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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2206 Enrolled Bill (ENR)]

        S.2206

                       One Hundred Fifth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight

                                 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Opportunities, 
Accountability, and Training and Educational Services Act of 1998'' or 
the ``Coats Human Services Reauthorization Act of 1998''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.

                      TITLE I--HEAD START PROGRAMS

Sec. 101. Short title.
Sec. 102. Statement of purpose.
Sec. 103. Definitions.
Sec. 104. Financial assistance for Head Start programs.
Sec. 105. Authorization of appropriations.
Sec. 106. Allotment of funds.
Sec. 107. Designation of Head Start agencies.
Sec. 108. Quality standards.
Sec. 109. Powers and functions of Head Start agencies.
Sec. 110. Head Start transition.
Sec. 111. Submission of plans to Governors.
Sec. 112. Participation in Head Start programs.
Sec. 113. Early Head Start programs for families with infants and 
          toddlers.
Sec. 114. Technical assistance and training.
Sec. 115. Professional requirements.
Sec. 116. Research and evaluation.
Sec. 117. Reports.
Sec. 118. Repeal of consultation requirement.
Sec. 119. Repeal of Head Start Transition Project Act.

            TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

Sec. 201. Reauthorization.
Sec. 202. Conforming amendments.

              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

Sec. 301. Short title.
Sec. 302. Authorization.
Sec. 303. Definitions.
Sec. 304. Natural disasters and other emergencies.
Sec. 305. State allotments.
Sec. 306. Administration.
Sec. 307. Payments to States.
Sec. 308. Residential Energy Assistance Challenge option.
Sec. 309. Technical assistance, training, and compliance reviews.

                    TITLE IV--ASSETS FOR INDEPENDENCE

Sec. 401. Short title.
Sec. 402. Findings.
Sec. 403. Purposes.
Sec. 404. Definitions.
Sec. 405. Applications.
Sec. 406. Demonstration authority; annual grants.
Sec. 407. Reserve Fund.
Sec. 408. Eligibility for participation.
Sec. 409. Selection of individuals to participate.
Sec. 410. Deposits by qualified entities.
Sec. 411. Local control over demonstration projects.
Sec. 412. Annual progress reports.
Sec. 413. Sanctions.
Sec. 414. Evaluations.
Sec. 415. Treatment of funds.
Sec. 416. Authorization of appropriations.

                      TITLE I--HEAD START PROGRAMS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Head Start Amendments of 1998''.

SEC. 102. STATEMENT OF PURPOSE.

    Section 636 of the Head Start Act (42 U.S.C. 9831) is amended to 
read as follows:

``SEC. 636. STATEMENT OF PURPOSE.

    ``It is the purpose of this subchapter to promote school readiness 
by enhancing the social and cognitive development of low-income 
children through the provision, to low-income children and their 
families, of health, educational, nutritional, social, and other 
services that are determined, based on family needs assessments, to be 
necessary.''.

SEC. 103. DEFINITIONS.

    Section 637 of the Head Start Act (42 U.S.C. 9832) is amended--
        (1) by redesignating paragraphs (1) and (2) as paragraphs (16) 
    and (17) and inserting the paragraphs at the end of the section;
        (2) by inserting before paragraph (3) the following:
        ``(1) The term `child with a disability' means--
            ``(A) a child with a disability, as defined in section 
        602(3) of the Individuals with Disabilities Education Act; and
            ``(B) an infant or toddler with a disability, as defined in 
        section 632(5) of such Act.
        ``(2) The term `delegate agency' means a public, private 
    nonprofit, or for-profit organization or agency to which a grantee 
    has delegated all or part of the responsibility of the grantee for 
    operating a Head Start program.'';
        (3) by striking paragraph (4);
        (4) by redesignating paragraph (3) as paragraph (4);
        (5) by inserting after paragraph (2) the following:
        ``(3) The term `family literacy services' means services that 
    are of sufficient intensity in terms of hours, and of sufficient 
    duration, to make sustainable changes in a family, and that 
    integrate all of the following activities:
            ``(A) Interactive literacy activities between parents and 
        their children.
            ``(B) Training for parents regarding how to be the primary 
        teacher for their children and full partners in the education 
        of their children.
            ``(C) Parent literacy training that leads to economic self-
        sufficiency.
            ``(D) An age-appropriate education to prepare children for 
        success in school and life experiences.'';
        (6) in paragraph (6), by adding at the end the following: 
    ``Nothing in this paragraph shall be construed to require an agency 
    to provide services to a child who has not reached the age of 
    compulsory school attendance for more than the number of hours per 
    day permitted by State law (including regulation) for the provision 
    of services to such a child.'';
        (7) by striking paragraph (12) and inserting the following:
        ``(12) The term `migrant and seasonal Head Start program' 
    means--
            ``(A) with respect to services for migrant farmworkers, a 
        Head Start program that serves families who are engaged in 
        agricultural labor and who have changed their residence from 
        one geographic location to another in the preceding 2-year 
        period; and
            ``(B) with respect to services for seasonal farmworkers, a 
        Head Start program that serves families who are engaged 
        primarily in seasonal agricultural labor and who have not 
        changed their residence to another geographic location in the 
        preceding 2-year period.'';
        (8) by inserting after paragraph (14) the following:
        ``(15) The term `scientifically based reading research'--
            ``(A) means the application of rigorous, systematic, and 
        objective procedures to obtain valid knowledge relevant to 
        reading development, reading instruction, and reading 
        difficulties; and
            ``(B) shall include research that--
                ``(i) employs systematic, empirical methods that draw 
            on observation or experiment;
                ``(ii) involves rigorous data analyses that are 
            adequate to test the stated hypotheses and justify the 
            general conclusions drawn;
                ``(iii) relies on measurements or observational methods 
            that provide valid data across evaluators and observers and 
            across multiple measurements and observations; and
                ``(iv) has been accepted by a peer-reviewed journal or 
            approved by a panel of independent experts through a 
            comparably rigorous, objective, and scientific review.''; 
            and
        (9) in paragraph (17) (as redesignated in paragraph (1))--
            (A) by striking ``Term'' and inserting ``term'';
            (B) by striking ``Virgin Islands,'' and inserting ``Virgin 
        Islands of the United States, and the Commonwealth of the 
        Northern Mariana Islands, but for fiscal years ending before 
        October 1, 2001 (and fiscal year 2002, if the legislation 
        described in section 640(a)(2)(B)(iii) has not been enacted 
        before September 30, 2001), also means''; and
            (C) by striking ``Palau, and the Commonwealth of the 
        Northern Mariana Islands.'' and inserting ``and the Republic of 
        Palau.''.

SEC. 104. FINANCIAL ASSISTANCE FOR HEAD START PROGRAMS.

    Section 638(1) of the Head Start Act (42 U.S.C. 9833(1)) is 
amended--
        (1) by striking ``aid the'' and inserting ``enable the''; and
        (2) by striking the semicolon and inserting ``and attain school 
    readiness;''.

SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

    Section 639 of the Head Start Act (42 U.S.C. 9834) is amended--
        (1) in subsection (a), by striking ``1995 through 1998'' and 
    inserting ``1999 through 2003''; and
        (2) in subsection (b), by striking paragraphs (1) and (2) and 
    inserting the following:
        ``(1) for each of fiscal years 1999 through 2003 to carry out 
    activities authorized under section 642A, not more than $35,000,000 
    but not less than the amount that was made available for such 
    activities for fiscal year 1998;
        ``(2) not more than $5,000,000 for each of fiscal years 1999 
    through 2003 to carry out impact studies under section 649(g); and
        ``(3) not more than $12,000,000 for fiscal year 1999, and such 
    sums as may be necessary for each of fiscal years 2000 through 
    2003, to carry out other research, demonstration, and evaluation 
    activities, including longitudinal studies, under section 649.''.

SEC. 106. ALLOTMENT OF FUNDS.

    (a) Allotments.--Section 640(a) of the Head Start Act (42 U.S.C. 
9835(a)) is amended--
        (1) in paragraph (2)--
            (A) in subparagraph (A)--
                (i) by striking ``and migrant'' the first place it 
            appears and all that follows through ``handicapped 
            children'', and inserting ``Head Start programs, services 
            for children with disabilities, and migrant and seasonal 
            Head Start programs'';
                (ii) by striking ``and migrant'' each other place it 
            appears and inserting ``Head Start programs and by migrant 
            and seasonal''; and
                (iii) by striking ``1994'' and inserting ``1998'';
            (B) in subparagraph (B), by striking ``(B) payments'' and 
        all that follows through ``Virgin Islands according'' and 
        inserting the following:
        ``(B) payments, subject to paragraph (7)--
            ``(i) to Guam, American Samoa, the Commonwealth of the 
        Northern Mariana Islands, and the Virgin Islands of the United 
        States;
            ``(ii) for fiscal years ending before October 1, 2001, to 
        the Federated States of Micronesia, the Republic of the 
        Marshall Islands, and the Republic of Palau; and
            ``(iii) if legislation approving renegotiated Compacts of 
        Free Association for the jurisdictions described in clause (ii) 
        has not been enacted before September 30, 2001, for fiscal year 
        2002 to those jurisdictions;
    according'';
            (C) in subparagraph (C), by striking ``; and'' and 
        inserting ``, of which not less than $3,000,000 of the amount 
        appropriated for such fiscal year shall be made available to 
        carry out activities described in section 648(c)(4);'';
            (D) in subparagraph (D), by striking ``related to the 
        development and implementation of quality improvement plans 
        under section 641A(d)(2).'' and inserting ``carried out under 
        paragraph (1), (2), or (3) of section 641A(d) related to 
        correcting deficiencies and conducting proceedings to terminate 
        the designation of Head Start agencies; and'';
            (E) by inserting after subparagraph (D) the following:
        ``(E) payments for research, demonstration, and evaluation 
    activities under section 649.''; and
            (F) by adding at the end the following: ``No Freely 
        Associated State may receive financial assistance under this 
        subchapter after fiscal year 2002.'';
        (2) in paragraph (3)--
            (A) in subparagraph (A)(i), by striking ``equal'' and all 
        that follows through ``amount;'' and inserting ``equal to the 
        sum of--
        ``(I) 60 percent of such excess amount for fiscal year 1999, 50 
    percent of such excess amount for fiscal year 2000, 47.5 percent of 
    such excess amount for fiscal year 2001, 35 percent of such excess 
    amount for fiscal year 2002, and 25 percent of such excess amount 
    for fiscal year 2003;'';
            (B) in subparagraph (B)--
                (i) in clause (ii)--

                    (I) by striking ``adequate qualified staff'' and 
                inserting ``adequate numbers of qualified staff''; and
                    (II) by inserting ``and children with 
                disabilities'' before ``, when'';

                (ii) in clause (iv), by inserting before the period the 
            following: ``, and to encourage the staff to continually 
            improve their skills and expertise by informing the staff 
            of the availability of Federal and State incentive and loan 
            forgiveness programs for professional development'';
                (iii) in clause (v), by inserting ``and collaboration 
            efforts for such programs'' before the period;
                (iv) in clause (vi), by striking the period and 
            inserting ``, and are accessible to children with 
            disabilities and their parents.'';
                (v) by redesignating clause (vii) as clause (viii); and
                (vi) by inserting after clause (vi) the following:
        ``(vii) Ensuring that such programs have qualified staff that 
    can promote language skills and literacy growth of children and 
    that can provide children with a variety of skills that have been 
    identified, through scientifically based reading research, as 
    predictive of later reading achievement.'';
            (C) in subparagraph (C)--
                (i) in clause (i)--

                    (I) in subclause (I)--

                        (aa) by striking ``this subparagraph'' and 
                    inserting ``this paragraph'';
                        (bb) by striking ``of staff'' and inserting 
                    ``of classroom teachers and other staff'';
                        (cc) by striking ``such staff'' and inserting 
                    ``qualified staff, including recruitment and 
                    retention pursuant to achieving the requirements 
                    set forth in section 648A(a)''; and
                        (dd) by adding at the end the following: 
                    ``Preferences in awarding salary increases, in 
                    excess of cost-of-living allowances, with such 
                    funds shall be granted to classroom teachers and 
                    staff who obtain additional training or education 
                    related to their responsibilities as employees of a 
                    Head Start program.'';

                    (II) in subclause (II), by striking ``the 
                subparagraph'' and inserting ``this subparagraph''; and
                    (III) by adding at the end the following:

        ``(III) From the remainder of the amount reserved under this 
    paragraph (after the Secretary carries out subclause (I)), the 
    Secretary shall carry out any or all of the activities described in 
    clauses (ii) through (vii), placing the highest priority on the 
    activities described in clause (ii).'';
                (ii) by amending clause (ii) to read as follows:
        ``(ii) To train classroom teachers and other staff to meet the 
    education performance standards described in section 641A(a)(1)(B), 
    through activities--
            ``(I) to promote children's language and literacy growth, 
        through techniques identified through scientifically based 
        reading research;
            ``(II) to promote the acquisition of the English language 
        for non-English background children and families;
            ``(III) to foster children's school readiness skills 
        through activities described in section 648A(a)(1); and
            ``(IV) to provide training necessary to improve the 
        qualifications of the staff of the Head Start agencies and to 
        support staff training, child counseling, and other services 
        necessary to address the problems of children participating in 
        Head Start programs, including children from dysfunctional 
        families, children who experience chronic violence in their 
        communities, and children who experience substance abuse in 
        their families.'';
                (iii) by striking clause (v); and
                (iv) by redesignating clauses (vi) and (vii) as clauses 
            (v) and (vi), respectively; and
            (D) in subparagraph (D)(i)(II), by striking ``and migrant'' 
        and inserting ``Head Start programs and migrant and seasonal'';
        (3) in paragraph (4)--
            (A) in subparagraph (A), by striking ``1981'' and inserting 
        ``1998'';
            (B) by amending subparagraph (B) to read as follows:
        ``(B) any amount available after all allotments are made under 
    subparagraph (A) for such fiscal year shall be distributed 
    proportionately on the basis of the number of children less than 5 
    years of age from families whose income is below the poverty 
    line.''; and
            (C) by adding at the end the following:
``For purposes of this paragraph, for each fiscal year the Secretary 
shall use the most recent data available on the number of children less 
than 5 years of age from families whose income is below the poverty 
line, as published by the Department of Commerce, unless the Secretary 
and the Secretary of Commerce determine that use of the most recent 
data available would be inappropriate or unreliable. If the Secretary 
and the Secretary of Commerce determine that some or all of the data 
referred to in this paragraph are inappropriate or unreliable, the 
Secretaries shall issue a report setting forth their reasons in 
detail.'';
        (4) in paragraph (5)--
            (A) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (D)'';
            (B) in subparagraph (B), by inserting before the period the 
        following: ``and to encourage Head Start agencies to 
        collaborate with entities involved in State and local planning 
        processes (including the State lead agency administering the 
        financial assistance received under the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) 
        and the entities providing resource and referral services in 
        the State) in order to better meet the needs of low-income 
        children and families'';
            (C) in subparagraph (C)--
                (i) in clause (i)(I), by inserting ``the appropriate 
            regional office of the Administration for Children and 
            Families and'' before ``agencies'';
                (ii) in clause (iii), by striking ``and'' at the end;
                (iii) in clause (iv)--

                    (I) by striking ``education, and national service 
                activities,'' and inserting ``education, and community 
                service activities,'';
                    (II) by striking ``and activities'' and inserting 
                ``activities''; and
                    (III) by striking the period and inserting 
                ``(including coordination of services with those State 
                officials who are responsible for administering part C 
                and section 619 of the Individuals with Disabilities 
                Education Act (20 U.S.C. 1431-1445, 1419)), and 
                services for homeless children;''; and

                (iv) by adding at the end the following:
        ``(v) include representatives of the State Head Start 
    Association and local Head Start agencies in unified planning 
    regarding early care and education services at both the State and 
    local levels, including collaborative efforts to plan for the 
    provision of full-working-day, full calendar year early care and 
    education services for children; and
        ``(vi) encourage local Head Start agencies to appoint a State 
    level representative to represent Head Start agencies within the 
    State in conducting collaborative efforts described in 
    subparagraphs (B) and (D), and in clause (v).'';
            (D) by redesignating subparagraph (D) as subparagraph (F); 
        and
            (E) by inserting after subparagraph (C) the following:
    ``(D) Following the award of collaboration grants described in 
subparagraph (B), the Secretary shall provide, from the reserved sums, 
supplemental funding for collaboration grants--
        ``(i) to States that (in consultation with their State Head 
    Start Associations) develop statewide, regional, or local unified 
    plans for early childhood education and child care that include the 
    participation of Head Start agencies; and
        ``(ii) to States that engage in other innovative collaborative 
    initiatives, including plans for collaborative training and 
    professional development initiatives for child care, early 
    childhood education and Head Start service managers, providers, and 
    staff.
    ``(E)(i) The Secretary shall--
        ``(I) review on an ongoing basis evidence of barriers to 
    effective collaboration between Head Start programs and other 
    Federal, State, and local child care and early childhood education 
    programs and resources;
        ``(II) develop initiatives, including providing additional 
    training and technical assistance and making regulatory changes, in 
    necessary cases, to eliminate barriers to the collaboration; and
        ``(III) develop a mechanism to resolve administrative and 
    programmatic conflicts between programs described in subclause (I) 
    that would be a barrier to service providers, parents, or children 
    related to the provision of unified services and the consolidation 
    of funding for child care services.
    ``(ii) In the case of a collaborative activity funded under this 
subchapter and another provision of law providing for Federal child 
care or early childhood education, the use of equipment and 
nonconsumable supplies purchased with funds made available under this 
subchapter or such provision shall not be restricted to children 
enrolled or otherwise participating in the program carried out under 
that subchapter or provision, during a period in which the activity is 
predominantly funded under this subchapter or such provision.''; and
        (5) in paragraph (6)--
            (A) by inserting ``(A)'' before ``From'';
            (B) by striking ``3 percent'' and all that follows and 
        inserting the following: ``7.5 percent for fiscal year 1999, 8 
        percent for fiscal year 2000, 9 percent for fiscal year 2001, 
        10 percent for fiscal year 2002, and 10 percent for fiscal year 
        2003, of the amount appropriated pursuant to section 639(a), 
        except as provided in subparagraph (B).''; and
            (C) by adding at the end the following:
    ``(B)(i) If the Secretary does not submit an interim report on the 
preliminary findings of the Early Head Start impact study currently 
being conducted by the Secretary (as of the date of enactment of the 
Head Start Amendments of 1998) to the appropriate committees by June 1, 
2001, the amount of the reserved portion for fiscal year 2002 that 
exceeds the reserved portion for fiscal year 2001, if any, shall be 
used for quality improvement activities described in section 640(a)(3) 
and shall not be used to serve an increased number of eligible children 
under section 645A.
    ``(ii) If the Secretary does not submit a final report on the Early 
Head Start impact study to the appropriate committees by June 1, 2002, 
or if the Secretary finds in the report that there are substantial 
deficiencies in the programs carried out under section 645A, the amount 
of the reserved portion for fiscal year 2003 that exceeds the reserved 
portion for fiscal year 2002, if any, shall be used for quality 
improvement activities described in section 640(a)(3) and shall not be 
used to serve an increased number of eligible children under section 
645A.
    ``(iii) In this subparagraph:
        ``(I) The term `appropriate committees' means the Committee on 
    Education and the Workforce and the Committee on Appropriations of 
    the House of Representatives and the Committee on Labor and Human 
    Resources and the Committee on Appropriations of the Senate.
        ``(II) The term `reserved portion', used with respect to a 
    fiscal year, means the amount required to be used in accordance 
    with subparagraph (A) for that fiscal year.
    ``(C)(i) For any fiscal year for which the Secretary determines 
that the amount appropriated under section 639(a) is not sufficient to 
permit the Secretary to reserve the portion described in subparagraph 
(A) without reducing the number of children served by Head Start 
programs or adversely affecting the quality of Head Start services, 
relative to the number of children served and the quality of the 
services during the preceding fiscal year, the Secretary may reduce the 
percentage of funds required to be reserved for the portion described 
in subparagraph (A) for the fiscal year for which the determination is 
made, but not below the percentage required to be so reserved for the 
preceding fiscal year.
    ``(ii) For any fiscal year for which the amount appropriated under 
section 639(a) is reduced to a level that requires a lower amount to be 
made available under this subchapter to Head Start agencies and 
entities described in section 645A, relative to the amount made 
available to the agencies and entities for the preceding fiscal year, 
adjusted as described in paragraph (3)(A)(ii), the Secretary shall 
proportionately reduce--
        ``(I) the amounts made available to the entities for programs 
    carried out under section 645A; and
        ``(II) the amounts made available to Head Start agencies for 
    Head Start programs.''.
    (b) Children With Disabilities.--Section 640(d) of the Head Start 
Act (42 U.S.C. 9835(d)) is amended--
        (1) by striking ``1982'' and inserting ``1999'';
        (2) by striking ``(as defined in section 602(a) of the 
    Individuals with Disabilities Education Act)''; and
        (3) by adding at the end the following: ``Such policies and 
    procedures shall require Head Start agencies to coordinate 
    programmatic efforts with efforts to implement part C and section 
    619 of the Individuals with Disabilities Education Act (20 U.S.C 
    1431-1445, 1419).''.
    (c) Increased Appropriations.--Section 640(g) of the Head Start Act 
(42 U.S.C. 9835(g)) is amended--
        (1) in paragraph (2)--
            (A) in subparagraph (A), by striking the semicolon and 
        inserting ``, and the performance history of the applicant in 
        providing services under other Federal programs (other than the 
        program carried out under this subchapter);'';
            (B) in subparagraph (C), by striking the semicolon and 
        inserting ``, and organizations and public entities serving 
        children with disabilities;'';
            (C) in subparagraph (D), by striking the semicolon and 
        inserting ``and the extent to which, and manner in which, the 
        applicant demonstrates the ability to collaborate and 
        participate with other local community providers of child care 
        or preschool services to provide full-working-day full calendar 
        year services;'';
            (D) in subparagraph (E), by striking ``program; and'' and 
        inserting ``program or any other early childhood program;'';
            (E) in subparagraph (F), by striking the period and 
        inserting a semicolon; and
            (F) by adding at the end the following:
        ``(G) the extent to which the applicant proposes to foster 
    partnerships with other service providers in a manner that will 
    enhance the resource capacity of the applicant; and
        ``(H) the extent to which the applicant, in providing services, 
    plans to coordinate with the local educational agency serving the 
    community involved and with schools in which children participating 
    in a Head Start program operated by such agency will enroll 
    following such program, regarding such services and the education 
    services provided by such local educational agency.''; and
        (2) by adding at the end the following:
    ``(4) Notwithstanding subsection (a)(2), after taking into account 
paragraph (1), the Secretary may allocate a portion of the remaining 
additional funds under subsection (a)(2)(A) for the purpose of 
increasing funds available for activities described in such 
subsection.''.
    (d) Migrant and Seasonal Head Start Programs.--Section 640(l) (42 
U.S.C. 9835(l)) is amended--
        (1) by striking ``(l)'' and inserting ``(l)(1)'';
        (2) by striking ``migrant Head Start programs'' each place it 
    appears and inserting ``migrant and seasonal Head Start programs'';
        (3) by striking ``migrant families'' and inserting ``migrant 
    and seasonal farmworker families''; and
        (4) by adding at the end the following:
    ``(2) For purposes of subsection (a)(2)(A), in determining the need 
and demand for migrant and seasonal Head Start programs (and services 
provided through such programs), the Secretary shall consult with 
appropriate entities, including providers of services for migrant and 
seasonal Head Start programs. The Secretary shall, after taking into 
consideration the need and demand for migrant and seasonal Head Start 
programs (and such services), ensure that there is an adequate level of 
such services for eligible children of migrant farmworkers before 
approving an increase in the allocation of funds provided under such 
subsection for unserved eligible children of seasonal farmworkers. In 
serving the eligible children of seasonal farmworkers, the Secretary 
shall ensure that services provided by migrant and seasonal Head Start 
programs do not duplicate or overlap with other Head Start services 
available to eligible children of such farmworkers.
    ``(3) In carrying out this subchapter, the Secretary shall continue 
the administrative arrangement responsible for meeting the needs of 
children of migrant and seasonal farmworkers and Indian children and 
shall ensure that appropriate funding is provided to meet such 
needs.''.
    (e) Conforming Amendment.--Section 644(f)(2) of the Head Start Act 
(42 U.S.C. 9839(f)(2)) is amended by striking ``Except'' and all that 
follows through ``financial'' and inserting ``Financial''.

SEC. 107. DESIGNATION OF HEAD START AGENCIES.

    Section 641 of the Head Start Act (42 U.S.C. 9836) is amended--
        (1) in subsection (a)--
            (A) in the matter preceding paragraph (1), by inserting 
        ``or for-profit'' after ``nonprofit''; and
            (B) by inserting ``(in consultation with the chief 
        executive officer of the State involved, if such State expends 
        non-Federal funds to carry out Head Start programs)'' after 
        ``Secretary'' the last place it appears;
        (2) in subsection (b), by striking ``area designated by the 
    Bureau of Indian Affairs as near-reservation'' and inserting ``off-
    reservation area designated by an appropriate tribal government in 
    consultation with the Secretary'';
        (3) in subsection (c)--
            (A) in paragraph (1)--
                (i) by inserting ``, in consultation with the chief 
            executive officer of the State involved if such State 
            expends non-Federal funds to carry out Head Start 
            programs,'' after ``shall'';
                (ii) by inserting ``or for-profit'' after 
            ``nonprofit''; and
                (iii) by striking ``makes a finding'' and all that 
            follows through the period at the end, and inserting the 
            following: ``determines that the agency involved fails to 
            meet program and financial management requirements, 
            performance standards described in section 641A(a)(1), 
            results-based performance measures developed by the 
            Secretary under section 641A(b), or other requirements 
            established by the Secretary.'';
            (B) in paragraph (2), by inserting ``, in consultation with 
        the chief executive officer of the State if such State expends 
        non-Federal funds to carry out Head Start programs,'' after 
        ``shall''; and
            (C) by aligning the margins of paragraphs (2) and (3) with 
        the margin of paragraph (1);
        (4) in subsection (d)--
            (A) in the matter preceding paragraph (1), by inserting 
        after the first sentence the following: ``In selecting from 
        among qualified applicants for designation as a Head Start 
        agency, the Secretary shall give priority to any qualified 
        agency that functioned as a Head Start delegate agency in the 
        community and carried out a Head Start program that the 
        Secretary determines met or exceeded such performance standards 
        and such results-based performance measures.'';
            (B) in paragraph (3), by inserting ``and programs under 
        part C and section 619 of the Individuals with Disabilities 
        Education Act (20 U.S.C 1431-1445, 1419)'' after ``(20 U.S.C. 
        2741 et seq.)'';
            (C) in paragraph (4)--
                (i) in subparagraph (A), by inserting ``(at home and in 
            the center involved where practicable)'' after 
            ``activities'';
                (ii) in subparagraph (D)--

                    (I) in clause (iii), by adding ``or'' at the end;
                    (II) by striking clause (iv); and
                    (III) by redesignating clause (v) as clause (iv);

                (iii) in subparagraph (E), by striking ``and (D)'' and 
            inserting ``, (D), and (E)'';
                (iv) by redesignating subparagraphs (D) and (E) as 
            subparagraphs (E) and (F), respectively; and
                (v) by inserting after subparagraph (C) the following:
            ``(D) to offer to parents of participating children 
        substance abuse counseling (either directly or through referral 
        to local entities), including information on drug-exposed 
        infants and fetal alcohol syndrome;'';
            (D) by amending paragraph (7) to read as follows:
        ``(7) the plan of such applicant to meet the needs of non-
    English background children and their families, including needs 
    related to the acquisition of the English language;'';
            (E) in paragraph (8)--
                (i) by striking the period at the end and inserting ``; 
            and''; and
                (ii) by redesignating such paragraph as paragraph (9);
            (F) by inserting after paragraph (7) the following:
        ``(8) the plan of such applicant to meet the needs of children 
    with disabilities;''; and
            (G) by adding at the end the following:
        ``(10) the plan of such applicant to collaborate with other 
    entities carrying out early childhood education and child care 
    programs in the community.'';
        (5) by striking subsection (e) and inserting the following:
    ``(e) If no agency in the community receives priority designation 
under subsection (c), and there is no qualified applicant in the 
community, the Secretary shall designate a qualified agency to carry 
out the Head Start program in the community on an interim basis until a 
qualified applicant from the community is so designated.''; and
        (6) by adding at the end the following:
    ``(g) If the Secretary determines that a nonprofit agency and a 
for-profit agency have submitted applications for designation of 
equivalent quality under subsection (d), the Secretary may give 
priority to the nonprofit agency. In selecting from among qualified 
applicants for designation as a Head Start agency under subsection (d), 
the Secretary shall give priority to applicants that have demonstrated 
capacity in providing comprehensive early childhood services to 
children and their families.''.

SEC. 108. QUALITY STANDARDS.

    (a) Quality Standards.--Section 641A(a) of the Head Start Act (42 
U.S.C. 9836a(a)) is amended--
        (1) in paragraph (1)--
            (A) in the matter preceding subparagraph (A), by inserting 
        ``, including minimum levels of overall accomplishment,'' after 
        ``regulation standards'';
            (B) in subparagraph (A), by striking ``education,'';
            (C) by redesignating subparagraphs (B) through (D) as 
        subparagraphs (C) through (E), respectively; and
            (D) by inserting after subparagraph (A) the following:
            ``(B)(i) education performance standards to ensure the 
        school readiness of children participating in a Head Start 
        program, on completion of the Head Start program and prior to 
        entering school; and
            ``(ii) additional education performance standards to ensure 
        that the children participating in the program, at a minimum--
                ``(I) develop phonemic, print, and numeracy awareness;
                ``(II) understand and use language to communicate for 
            various purposes;
                ``(III) understand and use increasingly complex and 
            varied vocabulary;
                ``(IV) develop and demonstrate an appreciation of 
            books; and
                ``(V) in the case of non-English background children, 
            progress toward acquisition of the English language.'';
        (2) by striking paragraph (2);
        (3) by redesignating paragraphs (3) and (4) as paragraphs (2) 
    and (3), respectively;
        (4) in paragraph (2) (as redesignated in paragraph (3))--
            (A) in subparagraph (B)(iii), by striking ``child'' and 
        inserting ``early childhood education and''; and
            (B) in subparagraph (C)--
                (i) in clause (i)--

                    (I) by striking ``not later than 1 year after the 
                date of enactment of this section,''; and
                    (II) by striking ``section 651(b)'' and all that 
                follows and inserting ``this subsection; and''; and

                (ii) in subclause (ii), by striking ``November 2, 
            1978'' and inserting ``the date of enactment of the Coats 
            Human Services Reauthorization Act of 1998''; and
        (5) in paragraph (3) (as redesignated in paragraph (3)), by 
    striking ``to an agency (referred to in this subchapter as the 
    `delegate agency')'' and inserting ``to a delegate agency''.
    (b) Performance Measures.--Section 641A(b) of the Head Start Act 
(42 U.S.C. 9836a(b)) is amended--
        (1) in the heading, by inserting ``Results-Based'' before 
    ``Performance'';
        (2) in paragraph (1)--
            (A) by striking ``Not later than 1 year after the date of 
        enactment of this section, the'' and inserting ``The'';
            (B) by striking ``child'' and inserting ``early childhood 
        education and'';
            (C) by inserting before ``(referred'' the following: ``, 
        and the impact of the services provided through the programs to 
        children and their families''; and
            (D) by striking ``performance measures'' and inserting 
        ``results-based performance measures''; and
        (3) in paragraph (2)--
            (A) in the paragraph heading, by striking ``Design'' and 
        inserting ``Characteristics'';
            (B) in the matter preceding subparagraph (A), by striking 
        ``shall be designed--'' and inserting ``shall--'';
            (C) in subparagraph (A), by striking ``to assess'' and 
        inserting ``be used to assess the impact of'';
            (D) in subparagraph (B)--
                (i) by striking ``to'';
                (ii) by striking ``and peer review'' and inserting ``, 
            peer review, and program evaluation''; and
                (iii) by inserting ``, not later than July 1, 1999'' 
            before the semicolon;
            (E) in subparagraph (C), by inserting ``be developed'' 
        before ``for other''; and
            (F) by adding at the end the following: ``The performance 
        measures shall include the performance standards described in 
        subsection (a)(1)(B)(ii).'';
        (4) in paragraph (3)(A), by striking ``and by region'' and 
    inserting ``, regionally, and locally''; and
        (5) by adding at the end the following:
        ``(4) Educational performance measures.--Such results-based 
    performance measures shall include educational performance measures 
    that ensure that children participating in Head Start programs--
            ``(A) know that letters of the alphabet are a special 
        category of visual graphics that can be individually named;
            ``(B) recognize a word as a unit of print;
            ``(C) identify at least 10 letters of the alphabet; and
            ``(D) associate sounds with written words.
        ``(5) Additional local results-based performance measures.--In 
    addition to other applicable results-based performance measures, 
    Head Start agencies may establish local results-based educational 
    performance measures.''.
    (c) Monitoring.--Section 641A(c) of the Head Start Act (42 U.S.C. 
9836a(c)) is amended--
        (1) in paragraph (1), by inserting ``and results-based 
    performance measures developed by the Secretary under subsection 
    (b)'' after ``standards established under this subchapter''; and
        (2) in paragraph (2)--
            (A) in subparagraph (B), by striking ``and'' at the end;
            (B) in subparagraph (C)--
                (i) by inserting ``(including children with 
            disabilities)'' after ``eligible children''; and
                (ii) by striking the period at the end and inserting a 
            semicolon; and
            (C) by adding at the end the following:
            ``(D) include as part of the reviews of the programs, a 
        review and assessment of program effectiveness, as measured in 
        accordance with the results-based performance measures 
        developed by the Secretary pursuant to subsection (b) and with 
        the performance standards established pursuant to subparagraphs 
        (A) and (B) of subsection (a)(1); and
            ``(E) seek information from the communities and the States 
        involved about the performance of the programs and the efforts 
        of the Head Start agencies to collaborate with other entities 
        carrying out early childhood education and child care programs 
        in the community.''.
    (d) Termination.--Section 641A(d) of the Head Start Act (42 U.S.C. 
9836a(d)) is amended--
        (1) in paragraph (1)--
            (A) by inserting ``or results-based performance measures 
        developed by the Secretary under subsection (b)'' after 
        ``subsection (a)''; and
            (B) by amending subparagraph (B) to read as follows:
            ``(B) with respect to each identified deficiency, require 
        the agency--
                ``(i) to correct the deficiency immediately, if the 
            Secretary finds that the deficiency threatens the health or 
            safety of staff or program participants or poses a threat 
            to the integrity of Federal funds;
                ``(ii) to correct the deficiency not later than 90 days 
            after the identification of the deficiency if the Secretary 
            finds, in the discretion of the Secretary, that such a 90-
            day period is reasonable, in light of the nature and 
            magnitude of the deficiency; or
                ``(iii) in the discretion of the Secretary (taking into 
            consideration the seriousness of the deficiency and the 
            time reasonably required to correct the deficiency), to 
            comply with the requirements of paragraph (2) concerning a 
            quality improvement plan; and''; and
        (2) in paragraph (2)(A), in the matter preceding clause (i), by 
    striking ``able to correct a deficiency immediately'' and inserting 
    ``required to correct a deficiency immediately or during a 90-day 
    period under clause (i) or (ii) of paragraph (1)(B)''.
    (e) Report.--Section 641A(e) of the Head Start Act (42 U.S.C. 
9836a(e)) is amended by adding at the end the following: ``Such report 
shall be widely disseminated and available for public review in both 
written and electronic formats.''.

SEC. 109. POWERS AND FUNCTIONS OF HEAD START AGENCIES.

    Section 642 of the Head Start Act (42 U.S.C. 9837) is amended--
        (1) in subsection (a), by inserting ``or for-profit'' after 
    ``nonprofit'';
        (2) in subsection (b)--
            (A) in paragraph (6)--
                (i) by striking subparagraph (D); and
                (ii) by redesignating subparagraphs (E) and (F) and 
            subparagraphs (D) and (E), respectively;
            (B) in paragraph (8), by striking ``and'' at the end;
            (C) in paragraph (9), by striking the period at the end and 
        inserting ``; and'';
            (D) by redesignating paragraphs (6) through (9) as 
        paragraphs (7) through (10), respectively;
            (E) by inserting after paragraph (5) the following:
        ``(6) offer to parents of participating children substance 
    abuse counseling (either directly or through referral to local 
    entities), including information on drug-exposed infants and fetal 
    alcohol syndrome;'';
            (F) in paragraph (8) (as redesignated in subparagraph (D)), 
        by striking ``paragraphs (4) through (6)'' and inserting 
        ``paragraphs (4) through (7)''; and
            (G) by adding at the end the following:
        ``(11)(A) inform custodial parents in single-parent families 
    that participate in programs, activities, or services carried out 
    or provided under this subchapter about the availability of child 
    support services for purposes of establishing paternity and 
    acquiring child support; and
        ``(B) refer eligible parents to the child support offices of 
    State and local governments.'';
        (3) in subsection (c)--
            (A) by inserting ``and collaborate'' after ``coordinate'';
            (B) by striking ``section 402(g) of the Social Security 
        Act, and other'' and inserting ``the State program carried out 
        under the Child Care and Development Block Grant Act of 1990 
        (42 U.S.C. 9858 et seq.), and other early childhood education 
        and development''; and
            (C) by inserting ``and programs under part C and section 
        619 of the Individuals with Disabilities Education Act (20 
        U.S.C 1431-1445, 1419)'' after ``(20 U.S.C. 2741 et seq.)'';
        (4) in subsection (d)--
            (A) in paragraph (1)--
                (i) by striking ``carry out'' and all that follows 
            through ``maintain'' and inserting ``take steps to ensure, 
            to the maximum extent possible, that children maintain'';
                (ii) by inserting ``and educational'' after 
            ``developmental''; and
                (iii) by striking ``to build'' and inserting ``build'';
            (B) by striking paragraph (2);
            (C) by redesignating paragraphs (3) through (5) as 
        paragraphs (2) through (4), respectively; and
            (D) in subparagraph (A) of paragraph (4) (as redesignated 
        in subparagraph (C)), by striking ``the Head Start Transition 
        Project Act (42 U.S.C. 9855 et seq.)'' and inserting ``section 
        642A''; and
        (5) by adding at the end the following:
    ``(e) Head Start agencies shall adopt, in consultation with experts 
in child development and with classroom teachers, an assessment to be 
used when hiring or evaluating any classroom teacher in a center-based 
Head Start program. Such assessment shall measure whether such teacher 
has mastered the functions described in section 648A(a)(1).''.

SEC. 110. HEAD START TRANSITION.

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

``SEC. 642A. HEAD START TRANSITION.

    ``Each Head Start agency shall take steps to coordinate with the 
local educational agency serving the community involved and with 
schools in which children participating in a Head Start program 
operated by such agency will enroll following such program, including--
        ``(1) developing and implementing a systematic procedure for 
    transferring, with parental consent, Head Start program records for 
    each participating child to the school in which such child will 
    enroll;
        ``(2) establishing channels of communication between Head Start 
    staff and their counterparts in the schools (including teachers, 
    social workers, and health staff) to facilitate coordination of 
    programs;
        ``(3) conducting meetings involving parents, kindergarten or 
    elementary school teachers, and Head Start program teachers to 
    discuss the educational, developmental, and other needs of 
    individual children;
        ``(4) organizing and participating in joint transition-related 
    training of school staff and Head Start staff;
        ``(5) developing and implementing a family outreach and support 
    program in cooperation with entities carrying out parental 
    involvement efforts under title I of the Elementary and Secondary 
    Education Act of 1965 (20 U.S.C. 6301 et seq.);
        ``(6) assisting families, administrators, and teachers in 
    enhancing educational and developmental continuity between Head 
    Start services and elementary school classes; and
        ``(7) linking the services provided in such Head Start program 
    with the education services provided by such local educational 
    agency.''.

SEC. 111. SUBMISSION OF PLANS TO GOVERNORS.

    The first sentence of section 643 of the Head Start Act (42 U.S.C. 
9838) is amended--
        (1) by striking ``30 days'' and inserting ``45 days'';
        (2) by striking ``so disapproved'' and inserting ``disapproved 
    (for reasons other than failure of the program to comply with State 
    health, safety, and child care laws, including regulations 
    applicable to comparable child care programs in the State)''; and
        (3) by inserting before the period ``, as evidenced by a 
    written statement of the Secretary's findings that is transmitted 
    to such officer''.

SEC. 112. PARTICIPATION IN HEAD START PROGRAMS.

    (a) Regulations.--Section 645(a)(1) of the Head Start Act (42 
U.S.C. 9840(a)(1)) is amended--
        (1) by striking ``provide (A) that'' and inserting the 
    following: ``provide--
        ``(A) that'';
        (2) by striking ``assistance; and (B) pursuant'' and inserting 
    the following: ``assistance; and
        ``(B) pursuant'';
        (3) in subparagraph (B), by striking ``that programs'' and 
    inserting ``that--
            ``(i) programs''; and
        (4) by striking ``clause (A).'' and inserting the following: 
    ``subparagraph (A); and
            ``(ii) a child who has been determined to meet the low-
        income criteria and who is participating in a Head Start 
        program in a program year shall be considered to continue to 
        meet the low-income criteria through the end of the succeeding 
        program year.
In determining, for purposes of this paragraph, whether a child who has 
applied for enrollment in a Head Start program meets the low-income 
criteria, an entity may consider evidence of family income during the 
12 months preceding the month in which the application is submitted, or 
during the calendar year preceding the calendar year in which the 
application is submitted, whichever more accurately reflects the needs 
of the family at the time of application.''.
    (b) Sliding Fee Scale.--Section 645(b) of the Head Start Act (42 
U.S.C. 9840(b)) is amended by adding at the end the following: ``A Head 
Start agency that provides a Head Start program with full-working-day 
services in collaboration with other agencies or entities may collect a 
family copayment to support extended day services if a copayment is 
required in conjunction with the collaborative. The copayment charged 
to families receiving services through the Head Start program shall not 
exceed the copayment charged to families with similar incomes and 
circumstances who are receiving the services through participation in a 
program carried out by another agency or entity.''.
    (c) Continuous Recruitment and Acceptance of Applications.--Section 
645(c) of the Head Start Act (42 U.S.C. 9840(c)) is amended by adding 
at the end the following: ``Each Head Start program operated in a 
community shall be permitted to recruit and accept applications for 
enrollment of children throughout the year.''.
    (d) Off-Reservation Area.--Section 645(d)(1)(B) of the Head Start 
Act (42 U.S.C. 9840(d)(1)(B)) is amended by striking ``a community 
with'' and all that follows through ``Indian Affairs'' and inserting 
``a community that is an off-reservation area, designated by an 
appropriate tribal government, in consultation with the Secretary''.
    SEC. 113. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS AND 
      TODDLERS.
    Section 645A of the Head Start Act (42 U.S.C. 9840a) is amended--
        (1) in the section heading, by inserting ``early head start'' 
    before ``programs for'';
        (2) in subsection (a)--
            (A) in paragraph (1), by striking ``; and'' and inserting a 
        period;
            (B) by striking paragraph (2); and
            (C) by striking ``for--'' and all that follows through 
        ``(1)'' and inserting ``for'';
        (3) in subsection (b)--
            (A) in paragraph (5), by inserting ``(including programs 
        for infants and toddlers with disabilities)'' after 
        ``community'';
            (B) in paragraph (7), by striking ``and'' at the end;
            (C) by redesignating paragraph (8) as paragraph (9); and
            (D) by inserting after paragraph (7) the following:
        ``(8) ensure formal linkages with the agencies and entities 
    described in section 644(b) of the Individuals with Disabilities 
    Education Act (20 U.S.C. 1444(b)) and providers of early 
    intervention services for infants and toddlers with disabilities 
    under the Individuals with Disabilities Education Act (20 U.S.C. 
    1400 et seq.); and'';
        (4) in subsection (c)--
            (A) in the matter preceding paragraph (1), by striking 
        ``subsection (a)(1)'' and inserting ``subsection (a)''; and
            (B) in paragraph (2), by striking ``3 (or under'' and all 
        that follows and inserting ``3;'';
        (5) in subsection (d)--
            (A) in paragraph (1), by adding ``and'' at the end;
            (B) by striking paragraph (2);
            (C) by redesignating paragraph (3) as paragraph (2); and
            (D) in paragraph (2), as redesignated in subparagraph (C), 
        by inserting ``or for-profit'' after ``nonprofit'';
        (6) by striking subsection (e);
        (7) by redesignating subsections (f) and (g) as subsections (e) 
    and (f), respectively;
        (8) in subsection (e) (as redesignated in paragraph (7))--
            (A) in the subsection heading, by striking ``Other''; and
            (B) by striking ``From the balance remaining of the portion 
        specified in section 640(a)(6), after making grants to the 
        eligible entities specified in subsection (e),'' and inserting 
        ``From the portion specified in section 640(a)(6),'';
        (9) by striking subsection (h); and
        (10) by adding at the end the following:
    ``(g) Monitoring, Training, Technical Assistance, and Evaluation.--
        ``(1) Requirement.--In order to ensure the successful operation 
    of programs assisted under this section, the Secretary shall use 
    funds from the portion specified in section 640(a)(6) to monitor 
    the operation of such programs, evaluate their effectiveness, and 
    provide training and technical assistance tailored to the 
    particular needs of such programs.
        ``(2) Training and technical assistance account.--
            ``(A) In general.--Of the amount made available to carry 
        out this section for any fiscal year, not less than 5 percent 
        and not more than 10 percent shall be reserved to fund a 
        training and technical assistance account.
            ``(B) Activities.--Funds in the account may be used by the 
        Secretary for purposes including--
                ``(i) making grants to, and entering into contracts 
            with, organizations with specialized expertise relating to 
            infants, toddlers, and families and the capacity needed to 
            provide direction and support to a national training and 
            technical assistance system, in order to provide such 
            direction and support;
                ``(ii) providing ongoing training and technical 
            assistance for regional and program staff charged with 
            monitoring and overseeing the administration of the program 
            carried out under this section;
                ``(iii) providing ongoing training and technical 
            assistance for existing recipients (as of the date of such 
            training or assistance) of grants under subsection (a) and 
            support and program planning and implementation assistance 
            for new recipients of such grants; and
                ``(iv) providing professional development and personnel 
            enhancement activities, including the provision of funds to 
            recipients of grants under subsection (a) for the 
            recruitment and retention of qualified staff with an 
            appropriate level of education and experience.''.

SEC. 114. TECHNICAL ASSISTANCE AND TRAINING.

    (a) In General.--Section 648 of the Head Start Act (42 U.S.C. 9843) 
is amended--
        (1) in subsection (b)--
            (A) in paragraph (1), by striking ``and'' at the end;
            (B) in paragraph (2), by striking the period and inserting 
        ``; and''; and
            (C) by adding at the end the following:
        ``(3) ensure the provision of technical assistance to assist 
    Head Start agencies, entities carrying out other child care and 
    early childhood programs, communities, and States in collaborative 
    efforts to provide quality full-working-day, full calendar year 
    services, including technical assistance related to identifying and 
    assisting in resolving barriers to collaboration.''; and
        (2) in subsection (c)--
            (A) by amending paragraph (1) to read as follows:
        ``(1) give priority consideration to--
            ``(A) activities to correct program and management 
        deficiencies identified through reviews carried out pursuant to 
        section 641A(c) (including the provision of assistance to local 
        programs in the development of quality improvement plans under 
        section 641A(d)(2)); and
            ``(B) assisting Head Start agencies in--
                ``(i) ensuring the school readiness of children; and
                ``(ii) meeting the educational performance measures 
            described in section 641A(b)(4);'';
            (B) in paragraph (2), by inserting ``supplement amounts 
        provided under section 640(a)(3)(C)(ii) in order to'' after 
        ``(2)'';
            (C) in paragraph (4)--
                (i) by inserting ``and implementing'' after 
            ``developing''; and
                (ii) by striking ``a longer day'' and inserting the 
            following: ``the day, and assist the agencies and programs 
            in expediting the sharing of information about innovative 
            models for providing full-working-day, full calendar year 
            services for children'';
            (D) in paragraph (7), by striking ``; and'' and inserting a 
        semicolon;
            (E) in paragraph (8), by striking the period and inserting 
        ``; and'';
            (F) by redesignating paragraphs (3) through (8) as 
        paragraphs (5) through (10), respectively;
            (G) by inserting after paragraph (2) the following:
        ``(3) assist Head Start agencies in the development of 
    collaborative initiatives with States and other entities within the 
    States, to foster effective early childhood professional 
    development systems;
        ``(4) provide technical assistance and training, either 
    directly or through a grant, contract, or cooperative agreement 
    with an entity that has experience in the development and operation 
    of successful family literacy services programs, for the purpose 
    of--
            ``(A) assisting Head Start agencies providing family 
        literacy services, in order to improve the quality of such 
        family literacy services; and
            ``(B) enabling those Head Start agencies that demonstrate 
        effective provision of family literacy services, based on 
        improved outcomes for children and their parents, to provide 
        technical assistance and training to other Head Start agencies 
        and to service providers that work in collaboration with such 
        agencies to provide family literacy services;''; and
            (H) by adding at the end the following:
        ``(11) provide support for Head Start agencies (including 
    policy councils and policy committees, as defined in regulation) 
    that meet the standards described in section 641A(a) but that have, 
    as documented by the Secretary through reviews conducted pursuant 
    to section 641A(c), significant programmatic, quality, and fiscal 
    issues to address.''.
    (b) Services.--Section 648(e) of the Head Start Act (42 U.S.C. 
9843(e)) is amended by inserting ``(including services to promote the 
acquisition of the English language)'' after ``non-English language 
background children''.

SEC. 115. PROFESSIONAL REQUIREMENTS.

    Section 648A of the Head Start Act (42 U.S.C. 9843a) is amended--
        (1) by amending subsection (a) to read as follows:
    ``(a) Classroom Teachers.--
        ``(1) Professional requirements.--The Secretary shall ensure 
    that each Head Start classroom in a center-based program is 
    assigned one teacher who has demonstrated competency to perform 
    functions that include--
            ``(A) planning and implementing learning experiences that 
        advance the intellectual and physical development of children, 
        including improving the readiness of children for school by 
        developing their literacy and phonemic, print, and numeracy 
        awareness, their understanding and use of language, their 
        understanding and use of increasingly complex and varied 
        vocabulary, their appreciation of books, and their problem 
        solving abilities;
            ``(B) establishing and maintaining a safe, healthy learning 
        environment;
            ``(C) supporting the social and emotional development of 
        children; and
            ``(D) encouraging the involvement of the families of the 
        children in a Head Start program and supporting the development 
        of relationships between children and their families.
        ``(2) Degree requirements.--
            ``(A) In general.--The Secretary shall ensure that not 
        later than September 30, 2003, at least 50 percent of all Head 
        Start teachers nationwide in center-based programs have--
                ``(i) an associate, baccalaureate, or advanced degree 
            in early childhood education; or
                ``(ii) an associate, baccalaureate, or advanced degree 
            in a field related to early childhood education, with 
            experience in teaching preschool children.
            ``(B) Progress.--The Secretary shall require Head Start 
        agencies to demonstrate continuing progress each year to reach 
        the result described in subparagraph (A).
        ``(3) Alternative credentialing requirements.--The Secretary 
    shall ensure that, for center-based programs, each Head Start 
    classroom that does not have a teacher that meets the requirements 
    of clause (i) or (ii) of paragraph (2)(A) is assigned one teacher 
    who has--
            ``(A) a child development associate credential that is 
        appropriate to the age of the children being served in center-
        based programs;
            ``(B) a State-awarded certificate for preschool teachers 
        that meets or exceeds the requirements for a child development 
        associate credential; or
            ``(C) a degree in a field related to early childhood 
        education with experience in teaching preschool children and a 
        State-awarded certificate to teach in a preschool program.
        ``(4) Waiver.--
            ``(A) In general.--On request, the Secretary shall grant a 
        180-day waiver of the requirements of paragraph (3), for a Head 
        Start agency that can demonstrate that the agency has 
        unsuccessfully attempted to recruit an individual who has a 
        credential, certificate, or degree described in paragraph (3), 
        with respect to an individual who--
                ``(i) is enrolled in a program that grants any such 
            credential, certificate, or degree; and
                ``(ii) will receive such credential, certificate, or 
            degree under the terms of such program not later than 180 
            days after beginning employment as a teacher with such 
            agency.
            ``(B) Limitation.--The Secretary may not grant more than 
        one such waiver with respect to such individual.''; and
        (2) in subsection (b)(2)(B)--
            (A) by striking ``staff,'' and inserting ``staff or''; and
            (B) by striking ``, or that'' and all that follows through 
        ``families''.

SEC. 116. RESEARCH AND EVALUATION.

    Section 649 of the Head Start Act (42 U.S.C. 9844) is amended--
        (1) in subsection (d)--
            (A) in paragraph (6), by striking ``and'' at the end;
            (B) in paragraph (7), by striking the period at the end and 
        inserting a semicolon;
            (C) by redesignating paragraphs (2) through (7) as 
        paragraphs (3) through (8), respectively;
            (D) by inserting after paragraph (1) the following:
        ``(2) establish evaluation methods that measure the 
    effectiveness and impact of family literacy services program 
    models, including models for the integration of family literacy 
    services with Head Start services;''; and
            (E) by adding at the end the following:
        ``(9) study the experiences of small, medium, and large States 
    with Head Start programs in order to permit comparisons of children 
    participating in the programs with eligible children who did not 
    participate in the programs, which study--
            ``(A) may include the use of a data set that existed prior 
        to the initiation of the study; and
            ``(B) shall compare the educational achievement, social 
        adaptation, and health status of the participating children and 
        the eligible nonparticipating children; and
        ``(10) provide for--
            ``(A) using the Survey of Income and Program Participation 
        to conduct an analysis of the different income levels of Head 
        Start participants compared to comparable persons who did not 
        attend Head Start programs;
            ``(B) using the National Longitudinal Survey of Youth, 
        which began gathering data in 1988 on children who attended 
        Head Start programs, to examine the wide range of outcomes 
        measured within the Survey, including outcomes related to 
        cognitive, socio-emotional, behavioral, and academic 
        development;
            ``(C) using the Survey of Program Dynamics, the new 
        longitudinal survey required by section 414 of the Social 
        Security Act (42 U.S.C. 614), to begin annual reporting, 
        through the duration of the Survey, on Head Start program 
        attendees' academic readiness performance and improvements;
            ``(D) ensuring that the Survey of Program Dynamics is 
        linked with the National Longitudinal Survey of Youth at least 
        once by the use of a common performance test, to be determined 
        by the expert panel, for the greater national usefulness of the 
        National Longitudinal Survey of Youth database; and
            ``(E) disseminating the results of the analysis, 
        examination, reporting, and linkage described in subparagraphs 
        (A) through (D) to persons conducting other studies under this 
        subchapter.
The Secretary shall ensure that an appropriate entity carries out a 
study described in paragraph (9), and prepares and submits to the 
appropriate committees of Congress a report containing the results of 
the study, not later than September 30, 2002.''; and
        (2) by adding at the end the following:
    ``(g) National Head Start Impact Research.--
        ``(1) Expert panel.--
            ``(A) In general.--The Secretary shall appoint an 
        independent panel consisting of experts in program evaluation 
        and research, education, and early childhood programs--
                ``(i) to review, and make recommendations on, the 
            design and plan for the research (whether conducted as a 
            single assessment or as a series of assessments) described 
            in paragraph (2), within 1 year after the date of enactment 
            of the Coats Human Services Reauthorization Act of 1998;
                ``(ii) to maintain and advise the Secretary regarding 
            the progress of the research; and
                ``(iii) to comment, if the panel so desires, on the 
            interim and final research reports submitted under 
            paragraph (7).
            ``(B) Travel expenses.--The members of the panel shall not 
        receive compensation for the performance of services for the 
        panel, but shall be allowed travel expenses, including per diem 
        in lieu of subsistence, at rates authorized for employees of 
        agencies under subchapter I of chapter 57 of title 5, United 
        States Code, while away from their homes or regular places of 
        business in the performance of services for the panel. 
        Notwithstanding section 1342 of title 31, United States Code, 
        the Secretary may accept the voluntary and uncompensated 
        services of members of the panel.
        ``(2) General authority.--After reviewing the recommendations 
    of the expert panel, the Secretary shall make a grant to, or enter 
    into a contract or cooperative agreement with, an organization to 
    conduct independent research that provides a national analysis of 
    the impact of Head Start programs. The Secretary shall ensure that 
    the organization shall have expertise in program evaluation, and 
    research, education, and early childhood programs.
        ``(3) Designs and techniques.--The Secretary shall ensure that 
    the research uses rigorous methodological designs and techniques 
    (based on the recommendations of the expert panel), including 
    longitudinal designs, control groups, nationally recognized 
    standardized measures, and random selection and assignment, as 
    appropriate. The Secretary may provide that the research shall be 
    conducted as a single comprehensive assessment or as a group of 
    coordinated assessments designed to provide, when taken together, a 
    national analysis of the impact of Head Start programs.
        ``(4) Programs.--The Secretary shall ensure that the research 
    focuses primarily on Head Start programs that operate in the 50 
    States, the Commonwealth of Puerto Rico, or the District of 
    Columbia and that do not specifically target special populations.
        ``(5) Analysis.--The Secretary shall ensure that the 
    organization conducting the research--
            ``(A)(i) determines if, overall, the Head Start programs 
        have impacts consistent with their primary goal of increasing 
        the social competence of children, by increasing the everyday 
        effectiveness of the children in dealing with their present 
        environments and future responsibilities, and increasing their 
        school readiness;
            ``(ii) considers whether the Head Start programs--
                ``(I) enhance the growth and development of children in 
            cognitive, emotional, and physical health areas;
                ``(II) strengthen families as the primary nurturers of 
            their children; and
                ``(III) ensure that children attain school readiness; 
            and
            ``(iii) examines--
                ``(I) the impact of the Head Start programs on 
            increasing access of children to such services as 
            educational, health, and nutritional services, and linking 
            children and families to needed community services; and
                ``(II) how receipt of services described in subclause 
            (I) enriches the lives of children and families 
            participating in Head Start programs;
            ``(B) examines the impact of Head Start programs on 
        participants on the date the participants leave Head Start 
        programs, at the end of kindergarten and at the end of first 
        grade (whether in public or private school), by examining a 
        variety of factors, including educational achievement, 
        referrals for special education or remedial course work, and 
        absenteeism;
            ``(C) makes use of random selection from the population of 
        all Head Start programs described in paragraph (4) in selecting 
        programs for inclusion in the research; and
            ``(D) includes comparisons of individuals who participate 
        in Head Start programs with control groups (including 
        comparison groups) composed of--
                ``(i) individuals who participate in other early 
            childhood programs (such as public or private preschool 
            programs and day care); and
                ``(ii) individuals who do not participate in any other 
            early childhood program.
        ``(6) Consideration of sources of variation.--In designing the 
    research, the Secretary shall, to the extent practicable, consider 
    addressing possible sources of variation in impact of Head Start 
    programs, including variations in impact related to such factors 
    as--
            ``(A) Head Start program operations;
            ``(B) Head Start program quality;
            ``(C) the length of time a child attends a Head Start 
        program;
            ``(D) the age of the child on entering the Head Start 
        program;
            ``(E) the type of organization (such as a local educational 
        agency or a community action agency) providing services for the 
        Head Start program;
            ``(F) the number of hours and days of program operation of 
        the Head Start program (such as whether the program is a full-
        working-day, full calendar year program, a part-day program, or 
        a part-year program); and
            ``(G) other characteristics and features of the Head Start 
        program (such as geographic location, location in an urban or a 
        rural service area, or participant characteristics), as 
        appropriate.
        ``(7) Reports.--
            ``(A) Submission of interim reports.--The organization 
        shall prepare and submit to the Secretary two interim reports 
        on the research. The first interim report shall describe the 
        design of the research, and the rationale for the design, 
        including a description of how potential sources of variation 
        in impact of Head Start programs have been considered in 
        designing the research. The second interim report shall 
        describe the status of the research and preliminary findings of 
        the research, as appropriate.
            ``(B) Submission of final report.--The organization shall 
        prepare and submit to the Secretary a final report containing 
        the findings of the research.
            ``(C) Transmittal of reports to congress.--
                ``(i) In general.--The Secretary shall transmit, to the 
            committees described in clause (ii), the first interim 
            report by September 30, 1999, the second interim report by 
            September 30, 2001, and the final report by September 30, 
            2003.
                ``(ii) Committees.--The committees referred to in 
            clause (i) are the Committee on Education and the Workforce 
            of the House of Representatives and the Committee on Labor 
            and Human Resources of the Senate.
        ``(8) Definition.--In this subsection, the term `impact', used 
    with respect to a Head Start program, means a difference in an 
    outcome for a participant in the program that would not have 
    occurred without the participation in the program.
    ``(h) Quality Improvement Study.--
        ``(1) Study.--The Secretary shall conduct a study regarding the 
    use and effects of use of the quality improvement funds made 
    available under section 640(a)(3) since fiscal year 1991.
        ``(2) Report.--The Secretary shall prepare and submit to 
    Congress not later than September 2000 a report containing the 
    results of the study, including information on--
            ``(A) the types of activities funded with the quality 
        improvement funds;
            ``(B) the extent to which the use of the quality 
        improvement funds has accomplished the goals of section 
        640(a)(3)(B);
            ``(C) the effect of use of the quality improvement funds on 
        teacher training, salaries, benefits, recruitment, and 
        retention; and
            ``(D) the effect of use of the quality improvement funds on 
        the development of children receiving services under this 
        subchapter.''.

SEC. 117. REPORTS.

    Section 650 of the Head Start Act (42 U.S.C. 9846) is amended--
        (1) by inserting ``(a) Status of Children.--'' before ``At'';
        (2) by striking ``and Labor'' each place it appears and 
    inserting ``and the Workforce''; and
        (3) by adding at the end the following:
    ``(b) Facilities.--At least once during every 5-year period, the 
Secretary shall prepare and submit, to the Committee on Education and 
the Workforce of the House of Representatives and the Committee on 
Labor and Human Resources of the Senate, a report concerning the 
condition, location, and ownership of facilities used, or available to 
be used, by Indian Head Start agencies (including Native Alaskan Head 
Start agencies) and Native Hawaiian Head Start agencies.''.

SEC. 118. REPEAL OF CONSULTATION REQUIREMENT.

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

SEC. 119. REPEAL OF HEAD START TRANSITION PROJECT ACT.

    The Head Start Transition Project Act (42 U.S.C. 9855-9855g) is 
repealed.

            TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

SEC. 201. REAUTHORIZATION.

    The Community Services Block Grant Act (42 U.S.C. 9901 et seq.) is 
amended to read as follows:

          ``Subtitle B--Community Services Block Grant Program

``SEC. 671. SHORT TITLE.

    ``This subtitle may be cited as the `Community Services Block Grant 
Act'.

``SEC. 672. PURPOSES AND GOALS.

    ``The purposes of this subtitle are--
        ``(1) to provide assistance to States and local communities, 
    working through a network of community action agencies and other 
    neighborhood-based organizations, for the reduction of poverty, the 
    revitalization of low-income communities, and the empowerment of 
    low-income families and individuals in rural and urban areas to 
    become fully self-sufficient (particularly families who are 
    attempting to transition off a State program carried out under part 
    A of title IV of the Social Security Act (42 U.S.C. 601 et seq.)); 
    and
        ``(2) to accomplish the goals described in paragraph (1) 
    through--
            ``(A) the strengthening of community capabilities for 
        planning and coordinating the use of a broad range of Federal, 
        State, local, and other assistance (including private 
        resources) related to the elimination of poverty, so that this 
        assistance can be used in a manner responsive to local needs 
        and conditions;
            ``(B) the organization of a range of services related to 
        the needs of low-income families and individuals, so that these 
        services may have a measurable and potentially major impact on 
        the causes of poverty in the community and may help the 
        families and individuals to achieve self-sufficiency;
            ``(C) the greater use of innovative and effective 
        community-based approaches to attacking the causes and effects 
        of poverty and of community breakdown;
            ``(D) the maximum participation of residents of the low-
        income communities and members of the groups served by programs 
        assisted through the block grants made under this subtitle to 
        empower such residents and members to respond to the unique 
        problems and needs within their communities; and
            ``(E) the broadening of the resource base of programs 
        directed to the elimination of poverty so as to secure a more 
        active role in the provision of services for--
                ``(i) private, religious, charitable, and neighborhood-
            based organizations; and
                ``(ii) individual citizens, and business, labor, and 
            professional groups, who are able to influence the quantity 
            and quality of opportunities and services for the poor.

``SEC. 673. DEFINITIONS.

    ``In this subtitle:
        ``(1) Eligible entity; family literacy services.--
            ``(A) Eligible entity.--The term `eligible entity' means an 
        entity--
                ``(i) that is an eligible entity described in section 
            673(1) (as in effect on the day before the date of 
            enactment of the Coats Human Services Reauthorization Act 
            of 1998) as of the day before such date of enactment or is 
            designated by the process described in section 676A 
            (including an organization serving migrant or seasonal 
            farmworkers that is so described or designated); and
                ``(ii) that has a tripartite board or other mechanism 
            described in subsection (a) or (b), as appropriate, of 
            section 676B.
            ``(B) Family literacy services.--The term `family literacy 
        services' has the meaning given the term in section 637 of the 
        Head Start Act (42 U.S.C. 9832).
        ``(2) Poverty line.--The term `poverty line' means the official 
    poverty line defined by the Office of Management and Budget based 
    on the most recent data available from the Bureau of the Census. 
    The Secretary shall revise annually (or at any shorter interval the 
    Secretary determines to be feasible and desirable) the poverty 
    line, which shall be used as a criterion of eligibility in the 
    community services block grant program established under this 
    subtitle. The required revision shall be accomplished by 
    multiplying the official poverty line by the percentage change in 
    the Consumer Price Index for All Urban Consumers during the annual 
    or other interval immediately preceding the time at which the 
    revision is made. Whenever a State determines that it serves the 
    objectives of the block grant program established under this 
    subtitle, the State may revise the poverty line to not to exceed 
    125 percent of the official poverty line otherwise applicable under 
    this paragraph.
        ``(3) Private, nonprofit organization.--The term `private, 
    nonprofit organization' includes a religious organization, to which 
    the provisions of section 679 shall apply.
        ``(4) Secretary.--The term `Secretary' means the Secretary of 
    Health and Human Services.
        ``(5) State.--The term `State' means each of the several 
    States, the District of Columbia, the Commonwealth of Puerto Rico, 
    Guam, the United States Virgin Islands, American Samoa, and the 
    Commonwealth of the Northern Mariana Islands.

``SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated such 
sums as may be necessary for each of fiscal years 1999 through 2003 to 
carry out the provisions of this subtitle (other than sections 681 and 
682).
    ``(b) Reservations.--Of the amounts appropriated under subsection 
(a) for each fiscal year, the Secretary shall reserve--
        ``(1) \1/2\ of 1 percent for carrying out section 675A 
    (relating to payments for territories);
        ``(2) 1\1/2\ percent for activities authorized in sections 678A 
    through 678F, of which--
            ``(A) not less than \1/2\ of the amount reserved by the 
        Secretary under this paragraph shall be distributed directly to 
        eligible entities, organizations, or associations described in 
        section 678A(c)(2) for the purpose of carrying out activities 
        described in section 678A(c); and
            ``(B) \1/2\ of the remainder of the amount reserved by the 
        Secretary under this paragraph shall be used by the Secretary 
        to carry out evaluation and to assist States in carrying out 
        corrective action activities and monitoring (to correct 
        programmatic deficiencies of eligible entities), as described 
        in sections 678B(c) and 678A; and
        ``(3) 9 percent for carrying out section 680 (relating to 
    discretionary activities) and section 678E(b)(2).

``SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.

    ``The Secretary is authorized to establish a community services 
block grant program and make grants through the program to States to 
ameliorate the causes of poverty in communities within the States.

``SEC. 675A. DISTRIBUTION TO TERRITORIES.

    ``(a) Apportionment.--The Secretary shall apportion the amount 
reserved under section 674(b)(1) for each fiscal year on the basis of 
need among Guam, American Samoa, the United States Virgin Islands, and 
the Commonwealth of the Northern Mariana Islands.
    ``(b) Application.--Each jurisdiction to which subsection (a) 
applies may receive a grant under this section for the amount 
apportioned under subsection (a) on submitting to the Secretary, and 
obtaining approval of, an application, containing provisions that 
describe the programs for which assistance is sought under this 
section, that is prepared in accordance with, and contains the 
information described in, section 676.

``SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES.

    ``(a) Allotments in General.--The Secretary shall, from the amount 
appropriated under section 674(a) for each fiscal year that remains 
after the Secretary makes the reservations required in section 674(b), 
allot to each State (subject to section 677) an amount that bears the 
same ratio to such remaining amount as the amount received by the State 
for fiscal year 1981 under section 221 of the Economic Opportunity Act 
of 1964 bore to the total amount received by all States for fiscal year 
1981 under such section, except--
        ``(1) that no State shall receive less than \1/4\ of 1 percent 
    of the amount appropriated under section 674(a) for such fiscal 
    year; and
        ``(2) as provided in subsection (b).
    ``(b) Allotments in Years With Greater Available Funds.--
        ``(1) Minimum allotments.--Subject to paragraphs (2) and (3), 
    if the amount appropriated under section 674(a) for a fiscal year 
    that remains after the Secretary makes the reservations required in 
    section 674(b) exceeds $345,000,000, the Secretary shall allot to 
    each State not less than \1/2\ of 1 percent of the amount 
    appropriated under section 674(a) for such fiscal year.
        ``(2) Maintenance of fiscal year 1990 levels.--Paragraph (1) 
    shall not apply with respect to a fiscal year if the amount 
    allotted under subsection (a) to any State for that year is less 
    than the amount allotted under section 674(a)(1) (as in effect on 
    September 30, 1989) to such State for fiscal year 1990.
        ``(3) Maximum allotments.--The amount allotted under paragraph 
    (1) to a State for a fiscal year shall be reduced, if necessary, so 
    that the aggregate amount allotted to such State under such 
    paragraph and subsection (a) does not exceed 140 percent of the 
    aggregate amount allotted to such State under the corresponding 
    provisions of this subtitle for the preceding fiscal year.
    ``(c) Payments.--The Secretary shall make grants to eligible States 
for the allotments described in subsections (a) and (b). The Secretary 
shall make payments for the grants in accordance with section 6503(a) 
of title 31, United States Code.
    ``(d) Definition.--In this section, the term `State' does not 
include Guam, American Samoa, the United States Virgin Islands, and the 
Commonwealth of the Northern Mariana Islands.

``SEC. 675C. USES OF FUNDS.

    ``(a) Grants to Eligible Entities and Other Organizations.--
        ``(1) In general.--Not less than 90 percent of the funds made 
    available to a State under section 675A or 675B shall be used by 
    the State to make grants for the purposes described in section 672 
    to eligible entities.
        ``(2) Obligational authority.--Funds distributed to eligible 
    entities through grants made in accordance with paragraph (1) for a 
    fiscal year shall be available for obligation during that fiscal 
    year and the succeeding fiscal year, subject to paragraph (3).
        ``(3) Recapture and redistribution of unobligated funds.--
            ``(A) Amount.--Beginning on October 1, 2000, a State may 
        recapture and redistribute funds distributed to an eligible 
        entity through a grant made under paragraph (1) that are 
        unobligated at the end of a fiscal year if such unobligated 
        funds exceed 20 percent of the amount so distributed to such 
        eligible entity for such fiscal year.
            ``(B) Redistribution.--In redistributing funds recaptured 
        in accordance with this paragraph, States shall redistribute 
        such funds to an eligible entity, or require the original 
        recipient of the funds to redistribute the funds to a private, 
        nonprofit organization, located within the community served by 
        the original recipient of the funds, for activities consistent 
        with the purposes of this subtitle.
    ``(b) Statewide Activities.--
        ``(1) Use of remainder.--If a State uses less than 100 percent 
    of the grant or allotment received under section 675A or 675B to 
    make grants under subsection (a), the State shall use the remainder 
    of the grant or allotment under section 675A or 675B (subject to 
    paragraph (2)) for activities that may include--
            ``(A) providing training and technical assistance to those 
        entities in need of such training and assistance;
            ``(B) coordinating State-operated programs and services, 
        and at the option of the State, locally-operated programs and 
        services, targeted to low-income children and families with 
        services provided by eligible entities and other organizations 
        funded under this subtitle, including detailing appropriate 
        employees of State or local agencies to entities funded under 
        this subtitle, to ensure increased access to services provided 
        by such State or local agencies;
            ``(C) supporting statewide coordination and communication 
        among eligible entities;
            ``(D) analyzing the distribution of funds made available 
        under this subtitle within the State to determine if such funds 
        have been targeted to the areas of greatest need;
            ``(E) supporting asset-building programs for low-income 
        individuals, such as programs supporting individual development 
        accounts;
            ``(F) supporting innovative programs and activities 
        conducted by community action agencies or other neighborhood-
        based organizations to eliminate poverty, promote self-
        sufficiency, and promote community revitalization;
            ``(G) supporting State charity tax credits as described in 
        subsection (c); and
            ``(H) supporting other activities, consistent with the 
        purposes of this subtitle.
        ``(2) Administrative cap.--No State may spend more than the 
    greater of $55,000, or 5 percent, of the grant received under 
    section 675A or State allotment received under section 675B for 
    administrative expenses, including monitoring activities. Funds to 
    be spent for such expenses shall be taken from the portion of the 
    grant under section 675A or State allotment that remains after the 
    State makes grants to eligible entities under subsection (a). The 
    cost of activities conducted under paragraph (1)(A) shall not be 
    considered to be administrative expenses. The startup cost and cost 
    of administrative activities conducted under subsection (c) shall 
    be considered to be administrative expenses.
    ``(c) Charity Tax Credit.--
        ``(1) In general.--Subject to paragraph (2), if there is in 
    effect under State law a charity tax credit, the State may use for 
    any purpose the amount of the allotment that is available for 
    expenditure under subsection (b).
        ``(2) Limit.--The aggregate amount a State may use under 
    paragraph (1) during a fiscal year shall not exceed 100 percent of 
    the revenue loss of the State during the fiscal year that is 
    attributable to the charity tax credit, as determined by the 
    Secretary of the Treasury without regard to any such revenue loss 
    occurring before January 1, 1999.
        ``(3) Definitions and rules.--In this subsection:
            ``(A) Charity tax credit.--The term `charity tax credit' 
        means a nonrefundable credit against State income tax (or, in 
        the case of a State that does not impose an income tax, a 
        comparable benefit) that is allowable for contributions, in 
        cash or in kind, to qualified charities.
            ``(B) Qualified charity.--
                ``(i) In general.--The term `qualified charity' means 
            any organization--

                    ``(I) that is--

                        ``(aa) described in section 501(c)(3) of the 
                    Internal Revenue Code of 1986 and exempt from tax 
                    under section 501(a) of such Code;
                        ``(bb) an eligible entity; or
                        ``(cc) a public housing agency as defined in 
                    section 3(b)(6) of the United States Housing Act of 
                    1937 (42 U.S.C. 1437a(b)(6));

                    ``(II) that is certified by the appropriate State 
                authority as meeting the requirements of clauses (iii) 
                and (iv); and
                    ``(III) if such organization is otherwise required 
                to file a return under section 6033 of such Code, that 
                elects to treat the information required to be 
                furnished by clause (v) as being specified in section 
                6033(b) of such Code.

                ``(ii) Certain contributions to collection 
            organizations treated as contributions to qualified 
            charity.--

                    ``(I) In general.--A contribution to a collection 
                organization shall be treated as a contribution to a 
                qualified charity if the donor designates in writing 
                that the contribution is for the qualified charity.
                    ``(II) Collection organization.--The term 
                `collection organization' means an organization 
                described in section 501(c)(3) of such Code and exempt 
                from tax under section 501(a) of such Code--

                        ``(aa) that solicits and collects gifts and 
                    grants that, by agreement, are distributed to 
                    qualified charities;
                        ``(bb) that distributes to qualified charities 
                    at least 90 percent of the gifts and grants the 
                    organization receives that are designated for such 
                    qualified charities; and
                        ``(cc) that meets the requirements of clause 
                    (vi).
                ``(iii) Charity must primarily assist poor 
            individuals.--

                    ``(I) In general.--An organization meets the 
                requirements of this clause only if the appropriate 
                State authority reasonably expects that the predominant 
                activity of such organization will be the provision of 
                direct services within the United States to individuals 
                and families whose annual incomes generally do not 
                exceed 185 percent of the poverty line in order to 
                prevent or alleviate poverty among such individuals and 
                families.
                    ``(II) No recordkeeping in certain cases.--An 
                organization shall not be required to establish or 
                maintain records with respect to the incomes of 
                individuals and families for purposes of subclause (I) 
                if such individuals or families are members of groups 
                that are generally recognized as including 
                substantially only individuals and families described 
                in subclause (I).
                    ``(III) Food aid and homeless shelters.--Except as 
                otherwise provided by the appropriate State authority, 
                for purposes of subclause (I), services to individuals 
                in the form of--

                        ``(aa) donations of food or meals; or
                        ``(bb) temporary shelter to homeless 
                    individuals;

                shall be treated as provided to individuals described 
                in subclause (I) if the location and provision of such 
                services are such that the service provider may 
                reasonably conclude that the beneficiaries of such 
                services are predominantly individuals described in 
                subclause (I).

                ``(iv) Minimum expense requirement.--

                    ``(I) In general.--An organization meets the 
                requirements of this clause only if the appropriate 
                State authority reasonably expects that the annual 
                poverty program expenses of such organization will not 
                be less than 75 percent of the annual aggregate 
                expenses of such organization.
                    ``(II) Poverty program expense.--For purposes of 
                subclause (I)--

                        ``(aa) In general.--The term `poverty program 
                    expense' means any expense in providing direct 
                    services referred to in clause (iii).
                        ``(bb) Exceptions.--Such term shall not include 
                    any management or general expense, any expense for 
                    the purpose of influencing legislation (as defined 
                    in section 4911(d) of the Internal Revenue Code of 
                    1986), any expense for the purpose of fundraising, 
                    any expense for a legal service provided on behalf 
                    of any individual referred to in clause (iii), any 
                    expense for providing tuition assistance relating 
                    to compulsory school attendance, and any expense 
                    that consists of a payment to an affiliate of the 
                    organization.
                ``(v) Reporting requirement.--The information required 
            to be furnished under this clause about an organization 
            is--

                    ``(I) the percentages determined by dividing the 
                following categories of the organization's expenses for 
                the year by the total expenses of the organization for 
                the year: expenses for direct services, management 
                expenses, general expenses, fundraising expenses, and 
                payments to affiliates; and
                    ``(II) the category or categories (including food, 
                shelter, education, substance abuse prevention or 
                treatment, job training, or other) of services that 
                constitute predominant activities of the organization.

                ``(vi) Additional requirements for collection 
            organizations.--The requirements of this clause are met if 
            the organization--

                    ``(I) maintains separate accounting for revenues 
                and expenses; and
                    ``(II) makes available to the public information on 
                the administrative and fundraising costs of the 
                organization, and information as to the organizations 
                receiving funds from the organization and the amount of 
                such funds.

                ``(vii) Special rule for states requiring tax 
            uniformity.--In the case of a State--

                    ``(I) that has a constitutional requirement of tax 
                uniformity; and
                    ``(II) that, as of December 31, 1997, imposed a tax 
                on personal income with--

                        ``(aa) a single flat rate applicable to all 
                    earned and unearned income (except insofar as any 
                    amount is not taxed pursuant to tax forgiveness 
                    provisions); and
                        ``(bb) no generally available exemptions or 
                    deductions to individuals;
            the requirement of paragraph (2) shall be treated as met if 
            the amount of the credit described in paragraph (2) is 
            limited to a uniform percentage (but not greater than 25 
            percent) of State personal income tax liability (determined 
            without regard to credits).
        ``(4) Limitation on use of funds for startup and administrative 
    activities.--Except to the extent provided in subsection (b)(2), no 
    part of the aggregate amount a State uses under paragraph (1) may 
    be used to pay for the cost of the startup and administrative 
    activities conducted under this subsection.
        ``(5) Prohibition on use of funds for legal services or tuition 
    assistance.--No part of the aggregate amount a State uses under 
    paragraph (1) may be used to provide legal services or to provide 
    tuition assistance related to compulsory education requirements 
    (not including tuition assistance for tutoring, camps, skills 
    development, or other supplemental services or training).
        ``(6) Prohibition on supplanting funds.--No part of the 
    aggregate amount a State uses under paragraph (1) may be used to 
    supplant non-Federal funds that would be available, in the absence 
    of Federal funds, to offset a revenue loss of the State 
    attributable to a charity tax credit.

``SEC. 676. APPLICATION AND PLAN.

    ``(a) Designation of Lead Agency.--
        ``(1) Designation.--The chief executive officer of a State 
    desiring to receive a grant or allotment under section 675A or 675B 
    shall designate, in an application submitted to the Secretary under 
    subsection (b), an appropriate State agency that complies with the 
    requirements of paragraph (2) to act as a lead agency for purposes 
    of carrying out State activities under this subtitle.
        ``(2) Duties.--The lead agency shall--
            ``(A) develop the State plan to be submitted to the 
        Secretary under subsection (b);
            ``(B) in conjunction with the development of the State plan 
        as required under subsection (b), hold at least one hearing in 
        the State with sufficient time and statewide distribution of 
        notice of such hearing, to provide to the public an opportunity 
        to comment on the proposed use and distribution of funds to be 
        provided through the grant or allotment under section 675A or 
        675B for the period covered by the State plan; and
            ``(C) conduct reviews of eligible entities under section 
        678B.
        ``(3) Legislative hearing.--In order to be eligible to receive 
    a grant or allotment under section 675A or 675B, the State shall 
    hold at least one legislative hearing every 3 years in conjunction 
    with the development of the State plan.
    ``(b) State Application and Plan.--Beginning with fiscal year 2000, 
to be eligible to receive a grant or allotment under section 675A or 
675B, a State shall prepare and submit to the Secretary an application 
and State plan covering a period of not less than 1 fiscal year and not 
more than 2 fiscal years. The plan shall be submitted not later than 30 
days prior to the beginning of the first fiscal year covered by the 
plan, and shall contain such information as the Secretary shall 
require, including--
        ``(1) an assurance that funds made available through the grant 
    or allotment will be used--
            ``(A) to support activities that are designed to assist 
        low-income families and individuals, including families and 
        individuals receiving assistance under part A of title IV of 
        the Social Security Act (42 U.S.C. 601 et seq.), homeless 
        families and individuals, migrant or seasonal farmworkers, and 
        elderly low-income individuals and families, and a description 
        of how such activities will enable the families and 
        individuals--
                ``(i) to remove obstacles and solve problems that block 
            the achievement of self-sufficiency (including self-
            sufficiency for families and individuals who are attempting 
            to transition off a State program carried out under part A 
            of title IV of the Social Security Act);
                ``(ii) to secure and retain meaningful employment;
                ``(iii) to attain an adequate education, with 
            particular attention toward improving literacy skills of 
            the low-income families in the communities involved, which 
            may include carrying out family literacy initiatives;
                ``(iv) to make better use of available income;
                ``(v) to obtain and maintain adequate housing and a 
            suitable living environment;
                ``(vi) to obtain emergency assistance through loans, 
            grants, or other means to meet immediate and urgent family 
            and individual needs; and
                ``(vii) to achieve greater participation in the affairs 
            of the communities involved, including the development of 
            public and private grassroots partnerships with local law 
            enforcement agencies, local housing authorities, private 
            foundations, and other public and private partners to--

                    ``(I) document best practices based on successful 
                grassroots intervention in urban areas, to develop 
                methodologies for widespread replication; and
                    ``(II) strengthen and improve relationships with 
                local law enforcement agencies, which may include 
                participation in activities such as neighborhood or 
                community policing efforts;

            ``(B) to address the needs of youth in low-income 
        communities through youth development programs that support the 
        primary role of the family, give priority to the prevention of 
        youth problems and crime, and promote increased community 
        coordination and collaboration in meeting the needs of youth, 
        and support development and expansion of innovative community-
        based youth development programs that have demonstrated success 
        in preventing or reducing youth crime, such as--
                ``(i) programs for the establishment of violence-free 
            zones that would involve youth development and intervention 
            models (such as models involving youth mediation, youth 
            mentoring, life skills training, job creation, and 
            entrepreneurship programs); and
                ``(ii) after-school child care programs; and
            ``(C) to make more effective use of, and to coordinate 
        with, other programs related to the purposes of this subtitle 
        (including State welfare reform efforts);
        ``(2) a description of how the State intends to use 
    discretionary funds made available from the remainder of the grant 
    or allotment described in section 675C(b) in accordance with this 
    subtitle, including a description of how the State will support 
    innovative community and neighborhood-based initiatives related to 
    the purposes of this subtitle;
        ``(3) information provided by eligible entities in the State, 
    containing--
            ``(A) a description of the service delivery system, for 
        services provided or coordinated with funds made available 
        through grants made under section 675C(a), targeted to low-
        income individuals and families in communities within the 
        State;
            ``(B) a description of how linkages will be developed to 
        fill identified gaps in the services, through the provision of 
        information, referrals, case management, and followup 
        consultations;
            ``(C) a description of how funds made available through 
        grants made under section 675C(a) will be coordinated with 
        other public and private resources; and
            ``(D) a description of how the local entity will use the 
        funds to support innovative community and neighborhood-based 
        initiatives related to the purposes of this subtitle, which may 
        include fatherhood initiatives and other initiatives with the 
        goal of strengthening families and encouraging effective 
        parenting;
        ``(4) an assurance that eligible entities in the State will 
    provide, on an emergency basis, for the provision of such supplies 
    and services, nutritious foods, and related services, as may be 
    necessary to counteract conditions of starvation and malnutrition 
    among low-income individuals;
        ``(5) an assurance that the State and the eligible entities in 
    the State will coordinate, and establish linkages between, 
    governmental and other social services programs to assure the 
    effective delivery of such services to low-income individuals and 
    to avoid duplication of such services, and a description of how the 
    State and the eligible entities will coordinate the provision of 
    employment and training activities, as defined in section 101 of 
    such Act, in the State and in communities with entities providing 
    activities through statewide and local workforce investment systems 
    under the Workforce Investment Act of 1998;
        ``(6) an assurance that the State will ensure coordination 
    between antipoverty programs in each community in the State, and 
    ensure, where appropriate, that emergency energy crisis 
    intervention programs under title XXVI (relating to low-income home 
    energy assistance) are conducted in such community;
        ``(7) an assurance that the State will permit and cooperate 
    with Federal investigations undertaken in accordance with section 
    678D;
        ``(8) an assurance that any eligible entity in the State that 
    received funding in the previous fiscal year through a community 
    services block grant made under this subtitle will not have its 
    funding terminated under this subtitle, or reduced below the 
    proportional share of funding the entity received in the previous 
    fiscal year unless, after providing notice and an opportunity for a 
    hearing on the record, the State determines that cause exists for 
    such termination or such reduction, subject to review by the 
    Secretary as provided in section 678C(b);
        ``(9) an assurance that the State and eligible entities in the 
    State will, to the maximum extent possible, coordinate programs 
    with and form partnerships with other organizations serving low-
    income residents of the communities and members of the groups 
    served by the State, including religious organizations, charitable 
    groups, and community organizations;
        ``(10) an assurance that the State will require each eligible 
    entity in the State to establish procedures under which a low-
    income individual, community organization, or religious 
    organization, or representative of low-income individuals that 
    considers its organization, or low-income individuals, to be 
    inadequately represented on the board (or other mechanism) of the 
    eligible entity to petition for adequate representation;
        ``(11) an assurance that the State will secure from each 
    eligible entity in the State, as a condition to receipt of funding 
    by the entity through a community services block grant made under 
    this subtitle for a program, a community action plan (which shall 
    be submitted to the Secretary, at the request of the Secretary, 
    with the State plan) that includes a community-needs assessment for 
    the community served, which may be coordinated with community-needs 
    assessments conducted for other programs;
        ``(12) an assurance that the State and all eligible entities in 
    the State will, not later than fiscal year 2001, participate in the 
    Results Oriented Management and Accountability System, another 
    performance measure system for which the Secretary facilitated 
    development pursuant to section 678E(b), or an alternative system 
    for measuring performance and results that meets the requirements 
    of that section, and a description of outcome measures to be used 
    to measure eligible entity performance in promoting self-
    sufficiency, family stability, and community revitalization; and
        ``(13) information describing how the State will carry out the 
    assurances described in this subsection.
    ``(c) Funding Termination or Reductions.--For purposes of making a 
determination in accordance with subsection (b)(8) with respect to--
        ``(1) a funding reduction, the term `cause' includes--
            ``(A) a statewide redistribution of funds provided through 
        a community services block grant under this subtitle to respond 
        to--
                ``(i) the results of the most recently available census 
            or other appropriate data;
                ``(ii) the designation of a new eligible entity; or
                ``(iii) severe economic dislocation; or
            ``(B) the failure of an eligible entity to comply with the 
        terms of an agreement or a State plan, or to meet a State 
        requirement, as described in section 678C(a); and
        ``(2) a termination, the term `cause' includes the failure of 
    an eligible entity to comply with the terms of an agreement or a 
    State plan, or to meet a State requirement, as described in section 
    678C(a).
    ``(d) Procedures and Information.--The Secretary may prescribe 
procedures for the purpose of assessing the effectiveness of eligible 
entities in carrying out the purposes of this subtitle.
    ``(e) Revisions and Inspection.--
        ``(1) Revisions.--The chief executive officer of each State may 
    revise any plan prepared under this section and shall submit the 
    revised plan to the Secretary.
        ``(2) Public inspection.--Each plan or revised plan prepared 
    under this section shall be made available for public inspection 
    within the State in such a manner as will facilitate review of, and 
    comment on, the plan.
    ``(f) Transition.--For fiscal year 2000, to be eligible to receive 
a grant or allotment under section 675A or 675B, a State shall prepare 
and submit to the Secretary an application and State plan in accordance 
with the provisions of this subtitle (as in effect on the day before 
the date of enactment of the Coats Human Services Reauthorization Act 
of 1998), rather than the provisions of subsections (a) through (c) 
relating to applications and plans.
``SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGIBLE ENTITIES IN 
UNSERVED AREAS.
    ``(a) Qualified Organization In or Near Area.--
        ``(1) In general.--If any geographic area of a State is not, or 
    ceases to be, served by an eligible entity under this subtitle, and 
    if the chief executive officer of the State decides to serve such 
    area, the chief executive officer may solicit applications from, 
    and designate as an eligible entity--
            ``(A) a private nonprofit organization (which may include 
        an eligible entity) that is geographically located in the 
        unserved area, that is capable of providing a broad range of 
        services designed to eliminate poverty and foster self-
        sufficiency, and that meets the requirements of this subtitle; 
        and
            ``(B) a private nonprofit eligible entity that is 
        geographically located in an area contiguous to or within 
        reasonable proximity of the unserved area and that is already 
        providing related services in the unserved area.
        ``(2) Requirement.--In order to serve as the eligible entity 
    for the area, an entity described in paragraph (1)(B) shall agree 
    to add additional members to the board of the entity to ensure 
    adequate representation--
            ``(A) in each of the three required categories described in 
        subparagraphs (A), (B), and (C) of section 676B(a)(2), by 
        members that reside in the community comprised by the unserved 
        area; and
            ``(B) in the category described in section 676B(a)(2)(B), 
        by members that reside in the neighborhood to be served.
    ``(b) Special Consideration.--In designating an eligible entity 
under subsection (a), the chief executive officer shall grant the 
designation to an organization of demonstrated effectiveness in meeting 
the goals and purposes of this subtitle and may give priority, in 
granting the designation, to eligible entities that are providing 
related services in the unserved area, consistent with the needs 
identified by a community-needs assessment.
    ``(c) No Qualified Organization in or Near Area.--If no private, 
nonprofit organization is identified or determined to be qualified 
under subsection (a) to serve the unserved area as an eligible entity 
the chief executive officer may designate an appropriate political 
subdivision of the State to serve as an eligible entity for the area. 
In order to serve as the eligible entity for that area, the political 
subdivision shall have a board or other mechanism as required in 
section 676B(b).

``SEC. 676B. TRIPARTITE BOARDS.

    ``(a) Private Nonprofit Entities.--
        ``(1) Board.--In order for a private, nonprofit entity to be 
    considered to be an eligible entity for purposes of section 673(1), 
    the entity shall administer the community services block grant 
    program through a tripartite board described in paragraph (2) that 
    fully participates in the development, planning, implementation, 
    and evaluation of the program to serve low-income communities.
        ``(2) Selection and composition of board.--The members of the 
    board referred to in paragraph (1) shall be selected by the entity 
    and the board shall be composed so as to assure that--
            ``(A) \1/3\ of the members of the board are elected public 
        officials, holding office on the date of selection, or their 
        representatives, except that if the number of such elected 
        officials reasonably available and willing to serve on the 
        board is less than \1/3\ of the membership of the board, 
        membership on the board of appointive public officials or their 
        representatives may be counted in meeting such \1/3\ 
        requirement;
            ``(B)(i) not fewer than \1/3\ of the members are persons 
        chosen in accordance with democratic selection procedures 
        adequate to assure that these members are representative of 
        low-income individuals and families in the neighborhood served; 
        and
            ``(ii) each representative of low-income individuals and 
        families selected to represent a specific neighborhood within a 
        community under clause (i) resides in the neighborhood 
        represented by the member; and
            ``(C) the remainder of the members are officials or members 
        of business, industry, labor, religious, law enforcement, 
        education, or other major groups and interests in the community 
        served.
    ``(b) Public Organizations.--In order for a public organization to 
be considered to be an eligible entity for purposes of section 673(1), 
the entity shall administer the community services block grant program 
through--
        ``(1) a tripartite board, which shall have members selected by 
    the organization and shall be composed so as to assure that not 
    fewer than \1/3\ of the members are persons chosen in accordance 
    with democratic selection procedures adequate to assure that these 
    members--
            ``(A) are representative of low-income individuals and 
        families in the neighborhood served;
            ``(B) reside in the neighborhood served; and
            ``(C) are able to participate actively in the development, 
        planning, implementation, and evaluation of programs funded 
        under this subtitle; or
        ``(2) another mechanism specified by the State to assure 
    decisionmaking and participation by low-income individuals in the 
    development, planning, implementation, and evaluation of programs 
    funded under this subtitle.

``SEC. 677. PAYMENTS TO INDIAN TRIBES.

    ``(a) Reservation.--If, with respect to any State, the Secretary--
        ``(1) receives a request from the governing body of an Indian 
    tribe or tribal organization within the State that assistance under 
    this subtitle be made directly to such tribe or organization; and
        ``(2) determines that the members of such tribe or tribal 
    organization would be better served by means of grants made 
    directly to provide benefits under this subtitle,
the Secretary shall reserve from amounts that would otherwise be 
allotted to such State under section 675B for the fiscal year the 
amount determined under subsection (b).
    ``(b) Determination of Reserved Amount.--The Secretary shall 
reserve for the purpose of subsection (a) from amounts that would 
otherwise be allotted to such State, not less than 100 percent of an 
amount that bears the same ratio to the State allotment for the fiscal 
year involved as the population of all eligible Indians for whom a 
determination has been made under subsection (a) bears to the 
population of all individuals eligible for assistance through a 
community services block grant made under this subtitle in such State.
    ``(c) Awards.--The sums reserved by the Secretary on the basis of a 
determination made under subsection (a) shall be made available by 
grant to the Indian tribe or tribal organization serving the 
individuals for whom such a determination has been made.
    ``(d) Plan.--In order for an Indian tribe or tribal organization to 
be eligible for a grant award for a fiscal year under this section, the 
tribe or organization shall submit to the Secretary a plan for such 
fiscal year that meets such criteria as the Secretary may prescribe by 
regulation.
    ``(e) Definitions.--In this section:
        ``(1) Indian tribe; tribal organization.--The terms `Indian 
    tribe' and `tribal organization' mean a tribe, band, or other 
    organized group recognized in the State in which the tribe, band, 
    or group resides, or considered by the Secretary of the Interior, 
    to be an Indian tribe or an Indian organization for any purpose.
        ``(2) Indian.--The term `Indian' means a member of an Indian 
    tribe or of a tribal organization.

``SEC. 678. OFFICE OF COMMUNITY SERVICES.

    ``(a) Office.--The Secretary shall carry out the functions of this 
subtitle through an Office of Community Services, which shall be 
established in the Department of Health and Human Services. The Office 
shall be headed by a Director.
    ``(b) Grants, Contracts, and Cooperative Agreements.--The Secretary 
shall carry out functions of this subtitle through grants, contracts, 
or cooperative agreements.
``SEC. 678A. TRAINING, TECHNICAL ASSISTANCE, AND OTHER ACTIVITIES.
    ``(a) Activities.--
        ``(1) In general.--The Secretary shall use amounts reserved in 
    section 674(b)(2)--
            ``(A) for training, technical assistance, planning, 
        evaluation, and performance measurement, to assist States in 
        carrying out corrective action activities and monitoring (to 
        correct programmatic deficiencies of eligible entities), and 
        for reporting and data collection activities, related to 
        programs carried out under this subtitle; and
            ``(B) to distribute amounts in accordance with subsection 
        (c).
        ``(2) Grants, contracts, and cooperative agreements.--The 
    activities described in paragraph (1)(A) may be carried out by the 
    Secretary through grants, contracts, or cooperative agreements with 
    appropriate entities.
    ``(b) Terms and Technical Assistance Process.--The process for 
determining the training and technical assistance to be carried out 
under this section shall--
        ``(1) ensure that the needs of eligible entities and programs 
    relating to improving program quality (including quality of 
    financial management practices) are addressed to the maximum extent 
    feasible; and
        ``(2) incorporate mechanisms to ensure responsiveness to local 
    needs, including an ongoing procedure for obtaining input from the 
    national and State networks of eligible entities.
    ``(c) Distribution Requirement.--
        ``(1) In general.--The amounts reserved under section 
    674(b)(2)(A) for activities to be carried out under this subsection 
    shall be distributed directly to eligible entities, organizations, 
    or associations described in paragraph (2) for the purpose of 
    improving program quality (including quality of financial 
    management practices), management information and reporting 
    systems, and measurement of program results, and for the purpose of 
    ensuring responsiveness to identified local needs.
        ``(2) Eligible entities, organizations, or associations.--
    Eligible entities, organizations, or associations described in this 
    paragraph shall be eligible entities, or statewide or local 
    organizations or associations, with demonstrated expertise in 
    providing training to individuals and organizations on methods of 
    effectively addressing the needs of low-income families and 
    communities.

``SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.

    ``(a) In General.--In order to determine whether eligible entities 
meet the performance goals, administrative standards, financial 
management requirements, and other requirements of a State, the State 
shall conduct the following reviews of eligible entities:
        ``(1) A full onsite review of each such entity at least once 
    during each 3-year period.
        ``(2) An onsite review of each newly designated entity 
    immediately after the completion of the first year in which such 
    entity receives funds through the community services block grant 
    program.
        ``(3) Followup reviews including prompt return visits to 
    eligible entities, and their programs, that fail to meet the goals, 
    standards, and requirements established by the State.
        ``(4) Other reviews as appropriate, including reviews of 
    entities with programs that have had other Federal, State, or local 
    grants (other than assistance provided under this subtitle) 
    terminated for cause.
    ``(b) Requests.--The State may request training and technical 
assistance from the Secretary as needed to comply with the requirements 
of this section.
    ``(c) Evaluations by the Secretary.--The Secretary shall conduct in 
several States in each fiscal year evaluations (including 
investigations) of the use of funds received by the States under this 
subtitle in order to evaluate compliance with the provisions of this 
subtitle, and especially with respect to compliance with section 
676(b). The Secretary shall submit, to each State evaluated, a report 
containing the results of such evaluations, and recommendations of 
improvements designed to enhance the benefit and impact of the 
activities carried out with such funds for people in need. On receiving 
the report, the State shall submit to the Secretary a plan of action in 
response to the recommendations contained in the report. The results of 
the evaluations shall be submitted annually to the Chairperson of the 
Committee on Education and the Workforce of the House of 
Representatives and the Chairperson of the Committee on Labor and Human 
Resources of the Senate as part of the report submitted by the 
Secretary in accordance with section 678E(b)(2).
``SEC. 678C. CORRECTIVE ACTION; TERMINATION AND REDUCTION OF FUNDING.
    ``(a) Determination.--If the State determines, on the basis of a 
final decision in a review pursuant to section 678B, that an eligible 
entity fails to comply with the terms of an agreement, or the State 
plan, to provide services under this subtitle or to meet appropriate 
standards, goals, and other requirements established by the State 
(including performance objectives), the State shall--
        ``(1) inform the entity of the deficiency to be corrected;
        ``(2) require the entity to correct the deficiency;
        ``(3)(A) offer training and technical assistance, if 
    appropriate, to help correct the deficiency, and prepare and submit 
    to the Secretary a report describing the training and technical 
    assistance offered; or
        ``(B) if the State determines that such training and technical 
    assistance are not appropriate, prepare and submit to the Secretary 
    a report stating the reasons for the determination;
        ``(4)(A) at the discretion of the State (taking into account 
    the seriousness of the deficiency and the time reasonably required 
    to correct the deficiency), allow the entity to develop and 
    implement, within 60 days after being informed of the deficiency, a 
    quality improvement plan to correct such deficiency within a 
    reasonable period of time, as determined by the State; and
        ``(B) not later than 30 days after receiving from an eligible 
    entity a proposed quality improvement plan pursuant to subparagraph 
    (A), either approve such proposed plan or specify the reasons why 
    the proposed plan cannot be approved; and
        ``(5) after providing adequate notice and an opportunity for a 
    hearing, initiate proceedings to terminate the designation of or 
    reduce the funding under this subtitle of the eligible entity 
    unless the entity corrects the deficiency.
    ``(b) Review.--A determination to terminate the designation or 
reduce the funding of an eligible entity is reviewable by the 
Secretary. The Secretary shall, upon request, review such a 
determination. The review shall be completed not later than 90 days 
after the Secretary receives from the State all necessary documentation 
relating to the determination to terminate the designation or reduce 
the funding. If the review is not completed within 90 days, the 
determination of the State shall become final at the end of the 90th 
day.
    ``(c) Direct Assistance.--Whenever a State violates the assurances 
contained in section 676(b)(8) and terminates or reduces the funding of 
an eligible entity prior to the completion of the State hearing 
described in that section and the Secretary's review as required in 
subsection (b), the Secretary is authorized to provide financial 
assistance under this subtitle to the eligible entity affected until 
the violation is corrected. In such a case, the grant or allotment for 
the State under section 675A or 675B for the earliest appropriate 
fiscal year shall be reduced by an amount equal to the funds provided 
under this subsection to such eligible entity.

``SEC. 678D. FISCAL CONTROLS, AUDITS, AND WITHHOLDING.

    ``(a) Fiscal Controls, Procedures, Audits, and Inspections.--
        ``(1) In general.--A State that receives funds under this 
    subtitle shall--
            ``(A) establish fiscal control and fund accounting 
        procedures necessary to assure the proper disbursal of and 
        accounting for Federal funds paid to the State under this 
        subtitle, including procedures for monitoring the funds 
        provided under this subtitle;
            ``(B) ensure that cost and accounting standards of the 
        Office of Management and Budget apply to a recipient of the 
        funds under this subtitle;
            ``(C) subject to paragraph (2), prepare, at least every 
        year, an audit of the expenditures of the State of amounts 
        received under this subtitle and amounts transferred to carry 
        out the purposes of this subtitle; and
            ``(D) make appropriate books, documents, papers, and 
        records available to the Secretary and the Comptroller General 
        of the United States, or any of their duly authorized 
        representatives, for examination, copying, or mechanical 
        reproduction on or off the premises of the appropriate entity 
        upon a reasonable request for the items.
        ``(2) Audits.--
            ``(A) In general.--Subject to subparagraph (B), each audit 
        required by subsection (a)(1)(C) shall be conducted by an 
        entity independent of any agency administering activities or 
        services carried out under this subtitle and shall be conducted 
        in accordance with generally accepted accounting principles.
            ``(B) Single audit requirements.--Audits shall be conducted 
        under this paragraph in the manner and to the extent provided 
        in chapter 75 of title 31, United States Code (commonly known 
        as the `Single Audit Act Amendments of 1996').
            ``(C) Submission of copies.--Within 30 days after the 
        completion of each such audit in a State, the chief executive 
        officer of the State shall submit a copy of such audit to any 
        eligible entity that was the subject of the audit at no charge, 
        to the legislature of the State, and to the Secretary.
        ``(3) Repayments.--The State shall repay to the United States 
    amounts found not to have been expended in accordance with this 
    subtitle or the Secretary may offset such amounts against any other 
    amount to which the State is or may become entitled under this 
    subtitle.
    ``(b) Withholding.--
        ``(1) In general.--The Secretary shall, after providing 
    adequate notice and an opportunity for a hearing conducted within 
    the affected State, withhold funds from any State that does not 
    utilize the grant or allotment under section 675A or 675B in 
    accordance with the provisions of this subtitle, including the 
    assurances such State provided under section 676.
        ``(2) Response to complaints.--The Secretary shall respond in 
    an expeditious and speedy manner to complaints of a substantial or 
    serious nature that a State has failed to use funds in accordance 
    with the provisions of this subtitle, including the assurances 
    provided by the State under section 676. For purposes of this 
    paragraph, a complaint of a failure to meet any one of the 
    assurances provided under section 676 that constitutes disregarding 
    that assurance shall be considered to be a complaint of a serious 
    nature.
        ``(3) Investigations.--Whenever the Secretary determines that 
    there is a pattern of complaints of failures described in paragraph 
    (2) from any State in any fiscal year, the Secretary shall conduct 
    an investigation of the use of funds received under this subtitle 
    by such State in order to ensure compliance with the provisions of 
    this subtitle.

``SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIREMENTS.

    ``(a) State Accountability and Reporting Requirements.--
        ``(1) Performance measurement.--
            ``(A) In general.--By October 1, 2001, each State that 
        receives funds under this subtitle shall participate, and shall 
        ensure that all eligible entities in the State participate, in 
        a performance measurement system, which may be a performance 
        measurement system for which the Secretary facilitated 
        development pursuant to subsection (b), or an alternative 
        system that the Secretary is satisfied meets the requirements 
        of subsection (b).
            ``(B) Local agencies.--The State may elect to have local 
        agencies that are subcontractors of the eligible entities under 
        this subtitle participate in the performance measurement 
        system. If the State makes that election, references in this 
        section to eligible entities shall be considered to include the 
        local agencies.
        ``(2) Annual report.--Each State shall annually prepare and 
    submit to the Secretary a report on the measured performance of the 
    State and the eligible entities in the State. Prior to the 
    participation of the State in the performance measurement system, 
    the State shall include in the report any information collected by 
    the State relating to such performance. Each State shall also 
    include in the report an accounting of the expenditure of funds 
    received by the State through the community services block grant 
    program, including an accounting of funds spent on administrative 
    costs by the State and the eligible entities, and funds spent by 
    eligible entities on the direct delivery of local services, and 
    shall include information on the number of and characteristics of 
    clients served under this subtitle in the State, based on data 
    collected from the eligible entities. The State shall also include 
    in the report a summary describing the training and technical 
    assistance offered by the State under section 678C(a)(3) during the 
    year covered by the report.
    ``(b) Secretary's Accountability and Reporting Requirements.--
        ``(1) Performance measurement.--The Secretary, in collaboration 
    with the States and with eligible entities throughout the Nation, 
    shall facilitate the development of one or more model performance 
    measurement systems, which may be used by the States and by 
    eligible entities to measure their performance in carrying out the 
    requirements of this subtitle and in achieving the goals of their 
    community action plans. The Secretary shall provide technical 
    assistance, including support for the enhancement of electronic 
    data systems, to States and to eligible entities to enhance their 
    capability to collect and report data for such a system and to aid 
    in their participation in such a system.
        ``(2) Reporting requirements.--At the end of each fiscal year 
    beginning after September 30, 1999, the Secretary shall, directly 
    or by grant or contract, prepare a report containing--
            ``(A) a summary of the planned use of funds by each State, 
        and the eligible entities in the State, under the community 
        services block grant program, as contained in each State plan 
        submitted pursuant to section 676;
            ``(B) a description of how funds were actually spent by the 
        State and eligible entities in the State, including a breakdown 
        of funds spent on administrative costs and on the direct 
        delivery of local services by eligible entities;
            ``(C) information on the number of entities eligible for 
        funds under this subtitle, the number of low-income persons 
        served under this subtitle, and such demographic data on the 
        low-income populations served by eligible entities as is 
        determined by the Secretary to be feasible;
            ``(D) a comparison of the planned uses of funds for each 
        State and the actual uses of the funds;
            ``(E) a summary of each State's performance results, and 
        the results for the eligible entities, as collected and 
        submitted by the States in accordance with subsection (a)(2); 
        and
            ``(F) any additional information that the Secretary 
        considers to be appropriate to carry out this subtitle, if the 
        Secretary informs the States of the need for such additional 
        information and allows a reasonable period of time for the 
        States to collect and provide the information.
        ``(3) Submission.--The Secretary shall submit to the Committee 
    on Education and the Workforce of the House of Representatives and 
    the Committee on Labor and Human Resources of the Senate the report 
    described in paragraph (2), and any comments the Secretary may have 
    with respect to such report. The report shall include definitions 
    of direct and administrative costs used by the Department of Health 
    and Human Services for programs funded under this subtitle.
        ``(4) Costs.--Of the funds reserved under section 674(b)(3), 
    not more than $350,000 shall be available to carry out the 
    reporting requirements contained in paragraph (2).

``SEC. 678F. LIMITATIONS ON USE OF FUNDS.

    ``(a) Construction of Facilities.--
        ``(1) Limitations.--Except as provided in paragraph (2), grants 
    made under this subtitle (other than amounts reserved under section 
    674(b)(3)) may not be used by the State, or by any other person 
    with which the State makes arrangements to carry out the purposes 
    of this subtitle, for the purchase or improvement of land, or the 
    purchase, construction, or permanent improvement (other than low-
    cost residential weatherization or other energy-related home 
    repairs) of any building or other facility.
        ``(2) Waiver.--The Secretary may waive the limitation contained 
    in paragraph (1) upon a State request for such a waiver, if the 
    Secretary finds that the request describes extraordinary 
    circumstances to justify the purchase of land or the construction 
    of facilities (or the making of permanent improvements) and that 
    permitting the waiver will contribute to the ability of the State 
    to carry out the purposes of this subtitle.
    ``(b) Political Activities.--
        ``(1) Treatment as a state or local agency.--For purposes of 
    chapter 15 of title 5, United States Code, any entity that assumes 
    responsibility for planning, developing, and coordinating 
    activities under this subtitle and receives assistance under this 
    subtitle shall be deemed to be a State or local agency. For 
    purposes of paragraphs (1) and (2) of section 1502(a) of such 
    title, any entity receiving assistance under this subtitle shall be 
    deemed to be a State or local agency.
        ``(2) Prohibitions.--Programs assisted under this subtitle 
    shall not be carried on in a manner involving the use of program 
    funds, the provision of services, or the employment or assignment 
    of personnel, in a manner supporting or resulting in the 
    identification of such programs with--
            ``(A) any partisan or nonpartisan political activity or any 
        political activity associated with a candidate, or contending 
        faction or group, in an election for public or party office;
            ``(B) any activity to provide voters or prospective voters 
        with transportation to the polls or similar assistance in 
        connection with any such election; or
            ``(C) any voter registration activity.
        ``(3) Rules and regulations.--The Secretary, after consultation 
    with the Office of Personnel Management, shall issue rules and 
    regulations to provide for the enforcement of this subsection, 
    which shall include provisions for summary suspension of assistance 
    or other action necessary to permit enforcement on an emergency 
    basis.
    ``(c) Nondiscrimination.--
        ``(1) In general.--No person shall, on the basis of race, 
    color, national origin, or sex be excluded from participation in, 
    be denied the benefits of, or be subjected to discrimination under, 
    any program or activity funded in whole or in part with funds made 
    available under this subtitle. Any prohibition against 
    discrimination on the basis of age under the Age Discrimination Act 
    of 1975 (42 U.S.C. 6101 et seq.) or with respect to an otherwise 
    qualified individual with a disability as provided in section 504 
    of the Rehabilitation Act of 1973 (29 U.S.C. 794), or title II of 
    the Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et 
    seq.) shall also apply to any such program or activity.
        ``(2) Action of secretary.--Whenever the Secretary determines 
    that a State that has received a payment under this subtitle has 
    failed to comply with paragraph (1) or an applicable regulation, 
    the Secretary shall notify the chief executive officer of the State 
    and shall request that the officer secure compliance. If within a 
    reasonable period of time, not to exceed 60 days, the chief 
    executive officer fails or refuses to secure compliance, the 
    Secretary is authorized to--
            ``(A) refer the matter to the Attorney General with a 
        recommendation that an appropriate civil action be instituted;
            ``(B) exercise the powers and functions provided by title 
        VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), 
        the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), 
        section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), 
        or title II of the Americans with Disabilities Act of 1990 (42 
        U.S.C. 12131 et seq.), as may be applicable; or
            ``(C) take such other action as may be provided by law.
        ``(3) Action of attorney general.--When a matter is referred to 
    the Attorney General pursuant to paragraph (2), or whenever the 
    Attorney General has reason to believe that the State is engaged in 
    a pattern or practice of discrimination in violation of the 
    provisions of this subsection, the Attorney General may bring a 
    civil action in any appropriate United States district court for 
    such relief as may be appropriate, including injunctive relief.

``SEC. 678G. DRUG AND CHILD SUPPORT SERVICES AND REFERRALS.

    ``(a) Drug Testing and Rehabilitation.--
        ``(1) In general.--Nothing in this subtitle shall be construed 
    to prohibit a State from testing participants in programs, 
    activities, or services carried out or provided under this subtitle 
    for controlled substances. A State that conducts such testing shall 
    inform the participants who test positive for any of such 
    substances about the availability of treatment or rehabilitation 
    services and refer such participants for appropriate treatment or 
    rehabilitation services.
        ``(2) Administrative expenses.--Any funds provided under this 
    subtitle expended for such testing shall be considered to be 
    expended for administrative expenses and shall be subject to the 
    limitation specified in section 675C(b)(2).
        ``(3) Definition.--In this subsection, the term `controlled 
    substance' has the meaning given the term in section 102 of the 
    Controlled Substances Act (21 U.S.C. 802).
    ``(b) Child Support Services and Referrals.--During each fiscal 
year for which an eligible entity receives a grant under section 675C, 
such entity shall--
        ``(1) inform custodial parents in single-parent families that 
    participate in programs, activities, or services carried out or 
    provided under this subtitle about the availability of child 
    support services; and
        ``(2) refer eligible parents to the child support offices of 
    State and local governments.

``SEC. 679. OPERATIONAL RULE.

    ``(a) Religious Organizations Included as Nongovernmental 
Providers.--For any program carried out by the Federal Government, or 
by a State or local government under this subtitle, the government 
shall consider, on the same basis as other nongovernmental 
organizations, religious organizations to provide the assistance under 
the program, so long as the program is implemented in a manner 
consistent with the Establishment Clause of the first amendment to the 
Constitution. Neither the Federal Government nor a State or local 
government receiving funds under this subtitle shall discriminate 
against an organization that provides assistance under, or applies to 
provide assistance under, this subtitle, on the basis that the 
organization has a religious character.
    ``(b) Religious Character and Independence.--
        ``(1) In general.--A religious organization that provides 
    assistance under a program described in subsection (a) shall retain 
    its religious character and control over the definition, 
    development, practice, and expression of its religious beliefs.
        ``(2) Additional safeguards.--Neither the Federal Government 
    nor a State or local government shall require a religious 
    organization--
            ``(A) to alter its form of internal governance, except (for 
        purposes of administration of the community services block 
        grant program) as provided in section 676B; or
            ``(B) to remove religious art, icons, scripture, or other 
        symbols;
    in order to be eligible to provide assistance under a program 
    described in subsection (a).
        ``(3) Employment practices.--A religious organization's 
    exemption provided under section 702 of the Civil Rights Act of 
    1964 (42 U.S.C. 2000e-1) regarding employment practices shall not 
    be affected by its participation in, or receipt of funds from, 
    programs described in subsection (a).
    ``(c) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to a religious organization to provide assistance 
under any program described in subsection (a) shall be expended for 
sectarian worship, instruction, or proselytization.
    ``(d) Fiscal Accountability.--
        ``(1) In general.--Except as provided in paragraph (2), any 
    religious organization providing assistance under any program 
    described in subsection (a) shall be subject to the same 
    regulations as other nongovernmental organizations to account in 
    accord with generally accepted accounting principles for the use of 
    such funds provided under such program.
        ``(2) Limited audit.--Such organization shall segregate 
    government funds provided under such program into a separate 
    account. Only the government funds shall be subject to audit by the 
    government.
    ``(e) Treatment of Eligible Entities and Other Intermediate 
Organizations.--If an eligible entity or other organization (referred 
to in this subsection as an `intermediate organization'), acting under 
a contract, or grant or other agreement, with the Federal Government or 
a State or local government, is given the authority under the contract 
or agreement to select nongovernmental organizations to provide 
assistance under the programs described in subsection (a), the 
intermediate organization shall have the same duties under this section 
as the government.

``SEC. 680. DISCRETIONARY AUTHORITY OF THE SECRETARY.

    ``(a) Grants, Contracts, Arrangements, Loans, and Guarantees.--
        ``(1) In general.--The Secretary shall, from funds reserved 
    under section 674(b)(3), make grants, loans, or guarantees to 
    States and public agencies and private, nonprofit organizations, or 
    enter into contracts or jointly financed cooperative arrangements 
    with States and public agencies and private, nonprofit 
    organizations (and for-profit organizations, to the extent 
    specified in paragraph (2)(E)) for each of the objectives described 
    in paragraphs (2) through (4).
        ``(2) Community economic development.--
            ``(A) Economic development activities.--The Secretary shall 
        make grants described in paragraph (1) on a competitive basis 
        to private, nonprofit organizations that are community 
        development corporations to provide technical and financial 
        assistance for economic development activities designed to 
        address the economic needs of low-income individuals and 
        families by creating employment and business development 
        opportunities.
            ``(B) Consultation.--The Secretary shall exercise the 
        authority provided under subparagraph (A) after consultation 
        with other relevant Federal officials.
            ``(C) Governing boards.--For a community development 
        corporation to receive funds to carry out this paragraph, the 
        corporation shall be governed by a board that shall consist of 
        residents of the community and business and civic leaders and 
        shall have as a principal purpose planning, developing, or 
        managing low-income housing or community development projects.
            ``(D) Geographic distribution.--In making grants to carry 
        out this paragraph, the Secretary shall take into consideration 
        the geographic distribution of funding among States and the 
        relative proportion of funding among rural and urban areas.
            ``(E) Reservation.--Of the amounts made available to carry 
        out this paragraph, the Secretary may reserve not more than 1 
        percent for each fiscal year to make grants to private, 
        nonprofit organizations or to enter into contracts with 
        private, nonprofit or for-profit organizations to provide 
        technical assistance to aid community development corporations 
        in developing or implementing activities funded to carry out 
        this paragraph and to evaluate activities funded to carry out 
        this paragraph.
        ``(3) Rural community development activities.--The Secretary 
    shall provide the assistance described in paragraph (1) for rural 
    community development activities, which shall include providing--
            ``(A) grants to private, nonprofit corporations to enable 
        the corporations to provide assistance concerning home repair 
        to rural low-income families and concerning planning and 
        developing low-income rural rental housing units; and
            ``(B) grants to multistate, regional, private, nonprofit 
        organizations to enable the organizations to provide training 
        and technical assistance to small, rural communities concerning 
        meeting their community facility needs.
        ``(4) Neighborhood innovation projects.--The Secretary shall 
    provide the assistance described in paragraph (1) for neighborhood 
    innovation projects, which shall include providing grants to 
    neighborhood-based private, nonprofit organizations to test or 
    assist in the development of new approaches or methods that will 
    aid in overcoming special problems identified by communities or 
    neighborhoods or otherwise assist in furthering the purposes of 
    this subtitle, and which may include providing assistance for 
    projects that are designed to serve low-income individuals and 
    families who are not being effectively served by other programs.
    ``(b) Evaluation.--The Secretary shall require all activities 
receiving assistance under this section to be evaluated for their 
effectiveness. Funding for such evaluations shall be provided as a 
stated percentage of the assistance or through a separate grant awarded 
by the Secretary specifically for the purpose of evaluation of a 
particular activity or group of activities.
    ``(c) Annual Report.--The Secretary shall compile an annual report 
containing a summary of the evaluations required in subsection (b) and 
a listing of all activities assisted under this section. The Secretary 
shall annually submit the report to the Chairperson of the Committee on 
Education and the Workforce of the House of Representatives and the 
Chairperson of the Committee on Labor and Human Resources of the 
Senate.

``SEC. 681. COMMUNITY FOOD AND NUTRITION PROGRAMS.

    ``(a) Grants.--The Secretary may, through grants to public and 
private, nonprofit agencies, provide for community-based, local, 
statewide, and national programs--
        ``(1) to coordinate private and public food assistance 
    resources, wherever the grant recipient involved determines such 
    coordination to be inadequate, to better serve low-income 
    populations;
        ``(2) to assist low-income communities to identify potential 
    sponsors of child nutrition programs and to initiate such programs 
    in underserved or unserved areas; and
        ``(3) to develop innovative approaches at the State and local 
    level to meet the nutrition needs of low-income individuals.
    ``(b) Allotments and Distribution of Funds.--
        ``(1) Not to exceed $6,000,000 in appropriations.--Of the 
    amount appropriated for a fiscal year to carry out this section 
    (but not to exceed $6,000,000), the Secretary shall distribute 
    funds for grants under subsection (a) as follows:
            ``(A) Allotments.--From a portion equal to 60 percent of 
        such amount (but not to exceed $3,600,000), the Secretary shall 
        allot for grants to eligible agencies for statewide programs in 
        each State the amount that bears the same ratio to such portion 
        as the low-income and unemployed population of such State bears 
        to the low-income and unemployed population of all the States.
            ``(B) Competitive grants.--From a portion equal to 40 
        percent of such amount (but not to exceed $2,400,000), the 
        Secretary shall make grants on a competitive basis to eligible 
        agencies for local and statewide programs.
        ``(2) Greater available appropriations.--Any amounts 
    appropriated for a fiscal year to carry out this section in excess 
    of $6,000,000 shall be allotted as follows:
            ``(A) Allotments.--The Secretary shall use 40 percent of 
        such excess to allot for grants under subsection (a) to 
        eligible agencies for statewide programs in each State an 
        amount that bears the same ratio to 40 percent of such excess 
        as the low-income and unemployed population of such State bears 
        to the low-income and unemployed population of all the States.
            ``(B) Competitive grants for local and statewide 
        programs.--The Secretary shall use 40 percent of such excess to 
        make grants under subsection (a) on a competitive basis to 
        eligible agencies for local and statewide programs.
            ``(C) Competitive grants for nationwide programs.--The 
        Secretary shall use the remaining 20 percent of such excess to 
        make grants under subsection (a) on a competitive basis to 
        eligible agencies for nationwide programs, including programs 
        benefiting Indians, as defined in section 677, and migrant or 
        seasonal farmworkers.
        ``(3) Eligibility for allotments for statewide programs.--To be 
    eligible to receive an allotment under paragraph (1)(A) or (2)(A), 
    an eligible agency shall demonstrate that the proposed program is 
    statewide in scope and represents a comprehensive and coordinated 
    effort to alleviate hunger within the State.
        ``(4) Minimum allotments for statewide programs.--
            ``(A) In general.--From the amounts allotted under 
        paragraphs (1)(A) and (2)(A), the minimum total allotment for 
        each State for each fiscal year shall be--
                ``(i) $15,000 if the total amount appropriated to carry 
            out this section is not less than $7,000,000 but less than 
            $10,000,000;
                ``(ii) $20,000 if the total amount appropriated to 
            carry out this section is not less than $10,000,000 but 
            less than $15,000,000; or
                ``(iii) $30,000 if the total amount appropriated to 
            carry out this section is not less than $15,000,000.
            ``(B) Definition.--In this paragraph, the term `State' does 
        not include Guam, American Samoa, the United States Virgin 
        Islands, and the Commonwealth of the Northern Mariana Islands.
        ``(5) Maximum grants.--From funds made available under 
    paragraphs (1)(B) and (2)(B) for any fiscal year, the Secretary may 
    not make grants under subsection (a) to an eligible agency in an 
    aggregate amount exceeding $50,000. From funds made available under 
    paragraph (2)(C) for any fiscal year, the Secretary may not make 
    grants under subsection (a) to an eligible agency in an aggregate 
    amount exceeding $300,000.
    ``(c) Report.--For each fiscal year, the Secretary shall prepare 
and submit, to the Committee on Education and the Workforce of the 
House of Representatives and the Committee on Labor and Human Resources 
of the Senate, a report concerning the grants made under this section. 
Such report shall include--
        ``(1) a list of grant recipients;
        ``(2) information on the amount of funding awarded to each 
    grant recipient; and
        ``(3) a summary of the activities performed by the grant 
    recipients with funding awarded under this section and a 
    description of the manner in which such activities meet the 
    objectives described in subsection (a).
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of fiscal years 1999 through 2003.
``SEC. 682. NATIONAL OR REGIONAL PROGRAMS DESIGNED TO PROVIDE 
INSTRUCTIONAL ACTIVITIES FOR LOW-INCOME YOUTH.
    ``(a) General Authority.--The Secretary is authorized to make a 
grant to an eligible service provider to administer national or 
regional programs to provide instructional activities for low-income 
youth. In making such a grant, the Secretary shall give priority to 
eligible service providers that have a demonstrated ability to operate 
such a program.
    ``(b) Program Requirements.--Any instructional activity carried out 
by an eligible service provider receiving a grant under this section 
shall be carried out on the campus of an institution of higher 
education (as defined in section 1201(a) of the Higher Education Act of 
1965 (20 U.S.C. 1141(a))) and shall include--
        ``(1) access to the facilities and resources of such an 
    institution;
        ``(2) an initial medical examination and follow-up referral or 
    treatment, without charge, for youth during their participation in 
    such activity;
        ``(3) at least one nutritious meal daily, without charge, for 
    participating youth during each day of participation;
        ``(4) high quality instruction in a variety of sports (that 
    shall include swimming and that may include dance and any other 
    high quality recreational activity) provided by coaches and 
    teachers from institutions of higher education and from elementary 
    and secondary schools (as defined in section 14101 of the 
    Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)); 
    and
        ``(5) enrichment instruction and information on matters 
    relating to the well-being of youth, to include educational 
    opportunities and information on study practices, education for the 
    prevention of drug and alcohol abuse, and information on health and 
    nutrition, career opportunities, and family and job 
    responsibilities.
    ``(c) Advisory Committee; Partnerships.--The eligible service 
provider shall, in each community in which a program is funded under 
this section--
        ``(1) ensure that--
            ``(A) a community-based advisory committee is established, 
        with representatives from local youth, family, and social 
        service organizations, schools, entities providing park and 
        recreation services, and other community-based organizations 
        serving high-risk youth; or
            ``(B) an existing community-based advisory board, 
        commission, or committee with similar membership is utilized to 
        serve as the committee described in subparagraph (A); and
        ``(2) enter into formal partnerships with youth-serving 
    organizations or other appropriate social service entities in order 
    to link program participants with year-round services in their home 
    communities that support and continue the objectives of this 
    subtitle.
    ``(d) Eligible Providers.--A service provider that is a national 
private, nonprofit organization, a coalition of such organizations, or 
a private, nonprofit organization applying jointly with a business 
concern shall be eligible to apply for a grant under this section if--
        ``(1) the applicant has demonstrated experience in operating a 
    program providing instruction to low-income youth;
        ``(2) the applicant agrees to contribute an amount (in cash or 
    in kind, fairly evaluated) of not less than 25 percent of the 
    amount requested, for the program funded through the grant;
        ``(3) the applicant agrees to use no funds from a grant 
    authorized under this section for administrative expenses; and
        ``(4) the applicant agrees to comply with the regulations or 
    program guidelines promulgated by the Secretary for use of funds 
    made available through the grant.
    ``(e) Application Process.--To be eligible to receive a grant under 
this section, a service provider shall submit to the Secretary, for 
approval, an application at such time, in such manner, and containing 
such information as the Secretary may require.
    ``(f) Promulgation of Regulations or Program Guidelines.--The 
Secretary shall promulgate regulations or program guidelines to ensure 
funds made available through a grant made under this section are used 
in accordance with the objectives of this subtitle.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated $15,000,000 for each of fiscal years 1999 through 2003 for 
grants to carry out this section.

``SEC. 683. REFERENCES.

    ``Any reference in any provision of law to the poverty line set 
forth in section 624 or 625 of the Economic Opportunity Act of 1964 
shall be construed to be a reference to the poverty line defined in 
section 673. Except as otherwise provided, any reference in any 
provision of law to any community action agency designated under title 
II of the Economic Opportunity Act of 1964 shall be construed to be a 
reference to an entity eligible to receive funds under the community 
services block grant program.''.

SEC. 202. CONFORMING AMENDMENTS.

    (a) Older Americans Act of 1965.--Section 306(a)(6)(E)(ii) of the 
Older Americans Act of 1965 (42 U.S.C. 3026(a)(6)(E)(ii)) is amended by 
striking ``section 675(c)(3) of the Community Services Block Grant Act 
(42 U.S.C. 9904(c)(3))'' and inserting ``section 676B of the Community 
Services Block Grant Act''.
    (b) Community Economic Development Act of 1981.--
        (1) Source of funds.--Section 614 of the Community Economic 
    Development Act of 1981 (42 U.S.C. 9803) is repealed.
        (2) Advisory community investment board.--Section 615(a)(2) of 
    the Community Economic Development Act of 1981 (42 U.S.C. 
    9804(a)(2)) is amended by striking ``through the Office'' and all 
    that follows and inserting ``through an appropriate office.''.
    (c) Human Services Reauthorization Act of 1986.--Section 407 of the 
Human Services Reauthorization Act of 1986 (42 U.S.C. 9812a) is 
amended--
        (1) in subsection (a)--
            (A) by inserting after ``funds available'' the following: 
        ``(before the date of enactment of the Coats Human Services 
        Reauthorization Act of 1998)''; and
            (B) by inserting after ``9910(a))'' the following: ``(as in 
        effect before such date)''; and
        (2) in subsection (b)(2)--
            (A) by inserting after ``funds available'' the following: 
        ``(before the date of enactment of the Coats Human Services 
        Reauthorization Act of 1998)''; and
            (B) by inserting after ``9910(a))'' the following: ``(as in 
        effect before such date)''.
    (d) Anti-Drug Abuse Act of 1988.--Section 3521(c)(2) of the Anti-
Drug Abuse Act of 1988 (42 U.S.C. 11841(c)(2)) is amended by striking 
``, such as activities authorized by section 681(a)(2)(F) of the 
Community Services Block Grant Act (42 U.S.C. section 
9910(a)(2)(F)),''.

              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Low-Income Home Energy Assistance 
Amendments of 1998''.

SEC. 302. AUTHORIZATION.

    (a) In General.--Section 2602(b) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended by inserting ``, 
such sums as may be necessary for each of fiscal years 2000 and 2001, 
and $2,000,000,000 for each of fiscal years 2002 through 2004'' after 
``1995 through 1999''.
    (b) Program Year.--Section 2602(c) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8621(c)) is amended to read as 
follows:
    ``(c) Amounts appropriated under this section for any fiscal year 
for programs and activities under this title shall be made available 
for obligation in the succeeding fiscal year.''.
    (c) Incentive Program for Leveraging Non-Federal Resources.--
Section 2602(d) of the Low-Income Home Energy Assistance Act of 1981 
(42 U.S.C. 8621(d)) is amended--
        (1) by striking ``(d)'' and inserting ``(d)(1)'';
        (2) by striking ``are authorized'' and inserting ``is 
    authorized'';
        (3) by striking ``$50,000,000'' and all that follows and 
    inserting the following: ``$30,000,000 for each of fiscal years 
    1999 through 2004, except as provided in paragraph (2).''; and
        (4) by adding at the end the following:
    ``(2) For any of fiscal years 1999 through 2004 for which the 
amount appropriated under subsection (b) is not less than 
$1,400,000,000, there is authorized to be appropriated $50,000,000 to 
carry out section 2607A.''.
    (d) Technical Amendments.--Section 2602(e) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8621(e)) is amended--
        (1) by striking ``are authorized'' and inserting ``is 
    authorized''; and
        (2) by striking ``subsection (g)'' and inserting ``subsection 
    (e) of such section''.

SEC. 303. DEFINITIONS.

    Section 2603(4) of the Low-Income Home Energy Assistance Act of 
1981 (42 U.S.C. 8622(4)) is amended--
        (1) by striking ``the term'' and inserting ``The term''; and
        (2) by striking the semicolon and inserting a period.

SEC. 304. NATURAL DISASTERS AND OTHER EMERGENCIES.

    (a) Definitions.--Section 2603 of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8622) is amended--
        (1) by redesignating paragraphs (6) through (9) as paragraphs 
    (8) through (11), respectively;
        (2) by inserting before paragraph (8) (as redesignated in 
    paragraph (1)) the following:
        ``(7) The term `natural disaster' means a weather event 
    (relating to cold or hot weather), flood, earthquake, tornado, 
    hurricane, or ice storm, or an event meeting such other criteria as 
    the Secretary, in the discretion of the Secretary, may determine to 
    be appropriate.'';
        (3) by redesignating paragraphs (1) through (5) as paragraphs 
    (2) through (6), respectively; and
        (4) by inserting before paragraph (2) (as redesignated in 
    paragraph (3)) the following:
        ``(1) The term `emergency' means--
            ``(A) a natural disaster;
            ``(B) a significant home energy supply shortage or 
        disruption;
            ``(C) a significant increase in the cost of home energy, as 
        determined by the Secretary;
            ``(D) a significant increase in home energy disconnections 
        reported by a utility, a State regulatory agency, or another 
        agency with necessary data;
            ``(E) a significant increase in participation in a public 
        benefit program such as the food stamp program carried out 
        under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), the 
        national program to provide supplemental security income 
        carried out under title XVI of the Social Security Act (42 
        U.S.C. 1381 et seq.), or the State temporary assistance for 
        needy families program carried out under part A of title IV of 
        the Social Security Act (42 U.S.C. 601 et seq.), as determined 
        by the head of the appropriate Federal agency;
            ``(F) a significant increase in unemployment, layoffs, or 
        the number of households with an individual applying for 
        unemployment benefits, as determined by the Secretary of Labor; 
        or
            ``(G) an event meeting such criteria as the Secretary, in 
        the discretion of the Secretary, may determine to be 
        appropriate.''.
    (b) Considerations.--Section 2604(g) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8623(g)) is amended by striking the 
last two sentences and inserting the following: ``In determining 
whether to make such an allotment to a State, the Secretary shall take 
into account the extent to which the State was affected by the natural 
disaster or other emergency involved, the availability to the State of 
other resources under the program carried out under this title or any 
other program, and such other factors as the Secretary may find to be 
relevant. Not later than 30 days after making the determination, but 
prior to releasing an allotted amount to a State, the Secretary shall 
notify Congress of the allotments made pursuant to this subsection.''.

SEC. 305. STATE ALLOTMENTS.

    Section 2604 of the Low-Income Home Energy Assistance Act of 1981 
(42 U.S.C. 8623) is amended--
        (1) in subsection (b)(1), by striking ``the Northern Mariana 
    Islands, and the Trust Territory of the Pacific Islands.'' and 
    inserting ``and the Commonwealth of the Northern Mariana 
    Islands.'';
        (2) in subsection (c)(3)(B)(ii), by striking ``application'' 
    and inserting ``applications'';
        (3) by striking subsection (f);
        (4) in the first sentence of subsection (g), by striking ``(a) 
    through (f)'' and inserting ``(a) through (d)''; and
        (5) by redesignating subsection (g) as subsection (e).

SEC. 306. ADMINISTRATION.

    Section 2605 of the Low-Income Home Energy Assistance Act of 1981 
(42 U.S.C. 8624) is amended--
        (1) in subsection (b)--
            (A) in paragraph (9)(A), by striking ``and not transferred 
        pursuant to section 2604(f) for use under another block 
        grant'';
            (B) in paragraph (14), by striking ``; and'' and inserting 
        a semicolon;
            (C) in the matter following paragraph (14), by striking 
        ``The Secretary may not prescribe the manner in which the 
        States will comply with the provisions of this subsection.''; 
        and
            (D) in the matter following paragraph (16), by inserting 
        before ``The Secretary shall issue'' the following: ``The 
        Secretary may not prescribe the manner in which the States will 
        comply with the provisions of this subsection.'';
        (2) in subsection (c)(1)--
            (A) in subparagraph (B), by striking ``States'' and 
        inserting ``State''; and
            (B) in subparagraph (G)(i), by striking ``has'' and 
        inserting ``had''; and
        (3) in paragraphs (1) and (2)(A) of subsection (k) by inserting 
    ``, particularly those low-income households with the lowest 
    incomes that pay a high proportion of household income for home 
    energy'' before the period.

SEC. 307. PAYMENTS TO STATES.

    Section 2607(b)(2)(B) of the Low-Income Home Energy Assistance Act 
of 1981 (42 U.S.C. 8626(b)(2)(B)) is amended--
        (1) in the first sentence, by striking ``and not transferred 
    pursuant to section 2604(f)''; and
        (2) in the second sentence, by striking ``but not transferred 
    by the State''.

SEC. 308. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE OPTION.

    (a) Evaluation.--The Comptroller General of the United States shall 
conduct an evaluation of the Residential Energy Assistance Challenge 
program described in section 2607B of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8626b).
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General of the United States shall prepare 
and submit to Congress a report containing--
        (1) the findings resulting from the evaluation described in 
    subsection (a); and
        (2) the State evaluations described in paragraphs (1) and (2) 
    of subsection (b) of such section 2607B.
    (c) Incentive Grants.--Section 2607B(b)(1) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8626b(b)(1)) is amended by 
striking ``For each of the fiscal years 1996 through 1999'' and 
inserting ``For each fiscal year''.
    (d) Technical Amendments.--Section 2607B of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8626b) is amended--
        (1) in subsection (e)(2)--
            (A) by redesignating subparagraphs (F) through (N) as 
        subparagraphs (E) through (M), respectively; and
            (B) in clause (i) of subparagraph (I) (as redesignated in 
        subparagraph (A)), by striking ``on'' and inserting ``of''; and
        (2) by redesignating subsection (g) as subsection (f).
    SEC. 309. TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE REVIEWS.
    (a) In General.--Section 2609A(a) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8628a(a)) is amended--
        (1) in the matter preceding paragraph (1), by striking 
    ``$250,000'' and inserting ``$300,000'';
        (2) by striking ``Secretary--'' and all that follows through 
    ``(1) to make'' and inserting the following: ``Secretary--
        ``(1) to--
            ``(A) make'';
        (3) by striking ``organizations; or'' and all that follows 
    through ``(2) to enter'' and inserting the following: 
    ``organizations; or
            ``(B) enter'';
        (4) by striking the following:
``to provide'' and inserting the following:
    ``to provide'';
        (5) by striking ``title.'' and inserting the following: 
    ``title; or
        ``(2) to conduct onsite compliance reviews of programs 
    supported under this title.''; and
        (6) in paragraph (1)(B) (as redesignated in paragraphs (2) and 
    (3))--
            (A) by inserting ``or interagency agreements'' after 
        ``cooperative arrangements''; and
            (B) by inserting ``(including Federal agencies)'' after 
        ``public agencies''.
    (b) Conforming Amendment.--The section heading of section 2609A of 
the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8628a) is 
amended to read as follows:

       ``technical assistance, training, and compliance reviews''.

                   TITLE IV--ASSETS FOR INDEPENDENCE

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Assets for Independence Act''.

SEC. 402. FINDINGS.

    Congress makes the following findings:
        (1) Economic well-being does not come solely from income, 
    spending, and consumption, but also requires savings, investment, 
    and accumulation of assets because assets can improve economic 
    independence and stability, connect individuals with a viable and 
    hopeful future, stimulate development of human and other capital, 
    and enhance the welfare of offspring.
        (2) Fully \1/2\ of all Americans have either no, negligible, or 
    negative assets available for investment, just as the price of 
    entry to the economic mainstream, the cost of a house, an adequate 
    education, and starting a business, is increasing. Further, the 
    household savings rate of the United States lags far behind other 
    industrial nations, presenting a barrier to economic growth.
        (3) In the current tight fiscal environment, the United States 
    should invest existing resources in high-yield initiatives. There 
    is reason to believe that the financial returns, including 
    increased income, tax revenue, and decreased welfare cash 
    assistance, resulting from individual development accounts will far 
    exceed the cost of investment in those accounts.
        (4) Traditional public assistance programs concentrating on 
    income and consumption have rarely been successful in promoting and 
    supporting the transition to increased economic self-sufficiency. 
    Income-based domestic policy should be complemented with asset-
    based policy because, while income-based policies ensure that 
    consumption needs (including food, child care, rent, clothing, and 
    health care) are met, asset-based policies provide the means to 
    achieve greater independence and economic well-being.

SEC. 403. PURPOSES.

    The purposes of this title are to provide for the establishment of 
demonstration projects designed to determine--
        (1) the social, civic, psychological, and economic effects of 
    providing to individuals and families with limited means an 
    incentive to accumulate assets by saving a portion of their earned 
    income;
        (2) the extent to which an asset-based policy that promotes 
    saving for postsecondary education, homeownership, and 
    microenterprise development may be used to enable individuals and 
    families with limited means to increase their economic self-
    sufficiency; and
        (3) the extent to which an asset-based policy stabilizes and 
    improves families and the community in which the families live.

SEC. 404. DEFINITIONS.

    In this title:
        (1) Applicable period.--The term ``applicable period'' means, 
    with respect to amounts to be paid from a grant made for a project 
    year, the calendar year immediately preceding the calendar year in 
    which the grant is made.
        (2) Eligible individual.--The term ``eligible individual'' 
    means an individual who is selected to participate in a 
    demonstration project by a qualified entity under section 409.
        (3) Emergency withdrawal.--The term ``emergency withdrawal'' 
    means a withdrawal by an eligible individual that--
            (A) is a withdrawal of only those funds, or a portion of 
        those funds, deposited by the individual in the individual 
        development account of the individual;
            (B) is permitted by a qualified entity on a case-by-case 
        basis; and
            (C) is made for--
                (i) expenses for medical care or necessary to obtain 
            medical care, for the individual or a spouse or dependent 
            of the individual described in paragraph (8)(D);
                (ii) payments necessary to prevent the eviction of the 
            individual from the residence of the individual, or 
            foreclosure on the mortgage for the principal residence of 
            the individual, as defined in paragraph (8)(B); or
                (iii) payments necessary to enable the individual to 
            meet necessary living expenses following loss of 
            employment.
        (4) Household.--The term ``household'' means all individuals 
    who share use of a dwelling unit as primary quarters for living and 
    eating separate from other individuals.
        (5) Individual development account.--
            (A) In general.--The term ``individual development 
        account'' means a trust created or organized in the United 
        States exclusively for the purpose of paying the qualified 
        expenses of an eligible individual, or enabling the eligible 
        individual to make an emergency withdrawal, but only if the 
        written governing instrument creating the trust contains the 
        following requirements:
                (i) No contribution will be accepted unless the 
            contribution is in cash or by check.
                (ii) The trustee is a federally insured financial 
            institution, or a State insured financial institution if no 
            federally insured financial institution is available.
                (iii) The assets of the trust will be invested in 
            accordance with the direction of the eligible individual 
            after consultation with the qualified entity providing 
            deposits for the individual under section 410.
                (iv) The assets of the trust will not be commingled 
            with other property except in a common trust fund or common 
            investment fund.
                (v) Except as provided in clause (vi), any amount in 
            the trust that is attributable to a deposit provided under 
            section 410 may be paid or distributed out of the trust 
            only for the purpose of paying the qualified expenses of 
            the eligible individual, or enabling the eligible 
            individual to make an emergency withdrawal.
                (vi) Any balance in the trust on the day after the date 
            on which the individual for whose benefit the trust is 
            established dies shall be distributed within 30 days of 
            that date as directed by that individual to another 
            individual development account established for the benefit 
            of an eligible individual.
            (B) Custodial accounts.--For purposes of subparagraph (A), 
        a custodial account shall be treated as a trust if the assets 
        of the custodial account are held by a bank (as defined in 
        section 408(n) of the Internal Revenue Code of 1986) or another 
        person who demonstrates, to the satisfaction of the Secretary, 
        that the manner in which such person will administer the 
        custodial account will be consistent with the requirements of 
        this title, and if the custodial account would, except for the 
        fact that it is not a trust, constitute an individual 
        development account described in subparagraph (A). For purposes 
        of this title, in the case of a custodial account treated as a 
        trust by reason of the preceding sentence, the custodian of 
        that custodial account shall be treated as the trustee of the 
        account.
        (6) Project year.--The term ``project year'' means, with 
    respect to a demonstration project, any of the 5 consecutive 12-
    month periods beginning on the date the project is originally 
    authorized to be conducted.
        (7) Qualified entity.--
            (A) In general.--The term ``qualified entity'' means--
                (i) one or more not-for-profit organizations described 
            in section 501(c)(3) of the Internal Revenue Code of 1986 
            and exempt from taxation under section 501(a) of such Code; 
            or
                (ii) a State or local government agency, or a tribal 
            government, submitting an application under section 405 
            jointly with an organization described in clause (i).
            (B) Rule of construction.--Nothing in this paragraph shall 
        be construed as preventing an organization described in 
        subparagraph (A)(i) from collaborating with a financial 
        institution or for-profit community development corporation to 
        carry out the purposes of this title.
        (8) Qualified expenses.--The term ``qualified expenses'' means 
    one or more of the following, as provided by a qualified entity:
            (A) Postsecondary educational expenses.--Postsecondary 
        educational expenses paid from an individual development 
        account directly to an eligible educational institution. In 
        this subparagraph:
                (i) Postsecondary educational expenses.--The term 
            ``postsecondary educational expenses'' means the following:

                    (I) Tuition and fees.--Tuition and fees required 
                for the enrollment or attendance of a student at an 
                eligible educational institution.
                    (II) Fees, books, supplies, and equipment.--Fees, 
                books, supplies, and equipment required for courses of 
                instruction at an eligible educational institution.

                (ii) Eligible educational institution.--The term 
            ``eligible educational institution'' means the following:

                    (I) Institution of higher education.--An 
                institution described in section 101 or 102 of the 
                Higher Education Act of 1965.
                    (II) Postsecondary vocational education school.--An 
                area vocational education school (as defined in 
                subparagraph (C) or (D) of section 521(4) of the Carl 
                D. Perkins Vocational and Applied Technology Education 
                Act (20 U.S.C. 2471(4))) which is in any State (as 
                defined in section 521(33) of such Act), as such 
                sections are in effect on the date of enactment of this 
                title.

            (B) First-home purchase.--Qualified acquisition costs with 
        respect to a principal residence for a qualified first-time 
        homebuyer, if paid from an individual development account 
        directly to the persons to whom the amounts are due. In this 
        subparagraph:
                (i) Principal residence.--The term ``principal 
            residence'' means a main residence, the qualified 
            acquisition costs of which do not exceed 100 percent of the 
            average area purchase price applicable to such residence.
                (ii) Qualified acquisition costs.--The term ``qualified 
            acquisition costs'' means the costs of acquiring, 
            constructing, or reconstructing a residence. The term 
            includes any usual or reasonable settlement, financing, or 
            other closing costs.
                (iii) Qualified first-time homebuyer.--

                    (I) In general.--The term ``qualified first-time 
                homebuyer'' means an individual participating in the 
                project involved (and, if married, the individual's 
                spouse) who has no present ownership interest in a 
                principal residence during the 3-year period ending on 
                the date of acquisition of the principal residence to 
                which this subparagraph applies.
                    (II) Date of acquisition.--The term ``date of 
                acquisition'' means the date on which a binding 
                contract to acquire, construct, or reconstruct the 
                principal residence to which this subparagraph applies 
                is entered into.

            (C) Business capitalization.--Amounts paid from an 
        individual development account directly to a business 
        capitalization account that is established in a federally 
        insured financial institution (or in a State insured financial 
        institution if no federally insured financial institution is 
        available) and is restricted to use solely for qualified 
        business capitalization expenses. In this subparagraph:
                (i) Qualified business capitalization expenses.--The 
            term ``qualified business capitalization expenses'' means 
            qualified expenditures for the capitalization of a 
            qualified business pursuant to a qualified plan.
                (ii) Qualified expenditures.--The term ``qualified 
            expenditures'' means expenditures included in a qualified 
            plan, including capital, plant, equipment, working capital, 
            and inventory expenses.
                (iii) Qualified business.--The term ``qualified 
            business'' means any business that does not contravene any 
            law or public policy (as determined by the Secretary).
                (iv) Qualified plan.--The term ``qualified plan'' means 
            a business plan, or a plan to use a business asset 
            purchased, which--

                    (I) is approved by a financial institution, a 
                microenterprise development organization, or a 
                nonprofit loan fund having demonstrated fiduciary 
                integrity;
                    (II) includes a description of services or goods to 
                be sold, a marketing plan, and projected financial 
                statements; and
                    (III) may require the eligible individual to obtain 
                the assistance of an experienced entrepreneurial 
                adviser.

            (D) Transfers to idas of family members.--Amounts paid from 
        an individual development account directly into another such 
        account established for the benefit of an eligible individual 
        who is--
                (i) the individual's spouse; or
                (ii) any dependent of the individual with respect to 
            whom the individual is allowed a deduction under section 
            151 of the Internal Revenue Code of 1986.
        (9) Qualified savings of the individual for the period.--The 
    term ``qualified savings of the individual for the period'' means 
    the aggregate of the amounts contributed by an individual to the 
    individual development account of the individual during the period.
        (10) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services, acting through the Director of Community 
    Services.
        (11) Tribal government.--The term ``tribal government'' means a 
    tribal organization, as defined in section 4 of the Indian Self-
    Determination and Education Assistance Act (25 U.S.C. 450b) or a 
    Native Hawaiian organization, as defined in section 9212 of the 
    Native Hawaiian Education Act (20 U.S.C. 7912).

SEC. 405. APPLICATIONS.

    (a) Announcement of Demonstration Projects.--Not later than 3 
months after the date of enactment of this title, the Secretary shall 
publicly announce the availability of funding under this title for 
demonstration projects and shall ensure that applications to conduct 
the demonstration projects are widely available to qualified entities.
    (b) Submission.--Not later than 6 months after the date of 
enactment of this title, a qualified entity may submit to the Secretary 
an application to conduct a demonstration project under this title.
    (c) Criteria.--In considering whether to approve an application to 
conduct a demonstration project under this title, the Secretary shall 
assess the following:
        (1) Sufficiency of project.--The degree to which the project 
    described in the application appears likely to aid project 
    participants in achieving economic self-sufficiency through 
    activities requiring one or more qualified expenses.
        (2) Administrative ability.--The experience and ability of the 
    applicant to responsibly administer the project.
        (3) Ability to assist participants.--The experience and ability 
    of the applicant in recruiting, educating, and assisting project 
    participants to increase their economic independence and general 
    well-being through the development of assets.
        (4) Commitment of non-federal funds.--The aggregate amount of 
    direct funds from non-Federal public sector and from private 
    sources that are formally committed to the project as matching 
    contributions.
        (5) Adequacy of plan for providing information for 
    evaluation.--The adequacy of the plan for providing information 
    relevant to an evaluation of the project.
        (6) Other factors.--Such other factors relevant to the purposes 
    of this title as the Secretary may specify.
    (d) Preferences.--In considering an application to conduct a 
demonstration project under this title, the Secretary shall give 
preference to an application that--
        (1) demonstrates the willingness and ability to select 
    individuals described in section 408 who are predominantly from 
    households in which a child (or children) is living with the 
    child's biological or adoptive mother or father, or with the 
    child's legal guardian;
        (2) provides a commitment of non-Federal funds with a 
    proportionately greater amount of such funds committed from private 
    sector sources; and
        (3) targets such individuals residing within one or more 
    relatively well-defined neighborhoods or communities (including 
    rural communities) that experience high rates of poverty or 
    unemployment.
    (e) Approval.--Not later than 9 months after the date of enactment 
of this title, the Secretary shall, on a competitive basis, approve 
such applications to conduct demonstration projects under this title as 
the Secretary considers to be appropriate, taking into account the 
assessments required by subsections (c) and (d). The Secretary shall 
ensure, to the maximum extent practicable, that the applications that 
are approved involve a range of communities (both rural and urban) and 
diverse populations.
    (f) Contracts With Nonprofit Entities.--The Secretary may contract 
with an entity described in section 501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from taxation under section 501(a) of such Code 
to carry out any responsibility of the Secretary under this section or 
section 412 if--
        (1) such entity demonstrates the ability to carry out such 
    responsibility; and
        (2) the Secretary can demonstrate that such responsibility 
    would not be carried out by the Secretary at a lower cost.
    (g) Grandfathering of Existing Statewide Programs.--Any statewide 
individual asset-building program that is carried out in a manner 
consistent with the purposes of this title, that is established under 
State law as of the date of enactment of this Act, and that as of such 
date is operating with an annual State appropriation of not less than 
$1,000,000 in non-Federal funds, shall be deemed to meet the 
eligibility requirements of this subtitle, and the entity carrying out 
the program shall be deemed to be a qualified entity. The Secretary 
shall consider funding the statewide program as a demonstration project 
described in this subtitle. In considering the statewide program for 
funding, the Secretary shall review an application submitted by the 
entity carrying out such statewide program under this section, 
notwithstanding the preference requirements listed in subsection (d). 
Any program requirements under sections 407 through 411 that are 
inconsistent with State statutory requirements in effect on the date of 
enactment of this Act, governing such statewide program, shall not 
apply to the program.

SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

    (a) Demonstration Authority.--If the Secretary approves an 
application to conduct a demonstration project under this title, the 
Secretary shall, not later than 10 months after the date of enactment 
of this title, authorize the applicant to conduct the project for 5 
project years in accordance with the approved application and the 
requirements of this title.
    (b) Grant Authority.--For each project year of a demonstration 
project conducted under this title, the Secretary may make a grant to 
the qualified entity authorized to conduct the project. In making such 
a grant, the Secretary shall make the grant on the first day of the 
project year in an amount not to exceed the lesser of--
        (1) the aggregate amount of funds committed as matching 
    contributions from non-Federal public or private sector sources; or
        (2) $1,000,000.

SEC. 407. RESERVE FUND.

    (a) Establishment.--A qualified entity under this title, other than 
a State or local government agency or a tribal government, shall 
establish a Reserve Fund that shall be maintained in accordance with 
this section.
    (b) Amounts in Reserve Fund.--
        (1) In general.--As soon after receipt as is practicable, a 
    qualified entity shall deposit in the Reserve Fund established 
    under subsection (a)--
            (A) all funds provided to the qualified entity from any 
        public or private source in connection with the demonstration 
        project; and
            (B) the proceeds from any investment made under subsection 
        (c)(2).
        (2) Uniform accounting regulations.--The Secretary shall 
    prescribe regulations with respect to accounting for amounts in the 
    Reserve Fund established under subsection (a).
    (c) Use of Amounts in the Reserve Fund.--
        (1) In general.--A qualified entity shall use the amounts in 
    the Reserve Fund established under subsection (a) to--
            (A) assist participants in the demonstration project in 
        obtaining the skills (including economic literacy, budgeting, 
        credit, and counseling skills) and information necessary to 
        achieve economic self-sufficiency through activities requiring 
        qualified expenses;
            (B) provide deposits in accordance with section 410 for 
        individuals selected by the qualified entity to participate in 
        the demonstration project;
            (C) administer the demonstration project; and
            (D) provide the research organization evaluating the 
        demonstration project under section 414 with such information 
        with respect to the demonstration project as may be required 
        for the evaluation.
        (2) Authority to invest funds.--
            (A) Guidelines.--The Secretary shall establish guidelines 
        for investing amounts in the Reserve Fund established under 
        subsection (a) in a manner that provides an appropriate balance 
        between return, liquidity, and risk.
            (B) Investment.--A qualified entity shall invest the 
        amounts in its Reserve Fund that are not immediately needed to 
        carry out the provisions of paragraph (1), in accordance with 
        the guidelines established under subparagraph (A).
        (3) Limitation on uses.--Not more than 9.5 percent of the 
    amounts provided to a qualified entity under section 406(b) shall 
    be used by the qualified entity for the purposes described in 
    subparagraphs (A), (C), and (D) of paragraph (1), of which not less 
    than 2 percent of the amounts shall be used by the qualified entity 
    for the purposes described in paragraph (1)(D). If two or more 
    qualified entities are jointly administering a project, no 
    qualified entity shall use more than its proportional share for the 
    purposes described in subparagraphs (A), (C), and (D) of paragraph 
    (1).
    (d) Unused Federal Grant Funds Transferred to the Secretary When 
Project Terminates.--Notwithstanding subsection (c), upon the 
termination of any demonstration project authorized under this section, 
the qualified entity conducting the project shall transfer to the 
Secretary an amount equal to--
        (1) the amounts in its Reserve Fund at the time of the 
    termination; multiplied by
        (2) a percentage equal to--
            (A) the aggregate amount of grants made to the qualified 
        entity under section 406(b); divided by
            (B) the aggregate amount of all funds provided to the 
        qualified entity from all sources to conduct the project.

SEC. 408. ELIGIBILITY FOR PARTICIPATION.

    (a) In General.--Any individual who is a member of a household that 
is eligible for assistance under the State temporary assistance for 
needy families program established under part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.), or that meets each of the 
following requirements shall be eligible to participate in a 
demonstration project conducted under this title:
        (1) Income test.--The adjusted gross income of the household 
    does not exceed the earned income amount described in section 32 of 
    the Internal Revenue Code of 1986 (taking into account the size of 
    the household).
        (2) Net worth test.--
            (A) In general.--The net worth of the household, as of the 
        end of the calendar year preceding the determination of 
        eligibility, does not exceed $10,000.
            (B) Determination of net worth.--For purposes of 
        subparagraph (A), the net worth of a household is the amount 
        equal to--
                (i) the aggregate market value of all assets that are 
            owned in whole or in part by any member of the household; 
            minus
                (ii) the obligations or debts of any member of the 
            household.
            (C) Exclusions.--For purposes of determining the net worth 
        of a household, a household's assets shall not be considered to 
        include the primary dwelling unit and one motor vehicle owned 
        by a member of the household.
    (b) Individuals Unable To Complete the Project.--The Secretary 
shall establish such regulations as are necessary to ensure compliance 
with this title if an individual participating in the demonstration 
project moves from the community in which the project is conducted or 
is otherwise unable to continue participating in that project, 
including regulations prohibiting future eligibility to participate in 
any other demonstration project conducted under this title.

SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.

    From among the individuals eligible to participate in a 
demonstration project conducted under this title, each qualified entity 
shall select the individuals--
        (1) that the qualified entity determines to be best suited to 
    participate; and
        (2) to whom the qualified entity will provide deposits in 
    accordance with section 410.

SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.

    (a) In General.--Not less than once every 3 months during each 
project year, each qualified entity under this title shall deposit in 
the individual development account of each individual participating in 
the project, or into a parallel account maintained by the qualified 
entity--
        (1) from the non-Federal funds described in section 405(c)(4), 
    a matching contribution of not less than $0.50 and not more than $4 
    for every $1 of earned income (as defined in section 911(d)(2) of 
    the Internal Revenue Code of 1986) deposited in the account by a 
    project participant during that period;
        (2) from the grant made under section 406(b), an amount equal 
    to the matching contribution made under paragraph (1); and
        (3) any interest that has accrued on amounts deposited under 
    paragraph (1) or (2) on behalf of that individual into the 
    individual development account of the individual or into a parallel 
    account maintained by the qualified entity.
    (b) Limitation on Deposits for an Individual.--Not more than $2,000 
from a grant made under section 406(b) shall be provided to any one 
individual over the course of the demonstration project.
    (c) Limitation on Deposits for a Household.--Not more than $4,000 
from a grant made under section 406(b) shall be provided to any one 
household over the course of the demonstration project.
    (d) Withdrawal of Funds.--The Secretary shall establish such 
guidelines as may be necessary to ensure that funds held in an 
individual development account are not withdrawn, except for one or 
more qualified expenses, or for an emergency withdrawal. Such 
guidelines shall include a requirement that a responsible official of 
the qualified entity conducting a project approve a withdrawal from 
such an account in writing. The guidelines shall provide that no 
individual may withdraw funds from an individual development account 
earlier than 6 months after the date on which the individual first 
deposits funds in the account.
    (e) Reimbursement.--An individual shall reimburse an individual 
development account for any funds withdrawn from the account for an 
emergency withdrawal, not later than 12 months after the date of the 
withdrawal. If the individual fails to make the reimbursement, the 
qualified entity administering the account shall transfer the funds 
deposited into the account or a parallel account under this section to 
the Reserve Fund of the qualified entity, and use the funds to benefit 
other individuals participating in the demonstration project involved.

SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.

    A qualified entity under this title, other than a State or local 
government agency or a tribal government, shall, subject to the 
provisions of section 413, have sole authority over the administration 
of the project. The Secretary may prescribe only such regulations or 
guidelines with respect to demonstration projects conducted under this 
title as are necessary to ensure compliance with the approved 
applications and the requirements of this title.

SEC. 412. ANNUAL PROGRESS REPORTS.

    (a) In General.--Each qualified entity under this title shall 
prepare an annual report on the progress of the demonstration project. 
Each report shall include both program and participant information and 
shall specify for the period covered by the report the following 
information:
        (1) The number and characteristics of individuals making a 
    deposit into an individual development account.
        (2) The amounts in the Reserve Fund established with respect to 
    the project.
        (3) The amounts deposited in the individual development 
    accounts.
        (4) The amounts withdrawn from the individual development 
    accounts and the purposes for which such amounts were withdrawn.
        (5) The balances remaining in the individual development 
    accounts.
        (6) The savings account characteristics (such as threshold 
    amounts and match rates) required to stimulate participation in the 
    demonstration project, and how such characteristics vary among 
    different populations or communities.
        (7) What service configurations of the qualified entity (such 
    as configurations relating to peer support, structured planning 
    exercises, mentoring, and case management) increased the rate and 
    consistency of participation in the demonstration project and how 
    such configurations varied among different populations or 
    communities.
        (8) Such other information as the Secretary may require to 
    evaluate the demonstration project.
    (b) Submission of Reports.--The qualified entity shall submit each 
report required to be prepared under subsection (a) to--
        (1) the Secretary; and
        (2) the Treasurer (or equivalent official) of the State in 
    which the project is conducted, if the State or a local government 
    or a tribal government committed funds to the demonstration 
    project.
    (c) Timing.--The first report required by subsection (a) shall be 
submitted not later than 60 days after the end of the calendar year in 
which the Secretary authorized the qualified entity to conduct the 
demonstration project, and subsequent reports shall be submitted every 
12 months thereafter, until the conclusion of the project.

SEC. 413. SANCTIONS.

    (a) Authority To Terminate Demonstration Project.--If the Secretary 
determines that a qualified entity under this title is not operating a 
demonstration project in accordance with the entity's approved 
application under section 405 or the requirements of this title (and 
has not implemented any corrective recommendations directed by the 
Secretary), the Secretary shall terminate such entity's authority to 
conduct the demonstration project.
    (b) Actions Required Upon Termination.--If the Secretary terminates 
the authority to conduct a demonstration project, the Secretary--
        (1) shall suspend the demonstration project;
        (2) shall take control of the Reserve Fund established pursuant 
    to section 407;
        (3) shall make every effort to identify another qualified 
    entity (or entities) willing and able to conduct the project in 
    accordance with the approved application (or, if modification is 
    necessary to incorporate the recommendations, the application as 
    modified) and the requirements of this title;
        (4) shall, if the Secretary identifies an entity (or entities) 
    described in paragraph (3)--
            (A) authorize the entity (or entities) to conduct the 
        project in accordance with the approved application (or, if 
        modification is necessary to incorporate the recommendations, 
        the application as modified) and the requirements of this 
        title;
            (B) transfer to the entity (or entities) control over the 
        Reserve Fund established pursuant to section 407; and
            (C) consider, for purposes of this title--
                (i) such other entity (or entities) to be the qualified 
            entity (or entities) originally authorized to conduct the 
            demonstration project; and
                (ii) the date of such authorization to be the date of 
            the original authorization; and
        (5) if, by the end of the 1-year period beginning on the date 
    of the termination, the Secretary has not found a qualified entity 
    (or entities) described in paragraph (3), shall--
            (A) terminate the project; and
            (B) from the amount remaining in the Reserve Fund 
        established as part of the project, remit to each source that 
        provided funds under section 405(c)(4) to the entity originally 
        authorized to conduct the project, an amount that bears the 
        same ratio to the amount so remaining as the amount provided 
        from the source under section 405(c)(4) bears to the amount 
        provided from all such sources under that section.

SEC. 414. EVALUATIONS.

    (a) In General.--Not later than 10 months after the date of 
enactment of this title, the Secretary shall enter into a contract with 
an independent research organization to evaluate the demonstration 
projects conducted under this title, individually and as a group, 
including evaluating all qualified entities participating in and 
sources providing funds for the demonstration projects conducted under 
this title.
    (b) Factors To Evaluate.--In evaluating any demonstration project 
conducted under this title, the research organization shall address the 
following factors:
        (1) The effects of incentives and organizational or 
    institutional support on savings behavior in the demonstration 
    project.
        (2) The savings rates of individuals in the demonstration 
    project based on demographic characteristics including gender, age, 
    family size, race or ethnic background, and income.
        (3) The economic, civic, psychological, and social effects of 
    asset accumulation, and how such effects vary among different 
    populations or communities.
        (4) The effects of individual development accounts on savings 
    rates, homeownership, level of postsecondary education attained, 
    and self-employment, and how such effects vary among different 
    populations or communities.
        (5) The potential financial returns to the Federal Government 
    and to other public sector and private sector investors in 
    individual development accounts over a 5-year and 10-year period of 
    time.
        (6) The lessons to be learned from the demonstration projects 
    conducted under this title and if a permanent program of individual 
    development accounts should be established.
        (7) Such other factors as may be prescribed by the Secretary.
    (c) Methodological Requirements.--In evaluating any demonstration 
project conducted under this title, the research organization shall--
        (1) for at least one site, use control groups to compare 
    participants with nonparticipants;
        (2) before, during, and after the project, obtain such 
    quantitative data as are necessary to evaluate the project 
    thoroughly; and
        (3) develop a qualitative assessment, derived from sources such 
    as in-depth interviews, of how asset accumulation affects 
    individuals and families.
    (d) Reports by the Secretary.--
        (1) Interim reports.--Not later than 90 days after the end of 
    the calendar year in which the Secretary first authorizes a 
    qualified entity to conduct a demonstration project under this 
    title, and every 12 months thereafter until all demonstration 
    projects conducted under this title are completed, the Secretary 
    shall submit to Congress an interim report setting forth the 
    results of the reports submitted pursuant to section 412(b).
        (2) Final reports.--Not later than 12 months after the 
    conclusion of all demonstration projects conducted under this 
    title, the Secretary shall submit to Congress a final report 
    setting forth the results and findings of all reports and 
    evaluations conducted pursuant to this title.
    (e) Evaluation Expenses.--The Secretary shall expend 2 percent of 
the amount appropriated under section 416 for a fiscal year, to carry 
out the objectives of this section.

SEC. 415. TREATMENT OF FUNDS.

    Of the funds deposited in individual development accounts for 
eligible individuals, only the funds deposited by the individuals 
(including interest accruing on those funds) may be considered to be 
the income, assets, or resources of the individuals, for purposes of 
determining eligibility for, or the amount of assistance furnished 
under, any Federal or federally assisted program based on need.

SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this title, 
$25,000,000 for each of fiscal years 1999, 2000, 2001, 2002, and 2003, 
to remain available until expended.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
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