WORKFORCE INVESTMENT ACT OF 1998 Public Law 105-220--Aug. 7, 1998 112 Stat. 936 Public Law 105-220 105th Congress An Act To consolidate, coordinate, and improve employment, training, literacy, and vocational rehabilitation programs in the United States, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the ``Workforce Investment Act of 1998''. (b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--WORKFORCE INVESTMENT SYSTEMS Subtitle A--Workforce Investment Definitions Sec. 101. Definitions. Subtitle B--Statewide and Local Workforce Investment Systems Sec. 106. Purpose. Chapter 1--State Provisions Sec. 111. State workforce investment boards. Sec. 112. State plan. Chapter 2--Local Provisions Sec. 116. Local workforce investment areas. Sec. 117. Local workforce investment boards. Sec. 118. Local plan. Chapter 3--Workforce Investment Activities Providers Sec. 121. Establishment of one-stop delivery systems. Sec. 122. Identification of eligible providers of training services. Sec. 123. Identification of eligible providers of youth activities. Chapter 4--Youth Activities Sec. 126. General authorization. Sec. 127. State allotments. Sec. 128. Within State allocations. Sec. 129. Use of funds for youth activities. Chapter 5--Adult and Dislocated Worker Employment and Training Activities Sec. 131. General authorization. Sec. 132. State allotments. Sec. 133. Within State allocations. Sec. 134. Use of funds for employment and training activities. Chapter 6--General Provisions Sec. 136. Performance accountability system. Sec. 137. Authorization of appropriations. Subtitle C--Job Corps Sec. 141. Purposes. Sec. 142. Definitions. Sec. 143. Establishment. Sec. 144. Individuals eligible for the Job Corps. Sec. 145. Recruitment, screening, selection, and assignment of enrollees. Sec. 146. Enrollment. Sec. 147. Job Corps centers. Sec. 148. Program activities. Sec. 149. Counseling and job placement. Sec. 150. Support. Sec. 151. Operating plan. Sec. 152. Standards of conduct. Sec. 153. Community participation. Sec. 154. Industry councils. Sec. 155. Advisory committees. Sec. 156. Experimental, research, and demonstration projects. Sec. 157. Application of provisions of Federal law. Sec. 158. Special provisions. Sec. 159. Management information. Sec. 160. General provisions. Sec. 161. Authorization of appropriations. Subtitle D--National Programs Sec. 166. Native American programs. Sec. 167. Migrant and seasonal farmworker programs. Sec. 168. Veterans' workforce investment programs. Sec. 169. Youth opportunity grants. Sec. 170. Technical assistance. Sec. 171. Demonstration, pilot, multiservice, research, and multistate projects. Sec. 172. Evaluations. Sec. 173. National emergency grants. Sec. 174. Authorization of appropriations. Subtitle E--Administration Sec. 181. Requirements and restrictions. Sec. 182. Prompt allocation of funds. Sec. 183. Monitoring. Sec. 184. Fiscal controls; sanctions. Sec. 185. Reports; recordkeeping; investigations. Sec. 186. Administrative adjudication. Sec. 187. Judicial review. Sec. 188. Nondiscrimination. Sec. 189. Administrative provisions. Sec. 190. Reference. Sec. 191. State legislative authority. Sec. 192. Workforce flexibility plans. Sec. 193. Use of certain real property. Sec. 194. Continuation of State activities and policies. Sec. 195. General program requirements. Subtitle F--Repeals and Conforming Amendments Sec. 199. Repeals. Sec. 199A. Conforming amendments. TITLE II--ADULT EDUCATION AND LITERACY Sec. 201. Short title. Sec. 202. Purpose. Sec. 203. Definitions. Sec. 204. Home schools. Sec. 205. Authorization of appropriations. Subtitle A--Adult Education and Literacy Programs Chapter 1--Federal Provisions Sec. 211. Reservation; grants to eligible agencies; allotments. Sec. 212. Performance accountability system. Chapter 2--State Provisions Sec. 221. State administration. Sec. 222. State distribution of funds; matching requirement. Sec. 223. State leadership activities. Sec. 224. State plan. Sec. 225. Programs for corrections education and other institutionalized individuals. Chapter 3--Local Provisions Sec. 231. Grants and contracts for eligible providers. Sec. 232. Local application. Sec. 233. Local administrative cost limits. Chapter 4--General Provisions Sec. 241. Administrative provisions. Sec. 242. National Institute for Literacy. Sec. 243. National leadership activities. Subtitle B--Repeals Sec. 251. Repeals. TITLE III--WORKFORCE INVESTMENT-RELATED ACTIVITIES Subtitle A--Wagner-Peyser Act Sec. 301. Definitions. Sec. 302. Functions. Sec. 303. Designation of State agencies. Sec. 304. Appropriations. Sec. 305. Disposition of allotted funds. Sec. 306. State plans. Sec. 307. Repeal of Federal advisory council. Sec. 308. Regulations. Sec. 309. Employment statistics. Sec. 310. Technical amendments. Sec. 311. Effective date. Subtitle B--Linkages With Other Programs Sec. 321. Trade Act of 1974. Sec. 322. Veterans' employment programs. Sec. 323. Older Americans Act of 1965. Subtitle C--Twenty-First Century Workforce Commission Sec. 331. Short title. Sec. 332. Findings. Sec. 333. Definitions. Sec. 334. Establishment of Twenty-First Century Workforce Commission. Sec. 335. Duties of the Commission. Sec. 336. Powers of the Commission. Sec. 337. Commission personnel matters. Sec. 338. Termination of the Commission. Sec. 339. Authorization of appropriations. Subtitle D--Application of Civil Rights and Labor-Management Laws to the Smithsonian Institution Sec. 341. Application of civil rights and labor-management laws to the Smithsonian Institution. TITLE IV--REHABILITATION ACT AMENDMENTS OF 1998 Sec. 401. Short title. Sec. 402. Title. Sec. 403. General provisions. Sec. 404. Vocational rehabilitation services. Sec. 405. Research and training. Sec. 406. Professional development and special projects and demonstrations. Sec. 407. National Council on Disability. Sec. 408. Rights and advocacy. Sec. 409. Employment opportunities for individuals with disabilities. Sec. 410. Independent living services and centers for independent living. Sec. 411. Repeal. Sec. 412. Helen Keller National Center Act. Sec. 413. President's Committee on Employment of People With Disabilities. Sec. 414. Conforming amendments. TITLE V--GENERAL PROVISIONS Sec. 501. State unified plan. Sec. 502. Definitions for indicators of performance. Sec. 503. Incentive grants. Sec. 504. Privacy. Sec. 505. Buy-American requirements. Sec. 506. Transition provisions. Sec. 507. Effective date. TITLE I--WORKFORCE INVESTMENT SYSTEMS Subtitle A--Workforce Investment Definitions SEC. 101. DEFINITIONS. In this title: (1) Adult.--Except in sections 127 and 132, the term ``adult'' means an individual who is age 18 or older. (2) Adult education; adult education and literacy activities.-- The terms ``adult education'' and ``adult education and literacy activities'' have the meanings given the terms in section 203. (3) Area vocational education school.--The term ``area vocational education school'' has the meaning given the term in section 521 of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471). (4) Basic skills deficient.--The term ``basic skills deficient'' means, with respect to an individual, that the individual has English reading, writing, or computing skills at or below the 8th grade level on a generally accepted standardized test or a comparable score on a criterion-referenced test. (5) Case management.--The term ``case management'' means the provision of a client-centered approach in the delivery of services, designed-- (A) to prepare and coordinate comprehensive employment plans, such as service strategies, for participants to ensure access to necessary workforce investment activities and supportive services, using, where feasible, computer-based technologies; and (B) to provide job and career counseling during program participation and after job placement. (6) Chief elected official.--The term ``chief elected official'' means-- (A) the chief elected executive officer of a unit of general local government in a local area; and (B) in a case in which a local area includes more than one unit of general local government, the individuals designated under the agreement described in section 117(c)(1)(B). (7) Community-based organization.--The term ``community-based organization'' means a private nonprofit organization that is representative of a community or a significant segment of a community and that has demonstrated expertise and effectiveness in the field of workforce investment. (8) Customized training.--The term ``customized training'' means training-- (A) that is designed to meet the special requirements of an employer (including a group of employers); (B) that is conducted with a commitment by the employer to employ an individual on successful completion of the training; and (C) for which the employer pays for not less than 50 percent of the cost of the training. (9) Dislocated worker.--The term ``dislocated worker'' means an individual who-- (A)(i) has been terminated or laid off, or who has received a notice of termination or layoff, from employment; (ii)(I) is eligible for or has exhausted entitlement to unemployment compensation; or (II) has been employed for a duration sufficient to demonstrate, to the appropriate entity at a one-stop center referred to in section 134(c), attachment to the workforce, but is not eligible for unemployment compensation due to insufficient earnings or having performed services for an employer that were not covered under a State unemployment compensation law; and (iii) is unlikely to return to a previous industry or occupation; (B)(i) has been terminated or laid off, or has received a notice of termination or layoff, from employment as a result of any permanent closure of, or any substantial layoff at, a plant, facility, or enterprise; (ii) is employed at a facility at which the employer has made a general announcement that such facility will close within 180 days; or (iii) for purposes of eligibility to receive services other than training services described in section 134(d)(4), intensive services described in section 134(d)(3), or supportive services, is employed at a facility at which the employer has made a general announcement that such facility will close; (C) was self-employed (including employment as a farmer, a rancher, or a fisherman) but is unemployed as a result of general economic conditions in the community in which the individual resides or because of natural disasters; or (D) is a displaced homemaker. (10) Displaced homemaker.--The term ``displaced homemaker'' means an individual who has been providing unpaid services to family members in the home and who-- (A) has been dependent on the income of another family member but is no longer supported by that income; and (B) is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment. (11) Economic development agencies.--The term ``economic development agencies'' includes local planning and zoning commissions or boards, community development agencies, and other local agencies and institutions responsible for regulating, promoting, or assisting in local economic development. (12) Eligible provider.--The term ``eligible provider'', used with respect to-- (A) training services, means a provider who is identified in accordance with section 122(e)(3); (B) intensive services, means a provider who is identified or awarded a contract as described in section 134(d)(3)(B); (C) youth activities, means a provider who is awarded a grant or contract in accordance with section 123; or (D) other workforce investment activities, means a public or private entity selected to be responsible for such activities, such as a one-stop operator designated or certified under section 121(d). (13) Eligible youth.--Except as provided in subtitles C and D, the term ``eligible youth'' means an individual who-- (A) is not less than age 14 and not more than age 21; (B) is a low-income individual; and (C) is an individual who is one or more of the following: (i) Deficient in basic literacy skills. (ii) A school dropout. (iii) Homeless, a runaway, or a foster child. (iv) Pregnant or a parent. (v) An offender. (vi) An individual who requires additional assistance to complete an educational program, or to secure and hold employment. (14) Employment and training activity.--The term ``employment and training activity'' means an activity described in section 134 that is carried out for an adult or dislocated worker. (15) Family.--The term ``family'' means two or more persons related by blood, marriage, or decree of court, who are living in a single residence, and are included in one or more of the following categories: (A) A husband, wife, and dependent children. (B) A parent or guardian and dependent children. (C) A husband and wife. (16) Governor.--The term ``Governor'' means the chief executive of a State. (17) Individual with a disability.-- (A) In general.--The term ``individual with a disability'' means an individual with any disability (as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102)). (B) Individuals with disabilities.--The term ``individuals with disabilities'' means more than one individual with a disability. (18) Labor market area.--The term ``labor market area'' means an economically integrated geographic area within which individuals can reside and find employment within a reasonable distance or can readily change employment without changing their place of residence. Such an area shall be identified in accordance with criteria used by the Bureau of Labor Statistics of the Department of Labor in defining such areas or similar criteria established by a Governor. (19) Literacy.--The term ``literacy'' has the meaning given the term in section 203. (20) Local area.--The term ``local area'' means a local workforce investment area designated under section 116. (21) Local board.--The term ``local board'' means a local workforce investment board established under section 117. (22) Local performance measure.--The term ``local performance measure'' means a performance measure established under section 136(c). (23) Local educational agency.--The term ``local educational agency'' has the meaning given the term in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801). (24) Lower living standard income level.--The term ``lower living standard income level'' means that income level (adjusted for regional, metropolitan, urban, and rural differences and family size) determined annually by the Secretary based on the most recent lower living family budget issued by the Secretary. (25) Low-income individual.--The term ``low-income individual'' means an individual who-- (A) receives, or is a member of a family that receives, cash payments under a Federal, State, or local income-based public assistance program; (B) received an income, or is a member of a family that received a total family income, for the 6-month period prior to application for the program involved (exclusive of unemployment compensation, child support payments, payments described in subparagraph (A), and old-age and survivors insurance benefits received under section 202 of the Social Security Act (42 U.S.C. 402)) that, in relation to family size, does not exceed the higher of-- (i) the poverty line, for an equivalent period; or (ii) 70 percent of the lower living standard income level, for an equivalent period; (C) is a member of a household that receives (or has been determined within the 6-month period prior to application for the program involved to be eligible to receive) food stamps pursuant to the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.); (D) qualifies as a homeless individual, as defined in subsections (a) and (c) of section 103 of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11302); (E) is a foster child on behalf of whom State or local government payments are made; or (F) in cases permitted by regulations promulgated by the Secretary of Labor, is an individual with a disability whose own income meets the requirements of a program described in subparagraph (A) or of subparagraph (B), but who is a member of a family whose income does not meet such requirements. (26) Nontraditional employment.--The term ``nontraditional employment'' refers to occupations or fields of work for which individuals from one gender comprise less than 25 percent of the individuals employed in each such occupation or field of work. (27) Offender.--The term ``offender'' means any adult or juvenile-- (A) who is or has been subject to any stage of the criminal justice process, for whom services under this Act may be beneficial; or (B) who requires assistance in overcoming artificial barriers to employment resulting from a record of arrest or conviction. (28) Older individual.--The term ``older individual'' means an individual age 55 or older. (29) One-stop operator.--The term ``one-stop operator'' means 1 or more entities designated or certified under section 121(d). (30) One-stop partner.--The term ``one-stop partner'' means-- (A) an entity described in section 121(b)(1); and (B) an entity described in section 121(b)(2) that is participating, with the approval of the local board and chief elected official, in the operation of a one-stop delivery system. (31) On-the-job training.--The term ``on-the-job training'' means training by an employer that is provided to a paid participant while engaged in productive work in a job that-- (A) provides knowledge or skills essential to the full and adequate performance of the job; (B) provides reimbursement to the employer of up to 50 percent of the wage rate of the participant, for the extraordinary costs of providing the training and additional supervision related to the training; and (C) is limited in duration as appropriate to the occupation for which the participant is being trained, taking into account the content of the training, the prior work experience of the participant, and the service strategy of the participant, as appropriate. (32) Outlying area.--The term ``outlying area'' means the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. (33) Out-of-school youth.--The term ``out-of-school youth'' means-- (A) an eligible youth who is a school dropout; or (B) an eligible youth who has received a secondary school diploma or its equivalent but is basic skills deficient, unemployed, or underemployed. (34) Participant.--The term ``participant'' means an individual who has been determined to be eligible to participate in and who is receiving services (except followup services authorized under this title) under a program authorized by this title. Participation shall be deemed to commence on the first day, following determination of eligibility, on which the individual began receiving subsidized employment, training, or other services provided under this title. (35) Postsecondary educational institution.--The term ``postsecondary educational institution'' means an institution of higher education, as defined in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088). (36) Poverty line.--The term ``poverty line'' means the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved. (37) Public assistance.--The term ``public assistance'' means Federal, State, or local government cash payments for which eligibility is determined by a needs or income test. (38) Rapid response activity.--The term ``rapid response activity'' means an activity provided by a State, or by an entity designated by a State, with funds provided by the State under section 134(a)(1)(A), in the case of a permanent closure or mass layoff at a plant, facility, or enterprise, or a natural or other disaster, that results in mass job dislocation, in order to assist dislocated workers in obtaining reemployment as soon as possible, with services including-- (A) the establishment of onsite contact with employers and employee representatives-- (i) immediately after the State is notified of a current or projected permanent closure or mass layoff; or (ii) in the case of a disaster, immediately after the State is made aware of mass job dislocation as a result of such disaster; (B) the provision of information and access to available employment and training activities; (C) assistance in establishing a labor-management committee, voluntarily agreed to by labor and management, with the ability to devise and implement a strategy for assessing the employment and training needs of dislocated workers and obtaining services to meet such needs; (D) the provision of emergency assistance adapted to the particular closure, layoff, or disaster; and (E) the provision of assistance to the local community in developing a coordinated response and in obtaining access to State economic development assistance. (39) School dropout.--The term ``school dropout'' means an individual who is no longer attending any school and who has not received a secondary school diploma or its recognized equivalent. (40) Secondary school.--The term ``secondary school'' has the meaning given the term in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801). (41) Secretary.--The term ``Secretary'' means the Secretary of Labor, and the term means such Secretary for purposes of section 503. (42) State.--The term ``State'' means each of the several States of the United States, the District of Columbia, and the Commonwealth of Puerto Rico. (43) State adjusted level of performance.--The term ``State adjusted level of performance'' means a level described in clause (iii) or (v) of section 136(b)(3)(A). (44) State board.--The term ``State board'' means a State workforce investment board established under section 111. (45) State performance measure.--The term ``State performance measure'' means a performance measure established under section 136(b). (46) Supportive services.--The term ``supportive services'' means services such as transportation, child care, dependent care, housing, and needs-related payments, that are necessary to enable an individual to participate in activities authorized under this title, consistent with the provisions of this title. (47) Unemployed individual.--The term ``unemployed individual'' means an individual who is without a job and who wants and is available for work. The determination of whether an individual is without a job shall be made in accordance with the criteria used by the Bureau of Labor Statistics of the Department of Labor in defining individuals as unemployed. (48) Unit of general local government.--The term ``unit of general local government'' means any general purpose political subdivision of a State that has the power to levy taxes and spend funds, as well as general corporate and police powers. (49) Veteran; related definition.-- (A) Veteran.--The term ``veteran'' means an individual who served in the active military, naval, or air service, and who was discharged or released from such service under conditions other than dishonorable. (B) Recently separated veteran.--The term ``recently separated veteran'' means any veteran who applies for participation under this title within 48 months after the discharge or release from active military, naval, or air service. (50) Vocational education.--The term ``vocational education'' has the meaning given the term in section 521 of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471). (51) Workforce investment activity.--The term ``workforce investment activity'' means an employment and training activity, and a youth activity. (52) Youth activity.--The term ``youth activity'' means an activity described in section 129 that is carried out for eligible youth (or as described in section 129(c)(5)). (53) Youth council.--The term ``youth council'' means a council established under section 117(h). Subtitle B--Statewide and Local Workforce Investment Systems SEC. 106. PURPOSE. The purpose of this subtitle is to provide workforce investment activities, through statewide and local workforce investment systems, that increase the employment, retention, and earnings of participants, and increase occupational skill attainment by participants, and, as a result, improve the quality of the workforce, reduce welfare dependency, and enhance the productivity and competitiveness of the Nation. CHAPTER 1--STATE PROVISIONS SEC. 111. STATE WORKFORCE INVESTMENT BOARDS. (a) In General.--The Governor of a State shall establish a State workforce investment board to assist in the development of the State plan described in section 112 and to carry out the other functions described in subsection (d). (b) Membership.-- (1) In general.--The State Board shall include-- (A) the Governor; (B) 2 members of each chamber of the State legislature, appointed by the appropriate presiding officers of each such chamber; and (C) representatives appointed by the Governor, who are-- (i) representatives of business in the State, who-- (I) are owners of businesses, chief executives or operating officers of businesses, and other business executives or employers with optimum policymaking or hiring authority, including members of local boards described in section 117(b)(2)(A)(i); (II) represent businesses with employment opportunities that reflect the employment opportunities of the State; and (III) are appointed from among individuals nominated by State business organizations and business trade associations; (ii) chief elected officials (representing both cities and counties, where appropriate); (iii) representatives of labor organizations, who have been nominated by State labor federations; (iv) representatives of individuals and organizations that have experience with respect to youth activities; (v) representatives of individuals and organizations that have experience and expertise in the delivery of workforce investment activities, including chief executive officers of community colleges and community-based organizations within the State; (vi)(I) the lead State agency officials with responsibility for the programs and activities that are described in section 121(b) and carried out by one-stop partners; and (II) in any case in which no lead State agency official has responsibility for such a program, service, or activity, a representative in the State with expertise relating to such program, service, or activity; and (vii) such other representatives and State agency officials as the Governor may designate, such as the State agency officials responsible for economic development and juvenile justice programs in the State. (2) Authority and regional representation of board members.-- Members of the board that represent organizations, agencies, or other entities shall be individuals with optimum policymaking authority within the organizations, agencies, or entities. The members of the board shall represent diverse regions of the State, including urban, rural, and suburban areas. (3) Majority.--A majority of the members of the State Board shall be representatives described in paragraph (1)(C)(i). (c) Chairman.--The Governor shall select a chairperson for the State Board from among the representatives described in subsection (b)(1)(C)(i). (d) Functions.--The State Board shall assist the Governor in-- (1) development of the State plan; (2) development and continuous improvement of a statewide system of activities that are funded under this subtitle or carried out through a one-stop delivery system described in section 134(c) that receives funds under this subtitle (referred to in this title as a ``statewide workforce investment system''), including-- (A) development of linkages in order to assure coordination and nonduplication among the programs and activities described in section 121(b); and (B) review of local plans; (3) commenting at least once annually on the measures taken pursuant to section 113(b)(14) of the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C 2323(b)(14)); (4) designation of local areas as required in section 116; (5) development of allocation formulas for the distribution of funds for adult employment and training activities and youth activities to local areas as permitted under sections 128(b)(3)(B) and 133(b)(3)(B); (6) development and continuous improvement of comprehensive State performance measures, including State adjusted levels of performance, to assess the effectiveness of the workforce investment activities in the State as required under section 136(b); (7) preparation of the annual report to the Secretary described in section 136(d); (8) development of the statewide employment statistics system described in section 15(e) of the Wagner-Peyser Act; and (9) development of an application for an incentive grant under section 503. (e) Alternative Entity.-- (1) In general.--For purposes of complying with subsections (a), (b), and (c), a State may use any State entity (including a State council, State workforce development board, combination of regional workforce development boards, or similar entity) that-- (A) was in existence on December 31, 1997; (B)(i) was established pursuant to section 122 or title VII of the Job Training Partnership Act, as in effect on December 31, 1997; or (ii) is substantially similar to the State board described in subsections (a), (b), and (c); and (C) includes representatives of business in the State and representatives of labor organizations in the State. (2) References.--References in this Act to a State board shall be considered to include such an entity. (f) Conflict of Interest.--A member of a State board may not-- (1) vote on a matter under consideration by the State board-- (A) regarding the provision of services by such member (or by an entity that such member represents); or (B) that would provide direct financial benefit to such member or the immediate family of such member; or (2) engage in any other activity determined by the Governor to constitute a conflict of interest as specified in the State plan. (g) Sunshine Provision.--The State board shall make available to the public, on a regular basis through open meetings, information regarding the activities of the State board, including information regarding the State plan prior to submission of the plan, information regarding membership, and, on request, minutes of formal meetings of the State board. SEC. 112. STATE PLAN. (a) In General.--For a State to be eligible to receive an allotment under section 127 or 132, or to receive financial assistance under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), the Governor of the State shall submit to the Secretary for consideration by the Secretary, a single State plan (referred to in this title as the ``State plan'') that outlines a 5-year strategy for the statewide workforce investment system of the State and that meets the requirements of section 111 and this section. (b) Contents.--The State plan shall include-- (1) a description of the State board, including a description of the manner in which such board collaborated in the development of the State plan and a description of how the board will continue to collaborate in carrying out the functions described in section 111(d); (2) a description of State-imposed requirements for the statewide workforce investment system; (3) a description of the State performance accountability system developed for the workforce investment activities to be carried out through the statewide workforce investment system, that includes information identifying State performance measures as described in section 136(b)(3)(A)(ii); (4) information describing-- (A) the needs of the State with regard to current and projected employment opportunities, by occupation; (B) the job skills necessary to obtain such employment opportunities; (C) the skills and economic development needs of the State; and (D) the type and availability of workforce investment activities in the State; (5) an identification of local areas designated in the State, including a description of the process used for the designation of such areas; (6) an identification of criteria to be used by chief elected officials for the appointment of members of local boards based on the requirements of section 117; (7) the detailed plans required under section 8 of the Wagner-Peyser Act (29 U.S.C. 49g); (8)(A) a description of the procedures that will be taken by the State to assure coordination of and avoid duplication among-- (i) workforce investment activities authorized under this title; (ii) other activities authorized under this title; (iii) programs authorized under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), title II of this Act, title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), and section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)), activities authorized under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.), and postsecondary vocational education activities authorized under the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 et seq.); (iv) work programs authorized under section 6(o) of the Food Stamp Act of 1977 (7 U.S.C. 2015(o)); (v) activities authorized under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.); (vi) activities authorized under chapter 41 of title 38, United States Code; (vii) employment and training activities carried out under the Community Services Block Grant Act (42 U.S.C. 9901 et seq.); (viii) activities authorized under the National and Community Service Act of 1990 (42 U.S.C. 12501 et seq.); (ix) employment and training activities carried out by the Department of Housing and Urban Development; and (x) programs authorized under State unemployment compensation laws (in accordance with applicable Federal law); and (B) a description of the common data collection and reporting processes used for the programs and activities described in subparagraph (A); (9) a description of the process used by the State, consistent with section 111(g), to provide an opportunity for public comment, including comment by representatives of businesses and representatives of labor organizations, and input into development of the plan, prior to submission of the plan; (10) information identifying how the State will use funds the State receives under this subtitle to leverage other Federal, State, local, and private resources, in order to maximize the effectiveness of such resources, and to expand the participation of business, employees, and individuals in the statewide workforce investment system; (11) assurances that the State will provide, in accordance with section 184 for fiscal control and fund accounting procedures that may be necessary to ensure the proper disbursement of, and accounting for, funds paid to the State through the allotments made under sections 127 and 132; (12)(A) a description of the methods and factors the State will use in distributing funds to local areas for youth activities and adult employment and training activities under sections 128(b)(3)(B) and 133(b)(3)(B), including-- (i) a description of how the individuals and entities represented on the State board were involved in determining such methods and factors of distribution; and (ii) a description of how the State consulted with chief elected officials in local areas throughout the State in determining such distribution; (B) assurances that the funds will be distributed equitably throughout the State, and that no local areas will suffer significant shifts in funding from year to year; and (C) a description of the formula prescribed by the Governor pursuant to section 133(b)(2)(B) for the allocation of funds to local areas for dislocated worker employment and training activities; (13) information specifying the actions that constitute a conflict of interest prohibited in the State for purposes of sections 111(f) and 117(g); (14) with respect to the one-stop delivery systems described in section 134(c) (referred to individually in this title as a ``one- stop delivery system''), a description of the strategy of the State for assisting local areas in development and implementation of fully operational one-stop delivery systems in the State; (15) a description of the appeals process referred to in section 116(a)(5); (16) a description of the competitive process to be used by the State to award grants and contracts in the State for activities carried out under this title; (17) with respect to the employment and training activities authorized in section 134-- (A) a description of-- (i) the employment and training activities that will be carried out with the funds received by the State through the allotment made under section 132; (ii) how the State will provide rapid response activities to dislocated workers from funds reserved under section 133(a)(2) for such purposes, including the designation of an identifiable State rapid response dislocated worker unit to carry out statewide rapid response activities; (iii) the procedures the local boards in the State will use to identify eligible providers of training services described in section 134(d)(4) (other than on-the-job training or customized training), as required under section 122; and (iv) how the State will serve the employment and training needs of dislocated workers (including displaced homemakers), low-income individuals (including recipients of public assistance), individuals training for nontraditional employment, and other individuals with multiple barriers to employment (including older individuals and individuals with disabilities); and (B) an assurance that veterans will be afforded the employment and training activities by the State, to the extent practicable; and (18) with respect to youth activities authorized in section 129, information-- (A) describing the State strategy for providing comprehensive services to eligible youth, particularly those eligible youth who are recognized as having significant barriers to employment; (B) identifying the criteria to be used by local boards in awarding grants for youth activities, including criteria that the Governor and local boards will use to identify effective and ineffective youth activities and providers of such activities; (C) describing how the State will coordinate the youth activities carried out in the State under section 129 with the services provided by Job Corps centers in the State (where such centers exist); and (D) describing how the State will coordinate youth activities described in subparagraph (C) with activities carried out through the youth opportunity grants under section 169. (c) Plan Submission and Approval.--A State plan submitted to the Secretary under this section by a Governor shall be considered to be approved by the Secretary at the end of the 90-day period beginning on the day the Secretary receives the plan, unless the Secretary makes a written determination, during the 90-day period, that-- (1) the plan is inconsistent with the provisions of this title; and (2) in the case of the portion of the plan described in section 8(a) of the Wagner-Peyser Act (29 U.S.C. 49g(a)), the portion does not satisfy the criteria for approval provided in section 8(d) of such Act. (d) Modifications to Plan.--A State may submit modifications to a State plan in accordance with the requirements of this section and section 111 as necessary during the 5-year period covered by the plan. CHAPTER 2--LOCAL PROVISIONS SEC. 116. LOCAL WORKFORCE INVESTMENT AREAS. (a) Designation of Areas.-- (1) In general.-- (A) Process.--Except as provided in subsection (b), and consistent with paragraphs (2), (3), and (4), in order for a State to receive an allotment under section 127 or 132, the Governor of the State shall designate local workforce investment areas within the State-- (i) through consultation with the State board; and (ii) after consultation with chief elected officials and after consideration of comments received through the public comment process as described in section 112(b)(9). (B) Considerations.--In making the designation of local areas, the Governor shall take into consideration the following: (i) Geographic areas served by local educational agencies and intermediate educational agencies. (ii) Geographic areas served by postsecondary educational institutions and area vocational education schools. (iii) The extent to which such local areas are consistent with labor market areas. (iv) The distance that individuals will need to travel to receive services provided in such local areas. (v) The resources of such local areas that are available to effectively administer the activities carried out under this subtitle. (2) Automatic designation.--The Governor shall approve any request for designation as a local area-- (A) from any unit of general local government with a population of 500,000 or more; (B) of the area served by a rural concentrated employment program grant recipient of demonstrated effectiveness that served as a service delivery area or substate area under the Job Training Partnership Act, if the grant recipient has submitted the request; and (C) of an area that served as a service delivery area under section 101(a)(4)(A)(ii) of the Job Training Partnership Act (as in effect on the day before the date of enactment of this Act) in a State that has a population of not more than 1,100,000 and a population density greater than 900 persons per square mile. (3) Temporary and subsequent designation.-- (A) Criteria.--Notwithstanding paragraph (2)(A), the Governor shall approve any request, made not later than the date of submission of the initial State plan under this subtitle, for temporary designation as a local area from any unit of general local government (including a combination of such units) with a population of 200,000 or more that was a service delivery area under the Job Training Partnership Act on the day before the date of enactment of this Act if the Governor determines that the area-- (i) performed successfully, in each of the last 2 years prior to the request for which data are available, in the delivery of services to participants under part A of title II and title III of the Job Training Partnership Act (as in effect on such day); and (ii) has sustained the fiscal integrity of the funds used by the area to carry out activities under such part and title. (B) Duration and subsequent designation.--A temporary designation under this paragraph shall be for a period of not more than 2 years, after which the designation shall be extended until the end of the period covered by the State plan if the Governor determines that, during the temporary designation period, the area substantially met (as defined by the State board) the local performance measures for the local area and sustained the fiscal integrity of the funds used by the area to carry out activities under this subtitle. (C) Technical assistance.--The Secretary shall provide the States with technical assistance in making the determinations required by this paragraph. The Secretary shall not issue regulations governing determinations to be made under this paragraph. (D) Performed successfully.--In this paragraph, the term ``performed successfully'' means that the area involved met or exceeded the performance standards for activities administered in the area that-- (i) are established by the Secretary for each year and modified by the adjustment methodology of the State (used to account for differences in economic conditions, participant characteristics, and combination of services provided from the combination assumed for purposes of the established standards of the Secretary); and (ii)(I) if the area was designated as both a service delivery area and a substate area under the Job Training Partnership Act (as in effect on the day before the date of enactment of this Act)-- (aa) relate to job retention and earnings, with respect to activities carried out under part A of title II of such Act (as in effect on such day); or (bb) relate to entry into employment, with respect to activities carried out under title III of such Act (as in effect on such day); (II) if the area was designated only as a service delivery area under such Act (as in effect on such day), relate to the standards described in subclause (I)(aa); or (III) if the area was only designated as a substate area under such Act (as in effect on such day), relate to the standards described in subclause (I)(bb). (E) Sustained the fiscal integrity.--In this paragraph, the term ``sustained the fiscal integrity'', used with respect to funds used by a service delivery area or local area, means that the Secretary has not made a final determination during any of the last 3 years for which data are available, prior to the date of the designation request involved, that either the grant recipient or the administrative entity of the area misexpended the funds due to willful disregard of the requirements of the Act involved, gross negligence, or failure to observe accepted standards of administration. (4) Designation on recommendation of state board.--The Governor may approve a request from any unit of general local government (including a combination of such units) for designation (including temporary designation) as a local area if the State board determines, taking into account the factors described in clauses (i) through (v) of paragraph (1)(B), and recommends to the Governor, that such area should be so designated. (5) Appeals.--A unit of general local government (including a combination of such units) or grant recipient that requests but is not granted designation of an area as a local area under paragraph (2) or (3) may submit an appeal to the State board under an appeal process established in the State plan. If the appeal does not result in such a designation, the Secretary, after receiving a request for review from the unit or grant recipient and on determining that the unit or grant recipient was not accorded procedural rights under the appeal process established in the State plan or that the area meets the requirements of paragraph (2) or (3), as appropriate, may require that the area be designated as a local area under such paragraph. (b) Small States.--The Governor of any State that was a single State service delivery area under the Job Training Partnership Act as of July 1, 1998, may designate the State as a single State local area for the purposes of this title. In the case of such a designation, the Governor shall identify the State as a local area under section 112(b)(5). (c) Regional Planning and Cooperation.-- (1) Planning.--As part of the process for developing the State plan, a State may require regional planning by local boards for a designated region in the State. The State may require the local boards for a designated region to participate in a regional planning process that results in the establishment of regional performance measures for workforce investment activities authorized under this subtitle. The State may award regional incentive grants to the designated regions that meet or exceed the regional performance measures. (2) Information sharing.--The State may require the local boards for a designated region to share, in feasible cases, employment statistics, information about employment opportunities and trends, and other types of information that would assist in improving the performance of all local areas in the designated region on local performance measures. (3) Coordination of services.--The State may require the local boards for a designated region to coordinate the provision of workforce investment activities authorized under this subtitle, including the provision of transportation and other supportive services, so that services provided through the activities may be provided across the boundaries of local areas within the designated region. (4) Interstate regions.--Two or more States that contain an interstate region that is a labor market area, economic development region, or other appropriate contiguous subarea of the States may designate the area as a designated region for purposes of this subsection, and jointly exercise the State functions described in paragraphs (1) through (3). (5) Definitions.--In this subsection: (A) Designated region.--The term ``designated region'' means a combination of local areas that are partly or completely in a single labor market area, economic development region, or other appropriate contiguous subarea of a State, that is designated by the State, except as provided in paragraph (4). (B) Local board for a designated region.--The term ``local board for a designated region'' means a local board for a local area in a designated region. SEC. 117. LOCAL WORKFORCE INVESTMENT BOARDS. (a) Establishment.--There shall be established in each local area of a State, and certified by the Governor of the State, a local workforce investment board, to set policy for the portion of the statewide workforce investment system within the local area (referred to in this title as a ``local workforce investment system''). (b) Membership.-- (1) State criteria.--The Governor of the State, in partnership with the State board, shall establish criteria for use by chief elected officials in the local areas for appointment of members of the local boards in such local areas in accordance with the requirements of paragraph (2). (2) Composition.--Such criteria shall require, at a minimum, that the membership of each local board-- (A) shall include-- (i) representatives of business in the local area, who-- (I) are owners of businesses, chief executives or operating officers of businesses, and other business executives or employers with optimum policymaking or hiring authority; (II) represent businesses with employment opportunities that reflect the employment opportunities of the local area; and (III) are appointed from among individuals nominated by local business organizations and business trade associations; (ii) representatives of local educational entities, including representatives of local educational agencies, local school boards, entities providing adult education and literacy activities, and postsecondary educational institutions (including representatives of community colleges, where such entities exist), selected from among individuals nominated by regional or local educational agencies, institutions, or organizations representing such local educational entities; (iii) representatives of labor organizations (for a local area in which employees are represented by labor organizations), nominated by local labor federations, or (for a local area in which no employees are represented by such organizations), other representatives of employees; (iv) representatives of community-based organizations (including organizations representing individuals with disabilities and veterans, for a local area in which such organizations are present); (v) representatives of economic development agencies, including private sector economic development entities; and (vi) representatives of each of the one-stop partners; and (B) may include such other individuals or representatives of entities as the chief elected official in the local area may determine to be appropriate. (3) Authority of board members.--Members of the board that represent organizations, agencies, or other entities shall be individuals with optimum policymaking authority within the organizations, agencies, or entities. (4) Majority.--A majority of the members of the local board shall be representatives described in paragraph (2)(A)(i). (5) Chairperson.--The local board shall elect a chairperson for the local board from among the representatives described in paragraph (2)(A)(i). (c) Appointment and Certification of Board.-- (1) Appointment of board members and assignment of responsibilities.-- (A) In general.--The chief elected official in a local area is authorized to appoint the members of the local board for such area, in accordance with the State criteria established under subsection (b). (B) Multiple units of local government in area.-- (i) In general.--In a case in which a local area includes more than 1 unit of general local government, the chief elected officials of such units may execute an agreement that specifies the respective roles of the individual chief elected officials-- (I) in the appointment of the members of the local board from the individuals nominated or recommended to be such members in accordance with the criteria established under subsection (b); and (II) in carrying out any other responsibilities assigned to such officials under this subtitle. (ii) Lack of agreement.--If, after a reasonable effort, the chief elected officials are unable to reach agreement as provided under clause (i), the Governor may appoint the members of the local board from individuals so nominated or recommended. (C) Concentrated employment programs.--In the case of a local area designated in accordance with section 116(a)(2)(B), the governing body of the concentrated employment program involved shall act in consultation with the chief elected official in the local area to appoint members of the local board, in accordance with the State criteria established under subsection (b), and to carry out any other responsibility relating to workforce investment activities assigned to such official under this Act. (2) Certification.-- (A) In general.--The Governor shall, once every 2 years, certify 1 local board for each local area in the State. (B) Criteria.--Such certification shall be based on criteria established under subsection (b) and, for a second or subsequent certification, the extent to which the local board has ensured that workforce investment activities carried out in the local area have enabled the local area to meet the local performance measures. (C) Failure to achieve certification.--Failure of a local board to achieve certification shall result in reappointment and certification of another local board for the local area pursuant to the process described in paragraph (1) and this paragraph. (3) Decertification.-- (A) Fraud, abuse, failure to carry out functions.-- Notwithstanding paragraph (2), the Governor may decertify a local board, at any time after providing notice and an opportunity for comment, for-- (i) fraud or abuse; or (ii) failure to carry out the functions specified for the local board in any of paragraphs (1) through (7) of subsection (d). (B) Nonperformance.--Notwithstanding paragraph (2), the Governor may decertify a local board if a local area fails to meet the local performance measures for such local area for 2 consecutive program years (in accordance with section 136(h)). (C) Plan.--If the Governor decertifies a local board for a local area under subparagraph (A) or (B), the Governor may require that a new local board be appointed and certified for the local area pursuant to a reorganization plan developed by the Governor, in consultation with the chief elected official in the local area, and in accordance with the criteria established under subsection (b). (4) Single state area.--Notwithstanding subsection (b) and paragraphs (1) and (2), if a State described in section 116(b) indicates in the State plan that the State will be treated as a local area for purposes of the application of this title, the Governor may designate the State board to carry out any of the functions described in subsection (d). (d) Functions of Local Board.--The functions of the local board shall include the following: (1) Local plan.--Consistent with section 118, each local board, in partnership with the chief elected official for the local area involved, shall develop and submit a local plan to the Governor. (2) Selection of operators and providers.-- (A) Selection of one-stop operators.--Consistent with section 121(d), the local board, with the agreement of the chief elected official-- (i) shall designate or certify one-stop operators as described in section 121(d)(2)(A); and (ii) may terminate for cause the eligibility of such operators. (B) Selection of youth providers.--Consistent with section 123, the local board shall identify eligible providers of youth activities in the local area by awarding grants or contracts on a competitive basis, based on the recommendations of the youth council. (C) Identification of eligible providers of training services.--Consistent with section 122, the local board shall identify eligible providers of training services described in section 134(d)(4) in the local area. (D) Identification of eligible providers of intensive services.--If the one-stop operator does not provide intensive services in a local area, the local board shall identify eligible providers of intensive services described in section 134(d)(3) in the local area by awarding contracts. (3) Budget and administration.-- (A) Budget.--The local board shall develop a budget for the purpose of carrying out the duties of the local board under this section, subject to the approval of the chief elected official. (B) Administration.-- (i) Grant recipient.-- (I) In general.--The chief elected official in a local area shall serve as the local grant recipient for, and shall be liable for any misuse of, the grant funds allocated to the local area under sections 128 and 133, unless the chief elected official reaches an agreement with the Governor for the Governor to act as the local grant recipient and bear such liability. (II) Designation.--In order to assist in the administration of the grant funds, the chief elected official or the Governor, where the Governor serves as the local grant recipient for a local area, may designate an entity to serve as a local grant subrecipient for such funds or as a local fiscal agent. Such designation shall not relieve the chief elected official or the Governor of the liability for any misuse of grant funds as described in subclause (I). (III) Disbursal.--The local grant recipient or an entity designated under subclause (II) shall disburse such funds for workforce investment activities at the direction of the local board, pursuant to the requirements of this title, if the direction does not violate a provision of this Act. The local grant recipient or entity designated under subclause (II) shall disburse the funds immediately on receiving such direction from the local board. (ii) Staff.--The local board may employ staff. (iii) Grants and donations.--The local board may solicit and accept grants and donations from sources other than Federal funds made available under this Act. (4) Program oversight.--The local board, in partnership with the chief elected official, shall conduct oversight with respect to local programs of youth activities authorized under section 129, local employment and training activities authorized under section 134, and the one-stop delivery system in the local area. (5) Negotiation of local performance measures.--The local board, the chief elected official, and the Governor shall negotiate and reach agreement on local performance measures as described in section 136(c). (6) Employment statistics system.--The local board shall assist the Governor in developing the statewide employment statistics system described in section 15(e) of the Wagner-Peyser Act. (7) Employer linkages.--The local board shall coordinate the workforce investment activities authorized under this subtitle and carried out in the local area with economic development strategies and develop other employer linkages with such activities. (8) Connecting, brokering, and coaching.--The local board shall promote the participation of private sector employers in the statewide workforce investment system and ensure the effective provision, through the system, of connecting, brokering, and coaching activities, through intermediaries such as the one-stop operator in the local area or through other organizations, to assist such employers in meeting hiring needs. (e) Sunshine Provision.--The local board shall make available to the public, on a regular basis through open meetings, information regarding the activities of the local board, including information regarding the local plan prior to submission of the plan, and regarding membership, the designation and certification of one-stop operators, and the award of grants or contracts to eligible providers of youth activities, and on request, minutes of formal meetings of the local board. (f) Limitations.-- (1) Training services.-- (A) In general.--Except as provided in subparagraph (B), no local board may provide training services described in section 134(d)(4). (B) Waivers of training prohibition.--The Governor of the State in which a local board is located may, pursuant to a request from the local board, grant a written waiver of the prohibition set forth in subparagraph (A) (relating to the provision of training services) for a program of training services, if the local board-- (i) submits to the Governor a proposed request for the waiver that includes-- (I) satisfactory evidence that there is an insufficient number of eligible providers of such a program of training services to meet local demand in the local area; (II) information demonstrating that the board meets the requirements for an eligible provider of training services under section 122; and (III) information demonstrating that the program of training services prepares participants for an occupation that is in demand in the local area; (ii) makes the proposed request available to eligible providers of training services and other interested members of the public for a public comment period of not less than 30 days; and (iii) includes, in the final request for the waiver, the evidence and information described in clause (i) and the comments received pursuant to clause (ii). (C) Duration.--A waiver granted to a local board under subparagraph (B) shall apply for a period of not to exceed 1 year. The waiver may be renewed for additional periods of not to exceed 1 year, pursuant to requests from the local board, if the board meets the requirements of subparagraph (B) in making the requests. (D) Revocation.--The Governor may revoke a waiver granted under this paragraph during the appropriate period described in subparagraph (C) if the State determines that the local board involved has engaged in a pattern of inappropriate referrals to training services operated by the local board. (2) Core services; intensive services; designation or certification as one-stop operators.--A local board may provide core services described in section 134(d)(2) or intensive services described in section 134(d)(3) through a one-stop delivery system described in section 134(c) or be designated or certified as a one- stop operator only with the agreement of the chief elected official and the Governor. (3) Limitation on authority.--Nothing in this Act shall be construed to provide a local board with the authority to mandate curricula for schools. (g) Conflict of Interest.--A member of a local board may not-- (1) vote on a matter under consideration by the local board-- (A) regarding the provision of services by such member (or by an entity that such member represents); or (B) that would provide direct financial benefit to such member or the immediate family of such member; or (2) engage in any other activity determined by the Governor to constitute a conflict of interest as specified in the State plan. (h) Youth Council.-- (1) Establishment.--There shall be established, as a subgroup within each local board, a youth council appointed by the local board, in cooperation with the chief elected official for the local area. (2) Membership.--The membership of each youth council-- (A) shall include-- (i) members of the local board described in subparagraph (A) or (B) of subsection (b)(2) with special interest or expertise in youth policy; (ii) representatives of youth service agencies, including juvenile justice and local law enforcement agencies; (iii) representatives of local public housing authorities; (iv) parents of eligible youth seeking assistance under this subtitle; (v) individuals, including former participants, and representatives of organizations, that have experience relating to youth activities; and (vi) representatives of the Job Corps, as appropriate; and (B) may include such other individuals as the chairperson of the local board, in cooperation with the chief elected official, determines to be appropriate. (3) Relationship to local board.--Members of the youth council who are not members of the local board described in subparagraphs (A) and (B) of subsection (b)(2) shall be voting members of the youth council and nonvoting members of the board. (4) Duties.--The duties of the youth council include-- (A) developing the portions of the local plan relating to eligible youth, as determined by the chairperson of the local board; (B) subject to the approval of the local board and consistent with section 123-- (i) recommending eligible providers of youth activities, to be awarded grants or contracts on a competitive basis by the local board to carry out the youth activities; and (ii) conducting oversight with respect to the eligible providers of youth activities, in the local area; (C) coordinating youth activities authorized under section 129 in the local area; and (D) other duties determined to be appropriate by the chairperson of the local board. (i) Alternative Entity.-- (1) In general.--For purposes of complying with subsections (a), (b), and (c), and paragraphs (1) and (2) of subsection (h), a State may use any local entity (including a local council, regional workforce development board, or similar entity) that-- (A) is established to serve the local area (or the service delivery area that most closely corresponds to the local area); (B) is in existence on December 31, 1997; (C)(i) is established pursuant to section 102 of the Job Training Partnership Act, as in effect on December 31, 1997; or (ii) is substantially similar to the local board described in subsections (a), (b), and (c), and paragraphs (1) and (2) of subsection (h); and (D) includes-- (i) representatives of business in the local area; and (ii)(I) representatives of labor organizations (for a local area in which employees are represented by labor organizations), nominated by local labor federations; or (II) (for a local area in which no employees are represented by such organizations), other representatives of employees in the local area. (2) References.--References in this Act to a local board or a youth council shall be considered to include such an entity or a subgroup of such an entity, respectively. SEC. 118. LOCAL PLAN. (a) In General.--Each local board shall develop and submit to the Governor a comprehensive 5-year local plan (referred to in this title as the ``local plan''), in partnership with the appropriate chief elected official. The plan shall be consistent with the State plan. (b) Contents.--The local plan shall include-- (1) an identification of-- (A) the workforce investment needs of businesses, jobseekers, and workers in the local area; (B) the current and projected employment opportunities in the local area; and (C) the job skills necessary to obtain such employment opportunities; (2) a description of the one-stop delivery system to be established or designated in the local area, including-- (A) a description of how the local board will ensure the continuous improvement of eligible providers of services through the system and ensure that such providers meet the employment needs of local employers and participants; and (B) a copy of each memorandum of understanding described in section 121(c) (between the local board and each of the one- stop partners) concerning the operation of the one-stop delivery system in the local area; (3) a description of the local levels of performance negotiated with the Governor and chief elected official pursuant to section 136(c), to be used to measure the performance of the local area and to be used by the local board for measuring the performance of the local fiscal agent (where appropriate), eligible providers, and the one-stop delivery system, in the local area; (4) a description and assessment of the type and availability of adult and dislocated worker employment and training activities in the local area; (5) a description of how the local board will coordinate workforce investment activities carried out in the local area with statewide rapid response activities, as appropriate; (6) a description and assessment of the type and availability of youth activities in the local area, including an identification of successful providers of such activities; (7) a description of the process used by the local board, consistent with subsection (c), to provide an opportunity for public comment, including comment by representatives of businesses and comment by representatives of labor organizations, and input into the development of the local plan, prior to submission of the plan; (8) an identification of the entity responsible for the disbursal of grant funds described in section 117(d)(3)(B)(i)(III), as determined by the chief elected official or the Governor under section 117(d)(3)(B)(i); (9) a description of the competitive process to be used to award the grants and contracts in the local area for activities carried out under this subtitle; and (10) such other information as the Governor may require. (c) Process.--Prior to the date on which the local board submits a local plan under this section, the local board shall-- (1) make available copies of a proposed local plan to the public through such means as public hearings and local news media; (2) allow members of the local board and members of the public, including representatives of business and representatives of labor organizations, to submit comments on the proposed local plan to the local board, not later than the end of the 30-day period beginning on the date on which the proposed local plan is made available; and (3) include with the local plan submitted to the Governor under this section any such comments that represent disagreement with the plan. (d) Plan Submission and Approval.--A local plan submitted to the Governor under this section shall be considered to be approved by the Governor at the end of the 90-day period beginning on the day the Governor receives the plan, unless the Governor makes a written determination during the 90-day period that-- (1) deficiencies in activities carried out under this subtitle have been identified, through audits conducted under section 184 or otherwise, and the local area has not made acceptable progress in implementing corrective measures to address the deficiencies; or (2) the plan does not comply with this title. CHAPTER 3--WORKFORCE INVESTMENT ACTIVITIES PROVIDERS SEC. 121. ESTABLISHMENT OF ONE-STOP DELIVERY SYSTEMS. (a) In General.--Consistent with the State plan, the local board for a local area, with the agreement of the chief elected official for the local area, shall-- (1) develop and enter into the memorandum of understanding described in subsection (c) with one-stop partners; (2) designate or certify one-stop operators under subsection (d); and (3) conduct oversight with respect to the one-stop delivery system in the local area. (b) One-Stop Partners.-- (1) Required partners.-- (A) In general.--Each entity that carries out a program or activities described in subparagraph (B) shall-- (i) make available to participants, through a one-stop delivery system, the services described in section 134(d)(2) that are applicable to such program or activities; and (ii) participate in the operation of such system consistent with the terms of the memorandum described in subsection (c), and with the requirements of the Federal law in which the program or activities are authorized. (B) Programs and activities.--The programs and activities referred to in subparagraph (A) consist of-- (i) programs authorized under this title; (ii) programs authorized under the Wagner-Peyser Act (29 U.S.C. 49 et seq.); (iii) adult education and literacy activities authorized under title II; (iv) programs authorized under title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.); (v) programs authorized under section 403(a)(5) of the Social Security Act (42 U.S.C. 603(a)(5)) (as added by section 5001 of the Balanced Budget Act of 1997); (vi) activities authorized under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.); (vii) postsecondary vocational education activities authorized under the Carl D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2301 et seq.); (viii) activities authorized under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.); (ix) activities authorized under chapter 41 of title 38, United States Code; (x) employment and training activities carried out under the Community Services Block Grant Act (42 U.S.C. 9901 et seq.); (xi) employment and training activities carried out by the Department of Housing and Urban Development; and (xii) programs authorized under State unemployment compensation laws (in accordance with applicable Federal law). (2) Additional partners.-- (A) In general.--In addition to the entities described in paragraph (1), other entities that carry out a human resource program described in subparagraph (B) may-- (i) make available to participants, through the one- stop delivery system, the services described in section 134(d)(2) that are applicable to such program; and (ii) participate in the operation of such system consistent with the terms of the memorandum described in subsection (c), and with the requirements of the Federal law in which the program is authorized; if the local board and chief elected official involved approve such participation. (B) Programs.--The programs referred to in subparagraph (A) may include-- (i) programs authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); (ii) programs authorized under section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)); (iii) work programs authorized under section 6(o) of the Food Stamp Act of 1977 (7 U.S.C. 2015(o)); (iv) programs authorized under the National and Community Service Act of 1990 (42 U.S.C. 12501 et seq.); and (v) other appropriate Federal, State, or local programs, including programs in the private sector. (c) Memorandum of Understanding.-- (1) Development.--The local board, with the agreement of the chief elected official, shall develop and enter into a memorandum of understanding (between the local board and the one-stop partners), consistent with paragraph (2), concerning the operation of the one-stop delivery system in the local area. (2) Contents.--Each memorandum of understanding shall contain-- (A) provisions describing-- (i) the services to be provided through the one-stop delivery system; (ii) how the costs of such services and the operating costs of the system will be funded; (iii) methods for referral of individuals between the one-stop operator and the one-stop partners, for the appropriate services and activities; and (iv) the duration of the memorandum and the procedures for amending the memorandum during the term of the memorandum; and (B) such other provisions, consistent with the requirements of this title, as the parties to the agreement determine to be appropriate. (d) One-Stop Operators.-- (1) Designation and certification.--Consistent with paragraphs (2) and (3), the local board, with the agreement of the chief elected official, is authorized to designate or certify one-stop operators and to terminate for cause the eligibility of such operators. (2) Eligibility.--To be eligible to receive funds made available under this subtitle to operate a one-stop center referred to in section 134(c), an entity (which may be a consortium of entities)-- (A) shall be designated or certified as a one-stop operator-- (i) through a competitive process; or (ii) in accordance with an agreement reached between the local board and a consortium of entities that, at a minimum, includes 3 or more of the one-stop partners described in subsection (b)(1); and (B) may be a public or private entity, or consortium of entities, of demonstrated effectiveness, located in the local area, which may include-- (i) a postsecondary educational institution; (ii) an employment service agency established under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), on behalf of the local office of the agency; (iii) a private, nonprofit organization (including a community-based organization); (iv) a private for-profit entity; (v) a government agency; and (vi) another interested organization or entity, which may include a local chamber of commerce or other business organization. (3) Exception.--Elementary schools and secondary schools shall not be eligible for designation or certification as one-stop operators, except that nontraditional public secondary schools and area vocational education schools shall be eligible for such designation or certification. (e) Established One-Stop Delivery System.--If a one-stop delivery system has been established in a local area prior to the date of enactment of this Act, the local board, the chief elected official, and the Governor involved may agree to certify an entity carrying out activities through the system as a one-stop operator for purposes of subsection (d), consistent with the requirements of subsection (b), of the memorandum of understanding, and of section 134(c). SEC. 122. IDENTIFICATION OF ELIGIBLE PROVIDERS OF TRAINING SERVICES. (a) Eligibility Requirements.-- (1) In general.--Except as provided in subsection (h), to be identified as an eligible provider of training services described in section 134(d)(4) (referred to in this section as ``training services'') in a local area and to be eligible to receive funds made available under section 133(b) for the provision of training services, a provider of such services shall meet the requirements of this section. (2) Providers.--Subject to the provisions of this section, to be eligible to receive the funds, the provider shall be-- (A) a postsecondary educational institution that-- (i) is eligible to receive Federal funds under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); and (ii) provides a program that leads to an associate degree, baccalaureate degree, or certificate; (B) an entity that carries out programs under the Act of August 16, 1937 (commonly known as the ``National Apprenticeship Act''; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.); or (C) another public or private provider of a program of training services. (b) Initial Eligibility Determination.-- (1) Postsecondary educational institutions and entities carrying out apprenticeship programs.--To be initially eligible to receive funds as described in subsection (a) to carry out a program described in subparagraph (A) or (B) of subsection (a)(2), a provider described in subparagraph (A) or (B), respectively, of subsection (a)(2) shall submit an application, to the local board for the local area in which the provider desires to provide training services, at such time, in such manner, and containing such information as the local board may require. (2) Other eligible providers.-- (A) Procedure.--Each Governor of a State shall establish a procedure for use by local boards in the State in determining the initial eligibility of a provider described in subsection (a)(2)(C) to receive funds as described in subsection (a) for a program of training services, including the initial eligibility of-- (i) a postsecondary educational institution to receive such funds for a program not described in subsection (a)(2)(A); and (ii) a provider described in subsection (a)(2)(B) to receive such funds for a program not described in subsection (a)(2)(B). (B) Recommendations.--In developing such procedure, the Governor shall solicit and take into consideration the recommendations of local boards and providers of training services within the State. (C) Opportunity to submit comments.--The Governor shall provide an opportunity, during the development of the procedure, for interested members of the public, including representatives of business and labor organizations, to submit comments on such procedure. (D) Requirements.--In establishing the procedure, the Governor shall require that, to be initially eligible to receive funds as described in subsection (a) for a program, a provider described in subsection (a)(2)(C)-- (i) shall submit an application, to the local board for the local area in which the provider desires to provide training services, at such time and in such manner as may be required, and containing a description of the program; (ii) if the provider provides training services through a program on the date of application, shall include in the application an appropriate portion of the performance information and program cost information described in subsection (d) for the program, as specified in the procedure, and shall meet appropriate levels of performance for the program, as specified in the procedure; and (iii) if the provider does not provide training services on such date, shall meet appropriate requirements, as specified in the procedure. (c) Subsequent Eligibility Determination.-- (1) Procedure.--Each Governor of a State shall establish a procedure for use by local boards in the State in determining the eligibility of a provider described in subsection (a)(2) to continue to receive funds as described in subsection (a) for a program after an initial period of eligibility under subsection (b) (referred to in this section as ``subsequent eligibility''). (2) Recommendations.--In developing such procedure, the Governor shall solicit and take into consideration the recommendations of local boards and providers of training services within the State. (3) Opportunity to submit comments.--The Governor shall provide an opportunity, during the development of the procedure, for interested members of the public, including representatives of business and labor organizations, to submit comments on such procedure. (4) Considerations.--In developing such procedure, the Governor shall ensure that the procedure requires the local boards to take into consideration, in making the determinations of subsequent eligibility-- (A) the specific economic, geographic, and demographic factors in the local areas in which providers seeking eligibility are located; and (B) the characteristics of the populations served by providers seeking eligibility, including the demonstrated difficulties in serving such populations, where applicable. (5) Requirements.--In establishing the procedure, the Governor shall require that, to be eligible to continue to receive funds as described in subsection (a) for a program after the initial period of eligibility, a provider described in subsection (a)(2) shall-- (A) submit the performance information and program cost information described in subsection (d)(1) for the program and any additional information required to be submitted in accordance with subsection (d)(2) for the program annually to the appropriate local board at such time and in such manner as may be required; and (B) annually meet the performance levels described in paragraph (6) for the program, as demonstrated utilizing quarterly records described in section 136, in a manner consistent with section 136. (6) Levels of performance.-- (A) In general.--At a minimum, the procedure described in paragraph (1) shall require the provider to meet minimum acceptable levels of performance based on the performance information referred to in paragraph (5)(A). (B) Higher levels of performance eligibility.--The local board may require higher levels of performance than the levels referred to in subparagraph (A) for subsequent eligibility to receive funds as described in subsection (a). (d) Performance and Cost Information.-- (1) Required information.--For a provider of training services to be determined to be subsequently eligible under subsection (c) to receive funds as described in subsection (a), such provider shall, under subsection (c), submit-- (A) verifiable program-specific performance information consisting of-- (i) program information, including-- (I) the program completion rates for all individuals participating in the applicable program conducted by the provider; (II) the percentage of all individuals participating in the applicable program who obtain unsubsidized employment, which may also include information specifying the percentage of the individuals who obtain unsubsidized employment in an occupation related to the program conducted; and (III) the wages at placement in employment of all individuals participating in the applicable program; and (ii) training services information for all participants who received assistance under section 134 to participate in the applicable program, including-- (I) the percentage of participants who have completed the applicable program and who are placed in unsubsidized employment; (II) the retention rates in unsubsidized employment of participants who have completed the applicable program, 6 months after the first day of the employment; (III) the wages received by participants who have completed the applicable program, 6 months after the first day of the employment involved; and (IV) where appropriate, the rates of licensure or certification, attainment of academic degrees or equivalents, or attainment of other measures of skills, of the graduates of the applicable program; and (B) information on program costs (such as tuition and fees) for participants in the applicable program. (2) Additional information.--Subject to paragraph (3), in addition to the performance information described in paragraph (1)-- (A) the Governor may require that a provider submit, under subsection (c), such other verifiable program-specific performance information as the Governor determines to be appropriate to obtain such subsequent eligibility, which may include information relating to-- (i) retention rates in employment and the subsequent wages of all individuals who complete the applicable program; (ii) where appropriate, the rates of licensure or certification of all individuals who complete the program; and (iii) the percentage of individuals who complete the program who attain industry-recognized occupational skills in the subject, occupation, or industry for which training is provided through the program, where applicable; and (B) the Governor, or the local board, may require a provider to submit, under subsection (c), other verifiable program-specific performance information to obtain such subsequent eligibility. (3) Conditions.-- (A) In general.--If the Governor or a local board requests additional information under paragraph (2) that imposes extraordinary costs on providers, or if providers experience extraordinary costs in the collection of information required under paragraph (1)(A)(ii), the Governor or the local board shall provide access to cost-effective methods for the collection of the information involved, or the Governor shall provide additional resources to assist providers in the collection of such information from funds made available as described in sections 128(a) and 133(a)(1), as appropriate. (B) Higher education eligibility requirements.--The local board and the designated State agency described in subsection (i) may accept program-specific performance information consistent with the requirements for eligibility under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) from a provider for purposes of enabling the provider to fulfill the applicable requirements of this subsection, if such information is substantially similar to the information otherwise required under this subsection. (e) Local Identification.-- (1) In general.--The local board shall place on a list providers submitting an application under subsection (b)(1) and providers determined to be initially eligible under subsection (b)(2), and retain on the list providers determined to be subsequently eligible under subsection (c), to receive funds as described in subsection (a) for the provision of training services in the local area served by the local board. The list of providers shall be accompanied by any performance information and program cost information submitted under subsection (b) or (c) by the provider. (2) Submission to state agency.--On placing or retaining a provider on the list, the local board shall submit, to the designated State agency described in subsection (i), the list and the performance information and program cost information referred to in paragraph (1). If the agency determines, within 30 days after the date of the submission, that the provider does not meet the performance levels described in subsection (c)(6) for the program (where applicable), the agency may remove the provider from the list for the program. The agency may not remove from the list an agency submitting an application under subsection (b)(1). (3) Identification of eligible providers.--A provider who is placed or retained on the list under paragraph (1), and is not removed by the designated State agency under paragraph (2), for a program, shall be considered to be identified as an eligible provider of training services for the program. (4) Availability.-- (A) State list.--The designated State agency shall compile a single list of the providers identified under paragraph (3) from all local areas in the State and disseminate such list, and the performance information and program cost information described in paragraph (1), to the one-stop delivery systems within the State. Such list and information shall be made widely available to participants in employment and training activities authorized under section 134 and others through the one-stop delivery system. (B) Selection from state list.--Individuals eligible to receive training services under section 134(d)(4) shall have the opportunity to select any of the eligible providers, from any of the local areas in the State, that are included on the list described in subparagraph (A) to provide the services, consistent with the requirements of section 134. (5) Acceptance of individual training accounts by other states.--States may enter into agreements, on a reciprocal basis, to permit eligible providers of training services in a State to accept individual training accounts provided in another State. (f) Enforcement.-- (1) Accuracy of information.--If the designated State agency, after consultation with the local board involved, determines that an eligible provider or individual supplying information on behalf of the provider intentionally supplies inaccurate information under this section, the agency shall terminate the eligibility of the provider to receive funds described in subsection (a) for any program for a period of time, but not less than 2 years. (2) Noncompliance.--If the designated State agency, or the local board working with the State agency, determines that an eligible provider described in subsection (a) substantially violates any requirement under this Act, the agency, or the local board working with the State agency, may terminate the eligibility of such provider to receive funds described in subsection (a) for the program involved or take such other action as the agency or local board determines to be appropriate. (3) Repayment.--A provider whose eligibility is terminated under paragraph (1) or (2) for a program shall be liable for repayment of all funds described in subsection (a) received for the program during any period of noncompliance described in such paragraph. (4) Construction.--This subsection and subsection (g) shall be construed to provide remedies and penalties that supplement, but do not supplant, other civil and criminal remedies and penalties. (g) Appeal.--The Governor shall establish procedures for providers of training services to appeal a denial of eligibility by the local board or the designated State agency under subsection (b), (c), or (e), a termination of eligibility or other action by the board or agency under subsection (f), or a denial of eligibility by a one-stop operator under subsection (h). Such procedures shall provide an opportunity for a hearing and prescribe appropriate time limits to ensure prompt resolution of the appeal. (h) On-the-Job Training or Customized Training Exception.-- (1) In general.--Providers of on-the-job training or customized training shall not be subject to the requirements of subsections (a) through (e). (2) Collection and dissemination of information.--A one-stop operator in a local area shall collect such performance information from on-the-job training and customized training providers as the Governor may require, determine whether the providers meet such performance criteria as the Governor may require, and disseminate information identifying providers that meet the criteria as eligible providers, and the performance information, through the one-stop delivery system. Providers determined to meet the criteria shall be considered to be identified as eligible providers of training services. (i) Administration.--The Governor shall designate a State agency to make the determinations described in subsection (e)(2), take the enforcement actions described in subsection (f), and carry out other duties described in this section. SEC. 123. IDENTIFICATION OF ELIGIBLE PROVIDERS OF YOUTH ACTIVITIES. From funds allocated under paragraph (2)(A) or (3) of section 128(b) to a local area, the local board for such area shall identify eligible providers of youth activities by awarding grants or contracts on a competitive basis, based on the recommendations of the youth council and on the criteria contained in the State plan, to the providers to carry out the activities, and shall conduct oversight with respect to the providers, in the local area. CHAPTER 4--YOUTH ACTIVITIES SEC. 126. GENERAL AUTHORIZATION. The Secretary shall make an allotment under section 127(b)(1)(C) to each State that meets the requirements of section 112 and a grant to each outlying area that complies with the requirements of this title, to assist the State or outlying area, and to enable the State or outlying area to assist local areas, for the purpose of providing workforce investment activities for eligible youth in the State or outlying area and in the local areas. SEC. 127. STATE ALLOTMENTS. (a) In General.--The Secretary shall-- (1) for each fiscal year in which the amount appropriated under section 137(a) exceeds $1,000,000,000, reserve a portion determined under subsection (b)(1)(A) of the amount appropriated under section 137(a) for use under sections 167 (relating to migrant and seasonal farmworker programs) and 169 (relating to youth opportunity grants); and (2) use the remainder of the amount appropriated under section 137(a) for a fiscal year to make allotments and grants in accordance with subparagraphs (B) and (C) of subsection (b)(1) and make funds available for use under section 166 (relating to Native American programs). (b) Allotment Among States.-- (1) Youth activities.-- (A) Youth opportunity grants.-- (i) In general.--For each fiscal year in which the amount appropriated under section 137(a) exceeds $1,000,000,000, the Secretary shall reserve a portion of the amount to provide youth opportunity grants and other activities under section 169 (relating to youth opportunity grants) and provide youth activities under section 167 (relating to migrant and seasonal farmworker programs). (ii) Portion.--The portion referred to in clause (i) shall equal, for a fiscal year-- (I) except as provided in subclause (II), the difference obtained by subtracting $1,000,000,000 from the amount appropriated under section 137(a) for the fiscal year; or (II) for any fiscal year in which the amount is $1,250,000,000 or greater, $250,000,000. (iii) Youth activities for farmworkers.--From the portion described in clause (i) for a fiscal year, the Secretary shall make available 4 percent of such portion to provide youth activities under section 167. (iv) Role model academy project.--From the portion described in clause (i) for fiscal year 1999, the Secretary shall make available such sums as the Secretary determines to be appropriate to carry out section 169(g). (B) Outlying areas.-- (i) 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 of the amount appropriated under section 137(a) for the fiscal year-- (I) to provide assistance to the outlying areas to carry out youth activities and statewide workforce investment activities; and (II) for each of fiscal years 1999, 2000, and 2001, to carry out the competition described in clause (ii), except that the funds reserved to carry out such clause for any such fiscal year shall not exceed the amount reserved for the Freely Associated States for fiscal year 1997, from amounts reserved under sections 252(a) and 262(a)(1) of the Job Training Partnership Act (as in effect on the day before the date of enactment of this Act). (ii) Limitation for freely associated states.-- (I) Competitive grants.--The Secretary shall use funds described in clause (i)(II) to award grants to Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States to carry out youth activities and statewide workforce investment activities. (II) Award basis.--The Secretary shall award grants pursuant to subclause (I) on a competitive basis and pursuant to the recommendations of experts in the field of employment and training, working through the Pacific Region Educational Laboratory in Honolulu, Hawaii. (III) Assistance requirements.--Any Freely Associated State that desires to receive assistance under this subparagraph shall submit an application to the Secretary and shall include in the application for assistance-- (aa) information demonstrating that the Freely Associated State will meet all conditions that apply to States under this title; (bb) an assurance that, notwithstanding any other provision of this title, the Freely Associated State will use such assistance only for the direct provision of services; and (cc) such other information and assurances as the Secretary may require. (IV) Termination of eligibility.--Notwithstanding any other provision of law, the Freely Associated States shall not receive any assistance under this subparagraph for any program year that begins after September 30, 2001. (V) Administrative costs.--The Secretary may provide not more than 5 percent of the funds made available for grants under subclause (I) to pay the administrative costs of the Pacific Region Educational Laboratory in Honolulu, Hawaii, regarding activities assisted under this clause. (iii) Additional requirement.--The provisions of Public Law 95-134, permitting the consolidation of grants by the outlying areas, shall not apply to assistance provided to those areas, including the Freely Associated States, under this subparagraph. (C) States.-- (i) In general.--After determining the amounts to be reserved under subparagraph (A) (if any) and subparagraph (B), the Secretary shall-- (I) from the amount referred to in subsection (a)(2) for a fiscal year, make available not more than 1.5 percent to provide youth activities under section 166 (relating to Native Americans); and (II) allot the remainder of the amount referred to in subsection (a)(2) for a fiscal year to the States pursuant to clause (ii) for youth activities and statewide workforce investment activities. (ii) Formula.--Subject to clauses (iii) and (iv), of the remainder-- (I) 33 1/3 percent shall be allotted on the basis of the relative number of unemployed individuals in areas of substantial unemployment in each State, compared to the total number of unemployed individuals in areas of substantial unemployment in all States; (II) 33 1/3 percent shall be allotted on the basis of the relative excess number of unemployed individuals in each State, compared to the total excess number of unemployed individuals in all States; and (III) 33 1/3 percent shall be allotted on the basis of the relative number of disadvantaged youth in each State, compared to the total number of disadvantaged youth in all States, except as described in clause (iii). (iii) Calculation.--In determining an allotment under clause (ii)(III) for any State in which there is a local area designated under section 116(a)(2)(B) (relating to the area served by a rural concentrated employment program grant recipient), the allotment shall be based on the higher of-- (I) the number of individuals who are age 16 through 21 in families with an income below the low- income level in such area; or (II) the number of disadvantaged youth in such area. (iv) Minimum and maximum percentages and minimum allotments.--In making allotments under this subparagraph, the Secretary shall ensure the following: (I) Minimum percentage and allotment.--Subject to subclause (IV), the Secretary shall ensure that no State shall receive an allotment for a fiscal year that is less than the greater of-- (aa) an amount based on 90 percent of the allotment percentage of the State for the preceding fiscal year; or (bb) 100 percent of the total of the allotments of the State under sections 252 and 262 of the Job Training Partnership Act (as in effect on the day before the date of enactment of this Act) for fiscal year 1998. (II) Small state minimum allotment.-- Subject to subclauses (I), (III), and (IV), the Secretary shall ensure that no State shall receive an allotment under this subparagraph that is less than the total of-- (aa) 3/10 of 1 percent of $1,000,000,000 of the remainder described in clause (i)(II) for the fiscal year; and (bb) if the remainder described in clause (i)(II) for the fiscal year exceeds $1,000,000,000, 2/5 of 1 percent of the excess. (III) Maximum percentage.--Subject to subclause (I), the Secretary shall ensure that no State shall receive an allotment percentage for a fiscal year that is more than 130 percent of the allotment percentage of the State for the preceding fiscal year. (IV) Minimum funding.--In any fiscal year in which the remainder described in clause (i)(II) does not exceed $1,000,000,000, the minimum allotments under subclauses (I) and (II) shall be calculated by the methodology for calculating the corresponding allotments under parts B and C of title II of the Job Training Partnership Act, as in effect on July 1, 1998. (2) Definitions.--For the purpose of the formula specified in paragraph (1)(C): (A) Allotment percentage.--The term ``allotment percentage'', used with respect to fiscal year 2000 or a subsequent fiscal year, means a percentage of the remainder described in paragraph (1)(C)(i)(II) that is received through an allotment made under paragraph (1)(C) for the fiscal year. The term, used with respect to fiscal year 1998 or 1999, means the percentage of the amounts allotted to States under sections 252(b) and 262(a) of the Job Training Partnership Act (as in effect on the day before the date of enactment of this Act) that is received under such sections by the State involved for fiscal year 1998 or 1999. (B) Area of substantial unemployment.--The term ``area of substantial unemployment'' means any area that is of sufficient size and scope to sustain a program of workforce investment activities carried out under this subtitle and that has an average rate of unemployment of at least 6.5 percent for the most recent 12 months, as determined by the Secretary. For purposes of this subparagraph, determinations of areas of substantial unemployment shall be made once each fiscal year. (C) Disadvantaged youth.--Subject to paragraph (3), the term ``disadvantaged youth'' means an individual who is age 16 through 21 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the higher of-- (i) the poverty line; or (ii) 70 percent of the lower living standard income level. (D) Excess number.--The term ``excess number'' means, used with respect to the excess number of unemployed individuals within a State, the higher of-- (i) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the State; or (ii) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in areas of substantial unemployment in such State. (E) Low-income level.--The term ``low-income level'' means $7,000 with respect to income in 1969, and for any later year means that amount that bears the same relationship to $7,000 as the Consumer Price Index for that year bears to the Consumer Price Index for 1969, rounded to the nearest $1,000. (3) Special rule.--For the purpose of the formula specified in paragraph (1)(C), the Secretary shall, as appropriate and to the extent practicable, exclude college students and members of the Armed Forces from the determination of the number of disadvantaged youth. (4) Definition.--In this subsection, the term ``Freely Associated State'' means the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. (c) Reallotment.-- (1) In general.--The Secretary shall, in accordance with this subsection, reallot to eligible States amounts that are allotted under this section for youth activities and statewide workforce investment activities and that are available for reallotment. (2) Amount.--The amount available for reallotment for a program year is equal to the amount by which the unobligated balance of the State allotment under this section for such activities, at the end of the program year prior to the program year for which the determination under this paragraph is made, exceeds 20 percent of such allotment for the prior program year. (3) Reallotment.--In making reallotments to eligible States of amounts available pursuant to paragraph (2) for a program year, the Secretary shall allot to each eligible State an amount based on the relative amount allotted to such State under this section for such activities for the prior program year, as compared to the total amount allotted to all eligible States under this section for such activities for such prior program year. (4) Eligibility.--For purposes of this subsection, an eligible State means a State that has obligated at least 80 percent of the State allotment under this section for such activities for the program year prior to the program year for which the determination under paragraph (2) is made. (5) Procedures.--The Governor of each State shall prescribe uniform procedures for the obligation of funds by local areas within the State in order to avoid the requirement that funds be made available for reallotment under this subsection. The Governor shall further prescribe equitable procedures for making funds available from the State and local areas in the event that a State is required to make funds available for reallotment under this subsection. SEC. 128. WITHIN STATE ALLOCATIONS. (a) Reservations for State Activities.-- (1) In general.--The Governor of a State shall reserve not more than 15 percent of each of the amounts allotted to the State under section 127(b)(1)(C) and paragraphs (1)(B) and (2)(B) of section 132(b) for a fiscal year for statewide workforce investment activities. (2) Use of funds.--Regardless of whether the reserved amounts were allotted under section 127(b)(1)(C), or under paragraph (1)(B) or (2)(B) of section 132(b), the Governor may use the reserved amounts to carry out statewide youth activities described in section 129(b) or statewide employment and training activities, for adults or for dislocated workers, described in paragraph