LIMITATION ON CERTAIN COSTS.

SEC. 117. LIMITATION ON CERTAIN COSTS. (a) Application of Cost Limitations.— Section 108(a) of the Act (29 U.S.C. 1518(a)) is amended to read as follows: “(a) Except as provided in subparagraph (A) or (B) of section 141(d)(3), funds expended under this Act shall be charged to the appropriate cost categories.”. (b) Cost Categories and Limitations.— Section 108(b) of the Act (29 U.S.C. 1518(b)) is amended to read as follows: “(b) (1) The cost limitations contained in this subsection shall apply separately to the funds allocated for programs under part A of title II, and to the funds allocated for programs under part C of such title. “(2) Funds expended under parts A and C of title II shall be charged to one of the following categories: “(A) Administration. “(B) Training-related and supportive services. “(C) Direct training services. “(3) The Secretary shall, consistent with sections 204(b) and 264(c), define by regulation the cost categories specified in paragraph (2). “(4) Of the funds allocated to a service delivery area for any program year under parts A or C of title II— “(A) not more than 20 percent shall be expended for administration; and “(B) not less than 50 percent shall be expended for direct training services. “(5) Each service delivery area shall ensure that for all services provided to participants through contracts, grants, or other agreements with a service provider, such contract, grant, or agreement shall include appropriate amounts necessary for administration and supportive services. “(6) For purposes of paragraph (4), the term ‘allocated’ means allocated for a program year, as adjusted for reallocations and reallotments under section 109 and for transfers of funds under sections 206, 256, and 266.”. 106 STAT. 1036 (c) Reference to Limitations.— Section 108(c) of the Act (29 U.S.C. 1518(c)) is amended to read as follows: “(c) Funds available under title III shall be expended in accordance with the limitations specified in section 315.”.