SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children First Child Support Reform 
Act of 1999''.

SEC. 2. DISTRIBUTION AND TREATMENT OF CHILD SUPPORT COLLECTED BY THE 
              STATE.

    (a) State Option to Pass All Child Support Collected Directly to 
the Family.--
            (1) In general.--Section 457 of the Social Security Act (42 
        U.S.C. 657) is amended--
                    (A) in subsection (a), by striking ``(e) and (f)'' 
                and inserting ``(e), (f), and (g)''; and
                    (B) by adding at the end the following:
    ``(g) State Option to Pass Through All Support Collected to the 
Family.--
            ``(1) In general.--At State option, subject to paragraph 
        (2), and subsections (a)(4), (b), (e), (d), and (f), this 
        section shall not apply to any amount collected on behalf of a 
        family as support by the State and any amount so collected 
        shall be distributed to the family.
            ``(2) Income protection requirement.--A State may not elect 
        the option described in paragraph (1) unless the State ensures 
        that any amount distributed to a family in accordance with that 
        paragraph is not included in the income of the family for 
        purposes of determining the eligibility of the family for, or 
        the amount of, assistance under the State program funded under 
        part A until the family has actually received the amount.
            ``(3) Option to pass through amounts collected pursuant to 
        a continued assignment.--At State option, any amount collected 
        pursuant to an assignment continued under subsection (b) may be 
        distributed to the family in accordance with paragraph (1).
            ``(4) Release of obligation to pay federal share.--If a 
        State that elects the option described in paragraph (1) also 
        elects to disregard under section 408(a)(12)(B) at least 50 
        percent (determined, at the option of the State, in the 
        aggregate or on a case-by-case basis) of the total amount 
        annually collected and distributed to all families in 
        accordance with paragraph (1) for purposes of determining the 
        amount of assistance for such families under the State program 
        funded under part A, the State is released from--
                    ``(A) calculating the Federal share of the amounts 
                so distributed and disregarded; and
                    ``(B) paying such share to the Federal 
                Government.''.
            (2) Authority to claim passed through amount for purposes 
        of tanf maintenance 
        of effort requirements.--Section 409(a)(7)(B)(i)(I)(aa) of the 
        Social Security Act (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is 
        amended by inserting ``, and, in the case of a State that 
        elects under section 457(g) to distribute any amount so 
        collected directly to the family, any amount so distributed 
        (regardless of whether the State also disregards that amount 
        under section 408(a)(12) in determining the eligibility of the 
        family for, or the amount of, such assistance)'' before the 
        period.
    (b) State Option to Disregard Child Support Collected for Purposes 
of Determining Eligibility for, or Amount of, TANF Assistance.--Section 
408(a) of the Social Security Act (42 U.S.C. 608(a)) is amended by 
adding at the end the following:
            ``(12) State option to disregard child support in 
        determining eligibility for, or amount of, assistance.--
                    ``(A) Option to disregard child support for 
                purposes of determining eligibility.--A State to which 
                a grant is made under section 403 may disregard any 
                part of any amount received by a family as a result of 
                a child support obligation in determining the family's 
                income for purposes of determining the family's 
                eligibility for assistance under the State program 
                funded under this part.
                    ``(B) Option to disregard child support in 
                determining amount of assistance.--A State to which a 
                grant is made under section 403 may disregard any part 
                of any amount received by a family as a result of a 
                child support obligation in determining the amount of 
                assistance that the State will provide to the family 
                under the State program funded under this part.''.
    (c) Maintenance of Effort Requirement.--Section 454 of the Social 
Security Act (42 U.S.C. 654) is amended--
            (1) in paragraph (32), by striking ``and'' at the end;
            (2) in paragraph (33), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(34) provide that, if the State elects to distribute 
        support directly to a family in accordance with section 457(g), 
        the State share of expenditures under this part for a fiscal 
        year shall not be less than an amount equal to the highest 
        amount of such share expended for fiscal year 1995, 1996, 1997, 
        or 1998 (determined without regard to any amount expended that 
        was eligible for payment under section 455(a)(3)).''.
    (d) Conforming Amendment.--Section 457(f) of the Social Security 
Act (42 U.S.C. 657(f)) is amended by striking ``Notwithstanding'' and 
inserting ``Amounts Collected On Behalf of Children in Foster Care.--
Notwithstanding''.
    (e) Effective Date.--The amendments made by this section take 
effect on October 1, 1999.
Children First Child Support Reform Act of 1999 - Amends title IV, part D of the Social Security Act (Child Support and Establishment of Paternity) to prescribe guidelines for the States to exercise the option of: (1) distributing State-collected child support payments directly to a family receiving assistance under the temporary assistance to needy families program; and (2) disregarding any such payments when determining the family's eligibility for assistance under such program.
Children First Child Support Reform Act of 1999