II

105TH CONGRESS

2D SESSION S. 2215

To provide transitional community employment for unemployed persons, and

other individuals in poverty, who live in certain identified communities,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 25, 1998

Mr. WELLSTONE introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

To provide transitional community employment for unemployed persons, and other individuals in poverty, who

live in certain identified communities, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Strategic Transitional

5 Employment Program Act’’.

6 SEC. 2. DEFINITIONS.

7 In this Act:
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1 (1) CHIEF ELECTED OFFICIAL.—The term

2 ‘‘chief elected official’’ means—

3 (A) the chief elected executive officer of

4 the unit of general local government in a local

5 area; or

6 (B) if the local area includes more than 1

7 unit of general local government, 1 or more

8 chief elected executive officers, determined in

9 accordance with the procedure described in sec10 tion 308(d)(1) of Senate Bill 1186, 105th Con11 gress, as reported on October 15, 1997.

12 (2) COMMUNITY.—The term ‘‘community’’

13 means 1 or more contiguous census tracts or contig14 uous block numbering areas within a local area.

15 (3) COMMUNITY EMPLOYMENT.—The term

16 ‘‘community employment’’ means employment de17 scribed in section 213(b).

18 (4) EMPLOYMENT PROGRAM.—The term ‘‘em19 ployment program’’ means a strategic transitional

20 employment program described in section 101 and

21 funded under this Act.

22 (5) IDENTIFIED COMMUNITY.—The term ‘‘iden23 tified community’’ means—
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1 (A) for purposes of title II, a community

2 identified by a Governor under section

3 202(c)(2); and

4 (B) for purposes of title III, a community

5 identified by a chief elected official under sec6 tion 302(a).

7 (6) INDIAN TRIBE.—The term ‘‘Indian tribe’’

8 has the meaning given such term in section 4(e) of

9 the Indian Self-Determination and Education Assist10 ance Act (25 U.S.C. 450b(e)).

11 (7) LOCAL AREA.—The term ‘‘local area’’

12 means a local workforce investment area designated

13 as described in section 307 of Senate Bill 1186,

14 105th Congress, as reported on October 15, 1997.

15 (8) NATIVE HAWAIIAN ORGANIZATION.—The

16 term ‘‘Native Hawaiian organization’’ has the mean17 ing given such term in section 9212(3) of the Native

18 Hawaiian Education Act (20 U.S.C. 7912(3)).

19 (9) OUTLYING AREA.—The term ‘‘outlying

20 area’’ means the United States Virgin Islands,

21 Guam, American Samoa, the Commonwealth of the

22 Northern Mariana Islands, the Republic of the Mar23 shall Islands, the Federated States of Micronesia,

24 and the Republic of Palau.
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1 (10) POVERTY LINE.—The term ‘‘poverty line’’

2 means the poverty line (as defined by the Office of

3 Management and Budget, and revised annually in

4 accordance with section 673(2) of the Community

5 Services Block Grant Act (42 U.S.C. 9902(2))) ap6 plicable to a family of the size involved.

7 (11) SECRETARY.—The term ‘‘Secretary’’

8 means the Secretary of Labor.

9 (12) STATE.—The term ‘‘State’’ means each of

10 the several States of the United States, the District

11 of Columbia, and the Commonwealth of Puerto Rico.

12 (13) UNEMPLOYED.—The term ‘‘unemployed’’

13 means unemployed as defined by the Commissioner

14 of Labor Statistics.

15 (14) UNIT OF GENERAL LOCAL GOVERN16 MENT.—The term ‘‘unit of general local govern17 ment’’ means any general purpose political subdivi18 sion of a State that has the power to levy taxes and

19 spend funds, as well as general corporate and police

20 powers.

21 (15) VETERAN.—The term ‘‘veteran’’ means an

22 individual who served in the active military, naval, or

23 air service, and who was discharged or released from

24 such service under conditions other than dishonor25 able.
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1 TITLE I—GRANTS TO STATES

2 FOR DEVELOPMENT OF EM3 PLOYMENT PROGRAMS

4 SEC. 101. GRANTS.

5 (a) IN GENERAL.—From the funds appropriated to

6 carry out this title for a fiscal year and not reserved under

7 section 401, the Secretary shall make grants to assist eli8 gible States and outlying areas in developing strategic

9 transitional employment programs that provide commu10 nity employment, in local areas with identified commu11 nities, in the States and in outlying areas. The Secretary

12 shall make the grants to pay for the program share of

13 the cost of the development.

14 (b) LIMITS.—No State or outlying area shall receive

15 a grant under this section in an amount that exceeds

16 $1,000,000. No State or outlying area shall receive more

17 than 1 grant under this section.

18 (c) PERIOD.—Grants made under this section shall

19 be made for periods of 1 year.

20 (d) PROGRAM SHARE.—

21 (1) IN GENERAL.—The program share of the

22 cost of developing employment programs in a State

or outlying area is 662 23 ⁄3 percent.

24 (2) NON-PROGRAM SHARE.—The non-program

25 share of the cost may be provided in cash (including
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1 funds made available from federally funded pro2 grams, other than programs carried out under this

3 Act, with a non-Federal share requirement, and in4 cluding funds from State, local, and private sources)

5 or in kind, fairly evaluated, including plant, equip6 ment, or services.

7 SEC. 102. APPLICATIONS.

8 To be eligible to receive a grant under section 101

9 to develop employment programs under this title, a State

10 or outlying area shall submit an application to the Sec11 retary at such time, in such manner, and containing such

12 information as the Secretary may require.

13 SEC. 103. DEVELOPMENT ACTIVITIES.

14 A State or outlying area that receives a grant under

15 section 101 shall use the funds made available through

16 the grant to develop employment programs by developing

17 the State plan described in section 202 or the application

18 described in section 222, as appropriate.

19 SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

20 There are authorized to be appropriated to carry out

21 this title $50,000,000 for fiscal year 1999 and such sums

22 as may be necessary for each of fiscal years 2000 through

23 2002.
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1 TITLE II—GRANTS TO STATES

2 FOR IMPLEMENTATION OF

3 EMPLOYMENT PROGRAMS

4 Subtitle A—State Activities

5 SEC. 201. STATE ALLOTMENTS.

6 (a) IN GENERAL.—From the funds appropriated to

7 carry out this title for a fiscal year and not reserved under

8 section 221, 233, or 401, the Secretary shall make allot9 ments under subsection (b) to assist eligible States in

10 making grants to local areas, in order to implement em11 ployment programs in the States. The Secretary shall

12 make the allotments to pay for the program share of the

13 cost of the implementation.

14 (b) STATE ALLOTMENTS.—Of the funds described in

15 subsection (a), the Secretary shall allot—

16 (1) 50 percent on the basis of the relative num17 ber of unemployed individuals in each State, com18 pared to the total number of unemployed individuals

19 in all States; and

20 (2) 50 percent on the basis of the relative num21 ber of individuals in poverty in each State, compared

22 to the total number of individuals in poverty in all

23 States.

24 (c) ELIGIBILITY.—To be eligible to receive an allot25 ment under this section for a fiscal year, a State shall
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1 have received a grant under section 101 for a preceding

2 fiscal year.

3 (d) REALLOTMENT.—If any part of the funds allotted

4 under this section to a State for a fiscal year is not distrib5 uted to the State, or used for implementation grants to

6 local areas under title III, for such fiscal year, any remain7 ing funds from such part shall be reallotted under this

8 section for such fiscal year to the remaining eligible

9 States.

10 (e) PROGRAM SHARE.—

11 (1) IN GENERAL.—The program share of the

12 cost of implementing employment programs in a

State is 66 2 13 ⁄3 percent.

14 (2) NON-PROGRAM SHARE.—The non-program

15 share of the cost may be provided in cash (including

16 funds made available from federally funded pro17 grams, other than programs carried out under this

18 Act, with a non-Federal share requirement, and in19 cluding funds from State, local, and private sources)

20 or in kind, fairly evaluated, including plant, equip21 ment, or services.

22 (f) DEFINITION.—In this section, the term ‘‘individ23 ual in poverty’’ means an individual who received an in24 come, or is a member of a family that received a total
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1 family income, for the most recent 12 months, that, in

2 relation to family size, does not exceed the poverty line.

3 SEC. 202. STATE PLANS.

4 (a) IN GENERAL.—For a State to be eligible to re5 ceive an allotment under section 201 for the implementa6 tion of employment programs, the Governor of the State

7 shall submit an application to the Secretary at such time,

8 in such manner, and containing such information as the

9 Secretary may require.

10 (b) CONTENTS.—At a minimum, the application shall

11 include a State plan containing—

12 (1) a compilation of the information received by

13 the State in approved local plans submitted under

14 section 212;

15 (2) information describing and justifying the

16 local areas that will receive funds under this title to

17 implement employment programs, selected in accord18 ance with subsection (c); and

19 (3) a certification that the Governor has devel20 oped the State plan in a manner that will assure

21 compliance with the requirements of section 214.

22 (c) SELECTION OF LOCAL AREAS FOR STATE

23 PLANS.—

24 (1) SELECTION OF LOCAL AREAS WITH IDENTI25 FIED COMMUNITIES.—
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1 (A) PRIORITY.—In selecting, for purposes

2 of subsection (b), the local areas of the State to

3 receive funding to implement an employment

4 program under this title, the Governor shall

5 give priority to—

6 (i) local areas with a substantial num7 ber of identified communities, or substan8 tial populations in such communities; and

9 (ii) local areas with identified commu10 nities, for which a chief elected official sub11 mits a plan that proposes—

12 (I) employment projects to be

13 carried out by public agencies and pri14 vate nonprofit organizations; and

15 (II) employment projects that di16 rectly affect affordable housing,

17 human services, infrastructure, envi18 ronmental conservation or restoration,

19 and small business development, in

20 identified communities.

21 (B) NEED.—In selecting the local areas,

22 the Governor shall take into consideration the

23 need of the local areas for the employment to

24 be provided through the employment programs.
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1 (2) IDENTIFICATION OF COMMUNITIES WITHIN

2 LOCAL AREAS.—To enable the chief elected officials

3 of the local areas to develop local plans under sec4 tion 212 and to enable the Governor to make the se5 lection described in paragraph (1), the Governor

6 shall compile data, including information on income

7 levels, the poverty rate, the unemployment rate, edu8 cation levels, housing values, and the housing owner

9 occupancy rate in divisions in the local areas. The

10 Governor shall compile the data from the smallest

11 geographic divisions that are common to the areas

12 and for which the data is available. The Governor

13 shall analyze the data to identify urban and rural

14 communities in the local area that, collectively, have

15 high poverty rates and unemployment rates and low

16 income levels, education levels, housing values, and

17 housing owner occupancy rates relative to such

18 rates, levels, and values of the States and counties

19 in which the communities are located. The Governor

20 shall distribute the data, and the results of the anal21 ysis, to the chief elected official.

22 (d) DEVELOPMENT PROCESS.—

23 (1) OPINIONS.—In developing the State plan,

24 the Governor shall—
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1 (A) at a minimum, solicit the opinions of

2 organizations and partnerships in the State

3 that are responsible for planning, setting policy

4 for, and administering Federal and State em5 ployment and training programs, including pro6 grams funded through welfare-to-work grants

7 made under section 403(a)(5) of the Social Se8 curity Act (42 U.S.C. 603(a)(5)) in the State;

9 and

10 (B) to the extent possible, solicit the opin11 ions of organizations representing or serving in12 dividuals in poverty (as defined in section

13 201(f)), unemployed individuals, individuals

14 who are veterans, or individuals with disabilities

15 (as defined in section 3 of the Americans with

16 Disabilities Act of 1990 (42 U.S.C. 12102).

17 (2) DEVELOPMENT.—To the extent possible,

18 the Governor shall arrange for the organizations and

19 partnerships described in subparagraphs (A) and

20 (B) of paragraph (1) to develop the State plan, in21 cluding carrying out the responsibilities of the Gov22 ernor under this section.

23 SEC. 203. STATE ADMINISTRATION.

24 (a) IN GENERAL.—Except as provided in subsection

25 (b), the Governor shall carry out the administration of the
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1 State plan, including providing technical assistance to and

2 monitoring the activities of chief elected officials in local

3 areas that receive funds under this title, and conducting

4 related data collection activities.

5 (b) ORGANIZATIONS AND PARTNERSHIPS.—

6 (1) OPINIONS.—In carrying out the administra7 tion of the State plan, the Governor shall—

8 (A) at a minimum, solicit the opinions of

9 organizations and partnerships described in sec10 tion 202(d)(1)(A); and

11 (B) to the extent possible, solicit the opin12 ions of organizations described in section

13 202(d)(1)(B).

14 (2) ADMINISTRATION.—To the extent possible,

15 the Governor shall arrange for the organizations and

16 partnerships described in subparagraphs (A) and

17 (B) of paragraph (1) to carry out the administration

18 of the State plan.

19 (3) COORDINATION.—The Governor shall en20 sure the coordination of activities to be carried out

21 under the plan with the employment and training

22 programs carried out by the organizations and part23 nerships described in paragraph (1)(A) and with

24 other social services programs.
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1 (c) FISCAL AGENT.—The Governor of the State shall

2 serve as the fiscal agent for the allotment to the State

3 under section 201.

4 (d) ADMINISTRATIVE EXPENSES.—Not more than 10

5 percent of the funds made available to a State through

6 an allotment made under section 201 may be used for the

7 administration of the State plan.

8 SEC. 204. STATE REPORTS.

9 Each Governor of a State receiving funds under this

10 title to carry out employment programs in the State shall

11 annually prepare and submit to the Secretary a report

12 containing—

13 (1) the information received by the State from

14 local reports submitted under section 217; and

15 (2) information on the costs of the programs to

16 the State and level of funding provided by the State

17 for such programs.

18 Subtitle B—Local Activities

19 SEC. 211. LOCAL GRANTS.

20 A State that receives an allotment under section 201

21 for a fiscal year shall use the funds made available

22 through the allotment to make grants to local areas, in

23 order to implement employment programs.
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1 SEC. 212. LOCAL PLANS.

2 (a) IN GENERAL.—For a local area to be eligible to

3 receive a grant under section 211 for an employment pro4 gram, the chief elected official of the local area shall sub5 mit an application to the State at such time, in such man6 ner, and containing such information as the State may

7 require.

8 (b) CONTENTS.—At a minimum, the application shall

9 include a local plan containing—

10 (1) information describing and justifying the lo11 cations at which, and the strategy by which, the

12 chief elected official will provide community employ13 ment positions in the area through the employment

14 program in the area, determined in accordance with

15 subsection (c);

16 (2) information describing the community em17 ployment projects to be carried out in the local area

18 through the employment program, the type of work

19 to be performed by participants in the projects, the

20 eligible employers that will carry out the projects,

21 and the compensation and benefits to be provided to

22 participants in the projects;

23 (3) information specifying the manner in which

24 the chief elected official will implement the employ25 ment program, including—
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1 (A) the manner in which the official will

2 link the employment provided through the pro3 gram with—

4 (i) activities that provide training and

5 skill development;

6 (ii) job readiness activities;

7 (iii) job placement assistance; and

8 (iv) support services;

9 for placement in public or private employment

10 that is not subsidized with funds made available

11 under this Act, especially employment in growth

12 occupations specified by the Secretary and in

13 occupations with wages above the rates speci14 fied in subclauses (I) and (II) of section

15 214(a)(1)(A)(ii);

16 (B) the manner in which the official will—

17 (i) ensure that the employment pro18 vided through the program will develop the

19 skills of and provide work experience to

20 participants in the program, including par21 ticipants who are ages 16 through 25, and

22 otherwise prepare the participants in the

23 program for placement in public or private

24 employment that is not subsidized with

25 funds made available under this Act, espe-
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1 cially employment in growth occupations

2 specified by the Secretary and in occupa3 tions with wages above the rates specified

4 in subclauses (I) and (II) of section

5 214(a)(1)(A)(ii); and

6 (ii) provide for the generation of par7 ticipant skill development plans, developed

8 by the employer of the participant and the

9 participant, setting forth goals and time

10 frames for the development of skills by

11 participants during the period of participa12 tion and after such period;

13 (C) the manner in which persons des14 ignated by the official will assess the job readi15 ness and skills of applicants for the projects;

16 (D) the manner in which the employment

17 provided through the program will increase the

18 number of positions available to low-skilled

19 workers, in a local area with a severe shortage

20 of such positions;

21 (E) the manner in which the official will

22 coordinate the employment program with other

23 Federal and State employment and training

24 programs, including programs funded through

25 welfare-to-work grants made under section
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1 403(a)(5) of the Social Security Act (42 U.S.C.

2 603(a)(5)), with programs providing child care

3 and transportation services, and with other so4 cial service programs; and

5 (F) the manner in which the official will

6 provide community employment through the

7 employment program;

8 (4) an assurance that the official will require

9 each employer who seeks to carry out an employ10 ment project to submit a job description to the offi11 cial for each position in the project, that includes a

12 description of—

13 (A) the tasks to be performed by partici14 pants in the position; and

15 (B) the training to be provided by the em16 ployer to participants in the position; and

17 (5) a certification that the official has developed

18 the local plan in a manner that will assure compli19 ance with the requirements of section 214.

20 (c) AREAS.—In determining the locations at which,

21 and the strategy by which, the official will provide employ22 ment positions in the area, the chief elected official shall

23 use the data described in section 202(c)(2) and shall con24 sider information supplied by public agencies and commu25 nity-based organizations in the local area.
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1 (d) DEVELOPMENT PROCESS.—

2 (1) IN GENERAL.—

3 (A) OPINIONS.—In developing the local

4 plan, the chief elected official shall, at a mini5 mum, solicit the opinions of organizations and

6 partnerships in the local area that are respon7 sible for planning, setting policy for, and ad8 ministering employment and training programs

9 described in section 202(d)(1)(A) in the local

10 area.

11 (B) DEVELOPMENT.—To the extent pos12 sible, the chief elected official shall arrange for

13 the organizations and partnerships described in

14 subparagraph (A) to develop the local plan, in15 cluding carrying out the responsibilities of the

16 chief elected official under this section.

17 (2) SPECIFIC INVOLVEMENT.—At a minimum,

18 representatives of community-based organizations,

19 organizations serving victims of domestic violence,

20 labor organizations, private employers, organizations

21 described in section 202(d)(1)(B), and residents of

22 the local area shall assist in the development of the

23 plan, especially the selection of the employment

24 projects and employers described in subsection

25 (b)(2), the determination of the compensation and
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1 benefits described in subsection (b)(2), and the ef2 forts to make the certification described in sub3 section (b)(5). In addition, in any case in which a

4 labor organization represents a substantial number

5 of employees who are engaged in work or training,

6 in the local area, similar to the activities proposed

7 to be carried out under the local plan, the chief

8 elected official shall provide an opportunity for the

9 organization to submit comments with respect to the

10 local plan.

11 SEC. 213. IMPLEMENTATION ACTIVITIES.

12 (a) IN GENERAL.—A local area that receives a grant

13 under section 211 shall use the funds made available

14 through the grant to implement an employment program

15 that provides community employment with eligible employ16 ers to eligible individuals in accordance with this title.

17 (b) COMMUNITY EMPLOYMENT.—

18 (1) IN GENERAL.—Community employment

19 funded under this title in a community shall consist

20 of entry-level employment that the chief elected offi21 cial in the local area, after consultation with rep22 resentatives of organizations in the local area, deter23 mines to meet the skills and needs of eligible individ24 uals in the identified communities in the local area

25 and the needs of the local area for affordable hous-
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1 ing, human services, infrastructure, environmental

2 conservation or restoration, and small business de3 velopment. Such community employment may in4 clude employment related to provision of directory

5 assistance services, recreational equipment design

6 and construction, removal of lead paint or asbestos,

7 renovation of schools and community centers, provi8 sion of after-school and summer recreational pro9 grams, provision of child care and home health care

10 services, provision of elder care, provision of teacher

11 aide services, construction and renovation of afford12 able housing, and community crime prevention.

13 (2) TRAINING AND EDUCATION PROGRAMS AND

14 JOB SEARCH ACTIVITIES.—Community employment

15 funded under this title may, at the election of the

16 chief local official, include participation in training

17 and education programs (such as functional context

18 education programs, vocational training programs,

19 and secondary or postsecondary education programs)

20 for not more than 10 hours per week per partici21 pant. Community employment funded under this

22 title shall include participation in structured job

23 search activities in accordance with such standards

24 as the chief elected official shall specify. Participants

25 shall be paid for participation in the training and
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1 education programs and job search activities in ac2 cordance with section 214.

3 (3) REQUIREMENTS AND RESTRICTIONS.—The

4 community employment will be provided in accord5 ance with the requirements and restrictions specified

6 in section 214 and 215.

7 (4) LENGTH OF EMPLOYMENT.—

8 (A) IN GENERAL.—Except as provided in

9 subparagraph (B), an employer shall provide

10 employment to a participant in an employment

11 program for not more than a 12-month period.

12 (B) ADDITIONAL TERM.—A chief elected

13 official for a local area involved in an employ14 ment program carried out under this title may

15 submit a request to the Secretary for a waiver

16 of the limit specified in subparagraph (A), on

17 behalf of the employers involved in the program

18 in the local area. The official shall specify, in

19 the request, the criteria the employers will use

20 to determine whether to provide employment to

21 a participant for more than 12 months and

22 shall provide a justification for the waiver based

23 on information collected by the official from the

24 employers. The Secretary may waive the limit

25 for not more than an additional 12-month pe-
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1 riod, and for not more than 20 percent of the

2 participants in the program.

3 (c) ELIGIBLE EMPLOYERS.—To be eligible to be an

4 employer in an employment program, an entity shall be

5 an agency of a unit of general local government, a non6 profit private organization, or another private organiza7 tion.

8 (d) ELIGIBLE INDIVIDUALS.—

9 (1) MINIMUM ELIGIBILITY REQUIREMENTS.—

10 To be eligible to be selected to be a participant in

11 the employment program, an individual shall be a

12 person who—

13 (A) has been unemployed for a period of

14 not less than 15 weeks or is receiving assistance

15 under a State program funded under part A of

16 title IV of the Social Security Act (42 U.S.C.

17 601 et seq.);

18 (B) is an individual who received an in19 come, or is a member of a family that received

20 a total family income that, in relation to family

21 size, does not exceed the poverty line;

22 (C) resides in an identified community;

23 (D) has engaged in structured job search

24 activities for not less than 4 weeks; and
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1 (E) meets such skill requirements for the

2 position involved as the chief elected official in

3 the local area shall prescribe.

4 (2) PRIORITIES.—In determining which of the

5 eligible individuals described in paragraph (1) shall

6 be selected to participate in an employment pro7 gram, the chief elected official shall give priority to

8 veterans.

9 (3) CONTINUED ELIGIBILITY.—To remain eligi10 ble to participate in the employment program, a par11 ticipant shall participate in structured job search ac12 tivities in accordance with such standards as the

13 chief elected official shall specify.

14 (e) NONDUPLICATION.—

15 (1) IN GENERAL.—Assistance provided under

16 this title shall be used only for an employment pro17 gram that is in addition to activities otherwise avail18 able in the local area of such program.

19 (2) PRIVATE ENTITY.—Assistance made avail20 able under this title shall not be provided to a pri21 vate entity to conduct activities that are the same as

22 or substantially equivalent to activities provided by

23 a State or local government agency that serves the

24 area that such entity resides in, unless the require25 ments of section 214(b) are met.
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1 SEC. 214. REQUIREMENTS AND RESTRICTIONS.

2 (a) BENEFITS.—

3 (1) WAGES.—

4 (A) IN GENERAL.—

5 (i) RATE OF COMPENSATION.—Indi6 viduals participating in community employ7 ment in a program carried out under this

8 title shall be compensated at the same

9 rates as similarly situated employees, as

10 determined by the Secretary, and in ac11 cordance with applicable law.

12 (ii) MINIMUM RATE.—The rate of

13 compensation provided by an employer for

14 an individual under clause (i) shall not be

15 less than the highest of—

16 (I) the rate specified in section

17 6(a)(1) of the Fair Labor Standards

18 Act of 1938 (29 U.S.C. 206(a)(1));

19 (II) the rate specified in applica20 ble State or local minimum wage law;

21 (III) the prevailing rate of pay

22 for individuals employed in similar oc23 cupations, as determined by the Sec24 retary, by the same employer; and

25 (IV) an hourly rate, calculated as

26 the rate that would enable a partici-
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1 pant to earn 100 percent of the pov2 erty line for a family of 3 if the par3 ticipant were to perform 40 hours per

4 week of work in the program, for a

5 full year.

6 (B) CONSTRUCTION.—The reference in

7 subparagraph (A)(ii)(I) to section 6(a)(1) of the

8 Fair Labor Standards Act of 1938—

9 (i) shall be deemed to be a reference

10 to section 6(c) of that Act (29 U.S.C.

11 206(c)) for individuals in the Common12 wealth of Puerto Rico;

13 (ii) shall be deemed to be a reference

14 to section 6(a)(3) (29 U.S.C. 206(a)(3)) of

15 that Act for individuals in American

16 Samoa (for purposes of subtitle C, if sub17 paragraph (A) applies under that subtitle);

18 and

19 (iii) shall not be applicable for individ20 uals in other territorial jurisdictions in

21 which section 6 of the Fair Labor Stand22 ards Act of 1938 (29 U.S.C. 206) does not

23 apply (for purposes of subtitle C, if sub24 paragraph (A) applies under that subtitle).

25 (2) BENEFITS.—
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1 (A) HEALTH INSURANCE.—

2 (i) IN GENERAL.—A State involved in

3 an employment program carried out under

4 this title shall ensure the provision of a

5 basic health care policy for each partici6 pant who is employed through the pro7 gram, if the participant is not otherwise

8 covered by a health care policy. The State

9 may retain funds from a grant to a local

10 area under section 211 to ensure the provi11 sion of such policies for such participants

12 in an employment program in the local

13 area. The Secretary shall establish mini14 mum standards that all plans shall meet in

15 order to qualify for payment under this

16 title, any circumstances in which an alter17 native health care policy may be sub18 stituted for the basic health care policy,

19 and mechanisms to prohibit a participant

20 from dropping existing coverage (in exist21 ence on the date the participant first ap22 plies for the program).

23 (ii) OPTION.—A State involved in an

24 employment program carried out under

25 this title may elect to provide from its own
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•S 2215 IS

1 funds a health care policy for participants

2 that does not meet all of the standards es3 tablished by the Secretary if the fair mar4 ket value of such policy is equal to or

5 greater than the fair market value of a

6 plan that meets the minimum standards

7 established by the Secretary, and is con8 sistent with other applicable laws.

9 (B) COVERAGE OF CERTAIN EMPLOYMENT10 RELATED TAXES.—To the extent an employer

11 involved in an employment program carried out

12 under this title is subject to the taxes imposed

13 on an employer under sections 3111 and 3301

14 of the Internal Revenue Code of 1986, and

15 taxes imposed on an employer under a work16 men’s compensation act, for a participant, the

17 assistance provided to an employer for the par18 ticipant under the program shall include an

19 amount equal to the amount of such taxes. For

20 purposes of section 3309(b)(5) of the Internal

21 Revenue Code of 1986, employment programs

22 carried out under this title shall not be consid23 ered to be programs described in such section,

24 and participants in employment programs car-
29

•S 2215 IS

1 ried out under this title shall not be considered

2 to be individuals described in such section.

3 (C) NO CONTRIBUTIONS TO RETIREMENT

4 SYSTEMS OR PLANS.—None of the funds made

5 available under this title may be used by an em6 ployer to make a contribution on behalf of any

7 participant to a private retirement system or

8 plan.

9 (3) TREATMENT OF ALLOWANCES, EARNINGS,

10 AND PAYMENTS TO PARTICIPANTS.—

11 (A) IN GENERAL.—Notwithstanding any

12 provision of the Internal Revenue Code of 1986,

13 for purposes of such Code, including section 32

14 (relating to earned income credits) and subtitle

15 C (relating to employment taxes), allowances,

16 earnings, and payments to individuals partici17 pating in programs carried out under this title

18 shall be includable in the gross income of indi19 viduals as wages.

20 (B) TREATMENT FOR EMPLOYMENT AND

21 TRAINING PROGRAMS.—Such allowances, earn22 ings, and payments shall not be considered to

23 be income for the purposes of determining eligi24 bility for, and the amount of assistance fur25 nished under, the Job Training Partnership Act
30

•S 2215 IS

1 (29 U.S.C. 1501 et seq.) or successor legisla2 tion.

3 (4) DENIAL OF DEDUCTIONS AND CREDITS TO

4 EMPLOYERS.—For purposes of the Internal Revenue

5 Code of 1986, no deduction or credit under such

6 Code shall be allowed with respect to trade or busi7 ness expenses paid from or reimbursed by funds pro8 vided under this title.

9 (b) LABOR STANDARDS.—

10 (1) DISPLACEMENT.—

11 (A) PROHIBITION.—A participant in a pro12 gram authorized under this title (referred to in

13 this subsection as a ‘‘specified activity’’) shall

14 not displace (including a partial displacement,

15 such as a reduction in the hours of nonovertime

16 work, wages, or employment benefits) any em17 ployed employee.

18 (B) PROHIBITION ON IMPAIRMENT OF

19 CONTRACTS.—A specified activity shall not im20 pair an existing contract for services or collec21 tive bargaining agreement, and no such activity

22 that would be inconsistent with the terms of a

23 collective bargaining agreement shall be under24 taken without the written concurrence of the

25 labor organization and employer concerned.
31

•S 2215 IS

1 (2) OTHER PROHIBITIONS.—

2 (A) IN GENERAL.—A participant in a spec3 ified activity shall not be employed in a job—

4 (i) when any other individual is on

5 layoff from the same or any substantially

6 equivalent job with the participating em7 ployer;

8 (ii) when the employer has terminated

9 the employment of any regular employee or

10 otherwise reduced the workforce of the em11 ployer with the effect of filling the vacancy

12 so created with the participant;

13 (iii) when any other individual is on

14 leave from, has recall rights pursuant to a

15 collective bargaining agreement or applica16 ble personnel procedures to, or is subject

17 to a reduction in force relating to, the

18 same or any substantially equivalent job,

19 with the participating employer;

20 (iv) when any other employee is on

21 strike or is being locked out with respect

22 to the same or any substantially equivalent

23 job with the participating employer;

24 (v) that is created in a promotional

25 line that will infringe in any way on the
32

•S 2215 IS

1 promotional opportunities of employed in2 dividuals; or

3 (vi) if the job position is vacant and

4 was previously held by an employee whose

5 wages and benefits were not subsidized

6 under this Act.

7 (B) CONCURRENCE.—Before an employer

8 employs a participant described in subpara9 graph (A) in a job that is the same or substan10 tially equivalent to a job held by other employ11 ees of the employer, the employer shall obtain

12 the written concurrence of the local labor orga13 nization, if any, representing the employees.

14 (3) HEALTH AND SAFETY.—Health and safety

15 standards established under Federal and State law,

16 including the Occupational Safety and Health Act of

17 1970 (29 U.S.C. 651 et seq.), otherwise applicable

18 to working conditions of employees shall be equally

19 applicable to working conditions of participants en20 gaged in specified activities. With respect to any

21 participant who is engaged in activities that are not

22 covered by health and safety standards under the

23 Occupational Safety and Health Act of 1970, the

24 Secretary shall prescribe, by regulation, such stand25 ards as may be necessary to protect the health and
33

•S 2215 IS

1 safety of such participant. To the extent that a

2 State workers’ compensation law applies, workers’

3 compensation shall be provided to participants on

4 the same basis as the compensation is provided to

5 other individuals in the State in similar employment.

6 To the extent that such law is not applicable, each

7 employer receiving funds under this title shall secure

8 insurance coverage for injuries suffered by such par9 ticipants as a result of the participation, in accord10 ance with regulations prescribed by the Secretary.

11 (4) EMPLOYMENT CONDITIONS.—Individuals

12 participating in programs carried out under this

13 title, shall be provided equipment, supplies, family

14 and medical leave, work space, and other working

15 conditions at the same level and to the same extent

16 as other trainees or employees working a similar

17 length of time and doing the same type of work.

18 (5) OTHER LABOR PROTECTIONS.—Standards

19 established under the Fair Labor Standards Act of

20 1938 (29 U.S.C. 201 et seq.), the National Labor

21 Relations Act (29 U.S.C. 151 et seq.), the Act of

22 March 3, 1931 (commonly known as the ‘‘Davis23 Bacon Act’’) (46 Stat. 1494; chap. 411; 40 U.S.C.

24 276a et seq.), the Service Contract Act of 1965 (41

25 U.S.C. 351 et seq.), and State labor and employ-
34

•S 2215 IS

1 ment laws (as defined by the appropriate State

2 agency), otherwise applicable to working conditions

3 of employees shall be equally applicable to working

4 conditions of participants engaged in specified activi5 ties. Participants in employment programs carried

6 out under this title shall be considered to be employ7 ees, and the employers of the participant shall be

8 considered to be employers, for purposes of the Fair

9 Labor Standards Act of 1938 (29 U.S.C. 201 et

10 seq.).

11 (6) HEARINGS AND OPPORTUNITY TO SUBMIT

12 COMMENTS.—Interested members of the public shall

13 be provided an opportunity for a public hearing on

14 a State plan submitted under section 202, and an

15 opportunity to submit comments to the State with

16 respect to programs described in the State plan and

17 proposed to be funded under this title. The opportu18 nities for a public hearing and for the submission of

19 comments shall be provided in accordance with such

20 procedures as the Secretary shall specify.

21 (c) GRIEVANCE PROCEDURE.—

22 (1) IN GENERAL.—An employer receiving as23 sistance under this title shall establish and maintain

24 a procedure for the filing and adjudication of griev25 ances or complaints alleging violations of the re-
35

•S 2215 IS

1 quirements of this title (except as otherwise provided

2 in section 215) from participants, labor organiza3 tions, and other interested parties. The procedures

4 shall provide that a hearing on such a grievance or

5 complaint shall be conducted not later than 30 days

6 after the date of the filing of the grievance or com7 plaint and that a decision shall be made concerning

8 the grievance or complaint not later 60 days after

9 the date of filing. Except for complaints alleging

10 fraud or criminal activity, no grievance or complaint

11 may be filed under this paragraph later than 1 year

12 after the date of the alleged violation.

13 (2) INVESTIGATION.—

14 (A) IN GENERAL.—The Secretary shall in15 vestigate an allegation of a violation described

16 in paragraph (1) if—

17 (i) a decision relating to such violation

18 has not been reached within 60 days after

19 the date of the filing of the grievance or

20 complaint and either party appeals the de21 cision to the Secretary; or

22 (ii) a decision relating to such viola23 tion has been reached within 60 days after

24 the date of the filing and the party to
36

•S 2215 IS

1 which such decision is adverse appeals the

2 decision to the Secretary.

3 (B) ADDITIONAL REQUIREMENT.—The

4 Secretary shall make a final determination re5 lating to an appeal made under subparagraph

6 (A) no later than 120 days after the date of

7 such appeal.

8 (C) SECRETARIAL AUTHORITY.—The Sec9 retary may also investigate a violation described

10 in paragraph (1) in accordance with section

11 231.

12 (3) REMEDIES.—Remedies that may be im13 posed under this subsection for a violation of any re14 quirement of this title (except as otherwise provided

15 in section 215) shall be limited—

16 (A) to suspension or termination of pay17 ments under this title to a person that has vio18 lated any such requirement of this title;

19 (B) to prohibition of placement of a partic20 ipant with an employer that has violated any

21 such requirement of this title;

22 (C) where applicable, to reinstatement of

23 an employee, payment of lost wages and bene24 fits, and reestablishment of other relevant
37

•S 2215 IS

1 terms, conditions, and privileges of employment;

2 and

3 (D) where appropriate, to other equitable

4 relief.

5 (4) CONSTRUCTION.—Nothing in paragraph (3)

6 shall be construed to prohibit a grievant or com7 plainant from pursuing a remedy authorized under

8 another Federal, State, or local law for a violation

9 of this title.

10 (d) RELOCATION.—

11 (1) PROHIBITION ON USE OF FUNDS TO EN12 COURAGE OR INDUCE RELOCATION.—No funds pro13 vided under this title shall be used, or proposed for

14 use, to encourage or induce the relocation of a busi15 ness or part of a business if such relocation would

16 result in a loss of employment for any employee of

17 such business at the original location and such origi18 nal location is within the United States.

19 (2) PROHIBITION ON USE OF FUNDS FOR CUS20 TOMIZED OR SKILL TRAINING AND RELATED ACTIVI21 TIES AFTER RELOCATION.—No funds provided

22 under this title shall be used for customized or skill

23 training, on-the-job training, or company-specific as24 sessments of job applicants or employees for any

25 business or part of a business that has relocated,
38

•S 2215 IS

1 until the date that is 120 days after the date on

2 which such business commences operations at the

3 new location, if the relocation of such business or

4 part of a business results in a loss of employment

5 for any employee of such business at the original lo6 cation and such original location is within the

7 United States.

8 (3) REPAYMENT.—If the Secretary determines

9 that a violation of paragraph (1) or (2) has oc10 curred, the Secretary shall require the State that

11 has violated such paragraph to repay to the United

12 States an amount equal to the amount expended in

13 violation of such paragraph.

14 (e) LIMITATION ON USE OF FUNDS.—No funds pro15 vided under this title shall be used for activities for—

16 (1) the capitalization of businesses (except as

17 provided in section 501) investment in contract bid18 ding resource centers, or similar activities;

19 (2) any partisan political activities associated

20 with a political party or association, or the campaign

21 of any candidate for public or party office;

22 (3) foreign travel; or

23 (4) the promotion or deterrence of union orga24 nizing.
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•S 2215 IS

1 (f) TREATMENT OF PARTICIPATION.—Notwithstand2 ing any other provision of law, no individual may be re3 quired to participate in an employment program carried

4 out under this title as a condition of receiving any benefit

5 under any Federal or State law.

6 (g) NOTIFICATION AND PROVISION OF INFORMATION

7 ON WORKER RIGHTS.—Each employer carrying out an

8 employment project under this title shall provide to par9 ticipants in the project notification regarding, and infor10 mation on, worker rights, including rights under this sec11 tion and section 215, and any eligibility for earned income

12 tax credits under the Internal Revenue Code of 1986 or

13 applicable State law.

14 SEC. 215. NONDISCRIMINATION.

15 (a) PROHIBITED DISCRIMINATION.—

16 (1) PROHIBITION ON DISCRIMINATION IN FED17 ERAL PROGRAMS AND ACTIVITIES.—For the purpose

18 of applying the prohibitions against discrimination

19 on the basis of age under the Age Discrimination

20 Act of 1975 (42 U.S.C. 6101 et seq.), on the basis

21 of disability under section 504 of the Rehabilitation

22 Act of 1973 (29 U.S.C. 794), on the basis of sex

23 under title IX of the Education Amendments of

24 1972 (20 U.S.C. 1681 et seq.), or on the basis of

25 race, color, or national origin under title VI of the
40

•S 2215 IS

1 Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.),

2 programs funded in whole or in part under this title

3 shall be considered to be programs and activities re4 ceiving Federal financial assistance, and education

5 programs and activities receiving Federal financial

6 assistance. For the purpose of applying the provi7 sions of title II of the Americans with Disabilities

8 Act of 1990 (42 U.S.C. 12131 et seq.) programs

9 funded, in whole or in part, under this title shall

10 be considered to be the services, programs, or activi11 ties of a public entity, and each recipient or provider

12 of Federal financial assistance involved in the pro13 grams shall be considered to be a public entity.

14 (2) PROHIBITION OF DISCRIMINATION REGARD15 ING PARTICIPATION, BENEFITS, AND EMPLOY16 MENT.—No individual shall be excluded from par17 ticipation in, denied the benefits of, subjected to dis18 crimination under, or denied employment in the ad19 ministration of or in connection with, any program

20 funded in whole or in part under this title because

21 of race, color, religion, sex, national origin, age, dis22 ability, or political affiliation or belief.

23 (3) PROHIBITION ON ASSISTANCE FOR FACILI24 TIES FOR SECTARIAN INSTRUCTION OR RELIGIOUS

25 WORSHIP.—Participants shall not be employed under
41

•S 2215 IS

1 this title to carry out the construction, operation, or

2 maintenance of any part of any facility that is used

3 or to be used for sectarian instruction or as a place

4 for religious worship.

5 (4) PROHIBITION ON DISCRIMINATION ON BASIS

6 OF PARTICIPANT STATUS.—No person may discrimi7 nate against an individual who is a participant in a

8 program or activity that receives funds under this

9 title, with respect to the terms and conditions affect10 ing, or rights provided to, the individual, solely be11 cause of the status of the individual as a participant,

12 in carrying out any endeavor that involves—

13 (A) participants in programs that receive

14 funding under this title; and

15 (B) persons who receive no assistance

16 under this title.

17 (5) PROHIBITION ON DISCRIMINATION AGAINST

18 CERTAIN NONCITIZENS.—Participation in programs

19 receiving funds under this title shall be available to

20 citizens and nationals of the United States, lawfully

21 admitted permanent resident aliens, refugees,

22 asylees, and parolees, other aliens lawfully present in

23 the United States, and other individuals authorized

24 by the Attorney General to work in the United

25 States.
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•S 2215 IS

1 (b) ACTION OF SECRETARY.—Whenever the Sec2 retary finds (in response to a complaint filed with the Sec3 retary by a participant or on the initiative of the Sec4 retary) that a State or other recipient of funds under this

5 title has failed to comply with a provision of law referred

6 to in subsection (a)(1), or with paragraph (2), (3), (4),

7 or (5) of subsection (a), including an applicable regulation

8 prescribed to carry out such provision or paragraph, the

9 Secretary shall notify such State or recipient and shall re10 quest that the State or recipient comply. If within a rea11 sonable period of time, not to exceed 60 days, the State

12 or recipient fails or refuses to comply, the Secretary

13 may—

14 (1) refer the matter to the Attorney General

15 with a recommendation that an appropriate civil ac16 tion be instituted;

17 (2) exercise the powers and functions provided

18 to the head of a Federal department or agency

19 under the Age Discrimination Act of 1975, title V

20 of the Rehabilitation Act of 1973 (29 U.S.C. 791 et

21 seq.), title IX of the Education Amendments of

22 1972, or title VI of the Civil Rights Act of 1964, as

23 may be applicable; or

24 (3) take such other action as may be provided

25 by law.
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•S 2215 IS

1 (c) ACTION OF ATTORNEY GENERAL.—When a mat2 ter is referred to the Attorney General pursuant to sub3 section (b)(1), or whenever the Attorney General has rea4 son to believe that a State or other recipient of funds

5 under this title is engaged in a pattern or practice of dis6 crimination in violation of a provision of law referred to

7 in subsection (a)(1) or in violation of paragraph (2), (3),

8 (4), or (5) of subsection (a), the Attorney General may

9 bring a civil action in any appropriate district court of the

10 United States for such relief as may be appropriate, in11 cluding injunctive relief.

12 (d) PARTICIPANTS.—For purposes of this section,

13 participants in employment programs shall be considered

14 as the ultimate beneficiaries of an education program or

15 activity receiving Federal financial assistance.

16 SEC. 216. LOCAL ADMINISTRATION.

17 (a) IN GENERAL.—Except as provided in subsection

18 (b), the chief elected official shall carry out the adminis19 tration of the local plan.

20 (b) ORGANIZATIONS AND PARTNERSHIPS.—

21 (1) OPINIONS.—In carrying out the administra22 tion of the local plan, the official shall—

23 (A) at a minimum, solicit the opinions of

24 organizations and partnerships in the local area

25 that are responsible for planning, setting policy
44

•S 2215 IS

1 for, and administering employment and training

2 programs described in section 202(d)(1)(A) in

3 the local area; and

4 (B) to the extent possible, solicit the opin5 ions of organizations described in section

6 202(d)(1)(B).

7 (2) ADMINISTRATION.—To the extent possible,

8 the official shall arrange for the organizations and

9 partnerships described in subparagraphs (A) and

10 (B) of paragraph (1) to carry out the administration

11 of the local plan.

12 (3) COORDINATION.—The official shall ensure

13 the coordination of activities to be carried out under

14 the plan with the employment and training programs

15 carried out by the organizations and partnerships

16 described in paragraph (1)(A) and with other social

17 service programs.

18 (c) FISCAL AGENT.—The chief elected official shall

19 serve as the fiscal agent for the funds made available to

20 the local area under this title.

21 (d) ADMINISTRATIVE EXPENSES.—Not more than 15

22 percent of the funds made available to a local area through

23 a grant made under section 211 may be used for the ad24 ministration of the local plan.
45

•S 2215 IS

1 SEC. 217. LOCAL REPORTS.

2 Each chief elected official in a local area receiving

3 funds under this title to carry out an employment program

4 shall annually prepare and submit to the State a report

5 containing information on—

6 (1) the number of participants in the program;

7 (2) the number of positions created for the pro8 gram;

9 (3) the type of work performed by the partici10 pants;

11 (4) the number and type of employers carrying

12 out employment projects through the program;

13 (5) the wages and benefits provided to the par14 ticipants;

15 (6) the costs of the program to the local areas;

16 (7) the employment status (including placement

17 in public or private employment that is not sub18 sidized with funds made available under this Act)

19 and wages (during the year for which the report is

20 prepared) of former participants in the program, for

21 the 5 years after the participants end their partici22 pation in the program;

23 (8) the impact of the employment positions in

24 the employment projects on the identified commu25 nities in the local area; and
46

•S 2215 IS

1 (9) the extent to which, and the manner in

2 which, the official has ensured the coordination de3 scribed in section 216(b).

4 Subtitle C—Activities in Outlying

5 Areas

6 SEC. 221. GRANTS.

7 From the funds appropriated to carry out this title

8 for a fiscal year, the Secretary shall reserve not more than

1 9 ⁄4 of 1 percent to make grants to eligible outlying areas

10 in order to implement employment programs in the outly11 ing areas.

12 SEC. 222. APPLICATION.

13 To be eligible to receive a grant under section 221,

14 an outlying area shall submit an application to the Sec15 retary at such time, in such manner, and containing such

16 information and assurances as the Secretary may require.

17 SEC. 223. REGULATIONS.

18 The Secretary shall issue regulations specifying re19 quirements of this title that apply to outlying areas receiv20 ing funds under section 221.

21 Subtitle D—General Provisions

22 SEC. 231. MONITORING.

23 (a) IN GENERAL.—The Secretary is authorized to

24 monitor all recipients of financial assistance under this

25 title to determine whether the recipients are complying
47

•S 2215 IS

1 with the provisions of this title, including the regulations

2 issued under this title.

3 (b) INVESTIGATIONS.—The Secretary may inves4 tigate any matter the Secretary determines to be necessary

5 to determine the compliance of the recipients with this

6 title, including the regulations issued under this title. The

7 investigations authorized by this subsection may include

8 examining records (including making certified copies of

9 the records), questioning employees and participants, and

10 entering any premises or onto any site in which any part

11 of an employment program of such a recipient is con12 ducted or in which any of the records of the recipient are

13 kept.

14 (c) WITNESSES AND PRODUCTION.—For the purpose

15 of any investigation or hearing conducted under this title

16 by the Secretary, the provisions of section 9 of the Federal

17 Trade Commission Act (15 U.S.C. 49) (relating to the at18 tendance of witnesses and the production of documents)

19 apply to the Secretary, in the same manner and to the

20 same extent as the provisions apply to the Federal Trade

21 Commission.

22 SEC. 232. REPORT TO CONGRESS.

23 The Secretary shall prepare and submit to Congress

24 a report containing—
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•S 2215 IS

1 (1) the information received by the Secretary

2 from State reports submitted under section 204; and

3 (2) information on the costs of the programs to

4 the Federal Government and level of funding pro5 vided by the Federal Government for such programs.

6 SEC. 233. FEDERAL ADMINISTRATION.

7 From the amounts appropriated under section 234

8 for a fiscal year, the Secretary may reserve not more than

9 10 percent for the administration of this title.

10 SEC. 234. AUTHORIZATION OF APPROPRIATIONS.

11 There are authorized to be appropriated to carry out

12 this title, $2,300,000,000 for fiscal year 2000,

13 $6,800,000,000 for fiscal year 2001, and

14 $11,300,000,000 for fiscal year 2002.

15 TITLE III—FEDERAL GRANTS TO

16 LOCAL AREAS FOR IMPLE17 MENTATION OF EMPLOY18 MENT PROGRAMS

19 SEC. 301. GRANTS

20 (a) FUNDS.—If the funds allotted under section 201

21 to a State for a fiscal year are not distributed to the State

22 for such fiscal year, the Secretary—

23 (1) shall first use the funds for implementation

24 grants to local areas in the State in accordance with

25 this title; and
49

•S 2215 IS

1 (2) shall reallot any remaining funds to remain2 ing eligible States in accordance with section 201(d).

3 (b) GRANTS.—Using the funds described in sub4 section (a), the Secretary may provide implementation

5 grants, on a competitive basis, directly to local areas in

6 States described in subsection (c), in such amounts as the

7 Secretary may determine to be necessary, to implement

8 employment programs in the local areas. The Secretary

9 shall make the grants to pay for the program share of

10 the cost of the implementation.

11 (c) ELIGIBILITY.—To be eligible to receive a grant

12 under this section for a fiscal year, a local area shall be

13 located in a State for which the Secretary has not ap14 proved an application under section 202 for the fiscal year.

15 (d) PROGRAM SHARE.—

16 (1) IN GENERAL.—The program share of the

17 cost of implementing an employment program in a

local area is 66 2 18 ⁄3 percent.

19 (2) NON-PROGRAM SHARE.—The non-program

20 share of the cost may be provided in cash (including

21 funds made available from federally funded pro22 grams, other than programs carried out under this

23 Act, with a non-Federal share requirement, and in24 cluding funds from State, local, and private sources)
50

•S 2215 IS

1 or in kind, fairly evaluated, including plant, equip2 ment, or services.

3 SEC. 302. APPLICATIONS.

4 (a) IDENTIFICATION OF COMMUNITIES WITHIN

5 LOCAL AREAS.—To develop the applications under sub6 section (b) and enable the Secretary to make the selection

7 described in subsection (c), the chief elected officials of

8 the local areas in a State described in section 301(c) shall

9 compile and analyze data in accordance with the require10 ments applicable to Governors under section 202(c)(2).

11 (b) APPLICATION.—For a local area to be eligible to

12 receive a grant under this section, the chief local official

13 of the local area shall submit the application described in

14 section 212.

15 (c) SELECTION PRIORITY AND CONSIDERATION.—In

16 selecting local areas to receive grants under this section,

17 the Secretary shall give priority to local areas described

18 in section 202(c)(1)(A) and take into consideration the

19 need of the local areas for the employment to be provided

20 through the employment programs.

21 SEC. 303. ADMINISTRATION.

22 (a) IN GENERAL.—The chief elected officials of the

23 local areas shall implement the employment programs in

24 accordance with—
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•S 2215 IS

1 (1) the requirements applicable to local areas

2 and chief elected officials under subtitle B of title II,

3 including the requirements of section 216(b); and

4 (2) the provisions applicable to States and Gov5 ernors under sections 202(c)(2) and 214.

6 (b) REFERENCES.—For purposes of subsection (a),

7 references in the requirements described in subsection

8 (a)(1) (other than the provisions described in subsection

9 (a)(2)) to a State, Governor, or State entity shall be con10 sidered to be references to the Secretary.

11 (c) REGULATIONS.—The Secretary shall issue regula12 tions specifying the manner in which the requirements and

13 provisions described in subsection (a) shall apply to chief

14 elected officials under this title and the manner in which

15 the requirements of subtitle D of title II shall apply to

16 programs carried out under this title.

17 TITLE IV—GRANTS TO INDIAN

18 TRIBES AND NATIVE HAWAI19 IAN ORGANIZATIONS FOR EM20 PLOYMENT PROGRAMS

21 SEC. 401. GRANTS.

22 From the amounts appropriated under sections 104

23 and 234 for a fiscal year, the Secretary shall reserve not

24 more than 3 percent to make grants to Indian tribes and
52

•S 2215 IS

1 Native Hawaiian organizations for development and imple2 mentation, respectively, of employment programs.

3 SEC. 402. PLANS.

4 To be eligible to receive a grant under section 401,

5 an Indian tribe or Native Hawaiian organization shall sub6 mit a plan to the Secretary at such time, in such manner,

7 and containing such information, as the Secretary may re8 quire.

9 SEC. 403. REGULATIONS.

10 The Secretary shall issue regulations specifying re11 quirements of title II that apply to Indian tribes and Na12 tive Hawaiian organizations receiving grants under section

13 401. Such requirements shall not include a non-program

14 share requirement.

15 TITLE V—COMMUNITY DEVEL16 OPMENT VENTURE CAPITAL

17 SEC. 501. COMMUNITY DEVELOPMENT VENTURE CAPITAL

18 ACTIVITIES

19 (a) IN GENERAL.—The Administrator is authorized

20 to make grants to 1 or more intermediary organizations

21 to develop the capacity of community development venture

22 capital organizations.

23 (b) USE OF ASSISTANCE.—An intermediary organiza24 tion that receives a grant under subsection (a) may use

25 the funds made available through the grant to—
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•S 2215 IS

1 (1) provide training, education, support, peer

2 exchanges, and advice to enhance the technical and

3 administrative capacity of community development

4 venture capital organizations;

5 (2) provide capacity building grants, operating

6 support, and capital in the form of investments,

7 loans, or grants, to enable community development

8 venture capital organizations to provide financing

9 to—

10 (A) private businesses with enterprises

11 benefiting low-income communities, as defined

12 by the Administrator; or

13 (B) entities carrying out community devel14 opment projects benefiting the communities;

15 (3) invest, in partnership with community de16 velopment venture capital organizations, in such en17 terprises or projects; and

18 (4) such other activities as may be determined

19 to be appropriate by the organization in consultation

20 with the Administrator.

21 (c) ALLOCATION OF ASSISTANCE.—The Adminis22 trator shall ensure that not less than 25 percent of the

23 funds made available under this section are made available

24 to support activities described in subsection (b)(3).
54

•S 2215 IS

1 (d) MATCHING REQUIREMENT.—No intermediary or2 ganization shall receive a grant under this section unless

3 that organization agrees that, with respect to the costs

4 to be incurred by the organization in carrying out the ac5 tivities for which the grant was awarded, the organization

6 will make available (directly or through donations from

7 public or private entities) non-Federal contributions in an

8 amount equal to not less than $1 for every $1 of Federal

9 funds provided under the grant. The non-Federal con10 tributions may be in cash or in kind, fairly evaluated, in11 cluding plant, equipment, or services.

12 (e) REQUIREMENTS.—The Administrator may issue

13 such requirements as may be necessary to carry out this

14 section. The requirements shall take effect on issuance.

15 (f) AUTHORIZATION OF APPROPRIATIONS.—There

16 are authorized to be appropriated to carry out this section

17 $20,000,000 for fiscal years 1999 through 2002.

18 (g) DEFINITIONS.—

19 (1) ADMINISTRATOR.—The term ‘‘Adminis20 trator’’ means the Administrator of the Small Busi21 ness Administration.

22 (2) COMMUNITY DEVELOPMENT VENTURE CAP23 ITAL ORGANIZATION.—The term ‘‘community devel24 opment venture capital organization’’ means—
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1 (A) a private nonprofit organization that

2 has a primary mission of promoting community

3 development in low-income communities, as de4 fined by the Administrator, through investment

5 in private business enterprises or community

6 development projects; and

7 (B) administers or is in the process of es8 tablishing a community development venture

9 capital fund for the purpose of making equity

10 investments in private business enterprises or

11 community development projects in such com12 munities.

13 (3) INTERMEDIARY ORGANIZATION.—The term

14 ‘‘intermediary organization’’ means a private, non15 profit entity that provides technical assistance or fi16 nancial assistance to community development ven17 ture capital organizations, including organizations in

18 the process of establishing community development

19 venture capital funds.

20 TITLE VI—REVENUE

21 PROVISIONS

22 SEC. 601. DENIAL OF DEDUCTION FOR PAYMENTS OF EX23 CESSIVE COMPENSATION.

24 (a) IN GENERAL.—Section 162 of the Internal Reve25 nue Code of 1986 (relating to deduction for trade or busi-
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1 ness expenses) is amended by inserting after subsection

2 (h) the following new subsection:

3 ‘‘(i) EXCESSIVE COMPENSATION.—

4 ‘‘(1) IN GENERAL.—No deduction shall be al5 lowed under this chapter for any excessive com6 pensation with respect to any full-time employee.

7 ‘‘(2) EXCESSIVE COMPENSATION.—For pur8 poses of this subsection, the term ‘excessive com9 pensation’ means, with respect to any employee, the

10 amount by which—

11 ‘‘(A) the compensation for services per12 formed by such employee during the taxable

13 year, exceeds

14 ‘‘(B) an amount equal to 25 times the low15 est compensation for services performed by any

16 other full-time employee during such taxable

17 year.

18 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For

19 purposes of this subsection—

20 ‘‘(A) COMPENSATION.—

21 ‘‘(i) IN GENERAL.—The term ‘com22 pensation’ means salary, wages, and bo23 nuses.

24 ‘‘(ii) PART-YEAR EMPLOYEES.—In the

25 case of any part-year employee, the com-
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1 pensation of the employee shall be com2 puted on an annualized basis.

3 ‘‘(B) EMPLOYER.—All persons treated as a

4 single employer under subsection (a) or (b) of

5 section 52 or subsection (m) or (o) of section

6 414 shall be treated as 1 employer.’’

7 (b) EFFECTIVE DATE.—The amendment made by

8 this section shall apply to taxable years beginning after

9 the date of the enactment of this Act.

10 SEC. 602. REPEAL OF DEFERRAL FOR INCOME OF CON11 TROLLED FOREIGN CORPORATIONS.

12 (a) GENERAL RULE.—Section 952 of the Internal

13 Revenue Code of 1986 is amended to read as follows:

14 ‘‘SEC. 952. SUBPART F INCOME.

15 ‘‘(a) GENERAL RULE.—For purposes of this subpart,

16 the term ‘subpart F income’ means the earnings and prof17 its of the controlled foreign corporation for the taxable

18 year computed with the following adjustments:

19 ‘‘(1) There shall be excluded the amount of the

20 earnings and profits which are attributable to in21 come from sources within the United States which

22 is effectively connected with the conduct by the con23 trolled foreign corporation of a trade or business

24 within the United States, except to the extent such

25 income is exempt from taxation (or subject to a re-
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1 duced rate of tax) pursuant to a treaty obligation of

2 the United States. For purposes of the preceding

3 sentence, income described in paragraph (2) or (3)

4 of section 921(d) shall be treated as derived from

5 sources within the United States.

6 ‘‘(2) In determining earnings and profits (or

7 the deficit in earnings and profits), the amount of

8 any illegal bribe, kickback, or other payment (within

9 the meaning of section 162(c)) shall not be taken

10 into account to decrease such earnings and profits or

11 to increase such deficit. The payments referred to in

12 the preceding sentence are payments which would be

13 unlawful under the Foreign Corrupt Practices Act of

14 1977 if the payor were a United States person.

15 ‘‘(3) Under regulations prescribed by the Sec16 retary, there shall be excluded the part of any earn17 ings and profits if it is established to the satisfaction

18 of the Secretary that such part could not have been

19 distributed by the controlled foreign corporation to

20 United States shareholders who own (within the

21 meaning of section 958(a)) stock of such controlled

22 foreign corporation because of currency or other re23 strictions or limitations imposed under the laws of

24 any foreign country.
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1 ‘‘(4) Earnings and profits shall be determined

2 without regard to paragraphs (4), (5), and (6) of

3 section 312(n). Under regulations, the preceding

4 sentence shall not apply to the extent it would in5 crease earnings and profits by an amount which was

6 previously distributed by the controlled foreign cor7 poration.

8 Except as provided in this subsection and section

9 312(k)(4), the earnings and profits of any foreign corpora10 tion, and any deficit in earnings and profits of any foreign

11 corporation, for any taxable year shall be determined ac12 cording to rules similar to those applicable to domestic

13 corporations, under regulations prescribed by the Sec14 retary.

15 ‘‘(b) CERTAIN DEFICITS MAY BE TAKEN INTO AC16 COUNT.—

17 ‘‘(1) TREATMENT OF CERTAIN PRIOR YEAR

18 DEFICITS.—

19 ‘‘(A) IN GENERAL.—The amount included

20 in the gross income of any United States share21 holder under section 951(a)(1)(A)(i) for any

22 taxable year with respect to any controlled for23 eign corporation shall be reduced by the amount

24 of such shareholder’s pro rata share of any
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1 qualified deficit of such controlled foreign cor2 poration.

3 ‘‘(B) QUALIFIED DEFICIT.—For purposes

4 of this paragraph—

5 ‘‘(i) IN GENERAL.—The term ‘quali6 fied deficit’ means any deficit in the earn7 ings and profits of the controlled foreign

8 corporation for any prior taxable year

9 which began after December 31, 1998, and

10 for which such corporation was a con11 trolled foreign corporation, but only to the

12 extent such deficit has not previously been

13 taken into account under this paragraph.

14 ‘‘(ii) SPECIAL RULE FOR DEFICITS

15 BEFORE 1999.—The term ‘qualified deficit’

16 includes any deficit in earnings and profits

17 for any taxable year beginning before Jan18 uary 1, 1999, to the extent that such defi19 cit qualified as a qualified deficit under

20 subsection (c)(1)(B) of this section (as in

21 effect on the day before the date of the en22 actment of the Strategic Transitional Em23 ployment Act); except that any such deficit

24 may be taken into account under this para25 graph only to offset amounts attributable
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1 to the same activity as the activity giving

2 rise to such deficit.

3 ‘‘(C) PRO RATA SHARE.—For purposes of

4 this paragraph, the shareholder’s pro rata share

5 of any deficit shall be determined under rules

6 similar to the rules of section 951(a)(2) for

7 whichever of the following yields the smallest

8 share:

9 ‘‘(i) the close of the taxable year, or

10 ‘‘(ii) the close of the taxable year in

11 which the deficit arose.

12 ‘‘(2) CERTAIN DEFICITS OF MEMBER OF THE

13 SAME CHAIN OF CORPORATIONS MAY BE TAKEN

14 INTO ACCOUNT.—

15 ‘‘(A) IN GENERAL.—A controlled foreign

16 corporation may elect to reduce the amount of

17 its subpart F income for any taxable year by

18 the amount of any deficit in earnings and prof19 its of a qualified chain member for a taxable

20 year ending with (or within) the taxable year of

21 such controlled foreign corporation. To the ex22 tent any deficit reduces subpart F income

23 under the preceding sentence, such deficit shall

24 not be taken into account under paragraph (1).
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1 ‘‘(B) QUALIFIED CHAIN MEMBER.—For

2 purposes of this paragraph, the term ‘qualified

3 chain member’ means, with respect to any con4 trolled foreign corporation, any other corpora5 tion which is created or organized under the

6 laws of the same foreign country as the con7 trolled foreign corporation but only if—

8 ‘‘(i) all the stock of such other cor9 poration (other than directors’ qualifying

10 shares) is owned at all times during the

11 taxable year in which the deficit arose (di12 rectly or through 1 or more corporations

13 other than the common parent) by such

14 controlled foreign corporation, or

15 ‘‘(ii) all the stock of such controlled

16 foreign corporation (other than directors’

17 qualifying shares) is owned at all times

18 during the taxable year in which the deficit

19 arose (directly or through 1 or more cor20 porations other than the common parent)

21 by such other corporation.

22 ‘‘(C) COORDINATION.—This paragraph

23 shall be applied after paragraph (1).

24 ‘‘(3) DETERMINATION OF DEFICIT.—In deter25 mining the amount of any deficit in earnings and
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1 profits, the adjustments set forth in subsection (a)

2 shall apply.’’

3 (b) SPECIAL RULES FOR INSURANCE COMPANIES.—

4 Section 953 of the Internal Revenue Code of 1986 is

5 amended by striking ‘‘section 952(a)(1)’’ in subsection (a)

6 and inserting ‘‘this section’’.

7 (c) REPEAL OF FOREIGN BASE COMPANY INCOME.—

8 Section 954 of the Internal Revenue Code of 1986 is here9 by repealed.

10 (d) REPEAL OF EXPORT TRADE CORPORATION PRO11 VISIONS.—Subpart G of part III of subchapter N of chap12 ter 1 of the Internal Revenue Code of 1986 (relating to

13 export trade corporations) is hereby repealed.

14 (e) CONFORMING AMENDMENTS TO SUBPART F.—

15 (1) Subparagraph (A) of section 955(a)(1) of

16 the Internal Revenue Code of 1986 is amended by

17 inserting ‘‘(as in effect for taxable years beginning

18 before 1999)’’ after ‘‘section 954(b)(2)’’.

19 (2) Subsection (b) of section 955 of such Code

20 is amended by striking ‘‘within the meaning of sec21 tion 954(d)(3)’’ and inserting ‘‘within the meaning

22 of section 964(a)’’.

23 (3) Paragraph (2) of section 956(c) of such

24 Code is amended by inserting ‘‘(as in effect on the

25 day before the date of the enactment of the Strate-
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1 gic Transitional Employment Program Act) or under

2 section 952(a)(1)’’ after ‘‘section 952(b)’’ in sub3 paragraph (H).

4 (4) Subsection (b) of section 958 of such Code

5 is amended—

6 (A) by striking ‘‘954(d)(3), 956(b)(2), and

7 957’’ and inserting ‘‘956(b)(2), 957, and

8 964(a)’’, and

9 (B) by striking ‘‘954(d)(3)’’ the second

10 place it appears and inserting ‘‘964(a)’’.

11 (5) Subsection (b) of section 959 of such Code

12 is amended by striking ‘‘be also included in the gross

13 income’’ and inserting ‘‘be also included in the sub14 part F income’’.

15 (6) Subsection (a) of section 964 of such Code

16 is amended to read as follows:

17 ‘‘(a) RELATED PERSON.—For purposes of this part,

18 a person is a related person with respect to a controlled

19 foreign corporation, if—

20 ‘‘(1) such person is an individual, corporation,

21 partnership, trust, or estate which controls, or is

22 controlled by, the controlled foreign corporation, or

23 ‘‘(2) such person is a corporation, partnership,

24 trust, or estate which is controlled by the same per-
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1 son or persons which control the controlled foreign

2 corporation.

3 For purposes of the preceding sentence, control means,

4 with respect to a corporation, the ownership, directly or

5 indirectly, of stock possessing more than 50 percent of the

6 total voting power of all classes of stock entitled to vote

7 or of the total value of stock of such corporation. In the

8 case of a partnership, trust, or estate, control means the

9 ownership, directly or indirectly, more than 50 percent (by

10 value) of the beneficial interests in such partnership, trust,

11 or estate. For purposes of this paragraph, rules similar

12 to the rules of section 958 shall apply.’’

13 (7) Section 964 of such Code is amended by

14 striking subsection (b).

15 (8) The table of sections for subpart F of part

16 III of subchapter N of chapter 1 of such Code is

17 amended by striking the item relating to section

18 954.

19 (f) OTHER CONFORMING AMENDMENTS.—

20 (1) Paragraph (2) of section 552(c) of the In21 ternal Revenue Code of 1986 is amended—

22 (A) by amending subparagraph (A) to read

23 as follows:

24 ‘‘(A) is received from a related person

25 which (i) is a corporation created or organized
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1 under the laws of the same foreign country

2 under the laws of which the foreign corporation

3 involved was created or organized, and (ii) has

4 a substantial part of its assets used in its trade

5 or business located in such same foreign coun6 try, and’’, and

7 (B) by striking ‘‘954(d)(3)’’ and inserting

8 ‘‘964(a)’’.

9 (2) Subparagraph (B) of section 861(c)(2) of

10 such Code is amended by striking ‘‘954(d)(3)’’ and

11 inserting ‘‘964(a)’’.

12 (3) Subparagraph (A) of section 864(d)(5) of

13 such Code is amended by striking clauses (ii), (iii),

14 and (iv).

15 (4) Subparagraph (A) of section 881(c)(4) of

16 such Code is hereby repealed.

17 (5) Clause (i) of section 904(d)(2)(A) is amend18 ed by inserting ‘‘, as in effect on the day before the

19 date of the enactment of the Strategic Transitional

20 Employment Act,’’ after ‘‘section 954(c)’’.

21 (6) Subparagraph (D) of section 904(d)(2) is

22 amended—

23 (A) by inserting ‘‘, as in effect on the day

24 before the date of the enactment of the Strate-
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1 gic Transitional Employment Act,’’ after

2 ‘‘954(f)’’, and

3 (B) by inserting ‘‘or passive income’’ be4 fore the period at the end thereof.

5 (7) Subparagraph (H) of section 904(d)(2) is

6 amended by striking ‘‘954(d)(3)’’ and inserting

7 ‘‘964(a)’’.

8 (8) Subparagraph (E) of section 904(d)(3) is

9 hereby repealed.

10 (9) Subparagraph (C) of section 988(a)(3) is

11 amended by striking ‘‘954(d)(3)’’ and inserting

12 ‘‘964(a)’’.

13 (10) Subsection (c) of section 999 is amend14 ed—

15 (A) by striking ‘‘, 952(a)(3),’’ in para16 graph (1), and

17 (B) by striking ‘‘, the addition to subpart

18 F income under section 952(a)(3),’’ in para19 graph (2).

20 (11) The table of subparts for part III of sub21 chapter M of chapter 1 is amended by striking the

22 item relating to subpart G.

23 (g) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to taxable years of controlled for25 eign corporations beginning after December 31, 1998, and
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1 to the taxable years of United States shareholders with

2 which (or in which) such taxable years of controlled for3 eign corporations end.

4 SEC. 603. DEDICATION OF CORPORATE TAX BENEFITS TO

5 STEP.

6 It is the sense of the Senate that any additional sums

7 necessary for the implementation of this Act not already

8 offset by the provisions of sections 601 and 602 should

9 be offset by reductions in the exclusion of income of For10 eign Sales Corporations under sections 921 through 927

11 and sections 991 through 997 of the Internal Revenue

12 Code of 1986.

Æ