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(i) by striking "subsection (d)" and inserting "section 134(c)"; and

(ii) by striking "subsection (d)(4)(G)" and inserting "section 134(c)(4)(G)";

(C) in paragraph (1)(C), by striking "subsection (e)" and inserting "section 134(d)";

(D) in paragraph (1)(D), by striking "section 121(b)" and inserting "subsection (b)"; and

(E) by amending paragraph (1)(E) to read as follows:

"(E) shall provide access to the information described in section 15(e) of the WagnerPeyser Act (29 U.S.C. 491-2(e)).”.

(c) CERTIFICATION AND FUNDING OF ONESTOP CENTERS.-Section 121 (as amended by subsection (b)) is further amended by adding at the end the following new subsections:

"(g) CERTIFICATION OF ONE-STOP CENTERS.

"(1) IN GENERAL.-The State board shall establish procedures and criteria for periodically certifying one-stop centers for the purpose of awarding the one-stop infrastructure funding described in subsection (h).

"(2) CRITERIA. The criteria for certification under this subsection shall include minimum standards relating to the scope and degree of service integration achieved by the centers involving the programs provided by the one-stop partners, and how the centers ensure that such providers meet the employment needs of local employers and participants.

"(3) EFFECT OF CERTIFICATION.-One-stop centers certified under this subsection shall be eligible to receive the infrastructure grants authorized under subsection (h).

"(h) ONE-STOP INFRASTRUCTURE FUNDING.

"(1) PARTNER CONTRIBUTIONS.—

“(A) PROVISION OF FUNDS.-Notwithstanding any other provision of law, as determined under subparagraph (B), a portion of the Federal funds provided to the State and areas within the State under the Federal laws authorizing the one-stop partner programs described in subsection (b)(1)(B) and participating additional partner programs described in (b)(2)(B) for a fiscal year shall be provided to the Governor by such programs to carry out this subsection.

"(B) DETERMINATION OF GOVERNOR.-Subject to subparagraph (C), the Governor, in consultation with the State board, shall determine the portion of funds to be provided under subparagraph (A) by each one-stop partner and in making such determination shall consider the proportionate use of the one-stop centers by each partner, the costs of administration for purposes not related to one-stop centers for each partner, and other relevant factors described in paragraph (3). "(C) LIMITATIONS.

"(i) PROVISION FROM ADMINISTRATIVE FUNDS. The funds provided under this paragraph by each one-stop partner shall be provided only from funds available for the costs of administration under the program administered by such partner, and shall be subject to the limitations with respect to the portion of funds under such programs that may be used for administration.

"(ii) FEDERAL DIRECT SPENDING PROGRAMS.-Programs that are Federal direct spending under section 250(c)(8) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)(8)) shall not, for purposes of this paragraph, be required to provide an amount in excess of the amount determined to be equivalent to the proportionate use of the one-stop centers by such programs in the State.

"(iii) NATIVE AMERICAN PROGRAMS.-Native American programs established under section 166 shall not be subject to the provisions of this subsection. The method for determining the appropriate portion of funds to be provided by such Native American pro

grams to pay for the costs of infrastructure of a one-stop center certified under subsection (g) shall be determined as part of the development of the memorandum of understanding under subsection (c) for the onestop center and shall be stated in the memorandum.

"(2) ALLOCATION BY GOVERNOR.-From the funds provided under paragraph (1), the Governor shall allocate funds to local areas in accordance with the formula established under paragraph (3) for the purposes of assisting in paying the costs of the infrastructure of One-Stop centers certified under subsection (g).

"(3) ALLOCATION FORMULA.-The State board shall develop a formula to be used by the Governor to allocate the funds described in paragraph (1). The formula shall include such factors as the State board determines are appropriate, which may include factors such as the number of centers in the local area that have been certified, the population served by such centers, and the performance of such centers.

"(4) COSTS OF INFRASTRUCTURE. For purposes of this subsection, the term 'costs of infrastructure' means the nonpersonnel costs that are necessary for the general operation of a one-stop center, including the rental costs of the facilities, the costs of utilities and maintenance, equipment (including adaptive technology for individuals with disabilities), strategic planning activities for the center, and common outreach activities. “(i) OTHER FUNDS.—

"(1) IN GENERAL.-In addition to the funds provided to carry out subsection (h), a portion of funds made available under Federal law authorizing the one-stop partner programs described in subsection (b)(1)(B) and participating partner programs scribed in subsection (b)(2)(B), or the noncash resources available under such programs shall be used to pay the costs relating to the operation of the one-stop delivery system that are not paid for from the funds provided under subsection (h), to the extent not inconsistent with the Federal law involved including

"(A) infrastructure costs that are in excess of the funds provided under subsection (h);

"(B) common costs that are in addition to the costs of infrastructure; and

"(C) the costs of the provision of core services applicable to each program.

"(2) DETERMINATION AND GUIDANCE.-The method for determining the appropriate portion of funds and noncash resources to be provided by each program under paragraph (1) shall be determined as part of the memorandum of understanding under subsection (c). The State board shall provide guidance to facilitate the determination of appropriate allocation of the funds and noncash resources in local areas.".

SEC. 109. ELIGIBLE PROVIDERS OF TRAINING SERVICES.

Section 122 (29 U.S.C. 2842) is amended to read as follows: "SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING SERVICES. "(a) IN GENERAL.-The Governor shall establish criteria and procedures regarding the eligibility of providers of training services described in section 134(c)(4) to receive funds provided under section 133(b) for the provision of such training services.

"(b) CRITERIA.—

"(1) IN GENERAL.-The criteria established pursuant to subsection (a) shall take into account the performance of providers of training services with respect to the indicators described in section 136 or other appropriate indicators (taking into consideration the characteristics of the population served and relevant economic conditions), and such

other factors as the Governor determines are appropriate to ensure the quality of services, the accountability of providers, how the centers ensure that such providers meet the needs of local employers and participants, whether providers of training allow participants to attain a certification, certificate, or mastery, and the informed choice of participants under chapter 5. Such criteria shall require that the provider submit appropriate, accurate and timely information to the State for purposes of carrying out subsection (d). The criteria shall also provide for periodic review and renewal of eligibility under this section for providers of training services. The Governor may authorize local areas in the State to establish additional criteria or to modify the criteria established by the Governor under this section for purposes of determining the eligibility of providers of training services to provide such services in the local area.

“(2) LIMITATION.-In carrying out the requirements of this subsection, no personally identifiable information regarding a student, including Social Security number, student identification number, or other identifier, may be disclosed without the prior written consent of the parent or eligible student in compliance with section 444 of the General Education Provisions Act (20 U.S.C. 1232g).

"(c) PROCEDURES.-The procedures established under subsection (a) shall identify the application process for a provider of training services to become eligible to receive funds under section 133(b) for the provision of training services, and identify the respective roles of the State and local areas in receiving and reviewing applications and in making determinations of eligibility based on the criteria established under this section. The procedures shall also establish a process for a provider of training services to appeal a denial or termination of eligibility under this section that includes an opportunity for a hearing and prescribes appropriate time limits to ensure prompt resolution of the appeal.

"(d) INFORMATION TO ASSIST PARTICIPANTS IN CHOOSING PROVIDERS.

"(1) IN GENERAL.-In order to facilitate and assist participants under chapter 5 in choosing providers of training services, the Governor shall ensure that an appropriate list or lists of providers determined eligible under this section in the State, accompanied by such information as the Governor determines is appropriate, is provided to the local boards in the State to be made available to such participants and to members of the public through the one-stop delivery system in the State.

"(2) SPECIAL RULE.-An entity that carries out programs under the Act of August 16, 1937 (commonly known as the 'National Apprenticeship Act', 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.) shall be included on the list of eligible providers described in paragraph (1) for so long as such entity remains certified by the Department of Labor.

"(e) AGREEMENTS WITH OTHER STATES.States may enter into agreements, on a reciprocal basis, to permit eligible providers of training services to accept individual training accounts provided in another State.

"(f) RECOMMENDATIONS.-In developing the criteria, procedures, and information required under this section, the Governor shall solicit and take into consideration the recommendations of local boards and providers of training services within the State. "(g)

OPPORTUNITY TO SUBMIT COMMENTS. During the development of the criteria, procedures, and information required under this section, the Governor shall provide an opportunity for interested members of the public, including representatives of business and labor organizations, to submit comments regarding such criteria, procedures, and information.

"(h) ON-THE-JOB TRAINING OR CUSTOMIZED TRAINING EXCEPTION.

"(1) IN GENERAL.-Providers of on-the-job training or customized training shall not be subject to the requirements of subsections (a) through (g).

"(2) COLLECTION AND DISSEMINATION OF INFORMATION.-A one-stop operator in a local area shall collect such performance information from on-the-job training and customized training providers as the Governor may require, determine whether the providers meet such performance criteria as the Governor may require, and disseminate information identifying providers that meet the criteria as eligible providers, and the performance information, through the one-stop delivery system. Providers determined to meet the criteria shall be considered to be identified as eligible providers of training services.". SEC. 110. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

(a) ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.-Section 123 (29 U.S.C. 2843) is amended to read as follows:

"SEC. 123. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES.

"(a) IN GENERAL.—From the funds allocated under section 128(b) to a local area, the local board for such area shall award grants or contracts on a competitive basis to providers of youth activities identified based on the criteria in the State plan and shall conduct oversight with respect to such providers.

"(b) EXCEPTIONS.-A local board may award grants or contracts on a sole-source basis if such board determines there are an insufficient number of eligible providers of training services in the local area involved (such as rural areas) for grants to be awarded on a competitive basis under subsection (a).".

(b) CLERICAL AMENDMENT.-The table of contents in section 1(b) is amended by amending the item related to section 123 to read as follows:

"Sec. 123. Eligible providers of youth activities.".

SEC. 111. YOUTH ACTIVITIES.

(a) STATE ALLOTMENTS.

(1) IN GENERAL.-Section 127(a) (29 U.S.C. 2852(a)) is amended to read as follows: "(a) ALLOTMENT AMONG STATES."(1) YOUTH ACTIVITIES.

“(A) YOUTH CHALLENGE GRANTS.— "(i) RESERVATION OF FUNDS. Of the amount appropriated under section 137(a) for each fiscal year, the Secretary shall reserve 25 percent to provide youth challenge grants under section 169.

"(ii)

LIMITATION.-Notwithstanding clause (i), if the amount appropriated under section 137(a) for a fiscal year exceeds $1,000,000,000, the Secretary shall reserve $250,000,000 to provide youth challenge grants under section 169.

"(B) OUTLYING AREAS AND NATIVE AMERICANS.

"(i) IN GENERAL.-After determining the amount to be reserved under subparagraph (A), of the remainder of the amount appropriated under section 137(a) for each fiscal year the Secretary shall

"(I) reserve not more than 1/4 of one percent of such amount to provide assistance to the outlying areas to carry out youth activities and statewide workforce investment activities; and

"(II) reserve not more than 1 and 1⁄2 percent of such amount to provide youth activities under section 166 (relating to Native Americans).

"(ii) RESTRICTION.-The Republic of Palau shall cease to be eligible to receive funding under this subparagraph upon entering into an agreement for extension of

United States educational assistance under the Compact of Free Association (approved by the Compact of Free Association Amendments Act of 2003 (Public Law 108–188)) after the date of enactment of the Job Training Improvement Act of 2005.

"(C) STATES.

"(i) IN GENERAL.—Of the remainder of the amount appropriated under section 137(a) for a fiscal year that is available after determining the amounts to be reserved under subparagraphs (A) and (B), the Secretary shall allot

"(I) the amount of the remainder that is less than or equal to the total amount that was allotted to States for fiscal year 2005 under section 127(b)(1)(C) of this Act (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) in accordance with the requirements of such section 127(b)(1)(C); and

"(II) the amount of the remainder, if any, in excess of the amount referred to in subclause (I) in accordance with clause (ii).

"(ii) FORMULAS FOR EXCESS FUNDS.-Subject to clauses (iii) and (iv), of the amounts described in clause (i)(II)—

"(I) 33 percent shall be allotted on the basis of the relative number of individuals in the civilian labor force who are ages 16-19 in each State, compared to the total number of individuals in the civilian labor force who are ages 16-19 in all States;

"(II) 33 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) 333 percent shall be allotted on the basis of the relative number of disadvantaged youth who are ages 16 through 21 in each State, compared to the total number of disadvantaged youth who are ages 16 through 21 in all States.

"(iii) MINIMUM AND MAXIMUM PERCENTAGES.-The Secretary shall ensure that no State shall receive an allotment for a fiscal year that is less than 90 percent or greater than 130 percent of the allotment percentage of that State for the preceding fiscal year.

"(iv) SMALL STATE MINIMUM ALLOTMENT. Subject to clause (iii), the Secretary shall ensure that no State shall receive an allotment under this paragraph that is less than 10 of 1 percent of the amount available under subparagraph (A).

"(2) DEFINITIONS.-For the purposes of paragraph (1), the following definitions apply:

"(A) ALLOTMENT PERCENTAGE.—The term 'allotment percentage', used with respect to fiscal year 2006 or a subsequent fiscal year, means a percentage of the remainder described in paragraph (1)(C)(i) that is received through an allotment made under this subsection for the fiscal year. The term, with respect to fiscal year 2005, means the percentage of the amounts allotted to States under this chapter (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that is received by the State involved for fiscal year 2005.

"(B) DISADVANTAGED YOUTH.-The term 'disadvantaged youth' means an individual who is age 16 through 21 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the poverty line.

"(3) SPECIAL RULE.-For purposes of the formulas specified in paragraph (1)(C), the Secretary shall, as appropriate and to the extent practicable, exclude college students and members of the Armed Forces from the determination of the number of disadvantaged youth.”.

(2) REALLOTMENT.-Section 127 (29 U.S.C. 2552) is further amended

(A) by striking subsection (b);

(B) by redesignating subsection (c) as subsection (b);

(C) in subsection (b) (as so redesignated)

(i) by amending paragraph (2) to read as follows:

"(2) AMOUNT.-The amount available for reallotment for a program year is equal to the amount by which the unexpended balance at the end of the program year prior to the program year for which the determination is made exceeds 30 percent of the total amount of funds available to the State under this section during such prior program year (including amounts allotted to the State in all prior program years that remained available). For purposes of this paragraph, the expended balance is the amount that is the difference between

"(A) the total amount of funds available to the State under this section during the program year prior to the program year for which the determination is made (including amounts allotted to the State in all prior program years that remained available); and

"(B) the accrued expenditures during such prior program year.";

(ii) in paragraph (3)—

(I) by striking "for the prior program year" and inserting "for the program year in which the determination is made”; and

(II) by striking "such prior program year" and inserting "such program year"; (iii) by amending paragraph (4) to read as follows:

"(4) ELIGIBILITY.-For purposes of this subsection, an eligible State means a State which does not have an amount available for reallotment under paragraph (2) for the program year for which the determination under paragraph (2) is made."; and

(iv) in paragraph (5), by striking "obligation" and inserting "accrued expenditure”. (b) WITHIN STATE ALLOCATIONS.(1) RESERVATION FOR STATEWIDE ACTIVITIES.-Section 128(a) is amended to read as follows:

"(a) RESERVATION FOR STATEWIDE ACTIVITIES.

"(1) IN GENERAL.-The Governor of a State shall reserve not more than 10 percent of the amount allotted to the State under section 127(a)(1)(C) for a fiscal year for statewide activities.

"(2) USE OF FUNDS.-Regardless of whether the amounts are allotted under section 127(a)(1)(C) and reserved under paragraph (1) or allotted under section 132 and reserved under section 133(a), the Governor may use the reserved amounts to carry out statewide youth activities under section 129(b) or statewide employment and training activities under section 133.".

(2) WITHIN STATE ALLOCATIONS.-Section 128(b) is amended to read as follows:

"(b) WITHIN STATE ALLOCATION.— "(1) IN GENERAL.-Of the amounts allotted to the State under section 127(a)(1)(C) and not reserved under subsection (a)(1)—

"(A) 80 percent of such amounts shall be allocated by the Governor to local areas in accordance with paragraph (2); and

"(B) 20 percent of such amounts shall be allocated by the Governor to local areas in accordance with paragraph (3).

"(2) ESTABLISHED FORMULA.—

"(A) IN GENERAL. Of the amounts described in paragraph (1)(A), the Governor shall allocate_

"(i) 33 percent shall be allotted on the basis of the relative number of individuals in the civilian labor force who are ages 16-19 in each local area, compared to the total number of individuals in the civilian labor force who are ages 16-19 in all local areas in the State;

"(ii) 33 percent shall be allotted on the basis of the relative number of unemployed individuals in each local area, compared to

the total number of unemployed individuals in all local areas in the State; and

"(iii) 33 percent on the basis of the relative number of disadvantaged youth who are ages 16 through 21 in each local area, compared to the total number of disadvantaged youth who are ages 16 through 21 in all local areas in the State.

"(B) MINIMUM AND MAXIMUM PERCENTAGES. The Governor shall ensure that no local area shall receive an allocation for a fiscal year under this paragraph that is less than 90 percent or greater than 130 percent of the allocation percentage of the local area for the preceding fiscal year.

"(C) DEFINITIONS.—

"(i) ALLOCATION PERCENTAGE.-For purposes of this paragraph, the term 'allocation percentage', used with respect to fiscal year 2006 or a subsequent fiscal year, means a percentage of the amount described in paragraph(1)(A) that is received through an allocation made under this paragraph for the fiscal year. The term, with respect to fiscal year 2005, means the percentage of the amounts allocated to local areas under this chapter (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that is received by the local area involved for fiscal year 2005.

"(ii) DISADVANTAGED YOUTH.-The term 'disadvantaged youth' means an individual who is age 16 through 21 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the poverty line.

"(3) YOUTH DISCRETIONARY ALLOCATION.— The Governor shall allocate to local areas the amounts described in paragraph (1)(B) in accordance with such demographic and economic factors as the Governor, after consultation with the State board and local boards, determines are appropriate.

"(4) LOCAL ADMINISTRATIVE COST LIMIT.— "(A) IN GENERAL.-Of the amounts allocated to a local area under this subsection and section 133(b) for a fiscal year, not more than 10 percent of the amount may be used by the local boards for the administrative costs of carrying out local workforce investment activities under this chapter or chapter

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(A) in paragraph (1), by striking "paragraph (2)(A) or (3) of”;

(B) by amending paragraph (2) to read as follows:

"(2) AMOUNT.-The amount available for reallocation for a program year is equal to the amount by which the unexpended balance at the end of the program year prior to the program year for which the determination is made exceeds 30 percent of the total amount of funds available to the local area under this section during such prior program year, (including amounts allotted to the local area in prior program years that remain available). For purposes of this paragraph, the unexpended balance is the amount that is the difference between

"(A) the total amount of funds available to the local area under this section during the program year prior to the program year for which the determination is made (including amounts allocated to the local area in all prior program years that remained available); and

"(B) the accrued expenditures during such prior program year.";

(C) by amending paragraph (3)—

(i) by striking "subsection (b)(3)" the first two places it appears and inserting "subsection (b)";

(ii) by striking "the prior program year" and inserting "the program year in which the determination is made";

(iii) by striking "such prior program year" and inserting "such program year"; and

(iv) by striking the last sentence; and (D) by amending paragraph (4) to read as follows:

“(4) ELIGIBILITY.-For purposes of this subsection, an eligible local area means a local area which does not have an amount available for reallocation under paragraph (2) for the program year for which the determination under paragraph (2) is made.".

(c) YOUTH PARTICIPANT ELIGIBILITY.-Section 129(a) (29 U.S.C. 2854(a)) is amended to read as follows:

"(a) YOUTH PARTICIPANT ELIGIBILITY.—

"(1) IN GENERAL.-The individuals participating in activities carried out under this chapter by a local area during any program year shall be individuals who, at the time the eligibility determination is made, are"(A) not younger than age 16 or older than age 24; and

"(B) one or more of the following:
"(i) school dropouts;

"(ii) recipients of a secondary school diploma, General Educational Development credential (GED), or other State-recognized equivalent (including recognized alternative standards for individuals with disabilities) who are deficient in basic skills and not attending any school;

"(iii) court-involved youth attending an alternative school;

"(iv) youth in foster care or who have been in foster care; or

"(v) in school youth who are low-income individuals and one or more of the following: "(I) Deficient in literacy skills. "(II) Homeless, runaway, or foster children.

"(III) Pregnant or parents.
"(IV) Offenders.

"(V) Individuals who require additional assistance to complete an educational program, or to secure and hold employment.

"(2) PRIORITY FOR SCHOOL DROPOUTS.—A priority in the provision of services under this chapter shall be given to individuals who are school dropouts.

"(3) LIMITATIONS ON ACTIVITIES FOR INSCHOOL YOUTH.

"(A) PERCENTAGE OF FUNDS. For any program year, not more than 30 percent of the funds available for statewide activities under subsection (b), and not more than 30 percent of funds available to local areas under subsection (c), may be used to provide activities for in-school youth meeting the requirements of paragraph (1)(B)(v).

"(B) NON-SCHOOL HOURS REQUIRED.— "(i) IN GENERAL.-Except as provided in clause (ii), activities carried out under this chapter for in-school youth meeting the requirements of paragraph (1)(B)(v) shall only be carried out in non-school hours or periods when school is not in session (such as before and after school or during recess).

"(ii) EXCEPTION.-The requirements of clause (i) shall not apply to activities carried out for in-school youth meeting the requirements of paragraph (1)(B)(v) during school hours that are part of a program that has demonstrated effectiveness in high school youth attaining diplomas.".

(d) STATEWIDE YOUTH ACTIVITIES.-Section 129(b) (29 U.S.C. 2854(b)) is amended to read as follows:

"(b) STATEWIDE ACTIVITIES.—

"(1) IN GENERAL.-Funds reserved by a Governor for a State as described in sections

128(a) and 133(a)(1) may be used for statewide activities including

"(A) additional assistance to local areas that have high concentrations of eligible youth;

"(B) supporting the provision of core services described in section 134(c)(2) in the one-stop delivery system;

"(C) conducting evaluations under section 136(e) of activities authorized under this chapter and chapter 5 in coordination with evaluations carried out by the Secretary under section 172, research, and demonstration projects;

"(D) providing incentive grants to local areas for regional cooperation among local boards (including local boards in a designated region as described in section 116(c)), for local coordination of activities carried out under this Act, and for exemplary performance by local areas on the local performance measures;

"(E) providing technical assistance and capacity building to local areas, one-stop operators, one-stop partners, and eligible providers, including the development and training of staff, the development of exemplary program activities, and the provision of technical assistance to local areas that fail to meet local performance measures;

"(F) operating a fiscal and management accountability system under section 136(f);

and

"(G) carrying out monitoring and oversight of activities under this chapter and chapter 5.

"(2) LIMITATION.-Not more than 5 percent of the funds allotted under section 127(b) shall be used by the State for administrative activities carried out under this subsection and section 133(a).

"(3) PROHIBITION.-No funds described in this subsection or in section 134(a) may be used to develop or implement education curricula for school systems in the State.".

(e) LOCAL ELEMENTS AND REQUIRE

MENTS.

(1) PROGRAM DESIGN.-Section 129(c)(1) (29 U.S.C. 2854(c) (1)) is amended

(A) in the matter preceding subparagraph (A), by striking "paragraph (2)(A) or (3), as appropriate, of";

(B) in subparagraph (B), by inserting "are directly linked to one or more of the performance outcomes relating to this chapter under section 136, and that” after "for each participant that"; and

(C) in subparagraph (C)—

(i) by redesignating clauses (i) through (iv) as clauses (ii) through (v), respectively; (ii) by inserting before clause (ii) (as so redesignated) the following:

"(i) activities leading to the attainment of a secondary school diploma, General Educational Development credential (GED), or other State-recognized equivalent (including recognized alternative standards for individuals with disabilities);";

(iii) in clause (ii) (as so redesignated), by inserting "and advanced training" after "opportunities";

(iv) in clause (iii) (as so redesignated), by inserting "that lead to the attainment of recognized credentials" after "learning"; and

(v) by amending clause (v) (as redesignated by this subparagraph) to read as follows:

"(v) effective connections to employers in sectors of the local labor market experiencing high growth in employment opportunities.".

(2) PROGRAM ELEMENTS.-Section 129(c)(2) (29 U.S.C. 2854(c)(2)) is amended

(A) in subparagraph (A), by striking "secondary school, including dropout prevention strategies" and inserting "secondary school diploma, General Educational Development credential (GED), or other State-recognized equivalent (including recognized al

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"(L) financial literacy skills.".

(3) ADDITIONAL REQUIREMENTS.-Section 129(c)(3)(A) (29 U.S.C. 2854(c)(3)(A)) is amended in the matter preceding clause (i) by striking "or applicant who meets the minimum income criteria to be considered an eligible youth".

(4) PRIORITY AND EXCEPTIONS.-Section 129(c) (29 U.S.C. 2854(c)) is further amended(A) by striking paragraphs (4) and (5); (B) by redesignating paragraph (6) as paragraph (4);

(C) by redesignating paragraph (7) as paragraph (5), and in such redesignated paragraph (5) by striking "youth councils" and inserting "local boards"; and

(D) by redesignating paragraph (8) as paragraph (6).

SEC. 112. COMPREHENSIVE PROGRAMS FOR

ADULTS.

(a) TITLE AMENDMENT.—

(1) The title heading of chapter 5 is amended to read as follows:

"CHAPTER 5-COMPREHENSIVE EMPLOYMENT AND TRAINING ACTIVITIES FOR ADULTS".

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

"CHAPTER 5-COMPREHENSIVE EMPLOYMENT AND TRAINING ACTIVITIES FOR ADULTS". (b) GENERAL AUTHORIZATION.-Section 131 (29 U.S.C. 2861) is amended

(1) by striking "paragraphs (1)(B) and (2)(B) of"; and

(2) by striking ", and dislocated workers,".

(c) STATE ALLOTMENTS.—

(1) IN GENERAL.-Section 132(a) (29 U.S.C. 2862(a)) is amended to read as follows:

"(a) IN GENERAL.-The Secretary shall— "(1) reserve 10 percent of the amount appropriated under section 137(b) for a fiscal year, of which—

"(A) not less than 75 percent shall be used for national dislocated worker grants under section 173, of which up to $125,000,000 may be used to carry out section 171(d);

"(B) not more than 20 percent may be used for demonstration projects under section 171; and

"(C) not more than 5 percent may be used to provide technical assistance under section 170; and

"(2) make allotments from 90 percent of the amount appropriated under section 137(b) for a fiscal year in accordance with subsection (b).".

(2) ALLOTMENT AMONG STATES.-Section 132(b) (29 U.S.C. 2862(b)) is amended to read as follows:

"(b) ALLOTMENT AMONG STATES FOR ADULT EMPLOYMENT AND TRAINING ACTIVITIES.

"(1) RESERVATION FOR OUTLYING AREAS.— "(A) IN GENERAL.-From the amount made available under subsection (a)(2) for a fiscal year, the Secretary shall reserve not more than 14 of 1 percent to provide assistance to outlying areas to carry out employment and training activities for adults and statewide workforce investment activities.

"(B) RESTRICTION.-The Republic of Palau shall cease to be eligible to receive

funding under this paragraph upon entering into an agreement for extension of United States educational assistance under the Compact of Free Association (approved by the Compact of Free Association Amendments Act of 2003 (Public Law 108–188)) after the date of enactment of the Job Training Improvement Act of 2005.

"(2) STATES.-Subject to paragraph (5), of the remainder of the amount referred to under subsection (a)(2) for a fiscal year that is available after determining the amount to be reserved under paragraph (1), the Secretary shall allot to the States for employment and training activities for adults and for statewide workforce investment activities

"(A) 26 percent in accordance with paragraph (3); and

"(B) 74 percent in accordance with paragraph (4).

"(3) BASE FORMULA.—

"(A) FISCAL YEAR 2006.—

“(i) IN GENERAL.-Subject to clause (ii), the amount referred to in paragraph (2)(A) shall be allotted for fiscal year 2006 on the basis of allotment percentage of each State under section 6 of the Wagner-Peyser Act for fiscal year 2005.

"(ii) EXCESS AMOUNTS.-If the amount referred to in paragraph (2)(A) for fiscal year 2006 exceeds the amount that was available for allotment to the States under the Wagner-Peyser Act for fiscal year 2005, such excess amount shall be allotted on the basis of the relative number of individuals in the civilian labor force in each State, compared to the total number of individuals in the civilian labor force in all States, adjusted to ensure that no State receives less than 10 of one percent of such excess amount.

"(iii) DEFINITION.-For purposes of this subparagraph, the term 'allotment percentage' means the percentage of the amounts allotted to States under section 6 of the Wagner-Peyser Act that is received by the State involved for fiscal year 2005.

"(B) FISCAL YEARS 2007 AND THEREAFTER.

"(i) IN GENERAL.-Subject to clause (ii), the amount referred to in paragraph(2)(A) shall be allotted for fiscal year 2007 and each fiscal year thereafter on the basis of the allotment percentage of each State under this paragraph for the preceding fiscal year.

"(ii) EXCESS AMOUNTS.-If the amount referred to in paragraph (2)(A) for fiscal year 2007 or any fiscal year thereafter exceeds the amount that was available for allotment under this paragraph for the prior fiscal year, such excess amount shall be allotted on the basis of the relative number of individuals in the civilian labor force in each State, compared to the total number of individuals in the civilian labor force in all States, adjusted to ensure that no State receives less than 3/10 of one percent of such excess amount.

“(iii) DEFINITION.-For purposes of this subparagraph, the term 'allotment percentage' means the percentage of the amounts allotted to States under this paragraph in a fiscal year that is received by the State involved for such fiscal year.

"(4) CONSOLIDATED FORMULA."(A) IN GENERAL.-Subject to subparagraphs (B) and (C), of the amount referred to in paragraph (2)(B)—

"(i) 60 percent shall be allotted on the basis of the relative number of unemployed individuals in each State, compared to the total number of unemployed individuals in all States;

"(ii) 25 percent shall be allotted on the basis of the relative excess number of unemployed individuals in each State, compared to the total excess number of unemployed individuals in all States; and

"(iii) 15 percent shall be allotted on the basis of the relative number of disadvantaged adults in each State, compared to the total number of disadvantaged adults in all States.

"(B) MINIMUM AND MAXIMUM PERCENTAGES.-

"(i) MINIMUM PERCENTAGE.-The Secretary shall ensure that no State shall receive an allotment under this paragraph for a fiscal year that is less than 90 percent of the allotment percentage of the State under this paragraph for the preceding fiscal year.

"(ii) MAXIMUM PERCENTAGE.-Subject to clause (i), the Secretary shall ensure that no State shall receive an allotment for a fiscal year under this paragraph that is more than 130 percent of the allotment of the State under this paragraph for the preceding fiscal year.

"(C) SMALL STATE MINIMUM ALLOTMENT.— Subject to subparagraph (B), the Secretary shall ensure that no State shall receive an allotment under this paragraph that is less than 2/10 of 1 percent of the amount available under subparagraph (A).

"(D) DEFINITIONS.-For the purposes of this paragraph:

"(i) ALLOTMENT PERCENTAGE.-The term 'allotment percentage', used with respect to fiscal year 2006 or a subsequent fiscal year, means a percentage of the amounts described in paragraph (2)(B) that is received through an allotment made under this paragraph for the fiscal year. The term, with respect fiscal year 2005, means the percentage of the amounts allotted to States under this chapter (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) and under reemployment service grants received by the State involved for fiscal year 2005.

"(ii) DISADVANTAGED ADULT.-The term 'disadvantaged adult' means an individual who is age 22 through 72 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the poverty line.

"(iii) EXCESS NUMBER.-The term 'excess number' means, used with respect to the excess number of unemployed individuals within a State, the number that represents the number of unemployed individuals in excess of 42 percent of the civilian labor force in the State.

"(5) ADJUSTMENTS IN ALLOTMENTS BASED ON DIFFERENCES WITH UNCONSOLIDATED FOR

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"(I) IN GENERAL.-If necessary to carry out subparagraph (A), the Secretary shall reduce the amounts that would be allotted under paragraphs (3) and (4) to States that have an excess allotment difference, as defined in subclause (II), by the amount of such excess, and use such amounts to increase the allotments to States that have an allotment difference less than zero.

"(II) EXCESS AMOUNTS.-For purposes of subclause (I), the term 'excess' allotment difference means an allotment difference for a State that is

"(aa) in excess of 3 percent of the amount described in subparagraph (C)(i)(II); or

"(bb) in excess of a percentage established by the Secretary that is greater than 3 percent of the amount described in subparagraph (C)(i)(II) if the Secretary deter

mines that such greater percentage is sufficient to carry out subparagraph (A).

"(ii) USE OF AMOUNTS AVAILABLE UNDER NATIONAL RESERVE ACCOUNT.-If the funds available under clause (i) are insufficient to carry out subparagraph (A), the Secretary shall use funds reserved under section 132(a) in such amounts as are necessary to increase the allotments to States to meet the requirements of subparagraph (A). Such funds shall be used in the same manner as the States use the other funds allotted under this subsection.

"(C) DEFINITION OF ALLOTMENT FERENCE.

DIF

"(i) IN GENERAL.-For purposes of this paragraph, the term 'allotment difference' means the difference between

"(I) the total amount a State would receive of the amounts available for allotment under subsection (b)(2) for a fiscal year pursuant to paragraphs (3) and (4); and

"(II) the total amount the State would receive of the amounts available for allotment under subsection (b)(2) for the fiscal year if such amounts were allotted pursuant to the unconsolidated formulas (applied as described in clause (iii)) that were used in allotting funds for fiscal year 2005.

"(ii) UNCONSOLIDATED FORMULAS.-For purposes of clause (i), the unconsolidated formulas are:

"(I) The requirements for the allotment of funds to the States contained in section 132(b)(1)(B) of this Act (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that were applicable to the allotment of funds under such section for fiscal year 2005.

"(II) The requirements for the allotment of funds to the States contained in section 132(b)(2)(B) of this Act (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that were applicable to the allotment of funds under such section for fiscal year 2005.

"(III) The requirements for the allotment of funds to the States that were contained in section 6 of the Wagner-Peyser Act (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that were applicable to the allotment of funds under such Act for fiscal year 2005.

"(IV) The requirements for the allotment of funds to the States that were established by the Secretary for Reemployment Services Grants that were applicable to the allotment of funds for such grants for fiscal year 2005.

"(iii) PROPORTIONATE APPLICATION OF UNCONSOLIDATED FORMULAS BASED ON FISCAL YEAR 2005. In calculating the amount under clause (i)(II), each of the unconsolidated formulas identified in clause (ii) shall be applied, respectively, only to the proportionate share of the total amount of funds available for allotment under subsection (b)(2) for a fiscal year that is equal to the proportionate share to which each of the unconsolidated formulas applied with respect to the total amount of funds allotted to the States under all of the unconsolidated formulas in fiscal year 2005.

"(iv) RULE OF CONSTRUCTION.-The amounts used to adjust the allotments to a State under subparagraph (B) for a fiscal year shall not be included in the calculation of the amounts under clause (i) for a subsequent fiscal year, including the calculation of allocation percentages for a preceding fiscal year applicable to paragraphs (3) and (4) and to the unconsolidated formulas described in clause (ii).”.

(3) REALLOTMENT.-Section U.S.C. 2862(c)) is amended

132(c) (29

(A) by amending paragraph (2) to read as follows:

"(2) AMOUNT.-The amount available for reallotment for a program year is equal to the amount by which the unexpended bal

ance at the end of the program year prior to the program year for which the determination is made exceeds 30 percent of the total amount of funds available to the State under this section during such prior program year (including amounts allotted to the State in all prior program years that remained available). For purposes of this paragraph, the expended balance is the amount that is the difference between

"(A) the total amount of funds available to the State under this section during the program year prior to the program year for which the determination is made (including amounts allotted to the State in all prior program years that remained available); and "(B) the accrued expenditures during such prior program year.";

(B) in paragraph (3)—

(i) by striking "for the prior program year" and inserting "for the program year in which the determination is made"; and

(ii) by striking "such prior program year" and inserting "such program year"; (C) by amending paragraph (4) to read as follows:

"(4) ELIGIBILITY. For purposes of this subsection, an eligible State means a State that does not have an amount available for reallotment under paragraph (2) for the program year for which the determination under paragraph (2) is made."; and

(D) in paragraph (5), by striking "obligation" and inserting "accrued expenditure". (d) WITHIN STATE ALLOCATIONS.

(1) RESERVATION FOR STATE ACTIVITIES.— Section 133(a) (29 U.S.C. 2863(a)) is amended to read as follows:

"(a) RESERVATION FOR STATEWIDE ACTIVITIES.-The Governor of a State may reserve up to 50 percent of the total amount allotted to the State under section 132 for a fiscal year to carry out the statewide activities described in section 134(a).".

(2) ALLOCATIONS TO LOCAL AREAS.-Section 133(b) (29 U.S.C. 2863(b)) is amended to read as follows:

"(b) ALLOCATIONS TO LOCAL AREAS.

"(1) IN GENERAL. Of the amounts allotted to the State under section 132(b)(2) and not reserved under subsection (a)—

"(A) 85 percent of such amounts shall be allocated by the Governor to local areas in accordance with paragraph (2); and

"(B) 15 percent of such amounts shall be allocated by the Governor to local areas in accordance with paragraph (3).

"(2) ESTABLISHED FORMULA.—

"(A) IN GENERAL. Of the amounts described in paragraph (1)(A), the Governor shall allocate

"(i) 60 percent on the basis of the relative number of unemployed individuals in each local area, compared to the total number of unemployed individuals in all local areas in the State;

"(ii) 25 percent on the basis of the relative excess number of unemployed individuals in each local area, compared to the total excess number of unemployed individuals in all local areas in the State; and

"(iii) 15 percent shall be allotted on the basis of the relative number of disadvantaged adults in each local area, compared to the total number of disadvantaged adults in all local areas in the State.

“(B) MINIMUM AND MAXIMUM PERCENTAGES. The Governor shall ensure that no local area shall receive an allocation for a fiscal year under this paragraph that is less than 90 percent or greater than 130 percent of the allocation percentage of the local area for the preceding fiscal year.

"(C) DEFINITIONS.—

"(i) ALLOCATION PERCENTAGE.-The term 'allocation percentage', used with respect to fiscal year 2006 or a subsequent fiscal year, means a percentage of the amount described in paragraph (1)(A) that is received through

an allocation made under this paragraph for the fiscal year. The term, with respect to fiscal year 2005, means the percentage of the amounts allocated to local areas under this chapter (as in effect on the day before the date of enactment of the Job Training Improvement Act of 2005) that is received by the local area involved for fiscal year 2005.

"(ii) DISADVANTAGED ADULT.-The term 'disadvantaged adult' means an individual who is age 22 through 72 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the poverty line.

"(iii) EXCESS NUMBER.-The term 'excess number' means, used with respect to the excess number of unemployed individuals within a local area, the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the local area.

"(3) DISCRETIONARY ALLOCATION.-The Governor shall allocate to local areas the amounts described in paragraph (1)(B) based on a formula developed in consultation with the State board and local boards. Such formula shall be objective and geographically equitable and may include such demographic and economic factors as the Governor, after consultation with the State board and local boards, determines are appropriate.

"(4) LOCAL ADMINISTRATIVE COST LIMIT.— "(A) IN GENERAL.-Of the amounts allocated to a local area under this subsection and section 128(b) for a fiscal year, not more than 10 percent of the amount may be used by the local boards for the administrative costs of carrying out local workforce investment activities under this chapter or chapter 4.

"(B) USE OF FUNDS.-Funds made available for administrative costs under subparagraph (A) may be used for the administrative costs of any of the local workforce investment activities described in this chapter or chapter 4, regardless of whether the funds were allocated under this subsection or section 128(b).".

(3) REALLOCATION AMONG LOCAL AREAS.— Section 133(c) (29 U.S.C. 2863(c)) is amended(A) in paragraph (1), by striking "paragraph (2)(A) or (3) of";

(B) by amending paragraph (2) to read as follows:

"(2) AMOUNT.-The amount available for reallocation for a program year is equal to the amount by which the unexpended balance at the end of the program year prior to the program year for which the determination is made exceeds 30 percent of the total amount of funds available to the local area under this section during such prior program year (including amounts allotted to the local area in prior program years that remain available). For purposes of this paragraph, the unexpended balance is the amount that is the difference between

"(A) the total amount of funds available to the local area under this section during the program year prior to the program year for which the determination is made (including amounts allocated to the local area in all prior program years that remained available); and

"(B) the accrued expenditures during such prior program year.";

(C) by amending paragraph (3)—

(i) by striking "subsection (b)(3)" the first two places it appears and inserting "subsection (b)";

(ii) by striking "the prior program year" and inserting "the program year in which the determination is made";

(iii) by striking "such prior program year" and inserting "such program year"; and

(iv) by striking the last sentence; and

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