In recent years, Congress passed legislation that modified the visa program for foreign workers who enter the country with H-1B visas to work in specialty occupations. Changes have included expanding the limits on the number of workers who may be approved for these visas from 65,000 to 195,000, providing Labor with additional enforcement authority, and establishing an employer fee to fund training of American workers. The American Competitiveness and Workforce Improvement Act of 1998 (P.L. 105-277) authorized programs to provide technical skills training and scholarships for low-income postsecondary students pursuing high technology fields of study. To fund these programs, it assessed a $500 fee on employers for each person for whom they submitted an application for an H-1B visa. In 2000, the H-1B visa application fee for employers was raised to $1,000. Also, the American Competitiveness in the Twenty-First Century Act (P.L 106-313) clarified some guidelines for administering the skill grant program and included Commerce as a consultant to the skill grant distribution process. The fee for employers who apply for H-1B visa workers, which funds the skill grants and scholarship grants, expires on September 30, 2003. Currently, 55 percent of the fees collected are distributed to Labor for skill grants and 22 percent are distributed to NSF for scholarship grants. The remaining 23 percent of the funds is to be used for other activities. The 2003 Labor budget proposed redirecting the skill grant funding beginning in fiscal year 2003 to reducing the backlog of applications submitted on behalf of foreign workers for permanent residency. In 1998, Congress also passed WIA, which replaced the Job Training Partnership Act (JTPA) and introduced various reforms to the coordination and delivery of federal employment and training services. WIA seeks to create a workforce investment system that connects employment, education, and training services to better match workers to labor market needs. WIA specifies separate funding sources for each of the act’s main client groups adults, dislocated workers, and youth. The American Competitiveness and Workforce Improvement Act of 1998 linked the H-1B skill grants to federally funded employment and training services administered by Labor by requiring that the grants be awarded to private industry councils, workforce investment boards or regional consortia of these boards. Labor is responsible for administering and overseeing the H-1B grant program on a national level, which includes compiling and collecting reports, maintaining an H-1B skill grants website, and providing technical assistance. Labor’s regional offices assign one staff person to each grantee within the region to serve as the front-line contact and monitor of the grantees. Through its Office of Policy and Research, Labor has awarded 43 skill grants totaling about $96 million distributed in three separate rounds in February 2000, July 2000, and October 2000, and an additional 24 grants totaling about $67 million were distributed in a rolling award process beginning in December 2001. Workforce investment boards or regional consortia of these can receive skill grants. For each application, a local workforce investment board must indicate that the project is consistent with, and will be coordinated with, the region’s workforce investment efforts. The 2000 law allotted 25 percent of the skill grants to business- related consortia; a first round was awarded in May 2002 to 14 grantees, totaling about $34 million. Labor convenes panels to review grant applications and recommends grantees for selection on the basis of specific criteria, such as target population, service delivery, and ability to meet labor market needs. Grantees have been required to submit a quarterly financial report and a quarterly narrative progress report. While Labor did not require a standard format for the narrative progress report until the quarter ending September 30, 2002, some grantees used a template developed by Labor that included numbers for the following: individuals continuing to be served from any quarter, individuals served during the quarter, individuals served since the beginning of the project, individuals newly enrolled, and individuals who exited without completion. Labor limited the amount of money grantees’ could spend on administrative costs to 10 percent of the funding and set the grant period at up to 2 years, although some grantees have received 1 year extensions at no additional cost. Grantees are required to obtain matching funds from other parties; the amount they have been required to obtain ranged from 25 percent to 50 percent of the grant, depending on the round in which they received their grant. Business consortia grantees are required to obtain matching funds of 100 percent of the grant they receive. The 2000 law provided specific guidance about the types of training that should be provided under the skill grants, which was absent from the 1998 law. It said that the training is not limited to skill levels commensurate with a 4-year undergraduate degree, but should include the preparation of workers for a broad range of positions along a career ladder. It also required that at least 80 percent of the grants be awarded to programs and projects that train employed and unemployed workers in skills in high technology, information technology, and biotechnology. The 1998 law did not elaborate on the nature of the training authorized and did not mention any particular occupations. NSF provides scholarship grants to schools that grant associate, baccalaureate, or graduate degrees. The schools are selected by panels that review applications from postsecondary schools. Students must be majoring in computer science, engineering, or math; must be enrolled in classes full-time; must demonstrate financial need; and must demonstrate academic potential and ability. Initially, only students who were eligible for Pell grants could be eligible for scholarships, but NSF later relaxed this requirement to include students who were eligible for any federal financial aid. Each student receives up to $3,125 per year for up to 4 years. As of May 2002, 277 schools have obtained grants ranging from $24,750 to $760,320 in a series of three rounds of grant awards totaling about $72 million. Schools may ask for an additional 5 percent of the total requested scholarship amount for administrative costs, an increase from the original 2 percent for the first set of grants awarded. Schools may also ask for an additional 5 percent of the total requested scholarship amount for student support services. Skill grantees use the grant program to offer training through a variety of service delivery options to people whose skills need to be upgraded; scholarship grantees use the scholarship program to offer traditional degree programs in mathematics, computer science, and engineering to low-income students. While the skill grant program requires grantees to create partnerships to implement the program, the nature of the partnerships is flexible. The grant training, which can be used to prepare workers for a range of occupations, can be offered to employed and unemployed individuals in a variety of settings. However, in the scholarship grant program, the postsecondary schools receiving grants provide scholarships toward undergraduate and graduate postsecondary education, with a goal of attracting and retaining low-income students in computer science, engineering, and mathematics degree programs. Some schools are having difficulty finding students eligible for the scholarship grant program to fill all available slots. NSF officials, however, believe that their change to a less strict standard for financial eligibility has made it easier to recruit students. In implementing their skill grant programs, grantees form partnerships to meet local workforce needs and to train diverse participants. However, many grantees have not planned for alternative funding to sustain the training program beyond the 2-year time frame allowed for the grant. The skill grant program requires grantees to create partnerships with local entities to implement the program, yet the nature of the partnerships is flexible. Data on participants are limited, however, because Labor does not require grantees to collect consistent participant and outcome information. Although many grantees have used the skill grant program to create innovative programs and build ties with new partners, many have not planned for alternative funding beyond the end of the grant period and may be unable to offer their program in the future. Skill grantees taking advantage of the skill grant program’s flexibility, have formed partnerships with local entities, and have used a variety of innovative service delivery options. For the first three rounds in which skill grants were awarded, workforce investment boards or private industry councils were required to submit grant proposals to Labor; however various partners initiated or implemented the skill grant training program to best meet local workforce needs. Other partners may include employers, unions, for-profit and not-for-profit training institutions, community colleges, public and private 4-year colleges, and other organizations such as business trade or industry associations or community and faith-based organizations. The following sites that we visited exemplify the variety of partner configurations and service delivery options. At several sites in various states, the grantee implemented the skill grant using local government, nonprofit or community based organizations that were also administering WIA programs. The skill grant funds were awarded either to employers to train current workers or individuals to upgrade their skill set. For example, one offered businesses grants of up to $50,000 to train their employees in information technology, electrical engineering, mechanical engineering, or precision manufacturing; another offered funds for IT training and targeted employed workers as well as dislocated (laid-off) workers, low-income people, and high school students. The local boards advertised the availability of training through standard advertising channels such as flyers, newspapers, and the one- stop centers. The training providers were chosen by the employer or the individuals participating in the programs. At a site in California, a major health care provider with thousands of employees partnered with the local board, the union, and training providers to address specific skill shortages within its company. Similarly, at a site in Massachusetts, unions at two manufacturing plants partnered with the local board, training providers, and the employers. For both grants, training was available primarily to company employees. In this arrangement, the local workforce boards were not heavily involved in the operation of the training program, but did connect the grant to the local workforce system.