I 115th CONGRESS 2d Session H. R. 5365 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.

1. Short title This Act may be cited as the Community Services Block Grant Reauthorization Act of 2018 . 2. Reauthorization The Community Services Block Grant Act ( 42 U.S.C. 9901 et seq.) is amended to read as follows: B Community services block grant program 671. Short title This subtitle may be cited as the Community Services Block Grant Act . 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. 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. 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. 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). 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. 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). 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. 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. 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). 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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) ½ 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). . 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.