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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. 130. 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 
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
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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 
conditions relating the implementation of such 
waivers.’’. 
SEC. 131. GENERAL PROGRAM REQUIREMENTS. 
Section 195 (29 U.S.C. 2945) is amended by adding 
at the end the following new paragraphs: 
‘‘(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. 
‘‘(15) Any report required to be submitted to 
Congress, or to a Committee of Congress, under this 
title shall be submitted to both the chairmen and 
ranking minority members of the Committee on
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Education and the Workforce of the House of Rep-
resentatives and the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate.’’. 
TITLE 
II—ADULT 
EDUCATION, 
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 EDUCATION, 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 
‘‘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 
individuals. 
‘‘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 Institute for Literacy. 
‘‘Sec. 243. National leadership activities.’’.
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SEC. 202. AMENDMENT. 
Title II (29 U.S.C. 2901 et seq.) is amended to read 
as follows: 
‘‘TITLE II—ADULT EDUCATION, 
BASIC SKILLS, AND FAMILY 
LITERACY EDUCATION 
‘‘SEC. 201. SHORT TITLE. 
‘‘This title may be cited as the ‘Adult Education, 
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 literacy 
skills, including their basic reading, writing, speaking, and 
math skills, and support States and local communities in 
providing, on a voluntary basis, adult education, basic 
skills, and family literacy education programs, in order 
to— 
‘‘(1) increase the literacy of adults, including 
the basic reading, writing, speaking, and math skills, 
to a level of proficiency necessary for adults to ob-
tain employment and self-sufficiency and to success-
fully 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;
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‘‘(3) assist adults who are parents to enable 
them to support the educational development of their 
children and make informed choices regarding their 
children’s education including, through instruction in 
basic reading, writing, speaking, and math skills; 
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 EDUCATION, BASIC SKILLS, AND 
FAMILY
LITERACY
EDUCATION
PROGRAMS.—The 
term ‘adult education, basic skills, and family lit-
eracy education programs’ means a sequence of aca-
demic instruction and educational services below the 
postsecondary level that increase an individual’s abil-
ity to read, write, and speak in English and perform 
mathematical computations leading to a level of pro-
ficiency equivalent to at least a secondary school 
completion that is provided for individuals— 
‘‘(A) who are at least 16 years of age;
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‘‘(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, General Educational Development 
credential (GED), or other State-recog-
nized equivalent and have not achieved an 
equivalent 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 primary entity or agency 
in a State or an outlying area responsible for 
administering or supervising policy for adult 
education, basic skills, and family literacy edu-
cation programs in the State or outlying area, 
respectively, consistent with the law of the 
State or outlying area, respectively; and
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‘‘(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 education, basic 
skills, and family literacy education programs to 
adults and families; or 
‘‘(I) a consortium of the agencies, organi-
zations, institutions, libraries, or authorities de-
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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. 
‘‘(6) 
FAMILY
LITERACY
EDUCATION
PRO-
GRAM.—The term ‘family literacy education pro-
gram’ means an educational program that— 
‘‘(A) assists parents and students, on a 
voluntary basis, in achieving the purposes of 
this title as described in section 202; and 
‘‘(B) is of sufficient intensity in terms of 
hours and of sufficient duration to make sus-
tainable changes in a family, is based upon sci-
entific research-based principles, and, for the 
purpose of substantially increasing the ability of
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parents and children to read, write, and speak 
English, integrates— 
‘‘(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). 
‘‘(B) INDIVIDUALS WITH DISABILITIES.— 
The term ‘individuals with disabilities’ means 
more than one individual with a disability.
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‘‘(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. 
‘‘(11) LITERACY.—The term ‘literacy’ means an 
individual’s ability to read, write, and speak in 
English, compute, and solve problems at a level of 
proficiency necessary to obtain employment and to 
successfully make the transition to postsecondary 
education. 
‘‘(12) LOCAL
EDUCATIONAL
AGENCY.—The 
term ‘local educational agency’ has the meaning 
given to that term in section 9101 of the Elemen-
tary and Secondary Education Act of 1965.
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‘‘(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. 
‘‘(16) SCIENTIFICALLY
BASED
RESEARCH.— 
The term ‘scientifically based research’ has the 
meaning given to that term in section 9101 of the 
Elementary and Secondary Education Act of 1965. 
‘‘(17) 
SECRETARY.—The 
term 
‘Secretary’ 
means the Secretary of Education.
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‘‘(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) 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-
eracy education program, or an adult education, basic 
skills, and family literacy education program.
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‘‘SEC. 205. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this title $590,127,000 for fiscal year 2006 and such sums 
as may be necessary for fiscal years 2007 through 2011. 
‘‘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 up to 1.72 percent for incen-
tive grants under section 213; 
‘‘(2) shall reserve 1.75 percent to carry out sec-
tion 242; and 
‘‘(3) shall reserve up to 1.55 percent to carry 
out section 243. 
‘‘(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 
(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).
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‘‘(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 
area served by the eligible agency bears to the num-
ber of such adults in all States and outlying areas.
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‘‘(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, 
General Educational Development credential (GED), 
or other State-recognized equivalent; 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 Palau, 
the Secretary shall award grants to Guam, American 
Samoa, the Commonwealth of the Northern Mariana 
Islands, or the Republic of Palau to carry out activi-
ties described in this title in accordance with 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 
Palau shall be eligible to receive a grant under this 
title until an agreement for the extension of United 
States education assistance under the Compact of
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Free Association for the Republic of Palau becomes 
effective. 
‘‘(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 2006 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. 
‘‘(2) EXCEPTION.—An eligible agency that re-
ceives for the preceding fiscal year only an initial al-
lotment under subsection (c)(1) (and no additional 
allotment under subsection (c)(2)) shall receive an 
allotment equal to 100 percent of the initial allot-
ment. 
‘‘(3) RATABLE REDUCTION.—If for any fiscal 
year the amount available for allotment under this 
title is insufficient to satisfy the provisions of para-
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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 education, basic skills, 
and family literacy education programs funded under this 
title, in order to optimize the return on investment of Fed-
eral funds in adult education, basic skills, and family lit-
eracy education programs. 
‘‘(b) ELIGIBLE
AGENCY
PERFORMANCE
MEAS-
URES.—
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‘‘(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 lit-
eracy, including basic skill levels in read-
ing, writing, and speaking the English lan-
guage and basic math, leading to pro-
ficiency in each skill. 
‘‘(ii) Receipt of a secondary school di-
ploma, General Educational Development 
credential (GED), or other State-recog-
nized equivalent.
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‘‘(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. 
‘‘(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 edu-
cation, basic skills, and family literacy edu-
cation programs authorized under this 
title. The levels of performance established 
under this subparagraph shall, at a min-
imum—
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‘‘(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 education, basic 
skills, and family literacy education pro-
grams authorized under this title, the Sec-
retary and each eligible agency shall reach 
agreement on levels of student perform-
ance for each of the core indicators of per-
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formance, for the first 3 program years 
covered by the State plan, taking into ac-
count the levels identified 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 eli-
gible agency adjusted levels of performance 
for the eligible agency for such years and 
shall be incorporated into the State plan 
prior to the approval 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-
cant improvement in performance on 
the student proficiency measures used 
by such eligible agency and ensure op-
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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 
performance 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 
may request that the eligible agency ad-
justed levels of performance agreed to 
under clause (iii) or (v) be revised.