leaders and shall have as a principal purpose
planning, developing, or managing low-income
housing or community development projects.
‘‘(D) 
GEOGRAPHIC
DISTRIBUTION.—In
making grants to carry out this paragraph, the
Secretary shall take into consideration the geo-
graphic distribution of funding among States
and the relative proportion of funding among
rural and urban areas.
‘‘(E) RESERVATION.—Of the amounts made
available to carry out this paragraph, the Sec-
retary may reserve not more than 1 percent for
each fiscal year to make grants to private, non-
profit organizations or to enter into contracts
with private, nonprofit or for-profit organiza-
tions to provide technical assistance to aid com-
munity development corporations in developing
or implementing activities funded to carry out
this paragraph and to evaluate activities funded
to carry out this paragraph.
‘‘(3) RURAL COMMUNITY DEVELOPMENT ACTIVI-
TIES.—The Secretary shall provide the assistance de-
scribed in paragraph (1) for rural community devel-
opment activities, which shall include—
‘‘(A) grants to private, nonprofit corpora-
tions that provide assistance concerning home re-
pair to rural low-income families and planning
and developing low-income rural rental housing
units; and
‘‘(B) grants to multistate, regional, private,
nonprofit organizations to provide training and
technical assistance to small, rural communities
in meeting their community facility needs.
‘‘(4) NEIGHBORHOOD INNOVATION PROJECTS.—
The Secretary shall provide the assistance described
in paragraph (1) for neighborhood innovation
projects, which shall include grants to neighborhood-
based private, nonprofit organizations to test or assist
in the development of new approaches or methods that
will aid in overcoming special problems identified by
communities or neighborhoods or otherwise assist in
furthering the purposes of this subtitle, and which
may include projects that are designed to serve low-
income individuals and families who are not being ef-
fectively served by other programs.
‘‘(b) EVALUATION.—The Secretary shall require all ac-
tivities receiving assistance under this section to be evalu-
ated for their effectiveness. Funding for such evaluations
shall be provided as a stated percentage of the assistance
or through a separate grant awarded by the Secretary spe-
cifically for the purpose of evaluation of a particular activ-
ity or group of activities.
‘‘(c) ANNUAL REPORT.—The Secretary shall compile
an annual report containing a summary of the evaluations
required in subsection (b) and a listing of all activities as-
sisted under this section. The Secretary shall annually sub-
mit the report to the Chairperson of the Committee on Edu-
cation and the Workforce of the House of Representatives
and the Chairperson of the Committee on Labor and
Human Resources of the Senate.’’.
SEC. 103. RELATED AMENDMENTS.
The Community Services Block Grant Act (42 U.S.C.
9901 et seq.) is amended—
(1) by striking section 681;
(2) in section 681A—
(A) by striking ‘‘681A’’ and inserting
‘‘681’’;
(B) in subsection (c) by striking ‘‘Labor’’
and inserting ‘‘the Workforce’’; and
(C) 
in 
subsection 
(d) 
by 
striking
‘‘$25,000,000’’ and all that follows through
‘‘1998’’, and inserting ‘‘$5,000,000 for fiscal year
1999, and such sums as may be necessary for fis-
cal years 2000 through 2003’’;
(3) in section 682—
(A) in subsection (c)—
(i) by redesignating paragraphs (3)
and (4) as paragraphs (4) and (5), respec-
tively; and
(ii) by inserting after paragraph (2)
the following:
‘‘(3) the applicant shall, in each community in
which a program is funded under this section—
‘‘(A) ensure that—
‘‘(i) a community-based advisory com-
mittee, composed of representatives of local
youth, family, and social service organiza-
tions, schools, entities that provide park and
recreation services, entities that provide
training services, and community-based or-
ganizations that serve high-risk youth, is es-
tablished; or
‘‘(ii) an existing community-based ad-
visory board, commission, or committee
with similar membership is used; and
‘‘(B) enter into formal partnerships with
youth-serving organizations or other appropriate
social service entities in order to link program
participants with year-round services in their
home communities that support and continue the
objectives of this subtitle;’’; and
(B) in subsection (f) by striking ‘‘each fiscal
year’’ and all that follows through ‘‘1998’’, and
inserting ‘‘for fiscal year 1999, and such sums as
may be necessary for fiscal years 2000 through
2003’’; and
(4) by striking sections 683 and 684, and insert-
ing the following:
‘‘SEC. 683. DRUG TESTING AND PATERNITY DETERMINA-
TIONS.
‘‘(a) DRUG TESTING PERMITTED.—(1) Nothing in this
subtitle shall be construed to prohibit a State from testing
participants in programs, activities, or services carried out
under this subtitle for controlled substances or from impos-
ing sanctions on such participants who test positive for any
of such substances.
‘‘(2) Any funds provided under this subtitle expended
for such testing shall be considered to be expended for ad-
ministrative expenses and shall be subject to the limitation
specified in section 675(b)(2).
‘‘(b) PATERNITY DETERMINATIONS.—During each fis-
cal year for which an eligible entity receives a grant under
section 675C, such entity shall—
‘‘(1) inform custodial parents in single-parent
families that participate in programs, activities, or
services carried out under this subtitle about the
availability of child support services;
‘‘(2) refer eligible parents to the child support of-
fices of State and local governments; and
‘‘(3) establish referral arrangements with such
offices.
‘‘SEC. 684. REFERENCES.
‘‘Any reference in any provision of law to the poverty
line set forth in section 624 or 625 of the Economic Oppor-
tunity Act of 1964 shall be construed to be a reference to
the poverty line defined in section 673 of this subtitle. Any
reference in any provision of law to any community action
agency designated under title II of the Economic Oppor-
tunity Act of 1964 shall be construed to be a reference to
an entity eligible to receive funds under the community
services block grant program.’’.
SEC. 104. ASSETS FOR INDEPENDENCE.
The Community Services Block Grant Act (42 U.S.C.
9901–9912), as amended by sections 102 and 103, is
amended—
(1) by striking ‘‘this subtitle’ each place it ap-
pears (other than in section 671) and inserting ‘‘this
part’’, and
(2) by inserting the following after section 671:
‘‘PART A—COMMUNITY SERVICES GRANTS’’,
and
(3) by adding at the end the following:
‘‘PART B—ASSETS FOR INDEPENDENCE
‘‘SEC. 685. SHORT TITLE.
‘‘This part may be cited as the ‘Assets for Independ-
ence Act’.
‘‘SEC. 686. FINDINGS.
‘‘Congress makes the following findings:
‘‘(1) Economic well-being does not come solely
from income, spending, and consumption, but also re-
quires savings, investment, and accumulation of as-
sets because assets can improve economic independ-
ence and stability, connect individuals with a viable
and hopeful future, stimulate development of human
and other capital, and enhance the welfare of off-
spring.
‘‘(2) Fully 1⁄2 of all Americans have either no,
negligible, or negative assets available for investment,
just as the price of entry to the economic mainstream,
the cost of a house, an adequate education, and start-
ing a business, is increasing. Further, the household
savings rate of the United States lags far behind other
industrial nations presenting a barrier to economic
growth.
‘‘(3) In the current tight fiscal environment, the
United States should invest existing resources in high-
yield initiatives. There is reason to believe that the fi-
nancial returns, including increased income, tax reve-
nue, and decreased welfare cash assistance, resulting
from individual development accounts will far exceed
the cost of investment in those accounts.
‘‘(4) Traditional public assistance programs con-
centrating on income and consumption have rarely
been successful in promoting and supporting the tran-
sition to increased economic self-sufficiency. Income-
based domestic policy should be complemented with
asset-based policy because, while income-based policies
ensure that consumption needs (including food, child
care, rent, clothing, and health care) are met, asset-
based policies provide the means to achieve greater
independence and economic well-being.
‘‘SEC. 687. PURPOSES.
‘‘The purposes of this part are to provide for the estab-
lishment of demonstration projects designed to determine—
‘‘(1) the social, civic, psychological, and eco-
nomic effects of providing to individuals and families
with limited means an incentive to accumulate assets
by saving a portion of their earned income;
‘‘(2) the extent to which an asset-based policy
that promotes saving for postsecondary education,
homeownership, and microenterprise development
may be used to enable individuals and families with
limited means to increase their economic self-suffi-
ciency; and
‘‘(3) the extent to which an asset-based policy
stabilizes and improves families and the community
in which they live.
‘‘SEC. 688. DEFINITIONS.
‘‘In this part:
‘‘(1) APPLICABLE PERIOD.—The term ‘applicable
period’ means, with respect to amounts to be paid
from a grant made for a project year, the calendar
year immediately preceding the calendar year in
which the grant is made.
‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means an individual who is selected to
participate by a qualified entity under section 693.
‘‘(3) 
EMERGENCY
WITHDRAWAL.—The 
term
‘emergency withdrawal’ means a withdrawal by an
eligible individual that—
‘‘(A) is a withdrawal of only those funds, or
a portion of those funds, deposited by the indi-
vidual in the individual development account of
the individual;
‘‘(B) is permitted by a qualified entity on
a case-by-case basis; and
‘‘(C) is made for—
‘‘(i) expenses for medical care or nec-
essary to obtain medical care, for the indi-
vidual or a spouse or dependent of the indi-
vidual described in paragraph (8)(D);
‘‘(ii) payments necessary to prevent the
eviction of the individual from the residence
of the individual, or foreclosure on the mort-
gage for the principal residence of the indi-
vidual, as defined in paragraph (8)(B); or
‘‘(iii) payments necessary to enable the
individual to meet necessary living expenses
following loss of employment.
‘‘(4) HOUSEHOLD.—The term ‘household’ means
all individuals who share use of a dwelling unit as
primary quarters for living and eating separate from
other individuals.
‘‘(5) INDIVIDUAL DEVELOPMENT ACCOUNT.—
‘‘(A) IN
GENERAL.—The term ‘individual
development account’ means a trust created or
organized in the United States exclusively for the
purpose of paying the qualified expenses of an el-
igible individual, or enabling the eligible indi-
vidual to make an emergency withdrawal, but
only if the written governing instrument creat-
ing the trust meets the following requirements:
‘‘(i) No contribution will be accepted
unless it is in cash or by check.
‘‘(ii) The trustee is a federally insured
financial institution, or a State insured fi-
nancial institution if no federally insured
financial institution is available.
‘‘(iii) The assets of the trust will be in-
vested in accordance with the direction of
the eligible individual after consultation
with the qualified entity providing deposits
for the individual under section 694.
‘‘(iv) The assets of the trust will not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(v) Except as provided in clause (vi),
any amount in the trust which is attrib-
utable to a deposit provided under section
694 may be paid or distributed out of the
trust only for the purpose of paying the
qualified expenses of the eligible individual,
or enabling the eligible individual to make
an emergency withdrawal.
‘‘(vi) Any balance in the trust on the
day after the date on which the individual
for whose benefit the trust is established dies
shall be distributed within 30 days of that
date as directed by that individual to an-
other individual development account estab-
lished for the benefit of an eligible individ-
ual.
‘‘(B) CUSTODIAL ACCOUNTS.—For purposes
of subparagraph (A), a custodial account shall be
treated as a trust if the assets of the custodial ac-
count are held by a bank (as defined in section
408(n) of the Internal Revenue Code of 1986) or
another person who demonstrates, to the satisfac-
tion of the Secretary, that the manner in which
such person will administer the custodial ac-
count will be consistent with the requirements of
this part, and if the custodial account would, ex-
cept for the fact that it is not a trust, constitute
an individual development account described in
subparagraph (A). For purposes of this part, in
the case of a custodial account treated as a trust
by reason of the preceding sentence, the custo-
dian of that custodial account shall be treated as
the trustee thereof.
‘‘(6) PROJECT
YEAR.—The term ‘project year’
means, with respect to a demonstration project, any
of the 5 consecutive 12-month periods beginning on
the date the project is originally authorized to be con-
ducted.
‘‘(7) QUALIFIED ENTITY.—
‘‘(A) IN GENERAL.—The term ‘qualified en-
tity’ means—
‘‘(i) one or more not-for-profit organi-
zations described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of such
Code; or
‘‘(ii) a State or local government agen-
cy, or a tribal government, submitting an
application under section 689 jointly with
an organization described in clause (i).
‘‘(B) RULE OF CONSTRUCTION.—Nothing in
this paragraph shall be construed as preventing
an organization described in subparagraph
(A)(i) from collaborating with a financial insti-
tution or for-profit community development cor-
poration to carry out the purposes of this part.
‘‘(8) QUALIFIED EXPENSES.—The term ‘qualified
expenses’ means 1 or more of the following, as pro-
vided by the qualified entity:
‘‘(A) POSTSECONDARY
EDUCATIONAL
EX-
PENSES.—Postsecondary 
educational 
expenses
paid from an individual development account
directly to an eligible educational institution. In
this subparagraph:
‘‘(i) 
POSTSECONDARY
EDUCATIONAL
EXPENSES.—The term ‘postsecondary edu-
cational expenses’ means the following:
‘‘(I) TUITION AND FEES.—Tuition
and fees required for the enrollment or
attendance of a student at an eligible
educational institution.
‘‘(II) FEES, 
BOOKS, 
SUPPLIES,
AND
EQUIPMENT.—Fees, books, sup-
plies, and equipment required for
courses of instruction at an eligible
educational institution.
‘‘(ii) ELIGIBLE EDUCATIONAL INSTITU-
TION.—The term ‘‘eligible educational insti-
tution’ means the following:
‘‘(I) INSTITUTION
OF
HIGHER
EDUCATION.—An institution described
in section 481(a)(1) or 1201(a) of the
Higher Education Act of 1965 (20
U.S.C. 1088(a)(1) or 1141(a)), as such
sections are in effect on the date of en-
actment of this part.
‘‘(II) 
POSTSECONDARY
VOCA-
TIONAL EDUCATION SCHOOL.—An area
vocational education school (as defined
in subparagraph (C) or (D) of section
521(4) of the Carl D. Perkins Voca-
tional and Applied Technology Edu-
cation Act (20 U.S.C. 2471(4))) which
is in any State (as defined in section
521(33) of such Act), as such sections
are in effect on the date of enactment
of this part.
‘‘(B) FIRST-HOME
PURCHASE.—Qualified
acquisition costs with respect to a principal resi-
dence for a qualified first-time homebuyer, if
paid from an individual development account
directly to the persons to whom the amounts are
due. In this subparagraph:
‘‘(i) PRINCIPAL RESIDENCE.—The term
‘principal residence’ means a principal res-
idence, the qualified acquisition costs of
which do not exceed 100 percent of the aver-
age area purchase price applicable to such
residence.
‘‘(ii) 
QUALIFIED
ACQUISITION
COSTS.—The term ‘qualified acquisition
costs’ means the costs of acquiring, con-
structing, or reconstructing a residence. The
term includes any usual or reasonable set-
tlement, financing, or other closing costs.
‘‘(iii) QUALIFIED
FIRST-TIME
HOME-
BUYER.—
‘‘(I) 
IN
GENERAL.—The 
term
‘qualified first-time homebuyer’ means
an individual participating in the
project (and, if married, the individ-
ual’s spouse) who has no present own-
ership interest in a principal residence
during the 3-year period ending on the
date of acquisition of the principal res-
idence to which this subparagraph ap-
plies.
‘‘(II) DATE
OF
ACQUISITION.—
The term ‘date of acquisition’ means
the date on which a binding contract
to acquire, construct, or reconstruct the
principal residence to which this sub-
paragraph applies is entered into.
‘‘(C) BUSINESS CAPITALIZATION.—Amounts
paid from an individual development account
directly to a business capitalization account
which is established in a federally insured finan-
cial institution (or in a State insured financial
institution if no federally insured financial in-
stitution is available) and is restricted to use
solely for qualified business capitalization ex-
penses. In this subparagraph:
‘‘(i) QUALIFIED BUSINESS CAPITALIZA-
TION EXPENSES.—The term ‘‘qualified busi-
ness capitalization expenses’ means quali-
fied expenditures for the capitalization of a
qualified business pursuant to a qualified
plan.
‘‘(ii) QUALIFIED EXPENDITURES.—The
term ‘qualified expenditures’ means expend-
itures included in a qualified plan, includ-
ing capital, plant, equipment, working cap-
ital, and inventory expenses.
‘‘(iii) 
QUALIFIED
BUSINESS.—The
term ‘qualified business’ means any busi-
ness that does not contravene any law or
public policy (as determined by the Sec-
retary).
‘‘(iv) QUALIFIED
PLAN.—The term
‘qualified plan’ means a business plan, or a
plan to use a business asset purchased,
which—
‘‘(I) is approved by a financial
institution, a microenterprise develop-
ment organization, or a nonprofit loan
fund having demonstrated fiduciary
integrity;
‘‘(II) includes a description of
services or goods to be sold, a market-
ing plan, and projected financial state-
ments; and
‘‘(III) may require the eligible in-
dividual to obtain the assistance of an
experienced entrepreneurial adviser.
‘‘(D) TRANSFERS TO IDAS OF FAMILY MEM-
BERS.—Amounts paid from an individual devel-
opment account directly into another such ac-
count established for the benefit of an eligible in-
dividual who is—
‘‘(i) the individual’s spouse; or
‘‘(ii) any dependent of the individual
with respect to whom the individual is al-
lowed a deduction under section 151 of the
Internal Revenue Code of 1986.
‘‘(9) QUALIFIED
SAVINGS
OF
THE
INDIVIDUAL
FOR THE PERIOD.—The term ‘qualified savings of the
individual for the period’ means the aggregate of the
amounts contributed by the individual to the individ-
ual development account of the individual during the
period.
‘‘(10) SECRETARY.—The term ‘Secretary’ means
the Secretary of Health and Human Services.
‘‘(11) TRIBAL GOVERNMENT.—The term ‘tribal
government’ means a tribal organization, as defined
in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b) or a Na-
tive Hawaiian organization, as defined in section
9212 of the Native Hawaiian Education Act (20
U.S.C. 7912).
‘‘SEC. 689. APPLICATIONS.
‘‘(a) 
ANNOUNCEMENT
OF
DEMONSTRATION
PROJECTS.—Not later than 3 months after the date of en-
actment of this part, the Secretary shall publicly announce
the availability of funding under this part for demonstra-
tion projects and shall ensure that applications to conduct
the demonstration projects are widely available to qualified
entities.
‘‘(b) SUBMISSION.—Not later than 6 months after the
date of enactment of this part, a qualified entity may sub-
mit to the Secretary an application to conduct a dem-
onstration project under this part.
‘‘(c) CRITERIA.—In considering whether to approve an
application to conduct a demonstration project under this
part, the Secretary shall assess the following:
‘‘(1) SUFFICIENCY OF PROJECT.—The degree to
which the project described in the application appears
likely to aid project participants in achieving eco-
nomic self-sufficiency through activities requiring
qualified expenses. In making such assessment, the
Secretary shall consider the overall quality of project
activities in making any particular kind or combina-
tion of qualified expenses to be an essential feature of
any project.
‘‘(2) ADMINISTRATIVE ABILITY.—The experience
and ability of the applicant to responsibly administer
the project.
‘‘(3) ABILITY TO ASSIST PARTICIPANTS.—The ex-
perience and ability of the applicant in recruiting,
educating, and assisting project participants to in-
crease their economic independence and general well-
being through the development of assets.
‘‘(4) COMMITMENT OF NON-FEDERAL FUNDS.—
The aggregate amount of direct funds from non-Fed-
eral public sector and from private sources that are
formally committed to the project as matching con-
tributions.
‘‘(5) ADEQUACY OF PLAN FOR PROVIDING INFOR-
MATION FOR EVALUATION.—The adequacy of the plan
for providing information relevant to an evaluation
of the project.
‘‘(6) OTHER FACTORS.—Such other factors rel-
evant to the purposes of this part as the Secretary
may specify.
‘‘(d) PREFERENCES.—In considering an application
to conduct a demonstration project under this part, the Sec-
retary shall give preference to an application that—
‘‘(1) demonstrates the willingness and ability to
select individuals described in section 692 who are
predominantly from households in which a child (or
children) is living with the child’s biological or adop-
tive mother or father, or with the child’s legal guard-
ian;
‘‘(2) provides a commitment of non-Federal
funds with a proportionately greater amount of such
funds committed by private sector sources; and
‘‘(3) targets such individuals residing within 1
or more relatively well-defined neighborhoods or com-
munities (including rural communities) that experi-
ence high rates of poverty or unemployment.
‘‘(e) APPROVAL.—Not later than 9 months after the
date of enactment of this part, the Secretary shall, on a
competitive basis, approve such applications to conduct
demonstration projects under this part as the Secretary
deems appropriate, taking into account the assessments re-
quired by subsections (c) and (d). The Secretary is encour-
aged to ensure that the applications that are approved in-
volve a range of communities (both rural and urban) and
diverse populations.
‘‘(f) CONTRACTS WITH NONPROFIT ENTITIES.—The
Secretary may contract with an entity described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt
from taxation under section 501(a) of such Code to conduct
any responsibility of the Secretary under this section or sec-
tion 696 if—
‘‘(1) such entity demonstrates the ability to con-
duct such responsibility; and
‘‘(2) the Secretary can demonstrate that such re-
sponsibility would not be conducted by the Secretary
at a lower cost.
‘‘SEC. 690. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.
‘‘(a) DEMONSTRATION AUTHORITY.—If the Secretary
approves an application to conduct a demonstration project
under this part, the Secretary shall, not later than 10
months after the date of enactment of this part, authorize
the applicant to conduct the project for 5 project years in
accordance with the approved application and the require-
ments of this part.
‘‘(b) GRANT AUTHORITY.—For each project year of a
demonstration project conducted under this part, the Sec-
retary may make a grant to the qualified entity authorized
to conduct the project. In making such a grant, the Sec-
retary shall make the grant on the first day of the project
year in an amount not to exceed the lesser of—
‘‘(1) the aggregate amount of funds committed as
matching contributions by non-Federal public or pri-
vate sector sources; or
‘‘(2) $1,000,000.
‘‘SEC. 691. RESERVE FUND.
‘‘(a) ESTABLISHMENT.—A qualified entity under this
part, other than a State or local government agency, or a
tribal government, shall establish a Reserve Fund which
shall be maintained in accordance with this section.
‘‘(b) AMOUNTS IN RESERVE FUND.—
‘‘(1) IN GENERAL.—As soon after receipt as is
practicable, a qualified entity shall deposit in the Re-
serve Fund established under subsection (a)—
‘‘(A) all funds provided to the qualified en-
tity by any public or private source in connec-
tion with the demonstration project; and
‘‘(B) the proceeds from any investment
made under subsection (c)(2).
‘‘(2) UNIFORM ACCOUNTING REGULATIONS.—The
Secretary shall prescribe regulations with respect to
accounting for amounts in the Reserve Fund estab-
lished under subsection (a).
‘‘(c) USE OF AMOUNTS IN THE RESERVE FUND.—
‘‘(1) IN GENERAL.—A qualified entity shall use
the amounts in the Reserve Fund established under
subsection (a) to—
‘‘(A) assist participants in the demonstra-
tion project in obtaining the skills (including
economic literacy, budgeting, credit, and counsel-
ing) and information necessary to achieve eco-
nomic self-sufficiency through activities requir-
ing qualified expenses;
‘‘(B) provide deposits in accordance with
section 694 for individuals selected by the quali-
fied entity to participate in the demonstration
project;
‘‘(C) administer the demonstration project;
and
‘‘(D) provide the research organization eval-
uating the demonstration project under section
698 with such information with respect to the
demonstration project as may be required for the
evaluation.
‘‘(2) AUTHORITY TO INVEST FUNDS.—
‘‘(A) GUIDELINES.—The Secretary shall es-
tablish guidelines for investing amounts in the
Reserve Fund established under subsection (a) in
a manner that provides an appropriate balance
between return, liquidity, and risk.
‘‘(B) INVESTMENT.—A qualified entity shall
invest the amounts in its Reserve Fund that are
not immediately needed to carry out the provi-
sions of paragraph (1), in accordance with the
guidelines established under subparagraph (A).
‘‘(3) LIMITATION ON USES.—Not more than 9.5
percent of the amounts provided to a qualified entity
under section 698(b) shall be used by the qualified en-
tity for the purposes described in subparagraphs (A),
(C), and (D) of paragraph (1), of which not less than
2 percent of the amounts shall be used by the quali-
fied entity for the purposes described in paragraph
(1)(D). If 2 or more qualified entities are jointly ad-
ministering a project, no qualified entity shall use
more than its proportional share for the purposes de-
scribed in subparagraphs (A), (C), and (D) of para-
graph (1).
‘‘(d) UNUSED FEDERAL GRANT FUNDS TRANSFERRED
TO THE SECRETARY WHEN PROJECT TERMINATES.—Not-
withstanding subsection (c), upon the termination of any
demonstration project authorized under this section, the
qualified entity conducting the project shall transfer to the
Secretary an amount equal to—
‘‘(1) the amounts in its Reserve Fund at time of
the termination; multiplied by
‘‘(2) a percentage equal to—
‘‘(A) the aggregate amount of grants made
to the qualified entity under section 698(b); di-
vided by
‘‘(B) the aggregate amount of all funds pro-
vided to the qualified entity by all sources to
conduct the project.
‘‘SEC. 692. ELIGIBILITY FOR PARTICIPATION.
‘‘(a) IN GENERAL.—Any individual who is a member
of a household that is eligible for assistance under the State
temporary assistance for needy families program estab-
lished under part A of title IV of the Social Security Act
(42 U.S.C. 601 et seq.), or that meets each of the following
requirements shall be eligible to participate in a demonstra-
tion project conducted under this part:
‘‘(1) INCOME TEST.—The adjusted gross income
of the household does not exceed the earned income
amount described in section 32 of the Internal Reve-
nue Code of 1986 (taking into account the size of the
household).
‘‘(2) NET WORTH TEST.—
‘‘(A) IN GENERAL.—The net worth of the
household, as of the end of the calendar year pre-
ceding the determination of eligibility, does not
exceed $10,000.
‘‘(B) DETERMINATION
OF
NET
WORTH.—
For purposes of subparagraph (A), the net worth
of a household is the amount equal to—
‘‘(i) the aggregate market value of all
assets that are owned in whole or in part
by any member of the household; minus
‘‘(ii) the obligations or debts of any
member of the household.
‘‘(C) EXCLUSIONS.—For purposes of deter-
mining the net worth of a household, a house-
hold’s assets shall not be considered to include
the primary dwelling unit and 1 motor vehicle
owned by the household.
‘‘(b) INDIVIDUALS
UNABLE
TO
COMPLETE
THE
PROJECT.—The Secretary shall establish such regulations
as are necessary, including prohibiting future eligibility to
participate in any other demonstration project conducted
under this part, to ensure compliance with this part if an
individual participating in the demonstration project
moves from the community in which the project is con-
ducted or is otherwise unable to continue participating in
that project.
‘‘SEC. 693. SELECTION OF INDIVIDUALS TO PARTICIPATE.
‘‘From among the individuals eligible to participate
in a demonstration project conducted under this part, each
qualified entity shall select the individuals—
‘‘(1) that the qualified entity deems to be best
suited to participate; and
‘‘(2) to whom the qualified entity will provide
deposits in accordance with section 694.
‘‘SEC. 694. DEPOSITS BY QUALIFIED ENTITIES.
‘‘(a) IN GENERAL.—Not less than once every 3 months
during each project year, each qualified entity under this
Act shall deposit in the individual development account of
each individual participating in the project, or into a par-
allel account maintained by the qualified entity—
‘‘(1) from the non-Federal funds described in sec-
tion 689(c)(4), a matching contribution of not less
than $0.50 and not more than $4 for every $1 of
earned income (as defined in section 911(d)(2) of the
Internal Revenue Code of 1986) deposited in the ac-
count by a project participant during that period;
‘‘(2) from the grant made under section 690(b),
an amount equal to the matching contribution made
under paragraph (1); and
‘‘(3) any interest that has accrued on amounts
deposited under paragraph (1) or (2) on behalf of that
individual into the individual development account of
the individual or into a parallel account maintained
by the qualified entity.
‘‘(b) LIMITATION ON DEPOSITS FOR AN INDIVIDUAL.—
Not more than $2,000 from a grant made under section
690(b) shall be provided to any 1 individual over the course
of the demonstration project.
‘‘(c) LIMITATION ON DEPOSITS FOR A HOUSEHOLD.—
Not more than $4,000 from a grant made under section
690(b) shall be provided to any 1 household over the course
of the demonstration project.
‘‘(d) WITHDRAWAL OF FUNDS.—The Secretary shall
establish such guidelines as may be necessary to ensure that
funds held in an individual development account are not
withdrawn, except for 1 or more qualified expenses, or for
an emergency withdrawal. Such guidelines shall include a
requirement that a responsible official of the qualified en-
tity conducting a project approve such withdrawal in writ-
ing. The guidelines shall provide that no individual may
withdraw funds from an individual development account
earlier than 6 months after the date on which the individual
first deposits funds in the account.
‘‘(e) REIMBURSEMENT.—An individual shall reim-
burse an individual development account for any funds
withdrawn from the account for an emergency withdrawal,
not later than 12 months after the date of the withdrawal.
If the individual fails to make the reimbursement, the quali-
fied entity administering the account shall transfer the
funds deposited into the account or a parallel account under
section 694 to the Reserve Fund of the qualified entity, and
use the funds to benefit other individuals participating in
the demonstration project involved.
‘‘SEC. 
695. 
LOCAL 
CONTROL 
OVER 
DEMONSTRATION
PROJECTS.
‘‘A qualified entity under this part, other than a State
or local government agency or a tribal government, shall,
subject to the provisions of section 697, have sole authority
over the administration of the project. The Secretary may
prescribe only such regulations or guidelines with respect
to demonstration projects conducted under this part as are
necessary to ensure compliance with the approved applica-
tions and the requirements of this part.
‘‘SEC. 696. ANNUAL PROGRESS REPORTS.
‘‘(a) IN GENERAL.—Each qualified entity under this
part shall prepare an annual report on the progress of the
demonstration project. Each report shall include both pro-
gram and participant information and shall specify for the
period covered by the report the following information:
‘‘(1) The number and characteristics of individ-
uals making a deposit into an individual develop-
ment account.
‘‘(2) The amounts in the Reserve Fund estab-
lished with respect to the project.
‘‘(3) The amounts deposited in the individual de-
velopment accounts.
‘‘(4) The amounts withdrawn from the individ-
ual development accounts and the purposes for which
such amounts were withdrawn.
‘‘(5) The balances remaining in the individual
development accounts.
‘‘(6) The savings account characteristics (such as
threshold amounts and match rates) required to stim-
ulate participation in the demonstration project, and
how such characteristics vary among different popu-
lations or communities.
‘‘(7) What service configurations of the qualified
entity (such as peer support, structured planning ex-
ercises, mentoring, and case management) increased
the rate and consistency of participation in the dem-
onstration project and how such configurations varied
among different populations or communities.
‘‘(8) Such other information as the Secretary
may require to evaluate the demonstration project.
‘‘(b) SUBMISSION OF REPORTS.—The qualified entity
shall submit each report required to be prepared under sub-
section (a) to—
‘‘(1) the Secretary; and
‘‘(2) the Treasurer (or equivalent official) of the
State in which the project is conducted, if the State
or a local government or a tribal government commit-
ted funds to the demonstration project.
‘‘(c) TIMING.—The first report required by subsection
(a) shall be submitted not later than 60 days after the end
of the calendar year in which the Secretary authorized the
qualified entity to conduct the demonstration project, and
subsequent reports shall be submitted every 12 months there-
after, until the conclusion of the project.
‘‘SEC. 697. SANCTIONS.
‘‘(a) AUTHORITY TO TERMINATE DEMONSTRATION
PROJECT.—If the Secretary determines that a qualified en-
tity under this part is not operating the demonstration
project in accordance with the entity’s application or the
requirements of this part (and has not implemented any
corrective recommendations directed by the Secretary), the
Secretary shall terminate such entity’s authority to conduct
the demonstration project.
‘‘(b) ACTIONS REQUIRED UPON TERMINATION.—If the
Secretary terminates the authority to conduct a demonstra-
tion project, the Secretary—
‘‘(1) shall suspend the demonstration project;
‘‘(2) shall take control of the Reserve Fund estab-
lished pursuant to section 691;
‘‘(3) shall make every effort to identify another
qualified entity (or entities) willing and able to con-
duct the project in accordance with the approved ap-
plication (or, as modified, if necessary to incorporate
the recommendations) and the requirements of this
part;
‘‘(4) shall, if the Secretary identifies an entity
(or entities) described in paragraph (3)—
‘‘(A) authorize the entity (or entities) to
conduct the project in accordance with the ap-
proved application (or, as modified, if necessary,
to incorporate the recommendations) and the re-
quirements of this part;
‘‘(B) transfer to the entity (or entities) con-
trol over the Reserve Fund established pursuant
to section 691; and
‘‘(C) consider, for purposes of this part—
‘‘(i) such other entity (or entities) to be
the qualified entity (or entities) originally
authorized to conduct the demonstration
project; and
‘‘(ii) the date of such authorization to
be the date of the original authorization;
and
‘‘(5) if, by the end of the 1-year period beginning
on the date of the termination, the Secretary has not
found a qualified entity (or entities) described in
paragraph (3), shall—
‘‘(A) terminate the project; and
‘‘(B) from the amount remaining in the Re-
serve Fund established as part of the project,
remit to each source that provided funds under
section 689(c)(4) to the entity originally author-
ized to conduct the project, an amount that bears
the same ratio to the amount so remaining as
the amount provided by the source under section
689(c)(4) bears to the amount provided by all
such sources under that section.
‘‘SEC. 698. EVALUATIONS.
‘‘(a) IN GENERAL.—Not later than 10 months after the
date of enactment of this part, the Secretary shall enter into
a contract with an independent research organization to
evaluate, individually and as a group, all qualified entities
and sources participating in the demonstration projects
conducted under this part.
‘‘(b) FACTORS TO EVALUATE.—In evaluating any
demonstration project conducted under this part, the re-
search organization shall address the following factors:
‘‘(1) The effects of incentives and organizational
or institutional support on savings behavior in the
demonstration project.
‘‘(2) The savings rates of individuals in the dem-
onstration project based on demographic characteris-
tics including gender, age, family size, race or ethnic
background, and income.
‘‘(3) The economic, civic, psychological, and so-
cial effects of asset accumulation, and how such effects
vary among different populations or communities.
‘‘(4) The effects of individual development ac-
counts on homeownership, level of postsecondary edu-
cation attained, and self-employment, and how such
effects vary among different populations or commu-
nities.
‘‘(5) The potential financial returns to the Fed-
eral Government and to other public sector and pri-
vate sector investors in individual development ac-
counts over a 5-year and 10-year period of time.
‘‘(6) The lessons to be learned from the dem-
onstration projects conducted under this part and if
a permanent program of individual development ac-
counts should be established.
‘‘(7) Such other factors as may be prescribed by
the Secretary.
‘‘(c) METHODOLOGICAL REQUIREMENTS.—In evaluat-
ing any demonstration project conducted under this part,
the research organization shall—
‘‘(1) for at least 1 site, use control groups to
compare participants with nonparticipants;
‘‘(2) before, during, and after the project, obtain
such quantitative data as are necessary to evaluate
the project thoroughly; and
‘‘(3) develop a qualitative assessment, derived
from sources such as in-depth interviews, of how asset
accumulation affects individuals and families.
‘‘(d) REPORTS BY THE SECRETARY.—
‘‘(1) INTERIM REPORTS.—Not later than 90 days
after the end of the calendar year in which the Sec-
retary first authorizes a qualified entity to conduct a
demonstration project under this part, and every 12
months thereafter until all demonstration projects
conducted under this part are completed, the Sec-
retary shall submit to Congress an interim report set-
ting forth the results of the reports submitted pursu-
ant to section 696(b).
‘‘(2) FINAL REPORTS.—Not later than 12 months
after the conclusion of all demonstration projects con-
ducted under this part, the Secretary shall submit to
Congress a final report setting forth the results and
findings of all reports and evaluations conducted pur-
suant to this part.
‘‘(e) EVALUATION EXPENSES.—The Secretary shall ex-
pend such sums as may be necessary, but not less than 2
percent of the amount appropriated under section 699A for
a fiscal year, to carry out the purposes of this section.
‘‘SEC. 699. TREATMENT OF FUNDS.
‘‘Of the funds deposited in individual development ac-
counts for eligible individuals, only the funds deposited by
the individuals (including interest accruing on those funds)
may be considered to be income, assets, or resources of the
individuals for purposes of determining eligibility for, or
the amount of assistance furnished under, any Federal or
federally assisted program based on need.
‘‘SEC. 699A. AUTHORIZATION OF APPROPRIATIONS.
‘‘There is authorized to be appropriated to carry out
this part, $25,000,000 for each of fiscal years 1999, 2000,
2001, and 2002, to remain available until expended.’’.
SEC. 105. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS.
(a) EFFECTIVE DATE.—Except as provided in sub-
section (b), this title and the amendments made by this title
shall take effect on the date of the enactment of this Act.
(b) APPLICATION OF AMENDMENTS.—The amendments
made by this title shall not apply with respect to fiscal
years ending before October 1, 1998.
TITLE II—AMENDMENTS TO THE
LOW-INCOME HOME ENERGY
ASSISTANCE ACT OF 1981
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Low-Income Home En-
ergy Assistance Amendments of 1998’’.
SEC. 202. AUTHORIZATION.
(a) IN GENERAL.—Section 2602(b) of the Low-Income
Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b))
is amended by inserting ‘‘, $1,100,000,000 for fiscal year
2000, and such sums as may be necessary for fiscal year
2001’’ after ‘‘1995 through 1999’’.
(b) PROGRAM YEAR.—Section 2602(c) of such Act (42
U.S.C. 8621(c)) is amended to read as follows:
‘‘(c) Amounts appropriated under this section in any
fiscal year for programs and activities under this title shall
be made available for obligation in the succeeding fiscal
year.’’.
(c) INCENTIVE PROGRAM FOR LEVERAGING NON-FED-
ERAL RESOURCES.—Section 2602(d) of the Low-Income
Home Energy Assistance Act of 1981 (42 U.S.C. 8621(d))
is amended by striking ‘‘for each of the fiscal years 1996’’
and all that follows through the period at the end, and in-
serting ‘‘for each of the fiscal years 1999, 2000, and 2001.’’.
(3) by redesignating paragraphs (1) through (5)
as paragraphs (2) through (6), respectively; and
(4) by inserting before paragraph (2) (as redesig-
nated in paragraph (3)) the following:
‘‘(1) EMERGENCY.—The term ‘emergency’ means—
‘‘(A) a natural disaster;
‘‘(B) a significant home energy supply shortage
or disruption;
‘‘(C) a significant increase in the cost of home
energy, as determined by the Secretary;
‘‘(D) a significant increase in home energy dis-
connections reported by a utility, a State regulatory
agency, or another agency with necessary data;
‘‘(E) a significant increase in participation in a
public benefit program such as the food stamp pro-
gram carried out under the Food Stamp Act of 1977
(7 U.S.C. 2011 et seq.), the national program to pro-
vide supplemental security income carried out under
title XVI of the Social Security Act (42 U.S.C. 1381
et seq.), or the State temporary assistance for needy
families program carried out under part A of title IV
of the Social Security Act (42 U.S.C. 601 et seq.), as
determined by the head of the appropriate Federal
agency;
‘‘(F) a significant increase in unemployment,
layoffs, or the number of households with an individ-
ual applying for unemployment benefits, as deter-
mined by the Secretary of Labor; or
‘‘(G) an event meeting such criteria as the Sec-
retary, in the discretion of the Secretary, may deter-
mine to be appropriate.’’.
(b) CONSIDERATIONS.—Section 2604(g) of such Act
(42 U.S.C. 8623(g)) is amended by striking the last 2 sen-
tences and inserting the following: ‘‘In determining whether
to make such an allotment to a State, the Secretary shall
take into account the extent to which the State was affected
by the natural disaster or other emergency involved, the
availability to the State of other resources under the pro-
gram carried out under this title or any other program,
whether a Member of Congress has requested that the State
receive the allotment, and such other factors as the Sec-
retary may find to be relevant. Not later than 30 days after
making the determination, but prior to releasing an allotted
amount to a State, the Secretary shall notify Congress of
the allotments made pursuant to this subsection.’’.
SEC. 205. STATE ALLOTMENTS.
Section 2604 of the Low-Income Home Energy Assist-
ance Act of 1981 (42 U.S.C. 8623) is amended—
(1) in subsection (b)(1), by striking ‘‘the North-
ern Mariana Islands, and the Trust Territory of the
Pacific Islands.’’ and inserting ‘‘and the Common-
wealth of the Northern Mariana Islands.’’;
(2) in subsection (c)(3)(B)(ii), by striking ‘‘ap-
plication’’ and inserting ‘‘applications’’;
(3) by striking subsection (f);
(4) in the first sentence of subsection (g), by
striking ‘‘(a) through (f)’’ and inserting ‘‘(a) through
(d)’’; and
(5) by redesignating subsection (g) as subsection
(e).
SEC. 206. ADMINISTRATION.
Section 2605 of the Low-Income Home Energy Assist-
ance Act of 1981 (42 U.S.C. 8624) is amended—
(1) in subsection (b)—
(A) in paragraph (9)(A), by striking ‘‘and
not transferred pursuant to section 2604(f) for
use under another block grant’’;
(B) in paragraph (14), by striking ‘‘; and’’
and inserting a semicolon;
(C) in the matter following paragraph (14),
by striking ‘‘The Secretary may not prescribe the
manner in which the States will comply with the
provisions of this subsection.’’; and
(D) in the matter following paragraph (16),
by inserting before ‘‘The Secretary shall issue’’
the following: ‘‘The Secretary may not prescribe
the manner in which the States will comply with
the provisions of this subsection.’’; and
(2) in subsection (c)(1)—
(A) in subparagraph (B), by striking
‘‘States’’ and inserting ‘‘State’’; and
(B) in subparagraph (G)(i), by striking
‘‘has’’ and inserting ‘‘had’’; and
(3) in paragraphs (1) and (2)(A) of subsection
(k) by inserting ‘‘, particularly those low-income
households with the lowest incomes that pay a high
proportion of household income for home energy’’ be-
fore the period.
SEC. 207. PAYMENTS TO STATES.
Section 2607(b)(2)(B) of the Low-Income Home En-
ergy Assistance Act of 1981 (42 U.S.C. 8626(b)(2)(B)) is
amended—
(1) in the first sentence, by striking ‘‘and not
transferred pursuant to section 2604(f)’’; and
(2) in the second sentence, by striking ‘‘but not
transferred by the State’’.
100
SEC. 208. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE
OPTION.
(a) EVALUATION.—The Comptroller General shall con-
duct an evaluation of the Residential Energy Assistance
Challenge program described in section 2607B of the Low-
Income Home Energy Assistance Act of 1981 (42 U.S.C.
8626b).
(b) REPORT.—Not later than 2 years after the date
of enactment of this Act, the Comptroller General shall pre-
pare and submit to Congress a report containing—
(1) the findings resulting from the evaluation de-
scribed in subsection (a); and
(2) the State evaluations described in para-
graphs (1) and (2) of subsection (b) of such section
2607B.
(c) INCENTIVE GRANTS.—Section 2607B(b)(1) of the
Low-Income Home Energy Assistance Act of 1981 (42
U.S.C. 8626b(b)(1)) is amended by striking ‘‘For each of
the fiscal years 1996 through 1999’’ and inserting ‘‘For
each fiscal year’’.
(d) TECHNICAL AMENDMENTS.—Section 2607B of such
Act (42 U.S.C. 8626b) is amended—
(1) in subsection (e)(2)—
(A) by redesignating subparagraphs (F)
through (N) as subparagraphs (E) through (M),
respectively; and
101
(B) in clause (i) of subparagraph (I) (as re-
designated in subparagraph (A)), by striking
‘‘on’’ and inserting ‘‘of’’; and
(2) by redesignating subsection (g) as subsection
(f).
Amend the title so as to read: ‘‘A bill to amend the
Community Services Block Grant Act to reauthorize and
make improvements to that Act; and to amend the Low-
Income Home Energy Assistance Act of 1981 to reau-
thorize and make improvements to that Act.’’.