105TH CONGRESS

2D SESSION S. 2206

AN ACT

To amend the Head Start Act, the Low-Income Home Energy Assistance Act of 1981, and the Community Services Block Grant Act to reauthorize and make improvements to those Acts, to establish demonstration projects

that provide an opportunity for persons with limited

means to accumulate assets, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Community Opportuni5 ties, Accountability, and Training and Educational Serv6 ices Act of 1998’’ or the ‘‘Coats Human Services Reau7 thorization Act of 1998’’.
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1 SEC. 2. TABLE OF CONTENTS.

2 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.
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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.

1 TITLE I—HEAD START

2 PROGRAMS

3 SEC. 101. SHORT TITLE.

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

6 SEC. 102. REFERENCES.

7 Except as otherwise expressly provided, wherever in

8 this title an amendment or repeal is expressed in terms

9 of an amendment to, or repeal of, a section or other provi10 sion, the reference shall be considered to be made to a

11 section or other provision of the Head Start Act (42

12 U.S.C. 9831 et seq.).

13 SEC. 103. STATEMENT OF PURPOSE.

14 The Head Start Act is amended by striking section

15 636 (42 U.S.C. 9831) and inserting the following:

16 ‘‘SEC. 636. STATEMENT OF PURPOSE.

17 ‘‘It is the purpose of this subchapter to promote

18 school readiness by enhancing the social and cognitive de19 velopment of low-income children through the provision,

20 to low-income children and their families, of health, edu21 cational, nutritional, social, and other services that are de-
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1 termined to be necessary, based on family needs assess2 ments.’’.

3 SEC. 104. DEFINITIONS.

4 Section 637 (42 U.S.C. 9832) is amended—

5 (1) by redesignating paragraphs (5) through

6 (14) as paragraphs (7) through (16), respectively;

7 (2) by redesignating paragraph (3) as para8 graph (6) and inserting such paragraph after para9 graph (4);

10 (3) by striking paragraph (4) and inserting the

11 following:

12 ‘‘(3) The term ‘child with a disability’ means—

13 ‘‘(A) a child with a disability, as defined in

14 section 602(3) of the Individuals with Disabil15 ities Education Act; and

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

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

18 ‘‘(4) The term ‘delegate agency’ means a public,

19 private nonprofit, or for-profit organization or agen20 cy to which a grantee has delegated all or part of

21 the responsibility of the grantee for operating a

22 Head Start program.

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

24 services that—
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1 ‘‘(A) are provided to participants who re2 ceive the services on a voluntary basis;

3 ‘‘(B) are of sufficient intensity, and of suf4 ficient duration, to make sustainable changes in

5 a family (such as eliminating or reducing de6 pendence on income-based public assistance);

7 and

8 ‘‘(C) integrate each of—

9 ‘‘(i) interactive literacy activities be10 tween parents and their children;

11 ‘‘(ii) training for parents on being

12 partners with their children in learning;

13 ‘‘(iii) parent literacy training, includ14 ing training that contributes to economic

15 self-sufficiency; and

16 ‘‘(iv) appropriate instruction for chil17 dren of parents receiving the parent lit18 eracy training.’’;

19 (4) in paragraph (8) (as redesignated in para20 graph (1)), by adding at the end the following:

21 ‘‘Nothing in this paragraph shall be construed to re22 quire an agency to provide services to a child who

23 has not reached the age of compulsory school attend24 ance for more than the number of hours per day
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1 permitted by State law (including regulation) for the

2 provision of services to such a child.’’;

3 (5) by striking paragraph (14) (as redesignated

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

5 ‘‘(14) The term ‘migrant or seasonal Head

6 Start program’ means—

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

8 farmworkers, a Head Start program that serves

9 families who are engaged in agricultural labor

10 and who have changed their residence from one

11 geographic location to another in the preceding

12 2-year period; and

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

14 farmworkers, a Head Start program that serves

15 families who are engaged primarily in seasonal

16 agricultural labor and who have not changed

17 their residence to another geographic location in

18 the preceding 2-year period.’’; and

19 (6) by adding at the end the following:

20 ‘‘(17) The term ‘reliable and replicable’, used

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

22 scientific study that—

23 ‘‘(A) includes a rigorously defined sample

24 of subjects, that is sufficiently large and rep-
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1 resentative to support the general conclusions of

2 the study;

3 ‘‘(B) relies on measurements that meet es4 tablished standards of reliability and validity;

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

6 results of the study are published; and

7 ‘‘(D) discovers effective strategies for en8 hancing the development and skills of chil9 dren.’’.

10 SEC. 105. FINANCIAL ASSISTANCE FOR HEAD START PRO11 GRAMS.

12 Section 638(1) (42 U.S.C. 9833(1)) is amended—

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

14 the’’; and

15 (2) by striking the semicolon and inserting

16 ‘‘and attain school readiness;’’.

17 SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

18 Section 639 (42 U.S.C. 9834) is amended—

19 (1) in subsection (a), by striking ‘‘1995 through

20 1998’’ and inserting ‘‘1999 through 2003’’; and

21 (2) in subsection (b), by striking all that follows

22 ‘‘shall make available—’’ and inserting the following:

23 ‘‘(1) for each of fiscal years 1999 through 2003

24 to carry out activities authorized under section

25 642A, not more than $35,000,000 but not less than
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1 was made available for such activities for fiscal year

2 1998;

3 ‘‘(2) not more than $5,000,000 for each of fis4 cal years 1999 through 2003 to carry out impact

5 studies under section 649(g); and

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

7 1999, and such sums as may be necessary for each

8 of fiscal years 2000 through 2003, to carry out

9 other research, demonstration, and evaluation activi10 ties, including longitudinal studies, under section

11 649.’’.

12 SEC. 107. ALLOTMENT OF FUNDS.

13 (a) ALLOTMENTS.—Section 640(a) (42 U.S.C.

14 9835(a)) is amended—

15 (1) in paragraph (2)—

16 (A) in subparagraph (A)—

17 (i) by striking ‘‘handicapped children’’

18 and inserting ‘‘children with disabilities’’;

19 (ii) by striking ‘‘migrant Head Start

20 programs’’ each place it appears and in21 serting ‘‘migrant or seasonal Head Start

22 programs’’; and

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

24 ‘‘1998’’;
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1 (B) in subparagraph (C), by striking

2 ‘‘and’’ at the end;

3 (C) in subparagraph (D), by striking ‘‘re4 lated to the development and implementation of

5 quality improvement plans under section

6 641A(d)(2).’’ and inserting ‘‘carried out under

7 paragraph (1), (2), or (3) of section 641A(d)

8 related to correcting deficiencies and conducting

9 proceedings to terminate the designation of

10 Head Start agencies; and’’;

11 (D) by inserting after subparagraph (D)

12 the following:

13 ‘‘(E) payments for research, demonstration, and

14 evaluation activities under section 649.’’; and

15 (E) by adding at the end the following: ‘‘In

16 determining the need and demand for migrant

17 and seasonal Head Start programs, and serv18 ices provided through such programs, the Sec19 retary shall consult with appropriate entities,

20 including providers of services for seasonal and

21 migrant Head Start programs. The Secretary

22 shall, after taking into consideration the need

23 and demand for migrant and seasonal Head

24 Start programs, and such services, ensure that

25 there is an adequate level of such services for
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1 the children of eligible migrant farmworkers be2 fore approving an increase in the allocation pro3 vided for children of eligible seasonal farm4 workers. In carrying out this subchapter, the

5 Secretary shall continue the administrative ar6 rangement responsible for meeting the needs of

7 migrant or seasonal farmworker and Indian

8 children and shall assure that appropriate fund9 ing is provided to meet such needs.’’;

10 (2) in paragraph (3)—

11 (A) in subparagraph (B)—

12 (i) in clause (ii)—

13 (I) by striking ‘‘adequate quali14 fied staff’’ and inserting ‘‘adequate

15 numbers of qualified staff’’; and

16 (II) by inserting ‘‘and children

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

18 (ii) in clause (iv), by inserting before

19 the period the following: ‘‘, and to encour20 age the staff to continually improve their

21 skills and expertise by informing the staff

22 of the availability of Federal and State in23 centive and loan forgiveness programs for

24 professional development and by providing

25 for preferences in the awarding of salary
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1 increases, in excess of cost-of-living allow2 ances, to staff who obtain additional train3 ing or education related to their respon4 sibilities as employees of a Head Start pro5 gram or to advance their careers within

6 the Head Start program’’;

7 (iii) in clause (vi), by striking the pe8 riod and inserting ‘‘, and are physically ac9 cessible to children with disabilities and

10 their parents.’’;

11 (iv) by redesignating clause (vii) as

12 clause (viii); and

13 (v) by inserting after clause (vi) the

14 following:

15 ‘‘(vii) Ensuring that such programs have quali16 fied staff that can promote language skills and lit17 eracy growth of children and that can provide chil18 dren with a variety of skills that have been identi19 fied, through research that is reliable and replicable,

20 as predictive of later reading achievement.’’;

21 (B) in subparagraph (C)—

22 (i) in clause (i)(I)—

23 (I) by striking ‘‘of staff’’ and in24 serting ‘‘of classroom teachers and

25 other staff’’; and
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1 (II) by striking ‘‘such staff’’ and

2 inserting ‘‘qualified staff, including re3 cruitment and retention pursuant to

4 section 648A(a)’’;

5 (ii) by striking clause (ii) and insert6 ing the following:

7 ‘‘(ii) To supplement amounts provided under

8 paragraph (2)(C) to provide training to classroom

9 teachers and other staff on proven techniques that

10 promote—

11 ‘‘(I) language and literacy growth; and

12 ‘‘(II) the acquisition of the English lan13 guage for non-English background children and

14 families.’’;

15 (iii) in clause (v), by inserting ‘‘acces16 sibility or’’ before ‘‘availability’’;

17 (iv) by redesignating clauses (iii), (iv),

18 (v), and (vi) as clauses (iv), (v), (vi), and

19 (iii), respectively; and

20 (v) by inserting clause (iii) (as redes21 ignated in clause (iv) of this subparagraph)

22 after clause (ii); and

23 (C) in subparagraph (D)(i)(II), by striking

24 ‘‘migrant Head Start programs’’ and inserting

25 ‘‘migrant or seasonal Head Start programs’’;
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1 (3) in paragraph (4)(A), by striking ‘‘1981’’

2 and inserting ‘‘1998’’;

3 (4) in paragraph (5)—

4 (A) in subparagraph (A), by striking ‘‘sub5 paragraph (B)’’ and inserting ‘‘subparagraphs

6 (B) and (D)’’;

7 (B) in subparagraph (B), by inserting be8 fore the period the following: ‘‘and to encourage

9 Head Start agencies to collaborate with entities

10 involved in State and local planning processes

11 (including the State lead agency administering

12 the financial assistance received under the Child

13 Care and Development Block Grant Act of

14 1990 (42 U.S.C. 9858 et seq.) and the entities

15 providing resource and referral services in the

16 State) in order to better meet the needs of low17 income children and families’’;

18 (C) in subparagraph (C)—

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

20 appropriate regional office of the Adminis21 tration for Children and Families and’’ be22 fore ‘‘agencies’’;

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

24 at the end;

25 (iii) in clause (iv)—
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1 (I) by striking ‘‘education, and

2 national service activities,’’ and insert3 ing ‘‘education, and community serv4 ice activities,’’;

5 (II) by striking ‘‘and activities’’

6 and inserting ‘‘activities’’; and

7 (III) by striking the period and

8 inserting ‘‘, and services for homeless

9 children; and’’; and

10 (iv) by adding at the end the follow11 ing:

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

13 Start Association and local Head Start agencies in

14 unified planning regarding early care and education

15 services at both the State and local levels, including

16 collaborative efforts to plan for the provision of full17 working-day, full calendar year early care and edu18 cation services for children.’’;

19 (D) by redesignating subparagraph (D) as

20 subparagraph (F); and

21 (E) by inserting after subparagraph (C)

22 the following:

23 ‘‘(D) Following the award of collaboration grants de24 scribed in subparagraph (B), the Secretary shall provide,
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1 from the reserved sums, supplemental funding for collabo2 ration grants—

3 ‘‘(i) to States that (in consultation with their

4 State Head Start Associations) develop statewide,

5 regional, or local unified plans for early childhood

6 education and child care that include the participa7 tion of Head Start agencies; and

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

9 collaborative initiatives, including plans for collabo10 rative training and career development initiatives for

11 child care, early childhood education, and Head

12 Start service managers, providers, and staff.

13 ‘‘(E)(i) The Secretary shall—

14 ‘‘(I) review on an ongoing basis evidence of bar15 riers to effective collaboration between Head Start

16 programs and other Federal child care and early

17 childhood education programs and resources;

18 ‘‘(II) develop initiatives, including providing ad19 ditional training and technical assistance and mak20 ing regulatory changes, in necessary cases, to elimi21 nate barriers to the collaboration; and

22 ‘‘(III) develop a mechanism to resolve adminis23 trative and programmatic conflicts between such

24 programs that would be a barrier to service provid25 ers, parents, or children related to the provision of
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1 unified services and the consolidation of funding for

2 child care services.

3 ‘‘(ii) In the case of a collaborative activity funded

4 under this subchapter and another provision of law provid5 ing for Federal child care or early childhood education,

6 the use of equipment and nonconsumable supplies pur7 chased with funds made available under this subchapter

8 or such provision shall not be restricted to children en9 rolled or otherwise participating in the program carried

10 out under that subchapter or provision, during a period

11 in which the activity is predominantly funded under this

12 subchapter or such provision.’’; and

13 (5) in paragraph (6)—

14 (A) by inserting ‘‘(A)’’ before ‘‘From’’; and

15 (B) by striking ‘‘3 percent’’ and all that

16 follows and inserting the following: ‘‘7.5 percent

17 for fiscal year 1999, 8 percent for fiscal year

18 2000, 9 percent for fiscal year 2001, 10 percent

19 for fiscal year 2002, and 10 percent for fiscal

20 year 2003, of the amount appropriated pursu21 ant to section 639(a), except as provided in

22 subparagraph (B).

23 ‘‘(B)(i) For any fiscal year for which the Secretary

24 determines that the amount appropriated under section

25 639(a) is not sufficient to permit the Secretary to reserve
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1 the portion described in subparagraph (A) without reduc2 ing the number of children served by Head Start programs

3 or adversely affecting the quality of Head Start services,

4 relative to the number of children served and the quality

5 of the services during the preceding fiscal year, the Sec6 retary may reduce the percentage of funds required to be

7 reserved for the portion described in subparagraph (A) for

8 the fiscal year for which the determination is made, but

9 not below the percentage required to be so reserved for

10 the preceding fiscal year.

11 ‘‘(ii) For any fiscal year for which the amount appro12 priated under section 639(a) is reduced to a level that re13 quires a lower amount to be made available under this

14 subchapter to Head Start agencies and entities described

15 in section 645A, relative to the amount made available to

16 the agencies and entities for the preceding fiscal year, ad17 justed as described in paragraph (3)(A)(ii), the Secretary

18 shall proportionately reduce—

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

20 for programs carried out under section 645A; and

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

22 agencies for Head Start programs.’’.

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

24 (42 U.S.C. 9835(d)) is amended—
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1 (1) by striking ‘‘1982’’ and inserting ‘‘1999’’;

2 and

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

4 the Individuals with Disabilities Education Act)’’.

5 (c) INCREASED APPROPRIATIONS.—Section 640(g)

6 (42 U.S.C. 9835(g)) is amended—

7 (1) in paragraph (2)—

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

9 semicolon and inserting ‘‘, and the performance

10 history of the applicant in providing services

11 under other Federal programs (other than the

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

13 (B) in subparagraph (C), by striking ‘‘spo14 ken);’’ and inserting ‘‘spoken, and organizations

15 serving children with disabilities);’’;

16 (C) in subparagraph (D), by inserting be17 fore the semicolon the following: ‘‘and the ex18 tent to which, and manner in which, the appli19 cant demonstrates the ability to collaborate and

20 participate with other local community provid21 ers of child care or preschool services to provide

22 full-working-day, full calendar year services’’;

23 (D) in subparagraph (E), by striking ‘‘pro24 gram; and’’ and inserting ‘‘program or any

25 other early childhood program;’’;
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1 (E) in subparagraph (F), by striking the

2 period and inserting ‘‘; and’’; and

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

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

5 to foster partnerships with other service providers in

6 a manner that will enhance the resource capacity of

7 the applicant.’’; and

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

9 ‘‘(4) Notwithstanding subsection (a)(2), after taking

10 into account the provisions of paragraph (1), the Secretary

11 may allocate a portion of the remaining additional funds

12 under subsection (a)(2)(A) for the purpose of increasing

13 funds available for the activities described in such sub14 section.’’.

15 (d) MIGRANT OR SEASONAL HEAD START PRO16 GRAMS.—Section 640(l) (42 U.S.C. 9835(l)) is amend17 ed—

18 (1) by striking ‘‘migrant Head Start programs’’

19 each place it appears and inserting ‘‘migrant or sea20 sonal Head Start programs’’; and

21 (2) by striking ‘‘migrant families’’ and inserting

22 ‘‘migrant or seasonal farmworker families’’.

23 (e) CONFORMING AMENDMENT.—Section 644(f)(2)

24 (42 U.S.C. 9839(f)(2)) is amended by striking

25 ‘‘640(a)(3)(C)(v)’’ and inserting ‘‘640(a)(3)(C)(vi)’’.
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1 SEC. 108. DESIGNATION OF HEAD START AGENCIES.

2 Section 641 (42 U.S.C. 9836) is amended—

3 (1) in subsection (a)—

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

5 by inserting ‘‘or for-profit’’ after ‘‘nonprofit’’;

6 and

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

8 consultation with the chief executive officer of

9 the State in which the community is located)’’

10 after ‘‘the Secretary’’;

11 (2) in subsection (c)—

12 (A) in paragraph (1)—

13 (i) by striking ‘‘shall give priority’’

14 and inserting ‘‘shall, in consultation with

15 the chief executive officer of the State, give

16 priority’’;

17 (ii) by inserting ‘‘or for-profit’’ after

18 ‘‘nonprofit’’; and

19 (iii) by striking ‘‘unless the Secretary

20 makes a finding’’ and all that follows and

21 inserting the following: ‘‘unless the Sec22 retary determines that the agency involved

23 fails to meet program and financial man24 agement requirements, performance stand25 ards described in section 641A(a)(1), or
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1 other requirements established by the Sec2 retary.’’;

3 (B) in paragraph (2), by striking ‘‘shall

4 give priority’’ and inserting ‘‘shall, in consulta5 tion with the chief executive officer of the State,

6 give priority’’; and

7 (C) by aligning the margins of paragraphs

8 (2) and (3) with the margins of paragraph (1);

9 (3) in subsection (d)—

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

11 by inserting after the first sentence the follow12 ing new sentence: ‘‘In selecting from among

13 qualified applicants for designation as a Head

14 Start agency, the Secretary shall give priority

15 to any qualified agency that functioned as a

16 delegate agency in the community and carried

17 out a Head Start program that the Secretary

18 determines has met or exceeded the perform19 ance standards and outcome-based performance

20 measures described in section 641A.’’;

21 (B) in paragraph (4)(A), by inserting ‘‘(at

22 home and in the center involved where prac23 ticable)’’ after ‘‘activities’’;
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1 (C) by redesignating paragraphs (7) and

2 (8) as paragraphs (9) and (10), respectively;

3 and

4 (D) by inserting after paragraph (6) the

5 following:

6 ‘‘(7) the plan of such applicant to meet the

7 needs of non-English background children and their

8 families, including needs related to the acquisition of

9 the English language;

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

11 needs of children with disabilities;’’;

12 (4) by striking subsection (e) and inserting the

13 following:

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

15 designation under subsection (c), and there is no qualified

16 applicant in the community, the Secretary shall designate

17 a qualified agency to carry out the Head Start program

18 in the community on an interim basis until a qualified ap19 plicant from the community is so designated.’’; and

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

21 ‘‘(g) If the Secretary determines that a nonprofit

22 agency and a for-profit agency have submitted applica23 tions for designation of equivalent quality under sub24 section (d), the Secretary may give priority to the non25 profit agency.’’.
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1 SEC. 109. QUALITY STANDARDS.

2 (a) QUALITY STANDARDS.—Section 641A(a) (42

3 U.S.C. 9836a(a)) is amended—

4 (1) in paragraph (1)—

5 (A) in the matter preceding subparagraph

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

7 overall accomplishment,’’ after ‘‘regulation

8 standards’’;

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

11 (C) by redesignating subparagraphs (B)

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

13 respectively; and

14 (D) by inserting after subparagraph (A)

15 the following:

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

17 to ensure the school readiness of children par18 ticipating in a Head Start program, on comple19 tion of the Head Start program and prior to

20 entering school; and

21 ‘‘(ii) additional education performance

22 standards to ensure that the children partici23 pating in the program, at a minimum—

24 ‘‘(I) develop phonemic, print, and

25 numeracy awareness;
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1 ‘‘(II) understand and use oral lan2 guage to communicate needs, wants, and

3 thoughts;

4 ‘‘(III) understand and use increas5 ingly complex and varied vocabulary;

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

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

11 (2) by striking paragraph (2);

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

13 paragraphs (2) and (3), respectively;

14 (4) in paragraph (2) (as redesignated in para15 graph (3))—

16 (A) in subparagraph (B)(iii), by striking

17 ‘‘child’’ and inserting ‘‘early childhood edu18 cation and’’; and

19 (B) in subparagraph (C)—

20 (i) in clause (i)—

21 (I) by striking ‘‘not later than 1

22 year after the date of enactment of

23 this section,’’; and
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1 (II) by striking ‘‘section 651(b)’’

2 and all that follows and inserting

3 ‘‘this subsection; and’’; and

4 (ii) in subclause (ii), by striking ‘‘No5 vember 2, 1978’’ and inserting ‘‘the date

6 of enactment of the Coats Human Services

7 Reauthorization Act of 1998’’; and

8 (5) in paragraph (3) (as redesignated in para9 graph (3)), by striking ‘‘to an agency (referred to in

10 this subchapter as the ‘‘delegate agency’’)’’ and in11 serting ‘‘to a delegate agency’’.

12 (b) PERFORMANCE MEASURES.—Section 641A(b)

13 (42 U.S.C. 9836a(b)) is amended—

14 (1) in the subsection heading, by inserting

15 ‘‘OUTCOME-BASED’’ before ‘‘PERFORMANCE’’;

16 (2) in paragraph (1)—

17 (A) by striking ‘‘Not later than 1 year

18 after the date of enactment of this section, the’’

19 and inserting ‘‘The’’;

20 (B) by striking ‘‘child’’ and inserting

21 ‘‘early childhood education and’’;

22 (C) by striking ‘‘(referred’’ and inserting

23 ‘‘, and the impact of the services provided

24 through the programs to children and their

25 families (referred’’;
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1 (D) by striking ‘‘performance measures’’

2 and inserting ‘‘outcome-based performance

3 measures’’; and

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

5 ‘‘The performance measures shall include the

6 performance standards described in subsection

7 (a)(1)(B)(ii).’’; and

8 (3) in paragraph (2)—

9 (A) in the paragraph heading, by striking

10 ‘‘DESIGN’’ and inserting ‘‘CHARACTERISTICS’’;

11 (B) in the matter preceding subparagraph

12 (A), by striking ‘‘shall be designed—’’ and in13 serting ‘‘shall—’’;

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

15 assess’’ and inserting ‘‘be used to assess the im16 pact of’’;

17 (D) in subparagraph (B)—

18 (i) by striking ‘‘to’’; and

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

20 inserting ‘‘, peer review, and program eval21 uation’’; and

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

23 developed’’ before ‘‘for other’’.

24 (c) MONITORING.—Section 641A(c)(2) (42 U.S.C.

25 9836a(c)(2)) is amended—
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1 (1) in subparagraph (B), by striking ‘‘; and’’

2 and inserting a semicolon;

3 (2) in subparagraph (C)—

4 (A) by inserting ‘‘(including children with

5 disabilities)’’ after ‘‘eligible children’’; and

6 (B) by striking the period and inserting ‘‘;

7 and’’; and

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

9 ‘‘(D) as part of the reviews of the pro10 grams, include a review and assessment of pro11 gram effectiveness, as measured in accordance

12 with the outcome-based performance measures

13 developed pursuant to subsection (b) and with

14 the performance standards established pursuant

15 to subparagraphs (A) and (B) of subsection

16 (a)(1).’’.

17 (d) TERMINATION.—Section 641A(d) (42 U.S.C.

18 9836a(d)) is amended—

19 (1) in paragraph (1)(B), to read as follows:

20 ‘‘(B) with respect to each identified defi21 ciency, require the agency—

22 ‘‘(i) to correct the deficiency imme23 diately, if the Secretary finds that the defi24 ciency threatens the health or safety of
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1 staff or program participants or poses a

2 threat to the integrity of Federal funds;

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

4 than 90 days after the identification of the

5 deficiency if the Secretary finds, in the dis6 cretion of the Secretary, that such a 90-

7 day period is reasonable, in light of the na8 ture and magnitude of the deficiency; or

9 ‘‘(iii) in the discretion of the Sec10 retary (taking into consideration the seri11 ousness of the deficiency and the time rea12 sonably required to correct the deficiency),

13 to comply with the requirements of para14 graph (2) concerning a quality improve15 ment plan; and’’; and

16 (2) in paragraph (2)(A), in the matter preced17 ing clause (i), by striking ‘‘able to correct a defi18 ciency immediately’’ and inserting ‘‘required to cor19 rect a deficiency immediately or during a 90-day pe20 riod under clause (i) or (ii) of paragraph (1)(B)’’.

21 SEC. 110. POWERS AND FUNCTIONS OF HEAD START AGEN22 CIES.

23 Section 642 (42 U.S.C. 9837) is amended—

24 (1) in subsection (a), by inserting ‘‘or for-prof25 it’’ after ‘‘nonprofit’’;
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1 (2) in subsection (c)—

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

3 ‘‘coordinate’’; and

4 (B) by striking ‘‘section 402(g) of the So5 cial Security Act, and other’’ and inserting ‘‘the

6 State program carried out under the Child Care

7 and Development Block Grant Act of 1990 (42

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

9 education and development’’; and

10 (3) in subsection (d)—

11 (A) in paragraph (1)—

12 (i) by striking ‘‘shall carry out’’ and

13 all that follows through ‘‘maintain’’ and in14 serting ‘‘shall take steps to ensure, to the

15 maximum extent possible, that children

16 maintain’’;

17 (ii) by striking ‘‘developmental’’ and

18 inserting ‘‘developmental and educational’’;

19 and

20 (iii) by striking ‘‘to build’’ and insert21 ing ‘‘build’’;

22 (B) by striking paragraph (2);

23 (C) by redesignating paragraphs (3)

24 through (5) as paragraphs (2) through (4), re25 spectively; and
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1 (D) in subparagraph (A) of paragraph (4)

2 (as redesignated in subparagraph (C)), by strik3 ing ‘‘the Head Start Transition Project Act (42

4 U.S.C. 9855 et seq.)’’ and inserting ‘‘section

5 642A’’.

6 SEC. 111. HEAD START TRANSITION.

7 The Head Start Act (42 U.S.C. 9831 et seq.) is

8 amended by inserting after section 642 the following:

9 ‘‘SEC. 642A. HEAD START TRANSITION.

10 ‘‘Each Head Start agency shall take steps to coordi11 nate with the local educational agency serving the commu12 nity involved and with schools in which children participat13 ing in a Head Start program operated by such agency will

14 enroll following such program, including—

15 ‘‘(1) developing and implementing a systematic

16 procedure for transferring, with parental consent,

17 Head Start program records for each participating

18 child to the school in which such child will enroll;

19 ‘‘(2) establishing channels of communication be20 tween Head Start staff and their counterparts in the

21 schools (including teachers, social workers, and

22 health staff) to facilitate coordination of programs;

23 ‘‘(3) conducting meetings involving parents,

24 kindergarten or elementary school teachers, and
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1 Head Start program teachers to discuss the develop2 mental and other needs of individual children;

3 ‘‘(4) organizing and participating in joint tran4 sition-related training of school staff and Head Start

5 staff;

6 ‘‘(5) developing and implementing a family out7 reach and support program in cooperation with enti8 ties carrying out parental involvement efforts under

9 title I of the Elementary and Secondary Education

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

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

12 teachers in enhancing continuity in child develop13 ment between Head Start services and elementary

14 school classes.’’.

15 SEC. 112. SUBMISSION OF PLANS TO GOVERNORS.

16 The first sentence of section 643 (42 U.S.C. 9838)

17 is amended—

18 (1) by striking ‘‘within 30 days’’ and inserting

19 ‘‘within 45 days’’; and

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

21 ‘‘disapproved (for reasons other than failure of the

22 program to comply with State health, safety, and

23 child care laws, including regulations, applicable to

24 comparable child care programs within the State)’’.
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1 SEC. 113. PARTICIPATION IN HEAD START PROGRAMS.

2 (a) REGULATIONS.—Section 645(a)(1) (42 U.S.C.

3 9840(a)(1)) is amended—

4 (1) in subparagraph (B), by striking ‘‘that pro5 grams’’ and inserting ‘‘that (i) programs’’; and

6 (2) by striking the period at the end of sub7 paragraph (B) and inserting the following: ‘‘, and

8 (ii) a child who has been determined to meet the

9 low-income criteria and who is participating in a

10 Head Start program in a program year shall be con11 sidered to continue to meet the low-income criteria

12 through the end of the succeeding program year. In

13 determining, for purposes of this paragraph, whether

14 a child who has applied for enrollment in a Head

15 Start program meets the low-income criteria, an en16 tity may consider evidence of family income during

17 the 12 months preceding the month in which the ap18 plication is submitted, or during the calendar year

19 preceding the calendar year in which the application

20 is submitted, whichever more accurately reflects the

21 needs of the family at the time of application.’’.

22 (b) SLIDING FEE SCALE.—Section 645(b) (42 U.S.C.

23 9840(b)) is amended by adding at the end the following:

24 ‘‘A Head Start agency that provides a Head Start pro25 gram with full-working-day services in collaboration with

26 other agencies or entities may collect a family copayment
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1 to support extended day services if a copayment is re2 quired in conjunction with the collaborative. The copay3 ment charged to families receiving services through the

4 Head Start program shall not exceed the copayment

5 charged to families with similar incomes and cir6 cumstances who are receiving the services through partici7 pation in a program carried out by another agency or en8 tity.’’.

9 (c) CONTINUOUS RECRUITMENT AND ACCEPTANCE

10 OF APPLICATIONS.—Section 645(c) (42 U.S.C. 9840(c))

11 is amended by adding at the end the following: ‘‘Each

12 Head Start program operated in a community shall be

13 permitted to recruit and accept applications for enrollment

14 of children throughout the year.’’.

15 SEC. 114. EARLY HEAD START PROGRAMS FOR FAMILIES

16 WITH INFANTS AND TODDLERS.

17 Section 645A (42 U.S.C. 9840a) is amended—

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

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

20 (2) in subsection (a)—

21 (A) by striking ‘‘for—’’ and all that follows

22 through ‘‘programs providing’’ and inserting

23 ‘‘for programs providing’’;

24 (B) by striking ‘‘; and’’ and inserting a pe25 riod; and
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1 (C) by striking paragraph (2);

2 (3) in subsection (b)(5), by inserting ‘‘(includ3 ing programs for infants and toddlers with disabil4 ities)’’ after ‘‘community’’;

5 (4) in subsection (c)—

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

7 by striking ‘‘subsection (a)(1)’’ and inserting

8 ‘‘subsection (a)’’; and

9 (B) in paragraph (2), by striking ‘‘3 (or

10 under’’ and all that follows and inserting ‘‘3;’’;

11 (5) in subsection (d)—

12 (A) by striking paragraph (2); and

13 (B) by redesignating paragraph (3) as

14 paragraph (2);

15 (6) by striking subsection (e);

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

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

18 (8) in subsection (e) (as redesignated in para19 graph (7))—

20 (A) in the subsection heading, by striking

21 ‘‘OTHER’’; and

22 (B) by striking ‘‘From the balance remain23 ing of the portion specified in section 640(a)(6),

24 after making grants to the eligible entities spec-
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1 ified in subsection (e),’’ and inserting ‘‘From

2 the portion specified in section 640(a)(6),’’; and

3 (9) by striking subsection (h) and inserting the

4 following:

5 ‘‘(g) MONITORING, TRAINING, TECHNICAL ASSIST6 ANCE, AND EVALUATION.—In order to ensure the success7 ful operation of programs assisted under this section, the

8 Secretary shall use funds from the portion specified in sec9 tion 640(a)(6) to monitor the operation of such programs,

10 evaluate their effectiveness, and provide training and tech11 nical assistance tailored to the particular needs of such

12 programs.

13 ‘‘(h) TRAINING AND TECHNICAL ASSISTANCE AC14 COUNT.—

15 ‘‘(1) IN GENERAL.—Of the amount made avail16 able to carry out this section for any fiscal year, not

17 less than 5 percent and not more than 10 percent

18 shall be reserved to fund a training and technical as19 sistance account.

20 ‘‘(2) ACTIVITIES.—Funds in the account may

21 be used by the Secretary for purposes including—

22 ‘‘(A) making grants to, and entering into

23 contracts with, organizations with specialized

24 expertise relating to infants, toddlers, and fami25 lies and the capacity needed to provide direction
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1 and support to a national training and technical

2 assistance system, in order to provide such di3 rection and support;

4 ‘‘(B) providing ongoing training and tech5 nical assistance for regional and program staff

6 charged with monitoring and overseeing the ad7 ministration of the program carried out under

8 this section;

9 ‘‘(C) providing ongoing training and tech10 nical assistance for recipients of grants under

11 subsection (a) and support and program plan12 ning and implementation assistance for new re13 cipients of such grants; and

14 ‘‘(D) providing professional development

15 and personnel enhancement activities, including

16 the provision of funds to recipients of grants

17 under subsection (a) for the recruitment and re18 tention of qualified staff with an appropriate

19 level of education and experience.’’.

20 SEC. 115. TECHNICAL ASSISTANCE AND TRAINING.

21 (a) FULL-WORKING-DAY, FULL CALENDAR YEAR

22 SERVICES.—Section 648(b) (42 U.S.C. 9843(b)) is

23 amended—

24 (1) in paragraph (1), by striking ‘‘; and’’ and

25 inserting a semicolon;
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1 (2) in paragraph (2), by striking the period and

2 inserting ‘‘; and’’; and

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

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

5 to assist Head Start agencies, entities carrying out

6 other child care and early childhood programs, com7 munities, and States in collaborative efforts to pro8 vide quality full-working-day, full calendar year serv9 ices, including technical assistance related to identi10 fying and assisting in resolving barriers to collabora11 tion.’’.

12 (b) ALLOCATING RESOURCES.—Section 648(c) (42

13 U.S.C. 9843(c)) is amended—

14 (1) in paragraph (4)—

15 (A) by striking ‘‘developing’’ and inserting

16 ‘‘developing and implementing’’; and

17 (B) by striking ‘‘a longer day;’’ and insert18 ing the following: ‘‘the day, and assist the agen19 cies and programs in expediting the sharing of

20 information about innovative models for provid21 ing full-working-day, full calendar year services

22 for children;’’;

23 (2) in paragraph (7), by striking ‘‘; and’’ and

24 inserting a semicolon;
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1 (3) in paragraph (8), by striking the period and

2 inserting ‘‘; and’’; and

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

4 ‘‘(9) assist Head Start agencies in—

5 ‘‘(A) ensuring the school readiness of chil6 dren; and

7 ‘‘(B) meeting the education performance

8 standards described in this subchapter.’’.

9 (c) SERVICES.—Section 648(e) (42 U.S.C. 9843(e))

10 is amended by inserting ‘‘(including services to promote

11 the acquisition of the English language)’’ after ‘‘non12 English language background children’’.

13 SEC. 116. STAFF QUALIFICATIONS AND DEVELOPMENT.

14 Section 648A(a) (42 U.S.C. 9843a(a)) is amended—

15 (1) in paragraph (1)—

16 (A) by redesignating subparagraphs (B)

17 through (D) as clauses (ii) through (iv), respec18 tively;

19 (B) by striking ‘‘(A)’’ and inserting

20 ‘‘(B)(i)’’; and

21 (C) by inserting before subparagraph (B)

22 (as redesignated in subparagraph (B) of this

23 paragraph) the following:

24 ‘‘(A) demonstrated competency to perform

25 functions that include—
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1 ‘‘(i) planning and implementing learn2 ing experiences that advance the intellec3 tual and physical development of children,

4 including improving the readiness of chil5 dren for school by developing their literacy

6 and phonemic, print, and numeracy aware7 ness, their understanding and use of oral

8 language, their understanding and use of

9 increasingly complex and varied vocabu10 lary, their appreciation of books, and their

11 problem solving abilities;

12 ‘‘(ii) establishing and maintaining a

13 safe, healthy learning environment;

14 ‘‘(iii) supporting the social and emo15 tional development of children; and

16 ‘‘(iv) encouraging the involvement of

17 the families of the children in a Head

18 Start program and supporting the develop19 ment of relationships between children and

20 their families; and’’; and

21 (2) by striking paragraph (2) and inserting the

22 following:

23 ‘‘(2) WAIVER.—On request, the Secretary shall

24 grant a 180-day waiver of the requirements of para25 graph (1)(B), for a Head Start agency that can
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1 demonstrate that the agency has unsuccessfully at2 tempted to recruit an individual who has a creden3 tial, certificate, or degree described in paragraph

4 (1)(B), with respect to an individual who—

5 ‘‘(A) is enrolled in a program that grants

6 any such credential, certificate, or degree; and

7 ‘‘(B) will receive such credential, certifi8 cate, or degree under the terms of such pro9 gram not later than 180 days after beginning

10 employment as a teacher with such agency.’’.

11 SEC. 117. RESEARCH, DEMONSTRATION, AND EVALUATION.

12 (a) COMPARATIVE STUDIES.—Section 649(d) (42

13 U.S.C. 9844(d)) is amended—

14 (1) in paragraph (6), by striking ‘‘; and’’ and

15 inserting a semicolon;

16 (2) in paragraph (7), by striking the period and

17 inserting ‘‘; and’’; and

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

19 ‘‘(8) study the experiences of small, medium,

20 and large States with Head Start programs in order

21 to permit comparisons of children participating in

22 the programs with eligible children who did not par23 ticipate in the programs, which study—
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1 ‘‘(A) may include the use of a data set

2 that existed prior to the initiation of the study;

3 and

4 ‘‘(B) shall compare the educational

5 achievement, social adaptation, and health sta6 tus of the participating children and the eligible

7 nonparticipating children.

8 The Secretary shall ensure that an appropriate entity car9 ries out a study described in paragraph (8), and prepares

10 and submits to the appropriate committees of Congress

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

12 September 30, 2002.’’.

13 (b) NATIONAL RESEARCH.—Section 649 (42 U.S.C.

14 9844) is amended by adding at the end the following:

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

16 ‘‘(1) EXPERT PANEL.—

17 ‘‘(A) IN GENERAL.—The Secretary shall

18 appoint an independent panel consisting of ex19 perts in program evaluation and research, edu20 cation, and early childhood programs—

21 ‘‘(i) to review, and make recommenda22 tions on, the design and plan for the re23 search (whether conducted as a single as24 sessment or as a series of assessments),

25 described in paragraph (2), within 1 year
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1 after the date of enactment of the Coats

2 Human Services Reauthorization Act of

3 1998;

4 ‘‘(ii) to maintain and advise the Sec5 retary regarding the progress of the re6 search; and

7 ‘‘(iii) to comment, if the panel so de8 sires, on the interim and final research re9 ports submitted under paragraph (7).

10 ‘‘(B) TRAVEL EXPENSES.—The members

11 of the panel shall not receive compensation for

12 the performance of services for the panel, but

13 shall be allowed travel expenses, including per

14 diem in lieu of subsistence, at rates authorized

15 for employees of agencies under subchapter I of

16 chapter 57 of title 5, United States Code, while

17 away from their homes or regular places of

18 business in the performance of services for the

19 panel. Notwithstanding section 1342 of title 31,

20 United States Code, the Secretary may accept

21 the voluntary and uncompensated services of

22 members of the panel.

23 ‘‘(2) GENERAL AUTHORITY.—After reviewing

24 the recommendations of the expert panel, the Sec25 retary shall enter into a grant, contract, or coopera-
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1 tive agreement with an organization to conduct inde2 pendent research that provides a national analysis of

3 the impact of Head Start programs. The Secretary

4 shall ensure that the organization shall have exper5 tise in program evaluation, and research, education,

6 and early childhood programs.

7 ‘‘(3) DESIGNS AND TECHNIQUES.—The Sec8 retary shall ensure that the research uses rigorous

9 methodological designs and techniques (based on the

10 recommendations of the expert panel), including lon11 gitudinal designs, control groups, nationally recog12 nized standardized measures, and random selection

13 and assignment, as appropriate. The Secretary may

14 provide that the research shall be conducted as a

15 single comprehensive assessment or as a group of co16 ordinated assessments designed to provide, when

17 taken together, a national analysis of the impact of

18 Head Start programs.

19 ‘‘(4) PROGRAMS.—The Secretary shall ensure

20 that the research focuses primarily on Head Start

21 programs that operate in the 50 States, the Com22 monwealth of Puerto Rico, or the District of Colum23 bia and that do not specifically target special popu24 lations.
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1 ‘‘(5) ANALYSIS.—The Secretary shall ensure

2 that the organization conducting the research—

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

4 Start programs have impacts consistent with

5 their primary goal of increasing the social com6 petence of children, by increasing the everyday

7 effectiveness of the children in dealing with

8 their present environments and future respon9 sibilities, and increasing their school readiness;

10 ‘‘(ii) considers whether the Head Start

11 programs—

12 ‘‘(I) enhance the growth and develop13 ment of children in cognitive, emotional,

14 and physical health areas;

15 ‘‘(II) strengthen families as the pri16 mary nurturers of their children; and

17 ‘‘(III) ensure that children attain

18 school readiness; and

19 ‘‘(iii) examines—

20 ‘‘(I) the impact of the Head Start

21 programs on increasing access of children

22 to such services as educational, health, and

23 nutritional services, and linking children

24 and families to needed community services;

25 and
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1 ‘‘(II) how receipt of services described

2 in subclause (I) enriches the lives of chil3 dren and families participating in Head

4 Start programs;

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

6 programs on participants on the date the par7 ticipants leave Head Start programs, at the end

8 of kindergarten (in public or private school),

9 and at the end of first grade (in public or pri10 vate school), by examining a variety of factors,

11 including educational achievement, referrals for

12 special education or remedial course work, and

13 absenteeism;

14 ‘‘(C) makes use of random selection from

15 the population of all Head Start programs de16 scribed in paragraph (4) in selecting programs

17 for inclusion in the research; and

18 ‘‘(D) includes comparisons of individuals

19 who participate in Head Start programs with

20 control groups (including comparison groups)

21 composed of—

22 ‘‘(i) individuals who participate in

23 other public or private early childhood pro24 grams (such as public or private preschool

25 programs and day care); and
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1 ‘‘(ii) individuals who do not partici2 pate in any other early childhood program.

3 ‘‘(6) CONSIDERATION OF SOURCES OF VARI4 ATION.—In designing the research, the Secretary

5 shall, to the extent practicable, consider addressing

6 possible sources of variation in impact of Head Start

7 programs, including variations in impact related to

8 such factors as—

9 ‘‘(A) Head Start program operations;

10 ‘‘(B) Head Start program quality;

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

12 Head Start program;

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

14 Head Start program;

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

16 local educational agency or a community action

17 agency) providing services for the Head Start

18 program;

19 ‘‘(F) the number of hours and days of pro20 gram operation of the Head Start program

21 (such as whether the program is a full-working22 day, full calendar year program, a part-day pro23 gram, or a part-year program); and

24 ‘‘(G) other characteristics and features of

25 the Head Start program (such as geographic lo-
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1 cation, location in an urban or a rural service

2 area, or participant characteristics), as appro3 priate.

4 ‘‘(7) REPORTS.—

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

6 The organization shall prepare and submit to

7 the Secretary two interim reports on the re8 search. The first interim report shall describe

9 the design of the research, and the rationale for

10 the design, including a description of how po11 tential sources of variation in impact of Head

12 Start programs have been considered in design13 ing the research. The second interim report

14 shall describe the status of the research and

15 preliminary findings of the research, as appro16 priate.

17 ‘‘(B) SUBMISSION OF FINAL REPORT.—

18 The organization shall prepare and submit to

19 the Secretary a final report containing the find20 ings of the research.

21 ‘‘(C) TRANSMITTAL OF REPORTS TO CON22 GRESS.—

23 ‘‘(i) IN GENERAL.—The Secretary

24 shall transmit, to the committees described

25 in clause (ii), the first interim report by
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1 September 30, 1999, the second interim

2 report by September 30, 2001, and the

3 final report by September 30, 2003.

4 ‘‘(ii) COMMITTEES.—The committees

5 referred to in clause (i) are the Committee

6 on Education and the Workforce of the

7 House of Representatives and the Commit8 tee on Labor and Human Resources of the

9 Senate.

10 ‘‘(8) DEFINITION.—In this subsection, the term

11 ‘impact’, used with respect to a Head Start pro12 gram, means a difference in an outcome for a partic13 ipant in the program that would not have occurred

14 without the participation in the program.

15 ‘‘(h) QUALITY IMPROVEMENT STUDY.—

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

17 study regarding the use and effects of use of the

18 quality improvement funds made available under sec19 tion 640(a)(3) of the Head Start Act (42 U.S.C.

20 9835(a)(3)) since fiscal year 1991.

21 ‘‘(2) REPORT.—The Secretary shall prepare

22 and submit to Congress not later than September

23 2000 a report containing the results of the study, in24 cluding—
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1 ‘‘(A) the types of activities funded with the

2 quality improvement funds;

3 ‘‘(B) the extent to which the use of the

4 quality improvement funds has accomplished

5 the goals of section 640(a)(3)(B);

6 ‘‘(C) the effect of use of the quality im7 provement funds on teacher training, salaries,

8 benefits, recruitment, and retention; and

9 ‘‘(D) the effect of use of the quality im10 provement funds on the cognitive and social de11 velopment of children receiving services under

12 this subchapter.’’.

13 SEC. 118. REPEAL.

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

15 9855 et seq.) is repealed.

16 TITLE II—COMMUNITY SERV17 ICES BLOCK GRANT PRO18 GRAM

19 SEC. 201. REAUTHORIZATION.

20 The Community Services Block Grant Act (42 U.S.C.

21 9901 et seq.) is amended to read as follows:
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1 ‘‘Subtitle B—Community Services

2 Block Grant Program

3 ‘‘SEC. 671. SHORT TITLE.

4 ‘‘This subtitle may be cited as the ‘Community Serv5 ices Block Grant Act’.

6 ‘‘SEC. 672. PURPOSES AND GOALS.

7 ‘‘The purposes of this subtitle are—

8 ‘‘(1) to provide financial assistance to States

9 and local communities, working through a network

10 of community action agencies and other neighbor11 hood-based organizations, for the reduction of pov12 erty, the revitalization of low-income communities,

13 and the empowerment of low-income families and in14 dividuals in rural and urban areas to become fully

15 self-sufficient (particularly families who are attempt16 ing to transition off a State program carried out

17 under part A of title IV of the Social Security Act

18 (42 U.S.C. 601 et seq.)); and

19 ‘‘(2) to accomplish the goals described in para20 graph (1) through—

21 ‘‘(A) the strengthening of community capa22 bilities for planning and coordinating the use of

23 a broad range of Federal, State, and other as24 sistance related to the elimination of poverty, so
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1 that this assistance can be used in a manner re2 sponsive to local needs and conditions;

3 ‘‘(B) the organization of a range of serv4 ices related to the needs of low-income families

5 and individuals, so that these services may have

6 a measurable and potentially major impact on

7 the causes of poverty in the community and

8 may help the families and individuals to achieve

9 self-sufficiency;

10 ‘‘(C) the use of innovative and effective

11 community-based approaches to attacking the

12 causes and effects of poverty and of community

13 breakdown;

14 ‘‘(D) the development and implementation

15 of all programs designated to serve low-income

16 communities and groups with the maximum

17 feasible participation of residents of the com18 munities and members of the groups served, so

19 as to best stimulate and take full advantage of

20 capabilities for self-advancement and assure

21 that the programs are otherwise meaningful to

22 the intended beneficiaries of the programs; and

23 ‘‘(E) the broadening of the resource base

24 of programs directed to the elimination of pov25 erty.
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1 ‘‘SEC. 673. DEFINITIONS.

2 ‘‘In this subtitle:

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

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

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

7 the date of enactment of the Coats Human

8 Services Reauthorization Act of 1998) as of the

9 day before such date of enactment or is des10 ignated by the process described in section

11 676A (including an organization serving mi12 grant or seasonal farmworkers that is so de13 scribed or designated); and

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

15 mechanism described in subsection (a) or (b),

16 as appropriate, of section 676B.

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

18 means the official poverty line defined by the Office

19 of Management and Budget based on Bureau of the

20 Census data. The Secretary shall revise annually (or

21 at any shorter interval the Secretary determines to

22 be feasible and desirable) the poverty line, which

23 shall be used as a criterion of eligibility in the com24 munity services block grant program established

25 under this subtitle. The required revision shall be ac26 complished by multiplying the official poverty line by
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1 the percentage change in the Consumer Price Index

2 for All Urban Consumers during the annual or other

3 interval immediately preceding the time at which the

4 revision is made. Whenever a State determines that

5 it serves the objectives of the block grant program

6 established under this subtitle, the State may revise

7 the poverty line to not to exceed 125 percent of the

8 official poverty line otherwise applicable under this

9 paragraph.

10 ‘‘(3) PRIVATE, NONPROFIT ORGANIZATION.—

11 The term ‘private, nonprofit organization’ includes a

12 faith-based organization, to which the provisions of

13 section 679 shall apply.

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

15 the Secretary of Health and Human Services.

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

17 the several States, the District of Columbia, the

18 Commonwealth of Puerto Rico, Guam, the United

19 States Virgin Islands, American Samoa, the Com20 monwealth of the Northern Mariana Islands, and

21 the combined Freely Associated States.

22 ‘‘SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

23 ‘‘(a) IN GENERAL.—There are authorized to be ap24 propriated $625,000,000 for fiscal year 1999 and such

25 sums as may be necessary for each of fiscal years 2000
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1 through 2003 to carry out the provisions of this subtitle

2 (other than sections 681 and 682).

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

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

5 shall reserve—

‘‘(1) 1 6 ⁄2 of 1 percent for carrying out section

7 675A (relating to payments for territories);

‘‘(2) not less than 1 8 ⁄2 of 1 percent and not more

9 than 1 percent for activities authorized in section

10 678A (relating to training and technical assistance);

11 and

12 ‘‘(3) 9 percent for carrying out section 680 (re13 lating to discretionary activities).

14 ‘‘SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.

15 ‘‘The Secretary is authorized to establish a commu16 nity services block grant program and make grants

17 through the program to States to ameliorate the causes

18 of poverty in communities within the States.

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

20 ‘‘(a) APPORTIONMENT.—The Secretary shall appor21 tion the amount reserved under section 674(b)(1) for each

22 fiscal year on the basis of need among Guam, American

23 Samoa, the United States Virgin Islands, the Common24 wealth of the Northern Mariana Islands, and the combined

25 Freely Associated States.
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1 ‘‘(b) APPLICATION.—Each jurisdiction to which sub2 section (a) applies may receive a grant under this subtitle

3 for the amount apportioned under subsection (a) on sub4 mitting to the Secretary, and obtaining approval of, an

5 application, containing provisions that describe the pro6 grams for which assistance is sought under this subtitle,

7 that is prepared in accordance with, and contains the in8 formation described in, section 676.

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

10 ‘‘(a) ALLOTMENTS IN GENERAL.—The Secretary

11 shall, from the amount appropriated under section 674(a)

12 for each fiscal year that remains after the Secretary makes

13 the reservations required in section 674(b), allot to each

14 State (subject to section 677) an amount that bears the

15 same ratio to such remaining amount as the amount re16 ceived by the State for fiscal year 1981 under section 221

17 of the Economic Opportunity Act of 1964 bore to the total

18 amount received by all States for fiscal year 1981 under

19 such section, except that no State shall receive less than

1 20 ⁄4 of 1 percent of the amount appropriated under section

21 674(a) for such fiscal year.

22 ‘‘(b) ALLOTMENTS IN YEARS WITH GREATER AVAIL23 ABLE FUNDS.—

24 ‘‘(1) MINIMUM ALLOTMENTS.—Subject to para25 graphs (2) and (3), if the amount appropriated
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1 under section 674(a) for a fiscal year that remains

2 after the Secretary makes the reservations required

3 in section 674(b) exceeds $345,000,000, the Secretary shall allot to each State not less than 1 4 ⁄2 of

5 1 percent of the amount appropriated under section

6 674(a) for such fiscal year.

7 ‘‘(2) MAINTENANCE OF FISCAL YEAR 1990 LEV8 ELS.—Paragraph (1) shall not apply with respect to

9 a fiscal year if the amount allotted under subsection

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

11 amount allotted under section 674(a)(1) (as in effect

12 on September 30, 1989) to such State for fiscal year

13 1990.

14 ‘‘(3) MAXIMUM ALLOTMENTS.—The amount al15 lotted under paragraph (1) to a State for a fiscal

16 year shall be reduced, if necessary, so that the ag17 gregate amount allotted to such State under such

18 paragraph and subsection (a) does not exceed 140

19 percent of the aggregate amount allotted to such

20 State under the corresponding provisions of this sub21 title for the preceding fiscal year.

22 ‘‘(c) PAYMENTS.—The Secretary shall make grants

23 to eligible States for the allotments described in sub24 sections (a) and (b). The Secretary shall make payments
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1 for the grants in accordance with section 6503(a) of title

2 31, United States Code.

3 ‘‘(d) DEFINITION.—For purposes of this section, the

4 term ‘State’ does not include Guam, American Samoa, the

5 United States Virgin Islands, the Commonwealth of the

6 Northern Mariana Islands, and the Freely Associated

7 States.

8 ‘‘SEC. 675C. USES OF FUNDS.

9 ‘‘(a) GRANTS TO ELIGIBLE ENTITIES AND OTHER

10 ORGANIZATIONS.—

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

12 the funds made available to a State under section

13 675A or 675B shall be used by the State to make

14 grants for the purposes described in section 672 to

15 eligible entities.

16 ‘‘(2) OBLIGATIONAL AUTHORITY.—Funds dis17 tributed to eligible entities through grants made in

18 accordance with paragraph (1) for a fiscal year shall

19 be available for obligation during that fiscal year

20 and the succeeding fiscal year, in accordance with

21 paragraph (3).

22 ‘‘(3) RECAPTURE AND REDISTRIBUTION OF UN23 OBLIGATED FUNDS.—

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

25 2000, a State may recapture and redistribute
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1 funds distributed to an eligible entity through a

2 grant made under paragraph (1) that are unob3 ligated at the end of a fiscal year if such unobli4 gated funds exceed 20 percent of the amount so

5 distributed to such eligible entity for such fiscal

6 year.

7 ‘‘(B) REDISTRIBUTION.—In redistributing

8 funds recaptured in accordance with this para9 graph, States shall redistribute such funds to

10 an eligible entity, or require the original recipi11 ent of the funds to redistribute the funds to a

12 private, nonprofit organization, located within

13 the community served by the original recipient

14 of the funds, for activities consistent with the

15 purposes of this subtitle.

16 ‘‘(b) OTHER ACTIVITIES.—

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

18 than 100 percent of payments from a grant under

19 section 675A, or the State allotment under section

20 675B, to make grants under subsection (a), the

21 State shall use the remainder of such payments

22 (subject to paragraph (2)) for—

23 ‘‘(A) providing training and technical as24 sistance to those entities in need of such train25 ing and assistance;
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1 ‘‘(B) coordinating State-operated programs

2 and services targeted to low-income children

3 and families with services provided by eligible

4 entities and other organizations funded under

5 this subtitle, including detailing appropriate

6 employees of State or local agencies to entities

7 funded under this subtitle, to ensure increased

8 access to services provided by such State or

9 local agencies;

10 ‘‘(C) supporting statewide coordination and

11 communication among eligible entities;

12 ‘‘(D) analyzing the distribution of funds

13 made available under this subtitle within the

14 State to determine if such funds have been tar15 geted to the areas of greatest need;

16 ‘‘(E) supporting asset-building programs

17 for low-income individuals, such as programs

18 supporting individual development accounts;

19 ‘‘(F) supporting innovative programs and

20 activities conducted by community action agen21 cies or other neighborhood-based organizations

22 to eliminate poverty, promote self-sufficiency,

23 and promote community revitalization; and

24 ‘‘(G) supporting other activities, consistent

25 with the purposes of this subtitle.
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1 ‘‘(2) ADMINISTRATIVE CAP.—No State may

2 spend more than the greater of $55,000, or 5 per3 cent, of the State allotment for administrative ex4 penses, including monitoring activities. The cost of

5 activities conducted under paragraph (1)(A) shall

6 not be considered to be administrative expenses.

7 ‘‘SEC. 676. APPLICATION AND PLAN.

8 ‘‘(a) DESIGNATION OF LEAD AGENCY.—

9 ‘‘(1) DESIGNATION.—The chief executive officer

10 of a State desiring to receive an allotment under this

11 subtitle shall designate, in an application submitted

12 to the Secretary under subsection (b), an appro13 priate State agency that complies with the require14 ments of paragraph (2) to act as a lead agency for

15 purposes of carrying out State activities under this

16 subtitle.

17 ‘‘(2) DUTIES.—The lead agency designated in

18 accordance with paragraph (1) shall—

19 ‘‘(A) develop the State plan to be submit20 ted to the Secretary under subsection (b);

21 ‘‘(B) in conjunction with the development

22 of the State plan as required under subsection

23 (b), hold at least one hearing in the State with

24 sufficient time, and statewide distribution of no25 tice of such hearing, to provide to the public an
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1 opportunity to comment on the proposed use

2 and distribution of funds to be provided

3 through the allotment for the period covered by

4 the State plan; and

5 ‘‘(C) conduct reviews of eligible entities

6 under section 678B.

7 ‘‘(3) LEGISLATIVE HEARING.—In order to be

8 eligible to receive an allotment under this subtitle,

9 the State shall hold at least one legislative hearing

10 every 3 years in conjunction with the development of

11 the State plan.

12 ‘‘(b) STATE APPLICATION AND PLAN.—Beginning

13 with fiscal year 2000, to be eligible to receive an allotment

14 under this subtitle, a State shall prepare and submit to

15 the Secretary an application and State plan covering a pe16 riod of not less than 1 fiscal year and not more than 2

17 fiscal years. The plan shall be submitted not later than

18 30 days prior to the beginning of the first fiscal year cov19 ered by the plan, and shall contain such information as

20 the Secretary shall require, including—

21 ‘‘(1) an assurance that funds made available

22 through the allotment will be used to support activi23 ties that are designed to assist low-income families

24 and individuals, including homeless families and in25 dividuals, migrant or seasonal farmworkers, and el-
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1 derly low-income individuals and families, and a de2 scription of how such activities will enable the fami3 lies and individuals—

4 ‘‘(A) to remove obstacles and solve prob5 lems that block the achievement of self-suffi6 ciency;

7 ‘‘(B) to secure and retain meaningful em8 ployment;

9 ‘‘(C) to attain an adequate education;

10 ‘‘(D) to make better use of available in11 come;

12 ‘‘(E) to obtain and maintain adequate

13 housing and a suitable living environment;

14 ‘‘(F) to obtain emergency assistance

15 through loans, grants, or other means to meet

16 immediate and urgent individual and family

17 needs;

18 ‘‘(G) to achieve greater participation in the

19 affairs of the community involved; and

20 ‘‘(H) to make more effective use of other

21 programs related to the purposes of this sub22 title (including State welfare reform efforts);

23 ‘‘(2) a description of how the State intends to

24 use discretionary funds made available from the re25 mainder of the allotment described in section
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1 675C(b) in accordance with this subtitle, including a

2 description of how the State will support innovative

3 community and neighborhood-based initiatives relat4 ed to the purposes of this subtitle;

5 ‘‘(3) based on information provided by eligible

6 entities in the State, a description of—

7 ‘‘(A) the service delivery system, for serv8 ices provided or coordinated with funds made

9 available through the allotment, targeted to

10 low-income individuals and families in commu11 nities within the State;

12 ‘‘(B) how linkages will be developed to fill

13 identified gaps in the services, through the pro14 vision of information, referrals, case manage15 ment, and followup consultations;

16 ‘‘(C) how funds made available through the

17 allotment will be coordinated with other public

18 and private resources; and

19 ‘‘(D) how the funds will be used to support

20 innovative community and neighborhood-based

21 initiatives related to the purposes of this sub22 title;

23 ‘‘(4) an assurance that the State will provide,

24 on an emergency basis, for the provision of such

25 supplies and services, nutritious foods, and related
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1 services, as may be necessary to counteract condi2 tions of starvation and malnutrition among low-in3 come individuals;

4 ‘‘(5) an assurance that the State will coordi5 nate, and establish linkages between, governmental

6 and other social services programs to assure the ef7 fective delivery of such services to low-income indi8 viduals;

9 ‘‘(6) an assurance that the State will ensure co10 ordination between antipoverty programs in each

11 community, and ensure, where appropriate, that

12 emergency energy crisis intervention programs under

13 title XXVI (relating to low-income home energy as14 sistance) are conducted in such community;

15 ‘‘(7) an assurance that the State will permit

16 and cooperate with Federal investigations under17 taken in accordance with section 678D;

18 ‘‘(8) an assurance that any eligible entity that

19 received funding in the previous fiscal year under

20 this subtitle will not have its funding terminated

21 under this subtitle, or reduced below the propor22 tional share of funding the entity received in the

23 previous fiscal year unless, after providing notice

24 and an opportunity for a hearing on the record, the

25 State determines that cause exists for such termi-
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1 nation or such reduction, subject to review by the

2 Secretary as provided in section 678C(b);

3 ‘‘(9) an assurance that the State will, to the

4 maximum extent possible, coordinate programs with

5 and form partnerships with other organizations serv6 ing low-income residents of the communities and

7 members of the groups served by the State, includ8 ing faith-based organizations, charitable groups, and

9 community organizations;

10 ‘‘(10) an assurance that the State will require

11 each eligible entity to establish procedures under

12 which a low-income individual, community organiza13 tion, or faith-based organization, or representative of

14 low-income individuals that considers its organiza15 tion, or low-income individuals, to be inadequately

16 represented on the board (or other mechanism) of

17 the eligible entity to petition for adequate represen18 tation;

19 ‘‘(11) an assurance that the State will secure

20 from each eligible entity, as a condition to receipt of

21 funding by the entity under this subtitle for a pro22 gram, a community action plan (which shall be sub23 mitted to the Secretary, at the request of the Sec24 retary, with the State plan) that includes a commu25 nity-needs assessment for the community served,
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1 which may be coordinated with community-needs as2 sessments conducted for other programs;

3 ‘‘(12) an assurance that the State and all eligi4 ble entities in the State will, not later than fiscal

5 year 2002, participate in the Results Oriented Man6 agement and Accountability System, any other per7 formance measure system established by the Sec8 retary under section 678E(b), or an alternative sys9 tem for measuring performance and results that

10 meets the requirements of that section, and a de11 scription of outcome measures to be used to measure

12 eligible entity performance in promoting self-suffi13 ciency, family stability, and community revitaliza14 tion; and

15 ‘‘(13) information describing how the State will

16 carry out the assurances described in this sub17 section.

18 ‘‘(c) DETERMINATIONS.—For purposes of making a

19 determination in accordance with subsection (b)(8) with

20 respect to—

21 ‘‘(1) a funding reduction, the term ‘cause’ in22 cludes—

23 ‘‘(A) a statewide redistribution of funds

24 provided under this subtitle to respond to—
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1 ‘‘(i) the results of the most recently

2 available census or other appropriate data;

3 ‘‘(ii) the designation of a new eligible

4 entity; or

5 ‘‘(iii) severe economic dislocation; or

6 ‘‘(B) the failure of an eligible entity to

7 comply with the terms of an agreement to pro8 vide services under this subtitle; and

9 ‘‘(2) a termination, the term ‘cause’ includes

10 the material failure of an eligible entity to comply

11 with the terms of such an agreement and the State

12 plan to provide services under this subtitle or the

13 consistent failure of the entity to achieve perform14 ance measures as determined by the State.

15 ‘‘(d) PROCEDURES.—The Secretary may prescribe

16 procedures relating to the implementation of this section

17 only for the purpose of assessing the effectiveness of eligi18 ble entities in carrying out the purposes of this subtitle.

19 ‘‘(e) REVISIONS AND INSPECTION.—

20 ‘‘(1) REVISIONS.—The chief executive officer of

21 each State may revise any plan prepared under this

22 section and shall submit the revised plan to the Sec23 retary.

24 ‘‘(2) PUBLIC INSPECTION.—Each plan or re25 vised plan prepared under this section shall be made
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1 available for public inspection within the State in

2 such a manner as will facilitate review of, and com3 ment on, the plan.

4 ‘‘(f) FISCAL YEAR 1999.—For fiscal year 2000, to

5 be eligible to receive an allotment under this subtitle, a

6 State shall prepare and submit to the Secretary an appli7 cation and State plan in accordance with the provisions

8 of this subtitle (as in effect on the day before the date

9 of enactment of the Coats Human Services Reauthoriza10 tion Act of 1998), rather than the provisions of sub11 sections (a) through (c) relating to applications and plans.

12 ‘‘SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGI13 BLE ENTITIES IN UNSERVED AREAS.

14 ‘‘(a) QUALIFIED ORGANIZATION IN OR NEAR

15 AREA.—

16 ‘‘(1) IN GENERAL.—If any geographic area of a

17 State is not, or ceases to be, served by an eligible

18 entity under this subtitle, and if the chief executive

19 officer of the State decides to serve such area, the

20 chief executive officer may solicit applications from,

21 and designate as an eligible entity, one or more—

22 ‘‘(A) private nonprofit organizations geo23 graphically located in the unserved area that

24 meet the requirements of this subtitle; or
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1 ‘‘(B) private nonprofit organizations

2 (which may include eligible entities) located in

3 an area contiguous to or within reasonable

4 proximity of the unserved area that are already

5 providing related services in the unserved area.

6 ‘‘(2) REQUIREMENT.—In order to serve as the

7 eligible entity for the area, an entity described in

8 paragraph (1)(B) shall agree to add additional mem9 bers to the board of the entity to ensure adequate

10 representation—

11 ‘‘(A) in each of the three required cat12 egories described in subparagraphs (A), (B),

13 and (C) of section 676B(a)(2), by members

14 that reside in the community comprised by the

15 unserved area; and

16 ‘‘(B) in the category described in section

17 676B(a)(2)(B), by members that reside in the

18 neighborhood served.

19 ‘‘(b) SPECIAL CONSIDERATION.—In designating an

20 eligible entity under subsection (a), the chief executive of21 ficer shall grant the designation to an organization of

22 demonstrated effectiveness in meeting the goals and pur23 poses of this subtitle and may give priority, in granting

24 the designation, to local entities that are providing services
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1 in the unserved area, consistent with the needs identified

2 by a community-needs assessment.

3 ‘‘(c) NO QUALIFIED ORGANIZATION IN OR NEAR

4 AREA.—If no private, nonprofit organization is identified

5 or determined to be qualified under subsection (a) to serve

6 the unserved area as an eligible entity the chief executive

7 officer may designate an appropriate political subdivision

8 of the State to serve as an eligible entity for the area.

9 In order to serve as the eligible entity for that area, the

10 political subdivision shall have a board or other mecha11 nism as required in section 676B(b).

12 ‘‘SEC. 676B. TRIPARTITE BOARDS.

13 ‘‘(a) PRIVATE NONPROFIT ENTITIES.—

14 ‘‘(1) BOARD.—In order for a private, nonprofit

15 entity to be considered to be an eligible entity for

16 purposes of section 673(1), the entity shall admin17 ister the community services block grant program

18 through a tripartite board described in paragraph

19 (2) that fully participates in the development, plan20 ning, and implementation of the program to serve

21 low-income communities.

22 ‘‘(2) SELECTION AND COMPOSITION OF

23 BOARD.—The members of the board referred to in

24 paragraph (1) shall be selected by the entity and the

25 board shall be composed so as to assure that—
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‘‘(A) 1 1 ⁄3 of the members of the board are

2 elected public officials, holding office on the

3 date of selection, or their representatives, ex4 cept that if the number of elected officials rea5 sonably available and willing to serve on the

board is less than 1 6 ⁄3 of the membership of the

7 board, membership on the board of appointive

8 public officials or their representatives may be

counted in meeting such 1 9 ⁄3 requirement;

‘‘(B) not fewer than 1 10 ⁄3 of the members are

11 persons chosen in accordance with democratic

12 selection procedures adequate to assure that

13 these members are representative of low-income

14 individuals and families in the neighborhood

15 served;

16 ‘‘(C) the remainder of the members are of17 ficials or members of business, industry, labor,

18 religious, law enforcement, education, or other

19 major groups and interests in the community

20 served; and

21 ‘‘(D)(i) each member resides in the com22 munity; and

23 ‘‘(ii) each representative of low-income in24 dividuals and families selected to represent a

25 specific neighborhood within a community
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1 under this paragraph resides in the neighbor2 hood represented by the member.

3 ‘‘(b) PUBLIC ORGANIZATIONS.—In order for a public

4 organization to be considered to be an eligible entity for

5 purposes of section 673(1), the entity shall administer the

6 community services block grant program through—

7 ‘‘(1) a tripartite board, which shall have mem8 bers selected by the organization and shall be composed so as to assure that not fewer than 1 9 ⁄3 of the

10 members are persons chosen in accordance with

11 democratic selection procedures adequate to assure

12 that these members—

13 ‘‘(A) are representative of low-income indi14 viduals and families in the neighborhood served;

15 ‘‘(B) reside in the neighborhood served;

16 and

17 ‘‘(C) are able to participate actively in the

18 development, planning, and implementation of

19 programs funded under this subtitle; or

20 ‘‘(2) another mechanism specified by the State

21 to assure decisionmaking and participation by low22 income individuals in the development, planning, and

23 implementation of programs funded under this sub24 title.
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1 ‘‘SEC. 677. PAYMENTS TO INDIAN TRIBES.

2 ‘‘(a) RESERVATION.—If, with respect to any State,

3 the Secretary—

4 ‘‘(1) receives a request from the governing body

5 of an Indian tribe or tribal organization within the

6 State that assistance under this subtitle be made di7 rectly to such tribe or organization; and

8 ‘‘(2) determines that the members of such tribe

9 or tribal organization would be better served by

10 means of grants made directly to provide benefits

11 under this subtitle,

12 the Secretary shall reserve from amounts that would oth13 erwise be allotted to such State under section 675B for

14 the fiscal year the amount determined under subsection

15 (b).

16 ‘‘(b) DETERMINATION OF RESERVED AMOUNT.—The

17 Secretary shall reserve for the purpose of subsection (a)

18 from amounts that would otherwise be allotted to such

19 State, not less than 100 percent of an amount that bears

20 the same ratio to the State allotment for the fiscal year

21 involved as the population of all eligible Indians for whom

22 a determination has been made under subsection (a) bears

23 to the population of all individuals eligible for assistance

24 under this subtitle in such State.

25 ‘‘(c) AWARDS.—The sums reserved by the Secretary

26 on the basis of a determination made under subsection (a)
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1 shall be made available by grant to the Indian tribe or

2 tribal organization serving the individuals for whom such

3 a determination has been made.

4 ‘‘(d) PLAN.—In order for an Indian tribe or tribal

5 organization to be eligible for a grant award for a fiscal

6 year under this section, the tribe or organization shall sub7 mit to the Secretary a plan for such fiscal year that meets

8 such criteria as the Secretary may prescribe by regulation.

9 ‘‘(e) DEFINITIONS.—In this section:

10 ‘‘(1) INDIAN TRIBE; TRIBAL ORGANIZATION.—

11 The terms ‘Indian tribe’ and ‘tribal organization’

12 mean a tribe, band, or other organized group recog13 nized in the State in which the tribe, band, or group

14 resides, or considered by the Secretary of the Inte15 rior, to be an Indian tribe or an Indian organization

16 for any purpose.

17 ‘‘(2) INDIAN.—The term ‘Indian’ means a

18 member of an Indian tribe or of a tribal organiza19 tion.

20 ‘‘SEC. 678. OFFICE OF COMMUNITY SERVICES.

21 ‘‘(a) OFFICE.—The Secretary shall carry out the

22 functions of this subtitle through an Office of Community

23 Services, which shall be established in the Department of

24 Health and Human Services. The Office shall be headed

25 by a Director.
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1 ‘‘(b) GRANTS, CONTRACTS, COOPERATIVE AGREE2 MENTS.—The Secretary shall carry out functions of this

3 subtitle through grants, contracts, or cooperative agree4 ments.

5 ‘‘SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.

6 ‘‘(a) ACTIVITIES.—The Secretary shall use the

7 amounts reserved in section 674(b)(2) for training, tech8 nical assistance, planning, evaluation, and data collection

9 activities related to programs carried out under this sub10 title.

11 ‘‘(b) PROCESS.—The process for determining the

12 training and technical assistance to be carried out under

13 this section shall—

14 ‘‘(1) ensure that the needs of eligible entities

15 and programs relating to improving program quality,

16 including financial management practices, are ad17 dressed to the maximum extent feasible; and

18 ‘‘(2) incorporate mechanisms to ensure respon19 siveness to local needs, including an ongoing proce20 dure for obtaining input from the national and State

21 networks of eligible entities.

22 ‘‘SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.

23 ‘‘(a) IN GENERAL.—In order to determine whether

24 eligible entities meet the performance goals, administra25 tive standards, financial management requirements, and
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1 other requirements of a State, the State shall conduct the

2 following reviews of eligible entities:

3 ‘‘(1) A full onsite review of each such entity at

4 least once during each 3-year period.

5 ‘‘(2) An onsite review of each newly designated

6 entity immediately after the completion of the first

7 year in which such entity receives funds through the

8 community services block grant program.

9 ‘‘(3) Followup reviews including prompt return

10 visits to eligible entities, and their programs, that

11 fail to meet the goals, standards, and requirements

12 established by the State.

13 ‘‘(4) Other reviews as appropriate, including re14 views of entities with programs that have had other

15 Federal, State, or local grants (other than assistance

16 provided under this subtitle) terminated for cause.

17 ‘‘(b) REQUESTS.—The State may request training

18 and technical assistance from the Secretary as needed to

19 comply with the requirements of this section.

20 ‘‘SEC. 678C. CORRECTIVE ACTION; TERMINATION AND RE21 DUCTION OF FUNDING.

22 ‘‘(a) DETERMINATION.—If the State determines, on

23 the basis of a review pursuant to subsection 678B, that

24 an eligible entity has had a failure described in section

25 676(c), the State shall—
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1 ‘‘(1) inform the entity of the deficiency to be

2 corrected;

3 ‘‘(2) require the entity to correct the deficiency;

4 ‘‘(3)(A) offer training and technical assistance,

5 if appropriate, to help correct the deficiency, and

6 prepare and submit to the Secretary a report de7 scribing the training and technical assistance of8 fered; or

9 ‘‘(B) if the State determines that such training

10 and technical assistance are not appropriate, prepare

11 and submit to the Secretary a report stating the rea12 sons for the determination;

13 ‘‘(4)(A) at the discretion of the State (taking

14 into account the seriousness of the deficiency and

15 the time reasonably required to correct the defi16 ciency), allow the entity to develop and implement,

17 within 60 days after being informed of the defi18 ciency, a quality improvement plan to correct such

19 deficiency within a reasonable period of time, as de20 termined by the State; and

21 ‘‘(B) not later than 30 days after receiving

22 from an eligible entity a proposed quality improve23 ment plan pursuant to subparagraph (A), either ap24 prove such proposed plan or specify the reasons why

25 the proposed plan cannot be approved; and
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1 ‘‘(5) after providing adequate notice and an op2 portunity for a hearing, initiate proceedings to ter3 minate the designation of or reduce the funding

4 under this subtitle of the eligible entity unless the

5 entity corrects the deficiency.

6 ‘‘(b) REVIEW.—A determination to terminate the

7 designation or reduce the funding of an eligible entity is

8 reviewable by the Secretary. The Secretary shall, upon re9 quest, review such a determination. The review shall be

10 completed not later than 60 days after the determination

11 to terminate the designation or reduce the funding. If the

12 review is not completed within 60 days, the determination

13 of the State shall become final at the end of the 60th day.

14 ‘‘SEC. 678D. FISCAL CONTROLS, AUDITS, AND WITHHOLD15 ING.

16 ‘‘(a) FISCAL CONTROLS, PROCEDURES, AUDITS, AND

17 INSPECTIONS.—

18 ‘‘(1) IN GENERAL.—A State that receives funds

19 under this subtitle shall—

20 ‘‘(A) establish fiscal control and fund ac21 counting procedures necessary to assure the

22 proper disbursal of and accounting for Federal

23 funds paid to the State under this subtitle, in24 cluding procedures for monitoring the funds

25 provided under this subtitle;
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1 ‘‘(B) ensure that cost and accounting

2 standards of the Office of Management and

3 Budget apply to a recipient of funds under this

4 subtitle;

5 ‘‘(C) prepare, at least every year (or in the

6 case of a State with a 2-year State plan, every

7 2 years) in accordance with paragraph (2) an

8 audit of the expenditures of the State of

9 amounts received under this subtitle and

10 amounts transferred to carry out the purposes

11 of this subtitle; and

12 ‘‘(D) make appropriate books, documents,

13 papers, and records available to the Secretary

14 and the Comptroller General of the United

15 States, or any of their duly authorized rep16 resentatives, for examination, copying, or me17 chanical reproduction on or off the premises of

18 the appropriate entity upon a reasonable re19 quest for the items.

20 ‘‘(2) AUDITS.—Each audit required by sub21 section (a)(1)(C) shall be conducted by an entity

22 independent of any agency administering activities

23 or services carried out under this subtitle and shall

24 be conducted in accordance with generally accepted

25 accounting principles. Within 30 days after the com-
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1 pletion of each such audit in a State, the chief exec2 utive officer of the State shall submit a copy of such

3 audit to any eligible entity that was the subject of

4 the audit at no charge, to the legislature of the

5 State, and to the Secretary.

6 ‘‘(3) REPAYMENTS.—The State shall repay to

7 the United States amounts found not to have been

8 expended in accordance with this subtitle or the Sec9 retary may offset such amounts against any other

10 amount to which the State is or may become entitled

11 under this subtitle.

12 ‘‘(b) WITHHOLDING.—

13 ‘‘(1) IN GENERAL.—The Secretary shall, after

14 providing adequate notice and an opportunity for a

15 hearing conducted within the affected State, with16 hold funds from any State that does not utilize the

17 State allotment in accordance with the provisions of

18 this subtitle, including the assurances such State

19 provided under section 676.

20 ‘‘(2) RESPONSE TO COMPLAINTS.—The Sec21 retary shall respond in an expeditious and speedy

22 manner to complaints of a substantial or serious na23 ture that a State has failed to use funds in accord24 ance with the provisions of this subtitle, including

25 the assurances provided by the State under section
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1 676. For purposes of this paragraph, a complaint of

2 a failure to meet any one of the assurances provided

3 under section 676 that constitutes disregarding that

4 assurance shall be considered to be a complaint of

5 a serious nature.

6 ‘‘(3) INVESTIGATIONS.—Whenever the Sec7 retary determines that there is a pattern of com8 plaints of failures described in paragraph (2) from

9 any State in any fiscal year, the Secretary shall con10 duct an investigation of the use of funds received

11 under this subtitle by such State in order to ensure

12 compliance with the provisions of this subtitle.

13 ‘‘SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIRE14 MENTS.

15 ‘‘(a) STATE ACCOUNTABILITY AND REPORTING RE16 QUIREMENTS.—

17 ‘‘(1) PERFORMANCE MEASUREMENT.—

18 ‘‘(A) IN GENERAL.—By October 1, 2001,

19 each State that receives funds under this sub20 title shall participate, and shall ensure that all

21 eligible entities in the State participate, in a

22 performance measurement system, which may

23 be a performance measurement system estab24 lished by the Secretary pursuant to subsection

25 (b), or an alternative system that the Secretary
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1 is satisfied meets the requirements of sub2 section (b).

3 ‘‘(B) LOCAL AGENCIES.—The State may

4 elect to have local agencies that are subcontrac5 tors of the eligible entities under this subtitle

6 participate in the performance measurement

7 system. If the State makes that election, ref8 erences in this section to eligible entities shall

9 be considered to include the local agencies.

10 ‘‘(2) ANNUAL REPORT.—Each State shall annu11 ally prepare and submit to the Secretary a report on

12 the measured performance of the State and the eligi13 ble entities in the State. Prior to the participation

14 of the State in the performance measurement sys15 tem, the State shall include in the report any infor16 mation collected by the State relating to such per17 formance. Each State shall also include in the report

18 an accounting of the expenditure of funds received

19 by the State through the community services block

20 grant program, including an accounting of funds

21 spent on administrative costs by the State and the

22 eligible entities, and funds spent by eligible entities

23 on the direct delivery of local services, and shall in24 clude information on the number of and characteris25 tics of clients served under this subtitle in the State,
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1 based on data collected from the eligible entities.

2 The State shall also include in the report a summary

3 describing the training and technical assistance of4 fered by the State under section 678C(a)(3) during

5 the year covered by the report.

6 ‘‘(b) SECRETARY’S ACCOUNTABILITY AND REPORT7 ING REQUIREMENTS.—

8 ‘‘(1) PERFORMANCE MEASUREMENT.—The Sec9 retary, in collaboration with the States and with eli10 gible entities throughout the Nation, shall establish

11 one or more model performance measurement sys12 tems, which may be used by the States and by eligi13 ble entities to measure their performance in carrying

14 out the requirements of this subtitle and in achiev15 ing the goals of community action plans. The Sec16 retary shall provide technical assistance, including

17 support for the enhancement of electronic data sys18 tems, to States and to eligible entities to enhance

19 their capability to collect and report data for such

20 a system and to aid in their participation in such a

21 system.

22 ‘‘(2) REPORTING REQUIREMENTS.—At the end

23 of each fiscal year beginning after September 30,

24 1999, the Secretary shall, directly or by grant or
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1 contract, prepare a report containing each of the fol2 lowing elements:

3 ‘‘(A) A summary of the planned use of

4 funds by each State, and the eligible entities in

5 the State, under the community services block

6 grant program, as contained in each State plan

7 submitted pursuant to section 676.

8 ‘‘(B) A description of how funds were actu9 ally spent by the State and eligible entities in

10 the State, including a breakdown of funds spent

11 on administrative costs and on the direct deliv12 ery of local services by eligible entities.

13 ‘‘(C) Information on the number of entities

14 eligible for funds under this subtitle, the num15 ber of low-income persons served under this

16 subtitle, and such demographic data on the low17 income populations served by eligible entities as

18 is determined by the Secretary to be feasible.

19 ‘‘(D) A comparison of the planned uses of

20 funds for each State and the actual uses of the

21 funds.

22 ‘‘(E) A summary of each State’s perform23 ance results, and the results for the eligible en24 tities, as collected and submitted by the States

25 in accordance with subsection (a)(2).
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1 ‘‘(F) Any additional information that the

2 Secretary considers to be appropriate to carry

3 out this subtitle, if the Secretary informs the

4 States of the need for such additional informa5 tion and allows a reasonable period of time for

6 the States to collect and provide the informa7 tion.

8 ‘‘(3) SUBMISSION.—The Secretary shall submit

9 to the Committee on Education and the Workforce

10 of the House of Representatives and the Committee

11 on Labor and Human Resources of the Senate the

12 report described in paragraph (2), and any com13 ments the Secretary may have with respect to such

14 report. The report shall include definitions of direct,

15 indirect, and administrative costs used by the De16 partment of Health and Human Services for pro17 grams funded under this subtitle.

18 ‘‘(4) COSTS.—Of the funds reserved under sec19 tion 674(b)(3), not more than $350,000 shall be

20 available to carry out the reporting requirements

21 contained in paragraph (2) and the provision of

22 technical assistance described in paragraph (1).

23 ‘‘SEC. 678F. LIMITATIONS ON USE OF FUNDS.

24 ‘‘(a) CONSTRUCTION OF FACILITIES.—
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1 ‘‘(1) LIMITATIONS.—Except as provided in

2 paragraph (2), grants made under this subtitle

3 (other than amounts reserved under section

4 674(b)(3)) may not be used by the State, or by any

5 other person with which the State makes arrange6 ments to carry out the purposes of this subtitle, for

7 the purchase or improvement of land, or the pur8 chase, construction, or permanent improvement

9 (other than low-cost residential weatherization or

10 other energy-related home repairs) of any building

11 or other facility.

12 ‘‘(2) WAIVER.—The Secretary may waive the

13 limitation contained in paragraph (1) upon a State

14 request for such a waiver, if the Secretary finds that

15 the request describes extraordinary circumstances to

16 justify the purchase of land or the construction of

17 facilities (or the making of permanent improve18 ments) and that permitting the waiver will contrib19 ute to the ability of the State to carry out the pur20 poses of this subtitle.

21 ‘‘(b) POLITICAL ACTIVITIES.—

22 ‘‘(1) TREATMENT AS A STATE OR LOCAL AGEN23 CY.—For purposes of chapter 15 of title 5, United

24 States Code, any entity that assumes responsibility

25 for planning, developing, and coordinating activities
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1 under this subtitle and receives assistance under this

2 subtitle shall be deemed to be a State or local agen3 cy. For purposes of paragraphs (1) and (2) of sec4 tion 1502(a) of such title, any entity receiving as5 sistance under this subtitle shall be deemed to be a

6 State or local agency.

7 ‘‘(2) PROHIBITIONS.—Programs assisted under

8 this subtitle shall not be carried on in a manner in9 volving the use of program funds, the provision of

10 services, or the employment or assignment of per11 sonnel, in a manner supporting or resulting in the

12 identification of such programs with—

13 ‘‘(A) any partisan or nonpartisan political

14 activity or any political activity associated with

15 a candidate, or contending faction or group, in

16 an election for public or party office;

17 ‘‘(B) any activity to provide voters or pro18 spective voters with transportation to the polls

19 or similar assistance in connection with any

20 such election; or

21 ‘‘(C) any voter registration activity.

22 ‘‘(3) RULES AND REGULATIONS.—The Sec23 retary, after consultation with the Office of Person24 nel Management, shall issue rules and regulations to

25 provide for the enforcement of this subsection, which
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1 shall include provisions for summary suspension of

2 assistance or other action necessary to permit en3 forcement on an emergency basis.

4 ‘‘(c) NONDISCRIMINATION.—

5 ‘‘(1) IN GENERAL.—No person shall, on the

6 basis of race, color, national origin, or sex be ex7 cluded from participation in, be denied the benefits

8 of, or be subjected to discrimination under, any pro9 gram or activity funded in whole or in part with

10 funds made available under this subtitle. Any prohi11 bition against discrimination on the basis of age

12 under the Age Discrimination Act of 1975 (42

13 U.S.C. 6101 et seq.) or with respect to an otherwise

14 qualified individual with a disability as provided in

15 section 504 of the Rehabilitation Act of 1973 (29

16 U.S.C. 794), or title II of the Americans with Dis17 abilities Act of 1990 (42 U.S.C. 12131 et seq.) shall

18 also apply to any such program or activity.

19 ‘‘(2) ACTION OF SECRETARY.—Whenever the

20 Secretary determines that a State that has received

21 a payment under this subtitle has failed to comply

22 with paragraph (1) or an applicable regulation, the

23 Secretary shall notify the chief executive officer of

24 the State and shall request that the officer secure

25 compliance. If within a reasonable period of time,
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1 not to exceed 60 days, the chief executive officer

2 fails or refuses to secure compliance, the Secretary

3 is authorized to—

4 ‘‘(A) refer the matter to the Attorney Gen5 eral with a recommendation that an appropriate

6 civil action be instituted;

7 ‘‘(B) exercise the powers and functions

8 provided by title VI of the Civil Rights Act of

9 1964 (42 U.S.C. 2000d et seq.), the Age Dis10 crimination Act of 1975 (42 U.S.C. 6101 et

11 seq.), section 504 of the Rehabilitation Act of

12 1973 (29 U.S.C. 794), or title II of the Ameri13 cans with Disabilities Act of 1990 (42 U.S.C.

14 12131), as may be applicable; or

15 ‘‘(C) take such other action as may be pro16 vided by law.

17 ‘‘(3) ACTION OF ATTORNEY GENERAL.—When a

18 matter is referred to the Attorney General pursuant

19 to paragraph (2), or whenever the Attorney General

20 has reason to believe that the State is engaged in a

21 pattern or practice of discrimination in violation of

22 the provisions of this subsection, the Attorney Gen23 eral may bring a civil action in any appropriate

24 United States district court for such relief as may

25 be appropriate, including injunctive relief.
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1 ‘‘SEC. 679. OPERATIONAL RULE.

2 ‘‘(a) FAITH-BASED ORGANIZATIONS INCLUDED AS

3 NONGOVERNMENTAL PROVIDERS.—For any program car4 ried out by the Federal Government, or by a State or local

5 government under this subtitle, the government shall con6 sider, on the same basis as other nongovernmental organi7 zations, faith-based organizations to provide the assistance

8 under the program, so long as the program is implemented

9 in a manner consistent with the Establishment Clause of

10 the first amendment to the Constitution. Neither the Fed11 eral Government nor a State or local government receiving

12 funds under this subtitle shall discriminate against an or13 ganization that provides assistance under, or applies to

14 provide assistance under, this subtitle, on the basis that

15 the organization has a faith-based character.

16 ‘‘(c) FAITH-BASED CHARACTER AND INDEPEND17 ENCE.—

18 ‘‘(1) IN GENERAL.—A faith-based organization

19 that provides assistance under a program described

20 in subsection (a) shall retain its faith-based char21 acter and control over the definition, development,

22 practice, and expression of its faith-based beliefs.

23 ‘‘(2) ADDITIONAL SAFEGUARDS.—Neither the

24 Federal Government nor a State or local government

25 shall require a faith-based organization—
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1 ‘‘(A) to alter its form of internal govern2 ance, except (for purposes of administration of

3 the community services block grant program) as

4 provided in section 676B; or

5 ‘‘(B) to remove religious art, icons, scrip6 ture, or other symbols;

7 in order to be eligible to provide assistance under a

8 program described in subsection (a).

9 ‘‘(3) TENETS AND TEACHINGS.—A faith-based orga10 nization that provides assistance under a program de11 scribed in subsection (a) may require that employees ad12 here to the religious tenets and teachings of such organiza13 tion, and such organization may require that employees

14 adhere to rules forbidding the use of drugs or alcohol.

15 ‘‘(c) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

16 PURPOSES.—No funds provided through a grant or con17 tract to a faith-based organization to provide assistance

18 under any program described in subsection (a) shall be

19 expended for sectarian worship, instruction, or proselytiza20 tion.

21 ‘‘(d) FISCAL ACCOUNTABILITY.—

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), any faith-based organization providing as24 sistance under any program described in subsection

25 (a) shall be subject to the same regulations as other
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1 nongovernmental organizations to account in accord

2 with generally accepted accounting principles for the

3 use of such funds provided under such program.

4 ‘‘(2) LIMITED AUDIT.—Such organization shall

5 segregate government funds provided under such

6 program into a separate account. Only the govern7 ment funds shall be subject to audit by the govern8 ment.

9 ‘‘(e) TREATMENT OF ELIGIBLE ENTITIES AND

10 OTHER INTERMEDIATE ORGANIZATIONS.—If an eligible

11 entity or other organization (referred to in this subsection

12 as an ‘intermediate organization’), acting under a con13 tract, or grant or other agreement, with the Federal Gov14 ernment or a State or local government, is given the au15 thority under the contract or agreement to select non16 governmental organizations to provide assistance under

17 the programs described in subsection (a), the intermediate

18 organization shall have the same duties under this section

19 as the government.

20 ‘‘SEC. 680. DISCRETIONARY AUTHORITY OF THE SEC21 RETARY.

22 ‘‘(a) GRANTS, CONTRACTS, ARRANGEMENTS, LOANS,

23 AND GUARANTEES.—

24 ‘‘(1) IN GENERAL.—The Secretary shall, from

25 funds reserved under section 674(b)(3), make
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1 grants, loans, or guarantees to States and public

2 agencies and private, nonprofit organizations, or

3 enter into contracts or jointly financed cooperative

4 arrangements with States and public agencies and

5 private, nonprofit organizations (and for-profit orga6 nizations, to the extent specified in paragraph

7 (2)(E)) for each of the objectives described in para8 graphs (2) through (4).

9 ‘‘(2) COMMUNITY ECONOMIC DEVELOPMENT.—

10 ‘‘(A) ECONOMIC DEVELOPMENT ACTIVI11 TIES.—The Secretary shall make grants de12 scribed in paragraph (1) on a competitive basis

13 to private, nonprofit organizations that are

14 community development corporations to enable

15 the corporations to provide technical and finan16 cial assistance for economic development activi17 ties designed to address the economic needs of

18 low-income individuals and families by creating

19 employment and business development opportu20 nities.

21 ‘‘(B) CONSULTATION.—The Secretary

22 shall exercise the authority provided under sub23 paragraph (A) after consultation with other rel24 evant Federal officials.
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1 ‘‘(C) GOVERNING BOARDS.—For a commu2 nity development corporation to receive funds to

3 carry out this paragraph, the corporation shall

4 be governed by a board that shall consist of

5 residents of the community and business and

6 civic leaders and shall have as a principal pur7 pose planning, developing, or managing low-in8 come housing or community development

9 projects.

10 ‘‘(D) GEOGRAPHIC DISTRIBUTION.—In

11 making grants to carry out this paragraph, the

12 Secretary shall take into consideration the geo13 graphic distribution of funding among States

14 and the relative proportion of funding among

15 rural and urban areas.

16 ‘‘(E) RESERVATION.—Of the amounts

17 made available to carry out this paragraph, the

18 Secretary may reserve not more than 1 percent

19 for each fiscal year to make grants to private,

20 nonprofit organizations, or to enter into con21 tracts with private, nonprofit or for-profit orga22 nizations, to enable the organizations involved

23 to provide technical assistance to aid commu24 nity development corporations in developing or

25 implementing activities funded to carry out this
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1 paragraph and to evaluate activities funded to

2 carry out this paragraph.

3 ‘‘(3) RURAL COMMUNITY DEVELOPMENT AC4 TIVITIES.—The Secretary shall provide the assist5 ance described in paragraph (1) for rural community

6 development activities, which shall include provid7 ing—

8 ‘‘(A) grants to private, nonprofit corpora9 tions to enable the corporations to provide as10 sistance concerning home repair to rural low-in11 come families and concerning planning and de12 veloping low-income rural rental housing units;

13 and

14 ‘‘(B) grants to multistate, regional, pri15 vate, nonprofit organizations to enable the orga16 nizations to provide training and technical as17 sistance to small, rural communities concerning

18 meeting their community facility needs.

19 ‘‘(4) NEIGHBORHOOD INNOVATION

20 PROJECTS.—The Secretary shall provide the assist21 ance described in paragraph (1) for neighborhood in22 novation projects, which shall include providing

23 grants to neighborhood-based private, nonprofit or24 ganizations to test or assist in the development of

25 new approaches or methods that will aid in over-
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1 coming special problems identified by communities

2 or neighborhoods or otherwise assist in furthering

3 the purposes of this subtitle, and which may include

4 providing assistance for projects that are designed to

5 serve low-income individuals and families who are

6 not being effectively served by other programs.

7 ‘‘(b) EVALUATION.—The Secretary shall require all

8 activities receiving assistance under this section to be eval9 uated for their effectiveness. Funding for such evaluations

10 shall be provided as a stated percentage of the assistance

11 or through a separate grant awarded by the Secretary spe12 cifically for the purpose of evaluation of a particular activ13 ity or group of activities.

14 ‘‘(c) ANNUAL REPORT.—The Secretary shall compile

15 an annual report containing a summary of the evaluations

16 required in subsection (b) and a listing of all activities as17 sisted under this section. The Secretary shall annually

18 submit the report to the Chairperson of the Committee

19 on Education and the Workforce of the House of Rep20 resentatives and the Chairperson of the Committee on

21 Labor and Human Resources of the Senate.

22 ‘‘SEC. 681. COMMUNITY FOOD AND NUTRITION PROGRAMS.

23 ‘‘(a) GRANTS.—The Secretary may, through grants

24 to public and private, nonprofit agencies, provide for com25 munity-based, local, statewide, and national programs—
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1 ‘‘(1) to coordinate private and public food as2 sistance resources, wherever the grant recipient in3 volved determines such coordination to be inad4 equate, to better serve low-income populations;

5 ‘‘(2) to assist low-income communities to iden6 tify potential sponsors of child nutrition programs

7 and to initiate such programs in underserved or

8 unserved areas; and

9 ‘‘(3) to develop innovative approaches at the

10 State and local level to meet the nutrition needs of

11 low-income individuals.

12 ‘‘(b) ALLOTMENTS AND DISTRIBUTION OF FUNDS.—

13 ‘‘(1) NOT TO EXCEED $6,000,000 IN APPROPRIA14 TIONS.—Of the amount appropriated for a fiscal

15 year to carry out this section (but not to exceed

16 $6,000,000), the Secretary shall distribute funds for

17 grants under subsection (a) as follows:

18 ‘‘(A) ALLOTMENTS.—From a portion equal

19 to 60 percent of such amount (but not to ex20 ceed $3,600,000), the Secretary shall allot for

21 grants to eligible agencies for statewide pro22 grams in each State the amount that bears the

23 same ratio to such portion as the low-income

24 and unemployed population of such State bears
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1 to the low-income and unemployed population

2 of all the States.

3 ‘‘(B) COMPETITIVE GRANTS.—From a por4 tion equal to 40 percent of such amount (but

5 not to exceed $2,400,000), the Secretary shall

6 make grants on a competitive basis to eligible

7 agencies for local and statewide programs.

8 ‘‘(2) GREATER AVAILABLE APPROPRIATIONS.—

9 Any amounts appropriated for a fiscal year to carry

10 out this section in excess of $6,000,000 shall be al11 lotted as follows:

12 ‘‘(A) ALLOTMENTS.—The Secretary shall

13 use 40 percent of such excess to make allot14 ments for grants under subsection (a) to eligi15 ble agencies for statewide programs in each

16 State in an amount that bears the same ratio

17 to 40 percent of such excess as the low-income

18 and unemployed population of such State bears

19 to the low-income and unemployed population

20 of all the States.

21 ‘‘(B) COMPETITIVE GRANTS FOR LOCAL

22 AND STATEWIDE PROGRAMS.—The Secretary

23 shall use 40 percent of such excess to make

24 grants under subsection (a) on a competitive
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1 basis to eligible agencies for local and statewide

2 programs.

3 ‘‘(C) COMPETITIVE GRANTS FOR NATION4 WIDE PROGRAMS.—The Secretary shall use the

5 remaining 20 percent of such excess to make

6 grants under subsection (a) on a competitive

7 basis to eligible agencies for nationwide pro8 grams, including programs benefiting Indians

9 as defined in section 677 and migrant or sea10 sonal farmworkers.

11 ‘‘(3) ELIGIBILITY FOR ALLOTMENTS FOR

12 STATEWIDE PROGRAMS.—To be eligible to receive an

13 allotment under paragraph (1)(A) or (2)(A), an eli14 gible agency shall demonstrate that the proposed

15 program is statewide in scope and represents a com16 prehensive and coordinated effort to alleviate hunger

17 within the State.

18 ‘‘(4) MINIMUM ALLOTMENTS FOR STATEWIDE

19 PROGRAMS.—

20 ‘‘(A) IN GENERAL.—From the amounts al21 lotted under paragraphs (1)(A) and (2)(A), the

22 minimum total allotment for each State for

23 each fiscal year shall be—

24 ‘‘(i) $15,000 if the total amount ap25 propriated to carry out this section is not
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1 less than $7,000,000 but less than

2 $10,000,000;

3 ‘‘(ii) $20,000 if the total amount ap4 propriated to carry out this section is not

5 less than $10,000,000 but less than

6 $15,000,000; or

7 ‘‘(iii) $30,000 if the total amount ap8 propriated to carry out this section is not

9 less than $15,000,000.

10 ‘‘(B) DEFINITION.—In this paragraph, the

11 term ‘State’ does not include Guam, American

12 Samoa, the United States Virgin Islands, the

13 Commonwealth of the Northern Mariana Is14 lands, or the Freely Associated States.

15 ‘‘(5) MAXIMUM GRANTS.—From funds made

16 available under paragraphs (1)(B) and (2)(B) for

17 any fiscal year, the Secretary may not make grants

18 under subsection (a) to an eligible agency in an ag19 gregate amount exceeding $50,000. From funds

20 made available under paragraph (2)(C) for any fiscal

21 year, the Secretary may not make grants under sub22 section (a) to an eligible agency in an aggregate

23 amount exceeding $300,000.

24 ‘‘(c) REPORT.—For each fiscal year, the Secretary

25 shall prepare and submit, to the Committee on Education
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1 and the Workforce of the House of Representatives and

2 the Committee on Labor and Human Resources of the

3 Senate, a report concerning the grants made under this

4 section. Such report shall include—

5 ‘‘(1) a list of grant recipients;

6 ‘‘(2) information on the amount of funding

7 awarded to each grant recipient; and

8 ‘‘(3) a summary of the activities performed by

9 the grant recipients with funding awarded under this

10 section and a description of the manner in which

11 such activities meet the objectives described in sub12 section (a).

13 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There

14 are authorized to be appropriated to carry out this section

15 $25,000,000 for fiscal year 1999, and such sums as may

16 be necessary for each of fiscal years 2000 through 2003.

17 ‘‘SEC. 682. NATIONAL OR REGIONAL PROGRAMS DESIGNED

18 TO PROVIDE INSTRUCTIONAL ACTIVITIES

19 FOR LOW-INCOME YOUTH.

20 ‘‘(a) GENERAL AUTHORITY.—The Secretary is au21 thorized to make a grant to an eligible service provider

22 to administer national or regional programs to provide in23 structional activities for low-income youth. In making such

24 a grant, the Secretary shall give priority to eligible service
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1 providers that have a demonstrated ability to operate such

2 a program.

3 ‘‘(b) PROGRAM REQUIREMENTS.—Any instructional

4 activity carried out by an eligible service provider receiving

5 a grant under this section shall be carried out on the cam6 pus of an institution of higher education (as defined in

7 section 1201(a) of the Higher Education Act of 1965 (20

8 U.S.C. 1141(a))) and shall include—

9 ‘‘(1) access to the facilities and resources of

10 such an institution;

11 ‘‘(2) an initial medical examination and follow12 up referral or treatment, without charge, for youth

13 during their participation in such activity;

14 ‘‘(3) at least one nutritious meal daily, without

15 charge, for participating youth during each day of

16 participation;

17 ‘‘(4) high quality instruction in a variety of

18 sports (that shall include swimming and that may

19 include dance and any other high quality rec20 reational activity) provided by coaches and teachers

21 from institutions of higher education and from ele22 mentary and secondary schools (as defined in section

23 14101 of the Elementary and Secondary Education

24 Act of 1965 (20 U.S.C. 8801)); and
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1 ‘‘(5) enrichment instruction and information on

2 matters relating to the well-being of youth, to in3 clude educational opportunities and information on

4 study practices, education for the prevention of drug

5 and alcohol abuse, and information on health and

6 nutrition, career opportunities, and family and job

7 responsibilities.

8 ‘‘(c) ADVISORY COMMITTEE; PARTNERSHIPS.—The

9 eligible service provider shall, in each community in which

10 a program is funded under this section—

11 ‘‘(1) ensure that—

12 ‘‘(A) a community-based advisory commit13 tee is established, with representatives from

14 local youth, family, and social service organiza15 tions, schools, entities providing park and recre16 ation services, and other community-based orga17 nizations serving high-risk youth; or

18 ‘‘(B) an existing community-based advisory

19 board, commission, or committee with similar

20 membership is utilized to serve as the commit21 tee described in subparagraph (A); and

22 ‘‘(2) enter into formal partnerships with youth23 serving organizations or other appropriate social

24 service entities in order to link program participants

25 with year-round services in their home communities
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1 that support and continue the objectives of this sub2 title.

3 ‘‘(d) ELIGIBLE PROVIDERS.—A service provider that

4 is a national private, nonprofit organization, a coalition

5 of such organizations, or a private, nonprofit organization

6 applying jointly with a business concern shall be eligible

7 to apply for a grant under this section if—

8 ‘‘(1) the applicant has demonstrated experience

9 in operating a program providing instruction to low10 income youth;

11 ‘‘(2) the applicant agrees to contribute an

12 amount (in cash or in kind, fairly evaluated) of not

13 less than 25 percent of the amount requested, for

14 the program funded through the grant;

15 ‘‘(3) the applicant agrees to use no funds from

16 a grant authorized under this section for administra17 tive expenses; and

18 ‘‘(4) the applicant agrees to comply with the

19 regulations or program guidelines promulgated by

20 the Secretary for use of funds made available

21 through the grant.

22 ‘‘(e) APPLICATIONS PROCESS.—To be eligible to re23 ceive a grant under this section, a service provider shall

24 submit to the Secretary, for approval, an application at
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1 such time, in such manner, and containing such informa2 tion as the Secretary may require.

3 ‘‘(f) PROMULGATION OF REGULATIONS OR PROGRAM

4 GUIDELINES.—The Secretary shall promulgate regula5 tions or program guidelines to ensure funds made avail6 able through a grant made under this section are used

7 in accordance with the objectives of this subtitle.

8 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There

9 is authorized to be appropriated $15,000,000 for each of

10 fiscal years 1999 through 2003 for grants to carry out

11 this section.

12 ‘‘SEC. 683. REFERENCES.

13 ‘‘Any reference in any provision of law to the poverty

14 line set forth in section 624 or 625 of the Economic Op15 portunity Act of 1964 shall be construed to be a reference

16 to the poverty line defined in section 673. Any reference

17 in any provision of law to any community action agency

18 designated under title II of the Economic Opportunity Act

19 of 1964 shall be construed to be a reference to an entity

20 eligible to receive funds under the community services

21 block grant program.’’.

22 SEC. 202. CONFORMING AMENDMENTS.

23 (a) OLDER AMERICANS ACT OF 1965.—Section

24 306(a)(6)(E)(ii) of the Older Americans Act of 1965 (42

25 U.S.C. 3026(a)(6)(E)(ii)) is amended by striking ‘‘section
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1 675(c)(3) of the Community Services Block Grant Act (42

2 U.S.C. 9904(c)(3))’’ and inserting ‘‘section 676B of the

3 Community Services Block Grant Act’’.

4 (b) ANTI-DRUG ABUSE ACT OF 1988.—Section

5 3521(c)(2) of the Anti-Drug Abuse Act of 1988 (42

6 U.S.C. 11841(c)(2)) is amended by striking ‘‘, such as ac7 tivities authorized by section 681(a)(2)(F) of the Commu8 nity Services Block Grant Act (42 U.S.C. section

9 9910(a)(2)(F)),’’.

10 SEC. 203. REPEALERS.

11 (a) COMMUNITY ECONOMIC DEVELOPMENT ACT OF

12 1981.—The Community Economic Development Act of

13 1981 (42 U.S.C. 9801 et seq.) is repealed.

14 (b) HUMAN SERVICES REAUTHORIZATION ACT OF

15 1986.—Sections 407 and 408 of the Human Services Re16 authorization Act of 1986 (42 U.S.C 9812a and 9910b)

17 are repealed.

18 TITLE III—LOW-INCOME HOME

19 ENERGY ASSISTANCE

20 SEC. 301. AUTHORIZATION.

21 (a) IN GENERAL.—Section 2602(b) of the Low-In22 come Home Energy Assistance Act of 1981 (42 U.S.C.

23 8621(b)) is amended—

24 (1) by striking ‘‘are authorized’’ and inserting

25 ‘‘is authorized’’; and
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1 (2) by striking ‘‘fiscal years 1995 through

2 1999’’ and inserting ‘‘fiscal years 1999 through

3 2004’’.

4 (b) PROGRAM YEAR.—Section 2602(c) of such Act

5 (42 U.S.C. 8621(c)) is amended to read as follows:

6 ‘‘(c) Amounts appropriated under this section for any

7 fiscal year for programs and activities under this title shall

8 be made available for obligation in the succeeding fiscal

9 year.’’.

10 (c) INCENTIVE PROGRAM FOR LEVERAGING NON11 FEDERAL RESOURCES.—Section 2602(d) of such Act (42

12 U.S.C. 8621(d)) is amended—

13 (1) by striking ‘‘(d)’’ and inserting ‘‘(d)(1)’’;

14 (2) by striking ‘‘are authorized’’ and inserting

15 ‘‘is authorized’’;

16 (3) by striking ‘‘$50,000,000’’ and all that fol17 lows and inserting the following: ‘‘$30,000,000 for

18 each of fiscal years 1999 through 2004, except as

19 provided in paragraph (2).’’; and

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

21 ‘‘(2) For any of fiscal years 1999 through 2004 for

22 which the amount appropriated under subsection (b) is not

23 less than $1,400,000,000, there is authorized to be appro24 priated $50,000,000 to carry out section 2607A.’’.
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1 (d) TECHNICAL AMENDMENTS.—Section 2602(e) of

2 such Act (42 U.S.C. 8621(e)) is amended—

3 (1) by striking ‘‘are authorized’’ and inserting

4 ‘‘is authorized’’; and

5 (2) by striking ‘‘subsection (g)’’ and inserting

6 ‘‘subsection (e) of such section’’.

7 SEC. 302. DEFINITIONS.

8 Section 2603(4) of the Low-Income Home Energy

9 Assistance Act of 1981 (42 U.S.C. 8622(4)) is amended—

10 (1) by striking ‘‘the term’’ and inserting ‘‘The

11 term’’; and

12 (2) by striking the semicolon and inserting a

13 period.

14 SEC. 303. NATURAL DISASTERS AND OTHER EMERGENCIES.

15 Section 2603 of the Low-Income Home Energy As16 sistance Act of 1981 (42 U.S.C. 8622) is amended—

17 (1) by redesignating paragraphs (6) through

18 (9) as paragraphs (8) through (11), respectively;

19 (2) by inserting before paragraph (8) (as redes20 ignated in paragraph (1)) the following:

21 ‘‘(7) NATURAL DISASTER.—The term ‘natural

22 disaster’ means a weather event (relating to cold or

23 hot weather), flood, earthquake, tornado, hurricane,

24 or ice storm, or an event meeting such other criteria
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1 as the Secretary, in the discretion of the Secretary,

2 may determine to be appropriate.’’;

3 (3) by redesignating paragraphs (1) through

4 (5) as paragraphs (2) through (6), respectively; and

5 (4) by inserting before paragraph (2) (as redes6 ignated in paragraph (3)) the following:

7 ‘‘(1) EMERGENCY.—The term ‘emergency’ means—

8 ‘‘(A) a natural disaster;

9 ‘‘(B) a significant home energy supply shortage

10 or disruption;

11 ‘‘(C) a significant increase in the cost of home

12 energy, as determined by the Secretary;

13 ‘‘(D) a significant increase in home energy dis14 connections reported by a utility, a State regulatory

15 agency, or another agency with necessary data;

16 ‘‘(E) a significant increase in participation in a

17 public benefit program such as the food stamp pro18 gram carried out under the Food Stamp Act of 1977

19 (7 U.S.C. 2011 et seq.), the national program to

20 provide supplemental security income carried out

21 under title XVI of the Social Security Act (42

22 U.S.C. 1381 et seq.), or the State temporary assist23 ance for needy families program carried out under

24 part A of title IV of the Social Security Act (42
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1 U.S.C. 601 et seq.), as determined by the head of

2 the appropriate Federal agency;

3 ‘‘(F) a significant increase in unemployment,

4 layoffs, or the number of households with an individ5 ual applying for unemployment benefits, as deter6 mined by the Secretary of Labor; or

7 ‘‘(G) an event meeting such criteria as the Sec8 retary, in the discretion of the Secretary, may deter9 mine to be appropriate.’’.

10 SEC. 304. STATE ALLOTMENTS.

11 Section 2604 of the Low-Income Home Energy As12 sistance Act of 1981 (42 U.S.C. 8623) is amended—

13 (1) in subsection (b)(1), by striking ‘‘the North14 ern Mariana Islands, and the Trust Territory of the

15 Pacific Islands.’’ and inserting ‘‘the Commonwealth

16 of the Northern Mariana Islands, and the combined

17 Freely Associated States.’’;

18 (2) in subsection (c)(3)(B)(ii), by striking ‘‘ap19 plication’’ and inserting ‘‘applications’’;

20 (3) by striking subsection (f);

21 (4) in subsection (g)—

22 (A) in the first sentence, by striking ‘‘(a)

23 through (f)’’ and inserting ‘‘(a) through (d)’’;

24 and
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1 (B) by striking the last two sentences and

2 inserting the following: ‘‘In determining wheth3 er to make such an allotment to a State, the

4 Secretary shall take into account the extent to

5 which the State was affected by the natural dis6 aster or other emergency involved, the availabil7 ity to the State of other resources under the

8 program carried out under this title or any

9 other program, whether a Member of Congress

10 has requested that the State receive the allot11 ment, and such other factors as the Secretary

12 may find to be relevant. Not later than 30 days

13 after making the determination, but prior to re14 leasing an allotted amount to a State, the Sec15 retary shall notify Congress of the allotments

16 made pursuant to this subsection.’’; and

17 (5) by redesignating subsection (g) as sub18 section (e).

19 SEC. 305. ADMINISTRATION.

20 Section 2605 of the Low-Income Home Energy As21 sistance Act of 1981 (42 U.S.C. 8624) is amended—

22 (1) in subsection (b)—

23 (A) in paragraph (9)(A), by striking ‘‘and

24 not transferred pursuant to section 2604(f) for

25 use under another block grant’’;
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1 (B) in paragraph (14), by striking ‘‘; and’’

2 and inserting a semicolon;

3 (C) in the matter following paragraph

4 (14), by striking ‘‘The Secretary may not pre5 scribe the manner in which the States will com6 ply with the provisions of this subsection.’’; and

7 (D) in the matter following paragraph

8 (16), by inserting before ‘‘The Secretary shall

9 issue’’ the following: ‘‘The Secretary may not

10 prescribe the manner in which the States will

11 comply with the provisions of this subsection.’’;

12 and

13 (2) in subsection (c)(1)—

14 (A) in subparagraph (B), by striking

15 ‘‘States’’ and inserting ‘‘State’’; and

16 (B) in subparagraph (G)(i), by striking

17 ‘‘has’’ and inserting ‘‘had’’.

18 SEC. 306. PAYMENTS TO STATES.

19 Section 2607(b)(2)(B) of the Low-Income Home En20 ergy Assistance Act of 1981 (42 U.S.C. 8626(b)(2)(B))

21 is amended—

22 (1) in the first sentence, by striking ‘‘and not

23 transferred pursuant to section 2604(f)’’; and

24 (2) in the second sentence, by striking ‘‘but not

25 transferred by the State’’.
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1 SEC. 307. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE

2 OPTION.

3 (a) EVALUATION.—The Comptroller General of the

4 United States shall conduct an evaluation of the Residen5 tial Energy Assistance Challenge program described in

6 section 2607B of the Low-Income Home Energy Assist7 ance Act of 1981 (42 U.S.C. 8626b).

8 (b) REPORT.—Not later than 2 years after the date

9 of enactment of this Act, the Comptroller General of the

10 United States shall prepare and submit to Congress a re11 port containing—

12 (1) the findings resulting from the evaluation

13 described in subsection (a); and

14 (2) the State evaluations described in para15 graphs (1) and (2) of subsection (b) of such section

16 2607B.

17 (c) INCENTIVE GRANTS.—Section 2607B(b)(1) of the

18 Low-Income Home Energy Assistance Act of 1981 (42

19 U.S.C. 8626b(b)(1)) is amended by striking ‘‘For each of

20 the fiscal years 1996 through 1999’’ and inserting ‘‘For

21 each fiscal year’’.

22 (d) TECHNICAL AMENDMENTS.—Section 2607B of

23 such Act (42 U.S.C. 8626b) is amended—

24 (1) in subsection (e)(2)—
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1 (A) by redesignating subparagraphs (F)

2 through (N) as subparagraphs (E) through

3 (M), respectively; and

4 (B) in clause (i) of subparagraph (I) (as

5 redesignated in subparagraph (A)), by striking

6 ‘‘on’’ and inserting ‘‘of’’; and

7 (2) by redesignating subsection (g) as sub8 section (f).

9 SEC. 308. TECHNICAL ASSISTANCE, TRAINING, AND COM10 PLIANCE REVIEWS.

11 (a) IN GENERAL.—Section 2609A(a) of the Low-In12 come Home Energy Assistance Act of 1981 (42 U.S.C.

13 8628a(a)) is amended—

14 (1) in the matter preceding paragraph (1)—

15 (A) by striking ‘‘$250,000’’ and inserting

16 ‘‘$300,000’’; and

17 (B) by striking ‘‘Secretary—’’ and insert18 ing ‘‘Secretary to conduct onsite compliance re19 views of programs supported under this title

20 or—’’; and

21 (2) in paragraph (2)—

22 (A) by inserting ‘‘or interagency agree23 ments’’ after ‘‘cooperative arrangements’’; and

24 (B) by inserting ‘‘(including Federal agen25 cies)’’ after ‘‘public agencies’’.
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1 (b) CONFORMING AMENDMENT.—The section head2 ing of section 2609A of such Act (42 U.S.C. 8628a) is

3 amended to read as follows:

4 ‘‘TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE

5 REVIEWS’’.

6 TITLE IV—ASSETS FOR

7 INDEPENDENCE

8 SEC. 401. SHORT TITLE.

9 This title may be cited as the ‘‘Assets for Independ10 ence Act’’.

11 SEC. 402. FINDINGS.

12 Congress makes the following findings:

13 (1) Economic well-being does not come solely

14 from income, spending, and consumption, but also

15 requires savings, investment, and accumulation of

16 assets because assets can improve economic inde17 pendence and stability, connect individuals with a

18 viable and hopeful future, stimulate development of

19 human and other capital, and enhance the welfare of

20 offspring.

(2) Fully 1 21 ⁄2 of all Americans have either no,

22 negligible, or negative assets available for invest23 ment, just as the price of entry to the economic

24 mainstream, the cost of a house, an adequate edu25 cation, and starting a business, is increasing. Fur26 ther, the household savings rate of the United States
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1 lags far behind other industrial nations, presenting

2 a barrier to economic growth.

3 (3) In the current tight fiscal environment, the

4 United States should invest existing resources in

5 high-yield initiatives. There is reason to believe that

6 the financial returns, including increased income, tax

7 revenue, and decreased welfare cash assistance, re8 sulting from individual development accounts will far

9 exceed the cost of investment in those accounts.

10 (4) Traditional public assistance programs con11 centrating on income and consumption have rarely

12 been successful in promoting and supporting the

13 transition to increased economic self-sufficiency. In14 come-based domestic policy should be complemented

15 with asset-based policy because, while income-based

16 policies ensure that consumption needs (including

17 food, child care, rent, clothing, and health care) are

18 met, asset-based policies provide the means to

19 achieve greater independence and economic well20 being.

21 SEC. 403. PURPOSES.

22 The purposes of this title are to provide for the estab23 lishment of demonstration projects designed to deter24 mine—
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1 (1) the social, civic, psychological, and economic

2 effects of providing to individuals and families with

3 limited means an incentive to accumulate assets by

4 saving a portion of their earned income;

5 (2) the extent to which an asset-based policy

6 that promotes saving for postsecondary education,

7 homeownership, and microenterprise development

8 may be used to enable individuals and families with

9 limited means to increase their economic self-suffi10 ciency; and

11 (3) the extent to which an asset-based policy

12 stabilizes and improves families and the community

13 in which they live.

14 SEC. 404. DEFINITIONS.

15 In this title:

16 (1) APPLICABLE PERIOD.—The term ‘‘applica17 ble period’’ means, with respect to amounts to be

18 paid from a grant made for a project year, the cal19 endar year immediately preceding the calendar year

20 in which the grant is made.

21 (2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible

22 individual’’ means an individual who is selected to

23 participate by a qualified entity under section 409.
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1 (3) EMERGENCY WITHDRAWAL.—The term

2 ‘‘emergency withdrawal’’ means a withdrawal by an

3 eligible individual that—

4 (A) is a withdrawal of only those funds, or

5 a portion of those funds, deposited by the indi6 vidual in the individual development account of

7 the individual;

8 (B) is permitted by a qualified entity on a

9 case-by-case basis; and

10 (C) is made for—

11 (i) expenses for medical care or nec12 essary to obtain medical care, for the indi13 vidual or a spouse or dependent of the in14 dividual described in paragraph (8)(D);

15 (ii) payments necessary to prevent the

16 eviction of the individual from the resi17 dence of the individual, or foreclosure on

18 the mortgage for the principal residence of

19 the individual, as defined in paragraph

20 (8)(B); or

21 (iii) payments necessary to enable the

22 individual to meet necessary living ex23 penses following loss of employment.

24 (4) HOUSEHOLD.—The term ‘‘household’’

25 means all individuals who share use of a dwelling
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1 unit as primary quarters for living and eating sepa2 rate from other individuals.

3 (5) INDIVIDUAL DEVELOPMENT ACCOUNT.—

4 (A) IN GENERAL.—The term ‘‘individual

5 development account’’ means a trust created or

6 organized in the United States exclusively for

7 the purpose of paying the qualified expenses of

8 an eligible individual, or enabling the eligible in9 dividual to make an emergency withdrawal, but

10 only if the written governing instrument creat11 ing the trust meets the following requirements:

12 (i) No contribution will be accepted

13 unless it is in cash or by check.

14 (ii) The trustee is a federally insured

15 financial institution, or a State insured fi16 nancial institution if no federally insured

17 financial institution is available.

18 (iii) The assets of the trust will be in19 vested in accordance with the direction of

20 the eligible individual after consultation

21 with the qualified entity providing deposits

22 for the individual under section 410.

23 (iv) The assets of the trust will not be

24 commingled with other property except in
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1 a common trust fund or common invest2 ment fund.

3 (v) Except as provided in clause (vi),

4 any amount in the trust which is attrib5 utable to a deposit provided under section

6 410 may be paid or distributed out of the

7 trust only for the purpose of paying the

8 qualified expenses of the eligible individual,

9 or enabling the eligible individual to make

10 an emergency withdrawal.

11 (vi) Any balance in the trust on the

12 day after the date on which the individual

13 for whose benefit the trust is established

14 dies shall be distributed within 30 days of

15 that date as directed by that individual to

16 another individual development account es17 tablished for the benefit of an eligible indi18 vidual.

19 (B) CUSTODIAL ACCOUNTS.—For purposes

20 of subparagraph (A), a custodial account shall

21 be treated as a trust if the assets of the custo22 dial account are held by a bank (as defined in

23 section 408(n) of the Internal Revenue Code of

24 1986) or another person who demonstrates, to

25 the satisfaction of the Secretary, that the man-
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1 ner in which such person will administer the

2 custodial account will be consistent with the re3 quirements of this title, and if the custodial ac4 count would, except for the fact that it is not

5 a trust, constitute an individual development

6 account described in subparagraph (A). For

7 purposes of this title, in the case of a custodial

8 account treated as a trust by reason of the pre9 ceding sentence, the custodian of that custodial

10 account shall be treated as the trustee thereof.

11 (6) PROJECT YEAR.—The term ‘‘project year’’

12 means, with respect to a demonstration project, any

13 of the 4 consecutive 12-month periods beginning on

14 the date the project is originally authorized to be

15 conducted.

16 (7) QUALIFIED ENTITY.—

17 (A) IN GENERAL.—The term ‘‘qualified en18 tity’’ means—

19 (i) one or more not-for-profit organi20 zations described in section 501(c)(3) of

21 the Internal Revenue Code of 1986 and ex22 empt from taxation under section 501(a)

23 of such Code; or

24 (ii) a State or local government agen25 cy, or a tribal government, submitting an
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1 application under section 405 jointly with

2 an organization described in clause (i).

3 (B) RULE OF CONSTRUCTION.—Nothing in

4 this paragraph shall be construed as preventing

5 an organization described in subparagraph

6 (A)(i) from collaborating with a financial insti7 tution or for-profit community development cor8 poration to carry out the purposes of this title.

9 (8) QUALIFIED EXPENSES.—The term ‘‘quali10 fied expenses’’ means one or more of the following,

11 as provided by the qualified entity:

12 (A) POSTSECONDARY EDUCATIONAL EX13 PENSES.—Postsecondary educational expenses

14 paid from an individual development account di15 rectly to an eligible educational institution. In

16 this subparagraph:

17 (i) POSTSECONDARY EDUCATIONAL

18 EXPENSES.—The term ‘‘postsecondary

19 educational expenses’’ means the following:

20 (I) TUITION AND FEES.—Tuition

21 and fees required for the enrollment

22 or attendance of a student at an eligi23 ble educational institution.

24 (II) FEES, BOOKS, SUPPLIES,

25 AND EQUIPMENT.—Fees, books, sup-
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1 plies, and equipment required for

2 courses of instruction at an eligible

3 educational institution.

4 (ii) ELIGIBLE EDUCATIONAL INSTITU5 TION.—The term ‘‘eligible educational in6 stitution’’ means the following:

7 (I) INSTITUTION OF HIGHER

8 EDUCATION.—An institution described

9 in section 481(a)(1) or 1201(a) of the

10 Higher Education Act of 1965 (20

11 U.S.C. 1088(a)(1) or 1141(a)), as

12 such sections are in effect on the date

13 of enactment of this title.

14 (II) POSTSECONDARY VOCA15 TIONAL EDUCATION SCHOOL.—An

16 area vocational education school (as

17 defined in subparagraph (C) or (D) of

18 section 521(4) of the Carl D. Perkins

19 Vocational and Applied Technology

20 Education Act (20 U.S.C. 2471(4)))

21 which is in any State (as defined in

22 section 521(33) of such Act), as such

23 sections are in effect on the date of

24 enactment of this title.
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1 (B) FIRST-HOME PURCHASE.—Qualified

2 acquisition costs with respect to a principal res3 idence for a qualified first-time homebuyer, if

4 paid from an individual development account di5 rectly to the persons to whom the amounts are

6 due. In this subparagraph:

7 (i) PRINCIPAL RESIDENCE.—The term

8 ‘‘principal residence’’ means a principal

9 residence, the qualified acquisition costs of

10 which do not exceed 100 percent of the av11 erage area purchase price applicable to

12 such residence.

13 (ii) QUALIFIED ACQUISITION COSTS.—

14 The term ‘‘qualified acquisition costs’’

15 means the costs of acquiring, constructing,

16 or reconstructing a residence. The term in17 cludes any usual or reasonable settlement,

18 financing, or other closing costs.

19 (iii) QUALIFIED FIRST-TIME HOME20 BUYER.—

21 (I) IN GENERAL.—The term

22 ‘‘qualified first-time homebuyer’’

23 means an individual participating in

24 the project (and, if married, the indi25 vidual’s spouse) who has no present
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1 ownership interest in a principal resi2 dence during the 3-year period ending

3 on the date of acquisition of the prin4 cipal residence to which this subpara5 graph applies.

6 (II) DATE OF ACQUISITION.—

7 The term ‘‘date of acquisition’’ means

8 the date on which a binding contract

9 to acquire, construct, or reconstruct

10 the principal residence to which this

11 subparagraph applies is entered into.

12 (C) BUSINESS CAPITALIZATION.—Amounts

13 paid from an individual development account di14 rectly to a business capitalization account which

15 is established in a federally insured financial in16 stitution and is restricted to use solely for

17 qualified business capitalization expenses. In

18 this subparagraph:

19 (i) QUALIFIED BUSINESS CAPITALIZA20 TION EXPENSES.—The term ‘‘qualified

21 business capitalization expenses’’ means

22 qualified expenditures for the capitalization

23 of a qualified business pursuant to a quali24 fied plan.
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1 (ii) QUALIFIED EXPENDITURES.—The

2 term ‘‘qualified expenditures’’ means ex3 penditures included in a qualified plan, in4 cluding capital, plant, equipment, working

5 capital, and inventory expenses.

6 (iii) QUALIFIED BUSINESS.—The term

7 ‘‘qualified business’’ means any business

8 that does not contravene any law or public

9 policy (as determined by the Secretary).

10 (iv) QUALIFIED PLAN.—The term

11 ‘‘qualified plan’’ means a business plan, or

12 a plan to use a business asset purchased,

13 which—

14 (I) is approved by a financial in15 stitution, a microenterprise develop16 ment organization, or a nonprofit loan

17 fund having demonstrated fiduciary

18 integrity;

19 (II) includes a description of

20 services or goods to be sold, a market21 ing plan, and projected financial

22 statements; and

23 (III) may require the eligible in24 dividual to obtain the assistance of an

25 experienced entrepreneurial adviser.
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1 (D) TRANSFERS TO IDAS OF FAMILY MEM2 BERS.—Amounts paid from an individual devel3 opment account directly into another such ac4 count established for the benefit of an eligible

5 individual who is—

6 (i) the individual’s spouse; or

7 (ii) any dependent of the individual

8 with respect to whom the individual is al9 lowed a deduction under section 151 of the

10 Internal Revenue Code of 1986.

11 (9) QUALIFIED SAVINGS OF THE INDIVIDUAL

12 FOR THE PERIOD.—The term ‘‘qualified savings of

13 the individual for the period’’ means the aggregate

14 of the amounts contributed by the individual to the

15 individual development account of the individual

16 during the period.

17 (10) SECRETARY.—The term ‘‘Secretary’’

18 means the Secretary of Health and Human Services.

19 (11) TRIBAL GOVERNMENT.—The term ‘‘tribal

20 government’’ means a tribal organization, as defined

21 in section 4 of the Indian Self-Determination and

22 Education Assistance Act (25 U.S.C. 450b) or a Na23 tive Hawaiian organization, as defined in section

24 9212 of the Native Hawaiian Education Act (20

25 U.S.C. 7912).
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1 SEC. 405. APPLICATIONS.

2 (a) ANNOUNCEMENT OF DEMONSTRATION

3 PROJECTS.—Not later than 3 months after the date of

4 enactment of this title, the Secretary shall publicly an5 nounce the availability of funding under this title for dem6 onstration projects and shall ensure that applications to

7 conduct the demonstration projects are widely available to

8 qualified entities.

9 (b) SUBMISSION.—Not later than 6 months after the

10 date of enactment of this title, a qualified entity may sub11 mit to the Secretary an application to conduct a dem12 onstration project under this title.

13 (c) CRITERIA.—In considering whether to approve an

14 application to conduct a demonstration project under this

15 title, the Secretary shall assess the following:

16 (1) SUFFICIENCY OF PROJECT.—The degree to

17 which the project described in the application ap18 pears likely to aid project participants in achieving

19 economic self-sufficiency through activities requiring

20 qualified expenses. In making such assessment, the

21 Secretary shall consider the overall quality of project

22 activities in making any particular kind or combina23 tion of qualified expenses to be an essential feature

24 of any project.
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1 (2) ADMINISTRATIVE ABILITY.—The experience

2 and ability of the applicant to responsibly administer

3 the project.

4 (3) ABILITY TO ASSIST PARTICIPANTS.—The

5 experience and ability of the applicant in recruiting,

6 educating, and assisting project participants to in7 crease their economic independence and general well8 being through the development of assets.

9 (4) COMMITMENT OF NON-FEDERAL FUNDS.—

10 The aggregate amount of direct funds from non11 Federal public sector and from private sources that

12 are formally committed to the project as matching

13 contributions.

14 (5) ADEQUACY OF PLAN FOR PROVIDING IN15 FORMATION FOR EVALUATION.—The adequacy of

16 the plan for providing information relevant to an

17 evaluation of the project.

18 (6) OTHER FACTORS.—Such other factors rel19 evant to the purposes of this title as the Secretary

20 may specify.

21 (d) PREFERENCES.—In considering an application to

22 conduct a demonstration project under this title, the Sec23 retary shall give preference to an application that—

24 (1) demonstrates the willingness and ability to

25 select individuals described in section 408 who are
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1 predominantly from households in which a child (or

2 children) is living with the child’s biological or adop3 tive mother or father, or with the child’s legal guard4 ian;

5 (2) provides a commitment of non-Federal

6 funds with a proportionately greater amount of such

7 funds committed by private sector sources; and

8 (3) targets such individuals residing within one

9 or more relatively well-defined neighborhoods or

10 communities (including rural communities) that ex11 perience high rates of poverty or unemployment.

12 (e) APPROVAL.—Not later than 9 months after the

13 date of enactment of this title, the Secretary shall, on a

14 competitive basis, approve such applications to conduct

15 demonstration projects under this title as the Secretary

16 deems appropriate, taking into account the assessments

17 required by subsections (c) and (d). The Secretary is en18 couraged to ensure that the applications that are approved

19 involve a range of communities (both rural and urban) and

20 diverse populations.

21 (f) CONTRACTS WITH NONPROFIT ENTITIES.—The

22 Secretary may contract with an entity described in section

23 501(c)(3) of the Internal Revenue Code of 1986 and ex24 empt from taxation under section 501(a) of such Code to
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1 carry out any responsibility of the Secretary under this

2 section or section 412 if—

3 (1) such entity demonstrates the ability to carry

4 out such responsibility; and

5 (2) the Secretary can demonstrate that such re6 sponsibility would not be carried out by the Sec7 retary at a lower cost.

8 SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

9 (a) DEMONSTRATION AUTHORITY.—If the Secretary

10 approves an application to conduct a demonstration

11 project under this title, the Secretary shall, not later than

12 10 months after the date of enactment of this title, au13 thorize the applicant to conduct the project for 4 project

14 years in accordance with the approved application and the

15 requirements of this title.

16 (b) GRANT AUTHORITY.—For each project year of a

17 demonstration project conducted under this title, the Sec18 retary may make a grant to the qualified entity authorized

19 to conduct the project. In making such a grant, the Sec20 retary shall make the grant on the first day of the project

21 year in an amount not to exceed the lesser of—

22 (1) the aggregate amount of funds committed

23 as matching contributions by non-Federal public or

24 private sector sources; or

25 (2) $1,000,000.
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1 SEC. 407. RESERVE FUND.

2 (a) ESTABLISHMENT.—A qualified entity under this

3 title, other than a State or local government agency, or

4 a tribal government, shall establish a Reserve Fund which

5 shall be maintained in accordance with this section.

6 (b) AMOUNTS IN RESERVE FUND.—

7 (1) IN GENERAL.—As soon after receipt as is

8 practicable, a qualified entity shall deposit in the Re9 serve Fund established under subsection (a)—

10 (A) all funds provided to the qualified en11 tity by any public or private source in connec12 tion with the demonstration project; and

13 (B) the proceeds from any investment

14 made under subsection (c)(2).

15 (2) UNIFORM ACCOUNTING REGULATIONS.—

16 The Secretary shall prescribe regulations with re17 spect to accounting for amounts in the Reserve

18 Fund established under subsection (a).

19 (c) USE OF AMOUNTS IN THE RESERVE FUND.—

20 (1) IN GENERAL.—A qualified entity shall use

21 the amounts in the Reserve Fund established under

22 subsection (a) to—

23 (A) assist participants in the demonstra24 tion project in obtaining the skills (including

25 economic literacy, budgeting, credit, and coun26 seling) and information necessary to achieve
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1 economic self-sufficiency through activities re2 quiring qualified expenses;

3 (B) provide deposits in accordance with

4 section 410 for individuals selected by the quali5 fied entity to participate in the demonstration

6 project;

7 (C) administer the demonstration project;

8 and

9 (D) provide the research organization eval10 uating the demonstration project under section

11 414 with such information with respect to the

12 demonstration project as may be required for

13 the evaluation.

14 (2) AUTHORITY TO INVEST FUNDS.—

15 (A) GUIDELINES.—The Secretary shall es16 tablish guidelines for investing amounts in the

17 Reserve Fund established under subsection (a)

18 in a manner that provides an appropriate bal19 ance between return, liquidity, and risk.

20 (B) INVESTMENT.—A qualified entity shall

21 invest the amounts in its Reserve Fund that are

22 not immediately needed to carry out the provi23 sions of paragraph (1), in accordance with the

24 guidelines established under subparagraph (A).
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1 (3) LIMITATION ON USES.—Not more than 9.5

2 percent of the amounts provided to a qualified entity

3 under section 406(b) shall be used by the qualified

4 entity for the purposes described in subparagraphs

5 (A), (C), and (D) of paragraph (1), of which not less

6 than 2 percent of the amounts shall be used by the

7 qualified entity for the purposes described in para8 graph (1)(D). If two or more qualified entities are

9 jointly administering a project, no qualified entity

10 shall use more than its proportional share for the

11 purposes described in subparagraphs (A), (C), and

12 (D) of paragraph (1).

13 (d) UNUSED FEDERAL GRANT FUNDS TRANS14 FERRED TO THE SECRETARY WHEN PROJECT TERMI15 NATES.—Notwithstanding subsection (c), upon the termi16 nation of any demonstration project authorized under this

17 section, the qualified entity conducting the project shall

18 transfer to the Secretary an amount equal to—

19 (1) the amounts in its Reserve Fund at time of

20 the termination; multiplied by

21 (2) a percentage equal to—

22 (A) the aggregate amount of grants made

23 to the qualified entity under section 406(b); di24 vided by
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1 (B) the aggregate amount of all funds pro2 vided to the qualified entity by all sources to

3 conduct the project.

4 SEC. 408. ELIGIBILITY FOR PARTICIPATION.

5 (a) IN GENERAL.—Any individual who is a member

6 of a household that is eligible for assistance under the

7 State temporary assistance for needy families program es8 tablished under part A of title IV of the Social Security

9 Act (42 U.S.C. 601 et seq.), or that meets each of the

10 following requirements shall be eligible to participate in

11 a demonstration project conducted under this title:

12 (1) INCOME TEST.—The adjusted gross income

13 of the household does not exceed the earned income

14 amount described in section 32 of the Internal Reve15 nue Code of 1986 (taking into account the size of

16 the household).

17 (2) NET WORTH TEST.—

18 (A) IN GENERAL.—The net worth of the

19 household, as of the end of the calendar year

20 preceding the determination of eligibility, does

21 not exceed $10,000.

22 (B) DETERMINATION OF NET WORTH.—

23 For purposes of subparagraph (A), the net

24 worth of a household is the amount equal to—
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1 (i) the aggregate market value of all

2 assets that are owned in whole or in part

3 by any member of the household; minus

4 (ii) the obligations or debts of any

5 member of the household.

6 (C) EXCLUSIONS.—For purposes of deter7 mining the net worth of a household, a house8 hold’s assets shall not be considered to include

9 the primary dwelling unit and one motor vehicle

10 owned by the household.

11 (b) INDIVIDUALS UNABLE TO COMPLETE THE

12 PROJECT.—The Secretary shall establish such regulations

13 as are necessary, including prohibiting future eligibility to

14 participate in any other demonstration project conducted

15 under this title, to ensure compliance with this title if an

16 individual participating in the demonstration project

17 moves from the community in which the project is con18 ducted or is otherwise unable to continue participating in

19 that project.

20 SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.

21 From among the individuals eligible to participate in

22 a demonstration project conducted under this title, each

23 qualified entity shall select the individuals—

24 (1) that the qualified entity deems to be best

25 suited to participate; and
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1 (2) to whom the qualified entity will provide de2 posits in accordance with section 410.

3 SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.

4 (a) IN GENERAL.—Not less than once every 3 months

5 during each project year, each qualified entity under this

6 title shall deposit in the individual development account

7 of each individual participating in the project, or into a

8 parallel account maintained by the qualified entity—

9 (1) from the non-Federal funds described in

10 section 405(c)(4), a matching contribution of not

11 less than $0.50 and not more than $4 for every $1

12 of earned income (as defined in section 911(d)(2) of

13 the Internal Revenue Code of 1986) deposited in the

14 account by a project participant during that period;

15 (2) from the grant made under section 406(b),

16 an amount equal to the matching contribution made

17 under paragraph (1); and

18 (3) any interest that has accrued on amounts

19 deposited under paragraph (1) or (2) on behalf of

20 that individual into the individual development ac21 count of the individual or into a parallel account

22 maintained by the qualified entity.

23 (b) LIMITATION ON DEPOSITS FOR AN INDIVID24 UAL.—Not more than $2,000 from a grant made under
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1 section 406(b) shall be provided to any one individual over

2 the course of the demonstration project.

3 (c) LIMITATION ON DEPOSITS FOR A HOUSEHOLD.—

4 Not more than $4,000 from a grant made under section

5 406(b) shall be provided to any one household over the

6 course of the demonstration project.

7 (d) WITHDRAWAL OF FUNDS.—The Secretary shall

8 establish such guidelines as may be necessary to ensure

9 that funds held in an individual development account are

10 not withdrawn, except for one or more qualified expenses,

11 or for an emergency withdrawal. Such guidelines shall in12 clude a requirement that a responsible official of the quali13 fied entity conducting a project approve such withdrawal

14 in writing. The guidelines shall provide that no individual

15 may withdraw funds from an individual development ac16 count earlier than 6 months after the date on which the

17 individual first deposits funds in the account.

18 (e) REIMBURSEMENT.—An individual shall reimburse

19 an individual development account for any funds with20 drawn from the account for an emergency withdrawal, not

21 later than 12 months after the date of the withdrawal.

22 If the individual fails to make the reimbursement, the

23 qualified entity administering the account shall transfer

24 the funds deposited into the account or a parallel account

25 under section 410 to the Reserve Fund of the qualified
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1 entity, and use the funds to benefit other individuals par2 ticipating in the demonstration project involved.

3 SEC. 411. LOCAL CONTROL OVER DEMONSTRATION

4 PROJECTS.

5 A qualified entity under this title, other than a State

6 or local government agency or a tribal government, shall,

7 subject to the provisions of section 413, have sole author8 ity over the administration of the project. The Secretary

9 may prescribe only such regulations or guidelines with re10 spect to demonstration projects conducted under this title

11 as are necessary to ensure compliance with the approved

12 applications and the requirements of this title.

13 SEC. 412. ANNUAL PROGRESS REPORTS.

14 (a) IN GENERAL.—Each qualified entity under this

15 title shall prepare an annual report on the progress of the

16 demonstration project. Each report shall include both pro17 gram and participant information and shall specify for the

18 period covered by the report the following information:

19 (1) The number of individuals making a deposit

20 into an individual development account.

21 (2) The amounts in the Reserve Fund estab22 lished with respect to the project.

23 (3) The amounts deposited in the individual de24 velopment accounts.
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1 (4) The amounts withdrawn from the individual

2 development accounts and the purposes for which

3 such amounts were withdrawn.

4 (5) The balances remaining in the individual

5 development accounts.

6 (6) The savings account characteristics (such as

7 threshold amounts and match rates) required to

8 stimulate participation in the demonstration project,

9 and how such characteristics vary among different

10 populations or communities.

11 (7) What service configurations of the qualified

12 entity (such as peer support, structured planning ex13 ercises, mentoring, and case management) increased

14 the rate and consistency of participation in the dem15 onstration project and how such configurations var16 ied among different populations or communities.

17 (8) Such other information as the Secretary

18 may require to evaluate the demonstration project.

19 (b) SUBMISSION OF REPORTS.—The qualified entity

20 shall submit each report required to be prepared under

21 subsection (a) to—

22 (1) the Secretary; and

23 (2) the Treasurer (or equivalent official) of the

24 State in which the project is conducted, if the State
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1 or a local government or a tribal government com2 mitted funds to the demonstration project.

3 (c) TIMING.—The first report required by subsection

4 (a) shall be submitted not later than 60 days after the

5 end of the calendar year in which the Secretary authorized

6 the qualified entity to conduct the demonstration project,

7 and subsequent reports shall be submitted every 12

8 months thereafter, until the conclusion of the project.

9 SEC. 413. SANCTIONS.

10 (a) AUTHORITY TO TERMINATE DEMONSTRATION

11 PROJECT.—If the Secretary determines that a qualified

12 entity under this title is not operating the demonstration

13 project in accordance with the entity’s application or the

14 requirements of this title (and has not implemented any

15 corrective recommendations directed by the Secretary),

16 the Secretary shall terminate such entity’s authority to

17 conduct the demonstration project.

18 (b) ACTIONS REQUIRED UPON TERMINATION.—If

19 the Secretary terminates the authority to conduct a dem20 onstration project, the Secretary—

21 (1) shall suspend the demonstration project;

22 (2) shall take control of the Reserve Fund es23 tablished pursuant to section 407;

24 (3) shall make every effort to identify another

25 qualified entity (or entities) willing and able to con-
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1 duct the project in accordance with the approved ap2 plication (or, as modified, if necessary to incorporate

3 the recommendations) and the requirements of this

4 title;

5 (4) shall, if the Secretary identifies an entity

6 (or entities) described in paragraph (3)—

7 (A) authorize the entity (or entities) to

8 conduct the project in accordance with the ap9 proved application (or, as modified, if nec10 essary, to incorporate the recommendations)

11 and the requirements of this title;

12 (B) transfer to the entity (or entities) con13 trol over the Reserve Fund established pursuant

14 to section 407; and

15 (C) consider, for purposes of this title—

16 (i) such other entity (or entities) to be

17 the qualified entity (or entities) originally

18 authorized to conduct the demonstration

19 project; and

20 (ii) the date of such authorization to

21 be the date of the original authorization;

22 and

23 (5) if, by the end of the 1-year period beginning

24 on the date of the termination, the Secretary has not
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1 found a qualified entity (or entities) described in

2 paragraph (3), shall—

3 (A) terminate the project; and

4 (B) from the amount remaining in the Re5 serve Fund established as part of the project,

6 remit to each source that provided funds under

7 section 405(c)(4) to the entity originally au8 thorized to conduct the project, an amount that

9 bears the same ratio to the amount so remain10 ing as the amount provided by the source under

11 section 405(c)(4) bears to the amount provided

12 by all such sources under that section.

13 SEC. 414. EVALUATIONS.

14 (a) IN GENERAL.—Not later than 10 months after

15 the date of enactment of this title, the Secretary shall

16 enter into a contract with an independent research organi17 zation to evaluate, individually and as a group, all quali18 fied entities and sources participating in the demonstra19 tion projects conducted under this title.

20 (b) FACTORS TO EVALUATE.—In evaluating any

21 demonstration project conducted under this title, the re22 search organization shall address the following factors:

23 (1) The effects of incentives and organizational

24 or institutional support on savings behavior in the

25 demonstration project.
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1 (2) The savings rates of individuals in the dem2 onstration project based on demographic characteris3 tics including gender, age, family size, race or ethnic

4 background, and income.

5 (3) The economic, civic, psychological, and so6 cial effects of asset accumulation, and how such ef7 fects vary among different populations or commu8 nities.

9 (4) The effects of individual development ac10 counts on savings rates, homeownership, level of

11 postsecondary education attained, and self-employ12 ment, and how such effects vary among different

13 populations or communities.

14 (5) The potential financial returns to the Fed15 eral Government and to other public sector and pri16 vate sector investors in individual development ac17 counts over a 5-year and 10-year period of time.

18 (6) The lessons to be learned from the dem19 onstration projects conducted under this title and if

20 a permanent program of individual development ac21 counts should be established.

22 (7) Such other factors as may be prescribed by

23 the Secretary.
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1 (c) METHODOLOGICAL REQUIREMENTS.—In evaluat2 ing any demonstration project conducted under this title,

3 the research organization shall—

4 (1) for at least one site, use control groups to

5 compare participants with nonparticipants;

6 (2) before, during, and after the project, obtain

7 such quantitative data as are necessary to evaluate

8 the project thoroughly; and

9 (3) develop a qualitative assessment, derived

10 from sources such as in-depth interviews, of how

11 asset accumulation affects individuals and families.

12 (d) REPORTS BY THE SECRETARY.—

13 (1) INTERIM REPORTS.—Not later than 90 days

14 after the end of the calendar year in which the Sec15 retary first authorizes a qualified entity to conduct

16 a demonstration project under this title, and every

17 12 months thereafter until all demonstration

18 projects conducted under this title are completed,

19 the Secretary shall submit to Congress an interim

20 report setting forth the results of the reports sub21 mitted pursuant to section 412(b).

22 (2) FINAL REPORTS.—Not later than 12

23 months after the conclusion of all demonstration

24 projects conducted under this title, the Secretary

25 shall submit to Congress a final report setting forth
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1 the results and findings of all reports and evalua2 tions conducted pursuant to this title.

3 (e) EVALUATION EXPENSES.—The Secretary shall

4 expend such sums as may be necessary, but not more than

5 2 percent of the amounts appropriated under section 416

6 for a fiscal year, to carry out the purposes of this section.

7 SEC. 415. TREATMENT OF FUNDS.

8 Of the funds deposited in individual development ac9 counts for eligible individuals only the funds deposited by

10 the individuals (including interest accruing on those

11 funds) may be considered to be the income, assets, or re12 sources of the individuals, for purposes of determining eli13 gibility for, or the amount of assistance furnished under,

14 any Federal or federally assisted program based on need.

15 SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

16 There is authorized to be appropriated to carry out

17 this title, $25,000,000 for each of fiscal years 1999, 2000,

18 2001, 2002, and 2003 to remain available until expended.

Passed the Senate July 27, 1998.

Attest:

Secretary.
105TH CONGRESS

2D SESSION S. 2206

AN ACT

To amend the Head Start Act, the Low-Income

cumulate assets, and for other purposes.opportunity for persons with limited means to acestablish demonstration projects that provide anthorize and make improvements to those Acts, toCommunity Services Block Grant Act to reauHome Energy Assistance Act of 1981, and the