(a) In general
The Secretary shall—

(1) for each fiscal year for which the amount appropriated under section 3181(a) of this title exceeds $925,000,000, reserve 4 percent of the excess amount to provide youth workforce investment activities under section 3222 of this title (relating to migrant and seasonal farmworkers); and

(2) use the remainder of the amount appropriated under section 3181(a) of this title for a fiscal year to make allotments and grants in accordance with subsection (b).

(b) Allotment among States

(1) Youth workforce investment activities

(A) Native Americans
From the amount appropriated under section 3181(a) of this title for a fiscal year that is not reserved under subsection (a)(1), the Secretary shall reserve not more than 1½ percent of such amount to provide youth workforce investment activities under section 3221 of this title (relating to Native Americans).

(B) Outlying areas

(i) In general
From the amount appropriated under section 3181(a) of this title for each fiscal year that is not reserved under subsection (a)(1) and subparagraph (A), the Secretary shall reserve not more than ¼ of 1 percent of such amount to provide assistance to the outlying areas to carry out youth workforce investment activities and statewide workforce investment activities.

(ii) Limitation for outlying areas

(I) Competitive grants

The Secretary shall use funds reserved under clause (i) to award grants to outlying areas to carry out youth workforce investment activities and statewide workforce investment activities.

(II) Award basis

The Secretary shall award grants pursuant to subclause (I) on a competitive basis and pursuant to the recommendations of experts in the field of employment and training, working through the Pacific Region Educational Laboratory in Honolulu, Hawaii.

(III) Administrative costs

The Secretary may provide not more than 5 percent of the funds made available for grants under subclause (I) to pay the administrative costs of the Pacific Region Educational Laboratory in Honolulu, Hawaii, regarding activities assisted under this clause.

(iii) Additional requirement
The provisions of section 1469a of title 48, permitting the consolidation of grants by the outlying areas, shall not apply to assistance provided to those areas, including Palau, under this subparagraph.

(C) States

(i) In general
From the remainder of the amount appropriated under section 3181(a) of this title for a fiscal year that exists after the Secretary determines the amounts to be reserved under subsection (a)(1) and subparagraphs (A) and (B), the Secretary shall make allotments to the States in accordance with clause (ii) for youth workforce investment activities and statewide workforce investment activities.

(ii) Formula
Subject to clauses (iii) and (iv), of the remainder—

(I) 331/3 percent shall be allotted on the basis of the relative number of unemployed individuals in areas of substantial unemployment in each State, compared to the total number of unemployed individuals in areas of substantial unemployment in all States;

(II) 331/3 percent shall be allotted on the basis of the relative excess number of unemployed individuals in each State, compared to the total excess number of unemployed individuals in all States; and

(III) 331/3 percent shall be allotted on the basis of the relative number of disadvantaged youth in each State, compared to the total number of disadvantaged youth in all States, except as described in clause (iii).

(iii) Calculation
In determining an allotment under clause (ii)(III) for any State in which there is an area that was designated as a local area as described in section 3122(c)(1)(C) of this title, the allotment shall be based on the higher of—

(I) the number of individuals who are age 16 through 21 in families with an income below the low-income level in such area; or

(II) the number of disadvantaged youth in such area.

(iv) Minimum and maximum percentages and minimum allotments
In making allotments under this subparagraph, the Secretary shall ensure the following:

(I) Minimum percentage and allotment

Subject to subclause (IV), the Secretary shall ensure that no State shall receive an allotment for a fiscal year that is less than the greater of—

(aa) an amount based on 90 percent of the allotment percentage of the State for the preceding fiscal year; or

(bb) 100 percent of the allotments of the State under section 127(b)(1)(C) of the Workforce Investment Act of 1998 [29 U.S.C. 2852(b)(1)(C)] (as in effect on the day before July 22, 2014) for fiscal year 2014.

(II) Small State minimum allotment

Subject to subclauses (I), (III), and (IV), the Secretary shall ensure that no State shall receive an allotment under this subparagraph that is less than the total of—

(aa) 3/10 of 1 percent of $1,000,000,000 of the remainder described in clause (i) for the fiscal year; and

(bb) if the remainder described in clause (i) for the fiscal year exceeds $1,000,000,000, 2/5 of 1 percent of the excess.

(III) Maximum percentage

Subject to subclause (I), the Secretary shall ensure that no State shall receive an allotment percentage for a fiscal year that is more than 130 percent of the allotment percentage of the State for the preceding fiscal year.

(IV) Minimum funding

In any fiscal year in which the remainder described in clause (i) does not exceed $1,000,000,000, the minimum allotments under subclauses (I) and (II) shall be calculated by the methodology specified in section 127(b)(1)(C)(iv)(IV) of the Workforce Investment Act of 1998 [29 U.S.C. 2852(b)(1)(C)(iv)(IV)] (as in effect on the day before July 22, 2014).

(2) Definitions
For the purpose of the formula specified in paragraph (1)(C):

(A) Allotment percentage
The term "allotment percentage", used with respect to fiscal year 2015 or a subsequent fiscal year, means a percentage of the remainder described in paragraph (1)(C)(i) that is received through an allotment made under paragraph (1)(C) for the fiscal year. The term, used with respect to fiscal year 2014, means the percentage of the amount allotted to States under section 127(b)(1)(C) of the Workforce Investment Act of 1998 [29 U.S.C. 2852(b)(1)(C)] (as in effect on the day before July 22, 2014) that is received under such section by the State involved for fiscal year 2014.

(B) Area of substantial unemployment
The term "area of substantial unemployment" means any area that is of sufficient size and scope to sustain a program of workforce investment activities carried out under this part and that has an average rate of unemployment of at least 6.5 percent for the most recent 12 months, as determined by the Secretary. For purposes of this subparagraph, determinations of areas of substantial unemployment shall be made once each fiscal year.

(C) Disadvantaged youth
Subject to paragraph (3), the term "disadvantaged youth" means an individual who is age 16 through 21 who received an income, or is a member of a family that received a total family income, that, in relation to family size, does not exceed the higher of—

(i) the poverty line; or

(ii) 70 percent of the lower living standard income level.

(D) Excess number
The term "excess number" means, used with respect to the excess number of unemployed individuals within a State, the higher of—

(i) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in the State; or

(ii) the number that represents the number of unemployed individuals in excess of 4.5 percent of the civilian labor force in areas of substantial unemployment in such State.

(E) Low-income level
The term "low-income level" means $7,000 with respect to income in 1969, and for any later year means that amount that bears the same relationship to $7,000 as the Consumer Price Index for that year bears to the Consumer Price Index for 1969, rounded to the nearest $1,000.

(3) Special rule
For the purpose of the formula specified in paragraph (1)(C), the Secretary shall, as appropriate and to the extent practicable, exclude college students and members of the Armed Forces from the determination of the number of disadvantaged youth.

(c) Reallotment

(1) In general
The Secretary shall, in accordance with this subsection, reallot to eligible States amounts that are made available to States from allotments made under this section or a corresponding provision of the Workforce Investment Act of 1998 for youth workforce investment activities and statewide workforce investment activities (referred to individually in this subsection as a "State allotment") and that are available for reallotment.

(2) Amount
The amount available for reallotment for a program year is equal to the amount by which the unobligated balance of the State allotment, at the end of the program year prior to the program year for which the determination under this paragraph is made, exceeds 20 percent of such allotment for the prior program year.

(3) Reallotment
In making reallotments to eligible States of amounts available pursuant to paragraph (2) for a program year, the Secretary shall allot to each eligible State an amount based on the relative amount of the State allotment for the program year for which the determination is made, as compared to the total amount of the State allotments for all eligible States for such program year.

(4) Eligibility
For purposes of this subsection, an eligible State means a State that does not have an amount available for reallotment under paragraph (2) for the program year for which the determination under paragraph (2) is made.

(5) Procedures
The Governor shall prescribe uniform procedures for the obligation of funds by local areas within the State in order to avoid the requirement that funds be made available for reallotment under this subsection. The Governor shall further prescribe equitable procedures for making funds available from the State and local areas in the event that a State is required to make funds available for reallotment under this subsection.