H.R. 2651

119th CONGRESS 1st Session

To amend the Workforce Innovation and Opportunity Act to establish a State innovation demonstration authority.

IN THE HOUSE OF REPRESENTATIVES · April 3, 2025 · Sponsor: Mr. Owens · Committee: Committee on Education and Workforce

H.R. 2651
- SEC. 1. Short title
- SEC. 2. State innovation demonstration authority

SEC. 1. Short title

This Act may be cited as the One Door to Work Act.

SEC. 2. State innovation demonstration authority

Section 190 of the Workforce Innovation and Opportunity Act () is amended to read as follows: 29 U.S.C. 3250
- (a) Purpose
  - The purpose of this section is to—
    - authorize States to apply under this section on behalf of the entire State, or on behalf of a local area or a consortium of local areas in the State, to receive the allotments or allocations of the State or the local areas, respectively, for youth workforce investment activities and adult and dislocated worker employment and training activities under this Act, as a consolidated grant for 5 years for the purpose of carrying out a demonstration project to pursue innovative reforms to achieve better outcomes for jobseekers, employers, and taxpayers; and
    - require that rigorous evaluations be conducted to demonstrate if better outcomes and associated innovative reforms were achieved as a result of such demonstration projects.
- (b) General authority
  - (1) Waivers and demonstration grant amounts
    - Notwithstanding any other provision of law, during the demonstration period applicable to a demonstration project approved for a State pursuant to subsection (d)(3), the Secretary shall comply with each of the following:
    - (A) Waivers
      - Subject to paragraph (2), waive for the State as a whole, or for the local area or the consortium of local areas in such State selected by the State to carry out such demonstration project, all the statutory and regulatory requirements of subtitle A and subtitle B.
    - (B) Demonstration grant amounts
      - For each fiscal year applicable to such demonstration period:
        
        (i) In a case of a State approved to carry out a demonstration project under this section on behalf of the State as a whole, distribute as a consolidated sum to the State, for purposes of carrying out the project, the State’s total allotment for such fiscal year under—
        
        subsections (b)(1)(C) and subsection (c) of section 127;
        
        paragraphs (1)(B) and (2)(B) of section 132(b); and
        
        section 132(c).
        
        (ii) In a case of a local area selected by a State to carry out a demonstration project under this section, require the State to—
        
        distribute as a consolidated sum to the local board for such local area, for purposes of carrying out the project, the local area’s allocation for such fiscal year under—
        
        subsections (b) and (c) of section 128; and
        
        subsections (b) and (c) of section 133; or
        
        if the local board of the local area enters into a written agreement with the State for the State to serve as the fiscal agent for the local board during the demonstration project, use the funds described in subclause (I) for purposes of carrying out the project on behalf of the local board.
        
        (iii) In a case of a consortium of local areas selected by a State to carry out a demonstration project under this section, require the State to—
        
        distribute as a consolidated sum to the consortium, for purposes of carrying out the project, the total amount of the allocations for the local areas in such consortium for such fiscal year under—
        
        subsections (b) and (c) of section 128; and
        
        subsections (b) and (c) of section 133; or
        
        if the consortium enters into a written agreement with the State for the State to serve as the fiscal agent for the consortium during the demonstration project, use the funds described in subclause (I) for purposes of carrying out the project on behalf of such consortium.
  - (2) Exceptions
    - (A) In general
      - A State, local area, or consortium of local areas carrying out a demonstration project under this section shall comply with statutory or regulatory requirements of this Act relating to—
        
        (i) performance accountability and reporting, except as otherwise provided in this section;
        
        (ii) the membership of local or State boards in instances where a State carrying out a demonstration project will maintain the use of such boards during the demonstration period; and
        
        (iii) the priority of service described in section 134(c)(3)(E).
    - (B) Applicability of defined terms
      - In carrying out a demonstration project under this section, a State, local area, or consortium of local areas may only use a term defined in section 3 to describe an activity carried out under such demonstration project if the State, local area, or consortium of local areas gives such term the same meaning as such term is given under such section.
  - (3) Authority for third-party evaluation
    - (A) In general
      - Not later than 180 days after the first demonstration project is approved under this section, the Secretary shall contract with a third-party evaluator to conduct a rigorous evaluation of each demonstration project approved under this section. The evaluation shall—
        
        (i) cover the 5-year period of each demonstration project;
        
        (ii) compare the employment and earnings outcomes of participants in activities carried out under the demonstration project to—
        
        the outcomes of similarly situated individuals that do not participate in such activities who are located in such State, local area, or a local area in such consortium; and
        
        the outcomes of participants in activities under this chapter in the State, local area, or a local area in the consortium that was awarded a waiver prior to the award of such waiver;
        
        (iii) conduct a qualitative analysis that identifies any promising practices or innovative strategies that—
        
        would not have been conducted without the waiving of statutory or regulatory provisions through the demonstration project; and
        
        lead to positive employment and earnings outcomes for the participants; and
        
        (iv) compare the outcomes for subclauses (I) and (II) of clause (ii) with respect to the subpopulations described in section 116(d)(2)(B).
    - (B) Report
      - Not later than 2 years after the fifth year of each demonstration project approved under this section, the Secretary shall submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions, the results of the evaluation of such conducted under this paragraph.
- (c) Demonstration period; limitations
  - (1) In general
    - A demonstration project approved under this section for a State, local area, or consortium—
      - shall be carried out for a 5-year demonstration period; and
      - may be renewed for an additional 5-year demonstration period, if the State, local area, or consortium—
        
        (i) for each of the final 3 years of the preceding 5-year demonstration period, meets its expected levels of performance established under subsection (f)(1)(C); and
        
        (ii) on the final year of the preceding 5-year demonstration period, achieves a performance improvement of not less than an average of a 5-percent increase across all of the indicators of performance described in clauses (i) and (ii) of subsection (f)(1)(A), compared with—
        
        the highest level of performance for the corresponding indicators of performance, as described in subsection (f)(1)(B)(i) with respect to such State, for the most recent program year that ended prior to the beginning of the first year of the preceding 5-year demonstration period; or
        
        the alternate baseline level of performance for the corresponding indicators of performance that is agreed upon between the State and the Secretary under subsection (f)(1)(B)(ii).
  - (2) Limitations
    - (A) Demonstration period limitations
      - For each 5-year demonstration period (including renewals of such period) the Secretary may not approve—
        
        (i) more than 8 demonstration projects for States to carry out a demonstration project described in subsection (b)(1)(B)(i); and
        
        (ii) more than 8 demonstration projects for local areas (or consortia of local areas) to carry out a demonstration project described in clause (ii) or (iii) of subsection (b)(1)(B).
    - (B) State limitations
      - No more than 1 demonstration project may be approved under this section per State. For purposes of this subparagraph, a demonstration project described in clause (ii) or (iii) of subsection (b)(1)(B) approved for a local area or a consortium of local areas, respectively, in a State shall be considered a demonstration project approved under this section for the State.
- (d) Application
  - (1) In general
    - To be eligible to carry out a demonstration project under this section, a State shall submit to the Secretary an application at such time and in such manner as the Secretary may reasonably require, and containing the information described in paragraph (2).
  - (2) Content
    - Each application submitted by a State under this subsection shall include the following:
      - A description of the demonstration project to be carried out under this section, including—
        
        (i) whether the project will be carried out—
        
        by the State as a whole;
        
        by a local area, and if so—
        
        an identification of—
        
        such local area;
        
        whether the local board for such local area is the fiscal agent for the project, or whether the local board has entered into a written agreement with the State for the State to serve as the fiscal agent during the project; and
        
        written verification from the local board for such local area that such local board agrees—
        
        to carry out such project; and
        
        to the fiscal agent identified in item (aa)(BB); and
        
        by a consortium of local areas in the State, and if so—
        
        an identification of—
        
        each local area that comprises the consortium; and
        
        the local area that will serve as the fiscal agent for the consortium during the project, or whether the consortium has entered into a written agreement with the State for the State to serve as the fiscal agent; and
        
        written verification from each local board of each local area identified in item (aa)(AA) that such local board agrees—
        
        to carry out such project as a consortium; and
        
        to the fiscal agent for the consortium identified in item (aa)(BB);
        
        (ii) a description of the activities to be carried out under the project; and
        
        (iii) the goals the State, local area, or consortium intends to achieve through such activities, which shall be aligned with the purpose described in subsection (a).
      - A description of the performance outcomes the State, the local area, or consortium expects to achieve for such activities for each year of the demonstration period as described in subsection (f)(1).
      - A description of how the State, local area, or consortium consulted with employers, the State board, and the local boards in the State in determining the activities to carry out under the demonstration project.
      - A description of how the State will make such activities available to jobseekers and employers in each of the local areas in the State or, in a case of a project that will be carried out by a local area or a consortium, a description of how such services will be made available to jobseekers and employers in such local area or each of the local areas in the consortium.
      - A description, if appropriate, of how the State, local area, or consortium will integrate the funds received, and the activities carried out, under the demonstration project under this section with State workforce development programs and other Federal, State, or local workforce, education, or social service programs (including the programs and activities listed in section 103(a)(2), the program of adult education and literacy activities authorized under title II, and the program authorized under title I of the Rehabilitation Act of 1973 ()). 29 U.S.C. 720 et seq.
      - An assurance that the State, local area, or consortium will meet the requirements of this section.
  - (3) Secretarial approval
    - (A) In general
      - Not later than 60 days after the date on which a State submits an application under this subsection, the Secretary shall—
        
        (i) in a case in which the application meets the requirements of this section and is not subject to the limitations described in subsection (c)(2), approve such application and the demonstration project described in such application; or
        
        (ii) provide to the State a written explanation of initial disapproval that meets the requirements of subparagraph (C).
    - (B) Default approval
      - With respect to an application submitted by a State under this subsection that is not subject to the limitations described in subsection (c), if the Secretary fails to approve such application or provide an explanation of initial disapproval for such application as required under subparagraph (A), the application and the demonstration project described in such application shall be deemed approved by the Secretary.
    - (C) Initial disapproval
      - An explanation of initial disapproval provided by the Secretary to a State under subparagraph (A)(ii) shall provide the State—
        
        (i) a detailed explanation of why the application does not meet the requirements of this section; and
        
        (ii) if the State is not subject to the limitations described in subsection (c), an opportunity to revise and resubmit the State’s application under this section.
- (e) State demonstration project requirements
  - A State, local area, or consortium that has been approved to carry out a demonstration project under this section shall meet each of the following requirements:
  - (1) Use of funds
    - Use the funds received pursuant to subsection (b)(1)(B) solely to carry out the activities of the demonstration project to achieve the goals described in subsection (d)(2)(A).
  - (2) Administrative costs limitation
    - Use not more than 10 percent of the funds received pursuant to subsection (b)(1)(B) for a fiscal year for the administrative costs of carrying out the demonstration project.
  - (3) Priority for services
    - Give priority for services under the project to veterans and their eligible spouses in accordance with the requirements of section 4215 of title 38, United States Code, recipients of public assistance, low-income individuals, and individuals who are basic skills deficient.
  - (4) Number of participants
    - Serve a number of participants under the activities of the demonstration project for each year of the demonstration period that—
      - is greater than the number of participants served by such State, local area, or consortium under the programs described in subparagraph (A) of the definition of the term under section 3 for the most recent program year that ended prior to the beginning of the first year of the demonstration period; or core program provision
      - is not less than the number of participants to be served under the activities of the demonstration project that is agreed upon between the State, local area, or consortium, and the Secretary—
        
        (i) prior to the Secretary’s approval of the application submitted under subsection (d); and
        
        (ii) after the Secretary takes into account—
        
        the goals the State, local area, or consortium intends to achieve through the demonstration project; and
        
        the participants the State, local area, or consortium intends to serve under such project; and
        
        (iii) prior to approval of the application submitted under subsection (d).
  - (5) Reporting outcomes
    - Submit, on an annual basis, to the Secretary a report, with respect to such State, local area, or consortium, on—
      - participant outcomes for each indicator of performance described in subsection (f)(1)(A) for the activities carried out under the project; and
      - the applicable requirements of section 116(d)(2), including subparagraphs (B) through (G) and subparagraph (J), as such subparagraphs are applicable to activities under the demonstration project.
  - (6) Compliance with certain existing requirements
    - Comply with the statutory or regulatory requirements listed in subsection (b)(2).
- (f) Performance accountability
  - (1) Establishment of baseline level for performance
    - (A) In general
      - Each State shall describe in the application submitted under subsection (d), for each year of the demonstration period—
        
        (i) with respect to participants who are at least 25 years old, the expected levels of performance for each of the indicators of performance under section 116(b)(2)(A)(i) for the activities carried out under the project under this section, which shall meet the requirements of subparagraph (B); and
        
        (ii) with respect to participants who are at least 16 years old and no older than 24 years old, the expected levels of performance for each of the indicators of performance under section 116(b)(2)(A)(ii) for the activities carried out under the project under this section, which shall meet the requirements of subparagraph (B).
    - (B) 5th year
      - Each of the expected levels of performance established pursuant to subparagraph (A) for each of the indicators of performance for the 5th year of the demonstration period shall be higher than—
        
        (i) the highest level of performance for the corresponding indicator of performance for the programs described in subparagraph (A) of the definition of the term under section 3 for the most recent program year for such State that ended prior to the beginning of the first year of the demonstration period; or core program provisions
        
        (ii) an alternate baseline level of performance that is agreed upon between the State and the Secretary—
        
        prior to the Secretary’s approval of the application submitted under subsection (d); and
        
        after the Secretary takes into account—
        
        the goals the State intends to achieve through the demonstration project; and
        
        the participants the State intends to serve under such project.
    - (C) Agreed level for performance on expected levels of performance
      - Prior to approving an application for a demonstration project submitted by a State, and using the expected levels of performance described in such application, the Secretary shall reach an agreement with such State on the expected levels of performance for each of the indicators of performance. In reaching an agreement on such expected levels of performance, the Secretary and the State may consider the factors described in section 116(b)(3)(A)(v).
  - (2) Sanctions
    - (A) In general
      - The sanctions described in section 116(f)(1)(B) shall apply to a State, local area, or consortium beginning on the 3rd year of the demonstration period for such State, local area, or consortium, except that the levels of performance established under subsection (f)(1)(C) of this section shall be—
        
        (i) deemed to be the State negotiated levels of performance for purposes of this paragraph; and
        
        (ii) adjusted at the end of each program year to reflect the actual characteristics of participants served and the actual economic conditions experienced using a statistical adjustment model similar to the model described in section 116(b)(3)(A)(viii).
    - (B) Ineligibility for renewal
      - A State, local area, or consortium that is subject to such sanctions shall be ineligible to renew its demonstration period under subsection (c).
  - (3) Impact of local or consortium demonstrations on statewide accountability
    - With respect to a State with an approved demonstration project for a local area or consortium of local areas in the State—
      - the performance of such local area or consortium for the programs described in subparagraph (A) of the definition of the term under section 3 shall not be included in the levels of performance for such State for any of such programs for purposes of section 116 for any program year that is applicable to any year of the demonstration period; and core program provision
      - with respect to any local areas of the State that are not part of the demonstration project, the State shall reach a new agreement with the Secretary, for purposes of section 116(b)(3)(A), on levels of performance for such programs for such program years.

H.R. 2651

Table of contents

SEC. 1. Short title

SEC. 2. State innovation demonstration authority