I 

108TH CONGRESS 

2D SESSION S. 1786

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 24, 2004

Referred to the Committee on Education and the Workforce, and in addition 

to the Committees on Energy and Commerce, and Ways and Means for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

AN ACT

To revise and extend the Community Services Block Grant 

Act, the Low-Income Home Energy Assistance Act of 

1981, and the Assets for Independence Act.

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; TABLE OF CONTENTS. 

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

5 ‘‘Poverty Reduction and Prevention Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of 

2 this Act is as follows:

Sec. 1. Short title; table of contents. 

TITLE I—COMMUNITY SERVICES BLOCK GRANT ACT 

Sec. 101. Purposes. 

Sec. 102. Definitions. 

Sec. 103. Authorization of appropriations. 

Sec. 104. Establishment of program. 

Sec. 105. Use of funds. 

Sec. 106. Application and plan. 

Sec. 107. Designation of eligible entities in underserved areas. 

Sec. 108. Tripartite boards. 

Sec. 109. Training, technical assistance, and other activities. 

Sec. 110. Monitoring. 

Sec. 111. Corrective action; termination and reduction of funding. 

Sec. 112. Fiscal controls, audits, and withholding. 

Sec. 113. Accountability and reporting requirement. 

Sec. 114. Limitations on use of funds. 

Sec. 115. Operational rule. 

Sec. 116. Discretionary authority of the Secretary. 

Sec. 117. Community food and nutrition programs. 

Sec. 118. National or regional programs designed to provide instructional activities for low-income youth. 

TITLE II—LOW-INCOME HOME ENERGY ASSISTANCE 

Sec. 201. Short title. 

Sec. 202. Reauthorization. 

Sec. 203. Natural disasters and other emergencies. 

Sec. 204. Residential Energy Assistance Challenge option. 

Sec. 205. Report to Congress. 

TITLE III—ASSETS FOR INDEPENDENCE REAUTHORIZATION ACT 

Sec. 301. Short title. 

Sec. 302. Reauthorization of the Assets for Independence Act.

3 TITLE I—COMMUNITY SERVICES 

4 BLOCK GRANT ACT 

5 SEC. 101. PURPOSES. 

6 Section 672 of the Community Services Block Grant 

7 Act (42 U.S.C. 9901) is amended to read as follows: 

8 ‘‘SEC. 672. PURPOSES. 

9 ‘‘The purpose of this subtitle is to reduce poverty—
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1 ‘‘(1) by strengthening and coordinating local ef2 forts to expand opportunities for individuals and 

3 families to become economically self-sufficient and to 

4 improve and revitalize the communities in which low5 income Americans live, by providing resources to 

6 States for support of local eligible entities and their 

7 partners to—

8 ‘‘(A) plan, coordinate, and mobilize a 

9 broad range of Federal, State, local, and pri10 vate assistance or investment in such a manner 

11 as to use these resources effectively to reduce 

12 poverty and in initiatives that are responsive to 

13 specific local needs and conditions; 

14 ‘‘(B) organize multiple services that meet 

15 the needs of low-income families and individ16 uals, especially low-wage workers and their fam17 ilies, and that assist them in developing the as18 sets and skills needed to become self sustaining 

19 while ensuring that these services are provided 

20 efficiently, in appropriate combinations, and in 

21 effective sequence; and 

22 ‘‘(C) design and implement comprehensive 

23 approaches to assist individuals transitioning 

24 from the program of block grants to States for 

25 temporary assistance for needy families under 
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1 part A of title IV of the Social Security Act (42 

2 U.S.C. 601 et seq.) to work; 

3 ‘‘(2) by improving and revitalizing the commu4 nities in which low-income Americans live by pro5 viding resources to—

6 ‘‘(A) broaden the financial resource base of 

7 initiatives and projects directed to the elimi8 nation of poverty and the re-development of the 

9 low-income community, including partnerships 

10 with non-governmental and governmental insti11 tutions to develop the community assets and 

12 services that reduce poverty, such as—

13 ‘‘(i) other private, charitable, neigh14 borhood-based, and religious organizations; 

15 ‘‘(ii) individual citizens, and busi16 nesses, labor, and professional groups, who 

17 are able to influence the quantity and qual18 ity of opportunities and services for the 

19 poor; and 

20 ‘‘(iii) local government leadership; and 

21 ‘‘(B) coordinate or create community-wide 

22 assets and services that will have a significant, 

23 measurable impact on the causes of poverty in 

24 the community and that will help families and 

25 individuals to achieve economic self-sufficiency, 
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1 and test innovative, community-based ap2 proaches to attacking the causes and effects of 

3 poverty and of community breakdown, includ4 ing— 

5 ‘‘(i) innovative initiatives to prevent 

6 and reverse loss of investment, jobs, public 

7 services, and infrastructure in low- and 

8 moderate-income communities; and 

9 ‘‘(ii) innovative partnerships to de10 velop the assets and services that reduce 

11 poverty, as provided for in subparagraph 

12 (A); and 

13 ‘‘(3) by ensuring maximum participation of 

14 residents of low-income communities and of mem15 bers of the groups served by programs under this 

16 subtitle in guiding the eligible entities and in their 

17 programs funded under this subtitle to ameliorate 

18 the particular problems and needs of low-income 

19 residents of their communities and to develop the 

20 permanent social and economic assets of the low-in21 come community in order to reduce the incidence of 

22 poverty.’’. 

23 SEC. 102. DEFINITIONS. 

24 Section 673 of the Community Services Block Grant 

25 Act (42 U.S.C. 9902) is amended—
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1 (1) in paragraph (1)(A)(ii), by striking ‘‘or 

2 other mechanism’’; and 

3 (2) in paragraph (2)—

4 (A) in the first sentence—

5 (i) by striking ‘‘Office of Management 

6 and Budget’’ and inserting ‘‘Department 

7 of Health and Human Services’’; and 

8 (ii) by inserting before the period the 

9 following: ‘‘and increased, as the Secretary 

10 determines appropriate, to take into ac11 count higher costs-of-living for a State’’; 

12 and 

13 (B) by striking the last sentence and in14 serting the following: ‘‘Whenever a State deter15 mines that it has served the objectives of the 

16 block grant program established under this sub17 title, the State may revise the poverty line, 

18 while placing a priority in serving those who are 

19 most in need, so that 125 percent of the official 

20 poverty line is the minimum level that a State 

21 shall be permitted to set as its maximum eligi22 bility requirement and 60 percent of the State’s 

23 median income is the maximum level that a 

24 State shall be permitted to set as its maximum 

25 eligibility requirement. The State may revise 
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1 the poverty line only upon a determination that 

2 eligible entities are providing, coordinating, or 

3 partnering with means-tested support services 

4 for low and moderate-income individuals and 

5 families above the official poverty line. Nothing 

6 in this paragraph shall be construed to prevent 

7 eligible entities from continuing to support indi8 viduals and families during their transition 

9 from program eligibility to achieve specific goals 

10 for their economic security and long-term self11 sufficiency as long as priority is given to serv12 ing the lowest income individuals who seek serv13 ices.’’. 

14 SEC. 103. AUTHORIZATION OF APPROPRIATIONS. 

15 Section 674 of the Community Services Block Grant 

16 Act (42 U.S.C. 9903) is amended—

17 (1) in subsection (a), by striking ‘‘1999 through 

18 2003’’ and inserting ‘‘2004 through 2009’’; and 

19 (2) in subsection (b)(2)—

20 (A) in subparagraph (A), by striking ‘‘or 

21 associations’’ and inserting ‘‘and associations’’; 

22 and 

23 (B) in subparagraph (B)—
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(i) by striking ‘‘1 1 ⁄2of the remainder’’ 

and inserting ‘‘not less than 1 2 ⁄2 of the re3 mainder’’; and 

4 (ii) by striking ‘‘evaluation and’’ and 

5 inserting ‘‘evaluation and training and 

6 technical assistance activities and’’. 

7 SEC. 104. ESTABLISHMENT OF PROGRAM. 

8 Section 675 of the Community Services Block Grant 

9 Act (42 U.S.C. 9904) is amended by striking ‘‘through 

10 the program’’ and all that follows through the period and 

11 inserting ‘‘to States for the purpose of ameliorating the 

12 causes of poverty and the conditions caused by poverty 

13 in their communities.’’. 

14 SEC. 105. USE OF FUNDS. 

15 Section 675C(b) of the Community Services Block 

16 Grant Act (42 U.S.C. 9907(b)) is amended—

17 (1) in paragraph (1)—

18 (A) in subparagraph (A), by striking ‘‘enti19 ties in need of such training and assistance’’ 

20 and inserting ‘‘eligible entities and their state21 wide associations that strengthens their mana22 gerial or programmatic capabilities to reduce 

23 poverty’’; and 

24 (B) by striking subparagraphs (B) through 

25 (H) and inserting the following: 
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1 ‘‘(B) supporting statewide coordination 

2 and communication among eligible entities and 

3 State-operated or supported programs and serv4 ices, and other locally-operated programs and 

5 services targeted to low-income individuals and 

6 their children and families, so as to ensure that 

7 local eligible entities’ services are integrated in 

8 a manner that allows such low-income indi9 vidual and their families to have access to as 

10 many sources of assistance as are appropriate 

11 to support their progress to economic stability 

12 and self-sufficiency; 

13 ‘‘(C) supporting innovative partnerships, 

14 programs, and activities conducted by commu15 nity action agencies and their partners includ16 ing other community-based organizations to 

17 eliminate poverty, promote self-sufficiency, and 

18 promote community revitalization, including 

19 asset-building programs for low-income individ20 uals, such as programs supporting individual 

21 development accounts, and home or business 

22 ownership; 

23 ‘‘(D) analyzing the distribution of funds 

24 made available under this subtitle within the 
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1 State to determine if such funds have been tar2 geted to the areas of greatest need; 

3 ‘‘(E) supporting State charity tax credits 

4 as described in subsection (c); 

5 ‘‘(F) supporting the identification of exem6 plary eligible entities or programs as Centers of 

7 Innovation and methodology for disseminating 

8 innovative programs and other best practices 

9 from those agencies statewide; 

10 ‘‘(G) supporting the development of eligible 

11 entities’ partnerships with local law enforce12 ment agencies, local housing authorities, private 

13 foundations, and other public and private part14 ners; and 

15 ‘‘(H) supporting other activities, consistent 

16 with the purposes of this subtitle.’’; and 

17 (2) in paragraph (2), by adding at the end the 

18 following: ‘‘The State shall also ensure that all funds 

19 distributed under subsection (a) are not used for ex20 cessive administrative expenses and that all funds 

21 distributed under such subsection used for salaries 

22 by a local entity are fair and equitable. The State 

23 has the authority to determine the appropriate level 

24 of funds distributed under subsection (a) that an eli25 gible entity shall use for administrative expenses.’’. 
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1 SEC. 106. APPLICATION AND PLAN. 

2 Section 676 of the Community Services Block Grant 

3 Act (42 U.S.C. 9908) is amended—

4 (1) in subsection (b)—

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

6 by inserting ‘‘for the Secretary’s approval’’ 

7 after ‘‘to the Secretary’’; 

8 (B) by striking paragraphs (1) through (6) 

9 and inserting the following: 

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

11 through the grant or allotment will be used—

12 ‘‘(A) to support activities directly and 

13 through eligible entities that are designed to ex14 pand opportunities for and assist low-income in15 dividuals and their families (including low-in16 come workers) to become self-sufficient, includ17 ing low-income workers, families, and individ18 uals receiving assistance under part A of title 

19 IV of the Social Security Act (42 U.S.C. 601 et 

20 seq.), homeless families and individuals, mi21 grant or seasonal farmworkers, and elderly low22 income individuals and families, and a descrip23 tion of how such activities will enable the fami24 lies and individuals—

25 ‘‘(i) to remove obstacles and solve 

26 problems that block the achievement of 
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1 self-sufficiency by organizing and coordi2 nating support for those served under 

3 paragraph (3); 

4 ‘‘(ii) to secure and retain employment 

5 that provides adequate income with essen6 tial benefits; 

7 ‘‘(iii) to attain an adequate education, 

8 with particular attention toward improving 

9 literacy and communications and technical 

10 skills of the low-income families in the 

11 communities involved; 

12 ‘‘(iv) to make better use of available 

13 income and build household assets; 

14 ‘‘(v) to obtain and maintain adequate 

15 housing and a suitable living environment; 

16 ‘‘(vi) to obtain assistance that is need17 ed to resolve family emergencies and indi18 vidual needs, to prevent further hardships, 

19 and to secure economic independence; and 

20 ‘‘(vii) to participate fully in the public 

21 affairs and management of their commu22 nities and the governance of eligible enti23 ties; and 

24 ‘‘(B) to make more effective use of, and to 

25 coordinate with, other programs related to the 
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1 purposes of this subtitle (including State wel2 fare reform efforts); 

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

4 use discretionary funds made available from the re5 mainder of the grant or allotment described in sec6 tion 675C(b) in accordance with this subtitle, includ7 ing a description of how the State will support inno8 vative community-based initiatives of eligible entities 

9 and their partners related to the purposes of this 

10 subtitle; 

11 ‘‘(3) an assurance that the State has integrated 

12 programs of general relevance in its plan, to the ex13 tent appropriate to the needs of low-income commu14 nities served by the eligible entities, including a de15 scription of innovative community and neighborhood16 based initiatives such as—

17 ‘‘(A) initiatives with the goal of strength18 ening families and encouraging effective par19 enting, including fatherhood initiatives; 

20 ‘‘(B) initiatives to assist those moving 

21 from welfare to work to obtain jobs at decent 

22 wages with benefits, including those low-income 

23 individuals and their families who are attempt24 ing to transition off a State program carried 
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1 out under part A of title IV of the Social Secu2 rity Act (42 U.S.C. 601 et seq.); 

3 ‘‘(C) programs for the establishment of vi4 olence-free zones that would involve youth de5 velopment and intervention models that pro6 mote youth success (such as models involving 

7 youth mediation, youth mentoring, life skills 

8 training, job creation, and entrepreneurship 

9 programs); 

10 ‘‘(D) family literacy initiatives; 

11 ‘‘(E) initiatives to increase the develop12 ment of household assets of individuals such as 

13 individual development accounts and home14 ownership opportunities; 

15 ‘‘(F) public and private partnerships to 

16 foster community development, affordable hous17 ing, job creation, and other means of building 

18 the assets of low-income communities; 

19 ‘‘(G) partnerships with local law enforce20 ment agencies, which may include participation 

21 in community policing, and activities to assist 

22 community residents and public safety officials 

23 in the event of emergencies, including threats to 

24 national security; 
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1 ‘‘(H) initiatives to improve economic condi2 tions and mobilize new resources in rural areas 

3 and other at-risk areas to eliminate obstacles to 

4 the self sufficiency of families and individuals in 

5 those communities; 

6 ‘‘(I) initiatives to help reduce the con7 centration of poverty in cities and inner suburbs 

8 and provide economic opportunities for individ9 uals and families in those areas; and 

10 ‘‘(J) partnerships with nonprofit or com11 munity-based organizations that demonstrate 

12 effectiveness in child abuse prevention, includ13 ing with programs that are school-based and 

14 that focus on adolescent victims, and victim15 izers; 

16 ‘‘(4) an assurance that the State will provide 

17 information, including—

18 ‘‘(A) a description of the State measure19 ment system and results for the performance 

20 goals established under section 678E(a)(1)(C); 

21 ‘‘(B) a description of the service delivery 

22 system, for services provided or coordinated 

23 with funds made available through grants made 

24 under section 675C(a), targeted to low-income 
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1 individuals and families in communities within 

2 the State; 

3 ‘‘(C) a description of how linkages will be 

4 developed to fill identified gaps in the services, 

5 through the provision of information, referrals, 

6 case management, and followup consultations, 

7 and to support mobilization of new resources 

8 and partnerships; 

9 ‘‘(D) a description of how funds made 

10 available through grants made under section 

11 675C(a) will be coordinated with other public 

12 and private resources; and 

13 ‘‘(E) a description of how the local entity 

14 will use the funds to support innovative commu15 nity and neighborhood-based initiatives related 

16 to the purposes of this subtitle; 

17 ‘‘(5) an assurance that eligible entities in the 

18 State will provide, on an emergency basis, for the 

19 provision of such supplies and services, nutritious 

20 foods, and related services, as may be necessary to 

21 counteract conditions of starvation and malnutrition 

22 among low-income individuals; 

23 ‘‘(6) an assurance that the State has, to avoid 

24 duplication of such services, and to ensure that pro25 gram gaps are addressed, identified and coordinated 
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1 with eligible entity programs, with State and local 

2 agencies, and with programs that assist low-income 

3 individuals and their families, including— 

4 ‘‘(A) programs carried out under part A of 

5 title IV of the Social Security Act (42 U.S.C. 

6 601 et seq.), the Workforce Investment Act of 

7 1998 (29 U.S.C. 2801 et seq.), and other pro8 grams designed to coordinate work-related sup9 portive services for families; 

10 ‘‘(B) programs for expanding housing op11 portunities, reducing homelessness, and devel12 oping community investment projects; 

13 ‘‘(C) education programs, including those 

14 for preschool and school-aged children and for 

15 adults to obtain an adequate education; and 

16 ‘‘(D) programs designed to support youth, 

17 the homeless, migrants, senior citizens, and in18 dividuals with disabilities, including programs 

19 under the Low-Income Home Energy Assist20 ance Act of 1981 (42 U.S.C. 8621 et seq.);’’; 

21 (C) in paragraph (12)— 

22 (i) by striking ‘‘not later than fiscal 

23 year 2001’’ and inserting ‘‘annually’’; and 

24 (ii) by striking ‘‘and’’ at the end; 
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1 (D) in paragraph (13), by striking the pe2 riod and inserting ‘‘in sufficient detail to permit 

3 verification; and’’; and 

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

5 ‘‘(14) beginning with fiscal year 2006, and in 

6 each fiscal year thereafter, an assurance that the 

7 State is using the procedures described in section 

8 678B(b) to monitor eligible entities.’’; and 

9 (2) by striking subsection (f). 

10 SEC. 107. DESIGNATION OF ELIGIBLE ENTITIES IN UNDER11 SERVED AREAS. 

12 Section 676A(b) of the Community Services Block 

13 Grant Act (42 U.S.C. 9909(b)) is amended by adding at 

14 the end the following: ‘‘In granting such designation, the 

15 State shall deem private nonprofit eligible entities that are 

16 providing related services in the unserved area to be of 

17 demonstrated effectiveness, consistent with the needs iden18 tified by a community needs assessment.’’. 

19 SEC. 108. TRIPARTITE BOARDS. 

20 Section 676B(b) of the Community Services Block 

21 Grant Act (42 U.S.C. 9910(b)) is amended—

22 (1) by striking ‘‘through—’’ and all that follows 

23 through ‘‘a tripartite’’ in paragraph (1) and insert24 ing ‘‘through a tripartite’’; 

25 (2) by striking paragraph (2); 
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1 (3) in subparagraph (C), by striking ‘‘; or’’ and 

2 inserting a period; and 

3 (4) by redesignating subparagraphs (A) through 

4 (C) as paragraph (1) through (3), respectively and 

5 realigning the margins of such paragraphs accord6 ingly. 

7 SEC. 109. TRAINING, TECHNICAL ASSISTANCE, AND OTHER 

8 ACTIVITIES. 

9 Section 678A of the Community Services Block 

10 Grant Act (42 U.S.C. 9913) is amended—

11 (1) in subsection (a)(1)—

12 (A) in subparagraph (A), by striking ‘‘cor13 rective action’’ and all that follows through ‘‘; 

14 and’’ and inserting ‘‘monitoring and such addi15 tional corrective actions as may be needed to 

16 strengthen the management and programmatic 

17 practices of eligible entities;’’; and 

18 (B) by striking subparagraph (B) and in19 serting the following: 

20 ‘‘(B) for State and local performance re21 porting and program data collection activities 

22 related to programs carried out under this sub23 title; 

24 ‘‘(C) for the preparation of reports pro25 vided for in section 678E; 
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1 ‘‘(D) for the development and promulga2 tion of a common State Financial and Organi3 zational Protocol that is required to be used by 

4 States under section 678B(b); and 

5 ‘‘(E) to distribute amounts in accordance 

6 with subsection (c).’’; 

7 (2) in subsection (b)(2), by striking ‘‘an ongo8 ing procedure for obtaining input from the national 

9 and State networks of eligible entities’’ and inserting 

10 ‘‘a strategic plan for annual technical assistance de11 veloped in consultation with the national and State 

12 networks of eligible entities regarding their manage13 ment support needs’’; and 

14 (3) in subsection (c)(1), by striking ‘‘manage15 ment information’’ and all that follows through the 

16 period, and inserting ‘‘improving management infor17 mation and reporting systems, measuring of pro18 gram results, ensuring responsiveness to identified 

19 local needs, and reporting and disseminating suc20 cessful practices and initiatives.’’. 

21 SEC. 110. MONITORING. 

22 Section 678B of the Community Services Block 

23 Grant Act (42 U.S.C. 9914) is amended—

24 (1) in the section heading by striking ‘‘OF EL25 IGIBLE ENTITIES’’; 
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1 (2) in subsection (a)—

2 (A) by striking the subsection heading and 

3 inserting ‘‘MONITORING OF ELIGIBLE ENTI4 TIES’’; 

5 (B) in paragraph (1)—

6 (i) by inserting ‘‘biennial’’ after ‘‘on7 site’’; and 

8 (ii) by striking ‘‘at least once during 

9 each 3 year period’’; 

10 (C) by striking paragraph (2); 

11 (D) by redesignating paragraphs (3) and 

12 (4) as paragraphs (2) and (3), respectively; and 

13 (E) in paragraph (2) (as so redesignated), 

14 by inserting ‘‘annual’’ after ‘‘Followup’’; 

15 (3) by redesignating subsections (b) and (c) as 

16 subsection (c) and (d), respectively; 

17 (4) by inserting after subsection (a) the fol18 lowing: 

19 ‘‘(b) FINANCIAL AND ORGANIZATIONAL ASSESSMENT

20 PROTOCOL.—Beginning in fiscal year 2006, States shall 

21 implement a financial and organizational assessment pro22 tocol to monitor and evaluate the compliance of eligible 

23 entities with the financial and administrative requirements 

24 of this section. Such protocol shall incorporate the fiscal 

25 and organizational review procedures and standards ap-
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1 propriate to the management of Federal funds under this 

2 subtitle and the governance of the eligible private non3 profit corporations or other eligible entities. The Secretary 

4 shall require the protocol to be developed jointly by the 

5 States and eligible entities and shall assist States in devel6 oping appropriate training for personnel monitoring the 

7 uses of funds under this subtitle according to the require8 ments of this section.’’; and 

9 (5) in subsection (d), as so redesignated, by 

10 striking the last sentence and inserting the fol11 lowing: ‘‘The Secretary shall annually submit a re12 port including the results of the evaluations con13 ducted under this subtitle, the State performance re14 ports provided for pursuant to section 

15 678E(a)(1)(C), and other material as provided by 

16 section 678E(b)(2) to the Committee on Education 

17 and the Workforce of the House of Representatives 

18 and the Committee on Health, Education, Labor, 

19 and Pensions of the Senate.’’. 

20 SEC. 111. CORRECTIVE ACTION; TERMINATION AND REDUC21 TION OF FUNDING. 

22 Section 678C of the Community Services Block 

23 Grant Act (42 U.S.C. 9915) is amended— 

24 (1) in subsection (a)—
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1 (A) in paragraph (4), by striking ‘‘and’’ at 

2 the end; and 

3 (B) by striking paragraph (5) and insert4 ing the following: 

5 ‘‘(5) if the eligible entity fails to correct the de6 ficiency, notify the entity—

7 ‘‘(A) that the State intends to initiate pro8 ceedings to terminate the designation of the en9 tity as an eligible entity or to reduce, from the 

10 previous year, the proportion of the total fund11 ing received by the State under this subtitle 

12 that is allocated to the eligible entity; 

13 ‘‘(B) that the eligible entity has the right 

14 to a hearing on the record to determine if there 

15 is cause for such termination or reduction in 

16 funding, as defined in section 676(c), and that 

17 the request for a hearing must be made in writ18 ing to the State within 30 days of receipt of the 

19 notice from the State; and 

20 ‘‘(C) of the legal basis for the proposed 

21 termination or reduction in funding, the factual 

22 findings on which the proposed termination or 

23 reduction in funding is based or a reference to 

24 specific findings in another document that form 

25 the basis for the proposed termination or reduc-
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1 tion in funding (such as a reference to item 

2 numbers in an on-site review report or instru3 ment), and citation to any statutory provisions, 

4 agreements, regulations, or State plan; and 

5 ‘‘(6) if the eligible entity requests a hearing, 

6 conduct a hearing on the record to determine if 

7 there is cause for termination or a reduction in 

8 funding, as defined in section 676(c).’’; 

9 (2) in subsection (b)—

10 (A) by striking ‘‘review such a determina11 tion’’ and inserting ‘‘review and either approve, 

12 or disapprove and reverse, such a determina13 tion’’; 

14 (B) by striking ‘‘90 days’’ each place that 

15 it appears and inserting ‘‘30 days’’; and 

16 (C) by striking ‘‘90th day’’ and inserting 

17 ‘‘30th day’’; and 

18 (3) in subsection (c), by adding at the end the 

19 following: ‘‘The Secretary shall continue to fund an 

20 eligible entity, in an amount equal to the same pro21 portion of total funds received by the State under 

22 this subtitle as was allocated to the eligible entity 

23 the previous year, until the Secretary approves, or 

24 disapproves and reverses, the determination of ter-
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1 mination or reduction in funding with respect to the 

2 State.’’. 

3 SEC. 112. FISCAL CONTROLS, AUDITS, AND WITHHOLDING. 

4 Section 678D of the Community Services Block 

5 Grant Act (42 U.S.C. 9916) is amended—

6 (1) in subsection (a)(1)—

7 (A) in subparagraph (C), by striking 

8 ‘‘and’’ at the end; 

9 (B) by redesignating subparagraph (D) as 

10 subparagraph (F); and 

11 (C) by inserting after subparagraph (C), 

12 the following: 

13 ‘‘(D) notwithstanding paragraph (2)(B), 

14 beginning in fiscal year 2004, and not less than 

15 every 4 years thereafter, each State shall sub16 mit to the Secretary a separate audit of the 

17 funds appropriated under this subtitle that—

18 ‘‘(i) shall apply only to—

19 ‘‘(I) State disbursement of funds 

20 to eligible entities; 

21 ‘‘(II) use of funds for State ad22 ministrative expenses; and 

23 ‘‘(III) State disbursement of as24 sistance provided under section 680; 

25 and 
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1 ‘‘(ii) shall be funded—

2 ‘‘(I) first, through the funds 

3 available for administrative expenses 

4 under section 675C(b)(2); and 

5 ‘‘(II) second, from any funds re6 ceived by the State through assistance 

7 provided under section 680; and 

8 ‘‘(E) submit full financial reports to the 

9 Secretary not later than 6 months following the 

10 end of each fiscal year; and’’; and 

11 (2) in subsection (b)(1), by adding at the end 

12 the following: ‘‘The Secretary, after providing ade13 quate notice, shall withhold administrative funds de14 scribed in section 675C(b)(2) from any State that 

15 fails to comply with the provisions of sections 678A 

16 through 678D(a), and may, after an opportunity for 

17 a hearing conducted within the affected State, with18 hold funds from the State and provide such funds 

19 directly to the eligible entities in such State upon a 

20 demonstration of the compliance by such entities 

21 with the requirements of this subtitle.’’

22 SEC. 113. ACCOUNTABILITY AND REPORTING REQUIRE23 MENT. 

24 Section 678E of the Community Services Block 

25 Grant Act (42 U.S.C. 9917) is amended to read as follows: 
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1 ‘‘SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIRE2 MENTS. 

3 ‘‘(a) STATE ACCOUNTABILITY AND REPORTING RE4 QUIREMENTS.—

5 ‘‘(1) PERFORMANCE MEASUREMENT OF ELIGI6 BLE ENTITIES.—

7 ‘‘(A) IN GENERAL.—Each State that re8 ceives funds under this subtitle shall partici9 pate, and shall ensure that all eligible entities 

10 in the State participate, in a performance meas11 urement system, which may be a performance 

12 measurement system for which the Secretary 

13 facilitated development pursuant to subsection 

14 (b), or an alternative system that the Secretary 

15 is satisfied meets the requirements of sub16 section (b). 

17 ‘‘(B) LOCAL AGENCIES.—The State may 

18 elect to have local agencies that are subcontrac19 tors of the eligible entities under this subtitle 

20 participate in the performance measurement 

21 system. If the State makes that election, ref22 erences in this section to eligible entities shall 

23 be considered to include the local agencies. 

24 ‘‘(C) PERFORMANCE MEASUREMENT OF

25 STATES.—Not later than 1 year after the date 

26 of enactment of the Poverty Reduction and Pre-
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1 vention Act, the Secretary shall establish, in 

2 consultation with States and eligible entities, 

3 performance standards for the State adminis4 tration of block grant funds. Such standards 

5 shall include standards relating to—

6 ‘‘(i) the timeliness of the availability 

7 of State plans for public comment as re8 quired under section 676(a)(2)(B) and of 

9 submission of such plans to the Secretary 

10 as required in section 676(b); 

11 ‘‘(ii) the utilization of the financial 

12 and organizational assessment protocol es13 tablished under section 678B(b), including 

14 the training and skills of State personnel 

15 responsible for such oversight, the comple16 tion of annual monitoring, the identifica17 tion of opportunities for improvement, and 

18 the implementation of plans to enhance the 

19 management capacity and infrastructure of 

20 eligible entities; 

21 ‘‘(iii) the timeliness of the distribution 

22 of block grants funds to eligible entities as 

23 provided in section 675C(a); 

24 ‘‘(iv) the resources made available for 

25 management development at eligible enti-
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1 ties, including monitoring, training, and 

2 assistance with financial management and 

3 program information and assessment sys4 tems; 

5 ‘‘(v) the results of State efforts to co6 ordinate eligible entity programs with 

7 other State programs for low-income indi8 viduals and their families, especially par9 ticipants in the program of block grants to 

10 States for temporary assistance for needy 

11 families under part A of title IV of the So12 cial Security Act (42 U.S.C. 601 et seq.) 

13 and other working families, and to ensure 

14 the participation of eligible entities in the 

15 development of statewide strategies to re16 duce poverty; and 

17 ‘‘(vi) the assistance provided to eligi18 ble entities in securing private partnerships 

19 as required in section 676(b). 

20 ‘‘(2) ANNUAL REPORT.—Each State shall annu21 ally prepare and submit to the Secretary a report on 

22 the measured performance of the State and the eligi23 ble entities in the State. The State shall include in 

24 the report any information collected by the State re25 lating to such performance. Each State shall also in-
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1 clude in the report an accounting of the expenditure 

2 of funds received by the State through the commu3 nity services block grant program, including an ac4 counting of funds spent on administrative costs by 

5 the State and the eligible entities, funds spent by eli6 gible entities on the direct delivery of local services, 

7 and the achievement of national goals established 

8 under the procedures described in this section, and 

9 shall include information on the number of and 

10 characteristics of clients served under this subtitle in 

11 the State, based on data collected from the eligible 

12 entities. The State shall also include in the report a 

13 summary describing the training and technical as14 sistance offered by the State under section 

15 678C(a)(3) during the year covered by the report. 

16 ‘‘(b) LOCAL ENTITY ACCOUNTABILITY AND REPORT17 ING REQUIREMENTS.—

18 ‘‘(1) LOCAL ENTITY DETERMINED GOALS.—In 

19 order to be designated as an eligible entity and to 

20 receive a grant under this subtitle, an entity shall 

21 establish entity-determined goals for reducing pov22 erty in the community, including goals for— 

23 ‘‘(A) leveraging community resources; 

24 ‘‘(B) fostering coordination of Federal, 

25 State, local, private, and other assistance; and 
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1 ‘‘(C) promoting community involvement. 

2 ‘‘(2) DEMONSTRATION THAT GOALS WERE

3 MET.—In order to receive a grant subsequent to the 

4 first grant that is provided to an eligible entity fol5 lowing the date of enactment of the Poverty Reduc6 tion and Prevention Act, the entity shall dem7 onstrate to the State that substantial progress has 

8 been made in meeting the goals of the entity as de9 scribed in paragraph (1). 

10 ‘‘(3) GOALS OR PERFORMANCE MEASURES.—

11 Any specific goals or performance measures, for an 

12 individual eligible entity, that are used in any moni13 toring or review process under this subtitle, shall 

14 be—

15 ‘‘(A) determined by the entity; 

16 ‘‘(B) agreed on by the State involved and 

17 the entity, during the planning process leading 

18 to the grant involved; and 

19 ‘‘(C) incorporated into the grant agree20 ment between the State and entity for each 

21 subsequent award cycle. 

22 ‘‘(4) PROCEDURES.—If the State determines 

23 that a failure to meet goals established under this 

24 subsection shall be a basis for terminating the des25 ignation or reducing the funds of an eligible entity 
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1 under this subtitle, and determines that an eligible 

2 entity has failed to meet the goals, the procedures 

3 set forth in section 678C shall apply. 

4 ‘‘(c) SECRETARY’S ACCOUNTABILITY AND REPORT5 ING REQUIREMENTS.—

6 ‘‘(1) FEDERAL PERFORMANCE MEASURE7 MENT.—The Secretary shall establish goals for the 

8 Department of Health and Human Services Office of 

9 Community Services with respect to—

10 ‘‘(A) the timeliness of the distribution of 

11 funds under this subtitle, including funds for 

12 training and technical assistance; 

13 ‘‘(B) the monitoring of States as provided 

14 for in section 678D; 

15 ‘‘(C) the coordination of other Office of 

16 Community Service programs with the activities 

17 of States and eligible entities under this sub18 title; and 

19 ‘‘(D) the full and timely reporting as re20 quired in this section. 

21 ‘‘(2) LOCAL PERFORMANCE MEASUREMENT.—

22 ‘‘(A) IN GENERAL.—To the maximum ex23 tent practicable, the Secretary shall coordinate 

24 reporting requirements for all programs of the 

25 Department of Health and Human Services 
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1 that are managed by eligible entities so as to 

2 consolidate and reduce the number of reports 

3 required relating to individuals, families, and 

4 uses of grant funds, specifically funds under the 

5 Head Start Act (42 U.S.C. 9831 et seq.), the 

6 Low-Income Home Energy Assistance Act of 

7 1981 (42 U.S.C. 8621 et seq.), child care pro8 grams administered by the Department, and 

9 health related service programs administered by 

10 the Department. 

11 ‘‘(B) TECHNICAL ASSISTANCE.—The Sec12 retary shall provide technical assistance, includ13 ing support for the enhancement of electronic 

14 data systems, to States and to eligible entities 

15 to enhance their capability to collect and report 

16 data for such a system and to aid in their par17 ticipation in such a system. 

18 ‘‘(C) LOCAL ENTITY PERFORMANCE MEAS19 UREMENT SYSTEM.—The Secretary shall assist 

20 in the implementation of a local entity perform21 ance measurement system, and other voluntary 

22 programmatic and results reporting systems, 

23 developed by States, eligible entities, and their 

24 national associations acting together. The Sec25 retary and the developers of such systems shall 
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1 ensure that the set of measures are numerous 

2 enough to cover the full range of services of3 fered by all local eligible entities. Under such a 

4 system, local eligible entities shall only be com5 pelled to collect data on the subset of perform6 ance measures that reflect their community-spe7 cific programs and services currently adopted. 

8 Eligible entities shall not be required under this 

9 subparagraph to alter the collection of data for 

10 any reports provided for other programs within 

11 the Department of Health and Human Services 

12 or other Federal agencies. States shall compile 

13 annual Results Oriented Management and Ac14 countability System reports for the Secretary 

15 under this subparagraph. 

16 ‘‘(3) REPORTING REQUIREMENTS.—For each 

17 fiscal year the Secretary shall, directly or by grant 

18 or contract, prepare a report containing—

19 ‘‘(A) a summary of the planned use of 

20 funds by each State, and the eligible entities in 

21 the State, under the community services block 

22 grant program, as contained in each State plan 

23 submitted pursuant to section 676; 

24 ‘‘(B) a description of how funds were actu25 ally spent by the State and eligible entities in 
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1 the State, including a breakdown of funds spent 

2 on administrative costs and on the direct deliv3 ery of local programs by eligible entities; 

4 ‘‘(C) information on the number of entities 

5 eligible for funds under this subtitle, the num6 ber of low-income persons served under this 

7 subtitle, and such demographic data on the low8 income populations served by eligible entities as 

9 is determined by the Secretary to be feasible; 

10 ‘‘(D) a comparison of the planned uses of 

11 funds for each State and the actual uses of the 

12 funds; 

13 ‘‘(E) a summary of each State’s perform14 ance results, and the results for the eligible en15 tities, as collected and submitted by the States 

16 in accordance with subsection (a)(2); and 

17 ‘‘(F) any additional information that the 

18 Secretary considers to be appropriate to carry 

19 out this subtitle, if the Secretary informs the 

20 States of the need for such additional informa21 tion and allows a reasonable period of time for 

22 the States to collect and provide the informa23 tion. 

24 ‘‘(4) SUBMISSION.—The Secretary shall submit 

25 to the Committee on Education and the Workforce 
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1 of the House of Representatives and the Committee 

2 on Health, Education, Labor, and Pensions of the 

3 Senate the report described in paragraph (2), and 

4 any comments the Secretary may have with respect 

5 to such report. The report shall include definitions 

6 of direct and administrative costs used by the De7 partment of Health and Human Services for pro8 grams funded under this subtitle. 

9 ‘‘(5) COSTS.—Of the funds reserved under sec10 tion 674(b)(3), not more than $500,000 shall be 

11 available to carry out the reporting requirements 

12 contained in paragraph (3).’’. 

13 SEC. 114. LIMITATIONS ON USE OF FUNDS. 

14 Section 678F(c)(1) of the Community Services Block 

15 Grant Act (42 U.S.C. 9918(c)(1)) is amended by inserting 

16 ‘‘religion,’’ after ‘‘race,’’. 

17 SEC. 115. OPERATIONAL RULE. 

18 Section 679(a) of the Community Services Block 

19 Grant Act (42 U.S.C. 9920(a)) is amended by inserting 

20 ‘‘and such organization meets the requirements of this 

21 subtitle’’ before the first period. 

22 SEC. 116. DISCRETIONARY AUTHORITY OF THE SECRETARY. 

23 Section 680 of the Community Services Block Grant 

24 Act (42 U.S.C. 9921) is amended—

25 (1) in subsection (a)—
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1 (A) in paragraph (2)—

2 (i) by redesignating subparagraphs 

3 (B) through (E) as subparagraph (D) 

4 through (G), respectively; 

5 (ii) by striking subparagraph (A) and 

6 inserting the following: 

7 ‘‘(A) ECONOMIC DEVELOPMENT ACTIVI8 TIES.—The Secretary shall make grants de9 scribed in paragraph (1) on a competitive basis 

10 to private, nonprofit organizations that are 

11 community development corporations to provide 

12 technical and financial assistance for economic 

13 development activities, including business, eco14 nomic, and community development projects, 

15 designed to address the economic needs of low16 income individuals and families by creating em17 ployment and business development opportuni18 ties. Such assistance shall include—

19 ‘‘(i) long-term loans (up to 15 years) 

20 or investments for private business enter21 prises; 

22 ‘‘(ii) providing capital to businesses 

23 owned by community development corpora24 tions; and 
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1 ‘‘(iii) marketing and management as2 sistance for businesses providing jobs and 

3 business opportunities to low-income indi4 viduals. 

5 ‘‘(B) FEDERAL INTEREST.—

6 ‘‘(i) IN GENERAL.—The Secretary 

7 shall establish procedures that permit an 

8 eligible entity who receives funds under a 

9 grant to carry out this paragraph, or in10 tangible assets acquired with such funds, 

11 to become the sole owner of the funds or 

12 assets before the end of the 12-year period 

13 beginning at the end of the fiscal year for 

14 which the grant is made. 

15 ‘‘(ii) CONDITIONS.—To be eligible to 

16 become the sole owner, the eligible entity 

17 shall agree—

18 ‘‘(I) to use the funds or assets 

19 for the purposes and uses for which 

20 the grant was made, or purposes and 

21 uses consistent with this subtitle, dur22 ing and after the 12-year period de23 scribed in clause (i), whether or not 

24 the eligible entity continues to be sup25 ported by Federal funds; and 
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1 ‘‘(II) that, when the eligible enti2 ty no longer needs the funds or assets 

3 for purposes and uses described in 

4 subclause (I), the eligible entity shall 

5 request instructions from the Sec6 retary about the disposition of the 

7 funds or assets. 

8 ‘‘(iii) ENCUMBERING.—The eligible 

9 entity may not encumber the assets with10 out the approval of the Secretary. 

11 ‘‘(C) ADMINISTRATIVE REQUIREMENTS.—

12 In a case in which an eligible project under 

13 grant made under this section cannot, for good 

14 cause, be implemented, the Secretary shall es15 tablish a policy to permit the substitution of 

16 other eligible projects. Such policy shall require 

17 that such project have the same impact area, 

18 the same goals, and the same objectives as the 

19 original project and outcomes that are substan20 tially the same as the original project.’’; 

21 (iii) in subparagraph (E) (as so redes22 ignated), by striking ‘‘the community’’ and 

23 inserting ‘‘the service area’’; and 
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1 (iv) in subparagraph (G) (as so redes2 ignated), by striking ‘‘1 percent’’ and in3 serting ‘‘2 percent’’; 

4 (B) in paragraph (3)(B), by striking ‘‘com5 munity’’ and inserting ‘‘water and waste 

6 water’’; and 

7 (C) in paragraph (4), by striking ‘‘individ8 uals and families’’ and inserting ‘‘individuals 

9 and their families’’; and 

10 (2) in subsection (c), by striking ‘‘Labor and 

11 Human Resources’’ and inserting ‘‘Health, Edu12 cation, Labor, and Pensions’’. 

13 SEC. 117. COMMUNITY FOOD AND NUTRITION PROGRAMS. 

14 Section 681 of the Community Services Block Grant 

15 Act (42 U.S.C. 9922) is amended—

16 (1) in subsection (c), by striking ‘‘Labor and 

17 Human Resources’’ and inserting ‘‘Health, Edu18 cation, Labor, and Pensions’’; and 

19 (2) in subsection (d), by striking ‘‘1999 through 

20 2003’’ and inserting ‘‘2004 through 2009’’. 

21 SEC. 118. NATIONAL OR REGIONAL PROGRAMS DESIGNED 

22 TO PROVIDE INSTRUCTIONAL ACTIVITIES 

23 FOR LOW-INCOME YOUTH. 

24 Section 682 of the Community Services Block Grant 

25 Act (42 U.S.C. 9923) is amended—
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1 (1) in subsection (b)(2), by striking ‘‘or treat2 ment’’; and 

3 (2) in subsection (g), by striking ‘‘$15,000,000 

4 for each of fiscal years 1999 through 2003’’ and in5 serting ‘‘$18,000,000 for each of fiscal years 2004 

6 through 2009’’. 

7 TITLE II—LOW-INCOME HOME 

8 ENERGY ASSISTANCE 

9 SEC. 201. SHORT TITLE. 

10 This title may be cited as the ‘‘Low-Income Home 

11 Energy Assistance Amendments of 2004’’. 

12 SEC. 202. REAUTHORIZATION. 

13 (a) IN GENERAL.—Section 2602(b) of the Low-In14 come Home Energy Assistance Act of 1981 (42 U.S.C. 

15 8621(b)) is amended in the first sentence by striking 

16 ‘‘such sums’’ and all that follows through the period and 

17 inserting ‘‘and $3,400,000,000 for each of fiscal years 

18 2004 through 2006, and such sums as may be necessary 

19 for each of fiscal years 2007 through 2010.’’. 

20 (b) PROGRAM YEAR.—Section 2602(c) of the Low21 Income Home Energy Assistance Act of 1981 (42 U.S.C. 

22 8621(c)) is amended by inserting ‘‘authorized’’ after ‘‘pro23 grams and activities’’. 

24 (c) INCENTIVE PROGRAM FOR LEVERAGING NON25 FEDERAL RESOURCES.—Section 2602(d) of the Low-In-
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1 come Home Energy Assistance Act of 1981 (42 U.S.C. 

2 8621(d)) is amended—

3 (1) in paragraph (1), by striking ‘‘1999 

4 through 2004’’ and inserting ‘‘2004 through 2010’’; 

5 and 

6 (2) in paragraph (2), by striking ‘‘1999 

7 through 2004’’ and inserting ‘‘2004 through 2010’’. 

8 SEC. 203. NATURAL DISASTERS AND OTHER EMERGENCIES. 

9 Section 2604(e) of the Low-Income Home Energy 

10 Assistance Act of 1981 (42 U.S.C. 8623(e)) is amended 

11 by adding at the end the following: 

12 ‘‘Notwithstanding any other provision of this section, for 

13 purposes of making determinations under section 

14 2603(1)(C), if the Secretary determines that there is an 

15 increase of at least 20 percent in the cost of home energy 

16 over the previous 5-year average for a duration of a month 

17 or more in 1 or more States or regions, the Secretary shall 

18 declare an energy emergency in the affected area and shall 

19 make available funds as provided in this subsection. Not20 withstanding any other provision of this section, for pur21 poses of making such determinations, if the Secretary de22 termines that the number of heating degree days or cool23 ing days for a month was more than 100 above the 30-

24 year average in 1 or more States or regions, the Secretary 

25 shall declare an energy emergency in the affected area and 
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1 shall make available funds as provided in this sub2 section.’’. 

3 SEC. 204. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE 

4 OPTION. 

5 (a) EVALUATION.—The Comptroller General of the 

6 United States shall conduct an evaluation of the Residen7 tial Energy Assistance Challenge program described in 

8 section 2607B of the Low-Income Home Energy Assist9 ance Act of 1981 (42 U.S.C. 8626b). 

10 (b) REPORT.—Not later than 2 years after the date 

11 of enactment of this Act, the Comptroller General of the 

12 United States shall prepare and submit to the Committee 

13 on Education and the Workforce of the House of Rep14 resentatives and the Committee on Health, Education, 

15 Labor, and Pensions of the Senate a report containing—

16 (1) the findings resulting from the evaluation 

17 described in subsection (a); and 

18 (2) the State evaluations described in para19 graphs (1) and (2) of section 2607B(b) of the Low20 Income Home Energy Assistance Act of 1981 (42 

21 U.S.C. 8626b(b)). 

22 SEC. 205. REPORT TO CONGRESS. 

23 (a) STUDY.—

24 (1) IN GENERAL.—The Secretary of Health and 

25 Human Services shall conduct a study on the Low-
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1 Income Home Energy Assistance Act of 1981 (42 

2 U.S.C. 8621 et seq.) 

3 (2) REQUIREMENTS.—In conducting the study 

4 under subparagraph (A), the Secretary of Health 

5 and Human Services shall— 

6 (A) evaluate the performance of the Low7 Income Home Energy Assistance Program, in8 cluding who the program is serving, the benefits 

9 of the program to recipients, and the ability of 

10 the program to reduce utility arrearage and 

11 shut-offs among low-income households; 

12 (B) develop a protocol for States to collect 

13 information from energy distribution compa14 nies, including electric, natural gas, heating oil, 

15 and propane companies, concerning the fol16 lowing residential customer statistics— 

17 (i) the number of accounts certified as 

18 eligible for energy assistance; 

19 (ii) the number of accounts certified 

20 as eligible for energy assistance and that 

21 are past due; 

22 (iii) the total revenue owed on ac23 counts eligible for energy assistance and 

24 that are past due; 
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1 (iv) the number of disconnection no2 tices issued on accounts eligible for energy 

3 assistance; 

4 (v) the number of disconnections for 

5 nonpayment; 

6 (vi) the number of reconnections; 

7 (vii) the number of accounts eligible 

8 for energy assistance and determined 

9 uncollectible; and 

10 (viii) the energy burden of accounts 

11 eligible for energy assistance; 

12 (C) analyze the public health and safety 

13 threats of hypothermia and hyperthermia due 

14 to a lack of home heating or home cooling, in15 cluding mortality, morbidity, and decrease in 

16 caloric intake; 

17 (D) analyze the affect of the standard of 

18 housing and housing age on energy costs to 

19 low-income households; 

20 (E) evaluate regional difference in cost-of21 living and the ability of low-income families to 

22 meet home energy requirements; and 

23 (F) determine the programmatic impacts 

24 of using 60 percent of State median income to 

25 determine low-income households. 
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1 (b) REPORT.—Not later than 24 months after the 

2 date of enactment of this Act, the Secretary of Health and 

3 Human Services shall submit to Congress a report con4 taining the results of the study conducted under sub5 section (a). 

6 (c) DEFINITION.—In this section, the term ‘‘State’’ 

7 means each of the 50 States and the District of Columbia. 

8 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

9 are authorized to be appropriated to carry out this sub10 section such sums as may be necessary for each of fiscal 

11 years 2004 and 2005. 

12 (e) CONTRACTS.—Using amounts appropriated under 

13 subsection (d), the Secretary of Health and Human Serv14 ices may enter into contracts or jointly financed coopera15 tive agreements or interagency agreements with States 

16 and public agencies and private nonprofit organizations to 

17 conduct the study under subsection (a). 

18 TITLE III—ASSETS FOR INDE19 PENDENCE REAUTHORIZA20 TION ACT 

21 SEC. 301. SHORT TITLE. 

22 This title may be cited as the ‘‘Assets for Independ23 ence Reauthorization Act’’. 
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1 SEC. 302. REAUTHORIZATION OF THE ASSETS FOR INDE2 PENDENCE ACT. 

3 (a) DEFINITION OF QUALIFIED EXPENSES.—Section 

4 404(8) of the Assets for Independence Act (42 U.S.C. 604 

5 note) is amended—

6 (1) in subparagraph (A)—

7 (A) in the matter preceding clause (i), by 

8 inserting ‘‘or to a vendor following approval by 

9 a qualified entity upon submission of an ap10 proved qualified education purchase plan’’ be11 fore the period; and 

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

13 ‘‘(iii) QUALIFIED EDUCATION PUR14 CHASE PLAN.—The term ‘qualified edu15 cation purchase plan’ means a document 

16 that explains the education item to be pur17 chased which—

18 ‘‘(I) is approved by a qualified 

19 entity; and 

20 ‘‘(II) includes a description of the 

21 good to be purchased.’’; 

22 (2) in subparagraph (D), by striking ‘‘eligible’’; 

23 and 

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

25 ‘‘(E) SAVING IN IDAS FOR DEPENDENTS.—

26 Amounts paid to an individual development ac-
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1 count established for the benefit of a dependent 

2 (as such terms is defined for purposes of sub3 paragraph (D)(ii)) of an eligible individual for 

4 the purpose of postsecondary education.’’. 

5 (b) REPEAL OF PROVISION.—Section 405 of the As6 sets for Independence Act (42 U.S.C. 604 note) is amend7 ed by striking subsection (g). 

8 (c) RESERVE FUND.—Section 407 of the Assets for 

9 Independence Act (42 U.S.C. 604 note) is amended—

10 (1) in subsection (b)—

11 (A) in paragraph (1)—

12 (i) by redesignating subparagraphs 

13 (A) and (B) as subparagraphs (B) and 

14 (C), respectively; and 

15 (ii) by inserting before subparagraph 

16 (B) (as so redesignated) the following: 

17 ‘‘(A) all grant funds provided to the quali18 fied entity from the Secretary for the purpose 

19 of the demonstration project as described under 

20 subsection (c)(1);’’ and 

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

22 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

23 paragraph (1)(A) shall be construed to preclude a 

24 qualified entity from depositing other demonstration 

25 project funds into the Reserve Fund.’’; and 
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1 (2) in subsection (d), by inserting ‘‘the date 

2 that is 12 months after’’ after ‘‘upon’’. 

3 (d) USE OF AMOUNTS.—Section 407(c) of the Assets 

4 for Independence Act (42 U.S.C. 604 note) is amended 

5 by adding at the end the following: 

6 ‘‘(4) USE OF NONFEDERAL FUNDS.—

7 ‘‘(A) IN GENERAL.—Notwithstanding para8 graph (3), not more than 20 percent of the 

9 amount of non-Federal funds committed to a 

10 project as matching contributions in accordance 

11 with the application submitted by the qualified 

12 entity under section 405(c)(4) shall be used by 

13 the qualified entity for the purposes described 

14 in subparagraphs (A), (C), and (D) of para15 graph (1). 

16 ‘‘(B) PRIORITY.—In awarding grants 

17 under section 406(b), the Secretary shall give 

18 priority to qualified entities that submit appli19 cations that, with respect to the commitment of 

20 non-Federal funds under section 405(c)(4), pro21 vide assurances that not to exceed 15 percent 

22 of such non-Federal funds will be used by the 

23 qualified entity for the purposes described in 

24 subparagraphs (A), (C), and (D) of paragraph 

25 (1).’’. 
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1 (e) ELIGIBILITY FOR PARTICIPATION.—Section 

2 408(a)(1) of the Assets for Independence Act (42 U.S.C. 

3 604 note) is amended to read as follows: 

4 ‘‘(1) INCOME TEST.—The—

5 ‘‘(A) gross income of the household is 

6 equal to or less than—

7 ‘‘(i) 200 percent of the poverty line 

8 (as determined by the Secretary of Health 

9 and Human Services); 

10 ‘‘(ii) the earned income amount de11 scribed in section 32 of the Internal Rev12 enue Code of 1986 (taking into account 

13 the size of the household); or 

14 ‘‘(iii) 80 percent of the Area Median 

15 Income (as determined by the Department 

16 of Housing and Urban Development); or 

17 ‘‘(B) the modified adjusted gross income of 

18 the household for the previous year does not ex19 ceed $18,000 for an individual filer, $30,000 

20 for a head of household, or $38,000 for a joint 

21 filer.’’. 

22 (f) DEPOSITS BY QUALIFIED ENTITIES.—Section 

23 410 of the Assets for Independence Act (42 U.S.C. 604 

24 note) is amended—
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1 (1) in subsection (a), by striking ‘‘qualified en2 tity—’’ and all that follows through the end and in3 serting the following: ‘‘qualified entity, a matching 

4 contribution of not less than $0.50 and not more 

5 than $4 for every $1 of earned income (as defined 

6 in section 911(d)(2) of Internal Revenue Code of 

7 1986) deposited in the account and interest earned 

8 on that account by a project participant during that 

9 period. Matching contributions shall be made—

10 ‘‘(1) from the non-Federal funds described in 

11 section 405(c)(4); and 

12 ‘‘(2) from the grant made under section 406(b); 

13 based on a ratio relating to the sources of funds described 

14 in paragraph (1) and (2) as determined by the qualified 

15 entity, consistent with the requirements of section 

16 407(c).’’; 

17 (2) by redesignating subsections (b) through (e) 

18 as subsections (c) through (f), respectively; and 

19 (3) by inserting after subsection (a), the fol20 lowing: 

21 ‘‘(b) USE OF EXCESS INTEREST ON MATCHING

22 FUNDS EARNED ON THE RESERVE FUND.—Interest that 

23 accrues on the matching funds earned and held in the Re24 serve Fund, over and above the interest required to match 

25 an individual’s deposits and interest earned in the indi-
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1 vidual development account, shall be used by the qualified 

2 entity to fund existing individual development accounts or 

3 additional individual development accounts.’’. 

4 (g) AUTHORIZATION OF APPROPRIATIONS.—Section 

5 416 of the Assets for Independence Act (42 U.S.C. 604 

6 note) is amended by striking ‘‘and 2003,’’ and inserting 

7 ‘‘and 2003, $25,000,000 for fiscal year 2004, and such 

8 sums as may be necessary for each of fiscal years 2005 

9 through 2008,’’. 

10 (h) APPLICATION OF AMENDMENTS.—In admin11 istering the Assets for Independence Act (42 U.S.C. 604 

12 note), the Secretary of Health and Human Services shall 

13 apply—

14 (1) the amendments made by the Assets for 

15 Independence Act Amendments of 2000 to individ16 uals who were individual development account hold17 ers, and to entities that received grants, under the 

18 Assets for Independence Act either before or after 

19 the date of enactment of the Assets for Independ20 ence Act Amendments of 2000; and 

21 (2) the amendments made by this section to in22 dividuals who were individual development account 

23 holders, and to entities that received grants, under 
53

S 1786 RFH 

1 the Assets for Independence Act either before or 

2 after the date of enactment of this Act.

Passed the Senate February 12, 2004. 

Attest: EMILY J. REYNOLDS, 

Secretary.