(a) Reservations for State activities

(1) Statewide workforce investment activities
The Governor shall make the reservation required under section 3163(a) of this title.

(2) Statewide rapid response activities
The Governor shall reserve not more than 25 percent of the total amount allotted to the State under section 3172(b)(2)(B) of this title for a fiscal year for statewide rapid response activities described in section 3174(a)(2)(A) of this title.

(b) Within State allocation

(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—

(A) the funds that are allotted to the State for adult employment and training activities and statewide workforce investment activities under section 3172(b)(1)(B) of this title and are not reserved under subsection (a)(1), in accordance with paragraph (2) or (3); and

(B) the funds that are allotted to the State for dislocated worker employment and training activities and statewide workforce investment activities under section 3172(b)(2)(B) of this title and are not reserved under paragraph (1) or (2) of subsection (a), in accordance with paragraph (2).

(2) Formula allocations

(A) Adult employment and training activities

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

(I) 331/3 percent of the funds on the basis described in section 3172(b)(1)(B)(ii)(I) of this title;

(II) 331/3 percent of the funds on the basis described in section 3172(b)(1)(B)(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 3172(b)(1)(B) 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 amount allocated to local areas under paragraphs (2)(A) and (3) of section 133(b) of the Workforce Investment Act of 1998 [29 U.S.C. 2863(b)] (as in effect on the day before July 22, 2014), received through an allocation made under paragraph (2)(A) or (3) of that section for fiscal year 2013 or 2014, respectively.

(B) Dislocated worker employment and training activities

(i) Allocation
In allocating the funds described in paragraph (1)(B) to local areas, a State shall allocate the funds based on an allocation formula prescribed by the Governor of the State. Such formula may be amended by the Governor not more than once for each program year. Such formula shall utilize the most appropriate information available to the Governor to distribute amounts to address the State's worker readjustment assistance needs.

(ii) Information
The information described in clause (i) shall include insured unemployment data, unemployment concentrations, plant closing and mass layoff data, declining industries data, farmer-rancher economic hardship data, and long-term unemployment data.

(iii) Minimum percentage
The local area shall not receive an allocation percentage for fiscal year 2016 or a subsequent 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.

(iv) 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 2014, means a percentage of the amount allocated to local areas under section 133(b)(2)(B) of the Workforce Investment Act of 1998 [29 U.S.C. 2863(b)(2)(B)] (as in effect on the day before July 22, 2014), received through an allocation made under that section for fiscal year 2014.

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

(i) references in section 3172(b) of this title to a State shall be deemed to be references to a local area;

(ii) references in section 3172(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 3172(b)(1) of this title to the term "excess number" shall be considered to be references to the term as defined in section 3172(b)(1) of this title.

(3) Adult employment and training discretionary allocations
In lieu of making the allocation described in paragraph (2)(A), in allocating the funds described in paragraph (1)(A) 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 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) Transfer authority
A local board may transfer, if such a transfer is approved by the Governor, up to and including 100 percent of the funds allocated to the local area under paragraph (2)(A) or (3), and up to and including 100 percent of the funds allocated to the local area under paragraph (2)(B), for a fiscal year between—

(A) adult employment and training activities; and

(B) dislocated worker employment and training activities.

(5) Allocation

(A) In general
The Governor shall allocate the funds described in paragraph (1) to local areas under paragraphs (2) and (3) for the purpose of providing a single system of employment and training activities for adults and dislocated workers in accordance with subsections (c) and (d) of section 3174 of this title.

(B) Additional requirements

(i) Adults
Funds allocated under paragraph (2)(A) or (3) shall be used by a local area to contribute to the costs of the one-stop delivery system described in section 3151(e) of this title as determined under section 3151(h) of this title and to pay for employment and training activities provided to adults in the local area, consistent with section 3174 of this title.

(ii) Dislocated workers
Funds allocated under paragraph (2)(B) shall be used by a local area to contribute to the costs of the one-stop delivery system described in section 3151(e) of this title as determined under section 3151(h) of this title and to pay for employment and training activities provided to dislocated workers in the local area, consistent with section 3174 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 paragraph (2)(A) or (3) of subsection (b) or a corresponding provision of the Workforce Investment Act of 1998 for adult employment and training activities, or under subsection (b)(2)(B) or a corresponding provision of the Workforce Investment Act of 1998 for dislocated worker employment and training 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—

(A) for adult employment and training activities is equal to the amount by which the unobligated balance of the local allocation under paragraph (2)(A) or (3) of subsection (b) for such activities, at the end of the program year prior to the program year for which the determination under this subparagraph is made, exceeds 20 percent of such allocation for the prior program year; and

(B) for dislocated worker employment and training activities is equal to the amount by which the unobligated balance of the local allocation under subsection (b)(2)(B) for such activities, at the end of the program year prior to the program year for which the determination under this subparagraph 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—

(A) with respect to such available amounts that were allocated under paragraph (2)(A) or (3) of subsection (b), an amount based on the relative amount of the local allocation under paragraph (2)(A) or (3) of subsection (b), as appropriate, for the program year for which the determination is made, as compared to the total amount of the local allocations under paragraph (2)(A) or (3) of subsection (b), as appropriate, for all eligible local areas in the State for such program year; and

(B) with respect to such available amounts that were allocated under subsection (b)(2)(B), an amount based on the relative amount of the local allocation under subsection (b)(2)(B) for the program year for which the determination is made, as compared to the total amount of the local allocations under subsection (b)(2)(B) 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) with respect to funds allocated through a local allocation for adult employment and training activities, a local area that does not have an amount of such funds available for reallocation under paragraph (2) for the program year for which the determination under paragraph (2) is made; and

(B) with respect to funds allocated through a local allocation for dislocated worker employment and training activities, a local area that does not have an amount of such funds available for reallocation under paragraph (2) for the program year for which the determination under paragraph (2) is made.