
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC9907]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
           CHAPTER 106--COMMUNITY SERVICES BLOCK GRANT PROGRAM
 
Sec. 9907. Uses of funds


(a) Grants to eligible entities and other organizations

                           (1) In general

        Not less than 90 percent of the funds made available to a State 
    under section 9905 or 9906 of this title shall be used by the State 
    to make grants for the purposes described in section 9901 of this 
    title to eligible entities.

                     (2) Obligational authority

        Funds distributed to eligible entities through grants made in 
    accordance with paragraph (1) for a fiscal year shall be available 
    for obligation during that fiscal year and the succeeding fiscal 
    year, subject to paragraph (3).

        (3) Recapture and redistribution of unobligated funds

        (A) Amount

            Beginning on October 1, 2000, a State may recapture and 
        redistribute funds distributed to an eligible entity through a 
        grant made under paragraph (1) that are unobligated at the end 
        of a fiscal year if such unobligated funds exceed 20 percent of 
        the amount so distributed to such eligible entity for such 
        fiscal year.

        (B) Redistribution

            In redistributing funds recaptured in accordance with this 
        paragraph, States shall redistribute such funds to an eligible 
        entity, or require the original recipient of the funds to 
        redistribute the funds to a private, nonprofit organization, 
        located within the community served by the original recipient of 
        the funds, for activities consistent with the purposes of this 
        chapter.

(b) Statewide activities

                        (1) Use of remainder

        If a State uses less than 100 percent of the grant or allotment 
    received under section 9905 or 9906 of this title to make grants 
    under subsection (a) of this section, the State shall use the 
    remainder of the grant or allotment under section 9905 or 9906 of 
    this title (subject to paragraph (2)) for activities that may 
    include--
            (A) providing training and technical assistance to those 
        entities in need of such training and assistance;
            (B) coordinating State-operated programs and services, and 
        at the option of the State, locally-operated programs and 
        services, targeted to low-income children and families with 
        services provided by eligible entities and other organizations 
        funded under this chapter, including detailing appropriate 
        employees of State or local agencies to entities funded under 
        this chapter, 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 chapter within the State to determine if such funds have 
        been targeted to the areas of greatest need;
            (E) supporting asset-building programs for low-income 
        individuals, such as programs supporting individual development 
        accounts;
            (F) supporting innovative programs and activities conducted 
        by community action agencies or other neighborhood-based 
        organizations to eliminate poverty, promote self-sufficiency, 
        and promote community revitalization;
            (G) supporting State charity tax credits as described in 
        subsection (c) of this section; and
            (H) supporting other activities, consistent with the 
        purposes of this chapter.

                       (2) Administrative cap

        No State may spend more than the greater of $55,000, or 5 
    percent, of the grant received under section 9905 of this title or 
    State allotment received under section 9906 of this title for 
    administrative expenses, including monitoring activities. Funds to 
    be spent for such expenses shall be taken from the portion of the 
    grant under section 9905 of this title or State allotment that 
    remains after the State makes grants to eligible entities under 
    subsection (a) of this section. The cost of activities conducted 
    under paragraph (1)(A) shall not be considered to be administrative 
    expenses. The startup cost and cost of administrative activities 
    conducted under subsection (c) of this section shall be considered 
    to be administrative expenses.

(c) Charity tax credit

                           (1) In general

        Subject to paragraph (2), if there is in effect under State law 
    a charity tax credit, the State may use for any purpose the amount 
    of the allotment that is available for expenditure under subsection 
    (b) of this section.

                              (2) Limit

        The aggregate amount a State may use under paragraph (1) during 
    a fiscal year shall not exceed 100 percent of the revenue loss of 
    the State during the fiscal year that is attributable to the charity 
    tax credit, as determined by the Secretary of the Treasury without 
    regard to any such revenue loss occurring before January 1, 1999.

                      (3) Definitions and rules

        In this subsection:

        (A) Charity tax credit

            The term ``charity tax credit'' means a nonrefundable credit 
        against State income tax (or, in the case of a State that does 
        not impose an income tax, a comparable benefit) that is 
        allowable for contributions, in cash or in kind, to qualified 
        charities.

        (B) Qualified charity

            (i) In general

                The term ``qualified charity'' means any organization--
                    (I) that is--
                        (aa) described in section 501(c)(3) of title 26 
                    and exempt from tax under section 501(a) of such 
                    title;
                        (bb) an eligible entity; or
                        (cc) a public housing agency as defined in 
                    section 1437a(b)(6) of this title;

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

                (I) In general

                    A contribution to a collection organization shall be 
                treated as a contribution to a qualified charity if the 
                donor designates in writing that the contribution is for 
                the qualified charity.
                (II) Collection organization

                    The term ``collection organization'' means an 
                organization described in section 501(c)(3) of such 
                title and exempt from tax under section 501(a) of such 
                title--
                        (aa) that solicits and collects gifts and grants 
                    that, by agreement, are distributed to qualified 
                    charities;
                        (bb) that distributes to qualified charities at 
                    least 90 percent of the gifts and grants the 
                    organization receives that are designated for such 
                    qualified charities; and
                        (cc) that meets the requirements of clause (vi).
            (iii) Charity must primarily assist poor individuals

                (I) In general

                    An organization meets the requirements of this 
                clause only if the appropriate State authority 
                reasonably expects that the predominant activity of such 
                organization will be the provision of direct services 
                within the United States to individuals and families 
                whose annual incomes generally do not exceed 185 percent 
                of the poverty line in order to prevent or alleviate 
                poverty among such individuals and families.
                (II) No recordkeeping in certain cases

                    An organization shall not be required to establish 
                or maintain records with respect to the incomes of 
                individuals and families for purposes of subclause (I) 
                if such individuals or families are members of groups 
                that are generally recognized as including substantially 
                only individuals and families described in subclause 
                (I).
                (III) Food aid and homeless shelters

                    Except as otherwise provided by the appropriate 
                State authority, for purposes of subclause (I), services 
                to individuals in the form of--
                        (aa) donations of food or meals; or
                        (bb) temporary shelter to homeless individuals;

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

            (iv) Minimum expense requirement

                (I) In general

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

                    For purposes of subclause (I)--

(aa) In general

                        The term ``poverty program expense'' means any 
                    expense in providing direct services referred to in 
                    clause (iii).

(bb) Exceptions

                        Such term shall not include any management or 
                    general expense, any expense for the purpose of 
                    influencing legislation (as defined in section 
                    4911(d) of title 26), any expense for the purpose of 
                    fundraising, any expense for a legal service 
                    provided on behalf of any individual referred to in 
                    clause (iii), any expense for providing tuition 
                    assistance relating to compulsory school attendance, 
                    and any expense that consists of a payment to an 
                    affiliate of the organization.
            (v) Reporting requirement

                The information required to be furnished under this 
            clause about an organization is--
                    (I) the percentages determined by dividing the 
                following categories of the organization's expenses for 
                the year by the total expenses of the organization for 
                the year: expenses for direct services, management 
                expenses, general expenses, fundraising expenses, and 
                payments to affiliates; and
                    (II) the category or categories (including food, 
                shelter, education, substance abuse prevention or 
                treatment, job training, or other) of services that 
                constitute predominant activities of the organization.
            (vi) Additional requirements for collection 
                    organizations

                The requirements of this clause are met if the 
            organization--
                    (I) maintains separate accounting for revenues and 
                expenses; and
                    (II) makes available to the public information on 
                the administrative and fundraising costs of the 
                organization, and information as to the organizations 
                receiving funds from the organization and the amount of 
                such funds.
            (vii) Special rule for States requiring tax 
                    uniformity

                In the case of a State--
                    (I) that has a constitutional requirement of tax 
                uniformity; and
                    (II) that, as of December 31, 1997, imposed a tax on 
                personal income with--
                        (aa) a single flat rate applicable to all earned 
                    and unearned income (except insofar as any amount is 
                    not taxed pursuant to tax forgiveness provisions); 
                    and
                        (bb) no generally available exemptions or 
                    deductions to individuals;

          the requirement of paragraph (2) shall be treated as met if 
            the amount of the credit described in paragraph (2) is 
            limited to a uniform percentage (but not greater than 25 
            percent) of State personal income tax liability (determined 
            without regard to credits).

           (4) Limitation on use of funds for startup and 
                          administrative activities

        Except to the extent provided in subsection (b)(2) of this 
    section, no part of the aggregate amount a State uses under 
    paragraph (1) may be used to pay for the cost of the startup and 
    administrative activities conducted under this subsection.

       (5) Prohibition on use of funds for legal services or 
                             tuition assistance

        No part of the aggregate amount a State uses under paragraph (1) 
    may be used to provide legal services or to provide tuition 
    assistance related to compulsory education requirements (not 
    including tuition assistance for tutoring, camps, skills 
    development, or other supplemental services or training).

                (6) Prohibition on supplanting funds

        No part of the aggregate amount a State uses under paragraph (1) 
    may be used to supplant non-Federal funds that would be available, 
    in the absence of Federal funds, to offset a revenue loss of the 
    State attributable to a charity tax credit.

(Pub. L. 97-35, title VI, Sec. 675C, as added Pub. L. 105-285, title II, 
Sec. 201, Oct. 27, 1998, 112 Stat. 2731.)


                            Prior Provisions

    A prior section 9907, Pub. L. 97-35, title VI, Sec. 678, Aug. 13, 
1981, 95 Stat. 516, related to payments to States, prior to the general 
amendment of this chapter by Pub. L. 105-285.

                  Section Referred to in Other Sections

    This section is referred to in sections 9908, 9919 of this title.
