(1) Subject to subsection (2), the executive director, in consultation with the commission, shall designate community action agencies to fulfill the requirements of this act in the service areas governed by 1 or more units of local government. A community action agency designated by the executive director may be 1 of the following:

    (a) A public office or agency of a unit of local government that is designated as a community action agency by the chief elected official of that unit of government.

    (b) A public office or agency that is designated as a community action agency by the chief elected officials of a combination of 2 or more units of local government.

    (c) A nonprofit private agency serving 1 or more units of local government approved by the chief elected official of the unit of local government that includes the service area, or if more than 1 unit of local government is included in the service area, by the chief elected officials of the county or counties in which the local governments are located and of at least 2/3 of the cities, villages, and townships in the service area that have a population of not less than 100,000.

    (d) A public or private nonprofit agency designated by 1 or more Native American tribal governments that have been established under state or federal law.

    (2) Before the executive director designates or rescinds the designation of a community action agency, the executive director shall do all of the following:

    (a) Consult with the director.

    (b) Consult with the chief elected official of each county in this state and each city, village, or township with a population of not less than 100,000 within the existing or proposed service area.

    (c) Conduct not less than 1 public meeting in the service area to provide low-income and other citizens living within the service area the opportunity to review and comment upon the strengths and weaknesses of the existing of proposed community action agency.

    (d) Consult with and obtain the advice of the commission on the proposed action.

    (3) Subject to the requirements of subsection (2) and the procedures under the community services block grant act, subtitle B of title VI of the omnibus budget reconciliation act of 1981, Public Law 97-35, 42 USC 9901 to 9924, the executive director may rescind a designation of a community action agency for cause.

    (4) Notwithstanding subsection (1), each community action agency that has been designated by the community services administration according to the economic opportunity act of 1964, Public Law 88-452, and that is in operation on July 29, 2003, shall continue as a community action agency.