II

104TH CONGRESS

2D SESSION S. 2166

To increase the overall economy and efficiency of Government operations

and enable more efficient use of Federal funding by enabling State,

local and tribal governments and private, nonprofit organizations to use

amounts available under certain Federal assistance programs in accordance with approved flexibility plans.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 30, 1996

Mr. HATFIELD introduced the following bill; which was read twice and

referred to the Committee on Governmental Affairs

A BILL

To increase the overall economy and efficiency of Government

operations and enable more efficient use of Federal funding by enabling State, local and tribal governments and

private, nonprofit organizations to use amounts available

under certain Federal assistance programs in accordance

with approved flexibility plans.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Local Empowerment

5 and Flexibility Pilot Act of 1996’’.
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1 SEC. 2. FINDINGS.

2 The Congress finds that—

3 (1) historically, Federal programs have ad4 dressed the Nation’s problems by providing categor5 ical financial assistance with detailed requirements

6 relating to the use of funds;

7 (2) while the assistance described in paragraph

8 (1) has been directed at critical problems, some pro9 gram requirements may inadvertently impede the ef10 fective delivery of services;

11 (3) the Nation’s State, local, and tribal govern12 ments and private, nonprofit organizations are deal13 ing with increasingly complex problems which re14 quire the delivery of many kinds of services;

15 (4) our Nation’s communities are diverse and

16 many have innovative planning and community in17 volvement strategies to comprehensively meet their

18 particular service needs for providing services, but

19 Federal, State, and local grant and other require20 ments often hamper effective implementation of such

21 strategies; and

22 (5) it is more important than ever to provide

23 programs that—

24 (A) promote more effective and efficient

25 delivery of services at all levels of government
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1 to meet the full range of needs of individuals,

2 families, and society;

3 (B) respond flexibly to the diverse needs of

4 the Nation’s communities;

5 (C) reduce the barriers between programs

6 that impede the State, local, and tribal govern7 ments’ ability to effectively deliver services; and

8 (D) empower State, local, and tribal gov9 ernments and private, nonprofit organizations

10 to be innovative in creating programs that meet

11 the unique needs of their communities while

12 continuing to address national policy goals.

13 SEC. 3. PURPOSES.

14 The purposes of this Act are to—

15 (1) improve the delivery of services to the pub16 lic;

17 (2) promote State, local and tribal governments

18 and private, non-profit organizations and consor19 tiums to identify goals to improve their communities

20 and the lives of their citizens;

21 (3) enable eligible applicants to adapt programs

22 of Federal financial assistance to the particular

23 needs of their communities by integrating programs

24 and program funds across existing Federal financial
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1 assistance programs that have similar goals and pur2 poses;

3 (4) more effectively meet the goals and pur4 poses of Federal, State and local financial assistance

5 programs;

6 (5) empower eligible applicants to work to7 gether to build stronger cooperative, intergovern8 mental and private partnerships to address critical

9 service problems;

10 (6) place less emphasis in Federal financial as11 sistance programs on complying with procedures and

12 more emphasis on achieving Federal, State, local

13 and tribal policy goals;

14 (7) facilitate State, local, and tribal government

15 efforts to develop regional or metropolitan solutions

16 to shared problems; and

17 (8) improve intergovernmental efficiency.

18 SEC. 4. DEFINITIONS.

19 For purposes of this Act:

20 (1) AFFECTED FEDERAL AGENCY.—The term

21 ‘‘affected Federal agency’’ means the Federal agency

22 with principal authority for the administration of an

23 eligible Federal financial assistance program in24 cluded in a plan.
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1 (2) AFFECTED STATE AGENCY.—The term ‘‘af2 fected State agency’’ means—

3 (A) any State agency with authority for

4 the administration of any State program or eli5 gible Federal financial assistance program; and

6 (B) with respect to education programs,

7 the term shall include the State Education

8 Agency as defined by the Elementary and Sec9 ondary Education Act and the Higher Edu10 cation Act.

11 (3) APPROVED FLEXIBILITY PLAN.—The term

12 ‘‘approved flexibility plan’’ means a flexibility plan

13 or that part of a flexibility plan, that is approved by

14 the Community Empowerment Board under section

15 8.

16 (4) BOARD.—The term ‘‘Board’’ means the

17 Community Empowerment Board established under

18 section 5.

19 (5) DIRECTOR.—The term ‘‘Director’’ means

20 the Director of the Office of Management and Budg21 et.

22 (6) ELIGIBLE APPLICANT.—The term ‘‘eligible

23 applicant’’ means a State, local, or tribal govern24 ment, qualified organization, or qualified consortium

25 that is eligible to receive financial assistance under
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1 1 or more eligible Federal financial assistance pro2 gram.

3 (7) ELIGIBLE FEDERAL FINANCIAL ASSISTANCE

4 PROGRAM.—The term ‘‘eligible Federal financial as5 sistance program’’—

6 (A) except as provided in subparagraph

7 (B), means a domestic assistance program (as

8 defined under section 6101(4) of title 31, Unit9 ed States Code) under which financial assist10 ance is available, directly or indirectly, to a

11 State, local, or tribal government or a qualified

12 organization to carry out activities consistent

13 with national policy goals; and

14 (B) does not include—

15 (i) a Federal program under which di16 rect financial assistance is provided by the

17 Federal Government directly to an individ18 ual beneficiary of that financial assistance,

19 or to a State to provide direct financial as20 sistance, or to a State to provide direct fi21 nancial or food voucher assistance directly

22 to an individual beneficiary;

23 (ii) a program carried out with direct

24 spending (as defined in section 250(c)(8)

25 of the Balanced Budget and Emergency
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1 Deficit Control Act of 1985 (2 U.S.C.

2 900(c)(8));

3 (iii) a program of assistance referred

4 to in section 6101(4)(A)(ix) of title 31,

5 United States Code, or section 3(10) of the

6 Congressional Budget Act of 1974; or

7 (iv) any project specially designated in

8 an appropriations Act or its accompanying

9 report.

10 (8) FLEXIBILITY PLAN.—The term ‘‘flexibility

11 plan’’ means a comprehensive plan or part of such

12 plan for the coordination or integration and the ad13 ministration by an eligible applicant of financial as14 sistance provided by the Federal Government under

15 2 or more eligible Federal financial assistance pro16 grams that includes funds from Federal, State, local,

17 or tribal government or private sources to address

18 the service needs of a community.

19 (9) GOALS AND PURPOSES.—The term ‘‘goals

20 and purposes’’ means the goals and purposes em21 bodied in an eligible Federal financial assistance

22 program, including the targeted population embodied

23 in that program.

24 (10) LOCAL GOVERNMENT.—The term ‘‘local

25 government’’ means—
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1 (A) a political subdivision of a State that

2 is a unit of general local government (as de3 fined under section 6501 of title 31, United

4 States Code);

5 (B) any combination of political subdivi6 sions described in subparagraph (A) that sub7 mits an application to the Board; or

8 (C) a local educational agency as defined

9 under section 14101(18) of the Elementary and

10 Secondary Education Act of 1965 (20 U.S.C.

11 8801(18)).

12 (11) QUALIFIED CONSORTIUM.—The term

13 ‘‘qualified consortium’’ means a group that is com14 posed of 2 or more qualified organizations, State,

15 local, or tribal agencies that receive federally appro16 priated funds.

17 (12) QUALIFIED ORGANIZATION.—The term

18 ‘‘qualified organization’’ means a private, nonprofit

19 organization described in section 501(c)(3) of the

20 Internal Revenue Code of 1986 (26 U.S.C.

21 501(c)(3)) that is exempt from taxation under sec22 tion 501(a) of the Internal Revenue Code of 1986

23 (26 U.S.C. 501(a)).

24 (13) SMALL GOVERNMENT.—The term ‘‘small

25 government’’ means any small governmental juris-
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1 diction defined in section 601(5) of title 5, United

2 States Code, and a tribal government.

3 (14) STATE.—The term ‘‘State’’ means each of

4 the 50 States, the District of Columbia, Puerto Rico,

5 American Samoa, Guam, and the Virgin Islands.

6 (15) STATE LEGISLATIVE OFFICIAL.—The term

7 ‘‘State legislative official’’ means—

8 (A) the presiding officer of a chamber of a

9 State legislature; and

10 (B) the minority leader of a chamber of a

11 State legislature.

12 (16) TRIBAL GOVERNMENT.—The term ‘‘tribal

13 goverment’’ means the governing entity of an Indian

14 tribe, as that term is defined in the Indian Self De15 termination and Education Assistance Act (25

16 U.S.C. 450b).

17 SEC. 5. ESTABLISHMENT OF COMMUNITY EMPOWERMENT

18 BOARD.

19 (a) IN GENERAL.—There is established a Community

20 Empowerment Board, which shall consist of—

21 (1) the Secretary of Housing and Urban Devel22 opment;

23 (2) the Secretary of Health and Human Serv24 ices;

25 (3) the Secretary of Agriculture;
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1 (4) the Secretary of Transportation;

2 (5) the Secretary of Education;

3 (6) the Secretary of Commerce;

4 (7) the Secretary of Labor;

5 (8) the Secretary of the Treasury;

6 (9) the Attorney General;

7 (10) the Secretary of the Interior;

8 (11) the Secretary of Energy;

9 (12) the Secretary of Veterans Affairs;

10 (13) the Secretary of Defense;

11 (14) the Director of the Federal Emergency

12 Management Agency;

13 (15) the Administrator of the Environmental

14 Protection Agency;

15 (16) the Director of the National Drug Control

16 Policy;

17 (17) the Administrator of the Small Business

18 Administration;

19 (18) the Director of the Office of Management

20 and Budget;

21 (19) the Administrator of General Services; and

22 (20) other officials of the executive branch as

23 directed by the President.

24 (b) CHAIR.—The President shall designate the Chair

25 of the Board from among its members.
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1 (c) FUNCTIONS.—

2 (1) IN GENERAL.—The Board shall—

3 (A) no later than 180 days after imple4 mentation of this Act, select 6 States to partici5 pate in this Act;

6 (B) receive, review, and approve or dis7 approve flexibility plans in accordance with sec8 tion 7;

9 (C) consider all requests for technical as10 sistance from eligible applicants and, when ap11 propriate, provide or direct that an affected

12 Federal agency provide the head of an agency

13 that administers en eligible Federal financial

14 assistance program under which substantial

15 Federal financial assistance would be provided

16 under the plan to provide technical assistance

17 to the eligible applicant, and to the extent per18 mitted by law, special assistance to interested

19 small governments to support the development

20 and implementation of a flexibility plan, which

21 may include expedited processing;

22 (D) in consultation with the Director, mon23 itor the progress of development and implemen24 tation of flexibility plans;
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1 (E) in consultation with the Director, co2 ordinate and assist Federal agencies in identify3 ing regulations of eligible Federal financial as4 sistance programs for revision, repeal and co5 ordination;

6 (F) evaluate performance standards and

7 evaluation criteria for eligible Federal financial

8 assistance programs, and make specific rec9 ommendations to agencies regarding how to re10 vise such standards and criteria in order to es11 tablish specific performance and outcome meas12 ures upon which the success of such programs

13 and the success of the plan may be compared

14 and evaluated; and

15 (G) designate a Federal agency to be pri16 marily responsible for the oversight, monitoring,

17 and evaluation of the implementation of a plan.

18 (2) QUALIFICATIONS FOR STATES.—Of the 6

19 States selected for participation under paragraph 1:

20 (A) 3 States shall each have a population

21 of 3,500,000 or more as determined under the

22 most recent decennial census; and

23 (B) 3 States shall each have a population

24 of 3,500,000 or less as determined under the

25 most recent decennial census.
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1 (d) COORDINATION AND ASSISTANCE.—The Director,

2 in consultation with the Board, shall coordinate and assist

3 Federal agencies in creating—

4 (1) a uniform application to be used to apply

5 for assistance from eligible Federal financial assist6 ance programs;

7 (2) a release form to be used by grantees to fa8 cilitate, where appropriate and otherwise lawful, the

9 sharing of information across eligible Federal finan10 cial assistance programs; and

11 (3) a system wherein an organization or consor12 tium of organizations may use one proposal to apply

13 for funding from multiple eligible Federal financial

14 assistance programs.

15 (e) DETAILS AND ASSIGNMENTS TO BOARD.—At the

16 request of the Board and with the approval of the appro17 priate Federal agency, staff of the agency may be detailed

18 or assigned to the Board on a nonreimbursable basis.

19 (f) INTERAGENCY FINANCING.—Notwithstanding any

20 other law, interagency financing is authorized to carry out

21 the purposes of this Act.

22 (g) JUDICIAL REVIEW.—The actions of the Board

23 shall not be subject to judicial review.
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1 SEC. 6. APPLICATION FOR APPROVAL OF FLEXIBILITY

2 PLAN.

3 (a) IN GENERAL.—An eligible applicant may submit

4 to the Board in accordance with this section an application

5 for approval of a flexibility plan.

6 (b) CONTENTS OF APPLICATION.—An application

7 submitted under this section shall include—

8 (1) a proposed flexibility plan that complies

9 with subsection (c);

10 (2) written certification by the chief executive

11 of the applicant, and such additional assurances as

12 may be required by the Board, that—

13 (A) the applicant has the ability, authority,

14 and resources to implement the proposed plan,

15 throughout the geographic area in which the

16 proposed plan is intended to apply;

17 (B) amounts are available from non-Fed18 eral sources to pay the non-Federal share of all

19 eligible Federal financial assistance programs

20 included in the proposed plan; and

21 (C) the flexibility plan prohibits the inte22 gration or combination of program funds across

23 existing Federal financial assistance programs

24 which do not have similar goals and purposes;

25 (3) written certification that each entity with

26 legal authority over a Federal financial assistance
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1 program included in the plan has consented to the

2 terms of the plan;

3 (4) all comments on the proposed plan submit4 ted under subsection (d) by a Governor, affected

5 State agency, State legislative official, or a chief ex6 ecutive of a local or tribal government that would be

7 directly affected by implementation of the proposed

8 plan, and the applicant’s responses to those com9 ments;

10 (5) written documentation that the eligible ap11 plicant informed the affected community of the con12 tents of the plan, made the plan available for public

13 inspection for a reasonable period of time and gave

14 the public and the affected population the oppor15 tunity to comment upon the plan, including at least

16 one public hearing involving agencies, qualified orga17 nizations, eligible intended beneficiaries of the plan,

18 and others directly affected by the plan;

19 (6) the public comments, which shall include

20 the comments of the affected population, received on

21 the plan and the applicant’s responses to the signifi22 cant comments; and

23 (7) other relevant information the Board may

24 require to review or approve the proposed plan.
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1 (c) CONTENTS OF PLAN.—A flexibility plan submit2 ted by an eligible applicant under this section shall in3 clude—

4 (1) the geographic area and timeframe to which

5 the plan applies and the rationale for selecting the

6 area and timeframe;

7 (2) the particular groups of individuals and

8 subgroups of the targeted population, by service

9 needs, economic circumstances, or other defining

10 factors, who currently receive services and benefits

11 under the eligible Federal financial assistance pro12 grams included in the plan and the particular groups

13 of individuals, by service needs, economic cir14 cumstances, or other defining factors who would re15 ceive services and benefits under the plan;

16 (3) the specific goals and measurable perform17 ance criteria that demonstrate how the plan is ex18 pected to improve the delivery and effectiveness of

19 services to the targeted population, including—

20 (A) a description of how performance shall

21 be measured under the plan when compared to

22 the current performance of the eligible Federal

23 financial assistance programs included in the

24 plan; and
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1 (B) a system for the comprehensive evalua2 tion of the impact of the plan on individuals

3 who receive services and benefits in the commu4 nity affected by the plan, that shall include—

5 (i) a list of goals to improve the com6 munity and the lives of its citizens in the

7 geographic area covered by the plan;

8 (ii) a list of goals identified by the

9 State in which the plan is to be imple10 mented, if such goals have been established

11 by the State; and

12 (iii) a description of how the plan

13 will—

14 (I) attain the goals listed in

15 clauses (i) and (ii);

16 (II) measure performance;

17 (III) collect and maintain data

18 including, where appropriate, data

19 measuring the impact of the plan on

20 those subgroups identified in section

21 6(c)(2); and

22 (IV) publicly disseminate data

23 collected under III within the geo24 graphic area covered by the plan;
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1 (4) the eligible Federal financial assistance pro2 grams included in the plan and the specific services

3 and benefits to be provided under the plan under

4 such programs, including—

5 (A) criteria for determining eligibility for

6 services and benefits under the plan;

7 (B) the services and benefits available

8 under the plan;

9 (C) the amounts and form (such as cash,

10 in-kind contributions, or financial instruments)

11 of non-service benefits; and

12 (D) any other descriptive information the

13 Board considers necessary to approve the plan;

14 (5) a description of the goals and purposes of

15 each Federal financial assistance program included

16 in the plan and how the goals and purposes of such

17 programs shall more effectively be met at the State,

18 local and tribal level;

19 (6) a general description of how the plan appro20 priately addresses any effect that administration of

21 each eligible Federal financial assistance program

22 included in the plan would have on the administra23 tion of programs not included in the plan;

24 (7) a description of how the flexibility plan will

25 adequately achieve the purposes of this Act;
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1 (8) except for the requirements described under

2 section 7(f)(3), any Federal statutory or regulatory

3 requirement of an eligible Federal financial assist4 ance program included in the plan, the waiver of

5 which is necessary to implement the plan, and the

6 detailed justification for the waiver request;

7 (9) any State, local, or tribal statutory, regu8 latory, or other requirement, the waiver of which is

9 necessary to implement the plan, and an indication

10 of commitment of the appropriate State, local, or

11 tribal governments to grant such waivers;

12 (10) a description of the Federal fiscal control

13 and related accountability procedures to be followed

14 under the flexibility plan and, as necessary, an ex15 planation of how such procedures will not diminish

16 existing Federal requirements;

17 (11) a description of the sources and amounts

18 of all non-Federal funds that are required to carry

19 out eligible Federal financial assistance programs in20 cluded in the plan;

21 (12) verification that Federal funds made avail22 able under the plan will not supplant non-Federal

23 funds for existing services and activities that pro24 mote the goals of the plan;
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1 (13) verification that none of the Federal funds

2 under the plan would be used to—

3 (A) meet maintenance of effort require4 ments of such an activity; or

5 (B) meet State, local, or tribal matching

6 shares; and

7 (14) any other relevant information the Board

8 may require to approve the plan.

9 (d) PROCEDURE FOR APPLYING.—

10 (1) SUBMISSION TO AFFECTED STATE AND

11 LOCAL GOVERNMENTS.—An eligible applicant shall

12 submit an application for approval of a proposed

13 flexibility plan to each State, local and tribal govern14 ment and affected State agency that the applicant

15 deems to be directly affected by the plan, at least 60

16 days before submitting the application to the Board.

17 (2) REVIEW BY AFFECTED GOVERNMENT.—The

18 Governor, affected State agency head, State legisla19 tive official, and the chief executive officer of a local

20 government that receives an application submitted

21 under paragraph (1) may each, by no later than 60

22 days after the date of that receipt—

23 (A) prepare comments on the proposed

24 flexibility plan included in the application;
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1 (B) describe and make commitments to

2 waive any State or local laws for other require3 ments which are necessary for successful imple4 mentation of the proposed plan; and

5 (C) submit the comments and commit6 ments to the eligible applicant.

7 (3) SUBMITTAL TO BOARD.—Applications for

8 approval of a flexibility plan shall only be submitted

9 to the Board between—

10 (A) October 1, 1997 and March 31, 1998;

11 or

12 (B) October 1, 1998 and March 31, 1999.

13 (4) ACTION BY AFFECTED GOVERNMENT.—If

14 the Governor, affected State agency head, State leg15 islative official or the chief executive officer of a

16 local government—

17 (A) fails to act on or otherwise endorse a

18 plan application within 60 days after receiving

19 an application under paragraph (1);

20 (B) does not make and submit to the eligi21 ble applicant the commitments described in

22 paragraphs (2) (A) and (B); or

23 (C) disagrees with all or part of the pro24 posed flexibility plan; the eligible applicant may

25 submit the application to the Board if the appli-
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1 cation is amended as necessary for the success2 ful implementation of the proposed plan without

3 the commitment made under paragraph (2)(B),

4 including by adding an updated description of

5 the ability of the proposed flexibility plan to

6 meet plan goals and satisfy performance cri7 teria in the absence of statutory and regulatory

8 waivers and financial and technical support

9 from the State or local government.

10 (e) TRIBAL SOVEREIGNTY.—Nothing under this Act

11 shall be construed to affect, or otherwise alter, the sov12 ereign relationship between tribal governments and the

13 Federal Government.

14 (f) ELIGIBILITY FOR OTHER ASSISTANCE.—Dis15 approval by the Board of a flexibility plan submitted by

16 an eligible applicant under this Act shall not affect the

17 eligibility of the applicant for assistance under any Fed18 eral program.

19 (g) STATE, LOCAL, OR TRIBAL AUTHORITY.—Noth20 ing in this Act shall be construed to grant the Board, Fed21 eral agency, or any eligible applicant authority to waive

22 or otherwise preempt—

23 (1) any State, local, or tribal law or regulation

24 including the legal authority under State law of any

25 affected State agency, State entity, or public official
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1 over programs that are under the jurisdiction of the

2 agency, entity or official; or

3 (2) the existing authority of a State, State af4 fected agency, local, or tribal government or quali5 fied organization or qualified consortium with re6 spect to an eligible Federal financial assistance pro7 gram included in the plan unless such entity has

8 consented to the terms of the plan.

9 SEC. 7. REVIEW AND APPROVAL OF FLEXIBILITY PLANS

10 AND WAIVER REQUESTS.

11 (a) REVIEW OF APPLICATIONS.—Upon receipt of an

12 application for approval of a proposed flexibility plan, the

13 Board shall notify the eligible applicant as to whether or

14 not the plan is complete. If the Board determines a plan

15 is complete, the Board shall—

16 (1) establish procedures for consultation with

17 the applicant and other interested parties during the

18 review process;

19 (2) publish notice of the application for ap20 proval in the Federal Register and make available

21 the contents to any interested party upon written re22 quest;

23 (3) if appropriate, coordinate public hearings on

24 the plan by either the Board or the appropriate Fed25 eral agency;
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1 (4) approve or disapprove plans submitted

2 under—

3 (i) section 6(d)(3)(A) no later than July

4 31, 1998; or

5 (ii) section 6(d)(3)(B) no later than July

6 31, 1999;

7 (5) in the case of any disapproval of a plan, in8 clude written justification of the reasons for dis9 approval in the notice of disapproval sent to the ap10 plicant;

11 (6) publicly announce and forward to Congress

12 on July 31, 1998 and July 31, 1999, the list of ap13 proved flexibility plans, including an identification of

14 approved plans that request statutory or regulatory

15 waivers and the identification of such requested

16 waivers.

17 (b) APPROVAL.—

18 (1) IN GENERAL.—The Board may approve a

19 flexibility plan for which an application is submitted

20 by an eligible applicant under this Act, if the Board

21 determines that—

22 (A) the contents of the application for ap23 proval of the plan comply with the requirements

24 of this Act; and
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1 (B) the contents of the flexibility plan indi2 cate that the plan will effectively achieve the

3 purposes of this Act described in section 3 by

4 adhering to the conditions described in sections

5 6 and 7.

6 (2) RESTRICTION.—(A) The Board may ap7 prove no more than 30 plans; and

8 (B) only three approved plans may be submit9 ted by state applicants.

10 (3) REQUIREMENT TO DISAPPROVE PLAN.—The

11 Board must disapprove a flexibility plan if the Board

12 determines that—

13 (A) implementation of the plan would re14 sult in any increase in the total amount of obli15 gations or outlays of discretionary appropria16 tions or direct spending under Federal financial

17 assistance programs, over the amounts of such

18 obligations and outlays that would occur under

19 those programs without implementation of the

20 plan; or

21 (B) the flexibility plan fails to comply with

22 paragraph (1).

23 (4) SPECIFICATION OF PERIOD OF EFFECTIVE24 NESS.—In approving any flexibility plan, the Board

25 shall specify the period during which the plan is ef-
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1 fective, which in no case shall be greater than 5

2 years from the date of approval.

3 (c) MEMORANDA OF UNDERSTANDING REQUIRED.—

4 (1) IN GENERAL.—An approved flexibility plan

5 may not take effect until the Board receives a signed

6 memorandum of understanding agreed to by the eli7 gible applicant that would receive Federal financial

8 assistance administered under the flexibility plan

9 and by each affected Federal agency.

10 (2) CONTENTS.—A memorandum of under11 standing under this subsection shall specify all un12 derstandings that have been reached by the affected

13 Federal agencies and the eligible applicant. The

14 memorandum shall include understandings with re15 spect to—

16 (A) the conditions described in sections 6

17 and 7;

18 (B) the effective dates of all State, local or

19 tribal government waivers;

20 (C) technical or special assistance being

21 provided to the eligible applicant;

22 (D) the effective date and timeframe of the

23 plan and each Federal waiver approved in the

24 plan; and
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1 (E)(i) the total amount of Federal funds

2 that will be provided as services and benefits

3 under or used to administer eligible Federal fi4 nancial assistance programs included in the

5 plan; or

6 (ii) a mechanism for determining that

7 amount, including specification of the total

8 amount of Federal funds that will be provided

9 or used under each eligible Federal financial as10 sistance program included in the plan.

11 (3) CONDITION FOR APPROVAL OF WAIVER RE12 QUEST.—Prior to entrance into the memorandum

13 with an eligible applicant, the affected federal agen14 cies may approve a waiver if it is consistent with the

15 goals and purposes of the eligible federal financial

16 assistance program included in the plan.

17 (d) LIMITATION ON CONFIDENTIALITY REQUIRE18 MENTS.—The Board may not, as a condition of approval

19 of a flexibility plan or with respect to the implementation

20 of an approved flexibility plan, establish any confidential21 ity requirement that would—

22 (1) impede the exchange of information needed

23 for the design or provision of services and benefits

24 under the plans; or

25 (2) conflict with law.
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1 (e) LIMITATION ON THE USE OF FUNDS.—The

2 Board may not approve any plan that includes funds

3 under an eligible federal financial assistance program to—

4 (1) support tuition vouchers for children to at5 tend private preschool, elementary or secondary

6 schools, including before and after school programs;

7 or

8 (2) otherwise pay their cost to attend such

9 schools.

10 (f) WAIVERS OF FEDERAL REQUIREMENTS.—

11 (1) IN GENERAL.—Notwithstanding any other

12 law and subject to the provisions of this Act, includ13 ing paragraphs (2) and (3), affected Federal agen14 cies may waive, for a period of time not to exceed

15 5 years from the date the Board receives a signed

16 memorandum of understanding, any statutory or

17 regulatory requirement of an eligible Federal assist18 ance program include in an approved flexibility plan

19 of an eligible applicant if that waiver is—

20 (A) necessary for implementation of the

21 flexibility plan;

22 (B) not disapproved by the Board; and

23 (C) necessary to effectively achieve the

24 purposes of this Act described in section 3 by
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1 adhering to the conditions described in sections

2 6 and 7.

3 (2) EFFECTIVE PERIOD OF WAIVER.—A waiver

4 granted under this section shall terminate on the

5 earlier of—

6 (A) the expiration of a period specified by

7 the affected Federal agency not to exceed five

8 years from the date the Board receives the

9 signed memorandum of understanding; or

10 (B) any date on which the flexibility plan

11 for which the waiver is granted ceases to be ef12 fective;

13 (3) RESTRICTION ON WAIVER AUTHORITY.—An

14 affected Federal agency may not grant a wavier for

15 a statutory or regulatory requirement of an eligible

16 Federal financial assistance program requested

17 under this section that—

18 (A) may be waived under another provision

19 of law except in accordance with the require20 ments and limitations imposed by that other

21 provision of law;

22 (B) enforces statutory or constitutional

23 rights of individuals including the right to equal

24 access and opportunity in housing and edu25 cation, including any requirement under the in-
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1 dividuals with Disabilities Education Act (20

2 U.S.C. 1400 et seq);

3 (C) enforces any civil rights that prohibit

4 discrimination on the basis of race, color, reli5 gion, sex, national origin, age, handicap, or dis6 ability;

7 (D) protects public health and safety, the

8 environment, labor standards, worker rights,

9 health and pension benefits or worker health

10 and safety;

11 (E) provides for a maintenance of effort,

12 matching share or prohibition on supplanting;

13 (F) grants any person a cause of action; or

14 (G) permits, requires or limits the partici15 pation of private schools, private school chil16 dren, teachers or personnel or religious organi17 zations.

18 SEC. 8. IMPLEMENTATION, AMENDING AND TERMINATION

19 OF APPROVED FLEXIBILITY PLANS.

20 (a) IMPLEMENTATION.—

21 (1) The Board, in consultation with the Direc22 tor, shall issue guidance to implement this Act with23 in 180 days after the date of enactment of this Act.

24 (2) Notwithstanding any other law, any service

25 or benefit that is provided under an eligible Federal
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1 financial assistance program included in an approved

2 flexibility plan shall be paid and administered in the

3 manner specified in the approved flexibility plan.

4 (3) The authority provided under this Act to

5 waive provisions of grant agreements may be exer6 cised only as long as the funds provided for the

7 grant program in question are available for obliga8 tion by the Federal Government.

9 (b) AMENDING OF FLEXIBILITY PLAN.—

10 (1) In the event that an eligible applicant—

11 (A) desires and amendment to an approved

12 flexibility plan in order to better meet the pur13 poses of this Act; or

14 (B) requires an amendment to ensure con15 tinued implementation of an approved flexibility

16 plan, the applicant shall—

17 (i) submit the proposed amendment to

18 the Board for review and approval; and

19 (ii) upon approval, enter into a revised

20 memorandum of understanding with the

21 affected Federal agency.

22 (2) Approval by the Board and, when appro23 priate, affected Federal agency, shall be based upon

24 the same conditions required for approval of a flexi25 bility plan.
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1 (c) TERMINATION OF PLAN.—

2 (1) TERMINATION OF PLAN BY BOARD.—

3 (A) IN GENERAL.—The Board shall termi4 nate an approved flexibility plan, if, after con5 sultation with the affected Federal agencies, the

6 Board determines that—

7 (i) the applicant of the approved flexi8 bility plan is unable to meet the commit9 ments under this Act; or

10 (ii) audit or oversight activities deter11 mine there has been fraud or abuse involv12 ing Federal funds under the plan.

13 (B) TRANSITION PERIOD.—In terminating

14 an approved flexibility plan under this para15 graph, the Board shall allow a reasonable pe16 riod of time for appropriate Federal agencies

17 and eligible applicants to resume administration

18 of Federal programs that are eligible Federal fi19 nancial assistance programs included in the

20 plan.

21 (2) REVOCATION OF WAIVER.—

22 (A) The Board may recommend that an af23 fected Federal agency, and an affected Federal

24 agency may, revoke a waiver under section 7(f)
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1 if the applicant of the approved flexibility plan

2 fails to—

3 (i) comply with the requirements of

4 the plan;

5 (ii) make acceptable progress towards

6 achieving the goals and performance cri7 teria set forth in the plan; or

8 (iii) use funds in accordance with the

9 plan.

10 (B) Affected Federal agencies shall revoke

11 all waivers issued under section 7(f) for a flexi12 bility plan if the Board terminates the plan.

13 (C) EXPLANATION REQUIRED.—In the

14 case of termination of a plan or revocation of

15 a waiver, as appropriate, the Board or affected

16 Federal agencies shall provide for the former el17 igible applicant a written justification of the

18 reasons for termination or revocation.

19 SEC. 9. EVALUATIONS AND REPORTS.

20 (a) APPROVED APPLICANTS.—

21 (1) IN GENERAL.—An applicant of an approved

22 flexibility plan, in accordance with guidance issued

23 by the Board, shall—
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1 (A) submit any reports on and cooperate

2 in any audits of the implementation of its ap3 proved flexibility plan; and

4 (B) monitor the effect implementation of

5 the plan has had on—

6 (i) individuals and the specific sub7 groups identified in section 6(c)(2) who re8 ceive services and benefits under the plan;

9 (ii) communities in which those indi10 viduals live;

11 (iii) costs of administering and provid12 ing assistance under eligible Federal finan13 cial assistance programs included in the

14 plan; and

15 (iv) performance of the eligible Fed16 eral financial assistance programs included

17 in the plan compared to the performance

18 of such programs prior to implementation

19 of the plan.

20 (2) INITIAL 1-YEAR REPORT.—No later than 90

21 days after the end of the 1-year period beginning on

22 the date the plan takes effect, and annually there23 after, the approved applicant, respectively, shall sub24 mit to the Board a report on the principal activities,

25 achievements, and shortcomings under the plan dur-
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1 ing the period covered by the report, comparing

2 those achievements and shortcomings to the goals

3 and performance criteria included in the plan under

4 section 6(c)(3).

5 (3) FINAL REPORT.—No later than 120 days

6 after the end of the effective period of an approved

7 flexibility plan, the approved applicant shall submit

8 to the Board a final report on implementation of the

9 plan, including a full evaluation of the successes and

10 shortcomings of the plan and the effects of that im11 plementation on individuals who receive benefits

12 under the eligible Federal financial assistance pro13 grams under the plan.

14 (b) BOARD.—No later than two years after the date

15 of enactment of this Act, and annually thereafter, the

16 Board shall submit a report to the President and the Con17 gress on the Federal statutory and regulatory require18 ments of eligible Federal financial assistance programs

19 that are most frequently waived under 7(f) with respect

20 to approved flexibility plans. The President shall review

21 the report and identify those statutory and regulatory re22 quirements that the President determines should be

23 amended or repealed.

24 (c) DIRECTOR.—Two years after this Act goes into

25 effect, and no less than 60 days after repeal of this Act,
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1 the Director shall report on its progress in achieving the

2 functions outlined in section 5(d).

3 (d) GENERAL ACCOUNTING OFFICE.—

4 (1) Beginning on the date of enactment of this

5 Act, the General Accounting Office shall—

6 (A) evaluate the effectiveness of eligible

7 Federal financial assistance programs included

8 in flexibility plans approved pursuant to this

9 Act compared with such programs not included

10 in a flexibility plan;

11 (B) establish and maintain, through the ef12 fective date of this statute, a program for the

13 ongoing collection of data and analysis of each

14 eligible Federal financial assistance program in15 cluded in an approved flexibility plan.

16 (2) No later than January 1, 2005, the General

17 Accounting Office shall submit a report to Congress

18 and the President that describes and evaluates the

19 results of the evaluations conducted pursuant to

20 paragraph (1) and any recommendations on how to

21 improve flexibility in the administration of eligible

22 Federal financial assistance programs.

23 (e) ADVISORY COMMISSION ON INTERGOVERN24 MENTAL RELATIONS.—No later than January 1, 2005,

25 the Advisory Commission on Intergovernmental Relations
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1 shall submit a report to the Congress and President

2 that—

3 (1) describes the extent to which this Act has

4 improved the ability of State, local and tribal gov5 ernments, particularly smaller units of government,

6 to make more effective use of two or more Federal

7 financial assistance programs included in a flexibility

8 plan;

9 (2) evaluates if or how the flexibility provided

10 by this Act has improved the system of Federal fi11 nancial assistance to State, and tribal governments,

12 and enabled governments and community organiza13 tions to work together more effectively; and

14 (3) includes recommendations with respect to

15 flexibility for State, local and tribal governments.

16 SEC. 10. REPEAL.

17 This Act is repealed on January 1, 2005.

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