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 2005,
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 Job Training Improvement
Act of 2005) and under reemployment
service grants received by the State in-
volved for fiscal year 2005.
‘‘(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 41⁄2 percent of the ci-
vilian 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-
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
‘‘(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—
‘‘(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 2005.
‘‘(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 Job Training
Improvement Act of 2005) that were
applicable to the allotment of funds
under such section for fiscal year
2005.
‘‘(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 Job Training
Improvement Act of 2005) that were
applicable to the allotment of funds
under such section for fiscal year
2005.
‘‘(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 Job Training Improvement Act
of 2005) that were applicable to the
allotment of funds under such Act for
fiscal year 2005.
‘‘(IV) The requirements for the
allotment of funds to the States that
were established by the Secretary for
Reemployment Services Grants that
were applicable to the allotment of
funds for such grants for fiscal year
2005.
‘‘(iii) PROPORTIONATE
APPLICATION
OF
UNCONSOLIDATED
FORMULAS
BASED
ON FISCAL YEAR 2005.—In calculating the
amount under clause (i)(II), each of the
unconsolidated 
formulas 
identified 
in
clause (ii) shall be applied, respectively,
only to the proportionate share of the total
amount of funds available for allotment
under subsection (b)(2) for a fiscal year
that is equal to the proportionate share to
which each of the unconsolidated formulas
applied with respect to the total amount of
funds allotted to the States under all of
the unconsolidated formulas in fiscal year
2005.
‘‘(iv) RULE OF CONSTRUCTION.—The
amounts used to adjust the allotments to a
State under subparagraph (B) for a fiscal
year shall not be included in the calcula-
tion of the amounts under clause (i) for a
subsequent fiscal year, including the cal-
culation of allocation percentages for a
preceding fiscal year applicable to para-
graphs (3) and (4) and to the unconsoli-
dated formulas described in clause (ii).’’.
(3) REALLOTMENT.—Section 132(c) (29 U.S.C.
2862(c)) is amended—
(A) by amending paragraph (2) to read as
follows:
‘‘(2) AMOUNT.—The amount available for real-
lotment for a program year is equal to the amount
by which the unexpended balance at the end of the
program year prior to the program year for which
the determination is made exceeds 30 percent of the
total amount of funds available to the State under
this section during such prior program year (includ-
ing amounts allotted to the State in all prior pro-
gram years that remained available). For purposes
of this paragraph, the expended balance is the
amount that is the difference between—
‘‘(A) the total amount of funds available to
the State under this section during the program
year prior to the program year for which the
determination is made (including amounts allot-
ted to the State in all prior program years that
remained available); and
‘‘(B) the accrued expenditures during such
prior program year.’’;
(B) in paragraph (3)—
(i) by striking ‘‘for the prior program
year’’ and inserting ‘‘for the program year
in which the determination is made’’; and
(ii) by striking ‘‘such prior program
year’’ and inserting ‘‘such program year’’;
(C) by amending paragraph (4) to read as
follows:
‘‘(4) ELIGIBILITY.—For purposes of this sub-
section, an eligible State means a State that does
not have an amount available for reallotment under
paragraph (2) for the program year for which the
determination under paragraph (2) is made.’’; and
(D) in paragraph (5), by striking ‘‘obliga-
tion’’ and inserting ‘‘accrued expenditure’’.
(d) WITHIN STATE ALLOCATIONS.—
(1) RESERVATION
FOR
STATE
ACTIVITIES.—
Section 133(a) (29 U.S.C. 2863(a)) is amended to
read as follows:
‘‘(a) RESERVATION FOR STATEWIDE ACTIVITIES.—
The Governor of a State may reserve up to 50 percent
of the total amount allotted to the State under section 132
for a fiscal year to carry out the statewide activities de-
scribed in section 134(a).’’.
(2) ALLOCATIONS TO LOCAL AREAS.—Section
133(b) (29 U.S.C. 2863(b)) is amended to read as
follows:
‘‘(b) ALLOCATIONS TO LOCAL AREAS.—
‘‘(1) IN GENERAL.—Of the amounts allotted to
the State under section 132(b)(2) and not reserved
under subsection (a)—
‘‘(A) 85 percent of such amounts shall be
allocated by the Governor to local areas in ac-
cordance with paragraph (2); and
‘‘(B) 15 percent of such amounts shall be
allocated by the Governor to local areas in ac-
cordance with paragraph (3).
‘‘(2) ESTABLISHED FORMULA.—
‘‘(A) IN GENERAL.—Of the amounts de-
scribed in paragraph (1)(A), the Governor shall
allocate—
‘‘(i) 60 percent on the basis of the rel-
ative number of unemployed individuals in
each local area, compared to the total
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
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 2006 or a subsequent
fiscal year, means a percentage of the
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 2005,
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 Job Training Improvement
Act of 2005) that is received by the local
area involved for fiscal year 2005.
‘‘(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 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-
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 at the end of the
program year prior to the program year for which
the determination is made exceeds 30 percent of the
total amount of funds available to the local area
under this section during such prior program year
(including amounts allotted to the local area in prior
program years that remain available). For purposes
of this paragraph, the unexpended balance is the
amount that is the difference between—
‘‘(A) the total amount of funds available to
the local area under this section during the pro-
gram year prior to the program year for which
the determination is made (including amounts
allocated to the local area in all prior program
years that remained available); and
‘‘(B) the accrued expenditures during such
prior program year.’’;
(C) by amending paragraph (3)—
(i) by striking ‘‘subsection (b)(3)’’ the
first two places it appears and inserting
‘‘subsection (b)’’;
(ii) by striking ‘‘the prior program
year’’ and inserting ‘‘the program year in
which the determination is made’’;
(iii) by striking ‘‘such prior program
year’’ and inserting ‘‘such program year’’;
and
(iv) by striking the last sentence; and
(D) by amending paragraph (4) to read as
follows:
‘‘(4) ELIGIBILITY.—For purposes of this sub-
section, an eligible local area means a local area
which does not have an amount available for 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.—
(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