1. In the event that the Congress of the United States approves a block grant system to fund social programs, the state may, subject to appropriation, use such block grant funds or in-kind services to provide a level of financial assistance for community action agencies to carry out community action programs through the community services block grants pursuant to the federal Community Services Block Grant Act and other such federal funding sources which may be appropriate. Each agency shall in accordance with section 660.376 receive a portion of available Community Services Block Grant Act funds based on that agency’s poverty population relative to the state’s total poverty population. Poverty levels shall be determined by the department of social services using criteria established by the United States Office of Management and Budget.

2. In the event that federal funds are not available for the support of community action agencies, state funds may be appropriated or expended therefor, however only in an amount as defined in subsection 1 of this section.