251 
ments, as the Secretary determines to be necessary to en-
sure fiscal integrity, effective monitoring, and appropriate 
and prompt implementation of the activities under this 
Act. 
SEC. 1530. REPORT OF INFORMATION AND EVALUATIONS 
TO CONGRESS AND THE PUBLIC. 
The Secretary of Labor shall provide to the appro-
priate Committees of the Congress and make available to 
the public the information reported pursuant to section 
1529 and the evaluations of activities carried out pursuant 
to the funds reserved under section 1522(a)(1). 
SEC. 1531. STATE. 
For purposes of this part, the term ‘‘State’’ has the 
meaning given that term in section 205 of the Federal- 
State Extended Unemployment Compensation Act of 1970 
(26 U.S.C. 3304 note). 
PART III—SHORT-TIME COMPENSATION 
PROGRAM 
SEC. 1541. TEMPORARY FINANCING OF SHORT-TIME COM-
PENSATION PAYMENTS IN STATES WITH PRO-
GRAMS IN LAW. 
(a) PAYMENTS TO STATES.— 
(1) IN GENERAL.—Subject to paragraph (3), 
there shall be paid to a State an amount equal to 
100 percent of the amount of short-time compensa-
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tion paid under a short-time compensation program 
(as defined in section 3306(v) of the Internal Rev-
enue Code of 1986) under the provisions of the 
State law. 
(2) TERMS OF PAYMENTS.—Payments made to 
a State under paragraph (1) shall be payable by way 
of reimbursement in such amounts as the Secretary 
estimates the State will be entitled to receive under 
this section for each calendar month, reduced or in-
creased, as the case may be, by any amount by 
which the Secretary finds that the Secretary’s esti-
mates for any prior calendar month were greater or 
less than the amounts which should have been paid 
to the State. Such estimates may be made on the 
basis of such statistical, sampling, or other method 
as may be agreed upon by the Secretary and the 
State agency of the State involved. 
(3) LIMITATIONS ON PAYMENTS.— 
(A) GENERAL
PAYMENT
LIMITATIONS.— 
No payments shall be made to a State under 
this section for short-time compensation paid to 
an individual by the State during a benefit year 
in excess of 26 times the amount of regular 
compensation (including dependents’ allow-
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253 
ances) under the State law payable to such in-
dividual for a week of total unemployment. 
(B) EMPLOYER
LIMITATIONS.—No pay-
ments shall be made to a State under this sec-
tion for benefits paid to an individual by the 
State under a short-time compensation program 
if such individual is employed by the partici-
pating employer on a seasonal, temporary, or 
intermittent basis. 
(b) APPLICABILITY.— 
(1) IN GENERAL.—Payments to a State under 
subsection (a) shall be available for weeks of unem-
ployment— 
(A) beginning on or after the date of the 
enactment of this Act; and 
(B) ending on or before the date that is 3 
years and 6 months after the date of the enact-
ment of this Act. 
(2) THREE-YEAR
FUNDING
LIMITATION
FOR 
COMBINED
PAYMENTS
UNDER
THIS
SECTION
AND 
SECTION 1543.—States may receive payments under 
this section and section 1543 with respect to a total 
of not more than 156 weeks. 
(c) TWO-YEAR TRANSITION PERIOD FOR EXISTING 
PROGRAMS.—During any period that the transition provi-
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sion under section 1541(a)(3) is applicable to a State with 
respect to a short-time compensation program, such State 
shall be eligible for payments under this section. Subject 
to paragraphs (1)(B) and (2) of subsection (b), if at any 
point after the date of the enactment of this Act the State 
enacts a State law providing for the payment of short- 
time compensation under a short-time compensation pro-
gram that meets the definition of such a program under 
section 3306(v) of the Internal Revenue Code of 1986, the 
State shall be eligible for payments under this section 
after the effective date of such enactment. 
(d) FUNDING AND CERTIFICATIONS.— 
(1) FUNDING.—There are appropriated, out of 
moneys in the Treasury not otherwise appropriated, 
such sums as may be necessary for purposes of car-
rying out this section. 
(2) 
CERTIFICATIONS.—The 
Secretary 
shall 
from time to time certify to the Secretary of the 
Treasury for payment to each State the sums pay-
able to such State under this section. 
(e) DEFINITIONS.—In this section: 
(1) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Labor. 
(2) STATE; STATE AGENCY; STATE LAW.—The 
terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 
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have the meanings given those terms in section 205 
of the Federal-State Extended Unemployment Com-
pensation Act of 1970 (26 U.S.C. 3304 note). 
SEC. 1542. TEMPORARY FINANCING OF SHORT-TIME COM-
PENSATION AGREEMENTS. 
(a) FEDERAL-STATE AGREEMENTS.— 
(1) IN GENERAL.—Any State which desires to 
do so may enter into, and participate in, an agree-
ment under this section with the Secretary provided 
that such State’s law does not provide for the pay-
ment of short-time compensation under a short-time 
compensation program (as defined in section 
3306(v) of the Internal Revenue Code of 1986). 
(2) ABILITY TO TERMINATE.—Any State which 
is a party to an agreement under this section may, 
upon providing 30 days’ written notice to the Sec-
retary, terminate such agreement. 
(b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— 
(1) IN GENERAL.—Any agreement under this 
section shall provide that the State agency of the 
State will make payments of short-time compensa-
tion under a plan approved by the State. Such plan 
shall provide that payments are made in accordance 
with the requirements under section 3306(v) of the 
Internal Revenue Code of 1986. 
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(2) LIMITATIONS ON PLANS.— 
(A) GENERAL PAYMENT LIMITATIONS.—A 
short-time compensation plan approved by a 
State shall not permit the payment of short- 
time compensation to an individual by the State 
during a benefit year in excess of 26 times the 
amount of regular compensation (including de-
pendents’ allowances) under the State law pay-
able to such individual for a week of total un-
employment. 
(B) EMPLOYER
LIMITATIONS.—A short- 
time compensation plan approved by a State 
shall not provide payments to an individual if 
such individual is employed by the participating 
employer on a seasonal, temporary, or intermit-
tent basis. 
(3) EMPLOYER
PAYMENT
OF
COSTS.—Any 
short-time compensation plan entered into by an em-
ployer must provide that the employer will pay the 
State an amount equal to one-half of the amount of 
short-time compensation paid under such plan. Such 
amount shall be deposited in the State’s unemploy-
ment fund and shall not be used for purposes of cal-
culating an employer’s contribution rate under sec-
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257 
tion 3303(a)(1) of the Internal Revenue Code of 
1986. 
(c) PAYMENTS TO STATES.— 
(1) IN GENERAL.—There shall be paid to each 
State with an agreement under this section an 
amount equal to— 
(A) one-half of the amount of short-time 
compensation paid to individuals by the State 
pursuant to such agreement; and 
(B) any additional administrative expenses 
incurred by the State by reason of such agree-
ment (as determined by the Secretary). 
(2) TERMS OF PAYMENTS.—Payments made to 
a State under paragraph (1) shall be payable by way 
of reimbursement in such amounts as the Secretary 
estimates the State will be entitled to receive under 
this section for each calendar month, reduced or in-
creased, as the case may be, by any amount by 
which the Secretary finds that the Secretary’s esti-
mates for any prior calendar month were greater or 
less than the amounts which should have been paid 
to the State. Such estimates may be made on the 
basis of such statistical, sampling, or other method 
as may be agreed upon by the Secretary and the 
State agency of the State involved. 
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258 
(3) FUNDING.—There are appropriated, out of 
moneys in the Treasury not otherwise appropriated, 
such sums as may be necessary for purposes of car-
rying out this section. 
(4) 
CERTIFICATIONS.—The 
Secretary 
shall 
from time to time certify to the Secretary of the 
Treasury for payment to each State the sums pay-
able to such State under this section. 
(d) APPLICABILITY.— 
(1) IN GENERAL.—An agreement entered into 
under this section shall apply to weeks of unemploy-
ment— 
(A) beginning on or after the date on 
which such agreement is entered into; and 
(B) ending on or before the date that is 2 
years and 13 weeks after the date of the enact-
ment of this Act. 
(2) TWO-YEAR
FUNDING
LIMITATION.—States 
may receive payments under this section with re-
spect to a total of not more than 104 weeks. 
(e) SPECIAL RULE.—If a State has entered into an 
agreement under this section and subsequently enacts a 
State law providing for the payment of short-time com-
pensation under a short-time compensation program that 
meets the definition of such a program under section 
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259 
3306(v) of the Internal Revenue Code of 1986, the 
State— 
(1) shall not be eligible for payments under this 
section for weeks of unemployment beginning after 
the effective date of such State law; and 
(2) subject to paragraphs (1)(B) and (2) of sec-
tion 1542(b), shall be eligible to receive payments 
under section 1542 after the effective date of such 
State law. 
(f) DEFINITIONS.—In this section: 
(1) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Labor. 
(2) STATE; STATE AGENCY; STATE LAW.—The 
terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 
have the meanings given those terms in section 205 
of the Federal-State Extended Unemployment Com-
pensation Act of 1970 (26 U.S.C. 3304 note). 
SEC. 1543. GRANTS FOR SHORT-TIME COMPENSATION PRO-
GRAMS. 
(a) GRANTS.— 
(1) FOR IMPLEMENTATION OR IMPROVED AD-
MINISTRATION.—The Secretary shall award grants 
to States that enact short-time compensation pro-
grams (as defined in subsection (i)(2)) for the pur-
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260 
pose of implementation or improved administration 
of such programs. 
(2) FOR PROMOTION AND ENROLLMENT.—The 
Secretary shall award grants to States that are eligi-
ble and submit plans for a grant under paragraph 
(1) for such States to promote and enroll employers 
in short-time compensation programs (as so de-
fined). 
(3) ELIGIBILITY.— 
(A) IN GENERAL.—The Secretary shall de-
termine eligibility criteria for the grants under 
paragraph (1) and (2). 
(B) 
CLARIFICATION.—A 
State 
admin-
istering a short-time compensation program, in-
cluding a program being administered by a 
State that is participating in the transition 
under the provisions of sections 1541(a)(3) and 
1542(c), that does not meet the definition of a 
short-time compensation program under section 
3306(v) of the Internal Revenue Code of 1986, 
and a State with an agreement under section 
1543, shall not be eligible to receive a grant 
under this section until such time as the State 
law of the State provides for payments under a 
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261 
short-time compensation program that meets 
such definition and such law. 
(b) AMOUNT OF GRANTS.— 
(1) IN GENERAL.—The maximum amount avail-
able for making grants to a State under paragraphs 
(1) and (2) shall be equal to the amount obtained 
by multiplying $700,000,000 (less the amount used 
by the Secretary under subsection (e)) by the same 
ratio as would apply under subsection (a)(2)(B) of 
section 903 of the Social Security Act (42 U.S.C. 
1103) for purposes of determining such State’s 
share of any excess amount (as described in sub-
section (a)(1) of such section) that would have been 
subject to transfer to State accounts, as of October 
1, 2013, under the provisions of subsection (a) of 
such section. 
(2) AMOUNT
AVAILABLE
FOR
DIFFERENT 
GRANTS.—Of the maximum incentive payment deter-
mined under paragraph (1) with respect to a 
State— 
(A) one-third shall be available for a grant 
under subsection (a)(1); and 
(B) two-thirds shall be available for a 
grant under subsection (a)(2). 
(c) GRANT APPLICATION AND DISBURSAL.— 
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(1) APPLICATION.—Any State seeking a grant 
under paragraph (1) or (2) of subsection (a) shall 
submit an application to the Secretary at such time, 
in such manner, and complete with such information 
as the Secretary may require. In no case may the 
Secretary award a grant under this section with re-
spect to an application that is submitted after De-
cember 31, 2014. 
(2) NOTICE.—The Secretary shall, within 30 
days after receiving a complete application, notify 
the State agency of the State of the Secretary’s find-
ings with respect to the requirements for a grant 
under paragraph (1) or (2) (or both) of subsection 
(a). 
(3) CERTIFICATION.—If the Secretary finds 
that the State law provisions meet the requirements 
for a grant under subsection (a), the Secretary shall 
thereupon make a certification to that effect to the 
Secretary of the Treasury, together with a certifi-
cation as to the amount of the grant payment to be 
transferred to the State account in the Unemploy-
ment Trust Fund (as established in section 904(a) 
of the Social Security Act (42 U.S.C. 1104(a))) pur-
suant to that finding. The Secretary of the Treasury 
shall make the appropriate transfer to the State ac-
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263 
count within 7 days after receiving such certifi-
cation. 
(4) REQUIREMENT.—No certification of compli-
ance with the requirements for a grant under para-
graph (1) or (2) of subsection (a) may be made with 
respect to any State whose— 
(A) State law is not otherwise eligible for 
certification under section 303 of the Social Se-
curity Act (42 U.S.C. 503) or approvable under 
section 3304 of the Internal Revenue Code of 
1986; or 
(B) short-time compensation program is 
subject to discontinuation or is not scheduled to 
take effect within 12 months of the certifi-
cation. 
(d) USE
OF FUNDS.—The amount of any grant 
awarded under this section shall be used for the implemen-
tation of short-time compensation programs and the over-
all administration of such programs and the promotion 
and enrollment efforts associated with such programs, 
such as through— 
(1) the creation or support of rapid response 
teams to advise employers about alternatives to lay-
offs; 
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264 
(2) the provision of education or assistance to 
employers to enable them to assess the feasibility of 
participating in short-time compensation programs; 
and 
(3) the development or enhancement of systems 
to automate— 
(A) the submission and approval of plans; 
and 
(B) the filing and approval of new and on-
going short-time compensation claims. 
(e) ADMINISTRATION.—The Secretary is authorized 
to use 0.25 percent of the funds available under subsection 
(g) to provide for outreach and to share best practices with 
respect to this section and short-time compensation pro-
grams. 
(f) RECOUPMENT.—The Secretary shall establish a 
process under which the Secretary shall recoup the 
amount of any grant awarded under paragraph (1) or (2) 
of subsection (a) if the Secretary determines that, during 
the 5-year period beginning on the first date that any such 
grant is awarded to the State, the State— 
(1) terminated the State’s short-time compensa-
tion program; or 
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265 
(2) failed to meet appropriate requirements 
with respect to such program (as established by the 
Secretary). 
(g) FUNDING.—There are appropriated, out of mon-
eys in the Treasury not otherwise appropriated, to the 
Secretary, $700,000,000 to carry out this section, to re-
main available without fiscal year limitation. 
(h) REPORTING.—The Secretary may establish re-
porting requirements for States receiving a grant under 
this section in order to provide oversight of grant funds. 
(i) DEFINITIONS.—In this section: 
(1) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Labor. 
(2) SHORT-TIME
COMPENSATION
PROGRAM.— 
The term ‘‘short-time compensation program’’ has 
the meaning given such term in section 3306(v) of 
the Internal Revenue Code of 1986. 
(3) STATE; STATE AGENCY; STATE LAW.—The 
terms ‘‘State’’, ‘‘State agency’’, and ‘‘State law’’ 
have the meanings given those terms in section 205 
of the Federal-State Extended Unemployment Com-
pensation Act of 1970 (26 U.S.C. 3304 note). 
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266 
SEC. 1544. ASSISTANCE AND GUIDANCE IN IMPLEMENTING 
PROGRAMS. 
(a) IN GENERAL.—In order to assist States in estab-
lishing, qualifying, and implementing short-time com-
pensation programs (as defined in section 3306(v) of the 
Internal Revenue Code of 1986), the Secretary of Labor 
(in this section referred to as the ‘‘Secretary’’) shall— 
(1) develop model legislative language which 
may be used by States in developing and enacting 
such programs and periodically review and revise 
such model legislative language; 
(2) provide technical assistance and guidance in 
developing, enacting, and implementing such pro-
grams; and 
(3) establish reporting requirements for States, 
including reporting on— 
(A) the number of estimated averted lay-
offs; 
(B) the number of participating employers 
and workers; and 
(C) such other items as the Secretary of 
Labor determines are appropriate. 
(b) MODEL LANGUAGE AND GUIDANCE.—The model 
language and guidance developed under subsection (a) 
shall allow sufficient flexibility by States and participating 
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267 
employers while ensuring accountability and program in-
tegrity. 
(c) CONSULTATION.—In developing the model legisla-
tive language and guidance under subsection (a), and in 
order to meet the requirements of subsection (b), the Sec-
retary shall consult with employers, labor organizations, 
State workforce agencies, and other program experts. 
SEC. 1545. REPORTS. 
(a) REPORTS.— 
(1) IN GENERAL.—Not later than 4 years after 
the date of the enactment of this Act, the Secretary 
of Labor shall submit to Congress and to the Presi-
dent a report or reports on the implementation of 
the provisions of this Act. 
(2) REQUIREMENTS.—Any report under para-
graph (1) shall at a minimum include the following: 
(A) A description of best practices by 
States and employers in the administration, 
promotion, and use of short-time compensation 
programs (as defined in section 3306(v) of the 
Internal Revenue Code of 1986). 
(B) An analysis of the significant chal-
lenges to State enactment and implementation 
of short-time compensation programs. 
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268 
(C) A survey of employers in States that 
have not enacted a short-time compensation 
program or entered into an agreement with the 
Secretary on a short-time compensation plan to 
determine the level of interest among such em-
ployers in participating in short-time compensa-
tion programs. 
(b) FUNDING.—There are appropriated, out of any 
moneys in the Treasury not otherwise appropriated, to the 
Secretary of Labor, $1,500,000 to carry out this section, 
to remain available without fiscal year limitation. 
Subtitle B—Long-Term 
Unemployed Hiring Preferences 
SEC. 1551. LONG-TERM UNEMPLOYED WORKERS WORK OP-
PORTUNITY TAX CREDITS. 
(a) IN GENERAL.—Paragraph (3) of section 51(b) of 
the Internal Revenue Code is amended by inserting 
‘‘$10,000 per year in the case of any individual who is 
a qualified long-term unemployed individual by reason of 
subsection (d)(11), and’’ before ‘‘$12,000 per year’’. 
(b) LONG-TERM UNEMPLOYED INDIVIDUALS TAX 
CREDITS.—Subsection (d) of section 51 of the Internal 
Revenue Code is amended— 
(1) in paragraph (1), by striking ‘‘or’’ at the 
end of subparagraph (H), by striking the period at 
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269 
the end of subparagraph (I) and inserting ‘‘, or’’, 
and by inserting after subparagraph (I) the fol-
lowing: 
‘‘(J) a qualified long-term unemployed in-
dividual.’’, and 
(2) by redesignating paragraphs (11) through 
(14) as paragraphs (12) through (15), respectively, 
and by inserting after paragraph (10) the following 
new paragraph: 
‘‘(11) QUALIFIED
LONG-TERM
UNEMPLOYED 
INDIVIDUAL.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
long-term unemployed individual’ means any in-
dividual who was not a student for at least 6 
months during the 1-year period ending on the 
hiring date and is certified by the designated 
local agency as having aggregate periods of un-
employment during the 1-year period ending on 
the hiring date which equal or exceed 6 months. 
‘‘(B) STUDENT.—For purposes of this sub-
section, a student is an individual enrolled at 
least half-time in a program that leads to a de-
gree, certificate, or other recognized educational 
credential for at least 6 months whether or not 
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270 
consecutive during the 1-year period ending on 
the hiring date.’’. 
(c) SIMPLIFIED CERTIFICATION.—Section 51(d) of 
the Internal Revenue Code, as amended by subsection (b), 
is amended by adding at the end the following new para-
graph: 
‘‘(16) CREDIT ALLOWED FOR QUALIFIED LONG- 
TERM UNEMPLOYED INDIVIDUALS.— 
‘‘(A) IN
GENERAL.—Any qualified long- 
term unemployed individual under paragraph 
(11) will be treated as certified by the des-
ignated local agency as having aggregate peri-
ods of unemployment if the individual is cer-
tified by the designated local agency as being in 
receipt of unemployment compensation under 
State or Federal law for not less than 6 months 
during the 1-year period ending on the hiring 
date. 
‘‘(B) REGULATORY AUTHORITY.—The Sec-
retary in his discretion may provide alternative 
methods for certification.’’. 
(d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM-
PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 3111(e) 
of the Internal Revenue Code is amended— 
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271 
(1) in the heading for the subsection is amend-
ed by inserting ‘‘AND QUALIFIED LONG-TERM UN-
EMPLOYED INDIVIDUALS’’ after ‘‘QUALIFIED VET-
ERANS’’, 
(2) in paragraph (1) by inserting ‘‘or qualified 
long-term unemployed individual’’ after ‘‘qualified 
veteran’’, 
(3) in paragraph (2) by inserting ‘‘and qualified 
long-term unemployed individuals’’ after ‘‘qualified 
veterans’’, 
(4) in paragraph (3)(C) by inserting ‘‘and 
qualified long-term unemployed individual, as the 
case may be,’’ after ‘‘qualified veteran’’, 
(5) in paragraph (4) by inserting ‘‘or qualified 
long-term unemployed individual’’ after ‘‘qualified 
veteran’’ both places it appears, and 
(6) in paragraph (5) by striking ‘‘and’’ at the 
end of subparagraph (A), by striking the period at 
the end of subparagraph (B) and inserting ‘‘, and’’, 
and by adding at the end the following: 
‘‘(C) the term ‘qualified long-term unem-
ployed individual’ has meaning given such term 
by section 51(d)(11).’’. 
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272 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after the date of the enactment of this Act. 
Subtitle C—Pathways Back to 
Work 
SEC. 1561. SHORT TITLE. 
This subtitle may be cited as the ‘‘Pathways Back 
to Work Act of 2014’’. 
SEC. 1562. AUTHORIZATION OF APPROPRIATIONS. 
There is authorized to be appropriated to the Sec-
retary of Labor $5,000,000,000 to carry out this subtitle. 
SEC. 1563. AVAILABILITY OF FUNDS. 
(a) IN GENERAL.—Of the amounts available under 
section 1562(b), the Secretary of Labor shall— 
(1) allot $2,000,000,000 in accordance with 
section 1564 to provide subsidized employment to 
unemployed, low-income adults; 
(2) allot $1,500,000,000 in accordance with 
section 1565 to provide summer and year-round em-
ployment opportunities to low-income youth; and 
(3) award $1,500,000,000 in competitive grants 
in accordance with section 1566 to local entities to 
carry out work-based training and other work-re-
lated and educational strategies and activities of 
demonstrated effectiveness to unemployed, low-in-
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273 
come adults and low-income youth to provide the 
skills and assistance needed to obtain employment. 
(b) RESERVATION.—The Secretary of Labor may re-
serve not more than 1 percent of amounts available under 
each of paragraphs (1) through (3) of subsection (a) for 
the costs of technical assistance, evaluations and Federal 
administration of this Act. 
(c) PERIOD OF AVAILABILITY.—The amounts appro-
priated under this Act shall be available for obligation by 
the Secretary of Labor until December 31, 2014, and shall 
be available for expenditure by grantees and subgrantees 
until September 30, 2015. 
SEC. 1564. SUBSIDIZED EMPLOYMENT FOR UNEMPLOYED, 
LOW-INCOME ADULTS. 
(a) IN GENERAL.— 
(1) ALLOTMENTS.—From the funds available 
under section 1563(a)(1), the Secretary of Labor 
shall make an allotment under subsection (b) to each 
State that has a State plan approved under sub-
section (c) and to each outlying area and Native 
American grantee under section 166 of the Work-
force Investment Act of 1998 (as in effect on the 
day before the date of enactment of the Workforce 
Innovation and Opportunity Act) that meets the re-
quirements of this section, for the purpose of pro-
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viding subsidized employment opportunities to unem-
ployed, low-income adults. 
(2) GUIDANCE.—Not later than 30 days after 
the date of enactment of this Act, the Secretary of 
Labor, in coordination with the Secretary of Health 
and Human Services, shall issue guidance regarding 
the implementation of this section. Such guidance 
shall, consistent with this section, include procedures 
for the submission and approval of State and local 
plans and the allotment and allocation of funds, in-
cluding reallotment and reallocation of such funds, 
that promote the expeditious and effective implemen-
tation of the activities authorized under this section. 
(b) STATE ALLOTMENTS.— 
(1) RESERVATIONS FOR OUTLYING AREAS AND 
TRIBES.—Of the funds described subsection (a)(1), 
the Secretary shall reserve— 
(A) not more than one-quarter of 1 percent 
to provide assistance to outlying areas to pro-
vide subsidized employment to low-income 
adults who are unemployed; and 
(B) 1.5 percent to provide assistance to 
grantees of the Native American programs 
under section 166 of the Workforce Investment 
Act of 1998 (as in effect on the day before the 
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date of enactment of the Workforce Innovation 
and Opportunity Act) to provide subsidized em-
ployment to low-income adults who are unem-
ployed. 
(2) STATES.—After determining the amounts to 
be reserved under paragraph (1), the Secretary of 
Labor shall allot the remainder of the amounts de-
scribed in subsection (a)(1) among the States as fol-
lows— 
(A) one-third shall be allotted on the basis 
of the relative number of unemployed individ-
uals in areas of substantial unemployment in 
each State, compared to the total number of 
unemployed individuals in areas of substantial 
unemployment in all States; 
(B) one-third shall be allotted on the basis 
of the relative excess number of unemployed in-
dividuals in each State, compared to the total 
excess number of unemployed individuals in all 
States; and 
(C) one-third shall be allotted on the basis 
of the relative number of disadvantaged adults 
and youth in each State, compared to the total 
number of disadvantaged adults and youth in 
all States. 
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276 
(3) DEFINITIONS.—For purposes of the for-
mula described in paragraph (2)— 
(A) AREA
OF
SUBSTANTIAL
UNEMPLOY-
MENT.—The term ‘‘area of substantial unem-
ployment’’ means any contiguous area with a 
population of at least 10,000 and that has an 
average rate of unemployment of at least 6.5 
percent for the most recent 12 months, as de-
termined by the Secretary. 
(B) 
DISADVANTAGED
ADULTS
AND 
YOUTH.—The term ‘‘disadvantaged adults and 
youth’’ means an individual who is age 16 and 
older (subject to section 132(b)(1)(B)(v)(I) of 
the Workforce Investment Act of 1998) who re-
ceived an income, or is a member of a family 
that received a total family income, that, in re-
lation to family size, does not exceed the higher 
of— 
(i) the poverty line; or 
(ii) 70 percent of the lower living 
standard income level. 
(C) EXCESS NUMBER.—The term ‘‘excess 
number’’ means, used with respect to the excess 
number of unemployed individuals within a 
State, the higher of— 
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(i) the number that represents the 
number of unemployed individuals in ex-
cess of 4.5 percent of the civilian labor 
force in the State; or 
(ii) the number that represents the 
number of unemployed individuals in ex-
cess of 4.5 percent of the civilian labor 
force in areas of substantial unemployment 
in such State. 
(4) REALLOTMENT.—If the Governor of a State 
does not submit a State plan by the time specified 
in subsection (c), or a State does not receive ap-
proval of a State plan, the amount the State would 
have been eligible to receive pursuant to the formula 
under paragraph (2) shall be added to the amounts 
available for the competitive grants under section 
1563(a)(3). 
(c) STATE PLAN.— 
(1) IN GENERAL.—For a State to be eligible to 
receive an allotment of the funds under subsection 
(b), the Governor of the State shall submit to the 
Secretary of Labor a State plan in such form and 
containing such information as the Secretary may 
require. At a minimum, such plan shall include— 
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(A) a description of the strategies and ac-
tivities to be carried out by the State, in coordi-
nation with employers in the State, to provide 
subsidized employment opportunities to unem-
ployed, low-income adults, including strategies 
relating to the level and duration of subsidies 
consistent with subsection (e)(2); 
(B) a description of the requirements the 
State will apply relating to the eligibility of un-
employed, low-income adults, consistent with 
section 1568(6), for subsidized employment op-
portunities, which may include criteria to target 
assistance to particular categories of such 
adults, such as individuals with disabilities or 
individuals who have exhausted all rights to un-
employment compensation; 
(C) a description of how the funds allotted 
to provide subsidized employment opportunities 
will be administered in the State and local 
areas, in accordance with subsection (d); 
(D) a description of the performance out-
comes to be achieved by the State through the 
activities carried out under this section and the 
processes the State will use to track perform-
ance, consistent with guidance provided by the 
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Secretary of Labor regarding such outcomes 
and processes and with section 1567(b); 
(E) a description of the coordination of ac-
tivities to be carried out with the funds pro-
vided under this section with activities under 
title I of the Workforce Investment Act of 1998 
(as in effect on the day before the date of en-
actment of the Workforce Innovation and Op-
portunity Act), the TANF program under part 
A of title IV of the Social Security Act, and 
other appropriate Federal and State programs 
that may assist unemployed, low-income adults 
in obtaining and retaining employment; 
(F) a description of the timelines for im-
plementation of the activities described in sub-
paragraph (A), and the number of unemployed, 
low-income adults expected to be placed in sub-
sidized employment by quarter; 
(G) assurances that the State will report 
such information as the Secretary of Labor may 
require relating to fiscal, performance and other 
matters that the Secretary determines is nec-
essary to effectively monitor the activities car-
ried out under this section; and 
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