[Congressional Record Volume 144, Number 138 (Tuesday, October 6, 1998)]
[House]
[Pages H9697-H9719]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CONFERENCE REPORT ON S. 2206

  Mr. GOODLING, submitted the following conference report and statement 
on the bill (S. 2206), to amend the Head Start Act, the Low-Income Home 
Energy Assistance Act of 1981, and the Community Services Block Grant 
Act to reauthorize and make improvements to those Acts, to establish 
demonstration projects that provide an opportunity for persons with 
limited means to accumulate assets, and for other purposes:

                  Conference Report (H. Rept. 105-788)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the House to the bill (S. 
     2206), to amend the Head Start Act, the Low-Income Home 
     Energy Assistance Act of 1981, and the Community Services 
     Block Grant Act to reauthorize and make improvements to those 
     Acts, to establish demonstration projects that provide an 
     opportunity for persons with limited means to accumulate 
     assets, and for other purposes, having met, after full and 
     free conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Community Opportunities, 
     Accountability, and Training and Educational Services Act of 
     1998'' or the ``Coats Human Services Reauthorization Act of 
     1998''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

                      TITLE I--HEAD START PROGRAMS

Sec. 101. Short title.
Sec. 102. Statement of purpose.
Sec. 103. Definitions.
Sec. 104. Financial assistance for Head Start programs.
Sec. 105. Authorization of appropriations.
Sec. 106. Allotment of funds.
Sec. 107. Designation of Head Start agencies.
Sec. 108. Quality standards.
Sec. 109. Powers and functions of Head Start agencies.
Sec. 110. Head Start transition.
Sec. 111. Submission of plans to Governors.
Sec. 112. Participation in Head Start programs.
Sec. 113. Early Head Start programs for families with infants and 
              toddlers.
Sec. 114. Technical assistance and training.
Sec. 115. Professional requirements.
Sec. 116. Research and evaluation.
Sec. 117. Reports.
Sec. 118. Repeal of consultation requirement.
Sec. 119. Repeal of Head Start Transition Project Act.

            TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

Sec. 201. Reauthorization.
Sec. 202. Conforming amendments.

              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

Sec. 301. Short title.
Sec. 302. Authorization.
Sec. 303. Definitions.
Sec. 304. Natural disasters and other emergencies.
Sec. 305. State allotments.
Sec. 306. Administration.
Sec. 307. Payments to States.
Sec. 308. Residential Energy Assistance Challenge option.
Sec. 309. Technical assistance, training, and compliance reviews.

                   TITLE IV--ASSETS FOR INDEPENDENCE

Sec. 401. Short title.
Sec. 402. Findings.
Sec. 403. Purposes.
Sec. 404. Definitions.
Sec. 405. Applications.
Sec. 406. Demonstration authority; annual grants.
Sec. 407. Reserve Fund.
Sec. 408. Eligibility for participation.
Sec. 409. Selection of individuals to participate.
Sec. 410. Deposits by qualified entities.
Sec. 411. Local control over demonstration projects.
Sec. 412. Annual progress reports.
Sec. 413. Sanctions.
Sec. 414. Evaluations.
Sec. 415. Treatment of funds.
Sec. 416. Authorization of appropriations.
                      TITLE I--HEAD START PROGRAMS

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Head Start Amendments of 
     1998''.

     SEC. 102. STATEMENT OF PURPOSE.

       Section 636 of the Head Start Act (42 U.S.C. 9831) is 
     amended to read as follows:

     ``SEC. 636. STATEMENT OF PURPOSE.

       ``It is the purpose of this subchapter to promote school 
     readiness by enhancing the social and cognitive development 
     of low-income children through the provision, to low-income 
     children and their families, of health, educational, 
     nutritional, social, and other services that are 
     determined, based on family needs assessments, to be 
     necessary.''.

     SEC. 103. DEFINITIONS.

       Section 637 of the Head Start Act (42 U.S.C. 9832) is 
     amended--
       (1) by redesignating paragraphs (1) and (2) as paragraphs 
     (16) and (17) and inserting the paragraphs at the end of the 
     section;
       (2) by inserting before paragraph (3) the following:
       ``(1) The term `child with a disability' means--
       ``(A) a child with a disability, as defined in section 
     602(3) of the Individuals with Disabilities Education Act; 
     and
       ``(B) an infant or toddler with a disability, as defined in 
     section 632(5) of such Act.
       ``(2) The term `delegate agency' means a public, private 
     nonprofit, or for-profit organization or agency to which a 
     grantee has delegated all or part of the responsibility of 
     the grantee for operating a Head Start program.'';
       (3) by striking paragraph (4);
       (4) by redesignating paragraph (3) as paragraph (4);
       (5) by inserting after paragraph (2) the following:
       ``(3) The term `family literacy services' means services 
     that are of sufficient intensity in terms of hours, and of 
     sufficient duration, to make sustainable changes in a family, 
     and that integrate all of the following activities:
       ``(A) Interactive literacy activities between parents and 
     their children.
       ``(B) Training for parents regarding how to be the primary 
     teacher for their children and full partners in the education 
     of their children.
       ``(C) Parent literacy training that leads to economic self-
     sufficiency.
       ``(D) An age-appropriate education to prepare children for 
     success in school and life experiences.'';
       (6) in paragraph (6), by adding at the end the following: 
     ``Nothing in this paragraph shall be construed to require an 
     agency to provide services to a child who has not reached the 
     age of compulsory school attendance for more than the number 
     of hours per day permitted by State law (including 
     regulation) for the provision of services to such a child.'';
       (7) by striking paragraph (12) and inserting the following:
       ``(12) The term `migrant and seasonal Head Start program' 
     means--
       ``(A) with respect to services for migrant farmworkers, a 
     Head Start program that serves families who are engaged in 
     agricultural labor and who have changed their residence from 
     one geographic location to another in the preceding 2-year 
     period; and
       ``(B) with respect to services for seasonal farmworkers, a 
     Head Start program that serves families who are engaged 
     primarily in seasonal agricultural labor and who have not 
     changed their residence to another geographic location in the 
     preceding 2-year period.'';
       (8) by inserting after paragraph (14) the following:
       ``(15) The term `scientifically based reading research'--
       ``(A) means the application of rigorous, systematic, and 
     objective procedures to obtain valid knowledge relevant to 
     reading development, reading instruction, and reading 
     difficulties; and
       ``(B) shall include research that--
       ``(i) employs systematic, empirical methods that draw on 
     observation or experiment;
       ``(ii) involves rigorous data analyses that are adequate to 
     test the stated hypotheses and justify the general 
     conclusions drawn;
       ``(iii) relies on measurements or observational methods 
     that provide valid data across evaluators and observers and 
     across multiple measurements and observations; and

[[Page H9698]]

       ``(iv) has been accepted by a peer-reviewed journal or 
     approved by a panel of independent experts through a 
     comparably rigorous, objective, and scientific review.''; and
       (9) in paragraph (17) (as redesignated in paragraph (1))--
       (A) by striking ``Term'' and inserting ``term'';
       (B) by striking ``Virgin Islands,'' and inserting ``Virgin 
     Islands of the United States, and the Commonwealth of the 
     Northern Mariana Islands, but for fiscal years ending before 
     October 1, 2001 (and fiscal year 2002, if the legislation 
     described in section 640(a)(2)(B)(iii) has not been enacted 
     before September 30, 2001), also means''; and
       (C) by striking ``Palau, and the Commonwealth of the 
     Northern Mariana Islands.'' and inserting ``and the Republic 
     of Palau.''.

     SEC. 104. FINANCIAL ASSISTANCE FOR HEAD START PROGRAMS.

       Section 638(1) of the Head Start Act (42 U.S.C. 9833(1)) is 
     amended--
       (1) by striking ``aid the'' and inserting ``enable the''; 
     and
       (2) by striking the semicolon and inserting ``and attain 
     school readiness;''.

     SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

       Section 639 of the Head Start Act (42 U.S.C. 9834) is 
     amended--
       (1) in subsection (a), by striking ``1995 through 1998'' 
     and inserting ``1999 through 2003''; and
       (2) in subsection (b), by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) for each of fiscal years 1999 through 2003 to carry 
     out activities authorized under section 642A, not more than 
     $35,000,000 but not less than the amount that was made 
     available for such activities for fiscal year 1998;
       ``(2) not more than $5,000,000 for each of fiscal years 
     1999 through 2003 to carry out impact studies under section 
     649(g); and
       ``(3) not more than $12,000,000 for fiscal year 1999, and 
     such sums as may be necessary for each of fiscal years 2000 
     through 2003, to carry out other research, demonstration, and 
     evaluation activities, including longitudinal studies, under 
     section 649.''.

     SEC. 106. ALLOTMENT OF FUNDS.

       (a) Allotments.--Section 640(a) of the Head Start Act (42 
     U.S.C. 9835(a)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A)--
       (i) by striking ``and migrant'' the first place it appears 
     and all that follows through ``handicapped children'', and 
     inserting ``Head Start programs, services for children with 
     disabilities, and migrant and seasonal Head Start programs'';
       (ii) by striking ``and migrant'' each other place it 
     appears and inserting ``Head Start programs and by migrant 
     and seasonal''; and
       (iii) by striking ``1994'' and inserting ``1998'';
       (B) in subparagraph (B), by striking ``(B) payments'' and 
     all that follows through ``Virgin Islands according'' and 
     inserting the following:
       ``(B) payments, subject to paragraph (7)--
       ``(i) to Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, and the Virgin Islands of the 
     United States;
       ``(ii) for fiscal years ending before October 1, 2001, to 
     the Federated States of Micronesia, the Republic of the 
     Marshall Islands, and the Republic of Palau; and
       ``(iii) if legislation approving renegotiated Compacts of 
     Free Association for the jurisdictions described in clause 
     (ii) has not been enacted before September 30, 2001, for 
     fiscal year 2002 to those jurisdictions;

     according'';
       (C) in subparagraph (C), by striking ``; and'' and 
     inserting ``, of which not less than $3,000,000 of the amount 
     appropriated for such fiscal year shall be made available to 
     carry out activities described in section 648(c)(4);'';
       (D) in subparagraph (D), by striking ``related to the 
     development and implementation of quality improvement plans 
     under section 641A(d)(2).'' and inserting ``carried out under 
     paragraph (1), (2), or (3) of section 641A(d) related to 
     correcting deficiencies and conducting proceedings to 
     terminate the designation of Head Start agencies; and'';
       (E) by inserting after subparagraph (D) the following:
       ``(E) payments for research, demonstration, and evaluation 
     activities under section 649.''; and
       (F) by adding at the end the following: ``No Freely 
     Associated State may receive financial assistance under this 
     subchapter after fiscal year 2002.'';
       (2) in paragraph (3)--
       (A) in subparagraph (A)(i), by striking ``equal'' and all 
     that follows through ``amount;'' and inserting ``equal to the 
     sum of--
       ``(I) 60 percent of such excess amount for fiscal year 
     1999, 50 percent of such excess amount for fiscal year 2000, 
     47.5 percent of such excess amount for fiscal year 2001, 35 
     percent of such excess amount for fiscal year 2002, and 25 
     percent of such excess amount for fiscal year 2003;'';
       (B) in subparagraph (B)--
       (i) in clause (ii)--

       (I) by striking ``adequate qualified staff'' and inserting 
     ``adequate numbers of qualified staff''; and
       (II) by inserting ``and children with disabilities'' before 
     ``, when'';

       (ii) in clause (iv), by inserting before the period the 
     following: ``, and to encourage the staff to continually 
     improve their skills and expertise by informing the staff of 
     the availability of Federal and State incentive and loan 
     forgiveness programs for professional development'';
       (iii) in clause (v), by inserting ``and collaboration 
     efforts for such programs'' before the period;
       (iv) in clause (vi), by striking the period and inserting 
     ``, and are accessible to children with disabilities and 
     their parents.'';
       (v) by redesignating clause (vii) as clause (viii); and
       (vi) by inserting after clause (vi) the following:
       ``(vii) Ensuring that such programs have qualified staff 
     that can promote language skills and literacy growth of 
     children and that can provide children with a variety of 
     skills that have been identified, through scientifically 
     based reading research, as predictive of later reading 
     achievement.'';
       (C) in subparagraph (C)--
       (i) in clause (i)--

       (I) in subclause (I)--

       (aa) by striking ``this subparagraph'' and inserting ``this 
     paragraph'';
       (bb) by striking ``of staff'' and inserting ``of classroom 
     teachers and other staff'';
       (cc) by striking ``such staff'' and inserting ``qualified 
     staff, including recruitment and retention pursuant to 
     achieving the requirements set forth in section 648A(a)''; 
     and
       (dd) by adding at the end the following: ``Preferences in 
     awarding salary increases, in excess of cost-of-living 
     allowances, with such funds shall be granted to classroom 
     teachers and staff who obtain additional training or 
     education related to their responsibilities as employees of a 
     Head Start program.'';

       (II) in subclause (II), by striking ``the subparagraph'' 
     and inserting ``this subparagraph''; and
       (III) by adding at the end the following:

       ``(III) From the remainder of the amount reserved under 
     this paragraph (after the Secretary carries out subclause 
     (I)), the Secretary shall carry out any or all of the 
     activities described in clauses (ii) through (vii), placing 
     the highest priority on the activities described in clause 
     (ii).'';
       (ii) by amending clause (ii) to read as follows:
       ``(ii) To train classroom teachers and other staff to meet 
     the education performance standards described in section 
     641A(a)(1)(B), through activities--
       ``(I) to promote children's language and literacy growth, 
     through techniques identified through scientifically based 
     reading research;
       ``(II) to promote the acquisition of the English language 
     for non-English background children and families;
       ``(III) to foster children's school readiness skills 
     through activities described in section 648A(a)(1); and
       ``(IV) to provide training necessary to improve the 
     qualifications of the staff of the Head Start agencies and to 
     support staff training, child counseling, and other services 
     necessary to address the problems of children participating 
     in Head Start programs, including children from dysfunctional 
     families, children who experience chronic violence in their 
     communities, and children who experience substance abuse in 
     their families.'';
       (iii) by striking clause (v); and
       (iv) by redesignating clauses (vi) and (vii) as clauses (v) 
     and (vi), respectively; and
       (D) in subparagraph (D)(i)(II), by striking ``and migrant'' 
     and inserting ``Head Start programs and migrant and 
     seasonal'';
       (3) in paragraph (4)--
       (A) in subparagraph (A), by striking ``1981'' and inserting 
     ``1998'';
       (B) by amending subparagraph (B) to read as follows:
       ``(B) any amount available after all allotments are made 
     under subparagraph (A) for such fiscal year shall be 
     distributed proportionately on the basis of the number of 
     children less than 5 years of age from families whose income 
     is below the poverty line.''; and
       (C) by adding at the end the following:

     ``For purposes of this paragraph, for each fiscal year the 
     Secretary shall use the most recent data available on the 
     number of children less than 5 years of age from families 
     whose income is below the poverty line, as published by the 
     Department of Commerce, unless the Secretary and the 
     Secretary of Commerce determine that use of the most recent 
     data available would be inappropriate or unreliable. If the 
     Secretary and the Secretary of Commerce determine that some 
     or all of the data referred to in this paragraph are 
     inappropriate or unreliable, the Secretaries shall issue a 
     report setting forth their reasons in detail.'';
       (4) in paragraph (5)--
       (A) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (D)'';
       (B) in subparagraph (B), by inserting before the period the 
     following: ``and to encourage Head Start agencies to 
     collaborate with entities involved in State and local 
     planning processes (including the State lead agency 
     administering the financial assistance received under the 
     Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858 et seq.) and the entities providing resource and 
     referral services in the State) in order to better meet the 
     needs of low-income children and families'';
       (C) in subparagraph (C)--
       (i) in clause (i)(I), by inserting ``the appropriate 
     regional office of the Administration for Children and 
     Families and'' before ``agencies'';
       (ii) in clause (iii), by striking ``and'' at the end;
       (iii) in clause (iv)--

       (I) by striking ``education, and national service 
     activities,'' and inserting ``education, and community 
     service activities,'';
       (II) by striking ``and activities'' and inserting 
     ``activities''; and
       (III) by striking the period and inserting ``(including 
     coordination of services with those State officials who are 
     responsible for administering part C and section 619 of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1431-
     1445, 1419)), and services for homeless children;''; and

       (iv) by adding at the end the following:

[[Page H9699]]

       ``(v) include representatives of the State Head Start 
     Association and local Head Start agencies in unified planning 
     regarding early care and education services at both the State 
     and local levels, including collaborative efforts to plan for 
     the provision of full-working-day, full calendar year early 
     care and education services for children; and
       ``(vi) encourage local Head Start agencies to appoint a 
     State level representative to represent Head Start agencies 
     within the State in conducting collaborative efforts 
     described in subparagraphs (B) and (D), and in clause (v).'';
       (D) by redesignating subparagraph (D) as subparagraph (F); 
     and
       (E) by inserting after subparagraph (C) the following:
       ``(D) Following the award of collaboration grants described 
     in subparagraph (B), the Secretary shall provide, from the 
     reserved sums, supplemental funding for collaboration 
     grants--
       ``(i) to States that (in consultation with their State Head 
     Start Associations) develop statewide, regional, or local 
     unified plans for early childhood education and child care 
     that include the participation of Head Start agencies; and
       ``(ii) to States that engage in other innovative 
     collaborative initiatives, including plans for collaborative 
     training and professional development initiatives for child 
     care, early childhood education and Head Start service 
     managers, providers, and staff.
       ``(E)(i) The Secretary shall--
       ``(I) review on an ongoing basis evidence of barriers to 
     effective collaboration between Head Start programs and other 
     Federal, State, and local child care and early childhood 
     education programs and resources;
       ``(II) develop initiatives, including providing additional 
     training and technical assistance and making regulatory 
     changes, in necessary cases, to eliminate barriers to the 
     collaboration; and
       ``(III) develop a mechanism to resolve administrative and 
     programmatic conflicts between programs described in 
     subclause (I) that would be a barrier to service providers, 
     parents, or children related to the provision of unified 
     services and the consolidation of funding for child care 
     services.
       ``(ii) In the case of a collaborative activity funded under 
     this subchapter and another provision of law providing for 
     Federal child care or early childhood education, the use of 
     equipment and nonconsumable supplies purchased with funds 
     made available under this subchapter or such provision shall 
     not be restricted to children enrolled or otherwise 
     participating in the program carried out under that 
     subchapter or provision, during a period in which the 
     activity is predominantly funded under this subchapter or 
     such provision.''; and
       (5) in paragraph (6)--
       (A) by inserting ``(A)'' before ``From'';
       (B) by striking ``3 percent'' and all that follows and 
     inserting the following: ``7.5 percent for fiscal year 1999, 
     8 percent for fiscal year 2000, 9 percent for fiscal year 
     2001, 10 percent for fiscal year 2002, and 10 percent for 
     fiscal year 2003, of the amount appropriated pursuant to 
     section 639(a), except as provided in subparagraph (B); and
       (C) by adding at the end the following:
       ``(B)(i) If the Secretary does not submit an interim report 
     on the preliminary findings of the Early Head Start impact 
     study currently being conducted by the Secretary (as of the 
     date of enactment of the Head Start Amendments of 1998) to 
     the appropriate committees by June 1, 2001, the amount of the 
     reserved portion for fiscal year 2002 that exceeds the 
     reserved portion for fiscal year 2001, if any, shall be used 
     for quality improvement activities described in section 
     640(a)(3) and shall not be used to serve an increased number 
     of eligible children under section 645A.
       ``(ii) If the Secretary does not submit a final report on 
     the Early Head Start impact study to the appropriate 
     committees by June 1, 2002, or if the Secretary finds in the 
     report that there are substantial deficiencies in the 
     programs carried out under section 645A, the amount of the 
     reserved portion for fiscal year 2003 that exceeds the 
     reserved portion for fiscal year 2002, if any, shall be used 
     for quality improvement activities described in section 
     640(a)(3) and shall not be used to serve an increased number 
     of eligible children under section 645A.
       ``(iii) In this subparagraph:
       ``(I) The term `appropriate committees' means the Committee 
     on Education and the Workforce and the Committee on 
     Appropriations of the House of Representatives and the 
     Committee on Labor and Human Resources and the Committee on 
     Appropriations of the Senate.
       ``(II) The term `reserved portion', used with respect to a 
     fiscal year, means the amount required to be used in 
     accordance with subparagraph (A) for that fiscal year.
       ``(C)(i) For any fiscal year for which the Secretary 
     determines that the amount appropriated under section 639(a) 
     is not sufficient to permit the Secretary to reserve the 
     portion described in subparagraph (A) without reducing the 
     number of children served by Head Start programs or adversely 
     affecting the quality of Head Start services, relative to the 
     number of children served and the quality of the services 
     during the preceding fiscal year, the Secretary may reduce 
     the percentage of funds required to be reserved for the 
     portion described in subparagraph (A) for the fiscal year for 
     which the determination is made, but not below the percentage 
     required to be so reserved for the preceding fiscal year.
       ``(ii) For any fiscal year for which the amount 
     appropriated under section 639(a) is reduced to a level that 
     requires a lower amount to be made available under this 
     subchapter to Head Start agencies and entities described in 
     section 645A, relative to the amount made available to the 
     agencies and entities for the preceding fiscal year, adjusted 
     as described in paragraph (3)(A)(ii), the Secretary shall 
     proportionately reduce--
       ``(I) the amounts made available to the entities for 
     programs carried out under section 645A; and
       ``(II) the amounts made available to Head Start agencies 
     for Head Start programs.''.
       (b) Children With Disabilities.--Section 640(d) of the Head 
     Start Act (42 U.S.C. 9835(d)) is amended--
       (1) by striking ``1982'' and inserting ``1999'';
       (2) by striking ``(as defined in section 602(a) of the 
     Individuals with Disabilities Education Act)''; and
       (3) by adding at the end the following: ``Such policies and 
     procedures shall require Head Start agencies to coordinate 
     programmatic efforts with efforts to implement part C and 
     section 619 of the Individuals with Disabilities Education 
     Act (20 U.S.C 1431-1445, 1419).''.
       (c) Increased Appropriations.--Section 640(g) of the Head 
     Start Act (42 U.S.C. 9835(g)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A), by striking the semicolon and 
     inserting ``, and the performance history of the applicant in 
     providing services under other Federal programs (other than 
     the program carried out under this subchapter);'';
       (B) in subparagraph (C), by striking the semicolon and 
     inserting ``, and organizations and public entities serving 
     children with disabilities;'';
       (C) in subparagraph (D), by striking the semicolon and 
     inserting ``and the extent to which, and manner in which, the 
     applicant demonstrates the ability to collaborate and 
     participate with other local community providers of child 
     care or preschool services to provide full-working-day full 
     calendar year services;'';
       (D) in subparagraph (E), by striking ``program; and'' and 
     inserting ``program or any other early childhood program;'';
       (E) in subparagraph (F), by striking the period and 
     inserting a semicolon; and
       (F) by adding at the end the following:
       ``(G) the extent to which the applicant proposes to foster 
     partnerships with other service providers in a manner that 
     will enhance the resource capacity of the applicant; and
       ``(H) the extent to which the applicant, in providing 
     services, plans to coordinate with the local educational 
     agency serving the community involved and with schools in 
     which children participating in a Head Start program operated 
     by such agency will enroll following such program, regarding 
     such services and the education services provided by such 
     local educational agency.''; and
       (2) by adding at the end the following:
       ``(4) Notwithstanding subsection (a)(2), after taking into 
     account paragraph (1), the Secretary may allocate a portion 
     of the remaining additional funds under subsection (a)(2)(A) 
     for the purpose of increasing funds available for activities 
     described in such subsection.''.
       (d) Migrant and Seasonal Head Start Programs.--Section 
     640(l) (42 U.S.C. 9835(l)) is amended--
       (1) by striking``(l)'' and inserting ``(l)(1)'';
       (2) by striking ``migrant Head Start programs'' each place 
     it appears and inserting ``migrant and seasonal Head Start 
     programs'';
       (3) by striking ``migrant families'' and inserting 
     ``migrant and seasonal farmworker families''; and
       (4) by adding at the end the following:
       ``(2) For purposes of subsection (a)(2)(A), in determining 
     the need and demand for migrant and seasonal Head Start 
     programs (and services provided through such programs), the 
     Secretary shall  consult with appropriate entities, including 
     providers of services for migrant and seasonal Head Start 
     programs. The Secretary shall, after taking into 
     consideration the need and demand for migrant and seasonal 
     Head Start programs (and such services), ensure that there 
     is an adequate level of such services for eligible 
     children of migrant farmworkers before approving an 
     increase in the allocation of funds provided under such 
     subsection for unserved eligible children of seasonal 
     farmworkers. In serving the eligible children of seasonal 
     farmworkers, the Secretary shall ensure that services 
     provided by migrant and seasonal Head Start programs do 
     not duplicate or overlap with other Head Start services 
     available to eligible children of such farmworkers.
       ``(3) In carrying out this subchapter, the Secretary shall 
     continue the administrative arrangement responsible for 
     meeting the needs of children of migrant and seasonal 
     farmworkers and Indian children and shall ensure that 
     appropriate funding is provided to meet such needs.''.
       (e) Conforming Amendment.--Section 644(f)(2) of the Head 
     Start Act (42 U.S.C. 9839(f)(2)) is amended by striking 
     ``Except'' and all that follows through ``financial'' and 
     inserting ``Financial''.

     SEC. 107. DESIGNATION OF HEAD START AGENCIES.

       Section 641 of the Head Start Act (42 U.S.C. 9836) is 
     amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``or for-profit'' after ``nonprofit''; and
       (B) by inserting ``(in consultation with the chief 
     executive officer of the State involved, if such State 
     expends non-Federal funds to carry out Head Start programs)'' 
     after ``Secretary'' the last place it appears;
       (2) in subsection (b), by striking ``area designated by the 
     Bureau of Indian Affairs as near-reservation'' and inserting 
     ``off-reservation area designated by an appropriate tribal 
     government in consultation with the Secretary'';
       (3) in subsection (c)--
       (A) in paragraph (1)--
       (i) by inserting ``, in consultation with the chief 
     executive officer of the State involved if such State expends 
     non-Federal funds to carry out Head Start programs,'' after 
     ``shall'';

[[Page H9700]]

       (ii) by inserting ``or for-profit'' after ``nonprofit''; 
     and
       (iii) by striking ``makes a finding'' and all that follows 
     through the period at the end, and inserting the following: 
     ``determines that the agency involved fails to meet program 
     and financial management requirements, performance standards 
     described in section 641A(a)(1), results-based performance 
     measures developed by the Secretary under section 641A(b), or 
     other requirements established by the Secretary.'';
       (B) in paragraph (2), by inserting ``, in consultation with 
     the chief executive officer of the State if such State 
     expends non-Federal funds to carry out Head Start programs,'' 
     after ``shall''; and
       (C) by aligning the margins of paragraphs (2) and (3) with 
     the margins of paragraph (1);
       (4) in subsection (d)--
       (A) in the matter preceding paragraph (1), by inserting 
     after the first sentence the following: ``In selecting from 
     among qualified applicants for designation as a Head Start 
     agency, the Secretary shall give priority to any qualified 
     agency that functioned as a Head Start delegate agency in the 
     community and carried out a Head Start program that the 
     Secretary determines met or exceeded such performance 
     standards and such results-based performance measures.'';
       (B) in paragraph (3), by inserting ``and programs under 
     part C and section 619 of the Individuals with Disabilities 
     Education Act (20 U.S.C 1431-1445, 1419)'' after ``(20 U.S.C. 
     2741 et seq.)'';
       (C) in paragraph (4)--
       (i) in subparagraph (A), by inserting ``(at home and in the 
     center involved where practicable)'' after ``activities'';
       (ii) in subparagraph (D)--

       (I) in clause (iii), by adding ``or'' at the end;
       (II) by striking clause (iv); and
       (III) by redesignating clause (v) as clause (iv);

       (iii) in subparagraph (E), by striking ``and (D)'' and 
     inserting ``, (D), and (E)'';
       (iv) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (E) and (F), respectively; and
       (v) by inserting after subparagraph (C) the following:
       ``(D) to offer to parents of participating children 
     substance abuse counseling (either directly or through 
     referral to local entities), including information on drug-
     exposed infants and fetal alcohol syndrome;'';
       (D) by amending paragraph (7) to read as follows:
       ``(7) the plan of such applicant to meet the needs of non-
     English background children and their families, including 
     needs related to the acquisition of the English language;'';
       (E) in paragraph (8)--
       (i) by striking the period at the end and inserting ``; 
     and''; and
       (ii) by redesignating such paragraph as paragraph (9);
       (F) by inserting after paragraph (7) the following:
       ``(8) the plan of such applicant to meet the needs of 
     children with disabilities;''; and
       (G) by adding at the end the following:
       ``(10) the plan of such applicant to collaborate with other 
     entities carrying out early childhood education and child 
     care programs in the community.'';
       (5) by striking subsection (e) and inserting the following:
       ``(e) If no agency in the community receives priority 
     designation under subsection (c), and there is no qualified 
     applicant in the community, the Secretary shall designate a 
     qualified agency to carry out the Head Start program in the 
     community on an interim basis until a qualified applicant 
     from the community is so designated.''; and
       (6) by adding at the end the following:
       ``(g) If the Secretary determines that a nonprofit agency 
     and a for-profit agency have submitted applications for 
     designation of equivalent quality under subsection (d), the 
     Secretary may give priority to the nonprofit agency. In 
     selecting from among qualified applicants for designation as 
     a Head Start agency under subsection (d), the Secretary shall 
     give priority to applicants that have demonstrated capacity 
     in providing comprehensive early childhood services to 
     children and their families.''.

     SEC. 108. QUALITY STANDARDS.

       (a) Quality Standards.--Section 641A(a) of the Head Start 
     Act (42 U.S.C. 9836a(a)) is amended--
       (1) in paragraph (1)--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``, including minimum levels of overall accomplishment,'' 
     after ``regulation standards'';
       (B) in subparagraph (A), by striking ``education,'';
       (C) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (D) by inserting after subparagraph (A) the following:
       ``(B)(i) education performance standards to ensure the 
     school readiness of children participating in a Head 
     Start program, on completion of the Head Start program and 
     prior to entering school; and
       ``(ii) additional education performance standards to ensure 
     that the children participating in the program, at a 
     minimum--
       ``(I) develop phonemic, print, and numeracy awareness;
       ``(II) understand and use language to communicate for 
     various purposes;
       ``(III) understand and use increasingly complex and varied 
     vocabulary;
       ``(IV) develop and demonstrate an appreciation of books; 
     and
       ``(V) in the case of non-English background children, 
     progress toward acquisition of the English language.'';
       (2) by striking paragraph (2);
       (3) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively;
       (4) in paragraph (2) (as redesignated in paragraph (3))--
       (A) in subparagraph (B)(iii), by striking ``child'' and 
     inserting ``early childhood education and''; and
       (B) in subparagraph (C)--
       (i) in clause (i)--

       (I) by striking ``not later than 1 year after the date of 
     enactment of this section,''; and
       (II) by striking ``section 651(b)'' and all that follows 
     and inserting ``this subsection; and''; and

       (ii) in subclause (ii), by striking ``November 2, 1978'' 
     and inserting ``the date of enactment of the Coats Human 
     Services Reauthorization Act of 1998''; and
       (5) in paragraph (3) (as redesignated in paragraph (3)), by 
     striking ``to an agency (referred to in this subchapter as 
     the `delegate agency')'' and inserting ``to a delegate 
     agency''.
       (b) Performance Measures.--Section 641A(b) of the Head 
     Start Act (42 U.S.C. 9836a(b)) is amended--
       (1) in the heading, by inserting ``Results-Based'' before 
     ``Performance'';
       (2) in paragraph (1)--
       (A) by striking ``Not later than 1 year after the date of 
     enactment of this section, the'' and inserting ``The'';
       (B) by striking ``child'' and inserting ``early childhood 
     education and'';
       (C) by inserting before ``(referred'' the following: ``, 
     and the impact of the services provided through the programs 
     to children and their families''; and
       (D) by striking ``performance measures'' and inserting 
     ``results-based performance measures''; and
       (3) in paragraph (2)--
       (A) in the paragraph heading, by striking ``Design'' and 
     inserting ``Characteristics'';
       (B) in the matter preceding subparagraph (A), by striking 
     ``shall be designed--'' and inserting ``shall--'';
       (C) in subparagraph (A), by striking ``to assess'' and 
     inserting ``be used to assess the impact of'';
       (D) in subparagraph (B)--
       (i) by striking ``to'';
       (ii) by striking ``and peer review'' and inserting ``, peer 
     review, and program evaluation''; and
       (iii) by inserting ``, not later than July 1, 1999'' before 
     the semicolon;
       (E) in subparagraph (C), by inserting ``be developed'' 
     before ``for other''; and
       (F) by adding at the end the following: ``The performance 
     measures shall include the performance standards described in 
     subsection (a)(1)(B)(ii).'';
       (4) in paragraph (3)(A), by striking ``and by region'' and 
     inserting ``, regionally, and locally''; and
       (5) by adding at the end the following:
       ``(4) Educational performance measures.--Such results-based 
     performance measures shall include educational performance 
     measures that ensure that children participating in Head 
     Start programs--
       ``(A) know that letters of the alphabet are a special 
     category of visual graphics that can be individually named;
       ``(B) recognize a word as a unit of print;
       ``(C) identify at least 10 letters of the alphabet; and
       ``(D) associate sounds with written words.
       ``(5) Additional local results-based performance 
     measures.--In addition to other applicable results-based 
     performance measures, Head Start agencies may establish local 
     results-based educational performance measures.''.
       (c) Monitoring.--Section 641A(c) of the Head Start Act (42 
     U.S.C. 9836a(c)) is amended--
       (1) in paragraph (1), by inserting ``and results-based 
     performance measures developed by the Secretary under 
     subsection (b)'' after ``standards established under this 
     subchapter''; and
       (2) in paragraph (2)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C)--
       (i) by inserting ``(including children with disabilities)'' 
     after ``eligible children''; and
       (ii) by striking the period at the end and inserting a 
     semicolon; and
       (C) by adding at the end the following:
       ``(D) include as part of the reviews of the programs, a 
     review and assessment of program effectiveness, as measured 
     in accordance with the results-based performance measures 
     developed by the Secretary pursuant to subsection (b) and 
     with the performance standards established pursuant to 
     subparagraphs (A) and (B) of subsection (a)(1); and
       ``(E) seek information from the communities and the States 
     involved about the performance of the programs and the 
     efforts of the Head Start agencies to collaborate with other 
     entities carrying out early childhood education and child 
     care programs in the community.''.
       (d) Termination.--Section 641A(d) of the Head Start Act (42 
     U.S.C. 9836a(d)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``or results-based performance measures 
     developed by the Secretary under subsection (b)'' after 
     ``subsection (a)''; and
       (B) by amending subparagraph (B) to read as follows:
       ``(B) with respect to each identified deficiency, require 
     the agency--
       ``(i) to correct the deficiency immediately, if the 
     Secretary finds that the deficiency threatens the health or 
     safety of staff or program participants or poses a threat to 
     the integrity of Federal funds;
       ``(ii) to correct the deficiency not later than 90 days 
     after the identification of the deficiency if

[[Page H9701]]

     the Secretary finds, in the discretion of the Secretary, that 
     such a 90-day period is reasonable, in light of the nature 
     and magnitude of the deficiency; or
       ``(iii) in the discretion of the Secretary (taking into 
     consideration the seriousness of the deficiency and the time 
     reasonably required to correct the deficiency), to comply 
     with the requirements of paragraph (2) concerning a quality 
     improvement plan; and''; and
       (2) in paragraph (2)(A), in the matter preceding clause 
     (i), by striking ``able to correct a deficiency immediately'' 
     and inserting ``required to correct a deficiency immediately 
     or during a 90-day period under clause (i) or (ii) of 
     paragraph (1)(B)''.
       (e) Report.--Section 641A(e) of the Head Start Act (42 
     U.S.C. 9836a(e)) is amended by adding at the end the 
     following: ``Such report shall be widely disseminated and 
     available for public review in both written and electronic 
     formats.''.

     SEC. 109. POWERS AND FUNCTIONS OF HEAD START AGENCIES.

       Section 642 of the Head Start Act (42 U.S.C. 9837) is 
     amended--
       (1) in subsection (a), by inserting ``or for-profit'' after 
     ``nonprofit'';
       (2) in subsection (b)--
       (A) in paragraph (6)--
       (i) by striking subparagraph (D); and
       (ii) by redesignating subparagraphs (E) and (F) and 
     subparagraphs (D) and (E), respectively;
       (B) in paragraph (8), by striking ``and'' at the end;
       (C) in paragraph (9), by striking the period at the end and 
     inserting ``; and'';
       (D) by redesignating paragraphs (6) through (9) as 
     paragraphs (7) through (10), respectively;
       (E) by inserting after paragraph (5) the following:
       ``(6) offer to parents of participating children substance 
     abuse counseling (either directly or through referral to 
     local entities), including information on drug-exposed 
     infants and fetal alcohol syndrome;'';
       (F) in paragraph (8) (as redesignated in subparagraph (D)), 
     by striking ``paragraphs (4) through (6)'' and inserting 
     ``paragraphs (4) through (7)''; and
       (G) by adding at the end the following:
       ``(11)(A) inform custodial parents in single-parent 
     families that participate in programs, activities, or 
     services carried out or provided under this subchapter about 
     the availability of child support services for purposes of 
     establishing paternity and acquiring child support; and
       ``(B) refer eligible parents to the child support offices 
     of State and local governments.'';
       (3) in subsection (c)--
       (A) by inserting ``and collaborate'' after ``coordinate'';
       (B) by striking ``section 402(g) of the Social Security 
     Act, and other'' and inserting ``the State program carried 
     out under the Child Care and Development Block Grant Act of 
     1990 (42 U.S.C. 9858 et seq.), and other early childhood 
     education and development''; and
       (C) by inserting ``and programs under part C and section 
     619 of the Individuals with Disabilities Education Act (20 
     U.S.C 1431-1445, 1419)'' after ``(20 U.S.C. 2741 et seq.)'';
       (4) in subsection (d)--
       (A) in paragraph (1)--
       (i) by striking ``carry out'' and all that follows through 
     ``maintain'' and inserting ``take steps to ensure, to the 
     maximum extent possible, that children maintain'';
       (ii) by inserting ``and educational'' after 
     ``developmental''; and
       (iii) by striking ``to build'' and inserting ``build'';
       (B) by striking paragraph (2);
       (C) by redesignating paragraphs (3) through (5) as 
     paragraphs (2) through (4), respectively; and
       (D) in subparagraph (A) of paragraph (4) (as redesignated 
     in subparagraph (C)), by striking ``the Head Start Transition 
     Project Act (42 U.S.C. 9855 et seq.)'' and inserting 
     ``section 642A''; and
       (5) by adding at the end the following:
       ``(e) Head Start agencies shall adopt, in consultation with 
     experts in child development and with classroom teachers, an 
     assessment to be used when hiring or evaluating any classroom 
     teacher in a center-based Head Start program. Such assessment 
     shall measure whether such teacher has mastered the functions 
     described in section 648A(a)(1).''.

     SEC. 110. HEAD START TRANSITION.

       The Head Start Act (42 U.S.C. 9831 et seq.) is amended by 
     inserting after section 642 the following:

     ``SEC. 642A. HEAD START TRANSITION.

       ``Each Head Start agency shall take steps to coordinate 
     with the local educational agency serving the community 
     involved and with schools in which children participating in 
     a Head Start program operated by such agency will enroll 
     following such program, including--
       ``(1) developing and implementing a systematic procedure 
     for transferring, with parental consent, Head Start program 
     records for each participating child to the school in which 
     such child will enroll;
       ``(2) establishing channels of communication between Head 
     Start staff and their counterparts in the schools (including 
     teachers, social workers, and health staff) to facilitate 
     coordination of programs;
       ``(3) conducting meetings involving parents, kindergarten 
     or elementary school teachers, and Head Start program 
     teachers to discuss the educational, developmental, and other 
     needs of individual children;
       ``(4) organizing and participating in joint transition-
     related training of school staff and Head Start staff;
       ``(5) developing and implementing a family outreach and 
     support program in cooperation with entities carrying out 
     parental involvement efforts under title I of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.);
       ``(6) assisting families, administrators, and teachers in 
     enhancing educational and developmental continuity between 
     Head Start services and elementary school classes; and
       ``(7) linking the services provided in such Head Start 
     program with the education services provided by such local 
     educational agency.''.

     SEC. 111. SUBMISSION OF PLANS TO GOVERNORS.

       The first sentence of section 643 of the Head Start Act (42 
     U.S.C. 9838) is amended--
       (1) by striking ``30 days'' and inserting ``45 days'';
       (2) by striking ``so disapproved'' and inserting 
     ``disapproved (for reasons other than failure of the program 
     to comply with State health, safety, and child care laws, 
     including regulations applicable to comparable child care 
     programs in the State)''; and
       (3) by inserting before the period ``, as evidenced by a 
     written statement of the Secretary's findings that is 
     transmitted to such officer''.

     SEC. 112. PARTICIPATION IN HEAD START PROGRAMS.

       (a) Regulations.--Section 645(a)(1) of the Head Start Act 
     (42 U.S.C. 9840(a)(1)) is amended--
       (1) by striking ``provide (A) that'' and inserting the 
     following: ``provide--
       ``(A) that'';
       (2) by striking ``assistance; and (B) pursuant'' and 
     inserting the following: ``assistance; and
       ``(B) pursuant'';
       (3) in subparagraph (B), by striking ``that programs'' and 
     inserting ``that--
       ``(i) programs''; and
       (4) by striking ``clause (A).'' and inserting the 
     following: ``subparagraph (A); and
       ``(ii) a child who has been determined to meet the low-
     income criteria and who is participating in a Head Start 
     program in a program year shall be considered to continue to 
     meet the low-income criteria through the end of the 
     succeeding program year.
     In determining, for purposes of this paragraph, whether a 
     child who has applied for enrollment in a Head Start program 
     meets the low-income criteria, an entity may consider 
     evidence of family income during the 12 months preceding the 
     month in which the application is submitted, or during the 
     calendar year preceding the calendar year in which the 
     application is submitted, whichever more accurately reflects 
     the needs of the family at the time of application.''.
       (b) Sliding Fee Scale.--Section 645(b) of the Head Start 
     Act (42 U.S.C. 9840(b)) is amended by adding at the end the 
     following: ``A Head Start agency that provides a Head Start 
     program with full-working-day services in collaboration with 
     other agencies or entities may collect a family copayment to 
     support extended day services if a copayment is required in 
     conjunction with the collaborative. The copayment charged to 
     families receiving services through the Head Start program 
     shall not exceed the copayment charged to families with 
     similar incomes and circumstances who are receiving the 
     services through participation in a program carried out by 
     another agency or entity.''.
       (c) Continuous Recruitment and Acceptance of 
     Applications.--Section 645(c) of the Head Start Act (42 
     U.S.C. 9840(c)) is amended by adding at the end the 
     following: ``Each Head Start program operated in a community 
     shall be permitted to recruit and accept applications for 
     enrollment of children throughout the year.''.
       (d) Off-Reservation Area.--Section 645(d)(1)(B) of the Head 
     Start Act (42 U.S.C. 9840(d)(1)(B)) is amended by striking 
     ``a community with'' and all that follows through ``Indian 
     Affairs'' and inserting ``a community that is an off-
     reservation area, designated by an appropriate tribal 
     government, in consultation with the Secretary''.

     SEC. 113. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS 
                   AND TODDLERS.

       Section 645A of the Head Start Act (42 U.S.C. 9840a) is 
     amended--
       (1) in the section heading, by inserting ``EARLY HEAD 
     START'' before ``PROGRAMS FOR'';
       (2) in subsection (a)--
       (A) in paragraph (1), by striking ``; and'' and inserting a 
     period;
       (B) by striking paragraph (2); and
       (C) by striking ``for--'' and all that follows through 
     ``(1)'' and inserting ``for'';
       (3) in subsection (b)--
       (A) in paragraph (5), by inserting ``(including programs 
     for infants and toddlers with disabilities)'' after 
     ``community'';
       (B) in paragraph (7), by striking ``and'' at the end;
       (C) by redesignating paragraph (8) as paragraph (9); and
       (D) by inserting after paragraph (7) the following:
       ``(8) ensure formal linkages with the agencies and entities 
     described in section 644(b) of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1444(b)) and providers 
     of early intervention services for infants and toddlers with 
     disabilities under the Individuals with Disabilities 
     Education Act (20 U.S.C. 1400 et seq.); and'';
       (4) in subsection (c)--
       (A) in the matter preceding paragraph (1), by striking 
     ``subsection (a)(1)'' and inserting ``subsection (a)''; and
       (B) in paragraph (2), by striking ``3 (or under'' and all 
     that follows and inserting ``3;'';
       (5) in subsection (d)--
       (A) in paragraph (1), by adding ``and'' at the end;
       (B) by striking paragraph (2);
       (C) by redesignating paragraph (3) as paragraph (2); and
       (D) in paragraph (2), as redesignated in subparagraph (C), 
     by inserting ``or for-profit'' after ``nonprofit'';

[[Page H9702]]

       (6) by striking subsection (e);
       (7) by redesignating subsections (f) and (g) as subsections 
     (e) and (f), respectively;
       (8) in subsection (e) (as redesignated in paragraph (7))--
       (A) in the subsection heading, by striking ``Other''; and
       (B) by striking ``From the balance remaining of the portion 
     specified in section 640(a)(6), after making grants to the 
     eligible entities specified in subsection (e),'' and 
     inserting ``From the portion specified in section 
     640(a)(6),'';
       (9) by striking subsection (h); and
       (10) by adding at the end the following:
       ``(g) Monitoring, Training, Technical Assistance, and 
     Evaluation.--
       ``(1) Requirement.--In order to ensure the successful 
     operation of programs assisted under this section, the 
     Secretary shall use funds from the portion specified in 
     section 640(a)(6) to monitor the operation of such programs, 
     evaluate their effectiveness, and provide training and 
     technical assistance tailored to the particular needs of such 
     programs.
       ``(2) Training and technical assistance account.--
       ``(A) In general.--Of the amount made available to carry 
     out this section for any fiscal year, not less than 5 percent 
     and not more than 10 percent shall be reserved to fund a 
     training and technical assistance account.
       ``(B) Activities.--Funds in the account may be used by the 
     Secretary for purposes including--
       ``(i) making grants to, and entering into contracts with, 
     organizations with specialized expertise relating to infants, 
     toddlers, and families and the capacity needed to provide 
     direction and support to a national training and technical 
     assistance system, in order to provide such direction and 
     support;
       ``(ii) providing ongoing training and technical assistance 
     for regional and program staff charged with monitoring and 
     overseeing the administration of the program carried out 
     under this section;
       ``(iii) providing ongoing training and technical assistance 
     for existing recipients (as of the date of such training or 
     assistance) of grants under subsection (a) and support and 
     program planning and implementation assistance for new 
     recipients of such grants; and
       ``(iv) providing professional development and personnel 
     enhancement activities, including the provision of funds to 
     recipients of grants under subsection (a) for the recruitment 
     and retention of qualified staff with an appropriate level of 
     education and experience.''.

     SEC. 114. TECHNICAL ASSISTANCE AND TRAINING.

       (a) In General.--Section 648 of the Head Start Act (42 
     U.S.C. 9843) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(3) ensure the provision of technical assistance to 
     assist Head Start agencies, entities carrying out other child 
     care and early childhood programs, communities, and States in 
     collaborative efforts to provide quality full-working-day, 
     full calendar year services, including technical assistance 
     related to identifying and assisting in resolving barriers 
     to collaboration.''; and
       (2) in subsection (c)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) give priority consideration to--
       ``(A) activities to correct program and management 
     deficiencies identified through reviews carried out pursuant 
     to section 641A(c) (including the provision of assistance to 
     local programs in the development of quality improvement 
     plans under section 641A(d)(2)); and
       ``(B) assisting Head Start agencies in--
       ``(i) ensuring the school readiness of children; and
       ``(ii) meeting the educational performance measures 
     described in section 641A(b)(4);'';
       (B) in paragraph (2), by inserting ``supplement amounts 
     provided under section 640(a)(3)(C)(ii) in order to'' after 
     ``(2)'';
       (C) in paragraph (4)--
       (i) by inserting ``and implementing'' after ``developing''; 
     and
       (ii) by striking ``a longer day'' and inserting the 
     following: ``the day, and assist the agencies and programs in 
     expediting the sharing of information about innovative models 
     for providing full-working-day, full calendar year services 
     for children'';
       (D) in paragraph (7), by striking ``; and'' and inserting a 
     semicolon;
       (E) in paragraph (8), by striking the period and inserting 
     ``; and'';
       (F) by redesignating paragraphs (3) through (8) as 
     paragraphs (5) through (10), respectively;
       (G) by inserting after paragraph (2) the following:
       ``(3) assist Head Start agencies in the development of 
     collaborative initiatives with States and other entities 
     within the States, to foster effective early childhood 
     professional development systems;
       ``(4) provide technical assistance and training, either 
     directly or through a grant, contract, or cooperative 
     agreement with an entity that has experience in the 
     development and operation of successful family literacy 
     services programs, for the purpose of--
       ``(A) assisting Head Start agencies providing family 
     literacy services, in order to improve the quality of such 
     family literacy services; and
       ``(B) enabling those Head Start agencies that demonstrate 
     effective provision of family literacy services, based on 
     improved outcomes for children and their parents, to provide 
     technical assistance and training to other Head Start 
     agencies and to service providers that work in collaboration 
     with such agencies to provide family literacy services;''; 
     and
       (H) by adding at the end the following:
       ``(11) provide support for Head Start agencies (including 
     policy councils and policy committees, as defined in 
     regulation) that meet the standards described in section 
     641A(a) but that have, as documented by the Secretary through 
     reviews conducted pursuant to section 641A(c), significant 
     programmatic, quality, and fiscal issues to address.''.
       (b) Services.--Section 648(e) of the Head Start Act (42 
     U.S.C. 9843(e)) is amended by inserting ``(including services 
     to promote the acquisition of the English language)'' after 
     ``non-English language background children''.

     SEC. 115. PROFESSIONAL REQUIREMENTS.

       Section 648A of the Head Start Act (42 U.S.C. 9843a) is 
     amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Classroom Teachers.--
       ``(1) Professional requirements.--The Secretary shall 
     ensure that each Head Start classroom in a center-based 
     program is assigned one teacher who has demonstrated 
     competency to perform functions that include--
       ``(A) planning and implementing learning experiences that 
     advance the intellectual and physical development of 
     children, including improving the readiness of children for 
     school by developing their literacy and phonemic, print, and 
     numeracy awareness, their understanding and use of language, 
     their understanding and use of increasingly complex and 
     varied vocabulary, their appreciation of books, and their 
     problem solving abilities;
       ``(B) establishing and maintaining a safe, healthy learning 
     environment;
       ``(C) supporting the social and emotional development of 
     children; and
       ``(D) encouraging the involvement of the families of the 
     children in a Head Start program and supporting the 
     development of relationships between children and their 
     families.
       ``(2) Degree requirements.--
       ``(A) In general.--The Secretary shall ensure that not 
     later than September 30, 2003, at least 50 percent of all 
     Head Start teachers nationwide in center-based programs 
     have--
       ``(i) an associate, baccalaureate, or advanced degree in 
     early childhood education; or
       ``(ii) an associate, baccalaureate, or advanced degree in a 
     field related to early childhood education, with experience 
     in teaching preschool children.
       ``(B) Progress.--The Secretary shall require Head Start 
     agencies to demonstrate continuing progress each year to 
     reach the result described in subparagraph (A).
       ``(3) Alternative Credentialing Requirements.--The 
     Secretary shall ensure that, for center-based programs, each 
     Head Start classroom that does not have a teacher that meets 
     the requirements of clause (i) or (ii) of paragraph (2)(A) is 
     assigned one teacher who has--
       ``(A) a child development associate credential that is 
     appropriate to the age of the children being served in 
     center-based programs;
       ``(B) a State-awarded certificate for preschool teachers 
     that meets or exceeds the requirements for a child 
     development associate credential; or
       ``(C) a degree in a field related to early childhood 
     education with experience in teaching preschool children and 
     a State-awarded certificate to teach in a preschool program.
       ``(4) Waiver.--
       ``(A) In general.--On request, the Secretary shall grant a 
     180-day waiver of the requirements of paragraph (3), for a 
     Head Start agency that can demonstrate that the agency has 
     unsuccessfully attempted to recruit an individual who has a 
     credential, certificate, or degree described in paragraph 
     (3), with respect to an individual who--
       ``(i) is enrolled in a program that grants any such 
     credential, certificate, or degree; and
       ``(ii) will receive such credential, certificate, or degree 
     under the terms of such program not later than 180 days after 
     beginning employment as a teacher with such agency.
       ``(B) Limitation.--The Secretary may not grant more than 
     one such waiver with respect to such individual.''; and
       (2) in subsection (b)(2)(B)--
       (A) by striking ``staff,'' and inserting ``staff or''; and
       (B) by striking ``, or that'' and all that follows through 
     ``families''.

     SEC. 116. RESEARCH AND EVALUATION.

       Section 649 of the Head Start Act (42 U.S.C. 9844) is 
     amended--
       (1) in subsection (d)--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) in paragraph (7), by striking the period at the end and 
     inserting a semicolon;
       (C) by redesignating paragraphs (2) through (7) as 
     paragraphs (3) through (8), respectively;
       (D) by inserting after paragraph (1) the following:
       ``(2) establish evaluation methods that measure the 
     effectiveness and impact of family literacy services program 
     models, including models for the integration of family 
     literacy services with Head Start services;''; and
       (E) by adding at the end the following:
       ``(9) study the experiences of small, medium, and large 
     States with Head Start programs in order to permit 
     comparisons of children participating in the programs with 
     eligible children who did not participate in the programs, 
     which study--
       ``(A) may include the use of a data set that existed prior 
     to the initiation of the study; and
       ``(B) shall compare the educational achievement, social 
     adaptation, and health status of the participating children 
     and the eligible nonparticipating children; and
       ``(10) provide for--

[[Page H9703]]

       ``(A) using the Survey of Income and Program Participation 
     to conduct an analysis of the different income levels of Head 
     Start participants compared to comparable persons who did not 
     attend Head Start programs;
       ``(B) using the National Longitudinal Survey of Youth, 
     which began gathering data in 1988 on children who attended 
     Head Start programs, to examine the wide range of outcomes 
     measured within the Survey, including outcomes related to 
     cognitive, socio-emotional, behavioral, and academic 
     development;
       ``(C) using the Survey of Program Dynamics, the new 
     longitudinal survey required by section 414 of the Social 
     Security Act (42 U.S.C. 614), to begin annual reporting, 
     through the duration of the Survey, on Head Start program 
     attendees' academic readiness performance and improvements;
       ``(D) ensuring that the Survey of Program Dynamics is 
     linked with the National Longitudinal Survey of Youth at 
     least once by the use of a common performance test, to be 
     determined by the expert panel, for the greater national 
     usefulness of the National Longitudinal Survey of Youth 
     database; and
       ``(E) disseminating the results of the analysis, 
     examination, reporting, and linkage described in 
     subparagraphs (A) through (D) to persons conducting other 
     studies under this subchapter.

     The Secretary shall ensure that an appropriate entity carries 
     out a study described in paragraph (9), and prepares and 
     submits to the appropriate committees of Congress a report 
     containing the results of the study, not later than September 
     30, 2002.''; and
       (2) by adding at the end the following:
       ``(g) National Head Start Impact Research.--
       ``(1) Expert panel.--
       ``(A) In general.--The Secretary shall appoint an 
     independent panel consisting of experts in program evaluation 
     and research, education, and early childhood programs--
       ``(i) to review, and make recommendations on, the design 
     and plan for the research (whether conducted as a single 
     assessment or as a series of assessments) described in 
     paragraph (2), within 1 year after the date of enactment of 
     the Coats Human Services Reauthorization Act of 1998;
       ``(ii) to maintain and advise the Secretary regarding the 
     progress of the research; and
       ``(iii) to comment, if the panel so desires, on the interim 
     and final research reports submitted under paragraph (7).
       ``(B) Travel expenses.--The members of the panel shall not 
     receive compensation for the performance of services for the 
     panel, but shall be allowed travel expenses, including per 
     diem in lieu of subsistence, at rates authorized for 
     employees of agencies under subchapter I of chapter 57 of 
     title 5, United States Code, while away from their homes or 
     regular places of business in the performance of services for 
     the panel. Notwithstanding section 1342 of title 31, United 
     States Code, the Secretary may accept the voluntary and 
     uncompensated services of members of the panel.
       ``(2) General authority.--After reviewing the 
     recommendations of the expert panel, the Secretary shall make 
     a grant to, or enter into a contract or cooperative agreement 
     with, an organization to conduct independent research that 
     provides a national analysis of the impact of Head Start 
     programs. The Secretary shall ensure that the organization 
     shall have expertise in program evaluation, and research, 
     education, and early childhood programs.
       ``(3) Designs and techniques.--The Secretary shall ensure 
     that the research uses rigorous methodological designs and 
     techniques (based on the recommendations of the expert 
     panel), including longitudinal designs, control groups, 
     nationally recognized standardized measures, and random 
     selection and assignment, as appropriate. The Secretary may 
     provide that the research shall be conducted as a single 
     comprehensive assessment or as a group of coordinated 
     assessments designed to provide, when taken together, a 
     national analysis of the impact of Head Start programs.
       ``(4) Programs.--The Secretary shall ensure that the 
     research focuses primarily on Head Start programs that 
     operate in the 50 States, the Commonwealth of Puerto Rico, or 
     the District of Columbia and that do not specifically target 
     special populations.
       ``(5) Analysis.--The Secretary shall ensure that the 
     organization conducting the research--
       ``(A)(i) determines if, overall, the Head Start programs 
     have impacts consistent with their primary goal of increasing 
     the social competence of children, by increasing the everyday 
     effectiveness of the children in dealing with their present 
     environments and future responsibilities, and increasing 
     their school readiness;
       ``(ii) considers whether the Head Start programs--
       ``(I) enhance the growth and development of children in 
     cognitive, emotional, and physical health areas;
       ``(II) strengthen families as the primary nurturers of 
     their children; and
       ``(III) ensure that children attain school readiness; and
       ``(iii) examines--
       ``(I) the impact of the Head Start programs on increasing 
     access of children to such services as educational, health, 
     and nutritional services, and linking children and families 
     to needed community services; and
       ``(II) how receipt of services described in subclause (I) 
     enriches the lives of children and families participating in 
     Head Start programs;
       ``(B) examines the impact of Head Start programs on 
     participants on the date the participants leave Head Start 
     programs, at the end of kindergarten and at the end of first 
     grade (whether in public or private school), by examining a 
     variety of factors, including educational achievement, 
     referrals for special education or remedial course work, and 
     absenteeism;
       ``(C) makes use of random selection from the population of 
     all Head Start programs described in paragraph (4) in 
     selecting programs for inclusion in the research; and
       ``(D) includes comparisons of individuals who participate 
     in Head Start programs with control groups (including 
     comparison groups) composed of--
       ``(i) individuals who participate in other early childhood 
     programs (such as public or private preschool programs and 
     day care); and
       ``(ii) individuals who do not participate in any other 
     early childhood program.
       ``(6) Consideration of sources of variation.--In designing 
     the research, the Secretary shall, to the extent practicable, 
     consider addressing possible sources of variation in impact 
     of Head Start programs, including variations in impact 
     related to such factors as--
       ``(A) Head Start program operations;
       ``(B) Head Start program quality;
       ``(C) the length of time a child attends a Head Start 
     program;
       ``(D) the age of the child on entering the Head Start 
     program;
       ``(E) the type of organization (such as a local educational 
     agency or a community action agency) providing services for 
     the Head Start program;
       ``(F) the number of hours and days of program operation of 
     the Head Start program (such as whether the program is a 
     full-working-day, full calendar year program, a part-day 
     program, or a part-year program); and
       ``(G) other characteristics and features of the Head Start 
     program (such as geographic location, location in an urban or 
     a rural service area, or participant characteristics), as 
     appropriate.
       ``(7) Reports.--
       ``(A) Submission of interim reports.--The organization 
     shall prepare and submit to the Secretary two interim reports 
     on the research. The first interim report shall describe the 
     design of the research, and the rationale for the design, 
     including a description of how potential sources of variation 
     in impact of Head Start programs have been considered in 
     designing the research. The second interim report shall 
     describe the status of the research and preliminary findings 
     of the research, as appropriate.
       ``(B) Submission of final report.--The organization shall 
     prepare and submit to the Secretary a final report containing 
     the findings of the research.
       ``(C) Transmittal of reports to congress.--
       ``(i) In general.--The Secretary shall transmit, to the 
     committees described in clause (ii), the first interim report 
     by September 30, 1999, the second interim report by September 
     30, 2001, and the final report by September 30, 2003.
       ``(ii) Committees.--The committees referred to in clause 
     (i) are the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Labor and Human 
     Resources of the Senate.
       ``(8) Definition.--In this subsection, the term `impact', 
     used with respect to a Head Start program, means a difference 
     in an outcome for a participant in the program that would not 
     have occurred without the participation in the program.
       ``(h) Quality Improvement Study.--
       ``(1) Study.--The Secretary shall conduct a study regarding 
     the use and effects of use of the quality improvement funds 
     made available under section 640(a)(3) since fiscal year 
     1991.
       ``(2) Report.--The Secretary shall prepare and submit to 
     Congress not later than September 2000 a report containing 
     the results of the study, including information on--
       ``(A) the types of activities funded with the quality 
     improvement funds;
       ``(B) the extent to which the use of the quality 
     improvement funds has accomplished the goals of section 
     640(a)(3)(B);
       ``(C) the effect of use of the quality improvement funds on 
     teacher training, salaries, benefits, recruitment, and 
     retention; and
       ``(D) the effect of use of the quality improvement funds on 
     the development of children receiving services under this 
     subchapter.''.

     SEC. 117. REPORTS.

       Section 650 of the Head Start Act (42 U.S.C. 9846) is 
     amended--
       (1) by inserting ``(a) Status of Children.--'' before 
     ``At'';
       (2) by striking ``and Labor'' each place it appears and 
     inserting ``and the Workforce''; and
       (3) by adding at the end the following:
       ``(b) Facilities.--At least once during every 5-year 
     period, the Secretary shall prepare and submit, to the 
     Committee on Education and the Workforce of the House of 
     Representatives and the Committee on Labor and Human 
     Resources of the Senate, a report concerning the condition, 
     location, and ownership of facilities used, or available to 
     be used, by Indian Head Start agencies (including Native 
     Alaskan Head Start agencies) and Native Hawaiian Head Start 
     agencies.''.

     SEC. 118. REPEAL OF CONSULTATION REQUIREMENT.

       Section 657A of the Head Start Act (42 U.S.C. 9852a) is 
     repealed.

     SEC. 119. REPEAL OF HEAD START TRANSITION PROJECT ACT.

       The Head Start Transition Project Act (42 U.S.C. 9855-
     9855g) is repealed.
            TITLE II--COMMUNITY SERVICES BLOCK GRANT PROGRAM

     SEC. 201. 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'.

[[Page H9704]]

     ``SEC. 672. PURPOSES AND GOALS.

       ``The purposes of this subtitle are--
       ``(1) to provide assistance to States and local 
     communities, working through a network of community action 
     agencies and other neighborhood-based organizations, for the 
     reduction of poverty, the revitalization of low-income 
     communities, and the empowerment of low-income families and 
     individuals in rural and urban areas to become fully self-
     sufficient (particularly families who are attempting to 
     transition off a State program carried out under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.)); 
     and
       ``(2) to accomplish the goals described in paragraph (1) 
     through--
       ``(A) the strengthening of community capabilities for 
     planning and coordinating the use of a broad range of 
     Federal, State, local, and other assistance (including 
     private resources) related to the elimination of poverty, so 
     that this assistance can be used in a manner responsive to 
     local needs and conditions;
       ``(B) the organization of a range of services related to 
     the needs of low-income families and individuals, so that 
     these services may have a measurable and potentially major 
     impact on the causes of poverty in the community and may help 
     the families and individuals to achieve self-sufficiency;
       ``(C) the greater use of innovative and effective 
     community-based approaches to attacking the causes and 
     effects of poverty and of community breakdown;
       ``(D) the maximum participation of residents of the low-
     income communities and members of the groups served by 
     programs assisted through the block grants made under this 
     subtitle to empower such residents and members to respond to 
     the unique problems and needs within their communities; and
       ``(E) the broadening of the resource base of programs 
     directed to the elimination of poverty so as to secure a more 
     active role in the provision of services for--
       ``(i) private, religious, charitable, and neighborhood-
     based organizations; and
       ``(ii) individual citizens, and business, labor, and 
     professional groups, who are able to influence the quantity 
     and quality of opportunities and services for the poor.

     ``SEC. 673. DEFINITIONS.

       ``In this subtitle:
       ``(1) Eligible entity; family literacy services.--
       ``(A) Eligible entity.--The term `eligible entity' means an 
     entity--
       ``(i) that is an eligible entity described in section 
     673(1) (as in effect on the day before the date of enactment 
     of the Coats Human Services Reauthorization Act of 1998) as 
     of the day before such date of enactment or is designated by 
     the process described in section 676A (including an 
     organization serving migrant or seasonal farmworkers that is 
     so described or designated); and
       ``(ii) that has a tripartite board or other mechanism 
     described in subsection (a) or (b), as appropriate, of 
     section 676B.
       ``(B) Family literacy services.--The term `family literacy 
     services' has the meaning given the term in section 637 of 
     the Head Start Act (42 U.S.C. 9832).
       ``(2) Poverty line.--The term `poverty line' means the 
     official poverty line defined by the Office of Management and 
     Budget based on the most recent data available from the 
     Bureau of the Census. The Secretary shall revise annually (or 
     at any shorter interval the Secretary determines to be 
     feasible and desirable) the poverty line, which shall be used 
     as a criterion of eligibility in the community services block 
     grant program established under this subtitle. 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. 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 to not to exceed 125 percent of the official 
     poverty line otherwise applicable under this paragraph.
       ``(3) Private, nonprofit organization.--The term `private, 
     nonprofit organization' includes a religious organization, to 
     which the provisions of section 679 shall apply.
       ``(4) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services.
       ``(5) State.--The term `State' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, Guam, the United States Virgin Islands, American Samoa, 
     and the Commonwealth of the Northern Mariana Islands.

     ``SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     such sums as may be necessary for each of fiscal years 1999 
     through 2003 to carry out the provisions of this subtitle 
     (other than sections 681 and 682).
       ``(b) Reservations.--Of the amounts appropriated under 
     subsection (a) for each fiscal year, the Secretary shall 
     reserve--
       ``(1) \1/2\ of 1 percent for carrying out section 675A 
     (relating to payments for territories);
       ``(2) 1 \1/2\ percent for activities authorized in sections 
     678A through 678F, of which--
       ``(A) not less than \1/2\ of the amount reserved by the 
     Secretary under this paragraph shall be distributed directly 
     to eligible entities, organizations, or associations 
     described in section 678A(c)(2) for the purpose of carrying 
     out activities described in section 678A(c); and
       ``(B) \1/2\ of the remainder of the amount reserved by the 
     Secretary under this paragraph shall be used by the Secretary 
     to carry out evaluation and to assist States in carrying out 
     corrective action activities and monitoring (to correct 
     programmatic deficiencies of eligible entities), as described 
     in sections 678B(c) and 678A; and
       ``(3) 9 percent for carrying out section 680 (relating to 
     discretionary activities) and section 678E(b)(2).

     ``SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.

       ``The Secretary is authorized to establish a community 
     services block grant program and make grants through the 
     program to States to ameliorate the causes of poverty in 
     communities within the States.

     ``SEC. 675A. DISTRIBUTION TO TERRITORIES.

       ``(a) Apportionment.--The Secretary shall apportion the 
     amount reserved under section 674(b)(1) for each fiscal year 
     on the basis of need among Guam, American Samoa, the 
     United States Virgin Islands, and the Commonwealth of the 
     Northern Mariana Islands.
       ``(b) Application.--Each jurisdiction to which subsection 
     (a) applies may receive a grant under this section for the 
     amount apportioned under subsection (a) on submitting to the 
     Secretary, and obtaining approval of, an application, 
     containing provisions that describe the programs for which 
     assistance is sought under this section, that is prepared in 
     accordance with, and contains the information described in, 
     section 676.

     ``SEC. 675B. ALLOTMENTS AND PAYMENTS TO STATES.

       ``(a) Allotments in General.--The Secretary shall, from the 
     amount appropriated under section 674(a) for each fiscal year 
     that remains after the Secretary makes the reservations 
     required in section 674(b), allot to each State (subject to 
     section 677) an amount that bears the same ratio to such 
     remaining amount as the amount received by the State for 
     fiscal year 1981 under section 221 of the Economic 
     Opportunity Act of 1964 bore to the total amount received by 
     all States for fiscal year 1981 under such section, except--
       ``(1) that no State shall receive less than \1/4\ of 1 
     percent of the amount appropriated under section 674(a) for 
     such fiscal year; and
       ``(2) as provided in subsection (b).
       ``(b) Allotments in Years With Greater Available Funds.--
       ``(1) Minimum allotments.--Subject to paragraphs (2) and 
     (3), if the amount appropriated under section 674(a) for a 
     fiscal year that remains after the Secretary makes the 
     reservations required in section 674(b) exceeds $345,000,000, 
     the Secretary shall allot to each State not less than \1/2\ 
     of 1 percent of the amount appropriated under section 674(a) 
     for such fiscal year.
       ``(2) Maintenance of fiscal year 1990 levels.--Paragraph 
     (1) shall not apply with respect to a fiscal year if the 
     amount allotted under subsection (a) to any State for that 
     year is less than the amount allotted under section 674(a)(1) 
     (as in effect on September 30, 1989) to such State for fiscal 
     year 1990.
       ``(3) Maximum allotments.--The amount allotted under 
     paragraph (1) to a State for a fiscal year shall be reduced, 
     if necessary, so that the aggregate amount allotted to such 
     State under such paragraph and subsection (a) does not exceed 
     140 percent of the aggregate amount allotted to such State 
     under the corresponding provisions of this subtitle for the 
     preceding fiscal year.
       ``(c) Payments.--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.
       ``(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. 675C. USES OF FUNDS.

       ``(a) Grants to Eligible Entities and Other 
     Organizations.--
       ``(1) In general.--Not less than 90 percent of the funds 
     made available to a State under section 675A or 675B shall be 
     used by the State to make grants for the purposes described 
     in section 672 to eligible entities.
       ``(2) Obligational authority.--Funds distributed to 
     eligible entities through grants made in accordance with 
     paragraph (1) for a fiscal year shall be available for 
     obligation during that fiscal year and the succeeding fiscal 
     year, subject to paragraph (3).
       ``(3) Recapture and redistribution of unobligated funds.--
       ``(A) Amount.--Beginning on October 1, 2000, a State may 
     recapture and redistribute funds distributed to an eligible 
     entity through a grant made under paragraph (1) that are 
     unobligated at the end of a fiscal year if such unobligated 
     funds exceed 20 percent of the amount so distributed to such 
     eligible entity for such fiscal year.
       ``(B) Redistribution.--In redistributing funds recaptured 
     in accordance with this paragraph, States shall redistribute 
     such funds to an eligible entity, or require the original 
     recipient of the funds to redistribute the funds to a 
     private, nonprofit organization, located within the community 
     served by the original recipient of the funds, for activities 
     consistent with the purposes of this subtitle.
       ``(b) Statewide Activities.--
       ``(1) Use of remainder.--If a State uses less than 100 
     percent of the grant or allotment received under section 675A 
     or 675B to make grants under subsection (a), the State shall 
     use the remainder of the grant or allotment under section 
     675A or 675B (subject to paragraph (2)) for activities 
     that may include--
       ``(A) providing training and technical assistance to those 
     entities in need of such training and assistance;
       ``(B) coordinating State-operated programs and services, 
     and at the option of the State, locally-operated programs and 
     services, targeted

[[Page H9705]]

     to low-income children and families with services provided by 
     eligible entities and other organizations funded under this 
     subtitle, including detailing appropriate employees of State 
     or local agencies to entities funded under this subtitle, to 
     ensure increased access to services provided by such State or 
     local agencies;
       ``(C) supporting statewide coordination and communication 
     among eligible entities;
       ``(D) analyzing the distribution of funds made available 
     under this subtitle within the State to determine if such 
     funds have been targeted to the areas of greatest need;
       ``(E) supporting asset-building programs for low-income 
     individuals, such as programs supporting individual 
     development accounts;
       ``(F) supporting innovative programs and activities 
     conducted by community action agencies or other neighborhood-
     based organizations to eliminate poverty, promote self-
     sufficiency, and promote community revitalization;
       ``(G) supporting State charity tax credits as described in 
     subsection (c); and
       ``(H) supporting other activities, consistent with the 
     purposes of this subtitle.
       ``(2) Administrative cap.--No State may spend more than the 
     greater of $55,000, or 5 percent, of the grant received under 
     section 675A or State allotment received under section 675B 
     for administrative expenses, including monitoring activities. 
     Funds to be spent for such expenses shall be taken from the 
     portion of the grant under section 675A or State allotment 
     that remains after the State makes grants to eligible 
     entities under subsection (a). The cost of activities 
     conducted under paragraph (1)(A) shall not be considered to 
     be administrative expenses. The startup cost and cost of 
     administrative activities conducted under subsection (c) 
     shall be considered to be administrative expenses.
       ``(c) Charity Tax Credit.--
       ``(1) In general.--Subject to paragraph (2), if there is in 
     effect under State law a charity tax credit, the State may 
     use for any purpose the amount of the allotment that is 
     available for expenditure under subsection (b).
       ``(2) Limit.--The aggregate amount a State may use under 
     paragraph (1) during a fiscal year shall not exceed 100 
     percent of the revenue loss of the State during the fiscal 
     year that is attributable to the charity tax credit, as 
     determined by the Secretary of the Treasury without regard to 
     any such revenue loss occurring before January 1, 1999.
       ``(3) Definitions and rules.--In this subsection:
       ``(A) Charity tax credit.--The term `charity tax credit' 
     means a nonrefundable credit against State income tax (or, in 
     the case of a State that does not impose an income tax, a 
     comparable benefit) that is allowable for contributions, in 
     cash or in kind, to qualified charities.
       ``(B) Qualified Charity.--
       ``(i) In General.--The term `qualified charity' means any 
     organization--

       ``(I) that is--

         ``(aa) described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 and exempt from tax under section 501(a) 
     of such Code;
         ``(bb) an eligible entity; or
         ``(cc) a public housing agency as defined in section 
     3(b)(6) of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)(6));

       ``(II) that is certified by the appropriate State authority 
     as meeting the requirements of clauses (iii) and (iv); and
       ``(III) if such organization is otherwise required to file 
     a return under section 6033 of such Code, that elects to 
     treat the information required to be furnished by clause (v) 
     as being specified in section 6033(b) of such Code.

       ``(ii) Certain contributions to collection organizations 
     treated as contributions to qualified charity.--

       ``(I) In general.--A contribution to a collection 
     organization shall be treated as a contribution to a 
     qualified charity if the donor designates in writing that the 
     contribution is for the qualified charity.
       ``(II) Collection organization.--The term `collection 
     organization' means an organization described in section 
     501(c)(3) of such Code and exempt from tax under section 
     501(a) of such Code--

       ``(aa) that solicits and collects gifts and grants that, by 
     agreement, are distributed to qualified charities;
       ``(bb) that distributes to qualified charities at least 90 
     percent of the gifts and grants the organization receives 
     that are designated for such qualified charities; and
       ``(cc) that meets the requirements of clause (vi).
       ``(iii) Charity must primarily assist poor individuals.--

       ``(I) In general.--An organization meets the requirements 
     of this clause only if the appropriate State authority 
     reasonably expects that the predominant activity of such 
     organization will be the provision of direct services within 
     the United States to individuals and families whose annual 
     incomes generally do not exceed 185 percent of the poverty 
     line in order to prevent or alleviate poverty among such 
     individuals and families.
       ``(II) No recordkeeping in certain cases.--An organization 
     shall not be required to establish or maintain records with 
     respect to the incomes of individuals and families for 
     purposes of subclause (I) if such individuals or families are 
     members of groups that are generally recognized as including 
     substantially only individuals and families described in 
     subclause (I).
       ``(III) Food aid and homeless shelters.--Except as 
     otherwise provided by the appropriate State authority, for 
     purposes of subclause (I), services to individuals in the 
     form of--

       ``(aa) donations of food or meals; or
       ``(bb) temporary shelter to homeless individuals;

     shall be treated as provided to individuals described in 
     subclause (I) if the location and provision of such services 
     are such that the service provider may reasonably conclude 
     that the beneficiaries of such services are predominantly 
     individuals described in subclause (I).

       ``(iv) Minimum expense requirement.--

       ``(I) In general.--An organization meets the requirements 
     of this clause only if the appropriate State authority 
     reasonably expects that the annual poverty program expenses 
     of such organization will not be less than 75 percent of the 
     annual aggregate expenses of such organization.
       ``(II) Poverty program expense.--For purposes of subclause 
     (I)--

       ``(aa) In general.--The term `poverty program expense' 
     means any expense in providing direct services referred to in 
     clause (iii).
       ``(bb) Exceptions.--Such term shall not include any 
     management or general expense, any expense for the purpose of 
     influencing legislation (as defined in section 4911(d) of the 
     Internal Revenue Code of 1986), any expense for the purpose 
     of fundraising, any expense for a legal service provided on 
     behalf of any individual referred to in clause (iii), any 
     expense for providing tuition assistance relating to 
     compulsory school attendance, and any expense that consists 
     of a payment to an affiliate of the organization.
       ``(v) Reporting requirement.--The information required to 
     be furnished under this clause about an organization is--

       ``(I) the percentages determined by dividing the following 
     categories of the organization's expenses for the year by the 
     total expenses of the organization for the year: expenses for 
     direct services, management expenses, general expenses, 
     fundraising expenses, and payments to affiliates; and
       ``(II) the category or categories (including food, shelter, 
     education, substance abuse prevention or treatment, job 
     training, or other) of services that constitute predominant 
     activities of the organization.

       ``(vi) Additional requirements for collection 
     organizations.--The requirements of this clause are met if 
     the organization--

       ``(I) maintains separate accounting for revenues and 
     expenses; and
       ``(II) makes available to the public information on the 
     administrative and fundraising costs of the organization, and 
     information as to the organizations receiving funds from the 
     organization and the amount of such funds.

       ``(vii) Special rule for states requiring tax uniformity.--
     In the case of a State--

       ``(I) that has a constitutional requirement of tax 
     uniformity; and
       ``(II) that, as of December 31, 1997, imposed a tax on 
     personal income with--

       ``(aa) a single flat rate applicable to all earned and 
     unearned income (except insofar as any amount is not taxed 
     pursuant to tax forgiveness provisions); and
       ``(bb) no generally available exemptions or deductions to 
     individuals;

     the requirement of paragraph (2) shall be treated as met if 
     the amount of the credit described in paragraph (2) is 
     limited to a uniform percentage (but not greater than 25 
     percent) of State personal income tax liability (determined 
     without regard to credits).
       ``(4) Limitation on use of funds for startup and 
     administrative activities.--Except to the extent provided in 
     subsection (b)(2), no part of the aggregate amount a State 
     uses under paragraph (1) may be used to pay for the cost 
     of the startup and administrative activities conducted 
     under this subsection.
       ``(5) Prohibition on use of funds for legal services or 
     tuition assistance.--No part of the aggregate amount a State 
     uses under paragraph (1) may be used to provide legal 
     services or to provide tuition assistance related to 
     compulsory education requirements (not including tuition 
     assistance for tutoring, camps, skills development, or other 
     supplemental services or training).
       ``(6) Prohibition on supplanting funds.--No part of the 
     aggregate amount a State uses under paragraph (1) may be used 
     to supplant non-Federal funds that would be available, in the 
     absence of Federal funds, to offset a revenue loss of the 
     State attributable to a charity tax credit.

     ``SEC. 676. APPLICATION AND PLAN.

       ``(a) Designation of Lead Agency.--
       ``(1) Designation.--The chief executive officer of a State 
     desiring to receive a grant or allotment under section 675A 
     or 675B shall designate, in an application submitted to the 
     Secretary under subsection (b), an appropriate State agency 
     that complies with the requirements of paragraph (2) to act 
     as a lead agency for purposes of carrying out State 
     activities under this subtitle.
       ``(2) Duties.--The lead agency shall--
       ``(A) develop the State plan to be submitted to the 
     Secretary under subsection (b);
       ``(B) in conjunction with the development of the State plan 
     as required under subsection (b), hold at least one hearing 
     in the State with sufficient time and statewide distribution 
     of notice of such hearing, to provide to the public an 
     opportunity to comment on the proposed use and distribution 
     of funds to be provided through the grant or allotment under 
     section 675A or 675B for the period covered by the State 
     plan; and
       ``(C) conduct reviews of eligible entities under section 
     678B.
       ``(3) Legislative hearing.--In order to be eligible to 
     receive a grant or allotment under section 675A or 675B, the 
     State shall hold at least one legislative hearing every 3 
     years in conjunction with the development of the State plan.
       ``(b) State Application and Plan.--Beginning with fiscal 
     year 2000, to be eligible to receive a grant or allotment 
     under section 675A or 675B, a State shall prepare and submit 
     to the Secretary an application and State plan covering a 
     period of not less than 1 fiscal year and not more than 2 
     fiscal years. The plan shall be

[[Page H9706]]

     submitted not later than 30 days prior to the beginning of 
     the first fiscal year covered by the plan, and shall contain 
     such information as the Secretary shall require, including--
       ``(1) an assurance that funds made available through the 
     grant or allotment will be used--
       ``(A) to support activities that are designed to assist 
     low-income families and individuals, including families and 
     individuals receiving assistance under part A of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.), homeless 
     families and individuals, migrant or seasonal farmworkers, 
     and elderly low-income individuals and families, and a 
     description of how such activities will enable the families 
     and individuals--
       ``(i) to remove obstacles and solve problems that block the 
     achievement of self-sufficiency (including self-sufficiency 
     for families and individuals who are attempting to transition 
     off a State program carried out under part A of title IV of 
     the Social Security Act);
       ``(ii) to secure and retain meaningful employment;
       ``(iii) to attain an adequate education, with particular 
     attention toward improving literacy skills of the low-income 
     families in the communities involved, which may include 
     carrying out family literacy initiatives;
       ``(iv) to make better use of available income;
       ``(v) to obtain and maintain adequate housing and a 
     suitable living environment;
       ``(vi) to obtain emergency assistance through loans, 
     grants, or other means to meet immediate and urgent family 
     and individual needs; and
       ``(vii) to achieve greater participation in the affairs of 
     the communities involved, including the development of public 
     and private grassroots partnerships with local law 
     enforcement agencies, local housing authorities, private 
     foundations, and other public and private partners to--

       ``(I) document best practices based on successful 
     grassroots intervention in urban areas, to develop 
     methodologies for widespread replication; and
       ``(II) strengthen and improve relationships with local law 
     enforcement agencies, which may include participation in 
     activities such as neighborhood or community policing 
     efforts;

       ``(B) to address the needs of youth in low-income 
     communities through youth development programs that support 
     the primary role of the family, give priority to the 
     prevention of youth problems and crime, and promote increased 
     community coordination and collaboration in meeting the needs 
     of youth, and support development and expansion of innovative 
     community-based youth development programs that have 
     demonstrated success in preventing or reducing youth crime, 
     such as--
       ``(i) programs for the establishment of violence-free zones 
     that would involve youth development and intervention models 
     (such as models involving youth mediation, youth mentoring, 
     life skills training, job creation, and entrepreneurship 
     programs); and
       ``(ii) after-school child care programs; and
       ``(C) to make more effective use of, and to coordinate 
     with, other programs related to the purposes of this subtitle 
     (including State welfare reform efforts);
       ``(2) a description of how the State intends to use 
     discretionary funds made available from the remainder of the 
     grant or allotment described in section 675C(b) in accordance 
     with this subtitle, including a description of how the State 
     will support innovative community and neighborhood-based 
     initiatives related to the purposes of this subtitle;
       ``(3) information provided by eligible entities in the 
     State, containing--
       ``(A) a description of the service delivery system, for 
     services provided or coordinated with funds made available 
     through grants made under section 675C(a), targeted to low-
     income individuals and families in communities within the 
     State;
       ``(B) a description of how linkages will be developed to 
     fill identified gaps in the services, through the provision 
     of information, referrals, case management, and followup 
     consultations;
       ``(C) a description of how funds made available through 
     grants made under section 675C(a) will be coordinated with 
     other public and private resources; and
       ``(D) a description of how the local entity will use the 
     funds to support innovative community and neighborhood-based 
     initiatives related to the purposes of this subtitle, which 
     may include fatherhood initiatives and other initiatives 
     with the goal of strengthening families and encouraging 
     effective parenting;
       ``(4) an assurance that eligible entities in the State will 
     provide, on an emergency basis, for the provision of such 
     supplies and services, nutritious foods, and related 
     services, as may be necessary to counteract conditions of 
     starvation and malnutrition among low-income individuals;
       ``(5) an assurance that the State and the eligible entities 
     in the State will coordinate, and establish linkages between, 
     governmental and other social services programs to assure the 
     effective delivery of such services to low-income individuals 
     and to avoid duplication of such services, and a description 
     of how the State and the eligible entities will coordinate 
     the provision of employment and training activities, as 
     defined in section 101 of such Act, in the State and in 
     communities with entities providing activities through 
     statewide and local workforce investment systems under the 
     Workforce Investment Act of 1998;
       ``(6) an assurance that the State will ensure coordination 
     between antipoverty programs in each community in the State, 
     and ensure, where appropriate, that emergency energy crisis 
     intervention programs under title XXVI (relating to low-
     income home energy assistance) are conducted in such 
     community;
       ``(7) an assurance that the State will permit and cooperate 
     with Federal investigations undertaken in accordance with 
     section 678D;
       ``(8) an assurance that any eligible entity in the State 
     that received funding in the previous fiscal year through a 
     community services block grant made under this subtitle will 
     not have its funding terminated under this subtitle, or 
     reduced below the proportional share of funding the entity 
     received in the previous fiscal year unless, after providing 
     notice and an opportunity for a hearing on the record, the 
     State determines that cause exists for such termination or 
     such reduction, subject to review by the Secretary as 
     provided in section 678C(b);
       ``(9) an assurance that the State and eligible entities in 
     the State will, to the maximum extent possible, coordinate 
     programs with and form partnerships with other organizations 
     serving low-income residents of the communities and members 
     of the groups served by the State, including religious 
     organizations, charitable groups, and community 
     organizations;
       ``(10) an assurance that the State will require each 
     eligible entity in the State to establish procedures under 
     which a low-income individual, community organization, or 
     religious organization, or representative of low-income 
     individuals that considers its organization, or low-income 
     individuals, to be inadequately represented on the board (or 
     other mechanism) of the eligible entity to petition for 
     adequate representation;
       ``(11) an assurance that the State will secure from each 
     eligible entity in the State, as a condition to receipt of 
     funding by the entity through a community services block 
     grant made under this subtitle for a program, a community 
     action plan (which shall be submitted to the Secretary, at 
     the request of the Secretary, with the State plan) that 
     includes a community-needs assessment for the community 
     served, which may be coordinated with community-needs 
     assessments conducted for other programs;
       ``(12) an assurance that the State and all eligible 
     entities in the State will, not later than fiscal year 2001, 
     participate in the Results Oriented Management and 
     Accountability System, another performance measure system for 
     which the Secretary facilitated development pursuant to 
     section 678E(b), or an alternative system for measuring 
     performance and results that meets the requirements of that 
     section, and a description of outcome measures to be used to 
     measure eligible entity performance in promoting self-
     sufficiency, family stability, and community 
     revitalization; and
       ``(13) information describing how the State will carry out 
     the assurances described in this subsection.
       ``(c) Funding Termination or Reductions.--For purposes of 
     making a determination in accordance with subsection (b)(8) 
     with respect to--
       ``(1) a funding reduction, the term `cause' includes--
       ``(A) a statewide redistribution 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 data;
       ``(ii) the designation of a new eligible entity; or
       ``(iii) severe economic dislocation; or
       ``(B) the failure of an eligible entity to comply with the 
     terms of an agreement or a State plan, or to meet a State 
     requirement, as described in section 678C(a); and
       ``(2) a termination, the term `cause' includes the failure 
     of an eligible entity to comply with the terms of an 
     agreement or a State plan, or to meet a State requirement, as 
     described in section 678C(a).
       ``(d) Procedures and Information.--The Secretary may 
     prescribe procedures for the purpose of assessing the 
     effectiveness of eligible entities in carrying out the 
     purposes of this subtitle.
       ``(e) Revisions and Inspection.--
       ``(1) Revisions.--The chief executive officer of each State 
     may revise any plan prepared under this section and shall 
     submit the revised plan to the Secretary.
       ``(2) Public inspection.--Each plan or revised plan 
     prepared under this section shall be made available for 
     public inspection within the State in such a manner as will 
     facilitate review of, and comment on, the plan.
       ``(f) Transition.--For fiscal year 2000, to be eligible to 
     receive a grant or allotment under section 675A or 675B, a 
     State shall prepare and submit to the Secretary an 
     application and State plan in accordance with the provisions 
     of this subtitle (as in effect on the day before the date of 
     enactment of the Coats Human Services Reauthorization Act of 
     1998), rather than the provisions of subsections (a) through 
     (c) relating to applications and plans.

     ``SEC. 676A. DESIGNATION AND REDESIGNATION OF ELIGIBLE 
                   ENTITIES IN UNSERVED AREAS.

       ``(a) Qualified Organization In or Near Area.--
       ``(1) In general.--If any geographic area of a State is 
     not, or ceases to be, served by an eligible entity under this 
     subtitle, and if the chief executive officer of the State 
     decides to serve such area, the chief executive officer may 
     solicit applications from, and designate as an eligible 
     entity--
       ``(A) a private nonprofit organization (which may include 
     an eligible entity) that is geographically located in the 
     unserved area, that is capable of providing a broad range of 
     services designed to eliminate poverty and foster self-
     sufficiency, and that meets the requirements of this 
     subtitle; and
       ``(B) a private nonprofit eligible entity that is 
     geographically located in an area contiguous to or within 
     reasonable proximity of the unserved area and that is already 
     providing related services in the unserved area.
       ``(2) Requirement.--In order to serve as the eligible 
     entity for the area, an entity described in paragraph (1)(B) 
     shall agree to add additional members to the board of the 
     entity to ensure adequate representation--

[[Page H9707]]

       ``(A) in each of the three required categories described in 
     subparagraphs (A), (B), and (C) of section 676B(a)(2), by 
     members that reside in the community comprised by the 
     unserved area; and
       ``(B) in the category described in section 676B(a)(2)(B), 
     by members that reside in the neighborhood to be served.
       ``(b) Special Consideration.--In designating an eligible 
     entity under subsection (a), the chief executive officer 
     shall grant the designation to an organization of 
     demonstrated effectiveness in meeting the goals and purposes 
     of this subtitle and may give priority, in granting the 
     designation, to eligible entities that are providing related 
     services in the unserved area, consistent with the needs 
     identified by a community-needs assessment.
       ``(c) No Qualified Organization in or Near Area.--If no 
     private, nonprofit organization is identified or determined 
     to be qualified under subsection (a) to serve the unserved 
     area as an eligible entity the chief executive officer may 
     designate an appropriate political subdivision of the State 
     to serve as an eligible entity for the area. In order to 
     serve as the eligible entity for that area, the political 
     subdivision shall have a board or other mechanism as required 
     in section 676B(b).

     ``SEC. 676B. TRIPARTITE BOARDS.

       ``(a) Private Nonprofit Entities.--
       ``(1) Board.--In order for a private, nonprofit entity to 
     be considered to be an eligible entity for purposes of 
     section 673(1), the entity shall administer the community 
     services block grant program through a tripartite board 
     described in paragraph (2) that fully participates in the 
     development, planning, implementation, and evaluation of the 
     program to serve low-income communities.
       ``(2) Selection and composition of board.--The members of 
     the board referred to in paragraph (1) shall be selected by 
     the entity and the board shall be composed so as to assure 
     that--
       ``(A) \1/3\ of the members of the board are elected public 
     officials, holding office on the date of selection, or their 
     representatives, except that if the number of such elected 
     officials reasonably available and willing to serve on the 
     board is less than \1/3\ of the membership of the board, 
     membership on the board of appointive public officials or 
     their representatives may be counted in meeting such \1/3\ 
     requirement;
       ``(B)(i) not fewer than \1/3\ of the members are persons 
     chosen in accordance with democratic selection procedures 
     adequate to assure that these members are representative of 
     low-income individuals and families in the neighborhood 
     served; and
       ``(ii) each representative of low-income individuals and 
     families selected to represent a specific neighborhood within 
     a community under clause (i) resides in the neighborhood 
     represented by the member; and
       ``(C) the remainder of the members are officials or members 
     of business, industry, labor, religious, law enforcement, 
     education, or other major groups and interests in the 
     community served.
       ``(b) Public Organizations.--In order for a public 
     organization to be considered to be an eligible entity for 
     purposes of section 673(1), the entity shall administer the 
     community services block grant program through--
       ``(1) a tripartite board, which shall have members selected 
     by the organization and shall be composed so as to assure 
     that not fewer than \1/3\ of the members are persons chosen 
     in accordance with democratic selection procedures adequate 
     to assure that these members--
       ``(A) are representative of low-income individuals and 
     families in the neighborhood served;
       ``(B) reside in the neighborhood served; and
       ``(C) are able to participate actively in the development, 
     planning, implementation, and evaluation of programs funded 
     under this subtitle; or
       ``(2) another mechanism specified by the State to assure 
     decisionmaking and participation by low-income individuals in 
     the development, planning, implementation, and evaluation of 
     programs funded under this subtitle.

     ``SEC. 677. PAYMENTS TO INDIAN TRIBES.

       ``(a) Reservation.--If, with respect to any State, the 
     Secretary--
       ``(1) receives a request from the governing body of an 
     Indian tribe or tribal organization within the State that 
     assistance under this subtitle be made directly to such tribe 
     or organization; and
       ``(2) determines that the members of such tribe or tribal 
     organization would be better served by means of grants made 
     directly to provide benefits under this subtitle,
     the Secretary shall reserve from amounts that would otherwise 
     be allotted to such State under section 675B for the fiscal 
     year the amount determined under subsection (b).
       ``(b) Determination of Reserved Amount.--The Secretary 
     shall reserve for the purpose of subsection (a) from amounts 
     that would otherwise be allotted to such State, not less than 
     100 percent of an amount that bears the same ratio to the 
     State allotment for the fiscal year involved as the 
     population of all eligible Indians for whom a determination 
     has been made under subsection (a) bears to the population of 
     all individuals eligible for assistance through a community 
     services block grant made under this subtitle in such State.
       ``(c) Awards.--The sums reserved by the Secretary on the 
     basis of a determination made under subsection (a) shall be 
     made available by grant to the Indian tribe or tribal 
     organization serving the individuals for whom such a 
     determination has been made.
       ``(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) Definitions.--In this section:
       ``(1) Indian tribe; tribal organization.--The terms `Indian 
     tribe' and `tribal organization' mean 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.
       ``(2) Indian.--The term `Indian' means a member of an 
     Indian tribe or of a tribal organization.

     ``SEC. 678. OFFICE OF COMMUNITY SERVICES.

       ``(a) Office.--The Secretary shall carry out the functions 
     of this subtitle through an Office of Community Services, 
     which shall be established in the Department of Health and 
     Human Services. The Office shall be headed by a Director.
       ``(b) Grants, Contracts, and Cooperative Agreements.--The 
     Secretary shall carry out functions of this subtitle through 
     grants, contracts, or cooperative agreements.

     ``SEC. 678A. TRAINING, TECHNICAL ASSISTANCE, AND OTHER 
                   ACTIVITIES.

       ``(a) Activities.--
       ``(1) In general.--The Secretary shall use amounts reserved 
     in section 674(b)(2)--
       ``(A) for training, technical assistance, planning, 
     evaluation, and performance measurement, to assist States in 
     carrying out corrective action activities and monitoring (to 
     correct programmatic deficiencies of eligible entities), and 
     for reporting and data collection activities, related to 
     programs carried out under this subtitle; and
       ``(B) to distribute amounts in accordance with subsection 
     (c).
       ``(2) Grants, contracts, and cooperative agreements.--The 
     activities described in paragraph (1)(A) may be carried out 
     by the Secretary through grants, contracts, or cooperative 
     agreements with appropriate entities.
       ``(b) Terms and Technical Assistance Process.--The process 
     for determining the training and technical assistance to be 
     carried out under this section shall--
       ``(1) ensure that the needs of eligible entities and 
     programs relating to improving program quality (including 
     quality of financial management practices) are addressed to 
     the maximum extent feasible; and
       ``(2) incorporate mechanisms to ensure responsiveness to 
     local needs, including an ongoing procedure for obtaining 
     input from the national and State networks of eligible 
     entities.
       ``(c) Distribution Requirement.--
       ``(1) In general.--The amounts reserved under section 
     674(b)(2)(A) for activities to be carried out under this 
     subsection shall be distributed directly to eligible 
     entities, organizations, or associations described in 
     paragraph (2) for the purpose of improving program quality 
     (including quality of financial management practices), 
     management information and reporting systems, and measurement 
     of program results, and for the purpose of ensuring 
     responsiveness to identified local needs.
       ``(2) Eligible entities, organizations, or associations.--
     Eligible entities, organizations, or associations described 
     in this paragraph shall be eligible entities, or statewide or 
     local organizations or associations, with demonstrated 
     expertise in providing training to individuals and 
     organizations on methods of effectively addressing the needs 
     of low-income families and communities.

     ``SEC. 678B. MONITORING OF ELIGIBLE ENTITIES.

       ``(a) In General.--In order to determine whether eligible 
     entities meet the performance goals, administrative 
     standards, financial management requirements, and other 
     requirements of a State, the State shall conduct the 
     following reviews of eligible entities:
       ``(1) A full onsite review of each such entity at least 
     once during each 3-year period.
       ``(2) An onsite review of each newly designated entity 
     immediately after the completion of the first year in which 
     such entity receives funds through the community services 
     block grant program.
       ``(3) Followup reviews including prompt return visits to 
     eligible entities, and their programs, that fail to meet the 
     goals, standards, and requirements established by the State.
       ``(4) Other reviews as appropriate, including reviews of 
     entities with programs that have had other Federal, State, or 
     local grants (other than assistance provided under this 
     subtitle) terminated for cause.
       ``(b) Requests.--The State may request training and 
     technical assistance from the Secretary as needed to comply 
     with the requirements of this section.
       ``(c) Evaluations by the Secretary.--The Secretary shall 
     conduct in several States in each fiscal year evaluations 
     (including investigations) of the use of funds received by 
     the States under this subtitle in order to evaluate 
     compliance with the provisions of this subtitle, and 
     especially with respect to compliance with section 676(b). 
     The Secretary shall submit, to each State evaluated, a report 
     containing the results of such evaluations, and 
     recommendations of improvements designed to enhance the 
     benefit and impact of the activities carried out with such 
     funds for people in need. On receiving the report, the State 
     shall submit to the Secretary a plan of action in response to 
     the recommendations contained in the report. The results of 
     the evaluations shall be submitted annually to the 
     Chairperson of the Committee on Education and the Workforce 
     of the House of Representatives and the Chairperson of the 
     Committee on Labor and Human Resources of the Senate as part 
     of the report submitted by the Secretary in accordance 
     with section 678E(b)(2).

     ``SEC. 678C. CORRECTIVE ACTION; TERMINATION AND REDUCTION OF 
                   FUNDING.

       ``(a) Determination.--If the State determines, on the basis 
     of a final decision in a review pursuant to section 678B, 
     that an eligible

[[Page H9708]]

     entity fails to comply with the terms of an agreement, or the 
     State plan, to provide services under this subtitle or to 
     meet appropriate standards, goals, and other requirements 
     established by the State (including performance objectives), 
     the State shall--
       ``(1) inform the entity of the deficiency to be corrected;
       ``(2) require the entity to correct the deficiency;
       ``(3)(A) offer training and technical assistance, if 
     appropriate, to help correct the deficiency, and prepare and 
     submit to the Secretary a report describing the training and 
     technical assistance offered; or
       ``(B) if the State determines that such training and 
     technical assistance are not appropriate, prepare and submit 
     to the Secretary a report stating the reasons for the 
     determination;
       ``(4)(A) at the discretion of the State (taking into 
     account the seriousness of the deficiency and the time 
     reasonably required to correct the deficiency), allow the 
     entity to develop and implement, within 60 days after being 
     informed of the deficiency, a quality improvement plan to 
     correct such deficiency within a reasonable period of time, 
     as determined by the State; and
       ``(B) not later than 30 days after receiving from an 
     eligible entity a proposed quality improvement plan pursuant 
     to subparagraph (A), either approve such proposed plan or 
     specify the reasons why the proposed plan cannot be approved; 
     and
       ``(5) after providing adequate notice and an opportunity 
     for a hearing, initiate proceedings to terminate the 
     designation of or reduce the funding under this subtitle of 
     the eligible entity unless the entity corrects the 
     deficiency.
       ``(b) Review.--A determination to terminate the designation 
     or reduce the funding of an eligible entity is reviewable by 
     the Secretary. The Secretary shall, upon request, review such 
     a determination. The review shall be completed not later than 
     90 days after the Secretary receives from the State all 
     necessary documentation relating to the determination to 
     terminate the designation or reduce the funding. If the 
     review is not completed within 90 days, the determination of 
     the State shall become final at the end of the 90th day.
       ``(c) Direct Assistance.--Whenever a State violates the 
     assurances contained in section 676(b)(8) and terminates or 
     reduces the funding of an eligible entity prior to the 
     completion of the State hearing described in that section and 
     the Secretary's review as required in subsection (b), the 
     Secretary is authorized to provide financial assistance under 
     this subtitle to the eligible entity affected until the 
     violation is corrected. In such a case, the grant or 
     allotment for the State under section 675A or 675B for the 
     earliest appropriate fiscal year shall be reduced by an 
     amount equal to the funds provided under this subsection to 
     such eligible entity.

     ``SEC. 678D. 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) ensure that cost and accounting standards of the 
     Office of Management and Budget apply to a recipient of the 
     funds under this subtitle;
       ``(C) subject to paragraph (2), prepare, at least every 
     year, an audit of the expenditures of the State of amounts 
     received under this subtitle and amounts transferred to carry 
     out the purposes of this subtitle; and
       ``(D) make appropriate books, documents, papers, and 
     records available to the Secretary and the Comptroller 
     General of the United States, or any of their duly authorized 
     representatives, for examination, copying, or mechanical 
     reproduction on or off the premises of the appropriate entity 
     upon a reasonable request for the items.
       ``(2) Audits.--
       ``(A) In general.--Subject to subparagraph (B), each audit 
     required by subsection (a)(1)(C) shall be conducted by an 
     entity independent of any agency administering activities or 
     services carried out under this subtitle and shall be 
     conducted in accordance with generally accepted accounting 
     principles.
       ``(B) Single audit requirements.--Audits shall be conducted 
     under this paragraph 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 1996').
       ``(C) Submission of copies.--Within 30 days after the 
     completion of each such audit in a State, the chief executive 
     officer of the State shall submit a copy of such audit to any 
     eligible entity that was the subject of the audit at no 
     charge, to the legislature of the State, and to the 
     Secretary.
       ``(3) Repayments.--The State shall repay to the United 
     States amounts found not to have been expended in accordance 
     with this subtitle or the Secretary may offset such amounts 
     against any other amount to which the State is or may become 
     entitled under this subtitle.
       ``(b) Withholding.--
       ``(1) In general.--The Secretary shall, after providing 
     adequate notice and an opportunity for a hearing conducted 
     within the affected State, withhold funds from any State that 
     does not utilize the grant or allotment under section 675A or 
     675B in accordance with the provisions of this subtitle, 
     including the assurances such State provided under section 
     676.
       ``(2) Response to complaints.--The Secretary shall respond 
     in an expeditious and speedy manner to complaints of a 
     substantial or serious nature that a State has failed to use 
     funds in accordance with the provisions of this subtitle, 
     including the assurances provided by the State under section 
     676. For purposes of this paragraph, a complaint of a failure 
     to meet any one of the assurances provided under section 676 
     that constitutes disregarding that assurance shall be 
     considered to be a complaint of a serious nature.
       ``(3) Investigations.--Whenever the Secretary determines 
     that there is a pattern of complaints of failures described 
     in paragraph (2) from any State in any fiscal year, the 
     Secretary shall conduct an investigation of the use of funds 
     received under this subtitle by such State in order to ensure 
     compliance with the provisions of this subtitle.

     ``SEC. 678E. ACCOUNTABILITY AND REPORTING REQUIREMENTS.

       ``(a) State Accountability and Reporting Requirements.--
       ``(1) Performance measurement.--
       ``(A) In general.--By October 1, 2001, each State that 
     receives funds under this subtitle shall participate, and 
     shall ensure that all eligible entities in the State 
     participate, in a performance measurement system, which may 
     be a performance measurement system for which the Secretary 
     facilitated development pursuant to subsection (b), or an 
     alternative system that the Secretary is satisfied meets the 
     requirements of subsection (b).
       ``(B) Local agencies.--The State may elect to have local 
     agencies that are subcontractors 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 agencies.
       ``(2) Annual report.--Each State shall annually prepare and 
     submit to the Secretary a report on the measured performance 
     of the State and the eligible entities in the State. Prior to 
     the participation of the State in the performance measurement 
     system, the State shall include in the report any information 
     collected by the State relating to such performance. Each 
     State shall also include in the report an accounting of the 
     expenditure of funds received by the State through the 
     community services block grant program, including an 
     accounting of funds spent on administrative costs by the 
     State and the eligible entities, and funds spent by eligible 
     entities on the direct delivery of local services, and shall 
     include information on the number of and characteristics of 
     clients served under this subtitle in the State, based on 
     data collected from the eligible entities. The State shall 
     also include in the report a summary describing the training 
     and technical assistance offered by the State under section 
     678C(a)(3) during the year covered by the report.
       ``(b) Secretary's Accountability and Reporting 
     Requirements.--
       ``(1) Performance measurement.--The Secretary, in 
     collaboration with the States and with eligible entities 
     throughout the Nation, shall facilitate the development of 
     one or more model performance measurement systems, which may 
     be used by the States and by eligible entities to measure 
     their performance in carrying out the requirements of this 
     subtitle and in achieving the goals of their community action 
     plans. The Secretary shall provide technical assistance, 
     including support for the enhancement of electronic data 
     systems, to States and to eligible entities to enhance their 
     capability to collect and report data for such a system and 
     to aid in their participation in such a system.
       ``(2) Reporting requirements.--At the end of each fiscal 
     year beginning after September 30, 1999, the Secretary shall, 
     directly or by grant or contract, prepare a report 
     containing--
       ``(A) a summary of the planned use of funds by each State, 
     and the eligible entities in the State, under the community 
     services block grant program, as contained in each State plan 
     submitted pursuant to section 676;
       ``(B) a description of how funds were actually spent by the 
     State and eligible entities in the State, including a 
     breakdown of funds spent on administrative costs and on the 
     direct delivery of local services by eligible entities;
       ``(C) information on the number of entities eligible for 
     funds under this subtitle, the number of low-income persons 
     served under this subtitle, and such demographic data on the 
     low-income populations served by eligible entities as is 
     determined by the Secretary to be feasible;
       ``(D) a comparison of the planned uses of funds for each 
     State and the actual uses of the funds;
       ``(E) a summary of each State's performance results, and 
     the results for the eligible entities, as collected and 
     submitted by the States in accordance with subsection (a)(2); 
     and
       ``(F) any additional information that the Secretary 
     considers to be appropriate to carry out this subtitle, if 
     the Secretary informs the States of the need for such 
     additional information and allows a reasonable period of time 
     for the States to collect and provide the information.
       ``(3) Submission.--The Secretary shall submit to the 
     Committee on Education and the Workforce of the House 
     of Representatives and the Committee on Labor and Human 
     Resources of the Senate the report described in paragraph 
     (2), and any comments the Secretary may have with respect 
     to such report. The report shall include definitions of 
     direct and administrative costs used by the Department of 
     Health and Human Services for programs funded under this 
     subtitle.
       ``(4) Costs.--Of the funds reserved under section 
     674(b)(3), not more than $350,000 shall be available to carry 
     out the reporting requirements contained in paragraph (2).

     ``SEC. 678F. LIMITATIONS ON USE OF FUNDS.

       ``(a) Construction of Facilities.--
       ``(1) Limitations.--Except as provided in paragraph (2), 
     grants made under this subtitle (other than amounts reserved 
     under section 674(b)(3)) may not be used by the State, or by

[[Page H9709]]

     any other person with which the State makes arrangements to 
     carry out the purposes of this subtitle, for the purchase or 
     improvement of land, or the purchase, construction, or 
     permanent improvement (other than low-cost residential 
     weatherization or other energy-related home repairs) of any 
     building or other facility.
       ``(2) Waiver.--The Secretary may waive the limitation 
     contained in paragraph (1) upon a State request for such a 
     waiver, if the Secretary finds that the request describes 
     extraordinary circumstances to justify the purchase of land 
     or the construction of facilities (or the making of permanent 
     improvements) and that permitting the waiver will contribute 
     to the ability of the State to carry out the purposes of this 
     subtitle.
       ``(b) Political Activities.--
       ``(1) Treatment as a state or local 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.--Programs assisted under this subtitle 
     shall not be carried on in a manner involving the use of 
     program funds, the provision of services, or the employment 
     or assignment of personnel, in a manner supporting or 
     resulting in the identification of such programs with--
       ``(A) any partisan or nonpartisan political activity or any 
     political activity associated with a candidate, or contending 
     faction or group, in an election for public or party office;
       ``(B) any activity to provide voters or prospective voters 
     with transportation to the polls or similar assistance in 
     connection with any such election; or
       ``(C) any voter registration activity.
       ``(3) Rules and regulations.--The Secretary, after 
     consultation with the Office of Personnel Management, shall 
     issue rules and regulations to provide for the enforcement of 
     this subsection, which shall include provisions for summary 
     suspension of assistance or other action necessary to permit 
     enforcement on an emergency basis.
       ``(c) Nondiscrimination.--
       ``(1) In general.--No person shall, on the basis of race, 
     color, national origin, or sex be excluded from participation 
     in, be denied the benefits of, or be subjected to 
     discrimination under, any program or activity 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 or activity.
       ``(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. 678G. 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, activities, 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 675C(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 grant 
     under section 675C, such entity shall--
       ``(1) inform custodial parents in single-parent families 
     that participate in programs, activities, 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. 679. OPERATIONAL RULE.

       ``(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 the assistance under the program, so long as the 
     program is implemented in a manner consistent with the 
     Establishment Clause of the first amendment to the 
     Constitution. Neither the Federal Government nor a State or 
     local government receiving funds under this subtitle shall 
     discriminate against an 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 676B; 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. 680. DISCRETIONARY AUTHORITY OF THE SECRETARY.

       ``(a) Grants, Contracts, Arrangements, Loans, and 
     Guarantees.--
       ``(1) In general.--The Secretary shall, from funds reserved 
     under section 674(b)(3), make grants, loans, or guarantees to 
     States and public agencies and private, nonprofit 
     organizations, or enter into contracts or jointly financed 
     cooperative 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 consist 
     of residents of the community and business and civic leaders 
     and shall have as a principal purpose planning, developing, 
     or managing low-income housing or community development 
     projects.
       ``(D) Geographic distribution.--In making grants to carry 
     out this paragraph, the Secretary shall take into 
     consideration the 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

[[Page H9710]]

     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 shall include 
     providing grants to neighborhood-based private, nonprofit 
     organizations to test or assist in the development of new 
     approaches or methods that will aid in overcoming special 
     problems identified by communities or neighborhoods or 
     otherwise assist in furthering the purposes of this subtitle, 
     and which may include 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 in 
     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 Labor and Human Resources of the Senate.

     ``SEC. 681. COMMUNITY FOOD AND NUTRITION PROGRAMS.

       ``(a) Grants.--The Secretary may, through grants to public 
     and private, nonprofit agencies, provide for community-based, 
     local, statewide, and national programs--
       ``(1) to coordinate private and public food assistance 
     resources, wherever the grant recipient involved determines 
     such coordination to be inadequate, to better serve low-
     income populations;
       ``(2) to assist low-income communities to identify 
     potential sponsors of child nutrition programs and to 
     initiate such programs in underserved or unserved areas; and
       ``(3) to develop innovative approaches at the State and 
     local level to meet the nutrition needs of low-income 
     individuals.
       ``(b) Allotments and Distribution of Funds.--
       ``(1) Not to exceed $6,000,000 in appropriations.--Of the 
     amount appropriated for a fiscal year to carry out this 
     section (but not to exceed $6,000,000), the Secretary shall 
     distribute funds for grants under subsection (a) as follows:
       ``(A) Allotments.--From a portion equal to 60 percent of 
     such amount (but not to exceed $3,600,000), the Secretary 
     shall allot for grants to eligible agencies for statewide 
     programs in each State the amount that bears the same ratio 
     to such portion as the low-income and unemployed population 
     of such State bears to the low-income and unemployed 
     population of all the States.
       ``(B) Competitive grants.--From a portion equal to 40 
     percent of such amount (but not to exceed $2,400,000), the 
     Secretary shall make grants on a competitive basis to 
     eligible agencies for local and statewide programs.
       ``(2) Greater available appropriations.--Any amounts 
     appropriated for a fiscal year to carry out this section in 
     excess of $6,000,000 shall be allotted as follows:
       ``(A) Allotments.--The Secretary shall use 40 percent of 
     such excess to allot for grants under subsection (a) to 
     eligible agencies for statewide programs in each State an 
     amount that bears the same ratio to 40 percent of such excess 
     as the low-income and unemployed population of such State 
     bears to the low-income and unemployed population of all the 
     States.
       ``(B) Competitive grants for local and statewide 
     programs.--The Secretary shall use 40 percent of such excess 
     to make grants under subsection (a) on a competitive basis to 
     eligible agencies for local and statewide programs.
       ``(C) Competitive grants for nationwide programs.--The 
     Secretary shall use the remaining 20 percent of such excess 
     to make grants under subsection (a) on a competitive basis to 
     eligible agencies for nationwide programs, including programs 
     benefiting Indians, as defined in section 677, and migrant or 
     seasonal farmworkers.
       ``(3) Eligibility for allotments for statewide programs.--
     To be eligible to receive an allotment under paragraph (1)(A) 
     or (2)(A), an eligible agency shall demonstrate that the 
     proposed program is statewide in scope and represents a 
     comprehensive and coordinated effort to alleviate hunger 
     within the State.
       ``(4) Minimum allotments for statewide programs.--
       ``(A) In general.--From the amounts allotted under 
     paragraphs (1)(A) and (2)(A), the minimum total allotment for 
     each State for each fiscal year shall be--
       ``(i) $15,000 if the total amount appropriated to carry out 
     this section is not less than $7,000,000 but less than 
     $10,000,000;
       ``(ii) $20,000 if the total amount appropriated to carry 
     out this section is not less than $10,000,000 but less than 
     $15,000,000; or
       ``(iii) $30,000 if the total amount appropriated to carry 
     out this section is not less than $15,000,000.
       ``(B) Definition.--In this paragraph, the term `State' does 
     not include Guam, American Samoa, the United States Virgin 
     Islands, the Commonwealth of the Northern Mariana Islands.
       ``(5) Maximum grants.--From funds made available under 
     paragraphs (1)(B) and (2)(B) for any fiscal year, the 
     Secretary may not make grants under subsection (a) to an 
     eligible agency in an aggregate amount exceeding $50,000. 
     From funds made available under paragraph (2)(C) for any 
     fiscal year, the Secretary may not make grants under 
     subsection (a) to an eligible agency in an aggregate amount 
     exceeding $300,000.
       ``(c) Report.--For each fiscal year, the Secretary shall 
     prepare and submit, to the Committee on Education and the 
     Workforce of the House of Representatives and the Committee 
     on Labor and Human Resources of the Senate, a report 
     concerning the grants made under this section. Such report 
     shall include--
       ``(1) a list of grant recipients;
       ``(2) information on the amount of funding awarded to each 
     grant recipient; and
       ``(3) a summary of the activities performed by the grant 
     recipients with funding awarded under this section and a 
     description of the manner in which such activities meet the 
     objectives described in subsection (a).
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 1999 
     through 2003.

     ``SEC. 682. NATIONAL OR REGIONAL PROGRAMS DESIGNED TO PROVIDE 
                   INSTRUCTIONAL ACTIVITIES FOR LOW-INCOME YOUTH.

       ``(a) General Authority.--The Secretary is authorized to 
     make a grant to an eligible service provider to administer 
     national or regional programs to provide instructional 
     activities for low-income youth. In making such a grant, the 
     Secretary shall give priority to eligible service providers 
     that have a demonstrated ability to operate such a program.
       ``(b) Program Requirements.--Any instructional activity 
     carried out by an eligible service provider receiving a grant 
     under this section shall be carried out on the campus of an 
     institution of higher education (as defined in section 
     1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1141(a))) and shall include--
       ``(1) access to the facilities and resources of such an 
     institution;
       ``(2) an initial medical examination and follow-up referral 
     or treatment, without charge, for youth during their 
     participation in such activity;
       ``(3) at least one nutritious meal daily, without charge, 
     for participating youth during each day of participation;
       ``(4) high quality instruction in a variety of sports (that 
     shall include swimming and that may include dance and any 
     other high quality recreational activity) provided by coaches 
     and teachers from institutions of higher education and from 
     elementary and secondary schools (as defined in section 14101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 8801)); and
       ``(5) enrichment instruction and information on matters 
     relating to the well-being of youth, to include educational 
     opportunities and information on study practices, education 
     for the prevention of drug and alcohol abuse, and information 
     on health and nutrition, career opportunities, and family and 
     job responsibilities.
       ``(c) Advisory Committee; Partnerships.--The eligible 
     service provider shall, in each community in which a program 
     is funded under this section--
       ``(1) ensure that--
       ``(A) a community-based advisory committee is established, 
     with representatives from local youth, family, and social 
     service organizations, schools, entities providing park and 
     recreation services, and other community-based organizations 
     serving high-risk youth; or
       ``(B) an existing community-based advisory board, 
     commission, or committee with similar membership is utilized 
     to serve as the committee described in subparagraph (A); and
       ``(2) enter into formal partnerships with youth-serving 
     organizations or other appropriate social service entities in 
     order to link program participants with year-round services 
     in their home communities that support and continue the 
     objectives of this subtitle.
       ``(d) Eligible Providers.--A service provider that is a 
     national private, nonprofit organization, a coalition of such 
     organizations, or a private, nonprofit organization applying 
     jointly with a business concern shall be eligible to apply 
     for a grant under this section if--
       ``(1) the applicant has demonstrated experience in 
     operating a program providing instruction to low-income 
     youth;
       ``(2) the applicant agrees to contribute an amount (in cash 
     or in kind, fairly evaluated) of not less than 25 percent of 
     the amount requested, for the program funded through the 
     grant;
       ``(3) the applicant agrees to use no funds from a grant 
     authorized under this section for administrative expenses; 
     and
       ``(4) the applicant agrees to comply with the regulations 
     or program guidelines promulgated by the Secretary for use of 
     funds made available through the grant.
       ``(e) Application Process.--To be eligible to receive a 
     grant under this section, a service provider shall submit to 
     the Secretary, for approval, an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       ``(f) Promulgation of Regulations or Program Guidelines.--
     The Secretary shall promulgate regulations or program 
     guidelines to ensure funds made available through a grant 
     made

[[Page H9711]]

     under this section are used in accordance with the objectives 
     of this subtitle.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated $15,000,000 for each of fiscal 
     years 1999 through 2003 for grants to carry out this section.

     ``SEC. 683. REFERENCES.

       ``Any reference in any provision of law to the poverty line 
     set forth in section 624 or 625 of the Economic Opportunity 
     Act of 1964 shall be construed to be a reference to the 
     poverty line defined in section 673. Except as otherwise 
     provided, any reference in any provision of law to any 
     community action agency designated under title II of the 
     Economic Opportunity Act of 1964 shall be construed to be a 
     reference to an entity eligible to receive funds under the 
     community services block grant program.''.

     SEC. 202. CONFORMING AMENDMENTS.

       (a) Older Americans Act of 1965.--Section 306(a)(6)(E)(ii) 
     of the Older Americans Act of 1965 (42 U.S.C. 
     3026(a)(6)(E)(ii)) is amended by striking ``section 675(c)(3) 
     of the Community Services Block Grant Act (42 U.S.C. 
     9904(c)(3))'' and inserting ``section 676B of the Community 
     Services Block Grant Act''.
       (b) Community Economic Development Act of 1981.--
       (1) Source of funds.--Section 614 of the Community Economic 
     Development Act of 1981 (42 U.S.C. 9803) is repealed.
       (2) Advisory community investment board.--Section 615(a)(2) 
     of the Community Economic Development Act of 1981 (42 U.S.C. 
     9804(a)(2)) is amended by striking ``through the Office'' and 
     all that follows and inserting ``through an appropriate 
     office.''.
       (c) Human Services Reauthorization Act of 1986.--Section 
     407 of the Human Services Reauthorization Act of 1986 (42 
     U.S.C. 9812a) is amended--
       (1) in subsection (a)--
       (A) by inserting after ``funds available'' the following: 
     ``(before the date of enactment of the Coats Human Services 
     Reauthorization Act of 1998)''; and
       (B) by inserting after ``9910(a))'' the following: ``(as in 
     effect before such date)''; and
       (2) in subsection (b)(2)--
       (A) by inserting after ``funds available'' the following: 
     ``(before the date of enactment of the Coats Human Services 
     Reauthorization Act of 1998)''; and
       (B) by inserting after ``9910(a))'' the following: ``(as in 
     effect before such date)''.
       (d) Anti-Drug Abuse Act of 1988.--Section 3521(c)(2) of the 
     Anti-Drug Abuse Act of 1988 (42 U.S.C. 11841(c)(2)) is 
     amended by striking ``, such as activities authorized by 
     section 681(a)(2)(F) of the Community Services Block Grant 
     Act (42 U.S.C. section 9910(a)(2)(F)),''.
              TITLE III--LOW-INCOME HOME ENERGY ASSISTANCE

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Low-Income Home Energy 
     Assistance Amendments of 1998''.

     SEC. 302. AUTHORIZATION.

       (a) In General.--Section 2602(b) of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended 
     by inserting ``, such sums as may be necessary for each of 
     fiscal years 2000 and 2001, and $2,000,000,000 for each of 
     fiscal years 2002 through 2004'' after ``1995 through 1999''.
       (b) Program Year.--Section 2602(c) of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8621(c)) is amended 
     to read as follows:
       ``(c) Amounts appropriated under this section for any 
     fiscal year for programs and activities under this title 
     shall be made available for obligation in the succeeding 
     fiscal year.''.
       (c) Incentive Program for Leveraging Non-Federal 
     Resources.--Section 2602(d) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8621(d)) is amended--
       (1) by striking ``(d)'' and inserting ``(d)(1)'';
       (2) by striking ``are authorized'' and inserting ``is 
     authorized'';
       (3) by striking ``$50,000,000'' and all that follows and 
     inserting the following: ``$30,000,000 for each of fiscal 
     years 1999 through 2004, except as provided in paragraph 
     (2).''; and
       (4) by adding at the end the following:
       ``(2) For any of fiscal years 1999 through 2004 for which 
     the amount appropriated under subsection (b) is not less than 
     $1,400,000,000, there is authorized to be appropriated 
     $50,000,000 to carry out section 2607A.''.
       (d) Technical Amendments.--Section 2602(e) of the Low-
     Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621(e)) 
     is amended--
       (1) by striking ``are authorized'' and inserting ``is 
     authorized''; and
       (2) by striking ``subsection (g)'' and inserting 
     ``subsection (e) of such section''.

     SEC. 303. DEFINITIONS.

       Section 2603(4) of the Low-Income Home Energy Assistance 
     Act of 1981 (42 U.S.C. 8622(4)) is amended--
       (1) by striking ``the term'' and inserting ``The term''; 
     and
       (2) by striking the semicolon and inserting a period.

     SEC. 304. NATURAL DISASTERS AND OTHER EMERGENCIES.

       (a) Definitions.--Section 2603 of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8622) is amended--
       (1) by redesignating paragraphs (6) through (9) as 
     paragraphs (8) through (11), respectively;
       (2) by inserting before paragraph (8) (as redesignated in 
     paragraph (1)) the following:
       ``(7) The term `natural disaster' means a weather event 
     (relating to cold or hot weather), flood, earthquake, 
     tornado, hurricane, or ice storm, or an event meeting such 
     other criteria as the Secretary, in the discretion of the 
     Secretary, may determine to be appropriate.'';
       (3) by redesignating paragraphs (1) through (5) as 
     paragraphs (2) through (6), respectively; and
       (4) by inserting before paragraph (2) (as redesignated in 
     paragraph (3)) the following:
       ``(1) The term `emergency' means--
       ``(A) a natural disaster;
       ``(B) a significant home energy supply shortage or 
     disruption;
       ``(C) a significant increase in the cost of home energy, as 
     determined by the Secretary;
       ``(D) a significant increase in home energy disconnections 
     reported by a utility, a State regulatory agency, or another 
     agency with necessary data;
       ``(E) a significant increase in participation in a public 
     benefit program such as the food stamp program carried out 
     under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), the 
     national program to provide supplemental security income 
     carried out under title XVI of the Social Security Act (42 
     U.S.C. 1381 et seq.), or the State temporary assistance for 
     needy families program carried out under part A of title IV 
     of the Social Security Act (42 U.S.C. 601 et seq.), as 
     determined by the head of the appropriate Federal agency;
       ``(F) a significant increase in unemployment, layoffs, or 
     the number of households with an individual applying for 
     unemployment benefits, as determined by the Secretary of 
     Labor; or
       ``(G) an event meeting such criteria as the Secretary, in 
     the discretion of the Secretary, may determine to be 
     appropriate.''.
       (b) Considerations.--Section 2604(g) of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8623(g)) is amended 
     by striking the last two sentences and inserting the 
     following: ``In determining whether to make such an allotment 
     to a State, the Secretary shall take into account the extent 
     to which the State was affected by the natural disaster or 
     other emergency involved, the availability to the State of 
     other resources under the program carried out under this 
     title or any other program, and such other factors as the 
     Secretary may find to be relevant. Not later than 30 days 
     after making the determination, but prior to releasing an 
     allotted amount to a State, the Secretary shall notify 
     Congress of the allotments made pursuant to this 
     subsection.''.

     SEC. 305. STATE ALLOTMENTS.

       Section 2604 of the Low-Income Home Energy Assistance Act 
     of 1981 (42 U.S.C. 8623) is amended--
       (1) in subsection (b)(1), by striking ``the Northern 
     Mariana Islands, and the Trust Territory of the Pacific 
     Islands.'' and inserting ``and the Commonwealth of the 
     Northern Mariana Islands.'';
       (2) in subsection (c)(3)(B)(ii), by striking 
     ``application'' and inserting ``applications'';
       (3) by striking subsection (f);
       (4) in the first sentence of subsection (g), by striking 
     ``(a) through (f)'' and inserting ``(a) through (d)''; and
       (5) by redesignating subsection (g) as subsection (e).

     SEC. 306. ADMINISTRATION.

       Section 2605 of the Low-Income Home Energy Assistance Act 
     of 1981 (42 U.S.C. 8624) is amended--
       (1) in subsection (b)--
       (A) in paragraph (9)(A), by striking ``and not transferred 
     pursuant to section 2604(f) for use under another block 
     grant'';
       (B) in paragraph (14), by striking ``; and'' and inserting 
     a semicolon;
       (C) in the matter following paragraph (14), by striking 
     ``The Secretary may not prescribe the manner in which the 
     States will comply with the provisions of this subsection.''; 
     and
       (D) in the matter following paragraph (16), by inserting 
     before ``The Secretary shall issue'' the following: ``The 
     Secretary may not prescribe the manner in which the States 
     will comply with the provisions of this subsection.'';
       (2) in subsection (c)(1)--
       (A) in subparagraph (B), by striking ``States'' and 
     inserting ``State''; and
       (B) in subparagraph (G)(i), by striking ``has'' and 
     inserting ``had''; and
       (3) in paragraphs (1) and (2)(A) of subsection (k) by 
     inserting ``, particularly those low-income households with 
     the lowest incomes that pay a high proportion of household 
     income for home energy'' before the period.

     SEC. 307. PAYMENTS TO STATES.

       Section 2607(b)(2)(B) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8626(b)(2)(B)) is amended--
       (1) in the first sentence, by striking ``and not 
     transferred pursuant to section 2604(f)''; and
       (2) in the second sentence, by striking ``but not 
     transferred by the State''.

     SEC. 308. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE OPTION.

       (a) Evaluation.--The Comptroller General of the United 
     States shall conduct an evaluation of the Residential Energy 
     Assistance Challenge program described in section 2607B of 
     the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 
     8626b).
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall prepare and submit to Congress a report 
     containing--
       (1) the findings resulting from the evaluation described in 
     subsection (a); and
       (2) the State evaluations described in paragraphs (1) and 
     (2) of subsection (b) of such section 2607B.
       (c) Incentive Grants.--Section 2607B(b)(1) of the Low-
     Income Home Energy Assistance Act of 1981 (42 U.S.C. 
     8626b(b)(1)) is amended by striking ``For each of the fiscal 
     years 1996 through 1999'' and inserting ``For each fiscal 
     year''.
       (d) Technical Amendments.--Section 2607B of the Low-Income 
     Home Energy Assistance Act of 1981 (42 U.S.C. 8626b) is 
     amended--
       (1) in subsection (e)(2)--

[[Page H9712]]

       (A) by redesignating subparagraphs (F) through (N) as 
     subparagraphs (E) through (M), respectively; and
       (B) in clause (i) of subparagraph (I) (as redesignated in 
     subparagraph (A)), by striking ``on'' and inserting ``of''; 
     and
       (2) by redesignating subsection (g) as subsection (f).

     SEC. 309. TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE 
                   REVIEWS.

       (a) In General.--Section 2609A(a) of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8628a(a)) is 
     amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``$250,000'' and inserting ``$300,000'';
       (2) by striking ``Secretary--'' and all that follows 
     through ``(1) to make'' and inserting the following: 
     ``Secretary--
       ``(1) to--
       ``(A) make'';
       (3) by striking ``organizations; or'' and all that follows 
     through ``(2) to enter'' and inserting the following: 
     ``organizations; or
       ``(B) enter'';
       (4) by striking the following:
     ``to provide'' and inserting the following:
     ``to provide'';
       (5) by striking ``title.'' and inserting the following: 
     ``title; or
       ``(2) to conduct onsite compliance reviews of programs 
     supported under this title.''; and
       (6) in paragraph (1)(B) (as redesignated in paragraphs (2) 
     and (3))--
       (A) by inserting ``or interagency agreements'' after 
     ``cooperative arrangements''; and
       (B) by inserting ``(including Federal agencies)'' after 
     ``public agencies''.
       (b) Conforming Amendment.--The section heading of section 
     2609A of the Low-Income Home Energy Assistance Act of 1981 
     (42 U.S.C. 8628a) is amended to read as follows:


      ``technical assistance, training, and compliance reviews''.

                   TITLE IV--ASSETS FOR INDEPENDENCE

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Assets for Independence 
     Act''.

     SEC. 402. FINDINGS.

       Congress makes the following findings:
       (1) Economic well-being does not come solely from income, 
     spending, and consumption, but also requires savings, 
     investment, and accumulation of assets because assets can 
     improve economic independence and stability, connect 
     individuals with a viable and hopeful future, stimulate 
     development of human and other capital, and enhance the 
     welfare of offspring.
       (2) Fully \1/2\ of all Americans have either no, 
     negligible, or negative assets available for investment, just 
     as the price of entry to the economic mainstream, the cost of 
     a house, an adequate education, and starting a business, is 
     increasing. Further, the household savings rate of the United 
     States lags far behind other industrial nations, presenting a 
     barrier to economic growth.
       (3) In the current tight fiscal environment, the United 
     States should invest existing resources in high-yield 
     initiatives. There is reason to believe that the financial 
     returns, including increased income, tax revenue, and 
     decreased welfare cash assistance, resulting from individual 
     development accounts will far exceed the cost of investment 
     in those accounts.
       (4) Traditional public assistance programs concentrating on 
     income and consumption have rarely been successful in 
     promoting and supporting the transition to increased economic 
     self-sufficiency. Income-based domestic policy should be 
     complemented with asset-based policy because, while income-
     based policies ensure that consumption needs (including food, 
     child care, rent, clothing, and health care) are met, asset-
     based policies provide the means to achieve greater 
     independence and economic well-being.

     SEC. 403. PURPOSES.

       The purposes of this title are to provide for the 
     establishment of demonstration projects designed to 
     determine--
       (1) the social, civic, psychological, and economic effects 
     of providing to individuals and families with limited means 
     an incentive to accumulate assets by saving a portion of 
     their earned income;
       (2) the extent to which an asset-based policy that promotes 
     saving for postsecondary education, homeownership, 
     and microenterprise development may be used to enable 
     individuals and families with limited means to increase 
     their economic self-sufficiency; and
       (3) the extent to which an asset-based policy stabilizes 
     and improves families and the community in which the families 
     live.

     SEC. 404. DEFINITIONS.

       In this title:
       (1) Applicable period.--The term ``applicable period'' 
     means, with respect to amounts to be paid from a grant made 
     for a project year, the calendar year immediately preceding 
     the calendar year in which the grant is made.
       (2) Eligible individual.--The term ``eligible individual'' 
     means an individual who is selected to participate in a 
     demonstration project by a qualified entity under section 
     409.
       (3) Emergency withdrawal.--The term ``emergency 
     withdrawal'' means a withdrawal by an eligible individual 
     that--
       (A) is a withdrawal of only those funds, or a portion of 
     those funds, deposited by the individual in the individual 
     development account of the individual;
       (B) is permitted by a qualified entity on a case-by-case 
     basis; and
       (C) is made for--
       (i) expenses for medical care or necessary to obtain 
     medical care, for the individual or a spouse or dependent of 
     the individual described in paragraph (8)(D);
       (ii) payments necessary to prevent the eviction of the 
     individual from the residence of the individual, or 
     foreclosure on the mortgage for the principal residence of 
     the individual, as defined in paragraph (8)(B); or
       (iii) payments necessary to enable the individual to meet 
     necessary living expenses following loss of employment.
       (4) Household.--The term ``household'' means all 
     individuals who share use of a dwelling unit as primary 
     quarters for living and eating separate from other 
     individuals.
       (5) Individual development account.--
       (A) In general.--The term ``individual development 
     account'' means a trust created or organized in the United 
     States exclusively for the purpose of paying the qualified 
     expenses of an eligible individual, or enabling the eligible 
     individual to make an emergency withdrawal, but only if the 
     written governing instrument creating the trust contains the 
     following requirements:
       (i) No contribution will be accepted unless the 
     contribution is in cash or by check.
       (ii) The trustee is a federally insured financial 
     institution, or a State insured financial institution if no 
     federally insured financial institution is available.
       (iii) The assets of the trust will be invested in 
     accordance with the direction of the eligible individual 
     after consultation with the qualified entity providing 
     deposits for the individual under section 410.
       (iv) The assets of the trust will not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       (v) Except as provided in clause (vi), any amount in the 
     trust that is attributable to a deposit provided under 
     section 410 may be paid or distributed out of the trust only 
     for the purpose of paying the qualified expenses of the 
     eligible individual, or enabling the eligible individual to 
     make an emergency withdrawal.
       (vi) Any balance in the trust on the day after the date on 
     which the individual for whose benefit the trust is 
     established dies shall be distributed within 30 days of that 
     date as directed by that individual to another individual 
     development account established for the benefit of an 
     eligible individual.
       (B) Custodial accounts.--For purposes of subparagraph (A), 
     a custodial account shall be treated as a trust if the assets 
     of the custodial account are held by a bank (as defined in 
     section 408(n) of the Internal Revenue Code of 1986) or 
     another person who demonstrates, to the satisfaction of the 
     Secretary, that the manner in which such person will 
     administer the custodial account will be consistent with the 
     requirements of this title, and if the custodial account 
     would, except for the fact that it is not a trust, constitute 
     an individual development account described in subparagraph 
     (A). For purposes of this title, in the case of a custodial 
     account treated as a trust by reason of the preceding 
     sentence, the custodian of that custodial account shall be 
     treated as the trustee of the account.
       (6) Project year.--The term ``project year'' means, with 
     respect to a demonstration project, any of the 5 consecutive 
     12-month periods beginning on the date the project is 
     originally authorized to be conducted.
       (7) Qualified entity.--
       (A) In general.--The term ``qualified entity'' means--
       (i) one or more not-for-profit organizations described in 
     section 501(c)(3) of the Internal Revenue Code of 1986 and 
     exempt from taxation under section 501(a) of such Code; or
       (ii) a State or local government agency, or a tribal 
     government, submitting an application under section 405 
     jointly with an organization described in clause (i).
       (B) Rule of construction.--Nothing in this paragraph shall 
     be construed as preventing an organization described in 
     subparagraph (A)(i) from collaborating with a financial 
     institution or for-profit community development corporation 
     to carry out the purposes of this title.
       (8) Qualified expenses.--The term ``qualified expenses'' 
     means one or more of the following, as provided by a 
     qualified entity:
       (A) Postsecondary educational expenses.--Postsecondary 
     educational expenses paid from an individual development 
     account directly to an eligible educational institution. In 
     this subparagraph:
       (i) Postsecondary educational expenses.--The term 
     ``postsecondary educational expenses'' means the following:

       (I) Tuition and fees.--Tuition and fees required for the 
     enrollment or attendance of a student at an eligible 
     educational institution.
       (II) Fees, books, supplies, and equipment.--Fees, books, 
     supplies, and equipment required for courses of instruction 
     at an eligible educational institution.

       (ii) Eligible educational institution.--The term ``eligible 
     educational institution'' means the following:

       (I) Institution of higher education.--An institution 
     described in section 101 or 102 of the Higher Education Act 
     of 1965.
       (II) Postsecondary vocational education school.--An area 
     vocational education school (as defined in subparagraph (C) 
     or (D) of section 521(4) of the Carl D. Perkins Vocational 
     and Applied Technology Education Act (20 U.S.C. 2471(4))) 
     which is in any State (as defined in section 521(33) of such 
     Act), as such sections are in effect on the date of enactment 
     of this title.

       (B) First-home purchase.--Qualified acquisition costs with 
     respect to a principal residence for a qualified first-time 
     homebuyer, if paid from an individual development account 
     directly to the persons to whom the amounts are due. In this 
     subparagraph:
       (i) Principal residence.--The term ``principal residence'' 
     means a main residence, the qualified acquisition costs of 
     which do not exceed 100 percent of the average area purchase 
     price applicable to such residence.
       (ii) Qualified acquisition costs.--The term ``qualified 
     acquisition costs'' means the costs of

[[Page H9713]]

     acquiring, constructing, or reconstructing a residence. The 
     term includes any usual or reasonable settlement, financing, 
     or other closing costs.
       (iii) Qualified first-time homebuyer.--

       (I) In general.--The term ``qualified first-time 
     homebuyer'' means an individual participating in the project 
     involved (and, if married, the individual's spouse) who has 
     no present ownership interest in a principal residence during 
     the 3-year period ending on the date of acquisition of the 
     principal residence to which this subparagraph applies.
       (II) Date of acquisition.--The term ``date of acquisition'' 
     means the date on which a binding contract to acquire, 
     construct, or reconstruct the principal residence to which 
     this subparagraph applies is entered into.

       (C) Business capitalization.--Amounts paid from an 
     individual development account directly to a business 
     capitalization account that is established in a federally 
     insured financial institution (or in a State insured 
     financial institution if no federally insured financial 
     institution is available) and is restricted to use solely for 
     qualified business capitalization expenses. In this 
     subparagraph:
       (i) Qualified business capitalization expenses.--The term 
     ``qualified business capitalization expenses'' means 
     qualified expenditures for the capitalization of a qualified 
     business pursuant to a qualified plan.
       (ii) Qualified expenditures.--The term ``qualified 
     expenditures'' means expenditures included in a qualified 
     plan, including capital, plant, equipment, working capital, 
     and inventory expenses.
       (iii) Qualified business.--The term ``qualified business'' 
     means any business that does not contravene any law or public 
     policy (as determined by the Secretary).
       (iv) Qualified plan.--The term ``qualified plan'' means a 
     business plan, or a plan to use a business asset purchased, 
     which--

       (I) is approved by a financial institution, a 
     microenterprise development organization, or a nonprofit loan 
     fund having demonstrated fiduciary integrity;
       (II) includes a description of services or goods to be 
     sold, a marketing plan, and projected financial statements; 
     and
       (III) may require the eligible individual to obtain the 
     assistance of an experienced entrepreneurial adviser.

       (D) Transfers to idas of family members.--Amounts paid from 
     an individual development account directly into another such 
     account established for the benefit of an eligible individual 
     who is--
       (i) the individual's spouse; or
       (ii) any dependent of the individual with respect to whom 
     the individual is allowed a deduction under section 151 of 
     the Internal Revenue Code of 1986.
       (9) Qualified savings of the individual for the period.--
     The term ``qualified savings of the individual for the 
     period'' means the aggregate of the amounts contributed by an 
     individual to the individual development account of the 
     individual during the period.
       (10) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services, acting through the Director of 
     Community Services.
       (11) Tribal government.--The term ``tribal government'' 
     means a tribal organization, as defined in section 4 of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450b) or a Native Hawaiian organization, as defined in 
     section 9212 of the Native Hawaiian Education Act (20 U.S.C. 
     7912).

     SEC. 405. APPLICATIONS.

       (a) Announcement of Demonstration Projects.--Not later than 
     3 months after the date of enactment of this title, the 
     Secretary shall publicly announce the availability of funding 
     under this title for demonstration projects and shall ensure 
     that applications to conduct the demonstration projects are 
     widely available to qualified entities.
       (b) Submission.--Not later than 6 months after the date of 
     enactment of this title, a qualified entity may submit to the 
     Secretary an application to conduct a demonstration project 
     under this title.
       (c) Criteria.--In considering whether to approve an 
     application to conduct a demonstration project under this 
     title, the Secretary shall assess the following:
       (1) Sufficiency of project.--The degree to which the 
     project described in the application appears likely to aid 
     project participants in achieving economic self-sufficiency 
     through activities requiring one or more qualified expenses.
       (2) Administrative ability.--The experience and ability of 
     the applicant to responsibly administer the project.
       (3) Ability to assist participants.--The experience and 
     ability of the applicant in recruiting, educating, and 
     assisting project participants to increase their economic 
     independence and general well-being through the development 
     of assets.
       (4) Commitment of non-federal funds.--The aggregate amount 
     of direct funds from non-Federal public sector and from 
     private sources that are formally committed to the project as 
     matching contributions.
       (5) Adequacy of plan for providing information for 
     evaluation.--The adequacy of the plan for providing 
     information relevant to an evaluation of the project.
       (6) Other factors.--Such other factors relevant to the 
     purposes of this title as the Secretary may specify.
       (d) Preferences.--In considering an application to conduct 
     a demonstration project under this title, the Secretary shall 
     give preference to an application that--
       (1) demonstrates the willingness and ability to select 
     individuals described in section 408 who are predominantly 
     from households in which a child (or children) is living with 
     the child's biological or adoptive mother or father, or with 
     the child's legal guardian;
       (2) provides a commitment of non-Federal funds with a 
     proportionately greater amount of such funds committed from 
     private sector sources; and
       (3) targets such individuals residing within one or more 
     relatively well-defined neighborhoods or communities 
     (including rural communities) that experience high rates of 
     poverty or unemployment.
       (e) Approval.--Not later than 9 months after the date of 
     enactment of this title, the Secretary shall, on a 
     competitive basis, approve such applications to conduct 
     demonstration projects under this title as the Secretary 
     considers to be appropriate, taking into account the 
     assessments required by subsections (c) and (d). The 
     Secretary shall ensure, to the maximum extent practicable, 
     that the applications that are approved involve a range of 
     communities (both rural and urban) and diverse populations.
       (f) Contracts With Nonprofit Entities.--The Secretary may 
     contract with an entity described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from taxation under 
     section 501(a) of such Code to carry out any responsibility 
     of the Secretary under this section or section 412 if--
       (1) such entity demonstrates the ability to carry out such 
     responsibility; and
       (2) the Secretary can demonstrate that such responsibility 
     would not be carried out by the Secretary at a lower cost.
       (g) Grandfathering of Existing Statewide Programs.--Any 
     statewide individual asset-building program that is carried 
     out in a manner consistent with the purposes of this title, 
     that is established under State law as of the date of 
     enactment of this Act, and that as of such date is operating 
     with an annual State appropriation of not less than 
     $1,000,000 in non-Federal funds, shall be deemed to meet the 
     eligibility requirements of this subtitle, and the entity 
     carrying out the program shall be deemed to be a qualified 
     entity. The Secretary shall consider funding the statewide 
     program as a demonstration project described in this 
     subtitle. In considering the statewide program for funding, 
     the Secretary shall review an application submitted by the 
     entity carrying out such statewide program under this 
     section, notwithstanding the preference requirements listed 
     in subsection (d). Any program requirements under sections 
     407 through 411 that are inconsistent with State statutory 
     requirements in effect on the date of enactment of this Act, 
     governing such statewide program, shall not apply to the 
     program.

     SEC. 406. DEMONSTRATION AUTHORITY; ANNUAL GRANTS.

       (a) Demonstration Authority.--If the Secretary approves an 
     application to conduct a demonstration project under this 
     title, the Secretary shall, not later than 10 months after 
     the date of enactment of this title, authorize the applicant 
     to conduct the project for 5 project years in accordance with 
     the approved application and the requirements of this title.
       (b) Grant Authority.--For each project year of a 
     demonstration project conducted under this title, the 
     Secretary may make a grant to the qualified entity authorized 
     to conduct the project. In making such a grant, the Secretary 
     shall make the grant on the first day of the project year in 
     an amount not to exceed the lesser of--
       (1) the aggregate amount of funds committed as matching 
     contributions from non-Federal public or private sector 
     sources; or
       (2) $1,000,000.

     SEC. 407. RESERVE FUND.

       (a) Establishment.--A qualified entity under this title, 
     other than a State or local government agency or a tribal 
     government, shall establish a Reserve Fund that shall be 
     maintained in accordance with this section.
       (b) Amounts in Reserve Fund.--
       (1) In general.--As soon after receipt as is practicable, a 
     qualified entity shall deposit in the Reserve Fund 
     established under subsection (a)--
       (A) all funds provided to the qualified entity from any 
     public or private source in connection with the demonstration 
     project; and
       (B) the proceeds from any investment made under subsection 
     (c)(2).
       (2) Uniform accounting regulations.--The Secretary shall 
     prescribe regulations with respect to accounting for amounts 
     in the Reserve Fund established under subsection (a).
       (c) Use of Amounts in the Reserve Fund.--
       (1) In general.--A qualified entity shall use the amounts 
     in the Reserve Fund established under subsection (a) to--
       (A) assist participants in the demonstration project in 
     obtaining the skills (including economic literacy, budgeting, 
     credit, and counseling skills) and information necessary to 
     achieve economic self-sufficiency through activities 
     requiring qualified expenses;
       (B) provide deposits in accordance with section 410 for 
     individuals selected by the qualified entity to participate 
     in the demonstration project;
       (C) administer the demonstration project; and
       (D) provide the research organization evaluating the 
     demonstration project under section 414 with such information 
     with respect to the demonstration project as may be required 
     for the evaluation.
       (2) Authority to invest funds.--
       (A) Guidelines.--The Secretary shall establish guidelines 
     for investing amounts in the Reserve Fund established under 
     subsection (a) in a manner that provides an appropriate 
     balance between return, liquidity, and risk.
       (B) Investment.--A qualified entity shall invest the 
     amounts in its Reserve Fund that are not immediately needed 
     to carry out the provisions of paragraph (1), in accordance 
     with the guidelines established under subparagraph (A).

[[Page H9714]]

       (3) Limitation on uses.--Not more than 9.5 percent of the 
     amounts provided to a qualified entity under section 406(b) 
     shall be used by the qualified entity for the purposes 
     described in subparagraphs (A), (C), and (D) of paragraph 
     (1), of which not less than 2 percent of the amounts shall be 
     used by the qualified entity for the purposes described in 
     paragraph (1)(D). If two or more qualified entities are 
     jointly administering a project, no qualified entity shall 
     use more than its proportional share for the purposes 
     described in subparagraphs (A), (C), and (D) of paragraph 
     (1).
       (d) Unused Federal Grant Funds Transferred to the Secretary 
     When Project Terminates.--Notwithstanding subsection (c), 
     upon the termination of any demonstration project authorized 
     under this section, the qualified entity conducting the 
     project shall transfer to the Secretary an amount equal to--
       (1) the amounts in its Reserve Fund at the time of the 
     termination; multiplied by
       (2) a percentage equal to--
       (A) the aggregate amount of grants made to the qualified 
     entity under section 406(b); divided by
       (B) the aggregate amount of all funds provided to the 
     qualified entity from all sources to conduct the project.

     SEC. 408. ELIGIBILITY FOR PARTICIPATION.

       (a) In General.--Any individual who is a member of a 
     household that is eligible for assistance under the State 
     temporary assistance for needy families program established 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.), or that meets each of the following 
     requirements shall be eligible to participate in a 
     demonstration project conducted under this title:
       (1) Income test.--The adjusted gross income of the 
     household does not exceed the earned income amount described 
     in section 32 of the Internal Revenue Code of 1986 (taking 
     into account the size of the household).
       (2) Net worth test.--
       (A) In general.--The net worth of the household, as of the 
     end of the calendar year preceding the determination of 
     eligibility, does not exceed $10,000.
       (B) Determination of net worth.--For purposes of 
     subparagraph (A), the net worth of a household is the amount 
     equal to--
       (i) the aggregate market value of all assets that are owned 
     in whole or in part by any member of the household; minus
       (ii) the obligations or debts of any member of the 
     household.
       (C) Exclusions.--For purposes of determining the net worth 
     of a household, a household's assets shall not be considered 
     to include the primary dwelling unit and one motor vehicle 
     owned by a member of the household.
       (b) Individuals Unable To Complete the Project.--The 
     Secretary shall establish such regulations as are necessary 
     to ensure compliance with this title if an individual 
     participating in the demonstration project moves from the 
     community in which the project is conducted or is otherwise 
     unable to continue participating in that project, including 
     regulations prohibiting future eligibility to participate in 
     any other demonstration project conducted under this title.

     SEC. 409. SELECTION OF INDIVIDUALS TO PARTICIPATE.

       From among the individuals eligible to participate in a 
     demonstration project conducted under this title, each 
     qualified entity shall select the individuals--
       (1) that the qualified entity determines to be best suited 
     to participate; and
       (2) to whom the qualified entity will provide deposits in 
     accordance with section 410.

     SEC. 410. DEPOSITS BY QUALIFIED ENTITIES.

       (a) In General.--Not less than once every 3 months during 
     each project year, each qualified entity under this title 
     shall deposit in the individual development account of each 
     individual participating in the project, or into a parallel 
     account maintained by the qualified entity--
       (1) from the non-Federal funds described in section 
     405(c)(4), a matching contribution of not less than $0.50 and 
     not more than $4 for every $1 of earned income (as defined in 
     section 911(d)(2) of the Internal Revenue Code of 1986) 
     deposited in the account by a project participant during that 
     period;
       (2) from the grant made under section 406(b), an amount 
     equal to the matching contribution made under paragraph (1); 
     and
       (3) any interest that has accrued on amounts deposited 
     under paragraph (1) or (2) on behalf of that individual into 
     the individual development account of the individual or into 
     a parallel account maintained by the qualified entity.
       (b) Limitation on Deposits for an Individual.--Not more 
     than $2,000 from a grant made under section 406(b) shall be 
     provided to any one individual over the course of the 
     demonstration project.
       (c) Limitation on Deposits for a Household.--Not more than 
     $4,000 from a grant made under section 406(b) shall be 
     provided to any one household over the course of the 
     demonstration project.
       (d) Withdrawal of Funds.--The Secretary shall establish 
     such guidelines as may be necessary to ensure that funds held 
     in an individual development account are not withdrawn, 
     except for one or more qualified expenses, or for an 
     emergency withdrawal. Such guidelines shall include a 
     requirement that a responsible official of the qualified 
     entity conducting a project approve a withdrawal from such an 
     account in writing. The guidelines shall provide that no 
     individual may withdraw funds from an individual development 
     account earlier than 6 months after the date on which the 
     individual first deposits funds in the account.
       (e) Reimbursement.--An individual shall reimburse an 
     individual development account for any funds withdrawn from 
     the account for an emergency withdrawal, not later than 12 
     months after the date of the withdrawal. If the individual 
     fails to make the reimbursement, the qualified entity 
     administering the account shall transfer the funds 
     deposited into the account or a parallel account under 
     this section to the Reserve Fund of the qualified entity, 
     and use the funds to benefit other individuals 
     participating in the demonstration project involved.

     SEC. 411. LOCAL CONTROL OVER DEMONSTRATION PROJECTS.

       A qualified entity under this title, other than a State or 
     local government agency or a tribal government, shall, 
     subject to the provisions of section 413, have sole authority 
     over the administration of the project. The Secretary may 
     prescribe only such regulations or guidelines with respect to 
     demonstration projects conducted under this title as are 
     necessary to ensure compliance with the approved applications 
     and the requirements of this title.

     SEC. 412. ANNUAL PROGRESS REPORTS.

       (a) In General.--Each qualified entity under this title 
     shall prepare an annual report on the progress of the 
     demonstration project. Each report shall include both program 
     and participant information and shall specify for the period 
     covered by the report the following information:
       (1) The number and characteristics of individuals making a 
     deposit into an individual development account.
       (2) The amounts in the Reserve Fund established with 
     respect to the project.
       (3) The amounts deposited in the individual development 
     accounts.
       (4) The amounts withdrawn from the individual development 
     accounts and the purposes for which such amounts were 
     withdrawn.
       (5) The balances remaining in the individual development 
     accounts.
       (6) The savings account characteristics (such as threshold 
     amounts and match rates) required to stimulate participation 
     in the demonstration project, and how such characteristics 
     vary among different populations or communities.
       (7) What service configurations of the qualified entity 
     (such as configurations relating to peer support, structured 
     planning exercises, mentoring, and case management) increased 
     the rate and consistency of participation in the 
     demonstration project and how such configurations varied 
     among different populations or communities.
       (8) Such other information as the Secretary may require to 
     evaluate the demonstration project.
       (b) Submission of Reports.--The qualified entity shall 
     submit each report required to be prepared under subsection 
     (a) to--
       (1) the Secretary; and
       (2) the Treasurer (or equivalent official) of the State in 
     which the project is conducted, if the State or a local 
     government or a tribal government committed funds to the 
     demonstration project.
       (c) Timing.--The first report required by subsection (a) 
     shall be submitted not later than 60 days after the end of 
     the calendar year in which the Secretary authorized the 
     qualified entity to conduct the demonstration project, and 
     subsequent reports shall be submitted every 12 months 
     thereafter, until the conclusion of the project.

     SEC. 413. SANCTIONS.

       (a) Authority To Terminate Demonstration Project.--If the 
     Secretary determines that a qualified entity under this title 
     is not operating a demonstration project in accordance with 
     the entity's approved application under section 405 or the 
     requirements of this title (and has not implemented any 
     corrective recommendations directed by the Secretary), the 
     Secretary shall terminate such entity's authority to conduct 
     the demonstration project.
       (b) Actions Required Upon Termination.--If the Secretary 
     terminates the authority to conduct a demonstration project, 
     the Secretary--
       (1) shall suspend the demonstration project;
       (2) shall take control of the Reserve Fund established 
     pursuant to section 407;
       (3) shall make every effort to identify another qualified 
     entity (or entities) willing and able to conduct the project 
     in accordance with the approved application (or, if 
     modification is necessary to incorporate the recommendations, 
     the application as modified) and the requirements of this 
     title;
       (4) shall, if the Secretary identifies an entity (or 
     entities) described in paragraph (3)--
       (A) authorize the entity (or entities) to conduct the 
     project in accordance with the approved application (or, if 
     modification is necessary to incorporate the recommendations, 
     the application as modified) and the requirements of this 
     title;
       (B) transfer to the entity (or entities) control over the 
     Reserve Fund established pursuant to section 407; and
       (C) consider, for purposes of this title--
       (i) such other entity (or entities) to be the qualified 
     entity (or entities) originally authorized to conduct the 
     demonstration project; and
       (ii) the date of such authorization to be the date of the 
     original authorization; and
       (5) if, by the end of the 1-year period beginning on the 
     date of the termination, the Secretary has not found a 
     qualified entity (or entities) described in paragraph (3), 
     shall--
       (A) terminate the project; and
       (B) from the amount remaining in the Reserve Fund 
     established as part of the project, remit to each source that 
     provided funds under section 405(c)(4) to the entity 
     originally authorized to conduct the project, an amount that 
     bears the same ratio to the amount so remaining as the amount 
     provided from the source under section 405(c)(4) bears to the 
     amount provided from all such sources under that section.

[[Page H9715]]

     SEC. 414. EVALUATIONS.

       (a) In General.--Not later than 10 months after the date of 
     enactment of this title, the Secretary shall enter into a 
     contract with an independent research organization to 
     evaluate, the demonstration projects conducted under this 
     title, individually and as a group, including evaluating all 
     qualified entities participating in and sources providing 
     funds for the demonstration projects conducted under this 
     title.
       (b) Factors To Evaluate.--In evaluating any demonstration 
     project conducted under this title, the research organization 
     shall address the following factors:
       (1) The effects of incentives and organizational or 
     institutional support on savings behavior in the 
     demonstration project.
       (2) The savings rates of individuals in the demonstration 
     project based on demographic characteristics including 
     gender, age, family size, race or ethnic background, and 
     income.
       (3) The economic, civic, psychological, and social effects 
     of asset accumulation, and how such effects vary among 
     different populations or communities.
       (4) The effects of individual development accounts on 
     savings rates, homeownership, level of postsecondary 
     education attained, and self-employment, and how such effects 
     vary among different populations or communities.
       (5) The potential financial returns to the Federal 
     Government and to other public sector and private sector 
     investors in individual development accounts over a 5-year 
     and 10-year period of time.
       (6) The lessons to be learned from the demonstration 
     projects conducted under this title and if a permanent 
     program of individual development accounts should be 
     established.
       (7) Such other factors as may be prescribed by the 
     Secretary.
       (c) Methodological Requirements.--In evaluating any 
     demonstration project conducted under this title, the 
     research organization shall--
       (1) for at least one site, use control groups to compare 
     participants with nonparticipants;
       (2) before, during, and after the project, obtain such 
     quantitative data as are necessary to evaluate the project 
     thoroughly; and
       (3) develop a qualitative assessment, derived from sources 
     such as in-depth interviews, of how asset accumulation 
     affects individuals and families.
       (d) Reports by the Secretary.--
       (1) Interim reports.--Not later than 90 days after the end 
     of the calendar year in which the Secretary first authorizes 
     a qualified entity to conduct a demonstration project under 
     this title, and every 12 months thereafter until all 
     demonstration projects conducted under this title are 
     completed, the Secretary shall submit to Congress an interim 
     report setting forth the results of the reports submitted 
     pursuant to section 412(b).
       (2) Final reports.--Not later than 12 months after the 
     conclusion of all demonstration projects conducted under this 
     title, the Secretary shall submit to Congress a final report 
     setting forth the results and findings of all reports and 
     evaluations conducted pursuant to this title.
       (e) Evaluation Expenses.--The Secretary shall expend 2 
     percent of the amount appropriated under section 416 for a 
     fiscal year, to carry out the objectives of this section.

     SEC. 415. TREATMENT OF FUNDS.

       Of the funds deposited in individual development accounts 
     for eligible individuals, only the funds deposited by the 
     individuals (including interest accruing on those funds) may 
     be considered to be the income, assets, or resources of the 
     individuals, for purposes of determining eligibility for, or 
     the amount of assistance furnished under, any Federal or 
     federally assisted program based on need.

     SEC. 416. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     title, $25,000,000 for each of fiscal years 1999, 2000, 2001, 
     2002, and 2003, to remain available until expended.
       And the House agree to the same.
     Bill Goodling,
     Mike Castle,
     Mark Souder,
     Bill Clay,
     Matthew G. Martinez,
                                Managers on the Part of the House.

     Jim Jeffords,
     Dan Coats,
     Judd Gregg,
     Ted Kennedy,
     Chris Dodd,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the House to the bill (S. 2206) to amend the 
     Head Start Act, the Low-Income Home Energy Assistance Act of 
     1981, and the Community Services Block Grant Act to 
     reauthorize and make improvements to those Acts, to establish 
     demonstration projects that provide an opportunity for 
     persons with limited means to accumulate assets, and for 
     other purposes, submit the following joint statement to the 
     House and the Senate in explanation of the effect of the 
     action agreed upon by the managers and recommended in the 
     accompanying conference report:

                          Title I--Head Start


                          Authorization levels

       The Senate bill authorizes Head Start at such sums as may 
     be necessary for FY 1999 through FY 2003.
       The House amendment authorizes Head Start at $4.6 billion 
     in FY 1999 and such sums as may be necessary for FY 2000 
     through FY 2003.
       The Conference Agreement maintains the Senate language.


                        freely associated states

       The Senate bill continues eligibility for the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau).
       The House amendment requires that payments to the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau) be 
     made on a competitive basis based on recommendations by the 
     Pacific Region Educational Laboratory to the Freely 
     Associated States, Guam, American Samoa, and the Northern 
     Mariana Islands and terminates these funds on September 30, 
     2001.
       The Conference Agreement continues eligibility for the 
     Freely Associated States (the Republic of the Marshall 
     Islands, the Federated States of Micronesia and the Republic 
     of Palau) through FY 2001. If the legislation implementing 
     the Compact of Free Association has not been enacted, the 
     conference agreement extends eligibility for the Freely 
     Associated States for an additional year until September 30, 
     2002. Eligibility for the Freely Associated States terminates 
     on September 30, 2002.


                     family literacy demonstration

       The Senate bill does not contain a family literacy 
     demonstration.
       The House amendment sets aside $5 million for up to 100 
     Head Start family literacy demonstration projects across the 
     country. Under the House amendment, 100 Head Start grantees 
     would receive intensive training and technical assistance so 
     that they might become models for replication, in the area of 
     family literacy, for other Head Start programs. The House 
     amendment also requires the Secretary to conduct research and 
     evaluate successful family literacy models.
       The Conference Agreement requires the Secretary to use at 
     least $3 million of the technical assistance set-aside to 
     provide technical assistance to Head Start grantees currently 
     providing family literacy services, in order to improve the 
     quality of family literacy services and for those grantees to 
     serve as family literacy resources to other grantees and 
     service providers who wish to implement family literacy 
     programs. The agreement also requires the Secretary to 
     evaluate the effectiveness and impact of family literacy 
     services in Head Start.


                      quality and expansion ratio

       The Senate bill maintains current law on the use of new 
     funds, money appropriated over the prior year's 
     appropriation. The Senate bill directs the Secretary to 
     reserve 75% of all new funds to be used for expansion 
     purposes and 25% of all new money to be used for quality 
     purposes (increasing salaries and training).
       The House amendment increases the percentage of new funds 
     reserved for quality in the initial years of the 
     authorization and directs the Secretary to reserve 10% of new 
     funds to be used either for quality or expansion purposes. 
     Specifically, the amendment provides 65% for quality, 25% for 
     expansion and 10% for quality or expansion in the first 2 
     years of the authorization; 45% for quality, 45% for 
     expansion and 10% for quality or expansion in FY 2001 and FY 
     2002; and 25% for quality, 65% for expansion and 10% for 
     quality or expansion in the final year of the authorization.
       The Conference Agreement provides the following quality/
     expansion ratios: in FY 1999, 60% for quality, 40% for 
     expansion; in FY 2000, 50% for quality, 50% for expansion, in 
     FY 2001, 47.5% for quality, 52.5% for expansion; in FY 2002 
     35% for quality, 65% for expansion; and in FY 2003, 25% for 
     quality, 75% for expansion. The Conferees believe it is 
     prudent to dedicate additional resources to quality to 
     improve the services to children. Furthermore, the Conferees 
     believe that an initial increase in quality dollars is 
     necessary to assist grantees in meeting the new educational 
     performance standards and professional development 
     requirements.


                              construction

       The Senate bill permits quality money to be used for minor 
     construction and renovation for the purposes of improving 
     facilities necessary to expand the availability or to enhance 
     the quality of Head Start programs.
       The House amendment specifically prohibits quality dollars 
     from being used for construction or renovation, but permits 
     expansion dollars to be used for such purposes.
       The Conference Agreement generally follows the House 
     language. The agreement deletes the reference to minor 
     construction and renovation under both quality and expansion. 
     The Conferees believe grantees should use funds provided 
     under the basic grant to fund minor renovations and 
     construction, rather than using quality or expansion dollars 
     for such purposes. The Conferees encourage the grantees to 
     use funds provided under the basic grant for minor 
     renovations and construction and to reserve quality dollars 
     to increase salaries and training. However,the Conferees 
     recognize that there may be very limited circumstances when 
     local grantees may need to use quality funds for minor 
     renovations and construction in order to comply with health 
     and safety standards. In such cases, the Conferees recognize 
     the Secretary has authority to authorize the use of quality 
     funds for such purposes.


                             Transportation

       The Senate bill deletes the reference to transportation 
     under the quality section.

[[Page H9716]]

       The House amendment is identical to the Senate bill.
       The Conference Agreement follows both the House and Senate 
     language. The Conferees believe that grantees should use 
     their basic grant funds to cover transportation costs. 
     However, the Conferees recognize that under very limited 
     circumstances local grantees may need to use quality dollars 
     to cover transportation in order to enable children to 
     participate in a Head Start program or to ensure that the 
     transportation provided by the Head Start grantees meet 
     safety standards. In such cases, the Conferees recognize the 
     Secretary has authority to authorize the use of quality funds 
     for such purposes.


                             formula change

       The Senate bill maintains the current law formula, which 
     has a 1981 hold harmless with any money above the 1981 
     appropriation allocated to the States based \2/3\ on the 
     number of poor children under the age of 6 and \1/3\ on the 
     number of children under age 18 from Aid for Families with 
     Dependent Children (AFDC) families.
       The House amendment puts in place a 1998 hold harmless. All 
     new money will be allocated to States based on the State's 
     share of children under the age of 5 from families below the 
     poverty line. The Department of Health and Human Services is 
     directed to use the most recent data available on the number 
     of poor children.
       The Conference Agreement adopts the House formula.


                            early head start

       The Senate bill authorizes the following set-aside levels 
     for Early head Start: 7.5% in FY 1999, 8% in FY 2000, 9% in 
     FY 2001, 10% in FY 2002, and 10% in FY 2003.
       The House amendment authorizes the following set-aside 
     levels for Early Head Start: 7.5% in FY 1999, 8% in FY 2000, 
     8.5% in FY 2001, and not less than 8.5% but not more than 10% 
     in FY 2002 and FY 2003. The increased authorizations in FY 
     2002 and FY 2003 are dependent on receipt by the House 
     Committee on Education and the Workforce and the Senate 
     Committee on Labor and Human Resources of a report from 
     the Department of Health and Human Services on the quality 
     and impact of Early Head Start. The House amendment also 
     stipulates that if the Department fails to provide the 
     Committees with a report on Early Head Start, then the 
     authorization levels for FY 2002 and FY 2003 shall remain 
     at 8.5%.
       The Conference Agreement authorizes the following set-aside 
     levels for Early Head Start: 7.5% in FY 1999, 8% in FY 2000, 
     9% in FY 2001, 10% in FY 2002, and 10% in FY 2003. The 
     Conference Agreement stipulates that the Secretary is 
     required to use the portion of FY 2002 Early Head Start 
     funding, in excess of that set-aside in FY 2001, to make 
     necessary quality improvements, if Congress has not received 
     an interim report on the preliminary findings of the Early 
     Head Start impact study in 2001. If the final report contains 
     substantial deficiencies in quality or if the final report is 
     not released in 2002, the Secretary is required to use the 
     portion of FY 2003 Early Head Start funding, in excess of 
     that set-aside in FY 2002, to make necessary quality 
     improvements. The Conference report sets-aside 5-10% of Early 
     Head Start spending to create a training and technical 
     assistance fund to expand and enhance program support at the 
     Federal, regional, and local levels, as delineated in the 
     Senate report.


           governors consultation and designation of agencies

       The Senate bill requires the Secretary to consult with 
     Governors in the designation of Head Start agencies.
       The House amendment requires the Secretary to consult only 
     with Governors of those States that contribute State dollars 
     to Head Start.
       The Conference Agreement maintains the House language.


                          performance measures

       The Senate bill does not contain education performance 
     measures.
       The House amendment contains 4 education performance 
     measures to measure local grantee performance. The measures 
     require grantees to ensure that children: (1) know that 
     letters of the alphabet are a special category of visual 
     graphics that can be individually named; (2) recognize a word 
     as a unit of print; (3) identify at least ten letters of the 
     alphabet; and (4) associate sounds with written words. The 
     House amendment also requires the Secretary to develop and 
     implement additional performance measures by January 1, 1999 
     and permits local grantees to develop their own performance 
     measures.
       The Conference Agreement follows the House amendment, but 
     changes the date by which the Secretary must implement 
     additional performance measures from January 1 to July 1, 
     1999.


                         child support referral

       The Senate bill contains no comparable provision.
       The House amendment requires Head Start grantees to inform 
     custodial parents in single-parent families that participate 
     in Head Start about the availability of child support 
     services, and to refer such individuals to State and local 
     government child support offices.
       The Conference Agreement includes the House provision on 
     child support referral.


                  coordination with elementary schools

       The Senate bill has no comparable language.
       The House amendment requires Head Start programs to 
     coordinate and link its services to the educational services 
     provided by local educational agencies in which Head Start 
     children will enroll.
       The Conference Agreement maintains the House language. The 
     Conferees believe that it is important for a Head Start 
     program to link and coordinate its services with those 
     educational services that will be provided to children once 
     they graduate and enter elementary school. The Conferees 
     believe that the positive educational experiences gained by 
     children in Head Start programs can be built upon when such 
     children enter elementary school and such coordination 
     between Head Start and local educational agencies is 
     essential to accomplishing this goal.


                   designation of head start agencies

       The Senate bill permits for-profit entities to be 
     designated as Head Start grantees. The Senate bill also 
     permits the Secretary (only in cases where the for-profit 
     agency and nonprofit agency submit applications of equivalent 
     quality) to give a priority to the nonprofit agency.
       The House amendment has no comparable language.
       The Conference Agreement follows the Senate bill but also 
     adds the following language: ``In selecting from among 
     qualified applicants for designation as a Head Start agency, 
     the Secretary shall give preference to applicants which have 
     demonstrated capacity in providing comprehensive early 
     childhood services to children and their families.'' The 
     Conferees hope that expanding the universe of organizations 
     eligible to compete to run Head Start programs will result in 
     stronger applications and higher quality services to children 
     and their families.
       As a result of the new educational performance standards 
     and measures, the Conferees expect the Secretary will defund 
     poor performing grantees--those grantees that fail to meet 
     the performance standards or measures. Given that the 
     Secretary will have to designate new agencies, in cases where 
     a Head Start grantee has been defunded or in cases where an 
     area is undeserved, the Conferees urge the Secretary, to 
     place the highest priority on those applicants who have 
     experience in providing quality comprehensive early childhood 
     services.


                            drug counseling

       The Senate bill has no comparable language.
       The House amendment requires Head Start agencies to offer 
     parents of participating children substance abuse counseling 
     (either directly or through referral to local entities) 
     including information on drug-exposed infants and fetal 
     alcohol syndrome.
       The Conference Agreement maintains the House language. The 
     Conferees believe that in encouraging Head Start providers to 
     offer parents of participating children substance abuse 
     counseling, including information on drug exposed infants and 
     fetal alcohol syndrome, parents will be empowered to make 
     better lifestyle decisions that improve the health and safety 
     of their children.


                           income eligibility

       The Senate bill has no comparable language.
       The House amendment permits individual programs to have up 
     to 25% of total enrollment over the poverty level, but 
     stipulates that the income of participating families cannot 
     exceed 140% of the poverty level. Furthermore, the program 
     must document the need for such services from a community 
     needs assessment, and it must show reasonable efforts to 
     recruit children of families with incomes below the poverty 
     level. The House amendment also permits grantees to institute 
     a sliding fee scale, comparable to the sliding fee scale 
     established under the Child Care Development Block Grant, for 
     families above the poverty line.
       The Conference Agreement maintains the Senate position.


                          staff qualifications

       The Senate bill has no comparable language.
       The House amendment requires that the majority of Head 
     Start classroom teachers in each center-based program have an 
     Associate or Bachelor degree in early childhood education by 
     2003. In addition, the House amendment stipulates that 
     programs will have to develop an assessment to be used in 
     hiring or evaluating classroom teachers.
       The Conference Agreement requires that the majority of Head 
     Start classroom teachers nationwide have an Associate or 
     Bachelor degree in either early childhood education or a 
     degree in a field related to early childhood education with 
     experience in teaching preschool children by 2003. The 
     Conference Agreement maintains the House language requiring 
     teacher assessments.

              Title II--The Community Services Block Grant


                           purposes and goals

       The Senate bill adds a new statement of purpose in the 
     Community Services Block Grant Act that stresses: the 
     eradication of poverty, the revitalization of high poverty 
     neighborhoods, and the empowerment of low-income families and 
     individuals to become fully self-sufficient.
       The House amendment generally follows the Senate bill, but 
     stresses a more active role for private, religious, 
     charitable, and neighborhood-based organizations in the 
     provision of services.
       The Conference Agreement merges the provisions of the 
     Senate and House language.

[[Page H9717]]

                             authorization

       The Senate bill provides an authorization for the Community 
     Services Block Grant (CSBG) for 5 years through the year 
     2003. The Senate bill authorizes funding for CSBG at $625 
     million in FY 1999, and such sums as may be necessary for FY 
     2000 through FY 2003.
       The House amendment provides an authorization for the 
     Community Services Block Grant (CSBG) for 5 years through the 
     year 2003. The House amendment authorizes funding for CSBG at 
     $535 million in FY 1999, and such sums as may be necessary 
     for FY 2000 through FY 2003.
       The Conference Agreement provides an authorization for the 
     Community Services Block Grant (CSBG) for 5 years through the 
     year 2003. The Agreement authorizes funding for CSBG at such 
     sums as may be necessary for fiscal years 1999 through 2003.


           reservation for training and technical assistance

       The Senate bill provides not less than \1/2\ of 1% and not 
     more than 1% for training and technical assistance.
       The House amendment provides 1\1/2\% for training and 
     technical assistance, and for other activities to be carried 
     out by the Secretary of the Department of Health and Human 
     Services such as monitoring, evaluation, and corrective 
     action. The House amendment also requires that \1/2\ of such 
     funds be distributed directly to local eligible entities or 
     to statewide organizations whose membership is composed of 
     eligible entities to carry out technical assistance.
       The Conference Agreement follows the House language 
     providing 1\1/2\% for training and technical assistance and 
     other activities to be carried out by the Secretary of the 
     Department of Health and Human Services. The Agreement also 
     requires that \1/2\ of such amount be provided directly to 
     local eligible entities or to statewide or local 
     organizations or associations with demonstrated expertise in 
     providing training to individuals and organizations on 
     methods of effectively addressing the needs of low income 
     families and communities, to carry out technical assistance.


                 reservation for discretionary programs

       The Senate bill sets aside 9% of CSBG funds for 
     discretionary programs.
       The House amendment sets aside ``up to 9%'' of CSBG funds 
     for discretionary programs.
       The Conference Agreement maintains the Senate language, 
     setting aside 9% of CSBG funds for discretionary programs.


                        freely associated states

       The Senate bill continues eligibility for the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau).
       The House amendment requires that payments to the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau) be 
     made on a competitive basis based on recommendations by the 
     Pacific Region Educational Laboratory to the Federated States 
     of Micronesia, Guam, American Samoa, and the Northern Mariana 
     Islands and terminates these funds on September 30, 2001.
       The Conference Agreement returns to current law and 
     continues the ineligibility of the Freely Associated States 
     (the Republic of the Marshall Islands, the Federated States 
     of Micronesia, and the Republic of Palau) for CSBG.


                     allotment of additional funds

       The Senate bill contains no comparable provision.
       The House amendment establishes a new formula for the 
     allotment of CSBG funds that are in excess of funds 
     appropriated in FY 1999.
       The Conference Agreement maintains the Senate language and 
     does not change the formula for the allotment of funds in the 
     CSBG program.


                      state charity tax provision

       The Senate bill has no comparable provision.
       The House amendment allows States to use up to 10% of their 
     State allotment (from their State-held funds) to offset State 
     charity tax credits for the alleviation of poverty.
       The Conference Agreement includes the House State charity 
     tax credit, but specifies that administrative or start-up 
     costs of such a tax credit program may only come from the 
     State's administrative account (limited to up to 5% of the 
     State's CSBG allotment), if CSBG funds are used for such 
     purposes. The Agreement also includes language clarifying 
     that CSBG funds may not be used to offset tax credits for 
     legal services or educational vouchers.


                        ADDITIONAL USES OF FUNDS

       The Senate bill has no comparable provisions.
       The House amendment contains several new allowable uses of 
     funds as described in the State plan, including: literacy 
     (including family literacy) initiatives; youth development 
     initiatives (which may include after-school child care); 
     community policing initiatives; and fatherhood and other 
     initiatives that encourage parental responsibility.
       The Conference Agreement generally follows the House 
     amendment regarding additional uses of funds, and adds 
     effective parenting, public and private grassroots 
     partnerships, and youth intervention initiatives as allowable 
     uses of funds.


                  DESIGNATION OF NEW ELIGIBLE ENTITIES

       The Senate bill provides that if any geographic area in a 
     State is not, or ceases to be served by an eligible entity, 
     the chief executive officer of the State may solicit 
     applications from, and designate as an eligible agency: one 
     or more private non-profit organizations geographically 
     located in the unserved area; or private non-profit 
     organizations (which may include eligible entities) located 
     in an area contiguous to, or within reasonable proximity of, 
     the unserved area that are already providing related services 
     in the unserved area. The State may give priority to existing 
     eligible entities already providing services within the 
     community.
       The House amendment provides that for any geographic area 
     in a State that is not, or ceases to be served by an eligible 
     entity, the chief executive officer of the State may solicit 
     applications and designate as the eligible agency for that 
     area: a private nonprofit eligible entity located in an area 
     contiguous to, or within reasonable proximity of, the 
     unserved area that already provides related services in the 
     unserved area; or another private nonprofit organization 
     geographically located in the unserved area that is capable 
     of providing a broad range of services designed to eliminate 
     poverty and foster self-sufficiency. In any such designation, 
     the organization must be of demonstrated effectiveness in 
     meeting the goals and purposes of the Act. The House 
     amendment also provides that States may give priority to 
     existing eligible entities already providing services within 
     the community.
       The Conference Agreement provides that States may designate 
     as new eligible entities: a private nonprofit organization 
     (which may include an eligible entity) geographically located 
     in the unserved area that is capable of providing a broad 
     range of services designed to eliminate poverty and foster 
     self-sufficiency; or a private nonprofit eligible entity 
     located in an area contiguous to, or within reasonable 
     proximity of, the unserved area that already provides related 
     services in the unserved area. The Agreement retains language 
     from both bills that in any case the organization must be of 
     demonstrated effectiveness in meeting the goals and purposes 
     of the Act. The agreement also retains language in both bills 
     that allows States to give priority to existing eligible 
     entities already providing services within the community. It 
     is the intent of the Conferees that States shall give 
     consideration to using existing, private nonprofit eligible 
     entities to provide CSBG services in unserved areas. 
     Utilizing existing eligible entities will effectively 
     leverage CSBG resources and expertise and ensure continuity 
     in the program.


                           tripartite boards

       The Senate bill strengthens the role of local tripartite 
     boards in the design and implementation of all local CSBG 
     programs whether administered by public or private eligible 
     entities. The bill maintains the same representation 
     requirements for membership on tripartite boards, but 
     requires that all members of such boards reside in the 
     community being served.
       The House amendment generally follows the Senate bill 
     pertaining to the role of tripartite boards. However, the 
     House amendment only requires that members of such boards who 
     represent low-income individuals and families in the 
     neighborhood served, must reside in neighborhood served.
       The Conference Agreement maintains the House language in 
     that the residence requirement pertains only to the 
     individuals on tripartite boards who represent low-income 
     individuals and families in the neighborhoods served. However 
     Conferees strongly encourage that all members of local 
     tripartite boards will reside or have interests (such as the 
     conduct of business) in the neighborhood served or in the 
     broader community.


                             accountability

       The Senate bill requires that the Department of Health and 
     Human Services work with States and local eligible entities 
     to establish the development of a performance measurement 
     system to be used by States and local entities to measure 
     their performance in programs funded through CSBG. This 
     builds on a voluntary performance measurement system begun by 
     States and local entities with the help of the Department of 
     Health and Human Services several years ago called the 
     Results-Oriented Management and Accountability System (ROMA). 
     The bill further requires that each State and eligible entity 
     participate in such a performance measurement system by 
     October 1, 2002.
       The House amendment generally follows the Senate bill with 
     to major exceptions. First, the House amendment clarifies 
     that the role of the Department of Health and Human Services 
     is to facilitate (not establish) the performance measurement 
     system. Second, the House amendment requires that States and 
     local eligible entities must participate in such a 
     performance measurement system by October 1, 2001.
       The Conference Agreement maintains the House language. 
     Conferees see the role of the Department of Health and Human 
     Services as important in facilitating development of the 
     performance measurement system. Conferees expect that such 
     efforts will build on work already begun in development of 
     the Results-Oriented Management and Accountability System 
     (ROMA). Such a performance measurement system is intended to 
     allow States and local communities to determine

[[Page H9718]]

     their own priorities and establish performance objectives 
     accordingly.


                    role of religious organizations

       The Senate bill prescribes the circumstances under which 
     religious organizations may receive grants and contracts 
     under the CSBG program. Specifically, language has been 
     included which provides that faith-based organizations may 
     participate in the CSBG program as long as the program is 
     implemented in a manner consistent with the Establishment 
     Clause of the Constitution. The language further provides 
     that faith-based organizations shall not be required to 
     remove religious art, icons, scripture, or other symbols as a 
     condition of participating in a program funded with CSBG. 
     Faith-based organizations receiving funds under this Act may 
     not use Federal funds for sectarian worship, instruction, or 
     proselytization and must agree to submit to the fiscal 
     accountability requirements of the State, including 
     requirements that CSBG funds be segregated from other funds. 
     Similar language is contained in the House amendment.
       The Senate bill includes several additional provisions, 
     compared to the House amendment, that relate to employment 
     discrimination; the role of intermediate organizations; and a 
     general provision on faith-based character and independence. 
     The employment discrimination provision allows religious 
     providers that provide assistance under CSBG, to require that 
     employees adhere to the religious tenets and teachings of 
     such organization. It also allows religious providers to 
     require employees not to use drugs or alcohol (on or off the 
     job). The Senate bill further provides that intermediate 
     organizations would also be required to give equitable 
     treatment to religious providers. The Senate bill also 
     contains a general provision providing that religious 
     organizations that provide assistance under CSBG shall retain 
     their faith-based character.
       The House amendment generally follows the Senate bill with 
     the exception of the provisions related to employment; the 
     role of intermediate organizations; and the general provision 
     on faith-based character.
       The Conference Agreement generally follows the Senate bill, 
     except for the provision related to employment. The 
     Conference Agreement clarifies that a religious 
     organization's exemption provided under section 702 of the 
     Civil Rights Act of 1964 regarding employment practices shall 
     not be affected by its participation in, or receipt of funds 
     from the Community Services Block Grant.


                   funding termination or reductions

       The Senate bill gives the Secretary up to 60 days to 
     complete a review when a State decertifies or defunds a local 
     eligible entity. The Senate bill contains no comparable 
     provision to the House amendment which allows the Secretary 
     to provide direct assistance to a local eligible entity that 
     has been decertified in violation of the appeal process 
     established in the law.
       The House amendment gives the Secretary up to 120 days to 
     complete a review when a State decertifies or defunds a local 
     eligible entity. The House amendment provides the Secretary 
     with authority to provide direct assistance to a local 
     eligible entity that has been decertified in violation of the 
     appeal process established in the statute.
       The Conference Agreement gives the Secretary up to 90 days 
     to complete a review when a State decertifies or defunds a 
     local eligible entity, upon receipt of all necessary 
     materials from the State. The Agreement generally follows the 
     House amendment regarding the Secretary's authority to 
     provide direct assistance to eligible entities when a 
     State violates the appeal process established in the 
     statute.


                  community food and nutrition program

       The Senate bill authorizes the Community Food and Nutrition 
     Program at $25 million in FY 1999, and such sums through FY 
     2003.
       The House amendment authorizes the Community Food and 
     Nutrition Program at $5 million in FY 1999, and such sums 
     through FY 2003.
       The Conference Agreement authorizes the Community Food and 
     Nutrition Program at such sums in FY 1999 through FY 2003.


                              drug testing

       The Senate bill has no comparable provision.
       The House amendment contains a provision clarifying that 
     States are not prohibited from testing individuals receiving 
     assistance under CSBG for controlled substances, or from 
     sanctioning individuals who test positive for controlled 
     substances.
       The Conference Agreement includes the clarification that 
     States are not prohibited from testing individuals receiving 
     assistance under CSBG for controlled substances. However, the 
     Agreement further stipulates that if States do test CSBG 
     program participants for controlled substances, and such 
     individuals test positive, the State must inform such 
     individuals about appropriate treatment or rehabilitation 
     services, and refer such individuals to such services.


                         child support referral

       The Senate bill contains no comparable provision.
       The House amendment requires local eligible entities to 
     inform custodial parents in single-parent families that 
     participate in CSBG programs about the availability of child 
     support services, and to refer such individuals to State and 
     local government child support offices.
       The Conference Agreement includes the House provision on 
     child support referral.

     Title III--Low Income Home Energy Assistance Program (LIHEAP)


                             authorization

       The Senate bill authorizes LIHEAP for 5 years at $2 billion 
     a year for fiscal years 2000 through 2004.
       The House amendment authorizes LIHEAP for 2 years at $1.1 
     billion (the FY 1998 appropriated level) in FY 2000 and such 
     sums for FY 2001.
       The Conference Agreement authorizes LIHEAP for 5 years. The 
     Agreement provides an authorization of such sums as necessary 
     in FY 2000 and FY 2001, and $2 billion in FY 2002 through FY 
     2004. Fiscal year 1999 continues to be authorized at the $2 
     billion level.


                               Leveraging

       The Senate bill extends the authorization of the leveraging 
     program for 5 years, but caps funding at $30 million until 
     funds reach $1.4 billion, at which time the cap is increased 
     to $50 million.
       The House amendment extends the authorization of the 
     leveraging program for 2 years, at $50 million in both FY 
     2000 and FY 2001.
       The Conference Agreement maintains the Senate language.


                Natural Disasters and Other Emergencies

       The Senate bill and House amendment both include language 
     to clarify the criteria by which the President can release 
     LIHEAP funds during a natural disaster or emergency.
       The Conference Agreement adheres to language on natural 
     disasters and emergencies contained in the Senate report on 
     S. 2206. In determining whether to recommend a release of 
     emergency funds to States, the Conferees intend that the 
     Secretary will take into consideration requests from Members 
     of Congress in making such releases.


     Emphasis on Low-Income Households for Weatherization Services

       The Senate bill contains no comparable provision.
       The House amendment places an emphasis on serving low-
     income households that pay a high proportion of their 
     household income for home energy costs in the allocation of 
     weatherization services.
       The Conference Agreement maintains the House language.


                          Technical Assistance

       The Senate bill sets aside an additional $50,000 for the 
     Secretary of Health and Human Services for technical 
     assistance, training, and on-site compliance reviews.
       The House amendment contains no comparable provision.
       The Conference Agreement maintains the Senate language.


                        freely associated states

       The Senate bill continues eligibility for the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau).
       The House amendment terminates eligibility for the Freely 
     Associated States (the Republic of the Marshall Islands, the 
     Federated States of Micronesia, and the Republic of Palau).
       The Conference Agreement returns to current law and 
     continues the ineligibility of the Freely Associated States 
     (the Republic of the Marshall Islands, the Federated States 
     of Micronesia, and the Republic of Palau) for LIHEAP.

            Title IV--Individual Development Accounts (IDAs)


      designation of idas as a separate title--distinct from csbg

       The Senate bill establishes the IDA demonstration as a 
     separate title, distinct from CSBG.
       The House amendment establishes the IDA demonstration as a 
     chapter in CSBG.
       The Conference Agreement maintains the Senate language and 
     establishes the IDA demonstration as a separate title. 
     Individual Development Accounts (IDAs) are dedicated, matched 
     savings accounts that can be used for purchasing a first 
     home, meeting the costs of postsecondary education, 
     capitalizing a business, or addressing certain defined 
     hardship cases. Under the IDA program, nonprofit 
     organizations or State and local governments enter into 
     partnerships with low-income individuals who deposit a self-
     determined amount from their earned income in the account. 
     The sponsoring organizations match the individual's deposit 
     with funds provided through this demonstration authority and 
     other non-federal sources. This legislation supports the work 
     that States and community based organizations are doing in 
     support of IDAs and other asset-based development strategies. 
     The Conferees believe that IDAs hold great promise as a 
     strategy to enable low-income people and communities to move 
     forward economically, participate in the mainstream economy, 
     and realize their dreams of good jobs, opening their own 
     small businesses, going to college, owning a home, and 
     bequeathing a better future for their children.


                             authorization

       The Senate bill authorizes the IDA demonstration for 5 
     years at $25 million per year.
       The House amendment authorizes the IDA demonstration for 4 
     years at $25 million per year.
       The Conference Agreement maintains the Senate language and 
     authorizes the IDA demonstration for 5 years at $25 million 
     per year.


                             project years

       The Senate bill limits project years for IDA demonstrations 
     to 4 years.

[[Page H9719]]

       The House amendment limits project years for IDA 
     demonstrations to 5 years.
       The Conference Agreement maintains the House language and 
     limits project years for IDA demonstrations to 5 years.


                             grandfathering

       The Senate bill contains no comparable provision.
       The House amendment makes Statewide IDA programs that were 
     established by State statute and funded with State funds in 
     excess of $1 million by the date of enactment of this Act 
     eligible to compete for IDA demonstration grants, and exempts 
     them from certain requirements of this title that are 
     directly in conflict with their previously established 
     programs.
       The Conference Agreement maintains the House language.
     Bill Goodling,
     Mike Castle,
     Mark Souder,
     Bill Clay,
     Matthew G. Martinez,
                                Managers on the Part of the House.

     Jim Jeffords,
     Dan coats,
     Judd Gregg,
     Ted Kennedy,
     Chris Dodd,
     Managers on the Part of the Senate.

                          ____________________