((a)) ** Designation** A State shall not be eligible to receive a grant from an allotment under section 12337 or 12338 of this title unless—

((1)) the chief executive officer of such State designates an independent State body that is composed of—

((A)) cabinet level representatives from each agency of such State that has responsibilities for programs affecting young individuals who shall comprise a majority of the independent State body; and

((B)) individuals appointed from among—

((i)) private nonprofit providers of services to young individuals;

((ii)) advocacy and citizens groups concerned with young individuals;

((iii)) committees of the legislature of such State that have responsibility for young individuals;

((iv)) leaders who are young individuals, including such leaders who are recipients of services provided under this subchapter;

((v)) representatives of the business community;

((vi)) representatives of employees of providers of services to young individuals;

((vii)) representatives of general purpose local government; and

((viii)) such staff as shall be necessary to—

((I)) develop a State plan to be submitted to the Commissioner for approval under ;

((II)) administer and monitor the State plan within such State;

((III)) assist in the coordination of all State activities related to the purpose of the chapter;

((IV)) serve as an effective and visible advocate for young individuals by reviewing and commenting on all State plans, budgets, and policies that affect such individuals and the families of such individuals by providing technical assistance to any agency, organization, association, or individual representing the needs of young individuals; and

((2)) the independent State body designated under paragraph (1)—

((A)) develops a system for the distribution within the State of funds received under sections 12337 and 12338 of this title by the chief executive officer;

((B)) submits a description of such system to the Commissioner for review and comment; and

((C)) ensures that preference will be given in such distribution of funds to developing or supporting local service delivery systems that—

((i)) provide a range of services organized to tailor responses to needs rather than a predetermined array of services;

((ii)) are rooted in and part of the communities that such systems are designed to serve as measured by the degree to which public and private community leaders and young individuals participate in the planning of such systems; and

((iii)) demonstrate an ability to develop systematic collaboration among service providers on behalf of children, youth and families, including joint planning, joint financing, joint service delivery, common intake and assessment, and other arrangements that promote more effective service systems for such individuals.

((b)) ** Existing entity** The Commissioner may approve a State plan in which the chief executive officer of the State designates as the independent State body an existing State entity that is comprised of the parties described in subsection (a) and that is authorized to conduct the same range of interagency planning and coordination activities.