H.R. 8181 — Critical Industry Skills Act

This section amends Workforce Innovation and Opportunity Act (WIOA) statewide reservation requirements to authorize governors to reserve up to an additional 10% of state allotments for youth activities under §127(b)(1)(C)(i), adults under §132(b)(1)(B), and dislocated workers under §132(b)(2)(B) to establish and administer (1) a critical industry skills fund under §134(a)(4) or (2) an industry or sector partnership and career pathways development fund under §134(a)(5), subject to a dollar-for-dollar match using funds reserved for statewide activities, other federal funds, or state funds. It also revises WIOA reallocation of unused youth funds among local areas by (1) designating such amounts as performance-based incentive payments and (2) limiting eligibility for recipients to local areas that have met or exceeded an average of 100% of local youth program performance indicators across all measures for the most recent program year with available data and were not subject to governor corrective action for administrative noncompliance.

This section amends state reservation, within-state allocation, and reallocation requirements under sec. 133 of the Workforce Innovation and Opportunity Act (WIOA). (As background, WIOA provides formula grants to states and local workforce development areas for adult employment and training activities, dislocated worker employment and training activities, and youth workforce activities; governors reserve a portion of state allotments for statewide activities before allocating the balance to local areas using statutory formulas, with unused local funds subject to reallocation.) Specifically, the section (1) revises the reservation for statewide workforce investment activities to reference sec. 128(a)(1) (from sec. 128(a)) and authorizes an additional optional reservation by the governor for a critical industry skills fund and industry or sector partnership and career pathways fund under sec. 128(a)(3); (2) makes conforming changes to the formulas for allocating adult and dislocated worker funds to local areas by excluding amounts reserved under new sec. 133(a)(3); and (3) revises reallocation of unused local funds by designating such funds as performance-based incentive payments and limiting eligibility for receiving local areas to those that (i) obligated at least 90% of their average prior-year allocations (unchanged), (ii) met or exceeded an average of 100% of local performance levels across all indicators for the relevant program (adult or dislocated worker) in the most recent program year with available data, and (iii) were not subject to governor corrective action for noncompliance with uniform administrative requirements; such incentive payments are not subject to one-stop operator and provider selection requirements under sec. 134(c)(1)(B). (Thus, high-performing, compliant local areas may receive additional funds without competitive procurement restrictions to expand services.)

This section revises state requirements for using formula funds reserved for statewide employment and training activities under sec. 134(a) of the Workforce Innovation and Opportunity Act (WIOA). (As background, states must reserve at least 15% of their WIOA adult, dislocated worker, and youth allotments for such activities, including rapid response to layoffs and capacity-building efforts that support local workforce systems, one-stop centers, and employer engagement.) Specifically, it amends sec. 134(a)(1) to make technical corrections and require funds described in sec. 128(a)(3) to establish and administer (1) a critical industry skills fund under new para. (4) or (2) an industry or sector partnership and career pathways development fund under new para. (5). It further amends sec. 134(a)(2)(A) on required statewide rapid response activities to authorize additional assistance to local areas with excess demand for dislocated worker individual training accounts—upon state compliance determinations referencing sec. 414(c) of the American Competitiveness and Workforce Improvement Act of 1998 (29 U.S.C. 3224a(c))—and, if state reserved funds under sec. 133(a)(2) are insufficient, to require Secretary notification and eligibility for national dislocated worker grants under sec. 170. It also amends sec. 134(a)(2)(B) on other required statewide employment and training activities by (1) expanding staff development and training to cover wage/benefit information, opportunities for individuals with barriers to employment and covered veterans, capacity building for boards, and technical assistance for local areas failing performance measures; (2) requiring support for local boards and training providers in performance reporting under sec. 116(d), including data matches using quarterly wage records, National Directory of New Hires data, and other sources; (3) updating statutory references; and (4) expanding employer outreach information to include employer-directed skills development, transitional jobs, apprenticeships and pre-apprenticeships, joint labor-management partnerships, supportive services coordination, updated eligibility references, and State-administered jobseeker programs.

This section directs the Secretary of Labor, not later than four years after enactment, to conduct a study reviewing states' usage of statewide critical industry skills funds established under sec. 134(a)(4) of the Workforce Innovation and Opportunity Act (WIOA). (These funds support state workforce development boards and industry partnerships in addressing skills gaps in critical industries.) The study must identify, for measuring the program's overall effectiveness, (1) targeted industries, (2) occupations for which workers are upskilled, (3) frequency of skills development provided to prospective and incumbent workers, and (4) reported performance outcomes.