(a) Reservations for statewide activities

(1) In general
The Governor shall reserve not more than 15 percent of each of the amounts allotted to the State under section 3162(b)(1)(C) of this title and paragraphs (1)(B) and (2)(B) of section 3172(b) of this title for a fiscal year for statewide workforce investment activities.

(2) Use of funds
Regardless of whether the reserved amounts were allotted under section 3162(b)(1)(C) of this title, or under paragraph (1)(B) or (2)(B) of section 3172(b) of this title, the Governor may use the reserved amounts to carry out statewide activities under section 3164(b) of this title or statewide employment and training activities, for adults or dislocated workers, under section 3174(a) of this title.

(b) Within State allocations

(1) Methods
The Governor, acting in accordance with the State plan, and after consulting with chief elected officials and local boards in the local areas, shall allocate the funds that are allotted to the State for youth activities and statewide workforce investment activities under section 3162(b)(1)(C) of this title and are not reserved under subsection (a), in accordance with paragraph (2) or (3).

(2) Formula allocation

(A) Youth activities

(i) Allocation
In allocating the funds described in paragraph (1) to local areas, a State may allocate—

(I) 331/3 percent of the funds on the basis described in section 3162(b)(1)(C)(ii)(I) of this title;

(II) 331/3 percent of the funds on the basis described in section 3162(b)(1)(C)(ii)(II) of this title; and

(III) 331/3 percent of the funds on the basis described in clauses (ii)(III) and (iii) of section 3162(b)(1)(C) of this title.

(ii) Minimum percentage
The local area shall not receive an allocation percentage for a fiscal year that is less than 90 percent of the average allocation percentage of the local area for the 2 preceding fiscal years. Amounts necessary for increasing such allocations to local areas to comply with the preceding sentence shall be obtained by ratably reducing the allocations to be made to other local areas under this subparagraph.

(iii) Definition
In this subparagraph, the term "allocation percentage", used with respect to fiscal year 2015 or a subsequent fiscal year, means a percentage of the funds referred to in clause (i), received through an allocation made under this subparagraph, for the fiscal year. The term, used with respect to fiscal year 2013 or 2014, means a percentage of the funds referred to in section 128(b)(1) of the Workforce Investment Act of 1998 [29 U.S.C. 2853(b)(1)] (as in effect on the day before July 22, 2014), received through an allocation made under paragraph (2) or (3) of section 128(b) of the Workforce Investment Act of 1998 (as so in effect), for the fiscal year 2013 or 2014, respectively.

(B) Application
For purposes of carrying out subparagraph (A)—

(i) references in section 3162(b) of this title to a State shall be deemed to be references to a local area;

(ii) references in section 3162(b) of this title to all States shall be deemed to be references to all local areas in the State involved; and

(iii) except as described in clause (i), references in section 3162(b)(1) of this title to the term "excess number" shall be considered to be references to the term as defined in section 3162(b)(2) of this title.

(3) Youth discretionary allocation
In lieu of making the allocation described in paragraph (2), in allocating the funds described in paragraph (1) to local areas, a State may distribute—

(A) a portion equal to not less than 70 percent of the funds in accordance with paragraph (2)(A); and

(B) the remaining portion of the funds on the basis of a formula that—

(i) incorporates additional factors (other than the factors described in paragraph (2)(A)) relating to—

(I) excess youth poverty in urban, rural, and suburban local areas; and

(II) excess unemployment above the State average in urban, rural, and suburban local areas; and

(ii) was developed by the State board and approved by the Secretary as part of the State plan.

(4) Local administrative cost limit

(A) In general
Of the amount allocated to a local area under this subsection and section 3173(b) of this title for a fiscal year, not more than 10 percent of the amount may be used by the local board involved for the administrative costs of carrying out local workforce investment activities under this subpart or subpart 3.

(B) Use of funds
Funds made available for administrative costs under subparagraph (A) may be used for the administrative costs of any of the local workforce investment activities described in this subpart or subpart 3, regardless of whether the funds were allocated under this subsection or section 3173(b) of this title.

(c) Reallocation among local areas

(1) In general
The Governor may, in accordance with this subsection and after consultation with the State board, reallocate to eligible local areas within the State amounts that are made available to local areas from allocations made under this section or a corresponding provision of the Workforce Investment Act of 1998 for youth workforce investment activities (referred to individually in this subsection as a "local allocation") and that are available for reallocation.

(2) Amount
The amount available for reallocation for a program year is equal to the amount by which the unobligated balance of the local allocation, 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 allocation for the prior program year.

(3) Reallocation
In making reallocations to eligible local areas of amounts available pursuant to paragraph (2) for a program year, the Governor shall allocate to each eligible local area within the State an amount based on the relative amount of the local allocation for the program year for which the determination is made, as compared to the total amount of the local allocations for all eligible local areas in the State for such program year.

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