[Senate Report 105-256]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 483
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-256
_______________________________________________________________________


 
               HUMAN SERVICES REAUTHORIZATION ACT OF 1998

                                _______
                                

                 July 21, 1998.--Ordered to be printed

_______________________________________________________________________


    Mr. Jeffords, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2206]

    The Committee on Labor and Human Resources, to which was 
referred 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 considered 
the same, reports favorably thereon with an amendment in the 
nature of a substitute and recommends that the bill (as 
amended) do pass.

                                CONTENTS

                                                                   Page
  I. Summary of the bill..............................................1
 II. Background and need for legislation..............................3
III. History of legislation and committee action.....................13
 IV. Explanation of the bill and committee views.....................17
  V. Administration views............................................41
 VI. Cost estimate...................................................43
VII. Application of law to the legislative branch....................48
VIII.Regulatory impact statement.....................................48

 IX. Section-by-section analysis.....................................48
  X. Additional views................................................58
 XI. Changes in existing law.........................................59

                         I. Summary of the Bill

    The Human Services Reauthorization Act of 1998 reauthorizes 
and makes improvements in the Head Start Act, the Community 
Services Block Grant Act, and the Low-Income Home Energy 
Assistance Act of 1981. The legislation also establishes 
demonstration projects that provide an opportunity for persons 
with limited means to accumulate assets.
    Title I of the bill reauthorizes the Head Start Act at such 
sums as may be necessary for fiscal years 1999, 2000, 2001, 
2002, and 2003. The bill contains provisions to further 
strengthen and expand the Head Start program. It improves the 
quality of existing programs by maintaining the 25 percent set-
aside for quality improvements, establishing a major 
programmatic focus on school readiness, and improving 
collaboration with other community-based child care programs. 
The legislation requires the establishment of outcome based 
performance measures, requiring additional and more specific 
educational performance standards. Barriers to collaboration 
are removed and the reauthorization includes increased 
incentives and additional opportunities for early childhood 
care and education collaboration. A national study of the 
impact of Head Start on children and families is authorized. 
Funding for Early Head Start is dramatically increased with 
provisions to insure the quality of programs through the 
establishment of a minimum 5 percent quality set aside within 
the Early Head Start program.
    Title II of the bill reauthorizes the Community Services 
Block Grant at $625 million for fiscal year 1999, and then such 
sums as may be necessary for fiscal years 2000, 2001, 2002, and 
2003. The bill requires each recipient of CSBG funds to 
participate in the performance measurement system established 
by the Secretary of the Department of Health and Human Services 
by October 1, 2001, to measure how CSBG funds are used to 
promote self-sufficiency, family stability, and community 
revitalization. The legislation protects local control by 
requiring public entities to administer their programs through 
a tri-partite board structure or through another mechanism 
designed by the State to ensure low income citizen 
participation in the decision-making,planning and adminstration 
of CSBG programs. Program quality will be improved by requiring on-site 
compliance reviews, enhancing opportunities for training and technical 
assistance where deficiencies are noted and providing opportunities for 
quality improvement plans and corrective action where warranted. The 
bill reauthorizes the Community Economic Development and Rural 
Community Facilities programs. It also creates a new Neighborhood 
Innovation Project to provide grants to neighborhood-based private non-
profit organizations for the development of new approaches to 
overcoming problems which are contributing to community breakdown. The 
National Youth Sports Program and the Community Food and Nutrition 
Program are reauthorized at current funding levels. The legislation 
requires the National Youth Sports grant recipient to 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.
    Title III authorizes the Low Income Home Energy Assistance 
Program at $2 billion for fiscal years 2000 through 2004. In 
addition, it authorizes a $600 million emergency fund for each 
fiscal year and includes new language defining the 
circumstances under which natural disasters and other 
emergencies warrant the release of additional funding. It 
authorizes the leveraging incentive program at $30 million for 
fiscal years 2000 through 2004 and retains language allowing 
States to target the households with the highest energy 
burdens.
    Title IV authorizes a 5-year, $125 million demonstration 
program of Individual Development Accounts for low income 
working families and individuals. Individual development 
Accounts are dedicated, matching savings accounts that can be 
used for purchasing a first home, education, capitalizing a 
business or in certain defined hardship cases. Under the IDA 
program, non-profit organizations or State and local 
governments enter partnerships with low income individuals who 
deposit what he or she can from their earned income in the 
account. The sponsoring organization will match the 
individual's deposit with funds provided by non-federal sources 
which can include local churches, service organizations, 
corporations, foundations, or local governments.

              II. Background and Need for the Legislation

    On June 22, 1998, a bill to reauthorize the Head Start Act, 
the Community Services Block Grant Act, and the Low-Income Home 
Energy Assistance Act of 1981, and to establish the Assets for 
Independence Act was introduced by Senators Coats, Dodd, 
Jeffords and Kennedy. The bill, S. 2206, was referred to the 
Committee on Labor and Human Resources.

                        title i--head start act

    Head Start developed as part of the War on Poverty in 1964, 
and remains one of its most popular efforts. The program 
currently serves 830,000 children through 16,000 centers and 
595 home-based programs. It provides comprehensive educational, 
medical, nutritional, mental health, dental, and social 
services to low-income children and their families in all 50 
states, the District of Columbia, Puerto Rico, and the U.S. 
territories, as well as services for migrant and Native 
American populations. Unlike other Federal social service 
programs that are funded through States, the Department of 
Health and Human Services awards Head Start grants directly to 
local agencies, called grantees, which deliver program 
services. Grantees, estimated at 1,456 in fiscal year 1997, may 
contract with other organizations, called delegate agencies, to 
run all or part of their programs. Grantees had such contracts 
with approximately 517 delegate agencies in fiscal year 1997. 
Grantees and delegate agencies include public and private 
school systems, community action agencies and other private 
nonprofit organizations, local governments, and Indian tribes.
    Since the inception of Head Start nearly 35 years ago, the 
face of poverty has changed dramatically. Single parent familes 
headed by women accounted for about one-third of the poor in 
1966; now they represent more than half of those living in 
poverty. Children have now replaced the elderly as the group 
most likely to be poor. One child in five in the United States 
lives in poverty. Disadvantaged children who are part of a 
racial or ethnic minority group face even harsher realities; 44 
percent of all African American children, and 38 percent of all 
Hispanic children, are poor. Sixty-percent of Head Start 
familes earn less than $9,000 per year. Forty-five percent 
receive benefits under the TANF program.
    As the needs of children and families changed, so has Head 
Start. Head Start was first enacted into law in 1966 as a 
summer program with a budget of $352 million. In 1994, an 
appropriation of $3.3 billion allowed more than 2,000 locally 
run Head Start programs to serve more than 730,000 children and 
their families. Today, the average amount of funds available 
per child in Head Start programs in the 1996-97 program year 
was $5,186 with an average of $4,637 of this amount coming from 
Federal Head Start funds. Total funds per child varied widely 
by program, ranging from $1,081 to $17,029 per child. Before 
using Head Start funds for services, local agencies are 
required by Head Start regulations to identify, secure, and use 
community resources to provide a wide variety of services to 
children and their families.
    By its nature, Head Start requires community input in order 
to be responsive to community needs. Local programs may adapt 
their services to serve Indian tribes or migrant worker 
communities; target homeless children or children of drug-
addicted parents or help familes transitioning off welfare. 
While most Head Start programs are center-based, home-based 
models fulfill the special needs of families in certain 
communities. Today Head Start programs respond to the complex 
needs of familes in myriad ways, from acting as resource and 
referral agencies, to providing parenting and child discipline 
courses, to helping parents improve their self esteem, literacy 
and job skills.
    As researchers and policy makers seek to respond to the 
growing problems of crime, drug dependency, and the cycle of 
poverty, the importance of early and comprehensive services for 
children becomes more clear. Early intervention can improve the 
lives of children. Quality programs pay for themselves for 
reduced reliance on social services and reduced crime and its 
associated costs.
    The Head Start Expansion and Quality Act of 1990 directly 
addressed these needs with a quality set-aside of 25 percent of 
all new funds. Half of these ``quality monies'' were to be 
spent on improving teacher salaries and helping programs 
recruit and retain quality staff. Funds couldalso be spent on 
providing transportation, improving facilities, and expanding staff 
training and development.
    The National Head Start Association reports that the 
quality set-aside continues to have an important impact on 
improving the way Head Start programs across the country 
deliver services to children and their families. Recently a 
U.S. Department of Education study of comparable early 
education and preschool programs for low-income children, found 
that Head Start centers were notable for their consistently 
high quality.
    In 1993, Secretary of Health and Human Services Donna 
Shalala appointed an Advisory Committee on Head Start Quality 
and Expansion to examine closely the Head Start program and to 
make recommendations for the future. The committee noted that 
despite the generally high quality of most programs, some 
continue to have difficulty providing appropriate facilities, 
living wags for staff, and the comprehensive services that are 
critical to meeting family needs. The recommendations of the 
advisory committee focused on three important areas: (1) the 
need to improve quality; (2) the need to expand services; and 
(3) the need to forge partnerships with other community 
providers, including closet coordination with elementary 
schools, State, and locally sponsored programs, cooperating 
with the private sector and linking Head Start with other 
national initiatives.
    The Head Start Act Amendments of 1994 reauthorizes the 
program and made significant strides to implement the advisory 
committee's recommendations. The legislation balanced the need 
to strengthen current services with the need to broaden those 
services and provide more children access to them.
    This 1998 reauthorization builds on that existing framework 
and continues to place an appropriate focus on continued 
program quality and the achievement of important outcomes for 
children and their families.

              title ii--community services block grant act

    The Community Services Block Grant (CSBG) dates back to 
1964, when the Economic Opportunity Act established the War on 
Poverty and authorized the independent Office of Economic 
Opportunity (OEO). One of the most significant OEO programs was 
Community Action, under which a nationwide network of local 
Community Action Agencies (CAAs) was developed. The law 
stipulated that each Community Action Program must provide 
services and activities having a ``measurable and potentially 
major'' impact on alleviating the causes and effects of 
poverty. The law further required that each CAA be governed by 
a tripartite board, composed equally of local elected 
officials; low income people from the community; and local 
business, labor, religious and other community leaders. The 
local boards identify the causes of local poverty problems and 
design services they believe have the greatest potential for 
success in dealing with the problems of poverty.
    In 1975, OEO was renamed the Community Services 
Administration (CSA) and continued to operate as an independent 
agency with its chief function being the administration of the 
nationwide network of CAAs. In 1981, CSA was abolished and 
replaced by the CSBG, to be administered by HHS. When CSA was 
abolished, it was administering nearly 900 CAAs, about 40 local 
Community Development Corporations, and several small 
categorical programs that were typically operated by local 
CAAs.
    The CSBG Act was established in 1981 as a partial response 
to President Reagan's proposal to consolidate CSA with 11 other 
social services programs into a block grant to states. Congress 
rejected this proposal and instead created two new block 
grants--the Social Services Block Grant, under Title XX of the 
Social Security Act; and the CSBG, which consists of activities 
previously administered by CSA. The CSBG Act was enacted as 
part of the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-
35), and has been reauthorized four times--in 1984 under P.L. 
98-558, in 1986 under P.L. 99-425, in 1990 under P.L. 101-501, 
and in 1994 under P.L. 103-252.
    Under the CSBG framework, States have the responsibility of 
providing overall direction to eligible entities for achieving 
programmatic results and ensuring that programs have adopted 
appropriate management and accountability measures.
    Each State designates a State agency to administer the 
block grant. State CSBG administrators subsequently pass 
through 90 percent of the CSBG funds to approximately 1,100 
local service providers in 50 States, the U.S. Territories, the 
District of Columbia and the Commonwealth of Puerto Rico. These 
entities, which include private non-profit CAAs, units of local 
government, migrant and seasonal farm worker organizations, 
Indian Tribes, and limited-purpose agencies, are referred to as 
``eligible entities''. The vase majority of the eligible 
entities are community action agencies (CAAs) which make up 
approximately 90 percent of the entities receiving CSBG funds.
    The broad, overall goal of the 1964 Community Action 
program to assist low-income people to overcome the problems of 
poverty, has not changed. However, the means by which eligible 
entities have pursued this goal have evolved as communities 
face changing local needs and challenges; as the social and 
economic causes of poverty have changed; and as different 
approaches for combating poverty have been tested, refined and 
developed. Under the CSBG, decisions regarding the needs of 
low-income communities and the steps needed to meet their needs 
are made at the local level. There, community action agencies, 
in coordination with other community groups and community-based 
organizations, conduct periodic assessments of community needs, 
inventory available resources, and organize appropriate 
programs and activities.
    While there is no typical CAA--since they must reflect the 
differing needs and priorities of their local community--
activities often conducted by CAAs include:
    Employment services.--Providing on-the-job training and 
direct employment in agency programs, job counseling, skills 
training, placement and referrals.
    Education assistance.--Providing information, referral, 
counseling, and guidance to assist clients in defining 
educational aspirations and opportunities and preventing 
teenagersfrom dropping out of school.
    Income management.--Helping individuals and families 
prepare and implement household budgets and resolve consumer 
credit issues; assisting families in submitting the Earned 
Income Tax Credit and Child Care Credit returns and elderly 
claim medical and other deductions; sponsoring energy 
conservation education and information programs.
    Housing assistance.--Providing information and referral 
services to locate housing; tenant advocacy and home ownership 
assistance; and referrals for transitional housing assistance 
for the homeless.
    Emergency services.--Providing crisis intervention services 
to stabilize low-income individuals in crisis, services to 
homeless individuals and families, mobilization of donations, 
cash assistance/loans, clothes and food pantries.
    Nutrition assistance.--Providing or administering surplus 
food distribution, meals on wheels, congregate meals, nutrition 
education, and advocacy.
    Linkages.--Assessing community needs to facilitate 
increased coordination among programs, facilities and 
resources.
    Self-sufficiency.--Utilizing a comprehensive case 
management approach of support services which promotes, 
empowers and nurtures individuals and families toward self-
sufficiency. This includes an assessment of the issues facing 
the family, a written plan toward self-support created with 
each family, and a comprehensive assortment of services which 
are available to implement the plan.
    Health.--Providing and coordinating general health and 
prenatal care services, ensuring that infants receive required 
vaccinations and screening for serious health problems such as 
tuberculosis and HIV infection, drug or alcohol treatment for 
expectant parents; and transportation to health care facilities 
and doctor's appointments.
    CSBG eligible families include those with incomes below 100 
percent of the poverty guideline, although nearly half of the 
families served by CSBG are estimated to have incomes below 75 
percent of the poverty guideline. Only 26 percent of client 
families are believed to have incomes exceeding the poverty 
guideline and most of these had incomes lower than 125 percent 
of poverty.
    The Community Services Block Grant has been an extremely 
effective tool in giving poor people a voice in the planning, 
design and delivery of programs intended to serve them. This 
has been accomplished through the tripartite boards in which 
one-third of the members are elected representatives of the 
low-income community, one-third are locally elected public 
officials and one third are leaders from the private sector. 
This unique tripartite board structure is fundamental to the 
Community Action concept. It empowers low-income individuals to 
have a voice with other stakeholders in the community in 
identifying and developing an appropriate response to 
particular problems in their communities.

Community economic development

    The Community Economic Development (CED) program was an 
early War on Poverty program authorized by the Economic 
Opportunity Act and administered by Office of Economic 
Opportunity (OEO). The goal of the program, according to its 
original legislation, was to spur the creation of programs in 
which low-income people could participate and improve the 
quality of life in their community. The Community Development 
Corporation (CDC) was the primary vehicle for attaining this 
goal, defined in the law as a nonprofit corporation 
``responsible to residents of the area it serves.'' Using seed 
money from the Federal government and elsewhere, CDCs establish 
various commercial ventures and enterprises designed to create 
employment for area residents and generate income for the 
community.
    Currently, the CED is a competitive, discretionary grant 
program in which funds are awarded to private, nonprofit 
community development corporations for the purpose of promoting 
business and employment opportunities in urban and rural low-
income communities. Community Development Corporations are 
governed by a board consisting of low income residents of the 
community and business and civic leaders which have as a 
principal purpose planning, developing, or managing low income 
housing or community development projects.
    Most CED grants are used to finance commercial real estate 
development projects, including manufacturing and industrial 
facilities, business incubators, community facilities such as 
day care and health care centers, and public facilities. These 
projects generate new jobs and lead to a more stable employment 
and business environment in economically depressed areas.
    Because of the unique nature of this program, there is a 
great demand for CED discretionary funding. In 1996 alone, more 
than 300 applications for CED were submitted, but only about 60 
grants were awarded. CED grants average $300,000 and 
competitive CDC applications must demonstrate their ability to 
leverage private sector investment and create new jobs at a 
competitive cost.
    A recent survey indicates further the success of the 
Community Economic Development program. The survey revealed 
that grantees leveraged or raised almost twice the amount of 
money that they had received in CED grant funds. Grantees 
created 4,223 jobs, or 89 percent of their employment target 
between FY 91 and FY 95. Ninety-four percent of the jobs 
created were filled by low-income and unemployed people or 
people receiving public assistance. The average wage for these 
positions was $8.32 per hour, with wages ranging between $4.75 
to $25 per hour. Grantees created 445 businesses during the 
survey period, or 87 percent of the number that they projected 
they would create. Ninety-nine percent were locally owned; 39 
percent were minority owned and 38 percent were owned by women.

Rural community facilities

    A major obstacle for economic growth in low-income rural 
areas is the lack of community facilities for water or sewer. 
Economic growth, the development of housing and expansion of 
business depends on adequate infrastructure. The Rural 
Facilities Technical Assistance program targets low income 
areas that do not have adequate water and waste disposal 
systems.
    As in the past, grants are made to a network of rural 
development resource centers, which work in the area of rural 
water and sewer improvements, and rural housing development 
agencies, which help package housing loans and grants for low-
income families. Funds are provided to help low income rural 
communities develop the capacity and expertise to establish 
and/or maintain affordable, adequate, and safe water and waste 
water treatment facilities. Programs are run by multi-state, 
regional private non-profit organizations that can provide 
training and technical assistance to small, rural communities 
in meeting their community facility needs.

National youth sports

    The National Youth Sports Program (NYSP) began under the 
old Office of Economic Opportunity (OEO) and is currently 
operated by Office of Community Services as a discretionary 
activity under the CSBG. This national program is sponsored by 
the Federal government in cooperation with the National 
Collegiate Athletic Association (NCAA) and various colleges and 
universities. The purpose is to improve the lives of low-income 
youth (ages 10-16) through sports skill instruction, counseling 
in good health practices, and counseling related to drug and 
alcohol abuse. The program was started 29 years ago and now 
exists at over 185 colleges nationwide. In 1998, there were 
70,000 youth who participated in the program. As administered 
by the NCAA, the NYSP is a summer day camp that operates for 
six weeks on local college or university campuses. The camp 
provides free medical and dental examinations before the camp 
begins. On a daily basis, the participants receive a USDA-
approved meal, 2 hours of sports instruction, and an hour of 
educational activities. The $7 per-day per-child cost of the 
program is paid for by the Federal government, the NCAA, and 
the host school. The program is completely free of charge to 
the participant.

Community food and nutrition

    The Community Food and Nutrition Program (CFNP) was created 
in 1994 to help counteract conditions of hunger and 
malnutrition among the nation's low income population. These 
conditions had been well documented by a team of doctors from 
the Field Foundation in 1967. A more specific purpose of CFNP 
was to provide temporary relief to the hungry and malnourished 
in emergency situations pending other Federal relief or longer 
term solutions to the problem of hunger. CFNP was the successor 
to the Emergency Food and Medical Services Program which was 
added to the Economic Opportunity Act in 1967. In 1981, the 
Omnibus Budget Reconciliation Act terminated the program, but 
Congress authorized a new grant program in 1984.
    The CFNP program provides grants to public and private 
agencies at the local and State level to: (1) coordinate 
existing food assistance resources; (2) assist in identifying 
sponsors of child nutrition programs and initiating new 
programs in under-served and unserved areas; and (3) develop 
innovative approaches at State and local levels to meet the 
nutrition needs of low-income people. Sixty percent of the 
amount appropriated is to be allotted to States for statewide 
programs and 40 percent is awarded on a competitive basis.
    Unfortunately, hunger continues to be a national problem, 
particularly among low-income children. As a recent report by 
the Carnegie Foundation demonstrated, between 1971 and 1991, 
the number of children under 6 increased by less than 10 
percent. During the same period, the number of poor children in 
the same age group increased by more than 60 percent.
    A 1991 report by the Food Research and Action Center 
estimated that approximately 5.5 million American children 
under the age of 12 are hungry. That figure represents one in 
every eight American children. An additional 6 million children 
under age 12 are believed to be at risk for hunger. Childhood 
hunger can have devasting, lifelong effects, particularly on 
the acquisition of critical developmental skills and abilities.
    CFNP has been quite successful at stimulating participation 
by local agencies in Federal food assistance programs and 
coordinating anti-hunger effort in communities. While funding 
for this program has been modest, its results have been 
impressive.

        Title III--Low-Income Home Energy Assistance Act of 1981

    Energ assistance is one of the most critical components of 
the social safety net. The Low-Income Home Energy Assistance 
Program was established in 1980 under the Home Energy 
Assistance Act, part of the Crude Oil Windfall Profit Tax Act 
of 1980 (P.L. 96-223). It was designed to help poor families 
with the costs of heating and cooling their homes, although 
authority for low-income energy assistance can be traced back 
even further, to the Economic Opportunity Act Amendment of 
1974.
    Without energy assistance, many low-income households would 
have to choose between heating and eating or other vital 
necessities. This is especially true during the peak winter 
heating season when energy bills can frequently amount to 30 
percent of a low-income household's income.
    LIHEAP has nurtured a very positive, effective partnership 
between the Federal government, state governments and the 
private sector. By leveraging private dollars to supplement 
federal dollars, LIHEAP has proven that successful partnerships 
can exist between the government, businesses, gas and electric 
utilities and community-based social service organizations.
    LIHEAP was reauthorized as a block grant in the Omnibus 
Reconciliation Act of 1981 (PL 97-35), but the basic design and 
intent of the program remained essentially the same as the 1974 
program. States were given more flexibility to fulfill the 
program's purpose of helping low-income households meet their 
home heating and cooling costs. In addition to providing 
heating and cooling assistance, States had to reserve a 
reasonable amount of their allotment for energycrisis 
intervention and could use up to 15 percent of their LIHEAP allotment 
for weatherization services and energy related home repairs.
    Grants are made to States, the District of Columbia, U.S. 
territories and commonwealths, and Indian tribal organizations. 
Federal requirements are minimal and leave most important 
decisions to grantees.
    The Human Services Reauthorization Act of 1984 (PL 98-588) 
reauthorized the LIHEAP program for fiscal years 1985 and 1986. 
Effective fiscal year 1986, the Act prohibited States from 
establishing income eligibility criteria that are less than 110 
percent of the poverty level. Following its reauthorization in 
1986, program funding began to decline, shrinking to 65 percent 
of its former size. As funding declined, so did the number of 
households served, from 6.8 million in 1987 to 6.2 million in 
1992 to 4.3 million in 1997. The program now only serves 14 
percent of the households eligible to receive assistance. In 
response to the decline in program funding, States limited the 
number of households served and reduced benefits for households 
receiving LIHEAP assistance.
    The most recent changes to LIHEAP were made by the 1994 
Human Services Reauthorization Act (P.L. 103-252). That 
legislation (1) required that benefits and outreach activities 
be targeted to those with the greatest home energy needs and 
costs, including households with young children, frail elderly, 
and disabled persons; (2) stipulated that appropriations for a 
given fiscal year be made in advance, in the previous year's 
appropriations Act, and (3) established a Residential Energy 
Assistance Challenge (REACH) grant program to help reduce 
recipients' home energy costs.
    Fiscal year 1994 data indicates that about 6.1 million 
households received help with their heating costs (the major 
program goal of LIHEAP) through aid in meeting regular heating 
bills or winter crisis assistance; 5,655 million participated 
only in regular heating cost assistance programs; over 860,000 
received both regular and crisis aid; and about 430,000 
received only crisis intervention help. In addition, grantees 
estimate that 110,000 households received cooling aid (and 
approximately 30,000 received summer crisis aid), and 119,000 
benefited from weatherization efforts.
    Currently, LIHEAP recipients are among the poorest families 
in America. Nearly 70 percent of LIHEAP households have an 
annual income of less than $8000. Nearly half of recipient 
households include elderly or handicapped persons. The 
percentage of income paid by the poor for utility bills is 
almost 15 percent of the total household income, almost 4 times 
the percentage paid by other households. LIHEAP benefits, while 
critical, cover only a small portion of low-income households' 
energy costs, less than 30 percent in the vast majority of 
States.
    LIHEAP benefits vary widely. Grantee reports for fiscal 
year 1995 show households receiving average benefits ranging 
from $78 to $414 for regular heating assistance; from $62 to 
$500 for winter crisis aid; from $61 to $158 for cooling 
assistance; and from $35 to $394 for summer crisis payments.
    While fuel oil prices have decreased from the 1970's, it 
should be noted that fuel oil is used as the main heating 
source for only 12 percent of LIHEAP eligible households. HHS 
data indicate that the composite average for all energy fuels 
is higher now than it was when LIHEAP was created.
    The percentage of a household's income used to pay for all 
home energy costs is also an important issue. Some have argued 
that the percentage of earnings that low-income families spend 
on their energy costs is less than it was in the late 1970's. 
According to HHS data, the average residential energy burden 
for individual low-income households is 15.8 percent. While 
that is somewhat lower than the 18.3 percent energy burden of 
1979, it is still a high and unaffordable burden for most low-
income households.

                 Title IV--Assets for Independence Act

    Title IV, the Assets for Independence Act, establishes a 
five year demonstration program to determine the social, civic, 
psychological and economic effects that Individual Development 
Account (IDA) savings accounts can have on low income 
individuals and their families.
    This legislation supports the work that States and 
community-based organizations are doing in support of IDAs and 
other asset- based development strategies. The Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
(P.L. 104-193) authorized States to create Individual 
Development Accounts (IDAs) and 24 States have indicated that 
they will incorporate IDAs into their welfare-to-work plans. In 
addition, more than 40 community-based organizations and a 
dozen States are running or supporting IDA programs.
    In some respects, IDAs are like Individual Retirement 
Accounts for the working poor. IDAs are dedicated savings 
accounts that can be used for purchasing a first home, paying 
for post-secondary education, or capitalizing a business. These 
investments are associated with extremely high rates of return 
that have the potential to bring a new level of economic and 
personal security to families and communities. Participants 
also are able to make emergency withdrawals in limited 
circumstances and must pay back such withdrawals within 12 
months.
    The individual or family deposits whatever dollar amount 
they can save (typically $5 to $20 a month) into the account. 
The sponsoring organization matches that deposit with funds 
provided by local churches and service organizations, 
corporations, foundations, and State or local governments. The 
sponsoring organization determines the ratio at which they will 
match an individual's contribution (not less than $0.50 and not 
more than $4 for every $1).
    The intent of this demonstration program is to encourage 
participants to develop and reinforce strong habits for saving 
money. To assist this, sponsor organizations provide 
participating individuals and families intensive financial 
counseling and counseling to develop investment plans for 
education, home ownership, and entrepreneurship.
    In addition, participating welfare and low-income families 
build assets whose high return on investment has the capacity 
for propelling them into independence and stability. The 
community also benefits from the significant return on 
investment in IDAs: we expect rolls to bereduced, tax receipts 
to increase, employment to increase, and local enterprises and builders 
can expect local businesses to benefit from increased activity. 
Neighborhoods will be rejuvenated as new micro-enterprises and 
increased home renovation and building drive increased employment and 
community development.
    In fact, it is estimated that an investment of $125 million 
in assets building through these individual accounts will 
generate 7,050 new businesses, 68,799 new jobs, $730 million in 
additional earnings, 12,000 new or rehabilitated homes, $287 
million in savings and matching contributions and earnings on 
those accounts, $188 million in increased assets for low-income 
families, 6,600 families removed from welfare rolls, 12,000 
youth graduates from vocational education and college programs, 
20,000 adults obtaining high school, vocational, and college 
degrees.
    IDAs are planned or now available on a small scale across 
the country, including Indiana, Illinois, Virginia, Oregon, 
Iowa, and Vermont. The Assets for Independence Act has been 
developed after a review of numerous, similar, successful 
programs, and most notably one run by the Eastside Community 
Investments community development corporation in Indianapolis, 
Indiana. This legislation incorporates a number of protections 
developed with their assistance and based on their experience.
    To sponsor an IDA demonstration site, on organization must 
secure non-federal matching dollars at least equal to the 
amount of Federal matching dollars they are seeking from HHS. 
Organizations can receive up to $1 million per year in Federal 
matching dollars as part of the IDA demonstration. IDA accounts 
must be maintained at federally-insured financial institutions 
and the sponsor organizations must co-sign any withdrawal of 
funds. Withdrawals are strictly limited to home purchase, 
education, and business capitalization.
    Sponsors who do not operate their programs consistent with 
the Act may be terminated from the grant program. Individuals 
who misuse their IDA funds are penalized.
    The Assets for Independence Act is authorized at $125 
million: $25 million each year from 1999 through 2003.

            III. History of Legislation and Committee Action

    On June 22, 1998, Senators Coats, Dodd, Jeffords and 
Kennedy introduced S. 2206, the Human Services Reauthorization 
Act of 1998, a bill to reauthorize the Head Start program, the 
Community Services Block Grant, the Low Income Home Energy 
Assistance Program, and to authorize the Assets for 
Independence Act. On June 24, 1998 the Committee on Labor and 
Human Resources met in executive session to consider S. 2206. 
Following opening statements, two amendments were offered.
    The first was offered by Senators Warner, Kennedy, Jeffords 
and Dodd to change the name of the legislation from the ``Human 
Services Reauthorization Act of 1998'' to the ``Community 
Opportunities, Accountability, Training and Educational 
Services'' (COATS) Act of 1998.
    The second amendment was offered by Senator Dodd. It 
provided, with respect to the designation of Head Start 
grantees, that ``If the Secretary determines that a non-profit 
and a for profit have submitted applications of equivalent 
quality, the Secretary may give priority to the non-profit.''
    Both amendments were adopted by a unanimous voice vote.
    After the amendments were considered, S. 2206 was voted 
favorably out of the committee by a roll call of 18 yeas and 0 
nays.

Hearings and testimony--summary of witnesses

    On March 26, 1998, the Senate Subcommittee on Children and 
Families and the House Subcommittee on Early Childhood, Youth 
and Families held a Joint Hearing entitled, ``Head Start: It is 
making a Difference? Can It Be Improved?''. The hearing 
provided background informing members on some of the key issues 
of the 1998 reauthorization legislation.
    The committees heard from the Assistant Secretary of the 
Administration for Children and Families, Olivia Golden, who 
oversees Head Start within the Department of Health and Human 
Services. Ms. Golden provided an update on the status and reach 
of Head Start and Early Head Start. In particular, her 
testimony focused on the Department of Health and Human 
Services' implementation of the 1994 Reauthorization, which 
included strong quality measures and accountability standards 
for local Head Start programs. The Administration has used this 
authority to promote continuous improvement and a stronger 
focus on outcomes in local Head Start programs; their efforts 
have included defunding nearly 90 programs. Her testimony 
called for a four-year reauthorization with no major changes 
beyond the administration's recommendation to increase the 
Early Head Start set-aside from the current statutory 5 percent 
to 10 percent by 2002.
    The hearing's second panel included researchers on the 
impact of local Head Start programs. The committee heard from 
Carlotta Joyner for the General Accounting Office. In 
preparation for the reauthorization, the GAO has completed 
several research projects focused on Head Start; Ms. Joyner's 
testimony focused on the GAO's report entitled, ``Head Start: 
Research Provides Little Information on Impact of Current 
Program.'' The GAO examined the extensive body of literature on 
Head Start with a focus on studies providing program impact 
data. The GAO found that this research was limited and suffered 
to some extent from methodological and design weaknesses, 
making it difficult to assess the impact of Head Start. Ms. 
Joyner presented recommendations on how further research could 
be designed to better answer this central question.
    Robert G. St. Pierre from Abt Associations, Inc. testified 
on his study examining the Comprehensive Child Development 
Program (CCDP), which was funded by the Administration on 
Children, Youth and Families and terminated with the beginning 
of Early Head Start. The Abt study found little evidence of 
CCDP producing any important positive effects on participating 
families.
    Mr. St. Pierre concluded that on average, positive changes 
in many areas were observed in the lives of families both in 
CCDP and in the control group that did not receive any CCDP 
services. The Abt study noted the importance of impact research 
and concluded, that ``Instead of being advocates for a 
particular program, we need to be advocates for solving the 
problem. Instead of advocating in the absence of research 
evidence, we need to be intellectually curious about finding 
the best approaches.''
    The committees also heard testimony from Dr. Stanley 
Greenspan, a leading child researcher and pediatrician. Dr. 
Greenspan reviewed the recent research on brain development of 
infants and toddlers and emphasized the importance of meeting 
the needs of these very young children. Dr. Greenspan 
recommended increased funding for Early Head Start, as well as 
an enhanced focus on comprehensive services, quality 
improvement and proper evaluation in the program. Finally, the 
committee heard from E.D. Hirsch, a researcher in education, 
about the importance of emphasizing cognitive thinking in Head 
Start. Dr. Hirsch recommended increasing the standards for Head 
Start in the area and providing adequate support and funding to 
ensure that these goals can be reached by local programs.
    The hearing also included testimony from several witnesses 
who have been directly involved in Head Start. Jean Malachi, 
from Stamford, Connecticut, discussed her and her family's 
involvement in Head Start. Beyond the positive changes she has 
seen in her children because of their participation in Head 
Start, Ms. Malachi also testified about how the program has 
benefitted her personally. She began as a volunteer in the 
program when her child started in Head Start. After further 
training and experience, she joined the staff of the program as 
an assistant teacher, which made it possible for her to move 
from welfare to work. The committees also heard from Elizabeth 
Kares, the Program Director of Head Start in Lee County, 
Florida. Ms. Kares shared her personal experiences with Head 
Start and the families in her program. Ms. Kares sees Head 
Start as a positive force in the lives of these families.
    Finally the committees heard from Sarah Greene, the 
President of the National Head Start Association. Ms. Greene 
cited several studies, as well as personal experiences, that 
demonstrate the enduring success of Head Start. In addition, 
she encouraged modest changes in the program during this year's 
reauthorization. In particular, she expressed her support for a 
focus on seamless service for children and families from birth 
to school age.
    On May 5, 1998, the Senate Subcommittee on Children and 
Families held a hearing entitled, ``The Community Services 
Block Grant: Expanding Opportunities for Community and 
Neighborhood Partnerships.'' The hearing provided members with 
information regarding a number of key aspects of the 1998 
Community Service Block Grant (CSBG) program reauthorization 
effort.
    The subcommittee heard from Director of Office of Community 
Services of the Department of Health and Human Services, Don 
Sykes. Director Sykes conveyed the Administration's hope for a 
four-year reauthorization of the CSBG program. Director Sykes 
then offered a summary of CSBG program accomplishments and 
administrative initiatives. Foremost among these initiatives is 
the ROMA strategy designed to respond to the increasing demands 
for accountability within the CSBG program. ROMA, the Results-
Oriented Management and Accountability program, consists of a 
six-step approach toward increasing the effectiveness and 
accountability of Community Action Agencies (CAAs). The ROMA 
program is designed to provide CAAs with outcome-oriented 
performance measures that still ensure maximum flexibility at 
the local level. Director Sykes testified that the ROMA 
approach should help agencies identify cost-effective 
strategies for reducing gaps in services and greatly increase 
CAA accountability. Although voluntary, 42 States have utilized 
the ROMA program, according to Director Sykes.
    The hearing's second panel included testimony from Evelyn 
Harris, CSBG Director of the Division of Community Services of 
the State of New York. Ms. Harris testified that the CSBG 
program works well for the low-income residents of New York and 
asked for its four-year reauthorization at a funding level of 
$650 million. Ms. Harris also expressed Governor Patiki's 
strong support of the CSBG program. The flexibility of the CSBG 
program is a major key to its success, according to Ms. Harris. 
Flexibility allows the program to react quickly to provide 
emergency services such as occurred this past winter during New 
England's severe ice storm. In addition, Ms. Harris stressed 
the suitability of the CSBG program in assisting welfare 
reform. Again due to its flexibility, the CSBG program is 
particularly well-suited to adapt to the specific needs of 
local communities' welfare reform efforts.
    Gloria Clark, Director of the City of Los Angeles' 
Department of Housing and Neighborhood Services, testified that 
her Community Action Agency (CAA) has used CSBG funds for a 
variety of programs to achieve the empowerment of families in 
poverty through custom-designed methods that fit each specific 
community. Ms. Clark stated that her CAA serves 5,800 families 
by providing them with a continuum of support and family 
development activities until public support is no longer 
needed. In addition, the structure of the CSBG allows the CAA 
to devote funds to both personal and community-wide crises. Ms. 
Clark discussed two specific programs that she was able to 
initiate due to the flexibility of the CSBG: The Mobile Home 
Transitional Housing Program, which provides hours to homeless 
mothers and children and training in saving money, and LA 
Bridges, which works to prevent at-risk teens from joining 
gangs.
    E. Phillip McKain, President of CTE Inc. in Stamford, CT 
outlined the more than 30 programs that CTE provides to 
Stamford's inner city residents. These programs include child 
care,a residential home for unwed teenage mothers, health and 
dental services, and employment and training services. Further, 
Mr. McKain highlighted the creation of a new enterprise zone 
within the Stamford community. The enterprise zone was 
designated by the State legislature, and CTE works closely with 
the Stamford mayor's office to connect low income residents to 
developing businesses in the enterprise zone. To date, CTE has 
placed more than 100 residents in permanent jobs. Mr. McKain 
also spoke of the vital nature of the Low Income Home Energy 
Assistance Program (LIHEAP) that provides heating and energy 
assistance to Connecticut residents and asked for continued and 
increased funding for the program.
    Jerry Rickett, President of the Kentucky Highlands 
Investment Corporation discussed the Community Economic 
Development (CED) program from which his Community Development 
Corporation receives its funds. CED is a unique Federal program 
that provides flexible capital to community organizations to 
finance private business enterprises and community development 
projects. Mr. Rickett stated that no less than 75 percent of 
the jobs created by the CED program must be targeted to low-
income individuals. The most impressive aspect of this program, 
according to Mr. Rickett, is its success in attracting private 
capital to the poorest communities in the country. Grantees 
leveraged or raised almost twice the amount of money that they 
had received in CED grants from other sources from FY91-FY95.
    Finally, the subcommittee heard from a third panel of 
witnesses regarding the participation of faith-based community 
action programs within the CSBG program and Individual 
Development Accounts (IDAs). Robert Woodson, Sr., President of 
the National Center for Neighborhood Enterprise, lent his 
support to efforts to alleviate poverty that promote self-help 
and faith-inspired solutions to the problems of youth crime and 
violence. Mr. Woodson further called for incentive programs 
within CSBG to reward those models of service exceeding 
expectations. Mr. Woodson additionally requested charitable tax 
credits to encourage direct support of effective CSBG 
grassroots programs.
    Additionally Tyrone Parker, President of The Alliance of 
Concerned Men, spoke of his organization's mission to save the 
lives of at-risk youth residing in high-crime areas of 
Washington, DC. Mr. Parker believes that Community Action 
Agencies should use their funds to foster partnerships between 
community-based organizations. Specifically, Mr. Parker 
discussed a program designed to instill respect for law 
enforcement among youth may be wanted for a crime and want to 
accept responsibility for their actions. Operation Freshstart 
is based on coordination among key partners, specifically the 
Metropolitan Police Department and members of the Alliance for 
Concerned Men or the National Center for Neighborhood 
Enterprise. This concept encompasses self-initiated aspects of 
crime suppression, intervention, and prevention. In addition, 
it builds trust in the police that fosters a feeling of mutual 
respect between troubled youth and law enforcement officials.
    Lastly, the subcommittee heard from Robert E. Friedman, 
chairman of the Corporation for Enterprise Development. Mr. 
Friedman discussed the idea and success of Individual 
Development Accounts (IDAs). IDAs are funded through a 
combination of local and state government funds, as well as 
private donations. Mr. Friedman's nonprofit economic 
development firm is currently running a program called the 
``Down payments on the American Dream Policy Demonstration,'' 
which will serve as the first test of the efficacy of IDAs as a 
tool for economic independence. Mr. Friedman supports the 
Assets for Independence Act, introduced by Senators Coats and 
Harkin, that would provide more than $100 million to the 
Department of Health and Human Services over four years to 
support nonprofit, community-based IDA programs in selected 
sites throughout the country through a competitive grant 
process. Raising the economic level of low-income individuals 
throughout the country, according to Mr. Friedman, will benefit 
society on the level of the individual, the family, the 
employer, the neighborhood, and the community.

            IV. Explanation of the Bill and Committee Views

Purpose of Head Start

    Head Start was created in 1964 and built on the premise 
that effective intervention in the lives of children can be 
best accomplished through family and community involvement. 
Fundamental to this notion was that communities should be given 
considerable latitude to develop their own Head Start programs. 
The primary goal of Head Start is to improve the social 
competence of children in low-income families. Because social 
competence involves the interrelatedness of cognitive and 
intellectual development, physical and mental health, 
nutritional needs, and other factors, Head Start programs 
provide a broad array of services determined to be necessary, 
based on an assessment of family need.
    While these services are important, the committee 
understands that to compete in the 21st century, schools expect 
and children deserve to enter school with strong language and 
cognitive skills and with a motivation to learn to read. School 
readiness is therefore an appropriate and important goal of any 
early childhood program. to build this foundation for reading, 
home and preschool settings should provide rich language and 
literacy environments and opportunities that direct children's 
attention to the sound structure of spoken words, and other 
activities that highlight the relationship between print and 
speech.
    While the committee agrees that social competence continues 
to be an important goal of Head Start, we are committed to 
broadening the articulation of that goal to include a primary 
focus on helping low income children achieve school readiness. 
Section 636 of the legislation describes how this new focus 
will be achieved in part through the provision of health, 
education, nutritional, social and other services that are 
determined to be necessary to help children reach this goal.

Funding

    Section 106 of the Act authorizes the Head Start program at 
such sums for fiscal years 1999 through 2003. The committee 
affirms its commitment to serving all eligible families who 
seek Head Start Services and has authorized such sums as may be 
necessary to enhance program quality and expand Head Start 
services for these purposes.

Funding for U.S. territories

    At the time Project Head Start was initiated in 1965, the 
United States was administering the United Nations Trusteeship 
of the Pacific Islands (Micronesia), a strategic region that 
had been placed under the jurisdiction of the UN Security 
Council after World War II. As Trustee, the United States was 
responsible not only for the security of this vast region, but 
also to foster the social, political and economic advancement 
of its island inhabitants. It was not long until Untied States 
officials charged with carrying out this responsibility saw 
that the Head Start program would be ideal for addressing the 
basic educational needs of many Micronesian children. Thus, the 
Head Start program was extended to the Trust Territory in the 
late 1960's. Ever since then it has been one of the 
mostsuccessful social programs supported by the United States in 
Micronesia
    In 1986, the Trusteeship was terminated, but the United 
States and the newly-formed Micronesian countries, Palau, the 
Republic of the Marshall Islands and the Federated States of 
Micronesia, south to preserve and extend indefinitely the ties 
of friendship and mutual self-interest that had been 
established amoung them. This was achieved through the Compacts 
of Free Association (P.L. 99-239).
    The Head Start program is not mentioned in the Compacts, 
but in view of the continuing relationships and the continuing 
need, Congress, after 1986, replaced the reference in the Head 
Start Act to the Trust Territory, with references to the Freely 
Associated States.
    The Committee has included the Freely Associated States in 
this year's reauthorization as in the past so that Head Start 
services may continue to be provided to the more than 6,000 
children in these Territories. We are informed that Department 
of Health and Human Services reviews of these programs confirm 
that they meet the same standards required of all Head Start 
programs.

Migrants and seasonal Head Start services

    The committee has included a number of provisions to 
improve the access to Head Start services by children of 
migrant and seasonal farm workers. Migrant Head Start program 
offer Head Start services to migrant farm worker families 
during the peak agricultural months (May to October). These 
programs serve children 0 to 5 years of age, 5 days per week 
with full day services, allowing families to work extended 
hours as needed by their employers.
    In the June 11, 1998, hearing before the Employment and 
Training Subcommittee, Barbara Mainster, Executive Director of 
Redlands Christian Migrant Association, discussed Migrant Head 
Start, Head Start and other child care programs, and stated 
that funding for these programs also ``helps children prepare 
for success in school, allows employers to have a better work 
force, and helps the economy.''
    A migrant family that stays in a given community longer 
than 24 months is considered a ``seasonal'' farm worker family 
and, therefore, is no longer eligible to participate in Migrant 
Head Start. This happens even if the family continues in 
agricultural labor and continues to live and work alongside 
other migrant farm worker families who are eligible for Migrant 
Head Start services.
    Children of migrant farm worker families who stay in a 
community longer than 24 months may be eligible for the regular 
Head Start program. However, traditional Head Start, for the 
most part, serves only 3- and 4-year-olds and children attend 
the program 3 to 4 days per week for 3 to 4 hours per day. 
Additionally, most Head Start program do not operate during the 
summer months.
    The committee is aware that while less than 50 percent of 
children eligible for the regular Head Start program receive 
services, only about 10 percent of children eligible for 
Migrant Head Start actually participate in the program. In 
addition, while overall Head Start spending has more than 
doubled--from approximately $1.6 billion in FY 1990 to almost 
$3.9 billion in FY 1997--spending for the Migrant Head Start 
program has increased by more than half, going from 
approximately $85 million in FY 1990 to $154 million in FY 
1997.
    To help close the gap between the number of migrant 
children eligible for services and those who actually receive 
services, the committee has authorized the Secretary of Health 
and Human Services to consult with appropriate resources to 
determine the precise need and demand for migrant and seasonal 
programs each year. Due to the constantly changing nature of 
the agricultural labor market, the committee bill expands the 
eligibility for Head Start to include the children of eligible 
seasonal farm workers, and clarifies at all appropriate points 
in the Act that services are to be made available to both 
``migrant and seasonal'' families.
    The committee wants to make clear that the Secretary of 
Health and Human Services is authorized to provide Head Start 
services for the children of eligible seasonal farm workers 
only after determining that there is an adequate level of such 
services available at the local level for the children of 
eligible migrant farm workers. In making such a determination, 
the Secretary should consider a grantee community assessment.
    The committee has also included language to increase the 
amount of funds reserved for Indians and Migrant Head Start 
program in Section 640 from the FY 1994 level to the FY 1998 
level. The law reserves 13 percent of the funds available for 
Head Start for the activities authorized in section 640, which 
includes services for farm workers, Native Americans, disabled 
children, certain trust territories, and technical assistance. 
The committee notes that the 13 percent reserved for section 
640 should be viewed as a floor on funding for these 
activities, not a ceiling.
    The committee has also included language authorizing the 
Secretary of Health and Human Services, after taking into 
account adjustments for inflation for all Head Start programs, 
to allocate a portion of the remaining additional funds, if 
any, for the activities specified under section 640. These 
funds may be used to provide for an increase in funding for 
Head Start services for migrant and seasonal farm workers, if 
the Secretary has determined that such an increase is 
warranted.

Quality improvement

    Quality programs contribute significantly to children's 
development. There is growing recognition that participation in 
high quality early children education and care program are 
important indicators of later school success and of children's 
later success in life. This is due in part to the fact that 
these programs impact children precisely at the point when 
children's development is rapid, dramatic, and multi-
dimensional.
    The 1994 reauthorization placed a significant emphasis on 
program quality. In the years since that reauthorization, and 
for the first time in 30 years, close to 100 poor quality 
programs were closed and marginal centers put on probation and 
received technical assistance to improve the quality of care. 
After more than two decades, the programs's performance 
standards have been revised to reflect new knowledge and best 
practices. The committee continues to be very supportive and 
committed to maintaining and further improving the quality of 
the Head Start program.

Disability training

    The committee believes there may be a need for additional 
training of Head Start personnel regarding early screening, 
assessment and identification of possible developmental delays 
in Head Start children. Research has demonstrated the 
correlation between factors such as poverty, low birth weight, 
very young parents, and developmental delays. The committee is 
concerned that some Head Start children who could benefit from 
early intervention and special education services are not being 
identified at the earliest possible time. As a result,some Head 
Start children may not be receiving the necessary services and 
supports they need to prevent to prevent or correct development 
deficiencies. Head Start Performance Standards require grantees 
to have an interagency agreement with local education agencies 
describing collaborative efforts to assure that Head Start 
children with disabilities receive the special education and 
related services called for in a child's Individualized 
Education Program (IEP). The committee encourages interagency 
agreements to include opportunities for coordinated training in 
the identification of early developmental delays. Such training 
should be conducted in consultation and collaboration with the 
Local Education Agency (LEA), the State's Lead agency for the 
program for infants and toddlers with disabilities and other 
special education programs.

On site inspections

    Head Start uses several processes to assess and enforce 
local Head Start agencies' compliance with program regulations. 
On-site inspections, conducted at least once during each 3-year 
period, are the main enforcement mechanism. The committee is 
aware that both ACF regional staff and outside researchers have 
raised concerns about the consistency of on-site inspections. 
In 1993, a study prepared under contracted for ACF noted wide 
variation among regions in the number of OSPRI items for which 
grantees were judged as out of compliance. A study in 1996 by 
the same contractor also identified ensuring consistency in 
interpreting inspection results as a major challenge for Head 
Start. The committee is concerned that inconsistent inspections 
could lead to uneven treatment of grantees as well as vast 
inconsistencies in program quality. The committee urges the 
Secretary to provide additional guidance, training and 
technical assistance as necessary to narrow the differences in 
the conduct and interpretation of the OSPRI reviews.

Financial audit reports

    In addition to conducting on-site inspections, regional ACF 
staff also monitor grantees' compliance with regulations by 
annually reviewing their financial audit reports. Auditors may 
select and review samples of financial transactions to 
determine whether a grantee has followed established procedures 
and program regulations. If a grantee administers more than one 
Federal grant--as is often the case with large nonprofit 
agencies, school districts, and municipalities--relatively 
small grants may not be reviewed in much detail.
    In addition to a lack of detail, financial audit reports 
may not provide timely information for monitoring current 
grantee operations. Grantees have nine months to submit 
financial audit reports for any given year. It may take several 
additional months before officials in the HHS Office of 
Inspector General review the audit report, summarize the 
findings and submit the findings to the appropriate regional 
officials. Grantees that are classified as ``high risk'' do not 
face termination of their funding unless they are also 
classified as deficient, which usually involves an on-site 
inspection. As a result, ACF may wait up to three years until 
the next regularly-scheduled triennial inspection before it 
classifies a high-risk grantee as deficient and requires it to 
develop a quality improvement plan and face possible 
termination from the program.
    The committee is very concerned about this process and 
encourages the Secretary to adopt additional measures that 
would permit an annual review of grantee financial status.

Collaboration

    Head Start has a long history of providing comprehensive 
child development and support services to young children and 
families with incomes at or below the poverty level. However, 
in recent years, States have begun to expand their own early 
childhood development initiatives in part as a response to 
welfare reform. With so many different early childhood programs 
providing services to the same target population, some States 
have endeavored to improve coordination and collaboration among 
the programs. The goal is to create a system that is more 
responsive to the needs of working parents, and that supports 
opportunities for children to participate in high-quality 
programs that involve communities in the planning and 
implementation of service delivery.
    Already authorized in law, Head Start collaboration 
projects have an unlimited potential for improving services to 
needy children and their families. Existing law states that the 
Head Start community should be involved in developing these 
collaboration projects. Unfortunately,access to the planning 
process on the part of the Head Start community historically 
has been limited, despite the general agreement that much can 
be learned from the Head Start experience, not only in 
providing comprehensive services, but also in educating policy 
makers and the public about the need to invest in young 
children and their families.
    Despite a number of federal and state initiatives 
integrating early care and education services for young 
children, significant barriers to these collaborative efforts 
remain. Federal, State, and local officials must be encouraged 
to work together where possible to create a common vision 
across early care and education programs. This vision should 
focus on the development of the child, parental involvement in 
early childhood education, and support for the work effort of 
families.
    Another barrier to collaboration is the difficulty of 
combining the funding streams of the various early childhood 
programs in a way that is acceptable to auditors and 
administrators of the various programs. The National Conference 
of State Legislatures reported in 1995 that the following 
states used their own funds to supplement Head Start: Alaska, 
Connecticut, District of Columbia, Florida, Hawaii, Illinois, 
Maine, Massachusetts, Minnesota, New Hampshire, North Carolina, 
Ohio, Rhode Island, Washington, and Wisconsin. In addition, at 
least 38 States operate their own State preschool programs.
    Early childhood programs also vary in their eligibility 
requirements. While Head Start requires that at least 90 
percent of children enrolled in the program must be from 
families with incomes at or below the poverty level. 
Eligibility for subsidized early childhood development programs 
varieswidely by program and by state, though most subsidies are 
used by families below poverty.
    Head Start, and many school-based early childhood programs, 
are not allowed to charge parents a fee for participation. In 
contrast, most subsidized child care programs use a sliding-fee 
scale based on the parents' ability to pay. In integrated 
service models that provide both Head Start and child care and 
operate on a tight budget, the inability to charge parent fees 
for child care can be problematic.
    Early childhood programs also vary in their governance 
structures. More efforts are needed to involve a broad range of 
entities, including State Head Start Associations and local 
Head Start programs, in these collaborations.
    The committee commends the work thus far of the 
Administration for Children, Youth, and Families in trying to 
send a strong message to both individual grantees and regional 
offices about the importance of collaboration, but we believe 
statutory changes, and in particular Federal incentives, are 
necessary to ensure that this happens. Section 107(D) provides 
that the Secretary make supplemental grants to States that (in 
consultation with their State Head Start Association), develop 
statewide, regional, or local unified plans for early childhood 
education and child care.
    The committee has also included language requiring the 
Secretary to review, on an ongoing basis, evidence of barriers 
to effective collaboration between Head Start programs and 
other Federal child care and early childhood education programs 
and resources; develop initiatives, including providing 
additional training and technical assistance and making 
regulatory changes, in necessary cases, to eliminate barriers 
to the collaboration; and develop a mechanism to resolve 
administrative and programmatic conflicts between such programs 
that would be a barrier to the provision of unified services.
    The committee further believes that states should have an 
opportunity to provide direct input on decisions about funding 
new grantees, or refunding or expanding existing grantees. To 
ensure that Head Start programs are an integral part of the 
larger early care and education systems, States should have an 
opportunity to provide direct input on decisions about funding 
new grantees or refunding or expanding existing grantees. The 
committee has included such language in section 108.
    The committee believes it is essential to safeguard the 
health and safety of children enrolled in Head Start programs 
and facilities and has added language to ensure that Head Start 
grantees comply with State health and safety laws of general 
applicability to child care programs as well as with Federal 
Head Start requirements. Programs or facilities found to be in 
violation of such State laws should be provided an opportunity 
to correct such violations in an expeditious manner. The 
committee does not intend that such state policies pre-empt 
Federal laws and regulations applicable to Head Start grantees, 
but rather that they compliment Federal law and regulation 
where appropriate.
    Additionally, the committee has eliminated barriers to 
collaboration, such as restrictions on charging for services on 
a sliding-fee scale for blended or merged full-day, full-year 
programs, regulatory requirements pertaining to recruitment 
which may prevent some families transitioning off welfare from 
being eligible for Head Start services, and barriers to 
families that are slightly over income who received a prior 
year's service, from being subsequently disqualified. The 
committee has also included language requiring the Secretary to 
develop a mechanism whereby administrative rules and 
regulations which are identified as barriers to effective 
collaboration, can be addressed.
    Finally the committee would like to further encourage Head 
Start grantees to collaborate with the programs under the 
Individuals with Disabilities Education Act that serve children 
with disabilities between the ages of birth and 5 years. More 
than 186,000 infants and toddlers (birth to age 2) are served 
by IDEA's early intervention program, and more than 560,000 
preschoolers (ages 3 to 5 years) are served by IDEA's preschool 
program. The 1997 IDEA Amendments enhanced Head Start and IDEA 
collaboration in several ways. For example, Head Start is now a 
participant on the IDEA state interagency coordinating 
councils. Similarly, Head Start collaboration grants must 
ensure Head Start collaboration with IDEA's programs for young 
children with disabilities.

Early Head Start expansion and quality

    Infants and toddlers have different needs and those 
operating programs serving very young children and their 
families require a different knowledge base and different skill 
sets from providers of services for 3- and 4-year olds. If we 
are to maximize the effectiveness of this investment, the 
committee believes that appropriate training and technical 
assistance is essential at every level. It is for this reason 
that the committee has created a special training and technical 
assistance fund to expand and enhance the existing program's 
support at the Federal, regional, and grantee level.
    The committee has included new requirements in section 114 
for training and technical assistance of not less than 5 
percent and not more than 10 percent of the funding available 
for the EHS. The committee intends that these funds be used to 
(1) support a national training and technical assistance system 
for providers of Early Head Start, (2) provide ongoing training 
and technical assistance for regional and program staff charged 
with monitoring and overseeing the administration of the early 
head start program as well as for existing recipients of 
grants, and (3) support for professional development and 
personnel enhancement activities, including funds to pay 
salaries, and for recruitment and retention of qualified staff 
with an appropriate level of education and experience.
    First and foremost, the committee believes that the Early 
Head Start Program should be implemental and monitored, at the 
Federal level, by a full-time Early Head Start program director 
with education and expertise in the area of early childhood 
service delivery. In addition, the committee believes that the 
regional office staff who are intricately involved in 
management of this program, also should have the specialized 
knowledge needed. To that end, the committee encourages the 
Secretary to designate in each regional office, an infant and 
toddler specialist with a degree and demonstrated competence in 
the area of infant and toddler development.
    In delivering training and technical assistance, the 
committee believes that the efforts should be preventative 
rather than corrective in nature. To the extent feasible, a 
peer-based effort that takes advantage of model existing 
programs to demonstrate effective implementation may prove 
useful. In keeping with this proactive strategy, the committee 
believes that the Department should, to themaximum extent 
practicable, monitor grantees annually. In particular, the committee 
feels strongly that comprehensive technical assistance visits to each 
new grantee in the first year of implementation can help to ensure that 
programs get off to a solid start and prevent later difficulties.
    Finally, as in the overall Head Start program and perhaps 
most critical here, the committee believes that Early Head 
Start Programs should recruit staff with the specialized 
expertise needed to provide quality services to infants, 
toddlers and their families. In addition, existing staff should 
be encouraged to continually enhance their skills. These funds 
should be used as incentives for this purpose.

Regular Head Start expansion grants

    The need for early education and child care beyond the home 
has increased dramatically in the last 30 years due to changes 
in family structure, increasing numbers of mothers working 
outside the home, and the demand for preschool education. The 
proportion of children under age 6 in single parent households 
has also increased. Welfare reform legislation (TANF), passed 
in 1996, may further intensify families' needs for full-day, 
full-year programs. Under TANF, States must place 25 percent of 
adults receiving TANF benefits in work and work-related 
activities in fiscal year 1997 to avoid financial penalties. 
The required participation rate rises to 50 percent in fiscal 
year 2002. Head Start's own data show that about 38 percent of 
Head Start families needed full-day, full-year child care 
services in 1997.
    This legislation reaffirms the committee's commitment to 
expanding the Head Start program. Currently, fewer than 40 
percent of eligible 3- and 4-year old children are served by 
the program. However, while the committee is committed to 
seeing Head Start serve additional children, we are equally 
concerned that Head Start continues to be predominantly a part-
day, part-year program. Local programs should continue to ask 
themselves fundamental questions about how they will operate in 
an environment in which more parents are working.
    The committee notes that while some programs have received 
State or other funds to ``wrap around'' Head Start and extend 
the hours of care, this funding is often limited and difficult 
to obtain. The committee recognizes that some children may be 
prevented from attending Head Start because their parents' work 
or school schedules require them to be in full-day, full-year 
programs.
    The committee is aware that many local Head Start agencies 
have developed a wide range of successful approaches to working 
with local child care centers, family child care providers and 
child care funding streams to maximize the quality and quantity 
of services provided to Head Start families. In these 
partnerships, Head Start staff and resources complement child 
care funding and services, so that children and families 
receive the full range of Head Start services in a full-day, 
full-year form. The committee is encouraged that the Head Start 
Bureau, in awarding expansion grants in 1997, recognized this 
need for full-day, full-year services, and gave special 
priority for those services. The committee has included 
language in the legislation continuing that policy and making 
it a statutory priority for expansion grants.

Designation of Head Start agencies

    Expanding the universe of organizations eligible to compete 
to run Head Start programs is an important step in the effort 
for continued improvement in Head Start programs. Yet, under 
the Head Start Act, only public or private nonprofit agencies 
are eligible to compete for Head Start funding. There is no 
justification for continuing to limit provider participation in 
Head Start based simply on the tax status of the entity. In an 
open, competitive environment, all providers, both for-profits 
and not-for-profits, must offer quality programs, instruction 
and care to be awarded a grant. Additionally, with the changes 
included in the 1994 reauthorization and in this year's bill, 
all grant recipients will be subject to rigorous assessment 
through outcome based performance measures.
    Recent studies specifically in the area of child care and 
development have shown no difference in the quality of care 
provided by for-profit versus not-for-profit child care 
centers. In fact, despite philosophical opposition on the part 
of many human service professionals, for profits have become 
successful and apparently very satisfactory providers of child 
welfare services.
    Many Federal and State programs already have recognized the 
role of for-profit programs. For example:
    Under the Child Care and Development Block Grant (CCDBG), 
federal law does not restrict assistance to a particular type 
of provider. Child care benefits under the CCDBG are provided 
to eligible families, either in the form of vouchers or 
certificates that parents may use to purchase child care, or 
through grants or contracts to eligible providers, to purchase 
slots on behalf of eligible families.
    Under the Child and Adult Care Food Program (CACFP), for 
profit child care centers can participate if they meet minimum 
standards for enrolling lower-income children. A pilot project 
is operating in Iowa and Kentucky that has more liberal rules 
governing for-profit centers' participation in the CACFP. In 
addition, the Social Services Block Grant (SSBG) is used by 
most States to support child care, and there are no provisions 
in the Federal statute restricting the ability of for-profit 
organizations to receive Federal SSBG funds.
    Under welfare reform legislation enacted in 1996 (P.L. 104-
193), the Federal foster care program authorized under Title 
IV-E of the Social Security Act was amended to allow for-profit 
providers to participate. Specifically, the definition of 
``child care institution'' was revised to include private for-
profit institutions. Previously, the definition had been 
limited to private non-profit and public institutions although 
for-profit agencies were used extensively for service delivery 
with non-federal funds.
    In addition, the State of Georgia, which initiated 
universal preschool education in 1995, included both for profit 
and non-profit centers. All centers have to meet State 
educational standards. The committee is also aware that in the 
State of Ohio for-profit providers already provides services 
for Head Start, and have done so effectively.
    The committee has therefore included new authority for the 
Secretary to designate for-profitorganizations as Head Start 
grantees. For-profit grantees would be subject to all Head Start 
requirements, including local governance structure, parental 
involvement, quality standards and focus on recruiting and serving the 
most disadvantage children and families. The Committee adopted an 
amendment by Senator Dodd clarifying that the Secretary may give 
priority to non-profit organizations when applications from for-and 
non-profit organizations are equivalent in quality and scope of 
services. It is the expectation of the committee that the Secretary 
will continue to carefully monitor all grantees with particular focus 
on recruitment and enrollment of the most vulnerable children; staff 
training, benefits, and compensation; implementation of local, 
independent parent governance structures; and the provision of 
comprehensive services as needed

Head Start performance standards

    As a national laboratory for early childhood development, 
Head Start has always been concerned with the quality of its 
programs and its effects on children and families. Since 1975, 
Head Start has focused on the quality of services provided and 
has assessed quality through ``process'' indicators, such as 
the number of teachers with early education degrees or Child 
Development Credentials. These indicators have been measured 
primarily through compliance with the Head Start Performance 
Standards using the On-Site Program Review Instrument (OSPRI) 
once every three years. Process indicators will continue to be 
important to Head Start because of the belief that the quality 
and quantity of services provided are inextricably linked to 
the effects of the program.
    In 1995, Head Start joined efforts throughout the Federal 
Government to develop performance measures to promote 
accountability through the assessment of program quality and 
outcomes. These performance measures will help Head Start 
change its focus from ``process'' to ``outcomes'' and toward 
results-oriented evaluation in accordance with the Government 
Performance and Results Act of 1993 (P.L. 103-620), the 
recommendations of the 1993 Advisory Committee on Head Start 
Quality and Expansion and the mandate of section 641A(b) of the 
1994 Reauthorization of the Head Start Act.
    The performance measures developed in response to enhanced 
Federal focus will provide methods and procedures for assessing 
annually and over longer periods, the quality and effectiveness 
of programs operated by Head Start agencies.
    The Department has developed the FACES survey to collect 
information at the national level about program impact. At the 
local level however, HHS does not require individual Head Start 
agencies to demonstrate that they have achieved program 
outcomes. They are only held accountable for achieving the 
objectives linked specifically to activities, such as providing 
a developmentally appropriate educational environment.
    While the performance standards establish a minimally 
acceptable level of services, they do not directly measure 
program quality or effectiveness. Head Start's performance 
measures, on the other hand, which provide a measure of program 
quality and effectiveness, have not generally been applied to 
local grantees; rather, they have been used to gauge a national 
picture of Head Start program quality. The committee has 
included a provision requiring the current national performance 
measures to be applied locally and specifically, to be applied 
as part of the monitoring and triennial compliance review.
    Additionally, the committee is directing the Secretary to 
develop additional performance measures to assess the 
educational achievement of children in Head Start. Current 
objectives in Head Start include a goal that children 
demonstrate: (1) improved emergent literacy, numeracy, and 
language skills; (2) improved general cognitive skills; and (3) 
improved positive attitudes toward learning.
    Section 109 instructs the Secretary to develop additional 
educational performance standards and measures to ensure the 
school readiness of children participating in a Head Start 
program, on completion of the Head Start program and prior to 
entering school. The committee intends that these performance 
standards ensure that Head Start children at a minimum (1) 
develop phonemic, print and numeracy awareness, (2) understand 
and use oral language to communicate needs, wants and thoughts, 
(3) understand and use increasingly complex and varied 
vocabulary, (4) develop and demonstrate an appreciation of 
books and (5) in the case non-English background children, 
progress toward acquisition of the English language. The 
committee intends this list to be illustrative, but not 
exhaustive. Additional specified performance standards are 
encouraged to be developed at the local level in consultation 
with current elementary school readiness expectations and best 
practices.
    In 1994, the committee recognized the need for an equitable 
process which allowed Head Start programs an opportunity to 
address quality deficiencies, but which terminated programs 
that could not meet minimum requirements. It is the intent of 
the committee that these additional performance measures, as 
well as others which have been or may be developed, be applied 
as part of that quality determination, and that continued 
failure to meet those minimal competencies be grounds for 
corrective action and potential termination.
    The committee recognizes the need for program continuity 
and stability within communities but also for high quality in 
programs which potentially affect our most vulnerable children. 
We are supportive of continued eligibility for the best 
performers, but urge the Secretary not to renew grants, without 
competition, where deficiencies have been noted and remain 
unaddressed, and where programs continue to lag behind in 
outcome-based performance measures.

Eligibility

    Head Start is authorized to serve children at any age 
before the age of compulsory school attendance; however, most 
children enter the program at age 4. In the 1996-97 program 
year, most children were either 3 (31 percent) or 4 (63 
percent) years old. Most spend only one year in the Head Start 
program.
    Historically, the committee has recognized that providing 
services to children for more than one year may be important in 
improving outcomes for children and serving community needs. In 
1994, the committee added language clarifying that Head Start 
programs shall be permitted to provide more than a single year 
of services. The committee wishes to reaffirm that commitment 
and to further indicate its support for multiple years of 
service by instructing local grantees to give a priority to 
children who have received a prior year in Head Start but who 
are now over income.

Staff qualifications

    Head Start programs are operating in a highly competitive 
job market due to the Nation's economic strength. Head Start 
employs over 145,000 dedicated staff members to provide the 
comprehensive array of social services which comprise the Head 
Start program. The quality of Head Start programs is dependent 
upon staff quality, and staff development continues to be a 
high priority of this committee.
    Programs must be able to attract and retain qualified staff 
despite competition for skilled workers from a wide range of 
industries beyond child development and educational service 
areas. To develop and retain the qualified work force needed to 
ensure Head Start program quality, the committee maintains its 
strong commitment to the 25 percent quality improvement set-
aside and to providing competitive wages to all Head Start 
staff, and particularly teachers. The committee is aware that 
despite the flexibility in the current set-aside, many Head 
Start staff continue to be paid less than adequate wages, 
$17,437 for teachers and $11,351 for teacher's aids.
    The committee recognizes that a well-designed classroom 
reading program delivered by a competent teacher is vital for 
later reading proficiencies and school readiness. Head Start 
teachers must be equipped with an understanding of how literacy 
develops the children and how parental and classroom 
instruction and involvement can optimize that development. 
Teachers need professional development that spans their 
training and carriers to address reading instruction needs.
    While the committee recognizes the importance of post-
secondary degrees, we also recognize that teachers, in 
particular need to be able to demonstrate specific competencies 
that include (1) planning and implementing learning experiences 
that advance the intellectual and physical development of 
children and their school readiness, (2) establishing and 
maintaining a safe, healthy learning environment, (3) 
supporting the social and emotional development of children, 
and (4) encouraging the involvement of the families of children 
in Head Start and the development of relationships between 
children and their families.
    The Department of Health and Human Services reports that 90 
percent of all Head Start teachers have met the statutory 
requirement for professional credentials. Of 36,256 teachers, 
18,082 have a CDA credential, 10,134 have a 2- or 4-year degree 
in elementary education, 2,134 have a state preschool 
certificate and 2,176 have a certificate or degree in a related 
field. The committee encourages the Secretary to continue her 
work in this area and toward the goal that every Head Start 
classroom have a teacher with the statutorily mandated 
credential.
    Because this goal is so important, the committees has 
included language limiting situations in which the Secretary 
may grant a 180 day waiver of the professional credential 
requirement to situations in which the grantee can demonstrate 
that they have pursued but been unsuccessful at recruiting a 
qualified applicant with the credentials required under the 
Act. Under the new provisions, waivers may only be granted to 
when an agency can demonstrate that it has unsuccessfully 
attempted to recruit an individual who has a credential, 
certificate or degree described in the Act and that said 
individual is enrolled in a program that grants such a 
credential, certificate or degree and will receive such a 
credential, certificate or degree not later than 180 days after 
beginning employment as a teacher with such agency.
    The committee is supportive of efforts to promote programs 
which provide student loan forgiveness for child care 
professionals who pursue post-secondary degrees in early 
childhood development and use those degrees to better serve 
children in a child care or Head Start setting. The committee 
supports efforts to enhance program quality by encouraging the 
educational enhancement of early childhood teachers and other 
staff.

Transition

    It is no surprise that the highest quality Head Start 
programs can not inoculate children against the disadvantages 
of poverty. Many parents, educators and political leaders have 
now come to recognize the critical nature of the transition 
from Head Start to public school.
    The committee recognizes that transition activities are a 
partnership in which the Head Start and local education 
agencies must cooperate; therefore compatible transition 
requirements are outlined both in the Head Start statute and in 
the Elementary and Secondary Education Act.
    Previously, the committee provided a set-aside to fund 31 
demonstration projects designed to identify and replicate best 
practices for extending a Head Start-like model of 
comprehensive services into kindergarten and the first three 
grades of elementary school, thereby facilitating the 
transition of Head Start children into their local school 
systems. Based on the success of this initiative, two 
Information Memos sharing project results were disseminated to 
all Head Start grantees. In addition, three training guides 
have been developed and numerous training opportunities made 
available to assist grantees in incorporating best practices 
identified by this effort.
    These demonstration projects were discontinued in FY 1996 
consistent with the terms of their original awards. Because the 
committee feels strongly about the continuation of the 
transition activities which have been demonstrated to be 
effective and should not be an integral part of every Head 
Start program, we have continued this set aside specifically 
for transition activities of all grantees.
    The committee commends the administration's efforts to 
foster an environment in which transition activities are 
integrated into program operations in a manner similar to each 
of the other vital services provided to families. It is the 
committee's intent that those efforts continue and that 
grantees are provided continued training and technical 
assistance to make that goal a reality.

National impact study and other comparative studies of Head Start 
        effectiveness

    Since its inception more than 30 years ago, Head Start has 
served over 16 million children at a total cost of more than 
$38 billion. Annual funding for the program has grown 
substantially in recent years--from $1.5 billion to almost $4 
billion between fiscal year 1990 and 1997.Although Head Start 
has long enjoyed both congressional and public support, opinions about 
the program's impact have been somewhat divided.
    In 1997, the General Accounting Office reported the results 
of their work on identifying what existing studies suggest 
about Head Start's impact. After locating and screening 600 
studies and consulting with many early childhood researchers 
and officials at the Head Start Bureau, GAO identified only 22 
studies that met relevant criteria.
    Of these 22 studies, many had individual methodological and 
design weaknesses, such as noncomparability of comparison 
groups, which raised questions about the usefulness of the 
findings. The noncomparability of children in comparison groups 
limits the ability to assess Head Start's impact. Without 
comparable groups, outcomes could be mistakenly attributed to 
Head Start participation, when in fact, these outcomes were 
really caused by other factors related to differences in the 
comparison groups.
    According to the GAO and other researchers, no matter how 
extensive the efforts to document the equivalency of groups 
formed in other ways, the groups' equivalency will remain 
uncertain. If the groups are not equivalent, outcomes 
attributed to Head Start will be in doubt. For example, a 
recent evaluation of the Comprehensive Child Development 
Program found positive change in participating families. The 
study compared participants with comparable nonparticipants, 
and researchers discovered that nonparticipating families had 
positive changes similar to the participating families. They 
concluded, therefore, that the positive changes could not be 
attributed to program participation. Researchers in this study 
had confidence that the groups were comparable because 
participants had been randomly assigned to groups.
    The committee shares the concerns raised by the GAO. While 
the committee applauds the Department's recent FACES initiative 
which will provide a limited focus on outcomes, we are 
concerned that HHS's plans for additional future research 
efforts do not include plans for a research study or set of 
studies that will definitively compare the outcomes achieved by 
Head Start children and their families with those achieved by 
similar non-Head Start children and families.
    The committee has therefore included several provisions in 
section 117 to improve the data available on the Head Start 
program and its effectiveness. The committee is aware that 
impact research can be costly and time consuming but notes that 
the Federal Government has made a considerable financial 
investment in the Head Start program which is ample 
justification for an additional investment in high quality 
research on the program's impact.

                title II--community services block grant

Purposes

    The committee has added a new purposes statement to make 
clear that the core mission of the block grant funded 
activities is to serve low income neighborhoods and local 
communities by providing community based programs through 
private non-profit, eligible entities controlled by local 
residents. The committee has found that the CSBG program and 
the eligible entities that deliver its programs remain 
effective and important elements of the Federal effort to fight 
poverty.

Designation of eligible entities

    The committee recognizes the important and historical work 
of Community Action Agencies and has included language in the 
bill grand-fathering in current eligible entities and 
specifying how other qualified organizations in the State 
should be selected to serve as an eligible entity for unserved 
areas.
    Section 676A provides that if any geographic area in the 
State is not, or ceases to be, served by an eligible entity, 
the chief executive officer of the State shall solicit 
applications from private nonprofit organizations 
geographically located in the unserved area and private non-
profit 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 the existing eligible entities 
already providing services within the community.
    The committee supports the concept of competition as a 
welcomed catalyst for innovation, service refinement, and 
enhanced program quality. We recognize that for many social 
programs, competition will require a fundamental shift in the 
way we think of social services from the traditional view of 
programs as a custodianship to an actual partnership with the 
poor and with entities that have traditionally served the poor. 
Expanding opportunities for these partnerships is one goal of 
this legislation; evaluating the effectiveness of programs 
based on outcomes is another.
    The committee bill also reflects a concern that local 
agency boards actually represent the area that they are 
serving. We have therefore included a requirement that the 
entity in the contiguous area agree to add additional members 
to the board to ensure adequate representation in each of the 
three required categories and to ensure that with respect to 
low income representation, those members of the board reside in 
the neighborhood served.
    If no qualified private, nonprofit organization is 
identified, Subsection c of section 676A authorizes the chief 
executive officer of the State to designate an appropriate 
political subdivision of the State to serve as an eligible 
entity for the area. However, the political subdivision, in 
order to be qualified, must agree to administer its CSBG funded 
programs through a tripartite board or another mechanism 
specified by the state in which low-income individuals are able 
to actively participate in decision-making, planning and 
implementation of programs funded by the block grant.
    Currently, 96 percent of the counties in the United States 
are served by CSBG eligible entities. New agencies are created 
to cover areas in States which have never had an eligible 
entity, and replacement agencies are selected to replace an 
entity which has voluntarily ceased operating or been 
terminated. New or replacement entities may be either public or 
private. However, the committee is concerned about the apparent 
trend toward public entities, that is, local governments 
serving as the eligible entity. For example, the number of 
public agencies increased from 129 to 1985 to 230 in 1995.
    Of particular concern to the committee is how the 
representation and involvement of the low-income sector may 
differ in private non-profit agencies compared to that of a 
public agency. While all CSBG eligible entities are required to 
have tripartite boards, low-income individuals on private 
governing boards are specifically given a role as policy 
makers. To the contrary, the current CSBG statute contains no 
specific requirements concerning the role of the boards on 
public agencies. On those boards, low-income representatives 
may serve in an advisory capacity rather than the policy-making 
capacity.
    The committee believes that while many public Community 
Action Agencies provide excellent services to poor communities 
and serve a meaningful advocacy role in many areas, they do 
have limitations. Local public agencies may not be able to 
perform the same level of advocacy as non-profit community-
based organizations on certain public policy issues, 
particularly those involving local government programs and 
decisions.
    The committee has also prohibited States from 
discriminating against faith based organizations because of 
their religious character and has specifically included them in 
the definitions of private nonprofit organizations eligible to 
compete for grants under CSBG. Section 679 of the Act 
prescribes the circumstances under which such an entity may 
receive grants and contracts under this program. Specifically, 
language has been included which provides that faith-based 
organizations may participate in the CSBG 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.
    The committee notes the historical importance of such 
entities in serving the poor and believes that they should not 
be precluded from participating in this program either as a 
grant recipient or as an eligible entity. This language is 
consistent with provisions included in the 1996 Welfare Reform 
legislation.

Elimination of the 7 percent cap on new entities

    The committee has eliminated a provision in current law 
limiting the amount of funding that may be provided to newly 
designated eligible entities to 7 percent of each State's 
allotment. The committee believes that competition in the 
delivery of social service programs is very healthy and that 
artificial caps on competition stifle program improvement and 
the identification of new entities which may be better 
performers.

Discretionary funds and transfer authority

    The Community Services Block Grant permits States to spend 
up to 10 percent of its CSBG allocation at its discretion, with 
no more than 5 percent (or $55,000, whichever is greater) 
allowed for the State's administrative costs. In FY 1995, 
States awarded $19,122,443 in discretionary funds to a broad 
range of programs and activities. Thirty States (including 
Puerto Rico) used the full percent of their CSBG allocation for 
discretionary purposes. Twelve States (including the District 
of Columbia) used between 1 and 4 percent of their CSBG 
allocation for discretionary purposes, with the difference 
being added to the 90 percent pass-through funding to eligible 
entities. Eight States used all of their CSBG discretionary 
funds as part of their pass-through funding to eligible 
entities.
    The second largest use of discretionary funds ($4,852,569 
in 25 states) was for ``other programs.'' Many of these 
programs do not fit neatly into a pre-existing category such as 
training and technical assistance. For example, in Indiana, the 
Father Resource Program, operated by Wishard Memorial Hospital, 
received CSBG discretionary funds. The program aims to improve 
the life chances of some of Indianapolis' youngest and most 
vulnerable citizens and their families, particularly young 
African American fathers by helping young fathers in their 
personal development and earning potential to their social and 
legal obligation as fathers.
    Other successful examples include California's Mentor 
Initiative which uses CSBG funds to assist at-risk youth in 
order to reduce alcohol and drug use, teen pregnancy, 
educational failure, gangs, and violence; Michigan's 
``Community First'' initiative to strengthen Michigan families 
in at-risk communities; and Missouri's Homeless Challenge 
Program to expand existing local programs serving the homeless.
    Sixteen states used $2,502,516 for ``other statewide 
programs,'' the third largest category of CSBG discretionary 
expenditures. Statewide discretionary programs are typically 
aimed at eliminating a particular cause of poverty identified 
by the state as requiring additional resources and state-level 
coordination. Oklahoma's Self-Employment Entrepreneurial 
Development Systems (SEEDS) program is one such program, 
providing start-up funding and business training sessions for 
eligible clients desiring to become self employed.
    The committee commends those States which have used all or 
part of their allocation for innovative locally-designed 
responses to poverty. The committee has noted that no States 
have used their authority to pass through CSBG funds to other 
federal block grant programs and has therefore eliminated that 
authority.

Unobligated funds

    Section 675(c)(A)(3) of the Act provides that beginning on 
October 1, 2000, a State may recapture and redistribute funds 
distributed to an eligible entity that are unobligated at the 
end of a fiscal year if such unobligated funds exceed 20 
percent of the amount distributed to the eligible entity. If 
the state elects to recapture funds in accordance with this 
provision they shall redistribute such funds to an eligible 
entity within the State 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. In either event, the committee 
intends that the states keep an accurate account of funds 
recaptured and how they are redistributed within the state and 
that they report on these actions as part of their annual 
report to the Secretary.

Accountability, monitoring and evaluation

    The committee has paid particular attention to the 
organizational structure at the State level in this 
reauthorization for the purpose of enhancing and ensuring 
program accountability. We have, for the first time, required 
the chief executive officer of the State to designate a lead 
agency in the State to develop the State plan to be submitted 
to the Secretary; to hold at least one public hearing in the 
State on the proposed use and distribution of funds and one 
legislative hearing every 3 years in conjunction with the 
development of the State plan; to conduct reviews of eligible 
entities funded under this Act, and where necessary, terminate 
eligibility or reduce funding for poor performing agencies.
    Monitoring is a critically important piece of the quality 
assurance process. The committee believes that the best way to 
work with poor performing local agencies is for States to 
develop performance and financial management standards and to 
hold local agencies accountable to those standards, and, where 
appropriate, to demand improved agency performance. The 
legislation therefore requires States to conduct an in-depth 
triennial review of each entity receiving funds under CSBG and 
to provide training and technical assistance where the need is 
indicated.
    The committee recognizes the need for an equitable process 
which allows CSBG recipients an opportunity to address quality 
deficiencies, but which terminates programs which cannot meet 
minimum requirements or their own outcome measures. If a 
program falls short of minimum program standards, the State is 
required to notify the program of the identified deficiencies. 
The State may require immediate correction, or depending on the 
seriousness of the problem and the time reasonably required to 
correct it, may allow the program to develop a quality 
improvement plan. This plan shall be developed by the program 
in a timely manner and approved by the State. The State shall 
establish a timetable to document the dates by which each 
problem must be corrected and must provide training and 
technical assistance to the program if requested, and 
determined to be needed.
    The committee intends that no deficiency be permitted to 
persist beyond one year of the date on which the agency was 
first notified of the problems. If the agency fails to correct 
the deficiencies within the time specified in the quality 
improvement plan, the Secretary shall initiate proceedings to 
terminate that agency's designation as an eligible entity.
    Grantees which feel that their funding has been terminated, 
suspended or reduced unfairly may appeal the decision to the 
Secretary. The committee intends by this process to ensure 
quality services, and not to deny services to a community 
served by a poor performing grantee. The State shall work to 
identify a more capable grantee and provide, to the greatest 
extent possible, a smooth transition of services from one 
grantee to the next.

Outcome-based measures

    The committee feels strongly that program effectiveness is 
the key to continued growth in the CSBG program and had 
directed the Secretary, in collaboration with the States and 
eligible entities throughout the Nation, to establish 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 the Act.
    The committee understands that developing an outcome based 
measurement system for a program in which local grantees have 
enormous flexibility to pursue a diverse range of programs in a 
complex undertaking. The committee applauds the 
Administration's initiative in developing the results-oriented 
management and accountability (ROMA) process, which is designed 
to measure the impact of local agencies in bringing about 
change in their communities. ROMA establishes a set of broad 
national goals, along with a menu of outcome measures for each 
of these goals.
    Under this system, the tripartite boards of eligible 
entities receiving CSBG funds identify the particular goals 
appropriate to their communities and then select from the menu 
specific measures they will use to assess their progress toward 
achieving those goals. Local agencies will use ROMA to report 
annually the results they have achieved. The committee believes 
that ROMA is a useful tool to assist local agencies in 
monitoring their success in promoting self-sufficiency, family 
stability and community revitalization, as well as to allow 
States to provide result driven oversight, and to paint a clear 
national picture of the use of CSBG dollars.

Data collection

    The committee applauds the work of the National Association 
of Community Services Programs in preparing an annual CSBG 
statical report. However, the committee is concerned that the 
Office of Community Services (OCS) does not collect any 
additional information from States and or local agencies on the 
use of CSBG funds, other than the annual statistical report. 
The committee is encouraged that this will soon change as part 
of the implementation of the National CSBG Results Oriented 
Management and Accountability (ROMA) process.
    According to OCS, the results of local agency activities 
related to the goals for increased self-sufficiency, improved 
living conditions, increased involvement in the community, more 
and better partnerships and strengthened families and improved 
stability will be reported by States to OCS by the end of FY 
1999. Although the initial report will not be comprehensive, 
they will begin to provide a better picture of the CSBG 
program. This will be particularly important in the area of 
administrative costs used in connection with CSBG funded 
activities and in obtaining specific information on the number 
of CSBG service providers that operate services and activities 
directly versus the number that operate services through grants 
and contracts with other organizations.

Reports

    Section 679(b) of current law requires the Secretary of HHS 
to conduct evaluations of the use of CSBG funds in several 
States each fiscal year. Among other things, these evaluations 
are required to assess the program's impact on children, 
pregnant adolescents, homeless families, and the elderly poor. 
The committee is very concerned that the Department has ignored 
this requirement and has not submitted an annual report to 
Congress since 1991. The Office of Community Services 
anticipates a consolidated report for years 1992-1997 by the 
end of this summer. The committee looks forward to receiving 
this report.

Discretionary program and related activities

    The committee has included a new Neighborhood Innovation 
Project under the 9 percent discretionary account provided for 
the Secretary. The committee intends that these funds be made 
available to entities that are not the eligible entities under 
CSBG. The purpose of these grants is to support local, 
neighborhood-based, private non-profit 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.
    The committee also wishes to point out that while it has 
added a new program as an allowable activity when may be funded 
under the 9 percent discretionary set-aside, it does not 
anticipate a shortfall I funds for the Community Economic 
Development (CED) and Rural Community Facilities (RCF) 
programs. The Appropriations committee and traditionally been 
providing funds for four separate programs out of the 9 percent 
set-aside--the CED and RCF programs, which are allowable 
activities under this section, and the National Youth Sports 
Programs (NYSP) and the Community Food and Nutrition Program 
(CFNP) which are separate discretionary programs. The 
authorizing language clearly provides the CFNP and the NYSP 
with their own separately appropriated accounts. The committee 
intends for these two programs to be provided with their own 
appropriations, rather than including them under the 9 percent 
set-aside where they compete with funds for programs 
specifically authorized under the block grant.

National Youth Sports Program

    The National Youth Sports Program (NYSP) is a program for 
low-income youth that provides academic, athletic, and youth 
development services through participation in a 5 week summer 
program. The program has been administered by the National 
Collegiate Athletic Association (NCAA) through a grant from the 
Department of Health and Human Services since 1969. In the 1994 
reauthorization of the program, the national grant was open to 
competitive bids. Since that time, HHS has negotiated a 5-year 
continuation grant with the NCAA for managing, monitoring, and 
conducting the NYSP. None of the funds for NYSP can be used for 
administrative costs, which must be fully borne by the national 
grantee entity.
    Conducted by colleges and universities at 182 sites around 
the country in 1998, the NYSP provides youth with medical and 
dental examinations, as well as physical and academic 
activities utilizing the existing staff and facilities of a 
college campus. For many youth participating in the program, it 
is their first exposure to a college environment and the 
possibilities of higher education.
    The committee has been concerned about mechanisms to 
increase the effectiveness of this summer program and to 
reinforce the positive effects of the program throughout the 
year. To achieve that goal, the committee has included 
provisions in this reauthorization requiring each NYSP site to 
develop partnerships with youth development and other 
appropriate community-based organizations to continue the 
support and activities begun with the youth's participation in 
NYSP. By creating the linkages between the summer program and 
local community organizations, youth will have a year-round 
opportunity to participate in positive youth development 
activities, including academic enrichment, sports and 
recreation, and other programs. This linkage also can be used 
to strengthen the identification of other youth for 
participation in the NYSP and promote closer collaboration and 
coordination between local youth-serving organizations and the 
colleges hosting the NYSP.

            title iii--low income energy assistance program

    The Low Income Home Energy Assistance Program (LIHEAP) 
provides a critical safety net for approximately 4.3 million 
low-income families (in all 50 states) who cannot afford to 
heat their homes in the winter and cool them in the summer. 
Almost 70 percent of recipient families have annual incomes of 
less than $8,000, 33 percent have at least one member who is 
elderly, and 25 percent have one member who is disabled. In 
addition, approximately one-third of participating households 
have children under the age of 6.
    The committee has reauthorized LIHEAP at the current $2 
billion level for each of the fiscal years 1999 through 2004. 
Unfortunately, this level of authorization is well above recent 
appropriations for the program despite the fact that the LIHEAP 
eligible population has grown from 23 million to 30 million 
during the last decade. As recently as 1994, approximately six 
million households received LIHEAP assistance.
    The LIHEAP program is ``forward-funded'' and the committee 
anticipates that LIHEAP will be reauthorized again in 2003. The 
committee also continues to recognize the need in times of 
crisis for emergency/contingency funds to be released by the 
President and has authorized $600 million in emergency funds 
for this purpose.
    Given the historical reduction in annual LIHEAP 
appropriations, the committee has reduced the amount available 
for the leveraging program from $50,000,000 to $30,000,000. 
Leveraging program funds are used to reward states for 
initiatives that raise matching state and private sector funds 
for LIHEAP-related activities. When annual appropriations for 
the program rise above $1.4 billion, the authorization level 
for the leveraging fund will increase to $50,000,000.
    Since 1996, 25 percent of leveraging funds have been set 
aside for the Residential Energy Assistance Challenge (REACH) 
program. This program allows grantees to apply for funds to 
help eligible clients reduce their energy volunerability. The 
committee has asked the Comptroller General to conduct an 
evaluation of the REACH program and report its finding within 
two years of the date of enactment of this Act.
    The committee continues to be concerned about programs 
related to the release of emergency LIHEAP funds. A new 
provision has been added to the statute to clarify the criteria 
by which the President can release LIHEAP funds during a 
natural disaster or emergency. The committee is very concerned 
that the President and the Secretary have felt constrained by 
the LIHEAP statute when called upon by Members of Congress and 
State Governors to release emergency funds during crises that 
may not be exclusively temperature driven, such as the spike in 
heating oil prices during the winter of 1996-97 and the severe 
ice storms in the Northeast during the winter of 1997-98.
    The committee specifically authorizes the President to 
release LIHEAP emergency funds during natural disasters that 
include, but are not limited to, cold or hot weather events, 
floods, earthquakes, tornadoes, hurricanes, or ice storms.
    The committee has also clarified that the term emergency 
means a natural disaster: a significant home energy supply 
shortage or disruption; a significant increase in the cost of 
home energy, as determined by the Secretary; a significant 
increase in home energy disconnections reported by a utility, a 
State regulatory agency, or another agency with necessary data; 
a significant increase in participation in a public benefit 
program such as the Food Stamp program; a significant increase 
in unemployment or layoffs; or any other event meeting criteria 
as the Secretary may determine to be appropriate.
    In determining whether a release of emergency funds should 
be made to a State, the Secretary shall take into account the 
extent to which the State was affected by the emergency or 
disaster; the availability of other resources and other 
relevant criteria. It is expected that the Secretary will 
notify Congress within 30 days of making a decision on the 
release of emergency funds, and shall notify individual Members 
of Congress of the status of their request for release of 
emergency funds within 30 days of receipt of such request.
    The committee has increase, by $50,000, the amount of funds 
available to the Secretary for technical assistance to the 
States. It is the committee's intent that these funds be used 
for on-site reviews of State programs and for technical 
assistance to states on utility restructuring.

                   title iv--assets for independence

    Current income maintenance policy raises people to the 
poverty line, often leaving them one sickness, accident or job 
loss away from crisis. While providing food, shelter and 
clothes to low income families is imperative, this aid alone 
will not produce viable escapes from poverty. Owning assets 
gives people a stake in the future--a reason to save, dream and 
invest in creating a future for themselves and their future.
    For this reason, the committee strongly supports the Assets 
for Independence Act, an Individual Development Accounts (IDAs) 
demonstration program, authorized for $125 million over 5 
years. This legislation supports the work that states and 
community based organizations are doing in support of IDAs and 
other asset-based development strategies.
    The committee believes 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 
business, going to college, owning a home, and bequeathing a 
better future for their children. The Assets for Independence 
Act will not only fund a national demonstration on IDAs but 
will also measure the success or failure of efforts to 
establish effective IDA programs.
    Investing in homes, education and small business has 
generated great social and economic returns to America, as well 
as to individual asset holders. No one can deny that America is 
stronger because we have educated our children, owned our homes 
and created jobs and services through businesses. It is the 
Committee's belief that enabling the poor to make these 
investments--investments which have build a large and 
successful middle class in this country--will both help 
individuals and the country at large.
    According to Michael Sherraden, ``Few people have ever 
spent their way out of poverty. Those who escape do so through 
saving and investing in long term goals.'' An asset-based 
economic development strategy, like IDAs, is based on the 
belief that accumulation of assets is the key to development of 
poor households. For the vase majority of households, the 
pathway out of poverty is not through consumption, but through 
savings accumulation. Accumulating assets leads to important 
psychological and social effects that are not achieved in the 
same degree by receiving and spending an equivalent amount of 
regular income.
    IDAs are spreading throughout the country at an 
unparalleled rate. The Corporation for Enterprise Development 
(CFED), one of the pioneer organizations supporting IDAs and 
related asset development policies, estimates that there are 
IDA projects in at least 43 States. Some States have relatively 
mature community-based programs, others contain young but 
ambitious programs, while others have displayed great interest 
and are pulling together the resources to start a program. 
While no exact count exists, CFED estimates that there are 
about 100 existing and developing IDA programs in the country, 
up from about 30-35 just a year ago.
    In addition to the proliferation of community based IDA 
programs, states themselves are embracing IDAs at a rapid pace. 
To date, 25 States have decided as part of their Temporary 
Assistance for Needy families (TANF) plans, to allow welfare 
recipients to open IDAs--although States are not required to 
fund them.
    As further evidence of the growing interest in IDAs around 
the country, CFED received 233 letters of intent and 99 full 
proposals to participate in a privately funded IDA 
demonstration that was launched in 1997.
    While limited funding permitted only 13 sites to 
participate in the demonstration, the response demonstrated the 
demand for funding to initiate community based IDA programs.
    The committee believes it is time for the Federal 
Government to invest in strengthening the emerging field of IDA 
programs around the country and assist the field in 
demonstrating the impact that IDAs can have on individuals and 
their communities.
    The committee is aware that software has been specifically 
designed to monitor and help evaluate IDA programs, and that 
such software is presently being used in a large and growing 
number of IDA programs throughout the country. To ensure 
consistency in data collection for purposes of monitoring and 
evaluation among IDA programs authorized under this 
demonstration, as well as to help ensure that IDA programs 
operating under this demonstration are consistent with and 
reflect best practices in the existing IDA field, the committee 
strongly recommends that IDA programs authorized under this Act 
utilize such IDA monitoring and evaluation software.
    In order to prevent participating individuals from being 
penalized as a result of their utilization of an IDA account, 
the committee intends that funds (including interest accruing 
from those funds) deposited in individual development accounts 
shall not be considered to be income for purposes of 
determining eligibility for, or the amount of assistance 
furnished under, any Federal or federally assisted program 
(such as food stamps) based on need.

                        V. Administration Views

                The Secretary of Health and Human Services,
                                     Washington, DC, June 24, 1998.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: We take this opportunity to inform you 
of the Department's views on S. 2206, the Human Services 
Reauthorization Act of 1998. The Administration supports the 
work of your Committee to gain enactment of bipartisan 
legislation to reauthorize the Head Start program, the Low-
Income Home Energy Assistance Program (LIHEAP) and the 
Community Services Block Grant (CSBG) program this year as well 
as to create a demonstration program for Individual Development 
Accounts (IDA). Based on our understanding of the provisions 
included in S 2206, which you have sponsored with Senators 
Kennedy, Coats and Dodd, we support the improvements that the 
bill makes to these essential human services programs.

                               head start

    We are pleased that you bill maintains the critical 
improvements to the Head Start program initiated by the 
historic bipartisan legislation enacted in 1994 and 
incorporates many of the Administration's proposals submitted 
this year. We fully support the five-year reauthorization of 
the program contained in S. 2206 and its specific authority to 
increase the exciting new Early Head Start program over the 
next five years. We support provisions in your bill that build 
upon the promising efforts begun in 1994 and provide greater 
emphasis on collaboration with States and other providers of 
preschool services; full-day, full-year services; school 
readiness, literacy training and related teacher 
qualifications; and services for children with disabilities.
    We also fully support efforts to learn more about the Head 
Start program and measure the outcomes for Head Start children. 
Since 1994, we have undertaken a wealth of new initiatives and 
systems to promote stronger acountability and program quality, 
including the Head Start Quality Research Consortium and the 
ground-breaking Family and Child Experience Study (FACES). As 
you know, FACES is an ambitious effort to assess the 
performance of the Head Start program on an ongoing basis 
through a national longitudinal study of a representative 
sample of Head Start children and families. We look forward to 
convening the expert panel of researchers and reviewing their 
recommendations on the best approach to carry out the research 
initiatives outlined in your bill.
    We will work with the Committee to address remaining issues 
relating to the Head Start title of the bill.

                                  csbg

    We commend your efforts to strengthen accountability in the 
Community Services Block Grant program by improving the 
program's existing performance measurement system. We also 
appreciate your commitment to a fundamental aspect of the 
Community Services Block Grant program: the tripartite 
governing board. The tripartite board has been an important way 
for low-income persons to participate in planning services and 
activities to improve the conditions in which they live. Your 
bill expands the role of private, nonprofit organizations in a 
number of ways but we have concerns about ensuring the 
essential and historic role of the existing community services 
network and preserving the role of low-income persons in the 
planning and administration of the programs administered by 
these funds. We also have technical concerns, including 
concerns with the provision for the designation and 
redesignation of eligible entities in unserved areas, and the 
time frame for reviewing determinations by State agencies. We 
look forward to working with your staff on these and other 
issues.

                                 liheap

    We support the reauthorization of the LIHEAP program. We 
believe that the bill's increased availability of resources for 
the administration of the program in the smaller States, Tribes 
and territories will make the program more effective. 
Additionally, the increased resources for technical assistance, 
training, and compliance reviews will also be crucial to 
improving the effectiveness of the program.

                                  ida

    We also are pleased that the bill includes a new 
demonstration project designed to encourage low-income persons 
to establish individual development accounts for the purpose of 
accumulating assets to be used for postsecondary education, 
home ownership and micro enterprise development expenses. The 
Clinton Administration has supported the concept of individual 
development accounts and looks forward to the increased 
utilization of such accounts that this legislation would 
create. The Administration will continue its discussions with 
the Committee about provisions regarding this new effort.
    We greatly appreciate the leadership and cooperation with 
which your Committee and staff have approached the 
reauthorization of these vital programs, and will provide you 
with further comments as we continue to review S. 2206. We hope 
to work with you in the weeks ahead to gain Senate approval and 
final passage of legislation that takes Head Start, Community 
Services and the Low-Income Home Energy Assistance programs 
into the 21st century.

                           VI. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 20, 1998.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2206, the Humans 
Services Reauthorization Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sheila Dacey.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

S. 2206--Human Services Reauthorization Act of 1998

    Summary: S. 2206 would reauthorize the Head Start, Low-
Income Home Energy Assistance, and Community Service Block 
Grant programs. It would also authorize a new demonstration 
program designed to encourage saving by individuals with low 
income and assets. Assuming appropriation of the authorized 
amounts, outlays for these programs would total $38 billion 
over the 1999-2003 period, including adjustments for inflation. 
Without adjustments for inflation, outlays would total $37 
billion. Because enactment of S. 2206 would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply.
    S. 2206 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would, however, impose new data collection and 
monitoring requirements on state, local, and tribal governments 
that administer community service programs. CBO estimates that 
the costs of meeting these requirements would total about $1 
million annually. Under UMRA, such conditions of federal 
assistance are not mandates.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 2206 is summarized in Table 1. The costs 
of this legislation fall within budget function 500 (education, 
training, employment, and social services) and function 600 
(income security).

                           TABLE 1. SUMMARY OF ESTIMATED BUDGETARY EFFECTS OF S. 2206                           
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars          
                                                     -----------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
                                        Without Adjustments for Inflation                                       
                                                                                                                
Authorizations under current law:                                                                               
    Estimated authorization level \1\...............     6,197     2,650         0         0         0         0
    Estimated outlays...............................     5,767     4,917       923        47         0         0
Proposed changes:                                                                                               
    Estimated authorization level \1\...............  ........     5,050     7,700     7,700     7,700     7,700
    Estimated outlays...............................  ........     2,041     6,640     7,502     7,557     7,551
Authorizations under S. 2206:                                                                                   
    Estimated authorization level \1\...............     6,197     7,700     7,700     7,700     7,700     7,700
    Estimated outlays...............................     5,767     6,958     7,463     7,549     7,557     7,551
                                                                                                                
                                         With Adjustments for Inflation                                         
                                                                                                                
Authorizations under current law:                                                                               
    Estimated authorization level \1\...............     6,197     2,650         0         0         0         0
    Estimated outlays...............................     5,767     4,917       923        47         0         0
Proposed changes:                                                                                               
    Estimated authorization level...................  ........     5,146     7,916     8,041     8,166     8,302
    Estimated outlays...............................  ........     2,078     6,670     7,741     7,925     8,048
Authorizations under S. 2206:                                                                                   
    Estimated authorization level \1\...............     6,197     7,796     7,916     8,041     8,166     8,302
    Estimated outlays...............................     5,767     6,995     7,593     7,788     7,925     8,048
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.                                                    

    Basis of estimate: Tables 2 and 3 detail the estimated 
impact of S. 2206 on spending subject to appropriation by 
title, with and without adjustments for inflation. In general, 
CBO assumes current spending patterns in estimates of outlays.
    Title I: Head Start. S. 2206 would reauthorize Head Start, 
a program which provides comprehensive early child development 
services to low-income children, at such sums as are necessary 
for 1999-2003. Title I contains increased research requirements 
that would raise the estimated authorization level, along with 
several program changes that would not affect the resources 
necessary to run the program. CBO estimates authorizations 
would equal the 1998 appropriation plus $5 million a year to 
meet the new research requirements. Estimated authorizations 
under Title I of S. 2206 would total $4.36 billion in fiscal 
year 1999 and $21.8 billion for fiscal years 1999-2003, not 
including adjustments for inflation.
    S. 2206 authorizes $5 million each year for 1999 through 
2003 for a new national study of the impact of Head Start. The 
Secretary would use the funds to contract with an organization 
to conduct the research and to pay the expenses of an expert 
panel to review and advise on the research. CBO assumes that 
the funds would be spent at the same rate as funds in similar 
research programs.
    S. 2206 would make several other program changes, but CBO 
estimates they would not have a significant budgetary effect. 
The major changes are an increase in the set-aside for the 
Early Head Start program, an emphasis on educational 
performance measures, and encouragement of collaboration 
between Head Start and child care agencies to provide full-day, 
full-year services. The bill would also reserve a portion of 
the Early Head Start funds for training and technical 
assistance and make for-profit organizations eligible to 
compete for Head Start grants.
    Title II: Community Services Block Grant. S. 2206 would 
reauthorize CSBG and related programs. CSBG is a grant to 
states to provide a wide variety of anti-poverty activities. 
Authorizations would total $665 million in 1999 and $3.3 
billion for 1999 through 2003, not including adjustments for 
inflation.
    The bill would authorize CSBG at $625 million in 1999 and 
such sums as necessary for the following four years. It would 
make several changes to the program that CBO estimates would 
have no budgetary effect including allowing states to recapture 
and reobligate funds that had been passed through to local 
agencies and remain unspent for a given period of time, 
clarifying that nonprofit organizations include faith-based 
organizations, requiring states to participate in a performance 
measurement system, and establishing a new program of grants to 
neighborhood-based nonprofit organizations.

  TABLE 2. ESTIMATED EFFECTS OF S. 2206 ON AUTHORIZATIONS OF APPROPRIATIONS, WITHOUT ADJUSTMENTS FOR INFLATION  
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars          
                                                     -----------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        Authorizations Under Current Law                                        
                                                                                                                
Head Start programs:                                                                                            
    Budget authority................................     4,355         0         0         0         0         0
    Estimated outlays...............................     4,067     2,678       261         0         0         0
Community service block grant program:                                                                          
    Budget authority................................       542         0         0         0         0         0
    Estimated outlays...............................       542       232        23         0         0         0
Low-income home energy assistance:                                                                              
    Estimated authorization level \1\...............     1,300     2,650         0         0         0         0
    Estimated outlays...............................     1,158     2,008       639        47         0         0
Total authorizations:                                                                                           
    Estimated authorization level \1\...............     6,197     2,650         0         0         0         0
    Estimated outlays...............................     5,767     4,917       923        47         0         0
                                                                                                                
                                              Changes Under S. 2206                                             
                                                                                                                
Head Start programs:                                                                                            
    Estimated authorization level...................  ........     4,360     4,360     4,360     4,360     4,360
    Estimated outlays...............................  ........     1,656     4,098     4,360     4,360     4,360
Community service block grant program:                                                                          
    Estimated authorization level...................  ........       665       665       665       665       665
    Estimated outlays...............................  ........       308       589       654       663       665
Low-income home energy assistance:                                                                              
    Estimated authorization level...................  ........         0     2,650     2,650     2,650     2,650
    Estimated outlays...............................  ........        75     1,835     2,453     2,500     2,500
Assets for independence:                                                                                        
    Estimated authorization level...................  ........        25        25        25        25        25
    Estimated outlays...............................  ........         3        19        35        34        26
Total changes:                                                                                                  
    Estimated authorization level...................  ........     5,050     7,700     7,700     7,700     7,700
    Estimated outlays...............................  ........     2,041     6,540     7,502     7,557     7,551
                                                                                                                
                                       Total Authorizations Under S. 2206                                       
                                                                                                                
Total authorizations:                                                                                           
    Estimated authorization level \1\...............     6,197     7,700     7,700     7,700     7.700     7.700
    Estimated outlays...............................     5,767     6,958     7,463     7,549     7,557     7,551
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.                                                    


  TABLE 3. ESTIMATED EFFECTS OF S. 2206 ON AUTHORIZATIONS OF APPROPRIATIONS, WITHOUT ADJUSTMENTS FOR INFLATION  
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars          
                                                     -----------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        Authorizations Under Current Law                                        
                                                                                                                
Head Start programs:                                                                                            
    Budget authority................................     4,355         0         0         0         0         0
    Estimated outlays...............................     4,067     2,678       261         0         0         0
Community service block grant program:                                                                          
    Budget authority................................       542         0         0         0         0         0
    Estimated outlays...............................       542       232        23         0         0         0
Low-income home energy assistance:                                                                              
    Estimated authorization level \1\...............     1,300     2,650         0         0         0         0
    Estimated outlays...............................     1,158     2,008       639        47         0         0
Total authorizations:                                                                                           
    Estimated authorization level \1\...............     6,197     2,650         0         0         0         0
    Estimated outlays...............................     5,767     4,917       923        47         0         0
                                                                                                                
                                              Changes Under S. 2206                                             
                                                                                                                
Head Start programs:                                                                                            
    Estimated authorization level...................  ........     4,456     4,560     4,669     4,778     4,896
    Estimated outlays...............................  ........     1,692     4,227     4,589     4,704     4,816
Community service block grant program:                                                                          
    Estimated authorization level...................  ........       665       681       697       713       731
    Estimated outlays...............................  ........       308       589       663       687       705
Low-income home energy assistance:                                                                              
    Estimated authorization level...................  ........         0     2,650     2,650     2,650     2,650
    Estimated outlays...............................  ........        75     1,835     2,453     2,500     2,500
Assets for independence:                                                                                        
    Estimated authorization level...................  ........        25        25        25        25        25
    Estimated outlays...............................  ........         3        19        35        34        26
Total changes:                                                                                                  
    Estimated authorization level...................  ........     5,146     7,916     8,041     8,166     8,302
    Estimated outlays...............................  ........     2,078     6,670     7,741     7,925     8,048
                                                                                                                
                                       Total Authorizations Under S. 2206                                       
                                                                                                                
Total authorizations:                                                                                           
    Estimated authorization level...................     6,197     7,796     7,916     8,041     8,166     8,302
    Estimated outlays...............................     5,767     6,995     7,593     7,788     7,925     8,048
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the amount appropriated for that year.                                                    

    The bill would also reauthorize the Community Food and 
Nutrition programs at $25 million in 1999 and such sums as 
necessary for the following four years and the National Youth 
Sports programs at $15 million annually for 1999 through 2003.
    Title III: Low-Income Home Energy Assistance. S. 2206 would 
reauthorize the LIHEAP program at $2.65 billion annually for 
2000 through 2004. The program is currently authorized through 
the end of 1999. The bill makes three separate authorizations 
for LIHEAP.
    First, the bill would authorize the basic LIHEAP grant, a 
formula grant to states to provide energy assistance to low-
income households, at $2 billion annually over the 2000-2004 
period.
    Second, the bill would authorize additional energy 
assistance needed by states because of a natural disaster or 
other emergency at $600 million annually for 2000 through 2004. 
Such funds would be made available only after a formal request 
by the President that includes a designation of the amount 
requested as an emergency requirement as defined in the 
Balanced Budget and Emergency Deficit Control Act of 1985.
    Third, the bill authorizes $50 million to be spent each 
year on an incentive program to encourage states to develop 
nonfederal energy assistance resources and the Residential 
Energy Assistance Challenge (REACh) program that gives grants 
to states to operate energy-efficiency education programs. If 
less than $1.4 million is appropriated for the basic grant 
program and emergency assistance, then only $30 million is 
authorized to be appropriated for the incentive and REACh 
programs. For the purpose of this estimate CBO assumes 
appropriations at the authorized levels, so $50 million is 
estimated to be available.
    S. 2206 would include a new definition of emergency that 
would result in a greater share of available emergency funds 
being spent than in the past. Under current law, in an average 
year, 50 percent of the emergency funds made available are 
distributed by the administration. The bill would define 
emergency to include: a natural disaster; a significant 
shortage of home energy supply; or a significant increase in 
the cost of home energy, the number of home energy 
disconnections, participation in public benefit programs or the 
number of unemployed. That definition of emergency is much 
broader than the one the administration currently uses to 
determine whether to declare an emergency and release 
additional LIHEAP funds. CBO estimates that under the new 
definition, 75 percent of the emergency funds available would 
be spent. The provision would affect outlays starting in 1999.
    Title IV: Assets for Independence. S. 2006 would establish 
a new demonstration program designed to encourage saving by 
individuals with low income and assets. The program would be 
authorized at $25 million annually for 1999 through 20003. 
Demonstration grants would be awarded to nonprofit 
organizations up to the lesser of $1 million or the aggregate 
amount of funds committed as matching funds by nonfederal 
sources. Grantees would deposit federal and nonfederal funds 
received for the demonstration project in a reserve fund 
pending disbursement to program participants. Grantees would 
use the interest earned on the reserve fund for program 
purposes.
    Individuals with low incomes and assets would be eligible 
to participate in the program. Grantees would match 
participants' deposits into savings accounts, called individual 
development accounts (IDAs). The matching contributions would 
be between $0.50 and $4 for every $1 of earned income deposited 
in the IDA by a participant. Participants could withdraw funds 
from the IDA only for specified purposes such as paying for 
postsecondary education, first-time home purchase, or business 
capitalization.
    Because it would take several months for the Secretary to 
award grants and for the grantees to accumulate matching funds, 
CBO estimates that only 10 percent of the grant would be spent 
in 1999. The rate of spending would accelerate in each of the 
following three years.
    Estimated impact on State, local, and tribal governments: 
S. 2206 contains no intergovernmental mandates as defined in 
UMRA. The bill would reauthorize the Head Start, Community 
Services Block Grant, and Low-Income Home Energy Assistance 
programs that provide grants to state, local, and tribal 
governments and nonprofit agencies. S. 2206 would impose new 
data collection and monitoring requirements on state, local, 
and tribal governments that operate these programs. CBO 
estimates that the costs of meeting these requirements would 
total about $1 million annually. Under UMRA, such conditions of 
federal assistance are not mandates. For fiscal 1998, CBO 
estimates that state, local, and tribal governments will 
receive approximately $2.8 billion in grants from the programs 
being reauthorized under the bill. Some of these funds will be 
distributed to individuals and nonpfofit organizations.
    Estimated impact on the private sector: H.R. 3874 contains 
no private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Sheila Dacey; Impact 
on State, Local, and Tribal Governments; Marc Nicole; and 
Impact on the Private Sector: Bruce Vavrichek
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

           VII. Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA) requires a description of the 
application of this bill to the legislative branch. S. 2206 
authorizes various federal human services programs and does not 
amend any act that applies to the legislative branch.

                   VIII. Regulatory Impact Statement

    The committee has determined that there will be minimal 
increases in the regulatory burden imposed by this bill.

                    IX. Section-by-Section Analysis

                          title i--head start

Section 101. Short title

    Provides the short title, ``Head Start Amendments of 
1998.''

Section 102. References

    Provides that, unless otherwise noted, any references to 
sections or provisions of law are to sections or provisions of 
the Head Start Act (hereafter referred to as the Act).

Section 103. Statement of purpose

    Amends section 636 of the Act to revise the statement of 
purpose to promote school readiness by enhancing the social and 
cognitive development of low income children.

Section 104. Definitions

    Amends section 637 of the Act to revise the definitions of 
``family literacy services'' and ``full-working-day;'' to 
revise the definitions of ``migrant Head Start program'' to 
include ``seasonal;'' and to add definitions of ``child with a 
disability,'' and ``reliable and replicable'' (when used with 
respect to research).

Section 105. Financial assistance for Head Start programs

    Provide that financial assistance will be provided to Head 
Start programs that enable children to attain school readiness, 
as well as to attain their full potential.

Section 106. Authorization of appropriations

    Authorizes the appropriation of such sums as necessary for 
an additional five years, from FY 1999 through FY 2003, and to 
require the Secretary to make available in each of those years; 
not more than $35 million, and not less than provided in FY 
1998, for Head Start transition activities (authorized under a 
new section 642A); not more than $5 million for impact studies 
(authorized under a new section 649(f) of the Act) and not more 
than $12 million of other research and evaluation activities, 
including longitudinal studies (authorized under section 649 of 
the Act).

Section 207. Allotment of funds

    Makes technical amendments to section 640(a)(2) of the Act 
(13 percent set-aside for specified priorities); also amends 
the subsection with regard to funding for Indian and migrant 
and seasonal Head Start programs; allows set-aside funds to be 
used for activities related to correcting deficiencies and 
conducting proceedings to terminate the designation of Head 
Start agencies, and for research and evaluation under section 
649 of the Act; and requires the Secretary to continue the 
administrative arrangement for meeting the needs of migrant and 
Indian children and to assure that appropriate funds are 
provided to meet the needs of such children.
    Makes several amendments to section 640(a)(3) of the Act 
(quality improvement funds), regarding the use of these funds 
for children with disabilities, to encourage staff training, 
and for staff training related to promotion of language skills 
and literacy growth of children and the acquisition of English 
for children from non-English-speaking backgrounds.
    Section 107(a)(3) requires that each state initially 
receive an amount of Head Start funds equal to the amount the 
state received in FY 1998 (instead of FY 1981, as in current 
law).
    Section 107(a)(4) specifies that collaboration grants are 
intended to encourage Head Start agencies to actively 
collaborate with other entities to meet the needs of low-income 
children and families; to add the appropriate regional office 
of the federal Administration for Children and Families to the 
list of agencies and individuals that the state liaison must 
coordinate with; to delete ``national service activities'' 
from, and add ``services for homeless children'' to, the list 
of services and activities that Head Start must be coordinated 
with; and to acquire that statesreceiving collaboration grants 
must include representatives of the state Head Start Association and 
local Head Start agencies in unified planning regarding early care and 
education services at the state and local level. In addition, this 
subsection requires the Secretary to provide supplemental funding to 
states that (in consultation with the state Head Start associations) 
develop unified plans for early childhood education and child care that 
include participation of Head Start agencies, and to states that engage 
in other innovative collaborations. The Secretary must review barriers 
to collaboration, develop initiatives to eliminate such barriers, and 
develop a mechanism to resolve conflicts between programs.
    Section 107(a)(5) amends section 640(a)(6) of the Act to 
increase the amount of funds set-aside for Early Head Start to 
7.5 percent in FY 1999, 8 percent in FY 2000, 9 percent in FY 
2001, 10 percent in FY 2002, and 10 percent in FY 2003. The 
Secretary may reduce these amounts, if necessary to avoid a 
reduction in Head Start services or quality, subject to certain 
conditions.
    Section 107(b) makes technical amendments to section 640(d) 
of the Act (enrollment of children with disabilities).
    Section 107(c) amends section 640(g) of the Act (expansion 
funds) to require the Secretary to consider, in awarding 
expansion funds, an applicant's performance history in 
providing services under other federal programs, the extent to 
which the applicant has conducted planning and needs 
assessments involving other agencies serving children with 
disabilities, the applicant's ability to collaborate and 
participate with other providers to provide full-day and full-
year services, and the extent to which the applicant proposes 
to enhance its resource capacity through partnerships with 
other providers.
    Section 107 (d) and (e) make technical and conforming 
amendments to section 641 and section 644(f)(2) of the Act.

Section 108. Designation of Head Start agencies

    Section 108 amends section 641 of the Act (designation of 
Head Start agencies) to allow designation of for-profit 
organizations; to require the Secretary to consult with the 
chief executive officer of a state in making designations 
within that state; to require the Secretary to give priority in 
designations to existing Head Start grantees or their 
successors, unless the Secretary determines that the agency has 
failed to meet certain requirements; to require the Secretary 
to give priority to Head Start agencies that have met or 
exceeded performance standards and performance measures; to 
require the Secretary to consider an applicant's plan to seek 
parent involvement both at home and in the center, where 
practicable, and to meet the needs of non-English background 
children and children with disabilities; and authorizes the 
Secretary to designate an interim Head Start grantee until a 
qualified applicant from the community is designated.

Section 109. Quality standards

    Section 109 amends section 641A(a) of the Act (quality 
standards) to require the establishment of education 
performance standards to ensure school readiness and that 
children develop a minimum level of literacy awareness and 
understanding; amends section 641A(b) of the Act (performance 
measures) to require that such measures assess the impact of 
the services provided to children and their families; amends 
section 641A(c) of the Act (monitoring of local agencies and 
programs) to require that review teams include individuals 
knowledgeable about the needs of children with disabilities, 
and that the reviews include a review and assessment of program 
effectiveness in accordance with outcome-based performance 
measures and performance standards; and amends section 641A(d) 
of the Act to require Head Start agencies to immediately 
correct any identified deficiencies, that threaten health or 
safety or the integrity of federal funds; to correct a 
deficiency within 90 days of being informed, if the Secretary 
determines that 90 days if reasonable; and to develop and 
obtain approval for a quality improvement plan, if required by 
the Secretary.

Section 110. Powers and functions of Head Start agencies

    Section 110 amends section 642 of the Act (powers and 
functions of Head Start agencies) to add a reference to for-
profit organizations; updates a reference to federal child care 
programs; and makes other minor revisions.

Section 111. Head Start transition

    Section 111 establishes a new section 642A of the Act (Head 
Start transition), requiring each Head Start agency to 
coordinate with the local education agency and schools in which 
participating Head Start children will enroll.

Section 112. Submission of plans to Governors

    Section 112 amends section 643 of the Act (submission of 
plans to Governors), to allow the chief executive officer of a 
state 45 days in which to disapprove any plan to carry out a 
Head Start program within the state through contract, 
agreement, grant, or other assistance. The Secretary may not 
overrule the Governor's disapproval in cases in which the 
disapproval is because of failure to comply with state health, 
safety and child care laws (including regulations) applicable 
to comparable programs within the state.

Section 113. Participation in Head Start programs

    Section 113 amends section 645 of the Act (participation in 
Head Start), regarding the continuing eligibility of children 
who have participated in the Head Start program and whose 
families have met the low-income criteria; regarding the use of 
a sliding fee scale for extended day services in full-day 
programs that operate through collaborations with other 
agencies or entities; and requiring continuous recruitment and 
acceptance of applications for Head Start throughout the year.

Section 114. Early Head Start programs for families with infants and 
        toddlers

    Section 114 amends section 645A (Early Head Start), to 
eliminate outdated references; to add a reference to infants 
and toddlers with disabilities; to limit eligibility to 
pregnant women and families with children under age 3; and to 
require the use of Early Head Start funds for monitoring, 
training, technical assistance, and evaluation.

Section 115. Technical assistance and training

    Section 115 amends section 648 of the Act (technical 
assistance and training), to require the Secretary to ensure 
provision of technical assistance to Head Start agencies, other 
entities and states in collaborative efforts to promote full-
day, full-year services; and to require the Secretary to assist 
Head Start agencies and programs in expediting information 
sharing about innovative models for providing full-day, full-
year services; and to require the Secretary to assist Head 
Start agencies in ensuring school readiness of children and 
meeting education performance standards.

Section 116. Staff qualifications and training

    Section 116 amends section 648A of the Act (staff 
qualifications and developments) to ensure that each Head Start 
classroom has a teacher with demonstrated competency to perform 
certain functions (in addition to certificate and degree 
requirements already contained in current law); and require the 
Secretary to grant a 180-day waiver of degree requirements for 
Head Start teachers, upon request, if the Head Start agency has 
unsuccessfully attempted to recruit an individual with the 
required credential, certificate or degree. Such a waiver would 
be for an individual who is enrolled in a program that grants 
the appropriate credential, and who will receive the 
appropriate credential within 180 days of beginning employment 
as a Head Start teacher.

Section 117. Research, demonstration, and evaluation

    Section 117 amends section 649 (research, demonstrations 
and evaluation), to require comparative studies of children 
participating Head Start with eligible children who did not 
participate, and to require national Head Start impact research 
and a quality improvement study.

            title ii--community service block grant program

Section 201. Reauthorization

    Section 201 amends the Community Services Block Grant Act 
(hereafter referred to as the Act) as follows:
    Section 671 of the Act provides the short title, 
``Community Services Block Grant Act.''
    Section 672 of the Act establishes the purposes and goals.
    Section 673 of the Act establishes definitions of 
``eligible entity,'' ``poverty line,'' ``private nonprofit 
organization,'' ``Secretary,'' and ``state.''
    Section 674 of the Act authorizes appropriations of $625 
million for FY 1999 and such sums as may be necessary for each 
of FYs 2000 through 2003 to carry out the Act (other than 
sections 681 and 682). Of annual appropriations, the Secretary 
must reserve half of 1 percent for payments to territories, not 
less than half of 1 percent and not more than 1 percent for 
training and technical assistance and other activities under 
section 678A, and 9 percent for discretionary activities under 
section 680.
    Section 675 of the Act authorizes the Secretary to 
establish a community services block grant program and to make 
grants through the program to states to ameliorate the causes 
of poverty in communities within the states.
    Section 675A of the Act authorizes the Secretary to 
apportion reserved funds among the territories on the basis of 
need, and requires each territory wishing to receive a grant to 
submit to the Secretary, and obtain approval of, an application 
that describes the program for which assistance is sought.
    Section 675B of the Act establishes provisions for 
allotment and payment of funds to states.
    Section 675C of the Act establishes provisions for the use 
of funds by states, including a requirement that not less than 
90 percent of the funds used by the state to make grants to 
eligible entities.
    Section 676 of the Act requires each state wishing to 
receive an allotment of funds to designate a lead agency to 
carry out state activities under the Act, and to submit an 
application and plan to the Secretary, containing specified 
assurances and information.
    Section 676A of the Act establishes provisions regarding 
the designation and redesignation by states of eligible 
entities in unserved areas of the state.
    Section 676B establishes provisions regarding tripartite 
boards for eligible entities.
    Section 677 of the Act establishes provisions regarding 
direct payment of funds by the Secretary to Indian tribes and 
tribal organizations.
    Section 678 of the Act requires the Secretary to carry out 
functions of the Act through an Office of Community Services, 
and through grants, contracts, or cooperative agreements.
    Section 678A of the Act establishes provisions regarding 
the use of funds, set-aside under section 674, by the Secretary 
for training, technical assistance, planning, evaluation, and 
data collection activities.
    Section 678B of the Act establishes provisions for state 
monitoring of eligible entities to determine whether such 
entities meet performance goals, administrative standards, 
financial management requirements, and other requirements of 
the state.
    Section 678C of the Act establishes provisions for 
corrective action, termination and reduction of funding, in 
cases where a state determines that an eligible entity 
materially fails to comply with the terms of an agreement or 
the state plan, or to meet appropriate standards, goals, and 
other requirements established by the state.
    Section 678D of the Act establishes provisions for fiscal 
controls, audits, and withholding of federal funds.
    Section 678E of the Act establishes state and federal 
accountability and reporting provisions, requiring states and 
eligible entities to participate in a performance measurement 
system established by the Secretary; requiring states to submit 
an annual report to the Secretary on the performance of 
eligible entities within the state; and requiring the Secretary 
to submit to Congress an annual report containing specified 
information.
    Section 678F of the Act establishes limitations on the use 
of funds for construction of facilities and political 
activities and establishes nondiscrimination provisions.
    Section 679 of the Act establishes provisions regarding the 
participation of faith-based organizations in programs under 
the Act.
    Section 680 of the Act establishes provisions regarding the 
use of funds, set-aside under section 674, by the Secretary for 
specified discretionary activities: community economic 
development; rural community development; and neighborhood 
innovation projects.
    Section 681 of the Act authorizes appropriations and 
establishes provisions for community food and nutrition 
programs.
    Section 682 of the Act authorizes appropriations and 
establishes provisions for national or regional programs 
designed to provide instructional activities for low-income 
youth (i.e., the National Youth Sports Program).
    Section 683 of the Act provides that any reference in law 
to the poverty line set forth in section 624 or 625 of the 
Economic Opportunity Act shall be construed as a reference to 
the poverty line defined in section 673 of the Act. Any 
reference in law to a community action agency designated under 
title II of the Economic Opportunity Act shall be construed to 
be a reference to an eligible entity under the Act.

Section 202. Conforming amendments

    Section 202 requires the Secretary to recommend technical 
and conforming amendments within six months of the date of 
enactment of these amendments.

Section 203. Repealers

    Section 203 repeals sections 407 and 408 of the Human 
Services Reauthorization Act of 1986.

              title iii--low-income home energy assistance

Section 301. Authorization

    Section 301 amends section 2602(b) of the Act to 
reauthorize the program at the current level of $2 billion for 
each of the fiscal years 1999 through 2004. The amount 
available for leveraging is reduced from $50,000,000 to 
$30,000,000 except in any year in which appropriations rise 
above $1.4 billion at which time the leveraging pot goes back 
to $50,000,000.

Section 302. Definitions

    Section 302 makes technical amendments to section 2603 
containing the Act's definitions.

Section 303. Natural disasters and other emergencies

    Section 303 amends section 2603 by adding a new section 
pertaining to natural disasters and other emergencies. This 
section clarifies the criteria by which LIHEAP funds can be 
released in an emergency or natural disaster. Currently, there 
is an arbitrary standard for determining an emergency or 
natural disaster, this language will rectify this problem by 
listing a standards under which funds may be released which may 
include: (1) a natural disaster; (2) a significant home energy 
supply shortage or disruption; (3) a significant increase in 
the cost of home energy, as determined by the Secretary; (4) a 
significant increase in home energy disconnections reported by 
a utility, a State regulatory agency, or another agency with 
necessary data; (5) a significant increase in participation in 
a public benefit program such as the food stamp program; (6) a 
significant increase in unemployment or layoffs; or (7) any 
other event meeting criteria as the Secretary may determine to 
be appropriate.

Section 304. State allotments

    Section 304 amends section 2604 of the Act to include the 
Commonwealth of the Northern Mariana Islands and the combined 
Freely Associated States as participants in the LIHEAP program.

Section 305. Administration

    Section 305 amends section 2605 of the Act to make certain 
technical and conforming amendments.

Section 306. Payments to States

    Section 306 amends section 2607(b)(2)(B) to disallow 
certain transfers out of the program.

Section 307. Residential Energy Assistance Challenge option

    Section 307 amends the Act to require the Comptroller 
General to conduct an evaluation of the Residential Energy 
Assistance Challenge program and to report on its finding 
within 2 years of the date of enactment of this Act.

Section 308. Technical assistance, training, and compliance reviews

    Section 308 amends section 2609(A)(a) of the Act to 
increase the amount of funds available for technical assistance 
from $250,000 to $300,000 and to allow the Secretary to use 
such funds to conduct onsite reviews of programs supported 
under this title, and for interagency agreements, including 
agreements with federal agencies.

                 title iv--assets for independence act

Section 401. Short title

    Section 401 establishes the short title of this title to be 
the ``Assets for Independence Act.''

Section 402. Findings

    Section 402 contains the findings for this title.

Section 403. Purposes

    Section 403 contains the purposes of this title which are 
to determine how the accumulation of assets through savings 
benefits individuals and families of limited means and 
increases their economic self-sufficiency.

Section 404. Definitions

    Section 404 defines the terms relevant to this title 
including ``eligible individual'', ``emergency withdrawal'', 
``individual development account'', ``qualified entity'', and 
``qualified expenses'' which are defined as ``postsecondary 
educational expenses'', ``first-home purchase'', ``business 
capitalization'', and ``transfers to IDAs of family members''.

Section 405. Applications

    Section 405 sets forth the application process for an 
eligible entity to participate in the IDA demonstration 
program. Eligible applicants will be required to submit 
applications to the Secretary of HHS that demonstrate their 
ability to administer an IDA demonstration site and assist 
qualified individuals participating in an IDA. In addition, 
applicants will be required to demonstrate their ability to 
commit non-federal funds to the project. The legislation also 
requires HHS to give preference to applicants that are able to 
choose individuals who are caring for their own children, able 
to commit non-federal funds to the projects and able to target 
low-income communities.

Section 406. Demonstration authority; annual grants

    Section 406 authorizes the Secretary of HHS to approve 
applications from eligible entities to administer an IDA 
demonstration for four project years and limits the grants that 
HHS can make to any qualified entity in a single year to the 
lesser of $1 million or an amount equal to the amount of non-
federal matching funds secured by the eligible entity.

Section 407. Reserve fund

    Section 407 sets out the requirements relating to the 
reserve fund which must be established by each entity 
participating in the demonstration. All funds provided to the 
participating entity and any proceeds from investments of these 
funds must be deposited in the reserve fund. The amounts in the 
reserve fund to be used for technical assistance, provide 
deposits to individual IDAs, administer the demonstration 
project, and provide evaluation information. The participating 
entity has authority to invest the reserve fund under 
guidelines established by the Secretary. Each participating 
entity may use no more than 9.5 percent of their federal grant 
for technical assistance, administrative and evaluation costs, 
with no more than 2 percent of the 9.5 percent being used for 
evaluation costs.

Section 408. Eligibility for participation

    Section 408 establishes the eligibility requirements for 
individuals interested in participating in the IDA 
demonstration program. An individual's income must not exceed 
the earned income amount described in section 32 of the 
Internal Revenue Code and their net worth cannot exceed 
$10,000.

Section 409. Selection of individuals to participate

    Section 409 describes how eligible individuals will be 
selected to participate in the IDA demonstration.

Section 410. Deposits by qualified entities

    Section 410 establishes that deposits will be made by 
participating entities at least once every 3 months into the 
IDA of each participant. Not more than $2,000 per individual, 
and not more than $4,000 per household may be deposited into an 
IDA from federal funds over the course of the demonstration. 
The Secretary shall ensure that funds in an IDA are not 
withdrawn except for one or more qualified expense which are 
(1) post secondary educational expenses; (2) purchase of a 
first home; (3) business capitalization; (4) emergency 
withdrawals (i.e. for medical care, to prevent eviction from a 
residence, or to meet necessary living expenses following the 
loss of a job). No individual may withdraw funds for any 
purpose until 6 months after they first deposit funds. 
Individuals who withdraw funds under an emergency withdrawal 
may only withdraw their contributions and must agree to 
reimburse their account within 12 months.

Section 411. Local control over demonstration projects

    Section 411 provides that qualified entities, other than 
state or local government agencies, shallhave sole authority 
over the administration of the project. The Secretary may prescribe 
only such regulations and guidelines as are necessary to ensure 
compliance.

Section 412. Annual progress reports

    Section 412 requires participating entities to submit 
annual progress reports which includes the number of 
individuals making a deposit into an IDA, amounts in Reserve 
Fund, amounts deposited in the IDA, amounts withdrawn from the 
IDA, and purposes for which funds were withdrawn, and balances 
remaining in the IDAs. The reports shall be submitted to the 
Secretary and the Treasurer (or equivalent) of the state in 
which the demonstration project resides. The first report is 
due not later than 60 days after the end of the calendar year 
in which the Secretary authorized the qualified entity to 
conduct the project; subsequent reports are due every 12 months 
thereafter.

Section 413. Sanctions

    Section 413 grants the Secretary authority to terminate any 
demonstration project's authority, if the Secretary determines 
that the participating entity is not operating the project in 
accordance with its application or the requirements of this 
title. If a project is terminated, the Secretary shall take 
control of the Reserve Fund and make every effort to identify 
another qualified entity to conduct the project. If no such 
entity can be found, the Secretary shall terminate the project 
and ensure that any amounts remaining in the Reserve Fund will 
be returned into their place of origin.

Section 414. Evaluations

    Section 414 authorizes the Secretary of HHS to contract 
with an independent research organization to evaluate the IDA 
demonstration program by evaluating the performance of the 
qualified organizations as well as the qualifying individuals 
participating in the IDA demonstration projects. The section 
identifies the factors that the independent evaluator will be 
required to look at in conducting the evaluation in addition to 
the methodology that the independent evaluator will be required 
to abide by.

Section 415. Treatment of Funds

    Section 415 provides that of the funds deposited in an IDA 
account, only the contributions of an individual to his own 
account may be considered to be income, assets or resources of 
the individual for purposes of determining eligibility for, or 
the amount of assistance furnished under, any Federal or 
federally assisted program based on need.

Section 416. Authorization of appropriations

    Section 416 authorizes the program at $25 million for each 
of the fiscal years 1999-2003.

                          X. ADDITIONAL VIEWS

    In general, I am very pleased with the direction the 
committee has taken in reauthorizing the Head Start program, 
which has improved the lives of millions of children and their 
families. However, in a significant departure from past 
policies, this bill allows for for-profit entities to directly 
participate in Head Start. While clearly children should have 
access to the best local provider of early childhood services, 
I have concerns about the potential conflict between the 
mission of Head Start to serve the most vulnerable children and 
the mission of for-profit entities to show a financial gain.
    Recent and past studies have indicated cause for some 
concern in this area as they have found that the quality of 
non-profit child care centers was higher than the quality of 
care in for-profit centers. Most recently, a study entitled, 
``Cost, Quality, and Child Outcomes Study,'' found that teacher 
turnover was higher in for-profit programs. In addition, this 
four State study found that the non-profit centers had a better 
child to staff ratio than for-profit entities, suggesting that 
children in non-profit centers have a better opportunity for 
one on one attention. A study by the Center for the Child Care 
Workforce found that the wages in for-profit centers are 
significantly lower than those in non-profit centers, which may 
contribute to turnover problems. Finally, a 1990 study 
entitled, ``A Profile of Child Care Settings: Early Education 
And Care in 1990,'' demonstrated that for-profit programs that 
are a part of national chains have particular problems with 
quality, including higher number of children per staff members, 
high teacher turnover rates and the lowest wages.
    I believe it is critical that the expansion of grantees to 
include for-profit programs be closely monitored. While the 
Secretary should exercise appropriate oversight over all 
grantees, I anticipate that any for-profit grantees will be 
carefully monitored in these critical quality areas. In 
addition, I am pleased that the committee adopted my amendment 
giving the Secretary clear authority to give priority 
consideration to non-profit applicants over for-profits where 
the applications are equivalent.

                                                        Chris Dodd.

                      XI. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

HEAD START ACT

           *       *       *       *       *       *       *


                    [statement of purpose and policy

    [Sec. 636. (a) In recognition of the role which Project 
Head Start has played in the effective delivery of 
comprehensive health, educational, nutritional, social, and 
other services to economically disadvantaged children and their 
families, it is the purpose of this subchapter to extend the 
authority for the appropriation of funds for such program.
    [(b) In carrying out the provisions of this subchapter, the 
Secretary of Health and Human Services shall continue the 
administrative arrangement responsible for meeting the needs of 
migrant, non-English language background, and Indian children 
and shall assure that appropriate funding is provided to meet 
such needs.]

SEC. 636. STATEMENT OF PURPOSE.

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

                              definitions

    Sec. 637. For purposes of this subchapter:
          (1) * * *

           *       *       *       *       *       *       *

          (3) 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.
          [(3)] (4) The term ``financial assistance'' includes 
        assistance provided by grant, agreement, or contract, 
        and payments may be made in installments and in advance 
        or by way of reimbursement with necessary adjustments 
        on account of overpayments or underpayments.
          [(4) The term ``family literacy services'' means 
        services and activities that include interactive 
        literacy activities between parents and their children, 
        training for parents on techniques for being the 
        primary teacher of their children and full partners in 
        the education of their children, parent literacy 
        training (including training in English as a second 
        language), and early childhood education.]
          (5) The term ``family literacy services'' means 
        services that--
                  (A) are provided to participants who receive 
                the services on a voluntary basis;
                  (B) are of sufficient intensity, and of 
                sufficient duration, to make sustainable 
                changes in a family (such as eliminating or 
                reducing dependence on income-based public 
                assistance); and
                  (C) integrate each of--
                          (i) interactive literacy activities 
                        between parents and their children;
                          (ii) training for parents on being 
                        partners with their children in 
                        learning;
                          (iii) parent literacy training, 
                        including training that contributes to 
                        economic self-sufficiency; and
                          (iv) appropriate instruction for 
                        children of parents receiving the 
                        parent literacy training.
          [(5)] (6) The term ``full calendar year'' means all 
        days of the year other than Saturday, Sunday, and a 
        legal public holiday.
          [(6)] (7) The term ``full-working-day'' means not 
        less than 10 hours per day. 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)] (8) The term ``Head Start classroom'' means a 
        group of children supervised and taught by two paid 
        staff members (a teacher and a teacher's aide or two 
        teachers) and, where possible, a volunteer.
          [(8)] (9) The term ``Head Start family day care'' 
        means Head Start services provided in a private 
        residence other than the residence of the child 
        receiving such services.
          [(9)] (10) The term ``home-based Head Start program'' 
        means a Head Start program that provides Head Start 
        services in the private residence of the child 
        receiving such services.
          [(10)] (11) The term ``Indian tribe'' means any 
        tribe, band, nation, pueblo, or other organized group 
        or community of Indians, including any Native village 
        described in section 3(c) of the Alaska Native Claims 
        Settlement Act (43 U.S.C. 1602(c)) or established 
        pursuant to such Act (43 U.S.C. 1601 et seq.), that is 
        recognized as eligible for the special programs and 
        services provided by the United States to Indians 
        because of their status as Indians.
          [(11)] (12) The term ``local educational agency'' has 
        the meaning giving such term in the Elementary and 
        Secondary Education Act of 1965.
          [(12) The term ``migrant Head Start program'' means a 
        Head Start program that serves families who are engaged 
        in agricultural work and who have changed their 
        residence from one geographical location to another in 
        the preceding 2-year period.]
          (13) The term ``migrant or 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.
          [(13)] (14) The term ``mobile Head Start program'' 
        means the provision of Head Start services utilizing 
        transportable equipment set up in various community-
        based locations on a routine, weekly schedule, 
        operating in conjunction with home-based Head Start 
        programs, or as a Head Start classroom.
          [(14)] (15) The term ``poverty line'' means the 
        official poverty line (as defined by the Office of 
        Management and Budget)--
                  (A) adjusted to reflect the percentage change 
                in the Consumer Price Index For All Urban 
                Consumers, issued by the Bureau of Labor 
                Statistics, occurring in the 1-year period or 
                other interval immediately preceding the date 
                such adjustment is made; and
                  (B) adjusted for family size.
          (16) The term ``reliable and replicable'', used with 
        respect to research, means an objective, valid, 
        scientific study that--
                  (A) includes a rigorously defined sample of 
                subjects, that is sufficiently large and 
                representative to support the general 
                conclusions of the study;
                  (B) relies on measurements that meet 
                established standards of reliability and 
                validity;
                  (C) is subjected to peer review before the 
                results of the study are published; and
                  (D) discovers effective strategies for 
                enhancing the development and skills of 
                children.

              financial assistance for head start programs

    Sec. 638. The Secretary may, upon application by an agency 
which is eligible for designation as a Head Start agency 
pursuant to section 641, provide financial assistance to such 
agency for the planning, conduct, administration, and 
evaluation of a Head Start program focused primarily upon the 
children from low-income families who have not reached the age 
of compulsory school attendance which (1) will provide such 
comprehensive health, education, parental involvement, 
nutritional, social, and other services as will [aid the] 
enable the children to attain their full potential[;] and 
attain school readiness; and (2) will provide for direct 
participation of the parents of such children in the 
development, conduct, and overall program direction at the 
local level.

                    authorization of appropriations

    Sec. 639. (a) There are authorized to be appropriated for 
carrying out the provisions of this subchapter such sums as may 
be necessary for fiscal years [1995 through 1998] 1999 through 
2003.
    (b) From the amount appropriated under subsection (a), the 
Secretary shall make available--
          [(1) $35,000,000 for each of the fiscal years 1995 
        through 1998 to--
                  [(A) carry out the Head Start Transition 
                Project Act; and
                  [(B) carry out activities authorized under 
                section 642(d); and
          [(2) not more than $3,000,000 for fiscal year 1995, 
        and such sums as may be necessary for each of the 
        fiscal years 1996 through 1998, to carry out 
        longitudinal research under section 649(e).]
          (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 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.

             allotment of funds; limitations on assistance

    Sec. 640. (a)(1) * * *

           *       *       *       *       *       *       *

    (2) The Secretary shall reserve 13 percent of the amount 
appropriated for each fiscal year for use in accordance with 
the following order of priorities--
          (A) Indian and migrant Head Start programs and 
        services for [handicapped children] children with 
        disabilities, except that there shall be made available 
        for each fiscal year for use by Indian and [migrant 
        Head Start programs] migrant or seasonal Head Start 
        programs, on a national wide basis, not less than the 
        amount that was obligated for use by Indian and 
        [migrant Head Start programs] migrant or seasonal Head 
        Start programs for fiscal year [1994] 1998;

           *       *       *       *       *       *       *

          (C) training and technical assistance activities 
        which are sufficient to meet the needs associated with 
        program expansion and to foster program and management 
        improvement activities as described in section 648 of 
        this subchapter, in an amount for each fiscal year 
        which is not less than 2 percent of the amount 
        appropriated for such fiscal year; [and]
          (D) discretionary payments made by the Secretary 
        (including payments for all costs (other than 
        compensation of Federal employees) of reviews of Head 
        Start agencies and programs under section 641A(c), and 
        of activities [related to the development and 
        implementation of quality improvement plans under 
        section 641A(d)(2)).] 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) payments for research, demonstration, and 
        evaluation activities under section 649.
In carrying out this subchapter, the Secretary shall continue 
the administrative arrangement responsible for meeting the 
needs of migrant or seasonal farmworker and Indian children and 
shall assure that appropriate funding is provided to meet such 
needs.
    No funds reserved under this paragraph or paragraph (3) may 
be combined with funds appropriated under any other Act if the 
purpose of combining funds is to make a single discretionary 
grant or a single discretionary payment, unless such funds 
appropriated under this subchapter are spearately identified in 
such grant or payment and are used for the purpose of this 
subchapter. 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 seasonal and 
migrant 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 the children of eligible 
migrant farmworkers before approving an increase in the 
allocation provided for children of eligible seasonal 
farmworkers.
    (3)(A)(i) * * *

           *       *       *       *       *       *       *

    (ii) Ensuring that such programs have [adequate qualified 
staff] adequate number of qualified staff and that such staff 
are furnished adequate training, including developing skills in 
working with children with non-English language background and 
children with disabilities, when appropriate.

           *       *       *       *       *       *       *

    (iv) Using salary increases to improve staff 
qualifications, and to assist with the implementation of career 
development programs, for the staff of Head Start programs, and 
to encourage the staff to continually improve their skills and 
expertise by informing the staff of the availability of State 
and Federal incentive and loan forgiveness programs for 
professional development and by providing for preferences in 
the awarding of salary increases, in excess of cost of living 
allowances, to staff who obtain additional training or 
education related to their responsibilities as employees of a 
Head Start program or to advance their careers within the Head 
Start program.

           *       *       *       *       *       *       *

    (vi) Ensuring that the physical environments of Head Start 
programs are conducive to providing effective program services 
to children and families[.], and are physically accessible to 
children with disabilities and their parents.
    (vii) Ensuring that such programs have qualified staff that 
can promote language skills and literacy growth of children and 
that provide children with a variety of skills that have been 
identified, through research that is reliable and replicable, 
as predictive of later reading achievement.
    [(vii)] (viii) Making such other improvements in the 
quality of such programs as the Secretary may designate.
    (C) Quality improvement funds shall be used to carry out 
any or all of the following activities:
          (i)(I) Not less than one-half of the amount reserved 
        under this subparagraph, to improve the compensation 
        (including benefits) [of staff] of classroom teachers 
        not other staff of Head Start agencies and thereby 
        enhance recruitment and retention of [such staff] 
        qualified staff, including recruitment and retention 
        pursuant to section 648A(a). The expenditure of funds 
        under this clause shall be subject to section 653.

           *       *       *       *       *       *       *

          [(ii) To pay transportation costs incurred by Head 
        Start agencies to enable eligible children to 
        participate in a Head Start program.]
          (ii) To supplement amounts provided under paragraph 
        (2)(C) to provide training to classroom teachers and 
        other staff on proven techniques that promote----
                  (I) language and literacy growth; and
                  (II) the acquisition of the English language 
                for non-English background children and 
                families.
          [(vi)] (iii) To supplement amounts provided under 
        paragraph (2)(C) 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 of 
        their communities, and children who experience 
        substance abuse in their families.
          [(iii)] (iv) To employ additional Head Start staff, 
        including staff necessary to reduce the child-staff 
        ratio and staff necessary to coordinate a Head Start 
        program with other services available to children 
        participating in such program and to their families.
          [(iv)] (v) To pay costs incurred by Head Start 
        agencies to purchase insurance (other than employee 
        benefits) and thereby maintain or expand Head Start 
        services.
          [(v)] (vi) To make nonstructural and minor structural 
        changes, and to acquire and install equipment, for the 
        purpose of improving facilities necessary to expand the 
        accessibility or availability, or enhance the quality, 
        of Head Start programs.

           *       *       *       *       *       *       *

    (D)(i) Funds reserved under subparagraph (A) shall be 
allotted by the Secretary as follows:
          (I) * * *

           *       *       *       *       *       *       *

          (II) 20 percent of such funds shall be allotted among 
        the States, geographical areas specified in subsection 
        (a)(2)(B) and Indian and [migrant Head Start programs] 
        migrant or seasonal Head Start programs, and used to 
        make grants to Head Start agencies, at the discretion 
        of the Secretary.

           *       *       *       *       *       *       *

    (4) Subject to section 639(b), the Secretary shall allot 
the remaining amounts appropriated in each fiscal year among 
the States, in accordance with latest satisfactory data so 
that--
          (A) each State receives an amount which is equal to 
        the amount the State received for fiscal year [1981] 
        1998; and

           *       *       *       *       *       *       *

    (5)(A) From amounts reserved and allotted pursuant to 
paragraph (4), the Secretary shall reserve such sums as may be 
necessary to award the collaboration grants described in 
[subparagraph (B)] subparagraph (B) and (D).
    (B) From the reserved sums, the Secretary may award a 
collaboration grant to each State to facilitate collaboration 
regarding activities carried out in the State under this 
subchapter, and other activities carried out in, and by, the 
State that are designed to benefit low-income children and 
families and 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) A State that receives a grant under subparagraph (B) 
shall--
          (i) appoint an individual to serve as a State liaison 
        between--
                  (I) the appropriate regional office of the 
                Administration for Children and Families and 
                agencies and individuals carrying out Head 
                Start programs in the State; and

           *       *       *       *       *       *       *

          (iii) ensure that the individual holds a position 
        with sufficient authority and access to ensure that the 
        collaboration described in subparagraph (B) is 
        effective and involves a range of State agencies; [and]
          (iv) ensure that the collaboration described in 
        subparagraph (B) involves coordination of Head Start 
        services with health care, welfare, child care, 
        [education, and national service activities,] 
        education, and community service activities, family 
        literacy services, [and activities] activities relating 
        to children with disabilities[.], and services for 
        homeless children; and
          (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.
    (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 career 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 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 such programs 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.
    [(D)] (F) As used in this paragraph, the term ``low-
income'', used with respect to children or families, shall not 
be considered to refer only to children or families that meet 
the low-income criteria prescribed pursuant to section 
645(a)(1)(A).
    (6)(A) From amounts reserved and allotted pursuant to 
paragraphs (2) and (4), the Secretary shall use, for grants for 
programs described in section 645A(a), a portion of the 
combined total of such amounts equal to [3 percent for fiscal 
year 1995, 4 percent for each of fiscal years 1996 and 1997, 
and 5 percent for fiscal year 1998, of the amount appropriated 
pursuant to section 639(a).] 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).
    (B)(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 negatively impacting 
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 lowered to a level that requires a 
reduction in the amount made available under this subchapter to 
Head Start agencies and entities described in section 645A, 
relative to the amount made available to the agencies and 
entities for the preceding fiscal year, adjusted as described 
in paragraph (3)(A)(ii), the Secretary shall proportionately 
reduce--
          (I) the amounts made available to the entities for 
        programs carried out under section 645A; and
          (II) the amounts made available to Head Start 
        agencies for Head Start programs.

           *       *       *       *       *       *       *

    (d) The Secretary shall establish policies and procedures 
designed to assure that for fiscal year [1982] 1999 and 
thereafter no less than 10 percent of the total number of 
enrollment opportunities in Head Start programs in each State 
shall be available for children with disabilities [(as defined 
in section 602(a) of the Individuals with Disabilities 
Education Act)] and that services shall be provided to meet 
their special needs.

           *       *       *       *       *       *       *

    (g)(1) * * *

           *       *       *       *       *       *       *

          (A) the quality of the applicant's programs 
        (including Head Start and other child care or child 
        development programs) in existence on the date of the 
        allocation, including, in the case of Head Start 
        programs in existence on the date of the allocation, 
        the extent to which such programs meet or exceed 
        performance standards and other requirements under this 
        subchapter[;] and the performance history of the 
        applicant in providing services under other Federal 
        programs (other than the program carried out under this 
        subchapter);

           *       *       *       *       *       *       *

          (C) the extent to which the applicant has undertaken 
        community-wide strategic planning and needs assessments 
        involving other community organizations and public 
        agencies serving children and families (including 
        organizations serving families in whose homes English 
        is not the language customarily spoken)[;] and 
        organizations serving children with disabilities;
          (D) the extent to which the family and community 
        needs assessment of the applicant reflects a need to 
        provide full-working-day or full calendar year services 
        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;
          (E) the numbers of eligible children in each 
        community who are not participating in a Head Start 
        [program; and] or any other early childhood program;
          (F) the concentration of low-income families in each 
        community[.]; and
          (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.

           *       *       *       *       *       *       *

    (4) Notwithstanding subsection (a)(2), after taking into 
account the provisions of 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 the activities described in such subsection.

           *       *       *       *       *       *       *

    (l) With funds made available under section 640(a)(2) to 
[migrant Head Start programs] migrant or seasonal Head Start 
programs, the Secretary shall give priority to [migrant Head 
Start programs] migrant or seasonal Head Start programs that 
serve eligible children of [migrant families] migrant or 
seasonal farmworker families whose work requires them to 
relocate most frequently.

           *       *       *       *       *       *       *


                   DESIGNATION OF HEAD START AGENCIES

    Sec. 641. (a) The Secretary is authorized to designate as a 
Head Start agency any local public or private nonprofit or for-
profit agency, within a community, which (1) has the power and 
authority to carry out the purposes of this subchapter and 
perform the functions set forth in section 642 within a 
community; and (2) is determined by the Secretary (in 
consultation with the chief executive officer of the State in 
which the community is located) to be capable of planning, 
conducting, administering, and evaluating, either directly or 
by other arrangements, a Head Start program.

           *       *       *       *       *       *       *

    (c)(1) In the administration of the provisions of this 
section (subject to paragraph (2)), the Secretary [shall give 
priority] shall, in consultation with the chief executive 
officer of the State, give priority in the designation of Head 
Start agencies to any local public or private nonprofit or for-
profit agency which is receiving funds under any Head Start 
program on the date of the enactment of this Act [unless the 
Secretary makes a finding that the agency involved fails to 
meet program, financial management, and other requirements 
established by the Secretary.] unless the Secretary determines 
that the agency involved fails to meet program and financial 
management requirements, performance standards described in 
section 641A(a)(1), and other requirements established by the 
Secretary.
    (2) If there is no agency of the type referred to in 
paragraph (1) because of any change in the assistance furnished 
to programs for economically disadvantaged persons, the 
Secretary [shall give priority] shall, in consultation with the 
chief executive officer of the State, give priority in the 
designation of Head Start agencies to any successor agency that 
is operating a Head Start program in substantially the same 
manner as the predecessor agency that did receive funds in the 
fiscal year preceding the fiscal year for which the 
determination is made.
    (3) Notwithstanding any other provision of this subsection, 
the Secretary shall not give such priority to any agency with 
respect to which financial assistance has been terminated, or 
an application for refunding has been denied, under this 
subchapter by the Secretary after affording such agency 
reasonable notice and opportunity for a full and fair hearing 
in accordance with section 646(a)(3).
    (d) If no entity in a community is entitled to the priority 
specified in subsection (c), then the Secretary may designate a 
Head Start agency from among qualified applicants in such 
community. 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 has met or exceeded 
the performance standards and outcome-based performance 
measures described in section 641A. In selecting from among 
qualified applicants for designation as a Head Start agency, 
the Secretary shall consider the effectiveness of each such 
applicant to provide Head Start services, based on--

           *       *       *       *       *       *       *

          (4) the plan of such applicant--
                  (A) to seek the involvement of parents of 
                participating children in activities (at home 
                and in the center involved where practicable) 
                designed to help such parents become full 
                partners in the education of their children;

           *       *       *       *       *       *       *

          (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;
          (8) the plan of such applicant to meet the needs of 
        children with disabilities;
          [(7)] (9) the plan of such applicant to met the needs 
        of non-English language background children and their 
        families in the community; and
          [(8)] (10) the plan of such applicant who chooses to 
        assist younger siblings of children who will 
        participate in the proposed Head Start program to 
        obtain health services from other sources.
    [(e) If, in a community served by a Head Start program, 
there is no applicant qualified for designation as a Head Start 
agency to carry out such program, the Secretary may appoint an 
interim grantee to carry out such program until a qualified 
applicant is so designated.]
    (e) If no agency in the community receives priority 
designation, and there is no qualified applicant in the 
community, the Secretary shall designate an 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.

           *       *       *       *       *       *       *


SEC. 641A. QUALITY STANDARDS: MONITORING OF HEAD START AGENCIES AND 
                    PROGRAMS.

    (a) Quality Standards.--
          (1) Establishment of standards.--The Secretary shall 
        establish by regulation standards, including minimum 
        levels of overall accomplishment, applicable to Head 
        Start agencies, programs, and projects under this 
        subchapter, including--
                  (A) performance standards with respect to 
                services required to be provided, including 
                health, [education,] parental involvement, 
                nutritional, social, transition activities 
                described in section 642(d), and other 
                services;
                  (B)(i) education performance standards to 
                ensure the school readiness of children 
                participating in a Head Start program, on 
                completion of the Heat 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 oral language 
                        to communicate needs, wants, and 
                        thoughts;
                          (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.
                  [(B)] (C) administrative and financial 
                management standards;
                  [(C)] (D) standards relating to the condition 
                and location of facilities for such agencies, 
                programs, and projects; and
                  [(D)] (E) such other standards as the 
                Secretary finds to be appropriate.
          [(2) Minimum requirements.--The regulations 
        promulgated under this subsection shall establish the 
        minimum levels of overall accomplishment that a Head 
        Start agency shall achieve in order to meet the 
        standards specified in paragraph (1).]
          [(3)] (2) Considerations in developing standards.--In 
        developing the regulations required under paragraph 
        (1), the Secretary shall--
                  (A) * * *

           *       *       *       *       *       *       *

                  (B) take into consideration--

           *       *       *       *       *       *       *

                          (iii) developments concerning best 
                        practices with respect to [child] early 
                        childhood education and development, 
                        children with disabilities, family 
                        services, program administration, and 
                        financial management;

           *       *       *       *       *       *       *

                  (C)(i) [not later than 1 year after the date 
                of enactment of this section,] review and 
                revise as necessary the performance standards 
                in effect under [section 651(b) on the day 
                before the date of enactment of this section; 
                and] this subsection; and
                  (ii) ensure that any such revisions in the 
                performance standards will not result in the 
                elimination of or any reduction in the scope or 
                types of health, education, parental 
                involvement, nutritional, social, or other 
                services required to be provided under such 
                standards as in effect on [November 2, 1978] 
                the date of enactment of the Human Services 
                Reauthorization Act of 1998.
          [(4)] (3) Standards relating to obligations to 
        delegate agencies.--In developing standards under this 
        subsection, the Secretary shall describe the 
        obligations of a Head Start agency to an agency 
        (referred to in this subchapter as the ``delegate 
        agency'') to which the Head Start agency has delegated 
        responsibility for providing services under this 
        subchapter and determine whether the Head Start agency 
        complies with the standards. The Secretary shall 
        consider such compliance during the review described in 
        subsection (c)(1)(A) and in determining whether to 
        renew financial assistance to the Head Start agency 
        under this subchapter.
    (b) Outcome-Based Performance Measures.--
          (1) In general.--[Not later than 1 year after the 
        date of enactment of this section, the] The Secretary, 
        in consultation with representatives of Head Start 
        agencies and with experts in the fields of [child] 
        early childhood education and development, family 
        services, and program management, shall develop methods 
        and procedures for measuring, annually and over longer 
        periods, the quality and effectiveness of programs 
        operated by Head Start agencies (referred to in this 
        subchapter as ``performance measures'')[.] and the 
        impact of the services provided through the programs to 
        children and their families. The performance measures 
        shall include the performance standards described in 
        subsection (a)(1)(B)(ii).
          (2) [Design] Characteristics of measures.--The 
        performance measures developed under this subsection 
        [shall be designed--] shall--
                  (A) [to assess] assess the impact of the 
                various services provided by Head Start 
                programs and, to the extent the Secretary finds 
                appropriate, administrative and financial 
                management practices of such programs;
                  (B) [to] be adaptable for use in self-
                assessment [and peer review] peer review, and 
                program evaluation of individual Head Start 
                agencies and programs; and
                  (C) be developed for other program purposes 
                as determined by the Secretary.

           *       *       *       *       *       *       *

    (c) Monitoring of Local Agencies and Programs.--
          (1) In general.--*  *  *

           *       *       *       *       *       *       *

                  (B) are supervised by such an employees at 
                the site of such Head Start agency[; and];
                  (C) are conducted by review teams that shall 
                include individuals who are knowledgeable about 
                Head Start programs and, to the maximum extent 
                practicable, the diverse (including linguistic 
                and cultural) needs of eligible children 
                (including children with disabilities) and 
                their families[.]; and
                  (D) as part of the reviews of the programs, 
                include a review and assessment of program 
                effectiveness, as measured in accordance with 
                the outcome-based performance measures 
                developed pursuant to subsection (b) and with 
                the performance standards established pursuant 
                to subparagraphs (A) and (B) of subsection 
                (a)(1).
    (d) Corrective Action; Termination.--
          (1) Determination.--* * *

           *       *       *       *       *       *       *

                  [(B) with respect to each identified 
                deficiency, require the agency--
                          [(i) to correct the deficiency 
                        immediately; or
                          [(ii) at 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]
                  (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

           *       *       *       *       *       *       *

          (2) Quality improvement plan.--
                  (A) Agency responsibilities.--In order to 
                retain a designation as a Head Start agency 
                under this subchapter, a Head Start agency that 
                is the subject of a determination described in 
                paragraph (1) (other than an agency able to 
                correct a deficiency [immediately] immediately 
                or during a 90-day period under clause (i) or 
                (ii) of paragraph (1)(B)) shall--

           *       *       *       *       *       *       *


              powers and functions of head start agencies

    Sec. 642. (a) In order to be designated as a Head Start 
agency under this subchapter, an agency must have authority 
under its charter or applicable law to receive and administer 
funds under this subchapter, funds and contributions from 
private or local public sources which may be used in support of 
a Head Start program, and funds under any Federal or State 
assistance program pursuant to which a public or private 
nonprofit or for-profit agency (as the case may be) organized 
in accordance with this subchapter, could act as grantee, 
contractor, or sponsor of projects appropriate for inclusion in 
a Head Start program. Such an agency must also be empowered to 
transfer funds so received, and to delegate powers to other 
agencies, subject to the powers of its governing board and its 
overall program responsibilities. The power to transfer funds 
and delegate powers must include the power to make transfers 
and delegations covering component projects in all cases where 
this will contribute to efficiency and effectiveness or 
otherwise further program objectives.

           *       *       *       *       *       *       *

    (c) The head of each Head Start agency shall coordinate and 
collaborate with the State agency responsible for administering 
[section 402(g) of the Social Security Act, and other] 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 programs, including 
Even Start programs under part B of chapter 1 of title I of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 2741 
et seq.), serving the children and families served by the Head 
Start agency to carry out the provisions of this subchapter.
    (d)(1) Each Head Start agency [shall carry out the actions 
specified in this subsection, to the extent feasible and 
appropriate in the circumstances (including the extent to which 
such agency is able to secure the cooperation of parents and 
schools) to enable children to maintain] shall take steps to 
ensure, to the maximum extent possible, that children maintain 
the [developmental] developmental and educational gains 
achieved in Head Start programs and [to build] build upon such 
gains in further schooling.
    [(2) The 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--
          [(A) 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;
          [(B) 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;
          [(C) conducting meetings involving parents, 
        kindergarten or elementary school teachers, and Head 
        Start program teachers to discuss the developmental and 
        other needs of individual children; and
          [(D) organizing and participating in join transition-
        related training of school staff and Head Start staff.]
    [(3)] (2) A Head Start agency may 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--

           *       *       *       *       *       *       *

    [(4)] (3) In order to promote the continued involvement of 
the parents of children that participate in Head Start programs 
in the education of their children upon transition to school, 
the Head Start agency shall--

           *       *       *       *       *       *       *

    [(5)] (4) The Secretary, in cooperation with the Secretary 
of Education, shall

           *       *       *       *       *       *       *


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 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.); and
          (6) assisting families, administrators, and teachers 
        in enhancing developmental continuity between Head 
        Start services and elementary school classes.

                    submission of plans to governors

    Sec. 643. In carrying out the provisions of this 
subchapter, no contract, agreement, grant, or other assistance 
shall be made for the purpose of carrying out a Head Start 
program within a State unless a plan setting forth such 
proposed contract, agreement, grant, or other assistance has 
been submitted to the chief executive officer of the State, and 
such plan has not been disapproved by such officer [within 30 
days] within 45 days of such submission, or, if [so 
disapproved,] 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 program within the State) has ben reconsidered by the 
Secretary and found by the Secretary to be fully consistent 
with the provisions and in furtherance of the purpose of this 
subchapter. Funds to cover the costs of the proposed contract, 
agreement, grant, or other assistance

           *       *       *       *       *       *       *


               administrative requirements and standards

    Sec. 644. (a) * * *

           *       *       *       *       *       *       *

    (f)(1) * * *

           *       *       *       *       *       *       *

    (2) Except as provided in section [640(a)(3)(C)(v)] 
640(a)(3)(C)(vi), financial assistance provided under his 
subchapter may not be used by a Head Start agency to purchase a 
facility (including paying the cost of amortizing the 
principal, and paying interest on, loans) to be used to carry 
out a Head Start program unless the Secretary approves a 
request that is submitted by such agency and contains--

           *       *       *       *       *       *       *


                  participation in head start programs

    Sec. 645. (a)(1) The Secretary shall by regulation 
prescribe eligibility for the participation of persons in Head 
Start programs assisted under this subchapter. Except as 
provided in paragraph (2), such criteria may provide (A) that 
children from low-income families shall be eligible for 
participation in programs assisted under this subchapter if 
their families' incomes are below the poverty line, or if their 
families are eligible or, in the absence of child care, would 
potentially be eligible for public assistance; and (B) pursuant 
to such regulations as the Secretary shall prescribe, [that 
programs] that (i) programs assisted under this subchapter may 
include, to a reasonable extent, participation of children in 
the area served who would benefit from such programs but whose 
families do not meet the low-income criteria prescribed 
pursuant to clause (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) The Secretary shall not prescribe any fee schedule or 
other-wise provide for the charging of any fees for 
participation in Head Start programs, unless such fees are 
authorized by legislation here-after enacted. Nothing in this 
subsection shall be construed to prevent the families of 
children who participate in Head Start programs and who are 
willing and able to pay the full cost of such participation 
from doing so. 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 partnership. The copayment 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) Each Head Start program operated in a community shall 
be permitted to provide more than 1 year of Head Start services 
to eligible children (age 3 compulsory school attendance) in 
the State. Each Head Start program operated in a community 
shall be permitted to recruit and accept applications for 
enrollment of children throughout the year.

           *       *       *       *       *       *       *


SEC. 645A. EARLY HEAD START PROGRAMS FOR FAMILIES WITH INFANTS AND 
                    TODDLERS.

    (a) In General.--The Secretary shall make grants, in 
accordance with the provisions of this section [for--
          [(1) programs providing] for programs providing 
        family-centered services for low-income families with 
        very young children designed to promote the development 
        of the children, and to enable their parents to fulfill 
        their roles as parents and to move toward self-
        sufficiency[; and].
          [(2) provision of training and technical assistance 
        to entities carrying out programs, and evaluation of 
        programs, that were supported under the Comprehensive 
        Child Development Act (42 U.S.C. 9881 et seq.), as in 
        effect on the day before the date of enactment of this 
        section.]
    (b) Scope and Design of Programs.--In carrying out a 
program described in subsection (a), an entity receiving 
assistance under this section shall--
          (1) * * *

           *       *       *       *       *       *       *

          (5) coordinate service with services provided by 
        programs in the State and programs in the community 
        (including programs for infants and toddlers with 
        disabilities)  to ensure a comprehensive array of 
        services (such as health and mental health services);

           *       *       *       *       *       *       *

    (c) Persons Eligible To Participate.--Persons who may 
participate in programs described in [subsection (a)(1)] 
subsection (a) include--

           *       *       *       *       *       *       *

          (2) families with children under age [3 (or under age 
        5, in the case of children served by an entity 
        specified in subsection (e)(3));] 3;

           *       *       *       *       *       *       *

    (d) Eligible Service Providers.--* * *

           *       *       *       *       *       *       *

          [(2) entities that, on the day before the date of 
        enactment of this section, were operating
                  [(A) Parent-Child Centers receiving financial 
                assistance under section 640(a)(4), as in 
                effect on such date; or
                  [(B) programs receiving financial assistance 
                under the Comprehensive Child Development Act, 
                as in effect on such date; and]
          [(3)] (2) other public entities, and nonprofit 
        private entities, capable of providing child and family 
        services that meet the standards for participation in 
        programs under this subchapter and meet such other 
        appropriate requirements relating to the activities 
        under this section as the Secretary may establish.
    [(e) Time-Limited Priority for Certain Entities.--
          [(1) In General.--From amounts allotted pursuant to 
        paragraphs (2) and (4) of section 640(a), the Secretary 
        shall provide financial assistance in accordance with 
        paragraphs (2) through (4).
          [(2) Parent-child centers.--The Secretary shall make 
        financial assistance available under this section for 
        each of fiscal years 1995, 1996, and 1997 to any entity 
        that--
                  [(A) complies with subsection (b); and
                  [(B) received funding as a Parent-Child 
                Center pursuant to section 640(a)(4), as in 
                effect on the day before the date of enactment 
                of this section, for fiscal year 1994.
          [(3) Comprensive child development centers.--
                  [(A) In the case of an entity that received a 
                grant for fiscal year 1994 to operate a project 
                under the Comprehensive Child Development Act, 
                the Secretary
                          [(i) shall make financial assistance 
                        available under this section, in a 
                        comparable amount and scope to the 
                        assistance provided for fiscal year 
                        1994, for the duration of the project 
                        period specified in the grant award to 
                        such entity under such Act; and
                          [(ii) shall permit such entity, in 
                        carrying out activities assisted under 
                        this section, to serve children from 
                        birth through age 5.
                  [(B) In the case of an entity that received a 
                grant for fiscal year 1989 to operate a project 
                under the Comprehensive Child Development Act, 
                the Secretary shall make assistance available 
                under this section for each of fiscal years 
                1995, 1996, and 1997 to any entity that 
                complies with subsection (b).
          [(4) Evaluations, training, and technical 
        assistance.--The Secretary shall make financial 
        assistance available under this section as necessary to 
        provide for the evaluation of, and furnishing of 
        training and technical assistance to, programs 
        specified in paragraph (3)(A).]
    [(f)] (e) Selection of [Other] Grant Recipients.--[From the 
balance remaining of the portion specified in section 
640(a)(6), after making grants to the eligible entities 
specified in subsection (e),] From the portion specified in 
section 640(a)(6), the Secretary shall award grants under this 
subsection on a competitive basis to applicants meeting the 
criteria specified in subsection (d) (giving priority to 
entities with a record of providing early, continuous, and 
comprehensive childhood development and family services).
    [(g)] (f) Distribution.--In awarding grants to eligible 
applicants under this section, the Secretary shall--
          (1) ensure an equitable national geographic 
        distribution of the grants; and
          (2) award grants to applicants proposing to serve 
        communities in rural areas and to applicants proposing 
        to serve communities in urban areas.
    [(h) Secretarial Responsibilities.--
          [(1) Guidelines.--Not later than September 30, 1994, 
        the Secretary shall develop program guidelines 
        concerning the content and operation of programs 
        assisted under this section--
                  [(A) in consultation with experts in early 
                childhood development, experts in health, and 
                experts in family services; and
                  [(B) taking into consideration the knowledge 
                and experience gained from other early 
                childhood program, including programs under the 
                Comprehensive Child Development Act, and from 
                migrant Head Start programs that serve a large 
                number of infants and toddlers.
          [(2) Standards.--Not later than December 30, 1994, 
        the Secretary shall develop and publish performance 
        standards for programs assisted under this section, and 
        a grant announcement based on the guidelines developed 
        under paragraph (1).
          [(3) Monitoring, training, technical assistance, and 
        evaluation.--In order to ensure the successful 
        operation of programs assisted under this section, the 
        Secretary shall use funds from the balance described in 
        subsection (f) to monitor the operation of such 
        programs, evaluate their effectiveness, and provide 
        training and technical assistance tailored to the 
        particular needs of such programs.]
    (g) Monitoring, Training, Technical Assistance, and 
Evaluation.--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.
    (h) Training and Technical Assistance Account.--
          (1) 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.
          (2) Activities.--Funds in the account may be used for 
        purposes including--
                  (A) 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;
                  (B) 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;
                  (C) providing ongoing training and technical 
                assistance for existing recipients of grants 
                under subsection (a) and support and program 
                planning and implementation assistance for new 
                recipients of such grants; and
                  (D) 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.

           *       *       *       *       *       *       *


                   technical assistance and training

    Sec. 648. (a) * * *

           *       *       *       *       *       *       *

          (1) ensure that the needs of local Head Start 
        agencies and programs relating to improving program 
        quality and to program expansion 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 individuals and agencies 
        carrying out Head Start programs[.]; and
          (3) ensure the provision of technical assistance to 
        assist Head Start agencies, entities carrying out other 
        child care and early childhood programs, communities, 
        and States in collaborative efforts to provide quality 
        full-working-day, full calendar year services, 
        including technical assistance related to identifying 
        and assisting in resolving barriers to collaboration.
    (c) In allocating resources for technical assistance and 
training under this section, the Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) assist Head Start agencies and programs in 
        [developing] developing and implementing full-working-
        day and full-calendar-year programs where community 
        need is clearly identified and making the transition to 
        such programs, with particular attention to involving 
        parents and programming for children throughout [a 
        longer day;] 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;

           *       *       *       *       *       *       *

          (7) assist in efforts to secure and maintain adequate 
        facilities for Head Start programs[; and];
          (8) assist Head Start agencies in developing 
        innovative program models, including mobile and home-
        based programs[.]; and
          (9) assist Head Start agencies in--
                  (A) ensuring the school readiness of 
                children; and
                  (B) meeting the education performance 
                standards described in this subchapter.

           *       *       *       *       *       *       *

    (e) The Secretary shall provide, either directly or through 
grants or other arrangements, funds from programs authorized 
under this subchapter to support an organization to administer 
a centralized child development and national assessment program 
leading to recognized credentials for personnel working in 
early childhood development and child care programs, training 
for personnel providing services to non-English language 
background children (including services to promote the 
acquisition of the English language), training for personnel in 
helping children cope with community violence, and resource 
access projects for personnel working with disabled children.

SEC. 648A. STAFF QUALIFICATIONS AND DEVELOPMENT.

    (a) Classroom Teachers.--
          (1) Degree requirements.--The Secretary shall ensure 
        that not later than September 30, 1996, each Head Start 
        classroom in a center-based program is assigned one 
        teacher who has--
                  (A) demonstrated competency to perform 
                functions that include--
                          (i) 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 oral language, 
                        their understanding and use of 
                        increasingly complex and varied 
                        vocabulary, their appreciation of 
                        books, and their problem solving 
                        abilitie;
                          (ii) establishing and maintaining a 
                        safe, healthy learning environment;
                          (iii) supporting the social and 
                        emotional development of children; and
                          (iv) 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; and
                  [(A)] (B)(i) a child development associate 
                (CDA) credential that is appropriate to the age 
                of the children being served in center-based 
                programs;
                  [(B)] (ii) a State-awarded certificate for 
                preschool teachers that meets or exceeds the 
                requirements for a child development associate 
                credential;
                  [(C)] (iii) an associate, a baccalaureate, or 
                an advanced degree in early childhood 
                education; or
                  [(D)] (iv) 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.
          [(2) Waiver.--On request, the Secretary shall grant a 
        180-day waiver of the requirements of paragraph (1) 
        with respect to an individual who--
                  [(A) is first employed after September 30, 
                1996, by a Head Start agency as a teacher for a 
                Head Start classroom;
                  [(B) is enrolled in a program that grants any 
                credential, certificate, or degree specified in 
                subparagraph (A), (B), (C), or (D) of paragraph 
                (1); and
                  [(C) will receive such credential under the 
                terms of such program not later than 180 days 
                after beginning employment as a teacher with 
                such agency.]
          (2) Waiver.--On request, the Secretary shall grant a 
        180-day waiver of the requirements of paragraph (1)(B), 
        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 (1)(B), with respect to an 
        individual who--
                  (A) is enrolled in a program that grants any 
                such credential, certificate, or degree; and
                  (B) 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.

           *       *       *       *       *       *       *


SEC. 649. RESEARCH, DEMONSTRATIONS, AND EVALUATION.

    (a) In General.--
          (1) Requirement; general purposes.-- * * *

           *       *       *       *       *       *       *

    (d) Specific Objectives.--The research, demonstration, and 
evaluation activities under this subchapter shall include 
components designed to--
          (1) * * *

           *       *       *       *       *       *       *

          (6) provide for disseminating and promoting the use 
        of the findings from such research, demonstration, and 
        evaluation activities[; and];
          (7) promote exploration of areas in which knowledge 
        is insufficient, and that will otherwise contribute to 
        fulfilling the purposes of this subchapter[.]; and
          (8) 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.
The Secretary shall ensure that an appropriate entity carries 
out a study described in paragraph (8), and prepares and 
submits to the appropriate committees of Congress a report 
containing the results of the study, not later than September 
30, 2002.

           *       *       *       *       *       *       *

    (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 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 
        enter into a grant, 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, 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 
                        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 2 interim reports on the research. 
                The first interim report shall describe the 
                design of the research, and the rationale for 
                the design, including a description of how 
                potential sources of variation in impact of 
                Head Start programs have been considered in 
                designing the research. The second interim 
                report shall describe the status of the 
                research and preliminary findings of the 
                research, as appropriate.
                  (B) Submission of final report.--The 
                organization shall prepare and submit to the 
                Secretary a final report containing the 
                findings of the research.
                  (C) Transmittal of reports to congress.--
                          (i) In general.--The Secretary shall 
                        transmit, to the committees described 
                        in clause (ii), the first interim 
                        report by September 30, 1999, the 
                        second interim report by September 30, 
                        2001, and the final report by September 
                        30, 2003.
                          (ii) Committees.--The committees 
                        referred to in clause (i) are the 
                        Committee on Education and the 
                        Workforce of the House of 
                        Representatives and the Committee on 
                        Labor and Human Resources of the 
                        Senate.
          (8) Definition.--In this subsection, the term 
        ``impact'', used with respect to a Head Start program, 
        means a difference in an outcome for a participant in 
        the program that would not have occurred without the 
        participation in the program.
    (g) 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) of the Head Start Act (42 U.S.C. 9835(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--
                  (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 cognitive and social 
                development of children receiving services 
                under the this subchapter.

SEC. 650. REPORTS.

           *       *       *       *       *       *       *


          (1) * * *

           *       *       *       *       *       *       *

          (13) a summary of information concerning the 
        research, [demonstration,] and evaluation activities 
        conducted under section 649, including--

           *       *       *       *       *       *       *


COMMUNITY SERVICES BLOCK GRANT ACT

           *       *       *       *       *       *       *


          [Subtitle B--Community Services Block Grant Program

                              [short title

    [Sec. 671. this subtitle may be cited as the ``Community 
Services Block Grant Act''.

                 [community services grants authorized

    [Sec. 672. (a) The Secretary is authorized to make grants 
in accordance with the provisions of this subtitle, to States 
to ameliorate the causes of poverty in communities within the 
State.
    [(b) There are authorized to be appropriated $451,500,000 
for fiscal year 1990, $451,500,000 for fiscal year 1991, 
$460,000,000 for fiscal year 1992, $480,000,000 for fiscal year 
1993, and $500,000,000 for fiscal year 1994 to carry out the 
provisions of this subtitle (other than section 681A).

                              [definitions

    [Sec. 673. For purposes of this subtitle:
          [(1) The term ``eligible entity'' means any 
        organization which was officially designated a 
        community action agency or a community action program 
        under the provisions of section 210 of the Economic 
        Opportunity Act of 1964 for fiscal year 1981, or which 
        came into existence during fiscal year 1982 as a direct 
        successor in interest to such a community action agency 
        or community action program and meets all the 
        requirements under section 675(c)(3) of this Act with 
        respect to the composition of the board, unless such 
        community action agency or a community action program 
        lost its designation under section 210 of such Act as a 
        result of a failure to comply with the provisions of 
        such Act. The term ``eligible entity'' also includes 
        any limited purpose agency designated under title II of 
        the Economic Opportunity Act of 1964 for fiscal year 
        1981 which served the general purposes of a community 
        action agency under title II of such Act, unless such 
        designated agency lost its designation under title II 
        of such Act as a result of a failure to comply with the 
        provisions of such Act, any grantee which received 
        financial assistance under section 222(a)(4) of the 
        Economic Opportunity Act of 1964 in fiscal year 1981, 
        and any organization to which a State which applied for 
        and received a waiver from the Secretary under Public 
        Law 98-139 made a grant under this Act in fiscal year 
        1984. If any geographic area of a State is not, or 
        ceases to be, served by an eligible entity, the chief 
        executive officer of the State may decide to serve such 
        a new area by--
                  [(A) requesting an existing eligible entity 
                which is located and provides services in an 
                area contiguous to the new area to serve the 
                new area;
                  [(B) if no existing eligible entity is 
                located and provides services in an area 
                contiguous to the new area, requesting the 
                eligible entity located closest to the area to 
                be served or an existing eligible entity 
                serving an area within rea-sonable proximity of 
the new area to provide services in the new area; or
                  [(C) where no existing eligible entity 
                requested to serve the new area decides to do 
                so, designating any existing eligible entity, 
                any organization which has a board meeting the 
                requirements of section 675(c)(3) or any 
                political subdivision of the State to serve the 
                new area. In making a designation under this 
                subparagraph, such chief executive officer 
                shall give priority to such organization. Such 
                officer's designation of an organization which 
                has a board meeting the requirements of section 
                675(c)(3) or a political subdivision of the 
                State to serve the new area shall qualify such 
                organization as an eligible entity under this 
                Act.
          [(2) The term ``poverty line'' means the official 
        poverty line defined by the Office of Management and 
        budget based on Bureau of Census data. The Secretary 
        shall revise the poverty line annually (or at any 
        shorter interval the Secretary deems feasible and 
        desirable) which shall be used as a criterion of 
        eligibility in community service block grant programs. 
        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 the State determines that it serves the 
        objectives of the block grant established by 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) The term ``Secretary'' means the Secretary of 
        Health and Human Services.
          [(4) The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, the Virgin Islands, American Samoa, 
        the Commonwealth of the Northern Mariana Islands, and 
        the Trust Territory of the Pacific Islands.

                           [state allocations

    [Sec. 674. (a)(1) The Secretary shall from the amount 
appropriated under section 672 for each fiscal year which 
remains after--
          [(A) the Secretary makes the apportionment required 
        in subsection (b)(1); and
          [(B) the Secretary determines the amount necessary 
        for the purposes of section 681(c);
allot to each State an amount which 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 part, except that no State shall 
receive less than one-quarter of 1 percent of the amount 
appropriated under section 672 for such fiscal year
    [(2)(A) Subject to subparagraphs (B) and (C), if the amount 
appropriated under section 672 for each fiscal year which 
remains after--
          [(i) the Secretary makes the apportionment required 
        in subsection (b)(1); and
          [(ii) the Secretary determines the amount necessary 
        for the purposes of section 681(c);
exceeds $345,000,000, the Secretary shall allot to each State 
not less than one-half of 1 percent of the amount appropriated 
under section 672 for such fiscal year.
    [(B) Subparagraph (A) shall not apply with respect to a 
fiscal year if the amount allotted under paragraph (1) to any 
State is less than the amount allotted under such paragraph to 
such State for fiscal year 1990.
    [(C) The amount allotted under subparagraph (A) to a State 
shall be reduced, if necessary, so that the aggregate amount 
allotted to such State under such subparagraph and paragraph 
(1) does not exceed 140 percent of the aggregate amount so 
allotted to such State for the fiscal year preceding the fiscal 
year for which a determination is made under this paragraph.
    [(3) For purposes of this subsection, the term ``State'' 
does not include Guam, American Samoa, the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands.
    [(b)(1) The Secretary shall apportion one-half of 1 percent 
of the amount appropriated under section 672 for each fiscal 
year on the basis of need among Guam, American Samoa, the 
Virgin Islands, the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands.
    [(2) Each jurisdiction to which paragraph (1) applies may 
receive grants under this subtitle upon an application 
submitted to the Secretary containing provisions which describe 
the programs for which assistance is sought under this 
subtitle, and which are consistent with the requirements of 
section 675.
    [(c)(1) If, with respect to any State, the Secretary--
          [(A) 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
          [(B) 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 which would otherwise 
be allotted to such State under this subtitle for the fiscal 
year the amount determined under paragraph (2).
    [(2) The Secretary shall reserve for the purpose of 
paragraph (1) from sums that would otherwise be allotted to 
such State not less than 100 percent of an amount which bears 
the same ratio to the State's allotment for the fiscal year 
involved as the population of all eligible Indians for whom a 
determination under this paragraph has been made bears to the 
population of all individuals eligible for assistance under 
this subtitle in such State.
    [(3) The sums reserved by the Secretary on the basis of a 
determination under this subsection shall be granted to the 
Indian tribe or tribal organization serving the individuals for 
whom such a determination has been made.
    [(4) In order for an Indian tribe or tribal organization to 
be eligible for an award for a fiscal year under this 
subsection, it shall submit to the Secretary a plan for such 
fiscal year which meets such criteria as the Secretary may 
prescribe by regulation.
    [(5) The terms ``Indian tribe'' and ``tribal organization'' 
means those tribes, bands, or other organized groups of Indians 
recognized in the State in which they reside or considered by 
the Secretary of the Interior to be an Indian tribe or an 
Indian organization for any purpose.

                     [applications and requirements

    [Sec. 675. (a) Each State desiring to receive an allotment 
for a fiscal year under this subtitle shall submit an 
application to the Secretary. Each such application shall be in 
such form as the Secretary shall require. Each such application 
shall contain assurances by the chief executive officer of the 
State that the State will comply with subsection (b) and will 
meet the conditions enumerated in subsection (c).
    [(b) After the expiration of the first fiscal year in which 
a State received funds under this subtitle, no funds shall be 
alloted to such State for any fiscal year under this subtitle 
unless the legislature of the State conducts public hearings on 
the proposed use and distribution of funds to be provided under 
this subtitle for such fiscal year.
    [(c) As part of the annual application required by 
subsection (a), the chief executive officer of each State shall 
certify that the State agrees to--
          [(1) use the funds available under this subtitle--
                  [(A) to provide a range of services and 
                activities having a measurable and potentially 
                major impact on causes of poverty in the 
                community or those areas of the community where 
                poverty is a particularly acute problem;
                  [(B) to provide activities designed to assist 
                low-income participants including the elderly 
                poor--
                          [(i) to secure and retain meaningful 
                        employment;
                          [(ii) to attain an adequate 
                        education;
                          [(iii) to make better use of 
                        available income;
                          [(iv) to obtain and maintain adequate 
                        housing and a suitable living 
                        environment;
                          [(v) to obtain emergency assistance 
                        through loans or grants to meet 
                        immediate and urgent individual and 
                        family needs, including the need for 
                        health services, nutritious food, 
                        housing, and employment-related 
                        assistance;
                          [(vi) to remove obstacles and solve 
                        problems which block the achievement of 
                        self-sufficiency;
                          [(vii) to achieve greater 
                        participation in the affairs of the 
                        community; and
                          [(viii) to make more effective use of 
                        other programs related to the purposes 
                        of this subtitle;
                  [(C) to provide on an emergency basis for the 
                provision of such supplies and services, 
                nutritious foodstuffs, and related services, as 
                may be necessary to counteract conditions of 
                starvation and malnutrition among the poor;
                  [(D) to coordinate and establish linkages 
                between governmental and other social services 
                programs to assure the effective delivery of 
                such services to low-income individuals; and
                  [(E) to encourage the use of entities in the 
                private sector of the community in efforts to 
                ameliorate poverty in the community;
          [(2)(A) use, for fiscal year 1985 and for each 
        subsequent fiscal year, not less than 90 percent of the 
        funds allotted to the State under section 674 to make 
        grants to use for the purposes described in clause (1) 
        to eligible entities (as defined in section 673(1)) or 
        to organizations serving seasonal or migrant 
        farmworkers, except that no more than 7 percent of the 
        funds available for this subclause shall be granted to 
        organizations which were not eligible entities during 
        the previous fiscal year; and
          [(B) provide assurances that the State will not 
        expend more than the greater of $55,000 or 5 percent of 
        it allotment under section 674 for administrative 
        expenses at the State level;
          [(3) provide assurances that, in the case of a 
        community action agency or nonprofit private 
        organization, each board will be constituted so as to 
        assure that (A) one-third of the members of the board 
        are elected public officials, currently holding office, 
        or their representatives, except that if the number of 
        elected officials reasonably available and willing to 
        serve is less than one-third of the membership of the 
        board, membership on the board of appointive public 
        officials may be counted in meeting such one-third 
        requirement; (b) at least one-third of the members are 
        persons chosen in accordance with democratic selection 
        procedures adequate to assure that they are 
        representative of the poor in the area served; and (C) 
        the remainder of the members are officials or members 
        of business, industry, labor, religious, welfare, 
        education, or other major groups and interests in the 
        community;
          [(4) give special consideration in the designation of 
        local community action agencies under this subtitle to 
        any community action agency which is receiving funds 
        under any Federal antipoverty program on the date of 
        the enactment of this Act, except that (A) the State 
        shall, before giving such special consideration, 
        determine that the agency involved meets program and 
        fiscal requirements established by the State; and (B) 
        if there is no such agency because of any change in the 
        assistancefurnished to programs for economically 
disadvantaged persons, the State shall give special consideration in 
the designation of community action agencies to any successor agency 
which is operated in substantially the same manner as the predecessor 
agency which did receive funds in the fiscal year preceding the fiscal 
year for which the determination is made;
          [(5) provide assurances that the State may transfer 
        funds, but not to exceed 5 percent of its allotment 
        under section 674, for the provisions set forth in this 
        subtitle to services under the Older Americans Act of 
        1965, the Head Start program under subchapter B of 
        chapter 8 of subtitle A of this title, the energy 
        crisis intervention program under title XXVI of this 
        Act (relating to low-income home energy assistance), or 
        the Emergency Food Assistance Act of 1983;
          [(6) prohibit any political activities in accordance 
        with subsection (e);
          [(7) prohibit any activities to provide voters and 
        prospective voters with transportation to the polls or 
        provide similar assistance in connection with an 
        election or any voter registration activity;
          [(8) provide for coordination between antipoverty 
        programs in each community, where appropriate, with 
        emergency energy crisis intervention programs under 
        title XXVI of this Act (relating to low-income home 
        energy assistance) conducted in such community;
          [(9) provide that fiscal control and fund accounting 
        procedures will be established as may be necessary to 
        assure the proper disbursal of and accounting for 
        Federal funds paid to the State under this subtitle, 
        including procedures for monitoring the assistance 
        provided under this subtitle, and provide that at least 
        every year each State shall prepare, in accordance with 
        subsection (f), an audit of its expenditures of amounts 
        received under this subtitle and amount transferred to 
        carry out the purposes of this subtitle;
          [(10) permit and cooperate with Federal 
        investigations undertaken in accordance with section 
        679;
          [(11) provide assurances that any community action 
        agency or migrant and seasonal farmworker organization 
        which received funding in the previous fiscal year 
        under this Act will not have its present or future 
        funding terminated under this Act, or reduced below the 
        proportional share of funding it received in the 
        previous fiscal year, unless after notice, and 
        opportunity for hearing on the record, the State 
        determines that cause existed for such termination or 
        such reduction subject to the procedures and review by 
        the Secretary as provided in section 676A. For purposes 
        of making a determination with respect to a funding 
        reduction, the term ``cause'' includes--
                  [(A) a statewide redistribution of funds 
                under this subtitle to respond to--
                          [(i) the results of the most recently 
                        available census or other appropriate 
                        data;
                          [(ii) the establishment of a new 
                        eligible entity;
                          [(iii) severe economic dislocation; 
                        and
                  [(B) the failure of an eligible entity to 
                comply with the terms of its agreement to 
                provide services under this subtitle; and
          [(12) in the case of a State which applied for and 
        received a waiver from the Secretary under Public Law 
        98-139, provide assurances that funds will not be 
        provided under this subtitle by such State to an 
        organization to which such State made a grant under 
        this subtitle in fiscal year 1984 unless such 
        organization allows, before expending such funds, low-
        income individuals to comment on the uses for which 
        such organization proposes to expend such funds.
The Secretary may not prescribe the manner in which the States 
will comply with the provisions of this subsection. The 
Secretary shall provide to the chief executive officer of each 
State appropriate information regarding designated limited 
purpose agencies and grantees which meet the requirements of 
the second sentence of section 673(1).
    [(d)(1) In addition to the requirements of subsection (c), 
the chief executive officer of each State shall prepare and 
furnish to the Secretary a plan which contains provisions 
describing how the State will carry out the assurances 
contained subsection (c). The chief executive officer of each 
State may revise any plan prepared under this paragraph and 
shall furnish the revised plan to the Secretary.
    [(2) Each plan prepared under paragraph (1) shall be made 
available for public inspection within the State in such a 
manner as will facilitate review of, and comment on, the plan.
    [(e) For purposes of chapter 15 of title 5, United States 
Code, any nonprofit private organization receiving assistance 
under this subtitle which has responsibility for planning, 
developing, and coordinating community antipoverty programs 
shall be deemed to be a State or local agency. For purposes of 
clauses (1) and (2) of section 1502(a) of such title, any such 
organization receiving assistance under this subtitle shall be 
deemed to be a State or local agency.
    [(f) Each audit required by subsection (c)(9) 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. Within 30 days after the completion of 
each audit, the chief executive officer of the State shall 
submit a copy of such audit to the legislature of the State and 
to the Secretary.
    [(g) 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.
    [(h) The Comptroller General of the United States shall, 
from time to time, evaluate the expenditures by States of 
grants under this subtitle in order to assure that expenditures 
are consistent with the provisions of this subtitle and to 
determine the effectiveness of the State in accomplishing the 
purposes of this subtitle.

                            [Administration

    [Sec. 676. (a) There is established in the Department of 
Health and Human Services an Office of Community Services. The 
Office shall be headed by a Director.
    [(b) The Secretary shall carry out his functions under this 
sub-title through the Office of Community Services established 
in subsection (a).

    [Procedures for a Review of Termination or Reduction of Funding

    [Sec. 676A. (a) Whenever a State violates the assurances 
contained in section 675(c)(11) and terminates or reduces the 
funding of a community action agency or migrant and seasonal 
farmworker organization prior to the completion of the State's 
hearing and the Secretary's review as required in section 679 
of this Act, the Secretary shall assume responsibility for 
providing financial assistance to the community action agency 
or migrant and seasonal farmworker organization affected. The 
allotment for the State shall be reduced by an amount equal to 
the funds provided under this section by the Secretary to such 
agency or organization.
    [(b) The Secretary shall upon request review any 
termination or reduction of funding to a community action 
agency or migrant and seasonal farmworker organization 
protected by a State's assurance under section 675(c)(11). Such 
review shall be conducted promptly and shall be based upon the 
record and no determination shall become effective until a 
finding by the Secretary confirming the State's finding of 
cause.
    [(c) The Secretary shall conduct the review under 
subsection (b) through the Office of Community Services, which 
shall promptly conduct such review and issue a written 
determination together with the reasons of the Secretary 
therefor.

                     [Nondiscrimination Provisions

    [Sec. 677. (a) No person shall on the ground 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 or with respect to an 
otherwise qualified handicapped individual as provided in 
section 504 of the Rehabilitation Act of 1973 shall also apply 
to any such program or activity.
    [(b) Whenever the Secretary determines that a State that 
has received a payment under this subtitle has failed to comply 
with subsection (a) or an applicable regulation, he shall 
notify the chief executive officer of the State and shall 
request him to 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 (1) refer the matter to the Attorney General with 
a recommendation that an appropriate civil action be 
instituted; (2) exercise the powers and functions provided by 
title VI of the Civil Rights Act of 1964, the Age 
Discrimination Act of 1975, or section 504 of the 
Rehabilitation Act of 1973, as may be applicable; or (3) take 
such other action as may be provided by law.
    [(c) When a matter is referred to the Attorney General 
pursuant to subsection (b), or whenever he has reason to 
believe that the State is engaged in a pattern or practice in 
violation of the provisions of this section, 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.

                          [Payments to States

    [Sec. 678. (a) From its allotment under section 674, the 
Secretary shall make payments to each State in accordance with 
section 203 of the Intergovernmental Cooperation Act of 1968 
(42 U.S.C. 42313), for use under this subtitle.
    [(b) Payments to a State from its allotment for any fiscal 
year shall be expended by the State in such fiscal year or in 
the succeeding fiscal year.

                              [Withholding

    [Sec. 679. (a)(1) The Secretary shall, after adequate 
notice and an opportunity for a hearing conducted within the 
affected State, withhold funds from any State which does not 
utilize its allotment substantially in accordance with the 
provisions of this subtitle and the assurances such State 
provided under section 675.
    [(2) 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 or the assurances provided by the 
State under section 675. For purposes of this paragraph, a 
violation of any one of the assurances contained in section 
675(c) that constitutes a disregard of that assurance shall be 
considered a serious complaint.
    [(b)(1) The Secretary shall conduct in several States in 
each fiscal year evaluations and 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 subsections (a) and 
(b) of section 675, and clauses (1) through (11) of subsection 
(c) of such section. Each such evaluation shall include 
identifying the impact that assistance furnished under this 
subtitle has on children, pregnant adolescents, homeless 
families, and the elderly poor. A report of the evaluation, 
together with recommendations of improvements designed to 
enhance the benefit and impact to people in need, will be sent 
to each State evaluated. Upon receiving the report the State 
will then submit a plan of action in response to the 
recommendation contained in the report. The results of the 
evaluation shall be submitted annually to the Chairman of the 
Committee on Education and Labor of the House of 
Representatives and the Chairman of the Committee on Labor and 
Human Resources of the Senate.
    [(2) Whenever the Secretary determines that there is a 
pattern of complaints 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.
    [(3) The Comptroller General of the United States shall 
conduct an investigation of the use of funds received under 
this subtitle by a State in order to ensure compliance with the 
provisions of this subtitle.
    [(c) Pursuant to an investigation conducted under 
subsection (b), a State shall make appropriate books, document, 
papers, and records available to the Secretary or 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 therefor.

             [limitation on use of grants for construction

    [Sec. 680. (a) Except as provided in subsection (b), grants 
made under this subtitle (other than amounts made available 
under section 681(c)) 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.
    [(b) The Secretary may waive the limitation contained in 
subsection (a) upon the State's request for such a waiver if he 
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 State's ability to carry out 
the purposes of this subtitle.

                 [discretionary authority of secretary

    [Sec. 681. (a) The Secretary is authorized to make grants, 
loans, or guarantees to States and public agencies and private 
nonprofit organizations, or to enter into contracts or jointly 
financed cooperative arrangements with States and public 
agencies and private nonprofit organizations, to provide for--
          [(1) training related to the purposes of this 
        subtitle, including national conferences, newsletters, 
        and collection and dissemination of data about programs 
        and projects assisted under this subtitle;
          [(2) ongoing activities of national or regional 
        significance related to the purposes of this subtitle, 
        including special emphasis programs for--
                  [(A) special programs of assistance, awarded 
                on a competitive basis, to private, locally 
                initiated, nonprofit community development 
                corporations, (or affiliates of such 
                corporations) governed by a board consisting of 
                residents of the community and business and 
                civic leaders, which sponsor enterprises 
                providing employment and business development 
                opportunities for low-income residents of the 
                community designed to increase business and 
                employment opportunities in the community;
                  [(B) Rural Development Loan Fund revolving 
                loans and guarantees under subchapter A of 
                chapter 8 of subtitle A of this title;
                  [(C) community development credit union 
                programs administered under subchapter A of 
                chapter 8 of subtitle A of this title;
                  [(D) technical assistance and training 
                programs in the planning and development of 
                rural housing (including rental housing for 
                low-income individuals) and community 
                facilities (in selecting entities to carry out 
                such programs, the Secretary shall give 
                priority to private nonprofit organizations 
                that before the date of the enactment of the 
                Human Services Reauthorization Act of 1986 
                carried out such programs under this 
                subparagraph);
                  [(E) assistance for migrants and seasonal 
                farmworkers; and
                  [(F) national or regional programs designed 
                to provide instructional activities described 
                in subsection (b) for low-income youth; and
          [(3) training and technical assistance to aid States 
        in carrying out their responsibilities under this 
        subchapter.
In addition, grants, loans, and guarantees made pursuant to 
this subsection may be made to a private nonprofit organization 
applying jointly with a business concern.
    [(b) Any instructional activity carried out under 
subsection (a)(2)(F) 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) and shall include--
          [(1) access to the facilities and resources of such 
        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 sections 1471(8) and 1471(21) of 
        the Elementary and Secondary Education Act of 1965); 
        and
          [(5) enrichment instruction and information on 
        matters relating to the well-being of youth, such as 
        educational opportunities and study practices, the 
        prevention of drug and alcoholabuse, health and 
nutrition, career opportunities, and job responsibilities.
    [(c)(1) The final reports submitted by recipients of 
assistance under this section on projects completed with such 
assistance shall be summarized and reported by the Secretary 
annually to the Chairman of the Committee on Education and 
Labor of the House of Representatives and the Chairman of the 
Committee on Labor and Human Resources of the Senate. The 
report shall contain a list of recipients who have received 
assistance under this section outside of the competitive 
process.
    [(2) The Secretary shall, at the end of each fiscal year, 
prepare and distribute a catalog listing all the projects 
assisted under clause (A) of subsection (a)(2) in such fiscal 
year. The catalog shall include--
          [(A) a description of each project;
          [(B) an identification of the agency receiving the 
        award, including the name and address of the principal 
        investigator;
          [(C) a description of the project objectives; and
          [(D) a statement of the accomplishments of the 
        project.
    [(d) Of the amounts appropriated under section 672(b) for 
any fiscal year, not more than 9 percent of such amounts shall 
be available to the Secretary for purposes of carrying out this 
section, section 682, and subchapter A of chapter 8 of subtitle 
A of this title.

                     [community food and nutrition

    [Sec. 681A. (a) The Secretary may through grants to public 
and private nonprofit agencies, provide for community-based, 
local, Statewide, and national programs--
          [(1) to coordinate existing private and public food 
        assistance resources, whenever such coordination is 
        determined 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 new 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 people.
    [(b)(1) Of the amount appropriated for a fiscal year to 
carry out this section, the Secretary shall allot funds for 
grants under subsection (a) as follows:
          [(A) From 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 60 
        percent of the amount appropriated for such fiscal year 
        as the low-income and unemployed population of such 
        State bear to the low-income and unemployed populations 
        of all the States.
          [(B) From 40 percent of such amount (but not to 
        exceed $2,400,000), the Secretary shall allot for 
        grants on a competitive basis to eligible agencies for 
        local and statewide programs.
    [(2) Any amounts appropriated for a fiscal year to carry 
out this section in excess of $6,000,000 shall be allotted as 
follows:
          [(A) The Secretary shall use 40 percent of such 
        excess to make allotments for grants under subsection 
        (a) to eligible agencies for statewide programs in each 
        State in an aggregate amount that bears the same ratio 
        to 40 percent of such excess as the low-income and 
        unemployed populations of such State bears to the low-
        income and unemployed populations of all States.
          [(B) The Secretary shall use 40 percent of such 
        excess to award grants under subsection (a) on a 
        competitive basis to eligible agencies for local and 
        statewide programs.
          [(C) The Secretary shall use the remaining 20 percent 
        of such excess to award grants under subsection (a) on 
        a competitive basis to eligible agencies for nationwide 
        programs, including programs benefiting Native 
        Americans and migrant farm workers. In any fiscal year, 
        the Secretary may not make grants under this 
        subparagraph to a particular eligible agency in an 
        aggregate amount exceeding $300,000.
    [(3) For purposes of paragraphs (1)(A) and (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) From the amounts allocated under paragraphs (1)(A) and 
(2)(A), the minimum total allotment for each State for each 
fiscal year shall by--
          [(A) $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;
          [(B) $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
          [(C) $30,000 if the total amount appropriated to 
        carry out this section is not less than $15,000,000.
For purposes of this paragraph, the term ``State'' does not 
include Guam, American Samoa, the Virgin Islands, the Northern 
Mariana Islands, and the Trust Territory of the Pacific 
Islands.
    [(5) From funds allotted under paragraphs (1)(B) and (2)(B) 
in any fiscal year, the Secretary may not make grants under 
subsection (a) to an eligible agency in an aggregate amount 
exceeding $50,000.
    [(c) For each fiscal year, the Secretary shall prepare and 
submit, to the Committee on Education and Labor of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate, a report concerning the grants awarded under 
this section. Such report shall include--
          [(1) a list of grantees;
          [(2) the amount of funding awarded to each grantee; 
        and
          [(3) a summary of the activities performed by 
        grantees with funds awarded under this section and a 
        description of the mannerin which such activities meet 
the objectives described in subsection (a).
    [(d) There is authorized to be appropriated $3,000,000 for 
fiscal year 1990, $10,000,000 for fiscal year 1991, $15,000,000 
for fiscal year 1992, $20,000,000 for fiscal year 1993, and 
$25,000,000 for fiscal year 1994 to carry out this section.

                             [annual report

    [Sec. 682. (a)(1) For each fiscal year beginning after 
September 30, 1991, the Secretary shall, by contract with an 
entity that is knowledgeable about programs and projects 
assisted under this subtitle, prepare a report containing the 
following information;
          [(A) The identity of each eligible entity, agency, 
        organization, and person that receives, directly or 
        indirectly, funds to carry out this subtitle in such 
        fiscal year.
          [(B) With respect to each particular purpose or 
        activity referred to in section 675(c)(1)--
                  [(i) the aggregate amount of such funds 
                expended in such fiscal year to achieve such 
                purpose or carry out such activity; and
                  [(ii) the number of individuals who directly 
                benefited from the amount so expended.
    [(2) For any fiscal year beginning after September 30, 
1991, the Secretary may, by contract, include in such report 
any additional information the Secretary considers to be 
appropriate to carry out this subtitle, except that the 
Secretary may not require a State to provide such additional 
information until the expiration of the 1-year period beginning 
on the date the Secretary notifies such State that such 
additional information will be required to be provided by such 
State.
    [(3) The Secretary may not carry out this subsection by 
entering into a contract with any State, eligible entity, 
agency, organization, or person that receives, directly or 
indirectly, funds to carry out this subtitle.
    [(b) Not later than 180 days after the end of the fiscal 
year for which a report is required by subsection (a) to be 
prepared, the Secretary shall transmit to the Committee on 
Education and Labor of the House of Representatives and the 
Committee on Labor and Human Resources of the Senate--
          [(1) such report in the form in which it was received 
        by the Secretary; and
          [(2) any comments the Secretary may have with respect 
        to such report.
    [(c) Of the funds made available under section 681(d), not 
more than $250,000 shall be available to carry out this 
section.

    [repealer; reauthorization provisions; technical and conforming 
                               provisions

    [Sec. 683 (a) Effective October 1, 1981, the Economic 
Opportunity Act of 1964, other than titles VIII and X of such 
Act, is repealed.
    [(b) There is authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 1982, 1983, and 
1984, to carry out title VIII of the Economic Opportunity Act 
of 1964.
    [(c)(1) 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(2) of this Act.
    [(2) 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 
private nonprofit community organizations eligible to receive 
funds under this subtitle.
    [(3) No action or other proceeding commenced by or against 
any officer in the official capacity of such individual as an 
officer of any agency administering the Act repealed by 
subsection (a) of this section shall abate by reason of the 
enactment of this Act.

           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 financial 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.));
          (2) to accomplish the goal described in paragraph (1) 
        through--
                  (A) the strengthening of community 
                capabilities for planning and coordinating the 
                use of a broad range of Federal, State, and 
                other assistance 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 use of innovative and effective, 
                community-based approaches to attacking the 
                causes and effects of poverty and of community 
                breakdown;
                  (D) the development and implementation of all 
                programs designated to serve low-income 
                communities and groups with the maximum 
                feasible participation of residents of the 
                communities and members of the groups served, 
                so as to best stimulate and take full advantage 
                of capabilities for self-advancement and assure 
                that the programs are otherwise meaningful to 
                the intended beneficiaries of the programs; and
                  (E) the broadening of the resource base of 
                programs directed to the elimination of 
                poverty.

SEC. 673. DEFINITIONS.

    In this subtitle:
          (1) Eligible entity.--The term ``eligible entity'' 
        means an entity--
                  (A) that is an eligible entity described in 
                section 673(1) (as in effect on the day before 
                the date of enactment of the Human Services 
                Reauthorization Act of 1998) as of 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
                  (B) that has a tripartite board or other 
                mechanism described in subsection (a) or (b), 
                as appropriate, of section 676B.
          (2) Poverty line.--The term ``poverty line'' means 
        the official poverty line defined by the Secretary. The 
Secretary shall revise the poverty line annually (or at any shorter 
interval the Secretary determines to be feasible and desirable) which 
shall be used as a criterion of eligibility in the community services 
block grant program established under this subtitle. The required 
revision shall be accomplished by multiplying the official poverty line 
by the percentage change in the Consumer Price Index for All Urban 
Consumers during the annual or other interval immediately preceding the 
time at which the revision is made. Whenever a State determines that it 
serves the objectives of the block grant program established under this 
subtitle, the State may revise the poverty line to not to exceed 125 
percent of the official poverty line otherwise applicable under this 
paragraph.
          (3) Private, nonprofit organization.--The term 
        ``private, nonprofit organization'' includes a faith-
        based 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, the Commonwealth of the 
        Northern Mariana Islands, and the combined Freely 
        Associated States.

SEC. 674. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated 
$625,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of fiscal years 2000 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) not less than \1/2\ of 1 percent and not more 
        than 1 percent for activities authorized in section 
        678A (relating to training and technical assistance); 
        and
          (3) 9 percent for carrying out section 680 (relating 
        to discretionary activities).

SEC. 675. ESTABLISHMENT OF BLOCK GRANT PROGRAM.

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

SEC. 675A. DISTRIBUTION TO TERRITORIES.

    (a) Apportionment.--The Secretary shall apportion the 
amount reserved under section 674(b)(1) for each fiscal year on 
the basis of need among Guam, American Samoa, the United States 
Virgin Islands, the Commonwealth of Northern Mariana Islands, 
and the combined Freely Associated States.
    (b) Application.--Each jurisdiction to which subsection (a) 
applies may receive a grant under this subtitle 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 subtitle, and that are consistent with the 
requirements of 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 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 that noState shall receive less than \1/4\ of 1 percent 
of the amount appropriated under section 674(a) for such fiscal year.
    (b) Allotments in Years With Greater Available Funds.--
          (1) Minimum allotment.--Subject to paragraphs (2) and 
        (3), if amounts appropriated under section 674(a) for 
        each 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 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) to such State for fiscal year 1990.
          (3) Maximum allotments.--The amount allotted under 
        paragraph (1) to a State 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 fiscal year preceding the fiscal year 
        for which a determination is made under this 
        subsection.
    (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.--For purposes of this section, the term 
``State'' does not include Guam, American Samoa, and the United 
States Virgin Islands, the Commonwealth of the Northern Mariana 
Islands, and the Freely Associated States.

SEC. 675C. USES OF FUNDS.

    (a) Grants to Eligible Entities and Other Organizations.--
          (1) In general.--Not less than 90 percent of the 
        funds allotted to a State under section 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, in accordance with paragraph 
        (3).
          (3) Recapture and restribution 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) Other Activities.--
          (1) Use of remainder.--If a State uses less than 100 
        percent of the State allotment to make grants under 
        subsection (a), the State shall use the remainder of 
        the allotment (subject to paragraph (2)) for--
                  (A) providing training and technical 
                assistance to those entities in need of such 
                training and assistance;
                  (B) coordinating State-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; and
                  (G) 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 portion of 
        the State allotment that remains after the State makes 
        grants to eligible entities under subsection (a), for 
        administrative expenses, including monitoring 
        activities. The cost of activities conducted under 
        paragraph (1)(A) shall not be considered to be 
        administrative expenses.

SEC. 676. APPLICATION AND PLAN.

    (a) Designation of Lead Agency.--
          (1) Designation.--The chief executive officer of a 
        State desiring to receive an allotment under this 
        subtitle 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 1 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 allotment for the period 
                covered by the State plan; and
                  (C) conduct reviews of eligible entities 
                under section 678B.
          (3) Legislative hearing.--The State shall hold at 
        least 1 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 an allotment under this 
subtitle, 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 allotment will be used to support activitiesthat 
are designed to assist low-income families and individuals, including 
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--
                  (A) to remove obstacles and solve problems 
                that block the achievement of self-sufficiency;
                  (B) to secure and retain meaningful 
                employment;
                  (C) to attain an adequate education;
                  (D) to make better use of available income;
                  (E) to obtain and maintain adequate housing 
                and a suitable living environment;
                  (F) to obtain emergency assistance through 
                loans, grants, or other means to meet immediate 
                and urgent individual and family needs;
                  (G) to achieve greater participation in the 
                affairs of the community; and
                  (H) to make more effective use of 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 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) based on information provided by eligible 
        entities in the State, a description of--
                  (A) the service delivery system, for services 
                provided or coordinated with funds made 
                available through the allotment, 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 the allotment will be coordinated with 
                other public and private resources; and
                  (D) a description of how the funds will be 
                used to support innovative community and 
                neighborhood-based initiatives related to the 
                purposes of this subtitle;
          (4) an assurance that 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 will coordinate, and 
        establish linkages between, governmental and other 
        social services programs to assure the effective 
        delivery of such services to low-income individuals;
          (6) an assurance that the State will ensure 
        coordination between antipoverty programs in each 
        community, 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 that 
        received funding in the previous fiscal year under this 
        subtitle will not have its funding terminatedunder 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 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 faith-based 
        organizations, charitable groups, and community 
        organizations;
          (10) an assurance that the State will require each 
        eligible entity to establish procedures under which a 
        low-income individual, community organization, or 
        faith-based 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, as a condition to receipt of 
        funding by the entity 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 
        2002, participate in the Results Oriented Management 
        and Accountability System, any other performance 
        measure system established by the Secretary under 
        section 678E(b), or an alternative system for measuring 
        performance and results that meets the requirements of 
        that section, and a description of outcome measures to 
        be used to measure eligible entity performance in 
        promoting self-sufficiency, family stability, and 
        community revitalization; and
          (13) information describing how the State will carry 
        out the assurances described in this subsection.
  (c) Determinations.--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 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 to 
                provide services under this subtitle; and
          (2) a termination, the term ``cause'' includes the 
        material failure of an eligible entity to comply with 
        the terms of such an agreement and the State plan to 
        provide services under this subtitle or the consistent 
        failure of the entity to achieve performance measures 
        as determined by the State.
    (d) Procedures and Information.--The Secretary may 
prescribe procedures only 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.

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, 1 or more--
                  (A) private nonprofit organizations 
                geographically located in the unserved area 
                that meets the requirements of this subtitle: 
                or
                  (B) private nonprofit organizations (which 
                may include eligible entities) located in an 
                area contiguous to or within reasonable 
                proximity of the unserved area 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 3 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), by members that reside in the 
                neighborhood 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 
local entities that are providing 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 and implementation of 
        the program to serve low-income communities or groups.
          (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 elected officials 
                reasonably available and willing to serve on 
                the board is less than \1/3\ of the membership 
                of theboard, membership on the board of 
appointive public officials or their representatives may be counted in 
meeting such \1/3\ requirement;
                  (B) not fewer than \1/3\ of the members are 
                persons chosen in accordance with democratic 
                selection procedures adequate to assure that 
                these members are representatives of low-income 
                individuals and families in the neighborhood 
                served;
                  (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; and
                  (D)(i) each member resides in the community; 
                and
                  (ii) each representative of low-income 
                individuals and families selected to represent 
                a specific neighborhood within a community 
                under this paragraph resides in the 
                neighborhood represented by the member.
    (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 
                planning and implementation 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 planning, administration, 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 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 tribal organization shall 
submitto 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, Cooperative Agreements.--The 
Secretary shall carry out functions of this subtitle through 
grants, contracts, or cooperative agreements.

SEC. 678A. TRAINING AND TECHNICAL ASSISTANCE.

    (a) Activities.--The Secretary shall use the amounts 
reserved in section 674(b)(2) for training, technical 
assistance, planning, evaluation, and data collection 
activities related to programs carried out under this subtitle.
    (b) 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 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 network of 
        eligible entities.

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 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.

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

    (a) Determination.--If the State determines, on the basis 
of a review pursuant to subsection 678B, that an eligible 
entity materially 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 60 
days after the determination to terminate the designation or 
reduce the funding. If the review is not completed within 60 
days, the determination of the State shall become final at the 
end of the 60th day.

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 funds under this subtitle;
                  (C) prepare, at least every year (or in the 
                case of a State with a 2-year State plan, every 
                2 years) in accordance with paragraph (2) 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.--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. 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 suchaudit 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 State 
        allotment substantially 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 
        1 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 established by 
                the Secretary pursuant to subsection (b), or an 
                alternative system that meets the requirements 
                of subsection (b).
                  (B) Local agencies.--The State may elect to 
                have local agencies who 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. 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 establish 1 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 community action plans. The Secretary shall 
        provide technical assistance, including support for the 
        enhancement of electronic data systems, to States and 
        to eligible entities to enhance their capability to 
        collect and report data for such a system and to aid in 
        their participation in such a system.
          (2) Reporting requirements.--At the end of each 
        fiscal year beginning after September 30, 1999, the 
        Secretary shall, directly or by grant or contract, 
        prepare a report containing--
                  (A) a summary of the planned use of funds by 
                each State, and the eligible entities in the 
                State, under the community services block grant 
                program, as contained in each State plan 
                submitted pursuant to section 676;
                  (B) a description of how funds were actually 
                spent by the State and eligible entities in the 
                State, including a breakdown of funds spent on 
                administrative costs and on the direct delivery 
                of local services by eligible entities;
                  (C) information on the number of entities 
                eligible for funds under this subtitle, the 
                number of low-income persons served under this 
                subtitle, and such demographic data on the low-
                income populations served by eligible entities 
                as is determined by the Secretary to be 
                feasible;
                  (D) a comparison of the planned uses of funds 
                for each State and the actual uses of the 
                funds;
                  (E) a summary of each State's performance 
                results, and the results for the eligible 
                entities, as collected and submitted by the 
                States in accordance with subsection (a)(2); 
                and
                  (F) any additional information that the 
                Secretary considers to be appropriate to carry 
                out this subtitle, if the Secretary informs the 
                States of the need for such additional 
                information and allows a reasonable period of 
                time for the States to collect and provide the 
                information.
          (3) Submission.--The Secretary shall submit to the 
        Committee on Education and the Workforce of the House 
        of Representatives and the Committee on Labor and Human 
        Resources of the Senate the report described in 
        paragraph (2), and any comments the Secretary may have 
        with respect to such report. The report shall include 
        definitions of direct, indirect, 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) and the provision of technical assistance 
        described in paragraph (1).

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 and regulations 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, religion, national origin, or sex be 
        excluded from participation in, be denied the benefits 
        of, or be subjected to discrimination under, any 
        program or activity funded in whole or in part with 
        funds made available under this subtitle. Any 
        prohibition against discrimination on the basis of age 
        under the Age Discrimination Act of 1975 (42 U.S.C. 
        6101 et seq.) or with respect to an otherwise qualified 
        individual with a disability as provided in section 504 
        of the Rehabilitation Act of 1973 (29 U.S.C. 794) or 
        title II of the Americans with Disabilities Act of 1990 
        (42 U.S.C. 12131 et seq.) shall also apply to any such 
        program or activity.
          (2) Action of secretary.--Whenever the Secretary 
        determines that a State that has received a payment 
        under this subtitle has failed to comply with paragraph 
        (1) or an applicable regulation, the Secretary shall 
        notify the chief executive officer of the State and 
        shall request that the officer secure compliance. If 
        within a reasonable period of time, not to exceed 60 
        days, the chief executive officer fails or refuses to 
        secure compliance, the Secretary is authorized to--
                  (A) refer the matter to the Attorney General 
                with a recommendation that an appropriate civil 
                action be instituted;
                  (B) exercise the powers and functions 
                provided by title VI of the Civil Rights Act of 
                1964 (42 U.S.C. 2000d et seq.), the Age 
                Discrimination Act of 1975 (42 U.S.C. 6101 et 
                seq.), or section 504 of the Rehabilitation Act 
                of 1973 (29 U.S.C. 794), 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. 679. OPERATING RULE.

    (a) Faith-Based 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, faith-based 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 faith-based character.
    (b) Additional Safeguards.--Neither the Federal Government 
nor a State or local government shall require a faith-based 
organization to remove religious art, icons, scripture, or 
other symbols in order to be eligible to provide assistance 
under a program described in subsection (a).
    (c) Limitations on Use of Funds for Certain Purposes.--No 
funds provided through a grant or contract to a faith-based 
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 faith-based 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.

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 grantsdescribed 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--
                  (A) grants to private, nonprofit corporations 
                to provide assistance concerning home repair to 
                rural low-income families and planning and 
                developing low-income rural rental housing 
                units; and
                  (B) grants to multistate, regional, private, 
                nonprofit organizations to provide training and 
                technical assistance to small, rural 
                communities in meeting their community facility 
                needs.
          (4) Neighborhood innovation projects.--The Secretary 
        shall provide the assistance described in paragraph (1) 
        for neighborhood innovation projects, which shall 
        include grants to neighborhood-based private, nonprofit 
        organizations to test or assist in the development of 
        new approaches or methods that will aid in overcoming 
        special problems identified by communities or 
        neighborhoods or otherwise assist in furthering the 
        purposes of this subtitle, and which may include 
        projects that are designed to serve low-income 
        individuals and families who are not being 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 activitiesassisted 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 determines such 
        coordination to be inadequate, to better serve low-
        income populations;
          (2) to assist low-income communities to identify 
        potential sponsors of child nutrition programs and to 
        initiate such programs in underserved or unserved 
        areas; and
          (3) to develop innovative approaches at the State and 
        local level to meet the nutrition needs of low-income 
        individuals.
    (b) Allotments and Distribution of Funds.--
          (1) In general.--Of the amount appropriated for a 
        fiscal year to carry out this section, the Secretary 
        shall distribute funds for grants under subsection (a) 
        as follows:
                  (A) Allotments.--From 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 60 
                percent of such amount 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 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 make allotments for 
                grants under subsection (a) to eligible 
                agencies for statewide programs in each State 
                in 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) Eligible 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 a 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, 
                or the Freely Associated States.
          (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 $25,000,000 for 
fiscal year 1999, and such sums as may be necessary for each of 
fiscal years 2000 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 followup 
        referral or treatment, without charge, for youth during 
        their participation in such activity;
          (3) at least 1 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 mayinclude 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 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;
          (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) Applications 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 is 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. 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.

LOW-INCOME HOME ENERGY ASSISTANCE ACT OF 1981

           *       *       *       *       *       *       *


                     home energy grants authorized

    Sec. 2602. (a) * * *

           *       *       *       *       *       *       *

    (b) There are authorized to be appropriated to carry out 
the provisions of this title (other than section 2607A), 
$2,000,000,000 for each of [fiscal years 1995 through 1999] 
fiscal years 1999 through 2004. The authorizations of 
appropriations contained in this subsection are subject to the 
program year provisions of subsection (c).
    [(c)(1) In fiscal year 1993 and each fiscal year 
thereafter, amounts appropriated under this section for any 
fiscal year for programs and activities under this title shall 
be made available for obligation only on the basis of a program 
year. The program year shall begin on July 1 of the fiscal year 
for which the appropriation is made.]
    (c)(1) Amounts appropriated under this section in any 
fiscal year for programs and activities under this title shall 
be made available for obligation in the succeeding fiscal year.

           *       *       *       *       *       *       *

    [(d)] (d)(1) There are authorized to be appropriated to 
carry out section 2607A, [$50,000,000 for each of the fiscal 
years 1996 and 1997, and such sums as may be necessary for each 
of the fiscal years 1998 and 1999.] $30,000,000 for each of 
fiscal years 1999 through 2004, except as provided in paragraph 
(2).
    (2) For any fiscal year for which the amount appropriated 
under subsection (b) is not less than $1,400,000,000, there are 
authorized to be appropriated to carry out section 2607A 
$50,000,000 for each of fiscal years 1999 through 2004.
    (e) There are authorized to be appropriated in each fiscal 
year for payments under this title, in addition to amounts 
appropriated for distribution to all the States in accordance 
with section 2604 (other than [subsection (g)] subsection (e) 
of such section), $600,000,000 to meet the additional home 
energy assistance needs of one or more States arising from a 
natural disaster or other emergency. Funds appropriated 
pursuant to this subsection are hereby designated to be 
emergency requirements pursuant to section 251(b)(2)(D) of the 
Balanced Budget and Emergency Deficit Control Act of 1985, 
except that such funds shall be made available only after the 
submission to Congress of a formal budget request by the 
President (for all or a part of the appropriation pursuant to 
this subsection) that includes a designation of the amount 
requested as an emergency requirement as defined in such Act.

                              definitions

    Sec. 2603. As used in this title:
          (1) Emergency.--The term ``emergency'' means--
                  (A) a natural disaster;
                  (B) a significant home energy supply shortage 
                or disruption;
                  (C) a significant increase in the cost of 
                home energy, as determined by the Secretary;
                  (D) a significant increase in home energy 
                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.
          [(1)] (2) The term ``energy burden'' means the 
        expenditures of the household for home energy divided 
        by the income of the household.
          [(2)] (3) The term ``energy crisis'' means weather-
        related and supply shortage emergencies and other 
        household energy-related emergencies.
          [(3)] (4) The term ``highest home energy needs'' 
        means the home energy requirements of a household 
        determined by taking into account both the energy 
        burden of such household and the unique situation of 
        such household that results from having members of 
        vulnerable populations, including very young children, 
        individuals with disabilities, and frail older 
        individuals.
          [(4) the term] (5) The term ``household'' means any 
        individual or group of individuals who are living 
        together as one economic unit for whom residential 
        energy is customarily purchased in common or who make 
        undesignated payments for energy in the form of 
        rent[;].
          [(5)] (6) The term ``home energy'' means a source of 
        heating or cooling in residential dwellings.
          (7) Natural disaster.--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.
          [(6)] (8) The term ``poverty level'' means, with 
        respect to a household in any State, the income poverty 
        line as prescribed and revised at least annually 
        pursuant to section 673(2) of the Community Services 
        Block Grant Act, as applicable to such State.
          [(7)] (9) The term ``Secretary'' means the Secretary 
        of Health and Human Services.
          [(8)] (10) The term ``State'' means each of the 
        several States and the District of Columbia.
          [(9)] (11) The term ``State median income'' means the 
        State median income promulgated by the Secretary in 
        accordance with procedures established under section 
        2002(a)(6) of the Social Security Act (as such 
        procedures were in effect on the day before the date of 
        the enactment of this Act) and adjusted, in accordance 
        with regulations prescribed by the Secretary, to take 
        into account the number of individuals in the 
        household.

                            state allotments

    Sec. 2604. (a)(1)(A) * * *

           *       *       *       *       *       *       *

    (b)(1) The Secretary shall apportion not less than one-
tenth of 1 percent, and not more than one-half of 1 percent, of 
the amounts appropriated for each fiscal year to carry out this 
title on the basis of need among the Commonwealth of Puerto 
Rico, Guam, American Samoa, the Virgin Islands of the United 
States, [the Northern Mariana Islands, and the Trust Territory 
of the Pacific Islands.] the Commonwealth of the Northern 
Mariana Islands, and the combined Freely Associated States. The 
Secretary shall determine the total amount to be apportioned 
under this paragraph for any fiscal year (which shall not 
exceed one-half of 1 percent) after evaluating the extent to 
which each jurisdiction specified in the preceding sentence 
requires assistance under this paragraph for the fiscal year 
involved.

           *       *       *       *       *       *       *

    (2) * * *

           *       *       *       *       *       *       *

                  (ii) to travel to the sites at which such 
                [application] applications are accepted by such 
                entity.

           *       *       *       *       *       *       *

    [(f)(1) A State may transfer in accordance with paragraph 
(2) a percentage of the funds payable to it under this section 
for any fiscal year for its use for such fiscal year under 
other provisions of Federal law providing block grants for--
          [(A) support of activities under subtitle B of title 
        VI (relating to community services block grant 
        program);
          [(B) support of activities under title XX of the 
        Social Security Act; or
          [(C) support of preventive health services, alcohol, 
        drug, and mental health services, and primary care 
        under title XIX of the Public Health Service Act, and 
        maternal and child health services under title V of the 
        Social Security Act;
or a combination of the activities described in subparagraphs 
(A), (B), and (C). Amounts allotted to a State under any 
provisions of Federal law referred to in the preceding sentence 
and transferred by a State for use in carrying out the purposes 
of this title shall be treated as if they were paid to the 
State under this title but shall not affect the computation of 
the State's allotment under this title. The State shall inform 
the Secretary of any such transfer of funds.
    [(2)(A) Not to exceed 10 percent of the funds payable to a 
State under this section for each of the fiscal years 1991 
through 1993 may be transferred under paragraph (1).
    [(B) Beginning in fiscal year 1994, no funds payable to a 
State under this section shall be transferred under paragraph 
(1).]
    [(g)] (e) Notwithstanding subsections [(a) through (f)] (a) 
through (d), the Secretary may allot amounts appropriated 
pursuant to section 2602(e) to one or more than one State. [In 
determining to which State or States additional funds may be 
allotted, the Secretary shall take into account the extent to 
which a State was affected by the [emergency or disaster,] 
natural disaster or other emergency the availability to an 
affected State of other resources under this or any other 
program, and such other factors as the Secretary determines 
relevant. The Secretary shall notify Congress of the allotment 
pursuant to this subsection prior to releasing the allotted 
funds.] 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 emergency or disaster 
involved, the availability to the State of other resources 
under the program carried out under this title or any other 
program, whether a Member of Congress has requested that the 
State receive the allotment, and such other factors as the 
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.

                     applications and requirements

    Sec. 2605. (a)(1) * * *

           *       *       *       *       *       *       *

    (b) * * *

           *       *       *       *       *       *       *

          (A) the State may use for planning and administering 
        the use of funds under this title an amount not to 
        exceed 10 percent of the funds payable to such State 
        under this title for a fiscal year [and not transferred 
        pursuant to section 2604(f) for use under another block 
        grant]; and

           *       *       *       *       *       *       *

    (14) cooperate with the Secretary with respect to data 
collecting and reporting under section 2610; [and]

           *       *       *       *       *       *       *

    (c)(1) * * *

           *       *       *       *       *       *       *

          [(B) describes the benefit levels to be used by the 
        [States] State for each type of assistance including 
        assistance to be provided for emergency crisis 
        intervention and for weatherization and other energy-
        related home repair;

           *       *       *       *       *       *       *

          [(G) * * *
                  (i) one or more members who [has] had 
                attained 60 years of age;

           *       *       *       *       *       *       *


                           payments to states

    Sec. 2607. (a)(1) * * *

           *       *       *       *       *       *       *

          (B) No amount may be held available under this 
        paragraph for a State from a prior fiscal year to the 
        extent such amount exceeds 10 percent of the amount 
        payable to such State for such prior fiscal year [and 
        not transferred pursuant to section 2604(f)]. For 
        purposes of the preceding sentence, the amount payable 
        to a State [but not transferred by the State] for a 
        fiscal year shall be determined without regard to any 
        amount held available under this paragraph for such 
        State for such fiscal year from the prior fiscal year.

           *       *       *       *       *       *       *


SEC. 2607B. RESIDENTIAL ENERGY ASSISTANCE CHALLENGE OPTION (R.E.A.CH.).

    (a) Purpose. * * *

           *       *       *       *       *       *       *

    (b) Funding.--
          (1) Allocation.--[For each of the fiscal years 1969 
        through 1999] For each fiscal year, the Secretary may 
        allocate not more than 25 percent of the amount made 
        available pursuant to section 2602(d) for such fiscal 
        year to a R.E.A.Ch. fund for the purpose of making 
        incentive grants to States that submit qualifying plans 
        that are approved by the Secretary as R.E.A.Ch. 
        initiatives. States may use such grants for the costs 
        of planning, implementing, and evaluating the 
        initiative.

           *       *       *       *       *       *       *

    (e) State Plans.--
          (1) In general.--Each State plan shall include each 
        of the elements described in paragraph (2), to be met 
        by State and local agencies.
          (2) Elements of state plans.--Each State plan shall 
        include--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(F)] (E) a method for targeting nonmonetary 
                benefits;
                  [(G)] (F) a description of the crisis and 
                emergency assistance activities the State will 
                undertake that are designed to--
                          (i) discourage family energy crisis;
                          (ii) encourage responsible vendor and 
                        consumer behavior; and
                          (iii) provide only financial 
                        incentives that encourage household 
                        payment;
                  [(H)] (G) a description of the activities the 
                State will undertake to--
                          (i) provide incentives for recipients 
                        of assistance to pay home energy costs; 
                        and
                          (ii) provide incentives for vendors 
                        to help reduce the energy burdens of 
                        recipients of assistance;
                  [(I)] (H) an assurance that the State will 
                require each entity that receives a grant or 
                enters into a contract under this section to 
                solicit and be responsive to the views of 
                individuals who are financially eligible for 
                benefits and services under this section in 
                establishing its local program;
                  [(J)] (I) a description of performance goals 
                for the State R.E.A.Ch. initiative including--
                          (i) a reduction in the energy costs 
                        [on] of participating households over 
                        one or more fiscal years;
                          (ii) an increase in the regularity of 
                        home energy bill payments by eligible 
                        households; and
                          (iii) an increase in energy vendor 
                        contributions towards reducing energy 
                        burdens by eligible households;
                  [(K)] (J) a description of the indicators 
                that will be used by the State to measure 
                whether the performance goals have been 
                achieved;
                  [(L)] (K) a demonstration that the plan is 
                consistent with section 2603, paragraphs (2), 
                (3), (4), (5), (7), (9), (10), (11), (12), 
                (13), and (14), of section 2605(b), subsections 
                (d), (e), (f), (g), (h), (i), and (j), of 
                section 2605, and section 2606 of this title;
                  [(M)] (L) an assurance that benefits and 
                services will be provided in addition to other 
                benefit payments and services provided under 
                this title and in coordination with such 
                benefit payments and services; and
                  [(N)] (M) an assurance that no regulated 
                utility covered by the plan will be required to 
                act in a manner that is inconsistent with 
                applicable regulatory requirements.
    [(g)] (f) Cost or Function.--None of the costs of providing 
services or benefits under this section shall be considered to 
be an administrative cost or function for purposes of any 
limitation on administrative costs or functions contained in 
this title.

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                  [technical assistance and training]

         TECHNICAL ASSISTANCE, TRAINING, AND COMPLIANCE REVIEWS

    Sec. 2609A. (a) Of the amounts appropriated under section 
2602(b) for any fiscal year, not more than [$250,000] $300,000 
of such amounts may be reserved by the [Secretary] Secretary to 
conduct onsite compliance reviews of programs supported under 
this title or--
          (1) to make grants to State and public agencies and 
        private nonprofit organizations; or
          (2) to enter into contracts or jointly financed 
        cooperative arrangements interagency agreements with 
        States and public agencies (including Federal agencies) 
        and private nonprofit organizations;

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               HUMAN SERVICES REAUTHORIZATION ACT OF 1986

[Public Law 99-425, September 3, 1986 (100 Stat. 966)]

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TITLE IV--COMMUNITY SERVICES BLOCK GRANT PROGRAM

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[SEC. 407. INTEREST RATES PAYABLE ON CERTAIN RURAL DEVELOPMENT LOANS; 
                    ASSIGNMENT OF LOAN CONTRACTS.

    [(a) Modification of Interest Rates.--Notwithstanding any 
other provision of law--
          [(1) any outstanding loan made after December 31, 
        1982, by the Secretary of Health and Human Services; or
          [(2) any loan made after the date of the enactment of 
        this Act;
with moneys from the Rural Development Loan Fund established by 
section 623(c)(1) of the Omnibus Budget Reconciliation Act of 
1981 (42 U.S.C. 9812(c)(1)) or with funds available under 
section 681(a) of the Community Services Block Grant Act (42 
U.S.C. 9910(a)) to an intermediary borrower shall bear interest 
at a fixed rate equal to the rate of interest that was in 
effect on the date of issuance for loans made in 1980 with such 
moneys or such funds if the weighted average rate of interest 
for all loans made after December 31, 1982, by such 
intermediary borrower with such moneys or such funds does not 
exceed the sum of 6 percent and the rate of interest payable 
under this subsection by such intermediary borrower.
    [(b) Assignment of Certain Loan Contracts.--Any contract 
for a loan made during the period beginning on December 31, 
1982, and ending on the date of the enactment of this Act 
with--
          [(1) moneys from the Rural Development Loan Fund 
        established by section 623(c)(1) of the Omnibus Budget 
        Reconciliation Act of 1981 (42 U.S.C. 9812(c)(1)); or
          [(2) funds available under section 681(a) of the 
        Community Services Block Grant Act (42 U.S.C. 9910(a));
to an intermediary borrower that is a county government may be 
assigned by such borrower to an entity to which such loan could 
have been made for the purpose for which such contract was 
made. Any entity to which such contract is so assigned shall be 
substituted as a party to such contract and shall be obligated 
to carry out such contract and the purpose for which such 
contract was made.
    [(c) Technical Amendment.--Section 1323(b)(2) of the Food 
Security Act of 1985 (7 U.S.C. 1631(b)(2)) is amended--
          [(1) by striking out ``authorized under'' and 
        inserting in lieu thereof ``appropriated to, or repaid 
        to'';
          [(2) in subparagraph (A) by striking out ``and'' at 
        the end thereof;
          [(3) in subparagraph (B) by striking out the period 
        at the end thereof and inserting in lieu thereof ``; 
        and''; and
          [(4) by adding at the end thereof the following new 
        subparagraph:
                  [``(C) notwithstanding paragraph (1), all 
                funds other than funds to which subparagraph 
                (A) applies shall be used by the Secretary to 
                make loans--
                          [``(i) to the entities;
                          [``(ii) for the purposes; and
                          [``(iii) subject to the terms and 
                        conditions;
                specified in the first, second, and last 
                sentences of section 623(a) of the Community 
                Economic Development Act of 1981 (42 U.S.C. 
                9812(a)). For purposes of this subparagraph, 
                any reference in such sentences to the 
                Secretary shall be deemed to be a reference to 
                the Secretary of Agriculture.''.

SEC. 408. DEMONSTRATION PARTNERSHIP AGREEMENTS ADDRESSING THE NEEDS OF 
                    THE POOR.

    [(a) General Authority.--(1) In order to stimulate the 
development of new approaches to provide for greater self-
sufficiency of the poor, to test and evaluate such new 
approaches, to disseminate project results and evaluation 
findings so that such approaches can be replicated, and to 
strengthen the integration, coordination, and redirection of 
activities to promote maximum self-sufficiency among the poor, 
the Secretary may make grants from funds appropriated under 
subsection (e) to eligible entities for the development and 
implementation of new and innovative approaches to deal with 
particularly critical needs or problems of the poor which are 
common to a number of communities. Grants may be made only with 
respect to applications which--
          [(A) involve activities which can be incorporated 
        into or be closely coordinated with eligible entities' 
        ongoing programs;
          [(B) involve significant new combinations of 
        resources or new and innovative approaches involving 
        partnership agreements; or
          [(C) are structured in a way that will, within the 
        limits of the type of assistance or activities 
        contemplated, most fully and effectively promote the 
        purposes of the Community Services Block Grant Act; and
          [(D) contain an assurance that the applicant for such 
        grants will obtain an independent, methodologically 
        sound evaluation of the effectiveness of the activities 
        carried out with such grant and will submit such 
        evaluation to the Secretary.
    [(2) No grant may be made under this section unless an 
application is submitted to the Secretary at such time, in such 
manner, and containing or accompanied by such information, as 
the Secretary may require.
    [(b) Federal Share; Limitations.--(1)(A) Subject to 
subparagraph (B), grants awarded pursuant to this section shall 
be usedfor new programs and shall not exceed 50 per centum of 
the cost of such new programs.
    [(B) After the first fiscal year for which an eligible 
entity receives a grant under this section to carry out a 
program, the amount of a subsequent grant made under this 
section to such entity to carry out such program may not exceed 
80 percent of the amount of the grant previously received by 
such entity under this section to carry out such program.
    [(2) Non-Federal contributions may be in cash or in kind, 
fairly evaluated, including but not limited to plant, 
equipment, or services.
    [(3) Not more than one grant in each fiscal year may be 
made to any eligible entity, and no grant may exceed $350,000. 
Not more than 2 grants may be made under this section to an 
eligible entity to carry out a particular program.
    [(4) No application may be approved for assistance under 
this section unless the Secretary is satisfied that--
          [(A) the activities to be carried out under the 
        application will be in addition to, and not in 
        substitution for, activities previously carried on 
        without Federal assistance; and
          [(B) funds or other resources devoted to programs 
        designed to meet the needs of the poor within the 
        community, area, or State will not be diminished in 
        order to provide the matching contributions required 
        under this section.
    [(c) Programs Directed to Special Populations.--(1) In 
addition to the grant programs described in subsection (a), the 
Secretary shall make grants to eligible entities for the 
purpose of demonstrating new and innovative approaches to 
addressing the problems of, and providing opportunities for 
leadership development, community involvement, and educational 
success to, disadvantaged persons between the ages of 14 and 25 
from populations experiencing conditions such as a high poverty 
rate, high unemployment, high dropout rate, low labor force 
participation, low enrollment in college or participation in 
other post high school training classes, high incidence of 
involvement in violence, and a high rate of incarceration. 
Services provided through approaches funded by such grants may 
include assessment and development of employability plans, 
remedial education, motivational activities, life skills 
instruction, community service, mentoring, access to 
information on available financial aid, campus visits, career 
education, cultural enrichment, and employment training, 
placement, and follow-up.
    [(2) Such grants may be made only with respect to 
applications that--
          [(A) identify and describe the population to be 
        served, the problems to be addressed, the overall 
        approach and methods of outreach and recruitment to be 
        used, and the services to be provided;
          [(B) describe how the approach to be used differs 
        from other approaches used for the population to be 
        served by the project;
          [(C) describe the objectives of the project and 
        contain a plan for measuring progress toward meeting 
        those objectives; and
          [(D) contain assurances that the grantee will report 
        on the progress and results of the demonstration at 
        such times and in such manner as the Secretary shall 
        require.
    [(3) Notwithstanding subsection (b), such grants shall not 
exceed 80 percent of the cost of such programs.
    [(4) Such grants shall be made annually on such terms and 
conditions as the Secretary shall specify to eligible entities 
that serve the populations described in paragraph (1) and that 
are located within those areas were such populations are 
concentrated.
    [(d) Dissemination of Results.--As soon as practicable, but 
not later than 180 days after the end of the fiscal year in 
which a recipient of a grant under this section completes the 
expenditure of such grant, the Secretary shall prepare and make 
available to each State and each eligible entity a description 
of the program carried out with such grant, any relevant 
information developed and results achieved, and a summary of 
the evaluation of such program received under subsection 
(a)(1)(D) so as to provide a model of innovative programs for 
other eligible entities.
    [(e) Replication of Programs.--(1) The Secretary shall 
annually identify programs that receive grants under this 
section that demonstrate a significant potential for dealing 
with particularly critical needs or problems of the poor that 
exist in a number of communities.
    [(2) Not less than 10 percent, and not more than 25 
percent, of the funds appropriated for each fiscal year to 
carry out this section shall be available to make grants under 
this section to replicate in additional geographic areas 
programs identified under paragraph (1).
    [(f) Report to Congress.--The Secretary shall submit 
annually, to the Committee on Education and Labor of the House 
of Representatives and the Committee on Labor and Human 
Resources of the Senate, a report containing--
          [(1) a description of--
                  [(A) programs for which grants under this 
                section in the then most recently completed 
                fiscal year; and
                  [(B) the evaluations received under 
                subsection (a)(1)(D) in such fiscal year; and
          [(2) a description of the methods used by the 
        Secretary to comply with subsection (d);
          [(3) recommendations of the Secretary regarding the 
        suitability of carrying our such programs with funds 
        made available under other Federal laws; and
          [(4) a description of each program identified under 
        subsection (d)(1) or replicated under subsection 
        (e)(2), and an identification of the geographical 
        location where such program was carried out.
    [(g) Definitions.--As used in this section--
          [(1) the term ``eligible entity'' has the same 
        meaning given such term by section 673(1) of the 
        Community Services Block Grant Act (42 U.S.C. 9902(1)), 
        except that such term includes an organization that 
        serves migrant and seasonal farm workers and that 
        receives a grant under the Community Services Block 
        Grant Act (42 U.S.C. 9901 et seq.) in the fiscal year 
        preceding the fiscal year for which such organization 
        requests a grant under this section; and
          [(2) the term ``Secretary'' means the Secretary of 
        Health and Human Services.
    [(h)(1) Authorization of Appropriations.--There are 
authorized to be appropriated $10,000,000 for fiscal year 1991, 
and such sums as may be necessary for each of the fiscal years 
1992, 1993, and 1994, to carry out this section (other than 
subsection (c)).
    [(2) There are authorized to be appropriated $10,000,000 
for fiscal year 1991 and such sums as may be necessary in each 
of the fiscal years 1992 through 1994, to carry out subsection 
(c).]

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