The Workforce Investment Act of 1998 (WIA): Reauthorization of Job Training Programs in the 109th Congress

The Workforce Investment Act of 1998 (WIA): Reauthorization of Job Training Programs in the 109th Congress

Order Code RL32778
The Workforce Investment Act of 1998 (WIA):
Reauthorization of Job Training Programs
in the 109th Congress
Updated January 9, 2007
Blake Alan Naughton and Ann Lordeman
Domestic Social Policy Division

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 FY2007.
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 have reauthorized and revised 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. No further action was taken before adjournment sine die.
Both the House and Senate versions of H.R. 27, in addition to reauthorizing the
Title I WIA training programs, would have also modified the Adult Education and
Family Literacy Act (AEFLA) and reauthorized the Rehabilitation Act of 1973; all
three would have been 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 not be updated.

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) . . . . . . . . . . . . . . . . . . . . . 11
Training for Realtime Writers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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

The Workforce Investment Act of 1998
(WIA): Reauthorization of Job Training
Programs in the 109th Congress
Most Recent Developments
The 109th Congress adjourned sine die without reaching agreement on a bill that
would have reauthorized and amended the Workforce Investment Act of 1998 (P.L.
105-220). 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. 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.

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 was a
provision that would have allowed 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 was not included in the
Senate version. Another major difference between the two versions of H.R. 27 was
that the House version would have created 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 have created a
consolidated adult program; funding streams would have remained separate. The
Senate version would have, however, permitted local boards with the approval of the
Governor to transfer up to 100% of their allocations between the adult and dislocated
worker programs.
Both versions of H.R. 27, among other things, would have also amended and
reauthorized 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 have made TANF
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.

CRS-3
a 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
have required 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 have been used, except that federal direct spending programs, such
as TANF, would have contributed an amount equal to their proportionate use in the
state. Each state WIB would have developed 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 have required 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 have been a cap on
the portion of federal funds that could be required to be contributed. The cap would
have applied to all federal funds allotted to a program, but the funds could have been
contributed only from the administrative funds. This cap would have been 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 have increased 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 have been 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 have added the state agency officials
responsible for economic development to the required membership, clarified that the
director of the state vocational rehabilitation unit be a member of the state WIB, and
removed representatives of youth organizations as members.
Both versions of H.R. 27 would have amended 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 have also amended the functions of the WIBs by adding the
requirement that they assist the Governor in certifying one-stop centers and awarding
infrastructure funds.

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 would
have eliminated the automatic designation for local areas in Rhode Island, but
continued automatic designation for jurisdictions with populations of 500,000 or
more and rural-concentrated employment programs, although allowing the Governor
to deny a request for designation if the unit of government did not perform
successfully6 during the preceding two years. The Senate version would have
continued 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 have made 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 have eliminated 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 have made youth
councils optional. The House version would have added “faith-based organization”
to the list of entities that must be represented on the local board. The Senate version
would not have made this change, but it would have included 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 have retained the youth program, but refocus it as
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.

CRS-5
described below. The House version would have created 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 have maintained 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 have retained these programs and would have
created a new Youth Challenge Grant Program.8
Youth Challenge Grants. This program would have been 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 have been used for competitive grants to states and local
areas, and not more than 20% would have been used for grants to public or private
entities.9 Under the House version, the Secretary could have required the grantees
to provide an unspecified non-federal share of the cost of the activities. Under the
Senate version, the Secretary must have required 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 have been 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
8 Youth Challenge Grants would have replaced 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 have been awarded to public
or private entities that the Secretary determined would be effective. Under the Senate
version of H.R. 27, 20% of the funds would have been awarded to a 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.

CRS-6
one-third on the basis of the relative number of low-income youth. In addition, states
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 have reserved 25% for Youth Challenge
Grants — not to exceed $250 million. Of the remainder, not more than 0.25% would
have been 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 have
reserved 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 have been 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 have reserved 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 have been 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 have been allotted 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 have been allotted 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 allotted 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 have reserved up to 10% for statewide activities. Under the Senate
version, up to 15% could have been 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 the House version, 80% would have been allocated to local areas
using the same factors and weights that would have been used to allot funds to states,
and 20% would have been allocated to local areas on a formula developed in
12 Under current law, one-third of funds are allotted 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.

CRS-7
consultation with state and local WIBs. The Senate version would have allowed that
not less than 80% be allocated to local areas using the state allotment formula; the
remainder — up to 20% — would have been allocated based on a state-developed
formula.
Allocations for Adult Activities. Separate formulas are currently used to
allot 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 have been combined into one formula grant for a revised adult
program. Of the funds appropriated for adult activities, the Secretary of Labor would
have reserved 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 have been reserved for grants to outlying
areas. The remainder would have been allotted by a two-part formula. The first part
would have allotted 26% of the remainder based primarily on a state’s prior-year
share of the Wagner-Peyser state allotments. The second part would have allotted
74% of the remainder as follows: 60% (of the remaining 74% of total funds) would
have been 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 have received 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 have been the sum of its allotment under the two parts, except that no state
would have received less than it received in FY2005 for the total of the four funding
streams and, unless DOL determined otherwise, no state would have received 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 have 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 have created a consolidated adult
program; funding streams would have remained separate. The funding formula for
the adult program would have been 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
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 have been used for national dislocated worker
grants, of which up to $125 million could have been used to carry out a demonstration
project on community-based job training, not more than 20% could have been used for
demonstration projects, and not more than 5% could have been used to provide technical
assistance.

CRS-8
number of low-income adults rather than one-third. The dislocated worker formula
would have been the same as current law.
Under current law, of the funds allotted 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
have reserved up to 50% for statewide activities. Of this amount, not less than half
would have been 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 have employed 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
have retained 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 have been modified.15 Under the House version, of the funds
allocated to local areas for the consolidated adult program, 85% would have been
allocated based on a statutory formula,16 and 15% would have been 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 have been defined as not less than
age 16 and not more than age 24. At least 70% of the funds would have to have been
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 have been given to school dropouts. No more than 30% of the funds could
have been spent on in-school youth who would be low-income. In addition, activities
for in-school youth could have been carried out only during non-school hours.
15 Forty percent of funds would have been 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 have been 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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Under the Senate version of H.R. 27, in-school youth would have been defined
as 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 have been not younger than age 16 or older than age 21 and
would have to have met 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 have been
spent on out-of-school youth. Unlike the House version, the Senate version would
not have created a priority for serving school dropouts.
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 have modified 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 have been
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 have
defined “suitable employment.” Under the Senate version, unemployed individuals
would have been 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 have
specified 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 have added a priority
for intensive and training services for unemployed individuals in its consolidated
adult program.
Both versions of H.R. 27 would have permitted local WIBs to use 10% of their
allotment for adult activities for incumbent worker training programs to assist
17 There is no similar priority for the dislocated worker program.

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workers in obtaining the skills necessary to retain employment and avert layoffs.18
An employer match would have been required.
Training, as in current law, would be provided primarily though individual
training accounts, which would have been 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 information that providers must collect. Under both versions, current
statutory requirements would have been eliminated and Governors would be
responsible for establishing criteria and procedures regarding the eligibility of
providers. Local WIBs and one-stop delivery systems would have continued to retain
a list of eligible providers, and participants would have continued 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 have amended 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 have authorized specific
demonstration projects that are summarized below.
Community-Based Job Training. Both versions of H.R. 27 would have
authorized 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 have been 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 have been 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 have authorized $125 million under
WIA demonstration authority and would have provided that $125 million could be
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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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 have authorized 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.
! 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.
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.

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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 have
authorized competitive grants to court reporting or realtime writing training programs
that met certain conditions to promote training and placement of individuals as
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 have
authorized 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
have required 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 have required 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 have been required to make not less than 10 grants on a competitive basis. For
FY2006, $10.0 million would have been 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 have eliminated the
measure of attainment of a credential. The House version would have also
eliminated the current measures of customer satisfaction, but would have permitted
states to include customer satisfaction of employers and participants as additional
indicators of performance in the state plan. The Senate version would have modified
the earnings measure to be an “increase in earnings”; it would not have eliminated
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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measures of customer satisfaction. Both versions would have eliminated 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 have modified current core indicators of performance to
apply to youth of all ages. The three indicators, that are similar but not identical,
would have been 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 have added 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 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 have
continued these prohibitions, but it would have added an exemption for religious
organizations with respect to their employment of individuals of a particular religion.
The Senate version would not have changed current law.
Authorization of Appropriations
Youth, Adult, and Dislocated Worker Activities. Under the House
version of H.R. 27, youth activities would have been 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 have been
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 have been 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
have authorized $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 have reserved up to $125,000,000 for the Community-Based Job Training
Demonstration Project. The Senate version would have authorized such sums as may
be necessary for each of the fiscal years FY2006 through FY2011.