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(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.’’; and 
(iv) in paragraph (5), by striking ‘‘ob-
ligation’’ and inserting ‘‘accrued expendi-
ture’’. 
(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 
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
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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
ALLOCATIONS.—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.— 
‘‘(A) IN GENERAL.—Of the amounts de-
scribed in paragraph (1)(A), the Governor shall 
allocate— 
‘‘(i) 331⁄3 percent shall be allotted on 
the basis of the relative number of individ-
uals in the civilian labor force who are ages 
16–19 in each local area, compared to the
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total number of individuals in the civilian 
labor force who are ages 16–19 in all local 
areas in the State; 
‘‘(ii) 331⁄3 percent shall be allotted on 
the basis of the relative number of unem-
ployed individuals in each local area, com-
pared to the total number of unemployed 
individuals in all local areas in the State; 
and 
‘‘(iii) 331⁄3 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 dis-
advantaged 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 
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-
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cation percentage’, used with respect to fis-
cal year 2006 or a subsequent fiscal year, 
means a percentage of the amount de-
scribed 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 allocated to 
local areas under this chapter (as in effect 
on the day before the date of enactment of 
the Job Training Improvement Act of 
2005) that is received by the local area in-
volved for fiscal year 2005. 
‘‘(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, 
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
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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— 
(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
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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’’;
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(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.’’. 
(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;
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‘‘(ii) recipients of a secondary school 
diploma, General Educational Development 
credential (GED), or other State-recog-
nized equivalent (including recognized al-
ternative standards for individuals with 
disabilities) who are deficient in basic skills 
and not attending any school; 
‘‘(iii) court-involved youth attending 
an alternative school; 
‘‘(iv) youth in foster care or who have 
been in foster care; or 
‘‘(v) in school youth who are low-in-
come individuals and one or more of the 
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-
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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 
subsection (b), and not more than 30 percent of 
funds available to local areas under subsection 
(c), may be used to provide activities for in- 
school youth meeting the requirements of para-
graph (1)(B)(v). 
‘‘(B) NON-SCHOOL HOURS REQUIRED.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), activities carried out 
under this chapter for in-school youth 
meeting the requirements of paragraph 
(1)(B)(v) shall only be carried out in non- 
school hours or periods when school is not 
in session (such as before and after school 
or during recess). 
‘‘(ii) EXCEPTION.—The requirements 
of clause (i) shall not apply to activities 
carried out for in-school youth meeting the 
requirements of paragraph (1)(B)(v) dur-
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ing school hours that are part of a pro-
gram that has demonstrated effectiveness 
in high school youth attaining diplomas.’’. 
(d) STATEWIDE YOUTH ACTIVITIES.—Section 129(b) 
(29 U.S.C. 2854(b)) is amended to read as follows: 
‘‘(b) STATEWIDE ACTIVITIES.— 
‘‘(1) IN GENERAL.—Funds reserved by a Gov-
ernor for a State as described in sections 128(a) and 
133(a)(1) may be used for statewide activities 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; 
‘‘(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
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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. 
‘‘(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.—
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(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: 
‘‘(i) activities leading to the attain-
ment of a secondary school diploma, Gen-
eral Educational Development credential 
(GED), or other State-recognized equiva-
lent 
(including 
recognized 
alternative 
standards for individuals with disabil-
ities);’’;
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(iii) in clause (ii) (as so redesignated), 
by inserting ‘‘and advanced training’’ after 
‘‘opportunities’’; 
(iv) in clause (iii) (as so redesig-
nated), by inserting ‘‘that lead to the at-
tainment of recognized credentials’’ 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, General Educational Development cre-
dential (GED), or other State-recognized equiv-
alent (including recognized alternative stand-
ards for individuals with disabilities), including 
dropout prevention strategies’’;
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(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 
(D) by redesignating paragraph (8) as 
paragraph (6).
HR 27 RFS 
SEC. 112. COMPREHENSIVE PROGRAMS FOR ADULTS. 
(a) TITLE AMENDMENT.— 
(1) The title heading of chapter 5 is amended 
to read as follows: 
‘‘CHAPTER 5—COMPREHENSIVE EMPLOY-
MENT AND TRAINING ACTIVITIES FOR 
ADULTS’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1(b) is amended by amending the 
item related to the heading for chapter 5 to read as 
follows: 
‘‘CHAPTER 5—COMPREHENSIVE EMPLOYMENT AND TRAINING ACTIVITIES 
FOR ADULTS’’. 
(b) GENERAL AUTHORIZATION.—Section 131 (29 
U.S.C. 2861) is amended— 
(1) by striking ‘‘paragraphs (1)(B) and (2)(B) 
of’’; and 
(2) by striking ‘‘, and dislocated workers,’’. 
(c) STATE ALLOTMENTS.— 
(1) IN GENERAL.—Section 132(a) (29 U.S.C. 
2862(a)) is amended to read as follows: 
‘‘(a) IN GENERAL.—The Secretary shall— 
‘‘(1) reserve 10 percent of the amount appro-
priated under section 137(b) for a fiscal year, of 
which—
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‘‘(A) not less than 75 percent shall be used 
for national dislocated worker grants under sec-
tion 173, of which up to $125,000,000 may be 
used to carry out section 171(d); 
‘‘(B) not more than 20 percent may be 
used for demonstration projects under section 
171; and 
‘‘(C) not more than 5 percent may be used 
to provide technical assistance under section 
170; and 
‘‘(2) make allotments from 90 percent of the 
amount appropriated under section 137(b) for a 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.— 
‘‘(A) IN
GENERAL.—From the amount 
made available under subsection (a)(2) for a 
fiscal year, the Secretary shall reserve not more 
than 1⁄4 of 1 percent to provide assistance to 
outlying areas to carry out employment and
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training activities for adults and statewide 
workforce investment activities. 
‘‘(B) 
RESTRICTION.—The 
Republic 
of 
Palau shall cease to be eligible to receive fund-
ing under this paragraph upon entering into an 
agreement for extension of United States edu-
cational assistance under the Compact of Free 
Association (approved by the Compact of Free 
Association Amendments Act of 2003 (Public 
Law 108–188)) after the date of enactment of 
the Job Training Improvement Act of 2005. 
‘‘(2) STATES.—Subject to paragraph (5), of the 
remainder of the amount referred to under 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 2006.—
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‘‘(i) IN GENERAL.—Subject to clause 
(ii), the amount referred to in paragraph 
(2)(A) shall be allotted for fiscal year 2006 
on the basis of allotment percentage of 
each State under section 6 of the Wagner- 
Peyser Act for fiscal year 2005. 
‘‘(ii) 
EXCESS
AMOUNTS.—If 
the 
amount referred to in paragraph (2)(A) for 
fiscal year 2006 exceeds the amount that 
was available for allotment to the States 
under the Wagner-Peyser Act for fiscal 
year 2005, 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 2005.
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‘‘(B) FISCAL
YEARS
2007
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 
2007 and each fiscal year thereafter on the 
basis of the allotment percentage of each 
State under this paragraph for the pre-
ceding fiscal year. 
‘‘(ii) 
EXCESS
AMOUNTS.—If 
the 
amount referred to in paragraph (2)(A) for 
fiscal year 2007 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
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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 
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.—
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‘‘(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-
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 2006 or a subsequent
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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-
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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
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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
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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:
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‘‘(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
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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.
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‘‘(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—
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‘‘(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.—
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(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—
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‘‘(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-
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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
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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,
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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
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‘‘(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.—
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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 and strategies designed to meet the 
needs of businesses in the State, including small 
businesses, and engage employers in workforce
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activities, and programs serving individuals 
with disabilities consistent with section 188; 
‘‘(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.); 
‘‘(J) implementing programs to increase 
the number of individuals training for and 
placed in nontraditional employment; and 
‘‘(K) carrying out activities to facilitate re-
mote access to services provided through a one- 
stop delivery system, including facilitating ac-
cess through the use of technology.’’. 
(D) LIMITATION ON STATE ADMINISTRA-
TIVE EXPENDITURES.—Section 134(a) is fur-
ther amended by adding the following new 
paragraph:
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‘‘(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— 
(A) by striking ‘‘under paragraph (2)(A)’’ 
and 
all 
that 
follows 
through 
‘‘section 
133(b)(2)(B)’’ and inserting ‘‘under section 
133(b)’’; and 
(B) in paragraphs (1) and (2), by striking 
‘‘or dislocated workers, respectively’’ . 
(3) TECHNICAL AMENDMENT.—Section 134 is 
further amended by redesignating subsections (d) 
and (e) as subsections (c) and (d), respectively. 
(4) 
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 (3)) is amended to read as 
follows: 
‘‘(1) IN GENERAL.—Funds allocated to a local 
area for adults under section 133(b) shall be used—