Community Services Authorization Act of 1998

Community Services Authorization Act of 1998 - Amends the Community Services Block Grant Act (CSBGA) to reauthorize and revise its programs.

(Sec. 2) Extends through FY 2003 the authorization of appropriations for community services block grants. Directs the Secretary of Health and Human Services (HHS) to reserve specified portions of annual appropriations for payments to territories, training and technical assistance and other activities, and discretionary activities.

Revises or adds provisions relating to: (1) program authorization; (2) apportionment of funds to territories; (3) allotment and payment of funds to States; (4) use of funds by States for grants to eligible entities; (5) State applications and plans; (6) designation and redesignation by States of eligible entities in unserved areas of the State; (7) tripartite boards for eligible entities; (8) direct payment of funds by the Secretary to Indian tribes and tribal organizations; (9) the Secretary's carrying out certain functions of the Act through the Office of Community Services, and through grants, contracts, or cooperative agreements; (10) the Secretary's use of set-aside funds for training, technical assistance, planning, evaluation, and data collection activities; (11) State monitoring of eligible entities to determine whether such entities meet performance goals, administrative standards, financial management requirements, and other State requirements; (12) 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 State requirements; (13) fiscal controls, audits, and withholding of Federal funds; (14) Federal and State accountability and reporting on the performance of eligible entities; (15) limitations on the use of funds; (16) participation of faith-based organizations in programs under the Act; and (17) the Secretary's use of set-aside funds for discretionary activities involving community economic development, rural community development, and neighborhood innovation projects.

(Sec. 3) Extends through FY 2003 the authorization of appropriations, under CSBGA, for the Secretary to make grants for: (1) community food and nutrition programs; and (2) national or regional programs designed to provide instructional activities for low-income youth.

Allows State drug testing of participants in programs, activities and services under CSBGA. Requires eligible entities to make certain paternity determinations.

(Sec. 5) Repeals requirements of the Human Services Reauthorization Act of 1986 relating to: (1) interest rates payable on certain rural development loans, and assignment of loan contracts; and (2) demonstration partnership agreements addressing the needs of the poor.