Order Code RL32778
CRS Report for Congress
Received through the CRS Web
The Workforce Investment Act of 1998 (WIA):
Reauthorization of Job Training Programs
in the 109th Congress
Updated August 2, 2006
Ann Lordeman
Specialist in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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The Workforce Investment Act of 1998 (WIA):
Reauthorization of Job Training Programs
in the 109th Congress
Summary
Title I of the Workforce Investment Act of 1998 (WIA), P.L. 105-220, the
nation’s chief job training legislation, authorizes several job training programs,
including Youth, Adult, and Dislocated Worker Activities; and Job Corps. The
authorization for WIA programs expired on September 30, 2003, although annual
appropriations have continued funding for WIA through FY2005.
On February 25, 2005, the House Committee on Education and the Workforce
reported H.R. 27 (H.Rept. 109-9), the Job Training Improvement Act of 2005, which
would reauthorize and revise WIA. On March 2, 2005, the House passed H.R. 27,
the Job Training Improvement Act of 2005. On September 7, 2005, the Senate
Committee on Health, Education, Labor, and Pensions, reported S. 1021 (S.Rept.
109-134), the Workforce Investment Act Amendments of 2005. On June 29, 2006,
the Senate incorporated S. 1021, as amended, into H.R. 27 and passed its version of
H.R. 27.
Both the House and Senate versions of H.R. 27, in addition to reauthorizing the
Title I WIA training programs, would also modify the Adult Education and Family
Literacy Act (AEFLA) and reauthorize the Rehabilitation Act of 1973. All three
programs would be authorized through FY2011. The focus of this report is on Title
I of WIA. Some of the Title I issues addressed by both versions include
! funding for the costs of the one-stop centers’ infrastructure (defined
as nonpersonnel costs);
! the percentage of youth program funds that would be spent on
activities for out-of-school youth;
! sequencing of core, intensive, and training services to individuals;
! the criteria and procedures for determining eligibility for training
providers;
! the indicators of program performance;
! the flexibility of state and local workforce boards in directing
funding to areas of need by creating a consolidated adult program
under the House version of H.R. 27, and by increasing the
percentage of funds that could be transferred between the adult and
dislocated worker programs to 100% under the Senate version;
! the hiring practices of religious organizations that operate job
training programs;
! creation of a new Youth Challenge Grant Program to assist youth in
acquiring the skills, credentials, and employment experience
necessary to succeed in the labor market; and
! creation of new demonstration projects, including Personal
Reemployment Accounts under the House version and Community-
Based Job Training under both versions of H.R. 27.
This report will be updated should major legislative developments occur.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Summary of Amendments to Title I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
One-Stop Delivery System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Structure of State and Locally Administered Programs . . . . . . . . . . . . . . . . . 3
State and National Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Youth Challenge Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
State and Local Formula Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Youth Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Allocations for Adult Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Youth Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Adult Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Demonstration and Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Community-Based Job Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Personal Reemployment Accounts (PRAs) . . . . . . . . . . . . . . . . . . . . . 10
Training for Realtime Writers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Business Partnership Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Skill Certification Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Integrated Workforce Training Programs
for Adults with Limited English Proficiency . . . . . . . . . . . . . . . . 12
Performance Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Nondiscrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Authorization of Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Youth, Adult, and Dislocated Worker Activities . . . . . . . . . . . . . . . . . 13
Demonstration and Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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The Workforce Investment Act of 1998
(WIA): Reauthorization of Job Training
Programs in the 109th Congress
Most Recent Developments
On June 29, 2006, the Senate incorporated S. 1021, the Workforce Investment
Act Amendments of 2005, as amended, into H.R. 27 and passed its version of H.R.
27 This bill would amend the Workforce Investment Act of 1998 (P.L. 105-220).
The bill was reported by the Senate Committee on Health, Education, Labor, and
Pensions on September 7, 2005 (S.Rept. 109-134). On March 2, 2005, the House
passed H.R. 27, the Job Training Improvement Act of 2005, its version of WIA
amendments. This bill was reported by the Committee on Education and the
Workforce on February 25, 2005 (H.Rept. 109-9).
Introduction
The Workforce Investment Act of 1998 (WIA) (P.L. 105-220)1 was enacted in
August 1998. Among other things, WIA repealed the Job Training Partnership Act
(JTPA), and replaced it with new training provisions under Title I, Workforce
Investment Systems.2 All states were required to implement Title I by July 1, 2000.
The authorization for WIA programs expired on September 30, 2003; however,
Congress has continued to fund the programs through the appropriations process.
On February 17, 2005, the House Education and the Workforce Committee
approved H.R. 27, the Job Training Improvement Act of 2005, by a party-line vote
of 26-20. On March 2, 2005, the House passed the bill by a vote of 224-200, largely
along party lines. H.R. 27 is similar to the Workforce Reinvestment and Adult
Education Act of 2003 (H.R. 1261), which was passed by the House during the 108th
Congress.3
On September 7, 2005, the Senate Committee on Health, Education, Labor, and
Pensions, reported S. 1021 (S.Rept. 109-134), the Workforce Investment Act
1 29 U.S.C. §§ 2811 et seq.
2 For more information, see CRS Report 97-536, Job Training Under the Workforce
Investment Act (WIA): An Overview, by Ann Lordeman.
3 For more information on reauthorization of WIA job training programs in the 108th
Congress, see CRS Report RS21484, Workforce Investment Act of 1998 (WIA):
Reauthorization of Title I Job Training Programs in the 108th Congress, by Ann Lordeman.

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CRS-2
Amendments of 2005, a bi-partisan bill to amend WIA.4 On June 29, 2006, the
Senate incorporated S. 1021 into H.R. 27 and passed its version of H.R. 27 by
unanimous consent. S. 1021 is similar to the Workforce Investment Act
Amendments of 2003 (S. 1627), which was passed by the Senate during the 108th
Congress.
One of the most contentious issues in the House version of H.R. 27 is a
provision that would allow religious organizations that operate job training programs
to take religion into consideration in hiring. This provision is not included under the
nondiscrimination provisions of current law and is not included in the Senate version.
Another major difference between the two versions of H.R. 27 is that the House
version would create a consolidated adult program by combining funding for adult
activities, dislocated worker activities, the employment service, and reemployment
grants. The funding for these programs is currently allocated under separate
formulas. The Senate version would not create a consolidated adult program;
funding streams would remain separate. The Senate version would, however, permit
local boards with the approval of the Governor to transfer up to 45% of their
allocations between the adult and dislocated worker programs.
Both versions of H.R. 27, among other things, would also amend and
reauthorize adult education and literacy programs, Title II of WIA, and the
Rehabilitation Act of 1973, Title IV of WIA.5 This report focuses on Workforce
Investment Systems, Title I of WIA.
Summary of Amendments to Title I
One-Stop Delivery System
Under current law, services for adults are provided primarily through a
coordinated service-delivery system overseen by local workforce investment boards
(WIBs). This “one-stop” system is intended to provide a “seamless” combination of
services to improve employment opportunities for individuals. The law mandates
that certain “partners,” which are entities that administer programs such as adult
education and vocational rehabilitation, provide “applicable” services through the
one-stop system. In addition to these mandatory partners, WIA specifies certain
programs, such as Temporary Assistance for Needy Families (TANF), as optional
partners. Both the House and Senate versions of H.R. 27 would make TANF a
4 S. 1021, introduced on May 12, 2005, includes and modifies provisions in S. 9, the
Lifetime of Education Opportunities Act of 2005, introduced on Jan. 24, 2005, which
includes amendments to WIA in Title IV, Subtitle B.
5 For information on reauthorization of federal adult education and literacy programs, see
CRS Report RL32867, Adult Education and Literacy: Overview and Reauthorization
Proposals of the 109th Congress, by Paul M. Irwin. For information on the Rehabilitation
Act of 1973, see CRS Report RL33249, Rehabilitation Act of 1973: 109th Congress
Legislation, FY2006 Budget Request, and FY2006 Appropriations, by Scott David
Szymendera.

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CRS-3
required partner unless the state’s Governor notified the Departments of Labor and
Health and Human Services that TANF was not to be a required partner.
Under current law, each required partner must enter into a memorandum of
understanding (MOU) with the local WIB regarding, among other things, how the
operating costs of the system will be funded. The House version of H.R. 27 would
require that each Governor determine a portion of one-stop partner programs’ federal
funds for administration to be contributed toward paying the costs of the one-stop
centers’ infrastructure (defined as nonpersonnel costs). Only funds available for the
costs of administration for each mandatory or participating optional partner program
could be used, except that federal direct spending programs, such as TANF, would
contribute an amount equal to their proportionate use in the state. Each state WIB
would develop the formula to be used by the Governor in allocating the funds to the
one-stop centers it would certify for this purpose.
The Senate version of H.R. 27 would require the Governor to make this
determination only if the local board, chief elected official, and the one-stop partners
in a local area failed to reach agreement in the MOU on methods to sufficiently fund
the infrastructure costs. Under the Senate version, there would be a cap on the
portion of federal funds that could be required to be contributed. The cap would
apply to all federal funds allotted to a program, but the funds could be contributed
only from the administrative funds. This cap would be 3% of federal funds for WIA
programs and the employment service authorized under the Wagner-Peyser Act, and
1.5% for other required partners. For vocational rehabilitation, the cap would
increase from 0.75% to 1.5% over five years.
Under both versions of H.R. 27, the method for determining the appropriate
portion of funds to be provided by Native American programs to pay for the costs of
infrastructure of a one-stop center would be determined as part of the MOU.
Structure of State and Locally Administered Programs
Under current law, the state WIB, which functions as an advisory body to the
Governor, includes in its membership the Governor; members of the state legislature;
chief elected local officials; representatives of the lead state agencies responsible for
the programs carried out by one-stop partners, business, and labor organizations; and
individuals and representatives of organizations having experience with youth. Both
the House and Senate versions of H.R. 27 would add the state agency officials
responsible for economic development to the required membership, clarify that the
director of the state vocational rehabilitation unit be a member of the state WIB, and
would remove representatives of youth organizations as members.
Both versions of H.R. 27 would amend the functions of the WIB by adding the
requirement that they develop and review statewide policies affecting the provision
of coordinated or integrated services through the one-stop system. The House
version would also amend the functions of the WIBs by adding the requirement that
they assist the Governor in certifying one-stop centers and awarding infrastructure
funds.

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CRS-4
One function of the state WIB is to assist the Governor in the designation of
local workforce investment areas. Under current law, a request for designation is
automatically approved if it is from any unit of general local government with a
population of 500,000 or more, an area served by a rural-concentrated employment
program, or from a local area in Rhode Island. The House version of H.R. 27
eliminates the automatic designation for local areas in Rhode Island, but continues
automatic designation for jurisdictions with populations of 500,000 or more and
rural-concentrated employment programs, although the Governor may deny a request
for designation if the unit of government did not perform successfully6 during the
preceding two years. The Senate version would continue to allow for automatic
designation of any unit of general local government with a population of 500,000, an
area served by a rural-concentrated employment program, or a local area in Rhode
Island, but only if the area performed successfully and sustained fiscal integrity7 in
the two-year period following the enactment of the bill. In addition, the Senate
version would make any area that was a local workforce investment area in the two
years preceding enactment an automatically designated area if the area had performed
successfully and sustained fiscal integrity.
Within each local area, a local WIB is certified by the Governor under current
law. These local boards have broad responsibility for developing a local workforce
investment system. Membership includes representatives of businesses, local
educational entities, labor organizations, community-based organizations, economic
development agencies, and one-stop partners. Both the House and Senate versions
of H.R. 27 would eliminate the requirement that representatives of the one-stop
partners be included on the local WIBs; one-stop partners are required members of
the state WIBs. Under current law, each local board is required to establish a youth
council as a subgroup of the WIB to develop the youth portion of the local plan, to
recommend eligible providers of youth activities, and to coordinate youth activities
in the local area. Both versions of H.R. 27 would make youth councils optional. The
House version would add “faith-based organization” to the list of entities that must
be represented on the local board. The Senate version would not make this change,
but it would include a “faith-based organization” in the definition of a community-
based organization. Representatives of community-based organizations are required
members of the local boards.
State and National Programs
Overview. Under current law, there are three state-administered programs:
youth, adult, and dislocated worker, each of which has its own state grant. Both
versions of H.R. 27 would retain the youth program, but refocus it as described
6 The House version of H.R. 27 does not define “perform successfully.” The Senate version
defines the standard to mean that the local area performed at 80% or more of its adjusted
level of performance for core indicators of performance, e.g., entry into employment. (See
discussion of performance accountability below.)
7 The Senate version of H.R. 27 defines “fiscal integrity” to mean that the Secretary of Labor
has not made a formal determination that funds were “misexpended” in the local area due
to willful disregard of the requirements of the law, gross negligence, or failure to comply
with accepted standards of administration.

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CRS-5
below. The House version would create a consolidated adult program by combining
the state grants for the WIA adult and dislocated worker programs with the state
reemployment grants and state employment service grants, both of which are
authorized under the Wagner-Peyser Act (29 U.S.C. §§ 49 et seq.) The Senate
version would maintain separate programs.
There are several national programs under current law, such as Job Corps, and
programs for Native Americans, migrant and seasonal farmworkers, and veterans.
Both versions of H.R. 27 would retain these programs and would create a new Youth
Challenge Grant Program.8
Youth Challenge Grants. This program would be designed to assist youth
in acquiring necessary skills, credentials, and employment. Under both versions of
H.R. 27, of the funds reserved by the Secretary of Labor for this program, not less
than 80% would be used for competitive grants to states and local areas, and not
more than 20% would be used for grants to public or private entities.9 Under the
House version, the Secretary could require the grantees to provide an unspecified
non-federal share of the cost of the activities. Under the Senate version, the Secretary
must require grantees to provide non-federal matching funds of not less than 10% of
the cost of the activities. The youth served by the grants would be ages 14 through
19 under the House version, and ages 14 through 21 under the Senate version for the
80% portion of the funds and 16 through 21 for the 20% portion.
State and Local Formula Allocations
Youth Allocations. Under current law, of the funds appropriated for youth
activities, not more than 0.25% is reserved for outlying areas10 and not more than
1.5% is reserved for youth activities for Native Americans. The remainder of funds
are allocated to states by a formula based one-third on the relative11 number of
unemployed individuals residing in areas of substantial unemployment (an
unemployment rate of at least 6.5%), one-third on the basis of the relative “excess”
number of unemployed individuals (an unemployment rate more than 4.5%), and
one-third on the basis of the relative number of low-income youth. In addition, states
8 Youth Challenge Grants would replace Youth Opportunity Grants (YOGs) — competitive
grants made to local WIBs and other entities to increase the long-term employment of youth
living in empowerment zones, enterprise communities, and high-poverty areas. YOGs have
not been funded since FY2003.
9 Under the House version of H.R. 27, 20% of the funds could be awarded to public or
private entities that the Secretary determines would be effective. Under the Senate version
of H.R. 27, 20% of the funds would be awarded to consortium that would include a State
or local board, and a consortium of businesses, and could include local educational agencies,
institutions of higher education, business intermediaries, community-based organizations,
or apprenticeship programs.
10 The outlying areas comprise 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.
11 The word “relative” as used in this report means the number of individuals in a state
compared to the total number in all states.

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CRS-6
receive a minimum of the higher of the amount which is 90% of their relative share
of the prior year’s funding (i.e., minimum funding) or 0.25% of the total allocation
(i.e., floor), and a maximum of the amount which is 130% of their relative share of
the prior year’s funding (i.e., maximum funding).
Under the House version of H.R. 27, of the funds appropriated for youth
activities, the Secretary of Labor would reserve 25% for Youth Challenge Grants —
not to exceed $250 million. Of the remainder, not more than 0.25% would be
reserved for grants to outlying areas and not more than 1.5% for youth activities for
Native Americans. Under the Senate version, the Secretary would reserve any funds
appropriated in excess of $1.0 billion for Youth Challenge Grants up to a maximum
of $250 million. Of the remainder not reserved for Youth Challenge Grants, not
more than 0.25% would be reserved for grants to outlying areas and not more than
1.5% for youth activities for Native Americans. Under the Senate version, of the
amount reserved for Youth Challenge Grants, the Secretary would reserve the greater
of $10 million or 4% for youth activities for farmworkers. If no funds were
appropriated in excess of $1.0 billion then $10.0 million would be reserved for youth
activities for farmworkers from the total funds appropriated for youth activities. The
House version does not contain these provisions.
Under both versions of H.R.27, funds would be allocated to states using the
current law formula,12 except that any funds in excess of the amount available to
states for FY2005, estimated at $969 million, would be allocated by a three-part
formula based equally on each state’s relative number of individuals in the civilian
labor force compared to the total number of individuals in the civilian labor force in
all states ages 16 through 19 under the House version and ages 16 through 21 under
the Senate version; each state’s relative number of unemployed individuals compared
to the total number of unemployed individuals in all states; and each state’s relative
number of economically disadvantaged youth age 16 though 21, compared to the total
number of disadvantaged youth in all states.
Under current law, of the funds allocated to states, Governors can reserve not
more than 15% for statewide activities. The remainder of the funds are allocated to
local areas. Under the House version of H.R. 27, of the funds allocated to the states,
Governors could reserve up to 10% for statewide activities. Under the Senate
version, up to 15% could be reserved, the same as current law. Under current law,
of the remainder not reserved for statewide activities, not less than 70% is allocated
based on a statutory formula that uses the same factors and weights used to allocate
funds to states, and up to 30% is allocated on a formula developed by the state board.
Under both versions, 80% would be allocated to local areas using the same factors
and weights that would be used to allocate funds to states, and 20% would be
allocated to local areas on a formula developed in consultation with state and local
WIBs.
12 Under current law, one-third of funds are allocated on the basis of the relative number of
unemployed individuals residing in areas of substantial employment; one-third on the basis
of the relative excess number of unemployed individuals; and one-third on the basis of the
relative number of disadvantaged youth ages 16 through 21.

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Allocations for Adult Activities. Separate formulas are currently used to
allocate funds to states for adult activities, dislocated worker activities, the
employment service, and reemployment grants.13 Under the House version of H.R.
27, these four funding streams would be combined into one formula grant for a
revised adult program. Of the funds appropriated for adult activities, the Secretary
of Labor would reserve 10% to provide for national dislocated worker grants
(currently called national emergency grants), demonstration projects, and technical
assistance.14 Of the remainder, not more than 0.25% would be reserved for grants to
outlying areas. The remainder would be allocated by a two-part formula. The first
part would allocate 26% of the remainder based primarily on a state’s prior-year
share of the Wagner-Peyser state allotments. The second part would allocate 74%
of the remainder as follows: 60% (of the remaining 74% of total funds) would be
allotted to states on the basis of the relative number of unemployed individuals, 25%
on the basis of the relative excess number of unemployed individuals, and 15% on
the basis of the relative number of low-income adults. In addition, under the second
part of the formula, states would receive a minimum of the higher of the amount
which would be 90% of their relative share of the prior year’s funding (i.e., minimum
funding) or 0.20% of the total allocation (i.e., floor), and a maximum of the amount
which would be 130% of their relative share of the prior year’s funding (i.e.,
maximum funding). Each state’s total allotment would be the sum of its allotment
under the two parts, except that no state would receive less than it received in
FY2005 for the total of the four funding streams and, unless DOL determined
otherwise, no state would receive 3% more than it had in FY2005 for the four
funding streams. The funds needed to ensure that no state received less than it had
in FY2005 would come both from states that would have received an increase greater
than 3%, but were reduced to a 3% increase, and from the Secretary’s Reserve (i.e.,
10% of the total appropriation).
The Senate version H.R. 27 would not create a consolidated adult program;
funding streams would remain separate. The funding formula for the adult program
would be a modified version of the current formula, with 40% of the funds to be
allocated on the basis of the relative number of unemployed individuals residing in
areas of substantial unemployment, rather than one-third under current law, 25% on
the basis of the relative number of individuals in the civilian labor force — which is
not currently a factor — and 35% on the basis of the relative number of low-income
adults rather than one-third. The dislocated worker formula would be the same as
current law.
Under current law, of the funds allocated to states for adult activities, the
Governor can reserve not more than 15% for statewide activities. The Senate version
of H.R. 27 would retain current law. Under the House version, the Governor could
reserve up to 50% for statewide activities. Of this amount, not less than half would
13 For a detailed description of how funds are allotted to states for adults, dislocated
workers, and employment services, see [http://www.doleta.gov/budget/WIAFormDesc.pdf].
14 Of the 10%, not less than 75% would be used for national dislocated worker grants, of
which up to $125 million could be used to carry out a demonstration project on community-
based job training, not more than 20% could be used for demonstration projects, and not
more than 5% could be used to provide technical assistance.

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CRS-8
be distributed to local areas by formula to support the provision of core services (e.g.,
outreach and job search assistance) through one-stop delivery systems. States could
employ state personnel to provide the services in local areas in consultation with
local boards.
Under current law, of the funds allocated to local areas for adult activities, not
less than 70% are allocated based on a statutory formula, and up to 30% are allocated
on a formula developed by the state board. The Senate version of H.R. 27 would
retain current law with respect to the shares of funds allocated under a statutory
formula versus a formula developed by a state board, but the statutory formula would
be modified.15 Under the House version, of the funds allocated to local areas for the
consolidated adult program, 85% would be allocated based on a statutory formula,16
and 15% would be allocated to local areas based on a formula developed in
consultation with state and local WIBs.
Youth Activities
Under current law, “eligible youth” are individuals not less than age 14 and not
more than age 21, low-income, and have a barrier to completing an educational
program or securing or holding employment. At least 30% of the funds currently
allocated to local areas have to be spent on activities for out-of-school youth. Under
the House version of H.R. 27, eligible youth would be not less than age 16 and not
more than age 24. At least 70% of the funds would have to be spent on school
dropouts, recipients of a secondary school diploma or the General Educational
Development (GED) certificate, court-involved youth attending an alternative school,
and youth in foster care or who have been in foster care. Within this group, which
would not have to be low-income, priority for youth activities would be given to
school dropouts. No more than 30% of the funds could be spent on in-school youth
who would be low-income. In addition, activities for in-school youth could be
carried out only during non-school hours.
Under the Senate version of H.R. 27, in-school youth would be not less than age
14 and not more than age 21, low-income, and have a barrier to completing an
educational program or securing or holding employment. Out-of-school youth would
be not younger than age 16 or older than age 21 and would have to meet one of
several criteria such as a school dropout or a youth subject to the juvenile justice
system. At least 40% of the funds would be spent on out-of-school youth. Unlike
the House version, the Senate version does not create a priority for serving school
dropouts.
15 Forty percent of funds would be allocated on the basis of the relative number of
unemployed individuals residing in areas of substantial unemployment, 25% on the basis
of the relative number of individuals in the civilian labor force, and 35% on the basis of the
relative number of low-income adults. These are the same factors and weights as are used
to distribute the 74% of funds to states.
16 Sixty percent of funds would be allocated on the basis of the relative number of
unemployed individuals in each local area, 25% on the basis of the relative excess number
of unemployed individuals, and 15% on the basis of the relative number of disadvantaged
adults in each local area.

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Adult Activities
Under current law, three levels of services (core, intensive, and training) are
provided to individuals sequentially. To be eligible to receive intensive services,
such as comprehensive assessments and development of individual employment
plans, an individual must first receive at least one core service, such as job search,
and have been unable to either obtain employment or retain employment that allows
for self-sufficiency. To be eligible to receive training services, such as occupational
skills training and on-the-job training, an individual must have received at least one
intensive service, and must have been unable to obtain or retain employment.
Both versions of H.R. 27 would modify this sequencing of services to provide
that individuals could receive intensive or training services if they were unlikely or
unable to obtain or retain employment through core or intensive services,
respectively. Under the House version unemployed individuals would be eligible to
receive intensive or training services if the one-stop operator determined they would
be “unlikely or unable to obtain suitable employment,” or in the case of an employed
person, “retain suitable employment.” The Governor would define “suitable
employment.” Under the Senate version, unemployed individuals would be eligible
to receive intensive or training services if the one-stop operator determined they
would be “unlikely or unable to obtain employment that leads to self sufficiency or
wages comparable to or higher than previous employment,” or in the case of an
employed person, leads to “self-sufficiency.” Under the Senate version, a
self-sufficiency standard defined by states for state activities and local workforce
investment boards for local activities would specify the income needs of families, by
family size, the number and ages of children in the family, and sub-state geographical
considerations.
Under current law and the Senate version of H.R. 27, if a local area determined
that funds for adult activities are limited, a priority for intensive and training services
must be given to recipients of public assistance and low-income individuals
participating in the adult program.17 The House version would add a priority for
intensive and training services for unemployed individuals in its consolidated adult
program.
Both versions of H.R. 27 would permit local WIBs to use 10% of their allotment
for adult activities for incumbent worker training programs to assist workers in
obtaining the skills necessary to retain employment and avert layoffs.18 An employer
match would be required.
Training, as in current law, would be provided primarily though individual
training accounts, which would be called career scholarship accounts in the Senate
version of H.R. 27. The one-stop operator is responsible for arranging payment to
eligible training providers. Current law stipulates specific procedures states must
follow for determining provider eligibility, including specific cost and performance
17 There is no similar priority for the dislocated worker program.
18 Under current law, statewide activities may include training for incumbent workers, but
there is no similar provision for local areas.

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information that providers must collect. Under both versions, current statutory
requirements would be eliminated and Governors would be responsible for
establishing criteria and procedures regarding the eligibility of providers. Local
WIBs and one-stop delivery systems would continue to retain a list of eligible
providers, and participants would continue to choose providers from this list in
consultation with a case manager.
Demonstration and Pilot Projects
Under current law, the Secretary of Labor is authorized to carry out
demonstration and pilot projects that would develop and implement approaches and
demonstrate the effectiveness of specialized methods in addressing employment and
training needs. Both versions of H.R. 27 would amend the list of projects that could
be funded to include projects that focus on opportunities for employment in
industries and sectors of industries that are experiencing (or are likely to experience)
high rates of growth, and projects that provide retention grants to job training
programs upon placement or retention of a low-income individual in jobs providing
a certain level of income. In addition, both versions would authorize specific
demonstration projects that are summarized below.
Community-Based Job Training. Both versions of H.R. 27 would
authorize a competitive grant demonstration project to eligible entities to carry out
activities such as the development of rigorous training and education programs.
Under the House version, an eligible entity would be a community college or
consortia of community colleges that would work with the local workforce
investment system and business in a qualified industry (e.g., an industry or economic
sector projected to experience significant growth). Under the Senate version, an
eligible entity would be a community college or a consortium composed of a
community college and an institution of higher education, that would work with a
local board, business in a qualified industry, and an economic development entity.
For each of the fiscal years 2005 through 2007, the President has requested
funding for a competitive grant demonstration project to enhance the capacity of
community colleges to provide training, particularly for occupations in demand by
high growth industries. Congress has appropriated $125 million for FY2005 and for
FY2006. The House version of H.R. 27 would authorize $125 million under WIA
demonstration authority and would provide that $125 million could be spent from the
Secretary’s Reserve under the new consolidated adult program. The Senate version
does not authorize a specific amount of funding.
Personal Reemployment Accounts (PRAs). The House version of H.R.
27 would authorize a PRA demonstration project. The PRA provisions in the House
version are identical to the provisions contained in H.R. 444, passed in the House in
the 108th Congress.
The principal features of the PRA demonstration are as follows:
! States and other eligible entities would provide accounts of up to
$3,000 per eligible individual. The initial account balances must be
the same for all participants within a state.

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! Eligible individuals primarily would be Unemployment Insurance
(UI) claimants identified through worker profiling as likely to
exhaust their benefits and in need of job search assistance to obtain
new employment.19 Eligible entities could, at their option, extend
accounts to individuals who had exhausted their benefit entitlement
and (a) are in training for which completion requires additional
support, or (b) were laid off from an industry or occupation with
declining employment or which no longer provides jobs in a local
area.
! Individuals could use the account funds, at their own discretion, to
purchase a variety of employment-related services (e.g., intensive
services, training, and support services and assistance with buying
or leasing a car) on a fee-for-service basis from the one-stop delivery
system or other service providers. Recipients could only receive
training, intensive, and support services on a fee-for-service basis
during the one-year period from the date of establishment of their
accounts. Core services provided by one-stop centers would remain
free to account recipients (e.g., access to job listings and assistance
with writing resumes).
! Individuals with PRAs who obtain full-time jobs within a 13-week
qualification period (dating from initial receipt of UI benefits for
those still eligible for benefits and from the account’s establishment
for those who had exhausted their benefits) would receive any funds
remaining in their accounts as bonuses. The bonuses would be
dispensed in two installments: 60% upon reemployment and 40%
six months thereafter.
These features are similar to an $8 million PRA demonstration for which the
Labor Department (DOL) announced awards to seven states on October 29, 2004.20
For FY2005, the President requested $50 million under the authority of WIA Section
171 for a PRA demonstration. Funding for the demonstration was not included in the
FY2005 consolidated appropriations act (P.L. 108-447). No request for funding was
made for FY2006 or FY2007.
Training for Realtime Writers. The House version of H.R. 27 would
authorize competitive grants to court reporting or realtime writing training programs
that met certain conditions to promote training and placement of individuals as
19 P.L. 103-152, which amended the Social Security Act, required states to develop systems
of profiling new UI claimants in order to identify those likely to exhaust their benefits.
After states screen out initial claimants on recall status (including in some cases persons laid
off from seasonal industries) and those who exclusively use union hiring halls, the states use
statistical models or characteristic screens to identify potential UI exhaustees. Measures
taken into account include previous occupation, industry, wages, and job tenure; educational
attainment and other claimant characteristics; local economic indicators; and the
individual’s UI weekly benefit amount. States are not permitted to include such equal
opportunity characteristics as age, race, gender, and disability status.
20 The seven states are Florida, Idaho, Minnesota, Mississippi, Montana, Texas and West
Virginia. For more information, see [http://www.dol.gov/opa/media/press/opa/
OPA20042248.htm].

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realtime writers in order to meet the requirements for closed captioning of video
programming set forth in Section 723 of the Communications Act of 1994.
Business Partnership Grants. The House version of H.R. 27 would
authorize competitive grants to businesses or business partnerships to expand local
sector-focused training and workforce development in high-growth, high-wage
industry sectors.
Skill Certification Pilot Projects. The Senate version of H.R. 27 would
require the Secretary of Labor to establish and carry out not more than 10 pilot
projects to establish a system of industry-validated national certification of skills.
For FY2006, $30.0 million would be authorized for these pilot projects.
Integrated Workforce Training Programs for Adults with Limited
English Proficiency. The Senate version of H.R. 27 would require the Secretary
of Labor to establish and implement a national demonstration project designed to
both analyze and provide data on workforce training programs that integrate English
language acquisition and occupational training. The Secretary would be required to
make not less than 10 grants on a competitive basis. For FY2006, $10.0 million
would be authorized for this demonstration project.
Performance Accountability
Under current law, there are four core indicators of performance for programs
serving youth ages 19 through 21, adults, and dislocated workers: entry into
unsubsidized employment, retention in employment six months after job entry,
earnings received six months after job entry, and attainment of a recognized
credential. There are also two measures of customer satisfaction, one for individuals
and one for employers. The House version of H.R. 27 would eliminate the measure
of attainment of a credential. The House version would also eliminate the current
measures of customer satisfaction, but would permit states to include customer
satisfaction of employers and participants as additional indicators of performance in
the state plan. The Senate version would modify the earnings measure to be an
“increase in earnings”; it would not eliminate measures of customer satisfaction.
Both versions would eliminate the application of these indicators to youth ages 19
through 21.
Under current law, there are three indicators of performance for programs
serving youth ages 14 through 18: attainment of basic skills, attainment of secondary
school diplomas and their equivalents, and placement and retention in such things as
postsecondary education, advanced training, military service, and employment. Both
versions of H.R. 27 would modify current core indicators of performance to apply to
youth of all ages. The three indicators, that are similar but not identical, would be
entry into employment, education or advanced training, or military service;
attainment of secondary school diplomas or their recognized equivalents, and
postsecondary certificates; and literacy or numeracy gains. Under the Senate version,
a state could add in the state plan additional indicators of performance including
indicators identified in collaboration with state business and industry associations,
with employee representatives, and with local boards, to measure the performance

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of the workforce investment system in serving the workforce needs of business and
industry in the state.
Nondiscrimination
Under current law, discrimination regarding participation, benefits and
employment because of race, color, religion, sex, national origin, age, disability or
political affiliation is prohibited. The House version of H.R. 27 would continue these
prohibitions, but it would add an exemption for religious organizations with respect
to their employment of individuals of a particular religion. The Senate version would
not change current law.
Authorization of Appropriations
Youth, Adult, and Dislocated Worker Activities. Under the House
version of H.R. 27, youth activities would be authorized at $1.25 billion for FY2006,
and for such sums as necessary for each of the fiscal years 2007 through 2011. Adult
activities under the new consolidated adult program would be authorized at $3.14
billion for FY2006, and for such sums as necessary for each of the fiscal years
FY2007 through FY2011. Under the Senate version, youth, adult, and dislocated
worker programs would be authorized for such sums as necessary for each of the
fiscal years FY2006 through FY2011.
Demonstration and Pilot Projects. The House version of H.R. 27 would
authorize $211.0 million for FY2006 and such sums as may be necessary for each of
the fiscal years FY2007 through FY2011. Of this amount, the Secretary would
reserve up to $125,000,000 for the Community-Based Job Training Demonstration
Project. The Senate version would authorize such sums as may be necessary for each
of the fiscal years FY2006 through FY2011.

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