105TH CONGRESS

2D SESSION S. 2206

AMENDMENT
In the House of Representatives, U. S.,

September 14, 1998.

Resolved, That the bill from the Senate (S. 2206) entitled ‘‘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’’, do pass with the

following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Human Services Reauthorization Act of 1998’’.

4 (b) TABLE OF CONTENTS.—The table of contents of this

5 Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—AMENDMENTS TO THE HEAD START ACT

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.
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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. Family literacy services.

Sec. 117. Research and evaluation.

Sec. 118. Reports.

Sec. 119. Repeal of consultation requirement.

Sec. 120. Repeal of Head Start Transition Project Act.

Sec. 121. Effective date; application of amendments.

TITLE II—AMENDMENTS TO THE COMMUNITY SERVICES BLOCK

GRANT ACT

Sec. 201. Short title.

Sec. 202. Reauthorization.

Sec. 203. Related amendments.

Sec. 204. Assets for independence.

Sec. 205. Effective date; application of amendments.

TITLE III—AMENDMENTS TO THE LOW-INCOME HOME ENERGY

ASSISTANCE ACT OF 1981

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.

1 TITLE I—AMENDMENTS TO THE

2 HEAD START ACT

3 SEC. 101. SHORT TITLE.

4 This title may be cited as the ‘‘Head Start Amend5 ments Act of 1998’’.

6 SEC. 102. STATEMENT OF PURPOSE.

7 Section 636 of the Head Start Act (42 U.S.C. 9831)

8 is amended to read as follows:
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1 ‘‘SEC. 636. STATEMENT OF PURPOSE.

2 ‘‘It is the purpose of this subchapter to promote school

3 readiness by enhancing the social and cognitive develop4 ment of low-income children through the provision, to low5 income children and their families, of health, educational,

6 nutritional, social, and other services that are determined,

7 based on family needs assessments, to be necessary.’’.

8 SEC. 103. DEFINITIONS.

9 Section 637 of the Head Start Act (42 U.S.C. 9832)

10 is amended—

11 (1) by redesignating paragraphs (3) through (14)

12 as paragraphs (4) through (15), respectively;

13 (2) in paragraph (2)—

14 (i) by striking ‘‘, and the Commonwealth of

15 the Northern Mariana Islands’’;

16 (ii) by inserting ‘‘of the United States, and

17 the Commonwealth of the Northern Mariana Is18 lands, but for fiscal years ending before October

19 1, 2001, also means’’ after ‘‘Virgin Islands’’; and

20 (iii) by inserting ‘‘and’’ after ‘‘Marshall Is21 lands’’;

22 (3) by inserting after paragraph (2) the follow23 ing:

24 ‘‘(3) The term ‘child with a disability’ means—
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1 ‘‘(A) a child with a disability, as defined in

2 section 602(3) of the Individuals with Disabil3 ities Education Act; and

4 ‘‘(B) an infant or toddler with a disability,

5 as defined in section 632(5) of such Act.’’;

6 (4) by striking paragraph (5) (as redesignated in

7 paragraph (1)) and inserting the following:

8 ‘‘(5) The term ‘family literacy services’ means

9 services that—

10 ‘‘(A) are provided to participants who re11 ceive the services on a voluntary basis;

12 ‘‘(B) are of sufficient intensity, and of suffi13 cient duration, to make sustainable changes in a

14 family (such as eliminating or reducing depend15 ence on income-based public assistance); and

16 ‘‘(C) integrate each of—

17 ‘‘(i) interactive literacy activities be18 tween parents and their children;

19 ‘‘(ii) training for parents on being

20 partners with their children in learning;

21 ‘‘(iii) parent literacy training, includ22 ing training that contributes to economic

23 self-sufficiency; and
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1 ‘‘(iv) appropriate instruction for chil2 dren of parents receiving the parent literacy

3 training.’’;

4 (5) in paragraph (7) (as redesignated in para5 graph (1)), by adding at the end the following: ‘‘Noth6 ing in this paragraph shall be construed to require an

7 agency to provide services to a child who has not

8 reached the age of compulsory school attendance for

9 more than the number of hours per day permitted by

10 State law for the provision of services to such a

11 child.’’;

12 (6) by striking paragraph (13) (as redesignated

13 in paragraph (1)) and inserting the following:

14 ‘‘(13) The term ‘migrant or seasonal Head Start

15 program’ means—

16 ‘‘(A) with respect to services for migrant

17 farmworkers, a Head Start program that serves

18 families who are engaged in agricultural labor

19 and who have changed their residence from 1 ge20 ographic location to another in the preceding 2-

21 year period; and

22 ‘‘(B) with respect to services for seasonal

23 farmworkers, a Head Start program that serves

24 families who are engaged primarily in seasonal

25 agricultural labor and who have not changed
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1 their residence to another geographic location in

2 the preceding 2-year period.’’; and

3 (7) by adding at the end the following:

4 ‘‘(16) The term ‘reliable and replicable’, used

5 with respect to research, means an objective, valid,

6 scientific study that—

7 ‘‘(A) includes a rigorously defined sample of

8 subjects, that is sufficiently large and representa9 tive to support the general conclusions of the

10 study;

11 ‘‘(B) relies on measurements that meet es12 tablished standards of reliability and validity;

13 ‘‘(C) is subjected to peer review before the

14 results of the study are published; and

15 ‘‘(D) discovers effective strategies for en16 hancing the development and skills of children.’’.

17 SEC. 104. FINANCIAL ASSISTANCE FOR HEAD START PRO18 GRAMS.

19 Section 638(1) of the Head Start Act (42 U.S.C.

20 9833(1)) is amended—

21 (1) by striking ‘‘aid the’’ and inserting ‘‘enable

22 the’’; and

23 (2) by striking the semicolon and inserting ‘‘and

24 attain school readiness;’’.
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1 SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

2 Section 639 of the Head Start Act (42 U.S.C. 9834)

3 is amended—

4 (1) in subsection (a)—

5 (A) by inserting ‘‘$4,660,000,000 for fiscal

6 year 1999 and’’ after ‘‘subchapter’’; and

7 (B) by striking ‘‘1995 through 1998’’ and

8 inserting ‘‘2000 through 2003’’; and

9 (2) in subsection (b), by striking paragraphs (1)

10 and (2) and inserting the following:

11 ‘‘(1) for each of the fiscal years 1999 through

12 2003, not more than $35,000,000 and not less than

13 the aggregate amount made available to carry out sec14 tion 642(d) of this Act and the Head Start Transition

15 Project Act (42 U.S.C. 9855–9855g) for fiscal year

16 1998, to carry out activities authorized under section

17 642A;

18 ‘‘(2) not more than $5,000,000 for each of the fis19 cal years 1999 through 2003 to carry out impact

20 studies under section 649(g);

21 ‘‘(3) not more than $12,000,000 for fiscal year

22 1999, and such sums as may be necessary for each of

23 the fiscal years 2000 through 2003, to carry out other

24 research, demonstration, and evaluation activities, in25 cluding longitudinal studies, under section 649; and
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1 ‘‘(4) not less than $5,000,000 for each of the fis2 cal years 1999 through 2003, to carry out activities

3 authorized under section 648B.’’.

4 SEC. 106. ALLOTMENT OF FUNDS.

5 (a) ALLOTMENTS.—Section 640(a) of the Head Start

6 Act (42 U.S.C. 9835(a)) is amended—

7 (1) in paragraph (2)—

8 (A) in subparagraph (A)—

9 (i) by striking ‘‘and migrant’’ the 1st

10 place it appears and all that follows

11 through ‘‘handicapped children’’, and in12 serting ‘‘Head Start programs and services

13 for children with disabilities and migrant

14 or seasonal Head Start programs’’; and

15 (ii) by striking ‘‘and migrant’’ each

16 other place it appears and inserting ‘‘Head

17 Start programs and by migrant or sea18 sonal’’; and

19 (iii) by striking ‘‘1994’’ and inserting

20 ‘‘1998’’;

21 (B) in subparagraph (B) by striking ‘‘(B)

22 payments’’ and all that follows through ‘‘Virgin

23 Islands’’ and inserting the following:

24 ‘‘(B) payments, subject to paragraph (7)—
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1 ‘‘(i) to Guam, American Samoa, the Com2 monwealth of the Northern Mariana Islands, and

3 the Virgin Islands of the United States; and

4 ‘‘(ii) for fiscal years ending before October

5 1, 2001, to the Federated States of Micronesia,

6 the Republic of the Marshall Islands, and

7 Palau;’’;

8 (C) in subparagraph (C), by striking ‘‘and’’

9 at the end;

10 (D) in subparagraph (D), by striking ‘‘re11 lated to the development and implementation of

12 quality improvement plans under section

13 641A(d)(2)).’’ and inserting ‘‘carried out under

14 paragraph (1), (2), or (3) of section 641A(d) re15 lating to correcting deficiencies and conducting

16 proceedings to terminate the designation of Head

17 Start agencies); and’’;

18 (E) by inserting after subparagraph (D) the

19 following:

20 ‘‘(E) payments for research and evaluation ac21 tivities under section 649.’’; and

22 (F) by adding at the end the following: ‘‘In

23 carrying out this subchapter, the Secretary shall

24 continue the administrative arrangement respon25 sible for meeting the needs of children of migrant
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1 and seasonal farmworkers and Indian children,

2 and shall ensure that appropriate funding is

3 provided to meet such needs.’’;

4 (2) in paragraph (3)—

5 (A) in subparagraph (A)(i) by striking

6 ‘‘equal’’ and all that follows through ‘‘activities’’

7 and inserting ‘‘subject to subsection (m)’’;

8 (B) in subparagraph (B)—

9 (i) in clause (ii)—

10 (I) by striking ‘‘adequate quali11 fied staff’’ and inserting ‘‘adequate

12 numbers of qualified staff’’; and

13 (II) by inserting ‘‘and children

14 with disabilities’’ before ‘‘, when’’;

15 (ii) in clause (iv) by inserting ‘‘and to

16 encourage the staff to continually improve

17 their skills and expertise by informing staff

18 of the availability of State and Federal loan

19 forgiveness programs for professional devel20 opment’’ before the period at the end;

21 (iii) in clause (v) by inserting ‘‘and

22 collaboration efforts for such programs’’ be23 fore the period at the end; and

24 (iv) by amending clause (vi) to read as

25 follows:
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1 ‘‘(vi) Ensuring that such programs have ade2 quate numbers of qualified staff that can promote lan3 guage skills and literacy growth of children and that

4 provide children with a variety of skills that have

5 been identified, through research that is reliable and

6 replicable, as predictive of later reading achieve7 ment.’’; and

8 (C) in subparagraph (C)—

9 (i) in clause (i)(I)—

10 (I) by striking ‘‘of staff’’ and in11 serting ‘‘of classroom teachers and

12 other staff’’; and

13 (II) by striking ‘‘such staff’’ and

14 inserting ‘‘qualified staff, including re15 cruitment and retention pursuant to

16 achieving the requirements set forth in

17 section 648A(a)’’;

18 (ii) by redesignating subclause (II) as

19 subclause (III);

20 (iii) by inserting after subclause (I) the

21 following:

22 ‘‘(II) Preferences in awarding salary increases,

23 in excess of cost of living allowances, shall be granted

24 to classroom teachers and staff who obtain additional
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1 training or education related to their responsibilities

2 as employees of a Head Start program.’’;

3 (iv) by amending clause (ii) to read as

4 follows:

5 ‘‘(ii) Of the amount remaining after carrying

6 out clause (i), the highest priority shall be placed on

7 training classroom teachers and other staff to meet the

8 education performance standards described in section

9 641A(a)(1)(B), through activities—

10 ‘‘(I) to promote children’s language and lit11 eracy growth, through techniques identified

12 through reliable, replicable research;

13 ‘‘(II) to promote the acquisition of the

14 English language for non-English background

15 children and families;

16 ‘‘(III) to foster children’s school readiness

17 skills through activities described in section

18 648A(a)(1); and

19 ‘‘(IV) to provide training necessary to im20 prove the qualifications of the staff of the Head

21 Start agencies and to support staff training,

22 child counseling, and other services necessary to

23 address the problems of children participating in

24 Head Start programs, including children from

25 dysfunctional families, children who experience
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1 chronic violence in their communities, and chil2 dren who experience substance abuse in their

3 families.’’;

4 (v) by striking clause (v);

5 (vi) by redesignating clause (vi) as

6 clause (v); and

7 (vii) by inserting after clause (v), as so

8 redesignated, the following:

9 ‘‘(vi) To carry out any or all of such activities,

10 but none of such funds may be used for construction

11 or renovation (including nonstructural or minor

12 structural changes).’’;

13 (D) in subparagraph (D)(i)(II) by striking

14 ‘‘and migrant’’ and inserting ‘‘Head Start pro15 grams and by migrant or seasonal’’;

16 (3) in paragraph (4)—

17 (A) in subparagraph (A), by striking

18 ‘‘1981’’ and inserting ‘‘1998’’;

19 (B) by amending subparagraph (B) to read

20 as follows:

21 ‘‘(B) any amount available after all allotments

22 are made under subparagraph (A) for such fiscal year

23 shall be distributed proportionately on the basis of the

24 number of children less than 5 years of age who live
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1 with families whose income is below the poverty

2 line.’’; and

3 (C) by adding at the end the following:

4 ‘‘For each fiscal year the Secretary shall use the most recent

5 data available on the number of children under the age of

6 5, from families below the poverty level that is consistent

7 with that published for counties, by the Department of Com8 merce, unless the Secretary and the Secretary of Commerce

9 determine that use of the updated poverty data would be

10 inappropriate or unreliable. If the Secretary and the Sec11 retary of Commerce determine that some or all of the data

12 referred to in this paragraph are inappropriate or unreli13 able, they shall issue a report setting forth their reasons in

14 detail.’’;

15 (4) in paragraph (5)—

16 (A) in subparagraph (B), by inserting be17 fore the period the following ‘‘and encourage

18 Head Start agencies to actively collaborate with

19 entities involved in State and local planning

20 processes in order to better meet the needs of low21 income children and families’’;

22 (B) in subparagraph (C)—

23 (i) in clause (i)(I), by inserting ‘‘the

24 appropriate regional office of the Adminis-
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1 tration for Children and Families and’’ be2 fore ‘‘agencies’’;

3 (ii) in clause (iii), by striking ‘‘and’’

4 at the end;

5 (iii) in clause (iv)—

6 (I) by striking ‘‘education, and

7 national service activities,’’ and insert8 ing ‘‘and education and community

9 service activities,’’;

10 (II) by striking ‘‘and activities’’

11 and inserting ‘‘activities’’; and

12 (III) by striking the period and

13 inserting ‘‘(including coordination

14 with those State officials who are re15 sponsible for administering part C and

16 section 619 of the Individuals with

17 Disabilities Education Act (20 U.S.C.

18 1431–1445, 1419)), and services for

19 homeless children;’’; and

20 (iv) by adding at the end the following:

21 ‘‘(v) include representatives of the State Head

22 Start Association and local Head Start agencies in

23 unified planning regarding early care and education

24 services at both the State and local levels, including

25 collaborative efforts to plan for the provision of full-
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1 working-day, full-calendar-year early care and edu2 cation services for children;

3 ‘‘(vi) encourage local Head Start agencies to ap4 point a State level representative to speak on behalf

5 of Head Start agencies within the State on collabo6 rative efforts described in subparagraphs (B) and (D),

7 and in clause (v); and

8 ‘‘(vii) encourage Head Start agencies to collabo9 rate with entities involved in State and local plan10 ning processes (including the State lead agency ad11 ministering the financial assistance received under

12 the Child Care and Development Block Grant Act of

13 1990 (42 U.S.C. 9858 et seq.) and the entities provid14 ing resource and referral services in the State) in

15 order to better meet the needs of low-income children

16 and families.’’;

17 (C) by redesignating subparagraph (D) as

18 subparagraph (F); and

19 (D) by inserting after subparagraph (C) the

20 following:

21 ‘‘(D) Following the award of collaboration grants de22 scribed in subparagraph (B), the Secretary shall provide,

23 from the reserved sums, supplemental funding for collabora24 tion grants—
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1 ‘‘(i) to States that develop statewide, regional, or

2 local unified plans for early childhood education and

3 child care that include the participation of Head

4 Start agencies; and

5 ‘‘(ii) to States that engage in other innovative

6 collaborative initiatives, including plans for collabo7 rative training and professional development initia8 tives for child care, early childhood education and

9 Head Start service managers, providers, and staff.

10 ‘‘(E)(i) The Secretary shall—

11 ‘‘(I) review on an ongoing basis evidence of bar12 riers to effective collaboration between Head Start

13 programs and other Federal child care and early

14 childhood education programs and resources;

15 ‘‘(II) develop initiatives, including providing ad16 ditional training and technical assistance and mak17 ing regulatory changes, in necessary cases, to elimi18 nate barriers to the collaboration; and

19 ‘‘(III) develop a mechanism to resolve adminis20 trative and programmatic conflicts between such pro21 grams that would be a barrier to service providers,

22 parents, or children, related to the provision of uni23 fied services in the consolidation of funding for child

24 care services.
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1 ‘‘(ii) In the case of a collaborative activity funded

2 under this subchapter and another provision of law provid3 ing for Federal child care or early childhood education, the

4 use of equipment and nonconsumable supplies purchased

5 with funds made available under this subchapter or such

6 provision shall not be restricted to children enrolled or oth7 erwise participating in the program carried out under that

8 subchapter or provision, during a period in which the activ9 ity is predominantly funded under this subchapter or such

10 provision.’’;

11 (5) by amending paragraph (6) to read as fol12 lows:

13 ‘‘(6)(A) From the amounts reserved and allotted pur14 suant to paragraphs (2) and (4), and except as provided

15 in subparagraph (C)(i), the Secretary shall use for grants

16 for programs described in section 645A(a) a portion of the

17 combined total of such amount equal to—

18 ‘‘(i) 7.5 percent for fiscal year 1999;

19 ‘‘(ii) 8 percent for fiscal year 2000;

20 ‘‘(iii) 8.5 percent for fiscal year 2001;

21 ‘‘(iv) not less than 8.5 and not more than 10

22 percent for fiscal year 2002; and

23 ‘‘(v) not less than 8.5 and not more than 10 per24 cent for fiscal year 2003;
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1 of the amount appropriated pursuant to section 639(a) for

2 the respective fiscal year.

3 ‘‘(B) If the Secretary does not submit to—

4 ‘‘(i) the Committee on Education and the Work5 force and the Committee on Appropriations of the

6 House of Representatives; and

7 ‘‘(ii) to the Committee on Labor and Human Re8 sources and the Committee on Appropriations of the

9 Senate;

10 by January 1, 2001, a report on the results of the Early

11 Head Start impact study currently being conducted by the

12 Secretary, then the amount required to be used in accord13 ance with subparagraph (A) for fiscal years 2002 and 2003

14 shall be 8.5 percent of the amount appropriated pursuant

15 to section 639(a) for the respective fiscal year.

16 ‘‘(C)(i) For any fiscal year for which the Secretary de17 termines that the amount appropriated under section

18 639(a) is not sufficient to permit the Secretary to use the

19 portion described in subparagraph (A) without reducing the

20 number of children served by Head Start programs or nega21 tively impacting the quality of Head Start services, relative

22 to the number of children served and the quality of the serv23 ices during the preceding fiscal year, the Secretary may re24 duce the percentage of funds required to be used as the por25 tion described in subparagraph (A) for the fiscal year for
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1 which the determination is made, but not below the percent2 age required to be so used for the preceding fiscal year.

3 ‘‘(ii) For any fiscal year for which the amount appro4 priated under section 639(a) requires a reduction in the

5 amount made available under this subchapter to Head

6 Start agencies and entities described in section 645A, rel7 ative to the amount made available to the agencies and enti8 ties for the preceding fiscal year, adjusted as described in

9 paragraph (3)(A)(ii), the Secretary shall proportionately

10 reduce—

11 ‘‘(I) the amounts made available to the entities

12 for programs carried out under section 645A; and

13 ‘‘(II) the amounts made available to Head Start

14 agencies for Head Start programs.’’; and

15 (6) by redesignating paragraph (7) as para16 graph (8); and

17 (7) by inserting after paragraph (6) the follow18 ing:

19 ‘‘(7)(A) For purposes of paragraph (2)(A), in de20 termining the need and demand for migrant or sea21 sonal Head Start programs (and services provided

22 through such programs), the Secretary shall consult

23 with appropriate entities, including providers of serv24 ices for migrant or seasonal Head Start programs.

25 The Secretary shall, after taking into consideration
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1 the need and demand for migrant or seasonal Head

2 Start programs (and such services), ensure that there

3 is an adequate level of such services for eligible chil4 dren of migrant farmworkers before approving an in5 crease in the allocation provided for unserved eligible

6 children of seasonal farmworkers. In serving the chil7 dren of seasonal farmworkers, the Secretary shall en8 sure that services provided by migrant or seasonal

9 Head Start programs do not duplicate or overlap

10 with other Head Start services available in the same

11 geographical area.

12 ‘‘(B)(i) Funds available under this subsection for

13 payments to the Federated States of Micronesia, the

14 Republic of the Marshall Islands, and Palau shall be

15 used by the Secretary to make grants on a competi16 tive basis, pursuant to recommendations submitted to

17 the Secretary by the Pacific Region Educational Lab18 oratory of the Department of Education, to the Fed19 erated States of Micronesia, the Republic of the Mar20 shall Islands, Palau, Guam, American Samoa, and

21 the Commonwealth of the Northern Mariana Islands,

22 for the purpose of carrying out Head Start programs

23 in accordance with this subchapter.

24 ‘‘(ii) Not more than 5 percent of such funds may

25 be used by the Secretary to compensate the Pacific
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1 Region Educational Laboratory of the Department of

2 Education for administrative costs incurred in con3 nection with making recommendations under clause

4 (i).

5 ‘‘(iii) Notwithstanding any other provision of

6 law, the Federated States of Micronesia, the Republic

7 of the Marshall Islands, and Palau shall not receive

8 any funds under this subchapter for any fiscal year

9 that begins after September 30, 2001.’’.

10 (b) CHILDREN WITH DISABILITIES.—Section 640(d)

11 of the Head Start Act (42 U.S.C. 9835(d)) is amended—

12 (1) by striking ‘‘1982’’ and inserting ‘‘1999’’;

13 (2) by striking ‘‘(as defined in section 602(a) of

14 the Individuals with Disabilities Education Act)’’;

15 and

16 (3) by adding at the end the following:

17 ‘‘Such policies and procedures shall require Head Start pro18 grams to coordinate programmatic efforts with efforts to

19 implement part C and section 619 of the Individuals with

20 Disabilities Education Act (20 U.S.C 1431–1445, 1419).’’.

21 (c) INCREASED APPROPRIATIONS.—Section 640(g) of

22 the Head Start Act (42 U.S.C. 9835(g)) is amended—

23 (1) in paragraph (1), by inserting at the end the

24 following: ‘‘In awarding funds to serve an increased

25 number of children, the Secretary shall give priority
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1 to those applicants that provide full-working-day,

2 full-calendar year Head Start services through col3 laboration with entities carrying out programs that

4 are in existence on the date of the allocation and with

5 other private, nonprofit agencies. Any such additional

6 funds remaining may be used to make nonstructural

7 and minor structural changes, and to acquire and in8 stall equipment, for the purpose of improving facili9 ties necessary to expand the availability of Head

10 Start programs and to serve an increased number of

11 children.’’;

12 (2) in paragraph (2)—

13 (A) in subparagraph (A), by striking the

14 semicolon and inserting ‘‘, and the performance

15 history of the applicant in providing services

16 under other Federal programs (other than the

17 program carried out under this subchapter);’’;

18 (B) in subparagraph (C), by striking the

19 semicolon and inserting ‘‘, and organizations

20 and public entities serving children with disabil21 ities;’’;

22 (C) in subparagraph (D), by striking the

23 semicolon and inserting ‘‘and the extent to

24 which, and manner in which, the applicant dem25 onstrates the ability to collaborate and partici-
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1 pate with other local community providers of

2 child care or preschool services to provide full3 working-day full-calendar-year services;’’;

4 (D) in subparagraph (E), by striking ‘‘pro5 gram; and’’ and inserting ‘‘or any other early

6 childhood program;’’;

7 (E) in subparagraph (F), by striking the

8 period and inserting a semicolon; and

9 (F) by adding at the end the following:

10 ‘‘(G) the extent to which the applicant proposes

11 to foster partnerships with other service providers in

12 a manner that will enhance the resource capacity of

13 the applicant; and

14 ‘‘(H) the extent to which the applicant, in pro15 viding services, will plan to coordinate with the local

16 educational agency serving the community involved

17 and with schools in which children participating in

18 a Head Start program operated by such agency will

19 enroll following such program, regarding the edu20 cation services provided by such local educational

21 agency.’’;

22 (3) in paragraph (3) by striking ‘‘In’’ and in23 serting ‘‘Subject to subsection (m), in’’; and

24 (4) by adding at the end the following:
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1 ‘‘(4) Notwithstanding subsection (a)(2), after taking

2 into account subsection (a)(1), the Secretary may allocate

3 a portion of the remaining additional funds under sub4 section (a)(2)(A) for the purpose of increasing funds avail5 able for activities described in such subsection.’’.

6 (d) REFERENCES.—Section 640(l) of the Head Start

7 Act (42 U.S.C. 9835(l)) is amended by inserting ‘‘or sea8 sonal’’ after ‘‘migrant’’ each place it appears.

9 (e) RELATIVE AVAILABILITY OF FUNDS FOR QUALITY

10 AND FOR EXPANSION.—Section 640 of the Head Start Act

11 (42 U.S.C. 9835) is amended by adding at the end the fol12 lowing:

13 ‘‘(m)(1) After complying with the requirement in sub14 section (g)(1) relating to maintaining the level of services

15 provided during the previous year, the Secretary shall make

16 the amount (if any) by which the funds appropriated under

17 section 639(a) for a fiscal year exceed the adjusted prior

18 year appropriation (as defined in subsection (a)(3)(ii)),

19 available as follows:

‘‘For Fiscal

Year:

Percent of Amount

Exceeding Adjusted

Prior Year Appropriation To Be

Available for Quality Activities Under

Subsection

(a)(3)(C):

Percent of

Amount Exceeding Adjusted

Prior Year Appropriation To Be

Available for Expansion Activities

Under Subsection

(g):

Percent of Amount

Exceeding Adjusted Prior Year

Appropriation To

Be Available to

Qualifying Head

Start Programs

for Quality and

Expansion Activities Under Subsections (a)(3)(C)

and (g)

1999 65 25 10

2000 65 25 10

2001 45 45 10

2002 45 45 10
26

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‘‘For Fiscal

Year:

Percent of Amount

Exceeding Adjusted

Prior Year Appropriation To Be

Available for Quality Activities Under

Subsection

(a)(3)(C):

Percent of

Amount Exceeding Adjusted

Prior Year Appropriation To Be

Available for Expansion Activities

Under Subsection

(g):

Percent of Amount

Exceeding Adjusted Prior Year

Appropriation To

Be Available to

Qualifying Head

Start Programs

for Quality and

Expansion Activities Under Subsections (a)(3)(C)

and (g)

2003 25 65 10.

1 ‘‘(2) For purposes of paragraph (1), the term ‘qualify2 ing Head Start program’ means a Head Start agency or

3 Head Start program that is—

4 ‘‘(A) in compliance with the quality standards

5 and result-based performance measures applicable

6 under subsections (a) and (b) of section 641A;

7 ‘‘(B) not required under subsection (d) of such

8 section to take a corrective action; and

9 ‘‘(C) making progress toward complying with re10 quirements applicable under section 648A(a)(2).

11 ‘‘(3) Funds required to be made available under this

12 subsection to qualifying Head Start programs shall be made

13 available on the same basis as allotments are determined

14 under subsection (a)(4).’’.

15 (f) CONFORMING AMENDMENT.—Section 644(f)(2) of

16 the Head Start Act (42 U.S.C. 9839(f)(2)) is amended by

17 striking ‘‘640(a)(3)(C)(v)’’ and inserting ‘‘640(g)’’.

18 SEC. 107. DESIGNATION OF HEAD START AGENCIES.

19 Section 641 of the Head Start Act (42 U.S.C. 9836)

20 is amended—
27

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1 (1) in subsection (a) by inserting ‘‘(in consulta2 tion with the chief executive officer of the State in3 volved, if such State expends non-Federal funds to

4 carry out Head Start programs)’’ after ‘‘Secretary’’

5 the last place it appears;

6 (2) in subsection (b) by striking ‘‘area designated

7 by the Bureau of Indian Affairs as near-reservation’’

8 and inserting ‘‘off-reservation area designated by an

9 appropriate tribal government’’;

10 (3) in subsection (c)—

11 (A) in paragraph (1)—

12 (i) by inserting ‘‘, in consultation with

13 the chief executive officer of the State if such

14 State expends non-Federal funds to carry

15 out Head Start programs,’’ after ‘‘shall’’;

16 and

17 (ii) by striking ‘‘makes a finding’’ and

18 all that follows through the period at the

19 end, and inserting the following:

20 ‘‘determines that the agency involved fails to meet program

21 and financial management requirements, performance

22 standards described in section 641A(a)(1), results-based

23 performance measures described in section 641A(b), and

24 other requirements established by the Secretary.’’;
28

•S 2206 EAH

1 (B) in paragraph (2), by inserting ‘‘, in

2 consultation with the chief executive officer of the

3 State if such State expends non-Federal funds to

4 carry out Head Start programs,’’ after ‘‘shall’’;

5 and

6 (C) by aligning the left margin of para7 graphs (2) and (3) with the left margin of para8 graph (1); and

9 (4) in subsection (d)—

10 (A) in the matter preceding paragraph (1),

11 by inserting after the 1st sentence the following:

12 ‘‘In selecting from among qualified applicants for designa13 tion as a Head Start agency, the Secretary shall give prior14 ity to any qualified agency that functioned as a Head Start

15 delegate agency in the community and carried out a Head

16 Start program that the Secretary determines met or exceed17 ed such performance standards and such results-based per18 formance measures.’’;

19 (B) in paragraph (3) by inserting ‘‘and

20 programs under part C and section 619 of the

21 Individuals with Disabilities Education Act (20

22 U.S.C 1431–1445, 1419)’’ after ‘‘(20 U.S.C. 2741

23 et seq.)’’;

24 (C) in paragraph (4)—
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1 (i) in subparagraph (A), by inserting

2 ‘‘(at home and in the center involved where

3 practicable)’’ after ‘‘activities’’;

4 (ii) in subparagraph (D)—

5 (I) in clause (iii) by adding ‘‘or’’

6 at the end;

7 (II) by striking clause (iv); and

8 (III) by redesignating clause (v)

9 as clause (iv);

10 (iii) in subparagraph (E) by striking

11 ‘‘and (D)’’ and inserting ‘‘and (E)’’;

12 (iv) by redesignating subparagraphs

13 (D) and (E) and subparagraphs (E) and

14 (F), respectively; and

15 (v) by inserting after subparagraph

16 (C) the following:

17 ‘‘(D) to offer to parents of participating

18 children substance abuse counseling (either di19 rectly or through referral to local entities), in20 cluding information on drug-exposed infants and

21 fetal alcohol syndrome;’’;

22 (D) by amending paragraph (7) to read as

23 follows:

24 ‘‘(7) the plan of such applicant to meet the needs

25 of non-English background children and their fami-
30

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1 lies, including needs related to the acquisition of the

2 English language;’’;

3 (E) in paragraph (8)—

4 (i) by striking the period at the end

5 and inserting ‘‘; and’’; and

6 (ii) by redesignating such paragraph

7 as paragraph (9);

8 (F) by inserting after paragraph (7) the fol9 lowing:

10 ‘‘(8) the plan of such applicant to meet the needs

11 of children with disabilities;’’; and

12 (G) by adding at the end the following:

13 ‘‘(10) the plan of such applicant to collaborate

14 with other entities carrying out early childhood edu15 cation and child care programs in the community.’’;

16 and

17 (5) by amending subsection (e) to read as fol18 lows:

19 ‘‘(e) If no agency in the community receives priority

20 designation and if there is no qualified applicant in the

21 community, then the Secretary shall designate an agency

22 to carry out the Head Start program in the community

23 on an interim basis until a qualified applicant from the

24 community is so designated.’’.
31

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1 SEC. 108. QUALITY STANDARDS.

2 (a) QUALITY STANDARDS.—Section 641A(a) of the

3 Head Start Act (42 U.S.C. 9836a(a)) is amended—

4 (1) in paragraph (1)—

5 (A) in the matter preceding subparagraph

6 (A), by inserting ‘‘, including minimum levels of

7 overall accomplishment,’’ after ‘‘regulation

8 standards’’;

9 (B) in subparagraph (A), by striking ‘‘edu10 cation,’’;

11 (C) by redesignating subparagraphs (B)

12 through (D) as subparagraphs (C) through (E),

13 respectively; and

14 (D) by inserting after subparagraph (A) the

15 following:

16 ‘‘(B)(i) education performance standards to

17 ensure the school readiness of children partici18 pating in a Head Start program, on completion

19 of the Head Start program and prior to entering

20 school; and

21 ‘‘(ii) additional school readiness perform22 ance standards (based on cognitive learning

23 abilities) to ensure that the children participat24 ing in the program, at a minimum—

25 ‘‘(I) develop phonemic, print, and

26 numeracy awareness;
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1 ‘‘(II) understand and use oral lan2 guage to communicate for different pur3 poses;

4 ‘‘(III) understand and use increasingly

5 complex and varied vocabulary;

6 ‘‘(IV) develop and demonstrate an ap7 preciation of books; and

8 ‘‘(V) in the case of non-English back9 ground children, progress toward acquisi10 tion of the English language.’’;

11 (2) by striking paragraph (2);

12 (3) in paragraph (3)—

13 (A) in subparagraph (B)(iii) by striking

14 ‘‘child’’ and inserting ‘‘early childhood education

15 and’’; and

16 (B) in subparagraph (C)—

17 (i) in clause (i)—

18 (I) by striking ‘‘not later than 1

19 year after the date of enactment of this

20 section,’’; and

21 (II) by striking ‘‘section 651(b)’’

22 and all that follows through ‘‘section’’

23 and inserting ‘‘this subsection’’; and

24 (ii) in subclause (ii), by striking ‘‘No25 vember 2, 1978’’ and inserting ‘‘the date of
33

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1 enactment of the Head Start Amendments

2 Act of 1998’’; and

3 (4) by redesignating paragraphs (3) and (4) as

4 paragraphs (2) and (3), respectively.

5 (b) PERFORMANCE MEASURES.—Section 641A(b) of

6 the Head Start Act (42 U.S.C. 9836a(b)) is amended—

7 (1) in the heading, by inserting ‘‘RESULTS8 BASED’’ before ‘‘PERFORMANCE’’;

9 (2) in paragraph (1)—

10 (A) by striking ‘‘Not later than 1 year after

11 the date of enactment of this section, the’’ and

12 inserting ‘‘The’’;

13 (B) by striking ‘‘child’’ and inserting ‘‘early

14 childhood education and’’; and

15 (C) by striking the period at the end and

16 inserting ‘‘, and the impact of the services pro17 vided through the programs to children and their

18 families.’’;

19 (3) in paragraph (2)—

20 (A) in the heading, by striking ‘‘DESIGN’’

21 and inserting ‘‘CHARACTERISTICS’’;

22 (B) in the matter preceding subparagraph

23 (A), by striking ‘‘be designed’’ and inserting ‘‘in24 clude the education and school-based readiness
34

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1 performance standards described in subsection

2 (a)(1)(B) and shall’’;

3 (C) in subparagraph (A), by striking ‘‘to

4 assess’’ and inserting ‘‘assess the impact of’’;

5 (D) in subparagraph (B)—

6 (i) by striking ‘‘to’’;

7 (ii) by striking ‘‘and peer review’’ and

8 inserting ‘‘, peer review, and program eval9 uation’’; and

10 (iii) by inserting ‘‘not later than Jan11 uary 1, 1999’’ before the semicolon at the

12 end; and

13 (E) in subparagraph (C), by inserting ‘‘be

14 developed’’ before ‘‘for other’’;

15 (4) in paragraph (3)(A) by striking ‘‘and by re16 gion’’ and inserting ‘‘, regionally, and locally’’; and

17 (5) by adding at the end the following:

18 ‘‘(4) REQUIRED RESULTS-BASED PERFORMANCE

19 MEASURES.—Such results-based performance meas20 ures shall ensure that such children—

21 ‘‘(A) know that letters of the alphabet are a

22 special category of visual graphics that can be

23 individually named;

24 ‘‘(B) recognize a word as a unit of print;
35

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1 ‘‘(C) identify at least 10 letters of the alpha2 bet; and

3 ‘‘(D) associate sounds with written words.

4 ‘‘(5) OTHER RESULTS-BASED PERFORMANCE

5 MEASURES.—In addition to other applicable results6 based performance measures, Head Start agencies

7 may establish their own results-based school readiness

8 performance measures.’’.

9 (c) MONITORING.—Section 641A(c) of the Head Start

10 Act (42 U.S.C. 9836a(c)) is amended—

11 (1) in paragraph (1) by inserting ‘‘and results12 based performance measures’’ after ‘‘standards’’; and

13 (2) in paragraph (2)

14 (A) in subparagraph (B), by striking ‘‘and’’

15 at the end;

16 (B) in subparagraph (C)—

17 (i) by inserting ‘‘(including children

18 with disabilities)’’ after ‘‘eligible children’’;

19 and

20 (ii) by striking the period at the end

21 and inserting a semicolon; and

22 (C) by adding at the end the following:

23 ‘‘(D) include as part of the reviews of the

24 programs, a review and assessment of program

25 effectiveness, as measured in accordance with the
36

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1 results-based performance measures developed

2 pursuant to subsection (b) and with the perform3 ance standards established pursuant to subpara4 graphs (A) and (B) of subsection (a)(1); and

5 ‘‘(E) seek information from the community

6 and the State about the performance of the pro7 gram and its efforts to collaborate with other en8 tities carrying out early childhood education and

9 child care programs in the community.’’.

10 (d) TERMINATION.—Section 641A(d) of the Head Start

11 Act (42 U.S.C. 9836a(d)) is amended—

12 (1) in paragraph (1)—

13 (A) by inserting ‘‘or results-based perform14 ance measures described in subsection (b)’’ after

15 ‘‘subsection (a)’’; and

16 (B) by amending subparagraph (B) to read

17 as follows:

18 ‘‘(B) with respect to each identified defi19 ciency, require the agency—

20 ‘‘(i) to correct the deficiency imme21 diately, if the Secretary finds that the defi22 ciency threatens the health or safety of staff

23 or program participants or poses a threat

24 to the integrity of Federal funds;
37

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1 ‘‘(ii) to correct the deficiency not later

2 than 90 days after the identification of the

3 deficiency if the Secretary finds, in the dis4 cretion of the Secretary, that such a 90-day

5 period is reasonable, in light of the nature

6 and magnitude of the deficiency; or

7 ‘‘(iii) in the discretion of the Secretary

8 (taking into consideration the seriousness of

9 the deficiency and the time reasonably re10 quired to correct the deficiency) to comply

11 with the requirements of paragraph (2) con12 cerning a quality improvement plan; and’’;

13 and

14 (2) in paragraph (2)(A), in the matter preceding

15 clause (i), by striking ‘‘immediately’’ and inserting

16 ‘‘immediately or during a 90-day period under clause

17 (i) or (ii) of paragraph (1)(B)’’.

18 (e) REPORT.—Section 641A(e) of the Head Start Act

19 (42 U.S.C. 9836a(e)) is amended by adding at the end the

20 following: ‘‘Such report shall be widely disseminated and

21 available for public review in both written and electronic

22 formats.’’.
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1 SEC. 109. POWERS AND FUNCTIONS OF HEAD START AGEN2 CIES.

3 Section 642 of the Head Start Act (42 U.S.C. 9837)

4 is amended—

5 (1) in subsection (b)—

6 (A) in paragraph (6)—

7 (i) by striking subparagraph (D); and

8 (ii) by redesignating subparagraphs

9 (E) and (F) and subparagraphs (D) and

10 (E), respectively;

11 (B) in paragraph (8) by striking ‘‘and’’ at

12 the end;

13 (C) in paragraph (9) by striking the period

14 at the end and inserting ‘‘; and’’;

15 (D) by redesignating paragraphs (6)

16 through (9) as paragraphs (7) through (10), re17 spectively;

18 (E) by inserting after paragraph (5) the fol19 lowing:

20 ‘‘(6) offer to parents of participating children

21 substance abuse counseling (either directly or through

22 referral to local entities), including information on

23 drug-exposed infants and fetal alcohol syndrome;’’;

24 and

25 (F) by adding at the end the following:
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1 ‘‘(11)(A) inform custodial parents in single-par2 ent families that participate in programs, activities,

3 or services carried out under this subtitle about the

4 availability of child support services for purposes of

5 establishing paternity and acquiring child support;

6 ‘‘(B) refer eligible parents to the child support

7 offices of State and local governments; and

8 ‘‘(C) establish referral arrangements with such

9 offices.’’;

10 (2) in subsection (c)—

11 (A) by inserting ‘‘and collaborate’’ after

12 ‘‘coordinate’’;

13 (B) by inserting ‘‘and part C and section

14 619 of the Individuals with Disabilities Edu15 cation Act (20 U.S.C 1431–1445, 1419)’’ after

16 ‘‘(20 U.S.C. 2741 et seq.)’’; and

17 (C) by striking ‘‘section 402(g) of the Social

18 Security Act, and other’’ and inserting ‘‘the

19 State program carried out under the Child Care

20 and Development Block Grant Act of 1990 (42

21 U.S.C. 9858 et seq.), and other early childhood

22 education and development’’; and

23 (3) in subsection (d)—

24 (A) in paragraph (1)—
40

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1 (i) by striking ‘‘carry out’’ and all that

2 follows through ‘‘maintain’’ and inserting

3 ‘‘take steps to ensure, to the maximum ex4 tent possible, that children maintain’’;

5 (ii) by inserting ‘‘and educational’’

6 after ‘‘developmental’’; and

7 (iii) by striking ‘‘to build’’ and insert8 ing ‘‘build’’;

9 (B) by striking paragraph (2); and

10 (C) by redesignating paragraphs (3)

11 through (5) as paragraphs (2) through (4), re12 spectively.

13 SEC. 110. HEAD START TRANSITION.

14 The Head Start Act (42 U.S.C. 9831 et seq.) is amend15 ed by inserting after section 642 the following:

16 ‘‘SEC. 642A. HEAD START TRANSITION.

17 ‘‘Each Head Start agency shall take steps to coordi18 nate with the local educational agency serving the commu19 nity involved and with schools in which children partici20 pating in a Head Start program operated by such agency

21 will enroll following such program, including—

22 ‘‘(1) developing and implementing a systematic

23 procedure for transferring, with parental consent,

24 Head Start program records for each participating

25 child to the school in which such child will enroll;
41

•S 2206 EAH

1 ‘‘(2) establishing channels of communication be2 tween Head Start staff and their counterparts in the

3 schools (including teachers, social workers, and health

4 staff) to facilitate coordination of programs;

5 ‘‘(3) conducting meetings involving parents, kin6 dergarten or elementary school teachers, and Head

7 Start program teachers to discuss the educational, de8 velopmental, and other needs of individual children;

9 ‘‘(4) organizing and participating in joint tran10 sition-related training of school staff and Head Start

11 staff;

12 ‘‘(5) developing and implementing a family out13 reach and support program in cooperation with enti14 ties carrying out parental involvement efforts under

15 title I of the Elementary and Secondary Education

16 Act of 1965 (20 U.S.C. 6301 et seq.);

17 ‘‘(6) assisting families, administrators, and

18 teachers in enhancing educational and developmental

19 continuity between Head Start services and elemen20 tary school classes; and

21 ‘‘(7) linking the services provided in such pro22 gram with the education services provided by such

23 local education agency.’’.
42

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1 SEC. 111. SUBMISSION OF PLANS TO GOVERNORS.

2 The first sentence of section 643 of the Head Start Act

3 (42 U.S.C. 9838) is amended—

4 (1) by striking ‘‘30 days’’ and inserting ‘‘45

5 days’’;

6 (2) by striking ‘‘so disapproved’’ and inserting

7 ‘‘disapproved (for reasons other than failure to com8 ply with State health, safety, and child care laws, in9 cluding regulations applicable to comparable child

10 care programs in the State)’’; and

11 (3) by inserting before the period ‘‘, as evidenced

12 by a written statement of the Secretary’s findings

13 transmitted to such officer’’.

14 SEC. 112. PARTICIPATION IN HEAD START PROGRAMS.

15 Section 645(a) of the Head Start Act (42 U.S.C.

16 9840(a)) is amended—

17 (1) in the last sentence of paragraph (1)—

18 (A) by striking ‘‘provide (A) that’’ and in19 serting the following:

20 ‘‘provide—

21 ‘‘(A) that’’; and

22 (B) by amending subparagraph (B) to read

23 as follows:

24 ‘‘(B) pursuant to such regulations as the Sec25 retary shall prescribe, that programs assisted under

26 this subchapter may—
43

•S 2206 EAH

1 ‘‘(i) include a child who has been deter2 mined to meet the low-income criteria and who

3 is participating in a Head Start program in a

4 program year shall be considered to continue to

5 meet the low-income criteria through the end of

6 the succeeding program year. In determining, for

7 purposes of this paragraph, whether a child who

8 has applied for enrollment in a Head Start pro9 gram meets the low-income criteria, an entity

10 may consider evidence of family income during

11 the 12 months preceding the month in which the

12 application is submitted, or during the calendar

13 year preceding the calendar year in which the

14 application is submitted, whichever more accu15 rately reflects the needs of the family at the time

16 of application;

17 ‘‘(ii) permit not more than 25 percent of the

18 children enrolled in a Head Start program to be

19 children (without counting children with disabil20 ities) whose family income does not exceed 140

21 percent of the poverty line if the Head Start

22 agency carrying out such program—

23 ‘‘(I) has a community needs assessment

24 that demonstrates a need to provide Head

25 Start services to more of such children who
44

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1 are members of families with incomes that

2 exceed the poverty line but do not exceed

3 140 percent of the poverty line; and

4 ‘‘(II) ensures that, as a result of enroll5 ing a greater percentage of children de6 scribed in this clause, there will not be a re7 duction in, or denial of, Head Start services

8 to children who are eligible under subpara9 graph (A);

10 ‘‘(iii) subject to the approval of the Sec11 retary, permit such Head Start agency that

12 demonstrates to the Secretary that it has made

13 reasonable efforts to enroll children eligible under

14 subparagraph (A) in the Head Start program

15 carried out by such agency, to charge participa16 tion fees for children described in clause (ii),

17 consistent with the sliding fee schedule estab18 lished by the State under section 658E(c)(5) of

19 the of the Child Care and Development Block

20 Grant Act of 1990 (42 U.S.C. 9858c(c)(5)).’’;

21 (2) by redesignating paragraph (2) as para22 graph (3); and

23 (3) by inserting after paragraph (1) the follow24 ing:
45

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1 ‘‘(2) A Head Start agency that provides a Head Start

2 program with full-working-day services in collaboration

3 with other agencies or entities may collect a family copay4 ment to support extended day services if a copayment is

5 required in conjunction with the partnership. The copay6 ment shall not exceed the copayment charged to families

7 with similar incomes and circumstances who are receiving

8 the services through participation in a program carried out

9 by another agency or entity.’’.

10 SEC. 113. EARLY HEAD START PROGRAMS FOR FAMILIES

11 WITH INFANTS AND TODDLERS.

12 (a) PROGRAM.—Section 645A of the Head Start Act

13 (42 U.S.C. 9840a) is amended—

14 (1) in the section heading, by inserting ‘‘EARLY

15 HEAD START’’ before ‘‘PROGRAMS FOR’’;

16 (2) in subsection (a)—

17 (A) in paragraph (1) by striking ‘‘; and’’

18 and inserting a period;

19 (B) by striking paragraph (2); and

20 (C) by striking ‘‘for—’’ and all that follows

21 through ‘‘(1)’’, and inserting ‘‘for’’;

22 (3) in subsection (b)—

23 (A) in paragraph (5), by inserting ‘‘(in24 cluding programs for infants and toddlers with

25 disabilities)’’ after ‘‘community’’;
46

•S 2206 EAH

1 (B) in paragraph (7) by striking ‘‘and’’ at

2 the end;

3 (C) by redesignating paragraph (8) as

4 paragraph (9); and

5 (D) by inserting after paragraph (7) the fol6 lowing:

7 ‘‘(8) ensure formal linkages with the agencies de8 scribed in section 644(b) of the Individuals With Dis9 abilities Education Act Amendments of 1997 and pro10 viders of early intervention services for infants and

11 toddlers with disabilities under the Individuals with

12 Disabilities Education Act (20 U.S.C. 1400 et seq.);

13 and’’;

14 (4) in subsection (c)—

15 (A) by striking ‘‘(a)(1)’’ and inserting

16 ‘‘(a)’’; and

17 (B) in paragraph (2), by striking ‘‘(or

18 under’’ and all that follows through ‘‘(e)(3))’’;

19 (5) in subsection (d)—

20 (A) in paragraph (1), by inserting ‘‘and’’ at

21 the end;

22 (B) by striking paragraph (2); and

23 (C) in paragraph (3) by redesignating such

24 paragraph as paragraph (2);

25 (6) by striking subsection (e);
47

•S 2206 EAH

1 (7) by redesignating subsections (f) and (g) as

2 subsections (e) and (f), respectively;

3 (8) in subsection (e) (as redesignated in para4 graph (7))—

5 (A) in the subsection heading, by striking

6 ‘‘OTHER’’; and

7 (B) by striking ‘‘From the balance remain8 ing of the portion specified in section 640(a)(6),

9 after making grants to the eligible entities speci10 fied in subsection (e),’’ and inserting ‘‘From the

11 portion specified in section 640(a)(6),’’;

12 (9) by striking subsection (h); and

13 (10) by adding at the end the following:

14 ‘‘(g) MONITORING, TRAINING, TECHNICAL ASSIST15 ANCE, AND EVALUATION.—

16 ‘‘(1) REQUIREMENT.—In order to ensure the suc17 cessful operation of programs assisted under this sec18 tion, the Secretary shall use funds from the portion

19 specified in section 640(a)(6) to monitor the oper20 ation of such programs, evaluate their effectiveness,

21 and provide training and technical assistance tai22 lored to the particular needs of such programs.

23 ‘‘(2) TRAINING AND TECHNICAL ASSISTANCE AC24 COUNT.—
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1 ‘‘(A) IN GENERAL.—Of the amount made

2 available to carry out this section for any fiscal

3 year, not less than 5 percent and not more than

4 10 percent shall be reserved to fund a training

5 and technical assistance account.

6 ‘‘(B) ACTIVITIES.—Funds in the account

7 may be used for purposes including—

8 ‘‘(i) making grants to, and entering

9 into contracts with, organizations with spe10 cialized expertise relating to infants, tod11 dlers, and families and the capacity needed

12 to provide direction and support to a na13 tional training and technical assistance sys14 tem, in order to provide such direction and

15 support;

16 ‘‘(ii) providing ongoing training and

17 technical assistance for regional and pro18 gram staff charged with monitoring and

19 overseeing the administration of the pro20 gram carried out under this section;

21 ‘‘(iii) providing ongoing training and

22 technical assistance for existing recipients of

23 grants under subsection (a) and support

24 and program planning and implementation
49

•S 2206 EAH

1 assistance for new recipients of such grants;

2 and

3 ‘‘(iv) providing professional develop4 ment and personnel enhancement activities,

5 including the provision of funds to recipi6 ents of grants under subsection (a) for the

7 recruitment and retention of qualified staff

8 with an appropriate level of education and

9 experience.’’.

10 (b) CONFORMING AMENDMENT.—Section 640(a)(5)(F)

11 of the Head Start Act (42 U.S.C. 9835(a)(5)(F)), as so re12 designated by section 106, is amended by striking ‘‘section

13 645(a)(1)(A)’’ and inserting ‘‘section 645(a)’’.

14 SEC. 114. TECHNICAL ASSISTANCE AND TRAINING.

15 Section 648 of the Head Start Act (42 U.S.C. 9843)

16 is amended—

17 (1) in subsection (b)—

18 (A) in paragraph (1), by striking ‘‘and’’ at

19 the end;

20 (B) in paragraph (2), by striking the period

21 at the end and inserting ‘‘; and’’; and

22 (C) by adding at the end the following:

23 ‘‘(3) ensure the provision of technical assistance

24 to assist Head Start agencies, entities carrying out

25 other child care and early childhood programs, com-
50

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1 munities, and States in collaborative efforts to pro2 vide quality full-working-day, full-calendar-year serv3 ices, including technical assistance related to identify4 ing and assisting in resolving barriers to collabora5 tion.’’; and

6 (2) in subsection (c)—

7 (A) by amending paragraph (1) to read as

8 follows:

9 ‘‘(1) give priority consideration to—

10 ‘‘(A) activities to correct program and man11 agement deficiencies identified through reviews

12 pursuant to section 641A(c) (including the pro13 vision of assistance to local programs in the de14 velopment of quality improvement plans under

15 section 641A(d)(2)); and

16 ‘‘(B) assisting Head Start agencies in—

17 ‘‘(i) ensuring the school readiness of

18 children; and

19 ‘‘(ii) meeting the education and school

20 readiness performance standards described

21 in this subchapter;’’;

22 (B) in paragraph (2) by inserting ‘‘supple23 ment amounts provided under section

24 640(a)(3)(C)(ii),’’ after ‘‘(2)’’;

25 (C) in paragraph (4)—
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1 (i) by inserting ‘‘and implementing’’

2 after ‘‘developing’’; and

3 (ii) by striking ‘‘a longer day’’ and in4 serting the following: ‘‘the day, and assist

5 the agencies and programs in expediting the

6 sharing of information about innovative

7 models for providing full-working-day, full8 calendar-year services for children’’;

9 (D) in paragraph (7), by striking ‘‘and’’ at

10 the end;

11 (E) by redesignating paragraphs (3)

12 through (8) as paragraphs (5) through (10), re13 spectively; and

14 (F) by inserting after paragraph (2) the fol15 lowing:

16 ‘‘(3) assist Head Start agencies in the develop17 ment of collaborative initiatives with States and other

18 entities within the States, to foster effective early

19 childhood professional development systems;

20 ‘‘(4) assist classroom and non-classroom staff,

21 including individuals in management and leadership

22 capacities, to understand the components of effective

23 family literacy services, gain knowledge about proper

24 implementation of such services within a Head Start

25 program, and receive assistance to achieve successful
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1 collaboration agreements with other service providers

2 that allow the effective integration of family literacy

3 services with the Head Start program;’’.

4 SEC. 115. PROFESSIONAL REQUIREMENTS.

5 Section 648A of the Head Start Act (42 U.S.C. 9843a)

6 is amended—

7 (1) by amending subsection (a) to read as fol8 lows:

9 ‘‘(a) CLASSROOM TEACHERS.—

10 ‘‘(1) PROFESSIONAL REQUIREMENTS.—The Sec11 retary shall ensure that each Head Start classroom in

12 a center-based program is assigned 1 teacher who has

13 demonstrated competency to perform functions that

14 include—

15 ‘‘(A) planning and implementing learning

16 experiences that advance the intellectual and

17 physical development of children, including im18 proving readiness of children for school by devel19 oping their literacy and phonemic, print, and

20 numeracy awareness, their understanding and

21 use of oral language, their understanding and

22 use of increasingly complex and varied vocabu23 lary, their appreciation of books and their prob24 lem solving abilities;
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1 ‘‘(B) establishing and maintaining a safe,

2 healthy learning environment;

3 ‘‘(C) supporting the social and emotional

4 development of children; and

5 ‘‘(D) encouraging the involvement of the

6 families of the children in a Head Start pro7 gram and supporting the development of rela8 tionships between children and their families.

9 ‘‘(2) DEGREE REQUIREMENTS.—The Secretary

10 shall ensure that not later than September 30, 2003,

11 at least 50 percent of all Head Start classrooms in a

12 center-based program are assigned 1 teacher who has

13 an associate, baccalaureate, or an advanced degree in

14 early childhood education or development and shall

15 require Head Start agencies to demonstrate continu16 ing progress each year to reach that result. In the re17 maining balance of such classrooms, there shall be as18 signed one teacher who has—

19 ‘‘(A) a child development associate (CDA)

20 credential that is appropriate to the age of the

21 children being served in center-based programs;

22 ‘‘(B) a State-awarded certificate for pre23 school teachers that meets or exceeds the require24 ments for a child development associate creden25 tial; or
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1 ‘‘(C) a degree in a field related to early

2 childhood education with experience in teaching

3 preschool children and a State-awarded certifi4 cate to teach in a preschool program.

5 ‘‘(3) ASSESSMENT.—Head Start agencies shall

6 adopt, in consultation with experts in child develop7 ment and with classroom teachers, an assessment to

8 be used when hiring or evaluating any classroom

9 teacher in a center-based Head Start program. Such

10 assessment shall measure whether such teacher has

11 mastered the functions described in paragraph

12 (1)(A).’’; and

13 (2) in subsection (b)(2)(B)—

14 (A) by striking ‘‘staff,’’ and inserting ‘‘staff

15 or’’; and

16 (B) by striking ‘‘, or that’’ and all that fol17 lows through ‘‘families’’.

18 SEC. 116. FAMILY LITERACY SERVICES.

19 The Head Start Act (42 U.S.C. 9831 et seq.) is amend20 ed by inserting after section 648A the following:

21 ‘‘SEC. 648B. FAMILY LITERACY SERVICES.

22 ‘‘From funds reserved under section 639(b)(4), the Sec23 retary—

24 ‘‘(1) shall provide grants through a competitive

25 process, based upon the quality of the family literacy
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1 service proposal and taking into consideration geo2 graphic and urban/rural representation, for not more

3 than 100 Head Start agencies to initiate provision of

4 family literacy services through collaborative partner5 ships with entities that provide adult education serv6 ices, entities carrying out Even Start programs under

7 part B of chapter 1 of title 1 of the Elementary and

8 Secondary Education Act of 1965 (20 U.S.C. 274 et

9 seq.), or entities that provide other services deemed

10 necessary for the provision of family literacy services;

11 and

12 ‘‘(2) may—

13 ‘‘(A) provide training and technical assist14 ance to Head Start agencies that already provide

15 family literacy services;

16 ‘‘(B) designate as mentor programs, and

17 provide financial assistance to, Head Start agen18 cies that demonstrate effective implementation of

19 family literacy services, based on improved out20 comes of children and their parents, to enable

21 such agencies to provide training and technical

22 assistance to other agencies that seek to imple23 ment, or improve implementation of, family lit24 eracy services; and
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1 ‘‘(C) award grants or make other assistance

2 available to facilitate training and technical as3 sistance to programs for development of collabo4 ration agreements with other service providers.

5 In awarding such grants or assistance, the Secretary shall

6 give special consideration to an organization that has expe7 rience in the development and operation of successful family

8 literacy services.’’.

9 SEC. 117. RESEARCH AND EVALUATION.

10 Section 649 of the Head Start Act (42 U.S.C. 9844)

11 is amended—

12 (1) in subsection (d)—

13 (A) in paragraph (6), by striking ‘‘and’’ at

14 the end;

15 (B) in paragraph (7) by striking the period

16 at the end and inserting ‘‘; and’’;

17 (C) by redesignating paragraphs (2)

18 through (7) as paragraphs (3) through (8), re19 spectively;

20 (D) by inserting after paragraph (1) the fol21 lowing:

22 ‘‘(2) over a 5-year period, lead to the develop23 ment and rigorous evaluation of models for the inte24 gration of family literacy services with Head Start

25 programs, that demonstrate the ability to make posi-
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1 tive gains for children participating in Head Start

2 programs and their parents, and dissemination of in3 formation about such models;’’; and

4 (E) by adding at the end the following:

5 ‘‘(9) study the experiences of small, medium, and

6 large States with Head Start programs in order to

7 permit comparisons of children participating in the

8 programs with eligible children who did not partici9 pate in the programs, which study—

10 ‘‘(A) may include the use of a data set that

11 existed prior to the initiation of the study; and

12 ‘‘(B) shall compare the educational achieve13 ment, social adaptation, and health status of the

14 participating children and the eligible non15 participating children.

16 The Secretary shall ensure that an appropriate entity car17 ries out a study described in paragraph (9), and prepares

18 and submits to the appropriate committees of the Congress

19 a report containing the results of the study, not later than

20 September 30, 2002.’’; and

21 (2) by adding at the end the following:

22 ‘‘(g) NATIONAL HEAD START IMPACT RESEARCH.—

23 ‘‘(1) ANALYSES OF DATA BASES.—The Secretary

24 shall obtain analyses of the following existing data25 bases to guide the evaluation recommendations of the
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1 expert panel appointed under paragraph (2) and to

2 provide Congress with initial reports of potential

3 Head Start outcomes—

4 ‘‘(A) by use of The Survey of Income and

5 Program Participation (SIPP) conduct an anal6 ysis of the different income levels of Head Start

7 participants compared to comparable persons

8 who did not attend Head Start;

9 ‘‘(B) by use of The National Longitudinal

10 Survey of Youth (NLSY) which began gathering

11 data on children who attended Head Start from

12 1988 on, examine the wide range of outcomes

13 measured within the Survey, including cognitive,

14 socio-emotional, behavioral, and academic devel15 opment;

16 ‘‘(C) by use of The Survey of Program Dy17 namics, the new longitudinal survey required by

18 the Personal Responsibility and Work Oppor19 tunity Reconciliation Act of 1996, to begin an20 nual reporting, through the duration of the Sur21 vey, on Head Start attendees’ academic readi22 ness performance and improvements; and

23 ‘‘(D) to ensure that The Survey of Program

24 Dynamics be linked with the NLSY at least once

25 by the use of a common performance test, to be
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1 determined by the expert panel, for the greater

2 national usefulness of the NLSY database.

3 ‘‘(2) EXPERT PANEL.—

4 ‘‘(A) IN GENERAL.—The Secretary shall ap5 point an independent panel consisting of experts

6 in program evaluation and research, education,

7 and early childhood programs—

8 ‘‘(i) to review, and make recommenda9 tions on, the design and plan for the re10 search (whether conducted as a single as11 sessment or as a series of assessments), de12 scribed in paragraph (3), within 1 year

13 after the date of enactment of the Human

14 Services Reauthorization Act of 1998;

15 ‘‘(ii) to maintain and advise the Sec16 retary regarding the progress of the re17 search; and

18 ‘‘(iii) to comment, if the panel so de19 sires, on the interim and final research re20 ports submitted under paragraph (8).

21 ‘‘(B) TRAVEL EXPENSES.—The members of

22 the panel shall not receive compensation for the

23 performance of services for the panel, but shall be

24 allowed travel expenses, including per diem in

25 lieu of subsistence, at rates authorized for em-
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1 ployees of agencies under subchapter I of chapter

2 57 of title 5, United States Code, while away

3 from their homes or regular places of business in

4 the performance of services for the panel. Not5 withstanding section 1342 of title 31, United

6 States Code, the Secretary may accept the vol7 untary and uncompensated services of members

8 of the panel.

9 ‘‘(3) GENERAL AUTHORITY.—After reviewing the

10 recommendations of the expert panel the Secretary

11 shall enter into a grant, contract, or cooperative

12 agreement with an organization to conduct independ13 ent research that provides a national analysis of the

14 impact of Head Start programs. The Secretary shall

15 ensure that the organization shall have expertise in

16 program evaluation, and research, education, and

17 early childhood programs.

18 ‘‘(4) DESIGNS AND TECHNIQUES.—The Secretary

19 shall ensure that the research uses rigorous meth20 odological designs and techniques (based on the rec21 ommendations of the expert panel), including longitu22 dinal designs, control groups, nationally recognized

23 standardized measures, and random selection and as24 signment, as appropriate. The Secretary may provide

25 that the research shall be conducted as a single com-
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1 prehensive assessment or as a group of coordinated

2 assessments designed to provide, when taken together,

3 a national analysis of the impact of Head Start pro4 grams.

5 ‘‘(5) PROGRAMS.—The Secretary shall ensure

6 that the research focuses primarily on Head Start

7 programs that operate in the several States, the Com8 monwealth of Puerto Rico, or the District of Colum9 bia and that do not specifically target special popu10 lations.

11 ‘‘(6) ANALYSIS.—The Secretary shall ensure that

12 the organization conducting the research—

13 ‘‘(A)(i) determines if, overall, the Head

14 Start programs have impacts consistent with

15 their primary goal of increasing the social com16 petence of children, by increasing the everyday

17 effectiveness of the children in dealing with their

18 present environments and future responsibilities,

19 and increasing their school readiness;

20 ‘‘(ii) considers whether the Head Start pro21 grams—

22 ‘‘(I) enhance the growth and develop23 ment of children in cognitive, emotional,

24 and physical health areas;
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1 ‘‘(II) strengthen families as the pri2 mary nurturers of their children; and

3 ‘‘(III) ensure that children attain

4 school readiness; and

5 ‘‘(iii) examines—

6 ‘‘(I) the impact of the Head Start pro7 grams on increasing access of children to

8 such services as educational, health, and nu9 tritional services, and linking children and

10 families to needed community services; and

11 ‘‘(II) how receipt of services described

12 in subclause (I) enriches the lives of chil13 dren and families participating in Head

14 Start programs;

15 ‘‘(B) examines the impact of Head Start

16 programs on participants on the date the par17 ticipants leave Head Start programs, at the end

18 of kindergarten, and at the end of first grade, by

19 examining a variety of factors, including edu20 cational achievement, referrals for special edu21 cation or remedial course work, and absenteeism;

22 ‘‘(C) makes use of random selection from the

23 population of all Head Start programs described

24 in paragraph (5) in selecting programs for in25 clusion in the research; and
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1 ‘‘(D) includes comparisons of individuals

2 who participate in Head Start programs with

3 control groups (including comparison groups)

4 composed of—

5 ‘‘(i) individuals who participate in

6 other early childhood programs (such as

7 preschool programs and day care); and

8 ‘‘(ii) individuals who do not partici9 pate in any other early childhood program.

10 ‘‘(7) CONSIDERATION OF SOURCES OF VARI11 ATION.—In designing the research, the Secretary

12 shall, to the extent practicable, consider addressing

13 possible sources of variation in impact of Head Start

14 programs, including variations in impact related to

15 such factors as—

16 ‘‘(A) Head Start program operations;

17 ‘‘(B) Head Start program quality;

18 ‘‘(C) the length of time a child attends a

19 Head Start program;

20 ‘‘(D) the age of the child on entering the

21 Head Start program;

22 ‘‘(E) the type of organization (such as a

23 local educational agency or a community action

24 agency) providing services for the Head Start

25 program;
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1 ‘‘(F) the number of hours and days of pro2 gram operation of the Head Start program (such

3 as whether the program is a full-working-day

4 full-calendar-year program, a part-day program

5 or a part-year program); and

6 ‘‘(G) other characteristics and features of

7 the Head Start program (such as geographic lo8 cation, location in an urban or a rural service

9 area, or participant characteristics), as appro10 priate.

11 ‘‘(8) REPORTS.—

12 ‘‘(A) SUBMISSION OF INTERIM REPORTS.—

13 The organization shall prepare and submit to the

14 Secretary 2 interim reports on the research. The

15 first interim report shall describe the design of

16 the research, and the rationale for the design, in17 cluding a description of how potential sources of

18 variation in impact of Head Start programs

19 have been considered in designing the research.

20 The second interim report shall describe the sta21 tus of the research and preliminary findings of

22 the research, as appropriate.

23 ‘‘(B) SUBMISSION OF FINAL REPORT.—The

24 organization shall prepare and submit to the
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1 Secretary a final report containing the findings

2 of the research.

3 ‘‘(C) TRANSMITTAL OF REPORTS TO CON4 GRESS.—

5 ‘‘(i) IN GENERAL.—The Secretary shall

6 transmit, to the committees described in

7 clause (ii), the first interim report by Sep8 tember 30, 1999, the second interim report

9 by September 30, 2001, and the final report

10 by September 30, 2003.

11 ‘‘(ii) COMMITTEES.—The committees

12 referred to in clause (i) are the Committee

13 on Education and the Workforce of the

14 House of Representatives and the Committee

15 on Labor and Human Resources of the Sen16 ate.

17 ‘‘(9) DEFINITION.—In this subsection, the term

18 ‘impact’, used with respect to a Head Start program,

19 means a difference in an outcome for a participant

20 in the program that would not have occurred without

21 the participation in the program.

22 ‘‘(h) QUALITY IMPROVEMENT STUDY.—

23 ‘‘(1) STUDY.—The Secretary shall conduct a

24 study regarding the use and effects of use of the qual-
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1 ity improvement funds made available under section

2 640(a)(3) since fiscal year 1991.

3 ‘‘(2) REPORT.—The Secretary shall prepare and

4 submit to Congress not later than September 2000 a

5 report containing the results of the study, including—

6 ‘‘(A) the types of activities funded with the

7 quality improvement funds;

8 ‘‘(B) the extent to which the use of the qual9 ity improvement funds has accomplished the

10 goals of section 640(a)(3)(B); and

11 ‘‘(C) the effect of use of the quality improve12 ment funds on teacher training, salaries, bene13 fits, recruitment, and retention.’’.

14 SEC. 118. REPORTS.

15 Section 650 of the Head Start Act (42 U.S.C. 9846)

16 is amended—

17 (1) by inserting ‘‘(a) STATUS OF CHILDREN.—’’

18 before ‘‘At’’;

19 (2) by striking ‘‘and Labor’’ each place it ap20 pears and inserting ‘‘and the Workforce’’;

21 (3) in paragraph (14) by striking ‘‘and sea22 sonal’’ and inserting ‘‘or seasonal’’; and

23 (4) by adding at the end the following:

24 ‘‘(b) FACILITIES.—At least once during every 5-year

25 period, the Secretary shall prepare and submit, to the Com-
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1 mittee on Education and the Workforce of the House of Rep2 resentatives and the Committee on Labor and Human Re3 sources of the Senate, a report concerning the condition, lo4 cation, and ownership of facilities used, or available to be

5 used, by Indian Head Start agencies.’’.

6 SEC. 119. REPEAL OF CONSULTATION REQUIREMENT.

7 Section 657A of the Head Start Act (42 U.S.C. 9852a)

8 is repealed.

9 SEC. 120. REPEAL OF HEAD START TRANSITION PROJECT

10 ACT.

11 The Head Start Transition Project Act (42 U.S.C.

12 9855–9855g) is repealed.

13 SEC. 121. EFFECTIVE DATE; APPLICATION OF AMEND14 MENTS.

15 (a) EFFECTIVE DATE.—Except as provided in sub16 section (b), this title and the amendments made by this title

17 shall take effect on the date of the enactment of this Act.

18 (b) APPLICATION OF AMENDMENTS.—The amendments

19 made by this title shall not apply with respect to any fiscal

20 year ending before October 1, 1998.
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1 TITLE II—AMENDMENTS TO THE

2 COMMUNITY SERVICES

3 BLOCK GRANT ACT

4 SEC. 201. SHORT TITLE.

5 This title may be cited as the ‘‘Community Services

6 Authorization Act of 1998’’.

7 SEC. 202. REAUTHORIZATION.

8 The heading for subtitle B, and sections 671 through

9 680, of the Community Services Block Grant Act (42 U.S.C.

10 9901–9909) are amended to read as follows:

11 ‘‘Subtitle B—Community Services

12 Block Grant Program

13 ‘‘SEC. 671. SHORT TITLE.

14 ‘‘This subtitle may be cited as the ‘Community Serv15 ices Block Grant Act’.

16 ‘‘SEC. 672. PURPOSES AND GOALS.

17 ‘‘The purpose of this subtitle is to provide assistance

18 to States and local communities, working through a net19 work of community action agencies and other neighborhood20 based organizations, for the reduction of poverty, the revi21 talization of low-income communities, and the empower22 ment of low-income families and individuals in rural and

23 urban areas to become fully self-sufficient (particularly

24 families who are attempting to transition off a State pro25 gram carried out under part A of title IV of the Social Secu-
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1 rity Act (42 U.S.C. 601 et seq.)). Such goals may be accom2 plished through—

3 ‘‘(1) the strengthening of community capabilities

4 for planning, coordinating, and utilizing a broad

5 range of Federal, State, local, and private resources

6 for the elimination of poverty, and for helping indi7 viduals and families achieve self-sufficiency;

8 ‘‘(2) greater use of innovative and effective, com9 munity-based approaches to attacking the causes and

10 effects of poverty and of community breakdown;

11 ‘‘(3) the maximum participation of residents of

12 the low-income communities and members of the

13 groups served by programs assisted through the block

14 grant to empower such individuals to respond to the

15 unique problems and needs within their communities;

16 and

17 ‘‘(4) the broadening of the resource base of pro18 grams directed to the elimination of poverty so as to

19 secure a more active role for private, faith-based,

20 charitable, and neighborhood organizations in the

21 provision of services as well as individual citizens,

22 business, labor, and professional groups who are able

23 to influence the quantity and quality of opportunities

24 and services for the poor.
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1 ‘‘SEC. 673. DEFINITIONS.

2 ‘‘In this subtitle:

3 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en4 tity’ means an entity—

5 ‘‘(A) that is an eligible entity described in

6 section 673(1) (as in effect on the day before the

7 date of enactment of the Human Services Reau8 thorization Act of 1998) as of such date of enact9 ment or is designated by the process described in

10 section 676A (including an organization serving

11 migrant or seasonal farmworkers that is so de12 scribed or designated); and

13 ‘‘(B) that has a tripartite board or other

14 mechanism described in subsection (a) or (b), as

15 appropriate, of section 676B.

16 ‘‘(2) POVERTY LINE.—The term ‘poverty line’

17 means the official poverty line defined by the Office

18 of Management and Budget based on the most recent

19 data available from the Bureau of the Census. The

20 Secretary shall revise the poverty line annually (or at

21 any shorter interval the Secretary determines to be

22 feasible and desirable) which shall be used as a cri23 terion of eligibility in the community services block

24 grant program established under this subtitle. The re25 quired revision shall be accomplished by multiplying

26 the official poverty line by the percentage change in
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1 the Consumer Price Index for All Urban Consumers

2 during the annual or other interval immediately pre3 ceding the time at which the revision is made. When4 ever a State determines that it serves the objectives of

5 the block grant program established under this sub6 title, the State may revise the poverty line to not to

7 exceed 125 percent of the official poverty line other8 wise applicable under this paragraph.

9 ‘‘(3) PRIVATE, NONPROFIT ORGANIZATION.—The

10 term ‘private, nonprofit organization’ includes a

11 faith-based organization, to which the provisions of

12 section 679 shall apply.

13 ‘‘(4) SECRETARY.—The term ‘Secretary’ means

14 the Secretary of Health and Human Services.

15 ‘‘(5) STATE.—The term ‘State’ means each of the

16 several States, the District of Columbia, the Common17 wealth of Puerto Rico, Guam, the United States Vir18 gin Islands, American Samoa, and the Common19 wealth of the Northern Mariana Islands, but for fiscal

20 years ending before October 1, 2001, includes the Fed21 erated States of Micronesia, the Republic of he Mar22 shall Islands, and Palau.

23 ‘‘SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

24 ‘‘(a) IN GENERAL.—There are authorized to be appro25 priated $535,000,000 for fiscal year 1999 and such sums
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1 as may be necessary for each of fiscal years 2000 through

2 2003 to carry out the provisions of this subtitle (other than

3 sections 681 and 682).

4 ‘‘(b) RESERVATIONS.—Of the amounts appropriated

5 under subsection (a) for each fiscal year, the Secretary shall

6 reserve—

‘‘(1) 1 7 ⁄2 of 1 percent for carrying out section

8 675A (relating to payments for territories);

‘‘(2) 1 1 9 ⁄2 percent for activities authorized in sec10 tions 678A through 678F, of which—

‘‘(A) not less than 1 11 ⁄2 of the amount reserved

12 by the Secretary under this paragraph shall be

13 distributed directly to local eligible entities or to

14 statewide organizations whose membership is

15 composed of eligible entities, as required under

16 section 678A(c) for the purpose of carrying out

17 activities described in section 678A; and

‘‘(B) 1 18 ⁄2 of the remainder of the amount re19 served by the Secretary under this paragraph

20 shall be used to carry out monitoring, evalua21 tion, and corrective activities described in sec22 tions 678B(c) and 678A; and

23 ‘‘(3) not more than 9 percent for carrying out

24 section 680 (relating to discretionary activities).
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1 ‘‘SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.

2 ‘‘The Secretary is authorized to establish a community

3 services block grant program and make grants through the

4 program to States to ameliorate the causes of poverty in

5 communities within the States.

6 ‘‘SEC. 675A. DISTRIBUTION TO TERRITORIES.

7 ‘‘(a) APPORTIONMENT.—The Secretary shall apportion

8 the amount reserved under section 674(b)(1)—

9 (1) for each fiscal year on the basis of need

10 among Guam, American Samoa, the United States

11 Virgin Islands, and the Commonwealth of the North12 ern Mariana Islands; and

13 (2) for fiscal years ending before October 1, 2001,

14 and subject to subsection (c), on the basis of need

15 among the Federated States of Micronesia, the Repub16 lic of the Marshall Islands, and Palau.

17 ‘‘(b) APPLICATION.—Each jurisdiction to which sub18 section (a) applies may receive a grant under this subtitle

19 for the amount apportioned under subsection (a) on submit20 ting to the Secretary, and obtaining approval of, an appli21 cation containing provisions that describe the programs for

22 which assistance is sought under this subtitle, and that are

23 consistent with the requirements of section 676.

24 ‘‘(c) LIMITATION.—(1) Funds apportioned under sub25 section (a) for the Federated States of Micronesia, the Re26 public of the Marshall Islands, and Palau shall be used by
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1 the Secretary to make grants on a competitive basis, pursu2 ant to recommendations submitted to the Secretary by the

3 Pacific Region Educational Laboratory of the Department

4 of Education, to the Federated States of Micronesia, the Re5 public of the Marshall Islands, Palau, Guam, American

6 Samoa, and the Commonwealth of the Northern Mariana

7 Islands, for the purpose of carrying out programs in accord8 ance with this subtitle.

9 ‘‘(2) Not more than 5 percent of such funds may be

10 used by the Secretary to compensate the Pacific Region

11 Educational Laboratory of the Department of Education

12 for administrative costs incurred in connection with mak13 ing recommendations under paragraph (1).

14 ‘‘(3) Notwithstanding any other provision of law, the

15 Federated States of Micronesia, the Republic of the Marshall

16 Islands, and Palau shall not receive any funds under this

17 subtitle for any fiscal year that begins after September 30,

18 2001.

19 ‘‘SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES.

20 ‘‘(a) ALLOTMENTS IN GENERAL.—The Secretary shall,

21 from the amount appropriated under section 674(a) for

22 each fiscal year that remains after the Secretary makes the

23 reservations required in section 674(b), allot to each State,

24 subject to section 677, an amount that bears the same ratio

25 to such remaining amount as the amount received by the
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1 State for fiscal year 1981 under section 221 of the Economic

2 Opportunity Act of 1964 bore to the total amount received

3 by all States for fiscal year 1981 under such section, except

that no State shall receive less than 1 4 ⁄4 of 1 percent of the

5 amount appropriated under section 674(a) for such fiscal

6 year.

7 ‘‘(b) ALLOTMENTS IN YEARS WITH GREATER AVAIL8 ABLE FUNDS.—

9 ‘‘(1) MINIMUM ALLOTMENTS.—Subject to para10 graphs (2) and (3), if the amount appropriated under

11 section 674(a) for a fiscal year that remains after the

12 Secretary makes the reservations required in section

13 674(b) exceeds $345,000,000, the Secretary shall allot

to each State not less than 1 14 ⁄2 of 1 percent of the

15 amount appropriated under section 674(a) for such

16 fiscal year.

17 ‘‘(2) MAINTENANCE OF FISCAL YEAR 1990 LEV18 ELS.—Paragraph (1) shall not apply with respect to

19 a fiscal year if the amount allotted under subsection

20 (a) to any State for that year is less than the amount

21 allotted under subsection (a) to such State for fiscal

22 year 1990.

23 ‘‘(3) MAXIMUM ALLOTMENTS.—The amount al24 lotted under paragraph (1) to a State shall be reduced

25 for a fiscal year, if necessary, so that the aggregate
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1 amount allotted to such State under such paragraph

2 and subsection (a) does not exceed 140 percent of the

3 aggregate amount allotted to such State under the

4 corresponding provisions of this subtitle for the fiscal

5 year preceding the fiscal year for which a determina6 tion is made under this subsection.

7 ‘‘(c) ALLOTMENT OF ADDITIONAL FUNDS.—Notwith8 standing subsections (a) and (b), in any fiscal year in

9 which the amount appropriated under section 674(a) ex10 ceeds the amount appropriated under such section for fiscal

11 year 1999, such excess shall be allotted among the States

12 proportionately based on—

13 ‘‘(1) the number of public assistance recipients

14 in the respective States;

15 ‘‘(2) the number of unemployed individuals in

16 the respective States; and

17 ‘‘(3) the number of individuals with incomes

18 below the poverty line in the respective States.

19 ‘‘(d) PAYMENTS.—The Secretary shall make payments

20 to eligible States from the allotments made under this sec21 tion. The Secretary shall make payments for the grants in

22 accordance with section 6503(a) of title 31, United States

23 Code.

24 ‘‘(e) DEFINITION.—For purposes of this section, the

25 term ‘State’ does not include Guam, American Samoa, the
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1 United States Virgin Islands, and the Commonwealth of the

2 Northern Mariana Islands.

3 ‘‘SEC. 675C. USES OF FUNDS.

4 ‘‘(a) GRANTS TO LOCAL ELIGIBLE ENTITIES AND

5 OTHER ORGANIZATIONS.—

6 ‘‘(1) IN GENERAL.—Not less than 90 percent of

7 the funds allotted to a State under section 675B shall

8 be used by the State to make grants for the purposes

9 described in section 672 to eligible entities.

10 ‘‘(2) OBLIGATIONAL AUTHORITY.—Funds distrib11 uted to eligible entities through grants made in ac12 cordance with paragraph (1) for a fiscal year shall be

13 available for obligation during that fiscal year and

14 the succeeding fiscal year, in accordance with para15 graph (3).

16 ‘‘(3) RECAPTURE AND REDISTRIBUTION OF UN17 OBLIGATED FUNDS.—

18 ‘‘(A) AMOUNT.—Beginning on October 1,

19 2000, a State may recapture and redistribute

20 funds distributed to an eligible entity through a

21 grant made under paragraph (1) that are unob22 ligated at the end of a fiscal year if such unobli23 gated funds exceed 20 percent of the amount so

24 distributed to such eligible entity for such fiscal

25 year.
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1 ‘‘(B) REDISTRIBUTION.—In redistributing

2 funds recaptured in accordance with this para3 graph, States shall redistribute such funds to an

4 eligible entity, or require the original recipient of

5 the funds to redistribute the funds to a private,

6 nonprofit organization, located within the com7 munity served by the original recipient of the

8 funds, for activities consistent with the purposes

9 of this subtitle.

10 ‘‘(b) STATEWIDE ACTIVITIES.—

11 ‘‘(1) USE OF REMAINDER.—If a State uses less

12 than 100 percent of the State allotment to make

13 grants under subsection (a), the State shall use the re14 mainder of the allotment (subject to paragraph (2))

15 for activities which may include—

16 ‘‘(A) providing training and technical as17 sistance to those entities in need of such training

18 and assistance;

19 ‘‘(B) coordinating State-operated programs

20 and services targeted to low-income children and

21 families with services provided by eligible enti22 ties and other organizations funded under this

23 subtitle, including detailing appropriate employ24 ees of State or local agencies to entities funded
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1 under this subtitle, to ensure increased access to

2 services provided by such State or local agencies;

3 ‘‘(C) supporting statewide coordination and

4 communication among eligible entities;

5 ‘‘(D) analyzing the distribution of funds

6 made available under this subtitle within the

7 State to determine if such funds have been tar8 geted to the areas of greatest need;

9 ‘‘(E) supporting asset-building programs for

10 low-income individuals, such as programs sup11 porting individual development accounts;

12 ‘‘(F) supporting innovative programs and

13 activities conducted by community action agen14 cies or other neighborhood-based organizations to

15 eliminate poverty, promote self-sufficiency, and

16 promote community revitalization;

17 ‘‘(G) supporting other activities, consistent

18 with the purposes of this subtitle; and

19 ‘‘(H) State charity tax credits as described

20 in subsection (c).

21 ‘‘(2) ADMINISTRATIVE CAP.—No State may

22 spend more than the greater of $55,000, or 5 percent,

23 of the State’s allotment received under section 675B

24 for administrative expenses, including monitoring ac25 tivities. Funds to be spent for such expenses shall be
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1 taken from the portion of the State allotment that re2 mains after the State makes grants to eligible entities

3 under subsection (a). The cost of activities conducted

4 under paragraph (1)(A) shall not be considered to be

5 administrative expenses.

6 ‘‘(c)(1) Subject to paragraph (2), if there is in effect

7 under State law a charity tax credit, then the State may

8 use for any purpose the amount of the allotment that is

9 available for expenditure under subsection (b).

10 ‘‘(2) The aggregate amount a State may use under

11 paragraph (1) during a fiscal year shall not exceed 100 per12 cent of the revenue loss of the State during the fiscal year

13 that is attributable to the charity tax credit, as determined

14 by the Secretary of the Treasury without regard to any such

15 revenue loss occurring before January 1, 1999.

16 ‘‘(3) For purposes of this subsection:

17 ‘‘(A) CHARITY TAX CREDIT.—The term ‘charity

18 tax credit’ means a nonrefundable credit against

19 State income tax (or, in the case of a State which

20 does not impose an income tax, a comparable benefit)

21 which is allowable for contributions, in cash or in

22 kind, to qualified charities.

23 ‘‘(B) QUALIFIED CHARITY.—

24 ‘‘(i) IN GENERAL.—The term ‘qualified

25 charity’ means any organization—
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1 ‘‘(I) which is—

2 ‘‘(aa) described in section

3 501(c)(3) of the Internal Revenue Code

4 of 1986 and exempt from tax under

5 section 501(a) of such Code;

6 ‘‘(bb) a community action agency

7 as defined in the Economic Oppor8 tunity Act of 1964; or

9 ‘‘(cc) a public housing agency as

10 defined in section 3(b)(6) of the United

11 States Housing Act of 1937 (42 U.S.C.

12 1437A(b)(6));

13 ‘‘(II) which is certified by the appro14 priate State authority as meeting the re15 quirements of clauses (iii) and (iv); and

16 ‘‘(III) if such organization is otherwise

17 required to file a return under section 6033

18 of such Code, which elects to treat the infor19 mation required to be furnished by clause

20 (v) as being specified in section 6033(b) of

21 such Code.

22 ‘‘(ii) CERTAIN CONTRIBUTIONS TO COLLEC23 TION ORGANIZATIONS TREATED AS CONTRIBU24 TIONS TO QUALIFIED CHARITY.—
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1 ‘‘(I) IN GENERAL.—A contribution to a

2 collection organization shall be treated as a

3 contribution to a qualified charity if the

4 donor designates in writing that the con5 tribution is for the qualified charity.

6 ‘‘(II) COLLECTION ORGANIZATION.—

7 The term ‘collection organization’ means an

8 organization described in section 501(c)(3)

9 of such Code and exempt from tax under

10 section 501(a) of such Code—

11 ‘‘(aa) which solicits and collects

12 gifts and grants which, by agreement,

13 are distributed to qualified charities

14 described in clause (i);

15 ‘‘(bb) which distributes to quali16 fied charities described in clause (i) at

17 least 90 percent of the gifts and grants

18 it receives that are designated for such

19 qualified charities; and

20 ‘‘(cc) which meets the require21 ments of clause (vi).

22 ‘‘(iii) CHARITY MUST PRIMARILY ASSIST

23 POOR INDIVIDUALS.—

24 ‘‘(I) IN GENERAL.—An organization

25 meets the requirements of this clause only if
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1 the appropriate State authority reasonably

2 expects that the predominant activity of

3 such organization will be the provision of

4 direct services within the United States to

5 individuals and families whose annual in6 comes generally do not exceed 185 percent of

7 the official poverty line (as defined by the

8 Office of Management and Budget) in order

9 to prevent or alleviate poverty among such

10 individuals and families.

11 ‘‘(II) NO RECORDKEEPING IN CERTAIN

12 CASES.—An organization shall not be re13 quired to establish or maintain records with

14 respect to the incomes of individuals and

15 families for purposes of subclause (I) if such

16 individuals or families are members of

17 groups which are generally recognized as

18 including substantially only individuals

19 and families described in subclause (I).

20 ‘‘(III) FOOD AID AND HOMELESS

21 SHELTERS.—Except as otherwise provided

22 by the appropriate State authority, for pur23 poses of subclause (I), services to individ24 uals in the form of—
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1 ‘‘(aa) donations of food or meals;

2 or

3 ‘‘(bb) temporary shelter to home4 less individuals;

5 shall be treated as provided to individuals

6 described in subclause (I) if the location

7 and operation of such services are such that

8 the service provider may reasonably con9 clude that the beneficiaries of such services

10 are predominantly individuals described in

11 subclause (I).

12 ‘‘(iv) MINIMUM EXPENSE REQUIREMENT.—

13 ‘‘(I) IN GENERAL.—An organization

14 meets the requirements of this clause only if

15 the appropriate State authority reasonably

16 expects that the annual poverty program ex17 penses of such organization will not be less

18 than 75 percent of the annual aggregate ex19 penses of such organization.

20 ‘‘(II) POVERTY PROGRAM EXPENSE.—

21 For purposes of subclause (I)—

22 ‘‘(aa) IN GENERAL.—The term

23 ‘poverty program expense’ means any

24 expense in providing program services

25 referred to in clause (iii).
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1 ‘‘(bb) EXCEPTIONS.—Such term

2 shall not include any management or

3 general expense, any expense for the

4 purpose of influencing legislation (as

5 defined in section 4911(d) of the Inter6 nal Revenue Code of 1986), any ex7 pense for the purpose of fundraising,

8 any expense for a legal service pro9 vided on behalf of any individual re10 ferred to in clause (iii), any expense

11 for providing tuition assistance relat12 ing to compulsory school attendance,

13 and any expense which consists of a

14 payment to an affiliate of the organi15 zation.

16 ‘‘(v) REPORTING REQUIREMENT.—The in17 formation required to be furnished under this

18 clause is—

19 ‘‘(i) the percentages determined by di20 viding the following categories of the orga21 nization’s expenses for the year by its total

22 expenses for the year: program services,

23 management expenses, general expenses,

24 fundraising expenses, and payments to af25 filiates; and
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1 ‘‘(ii) the category or categories (includ2 ing food, shelter, education, substance abuse,

3 job training, or otherwise) of services which

4 constitute its predominant activities.

5 ‘‘(vi) ADDITIONAL REQUIREMENTS FOR COL6 LECTION ORGANIZATIONS.—The requirements of

7 this clause are met if the organization—

8 ‘‘(I) maintains separate accounting for

9 revenues and expenses; and

10 ‘‘(II) makes available to the public its

11 administrative and fundraising costs and

12 information as to the organizations receiv13 ing funds from it and the amount of such

14 funds.

15 ‘‘(vii) SPECIAL RULE FOR STATES REQUIR16 ING TAX UNIFORMITY.—In the case of a State—

17 ‘‘(I) which has a constitutional re18 quirement of tax uniformity; and

19 ‘‘(II) which, as of December 31, 1997,

20 imposed a tax on personal income with—

21 ‘‘(aa) a single flat rate applicable

22 to all earned and unearned income (ex23 cept insofar as any amount is not

24 taxed pursuant to tax forgiveness pro25 visions); and
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1 ‘‘(bb) no generally available ex2 emptions or deductions to individuals;

3 the requirement of paragraph (2) shall be treated

4 as met if the amount of the credit is limited to

5 a uniform percentage (but not greater than 25

6 percent) of State personal income tax liability

7 (determined without regard to credits).

8 ‘‘(4) No part of the aggregate amount a State uses

9 under paragraph (1) may be used to supplant non-Federal

10 funds that would be available, in the absence of Federal

11 funds, to offset a revenue loss of the State attributable to

12 a charity tax credit.

13 ‘‘SEC. 676. APPLICATION AND PLAN.

14 ‘‘(a) DESIGNATION OF LEAD AGENCY.—

15 ‘‘(1) DESIGNATION.—The chief executive officer

16 of a State desiring to receive an allotment under this

17 subtitle shall designate, in an application submitted

18 to the Secretary under subsection (b), an appropriate

19 State agency that complies with the requirements of

20 paragraph (2) to act as a lead agency for purposes

21 of carrying out State activities under this subtitle.

22 ‘‘(2) DUTIES.—The lead agency shall—

23 ‘‘(A) develop the State plan to be submitted

24 to the Secretary under subsection (b);
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1 ‘‘(B) in conjunction with the development of

2 the State plan as required under subsection (b),

3 hold at least 1 hearing in the State with suffi4 cient time and statewide distribution of notice of

5 such hearing, to provide to the public an oppor6 tunity to comment on the proposed use and dis7 tribution of funds to be provided through the al8 lotment for the period covered by the State plan;

9 and

10 ‘‘(C) conduct reviews of eligible entities

11 under section 678B.

12 ‘‘(3) LEGISLATIVE HEARING.—The State shall

13 hold at least 1 legislative hearing every 3 years in

14 conjunction with the development of the State plan.

15 ‘‘(b) STATE APPLICATION AND PLAN.—Beginning with

16 fiscal year 2000, to be eligible to receive an allotment under

17 this subtitle, a State shall prepare and submit to the Sec18 retary an application and State plan covering a period of

19 not less than 1 fiscal year and not more than 2 fiscal years.

20 The plan shall be submitted not later than 30 days prior

21 to the beginning of the first fiscal year covered by the plan,

22 and shall contain such information as the Secretary shall

23 require, including—

24 ‘‘(1) an assurance that funds made available

25 through the allotment will be used to support activi-
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1 ties that are designed to assist low-income families

2 and individuals, including families and individuals

3 receiving assistance under title IV of the Social Secu4 rity Act, homeless families and individuals, migrant

5 or seasonal farmworkers, and elderly low-income indi6 viduals and families, and a description of how such

7 activities will enable the families and individuals—

8 ‘‘(A) to remove obstacles and solve problems

9 that block the achievement of self-sufficiency

10 (particularly for families and individuals who

11 are attempting to transition off a State program

12 carried out under title IV of the Social Security

13 Act);

14 ‘‘(B) to secure and retain meaningful em15 ployment;

16 ‘‘(C) to attain an adequate education with

17 particular attention toward improving literacy

18 skills of the low-income families in the commu19 nity, which may include family literacy initia20 tives;

21 ‘‘(D) to make better use of available income;

22 ‘‘(E) to obtain and maintain adequate

23 housing and a suitable living environment;
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1 ‘‘(F) to obtain emergency assistance through

2 loans, grants, or other means to meet immediate

3 and urgent individual and family needs;

4 ‘‘(G) to achieve greater participation in the

5 affairs of the community, including activities

6 that strengthen and improve the relationship

7 with local law enforcement agencies, which may

8 include activities such as neighborhood or com9 munity policing efforts;

10 ‘‘(H) to address the needs of youth in low11 income communities through youth development

12 programs that support the primary role of the

13 family, give priority to prevention of youth prob14 lems and crime, promote increased community

15 coordination and collaboration in meeting the

16 needs of youth, and support development and ex17 pansion of innovative community-based youth

18 development programs, which may include after19 school child care programs; and

20 ‘‘(I) to make more effective use of, and to

21 coordinate with, other programs related to the

22 purposes of this subtitle (including State welfare

23 reform efforts);

24 ‘‘(2) a description of how the State intends to

25 use discretionary funds made available from the re-
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1 mainder of the allotment described in section 675C(b)

2 in accordance with this subtitle, including a descrip3 tion of how the State will support innovative commu4 nity and neighborhood-based initiatives related to the

5 purposes of this subtitle;

6 ‘‘(3) based on information provided by eligible

7 entities in the State, a description of—

8 ‘‘(A) the service delivery system, for services

9 provided or coordinated with funds made avail10 able through the allotment, targeted to low-in11 come individuals and families in communities

12 within the State;

13 ‘‘(B) a description of how linkages will be

14 developed to fill identified gaps in the services,

15 through the provision of information, referrals,

16 case management, and followup consultations;

17 ‘‘(C) a description of how funds made avail18 able through the allotment will be coordinated

19 with other public and private resources; and

20 ‘‘(D) a description of how the funds will be

21 used to support innovative community and

22 neighborhood-based initiatives related to the pur23 poses of this subtitle which may include father24 hood and other initiatives with the goal of
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1 strengthening families and encouraging parental

2 responsibility;

3 ‘‘(4) an assurance that local eligible entities in

4 the State will provide, on an emergency basis, for the

5 provision of such supplies and services, nutritious

6 foods, and related services, as may be necessary to

7 counteract conditions of starvation and malnutrition

8 among low-income individuals;

9 ‘‘(5) an assurance that the State and the local el10 igible entities in the State will coordinate, and estab11 lish linkages between, governmental and other social

12 services programs to assure the effective delivery of

13 such services to low-income individuals and to avoid

14 duplication of such services (including a description

15 of how the State and the local eligible entities will co16 ordinate with State and local workforce investment

17 systems in the provision of employment and training

18 services in the State and in local communities);

19 ‘‘(6) an assurance that the State will ensure co20 ordination between antipoverty programs in each

21 community, and ensure, where appropriate, that

22 emergency energy crisis intervention programs under

23 title XXVI (relating to low-income home energy as24 sistance) are conducted in such community;
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1 ‘‘(7) an assurance that the State will permit and

2 cooperate with Federal investigations undertaken in

3 accordance with section 678D;

4 ‘‘(8) an assurance that any eligible entity that

5 received funding in the previous fiscal year under this

6 subtitle will not have its funding terminated under

7 this subtitle, or reduced below the proportional share

8 of funding the entity received in the previous fiscal

9 year unless, after providing notice and an oppor10 tunity for a hearing on the record, the State deter11 mines that cause exists for such termination or such

12 reduction, subject to review by the Secretary as pro13 vided in section 678C(b);

14 ‘‘(9) an assurance that local eligible entities in

15 the State will, to the maximum extent possible, co16 ordinate programs with and form partnerships with

17 other organizations serving low-income residents of

18 the communities and members of the groups served by

19 the State, including faith-based organizations, chari20 table groups, and community organizations;

21 ‘‘(10) an assurance that the State will require

22 each eligible entity to establish procedures under

23 which a low-income individual, community organiza24 tion, or faith-based organization, or representative of

25 low-income individuals that considers its organiza-
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1 tion, or low-income individuals, to be inadequately

2 represented on the board (or other mechanism) of the

3 eligible entity to petition for adequate representation;

4 ‘‘(11) an assurance that the State will secure

5 from each eligible entity, as a condition to receipt of

6 funding by the entity under this subtitle for a pro7 gram, a community action plan (which shall be sub8 mitted to the Secretary, at the request of the Sec9 retary, with the State plan) that includes a commu10 nity-needs assessment for the community served,

11 which may be coordinated with community-needs as12 sessments conducted for other programs;

13 ‘‘(12) an assurance that the State and all eligible

14 entities in the State will, not later than fiscal year

15 2001, participate in the Results Oriented Manage16 ment and Accountability System, another perform17 ance measure system established pursuant to section

18 678E(b), or an alternative system for measuring per19 formance and results that meets the requirements of

20 that section, and a description of outcome measures

21 to be used to measure eligible entity performance in

22 promoting self-sufficiency, family stability, and com23 munity revitalization; and

24 ‘‘(13) information describing how the State will

25 carry out the assurances described in this subsection.
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1 ‘‘(c) FUNDING TERMINATION OR REDUCTIONS.—For

2 purposes of making a determination in accordance with

3 subsection (b)(8) with respect to—

4 ‘‘(1) a funding reduction, the term ‘cause’ in5 cludes—

6 ‘‘(A) a statewide redistribution of funds

7 provided under this subtitle to respond to—

8 ‘‘(i) the results of the most recently

9 available census or other appropriate data;

10 ‘‘(ii) the designation of a new eligible

11 entity; or

12 ‘‘(iii) severe economic dislocation; or

13 ‘‘(B) the failure of an eligible entity to com14 ply with the terms of an agreement to provide

15 services under this subtitle; and

16 ‘‘(2) a termination, the term ‘cause’ includes the

17 material failure of an eligible entity to comply with

18 the terms of such an agreement and the State plan to

19 provide services under this subtitle or the consistent

20 failure of the entity to achieve performance measures

21 as determined by the State.

22 ‘‘(d) PROCEDURES AND INFORMATION.—The Secretary

23 may prescribe procedures only for the purpose of assessing

24 the effectiveness of eligible entities in carrying out the pur25 poses of this subtitle.
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1 ‘‘(e) REVISIONS AND INSPECTION.—

2 ‘‘(1) REVISIONS.—The chief executive officer of

3 each State may revise any plan prepared under this

4 section and shall submit the revised plan to the Sec5 retary.

6 ‘‘(2) PUBLIC INSPECTION.—Each plan or revised

7 plan prepared under this section shall be made avail8 able for public inspection within the State in such a

9 manner as will facilitate review of, and comment on,

10 the plan.

11 ‘‘SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGI12 BLE ENTITIES IN UNSERVED AREAS.

13 ‘‘(a) QUALIFIED ORGANIZATION IN OR NEAR AREA.—

14 ‘‘(1) IN GENERAL.—If any geographic area of a

15 State is not, or ceases to be, served by an eligible en16 tity under this subtitle, and if the chief executive offi17 cer of the State decides to serve such area, the chief

18 executive officer may solicit applications from, and

19 designate as an eligible entity—

20 ‘‘(A) a private nonprofit eligible entity lo21 cated in an area contiguous to or within reason22 able proximity of the unserved area that is al23 ready providing related services in the unserved

24 area; or
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1 ‘‘(B) a private nonprofit organization that

2 is geographically located in the unserved area

3 that is capable of providing a broad range of

4 services designed to eliminate poverty and foster

5 self-sufficiency and that meets the requirements

6 of this subtitle.

7 ‘‘(2) REQUIREMENT.—In order to serve as the el8 igible entity for the area, an entity described in para9 graph (1)(B) shall agree to add additional members

10 to the board of the entity to ensure adequate represen11 tation—

12 ‘‘(A) in each of the 3 required categories de13 scribed in subparagraphs (A), (B), and (C) of

14 section 676B(a)(2), by members that reside in

15 the community comprised by the unserved area;

16 and

17 ‘‘(B) in the category described in section

18 676B(a)(2), by members that reside in the neigh19 borhood served.

20 ‘‘(b) SPECIAL CONSIDERATION.—In designating an el21 igible entity under subsection (a), the chief executive officer

22 shall grant the designation to an organization of dem23 onstrated effectiveness in meeting the goals and purposes

24 of this subtitle and may give priority, in granting the des25 ignation, to local eligible entities that are already providing
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1 related services in the unserved area, consistent with the

2 needs identified by a community-needs assessment.

3 ‘‘(c) NO QUALIFIED ORGANIZATION IN OR NEAR

4 AREA.—If no private, nonprofit organization is identified

5 or determined to be qualified under subsection (a) to serve

6 the unserved area as an eligible entity the chief executive

7 officer may designate an appropriate political subdivision

8 of the State to serve as an eligible entity for the area. In

9 order to serve as the eligible entity for that area, the politi10 cal subdivision shall have a board or other mechanism as

11 required in section 676B(b).

12 ‘‘SEC. 676B. TRIPARTITE BOARDS.

13 ‘‘(a) PRIVATE NONPROFIT ENTITIES.—

14 ‘‘(1) BOARD.—In order for a private, nonprofit

15 entity to be considered to be an eligible entity for pur16 poses of section 673(1), the entity shall administer the

17 community services block grant program through a

18 tripartite board described in paragraph (2) that fully

19 participates in the development and implementation

20 of the program to serve low-income communities or

21 groups.

22 ‘‘(2) SELECTION AND COMPOSITION OF BOARD.—

23 The members of the board referred to in paragraph

24 (1) shall be selected by the entity and the board shall

25 be composed so as to assure that—
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‘‘(A) 1 1 ⁄3 of the members of the board are

2 elected public officials, holding office on the date

3 of selection, or their representatives, except that

4 if the number of elected officials reasonably

5 available and willing to serve on the board is less

than 1 6 ⁄3 of the membership of the board, member7 ship on the board of appointive public officials

8 or their representatives may be counted in meeting such 1 9 ⁄3 requirement;

‘‘(B) not fewer than 1 10 ⁄3 of the members are

11 persons chosen in accordance with democratic se12 lection procedures adequate to assure that these

13 members are representative of low-income indi14 viduals and families in the neighborhood served;

15 ‘‘(C) the remainder of the members are offi16 cials or members of business, industry, labor, re17 ligious, law enforcement, education, or other

18 major groups and interests in the community

19 served; and

20 ‘‘(D) each representative of low-income in21 dividuals and families selected to represent a

22 specific neighborhood within a community under

23 subparagraph (B) resides in the neighborhood

24 represented by the member.
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1 ‘‘(b) PUBLIC ORGANIZATIONS.—In order for a public

2 organization to be considered to be an eligible entity for

3 purposes of section 673(1), the entity shall administer the

4 community services block grant program through—

5 ‘‘(1) a tripartite board, which shall have mem6 bers selected by the organization and shall be composed so as to assure that not fewer than 1 7 ⁄3 of the

8 members are persons chosen in accordance with demo9 cratic selection procedures adequate to assure that

10 these members—

11 ‘‘(A) are representative of low-income indi12 viduals and families in the neighborhood served;

13 ‘‘(B) reside in the neighborhood served; and

14 ‘‘(C) are able to participate actively in the

15 planning and implementation of programs fund16 ed under this subtitle; or

17 ‘‘(2) another mechanism specified by the State to

18 assure decisionmaking and participation by low-in19 come individuals in the planning, administration,

20 and evaluation of programs funded under this sub21 title.

22 ‘‘SEC. 677. PAYMENTS TO INDIAN TRIBES.

23 ‘‘(a) RESERVATION.—If, with respect to any State, the

24 Secretary—
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1 ‘‘(1) receives a request from the governing body

2 of an Indian tribe or tribal organization within the

3 State that assistance under this subtitle be made di4 rectly to such tribe or organization; and

5 ‘‘(2) determines that the members of such tribe or

6 tribal organization would be better served by means

7 of grants made directly to provide benefits under this

8 subtitle,

9 the Secretary shall reserve from amounts that would other10 wise be allotted to such State under section 675B for the

11 fiscal year the amount determined under subsection (b).

12 ‘‘(b) DETERMINATION OF RESERVED AMOUNT.—The

13 Secretary shall reserve for the purpose of subsection (a) from

14 amounts that would otherwise be allotted to such State, not

15 less than 100 percent of an amount that bears the same

16 ratio to the State allotment for the fiscal year involved as

17 the population of all eligible Indians for whom a determina18 tion has been made under subsection (a) bears to the popu19 lation of all individuals eligible for assistance under this

20 subtitle in such State.

21 ‘‘(c) AWARDS.—The sums reserved by the Secretary on

22 the basis of a determination made under subsection (a) shall

23 be made available by grant to the Indian tribe or tribal

24 organization serving the individuals for whom such a deter25 mination has been made.
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1 ‘‘(d) PLAN.—In order for an Indian tribe or tribal or2 ganization to be eligible for a grant award for a fiscal year

3 under this section, the tribe or organization shall submit

4 to the Secretary a plan for such fiscal year that meets such

5 criteria as the Secretary may prescribe by regulation.

6 ‘‘(e) DEFINITIONS.—In this section:

7 ‘‘(1) INDIAN TRIBE; TRIBAL ORGANIZATION.—The

8 terms ‘Indian tribe’ and ‘tribal organization’ mean a

9 tribe, band, or other organized group of Indians rec10 ognized in the State in which the tribe, band, or

11 group resides, or considered by the Secretary of the

12 Interior, to be an Indian tribe or an Indian organi13 zation for any purpose.

14 ‘‘(2) INDIAN.—The term ‘Indian’ means a mem15 ber of an Indian tribe or of a tribal organization.

16 ‘‘SEC. 678. OFFICE OF COMMUNITY SERVICES.

17 ‘‘(a) OFFICE.—The Secretary shall carry out the func18 tions of this subtitle through an Office of Community Serv19 ices, which shall be established in the Department of Health

20 and Human Services. The Office shall be headed by a Direc21 tor.

22 ‘‘(b) GRANTS, CONTRACTS, COOPERATIVE AGREE23 MENTS.—The Secretary shall carry out functions of this

24 subtitle through grants, contracts, or cooperative agree25 ments.
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1 ‘‘SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.

2 ‘‘(a) ACTIVITIES.—The Secretary shall use the

3 amounts reserved in section 674(b)(2) for training, tech4 nical assistance, planning, evaluation, performance meas5 urement, corrective action activities (to correct pro6 grammatic deficiencies of eligible entities), reporting, and

7 data collection activities related to programs carried out

8 under this subtitle, and in accordance with subsection (c).

9 Training and technical assistance activities may be carried

10 out by the Secretary through grants, contracts, or coopera11 tive agreements with eligible entities or with organizations

12 or associations whose membership is composed of eligible

13 entities or agencies that administer programs for eligible

14 entities.

15 ‘‘(b) PROCESS.—The process for determining the train16 ing and technical assistance to be carried out under this

17 section shall—

18 ‘‘(1) ensure that the needs of eligible entities and

19 programs relating to improving program quality, in20 cluding financial management practices, are ad21 dressed to the maximum extent feasible; and

22 ‘‘(2) incorporate mechanisms to ensure respon23 siveness to local needs, including an ongoing proce24 dure for obtaining input from the national and State

25 network of eligible entities.
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1 ‘‘(c) DISTRIBUTION REQUIREMENT.—Of the amounts

2 reserved under section 674(b)(2) for activities to be carried

out under this section, not less than 1 3 ⁄2 of such amounts

4 shall be distributed directly to local eligible entities or to

5 statewide organizations whose membership is composed of

6 eligible entities for the purpose of improving program qual7 ity (including financial management practices), manage8 ment information and reporting systems, measurement of

9 program results, and for the purpose of ensuring responsive10 ness to local neighborhood needs.

11 ‘‘SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.

12 ‘‘(a) IN GENERAL.—In order to determine whether eli13 gible entities meet the performance goals, administrative

14 standards, financial management requirements, and other

15 requirements of a State, the State shall conduct the follow16 ing reviews of eligible entities:

17 ‘‘(1) A full onsite review of each such entity at

18 least once during each 3-year period.

19 ‘‘(2) An onsite review of each newly designated

20 entity immediately after the completion of the first

21 year in which such entity receives funds through the

22 community services block grant program.

23 ‘‘(3) Followup reviews including prompt return

24 visits to eligible entities, and their programs, that fail
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1 to meet the goals, standards, and requirements estab2 lished by the State.

3 ‘‘(4) Other reviews as appropriate, including re4 views of entities with programs that have had other

5 Federal, State, or local grants terminated for cause.

6 ‘‘(b) REQUESTS.—The State may request training and

7 technical assistance from the Secretary as needed to comply

8 with the requirements of this section.

9 ‘‘(c) EVALUATIONS BY THE SECRETARY.—The Sec10 retary shall conduct in several States in each fiscal year

11 evaluations and investigations of the use of funds received

12 by the States under this subtitle in order to evaluate compli13 ance with the provisions of this subtitle, and especially with

14 respect to compliance with subsection (b) of section 676. A

15 report of such evaluations, together with recommendations

16 of improvements designed to enhance the benefit and impact

17 to people in need, shall be sent to each State evaluated.

18 Upon receiving the report the State shall submit a plan

19 of action in response to the recommendations contained in

20 the report. The results of the evaluations shall be submitted

21 annually to the Chairman of the Committee on Education

22 and the Workforce of the House of Representatives and the

23 Chairman of the Committee on Labor and Human Re24 sources of the Senate as part of the report submitted by

25 the Secretary in accordance with section 678E(b)(2).
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1 ‘‘SEC. 678C. CORRECTIVE ACTION; TERMINATION AND RE2 DUCTION OF FUNDING.

3 ‘‘(a) DETERMINATION.—If the State determines, on the

4 basis of a review pursuant to subsection 678B, that an eligi5 ble entity materially fails to comply with the terms of an

6 agreement, or the State plan, to provide services under this

7 subtitle or to meet appropriate standards, goals, and other

8 requirements established by the State (including perform9 ance objectives), the State shall—

10 ‘‘(1) inform the entity of the deficiency to be cor11 rected;

12 ‘‘(2) require the entity to correct the deficiency;

13 ‘‘(3)(A) offer training and technical assistance, if

14 appropriate, to help correct the deficiency, and pre15 pare and submit to the Secretary a report describing

16 the training and technical assistance offered; or

17 ‘‘(B) if the State determines that such training

18 and technical assistance are not appropriate, prepare

19 and submit to the Secretary a report stating the rea20 sons for the determination;

21 ‘‘(4)(A) at the discretion of the State (taking into

22 account the seriousness of the deficiency and the time

23 reasonably required to correct the deficiency), allow

24 the entity to develop and implement, within 60 days

25 after being informed of the deficiency, a quality im26 provement plan to correct such deficiency within a
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1 reasonable period of time, as determined by the State;

2 and

3 ‘‘(B) not later than 30 days after receiving from

4 an eligible entity a proposed quality improvement

5 plan pursuant to subparagraph (A), either approve

6 such proposed plan or specify the reasons why the

7 proposed plan cannot be approved; and

8 ‘‘(5) after providing adequate notice and an op9 portunity for a hearing, initiate proceedings to termi10 nate the designation of or reduce the funding under

11 this subtitle of the eligible entity unless the entity cor12 rects the deficiency.

13 ‘‘(b) REVIEW.—A determination to terminate the des14 ignation or reduce the funding of an eligible entity is re15 viewable by the Secretary. The Secretary shall, upon re16 quest, review such a determination. The review shall be

17 completed not later than 120 days after the determination

18 to terminate the designation or reduce the funding. If the

19 review is not completed within 120 days, the determination

20 of the State shall become final at the end of the 120th day.

21 ‘‘(c) DIRECT ASSISTANCE.—Whenever a State violates

22 the assurances contained in section 676(b)(8) and termi23 nates or reduces the funding of an eligible entity prior to

24 the completion of the State’s hearing and the Secretary’s

25 review as required in subsection (b), the Secretary shall as-
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1 sume responsibility for providing financial assistance to the

2 eligible entity affected until the violation is corrected. In

3 such case, the allotment for the State shall be reduced by

4 an amount equal to the funds provided under this sub5 section to such eligible entity.

6 ‘‘SEC. 678D. FISCAL CONTROLS, AUDITS, AND WITHHOLD7 ING.

8 ‘‘(a) FISCAL CONTROLS, PROCEDURES, AUDITS, AND

9 INSPECTIONS.—

10 ‘‘(1) IN GENERAL.—A State that receives funds

11 under this subtitle shall—

12 ‘‘(A) establish fiscal control and fund ac13 counting procedures necessary to assure the

14 proper disbursal of and accounting for Federal

15 funds paid to the State under this subtitle, in16 cluding procedures for monitoring the funds pro17 vided under this subtitle;

18 ‘‘(B) ensure that cost and accounting stand19 ards of the Office of Management and Budget

20 apply to a recipient of funds under this subtitle;

21 ‘‘(C) prepare, at least every year in accord22 ance with paragraph (2) an audit of the expend23 itures of the State of amounts received under this

24 subtitle and amounts transferred to carry out the

25 purposes of this subtitle; and
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1 ‘‘(D) make appropriate books, documents,

2 papers, and records available to the Secretary

3 and the Comptroller General of the United

4 States, or any of their duly authorized represent5 atives, for examination, copying, or mechanical

6 reproduction on or off the premises of the appro7 priate entity upon a reasonable request for the

8 items.

9 ‘‘(2) AUDITS.—Each audit required by sub10 section (a)(1)(C) shall be conducted by an entity inde11 pendent of any agency administering activities or

12 services carried out under this subtitle and shall be

13 conducted in accordance with generally accepted ac14 counting principles. Within 30 days after the comple15 tion of each such audit in a State, the chief executive

16 officer of the State shall submit a copy of such audit

17 to any eligible entity that was the subject of the audit

18 at no charge, to the legislature of the State, and to

19 the Secretary.

20 ‘‘(3) REPAYMENTS.—The State shall repay to the

21 United States amounts found not to have been ex22 pended in accordance with this subtitle or the Sec23 retary may offset such amounts against any other

24 amount to which the State is or may become entitled

25 under this subtitle.
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1 ‘‘(b) WITHHOLDING.—

2 ‘‘(1) IN GENERAL.—The Secretary shall, after

3 providing adequate notice and an opportunity for a

4 hearing conducted within the affected State, withhold

5 funds from any State that does not utilize the State

6 allotment substantially in accordance with the provi7 sions of this subtitle, including the assurances such

8 State provided under section 676.

9 ‘‘(2) RESPONSE TO COMPLAINTS.—The Secretary

10 shall respond in an expeditious and speedy manner

11 to complaints of a substantial or serious nature that

12 a State has failed to use funds in accordance with the

13 provisions of this subtitle, including the assurances

14 provided by the State under section 676. For purposes

15 of this paragraph, a complaint of a failure to meet

16 any 1 of the assurances provided under section 676

17 that constitutes disregarding that assurance shall be

18 considered to be a complaint of a serious nature.

19 ‘‘(3) INVESTIGATIONS.—Whenever the Secretary

20 determines that there is a pattern of complaints of

21 failures described in paragraph (2) from any State in

22 any fiscal year, the Secretary shall conduct an inves23 tigation of the use of funds received under this subtitle

24 by such State in order to ensure compliance with the

25 provisions of this subtitle.
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1 ‘‘SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIRE2 MENTS.

3 ‘‘(a) STATE ACCOUNTABILITY AND REPORTING RE4 QUIREMENTS.—

5 ‘‘(1) PERFORMANCE MEASUREMENT.—

6 ‘‘(A) IN GENERAL.—By October 1, 2001,

7 each State that receives funds under this subtitle

8 shall participate, and shall ensure that all eligi9 ble entities in the State participate, in a per10 formance measurement system, which may be a

11 performance measurement system established by

12 the Secretary pursuant to subsection (b), or an

13 alternative system that meets the requirements of

14 subsection (b).

15 ‘‘(B) LOCAL AGENCIES.—The State may

16 elect to have local agencies who are subcontrac17 tors of the eligible entities under this subtitle

18 participate in the performance measurement sys19 tem. If the State makes that election, references

20 in this section to eligible entities shall be consid21 ered to include the local agencies.

22 ‘‘(2) ANNUAL REPORT.—Each State shall annu23 ally prepare and submit to the Secretary a report on

24 the measured performance of the State and the eligible

25 entities in the State. Each State shall also include in

26 the report an accounting of the expenditure of funds
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1 received by the State through the community services

2 block grant program, including an accounting of

3 funds spent on indirect services or administrative

4 costs by the State and the eligible entities, and funds

5 spent by eligible entities on the direct delivery of local

6 services, and shall include information on the number

7 of and characteristics of clients served under this sub8 title in the State, based on data collected from the eli9 gible entities. The State shall also include in the re10 port a summary describing the training and technical

11 assistance offered by the State under section

12 678C(a)(3) during the year covered by the report.

13 ‘‘(b) SECRETARY’S ACCOUNTABILITY AND REPORTING

14 REQUIREMENTS.—

15 ‘‘(1) PERFORMANCE MEASUREMENT.—The Sec16 retary, in collaboration with the States and with eli17 gible entities throughout the Nation, shall facilitate

18 the development of 1 or more model performance

19 measurement systems, which may be used by the

20 States and by eligible entities to measure their per21 formance in carrying out the requirements of this

22 subtitle and in achieving the goals of their commu23 nity action plans. The Secretary shall provide tech24 nical assistance, including support for the enhance25 ment of electronic data systems, to States and to eligi-
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1 ble entities to enhance their capability to collect and

2 report data for such a system and to aid in their par3 ticipation in such a system.

4 ‘‘(2) REPORTING REQUIREMENTS.—At the end of

5 each fiscal year beginning after September 30, 1999,

6 the Secretary shall, directly or by grant or contract,

7 prepare a report containing—

8 ‘‘(A) a summary of the planned use of funds

9 by each State, and the eligible entities in the

10 State, under the community services block grant

11 program, as contained in each State plan sub12 mitted pursuant to section 676;

13 ‘‘(B) a description of how funds were actu14 ally spent by the State and eligible entities in

15 the State, including a breakdown of funds spent

16 on indirect services or administrative costs and

17 on the direct delivery of local services by eligible

18 entities;

19 ‘‘(C) information on the number of entities

20 eligible for funds under this subtitle, the number

21 of low-income persons served under this subtitle,

22 and such demographic data on the low-income

23 populations served by eligible entities as is deter24 mined by the Secretary to be feasible;
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1 ‘‘(D) a comparison of the planned uses of

2 funds for each State and the actual uses of the

3 funds;

4 ‘‘(E) a summary of each State’s perform5 ance results, and the results for the eligible enti6 ties, as collected and submitted by the States in

7 accordance with subsection (a)(2); and

8 ‘‘(F) any additional information that the

9 Secretary considers to be appropriate to carry

10 out this subtitle, if the Secretary informs the

11 States of the need for such additional informa12 tion and allows a reasonable period of time prior

13 to the start of the fiscal year for the States to col14 lect and provide the information.

15 ‘‘(3) SUBMISSION.—The Secretary shall submit

16 to the Committee on Education and the Workforce of

17 the House of Representatives and the Committee on

18 Labor and Human Resources of the Senate the report

19 described in paragraph (2), and any comments the

20 Secretary may have with respect to such report. The

21 report shall include definitions of direct, indirect, and

22 administrative costs used by the Department of

23 Health and Human Services for programs funded

24 under this subtitle.
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1 ‘‘(4) COSTS.—Of the funds reserved under section

2 674(b)(3), not more than $350,000 shall be available

3 to carry out the reporting requirements contained in

4 paragraph (2).

5 ‘‘SEC. 678F. LIMITATIONS ON USE OF FUNDS.

6 ‘‘(a) CONSTRUCTION OF FACILITIES.—

7 ‘‘(1) LIMITATIONS.—Except as provided in para8 graph (2), grants made under this subtitle (other than

9 amounts reserved under section 674(b)(3)) may not be

10 used by the State, or by any other person with which

11 the State makes arrangements to carry out the pur12 poses of this subtitle, for the purchase or improvement

13 of land, or the purchase, construction, or permanent

14 improvement (other than low-cost residential weather15 ization or other energy-related home repairs) of any

16 building or other facility.

17 ‘‘(2) WAIVER.—The Secretary may waive the

18 limitation contained in paragraph (1) upon a State

19 request for such a waiver, if the Secretary finds that

20 the request describes extraordinary circumstances to

21 justify the purchase of land or the construction of fa22 cilities (or the making of permanent improvements)

23 and that permitting the waiver will contribute to the

24 ability of the State to carry out the purposes of this

25 subtitle.
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1 ‘‘(b) POLITICAL ACTIVITIES.—

2 ‘‘(1) TREATMENT AS A STATE OR LOCAL AGEN3 CY.—For purposes of chapter 15 of title 5, United

4 States Code, any entity that assumes responsibility

5 for planning, developing, and coordinating activities

6 under this subtitle and receives assistance under this

7 subtitle shall be deemed to be a State or local agency.

8 For purposes of paragraphs (1) and (2) of section

9 1502(a) of such title, any entity receiving assistance

10 under this subtitle shall be deemed to be a State or

11 local agency.

12 ‘‘(2) PROHIBITIONS.—Programs assisted under

13 this subtitle shall not be carried on in a manner in14 volving the use of program funds, the provision of

15 services, or the employment or assignment of person16 nel, in a manner supporting or resulting in the iden17 tification of such programs with—

18 ‘‘(A) any partisan or nonpartisan political

19 activity or any political activity associated with

20 a candidate, or contending faction or group, in

21 an election for public or party office;

22 ‘‘(B) any activity to provide voters or pro23 spective voters with transportation to the polls or

24 similar assistance in connection with any such

25 election; or
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1 ‘‘(C) any voter registration activity.

2 ‘‘(3) RULES AND REGULATIONS.—The Secretary,

3 after consultation with the Office of Personnel Man4 agement, shall issue rules and regulations to provide

5 for the enforcement of this subsection, which shall in6 clude provisions for summary suspension of assistance

7 or other action necessary to permit enforcement on an

8 emergency basis.

9 ‘‘(c) NONDISCRIMINATION.—

10 ‘‘(1) IN GENERAL.—No person shall, on the basis

11 of race, color, religion, national origin, or sex be ex12 cluded from participation in, be denied the benefits

13 of, or be subjected to discrimination under, any pro14 gram or activity funded in whole or in part with

15 funds made available under this subtitle. Any prohi16 bition against discrimination on the basis of age

17 under the Age Discrimination Act of 1975 (42 U.S.C.

18 6101 et seq.) or with respect to an otherwise qualified

19 individual with a disability as provided in section

20 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)

21 or title II of the Americans with Disabilities Act of

22 1990 (42 U.S.C. 12131 et seq.) shall also apply to

23 any such program or activity.

24 ‘‘(2) ACTION OF SECRETARY.—Whenever the Sec25 retary determines that a State that has received a
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1 payment under this subtitle has failed to comply with

2 paragraph (1) or an applicable regulation, the Sec3 retary shall notify the chief executive officer of the

4 State and shall request that the officer secure compli5 ance. If within a reasonable period of time, not to ex6 ceed 60 days, the chief executive officer fails or refuses

7 to secure compliance, the Secretary is authorized to—

8 ‘‘(A) refer the matter to the Attorney Gen9 eral with a recommendation that an appropriate

10 civil action be instituted;

11 ‘‘(B) exercise the powers and functions pro12 vided by title VI of the Civil Rights Act of 1964

13 (42 U.S.C. 2000d et seq.), the Age Discrimina14 tion Act of 1975 (42 U.S.C. 6101 et seq.), or sec15 tion 504 of the Rehabilitation Act of 1973 (29

16 U.S.C. 794), as may be applicable; or

17 ‘‘(C) take such other action as may be pro18 vided by law.

19 ‘‘(3) ACTION OF ATTORNEY GENERAL.—When a

20 matter is referred to the Attorney General pursuant

21 to paragraph (2), or whenever the Attorney General

22 has reason to believe that the State is engaged in a

23 pattern or practice of discrimination in violation of

24 the provisions of this subsection, the Attorney General

25 may bring a civil action in any appropriate United
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1 States district court for such relief as may be appro2 priate, including injunctive relief.

3 ‘‘SEC. 679. OPERATIONAL RULE.

4 ‘‘(a) FAITH-BASED ORGANIZATIONS INCLUDED AS

5 NONGOVERNMENTAL PROVIDERS.—For any program car6 ried out by the Federal Government, or by a State or local

7 government under this subtitle, the government shall con8 sider, on the same basis as other nongovernmental organiza9 tions, faith-based organizations to provide the assistance

10 under the program, so long as the program is implemented

11 in a manner consistent with the Establishment Clause of

12 the first amendment to the Constitution. Neither the Federal

13 Government nor a State or local government receiving

14 funds under this subtitle shall discriminate against an or15 ganization that provides assistance under, or applies to

16 provide assistance under, this subtitle, on the basis that the

17 organization has a faith-based character.

18 ‘‘(b) ADDITIONAL SAFEGUARDS.—Neither the Federal

19 Government nor a State or local government shall require

20 a faith-based organization to remove religious art, icons,

21 scripture, or other symbols in order to be eligible to provide

22 assistance under a program described in subsection (a).

23 ‘‘(c) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

24 PURPOSES.—No funds provided to a faith-based organiza25 tion to provide assistance under any program described in
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1 subsection (a) shall be expended for sectarian worship, in2 struction, or proselytization.

3 ‘‘(d) FISCAL ACCOUNTABILITY.—

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), any faith-based organization providing as6 sistance under any program described in subsection

7 (a) shall be subject to the same regulations as other

8 nongovernmental organizations to account in accord

9 with generally accepted accounting principles for the

10 use of such funds provided under such program.

11 ‘‘(2) LIMITED AUDIT.—Such organization shall

12 segregate government funds provided under such pro13 gram into a separate account. Only the government

14 funds shall be subject to audit by the government.

15 ‘‘SEC. 680. DISCRETIONARY AUTHORITY OF THE SEC16 RETARY.

17 ‘‘(a) GRANTS, CONTRACTS, ARRANGEMENTS, LOANS,

18 AND GUARANTEES.—

19 ‘‘(1) IN GENERAL.—The Secretary shall, from

20 funds reserved under section 674(b)(3), make grants,

21 loans, or guarantees to States and public agencies

22 and private, nonprofit organizations, or enter into

23 contracts or jointly financed cooperative arrange24 ments with States and public agencies and private,

25 nonprofit organizations (and for-profit organizations,
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1 to the extent specified in (2)(E)) for each of the objec2 tives described in paragraphs (2) through (4).

3 ‘‘(2) COMMUNITY ECONOMIC DEVELOPMENT.—

4 ‘‘(A) ECONOMIC DEVELOPMENT ACTIVI5 TIES.—The Secretary shall make grants de6 scribed in paragraph (1) on a competitive basis

7 to private, non-profit organizations that are

8 community development corporations to provide

9 technical and financial assistance for economic

10 development activities designed to address the

11 economic needs of low-income individuals and

12 families by creating employment and business

13 development opportunities.

14 ‘‘(B) CONSULTATION.—The Secretary shall

15 exercise the authority provided under subpara16 graph (A) after consultation with other relevant

17 Federal officials.

18 ‘‘(C) GOVERNING BOARDS.—For a commu19 nity development corporation to receive funds to

20 carry out this paragraph, the corporation shall

21 be governed by a board that shall consist of resi22 dents of the community and business and civic

23 leaders and shall have as a principal purpose

24 planning, developing, or managing low-income

25 housing or community development projects.
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1 ‘‘(D) GEOGRAPHIC DISTRIBUTION.—In

2 making grants to carry out this paragraph, the

3 Secretary shall take into consideration the geo4 graphic distribution of funding among States

5 and the relative proportion of funding among

6 rural and urban areas.

7 ‘‘(E) RESERVATION.—Of the amounts made

8 available to carry out this paragraph, the Sec9 retary may reserve not more than 1 percent for

10 each fiscal year to make grants to private, non11 profit organizations or to enter into contracts

12 with private, nonprofit or for-profit organiza13 tions to provide technical assistance to aid com14 munity development corporations in developing

15 or implementing activities funded to carry out

16 this paragraph and to evaluate activities funded

17 to carry out this paragraph.

18 ‘‘(3) RURAL COMMUNITY DEVELOPMENT ACTIVI19 TIES.—The Secretary shall provide the assistance de20 scribed in paragraph (1) for rural community devel21 opment activities, which shall include—

22 ‘‘(A) grants to private, nonprofit corpora23 tions that provide assistance concerning home re24 pair to rural low-income families and planning
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1 and developing low-income rural rental housing

2 units; and

3 ‘‘(B) grants to multistate, regional, private,

4 nonprofit organizations to provide training and

5 technical assistance to small, rural communities

6 in meeting their community facility needs.

7 ‘‘(4) NEIGHBORHOOD INNOVATION PROJECTS.—

8 The Secretary shall provide the assistance described

9 in paragraph (1) for neighborhood innovation

10 projects, which shall include grants to neighborhood11 based private, nonprofit organizations to test or assist

12 in the development of new approaches or methods that

13 will aid in overcoming special problems identified by

14 communities or neighborhoods or otherwise assist in

15 furthering the purposes of this subtitle, and which

16 may include projects that are designed to serve low17 income individuals and families who are not being ef18 fectively served by other programs.

19 ‘‘(b) EVALUATION.—The Secretary shall require all ac20 tivities receiving assistance under this section to be evalu21 ated for their effectiveness. Funding for such evaluations

22 shall be provided as a stated percentage of the assistance

23 or through a separate grant awarded by the Secretary spe24 cifically for the purpose of evaluation of a particular activ25 ity or group of activities.
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1 ‘‘(c) ANNUAL REPORT.—The Secretary shall compile

2 an annual report containing a summary of the evaluations

3 required in subsection (b) and a listing of all activities as4 sisted under this section. The Secretary shall annually sub5 mit the report to the Chairperson of the Committee on Edu6 cation and the Workforce of the House of Representatives

7 and the Chairperson of the Committee on Labor and

8 Human Resources of the Senate.’’.

9 SEC. 203. RELATED AMENDMENTS.

10 The Community Services Block Grant Act (42 U.S.C.

11 9901 et seq.) is amended—

12 (1) by striking section 681;

13 (2) in section 681A—

14 (A) by striking ‘‘681A’’ and inserting

15 ‘‘681’’;

16 (B) in subsection (c) by striking ‘‘Labor’’

17 and inserting ‘‘the Workforce’’; and

18 (C) in subsection (d) by striking

19 ‘‘$25,000,000’’ and all that follows through

20 ‘‘1998’’, and inserting ‘‘$5,000,000 for fiscal year

21 1999, and such sums as may be necessary for fis22 cal years 2000 through 2003’’;

23 (3) in section 682—

24 (A) in subsection (c)—
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1 (i) by redesignating paragraphs (3)

2 and (4) as paragraphs (4) and (5), respec3 tively; and

4 (ii) by inserting after paragraph (2)

5 the following:

6 ‘‘(3) the applicant shall, in each community in

7 which a program is funded under this section—

8 ‘‘(A) ensure that—

9 ‘‘(i) a community-based advisory com10 mittee, composed of representatives of local

11 youth, family, and social service organiza12 tions, schools, entities that provide park and

13 recreation services, entities that provide

14 training services, and community-based or15 ganizations that serve high-risk youth, is es16 tablished; or

17 ‘‘(ii) an existing community-based ad18 visory board, commission, or committee

19 with similar membership is used; and

20 ‘‘(B) enter into formal partnerships with

21 youth-serving organizations or other appropriate

22 social service entities in order to link program

23 participants with year-round services in their

24 home communities that support and continue the

25 objectives of this subtitle;’’; and
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1 (B) in subsection (f) by striking ‘‘each fiscal

2 year’’ and all that follows through ‘‘1998’’, and

3 inserting ‘‘for fiscal year 1999, and such sums as

4 may be necessary for fiscal years 2000 through

5 2003’’; and

6 (4) by striking sections 683 and 684, and insert7 ing the following:

8 ‘‘SEC. 683. DRUG TESTING AND PATERNITY DETERMINA9 TIONS.

10 ‘‘(a) DRUG TESTING PERMITTED.—(1) Nothing in this

11 subtitle shall be construed to prohibit a State from testing

12 participants in programs, activities, or services carried out

13 under this subtitle for controlled substances or from impos14 ing sanctions on such participants who test positive for any

15 of such substances.

16 ‘‘(2) Any funds provided under this subtitle expended

17 for such testing shall be considered to be expended for ad18 ministrative expenses and shall be subject to the limitation

19 specified in section 675C(b)(2).

20 ‘‘(b) PATERNITY DETERMINATIONS.—During each fis21 cal year for which an eligible entity receives a grant under

22 section 675C, such entity shall—

23 ‘‘(1) inform custodial parents in single-parent

24 families that participate in programs, activities, or
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1 services carried out under this subtitle about the

2 availability of child support services;

3 ‘‘(2) refer eligible parents to the child support of4 fices of State and local governments; and

5 ‘‘(3) establish referral arrangements with such

6 offices.

7 ‘‘SEC. 684. REFERENCES.

8 ‘‘Any reference in any provision of law to the poverty

9 line set forth in section 624 or 625 of the Economic Oppor10 tunity Act of 1964 shall be construed to be a reference to

11 the poverty line defined in section 673 of this subtitle. Any

12 reference in any provision of law to any community action

13 agency designated under title II of the Economic Oppor14 tunity Act of 1964 shall be construed to be a reference to

15 an entity eligible to receive funds under the community

16 services block grant program.’’.

17 SEC. 204. ASSETS FOR INDEPENDENCE.

18 The Community Services Block Grant Act (42 U.S.C.

19 9901–9912), as amended by sections 202 and 203, is

20 amended—

21 (1) by striking ‘‘this subtitle’ each place it ap22 pears (other than in section 671) and inserting ‘‘this

23 part’’;

24 (2) by inserting the following after section 671:
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1 ‘‘CHAPTER 1—COMMUNITY SERVICES GRANTS’’;

2 and

3 (3) by adding at the end the following:

4 ‘‘CHAPTER 2—ASSETS FOR INDEPENDENCE

5 ‘‘SEC. 685. SHORT TITLE.

6 ‘‘This chapter may be cited as the ‘Assets for Independ7 ence Act’.

8 ‘‘SEC. 686. FINDINGS.

9 ‘‘Congress makes the following findings:

10 ‘‘(1) Economic well-being does not come solely

11 from income, spending, and consumption, but also re12 quires savings, investment, and accumulation of as13 sets because assets can improve economic independ14 ence and stability, connect individuals with a viable

15 and hopeful future, stimulate development of human

16 and other capital, and enhance the welfare of off17 spring.

‘‘(2) Fully 1 18 ⁄2 of all Americans have either no,

19 negligible, or negative assets available for investment,

20 just as the price of entry to the economic mainstream,

21 the cost of a house, an adequate education, and start22 ing a business, is increasing. Further, the household

23 savings rate of the United States lags far behind other

24 industrial nations presenting a barrier to economic

25 growth.
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1 ‘‘(3) In the current tight fiscal environment, the

2 United States should invest existing resources in high3 yield initiatives. There is reason to believe that the fi4 nancial returns, including increased income, tax reve5 nue, and decreased welfare cash assistance, resulting

6 from individual development accounts will far exceed

7 the cost of investment in those accounts.

8 ‘‘(4) Traditional public assistance programs con9 centrating on income and consumption have rarely

10 been successful in promoting and supporting the tran11 sition to increased economic self-sufficiency. Income12 based domestic policy should be complemented with

13 asset-based policy because, while income-based policies

14 ensure that consumption needs (including food, child

15 care, rent, clothing, and health care) are met, asset16 based policies provide the means to achieve greater

17 independence and economic well-being.

18 ‘‘SEC. 687. PURPOSES.

19 ‘‘The purposes of this chapter are to provide for the

20 establishment of demonstration projects designed to deter21 mine—

22 ‘‘(1) the social, civic, psychological, and eco23 nomic effects of providing to individuals and families

24 with limited means an incentive to accumulate assets

25 by saving a portion of their earned income;
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1 ‘‘(2) the extent to which an asset-based policy

2 that promotes saving for postsecondary education,

3 homeownership, and microenterprise development

4 may be used to enable individuals and families with

5 limited means to increase their economic self-suffi6 ciency; and

7 ‘‘(3) the extent to which an asset-based policy

8 stabilizes and improves families and the community

9 in which they live.

10 ‘‘SEC. 688. DEFINITIONS.

11 ‘‘In this chapter:

12 ‘‘(1) APPLICABLE PERIOD.—The term ‘applicable

13 period’ means, with respect to amounts to be paid

14 from a grant made for a project year, the calendar

15 year immediately preceding the calendar year in

16 which the grant is made.

17 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

18 individual’ means an individual who is selected to

19 participate by a qualified entity under section 693.

20 ‘‘(3) EMERGENCY WITHDRAWAL.—The term

21 ‘emergency withdrawal’ means a withdrawal by an

22 eligible individual that—

23 ‘‘(A) is a withdrawal of only those funds, or

24 a portion of those funds, deposited by the indi-
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1 vidual in the individual development account of

2 the individual;

3 ‘‘(B) is permitted by a qualified entity on

4 a case-by-case basis; and

5 ‘‘(C) is made for—

6 ‘‘(i) expenses for medical care or nec7 essary to obtain medical care, for the indi8 vidual or a spouse or dependent of the indi9 vidual described in paragraph (8)(D);

10 ‘‘(ii) payments necessary to prevent the

11 eviction of the individual from the residence

12 of the individual, or foreclosure on the mort13 gage for the principal residence of the indi14 vidual, as defined in paragraph (8)(B); or

15 ‘‘(iii) payments necessary to enable the

16 individual to meet necessary living expenses

17 following loss of employment.

18 ‘‘(4) HOUSEHOLD.—The term ‘household’ means

19 all individuals who share use of a dwelling unit as

20 primary quarters for living and eating separate from

21 other individuals.

22 ‘‘(5) INDIVIDUAL DEVELOPMENT ACCOUNT.—

23 ‘‘(A) IN GENERAL.—The term ‘individual

24 development account’ means a trust created or

25 organized in the United States exclusively for the
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1 purpose of paying the qualified expenses of an el2 igible individual, or enabling the eligible indi3 vidual to make an emergency withdrawal, but

4 only if the written governing instrument creat5 ing the trust meets the following requirements:

6 ‘‘(i) No contribution will be accepted

7 unless it is in cash or by check.

8 ‘‘(ii) The trustee is a federally insured

9 financial institution, or a State insured fi10 nancial institution if no federally insured

11 financial institution is available.

12 ‘‘(iii) The assets of the trust will be in13 vested in accordance with the direction of

14 the eligible individual after consultation

15 with the qualified entity providing deposits

16 for the individual under section 694.

17 ‘‘(iv) The assets of the trust will not be

18 commingled with other property except in a

19 common trust fund or common investment

20 fund.

21 ‘‘(v) Except as provided in clause (vi),

22 any amount in the trust which is attrib23 utable to a deposit provided under section

24 694 may be paid or distributed out of the

25 trust only for the purpose of paying the
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1 qualified expenses of the eligible individual,

2 or enabling the eligible individual to make

3 an emergency withdrawal.

4 ‘‘(vi) Any balance in the trust on the

5 day after the date on which the individual

6 for whose benefit the trust is established dies

7 shall be distributed within 30 days of that

8 date as directed by that individual to an9 other individual development account estab10 lished for the benefit of an eligible individ11 ual.

12 ‘‘(B) CUSTODIAL ACCOUNTS.—For purposes

13 of subparagraph (A), a custodial account shall be

14 treated as a trust if the assets of the custodial ac15 count are held by a bank (as defined in section

16 408(n) of the Internal Revenue Code of 1986) or

17 another person who demonstrates, to the satisfac18 tion of the Secretary, that the manner in which

19 such person will administer the custodial ac20 count will be consistent with the requirements of

21 this chapter, and if the custodial account would,

22 except for the fact that it is not a trust, con23 stitute an individual development account de24 scribed in subparagraph (A). For purposes of

25 this chapter, in the case of a custodial account
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1 treated as a trust by reason of the preceding sen2 tence, the custodian of that custodial account

3 shall be treated as the trustee thereof.

4 ‘‘(6) PROJECT YEAR.—The term ‘project year’

5 means, with respect to a demonstration project, any

6 of the 5 consecutive 12-month periods beginning on

7 the date the project is originally authorized to be con8 ducted.

9 ‘‘(7) QUALIFIED ENTITY.—

10 ‘‘(A) IN GENERAL.—The term ‘qualified en11 tity’ means—

12 ‘‘(i) one or more not-for-profit organi13 zations described in section 501(c)(3) of the

14 Internal Revenue Code of 1986 and exempt

15 from taxation under section 501(a) of such

16 Code; or

17 ‘‘(ii) a State or local government agen18 cy, or a tribal government, submitting an

19 application under section 689 jointly with

20 an organization described in clause (i).

21 ‘‘(B) RULE OF CONSTRUCTION.—Nothing in

22 this paragraph shall be construed as preventing

23 an organization described in subparagraph

24 (A)(i) from collaborating with a financial insti25 tution or for-profit community development cor-
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1 poration to carry out the purposes of this chap2 ter.

3 ‘‘(8) QUALIFIED EXPENSES.—The term ‘qualified

4 expenses’ means 1 or more of the following, as pro5 vided by the qualified entity:

6 ‘‘(A) POSTSECONDARY EDUCATIONAL EX7 PENSES.—Postsecondary educational expenses

8 paid from an individual development account

9 directly to an eligible educational institution. In

10 this subparagraph:

11 ‘‘(i) POSTSECONDARY EDUCATIONAL

12 EXPENSES.—The term ‘postsecondary edu13 cational expenses’ means the following:

14 ‘‘(I) TUITION AND FEES.—Tuition

15 and fees required for the enrollment or

16 attendance of a student at an eligible

17 educational institution.

18 ‘‘(II) FEES, BOOKS, SUPPLIES,

19 AND EQUIPMENT.—Fees, books, sup20 plies, and equipment required for

21 courses of instruction at an eligible

22 educational institution.

23 ‘‘(ii) ELIGIBLE EDUCATIONAL INSTITU24 TION.—The term ‘‘eligible educational insti25 tution’ means the following:
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1 ‘‘(I) INSTITUTION OF HIGHER

2 EDUCATION.—An institution described

3 in section 481(a)(1) or 1201(a) of the

4 Higher Education Act of 1965 (20

5 U.S.C. 1088(a)(1) or 1141(a)), as such

6 sections are in effect on the date of en7 actment of this chapter.

8 ‘‘(II) POSTSECONDARY VOCA9 TIONAL EDUCATION SCHOOL.—An area

10 vocational education school (as defined

11 in subparagraph (C) or (D) of section

12 521(4) of the Carl D. Perkins Voca13 tional and Applied Technology Edu14 cation Act (20 U.S.C. 2471(4))) which

15 is in any State (as defined in section

16 521(33) of such Act), as such sections

17 are in effect on the date of enactment

18 of this chapter.

19 ‘‘(B) FIRST-HOME PURCHASE.—Qualified

20 acquisition costs with respect to a principal resi21 dence for a qualified first-time homebuyer, if

22 paid from an individual development account

23 directly to the persons to whom the amounts are

24 due. In this subparagraph:
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1 ‘‘(i) PRINCIPAL RESIDENCE.—The term

2 ‘principal residence’ means a principal res3 idence, the qualified acquisition costs of

4 which do not exceed 100 percent of the aver5 age area purchase price applicable to such

6 residence.

7 ‘‘(ii) QUALIFIED ACQUISITION

8 COSTS.—The term ‘qualified acquisition

9 costs’ means the costs of acquiring, con10 structing, or reconstructing a residence. The

11 term includes any usual or reasonable set12 tlement, financing, or other closing costs.

13 ‘‘(iii) QUALIFIED FIRST-TIME HOME14 BUYER.—

15 ‘‘(I) IN GENERAL.—The term

16 ‘qualified first-time homebuyer’ means

17 an individual participating in the

18 project (and, if married, the individ19 ual’s spouse) who has no present own20 ership interest in a principal residence

21 during the 3-year period ending on the

22 date of acquisition of the principal res23 idence to which this subparagraph ap24 plies.
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1 ‘‘(II) DATE OF ACQUISITION.—

2 The term ‘date of acquisition’ means

3 the date on which a binding contract

4 to acquire, construct, or reconstruct the

5 principal residence to which this sub6 paragraph applies is entered into.

7 ‘‘(C) BUSINESS CAPITALIZATION.—Amounts

8 paid from an individual development account

9 directly to a business capitalization account

10 which is established in a federally insured finan11 cial institution (or in a State insured financial

12 institution if no federally insured financial in13 stitution is available) and is restricted to use

14 solely for qualified business capitalization ex15 penses. In this subparagraph:

16 ‘‘(i) QUALIFIED BUSINESS CAPITALIZA17 TION EXPENSES.—The term ‘‘qualified busi18 ness capitalization expenses’ means quali19 fied expenditures for the capitalization of a

20 qualified business pursuant to a qualified

21 plan.

22 ‘‘(ii) QUALIFIED EXPENDITURES.—The

23 term ‘qualified expenditures’ means expend24 itures included in a qualified plan, includ-
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1 ing capital, plant, equipment, working cap2 ital, and inventory expenses.

3 ‘‘(iii) QUALIFIED BUSINESS.—The

4 term ‘qualified business’ means any busi5 ness that does not contravene any law or

6 public policy (as determined by the Sec7 retary).

8 ‘‘(iv) QUALIFIED PLAN.—The term

9 ‘qualified plan’ means a business plan, or a

10 plan to use a business asset purchased,

11 which—

12 ‘‘(I) is approved by a financial

13 institution, a microenterprise develop14 ment organization, or a nonprofit loan

15 fund having demonstrated fiduciary

16 integrity;

17 ‘‘(II) includes a description of

18 services or goods to be sold, a market19 ing plan, and projected financial state20 ments; and

21 ‘‘(III) may require the eligible in22 dividual to obtain the assistance of an

23 experienced entrepreneurial adviser.

24 ‘‘(D) TRANSFERS TO IDAS OF FAMILY MEM25 BERS.—Amounts paid from an individual devel-
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1 opment account directly into another such ac2 count established for the benefit of an eligible in3 dividual who is—

4 ‘‘(i) the individual’s spouse; or

5 ‘‘(ii) any dependent of the individual

6 with respect to whom the individual is al7 lowed a deduction under section 151 of the

8 Internal Revenue Code of 1986.

9 ‘‘(9) QUALIFIED SAVINGS OF THE INDIVIDUAL

10 FOR THE PERIOD.—The term ‘qualified savings of the

11 individual for the period’ means the aggregate of the

12 amounts contributed by the individual to the individ13 ual development account of the individual during the

14 period.

15 ‘‘(10) SECRETARY.—The term ‘Secretary’ means

16 the Secretary of Health and Human Services.

17 ‘‘(11) TRIBAL GOVERNMENT.—The term ‘tribal

18 government’ means a tribal organization, as defined

19 in section 4 of the Indian Self-Determination and

20 Education Assistance Act (25 U.S.C. 450b) or a Na21 tive Hawaiian organization, as defined in section

22 9212 of the Native Hawaiian Education Act (20

23 U.S.C. 7912).
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1 ‘‘SEC. 689. APPLICATIONS.

2 ‘‘(a) ANNOUNCEMENT OF DEMONSTRATION

3 PROJECTS.—Not later than 3 months after the date of en4 actment of this chapter, the Secretary shall publicly an5 nounce the availability of funding under this chapter for

6 demonstration projects and shall ensure that applications

7 to conduct the demonstration projects are widely available

8 to qualified entities.

9 ‘‘(b) SUBMISSION.—Not later than 6 months after the

10 date of enactment of this chapter, a qualified entity may

11 submit to the Secretary an application to conduct a dem12 onstration project under this chapter.

13 ‘‘(c) CRITERIA.—In considering whether to approve an

14 application to conduct a demonstration project under this

15 chapter, the Secretary shall assess the following:

16 ‘‘(1) SUFFICIENCY OF PROJECT.—The degree to

17 which the project described in the application appears

18 likely to aid project participants in achieving eco19 nomic self-sufficiency through activities requiring

20 qualified expenses. In making such assessment, the

21 Secretary shall consider the overall quality of project

22 activities in making any particular kind or combina23 tion of qualified expenses to be an essential feature of

24 any project.
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1 ‘‘(2) ADMINISTRATIVE ABILITY.—The experience

2 and ability of the applicant to responsibly administer

3 the project.

4 ‘‘(3) ABILITY TO ASSIST PARTICIPANTS.—The ex5 perience and ability of the applicant in recruiting,

6 educating, and assisting project participants to in7 crease their economic independence and general well8 being through the development of assets.

9 ‘‘(4) COMMITMENT OF NON-FEDERAL FUNDS.—

10 The aggregate amount of direct funds from non-Fed11 eral public sector and from private sources that are

12 formally committed to the project as matching con13 tributions.

14 ‘‘(5) ADEQUACY OF PLAN FOR PROVIDING INFOR15 MATION FOR EVALUATION.—The adequacy of the plan

16 for providing information relevant to an evaluation

17 of the project.

18 ‘‘(6) OTHER FACTORS.—Such other factors rel19 evant to the purposes of this chapter as the Secretary

20 may specify.

21 ‘‘(d) PREFERENCES.—In considering an application

22 to conduct a demonstration project under this chapter, the

23 Secretary shall give preference to an application that—

24 ‘‘(1) demonstrates the willingness and ability to

25 select individuals described in section 692 who are
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1 predominantly from households in which a child (or

2 children) is living with the child’s biological or adop3 tive mother or father, or with the child’s legal guard4 ian;

5 ‘‘(2) provides a commitment of non-Federal

6 funds with a proportionately greater amount of such

7 funds committed by private sector sources; and

8 ‘‘(3) targets such individuals residing within 1

9 or more relatively well-defined neighborhoods or com10 munities (including rural communities) that experi11 ence high rates of poverty or unemployment.

12 ‘‘(e) APPROVAL.—Not later than 9 months after the

13 date of enactment of this chapter, the Secretary shall, on

14 a competitive basis, approve such applications to conduct

15 demonstration projects under this chapter as the Secretary

16 deems appropriate, taking into account the assessments re17 quired by subsections (c) and (d). The Secretary is encour18 aged to ensure that the applications that are approved in19 volve a range of communities (both rural and urban) and

20 diverse populations.

21 ‘‘(f) CONTRACTS WITH NONPROFIT ENTITIES.—The

22 Secretary may contract with an entity described in section

23 501(c)(3) of the Internal Revenue Code of 1986 and exempt

24 from taxation under section 501(a) of such Code to conduct
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1 any responsibility of the Secretary under this section or sec2 tion 696 if—

3 ‘‘(1) such entity demonstrates the ability to con4 duct such responsibility; and

5 ‘‘(2) the Secretary can demonstrate that such re6 sponsibility would not be conducted by the Secretary

7 at a lower cost.

8 ‘‘SEC. 690. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

9 ‘‘(a) DEMONSTRATION AUTHORITY.—If the Secretary

10 approves an application to conduct a demonstration project

11 under this chapter, the Secretary shall, not later than 10

12 months after the date of enactment of this chapter, authorize

13 the applicant to conduct the project for 5 project years in

14 accordance with the approved application and the require15 ments of this chapter.

16 ‘‘(b) GRANT AUTHORITY.—For each project year of a

17 demonstration project conducted under this chapter, the

18 Secretary may make a grant to the qualified entity author19 ized to conduct the project. In making such a grant, the

20 Secretary shall make the grant on the first day of the project

21 year in an amount not to exceed the lesser of—

22 ‘‘(1) the aggregate amount of funds committed as

23 matching contributions by non-Federal public or pri24 vate sector sources; or

25 ‘‘(2) $1,000,000.
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1 ‘‘SEC. 691. RESERVE FUND.

2 ‘‘(a) ESTABLISHMENT.—A qualified entity under this

3 chapter, other than a State or local government agency, or

4 a tribal government, shall establish a Reserve Fund which

5 shall be maintained in accordance with this section.

6 ‘‘(b) AMOUNTS IN RESERVE FUND.—

7 ‘‘(1) IN GENERAL.—As soon after receipt as is

8 practicable, a qualified entity shall deposit in the Re9 serve Fund established under subsection (a)—

10 ‘‘(A) all funds provided to the qualified en11 tity by any public or private source in connec12 tion with the demonstration project; and

13 ‘‘(B) the proceeds from any investment

14 made under subsection (c)(2).

15 ‘‘(2) UNIFORM ACCOUNTING REGULATIONS.—The

16 Secretary shall prescribe regulations with respect to

17 accounting for amounts in the Reserve Fund estab18 lished under subsection (a).

19 ‘‘(c) USE OF AMOUNTS IN THE RESERVE FUND.—

20 ‘‘(1) IN GENERAL.—A qualified entity shall use

21 the amounts in the Reserve Fund established under

22 subsection (a) to—

23 ‘‘(A) assist participants in the demonstra24 tion project in obtaining the skills (including

25 economic literacy, budgeting, credit, and counsel26 ing) and information necessary to achieve eco-
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1 nomic self-sufficiency through activities requir2 ing qualified expenses;

3 ‘‘(B) provide deposits in accordance with

4 section 694 for individuals selected by the quali5 fied entity to participate in the demonstration

6 project;

7 ‘‘(C) administer the demonstration project;

8 and

9 ‘‘(D) provide the research organization eval10 uating the demonstration project under section

11 698 with such information with respect to the

12 demonstration project as may be required for the

13 evaluation.

14 ‘‘(2) AUTHORITY TO INVEST FUNDS.—

15 ‘‘(A) GUIDELINES.—The Secretary shall es16 tablish guidelines for investing amounts in the

17 Reserve Fund established under subsection (a) in

18 a manner that provides an appropriate balance

19 between return, liquidity, and risk.

20 ‘‘(B) INVESTMENT.—A qualified entity shall

21 invest the amounts in its Reserve Fund that are

22 not immediately needed to carry out the provi23 sions of paragraph (1), in accordance with the

24 guidelines established under subparagraph (A).
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1 ‘‘(3) LIMITATION ON USES.—Not more than 9.5

2 percent of the amounts provided to a qualified entity

3 under section 698(b) shall be used by the qualified en4 tity for the purposes described in subparagraphs (A),

5 (C), and (D) of paragraph (1), of which not less than

6 2 percent of the amounts shall be used by the quali7 fied entity for the purposes described in paragraph

8 (1)(D). If 2 or more qualified entities are jointly ad9 ministering a project, no qualified entity shall use

10 more than its proportional share for the purposes de11 scribed in subparagraphs (A), (C), and (D) of para12 graph (1).

13 ‘‘(d) UNUSED FEDERAL GRANT FUNDS TRANSFERRED

14 TO THE SECRETARY WHEN PROJECT TERMINATES.—Not15 withstanding subsection (c), upon the termination of any

16 demonstration project authorized under this section, the

17 qualified entity conducting the project shall transfer to the

18 Secretary an amount equal to—

19 ‘‘(1) the amounts in its Reserve Fund at time of

20 the termination; multiplied by

21 ‘‘(2) a percentage equal to—

22 ‘‘(A) the aggregate amount of grants made

23 to the qualified entity under section 698(b); di24 vided by
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1 ‘‘(B) the aggregate amount of all funds pro2 vided to the qualified entity by all sources to

3 conduct the project.

4 ‘‘SEC. 692. ELIGIBILITY FOR PARTICIPATION.

5 ‘‘(a) IN GENERAL.—Any individual who is a member

6 of a household that is eligible for assistance under the State

7 temporary assistance for needy families program estab8 lished under part A of title IV of the Social Security Act

9 (42 U.S.C. 601 et seq.), or that meets each of the following

10 requirements shall be eligible to participate in a demonstra11 tion project conducted under this chapter:

12 ‘‘(1) INCOME TEST.—The adjusted gross income

13 of the household does not exceed the earned income

14 amount described in section 32 of the Internal Reve15 nue Code of 1986 (taking into account the size of the

16 household).

17 ‘‘(2) NET WORTH TEST.—

18 ‘‘(A) IN GENERAL.—The net worth of the

19 household, as of the end of the calendar year pre20 ceding the determination of eligibility, does not

21 exceed $10,000.

22 ‘‘(B) DETERMINATION OF NET WORTH.—

23 For purposes of subparagraph (A), the net worth

24 of a household is the amount equal to—
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1 ‘‘(i) the aggregate market value of all

2 assets that are owned in whole or in part

3 by any member of the household; minus

4 ‘‘(ii) the obligations or debts of any

5 member of the household.

6 ‘‘(C) EXCLUSIONS.—For purposes of deter7 mining the net worth of a household, a house8 hold’s assets shall not be considered to include

9 the primary dwelling unit and 1 motor vehicle

10 owned by the household.

11 ‘‘(b) INDIVIDUALS UNABLE TO COMPLETE THE

12 PROJECT.—The Secretary shall establish such regulations

13 as are necessary, including prohibiting future eligibility to

14 participate in any other demonstration project conducted

15 under this chapter, to ensure compliance with this chapter

16 if an individual participating in the demonstration project

17 moves from the community in which the project is con18 ducted or is otherwise unable to continue participating in

19 that project.

20 ‘‘SEC. 693. SELECTION OF INDIVIDUALS TO PARTICIPATE.

21 ‘‘From among the individuals eligible to participate

22 in a demonstration project conducted under this chapter,

23 each qualified entity shall select the individuals—

24 ‘‘(1) that the qualified entity deems to be best

25 suited to participate; and
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1 ‘‘(2) to whom the qualified entity will provide

2 deposits in accordance with section 694.

3 ‘‘SEC. 694. DEPOSITS BY QUALIFIED ENTITIES.

4 ‘‘(a) IN GENERAL.—Not less than once every 3 months

5 during each project year, each qualified entity under this

6 Act shall deposit in the individual development account of

7 each individual participating in the project, or into a par8 allel account maintained by the qualified entity—

9 ‘‘(1) from the non-Federal funds described in sec10 tion 689(c)(4), a matching contribution of not less

11 than $0.50 and not more than $4 for every $1 of

12 earned income (as defined in section 911(d)(2) of the

13 Internal Revenue Code of 1986) deposited in the ac14 count by a project participant during that period;

15 ‘‘(2) from the grant made under section 690(b),

16 an amount equal to the matching contribution made

17 under paragraph (1); and

18 ‘‘(3) any interest that has accrued on amounts

19 deposited under paragraph (1) or (2) on behalf of that

20 individual into the individual development account of

21 the individual or into a parallel account maintained

22 by the qualified entity.

23 ‘‘(b) LIMITATION ON DEPOSITS FOR AN INDIVIDUAL.—

24 Not more than $2,000 from a grant made under section
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1 690(b) shall be provided to any 1 individual over the course

2 of the demonstration project.

3 ‘‘(c) LIMITATION ON DEPOSITS FOR A HOUSEHOLD.—

4 Not more than $4,000 from a grant made under section

5 690(b) shall be provided to any 1 household over the course

6 of the demonstration project.

7 ‘‘(d) WITHDRAWAL OF FUNDS.—The Secretary shall

8 establish such guidelines as may be necessary to ensure that

9 funds held in an individual development account are not

10 withdrawn, except for 1 or more qualified expenses, or for

11 an emergency withdrawal. Such guidelines shall include a

12 requirement that a responsible official of the qualified en13 tity conducting a project approve such withdrawal in writ14 ing. The guidelines shall provide that no individual may

15 withdraw funds from an individual development account

16 earlier than 6 months after the date on which the individual

17 first deposits funds in the account.

18 ‘‘(e) REIMBURSEMENT.—An individual shall reim19 burse an individual development account for any funds

20 withdrawn from the account for an emergency withdrawal,

21 not later than 12 months after the date of the withdrawal.

22 If the individual fails to make the reimbursement, the quali23 fied entity administering the account shall transfer the

24 funds deposited into the account or a parallel account under

25 section 694 to the Reserve Fund of the qualified entity, and
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1 use the funds to benefit other individuals participating in

2 the demonstration project involved.

3 ‘‘SEC. 695. LOCAL CONTROL OVER DEMONSTRATION

4 PROJECTS.

5 ‘‘A qualified entity under this chapter, other than a

6 State or local government agency or a tribal government,

7 shall, subject to the provisions of section 697, have sole au8 thority over the administration of the project. The Secretary

9 may prescribe only such regulations or guidelines with re10 spect to demonstration projects conducted under this chap11 ter as are necessary to ensure compliance with the approved

12 applications and the requirements of this chapter.

13 ‘‘SEC. 695A. GRANDFATHERING OF EXISTING STATEWIDE

14 PROGRAMS.

15 ‘‘Any statewide asset-building program consistent with

16 the purposes of this chapter that is established in State law

17 as of the date of enactment of this Act, and that as of such

18 date is operating with an annual State appropriation of

19 not less than $1,000,000 in non-Federal funds, shall be

20 deemed to have met the requirements of section 688 and

21 to be eligible for consideration by the Secretary as a dem22 onstration program described in this chapter. Applications

23 submitted by such statewide program shall be considered

24 for funding by the Secretary notwithstanding the pref25 erences listed in section 689(d). Any program requirements
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1 under sections 691 through 695 that are inconsistent with

2 State statutory requirements in effect on such date govern3 ing such statewide program are hereby waived.

4 ‘‘SEC. 696. ANNUAL PROGRESS REPORTS.

5 ‘‘(a) IN GENERAL.—Each qualified entity under this

6 chapter shall prepare an annual report on the progress of

7 the demonstration project. Each report shall include both

8 program and participant information and shall specify for

9 the period covered by the report the following information:

10 ‘‘(1) The number and characteristics of individ11 uals making a deposit into an individual develop12 ment account.

13 ‘‘(2) The amounts in the Reserve Fund estab14 lished with respect to the project.

15 ‘‘(3) The amounts deposited in the individual de16 velopment accounts.

17 ‘‘(4) The amounts withdrawn from the individ18 ual development accounts and the purposes for which

19 such amounts were withdrawn.

20 ‘‘(5) The balances remaining in the individual

21 development accounts.

22 ‘‘(6) The savings account characteristics (such as

23 threshold amounts and match rates) required to stim24 ulate participation in the demonstration project, and
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1 how such characteristics vary among different popu2 lations or communities.

3 ‘‘(7) What service configurations of the qualified

4 entity (such as peer support, structured planning ex5 ercises, mentoring, and case management) increased

6 the rate and consistency of participation in the dem7 onstration project and how such configurations varied

8 among different populations or communities.

9 ‘‘(8) Such other information as the Secretary

10 may require to evaluate the demonstration project.

11 ‘‘(b) SUBMISSION OF REPORTS.—The qualified entity

12 shall submit each report required to be prepared under sub13 section (a) to—

14 ‘‘(1) the Secretary; and

15 ‘‘(2) the Treasurer (or equivalent official) of the

16 State in which the project is conducted, if the State

17 or a local government or a tribal government commit18 ted funds to the demonstration project.

19 ‘‘(c) TIMING.—The first report required by subsection

20 (a) shall be submitted not later than 60 days after the end

21 of the calendar year in which the Secretary authorized the

22 qualified entity to conduct the demonstration project, and

23 subsequent reports shall be submitted every 12 months there24 after, until the conclusion of the project.
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1 ‘‘SEC. 697. SANCTIONS.

2 ‘‘(a) AUTHORITY TO TERMINATE DEMONSTRATION

3 PROJECT.—If the Secretary determines that a qualified en4 tity under this chapter is not operating the demonstration

5 project in accordance with the entity’s application or the

6 requirements of this chapter (and has not implemented any

7 corrective recommendations directed by the Secretary), the

8 Secretary shall terminate such entity’s authority to conduct

9 the demonstration project.

10 ‘‘(b) ACTIONS REQUIRED UPON TERMINATION.—If the

11 Secretary terminates the authority to conduct a demonstra12 tion project, the Secretary—

13 ‘‘(1) shall suspend the demonstration project;

14 ‘‘(2) shall take control of the Reserve Fund estab15 lished pursuant to section 691;

16 ‘‘(3) shall make every effort to identify another

17 qualified entity (or entities) willing and able to con18 duct the project in accordance with the approved ap19 plication (or, as modified, if necessary to incorporate

20 the recommendations) and the requirements of this

21 chapter;

22 ‘‘(4) shall, if the Secretary identifies an entity

23 (or entities) described in paragraph (3)—

24 ‘‘(A) authorize the entity (or entities) to

25 conduct the project in accordance with the ap26 proved application (or, as modified, if necessary,
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1 to incorporate the recommendations) and the re2 quirements of this chapter;

3 ‘‘(B) transfer to the entity (or entities) con4 trol over the Reserve Fund established pursuant

5 to section 691; and

6 ‘‘(C) consider, for purposes of this chapter—

7 ‘‘(i) such other entity (or entities) to be

8 the qualified entity (or entities) originally

9 authorized to conduct the demonstration

10 project; and

11 ‘‘(ii) the date of such authorization to

12 be the date of the original authorization;

13 and

14 ‘‘(5) if, by the end of the 1-year period beginning

15 on the date of the termination, the Secretary has not

16 found a qualified entity (or entities) described in

17 paragraph (3), shall—

18 ‘‘(A) terminate the project; and

19 ‘‘(B) from the amount remaining in the Re20 serve Fund established as part of the project,

21 remit to each source that provided funds under

22 section 689(c)(4) to the entity originally author23 ized to conduct the project, an amount that bears

24 the same ratio to the amount so remaining as

25 the amount provided by the source under section
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1 689(c)(4) bears to the amount provided by all

2 such sources under that section.

3 ‘‘SEC. 698. EVALUATIONS.

4 ‘‘(a) IN GENERAL.—Not later than 10 months after the

5 date of enactment of this chapter, the Secretary shall enter

6 into a contract with an independent research organization

7 to evaluate, individually and as a group, all qualified enti8 ties and sources participating in the demonstration projects

9 conducted under this chapter.

10 ‘‘(b) FACTORS TO EVALUATE.—In evaluating any

11 demonstration project conducted under this chapter, the re12 search organization shall address the following factors:

13 ‘‘(1) The effects of incentives and organizational

14 or institutional support on savings behavior in the

15 demonstration project.

16 ‘‘(2) The savings rates of individuals in the dem17 onstration project based on demographic characteris18 tics including gender, age, family size, race or ethnic

19 background, and income.

20 ‘‘(3) The economic, civic, psychological, and so21 cial effects of asset accumulation, and how such effects

22 vary among different populations or communities.

23 ‘‘(4) The effects of individual development ac24 counts on homeownership, level of postsecondary edu25 cation attained, and self-employment, and how such
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1 effects vary among different populations or commu2 nities.

3 ‘‘(5) The potential financial returns to the Fed4 eral Government and to other public sector and pri5 vate sector investors in individual development ac6 counts over a 5-year and 10-year period of time.

7 ‘‘(6) The lessons to be learned from the dem8 onstration projects conducted under this chapter and

9 if a permanent program of individual development

10 accounts should be established.

11 ‘‘(7) Such other factors as may be prescribed by

12 the Secretary.

13 ‘‘(c) METHODOLOGICAL REQUIREMENTS.—In evaluat14 ing any demonstration project conducted under this chap15 ter, the research organization shall—

16 ‘‘(1) for at least 1 site, use control groups to

17 compare participants with nonparticipants;

18 ‘‘(2) before, during, and after the project, obtain

19 such quantitative data as are necessary to evaluate

20 the project thoroughly; and

21 ‘‘(3) develop a qualitative assessment, derived

22 from sources such as in-depth interviews, of how asset

23 accumulation affects individuals and families.

24 ‘‘(d) REPORTS BY THE SECRETARY.—
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1 ‘‘(1) INTERIM REPORTS.—Not later than 90 days

2 after the end of the calendar year in which the Sec3 retary first authorizes a qualified entity to conduct a

4 demonstration project under this chapter, and every

5 12 months thereafter until all demonstration projects

6 conducted under this chapter are completed, the Sec7 retary shall submit to Congress an interim report set8 ting forth the results of the reports submitted pursu9 ant to section 696(b).

10 ‘‘(2) FINAL REPORTS.—Not later than 12 months

11 after the conclusion of all demonstration projects con12 ducted under this chapter, the Secretary shall submit

13 to Congress a final report setting forth the results and

14 findings of all reports and evaluations conducted pur15 suant to this chapter.

16 ‘‘(e) EVALUATION EXPENSES.—The Secretary shall ex17 pend such sums as may be necessary, but not less than 2

18 percent of the amount appropriated under section 699A for

19 a fiscal year, to carry out the purposes of this section.

20 ‘‘SEC. 699. TREATMENT OF FUNDS.

21 ‘‘Of the funds deposited in individual development ac22 counts for eligible individuals, only the funds deposited by

23 the individuals (including interest accruing on those funds)

24 may be considered to be income, assets, or resources of the

25 individuals for purposes of determining eligibility for, or
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1 the amount of assistance furnished under, any Federal or

2 federally assisted program based on need.

3 ‘‘SEC. 699A. AUTHORIZATION OF APPROPRIATIONS.

4 ‘‘There is authorized to be appropriated to carry out

5 this chapter, $25,000,000 for each of fiscal years 1999,

6 2000, 2001, and 2002, to remain available until expended.’’.

7 SEC. 205. EFFECTIVE DATE; APPLICATION OF AMEND8 MENTS.

9 (a) EFFECTIVE DATE.—Except as provided in sub10 section (b), this title and the amendments made by this title

11 shall take effect on the date of the enactment of this Act.

12 (b) APPLICATION OF AMENDMENTS.—The amendments

13 made by this title shall not apply with respect to fiscal

14 years ending before October 1, 1998.

15 TITLE III—AMENDMENTS TO THE

16 LOW-INCOME HOME ENERGY

17 ASSISTANCE ACT OF 1981

18 SEC. 301. SHORT TITLE.

19 This title may be cited as the ‘‘Low-Income Home En20 ergy Assistance Amendments of 1998’’.

21 SEC. 302. AUTHORIZATION.

22 (a) IN GENERAL.—Section 2602(b) of the Low-Income

23 Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b))

24 is amended by inserting ‘‘, $1,100,000,000 for fiscal year
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1 2000, and such sums as may be necessary for fiscal year

2 2001’’ after ‘‘1995 through 1999’’.

3 (b) PROGRAM YEAR.—Section 2602(c) of Low-Income

4 Home Energy Assistance Act of 1981 (42 U.S.C. 8621(c))

5 is amended to read as follows:

6 ‘‘(c) Amounts appropriated under this section in any

7 fiscal year for programs and activities under this title shall

8 be made available for obligation in the succeeding fiscal

9 year.’’.

10 (c) INCENTIVE PROGRAM FOR LEVERAGING NON-FED11 ERAL RESOURCES.—Section 2602(d) of the Low-Income

12 Home Energy Assistance Act of 1981 (42 U.S.C. 8621(d))

13 is amended by striking ‘‘for each of the fiscal years 1996’’

14 and all that follows through the period at the end, and in15 serting ‘‘for each of the fiscal years 1999, 2000, and 2001.’’.

16 (d) TECHNICAL AMENDMENT.—Section 2602(e) of

17 Low-Income Home Energy Assistance Act of 1981 (42

18 U.S.C. 8621(e)) is amended by striking ‘‘subsection (g)’’

19 and inserting ‘‘subsection (e) of such section’’.

20 SEC. 303. DEFINITIONS.

21 Section 2603(4) of the Low-Income Home Energy As22 sistance Act of 1981 (42 U.S.C. 8622(4)) is amended—

23 (1) by striking ‘‘the term’’ and inserting ‘‘The

24 term’’; and
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1 (2) by striking the semicolon and inserting a pe2 riod.

3 SEC. 304. NATURAL DISASTERS AND OTHER EMERGENCIES.

4 (a) DEFINITIONS.—Section 2603 of the Low-Income

5 Home Energy Assistance Act of 1981 (42 U.S.C. 8622) is

6 amended—

7 (1) by redesignating paragraphs (6) through (9)

8 as paragraphs (8) through (11), respectively;

9 (2) by inserting before paragraph (8) (as redesig10 nated in paragraph (1)) the following:

11 ‘‘(7) NATURAL DISASTER.—The term ‘natural

12 disaster’ means a weather event (relating to cold or

13 hot weather), flood, earthquake, tornado, hurricane, or

14 ice storm, or an event meeting such other criteria as

15 the Secretary, in the discretion of the Secretary, may

16 determine to be appropriate.’’;

17 (3) by redesignating paragraphs (1) through (5)

18 as paragraphs (2) through (6), respectively; and

19 (4) by inserting before paragraph (2) (as redesig20 nated in paragraph (3)) the following:

21 ‘‘(1) EMERGENCY.—The term ‘emergency’ means—

22 ‘‘(A) a natural disaster;

23 ‘‘(B) a significant home energy supply shortage

24 or disruption;
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1 ‘‘(C) a significant increase in the cost of home

2 energy, as determined by the Secretary;

3 ‘‘(D) a significant increase in home energy dis4 connections reported by a utility, a State regulatory

5 agency, or another agency with necessary data;

6 ‘‘(E) a significant increase in participation in a

7 public benefit program such as the food stamp pro8 gram carried out under the Food Stamp Act of 1977

9 (7 U.S.C. 2011 et seq.), the national program to pro10 vide supplemental security income carried out under

11 title XVI of the Social Security Act (42 U.S.C. 1381

12 et seq.), or the State temporary assistance for needy

13 families program carried out under part A of title IV

14 of the Social Security Act (42 U.S.C. 601 et seq.), as

15 determined by the head of the appropriate Federal

16 agency;

17 ‘‘(F) a significant increase in unemployment,

18 layoffs, or the number of households with an individ19 ual applying for unemployment benefits, as deter20 mined by the Secretary of Labor; or

21 ‘‘(G) an event meeting such criteria as the Sec22 retary, in the discretion of the Secretary, may deter23 mine to be appropriate.’’.

24 (b) CONSIDERATIONS.—Section 2604(g) of Low-In25 come Home Energy Assistance Act of 1981 (42 U.S.C.
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1 8623(g)) is amended by striking the last 2 sentences and

2 inserting the following: ‘‘In determining whether to make

3 such an allotment to a State, the Secretary shall take into

4 account the extent to which the State was affected by the

5 natural disaster or other emergency involved, the availabil6 ity to the State of other resources under the program carried

7 out under this title or any other program, whether a Mem8 ber of Congress has requested that the State receive the allot9 ment, and such other factors as the Secretary may find to

10 be relevant. Not later than 30 days after making the deter11 mination, but prior to releasing an allotted amount to a

12 State, the Secretary shall notify Congress of the allotments

13 made pursuant to this subsection.’’.

14 SEC. 305. STATE ALLOTMENTS.

15 Section 2604 of the Low-Income Home Energy Assist16 ance Act of 1981 (42 U.S.C. 8623) is amended—

17 (1) in subsection (b)(1), by striking ‘‘the North18 ern Mariana Islands, and the Trust Territory of the

19 Pacific Islands.’’ and inserting ‘‘and the Common20 wealth of the Northern Mariana Islands.’’;

21 (2) in subsection (c)(3)(B)(ii), by striking ‘‘ap22 plication’’ and inserting ‘‘applications’’;

23 (3) by striking subsection (f);
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1 (4) in the first sentence of subsection (g), by

2 striking ‘‘(a) through (f)’’ and inserting ‘‘(a) through

3 (d)’’; and

4 (5) by redesignating subsection (g) as subsection

5 (e).

6 SEC. 306. ADMINISTRATION.

7 Section 2605 of the Low-Income Home Energy Assist8 ance Act of 1981 (42 U.S.C. 8624) is amended—

9 (1) in subsection (b)—

10 (A) in paragraph (9)(A), by striking ‘‘and

11 not transferred pursuant to section 2604(f) for

12 use under another block grant’’;

13 (B) in paragraph (14), by striking ‘‘; and’’

14 and inserting a semicolon;

15 (C) in the matter following paragraph (14),

16 by striking ‘‘The Secretary may not prescribe the

17 manner in which the States will comply with the

18 provisions of this subsection.’’; and

19 (D) in the matter following paragraph (16),

20 by inserting before ‘‘The Secretary shall issue’’

21 the following: ‘‘The Secretary may not prescribe

22 the manner in which the States will comply with

23 the provisions of this subsection.’’; and

24 (2) in subsection (c)(1)—
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1 (A) in subparagraph (B), by striking

2 ‘‘States’’ and inserting ‘‘State’’; and

3 (B) in subparagraph (G)(i), by striking

4 ‘‘has’’ and inserting ‘‘had’’; and

5 (3) in paragraphs (1) and (2)(A) of subsection

6 (k) by inserting ‘‘, particularly those low-income

7 households with the lowest incomes that pay a high

8 proportion of household income for home energy’’ be9 fore the period.

10 SEC. 307. PAYMENTS TO STATES.

11 Section 2607(b)(2)(B) of the Low-Income Home En12 ergy Assistance Act of 1981 (42 U.S.C. 8626(b)(2)(B)) is

13 amended—

14 (1) in the first sentence, by striking ‘‘and not

15 transferred pursuant to section 2604(f)’’; and

16 (2) in the second sentence, by striking ‘‘but not

17 transferred by the State’’.

18 SEC. 308. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE

19 OPTION.

20 (a) EVALUATION.—The Comptroller General shall con21 duct an evaluation of the Residential Energy Assistance

22 Challenge program described in section 2607B of the Low23 Income Home Energy Assistance Act of 1981 (42 U.S.C.

24 8626b).
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1 (b) REPORT.—Not later than 2 years after the date

2 of enactment of this Act, the Comptroller General shall pre3 pare and submit to Congress a report containing—

4 (1) the findings resulting from the evaluation de5 scribed in subsection (a); and

6 (2) the State evaluations described in para7 graphs (1) and (2) of subsection (b) of such section

8 2607B.

9 (c) INCENTIVE GRANTS.—Section 2607B(b)(1) of the

10 Low-Income Home Energy Assistance Act of 1981 (42

11 U.S.C. 8626b(b)(1)) is amended by striking ‘‘For each of

12 the fiscal years 1996 through 1999’’ and inserting ‘‘For

13 each fiscal year’’.

14 (d) TECHNICAL AMENDMENTS.—Section 2607B of

15 Low-Income Home Energy Assistance Act of 1981 (42

16 U.S.C. 8626b) is amended—

17 (1) in subsection (e)(2)—

18 (A) by redesignating subparagraphs (F)

19 through (N) as subparagraphs (E) through (M),

20 respectively; and

21 (B) in clause (i) of subparagraph (I) (as re22 designated in subparagraph (A)), by striking

23 ‘‘on’’ and inserting ‘‘of’’; and
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1 (2) by redesignating subsection (g) as subsection

2 (f).

Attest:

Clerk.