‘‘(B) The amounts allotted under subparagraph
(A) shall be reduced proportionately to the extent
necessary to increase other allotments under such
subparagraph to achieve the following:
‘‘(i) Each State shall be allotted 1⁄2 of 1
percent of the amount appropriated for the fis-
cal year for which the determination is made.
‘‘(ii) Guam and the Virgin Islands of the
United States shall each be allotted 1⁄4 of 1 per-
cent of the amount appropriated for the fiscal
year for which the determination is made.
‘‘(iii) American Samoa and the Common-
wealth of the Northern Mariana Islands shall
each be allotted 1⁄16 of 1 percent of the amount
appropriated for the fiscal year for which the
determination is made.
‘‘(C) For the purposes of subparagraph (B)(i),
the term ‘State’ does not include Guam, American
Samoa, the Virgin Islands of the United States, and
the Commonwealth of the Northern Mariana Is-
lands.
‘‘(D) The number of individuals 60 years of age
or older in any State and in all States shall be deter-
mined by the Assistant Secretary on the basis of the
most recent data available from the Bureau of the
Census and other reliable demographic data satisfac-
tory to the Assistant Secretary.
‘‘(2) EXCESS
PORTION
OF
ALLOTMENT.—(A)
Whenever the Assistant Secretary determines that
any part of the amount allotted to a State under
this subsection for a fiscal year will not be used by
the State to carry out the purpose for which the al-
lotment was made, the Assistant Secretary shall
make such part available to carry out such purpose
to 1 or more other States to the extent the Assistant
Secretary determines that such other State will be
able to use such part to carry out such purpose.
‘‘(B) Any funds made available to a State from
an appropriation for a fiscal year in accordance with
the subparagraph (A) shall, for purposes of chapters
2 and 3, be regarded as part of the State’s allotment
(as determined under paragraph (1)) for such year,
but shall remain available until the end of the suc-
ceeding fiscal year.
‘‘(3) WITHHOLDING OF FUNDS.—(A) If the As-
sistant Secretary finds that a State fails to qualify
under the State plan requirements of section 304,
the Assistant Secretary shall withhold from the
State funds allotted under paragraph (1) for the fis-
cal year for which such plan is submitted.
‘‘(B) The Assistant Secretary shall disburse the
funds so withheld directly to any public or nonprofit
private institution or organization, agency, or politi-
cal subdivision of the State submitting an approved
plan under section 304, that includes an agreement
that any such funds so disbursed shall be matched
in cash or in kind, from non-Federal sources, to pay
the remainder of the cost of carrying out chapters
2 and 3 as described in paragraph (4)(A), but not
less than 15 percent of such cost.
‘‘(4) FEDERAL SHARE.—(A) Funds received by
a State from allotments made under this subsection
for a fiscal year may be used to pay not more than
85 percent of the cost of carrying out chapters 2
and 3.
‘‘(B) The non-Federal share of such cost shall
be contributed in cash or in kind. In determining the
amount of the non-Federal share, the Assistant Sec-
retary may attribute fair market value to services
and facilities contributed from non-Federal sources.
‘‘(b) ALLOTMENT OF FUNDS FOR COMMUNITY SERV-
ICE EMPLOYMENT.—
‘‘(1) RESERVATION OF FUNDS FOR TRIBAL OR-
GANIZATIONS.—
‘‘(A) AMOUNT RESERVED.—Of the amount
appropriated under paragraph (3) of section
395(a) for each of the fiscal years 1997, 1998,
1999, 2000, and 2001, the Assistant Secretary
shall reserve not more than 1.3 percent for
making grants under chapter 4 to tribal organi-
zations.
‘‘(B) ADMINISTRATIVE
COSTS.—Of the
amounts reserved under subparagraph (A) for
grants to tribal organizations, such part of such
grants as the Secretary determines, but not
more than 7 percent, may be used by tribal or-
ganizations for administrative costs incurred by
the tribal organizations to carry out chapter 4.
‘‘(2) ALLOTMENT OF FUNDS FOR FISCAL YEARS
1997–2001.—(A) After reserving funds under para-
graph (1), the amount appropriated under para-
graph (3) of section 395(a) for fiscal years 1997
through 2001 shall be allotted by the Assistant Sec-
retary among the States as follows:
‘‘(i)(I) For each of the fiscal years 1997,
1998, and 1999, the product of the amount ap-
propriated for such fiscal year and the base
percentage rate for such fiscal year shall be al-
lotted among the States proportionately based
on their respective shares of the funds appro-
priated for fiscal year 1996 allotted to the
States to carry out title V of the Older Ameri-
cans Act of 1965, and
‘‘(II) the balance shall be allotted in ac-
cordance with subparagraph (C).
‘‘(ii) After reserving funds under para-
graph (1), the remaining amount appropriated
under paragraph (3) of section 395(a) for each
of the fiscal years 2000 and 2001 shall be allot-
ted in accordance with subparagraph (C).
‘‘(B) BASE PERCENTAGE RATES.—For purposes
of subparagraph (A)(i)(I), the base percentage rates
are the following:
‘‘Fiscal year:
Base percentage rate:
1997 .........................................................................................
75 percent
1998 .........................................................................................
50 percent
1999 .........................................................................................
25 percent
‘‘(C) ALLOTMENTS BASED ON AGE AND PER
CAPITA
INCOME.—Each amount referred to in
clauses (i)(II) and (ii) of subparagraph (A) shall be
allotted as follows:
‘‘(i) Subject to clause (ii), each State shall
be allotted the amount that bears the same
ratio to the amount so referred to as the prod-
uct of the number of individuals 55 years of age
or older in the State and the allotment percent-
age of the State bears to the sum of the cor-
responding products for all the States.
‘‘(ii) The amounts allotted under clause (i)
shall be reduced proportionately to the extent
necessary to increase other allotments under
such clause to achieve the following:
‘‘(I) Each State shall be allotted 1⁄2 of
1 percent of the amount appropriated for
the fiscal year for which the determination
is made.
‘‘(II) Guam, American Samoa, the
Virgin Islands of the United States, and
the Commonwealth of the Northern Mari-
ana Islands shall each be allotted not less
than 1⁄4 of 1 percent of the amount appro-
priated for the fiscal year for which the de-
termination is made or $50,000, whichever
is greater.
‘‘(D) ALLOTMENT PERCENTAGE.—For purposes
of subparagraph (c)(i)—
‘‘(i) except as provided in clause (ii), the
allotment percentage of each State shall be 100
percent less that percentage which bears the
same ratio to 50 percent as the per capita in-
come of the State bears to the per capita in-
‘‘(C) The aggregate amount available under this
subsection to a particular State in any fiscal year
may not exceed 3⁄4 of 1 percent of the aggregate of
the allotments made under subsections (a) and (b)
for such fiscal year.
‘‘(D) An application submitted under subpara-
graph (A) by a State may not be approved unless it
contains assurances that no funds received by the
State under this subsection will be used to hire any
individual to fill a job opening created by the action
of the State in laying off or terminating the employ-
ment of any regular employee not supported under
this Act in anticipation of filling the vacancy so cre-
ated by hiring an employee to be supported through
use of amounts received under this subsection.
‘‘(3) ADDITIONAL
USE.—Of the allotments
made under subsection (a) to a State for a fiscal
year and remaining after the application of para-
graph (1), such part as the State agency determines,
but not more than 8.5 percent of such remaining
amount, may be used to pay such percentage as the
State agency determines, but not more than 85 per-
cent, of the administrative costs incurred to carry
out area plans submitted in accordance with section
305.
‘‘SEC. 303. ELIGIBILITY OF STATES; ORGANIZATION.
‘‘(a) ELIGIBILITY OF STATES.—For a State to be eli-
gible to receive funds allotted under section 302(a)—
‘‘(1) the State shall, in accordance with rules is-
sued by the Secretary, designate a State agency as
the sole State agency to—
‘‘(A) develop a State plan to be submitted
to the Assistant Secretary for approval under
section 304,
‘‘(B) administer the State plan within the
State,
‘‘(C) be responsible for the planning, policy
development, administration, coordination, pri-
ority setting, and evaluation of all State activi-
ties related to carrying out chapters 2 and 3,
‘‘(D) serve as an effective and visible advo-
cate for older individuals by reviewing and com-
menting on all State plans, budgets, and poli-
cies that affect older individuals, and to provide
technical assistance to any agency, organiza-
tion, or association representing the needs of
older individuals, and
‘‘(E) except as provided in subsection (e),
divide the State into distinct planning and serv-
ice areas or designate the entire State as a sin-
gle planning and service area,
‘‘(2) the State agency shall—
‘‘(A) designate an area agency on aging for
each planning and service area,
‘‘(B) take into account in the development
and administration of the State plan for any
fiscal year—
‘‘(i) the views of recipients of support-
ive services, nutrition services, or commu-
nity service employment, or
‘‘(ii) individuals using multipurpose
senior centers,
as the case may be, provided under such plan,
‘‘(C) after consultation with area agencies
and using the best available data, develop and
publish for review and comment a formula for
distribution within the State of funds received
under chapters 2 and 3 that takes into ac-
count—
‘‘(i) the geographical distribution of
older individuals in the State, and
‘‘(ii) the distribution among planning
and service areas of older individuals with
greatest economic need and older individ-
uals with greatest social need, and
‘‘(D) provide an assurance that preference
will be given to providing services to older indi-
viduals with greatest economic need and older
individuals with greatest social need, and in-
clude proposed methods to carry out the pref-
erence in the State plan,
‘‘(b) DESIGNATION OF AREA AGENCIES ON AGING.—
(1) An area agency on aging designated under subsection
(a) shall be—
‘‘(A) an established office of aging,
‘‘(B) any office or agency of a unit of general
purpose local government, that is designated to func-
tion only for the purpose of serving as an area agen-
cy on aging by the chief elected official of such unit,
‘‘(C) any office or agency designated by the ap-
propriate chief elected officials of any combination of
units of general purpose local government to act only
on behalf of such combination for such purpose,
‘‘(D) any public or nonprofit private agency in
a planning and service area, or any separate organi-
zational unit within such agency, that is under the
supervision or direction for this purpose of the des-
ignated State agency and that can and will engage
only in the planning or provision of a broad range
of supportive services, or nutrition services within
the planning and service area, or
‘‘(E) in the case of a State designated under
subsection (a)(1)(E) as a single planning and service
area, the State agency,
and shall provide assurance, determined adequate by the
State agency, that the area agency on aging will have the
ability to develop an area plan and to carry out, directly
or through contractual or other arrangements, a program
in accordance with the plan within the planning and serv-
ice area.
‘‘(2) In designating an area agency on aging within
the planning and service area or within any unit of general
purpose local government designated as a planning and
service area, the State shall give preference to an estab-
lished office on aging, unless the State agency finds that
no such office within the planning and service area will
have the capacity to carry out the area plan.
‘‘(d) DUE PROCESS.—A State agency shall establish,
after consultation with area agencies on aging, procedures
to provide due process to affected parties, if the State
agency initiates an action or proceeding to change the des-
ignation of any designated planning and service area or
of any designated area agency on aging.
‘‘(e) GRANDFATHER PROVISION.—A State that on or
before October 1, 1980, had designated, with the approval
of the Commissioner on Aging, a single planning and serv-
ice area covering all of the older individuals in the State,
in which the State agency was administering the area
plan, may after that date designate one or more additional
planning and service areas within the State to be adminis-
tered by public or nonprofit private agencies or organiza-
tions as area agencies on aging. The State agency shall
continue to perform the functions of an area agency on
aging for any area of the State not included in a planning
and service area for which an area agency on aging has
been designated.
‘‘SEC. 304. STATE PLANS.
‘‘(a) PLAN.—Each State, in order to be eligible for
grants from its allotment under section 302(a) for any fis-
cal year, shall submit to the Assistant Secretary a State
plan for a 2-, 3-, or 4-year period determined by the State
agency, with such annual revisions as are necessary. Each
such plan shall comply with all of the following require-
ments:
‘‘(1) UNIFORM AREA PLAN FORMAT.—The plan
shall contain assurances that the State plan will be
based upon area plans developed by area agencies on
aging within the State designated under section
303(a)(2)(A) and that the State will prepare and
distribute a uniform format for use by area agencies
on aging in developing area plans under section 305.
‘‘(2) APPROVAL
OF
AREA
PLAN.—The plan
shall provide that each area agency on aging des-
ignated under section 303(a)(2)(A) will develop and
submit to the State agency for approval an area plan
that complies with section 305.
‘‘(3) EVALUATION OF NEED.—The plan shall
provide that the State agency will evaluate the need
for supportive services, nutrition services (taking
into consideration the comparative need for home-de-
livered nutrition services and for congregate nutri-
tion services), multipurpose senior centers, and com-
munity service employment within the State and de-
termine the extent to which existing public or private
programs meet such need. To conduct the evalua-
tion, the State agency shall use the procedures im-
plemented under section 202(10).
‘‘(4) HEARINGS.—The plan shall provide that
the State agency establish a grievance procedure
that will afford an opportunity for a hearing upon
request to any agency on aging submitting a plan
under this section 305, to any provider of a service
under such a plan, or to any applicant to provide a
service under such a plan. The State agency shall es-
tablish and publish the procedures for requesting
and conducting such hearing.
‘‘(5) FISCAL CONTROL AND FUND ACCOUNTING;
CONFLICTS OF INTEREST.—(A) The plan shall pro-
vide satisfactory assurance that such fiscal control
and fund accounting procedures will be adopted as
may be necessary to assure proper disbursement of,
and accounting for, funds received from allotments
made under section 302(a) to the State, including
any such funds paid to the recipients of a grant or
contract.
‘‘(B) The plan shall provide assurances that—
‘‘(i) no individual (appointed or otherwise)
involved in the designation of the State agency
or an area agency on aging, or in the designa-
tion of the head of any subdivision of the State
agency or of an area agency on aging, is subject
to a conflict of interest prohibited under this
subtitle,
‘‘(ii) no officer, employee, or other rep-
resentative of the State agency or an area agen-
cy on aging is subject to a conflict of interest
prohibited under this subtitle, and
‘‘(iii) mechanisms are in place to identify
and remove conflicts of interest prohibited
under this subtitle.
‘‘(C) The plan shall provide assurances that the
State agency and each area agency on aging will—
‘‘(i) maintain the integrity and public pur-
pose of services provided, and service providers,
under the State plan in all contractual and
commercial relationships, and
‘‘(iv) demonstrate that the quantity or
quality of the services to be provided under the
State plan will be enhanced as a result of such
contract or such relationship,
‘‘(6) INFORMATION
AND
ASSISTANCE
SERV-
ICES.—The plan shall provide for establishing and
maintaining information and assistance services in
sufficient numbers to ensure, to the maximum extent
practicable, that all older individuals in the State
who are not furnished adequate information and as-
sistance services under section 305(a)(3) will have
reasonably convenient access to such services.
‘‘(7) LIMITATIONS.—(A) The plan shall provide
that no supportive services, nutrition services, or in-
home services will be directly provided by the State
agency or an area agency on aging, except when, in
the judgment of the State agency—
‘‘(i) provision of such services by the State
agency or an area agency on aging is necessary
to ensure an adequate supply of such services,
‘‘(ii) such services are directly related to
the administrative functions of the State agency
or area agency on aging, or
‘‘(iii) such services of comparable quality
can be provided more economically by the State
agency or area agency on aging.
‘‘(B) Subparagraph (A) shall not apply with re-
spect to information and assistance services, case
management services, and outreach.
‘‘(8) STATE
LONG-TERM
CARE
OMBUDSMAN
PROGRAM.—The plan shall provide assurances that
the State agency will carry out a State long-term
care ombudsman program that complies with all the
following specifications:
‘‘(A) DUTIES.—The State agency shall—
‘‘(i) identify, investigate, and resolve
complaints that—
‘‘(I) are made by, or on behalf of
older individuals who are residents of
long-term care facilities, and
‘‘(II) relate to action, inaction, or
decisions that may adversely affect
the health, safety, welfare, or rights of
such residents (including the welfare
and rights of such residents with re-
spect to the appointment and activi-
ties of guardians and representative
payees), of providers (or representa-
tives of providers) of long-term care
services, public agencies, or health
and social service agencies,
‘‘(ii) provide services to assist such
residents in protecting the health, safety,
welfare, and rights of such residents,
‘‘(iii) inform such residents about
means of obtaining services provided by
providers or agencies described in clause
(i)(II) or services described in clauses (i),
‘‘(iv) ensure that such residents have
regular and timely access to the services
provided through the State long-term care
ombudsman program and that such resi-
dents and complainants receive from pro-
gram representatives of the State agency
timely responses to complaints,
‘‘(v) represent the interests of such
residents before governmental agencies and
seek administrative, legal, and other rem-
edies to protect the health, safety, welfare,
and rights of the residents,
‘‘(vi) provide administrative and tech-
nical assistance to entities designated
under subparagraph (F) to assist the enti-
ties in participating in the program,
‘‘(vii) analyze, comment on, and mon-
itor the development and implementation
of Federal, State, and local laws, rules,
and other governmental policies and ac-
tions, that pertain to the health, safety,
welfare, and rights of the residents, with
respect to the adequacy of long-term care
facilities and services in the State,
‘‘(viii) provide for training program
representatives of the State agency, and
‘‘(ix) carry out such other activities as
the State agency determines to be appro-
priate.
‘‘(B) CONTRACTS AND ARRANGEMENTS.—
(i) Except as provided in clause (ii), the State
agency may carry out the program, directly, or
by contract or other arrangement with any pub-
lic agency or nonprofit private organization.
‘‘(ii) The State agency may not enter into
a contract or other arrangement described in
clause (i) with—
‘‘(I) an agency or organization that is
responsible for licensing or certifying long-
term care services in the State, or
‘‘(II) an association (or an affiliate of
such an association) of long-term care fa-
cilities, or of any other residential facilities
for older individuals.
‘‘(C) DESIGNATION OF LOCAL OMBUDSMAN
ENTITIES AND REPRESENTATIVES.—(i) In car-
rying out the duties specified in subparagraph
(A), the State agency may designate an entity
as a local ombudsman entity, and may des-
ignate an individual (including an employee or
volunteer) to represent the entity.
‘‘(ii) An individual so designated may, in
accordance with the policies and procedures es-
tablished by the State agency—
‘‘(I) provide services to protect the
health, safety, welfare, and rights of older