IB
Union Calendar No. 388
105TH CONGRESS
2D SESSION
H. R. 4271
[Report No. 105–686]
To amend the Community Services Block Grant Act to reauthorize and
make improvements to that Act.
IN THE HOUSE OF REPRESENTATIVES
JULY 17, 1998
Mr. RIGGS (for himself, Mr. GOODLING, Mr. BARRETT of Nebraska, Mr.
GREENWOOD, and Mr. PETERSON of Pennsylvania) introduced the follow-
ing bill; which was referred to the Committee on Education and the
Workforce
AUGUST 7, 1998
Additional sponsor: Mr. SOUDER
AUGUST 7, 1998
Reported with amendments, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on July 17, 1998]
A BILL
To amend the Community Services Block Grant Act to
reauthorize and make improvements to that Act.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—AMENDMENTS TO THE
COMMUNITY 
SERVICES
BLOCK GRANT ACT
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Community Services
Authorization Act of 1998’’.
SEC. 102. REAUTHORIZATION.
The heading for subtitle B, and sections 671 through
680, of the Community Services Block Grant Act (42 U.S.C.
9901–9909) are amended to read as follows:
‘‘Subtitle B—Community Services
Block Grant Program
‘‘SEC. 671. SHORT TITLE.
‘‘This subtitle may be cited as the ‘Community Serv-
ices Block Grant Act’.
‘‘SEC. 672. PURPOSES AND GOALS.
‘‘The purpose of this subtitle is to provide assistance
to States and local communities, working through a net-
work of community action agencies and other neighborhood-
based organizations, for the reduction of poverty, the revi-
talization of low-income communities, and the empower-
ment of low-income families and individuals in rural and
urban areas to become fully self-sufficient (particularly
families who are attempting to transition off a State pro-
gram carried out under part A of title IV of the Social Secu-
rity Act (42 U.S.C. 601 et seq.)). Such goals may be accom-
plished through—
‘‘(1) the strengthening of community capabilities
for planning, coordinating, and utilizing a broad
range of Federal, State, local, and private resources
for the elimination of poverty, and for helping indi-
viduals and families achieve self-sufficiency;
‘‘(2) greater use of innovative and effective, com-
munity-based approaches to attacking the causes and
effects of poverty and of community breakdown;
‘‘(3) the maximum participation of residents of
the low-income communities and members of the
groups served by programs assisted through the block
grant to empower such individuals to respond to the
unique problems and needs within their communities;
and
‘‘(4) the broadening of the resource base of pro-
grams directed to the elimination of poverty so as to
secure a more active role for private, faith-based,
charitable, and neighborhood organizations in the
provision of services as well as individual citizens,
business, labor, and professional groups who are able
to influence the quantity and quality of opportunities
and services for the poor.
‘‘SEC. 673. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means an entity—
‘‘(A) that is an eligible entity described in
section 673(1) (as in effect on the day before the
date of enactment of the Human Services Reau-
thorization Act of 1998) as of such date of enact-
ment or is designated by the process described in
section 676A (including an organization serving
migrant or seasonal farmworkers that is so de-
scribed or designated); and
‘‘(B) that has a tripartite board or other
mechanism described in subsection (a) or (b), as
appropriate, of section 676B.
‘‘(2) POVERTY
LINE.—The term ‘poverty line’
means the official poverty line defined by the Office
of Management and Budget based on the most recent
data available from the Bureau of the Census. The
Secretary shall revise the poverty line annually (or at
any shorter interval the Secretary determines to be
feasible and desirable) which shall be used as a cri-
terion of eligibility in the community services block
grant program established under this subtitle. The re-
quired revision shall be accomplished by multiplying
the official poverty line by the percentage change in
the Consumer Price Index for All Urban Consumers
during the annual or other interval immediately pre-
ceding the time at which the revision is made. When-
ever a State determines that it serves the objectives of
the block grant program established under this sub-
title, the State may revise the poverty line to not to
exceed 125 percent of the official poverty line other-
wise applicable under this paragraph.
‘‘(3) PRIVATE, NONPROFIT ORGANIZATION.—The
term ‘private, nonprofit organization’ includes a
faith-based organization, to which the provisions of
section 679 shall apply.
‘‘(4) SECRETARY.—The term ‘Secretary’ means
the Secretary of Health and Human Services.
‘‘(5) STATE.—The term ‘State’ means each of the
several States, the District of Columbia, the Common-
wealth of Puerto Rico, Guam, the United States Vir-
gin Islands, American Samoa, and the Common-
wealth of the Northern Mariana Islands, but for fiscal
years ending before October 1, 2001, includes the Fed-
erated States of Micronesia, the Republic of the Mar-
shall Islands, and Palau.
‘‘SEC. 674. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—There are authorized to be appro-
priated $535,000,000 for fiscal year 1999 and such sums
as may be necessary for each of fiscal years 2000 through
2003 to carry out the provisions of this subtitle (other than
sections 681 and 682).
‘‘(b) RESERVATIONS.—Of the amounts appropriated
under subsection (a) for each fiscal year, the Secretary shall
reserve—
‘‘(1) 1⁄2 of 1 percent for carrying out section
675A (relating to payments for territories);
‘‘(2) 11⁄2 percent for activities authorized in sec-
tions 678A through 678F, of which—
‘‘(A) not less than 1⁄2 of the amount reserved
by the Secretary under this paragraph shall be
distributed directly to local eligible entities or to
statewide organizations whose membership is
composed of eligible entities, as required under
section 678A(c) for the purpose of carrying out
activities described in section 678A; and
‘‘(B) 1⁄2 of the remainder of the amount re-
served by the Secretary under this paragraph
shall be used to carry out monitoring, evalua-
tion, and corrective activities described in sec-
tions 678B(c) and 678A; and
‘‘(3) not more than 9 percent for carrying out
section 680 (relating to discretionary activities).
the Secretary to make grants on a competitive basis, pursu-
ant to recommendations submitted to the Secretary by the
Pacific Region Educational Laboratory of the Department
of Education, to the Federated States of Micronesia, the Re-
public of the Marshall Islands, Palau, Guam, American
Samoa, and the Commonwealth of the Northern Mariana
Islands, for the purpose of carrying out programs in accord-
ance with this subtitle.
‘‘(2) Not more than 5 percent of such funds may be
used by the Secretary to compensate the Pacific Region
Educational Laboratory of the Department of Education
for administrative costs incurred in connection with mak-
ing recommendations under paragraph (1).
‘‘(3) Notwithstanding any other provision of law, the
Federated States of Micronesia, the Republic of the Marshall
Islands, and Palau shall not receive any funds under this
subtitle for any fiscal year that begins after September 30,
2001.
‘‘SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES.
‘‘(a) ALLOTMENTS IN GENERAL.—The Secretary shall,
from the amount appropriated under section 674(a) for
each fiscal year that remains after the Secretary makes the
reservations required in section 674(b), allot to each State,
subject to section 677, an amount that bears the same ratio
to such remaining amount as the amount received by the
State for fiscal year 1981 under section 221 of the Economic
Opportunity Act of 1964 bore to the total amount received
by all States for fiscal year 1981 under such section, except
that no State shall receive less than 1⁄4 of 1 percent of the
amount appropriated under section 674(a) for such fiscal
year.
‘‘(b) ALLOTMENTS IN YEARS WITH GREATER AVAIL-
ABLE FUNDS.—
‘‘(1) MINIMUM ALLOTMENTS.—Subject to para-
graphs (2) and (3), if the amount appropriated under
section 674(a) for a fiscal year that remains after the
Secretary makes the reservations required in section
674(b) exceeds $345,000,000, the Secretary shall allot
to each State not less than 1⁄2 of 1 percent of the
amount appropriated under section 674(a) for such
fiscal year.
‘‘(2) MAINTENANCE OF FISCAL YEAR 1990 LEV-
ELS.—Paragraph (1) shall not apply with respect to
a fiscal year if the amount allotted under subsection
(a) to any State for that year is less than the amount
allotted under subsection (a) to such State for fiscal
year 1990.
‘‘(3) MAXIMUM ALLOTMENTS.—The amount al-
lotted under paragraph (1) to a State shall be reduced
for a fiscal year, if necessary, so that the aggregate
amount allotted to such State under such paragraph
and subsection (a) does not exceed 140 percent of the
aggregate amount allotted to such State under the
corresponding provisions of this subtitle for the fiscal
year preceding the fiscal year for which a determina-
tion is made under this subsection.
‘‘(c) ALLOTMENT OF ADDITIONAL FUNDS.—Notwith-
standing subsections (a) and (b), in any fiscal year in
which the amount appropriated under section 674(a) ex-
ceeds the amount appropriated under such section for fiscal
year 1999, such excess shall be allotted among the States
proportionately based on—
‘‘(1) the number of public assistance recipients
in the respective States;
‘‘(2) the number of unemployed individuals in
the respective States; and
‘‘(3) the number of individuals with incomes
below the poverty line in the respective States.
‘‘(d) PAYMENTS.—The Secretary shall make payments
to eligible States from the allotments made under this sec-
tion. The Secretary shall make payments for the grants in
accordance with section 6503(a) of title 31, United States
Code.
‘‘(e) DEFINITION.—For purposes of this section, the
term ‘State’ does not include Guam, American Samoa, the
United States Virgin Islands, and the Commonwealth of the
Northern Mariana Islands.
‘‘SEC. 675C. USES OF FUNDS.
‘‘(a) GRANTS
TO LOCAL ELIGIBLE ENTITIES
AND
OTHER ORGANIZATIONS.—
‘‘(1) IN GENERAL.—Not less than 90 percent of
the funds allotted to a State under section 675B shall
be used by the State to make grants for the purposes
described in section 672 to eligible entities.
‘‘(2) OBLIGATIONAL AUTHORITY.—Funds distrib-
uted to eligible entities through grants made in ac-
cordance with paragraph (1) for a fiscal year shall be
available for obligation during that fiscal year and
the succeeding fiscal year, in accordance with para-
graph (3).
‘‘(3) RECAPTURE AND REDISTRIBUTION OF UN-
OBLIGATED FUNDS.—
‘‘(A) AMOUNT.—Beginning on October 1,
2000, a State may recapture and redistribute
funds distributed to an eligible entity through a
grant made under paragraph (1) that are unob-
ligated at the end of a fiscal year if such unobli-
gated funds exceed 20 percent of the amount so
distributed to such eligible entity for such fiscal
year.
‘‘(B) REDISTRIBUTION.—In redistributing
funds recaptured in accordance with this para-
graph, States shall redistribute such funds to an
eligible entity, or require the original recipient of
the funds to redistribute the funds to a private,
nonprofit organization, located within the com-
munity served by the original recipient of the
funds, for activities consistent with the purposes
of this subtitle.
‘‘(b) STATEWIDE ACTIVITIES.—
‘‘(1) USE OF REMAINDER.—If a State uses less
than 100 percent of the State allotment to make
grants under subsection (a), the State shall use the re-
mainder of the allotment (subject to paragraph (2))
for—
‘‘(A) providing training and technical as-
sistance to those entities in need of such training
and assistance;
‘‘(B) coordinating State-operated programs
and services targeted to low-income children and
families with services provided by eligible enti-
ties and other organizations funded under this
subtitle, including detailing appropriate employ-
ees of State or local agencies to entities funded
under this subtitle, to ensure increased access to
services provided by such State or local agencies;
‘‘(C) supporting statewide coordination and
communication among eligible entities;
‘‘(D) analyzing the distribution of funds
made available under this subtitle within the
State to determine if such funds have been tar-
geted to the areas of greatest need;
‘‘(E) supporting asset-building programs for
low-income individuals, such as programs sup-
porting individual development accounts;
‘‘(F) supporting innovative programs and
activities conducted by community action agen-
cies or other neighborhood-based organizations to
eliminate poverty, promote self-sufficiency, and
promote community revitalization;
‘‘(G) supporting other activities, consistent
with the purposes of this subtitle; and
‘‘(H) State charity tax credits as described
in subsection (c).
‘‘(2) ADMINISTRATIVE
CAP.—No State may
spend more than the greater of $55,000, or 5 percent,
of the State’s allotment received under section 675B
for administrative expenses, including monitoring ac-
tivities. Funds to be spent for such expenses shall be
taken from the portion of the State allotment that re-
mains after the State makes grants to eligible entities
under subsection (a). The cost of activities conducted
under paragraph (1)(A) shall not be considered to be
administrative expenses.
‘‘(c)(1) Notwithstanding any other provision of law
and subject to paragraph (2), if there is in effect under
State law a charity tax credit, then the State may use for
any purpose the amount of the allotment that is not ex-
pended under subsections (a) and (b).
‘‘(2) The aggregate amount a State may use under
paragraph (1) during a fiscal year shall not exceed 100 per-
cent of the revenue loss of the State during the fiscal year
that is attributable to the charity tax credit, as determined
by the Secretary of the Treasury without regard to any such
revenue loss occurring before January 1, 1999.
‘‘(3) For purposes of this subsection:
‘‘(A) CHARITY TAX CREDIT.—The term ‘charity
tax credit’ means a nonrefundable credit against
State income tax (or, in the case of a State which
does not impose an income tax, a comparable benefit)
which is allowable for contributions, in cash or in
kind, to qualified charities.
‘‘(B) QUALIFIED CHARITY.—
‘‘(i) IN
GENERAL.—The term ‘qualified
charity’ means any organization—
‘‘(I) which is—
‘‘(aa) 
described 
in 
section
501(c)(3) of the Internal Revenue Code
of 1986 and exempt from tax under
section 501(a) of such Code;
‘‘(bb) a community action agency
as defined in the Economic Oppor-
tunity Act of 1964; or
‘‘(cc) a public housing agency as
defined in section 3(b)(6) of the United
States Housing Act of 1937 (42 U.S.C.
1437A(b)(6));
‘‘(II) which is certified by the appro-
priate State authority as meeting the re-
quirements of clauses (iii) and (iv); and
‘‘(III) if such organization is otherwise
required to file a return under section 6033
of such Code, which elects to treat the infor-
mation required to be furnished by clause
(v) as being specified in section 6033(b) of
such Code.
‘‘(ii) CERTAIN CONTRIBUTIONS TO COLLEC-
TION
ORGANIZATIONS
TREATED
AS
CONTRIBU-
TIONS TO QUALIFIED CHARITY.—
‘‘(I) IN GENERAL.—A contribution to a
collection organization shall be treated as a
contribution to a qualified charity if the
donor designates in writing that the con-
tribution is for the qualified charity.
‘‘(II) COLLECTION
ORGANIZATION.—
The term ‘collection organization’ means an
organization described in section 501(c)(3)
of such Code and exempt from tax under
section 501(a) of such Code—
‘‘(aa) which solicits and collects
gifts and grants which, by agreement,
are distributed to qualified charities
described in clause (i);
‘‘(bb) which distributes to quali-
fied charities described in clause (i) at
least 90 percent of the gifts and grants
it receives that are designated for such
qualified charities; and
‘‘(cc) which meets the require-
ments of clause (vi).
‘‘(iii) CHARITY
MUST
PRIMARILY
ASSIST
POOR INDIVIDUALS.—
‘‘(I) IN
GENERAL.—An organization
meets the requirements of this clause only if
the appropriate State authority reasonably
expects that the predominant activity of
such organization will be the provision of
direct services within the United States to
individuals and families whose annual in-
comes generally do not exceed 185 percent of
the official poverty line (as defined by the
Office of Management and Budget) in order
to prevent or alleviate poverty among such
individuals and families.
‘‘(II) NO RECORDKEEPING IN CERTAIN
CASES.—An organization shall not be re-
quired to establish or maintain records with
respect to the incomes of individuals and
families for purposes of subclause (I) if such
individuals or families are members of
groups which are generally recognized as
including substantially only individuals
and families described in subclause (I).
‘‘(III) FOOD
AID
AND
HOMELESS
SHELTERS.—Except as otherwise provided
by the appropriate State authority, for pur-
poses of subclause (I), services to individ-
uals in the form of—
‘‘(aa) donations of food or meals;
or
‘‘(bb) temporary shelter to home-
less individuals;
shall be treated as provided to individuals
described in subclause (I) if the location
and operation of such services are such that
the service provider may reasonably con-
clude that the beneficiaries of such services
are predominantly individuals described in
subclause (I).
‘‘(iv) MINIMUM EXPENSE REQUIREMENT.—
‘‘(I) IN
GENERAL.—An organization
meets the requirements of this clause only if
the appropriate State authority reasonably
expects that the annual poverty program ex-
penses of such organization will not be less
than 75 percent of the annual aggregate ex-
penses of such organization.
‘‘(II) POVERTY PROGRAM EXPENSE.—
For purposes of subclause (I)—
‘‘(aa) IN
GENERAL.—The term
‘poverty program expense’ means any
expense in providing program services
referred to in clause (iii).
‘‘(bb) EXCEPTIONS.—Such term
shall not include any management or
general expense, any expense for the
purpose of influencing legislation (as
defined in section 4911(d) of the Inter-
nal Revenue Code of 1986), any ex-
pense for the purpose of fundraising,
any expense for a legal service pro-
vided on behalf of any individual re-
ferred to in clause (iii), any expense
for providing tuition assistance relat-
ing to compulsory school attendance,
and any expense which consists of a
payment to an affiliate of the organi-
zation.
‘‘(v) REPORTING
REQUIREMENT.—The in-
formation required to be furnished under this
clause is—
‘‘(i) the percentages determined by di-
viding the following categories of the orga-
nization’s expenses for the year by its total
expenses for the year: program services,
management expenses, general expenses,
fundraising expenses, and payments to af-
filiates; and
‘‘(ii) the category or categories (includ-
ing food, shelter, education, substance abuse,
job training, or otherwise) of services which
constitute its predominant activities.
‘‘(vi) ADDITIONAL REQUIREMENTS FOR COL-
LECTION ORGANIZATIONS.—The requirements of
this clause are met if the organization—
‘‘(I) maintains separate accounting for
revenues and expenses; and
‘‘(II) makes available to the public its
administrative and fundraising costs and
information as to the organizations receiv-
ing funds from it and the amount of such
funds.
‘‘(vii) SPECIAL RULE FOR STATES REQUIR-
ING TAX UNIFORMITY.—In the case of a State—
‘‘(I) which has a constitutional re-
quirement of tax uniformity; and
‘‘(II) which, as of December 31, 1997,
imposed a tax on personal income with—
‘‘(aa) a single flat rate applicable
to all earned and unearned income (ex-
cept insofar as any amount is not
taxed pursuant to tax forgiveness pro-
visions); and
‘‘(bb) no generally available ex-
emptions or deductions to individuals;
the requirement of paragraph (2) shall be treated
as met if the amount of the credit is limited to
a uniform percentage (but not greater than 25
percent) of State personal income tax liability
(determined without regard to credits).
‘‘SEC. 676. APPLICATION AND PLAN.
‘‘(a) DESIGNATION OF LEAD AGENCY.—
‘‘(1) DESIGNATION.—The chief executive officer
of a State desiring to receive an allotment under this
subtitle shall designate, in an application submitted
to the Secretary under subsection (b), an appropriate
State agency that complies with the requirements of
paragraph (2) to act as a lead agency for purposes
of carrying out State activities under this subtitle.
‘‘(2) DUTIES.—The lead agency shall—
‘‘(A) develop the State plan to be submitted
to the Secretary under subsection (b);
‘‘(B) in conjunction with the development of
the State plan as required under subsection (b),
hold at least 1 hearing in the State with suffi-
cient time and statewide distribution of notice of
such hearing, to provide to the public an oppor-
tunity to comment on the proposed use and dis-
tribution of funds to be provided through the al-
lotment for the period covered by the State plan;
and
‘‘(C) conduct reviews of eligible entities
under section 678B.
‘‘(3) LEGISLATIVE
HEARING.—The State shall
hold at least 1 legislative hearing every 3 years in
conjunction with the development of the State plan.
‘‘(b) STATE APPLICATION AND PLAN.—Beginning with
fiscal year 2000, to be eligible to receive an allotment under
this subtitle, a State shall prepare and submit to the Sec-
retary an application and State plan covering a period of
not less than 1 fiscal year and not more than 2 fiscal years.
The plan shall be submitted not later than 30 days prior
to the beginning of the first fiscal year covered by the plan,
and shall contain such information as the Secretary shall
require, including—
‘‘(1) an assurance that funds made available
through the allotment will be used to support activi-
ties that are designed to assist low-income families
and individuals, including families and individuals
receiving assistance under title IV of the Social Secu-
rity Act, homeless families and individuals, migrant
or seasonal farmworkers, and elderly low-income indi-
viduals and families, and a description of how such
activities will enable the families and individuals—
‘‘(A) to remove obstacles and solve problems
that block the achievement of self-sufficiency
(particularly for families and individuals who
are attempting to transition off a State program
carried out under title IV of the Social Security
Act);
‘‘(B) to secure and retain meaningful em-
ployment;
‘‘(C) to attain an adequate education with
particular attention toward improving literacy
skills of the low-income families in the commu-
nity, which may include family literacy initia-
tives;
‘‘(D) to make better use of available income;
‘‘(E) to obtain and maintain adequate
housing and a suitable living environment;
‘‘(F) to obtain emergency assistance through
loans, grants, or other means to meet immediate
and urgent individual and family needs;
‘‘(G) to achieve greater participation in the
affairs of the community, including activities
that strengthen and improve the relationship
with local law enforcement agencies, which may
include activities such as neighborhood or com-
munity policing efforts;
‘‘(H) to address the needs of youth in low-
income communities through youth development
programs that support the primary role of the
family, give priority to prevention of youth prob-
lems and crime, promote increased community
coordination and collaboration in meeting the
needs of youth, and support development and ex-
pansion of innovative community-based youth
development programs, which may include after-
school child care programs; and
‘‘(I) to make more effective use of, and to
coordinate with, other programs related to the
purposes of this subtitle (including State welfare
reform efforts);
‘‘(2) a description of how the State intends to
use discretionary funds made available from the re-
mainder of the allotment described in section 675C(b)
in accordance with this subtitle, including a descrip-
tion of how the State will support innovative commu-
nity and neighborhood-based initiatives related to the
purposes of this subtitle;
‘‘(3) based on information provided by eligible
entities in the State, a description of—
‘‘(A) the service delivery system, for services
provided or coordinated with funds made avail-
able through the allotment, targeted to low-in-
come individuals and families in communities
within the State;
‘‘(B) a description of how linkages will be
developed to fill identified gaps in the services,
through the provision of information, referrals,
case management, and followup consultations;
‘‘(C) a description of how funds made avail-
able through the allotment will be coordinated
with other public and private resources; and
‘‘(D) a description of how the funds will be
used to support innovative community and
neighborhood-based initiatives related to the pur-
poses of this subtitle which may include father-
hood and other initiatives with the goal of
strengthening families and encouraging parental
responsibility;
‘‘(4) an assurance that local eligible entities in
the State will provide, on an emergency basis, for the
provision of such supplies and services, nutritious
foods, and related services, as may be necessary to
counteract conditions of starvation and malnutrition
among low-income individuals;
‘‘(5) an assurance that the State and the local el-
igible entities in the State will coordinate, and estab-
lish linkages between, governmental and other social
services programs to assure the effective delivery of
such services to low-income individuals and to avoid
duplication of such services (including a description
of how the State and the local eligible entities will co-
ordinate with State and local workforce investment
systems in the provision of employment and training
services in the State and in local communities);
‘‘(6) an assurance that the State will ensure co-
ordination between antipoverty programs in each
community, and ensure, where appropriate, that
emergency energy crisis intervention programs under
title XXVI (relating to low-income home energy as-
sistance) are conducted in such community;
tion, or low-income individuals, to be inadequately
represented on the board (or other mechanism) of the
eligible entity to petition for adequate representation;
‘‘(11) an assurance that the State will secure
from each eligible entity, as a condition to receipt of
funding by the entity under this subtitle for a pro-
gram, a community action plan (which shall be sub-
mitted to the Secretary, at the request of the Sec-
retary, with the State plan) that includes a commu-
nity-needs assessment for the community served,
which may be coordinated with community-needs as-
sessments conducted for other programs;
‘‘(12) an assurance that the State and all eligible
entities in the State will, not later than fiscal year
2001, participate in the Results Oriented Manage-
ment and Accountability System, another perform-
ance measure system established pursuant to section
678E(b), or an alternative system for measuring per-
formance and results that meets the requirements of
that section, and a description of outcome measures
to be used to measure eligible entity performance in
promoting self-sufficiency, family stability, and com-
munity revitalization; and
‘‘(13) information describing how the State will
carry out the assurances described in this subsection.
‘‘(c) FUNDING TERMINATION OR REDUCTIONS.—For
purposes of making a determination in accordance with
subsection (b)(8) with respect to—
‘‘(1) a funding reduction, the term ‘cause’ in-
cludes—
‘‘(A) a statewide redistribution of funds
provided under this subtitle to respond to—
‘‘(i) the results of the most recently
available census or other appropriate data;
‘‘(ii) the designation of a new eligible
entity; or
‘‘(iii) severe economic dislocation; or
‘‘(B) the failure of an eligible entity to com-
ply with the terms of an agreement to provide
services under this subtitle; and
‘‘(2) a termination, the term ‘cause’ includes the
material failure of an eligible entity to comply with
the terms of such an agreement and the State plan to
provide services under this subtitle or the consistent
failure of the entity to achieve performance measures
as determined by the State.
‘‘(d) PROCEDURES AND INFORMATION.—The Secretary
may prescribe procedures only for the purpose of assessing
the effectiveness of eligible entities in carrying out the pur-
poses of this subtitle.
‘‘(e) REVISIONS AND INSPECTION.—
‘‘(1) REVISIONS.—The chief executive officer of
each State may revise any plan prepared under this
section and shall submit the revised plan to the Sec-
retary.
‘‘(2) PUBLIC INSPECTION.—Each plan or revised
plan prepared under this section shall be made avail-
able for public inspection within the State in such a
manner as will facilitate review of, and comment on,
the plan.
‘‘SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGI-
BLE ENTITIES IN UNSERVED AREAS.
‘‘(a) QUALIFIED ORGANIZATION IN OR NEAR AREA.—
‘‘(1) IN GENERAL.—If any geographic area of a
State is not, or ceases to be, served by an eligible en-
tity under this subtitle, and if the chief executive offi-
cer of the State decides to serve such area, the chief
executive officer may solicit applications from, and
designate as an eligible entity—
‘‘(A) a private nonprofit eligible entity lo-
cated in an area contiguous to or within reason-
able proximity of the unserved area that is al-
ready providing related services in the unserved
area; or
‘‘(B) a private nonprofit organization that
is geographically located in the unserved area
that is capable of providing a broad range of
services designed to eliminate poverty and foster
self-sufficiency and that meets the requirements
of this subtitle.
‘‘(2) REQUIREMENT.—In order to serve as the el-
igible entity for the area, an entity described in para-
graph (1)(B) shall agree to add additional members
to the board of the entity to ensure adequate represen-
tation—
‘‘(A) in each of the 3 required categories de-
scribed in subparagraphs (A), (B), and (C) of
section 676B(a)(2), by members that reside in
the community comprised by the unserved area;
and
‘‘(B) in the category described in section
676B(a)(2), by members that reside in the neigh-
borhood served.
‘‘(b) SPECIAL CONSIDERATION.—In designating an el-
igible entity under subsection (a), the chief executive officer
shall grant the designation to an organization of dem-
onstrated effectiveness in meeting the goals and purposes
of this subtitle and may give priority, in granting the des-
ignation, to local eligible entities that are already providing
related services in the unserved area, consistent with the
needs identified by a community-needs assessment.
‘‘(c) NO QUALIFIED ORGANIZATION
IN
OR NEAR
AREA.—If no private, nonprofit organization is identified
or determined to be qualified under subsection (a) to serve
the unserved area as an eligible entity the chief executive
officer may designate an appropriate political subdivision
of the State to serve as an eligible entity for the area. In
order to serve as the eligible entity for that area, the politi-
cal subdivision shall have a board or other mechanism as
required in section 676B(b).
‘‘SEC. 676B. TRIPARTITE BOARDS.
‘‘(a) PRIVATE NONPROFIT ENTITIES.—
‘‘(1) BOARD.—In order for a private, nonprofit
entity to be considered to be an eligible entity for pur-
poses of section 673(1), the entity shall administer the
community services block grant program through a
tripartite board described in paragraph (2) that fully
participates in the development and implementation
of the program to serve low-income communities or
groups.
‘‘(2) SELECTION AND COMPOSITION OF BOARD.—
The members of the board referred to in paragraph
(1) shall be selected by the entity and the board shall
be composed so as to assure that—
‘‘(A) 1⁄3 of the members of the board are
elected public officials, holding office on the date
of selection, or their representatives, except that
if the number of elected officials reasonably
available and willing to serve on the board is less
than 1⁄3 of the membership of the board, member-
ship on the board of appointive public officials
or their representatives may be counted in meet-
ing such 1⁄3 requirement;
‘‘(B) not fewer than 1⁄3 of the members are
persons chosen in accordance with democratic se-
lection procedures adequate to assure that these
members are representative of low-income indi-
viduals and families in the neighborhood served;
‘‘(C) the remainder of the members are offi-
cials or members of business, industry, labor, re-
ligious, law enforcement, education, or other
major groups and interests in the community
served; and
‘‘(D) each representative of low-income in-
dividuals and families selected to represent a
specific neighborhood within a community under
subparagraph (B) resides in the neighborhood
represented by the member.
‘‘(b) PUBLIC ORGANIZATIONS.—In order for a public
organization to be considered to be an eligible entity for
purposes of section 673(1), the entity shall administer the
community services block grant program through—
‘‘(1) a tripartite board, which shall have mem-
bers selected by the organization and shall be com-
posed so as to assure that not fewer than 1⁄3 of the
members are persons chosen in accordance with demo-
cratic selection procedures adequate to assure that
these members—
‘‘(A) are representative of low-income indi-
viduals and families in the neighborhood served;
‘‘(B) reside in the neighborhood served; and
‘‘(C) are able to participate actively in the
planning and implementation of programs fund-
ed under this subtitle; or
‘‘(2) another mechanism specified by the State to
assure decisionmaking and participation by low-in-
come individuals in the planning, administration,
and evaluation of programs funded under this sub-
title.
‘‘SEC. 677. PAYMENTS TO INDIAN TRIBES.
‘‘(a) RESERVATION.—If, with respect to any State, the
Secretary—
‘‘SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.
‘‘(a) ACTIVITIES.—The Secretary shall use the
amounts reserved in section 674(b)(2) for training, tech-
nical assistance, planning, evaluation, performance meas-
urement, corrective action activities (to correct pro-
grammatic deficiencies of eligible entities), reporting, and
data collection activities related to programs carried out
under this subtitle, and in accordance with subsection (c).
Training and technical assistance activities may be carried
out by the Secretary through grants, contracts, or coopera-
tive agreements with eligible entities or with organizations
or associations whose membership is composed of eligible
entities or agencies that administer programs for eligible
entities.
‘‘(b) PROCESS.—The process for determining the train-
ing and technical assistance to be carried out under this
section shall—
‘‘(1) ensure that the needs of eligible entities and
programs relating to improving program quality, in-
cluding financial management practices, are ad-
dressed to the maximum extent feasible; and
‘‘(2) incorporate mechanisms to ensure respon-
siveness to local needs, including an ongoing proce-
dure for obtaining input from the national and State
network of eligible entities.
‘‘(c) DISTRIBUTION REQUIREMENT.—Of the amounts
reserved under section 674(b)(2) for activities to be carried
out under this section, not less than 1⁄2 of such amounts
shall be distributed directly to local eligible entities or to
statewide organizations whose membership is composed of
eligible entities for the purpose of improving program qual-
ity (including financial management practices), manage-
ment information and reporting systems, measurement of
program results, and for the purpose of ensuring responsive-
ness to local neighborhood needs.
‘‘SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.
‘‘(a) IN GENERAL.—In order to determine whether eli-
gible entities meet the performance goals, administrative
standards, financial management requirements, and other
requirements of a State, the State shall conduct the follow-
ing reviews of eligible entities:
‘‘(1) A full onsite review of each such entity at
least once during each 3-year period.
‘‘(2) An onsite review of each newly designated
entity immediately after the completion of the first
year in which such entity receives funds through the
community services block grant program.
‘‘(3) Followup reviews including prompt return
visits to eligible entities, and their programs, that fail
to meet the goals, standards, and requirements estab-
lished by the State.
‘‘(4) Other reviews as appropriate, including re-
views of entities with programs that have had other
Federal, State, or local grants terminated for cause.
‘‘(b) REQUESTS.—The State may request training and
technical assistance from the Secretary as needed to comply
with the requirements of this section.
‘‘(c) EVALUATIONS BY THE SECRETARY.—The Sec-
retary shall conduct in several States in each fiscal year
evaluations and investigations of the use of funds received
by the States under this subtitle in order to evaluate compli-
ance with the provisions of this subtitle, and especially with
respect to compliance with subsection (b) of section 676. A
report of such evaluations, together with recommendations
of improvements designed to enhance the benefit and impact
to people in need, shall be sent to each State evaluated.
Upon receiving the report the State shall submit a plan
of action in response to the recommendations contained in
the report. The results of the evaluations shall be submitted
annually to the Chairman of the Committee on Education
and the Workforce of the House of Representatives and the
Chairman of the Committee on Labor and Human Re-
sources of the Senate as part of the report submitted by
the Secretary in accordance with section 678E(b)(2).
‘‘SEC. 678C. CORRECTIVE ACTION; TERMINATION AND RE-
DUCTION OF FUNDING.
‘‘(a) DETERMINATION.—If the State determines, on the
basis of a review pursuant to subsection 678B, that an eligi-
ble entity materially fails to comply with the terms of an
agreement, or the State plan, to provide services under this
subtitle or to meet appropriate standards, goals, and other
requirements established by the State (including perform-
ance objectives), the State shall—
‘‘(1) inform the entity of the deficiency to be cor-
rected;
‘‘(2) require the entity to correct the deficiency;
‘‘(3)(A) offer training and technical assistance, if
appropriate, to help correct the deficiency, and pre-
pare and submit to the Secretary a report describing
the training and technical assistance offered; or
‘‘(B) if the State determines that such training
and technical assistance are not appropriate, prepare
and submit to the Secretary a report stating the rea-
sons for the determination;
‘‘(4)(A) at the discretion of the State (taking into
account the seriousness of the deficiency and the time
reasonably required to correct the deficiency), allow
the entity to develop and implement, within 60 days
after being informed of the deficiency, a quality im-
provement plan to correct such deficiency within a
reasonable period of time, as determined by the State;
and
‘‘(B) not later than 30 days after receiving from
an eligible entity a proposed quality improvement
plan pursuant to subparagraph (A), either approve
such proposed plan or specify the reasons why the
proposed plan cannot be approved; and
‘‘(5) after providing adequate notice and an op-
portunity for a hearing, initiate proceedings to termi-
nate the designation of or reduce the funding under
this subtitle of the eligible entity unless the entity cor-
rects the deficiency.
‘‘(b) REVIEW.—A determination to terminate the des-
ignation or reduce the funding of an eligible entity is re-
viewable by the Secretary. The Secretary shall, upon re-
quest, review such a determination. The review shall be
completed not later than 120 days after the determination
to terminate the designation or reduce the funding. If the
review is not completed within 120 days, the determination
of the State shall become final at the end of the 120th day.
‘‘(c) DIRECT ASSISTANCE.—Whenever a State violates
the assurances contained in section 676(b)(8) and termi-
nates or reduces the funding of an eligible entity prior to
the completion of the State’s hearing and the Secretary’s
review as required in subsection (b), the Secretary shall as-
sume responsibility for providing financial assistance to the
eligible entity affected until the violation is corrected. In
such case, the allotment for the State shall be reduced by
an amount equal to the funds provided under this sub-
section to such eligible entity.
‘‘SEC. 678D. FISCAL CONTROLS, AUDITS, AND WITHHOLD-
ING.
‘‘(a) FISCAL CONTROLS, PROCEDURES, AUDITS, AND
INSPECTIONS.—
‘‘(1) IN GENERAL.—A State that receives funds
under this subtitle shall—
‘‘(A) establish fiscal control and fund ac-
counting procedures necessary to assure the
proper disbursal of and accounting for Federal
funds paid to the State under this subtitle, in-
cluding procedures for monitoring the funds pro-
vided under this subtitle;
‘‘(B) ensure that cost and accounting stand-
ards of the Office of Management and Budget
apply to a recipient of funds under this subtitle;
‘‘(C) prepare, at least every year in accord-
ance with paragraph (2) an audit of the expend-
itures of the State of amounts received under this
subtitle and amounts transferred to carry out the
purposes of this subtitle; and
‘‘(D) make appropriate books, documents,
papers, and records available to the Secretary
and the Comptroller General of the United
States, or any of their duly authorized represent-
atives, for examination, copying, or mechanical
reproduction on or off the premises of the appro-
priate entity upon a reasonable request for the
items.
‘‘(2) AUDITS.—Each audit required by sub-
section (a)(1)(C) shall be conducted by an entity inde-
pendent of any agency administering activities or
services carried out under this subtitle and shall be
conducted in accordance with generally accepted ac-
counting principles. Within 30 days after the comple-
tion of each such audit in a State, the chief executive
officer of the State shall submit a copy of such audit
to any eligible entity that was the subject of the audit
at no charge, to the legislature of the State, and to
the Secretary.
‘‘(3) REPAYMENTS.—The State shall repay to the
United States amounts found not to have been ex-
pended in accordance with this subtitle or the Sec-
retary may offset such amounts against any other
amount to which the State is or may become entitled
under this subtitle.
‘‘(b) WITHHOLDING.—
‘‘(1) IN
GENERAL.—The Secretary shall, after
providing adequate notice and an opportunity for a
hearing conducted within the affected State, withhold
funds from any State that does not utilize the State
allotment substantially in accordance with the provi-
sions of this subtitle, including the assurances such
State provided under section 676.
‘‘(2) RESPONSE TO COMPLAINTS.—The Secretary
shall respond in an expeditious and speedy manner
to complaints of a substantial or serious nature that
a State has failed to use funds in accordance with the
provisions of this subtitle, including the assurances
provided by the State under section 676. For purposes
of this paragraph, a complaint of a failure to meet
any 1 of the assurances provided under section 676
that constitutes disregarding that assurance shall be
considered to be a complaint of a serious nature.
‘‘(3) INVESTIGATIONS.—Whenever the Secretary
determines that there is a pattern of complaints of
failures described in paragraph (2) from any State in
any fiscal year, the Secretary shall conduct an inves-
tigation of the use of funds received under this subtitle
by such State in order to ensure compliance with the
provisions of this subtitle.
‘‘SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIRE-
MENTS.
‘‘(a) STATE ACCOUNTABILITY AND REPORTING RE-
QUIREMENTS.—
‘‘(1) PERFORMANCE MEASUREMENT.—
‘‘(A) IN
GENERAL.—By October 1, 2001,
each State that receives funds under this subtitle
shall participate, and shall ensure that all eligi-
ble entities in the State participate, in a per-
formance measurement system, which may be a
performance measurement system established by
the Secretary pursuant to subsection (b), or an
alternative system that meets the requirements of
subsection (b).
‘‘(B) LOCAL
AGENCIES.—The State may
elect to have local agencies who are subcontrac-
tors of the eligible entities under this subtitle
participate in the performance measurement sys-
tem. If the State makes that election, references
in this section to eligible entities shall be consid-
ered to include the local agencies.
‘‘(2) ANNUAL REPORT.—Each State shall annu-
ally prepare and submit to the Secretary a report on
the measured performance of the State and the eligible
entities in the State. Each State shall also include in
the report an accounting of the expenditure of funds
received by the State through the community services
block grant program, including an accounting of
funds spent on indirect services or administrative
costs by the State and the eligible entities, and funds
spent by eligible entities on the direct delivery of local
services, and shall include information on the number
of and characteristics of clients served under this sub-
title in the State, based on data collected from the eli-
gible entities. The State shall also include in the re-
port a summary describing the training and technical
assistance offered by the State under section
678C(a)(3) during the year covered by the report.
‘‘(b) SECRETARY’S ACCOUNTABILITY AND REPORTING
REQUIREMENTS.—
‘‘(1) PERFORMANCE
MEASUREMENT.—The Sec-
retary, in collaboration with the States and with eli-
gible entities throughout the Nation, shall facilitate
the development of 1 or more model performance
measurement systems, which may be used by the
States and by eligible entities to measure their per-
formance in carrying out the requirements of this
subtitle and in achieving the goals of their commu-
nity action plans. The Secretary shall provide tech-
nical assistance, including support for the enhance-
ment of electronic data systems, to States and to eligi-
ble entities to enhance their capability to collect and
report data for such a system and to aid in their par-
ticipation in such a system.
‘‘(2) REPORTING REQUIREMENTS.—At the end of
each fiscal year beginning after September 30, 1999,
the Secretary shall, directly or by grant or contract,
prepare a report containing—
‘‘(A) a summary of the planned use of funds
by each State, and the eligible entities in the
State, under the community services block grant
program, as contained in each State plan sub-
mitted pursuant to section 676;
‘‘(B) a description of how funds were actu-
ally spent by the State and eligible entities in
the State, including a breakdown of funds spent
on indirect services or administrative costs and
on the direct delivery of local services by eligible
entities;
‘‘(C) information on the number of entities
eligible for funds under this subtitle, the number
of low-income persons served under this subtitle,
and such demographic data on the low-income
populations served by eligible entities as is deter-
mined by the Secretary to be feasible;
‘‘(D) a comparison of the planned uses of
funds for each State and the actual uses of the
funds;
‘‘(E) a summary of each State’s perform-
ance results, and the results for the eligible enti-
ties, as collected and submitted by the States in
accordance with subsection (a)(2); and
‘‘(F) any additional information that the
Secretary considers to be appropriate to carry
out this subtitle, if the Secretary informs the
States of the need for such additional informa-
tion and allows a reasonable period of time prior
to the start of the fiscal year for the States to col-
lect and provide the information.
‘‘(3) SUBMISSION.—The Secretary shall submit
to the Committee on Education and the Workforce of
the House of Representatives and the Committee on
Labor and Human Resources of the Senate the report
described in paragraph (2), and any comments the
Secretary may have with respect to such report. The
report shall include definitions of direct, indirect, and
administrative costs used by the Department of
Health and Human Services for programs funded
under this subtitle.
‘‘(4) COSTS.—Of the funds reserved under section
674(b)(3), not more than $350,000 shall be available
to carry out the reporting requirements contained in
paragraph (2) and the provision of technical assist-
ance described in paragraph (1).
‘‘SEC. 678F. LIMITATIONS ON USE OF FUNDS.
‘‘(a) CONSTRUCTION OF FACILITIES.—
‘‘(1) LIMITATIONS.—Except as provided in para-
graph (2), grants made under this subtitle (other than
amounts reserved under section 674(b)(3)) may not be
used by the State, or by any other person with which
the State makes arrangements to carry out the pur-
poses of this subtitle, for the purchase or improvement
of land, or the purchase, construction, or permanent
improvement (other than low-cost residential weather-
ization or other energy-related home repairs) of any
building or other facility.
‘‘(2) WAIVER.—The Secretary may waive the
limitation contained in paragraph (1) upon a State
request for such a waiver, if the Secretary finds that
the request describes extraordinary circumstances to
justify the purchase of land or the construction of fa-
cilities (or the making of permanent improvements)
and that permitting the waiver will contribute to the
ability of the State to carry out the purposes of this
subtitle.
‘‘(b) POLITICAL ACTIVITIES.—
‘‘(1) TREATMENT AS A STATE OR LOCAL AGEN-
CY.—For purposes of chapter 15 of title 5, United
States Code, any entity that assumes responsibility
for planning, developing, and coordinating activities
under this subtitle and receives assistance under this
subtitle shall be deemed to be a State or local agency.
For purposes of paragraphs (1) and (2) of section
1502(a) of such title, any entity receiving assistance
under this subtitle shall be deemed to be a State or
local agency.
‘‘(2) PROHIBITIONS.—Programs assisted under
this subtitle shall not be carried on in a manner in-
volving the use of program funds, the provision of
services, or the employment or assignment of person-
nel, in a manner supporting or resulting in the iden-
tification of such programs with—
‘‘(A) any partisan or nonpartisan political
activity or any political activity associated with
a candidate, or contending faction or group, in
an election for public or party office;
‘‘(B) any activity to provide voters or pro-
spective voters with transportation to the polls or
similar assistance in connection with any such
election; or
‘‘(C) any voter registration activity.
‘‘(3) RULES AND REGULATIONS.—The Secretary,
after consultation with the Office of Personnel Man-
agement, shall issue rules and regulations to provide
for the enforcement of this subsection, which shall in-
clude provisions for summary suspension of assistance
or other action necessary to permit enforcement on an
emergency basis.
‘‘(c) NONDISCRIMINATION.—
‘‘(1) IN GENERAL.—No person shall, on the basis
of race, color, religion, national origin, or sex be ex-
cluded from participation in, be denied the benefits
of, or be subjected to discrimination under, any pro-
gram or activity funded in whole or in part with
funds made available under this subtitle. Any prohi-
bition against discrimination on the basis of age
under the Age Discrimination Act of 1975 (42 U.S.C.
6101 et seq.) or with respect to an otherwise qualified
individual with a disability as provided in section
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794)
or title II of the Americans with Disabilities Act of
1990 (42 U.S.C. 12131 et seq.) shall also apply to
any such program or activity.
‘‘(2) ACTION OF SECRETARY.—Whenever the Sec-
retary determines that a State that has received a
payment under this subtitle has failed to comply with
paragraph (1) or an applicable regulation, the Sec-
retary shall notify the chief executive officer of the
State and shall request that the officer secure compli-
ance. If within a reasonable period of time, not to ex-
ceed 60 days, the chief executive officer fails or refuses
to secure compliance, the Secretary is authorized to—
‘‘(A) refer the matter to the Attorney Gen-
eral with a recommendation that an appropriate
civil action be instituted;
‘‘(B) exercise the powers and functions pro-
vided by title VI of the Civil Rights Act of 1964
(42 U.S.C. 2000d et seq.), the Age Discrimina-
tion Act of 1975 (42 U.S.C. 6101 et seq.), or sec-
tion 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794), as may be applicable; or
‘‘(C) take such other action as may be pro-
vided by law.
‘‘(3) ACTION OF ATTORNEY GENERAL.—When a
matter is referred to the Attorney General pursuant
to paragraph (2), or whenever the Attorney General
has reason to believe that the State is engaged in a
pattern or practice of discrimination in violation of
the provisions of this subsection, the Attorney General
may bring a civil action in any appropriate United
States district court for such relief as may be appro-
priate, including injunctive relief.
‘‘SEC. 679. OPERATIONAL RULE.
‘‘(a) FAITH-BASED ORGANIZATIONS INCLUDED
AS
NONGOVERNMENTAL PROVIDERS.—For any program car-
ried out by the Federal Government, or by a State or local
government under this subtitle, the government shall con-
sider, on the same basis as other nongovernmental organiza-
tions, faith-based organizations to provide the assistance
under the program, so long as the program is implemented
in a manner consistent with the Establishment Clause of
the first amendment to the Constitution. Neither the Federal
Government nor a State or local government receiving
funds under this subtitle shall discriminate against an or-
ganization that provides assistance under, or applies to
provide assistance under, this subtitle, on the basis that the
organization has a faith-based character.
‘‘(b) ADDITIONAL SAFEGUARDS.—Neither the Federal
Government nor a State or local government shall require
a faith-based organization to remove religious art, icons,
scripture, or other symbols in order to be eligible to provide
assistance under a program described in subsection (a).
‘‘(c) LIMITATIONS ON USE OF FUNDS FOR CERTAIN
PURPOSES.—No funds provided to a faith-based organiza-
tion to provide assistance under any program described in
subsection (a) shall be expended for sectarian worship, in-
struction, or proselytization.
‘‘(d) FISCAL ACCOUNTABILITY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any faith-based organization providing as-
sistance under any program described in subsection
(a) shall be subject to the same regulations as other
nongovernmental organizations to account in accord
with generally accepted accounting principles for the
use of such funds provided under such program.
‘‘(2) LIMITED AUDIT.—Such organization shall
segregate government funds provided under such pro-
gram into a separate account. Only the government
funds shall be subject to audit by the government.
‘‘SEC. 680. DISCRETIONARY AUTHORITY OF THE SEC-
RETARY.
‘‘(a) GRANTS, CONTRACTS, ARRANGEMENTS, LOANS,
AND GUARANTEES.—
‘‘(1) IN
GENERAL.—The Secretary shall, from
funds reserved under section 674(b)(3), make grants,
loans, or guarantees to States and public agencies
and private, nonprofit organizations, or enter into
contracts or jointly financed cooperative arrange-
ments with States and public agencies and private,
nonprofit organizations (and for-profit organizations,
to the extent specified in (2)(E)) for each of the objec-
tives described in paragraphs (2) through (4).
‘‘(2) COMMUNITY ECONOMIC DEVELOPMENT.—
‘‘(A) 
ECONOMIC
DEVELOPMENT
ACTIVI-
TIES.—The Secretary shall make grants de-
scribed in paragraph (1) on a competitive basis
to private, non-profit organizations that are
community development corporations to provide
technical and financial assistance for economic
development activities designed to address the
economic needs of low-income individuals and
families by creating employment and business
development opportunities.
‘‘(B) CONSULTATION.—The Secretary shall
exercise the authority provided under subpara-
graph (A) after consultation with other relevant
Federal officials.
‘‘(C) GOVERNING BOARDS.—For a commu-
nity development corporation to receive funds to
carry out this paragraph, the corporation shall
be governed by a board that shall consist of resi-
dents of the community and business and civic