The federal government currently provides support for career and technical education through the Carl D. Perkins Vocational and Technical Education Act of 1998 (Perkins III; P.L. 105-332 ). The act authorized funding for vocational and technical education through FY2003, although the Congress continued to provide funding under the act through FY2006. The 109 th Congress has passed and the President has signed the Carl D. Perkins Career and Technical Education Improvement Act of 2006 (Perkins IV; P.L. 109-270 ), which reauthorizes and amends the Perkins Act. The House version of the legislation (the Vocational and Technical Education for the Future Act, H.R. 366 ) was introduced on January 26, 2005. On March 17, 2005, the House Committee on Education and the Workforce reported H.R. 366 ( H.Rept. 109-25 ). By a vote of 416 to 9, the House passed H.R. 366 on May 4, 2005. The Senate version of the legislation was introduced as S. 250 on February 1, 2005. The Senate Committee on Health, Education, Labor, and Pensions (HELP) reported S. 250 on March 9, 2005, without a written committee report. The Senate passed S. 250 by a vote of 99 to 0 on March 10, 2005. The House substituted H.R. 366 for the Senate version of S. 250 and passed S. 250 (House version) on July 12, 2006, without objection. On July 20, 2006, the conferees met and agreed to file the conference report. The conference report ( H.Rept. 109-597 ) was filed on July 25, 2006. The Senate agreed to the conference report by unanimous consent on July 26, 2006. The House, by a vote of 399 to 1, agreed to the conference report on July 29, 2006. The President signed the bill on August 12, 2006, P.L. 109-270 . This report analyzes selected changes that P.L. 109-270 made to Perkins III. It begins with a detailed analysis of changes to funding formulas—both state allotments and within state allocations. Following this discussion, the report analyzes changes in accountability requirements, including changes to the core indicators of performance and data reporting, and related sanctions. Changes to state and local plans and uses of funds are then considered. The next section of the report examines changes made to the tech-prep program. The report concludes with changes made to the general provisions of the bill, most notably with respect to the equitable participation of private school students in career and technical education programs. Table 1 provides a general comparison of some of the key changes made by Perkins IV. Each of these changes is discussed in detail in a subsequent section of this report. It should be noted that the act provides funding to eligible agencies and eligible recipients. An eligible agency is the state board that functions as the sole state agency responsible for the administration or supervision of career and technical education in a specific state. An eligible recipient receives funding from the eligible agency and includes, for example, local educational agencies and public or nonprofit private institutions of higher education that offer career and technical education courses leading to various outcomes, such as an industry-recognized credential. P.L. 109-270 , the Carl D. Perkins Career and Technical Education Improvement Act of 2006, amends and revises the Perkins Act. It authorizes "such sums as may be necessary" for FY2007-FY2012 for Perkins Act programs and activities. The act refers to career and technical education (CTE) rather than vocational and technical education. Perkins IV retains the overall purpose of the act, making only technical changes. P.L. 109-270 also retains the overall structure of the Perkins Act. Sections 1 through 9 deal with certain overarching provisions, such as purposes of the act (Section 2), definitions that apply throughout the act (Section 3), and authorization of appropriations (Section 9). Title I of the act authorizes and specifies the central provisions of the act dealing with assistance to states for career and technical education. Title I-A deals with allotments and allocations. Title I-B specifies state provisions. Title I-C details local provisions. Title II of the act authorizes the tech-prep program. Title III contains general provisions related to federal administration of the program (Part A) and state administration (Part B). Section 9 of P.L. 109-270 authorizes appropriations for Title I of the act, except for three sections that have separate authorizations: Section 114, dealing with national activities; Section 117, authorizing funding for tribally controlled postsecondary career and technical institutions; and Section 118, authorizing funds for occupational and employment information. Perkins IV, like previous versions of the act, requires the Secretary of Education (Secretary) to reserve amounts for certain purposes from funds appropriated under Section 9. However, as shown in Table 2 , Perkins IV makes several changes in these reservations to reflect certain changes in the act. The amount reserved for assistance for outlying areas has been reduced from 0.2% of funds appropriated under Section 9 to 0.13%. This reduced percentage reflects the fact that two freely associated states (FASs)—Micronesia and the Marshall Islands—are no longer eligible for Perkins funding because the United States and these FASs have signed an agreement to extend their Compacts of Free Association. In addition, P.L. 109-270 increases the amount of direct grants to outlying areas (Section 115). Under Perkins III, Guam received a direct grant of $500,000 and American Samoa and the Northern Marianas each received direct grants of $190,000. Remaining funds were then distributed to the Pacific Regional Educational Laboratory (PREL), which would make grants to these three outlying areas and to eligible FASs. Under current law, direct grants are $660,000 for Guam and $350,000 each for American Samoa and the Northern Marianas. For the first fiscal year after the enactment of Perkins IV (FY2007), the Secretary distributes remaining funds to PREL as before. In subsequent years, remaining funds are divided equally among the three outlying areas. Finally, Palau receives a direct grant of $160,000 for as long as it is eligible for Perkins funding. As Table 2 illustrates, the percentage reserved for assistance for Indians and Native Hawaiians under Section 116 has not changed. However, the reservation for incentive grants has been repealed. These funds are now distributed to states under the " State Allotment Formula " discussed below. Of funds appropriated under Section 9, Perkins IV, slightly more than 98% is allotted to states based on the formula detailed in Section 111. The underlying formula is identical in Perkins III and Perkins IV: Funds are initially allotted based on three population groups (population ages 15 to 19, 20 to 24, and 25 to 65). These initial allotments are adjusted by states' per capita income (PCI), such that states with below average PCIs tend to receive somewhat increased grants, and those with above average PCIs tend to receive somewhat decreased grants. Perkins IV maintains the state allotment formula used under Perkins III unless "additional funds" are available above the FY2006 funding level. If funding allotted to states contains no "additional funds," the formula is unchanged. That is, the initial formula factors are applied, subject to the minimum grant provisions and to the provision that holds states harmless at 100% of their FY1998 grant amount. Assuming appropriations are level funded at the FY2006 amount, states with growing populations, such as Arizona and North Carolina, will tend to receive increased grants. States at their FY1998 grant amounts, such as Vermont and Wyoming, will continue to receive those grant amounts. Other states' grants will tend to decline, as funding shifts to states with more rapidly growing populations. P.L. 109-270 modifies the state allotment formula when there are "additional funds" above the amount allotted to states for FY2006. "Additional funds" are defined as amounts in excess of funds allotted to states for FY2006, plus the amount set-aside for incentive grants for FY2006 and $827,671. These additions to the amount allotted to states in the base year ensure that funds previously reserved for incentive grants and funds previously reserved for outlying areas no longer eligible for funding (the specified dollar amount) are not considered "additional funds," which trigger the formula changes discussed below. Table 3 illustrates how "additional funds" would be calculated assuming a 1% overall increase in FY2006 appropriations under Section 9. First the FY2006 state grant amount would be calculated by subtracting the set-asides from the total appropriation ($1.182 billion minus $26.5 million = $1.156 billion), which was the amount allotted by formula to states for FY2006. Next the amount for incentive grants ($6.384 million) and $827,671 are added to the state formula amount. This results in the FY2006 "base" amount of $1.163 billion. Any funds in excess of this base amount is defined as new money, which is allotted as described below. In Table 3 , this amount is $1.175 billion (the amount allotted to states by formula) minus $1.163 billion (the FY2006 base amount) which equals $11.631 million (the additional funds). Up to one-third of the "additional funds" (about $3.88 million based on the example in Table 3 ) would be allotted to states (except for the Virgin Islands) with FY2006 grants that are less than the minimum grant amount of ½% of the current-year funds allotted to states.