[105th Congress Public Law 285]
[From the U.S. Government Printing Office]
<DOC>
[DOCID: f:publ285.105]
COMMUNITY OPPORTUNITIES, ACCOUNTABILITY, AND TRAINING AND EDUCATIONAL
SERVICES ACT OF 1998
Public Law 105-285
105th Congress
An Act
To amend the Head Start Act, the Low-Income Home Energy Assistance Act
of 1981, and the Community Services Block Grant Act to reauthorize and
make improvements to those Acts, to establish demonstration projects
that provide an opportunity for persons with limited means to accumulate
assets, and for other purposes. <<NOTE: Oct. 27, 1998 - [S. 2206]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Community
Opportunities, Accountability, and Training and Educational Services Act
of 1998. Children, youth, and
families. Education. Grants. Housing. Inter-
governmental relations. 42 USC 9801 note.>>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Community Opportunities,
Accountability, and Training and Educational Services Act of 1998'' or
the ``Coats Human Services Reauthorization Act of 1998''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--HEAD START PROGRAMS
Sec. 101. Short title.
Sec. 102. Statement of purpose.
Sec. 103. Definitions.
Sec. 104. Financial assistance for Head Start programs.
Sec. 105. Authorization of appropriations.
Sec. 106. Allotment of funds.
Sec. 107. Designation of Head Start agencies.
Sec. 108. Quality standards.
Sec. 109. Powers and functions of Head Start agencies.
Sec. 110. Head Start transition.
Sec. 111. Submission of plans to Governors.
Sec. 112. Participation in Head Start programs.
Sec. 113. Early Head Start programs for families with infants and
toddlers.
Sec. 114. Technical assistance and training.
Sec. 115. Professional requirements.
Sec. 116. Research and evaluation.
Sec. 117. Reports.
Sec. 118. Repeal of consultation requirement.
Sec. 119. Repeal of Head Start Transition Project Act.
TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM
Sec. 201. Reauthorization.
Sec. 202. Conforming amendments.
TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE
Sec. 301. Short title.
Sec. 302. Authorization.
Sec. 303. Definitions.
Sec. 304. Natural disasters and other emergencies.
Sec. 305. State allotments.
Sec. 306. Administration.
Sec. 307. Payments to States.
Sec. 308. Residential Energy Assistance Challenge option.
Sec. 309. Technical assistance, training, and compliance reviews.
TITLE IV--ASSETS FOR INDEPENDENCE
Sec. 401. Short title.
Sec. 402. Findings.
Sec. 403. Purposes.
Sec. 404. Definitions.
Sec. 405. Applications.
Sec. 406. Demonstration authority; annual grants.
Sec. 407. Reserve Fund.
Sec. 408. Eligibility for participation.
Sec. 409. Selection of individuals to participate.
Sec. 410. Deposits by qualified entities.
Sec. 411. Local control over demonstration projects.
Sec. 412. Annual progress reports.
Sec. 413. Sanctions.
Sec. 414. Evaluations.
Sec. 415. Treatment of funds.
Sec. 416. Authorization of appropriations.
TITLE I-- <<NOTE: Head Start Amendments of 1998.>> HEAD START PROGRAMS
SEC. 101. SHORT TITLE. <<NOTE: 42 USC 9801 note.>>
This title may be cited as the ``Head Start Amendments of 1998''.
SEC. 102. STATEMENT OF PURPOSE.
Section 636 of the Head Start Act (42 U.S.C. 9831) is amended to
read as follows:
``SEC. 636. STATEMENT OF PURPOSE.
``It is the purpose of this subchapter to promote school readiness
by enhancing the social and cognitive development of low-income children
through the provision, to low-income children and their families, of
health, educational, nutritional, social, and other services that are
determined, based on family needs assessments, to be necessary.''.
SEC. 103. DEFINITIONS.
Section 637 of the Head Start Act (42 U.S.C. 9832) is amended--
(1) by redesignating paragraphs (1) and (2) as paragraphs
(16) and (17) and inserting the paragraphs at the end of the
section;
(2) by inserting before paragraph (3) the following:
``(1) The term `child with a disability' means--
``(A) a child with a disability, as defined in
section 602(3) of the Individuals with Disabilities
Education Act; and
``(B) an infant or toddler with a disability, as
defined in section 632(5) of such Act.
``(2) The term `delegate agency' means a public, private
nonprofit, or for-profit organization or agency to which a
grantee has delegated all or part of the responsibility of the
grantee for operating a Head Start program.'';
(3) by striking paragraph (4);
(4) by redesignating paragraph (3) as paragraph (4);
(5) by inserting after paragraph (2) the following:
``(3) The term `family literacy services' means services
that are of sufficient intensity in terms of hours, and of
sufficient duration, to make sustainable changes in a family,
and that integrate all of the following activities:
``(A) Interactive literacy activities between
parents and their children.
``(B) Training for parents regarding how to be the
primary teacher for their children and full partners in
the education of their children.
``(C) Parent literacy training that leads to
economic self-sufficiency.
``(D) An age-appropriate education to prepare
children for success in school and life experiences.'';
(6) in paragraph (6), by adding at the end the following:
``Nothing in this paragraph shall be construed to require an
agency to provide services to a child who has not reached the
age of compulsory school attendance for more than the number of
hours per day permitted by State law (including regulation) for
the provision of services to such a child.'';
(7) by striking paragraph (12) and inserting the following:
``(12) The term `migrant and seasonal Head Start program'
means--
``(A) with respect to services for migrant
farmworkers, a Head Start program that serves families
who are engaged in agricultural labor and who have
changed their residence from one geographic location to
another in the preceding 2-year period; and
``(B) with respect to services for seasonal
farmworkers, a Head Start program that serves families
who are engaged primarily in seasonal agricultural labor
and who have not changed their residence to another
geographic location in the preceding 2-year period.'';
(8) by inserting after paragraph (14) the following:
``(15) The term `scientifically based reading research'--
``(A) means the application of rigorous, systematic,
and objective procedures to obtain valid knowledge
relevant to reading development, reading instruction,
and reading difficulties; and
``(B) shall include research that--
``(i) employs systematic, empirical methods
that draw on observation or experiment;
``(ii) involves rigorous data analyses that
are adequate to test the stated hypotheses and
justify the general conclusions drawn;
``(iii) relies on measurements or
observational methods that provide valid data
across evaluators and observers and across
multiple measurements and observations; and
``(iv) has been accepted by a peer-reviewed
journal or approved by a panel of independent
experts through a comparably rigorous, objective,
and scientific review.''; and
(9) in paragraph (17) (as redesignated in paragraph (1))--
(A) by striking ``Term'' and inserting ``term'';
(B) by striking ``Virgin Islands,'' and inserting
``Virgin Islands of the United States, and the
Commonwealth of the Northern Mariana Islands, but for
fiscal years ending before October 1, 2001 (and fiscal
year 2002, if the legislation described in section
640(a)(2)(B)(iii) has not been enacted before September
30, 2001), also means''; and
(C) by striking ``Palau, and the Commonwealth of the
Northern Mariana Islands.'' and inserting ``and the
Republic of Palau.''.
SEC. 104. FINANCIAL ASSISTANCE FOR HEAD START PROGRAMS.
Section 638(1) of the Head Start Act (42 U.S.C. 9833(1)) is
amended--
(1) by striking ``aid the'' and inserting ``enable the'';
and
(2) by striking the semicolon and inserting ``and attain
school readiness;''.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
Section 639 of the Head Start Act (42 U.S.C. 9834) is amended--
(1) in subsection (a), by striking ``1995 through 1998'' and
inserting ``1999 through 2003''; and
(2) in subsection (b), by striking paragraphs (1) and (2)
and inserting the following:
``(1) for each of fiscal years 1999 through 2003 to carry
out activities authorized under section 642A, not more than
$35,000,000 but not less than the amount that was made available
for such activities for fiscal year 1998;
``(2) not more than $5,000,000 for each of fiscal years 1999
through 2003 to carry out impact studies under section 649(g);
and
``(3) not more than $12,000,000 for fiscal year 1999, and
such sums as may be necessary for each of fiscal years 2000
through 2003, to carry out other research, demonstration, and
evaluation activities, including longitudinal studies, under
section 649.''.
SEC. 106. ALLOTMENT OF FUNDS.
(a) Allotments.--Section 640(a) of the Head Start Act (42 U.S.C.
9835(a)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) by striking ``and migrant'' the first
place it appears and all that follows through
``handicapped children'', and inserting ``Head
Start programs, services for children with
disabilities, and migrant and seasonal Head Start
programs'';
(ii) by striking ``and migrant'' each other
place it appears and inserting ``Head Start
programs and by migrant and seasonal''; and
(iii) by striking ``1994'' and inserting
``1998'';
(B) in subparagraph (B), by striking ``(B)
payments'' and all that follows through ``Virgin Islands
according'' and inserting the following:
``(B) payments, subject to paragraph (7)--
``(i) to Guam, American Samoa, the Commonwealth of
the Northern Mariana Islands, and the Virgin Islands of
the United States;
``(ii) for fiscal years ending before October 1,
2001, to the Federated States of Micronesia, the
Republic of the Marshall Islands, and the Republic of
Palau; and
``(iii) if legislation approving renegotiated
Compacts of Free Association for the jurisdictions
described in clause (ii) has not been enacted before
September 30, 2001, for fiscal year 2002 to those
jurisdictions;
according'';
(C) in subparagraph (C), by striking ``; and'' and
inserting ``, of which not less than $3,000,000 of the
amount appropriated for such fiscal year shall be made
available to carry out activities described in section
648(c)(4);'';
(D) in subparagraph (D), by striking ``related to
the development and implementation of quality
improvement plans under section 641A(d)(2).'' and
inserting ``carried out under paragraph (1), (2), or (3)
of section 641A(d) related to correcting deficiencies
and conducting proceedings to terminate the designation
of Head Start agencies; and'';
(E) by inserting after subparagraph (D) the
following:
``(E) payments for research, demonstration, and evaluation
activities under section 649.''; and
(F) by adding at the end the following: ``No Freely
Associated State may receive financial assistance under
this subchapter after fiscal year 2002.'';
(2) in paragraph (3)--
(A) in subparagraph (A)(i), by striking ``equal''
and all that follows through ``amount;'' and inserting
``equal to the sum of--
``(I) 60 percent of such excess amount for fiscal year 1999,
50 percent of such excess amount for fiscal year 2000, 47.5
percent of such excess amount for fiscal year 2001, 35 percent
of such excess amount for fiscal year 2002, and 25 percent of
such excess amount for fiscal year 2003;'';
(B) in subparagraph (B)--
(i) in clause (ii)--
(I) by striking ``adequate qualified
staff'' and inserting ``adequate numbers
of qualified staff''; and
(II) by inserting ``and children
with disabilities'' before ``, when'';
(ii) in clause (iv), by inserting before the
period the following: ``, and to encourage the
staff to continually improve their skills and
expertise by informing the staff of the
availability of Federal and State incentive and
loan forgiveness programs for professional
development'';
(iii) in clause (v), by inserting ``and
collaboration efforts for such programs'' before
the period;
(iv) in clause (vi), by striking the period
and inserting ``, and are accessible to children
with disabilities and their parents.'';
(v) by redesignating clause (vii) as clause
(viii); and
(vi) by inserting after clause (vi) the
following:
``(vii) Ensuring that such programs have qualified staff
that can promote language skills and literacy growth of children
and that can provide children with a variety of skills that have
been identified, through scientifically based reading research,
as predictive of later reading achievement.'';
(C) in subparagraph (C)--
(i) in clause (i)--
(I) in subclause (I)--
(aa) by striking ``this
subparagraph'' and inserting
``this paragraph'';
(bb) by striking ``of
staff'' and inserting ``of
classroom teachers and other
staff'';
(cc) by striking ``such
staff'' and inserting
``qualified staff, including
recruitment and retention
pursuant to achieving the
requirements set forth in
section 648A(a)''; and
(dd) by adding at the end
the following: ``Preferences in
awarding salary increases, in
excess of cost-of-living
allowances, with such funds
shall be granted to classroom
teachers and staff who obtain
additional training or education
related to their
responsibilities as employees of
a Head Start program.'';
(II) in subclause (II), by striking
``the subparagraph'' and inserting
``this subparagraph''; and
(III) by adding at the end the
following:
``(III) From the remainder of the amount reserved under this
paragraph (after the Secretary carries out subclause (I)), the
Secretary shall carry out any or all of the activities described
in clauses (ii) through (vii), placing the highest priority on
the activities described in clause (ii).'';
(ii) by amending clause (ii) to read as
follows:
``(ii) To train classroom teachers and other staff to meet
the education performance standards described in section
641A(a)(1)(B), through activities--
``(I) to promote children's language and literacy
growth, through techniques identified through
scientifically based reading research;
``(II) to promote the acquisition of the English
language for non-English background children and
families;
``(III) to foster children's school readiness skills
through activities described in section 648A(a)(1); and
``(IV) to provide training necessary to improve the
qualifications of the staff of the Head Start agencies
and to support staff training, child counseling, and
other services necessary to address the problems of
children participating in Head Start programs, including
children from dysfunctional families, children who
experience chronic violence in their communities, and
children who experience substance abuse in their
families.'';
(iii) by striking clause (v); and
(iv) by redesignating clauses (vi) and (vii)
as clauses (v) and (vi), respectively; and
(D) in subparagraph (D)(i)(II), by striking ``and
migrant'' and inserting ``Head Start programs and
migrant and seasonal'';
(3) in paragraph (4)--
(A) in subparagraph (A), by striking ``1981'' and
inserting ``1998'';
(B) by amending subparagraph (B) to read as follows:
``(B) any amount available after all allotments are made
under subparagraph (A) for such fiscal year shall be distributed
proportionately on the basis of the number of children less than
5 years of age from families whose income is below the poverty
line.''; and
(C) by adding at the end the following:
``For purposes of this paragraph, for each fiscal year the Secretary
shall use the most recent data available on the number of children less
than 5 years of age from families whose income is below the poverty
line, as published by the Department of Commerce, unless the Secretary
and the Secretary of Commerce determine that use of the most recent data
available would be inappropriate or unreliable. If the Secretary and the
Secretary of Commerce determine that some or all of the data referred to
in this paragraph are inappropriate or unreliable, the Secretaries shall
issue a report setting forth their reasons in detail.'';
(4) in paragraph (5)--
(A) in subparagraph (A), by striking ``subparagraph
(B)'' and inserting ``subparagraphs (B) and (D)'';
(B) in subparagraph (B), by inserting before the
period the following: ``and to encourage Head Start
agencies to collaborate with entities involved in State
and local planning processes (including the State lead
agency administering the financial assistance received
under the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.) and the entities providing
resource and referral services in the State) in order to
better meet the needs of low-income children and
families'';
(C) in subparagraph (C)--
(i) in clause (i)(I), by inserting ``the
appropriate regional office of the Administration
for Children and Families and'' before
``agencies'';
(ii) in clause (iii), by striking ``and'' at
the end;
(iii) in clause (iv)--
(I) by striking ``education, and
national service activities,'' and
inserting ``education, and community
service activities,'';
(II) by striking ``and activities''
and inserting ``activities''; and
(III) by striking the period and
inserting ``(including coordination of
services with those State officials who
are responsible for administering part C
and section 619 of the Individuals with
Disabilities Education Act (20 U.S.C.
1431-1445, 1419)), and services for
homeless children;''; and
(iv) by adding at the end the following:
``(v) include representatives of the State Head Start
Association and local Head Start agencies in unified planning
regarding early care and education services at both the State
and local levels, including collaborative efforts to plan for
the provision of full-working-day, full calendar year early care
and education services for children; and
``(vi) encourage local Head Start agencies to appoint a
State level representative to represent Head Start agencies
within the State in conducting collaborative efforts described
in subparagraphs (B) and (D), and in clause (v).'';
(D) by redesignating subparagraph (D) as
subparagraph (F); and
(E) by inserting after subparagraph (C) the
following:
``(D) Following the award of collaboration grants described in
subparagraph (B), the Secretary shall provide, from the reserved sums,
supplemental funding for collaboration grants--
``(i) to States that (in consultation with their State Head
Start Associations) develop statewide, regional, or local
unified plans for early childhood education and child care that
include the participation of Head Start agencies; and
``(ii) to States that engage in other innovative
collaborative initiatives, including plans for collaborative
training and professional development initiatives for child
care, early childhood education and Head Start service managers,
providers, and staff.
``(E)(i) The Secretary shall--
``(I) review on an ongoing basis evidence of barriers to
effective collaboration between Head Start programs and other
Federal, State, and local child care and early childhood
education programs and resources;
``(II) develop initiatives, including providing additional
training and technical assistance and making regulatory changes,
in necessary cases, to eliminate barriers to the collaboration;
and
``(III) develop a mechanism to resolve administrative and
programmatic conflicts between programs described in subclause
(I) that would be a barrier to service providers, parents, or
children related to the provision of unified services and the
consolidation of funding for child care services.
``(ii) In the case of a collaborative activity funded under this
subchapter and another provision of law providing for Federal child care
or early childhood education, the use of equipment and nonconsumable
supplies purchased with funds made available under this subchapter or
such provision shall not be restricted to children enrolled or otherwise
participating in the program carried out under that subchapter or
provision, during a period in which the activity is predominantly funded
under this subchapter or such provision.''; and
(5) in paragraph (6)--
(A) by inserting ``(A)'' before ``From'';
(B) by striking ``3 percent'' and all that follows
and inserting the following: ``7.5 percent for fiscal
year 1999, 8 percent for fiscal year 2000, 9 percent for
fiscal year 2001, 10 percent for fiscal year 2002, and
10 percent for fiscal year 2003, of the amount
appropriated pursuant to section 639(a), except as
provided in subparagraph (B).''; and
(C) by adding at the end the following:
``(B)(i) If the Secretary does not submit an interim report on the
preliminary findings of the Early Head Start impact study currently
being conducted by the Secretary (as of the date of enactment of the
Head Start Amendments of 1998) to the appropriate committees by June 1,
2001, the amount of the reserved portion for fiscal year 2002 that
exceeds the reserved portion for fiscal year 2001, if any, shall be used
for quality improvement activities described in section 640(a)(3) and
shall not be used to serve an increased number of eligible children
under section 645A.
``(ii) If the Secretary does not submit a final report on the Early
Head Start impact study to the appropriate committees by June 1, 2002,
or if the Secretary finds in the report that there are substantial
deficiencies in the programs carried out under section 645A, the amount
of the reserved portion for fiscal year 2003 that exceeds the reserved
portion for fiscal year 2002, if any, shall be used for quality
improvement activities described in section 640(a)(3) and shall not be
used to serve an increased number of eligible children under section
645A.
``(iii) In this subparagraph:
``(I) The term `appropriate committees' means the Committee
on Education and the Workforce and the Committee on
Appropriations of the House of Representatives and the Committee
on Labor and Human Resources and the Committee on Appropriations
of the Senate.
``(II) The term `reserved portion', used with respect to a
fiscal year, means the amount required to be used in accordance
with subparagraph (A) for that fiscal year.
``(C)(i) For any fiscal year for which the Secretary determines that
the amount appropriated under section 639(a) is not sufficient to permit
the Secretary to reserve the portion described in subparagraph (A)
without reducing the number of children served by Head Start programs or
adversely affecting the quality of Head Start services, relative to the
number of children served and the quality of the services during the
preceding fiscal year, the Secretary may reduce the percentage of funds
required to be reserved for the portion described in subparagraph (A)
for the fiscal year for which the determination is made, but not below
the percentage required to be so reserved for the preceding fiscal year.
``(ii) For any fiscal year for which the amount appropriated under
section 639(a) is reduced to a level that requires a lower amount to be
made available under this subchapter to Head Start agencies and entities
described in section 645A, relative to the amount made available to the
agencies and entities for the preceding fiscal year, adjusted as
described in paragraph (3)(A)(ii), the Secretary shall proportionately
reduce--
``(I) the amounts made available to the entities for
programs carried out under section 645A; and
``(II) the amounts made available to Head Start agencies for
Head Start programs.''.
(b) Children With Disabilities.--Section 640(d) of the Head Start
Act (42 U.S.C. 9835(d)) is amended--
(1) by striking ``1982'' and inserting ``1999'';
(2) by striking ``(as defined in section 602(a) of the
Individuals with Disabilities Education Act)''; and
(3) by adding at the end the following: ``Such policies and
procedures shall require Head Start agencies to coordinate
programmatic efforts with efforts to implement part C and
section 619 of the Individuals with Disabilities Education Act
(20 U.S.C 1431-1445, 1419).''.
(c) Increased Appropriations.--Section 640(g) of the Head Start Act
(42 U.S.C. 9835(g)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking the semicolon
and inserting ``, and the performance history of the
applicant in providing services under other Federal
programs (other than the program carried out under this
subchapter);'';
(B) in subparagraph (C), by striking the semicolon
and inserting ``, and organizations and public entities
serving children with disabilities;'';
(C) in subparagraph (D), by striking the semicolon
and inserting ``and the extent to which, and manner in
which, the applicant demonstrates the ability to
collaborate and participate with other local community
providers of child care or preschool services to provide
full-working-day full calendar year services;'';
(D) in subparagraph (E), by striking ``program;
and'' and inserting ``program or any other early
childhood program;'';
(E) in subparagraph (F), by striking the period and
inserting a semicolon; and
(F) by adding at the end the following:
``(G) the extent to which the applicant proposes to foster
partnerships with other service providers in a manner that will
enhance the resource capacity of the applicant; and
``(H) the extent to which the applicant, in providing
services, plans to coordinate with the local educational agency
serving the community involved and with schools in which
children participating in a Head Start program operated by such
agency will enroll following such program, regarding such
services and the education services provided by such local
educational agency.''; and
(2) by adding at the end the following:
``(4) Notwithstanding subsection (a)(2), after taking into account
paragraph (1), the Secretary may allocate a portion of the remaining
additional funds under subsection (a)(2)(A) for the purpose of
increasing funds available for activities described in such
subsection.''.
(d) Migrant and Seasonal Head Start Programs.--Section 640(l) (42
U.S.C. 9835(l)) is amended--
(1) by striking ``(l)'' and inserting ``(l)(1)'';
(2) by striking ``migrant Head Start programs'' each place
it appears and inserting ``migrant and seasonal Head Start
programs'';
(3) by striking ``migrant families'' and inserting ``migrant
and seasonal farmworker families''; and
(4) by adding at the end the following:
``(2) For purposes of subsection (a)(2)(A), in determining the need
and demand for migrant and seasonal Head Start programs (and services
provided through such programs), the Secretary shall consult with
appropriate entities, including providers of services for migrant and
seasonal Head Start programs. The Secretary shall, after taking into
consideration the need and demand for migrant and seasonal Head Start
programs (and such services), ensure that there is an adequate level of
such services for eligible children of migrant farmworkers before
approving an increase in the allocation of funds provided under such
subsection for unserved eligible children of seasonal farmworkers. In
serving the eligible children of seasonal farmworkers, the Secretary
shall ensure that services provided by migrant and seasonal Head Start
programs do not duplicate or overlap with other Head Start services
available to eligible children of such farmworkers.
``(3) In carrying out this subchapter, the Secretary shall continue
the administrative arrangement responsible for meeting the needs of
children of migrant and seasonal farmworkers and Indian children and
shall ensure that appropriate funding is provided to meet such needs.''.
(e) Conforming Amendment.--Section 644(f)(2) of the Head Start Act
(42 U.S.C. 9839(f)(2)) is amended by striking ``Except'' and all that
follows through ``financial'' and inserting ``Financial''.
SEC. 107. DESIGNATION OF HEAD START AGENCIES.
Section 641 of the Head Start Act (42 U.S.C. 9836) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting ``or for-profit'' after ``nonprofit''; and
(B) by inserting ``(in consultation with the chief
executive officer of the State involved, if such State
expends non-Federal funds to carry out Head Start
programs)'' after ``Secretary'' the last place it
appears;
(2) in subsection (b), by striking ``area designated by the
Bureau of Indian Affairs as near-reservation'' and inserting
``off-reservation area designated by an appropriate tribal
government in consultation with the Secretary'';
(3) in subsection (c)--
(A) in paragraph (1)--
(i) by inserting ``, in consultation with the
chief executive officer of the State involved if
such State expends non-Federal funds to carry out
Head Start programs,'' after ``shall'';
(ii) by inserting ``or for-profit'' after
``nonprofit''; and
(iii) by striking ``makes a finding'' and all
that follows through the period at the end, and
inserting the following: ``determines that the
agency involved fails to meet program and
financial management requirements, performance
standards described in section 641A(a)(1),
results-based performance measures developed by
the Secretary under section 641A(b), or other
requirements established by the Secretary.'';
(B) in paragraph (2), by inserting ``, in
consultation with the chief executive officer of the
State if such State expends non-Federal funds to carry
out Head Start programs,'' after ``shall''; and
(C) by aligning the margins of paragraphs (2) and
(3) with the margin of paragraph (1);
(4) in subsection (d)--
(A) in the matter preceding paragraph (1), by
inserting after the first sentence the following: ``In
selecting from among qualified applicants for
designation as a Head Start agency, the Secretary shall
give priority to any qualified agency that functioned as
a Head Start delegate agency in the community and
carried out a Head Start program that the Secretary
determines met or exceeded such performance standards
and such results-based performance measures.'';
(B) in paragraph (3), by inserting ``and programs
under part C and section 619 of the Individuals with
Disabilities Education Act (20 U.S.C 1431-1445, 1419)''
after ``(20 U.S.C. 2741 et seq.)'';
(C) in paragraph (4)--
(i) in subparagraph (A), by inserting ``(at
home and in the center involved where
practicable)'' after ``activities'';
(ii) in subparagraph (D)--
(I) in clause (iii), by adding
``or'' at the end;
(II) by striking clause (iv); and
(III) by redesignating clause (v) as
clause (iv);
(iii) in subparagraph (E), by striking ``and
(D)'' and inserting ``, (D), and (E)'';
(iv) by redesignating subparagraphs (D) and
(E) as subparagraphs (E) and (F), respectively;
and
(v) by inserting after subparagraph (C) the
following:
``(D) to offer to parents of participating children
substance abuse counseling (either directly or through
referral to local entities), including information on
drug-exposed infants and fetal alcohol syndrome;'';
(D) by amending paragraph (7) to read as follows:
``(7) the plan of such applicant to meet the needs of non-
English background children and their families, including needs
related to the acquisition of the English language;'';
(E) in paragraph (8)--
(i) by striking the period at the end and
inserting ``; and''; and
(ii) by redesignating such paragraph as
paragraph (9);
(F) by inserting after paragraph (7) the following:
``(8) the plan of such applicant to meet the needs of
children with disabilities;''; and
(G) by adding at the end the following:
``(10) the plan of such applicant to collaborate with other
entities carrying out early childhood education and child care
programs in the community.'';
(5) by striking subsection (e) and inserting the following:
``(e) If no agency in the community receives priority designation
under subsection (c), and there is no qualified applicant in the
community, the Secretary shall designate a qualified agency to carry out
the Head Start program in the community on an interim basis until a
qualified applicant from the community is so designated.''; and
(6) by adding at the end the following:
``(g) If the Secretary determines that a nonprofit agency and a for-
profit agency have submitted applications for designation of equivalent
quality under subsection (d), the Secretary may give priority to the
nonprofit agency. In selecting from among qualified applicants for
designation as a Head Start agency under subsection (d), the Secretary
shall give priority to applicants that have demonstrated capacity in
providing comprehensive early childhood services to children and their
families.''.
SEC. 108. QUALITY STANDARDS.
(a) Quality Standards.--Section 641A(a) of the Head Start Act (42
U.S.C. 9836a(a)) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by
inserting ``, including minimum levels of overall
accomplishment,'' after ``regulation standards'';
(B) in subparagraph (A), by striking ``education,'';
(C) by redesignating subparagraphs (B) through (D)
as subparagraphs (C) through (E), respectively; and
(D) by inserting after subparagraph (A) the
following:
``(B)(i) education performance standards to ensure
the school readiness of children participating in a Head
Start program, on completion of the Head Start program
and prior to entering school; and
``(ii) additional education performance standards to
ensure that the children participating in the program,
at a minimum--
``(I) develop phonemic, print, and numeracy
awareness;
``(II) understand and use language to
communicate for various purposes;
``(III) understand and use increasingly
complex and varied vocabulary;
``(IV) develop and demonstrate an appreciation
of books; and
``(V) in the case of non-English background
children, progress toward acquisition of the
English language.'';
(2) by striking paragraph (2);
(3) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively;
(4) in paragraph (2) (as redesignated in paragraph (3))--
(A) in subparagraph (B)(iii), by striking ``child''
and inserting ``early childhood education and''; and
(B) in subparagraph (C)--
(i) in clause (i)--
(I) by striking ``not later than 1
year after the date of enactment of this
section,''; and
(II) by striking ``section 651(b)''
and all that follows and inserting
``this subsection; and''; and
(ii) in subclause (ii), by striking ``November
2, 1978'' and inserting ``the date of enactment of
the Coats Human Services Reauthorization Act of
1998''; and
(5) in paragraph (3) (as redesignated in paragraph (3)), by
striking ``to an agency (referred to in this subchapter as the
`delegate agency')'' and inserting ``to a delegate agency''.
(b) Performance Measures.--Section 641A(b) of the Head Start Act (42
U.S.C. 9836a(b)) is amended--
(1) in the heading, by inserting ``Results-Based'' before
``Performance'';
(2) in paragraph (1)--
(A) by striking ``Not later than 1 year after the
date of enactment of this section, the'' and inserting
``The'';
(B) by striking ``child'' and inserting ``early
childhood education and'';
(C) by inserting before ``(referred'' the following:
``, and the impact of the services provided through the
programs to children and their families''; and
(D) by striking ``performance measures'' and
inserting ``results-based performance measures''; and
(3) in paragraph (2)--
(A) in the paragraph heading, by striking ``Design''
and inserting ``Characteristics'';
(B) in the matter preceding subparagraph (A), by
striking ``shall be designed--'' and inserting ``shall--
'';
(C) in subparagraph (A), by striking ``to assess''
and inserting ``be used to assess the impact of'';
(D) in subparagraph (B)--
(i) by striking ``to'';
(ii) by striking ``and peer review'' and
inserting ``, peer review, and program
evaluation''; and
(iii) by inserting ``, not later than July 1,
1999'' before the semicolon;
(E) in subparagraph (C), by inserting ``be
developed'' before ``for other''; and
(F) by adding at the end the following: ``The
performance measures shall include the performance
standards described in subsection (a)(1)(B)(ii).'';
(4) in paragraph (3)(A), by striking ``and by region'' and
inserting ``, regionally, and locally''; and
(5) by adding at the end the following:
``(4) Educational performance measures.--Such results-based
performance measures shall include educational performance
measures that ensure that children participating in Head Start
programs--
``(A) know that letters of the alphabet are a
special category of visual graphics that can be
individually named;
``(B) recognize a word as a unit of print;
``(C) identify at least 10 letters of the alphabet;
and
``(D) associate sounds with written words.
``(5) Additional local results-based performance measures.--
In addition to other applicable results-based performance
measures, Head Start agencies may establish local results-based
educational performance measures.''.
(c) Monitoring.--Section 641A(c) of the Head Start Act (42 U.S.C.
9836a(c)) is amended--
(1) in paragraph (1), by inserting ``and results-based
performance measures developed by the Secretary under subsection
(b)'' after ``standards established under this subchapter''; and
(2) in paragraph (2)--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C)--
(i) by inserting ``(including children with
disabilities)'' after ``eligible children''; and
(ii) by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following:
``(D) include as part of the reviews of the
programs, a review and assessment of program
effectiveness, as measured in accordance with the
results-based performance measures developed by the
Secretary pursuant to subsection (b) and with the
performance standards established pursuant to
subparagraphs (A) and (B) of subsection (a)(1); and
``(E) seek information from the communities and the
States involved about the performance of the programs
and the efforts of the Head Start agencies to
collaborate with other entities carrying out early
childhood education and child care programs in the
community.''.
(d) Termination.--Section 641A(d) of the Head Start Act (42 U.S.C.
9836a(d)) is amended--
(1) in paragraph (1)--
(A) by inserting ``or results-based performance
measures developed by the Secretary under subsection
(b)'' after ``subsection (a)''; and
(B) by amending subparagraph (B) to read as follows:
``(B) with respect to each identified deficiency,
require the agency--
``(i) to correct the deficiency immediately,
if the Secretary finds that the deficiency
threatens the health or safety of staff or program
participants or poses a threat to the integrity of
Federal funds;
``(ii) to correct the deficiency not later
than 90 days after the identification of the
deficiency if the Secretary finds, in the
discretion of the Secretary, that such a 90-day
period is reasonable, in light of the nature and
magnitude of the deficiency; or
``(iii) in the discretion of the Secretary
(taking into consideration the seriousness of the
deficiency and the time reasonably required to
correct the deficiency), to comply with the
requirements of paragraph (2) concerning a quality
improvement plan; and''; and
(2) in paragraph (2)(A), in the matter preceding clause (i),
by striking ``able to correct a deficiency immediately'' and
inserting ``required to correct a deficiency immediately or
during a 90-day period under clause (i) or (ii) of paragraph
(1)(B)''.
(e) <<NOTE: Public information. Internet.>> Report.--Section 641A(e)
of the Head Start Act (42 U.S.C. 9836a(e)) is amended by adding at the
end the following: ``Such report shall be widely disseminated and
available for public review in both written and electronic formats.''.
SEC. 109. POWERS AND FUNCTIONS OF HEAD START AGENCIES.
Section 642 of the Head Start Act (42 U.S.C. 9837) is amended--
(1) in subsection (a), by inserting ``or for-profit'' after
``nonprofit'';
(2) in subsection (b)--
(A) in paragraph (6)--
(i) by striking subparagraph (D); and
(ii) by redesignating subparagraphs (E) and
(F) and subparagraphs (D) and (E), respectively;
(B) in paragraph (8), by striking ``and'' at the
end;
(C) in paragraph (9), by striking the period at the
end and inserting ``; and'';
(D) by redesignating paragraphs (6) through (9) as
paragraphs (7) through (10), respectively;
(E) by inserting after paragraph (5) the following:
``(6) offer to parents of participating children substance
abuse counseling (either directly or through referral to local
entities), including information on drug-exposed infants and
fetal alcohol syndrome;'';
(F) in paragraph (8) (as redesignated in
subparagraph (D)), by striking ``paragraphs (4) through
(6)'' and inserting ``paragraphs (4) through (7)''; and
(G) by adding at the end the following:
``(11)(A) inform custodial parents in single-parent families
that participate in programs, activities, or services carried
out or provided under this subchapter about the availability of
child support services for purposes of establishing paternity
and acquiring child support; and
``(B) refer eligible parents to the child support offices of
State and local governments.'';
(3) in subsection (c)--
(A) by inserting ``and collaborate'' after
``coordinate'';
(B) by striking ``section 402(g) of the Social
Security Act, and other'' and inserting ``the State
program carried out under the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9858 et seq.), and
other early childhood education and development''; and
(C) by inserting ``and programs under part C and
section 619 of the Individuals with Disabilities
Education Act (20 U.S.C 1431-1445, 1419)'' after ``(20
U.S.C. 2741 et seq.)'';
(4) in subsection (d)--
(A) in paragraph (1)--
(i) by striking ``carry out'' and all that
follows through ``maintain'' and inserting ``take
steps to ensure, to the maximum extent possible,
that children maintain'';
(ii) by inserting ``and educational'' after
``developmental''; and
(iii) by striking ``to build'' and inserting
``build'';
(B) by striking paragraph (2);
(C) by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively; and
(D) in subparagraph (A) of paragraph (4) (as
redesignated in subparagraph (C)), by striking ``the
Head Start Transition Project Act (42 U.S.C. 9855 et
seq.)'' and inserting ``section 642A''; and
(5) by adding at the end the following:
``(e) Head Start agencies shall adopt, in consultation with experts
in child development and with classroom teachers, an assessment to be
used when hiring or evaluating any classroom teacher in a center-based
Head Start program. Such assessment shall measure whether such teacher
has mastered the functions described in section 648A(a)(1).''.
SEC. 110. HEAD START TRANSITION.
The Head Start Act (42 U.S.C. 9831 et seq.) is amended by inserting
after section 642 the following:
``SEC. 642A. HEAD START TRANSITION. <<NOTE: 42 USC 9837a.>>
``Each Head Start agency shall take steps to coordinate with the
local educational agency serving the community involved and with schools
in which children participating in a Head Start program operated by such
agency will enroll following such program, including--
``(1) developing and implementing a systematic procedure for
transferring, with parental consent, Head Start program records
for each participating child to the school in which such child
will enroll;
``(2) establishing channels of communication between Head
Start staff and their counterparts in the schools (including
teachers, social workers, and health staff) to facilitate
coordination of programs;
``(3) conducting meetings involving parents, kindergarten or
elementary school teachers, and Head Start program teachers to
discuss the educational, developmental, and other needs of
individual children;
``(4) organizing and participating in joint transition-
related training of school staff and Head Start staff;
``(5) developing and implementing a family outreach and
support program in cooperation with entities carrying out
parental involvement efforts under title I of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.);
``(6) assisting families, administrators, and teachers in
enhancing educational and developmental continuity between Head
Start services and elementary school classes; and
``(7) linking the services provided in such Head Start
program with the education services provided by such local
educational agency.''.
SEC. 111. SUBMISSION OF PLANS TO GOVERNORS.
The first sentence of section 643 of the Head Start Act (42 U.S.C.
9838) is amended--
(1) by striking ``30 days'' and inserting ``45 days'';
(2) by striking ``so disapproved'' and inserting
``disapproved (for reasons other than failure of the program to
comply with State health, safety, and child care laws, including
regulations applicable to comparable child care programs in the
State)''; and
(3) by inserting before the period ``, as evidenced by a
written statement of the Secretary's findings that is
transmitted to such officer''.
SEC. 112. PARTICIPATION IN HEAD START PROGRAMS.
(a) Regulations.--Section 645(a)(1) of the Head Start Act (42 U.S.C.
9840(a)(1)) is amended--
(1) by striking ``provide (A) that'' and inserting the
following: ``provide--
``(A) that'';
(2) by striking ``assistance; and (B) pursuant'' and
inserting the following: ``assistance; and
``(B) pursuant'';
(3) in subparagraph (B), by striking ``that programs'' and
inserting ``that--
``(i) programs''; and
(4) by striking ``clause (A).'' and inserting the following:
``subparagraph (A); and
``(ii) a child who has been determined to meet the
low-income criteria and who is participating in a Head
Start program in a program year shall be considered to
continue to meet the low-income criteria through the end
of the succeeding program year.
In determining, for purposes of this paragraph, whether a child who has
applied for enrollment in a Head Start program meets the low-income
criteria, an entity may consider evidence of family income during the 12
months preceding the month in which the application is submitted, or
during the calendar year preceding the calendar year in which the
application is submitted, whichever more accurately reflects the needs
of the family at the time of application.''.
(b) Sliding Fee Scale.--Section 645(b) of the Head Start Act (42
U.S.C. 9840(b)) is amended by adding at the end the following: ``A Head
Start agency that provides a Head Start program with full-working-day
services in collaboration with other agencies or entities may collect a
family copayment to support extended day services if a copayment is
required in conjunction with the collaborative. The copayment charged to
families receiving services through the Head Start program shall not
exceed the copayment charged to families with similar incomes and
circumstances who are receiving the services through participation in a
program carried out by another agency or entity.''.
(c) Continuous Recruitment and Acceptance of Applications.--Section
645(c) of the Head Start Act (42 U.S.C. 9840(c)) is amended by adding at
the end the following: ``Each Head Start program operated in a community
shall be permitted to recruit and accept applications for enrollment of
children throughout the year.''.
(d) Off-Reservation Area.--Section 645(d)(1)(B) of the Head Start
Act (42 U.S.C. 9840(d)(1)(B)) is amended by striking ``a community
with'' and all that follows through ``Indian Affairs'' and inserting ``a
community that is an off-reservation area, designated by an appropriate
tribal government, in consultation with the Secretary''.
SEC. 113. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS AND
TODDLERS.
Section 645A of the Head Start Act (42 U.S.C. 9840a) is amended--
(1) in the section heading, by inserting ``early head
start'' before ``programs for'';
(2) in subsection (a)--
(A) in paragraph (1), by striking ``; and'' and
inserting a period;
(B) by striking paragraph (2); and
(C) by striking ``for--'' and all that follows
through ``(1)'' and inserting ``for'';
(3) in subsection (b)--
(A) in paragraph (5), by inserting ``(including
programs for infants and toddlers with disabilities)''
after ``community'';
(B) in paragraph (7), by striking ``and'' at the
end;
(C) by redesignating paragraph (8) as paragraph (9);
and
(D) by inserting after paragraph (7) the following:
``(8) ensure formal linkages with the agencies and entities
described in section 644(b) of the Individuals with Disabilities
Education Act (20 U.S.C. 1444(b)) and providers of early
intervention services for infants and toddlers with disabilities
under the Individuals with Disabilities Education Act (20 U.S.C.
1400 et seq.); and'';
(4) in subsection (c)--
(A) in the matter preceding paragraph (1), by
striking ``subsection (a)(1)'' and inserting
``subsection (a)''; and
(B) in paragraph (2), by striking ``3 (or under''
and all that follows and inserting ``3;'';
(5) in subsection (d)--
(A) in paragraph (1), by adding ``and'' at the end;
(B) by striking paragraph (2);
(C) by redesignating paragraph (3) as paragraph (2);
and
(D) in paragraph (2), as redesignated in
subparagraph (C), by inserting ``or for-profit'' after
``nonprofit'';
(6) by striking subsection (e);
(7) by redesignating subsections (f) and (g) as subsections
(e) and (f), respectively;
(8) in subsection (e) (as redesignated in paragraph (7))--
(A) in the subsection heading, by striking
``Other''; and
(B) by striking ``From the balance remaining of the
portion specified in section 640(a)(6), after making
grants to the eligible entities specified in subsection
(e),'' and inserting ``From the portion specified in
section 640(a)(6),'';
(9) by striking subsection (h); and
(10) by adding at the end the following:
``(g) Monitoring, Training, Technical Assistance, and Evaluation.--
``(1) Requirement.--In order to ensure the successful
operation of programs assisted under this section, the Secretary
shall use funds from the portion specified in section 640(a)(6)
to monitor the operation of such programs, evaluate their
effectiveness, and provide training and technical assistance
tailored to the particular needs of such programs.
``(2) Training and technical assistance account.--
``(A) In general.--Of the amount made available to
carry out this section for any fiscal year, not less
than 5 percent and not more than 10 percent shall be
reserved to fund a training and technical assistance
account.
``(B) Activities.--Funds in the account may be used
by the Secretary for purposes including--
``(i) making grants to, and entering into
contracts with, organizations with specialized
expertise relating to infants, toddlers, and
families and the capacity needed to provide
direction and support to a national training and
technical assistance system, in order to provide
such direction and support;
``(ii) providing ongoing training and
technical assistance for regional and program
staff charged with monitoring and overseeing the
administration of the program carried out under
this section;
``(iii) providing ongoing training and
technical assistance for existing recipients (as
of the date of such training or assistance) of
grants under subsection (a) and support and
program planning and implementation assistance for
new recipients of such grants; and
``(iv) providing professional development and
personnel enhancement activities, including the
provision of funds to recipients of grants under
subsection (a) for the recruitment and retention
of qualified staff with an appropriate level of
education and experience.''.
SEC. 114. TECHNICAL ASSISTANCE AND TRAINING.
(a) In General.--Section 648 of the Head Start Act (42 U.S.C. 9843)
is amended--
(1) in subsection (b)--
(A) in paragraph (1), by striking ``and'' at the
end;
(B) in paragraph (2), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(3) ensure the provision of technical assistance to assist
Head Start agencies, entities carrying out other child care and
early childhood programs, communities, and States in
collaborative efforts to provide quality full-working-day, full
calendar year services, including technical assistance related
to identifying and assisting in resolving barriers to
collaboration.''; and
(2) in subsection (c)--
(A) by amending paragraph (1) to read as follows:
``(1) give priority consideration to--
``(A) activities to correct program and management
deficiencies identified through reviews carried out
pursuant to section 641A(c) (including the provision of
assistance to local programs in the development of
quality improvement plans under section 641A(d)(2)); and
``(B) assisting Head Start agencies in--
``(i) ensuring the school readiness of
children; and
``(ii) meeting the educational performance
measures described in section 641A(b)(4);'';
(B) in paragraph (2), by inserting ``supplement
amounts provided under section 640(a)(3)(C)(ii) in order
to'' after ``(2)'';
(C) in paragraph (4)--
(i) by inserting ``and implementing'' after
``developing''; and
(ii) by striking ``a longer day'' and
inserting the following: ``the day, and assist the
agencies and programs in expediting the sharing of
information about innovative models for providing
full-working-day, full calendar year services for
children'';
(D) in paragraph (7), by striking ``; and'' and
inserting a semicolon;
(E) in paragraph (8), by striking the period and
inserting ``; and'';
(F) by redesignating paragraphs (3) through (8) as
paragraphs (5) through (10), respectively;
(G) by inserting after paragraph (2) the following:
``(3) assist Head Start agencies in the development of
collaborative initiatives with States and other entities within
the States, to foster effective early childhood professional
development systems;
``(4) provide technical assistance and training, either
directly or through a grant, contract, or cooperative agreement
with an entity that has experience in the development and
operation of successful family literacy services programs, for
the purpose of--
``(A) assisting Head Start agencies providing family
literacy services, in order to improve the quality of
such family literacy services; and
``(B) enabling those Head Start agencies that
demonstrate effective provision of family literacy
services, based on improved outcomes for children and
their parents, to provide technical assistance and
training to other Head Start agencies and to service
providers that work in collaboration with such agencies
to provide family literacy services;''; and
(H) by adding at the end the following:
``(11) provide support for Head Start agencies (including
policy councils and policy committees, as defined in regulation)
that meet the standards described in section 641A(a) but that
have, as documented by the Secretary through reviews conducted
pursuant to section 641A(c), significant programmatic, quality,
and fiscal issues to address.''.
(b) Services.--Section 648(e) of the Head Start Act (42 U.S.C.
9843(e)) is amended by inserting ``(including services to promote the
acquisition of the English language)'' after ``non-English language
background children''.
SEC. 115. PROFESSIONAL REQUIREMENTS.
Section 648A of the Head Start Act (42 U.S.C. 9843a) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Classroom Teachers.--
``(1) Professional requirements.--The Secretary shall ensure
that each Head Start classroom in a center-based program is
assigned one teacher who has demonstrated competency to perform
functions that include--
``(A) planning and implementing learning experiences
that advance the intellectual and physical development
of children, including improving the readiness of
children for school by developing their literacy and
phonemic, print, and numeracy awareness, their
understanding and use of language, their understanding
and use of increasingly complex and varied vocabulary,
their appreciation of books, and their problem solving
abilities;
``(B) establishing and maintaining a safe, healthy
learning environment;
``(C) supporting the social and emotional
development of children; and
``(D) encouraging the involvement of the families of
the children in a Head Start program and supporting the
development of relationships between children and their
families.
``(2) Degree requirements.--
``(A) <<NOTE: Deadline.>> In general.--The Secretary
shall ensure that not later than September 30, 2003, at
least 50 percent of all Head Start teachers nationwide
in center-based programs have--
``(i) an associate, baccalaureate, or advanced
degree in early childhood education; or
``(ii) an associate, baccalaureate, or
advanced degree in a field related to early
childhood education, with experience in teaching
preschool children.
``(B) Progress.--The Secretary shall require Head
Start agencies to demonstrate continuing progress each
year to reach the result described in subparagraph (A).
``(3) Alternative credentialing requirements.--The Secretary
shall ensure that, for center-based programs, each Head Start
classroom that does not have a teacher that meets the
requirements of clause (i) or (ii) of paragraph (2)(A) is
assigned one teacher who has--
``(A) a child development associate credential that
is appropriate to the age of the children being served
in center-based programs;
``(B) a State-awarded certificate for preschool
teachers that meets or exceeds the requirements for a
child development associate credential; or
``(C) a degree in a field related to early childhood
education with experience in teaching preschool children
and a State-awarded certificate to teach in a preschool
program.
``(4) Waiver.--
``(A) In general.--On request, the Secretary shall
grant a 180-day waiver of the requirements of paragraph
(3), for a Head Start agency that can demonstrate that
the agency has unsuccessfully attempted to recruit an
individual who has a credential, certificate, or degree
described in paragraph (3), with respect to an
individual who--
``(i) is enrolled in a program that grants any
such credential, certificate, or degree; and
``(ii) will receive such credential,
certificate, or degree under the terms of such
program not later than 180 days after beginning
employment as a teacher with such agency.
``(B) Limitation.--The Secretary may not grant more
than one such waiver with respect to such individual.'';
and
(2) in subsection (b)(2)(B)--
(A) by striking ``staff,'' and inserting ``staff
or''; and
(B) by striking ``, or that'' and all that follows
through ``families''.
SEC. 116. RESEARCH AND EVALUATION.
Section 649 of the Head Start Act (42 U.S.C. 9844) is amended--
(1) in subsection (d)--
(A) in paragraph (6), by striking ``and'' at the
end;
(B) in paragraph (7), by striking the period at the
end and inserting a semicolon;
(C) by redesignating paragraphs (2) through (7) as
paragraphs (3) through (8), respectively;
(D) by inserting after paragraph (1) the following:
``(2) establish evaluation methods that measure the
effectiveness and impact of family literacy services program
models, including models for the integration of family literacy
services with Head Start services;''; and
(E) by adding at the end the following:
``(9) study the experiences of small, medium, and large
States with Head Start programs in order to permit comparisons
of children participating in the programs with eligible children
who did not participate in the programs, which study--
``(A) may include the use of a data set that existed
prior to the initiation of the study; and
``(B) shall compare the educational achievement,
social adaptation, and health status of the
participating children and the eligible nonparticipating
children; and
``(10) provide for--
``(A) using the Survey of Income and Program
Participation to conduct an analysis of the different
income levels of Head Start participants compared to
comparable persons who did not attend Head Start
programs;
``(B) using the National Longitudinal Survey of
Youth, which began gathering data in 1988 on children
who attended Head Start programs, to examine the wide
range of outcomes measured within the Survey, including
outcomes related to cognitive, socio-emotional,
behavioral, and academic development;
``(C) using the Survey of Program Dynamics, the new
longitudinal survey required by section 414 of the
Social Security Act (42 U.S.C. 614), to begin annual
reporting, through the duration of the Survey, on Head
Start program attendees' academic readiness performance
and improvements;
``(D) ensuring that the Survey of Program Dynamics
is linked with the National Longitudinal Survey of Youth
at least once by the use of a common performance test,
to be determined by the expert panel, for the greater
national usefulness of the National Longitudinal Survey
of Youth database; and
``(E) disseminating the results of the analysis,
examination, reporting, and linkage described in
subparagraphs (A) through (D) to persons conducting
other studies under this subchapter.
The <<NOTE: Reports.>> Secretary shall ensure that an appropriate entity
carries out a study described in paragraph (9), and prepares and submits
to the appropriate committees of Congress a report containing the
results of the study, not later than September 30, 2002.''; and
(2) by adding at the end the following:
``(g) National Head Start Impact Research.--
``(1) Expert panel.--
``(A) In general.--The Secretary shall appoint an
independent panel consisting of experts in program
evaluation and research, education, and early childhood
programs--
``(i) to review, and make recommendations on,
the design and plan for the research (whether
conducted as a single assessment or as a series of
assessments) described in paragraph (2), within 1
year after the date of enactment of the Coats
Human Services Reauthorization Act of 1998;
``(ii) to maintain and advise the Secretary
regarding the progress of the research; and
``(iii) to comment, if the panel so desires,
on the interim and final research reports
submitted under paragraph (7).
``(B) Travel expenses.--The members of the panel
shall not receive compensation for the performance of
services for the panel, but shall be allowed travel
expenses, including per diem in lieu of subsistence, at
rates authorized for employees of agencies under
subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the panel.
Notwithstanding section 1342 of title 31, United States
Code, the Secretary may accept the voluntary and
uncompensated services of members of the panel.
``(2) <<NOTE: Contracts.>> General authority.--After
reviewing the recommendations of the expert panel, the Secretary
shall make a grant to, or enter into a contract or cooperative
agreement with, an organization to conduct independent research
that provides a national analysis of the impact of Head Start
programs. The Secretary shall ensure that the organization shall
have expertise in program evaluation, and research, education,
and early childhood programs.
``(3) Designs and techniques.--The Secretary shall ensure
that the research uses rigorous methodological designs and
techniques (based on the recommendations of the expert panel),
including longitudinal designs, control groups, nationally
recognized standardized measures, and random selection and
assignment, as appropriate. The Secretary may provide that the
research shall be conducted as a single comprehensive assessment
or as a group of coordinated assessments designed to provide,
when taken together, a national analysis of the impact of Head
Start programs.
``(4) Programs.--The Secretary shall ensure that the
research focuses primarily on Head Start programs that operate
in the 50 States, the Commonwealth of Puerto Rico, or the
District of Columbia and that do not specifically target special
populations.
``(5) Analysis.--The Secretary shall ensure that the
organization conducting the research--
``(A)(i) determines if, overall, the Head Start
programs have impacts consistent with their primary goal
of increasing the social competence of children, by
increasing the everyday effectiveness of the children in
dealing with their present environments and future
responsibilities, and increasing their school readiness;
``(ii) considers whether the Head Start programs--
``(I) enhance the growth and development of
children in cognitive, emotional, and physical
health areas;
``(II) strengthen families as the primary
nurturers of their children; and
``(III) ensure that children attain school
readiness; and
``(iii) examines--
``(I) the impact of the Head Start programs on
increasing access of children to such services as
educational, health, and nutritional services, and
linking children and families to needed community
services; and
``(II) how receipt of services described in
subclause (I) enriches the lives of children and
families participating in Head Start programs;
``(B) examines the impact of Head Start programs on
participants on the date the participants leave Head
Start programs, at the end of kindergarten and at the
end of first grade (whether in public or private
school), by examining a variety of factors, including
educational achievement, referrals for special education
or remedial course work, and absenteeism;
``(C) makes use of random selection from the
population of all Head Start programs described in
paragraph (4) in selecting programs for inclusion in the
research; and
``(D) includes comparisons of individuals who
participate in Head Start programs with control groups
(including comparison groups) composed of--
``(i) individuals who participate in other
early childhood programs (such as public or
private preschool programs and day care); and
``(ii) individuals who do not participate in
any other early childhood program.
``(6) Consideration of sources of variation.--In designing
the research, the Secretary shall, to the extent practicable,
consider addressing possible sources of variation in impact of
Head Start programs, including variations in impact related to
such factors as--
``(A) Head Start program operations;
``(B) Head Start program quality;
``(C) the length of time a child attends a Head
Start program;
``(D) the age of the child on entering the Head
Start program;
``(E) the type of organization (such as a local
educational agency or a community action agency)
providing services for the Head Start program;
``(F) the number of hours and days of program
operation of the Head Start program (such as whether the
program is a full-working-day, full calendar year
program, a part-day program, or a part-year program);
and
``(G) other characteristics and features of the Head
Start program (such as geographic location, location in
an urban or a rural service area, or participant
characteristics), as appropriate.
``(7) Reports.--
``(A) Submission of interim reports.--The
organization shall prepare and submit to the Secretary
two interim reports on the research. The first interim
report shall describe the design of the research, and
the rationale for the design, including a description of
how potential sources of variation in impact of Head
Start programs have been considered in designing the
research. The second interim report shall describe the
status of the research and preliminary findings of the
research, as appropriate.
``(B) Submission of final report.--The organization
shall prepare and submit to the Secretary a final report
containing the findings of the research.
``(C) Transmittal of reports to congress.--
``(i) In general.--The Secretary shall
transmit, to the committees described in clause
(ii), the first interim report by September 30,
1999, the second interim report by September 30,
2001, and the final report by September 30, 2003.
``(ii) Committees.--The committees referred to
in clause (i) are the Committee on Education and
the Workforce of the House of Representatives and
the Committee on Labor and Human Resources of the
Senate.
``(8) Definition.--In this subsection, the term `impact',
used with respect to a Head Start program, means a difference in
an outcome for a participant in the program that would not have
occurred without the participation in the program.
``(h) Quality Improvement Study.--
``(1) Study.--The Secretary shall conduct a study regarding
the use and effects of use of the quality improvement funds made
available under section 640(a)(3) since fiscal year 1991.
``(2) <<NOTE: Deadline.>> Report.--The Secretary shall
prepare and submit to Congress not later than September 2000 a
report containing the results of the study, including
information on--
``(A) the types of activities funded with the
quality improvement funds;
``(B) the extent to which the use of the quality
improvement funds has accomplished the goals of section
640(a)(3)(B);
``(C) the effect of use of the quality improvement
funds on teacher training, salaries, benefits,
recruitment, and retention; and
``(D) the effect of use of the quality improvement
funds on the development of children receiving services
under this subchapter.''.
SEC. 117. REPORTS.
Section 650 of the Head Start Act (42 U.S.C. 9846) is amended--
(1) by inserting ``(a) Status of Children.--'' before
``At'';
(2) by striking ``and Labor'' each place it appears and
inserting ``and the Workforce''; and
(3) by adding at the end the following:
``(b) Facilities.--At least once during every 5-year period, the
Secretary shall prepare and submit, to the Committee on Education and
the Workforce of the House of Representatives and the Committee on Labor
and Human Resources of the Senate, a report concerning the condition,
location, and ownership of facilities used, or available to be used, by
Indian Head Start agencies (including Native Alaskan Head Start
agencies) and Native Hawaiian Head Start agencies.''.
SEC. 118. REPEAL OF CONSULTATION REQUIREMENT.
Section 657A of the Head Start Act (42 U.S.C. 9852a) is repealed.
SEC. 119. REPEAL OF HEAD START TRANSITION PROJECT ACT. <<NOTE: 42 USC
9801 note.>>
The Head Start Transition Project Act (42 U.S.C. 9855-9855g) is
repealed.
TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM
SEC. 201. REAUTHORIZATION.
The Community Services Block Grant Act (42 U.S.C. 9901 et seq.) is
amended to read as follows:
``Subtitle B--Community Services <<NOTE: Community Services Block Grant
Act.>> Block Grant Program
``SEC. 671. SHORT TITLE. <<NOTE: 42 USC 9901 note.>>
``This subtitle may be cited as the `Community Services Block Grant
Act'.
``SEC. 672. PURPOSES AND GOALS. <<NOTE: 42 USC 9901.>>
``The purposes of this subtitle are--
``(1) to provide assistance to States and local communities,
working through a network of community action agencies and other
neighborhood-based organizations, for the reduction of poverty,
the revitalization of low-income communities, and the
empowerment of low-income families and individuals in rural and
urban areas to become fully self-sufficient (particularly
families who are attempting to transition off a State program
carried out under part A of title IV of the Social Security Act
(42 U.S.C. 601 et seq.)); and
``(2) to accomplish the goals described in paragraph (1)
through--
``(A) the strengthening of community capabilities
for planning and coordinating the use of a broad range
of Federal, State, local, and other assistance
(including private resources) related to the elimination
of poverty, so that this assistance can be used in a
manner responsive to local needs and conditions;
``(B) the organization of a range of services
related to the needs of low-income families and
individuals, so that these services may have a
measurable and potentially major impact on the causes of
poverty in the community and may help the families and
individuals to achieve self-sufficiency;
``(C) the greater use of innovative and effective
community-based approaches to attacking the causes and
effects of poverty and of community breakdown;
``(D) the maximum participation of residents of the
low-income communities and members of the groups served
by programs assisted through the block grants made under
this subtitle to empower such residents and members to
respond to the unique problems and needs within their
communities; and
``(E) the broadening of the resource base of
programs directed to the elimination of poverty so as to
secure a more active role in the provision of services
for--
``(i) private, religious, charitable, and
neighborhood-based organizations; and
``(ii) individual citizens, and business,
labor, and professional groups, who are able to
influence the quantity and quality of
opportunities and services for the poor.
``SEC. 673. DEFINITIONS. <<NOTE: 42 USC 9902.>>
``In this subtitle:
``(1) Eligible entity; family literacy services.--
``(A) Eligible entity.--The term `eligible entity'
means an entity--
``(i) that is an eligible entity described in
section 673(1) (as in effect on the day before the
date of enactment of the Coats Human Services
Reauthorization Act of 1998) as of the day before
such date of enactment or is designated by the
process described in section 676A (including an
organization serving migrant or seasonal
farmworkers that is so described or designated);
and
``(ii) that has a tripartite board or other
mechanism described in subsection (a) or (b), as
appropriate, of section 676B.
``(B) Family literacy services.--The term `family
literacy services' has the meaning given the term in
section 637 of the Head Start Act (42 U.S.C. 9832).
``(2) Poverty line.--The term `poverty line' means the
official poverty line defined by the Office of Management and
Budget based on the most recent data available from the Bureau
of the Census. The Secretary shall revise annually (or at any
shorter interval the Secretary determines to be feasible and
desirable) the poverty line, which shall be used as a criterion
of eligibility in the community services block grant program
established under this subtitle. The required revision shall be
accomplished by multiplying the official poverty line by the
percentage change in the Consumer Price Index for All Urban
Consumers during the annual or other interval immediately
preceding the time at which the revision is made. Whenever a
State determines that it serves the objectives of the block
grant program established under this subtitle, the State may
revise the poverty line to not to exceed 125 percent of the
official poverty line otherwise applicable under this paragraph.
``(3) Private, nonprofit organization.--The term `private,
nonprofit organization' includes a religious organization, to
which the provisions of section 679 shall apply.
``(4) Secretary.--The term `Secretary' means the Secretary
of Health and Human Services.
``(5) State.--The term `State' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, Guam, the United States Virgin Islands, American Samoa,
and the Commonwealth of the Northern Mariana Islands.
``SEC. 674. AUTHORIZATION OF APPROPRIATIONS. <<NOTE: 42 USC 9903.>>
``(a) In General.--There are authorized to be appropriated such sums
as may be necessary for each of fiscal years 1999 through 2003 to carry
out the provisions of this subtitle (other than sections 681 and 682).
``(b) Reservations.--Of the amounts appropriated under subsection
(a) for each fiscal year, the Secretary shall reserve--
``(1) \1/2\ of 1 percent for carrying out section 675A
(relating to payments for territories);
``(2) 1\1/2\ percent for activities authorized in sections
678A through 678F, of which--
``(A) not less than \1/2\ of the amount reserved by
the Secretary under this paragraph shall be distributed
directly to eligible entities, organizations, or
associations described in section 678A(c)(2) for the
purpose of carrying out activities described in section
678A(c); and
``(B) \1/2\ of the remainder of the amount reserved
by the Secretary under this paragraph shall be used by
the Secretary to carry out evaluation and to assist
States in carrying out corrective action activities and
monitoring (to correct programmatic deficiencies of
eligible entities), as described in sections 678B(c) and
678A; and
``(3) 9 percent for carrying out section 680 (relating to
discretionary activities) and section 678E(b)(2).
``SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM. <<NOTE: 42 USC
9904.>>
``The Secretary is authorized to establish a community services
block grant program and make grants through the program to States to
ameliorate the causes of poverty in communities within the States.
``SEC. 675A. DISTRIBUTION TO TERRITORIES. <<NOTE: 42 USC 9905.>>
``(a) Apportionment.--The Secretary shall apportion the amount
reserved under section 674(b)(1) for each fiscal year on the basis of
need among Guam, American Samoa, the United States Virgin Islands, and
the Commonwealth of the Northern Mariana Islands.
``(b) Application.--Each jurisdiction to which subsection (a)
applies may receive a grant under this section for the amount
apportioned under subsection (a) on submitting to the Secretary, and
obtaining approval of, an application, containing provisions that
describe the programs for which assistance is sought under this section,
that is prepared in accordance with, and contains the information
described in, section 676.
``SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES. <<NOTE: 42 USC 9906.>>
``(a) Allotments in General.--The Secretary shall, from the amount
appropriated under section 674(a) for each fiscal year that remains
after the Secretary makes the reservations required in section 674(b),
allot to each State (subject to section 677) an amount that bears the
same ratio to such remaining amount as the amount received by the State
for fiscal year 1981 under section 221 of the Economic Opportunity Act
of 1964 bore to the total amount received by all States for fiscal year
1981 under such section, except--
``(1) that no State shall receive less than \1/4\ of 1
percent of the amount appropriated under section 674(a) for such
fiscal year; and
``(2) as provided in subsection (b).
``(b) Allotments in Years With Greater Available Funds.--
``(1) Minimum allotments.--Subject to paragraphs (2) and
(3), if the amount appropriated under section 674(a) for a
fiscal year that remains after the Secretary makes the
reservations required in section 674(b) exceeds $345,000,000,
the Secretary shall allot to each State not less than \1/2\ of 1
percent of the amount appropriated under section 674(a) for such
fiscal year.
``(2) Maintenance of fiscal year 1990 levels.--Paragraph (1)
shall not apply with respect to a fiscal year if the amount
allotted under subsection (a) to any State for that year is less
than the amount allotted under section 674(a)(1) (as in effect
on September 30, 1989) to such State for fiscal year 1990.
``(3) Maximum allotments.--The amount allotted under
paragraph (1) to a State for a fiscal year shall be reduced, if
necessary, so that the aggregate amount allotted to such State
under such paragraph and subsection (a) does not exceed 140
percent of the aggregate amount allotted to such State under the
corresponding provisions of this subtitle for the preceding
fiscal year.
``(c) Payments.--The Secretary shall make grants to eligible States
for the allotments described in subsections (a) and (b). The Secretary
shall make payments for the grants in accordance with section 6503(a) of
title 31, United States Code.
``(d) Definition.--In this section, the term `State' does not
include Guam, American Samoa, the United States Virgin Islands, and the
Commonwealth of the Northern Mariana Islands.
``SEC. 675C. USES OF FUNDS. <<NOTE: 42 USC 9907.>>
``(a) Grants to Eligible Entities and Other Organizations.--
``(1) In general.--Not less than 90 percent of the funds
made available to a State under section 675A or 675B shall be
used by the State to make grants for the purposes described in
section 672 to eligible entities.
``(2) Obligational authority.--Funds distributed to eligible
entities through grants made in accordance with paragraph (1)
for a fiscal year shall be available for obligation during that
fiscal year and the succeeding fiscal year, subject to paragraph
(3).
``(3) Recapture and redistribution of unobligated funds.--
``(A) Amount.--Beginning on October 1, 2000, a State
may recapture and redistribute funds distributed to an
eligible entity through a grant made under paragraph (1)
that are unobligated at the end of a fiscal year if such
unobligated funds exceed 20 percent of the amount so
distributed to such eligible entity for such fiscal
year.
``(B) Redistribution.--In redistributing funds
recaptured in accordance with this paragraph, States
shall redistribute such funds to an eligible entity, or
require the original recipient of the funds to
redistribute the funds to a private, nonprofit
organization, located within the community served by the
original recipient of the funds, for activities
consistent with the purposes of this subtitle.
``(b) Statewide Activities.--
``(1) Use of remainder.--If a State uses less than 100
percent of the grant or allotment received under section 675A or
675B to make grants under subsection (a), the State shall use
the remainder of the grant or allotment under section 675A or
675B (subject to paragraph (2)) for activities that may
include--
``(A) providing training and technical assistance to
those entities in need of such training and assistance;
``(B) coordinating State-operated programs and
services, and at the option of the State, locally-
operated programs and services, targeted to low-income
children and families with services provided by eligible
entities and other organizations funded under this
subtitle, including detailing appropriate employees of
State or local agencies to entities funded under this
subtitle, to ensure increased access to services
provided by such State or local agencies;
``(C) supporting statewide coordination and
communication among eligible entities;
``(D) analyzing the distribution of funds made
available under this subtitle within the State to
determine if such funds have been targeted to the areas
of greatest need;
``(E) supporting asset-building programs for low-
income individuals, such as programs supporting
individual development accounts;
``(F) supporting innovative programs and activities
conducted by community action agencies or other
neighborhood-based organizations to eliminate poverty,
promote self-sufficiency, and promote community
revitalization;
``(G) supporting State charity tax credits as
described in subsection (c); and
``(H) supporting other activities, consistent with
the purposes of this subtitle.
``(2) Administrative cap.--No State may spend more than the
greater of $55,000, or 5 percent, of the grant received under
section 675A or State allotment received under section 675B for
administrative expenses, including monitoring activities. Funds
to be spent for such expenses shall be taken from the portion of
the grant under section 675A or State allotment that remains
after the State makes grants to eligible entities under
subsection (a). The cost of activities conducted under paragraph
(1)(A) shall not be considered to be administrative expenses.
The startup cost and cost of administrative activities conducted
under subsection (c) shall be considered to be administrative
expenses.
``(c) Charity Tax Credit.--
``(1) In general.--Subject to paragraph (2), if there is in
effect under State law a charity tax credit, the State may use
for any purpose the amount of the allotment that is available
for expenditure under subsection (b).
``(2) Limit.--The aggregate amount a State may use under
paragraph (1) during a fiscal year shall not exceed 100 percent
of the revenue loss of the State during the fiscal year that is
attributable to the charity tax credit, as determined by the
Secretary of the Treasury without regard to any such revenue
loss occurring before January 1, 1999.
``(3) Definitions and rules.--In this subsection:
``(A) Charity tax credit.--The term `charity tax
credit' means a nonrefundable credit against State
income tax (or, in the case of a State that does not
impose an income tax, a comparable benefit) that is
allowable for contributions, in cash or in kind, to
qualified charities.
``(B) Qualified charity.--
``(i) In general.--The term `qualified
charity' means any organization--
``(I) that is--
``(aa) described in section
501(c)(3) of the Internal
Revenue Code of 1986 and exempt
from tax under section 501(a) of
such Code;
``(bb) an eligible entity;
or
``(cc) a public housing
agency as defined in section
3(b)(6) of the United States
Housing Act of 1937 (42 U.S.C.
1437a(b)(6));
``(II) that is certified by the
appropriate State authority as meeting
the requirements of clauses (iii) and
(iv); and
``(III) if such organization is
otherwise required to file a return
under section 6033 of such Code, that
elects to treat the information required
to be furnished by clause (v) as being
specified in section 6033(b) of such
Code.
``(ii) Certain contributions to collection
organizations treated as contributions to
qualified charity.--
``(I) In general.--A contribution to
a collection organization shall be
treated as a contribution to a qualified
charity if the donor designates in
writing that the contribution is for the
qualified charity.
``(II) Collection organization.--The
term `collection organization' means an
organization described in section
501(c)(3) of such Code and exempt from
tax under section 501(a) of such Code--
``(aa) that solicits and
collects gifts and grants that,
by agreement, are distributed to
qualified charities;
``(bb) that distributes to
qualified charities at least 90
percent of the gifts and grants
the organization receives that
are designated for such
qualified charities; and
``(cc) that meets the
requirements of clause (vi).
``(iii) Charity must primarily assist poor
individuals.--
``(I) In general.--An organization
meets the requirements of this clause
only if the appropriate State authority
reasonably expects that the predominant
activity of such organization will be
the provision of direct services within
the United States to individuals and
families whose annual incomes generally
do not exceed 185 percent of the poverty
line in order to prevent or alleviate
poverty among such individuals and
families.
``(II) No recordkeeping in certain
cases.--An organization shall not be
required to establish or maintain
records with respect to the incomes of
individuals and families for purposes of
subclause (I) if such individuals or
families are members of groups that are
generally recognized as including
substantially only individuals and
families described in subclause (I).
``(III) Food aid and homeless
shelters.--Except as otherwise provided
by the appropriate State authority, for
purposes of subclause (I), services to
individuals in the form of--
``(aa) donations of food or
meals; or
``(bb) temporary shelter to
homeless individuals;
shall be treated as provided to
individuals described in subclause (I)
if the location and provision of such
services are such that the service
provider may reasonably conclude that
the beneficiaries of such services are
predominantly individuals described in
subclause (I).
``(iv) Minimum expense requirement.--
``(I) In general.--An organization
meets the requirements of this clause
only if the appropriate State authority
reasonably expects that the annual
poverty program expenses of such
organization will not be less than 75
percent of the annual aggregate expenses
of such organization.
``(II) Poverty program expense.--For
purposes of subclause (I)--
``(aa) In general.--The term
`poverty program expense' means
any expense in providing direct
services referred to in clause
(iii).
``(bb) Exceptions.--Such
term shall not include any
management or general expense,
any expense for the purpose of
influencing legislation (as
defined in section 4911(d) of
the Internal Revenue Code of
1986), any expense for the
purpose of fundraising, any
expense for a legal service
provided on behalf of any
individual referred to in clause
(iii), any expense for providing
tuition assistance relating to
compulsory school attendance,
and any expense that consists of
a payment to an affiliate of the
organization.
``(v) Reporting requirement.--The information
required to be furnished under this clause about
an organization is--
``(I) the percentages determined by
dividing the following categories of the
organization's expenses for the year by
the total expenses of the organization
for the year: expenses for direct
services, management expenses, general
expenses, fundraising expenses, and
payments to affiliates; and
``(II) the category or categories
(including food, shelter, education,
substance abuse prevention or treatment,
job training, or other) of services that
constitute predominant activities of the
organization.
``(vi) Additional requirements for collection
organizations.--The requirements of this clause
are met if the organization--
``(I) maintains separate accounting
for revenues and expenses; and
``(II) makes available to the public
information on the administrative and
fundraising costs of the organization,
and information as to the organizations
receiving funds from the organization
and the amount of such funds.
``(vii) Special rule for states requiring tax
uniformity.--In the case of a State--
``(I) that has a constitutional
requirement of tax uniformity; and
``(II) that, as of December 31,
1997, imposed a tax on personal income
with--
``(aa) a single flat rate
applicable to all earned and
unearned income (except insofar
as any amount is not taxed
pursuant to tax forgiveness
provisions); and
``(bb) no generally
available exemptions or
deductions to individuals;
the requirement of paragraph (2) shall be treated
as met if the amount of the credit described in
paragraph (2) is limited to a uniform percentage
(but not greater than 25 percent) of State
personal income tax liability (determined without
regard to credits).
``(4) Limitation on use of funds for startup and
administrative activities.--Except to the extent provided in
subsection (b)(2), no part of the aggregate amount a State uses
under paragraph (1) may be used to pay for the cost of the
startup and administrative activities conducted under this
subsection.
``(5) Prohibition on use of funds for legal services or
tuition assistance.--No part of the aggregate amount a State
uses under paragraph (1) may be used to provide legal services
or to provide tuition assistance related to compulsory education
requirements (not including tuition assistance for tutoring,
camps, skills development, or other supplemental services or
training).
``(6) Prohibition on supplanting funds.--No part of the
aggregate amount a State uses under paragraph (1) may be used to
supplant non-Federal funds that would be available, in the
absence of Federal funds, to offset a revenue loss of the State
attributable to a charity tax credit.
``SEC. 676. APPLICATION AND PLAN. <<NOTE: 42 USC 9908.>>
``(a) Designation of Lead Agency.--
``(1) Designation.--The chief executive officer of a State
desiring to receive a grant or allotment under section 675A or
675B shall designate, in an application submitted to the
Secretary under subsection (b), an appropriate State agency that
complies with the requirements of paragraph (2) to act as a lead
agency for purposes of carrying out State activities under this
subtitle.
``(2) Duties.--The lead agency shall--
``(A) develop the State plan to be submitted to the
Secretary under subsection (b);
``(B) in conjunction with the development of the
State plan as required under subsection (b), hold at
least one hearing in the State with sufficient time and
statewide distribution of notice of such hearing, to
provide to the public an opportunity to comment on the
proposed use and distribution of funds to be provided
through the grant or allotment under section 675A or
675B for the period covered by the State plan; and
``(C) conduct reviews of eligible entities under
section 678B.
``(3) Legislative hearing.--In order to be eligible to
receive a grant or allotment under section 675A or 675B, the
State shall hold at least one legislative hearing every 3 years
in conjunction with the development of the State plan.
``(b) State Application and Plan.--Beginning with fiscal year 2000,
to be eligible to receive a grant or allotment under section 675A or
675B, a State shall prepare and submit to the Secretary an application
and State plan covering a period of not less than 1 fiscal year and not
more than 2 fiscal years. The plan shall be submitted not later than 30
days prior to the beginning of the first fiscal year covered by the
plan, and shall contain such information as the Secretary shall require,
including--
``(1) an assurance that funds made available through the
grant or allotment will be used--
``(A) to support activities that are designed to
assist low-income families and individuals, including
families and individuals receiving assistance under part
A of title IV of the Social Security Act (42 U.S.C. 601
et seq.), homeless families and individuals, migrant or
seasonal farmworkers, and elderly low-income individuals
and families, and a description of how such activities
will enable the families and individuals--
``(i) to remove obstacles and solve problems
that block the achievement of self-sufficiency
(including self-sufficiency for families and
individuals who are attempting to transition off a
State program carried out under part A of title IV
of the Social Security Act);
``(ii) to secure and retain meaningful
employment;
``(iii) to attain an adequate education, with
particular attention toward improving literacy
skills of the low-income families in the
communities involved, which may include carrying
out family literacy initiatives;
``(iv) to make better use of available income;
``(v) to obtain and maintain adequate housing
and a suitable living environment;
``(vi) to obtain emergency assistance through
loans, grants, or other means to meet immediate
and urgent family and individual needs; and
``(vii) to achieve greater participation in
the affairs of the communities involved, including
the development of public and private grassroots
partnerships with local law enforcement agencies,
local housing authorities, private foundations,
and other public and private partners to--
``(I) document best practices based
on successful grassroots intervention in
urban areas, to develop methodologies
for widespread replication; and
``(II) strengthen and improve
relationships with local law enforcement
agencies, which may include
participation in activities such as
neighborhood or community policing
efforts;
``(B) to address the needs of youth in low-income
communities through youth development programs that
support the primary role of the family, give priority to
the prevention of youth problems and crime, and promote
increased community coordination and collaboration in
meeting the needs of youth, and support development and
expansion of innovative community-based youth
development programs that have demonstrated success in
preventing or reducing youth crime, such as--
``(i) programs for the establishment of
violence-free zones that would involve youth
development and intervention models (such as
models involving youth mediation, youth mentoring,
life skills training, job creation, and
entrepreneurship programs); and
``(ii) after-school child care programs; and
``(C) to make more effective use of, and to
coordinate with, other programs related to the purposes
of this subtitle (including State welfare reform
efforts);
``(2) a description of how the State intends to use
discretionary funds made available from the remainder of the
grant or allotment described in section 675C(b) in accordance
with this subtitle, including a description of how the State
will support innovative community and neighborhood-based
initiatives related to the purposes of this subtitle;
``(3) information provided by eligible entities in the
State, containing--
``(A) a description of the service delivery system,
for services provided or coordinated with funds made
available through grants made under section 675C(a),
targeted to low-income individuals and families in
communities within the State;
``(B) a description of how linkages will be
developed to fill identified gaps in the services,
through the provision of information, referrals, case
management, and followup consultations;
``(C) a description of how funds made available
through grants made under section 675C(a) will be
coordinated with other public and private resources; and
``(D) a description of how the local entity will use
the funds to support innovative community and
neighborhood-based initiatives related to the purposes
of this subtitle, which may include fatherhood
initiatives and other initiatives with the goal of
strengthening families and encouraging effective
parenting;
``(4) an assurance that eligible entities in the State will
provide, on an emergency basis, for the provision of such
supplies and services, nutritious foods, and related services,
as may be necessary to counteract conditions of starvation and
malnutrition among low-income individuals;
``(5) an assurance that the State and the eligible entities
in the State will coordinate, and establish linkages between,
governmental and other social services programs to assure the
effective delivery of such services to low-income individuals
and to avoid duplication of such services, and a description of
how the State and the eligible entities will coordinate the
provision of employment and training activities, as defined in
section 101 of such Act, in the State and in communities with
entities providing activities through statewide and local
workforce investment systems under the Workforce Investment Act
of 1998;
``(6) an assurance that the State will ensure coordination
between antipoverty programs in each community in the State, and
ensure, where appropriate, that emergency energy crisis
intervention programs under title XXVI (relating to low-income
home energy assistance) are conducted in such community;
``(7) an assurance that the State will permit and cooperate
with Federal investigations undertaken in accordance with
section 678D;
``(8) an assurance that any eligible entity in the State
that received funding in the previous fiscal year through a
community services block grant made under this subtitle will not
have its funding terminated under this subtitle, or reduced
below the proportional share of funding the entity received in
the previous fiscal year unless, after providing notice and an
opportunity for a hearing on the record, the State determines
that cause exists for such termination or such reduction,
subject to review by the Secretary as provided in section
678C(b);
``(9) an assurance that the State and eligible entities in
the State will, to the maximum extent possible, coordinate
programs with and form partnerships with other organizations
serving low-income residents of the communities and members of
the groups served by the State, including religious
organizations, charitable groups, and community organizations;
``(10) an assurance that the State will require each
eligible entity in the State to establish procedures under which
a low-income individual, community organization, or religious
organization, or representative of low-income individuals that
considers its organization, or low-income individuals, to be
inadequately represented on the board (or other mechanism) of
the eligible entity to petition for adequate representation;
``(11) an assurance that the State will secure from each
eligible entity in the State, as a condition to receipt of
funding by the entity through a community services block grant
made under this subtitle for a program, a community action plan
(which shall be submitted to the Secretary, at the request of
the Secretary, with the State plan) that includes a community-
needs assessment for the community served, which may be
coordinated with community-needs assessments conducted for other
programs;
``(12) an assurance that the State and all eligible entities
in the State will, not later than fiscal year 2001, participate
in the Results Oriented Management and Accountability System,
another performance measure system for which the Secretary
facilitated development pursuant to section 678E(b), or an
alternative system for measuring performance and results that
meets the requirements of that section, and a description of
outcome measures to be used to measure eligible entity
performance in promoting self-sufficiency, family stability, and
community revitalization; and
``(13) information describing how the State will carry out
the assurances described in this subsection.
``(c) Funding Termination or Reductions.--For purposes of making a
determination in accordance with subsection (b)(8) with respect to--
``(1) a funding reduction, the term `cause' includes--
``(A) a statewide redistribution of funds provided
through a community services block grant under this
subtitle to respond to--
``(i) the results of the most recently
available census or other appropriate data;
``(ii) the designation of a new eligible
entity; or
``(iii) severe economic dislocation; or
``(B) the failure of an eligible entity to comply
with the terms of an agreement or a State plan, or to
meet a State requirement, as described in section
678C(a); and
``(2) a termination, the term `cause' includes the failure
of an eligible entity to comply with the terms of an agreement
or a State plan, or to meet a State requirement, as described in
section 678C(a).
``(d) Procedures and Information.--The Secretary may prescribe
procedures for the purpose of assessing the effectiveness of eligible
entities in carrying out the purposes of this subtitle.
``(e) Revisions and Inspection.--
``(1) Revisions.--The chief executive officer of each State
may revise any plan prepared under this section and shall submit
the revised plan to the Secretary.
``(2) Public inspection.--Each plan or revised plan prepared
under this section shall be made available for public inspection
within the State in such a manner as will facilitate review of,
and comment on, the plan.
``(f) Transition.--For fiscal year 2000, to be eligible to receive a
grant or allotment under section 675A or 675B, a State shall prepare and
submit to the Secretary an application and State plan in accordance with
the provisions of this subtitle (as in effect on the day before the date
of enactment of the Coats Human Services Reauthorization Act of 1998),
rather than the provisions of subsections (a) through (c) relating to
applications and plans.
``SEC. 676A. <<NOTE: 42 USC 9909.>> DESIGNATION AND REDESIGNATION
OF ELIGIBLE ENTITIES IN UNSERVED
AREAS.
``(a) Qualified Organization In or Near Area.--
``(1) In general.--If any geographic area of a State is not,
or ceases to be, served by an eligible entity under this
subtitle, and if the chief executive officer of the State
decides to serve such area, the chief executive officer may
solicit applications from, and designate as an eligible entity--
``(A) a private nonprofit organization (which may
include an eligible entity) that is geographically
located in the unserved area, that is capable of
providing a broad range of services designed to
eliminate poverty and foster self-sufficiency, and that
meets the requirements of this subtitle; and
``(B) a private nonprofit eligible entity that is
geographically located in an area contiguous to or
within reasonable proximity of the unserved area and
that is already providing related services in the
unserved area.
``(2) Requirement.--In order to serve as the eligible entity
for the area, an entity described in paragraph (1)(B) shall
agree to add additional members to the board of the entity to
ensure adequate representation--
``(A) in each of the three required categories
described in subparagraphs (A), (B), and (C) of section
676B(a)(2), by members that reside in the community
comprised by the unserved area; and
``(B) in the category described in section
676B(a)(2)(B), by members that reside in the
neighborhood to be served.
``(b) Special Consideration.--In designating an eligible entity
under subsection (a), the chief executive officer shall grant the
designation to an organization of demonstrated effectiveness in meeting
the goals and purposes of this subtitle and may give priority, in
granting the designation, to eligible entities that are providing
related services in the unserved area, consistent with the needs
identified by a community-needs assessment.
``(c) No Qualified Organization in or Near Area.--If no private,
nonprofit organization is identified or determined to be qualified under
subsection (a) to serve the unserved area as an eligible entity the
chief executive officer may designate an appropriate political
subdivision of the State to serve as an eligible entity for the area. In
order to serve as the eligible entity for that area, the political
subdivision shall have a board or other mechanism as required in section
676B(b).
``SEC. 676B. TRIPARTITE BOARDS. <<NOTE: 42 USC 9910.>>
``(a) Private Nonprofit Entities.--
``(1) Board.--In order for a private, nonprofit entity to be
considered to be an eligible entity for purposes of section
673(1), the entity shall administer the community services block
grant program through a tripartite board described in paragraph
(2) that fully participates in the development, planning,
implementation, and evaluation of the program to serve low-
income communities.
``(2) Selection and composition of board.--The members of
the board referred to in paragraph (1) shall be selected by the
entity and the board shall be composed so as to assure that--
``(A) \1/3\ of the members of the board are elected
public officials, holding office on the date of
selection, or their representatives, except that if the
number of such elected officials reasonably available
and willing to serve on the board is less than \1/3\ of
the membership of the board, membership on the board of
appointive public officials or their representatives may
be counted in meeting such \1/3\ requirement;
``(B)(i) not fewer than \1/3\ of the members are
persons chosen in accordance with democratic selection
procedures adequate to assure that these members are
representative of low-income individuals and families in
the neighborhood served; and
``(ii) each representative of low-income individuals
and families selected to represent a specific
neighborhood within a community under clause (i) resides
in the neighborhood represented by the member; and
``(C) the remainder of the members are officials or
members of business, industry, labor, religious, law
enforcement, education, or other major groups and
interests in the community served.
``(b) Public Organizations.--In order for a public organization to
be considered to be an eligible entity for purposes of section 673(1),
the entity shall administer the community services block grant program
through--
``(1) a tripartite board, which shall have members selected
by the organization and shall be composed so as to assure that
not fewer than \1/3\ of the members are persons chosen in
accordance with democratic selection procedures adequate to
assure that these members--
``(A) are representative of low-income individuals
and families in the neighborhood served;
``(B) reside in the neighborhood served; and
``(C) are able to participate actively in the
development, planning, implementation, and evaluation of
programs funded under this subtitle; or
``(2) another mechanism specified by the State to assure
decisionmaking and participation by low-income individuals in
the development, planning, implementation, and evaluation of
programs funded under this subtitle.
``SEC. 677. PAYMENTS TO INDIAN TRIBES. <<NOTE: 42 USC 9911.>>
``(a) Reservation.--If, with respect to any State, the Secretary--
``(1) receives a request from the governing body of an
Indian tribe or tribal organization within the State that
assistance under this subtitle be made directly to such tribe or
organization; and
``(2) determines that the members of such tribe or tribal
organization would be better served by means of grants made
directly to provide benefits under this subtitle,
the Secretary shall reserve from amounts that would otherwise be
allotted to such State under section 675B for the fiscal year the amount
determined under subsection (b).
``(b) Determination of Reserved Amount.--The Secretary shall reserve
for the purpose of subsection (a) from amounts that would otherwise be
allotted to such State, not less than 100 percent of an amount that
bears the same ratio to the State allotment for the fiscal year involved
as the population of all eligible Indians for whom a determination has
been made under subsection (a) bears to the population of all
individuals eligible for assistance through a community services block
grant made under this subtitle in such State.
``(c) Awards.--The sums reserved by the Secretary on the basis of a
determination made under subsection (a) shall be made available by grant
to the Indian tribe or tribal organization serving the individuals for
whom such a determination has been made.
``(d) Plan.--In order for an Indian tribe or tribal organization to
be eligible for a grant award for a fiscal year under this section, the
tribe or organization shall submit to the Secretary a plan for such
fiscal year that meets such criteria as the Secretary may prescribe by
regulation.
``(e) Definitions.--In this section:
``(1) Indian tribe; tribal organization.--The terms `Indian
tribe' and `tribal organization' mean a tribe, band, or other
organized group recognized in the State in which the tribe,
band, or group resides, or considered by the Secretary of the
Interior, to be an Indian tribe or an Indian organization for
any purpose.
``(2) Indian.--The term `Indian' means a member of an Indian
tribe or of a tribal organization.
``SEC. 678. OFFICE OF COMMUNITY SERVICES. <<NOTE: 42 USC 9912.>>
``(a) Office.--The <<NOTE: Establishment.>> Secretary shall carry
out the functions of this subtitle through an Office of Community
Services, which shall be established in the Department of Health and
Human Services. The Office shall be headed by a Director.
``(b) Grants, Contracts, and Cooperative Agreements.--The Secretary
shall carry out functions of this subtitle through grants, contracts, or
cooperative agreements.
``SEC. 678A. <<NOTE: 42 USC 9913.>> TRAINING, TECHNICAL
ASSISTANCE, AND OTHER ACTIVITIES.
``(a) Activities.--
``(1) In general.--The Secretary shall use amounts reserved
in section 674(b)(2)--
``(A) for training, technical assistance, planning,
evaluation, and performance measurement, to assist
States in carrying out corrective action activities and
monitoring (to correct programmatic deficiencies of
eligible entities), and for reporting and data
collection activities, related to programs carried out
under this subtitle; and
``(B) to distribute amounts in accordance with
subsection (c).
``(2) Grants, contracts, and cooperative agreements.--The
activities described in paragraph (1)(A) may be carried out by
the Secretary through grants, contracts, or cooperative
agreements with appropriate entities.
``(b) Terms and Technical Assistance Process.--The process for
determining the training and technical assistance to be carried out
under this section shall--
``(1) ensure that the needs of eligible entities and
programs relating to improving program quality (including
quality of financial management practices) are addressed to the
maximum extent feasible; and
``(2) incorporate mechanisms to ensure responsiveness to
local needs, including an ongoing procedure for obtaining input
from the national and State networks of eligible entities.
``(c) Distribution Requirement.--
``(1) In general.--The amounts reserved under section
674(b)(2)(A) for activities to be carried out under this
subsection shall be distributed directly to eligible entities,
organizations, or associations described in paragraph (2) for
the purpose of improving program quality (including quality of
financial management practices), management information and
reporting systems, and measurement of program results, and for
the purpose of ensuring responsiveness to identified local
needs.
``(2) Eligible entities, organizations, or associations.--
Eligible entities, organizations, or associations described in
this paragraph shall be eligible entities, or statewide or local
organizations or associations, with demonstrated expertise in
providing training to individuals and organizations on methods
of effectively addressing the needs of low-income families and
communities.
``SEC. 678B. MONITORING OF ELIGIBLE ENTITIES. <<NOTE: 42 USC 9914.>>
``(a) In General.--In order to determine whether eligible entities
meet the performance goals, administrative standards, financial
management requirements, and other requirements of a State, the State
shall conduct the following reviews of eligible entities:
``(1) A full onsite review of each such entity at least once
during each 3-year period.
``(2) An onsite review of each newly designated entity
immediately after the completion of the first year in which such
entity receives funds through the community services block grant
program.
``(3) Followup reviews including prompt return visits to
eligible entities, and their programs, that fail to meet the
goals, standards, and requirements established by the State.
``(4) Other reviews as appropriate, including reviews of
entities with programs that have had other Federal, State, or
local grants (other than assistance provided under this
subtitle) terminated for cause.
``(b) Requests.--The State may request training and technical
assistance from the Secretary as needed to comply with the requirements
of this section.
``(c) Evaluations by the Secretary.--The Secretary shall conduct in
several States in each fiscal year evaluations (including
investigations) of the use of funds received by the States under this
subtitle in order to evaluate compliance with the provisions of this
subtitle, and especially with respect to compliance with section
676(b). <<NOTE: Reports.>> The Secretary shall submit, to each State
evaluated, a report containing the results of such evaluations, and
recommendations of improvements designed to enhance the benefit and
impact of the activities carried out with such funds for people in need.
On receiving the report, the State shall submit to the Secretary a plan
of action in response to the recommendations contained in the report.
The results of the evaluations shall be submitted annually to the
Chairperson of the Committee on Education and the Workforce of the House
of Representatives and the Chairperson of the Committee on Labor and
Human Resources of the Senate as part of the report submitted by the
Secretary in accordance with section 678E(b)(2).
``SEC. 678C. <<NOTE: 42 USC 9915.>> CORRECTIVE ACTION;
TERMINATION AND REDUCTION OF FUNDING.
``(a) Determination.--If the State determines, on the basis of a
final decision in a review pursuant to section 678B, that an eligible
entity fails to comply with the terms of an agreement, or the State
plan, to provide services under this subtitle or to meet appropriate
standards, goals, and other requirements established by the State
(including performance objectives), the State shall--
``(1) inform the entity of the deficiency to be corrected;
``(2) require the entity to correct the deficiency;
``(3)(A) offer training and technical assistance, if
appropriate, to help correct the deficiency, and prepare and
submit to the Secretary a report describing the training and
technical assistance offered; or
``(B) if the State determines that such training and
technical assistance are not appropriate, prepare and submit to
the Secretary a report stating the reasons for the
determination;
``(4)(A) at the discretion of the State (taking into account
the seriousness of the deficiency and the time reasonably
required to correct the deficiency), allow the entity to develop
and implement, within 60 days after being informed of the
deficiency, a quality improvement plan to correct such
deficiency within a reasonable period of time, as determined by
the State; and
``(B) not later than 30 days after receiving from an
eligible entity a proposed quality improvement plan pursuant to
subparagraph (A), either approve such proposed plan or specify
the reasons why the proposed plan cannot be approved; and
``(5) after providing adequate notice and an opportunity for
a hearing, initiate proceedings to terminate the designation of
or reduce the funding under this subtitle of the eligible entity
unless the entity corrects the deficiency.
``(b) Review.--A determination to terminate the designation or
reduce the funding of an eligible entity is reviewable by the Secretary.
The Secretary shall, upon request, review such a
determination. <<NOTE: Deadline.>> The review shall be completed not
later than 90 days after the Secretary receives from the State all
necessary documentation relating to the determination to terminate the
designation or reduce the funding. If the review is not completed within
90 days, the determination of the State shall become final at the end of
the 90th day.
``(c) Direct Assistance.--Whenever a State violates the assurances
contained in section 676(b)(8) and terminates or reduces the funding of
an eligible entity prior to the completion of the State hearing
described in that section and the Secretary's review as required in
subsection (b), the Secretary is authorized to provide financial
assistance under this subtitle to the eligible entity affected until the
violation is corrected. In such a case, the grant or allotment for the
State under section 675A or 675B for the earliest appropriate fiscal
year shall be reduced by an amount equal to the funds provided under
this subsection to such eligible entity.
``SEC. 678D. FISCAL CONTROLS, AUDITS, AND WITHHOLDING. <<NOTE: 42 USC
9916.>>
``(a) Fiscal Controls, Procedures, Audits, and Inspections.--
``(1) In general.--A State that receives funds under this
subtitle shall--
``(A) establish fiscal control and fund accounting
procedures necessary to assure the proper disbursal of
and accounting for Federal funds paid to the State under
this subtitle, including procedures for monitoring the
funds provided under this subtitle;
``(B) ensure that cost and accounting standards of
the Office of Management and Budget apply to a recipient
of the funds under this subtitle;
``(C) subject to paragraph (2), prepare, at least
every year, an audit of the expenditures of the State of
amounts received under this subtitle and amounts
transferred to carry out the purposes of this subtitle;
and
``(D) make appropriate books, documents, papers, and
records available to the Secretary and the Comptroller
General of the United States, or any of their duly
authorized representatives, for examination, copying, or
mechanical reproduction on or off the premises of the
appropriate entity upon a reasonable request for the
items.
``(2) Audits.--
``(A) In general.--Subject to subparagraph (B), each
audit required by subsection (a)(1)(C) shall be
conducted by an entity independent of any agency
administering activities or services carried out under
this subtitle and shall be conducted in accordance with
generally accepted accounting principles.
``(B) Single audit requirements.--Audits shall be
conducted under this paragraph in the manner and to the
extent provided in chapter 75 of title 31, United States
Code (commonly known as the `Single Audit Act Amendments
of 1996').
``(C) Submission of copies.--Within 30 days after
the completion of each such audit in a State, the chief
executive officer of the State shall submit a copy of
such audit to any eligible entity that was the subject
of the audit at no charge, to the legislature of the
State, and to the Secretary.
``(3) Repayments.--The State shall repay to the United
States amounts found not to have been expended in accordance
with this subtitle or the Secretary may offset such amounts
against any other amount to which the State is or may become
entitled under this subtitle.
``(b) Withholding.--
``(1) In general.--The Secretary shall, after providing
adequate notice and an opportunity for a hearing conducted
within the affected State, withhold funds from any State that
does not utilize the grant or allotment under section 675A or
675B in accordance with the provisions of this subtitle,
including the assurances such State provided under section 676.
``(2) Response to complaints.--The Secretary shall respond
in an expeditious and speedy manner to complaints of a
substantial or serious nature that a State has failed to use
funds in accordance with the provisions of this subtitle,
including the assurances provided by the State under section
676. For purposes of this paragraph, a complaint of a failure to
meet any one of the assurances provided under section 676 that
constitutes disregarding that assurance shall be considered to
be a complaint of a serious nature.
``(3) Investigations.--Whenever the Secretary determines
that there is a pattern of complaints of failures described in
paragraph (2) from any State in any fiscal year, the Secretary
shall conduct an investigation of the use of funds received
under this subtitle by such State in order to ensure compliance
with the provisions of this subtitle.
``SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIREMENTS. <<NOTE: 42 USC
9917.>>
``(a) State Accountability and Reporting Requirements.--
``(1) Performance measurement.--
``(A) In general.--By October 1, 2001, each State
that receives funds under this subtitle shall
participate, and shall ensure that all eligible entities
in the State participate, in a performance measurement
system, which may be a performance measurement system
for which the Secretary facilitated development pursuant
to subsection (b), or an alternative system that the
Secretary is satisfied meets the requirements of
subsection (b).
``(B) Local agencies.--The State may elect to have
local agencies that are subcontractors of the eligible
entities under this subtitle participate in the
performance measurement system. If the State makes that
election, references in this section to eligible
entities shall be considered to include the local
agencies.
``(2) Annual report.--Each State shall annually prepare and
submit to the Secretary a report on the measured performance of
the State and the eligible entities in the State. Prior to the
participation of the State in the performance measurement
system, the State shall include in the report any information
collected by the State relating to such performance. Each State
shall also include in the report an accounting of the
expenditure of funds received by the State through the community
services block grant program, including an accounting of funds
spent on administrative costs by the State and the eligible
entities, and funds spent by eligible entities on the direct
delivery of local services, and shall include information on the
number of and characteristics of clients served under this
subtitle in the State, based on data collected from the eligible
entities. The State shall also include in the report a summary
describing the training and technical assistance offered by the
State under section 678C(a)(3) during the year covered by the
report.
``(b) Secretary's Accountability and Reporting Requirements.--
``(1) Performance measurement.--The Secretary, in
collaboration with the States and with eligible entities
throughout the Nation, shall facilitate the development of one
or more model performance measurement systems, which may be used
by the States and by eligible entities to measure their
performance in carrying out the requirements of this subtitle
and in achieving the goals of their community action plans. The
Secretary shall provide technical assistance, including support
for the enhancement of electronic data systems, to States and to
eligible entities to enhance their capability to collect and
report data for such a system and to aid in their participation
in such a system.
``(2) Reporting requirements.--At the end of each fiscal
year beginning after September 30, 1999, the Secretary shall,
directly or by grant or contract, prepare a report containing--
``(A) a summary of the planned use of funds by each
State, and the eligible entities in the State, under the
community services block grant program, as contained in
each State plan submitted pursuant to section 676;
``(B) a description of how funds were actually spent
by the State and eligible entities in the State,
including a breakdown of funds spent on administrative
costs and on the direct delivery of local services by
eligible entities;
``(C) information on the number of entities eligible
for funds under this subtitle, the number of low-income
persons served under this subtitle, and such demographic
data on the low-income populations served by eligible
entities as is determined by the Secretary to be
feasible;
``(D) a comparison of the planned uses of funds for
each State and the actual uses of the funds;
``(E) a summary of each State's performance results,
and the results for the eligible entities, as collected
and submitted by the States in accordance with
subsection (a)(2); and
``(F) any additional information that the Secretary
considers to be appropriate to carry out this subtitle,
if the Secretary informs the States of the need for such
additional information and allows a reasonable period of
time for the States to collect and provide the
information.
``(3) Submission.--The Secretary shall submit to the
Committee on Education and the Workforce of the House of
Representatives and the Committee on Labor and Human Resources
of the Senate the report described in paragraph (2), and any
comments the Secretary may have with respect to such report. The
report shall include definitions of direct and administrative
costs used by the Department of Health and Human Services for
programs funded under this subtitle.
``(4) Costs.--Of the funds reserved under section 674(b)(3),
not more than $350,000 shall be available to carry out the
reporting requirements contained in paragraph (2).
``SEC. 678F. LIMITATIONS ON USE OF FUNDS. <<NOTE: 42 USC 9918.>>
``(a) Construction of Facilities.--
``(1) Limitations.--Except as provided in paragraph (2),
grants made under this subtitle (other than amounts reserved
under section 674(b)(3)) may not be used by the State, or by any
other person with which the State makes arrangements to carry
out the purposes of this subtitle, for the purchase or
improvement of land, or the purchase, construction, or permanent
improvement (other than low-cost residential weatherization or
other energy-related home repairs) of any building or other
facility.
``(2) Waiver.--The Secretary may waive the limitation
contained in paragraph (1) upon a State request for such a
waiver, if the Secretary finds that the request describes
extraordinary circumstances to justify the purchase of land or
the construction of facilities (or the making of permanent
improvements) and that permitting the waiver will contribute to
the ability of the State to carry out the purposes of this
subtitle.
``(b) Political Activities.--
``(1) Treatment as a state or local agency.--For purposes of
chapter 15 of title 5, United States Code, any entity that
assumes responsibility for planning, developing, and
coordinating activities under this subtitle and receives
assistance under this subtitle shall be deemed to be a State or
local agency. For purposes of paragraphs (1) and (2) of section
1502(a) of such title, any entity receiving assistance under
this subtitle shall be deemed to be a State or local agency.
``(2) Prohibitions.--Programs assisted under this subtitle
shall not be carried on in a manner involving the use of program
funds, the provision of services, or the employment or
assignment of personnel, in a manner supporting or resulting in
the identification of such programs with--
``(A) any partisan or nonpartisan political activity
or any political activity associated with a candidate,
or contending faction or group, in an election for
public or party office;
``(B) any activity to provide voters or prospective
voters with transportation to the polls or similar
assistance in connection with any such election; or
``(C) any voter registration activity.
``(3) Rules and regulations.--The Secretary, after
consultation with the Office of Personnel Management, shall
issue rules and regulations to provide for the enforcement of
this subsection, which shall include provisions for summary
suspension of assistance or other action necessary to permit
enforcement on an emergency basis.
``(c) Nondiscrimination.--
``(1) In general.--No person shall, on the basis of race,
color, national origin, or sex be excluded from participation
in, be denied the benefits of, or be subjected to discrimination
under, any program or activity funded in whole or in part with
funds made available under this subtitle. Any prohibition
against discrimination on the basis of age under the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) or with
respect to an otherwise qualified individual with a disability
as provided in section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794), or title II of the Americans with Disabilities Act
of 1990 (42 U.S.C. 12131 et seq.) shall also apply to any such
program or activity.
``(2) <<NOTE: Notification.>> Action of secretary.--Whenever
the Secretary determines that a State that has received a
payment under this subtitle has failed to comply with paragraph
(1) or an applicable regulation, the Secretary shall notify the
chief executive officer of the State and shall request that the
officer secure compliance. If within a reasonable period of
time, not to exceed 60 days, the chief executive officer fails
or refuses to secure compliance, the Secretary is authorized
to--
``(A) refer the matter to the Attorney General with
a recommendation that an appropriate civil action be
instituted;
``(B) exercise the powers and functions provided by
title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.), the Age Discrimination Act of 1975 (42
U.S.C. 6101 et seq.), section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794), or title II of the
Americans with Disabilities Act of 1990 (42 U.S.C. 12131
et seq.), as may be applicable; or
``(C) take such other action as may be provided by
law.
``(3) Action of attorney general.--When a matter is referred
to the Attorney General pursuant to paragraph (2), or whenever
the Attorney General has reason to believe that the State is
engaged in a pattern or practice of discrimination in violation
of the provisions of this subsection, the Attorney General may
bring a civil action in any appropriate United States district
court for such relief as may be appropriate, including
injunctive relief.
``SEC. 678G. DRUG AND CHILD SUPPORT SERVICES AND REFERRALS. <<NOTE: 42
USC 9919.>>
``(a) Drug Testing and Rehabilitation.--
``(1) In general.--Nothing in this subtitle shall be
construed to prohibit a State from testing participants in
programs, activities, or services carried out or provided under
this subtitle for controlled substances. A State that conducts
such testing shall inform the participants who test positive for
any of such substances about the availability of treatment or
rehabilitation services and refer such participants for
appropriate treatment or rehabilitation services.
``(2) Administrative expenses.--Any funds provided under
this subtitle expended for such testing shall be considered to
be expended for administrative expenses and shall be subject to
the limitation specified in section 675C(b)(2).
``(3) Definition.--In this subsection, the term `controlled
substance' has the meaning given the term in section 102 of the
Controlled Substances Act (21 U.S.C. 802).
``(b) Child Support Services and Referrals.--During each fiscal year
for which an eligible entity receives a grant under section 675C, such
entity shall--
``(1) inform custodial parents in single-parent families
that participate in programs, activities, or services carried
out or provided under this subtitle about the availability of
child support services; and
``(2) refer eligible parents to the child support offices of
State and local governments.
``SEC. 679. OPERATIONAL RULE. <<NOTE: 42 USC 9920.>>
``(a) Religious Organizations Included as Nongovernmental
Providers.--For any program carried out by the Federal Government, or by
a State or local government under this subtitle, the government shall
consider, on the same basis as other nongovernmental organizations,
religious organizations to provide the assistance under the program, so
long as the program is implemented in a manner consistent with the
Establishment Clause of the first amendment to the Constitution. Neither
the Federal Government nor a State or local government receiving funds
under this subtitle shall discriminate against an organization that
provides assistance under, or applies to provide assistance under, this
subtitle, on the basis that the organization has a religious character.
``(b) Religious Character and Independence.--
``(1) In general.--A religious organization that provides
assistance under a program described in subsection (a) shall
retain its religious character and control over the definition,
development, practice, and expression of its religious beliefs.
``(2) Additional safeguards.--Neither the Federal Government
nor a State or local government shall require a religious
organization--
``(A) to alter its form of internal governance,
except (for purposes of administration of the community
services block grant program) as provided in section
676B; or
``(B) to remove religious art, icons, scripture, or
other symbols;
in order to be eligible to provide assistance under a program
described in subsection (a).
``(3) Employment practices.--A religious organization's
exemption provided under section 702 of the Civil Rights Act of
1964 (42 U.S.C. 2000e-1) regarding employment practices shall
not be affected by its participation in, or receipt of funds
from, programs described in subsection (a).
``(c) Limitations on Use of Funds for Certain Purposes.--No funds
provided directly to a religious organization to provide assistance
under any program described in subsection (a) shall be expended for
sectarian worship, instruction, or proselytization.
``(d) Fiscal Accountability.--
``(1) In general.--Except as provided in paragraph (2), any
religious organization providing assistance under any program
described in subsection (a) shall be subject to the same
regulations as other nongovernmental organizations to account in
accord with generally accepted accounting principles for the use
of such funds provided under such program.
``(2) Limited audit.--Such organization shall segregate
government funds provided under such program into a separate
account. Only the government funds shall be subject to audit by
the government.
``(e) Treatment of Eligible Entities and Other Intermediate
Organizations.--If an eligible entity or other organization (referred to
in this subsection as an `intermediate organization'), acting under a
contract, or grant or other agreement, with the Federal Government or a
State or local government, is given the authority under the contract or
agreement to select nongovernmental organizations to provide assistance
under the programs described in subsection (a), the intermediate
organization shall have the same duties under this section as the
government.
``SEC. 680. DISCRETIONARY AUTHORITY OF THE SECRETARY. <<NOTE: 42 USC
9921.>>
``(a) Grants, Contracts, Arrangements, Loans, and Guarantees.--
``(1) In general.--The Secretary shall, from funds reserved
under section 674(b)(3), make grants, loans, or guarantees to
States and public agencies and private, nonprofit organizations,
or enter into contracts or jointly financed cooperative
arrangements with States and public agencies and private,
nonprofit organizations (and for-profit organizations, to the
extent specified in paragraph (2)(E)) for each of the objectives
described in paragraphs (2) through (4).
``(2) Community economic development.--
``(A) Economic development activities.--The
Secretary shall make grants described in paragraph (1)
on a competitive basis to private, nonprofit
organizations that are community development
corporations to provide technical and financial
assistance for economic development activities designed
to address the economic needs of low-income individuals
and families by creating employment and business
development opportunities.
``(B) Consultation.--The Secretary shall exercise
the authority provided under subparagraph (A) after
consultation with other relevant Federal officials.
``(C) Governing boards.--For a community development
corporation to receive funds to carry out this
paragraph, the corporation shall be governed by a board
that shall consist of residents of the community and
business and civic leaders and shall have as a principal
purpose planning, developing, or managing low-income
housing or community development projects.
``(D) Geographic distribution.--In making grants to
carry out this paragraph, the Secretary shall take into
consideration the geographic distribution of funding
among States and the relative proportion of funding
among rural and urban areas.
``(E) Reservation.--Of the amounts made available to
carry out this paragraph, the Secretary may reserve not
more than 1 percent for each fiscal year to make grants
to private, nonprofit organizations or to enter into
contracts with private, nonprofit or for-profit
organizations to provide technical assistance to aid
community development corporations in developing or
implementing activities funded to carry out this
paragraph and to evaluate activities funded to carry out
this paragraph.
``(3) Rural community development activities.--The Secretary
shall provide the assistance described in paragraph (1) for
rural community development activities, which shall include
providing--
``(A) grants to private, nonprofit corporations to
enable the corporations to provide assistance concerning
home repair to rural low-income families and concerning
planning and developing low-income rural rental housing
units; and
``(B) grants to multistate, regional, private,
nonprofit organizations to enable the organizations to
provide training and technical assistance to small,
rural communities concerning meeting their community
facility needs.
``(4) Neighborhood innovation projects.--The Secretary shall
provide the assistance described in paragraph (1) for
neighborhood innovation projects, which shall include providing
grants to neighborhood-based private, nonprofit organizations to
test or assist in the development of new approaches or methods
that will aid in overcoming special problems identified by
communities or neighborhoods or otherwise assist in furthering
the purposes of this subtitle, and which may include providing
assistance for projects that are designed to serve low-income
individuals and families who are not being effectively served by
other programs.
``(b) Evaluation.--The Secretary shall require all activities
receiving assistance under this section to be evaluated for their
effectiveness. Funding for such evaluations shall be provided as a
stated percentage of the assistance or through a separate grant awarded
by the Secretary specifically for the purpose of evaluation of a
particular activity or group of activities.
``(c) <<NOTE: Records.>> Annual Report.--The Secretary shall compile
an annual report containing a summary of the evaluations required in
subsection (b) and a listing of all activities assisted under this
section. The Secretary shall annually submit the report to the
Chairperson of the Committee on Education and the Workforce of the House
of Representatives and the Chairperson of the Committee on Labor and
Human Resources of the Senate.
``SEC. 681. COMMUNITY FOOD AND NUTRITION PROGRAMS. <<NOTE: 42 USC
9922.>>
``(a) Grants.--The Secretary may, through grants to public and
private, nonprofit agencies, provide for community-based, local,
statewide, and national programs--
``(1) to coordinate private and public food assistance
resources, wherever the grant recipient involved determines such
coordination to be inadequate, to better serve low-income
populations;
``(2) to assist low-income communities to identify potential
sponsors of child nutrition programs and to initiate such
programs in underserved or unserved areas; and
``(3) to develop innovative approaches at the State and
local level to meet the nutrition needs of low-income
individuals.
``(b) Allotments and Distribution of Funds.--
``(1) Not to exceed $6,000,000 in appropriations.--Of the
amount appropriated for a fiscal year to carry out this section
(but not to exceed $6,000,000), the Secretary shall distribute
funds for grants under subsection (a) as follows:
``(A) Allotments.--From a portion equal to 60
percent of such amount (but not to exceed $3,600,000),
the Secretary shall allot for grants to eligible
agencies for statewide programs in each State the amount
that bears the same ratio to such portion as the low-
income and unemployed population of such State bears to
the low-income and unemployed population of all the
States.
``(B) Competitive grants.--From a portion equal to
40 percent of such amount (but not to exceed
$2,400,000), the Secretary shall make grants on a
competitive basis to eligible agencies for local and
statewide programs.
``(2) Greater available appropriations.--Any amounts
appropriated for a fiscal year to carry out this section in
excess of $6,000,000 shall be allotted as follows:
``(A) Allotments.--The Secretary shall use 40
percent of such excess to allot for grants under
subsection (a) to eligible agencies for statewide
programs in each State an amount that bears the same
ratio to 40 percent of such excess as the low-income and
unemployed population of such State bears to the low-
income and unemployed population of all the States.
``(B) Competitive grants for local and statewide
programs.--The Secretary shall use 40 percent of such
excess to make grants under subsection (a) on a
competitive basis to eligible agencies for local and
statewide programs.
``(C) Competitive grants for nationwide programs.--
The Secretary shall use the remaining 20 percent of such
excess to make grants under subsection (a) on a
competitive basis to eligible agencies for nationwide
programs, including programs benefiting Indians, as
defined in section 677, and migrant or seasonal
farmworkers.
``(3) Eligibility for allotments for statewide programs.--To
be eligible to receive an allotment under paragraph (1)(A) or
(2)(A), an eligible agency shall demonstrate that the proposed
program is statewide in scope and represents a comprehensive and
coordinated effort to alleviate hunger within the State.
``(4) Minimum allotments for statewide programs.--
``(A) In general.--From the amounts allotted under
paragraphs (1)(A) and (2)(A), the minimum total
allotment for each State for each fiscal year shall be--
``(i) $15,000 if the total amount appropriated
to carry out this section is not less than
$7,000,000 but less than $10,000,000;
``(ii) $20,000 if the total amount
appropriated to carry out this section is not less
than $10,000,000 but less than $15,000,000; or
``(iii) $30,000 if the total amount
appropriated to carry out this section is not less
than $15,000,000.
``(B) Definition.--In this paragraph, the term
`State' does not include Guam, American Samoa, the
United States Virgin Islands, and the Commonwealth of
the Northern Mariana Islands.
``(5) Maximum grants.--From funds made available under
paragraphs (1)(B) and (2)(B) for any fiscal year, the Secretary
may not make grants under subsection (a) to an eligible agency
in an aggregate amount exceeding $50,000. From funds made
available under paragraph (2)(C) for any fiscal year, the
Secretary may not make grants under subsection (a) to an
eligible agency in an aggregate amount exceeding $300,000.
``(c) Report.--For each fiscal year, the Secretary shall prepare and
submit, to the Committee on Education and the Workforce of the House of
Representatives and the Committee on Labor and Human Resources of the
Senate, a report concerning the grants made under this section. Such
report shall include--
`` <<NOTE: Records.>> (1) a list of grant recipients;
``(2) information on the amount of funding awarded to each
grant recipient; and
``(3) a summary of the activities performed by the grant
recipients with funding awarded under this section and a
description of the manner in which such activities meet the
objectives described in subsection (a).
``(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary for
each of fiscal years 1999 through 2003.
``SEC. 682. <<NOTE: 42 USC 9923.>> NATIONAL OR REGIONAL PROGRAMS
DESIGNED TO PROVIDEINSTRUCTIONAL
ACTIVITIES FOR LOW-INCOME YOUTH.
``(a) General Authority.--The Secretary is authorized to make a
grant to an eligible service provider to administer national or regional
programs to provide instructional activities for low-income youth. In
making such a grant, the Secretary shall give priority to eligible
service providers that have a demonstrated ability to operate such a
program.
``(b) Program Requirements.--Any instructional activity carried out
by an eligible service provider receiving a grant under this section
shall be carried out on the campus of an institution of higher education
(as defined in section 1201(a) of the Higher Education Act of 1965 (20
U.S.C. 1141(a))) and shall include--
``(1) access to the facilities and resources of such an
institution;
``(2) an initial medical examination and follow-up referral
or treatment, without charge, for youth during their
participation in such activity;
``(3) at least one nutritious meal daily, without charge,
for participating youth during each day of participation;
``(4) high quality instruction in a variety of sports (that
shall include swimming and that may include dance and any other
high quality recreational activity) provided by coaches and
teachers from institutions of higher education and from
elementary and secondary schools (as defined in section 14101 of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801)); and
``(5) enrichment instruction and information on matters
relating to the well-being of youth, to include educational
opportunities and information on study practices, education for
the prevention of drug and alcohol abuse, and information on
health and nutrition, career opportunities, and family and job
responsibilities.
``(c) Advisory Committee; Partnerships.--The eligible service
provider shall, in each community in which a program is funded under
this section--
``(1) ensure that--
``(A) a community-based advisory committee is
established, with representatives from local youth,
family, and social service organizations, schools,
entities providing park and recreation services, and
other community-based organizations serving high-risk
youth; or
``(B) an existing community-based advisory board,
commission, or committee with similar membership is
utilized to serve as the committee described in
subparagraph (A); and
``(2) enter into formal partnerships with youth-serving
organizations or other appropriate social service entities in
order to link program participants with year-round services in
their home communities that support and continue the objectives
of this subtitle.
``(d) Eligible Providers.--A service provider that is a national
private, nonprofit organization, a coalition of such organizations, or a
private, nonprofit organization applying jointly with a business concern
shall be eligible to apply for a grant under this section if--
``(1) the applicant has demonstrated experience in operating
a program providing instruction to low-income youth;
``(2) the applicant agrees to contribute an amount (in cash
or in kind, fairly evaluated) of not less than 25 percent of the
amount requested, for the program funded through the grant;
``(3) the applicant agrees to use no funds from a grant
authorized under this section for administrative expenses; and
``(4) the applicant agrees to comply with the regulations or
program guidelines promulgated by the Secretary for use of funds
made available through the grant.
``(e) Application Process.--To be eligible to receive a grant under
this section, a service provider shall submit to the Secretary, for
approval, an application at such time, in such manner, and containing
such information as the Secretary may require.
``(f) Promulgation of Regulations or Program Guidelines.--The
Secretary shall promulgate regulations or program guidelines to ensure
funds made available through a grant made under this section are used in
accordance with the objectives of this subtitle.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated $15,000,000 for each of fiscal years 1999 through 2003 for
grants to carry out this section.
``SEC. 683. REFERENCES. <<NOTE: 42 USC 9924.>>
``Any reference in any provision of law to the poverty line set
forth in section 624 or 625 of the Economic Opportunity Act of 1964
shall be construed to be a reference to the poverty line defined in
section 673. Except as otherwise provided, any reference in any
provision of law to any community action agency designated under title
II of the Economic Opportunity Act of 1964 shall be construed to be a
reference to an entity eligible to receive funds under the community
services block grant program.''.
SEC. 202. CONFORMING AMENDMENTS.
(a) Older Americans Act of 1965.--Section 306(a)(6)(E)(ii) of the
Older Americans Act of 1965 (42 U.S.C. 3026(a)(6)(E)(ii)) is amended by
striking ``section 675(c)(3) of the Community Services Block Grant Act
(42 U.S.C. 9904(c)(3))'' and inserting ``section 676B of the Community
Services Block Grant Act''.
(b) Community Economic Development Act of 1981.--
(1) Source of funds.--Section 614 of the Community Economic
Development Act of 1981 (42 U.S.C. 9803) is repealed.
(2) Advisory community investment board.--Section 615(a)(2)
of the Community Economic Development Act of 1981 (42 U.S.C.
9804(a)(2)) is amended by striking ``through the Office'' and
all that follows and inserting ``through an appropriate
office.''.
(c) Human Services Reauthorization Act of 1986.--Section 407 of the
Human Services Reauthorization Act of 1986 (42 U.S.C. 9812a) is
amended--
(1) in subsection (a)--
(A) by inserting after ``funds available'' the
following: ``(before the date of enactment of the Coats
Human Services Reauthorization Act of 1998)''; and
(B) by inserting after ``9910(a))'' the following:
``(as in effect before such date)''; and
(2) in subsection (b)(2)--
(A) by inserting after ``funds available'' the
following: ``(before the date of enactment of the Coats
Human Services Reauthorization Act of 1998)''; and
(B) by inserting after ``9910(a))'' the following:
``(as in effect before such date)''.
(d) Anti-Drug Abuse Act of 1988.--Section 3521(c)(2) of the Anti-
Drug Abuse Act of 1988 (42 U.S.C. 11841(c)(2)) is amended by striking
``, such as activities authorized by section 681(a)(2)(F) of the
Community Services Block Grant Act (42 U.S.C. section 9910(a)(2)(F)),''.
TITLE III-- <<NOTE: Low-Income Home Energy Assistance Amendments of
1998.>> LOW-INCOME HOME ENERGY ASSISTANCE
SEC. 301. SHORT TITLE. <<NOTE: 42 USC 8621 note.>>
This title may be cited as the ``Low-Income Home Energy Assistance
Amendments of 1998''.
SEC. 302. AUTHORIZATION.
(a) In General.--Section 2602(b) of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended by inserting ``,
such sums as may be necessary for each of fiscal years 2000 and 2001,
and $2,000,000,000 for each of fiscal years 2002 through 2004'' after
``1995 through 1999''.
(b) Program Year.--Section 2602(c) of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8621(c)) is amended to read as
follows:
``(c) Amounts appropriated under this section for any fiscal year
for programs and activities under this title shall be made available for
obligation in the succeeding fiscal year.''.
(c) Incentive Program for Leveraging Non-Federal Resources.--Section
2602(d) of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C.
8621(d)) is amended--
(1) by striking ``(d)'' and inserting ``(d)(1)'';
(2) by striking ``are authorized'' and inserting ``is
authorized'';
(3) by striking ``$50,000,000'' and all that follows and
inserting the following: ``$30,000,000 for each of fiscal years
1999 through 2004, except as provided in paragraph (2).''; and
(4) by adding at the end the following:
``(2) For any of fiscal years 1999 through 2004 for which the amount
appropriated under subsection (b) is not less than $1,400,000,000, there
is authorized to be appropriated $50,000,000 to carry out section
2607A.''.
(d) Technical Amendments.--Section 2602(e) of the Low-Income Home
Energy Assistance Act of 1981 (42 U.S.C. 8621(e)) is amended--
(1) by striking ``are authorized'' and inserting ``is
authorized''; and
(2) by striking ``subsection (g)'' and inserting
``subsection (e) of such section''.
SEC. 303. DEFINITIONS.
Section 2603(4) of the Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8622(4)) is amended--
(1) by striking ``the term'' and inserting ``The term''; and
(2) by striking the semicolon and inserting a period.
SEC. 304. NATURAL DISASTERS AND OTHER EMERGENCIES.
(a) Definitions.--Section 2603 of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8622) is amended--
(1) by redesignating paragraphs (6) through (9) as
paragraphs (8) through (11), respectively;
(2) by inserting before paragraph (8) (as redesignated in
paragraph (1)) the following:
``(7) The term `natural disaster' means a weather event
(relating to cold or hot weather), flood, earthquake, tornado,
hurricane, or ice storm, or an event meeting such other criteria
as the Secretary, in the discretion of the Secretary, may
determine to be appropriate.'';
(3) by redesignating paragraphs (1) through (5) as
paragraphs (2) through (6), respectively; and
(4) by inserting before paragraph (2) (as redesignated in
paragraph (3)) the following:
``(1) The term `emergency' means--
``(A) a natural disaster;
``(B) a significant home energy supply shortage or
disruption;
``(C) a significant increase in the cost of home
energy, as determined by the Secretary;
``(D) a significant increase in home energy
disconnections reported by a utility, a State regulatory
agency, or another agency with necessary data;
``(E) a significant increase in participation in a
public benefit program such as the food stamp program
carried out under the Food Stamp Act of 1977 (7 U.S.C.
2011 et seq.), the national program to provide
supplemental security income carried out under title XVI
of the Social Security Act (42 U.S.C. 1381 et seq.), or
the State temporary assistance for needy families
program carried out under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), as
determined by the head of the appropriate Federal
agency;
``(F) a significant increase in unemployment,
layoffs, or the number of households with an individual
applying for unemployment benefits, as determined by the
Secretary of Labor; or
``(G) an event meeting such criteria as the
Secretary, in the discretion of the Secretary, may
determine to be appropriate.''.
(b) Considerations.--Section 2604(g) of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8623(g)) is amended by striking the
last two sentences and inserting the following: ``In determining whether
to make such an allotment to a State, the Secretary shall take into
account the extent to which the State was affected by the natural
disaster or other emergency involved, the availability to the State of
other resources under the program carried out under this title or any
other program, and such other factors as the Secretary may find to be
relevant. <<NOTE: Notification.>> Not later than 30 days after making
the determination, but prior to releasing an allotted amount to a State,
the Secretary shall notify Congress of the allotments made pursuant to
this subsection.''.
SEC. 305. STATE ALLOTMENTS.
Section 2604 of the Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8623) is amended--
(1) in subsection (b)(1), by striking ``the Northern Mariana
Islands, and the Trust Territory of the Pacific Islands.'' and
inserting ``and the Commonwealth of the Northern Mariana
Islands.'';
(2) in subsection (c)(3)(B)(ii), by striking ``application''
and inserting ``applications'';
(3) by striking subsection (f);
(4) in the first sentence of subsection (g), by striking
``(a) through (f)'' and inserting ``(a) through (d)''; and
(5) by redesignating subsection (g) as subsection (e).
SEC. 306. ADMINISTRATION.
Section 2605 of the Low-Income Home Energy Assistance Act of 1981
(42 U.S.C. 8624) is amended--
(1) in subsection (b)--
(A) in paragraph (9)(A), by striking ``and not
transferred pursuant to section 2604(f) for use under
another block grant'';
(B) in paragraph (14), by striking ``; and'' and
inserting a semicolon;
(C) in the matter following paragraph (14), by
striking ``The Secretary may not prescribe the manner in
which the States will comply with the provisions of this
subsection.''; and
(D) in the matter following paragraph (16), by
inserting before ``The Secretary shall issue'' the
following: ``The Secretary may not prescribe the manner
in which the States will comply with the provisions of
this subsection.'';
(2) in subsection (c)(1)--
(A) in subparagraph (B), by striking ``States'' and
inserting ``State''; and
(B) in subparagraph (G)(i), by striking ``has'' and
inserting ``had''; and
(3) in paragraphs (1) and (2)(A) of subsection (k) by
inserting ``, particularly those low-income households with the
lowest incomes that pay a high proportion of household income
for home energy'' before the period.
SEC. 307. PAYMENTS TO STATES.
Section 2607(b)(2)(B) of the Low-Income Home Energy Assistance Act
of 1981 (42 U.S.C. 8626(b)(2)(B)) is amended--
(1) in the first sentence, by striking ``and not transferred
pursuant to section 2604(f)''; and
(2) in the second sentence, by striking ``but not
transferred by the State''.
SEC. 308. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE OPTION.
(a) <<NOTE: 42 USC 8626b note.>> Evaluation.--The Comptroller
General of the United States shall conduct an evaluation of the
Residential Energy Assistance Challenge program described in section
2607B of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C.
8626b).
(b) <<NOTE: Deadline. 42 USC 8626b note.>> Report.--Not later than 2
years after the date of enactment of this Act, the Comptroller General
of the United States shall prepare and submit to Congress a report
containing--
(1) the findings resulting from the evaluation described in
subsection (a); and
(2) the State evaluations described in paragraphs (1) and
(2) of subsection (b) of such section 2607B.
(c) Incentive Grants.--Section 2607B(b)(1) of the Low-Income Home
Energy Assistance Act of 1981 (42 U.S.C. 8626b(b)(1)) is amended by
striking ``For each of the fiscal years 1996 through 1999'' and
inserting ``For each fiscal year''.
(d) Technical Amendments.--Section 2607B of the Low-Income Home
Energy Assistance Act of 1981 (42 U.S.C. 8626b) is amended--
(1) in subsection (e)(2)--
(A) by redesignating subparagraphs (F) through (N)
as subparagraphs (E) through (M), respectively; and
(B) in clause (i) of subparagraph (I) (as
redesignated in subparagraph (A)), by striking ``on''
and inserting ``of''; and
(2) by redesignating subsection (g) as subsection (f).
SEC. 309. TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE REVIEWS.
(a) In General.--Section 2609A(a) of the Low-Income Home Energy
Assistance Act of 1981 (42 U.S.C. 8628a(a)) is amended--
(1) in the matter preceding paragraph (1), by striking
``$250,000'' and inserting ``$300,000'';
(2) by striking ``Secretary--'' and all that follows through
``(1) to make'' and inserting the following: ``Secretary--
``(1) to--
``(A) make'';
(3) by striking ``organizations; or'' and all that follows
through ``(2) to enter'' and inserting the following:
``organizations; or
``(B) enter'';
(4) by striking the following:
``to provide'' and inserting the following:
``to provide'';
(5) by striking ``title.'' and inserting the following:
``title; or
``(2) to conduct onsite compliance reviews of programs
supported under this title.''; and
(6) in paragraph (1)(B) (as redesignated in paragraphs (2)
and (3))--
(A) by inserting ``or interagency agreements'' after
``cooperative arrangements''; and
(B) by inserting ``(including Federal agencies)''
after ``public agencies''.
(b) Conforming Amendment.--The section heading of section 2609A of
the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8628a) is
amended to read as follows:
``technical assistance, training, and compliance reviews''.
TITLE IV-- <<NOTE: Assets for Independence Act. 42 USC 604
note.>> ASSETS FOR INDEPENDENCE
SEC. 401. SHORT TITLE.
This title may be cited as the ``Assets for Independence Act''.
SEC. 402. FINDINGS.
Congress makes the following findings:
(1) Economic well-being does not come solely from income,
spending, and consumption, but also requires savings,
investment, and accumulation of assets because assets can
improve economic independence and stability, connect individuals
with a viable and hopeful future, stimulate development of human
and other capital, and enhance the welfare of offspring.
(2) Fully \1/2\ of all Americans have either no, negligible,
or negative assets available for investment, just as the price
of entry to the economic mainstream, the cost of a house, an
adequate education, and starting a business, is increasing.
Further, the household savings rate of the United States lags
far behind other industrial nations, presenting a barrier to
economic growth.
(3) In the current tight fiscal environment, the United
States should invest existing resources in high-yield
initiatives. There is reason to believe that the financial
returns, including increased income, tax revenue, and decreased
welfare cash assistance, resulting from individual development
accounts will far exceed the cost of investment in those
accounts.
(4) Traditional public assistance programs concentrating on
income and consumption have rarely been successful in promoting
and supporting the transition to increased economic self-
sufficiency. Income-based domestic policy should be complemented
with asset-based policy because, while income-based policies
ensure that consumption needs (including food, child care, rent,
clothing, and health care) are met, asset-based policies provide
the means to achieve greater independence and economic well-
being.
SEC. 403. PURPOSES.
The purposes of this title are to provide for the establishment of
demonstration projects designed to determine--
(1) the social, civic, psychological, and economic effects
of providing to individuals and families with limited means an
incentive to accumulate assets by saving a portion of their
earned income;
(2) the extent to which an asset-based policy that promotes
saving for postsecondary education, homeownership, and
microenterprise development may be used to enable individuals
and families with limited means to increase their economic self-
sufficiency; and
(3) the extent to which an asset-based policy stabilizes and
improves families and the community in which the families live.
SEC. 404. DEFINITIONS.
In this title:
(1) Applicable period.--The term ``applicable period''
means, with respect to amounts to be paid from a grant made for
a project year, the calendar year immediately preceding the
calendar year in which the grant is made.
(2) Eligible individual.--The term ``eligible individual''
means an individual who is selected to participate in a
demonstration project by a qualified entity under section 409.
(3) Emergency withdrawal.--The term ``emergency withdrawal''
means a withdrawal by an eligible individual that--
(A) is a withdrawal of only those funds, or a
portion of those funds, deposited by the individual in
the individual development account of the individual;
(B) is permitted by a qualified entity on a case-by-
case basis; and
(C) is made for--
(i) expenses for medical care or necessary to
obtain medical care, for the individual or a
spouse or dependent of the individual described in
paragraph (8)(D);
(ii) payments necessary to prevent the
eviction of the individual from the residence of
the individual, or foreclosure on the mortgage for
the principal residence of the individual, as
defined in paragraph (8)(B); or
(iii) payments necessary to enable the
individual to meet necessary living expenses
following loss of employment.
(4) Household.--The term ``household'' means all individuals
who share use of a dwelling unit as primary quarters for living
and eating separate from other individuals.
(5) Individual development account.--
(A) In general.--The term ``individual development
account'' means a trust created or organized in the
United States exclusively for the purpose of paying the
qualified expenses of an eligible individual, or
enabling the eligible individual to make an emergency
withdrawal, but only if the written governing instrument
creating the trust contains the following requirements:
(i) No contribution will be accepted unless
the contribution is in cash or by check.
(ii) The trustee is a federally insured
financial institution, or a State insured
financial institution if no federally insured
financial institution is available.
(iii) The assets of the trust will be invested
in accordance with the direction of the eligible
individual after consultation with the qualified
entity providing deposits for the individual under
section 410.
(iv) The assets of the trust will not be
commingled with other property except in a common
trust fund or common investment fund.
(v) Except as provided in clause (vi), any
amount in the trust that is attributable to a
deposit provided under section 410 may be paid or
distributed out of the trust only for the purpose
of paying the qualified expenses of the eligible
individual, or enabling the eligible individual to
make an emergency withdrawal.
(vi) Any balance in the trust on the day after
the date on which the individual for whose benefit
the trust is established dies shall be distributed
within 30 days of that date as directed by that
individual to another individual development
account established for the benefit of an eligible
individual.
(B) Custodial accounts.--For purposes of
subparagraph (A), a custodial account shall be treated
as a trust if the assets of the custodial account are
held by a bank (as defined in section 408(n) of the
Internal Revenue Code of 1986) or another person who
demonstrates, to the satisfaction of the Secretary, that
the manner in which such person will administer the
custodial account will be consistent with the
requirements of this title, and if the custodial account
would, except for the fact that it is not a trust,
constitute an individual development account described
in subparagraph (A). For purposes of this title, in the
case of a custodial account treated as a trust by reason
of the preceding sentence, the custodian of that
custodial account shall be treated as the trustee of the
account.
(6) Project year.--The term ``project year'' means, with
respect to a demonstration project, any of the 5 consecutive 12-
month periods beginning on the date the project is originally
authorized to be conducted.
(7) Qualified entity.--
(A) In general.--The term ``qualified entity''
means--
(i) one or more not-for-profit organizations
described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from taxation
under section 501(a) of such Code; or
(ii) a State or local government agency, or a
tribal government, submitting an application under
section 405 jointly with an organization described
in clause (i).
(B) Rule of construction.--Nothing in this paragraph
shall be construed as preventing an organization
described in subparagraph (A)(i) from collaborating with
a financial institution or for-profit community
development corporation to carry out the purposes of
this title.
(8) Qualified expenses.--The term ``qualified expenses''
means one or more of the following, as provided by a qualified
entity:
(A) Postsecondary educational expenses.--
Postsecondary educational expenses paid from an
individual development account directly to an eligible
educational institution. In this subparagraph:
(i) Postsecondary educational expenses.--The
term ``postsecondary educational expenses'' means
the following:
(I) Tuition and fees.--Tuition and
fees required for the enrollment or
attendance of a student at an eligible
educational institution.
(II) Fees, books, supplies, and
equipment.--Fees, books, supplies, and
equipment required for courses of
instruction at an eligible educational
institution.
(ii) Eligible educational institution.--The
term ``eligible educational institution'' means
the following:
(I) Institution of higher
education.--An institution described in
section 101 or 102 of the Higher
Education Act of 1965.
(II) Postsecondary vocational
education school.--An area vocational
education school (as defined in
subparagraph (C) or (D) of section
521(4) of the Carl D. Perkins Vocational
and Applied Technology Education Act (20
U.S.C. 2471(4))) which is in any State
(as defined in section 521(33) of such
Act), as such sections are in effect on
the date of enactment of this title.
(B) First-home purchase.--Qualified acquisition
costs with respect to a principal residence for a
qualified first-time homebuyer, if paid from an
individual development account directly to the persons
to whom the amounts are due. In this subparagraph:
(i) Principal residence.--The term ``principal
residence'' means a main residence, the qualified
acquisition costs of which do not exceed 100
percent of the average area purchase price
applicable to such residence.
(ii) Qualified acquisition costs.--The term
``qualified acquisition costs'' means the costs of
acquiring, constructing, or reconstructing a
residence. The term includes any usual or
reasonable settlement, financing, or other closing
costs.
(iii) Qualified first-time homebuyer.--
(I) In general.--The term
``qualified first-time homebuyer'' means
an individual participating in the
project involved (and, if married, the
individual's spouse) who has no present
ownership interest in a principal
residence during the 3-year period
ending on the date of acquisition of the
principal residence to which this
subparagraph applies.
(II) Date of acquisition.--The term
``date of acquisition'' means the date
on which a binding contract to acquire,
construct, or reconstruct the principal
residence to which this subparagraph
applies is entered into.
(C) Business capitalization.--Amounts paid from an
individual development account directly to a business
capitalization account that is established in a
federally insured financial institution (or in a State
insured financial institution if no federally insured
financial institution is available) and is restricted to
use solely for qualified business capitalization
expenses. In this subparagraph:
(i) Qualified business capitalization
expenses.--The term ``qualified business
capitalization expenses'' means qualified
expenditures for the capitalization of a qualified
business pursuant to a qualified plan.
(ii) Qualified expenditures.--The term
``qualified expenditures'' means expenditures
included in a qualified plan, including capital,
plant, equipment, working capital, and inventory
expenses.
(iii) Qualified business.--The term
``qualified business'' means any business that
does not contravene any law or public policy (as
determined by the Secretary).
(iv) Qualified plan.--The term ``qualified
plan'' means a business plan, or a plan to use a
business asset purchased, which--
(I) is approved by a financial
institution, a microenterprise
development organization, or a nonprofit
loan fund having demonstrated fiduciary
integrity;
(II) includes a description of
services or goods to be sold, a
marketing plan, and projected financial
statements; and
(III) may require the eligible
individual to obtain the assistance of
an experienced entrepreneurial adviser.
(D) Transfers to idas of family members.--Amounts
paid from an individual development account directly
into another such account established for the benefit of
an eligible individual who is--
(i) the individual's spouse; or
(ii) any dependent of the individual with
respect to whom the individual is allowed a
deduction under section 151 of the Internal
Revenue Code of 1986.
(9) Qualified savings of the individual for the period.--The
term ``qualified savings of the individual for the period''
means the aggregate of the amounts contributed by an individual
to the individual development account of the individual during
the period.
(10) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services, acting through the Director of
Community Services.
(11) Tribal government.--The term ``tribal government''
means a tribal organization, as defined in section 4 of the
Indian Self-Determination and Education Assistance Act (25
U.S.C. 450b) or a Native Hawaiian organization, as defined in
section 9212 of the Native Hawaiian Education Act (20 U.S.C.
7912).
SEC. 405. APPLICATIONS.
(a) <<NOTE: Deadline. Public information.>> Announcement of
Demonstration Projects.--Not later than 3 months after the date of
enactment of this title, the Secretary shall publicly announce the
availability of funding under this title for demonstration projects and
shall ensure that applications to conduct the demonstration projects are
widely available to qualified entities.
(b) <<NOTE: Deadline.>> Submission.--Not later than 6 months after
the date of enactment of this title, a qualified entity may submit to
the Secretary an application to conduct a demonstration project under
this title.
(c) Criteria.--In considering whether to approve an application to
conduct a demonstration project under this title, the Secretary shall
assess the following:
(1) Sufficiency of project.--The degree to which the project
described in the application appears likely to aid project
participants in achieving economic self-sufficiency through
activities requiring one or more qualified expenses.
(2) Administrative ability.--The experience and ability of
the applicant to responsibly administer the project.
(3) Ability to assist participants.--The experience and
ability of the applicant in recruiting, educating, and assisting
project participants to increase their economic independence and
general well-being through the development of assets.
(4) Commitment of non-federal funds.--The aggregate amount
of direct funds from non-Federal public sector and from private
sources that are formally committed to the project as matching
contributions.
(5) Adequacy of plan for providing information for
evaluation.--The adequacy of the plan for providing information
relevant to an evaluation of the project.
(6) Other factors.--Such other factors relevant to the
purposes of this title as the Secretary may specify.
(d) Preferences.--In considering an application to conduct a
demonstration project under this title, the Secretary shall give
preference to an application that--
(1) demonstrates the willingness and ability to select
individuals described in section 408 who are predominantly from
households in which a child (or children) is living with the
child's biological or adoptive mother or father, or with the
child's legal guardian;
(2) provides a commitment of non-Federal funds with a
proportionately greater amount of such funds committed from
private sector sources; and
(3) targets such individuals residing within one or more
relatively well-defined neighborhoods or communities (including
rural communities) that experience high rates of poverty or
unemployment.
(e) <<NOTE: Deadline.>> Approval.--Not later than 9 months after the
date of enactment of this title, the Secretary shall, on a competitive
basis, approve such applications to conduct demonstration projects under
this title as the Secretary considers to be appropriate, taking into
account the assessments required by subsections (c) and (d). The
Secretary shall ensure, to the maximum extent practicable, that the
applications that are approved involve a range of communities (both
rural and urban) and diverse populations.
(f) Contracts With Nonprofit Entities.--The Secretary may contract
with an entity described in section 501(c)(3) of the Internal Revenue
Code of 1986 and exempt from taxation under section 501(a) of such Code
to carry out any responsibility of the Secretary under this section or
section 412 if--
(1) such entity demonstrates the ability to carry out such
responsibility; and
(2) the Secretary can demonstrate that such responsibility
would not be carried out by the Secretary at a lower cost.
(g) Grandfathering of Existing Statewide Programs.--Any statewide
individual asset-building program that is carried out in a manner
consistent with the purposes of this title, that is established under
State law as of the date of enactment of this Act, and that as of such
date is operating with an annual State appropriation of not less than
$1,000,000 in non-Federal funds, shall be deemed to meet the eligibility
requirements of this subtitle, and the entity carrying out the program
shall be deemed to be a qualified entity. The Secretary shall consider
funding the statewide program as a demonstration project described in
this subtitle. In considering the statewide program for funding, the
Secretary shall review an application submitted by the entity carrying
out such statewide program under this section, notwithstanding the
preference requirements listed in subsection (d). Any program
requirements under sections 407 through 411 that are inconsistent with
State statutory requirements in effect on the date of enactment of this
Act, governing such statewide program, shall not apply to the program.
SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.
(a) <<NOTE: Deadline.>> Demonstration Authority.--If the Secretary
approves an application to conduct a demonstration project under this
title, the Secretary shall, not later than 10 months after the date of
enactment of this title, authorize the applicant to conduct the project
for 5 project years in accordance with the approved application and the
requirements of this title.
(b) Grant Authority.--For each project year of a demonstration
project conducted under this title, the Secretary may make a grant to
the qualified entity authorized to conduct the project. In making such a
grant, the Secretary shall make the grant on the first day of the
project year in an amount not to exceed the lesser of--
(1) the aggregate amount of funds committed as matching
contributions from non-Federal public or private sector sources;
or
(2) $1,000,000.
SEC. 407. RESERVE FUND.
(a) Establishment.--A qualified entity under this title, other than
a State or local government agency or a tribal government, shall
establish a Reserve Fund that shall be maintained in accordance with
this section.
(b) Amounts in Reserve Fund.--
(1) In general.--As soon after receipt as is practicable, a
qualified entity shall deposit in the Reserve Fund established
under subsection (a)--
(A) all funds provided to the qualified entity from
any public or private source in connection with the
demonstration project; and
(B) the proceeds from any investment made under
subsection (c)(2).
(2) Uniform accounting regulations.--The Secretary shall
prescribe regulations with respect to accounting for amounts in
the Reserve Fund established under subsection (a).
(c) Use of Amounts in the Reserve Fund.--
(1) In general.--A qualified entity shall use the amounts in
the Reserve Fund established under subsection (a) to--
(A) assist participants in the demonstration project
in obtaining the skills (including economic literacy,
budgeting, credit, and counseling skills) and
information necessary to achieve economic self-
sufficiency through activities requiring qualified
expenses;
(B) provide deposits in accordance with section 410
for individuals selected by the qualified entity to
participate in the demonstration project;
(C) administer the demonstration project; and
(D) provide the research organization evaluating the
demonstration project under section 414 with such
information with respect to the demonstration project as
may be required for the evaluation.
(2) Authority to invest funds.--
(A) Guidelines.--The Secretary shall establish
guidelines for investing amounts in the Reserve Fund
established under subsection (a) in a manner that
provides an appropriate balance between return,
liquidity, and risk.
(B) Investment.--A qualified entity shall invest the
amounts in its Reserve Fund that are not immediately
needed to carry out the provisions of paragraph (1), in
accordance with the guidelines established under
subparagraph (A).
(3) Limitation on uses.--Not more than 9.5 percent of the
amounts provided to a qualified entity under section 406(b)
shall be used by the qualified entity for the purposes described
in subparagraphs (A), (C), and (D) of paragraph (1), of which
not less than 2 percent of the amounts shall be used by the
qualified entity for the purposes described in paragraph (1)(D).
If two or more qualified entities are jointly administering a
project, no qualified entity shall use more than its
proportional share for the purposes described in subparagraphs
(A), (C), and (D) of paragraph (1).
(d) Unused Federal Grant Funds Transferred to the Secretary When
Project Terminates.--Notwithstanding subsection (c), upon the
termination of any demonstration project authorized under this section,
the qualified entity conducting the project shall transfer to the
Secretary an amount equal to--
(1) the amounts in its Reserve Fund at the time of the
termination; multiplied by
(2) a percentage equal to--
(A) the aggregate amount of grants made to the
qualified entity under section 406(b); divided by
(B) the aggregate amount of all funds provided to
the qualified entity from all sources to conduct the
project.
SEC. 408. ELIGIBILITY FOR PARTICIPATION.
(a) In General.--Any individual who is a member of a household that
is eligible for assistance under the State temporary assistance for
needy families program established under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), or that meets each of the
following requirements shall be eligible to participate in a
demonstration project conducted under this title:
(1) Income test.--The adjusted gross income of the household
does not exceed the earned income amount described in section 32
of the Internal Revenue Code of 1986 (taking into account the
size of the household).
(2) Net worth test.--
(A) In general.--The net worth of the household, as
of the end of the calendar year preceding the
determination of eligibility, does not exceed $10,000.
(B) Determination of net worth.--For purposes of
subparagraph (A), the net worth of a household is the
amount equal to--
(i) the aggregate market value of all assets
that are owned in whole or in part by any member
of the household; minus
(ii) the obligations or debts of any member of
the household.
(C) Exclusions.--For purposes of determining the net
worth of a household, a household's assets shall not be
considered to include the primary dwelling unit and one
motor vehicle owned by a member of the household.
(b) <<NOTE: Regulations.>> Individuals Unable To Complete the
Project.--The Secretary shall establish such regulations as are
necessary to ensure compliance with this title if an individual
participating in the demonstration project moves from the community in
which the project is conducted or is otherwise unable to continue
participating in that project, including regulations prohibiting future
eligibility to participate in any other demonstration project conducted
under this title.
SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.
From among the individuals eligible to participate in a
demonstration project conducted under this title, each qualified entity
shall select the individuals--
(1) that the qualified entity determines to be best suited
to participate; and
(2) to whom the qualified entity will provide deposits in
accordance with section 410.
SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.
(a) In General.--Not less than once every 3 months during each
project year, each qualified entity under this title shall deposit in
the individual development account of each individual participating in
the project, or into a parallel account maintained by the qualified
entity--
(1) from the non-Federal funds described in section
405(c)(4), a matching contribution of not less than $0.50 and
not more than $4 for every $1 of earned income (as defined in
section 911(d)(2) of the Internal Revenue Code of 1986)
deposited in the account by a project participant during that
period;
(2) from the grant made under section 406(b), an amount
equal to the matching contribution made under paragraph (1); and
(3) any interest that has accrued on amounts deposited under
paragraph (1) or (2) on behalf of that individual into the
individual development account of the individual or into a
parallel account maintained by the qualified entity.
(b) Limitation on Deposits for an Individual.--Not more than $2,000
from a grant made under section 406(b) shall be provided to any one
individual over the course of the demonstration project.
(c) Limitation on Deposits for a Household.--Not more than $4,000
from a grant made under section 406(b) shall be provided to any one
household over the course of the demonstration project.
(d) Withdrawal of Funds.--The Secretary shall establish such
guidelines as may be necessary to ensure that funds held in an
individual development account are not withdrawn, except for one or more
qualified expenses, or for an emergency withdrawal. Such guidelines
shall include a requirement that a responsible official of the qualified
entity conducting a project approve a withdrawal from such an account in
writing. The guidelines shall provide that no individual may withdraw
funds from an individual development account earlier than 6 months after
the date on which the individual first deposits funds in the account.
(e) Reimbursement.--An individual shall reimburse an individual
development account for any funds withdrawn from the account for an
emergency withdrawal, not later than 12 months after the date of the
withdrawal. If the individual fails to make the reimbursement, the
qualified entity administering the account shall transfer the funds
deposited into the account or a parallel account under this section to
the Reserve Fund of the qualified entity, and use the funds to benefit
other individuals participating in the demonstration project involved.
SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.
A qualified entity under this title, other than a State or local
government agency or a tribal government, shall, subject to the
provisions of section 413, have sole authority over the administration
of the project. The Secretary may prescribe only such regulations or
guidelines with respect to demonstration projects conducted under this
title as are necessary to ensure compliance with the approved
applications and the requirements of this title.
SEC. 412. ANNUAL PROGRESS REPORTS.
(a) In General.--Each qualified entity under this title shall
prepare an annual report on the progress of the demonstration project.
Each report shall include both program and participant information and
shall specify for the period covered by the report the following
information:
(1) The number and characteristics of individuals making a
deposit into an individual development account.
(2) The amounts in the Reserve Fund established with respect
to the project.
(3) The amounts deposited in the individual development
accounts.
(4) The amounts withdrawn from the individual development
accounts and the purposes for which such amounts were withdrawn.
(5) The balances remaining in the individual development
accounts.
(6) The savings account characteristics (such as threshold
amounts and match rates) required to stimulate participation in
the demonstration project, and how such characteristics vary
among different populations or communities.
(7) What service configurations of the qualified entity
(such as configurations relating to peer support, structured
planning exercises, mentoring, and case management) increased
the rate and consistency of participation in the demonstration
project and how such configurations varied among different
populations or communities.
(8) Such other information as the Secretary may require to
evaluate the demonstration project.
(b) Submission of Reports.--The qualified entity shall submit each
report required to be prepared under subsection (a) to--
(1) the Secretary; and
(2) the Treasurer (or equivalent official) of the State in
which the project is conducted, if the State or a local
government or a tribal government committed funds to the
demonstration project.
(c) Timing.--The first report required by subsection (a) shall be
submitted not later than 60 days after the end of the calendar year in
which the Secretary authorized the qualified entity to conduct the
demonstration project, and subsequent reports shall be submitted every
12 months thereafter, until the conclusion of the project.
SEC. 413. SANCTIONS.
(a) Authority To Terminate Demonstration Project.--If the Secretary
determines that a qualified entity under this title is not operating a
demonstration project in accordance with the entity's approved
application under section 405 or the requirements of this title (and has
not implemented any corrective recommendations directed by the
Secretary), the Secretary shall terminate such entity's authority to
conduct the demonstration project.
(b) Actions Required Upon Termination.--If the Secretary terminates
the authority to conduct a demonstration project, the Secretary--
(1) shall suspend the demonstration project;
(2) shall take control of the Reserve Fund established
pursuant to section 407;
(3) shall make every effort to identify another qualified
entity (or entities) willing and able to conduct the project in
accordance with the approved application (or, if modification is
necessary to incorporate the recommendations, the application as
modified) and the requirements of this title;
(4) shall, if the Secretary identifies an entity (or
entities) described in paragraph (3)--
(A) authorize the entity (or entities) to conduct
the project in accordance with the approved application
(or, if modification is necessary to incorporate the
recommendations, the application as modified) and the
requirements of this title;
(B) transfer to the entity (or entities) control
over the Reserve Fund established pursuant to section
407; and
(C) consider, for purposes of this title--
(i) such other entity (or entities) to be the
qualified entity (or entities) originally
authorized to conduct the demonstration project;
and
(ii) the date of such authorization to be the
date of the original authorization; and
(5) if, by the end of the 1-year period beginning on the
date of the termination, the Secretary has not found a qualified
entity (or entities) described in paragraph (3), shall--
(A) terminate the project; and
(B) from the amount remaining in the Reserve Fund
established as part of the project, remit to each source
that provided funds under section 405(c)(4) to the
entity originally authorized to conduct the project, an
amount that bears the same ratio to the amount so
remaining as the amount provided from the source under
section 405(c)(4) bears to the amount provided from all
such sources under that section.
SEC. 414. EVALUATIONS.
(a) <<NOTE: Deadline. Contracts.>> In General.--Not later than 10
months after the date of enactment of this title, the Secretary shall
enter into a contract with an independent research organization to
evaluate the demonstration projects conducted under this title,
individually and as a group, including evaluating all qualified entities
participating in and sources providing funds for the demonstration
projects conducted under this title.
(b) Factors To Evaluate.--In evaluating any demonstration project
conducted under this title, the research organization shall address the
following factors:
(1) The effects of incentives and organizational or
institutional support on savings behavior in the demonstration
project.
(2) The savings rates of individuals in the demonstration
project based on demographic characteristics including gender,
age, family size, race or ethnic background, and income.
(3) The economic, civic, psychological, and social effects
of asset accumulation, and how such effects vary among different
populations or communities.
(4) The effects of individual development accounts on
savings rates, homeownership, level of postsecondary education
attained, and self-employment, and how such effects vary among
different populations or communities.
(5) The potential financial returns to the Federal
Government and to other public sector and private sector
investors in individual development accounts over a 5-year and
10-year period of time.
(6) The lessons to be learned from the demonstration
projects conducted under this title and if a permanent program
of individual development accounts should be established.
(7) Such other factors as may be prescribed by the
Secretary.
(c) Methodological Requirements.--In evaluating any demonstration
project conducted under this title, the research organization shall--
(1) for at least one site, use control groups to compare
participants with nonparticipants;
(2) before, during, and after the project, obtain such
quantitative data as are necessary to evaluate the project
thoroughly; and
(3) develop a qualitative assessment, derived from sources
such as in-depth interviews, of how asset accumulation affects
individuals and families.
(d) Reports by the Secretary.-- <<NOTE: Deadlines.>>
(1) Interim reports.--Not later than 90 days after the end
of the calendar year in which the Secretary first authorizes a
qualified entity to conduct a demonstration project under this
title, and every 12 months thereafter until all demonstration
projects conducted under this title are completed, the Secretary
shall submit to Congress an interim report setting forth the
results of the reports submitted pursuant to section 412(b).
(2) Final reports.--Not later than 12 months after the
conclusion of all demonstration projects conducted under this
title, the Secretary shall submit to Congress a final report
setting forth the results and findings of all reports and
evaluations conducted pursuant to this title.
(e) Evaluation Expenses.--The Secretary shall expend 2 percent of
the amount appropriated under section 416 for a fiscal year, to carry
out the objectives of this section.
SEC. 415. TREATMENT OF FUNDS.
Of the funds deposited in individual development accounts for
eligible individuals, only the funds deposited by the individuals
(including interest accruing on those funds) may be considered to be the
income, assets, or resources of the individuals, for purposes of
determining eligibility for, or the amount of assistance furnished
under, any Federal or federally assisted program based on need.
SEC. 416. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this title,
$25,000,000 for each of fiscal years 1999, 2000, 2001, 2002, and 2003,
to remain available until expended.
Approved October 27, 1998.
LEGISLATIVE HISTORY--S. 2206:
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HOUSE REPORTS: No. 105-788 (Comm. of Conference).
SENATE REPORTS: No. 105-256 (Comm. on Labor and Human Resources).
CONGRESSIONAL RECORD, Vol. 144 (1998):
July 27, considered and passed Senate.
Sept. 14, considered and passed House, amended.
Oct. 8, House and Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998):
Oct. 27, Presidential statement.
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