Asset-Building for Working Americans Act

Summary: Asset-Building for Working Americans Act - Amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act (SSA), as well as SSA titles XVI (Supplemental Security Income) (SSI) and XIX (Medicaid), to require States to disregard for the following 12-month period any refunds or advance payments of the earned income tax credit (EITC) in determining eligibility for benefits under TANF, SSI, and Medicaid.  Establishes up to a two percent reduction in the next fiscal year's grant to any State as a penalty for failure to disregard such payments. 
Amends the United States Housing Act of 1937 to require a similar disregard for EITC payments under public housing and rental assistance programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Asset-Building for Working Americans 
Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) The existing resource limitations affecting eligibility 
        for benefits under the program of block grants to States for 
        Temporary Assistance for Needy Families, the Supplemental 
        Security Income program, the Medicaid program, and public 
        housing programs triggered by savings made through earned 
        income tax credits may encourage working families to make 
        unnecessary purchases in order to remain eligible for public 
        assistance rather than building the long-term assets required 
        for escaping poverty permanently, and may prevent low-income 
        working families from obtaining the temporary public assistance 
        needed while they build the assets required for escaping 
        poverty permanently;
            (2) adjusting the resource limitations under such programs 
        to disregard savings made through earned income tax credits for 
        12 months will enable working families to make the necessary 
        savings to build long-term security through assets while still 
        obtaining temporary public assistance for living and raising 
        children in health and safety;
            (3) 33 percent of all households in the United States, and 
        60 percent of African-American households, have no or negative 
        financial assets; and
            (4) 46.9 percent of all children, including 40 percent of 
        Caucasian children and 75 percent of African-American children, 
        in the United States live in households with no financial 
        assets.

SEC. 3. 12-MONTH DISREGARD OF PAYMENTS OF EARNED INCOME TAX CREDIT 
              UNDER THE PROGRAM OF BLOCK GRANTS TO STATES FOR TEMPORARY 
              ASSISTANCE FOR NEEDY FAMILIES.

    (a) Requirement.--Section 408(a) of the Social Security Act (42 
U.S.C. 608(a)) is amended by adding at the end the following:
    ``(12) 12-month disregard of eitc payments.--A State to which a 
grant is made under section 403 of this Act shall, in determining the 
eligibility of an individual for assistance, and the amount or type of 
assistance to be provided to an individual, under the State program 
funded under this part, disregard any refund of Federal income taxes 
made to the individual by reason of section 32 of the Internal Revenue 
Code of 1986 (relating to earned income tax credit), and any payment 
made to the individual by an employer under section 3507 of such Code 
(relating to advance payment of earned income credit), for a period 
that begins with the month in which the refund or payment is received 
and that is of a duration of not less than 12 months.''.
    (b) Penalty.--Section 409(a) of such Act (42 U.S.C. 609(a)) is 
amended by adding at the end the following:
    ``(15) Failure to disregard eitc payments for 12 months.--If the 
Secretary determines that a State to which a grant is made under 
section 403 for a fiscal year has violated section 408(a)(12) during 
the fiscal year, the Secretary shall reduce the grant payable to the 
State under section 403(a)(1) for the immediately succeeding fiscal 
year by an amount equal to not more than 2 percent of the State family 
assistance grant.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1999.

SEC. 4. 12-MONTH DISREGARD OF PAYMENTS OF EARNED INCOME TAX CREDIT 
              UNDER THE SUPPLEMENTAL SECURITY INCOME PROGRAM.

    (a) In General.--Section 1613(a)(11) of the Social Security Act (42 
U.S.C. 1382b(a)(11)) is amended by striking ``for the month of receipt 
and the following month'' and inserting ``for the 12-month period that 
begins with the month of receipt''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to benefits for months beginning on or after October 1, 1999.

SEC. 5. DISREGARD UNDER MEDICAID PROGRAM.

    (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396a) is amended--
            (1) in subsection (a)(17)--
                    (A) by striking ``and'' before ``(D)''; and
                    (B) by inserting before ``; and'' the following: 
                ``, and (E) do not take into account for a period of 12 
                months refunds and advance payments described in 
                subsection (aa)'';
            (2) in subsection (f), by striking ``subsection (e)'' and 
        inserting ``subsections (e) and (aa))''; and
            (3) by adding at the end the following new subsection:
    ``(aa) Notwithstanding any other provision of this title, in 
determining eligibility for, and the amount of, medical assistance 
provided under this title, any refund of Federal income taxes made to 
an individual by reason of section 32 of the Internal Revenue Code of 
1986 (relating to earned income tax credit), and any payment made to 
such an individual by an employer under section 3507 of such Code 
(relating to advance payment of earned income credit) shall not be 
taken into account as income or resources for a period of 12 months.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to eligibility determinations made on or after October 1, 1999.

SEC. 6. 12-MONTH DISREGARD OF PAYMENTS OF EARNED INCOME TAX CREDIT 
              UNDER PUBLIC HOUSING AND SECTION 8 RENTAL ASSISTANCE 
              PROGRAMS.

    Section 3(b)(4) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)(4)) is amended by adding at the end the following new 
sentence: ``In determining the income of a household for purposes of 
this paragraph, the Secretary shall disregard any refund of Federal 
income taxes made to any member of the household by reason of section 
32 of the Internal Revenue Code of 1986 (relating to earned income tax 
credit), and any payment made to any member of the household by an 
employer under section 3507 of such Code (relating to advance payment 
of earned income credit), for the 12-month period that begins with the 
month in which the refund or payment is received.''.