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‘‘(4) LEVEL OF ACTIVITIES.—The term ‘level of 
activities’ means the number of authorized positions 
multiplied by the cost per authorized position. 
‘‘(5) NATIONAL GRANTS.—The term ‘national 
grants’ means grants made under this title by the 
Secretary to public and nonprofit private agency and 
organization grantees that operate under this title. 
‘‘(6) STATE.—The term ‘State’ does not include 
Guam, American Samoa, the Commonwealth of the 
Northern Mariana Islands, and the United States 
Virgin Islands. 
‘‘SEC. 507. EQUITABLE DISTRIBUTION. 
‘‘(a) INTERSTATE ALLOCATION.—In making grants 
under section 502(b) from allotments made under section 
506, the Secretary shall ensure, to the extent feasible, an 
equitable distribution of activities under such grants, in 
the aggregate, among the States, taking into account the 
needs of underserved States. 
‘‘(b) INTRASTATE ALLOCATION.—The amount allo-
cated for projects within each State under section 506 
shall be allocated among areas in the State in an equitable 
manner, taking into consideration the State priorities set 
out in the State plan in effect under section 503(a). 
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‘‘SEC. 508. REPORT. 
‘‘To carry out the Secretary’s responsibilities for re-
porting in section 503(g), the Secretary shall require the 
State agency for each State that receives funds under this 
title to prepare and submit a report at the beginning of 
each fiscal year on such State’s compliance with section 
507(b). Such report shall include the names and geo-
graphic location of all projects assisted under this title and 
carried out in the State and the amount allocated to each 
such project under section 506. 
‘‘SEC. 509. EMPLOYMENT ASSISTANCE AND FEDERAL HOUS-
ING AND FOOD STAMP PROGRAMS. 
‘‘Funds received by eligible individuals from projects 
carried out under the program established under this title 
shall not be considered to be income of such individuals 
for purposes of determining the eligibility of such individ-
uals, or of any other individuals, to participate in any 
housing program for which Federal funds may be available 
or for any income determination under the Food Stamp 
Act of 1977 (7 U.S.C. 2011 et seq.). 
‘‘SEC. 510. ELIGIBILITY FOR WORKFORCE INVESTMENT AC-
TIVITIES. 
‘‘Eligible individuals under this title may be consid-
ered by local workforce investment boards and one-stop 
operators established under title I of the Workforce In-
vestment Act of 1998 (29 U.S.C. 2801 et seq.) to satisfy 
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the requirements for receiving services under such title I 
that are applicable to adults. 
‘‘SEC. 511. COORDINATION WITH THE WORKFORCE INVEST-
MENT ACT OF 1998. 
‘‘(a) PARTNERS.—Grantees under this title shall be 
one-stop partners as described in subparagraphs (A) and 
(B)(vi) of section 121(b)(1) of the Workforce Investment 
Act of 1998 (29 U.S.C. 2841(b)(1)) in the one-stop deliv-
ery system established under section 134(c) of such Act 
(29 U.S.C. 2864(c)) for the appropriate local workforce 
investment areas, and shall carry out the responsibilities 
relating to such partners. 
‘‘(b) COORDINATION.—In local workforce investment 
areas where more than 1 grantee under this title provides 
services, the grantees shall— 
‘‘(1) coordinate their activities related to the 
one-stop delivery systems; and 
‘‘(2) be signatories of the memorandum of un-
derstanding established under section 121(c) of the 
Workforce Investment Act of 1998 (29 U.S.C. 
2841(c)). 
‘‘SEC. 512. TREATMENT OF ASSISTANCE. 
‘‘Assistance provided under this title shall not be con-
sidered to be financial assistance described in section 
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245A(h)(1)(A) of the Immigration and Nationality Act (8 
U.S.C. 1255a(h)(1)(A)). 
‘‘SEC. 513. PERFORMANCE. 
‘‘(a) MEASURES AND INDICATORS.— 
‘‘(1) ESTABLISHMENT
AND
IMPLEMENTATION 
OF
MEASURES
AND
INDICATORS.—The Secretary 
shall establish and implement, after consultation 
with grantees, subgrantees, and host agencies under 
this title, States, older individuals, area agencies on 
aging, and other organizations serving older individ-
uals, core measures of performance and additional 
indicators of performance for each grantee for 
projects and services carried out under this title. 
The core measures of performance and additional in-
dicators of performance shall be applicable to each 
grantee under this title without regard to whether 
such grantee operates the program directly or 
through subcontracts, subgrants, or agreements with 
other entities. 
‘‘(2) CONTENT.— 
‘‘(A) COMPOSITION OF MEASURES AND IN-
DICATORS.— 
‘‘(i) MEASURES.—The core measures 
of performance established by the Sec-
retary in accordance with paragraph (1) 
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shall consist of core indicators of perform-
ance specified in subsection (b)(1) and the 
expected levels of performance applicable 
to each core indicator of performance. 
‘‘(ii) ADDITIONAL INDICATORS.—The 
additional indicators of performance estab-
lished by the Secretary in accordance with 
paragraph (1) shall be the additional indi-
cators of performance specified in sub-
section (b)(2). 
‘‘(B) CONTINUOUS
IMPROVEMENT.—The 
measures described in subparagraph (A)(i) shall 
be designed to promote continuous improvement 
in performance. 
‘‘(C) EXPECTED
LEVELS
OF
PERFORM-
ANCE.—The Secretary and each grantee shall 
reach agreement on the expected levels of per-
formance for each program year for each of the 
core indicators of performance specified in sub-
paragraph (A)(i). The agreement shall take into 
account the requirement of subparagraph (B) 
and the factors described in subparagraph (D), 
and other appropriate factors as determined by 
the Secretary, and shall be consistent with the 
requirements of subparagraph (E). Funds may 
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not be awarded under the grant until such 
agreement is reached. At the conclusion of ne-
gotiations concerning the levels with all grant-
ees, the Secretary shall make available for pub-
lic review the final negotiated expected levels of 
performance for each grantee, including any 
comments submitted by the grantee regarding 
the grantee’s satisfaction with the negotiated 
levels. 
‘‘(D) ADJUSTMENT.—The expected levels 
of performance described in subparagraph (C) 
applicable to a grantee shall be adjusted after 
the agreement under subparagraph (C) has 
been reached only with respect to the following 
factors: 
‘‘(i) High rates of unemployment or of 
poverty or participation in the program of 
block grants to States for temporary as-
sistance for needy families established 
under part A of title IV of the Social Secu-
rity Act (42 U.S.C. 601 et seq.), in the 
areas served by a grantee, relative to other 
areas of the State involved or Nation. 
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‘‘(ii) Significant downturns in the 
areas served by the grantee or in the na-
tional economy. 
‘‘(iii) Significant numbers or propor-
tions of participants with 1 or more bar-
riers to employment, including individuals 
described in subsection (a)(3)(B)(ii) or 
(b)(2) of section 518, served by a grantee 
relative to such numbers or proportions for 
grantees serving other areas of the State 
or Nation. 
‘‘(iv) Changes in Federal, State, or 
local minimum wage requirements. 
‘‘(v) Limited economies of scale for 
the provision of community service employ-
ment and other authorized activities in the 
areas served by the grantee. 
‘‘(E) PLACEMENT.— 
‘‘(i) LEVEL OF PERFORMANCE.—For 
all grantees, the Secretary shall establish 
an expected level of performance of not 
less than the percentage specified in clause 
(ii) (adjusted in accordance with subpara-
graph (D)) for the entry into unsubsidized 
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employment core indicator of performance 
described in subsection (b)(1)(B). 
‘‘(ii) REQUIRED
PLACEMENT
PER-
CENTAGES.—The minimum percentage for 
the expected level of performance for the 
entry into unsubsidized employment core 
indicator of performance described in sub-
section (b)(1)(B) is— 
‘‘(I) 21 percent for fiscal year 
2007; 
‘‘(II) 22 percent for fiscal year 
2008; 
‘‘(III) 23 percent for fiscal year 
2009; 
‘‘(IV) 24 percent for fiscal year 
2010; and 
‘‘(V) 25 percent for fiscal year 
2011. 
‘‘(3) LIMITATION.—An agreement to be evalu-
ated on the core measures of performance and to re-
port information on the additional indicators of per-
formance shall be a requirement for application for, 
and a condition of, all grants authorized by this 
title. 
‘‘(b) INDICATORS OF PERFORMANCE.— 
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‘‘(1) CORE INDICATORS.—The core indicators 
of performance described in subsection (a)(2)(A)(i) 
shall consist of— 
‘‘(A) hours (in the aggregate) of commu-
nity service employment; 
‘‘(B) entry into unsubsidized employment; 
‘‘(C) retention in unsubsidized employment 
for 6 months; 
‘‘(D) earnings; and 
‘‘(E) the number of eligible individuals 
served, including the number of participating 
individuals described in subsection (a)(3)(B)(ii) 
or (b)(2) of section 518. 
‘‘(2) ADDITIONAL INDICATORS.—The additional 
indicators of performance described in subsection 
(a)(2)(A)(ii) shall consist of— 
‘‘(A) retention in unsubsidized employment 
for 1 year; 
‘‘(B) satisfaction of the participants, em-
ployers, and their host agencies with their expe-
riences and the services provided; 
‘‘(C) any other indicators of performance 
that the Secretary determines to be appropriate 
to evaluate services and performance. 
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‘‘(3) DEFINITIONS OF INDICATORS.—The Sec-
retary, after consultation with national and State 
grantees, representatives of business and labor orga-
nizations, and providers of services, shall, by regula-
tion, issue definitions of the indicators of perform-
ance described in paragraphs (1) and (2). 
‘‘(c) EVALUATION.—The Secretary shall— 
‘‘(1) annually evaluate, and publish and make 
available for public review information on, the actual 
performance of each grantee with respect to the lev-
els achieved for each of the core indicators of per-
formance, compared to the expected levels of per-
formance established under subsection (a)(2)(C) (in-
cluding any adjustments to such levels made in ac-
cordance with subsection (a)(2)(D)); and 
‘‘(2) annually publish and make available for 
public review information on the actual performance 
of each grantee with respect to the levels achieved 
for each of the additional indicators of performance. 
‘‘(d) TECHNICAL ASSISTANCE AND CORRECTIVE EF-
FORTS.— 
‘‘(1) INITIAL DETERMINATIONS.— 
‘‘(A) IN GENERAL.—As soon as practicable 
after July 1, 2007, the Secretary shall deter-
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mine if a grantee under this title has, for pro-
gram year 2006— 
‘‘(i) met the expected levels of per-
formance established under subsection 
(a)(2)(C) (including any adjustments to 
such levels made in accordance with sub-
section (a)(2)(D)) for the core indicators of 
performance described in subparagraphs 
(A), (C), (D), and (E) of subsection (b)(1); 
and 
‘‘(ii) achieved the applicable percent-
age specified in subsection (a)(2)(E)(ii) for 
the core indicator of performance described 
in subsection (b)(1)(B). 
‘‘(B) TECHNICAL
ASSISTANCE.—If the 
Secretary determines that the grantee, for pro-
gram year 2006— 
‘‘(i) failed to meet the expected levels 
of performance described in subparagraph 
(A)(i); or 
‘‘(ii) failed to achieve the applicable 
percentage 
described 
in 
subparagraph 
(A)(ii), 
the Secretary shall provide technical assistance 
to assist the grantee to meet the expected levels 
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of performance and achieve the applicable per-
centage. 
‘‘(2) NATIONAL GRANTEES.— 
‘‘(A) IN
GENERAL.—Not later than 120 
days after the end of each program year, the 
Secretary shall determine if a national grantee 
awarded a grant under section 502(b) in ac-
cordance with section 514 has met the expected 
levels of performance established under sub-
section (a)(2)(C) (including any adjustments to 
such levels made in accordance with subsection 
(a)(2)(D)) for the core indicators of perform-
ance described in subsection (b)(1). 
‘‘(B) TECHNICAL
ASSISTANCE
AND
COR-
RECTIVE ACTION PLAN.— 
‘‘(i) IN
GENERAL.—If the Secretary 
determines that a national grantee fails to 
meet the expected levels of performance de-
scribed in subparagraph (A), the Secretary 
after each year of such failure, shall pro-
vide technical assistance and require such 
grantee to submit a corrective action plan 
not later than 160 days after the end of 
the program year. 
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‘‘(ii) CONTENT.—The plan submitted 
under clause (i) shall detail the steps the 
grantee will take to meet the expected lev-
els of performance in the next program 
year. 
‘‘(iii) RECOMPETITION.—Any grantee 
who has failed to meet the expected levels 
of performance for 4 consecutive years (be-
ginning with program year 2007) shall not 
be allowed to compete in the subsequent 
grant competition under section 514 fol-
lowing the fourth consecutive year of fail-
ure but may compete in the next such 
grant competition after that subsequent 
competition. 
‘‘(3) STATE GRANTEES.— 
‘‘(A) IN
GENERAL.—Not later than 120 
days after the end of each program year, the 
Secretary shall determine if a State grantee al-
lotted funds under section 506(e) has met the 
expected levels of performance established 
under subsection (a)(2)(C) (including any ad-
justments to such levels made in accordance 
with subsection (a)(2)(D)) for the core indica-
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tors of performance described in subsection 
(b)(1). 
‘‘(B) TECHNICAL
ASSISTANCE
AND
COR-
RECTIVE ACTION PLAN.— 
‘‘(i) IN
GENERAL.—If the Secretary 
determines that a State fails to meet the 
expected levels of performance described in 
subparagraph (A), the Secretary, after 
each year of such failure, shall provide 
technical assistance and require the State 
to submit a corrective action plan not later 
than 160 days after the end of the pro-
gram year. 
‘‘(ii) CONTENT.—The plan submitted 
under clause (i) shall detail the steps the 
State will take to meet the expected levels 
of performance in the next program year. 
‘‘(iii) COMPETITION.—If the Secretary 
determines that the State fails to meet the 
expected levels of performance described in 
subparagraph (A) for 3 consecutive pro-
gram years (beginning with program year 
2007), the Secretary shall provide for the 
conduct by the State of a competition to 
award the funds allotted to the State 
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under section 506(e) for the first full pro-
gram year following the Secretary’s deter-
mination. 
‘‘(4) SPECIAL RULE FOR ESTABLISHMENT AND 
IMPLEMENTATION.—The Secretary shall establish 
and implement the core measures of performance 
and additional indicators of performance described 
in this section, including all required indicators de-
scribed in subsection (b), not later than July 1, 
2007. 
‘‘(e) IMPACT ON GRANT COMPETITION.—The Sec-
retary may not publish a notice announcing a grant com-
petition under this title, and solicit proposals for grants, 
until the day that is the later of— 
‘‘(1) the date on which the Secretary imple-
ments the core measures of performance and addi-
tional indicators of performance described in this 
section; and 
‘‘(2) January 1, 2010. 
‘‘SEC. 514. COMPETITIVE REQUIREMENTS RELATING TO 
GRANT AWARDS. 
‘‘(a) PROGRAM AUTHORIZED.— 
‘‘(1) INITIAL
APPROVAL
OF
GRANT
APPLICA-
TIONS.—From the funds available for national 
grants under section 506(d), the Secretary shall 
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award grants under section 502(b) to eligible appli-
cants, through a competitive process that emphasizes 
meeting performance requirements, to carry out 
projects under this title for a period of 4 years, ex-
cept as provided in paragraph (2). The Secretary 
may not conduct a grant competition under this title 
until the day described in section 513(e). 
‘‘(2) CONTINUATION OF APPROVAL BASED ON 
PERFORMANCE.—If the recipient of a grant made 
under paragraph (1) meets the expected levels of 
performance described in section 513(d)(2)(A) for 
each year of such 4-year period with respect to a 
project, the Secretary may award a grant under sec-
tion 502(b) to such recipient to continue such 
project beyond such 4-year period for 1 additional 
year without regard to such process. 
‘‘(b) ELIGIBLE APPLICANTS.—An applicant shall be 
eligible to receive a grant under section 502(b) in accord-
ance with subsections (a), (c), and (d). 
‘‘(c) CRITERIA.—For purposes of subsection (a)(1), 
the Secretary shall select the eligible applicants to receive 
grants based on the following: 
‘‘(1) The applicant’s ability to administer a 
project that serves the greatest number of eligible 
individuals, giving particular consideration to indi-
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viduals with greatest economic need, individuals with 
greatest social need, and individuals described in 
subsection (a)(3)(B)(ii) or (b)(2) of section 518. 
‘‘(2) The applicant’s ability to administer a 
project that provides employment for eligible individ-
uals in the communities in which such individuals 
reside, or in nearby communities, that will con-
tribute to the general welfare of the communities in-
volved. 
‘‘(3) The applicant’s ability to administer a 
project that moves eligible individuals into unsub-
sidized employment. 
‘‘(4) The applicant’s prior performance, if any, 
in meeting core measures of performance and ad-
dressing additional indicators of performance under 
this title and the applicant’s ability to address core 
indicators of performance and additional indicators 
of performance under this title and under other Fed-
eral or State programs in the case of an applicant 
that has not previously received a grant under this 
title. 
‘‘(5) The applicant’s ability to move individuals 
with multiple barriers to employment, including indi-
viduals described in subsection (a)(3)(B)(ii) or 
(b)(2) of section 518, into unsubsidized employment. 
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‘‘(6) The applicant’s ability to coordinate activi-
ties with other organizations at the State and local 
level. 
‘‘(7) The applicant’s plan for fiscal manage-
ment of the project to be administered with funds 
received in accordance with this section. 
‘‘(8) The applicant’s ability to administer a 
project that provides community service. 
‘‘(9) The applicant’s ability to minimize disrup-
tion in services for participants and in community 
services provided. 
‘‘(10) Any additional criteria that the Secretary 
considers to be appropriate in order to minimize dis-
ruption in services for participants. 
‘‘(d) RESPONSIBILITY TESTS.— 
‘‘(1) IN GENERAL.—Before final selection of a 
grantee, the Secretary shall conduct a review of 
available records to assess the applicant’s overall re-
sponsibility to administer Federal funds. 
‘‘(2) REVIEW.—As part of the review described 
in paragraph (1), the Secretary may consider any in-
formation, including the applicant’s history with re-
gard to the management of other grants. 
‘‘(3) FAILURE TO SATISFY TEST.—The failure 
to satisfy a responsibility test with respect to any 1 
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factor that is listed in paragraph (4), excluding 
those listed in subparagraphs (A) and (B) of such 
paragraph, does not establish that the applicant is 
not responsible unless such failure is substantial or 
persists for 2 or more consecutive years. 
‘‘(4) TEST.—The responsibility tests include re-
view of the following factors: 
‘‘(A) Unsuccessful efforts by the applicant 
to recover debts, after 3 demand letters have 
been sent, that are established by final agency 
action, or a failure to comply with an approved 
repayment plan. 
‘‘(B) Established fraud or criminal activity 
of a significant nature within the organization 
or agency involved. 
‘‘(C) Serious administrative deficiencies 
identified by the Secretary, such as failure to 
maintain a financial management system as re-
quired by Federal rules or regulations. 
‘‘(D) Willful obstruction of the audit proc-
ess. 
‘‘(E) Failure to provide services to partici-
pants for a current or recent grant or to meet 
applicable core measures of performance or ad-
dress applicable indicators of performance. 
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‘‘(F) 
Failure 
to 
correct 
deficiencies 
brought to the grantee’s attention in writing as 
a result of monitoring activities, reviews, assess-
ments, or other activities. 
‘‘(G) Failure to return a grant closeout 
package or outstanding advances within 90 
days of the grant expiration date or receipt of 
the closeout package, whichever is later, unless 
an extension has been requested and granted. 
‘‘(H) Failure to submit required reports. 
‘‘(I) Failure to properly report and dispose 
of Government property as instructed by the 
Secretary. 
‘‘(J) Failure to have maintained effective 
cash management or cost controls resulting in 
excess cash on hand. 
‘‘(K) Failure to ensure that a subrecipient 
complies with its Office of Management and 
Budget Circular A–133 audit requirements 
specified at section 667.200(b) of title 20, Code 
of Federal Regulations. 
‘‘(L) Failure to audit a subrecipient within 
the required period. 
‘‘(M) Final disallowed costs in excess of 5 
percent of the grant or contract award if, in the 
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judgment of the grant officer, the disallowances 
are egregious. 
‘‘(N) Failure to establish a mechanism to 
resolve a subrecipient’s audit in a timely fash-
ion. 
‘‘(5) DETERMINATION.—Applicants that are de-
termined to be not responsible shall not be selected 
as grantees. 
‘‘(6) DISALLOWED
COSTS.—Interest on dis-
allowed costs shall accrue in accordance with the 
Debt Collection Improvement Act of 1996, including 
the amendments made by that Act. 
‘‘(e) GRANTEES SERVING INDIVIDUALS WITH BAR-
RIERS TO EMPLOYMENT.— 
‘‘(1) DEFINITION.—In this subsection, the term 
‘individuals with barriers to employment’ means mi-
nority individuals, Indian individuals, individuals 
with greatest economic need, and individuals de-
scribed in subsection (a)(3)(B)(ii) or (b)(2) of sec-
tion 518. 
‘‘(2) SPECIAL CONSIDERATION.—In areas where 
a substantial population of individuals with barriers 
to employment exists, a grantee that receives a na-
tional grant in accordance with this section shall, in 
selecting subgrantees, give special consideration to 
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organizations (including former recipients of such 
national grants) with demonstrated expertise in serv-
ing individuals with barriers to employment. 
‘‘(f) MINORITY-SERVING GRANTEES.—The Secretary 
may not promulgate rules or regulations affecting grant-
ees in areas where a substantial population of minority 
individuals exists, that would significantly compromise the 
ability of the grantees to serve their targeted population 
of minority older individuals. 
‘‘SEC. 515. REPORT ON SERVICE TO MINORITY INDIVID-
UALS. 
‘‘(a) IN GENERAL.—The Secretary shall annually 
prepare a report on the levels of participation and per-
formance outcomes of minority individuals served by the 
program carried out under this title. 
‘‘(b) CONTENTS.— 
‘‘(1) ORGANIZATION AND DATA.—Such report 
shall present information on the levels of participa-
tion and the outcomes achieved by such minority in-
dividuals with respect to each grantee under this 
title, by service area, and in the aggregate, begin-
ning with data that applies to program year 2005. 
‘‘(2) EFFORTS.—The report shall also include a 
description of each grantee’s efforts to serve minor-
ity individuals, based on information submitted to 
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the Secretary by each grantee at such time and in 
such manner as the Secretary determines to be ap-
propriate. 
‘‘(3) RELATED
MATTERS.—The report shall 
also include— 
‘‘(A) an assessment of individual grantees 
based on the criteria established under sub-
section (c); 
‘‘(B) an analysis of whether any changes 
in grantees have affected participation rates of 
such minority individuals; 
‘‘(C) information on factors affecting par-
ticipation rates among such minority individ-
uals; and 
‘‘(D) recommendations for increasing par-
ticipation of minority individuals in the pro-
gram. 
‘‘(c) CRITERIA.—The Secretary shall establish cri-
teria for determining the effectiveness of grantees in serv-
ing minority individuals in accordance with the goals set 
forth in section 502(a)(1). 
‘‘(d) SUBMISSION.—The Secretary shall annually 
submit such a report to the appropriate committees of 
Congress. 
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‘‘SEC. 516. SENSE OF CONGRESS. 
‘‘It is the sense of Congress that— 
‘‘(1) the older American community service em-
ployment program described in this title was estab-
lished with the intent of placing older individuals in 
community service positions and providing job train-
ing; and 
‘‘(2) placing older individuals in community 
service positions strengthens the ability of the indi-
viduals to become self-sufficient, provides much- 
needed support to organizations that benefit from 
increased civic engagement, and strengthens the 
communities that are served by such organizations. 
‘‘SEC. 517. AUTHORIZATION OF APPROPRIATIONS. 
‘‘(a) IN GENERAL.—There are authorized to be ap-
propriated to carry out this title such sums as may be 
necessary for fiscal years 2007, 2008, 2009, 2010, and 
2011. 
‘‘(b) OBLIGATION.—Amounts appropriated under 
this section for any fiscal year shall be available for obliga-
tion during the annual period that begins on July 1 of 
the calendar year immediately following the beginning of 
such fiscal year and that ends on June 30 of the following 
calendar year. The Secretary may extend the period dur-
ing which such amounts may be obligated or expended in 
the case of a particular organization or agency that re-
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