IIB 
108TH CONGRESS 
1ST SESSION H. R. 1261
IN THE SENATE OF THE UNITED STATES 
MAY 9, 2003
Received; read twice and referred to the Committee on Health, Education, 
Labor, and Pensions 
AN ACT 
To enhance the workforce investment system of the Nation 
by strengthening one-stop career centers, providing for 
more effective governance arrangements, promoting ac-
cess to a more comprehensive array of employment, 
training, and related services, establishing a targeted ap-
proach to serving youth, and improving performance ac-
countability, and for other purposes.
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Workforce Reinvest-
ment and Adult Education Act of 2003’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows:
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. References. 
TITLE I—AMENDMENTS TO TITLE I OF THE WORKFORCE 
INVESTMENT ACT OF 1998
Sec. 101. Definitions. 
Sec. 102. Purpose. 
Sec. 103. State workforce investment boards. 
Sec. 104. State plan. 
Sec. 105. Local workforce investment areas. 
Sec. 106. Local workforce investment boards. 
Sec. 107. Local plan. 
Sec. 108. Establishment of one-stop delivery systems. 
Sec. 109. Eligible providers of training services. 
Sec. 110. Eligible providers of youth activities. 
Sec. 111. Youth activities. 
Sec. 112. Comprehensive program for adults. 
Sec. 113. Performance accountability system. 
Sec. 114. Authorization of appropriations. 
Sec. 115. Job Corps. 
Sec. 116. Native American programs. 
Sec. 117. Youth challenge grants. 
Sec. 118. Technical assistance. 
Sec. 119. Demonstration, pilot, multiservice, research and multistate projects. 
Sec. 120. Evaluations. 
Sec. 121. Authorization of appropriations for national activities. 
Sec. 122. Requirements and restrictions. 
Sec. 123. Nondiscrimination. 
Sec. 124. Administrative provisions. 
Sec. 125. General program requirements. 
TITLE II—ADULT EDUCATION 
PART A—ADULT BASIC SKILLS AND FAMILY LITERACY EDUCATION 
Sec. 201. Table of contents. 
Sec. 202. Amendment. 
PART B—NATIONAL INSTITUTE FOR LITERACY
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Sec. 211. Short title; purpose. 
Sec. 212. Establishment. 
Sec. 213. Administration. 
Sec. 214. Duties. 
Sec. 215. Leadership in scientifically based reading instruction. 
Sec. 216. National Institute for Literacy Advisory Board. 
Sec. 217. Gifts, bequests, and devises. 
Sec. 218. Mails. 
Sec. 219. Applicability of certain civil service laws. 
Sec. 220. Experts and consultants. 
Sec. 221. Report. 
Sec. 222. Definitions. 
Sec. 223. Authorization of appropriations. 
Sec. 224. Reservation. 
Sec. 225. Authority to publish. 
PART C—GENERAL PROVISIONS 
Sec. 241. Transition. 
TITLE III—AMENDMENTS TO THE WAGNER-PEYSER ACT 
Sec. 301. Amendments to the Wagner-Peyser Act. 
TITLE IV—AMENDMENTS TO THE REHABILITATION ACT OF 1973
Sec. 401. Chairperson. 
Sec. 402. Rehabilitation Services Administration. 
Sec. 403. Director. 
Sec. 404. State goals. 
Sec. 405. Authorizations of appropriations. 
Sec. 406. Helen Keller National Center Act. 
TITLE V—TRANSITION AND EFFECTIVE DATE 
Sec. 501. Transition provisions. 
Sec. 502. Effective date.
SEC. 3. REFERENCES. 
Except as otherwise expressly provided, wherever in 
this Act an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the amendment or repeal shall be considered to be 
made to a section or other provision of the Workforce In-
vestment Act of 1998 (20 U.S.C. 9201 et seq.).
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TITLE 
I—AMENDMENTS 
TO 
TITLE I OF THE WORKFORCE 
INVESTMENT ACT OF 1998
SEC. 101. DEFINITIONS. 
Section 101 (29 U.S.C. 2801) is amended—
(1) in paragraph (8)(C), by striking ‘‘not less 
than 50 percent of the cost of the training’’ and in-
serting ‘‘a significant portion of the cost of training, 
as determined by the local board’’; 
(2) by striking paragraph (13) and redesig-
nating paragraphs (1) through (12) as paragraphs 
(2) through (13) respectively; 
(3) by inserting the following new paragraph 
after ‘‘In this title:’’: 
‘‘(1) ACCRUED EXPENDITURES.—The term ‘ac-
crued expenditures’ includes the sum of actual cash 
disbursements for direct charges for goods and serv-
ices, the net increase or decrease in the amounts 
owed by recipients, goods and other property re-
ceived for services performed by employees, contrac-
tors, subgrantees, or other payees, and other 
amounts becoming owned for which no current serv-
ice or performance is required.’’;
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(4) by striking paragraph (24) and redesig-
nating paragraphs (25) through (32) as paragraphs 
(24) through (31), respectively; 
(5) in paragraph (24) (as so redesignated)—
(A) in subparagraph (B), by striking 
‘‘higher of—’’ and all that follows through such 
subparagraph and inserting ‘‘poverty line for an 
equivalent period;’’; and 
(B) by redesignating subparagraphs (D) 
through (F) as subparagraph (E) through (G), 
respectively, and inserting after subparagraph 
(C) the following: 
‘‘(D) receives or is eligible to receive free 
or reduced price lunch;’’; and 
(6) by striking paragraph (33) and redesig-
nating paragraphs (34) through (53) as paragraphs 
(32) through (51), respectively. 
SEC. 102. PURPOSE. 
Section 106 (29 U.S.C. 2811) is amended by insert-
ing at the end the following: ‘‘It is also the purpose of 
this subtitle to provide workforce investment activities in 
a manner that promotes the informed choice of partici-
pants and actively involves participants in decisions affect-
ing their participation in such activities.’’.
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SEC. 103. STATE WORKFORCE INVESTMENT BOARDS. 
(a) MEMBERSHIP.—
(1) IN GENERAL.—Section 111(b) (29 U.S.C. 
2821(b)) is amended—
(A) by amending paragraph (1)(C) to read 
as follows: 
‘‘(C) representatives appointed by the Gov-
ernor, who are—
‘‘(i)(I) the lead State agency officials 
with responsibility for the programs and 
activities that are described in section 
121(b) and carried out by one-stop part-
ners; 
‘‘(II) in any case in which no lead 
State agency official has responsibility for 
such a program or activity, a representa-
tive in the State with expertise relating to 
such program or activity; and 
‘‘(III) if not included under subclause 
(I), the director of the State unit, defined 
in section 7(8)(B) of the Rehabilitation 
Act of 1973 (29 U.S.C. 705(8)(B)) except 
that in a State that has established 2 or 
more designated State units to administer 
the vocational rehabilitation program, the 
board representative shall be the director
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of the designated State unit that serves the 
most individuals with disabilities in the 
State; 
‘‘(ii) the State agency officials respon-
sible for economic development; 
‘‘(iii) representatives of business in 
the State who—
‘‘(I) are owners of businesses, 
chief executive or operating officers of 
businesses, and other business execu-
tives or employers with optimum pol-
icy making or hiring authority, includ-
ing members of local boards described 
in section 117(b)(2)(A)(i); 
‘‘(II) represent businesses with 
employment opportunities that reflect 
employment 
opportunities 
in 
the 
State; and 
‘‘(III) are appointed from among 
individuals nominated by State busi-
ness organizations and business trade 
associations; 
‘‘(iv) chief elected officials (rep-
resenting both cities and counties, where 
appropriate);
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‘‘(v) representatives of labor organiza-
tions, who have been nominated by State 
labor federations; and 
‘‘(vi) such other representatives and 
State agency officials as the Governor may 
designate.’’; and 
(B) in paragraph (3), by striking ‘‘para-
graph (1)(C)(i)’’ and inserting ‘‘paragraph 
(1)(C)(iii)’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
111(c) (29 U.S.C 2811(c)) is amended by striking 
‘‘subsection (b)(1)(C)(i)’’ and inserting ‘‘subsection 
(b)(1)(C)(iii)’’. 
(b) 
FUNCTIONS.—Section 
111(d) 
(29 
U.S.C. 
2811(d)) is amended— 
(1) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) development and review of statewide poli-
cies affecting the integrated provision of services 
through the one-stop delivery system described in 
section 121, including—
‘‘(A) the development of criteria for, and 
the issuance of, certifications of one-stop cen-
ters;
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‘‘(B) the criteria for the allocation of one-
stop center infrastructure funding under section 
121(h), and oversight of the use of such funds; 
‘‘(C) approaches to facilitating equitable 
and efficient cost allocation in one-stop delivery 
systems; and 
‘‘(D) such other matters that may promote 
statewide objectives for, and enhance the per-
formance of, one-stop delivery systems within 
the State;’’; 
(2) in paragraph (4), by inserting ‘‘and the de-
velopment of State criteria relating to the appoint-
ment and certification of local boards under section 
117’’ after ‘‘section 116’’; 
(3) in paragraph (5), by striking ‘‘sections 
128(b)(3)(B) and 133(b)(3)(B)’’ and inserting ‘‘sec-
tions 128(b)(3) and 133(b)(3)’’; and 
(4) in paragraph (9), by striking ‘‘section 503’’ 
and inserting ‘‘section 136(i)’’. 
(c) ELIMINATION
OF ALTERNATIVE ENTITY
AND 
PROVISION
OF AUTHORITY
TO HIRE STAFF.—Section 
111(e) (29 U.S.C. 2821(e)) is amended to read as follows: 
‘‘(e) AUTHORITY TO HIRE STAFF.—The State board 
may hire staff to assist in carrying out the functions de-
scribed in subsection (d).’’.
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SEC. 104. STATE PLAN. 
(a) PLANNING CYCLE.—Section 112(a) (29 U.S.C. 
2822(a)) is amended by striking ‘‘5-year strategy’’ and in-
serting ‘‘2-year strategy’’. 
(b) CONTENTS.—Section 112(b)(17)(A) (29 U.S.C. 
2822(b)(17)(A)) is amended— 
(1) in clause (iii) by striking ‘‘and’’; 
(2) by amending clause (iv) to read as follows: 
‘‘(iv) how the State will serve the em-
ployment and training needs of dislocated 
workers (including displaced homemakers 
and 
formerly 
self-employed 
and 
transitioning farmers, ranchers, and fisher-
man) low income individuals (including re-
cipients of public assistance), homeless in-
dividuals, ex-offenders, individuals training 
for nontraditional employment, and other 
individuals with multiple barriers to em-
ployment (including older individuals);’’; 
and 
(3) by adding the following new clause after 
clause (iv): 
‘‘(v) how the State will serve the em-
ployment and training needs of individuals 
with disabilities, consistent with section 
188 and Executive Order 13217 (relating
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‘‘(i) any unit of general local govern-
ment with a population of 500,000 or 
more; and 
‘‘(ii) an area served by a rural con-
centrated employment program grant re-
cipient that served as a service delivery 
area or substate area under the Job train-
ing Partnership Act (29 U.S.C. 1501 et 
seq.), 
for the 2-year period covered by a State plan 
under section 112 if such request is made not 
later than the date of the submission of the 
State plan. 
‘‘(B) CONTINUED DESIGNATION BASED ON 
PERFORMANCE.—The Governor may deny a re-
quest for designation submitted pursuant to 
subparagraph (A) if such unit of government 
was designated as a local area for the preceding 
2-year period covered by a State plan and the 
Governor determines that such local area did 
not perform successfully during such period.’’. 
(b) REGIONAL PLANNING.—Section 116(c)(1) (29 
U.S.C. 2831(c)(1)) is amended by adding at the end the 
following: ‘‘The State may require the local boards for the 
designated region to prepare a single regional plan that
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incorporates the elements of the local plan under section 
118 and that is submitted and approved in lieu of separate 
local plans under such section.’’. 
SEC. 106. LOCAL WORKFORCE INVESTMENT BOARDS. 
(a) COMPOSITION.—Section 117(b)(2)(A) (29 U.S.C. 
2832(b)(2)(A)) is amended— 
(1) in clause (i)(II), by inserting ‘‘, businesses 
that are in the leading industries in the local area, 
and large and small businesses in the local area’’ 
after ‘‘local area’’; 
(2) by amending clause (ii) to read as follows: 
‘‘(ii) superintendents of the local sec-
ondary school systems, administrators of 
entities providing adult education and lit-
eracy activities, and the presidents or chief 
executive officers of postsecondary edu-
cational institutions (including community 
colleges, where such entities exist);’’; 
(3) in clause (iv), by striking the semicolon and 
inserting ‘‘and faith-based organizations; and’’; and 
(4) by striking clause (vi). 
(b) AUTHORITY
OF
BOARD
MEMBERS.—Section 
117(b)(3) (29 U.S.C. 2832(b) is amended— 
(1) in the heading, by inserting ‘‘AND
REP-
RESENTATION’’ after ‘‘MEMBERS’’; and
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(2) by adding at the end the following: ‘‘The 
members of the board shall represent diverse geo-
graphic sections within the local area.’’. 
(c) 
FUNCTIONS.—Section 
117(d) 
(29 
U.S.C. 
2832(d)) is amended— 
(1) in paragraph (2)(B), by striking ‘‘local 
area’’ and all that follows and inserting ‘‘local 
area.’’; and 
(2) in paragraph (4) by inserting ‘‘and ensure 
the appropriate use and management of the funds 
provided under this title for such programs, activi-
ties, and system’’ after ‘‘area’’. 
(d) AUTHORITY
TO
ESTABLISH
COUNCILS
AND 
ELIMINATION
OF REQUIREMENT
FOR YOUTH COUN-
CILS.—Section 117(h) (29 U.S.C. 2832(h)) is amended to 
read as follows: 
‘‘(h) ESTABLISHMENT
OF COUNCILS.—The local 
board may establish councils to provide information and 
advice to assist the local board in carrying out activities 
under this title. Such councils may include a council com-
posed of one-stop partners to advise the local board on 
the operation of the one-stop delivery system, a youth 
council composed of experts and stakeholders in youth 
programs to advise the local board on activities for youth,
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and such other councils as the local board determines are 
appropriate.’’. 
(e) REPEAL OF ALTERNATIVE ENTITY PROVISION.—
Section 117 (29 U.S.C. 2832) is further amended by strik-
ing subsection (i). 
SEC. 107. LOCAL PLAN. 
(a) PLANNING CYCLE.—Section 118(a) (29 U.S.C. 
2833(a)) is amended by striking ‘‘5-year’’ and inserting 
‘‘2-year’’. 
(b) CONTENTS.—Section 118(b) (29 U.S.C. 2833(b)) 
is amended—
(1) by amending paragraph (2) to read as fol-
lows: 
‘‘(2) a description of the one-stop delivery sys-
tem to be established or designated in the local area, 
including a description of how the local board will 
ensure the continuous improvement of eligible pro-
viders of services through the system and ensure 
that such providers meets the employment needs of 
local employers and participants.’’; and 
(2) in paragraph (4), by striking ‘‘and dis-
located worker’’. 
SEC. 108. ESTABLISHMENT OF ONE-STOP DELIVERY SYS-
TEMS. 
(a) ONE-STOP PARTNERS.—
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(1) REQUIRED PARTNERS.—Section 121(b)(1) 
(29 U.S.C. 2841(b)(1)) is amended—
(A) in subparagraph (B)—
(i) by striking clauses (ii) and (v) 
(ii) by redesignating clauses (iii) and 
(iv) as clauses (ii) and (iii), respectively, 
and by redesignating clauses (vi) through 
(xii) as clauses (iv) through (x), respec-
tively; 
(iii) in clause (ix) (as so redesig-
nated), by striking ‘‘and’’; 
(iv) in clause (x) (as so redesignated), 
by striking the period and inserting ‘‘; 
and’’; and 
(v) by inserting after clause (x)(as so 
redesignated) the following: 
‘‘(xi) programs authorized under part 
A of title IV of the Social Security Act (42 
U.S.C. 601 et. seq.), subject to subpara-
graph (C).’’; and 
(B) by adding after subparagraph (B) the 
following: 
‘‘(C) 
DETERMINATION
BY
THE
GOV-
ERNOR.—The program referred to in clauses 
(xi) of subparagraph (B) shall be included as a
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required partner for purposes of this title in a 
State unless the Governor of the State notifies 
the Secretary and the Secretary of Health and 
Human Services in writing of a determination 
by the Governor not to include such programs 
as required partners for purposes of this title in 
the State.’’. 
(2) 
ADDITIONAL
PARTNERS.—Section 
121(b)(2)(B) (29 U.S.C. 2841(b)(2)(B)) is amend-
ed—
(A) by striking clause (i) and redesignating 
clauses (ii) through (v) as clauses (i) through 
(iv) respectively; 
(B) in clause (iii) (as so redesignated) by 
striking ‘‘and’’ at the end; 
(C) in clause (iv) (as so redesignated) by 
striking the period and inserting a semicolon; 
and 
(D) by adding at the end the following new 
clauses: 
‘‘(v) employment and training pro-
grams administered by the Social Security 
Administration, including the Ticket to 
Work program (established by Public Law 
106–170);
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‘‘(vi) programs under part D of title 
IV of the Social Security Act (42 U.S.C. 
451 et seq.) (relating to child support en-
forcement); and 
‘‘(vii) programs carried out in the 
local area for individuals with disabilities, 
including programs carried out by State 
agencies relating to mental health, mental 
retardation, and developmental disabilities, 
State Medicaid agencies, State Inde-
pendent Living Councils, and Independent 
Living Centers.’’. 
(b) PROVISION OF SERVICES.—Subtitle B of title I 
is amended—
(1) by striking subsection (e) of section 121; 
(2) by moving subsection (c) of section 134 
from section 134, redesignating such subsection as 
subsection (e), and inserting such subsection (as so 
redesignated) after subsection (d) of section 121; 
and 
(3) by amending subsection (e) (as moved and 
redesignated by paragraph (2))—
(A) in paragraph (1)(A), by striking ‘‘sub-
section 
(d)(2)’’ 
and 
inserting 
‘‘section 
134(c)(2)’’;
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(B) in paragraph (1)(B)—
(i) by striking ‘‘subsection (d)’’ and 
inserting ‘‘section 134(c)’’; and 
(ii) by striking ‘‘subsection (d)(4)(G)’’ 
and inserting ‘‘section 134(c)(4)(G)’’; 
(C) in paragraph (1)(C), by striking ‘‘sub-
section (e)’’ and inserting ‘‘section 134(d)’’; 
(D) in paragraph (1)(D)—
(i) by striking ‘‘section 121(b)’’ and 
inserting ‘‘subsection (b)’’; and 
(ii) by striking ‘‘and’’ at the end; and 
(E) by amending paragraph (1)(E) to read 
as follows: 
‘‘(E) shall provide access to the informa-
tion described in section 15(e) of the Wagner-
Peyser Act (29 U.S.C. 49l–2(e)).’’. 
(c) CERTIFICATION
AND FUNDING
OF ONE-STOP 
CENTERS.—Section 121 (as amended by subsection (b)) 
is further amended by adding at the end the following new 
subsections: 
‘‘(g) CERTIFICATION OF ONE-STOP CENTERS.—
‘‘(1) IN GENERAL.—The State board shall es-
tablish procedures and criteria for periodically certi-
fying one-stop center for the purpose of awarding
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the one-stop infrastructure funding described in sub-
section (h). 
‘‘(2) CRITERIA.—The criteria for certification 
under this subsection shall include minimum stand-
ards relating to the scope and degree of service inte-
gration achieved by the centers involving the pro-
grams provided by the one-stop partners, and how 
the centers ensure that such providers meet the em-
ployment needs of local employers and participants. 
‘‘(3) EFFECT
OF
CERTIFICATION.—One-stop 
centers certified under this subsection shall be eligi-
ble to receive the infrastructure grants authorized 
under subsection (h). 
‘‘(h) ONE-STOP INFRASTRUCTURE FUNDING.—
‘‘(1) PARTNER CONTRIBUTIONS.—
‘‘(A) PROVISION
OF
FUNDS.—Notwith-
standing any other provision of law, as deter-
mined under subparagraph (B), a portion of the 
Federal funds provided to the State and areas 
within the State under the Federal laws author-
izing the one-stop partner programs described 
in subsection (b)(1)(B) and participating addi-
tional partner programs described in (b)(2)(B) 
for a fiscal year shall be provided to the Gov-
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ernor by such programs to carry out this sub-
section. 
‘‘(B) DETERMINATION
OF
GOVERNOR.—
Subject to subparagraph (C), the Governor, in 
consultation with the State board, shall deter-
mine the portion of funds to be provided under 
subparagraph (A) by each one-stop partner and 
in making such determination shall consider the 
proportionate use of the one-stop centers by 
each partner, the costs of administration for 
purposes not related to one-stop centers for 
each partner, and other relevant factors de-
scribed in paragraph (3). 
‘‘(C) LIMITATIONS.—
‘‘(i) PROVISION
FROM
ADMINISTRA-
TIVE FUNDS.—The funds provided under 
this paragraph by each one-stop partner 
shall be provided only from funds available 
for the costs of administration under the 
program administered by such partner, 
and shall be subject to the limitations with 
respect to the portion of funds under such 
programs that may be used for administra-
tion.
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‘‘(ii) FEDERAL
DIRECT
SPENDING 
PROGRAMS.—Programs that are Federal 
direct spending under section 250(c)(8) of 
the Balanced Budget and Emergency Def-
icit Control Act of 1985 (2 U.S.C. 
900(c)(8)) shall not, for purposes of this 
paragraph, be required to provide an 
amount in excess of the amount deter-
mined to be equivalent to the proportionate 
use of the one-stop centers by such pro-
grams in the State. 
‘‘(2) ALLOCATION
BY
GOVERNOR.—From the 
funds provided under paragraph (1), the Governor 
shall allocate funds to local areas in accordance with 
the formula established under paragraph (3) for the 
purposes of assisting in paying the costs of the in-
frastructure of One-Stop centers certified under sub-
section (g). 
‘‘(3) ALLOCATION FORMULA.—The State board 
shall develop a formula to be used by the Governor 
to allocate the funds described in paragraph (1). 
The formula shall include such factors as the State 
board determines are appropriate, which may in-
clude factors such as the number of centers in the 
local area that have been certified, the population
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served by such centers, and the performance of such 
centers. 
‘‘(4) COSTS
OF
INFRASTRUCTURE.—For pur-
poses of this subsection, the term ‘costs of infra-
structure’ means the nonpersonnel costs that are 
necessary for the general operation of a one-stop 
center, including the rental costs of the facilities, the 
costs of utilities and maintenance, equipment (in-
cluding adaptive technology for individuals with dis-
abilities), strategic planning activities for the center, 
and common outreach activities. 
‘‘(i) OTHER FUNDS.—
‘‘(1) IN GENERAL.—In addition to the funds 
provided to carry out subsection (h), a portion of 
funds made available under Federal law authorizing 
the one-stop partner programs described in sub-
section (b)(1)(B) and participating partner pro-
grams described in subsection (b)(2)(B), or the 
noncash resources available under such programs 
shall be used to pay the costs relating to the oper-
ation of the one-stop delivery system that are not 
paid for from the funds provided under subsection 
(h), to the extent not inconsistent with the Federal 
law involved including—
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‘‘(A) infrastructure costs that are in excess 
of the funds provided under subsection (h); 
‘‘(B) common costs that are in addition to 
the costs of infrastructure; and 
‘‘(C) the costs of the provision of core serv-
ices applicable to each program. 
‘‘(2) DETERMINATION
AND
GUIDANCE.—The 
method for determining the appropriate portion of 
funds to be provided by each program under para-
graph (1) shall be determined as part of the memo-
randum of understanding under subsection (c). The 
State board shall provide guidance to facilitate the 
determination of appropriate funding allocation in 
local areas.’’. 
SEC. 109. ELIGIBLE PROVIDERS OF TRAINING SERVICES. 
Section 122 (29 U.S.C. 2842) is amended to read as 
follows: 
‘‘SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF 
TRAINING SERVICES. 
‘‘(a) IN GENERAL.—The Governor shall establish cri-
teria and procedures regarding the eligibility of providers 
of training services described in section 134(c)(4) to re-
ceive funds provided under section 133(b) for the provision 
of such training services. 
‘‘(b) CRITERIA.—
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‘‘(1) IN
GENERAL.—The criteria established 
pursuant to subsection (a) shall take into account 
the performance of providers of training services 
with respect to the indicators described in section 
136 or other appropriate indicators (taking into con-
sideration the characteristics of the population 
served and relevant economic conditions), and such 
other factors as the Governor determines are appro-
priate to ensure the quality of services, the account-
ability of providers, how the centers ensure that 
such providers meet the needs of local employers and 
participants, and the informed choice of participants 
under chapter 5. Such criteria shall require that the 
provider submit appropriate, accurate and timely in-
formation to the State for purposes of carrying out 
subsection (d). The criteria shall also provide for 
periodic review and renewal of eligibility under this 
section for providers of training services. The Gov-
ernor may authorize local areas in the State to es-
tablish additional criteria or to modify the criteria 
established by the Governor under this section for 
purposes of determining the eligibility of providers of 
training services to provide such services in the local 
area.
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‘‘(2) LIMITATION.—In carrying out the require-
ments of this subsection, no personally identifiable 
information regarding a student, including Social 
Security number, student identification number, or 
other identifier, may be disclosed without the prior 
written consent of the parent or eligible student in 
compliance with section 444 of the General Edu-
cation Provisions Act (20 U.S.C. 1232g). 
‘‘(c) PROCEDURES.—The procedures established 
under subsection (a) shall identify the application process 
for a provider of training services to become eligible to 
receive funds under section 133(b), and identify the re-
spective roles of the State and local areas in receiving and 
reviewing applications and in making determinations of 
eligibility based on the criteria established under this sec-
tion. The procedures shall also establish a process for a 
provider of training services to appeal a denial or termi-
nation of eligibility under this section that includes an op-
portunity for a hearing and prescribes appropriate time 
limits to ensure prompt resolution of the appeal. 
‘‘(d) INFORMATION
TO ASSIST PARTICIPANTS
IN 
CHOOSING PROVIDERS.—In order to facilitate and assist 
participants under chapter 5 in choosing providers of 
training services, the Governor shall ensure that an appro-
priate list or lists of providers determined eligible under
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this section in the State, accompanied by such information 
as the Governor determines is appropriate, is provided to 
the local boards in the State to be made available to such 
participants and to members of the public through the 
one-stop delivery system in the State. 
‘‘(e) AGREEMENTS WITH OTHER STATES.—States 
may enter into agreements, on a reciprocal basis, to per-
mit eligible providers of training services to accept indi-
vidual training accounts provided in another State. 
‘‘(f) RECOMMENDATIONS.—In developing the criteria, 
procedures, and information required under this section, 
the Governor shall solicit and take into consideration the 
recommendations of local boards and providers of training 
services within the State. 
‘‘(g) OPPORTUNITY TO SUBMIT COMMENTS.—During 
the development of the criteria, procedures, and informa-
tion required under this section, the Governor shall pro-
vide an opportunity for interested members of the public, 
including representatives of business and labor organiza-
tions, to submit comments regarding such criteria, proce-
dures, and information.’’. 
SEC. 110. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES. 
Section 123 (29 U.S.C. 2843) is amended to read as 
follows:
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‘‘SEC. 123. ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES. 
‘‘(a) IN GENERAL.—From the funds allocated under 
section 128(b) to a local area, the local board for such 
area shall award grants or contracts on a competitive basis 
to providers of youth activities identified based on the cri-
teria in the State plan and shall conduct oversight with 
respect to such providers. 
‘‘(b) EXCEPTIONS.—A local board may award grants 
or contracts on a sole-source basis if such board deter-
mines there are an insufficient number of eligible pro-
viders of training services in the local area involved (such 
as rural areas) for grants to be awarded on a competitive 
basis under subsection (a).’’. 
SEC. 111. YOUTH ACTIVITIES. 
(a) STATE ALLOTMENTS.—
(1) IN GENERAL.—Section 127(a) (29 U.S.C. 
2852(a)) is amended to read as follows: 
‘‘(a) ALLOTMENT AMONG STATES.—
‘‘(1) YOUTH ACTIVITIES.—
‘‘(A) YOUTH CHALLENGE GRANTS.—
‘‘(i) RESERVATION
OF
FUNDS.—Of 
the amount appropriated under section 
137(a) for each fiscal year, the Secretary 
shall reserve 25 percent to provide youth 
challenge grants under section 169.
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‘‘(ii) 
LIMITATION.—Notwithstanding 
clause (i), if the amount appropriated 
under section 137(a) for a fiscal year ex-
ceeds $1,000,000,000, the Secretary shall 
reserve $250,000,000 to provide youth 
challenge grants under section 169. 
‘‘(B) OUTLYING AREAS AND NATIVE AMER-
ICANS.—After determining the amount to be re-
served under subparagraph (A), of the remain-
der of the amount appropriated under section 
137(a) for each fiscal year the Secretary 
shall—
‘‘(i) reserve not more than 1⁄4 of one 
percent of such amount to provide assist-
ance to the outlying areas to carry out 
youth activities and statewide workforce in-
vestment activities; and 
‘‘(ii) reserve not more than 1 and 1⁄2 
percent of such amount to provide youth 
activities under section 166 (relating to 
Native Americans). 
‘‘(C) STATES.—
‘‘(i) IN GENERAL.—Of the remainder 
of the amount appropriated under section 
137(a) for a fiscal year that is available
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after determining the amounts to be re-
served under subparagraphs (A) and (B), 
the Secretary shall allot—
‘‘(I) the amount of the remainder 
that is less than or equal to the total 
amount that was allotted to States for 
fiscal 
year 
2003 
under 
section 
127(b)(1)(C) of this Act (as in effect 
on the day before the date of enact-
ment of the Workforce Reinvestment 
and Adult Education Act of 2003) in 
accordance with the requirements of 
such section 127(b)(1)(C); and 
‘‘(II) the amount of the remain-
der, if any, in excess of the amount 
referred to in subclause (I) in accord-
ance with clause (ii). 
‘‘(ii) 
FORMULAS
FOR
EXCESS 
FUNDS.—Subject to clauses (iii) and (iv), 
of 
the 
amounts 
described 
in 
clause 
(i)(II)—
‘‘(I) 33 and 1⁄3 percent shall be 
allotted on the basis of the relative 
number of individuals in the civilian 
labor force who are ages 16–19 in
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each State, compared to the total 
number of individuals in the civilian 
labor force who are ages 16–19 in all 
States; 
‘‘(II) 33 and 1⁄3 percent shall be 
allotted on the basis of the relative 
number of unemployed individuals in 
each State, compared to the total 
number of unemployed individuals in 
all States; and 
‘‘(III) 33 and 1⁄3 percent shall be 
allotted on the basis of the relative 
number of disadvantaged youth who 
are ages 16 through 21 in each State, 
compared to the total number of dis-
advantaged youth who are ages 16 
through 21 in all States. 
‘‘(iii) MINIMUM AND MAXIMUM PER-
CENTAGES.—The Secretary shall ensure 
that no State shall receive an allotment for 
a fiscal year that is less than 90 percent 
or greater than 130 percent of the allot-
ment percentage of that State for the pre-
ceding fiscal year.
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‘‘(iv) SMALL STATE MINIMUM ALLOT-
MENT.—Subject to clause (iii), the Sec-
retary shall ensure that no State shall re-
ceive an allotment under this paragraph 
that is less than 3⁄10 of 1 percent of the 
amount available under subparagraph (A). 
‘‘(2) DEFINITIONS.—For the purposes of para-
graph (1), the following definitions apply: 
‘‘(A) 
ALLOTMENT
PERCENTAGE.—The 
term ‘allotment percentage’, used with respect 
to fiscal year 2004 or a subsequent fiscal year, 
means a percentage of the remainder described 
in paragraph (1)(C)(i) that is received through 
an allotment made under this subsection for the 
fiscal year. The term, with respect to fiscal year 
2003, means the percentage of the amounts al-
lotted to States under this chapter (as in effect 
on the day before the date of enactment of the 
Workforce Reinvestment and Adult Education 
Act of 2003) that is received by the State in-
volved for fiscal year 2003. 
‘‘(B) DISADVANTAGED YOUTH.—The term 
‘disadvantaged youth’ means an individual who 
is age 16 through 21 who received an income, 
or is a member of a family that received a total
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family income, that, in relation to family size, 
does not exceed the poverty line. 
‘‘(3) SPECIAL RULE.—For purposes of the for-
mulas specified in paragraph (1)(C), the Secretary 
shall, as appropriate and to the extent practicable, 
exclude college students and members of the Armed 
Forces from the determination of the number of dis-
advantaged youth. 
(2) REALLOTMENT.—Section 127 (29 U.S.C. 
2552) is further amended—
(A) by striking subsection (b); 
(B) by redesignating subsection (c) as sub-
section (b); 
(C) in subsection (b) (as so redesignated) 
(i) 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, excluding accrued 
expenditures, at the end of such program year of the 
total amount of funds available to the State under 
this section during such program year (including 
amounts allotted to the State in prior program years 
that remain available during the program year for
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which the determination is made) exceeds 30 percent 
of such total amount.’’; 
(ii) in paragraph (3)—
(I) by striking ‘‘for the prior pro-
gram year’’ and inserting ‘‘for the 
program year in which the determina-
tion is made’’; and 
(II) by striking ‘‘such prior pro-
gram year’’ and inserting ‘‘such pro-
gram year’’; 
(iii) by amending paragraph (4) to 
read as follows: 
‘‘(4) ELIGIBILITY.—For purposes of this sub-
section, an eligible State means a State which does 
not have an amount available for reallotment under 
paragraph (2) for the program year for which the 
determination under paragraph (2) is made.’’. 
(b) WITHIN STATE ALLOCATIONS.—
(1) RESERVATION
FOR
STATEWIDE
ACTIVI-
TIES.—Section 128(a) is amended to read as follows: 
‘‘(a) RESERVATION FOR STATEWIDE ACTIVITIES.—
‘‘(1) IN GENERAL.—The Governor of a State 
shall reserve not more than 10 percent of the 
amount 
allotted 
to 
the 
State 
under 
section
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127(a)(1)(C) for a fiscal year for statewide activi-
ties. 
‘‘(2) USE OF FUNDS.—Regardless of whether 
the amounts are allotted under section 127(a)(1)(C) 
and reserved under paragraph (1) or allotted under 
section 132 and reserved under section 133(a), the 
Governor may use the reserved amounts to carry out 
statewide youth activities under section 129(b) or 
statewide employment and training activities under 
section 133.’’. 
(2) 
WITHIN
STATE
ALLOCATION.—Section 
128(b) is amended to read as follows: 
‘‘(b) WITHIN STATE ALLOCATION.—
‘‘(1) IN GENERAL.—Of the amounts allotted to 
the State under section 127(a)(1)(C) and not re-
served under subsection (a)(1)—
‘‘(A) 80 percent of such amounts shall be 
allocated by the Governor to local areas in ac-
cordance with paragraph (2); and 
‘‘(B) 20 percent of such amounts shall be 
allocated by the Governor to local areas in ac-
cordance with paragraph (3). 
‘‘(2) ESTABLISHED FORMULA.—
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‘‘(A) IN GENERAL.—Of the amounts de-
scribed in paragraph (1)(A), the Governor shall 
allocate—
‘‘(i) 33 and 1⁄3 percent shall be allot-
ted on the basis of the relative number of 
individuals in the civilian labor force who 
are ages 16–19 in each local area, com-
pared to the total number of individuals in 
the civilian labor force who are ages 16–19 
in all local areas in the State; 
‘‘(ii) 33 and 1⁄3 percent shall be allot-
ted on the basis of the relative number of 
unemployed individuals in each local area, 
compared to the total number of unem-
ployed individuals in all local areas in the 
State; and 
‘‘(iii) 33 and 1⁄3 percent on the basis 
of the relative number of disadvantaged 
youth who are ages 16 through 21 in each 
local area, compared to the total number of 
disadvantaged youth who are ages 16 
through 21 in all local areas in the State. 
‘‘(B) MINIMUM AND MAXIMUM PERCENT-
AGES.—The Governor shall ensure that no local 
area shall receive an allocation for a fiscal year
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under this paragraph that is less than 90 per-
cent or greater than 130 percent of the alloca-
tion percentage of the local area for the pre-
ceding fiscal year. 
‘‘(C) DEFINITIONS.—
‘‘(i) ALLOCATION PERCENTAGE.—For 
purposes of this paragraph, the term ‘allo-
cation percentage’, used with respect to fis-
cal year 2004 or a subsequent fiscal year, 
means a percentage of amount described in 
paragraph(1)(A) that is received through 
an allocation made under this paragraph 
for the fiscal year. The term, with respect 
to fiscal year 2003, means the percentage 
of the amounts allocated to local areas 
under this chapter (as in effect on the day 
before the date of enactment of the Work-
force Investment Act Amendments of 
2003) that is received by the local area in-
volved for fiscal year 2003. 
‘‘(ii) DISADVANTAGED
YOUTH.—The 
term ‘disadvantaged youth’ means an indi-
vidual who is age 16 through 21 who re-
ceived an income, or is a member of a fam-
ily that received a total family income,
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that, in relation to family size, does not ex-
ceed the poverty line. 
‘‘(3) YOUTH
DISCRETIONARY
ALLOCATION.—
The Governor shall allocate to local areas the 
amounts described in paragraph (1)(B) in accord-
ance with such demographic and economic factors as 
the Governor, after consultation with the State 
board and local boards, determines are appropriate. 
‘‘(4) LOCAL ADMINISTRATIVE COST LIMIT.—
‘‘(A) IN GENERAL.—Of the amounts allo-
cated to a local area under this subsection and 
section 133(b) for a fiscal year, not more than 
10 percent of the amount may be used by the 
local boards for the administrative costs of car-
rying out local workforce investment activities 
under this chapter or chapter 5. 
‘‘(B) USE OF FUNDS.—Funds made avail-
able for administrative costs under subpara-
graph (A) may be used for the administrative 
costs of any of the local workforce investment 
activities described in this chapter or chapter 5, 
regardless of whether the funds were allocated 
under this subsection or section 133(b).’’. 
(3) 
REALLOCATION.—Section 
128(c) 
(29 
U.S.C. 2853(c)) is amended—
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(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, excluding accrued 
expenditures, at the end of such program year of the 
total amount of funds available to the local area 
under this section during such program year (includ-
ing amounts allotted to the local area in prior pro-
gram years that remain available during the pro-
gram year for which the determination is made) ex-
ceeds 30 percent of such total amount.’’; 
(C) by amending paragraph (3)—
(i) by striking ‘‘subsection (b)(3)’’ 
each place it appears and inserting ‘‘sub-
section (b)’’; 
(ii) by striking ‘‘the prior program 
year’’ and inserting ‘‘the program year in 
which the determination is made’’; 
(iii) by striking ‘‘such prior program 
year’’ and inserting ‘‘such program year’’; 
and 
(iv) by striking the last sentence; and
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(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 re-
allocation 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 or the General Equivalency Di-
ploma (GED) (including recognized alter-
native standards for individuals with dis-
abilities) who are deficient in basic skills;
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‘‘(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 
following: 
‘‘(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 
priority in the provision of services under this chap-
ter shall be given to individuals who are school drop-
outs. 
‘‘(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
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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.—
Activities carried out under this chapter for in-
school youth meeting the requirements of para-
graph (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 summer recess.’’. 
(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 in-
cluding—
‘‘(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;
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‘‘(C) conducting evaluations under section 
136(e) of activities authorized under this chap-
ter and chapter 5 in coordination with evalua-
tions 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 activi-
ties, and the provision of technical assistance to 
local areas that fail to meet local performance 
measures; 
‘‘(F) operating a fiscal and management 
accountability system under section 136(f); and 
‘‘(G) carrying out monitoring and over-
sight of activities under this chapter and chap-
ter 5.
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‘‘(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 de-
velop 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 
appropriate, of’’; 
(B) in subparagraph (B), by inserting ‘‘are 
directly linked to one or more of the perform-
ance outcomes relating to this chapter under 
section 136, and that’’ after ‘‘for each partici-
pant that’’; and 
(C) in subparagraph (C)—
(i) 
by 
redesignating 
clauses 
(i) 
through (iv) as clauses (ii) through (v), re-
spectively; 
(ii) by inserting before clause (ii) (as 
so redesignated) the following:
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‘‘(i) activities leading to the attain-
ment of a secondary school diploma or the 
General Equivalency Diploma (GED) (in-
cluding recognized alternative standards 
for individuals with disabilities);’’; 
(iii) in clause (ii) (as redesignated by 
this subparagraph), by inserting ‘‘and ad-
vanced training’’ after ‘‘opportunities’’; 
(iv) in clause (iii) (as redesignated by 
this subparagraph), by inserting ‘‘that lead 
to the attainment of recognized creden-
tials’’ after ‘‘learning’’; and 
(v) by amending clause (v) (as redes-
ignated by this subparagraph) to read as 
follows: 
‘‘(v) effective connections to employers 
in sectors of the local labor market experi-
encing high growth in employment oppor-
tunities.’’. 
(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 or the General Equivalency Diploma
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(GED) (including recognized alternative stand-
ards 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 
period 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 ap-
plicant 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
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(D) by redesignating paragraph (8) as 
paragraph (6). 
SEC. 112. COMPREHENSIVE PROGRAM FOR ADULTS. 
(a) TITLE OF CHAPTER 5.—
(1) The title heading of chapter 5 is amended 
to read as follows: 
‘‘CHAPTER 5—COMPREHENSIVE EMPLOY-
MENT AND TRAINING ACTIVITIES FOR 
ADULTS’’. 
(2) CONFORMING AMENDMENT.—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—
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‘‘(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; 
‘‘(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 fis-
cal 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.—
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 train-
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ing activities for adults and statewide workforce in-
vestment activities. 
‘‘(2) STATES.—Subject to paragraph (5), of the 
remainder of the amount referred to under sub-
section (a)(2) for a fiscal year that is available after 
determining the amount to be reserved under para-
graph (1), the Secretary shall allot to the States for 
employment and training activities for adults and for 
statewide workforce investment activities—
‘‘(A) 26 percent in accordance with para-
graph (3); and 
‘‘(B) 74 percent in accordance with para-
graph (4). 
‘‘(3) BASE FORMULA.—
‘‘(A) FISCAL YEAR 2004.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the amount referred to in paragraph 
(2)(A) shall be allotted for fiscal year 2004 
on the basis of allotment percentage of 
each State under section 6 of the Wagner-
Peyser Act for fiscal year 2003. 
‘‘(ii) 
EXCESS
AMOUNTS.—If 
the 
amount referred to in paragraph (2)(A) for 
fiscal year 2004 exceeds the amount that 
was available for allotment to the States
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under the Wagner-Peyser Act for fiscal 
year 2003, such excess amount shall be al-
lotted on the basis of the relative number 
of individuals in the civilian labor force in 
each State, compared to the total number 
of individuals in the civilian labor force in 
all States, adjusted to ensure that no State 
receives less than 3⁄10 of one percent of 
such excess amount. 
‘‘(iii) DEFINITION.—For purposes of 
this subparagraph, the term ‘allotment 
percentage’ means the percentage of the 
amounts allotted to States under section 6 
of the Wagner-Peyser Act that is received 
by the State involved for fiscal year 2003. 
‘‘(B) FISCAL
YEARS
2005
AND
THERE-
AFTER.—
‘‘(i) 
IN
GENERAL.—Subject 
to 
clause(ii), the amount referred to in para-
graph(2)(A) shall be allotted for fiscal year 
2005 and each fiscal year thereafter on the 
basis of the allotment percentage of each 
State under this paragraph for the pre-
ceding fiscal year.
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‘‘(ii) 
EXCESS
AMOUNTS.—If 
the 
amount referred to in paragraph (2)(A) for 
fiscal year 2005 or any fiscal year there-
after exceeds the amount that was avail-
able for allotment under this paragraph for 
the prior fiscal year, such excess amount 
shall be allotted on the basis of the relative 
number of individuals in the civilian labor 
force in each State, compared to the total 
number of individuals in the civilian labor 
force in all States, adjusted to ensure that 
no State receives less than 3⁄10 of one per-
cent of such excess amount. 
‘‘(iii) DEFINITION.—For purposes of 
this subparagraph, the term ‘allotment 
percentage’ means the percentage of the 
amounts allotted to States under this para-
graph in a fiscal year that is received by 
the State involved for such fiscal year. 
‘‘(4) CONSOLIDATED FORMULA.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), of the amount referred to 
in paragraph (2)(B)—
‘‘(i) 60 percent shall be allotted on the 
basis of the relative number of unemployed
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individuals in each State, compared to the 
total number of unemployed individuals in 
all States; 
‘‘(ii) 25 percent shall be allotted on 
the basis of the relative excess number of 
unemployed individuals in each State, com-
pared to the total excess number of unem-
ployed individuals in all States; and 
‘‘(iii) 15 percent shall be allotted on 
the basis of the relative number of dis-
advantaged adults in each State, compared 
to the total number of disadvantaged 
adults in all States. 
‘‘(B) MINIMUM AND MAXIMUM PERCENT-
AGES.—
‘‘(i) 
MINIMUM
PERCENTAGE.—The 
Secretary shall ensure that no State shall 
receive an allotment under this paragraph 
for a fiscal year that is less than 90 per-
cent of the allotment percentage of the 
State under this paragraph for the pre-
ceding fiscal year. 
‘‘(ii) MAXIMUM
PERCENTAGE.—Sub-
ject to clause (i), the Secretary shall en-
sure that no State shall receive an allot-
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ment for a fiscal year under this para-
graph that is more than 130 percent of the 
allotment of the State under this para-
graph for the preceding fiscal year. 
‘‘(C) SMALL
STATE
MINIMUM
ALLOT-
MENT.—Subject to subparagraph (B), the Sec-
retary shall ensure that no State shall receive 
an allotment under this paragraph that is less 
than 2⁄10 of 1 percent of the amount available 
under subparagraph (A). 
‘‘(D) DEFINITIONS.—For the purposes of 
this paragraph: 
‘‘(i) ALLOTMENT PERCENTAGE.—The 
term ‘allotment percentage’, used with re-
spect to fiscal year 2004 or a subsequent 
fiscal year, means a percentage of the 
amounts described in paragraph (2)(B) 
that is received through an allotment made 
under this paragraph for the fiscal year. 
The term, with respect to fiscal year 2003, 
means the percentage of the amounts allot-
ted to States under this chapter (as in ef-
fect on the day before the date of enact-
ment of the Workforce Reinvestment and 
Adult Education Act of 2003) and under
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reemployment service grants received by 
the State involved for fiscal year 2003. 
‘‘(ii) DISADVANTAGED
ADULT.—The 
term ‘disadvantaged adult’ means an indi-
vidual who is age 22 through 72 who re-
ceived an income, or is a member of a fam-
ily that received a total family income, 
that, in relation to family size, does not ex-
ceed the poverty line. 
‘‘(iii) EXCESS
NUMBER.—The term 
‘excess number’ means, used with respect 
to the excess number of unemployed indi-
viduals within a State, the number that 
represents the number of unemployed indi-
viduals in excess of 4 and 1⁄2 percent of the 
civilian labor force in the State. 
‘‘(5) ADJUSTMENTS IN ALLOTMENTS BASED ON 
DIFFERENCES
WITH
UNCONSOLIDATED
FOR-
MULAS.—
‘‘(A) IN
GENERAL.—The Secretary shall 
ensure that for any fiscal year no State has an 
allotment difference, as defined in subpara-
graph (C), that is less than zero. The Secretary 
shall adjust the amounts allotted to the States 
under this subsection in accordance with sub-
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paragraph (B) if necessary to carry out this 
subparagraph.. 
‘‘(B) ADJUSTMENTS IN ALLOTMENTS.—
‘‘(i) REDISTRIBUTION
OF
EXCESS 
AMOUNTS.—
‘‘(I) IN GENERAL.—If necessary 
to carry out subparagraph (A), the 
Secretary shall reduce the amounts 
that would be allotted under para-
graphs (3) and (4) to States that have 
an excess allotment difference, as de-
fined in subclause (II), by the amount 
of such excess, and use such amounts 
to increase the allotments to States 
that have an allotment difference less 
than zero. 
‘‘(II) EXCESS
AMOUNTS.—For 
purposes of subclause (I), the term 
‘excess’ allotment difference means an 
allotment difference for a State that 
is—
‘‘(aa) in excess of 3 percent 
of the amount described in sub-
paragraph (C)(i)(II); or
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‘‘(bb) in excess of a percent-
age established by the Secretary 
that is greater than 3 percent of 
the amount described in subpara-
graph (C)(i)(II) if the Secretary 
determines that such greater per-
centage is sufficient to carry out 
subparagraph (A). 
‘‘(ii) USE
OF
AMOUNTS
AVAILABLE 
UNDER NATIONAL RESERVE ACCOUNT.—If 
the funds available under clause (i) are in-
sufficient to carry out subparagraph (A), 
the Secretary shall use funds reserved 
under section 132(a) in such amounts as 
are necessary to increase the allotments to 
States to meet the requirements of sub-
paragraph (A). Such funds shall be used in 
the same manner as the States use the 
other funds allotted under this subsection. 
‘‘(C) DEFINITION
OF
ALLOTMENT
DIF-
FERENCE.—
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘allotment dif-
ference’ means the difference between—
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‘‘(I) the total amount a State 
would receive of the amounts available 
for allotment under subsection (b)(2) 
for a fiscal year pursuant to para-
graphs (3) and (4); and 
‘‘(II) the total amount the State 
would receive of the amounts available 
for allotment under subsection (b)(2) 
for the fiscal year if such amounts 
were allotted pursuant to the uncon-
solidated formulas (applied as de-
scribed in clause (iii)) that were used 
in allotting funds for fiscal year 2003. 
‘‘(ii) UNCONSOLIDATED FORMULAS.—
For purposes of clause (i), the unconsoli-
dated formulas are: 
‘‘(I) The requirements for the al-
lotment of funds to the States con-
tained in section 132(b)(1)(B) of this 
Act (as in effect on the day before the 
date of enactment of the Workforce 
Reinvestment and Adult Education 
Act of 2003) that were applicable to 
the allotment of funds under such sec-
tion for fiscal year 2003.
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‘‘(II) The requirements for the 
allotment of funds to the States con-
tained in section 132(b)(2)(B) of this 
Act (as in effect on the day before the 
date of enactment of the Workforce 
Reinvestment and Adult Education 
Act of 2003) that were applicable to 
the allotment of funds under such sec-
tion for fiscal year 2003. 
‘‘(III) The requirements for the 
allotment of funds to the States that 
were contained in section 6 of the 
Wagner-Peyser Act (as in effect on 
the day before the date of enactment 
of the Workforce Reinvestment and 
Adult Education Act of 2003) that 
were applicable to the allotment of 
funds under such Act for fiscal year 
2003. 
‘‘(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
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funds for such grants for fiscal year 
2003. 
‘‘(iii) PROPORTIONATE
APPLICATION 
OF
UNCONSOLIDATED
FORMULAS
BASED 
ON FISCAL YEAR 2003.—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 
2003. 
‘‘(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-
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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, excluding accrued 
expenditures, at the end of such program year of the 
total amount of funds available to the State under 
this section during such program year (including 
amounts allotted to the State in prior program years 
that remain available during the program year for 
which the determination is made) exceeds 30 percent 
of such total amount.’’; 
(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:
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‘‘(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) 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
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‘‘(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 
number of unemployed individuals in all 
local areas in the State; 
‘‘(ii) 25 percent on the basis of the 
relative excess number of unemployed indi-
viduals in each local area, compared to the 
total excess number of unemployed individ-
uals in all local areas in the State; and 
‘‘(iii) 15 percent shall be allotted on 
the basis of the relative number of dis-
advantaged adults in each local area, com-
pared to the total number of disadvantaged 
adults in all local areas in the State. 
‘‘(B) MINIMUM AND MAXIMUM PERCENT-
AGES.—The Governor shall ensure that no local 
area shall receive an allocation for a fiscal year
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under this paragraph that is less than 90 per-
cent or greater than 130 percent of the alloca-
tion percentage of the local area for the pre-
ceding fiscal year. 
‘‘(C) DEFINITIONS.—
‘‘(i) ALLOCATION PERCENTAGE.—The 
term ‘allocation percentage’, used with re-
spect to fiscal year 2004 or a subsequent 
fiscal year, means a percentage of amount 
described in paragraph (1)(A) that is re-
ceived through an allocation made under 
this paragraph for the fiscal year. The 
term, with respect to fiscal year 2003, 
means the percentage of the amounts allo-
cated to local areas under this chapter (as 
in effect on the day before the date of en-
actment of the Workforce Reinvestment 
and Adult Education Act of 2003) that is 
received by the local area involved for fis-
cal year 2003. 
‘‘(ii) DISADVANTAGED
ADULT.—The 
term ‘disadvantaged adult’ means an indi-
vidual who is age 22 through 72 who re-
ceived an income, or is a member of a fam-
ily that received a total family income,
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that, in relation to family size, does not ex-
ceed the poverty line. 
‘‘(iii) EXCESS
NUMBER.—The term 
‘excess number’ means, used with respect 
to the excess number of unemployed indi-
viduals within a local area, the number 
that represents the number of unemployed 
individuals in excess of 4.5 percent of the 
civilian labor force in the local area. 
‘‘(3) DISCRETIONARY ALLOCATION.—The Gov-
ernor shall allocate to local areas the amounts de-
scribed in paragraph (1)(B) based on a formula de-
veloped in consultation with the State board and 
local boards. Such formula shall be objective and 
geographically equitable and may include such demo-
graphic and economic factors as the Governor, after 
consultation with the State board and local boards, 
determines are appropriate. 
‘‘(4) LOCAL ADMINISTRATIVE COST LIMIT.—
‘‘(A) IN GENERAL.—Of the amounts allo-
cated to a local area under this subsection and 
section 128(b) for a fiscal year, not more than 
10 percent of the amount may be used by the 
local boards for the administrative costs of car-
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rying out local workforce investment activities 
under this chapter or chapter 4. 
‘‘(B) USE OF FUNDS.—Funds made avail-
able for administrative costs under subpara-
graph (A) may be used for the administrative 
costs of any of the local workforce investment 
activities described in this chapter or chapter 4, 
regardless of whether the funds were allocated 
under this subsection or section 128(b).’’. 
(3) REALLOCATION
AMONG
LOCAL
AREAS.—
Section 133(c) (29 U.S.C. 2863(c)) is amended—
(A) in paragraph (1), by striking ‘‘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, excluding accrued 
expenditures, at the end of such program year of the 
total amount of funds available to the local area 
under this section during such program year (includ-
ing amounts allotted to the local area in prior pro-
gram years that remain available during the pro-
gram year for which the determination is made) ex-
ceeds 30 percent of such total amount.’’;
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(C) by amending paragraph (3)—
(i) by striking ‘‘subsection (b)(3)’’ 
each place it appears and inserting ‘‘sub-
section (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 re-
allocation under paragraph (2) for the program year 
for which the determination under paragraph (2) is 
made.’’. 
(e) USE OF FUNDS FOR EMPLOYMENT AND TRAIN-
ING ACTIVITIES.—
(1) STATEWIDE EMPLOYMENT AND TRAINING 
ACTIVITIES.—
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(A) IN GENERAL.—Section 134(a)(1) (29 
U.S.C. 2864(a)(1) is amended to read as fol-
lows: 
‘‘(1) IN GENERAL.—
‘‘(A) REQUIRED USE OF FUNDS.—Not less 
than 50 percent of the funds reserved by a Gov-
ernor under section 133(a) shall be used to sup-
port the provision of core services in local areas, 
consistent with the local plan, through one-stop 
delivery systems by distributing funds to local 
areas in accordance with subparagraph (B). 
Such funds may be used by States to employ 
State personnel to provide such services in des-
ignated local areas in consultation with local 
boards. 
‘‘(B) 
METHOD
OF
DISTRIBUTING 
FUNDS.—The method of distributing funds 
under this paragraph shall be developed in con-
sultation with the State board and local boards. 
Such method of distribution, which may include 
the 
formula 
established 
under 
section 
121(h)(3), shall be objective and geographically 
equitable, and may include factors such as the 
number of centers in the local area that have
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been certified, the population served by such 
centers, and the performance of such centers. 
‘‘(C) OTHER USE OF FUNDS.—Funds re-
served by a Governor for a State—
‘‘(i) under section 133(a) and not 
used under subparagraph (A), may be used 
for statewide activities described in para-
graph (2); and 
‘‘(ii) under section 133(a) and not 
used under subparagraph (A), and under 
section 128(a) may be used to carry out 
any of the statewide employment and 
training activities described in paragraph 
(3).’’. 
(B) STATEWIDE RAPID RESPONSE ACTIVI-
TIES.—Section 
134(a)(2) 
(29 
U.S.C. 
2864(a)(2)) is amended to read as follows: 
‘‘(2) STATEWIDE
RAPID
RESPONSE
ACTIVI-
TIES.—A State shall carry out statewide rapid re-
sponse activities using funds reserved as described in 
section 133(a). Such activities shall include—
‘‘(A) provision of rapid response activities, 
carried out in local areas by the State or by an 
entity designated by the State, working in con-
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junction with the local boards and the chief 
elected officials in the local areas; and 
‘‘(B) provision of additional assistance to 
local areas that experience disasters, mass lay-
offs or plant closings, or other events that pre-
cipitate substantial increases in the number of 
unemployed individuals, carried out in local 
areas by the State, working in conjunction with 
the local boards and the chief elected officials in 
the local areas.’’. 
(C) STATEWIDE EMPLOYMENT AND TRAIN-
ING ACTIVITIES.—Section 134(a)(3) (29 U.S.C. 
2864(a)(3)) is amended to read as follows: 
‘‘(3) STATEWIDE ACTIVITIES.—Funds reserved 
by a Governor for a State as described in sections 
133(a) and 128(a) may be used for statewide activi-
ties including—
‘‘(A) supporting the provision of core serv-
ices described in section 134(c)(2) in the one-
stop delivery system; 
‘‘(B) conducting evaluations under section 
136(e) of activities authorized under this chap-
ter and chapter 4 in coordination with evalua-
tions carried out by the Secretary under section 
172, research, and demonstration projects;
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‘‘(C) 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; 
‘‘(D) 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 activi-
ties, and the provision of technical assistance to 
local areas that fail to meet local performance 
measures; 
‘‘(E) operating a fiscal and management 
accountability system under section 136(f); 
‘‘(F) carrying out monitoring and oversight 
of activities carried out under this chapter and 
chapter 4; 
‘‘(G) implementing innovative programs, 
such as incumbent worker training programs, 
programs serving individuals with disabilities 
consistent with section 188;
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‘‘(H) developing strategies for effectively 
serving hard-to-serve populations and for inte-
grating programs and services among one-stop 
partners; 
‘‘(I) implementing innovative programs for 
displaced homemakers, which for purposes of 
this subparagraph may include an individual 
who is receiving public assistance and is within 
2 years of exhausting lifetime eligibility under 
Part A of title IV of the Social Security Act (42 
U.S.C. 601 et seq.); and 
‘‘(J) implementing programs to increase 
the number of individuals training for and 
placed in nontraditional employment.’’. 
(D) LIMITATION ON STATE ADMINISTRA-
TIVE EXPENDITURES.—Section 134(a) is fur-
ther amended by adding the following new 
paragraph: 
‘‘(4) LIMITATION.—Not more than 5 percent of 
the funds allotted under section 132(b) shall be used 
by the State for administrative activities carried out 
under this subsection and section 128(a).’’. 
(2) LOCAL
EMPLOYMENT
AND
TRAINING
AC-
TIVITIES.— Section 134(b) (29 U.S.C. 2864(b)) is 
amended—
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(A) by striking ‘‘under paragraph (2)(A)’’ 
and 
all 
that 
follows 
through 
‘‘section 
133(b)(2)(B)’’ and inserting ‘‘under section 
133(b)’’; 
(B) in paragraphs (1) and (2), by striking 
‘‘or dislocated workers, respectively’’ both 
places it appears; and 
(C) by redesignating subsections (d) and 
(e) as subsections (c) and (d), respectively. 
(3) 
REQUIRED
LOCAL
EMPLOYMENT
AND 
TRAINING ACTIVITIES.—
(A) 
ALLOCATED
FUNDS.—Section 
134(c)(1) (29 U.S.C. 2864(c)(1)) (as redesig-
nated by paragraph (2)) is amended to read as 
follows: 
‘‘(1) IN GENERAL.—Funds allocated to a local 
area for adults under section 133(b) shall be used—
‘‘(A) to establish a one-stop delivery sys-
tem as described in section 121(e); 
‘‘(B) to provide the core services described 
in paragraph (2) through the one-stop delivery 
system in accordance with such paragraph; 
‘‘(C) to provide the intensive services de-
scribed in paragraph (3) to adults described in 
such paragraph; and
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‘‘(D) to provide training services described 
in paragraph (4) to adults described in such 
paragraph.’’. 
(B) CORE
SERVICES.—Section 134(c)(2) 
(29 U.S.C. 2864(c)(2)) (as redesignated by 
paragraph (2)) is amended—
(i) by striking ‘‘who are adults or dis-
located workers’’; 
(ii) in subparagraph (A), by striking 
‘‘under this subtitle’’ and inserting ‘‘under 
the one-stop partner programs described in 
section 121(b)’’; 
(iii) by amending subparagraph (D) to 
read as follows: 
‘‘(D) labor exchange services, including—
‘‘(i) job search and placement assist-
ance, and where appropriate career coun-
seling; 
‘‘(ii) appropriate recruitment services 
for employers; and 
‘‘(iii) reemployment services provided 
to unemployment claimants.’’; 
(iv) in subparagraph (I), by inserting 
‘‘and the administration of the work test
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for the unemployment compensation sys-
tem’’ after ‘‘compensation’’; and 
(v) by amending subparagraph (J) to 
read as follows: 
‘‘(J) assistance in establishing eligibility 
for programs of financial aid assistance for 
training and education programs that are not 
funded under this Act and are available in the 
local area; and’’. 
(C) 
INTENSIVE
SERVICES.—Section 
134(c)(3) (29 U.S.C. 2864(c)(3) (as redesig-
nated by paragraph (2) of this subsection) is 
amended—
(i) by amending subparagraph (A) to 
read as follows: 
‘‘(A) IN GENERAL.—
‘‘(i) ELIGIBILITY.—Funds allocated to 
a local area under section 133(b) shall be 
used to provide intensive services for 
adults who—
‘‘(I) are unemployed and who 
have been determined by the one-stop 
operator to be—
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‘‘(aa) unlikely or unable to 
obtain 
suitable 
employment 
through core services; and 
‘‘(bb) in need of intensive 
services in order to obtain suit-
able employment; or 
‘‘(II) are employed, but who are 
determined by a one-stop operator to 
be in need of intensive services to ob-
tain or retain suitable employment. 
‘‘(ii) 
DEFINITION.—The 
Governor 
shall define the term ‘suitable employment’ 
for purposes of this subparagraph.’’; and 
(ii) in subparagraph (C)—
(I) in clause (v), by striking ‘‘for 
participants seeking training services 
under paragraph (4)’’; and 
(II) by adding the following 
clauses after clause (vi): 
‘‘(vii) Internships and work experi-
ence. 
‘‘(viii) Literacy activities relating to 
basic work readiness, and financial literacy 
activities.
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‘‘(ix) Out-of-area job search assistance 
and relocation assistance.’’. 
(D) 
TRAINING
SERVICES.—Section 
134(c)(4) (as redesignated by paragraph (2) of 
this subsection) is amended—
(i) by amending subparagraph (A) to 
read as follows: 
‘‘(A) IN GENERAL.—
‘‘(i) ELIGIBILITY.—Funds allocated to 
a local area under section 133(b) shall be 
used to provide training services to adults 
who—
‘‘(I) after an interview, evalua-
tion, or assessment, and case manage-
ment, have been determined by a one-
stop operator or one-stop partner, as 
appropriate, to—
‘‘(aa) be unlikely or unable 
to obtain or retain suitable em-
ployment through intensive serv-
ices under paragraph (3)(A); 
‘‘(bb) be in need of training 
services to obtain or retain suit-
able employment; and
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‘‘(cc) have the skills and 
qualifications to successfully par-
ticipate in the selected program 
of training services; 
‘‘(II) select programs of training 
services that are directly linked to the 
employment opportunities in the local 
area involved or in another area in 
which the adults receiving such serv-
ices are willing to commute or relo-
cate; 
‘‘(III) who meet the requirements 
of subparagraph (B); and 
‘‘(IV) who are determined eligible 
in accordance with the priority system 
in effect under subparagraph (E). 
‘‘(ii) The Governor shall define the 
term ‘suitable employment’ for purposes of 
this subparagraph.’’; 
(ii) in subparagraph (B)(i), by strik-
ing ‘‘Except’’ and inserting ‘‘Notwith-
standing section 479B of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087uu) 
and except’’;
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(iii) by amending subparagraph (E) to 
read as follows: 
‘‘(E) PRIORITY.—
‘‘(i) IN GENERAL.—A priority shall be 
given to unemployed individuals for the 
provision of intensive and training services 
under this subsection. 
‘‘(ii) ADDITIONAL
PRIORITY.—If the 
funds in the local area, including the funds 
allocated under section 133(b), for serving 
recipients of public assistance and other 
low-income individuals, including single 
parents, displaced homemakers, and preg-
nant single women, is limited, the priority 
for the provision of intensive and training 
services under this subsection shall include 
such recipients and individuals. 
‘‘(iii) DETERMINATIONS.—The Gov-
ernor and the appropriate local board shall 
direct the one-stop operators in the local 
area with regard to making determinations 
with respect to the priority of service under 
this subparagraph.’’; 
(iv) in subparagraph (F), by adding 
the following clause after clause (iii):
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‘‘(iv) ENHANCED INDIVIDUAL TRAIN-
ING
ACCOUNTS.—Each local board may, 
through one-stop centers, assist individuals 
receiving 
individual 
training 
accounts 
through the establishment of such accounts 
that include, in addition to the funds pro-
vided under this paragraph, funds from 
other programs and sources that will assist 
the individual in obtaining training serv-
ices.’’; and 
(v) in subparagraph (G)(iv), by redes-
ignating subclause (IV) as subclause (V) 
and inserting after subclause (III) the fol-
lowing: 
‘‘(IV) Individuals with disabil-
ities.’’. 
(4) PERMISSIBLE ACTIVITIES.—Section 134(d) 
(as redesignated by paragraph (2)) is amended—
(A) by amending paragraph (1) to read as 
follows: 
‘‘(1) DISCRETIONARY ONE-STOP DELIVERY AC-
TIVITIES.—
‘‘(A) IN GENERAL.—Funds allocated to a 
local area under section 133(b) may be used to 
provide, through the one-stop delivery system—
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‘‘(i) customized screening and referral 
of qualified participants in training serv-
ices to employers; 
‘‘(ii) customized employment-related 
services to employers on a fee-for-service 
basis; 
‘‘(iii) customer support to navigate 
among multiple services and activities for 
special participant populations that face 
multiple barriers to employment, including 
individuals with disabilities; and 
‘‘(iv) employment and training assist-
ance provided in coordination with child 
support enforcement activities of the State 
agency carrying out subtitle D of title IV 
of the Social Security Act. 
‘‘(B) WORK
SUPPORT
ACTIVITIES
FOR 
LOW-WAGE WORKERS.—
‘‘(i) IN GENERAL.— Funds allocated 
to a local area under 133(b) may be used 
to provide, through the one-stop delivery 
system and in collaboration with the ap-
propriate programs and resources of the 
one-stop partners, work support activities
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designed to assist low-wage workers in re-
taining and enhancing employment. 
‘‘(ii) ACTIVITIES.—The activities de-
scribed in clause (i) may include assistance 
in accessing financial supports for which 
such workers may be eligible and the provi-
sion of activities available through the one-
stop delivery system in a manner that en-
hances the opportunities of such workers 
to participate, such as the provision of em-
ployment and training activities during 
nontraditional hours and the provision of 
on-site child care while such activities are 
being provided.’’; and 
(B) by adding after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) INCUMBENT
WORKER
TRAINING
PRO-
GRAMS.—
‘‘(A) IN GENERAL.—The local board may 
use up to 10 percent of the funds allocated to 
a local area under section 133(b) to carry out 
incumbent worker training programs in accord-
ance with this paragraph. 
‘‘(B) TRAINING ACTIVITIES.—The training 
programs for incumbent workers under this
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paragraph shall be carried out by the local area 
in conjunction with the employers of such work-
ers for the purpose of assisting such workers in 
obtaining the skills necessary to retain employ-
ment and avert layoffs. 
‘‘(C) EMPLOYER MATCH REQUIRED.—
‘‘(i) IN GENERAL.—Employers partici-
pating in programs under this paragraph 
shall be required to pay a proportion of the 
costs of providing the training to the in-
cumbent workers. The Governor shall es-
tablish, or may authorize the local board to 
establish, the required portion of such 
costs, which shall not be less than—
‘‘(I) 10 percent of the costs, for 
employers with 50 or fewer employees; 
‘‘(II) 25 percent of the costs, for 
employers with more than 50 employ-
ees but fewer than 100 employees; 
and 
‘‘(III) 50 percent of the costs, for 
employers with 100 or more employ-
ees. 
‘‘(ii) CALCULATION OF MATCH.—The 
wages paid by an employer to a worker
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while they are attending training may be 
included as part of the requirement pay-
ment of the employer.’’. 
SEC. 113. PERFORMANCE ACCOUNTABILITY SYSTEM. 
(a) STATE PERFORMANCE MEASURES.—
(1) 
IN
GENERAL.—Section 
136(b)(1) 
(29 
U.S.C. 2871(b)(1)) is amended—
(A) in subparagraph (A)(i), by striking 
‘‘and the customer satisfaction indicator of per-
formance described in paragraph (2)(B)’’; and 
(B) in subparagraph (A)(ii), by striking 
‘‘paragraph (2)(C)’’ and inserting ‘‘paragraph 
(2)(B)’’. 
(2) INDICATORS
OF
PERFORMANCE.—Section 
136(b)(2) (29 U.S.C. 2871(b)(2)) is amended—
(A) in subparagraph (A)(i), by striking 
‘‘(except for self-service and information activi-
ties) and (for participants who are eligible 
youth age 19 through 21) for youth activities 
authorized under section 129’’; 
(B) by amending subparagraph (A)(i)(IV) 
to read as follows: 
‘‘(IV) the efficiency of the pro-
gram in obtaining the outcomes de-
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scribed in subclauses (I) through 
(III).’’; 
(C) by amending subparagraph (A)(ii) to 
read as follows: 
‘‘(ii) CORE INDICATORS FOR ELIGIBLE 
YOUTH.—The core indicators of perform-
ance for youth activities authorized under 
section 129 shall consist of—
‘‘(I) entry into employment, edu-
cation or advanced training, or mili-
tary service; 
‘‘(II) attainment of secondary 
school 
diplomas 
or 
the 
General 
Equivalency Diploma (GED) (includ-
ing recognized alternative standards 
for individuals with disabilities); 
‘‘(III) attainment of literacy or 
numeracy skills; and 
‘‘(IV) the efficiency of the pro-
gram in obtaining the outcomes de-
scribed in subclauses (I) through 
(III).’’; 
(D) by striking subparagraph (B); 
(E) by redesignating subparagraph (C) as 
subparagraph (B), and by adding at the end of
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such subparagraph (as so redesignated) the fol-
lowing new sentence: ‘‘Such indicators may in-
clude customer satisfaction of employers and 
participants with services received from the 
workforce 
investment 
activities 
authorized 
under this subtitle.’’. 
(3) 
LEVELS
OF
PERFORMANCE.—Section 
136(b)(3)(A) (29 U.S.C. 2871(b)(3)(A)) is amend-
ed—
(A) in clause (i), by striking ‘‘and the cus-
tomer satisfaction indicator described in para-
graph (2)(B)’’; 
(B) in clause (ii), by striking ‘‘and the cus-
tomer satisfaction indicator of performance, for 
the first 3’’ and inserting ‘‘for the 2’’; 
(C) in clause (iii)—
(i) in the heading, by striking ‘‘FOR 
FIRST 3 YEARS’’; and 
(ii) by striking ‘‘and the customer sat-
isfaction indicator of performance, for the 
first 3’’ and inserting ‘‘for the 2’’; 
(D) in clause (iv)—
(i) by striking subclause (I);
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(ii) by redesignating subclauses (II) 
and (III) as subclauses (I) and (II), re-
spectively; and 
(iii) in subclause (I) (as so redesig-
nated)—
(I) by striking ‘‘taking into ac-
count’’ and inserting ‘‘which shall be 
adjusted based on’’; 
(II) by inserting ‘‘such as unem-
ployment rates and job losses or gains 
in particular industries’’ after ‘‘eco-
nomic conditions’’; and 
(III) by inserting ‘‘such as indi-
cators of poor work history, lack of 
work experience, low levels of literacy 
or English proficiency, disability sta-
tus, and welfare dependency’’ after 
‘‘program’’; 
(E) by striking clause (v); and 
(F) by redesignating clause (vi) as clause 
(v). 
(4) 
ADDITIONAL
INDICATORS.—Section 
136(b)(3)(B) is amended by striking ‘‘paragraph 
(2)(C)’’ and inserting ‘‘paragraph (2)(B)’’.
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(b) LOCAL
PERFORMANCE
MEASURES.—Section 
136(c) (29 U.S.C 2871(c)) is amended—
(1) in paragraph (1)(A)(i), by striking ‘‘, and 
the customer satisfaction indicator of performance 
described in subsection (b)(2)(B),’’; 
(2) in paragraph (1)(A)(ii), by striking ‘‘sub-
section 
(b)(2)(C)’’ 
and 
inserting 
‘‘subsection 
(b)(2)(B)’’; and 
(3) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) DETERMINATIONS.—In determining such 
local levels of performance, the local board, the chief 
elected official, and the Governor shall ensure such 
levels are adjusted based on the specific economic 
characteristics (such as unemployment rates and job 
losses or gains in particular industries), demographic 
characteristics, or other characteristics of the popu-
lation to be served in the local area, such as poor 
work history, lack of work experience, low levels of 
literacy or English proficiency, disability status, and 
welfare dependency.’’. 
(c) REPORT.—Section 136(d) (29 U.S.C. 2871(d)) is 
amended—
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(1) in paragraph (1), by striking ‘‘and the cus-
tomer satisfaction indicator’’ in both places that it 
appears; 
(2) in paragraph (2)(E), by striking ‘‘(excluding 
participants who received only self-service and infor-
mational activities)’’; and 
(3) by adding at the end the following: 
‘‘(4) DATA VALIDATION.—In preparing the re-
ports described in this subsection, the States shall 
establish procedures, consistent with guidelines 
issued by the Secretary, to ensure the information 
contained in the report is valid and reliable.’’. 
(d) SANCTIONS
FOR STATE.—Section 136(g) (29 
U.S.C. 2871(g)) is amended—
(1) in paragraph (1)(A), by striking ‘‘or (B)’’; 
and 
(2) in paragraph (2), by striking ‘‘section 503’’ 
and inserting ‘‘section 136(i)’’. 
(e) SANCTIONS FOR LOCAL AREAS.—Section 136(h) 
(29 U.S.C. 2871(h)) is amended— 
(1) in paragraph (1), by striking ‘‘or (B)’’; and 
(2) by amending paragraph (2)(B) to read as 
follows: 
‘‘(B) APPEAL TO GOVERNOR.—A local area 
that is subject to a reorganization plan under
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subparagraph (A) may, not later than 30 days 
after receiving notice of the reorganization plan, 
appeal to the Governor to rescind or revise such 
plan. In such case, the Governor shall make a 
final decision not later than 30 days after the 
receipt of the appeal.’’. 
(f) INCENTIVE GRANTS.—Section 136(i) (29 U.S.C. 
2871(i)) is amended to read as follows: 
‘‘(i) INCENTIVE GRANTS FOR STATES AND LOCAL 
AREAS.—
‘‘(1) INCENTIVE GRANTS FOR STATES.—
‘‘(A) IN
GENERAL.—From funds appro-
priated under section 174, the Secretary may 
award grants to States for exemplary perform-
ance in carrying programs under this chapters 
4 and 5 of this title. Such awards may be based 
on States meeting or exceeding the performance 
measures established under this section, on the 
performance of the State in serving special pop-
ulations, including the levels of service provided 
and the performance outcomes, and such other 
factors relating to the performance of the State 
under this title as the Secretary determines is 
appropriate.
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‘‘(B) USE OF FUNDS.—The funds awarded 
to a State under this paragraph may be used to 
carry out any activities authorized under chap-
ters 4 and 5 of this title, including demonstra-
tions and innovative programs for special popu-
lations. 
‘‘(2) INCENTIVE GRANTS FOR LOCAL AREAS.—
‘‘(A) IN GENERAL.—From funds reserved 
under sections 128(a) and 133(a), the Governor 
may award incentive grants to local areas for 
exemplary performance with respect to the 
measures established under this section and 
with the performance of the local area in serv-
ing special populations, including the levels of 
service and the performance outcomes. 
‘‘(B) USE OF FUNDS.—The funds awarded 
to a local area may be used to carry out activi-
ties authorized for local areas under chapters 4 
and 5 of this title, and such demonstration or 
other innovative programs to serve special pop-
ulations as may be approved by the Governor.’’. 
(g) REPEAL OF DEFINITIONS.—Sections 502 and 
503 (and the items related to such sections in the table 
of contents) are repealed.
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SEC. 114. AUTHORIZATION OF APPROPRIATIONS. 
(a) YOUTH ACTIVITIES.— Section 137(a) (29 U.S.C. 
2872(a)) is amended by striking ‘‘such sums as may be 
necessary for each of fiscal years 1999 through 2003’’ and 
inserting ‘‘$1,250,000,000 for fiscal year 2004 and such 
sums as may be necessary for each of fiscal years 2005 
through 2009’’. 
(b) ADULT EMPLOYMENT AND TRAINING ACTIVI-
TIES.—Section 137(b) (29 U.S.C. 2872(b)) is amended by 
striking ‘‘section 132(a)(1), such sums as may be nec-
essary for each of fiscal years 1999 through 2003’’ and 
inserting ‘‘132(a), $3,079,800,000 for fiscal year 2004 
and such sums as may be necessary for each of fiscal years 
2005 through 2009’’. 
(c) 
DISLOCATED
WORKER
EMPLOYMENT
AND 
TRAINING ACTIVITIES.—Section 137 is further amended 
by striking subsection (c). 
SEC. 115. JOB CORPS. 
(a) COMMUNITY PARTICIPATION.—Section 153 (29 
U.S.C. 2893) is amended—
(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) BUSINESS AND COMMUNITY PARTICIPATION.—
The director of each Job Corps center shall ensure the 
establishment and development of the business and com-
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munity relationships and networks described in subsection 
(b) in order to enhance the effectiveness of such center.’’; 
(2) in subsection (b)—
(A) in the heading, by striking ‘‘RESPON-
SIBILITIES’’ and inserting ‘‘NETWORKS’’; and 
(B) by striking ‘‘The responsibilities of the 
Liaison’’ and inserting ‘‘The activities carried 
out by each Job Corps center under this sec-
tion’’; and 
(3) in subsection (c), by striking ‘‘The Liaison 
for’’ and inserting ‘‘The director of’’. 
(b) INDUSTRY
COUNCILS.—Section 154(b) (29 
U.S.C. 2894(b)) is amended—
(1) in paragraph (1)(A), by striking ‘‘local and 
distant’’; and 
(2) by adding after paragraph (2) the following: 
‘‘(3) EMPLOYERS OUTSIDE OF LOCAL AREAS.—
The industry council may include, or otherwise pro-
vide for consultation with, employers from outside 
the local area who are likely to hire a significant 
number of enrollees from the Job Corps center.’’. 
(c) INDICATORS OF PERFORMANCE AND ADDITIONAL 
INFORMATION.—Section 159(c) (29 U.S.C. 2893(c)) is 
amended—
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(1) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) CORE INDICATORS.—The Secretary shall 
annually establish expected levels of performance for 
Job Corps centers and the Job Corps program relat-
ing to each of the core indicators for youth identified 
in section 136(b)(2)(A)(ii).’’; and 
(2) in paragraph (2), by striking ‘‘measures’’ 
each place it appears and inserting ‘‘indicators’’. 
SEC. 116. NATIVE AMERICAN PROGRAMS. 
(a) ADVISORY COUNCIL.—Section 166(h)(4)(C) (29 
U.S.C. 2911(h)(4)(C)) is amended to read as follows: 
‘‘(C) DUTIES.—The Council shall advise 
the Secretary on the operation and administra-
tion of the programs assisted under this sec-
tion.’’. 
(b) ASSISTANCE
TO AMERICAN SAMOANS
IN HA-
WAII.—Section 166 (29 U.S.C. 2911) is further amended 
by striking subsection (j). 
(c) MIGRANT AND SEASONAL FARMWORKER PRO-
GRAMS.—Section 167(d) is amended by inserting ‘‘(includ-
ing permanent housing)’’ after ‘‘housing’’. 
SEC. 117. YOUTH CHALLENGE GRANTS. 
Section 169 (29 U.S.C. 2914) is amended to read as 
follows:
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‘‘SEC. 169. YOUTH CHALLENGE GRANTS. 
‘‘(a) IN GENERAL.—Of the amounts reserved by the 
Secretary under section 127(a)(1)(A) for a fiscal year—
‘‘(1) the Secretary shall use not less than 80 
percent to award competitive grants under sub-
section (b); and 
‘‘(2) the Secretary may use not more than 20 
percent to award discretionary grants under sub-
section (c). 
‘‘(b) COMPETITIVE GRANTS TO STATES AND LOCAL 
AREAS.—
‘‘(1) ESTABLISHMENT.—From the funds de-
scribed in subsection (a)(1), the Secretary shall 
award competitive grants to eligible entities to carry 
out activities authorized under this section to assist 
eligible youth in acquiring the skills, credentials and 
employment experience necessary to succeed in the 
labor market. 
‘‘(2) ELIGIBLE ENTITIES.—Grants under this 
subsection may be awarded to States, local boards, 
recipients of grants under section 166 (relating to 
Native American programs), and public or private 
entities (including consortia of such entities) apply-
ing in conjunction with local boards. 
‘‘(3) GRANT
PERIOD.—The Secretary may 
make a grant under this section for a period of 1
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year and may renew the grants for each of the 4 
succeeding years. 
‘‘(4) AUTHORITY
TO
REQUIRE
MATCH.—The 
Secretary may require that grantees under this sub-
section provide a non-Federal share of the cost of 
activities carried out under a grant awarded under 
this subsection. 
‘‘(5) PARTICIPANT
ELIGIBILITY.—Youth ages 
14 through 19 as of the time the eligibility deter-
mination is made may be eligible to participate in 
activities provided under this subsection. 
‘‘(6) USE OF FUNDS.—Funds under this sub-
section may be used for activities that are designed 
to assist youth in acquiring the skills, credentials 
and employment experience that are necessary to 
succeed in the labor market, including the activities 
identified in section 129. The activities may include 
activities such as—
‘‘(A) training and internships for out-of-
school youth in sectors of economy experiencing 
or projected to experience high growth; 
‘‘(B) after-school dropout prevention activi-
ties for in-school youth;
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‘‘(C) activities designed to assist special 
youth populations, such as court-involved youth 
and youth with disabilities; and 
‘‘(D) activities combining remediation of 
academic skills, work readiness training, and 
work experience, and including linkages to post-
secondary education, apprenticeships, and ca-
reer-ladder employment. 
‘‘(7) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible entity shall 
submit an application to the Secretary at such time, 
in such manner, and containing such information as 
the Secretary may require, including—
‘‘(A) a description of the activities the eli-
gible entity will provide to eligible youth under 
this subsection; 
‘‘(B) a description of the programs of dem-
onstrated effectiveness on which the provision 
of the activities under subparagraph (A) are 
based, and a description of how such activities 
will expand the base of knowledge relating to 
the provision of activities for youth; 
‘‘(C) a description of the private and pub-
lic, and local and State resources that will be le-
veraged to provide the activities described under
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subparagraph (A) in addition the funds pro-
vided under this subsection; and 
‘‘(D) the levels of performance the eligible 
entity expects to achieve with respect to the in-
dicators of performance for youth specified in 
section 136(b)(2)(A)(ii). 
‘‘(8) FACTORS
FOR
AWARD.—In awarding 
grants under this subsection the Secretary may con-
sider the quality of the proposed project, the goals 
to be achieved, the likelihood of successful implemen-
tation, the extent to which the project is based on 
proven strategies or the extent to which the project 
will expand the knowledge base on activities for 
youth, and the additional State, local or private re-
sources that will be provided. 
‘‘(9) EVALUATION.—The Secretary may reserve 
up to 5 percent of the funds described in sub-
section(a)(1) to provide technical assistance to, and 
conduct evaluations of the projects funded under 
this subsection (using appropriate techniques as de-
scribed in section 172(c)). 
‘‘(c) DISCRETIONARY GRANTS FOR YOUTH ACTIVI-
TIES.—
‘‘(1) IN GENERAL.—From the funds described 
in subsection(a)(2), the Secretary may award grants
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to eligible entities to provide activities that will as-
sist youth in preparing for, and entering and retain-
ing, employment. 
‘‘(2) ELIGIBLE ENTITIES.—Grants under this 
subsection may be awarded to public or private enti-
ties that the Secretary determines would effectively 
carry out activities relating to youth under this sub-
section. 
‘‘(3) PARTICIPANT
ELIGIBILITY.—Youth ages 
14 through 19 at the time the eligibility determina-
tion is made may be eligible to participate in activi-
ties under this subsection. 
‘‘(4) USE OF FUNDS.—Funds provided under 
this subsection may be used for activities that will 
assist youth in preparing for, and entering and re-
taining, employment, including the activities de-
scribed in section 129 for out-of-school youth, activi-
ties designed to assist in-school youth to stay in 
school and gain work experience, and such other ac-
tivities that the Secretary determines are appro-
priate. 
‘‘(5) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible entity shall 
submit an application to the Secretary at such time,
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in such manner, and containing such information as 
the Secretary may require. 
‘‘(6) ADDITIONAL
REQUIREMENTS.—The Sec-
retary may require the provision of a non-Federal 
share for projects funded under this subsection and 
may require participation of grantees in evaluations 
of such projects, including evaluations using the 
techniques as described in section 172(c).’’. 
SEC. 118. TECHNICAL ASSISTANCE. 
Section 170 (29 U.S.C. 2915) is amended—
(1) by striking subsection (b); 
(2) by striking ‘‘(a) GENERAL TECHNICAL AS-
SISTANCE.—’’; 
(3) by redesignating paragraphs (1), (2), and 
(3) as subsections (a), (b), and (c) respectively, and 
moving such subsections 2 ems to the left; 
(4) in subsection (a) (as redesignated by para-
graph (3))—
(A) by inserting ‘‘the training of staff pro-
viding rapid response services, the training of 
other staff of recipients of funds under this 
title, peer review activities under this title, as-
sistance regarding accounting and program op-
eration practices (when such assistance would
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not be duplicative to assistance provided by the 
State),’’ after ‘‘localities,’’; and 
(B) by striking ‘‘from carrying out activi-
ties’’ and all that follows up to the period and 
inserting ‘‘to implement the amendments made 
by the Workforce Reinvestment and Adult Edu-
cation Act of 2003’’; and 
(5) by inserting, after subsection (c) (as redes-
ignated by paragraph (3)), the following: 
‘‘(d) BEST PRACTICES COORDINATION.—The Sec-
retary shall establish a system whereby States may share 
information regarding best practices with regards to the 
operation of workforce investment activities under this 
Act.’’. 
SEC. 119. DEMONSTRATION, PILOT, MULTISERVICE, RE-
SEARCH AND MULTISTATE PROJECTS. 
(a) DEMONSTRATION AND PILOT PROJECTS.—Sec-
tion 171(b) (29 U.S.C. 2916(b)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘Under a’’ and inserting 
‘‘Consistent with the priorities specified in the’’; 
(B) 
by 
amending 
subparagraphs 
(A) 
through (D) to read as follows: 
‘‘(A) projects that assist national employ-
ers in connecting with the workforce investment
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system established under this title in order to 
facilitate the recruitment and employment of 
needed workers and to provide information to 
such system on skills and occupations in de-
mand; 
‘‘(B) projects that promote the develop-
ment of systems that will improve the effective-
ness and efficiency of programs carried out 
under this title; 
‘‘(C) projects that focus on opportunities 
for employment in industries and sectors of in-
dustries that are experiencing or are likely to 
experience high rates of growth; 
‘‘(D) projects carried out by States and 
local areas to test innovative approaches to de-
livering employment-related services;’’; 
(C) by striking subparagraph (E); 
(D) by redesignating subparagraphs (F) 
and (G) as subparagraphs (E) and (F), respec-
tively; 
(E) by inserting after subparagraph (F) 
(as so redesignated) the following: 
‘‘(G) projects that provide retention grants 
to qualified job training programs upon place-
ment or retention of a low-income individual
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HR 1261 RFS 
trained by that program in employment with a 
single employer for a period of 1 year, provided 
that such employment is providing to the low-
income individual an income not less than twice 
the poverty line for that individual.’’; and 
(F) by striking subparagraph (H); and 
(2) in paragraph (2)—
(A) by striking subparagraph (B); and 
(B) by redesignating subparagraph (C) as 
subparagraph (B). 
(b) 
MULTISERVICE
PROJECTS.—Section 
171(c)(2)(B) (29 U.S.C. 2916(c)(2)(B)) is amended to 
read as follows: 
‘‘(B) NET
IMPACT
STUDIES
AND
RE-
PORTS.—The Secretary shall conduct studies to 
determine the net impacts of programs, serv-
ices, and activities carried out under this title. 
The Secretary shall prepare and disseminate to 
the public reports containing the results of such 
studies.’’. 
(c) WAIVER AUTHORITY
TO CARRY OUT DEM-
ONSTRATIONS
AND
EVALUATIONS.—Section 171 (29 
U.S.C. 2916(d)) is further amended by striking subsection 
(d).
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SEC. 120. EVALUATIONS. 
(a) IN GENERAL.—Section 173 (29 U.S.C. 2916) is 
amended—
(1) by amending the designation and heading to 
read as follows:
‘‘SEC. 173. NATIONAL DISLOCATED WORKER GRANTS.’’; 
and 
(2) in subsection (a)—
(A) 
by 
striking 
‘‘national 
emergency 
grants’’ in the matter preceding paragraph (1) 
and inserting ‘‘national dislocated worker 
grants’’; and 
(B) in paragraph (1), by striking ‘‘sub-
section (c)’’ and inserting ‘‘subsection (b)’’. 
(b) ADMINISTRATION.—Section 173 (29 U.S.C. 
2918) is further amended—
(1) by striking subsection (b) and redesignating 
subsections (c) and (d) as subsections (b) and (c), 
respectively; and 
(2) by striking subsection (e) and redesignating 
subsections (f) and (g) as subsection (d) and (e), re-
spectively. 
(c) ELIGIBLE ENTITIES.—Section 173(b)(1)(B) (29 
U.S.C. 2918(b)(1)(B)) (as redesignated by subsection (b)
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HR 1261 RFS 
of this section) is amended by striking ‘‘, and other enti-
ties’’ and all that follows and inserting a period. 
(d) CONFORMING AMENDMENT.—The table of con-
tents in section 1(b) is amended by amending the item 
related to section 173 to read as follows:
‘‘Sec. 173. National dislocated worker grants.’’.
SEC. 121. AUTHORIZATION OF APPROPRIATIONS FOR NA-
TIONAL ACTIVITIES. 
(a) IN GENERAL.—Section 174(a)(1) (29 U.S.C. 
2919(a)(1)) is amended by striking ‘‘1999 through 2003’’ 
and inserting ‘‘2004 through 2009’’. 
(b) RESERVATIONS.—Section 174(b) is amended to 
read as follows: 
‘‘(b) TECHNICAL ASSISTANCE; DEMONSTRATION AND 
PILOT PROJECTS; EVALUATIONS; INCENTIVE GRANTS.—
There are authorized to be appropriated to carry out sec-
tions 170 through 172 and section 136 such sums as may 
be necessary for each of fiscal years 2004 through 2009.’’. 
SEC. 122. REQUIREMENTS AND RESTRICTIONS. 
(a) IN GENERAL.—Section 181(c)(2)(A) (29 U.S.C. 
2931(c)(2)(A)) is amended in the matter preceding clause 
(i) by striking ‘‘shall’’ and inserting ‘‘may’’. 
(b) LIMITATIONS.—Section 181(e) is amended by 
striking the first sentence.
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SEC. 123. NONDISCRIMINATION. 
Section 188(a)(2) (29 U.S.C. 2931(a)(2)) is amend-
ed—
(1) by striking ‘‘EMPLOYMENT.—No’’ and in-
serting ‘‘EMPLOYMENT.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), no’’; and 
(2) by adding at the end the following subpara-
graph: 
‘‘(B) EXEMPTION FOR RELIGIOUS ORGANI-
ZATIONS.—Subparagraph (A) shall not apply to 
a recipient of financial assistance under this 
title that is a religious corporation, association, 
educational institution, or society, with respect 
to the employment of individuals of a particular 
religion to perform work connected with the 
carrying on by such corporation, association, 
educational institution, or society of its activi-
ties Such recipients shall comply with the other 
requirements contained in subparagraph (A).’’. 
SEC. 124. ADMINISTRATIVE PROVISIONS. 
(a) PROGRAM YEAR.—Section 189(g)(1) (29 U.S.C. 
2939(g)(1)) is amended to read as follows: 
‘‘(1) IN GENERAL.—Appropriations for any fis-
cal year for programs and activities carried out 
under this title shall be available for obligation only
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on the basis of a program year. The program year 
shall begin on July 1 in the fiscal year for which the 
appropriation is made.’’. 
(b) AVAILABILITY.—Section 189(g)(2) (29 U.S.C. 
2939(g)(2)) is amended by striking ‘‘each State’’ and in-
serting ‘‘each recipient’’. 
(c) GENERAL
WAIVERS.—Section 189(i)(4) (29 
U.S.C. 2939(i)(4)) is amended—
(1) in subparagraph (A), in the matter pre-
ceding clause (i), by inserting ‘‘, or in accordance 
with subparagraph (D),’’ after ‘‘subparagraph (B)’’; 
and 
(2) by adding the following subparagraph: 
‘‘(D) EXPEDITED PROCESS FOR EXTEND-
ING
APPROVED
WAIVERS
TO
ADDITIONAL 
STATES.—In lieu of the requirements of sub-
paragraphs (B) and (C), the Secretary may es-
tablish an expedited procedure for the purpose 
of extending to additional States the waiver of 
statutory or regulatory requirements that have 
been approved for a State pursuant to a request 
under subparagraph (B). Such procedure shall 
ensure that the extension of such waivers to ad-
ditional States are accompanied by appropriate
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conditions relating the implementation of such 
waivers.’’. 
SEC. 125. GENERAL PROGRAM REQUIREMENTS. 
Section 195 (29 U.S.C. 2945) is amended by adding 
at the end the following new paragraph: 
‘‘(14) Funds provided under this title shall not 
be used to establish or operate stand-alone fee-for-
service enterprises that compete with private sector 
employment agencies within the meaning of section 
701(c) of the Civil Rights Act of 1964 (42 U.S.C. 
2000e(c)). For purposes of this paragraph, such an 
enterprise does not include one-stop centers.’’. 
TITLE II—ADULT EDUCATION 
PART A—ADULT BASIC SKILLS AND FAMILY 
LITERACY EDUCATION 
SEC. 201. TABLE OF CONTENTS. 
The table of contents in section 1(b) is amended by 
amending the items relating to title II to read as follows:
‘‘TITLE II—ADULT BASIC SKILLS AND FAMILY LITERACY 
EDUCATION 
‘‘Sec. 201. Short title. 
‘‘Sec. 202. Purpose. 
‘‘Sec. 203. Definitions. 
‘‘Sec. 204. Home schools. 
‘‘Sec. 205. Authorization of appropriations. 
‘‘CHAPTER 1—FEDERAL PROVISIONS 
‘‘Sec. 211. Reservation of funds; grants to eligible agencies; allotments. 
‘‘Sec. 212. Performance accountability system. 
‘‘Sec. 213. Incentive grants for states. 
‘‘CHAPTER 2—STATE PROVISIONS
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‘‘Sec. 221. State administration. 
‘‘Sec. 222. State distribution of funds; matching requirement. 
‘‘Sec. 223. State leadership activities. 
‘‘Sec. 224. State plan. 
‘‘Sec. 225. Programs for corrections education and other institutionalized indi-
viduals. 
‘‘CHAPTER 3—LOCAL PROVISIONS 
‘‘Sec. 231. Grants and contracts for eligible providers. 
‘‘Sec. 232. Local application. 
‘‘Sec. 233. Local administrative cost limits. 
‘‘CHAPTER 4—GENERAL PROVISIONS 
‘‘Sec. 241. Administrative provisions. 
‘‘Sec. 242. National leadership activities.’’.
SEC. 202. AMENDMENT. 
Title II is amended to read as follows: 
‘‘TITLE II—ADULT BASIC SKILLS 
AND FAMILY LITERACY EDU-
CATION 
‘‘SEC. 201. SHORT TITLE. 
‘‘This title may be cited as the ‘Adult Basic Skills 
and Family Literacy Education Act’. 
‘‘SEC. 202. PURPOSE. 
‘‘It is the purpose of this title to provide instructional 
opportunities for adults seeking to improve their basic 
reading, writing, speaking, and math skills, and support 
States and local communities in providing, on a voluntary 
basis, adult basic skills and family literacy programs, in 
order to—
‘‘(1) increase the basic reading, writing, speak-
ing, and math skills necessary for adults to obtain
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employment and self-sufficiency and to successfully 
advance in the workforce; 
‘‘(2) assist adults in the completion of a sec-
ondary school education (or its equivalent) and the 
transition to a postsecondary educational institution; 
‘‘(3) increase the basic reading, writing, speak-
ing, and math skills of parents to enable them to 
support the educational development of their chil-
dren and make informed choices regarding their 
children’s education; and 
‘‘(4) assist immigrants who are not proficient in 
English in improving their reading, writing, speak-
ing, and math skills and acquiring an understanding 
of the American free enterprise system, individual 
freedom, and the responsibilities of citizenship. 
‘‘SEC. 203. DEFINITIONS. 
‘‘In this title: 
‘‘(1) ADULT BASIC SKILLS AND FAMILY LIT-
ERACY
EDUCATION
PROGRAMS.—The term ‘adult 
basic skills and family literacy education programs’ 
means a sequence of academic instruction and edu-
cational services below the postsecondary level that 
increase an individual’s ability to read, write, and 
speak in English and perform mathematical com-
putations leading to a level of proficiency equivalent
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to secondary school completion that is provided for 
individuals—
‘‘(A) who are at least 16 years of age; 
‘‘(B) who are not enrolled or required to be 
enrolled in secondary school under State law; 
and 
‘‘(C) who—
‘‘(i) lack sufficient mastery of basic 
reading, writing, speaking, and math skills 
to enable the individuals to function effec-
tively in society; 
‘‘(ii) do not have a secondary school 
diploma or the General Equivalency Di-
ploma (GED) (including recognized alter-
native standards for individuals with dis-
abilities), and have not achieved an equiva-
lent level of education; or 
‘‘(iii) are unable to read, write, or 
speak the English language. 
‘‘(2) ELIGIBLE
AGENCY.—The term ‘eligible 
agency’—
‘‘(A) means the sole entity or agency in a 
State or an outlying area responsible for admin-
istering or supervising policy for adult basic 
skills and family literacy education programs in
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the State or outlying area, respectively, con-
sistent with the law of the State or outlying 
area, respectively; and 
‘‘(B) may be the State educational agency, 
the State agency responsible for administering 
workforce investment activities, or the State 
agency responsible for administering community 
or technical colleges. 
‘‘(3) ELIGIBLE PROVIDER.—The term ‘eligible 
provider’ means—
‘‘(A) a local educational agency; 
‘‘(B) a community-based or faith-based or-
ganization of demonstrated effectiveness; 
‘‘(C) a volunteer literacy organization of 
demonstrated effectiveness; 
‘‘(D) an institution of higher education; 
‘‘(E) a public or private educational agen-
cy; 
‘‘(F) a library; 
‘‘(G) a public housing authority; 
‘‘(H) an institution that is not described in 
any of subparagraphs (A) through (G) and has 
the ability to provide adult basic skills and fam-
ily literacy education programs to adults and 
families; or
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‘‘(I) a consortium of the agencies, organi-
zations, institutions, libraries, or authorities de-
scribed in any of subparagraphs (A) through 
(H). 
‘‘(4) ENGLISH
LANGUAGE
ACQUISITION
PRO-
GRAM.—The term ‘English language acquisition pro-
gram’ means a program of instruction designed to 
help individuals with limited English proficiency 
achieve competence in reading, writing, and speaking 
the English language. 
‘‘(5) ESSENTIAL COMPONENTS OF READING IN-
STRUCTION.—The term ‘essential components of 
reading instruction’ has the meaning given to that 
term in section 1208 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 6368). 
‘‘(6) 
FAMILY
LITERACY
EDUCATION
PRO-
GRAMS.—The term ‘family literacy education pro-
grams’ means educational programs that—
‘‘(A) assist parents and students, on a vol-
untary basis, in achieving the purposes of this 
title as described in section 202; and 
‘‘(B) are of sufficient intensity in terms of 
hours and of sufficient duration to make sus-
tainable changes in a family, are based upon 
scientific research-based principles, and for the
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purpose of substantially increasing the ability of 
parents and children to read, write, and speak 
English integrate—
‘‘(i) interactive literacy activities be-
tween parents and their children; 
‘‘(ii) training for parents regarding 
how to be the primary teacher for their 
children and full partners in the education 
of their children; 
‘‘(iii) parent literacy training that 
leads to economic self-sufficiency; and 
‘‘(iv) an age-appropriate education to 
prepare children for success in school and 
life experiences. 
‘‘(7) GOVERNOR.—The term ‘Governor’ means 
the chief executive officer of a State or outlying 
area. 
‘‘(8) INDIVIDUAL WITH A DISABILITY.—
‘‘(A) IN GENERAL.—The term ‘individual 
with a disability’ means an individual with any 
disability (as defined in section 3 of the Ameri-
cans with Disabilities Act of 1990 (42 U.S.C. 
12102)).
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‘‘(B) INDIVIDUALS WITH DISABILITIES.—
The term ‘individuals with disabilities’ means 
more than one individual with a disability. 
‘‘(9) INDIVIDUAL WITH LIMITED ENGLISH PRO-
FICIENCY.—The 
term 
‘individual 
with 
limited 
English proficiency’ means an adult or out-of-school 
youth who has limited ability in reading, writing, 
speaking, or understanding the English language, 
and—
‘‘(A) whose native language is a language 
other than English; or 
‘‘(B) who lives in a family or community 
environment where a language other than 
English is the dominant language. 
‘‘(10) INSTITUTION OF HIGHER EDUCATION.—
The term ‘institution of higher education’ has the 
meaning given to that term in section 101 of the 
Higher Education Act of 1965 (20 U.S.C. 1001). 
‘‘(11) LITERACY.—The term ‘literacy’ means 
the ability to read, write, and speak the English lan-
guage with competence, knowledge, and comprehen-
sion. 
‘‘(12) LOCAL
EDUCATIONAL
AGENCY.—The 
term ‘local educational agency’ has the meaning 
given to that term in section 9101 of the Elemen-
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tary and Secondary Education Act of 1965 (20 
U.S.C. 7801). 
‘‘(13) OUTLYING
AREA.—The term ‘outlying 
area’ has the meaning given to that term in section 
101 of this Act. 
‘‘(14) POSTSECONDARY EDUCATIONAL INSTITU-
TION.—The term ‘postsecondary educational institu-
tion’ means—
‘‘(A) an institution of higher education 
that provides not less than a 2-year program of 
instruction that is acceptable for credit toward 
a bachelor’s degree; 
‘‘(B) a tribally controlled community col-
lege; or 
‘‘(C) a nonprofit educational institution of-
fering certificate or apprenticeship programs at 
the postsecondary level. 
‘‘(15) READING.—The term ‘reading’ has the 
meaning given to that term in section 1208 of the 
Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6368). 
‘‘(16) SCIENTIFICALLY
BASED
READING
RE-
SEARCH.—The term ‘scientifically based reading re-
search’ has the meaning given to that term in sec-
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tion 1208 of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 6368). 
‘‘(17) 
SECRETARY.—The 
term 
‘Secretary’ 
means the Secretary of Education. 
‘‘(18) STATE.—The term ‘State’ means each of 
the several States of the United States, the District 
of Columbia, and the Commonwealth of Puerto Rico. 
‘‘(19) STATE
EDUCATIONAL
AGENCY.—The 
term ‘State educational agency’ has the meaning 
given to that term in section 9101 of the Elemen-
tary and Secondary Education Act of 1965 (20 
U.S.C. 7801). 
‘‘(20) WORKPLACE LITERACY PROGRAM.—The 
term ‘workplace literacy program’ means an edu-
cational program that is offered in collaboration be-
tween eligible providers and employers or employee 
organizations for the purpose of improving the pro-
ductivity of the workforce through the improvement 
of reading, writing, speaking, and math skills. 
‘‘SEC. 204. HOME SCHOOLS. 
‘‘Nothing in this title shall be construed to affect 
home schools, whether or not a home school is treated as 
a home school or a private school under State law, or to 
compel a parent engaged in home schooling to participate 
in an English language acquisition program, a family lit-
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eracy education program, or an adult basic skills and fam-
ily literacy education program. 
‘‘SEC. 205. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this title $584,300,000 for fiscal year 2004 and such sums 
as may be necessary for fiscal years 2005 through 2009. 
‘‘CHAPTER 1—FEDERAL PROVISIONS 
‘‘SEC. 211. RESERVATION OF FUNDS; GRANTS TO ELIGIBLE 
AGENCIES; ALLOTMENTS. 
‘‘(a) RESERVATION OF FUNDS.—From the sums ap-
propriated under section 205 for a fiscal year, the Sec-
retary—
‘‘(1) shall reserve 1.75 percent to carry out the 
National Institute for Literacy Establishment Act; 
‘‘(2) shall reserve up to 1.72 percent for incen-
tive grants under section 213; and 
‘‘(3) shall reserve up to 1.55 percent to carry 
out section 242. 
‘‘(b) GRANTS TO ELIGIBLE AGENCIES.—
‘‘(1) IN
GENERAL.—From the sums appro-
priated under section 205 and not reserved under 
subsection (a) for a fiscal year, the Secretary shall 
award a grant to each eligible agency having a State 
plan approved under section 224 in an amount equal 
to the sum of the initial allotment under subsection
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(c)(1) and the additional allotment under subsection 
(c)(2) for the eligible agency for the fiscal year, sub-
ject to subsections (f) and (g). 
‘‘(2) PURPOSE
OF
GRANTS.—The Secretary 
may award a grant under paragraph (1) only if the 
eligible agency involved agrees to expend the grant 
in accordance with the provisions of this title. 
‘‘(c) ALLOTMENTS.—
‘‘(1) INITIAL
ALLOTMENTS.—From the sums 
appropriated under section 205 and not reserved 
under subsection (a) for a fiscal year, the Secretary 
shall allot to each eligible agency having a State 
plan approved under section 224—
‘‘(A) $100,000, in the case of an eligible 
agency serving an outlying area; and 
‘‘(B) $250,000, in the case of any other el-
igible agency. 
‘‘(2) ADDITIONAL
ALLOTMENTS.—From the 
sums appropriated under section 205, not reserved 
under subsection (a), and not allotted under para-
graph (1), for a fiscal year, the Secretary shall allot 
to each eligible agency that receives an initial allot-
ment under paragraph (1) an additional amount 
that bears the same relationship to such sums as the 
number of qualifying adults in the State or outlying
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area served by the eligible agency bears to the num-
ber of such adults in all States and outlying areas. 
‘‘(d) QUALIFYING ADULT.—For the purpose of sub-
section (c)(2), the term ‘qualifying adult’ means an adult 
who—
‘‘(1) is at least 16 years of age; 
‘‘(2) is beyond the age of compulsory school at-
tendance under the law of the State or outlying 
area; 
‘‘(3) does not have a secondary school diploma 
or the General Equivalency Diploma (GED) (includ-
ing recognized alternative standards for individuals 
with disabilities); and 
‘‘(4) is not enrolled in secondary school. 
‘‘(e) SPECIAL RULE.—
‘‘(1) IN GENERAL.—From amounts made avail-
able under subsection (c) for the Republic of the 
Marshall Islands, the Federated States of Micro-
nesia, and the Republic of Palau, the Secretary shall 
award grants to Guam, American Samoa, the Com-
monwealth of the Northern Mariana Islands, the Re-
public of the Marshall Islands, the Federated States 
of Micronesia, or the Republic of Palau to carry out 
activities described in this title in accordance with
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the provisions of this title as determined by the Sec-
retary. 
‘‘(2) TERMINATION OF ELIGIBILITY.—Notwith-
standing any other provision of law, the Republic of 
the Marshall Islands, the Federated States of Micro-
nesia, and the Republic of Palau shall be eligible to 
receive a grant under this title until an agreement 
for the extension of United States education assist-
ance under the Compact of Free Association for 
each of the Freely Associated States becomes effec-
tive. 
‘‘(3) ADMINISTRATIVE COSTS.—The Secretary 
may provide not more than 5 percent of the funds 
made available for grants under this subsection to 
pay the administrative costs of the Pacific Region 
Educational Laboratory regarding activities assisted 
under this subsection. 
‘‘(f) HOLD-HARMLESS PROVISIONS.—
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(c), and subject to paragraphs (2) and (3), for fiscal 
year 2004 and each succeeding fiscal year, no eligi-
ble agency shall receive an allotment under this title 
that is less than 90 percent of the allotment the eli-
gible agency received for the preceding fiscal year 
under this title.
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‘‘(2) EXCEPTION.—An eligible agency that re-
ceives for the preceding fiscal year only an initial al-
lotment under subsection 211(c)(1) (and no addi-
tional allotment under 211(c)(2)) shall receive an al-
lotment equal to 100 percent of the initial allotment. 
‘‘(3) RATABLE REDUCTION.—If for any fiscal 
year the amount available for allotment under this 
title is insufficient to satisfy the provisions of para-
graph (1), the Secretary shall ratably reduce the 
payments to all eligible agencies, as necessary. 
‘‘(g) REALLOTMENT.—The portion of any eligible 
agency’s allotment under this title for a fiscal year that 
the Secretary determines will not be required for the pe-
riod such allotment is available for carrying out activities 
under this title, shall be available for reallotment from 
time to time, on such dates during such period as the Sec-
retary shall fix, to other eligible agencies in proportion to 
the original allotments to such agencies under this title 
for such year. 
‘‘SEC. 212. PERFORMANCE ACCOUNTABILITY SYSTEM. 
‘‘(a) PURPOSE.—The purpose of this section is to es-
tablish a comprehensive performance accountability sys-
tem, composed of the activities described in this section, 
to assess the effectiveness of eligible agencies in achieving 
continuous improvement of adult basic skills and family
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literacy education programs funded under this title, in 
order to optimize the return on investment of Federal 
funds in adult basic skills and family literacy education 
programs. 
‘‘(b) ELIGIBLE
AGENCY
PERFORMANCE
MEAS-
URES.—
‘‘(1) IN GENERAL.—For each eligible agency, 
the eligible agency performance measures shall con-
sist of—
‘‘(A)(i) the core indicators of performance 
described in paragraph (2)(A); and 
‘‘(ii) employment performance indicators 
identified by the eligible agency under para-
graph (2)(B); and 
‘‘(B) an eligible agency adjusted level of 
performance for each indicator described in 
subparagraph (A). 
‘‘(2) INDICATORS OF PERFORMANCE.—
‘‘(A) CORE
INDICATORS
OF
PERFORM-
ANCE.—The core indicators of performance 
shall include the following: 
‘‘(i) 
Measurable 
improvements 
in 
basic skill levels in reading, writing, and 
speaking the English language and basic 
math, leading to proficiency in each skill.
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‘‘(ii) Receipt of a secondary school di-
ploma or the General Equivalency Diploma 
(GED) (including recognized alternative 
standards for individuals with disabilities). 
‘‘(iii) Placement in postsecondary edu-
cation or other training programs. 
‘‘(B) EMPLOYMENT
PERFORMANCE
INDI-
CATORS.—Consistent with applicable Federal 
and State privacy laws, an eligible agency shall 
identify in the State plan the following indi-
vidual participant employment performance in-
dicators—
‘‘(i) entry into employment; 
‘‘(ii) retention in employment; and 
‘‘(iii) increase in earnings. 
‘‘(3) LEVELS OF PERFORMANCE.—
‘‘(A) ELIGIBLE AGENCY ADJUSTED LEVELS 
OF PERFORMANCE FOR CORE INDICATORS.—
‘‘(i) IN GENERAL.—For each eligible 
agency submitting a State plan, there shall 
be established, in accordance with this sub-
paragraph, levels of performance for each 
of the core indicators of performance de-
scribed in paragraph (2)(A) for adult basic 
skills and family literacy education pro-
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grams authorized under this title. The lev-
els of performance established under this 
subparagraph shall, at a minimum—
‘‘(I) be expressed in an objective, 
quantifiable, and measurable form; 
and 
‘‘(II) show the progress of the el-
igible agency toward continuously and 
significantly improving the agency’s 
performance outcomes in an objective, 
quantifiable, and measurable form. 
‘‘(ii) 
IDENTIFICATION
IN
STATE 
PLAN.—Each eligible agency shall identify, 
in the State plan submitted under section 
224, expected levels of performance for 
each of the core indicators of performance 
for the first 3 program years covered by 
the State plan. 
‘‘(iii) 
AGREEMENT
ON
ELIGIBLE 
AGENCY ADJUSTED LEVELS OF PERFORM-
ANCE FOR FIRST 3 YEARS.—In order to en-
sure an optimal return on the investment 
of Federal funds in adult basic skills and 
family literacy education programs author-
ized under this title, the Secretary and
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each eligible agency shall reach agreement 
on levels of student proficiency for each of 
the core indicators of performance, for the 
first 3 program years covered by the State 
plan, taking into account the levels identi-
fied in the State plan under clause (ii) and 
the factors described in clause (iv). The 
levels agreed to under this clause shall be 
considered to be the eligible agency ad-
justed levels of performance for the eligible 
agency for such years and shall be incor-
porated into the State plan prior to the ap-
proval of such plan. 
‘‘(iv) FACTORS.—The agreement de-
scribed in clause (iii) or (v) shall take into 
account—
‘‘(I) how the levels involved com-
pare with the eligible agency’s ad-
justed levels of performance, taking 
into account factors including the 
characteristics of participants when 
the participants entered the program; 
and 
‘‘(II) the extent to which such 
levels promote continuous and signifi-
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cant improvement in performance on 
the student proficiency measures used 
by such eligible agency and ensure op-
timal return on the investment of 
Federal funds. 
‘‘(v) AGREEMENT ON ELIGIBLE AGEN-
CY ADJUSTED LEVELS OF PERFORMANCE 
FOR SECOND 3 YEARS.—Prior to the fourth 
program year covered by the State plan, 
the Secretary and each eligible agency 
shall reach agreement on levels of student 
proficiency for each of the core indicators 
of performance for the fourth, fifth, and 
sixth program years covered by the State 
plan, taking into account the factors de-
scribed in clause (iv). The levels agreed to 
under this clause shall be considered to be 
the eligible agency adjusted levels of per-
formance for the eligible agency for such 
years and shall be incorporated into the 
State plan. 
‘‘(vi) REVISIONS.—If unanticipated 
circumstances arise in a State resulting in 
a significant change in the factors de-
scribed in clause (iv)(I), the eligible agency
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may request that the eligible agency ad-
justed levels of performance agreed to 
under clause (iii) or (v) be revised. 
‘‘(B) LEVELS OF EMPLOYMENT PERFORM-
ANCE.—The eligible agency shall identify, in the 
State plan, eligible agency levels of performance 
for each of the employment performance indica-
tors described in paragraph (2)(B). Such levels 
shall be considered to be eligible agency ad-
justed levels of performance for purposes of this 
title. 
‘‘(c) REPORT.—
‘‘(1) IN GENERAL.—Each eligible agency that 
receives a grant under section 211(b) shall annually 
prepare and submit to the Secretary, the Governor, 
the State legislature, eligible providers, and the gen-
eral public within the State, a report on the progress 
of the eligible agency in achieving eligible agency 
performance measures, including the following: 
‘‘(A) Information on the levels of perform-
ance achieved by the eligible agency with re-
spect to the core indicators of performance and 
employment performance indicators.
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‘‘(B) The number and type of each eligible 
provider that receives funding under such 
grant. 
‘‘(2) INFORMATION DISSEMINATION.—The Sec-
retary—
‘‘(A) shall make the information contained 
in such reports available to the general public 
through publication and other appropriate 
methods; 
‘‘(B) shall disseminate State-by-State com-
parisons of the information; and 
‘‘(C) shall provide the appropriate commit-
tees of the Congress with copies of such re-
ports. 
‘‘SEC. 213. INCENTIVE GRANTS FOR STATES. 
‘‘(a) IN GENERAL.—From funds appropriated under 
section 211(a)(2), the Secretary may award grants to 
States for exemplary performance in carrying out pro-
grams under this title. Such awards shall be based on 
States meeting or exceeding the core indicators of per-
formance established under section 212(b)(2)(A) and may 
be based on the performance of the State in serving popu-
lations, such as those described in section 224(b)(10), in-
cluding the levels of service provided and the performance 
outcomes, and such other factors relating to the perform-
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ance of the State under this title as the Secretary deter-
mines appropriate. 
‘‘(b) USE OF FUNDS.—The funds awarded to a State 
under this paragraph may be used to carry out any activi-
ties authorized under this title, including demonstrations 
and innovative programs for hard-to-serve populations. 
‘‘CHAPTER 2—STATE PROVISIONS 
‘‘SEC. 221. STATE ADMINISTRATION. 
‘‘Each eligible agency shall be responsible for the fol-
lowing activities under this title: 
‘‘(1) The development, submission, implementa-
tion, and monitoring of the State plan. 
‘‘(2) Consultation with other appropriate agen-
cies, groups, and individuals that are involved in, or 
interested in, the development and implementation 
of activities assisted under this title. 
‘‘(3) Coordination and avoidance of duplication 
with other Federal and State education, training, 
corrections, public housing, and social service pro-
grams. 
‘‘SEC. 222. STATE DISTRIBUTION OF FUNDS; MATCHING RE-
QUIREMENT. 
‘‘(a) STATE DISTRIBUTION OF FUNDS.—Each eligi-
ble agency receiving a grant under this title for a fiscal 
year—
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‘‘(1) shall use an amount not less than 82.5 
percent of the grant funds to award grants and con-
tracts under section 231 and to carry out section 
225, of which not more than 10 percent of such 
amount shall be available to carry out section 225; 
‘‘(2) shall use not more than 12.5 percent of 
the grant funds to carry out State leadership activi-
ties under section 223; and 
‘‘(3) shall use not more than 5 percent of the 
grant funds, or $75,000, whichever is greater, for 
the administrative expenses of the eligible agency. 
‘‘(b) MATCHING REQUIREMENT.—
‘‘(1) IN GENERAL.—In order to receive a grant 
from the Secretary under section 211(b), each eligi-
ble agency shall provide, for the costs to be incurred 
by the eligible agency in carrying out the adult basic 
skills and family literacy education programs for 
which the grant is awarded, a non-Federal contribu-
tion in an amount at least equal to— 
‘‘(A) in the case of an eligible agency serv-
ing an outlying area, 12 percent of the total 
amount of funds expended for adult basic skills 
and family literacy education programs in the 
outlying area, except that the Secretary may
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decrease the amount of funds required under 
this subparagraph for an eligible agency; and 
‘‘(B) in the case of an eligible agency serv-
ing a State, 25 percent of the total amount of 
funds expended for adult basic skills and family 
literacy education programs in the State. 
‘‘(2) NON-FEDERAL CONTRIBUTION.—An eligi-
ble agency’s non-Federal contribution required under 
paragraph (1) may be provided in cash or in kind, 
fairly evaluated, and shall include only non-Federal 
funds that are used for adult basic skills and family 
literacy education programs in a manner that is con-
sistent with the purpose of this title. 
‘‘SEC. 223. STATE LEADERSHIP ACTIVITIES. 
‘‘(a) IN GENERAL.—Each eligible agency may use 
funds made available under section 222(a)(2) for any of 
the following adult basic skills and family literacy edu-
cation programs: 
‘‘(1) The establishment or operation of profes-
sional development programs to improve the quality 
of instruction provided pursuant to local activities 
required under section 231(b), including instruction 
incorporating the essential components of reading 
instruction and instruction provided by volunteers or 
by personnel of a State or outlying area.
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‘‘(2) The provision of technical assistance to eli-
gible providers of adult basic skills and family lit-
eracy education programs for development and dis-
semination of scientific research-based instructional 
practices in reading, writing, speaking, math, and 
English language acquisition programs. 
‘‘(3) The provision of assistance to eligible pro-
viders in developing, implementing, and reporting 
measurable progress in achieving the objectives of 
this title. 
‘‘(4) The provision of technology assistance, in-
cluding staff training, to eligible providers of adult 
basic skills and family literacy education programs, 
including distance learning activities, to enable the 
eligible providers to improve the quality of such ac-
tivities. 
‘‘(5) The development and implementation of 
technology applications or distance learning, includ-
ing professional development to support the use of 
instructional technology. 
‘‘(6) Coordination with other public programs, 
including welfare-to-work, workforce development, 
and job training programs. 
‘‘(7) Coordination with existing support serv-
ices, such as transportation, child care, and other
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assistance designed to increase rates of enrollment 
in, and successful completion of, adult basic skills 
and family literacy education programs, for adults 
enrolled in such activities. 
‘‘(8) The development and implementation of a 
system to assist in the transition from adult basic 
education to postsecondary education. 
‘‘(9) Activities to promote workplace literacy 
programs. 
‘‘(10) Activities to promote and complement 
local outreach initiatives described in section 242(7). 
‘‘(11) Other activities of statewide significance, 
including assisting eligible agencies in achieving 
progress in improving the skill levels of adults who 
participate in programs under this title. 
‘‘(b) COORDINATION.—In carrying out this section, 
eligible agencies shall coordinate where possible, and avoid 
duplicating efforts, in order to maximize the impact of the 
activities described in subsection (a). 
‘‘(c) STATE-IMPOSED REQUIREMENTS.—Whenever a 
State or outlying area implements any rule or policy relat-
ing to the administration or operation of a program au-
thorized under this title that has the effect of imposing 
a requirement that is not imposed under Federal law (in-
cluding any rule or policy based on a State or outlying
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area interpretation of a Federal statute, regulation, or 
guideline), the State or outlying area shall identify, to eli-
gible providers, the rule or policy as being imposed by the 
State or outlying area. 
‘‘SEC. 224. STATE PLAN. 
‘‘(a) 6-YEAR PLANS.—
‘‘(1) IN GENERAL.—Each eligible agency desir-
ing a grant under this title for any fiscal year shall 
submit to, or have on file with, the Secretary a 6-
year State plan. 
‘‘(2) COMPREHENSIVE
PLAN
OR
APPLICA-
TION.—The eligible agency may submit the State 
plan as part of a comprehensive plan or application 
for Federal education assistance. 
‘‘(b) PLAN CONTENTS.—The eligible agency shall in-
clude in the State plan or any revisions to the State plan—
‘‘(1) an objective assessment of the needs of in-
dividuals in the State or outlying area for adult 
basic skills and family literacy education programs, 
including individuals most in need or hardest to 
serve; 
‘‘(2) a description of the adult basic skills and 
family literacy education programs that will be car-
ried out with funds received under this title;
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‘‘(3) a description of how the eligible agency 
will evaluate and measure annually the effectiveness 
and improvement of the adult basic skills and family 
literacy education programs based on the perform-
ance measures described in section 212 including—
‘‘(A) how the eligible agency will evaluate 
and measure annually such effectiveness on a 
grant-by-grant basis; and 
‘‘(B) how the eligible agency—
‘‘(i) will hold eligible providers ac-
countable regarding the progress of such 
providers 
in 
improving 
the 
academic 
achievement of participants in adult edu-
cation programs under this title and re-
garding the core indicators of performance 
described in section 212(b)(2)(A); and 
‘‘(ii) will use technical assistance, 
sanctions, and rewards (including alloca-
tion of grant funds based on performance 
and termination of grant funds based on 
nonperformance); 
‘‘(4) a description of the performance measures 
described in section 212 and how such performance 
measures have significantly improved adult basic
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skills and family literacy education programs in the 
State or outlying area; 
‘‘(5) an assurance that the eligible agency will, 
in addition to meeting all of the other requirements 
of this title, award not less than one grant under 
this title to an eligible provider that—
‘‘(A) offers flexible schedules and necessary 
support services (such as child care and trans-
portation) to enable individuals, including indi-
viduals with disabilities, or individuals with 
other special needs, to participate in adult basic 
skills and family literacy education programs; 
and 
‘‘(B) attempts to coordinate with support 
services that are not provided under this title 
prior to using funds for adult basic skills and 
family literacy education programs provided 
under this title for support services; 
‘‘(6) an assurance that the funds received under 
this title will not be expended for any purpose other 
than for activities under this title; 
‘‘(7) a description of how the eligible agency 
will fund local activities in accordance with the 
measurable goals described in section 231(d);
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‘‘(8) an assurance that the eligible agency will 
expend the funds under this title only in a manner 
consistent with fiscal requirements in section 241; 
‘‘(9) a description of the process that will be 
used for public participation and comment with re-
spect to the State plan, which process—
‘‘(A) shall include consultation with the 
State workforce investment board, the State 
board responsible for administering community 
or technical colleges, the Governor, the State 
educational agency, the State board or agency 
responsible for administering block grants for 
temporary assistance to needy families under 
title IV of the Social Security Act, the State 
council on disabilities, the State vocational re-
habilitation agency, other State agencies that 
promote the improvement of adult basic skills 
and family literacy education programs, and di-
rect providers of such programs; and 
‘‘(B) may include consultation with the 
State agency on higher education, institutions 
responsible for professional development of 
adult basic skills and family literacy education 
programs instructors, representatives of busi-
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ness and industry, refugee assistance programs, 
and faith-based organizations; 
‘‘(10) a description of the eligible agency’s 
strategies for serving populations that include, at a 
minimum—
‘‘(A) low-income individuals; 
‘‘(B) individuals with disabilities; 
‘‘(C) the unemployed; 
‘‘(D) the underemployed; and 
‘‘(E) individuals with multiple barriers to 
educational enhancement, including individuals 
with limited English proficiency; 
‘‘(11) a description of how the adult basic skills 
and family literacy education programs that will be 
carried out with any funds received under this title 
will be integrated with other adult education, career 
development, and employment and training activities 
in the State or outlying area served by the eligible 
agency; 
‘‘(12) a description of the steps the eligible 
agency will take to ensure direct and equitable ac-
cess, as required in section 231(c)(1), including—
‘‘(A) how the State will build the capacity 
of community-based and faith-based organiza-
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tions to provide adult basic skills and family lit-
eracy education programs; and 
‘‘(B) how the State will increase the par-
ticipation of business and industry in adult 
basic skills and family literacy education pro-
grams; and 
‘‘(13) a description of how the eligible agency 
will consult with any State agency responsible for 
postsecondary education to develop adult education 
that prepares students to enter postsecondary edu-
cation without the need for remediation upon com-
pletion of secondary school equivalency programs. 
‘‘(c) PLAN REVISIONS.—When changes in conditions 
or other factors require substantial revisions to an ap-
proved State plan, the eligible agency shall submit the re-
visions of the State plan to the Secretary. 
‘‘(d) CONSULTATION.—The eligible agency shall—
‘‘(1) submit the State plan, and any revisions to 
the State plan, to the Governor, the chief State 
school officer, or the State officer responsible for ad-
ministering community or technical colleges, or out-
lying area for review and comment; and 
‘‘(2) ensure that any comments regarding the 
State plan by the Governor, the chief State school 
officer, or the State officer responsible for admin-
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istering community or technical colleges, and any re-
vision to the State plan, are submitted to the Sec-
retary. 
‘‘(e) PLAN APPROVAL.—A State plan submitted to 
the Secretary shall be approved by the Secretary only if 
the plan is consistent with the specific provisions of this 
title. 
‘‘SEC. 225. PROGRAMS FOR CORRECTIONS EDUCATION AND 
OTHER INSTITUTIONALIZED INDIVIDUALS. 
‘‘(a) PROGRAM AUTHORIZED.—From funds made 
available under section 222(a)(1) for a fiscal year, each 
eligible agency shall carry out corrections education and 
education for other institutionalized individuals. 
‘‘(b) USES OF FUNDS.—The funds described in sub-
section (a) shall be used for the cost of educational pro-
grams for criminal offenders in correctional institutions 
and for other institutionalized individuals, including aca-
demic programs for—
‘‘(1) basic skills education; 
‘‘(2) special education programs as determined 
by the eligible agency; 
‘‘(3) reading, writing, speaking, and math pro-
grams; and 
‘‘(4) secondary school credit or diploma pro-
grams or their recognized equivalent.
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‘‘(c) PRIORITY.—Each eligible agency that is using 
assistance provided under this section to carry out a pro-
gram for criminal offenders within a correctional institu-
tion shall give priority to serving individuals who are likely 
to leave the correctional institution within 5 years of par-
ticipation in the program. 
‘‘(d) DEFINITIONS.—For purposes of this section: 
‘‘(1) CORRECTIONAL INSTITUTION.—The term 
‘correctional institution’ means any—
‘‘(A) prison; 
‘‘(B) jail; 
‘‘(C) reformatory; 
‘‘(D) work farm; 
‘‘(E) detention center; or 
‘‘(F) halfway house, community-based re-
habilitation center, or any other similar institu-
tion designed for the confinement or rehabilita-
tion of criminal offenders. 
‘‘(2) CRIMINAL OFFENDER.—The term ‘crimi-
nal offender’ means any individual who is charged 
with, or convicted of, any criminal offense.
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‘‘CHAPTER 3—LOCAL PROVISIONS 
‘‘SEC. 231. GRANTS AND CONTRACTS FOR ELIGIBLE PRO-
VIDERS. 
‘‘(a) GRANTS AND CONTRACTS.—From grant funds 
made available under section 211(b), each eligible agency 
shall award multiyear grants or contracts, on a competi-
tive basis, to eligible providers within the State or outlying 
area that meet the conditions and requirements of this 
title to enable the eligible providers to develop, implement, 
and improve adult basic skills and family literacy edu-
cation programs within the State. 
‘‘(b) LOCAL ACTIVITIES.—The eligible agency shall 
require eligible providers receiving a grant or contract 
under subsection (a) to establish or operate one or more 
programs of instruction that provide services or instruc-
tion in one or more of the following categories: 
‘‘(1) Adult basic skills and family literacy edu-
cation programs (including proficiency in reading, 
writing, speaking, and math). 
‘‘(2) Workplace literacy programs. 
‘‘(3) English language acquisition programs. 
‘‘(4) Family literacy education programs. 
‘‘(c) DIRECT AND EQUITABLE ACCESS; SAME PROC-
ESS.—Each eligible agency receiving funds under this title 
shall ensure that—
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‘‘(1) all eligible providers have direct and equi-
table access to apply for grants or contracts under 
this section; and 
‘‘(2) the same grant or contract announcement 
process and application process is used for all eligi-
ble providers in the State or outlying area. 
‘‘(d) MEASURABLE GOALS.—The eligible agency shall 
require eligible providers receiving a grant or contract 
under subsection (a) to demonstrate—
‘‘(1) the eligible provider’s measurable goals for 
participant outcomes to be achieved annually on the 
core indicators of performance and employment per-
formance indicators described in section 212(b)(2); 
‘‘(2) the past effectiveness of the eligible pro-
vider in improving the basic academic skills of adults 
and, for eligible providers receiving grants in the 
prior year, the success of the eligible provider receiv-
ing funding under this title in meeting or exceeding 
its performance goals in the prior year; 
‘‘(3) the commitment of the eligible provider to 
serve individuals in the community who are the most 
in need of basic academic skills instruction services, 
including individuals who are low-income or have 
minimal reading, writing, speaking, and math skills, 
or limited English proficiency;
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‘‘(4) the program—
‘‘(A) is of sufficient intensity and duration 
for participants to achieve substantial learning 
gains; and 
‘‘(B) uses instructional practices that in-
clude the essential components of reading in-
struction; 
‘‘(5) educational practices are based on scientif-
ically based research; 
‘‘(6) the activities of the eligible provider effec-
tively employ advances in technology, as appropriate, 
including the use of computers; 
‘‘(7) the activities provide instruction in real-life 
contexts, when appropriate and scientifically based, 
to ensure that an individual has the skills needed to 
compete in the workplace and exercise the rights and 
responsibilities of citizenship; 
‘‘(8) the activities are staffed by well-trained in-
structors, counselors, and administrators; 
‘‘(9) the activities are coordinated with other 
available resources in the community, such as 
through strong links with elementary schools and 
secondary schools, postsecondary educational institu-
tions, one-stop centers, job training programs, com-
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munity-based and faith-based organizations, and so-
cial service agencies; 
‘‘(10) the activities offer flexible schedules and 
support services (such as child care and transpor-
tation) that are necessary to enable individuals, in-
cluding individuals with disabilities or other special 
needs, to attend and complete programs; 
‘‘(11) the activities include a high-quality infor-
mation management system that has the capacity to 
report measurable participant outcomes and to mon-
itor program performance against the performance 
measures established by the eligible agency; 
‘‘(12) the local communities have a dem-
onstrated need for additional English language ac-
quisition programs; 
‘‘(13) the capacity of the eligible provider to 
produce valid information on performance results, 
including enrollments and measurable participant 
outcomes; 
‘‘(14) adult basic skills and family literacy edu-
cation programs offer rigorous reading, writing, 
speaking, and math content that are based on sci-
entific research; and 
‘‘(15) applications of technology, and services to 
be provided by the eligible providers, are of sufficient
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intensity and duration to increase the amount and 
quality of learning and lead to measurable learning 
gains within specified time periods. 
‘‘(e) SPECIAL RULE.—Eligible providers may use 
grant funds under this title to serve children participating 
in family literacy programs assisted under this part, pro-
vided that other sources of funds available to provide simi-
lar services for such children are used first. 
‘‘SEC. 232. LOCAL APPLICATION. 
‘‘Each eligible provider desiring a grant or contract 
under this title shall submit an application to the eligible 
agency containing such information and assurances as the 
eligible agency may require, including—
‘‘(1) a description of how funds awarded under 
this title will be spent consistent with the require-
ments of this title; 
‘‘(2) a description of any cooperative arrange-
ments the eligible provider has with other agencies, 
institutions, or organizations for the delivery of 
adult basic skills and family literacy education pro-
grams; and 
‘‘(3) each of the demonstrations required by 
section 231(d).
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‘‘SEC. 233. LOCAL ADMINISTRATIVE COST LIMITS. 
‘‘(a) IN GENERAL.—Subject to subsection (b), of the 
amount that is made available under this title to an eligi-
ble provider—
‘‘(1) at least 95 percent shall be expended for 
carrying out adult basic skills and family literacy 
education programs; and 
‘‘(2) the remaining amount shall be used for 
planning, administration, personnel and professional 
development, development of measurable goals in 
reading, writing, speaking, and math, and inter-
agency coordination. 
‘‘(b) SPECIAL RULE.—In cases where the cost limits 
described in subsection (a) are too restrictive to allow for 
adequate planning, administration, personnel develop-
ment, and interagency coordination, the eligible provider 
may negotiate with the eligible agency in order to deter-
mine an adequate level of funds to be used for noninstruc-
tional purposes. 
‘‘CHAPTER 4—GENERAL PROVISIONS 
‘‘SEC. 241. ADMINISTRATIVE PROVISIONS. 
‘‘(a) SUPPLEMENT NOT SUPPLANT.—Funds made 
available for adult basic skills and family literacy edu-
cation programs under this title shall supplement and not 
supplant other State or local public funds expended for 
adult basic skills and family literacy education programs.
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‘‘(b) MAINTENANCE OF EFFORT.—
‘‘(1) IN GENERAL.—
‘‘(A) DETERMINATION.—An eligible agency 
may receive funds under this title for any fiscal 
year if the Secretary finds that the fiscal effort 
per student or the aggregate expenditures of 
such eligible agency for activities under this 
title, in the second preceding fiscal year, were 
not less than 90 percent of the fiscal effort per 
student or the aggregate expenditures of such 
eligible agency for adult basic skills and family 
literacy education programs, in the third pre-
ceding fiscal year. 
‘‘(B) PROPORTIONATE REDUCTION.—Sub-
ject to paragraphs (2), (3), and (4), for any fis-
cal year with respect to which the Secretary de-
termines under subparagraph (A) that the fiscal 
effort or the aggregate expenditures of an eligi-
ble agency for the preceding program year were 
less than such effort or expenditures for the 
second preceding program year, the Secretary—
‘‘(i) shall determine the percentage 
decreases in such effort or in such expendi-
tures; and
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‘‘(ii) shall decrease the payment made 
under this title for such program year to 
the agency for adult basic skills and family 
literacy education programs by the lesser 
of such percentages. 
‘‘(2) COMPUTATION.—In computing the fiscal 
effort and aggregate expenditures under paragraph 
(1), the Secretary shall exclude capital expenditures 
and special one-time project costs. 
‘‘(3) DECREASE IN FEDERAL SUPPORT.—If the 
amount made available for adult basic skills and 
family literacy education programs under this title 
for a fiscal year is less than the amount made avail-
able for adult basic skills and family literacy edu-
cation programs under this title for the preceding 
fiscal year, then the fiscal effort per student and the 
aggregate expenditures of an eligible agency required 
in order to avoid a reduction under paragraph 
(1)(B) shall be decreased by the same percentage as 
the percentage decrease in the amount so made 
available. 
‘‘(4) WAIVER.—The Secretary may waive the 
requirements of this subsection for not more than 1 
fiscal year, if the Secretary determines that a waiver 
would be equitable due to exceptional or uncontrol-
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lable circumstances, such as a natural disaster or an 
unforeseen and precipitous decline in the financial 
resources of the State or outlying area of the eligible 
agency. If the Secretary grants a waiver under the 
preceding sentence for a fiscal year, the level of ef-
fort required under paragraph (1) shall not be re-
duced in the subsequent fiscal year because of the 
waiver. 
‘‘SEC. 242. NATIONAL LEADERSHIP ACTIVITIES. 
‘‘The Secretary shall establish and carry out a pro-
gram of national leadership activities that may include the 
following: 
‘‘(1) Technical assistance, on request, including 
assistance—
‘‘(A) on requests to volunteer community- 
and faith-based organizations, including but not 
limited to, improving their fiscal management, 
research-based instruction, and reporting re-
quirements, and the development of measurable 
objectives to carry out the requirements of this 
title; 
‘‘(B) in developing valid, measurable, and 
reliable performance data, and using perform-
ance information for the improvement of adult
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basic skills and family literacy education pro-
grams; 
‘‘(C) on adult education professional devel-
opment; and 
‘‘(D) in using distance learning and im-
proving the application of technology in the 
classroom. 
‘‘(2) Providing for the conduct of research on 
national literacy basic skill acquisition levels among 
adults, including the number of adults functioning at 
different levels of reading proficiency. 
‘‘(3) Improving the coordination, efficiency, and 
effectiveness of adult education and workforce devel-
opment services at the national, State, and local lev-
els. 
‘‘(4) Determining how participation in adult 
basic skills and family literacy education programs 
prepares individuals for entry into and success in 
postsecondary education and employment, and in the 
case of prison-based services, the effect on recidi-
vism. 
‘‘(5) Evaluating how different types of pro-
viders, including community and faith-based organi-
zations or private for-profit agencies measurably im-
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prove the skills of participants in adult basic skills 
and family literacy education programs. 
‘‘(6) Identifying model integrated basic and 
workplace skills education programs, coordinated lit-
eracy and employment services, and effective strate-
gies for serving adults with disabilities. 
‘‘(7) Supporting the development of an entity 
that would produce and distribute technology-based 
programs and materials for adult basic skills and 
family literacy education programs using an inter-
communication system, as that term is defined in 
section 397 of the Communications Act of 1934 (47 
U.S.C. 397), and expand the effective outreach and 
use of such programs and materials to adult edu-
cation eligible providers. 
‘‘(8) Initiating other activities designed to im-
prove the measurable quality and effectiveness of 
adult basic skills and family literacy education pro-
grams nationwide.’’.
PART B—NATIONAL INSTITUTE FOR LITERACY 
SEC. 211. SHORT TITLE; PURPOSE. 
(a) SHORT TITLE.—This part may be cited as the 
‘‘National Institute for Literacy Establishment Act’’. 
(b) PURPOSE.—The purpose of this part is to estab-
lish a National Institute for Literacy to provide national
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leadership in promoting reading research, reading instruc-
tion, and professional development in reading based on sci-
entifically based research by—
(1) disseminating widely information on sci-
entifically based reading research to improve aca-
demic achievement for children, youth, and adults; 
(2) identifying and disseminating information 
about schools, local educational agencies, and State 
educational agencies that have effectively developed 
and implemented classroom reading programs that 
meet the requirements of subpart 1 of part B of title 
I of the Elementary and Secondary Education Act 
of 1965 (20 U.S.C. 6361 et seq.), including those 
State educational agencies, local educational agen-
cies, and schools that are identified as effective 
through the External Evaluation of Reading First 
under section 1205 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 6365); 
(3) serving as a national resource for informa-
tion on reading instruction programs that contain 
the essential components of reading instruction as 
supported by scientifically based reading research, 
and that can lead to improved reading outcomes for 
children, youth, and adults;
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(4) developing print and electronic materials 
that describe and model the application of scientif-
ically based reading research; 
(5) providing national and regional reading 
leadership for State and local personnel for the ap-
plication and implementation of scientifically based 
reading research; 
(6) coordinating efforts among Federal agen-
cies, especially the Department of Labor, the De-
partment of Health and Human Services, and the 
National Institute of Child Health and Human De-
velopment, that provide reading programs, conduct 
research, and provide services to recipients of Fed-
eral financial assistance under titles I and III of the 
Elementary and Secondary Education Act of 1965, 
the Head Start Act, the Individuals with Disabilities 
Education Act, and the Adult Basic Skills and Fam-
ily Literacy Education Act, and each Bureau funded 
school (as defined in title XI of the Education 
Amendments of 1978 (25 U.S.C. 2001 et seq.)); and 
(7) informing the Congress, Federal depart-
ments and agencies, schools of education, and the 
public of successful local, State, and Federal pro-
gram activities in reading instruction that are deter-
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mined to be effective based on the findings of sci-
entifically based reading research. 
SEC. 212. ESTABLISHMENT. 
(a) IN GENERAL.—There is established the National 
Institute for Literacy. The Institute shall be administered, 
in accordance with this part, under the supervision and 
direction of a Director. There shall be an agreement be-
tween an Interagency Group (comprised of the Secretary 
of Education, the Secretary of Labor, and the Secretary 
of Health and Human Services) and the Institute on how 
the purposes of the Institute may be achieved effectively. 
Such agreement—
(1) shall be regularly reviewed, and modified as 
needed to remain current with any changes in the 
purposes of the Institute; and 
(2) shall be updated no later than 1 year after 
the enactment of this part. 
(b) DIRECTOR.—
(1) APPOINTMENT.—The Interagency Group 
shall appoint a Director of the Institute, who has an 
understanding of, supports, and is familiar with sci-
entifically based reading research, instruction, and 
professional development applicable to children, 
youth, and adults. If a vacancy in the position of the 
Director of the Institute occurs, the Interagency
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Group shall appoint an Interim Director until such 
time as a new Director can be appointed. 
(2) PAY.—The Director of the Institute shall 
receive the rate of basic pay for level IV of the Exec-
utive Schedule. 
(3) TERM.—The Director of the Institute shall 
be appointed for an initial term of 3 years and may 
serve not more than 1 additional term of 3 years. 
SEC. 213. ADMINISTRATION. 
(a) IN GENERAL.—The Director of the Institute shall 
be responsible for administering the Institute. The Direc-
tor of the Institute shall—
(1) provide leadership for the Institute, con-
sistent with the purposes described in section 
211(b); 
(2) supervise all employees in the Institute; 
(3) assign responsibility to carry out the duties 
of the Institute among officers ad employees, and of-
fices of the Institute; 
(4) prepare requests for appropriations for the 
Institute and submit those requests to the Inter-
agency Group; 
(5) oversee the expenditure of all funds allo-
cated for the Institute to carry out the purposes 
under section 211(b); and
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(6) ensure that the Institute’s standards for re-
search quality are consistent with those promulgated 
by the Institute for Education Sciences. 
(b) OFFICES.—The Institute shall have separate of-
fices from the Department of Education, the Department 
of Labor, and the Department of Health and Human 
Services, and shall have maximum flexibility in its oper-
ations to carry out the purposes of the Institute. 
(c) ADMINISTRATIVE SUPPORT.—The Secretary of 
Education shall provide administrative support for the In-
stitute, including the administration of grants, contracts 
and cooperative agreements, personnel, legal counsel, and 
payroll. 
SEC. 214. DUTIES. 
(a) IN GENERAL.—In order to provide leadership for 
the improvement and expansion of the system for delivery 
of scientifically based reading instructional practices, the 
Director of the Institute shall—
(1) establish a national electronic database of 
effective reading programs for children, youth, and 
adults that include the essential components of read-
ing instruction, and disseminate such information to 
parents, teachers, State and Federal elected officials, 
and the public;
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(2) develop print and electronic materials for 
professional development that provide applications of 
scientifically based reading research, and instruc-
tional practices in reading for children, youth, and 
adults; 
(3) provide technical assistance to the Congress, 
school Boards, Federal agencies, State departments 
of education, adult education programs, local school 
districts, local public and private schools, and 
schools of education, on scientifically based reading 
instructional practices including diagnostic and as-
sessment instruments and instructional materials; 
(4) collaborate and support Federal research 
programs in reading instruction, including, where 
appropriate, those areas of study addressed by the 
National Institute of Child Health and Human De-
velopment, the Institute for Education Sciences, the 
National Science Foundation, the Department of 
Labor, and the National Research Council; 
(5) coordinate with the Department of Edu-
cation, the Department of Labor, the Department of 
Health and Human Services, and the National Insti-
tute of Child Health and Human Development on all 
programs that include improving reading instruc-
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tional practices for children, youth, and adults, and 
teacher training in reading instructional practices; 
(6) use and support the collection of the best 
possible information in carrying out this section, and 
where appropriate, including reviews of research on 
instruction using the criteria for quality identified by 
the Institute for Education Sciences; 
(7) conduct reviews of research, including ran-
domized field trials, on reading programs, and con-
duct reviews of Federal reading policies and reading 
program implementation using a board of visitors as 
described in subchapter 300 of the National Science 
Foundation Administrative Manual; and 
(8) develop an Internet site that provides useful 
information to educators and the public on reading 
literacy that is consistent with the purposes de-
scribed in section 211(b). 
(b) 
GRANTS, 
CONTRACTS, 
AND
COOPERATIVE 
AGREEMENTS.—The Institute may award grants to, or 
enter into contracts or cooperative agreements with, indi-
viduals, public or private institutions, agencies, organiza-
tions, or other legal entities to carry out the activities of 
the Institute. 
(c) RELATION TO OTHER LAWS.—The duties and 
powers of the Institute under this part are in addition to
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the duties and powers of the Institute under subparts 1, 
2, and 3 of part B of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 1201 et seq.) (commonly 
referred to as Reading First, Early Reading First, and 
the William F. Goodling Even Start Family Literacy Pro-
grams, respectively). 
SEC. 215. LEADERSHIP IN SCIENTIFICALLY BASED READ-
ING INSTRUCTION. 
(a) IN GENERAL.—The Director of the Institute may 
award fellowships, with such stipends and allowances as 
necessary, to outstanding individuals who are pursuing ca-
reers in scientifically based research in reading instruction 
or pre-service or in-service training in reading instruction, 
including teaching children and adults to read. 
(b) FELLOWSHIPS.—Fellowships awarded under this 
subsection shall be used, under the auspices of the Insti-
tute, to engage in research, education training, technical 
assistance, or other activities to advance the field of sci-
entifically based reading instruction for children, youth, 
and adults, including the training of volunteers in such 
reading skills instruction. 
(c) INTERNS AND VOLUNTEERS.—The Director of 
the Institute may award paid and unpaid internships to 
individuals seeking to assist the Institute in carrying out 
its mission. Notwithstanding section 1342 of title 31,
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United States Code, the Institute may accept and use vol-
untary and uncompensated services as the Institute deems 
necessary. 
SEC. 216. NATIONAL INSTITUTE FOR LITERACY ADVISORY 
BOARD. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—There shall be a National 
Institute for Literacy Advisory Board, which shall 
consist of 10 individuals appointed by the President 
with the advice and consent of the Senate. 
(2) COMPOSITION.—The Board shall be com-
prised of individuals who are not otherwise officers 
or employees of the Federal Government and who 
are knowledgeable about scientifically based reading 
instruction, and the findings of scientifically based 
reading research. The members of the Board may 
include—
(A) representatives from teacher training 
institutions where scientifically based reading 
instruction is a major component of pre-service 
training; 
(B) teachers who have been successful in 
teaching children to read proficiently;
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(C) members of the business community 
who have developed successful employee reading 
instruction programs; 
(D) volunteer tutors in reading who are 
using scientifically based reading instruction; 
(E) reading researchers who have con-
ducted scientifically based research; and 
(F) other qualified individuals knowledge-
able about scientifically based reading instruc-
tion, including adult education. 
(b) DUTIES.—The Board shall—
(1) provide advice to the Director of the Insti-
tute to ensure that the purposes of the Institute 
under section 211 are carried out effectively; and 
(2) approve the annual report to the Congress; 
(c) FEDERAL ADVISORY COMMITTEE ACT.—Except 
as otherwise provided in this part, the Board established 
by this section shall be subject to the provisions of the 
Federal Advisory Committee Act (5 U.S.C. App.). 
(d) APPOINTMENTS.—
(1) IN GENERAL.—Each member of the Board 
shall be appointed for a term of 3 years, except that 
the initial terms for members may be 1, 2, or 3 
years in order to establish a rotation, in which 1⁄3 
of the members are selected each year. Any such
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member may be appointed for not more than 2 con-
secutive terms. 
(2) VACANCIES.—Any member appointed to fill 
a vacancy occurring before the expiration of the 
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of 
that term. A member may serve after the expiration 
of that member’s term until a successor has taken 
office. 
(e) QUORUM.—A majority of the members of the 
Board shall constitute a quorum, but a lesser number may 
hold hearings. Any recommendation of the Board may be 
passed only by a majority of the Board members present. 
(f) ELECTION OF OFFICERS.—The Chairperson and 
Vice Chairperson of the Board shall be elected by the 
members of the Board. The term of office of the Chair-
person and Vice Chairperson shall be 2 years. 
(g) MEETINGS.—The Board shall meet at the call of 
the Chairperson, or a majority of the members of the 
Board, but not less than quarterly. 
SEC. 217. GIFTS, BEQUESTS, AND DEVISES. 
(a) IN GENERAL.—The Institute may accept, admin-
ister, and use gifts or donations of services, money, or 
property, whether real or personal, tangible or intangible.
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(b) RULES.—The Director of the Institute shall es-
tablish written rules setting forth the criteria to be used 
by the Institute in determining whether the acceptance of 
contributions of services, money, or property whether real 
or personal, tangible or intangible, would reflect unfavor-
ably upon the ability of the Institute or any employee to 
carry out the responsibilities of the Institute or employee, 
or official duties, in a fair and objective manner, or would 
compromise the integrity or the appearance of the integ-
rity of the Institute’s programs or any official involved in 
those programs. 
SEC. 218. MAILS. 
The Board and the Institute may use the United 
States mails in the same manner and under the same con-
ditions as other departments and agencies of the United 
States. 
SEC. 219. APPLICABILITY OF CERTAIN CIVIL SERVICE 
LAWS. 
The Director of the Institute and the staff of the In-
stitute may be appointed without regard to the provisions 
of title 5, United States Code, governing appointments in 
the competitive service, and may be paid without regard 
to the provisions of chapter 51 and subchapter III of chap-
ter 53 of that title relating to classification and General 
Schedule pay rates, except that an individual so appointed
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may not receive pay in excess of the annual rate of basic 
pay payable for level IV of the Executive Schedule. 
SEC. 220. EXPERTS AND CONSULTANTS. 
The Institute may procure temporary and intermit-
tent services under section 3109(b) of title 5, United 
States Code. 
SEC. 221. REPORT. 
(a) IN GENERAL.—The Institute shall submit a bien-
nial report to the Committee on Education and the Work-
force of the House of Representatives and the Committee 
on Health, Education, Labor, and Pensions of the Senate. 
Each report submitted under this section shall include—
(1) a comprehensive and detailed description of 
the Institute’s operations, activities, financial condi-
tion, and accomplishments in carrying out the pur-
poses of the Institute as specified in section 211, for 
the period covered by the report; and 
(2) a summary description of how the Institute 
will advance the purposes of the Institute for the 
next biennium. 
(b) FIRST REPORT.—The Institute shall submit a re-
port under this section not later than 1 year after the date 
of enactment of this part. 
SEC. 222. DEFINITIONS. 
For purposes of this part—
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(1) the term ‘‘Board’’ means the National Insti-
tute for Literacy Advisory Board; 
(2) the term ‘‘Institute’’ means the National In-
stitute for Literacy; 
(3) the term ‘‘Interagency Group’’ means the 
Secretary of Education, the Secretary of Labor, and 
the Secretary of Health and Human Services; 
(4) the term ‘‘literacy’’ means the ability to 
read, write, and speak the English language with 
competence, knowledge, and comprehension; and 
(5) the terms ‘‘reading’’, ‘‘scientifically based 
reading research’’, and ‘‘essential components of 
reading instruction’’ have the meanings given those 
terms in section 1208 of part B of title I of the Ele-
mentary and Secondary Education Act of 1965 (20 
U.S.C. 6368). 
SEC. 223. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to admin-
ister and carry out this part $6,700,000 for fiscal year 
2004 and such sums as may be necessary for each of the 
5 succeeding fiscal years. 
SEC. 224. RESERVATION. 
From amounts appropriated to the Institute, the Di-
rector of the Institute may use not more than 5 percent 
of such amounts for the administration of information dis-
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semination under section 1207 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 6367). 
SEC. 225. AUTHORITY TO PUBLISH. 
The Institute, including the Board, may prepare, 
publish, and present (including through oral presen-
tations) such research-based information and research re-
ports as needed to carry out the purposes and mission of 
the Institute. 
PART C—GENERAL PROVISIONS 
SEC. 241. TRANSITION. 
The Secretary shall take such actions as the Sec-
retary determines to be appropriate to provide for the or-
derly implementation of this title. 
TITLE III—AMENDMENTS TO 
THE WAGNER-PEYSER ACT 
SEC. 301. AMENDMENTS TO THE WAGNER-PEYSER ACT. 
The Wagner-Peyser Act (29 U.S.C. 49 et. seq.) is 
amended—
(1) by striking sections 1 through 13; 
(2) in section 14 by inserting ‘‘of Labor’’ after 
‘‘Secretary’’; and 
(3) by amending section 15 to read as follows: 
‘‘SEC. 15. WORKFORCE AND LABOR MARKET INFORMATION 
SYSTEM. 
‘‘(a) SYSTEM CONTENT.—
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‘‘(1) IN GENERAL.—The Secretary of Labor, in 
accordance with the provisions of this section, shall 
oversee the development, maintenance, and contin-
uous improvement of a nationwide workforce and 
labor market information system that includes—
‘‘(A) statistical data from cooperative sta-
tistical survey and projection programs and 
data from administrative reporting systems 
that, taken together, enumerate, estimate, and 
project employment opportunities and condi-
tions at national, State, and local levels in a 
timely manner, including statistics on—
‘‘(i) employment and unemployment 
status of national, State, and local popu-
lations, including self-employed, part-time, 
and seasonal workers; 
‘‘(ii) industrial distribution of occupa-
tions, as well as current and projected em-
ployment opportunities, wages, benefits 
(where data is available), and skill trends 
by occupation and industry, with particular 
attention paid to State and local condi-
tions; 
‘‘(iii) the incidence of, industrial and 
geographical location of, and number of
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workers displaced by, permanent layoffs 
and plant closings; and 
‘‘(iv) employment and earnings infor-
mation maintained in a longitudinal man-
ner to be used for research and program 
evaluation; 
‘‘(B) information on State and local em-
ployment opportunities, and other appropriate 
statistical data related to labor market dynam-
ics, which—
‘‘(i) shall be current and comprehen-
sive; 
‘‘(ii) shall meet the needs identified 
through the consultations described in sub-
paragraphs (A) and (B) of subsection 
(e)(2); and 
‘‘(iii) shall meet the needs for the in-
formation identified in section 134(d); 
‘‘(C) technical standards (which the Sec-
retary shall publish annually) for data and in-
formation described in subparagraphs (A) and 
(B) that, at a minimum, meet the criteria of 
chapter 35 of title 44, United States Code; 
‘‘(D) procedures to ensure compatibility 
and additivity of the data and information de-
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scribed in subparagraphs (A) and (B) from na-
tional, State, and local levels; 
‘‘(E) procedures to support standardization 
and aggregation of data from administrative re-
porting systems described in subparagraph (A) 
of employment-related programs; 
‘‘(F) analysis of data and information de-
scribed in subparagraphs (A) and (B) for uses 
such as—
‘‘(i) national, State, and local policy-
making; 
‘‘(ii) implementation of Federal poli-
cies (including allocation formulas); 
‘‘(iii) program planning and evalua-
tion; and 
‘‘(iv) researching labor market dynam-
ics; 
‘‘(G) wide dissemination of such data, in-
formation, and analysis in a user-friendly man-
ner and voluntary technical standards for dis-
semination mechanisms; and 
‘‘(H) programs of—
‘‘(i) training for effective data dis-
semination; 
‘‘(ii) research and demonstration; and
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‘‘(iii) programs and technical assist-
ance. 
‘‘(2) INFORMATION TO BE CONFIDENTIAL.—
‘‘(A) IN
GENERAL.—No officer or em-
ployee of the Federal Government or agent of 
the Federal Government may—
‘‘(i) use any submission that is fur-
nished for exclusively statistical purposes 
under the provisions of this section for any 
purpose other than the statistical purposes 
for which the submission is furnished; 
‘‘(ii) make any publication or media 
transmittal of the data contained in the 
submission described in clause (i) that per-
mits information concerning individual 
subjects to be reasonably inferred by either 
direct or indirect means; or 
‘‘(iii) permit anyone other than a 
sworn officer, employee, or agent of any 
Federal department or agency, or a con-
tractor (including an employee of a con-
tractor) of such department or agency, to 
examine an individual submission described 
in clause (i);
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without the consent of the individual, agency, or 
other person who is the subject of the submis-
sion or provides that submission. 
‘‘(B) IMMUNITY FROM LEGAL PROCESS.—
Any submission (including any data derived 
from the submission) that is collected and re-
tained by a Federal department or agency, or 
an officer, employee, agent, or contractor of 
such a department or agency, for exclusively 
statistical purposes under this section shall be 
immune from the legal process and shall not, 
without the consent of the individual, agency, or 
other person who is the subject of the submis-
sion or provides that submission, be admitted 
as evidence or used for any purpose in any ac-
tion, suit, or other judicial or administrative 
proceeding. 
‘‘(C) RULE OF CONSTRUCTION.—Nothing 
in this section shall be construed to provide im-
munity from the legal process for such submis-
sion (including any data derived from the sub-
mission) if the submission is in the possession 
of any person, agency, or entity other than the 
Federal Government or an officer, employee, 
agent, or contractor of the Federal Government,
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or if the submission is independently collected, 
retained, or produced for purposes other than 
the purposes of this Act. 
‘‘(b) SYSTEM RESPONSIBILITIES.—
‘‘(1) IN GENERAL.—The workforce and labor 
market information system described in subsection 
(a) shall be planned, administered, overseen, and 
evaluated through a cooperative governance struc-
ture involving the Federal Government and States. 
‘‘(2) DUTIES.—The Secretary, with respect to 
data collection, analysis, and dissemination of labor 
employment statistics for the system, shall carry out 
the following duties: 
‘‘(A) Assign responsibilities within the De-
partment of Labor for elements of the work-
force and labor market information system de-
scribed in subsection (a) to ensure that all sta-
tistical and administrative data collected is con-
sistent with appropriate Bureau of Labor Sta-
tistics standards and definitions. 
‘‘(B) Actively seek the cooperation of other 
Federal agencies to establish and maintain 
mechanisms for ensuring complementarity and 
nonduplication in the development and oper-
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ation of statistical and administrative data col-
lection activities. 
‘‘(C) Eliminate gaps and duplication in 
statistical undertakings, with the systemization 
of wage surveys as an early priority. 
‘‘(D) In collaboration with the Bureau of 
Labor Statistics and States, develop and main-
tain the elements of the workforce and labor 
market information system described in sub-
section (a), including the development of con-
sistent procedures and definitions for use by the 
States in collecting the data and information 
described in subparagraphs (A) and (B) of sub-
section (a)(1). 
‘‘(E) Establish procedures for the system 
to ensure that—
‘‘(i) such data and information are 
timely; 
‘‘(ii) paperwork and reporting for the 
system are reduced to a minimum; and 
‘‘(iii) States and localities are fully in-
volved in the development and continuous 
improvement of the system at all levels, in-
cluding ensuring the provision, to such 
States and localities, of budget information
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necessary for carrying out their respon-
sibilities under subsection (e). 
‘‘(c) NATIONAL ELECTRONIC TOOLS TO PROVIDE 
SERVICES.—The Secretary is authorized to assist in the 
development of national electronic tools that may be used 
to facilitate the delivery of core services described in sec-
tion 134 and to provide workforce information to individ-
uals through the one-stop delivery systems descried in sec-
tion 121 and through other appropriate delivery systems. 
‘‘(d) COORDINATION WITH THE STATES.—
‘‘(1) IN
GENERAL.—The Secretary, working 
through the Bureau of Labor Statistics and the Em-
ployment and Training Administration, shall regu-
larly consult with representatives of State agencies 
carrying out workforce information activities regard-
ing strategies for improving the workforce and labor 
market information system. 
‘‘(2) FORMAL CONSULTATIONS.—At least twice 
each year, the Secretary, working through the Bu-
reau of Labor Statistics, shall conduct formal con-
sultations regarding programs carried out by the 
Bureau of Labor Statistics with representatives of 
each of the 10 Federal regions of the Department of 
Labor, elected from the State directors affiliated
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with State agencies that perform the duties de-
scribed in subsection (e)(2). 
‘‘(e) STATE RESPONSIBILITIES.—
‘‘(1) DESIGNATION
OF
STATE
AGENCY.—In 
order to receive Federal financial assistance under 
this section, the Governor of a State shall—
‘‘(A) designate a single State agency to be 
responsible for the management of the portions 
of the workforce and labor market information 
system described in subsection (a) that com-
prise a statewide workforce and labor market 
information system and for the State’s partici-
pation in the development of the annual plan; 
and 
‘‘(B) establish a process for the oversight 
of such system. 
‘‘(2) DUTIES.—In order to receive Federal fi-
nancial assistance under this section, the State agen-
cy shall—
‘‘(A) consult with State and local employ-
ers, participants, and local workforce invest-
ment boards about the labor market relevance 
of the data to be collected and disseminated 
through the statewide workforce and labor mar-
ket information system;
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‘‘(B) consult with State educational agen-
cies and local educational agencies concerning 
the provision of employment statistics in order 
to meet the needs of secondary school and post-
secondary school students who seek such infor-
mation; 
‘‘(C) collect and disseminate for the sys-
tem, on behalf of the State and localities in the 
State, the information and data described in 
subparagraphs (A) and (B) of subsection 
(a)(1); 
‘‘(D) maintain and continuously improve 
the statewide workforce and labor market infor-
mation system in accordance with this section; 
‘‘(E) perform contract and grant respon-
sibilities for data collection, analysis, and dis-
semination for such system; 
‘‘(F) conduct such other data collection, 
analysis, and dissemination activities as will en-
sure an effective statewide workforce and labor 
market information system; 
‘‘(G) actively seek the participation of 
other State and local agencies in data collec-
tion, analysis, and dissemination activities in
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order to ensure complementarity, compatibility, 
and usefulness of data; 
‘‘(H) participate in the development of the 
annual plan described in subsection (c); and 
‘‘(I) utilize the quarterly records described 
in section 136(f )(2) of the Workforce Invest-
ment Act of 1998 to assist the State and other 
States in measuring State progress on State 
performance measures. 
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in 
this section shall be construed as limiting the ability 
of a State agency to conduct additional data collec-
tion, analysis, and dissemination activities with 
State funds or with Federal funds from sources 
other than this section. 
‘‘(f) NONDUPLICATION REQUIREMENT.—None of the 
functions and activities carried out pursuant to this sec-
tion shall duplicate the functions and activities carried out 
under the Carl D. Perkins Vocational and Applied Tech-
nology Education Act (20 U.S.C. 2301 et seq.). 
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for each of the fiscal years 
2004 through 2009.
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‘‘(h) DEFINITION.—In this section, the term ‘local 
area’ means the smallest geographical area for which data 
can be produced with statistical reliability.’’. 
TITLE IV—AMENDMENTS TO THE 
REHABILITATION ACT OF 1973
SEC. 401. CHAIRPERSON. 
Section 705(b)(5) of the Rehabilitation Act of 1973 
(29 U.S.C. 796d(b)(5)) is amended to read as follows: 
‘‘(5) CHAIRPERSON.—The Council shall select a 
chairperson from among the voting membership of 
the Council.’’. 
SEC. 402. REHABILITATION SERVICES ADMINISTRATION. 
Section 3(a) of the Rehabilitation Act of 1973 (29 
U.S.C. 702(a)) is amended—
(1) by striking ‘‘Office of the Secretary’’ and 
inserting ‘‘Department of Education’’; 
(2) by striking ‘‘President by and with the ad-
vice and consent of the Senate’’ and inserting ‘‘Sec-
retary, except that the current Commissioner ap-
pointed under the authority existing on the day prior 
to the date of enactment of this Act may continue 
to serve in the former capacity’’; and 
(3) by striking ‘‘, and the Commissioner shall 
be the principal officer,’’.
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SEC. 403. DIRECTOR. 
(a) IN GENERAL.—The Rehabilitation Act of 1973 
(29 U.S.C. 701 et seq.) is amended by striking ‘‘Commis-
sioner’’ each place it appears, except in section 21, and 
inserting ‘‘Director’’. 
(b) EXCEPTION.—Section 21 of the Rehabilitation 
Act of 1973 (29 U.S.C. 718) is amended—
(1) in subsection (b)(1)—
(A) by striking ‘‘Commissioner’’ the first 
place it appears and inserting ‘‘Director of the 
Rehabilitation Services Administration’’; and 
(B) by striking ‘‘(referred to in this sub-
section as the ‘Director’) ’’; and 
(2) by striking ‘‘Commissioner and the Direc-
tor’’ each place it appears and inserting ‘‘both such 
Directors’’. 
SEC. 404. STATE GOALS. 
Section 101(a) of the Rehabilitation Act of 1973 (29 
U.S.C. 721(a)) is amended—
(1) in paragraph (11)(D)(i) by inserting ‘‘, 
which may be provided using alternative means of 
meeting participation (such as video conferences and 
conference calls)’’ before the semicolon; and 
(2) in paragraph (15)—
(A) in subparagraph (A), by redesignating 
clauses (ii) and (iii) as clauses (iii) and (iv), re-
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spectively, and inserting after clause (i) the fol-
lowing: 
‘‘(ii) include an assessment of the 
transition services provided under this Act, 
and coordinated with transition services 
under the Individuals with Disabilities 
Education Act, as to those services meet-
ing the needs of individuals with disabil-
ities.’’; and 
(B) by amending subparagraph (D)(i) to 
read as follows: 
‘‘(i) the methods to be used to expand 
and improve the services to individuals 
with disabilities including—
‘‘(I) how a broad range of assist-
ive technology services and assistive 
technology devices will be provided to 
such individuals at each stage of the 
rehabilitative process and how such 
services and devices will be provided 
to such individuals on a statewide 
basis; and 
‘‘(II) how transition services will 
be better coordinated with those serv-
ices under the Individuals with Dis-
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abilities Education Act in order to im-
prove transition services for individ-
uals with disabilities served under this 
Act;’’. 
SEC. 405. AUTHORIZATIONS OF APPROPRIATIONS. 
The Rehabilitation Act of 1973 is further amended—
(1) in section 100(b)(1) by striking ‘‘fiscal 
years 1999 through 2003’’ and inserting ‘‘fiscal 
years 2004 through 2009’’; 
(2) in section 100(d)(1)(B) by striking ‘‘fiscal 
year 2003’’ and inserting ‘‘fiscal year 2009’’; 
(3) in section 110(c) by amending paragraph 
(2) to read as follows: 
‘‘(2) The sum referred to in paragraph (1) shall 
be, as determined by the Secretary, not less than 1 
percent and not more than 1.5 percent of the 
amount referred to in paragraph (1) for each of fis-
cal years 2003 through 2009.’’; 
(4) in section 112(h) by striking ‘‘fiscal years 
1999 through 2003’’ and inserting ‘‘fiscal years 
2004 through 2009’’; 
(5) in section 201(a) by striking ‘‘fiscal years 
1999 through 2003’’ each place it appears and in-
serting ‘‘fiscal years 2004 through 2009’’;