H.R. 3131 — Community Services Block Grant Improvement Act of 2025

This section revises the first stated purpose of the Community Services Block Grant Act—from providing assistance to states and local communities through community action agencies and neighborhood-based organizations for poverty reduction, low-income community revitalization, and empowerment of low-income individuals and families (particularly those transitioning from Temporary Assistance for Needy Families) to self-sufficiency—to reducing poverty nationwide by supporting community action agencies and community services network organizations that enhance economic security for low-income and working individuals and families, empower them to become fully sufficient, and create new economic opportunities in their communities. (The Community Services Block Grant program provides federal formula block grants to states for distribution to such eligible entities to combat poverty through services such as employment, housing, nutrition, and energy assistance.)

This section revises definitions in the Community Services Block Grant Act (42 U.S.C. 9902)—which provides federal block grants to states for community action agencies serving low-income individuals and families—by striking paragraphs (1) through (5) and inserting new paragraphs (1) through (9) that: (1) define "agency-wide strategic plan" as a plan adopted by an eligible entity in the previous five years establishing goals to meet needs identified via comprehensive community needs assessment; (2) redefine "poverty line" as the official poverty guideline calculated annually by the Secretary of Health and Human Services using Census data and Consumer Price Index adjustments, and establish 200% of the poverty line (from up to 125% as previously allowed by states) as the eligibility criterion for services, assistance, or resources provided directly to individuals or families (thus, expanding the population eligible for CSBG-funded services); (3) define "community action agency" as an eligible entity meeting specified requirements that delivers multiple programs to low-income individuals and families; (4) define "community action plan" as a detailed plan, including a budget, for expending funds appropriated under the Act; (5) define "community services network organization" as a funded state, eligible entity, or association primarily composed of such entities; and (6)-(9) redefine "eligible entity," "private, nonprofit organization," "Secretary," and "State," to reference updated statutory provisions and retain prior meanings, respectively.

This section authorizes $1 billion annually for FY2026 through 2032 to carry out the Community Services Block Grant (CSBG) program, other than section 680 (previously, such sums as necessary for FY1999 through 2003, other than sections 681 and 682); and makes the following changes to reservations of appropriated amounts: (1) decreases the amount reserved for training and technical assistance activities (secs. 9913-9918) to 1% (from 1½%), with at least half distributed to eligible entities and community services network organizations and half used by the Secretary for evaluations, corrective actions, and monitoring; and (2) eliminates the prior 9% reservation for discretionary activities (sec. 9921 and sec. 9917(b)(2)). (Thus, increasing the share available for formula block grants to states and territories from 89% to 98.5%.) The section also separately authorizes $40 million annually for FY2026 through 2032 for discretionary programs under sec. 680(a)(2) and (3).

This section revises the authorization for Community Services Block Grant (CSBG) grants by limiting them to the purposes described in section 672 (from grants through the program to states to ameliorate the causes of poverty in communities within the states).

This section revises the formula for allotting Community Services Block Grant (CSBG) funds—federal block grants to states for anti-poverty services provided by local community action agencies—by (1) eliminating the prior ¼ of 1 percent minimum allotment under subsection (a) and basing allotments solely on states' shares of FY1981 funding except as provided in subsection (b); (2) establishing a general minimum allotment of ½ of 1 percent of funds remaining after reservations (previously ¼ of 1 percent, or ½ of 1 percent only if remaining funds exceeded $345 million), increasing to ¾ of 1 percent if remaining funds exceed $900 million; and (3) eliminating prior requirements to maintain states' FY1990 allotment levels and cap allotments at 140 percent of the prior year's amount. The section further revises grant payment procedures to require the Secretary to allocate funds at least quarterly, notify states of allocations, and make the first year's allocation available within 30 days of an approved Office of Management and Budget apportionment (and subsequent allocations within 30 days of each period's start).

This section revises permissible uses of Community Services Block Grant (CSBG) funds by states under the Community Services Block Grant Act. (The CSBG program provides flexible formula grants to states for distribution to eligible entities—typically community action agencies—to alleviate poverty through services such as employment, education, and housing assistance consistent with program purposes in section 672.) Specifically, the section (1) in subsection (a)(1) clarifies that grants to eligible entities must enable implementation of CSBG programs, projects, and services; (2) replaces subsection (a)(2) with new obligational requirements, requiring states to obligate funds and make grants available to eligible entities by the later of 30 days after the Secretary's notice of funding availability or the first day of the state program year (with an exception allowing accumulation of up to one fiscal quarter's funding if appropriations are for less than a full fiscal year), and making such funds available for eligible entity obligation during the grant fiscal year and the following fiscal year; (3) strikes subsection (a)(3); (4) in subsection (b)(1) replaces the prior list of allowable state activities with activities described in the state's application and plan under section 676(b) (as detailed in new paragraph (2)) plus administrative expenses subject to paragraph (3) limits, striking prior subparagraphs (A)–(H); (5) revises subsection (b)(2)—redesignated as (b)(3)—to limit state administrative expenses to 5% of the allotment under section 675B (from the greater of $55,000 or 5%), with conforming changes to monitoring references; (6) adds new subsection (b)(2) authorizing states to use remaining funds after subsection (a) obligations for training and technical assistance to eligible entities (including for emergencies, innovative programs, and evidence-building), community needs assessments, performance measurement, coordination of low-income services, statewide communication among eligible entities, and analysis of fund targeting to areas of greatest need; and (7) strikes subsection (c). (Thus, states gain flexibility for training, coordination, and planning uses but face stricter timelines and caps on retaining funds before distribution to eligible entities.)

This section revises requirements for state lead agencies and state applications and plans under the Community Services Block Grant (CSBG) program, which provides formula funding to states for eligible entities (i.e., community action agencies) to deliver services promoting the self-sufficiency of low-income individuals and families. Specifically, it (1) revises lead agency duties under subsection (a)(2) to authorize convening state agencies for coordination, base the state plan primarily on eligible entities' community action plans, allow plan revisions subject to notice, require at least one public hearing on the proposed plan with at least 15 days' statewide notice and direct distribution to eligible entity leaders and community service organizations, and shifts entity reviews to section 678B (from section 9914); (2) in subsection (b), updates the state plan requirement to begin with FY2026 (from FY2000) and requires submission not later than 60 days prior to the first covered fiscal year (from 30 days), revises fund use assurances to emphasize programs enabling low-income and working individuals and families to achieve self-sufficiency and adds a new assurance for broadband access assistance via navigators, requires eligible entities to submit community action plans demonstrating alignment with recent community needs assessments and program purposes, adds new state assurances on monitoring expertise, payment timing, board vacancy policies, and implementation descriptions, and requires entities to post strategic plans, needs assessments, and action plans online; (3) revises subsection (e) to require state plans on the lead agency's website for public inspection and comment with hearings per new subsection (a)(2)(D); and (4) in subsection (f), updates the effective date to FY2026 (from FY2000) and references the Community Services Block Grant Improvement Act of 2025 (from Coats Human Services Reauthorization Act of 1998).

This section revises the process for designating or redesignating eligible entities to serve geographic areas that are unserved or cease to be served under the Community Services Block Grant (CSBG) Act, which provides federal block grants to states to fund antipoverty programs, projects, and services through community action agencies (as described in section 672). It authorizes the state lead agency, in consultation with local officials and organizations, to solicit applications and designate (1) a private nonprofit community action agency located in reasonable proximity to or contiguous with the unserved area that already provides similar services and demonstrates financial capacity to manage federal funds; or (2) if none is available, a private nonprofit organization (including an existing eligible entity) located in or near the area that can provide a broad range of CSBG services. The designated entity must ensure its governing board meets CSBG requirements (under section 676B), and the service area (or portion thereof) is treated as a community. It further authorizes an interim designation of a private nonprofit agency (or public agency if none available) for up to one year while selecting a permanent entity, provided the interim agency demonstrates financial capacity and CSBG service capability and meets all permanent designation requirements by the time of final selection.

This section revises governance requirements for tripartite boards of eligible entities under the Community Services Block Grant (CSBG) Act (i.e., local private nonprofit organizations and public agencies that receive subgrants from states to deliver anti-poverty services such as job training and energy assistance). (1) For private nonprofits, it requires the board to fully participate in program development, planning, implementation, oversight, and evaluation; allows elected officials to designate a voting representative if they decline to serve; and mandates compliance with section 501(c)(3) tax-exempt status requirements and state nonprofit law. (2) For public entities, it requires board compliance with state open meetings, financial transparency, and open records policies and applies board references to alternative governance mechanisms. The section further (3) requires eligible entities to provide board members with expertise resources (e.g., contracted financial, accounting, and legal services); (4) mandates filling board vacancies within 6 months (or certifying good-faith efforts for one additional 6-month period); (5) specifies board duties including legal and financial oversight of federal funds, adopting ethical codes and conflict-of-interest policies, conducting triennial community needs assessments and strategic planning, approving budgets, reviewing CEO performance annually, monitoring program progress and corrective actions, and adopting or reviewing CEO personnel policies; and (6) details conflict-of-interest policy elements such as recusal from transactions benefiting board members, their immediate family, or affiliated entities and prohibiting board compensation beyond reasonable expenses.

This section revises the distribution requirements for amounts reserved under the Community Services Block Grant (CSBG) Act for training, technical assistance, and other activities. It requires direct allocation to eligible entities and community services network organizations—including partners such as institutions of higher education—with demonstrated expertise in addressing needs of low-income and working families, for (1) professional development for key personnel; (2) improving program quality, financial management, compliance, and governance (including performance management information systems); (3) training on building and using evidence of effectiveness; and (4) ensuring responsiveness to local needs. (CSBG provides federal block grants to states to reduce poverty in communities through local agencies offering services such as energy assistance and job training.)

This section revises fiscal control, audit, repayment, and withholding requirements for states receiving Community Services Block Grant (CSBG) funds as follows: (1) authorizes states to issue payments to subrecipients on an advance basis notwithstanding single audit requirements; (2) requires audits to be conducted in accordance with chapter 75 of title 31, United States Code (commonly known as the "Single Audit Act Amendments of 1984"), except that the Secretary must order an additional audit (or audits of affected accounts) upon identifying a serious financial deficiency; (3) authorizes the Secretary to withhold funds from a state that improperly expended funds until remedied for the original purpose (previously, required the state to repay or authorized offset against other funds); and (4) permits the Secretary to initiate withholding based on a complaint of serious deficiency concerning a state.

This section amends the Secretary's accountability and reporting requirements under the Community Services Block Grant Act by (1) updating the name of the Senate committee referenced in subsection (b)(3) from the Committee on Labor and Human Resources to the Committee on Health, Education, Labor, and Pensions, and (2) striking subsection (b)(4).

This section modifies the exception to the prohibition on using Community Services Block Grant funds for the purchase or improvement of land or construction or permanent improvement of facilities (other than low-cost residential weatherization or other energy-related home repairs) to apply to amounts appropriated under section 674(c) (from amounts reserved under section 674(b)(3)).

This section revises the Secretary of Health and Human Services' discretionary authority under the Community Services Block Grant (CSBG) Act to make grants, loans, guarantees, contracts, or cooperative arrangements by funding such authority from amounts made available to carry out the section (from funds reserved under CSBG § 674(b)(3)) and limiting authorized objectives to community economic development activities (paragraph (2)) and rural community development activities (paragraph (3)) by striking authority for activities to meet the needs of seasonal and migrant farmworkers and their families (e.g., day care, education, health care, housing; former paragraph (4)). (As background, CSBG discretionary funds support national activities to benefit low-income communities beyond flexible block grants to states.) The section also updates a reference in subsection (c) to the Senate Committee on Health, Education, Labor, and Pensions (from Labor and Human Resources).