[House Report 105-788]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     105-788
_______________________________________________________________________


 
            COATS HUMAN SERVICES REAUTHORIZATION ACT OF 1998

                                _______
                                

                October 6, 1998.--Ordered to be printed

_______________________________________________________________________


Mr. Goodling, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                         [To accompany S. 2206]

      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-incomechildren 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
                            ``(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 
inappropriateor 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:
            ``(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 precedingfiscal 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'';
                            (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 Startprogram, 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 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'';
            (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 calendaryear 
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--
                    ``(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 theCommittee 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'.

``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 
        programestablished 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 undersection 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 or675B 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 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 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 inpromoting 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--
                    ``(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 onLabor 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 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 ofRepresentatives 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 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 of1990 (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 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 suchcoordination 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 
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)--
                    (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, andmicroenterprise 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 
toanother 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 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).
            (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 
theaccount 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.

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.
      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 than10% 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 
underserved, 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.

                             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 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 
fromthe 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.
      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.

                                
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