‘‘(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 calcula-
tion of the amounts under clause (i) for a 
subsequent fiscal year, including the cal-
culation of allocation percentages for a 
preceding fiscal year applicable to para-
graphs (3) and (4) and to the unconsoli-
dated formulas described in clause (ii).’’. 
(3) REALLOTMENT.—Section 132(c) (29 U.S.C. 
2862(c)) is amended— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) AMOUNT.—The amount available for real-
lotment 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 (includ-
ing amounts allotted to the State in all prior pro-
gram 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 allot-
ted 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’’; 
and 
(C) by amending paragraph (4) to read as 
follows: 
‘‘(4) ELIGIBILITY.—For purposes of this sub-
section, 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.’’; 
(D) in paragraph (5), by striking ‘‘obliga-
tion’’ 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 de-
scribed 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 ac-
cordance with paragraph (2); and 
‘‘(B) 15 percent of such amounts shall be 
allocated by the Governor to local areas in ac-
cordance with paragraph (3). 
‘‘(2) ESTABLISHED FORMULA.— 
‘‘(A) IN GENERAL.—Of the amounts de-
scribed in paragraph (1)(A), the Governor shall 
allocate— 
‘‘(i) 60 percent on the basis of the rel-
ative number of unemployed individuals in 
each local area, compared to the total