Tripartite boards

Section 676B of the Community Services Block Grant Act (42 U.S.C. 9910) is amended— (1) in subsection (a)— (A) by amending paragraph (1) to read as follows: (1) Board In order for a private, nonprofit organization to be considered to be an eligible entity for purposes of 673(6), the entity shall be governed by a tripartite board of directors described in subparagraph (C) that fully participated in the development, planning, implementation, oversight, and evaluation of the programs, projects, and services carried out or provided through the subgrant made under section 675C(a) and all activities of the entity., (B) in paragraph (2)(A) by striking except and all that follows through requirement, and inserting (but if an elected official chooses not to serve, such official may designate a representative to serve as the voting board member); and, and (C) by adding at the end the following: (3) Compliance with tax-exempt and other requirements The board of a private, nonprofit organization shall ensure that the board operates and conducts activities under the subgrant made under section 679(Ca) that complies with— (A) the requirements for maintaining tax-exempt status under section 501(a) of the Internal Revenue Code of 1986 (26 U.S.C. 501(a)) regarding the governance of charities under section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)); and (B) applicable requirements of State nonprofit law., and (2) in subsection (b)— (A) in paragraph (1)— (i) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and (ii) in paragraph (2) by adding References under this subtitle to the board of an eligible entity shall apply to such other mechanism. at the end, (B) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B); respectively, (C) by striking public organizations.— and inserting, board or other mechanism.— (1), and (D) by adding at the end the following: (2) Compliance with State requirements and policy The board of a public entity shall ensure that the board operates in a manner that complies with State requirements for open meetings, financial transparency, and State open records policy., and (3) by adding at the end the following: (c) Expertise Each eligible entity shall ensure that the members of the board are provided resources, which may include contracted services with individuals and organizations with expertise in financial management, accounting, and law, to support the work of the board. (d) Board vacancies To fulfill the requirements under this section, an eligible entity shall fill a board vacancy not later than 6 months after such vacancy arises. In the event that an eligible entity is unable to fill a board vacancy in the 6-month period, the entity shall certify to the State that it is making a good faith effort to fill the vacancy and shall receive one additional 6-month period to fill such vacancy. (e) Operations and duties of the board The duties of a board described in paragraph (1) or (2) of subsection (a) shall include— (1) in the case of a board for a private, nonprofit organization that is an eligible entity, having legal and financial responsibility for administering and overseeing the eligible entity, including making proper use of Federal funds; (2) establishing terms for officers and adopting a code of ethical conduct, including a conflict of interest policy for board members; (3) participating in a comprehensive community needs assessment conducted at least once every three years, developing and adopting for the corresponding eligible entity an agency-wide strategic plan, and preparing the community action plan for the use of funds under this subtitle; (4) approving the eligible entity’s operating budget; (5) reviewing all major policies such that— (A) for private, nonprofit organizations that are eligible entities, a review includes conducting annual performance reviews of the eligible entity’s chief executive officer (or individual holding an equivalent position); and (B) for local public entities that are eligible entities, a review includes participating in annual performance reviews of the eligible entity’s chief executive officer (or individual holding an equivalent position); (6) performing oversight of the eligible entity to include— (A) conducting assessments of the eligible entity’s progress in carrying out programmatic and financial provisions in the community action plan; and (B) in the case of any required corrective action, reviewing the eligible entity’s plans and progress in remedying identified deficiencies; and (7) concerning personnel policies and procedures— (A) in the case of private, nonprofit organizations that are eligible entities, adopting personnel policies and procedures, including for hiring, annual evaluation, compensation, and termination, of the eligible entity’s chief executive officer (or individual holding a similar position); and (B) in the case of local public entities that are eligible entities, reviewing personnel policies and procedures, including for hiring, annual evaluation, compensation, and termination, of the eligible entity’s chief executive officer (or individual holding a similar position). (f) Conflict of interest In establishing the conflict of interest policy described in subsection (e)(2), a board shall ensure that such policy— (1) requires a board member to recuse themself from any discussion, deliberations, and votes relating to any contract or transaction from which the following would receive a direct financial benefit from the eligible entity: (A) such board member; (B) the immediate family member of such board member; or (C) an organization or a business from which such board member, or an immediate family of such board member, receives a direct financial benefit; (2) prohibits a board member from receiving compensation for serving on the board from the eligible entity other than for reasonable expenses, except that a board member’s receipt of an economic benefit from the eligible entity because such member is eligible to receive benefits and services under this subtitle shall not be considered to be compensation for purposes of this subsection; and (3) ensures all activities funded under this subtitle are conducted free of personal or family favoritism..