To expand the purposes of the program of block grants to States for temporary assistance for needy families to include poverty reduction, and to make grants available under the program for that purpose.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Child Poverty Reduction Act''.

SEC. 2. ADDITIONAL PURPOSE OF PROGRAM OF BLOCK GRANTS TO STATES FOR 
              TEMPORARY ASSISTANCE FOR NEEDY FAMILIES.

    Section 401(a) of the Social Security Act (42 U.S.C. 601(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(5) reduce poverty of families with children in the 
        United States.''.

SEC. 3. ADDITION OF CHILD POVERTY REDUCTION BONUS GRANTS TO TANF 
              PROGRAM.

    Section 403(a) of the Social Security Act (42 U.S.C. 603(a)) is 
amended by adding at the end the following:
            ``(6) Bonus to reward states that reduce child poverty.--
                    ``(A) In general.--Beginning with fiscal year 2003, 
                the Secretary shall make a grant pursuant to this 
                paragraph to each State for each fiscal year for which 
                the State is a qualified child poverty reduction State.
                    ``(B) Amount of grant.--
                            ``(i) In general.--Subject to this 
                        subparagraph, the amount of the grant to be 
                        made to a qualified child poverty reduction 
                        State for a fiscal year shall be an amount 
                        equal to--
                                    ``(I) the number of children who 
                                had not attained 18 years of age by the 
                                end of the then most recently completed 
                                calendar year and who resided in the 
                                State as of the end of such calendar 
                                year, divided by the number of such 
                                children who resided in the United 
                                States as of the end of such calendar 
                                year; multiplied by
                                    ``(II) the amount appropriated 
                                pursuant to subparagraph (F) for the 
                                fiscal year.
                            ``(ii) Limitations.--
                                    ``(I) Minimum grant.--The amount of 
                                the grant to be made to a qualified 
                                child poverty reduction State for a 
                                fiscal year shall be not less than 
                                $1,000,000.
                                    ``(II) Maximum grant.--The amount 
                                of the grant to be made to a qualified 
                                child poverty reduction State for a 
                                fiscal year shall not exceed an amount 
                                equal to 5 percent of the State family 
                                assistance grant for the fiscal year.
                            ``(iii) Pro rata increase.--If the amount 
                        available for grants under this paragraph for a 
                        fiscal year is greater than the total amount of 
                        payments otherwise required to be made under 
                        this paragraph for the fiscal year, then the 
                        amount otherwise payable to any State for the 
                        fiscal year under this paragraph shall, subject 
                        to clause (ii)(II), be increased by such equal 
                        percentage as may be necessary to ensure that 
                        the total of the amounts payable for the fiscal 
                        year under this paragraph equals the amount 
                        available for the grants.
                            ``(iv) Pro rata reduction.--If the amount 
                        available for grants under this paragraph for a 
                        fiscal year is less than the total amount of 
                        payments otherwise required to be made under 
                        this paragraph for the fiscal year, then the 
                        amount otherwise payable to any State for the 
                        fiscal year under this paragraph shall, subject 
                        to clause (ii)(I), be reduced by such equal 
                        percentage as may be necessary to ensure that 
                        the total of the amounts payable for the fiscal 
                        year under this paragraph equals the amount 
                        available for the grants.
                    ``(C) Use of grant.--A State to which a grant is 
                made under this paragraph shall use the grant for any 
                purpose for which a grant made under this part may be 
                used.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Qualified child poverty reduction 
                        state.--The term `qualified child poverty 
                        reduction State' means, with respect to a 
                        fiscal year, a State if--
                                    ``(I) the child poverty rate 
                                achieved by the State for the then most 
                                recently completed calendar year for 
                                which such information is available is 
                                less than the lowest child poverty rate 
                                achieved by the State during the 
                                applicable period; and
                                    ``(II) the average depth of child 
                                poverty in the State for the then most 
                                recently completed calendar year for 
                                which such information is available is 
                                not greater than the average depth 
of child poverty in the State for the calendar year that precedes such 
then most recently completed calendar year.
                            ``(ii) Applicable period.--In clause (i), 
                        the term `applicable period' means, with 
                        respect to a State and the calendar year 
                        referred to in clause (i)(I), the period that--
                                    ``(I) begins with the calendar year 
                                that, as of October 1, 2002, precedes 
                                the then most recently completed 
                                calendar year for which such 
                                information is available; and
                                    ``(II) ends with the calendar year 
                                that precedes the calendar year 
                                referred to clause (i)(I).
                            ``(iii) Child poverty rate.--The term 
                        `child poverty rate' means, with respect to a 
                        State and a calendar year, the percentage of 
                        children residing in the State during the 
                        calendar year whose family income for the 
                        calendar year is less than the poverty line 
                        then applicable to the family.
                            ``(iv) Average depth of child poverty.--The 
                        term `average depth of child poverty' means 
                        with respect to a State and a calendar year, 
                        the average dollar amount by which family 
                        income is exceeded by the poverty line, among 
                        children in the State whose family income for 
                        the calendar year is less than the applicable 
                        poverty line.
                            ``(v) Poverty line.--The term `poverty 
                        line' has the meaning given the term in section 
                        673(2) of the Omnibus Budget Reconciliation Act 
                        of 1981, including any revision required by 
                        such section applicable to a family of the size 
                        involved.
                    ``(E) Family income determinations.--For purposes 
                of this paragraph, family income includes cash income, 
                child support payments, government cash payments, and 
                benefits under the Food Stamp Act of 1977 that are 
                received by any family member, and family income shall 
                be determined after payment of all taxes and receipt of 
                any tax refund or rebate by any family member.
                    ``(F) Appropriations.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated for fiscal 
                        year 2003 and each fiscal year thereafter 
                        $150,000,000 for grants under this paragraph.
                            ``(ii) Availability.--Amounts made 
                        available under clause (i) shall remain 
                        available until expended.''.

Summary: Child Poverty Reduction Act -Amends part A (TANF) of title IV of the Social Security Act to: (1) make it an additional purpose of TANF to reduce poverty of families with children in the United States. And (2) require the Secretary of Health and Human Services to make child poverty reduction bonus grants to any State whose child poverty rate for a completed calendar year is less than the rate the State achieved during the preceding calendar year.