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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2206 Reported in Senate (RS)]

                                                       Calendar No. 483

105th CONGRESS

  2d Session

                                S. 2206

                          [Report No. 105-256]

_______________________________________________________________________

                                 A BILL

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.

_______________________________________________________________________

                             July 21, 1998

                       Reported with an amendment

                                                       Calendar No. 483
105th CONGRESS
  2d Session
                                S. 2206

                          [Report No. 105-256]

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.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 23, 1998

   Mr. Coats (for himself, Mr. Dodd, Mr. Jeffords, and Mr. Kennedy) 
introduced the following bill; which was read twice and referred to the 
                 Committee on Labor and Human Resources

                             July 21, 1998

              Reported by Mr. Jeffords, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL

 
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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Human Services 
Reauthorization Act of 1998''.</DELETED>

<DELETED>SEC. 2. TABLE OF CONTENTS.</DELETED>

<DELETED>    The table of contents for this Act is as 
follows:</DELETED>

<DELETED>Sec. 1. Short title.
<DELETED>Sec. 2. Table of contents.
                 <DELETED>TITLE I--HEAD START PROGRAMS

<DELETED>Sec. 101. Short title.
<DELETED>Sec. 102. References.
<DELETED>Sec. 103. Statement of purpose.
<DELETED>Sec. 104. Definitions.
<DELETED>Sec. 105. Financial assistance for Head Start programs.
<DELETED>Sec. 106. Authorization of appropriations.
<DELETED>Sec. 107. Allotment of funds.
<DELETED>Sec. 108. Designation of Head Start agencies.
<DELETED>Sec. 109. Quality standards.
<DELETED>Sec. 110. Powers and functions of Head Start agencies.
<DELETED>Sec. 111. Head Start transition.
<DELETED>Sec. 112. Submission of plans to Governors.
<DELETED>Sec. 113. Participation in Head Start programs.
<DELETED>Sec. 114. Early Head Start programs for families with infants 
                            and toddlers.
<DELETED>Sec. 115. Technical assistance and training.
<DELETED>Sec. 116. Staff qualifications and development.
<DELETED>Sec. 117. Research, demonstration, and evaluation.
       <DELETED>TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

<DELETED>Sec. 201. Reauthorization.
<DELETED>Sec. 202. Conforming amendments.
<DELETED>Sec. 203. Repealers.
         <DELETED>TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

<DELETED>Sec. 301. Authorization.
<DELETED>Sec. 302. Definitions.
<DELETED>Sec. 303. Natural disasters and other emergencies.
<DELETED>Sec. 304. State allotments.
<DELETED>Sec. 305. Administration.
<DELETED>Sec. 306. Payments to States.
<DELETED>Sec. 307. Residential Energy Assistance Challenge option.
<DELETED>Sec. 308. Technical assistance, training, and compliance 
                            reviews.
               <DELETED>TITLE IV--ASSETS FOR INDEPENDENCE

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

            <DELETED>TITLE I--HEAD START PROGRAMS</DELETED>

<DELETED>SEC. 101. SHORT TITLE.</DELETED>

<DELETED>    This title may be cited as the ``Head Start Amendments of 
1998''.</DELETED>

<DELETED>SEC. 102. REFERENCES.</DELETED>

<DELETED>    Except as otherwise expressly provided, wherever in this 
title an amendment or repeal is expressed in terms of an amendment to, 
or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Head Start 
Act (42 U.S.C. 9831 et seq.).</DELETED>

<DELETED>SEC. 103. STATEMENT OF PURPOSE.</DELETED>

<DELETED>    The Head Start Act is amended by striking section 636 (42 
U.S.C. 9831) and inserting the following:</DELETED>

<DELETED>``SEC. 636. STATEMENT OF PURPOSE.</DELETED>

<DELETED>    ``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 to be necessary, based on family needs 
assessments.''.</DELETED>

<DELETED>SEC. 104. DEFINITIONS.</DELETED>

<DELETED>    Section 637 (42 U.S.C. 9832) is amended--</DELETED>
        <DELETED>    (1) by redesignating paragraphs (3) through (14) 
        as paragraphs (4) through (15), respectively;</DELETED>
        <DELETED>    (2) by inserting after paragraph (2) the 
        following:</DELETED>
        <DELETED>    ``(3) The term `child with a disability' means--
        </DELETED>
                <DELETED>    ``(A) a child with a disability, as 
                defined in section 602(3) of the Individuals with 
                Disabilities Education Act; and</DELETED>
                <DELETED>    ``(B) an infant or toddler with a 
                disability, as defined in section 632(5) of such 
                Act.'';</DELETED>
        <DELETED>    (3) by striking paragraph (5) (as redesignated in 
        paragraph (1)) and inserting the following:</DELETED>
        <DELETED>    ``(5) The term `family literacy services' means 
        services that--</DELETED>
                <DELETED>    ``(A) are provided to participants who 
                receive the services on a voluntary basis;</DELETED>
                <DELETED>    ``(B) are of sufficient intensity, and of 
                sufficient duration, to make sustainable changes in a 
                family (such as eliminating or reducing dependence on 
                income-based public assistance); and</DELETED>
                <DELETED>    ``(C) integrate each of--</DELETED>
                        <DELETED>    ``(i) interactive literacy 
                        activities between parents and their 
                        children;</DELETED>
                        <DELETED>    ``(ii) training for parents on 
                        being partners with their children in 
                        learning;</DELETED>
                        <DELETED>    ``(iii) parent literacy training, 
                        including training that contributes to economic 
                        self-sufficiency; and</DELETED>
                        <DELETED>    ``(iv) appropriate instruction for 
                        children of parents receiving the parent 
                        literacy training.'';</DELETED>
        <DELETED>    (4) in paragraph (7) (as redesignated in paragraph 
        (1)), 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.'';</DELETED>
        <DELETED>    (5) by striking paragraph (13) (as redesignated in 
        paragraph (1)) and inserting the following:</DELETED>
        <DELETED>    ``(13) The term ``migrant or seasonal Head Start 
        program'' means--</DELETED>
                <DELETED>    ``(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 1 geographic location to 
                another in the preceding 2-year period; and</DELETED>
                <DELETED>    ``(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.''; and</DELETED>
        <DELETED>    (6) by adding at the end the following:</DELETED>
        <DELETED>    ``(16) The term `reliable and replicable', used 
        with respect to research, means an objective, valid, scientific 
        study that--</DELETED>
                <DELETED>    ``(A) includes a rigorously defined sample 
                of subjects, that is sufficiently large and 
                representative to support the general conclusions of 
                the study;</DELETED>
                <DELETED>    ``(B) relies on measurements that meet 
                established standards of reliability and 
                validity;</DELETED>
                <DELETED>    ``(C) is subjected to peer review before 
                the results of the study are published; and</DELETED>
                <DELETED>    ``(D) discovers effective strategies for 
                enhancing the development and skills of 
                children.''.</DELETED>

<DELETED>SEC. 105. FINANCIAL ASSISTANCE FOR HEAD START 
              PROGRAMS.</DELETED>

<DELETED>    Section 638(1) (42 U.S.C. 9833(1)) is amended--</DELETED>
        <DELETED>    (1) by striking ``aid the'' and inserting ``enable 
        the''; and</DELETED>
        <DELETED>    (2) by striking the semicolon and inserting ``and 
        attain school readiness;''.</DELETED>

<DELETED>SEC. 106. AUTHORIZATION OF APPROPRIATIONS.</DELETED>

<DELETED>    Section 639 (42 U.S.C. 9834) is amended--</DELETED>
        <DELETED>    (1) in subsection (a), by striking ``1995 through 
        1998'' and inserting ``1999 through 2003''; and</DELETED>
        <DELETED>    (2) in subsection (b), by striking all that 
        follows ``shall make available--'' and inserting the 
        following:</DELETED>
        <DELETED>    ``(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 was made available for such 
        activities for fiscal year 1998;</DELETED>
        <DELETED>    ``(2) not more than $5,000,000 for each of fiscal 
        years 1999 through 2003 to carry out impact studies under 
        section 649(f); and</DELETED>
        <DELETED>    ``(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.''.</DELETED>

<DELETED>SEC. 107. ALLOTMENT OF FUNDS.</DELETED>

<DELETED>    (a) Allotments.--Section 640(a) (42 U.S.C. 9835(a)) is 
amended--</DELETED>
        <DELETED>    (1) in paragraph (2)--</DELETED>
                <DELETED>    (A) in subparagraph (A)--</DELETED>
                        <DELETED>    (i) by striking ``handicapped 
                        children'' and inserting ``children with 
                        disabilities'';</DELETED>
                        <DELETED>    (ii) by striking ``migrant Head 
                        Start programs'' each place it appears and 
                        inserting ``migrant or seasonal Head Start 
                        programs'';</DELETED>
                        <DELETED>    (iii) by striking ``1994'' and 
                        inserting ``1998''; and</DELETED>
                        <DELETED>    (iv) by adding at the end the 
                        following: ``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 
                        seasonal and migrant 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 
the children of eligible migrant farmworkers before approving an 
increase in the allocation provided for children of eligible seasonal 
farmworkers.'';</DELETED>
                <DELETED>    (B) in subparagraph (C), by striking 
                ``and'' at the end;</DELETED>
                <DELETED>    (C) 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'';</DELETED>
                <DELETED>    (D) by inserting after subparagraph (D) 
                the following:</DELETED>
        <DELETED>    ``(E) payments for research, demonstration, and 
        evaluation activities under section 649.''; and</DELETED>
                <DELETED>    (E) by adding at the end the following: 
                ``In carrying out this subchapter, the Secretary shall 
                continue the administrative arrangement responsible for 
                meeting the needs of migrant or seasonal farmworker and 
                Indian children and shall assure that appropriate 
                funding is provided to meet such needs.'';</DELETED>
        <DELETED>    (2) in paragraph (3)--</DELETED>
                <DELETED>    (A) in subparagraph (B)--</DELETED>
                        <DELETED>    (i) in clause (ii)--</DELETED>
                                <DELETED>    (I) by striking ``adequate 
                                qualified staff'' and inserting 
                                ``adequate numbers of qualified 
                                staff''; and</DELETED>
                                <DELETED>    (II) by inserting ``and 
                                children with disabilities'' before ``, 
                                when'';</DELETED>
                        <DELETED>    (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 State and Federal 
                        incentive and loan forgiveness programs for 
                        professional development and by providing for 
                        preferences in the awarding of salary 
                        increases, in excess of cost of living 
                        allowances, to staff who obtain additional 
                        training or education related to their 
                        responsibilities as employees of a Head Start 
                        program or to advance their careers within the 
                        Head Start program'';</DELETED>
                        <DELETED>    (iii) in clause (vi), by striking 
                        the period and inserting ``, and are physically 
                        accessible to children with disabilities and 
                        their parents.'';</DELETED>
                        <DELETED>    (iv) by redesignating clause (vii) 
                        as clause (viii); and</DELETED>
                        <DELETED>    (v) by inserting after clause (vi) 
                        the following:</DELETED>
        <DELETED>    ``(vii) Ensuring that such programs have qualified 
        staff that can promote language skills and literacy growth of 
        children and that provide children with a variety of skills 
        that have been identified, through research that is reliable 
        and replicable, as predictive of later reading 
        achievement.'';</DELETED>
                <DELETED>    (B) in subparagraph (C)--</DELETED>
                        <DELETED>    (i) in clause (i)(I)--</DELETED>
                                <DELETED>    (I) by striking ``of 
                                staff'' and inserting ``of classroom 
                                teachers and other staff''; 
                                and</DELETED>
                                <DELETED>    (II) by striking ``such 
                                staff'' and inserting ``qualified 
                                staff, including recruitment and 
                                retention pursuant to section 
                                648A(a)'';</DELETED>
                        <DELETED>    (ii) by striking clause (ii) and 
                        inserting the following:</DELETED>
        <DELETED>    ``(ii) To supplement amounts provided under 
        paragraph (2)(C) to provide training to classroom teachers and 
        other staff on proven techniques that promote--</DELETED>
                <DELETED>    ``(I) language and literacy growth; 
                and</DELETED>
                <DELETED>    ``(II) the acquisition of the English 
                language for non-English background children and 
                families.'';</DELETED>
                        <DELETED>    (iii) in clause (v), by inserting 
                        ``accessibility or'' before 
                        ``availability'';</DELETED>
                        <DELETED>    (iv) to redesignate clauses (iii), 
                        (iv), (v), and (vi) as clauses (iv), (v), (vi), 
                        and (iii), respectively; and</DELETED>
                        <DELETED>    (v) by inserting clause (iii) (as 
                        redesignated in clause (iv) of this 
                        subparagraph) after clause (ii); and</DELETED>
                <DELETED>    (C) in subparagraph (D)(i)(II), by 
                striking ``migrant Head Start programs'' and inserting 
                ``migrant or seasonal Head Start programs'';</DELETED>
        <DELETED>    (3) in paragraph (4)(A), by striking ``1981'' and 
        inserting ``1998'';</DELETED>
        <DELETED>    (4) in paragraph (5)--</DELETED>
                <DELETED>    (A) in subparagraph (A), by striking 
                ``subparagraph (B)'' and inserting ``subparagraphs (B) 
                and (D)'';</DELETED>
                <DELETED>    (B) in subparagraph (B), by inserting 
                before the period the following ``and 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'';</DELETED>
                <DELETED>    (C) in subparagraph (C)--</DELETED>
                        <DELETED>    (i) in clause (i)(I), by inserting 
                        ``the appropriate regional office of the 
                        Administration for Children and Families and'' 
                        before ``agencies'';</DELETED>
                        <DELETED>    (ii) in clause (iii), by striking 
                        ``and'' at the end;</DELETED>
                        <DELETED>    (iii) in clause (iv)--</DELETED>
                                <DELETED>    (I) by striking 
                                ``education, and national service 
                                activities,'' and inserting 
                                ``education, and community service 
                                activities,'';</DELETED>
                                <DELETED>    (II) by striking ``and 
                                activities'' and inserting 
                                ``activities''; and</DELETED>
                                <DELETED>    (III) by striking the 
                                period and inserting ``, and services 
                                for homeless children; and''; 
                                and</DELETED>
                        <DELETED>    (iv) by adding at the end the 
                        following:</DELETED>
        <DELETED>    ``(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.'';</DELETED>
                <DELETED>    (D) by redesignating subparagraph (D) as 
                subparagraph (F); and</DELETED>
                <DELETED>    (E) by inserting after subparagraph (C) 
                the following:</DELETED>
<DELETED>    ``(D) Following the award of collaboration grants 
described in subparagraph (B), the Secretary shall provide, from the 
reserved sums, supplemental funding for collaboration grants--
</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(ii) to States that engage in other innovative 
        collaborative initiatives, including plans for collaborative 
        training and career development initiatives for child care, 
        early childhood education, and Head Start service managers, 
        providers, and staff.</DELETED>
<DELETED>    ``(E)(i) The Secretary shall--</DELETED>
        <DELETED>    ``(I) review on an ongoing basis evidence of 
        barriers to effective collaboration between Head Start programs 
        and other Federal child care and early childhood education 
        programs and resources;</DELETED>
        <DELETED>    ``(II) develop initiatives, including providing 
        additional training and technical assistance and making 
        regulatory changes, in necessary cases, to eliminate barriers 
        to the collaboration; and</DELETED>
        <DELETED>    ``(III) develop a mechanism to resolve 
        administrative and programmatic conflicts between such programs 
        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.</DELETED>
<DELETED>    ``(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</DELETED>
        <DELETED>    (5) in paragraph (6)--</DELETED>
                <DELETED>    (A) by inserting ``(A)'' before ``From''; 
                and</DELETED>
                <DELETED>    (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).</DELETED>
<DELETED>    ``(B)(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 negatively impacting 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.</DELETED>
<DELETED>    ``(ii) For any fiscal year for which the amount 
appropriated under section 639(a) is lowered to a level that requires a 
reduction in the amount 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--</DELETED>
        <DELETED>    ``(I) the amounts made available to the entities 
        for programs carried out under section 645A; and</DELETED>
        <DELETED>    ``(II) the amounts made available to Head Start 
        agencies for Head Start programs.''.</DELETED>
<DELETED>    (b) Children With Disabilities.--Section 640(d) (42 U.S.C. 
9835(d)) is amended--</DELETED>
        <DELETED>    (1) by striking ``1982'' and inserting ``1999''; 
        and</DELETED>
        <DELETED>    (2) by striking ``(as defined in section 602(a) of 
        the Individuals with Disabilities Education Act)''.</DELETED>
<DELETED>    (c) Increased Appropriations.--Section 640(g) (42 U.S.C. 
9835(g)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (2)--</DELETED>
                <DELETED>    (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);'';</DELETED>
                <DELETED>    (B) in subparagraph (C), by striking the 
                semicolon and inserting ``, and organizations serving 
                children with disabilities;'';</DELETED>
                <DELETED>    (C) in subparagraph (D), by inserting 
                before the semicolon the following: ``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'';</DELETED>
                <DELETED>    (D) in subparagraph (E), by striking 
                ``program; and'' and inserting ``or any other early 
                childhood program;'';</DELETED>
                <DELETED>    (E) in subparagraph (F), by striking the 
                period and inserting ``; and''; and</DELETED>
                <DELETED>    (F) by adding at the end the 
                following:</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(4) Notwithstanding subsection (a)(2), after taking into 
account the provisions of 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 the activities 
described in such subsection.''.</DELETED>
<DELETED>    (d) Migrant or Seasonal Head Start Programs.--Section 
640(l) (42 U.S.C. 9835(l)) is amended--</DELETED>
        <DELETED>    (1) by striking ``migrant Head Start programs'' 
        each place it appears and inserting ``migrant or seasonal Head 
        Start programs''; and</DELETED>
        <DELETED>    (2) by striking ``migrant families'' and inserting 
        ``migrant or seasonal farmworker families''.</DELETED>
<DELETED>    (e) Conforming Amendment.--Section 644(f)(2) (42 U.S.C. 
9839(f)(2)) is amended by striking ``640(a)(3)(C)(v)'' and inserting 
``640(a)(3)(C)(vi).''</DELETED>

<DELETED>SEC. 108. DESIGNATION OF HEAD START AGENCIES.</DELETED>

<DELETED>    Section 641 (42 U.S.C. 9836) is amended--</DELETED>
        <DELETED>    (1) in subsection (a)--</DELETED>
                <DELETED>    (A) in the matter preceding paragraph (1), 
                by inserting ``or for-profit'' after ``nonprofit''; 
                and</DELETED>
                <DELETED>    (B) in paragraph (2), by inserting ``(in 
                consultation with the chief executive officer of the 
                State in which the community is located)'' after ``the 
                Secretary'';</DELETED>
        <DELETED>    (2) in subsection (c)--</DELETED>
                <DELETED>    (A) in paragraph (1)--</DELETED>
                        <DELETED>    (i) by striking ``shall give 
                        priority'' and inserting ``shall, in 
                        consultation with the chief executive officer 
                        of the State, give priority'';</DELETED>
                        <DELETED>    (ii) by inserting ``or for-
                        profit'' after ``nonprofit''; and</DELETED>
                        <DELETED>    (iii) by striking ``unless the 
                        Secretary makes a finding'' and all that 
                        follows and inserting the following: ``unless 
                        the Secretary determines that the agency 
                        involved fails to meet program and financial 
                        management requirements, performance standards 
                        described in section 641A(a)(1), and other 
                        requirements established by the 
                        Secretary.'';</DELETED>
                <DELETED>    (B) in paragraph (2), by striking ``shall 
                give priority'' and inserting ``shall, in consultation 
                with the chief executive officer of the State, give 
                priority''; and</DELETED>
                <DELETED>    (C) by aligning the margins of paragraphs 
                (2) and (3) with the margins of paragraph 
                (1);</DELETED>
        <DELETED>    (3) in subsection (d)--</DELETED>
                <DELETED>    (A) in the matter preceding paragraph (1), 
                by inserting after the first sentence the following new 
                sentence: ``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 has met or exceeded the 
                performance standards and outcome-based performance 
                measures described in section 641A.'';</DELETED>
                <DELETED>    (B) in paragraph (4)(A), by inserting 
                ``(at home and in the center involved where 
                practicable)'' after ``activities'';</DELETED>
                <DELETED>    (C) by redesignating paragraphs (7) and 
                (8) as paragraphs (9) and (10); and</DELETED>
                <DELETED>    (D) by inserting after paragraph (6) the 
                following:</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(8) the plan of such applicant to meet the needs 
        of children with disabilities;''; and</DELETED>
        <DELETED>    (4) by striking subsection (e) and inserting the 
        following:</DELETED>
<DELETED>    ``(e) If no agency in the community receives priority 
designation, and there is no qualified applicant in the community, the 
Secretary shall designate an 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.''.</DELETED>

<DELETED>SEC. 109. QUALITY STANDARDS.</DELETED>

<DELETED>    (a) Quality Standards.--Section 641A(a) (42 U.S.C. 
9836a(a)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (1)--</DELETED>
                <DELETED>    (A) in the matter preceding subparagraph 
                (A), by inserting ``, including minimum levels of 
                overall accomplishment,'' after ``regulation 
                standards'';</DELETED>
                <DELETED>    (B) in subparagraph (A), by striking 
                ``education,'';</DELETED>
                <DELETED>    (C) by redesignating subparagraphs (B) 
                through (D) as subparagraphs (C) through (E); 
                and</DELETED>
                <DELETED>    (D) by inserting after subparagraph (A) 
                the following:</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(ii) additional education performance 
                standards to ensure that the children participating in 
                the program, at a minimum--</DELETED>
                        <DELETED>    ``(I) develop phonemic, print, and 
                        numeracy awareness;</DELETED>
                        <DELETED>    ``(II) understand and use oral 
                        language to communicate needs, wants, and 
                        thoughts;</DELETED>
                        <DELETED>    ``(III) understand and use 
                        increasingly complex and varied 
                        vocabulary;</DELETED>
                        <DELETED>    ``(IV) develop and demonstrate an 
                        appreciation of books; and</DELETED>
                        <DELETED>    ``(V) in the case of non-English 
                        background children, progress toward 
                        acquisition of the English 
                        language.'';</DELETED>
        <DELETED>    (2) by striking paragraph (2);</DELETED>
        <DELETED>    (3) by redesignating paragraphs (3) and (4) as 
        paragraphs (2) and (3); and</DELETED>
        <DELETED>    (4) in paragraph (2) (as redesignated in paragraph 
        (3))--</DELETED>
                <DELETED>    (A) in subparagraph (B)(iii), striking 
                ``child'' and inserting ``early childhood education 
                and''; and</DELETED>
                <DELETED>    (B) in subparagraph (C)--</DELETED>
                        <DELETED>    (i) in clause (i)--</DELETED>
                                <DELETED>    (I) by striking ``not 
                                later than 1 year after the date of 
                                enactment of this section,''; 
                                and</DELETED>
                                <DELETED>    (II) by striking ``section 
                                651(b)'' and all that follows and 
                                inserting ``this subsection; and''; 
                                and</DELETED>
                        <DELETED>    (ii) in subclause (ii), by 
                        striking ``November 2, 1978'' and inserting 
                        ``the date of enactment of the Human Services 
                        Reauthorization Act of 1998''.</DELETED>
<DELETED>    (b) Performance Measures.--Section 641A(b) (42 U.S.C. 
9836a(b)) is amended--</DELETED>
        <DELETED>    (1) in the subsection heading, by inserting 
        ``Outcome-Based'' before ``Performance'';</DELETED>
        <DELETED>    (2) in paragraph (1)--</DELETED>
                <DELETED>    (A) by striking ``Not later than 1 year 
                after the date of enactment of this section, the'' and 
                inserting ``The'';</DELETED>
                <DELETED>    (B) by striking ``child'' and inserting 
                ``early childhood education and'';</DELETED>
                <DELETED>    (C) by striking the period and inserting 
                ``, and the impact of the services provided through the 
                programs to children and their families.''; 
                and</DELETED>
                <DELETED>    (D) by adding at the end the following: 
                ``The performance measures shall include the 
                performance standards described in subsection 
                (a)(1)(B)(ii).''; and</DELETED>
        <DELETED>    (3) in paragraph (2)--</DELETED>
                <DELETED>    (A) in the paragraph heading, by striking 
                ``Design'' and inserting ``Characteristics'';</DELETED>
                <DELETED>    (B) in the matter preceding subparagraph 
                (A), by striking ``shall be designed--'' and inserting 
                ``shall--'';</DELETED>
                <DELETED>    (C) in subparagraph (A), by striking ``to 
                assess'' and insert ``assess the impact of'';</DELETED>
                <DELETED>    (D) in subparagraph (B)--</DELETED>
                        <DELETED>    (i) by striking ``to''; 
                        and</DELETED>
                        <DELETED>    (ii) by striking ``and peer 
                        review'' and inserting ``, peer review, and 
                        program evaluation''; and</DELETED>
                <DELETED>    (E) in subparagraph (C), by inserting ``be 
                developed'' before ``for other''.</DELETED>
<DELETED>    (c) Monitoring.--Section 641A(c)(2) (42 U.S.C. 
9836a(c)(2)) is amended--</DELETED>
        <DELETED>    (1) in subparagraph (B), by striking ``; and'' and 
        inserting a semicolon;</DELETED>
        <DELETED>    (2) in subparagraph (C)--</DELETED>
                <DELETED>    (A) by inserting ``(including children 
                with disabilities)'' after ``eligible children''; 
                and</DELETED>
                <DELETED>    (B) by striking the period and inserting 
                ``; and''; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
                <DELETED>    ``(D) as part of the reviews of the 
                programs, include a review and assessment of program 
                effectiveness, as measured in accordance with the 
                outcome-based performance measures developed pursuant 
                to subsection (b) and with the performance standards 
                established pursuant to subparagraphs (A) and (B) of 
                subsection (a)(1).''.</DELETED>
<DELETED>    (d) Termination.--Section 641A(d) (42 U.S.C. 9836a(d)) is 
amended--</DELETED>
        <DELETED>    (1) in paragraph (1)(B), to read as 
        follows:</DELETED>
                <DELETED>    ``(B) with respect to each identified 
                deficiency, require the agency--</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(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</DELETED>
        <DELETED>    (2) in paragraph (2)(A), in the matter preceding 
        clause (i), by striking ``immediately'' and inserting 
        ``immediately or during a 90-day period under clause (i) or 
        (ii) of paragraph (1)(B)''.</DELETED>

<DELETED>SEC. 110. POWERS AND FUNCTIONS OF HEAD START 
              AGENCIES.</DELETED>

<DELETED>    Section 642 (42 U.S.C. 9837) is amended--</DELETED>
        <DELETED>    (1) in subsection (a), by inserting ``or for-
        profit'' after ``nonprofit'';</DELETED>
        <DELETED>    (2) in subsection (c)--</DELETED>
                <DELETED>    (A) by inserting ``and collaborate'' after 
                ``coordinate''; and</DELETED>
                <DELETED>    (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</DELETED>
        <DELETED>    (3) in subsection (d)--</DELETED>
                <DELETED>    (A) in paragraph (1)--</DELETED>
                        <DELETED>    (i) by striking ``shall carry 
                        out'' and all that follows through ``maintain'' 
                        and inserting ``shall take steps to ensure, to 
                        the maximum extent possible, that children 
                        maintain'';</DELETED>
                        <DELETED>    (ii) by striking ``developmental'' 
                        and inserting ``developmental and 
                        educational''; and</DELETED>
                        <DELETED>    (iii) by striking ``to build'' and 
                        inserting ``build'';</DELETED>
                <DELETED>    (B) by striking paragraph (2); 
                and</DELETED>
                <DELETED>    (C) by redesignating paragraphs (3) 
                through (5) as paragraphs (2) through (4), 
                respectively.</DELETED>

<DELETED>SEC. 111. HEAD START TRANSITION.</DELETED>

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

<DELETED>``SEC. 642A. HEAD START TRANSITION.</DELETED>

<DELETED>    ``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--
</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(3) conducting meetings involving parents, 
        kindergarten or elementary school teachers, and Head Start 
        program teachers to discuss the developmental and other needs 
        of individual children;</DELETED>
        <DELETED>    ``(4) organizing and participating in joint 
        transition-related training of school staff and Head Start 
        staff;</DELETED>
        <DELETED>    ``(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.); and</DELETED>
        <DELETED>    ``(6) assisting families, administrators, and 
        teachers in enhancing developmental continuity between Head 
        Start services and elementary school classes.''.</DELETED>

<DELETED>SEC. 112. SUBMISSION OF PLANS TO GOVERNORS.</DELETED>

<DELETED>    The first sentence of section 643 (42 U.S.C. 9838) is 
amended--</DELETED>
        <DELETED>    (1) by striking ``within 30 days'' and inserting 
        ``within 45 days''; and</DELETED>
        <DELETED>    (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 within the State)''.</DELETED>

<DELETED>SEC. 113. PARTICIPATION IN HEAD START PROGRAMS.</DELETED>

<DELETED>    (a) Regulations.--Section 645(a)(1) (42 U.S.C. 9840(a)(1)) 
is amended--</DELETED>
        <DELETED>    (1) in subparagraph (B), by striking ``that 
        programs'' and inserting ``that (i) programs''; and</DELETED>
        <DELETED>    (2) by striking the period at the end of 
        subparagraph (B) and inserting the following: ``, 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.''.</DELETED>
<DELETED>    (b) Sliding Fee Scale.--Section 645(b) (42 U.S.C. 9840(b)) 
is amended by adding at the end the following:</DELETED>
<DELETED>    ``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 
partnership. The copayment 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.''.</DELETED>
<DELETED>    (c) Continuous Recruitment and Acceptance of 
Applications.--Section 645(c) (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.''.</DELETED>

<DELETED>SEC. 114. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS 
              AND TODDLERS.</DELETED>

<DELETED>    Section 645A (42 U.S.C. 9840a) is amended--</DELETED>
        <DELETED>    (1) in the section heading, by inserting ``early 
        head start'' before ``programs for'';</DELETED>
        <DELETED>    (2) in subsection (a)--</DELETED>
                <DELETED>    (A) by striking ``for--'' and all that 
                follows through ``programs providing'' and inserting 
                ``for programs providing'';</DELETED>
                <DELETED>    (B) by striking ``; and'' and inserting a 
                period; and</DELETED>
                <DELETED>    (C) by striking paragraph (2);</DELETED>
        <DELETED>    (3) in subsection (b)(5), by inserting 
        ``(including programs for infants and toddlers with 
        disabilities)'' after ``community'';</DELETED>
        <DELETED>    (4) in subsection (c)--</DELETED>
                <DELETED>    (A) in the matter preceding paragraph (1), 
                by striking ``subsection (a)(1)'' and inserting 
                ``subsection (a)''; and</DELETED>
                <DELETED>    (B) in paragraph (2), by striking ``3 (or 
                under'' and all that follows and inserting 
                ``3;'';</DELETED>
        <DELETED>    (5) in subsection (d)--</DELETED>
                <DELETED>    (A) by striking paragraph (2); 
                and</DELETED>
                <DELETED>    (B) by redesignating paragraph (3) as 
                paragraph (2);</DELETED>
        <DELETED>    (6) by striking subsection (e);</DELETED>
        <DELETED>    (7) by redesignating subsections (f) and (g) as 
        subsections (e) and (f), respectively;</DELETED>
        <DELETED>    (8) in subsection (e) (as redesignated in 
        paragraph (7))--</DELETED>
                <DELETED>    (A) in the subsection heading, by striking 
                ``Other''; and</DELETED>
                <DELETED>    (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),''; 
                and</DELETED>
        <DELETED>    (9) by striking subsection (h) and inserting the 
        following:</DELETED>
<DELETED>    ``(h) Monitoring, Training, Technical Assistance, and 
Evaluation.--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.</DELETED>
<DELETED>    ``(i) Training and Technical Assistance Account.--
</DELETED>
        <DELETED>    ``(1) 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.</DELETED>
        <DELETED>    ``(2) Activities.--Funds in the account may be 
        used for purposes including--</DELETED>
                <DELETED>    ``(A) 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;</DELETED>
                <DELETED>    ``(B) 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;</DELETED>
                <DELETED>    ``(C) providing ongoing training and 
                technical assistance for existing recipients of grants 
                under subsection (a) and support and program planning 
                and implementation assistance for new recipients of 
                such grants; and</DELETED>
                <DELETED>    ``(D) 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.''.</DELETED>

<DELETED>SEC. 115. TECHNICAL ASSISTANCE AND TRAINING.</DELETED>

<DELETED>    (a) Full-Working-Day, Full Calendar Year Services.--
Section 648(b) (42 U.S.C. 9843(b)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (1), by striking ``; and'' and 
        inserting a semicolon;</DELETED>
        <DELETED>    (2) in paragraph (2), by striking the period and 
        inserting ``; and''; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
        <DELETED>    ``(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.''.</DELETED>
<DELETED>    (b) Allocating Resources.--Section 648(c) (42 U.S.C. 
9843(c)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (4)--</DELETED>
                <DELETED>    (A) by striking ``developing'' and 
                inserting ``developing and implementing''; 
                and</DELETED>
                <DELETED>    (B) 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;'';</DELETED>
        <DELETED>    (2) in paragraph (7), by striking ``; and'' and 
        inserting a semicolon;</DELETED>
        <DELETED>    (3) in paragraph (8), by striking the period and 
        inserting ``; and''; and</DELETED>
        <DELETED>    (4) by adding at the end the following:</DELETED>
        <DELETED>    ``(9) assist Head Start agencies in--</DELETED>
                <DELETED>    ``(A) ensuring the school readiness of 
                children; and</DELETED>
                <DELETED>    ``(B) meeting the education performance 
                standards described in this subchapter.''.</DELETED>
<DELETED>    (c) Services.--Section 648(e) (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''.</DELETED>

<DELETED>SEC. 116. STAFF QUALIFICATIONS AND DEVELOPMENT.</DELETED>

<DELETED>    Section 648A(a) (42 U.S.C. 9843a(a)) is amended--
</DELETED>
        <DELETED>    (1) in paragraph (1)--</DELETED>
                <DELETED>    (A) by redesignating subparagraphs (B) 
                through (D) as clauses (ii) through (iv), 
                respectively;</DELETED>
                <DELETED>    (B) by striking ``(A)'' and inserting 
                ``(B)(i)'';</DELETED>
                <DELETED>    (C) by inserting before subparagraph (B) 
                (as redesignated in subparagraph (B) of this paragraph) 
                the following:</DELETED>
                <DELETED>    ``(A) demonstrated competency to perform 
                functions that include--</DELETED>
                        <DELETED>    ``(i) 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 oral 
                        language, their understanding and use of 
                        increasingly complex and varied vocabulary, 
                        their appreciation of books, and their problem 
                        solving abilities;</DELETED>
                        <DELETED>    ``(ii) establishing and 
                        maintaining a safe, healthy learning 
                        environment;</DELETED>
                        <DELETED>    ``(iii) supporting the social and 
                        emotional development of children; 
                        and</DELETED>
                        <DELETED>    ``(iv) 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; and''; and</DELETED>
        <DELETED>    (2) by striking paragraph (2) and inserting the 
        following:</DELETED>
        <DELETED>    ``(2) Waiver.--On request, the Secretary shall 
        grant a 180-day waiver of the requirements of paragraph (1)(B), 
        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 
        (1)(B), with respect to an individual who--</DELETED>
                <DELETED>    ``(A) is enrolled in a program that grants 
                any such credential, certificate, or degree; 
                and</DELETED>
                <DELETED>    ``(B) 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.''.</DELETED>

<DELETED>SEC. 117. RESEARCH, DEMONSTRATION, AND EVALUATION.</DELETED>

<DELETED>    (a) Comparative Studies.--Section 649(d) (42 U.S.C. 
9844(d)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (6), by striking ``; and'' and 
        inserting a semicolon;</DELETED>
        <DELETED>    (2) in paragraph (7), by striking the period and 
        inserting ``; and''; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
        <DELETED>    ``(8) 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--</DELETED>
                <DELETED>    ``(A) may include the use of a data set 
                that existed prior to the initiation of the study; 
                and</DELETED>
                <DELETED>    ``(B) shall compare the educational 
                achievement, social adaptation, and health status of 
                the participating children and the eligible 
                nonparticipating children.</DELETED>
<DELETED>The Secretary shall ensure that an appropriate entity carries 
out a study described in paragraph (8), and prepares and submits to the 
appropriate committees of Congress a report containing the results of 
the study, not later than September 30, 2002.''.</DELETED>
<DELETED>    (b) National Research.--Section 649 (42 U.S.C. 9844) is 
amended by inserting after subsection (e) the following:</DELETED>
<DELETED>    ``(f) National Head Start Impact Research.--</DELETED>
        <DELETED>    ``(1) Expert panel.--</DELETED>
                <DELETED>    ``(A) In general.--The Secretary shall 
                appoint an independent panel consisting of experts in 
                program evaluation and research, education, and early 
                childhood programs--</DELETED>
                        <DELETED>    ``(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 Human Services 
                        Reauthorization Act of 1998;</DELETED>
                        <DELETED>    ``(ii) to maintain and advise the 
                        Secretary regarding the progress of the 
                        research; and</DELETED>
                        <DELETED>    ``(iii) to comment, if the panel 
                        so desires, on the interim and final research 
                        reports submitted under paragraph 
                        (7).</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) General authority.--After reviewing the 
        recommendations of the expert panel the Secretary shall enter 
        into a grant, 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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(5) Analysis.--The Secretary shall ensure that 
        the organization conducting the research--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(ii) considers whether the Head Start 
                programs--</DELETED>
                        <DELETED>    ``(I) enhance the growth and 
                        development of children in cognitive, 
                        emotional, and physical health areas;</DELETED>
                        <DELETED>    ``(II) strengthen families as the 
                        primary nurturers of their children; 
                        and</DELETED>
                        <DELETED>    ``(III) ensure that children 
                        attain school readiness; and</DELETED>
                <DELETED>    ``(iii) examines--</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(II) how receipt of services 
                        described in subclause (I) enriches the lives 
                        of children and families participating in Head 
                        Start programs;</DELETED>
                <DELETED>    ``(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, by examining a variety 
                of factors, including educational achievement, 
                referrals for special education or remedial course 
                work, and absenteeism;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(D) includes comparisons of individuals 
                who participate in Head Start programs with control 
                groups (including comparison groups) composed of--
                </DELETED>
                        <DELETED>    ``(i) individuals who participate 
                        in other early childhood programs (such as 
                        preschool programs and day care); and</DELETED>
                        <DELETED>    ``(ii) individuals who do not 
                        participate in any other early childhood 
                        program.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) Head Start program 
                operations;</DELETED>
                <DELETED>    ``(B) Head Start program 
                quality;</DELETED>
                <DELETED>    ``(C) the length of time a child attends a 
                Head Start program;</DELETED>
                <DELETED>    ``(D) the age of the child on entering the 
                Head Start program;</DELETED>
                <DELETED>    ``(E) the type of organization (such as a 
                local educational agency or a community action agency) 
                providing services for the Head Start 
                program;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(7) Reports.--</DELETED>
                <DELETED>    ``(A) Submission of interim reports.--The 
                organization shall prepare and submit to the Secretary 
                2 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.</DELETED>
                <DELETED>    ``(B) Submission of final report.--The 
                organization shall prepare and submit to the Secretary 
                a final report containing the findings of the 
                research.</DELETED>
                <DELETED>    ``(C) Transmittal of reports to 
                congress.--</DELETED>
                        <DELETED>    ``(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.</DELETED>
                        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(g) Quality Improvement Study.</DELETED>
        <DELETED>    ``(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) of the Head Start 
        Act (42 U.S.C. 9835(a)(3)) since fiscal year 1991.</DELETED>
        <DELETED>    ``(2) Report.--The Secretary shall prepare and 
        submit to Congress not later than September 2000 a report 
        containing the results of the study, including--</DELETED>
                <DELETED>    ``(A) the types of activities funded with 
                the quality improvement funds;</DELETED>
                <DELETED>    ``(B) the extent to which the use of the 
                quality improvement funds has accomplished the goals of 
                section 640(a)(3)(B);</DELETED>
                <DELETED>    ``(C) the effect of use of the quality 
                improvement funds on teacher training, salaries, 
                benefits, recruitment, and retention; and</DELETED>
                <DELETED>    ``(D) the effect of use of the quality 
                improvement funds on the cognitive and social 
                development of children receiving services under the 
                this subchapter.''.</DELETED>
<DELETED>    (b) Conforming Amendment.--Section 650(13) (42 U.S.C. 
9846(13)) is amended by striking ``, demonstration,''.</DELETED>

  <DELETED>TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM</DELETED>

<DELETED>SEC. 201. REAUTHORIZATION.</DELETED>

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

<DELETED>``Subtitle B--Community Services Block Grant Program</DELETED>

<DELETED>``SEC. 671. SHORT TITLE.</DELETED>

<DELETED>    ``This subtitle may be cited as the `Community Services 
Block Grant Act'.</DELETED>

<DELETED>``SEC. 672. PURPOSES AND GOALS.</DELETED>

<DELETED>    ``The purposes of this subtitle are--</DELETED>
        <DELETED>    ``(1) to provide financial 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.));</DELETED>
        <DELETED>    ``(2) to accomplish the goal described in 
        paragraph (1) through--</DELETED>
                <DELETED>    ``(A) the strengthening of community 
                capabilities for planning and coordinating the use of a 
                broad range of Federal, State, and other assistance 
                related to the elimination of poverty, so that this 
                assistance can be used in a manner responsive to local 
                needs and conditions;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(C) the use of innovative and effective, 
                community-based approaches to attacking the causes and 
                effects of poverty and of community 
                breakdown;</DELETED>
                <DELETED>    ``(D) the development and implementation 
                of all programs designated to serve low-income 
                communities and groups with the maximum feasible 
                participation of residents of the communities and 
                members of the groups served, so as to best stimulate 
                and take full advantage of capabilities for self-
                advancement and assure that the programs are otherwise 
                meaningful to the intended beneficiaries of the 
                programs; and</DELETED>
                <DELETED>    ``(E) the broadening of the resource base 
                of programs directed to the elimination of 
                poverty.</DELETED>

<DELETED>``SEC. 673. DEFINITIONS.</DELETED>

<DELETED>    ``In this subtitle:</DELETED>
        <DELETED>    ``(1) Eligible entity.--The term `eligible entity' 
        means an entity--</DELETED>
                <DELETED>    ``(A) that is an eligible entity described 
                in section 673(1) (as in effect on the day before the 
                date of enactment of the Human Services Reauthorization 
                Act of 1998) as of 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</DELETED>
                <DELETED>    ``(B) that has a tripartite board or other 
                mechanism described in subsection (a) or (b), as 
                appropriate, of section 676B.</DELETED>
        <DELETED>    ``(2) Poverty line.--The term `poverty line' means 
        the official poverty line defined by the Secretary. The 
        Secretary shall revise the poverty line annually (or at any 
        shorter interval the Secretary determines to be feasible and 
        desirable) 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.</DELETED>
        <DELETED>    ``(3) Private, nonprofit organization.--The term 
        `private, nonprofit organization' includes a faith-based 
        organization, to which the provisions of section 679 shall 
        apply.</DELETED>
        <DELETED>    ``(4) Secretary.--The term `Secretary' means the 
        Secretary of Health and Human Services.</DELETED>
        <DELETED>    ``(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, the Commonwealth of the Northern Mariana Islands, and 
        the combined Freely Associated States.</DELETED>

<DELETED>``SEC. 674. AUTHORIZATION OF APPROPRIATIONS.</DELETED>

<DELETED>    ``(a) In General.--There are authorized to be appropriated 
$625,000,000 for fiscal year 1999 and such sums as may be necessary for 
each of fiscal years 2000 through 2003 to carry out the provisions of 
this subtitle (other than sections 681 and 682).</DELETED>
<DELETED>    ``(b) Reservations.--Of the amounts appropriated under 
subsection (a) for each fiscal year, the Secretary shall reserve--
</DELETED>
        <DELETED>    ``(1) </DELETED>\<DELETED>1/2</DELETED>\ 
        <DELETED>of 1 percent for carrying out section 675A (relating 
        to payments for territories);</DELETED>
        <DELETED>    ``(2) not less than </DELETED>\<DELETED>1/
        2</DELETED>\ <DELETED>of 1 percent and not more than 1 percent 
        for activities authorized in section 678A (relating to training 
        and technical assistance); and</DELETED>
        <DELETED>    ``(3) 9 percent for carrying out section 680 
        (relating to discretionary activities).</DELETED>

<DELETED>``SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.</DELETED>

<DELETED>    ``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.</DELETED>

<DELETED>``SEC. 675A. DISTRIBUTION TO TERRITORIES.</DELETED>

<DELETED>    ``(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, the Commonwealth of the Northern Mariana Islands, and the 
combined Freely Associated States.</DELETED>
<DELETED>    ``(b) Application.--Each jurisdiction to which subsection 
(a) applies may receive a grant under this subtitle 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 
subtitle, and that are consistent with the requirements of section 
676.</DELETED>

<DELETED>``SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES.</DELETED>

<DELETED>    ``(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 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 that no State shall receive less than 
</DELETED>\<DELETED>1/4</DELETED>\ <DELETED>of 1 percent of the amount 
appropriated under section 674(a) for such fiscal year.</DELETED>
<DELETED>    ``(b) Allotments in Years With Greater Available Funds.--
</DELETED>
        <DELETED>    ``(1) Minimum allotments.--Subject to paragraphs 
        (2) and (3), if the amount appropriated under section 674(a) 
        for each 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 
        </DELETED>\<DELETED>1/2</DELETED>\ <DELETED>of 1 percent of the 
        amount appropriated under section 674(a) for such fiscal 
        year.</DELETED>
        <DELETED>    ``(2) Maintenance of 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) to such 
        State for fiscal year 1990.</DELETED>
        <DELETED>    ``(3) Maximum allotments.--The amount allotted 
        under paragraph (1) to a State 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 fiscal year preceding the 
        fiscal year for which a determination is made under this 
        subsection.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(d) Definition.--For purposes of this section, the term 
`State' does not include Guam, American Samoa, the United States Virgin 
Islands, the Commonwealth of the Northern Mariana Islands, and the 
Freely Associated States.</DELETED>

<DELETED>``SEC. 675C. USES OF FUNDS.</DELETED>

<DELETED>    ``(a) Grants to Eligible Entities and Other 
Organizations.--</DELETED>
        <DELETED>    ``(1) In general.--Not less than 90 percent of the 
        funds allotted to a State under section 675B shall be used by 
        the State to make grants for the purposes described in section 
        672 to eligible entities.</DELETED>
        <DELETED>    ``(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, in accordance with paragraph (3).</DELETED>
        <DELETED>    ``(3) Recapture and redistribution of unobligated 
        funds.--</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Other Activities.--</DELETED>
        <DELETED>    ``(1) Use of remainder.--If a State uses less than 
        100 percent of the State allotment to make grants under 
        subsection (a), the State shall use the remainder of the 
        allotment (subject to paragraph (2)) for--</DELETED>
                <DELETED>    ``(A) providing training and technical 
                assistance to those entities in need of such training 
                and assistance;</DELETED>
                <DELETED>    ``(B) coordinating State-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;</DELETED>
                <DELETED>    ``(C) supporting statewide coordination 
                and communication among eligible entities;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(E) supporting asset-building programs 
                for low-income individuals, such as programs supporting 
                individual development accounts;</DELETED>
                <DELETED>    ``(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; and</DELETED>
                <DELETED>    ``(G) supporting other activities, 
                consistent with the purposes of this 
                subtitle.</DELETED>
        <DELETED>    ``(2) Administrative cap.--No State may spend more 
        than the greater of $55,000, or 5 percent, of the portion of 
        the State allotment that remains after the State makes grants 
        to eligible entities under subsection (a), for administrative 
        expenses, including monitoring activities. The cost of 
        activities conducted under paragraph (1)(A) shall not be 
        considered to be administrative expenses.</DELETED>

<DELETED>``SEC. 676. APPLICATION AND PLAN.</DELETED>

<DELETED>    ``(a) Designation of Lead Agency.--</DELETED>
        <DELETED>    ``(1) Designation.--The chief executive officer of 
        a State desiring to receive an allotment under this subtitle 
        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.</DELETED>
        <DELETED>    ``(2) Duties.--The lead agency shall--</DELETED>
                <DELETED>    ``(A) develop the State plan to be 
                submitted to the Secretary under subsection 
                (b);</DELETED>
                <DELETED>    ``(B) in conjunction with the development 
                of the State plan as required under subsection (b), 
                hold at least 1 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 allotment for the period 
                covered by the State plan; and</DELETED>
                <DELETED>    ``(C) conduct reviews of eligible entities 
                under section 678B.</DELETED>
        <DELETED>    ``(3) Legislative hearing.--The State shall hold 
        at least 1 legislative hearing every 3 years in conjunction 
        with the development of the State plan.</DELETED>
<DELETED>    ``(b) State Application and Plan.--Beginning with fiscal 
year 2000, to be eligible to receive an allotment under this subtitle, 
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--</DELETED>
        <DELETED>    ``(1) an assurance that funds made available 
        through the allotment will be used to support activities that 
        are designed to assist low-income families and individuals, 
        including 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--</DELETED>
                <DELETED>    ``(A) to remove obstacles and solve 
                problems that block the achievement of self-
                sufficiency;</DELETED>
                <DELETED>    ``(B) to secure and retain meaningful 
                employment;</DELETED>
                <DELETED>    ``(C) to attain an adequate 
                education;</DELETED>
                <DELETED>    ``(D) to make better use of available 
                income;</DELETED>
                <DELETED>    ``(E) to obtain and maintain adequate 
                housing and a suitable living environment;</DELETED>
                <DELETED>    ``(F) to obtain emergency assistance 
                through loans, grants, or other means to meet immediate 
                and urgent individual and family needs;</DELETED>
                <DELETED>    ``(G) to achieve greater participation in 
                the affairs of the community; and</DELETED>
                <DELETED>    ``(H) to make more effective use of other 
                programs related to the purposes of this subtitle 
                (including State welfare reform efforts);</DELETED>
        <DELETED>    ``(2) a description of how the State intends to 
        use discretionary funds made available from the remainder of 
        the 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;</DELETED>
        <DELETED>    ``(3) based on information provided by eligible 
        entities in the State, a description of--</DELETED>
                <DELETED>    ``(A) the service delivery system, for 
                services provided or coordinated with funds made 
                available through the allotment, targeted to low-income 
                individuals and families in communities within the 
                State;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(C) a description of how funds made 
                available through the allotment will be coordinated 
                with other public and private resources; and</DELETED>
                <DELETED>    ``(D) a description of how the funds will 
                be used to support innovative community and 
                neighborhood-based initiatives related to the purposes 
                of this subtitle;</DELETED>
        <DELETED>    ``(4) an assurance that 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;</DELETED>
        <DELETED>    ``(5) an assurance that 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;</DELETED>
        <DELETED>    ``(6) an assurance that the State will ensure 
        coordination between antipoverty programs in each community, 
        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;</DELETED>
        <DELETED>    ``(7) an assurance that the State will permit and 
        cooperate with Federal investigations undertaken in accordance 
        with section 678D;</DELETED>
        <DELETED>    ``(8) an assurance that any eligible entity that 
        received funding in the previous fiscal year 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);</DELETED>
        <DELETED>    ``(9) an assurance that 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 faith-based organizations, charitable 
        groups, and community organizations;</DELETED>
        <DELETED>    ``(10) an assurance that the State will require 
        each eligible entity to establish procedures under which a low-
        income individual, community organization, or faith-based 
        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;</DELETED>
        <DELETED>    ``(11) an assurance that the State will secure 
        from each eligible entity, as a condition to receipt of funding 
        by the entity 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;</DELETED>
        <DELETED>    ``(12) an assurance that the State and all 
        eligible entities in the State will, not later than fiscal year 
        2002, participate in the Results Oriented Management and 
        Accountability System, any other performance measure system 
        established by the Secretary under 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</DELETED>
        <DELETED>    ``(13) information describing how the State will 
        carry out the assurances described in this 
        subsection.</DELETED>
<DELETED>    ``(c) Determinations.--For purposes of making a 
determination in accordance with subsection (b)(8) with respect to--
</DELETED>
        <DELETED>    ``(1) a funding reduction, the term `cause' 
        includes--</DELETED>
                <DELETED>    ``(A) a statewide redistribution of funds 
                provided under this subtitle to respond to--</DELETED>
                        <DELETED>    ``(i) the results of the most 
                        recently available census or other appropriate 
                        data;</DELETED>
                        <DELETED>    ``(ii) the designation of a new 
                        eligible entity; or</DELETED>
                        <DELETED>    ``(iii) severe economic 
                        dislocation; or</DELETED>
                <DELETED>    ``(B) the failure of an eligible entity to 
                comply with the terms of an agreement to provide 
                services under this subtitle; and</DELETED>
        <DELETED>    ``(2) a termination, the term `cause' includes the 
        material failure of an eligible entity to comply with the terms 
        of such an agreement and the State plan to provide services 
        under this subtitle or the consistent failure of the entity to 
        achieve performance measures as determined by the 
        State.</DELETED>
<DELETED>    ``(d) Procedures and Information.--The Secretary may 
prescribe procedures only for the purpose of assessing the 
effectiveness of eligible entities in carrying out the purposes of this 
subtitle.</DELETED>
<DELETED>    ``(e) Revisions and Inspection.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>

<DELETED>``SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGIBLE 
              ENTITIES IN UNSERVED AREAS.</DELETED>

<DELETED>    ``(a) Qualified Organization In or Near Area.--</DELETED>
        <DELETED>    ``(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, 1 or more--</DELETED>
                <DELETED>    ``(A) private nonprofit organizations 
                geographically located in the unserved area that meet 
                the requirements of this subtitle; or</DELETED>
                <DELETED>    ``(B) private nonprofit organizations 
                (which may include eligible entities) located in an 
                area contiguous to or within reasonable proximity of 
                the unserved area that are already providing related 
                services in the unserved area.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) in each of the 3 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</DELETED>
                <DELETED>    ``(B) in the category described in section 
                676B(a)(2), by members that reside in the neighborhood 
                served.</DELETED>
<DELETED>    ``(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 local entities that are providing 
services in the unserved area, consistent with the needs identified by 
a community-needs assessment.</DELETED>
<DELETED>    ``(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).</DELETED>

<DELETED>``SEC. 676B. TRIPARTITE BOARDS.</DELETED>

<DELETED>    ``(a) Private Nonprofit Entities.--</DELETED>
        <DELETED>    ``(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 and implementation of the program to serve low-
        income communities or groups.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) </DELETED>\<DELETED>1/3</DELETED>\ 
                <DELETED>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 
                elected officials reasonably available and willing to 
                serve on the board is less than </DELETED>\<DELETED>1/
                3</DELETED>\ <DELETED>of the membership of the board, 
membership on the board of appointive public officials or their 
representatives may be counted in meeting such </DELETED>\<DELETED>1/
3</DELETED>\ <DELETED>requirement;</DELETED>
                <DELETED>    ``(B) not fewer than 
                </DELETED>\<DELETED>1/3</DELETED>\ <DELETED>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;</DELETED>
                <DELETED>    ``(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; 
                and</DELETED>
                <DELETED>    ``(D)(i) each member resides in the 
                community; and</DELETED>
                <DELETED>    ``(ii) each representative of low-income 
                individuals and families selected to represent a 
                specific neighborhood within a community under this 
                paragraph resides in the neighborhood represented by 
                the member.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(1) a tripartite board, which shall have members 
        selected by the organization and shall be composed so as to 
        assure that not fewer than </DELETED>\<DELETED>1/3</DELETED>\ 
        <DELETED>of the members are persons chosen in accordance with 
        democratic selection procedures adequate to assure that these 
        members--</DELETED>
                <DELETED>    ``(A) are representative of low-income 
                individuals and families in the neighborhood 
                served;</DELETED>
                <DELETED>    ``(B) reside in the neighborhood served; 
                and</DELETED>
                <DELETED>    ``(C) are able to participate actively in 
                the planning and implementation of programs funded 
                under this subtitle; or</DELETED>
        <DELETED>    ``(2) another mechanism specified by the State to 
        assure decisionmaking and participation by low-income 
        individuals in the planning, administration, and evaluation of 
        programs funded under this subtitle.</DELETED>

<DELETED>``SEC. 677. PAYMENTS TO INDIAN TRIBES.</DELETED>

<DELETED>    ``(a) Reservation.--If, with respect to any State, the 
Secretary--</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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,</DELETED>
<DELETED>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).</DELETED>
<DELETED>    ``(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 under this 
subtitle in such State.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(e) Definitions.--In this section:</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Indian.--The term `Indian' means a member of 
        an Indian tribe or of a tribal organization.</DELETED>

<DELETED>``SEC. 678. OFFICE OF COMMUNITY SERVICES.</DELETED>

<DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Grants, Contracts, Cooperative Agreements.--The 
Secretary shall carry out functions of this subtitle through grants, 
contracts, or cooperative agreements.</DELETED>

<DELETED>``SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.</DELETED>

<DELETED>    ``(a) Activities.--The Secretary shall use the amounts 
reserved in section 674(b)(2) for training, technical assistance, 
planning, evaluation, and data collection activities related to 
programs carried out under this subtitle.</DELETED>
<DELETED>    ``(b) Process.--The process for determining the training 
and technical assistance to be carried out under this section shall--
</DELETED>
        <DELETED>    ``(1) ensure that the needs of eligible entities 
        and programs relating to improving program quality, including 
        financial management practices, are addressed to the maximum 
        extent feasible; and</DELETED>
        <DELETED>    ``(2) incorporate mechanisms to ensure 
        responsiveness to local needs, including an ongoing procedure 
        for obtaining input from the national and State network of 
        eligible entities.</DELETED>

<DELETED>``SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.</DELETED>

<DELETED>    ``(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:</DELETED>
        <DELETED>    ``(1) A full onsite review of each such entity at 
        least once during each 3-year period.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(4) Other reviews as appropriate, including 
        reviews of entities with programs that have had other Federal, 
        State, or local grants terminated for cause.</DELETED>
<DELETED>    ``(b) Requests.--The State may request training and 
technical assistance from the Secretary as needed to comply with the 
requirements of this section.</DELETED>

<DELETED>``SEC. 678C. CORRECTIVE ACTION; TERMINATION AND REDUCTION OF 
              FUNDING.</DELETED>

<DELETED>    ``(a) Determination.--If the State determines, on the 
basis of a review pursuant to subsection 678B, that an eligible entity 
materially 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--</DELETED>
        <DELETED>    ``(1) inform the entity of the deficiency to be 
        corrected;</DELETED>
        <DELETED>    ``(2) require the entity to correct the 
        deficiency;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(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 60 days 
after the determination to terminate the designation or reduce the 
funding. If the review is not completed within 60 days, the 
determination of the State shall become final at the end of the 60th 
day.</DELETED>

<DELETED>``SEC. 678D. FISCAL CONTROLS, AUDITS, AND 
              WITHHOLDING.</DELETED>

<DELETED>    ``(a) Fiscal Controls, Procedures, Audits, and 
Inspections.--</DELETED>
        <DELETED>    ``(1) In general.--A State that receives funds 
        under this subtitle shall--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(B) ensure that cost and accounting 
                standards of the Office of Management and Budget apply 
to a recipient of funds under this subtitle;</DELETED>
                <DELETED>    ``(C) prepare, at least every year (or in 
                the case of a State with a 2-year State plan, every 2 
                years) in accordance with paragraph (2) 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</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(2) Audits.--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. 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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Withholding.--</DELETED>
        <DELETED>    ``(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 State allotment substantially 
        in accordance with the provisions of this subtitle, including 
        the assurances such State provided under section 676.</DELETED>
        <DELETED>    ``(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 1 of the assurances provided under section 676 that 
        constitutes disregarding that assurance shall be considered to 
        be a complaint of a serious nature.</DELETED>
        <DELETED>    ``(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.</DELETED>

<DELETED>``SEC. 678E. ACCOUNTABILITY AND REPORTING 
              REQUIREMENTS.</DELETED>

<DELETED>    ``(a) State Accountability and Reporting Requirements.--
</DELETED>
        <DELETED>    ``(1) Performance measurement.--</DELETED>
                <DELETED>    ``(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 established by the Secretary 
                pursuant to subsection (b), or an alternative system 
                that meets the requirements of subsection 
                (b).</DELETED>
                <DELETED>    ``(B) Local agencies.--The State may elect 
                to have local agencies who 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.</DELETED>
        <DELETED>    ``(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. 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.</DELETED>
<DELETED>    ``(b) Secretary's Accountability and Reporting 
Requirements.--</DELETED>
        <DELETED>    ``(1) Performance measurement.--The Secretary, in 
        collaboration with the States and with eligible entities 
        throughout the Nation, shall establish 1 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 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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(D) a comparison of the planned uses of 
                funds for each State and the actual uses of the 
                funds;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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, indirect, and 
        administrative costs used by the Department of Health and Human 
        Services for programs funded under this subtitle.</DELETED>
        <DELETED>    ``(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) and 
        the provision of technical assistance described in paragraph 
        (1).</DELETED>

<DELETED>``SEC. 678F. LIMITATIONS ON USE OF FUNDS.</DELETED>

<DELETED>    ``(a) Construction of Facilities.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(b) Political Activities.--</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(B) any activity to provide voters or 
                prospective voters with transportation to the polls or 
                similar assistance in connection with any such 
                election; or</DELETED>
                <DELETED>    ``(C) any voter registration 
                activity.</DELETED>
        <DELETED>    ``(3) Rules and regulations.--The Secretary, after 
        consultation and regulations 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.</DELETED>
<DELETED>    ``(c) Nondiscrimination.--</DELETED>
        <DELETED>    ``(1) In general.--No person shall, on the basis 
        of race, color, religion, 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.</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) refer the matter to the Attorney 
                General with a recommendation that an appropriate civil 
                action be instituted;</DELETED>
                <DELETED>    ``(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.), or section 504 of the 
                Rehabilitation Act of 1973 (29 U.S.C. 794), as may be 
                applicable; or</DELETED>
                <DELETED>    ``(C) take such other action as may be 
                provided by law.</DELETED>
        <DELETED>    ``(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.</DELETED>

<DELETED>``SEC. 679. OPERATIONAL RULE.</DELETED>

<DELETED>    ``(a) Faith-Based 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, faith-based 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 faith-based character.</DELETED>
<DELETED>    ``(b) Additional Safeguards.--Neither the Federal 
Government nor a State or local government shall require a faith-based 
organization to remove religious art, icons, scripture, or other 
symbols in order to be eligible to provide assistance under a program 
described in subsection (a).</DELETED>
<DELETED>    ``(c) Limitations on Use of Funds for Certain Purposes.--
No funds provided through a grant or contract to a faith-based 
organization to provide assistance under any program described in 
subsection (a) shall be expended for sectarian worship, instruction, or 
proselytization.</DELETED>
<DELETED>    ``(d) Fiscal Accountability.--</DELETED>
        <DELETED>    ``(1) In general.--Except as provided in paragraph 
        (2), any faith-based 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.</DELETED>
        <DELETED>    ``(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.</DELETED>

<DELETED>``SEC. 680. DISCRETIONARY AUTHORITY OF THE 
              SECRETARY.</DELETED>

<DELETED>    ``(a) Grants, Contracts, Arrangements, Loans, and 
Guarantees.--</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(2) Community economic development.--</DELETED>
                <DELETED>    ``(A) Economic development activities.--
                The Secretary shall make grants described in paragraph 
                (1) on a competitive basis to private, non-profit 
                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.</DELETED>
                <DELETED>    ``(B) Consultation.--The Secretary shall 
                exercise the authority provided under subparagraph (A) 
                after consultation with other relevant Federal 
                officials.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Rural community development activities.--The 
        Secretary shall provide the assistance described in paragraph 
        (1) for rural community development activities, which shall 
        include--</DELETED>
                <DELETED>    ``(A) grants to private, nonprofit 
                corporations that provide assistance concerning home 
                repair to rural low-income families and planning and 
                developing low-income rural rental housing units; 
                and</DELETED>
                <DELETED>    ``(B) grants to multistate, regional, 
                private, nonprofit organizations to provide 
training and technical assistance to small, rural communities in 
meeting their community facility needs.</DELETED>
        <DELETED>    ``(4) Neighborhood innovation projects.--The 
        Secretary shall provide the assistance described in paragraph 
        (1) for neighborhood innovation projects, which shall include 
        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 
        projects that are designed to serve low-income individuals and 
        families who are not being effectively served by other 
        programs.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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.</DELETED>

<DELETED>``SEC. 681. COMMUNITY FOOD AND NUTRITION PROGRAMS.</DELETED>

<DELETED>    ``(a) Grants.--The Secretary may, through grants to public 
and private, nonprofit agencies, provide for community-based, local, 
statewide, and national programs--</DELETED>
        <DELETED>    ``(1) to coordinate private and public food 
        assistance resources, wherever the grant recipient determines 
        such coordination to be inadequate, to better serve low-income 
        populations;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(3) to develop innovative approaches at the 
        State and local level to meet the nutrition needs of low-income 
        individuals.</DELETED>
<DELETED>    ``(b) Allotments and Distribution of Funds.--</DELETED>
        <DELETED>    ``(1) In general.--Of the amount appropriated for 
        a fiscal year to carry out this section, the Secretary shall 
        distribute funds for grants under subsection (a) as 
        follows:</DELETED>
                <DELETED>    ``(A) Allotments.--From 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 60 percent of such amount as the low-
                income and unemployed population of such State bears to 
                the low-income and unemployed population of all the 
                States.</DELETED>
                <DELETED>    ``(B) Competitive grants.--From 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.</DELETED>
        <DELETED>    ``(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:</DELETED>
                <DELETED>    ``(A) Allotments.--The Secretary shall use 
                40 percent of such excess to make allotments for grants 
                under subsection (a) to eligible agencies for statewide 
                programs in each State in 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.</DELETED>
                <DELETED>    ``(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.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(4) Minimum allotments for statewide programs.--
        </DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iii) $30,000 if the total 
                        amount appropriated to carry out this section 
                        is not less than $15,000,000.</DELETED>
                <DELETED>    ``(B) Definition.--In this paragraph, the 
                term `State' does not include Guam, American Samoa, the 
                United States Virgin Islands, the Commonwealth of the 
                Northern Mariana Islands, or the Freely Associated 
                States.</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(1) a list of grant recipients;</DELETED>
        <DELETED>    ``(2) information on the amount of funding awarded 
        to each grant recipient; and</DELETED>
        <DELETED>    ``(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).</DELETED>
<DELETED>    ``(d) Authorization of Appropriations.--There are 
authorized to be appropriated to carry out this section $25,000,000 for 
fiscal year 1999, and such sums as may be necessary for each of fiscal 
years 2000 through 2003.</DELETED>

<DELETED>``SEC. 682. NATIONAL OR REGIONAL PROGRAMS DESIGNED TO PROVIDE 
              INSTRUCTIONAL ACTIVITIES FOR LOW-INCOME YOUTH.</DELETED>

<DELETED>    ``(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.</DELETED>
<DELETED>    ``(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--</DELETED>
        <DELETED>    ``(1) access to the facilities and resources of 
        such an institution;</DELETED>
        <DELETED>    ``(2) an initial medical examination and follow-up 
        referral or treatment, without charge, for youth during their 
        participation in such activity;</DELETED>
        <DELETED>    ``(3) at least 1 nutritious meal daily, without 
        charge, for participating youth during each day of 
        participation;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(c) Advisory Committee; Partnerships.--The eligible 
service provider shall, in each community in which a program is funded 
under this section--</DELETED>
        <DELETED>    ``(1) ensure that--</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(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 for a grant under this 
section if--</DELETED>
        <DELETED>    ``(1) the applicant has demonstrated experience in 
        operating a program providing instruction to low-income 
        youth;</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(3) the applicant agrees to use no funds from a 
        grant authorized under this section for administrative 
        expenses; and</DELETED>
        <DELETED>    ``(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.</DELETED>
<DELETED>    ``(e) Applications 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.</DELETED>
<DELETED>    ``(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.</DELETED>
<DELETED>    ``(g) Authorization of Appropriations.--There is 
authorized to be appropriated $15,000,000 for each of fiscal years 1999 
through 2003 for grants to carry out this section.</DELETED>

<DELETED>``SEC. 683. REFERENCES.</DELETED>

<DELETED>    ``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. 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.''.</DELETED>

<DELETED>SEC. 202. CONFORMING AMENDMENTS.</DELETED>

<DELETED>    (a) Preparation.--After consultation with the appropriate 
committees of Congress and the Director of the Office of Management and 
Budget, the Secretary of Health and Human Services shall prepare 
recommended legislation containing technical and conforming amendments 
to reflect the changes made by this title.</DELETED>
<DELETED>    (b) Submission to Congress.--Not later than 6 months after 
the date of enactment of this Act, the Secretary shall submit to 
Congress the recommended legislation referred to under subsection 
(a).</DELETED>

<DELETED>SEC. 203. REPEALERS.</DELETED>

<DELETED>    Sections 407 and 408 of the Human Services Reauthorization 
Act of 1986 (42 U.S.C 9812a and 9910b) are repealed.</DELETED>

    <DELETED>TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE</DELETED>

<DELETED>SEC. 301. AUTHORIZATION.</DELETED>

<DELETED>    (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 
striking ``fiscal years 1995 through 1999'' and inserting ``fiscal 
years 1999 through 2004''.</DELETED>
<DELETED>    (b) Program Year.--Section 2602(c) of such Act (42 U.S.C. 
8621(c)) is amended to read as follows:</DELETED>
<DELETED>    ``(c)(1) Amounts appropriated under this section in any 
fiscal year for programs and activities under this title shall be made 
available for obligation in the succeeding fiscal year.''.</DELETED>
<DELETED>    (c) Incentive Program for Leveraging Non-Federal 
Resources.--Section 2602(d) of such Act (42 U.S.C. 8621(d)) is 
amended--</DELETED>
        <DELETED>    (1) by striking ``(d)'' and inserting 
        ``(d)(1)'';</DELETED>
        <DELETED>    (2) 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</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
<DELETED>    ``(2) For any fiscal year for which the amount 
appropriated under subsection (b) is not less than $1,400,000,000, 
there are authorized to be appropriated to carry out section 2607A 
$50,000,000 for each of fiscal years 1999 through 2004.''.</DELETED>
<DELETED>    (d) Technical Amendment.--Section 2602(e) of such Act (42 
U.S.C. 8621(e)) is amended by striking ``subsection (g)'' and inserting 
``subsection (e) of such section''.</DELETED>

<DELETED>SEC. 302. DEFINITIONS.</DELETED>

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

<DELETED>SEC. 303. NATURAL DISASTERS AND OTHER EMERGENCIES.</DELETED>

<DELETED>    (a) Definitions.--Section 2603 of the Low-Income Home 
Energy Assistance Act of 1981 is amended--</DELETED>
        <DELETED>    (1) by redesignating paragraphs (6) through (9) as 
        paragraphs (8) through (11), respectively;</DELETED>
        <DELETED>    (2) by inserting before paragraph (8) (as 
        redesignated in paragraph (1)) the following:</DELETED>
        <DELETED>    ``(7) Natural disaster.--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.'';</DELETED>
        <DELETED>    (3) by redesignating paragraphs (1) through (5) as 
        paragraphs (2) through (6), respectively; and</DELETED>
        <DELETED>    (4) by inserting before paragraph (2) (as 
        redesignated in paragraph (3)) the following:</DELETED>
<DELETED>    ``(1) Emergency.--The term `emergency' means--</DELETED>
        <DELETED>    ``(A) a natural disaster;</DELETED>
        <DELETED>    ``(B) a significant home energy supply shortage or 
        disruption;</DELETED>
        <DELETED>    ``(C) a significant increase in the cost of home 
        energy, as determined by the Secretary;</DELETED>
        <DELETED>    ``(D) a significant increase in home energy 
        disconnections reported by a utility, a State regulatory 
        agency, or another agency with necessary data;</DELETED>
        <DELETED>    ``(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;</DELETED>
        <DELETED>    ``(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</DELETED>
        <DELETED>    ``(G) an event meeting such criteria as the 
        Secretary, in the discretion of the Secretary, may determined 
        to be appropriate.''.</DELETED>
<DELETED>    (b) Considerations.--Section 2604(g) of such Act (42 
U.S.C. 8623(g)) is amended by striking the last 2 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 emergency or disaster involved, 
the availability to the State of other resources under the program 
carried out under this title or any other program, whether a Member of 
Congress has requested that the State receive the allotment, 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.''.</DELETED>

<DELETED>SEC. 304. STATE ALLOTMENTS.</DELETED>

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

<DELETED>SEC. 305. ADMINISTRATION.</DELETED>

<DELETED>    Section 2605 of the Low-Income Home Energy Assistance Act 
of 1981 (42 U.S.C. 8624) is amended--</DELETED>
        <DELETED>    (1) in subsection (b)--</DELETED>
                <DELETED>    (A) in paragraph (9)(A), by striking ``and 
                not transferred pursuant to section 2604(f) for use 
                under another block grant'';</DELETED>
                <DELETED>    (B) in paragraph (14), by striking ``; 
                and'' and inserting a semicolon;</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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.''; and</DELETED>
        <DELETED>    (2) in subsection (c)(1)--</DELETED>
                <DELETED>    (A) in subparagraph (B), by striking 
                ``States'' and inserting ``State''; and</DELETED>
                <DELETED>    (B) in subparagraph (G)(i), by striking 
                ``has'' and inserting ``had''.</DELETED>

<DELETED>SEC. 306. PAYMENTS TO STATES.</DELETED>

<DELETED>    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--</DELETED>
        <DELETED>    (1) in the first sentence, by striking ``and not 
        transferred pursuant to section 2604(f)''; and</DELETED>
        <DELETED>    (2) in the second sentence, by striking ``but not 
        transferred by the State''.</DELETED>

<DELETED>SEC. 307. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE 
              OPTION.</DELETED>

<DELETED>    (a) Evaluation.--The Comptroller General 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).</DELETED>
<DELETED>    (b) Report.--Not later than 2 years after the date of 
enactment of this Act, the Comptroller General shall prepare and submit 
to Congress a report containing--</DELETED>
        <DELETED>    (1) the findings resulting from the evaluation 
        described in subsection (a); and</DELETED>
        <DELETED>    (2) the State evaluations described in paragraphs 
        (1) and (2) of subsection (b) of such section 2607B.</DELETED>
<DELETED>    (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''.</DELETED>
<DELETED>    (d) Technical Amendments.--Section 2607B of such Act (42 
U.S.C. 8626b) is amended--</DELETED>
        <DELETED>    (1) in subsection (e)(2)--</DELETED>
                <DELETED>    (A) by redesignating subparagraphs (F) 
                through (N) as subparagraphs (E) through (M), 
                respectively; and</DELETED>
                <DELETED>    (B) in clause (i) of subparagraph (I) (as 
                redesignated in subparagraph (A)), by striking ``on'' 
                and inserting ``of''; and</DELETED>
        <DELETED>    (2) by redesignating subsection (g) as subsection 
        (f).</DELETED>

<DELETED>SEC. 308. TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE 
              REVIEWS.</DELETED>

<DELETED>    (a) In General.--Section 2609A(a) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8628a(a)) is amended--
</DELETED>
        <DELETED>    (1) in the matter preceding paragraph (1)--
        </DELETED>
                <DELETED>    (A) by striking ``$250,000'' and inserting 
                ``$300,000''; and</DELETED>
                <DELETED>    (B) by striking ``Secretary--'' and 
                inserting ``Secretary to conduct onsite compliance 
                reviews of programs supported under this title or--''; 
                and</DELETED>
        <DELETED>    (2) in paragraph (2)--</DELETED>
                <DELETED>    (A) by inserting ``or interagency 
                agreements'' after ``cooperative arrangements''; 
                and</DELETED>
                <DELETED>    (B) by inserting ``(including Federal 
                agencies)'' after ``public agencies''.</DELETED>
<DELETED>    (b) Conforming Amendment.--The section heading of section 
2609A of such Act (42 U.S.C. 8628a) is amended to read as 
follows:</DELETED>

       <DELETED>``technical assistance, training, and compliance 
                          reviews''.</DELETED>

          <DELETED>TITLE IV--ASSETS FOR INDEPENDENCE</DELETED>

<DELETED>SEC. 401. SHORT TITLE.</DELETED>

<DELETED>    This title may be cited as the ``Assets for Independence 
Act''.</DELETED>

<DELETED>SEC. 402. FINDINGS.</DELETED>

<DELETED>    Congress makes the following findings:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Fully </DELETED>\<DELETED>1/2</DELETED>\ 
        <DELETED>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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>

<DELETED>SEC. 403. PURPOSES.</DELETED>

<DELETED>    The purposes of this title are to provide for the 
establishment of demonstration projects designed to determine--
</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (3) the extent to which an asset-based policy 
        stabilizes and improves families and the community in which 
        they live.</DELETED>

<DELETED>SEC. 404. DEFINITIONS.</DELETED>

<DELETED>    In this title:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Eligible individual.--The term ``eligible 
        individual'' means an individual who is selected to participate 
        by a qualified entity under section 409.</DELETED>
        <DELETED>    (3) Emergency withdrawal.--The term ``emergency 
        withdrawal'' means a withdrawal by an eligible individual 
        that--</DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (B) is permitted by a qualified entity on 
                a case-by-case basis; and</DELETED>
                <DELETED>    (C) is made for--</DELETED>
                        <DELETED>    (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);</DELETED>
                        <DELETED>    (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</DELETED>
                        <DELETED>    (iii) payments necessary to enable 
                        the individual to meet necessary living 
                        expenses following loss of 
                        employment.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (5) Individual development account.--</DELETED>
                <DELETED>    (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 meets the 
                following requirements:</DELETED>
                        <DELETED>    (i) No contribution will be 
                        accepted unless it is in cash or by 
                        check.</DELETED>
                        <DELETED>    (ii) The trustee is a federally 
                        insured financial institution, or a State 
                        insured financial institution if no federally 
                        insured financial institution is 
                        available.</DELETED>
                        <DELETED>    (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.</DELETED>
                        <DELETED>    (iv) The assets of the trust will 
                        not be commingled with other property except in 
                        a common trust fund or common investment 
                        fund.</DELETED>
                        <DELETED>    (v) Except as provided in clause 
                        (vi), any amount in the trust which 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.</DELETED>
                        <DELETED>    (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.</DELETED>
                <DELETED>    (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 thereof.</DELETED>
        <DELETED>    (6) Project year.--The term ``project year'' 
        means, with respect to a demonstration project, any of the 4 
        consecutive 12-month periods beginning on the date the project 
        is originally authorized to be conducted.</DELETED>
        <DELETED>    (7) Qualified entity.--</DELETED>
                <DELETED>    (A) In general.--The term ``qualified 
                entity'' means--</DELETED>
                        <DELETED>    (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</DELETED>
                        <DELETED>    (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).</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (8) Qualified expenses.--The term ``qualified 
        expenses'' means 1 or more of the following, as provided by the 
        qualified entity:</DELETED>
                <DELETED>    (A) Postsecondary educational expenses.--
                Postsecondary educational expenses paid from an 
                individual development account directly to an eligible 
                educational institution. In this 
                subparagraph:</DELETED>
                        <DELETED>    (i) Postsecondary educational 
                        expenses.--The term ``postsecondary educational 
                        expenses'' means the following:</DELETED>
                                <DELETED>    (I) Tuition and fees.--
                                Tuition and fees required for the 
                                enrollment or attendance of a student 
                                at an eligible educational 
                                institution.</DELETED>
                                <DELETED>    (II) Fees, books, 
                                supplies, and equipment.--Fees, books, 
                                supplies, and equipment required for 
                                courses of instruction at an eligible 
                                educational institution.</DELETED>
                        <DELETED>    (ii) Eligible educational 
                        institution.--The term ``eligible educational 
                        institution'' means the following:</DELETED>
                                <DELETED>    (I) Institution of higher 
                                education.--An institution described in 
                                section 481(a)(1) or 1201(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1088(a)(1) or 1141(a)), as such 
                                sections are in effect on the date of 
                                enactment of this title.</DELETED>
                                <DELETED>    (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.</DELETED>
                <DELETED>    (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:</DELETED>
                        <DELETED>    (i) Principal residence.--The term 
                        ``principal residence'' means a principal 
                        residence, the qualified acquisition costs of 
                        which do not exceed 100 percent of the average 
                        area purchase price applicable to such 
                        residence.</DELETED>
                        <DELETED>    (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.</DELETED>
                        <DELETED>    (iii) Qualified first-time 
                        homebuyer.--</DELETED>
                                <DELETED>    (I) In general.--The term 
                                ``qualified first-time homebuyer'' 
                                means an individual participating in 
                                the project (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.</DELETED>
                                <DELETED>    (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.</DELETED>
                <DELETED>    (C) Business capitalization.--Amounts paid 
                from an individual development account directly to a 
                business capitalization account which is established in 
                a federally insured financial institution and is 
                restricted to use solely for qualified business 
                capitalization expenses. In this 
                subparagraph:</DELETED>
                        <DELETED>    (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.</DELETED>
                        <DELETED>    (ii) Qualified expenditures.--The 
                        term ``qualified expenditures'' means 
                        expenditures included in a qualified plan, 
                        including capital, plant, equipment, working 
                        capital, and inventory expenses.</DELETED>
                        <DELETED>    (iii) Qualified business.--The 
                        term ``qualified business'' means any business 
                        that does not contravene any law or public 
                        policy (as determined by the 
                        Secretary).</DELETED>
                        <DELETED>    (iv) Qualified plan.--The term 
                        ``qualified plan'' means a business plan, or a 
                        plan to use a business asset purchased, which--
                        </DELETED>
                                <DELETED>    (I) is approved by a 
                                financial institution, a 
                                microenterprise development 
                                organization, or a nonprofit loan fund 
                                having demonstrated fiduciary 
                                integrity;</DELETED>
                                <DELETED>    (II) includes a 
                                description of services or goods to be 
                                sold, a marketing plan, and projected 
                                financial statements; and</DELETED>
                                <DELETED>    (III) may require the 
                                eligible individual to obtain the 
                                assistance of an experienced 
                                entrepreneurial adviser.</DELETED>
                <DELETED>    (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--</DELETED>
                        <DELETED>    (i) the individual's spouse; 
                        or</DELETED>
                        <DELETED>    (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.</DELETED>
        <DELETED>    (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 the 
        individual to the individual development account of the 
        individual during the period.</DELETED>
        <DELETED>    (10) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.</DELETED>
        <DELETED>    (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).</DELETED>

<DELETED>SEC. 405. APPLICATIONS.</DELETED>

<DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (c) Criteria.--In considering whether to approve an 
application to conduct a demonstration project under this title, the 
Secretary shall assess the following:</DELETED>
        <DELETED>    (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 qualified expenses. In making such 
        assessment, the Secretary shall consider the overall quality of 
        project activities in making any particular kind or combination 
        of qualified expenses to be an essential feature of any 
        project.</DELETED>
        <DELETED>    (2) Administrative ability.--The experience and 
        ability of the applicant to responsibly administer the 
        project.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (5) Adequacy of plan for providing information for 
        evaluation.--The adequacy of the plan for providing information 
        relevant to an evaluation of the project.</DELETED>
        <DELETED>    (6) Other factors.--Such other factors relevant to 
        the purposes of this title as the Secretary may 
        specify.</DELETED>
<DELETED>    (d) Preferences.--In considering an application to conduct 
a demonstration project under this title, the Secretary shall give 
preference to an application that--</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (2) provides a commitment of non-Federal funds 
        with a proportionately greater amount of such funds committed 
        by private sector sources; and</DELETED>
        <DELETED>    (3) targets such individuals residing within 1 or 
        more relatively well-defined neighborhoods or communities 
        (including rural communities) that experience high rates of 
        poverty or unemployment.</DELETED>
<DELETED>    (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 deems appropriate, taking into account the 
assessments required by subsections (c) and (d). The Secretary is 
encouraged to ensure that the applications that are approved involve a 
range of communities (both rural and urban) and diverse 
populations.</DELETED>
<DELETED>    (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 conduct any responsibility of the Secretary under this 
section or section 412 if--</DELETED>
        <DELETED>    (1) such entity demonstrates the ability to 
        conduct such responsibility; and</DELETED>
        <DELETED>    (2) the Secretary can demonstrate that such 
        responsibility would not be conducted by the Secretary at a 
        lower cost.</DELETED>

<DELETED>SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.</DELETED>

<DELETED>    (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 4 
project years in accordance with the approved application and the 
requirements of this title.</DELETED>
<DELETED>    (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--
</DELETED>
        <DELETED>    (1) the aggregate amount of funds committed as 
        matching contributions by non-Federal public or private sector 
        sources; or</DELETED>
        <DELETED>    (2) $1,000,000.</DELETED>

<DELETED>SEC. 407. RESERVE FUND.</DELETED>

<DELETED>    (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 which shall be maintained in accordance 
with this section.</DELETED>
<DELETED>    (b) Amounts in Reserve Fund.--</DELETED>
        <DELETED>    (1) In general.--As soon after receipt as is 
        practicable, a qualified entity shall deposit in the Reserve 
        Fund established under subsection (a)--</DELETED>
                <DELETED>    (A) all funds provided to the qualified 
                entity by any public or private source in connection 
                with the demonstration project; and</DELETED>
                <DELETED>    (B) the proceeds from any investment made 
                under subsection (c)(2).</DELETED>
        <DELETED>    (2) Uniform accounting regulations.--The Secretary 
        shall prescribe regulations with respect to accounting for 
        amounts in the Reserve Fund established under subsection 
        (a).</DELETED>
<DELETED>    (c) Use of Amounts in the Reserve Fund.--</DELETED>
        <DELETED>    (1) In general.--A qualified entity shall use the 
        amounts in the Reserve Fund established under subsection (a) 
        to--</DELETED>
                <DELETED>    (A) assist participants in the 
                demonstration project in obtaining the skills 
                (including economic literacy, budgeting, credit, and 
                counseling) and information necessary to achieve 
                economic self-sufficiency through activities requiring 
                qualified expenses;</DELETED>
                <DELETED>    (B) provide deposits in accordance with 
                section 410 for individuals selected by the qualified 
                entity to participate in the demonstration 
                project;</DELETED>
                <DELETED>    (C) administer the demonstration project; 
                and</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (2) Authority to invest funds.--</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (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).</DELETED>
        <DELETED>    (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 more than 2 percent of the amounts shall be used 
        by the qualified entity for the purposes described in paragraph 
        (1)(D). If 2 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).</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (1) the amounts in its Reserve Fund at time of the 
        termination; multiplied by</DELETED>
        <DELETED>    (2) a percentage equal to--</DELETED>
                <DELETED>    (A) the aggregate amount of grants made to 
                the qualified entity under section 406(b); divided 
                by</DELETED>
                <DELETED>    (B) the aggregate amount of all funds 
                provided to the qualified entity by all sources to 
                conduct the project.</DELETED>

<DELETED>SEC. 408. ELIGIBILITY FOR PARTICIPATION.</DELETED>

<DELETED>    (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:</DELETED>
        <DELETED>    (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).</DELETED>
        <DELETED>    (2) Net worth test.--</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (B) Determination of net worth.--For 
                purposes of subparagraph (A), the net worth of a 
                household is the amount equal to--</DELETED>
                        <DELETED>    (i) the aggregate market value of 
                        all assets that are owned in whole or in part 
                        by any member of the household; minus</DELETED>
                        <DELETED>    (ii) the obligations or debts of 
                        any member of the household.</DELETED>
                <DELETED>    (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 1 motor vehicle owned by the 
                household.</DELETED>
<DELETED>    (b) Individuals Unable To Complete the Project.--The 
Secretary shall establish such regulations as are necessary, including 
prohibiting future eligibility to participate in any other 
demonstration project conducted under this title, 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.</DELETED>

<DELETED>SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.</DELETED>

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

<DELETED>SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.</DELETED>

<DELETED>    (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--</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (2) from the grant made under section 406(b), an 
        amount equal to the matching contribution made under paragraph 
        (1); and</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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 1 individual over the course of the demonstration 
project.</DELETED>
<DELETED>    (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 
1 household over the course of the demonstration project.</DELETED>
<DELETED>    (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 1 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 such withdrawal 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.</DELETED>
<DELETED>    (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 section 410 to 
the Reserve Fund of the qualified entity, and use the funds to benefit 
other individuals participating in the demonstration project 
involved.</DELETED>

<DELETED>SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.</DELETED>

<DELETED>    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.</DELETED>

<DELETED>SEC. 412. ANNUAL PROGRESS REPORTS.</DELETED>

<DELETED>    (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:</DELETED>
        <DELETED>    (1) The number of individuals making a deposit 
        into an individual development account.</DELETED>
        <DELETED>    (2) The amounts in the Reserve Fund established 
        with respect to the project.</DELETED>
        <DELETED>    (3) The amounts deposited in the individual 
        development accounts.</DELETED>
        <DELETED>    (4) The amounts withdrawn from the individual 
        development accounts and the purposes for which such amounts 
        were withdrawn.</DELETED>
        <DELETED>    (5) The balances remaining in the individual 
        development accounts.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (7) What service configurations of the qualified 
        entity (such as 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.</DELETED>
        <DELETED>    (8) Such other information as the Secretary may 
        require to evaluate the demonstration project.</DELETED>
<DELETED>    (b) Submission of Reports.--The qualified entity shall 
submit each report required to be prepared under subsection (a) to--
</DELETED>
        <DELETED>    (1) the Secretary; and</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 413. SANCTIONS.</DELETED>

<DELETED>    (a) Authority To Terminate Demonstration Project.--If the 
Secretary determines that a qualified entity under this title is not 
operating the demonstration project in accordance with the entity's 
application 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.</DELETED>
<DELETED>    (b) Actions Required Upon Termination.--If the Secretary 
terminates the authority to conduct a demonstration project, the 
Secretary--</DELETED>
        <DELETED>    (1) shall suspend the demonstration 
        project;</DELETED>
        <DELETED>    (2) shall take control of the Reserve Fund 
        established pursuant to section 407;</DELETED>
        <DELETED>    (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, as 
        modified, if necessary to incorporate the recommendations) and 
        the requirements of this title;</DELETED>
        <DELETED>    (4) shall, if the Secretary identifies an entity 
        (or entities) described in paragraph (3)--</DELETED>
                <DELETED>    (A) authorize the entity (or entities) to 
                conduct the project in accordance with the approved 
                application (or, as modified, if necessary, to 
                incorporate the recommendations) and the requirements 
                of this title;</DELETED>
                <DELETED>    (B) transfer to the entity (or entities) 
                control over the Reserve Fund established pursuant to 
                section 407; and</DELETED>
                <DELETED>    (C) consider, for purposes of this title--
                </DELETED>
                        <DELETED>    (i) such other entity (or 
                        entities) to be the qualified entity (or 
                        entities) originally authorized to conduct the 
                        demonstration project; and</DELETED>
                        <DELETED>    (ii) the date of such 
                        authorization to be the date of the original 
                        authorization; and</DELETED>
        <DELETED>    (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--</DELETED>
                <DELETED>    (A) terminate the project; and</DELETED>
                <DELETED>    (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 
                by the source under section 405(c)(4) bears to the 
                amount provided by all such sources under that 
                section.</DELETED>

<DELETED>SEC. 414. EVALUATIONS.</DELETED>

<DELETED>    (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, individually and 
as a group, all qualified entities and sources participating in the 
demonstration projects conducted under this title.</DELETED>
<DELETED>    (b) Factors To Evaluate.--In evaluating any demonstration 
project conducted under this title, the research organization shall 
address the following factors:</DELETED>
        <DELETED>    (1) The effects of incentives and organizational 
        or institutional support on savings behavior in the 
        demonstration project.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (3) The economic, civic, psychological, and social 
        effects of asset accumulation, and how such effects vary among 
        different populations or communities.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (7) Such other factors as may be prescribed by the 
        Secretary.</DELETED>
<DELETED>    (c) Methodological Requirements.--In evaluating any 
demonstration project conducted under this title, the research 
organization shall--</DELETED>
        <DELETED>    (1) for at least 1 site, use control groups to 
        compare participants with nonparticipants;</DELETED>
        <DELETED>    (2) before, during, and after the project, obtain 
        such quantitative data as are necessary to evaluate the project 
        thoroughly; and</DELETED>
        <DELETED>    (3) develop a qualitative assessment, derived from 
        sources such as in-depth interviews, of how asset accumulation 
        affects individuals and families.</DELETED>
<DELETED>    (d) Reports by the Secretary.--</DELETED>
        <DELETED>    (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).</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (e) Evaluation Expenses.--The Secretary shall expend such 
sums as may be necessary, but not more than 2 percent of the amounts 
appropriated under section 416 for a fiscal year, to carry out the 
purposes of this section.</DELETED>

<DELETED>SEC. 415. TREATMENT OF FUNDS.</DELETED>

<DELETED>    Funds (including interest accruing) deposited in 
individual development accounts shall not be considered to be income 
for purposes of determining eligibility for, or the amount of 
assistance furnished under, any Federal or federally assisted program 
based on need.</DELETED>

<DELETED>SEC. 416. AUTHORIZATION OF APPROPRIATIONS.</DELETED>

<DELETED>    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.</DELETED>

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. References.
Sec. 103. Statement of purpose.
Sec. 104. Definitions.
Sec. 105. Financial assistance for Head Start programs.
Sec. 106. Authorization of appropriations.
Sec. 107. Allotment of funds.
Sec. 108. Designation of Head Start agencies.
Sec. 109. Quality standards.
Sec. 110. Powers and functions of Head Start agencies.
Sec. 111. Head Start transition.
Sec. 112. Submission of plans to Governors.
Sec. 113. Participation in Head Start programs.
Sec. 114. Early Head Start programs for families with infants and 
                            toddlers.
Sec. 115. Technical assistance and training.
Sec. 116. Staff qualifications and development.
Sec. 117. Research, demonstration, and evaluation.
Sec. 118. Repeal.

            TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

Sec. 201. Reauthorization.
Sec. 202. Conforming amendments.
Sec. 203. Repealers.

              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

Sec. 301. Authorization.
Sec. 302. Definitions.
Sec. 303. Natural disasters and other emergencies.
Sec. 304. State allotments.
Sec. 305. Administration.
Sec. 306. Payments to States.
Sec. 307. Residential Energy Assistance Challenge option.
Sec. 308. 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. REFERENCES.

    Except as otherwise expressly provided, wherever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Head Start Act (42 
U.S.C. 9831 et seq.).

SEC. 103. STATEMENT OF PURPOSE.

    The Head Start Act is amended by striking section 636 (42 U.S.C. 
9831) and inserting the following:

``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 to be necessary, based on family needs 
assessments.''.

SEC. 104. DEFINITIONS.

    Section 637 (42 U.S.C. 9832) is amended--
            (1) by redesignating paragraphs (5) through (14) as 
        paragraphs (7) through (16), respectively;
            (2) by redesignating paragraph (3) as paragraph (6) and 
        inserting such paragraph after paragraph (4);
            (3) by striking paragraph (4) and inserting the following:
            ``(3) 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.
            ``(4) 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.
            ``(5) The term `family literacy services' means services 
        that--
                    ``(A) are provided to participants who receive the 
                services on a voluntary basis;
                    ``(B) are of sufficient intensity, and of 
                sufficient duration, to make sustainable changes in a 
                family (such as eliminating or reducing dependence on 
                income-based public assistance); and
                    ``(C) integrate each of--
                            ``(i) interactive literacy activities 
                        between parents and their children;
                            ``(ii) training for parents on being 
                        partners with their children in learning;
                            ``(iii) parent literacy training, including 
                        training that contributes to economic self-
                        sufficiency; and
                            ``(iv) appropriate instruction for children 
                        of parents receiving the parent literacy 
                        training.'';
            (4) in paragraph (8) (as redesignated in paragraph (1)), 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.'';
            (5) by striking paragraph (14) (as redesignated in 
        paragraph (1)) and inserting the following:
            ``(14) The term `migrant or 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.''; and
            (6) by adding at the end the following:
            ``(17) The term `reliable and replicable', used with 
        respect to research, means an objective, valid, scientific 
        study that--
                    ``(A) includes a rigorously defined sample of 
                subjects, that is sufficiently large and representative 
                to support the general conclusions of the study;
                    ``(B) relies on measurements that meet established 
                standards of reliability and validity;
                    ``(C) is subjected to peer review before the 
                results of the study are published; and
                    ``(D) discovers effective strategies for enhancing 
                the development and skills of children.''.

SEC. 105. FINANCIAL ASSISTANCE FOR HEAD START PROGRAMS.

    Section 638(1) (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. 106. AUTHORIZATION OF APPROPRIATIONS.

    Section 639 (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 all that follows ``shall 
        make available--'' 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 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. 107. ALLOTMENT OF FUNDS.

    (a) Allotments.--Section 640(a) (42 U.S.C. 9835(a)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A)--
                            (i) by striking ``handicapped children'' 
                        and inserting ``children with disabilities'';
                            (ii) by striking ``migrant Head Start 
                        programs'' each place it appears and inserting 
                        ``migrant or seasonal Head Start programs''; 
                        and
                            (iii) by striking ``1994'' and inserting 
                        ``1998'';
                    (B) in subparagraph (C), by striking ``and'' at the 
                end;
                    (C) 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'';
                    (D) by inserting after subparagraph (D) the 
                following:
            ``(E) payments for research, demonstration, and evaluation 
        activities under section 649.''; and
                    (E) by adding at the end the following: ``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 seasonal and migrant 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 the children of 
                eligible migrant farmworkers before approving an 
                increase in the allocation provided for children of 
                eligible seasonal farmworkers. In carrying out this 
                subchapter, the Secretary shall continue the 
                administrative arrangement responsible for meeting the 
                needs of migrant or seasonal farmworker and Indian 
                children and shall assure that appropriate funding is 
                provided to meet such needs.'';
            (2) in paragraph (3)--
                    (A) 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 and by providing for preferences in 
                        the awarding of salary increases, in excess of 
                        cost-of-living allowances, to staff who obtain 
                        additional training or education related to 
                        their responsibilities as employees of a Head 
                        Start program or to advance their careers 
                        within the Head Start program'';
                            (iii) in clause (vi), by striking the 
                        period and inserting ``, and are physically 
                        accessible to children with disabilities and 
                        their parents.'';
                            (iv) by redesignating clause (vii) as 
                        clause (viii); and
                            (v) 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 research that is reliable 
        and replicable, as predictive of later reading achievement.'';
                    (B) in subparagraph (C)--
                            (i) in clause (i)(I)--
                                    (I) by striking ``of staff'' and 
                                inserting ``of classroom teachers and 
                                other staff''; and
                                    (II) by striking ``such staff'' and 
                                inserting ``qualified staff, including 
                                recruitment and retention pursuant to 
                                section 648A(a)'';
                            (ii) by striking clause (ii) and inserting 
                        the following:
            ``(ii) To supplement amounts provided under paragraph 
        (2)(C) to provide training to classroom teachers and other 
        staff on proven techniques that promote--
                    ``(I) language and literacy growth; and
                    ``(II) the acquisition of the English language for 
                non-English background children and families.'';
                            (iii) in clause (v), by inserting 
                        ``accessibility or'' before ``availability'';
                            (iv) by redesignating clauses (iii), (iv), 
                        (v), and (vi) as clauses (iv), (v), (vi), and 
                        (iii), respectively; and
                            (v) by inserting clause (iii) (as 
                        redesignated in clause (iv) of this 
                        subparagraph) after clause (ii); and
                    (C) in subparagraph (D)(i)(II), by striking 
                ``migrant Head Start programs'' and inserting ``migrant 
                or seasonal Head Start programs'';
            (3) in paragraph (4)(A), by striking ``1981'' and inserting 
        ``1998'';
            (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 ``, and services for homeless 
                                children; and''; 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.'';
                    (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 career 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 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 such programs 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''; and
                    (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).
    ``(B)(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) (42 U.S.C. 9835(d)) 
is amended--
            (1) by striking ``1982'' and inserting ``1999''; and
            (2) by striking ``(as defined in section 602(a) of the 
        Individuals with Disabilities Education Act)''.
    (c) Increased Appropriations.--Section 640(g) (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 ``spoken);'' 
                and inserting ``spoken, and organizations serving 
                children with disabilities);'';
                    (C) in subparagraph (D), by inserting before the 
                semicolon the following: ``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 ``; and''; 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
            (2) by adding at the end the following:
    ``(4) Notwithstanding subsection (a)(2), after taking into account 
the provisions of 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 the activities described in 
such subsection.''.
    (d) Migrant or Seasonal Head Start Programs.--Section 640(l) (42 
U.S.C. 9835(l)) is amended--
            (1) by striking ``migrant Head Start programs'' each place 
        it appears and inserting ``migrant or seasonal Head Start 
        programs''; and
            (2) by striking ``migrant families'' and inserting 
        ``migrant or seasonal farmworker families''.
    (e) Conforming Amendment.--Section 644(f)(2) (42 U.S.C. 9839(f)(2)) 
is amended by striking ``640(a)(3)(C)(v)'' and inserting 
``640(a)(3)(C)(vi)''.

SEC. 108. DESIGNATION OF HEAD START AGENCIES.

    Section 641 (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) in paragraph (2), by inserting ``(in 
                consultation with the chief executive officer of the 
                State in which the community is located)'' after ``the 
                Secretary'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``shall give priority'' and 
                        inserting ``shall, in consultation with the 
                        chief executive officer of the State, give 
                        priority'';
                            (ii) by inserting ``or for-profit'' after 
                        ``nonprofit''; and
                            (iii) by striking ``unless the Secretary 
                        makes a finding'' and all that follows and 
                        inserting the following: ``unless the Secretary 
                        determines that the agency involved fails to 
                        meet program and financial management 
                        requirements, performance standards described 
                        in section 641A(a)(1), or other requirements 
                        established by the Secretary.'';
                    (B) in paragraph (2), by striking ``shall give 
                priority'' and inserting ``shall, in consultation with 
                the chief executive officer of the State, give 
                priority''; and
                    (C) by aligning the margins of paragraphs (2) and 
                (3) with the margins of paragraph (1);
            (3) in subsection (d)--
                    (A) in the matter preceding paragraph (1), by 
                inserting after the first sentence the following new 
                sentence: ``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 delegate agency in the community and carried out a Head Start 
program that the Secretary determines has met or exceeded the 
performance standards and outcome-based performance measures described 
in section 641A.'';
                    (B) in paragraph (4)(A), by inserting ``(at home 
                and in the center involved where practicable)'' after 
                ``activities'';
                    (C) by redesignating paragraphs (7) and (8) as 
                paragraphs (9) and (10), respectively; and
                    (D) by inserting after paragraph (6) the following:
            ``(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;
            ``(8) the plan of such applicant to meet the needs of 
        children with disabilities;'';
            (4) 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
            (5) 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.''.

SEC. 109. QUALITY STANDARDS.

    (a) Quality Standards.--Section 641A(a) (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 oral language to 
                        communicate needs, wants, and thoughts;
                            ``(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) (42 U.S.C. 9836a(b)) is 
amended--
            (1) in the subsection heading, by inserting ``Outcome-
        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 striking ``(referred'' and inserting ``, and 
                the impact of the services provided through the 
                programs to children and their families (referred'';
                    (D) by striking ``performance measures'' and 
                inserting ``outcome-based performance measures''; and
                    (E) by adding at the end the following: ``The 
                performance measures shall include the performance 
                standards described in subsection (a)(1)(B)(ii).''; 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''; and
                            (ii) by striking ``and peer review'' and 
                        inserting ``, peer review, and program 
                        evaluation''; and
                    (E) in subparagraph (C), by inserting ``be 
                developed'' before ``for other''.
    (c) Monitoring.--Section 641A(c)(2) (42 U.S.C. 9836a(c)(2)) is 
amended--
            (1) in subparagraph (B), by striking ``; and'' and 
        inserting a semicolon;
            (2) in subparagraph (C)--
                    (A) by inserting ``(including children with 
                disabilities)'' after ``eligible children''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following:
                    ``(D) as part of the reviews of the programs, 
                include a review and assessment of program 
                effectiveness, as measured in accordance with the 
                outcome-based performance measures developed pursuant 
                to subsection (b) and with the performance standards 
                established pursuant to subparagraphs (A) and (B) of 
                subsection (a)(1).''.
    (d) Termination.--Section 641A(d) (42 U.S.C. 9836a(d)) is amended--
            (1) in paragraph (1)(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)''.

SEC. 110. POWERS AND FUNCTIONS OF HEAD START AGENCIES.

    Section 642 (42 U.S.C. 9837) is amended--
            (1) in subsection (a), by inserting ``or for-profit'' after 
        ``nonprofit'';
            (2) in subsection (c)--
                    (A) by inserting ``and collaborate'' after 
                ``coordinate''; and
                    (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
            (3) in subsection (d)--
                    (A) in paragraph (1)--
                            (i) by striking ``shall carry out'' and all 
                        that follows through ``maintain'' and inserting 
                        ``shall take steps to ensure, to the maximum 
                        extent possible, that children maintain'';
                            (ii) by striking ``developmental'' and 
                        inserting ``developmental and educational''; 
                        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''.

SEC. 111. 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 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.); 
        and
            ``(6) assisting families, administrators, and teachers in 
        enhancing continuity in child development between Head Start 
        services and elementary school classes.''.

SEC. 112. SUBMISSION OF PLANS TO GOVERNORS.

    The first sentence of section 643 (42 U.S.C. 9838) is amended--
            (1) by striking ``within 30 days'' and inserting ``within 
        45 days''; and
            (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 within the State)''.

SEC. 113. PARTICIPATION IN HEAD START PROGRAMS.

    (a) Regulations.--Section 645(a)(1) (42 U.S.C. 9840(a)(1)) is 
amended--
            (1) in subparagraph (B), by striking ``that programs'' and 
        inserting ``that (i) programs''; and
            (2) by striking the period at the end of subparagraph (B) 
        and inserting the following: ``, 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) (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) (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.''.

SEC. 114. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS AND 
              TODDLERS.

    Section 645A (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) by striking ``for--'' and all that follows 
                through ``programs providing'' and inserting ``for 
                programs providing'';
                    (B) by striking ``; and'' and inserting a period; 
                and
                    (C) by striking paragraph (2);
            (3) in subsection (b)(5), by inserting ``(including 
        programs for infants and toddlers with disabilities)'' after 
        ``community'';
            (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) by striking paragraph (2); and
                    (B) by redesignating paragraph (3) as paragraph 
                (2);
            (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),''; and
            (9) by striking subsection (h) and inserting the following:
    ``(g) Monitoring, Training, Technical Assistance, and Evaluation.--
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.
    ``(h) Training and Technical Assistance Account.--
            ``(1) 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.
            ``(2) Activities.--Funds in the account may be used by the 
        Secretary for purposes including--
                    ``(A) 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;
                    ``(B) 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;
                    ``(C) providing ongoing training and technical 
                assistance for recipients of grants under subsection 
                (a) and support and program planning and implementation 
                assistance for new recipients of such grants; and
                    ``(D) 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. 115. TECHNICAL ASSISTANCE AND TRAINING.

    (a) Full-Working-Day, Full Calendar Year Services.--Section 648(b) 
(42 U.S.C. 9843(b)) is amended--
            (1) in paragraph (1), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (2), by striking the period and inserting 
        ``; and''; and
            (3) 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.''.
    (b) Allocating Resources.--Section 648(c) (42 U.S.C. 9843(c)) is 
amended--
            (1) in paragraph (4)--
                    (A) by striking ``developing'' and inserting 
                ``developing and implementing''; and
                    (B) 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;'';
            (2) in paragraph (7), by striking ``; and'' and inserting a 
        semicolon;
            (3) in paragraph (8), by striking the period and inserting 
        ``; and''; and
            (4) by adding at the end the following:
            ``(9) assist Head Start agencies in--
                    ``(A) ensuring the school readiness of children; 
                and
                    ``(B) meeting the education performance standards 
                described in this subchapter.''.
    (c) Services.--Section 648(e) (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. 116. STAFF QUALIFICATIONS AND DEVELOPMENT.

    Section 648A(a) (42 U.S.C. 9843a(a)) is amended--
            (1) in paragraph (1)--
                    (A) by redesignating subparagraphs (B) through (D) 
                as clauses (ii) through (iv), respectively;
                    (B) by striking ``(A)'' and inserting ``(B)(i)''; 
                and
                    (C) by inserting before subparagraph (B) (as 
                redesignated in subparagraph (B) of this paragraph) the 
                following:
                    ``(A) demonstrated competency to perform functions 
                that include--
                            ``(i) 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 oral language, their 
                        understanding and use of increasingly complex 
                        and varied vocabulary, their appreciation of 
                        books, and their problem solving abilities;
                            ``(ii) establishing and maintaining a safe, 
                        healthy learning environment;
                            ``(iii) supporting the social and emotional 
                        development of children; and
                            ``(iv) 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; and''; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Waiver.--On request, the Secretary shall grant a 180-
        day waiver of the requirements of paragraph (1)(B), 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 
        (1)(B), with respect to an individual who--
                    ``(A) is enrolled in a program that grants any such 
                credential, certificate, or degree; and
                    ``(B) 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.''.

SEC. 117. RESEARCH, DEMONSTRATION, AND EVALUATION.

    (a) Comparative Studies.--Section 649(d) (42 U.S.C. 9844(d)) is 
amended--
            (1) in paragraph (6), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (7), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(8) 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.
The Secretary shall ensure that an appropriate entity carries out a 
study described in paragraph (8), and prepares and submits to the 
appropriate committees of Congress a report containing the results of 
the study, not later than September 30, 2002.''.
    (b) National Research.--Section 649 (42 U.S.C. 9844) is amended 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 enter 
        into a grant, 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 (in public 
                or private school), and at the end of first grade (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 
                        public or private 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) of the Head Start Act 
        (42 U.S.C. 9835(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--
                    ``(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 cognitive and social development of 
                children receiving services under this subchapter.''.

SEC. 118. REPEAL.

    The Head Start Transition Project Act (42 U.S.C. 9855 et seq.) 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 financial 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, and other assistance 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 use of innovative and effective 
                community-based approaches to attacking the causes and 
                effects of poverty and of community breakdown;
                    ``(D) the development and implementation of all 
                programs designated to serve low-income communities and 
                groups with the maximum feasible participation of 
                residents of the communities and members of the groups 
                served, so as to best stimulate and take full advantage 
                of capabilities for self-advancement and assure that 
                the programs are otherwise meaningful to the intended 
                beneficiaries of the programs; and
                    ``(E) the broadening of the resource base of 
                programs directed to the elimination of poverty.

``SEC. 673. DEFINITIONS.

    ``In this subtitle:
            ``(1) Eligible entity.--The term `eligible entity' means an 
        entity--
                    ``(A) 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
                    ``(B) that has a tripartite board or other 
                mechanism described in subsection (a) or (b), as 
                appropriate, of section 676B.
            ``(2) Poverty line.--The term `poverty line' means the 
        official poverty line defined by the Office of Management and 
        Budget based on Bureau of the Census data. 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 faith-based 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, 
        the Commonwealth of the Northern Mariana Islands, and the 
        combined Freely Associated States.

``SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated 
$625,000,000 for fiscal year 1999 and such sums as may be necessary for 
each of fiscal years 2000 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) not less than \1/2\ of 1 percent and not more than 1 
        percent for activities authorized in section 678A (relating to 
        training and technical assistance); and
            ``(3) 9 percent for carrying out section 680 (relating to 
        discretionary activities).

``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, the 
Commonwealth of the Northern Mariana Islands, and the combined Freely 
Associated States.
    ``(b) Application.--Each jurisdiction to which subsection (a) 
applies may receive a grant under this subtitle 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 
subtitle, 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 that no State shall receive less than 
\1/4\ of 1 percent of the amount appropriated under section 674(a) for 
such fiscal year.
    ``(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.--For purposes of this section, the term `State' 
does not include Guam, American Samoa, the United States Virgin 
Islands, the Commonwealth of the Northern Mariana Islands, and the 
Freely Associated States.

``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, in accordance with 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) Other Activities.--
            ``(1) Use of remainder.--If a State uses less than 100 
        percent of payments from a grant under section 675A, or the 
        State allotment under section 675B, to make grants under 
        subsection (a), the State shall use the remainder of such 
        payments (subject to paragraph (2)) for--
                    ``(A) providing training and technical assistance 
                to those entities in need of such training and 
                assistance;
                    ``(B) coordinating State-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; and
                    ``(G) 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 State allotment for 
        administrative expenses, including monitoring activities. The 
        cost of activities conducted under paragraph (1)(A) shall not 
        be considered to be administrative expenses.

``SEC. 676. APPLICATION AND PLAN.

    ``(a) Designation of Lead Agency.--
            ``(1) Designation.--The chief executive officer of a State 
        desiring to receive an allotment under this subtitle 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 designated in accordance 
        with paragraph (1) 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 allotment 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 an allotment under this subtitle, 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 an allotment under this subtitle, 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 
        allotment will be used to support activities that are designed 
        to assist low-income families and individuals, including 
        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--
                    ``(A) to remove obstacles and solve problems that 
                block the achievement of self-sufficiency;
                    ``(B) to secure and retain meaningful employment;
                    ``(C) to attain an adequate education;
                    ``(D) to make better use of available income;
                    ``(E) to obtain and maintain adequate housing and a 
                suitable living environment;
                    ``(F) to obtain emergency assistance through loans, 
                grants, or other means to meet immediate and urgent 
                individual and family needs;
                    ``(G) to achieve greater participation in the 
                affairs of the community involved; and
                    ``(H) to make more effective use of 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 
        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) based on information provided by eligible entities in 
        the State, a description of--
                    ``(A) the service delivery system, for services 
                provided or coordinated with funds made available 
                through the allotment, targeted to low-income 
                individuals and families in communities within the 
                State;
                    ``(B) how linkages will be developed to fill 
                identified gaps in the services, through the provision 
                of information, referrals, case management, and 
                followup consultations;
                    ``(C) how funds made available through the 
                allotment will be coordinated with other public and 
                private resources; and
                    ``(D) how the funds will be used to support 
                innovative community and neighborhood-based initiatives 
                related to the purposes of this subtitle;
            ``(4) an assurance that 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 will coordinate, and 
        establish linkages between, governmental and other social 
        services programs to assure the effective delivery of such 
        services to low-income individuals;
            ``(6) an assurance that the State will ensure coordination 
        between antipoverty programs in each community, 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 that received 
        funding in the previous fiscal year 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 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 faith-based organizations, charitable groups, and 
        community organizations;
            ``(10) an assurance that the State will require each 
        eligible entity to establish procedures under which a low-
        income individual, community organization, or faith-based 
        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, as a condition to receipt of funding by the 
        entity 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 2002, 
        participate in the Results Oriented Management and 
        Accountability System, any other performance measure system 
        established by the Secretary under 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) Determinations.--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 
                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 to provide services 
                under this subtitle; and
            ``(2) a termination, the term `cause' includes the material 
        failure of an eligible entity to comply with the terms of such 
        an agreement and the State plan to provide services under this 
        subtitle or the consistent failure of the entity to achieve 
        performance measures as determined by the State.
    ``(d) Procedures.--The Secretary may prescribe procedures relating 
to the implementation of this section only 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) Fiscal Year 1999.--For fiscal year 2000, to be eligible to 
receive an allotment under this subtitle, 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, 
        one or more--
                    ``(A) private nonprofit organizations 
                geographically located in the unserved area that meet 
                the requirements of this subtitle; or
                    ``(B) private nonprofit organizations (which may 
                include eligible entities) located in an area 
                contiguous to or within reasonable proximity of the 
                unserved area that are 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 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 local entities that are providing 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, and implementation 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 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) 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;
                    ``(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; and
                    ``(D)(i) each member resides in the community; and
                    ``(ii) each representative of low-income 
                individuals and families selected to represent a 
                specific neighborhood within a community under this 
                paragraph resides in the neighborhood represented by 
                the member.
    ``(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, and implementation 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, and implementation 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 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, Cooperative Agreements.--The Secretary 
shall carry out functions of this subtitle through grants, contracts, 
or cooperative agreements.

``SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.

    ``(a) Activities.--The Secretary shall use the amounts reserved in 
section 674(b)(2) for training, technical assistance, planning, 
evaluation, and data collection activities related to programs carried 
out under this subtitle.
    ``(b) 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 
        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.

``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.

``SEC. 678C. CORRECTIVE ACTION; TERMINATION AND REDUCTION OF FUNDING.

    ``(a) Determination.--If the State determines, on the basis of a 
review pursuant to subsection 678B, that an eligible entity has had a 
failure described in section 676(c), 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 60 days 
after the determination to terminate the designation or reduce the 
funding. If the review is not completed within 60 days, the 
determination of the State shall become final at the end of the 60th 
day.

``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 funds under this subtitle;
                    ``(C) prepare, at least every year (or in the case 
                of a State with a 2-year State plan, every 2 years) in 
                accordance with paragraph (2) 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.--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. 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 State allotment 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 established by the Secretary 
                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 establish 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 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 
        each of the following elements:
                    ``(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).
                    ``(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, indirect, 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) and 
        the provision of technical assistance described in paragraph 
        (1).

``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), 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. 679. OPERATIONAL RULE.

    ``(a) Faith-Based 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, faith-based 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 faith-based character.
    ``(c) Faith-Based Character and Independence.--
            ``(1) In general.--A faith-based organization that provides 
        assistance under a program described in subsection (a) shall 
        retain its faith-based character and control over the 
        definition, development, practice, and expression of its faith-
        based beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State or local government shall require a 
        faith-based 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) Tenets and teachings.--A faith-based organization that 
provides assistance under a program described in subsection (a) may 
require that employees adhere to the religious tenets and teachings of 
such organization, and such organization may require that employees 
adhere to rules forbidding the use of drugs or alcohol.
    ``(c) Limitations on Use of Funds for Certain Purposes.--No funds 
provided through a grant or contract to a faith-based 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 
        faith-based 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 enable the 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 enable the organizations involved 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 make allotments for grants 
                under subsection (a) to eligible agencies for statewide 
                programs in each State in 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, the Commonwealth of the 
                Northern Mariana Islands, or the Freely Associated 
                States.
            ``(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 $25,000,000 for fiscal year 
1999, and such sums as may be necessary for each of fiscal years 2000 
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) Applications 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 is 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. 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) 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)),''.

SEC. 203. REPEALERS.

    (a) Community Economic Development Act of 1981.--The Community 
Economic Development Act of 1981 (42 U.S.C. 9801 et seq.) is repealed.
    (b) Human Services Reauthorization Act of 1986.--Sections 407 and 
408 of the Human Services Reauthorization Act of 1986 (42 U.S.C 9812a 
and 9910b) are repealed.

              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

SEC. 301. 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--
            (1) by striking ``are authorized'' and inserting ``is 
        authorized''; and
            (2) by striking ``fiscal years 1995 through 1999'' and 
        inserting ``fiscal years 1999 through 2004''.
    (b) Program Year.--Section 2602(c) of such Act (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 such Act (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 such Act (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. 302. 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. 303. NATURAL DISASTERS AND OTHER EMERGENCIES.

    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) Natural disaster.--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) Emergency.--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.''.

SEC. 304. 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 ``the Commonwealth of the Northern 
        Mariana Islands, and the combined Freely Associated States.'';
            (2) in subsection (c)(3)(B)(ii), by striking 
        ``application'' and inserting ``applications'';
            (3) by striking subsection (f);
            (4) in subsection (g)--
                    (A) in the first sentence, by striking ``(a) 
                through (f)'' and inserting ``(a) through (d)''; and
                    (B) 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, whether a Member of 
                Congress has requested that the State receive the 
                allotment, 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.''; and
            (5) by redesignating subsection (g) as subsection (e).

SEC. 305. 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.''; and
            (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''.

SEC. 306. 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. 307. 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 such Act (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. 308. 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)--
                    (A) by striking ``$250,000'' and inserting 
                ``$300,000''; and
                    (B) by striking ``Secretary--'' and inserting 
                ``Secretary to conduct onsite compliance reviews of 
                programs supported under this title or--''; and
            (2) in paragraph (2)--
                    (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 
such Act (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 they 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 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 meets the following 
                requirements:
                            (i) No contribution will be accepted unless 
                        it 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 which 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 thereof.
            (6) Project year.--The term ``project year'' means, with 
        respect to a demonstration project, any of the 4 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 the 
        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 481(a)(1) or 1201(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1088(a)(1) or 1141(a)), as such 
                                sections are in effect on the date of 
                                enactment of this title.
                                    (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 principal 
                        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 (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 which is established in a 
                federally insured financial institution 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 the 
        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.
            (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 qualified expenses. In making such 
        assessment, the Secretary shall consider the overall quality of 
        project activities in making any particular kind or combination 
        of qualified expenses to be an essential feature of any 
        project.
            (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 by 
        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 deems appropriate, taking into account the assessments 
required by subsections (c) and (d). The Secretary is encouraged to 
ensure 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.

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 4 
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 by 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 which 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 by 
                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) 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 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 by 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 the household.
    (b) Individuals Unable To Complete the Project.--The Secretary 
shall establish such regulations as are necessary, including 
prohibiting future eligibility to participate in any other 
demonstration project conducted under this title, 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.

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 deems 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 such withdrawal 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 section 410 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 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 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 
the demonstration project in accordance with the entity's application 
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, as modified, if 
        necessary to incorporate the recommendations) 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, as modified, if necessary, to incorporate the 
                recommendations) 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 by the 
                source under section 405(c)(4) bears to the amount 
                provided by 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, individually and as a 
group, all qualified entities and sources participating in 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 such sums as 
may be necessary, but not more than 2 percent of the amounts 
appropriated under section 416 for a fiscal year, to carry out the 
purposes 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.
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