *       *

                          (iii) Agreement on state adjusted 
                        levels of performance [for first 3 
                        years].--In order to ensure an optimal 
                        return on the investment of Federal 
                        funds in workforce investment 
                        activities authorized under this 
                        subtitle, the Secretary and each 
                        Governor shall reach agreement on 
                        levels of performance for each of the 
                        core indicators of performance, [and 
                        the customer satisfaction indicator of 
                        performance, for the first 3] described 
                        in clauses (i) and (ii) of paragraph 
                        (2)(A) and the customer satisfaction 
                        indicator of performance, for the first 
                        2 program years covered by the State 
                        plan, taking into account the levels 
                        identified in the State plan under 
                        clause (ii) and the factors described 
                        in clause (iv). The levels agreed to 
                        under this clause shall be considered 
                        to be the State adjusted levels of 
                        performance for the State for such 
                        years and shall be incorporated into 
                        the State plan prior to the approval of 
                        such plan. 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.
                          (iv) Factors.--The agreement 
                        described in clause (iii) or (v) shall 
                        take into account--
                                  (I) the extent to which the 
                                levels involved will assist the 
                                State in attaining a high level 
                                of customer satisfaction;
                                  (II) how the levels involved 
                                compare with the State adjusted 
                                levels of performance 
                                established for other States, 
                                [taking into account] and shall 
                                ensure that the levels involved 
                                are adjusted, using objective 
                                statistical methods, based on 
                                factors including differences 
                                in economic conditions (such as 
                                differences in unemployment 
                                rates and job losses or gains 
                                in particular industries), the 
                                characteristics of participants 
                                when the participants entered 
                                the program (such as indicators 
                                of poor work history, lack of 
                                work experience, lack of 
                                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), and the services 
                                to be provided; [and]
                                  (III) the extent to which 
                                such levels involved promote 
                                continuous improvement in 
                                performance on the performance 
                                measures by such State and 
                                ensure optimal return on the 
                                investment of Federal funds[.]; 
                                and
                                  (IV) the extent to which the 
                                levels involved will assist the 
                                State in meeting the national 
                                goals described in clause (v).
                          [(v) Agreement on state adjusted 
                        levels of performance for 4th and 5th 
                        years.--Prior to the 4th program year 
                        covered by the State plan, the 
                        Secretary and each Governor shall reach 
                        agreement on levels of performance for 
                        each of the core indicators of 
                        performance and the customer 
                        satisfaction indicator of performance, 
                        for the 4th and 5th program years 
                        covered by the State plan, taking into 
                        account the factors described in clause 
                        (iv). The levels agreed to under this 
                        clause shall be considered to be the 
                        State adjusted levels of performance 
                        for the State for such years and shall 
                        be incorporated into the State plan.]
                          (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.
                          (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause 
                        (iv)(II), the Governor may request that 
                        the State adjusted levels of 
                        performance agreed to under clause 
                        (iii) [or (v)] be revised. The 
                        Secretary, after collaboration [with 
                        the representatives described in 
                        subsection (i)] with the States and 
                        other interested parties, shall issue 
                        objective criteria and methods for 
                        making such revisions.

           *       *       *       *       *       *       *

    (c) Local Performance Measures.--
          (1) In general.--For each local area in a State, the 
        local performance measures shall consist of--

           *       *       *       *       *       *       *

          (3) Determinations.--In determining such local levels 
        of performance, the local board, the chief elected 
        official, and the Governor [shall take into account] 
        shall ensure that the levels involved are adjusted, 
        using objective statistical methods, based on the 
        specific economic (characteristics such as unemployment 
        rates and job losses or gains in particular 
        industries), demographic (characteristics such as 
        indicators of poor work history, lack of work 
        experience, lack of 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), and other characteristics of the 
        populations to be served in the local area.

           *       *       *       *       *       *       *

    (d) Report.--
          (1) In general.--* * * In the case of a State or 
        local area that chooses to expend funds for activities 
        under subsection (a)(3)(A)(i) or (e)(1)(A)(xi), 
        respectively, of section 134, the report also shall 
        include the amount of such funds so expended and the 
        percentage that such funds are of the funds available 
        for activities under section 134.
          (2) Additional information.--* * *

           *       *       *       *       *       *       *

                  (E) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of participants in 
                workforce investment activities who received 
                the training services compared with the 
                performance of participants in workforce 
                investment activities who received only 
                services other than the training services 
                [excluding participants who received only self-
                service and informational activities]; [and]
                  (F) performance with respect to the 
                indicators of performance specified in 
                subsection (b)(2)(A) of recipients of public 
                assistance, out-of-school youth, veterans, 
                individuals with disabilities, displaced 
                homemakers, noncustodial parents with child 
                support obligations, homeless individuals, and 
                older individuals[.];
                  (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 
                        subsection (a)(3)(A)(i) or 
                        (e)(1)(A)(xi) of section 134, if 
                        applicable.

           *       *       *       *       *       *       *

          (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.
    (e) Evaluation of State Programs.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

          (3) Results.--The State shall periodically prepare 
        and submit to the State board, and local boards in the 
        State, reports containing the results of evaluation 
        studies conducted under this subsection, to promote the 
        efficiency and effectiveness of the statewide workforce 
        investment system in improving employability for 
        jobseekers and competitiveness for employers, including 
        information on promoting self-sufficiency and 
        comparable pay between men and women.

           *       *       *       *       *       *       *

    (g) Sanctions for State Failure To Meet State Performance 
Measures.--
          (1) States.--
                  (A) Technical assistance.--* * *
                  (B) Reduction in amount of grant.--[If such 
                failure continues for a second consecutive 
                year] If a State performs at less than 80 
                percent of the adjusted level of performance 
                for core indicators of performance described in 
                subsection (b)(2)(A) for 2 consecutive years, 
                or if a State fails to submit a report under 
                subsection (d) for any program year, the 
                Secretary may reduce by not more than 5 
                percent, the amount of the grant that would (in 
                the absence of this paragraph) be payable to 
                the State under such program for the 
                immediately succeeding program year. Such 
                penalty shall be based on the degree of failure 
                to meet State adjusted levels of performance.
          (2) Funds resulting from reduced allotments.--The 
        Secretary shall use an amount retained, as a result of 
        a reduction in an allotment to a State made under 
        paragraph (1)(B), to provide incentive grants under 
        [section 503] subsection (i)(1).
    (h) Sanctions for Local Area Failure To Meet Local 
Performance Measures.--
          (1) Technical assistance.--* * *
          (2) Corrective actions.--
                  (A) In general.--[If such failure continues 
                for a second consecutive year]  If a local area 
                performs at less than 80 percent of the 
                adjusted level of performance for core 
                indicators of performance described in 
                subsection (b)(2)(A) for 2 consecutive years, 
                the Governor shall take corrective actions, 
                which may include development of a 
                reorganization plan through which the Governor 
                may--

           *       *       *       *       *       *       *

                          (ii) prohibit the use of eligible 
                        providers and one-stop partners 
                        identified as achieving a poor level of 
                        performance; [or]
                          (iii) redesignate the local area in 
                        accordance with section 116(b)(2); or
                          [(iii)] (iv) take such other actions 
                        as the Governor determines are 
                        appropriate.

           *       *       *       *       *       *       *

    [(i) Other Measures and Terminology.--
          [(1) Responsibilities.--In order to ensure nationwide 
        comparability of performance data, the Secretary, after 
        collaboration with representatives of appropriate 
        Federal agencies, and representatives of States and 
        political subdivisions, business and industry, 
        employees, eligible providers of employment and 
        training activities, educators, and participants, with 
        expertise regarding workforce investment policies and 
        workforce investment activities, shall issue--
                  [(A) definitions for information required to 
                be reported under subsection (d)(2);
                  [(B) terms for a menu of additional 
                indicators of performance described in 
                subsection (b)(2)(C) to assist States in 
                assessing their progress toward State workforce 
                investment goals; and
                  [(C) objective criteria and methods described 
                in subsection (b)(3)(A)(vi) for making 
                revisions to levels of performance.
          [(2) Definitions for core indicators.--The Secretary 
        and the representatives described in paragraph (1) 
        shall participate in the activities described in 
        section 502 concerning the issuance of definitions for 
        indicators of performance described subsection 
        (b)(2)(A).
          [(3) Assistance.--The Secretary shall make the 
        services of staff available to the representatives to 
        assist the representatives in participating in the 
        collaboration described in paragraph (1) and in the 
        activities described in section 502.]
    (i) Incentive Grants for Local Areas.--
          (1) In general.--From funds reserved under sections 
        128(a) and 133(a)(1), the Governor involved shall award 
        incentive grants to local areas for performance 
        described in paragraph (2) in carrying out programs 
        under chapters 4 and 5.
          (2) Basis.--The Governor shall award the grants on 
        the basis--
                  (A) 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);
                  (B) of exemplary performance of the local 
                areas in serving hard-to-serve populations; or
                  (C) that the local areas are effectively--
                          (i) coordinating multiple systems 
                        into a comprehensive workforce 
                        investment system, including 
                        coordination of employment services 
                        under the Wagner-Peyser Act and core 
                        activities under this title as well as 
                        one-stop 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.
          (3) 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.
    (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.

           *       *       *       *       *       *       *


SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

    (a) Youth Activities.--There are authorized to be 
appropriated to carry out the activities described in section 
127(a), [such sums as may be necessary for each of fiscal years 
1999 through 2003] such sums as may be necessary for each of 
fiscal years 2004 through 2009.
    (b) Adult Employment and Training Activities.--There are 
authorized to be appropriated to carry out the activities 
described in section 132(a)(1), [such sums as may be necessary 
for each of fiscal years 1999 through 2003] such sums as may be 
necessary for each of fiscal years 2004 through 2009.
    (c) Dislocated Worker Employment and Training Activities.--
There are authorized to be appropriated to carry out the 
activities described in section 132(a)(2), [such sums as may be 
necessary for each of fiscal years 1999 through 2003] such sums 
as may be necessary for each of fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


Subtitle C--Job Corps

           *       *       *       *       *       *       *


SEC. 144. INDIVIDUALS ELIGIBLE FOR THE JOB CORPS.

           *       *       *       *       *       *       *


          (3) an individual who is one or more of the 
        following:
                  (A) Basic skills deficient.
                  (B) A school dropout.
                  (C) Homeless, a runaway, or a foster child.
                  (D) A parent.
                  (E) An individual who requires additional 
                education, vocational training, or intensive 
                counseling and related assistance, in order to 
                participate successfully in regular schoolwork 
                or to secure and hold employment.
                  (F) A child eligible for assistance under 
                section 477 of the Social Security Act.

           *       *       *       *       *       *       *


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

    (a) Standards and Procedures.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (3) Implementation.--To the extent practicable, the 
        standards and procedures shall be implemented through 
        arrangements with--
                  (A) applicable one-stop centers;
                  (B) community action agencies, business 
                organizations, and labor organizations; [and]
                  (C) agencies and individuals that have 
                contact with youth over substantial periods of 
                time and are able to offer reliable information 
                about the needs and problems of youth[.]; and
                  (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.

           *       *       *       *       *       *       *


SEC. 154. INDUSTRY COUNCILS.

    (a) In General.-- * * *
    (b) Industry Council Composition.--
          (1) In general.--An industry council shall be 
        comprised of--
                  (A) a majority of members who shall be [local 
                and distant] owners of business concerns, chief 
                executives or chief operating officers of 
                nongovernmental employers, or other private 
                sector employers, who--

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *


SEC. 159. MANAGEMENT INFORMATION.

    (a) Financial Management Information System.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (c) Information on Indicators of Performance.--
          [(1) Establishment.--The Secretary shall, with 
        continuity and consistency from year to year, establish 
        indicators of performance, and expected levels of 
        performance for Job Corps centers and the Job Corps 
        program, relating to--
                  [(A) the number of graduates and the rate of 
                such graduation, analyzed by type of vocational 
                training received through the Job Corps program 
                and by whether the vocational training was 
                provided by a local or national service 
                provider;
                  [(B) the number of graduates who entered 
                unsubsidized employment related to the 
                vocational training received through the Job 
                Corps program and the number who entered 
                unsubsidized employment not related to the 
                vocational training received, analyzed by 
                whether the vocational training was provided by 
                a local or national service provider and by 
                whether the placement in the employment was 
                conducted by a local or national service 
                provider;
                  [(C) the average wage received by graduates 
                who entered unsubsidized employment related to 
                the vocational training received through the 
                Job Corps program and the average wage received 
                by graduates who entered unsubsidized 
                employment unrelated to the vocational training 
                received;
                  [(D) the average wage received by graduates 
                placed in unsubsidized employment after 
                completion of the Job Corps program--
                          [(i) on the first day of the 
                        employment;
                          [(ii) 6 months after the first day of 
                        the employment; and
                          [(iii) 12 months after the first day 
                        of the employment,
                [analyzed by type of vocational training 
                received through the Job Corps program;
                  [(E) the number of graduates who entered 
                unsubsidized employment and were retained in 
                the unsubsidized employment--
                          [(i) 6 months after the first day of 
                        the employment; and
                          [(ii) 12 months after the first day 
                        of the employment;
                  [(F) the number of graduates who entered 
                unsubsidized employment--
                          [(i) for 32 hours per week or more;
                          [(ii) for not less than 20 but less 
                        than 32 hours per week; and
                          [(iii) for less than 20 hours per 
                        week;
                  [(G) the number of graduates who entered 
                postsecondary education or advanced training 
                programs, including apprenticeship programs, as 
                appropriate; and
                  [(H) the number of graduates who attained job 
                readiness and employment skills.]
          (1) 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 of youth 
        activities identified in section 136(b)(2)(A)(ii).
          (2) Performance of recruiters.--The Secretary shall 
        also establish performance [measures] indicators, and 
        expected performance levels on the performance 
        [measures] indicators, for local and national 
        recruitment service providers serving the Job Corps 
        program. The performance [measures] indicators shall 
        relate to the number of enrollees retained in the Job 
        Corps program for 30 days and for 60 days after initial 
        placement in the program.
          (3) Report.--The Secretary shall collect, and 
        annually submit a report to the appropriate committees 
        of Congress containing, information on the performance 
        of each Job Corps center, and the Job Corps program, on 
        the [core performance measures, as compared to the 
        expected performance level for each performance 
        measure] performance indicators described in paragraph 
        (1), as compared to the expected level of performance 
        established under paragraph (1) for each performance 
        measure. The report shall also contain information on 
        the performance of the service providers described in 
        paragraph (2) on the performance [measures] indicators 
        established under such paragraph, as compared to the 
        expected performance levels for the performance 
        [measures] indicators.
    (f) Performance Assessments and Improvements.--
          (1) Assessments.-- * * *
          (2) Performance improvement plans.--With respect to a 
        Job Corps center that fails to meet the expected levels 
        of performance relating to the [core performance 
        measures] indicators of performance specified in 
        subsection (c), the Secretary shall develop and 
        implement a performance improvement plan. Such a plan 
        shall require action including--

           *       *       *       *       *       *       *


SEC. 161. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
subtitle such sums as may be necessary for each of the fiscal 
years [1999 through 2003] 2004 through 2009.

           *       *       *       *       *       *       *


                     Subtitle D--National Programs

SEC. 166. NATIVE AMERICAN PROGRAMS.

    (a) Purpose.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (h) Administrative Provisions.--
          (1) Organizational unit established.-- * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  [(C) Duties.--The Council shall advise the 
                Secretary on aspects of the operation and 
                administration of the programs assisted under 
                this section, including the selection of the 
                individual appointed as the head of the unit 
                established under paragraph (1).]
                  (C) Duties.--The Council shall advise the 
                Secretary on the operation and administration 
                of the programs assisted under this section, 
                including the selection of the individual 
                appointed as head of the unit established under 
                paragraph (1).

           *       *       *       *       *       *       *

    [(j) Assistance to American Samoans in Hawaii.--
          [(1) In general.--Notwithstanding any other provision 
        of law, the Secretary is authorized to provide 
        assistance to American Samoans who reside in Hawaii for 
        the co-location of federally funded and State-funded 
        workforce investment activities.
          [(2) Authorization of appropriations.--There are 
        authorize to be appropriated for fiscal year 1999 such 
        sums as may be necessary to carry out this subsection.]
    (j) Assistance to Unique Populations in Alaska and 
Hawaii.--
          (1) In general.--Notwithstanding any other provision 
        of law, the Secretary is authorized to provide 
        assistance to unique 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.
    (k) 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. 167. MIGRANT AND SEASONAL FARMWORKER PROGRAMS.

    (a) In General.-- * * *

           *       *       *       *       *       *       *

    (d) Authorized Activities.--Funds made available under this 
section and section 127(b)(1)(A)(iii) shall be used to carry 
out workforce investment activities (including youth 
activities) and provide related assistance for eligible migrant 
and seasonal farmworkers, which may include employment, 
training, educational assistance, literacy assistance, an 
English language program, worker safety training, housing 
(including permanent housing), supportive services, dropout 
prevention activities, followup services for those individuals 
placed in employment, self-employment and related business 
enterprise development education as needed by eligible migrant 
and seasonal farmworkers and identified pursuant to the plan 
required by subsection (c), and technical assistance relating 
to capacity enhancement in such areas as management information 
technology.

           *       *       *       *       *       *       *


SEC. 168. VETERANS' WORKFORCE INVESTMENT PROGRAMS.

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

           *       *       *       *       *       *       *

          (3) Required activities.--Programs supported under 
        this section shall include--
                  (A) * * *
                  (B) * * *
                  (C) outreach and public information 
                activities to develop and promote maximum job 
                and job training opportunities for such 
                veterans and to inform such veterans about 
                employment, job training, on-the-job training 
                and educational opportunities under this title, 
                under title 38, United States Code, and under 
                other provisions of law, which activities shall 
                be coordinated with activities provided through 
                the one-stop centers described in [section 
                134(c)] section 121(e).

           *       *       *       *       *       *       *


[SEC. 169. YOUTH OPPORTUNITY GRANTS.

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

SEC. 169. YOUTH CHALLENGE GRANTS.

    (a) In General.--Of the amounts reserved by the Secretary 
under section 127(b)(1)(A) for a fiscal year--
          (1) the Secretary shall use not less than 80 percent 
        to award competitive grants under subsection (b); and
          (2) the Secretary may use not more than 20 percent to 
        award discretionary grants under subsection (c).
    (b) Competitive Grants to States and Local Areas.--
          (1) Establishment.--From the funds described in 
        subsection (a)(1), the Secretary shall award 
        competitive grants to eligible entities to carry out 
        activities authorized under this 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 investment 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 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. 170. TECHNICAL ASSISTANCE.

    (a) General Technical Assistance.--
          (1) In general.--The Secretary shall provide, 
        coordinate, and support the development of, appropriate 
        training, technical assistance, staff development, and 
        other activities, including assistance in replicating 
        programs of demonstrated effectiveness, to States and 
        localities, 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, and, in particular, to 
        assist States in making transitions [from carrying out 
        activities under the provisions of law repeated under 
        section 199 to carrying out activities under this 
        title.] to implement the amendments made by the 
        Workforce Investment Act Amendments of 2003.
          (2) Form of assistance.--In carrying out paragraph 
        (1) on behalf of a State, or recipient of financial 
        assistance under any of sections 166 through 169, the 
        Secretary, after consultation with the State or grant 
        recipient, may award grants and enter into contracts 
        and cooperative agreements. The Secretary shall also 
        hire staff qualified to provide the assistance 
        described in paragraph (1).

           *       *       *       *       *       *       *

    (b) Dislocated Worker Technical Assistance.--
          (1) Authority.--* * *
          (2) Training.--Amounts reserved under this subsection 
        may be used to provide for the training of staff, 
        including specialists, who provide rapid response 
        services. Such training shall include instruction in 
        proven methods of promoting, establishing, and 
        assisting labor-management committees. [Such projects 
        shall be administered through the dislocated worker 
        office described in section 173(b)] Such projects shall 
        be administered by the Employment and Training 
        Administration.
    (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;
          (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. 171. DEMONSTRATION, PILOT, MULTISERVICE, RESEARCH, AND MULTISTATE 
                    PROJECTS.

    (a) Strategic Plan.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (b) Demonstration and Pilot Projects.--
          (1) In general.--[Under a] Consistent with the 
        priorities specified in the plan published under 
        subsection (a), the Secretary shall, through grants or 
        contracts, carry out demonstration and pilot projects 
        for the purpose of developing and implementing 
        techniques and approaches, and demonstrating the 
        effectiveness of specialized methods, in addressing 
        employment and training needs. Such projects shall 
        include the provision of direct services to individuals 
        to enhance employment opportunities and an evaluation 
        component and may include--
                  [(A) the establishment of advanced 
                manufacturing technology skill centers 
                developed through local partnerships of 
                industry, labor, education, community-based 
                organizations, and economic development 
                organizations to meet unmet, high-tech skill 
                needs of local communities;
                  [(B) projects that provide training to 
                upgrade the skills of employed workers who 
                reside and are employed in enterprise 
                communities or empowerment zones;
                  [(C) programs conducted jointly with the 
                Department of Defense to develop training 
                programs utilizing computerbased and other 
                innovative learning technologies;
                  [(D) projects that promote the use of 
                distance learning, enabling students to take 
                courses through the use of media technology 
                such as videos, teleconferencing computers, and 
                the Internet;
                  [(E) projects that assist in providing 
                comprehensive services to increase the 
                employment rates of out-of-school youth 
                residing in targeted high poverty areas within 
                empowerment zones and enterprise communities;]
                  (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) computerized, individualized, self-paced 
                training projects targeted to dislocated, 
                disadvantaged, or incumbent workers utilizing 
                equipment and curriculum designed in 
                partnership with industries 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;

           *       *       *       *       *       *       *

                  (G) projects to assist public housing 
                authorities that provide, to public housing 
                residents, job training programs that 
                demonstrate success in upgrading the job skills 
                and promoting employment of the residents; 
                [and]
                  [(H) projects that assist local areas to 
                develop and implement local self-sufficiency 
                standards to evaluate the degree to which 
                participants in programs under this title are 
                achieving self-sufficiency.]
                  (H) projects that provide retention grants, 
                which shall--
                          (i) be made to qualified job training 
                        programs offering instruction, 
                        assessment, or professional coaching, 
                        upon placement of a low-income 
                        individual trained by the program 
                        involved in employment with an employer 
                        and retention of the low-income 
                        individual in that employment with that 
                        employer for a period of 1 year, if 
                        that employment provides the low-income 
                        individual with an annual salary--
                                  (I) that is at least $10,000 
                                more than the individual's 
                                federally adjusted income for 
                                the previous year; and
                                  (II) that is not less than 
                                twice the poverty line 
                                applicable to the individual; 
                                and
                          (ii) be made taking into account the 
                        economic benefit received by the 
                        Federal Government from the employment 
                        and retention of the individual, 
                        including the economic benefit from tax 
                        revenue and decreased public subsidies;
                  (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;
                  (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
                  (K) projects that provide comprehensive 
                education and training services, and support 
                services, in coordination with local boards, 
                for populations in targeted high poverty areas 
                where the greatest barriers to employment 
                exist, including ex-offenders, out-of-school 
                youth, and public assistance recipient 
                populations.
          (2) Limitations.--
                  (A) Competitive awards.--Grants or contracts 
                awarded for carrying out demonstration and 
                pilot projects under this subsection shall be 
                awarded in accordance with generall applicable 
                Federal requirements.
                  [(B) Eligible entities.--Grants or contracts 
                may be awarded under this subsection only to--
                          [(i) entities with recognized 
                        expertise in--
                                  [(I) conducting national 
                                demonstration projects;
                                  [(II) utilizing state-of-the-
                                art demonstration methods; or
                                  [(III) conducting evaluations 
                                of workforce investment 
                                projects; or
                          [(ii) State and local entities with 
                        expertise in operating or overseeing 
                        workforce investment programs.]
                  [(C)] (B) Time limits.--The Secretary shall 
                establish appropriate time limits for carrying 
                out demonstration and pilot projects under this 
                subsection.
    (c) Multiservice Projects, Research Projects, and 
Multistate Projects.--
          (1) Multiservice projects.-- * * *

           *       *       *       *       *       *       *

          (2) Research projects.--
                  (A) In general.--* * *
                  [(B) Formula improvement study and report.--
                          [(i) Study.--The Secretary shall 
                        conduct a 2-year study concerning 
                        improvements in the formulas described 
                        in section 132(b)(1)(B) and paragraphs 
                        (2)(A) and (3) of section 133(b) 
                        (regarding distributing funds under 
                        subtitle B to States and local areas 
                        for adult employment and training 
                        activities). In conducting the study, 
                        the Secretary shall examine means of 
                        improving the formulas by--
                                  [(I) developing formulas 
                                based on statistically reliable 
                                data;
                                  [(II) developing formulas 
                                that are consistent with the 
                                goals and objectives of this 
                                title; and
                                  [(III) developing formulas 
                                based on organizational and 
                                financial stability of State 
                                boards and local boards.
                          [(ii) Report.--The Secretary shall 
                        prepare and submit to Congress a report 
                        containing the results of the study, 
                        including recommendations for improved 
                        formulas.]
                  (B) Studies and reports.--
                          (i) Net impact studies and reports.--
                                  (I) In general.--The 
                                Secretary, in coordination with 
                                the Secretary of Education, 
                                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 (1). 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.

           *       *       *       *       *       *       *

    (e) Skill Certification Pilot Projects.--
          (1) Pilot projects.--In accordance with subsection 
        (b) and from funds appropriated pursuant to paragraph 
        (10), the Secretary shall establish and carry out not 
        more than 10 pilot projects to establish a system 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 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 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) An educational institution, 
                        including a 2- or 4-year college, or a 
                        technical or vocational school.
                          (ii) An advanced technology education 
                        center.
                          (iii) A local 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 investment activities that is 
                consistent with the objectives of this title.
          (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) Criteria.--The Secretary 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 
        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 established under 
                the grant 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 time frame 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 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 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) prepare and submit 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.--
          (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 the 
                                framework established under 
                                subclause (II) 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
                                  (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 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 an 
                                        English as a Second 
                                        Language program, or an 
                                        English for Speakers of 
                                        Other Languages 
                                        program;
                                          (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 
                                inkind 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 
                                work sites, 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. 173. NATIONAL EMERGENCY GRANTS.]

SEC. 173. NATIONAL DISLOCATED WORKER GRANTS.

    [(a) In General.--The Secretary is authorized to award 
national emergency grants in a timely manner--]
    (a) In General.--The Secretary is authorized to award 
national dislocated worker grants--
          (1) to an entity described in [subsection (c)] 
        subsection (b) to provide employment and training 
        assistance to workers affected by major economic 
        dislocations, such as plant closures, mass layoffs, or 
        closures and realignments of military installations;

           *       *       *       *       *       *       *

          (3) to provide additional assistance to a State or 
        local board for eligible dislocated workers in a case 
        in which the State or local board has expended the 
        funds provided under this section to carry out 
        activities described in paragraphs (1) and (2) and can 
        demonstrate the need for additional funds to provide 
        appropriate services for such workers, in accordance 
        with requirements prescribed by the Secretary; [and]
          [(4) from funds appropriated under section 174(c)--
                  [(A) to a State or entity (as defined in 
                section 173(c)(1)(B) to carry out subsection 
                (f), including providing assistance to eligible 
                individuals; and
                  [(B) to a State or entity (as so defined) to 
                carry out subsection (g), including providing 
                assistance to eligible individuals.]
          (4) to a State or entity (as defined in subsection 
        (b)(1)(B) to carry out subsection (e), including 
        providing assistance to eligible individuals;
          (5) to a State or entity (as defined in subsection 
        (b)(1)(B)) to carry out subsection (f), including 
        providing assistance to eligible individuals;
          (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, as defined in section 
        101(9)(E), of members of the Armed Forces as described 
        in subsection (b)(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 
        Department of Defense and Department of Veterans 
        Affairs transition assistance programs; and
          (7) to provide assistance to a State for statewide or 
        local use in order to--
                  (A) address cases in which there have been 
                worker dislocations across multiple sectors or 
                across multiple local areas and such workers 
                remain dislocated;
                  (B) coordinate the State plan described in 
                section 112 with emerging economic development 
                needs; and
                  (C) train eligible individuals who are 
                dislocated workers described in subparagraph 
                (A).
 The Secretary shall issue a final decision on an application 
for a national dislocated worker grant under this subsection 
not later than 60 calendar days after receipt of the 
application. The Secretary shall issue a notice of obligation 
for such a grant not later than 10 days after the award of the 
grant.
    [(b) Administration.--The Secretary shall designate a 
dislocated worker office to coordinate the functions of the 
Secretary under this title relating to employment and training 
activities for dislocated workers, including activities carried 
out under the national emergency grants.]
    [(c)] (b) Employment and Training Assistance 
Requirements.--
          (1) Grant recipient eligibility.--

           *       *       *       *       *       *       *

    [(d)] (c) Disaster Relief Employment Assistance 
Requirements.--
          (1) In general.--Funds made available under 
        subsection (a)(2)--

           *       *       *       *       *       *       *

    [(e)] (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 
        $15,000,000 to make grants to not more than 8 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)(i) the amount of the allotment that 
                would be made to the State for the program year 
                under the formula specified in section 202(a) 
                of the Job Training Partnership Act, as in 
                effect on July 1, 1998; is greater than
                  [(ii) 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); 
                and
                  [(B) the State is 1 of the 8 States with the 
                greatest quotient obtained by dividing--
                          [(i) the amount described in 
                        subparagraph (A)(i); by
                          [(ii) the amount described in 
                        subparagraph (A)(ii).
          [(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 under 
                the formula specified in section 202(a) of the 
                Job Training Partnership Act, as in effect on 
                July 1, 1998; 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) Allocation of funds.--A State that receives a 
        grant under paragraph (1) for a program year--
                  [(A) shall allocate funds made available 
                through the grant on the basis of the formula 
                used by the State to allocate funds within the 
                State for that program year under--
                          [(i) paragraph (2)(A) or (3) of 
                        section 133(b); or
                          [(ii) paragraph (2)(B) of section 
                        133(b); and
                  [(B) shall use the funds in the same manner 
                as the State uses other funds allocated under 
                the appropriate paragraph of section 133(b).]
    (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 was 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 was 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).
    [(f)] (e) Health Insurance Coverage Assistance for Eligible 
Individuals.--
          (1) In general.--Funds made available to a State or 
        entity under [paragraph (4)(A)] paragraph (4) of 
        subsection (a) may be used by the State or entity for 
        the following:
                  (A) Health insurance coverage.--To assist an 
                eligible individual and such individual's 
                qualifying family members in enrolling in 
                qualified health insurance.
                  (B) Administrative and start-up expenses.--To 
                pay the administrative expenses related to the 
                enrollment of eligible individuals and such 
                individuals' qualifying family members in 
                qualified health insurance, including--
                          (i) eligibility verification 
                        activities;

           *       *       *       *       *       *       *

          (2) Qualified health insurance.--For purposes of this 
        subsection and [subsection (g)] subsection (f)--

           *       *       *       *       *       *       *

          (4) Eligible individual defined.--For purposes of 
        this subsection and [subsection (g)] subsection (f), 
        the term ``eligible individual'' means--

           *       *       *       *       *       *       *

          (5) Qualifying family member defined.--For purposes 
        of this subsection and [subsection (g)] subsection 
        (f)--

           *       *       *       *       *       *       *

          (6) State.--For purposes of this subsection and 
        [subsection (g)] subsection (f), the term ``State'' 
        includes an entity as defined in [subjection (c)(1)(B)] 
        subsection (b)(1)(B).
    [(g)] (f) Interim Health Insurance Coverage and Other 
Assistance.--
          (1) In general.--Funds made available to a State or 
        entity under [paragraph (4)(B)] paragraph (4) of 
        subsection (a) may be used by the State or entity to 
        provide assistance an support services to eligible 
        individuals, including health care coverage to the 
        extent provided under [subsection (f)(1)(A)] subsection 
        (e)(1)(A), transportation, child care, dependent care, 
        and income assistance.

           *       *       *       *       *       *       *


SEC. 174. AUTHORIZATION OF APPROPRIATIONS.

    (a) Native American Programs; Migrant and Seasonal 
Farmworker Programs; Veterans' Workforce Investment Programs.--
          (1) In general.--Subject to paragraph (2), there are 
        authorized to be appropriated to carry out sections 166 
        through 168 such sums as may be necessary for each of 
        the fiscal years [1999 through 2003] 2004 through 2009.

           *       *       *       *       *       *       *

    [(b) Technical Assistance; Demonstration and Pilot 
Projects; Evaluations; Incentive Grants.--
          [(1) In general.--Subject to paragraph (2), there are 
        authorized to be appropriated to carry out sections 170 
        through 172 and section 503 such sums as may be 
        necessary for each of the fiscal years 1999 through 
        2003.
          [(2) Reservations.--Of the amount appropriated 
        pursuant to the authorization of appropriations under 
        paragraph (1) for a fiscal year, the Secretary shall--
                  [(A)(i) for fiscal year 1999, reserve up to 
                40 percent for carrying out section 170 (other 
                than subsection (b) of such section);
                  [(ii) for fiscal year 2000, reserve up to 25 
                percent for carrying out section 170 (other 
                than subsection (b) of such section); and
                  [(iii) for each of the fiscal years 2001 
                through 2003, reserve up to 20 percent for 
                carrying out section 170 (other than subsection 
                (b) of such section);
                  [(B)(i) for fiscal year 1999, reserve not 
                less than 50 percent for carrying out section 
                171; and
                  [(ii) for each of the fiscal years 2000 
                through 2003, reserve not less than 45 percent 
                for carrying out section 171;
                  [(C)(i) for fiscal year 1999, reserve not 
                less than 10 percent for carrying out section 
                172; and
                  [(ii) for each of the fiscal years 2000 
                through 2003, reserve not less than 10 percent 
                for carrying out section 172; and
                  [(D)(i) for fiscal year 1999, reserve no 
                funds for carrying out section 503;
                  [(ii) for fiscal year 2000, reserve up to 20 
                percent for carrying out section 503; and
                  [(iii) for each of the fiscal years 2001 
                through 2003, reserve up to 25 percent for 
                carrying out section 503.]
    (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. 181. REQUIREMENTS AND RESTRICTIONS.

    (a) Benefits.--
          (1) Wages.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

    (e) Limitation on Use of Funds.--No funds available under 
this title shall be used for employment generating activities, 
[economic development activities,] investment in revolving loan 
funds, capitalization of businesses, investment in contract 
bidding resource centers, and similar activities that are not 
directly related to training for eligible individuals under 
this title. No funds available under subtitle B shall be used 
for foreign travel.

           *       *       *       *       *       *       *


SEC. 185. REPORTS; RECORDKEEPING; INVESTIGATIONS.

    (a) Reports.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

    (c) Accessibility of Reports.--Each State, each local 
board, and each recipient (other than a subrecipient, 
subgrantee, or contractor of a recipient) receiving funds under 
this title--
          (1) shall make readily accessible such reports 
        concerning its operations and expenditures as shall be 
        prescribed by the Secretary;
          (2) shall prescribe and maintain comparable 
        management information systems, in accordance with 
        guidelines that shall be prescribed by the Secretary, 
        designed to facilitate the uniform compilation, cross 
        tabulation, and analysis of programmatic, participant, 
        and financial data, on statewide, local area, and other 
        appropriate bases, necessary for reporting, monitoring, 
        and evaluating purposes, including data necessary to 
        comply with section 188; [and]
          (3) shall monitor the performance of providers in 
        complying with the terms of grants, contracts, or other 
        agreements made pursuant to this title[.]; and
          (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 title.

SEC. 189. ADMINISTRATIVE PROVISIONS.

    (a) In General.-- * * *

           *       *       *       *       *       *       *

    (d) Annual Report.--The Secretary shall prepare and submit 
to Congress an annual report regarding the programs and 
activities carried out under this title. The Secretary shall 
include in such report--

           *       *       *       *       *       *       *

          (3) recommendations for modifications in the programs 
        and activities based on analysis of such findings; 
        [and]
          (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
          [(4)] (5) such other recommendations for legislative 
        or administrative action as the Secretary determines to 
        be appropriate.

           *       *       *       *       *       *       *

    (g) Program Year.--
          (1) In general.--
                  (A) Program year.--* * *

           *       *       *       *       *       *       *

          (2) Availability.--[Funds] Except as otherwise 
        provided in this paragraph, funds obligated for any 
        program year for a program or activity carried out 
        under this title may be expended by [each State 
        receiving] each recipient of such funds during that 
        program year and the 2 succeeding program years. Funds 
        obligated for any program year for a program or 
        activity carried out under section 171 or 172 shall 
        remain available until expended. Funds received by 
        local areas from States under this title during a 
        program year may be expended during that program year 
        and the succeeding program year. No amount of the funds 
        described in this paragraph shall be deobligated on 
        account of a rate of expenditure that is consistent 
        with a State plan, an operating plan described in 
        section 151, or a plan, grant agreement, contract, 
        application, or other agreement described in subtitle 
        D, as appropriate.

           *       *       *       *       *       *       *

    (i) Waivers and Special Rules.--
          (1) Existing waivers.--* * *

           *       *       *       *       *       *       *

          (4) General waivers of statutory or regulatory 
        requirements.--
                  (A) General authority.--Notwithstanding any 
                other provision of law, the Secretary may waive 
                for a State, or a local area in a State, 
                pursuant to a request submitted by the Governor 
                of the State (in consultation with appropriate 
                local elected officials) that meets the 
                requirements of subparagraph (B)--
                          (i) any of the statutory or 
                        regulatory requirements of subtitle B 
                        or this subtitle (except for 
                        requirements relating to wage and labor 
                        standards, including nondisplacement 
                        protections, worker rights, 
                        participation and protection of workers 
                        and participants, grievance procedures 
                        and judicial review, nondiscrimination, 
                        allocation of funds to local areas, 
                        eligibility of providers or 
                        participants, the establishment and 
                        functions of local areas and local 
                        boards, the funding of infrastructure 
                        costs for one-stop centers, and 
                        procedures for review and approval of 
                        plans); and

           *       *       *       *       *       *       *

                  (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), if 
                the requirements of this paragraph have been 
                satisfied.

           *       *       *       *       *       *       *


[SEC. 193. USE OF CERTAIN REAL PROPERTY.

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

           *       *       *       *       *       *       *


SEC. 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. 503. INCENTIVE GRANTS.

    [(a) In General.--Beginning on July 1, 2000, the Secretary 
shall award a grant to each State that exceeds the State 
adjusted levels of performance for title I, the adjusted levels 
of performance for title II, and the levels of performance for 
programs under Public Law 105-332 (20 U.S.C. 2301 et seq.), for 
the purpose of carrying out an innovative program consistent 
with the requirements of any one or more of the programs within 
title I, title II, or such Public Law, respectively.]
    (a) In General.--
          (1) Prior to july 1, 2005.--Prior to July 1, 2005, 
        the Secretary shall award a grant to each State in 
        accordance with the provisions of this section as this 
        section was in effect on July 1, 2003.
          (2) Beginning on july 1, 2005.--Beginning on July 1, 
        2005, the Secretary shall award a grant to each State 
        on the basis--
                  (A) of the State's exceeding the State 
                adjusted levels of performance for title I, the 
                adjusted levels of performance for title II, 
                and the levels of performance for programs 
                under the Carl D. Perkins Vocational and 
                Technical Education Act of 1998 (20 U.S.C. 2301 
                et seq.), for the purpose of carrying out an 
                innovative program consistent with the 
                requirements of any one or more of the programs 
                within title I, title II, or such Act, 
                respectively;
                  (B) of exemplary performance of the States in 
                serving hard-to-serve populations (as defined 
                in section 101) (including performance relating 
                to the levels of service provided and the 
                performance outcomes on such performance 
                measures with respect to the populations);
                  (C) of States that are effectively--
                          (i) coordinating multiple systems 
                        into a more effective workforce 
                        investment system, including 
                        coordination of employment services 
                        under the Wagner-Peyser Act and core 
                        activities under title I 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 title I; or
                          (iii) implementing innovative 
                        business and economic development 
                        initiatives; or
                  (D) of such other factors relating to the 
                performance of the States under title I as the 
                Secretary determines are appropriate.
    (b) Application.--
          (1) In general.--The Secretary may provide a grant to 
        a State under subsection (a) only if the State submits 
        an application to the Secretary for the grant that 
        meets the requirements of paragraph (2).
          (2) Requirements.--* * *

           *       *       *       *       *       *       *

                  (D) Use of funds.--The funds awarded to a 
                State under this section may be used to carry 
                out any activities authorized for States under 
                chapters 4 and 5 of subtitle B of title I, 
                title II, and the Carl D. Perkins Vocational 
                and Technical Education Act of 1998, including 
                demonstration projects and innovative programs 
                for hard-to-serve populations (as defined in 
                section 101).

           *       *       *       *       *       *       *


ADULT EDUCATION AND FAMILY LITERACY ACT

           *       *       *       *       *       *       *



SEC. 202. PURPOSE.

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

    In this title:
          (1) Adult education.--The term ``adult education'' 
        means [services or instruction below the postsecondary 
        level] 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 for individuals--

           *       *       *       *       *       *       *

                  (C) who--
                          [(i) lack sufficient mastery of basic 
                        educational skills to enable the 
                        individuals to function effectively in 
                        society;]
                          (i) are basic skills deficient as 
                        defined in section 101;

           *       *       *       *       *       *       *

          (2) Adult education and literacy activities.--The 
        term ``adult education and literacy activities'' means 
        [activities described in section 231(b)] 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.

           *       *       *       *       *       *       *

          (5) Eligible provider.--The term ``eligible 
        provider'' means an organization that has demonstrated 
        effectiveness in providing adult education, that may 
        include--
                  (A) * * *
                  (B) a community-based organization [of 
                demonstrated effectiveness];
                  (C) a volunteer literacy organization [of 
                demonstrated effectiveness];

           *       *       *       *       *       *       *

                  (I) a consortium or coalition of the 
                agencies, organizations, institutions, 
                libraries, or authorities described in any of 
                subparagraphs (A) through (H).
          (6) English [literacy program] language acquisition 
        program.--The term ``English [literacy program] 
        language acquisition program'' means a program of 
        instruction designed to help individuals of limited 
        English proficiency achieve competence in reading, 
        writing, and speaking the English language.
          (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).
          [(7)] (8) Family literacy services.--The term 
        ``family literacy services'' means services that are of 
        sufficient intensity in terms of hours, and of 
        sufficient duration, to make sustainable changes in a 
        family, and that integrate all of the following 
        activities:
                  (A) Interactive literacy activities between 
                parents and their children.
                  (B) Training for parents regarding how to be 
                the primary teacher for their children and full 
                partners in the education of their children.
                  (C) Parent literacy training that leads to 
                economic self-sufficiency.
                  (D) An age-appropriate education to prepare 
                children for success in school and life 
                experiences.
          [(8)] (9) Governor.--The term ``Governor'' means the 
        chief executive officer of a State or outlying area.
          [(9)] (10) Individual with a disability.--
                  (A) In general.--The term ``individual with a 
                disability'' means an individual with any 
                disability (as defined in section 3 of the 
                Americans with Disabilities Act of 1990 (42 
                U.S.C. 12102)).
                  (B) Individuals with disabilities.--The term 
                ``individuals with disabilities'' means more 
                than one individual with a disability.
          [(10)] (11) Individual of limited english 
        proficiency.--The term ``individual of limited English 
        proficiency'' means an adult or out-of-school youth who 
        has limited ability in speaking, reading, writing, or 
        understanding the English language, and--
                  (A) whose native language is a language other 
                than English; or
                  (B) who lives in a family or community 
                environment where a language other than English 
                is the dominant language.
          [(11)] (12) Institution of higher education.--The 
        term ``institution of higher education'' has the 
        meaning given the term in section 101 of the Higher 
        Education Act of 1965.
          [(12)] (13) Literacy.--The term ``literacy'' means an 
        individual's ability to read, write, and speak in 
        English, compute, and solve problems, at levels of 
        proficiency necessary to function on the job, in the 
        family of the individual, and in society.
          [(13)] (14) Local educational agency.--The term 
        ``local educational agency'' has the meaning given the 
        term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.
          [(14)] (15) Outlying area.--The term ``outlying 
        area'' has the meaning given the term in section 101.
          [(15)] (16) Postsecondary educational institution.--
        The term ``postsecondary educational institution'' 
        means--
                  (A) an institution of higher education that 
                provides not less than a 2-year program of 
                instruction that is acceptable for credit 
                toward a bachelor's degree;
                  (B) a tribally controlled community college; 
                or
                  (C) a nonprofit educational institution 
                offering certificate or apprenticeship programs 
                at the postsecondary level.
          [(16)] (17) Secretary.--The term ``Secretary'' means 
        the Secretary of Education.
          [(17)] (18) State.--The term ``State'' means each of 
        the several States of the United States, the District 
        of Columbia, and the Commonwealth of Puerto Rico.
          [(18)] (19) Workplace literacy services.--The term 
        ``workplace literacy services'' means literacy services 
        that are offered for the purpose of improving the 
        productivity of the workforce through the improvement 
        of literacy skills.]
          (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. 204. HOME SCHOOLS.

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

SEC. 204. HOME SCHOOLS.

    Nothing in this title shall be construed to affect home 
schools, whether a home school is treated as a home school or a 
private school under State law, or to compel a parent engaged 
in home schooling to participate in an English literacy 
program, family literacy services, or adult education.

SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this 
title such sums as may be necessary for each of the fiscal 
years [1999] 2004 through [2003] 2009.

           Subtitle A--Adult Education and Literacy Programs

                     CHAPTER 1--FEDERAL PROVISIONS


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

    [(a) Reservation of Funds.--From the sum appropriated under 
section 205 for a fiscal year, the Secretary--
          [(1) shall reserve 1.5 percent to carry out section 
        242, except that the amount so reserved shall not 
        exceed $8,000,000;
          [(2) shall reserve 1.5 percent to carry out section 
        243, except that the amount so reserved shall not 
        exceed $8,000,000; and
          [(3) shall make available, to the Secretary of Labor, 
        1.72 percent for incentive grants under section 503.]
    (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 and subsection (f)(4), except that the amount so 
        reserved shall not exceed $8,000,000;
          (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.

           *       *       *       *       *       *       *

    (c) Allotments.--
          (1) Initial allotments.--From the sum appropriated 
        under section 205 and not reserved under subsection (a) 
        for a fiscal year, the Secretary shall allot to each 
        eligible agency having a State plan approved under 
        section 224(f)--
                  (A) $100,000, in the case of an eligible 
                agency serving an outlying area; and
                  (B) [$250,000] $350,000 in the case of any 
                other eligible agency.

           *       *       *       *       *       *       *

    [(d) Qualifying Adult.--For the purpose of subsection 
(c)(2), the term ``qualifying adult'' means an adult who--
          [(1) is at least 16 years of age;
          [(2) is beyond the age of compulsory school 
        attendance under the law of the State or outlying area;
          [(3) does not have a secondary school diploma or its 
        recognized equivalent; and
          [(4) is not enrolled in secondary school.]
    (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; and
          (4) is not enrolled in secondary school.
    (e) Special Rule.--
          (1) In general.--* * *
          [(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.]
          (2) Award basis.--The Secretary shall award grants 
        pursuant to paragraph (1) on a competitive basis and 
        pursuant to recommendations from the Pacific Region 
        Educational Laboratory in Honolulu, Hawaii.
          (3) Termination of eligibility.--Notwithstanding any 
        other provision of law, the Republic of the Marshall 
        Islands, the Federated States of Micronesia, and the 
        Republic of Palau [shall not receive any funds under 
        this subtitle for any fiscal year that begins after 
        September 30, 2001] 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.

           *       *       *       *       *       *       *

    [(f) Hold-Harmless.--
          [(1) In general.--Notwithstanding subsection (c)--
                  [(A) for fiscal year 1999, no eligible agency 
                shall receive an allotment under this subtitle 
                that is less than 90 percent of the payments 
                made to the State or outlying area of the 
                eligible agency for fiscal year 1998 for 
                programs for which funds were authorized to be 
                appropriated under section 313 of the Adult 
                Education Act (as such Act was in effect on the 
                day before the date of the enactment of the 
                Workforce Investment Act of 1998); and
                  [(B) for fiscal year 2000 and each succeeding 
                fiscal year, no eligible agency shall receive 
                an allotment under this subtitle that is less 
                than 90 percent of the allotment the eligible 
                agency received for the preceding fiscal year 
                under this subtitle.
          [(2) Ratable reduction.--If for any fiscal year the 
        amount available for allotment under this subtitle is 
        insufficient to satisfy the provisions of paragraph 
        (1), the Secretary shall ratably reduce the payments to 
        all eligible agencies, as necessary.
    (f) Hold-Harmless Provisions.--
          (1) In general.--Notwithstanding subsection (c) and 
        subject to paragraph (2), for fiscal year 2004 and each 
        succeeding fiscal year, no eligible agency shall 
        receive an allotment under this section that is less 
        than 90 percent of the allotment the eligible agency 
        received for the preceding fiscal year under this 
        section.
          (2) 100 percent allotment.--Notwithstanding 
        paragraphs (1) and (2) of subsection (e), an eligible 
        agency that receives only an initial allotment under 
        subsection (c)(1) (and no additional allotment under 
        subsection (c)(2)) shall receive an allotment under 
        this section that is equal to 100 percent of the 
        initial allotment under subsection (c)(1).
          (3) Ratable reduction.--If for any fiscal year the 
        amount available for allotment under this subtitle is 
        insufficient to satisfy the provisions of paragraphs 
        (1) and (2), the Secretary shall ratably reduce the 
        payments to all eligible agencies, as necessary.
          (4) Additional assistance.--
                  (A) In general.--From amounts reserved under 
                subsection (a)(2), the Secretary shall make 
                grants to eligible agencies described in 
                subparagraph (B) to enable such agencies to 
                provide activities authorized under chapter 2.
                  (B) Eligibility.--An eligible agency is 
                eligible to receive a grant under this 
                paragraph for a fiscal year if the amount of 
                the allotment such agency receives under this 
                section for the fiscal year is less than the 
                amount such agency would have received for the 
                fiscal year if the allotment formula under this 
                section as in effect on September 30, 2003, 
                were in effect for such year.
                  (C) Amount of grant.--The amount of a grant 
                made to an eligible agency under this paragraph 
                for a fiscal year shall be the difference 
                between--
                          (i) the amount of the allotment such 
                        agency would have received for the 
                        fiscal year if the allotment formula 
                        under this section as in effect on 
                        September 30, 2003, were in effect for 
                        such year; and
                          (ii) the amount of the allotment such 
                        agency receives under this section for 
                        the fiscal year.

           *       *       *       *       *       *       *


SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM.

    (a) Purpose.--* * *
    (b) * * *
          (1) * * *
                  (A)(i) * * *
                  (ii) [additional indicators of performance 
                (if any)] employment performance indicators 
                identified by the eligible agency under 
                paragraph (2)(B); and

           *       *       *       *       *       *       *

          (2) Indicators of performance.--
                  (A) Core indicators of performance.--The core 
                indicators of performance shall include the 
                following:
                          (i) [Demonstrated] Measurable 
                        improvements in literacy skill levels 
                        in reading, writing, and speaking the 
                        English language, numeracy, problem 
                        solving, English language acquisition, 
                        and other literacy skills.
                          [(ii) Placement in, retention in, or 
                        completion of, postsecondary education, 
                        training, unsubsidized employment or 
                        career advancement.]
                          (ii) Placement in, retention in, or 
                        completion of, postsecondary education 
                        or other training programs.
                          (iii) Receipt of a secondary school 
                        diploma or its recognized equivalent 
                        (including recognized alternative 
                        standards for individuals with 
                        disabilities).
                  (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.
                  [(B)] (C) Additional relevant indicators.--An 
                eligible agency may identify in the State plan 
                additional relevant indicators for adult 
                education and literacy activities authorized 
                under this subtitle.
                  (D) Indicators for workplace literacy 
                programs.--Special accountability measures may 
                be negotiated for workplace literacy programs.
          (3) Levels of performance.--
                  (A) Eligible agency adjusted levels of 
                performance for core indicators.--
                          (i) In general.--* * *

           *       *       *       *       *       *       *

                                  (II) show the progress of the 
                                eligible agency toward 
                                continuously improving [in 
                                performance] the agency's 
                                performance outcomes in an 
                                objective, quantifiable, and 
                                measurable form.
                          (ii) Identification in state plan.--
                        Each eligible agency shall identify, in 
                        the State plan submitted under section 
                        224, expected levels of performance for 
                        each of the core indicators of 
                        performance for the first [3 program 
                        years] 2 program years covered by the 
                        State plan.
                          (iii) Agreement on eligible agency 
                        adjusted levels of performance for 
                        [first 3 years] first 2 years.--In 
                        order to ensure an optimal return on 
                        the investment of Federal funds in 
                        adult education and literacy activities 
                        authorized under this subtitle, the 
                        Secretary and each eligible agency 
                        shall reach agreement on levels of 
                        performance for each of the core 
                        indicators of performance, for the 
                        [first 3 program years] first 2 program 
                        years covered by the State plan, taking 
                        into account the levels identified in 
                        the State plan under clause (ii) and 
                        the factors described in clause (iv). 
                        The levels agreed to under this clause 
                        shall be considered to be the eligible 
                        agency adjusted levels of performance 
                        for the eligible agency for such years 
                        and shall be incorporated into the 
                        State plan prior to the approval of 
                        such plan.

           *       *       *       *       *       *       *

                          (v) Agreement on eligible agency 
                        adjusted levels of performance for [4th 
                        and 5th] 3rd and 4th years.--Prior [to 
                        the fourth] to the third program year 
                        covered by the State plan, the 
                        Secretary and each eligible agency 
                        shall reach agreement on levels of 
                        performance for each of the core 
                        indicators of performance for the 
                        [fourth and fifth] third and fourth 
                        program years covered by the State 
                        plan, taking into account the factors 
                        described in clause (iv). The levels 
                        agreed to under this clause shall be 
                        considered to be the eligible agency 
                        adjusted levels of performance for the 
                        eligible agency for such years and 
                        shall be incorporated into the State 
                        plan.
                          (vi) Revisions.--If unanticipated 
                        circumstances arise in a State 
                        resulting in a significant change in 
                        the factors described in clause (iv) 
                        [II] (I) the eligible agency may 
                        request that the eligible agency 
                        adjusted levels of performance agreed 
                        to under clause (iii) or (v) be 
                        revised. The Secretary, after 
                        collaboration with the representatives 
                        described in section 136(i)(1), shall 
                        issue objective criteria and methods 
                        for making such revisions.
                  (B) [Levels of performance for additional 
                indicators] Levels of employment performance.--
                The eligible agency [may] shall identify, in 
                the State plan, eligible agency levels of 
                performance for each of the [additional] 
                employment indicators described in paragraph 
                (2)(B). Such levels shall be considered to be 
                eligible agency adjusted levels of performance 
                for purposes of this subtitle.
                  (C) 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.
    (c) Report.--
          (1) In general.--Each eligible agency that receives a 
        grant under section 211(b) shall annually prepare and 
        submit to the Secretary the Governor, the State 
        legislature, and the State workforce investment board a 
        report on the progress of the eligible agency in 
        achieving eligible agency performance measures, 
        [including information on the levels of performance 
        achieved by the eligible agency with respect to the 
        core indicators of performance.] 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.
          (2) Information dissemination.--The Secretary--
                  (A) shall make the information contained in 
                such reports [available to] eligible providers 
                and the general public through publication and 
                other appropriate methods;

           *       *       *       *       *       *       *

          (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.
    (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.

           *       *       *       *       *       *       *


                      CHAPTER 2--STATE PROVISIONS


SEC. 221. STATE ADMINISTRATION.

    Each eligible agency shall be responsible for the State or 
outlying area administration of activities under this subtitle, 
including--
          (1) the development, submission, [and implementation] 
        implementation, and monitoring of the State plan;

           *       *       *       *       *       *       *


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

    (a) State Distribution of Funds.--Each eligible agency 
receiving a grant under this subtitle for a fiscal year--
          (1) shall use not less than [82.5] 80 percent of the 
        grant funds to award grants and contracts under section 
        231 and to carry out section 225, of which not more 
        than 10 percent of [the 82.5 percent] such amount shall 
        be available to carry out section 225;
          (2) shall use [not more than 12.5 percent] not more 
        than 15 percent of the grant funds to carry out State 
        leadership activities under section 223; and
          (3) shall use not more than 5 percent of the grant 
        funds, or [$65,000] $75,000, whichever is greater, for 
        the administrative expenses of the eligible agency.
    (b) Matching Requirement.--
          (1) In general.--In order to receive a grant from the 
        Secretary under section 211(b) each eligible agency 
        shall provide, for the costs to be incurred by the 
        eligible agency in carrying out the adult education and 
        literacy activities for which the grant is awarded, a 
        non-Federal contribution in an amount [equal to] that 
        is not less than--

           *       *       *       *       *       *       *


SEC. 223. STATE LEADERSHIP ACTIVITIES.

    (a) In General.--Each eligible agency shall use funds made 
available under section 222(a)(2) for one or more of the 
following adult education and literacy activities to develop or 
enhance the adult education system of the State:
          (1) The establishment or operation of professional 
        development programs to improve the quality of 
        instruction provided pursuant to local activities 
        required under section 231(b), including [instruction 
        incorporating phonemic awareness, systematic phonics, 
        fluency, and reading comprehension, and instruction 
        provided by volunteers or by personnel of a State or 
        outlying area.] instruction incorporating the essential 
        components of reading instruction and instruction 
        provided by volunteers or by personnel of a State or 
        outlying area.
          (2) The provision of technical assistance to eligible 
        providers of adult education and literacy activities, 
        including development and dissemination of 
        instructional and programmatic practices based on the 
        most rigorous research available in reading, writing, 
        speaking, mathematics, English language acquisition 
        programs, distance learning and staff training.

           *       *       *       *       *       *       *

          (5) The [monitoring and] evaluation of the quality 
        of, and the improvement in, adult education and 
        literacy activities.
          [(6) Incentives for--
                  [(A) program coordination and integration; 
                and
                  [(B) performance awards.]
          (6) The development and implementation of technology 
        applications, translation technology, or distance 
        learning, including professional development to support 
        the use of instructional technology.
          [(7) Developing and disseminating curricula, 
        including curricula incorporating phonemic awareness, 
        systematic phonics, fluency, and reading comprehension.
          [(8) Other activities of statewide significance that 
        promote the purpose of this title.
          [(9) Coordination with existing support services, 
        such as transportation, child care, and other 
        assistance designed to increase rates of enrollment in, 
        and successful completion of, adult education and 
        literacy activities, to adults enrolled in such 
        activities.
          [(10) Integration of literacy instruction and 
        occupational skill training, and promoting linkages 
        with employers.
          [(11) Linkages with postsecondary educational 
        institutions.
          (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(b)(3)(F).
          (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.

           *       *       *       *       *       *       *

    (c) State-Imposed Requirements.--Whenever a State or 
outlying area implements any rule or policy relating to the 
administration or operation of a program authorized under this 
subtitle that has the effect of imposing a requirement that is 
not imposed under Federal law (including any rule or policy 
based on a State or outlying area interpretation of a Federal 
statute, regulation, or guideline), the State or outlying area 
shall identify, to eligible providers, the rule or policy as 
[being State- or outlying area-imposed] being imposed by the 
State or outlying area.

SEC. 224. STATE PLAN.

    (a) [5-Year Plans] 4-Year Plans.--
          (1) In general.--Each eligible agency desiring a 
        grant under this subtitle for any fiscal year shall 
        submit to, or have on file with, the Secretary a [5] 4-
        year State plan.

           *       *       *       *       *       *       *

    (b) Plan Contents.--In developing the State plan, and any 
revisions to the State plan, the eligible agency shall include 
in the State plan or revisions--
          (1) an objective assessment of the needs of 
        individuals in the State or outlying area for adult 
        education and literacy activities, including 
        individuals most in need or hardest to serve and the 
        role of provider and cooperating agencies in preparing 
        the assessment;
          [(2) a description of the adult education and 
        literacy activities that will be carried out with any 
        funds received under this subtitle;]
          (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;
          (3) a description of how the eligible agency will 
        evaluate and measure annually the effectiveness 
        improvement of the adult education and literacy 
        activities based on the performance measures described 
        in section [212;] 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)
          (4) a description of the performance measures 
        described in section 212 and how such performance 
        measures [will ensure the improvement of] improved 
        adult education and literacy activities in the State or 
        outlying area;
          (5) a description of how the eligible agency will 
        improve teacher quality, the professional development 
        of eligible providers, and instruction;
          [(5)] (6) an assurance that the eligible agency will 
        award not less than one grant under this subtitle to an 
        eligible provider [who offers flexible schedules and 
        necessary support services (such as child care and 
        transportation) to enable individuals, including 
        individuals with disabilities, or individuals with 
        other special needs, to participate in adult education 
        and literacy activities, which eligible provider shall 
        attempt to coordinate with support services that are 
        not provided under this subtitle prior to using funds 
        for adult education and literacy activities provided 
        under this subtitle for support services;] 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;
          [(6)] (7) an assurance that the funds received under 
        this subtitle will not be expended for any purpose 
        other than for activities under this subtitle;
          [(7)] (8) a description of how the eligible agency 
        will fund local activities in accordance with the 
        considerations described in section 231(e);
          [(8)] (9) an assurance that the eligible agency will 
        expend the funds under this subtitle only in a manner 
        consistent with fiscal requirements in section 241;
          [(9)] (10) a description of the process that will be 
        used for public participation and comment with respect 
        to the State [plan;] 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;
          [(10)] (11) a description of how the eligible agency 
        [will] assess potential population needs and develop 
        program strategies for populations that include, at a 
        minimum--
                  (A) low-income [students] individuals;
                  (B) individuals with disabilities;
                  (C) single parents and displaced homemakers; 
                [and]
                  (D) individuals with multiple barriers to 
                educational enhancement, including individuals 
                with limited English proficiency;
                  (E) the unemployed; and
                  (F) those who are employed, but at levels 
                below self-sufficiency, as defined in section 
                101.
          [(11)] (12) a description of how the adult education 
        and literacy activities that will be carried out with 
        any funds received under this subtitle will be 
        integrated with other adult education, career 
        development, and employment and training activities in 
        the State or outlying area served by the eligible 
        agency and how the plan submitted under this subtitle 
        is coordinated with the plan submitted by the State 
        under title I; [and]
          [(12)] (13) a description of the steps the eligible 
        agency will take to ensure direct and equitable access, 
        as required in section [231(c)(1).] 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;
          (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.
    (c) Plan Revisions.--When changes in conditions or other 
factors require substantial revisions to an approved State 
plan, the eligible agency shall submit the revisions to the 
State plan to the Secretary. At the end of the first 2-year 
period of the 4-year State plan, the eligible agency shall 
review and, as needed, revise the 4-year State plan.
    (d) Consultation.--The eligible agency shall--
          (1) submit the State plan, and any revisions to the 
        State plan, to the Governor, the chief State school 
        officer, the State officer responsible for 
        administering community and technical colleges, and the 
        State Workforce Investment Board of the State or 
        outlying area for review and comment; and
          (2) ensure that any [comments by the Governor 
        regarding the State plan, and any revision to the State 
        plan, are submitted to the Secretary.] 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. 225. PROGRAMS FOR CORRECTIONS EDUCATION AND OTHER 
                    INSTITUTIONALIZED INDIVIDUALS.

    (a) Program Authorized.--* * *
    (b) Uses of Funds.--The funds described in subsection (a) 
shall be used for the cost of educational programs for criminal 
offenders in correctional institutions and for other 
institutionalized individuals, including academic programs 
for--
          (1) [basic education] adult education and literacy 
        activities;
          (2) special education programs as determined by the 
        eligible agency; and
          [(3) English literacy programs; and]
          [(4)] secondary school credit programs.
    (c) Priority.--Each eligible agency that is using 
assistance provided under this section to carry out a program 
for criminal offenders within a correctional institution shall 
give priority to serving individuals who are likely to leave 
the correctional institution within 5 years of participation in 
the program.
    (d) [Definition of Criminal Offender.--] Definitions.--In 
this section:

           *       *       *       *       *       *       *


                      CHAPTER 3--LOCAL PROVISIONS


SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PROVIDERS.

    (a) Grants and Contracts.--* * *
    (b) * * *
          (1) Adult education and literacy services, including 
        [workplace literacy services] workplace literacy 
        programs.
          (2) Family literacy services.
          (3) English [literacy] language acquisition programs.

           *       *       *       *       *       *       *

    (e) Considerations.--In awarding grants or contracts under 
this section, the eligible agency shall consider--
          (1) the degree to which the eligible provider will 
        establish measurable goals for participant [outcomes] 
        to be achieved annually on the core indicators of 
        performance and employment performance indicators 
        described in section 212(b)(2);

           *       *       *       *       *       *       *

          [(3) the commitment of the eligible provider to serve 
        individuals in the community who are most in need of 
        literacy services, including individuals who are low-
        income or have minimal literacy skills;]
          (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;
          (4) whether or not the program--
                  (A) is of sufficient intensity and duration 
                for participants to achieve substantial 
                learning gains; and
                  (B) uses instructional practices[, such as 
                phonemic awareness, systematic phonics, 
                fluency, and reading comprehension that 
                research has proven to be effective in teaching 
                individuals to read;], such as'' and all that 
                follows through the semicolon and inserting 
                ``that include the essential components of 
                reading instruction;
          (5) whether the activities are built on a strong 
        foundation of [research] the most rigorous research 
        available and effective educational practice;

           *       *       *       *       *       *       *

          (7) whether the activities provide learning in real 
        life contexts, when appropriate and based on the most 
        rigorous research available, to ensure that an 
        individual has the skills needed to compete in the 
        workplace and exercise the rights and responsibilities 
        of citizenship;

           *       *       *       *       *       *       *

          (9) whether the activities coordinate with other 
        available education, job-training, and social service 
        resources in the community, such as by establishing 
        strong links with elementary schools and secondary 
        schools, postsecondary educational institutions, one-
        stop centers, job training programs, and social service 
        agencies;
          (10) whether the activities offer flexible schedules 
        and coordination with Federal, State, and local support 
        services (such as child care [and transportation] 
        transportation, mental health services, and case 
        management) that are necessary to enable individuals, 
        including individuals with disabilities or other 
        special needs, to attend and complete programs;
          (11) whether the activities maintain a high-quality 
        information management system that has the capacity to 
        report measurable participant outcomes and to monitor 
        program performance against the [eligible agency] 
        performance measures established by the eligible 
        agency; [and]
          (12) whether the local communities have a 
        demonstrated need for additional English [literacy 
        programs.] language acquisition programs and civics 
        education programs;
          (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. 232. LOCAL APPLICATION.

    Each eligible provider desiring a grant or contract under 
this subtitle shall submit an application to the eligible 
agency containing such information and assurances as the 
eligible agency may require, including--
          (1) a description of how funds awarded under this 
        subtitle will be spent consistent with the requirements 
        of this subtitle; [and]
          (2) a description of any cooperative arrangements the 
        eligible provider has with other agencies, 
        institutions, or organizations for the delivery of 
        adult education and literacy activities[.]; and
          (3) information that addresses each of the 
        considerations required under section 231(e).

SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS.

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

                     CHAPTER 4--GENERAL PROVISIONS


SEC. 241. ADMINISTRATIVE PROVISIONS.

    (a) Supplement Not Supplant.--Funds made available for 
adult education and literacy activities under this subtitle 
shall supplement and not supplant other State or local public 
funds expended for adult education and literacy activities.
    (b) Maintenance of Effort.--
          (1) In general.--
                  (A) Determination.--An eligible agency may 
                receive funds under this subtitle for any 
                fiscal year if the Secretary finds that the 
                fiscal effort per student or the aggregate 
                expenditures of such eligible agency for [adult 
                education and literacy activities] activities 
                under this subtitle, in the second preceding 
                fiscal year, [was] were not less than 90 
                percent of the fiscal effort per student of the 
                aggregate expenditures of such eligible agency 
                for [adult education and literacy activities] 
                activities under this subtitle, in the third 
                preceding fiscal year.

           *       *       *       *       *       *       *

          (4) Waiver.--The Secretary may waive the requirements 
        of this subsection for not more than 1 fiscal year 
        [only], if the Secretary determines that a waiver would 
        be equitable due to exceptional or uncontrollable 
        circumstances, such as a natural disaster or an 
        unforeseen and precipitous decline in the financial 
        resources of the State or outlying area of the eligible 
        agency. If the Secretary grants a waiver under the 
        preceding sentence for a fiscal year, the level of 
        effort required under paragraph (1) shall not be 
        reduced in the subsequent fiscal year because of the 
        waiver.

SEC. 242. NATIONAL INSTITUTE FOR LITERACY.

    (a) Purpose.--The purpose of this section is to establish a 
National Institute for Literacy that--
          (1) provides national leadership regarding [literacy] 
        effective literacy programs for children, youth, 
        adults, and families;
          (2) coordinates and disseminates information on 
        literacy services and policy; and
          (3) serves as a national resource for adult education 
        and literacy programs by--
                  [(A) providing the best and most current 
                information available, including the work of 
                the National Institute of Child Health and 
                Human Development in the area of phonemic 
                awareness, systematic phonics, fluency, and 
                reading comprehension, to all recipients of 
                Federal assistance that focuses on reading, 
                including programs under titles I and VII of 
                the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 6301 et seq. and 7401 et seq.), 
                the Head Start Act (42 U.S.C. 9831 et seq.), 
                the Individuals with Disabilities Education Act 
                (20 U.S.C. 1400 et seq.), and this Act; and]
                  (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;
                  (B) supporting the creation of new ways to 
                offer services of proven effectiveness.
    (b) Establishment.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

          [(3) Recommendations.--The Interagency Group shall 
        consider the recommendations of the National Institute 
        for Literacy Advisory Board (in this section referred 
        to as the Board) established under subsection (e) in 
        planning the goals of the Institute and in the 
        implementation of any programs to achieve the goals. If 
        the Board's recommendations are not followed, the 
        Interagency Group shall provide a written explanation 
        to the Board concerning actions the Interagency Group 
        takes that are inconsistent with the Board's 
        recommendations, including the reasons for not 
        following the Board's recommendations with respect to 
        the actions. The Board may also request a meeting of 
        the Interagency Group to discuss the Board's 
        recommendations.]
          (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.

           *       *       *       *       *       *       *

          (4) Daily operations.--The daily operations of the 
        Institute shall be administered by the Director of the 
        Institute.
      (c) Duties.--
          (1) In general.--In order to provide leadership for 
        the improvement and expansion of the system for 
        delivery of literacy services, the Institute is 
        authorized--
                  (A) [to establish] to maintain a national 
                electronic data base of information that 
                disseminates information to the broadest 
                possible audience within the literacy and basic 
                skills field, and that includes--
                          (i) effective practices in the 
                        provision of literacy and basic skills 
                        instruction, including instruction in 
                        [phonemic awareness, systematic 
                        phonics, fluency, and reading 
                        comprehension] the essential components 
                        of reading instruction, and the 
                        integration of literacy and basic 
                        skills instruction with occupational 
                        skills training;

           *       *       *       *       *       *       *

                          (iii) opportunities for technical 
                        assistance, meetings, conferences, and 
                        other opportunities that lead to the 
                        improvement of literacy and basic 
                        skills services; [and]
                          (iv) a communication network for 
                        literacy programs, providers, social 
                        service agencies, and students; and
                          (v) a list of local adult education 
                        and literacy programs;

           *       *       *       *       *       *       *

                  (C) to coordinate the support of [reliable 
                and replicable research] reliable and 
                replicable research as defined by the Institute 
                of Education Sciences and development on 
                literacy and basic skills in families and 
                adults across Federal agencies, [especially 
                with the Office of Educational Research and 
                Improvement in the Department of Education,] 
                and to carry out basic and applied research and 
                development on topics that are not being 
                investigated by other organizations or 
                agencies, such as the special literacy needs of 
                individuals with learning disabilities;
                  (D) to collect and disseminate information on 
                methods of advancing literacy that show great 
                promise, including [phonemic awareness, 
                systematic phonics, fluency, and reading 
                comprehension based on] the essential 
                components of reading instruction and the work 
                of the National Institute of Child Health and 
                Human Development;

           *       *       *       *       *       *       *

                  (H) to advise Congress and Federal 
                departments and agencies regarding the 
                development of policy with respect to literacy 
                and basic skills; [and]
                  (I) to undertake other activities that lead 
                to the improvement of the Nation's literacy 
                delivery system and that complement other such 
                efforts being undertaken by public and private 
                agencies and organizations[.];
                  (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.

           *       *       *       *       *       *       *

          (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.
    (e) National Institute for Literacy Advisory Board.--
          (1) Establishment.--
                  (A) In general.--* * *
                  (B) * * *
                          (i) literacy organizations and 
                        providers of literacy services, 
                        including nonprofit providers, 
                        providers of English [literacy 
                        programs] language acquisition programs 
                        and services, social service 
                        organizations, and eligible providers 
                        receiving assistance under this 
                        subtitle;
                          (ii) businesses that have 
                        demonstrated interest in [literacy 
                        programs] or have participated in or 
                        partnered with workplace literacy 
                        programs;

           *       *       *       *       *       *       *

                          (iv) experts in the area of literacy 
                        research including adult literacy 
                        research;

           *       *       *       *       *       *       *

                          (vi) State Directors of adult 
                        education; [and]
                          (vii) representatives of employees, 
                        including representatives of labor 
                        organizations[.]; and
                          (viii) institutions of higher 
                        education.
          (2) Duties.--The Board shall--
                  (A) make recommendations concerning the 
                appointment of the Director and staff of the 
                Institute;
                  (B) provide independent advice on the 
                operation of the Institute; [and]
                  (C) receive reports from the Interagency 
                Group and the Director[.]; and
                  (D) review the biennial report submitted to 
                Congress pursuant to subsection (k).

           *       *       *       *       *       *       *

          (5) Quorum.--A majority of the members of the Board 
        shall constitute a quorum but a lesser number may hold 
        hearings. [Any recommendation of the Board may be 
        passed only by a majority of the Board's members 
        present.] 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.

           *       *       *       *       *       *       *

    (k) Report.--[The Institute shall submit a report 
biennially to] 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 the Committee on Education and the 
Workforce of the House of Representatives and the Committee on 
[Labor and Human Resources] Health, Education, Labor, and 
Pensions of the Senate. Each report submitted under this 
subsection shall include--

           *       *       *       *       *       *       *


[SEC. 243. NATIONAL LEADERSHIP ACTIVITIES.

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

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.
    (b) 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. 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.

           *       *       *       *       *       *       *


                           WAGNER-PEYSER ACT


Subpart B--Related Programs

           *       *       *       *       *       *       *


    Sec. 2. For purposes of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the term ``one-stop delivery system means a one-
        stop delivery system described in [section 134(c)] 
        section 121(e) of the Workforce Investment Act of 1998;

           *       *       *       *       *       *       *

    Sec. 3. (a) * * *

           *       *       *       *       *       *       *

    (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.
    [Sec. 14.]

SEC. 14. COOPERATIVE STATISTICAL PROGRAM.

    There are authorized to be appropriated such sums as may be 
necessary to enable the Secretary to provide funds through 
reimbursable agreements with the States to operate statistical 
programs which are essential for development of estimates of 
the gross national product and other national statistical 
series, including those related to employment and unemployment.

[SEC. 15. EMPLOYMENT STATISTICS.]

SEC. 15. WORKFORCE AND LABOR MARKET INFORMATION SYSTEM.

    (a) System Content.--
          (1) In general.--The Secretary, in accordance with 
        the provisions of this section, shall oversee the 
        development, maintenance, and continuous improvement of 
        a nationwide [employment statistics system] workforce 
        and labor market information system [of employment 
        statistics] that includes--
                  (A) * * *

           *       *       *       *       *       *       *

    (b) System Responsibilities.--
          (1) In general.--The [employment statistics system] 
        workforce and labor market information system described 
        in subsection (a) shall be planned, administered, 
        overseen, and evaluated through a cooperative 
        governance structure involving the Federal Government 
        and States.
          (2) Duties.--The Secretary, with respect to data 
        collection, analysis, and dissemination of labor 
        employment statistics for the system, shall carry out 
        the following duties:
                  (A) Assign responsibilities within the 
                Department of Labor for elements of the 
                [employment statistics system] workforce and 
                labor market information system described in 
                subsection (a) to ensure that all statistical 
                and administrative data collected is consistent 
                with appropriate Bureau of Labor Statistics 
                standards and definitions.

           *       *       *       *       *       *       *

                  (D) In collaboration with the Bureau of Labor 
                Statistics and States, develop and maintain the 
                elements of the [employment statistics system] 
                workforce and labor market information system 
                described in subsection (a), including the 
                development of consistent procedures and 
                definitions for use by the States in collecting 
                the data and information described in 
                subparagraphs (A) and (B) of subsection (a)(1).
                  (E) Establish procedures for the system to 
                ensure that--
                          (i) such data and information are 
                        timely; and
                          (ii) paperwork and reporting for the 
                        system are reduced to a minimum[; and].
                          [(iii) States and localities are 
                        fully involved in the development and 
                        continuous improvement of the system at 
                        all levels, including ensuring the 
                        provision, to such States and 
                        localities, of budget information 
                        necessary for carrying out their 
                        responsibilities under subsection (e).]
    [(c) Annual Plan.--The Secretary, working through the 
Bureau of Labor Statistics, and in cooperation with the States, 
and with the assistance of other appropriate Federal agencies, 
shall prepare an annual plan which shall be the mechanism for 
achieving cooperative management of the nationwide [employment 
statistics system] workforce and labor market information 
system described in subsection (a) and the statewide 
[employment statistics system] workforce and labor market 
information system that comprise the nationwide system. The 
plan shall--
          [(1) describe the steps the Secretary has taken in 
        the preceding year and will take in the following 5 
        years to carry out the duties described in subsection 
        (b)(2);
          [(2) include a report on the results of an annual 
        consumer satisfaction review concerning the performance 
        of the system, including the performance of the system 
        in addressing the needs of Congress, States, 
        localities, employers, jobseekers, and other-consumers;
          [(3) evaluate the performance of the system and 
        recommend needed improvements, taking into 
        consideration the results of the consumer satisfaction 
        review, with particular attention to the improvements 
        needed at the State and local levels;
          [(4) justify the budget request for annual 
        appropriations by describing priorities for the fiscal 
        year succeeding the fiscal year in which the plan is 
        developed and priorities for the 5 subsequent fiscal 
        years for the system;
          [(5) describe current (as of the date of the 
        submission of the plan) spending and spending needs to 
        carry out activities under this section, including the 
        costs to States and localities of meeting the 
        requirements of subsection (e)(2); and
          [(6) describe the involvement of States in the 
        development of the plan, through formal consultations 
        conducted by the Secretary in cooperation with 
        representatives of the Governors of every State, and 
        with representatives of local workforce investment 
        boards, pursuant to a process established by the 
        Secretary in cooperation with the States.
    [(d) Coordination With the States.--The Secretary, working 
through the Bureau of Labor Statistics, and in cooperation with 
the States, shall--
          [(1) develop the annual plan described in subsection 
        (c) and address other employment statistics issues by 
        holding formal consultations, at least once each 
        quarter (beginning with the calendar quarter in which 
        the Workforce Investment Act of 1998 is enacted) on the 
        products and administration of the nationwide 
        [employment statistics system] workforce and labor 
        market information system; and
          [(2) hold the consultations with representatives from 
        each of the 10 Federal regions of the Department of 
        Labor, elected (pursuant to a process established by 
        the Secretary) by and from the State employment 
        statistics directors affiliate with the State agencies 
        that perform the duties described in subsection 
        (e)(2).]
    (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 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 (i).
    (e) State Responsibilities.--
          (1) Designation of state agency.--In order to receive 
        Federal financial assistance under this section, the 
        Governor of a State shall--
                  (A) designate a single State agency to be 
                responsible for the management of the portions 
                of the [employment statistics system] workforce 
                and labor market information system described 
                in subsection (a) that comprise a statewide 
                [employment statistics system] workforce and 
                labor market information system and for the 
                State's participation in the development of the 
                annual plan; and

           *       *       *       *       *       *       *

                  (A) consult with State and local employers, 
                participants, and local workforce investment 
                boards about the labor market relevance of the 
                data to be collected and disseminated through 
                the statewide [employment statistics system] 
                workforce and labor market information system;

           *       *       *       *       *       *       *

                  (D) maintain and continuously improve the 
                statewide [employment statistics system] 
                workforce and labor market information system 
                in accordance with this section;

           *       *       *       *       *       *       *

                  (F) conduct such other data collection, 
                analysis, and dissemination activities as will 
                ensure an effective statewide [employment 
                statistics system] workforce and labor market 
                information system;
                  (G) actively seek the participation of other 
                State and local agencies in data collection, 
                analysis, and dissemination activities in order 
                to ensure complementarity, compatibility, and 
                usefulness of data; and
                  [(H) participate in the development of the 
                annual plan described in subsection (c); and]
                  [(I)] (H) utilize the quarterly records 
                described in section 136(f)(2) of the Workforce 
                Investment Act of 1998 to assist the State and 
                other States in measuring State progress on 
                State performance measures.

           *       *       *       *       *       *       *

    (g) Authorization of Appropriations.--[There are]
          (1) In general.--There are authorized to be 
        appropriated to carry out this section such sums as may 
        be necessary for each of the fiscal years [1999 through 
        2004] 2004 through 2009 to enable the Secretary to 
        carry out the provisions of this section in a timely 
        manner through grants or cooperative agreements with 
        the States.
          (2) Distribution of funds.--With regard to 
        distributing funds appropriated under paragraph (1) 
        (relating to workforce and labor market information 
        funding) for fiscal years 2004 through 2009, the 
        Secretary shall continue. to distribute the funds to 
        the States in the manner in which the Secretary 
        distributed funds to the States under this section for 
        fiscal years 1999 through 2003.

           *       *       *       *       *       *       *

    (i) 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).

           *       *       *       *       *       *       *


REHABILITATION ACT OF 1973

           *       *       *       *       *       *       *



SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--* * *

           *       *       *       *       *       *       *

    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. * * *
     * * * * * * *
Sec. 113. Incentive grants.
     * * * * * * *

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

Sec. 751. Definition.
[Sec. 752. Program of grants.
[Sec. 753. Authorization of appropriations.]
Sec. 752. Training and technical assistance.
Sec. 753. Program of grants.
Sec. 754. Authorization of appropriations.

SEC. 2. FINDINGS; PURPOSE; POLICY.

    (a) Findings.--* * *

           *       *       *       *       *       *       *

    (b) Purpose.--The purposes of this Act are--
          (1) to empower individuals with disabilities to 
        maximize employment, economic self-sufficiency, 
        independence, and inclusion and integration into 
        society, through--
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) the guarantee of equal opportunity; [and]
          (2) to ensure that the Federal Government plays a 
        leadership role in promoting the employment of 
        individuals with disabilities, especially individuals 
        with significant disabilities, and in assisting States 
        and providers of services in fulfilling the aspirations 
        of such individuals with disabilities for meaningful 
        and gainful employment and independent living[.]; and
          (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. 7. DEFINITIONS.

    For the purposes of this Act:
          (1) Administrative costs.--* * *

           *       *       *       *       *       *       *

                  (B) to the extent additional data is 
                necessary to make a determination of the 
                employment outcomes, and the nature, and scope 
                of vocational rehabilitation services, to be 
                included in the individualized plan for 
                employment of an eligible individual, a 
                comprehensive assessment to determine the 
                unique strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice, including the need for 
                supported employment and literacy services, of 
                the eligible individual, which comprehensive 
                assessment--

           *       *       *       *       *       *       *

                          (iii) may include, to the degree 
                        needed to make such a determination, an 
                        assessment of the personality, 
                        interests, interpersonal skills, 
                        intelligence and related functional 
                        capacities, [educational achievements] 
                        and literacy skills, work experience, 
                        vocational aptitudes, personal and 
                        social adjustments, and employment 
                        opportunities of the individual, and 
                        the medical, psychiatric, 
                        psychological, and other pertinent 
                        vocational, educational, cultural, 
                        social, recreational, and environmental 
                        factors, that affect the employment and 
                        rehabilitation needs of the individual; 
                        and

           *       *       *       *       *       *       *

          [(7) [Repealed]]
          (7) Consumer organization.--The term ``consumer 
        organization'' means a membership organization in which 
        a majority of the organization's members and a majority 
        of the organization's officers are individuals with 
        disabilities.

           *       *       *       *       *       *       *

          (17) Independent living core services.--The term 
        ``independent living core service'' means--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) peer counseling (including cross-
                disability peer counseling); [and]
                  (D) individual and systems advocacy[.]; and
                  (E) maintaining individuals with significant 
                disabilities in, or transitioning individuals 
                with significant disabilities to, community-
                based living.

           *       *       *       *       *       *       *

          (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).
          [(24)] (25) Local agency.--The term ``local agency'' 
        means an agency of a unit of general local government 
        or of an Indian tribe (or combination of such units or 
        tribes) which has an agreement with the designated 
        State agency to conduct a vocational rehabilitation 
        program under the supervision of such State agency in 
        accordance with the State plan approved under section 
        101. Nothing in the preceding sentence of this 
        paragraph or in section 101 shall be construed to 
        prevent the local agency from arranging to utilize 
        another local public or nonprofit agency to provide 
        vocational rehabilitation services if such an 
        arrangement is made part of the agreement specified in 
        this paragraph.
          [(25)] (26) Local workforce investment board.---The 
        term ``local workforce force investment board'' means a 
        local workforce investment board established under 
        section 117 of the Workforce Investment Act of 1998.
          [(26] (27) Nonprofit.--The term ``nonprofit'', when 
        used with respect to a community rehabilitation 
        program, means a community rehabilitation program 
        carried out by a corporation or association, no part of 
        the net earnings of which inures, or may lawfully 
        inure, to the benefit of any private shareholder or 
        individual and the income of which is exempt from 
        taxation under section 501(c)(3) of the Internal 
        Revenue Code of 1986.
          [(27)] (28) Ongoing support services.--The term 
        ``ongoing support services'' means services--
                  (A) provided to individuals with the most 
                significant disabilities;
                  (B) provided, at a minimum, twice monthly--
                          (i) to make an assessment, regarding 
                        the employment situation, at the 
                        worksite of each such individual in 
                        supported employment, or, under special 
                        circumstances, especially at the 
                        request of the client, off site; and
                          (ii) based on the assessment, to 
                        provide for the coordination or 
                        provision of specific intensive 
                        services, at or away from the worksite, 
                        that are needed to maintain employment 
                        stability; and
                  (C) consisting of--
                          (i) a particularized assessment 
                        supplementary to the comprehensive 
                        assessment described in paragraph 
                        (2)(B);
                          (ii) the provision of skilled job 
                        trainers who accompany the individual 
                        for intensive job skill training at the 
                        worksite;
                          (iii) job development, job retention, 
                        and placement services;
                          (iv) social skills training;
                          (v) regular observation or 
                        supervision of the individual;
                          (vi) followup services such as 
                        regular contact with the employers, the 
                        individuals, the individuals' 
                        representatives, and other appropriate 
                        individuals, in order to reinforce and 
                        stabilize the job placement;
                          (vii) facilitation of natural 
                        supports at the work site;
                          (viii) any other service identified 
                        in section 103; or
                          (ix) a service similar to another 
                        service described in this subparagraph.
          [(28)] (29) Personal assistance services.--The term 
        ``personal assistance services'' means a range of 
        services, provided by one or more persons, designed to 
        assist an individual with a disability to perform daily 
        living activities on or off the job that the individual 
        would typically perform if the individual did not have 
        a disability. Such services shall be designed to 
        increase the individual's control in life and ability 
        to perform everyday activities on or off the job.
          (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.
          [(29)] (31) Public or nonprofit.--The term ``public 
        or nonprofit'', used with respect to an agency or 
        organization, includes an Indian tribe.
          [(30)] (32) Rehabilitation technology.--The term 
        ``rehabilitation technology'' means the systematic 
        application of technologies, engineering methodologies, 
        or scientific principles to meet the needs of and 
        address the barriers confronted by individuals with 
        disabilities in areas which include education, 
        rehabilitation, employment, transportation, independent 
        living, and recreation. The term includes 
        rehabilitation engineering, assistive technology 
        devices, and assistive technology services.
          [(31)] (33) Secretary.--The term ``Secretary'', 
        except when the context otherwise requires, means the 
        Secretary of Education.
          [(32)] (34) State.--The term ``State'' includes, in 
        addition to each of the several States of the United 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern 
        Mariana Islands.
          [(33)] (35) State workforce investment board.--The 
        term ``State workforce investment board'' means a State 
        workforce investment board established under section 
        111 of the Workforce Investment Act of 1998.
          [(34] (36) Statewide workforce investment system.--
        The term ``statewide workforce investment system'' 
        means a system described in section 111(d)(2) of the 
        Workforce Investment Act of 1998.
          (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.
          [(35)] (38) Supported employment.--
                  (A) In general.--The term ``supported 
                employment'' means competitive work in 
                integrated work settings, or employment in 
                integrated work settings in which individuals 
                are working toward competitive work, consistent 
                with the strengths, resources, priorities, 
                concerns, abilities, capabilities, interests, 
                and informed choice of the individuals, for 
                individuals with the most significant 
                disabilities--
                          (i)(I) for whom competitive 
                        employment has not traditionally 
                        occurred; or
                          (II) for whom competitive employment 
                        has been interrupted or intermittent as 
                        a result of a significant disability; 
                        and
                          (ii) who, because of the nature and 
                        severity of their disability, need 
                        intensive supported employment services 
                        for the period, and any extension, 
                        described in [paragraph (36)(C)] 
                        paragraph (39)(C) and extended services 
                        after the transition described in 
                        paragraph (13)(C) in order to perform 
                        such work.
                  (B) Certain transitional employment.--Such 
                term includes transitional employment for 
                persons who are individuals with the most 
                significant disabilities due to mental illness.
          [(36)] (39) Supported employment services.--The term 
        ``supported employment services'' means ongoing support 
        services and other appropriate services needed to 
        support and maintain an individual with a most 
        significant disability in supported employment, that--
                  (A) are provided singly or in combination and 
                are organized and made available in such a way 
                as to assist an eligible individual to achieve 
                competitive employment;
                  (B) are based on a determination of the needs 
                of an eligible individual, as specified in an 
                individualized plan for employment; and
                  (C) are provided by the designated State unit 
                for a period of time not to extend beyond 18 
                months, unless under special circumstances the 
                eligible individual and the rehabilitation 
                counselor or coordinator involved jointly agree 
                to extend the time in order to achieve the 
                employment outcome identified in the 
                individualized plan for employment.
          [(37)] (40) Transition services.--The term 
        ``transition services'' means a coordinated set of 
        activities for a student, designed within an outcome-
        oriented process, that promotes movement from school to 
        post school activities, including postsecondary 
        education, vocational training, integrated employment 
        (including supported employment), continuing and adult 
        education, adult services, independent living, or 
        community participation. The coordinated set of 
        activities shall be based upon the individual student's 
        needs, taking into account the student's preferences 
        and interests, and shall include instruction, community 
        experiences, the development of employment and other 
        post school adult living objectives, and, when 
        appropriate, acquisition of daily living skills and 
        functional vocational evaluation.
          [(38)] (41) Vocational rehabilitation services.--The 
        term ``vocational rehabilitation services'' means those 
        services identified in section 103 which are provided 
        to individuals with disabilities under this Act.
          [(39)] (42) Workforce investment activities.--The 
        term ``workforce investment activities'' means 
        workforce investment activities, as defined in section 
        101 of the Workforce Investment Act of 1998, that are 
        carried out under that Act.

           *       *       *       *       *       *       *


                       ADMINISTRATION OF THE ACT

    Sec. 12. (a) In carrying out the purposes of this Act, the 
Commissioner may--
          (1)(A) provide consultative services and technical 
        assistance to public or nonprofit private agencies and 
        organizations, including assistance to enable such 
        agencies and organizations to facilitate meaningful and 
        effective participation by individuals with 
        disabilities in workforce investment activities[;] ; 
        and
          (B) provide technical assistance to the designated 
        State units on developing successful partnerships with 
        employers;

           *       *       *       *       *       *       *


SEC. 19. CARRYOVER.

    (a) In General.--Except as provided in subsection (b), and 
notwithstanding any other provision of law--
          (1) any funds appropriated for a fiscal year to carry 
        out any grant program under part B of title I, [section 
        509 (except as provided in section 509(b)),] part B of 
        title VI, part B [or C] of chapter 1 of title VII, or 
        chapter 2 of title VII (except as provided in section 
        [752(b)] 753(b)), including any funds reallotted under 
        any such grant program, that are not obligated and 
        expended by recipients prior to the beginning of the 
        succeeding fiscal year; or

           *       *       *       *       *       *       *

    (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 in a fiscal year that are not obligated and 
        expended by recipients prior to the beginning of the 
        succeeding fiscal year, shall remain available until 
        expended.

           *       *       *       *       *       *       *


              TITLE I--VOCATIONAL REHABILITATION SERVICES

                       PART A--GENERAL PROVISIONS


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

    (a) Findings; Purpose; Policy.--
          (1) Findings.--Congress finds that--

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations.--
          (1) In general.--For the purpose of making grants to 
        States under part B to assist States in meeting the 
        costs of vocational rehabilitation services provided in 
        accordance with State plans under section 101, there 
        are authorized to be appropriated such sums as may be 
        necessary for [fiscal years 1999 through 2003] fiscal 
        years 2004 through 2009; except that the amount to be 
        appropriated for a fiscal year shall not be less than 
        the amount of the appropriation under this paragraph 
        for the immediately preceding fiscal year, increased by 
        the percentage change in the Consumer Price Index 
        determined under subsection (c) for the immediately 
        preceding fiscal year.

           *       *       *       *       *       *       *


SEC. 101. STATE PLANS.

    (a) Plan Requirements.--
          (1) In general.--
                  (A) Submission.--* * *

           *       *       *       *       *       *       *

        (6) Methods for administration.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

                  (B) Employment of individuals with 
                disabilities.--The State plan shall provide 
                that the designated State agency, and entities 
                carrying out community rehabilitation programs 
                in the State, who are in receipt of assistance 
                under this title shall take affirmative action 
                [to employ and advance in employment] to 
                recruit, employ, and advance in employment 
                qualified individuals with disabilities covered 
                under, and on the same terms and conditions as 
                set forth in, section 503.

           *       *       *       *       *       *       *

          (7) Comprehensive system of personnel development.--
        The State plan shall--
                  (A) include a description (consistent with 
                the purposes of this Act) of a comprehensive 
                system of personnel development, which shall 
                include--
                          (i) * * *

           *       *       *       *       *       *       *

                                  [(I) a system for the 
                                continuing education of 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit, 
                                particularly with respect to 
                                rehabilitation technology; and]
                                  (I) a system for the 
                                continuing education of 
                                rehabilitation professionals 
                                and paraprofessionals within 
                                the designated State unit, 
                                particularly with respect to 
                                rehabilitation technology, 
                                including training implemented 
                                in coordination with State 
                                programs carried out under 
                                section 101 of the Assistive 
                                Technology Act of 1998 (29 
                                U.S.C. 3011); and

           *       *       *       *       *       *       *

          (8) Comparable services and benefits.--
                  (A) Determination of availability.--
                          (i) In general.--* * *

           *       *       *       *       *       *       *

                          (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.

           *       *       *       *       *       *       *

          (10) Reporting requirements.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

                  (B) Annual reporting.--In specifying the 
                information to be submitted in the reports, the 
                Commissioner shall require [annual reporting on 
                the eligible individual receiving the services, 
                on those specific data elements described in 
                section 136(d)(2) of the Workforce Investment 
                Act of 1998] annual reporting of information on 
                eligible individuals receiving services that is 
                needed to assess performance on the core 
                indicators of performance described in section 
                136(b)(2)(A)(i) of the Workforce Investment Act 
                of 1998 that are determined by the Secretary to 
                be relevant in assessing the performance of 
                designated State units in carrying out the 
                vocational rehabilitation program established 
                under this title.

           *       *       *       *       *       *       *

                          [(iii) of those applicants and 
                        eligible recipients who are individuals 
                        with significant disabilities--
                                  [(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                  [(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                          [(aa) the number who 
                                        earned the minimum wage 
                                        rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                          [(bb) the number who 
                                        received employment 
                                        benefits from an 
                                        employer during such 
                                        employment; and
                          [(iv) of those applicants and 
                        eligible recipients who are not 
                        individuals with significant 
                        disabilities--
                                  [(I) the number who ended 
                                their participation in the 
                                program carried out under this 
                                title and the number who 
                                achieved employment outcomes 
                                after receiving vocational 
                                rehabilitation services; and
                                  [(II) the number who ended 
                                their participation in the 
                                program and who were employed 6 
                                months and 12 months after 
                                securing or regaining 
                                employment, or, in the case of 
                                individuals whose employment 
                                outcome was to retain or 
                                advance in employment, who were 
                                employed 6 months and 12 months 
                                after achieving their 
                                employment outcome, including--
                                          [(aa) the number who 
                                        earned the minimum wage 
                                        rate specified in 
                                        section 6(a)(1) of the 
                                        Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 
                                        206(a)(1)) or another 
                                        wage level set by the 
                                        Commissioner, during 
                                        such employment; and
                                          [(bb) the number who 
                                        received employment 
                                        benefits from an 
                                        employer during such 
                                        employment.]
                          (iii) the number of applicants and 
                        eligible recipients, including the 
                        number of individuals with significant 
                        disabilities, who exited the program 
                        carried out under this title and the 
                        number of such individuals who achieved 
                        employment outcomes after receiving 
                        vocational rehabilitation services; and
                          (iv) the number of individuals who 
                        received vocational rehabilitation 
                        services who entered and retained 
                        employment and the increases in 
                        earnings of such individuals, 
                        consistent with State reporting 
                        responsibilities pursuant to section 
                        136(b)(2)(A)(i) of the Workforce 
                        Investment Act of 1998.

           *       *       *       *       *       *       *

                  (E) Additional information.--* * *

           *       *       *       *       *       *       *

                          (i) * * *

           *       *       *       *       *       *       *

                          (ii) information necessary to 
                        determine the success of the State [in 
                        meeting] in meeting the standards and 
                        indicators established pursuant to 
                        section 106--
                                  [(I) the State performance 
                                measures established under 
                                section 136(b) of the Workforce 
                                Investment Act of 1998, to the 
                                extent the measures are 
                                applicable to individuals with 
                                disabilities; and
                                  [(II) the standards and 
                                indicators established pursuant 
                                to section 106.]

           *       *       *       *       *       *       *

          (11) Cooperation, collaboration, and coordination.--
                  (A) Cooperative agreements with other 
                components of statewide workforce investment 
                systems.--

           *       *       *       *       *       *       *

                  [(C) Interagency cooperation with other 
                agencies.--The State plan shall include 
                descriptions of inter-agency cooperation with, 
                and utilization of the services and facilities 
                of, Federal, State, and local agencies and 
                programs, including programs carried out by the 
                Under Secretary for Rural Development of the 
                Department of Agriculture and State use 
                contracting programs, to the extent that such 
                agencies and programs are not carrying out 
                activities through the statewide workforce 
                investment system.]
                  (C) Interagency cooperation with other 
                agencies.--The State plan shall include 
                descriptions of interagency cooperation with, 
                and utilization of the services and facilities 
                of Federal, State, and local agencies and 
                programs, including the State programs carried 
                out under section 101 of the Assistive 
                Technology Act of 1998 (29 U.S.C. 3011), 
                programs carried out by the Under Secretary for 
                Rural Development of the Department of 
                Agriculture, and State use contracting 
                programs, to the extent that such agencies and 
                programs are not carrying out activities 
                through the statewide workforce investment 
                system.

           *       *       *       *       *       *       *

                  (D) Coordination with education officials.--* 
                * *

           *       *       *       *       *       *       *

                          (i) * * *

           *       *       *       *       *       *       *

                          (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;

           *       *       *       *       *       *       *

                  (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).

           *       *       *       *       *       *       *

          (20) Information and referral service.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

                  (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. 
                        1324b-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.
                  [(B)] (D) Referrals.--An appropriate referral 
                made through the system shall--
                          (i) * * *
                                  (II) information identifying 
                                a specific [point of contact], 
                                to the meximum extent possible, 
                                within the agency carrying out 
                                the program; and
                                  (III) information and advice 
                                regarding the most suitable 
                                services to assist the 
                                individual to prepare for, 
                                secure, retain, [or regain] 
                                regain, or advance in 
                                employment.

           *       *       *       *       *       *       *


SEC. 102. ELIGIBILITY AND INDIVIDUALIZED PLAN FOR EMPLOYMENT.

    (a) Eligibility.--
          (1) Criterion for eligibility.--* * *

           *       *       *       *       *       *       *

    (b) Development of an Individualized Plan for Employment.--
          (1) Options for developing an individualized plan for 
        employment.--* * *

           *       *       *       *       *       *       *

                  (A) information on the availability of 
                assistance, to the extent determined to be 
                appropriate by the eligible individual, from a 
                qualified vocational rehabilitation counselor 
                in developing all or part of the individualized 
                plan for employment for the individual, and the 
                availability of technical assistance in 
                developing all or part of the individualized 
                plan for employment for the individual[;] 
                including a listing of all the community 
                resources (including resources from consumer 
                organizations), 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;

           *       *       *       *       *       *       *

                  (D)(i) a description of the rights and 
                remedies available to such an individual 
                including, if appropriate, recourse to the 
                processes set forth in subsection (c); [and]
                  (ii) a description of the availability of a 
                client assistance program established pursuant 
                to section 112 and information about how to 
                contact the client assistance program[.];
                  (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.

           *       *       *       *       *       *       *

          (2) Mandatory procedures.--
                  (A) Written document.--* * *

           *       *       *       *       *       *       *

                  (E) Review and amendment.--The individualized 
                plan for employment shall be--
                          (i) reviewed at least annually by--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (II) the eligible individual 
                                or, as appropriate, the 
                                individual's representative, 
                                [and]
                          (ii) amended, as necessary, by the 
                        individual or, as appropriate, the 
                        individual's representative, in 
                        collaboration with a representative of 
                        the designated State agency or a 
                        qualified vocational rehabilitation 
                        counselor (to the extent determined to 
                        be appropriate by the individual), if 
                        there are substantive changes in the 
                        employment outcome, the vocational 
                        rehabilitation services to be provided, 
                        or the service providers of the 
                        services (which amendments shall not 
                        take effect until agreed to and signed 
                        by the eligible individual or, as 
                        appropriate, the individual's 
                        representative, and by a qualified 
                        vocational rehabilitation counselor 
                        employed by the designated State 
                        unit[.]; and
                          (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.
          (3) Mandatory components of an individualized plan 
        for employment.--* * *

           *       *       *       *       *       *       *

                  (B)(i) a description of the specific 
                vocational rehabilitation services that are--
                          (I) needed to achieve the employment 
                        outcome, including, as appropriate, the 
                        provision of assistive technology 
                        devices and assistive [and personal 
                        assistance services], technology 
                        services, mentoring services, and 
                        personal assistance services including 
                        training in the management of such 
                        services; and

           *       *       *       *       *       *       *

                  (F) for an eligible individual with the most 
                significant disabilities for whom an employment 
                outcome in a supported employment setting has 
                been determined to be appropriate, information 
                identifying--
                          (1) * * *

           *       *       *       *       *       *       *

                          (ii) the source of extended services 
                        or, to extent that the source of the 
                        extended services cannot be identified 
                        at the time of the development of the 
                        individualized plan for employment, a 
                        description of the basis for concluding 
                        that there is a reasonable expectation 
                        that such source will become available; 
                        [and]
                  (G) as determined to be necessary, a 
                statement of projected need for post-employment 
                services[.];
                  (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.

           *       *       *       *       *       *       *

    (c) Procedures.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

          (7) Impact on provision of services.--Unless the 
        individual with a disability so requests, or, in an 
        appropriate case, the individual's representative, so 
        requests, pending a decision by a mediator, hearing 
        officer, or reviewing officer under this subsection, 
        the designated State unit shall not institute a 
        suspension, reduction, or termination of services being 
        provided for the individual, including evaluation and 
        assessment services and plan development that take into 
        consideration the informed choice of the individual, 
        unless such services have been obtained through 
        misrepresentation, fraud, collusion, or criminal 
        conduct on the part of the individual, or the 
        individual's representative.

           *       *       *       *       *       *       *


SEC. 103. VOCATIONAL REHABILITATION SERVICES.

    (a) Vocational Rehabilitation Services for Individuals.--

           *       *       *       *       *       *       *

          (5) vocational and other training services, including 
        the provision of personal and vocational adjustment 
        services, literacy services, books, tools, and other 
        training materials, except that no training services 
        provided at an institution of higher education shall be 
        paid for with funds under this title unless maximum 
        efforts have been made by the designated State unit and 
        the individual to secure grant assistance, in whole or 
        in part, from other sources to pay for such training;

           *       *       *       *       *       *       *

          (17) services to the family of an individual with a 
        disability necessary to assist the individual to 
        achieve an employment outcome; [and]
          (18) specific post-employment services necessary to 
        assist an individual with a disability to, retain, 
        regain, or advance in employment[.]; and
          (19) mentoring services.

           *       *       *       *       *       *       *


SEC. 105. STATE REHABILITATION COUNCIL.

    (a) Establishment.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

    (b) Composition and Appointment.--
          (1) Composition.--
                  (A) In general.--Except in the case of a 
                separate Council established under subsection 
                (a)(2), the Council shall be composed of--
                          (i) * * *

           *       *       *       *       *       *       *

                          [(ix) in a State in which one or more 
                        projects are carried out under section 
                        121, at least one representative of the 
                        directors of the projects;]
                          (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;

           *       *       *       *       *       *       *

          [(5) Chairperson.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), the Council shall select a 
                chairperson from among the membership of the 
                Council.
                  [(B) Designation by chief executive 
                officer.--In States in which the chief 
                executive officer does not have veto power 
                pursuant to State law, the appointing authority 
                described in paragraph (3) shall designate a 
                member of the Council to serve as the 
                chairperson of the Council or shall require the 
                Council to so designate such a member.]
          (5) Chairperson.--The Council shall select a 
        chairperson from among the voting membership of the 
        Council.

           *       *       *       *       *       *       *


SEC. 106. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.

    (a) Establishment.--
          (1) In general.--
                  (A) Establishment of standards and 
                indicators.--

           *       *       *       *       *       *       *

    (b) Compliance.--
          (1) State reports.--* * *

           *       *       *       *       *       *       *

                  (B) Review.--The Commissioner shall--
                          (i) review the program improvement 
                        efforts of the State on a biannual 
                        basis and[, if necessary, request the 
                        State to make further revisions to the 
                        plan to improve performance;] 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; and

           *       *       *       *       *       *       *


            PART B--BASIC VOCATIONAL REHABILITATION SERVICES


                            STATE ALLOTMENTS

    Sec. 110. (a)(1) * * *

           *       *       *       *       *       *       *

    [(b)(1) 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 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) As soon as practicable but not later than the end of 
the fiscal year, the Commissioner shall make such amount 
available for carrying out the purposes of this title to one or 
more other States 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. The Commissioner shall make such 
amount available only if such other 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.
    [(3) 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.]
    (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 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 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.
    (c)(1) For fiscal year 1987 and for each subsequent fiscal 
year, the Commissioner shall reserve from the amount 
appropriated under section 100(b)(1) for allotment under this 
section a sum, determined under paragraph (2), to carry out the 
purposes of part C.
    [(2) The sum referred to in paragraph (1) shall be, as 
determined by the Secretary--
          [(A) not less than three-quarters of 1 percent and 
        not more than 1.5 percent of the amount referred to in 
        paragraph (1), for fiscal year 1999; and
          [(B) not less than 1 percent and not more than 1.5 
        percent of the amount referred to in paragraph (1), for 
        each of fiscal years 2000 through 2003.]
    (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) 0.075 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--
          (i) not less than 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) not more than 1.5 percent of the appropriated 
        amount for the covered year.

           *       *       *       *       *       *       *


                       CLIENT ASSISTANCE PROGRAM

    Sec. 112. (a) From funds appropriated under subsection (h), 
the Secretary shall, in accordance with this section make 
grants to [States] agencies designated under subsection (c) to 
establish and carry out client assistance programs to provide 
assistance in informing and advising all clients and client 
applicants of all available benefits under this Act, and, upon 
request of such clients or client applicants, to assist and 
advocate for such clients or applicants in their relationships 
with projects, programs, and services provided under this Act, 
including assistance and advocacy in pursuing legal, 
administrative, or other appropriate remedies to ensure the 
protection of the rights of such individuals under this Act and 
to facilitate access to the services funded under this Act 
through individual and systemic advocacy. The client assistance 
program shall provide information on the available services and 
benefits under this Act and title I of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12111 et seq.) to 
individuals with disabilities in the State, especially with 
regard to individuals with disabilities who have traditionally 
been unserved or underserved by vocational rehabilitation 
programs. In providing assistance and advocacy under this 
subsection with respect to services under this title, a client 
assistance program may provide the assistance and advocacy with 
respect to services that are directly related to facilitating 
the employment of the individual.

           *       *       *       *       *       *       *

    (e)(1)(A) [The Secretary shall allot the sums appropriated 
for each fiscal year under this section among the States on the 
basis of relative population of each State, except that no 
State shall receive less than $50,000.] 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.
    (B) The Secretary shall allot $30,000 each to the 
designated agencies located in American Samoa, Guam, the Virgin 
Islands, and the Commonwealth of the Northern Mariana Islands.

           *       *       *       *       *       *       *

    (D)(i) In any fiscal year that the funds appropriated for 
such fiscal year exceed $7,500,000, the minimum allotment shall 
be $100,000 for the designated agencies located in States and 
$45,000 for the designated agencies located in territories.

           *       *       *       *       *       *       *

    (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 activities provided under section 
509(c)(1)(A).
    (2) The amount of an allotment to a [State] designated 
agency for a fiscal year which the Secretary determines will 
not be required by the [State] designated agency during the 
period for which it is available for the purpose for which 
alloted shall be available for reallotment by the Secretary at 
appropriate times to other [States] designated agencies with 
respect to which such a determination has not been made, in 
proportion to the original allotments of such [States] 
designated agencies for such fiscal year, but with such 
proportionate amount for any of such other [State] designated 
agency being reduced to the extent it exceeds the sum the 
Secretary estimates such [State] designated agency needs and 
will be able to use during such period, and the total of such 
reduction shall be similarly realloted among the [States] 
designated agencies whose proportionate amounts were not so 
reduced. Any such amount so realloted to a [State] designated 
agency for a fiscal year shall be deemed to be a part of its 
allotment for such fiscal year.
    (3) [Except as specifically prohibited by or as otherwise 
provided in State law, the Secretary shall pay] The Secretary 
shall pay directly to the agency designated under subsection 
(c) the amount specified in the application approved under 
subsection (f).
    (f) No grant may be made under this section unless the 
[State] agency designated under subsection (c) submits an 
application to the Secretary at such time, in such manner, and 
containing or accompanied by such information as the Secretary 
deems necessary to meet the requirements of this section.

           *       *       *       *       *       *       *

    (h) There are authorized to be appropriated such sums as 
may be necessary for [fiscal years 1999 through 2003] fiscal 
years 2004 through 2009 to carry out the provisions of this 
section.

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *


       PART C--AMERICAN INDIAN VOCATIONAL REHABILITATION SERVICES


               VOCATIONAL REHABILITATION SERVICES GRANTS

    Sec. 121. (a) The Commissioner, in accordance with the 
provisions of this part, may make grants to the governing 
bodies of Indian tribes located on Federal and State 
reservations (and con sortia of such governing bodies) to pay 
90 percent of the costs of vocational rehabilitation services 
for American Indians who are individuals with disabilities 
residing on or near such reservations, 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. The non-Federal share of such costs may be in cash 
or in kind, fairly valued, and the Commissioner may waive such 
non-Federal share requirement in order to carry out the 
purposes of this Act.

           *       *       *       *       *       *       *

                  (B) contains assurances that the 
                rehabilitation services provided under this 
                part to American Indians who are individuals 
                with disabilities residing on or near a 
                reservation in a State shall be, to the maximum 
                extent feasible, comparable to rehabilitation 
                services provided under this title to other 
                individuals with disabilities residing in the 
                State and that, where appropriate, may include 
                services traditionally used by Indian tribes; 
                [and]
                  (C) contains assurances that the application 
                was developed in consultation with the 
                designated State unit of the State[.]; and
                  (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.

           *       *       *       *       *       *       *

          (3) [Any application approved under this part shall 
        be effective for not more than 60 months, except as 
        determined otherwise by the Commissioner pursuant to 
        prescribed regulations.] An application approved under 
        this part that 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. The State 
        shall continue to provide vocational rehabilitation 
        services under its State plan to American Indians 
        residing on or near a reservation whenever such State 
        includes any such American Indians in its State 
        population under section 110(a)(1).
          [(4) In making grants under this part, the Secretary 
        shall give priority consideration to applications for 
        the continuation of programs which have been funded 
        under this part.]
          (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. 

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

    Sec. 201. (a) There are authorized to be appropriated--
          (1) for the purpose of providing for the expenses of 
        the National Institute on Disability and Rehabilitation 
        Research under section 202, which shall include the 
        expenses of the Rehabilitation Research Advisory 
        Council under section 205, and shall not include the 
        expenses of such Institute to carry out section 204, 
        such sums as may be necessary for each of [fiscal years 
        1999 through 2003] fiscal years 2004 through 2009; and
          (2) to carry out section 204, such sums as may be 
        necessary for each of [fiscal years 1999 through 2003] 
        fiscal years 2004 through 2009.

      NATIONAL INSTITUTE ON DISABILITY AND REHABILITATION RESEARCH

    Sec. 202. (a)(1) * * *

           *       *       *       *       *       *       *

    (f)(1) The Director shall provide for scientific peer 
review of all applications for financial assistance for 
research, training, and demonstration projects over which the 
Director has authority. The scientific peer review shall be 
conducted by individuals who are not [Federal employees] 
Department of Education employees, who are scientists or other 
experts in the rehabilitation field (including the independent 
living field), including knowledgeable individuals with 
disabilities, and the individuals' representatives, and who are 
competent to review applications for the financial assistance.

           *       *       *       *       *       *       *


                 RESEARCH AND OTHER COVERED ACTIVITIES

    Sec. 204. (a)(1) * * *

           *       *       *       *       *       *       *

    (c)(1) * * *

           *       *       *       *       *       *       *

    (2) The Director shall not make a grant under this section 
that exceeds [$500,000] $750,000  unless the peer review of the 
grant application has included a site visit.

           *       *       *       *       *       *       *


SEC. 205. REHABILITATION RESEARCH ADVISORY COUNCIL.

    (a) Establishment.--* * *

           *       *       *       *       *       *       *

    (c) Qualifications.--Members of the Council shall be 
generally representative of the community of rehabilitation 
professionals, the community of rehabilitation researchers, the 
community of individuals with disabilities, and the 
individuals' representatives. At least one-half of the members 
shall be individuals with disabilities or the individuals' 
representatives. The Council also shall include a 
representative from the business community who has experience 
with the vocational rehabilitation system and hiring 
individuals with disabilities. 

           *       *       *       *       *       *       *


SEC. 302. TRAINING.

    (a) Grants and Contracts for Personnel Training.--
          (1) Authority.--* * *

           *       *       *       *       *       *       *

    (b) Grants and Contracts for Academic Degrees and Academic 
Certificate Granting Training Projects.--
          (1) Authority.--
                  (A) In general.--* * *

           *       *       *       *       *       *       *

                  (B) Types of projects.--Academic training 
                projects described in this subsection may 
                include--
                          (i) projects to train personnel in 
                        the areas of assisting and supporting 
                        individuals with disabilities pursuing 
                        self-employment, business ownership, 
                        and telecommuting, and of vocational 
                        rehabilitation counseling, 
                        rehabilitation technology, 
                        rehabilitation medicine, rehabilitation 
                        nursing, rehabilitation social work, 
                        rehabilitation psychiatry, 
                        rehabilitation psychology, 
                        rehabilitation dentistry, physical 
                        therapy, occupational therapy, speech 
                        pathology and audiology, physical 
                        education, therapeutic recreation, 
                        community rehabilitation programs, [or 
                        prosthetics and orthotics] prosthetics 
                        and orthotics, rehabilitation for the 
                        blind, or orientation and mobility 
                        instruction;

           *       *       *       *       *       *       *

    (i) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section such sums, as may 
be necessary for each of the [fiscal years 1999 through 2003] 
fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


SEC. 303. DEMONSTRATION AND TRAINING PROGRAMS.

    (a) Demonstration Projects To Increase Client Choice.--
          (1) Grants.--* * *

           *       *       *       *       *       *       *

          (5) Priority for competitions.--
                  (A) In general.--In announcing competitions 
                for grants and contracts under this subsection, 
                the Commissioner shall give priority 
                consideration to--
                          (i) [special projects] not less than 
                        2 special projects and demonstration 
                        programs of service delivery for adults 
                        who are either low-functioning and deaf 
                        or low-functioning and hard of hearing;

           *       *       *       *       *       *       *

    (c) Demonstration Projects for Employment of Students With 
Intellectual Disabilities or Mental Illness.--
          (1) Purpose.--The purpose of this subsection is to 
        support model demonstration projects to provide 
        supported and competitive employment experiences for 
        students with intellectual disabilities or students 
        with mental illness, and training for personnel that 
        work with students described in this paragraph, to 
        enable the students to gain employment skills and 
        experience that will promote effective transitions from 
        school to employment and adult living.
          (2) Grants authorized.--
                  (A) Competitive grants authorized.--The 
                Secretary may award grants, contracts, and 
                cooperative agreements, on a competitive basis, 
                to eligible organizations described in 
                paragraph (3), to enable the organizations to 
                carry out demonstration projects described in 
                paragraph (1).
                  (B) Duration.--The Secretary shall award 
                grants under this subsection for periods of 3 
                to 5 years.
          (3) Eligible organizations.--To be eligible to 
        receive a grant, contract, or cooperative agreement 
        under this subsection, an organization shall--
                  (A) have expertise in providing employment 
                and support services for individuals with 
                intellectual disabilities or individuals with 
                mental illness;
                  (B) have a proven track record in 
                successfully running supported employment 
                programs;
                  (C) provide employment services that are 
                exclusively integrated community-based 
                supported employment services;
                  (D) have expertise in creating natural 
                supports for employment;
                  (E) have expertise in providing computer 
                training for the targeted population for the 
                project involved; and
                  (F) have experience operating mentoring 
                programs for the target population in middle 
                and high schools for at least a decade in 
                diverse communities throughout the Nation.
          (4) Applications.--Each organization desiring to 
        receive a grant, contract, or cooperative agreement 
        under this subsection shall submit an application to 
        the Secretary at such time, in such manner, and 
        including such information as the Secretary may 
        require. Each application shall include--
                  (A) a description of how the organization 
                plans to carry out the activities authorized in 
                this subsection through a demonstration 
                project;
                  (B) a description of how the organization 
                will evaluate the project;
                  (C) a description of how the organization 
                will disseminate information about the 
                activities and the impact of the activities on 
                the lives of students served by the project; 
                and
                  (D) a description of how the organization 
                will coordinate activities with any other 
                relevant service providers in the locality 
                where the organization is based, including 
                federally supported independent living centers.
          (5) Authorized activities.--An organization that 
        receives a grant under this subsection shall use the 
        funds made available through the grant to carry out 1 
        or more of the following activities for individuals, 
        ages 14 through 21, who are students with intellectual 
        disabilities or students with mental illness:
                  (A) Providing supported and competitive 
                employment experiences.--The development of 
                innovative and effective supported and 
                competitive employment experiences after 
                school, on weekends, and in the summer, 
                utilizing natural supports that lead to 
                competitive high-paying jobs.
                  (B) Providing training to school and 
                transition personnel.--The development and 
                deployment of experts to work with transition 
                programs (including personnel working with 
                students on transition) so that personnel from 
                the programs develop skills needed to train 
                students with intellectual disabilities or 
                students with mental illness to be successful 
                in competitive employment in a range of 
                settings, including office settings. The 
                training shall include training for the 
                personnel in providing instruction to students 
                in computer skills, office skills, interview 
                etiquette, and appropriate social behavior 
                required for successful long-term employment in 
                professional environments.
          (6) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $5,000,000 for fiscal year 2004 and such 
        sums as may be necessary for fiscal years 2005 through 
        2008.
    (d) Demonstration Project for Employment of Individuals Who 
Are Deaf and Low Functioning.--
          (1) Purpose.--It is the purpose of this subsection to 
        support a model demonstration project to provide 
        training and support services for individuals who are 
        deaf and low functioning to enable them to gain 
        employment skills that will allow them to become 
        employed and economically self-sufficient.
          (2) Definition.--
                  (A) In general.--In this subsection, the term 
                ``individual who is deaf and low functioning'' 
                means an individual who has been deaf from 
                birth or very early childhood, reads at or 
                below the second grade level, has little or no 
                intelligible speech, and lacks a high school 
                diploma or GED.
                  (B) Secondary disabilities.--Such term may 
                include an individual with a secondary 
                disability.
          (3) Grants authorized.--
                  (A) Competitive grants authorized.--The 
                Secretary may award grants to State agencies, 
                other public agencies or organizations, or not-
                for-profit organizations with expertise in 
                providing employment training and support 
                services for individuals who are deaf and low 
                functioning to support model demonstration 
                projects.
                  (B) Duration.--Grants under this subsection 
                shall be awarded for a period not to exceed 5 
                years.
          (4) Authorized activities.--
                  (A) Developing a comprehensive training 
                program.--Each grant recipient shall develop an 
                innovative, comprehensive program of 
                instruction for individuals who are deaf and 
                low functioning that can be implemented, at 
                multiple training locations through such means 
                as distance learning and use of advanced 
                technology, as appropriate. Such training 
                program shall be developed to maximize the 
                potential for replication of the program by 
                other training providers.
                  (B) Implementation.--Each grant recipient 
                shall implement the comprehensive training 
                program developed in subparagraph (A) as soon 
                as feasible. Such training shall provide 
                instruction on the job and the social skills 
                necessary for successful long-term employment 
                of individuals who are deaf, and low 
                functioning.
                  (C) Establishing a post-training program of 
                employment and support services.--Each grant 
                recipient shall implement employment and 
                support services to assist individuals who 
                complete the training program under 
                subparagraph (A) in securing employment and 
                transitioning to the workplace for a period of 
                not less than 90 days subsequent to placement.
          (5) Applications.--Each entity desiring to receive a 
        grant under this subsection shall submit an application 
        to the Secretary at such time, in such manner, and 
        accompanied by such information as the Secretary may 
        require including--
                  (A) a description of how the applicant plans 
                to address the activities authorized under this 
                subsection;
                  (B) a description of the evaluation plan to 
                be used in the project;
                  (C) a description of how the applicant will 
                disseminate information about the training 
                program developed and the results of the model 
                demonstration project; and
                  (D) a description of how the project will 
                coordinate with any other relevant service 
                providers or entities providing employment 
                training and supports for individuals who are 
                deaf and low functioning.
          (6) Mandated evaluation and dissemination 
        activities.--
                  (A) Annual report.--Not later than 2 years 
                after the date on which a grant under this 
                subsection is awarded and annually thereafter, 
                each grant recipient shall submit to the 
                Commissioner a report containing--
                          (i) the number of individuals who are 
                        participating in the demonstration 
                        project funded under this subsection;
                          (ii) the employment and other skills 
                        being taught in the project;
                          (iii) the number of individuals 
                        participating in the project that are 
                        placed in employment;
                          (iv) the job sites in which those 
                        individuals are placed and the type of 
                        jobs they are placed in; and
                          (v) the number of individuals who 
                        have dropped out of the project and the 
                        reasons for their terminating 
                        participation in the project.
                  (B) Evaluation of the project.--Each grant 
                recipient shall implement the evaluation plan 
                approved in its application for determining the 
                results of the project within the timeframe 
                specified in, and following the provisions of, 
                its approved application.
                  (C) Participant evaluation process; final 
                evaluation.--In the final year of the project, 
                the grant recipient will produce a final 
                evaluation report of the results of the model 
                demonstration project containing--
                          (i) the number of individuals who 
                        participated in the training program;
                          (ii) a description of the job sites 
                        in which those individuals were placed;
                          (iii) the number of individuals 
                        placed in employment and the type of 
                        employment in which they were placed;
                          (iv) the number of individuals who 
                        did not complete their training and the 
                        reasons those individuals dropped out 
                        of the project;
                          (v) the number of individuals who 
                        participated in the training project 
                        and who remain employed as of 2 months 
                        prior to the date on which the final 
                        report is submitted to the Secretary;
                          (vi) a written analysis of the model 
                        project, including both the strengths 
                        and weaknesses of the project, to 
                        assist other entities in replicating 
                        the training program developed through 
                        this model demonstration project; and
                          (vii) such other information as the 
                        Secretary determines appropriate.
                  (D) Dissemination.--Not later than 5 years 
                after the date on which an award is granted 
                under this subsection, the evaluations and 
                results of activities funded by such grant 
                shall be disseminated to State vocational 
                rehabilitation agencies, school systems 
                providing instruction to students who are deaf, 
                supported employment providers, postsecondary 
                vocational training programs, employers, the 
                Social Security Administration, and other 
                interested parties.
          (7) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection, $5,000,000 for fiscal year 2004 and such 
        sums as may be necessary for each of fiscal years 2005 
        through 2008.
    [(c)] (e) Parent Information and Training Program.--
          (1) Grants.--* * *

           *       *       *       *       *       *       *

    [(d)] (f) Braille Training Programs.--
          (1) Establishment.--* * *

           *       *       *       *       *       *       *

    (g) 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.
    [(e)] (h) Authorization of Appropriations.--There are 
authorized to be appropriated to carry out [this section] this 
section (other than subsections (c) and (d)) such sums as may 
be necessary for each of the [fiscal years 1999 through 2003] 
fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


SEC. 304. MIGRANT AND SEASONAL FARMWORKERS.

    (a) Grants.--
          (1) Authority.--* * *

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as may be necessary to carry out 
this section, for each of the [fiscal years 1999 through 2003] 
fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


SEC. 305. RECREATIONAL PROGRAMS.

    (a) Grants.--
          (1) Authority.--
                  (A) In general.--* * *
                  (B) Recreation programs.--The recreation 
                programs that may be funded using assistance 
                provided under a grant under this section may 
                include vocational skills development, leisure 
                education, leisure networking, leisure resource 
                development, physical education and sports, 
                scouting and camping, 4-H activities, 
                [construction of facilities for aquatic 
                rehabilitation therapy,] music, dancing, 
                handicrafts, art, and homemaking. When possible 
                and appropriate, such programs and activities 
                should be provided in settings with peers who 
                are not individuals with disabilities.

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, such sums as may 
be necessary for each of the [fiscal years 1999 through 2003] 
fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


                TITLE IV--NATIONAL COUNCIL ON DISABILITY

            ESTABLISHMENT OF NATIONAL COUNCIL ON DISABILITY

    Sec. 400. (a)(1)(A) * * *

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

    Sec. 405. There are authorized to be appropriated to carry 
out this title such sums as may be necessary for each of the 
[fiscal years 1999 through 2003] fiscal years 2004 through 
2009.

           *       *       *       *       *       *       *


                      TITLE V--RIGHTS AND ADVOCACY

              EMPLOYMENT OF INDIVIDUALS WITH DISABILITIES

    Sec. 501. (a) * * *

           *       *       *       *       *       *       *


       ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD

    Sec. 502. (a)(1) * * *

           *       *       *       *       *       *       *

    (j) There are authorized to be appropriated for the purpose 
of carrying out the duties and functions of the Access Board 
under this section such sums as may be necessary for each of 
the [fiscal years 1999 through 2003] fiscal years 2004 through 
2009.

           *       *       *       *       *       *       *


SEC. 509. PROTECTION AND ADVOCACY OF INDIVIDUAL RIGHTS.

    (a) Purpose and Construction.--
          (1) Purpose.--* * *

           *       *       *       *       *       *       *

    (g) Carryover and Direct Payment.--
          (1) Direct Payment.--* * *
          (2) Carryover.--Any amount paid to an eligible system 
        that serves a State or American Indian consortium for a 
        fiscal year that remains unobligated at the end of such 
        year shall remain available to such system that serves 
        the State or American Indian consortium for obligation 
        during the next fiscal year for the purposes for which 
        such amount [was paid] was paid, except that program 
        income generated from the amount paid to an eligible 
        system shall remain available to such system until 
        expended.

           *       *       *       *       *       *       *

    (l) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section such sums as may 
be necessary for each of the [fiscal years 1999 through 2003] 
fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


  TITLE VI--EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS WITH DISABILITIES

                              SHORT TITLE

    Sec. 601. * * *

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

    Sec. 612. There are authorized to be appropriated to carry 
out the provisions of this part, such sums as may be necessary 
for each of [fiscal years 1999 through 2003] fiscal years 2004 
through 2009.

SEC. 628. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part such sums as may be necessary for each of [fiscal years 
1999 through 2003] fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


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

          CHAPTER 1--INDIVIDUALS WITH SIGNIFICANT DISABILITIES


                       PART A--GENERAL PROVISIONS


SEC. 701. PURPOSE.

           *       *       *       *       *       *       *


SEC. 704. STATE PLAN.

    (a) In General.--
          (1) Requirement.--* * *

           *       *       *       *       *       *       *

    (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. 705. STATEWIDE INDEPENDENT LIVING COUNCIL.

    (a) Establishment.--* * *
    (b) Composition and Appointment.--
          (1) Appointment.--* * *
          (2) Composition.--The Council shall include--
                  (A) at least one director of a center for 
                independent living chosen by the directors of 
                centers for independent living within the 
                State;
                  (B) as ex officio, nonvoting members--
                          (i) a representative from the 
                        designated State unit; and
                          (ii) representatives from other State 
                        agencies that provide services for 
                        individuals with disabilities; and
                  [(C) in a State in which one or more projects 
                are carried out under section 121, at least one 
                representative of the directors of the 
                projects.]
                  (C) 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.

           *       *       *       *       *       *       *

          [(5) Chairperson.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), the Council shall select a 
                chairperson from among the voting membership of 
                the Council.
                  [(B) Designation by chief executive 
                officer.--In States in which the Governor does 
                not have veto power pursuant to State law, the 
                appointing authority described in paragraph (3) 
                shall designate a voting member of the Council 
                to serve as the chairperson of the Council or 
                shall require the Council to so designate such 
                a voting member.]
          (5) Chairperson.--The Council shall select a 
        chairperson from among the voting membership of the 
        Council.

           *       *       *       *       *       *       *


                  PART B--INDEPENDENT LIVING SERVICES


SEC. 711. ALLOTMENTS.

    (a) In General.--
          (1) States.--
                  (A) Population basis.--* * *

           *       *       *       *       *       *       *


SEC. 714. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part such sums as may be necessary for each of the [fiscal 
years 1999 through 2003] fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


                 PART C--CENTERS FOR INDEPENDENT LIVING


SEC. 721. PROGRAM AUTHORIZATION.

    (a) In General.--* * *

           *       *       *       *       *       *       *

    [(c) In General.--
          [(1) States.--
                  [(A) Population basis.--After the reservation 
                required by subsection (b) has been made, and 
                except as provided in subparagraphs (B) and 
                (C), from the remainder of the amounts 
                appropriated for each such fiscal year to carry 
                out this part, the Commissioner shall make an 
                allotment to each State whose State plan has 
                been approved under section 706 of an amount 
                bearing the same ratio to such remainder as the 
                population of the State bears to the population 
                of all States.
                  [(B) Maintenance of 1992 amounts.--Subject to 
                the availability of appropriations to carry out 
                this part, the amount of any allotment made 
                under subparagraph (A) to a State for a fiscal 
                year shall not be less than the amount of 
                financial assistance received by centers for 
                independent living in the State for fiscal year 
                1992 under part B of this title, as in effect 
                on the day before the date of enactment of the 
                Rehabilitation Act Amendments of 1992.
                  [(C) Minimums.--Subject to the availability 
                of appropriations to carry out this part and 
                except as provided in subparagraph (B), for a 
                fiscal year in which the amounts appropriated 
                to carry out this part exceed the amounts 
                appropriated for fiscal year 1992 to carry out 
                part B of this title, as in effect on the day 
                before the date of enactment of the 
                Rehabilitation Act Amendments of 1992--
                          [(i) if such excess is not less than 
                        $8,000,000, the allotment to any State 
                        under subparagraph (A) shall be not 
                        less than $450,000 or \1/3\ of 1 
                        percent of the sums made available for 
                        the fiscal year for which the allotment 
                        is made, whichever is greater, and the 
                        allotment of any State under this 
                        section for any fiscal year that is 
                        less than $450,000 or \1/3\ of 1 
                        percent of such sums shall be increased 
                        to the greater of the 2 amounts;
                          [(ii) if such excess is not less than 
                        $4,000,000 and is less than $8,000,000, 
                        the allotment to any State under 
                        subparagraph (A) shall be not less than 
                        $400,000 or \1/3\ of 1 percent of the 
                        sums made available for the fiscal year 
                        for which the allotment is made, 
                        whichever is greater, and the allotment 
                        of any State under this section for any 
                        fiscal year that is less than $400,000 
                        or \1/3\ of 1 percent of such sums 
                        shall be increased to the greater of 
                        the 2 amounts; and
                          [(iii) if such excess is less than 
                        $4,000,000, the allotment to any State 
                        under subparagraph (A) shall approach, 
                        as nearly as possible, the greater of 
                        the 2 amounts described in clause (ii).
          [(2) Certain territories.--
                  [(A) In general.--For the purposes of 
                paragraph (1)(C), Guam, American Samoa, the 
                United States Virgin Islands, and the 
                Commonwealth of the Northern Mariana Islands 
                shall not be considered to be States.
                  [(B) Allotment.--Each jurisdiction described 
                in subparagraph (A) shall be allotted under 
                paragraph (1)(A) not less than \1/8\ of 1 
                percent of the remainder for the fiscal year 
                for which the allotment is made.
          [(3) Adjustment for inflation.--For any fiscal year, 
        beginning in fiscal year 1999, in which the total 
        amount appropriated to carry out this part exceeds the 
        total amount appropriated to carry out this part for 
        the preceding fiscal year, the Commissioner shall 
        increase the minimum allotment under paragraph (1)(C) 
        by a percentage that shall not exceed the percentage 
        increase in the total amount appropriated to carry out 
        this part between the preceding fiscal year and the 
        fiscal year involved.
          [(4) Proportional reduction.--To provide allotments 
        to States in accordance with paragraph (1)(B), to 
        provide minimum allotments to States (as increased 
        under paragraph (3)) under paragraph (1)(C), or to 
        provide minimum allotments to States under paragraph 
        (2)(B), the Commissioner shall proportionately reduce 
        the allotments of the remaining States under paragraph 
        (1)(A), with such adjustments as may be necessary to 
        prevent the allotment of any such remaining State from 
        being reduced to less than the amount required by 
        paragraph (1)(B).]
    (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.

           *       *       *       *       *       *       *

    (e) Carryover Authority.--Notwithstanding any other 
provision of law--
          (1) any funds appropriated for a fiscal year to carry 
        out a grant program under section 722 or 723, 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 that succeeding fiscal year and the 
        subsequent fiscal year; and
          (2) any amounts of program income received by 
        recipients under a grant program under section 722 or 
        723 in a fiscal year 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 
        that succeeding fiscal year and the subsequent fiscal 
        year.

           *       *       *       *       *       *       *


SEC. 722. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES IN WHICH 
                    FEDERAL FUNDING EXCEEDS STATE FUNDING.

    (a) Establishment.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

    (c) Existing Eligible Agencies.--In the administration of 
the provisions of this section, the Commissioner shall award 
grants to any eligible agency that has been awarded a grant 
under this part [by September 30, 1997] during the preceding 
year, unless the Commissioner makes a finding that the agency 
involved fails to meet program and fiscal standards and 
assurances set forth in section 725.

SEC. 723. GRANTS TO CENTERS FOR INDEPENDENT LIVING IN STATES IN WHICH 
                    STATE FUNDING EQUALS OR EXCEEDS FEDERAL FUNDING.

    (a) Establishment.--
          (1) In general.--
                  (A) Initial year.--
                          (i) Determination.--* * *

           *       *       *       *       *       *       *

    (c) Existing Eligible Agencies.--In the administration of 
the provisions of this section, the director of the designated 
State unit shall award grants under this section to any 
eligible agency that has been awarded a grant under this part 
[by September 30, 1997] during the preceding year, unless the 
director makes a finding that the agency involved fails to 
comply with the standards and assurances set forth in section 
725.

           *       *       *       *       *       *       *


SEC. 725. STANDARDS AND ASSURANCES FOR CENTERS FOR INDEPENDENT LIVING.

    (a) In General.--* * *
    (b) Standards.--
          (1) Philosophy.--* * *

           *       *       *       *       *       *       *

          (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. 727. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part such sums as may be necessary for each of the [fiscal 
years 1999 through 2003] fiscal years 2004 through 2009.

           *       *       *       *       *       *       *


 CHAPTER 2--INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS WHO ARE 
                                 BLIND


SEC. 751. DEFINITION.

    For purposes of this chapter, the term ``older individual 
who is blind'' means an individual age 55 or older whose 
significant visual impairment makes competitive employment 
extremely difficult to attain but for whom independent living 
goals are feasible.

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 
designated State agencies 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. [752.] 753. PROGRAM OF GRANTS.

    (a) In General.--
          (1) Authority for grants.--* * *

           *       *       *       *       *       *       *

    (b) Contingent Competitive Grants.--Beginning with fiscal 
year 1993, in the case of any fiscal year for which the amount 
appropriated under [section 753] section 754 is less than 
$13,000,000, grants made under subsection (a) shall be--
          (1) discretionary grants made on a competitive basis 
        to States; or
          (2) grants made on a noncompetitive basis to pay for 
        the continuation costs of activities for which a grant 
        was awarded--
                  (A) under this chapter; or
                  (B) under part C, as in effect on the day 
                before the date of enactment of the 
                Rehabilitation Act Amendments of 1992.
    (c) Contingent Formula Grants.--
          (1) In general.--In the case of any fiscal year for 
        which the amount appropriate under [section 753] 
        section 754 is equal to or greater than $13,000,000, 
        grants under subsection (a) shall be made only to 
        States and shall be made only from allotments under 
        paragraph (2).
          (2) Allotments.--For grants under subsection (a) for 
        a fiscal year described in paragraph (1), the 
        Commissioner shall make an allotment to each State in 
        an amount determined in accordance with [subsection 
        (j)] subsection (i), and shall make a grant to the 
        State of the allotment made for the State if the State 
        submits to the Commissioner an application in 
        accordance with [subsection (i)] subsection (h).
    (g) Certain Expenditures of Grants.--A State may expend a 
grant under subsection (a) to carry out the purposes specified 
in subsection (d) through grants to, or contracts with, public 
and nonprofit private agencies or organizations.
    [(h) Requirement Regarding State Plan.--The Commissioner 
may not make a grant under subsection (a) unless the State 
involved agrees that, in carrying out subsection (d)(1), the 
State will seek to incorporate into the State plan under 
section 704 any new methods and approaches relating to 
independent living services for older individuals who are 
blind.]
    [(i)] (h) Application for Grant.--
          (1) In general.--The Commissioner may not make a 
        grant under subsection (a) unless an application for 
        the grant is submitted to the Commissioner and the 
        application is in such form, is made in such manner, 
        and contains such agreements, assurances, and 
        information as the Commissioner determines to be 
        necessary to carry out this section (including 
        agreements, assurances, and nformation with respect to 
        any grants under [subsection (j)(4)] subsection (i)(4).
          (2) Contents.--An application for a grant under this 
        section shall contain--
                  (A) an assurance that the agency described in 
                subsection (a)(2) will prepare and submit to 
                the Commissioner a report, at the end of each 
                fiscal year, with respect to each project or 
                program the agency operates or administers 
                under this section, whether directly or through 
                a grant or contract, which report shall 
                contain, at a minimum, information on--
                          (i) * * *

           *       *       *       *       *       *       *

                          (vi) a comparison, if appropriate, of 
                        prior year activities with the 
                        activities of the most recent year; and
                  (B) an assurance that the agency will--
                          (i) provide services that contribute 
                        to the maintenance of, or the increased 
                        independence of, older individuals who 
                        are blind; and
                          (ii) engage in--
                                  (I) capacity-building 
                                activities, including 
                                collaboration with other 
                                agencies and organizations;
                                  (II) activities to promote 
                                community awareness, 
                                involvement, and assistance; 
                                and
                                  (III) outreach efforts [and].
                  [(C) an assurance that the application is 
                consistent with the State plan for providing 
                independent living services required by section 
                704.]
    [(j)] (i) Amount of Formula Grant.--
          (1) In general.--Subject to the availability of 
        appropriations, the amount of an allotment under 
        subsection (a) for a State for a fiscal year shall be 
        the greater of--
                  (A) the amount determined under paragraph 
                (2); or
                  (B) the amount determined under paragraph 
                (3).
          [(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 subparagraph (A) of paragraph 
                (1) for a fiscal year is the greater of--
                          [[(i) $225,000: or
                          [(ii) an amount equal to \1/3\ of 1 
                        percent of the amount appropriated 
                        under section 753 for the 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 
                subparagraph (A) of paragraph (1) for a fiscal 
                year is $40,000.]
          (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 
                        per cent of the amount appropriated 
                        under section 754, and not reserved 
                        under section 752, for the 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.
          (3) Formula.--The amount referred to in subparagraph 
        (B) of paragraph (1) for a State for a fiscal year is 
        the product of--
                  (A) the amount appropriated under [section 
                753] section 754, and not reserved under 
                section 752, and available for allotments under 
                subsection (a); and

           *       *       *       *       *       *       *

          (4) Disposition of certain amounts.--
                  (A) Grants.-- * * *
                  (B) Amounts.--The amounts referred to in 
                subparagraph (A) are any amounts that are not 
                paid to States under subsection (a) as a result 
                of--
                          (i) the failure of any State to 
                        submit an application under [subsection 
                        (i)] subsection (h);

           *       *       *       *       *       *       *


SEC. [753.] 754. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
chapter such sums as maybe necessary for each of the [fiscal 
years 1999 through 2003] fiscal years 2004 through 2009.

HELEN KELLER NATIONAL CENTER ACT

           *       *       *       *       *       *       *



                         CONGRESSIONAL FINDINGS

    Sec. 202. The Congress finds that--

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

    Sec. 205. (a) There are authorized to be appropriated to 
carry out the provisions of this title such sums as may be 
necessary for each of the fiscal years [1999 through 2003] 2004 
through 2009. Such sums shall remain available until expended.
    (b) Any appropriation Act containing any appropriation 
authorized by subsection (a) shall contain a statement of the 
specific amount being made available to the Center.

           *       *       *       *       *       *       *


SEC. 208. HELEN KELLER NATIONAL CENTER FEDERAL ENDOWMENT PROGRAM.

    (a) Establishment.--* * *

           *       *       *       *       *       *       *

    (h) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, such sums as may 
be necessary for each of the fiscal years [1999 through 2003] 
2004 through 2009. Such sums shall remain available until 
expended.

           *       *       *       *       *       *       *


                                
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