29 U.S.C. § 3173 — Within State allocations

(a) Reservations for State activities. (1) Statewide workforce-investment activities. The Governor must make the reservation required by section 3163(a). (2) Statewide rapid-response activities. For a fiscal year, the Governor must reserve no more than 25 percent of the amount allotted to the State under section 3172(b)(2)(B) for the statewide rapid-response activities described in section 3174(a)(2)(A).

(b) Allocation within the State. (1) Methods. Acting under the State plan and after consulting chief elected officials and local boards, the Governor must allocate: (A) funds allotted for adult employment and training and statewide workforce-investment activities under section 3172(b)(1)(B) that are not reserved under subsection (a)(1), using paragraph (2) or (3); and (B) funds allotted for dislocated-worker employment and training and statewide workforce-investment activities under section 3172(b)(2)(B) that are not reserved under paragraph (1) or (2) of subsection (a), using paragraph (2).

(2) Formula allocations. (A) Adult activities. (i) Allocation. When allocating the funds in paragraph (1)(A) to local areas, a State may allocate one-third of the funds using the basis in section 3172(b)(1)(B)(ii)(I), one-third using the basis in section 3172(b)(1)(B)(ii)(II), and one-third using the bases in section 3172(b)(1)(B)(ii)(III) and (iii). (ii) Minimum percentage. For a fiscal year, a local area’s allocation percentage may not be less than 90 percent of that area’s average allocation percentage for the two preceding fiscal years. Amounts needed to raise allocations to that level must be obtained by reducing the other local areas’ allocations proportionally. (iii) Definition. For fiscal year 2015 and later, “allocation percentage” means the percentage of the funds described in clause (i) that the local area receives through this paragraph for that fiscal year. For fiscal years 2013 and 2014, it means the percentage of the amount allocated to local areas under section 133(b)(2)(A) and (3) of the Workforce Investment Act of 1998 [29 U.S.C. 2863(b)], as that law existed on July 21, 2014, that the area received through paragraph (2)(A) or (3) of that section for the applicable fiscal year.

(B) Dislocated-worker activities. (i) Allocation. The State must distribute the funds in paragraph (1)(B) to local areas using an allocation formula set by the Governor. The Governor may change that formula no more than once per program year. It must use the best suitable information available to address the State’s worker-readjustment needs. (ii) Information. That information must include insured-unemployment data, unemployment concentrations, plant-closing and mass-layoff data, data about declining industries, farmer-rancher economic-hardship data, and long-term-unemployment data. (iii) Minimum percentage. For fiscal year 2016 and later, a local area’s allocation percentage may not be less than 90 percent of its average percentage for the two preceding fiscal years. Needed increases must be paid for by proportionally reducing other local areas’ allocations. (iv) Definition. For fiscal year 2015 and later, “allocation percentage” means the percentage of the funds in clause (i) received through this subparagraph for that fiscal year. For fiscal year 2014, it means the percentage of the amount allocated under section 133(b)(2)(B) of the Workforce Investment Act of 1998 [29 U.S.C. 2863(b)(2)(B)], as it existed on July 21, 2014, that was received under that section for fiscal year 2014.

(C) Application. For applying subparagraph (A): (i) references in section 3172(b) to a State are treated as references to a local area; (ii) references to all States are treated as references to all local areas in the State involved; and (iii) except as clause (i) provides, references in section 3172(b)(1) to “excess number” mean that term as section 3172(b)(1) defines it.

(3) Discretionary adult allocations. Instead of the allocation in paragraph (2)(A), the State may distribute the funds in paragraph (1)(A) by giving at least 70 percent under paragraph (2)(A) and distributing the rest under a formula that (A) includes additional factors concerning excess poverty in urban, rural, and suburban local areas and excess unemployment above the State average in those types of areas, and (B) was developed by the State board and approved by the Secretary as part of the State plan.

(4) Transfers. With the Governor’s approval, a local board may transfer up to 100 percent of the funds allocated to the local area under paragraph (2)(A) or (3), and up to 100 percent of the funds allocated under paragraph (2)(B), between adult employment and training activities and dislocated-worker employment and training activities.

(5) Allocation. (A) General rule. The Governor must allocate the funds in paragraph (1) under paragraphs (2) and (3) to local areas so they can provide one employment-and-training system for adults and dislocated workers under section 3174(c) and (d). (B) Additional requirements. (i) Adult funds under paragraph (2)(A) or (3) must help pay the local area’s share of the one-stop delivery system under section 3151(e), as determined under section 3151(h), and employment and training activities for adults consistent with section 3174. (ii) Dislocated-worker funds under paragraph (2)(B) must similarly help pay the one-stop system share and activities for dislocated workers, consistent with section 3174.

(c) Reallocation among local areas. (1) General rule. Under this subsection and after consulting the State board, the Governor may reallocate to eligible local areas amounts made available to local areas from adult allocations under subsection (b)(2)(A) or (3), or a corresponding Workforce Investment Act provision, and dislocated-worker allocations under subsection (b)(2)(B), or a corresponding provision, when those amounts are available for reallocation. This subsection calls each such amount a “local allocation.” (2) Amount. For a program year, the amount available for adult activities is the part by which the local allocation’s unobligated balance at the end of the preceding program year exceeds 20 percent of that prior-year allocation. The amount for dislocated-worker activities is calculated the same way using subsection (b)(2)(B). (3) Reallocation. For available adult money, the Governor must give each eligible local area an amount based on its local allocation for the determination year compared with the total adult local allocations for all eligible local areas that year. For available dislocated-worker money, the Governor must use the same comparison between that area’s and all eligible areas’ dislocated-worker local allocations. (4) Eligibility. For adult funds, an eligible local area is one that does not have funds available for reallocation under paragraph (2) for the determination year. For dislocated-worker funds, it is one that does not have such funds available for reallocation under paragraph (2) for that year.