(A) in paragraph (1), by striking ‘‘para-
graph (2)(A) or (3) of’’; 
(B) by amending paragraph (2) to read as 
follows: 
‘‘(2) AMOUNT.—The amount available for re-
allocation 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 pro-
gram 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 sub-
section, an eligible local area means a local area 
which does not have an amount available for realloca-
tion 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 partici-
pating in activities carried out under this chapter by 
a local area during any program year shall be indi-
viduals 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 at-
tending 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-in-
come individuals and one or more of the fol-
lowing: 
‘‘(I) Deficient in literacy skills. 
‘‘(II) Homeless, runaway, or fos-
ter children. 
‘‘(III) Pregnant or parents. 
‘‘(IV) Offenders.
‘‘(V) Individuals who require ad-
ditional assistance to complete an edu-
cational program, or to secure and 
hold employment. 
‘‘(2) PRIORITY FOR SCHOOL DROPOUTS.—A pri-
ority in the provision of services under this chapter 
shall be given to individuals who are school dropouts. 
‘‘(3) LIMITATIONS ON ACTIVITIES FOR IN-SCHOOL 
YOUTH.—
‘‘(A) PERCENTAGE
OF
FUNDS.—For any 
program year, not more than 30 percent of the 
funds available for statewide activities under 
subsection (b), and not more than 30 percent of 
funds available to local areas under subsection 
(c), may be used to provide activities for in-
school youth meeting the requirements of para-
graph (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 car-
ried out for in-school youth meeting the re-
quirements 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 Gov-
ernor for a State as described in sections 128(a) and 
133(a)(1) may be used for statewide activities includ-
ing—
‘‘(A) additional assistance to local areas 
that have high concentrations of eligible youth; 
‘‘(B) supporting the provision of core serv-
ices 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 ca-
pacity building to local areas, one-stop opera-
tors, 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 meas-
ures; 
‘‘(F) operating a fiscal and management 
accountability system under section 136(f); and 
‘‘(G) carrying out monitoring and oversight 
of activities under this chapter and chapter 5. 
‘‘(2) LIMITATION.—Not more than 5 percent of 
the funds allotted under section 127(b) shall be used 
by the State for administrative activities carried out 
under this subsection and section 133(a). 
‘‘(3) PROHIBITION.—No funds described in this 
subsection or in section 134(a) may be used to develop
or implement education curricula for school systems 
in the State.’’. 
(e) LOCAL ELEMENTS AND REQUIREMENTS.—
(1) PROGRAM
DESIGN.—Section 129(c)(1) (29 
U.S.C. 2854(c) (1)) is amended—
(A) in the matter preceding subparagraph 
(A), by striking ‘‘paragraph (2)(A) or (3), as ap-
propriate, 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 attain-
ment of a secondary school diploma, Gen-
eral 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 redesig-
nated by this subparagraph) to read as fol-
lows: 
‘‘(v) effective connections to employers 
in sectors of the local labor market experi-
encing high growth in employment opportu-
nities.’’. 
(2) PROGRAM ELEMENTS.—Section 129(c)(2) (29 
U.S.C. 2854(c)(2)) is amended—
(A) in subparagraph (A), by striking ‘‘sec-
ondary school, including dropout prevention 
strategies’’ and inserting ‘‘secondary school di-
ploma, General Educational Development cre-
dential (GED), or other State-recognized equiva-
lent (including recognized alternative standards 
for individuals with disabilities), including 
dropout prevention strategies’’;
(B) in subparagraph (I), by striking ‘‘and’’ 
at the end; 
(C) in subparagraph (J), by striking the pe-
riod at the end and inserting a semicolon; and 
(D) by adding at the end the following: 
‘‘(K) on-the-job training opportunities; and 
‘‘(L) financial literacy skills.’’. 
(3) 
ADDITIONAL
REQUIREMENTS.—Section 
129(c)(3)(A) (29 U.S.C. 2854(c)(3)(A)) is amended in 
the matter preceding clause (i) by striking ‘‘or appli-
cant 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 para-
graph (5) by striking ‘‘youth councils’’ and in-
serting ‘‘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 EMPLOY-
MENT AND TRAINING ACTIVITIES FOR 
ADULTS’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents 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 appro-
priated 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 sec-
tion 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 EM-
PLOYMENT 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 
1⁄4 of 1 percent to provide assistance to outlying 
areas to carry out employment and training ac-
tivities for adults and statewide workforce invest-
ment 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 assist-
ance under the Compact of Free Association (ap-
proved 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 deter-
mining the amount to be reserved under paragraph 
(1), the Secretary shall allot to the States for employ-
ment and training activities for adults and for state-
wide workforce investment activities—
‘‘(A) 26 percent in accordance with para-
graph (3); and 
‘‘(B) 74 percent in accordance with para-
graph (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