Title: Community Services Block Grant Reauthorization Act of 2018
Policy area: Housing and Community Development

Summary:
Community Services Block Grant Reauthorization Act of 2018
This bill reauthorizes through FY2027 the Community Services Block Grant program and otherwise revises the program, including with respect to program administration and leadership, minimum and maximum allotments to states, and performance measurement.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5365 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 5365

  To amend the Community Services Block Grant Act to reauthorize and 
                           modernize the Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 21, 2018

   Mr. Thompson of Pennsylvania (for himself, Ms. McCollum, and Mr. 
   Stivers) introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
  To amend the Community Services Block Grant Act to reauthorize and 
                           modernize the Act.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Services Block Grant 
Reauthorization Act of 2018''.

SEC. 2. REAUTHORIZATION.

    The Community Services Block Grant Act (42 U.S.C. 9901 et seq.) is 
amended to read as follows:

          ``Subtitle B--Community Services Block Grant Program

``SEC. 671. SHORT TITLE.

    ``This subtitle may be cited as the `Community Services Block Grant 
Act'.

``SEC. 672. PURPOSES.

    ``The purposes of this subtitle are--
            ``(1) to reduce poverty in the United States by supporting 
        the activities of community action agencies that improve the 
        economic security of low-income individuals and families and 
        create new economic opportunities in the communities where they 
        live; and
            ``(2) to accomplish the objectives described in paragraph 
        (1) by--
                    ``(A) strengthening community capabilities for 
                identifying poverty conditions and opportunities to 
                alleviate such conditions;
                    ``(B) empowering low-income individuals and 
                families to respond to the unique problems and needs 
                within their communities through their maximum feasible 
                participation in advising and assessing eligible 
                entities and in designing the programs, projects, and 
                services funded under this subtitle;
                    ``(C) using innovative community-based approaches 
                that produce a measurable impact on the causes and 
                effects of poverty, including two-generation approaches 
                that create opportunities for, and address the needs 
                of, parents and children together;
                    ``(D) coordinating Federal, State, local, and other 
                assistance, including private resources, related to the 
                reduction of poverty so that resources can be used in a 
                manner responsive to local needs and conditions; and
                    ``(E) broadening the resources directed to the 
                elimination of poverty, so as to promote partnerships 
                that include--
                            ``(i) private, religious, charitable, and 
                        neighborhood-based organizations;
                            ``(ii) individuals, businesses, labor 
                        organizations, professional organizations, and 
                        other organizations engaged in expanding 
                        opportunities for all individuals; and
                            ``(iii) local government leaders.

``SEC. 673. DEFINITIONS.

    ``In this subtitle:
            ``(1) Community action agency.--The term `community action 
        agency' means an eligible entity (which meets the requirements 
        of paragraph (1) or (2), as appropriate, of section 680(c)) 
        that is a public charity and that delivers multiple programs, 
        projects, or services to a variety of low-income individuals 
        and families.
            ``(2) Community action program plan.--The term `community 
        action program plan' means a detailed plan, including a budget, 
        that is adopted by an eligible entity, for expenditures of 
        funds appropriated for a fiscal year under this subtitle for 
        the activities supported directly or indirectly by such funds.
            ``(3) Community action strategic plan.--The term `community 
        action strategic plan' means a plan that is adopted as the 
        policy of an eligible entity and that--
                    ``(A) establishes goals for a period of not more 
                than 5 years that are based on meeting needs identified 
                by the entity in consultation with the residents of the 
                community through a process of comprehensive community 
                needs assessment;
                    ``(B) provides detail on how all activities of an 
                eligible entity under this subtitle will contribute to 
                meeting such goals; and
                    ``(C) specifies how such activities will be 
                managed, funded, and measured by the performance 
                measurement system of such entity.
            ``(4) Community services network organization.--The term 
        `community services network organization' means any of the 
        following organizations funded under this subtitle:
                    ``(A) A grantee.
                    ``(B) An eligible entity.
                    ``(C) An association of grantees or eligible 
                entities.
                    ``(D) An association--
                            ``(i) with a membership composed of 
                        grantees, eligible entities, or associations of 
                        grantees or eligible entities; and
                            ``(ii) that is governed by a board of 
                        directors composed so that \3/4\ of the 
                        directors are employees or designees of such 
                        grantees, such eligible entities, or such 
                        associations.
            ``(5) Department.--The term `Department' means the 
        Department of Health and Human Services.
            ``(6) Eligible entity.--The term `eligible entity' 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 Community Services Block Grant 
                Reauthorization Act of 2018) as of the day before such 
                date of enactment, or has been designated by the 
                process described in section 680(a) (including an 
                organization serving migrant or seasonal farmworkers 
                that is so described or designated); and
                    ``(B) that has a tripartite board or other 
                mechanism described in paragraph (1) or (2), as 
                appropriate, of section 680(c).
            ``(7) Grantee.--The term `grantee' means a recipient of a 
        grant under section 675 or 676 of this subtitle or the 
        recipient of a grant under section 675A or 675B of this 
        subtitle (as in effect on the day before the date of enactment 
        of the Community Services Block Grant Reauthorization Act of 
        2018).
            ``(8) Performance benchmark.--The term `performance 
        benchmark' means a measurable objective for the operations and 
        activities set out in a community action program plan or a 
        State plan under this subtitle.
            ``(9) Performance measurement system.--The term 
        `performance measurement system' means a management information 
        system that--
                    ``(A) collects and reports information about the 
                outcomes of activities and investments funded in whole 
                or in part with funds appropriated under this subtitle, 
                including annual performance benchmarks;
                    ``(B) compares the actual outcomes with the 
                intended outcomes; and
                    ``(C) is used as a basis for management decisions 
                regarding future use of resources provided under this 
                subtitle.
            ``(10) Poverty line.--
                    ``(A) In general.--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, subject to 
                subparagraphs (C) and (D). The Secretary shall revise 
                the poverty line annually (or at any shorter interval 
                the Secretary determines to be feasible and desirable). 
                The required 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 preceding the time at which the revision is 
                made.
                    ``(B) Community services block grant eligibility 
                criterion.--Subject to subparagraphs (C), (D), and (E), 
                the poverty line, as defined in subparagraph (A), shall 
                be used as a criterion of eligibility for services or 
                assistance provided to individuals or families through 
                the community services block grant program established 
                under this subtitle.
                    ``(C) State revision of poverty line.--Whenever a 
                State determines that it serves the objectives of the 
                block grant program established under this subtitle, 
                the State may revise the poverty line not to exceed 125 
                percent of the official poverty line otherwise 
                applicable under subparagraph (A).
                    ``(D) Waivers for state use of higher eligibility 
                level.--Whenever a community action program plan 
                provides that a program, project, or service funded 
                under this subtitle requires use of a higher 
                eligibility standard than the standard otherwise 
                applicable under this paragraph for the purpose of 
                ensuring coordination of activities carried out under 
                this subtitle with other programs or activities of 
                eligible entities, the State shall, as part of the 
                application described in section 678, apply such 
                standard with respect to that program, project, or 
                service and provide documentation regarding the benefit 
                of and need for such adjustment.
                    ``(E) Procedures for continued eligibility.--A 
                State may establish procedures to ensure that a 
                participant in a program, project, or service funded 
                under this subtitle remains eligible to participate as 
                long as the participant is successfully progressing 
                towards achievement of the goals of the program, 
                project, or service, regardless of any income 
                eligibility criteria used to determine the 
                participant's initial eligibility.
            ``(11) Private, nonprofit organization.--The term `private, 
        nonprofit organization' includes a religious organization.
            ``(12) Public charity.--The term `public charity' means a 
        domestic organization that is--
                    ``(A) described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under section 501(a) of such Code; and
                    ``(B) described in paragraph (1) or (2) of section 
                509(a) of the Internal Revenue Code of 1986.
            ``(13) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services.
            ``(14) Service area.--The term `service area' means the 
        unique geographic area which the State has designated as the 
        area to be served by an eligible entity with funding under 
        section 679(a)(1)(B).
            ``(15) State.--The term `State' means any of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, Guam, the United States Virgin Islands, American Samoa, 
        or the Commonwealth of the Northern Mariana Islands.

``SEC. 674. ESTABLISHMENT OF COMMUNITY SERVICES BLOCK GRANT PROGRAM.

    ``(a) Establishment of Program.--The Secretary is authorized to 
establish a community services block grant program and to make grants 
through the program, under sections 675 and 676, to States to support 
local community action program plans carried out by eligible entities 
to reduce poverty in the communities served by such entities.
    ``(b) Authority of Secretary.--The Secretary is authorized to carry 
out other community programs described in section 691.
    ``(c) Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements.--Notwithstanding any other provision of the Omnibus 
Budget Reconciliation Act of 1981 (Public Law 97-35) or of section 
75.101(d)(1), part 75 of title 45, Code of Federal Regulations, funds 
authorized to be appropriated under this subtitle shall be subject to 
all subparts of the uniform administrative requirements, cost 
principles, and audit requirements for Federal awards as adopted in 
regulations promulgated by the Secretary to implement the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
under part 200 of title 2, Code of Federal Regulations, or any 
corresponding similar regulation (including part 75 of title 45, Code 
of Federal Regulations, or any corresponding similar regulation), as 
well as all other Federal laws and regulations related to 
intergovernmental financial transactions and to administration of 
federally funded grants and cooperative agreements between States and 
nonprofit organizations, or local governments, as applicable.

``SEC. 675. GRANTS TO TERRITORIES.

    ``(a) Apportionment.--The Secretary shall apportion the amount 
reserved under section 692(c)(1) for each fiscal year on the basis of 
need to eligible jurisdictions, among Guam, American Samoa, the United 
States Virgin Islands, and the Commonwealth of the Northern Mariana 
Islands.
    ``(b) Grants.--The Secretary shall make a grant to each eligible 
jurisdiction to which subsection (a) applies for the amount apportioned 
under subsection (a).

``SEC. 676. ALLOTMENTS AND GRANTS TO STATES.

    ``(a) Allotments in General.--From the amount appropriated under 
section 692(a) for each fiscal year and remaining after the Secretary 
makes the reservations required by section 692(c), the Secretary shall 
allot to each eligible 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 as provided in 
subsection (b).
    ``(b) Minimum Allotments.--
            ``(1) In general.--The Secretary shall allot to each State 
        not less than \1/2\ of 1 percent of the amount appropriated 
        under section 692(a) for such fiscal year and remaining after 
        the Secretary makes the reservations required by section 
        692(c).
            ``(2) Years with greater available funds.--Notwithstanding 
        paragraph (1), if the amount appropriated under section 692(a) 
        for a fiscal year and remaining after the Secretary makes the 
        reservations required by section 692(c) exceeds $850,000,000, 
        no State shall receive under this section less than \3/4\ of 1 
        percent of the remaining amount.
    ``(c) Grants and Payments.--Subject to section 677, the Secretary 
shall make grants to eligible States for the allotments described in 
subsections (a) and (b). The Secretary shall make payments for the 
grants in accordance with section 6503(a) of title 31, United States 
Code. The Secretary shall allocate the amounts allotted under 
subsections (a) and (b) quarterly, notify the States of their 
respective allocations and make each State's quarterly allocation 
amount available for expenditure by the State no later than 30 days 
after the start of the fiscal quarter for which the Secretary is 
allocating the funds.
    ``(d) Definition.--In 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. 677. PAYMENTS TO INDIAN TRIBES.

    ``(a) Definitions.--In this section:
            ``(1) Indian.--The term `Indian' means a member of an 
        Indian tribe or tribal organization.
            ``(2) Indian tribe or tribal organization.--The term 
        `Indian tribe or tribal organization' means a tribe, band, or 
        other organized group recognized in the State in which the 
        tribe, band, or group resides, or considered by the Secretary 
        of the Interior, to be an Indian tribe or an Indian 
        organization for any purpose.
    ``(b) Reservation.--
            ``(1) Application.--Paragraph (2) shall apply only if, with 
        respect to any State, the Secretary--
                    ``(A) receives a request from the governing body of 
                an Indian tribe or tribal organization within such 
                State that assistance under this subtitle be made 
                available directly to such tribe or organization; and
                    ``(B) determines that the members of such Indian 
                tribe or tribal organization would be better served by 
                means of grants made directly to such tribe or 
                organization to provide benefits under this subtitle.
            ``(2) Amount.--The Secretary shall reserve from amounts 
        allotted to a State under section 676 for a fiscal year, not 
        less than the amount that bears the same ratio to the State 
        allotment for the fiscal year as the population of all eligible 
        Indians for whom a determination has been made under paragraph 
        (1)(B) bears to the population of all individuals eligible for 
        assistance through a grant made under section 676 to such 
        State.
    ``(c) Awards.--The amount reserved by the Secretary on the basis of 
a determination made under subsection (b)(1)(B) shall be made available 
by grant to the Indian tribe or tribal organization serving the Indians 
for whom the determination has been made under subsection (b)(1)(B).
    ``(d) Plan.--In order for an Indian tribe or tribal organization to 
be eligible for a grant award for a fiscal year under this section, the 
tribe or organization shall submit to the Secretary a plan for such 
fiscal year that meets such criteria as the Secretary may prescribe by 
regulation.
    ``(e) Alternative Performance Measurement System.--The Secretary 
may implement alternative requirements for tribal implementation of the 
requirements of section 678(c).

``SEC. 678. STATE PLANS AND APPLICATIONS; COMMUNITY ACTION PROGRAM 
              PLANS AND APPLICATIONS.

    ``(a) State Lead Agency.--
            ``(1) Designation.--The chief executive officer of a State 
        desiring to receive a grant under section 675 or 676 shall 
        designate, in an application submitted to the Secretary under 
        subsection (b), an appropriate State agency that agrees to 
        comply with the requirements of paragraph (2), to act as a lead 
        agency for purposes of carrying out State activities under this 
        subtitle.
            ``(2) Duties of state lead agencies.--The State lead 
        agency--
                    ``(A) shall be authorized by the chief executive 
                officer to convene State agencies and coordinate 
                information and activities funded under this subtitle;
                    ``(B) shall develop the State plan to be submitted 
                to the Secretary under subsection (b), which shall be 
                based primarily on the community action program plans 
                of eligible entities, submitted to the State as a 
                condition of receiving funding under this subtitle for 
                approval by the State;
                    ``(C) shall assist eligible entities--
                            ``(i) in conducting periodic comprehensive 
                        community needs assessments, not less often 
                        than every 3 years;
                            ``(ii) in developing community action 
                        program plans; and
                            ``(iii) in developing community action 
                        strategic plans;
                    ``(D) in conjunction with the development or 
                revision of the State plan as required under subsection 
                (b)--
                            ``(i) shall hold at least one hearing in 
                        the State on the proposed plan or proposed 
                        revised plan, to provide to the public an 
                        opportunity to comment on the public record on 
                        the proposed use and distribution of funds 
                        under the plan; and
                            ``(ii) not less than 15 days prior to the 
                        hearing, shall distribute notice of the hearing 
                        and a copy of the proposed plan or plan 
                        revision statewide to the public and directly 
                        to the chief executive officer and the 
                        chairperson of the board of each of the 
                        eligible entities (or designees) and other 
                        community services network organizations; and
                    ``(E) not less often than every 3 years, in 
                conjunction with the development of the State plan, 
                shall hold at least 1 legislative hearing.
    ``(b) State Application for State Program and State Plan.--
Beginning with the first fiscal year following the transition period 
described in section 3 of the Community Services Block Grant 
Reauthorization Act of 2018, to be eligible to receive a grant under 
section 675 or 676, a State shall prepare and submit to the Secretary 
an application containing a State plan covering a period of not more 
than 2 fiscal years. The application 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) a description of the manner in which funds made 
        available through the grant under section 675 or 676 will be 
        used to carry out the State activities described in section 
        679(b) and the State's community action program plans;
            ``(2) a summary of the community action program plans of 
        the eligible entities serving the State;
            ``(3) a description of the performance measurement system 
        in which the State and eligible entities participate under 
        section 686(a)(1)(A);
            ``(4) a plan for the State's oversight of eligible 
        entities;
            ``(5) an assurance that no eligible entity in the State 
        that received, in the previous fiscal year, funding through a 
        grant made under section 675 or 676 will have such funding 
        withheld, nor reduced below the proportional share of funding 
        the entity received from the State in the previous fiscal year, 
        nor eliminated, nor its designation as an eligible entity 
        terminated, unless, after providing the affected entity (or 
        entities, as applicable) with notice and an opportunity for a 
        hearing on the record, the State determines that cause exists 
        for such withholding, reduction or elimination of funding or 
        for termination of designation, subject to review by the 
        Secretary as provided in subsection (c) of section 684--
                    ``(A) for purposes of this subsection, the term 
                ``cause'' means:
                            ``(i) the failure of an eligible entity to 
                        comply with the terms of a corrective action 
                        plan relating to correction of a serious 
                        deficiency as described in subsection 684(b); 
                        or
                            ``(ii) a statewide proportional 
                        distribution of funds provided through a 
                        community services block grant under this 
                        subtitle to respond to--
                                    ``(I) the results of the most 
                                recently available census or other 
                                appropriate demographic data;
                                    ``(II) severe economic dislocation; 
                                or
                                    ``(III) the designation of an 
                                eligible entity to serve a geographic 
                                area that has been unserved for at 
                                least the previous 5 years; and
                    ``(B) in the case of failure of an eligible entity 
                to comply with the terms of a corrective action plan 
                relating to correction of a serious deficiency, a State 
                shall not withhold, reduce, or eliminate funding or 
                terminate the eligible entity's designation, except 
                according to the procedures set forth in subsections 
                (b) and (c) of section 684.
            ``(6) an assurance that each eligible entity serving the 
        State has established procedures that permit a low-income 
        individual, or a community organization or religious 
        organization, that considers low-income individuals or the 
        organization, respectively, to be inadequately represented on 
        the board of the eligible entity, to petition for adequate 
        representation of such individuals or organization, 
        respectively, on the board;
            ``(7) a description of the State's requirements, and 
        financial or other support, for each community action program 
        plan and community action strategic plan of an eligible entity 
        in the State and for the comprehensive community needs 
        assessment described in subsection (a)(2)(C)(i) on which the 
        community action program plans are based, which assessment may 
        be coordinated with community needs assessments conducted for 
        programs other than the program carried out under this 
        subtitle; and
            ``(8) a description of how the State will measure State and 
        eligible entity performance in achieving the goals of the State 
        plan and the community action program plans, respectively.
    ``(c) State Performance Requirements and Benchmarks.--
            ``(1) Performance requirements.--Consistent with the 
        requirements of section 686, following the transition period 
        described in section 3 of the Community Services Block Grant 
        Reauthorization Act of 2018, in order to be eligible for a 
        grant under section 675 or 676, each State shall adopt 
        performance requirements and the performance benchmarks 
        described in paragraph (2), to be included as part of the 
        performance measurement system described in section 686.
            ``(2) Annual state performance benchmarks.--Each State 
        shall include in the State plan submitted under subsection (b), 
        for each fiscal year after that transition period--
                    ``(A) performance measurements for lead agency 
                management quality;
                    ``(B) the State annual performance benchmarks 
                regarding programmatic activities described in section 
                679(b); and
                    ``(C) other performance measures, which shall 
                include--
                            ``(i) indicators of timely distribution and 
                        effective management of Federal funds by the 
                        State lead agency and of the compliance with 
                        the requirements for State personnel and for 
                        management of activities funded under this 
                        subtitle (other than this subsection); and
                            ``(ii) indicators concerning the results of 
                        activities carried out by the State under this 
                        subtitle.
    ``(d) Public Inspection.--Each plan and revision to a State plan 
prepared under this section shall be distributed for public inspection 
and comment. A hearing on such plan or revision shall be held as 
required under subparagraphs (D) and (E) of subsection (a)(2), but a 
State application for merger, combination, or privatization of funds 
under section 680(b) shall not be considered a revision.
    ``(e) Application for Community Action Program and Community Action 
Program Plan.--Beginning with the first fiscal year following the 
transition period described in section 3 of the Community Services 
Block Grant Reauthorization Act of 2018, to be eligible to receive a 
subgrant under section 679(a), each eligible entity shall prepare and 
submit to the State for approval an application containing a community 
action program plan or plans covering a period of not more than 2 
fiscal years. Such application shall be submitted no later than 90 days 
before the date for submission of the State application to the 
Secretary. The application shall contain information on the intended 
implementation of the eligible entity's activities, including 
demonstrating how the program--
            ``(1) meets needs identified in the most recent 
        comprehensive community needs assessment, and is consistent 
        with the entity's community action strategic plan for that 
        period; and
            ``(2) achieves the purposes of this subtitle through 
        programs, projects, and services, which may include the 
        activities described in section 682.
    ``(f) Eligible Entity Performance Requirements and Benchmarks.--Not 
later than the end of the transition period described in section 3 of 
the Community Services Block Grant Reauthorization Act of 2018, each 
eligible entity participating in a program funded under this subtitle 
shall--
            ``(1) adopt performance benchmarks that include--
                    ``(A) indicators concerning attainment of the goals 
                of the entity's annual community action program plans; 
                and
                    ``(B) indicators of timely and effective management 
                of Federal and other funds; and
            ``(2) participate in a statewide performance measurement 
        system under section 686.

``SEC. 679. STATE AND LOCAL USES OF FUNDS.

    ``(a) State Subgrants to Eligible Entities and Other 
Organizations.--
            ``(1) In general.--A State that receives a grant under 
        section 675 or 676 shall--
                    ``(A) reserve 2 percent of the funds made available 
                through the grant for the Community Action Innovations 
                Program described in subsection (b)(1)(C)(i); and
                    ``(B) of the remainder, use not less than 90 
                percent to make subgrants to eligible entities to 
                enable the entities to implement programs, projects, or 
                services for a purpose described in section 672.
            ``(2) Obligational requirements.--
                    ``(A) Date of obligation.--The State shall obligate 
                the funds for subgrants described in paragraph (1)(B) 
                not later than the later of--
                            ``(i) the 30th day after the date on which 
                        the State receives from the Secretary a notice 
                        of funding availability for the State's 
                        application under section 678; or
                            ``(ii) the first day of the State program 
                        year for which such funds are to be expended 
                        under the State application.
                    ``(B) Availability.--The State shall make available 
                to eligible entities for expenditure the funds for 
                subgrants described in paragraph (1)(B) not later than 
                10 days after receiving notice from the Secretary of 
                the State's quarterly allocation under section 676(c). 
                Funds allocated to eligible entities through subgrants 
                made under paragraph (1)(B) for a fiscal year shall be 
                available for obligation by the eligible entity during 
                that fiscal year and the succeeding fiscal year.
    ``(b) Statewide Activities.--
            ``(1) Use of remainder.--
                    ``(A) In general.--A State that receives a grant 
                under section 675 or 676 shall, after carrying out 
                subsection (a), use the remainder of the grant funds 
                for activities described in the State's application 
                under section 678(b) as described in subparagraphs (B) 
                and (C) and for administrative expenses subject to the 
                limitations in paragraph (2).
                    ``(B) Training and technical assistance.--After 
                applying subsection (a) and subparagraph (C), the State 
                may use the remaining grant funds for the purposes of 
                providing to eligible entities training and technical 
                assistance and resources.
                    ``(C) Innovative projects to reduce poverty.--
                            ``(i) In general.--The State shall use 
                        amounts reserved under section 679(a)(1)(A) for 
                        a Community Action Innovations Program to award 
                        subgrants, contracts, or cooperative agreements 
                        to eligible entities, or their associations, 
                        to--
                                    ``(I) carry out innovative projects 
                                to test or replicate promising new 
                                practices designed to reduce poverty 
                                conditions, including two-generation 
                                approaches that create opportunities 
                                for, and address the needs of, parents 
                                and children together; and
                                    ``(II) disseminate the results of 
                                such projects for public use.
                            ``(ii) Expenses.--The funds reserved for 
                        projects under this subparagraph may be used 
                        for reasonable expenses, of States and 
                        subgrantees, associated with administration of 
                        such projects and dissemination of their 
                        results.
                            ``(iii) Awards and obligation.--A State 
                        shall award and obligate funds reserved for 
                        projects under this subparagraph during the 
                        first program year for which the funds are 
                        appropriated. Funds provided under this 
                        subparagraph shall remain available until 
                        expended.
                            ``(iv) Matching requirements.--In the case 
                        of innovative projects that are funded in part 
                        by funds authorized under a Federal law (other 
                        than this subtitle), that includes requirements 
                        for matching the Federal funds with non-Federal 
                        funds, funds made available under this 
                        subparagraph may be deemed to be non-Federal 
                        funds for purposes of the requirements of such 
                        law.
                            ``(v) Real property.--Land or facilities 
                        improved through a project receiving an award 
                        under this subparagraph, for which the amount 
                        of the award is less than 50 percent of the 
                        total project cost, shall not be subject to the 
                        provisions of section 687(a).
                            ``(vi) Eligibility.--Activities funded 
                        under this subparagraph may include 
                        participants with incomes not exceeding 80 
                        percent of the area median income.
            ``(2) Administrative cap.--
                    ``(A) Limitation.--Of the amounts remaining after 
                the reservation for the State Community Action 
                Innovation Program under subsection (a)(1)(A) and the 
                required funding for subgrants described under 
                subsection (a)(1)(B), a State shall not spend more than 
                5 percent of such remainder for administrative 
                expenses.
                    ``(B) Definition.--In this paragraph, the term 
                `administrative expenses'--
                            ``(i) means the costs incurred by the 
                        State's lead agency for carrying out planning 
                        and management activities, including 
                        monitoring, oversight, and reporting as 
                        required by this Act; and
                            ``(ii) does not include the cost of 
                        activities conducted under paragraph (1)(B) 
                        other than monitoring.
    ``(c) Eligible Entity Use of Funds.--An eligible entity that 
receives a subgrant under subsection (a)(1)(B) shall use the subgrant 
funds to carry out a community action program plan that shall include--
            ``(1) programs, projects, and services that provide low-
        income individuals and families with opportunities--
                    ``(A) to secure and retain meaningful employment at 
                a family supporting wage;
                    ``(B) to secure an adequate education, improve 
                literacy and language ability, and obtain job-related 
                skills;
                    ``(C) to make better use of available income and 
                build assets;
                    ``(D) to obtain and maintain adequate housing and a 
                healthy living environment, including addressing the 
                heath care needs of individuals and families with 
                services and through changes in local institutions and 
                workplaces (including institutions and workplaces 
                managed by the eligible entity); or
                    ``(E) to obtain emergency materials or other 
                assistance to meet immediate individual or community 
                urgent needs and prevent greater or more prolonged 
                economic instability; and
            ``(2) activities that develop and maintain--
                    ``(A) partnerships for the purpose of changing 
                community, economic, and social conditions of poverty, 
                between the eligible entity and--
                            ``(i) State and local public entities (such 
                        as schools, institutions of higher education, 
                        housing authorities, and law enforcement 
                        agencies); and
                            ``(ii) private partners, including 
                        statewide and local businesses, associations of 
                        private employers, and private charitable and 
                        civic organizations;
                    ``(B) linkages among organizations for coordinating 
                initiatives, services, and investments so as to avoid 
                duplication, and maximize the effective use of 
                community resources for creating economic opportunity, 
                including developing lasting social and economic 
                assets; or
                    ``(C) new investments in the community to reduce 
                the incidence of poverty, including developing lasting 
                social and economic assets.

``SEC. 680. ELIGIBLE ENTITIES AND TRIPARTITE BOARDS.

    ``(a) Designation and Redesignation of Eligible Entities in 
Unserved Areas.--
            ``(1) In general.--If any geographic area of a State is 
        not, or ceases to be, served by an eligible entity, the lead 
        agency may, in consultation with local officials and 
        organizations representing the area, solicit one or more 
        applications and designate a new community action agency to 
        provide programs, projects, or services to the area, that is--
                    ``(A) a community action agency that is a private, 
                nonprofit organization and that is geographically 
                located in an area within reasonable proximity of, or 
                contiguous to, the unserved area that is already 
                providing similar programs, projects, or services, and 
                that has demonstrated financial capacity to manage and 
                account for Federal funds; or
                    ``(B) if no community action agency described in 
                subparagraph (A) is available, a private, nonprofit 
                organization (which may include an eligible entity) 
                that is geographically located in, or is in reasonable 
                proximity to, the unserved area and that is capable of 
                providing a broad range of programs, projects, or 
                services designed to achieve the purposes of this 
                subtitle as stated in section 672.
            ``(2) Requirement.--In order to serve as the eligible 
        entity for the service area, an entity described in paragraph 
        (1) shall agree to ensure that the governing board of directors 
        of the entity will meet the requirements of subsection (c).
            ``(3) Community.--A service area referred to in this 
        subsection or a portion thereof shall be treated as a community 
        for purposes of this subtitle.
    ``(b) Merger, Combination, or Privatization of Eligible Entities.--
            ``(1) In general.--If an eligible entity receiving subgrant 
        funds makes a determination described in paragraph (2) and 
        notifies the State, the State--
                    ``(A) shall assist in developing a plan for 
                implementing such merger, combination, or 
                privatization, including a budget for transitional 
                costs not to exceed 2 years in duration; and
                    ``(B) upon approving such plans, may notify the 
                Secretary that the entities are in need of and eligible 
                for funds from the merger incentive fund established 
                under section 682(a)(2).
            ``(2) Covered merger, combination, or privatization.--This 
        subsection applies when--
                    ``(A) 2 or more eligible entities determine that 
                the geographic areas of a State that they serve can be 
                more effectively served under common control or shared 
                management; or
                    ``(B) a public organization that is an eligible 
                entity determines that the area it serves can be more 
                effectively served if it becomes a private, nonprofit 
                organization that is a public charity.
            ``(3) Plans.--A State may establish requirements for 
        merger, combination, or privatization plans and for a 
        determination that the merged, combined, or privatized entity, 
        or entities, will be capable of conducting a program consistent 
        with the comprehensive needs assessments for the areas served.
    ``(c) Tripartite Boards.--
            ``(1) Private, nonprofit organizations.--
                    ``(A) Board.--In order for a private, nonprofit 
                organization to be considered to be an eligible entity 
                for purposes of section 673(6), the entity shall be 
                governed by a tripartite board of directors described 
                in subparagraph (C) that fully participates in the 
                development, planning, implementation, oversight, and 
                evaluation of the program, project, or service carried 
                out or provided through the subgrant made under section 
                679(a)(1)(B) and all activities of the entity.
                    ``(B) Selection.--The members of the board referred 
                to in subparagraph (A) shall be selected by the 
                private, nonprofit organization.
                    ``(C) Composition of board.--The board shall be 
                composed so as to assure that--
                            ``(i) \1/3\ of the members of the board are 
                        elected public officials holding office on the 
                        date of selection, or their representatives 
                        (but if an elected public official chooses not 
                        to serve, such official may designate a 
                        representative to serve as the voting board 
                        member);
                            ``(ii)(I) not fewer than \1/3\ of the 
                        members are persons chosen in accordance with 
                        democratic selection procedures adequate to 
                        assure that the members referred to in this 
                        clause are representative of low-income 
                        individuals and families in the service area; 
                        and
                            ``(II) each member who is a representative 
                        of low-income individuals and families and is 
                        also selected to represent a specific 
                        geographic area under subclause (I) resides in 
                        such area; and
                            ``(iii) the remainder of the members are 
                        representatives of business, industry, labor, 
                        religious, educational, charitable, or other 
                        significant private groups in the community.
                    ``(D) Expertise.--The eligible entity shall ensure 
                that the members of the board include, or have direct 
                access to, individuals with expertise in financial 
                management, accounting, and law.
                    ``(E) Compliance with tax-exempt and other 
                requirements.--The board of a private, nonprofit 
                organization shall ensure that the board operates and 
                conducts activities under the subgrant made under 
                section 679(a)(1)(B) in a manner that complies with--
                            ``(i) the requirements for maintaining tax-
                        exempt status under section 501(a) of the 
                        Internal Revenue Code of 1986 (26 U.S.C. 
                        501(a)) regarding the governance of charities 
                        under section 501(c)(3) of the Internal Revenue 
                        Code of 1986 (26 U.S.C. 501(c)(3)); and
                            ``(ii) applicable requirements of State 
                        nonprofit corporation and public charities law.
            ``(2) Public organizations.--
                    ``(A) Board.--In order for a local public 
                (governmental) entity to be considered to be an 
                eligible entity for purposes of section 673(6), the 
                entity shall administer a program, project, or service 
                under the supervision of a tripartite board described 
                in subparagraph (C).
                    ``(B) Selection.--The members of the board referred 
                to in subparagraph (A) shall be selected by the local 
                public entity.
                    ``(C) Composition of board.--The board shall be 
                composed so as to assure that--
                            ``(i) not more than \1/3\ of the members of 
                        the board are employees or officials, including 
                        elected officials, of the unit of government in 
                        which the organization is located;
                            ``(ii)(I) not fewer than \1/3\ of the 
                        members are persons chosen in accordance with 
                        democratic selection procedures adequate to 
                        assure that the members referred to in this 
                        clause are representative of low-income 
                        individuals and families in the service area; 
                        and
                            ``(II) each member who is a representative 
                        of low-income individuals and families and is 
                        also selected to represent a specific 
                        geographic area under subclause (I) resides in 
                        such area; and
                            ``(iii) the remainder of the members are 
                        representatives of business, industry, labor, 
                        religious, educational, charitable, or other 
                        significant private groups in the community.
                    ``(D) Expertise.--The organization shall ensure 
                that the members of the board include or have direct 
                access to individuals with expertise in financial 
                management, accounting, and law.
                    ``(E) Compliance with state requirements and 
                policy.--The board of a public organization shall 
                ensure that the board operates in a manner that 
                complies with State requirements for open meetings, 
                financial transparency, and State open records policy.
    ``(d) Operations and Duties of the Board.--The duties of a board 
described in paragraph (1) or (2) of subsection (c) shall include--
            ``(1) in the case of a board for a private, nonprofit 
        organization that is an eligible entity, having legal and 
        financial responsibility for administering and overseeing the 
        eligible entity, including making proper use of Federal funds;
            ``(2) establishing terms for officers and adopting a code 
        of ethical conduct, including a conflict of interest policy for 
        board members;
            ``(3) participating in each comprehensive community needs 
        assessment, developing and adopting as a policy for the 
        corresponding eligible entity a community action strategic 
        plan, including provisions for the use of funds under this 
        subtitle, and preparing the community action program plan for 
        the use of funds under this subtitle;
            ``(4) approving the eligible entity's operating budget;
            ``(5) reviewing all major policies of the eligible entity, 
        including conducting (for private, nonprofit organizations that 
        are eligible entities) and participating in (for local public 
        entities that are eligible entities) annual performance reviews 
        of the eligible entity's chief executive officer (or individual 
        holding an equivalent position);
            ``(6) conducting assessments of the eligible entity's 
        progress in carrying out programmatic and fiscal provisions in 
        the community action program plan, and in taking any corrective 
        action; and
            ``(7) adopting (for private, nonprofit organizations that 
        are eligible entities) and reviewing (for local public entities 
        that are eligible entities) personnel policies and procedures, 
        including policies and procedures for hiring, annual 
        evaluation, compensation, and termination, of the eligible 
        entity's chief executive officer (or individual holding a 
        similar position).

``SEC. 681. OFFICE OF COMMUNITY SERVICES.

    ``(a) Office.--
            ``(1) Establishment.--The Secretary shall establish an 
        Office of Community Services in the Department to carry out the 
        functions of this subtitle.
            ``(2) Director.--The Office shall be headed by a Director 
        (referred to in this section as the `Director').
    ``(b) Grants, Contracts, and Cooperative Agreements.--The 
Secretary, acting through the Director, shall carry out the functions 
of this subtitle through grants, contracts, or cooperative agreements.
    ``(c) Federal Performance Benchmarks.--The Secretary shall, prior 
to the beginning of each fiscal year, publish Federal performance 
benchmarks for the Office of Community Services for such year, which 
shall include targets for--
            ``(1) the timeliness of--
                    ``(A) apportionments and allotments of appropriated 
                funds to States; and
                    ``(B) the use of funds appropriated under section 
                691(b); and
            ``(2) the implementation of the requirements of the uniform 
        administrative requirements, cost principles, and audit 
        requirements described in section 674(c) with respect to funds 
        appropriated and activities conducted under this subtitle by 
        the Department, the States, and other grantees.

``SEC. 682. TRAINING, TECHNICAL ASSISTANCE, AND RELATED ACTIVITIES.

    ``(a) Activities.--
            ``(1) In general.--The Secretary shall--
                    ``(A) use amounts reserved under section 
                692(c)(2)(A) for training, technical assistance, 
                planning, evaluation, and performance measurement, to 
                assist in--
                            ``(i) development or replication of 
                        innovative initiatives;
                            ``(ii) carrying out professional 
                        development activities that expand the capacity 
                        of eligible entities;
                            ``(iii) carrying out performance 
                        measurement, reporting, and data collection 
                        activities related to programs, projects, and 
                        services carried out under this subtitle; and
                            ``(iv) correcting programmatic 
                        deficiencies, including such deficiencies of 
                        eligible entities; and
                    ``(B) subject to paragraph (2), distribute the 
                amounts reserved under section 692(c)(2)(B) directly to 
                States, eligible entities, or other community services 
                network organizations and their partners, including 
                institutions of higher education, for--
                            ``(i) professional development for key 
                        community services network organization 
                        personnel;
                            ``(ii) activities to improve community 
                        services network organization program, 
                        financial management, compliance and governance 
                        practices (including practices related to 
                        performance management information systems); 
                        and
                            ``(iii) activities that train community 
                        services network organizations and their staff 
                        and board members to effectively address the 
                        needs of low-income families and communities 
                        through place-based strategies for coordinated 
                        investment and integrated service delivery.
            ``(2) Special rule.--
                    ``(A) In general.--In distributing the reserved 
                amounts under paragraph (1)(B), the Secretary shall 
                ensure that 7.5 percent of such reserved amounts remain 
                available until the end of the second quarter of the 
                year for which funds are appropriated to be used by the 
                Secretary to award grants to States for funds--
                            ``(i) to support the one-time costs 
                        incurred by 2 or more eligible entities for 
                        legal, financial, and other activities required 
                        to effect a merger or other combination of 
                        operations and/or programs that achieves 
                        greater efficiency and impact for the use of 
                        funds appropriated under this subtitle; or
                            ``(ii) for a public organization that is an 
                        eligible entity to become a private, nonprofit 
                        organization that is a public charity.
                    ``(B) Availability after second quarter.--Any funds 
                not obligated for merger, combination, or privatization 
                incentives described in subparagraph (A) by the end of 
                the second quarter of the fiscal year shall be 
                available for other authorized purposes described in 
                this subsection.
    ``(b) Limitation.--None of the funds allocated under subsection (a) 
may be used for expenses or salaries of Federal employees or of Federal 
contractors performing services that would otherwise be performed by 
Federal employees.
    ``(c) Grants, Contracts, and Cooperative Agreements.--The 
activities described in subsection (a)(1)(A) shall be carried out 
annually by the Secretary through grants, contracts, or cooperative 
agreements with appropriate entities, which shall include all statewide 
associations of eligible entities that meet the requirements for 
receipt of Federal funds.

``SEC. 683. STATE MONITORING OF ELIGIBLE ENTITIES.

    ``In order to determine whether eligible entities receiving 
subgrants under this subtitle meet performance benchmarks described in 
section 678(f)(1), administrative standards, financial management 
requirements, and other requirements under this subtitle, the State 
shall conduct the following reviews of eligible entities:
            ``(1) A full onsite review of each eligible entity at least 
        once during each 3-year period.
            ``(2) An onsite review of each newly designated eligible 
        entity immediately after the completion of the first year in 
        which such entity receives funds through the community services 
        block grant program under this subtitle.
            ``(3) Followup reviews, including onsite reviews scheduled 
        in a corrective action plan (including return visits), within a 
        calendar quarter for eligible entities with programs, projects, 
        or services that fail to meet the State's performance criteria, 
        standards, financial management requirements, and other 
        significant requirements established under this subtitle.
            ``(4) Other reviews as appropriate, including reviews of 
        eligible entities with programs, projects, and services that 
        have had other Federal, State, or local grants (other than 
        assistance provided under this subtitle) terminated for cause.

``SEC. 684. EVALUATIONS; CORRECTIVE ACTION; WITHHOLDING, REDUCTION, OR 
              ELIMINATION OF FUNDING.

    ``(a) Evaluations of States by the Secretary.--
            ``(1) In general.--The Secretary shall conduct, in not 
        fewer than \1/3\ of the States in each fiscal year, evaluations 
        (including investigations) of State compliance with this 
        subtitle, including requirements relating to the use of funds 
        received under this subtitle, and especially with respect to 
        compliance with the requirements of State plans submitted under 
        section 678(b) and the uniform administrative requirements, 
        cost principles, and audit requirements described in section 
        674(c) as applied to funds received under this subtitle.
            ``(2) Report to states.--The Secretary shall submit, to 
        each State evaluated, a report containing--
                    ``(A) the results of such evaluation; and
                    ``(B)(i) recommendations for improvements designed 
                to enhance the benefit and impact of the activities 
                carried out with such funds; and
                    ``(ii) in the event a serious deficiency is found 
                regarding a State's compliance with this subtitle, 
                including requirements relating to the use of funds 
                received under this subtitle, a proposed corrective 
                action plan.
            ``(3) State response.--Not later than 45 days after 
        receiving a report under paragraph (2)--
                    ``(A) a State that received recommendations under 
                paragraph (2)(B)(i) shall submit to the Secretary a 
                plan of action in response to the recommendations; and
                    ``(B) a State that received a proposed corrective 
                action plan under paragraph (2)(B)(ii) shall agree to 
                implement the corrective action plan proposed by the 
                Secretary or propose to the Secretary a different 
                corrective action plan, developed by the State in a 
                timely manner that the State will implement upon 
                approval by the Secretary.
            ``(4) Report to congress.--The Secretary shall submit the 
        results of the evaluations annually, as part of the report 
        submitted by the Secretary in accordance with section 
        686(b)(2).
            ``(5) Enforcement.--
                    ``(A) Withholding of funding.--If the Secretary 
                determines under the procedures set forth in this 
                subsection that a State fails to meet the requirements 
                of this subtitle, the Secretary may withhold all or a 
                portion of the amount of funding that may be used for 
                administrative expenses, as described in section 
                679(b)(2)(A), and prohibit the State from using other 
                funds awarded under this subtitle to carry out the 
                activities described in section 679(b)(2)(B), until the 
                Secretary determines that the State has complied with 
                the requirements of paragraph (3) and section 685(b).
                    ``(B) Reduction or elimination of funding.--If the 
                Secretary determines, on the basis of a final decision 
                in an evaluation conducted under this section, that a 
                State fails to meet the requirements of this 
                subsection, the Secretary may, after providing adequate 
                notice and an opportunity for a hearing, initiate 
                proceedings to reduce or eliminate the amount of 
                funding apportioned and allocated to the State as 
                described in section 675 or 676, as applicable. To the 
                extent that all or a portion of the amount of funding 
                that may be used for administrative expenses, as 
                described in section 679(b)(2)(A), is reduced or 
                eliminated under this paragraph, the Secretary is 
                authorized to prohibit the State from using other funds 
                awarded under this subtitle to carry out the activities 
                described in section 679(b)(2)(B), unless the State 
                corrects the failure to meet the requirements.
                    ``(C) Direct awards to other entities.--
                            ``(i) Reduction or elimination of state 
                        funding.--If the Secretary reduces or 
                        eliminates funding to a State under 
                        subparagraph (B), the Secretary shall award 
                        funding, in the amount by which funding to the 
                        State was reduced or eliminated, directly to 
                        eligible entities or community services network 
                        organizations in the State, as applicable.
                            ``(ii) Direct funding to eligible 
                        entities.--Eligible entities that are grantees 
                        receiving funds directly from the Secretary, as 
                        described in clause (i), shall carry out the 
                        activities described in section 679(c) in the 
                        same manner as those eligible entities would be 
                        required to carry out such activities as 
                        subgrantees under that section.
                            ``(iii) Statewide funds.--If funds 
                        described in section 679(b) are reduced or 
                        eliminated, amounts equal to the amounts of 
                        such reduced or eliminated funds shall be 
                        awarded to an association of eligible entities 
                        in the State (or if there is no such 
                        association, to one or more eligible entities) 
                        for the purposes specified in section 
                        679(b)(1)(B).
                            ``(iv) State decision to not participate.--
                        In the event a State elects not to receive 
                        funding under this subtitle, including a 
                        refusal to submit a plan meeting the 
                        Secretary's requirements, the Secretary shall 
                        provide funding directly by grant or 
                        cooperative agreement to eligible entities in 
                        good standing at the end of the last fiscal 
                        year for which the State received an allocation 
                        under this subtitle.
            ``(6) Training and technical assistance.--The Secretary, 
        through the Department's own employees or contractors (rather 
        than under grants, contracts or cooperative agreements issued 
        under section 682), shall provide training and technical 
        assistance to States with respect to the development or 
        implementation of the States' corrective action plans.
            ``(7) Prohibitions.--Nothing in this Act shall be construed 
        to permit the Secretary (through regulation, guidance, grant 
        criteria, or otherwise) to expand the authority of the 
        Secretary beyond that expressly provided to the Secretary in 
        this Act.
    ``(b) Determination of Local Agency Failure To Comply.--
            ``(1) Corrective action by local agencies.--If the State 
        determines, on the basis of a review pursuant to section 683 or 
        section 685, that there is a serious deficiency regarding an 
        eligible entity's compliance with this subtitle, the State 
        shall inform the entity of the serious deficiencies that shall 
        be corrected and provide technical assistance for the 
        corrective action.
            ``(2) Local corrective action plans.--An eligible entity 
        that is found to have a serious deficiency under paragraph (1) 
        shall develop, in a timely manner, a corrective action plan 
        that shall be subject to the approval of the State, and that 
        shall specify--
                    ``(A) the deficiencies to be corrected;
                    ``(B) the actions to be taken to correct such 
                deficiencies; and
                    ``(C) the timetable for accomplishment of the 
                corrective actions specified.
            ``(3) Final decision.--If the State determines, on the 
        basis of a final decision in a review conducted under section 
        683, that an eligible entity fails to comply with the terms of 
        a corrective action plan under paragraph (2) relating to 
        correction of a serious deficiency for the eligible entity, the 
        State may, after providing adequate notice and an opportunity 
        for a hearing, initiate proceedings to withhold, reduce, or 
        eliminate the funding provided under section 679(a)(1)(B) to 
        the eligible entity (including, in the case of elimination of 
        funding, terminating the designation under this subtitle of the 
        eligible entity) unless the entity corrects the serious 
        deficiency.
    ``(c) Review.--
            ``(1) In general.--A State's determination under subsection 
        (b) to withhold, reduce, or eliminate funding, or to terminate 
        the designation of an eligible entity (eligible entities, as 
        applicable) may be reviewed by the Secretary. Upon request by a 
        community services network organization, the Secretary shall 
        review such a determination. The review shall be completed not 
        later than 60 days after the Secretary receives from the State 
        all necessary documentation relating to the determination 
        except as provided in paragraph (2).
            ``(2) Failure to provide documentation.--If the State fails 
        to provide such documentation within 30 days after the 
        Secretary's request, the State may not expend funds for the 
        purposes described in section 679(b)(2) until the State 
        provides such documentation. The Secretary shall respond to the 
        State with a decision not later than 30 days after receiving 
        the documentation.
    ``(d) Direct Assistance.--Whenever the Secretary determines that a 
State has violated the State plan described in section 678(b) 
(including, but not limited to, the assurance described in section 
678(b)(5)) and the State has withheld, reduced, or eliminated the 
funding provided under section 679(a) to any eligible entity or 
entities or terminated the eligible entity designation of any eligible 
entity or entities prior to the completion of the State proceedings 
described in section 678(b)(5) (including, where applicable, the 
proceedings required by subsection (b) of this section 684) and the 
Secretary's review as required by subsection (c) of this section 684, 
the Secretary shall provide financial assistance under this subtitle to 
the affected eligible entity or entities directly until the violation 
is corrected by the State. In such a case, the grant for the State 
under section 675 or 676 for the earliest appropriate fiscal year shall 
be reduced by an amount equal to the financial assistance provided 
under this subsection to such eligible entity or entities.

``SEC. 685. STATE AND LOCAL FISCAL CONTROLS, AUDITS, AND WITHHOLDING.

    ``(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 accounting 
                procedures necessary to assure the proper disbursal of, 
                and accounting for, Federal funds paid to the State 
                under this subtitle, including procedures for 
                monitoring the funds provided under this subtitle;
                    ``(B) in accordance with paragraphs (2) and (3), 
                prepare, not less than once each year, an audit of the 
                expenditures of the State of amounts received under 
                this subtitle; and
                    ``(C) 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 representatives, for examination, 
                copying, or mechanical reproduction on or off the 
                premises of the appropriate entity upon a reasonable 
                request for the items.
            ``(2) Independent entity.--Subject to paragraph (3), each 
        audit required by paragraph (1)(B) shall be conducted by an 
        entity independent of any agency administering activities or 
        services under this subtitle and shall be conducted in 
        accordance with generally accepted accounting principles.
            ``(3) Single audit requirements.--
                    ``(A) In general.--Any audit under this subsection 
                shall be conducted in the manner and to the extent 
                provided in chapter 75 of title 31, United States Code 
                (commonly known as the `Single Audit Act Amendments of 
                1984') except in the event a serious financial 
                deficiency is identified.
                    ``(B) Serious financial deficiency.--In the event 
                that such a deficiency is identified, the Secretary 
                shall order--
                            ``(i) an audit conducted as described in 
                        subparagraph (A); or
                            ``(ii) an audit of each of the accounts 
                        involved, in accordance with paragraphs (2) and 
                        (4).
            ``(4) Submission of copies.--Not later than 30 days after 
        the completion of each such audit in a State, the chief 
        executive officer of the State shall submit copies of such 
        audit, at no charge, to any eligible entity that was the 
        subject of the audit, to the legislature of the State, and to 
        the Secretary.
            ``(5) Repayments.--If the Secretary, after review of the 
        audit, finds that a State has not expended an amount of funds 
        in accordance with this subtitle, the State shall immediately 
        use an amount of State funds equal to the amount of improperly 
        expended funds for the original purposes for which the grant 
        funds were intended.
            ``(6) 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 
        grant funds received under section 675 or 676 or to carry out 
        State activities under this subtitle in accordance with the 
        provisions of this subtitle.
            ``(7) Investigations.--Whenever the Secretary determines 
        that there is a pattern of complaints regarding failures 
        described in paragraph (6) or a complaint of a serious 
        deficiency concerning any State, the Secretary shall conduct an 
        investigation of the use of the funds received under this 
        subtitle by such State in order to ensure compliance with the 
        provisions of this subtitle.
    ``(b) State Funds.--
            ``(1) Corrective action plan.--In the event the Secretary 
        withholds funding pursuant to section 684(a)(5)(A), the 
        Secretary shall subsequently make the withheld funding 
        available to the State not later than 90 days after the date of 
        correction of the serious deficiency specified in the 
        corrective action plan described in section 684(a)(2)(B)(ii), 
        provided that the State complies with the corrective action 
        plan approved by the Secretary and corrects the serious 
        deficiency by the date specified in such corrective action 
        plan.
            ``(2) Application.--For purposes of paragraph (1), failures 
        described in subsection (a)(6) shall be considered to be 
        serious deficiencies.

``SEC. 686. ACCOUNTABILITY AND REPORTING REQUIREMENTS.

    ``(a) State Accountability and Reporting Requirements.--
            ``(1) Performance measurement.--
                    ``(A) In general.--By October 1, 2018, each State 
                that receives funds under this subtitle shall 
                participate, and shall ensure that all eligible 
                entities in the State participate, in a performance 
                measurement system that the Secretary is satisfied 
                meets the requirements of paragraph (8) of section 
                678(b).
                    ``(B) Local organizations.--The State may elect to 
                have local organizations that are subgrantees of the 
                eligible entities under this subtitle participate in 
                the performance measurement system. If the State makes 
                that election, references in this section to eligible 
                entities shall be considered to include the local 
                organizations.
                    ``(C) Eligible entity reports.--Eligible entities 
                shall provide the results measured by their performance 
                measurement system, reports on the achievement of their 
                annual performance benchmarks, and such other reports 
                as the State may require.
            ``(2) Annual report.--Each State receiving funds under this 
        subtitle shall annually prepare, and submit to the Secretary by 
        March 31 of each year, a report on the performance of the State 
        and eligible entities in the State, including achievement with 
        respect to the State lead agency performance benchmarks and the 
        local performance benchmarks respectively and to other 
        performance measurements that were used by community service 
        network organizations in the State for the prior year. Each 
        State shall also include in the report--
                    ``(A) 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 administrative or indirect costs by the State 
                and the eligible entities and funds spent by the 
                eligible entities on local programs, projects, and 
                services;
                    ``(B) information on the number and characteristics 
                of participants served under this subtitle in the 
                State, based on data collected from the eligible 
                entities;
                    ``(C) a summary describing the training and 
                technical assistance offered by the State under 
                subparagraph (B) of section 679(b)(1) during the year 
                covered by the report;
                    ``(D) the State's management performance benchmark 
                results;
                    ``(E) information on the total budget and 
                activities of the eligible entities receiving subgrants 
                from the State under this subtitle, including local and 
                private resources available for a purpose described in 
                section 672;
                    ``(F) a report on the Community Action Innovations 
                Program in the State; and
                    ``(G) a report on the manner in which the State and 
                eligible entities and other recipients of funds under 
                this subtitle have implemented results-oriented 
                management practices based on their performance 
                measurement systems.
    ``(b) Reporting Requirements.--
            ``(1) Contents.--Not later than September 30 of each fiscal 
        year, the Secretary shall, directly or by grant or contract, 
        prepare a report including--
                    ``(A) the information included in the State annual 
                reports under subsection (a)(2) for the preceding 
                fiscal year;
                    ``(B) a report on the performance of the Department 
                in the preceding fiscal year regarding the performance 
                benchmarks established under section 681(c); and
                    ``(C) a description of the training and technical 
                assistance activities funded by the Secretary under 
                section 682 and the results of those activities.
            ``(2) Submission.--The Secretary shall submit to the 
        Committee on Education and the Workforce of the House of 
        Representatives and to the Committee on Health, Education, 
        Labor, and Pensions of the Senate the report described in 
        paragraph (1) and any recommendations the Secretary may have 
        with respect to such report.
            ``(3) Electronic data system for reports to states and 
        eligible entities.--The Secretary, through the Department's own 
        employees or contractors (rather than under grants, contracts, 
        or cooperative agreements issued under section 682), shall 
        provide technical assistance, including support for the 
        development and maintenance of an electronic data system for 
        the reports under this section, to the States and eligible 
        entities to enhance the quality and timeliness of reports 
        submitted under this subtitle. The system shall be coordinated 
        and consistent with the data systems established for other 
        programs of the Department that are managed by eligible 
        entities, including all programs of the Administration for 
        Children and Families or successor administrative units in 
        which the office is located.

``SEC. 687. LIMITATIONS ON USE OF FUNDS.

    ``(a) Construction of Facilities.--
            ``(1) Limitations.--Except as provided in paragraph (2) and 
        in section 679(b)(1)(C), grants or subgrants made under this 
        subtitle may not be used by the State, or by any other person 
        with which the State makes arrangements to carry out a purpose 
        described in section 672, for the purchase or improvement of 
        land, or the purchase, construction or permanent improvement 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--
                    ``(A) the request describes extraordinary 
                circumstances to justify the purchase or improvement of 
                land, or the purchase, construction, or permanent 
                improvement of any building or other facilities; and
                    ``(B) permitting the waiver will contribute to the 
                ability of the State and eligible entities to carry out 
                a purpose described in section 672 at substantially 
                reduced costs.
    ``(b) Political Activities.--
            ``(1) Treatment as a state or local agency.--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.--An entity carrying out a program, 
        project, or service assisted under this subtitle, and any 
        individual employed by, or assigned to or in, such a program, 
        project, or service (during the hours in which the individual 
        is working on behalf of the program, project, or service) shall 
        not engage in--
                    ``(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; or
                    ``(B) any activity to provide voters or prospective 
                voters with transportation to the polls or similar 
                assistance in connection with any such election.
            ``(3) Registration.--None of the funds appropriated to 
        carry out this subtitle may be used to conduct voter 
        registration activities.
    ``(c) Nondiscrimination.--
            ``(1) In general.--No person shall, on the basis of race, 
        color, national origin, or sex, be excluded from participation 
        in, be denied the benefits of, or be subjected to 
        discrimination under, any program, project, or service funded 
        in whole or in part with funds made available under this 
        subtitle. Any prohibition 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, project, or 
        service.
            ``(2) Action of secretary.--Whenever the Secretary 
        determines that a State that has received a payment under this 
        subtitle has failed to comply with paragraph (1) or an 
        applicable regulation, the Secretary shall notify the chief 
        executive officer of the State and shall request that the 
        officer secure compliance. If within a reasonable period of 
        time, not to exceed 60 days, the chief executive officer fails 
        or refuses to secure compliance, the Secretary is authorized 
        to--
                    ``(A) refer the matter to the Attorney General with 
                a recommendation that an appropriate civil action be 
                instituted;
                    ``(B) exercise the powers and functions provided by 
                title VI of the Civil Rights Act of 1964 (42 U.S.C. 
                2000d et seq.), the Age Discrimination Act of 1975 (42 
                U.S.C. 6101 et seq.), 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.), as may be applicable; or
                    ``(C) take such other action as may be provided 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 appropriate, 
        including injunctive relief.

``SEC. 688. DRUG AND CHILD SUPPORT SERVICES AND REFERRALS.

    ``(a) Drug Testing and Rehabilitation.--
            ``(1) In general.--Nothing in this subtitle shall be 
        construed to prohibit a State from testing participants in 
        programs, projects, or services carried out or provided under 
        this subtitle for controlled substances. A State that conducts 
        such testing shall inform the participants who test positive 
        for any of such substances about the availability of treatment 
        or rehabilitation services and refer such participants for 
        appropriate treatment or rehabilitation services.
            ``(2) Administrative expenses.--Any funds provided under 
        this subtitle expended for such testing shall be considered to 
        be expended for administrative expenses and shall be subject to 
        the limitation specified in section 679(b)(2).
            ``(3) Definition.--In this subsection, the term `controlled 
        substance' has the meaning given the term in section 102 of the 
        Controlled Substances Act (21 U.S.C. 802).
    ``(b) Child Support Services and Referrals.--During each fiscal 
year for which an eligible entity receives a subgrant under section 
679(a), such entity shall--
            ``(1) inform custodial parents in single-parent families 
        that participate in programs, projects, or services carried out 
        or provided under this subtitle about the availability of child 
        support services; and
            ``(2) refer eligible parents to the child support offices 
        of State and local governments.

``SEC. 689. OPERATIONAL RULES.

    ``(a) Religious Organizations Included as Nongovernmental 
Providers.--For any program carried out by the Federal Government, or 
by a State or local government under this subtitle, the government 
shall consider, on the same basis as other nongovernmental 
organizations, religious organizations to provide 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 organization that provides assistance under, or applies to 
provide assistance under, this subtitle, on the basis that the 
organization has a religious character.
    ``(b) Religious Character and Independence.--
            ``(1) In general.--A religious organization that provides 
        assistance under a program described in subsection (a) shall 
        retain its religious character and control over the definition, 
        development, practice, and expression of its religious beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State or local government shall require a 
        religious organization--
                    ``(A) to alter its form of internal governance, 
                except (for purposes of administration of the community 
                services block grant program) as provided in section 
                681(c); or
                    ``(B) to remove religious art, icons, scripture, or 
                other symbols,
        in order to be eligible to provide assistance under a program 
        described in subsection (a).
            ``(3) Employment practices.--A religious organization's 
        exemption provided under section 702 of the Civil Rights Act of 
        1964 (42 U.S.C. 2000e-1) regarding employment practices shall 
        not be affected by its participation in, or receipt of funds 
        from, programs described in subsection (a).
    ``(c) Limitations on Use of Funds for Certain Purposes.--No funds 
provided directly to a religious organization to provide assistance 
under any program described in subsection (a) shall be expended for 
sectarian worship, instruction, or proselytization.
    ``(d) Fiscal Accountability.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        religious organization providing assistance 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 program into a separate 
        account. Only the Government funds shall be subject to audit by 
        the Government.
    ``(e) Treatment of Eligible Entities and Other Intermediate 
Organizations.--If an eligible entity or other organization (referred 
to in this subsection as an `intermediate organization'), acting under 
a contract, or grant or other agreement, with the Federal Government or 
a State or local government, is given the authority under the contract 
or agreement to select nongovernmental organizations to provide 
assistance under the programs described in subsection (a), the 
intermediate organization shall have the same duties under this section 
as the Government.

``SEC. 690. REGULATIONS.

    ``(a) Regulations.--The Secretary shall promulgate regulations 
implementing this subtitle, by administrative hearing open to the 
public, including regulations regarding--
            ``(1) State plans and community action program plans, 
        including the form and information required for State plans 
        submitted to the Secretary and community action program plans 
        submitted to States;
            ``(2) State monitoring of eligible entities; and
            ``(3) reports to the Secretary described in section 686.
    ``(b) Guidance.--
            ``(1) In general.--The Secretary shall issue guidance 
        regarding State and local performance measurement systems, 
        including State management performance benchmarks and 
        comprehensive community needs assessments.
            ``(2) State management performance benchmarks.--The 
        Secretary, in consultation with community services network 
        organizations, shall develop State management performance 
        benchmarks, which shall include indicators about--
                    ``(A) a State's timely obligation and distribution 
                of Federal funds, and effective State oversight of 
                Federal funds;
                    ``(B) a State's compliance with the uniform 
                administrative requirements, cost principles, and audit 
                requirements described in section 674(c);
                    ``(C) a State's effective management of the 
                activities funded under this subtitle; and
                    ``(D) the results of activities funded by the State 
                under section 679(b).
            ``(3) Comprehensive analysis of poverty conditions.--The 
        Secretary shall provide guidance (including models) for 
        comprehensive community needs assessments described in section 
        678(a)(2)(C)(i). The guidance shall include methods for 
        preparing an analysis of all poverty conditions affecting a 
        community and of local and regional assets for alleviating such 
        conditions.

``SEC. 691. DISCRETIONARY COMMUNITY PROGRAMS.

    ``(a) Grants, Contracts, Arrangements, Loans, and Guarantees.--
            ``(1) In general.--The Secretary shall, from funds 
        appropriated under section 692(b), make grants, loans, or 
        guarantees to States and public agencies and private, nonprofit 
        organizations, or enter into contracts or jointly financed 
        cooperative arrangements with States and public agencies and 
        private, nonprofit organizations (and for-profit organizations, 
        to the extent specified in paragraph (2)(E)) for each of the 
        objectives described in paragraphs (2) through (4).
            ``(2) Community economic development.--
                    ``(A) Economic development activities.--The 
                Secretary shall make grants described in paragraph (1) 
                on a competitive basis to private, nonprofit 
                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 subparagraph (A) after 
                consultation with other relevant Federal officials.
                    ``(C) Governing boards.--For a community 
                development corporation to receive funds to carry out 
                this paragraph, the corporation shall be governed by a 
                board that shall--
                            ``(i) consist of residents of the community 
                        and business and civic leaders; and
                            ``(ii) 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 geographic 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 Secretary may reserve 
                not more than 1 percent for each fiscal year to make 
                grants to private, nonprofit organizations or to enter 
                into contracts with private, nonprofit, or for-profit 
                organizations to provide technical assistance to aid 
                community 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 activities.--The 
        Secretary shall provide the assistance described in paragraph 
        (1) for rural community development activities, which shall 
        include providing--
                    ``(A) grants to private, nonprofit corporations to 
                enable the corporations to provide assistance 
                concerning home repair to rural low-income families and 
                concerning planning and developing low-income rural 
                rental housing units; and
                    ``(B) grants to multistate, regional, private, 
                nonprofit organizations to enable the organizations to 
                provide training and technical assistance to small, 
                rural communities concerning meeting their community 
                facility needs.
            ``(4) Neighborhood innovation projects.--The Secretary 
        shall provide the assistance described in paragraph (1) for 
        neighborhood innovation projects, which--
                    ``(A) shall include providing grants to 
                neighborhood-based, private, nonprofit organizations to 
                test or assist in the development of new approaches or 
                methods that will assist in the furthering the purposes 
                of this subtitle, including two-generation approaches 
                that create opportunities for, and address the needs 
                of, parents and children together; and
                    ``(B) may include providing assistance for projects 
                that are designed to serve low-income individuals and 
                families who are not being effectively served by other 
                programs.
    ``(b) Evaluation.--The Secretary shall require all activities 
receiving assistance under this section to be evaluated 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 specifically for the purpose of evaluation of a 
particular activity or group of activities.
    ``(c) Annual Report.--The Secretary shall compile an annual report 
containing a summary of the evaluations required under subsection (b) 
and a listing of all activities assisted under this section. The 
Secretary shall annually submit the report to the chairperson of the 
Committee on Education and the Workforce of the House of 
Representatives and the chairperson of the Committee on Health, 
Education, Labor, and Pensions of the Senate.

``SEC. 692. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to carry 
out this subtitle (not including section 691)--
            ``(1) $850,000,000 for each of fiscal years 2018 through 
        2022; and
            ``(2) such sums as may be necessary for fiscal years 2023 
        through 2027.
    ``(b) Discretionary Programs.--There are authorized to be 
appropriated to carry out section 691 such sums as may be necessary for 
fiscal years 2018 through 2027.
    ``(c) Reservations by the Secretary.--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 675 
        (relating to grants to territories); and
            ``(2) 2 percent for activities authorized in section 682, 
        of which--
                    ``(A) not less than 50 percent of the amount 
                reserved by the Secretary under this paragraph shall be 
                awarded through grants, contracts, or cooperative 
                agreements under section 682(c), to eligible entities, 
                community action agencies, and State and regional 
                community service network organizations, for the 
                purpose of carrying out activities described in section 
                682(a)(1)(A); and
                    ``(B) the remainder of the amount reserved under 
                this paragraph shall be distributed under section 
                682(a)(1)(B) to States, eligible entities, other 
                community services network organizations, or other 
                entities, for the purpose of carrying out activities 
                described in section 682(a)(1)(B).''.

SEC. 3. TRANSITION PERIOD.

    (a) Transition Period.--The Secretary of Health and Human Services 
shall expeditiously announce a transition period for the implementation 
of any changes in regulations, procedures, and reporting requirements 
of the Community Services Block Grant Act (42 U.S.C. 9901 et seq.), as 
amended by this Act, from the regulations, procedures, and reporting 
requirements of the Community Services Block Grant Act (42 U.S.C. 9901 
et seq.), as in effect on the day before the date of enactment of this 
Act.
    (b) Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements; Federal Training.--The transition period shall include--
            (1) a schedule for implementation of requirements relating 
        to adoption of the uniform administrative requirements, cost 
        principles, and audit requirements described in section 674(c) 
        of the Community Services Block Grant Act (42 U.S.C. 9901), as 
        amended by this Act; and
            (2) the availability of Federal training for States and 
        eligible entities regarding compliance with new requirements 
        under the Community Services Block Grant Act (42 U.S.C. 9901 et 
        seq.), as amended by this Act.
    (c) Timing.--The transition period described in this section--
            (1) may not extend later than the date that is 3 months 
        prior to the start of the second fiscal year after the date of 
        enactment of the Community Services Block Grant Reauthorization 
        Act of 2018; and
            (2) may require that certain regulations, procedures, and 
        reporting requirements be adopted before other regulations, 
        procedures, or reporting requirements.
                                 <all>