" SENATE ! 109TH CONGRESS

1st Session 

REPORT

109–51

Calendar No. 60

PERSONAL RESPONSIBILITY AND 

INDIVIDUAL DEVELOPMENT FOR EVERYONE 

ACT (PRIDE)

R E P O R T

[To accompany S. 667]

MARCH 30, 2005.—Ordered to be printed 


E:\Seals\Congress.#13
PERSONAL RESPONSIBILITY AND

INDIVIDUAL DEVELOPMENT FOR EVERYONE ACT (PRIDE)

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

20–263 

" SENATE ! 109TH CONGRESS

1st Session 

REPORT

2005

109–51

Calendar No. 60

PERSONAL RESPONSIBILITY AND 

INDIVIDUAL DEVELOPMENT FOR EVERYONE 

ACT (PRIDE)

R E P O R T

[To accompany S. 667]

MARCH 30, 2005.—Ordered to be printed


E:\Seals\Congress.#13
Calendar No. 60

109TH CONGRESS REPORT " SENATE ! 1st Session 109–51

PERSONAL RESPONSIBILITY AND INDIVIDUAL 

DEVELOPMENT FOR EVERYONE ACT (PRIDE) 

MARCH 30, 2005.—Ordered to be printed 

Filed under authority of the order of March 17, 2005

Mr. GRASSLEY, from the Committee on Finance, 

submitted the following 

R E P O R T 

[To accompany S. 667] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Finance reported an original bill (S. 667) to 

reauthorize and improve the program of block grants to States for 

temporary assistance for needy families, improve access to quality 

child care, and for other purposes, having considered the same, reports favorably thereon, and recommends that the bill do pass. 

I. BACKGROUND 

The 1996 welfare reform law supplanted the main existing welfare program for families, Aid to Families with Dependent Children 

(AFDC) and its work/training component (JOBS), and greatly 

changed most other federally supported aid to the poor. It was enacted after debate stretching over 3 years and two presidential vetoes. 

The move to reform this system was prompted by soaring AFDC 

rolls and higher costs, extant federal waivers for more than half 

the states to undertake their own welfare reforms, frustration with 

the long AFDC tenure and youth of many recipient parents, concerns over the extent of unwed parenthood among recipients, reaction to AFDC’s unrestricted entitlement nature, and disillusion 

with the most recent attempt at reform (the 1988 Family Support 

Act). 

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The welfare portion of the House Republicans’ Contract with 

America agenda was introduced as the Personal Responsibility Act 

in January 1995. The House and Senate both passed versions of 

the legislation. 

A preliminary House-Senate agreement on H.R. 4 was added to 

the 1995 Balanced Budget Act (H.R. 2491) in late November 1995. 

Excepting some small but controversial items, it contained the gist 

of the final accord on H.R. 4. President Clinton vetoed it on December 6, 1995—objecting to Medicaid provisions in the larger measure. Then, on December 21–22, 1995, Congress approved the final 

House-Senate H.R. 4 agreement (the Personal Responsibility and 

Work Opportunity Act). The President vetoed this H.R. 4 accord on 

January 9, 1996, citing insufficient child care and work support 

provisions. 

By the end of June 1996, House and Senate Republicans had essentially incorporated the vetoed H.R. 4, with added money for 

child care and contingencies, in H.R. 3734 (the FY1997 budget reconciliation bill). On August 22, 1996, President Clinton signed the 

welfare reform law. 

107TH CONGRESS

Programs authorized under PRWORA were scheduled to expire 

on September 30, 2002. In February, 2002 President Bush released 

his reauthorization proposal. The House of Representatives passed 

a welfare bill very similar to the President’s proposal. 

In the 107th Congress, the Senate Finance Committee reported 

legislation based on a proposal crafted by a bipartisan group of 

Senators on the Senate Finance Committee which included a number of provisions adopted from the President’s proposal for welfare 

reform. The full Senate did not pass a reauthorization of Temporary Assistance for Needy Families (TANF). 

108TH CONGRESS

The Finance Committee continued the work done in the 107th 

Congress relative to welfare reform. In the 108th Congress, the Finance Committee held a number of bipartisan briefings on: fatherhood initiatives, data collection, state plans, workforce attachment 

and advancement, work readiness, and family formation policies. 

The committee made a sustained effort to hear from stakeholders 

on the issue of welfare reform, including policy experts, advocates, 

family groups, organizations representing the states, and officials 

from the Department of Health and Human Services. 

The full committee held one field hearing and one committee 

hearing and one subcommittee hearing. 

On September 10, 2003, the Senate Finance Committee favorably 

reported the Personal Responsibility and Individual Development 

for Everyone (PRIDE) Act. 

The legislation was considered by the full Senate during the 

week of March 29, 2004 during which time an amendment offered 

by Senator Olympia Snowe (R–ME) was agreed to which would increase mandatory child care spending by $6 billion over 5 years. 

The full Senate did not pass a reauthorization of Temporary Assistance for Needy Families (TANF). 

TANF has operated under a series of short term extensions of 

federal law since September 30, 2002. 

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109TH CONGRESS

The Committee determined that after nearly four years of debate, including three full committee hearings and two subcommittee hearings in the 107th Congress and one full committee 

hearing, one field hearing and one subcommittee hearing in the 

108th Congress, two markups and one week consideration on the 

senate floor, that debate over the reauthorization of TANF had 

been extensive. The Committee determined that no more hearings 

on welfare reform were necessary. 

The Finance Committee began deliberations in the 109th Congress by agreeing to many of the provisions negotiated in the 108th 

Congress and which were subsequently included in the PRIDE bill. 

The PRIDE bill, as reported out of the Senate Finance Committee 

in the 109th Congress, was included as part of the Senate Republican Leadership agenda in S. 6, sponsored by Senator Rick 

Santorum (R–PA).

The following provisions are retained from the PRIDE bill as reported from the Senate Finance Committee in 2003 and are included in the PRIDE bill as reported from the Senate Finance 

Committee in 2005. The PRIDE bill: 

• Increases the work participation rate for states 5 percent each 

year, from 50 percent in 2006 to 70 percent in 2010. 

• Phases out the caseload reduction credit, which placed too 

much emphasis on caseload reduction and dramatically diminished 

most states’ work participation rates. The Committee replaces the 

caseload reduction credit with an employment credit which emphasizes moving TANF recipients into good jobs. 

• Caps the credit. The value of the credit is phased down so that 

in FY 2010, all states must have a real work participation rate of 

50 percent. 

• Increases the minimum threshold for participation in core 

work activities from 20 to 24 hours. 

• Increases the ‘‘standard hour’’ (when an adult counts as ‘‘one 

family’’ for purposes of calculating a state’s participation rate) from 

30 to 34 for a parent with a child six and over. Provides states with 

increased flexibility to capture partial and extra credit for adult 

participation in countable activities below and above the standard 

hour, whereas under PRWORA states could only count adults who 

met the standard hour and provided no extra credit for adults who 

exceeded the standard hour. 

• Increases the ‘‘standard hour’’ (when an adult counts as ‘‘one 

family’’ for purposes of calculating a state’s participation rate) from 

20 to 24 for a parent with a child under six. Allows states to capture partial and extra credit for adult participation in countable activities below and above the standard hour. 

• Ensures that every family has a plan for achieving self-sufficiency. States must prepare a plan for every family receiving assistance and in most cases that plan should involve some amount 

of work or work readiness activities. 

• Allows states to engage individuals in a broader range of activities, including job search, substance abuse treatment, post-secondary education and training and other barrier removal activities 

after the 24 hour threshold of core work activities is met. 

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• Allows states to engage adult recipients in a broad range of activities, including substance abuse treatment, post-secondary education and other barrier removal activities for a three-month period 

in each 24 month period. 

• Allows states to engage adult recipients in education and rehabilitative activities combined with work or work readiness activities 

for an additional three months out of 24 months for a total of 6 

months. 

• Includes a provision allowing adult recipients to attend longer 

duration vocational or post-secondary education. 

• The Committee bill also strengthens and improves child support collection and gives states additional financing options to passthrough more child support funding collected on behalf of families 

receiving assistance and families who formerly received assistance. 

In the ongoing effort to achieve a bipartisan consensus on the 

legislation, the PRIDE bill as reported by the Senate Finance Committee in 2005 added additional provisions to the bill considered in 

the previous Congress. These include: 

Providing for mandatory spending and appropriating funding for 

additional grants by: 

• Increasing mandatory child care spending an additional $5 billion over five years, bringing the total increase for mandatory child 

care spending to $6 billion over five years; 

• Increasing funding for Title XX—the Social Services Block 

Grant by $1 billion over five years; 

• Increasing annual mandatory funding by $20 million for state 

demonstration and by $30 million for national demonstrations to 

promote responsible fatherhood; 

• Providing $10 million annually for the development of comprehensive indicators of child well-being; 

• Providing $5 million a year to be spent over 5 years for a national teen pregnancy prevention resource center to provide technical assistance to state, tribal, local, community, and faith based 

organizations seeking to reduce the rates of teen pregnancy.

Providing additional state flexibility by: 

• Allowing states the option to receive work participation rate 

credit for an individual whose plan specifies that they have a continuing need for rehabilitative services in order to engage in direct 

work activities. The addition permits states the option of continuing to provide rehabilitative services, if needed, beyond 6 

months. To be counted as working, recipients must be engaged in 

additional work activities for at least half the time required to 

count recipients without disabilities. Eligible individuals must be 

determined, using a medically acceptable clinical or diagnostic 

technique, as having a disability that impedes the individual’s ability to function in a work setting. To be eligible for the state option 

state agencies must work collaboratively in assisting the person 

with disabilities. 

• By clarifying that parenting skills building shall count as a 

qualified work activity. The mark further clarifies substance abuse 

counseling or treatment in the list of qualified activities to mean 

drug and alcohol abuse counseling or treatment. 

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ASSISTING INDIAN TRIBES

The Committee bill makes a number of improvements to assist 

Indian tribes. The 1996 welfare law permitted Indian tribes to operate their own welfare programs for the first time. The Committee 

is informed that there are now currently 45 approved Tribal TANF 

plans (38 tribals, 3 Alaskan native associations) serving 230 tribes 

and Alaskan Native villages. Additionally, there are currently 10 

new plans in the review and negotiation process and 15 additional 

letters of intent that have been submitted. 

These tribes and intertribal consortia have taken advantage of 

the flexibility allowed under TANF to design culturally appropriate 

programs to support low-income American Indians. This important 

policy, allowing for tribal administration of programs to tribal citizens, is consistent with the value of tribal sovereignty. Although 

tribes have shown enthusiasm for taking on TANF administration, 

there is more work to be done. Less than 1⁄3 of tribes are served 

by tribal TANF programs, largely due to prohibitive start-up costs 

and insufficient administrative support. Tribes that are administering TANF have had to supplement the funding they receive to 

implement TANF. Moreover, according to the Census Bureau, 25.7 

percent of American Indians live in poverty, more than twice the 

national poverty rate. The average household income for American 

Indians is only 72.9 percent of that of the rest of Americans. 

The Committee bill contains critical provisions to support tribes 

in setting up and improving tribal TANF programs while exercising 

their sovereignty to adapt their programs to better fit the needs of 

American Indians residing in tribal communities. The Committee 

bill includes provisions to support economic development and job 

creation in Indian Country, better facilitating opportunities for 

tribal citizens to move from welfare (whether served by state or 

tribal programs) to work. Provisions supporting tribal capacity 

building, technical assistance, and infrastructure development for 

tribal human service programs bring much-needed resources to 

tribes operating their own welfare programs. Funding to expand 

job training programs and lock in tribal child care funding at the 

current rate is also included. Another provision allows tribes with 

high joblessness rates the continued flexibility to determine how 

best to approach work requirements and terms of assistance. The 

addition of a GAO study to identify barriers for urban Indians accessing benefits and the new requirements for HHS to collect more 

comprehensive data on receipt of benefits among American Indians 

will contribute to the data needed to address poverty and work 

supports in Indian Country. 

ENCOURAGING HEALTHY MARRIAGE PROMOTION

The Committee intends that healthy marriage promotion programs, will, by definition, help couples improve the skills they need 

to form healthy, mutually respectful, non-violent relationships that 

lead to more stable, loving and committed marriages. 

The Committee is aware that domestic violence is a problem and 

a barrier to self-sufficiency for many TANF recipients as well as 

those not receiving TANF, regardless of whether or not couples are 

participating in counseling or in marriage promotion activities. The 

Committee wants to ensure that marriage promotion programs are 

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supported in their efforts to address the safety of domestic violence 

victims including the need to escape violent relationships. 

The Committee finds that social service programs should better 

integrate an awareness of the larger issue of domestic violence into 

their services and the TANF program represents a particularly relevant avenue for identifying those who need or are at risk of needing domestic violence services. 

Provisions that enhance attention to Domestic Violence/Explanation 

of Provisions 

Given the high incidence of DV in many women’s lives, this program provides an opportunity to identify and provide services that 

could help those who face multiple barriers to self sufficiency including those in unhealthy relationships. 

The Committee bill includes a number of provisions that address 

the need to identify and respond to domestic violence for families. 

The committee finds that these provisions are integral features of 

any state marriage initiative. The committee encourages states 

that have previously established marriage promotion activities to 

incorporate these provisions into their current programs as well as 

any future marriage promotion activities states undertake with 

their TANF block grant and MOE. 

1. Voluntary Participation 

The Committee bill requires that participation in all marriage 

promotion programs must be voluntary. Therefore, TANF recipients must be informed that participation in marriage promotion is 

voluntary and if they elect to participate in such programs and opt 

to discontinue, no sanction may be imposed solely for nonparticipation or disenrollment in these activities. However, the state may reassign TANF recipients at any time to other activities in accordance with universal engagement requirements. In addition, any 

grantee of funds for marriage promotion must detail how they will 

ensure that participation in their programs is voluntary and how 

they will inform participants that their participation is voluntary. 

2. Domestic Violence Consultation 

The Committee bill stipulates that funding will not be provided 

for marriage promotion activities unless the recipient of funds 

consults with domestic violence organizations, which the committee 

understands to be local, State or national organizations with recognized expertise in the dynamics of domestic violence and a history 

of working with survivors of domestic violence and whose primary 

purpose is to provide services to victims of domestic violence or engage in domestic violence intervention or prevention activities. This 

consultation will be for the purpose of developing policies, procedures, programs and training necessary to appropriately address 

domestic violence in families served by programs and activities 

which promote marriage. The committee believes that applicants 

should consider the issues and needs related to domestic violence 

awareness in the overall design of their services and proposals. An 

applicant for a grant will outline in the application for funds how 

the funded program will address issues of domestic violence. All 

marriage promotion programs must establish protocols for helping 

identify instances or risks of domestic violence and specify proceVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
7

dures for making service referrals and providing protections and 

appropriate assistance. 

3. Reports 

A bi-annual report is required from the Secretary of HHS providing a detailed description of the programs and activities funded 

by marriage promotion grants and how each program addresses domestic violence. Annual reports are required of grantees under Section 103 detailing how the program addresses domestic violence. 

4. Funding for domestic violence prevention grants

The Committee recognizes that TANF programs provide a unique 

opportunity to identify and help address issues of domestic violence 

among vulnerable families that these programs serve. Accordingly, 

$10 million is authorized annually to develop and implement programs designed to address domestic violence as a barrier to healthy 

relationships, marriage, and economic security. Such funding shall 

be used for grants, contracts, and interagency agreements to provide training for caseworkers administering TANF as well as technical assistance, services for victims of domestic violence and activities related to the prevention of domestic violence. 

This funding would complement an authorization of $20 million 

for Domestic Violence Prevention Grants (Section 114) that can be 

used for additional activities including developing and disseminating best practices for addressing domestic and sexual violence 

and disseminating research on the causes of domestic violence and 

abuse. While discretionary in nature, it is the Committee’s intent 

that funding for these programs may not be diverted from existing 

domestic violence prevention or services programs. 

CONCLUSION

The Committee finds that during the years of debate on the issue 

of welfare reform, a number of different perspectives on the best 

approach to take for the next phase of welfare reform have been 

discussed. The Committee has heard arguments that the most effective way to assist families make the transition from welfare to 

work was to increase the time that adults receiving assistance 

spent engaged in meaningful work activities. The Committee finds 

that the correlation between full time work and increased earning 

is compelling. 

The Committee has heard arguments that increasing the amount 

of time allowed for education and training led to increased earnings 

and self-sufficiency. The Committee finds that the correlation between increased education and increased earnings is compelling as 

well. 

The Committee has heard that encouraging marriage and reducing out-of-wedlock births would net positive outcomes for children. 

The Committee has heard that increasing state flexibility should 

be an integral part of any reform effort. 

The Committee finds when working with vulnerable families on 

assistance, or struggling to keep from having to go on assistance, 

there is no such thing as ‘‘one size fits all.’’ While education may 

be the best approach for some, it may not be for others. Encouraging healthy family formation may be what one family needs, but 

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perhaps this approach would not be in the best interest of another 

family in difference circumstances. 

The Committee bill takes a ‘‘blended approach’’ to welfare reforms and strives to find balance among a number of perspectives. 

PRIDE increases the emphasis on work and work readiness activities as well as increases the flexibility for states to engage adults 

in education and training activities. PRIDE also provides resources 

to encourage states to develop innovative family formation programs, while making it clear that participation in these programs 

must be voluntary and the program must be developed with domestic violence professionals. 

The Committee finds that the PRIDE bill represents a number 

of improvements over current law and that it would contribute to 

moving families out of dependency and into greater self-sufficiency.

II. SECTION-BY-SECTION ANALYSIS 

TITLE I—TANF 

SECTION 101—STATE PLANS AND PERFORMANCE

State Plans 

CURRENT LAW

To receive block grant funds, a state must have submitted a 

TANF plan within the 27-month period that ends with the close of 

the 1st quarter of the fiscal year. This plan must include an outline 

of the program the state intends to operate to provide assistance 

to needy families; provide job preparation, work, and support services to enable them to leave the program; and describe how the 

state will ensure that parents and caretakers receiving assistance 

engage in work activities (within 24 months of receiving assistance, 

or earlier at state option). The plan must describe whether the 

state intends to treat families migrating from another state differently from others (and, if so, how) and whether it intends to provide assistance to non-citizens (and, if so, to provide an overview 

of aid). It also must establish goals to reduce the rate of out-of-wedlock pregnancies, with special emphasis on teenage pregnancies, 

and establish numerical goals for reducing the illegitimacy ratio of 

the state. The plan must describe how the state will provide education and training on statutory rape to the law enforcement and 

educational systems, and it must include a number of certifications 

(for example, equitable access to Indians and establishment and enforcement of standards against program fraud and abuse). States 

have the option of including a certification regarding the treatment 

of individuals with a history of domestic violence. 

COMMITTEE BILL

The Committee Bill requires states to establish and provide in 

their state plans specific measurable performance objectives for 

pursuing TANF purposes. They are to describe the methodology the 

state will use to measure performance in programs funded by 

TANF and maintenance of effort (MOE) dollars in relation to each 

objective. In developing the performance measures, states are to 

consider the criteria used by the Secretary of Health and Human 

Services (HHS) in establishing performance measures for the emVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
9

ployment achievement bonus (workforce attachment and advancement) and with such other criteria related to other (non-work) purposes of the program. The Secretary is to develop performance 

measures related to the non-work purposes of TANF in consultation with the National Governor’s Association, the National Conference of State Legislatures, and the American Public Human 

Services Association. 

The Committee Bill specifies that the plan must describe any 

strategies and programs that the state plans to use concerning employment retention and advancement; reduction of teen pregnancy; 

services for struggling and noncompliant families, and for clients 

with special problems; program integration, including provision of 

services through the One-Stop delivery system under WIA; and if 

the state is undertaking any strategies or programs to engage faith 

based organizations in the delivery of services funded under this 

part or that relate to section 104 of the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996, the document should 

describe such strategies and programs. It requires state plans to 

describe how the state intends to encourage equitable treatment of 

healthy, married, two-parent families under TANF. 

The Committee Bill also adds to the state plan additional descriptive information about state programs. It requires states to describe in their plans financial and nonfinancial eligibility rules for 

assistance (including income eligibility thresholds, treatment of 

earnings, asset eligibility rules, and excluded forms of income), the 

amount of assistance, and applicable time limits on providing assistance (including exemption and extension policies). It requires 

state plans to set forth the criteria for counting care of a disabled 

family member as a work activity. Section 109 of this Committee 

Bill makes caring for a disabled family member a work activity 

under specified conditions. The Committee Bill requires states to 

describe how they will inform ‘‘child-only’’ families (families without an adult recipient) receiving assistance of the work supports 

and other assistance for which the family may be eligible. It deletes 

the requirement to indicate whether the state intends to treat incoming families differently from residents (found unconstitutional) 

and drops the rule that community service be required from adults 

who fail to work after two months of aid, unless the governor opts 

out. 

The Committee Bill directs the Secretary to develop a proposed 

Standard State Plan Form for use by states nine months from enactment and requires states, by October 1, 2006 to submit their 

plans on the standard form. It requires states to make available to 

the public through an appropriate State-maintained Internet 

website and through other means that the state deems appropriate 

several documents: the proposed state plan (with at least 45 days 

for comment), comments received concerning the plan (or, at the 

state’s discretion, a summary of the comments), and proposed 

amendments to the plan. It also requires that state plans in effect 

for any fiscal year be available to the public by the means listed 

above. States required to renew their state plans between the date 

of enactment and October 1, 2006 may wait until October 1, 2006 

to submit their new plans in the Standard Form. 

The Committee Bill adds a requirement that tribal governments 

be consulted about the TANF plan and its service design. It also 

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adds a requirement that states that provide transportation aid 

under TANF certify that state and local transportation agencies 

have been consulted in the development of the TANF state plan. 

Sections 107, 109, 110, and 113 of the Committee Bill contain 

other state TANF plan provisions. Section 107 requires a state that 

takes the option to establish an undergraduate post-secondary or 

vocational education program to describe, in an addendum to the 

TANF state plan, eligibility criteria that will restrict enrollment in 

the program to persons whose past earnings indicate they cannot 

qualify for employment that will make them self-sufficient and 

who, by enrolling, will be prepared for higher paying occupations 

in demand in the state. Section 109 permits a state, if it includes 

in its TANF plan a description of policies for areas of Indian country with high joblessness, to define countable work activities for 

persons complying with individual responsibility plans and living 

in these areas. Section 110 requires state plans to outline how the 

state intends to require parent or caretaker recipients to engage in 

work or alternative self-sufficiency activities, as defined by the 

state, and to require recipient families to engage in activities in accordance with family self-sufficiency plans. It further requires a 

state plan addendum if the state opts to receive work participation 

rate credit for an individual whose family self sufficiency plan 

specifies a need for ongoing, rehabilitative activities. Section 113 

has provisions to increase the coordination and consultation between states and tribes in developing TANF plans. 

REASON FOR CHANGE

The Committee Bill includes provisions to clarify what states are 

doing to move welfare clients into self sufficiency and to make the 

plans more meaningful. The Committee Bill would require states 

to establish performance objectives and encourage an ongoing review of these objectives while maintaining state flexibility. 

Annual Ranking of States’ Performance 

CURRENT LAW

The Secretary of HHS is required to annually rank states on the 

success of their welfare to work programs. The ranking considers 

state performance on placing recipients into long-term private sector jobs; reducing the overall welfare caseload; and, when a practical method for calculating information becomes available, diverting individuals from formally applying for and receiving assistance. 

In this ranking, the Secretary is to take into account the average 

number of poor children in the state. 

COMMITTEE BILL

The Committee Bill requires the Secretary, in consultation with 

states, to develop uniform performance measures designed to 

evaluate TANF- and MOE-funded state programs. It modifies the 

criteria for the Secretary’s annual ranking of the success of states’ 

welfare-to-work programs to include placement of assistance recipients in unsubsidized employment, success of recipients in retaining 

employment and increase in wages, and the degree to which recipients have workplace attachment and advancement. It requires the 

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Secretary’s ranking to consider the number of poor children and 

child poverty rate in each state. 

REASON FOR CHANGE

The Committee Bill updates the factors used in the annual ranking of states on the success of their programs. 

SECTION 102—FAMILY ASSISTANCE GRANTS

CURRENT LAW

The law appropriated $16.5 billion annually for family assistance 

grants to the states and the District of Columbia (D.C.) for FYs 

1997–2002. It also appropriated $77.9 million annually for family 

assistance grants to the territories (and, within overall ceilings, 

such sums as needed for matching grants to the territories). Family 

assistance grants have been extended at FY2002 funding levels 

through March 31, 2005 by a series of temporary extensions. Basic 

state grants are based on federal expenditures for TANF’s predecessor programs during FY1992 through FY1995. 

COMMITTEE BILL

The Committee Bill appropriates family assistance grants, at 

current levels, for the states, the District of Columbia, and the territories for fiscal years 2006 through 2010. The Committee Bill also 

appropriates matching grants for the territories for fiscal years 

2006 through 2010. 

REASON FOR CHANGE

(No change) 

SECTION 103—PROMOTION OF FAMILY FORMATION AND HEALTHY

MARRIAGE

CURRENT LAW

The purposes of TANF include encouraging the formation and 

maintenance of two-parent families, ending the dependence of 

needy parents on government benefits by promoting . . . marriage, 

and reducing the incidence of out-of-wedlock pregnancies. The law 

established a bonus (up to $100 million annually) for 5 jurisdictions 

with the greatest percentage decease in nonmarital birth ratios and 

a decline from 1995 levels in abortion rates. 

COMMITTEE BILL

The Committee Bill repeals the bonus for reduction of the illegitimacy ratio. It appropriates $100 million a year for five years (FYs 

2006–2010) for competitive grants (50 percent matching rate) to 

states, Indian tribes, and tribal organizations to develop and implement innovative programs to promote and support healthy, married, two-parent families and to encourage responsible fatherhood. 

Grant and matching funds must be used to support any of the following: public advertising campaigns on the value of marriage and 

the skills needed to increase marital stability and health; education 

in high schools on the importance of healthy marriages and characteristics of other healthy relationships experienced throughout life, 

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including the importance of grounding relationships in mutual respect; voluntary marriage education, marriage skills, and relationship skills programs, which may include parenting skills, financial 

management, conflict resolution, and job and career advancement, 

for non-married expectant and recent mothers and fathers; voluntary pre-marital education and marriage skills training for engaged couples and for couples or persons interested in marriage; 

voluntary marriage enhancement and marriage skills training programs for married couples; voluntary divorce reduction programs 

that teach relationship skills; voluntary marriage mentoring programs which use married couples as role models and mentors; and 

programs to reduce the marriage disincentive in means-tested aid 

programs, if offered in conjunction with any activity described 

above. The Committee Bill exempts marriage promotion grants 

from the general rules governing use of TANF funds (Section 404 

of the Social Security Act), but not from the percentage cap on administrative costs. To be eligible for a grant, applicants must consult with domestic violence organizations that have demonstrated 

expertise working with survivors of domestic violence in developing 

policies, procedures, programs and training necessary to appropriately address domestic violence in families served by programs 

and activities funded through the grant; describe in their applications how their proposed programs or activities will deal with 

issues of domestic violence; establish protocols for helping identify 

instances or risks of domestic violence and specify procedures for 

making service referrals and providing protections and appropriate 

assistance; and what they will do, to the extent relevant, to ensure

that participation in the programs is voluntary and to inform potential participants that participation is voluntary. 

The Committee Bill requires the Secretary of HHS to submit a 

biannual report to Congress, providing a detailed description of the 

programs and activities funded by the grants and how they address 

domestic violence. 

The Committee Bill requires each State, tribe, or tribal organization that carries out marriage promotion activities to provide the 

Secretary of HHS with an assurance that TANF assistance recipients who elect to participate in these activities are informed that 

participation is voluntary; that the recipient may disenroll from 

such programs or activities; and that there be a process that provides recipients who withdraw from or fail to participate in marriage promotion activities to be reassigned to other activities. There 

is no sanction for failure to participate in marriage promotion activities. The state may reassign TANF recipients at any time to 

other activities in accordance with universal engagement requirements (See Section 110). 

The Committee Bill provides that marriage promotion funds appropriated for each of fiscal years 2006 through 2010 shall remain 

available to the Secretary until spent. The Committee Bill provides 

that TANF funds can be used as all or part of the required state 

match for marriage promotion grants, but that these federal funds 

cannot count towards a state’s MOE. The Committee Bill also includes conforming language relative to the fourth purpose of TANF, 

specifying that it is to encourage the formation and maintenance 

of healthy, two-parent married families and to encourage responsible fatherhood. 

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The Committee Bill also authorizes $10 million annually for 

FY2006 through FY2010 for the Secretary of HHS to develop and 

implement programs designed to address domestic violence as a 

barrier to healthy relationships, marriage, and economic security. 

Grants, contracts, and interagency agreements shall provide training for caseworkers administering TANF, technical assistance, the 

provision of voluntary services for victims of domestic violence, and 

activities related to the prevention of domestic violence. Funding 

for these programs may not be diverted from existing domestic violence prevention programs. 

REASON FOR CHANGE

Two of the four original purposes of PRWORA are directly related to ending out-of-wedlock births and encouraging the formation and maintenance of two-parent families. The bonus to reduce 

out of wedlock births was initially developed to enhance these purposes. This bonus has not proven to be an effective mechanism for 

motivating state action. A correlation between state action and a 

reduction in out of wedlock births and family formation has not 

been established. 

The Committee Bill would redirect the funding to address the 

underlying purposes of PRWORA. The Committee Bill would provide optional grants to states to explore innovative and creative approaches to promote healthy family formation activities. The Committee Bill stipulates that participation in these programs is voluntary and that to be eligible for a grant applicants must consult 

with domestic violence organizations that have demonstrated expertise working with survivors of domestic violence in developing 

policies, procedures, programs and training necessary to appropriately address domestic violence in families served by programs 

and activities funded through the grant; describe in their applications how their proposed programs or activities will deal with 

issues of domestic violence; establish protocols for helping identify 

instances or risks of domestic violence and specify procedures for 

making service referrals and providing protections and appropriate 

assistance; and what they will do, to the extent relevant, to ensure 

that participation in the programs is voluntary and to inform potential participants that participation is voluntary. 

The Committee Bill also includes a provision (in Section 114) 

which would redirect a portion of the funds for research and demonstration programs and technical assistance related to healthy 

family formation activities. These funds would be in addition to 

grants to states for healthy family formation activities. Currently, 

there is a 25 year body of research related to work activities and 

welfare. The Committee Bill would encourage a focus on research 

centered on marriage and family assistance so that states can learn 

from rigorous evaluations of activities to promote marriage and 

family formation. 

SECTION 104—SUPPLEMENTAL GRANT FOR POPULATION INCREASES

IN CERTAIN STATES

CURRENT LAW

The law provides supplemental grants for (17) states with exceptionally high population growth during the early 1990s, benefits 

14

lower than 35 percent of the national average, or a combination of 

above-average growth and below-average AFDC benefits. Grants 

were authorized for a total of $800 million over FYs 1998 through 

2001, and annual grants grew from $79 million to $319.5 million 

over this period. Congress froze grants at the fiscal year 2001 level 

when it extended supplemental grants for FYs 2002–2005. 

COMMITTEE BILL

The Committee Bill extends supplemental grants for the 17 

states that currently receive them at their FY 2001 level, for FYs 

2006 through 2009. 

REASON FOR CHANGE

The Committee Bill extends the supplemental grant program for 

certain states. 

SECTION 105—BONUS TO REWARD EMPLOYMENT ACHIEVEMENT

CURRENT LAW

The Secretary of HHS, in consultation with the National Governors Association (NGA) and the American Public Human Services Association (APHSA) was required to develop a formula for 

measuring state performance relative to block grant goals. Awards 

for performance years 1998–2000 were based on work-related 

measures (and were paid to 38 jurisdictions). For later years, nonwork measures—including food stamp and Medicaid coverage of 

low-income families—were added. States can receive a bonus based 

on their absolute score in the current (performance) year and/or 

their improvement from the previous year, but the bonus cannot 

exceed 5 percent of the family assistance grant. $200 million per 

year was available for performance bonuses, for a total of $1 billion 

between FYs 1999 and 2003. Bonuses were awarded in FY2004 

under TANF temporary extension legislation. 

COMMITTEE BILL

The Committee Bill appropriates $450 million for FYs 2006 

through 2011 for bonuses to states that qualify as ‘‘employment 

achievement’’ states by meeting standards to be developed by the 

Secretary in consultation with the states. Bonuses for FY2006 

through FY2008 are to average $50 million per year; bonuses for 

FY2009 through FY2011 are to average $100 million per year. The 

Committee Bill specifies that the employment achievement formula 

is to measure workplace attachment and advancement of assistance recipients and, if the Secretary determines it is possible, those 

diverted from assistance. It caps a state’s bonus at 5 percent of its 

family assistance grant. For FYs 2006 and 2007, the employment 

achievement bonus may be based on three components of the repealed high performance bonus—job entry rate, job retention rate, 

and earnings gain rate. The Committee Bill makes Indian tribes eligible for the bonus, sets aside 2 percent of bonus funds for them, 

and directs the Secretary to consult with tribes in determining criteria for awards to them. 

Section 702 of the Committee Bill eliminates the FY2005 High 

Performance Bonus. 

15

REASON FOR CHANGE

The Committee Bill provides for states to continue their successful efforts to move welfare recipients into good jobs. States have directed considerable resources into moving welfare recipients into 

meaningful employment. The Committee Bill would continue to 

provide incentives for states to focus on employment achievement 

and would continue the policy of rewarding states for doing so. The 

Committee Bill would preserve the concept of the High Performance Bonus focused on employment achievement. 

SECTION 106—CONTINGENCY FUND

CURRENT LAW

The TANF law established a $2 billion contingency fund for 

matching grants at the Medicaid matching rate (which ranges from 

50 percent to 77 percent) to ‘‘needy’’ states that expect during the 

fiscal year to spend under the TANF program (not counting child 

care) 100 percent of their FY1994 level of spending on TANF-predecessor programs (not counting child care). States can access the 

contingency fund by meeting one of two ‘‘needy’’ state triggers: (1) 

an unemployment rate for a 3-month period that is at least 6.5 percent and at least 10 percent higher than the rate for the corresponding period in either of the two preceding calendar years; or 

(2) a food stamp caseload increase of 10 percent over the FY 1994–

1995 level (adjusted for the impact of immigrant and food stamp 

constraints in the 1996 welfare law). Contingency payments for any 

fiscal year are limited to 20 percent of the state’s base grant, and 

a state can draw down no more than 1⁄12 of its maximum annual 

contingency fund amount in a given month. Under a final reconciliation process, a state’s federal match rate (for drawing down contingency funds) is reduced if it received funds for fewer than 12 

months in any year. 

COMMITTEE BILL

The Committee Bill appropriates such sums as are needed for 

contingency fund grants, up to $2 billion over 5 years, FYs 2006–

2010. It eliminates the requirement that states spend 100 percent 

of their historic level to qualify for contingency funds (instead applying the TANF MOE, 75 percent-80 percent). It entitles states to 

a contingency fund grant reflecting costs of TANF caseloads when 

they are ‘‘needy’’ under a revised definition. To trigger as needy: (a) 

a state must have an increase of 5 percent in the monthly average 

unduplicated number of families receiving assistance under its 

TANF program in the most recently concluded 3-month period with 

data, compared with the corresponding period in either of the two 

most recent preceding fiscal years; (b) the TANF caseload increase 

must be due, in large measure, to economic conditions rather than 

state policy changes, and (c) for the most recent three-month period 

with data, the average rate of seasonally adjusted total unemployment must be at least 1.5 percentage points or 50 percent higher 

than in the corresponding period in either of the two most recent 

preceding fiscal years; or, for the most recent 13 weeks with data, 

the average rate of insured unemployment must be at least 1 percentage point higher than in the corresponding period in either of 

16

the two most recent fiscal years; or, for the most recently concluded 

3-months with national data, the monthly average number of food 

stamp recipient households, as of the last day of each month, exceeds by at least 15 percent the corresponding caseload number in 

the comparable period in either of the two most recent preceding 

fiscal years, provided the HHS Secretary and the Secretary of Agriculture agree that the increased caseload was due, in large measure, to economic conditions rather than to policy change. The Committee Bill provides that a state that initially qualifies as needy because of its TANF caseload plus its food stamp caseload shall continue to be considered needy as long as the state meets the original 

qualifying conditions. A state that initially qualifies as needy because of its TANF caseload plus its total or insured unemployment 

rate shall not trigger off until its rate falls below the original qualifying level. 

The contingency fund grant is based on the maximum cash benefit level for a family of 3 persons (if the state has more than one 

maximum cash benefit level, the grant is based on the maximum 

benefit for the largest number of 3-person families) and is payable 

for TANF caseload increases above 5 percent. The grant equals the 

state’s federal Medicaid matching rate times the benefit cost of an 

increase in the TANF family caseload above 5 percent in the most 

recently concluded 3-month period with data, compared with the 

corresponding period in either of the two most recent preceding fiscal years. A state’s total contingency grant cannot exceed 10 percent of its family assistance grant. To receive a contingency fund 

grant, a state must have spent 70 percent of its TANF grants (excluding welfare-to-work funds from the Department of Labor). Unexpended balances are the total amount of TANF grants not yet 

spent by the state as of the end of the preceding fiscal year minus 

current year expenditures through the end of the most recent quarter that exceed the pro rata share of the current fiscal year TANF 

grant. The Committee Bill repeals the fiscal penalty for failure of 

a state that receives contingency funds to maintain 100 percent of 

its historic spending level (MOE), but provides that a state shall 

not be eligible for a contingency fund grant unless its MOE spending equals 75 percent (80 percent, if it fails work participation 

rates). 

The Committee Bill also sets aside $25 million from the contingency fund for payment to tribes with approved tribal family assistance plans operating during periods of economic hardship. The Secretary of HHS, in consultation with the tribes, is required to develop the criteria for access by tribes to the fund. 

REASON FOR CHANGE

Because of a ‘‘super’’ MOE provision in PRWORA, states have 

been unable to access contingency funds in the manner in which 

they were intended in times of economic downturn. The Committee 

Bill would liberalize the contingency fund so that states are better 

able to draw down those dollars. 

17

SECTION 107—USE OF FUNDS

CARRYOVER FUNDS

CURRENT LAW

The law permits states or tribes to use TANF funds received for 

any fiscal year for ‘‘assistance’’ in any later year, without fiscal 

year limitation. Regulations define assistance as ongoing aid for 

basic needs, plus supportive services such as child care and transportation for families who are not employed. 

COMMITTEE BILL

The Committee Bill permits carryover of TANF funds granted to 

the state or tribe for any fiscal year to provide any benefit or service under the state or tribal TANF program without fiscal year limitation. The Committee Bill also allows a state or tribe to designate 

a portion of the TANF grant as a contingency reserve, which may 

be used without fiscal year limitation, to provide any benefit or 

service. If the state or tribe designates reserve funds, it must include the amount in its annual report. Additionally, the Committee 

Bill would permit states to designate an amount of unused dollars 

in a contingency reserve fund. Section 117 of the Committee Bill 

revises the definition of assistance. 

REASON FOR CHANGE

Currently, carry over funds can be spent only on cash assistance. 

The Committee Bill would allow carry over funds to be spent on 

any activity authorized under PRWORA, including child care. This 

provides additional flexibility for the states. Permitting states to 

designate unused funds as a contingency reserve clarifies that, 

while unspent, these funds have been earmarked for purposes associated with the legislation. 

Social Services Block Grant Transfers 

CURRENT LAW

The original 1996 welfare reform law provided that states could 

transfer up to 10 percent of their TANF grants to the Social Services Block Grant (Title XX). P.L. 105–178 (Transportation Equity 

Act for the 21st Century) reduced funding for the Social Services 

Block Grant and called for the transfer authority from TANF to 

SSBG to be reduced to 4.25 percent of the block grant, effective 

FY2001. However, annual appropriation bills through FY2005 have 

superceded, maintaining the 10 percent transfer limit for each 

year. 

COMMITTEE BILL

The Committee Bill restores the transferability of TANF funds to 

SSBG to 10 percent. 

REASON FOR CHANGE

This increases state flexibility for assisting low-income families. 

18

Social Services Block Grant 

CURRENT LAW

The current funding level for the Social Services Block Grant 

(Title XX) is $1.7 billion per year. 

COMMITTEE BILL

The Committee Bill increases funding for the Social Services 

Block Grant by $1 billion over the 5-year period, to $1.9 billion per 

year for FY2006 through FY2010. Funding will revert to $1.7 billion per year in FY2011. 

REASON FOR CHANGE

The Committee intends for states to refocus their efforts to move 

adult recipients from welfare to work and intends for states to use 

their TANF block grant for those purposes. The Committee finds 

that Title XX funds support needed services for children and families in crisis. SSBG funds are used to support a number of child 

welfare programs including, child protective services, children’s foster care and prevention and intervention services. These are services that a number of states are currently funding through their 

TANF block grants. The Committee bill would provide an increase 

of funding for SSBG so that states do not have curtail their efforts 

to improve child welfare, as they redirect their TANF funds to provide services to move adults into meaningful employment. 

Post-Secondary Education Option (‘‘Parents as Scholars’’) 

CURRENT LAW

TANF permits states to use TANF funds in ‘‘any manner reasonably calculated’’ to achieve the goals of TANF, including reducing 

ending the dependence of needy parents through job preparation. 

Post-secondary education is an allowable use of TANF funds, 

though participation in such education is generally limited to vocational education countable for only up to 12 months. 

COMMITTEE BILL

The Committee Bill permits states to use TANF and MOE funds 

to establish an undergraduate 2- or 4-year degree postsecondary 

education or vocational educational program for students in families receiving TANF assistance, who formerly received assistance, 

or needy parents who are eligible for TANF services. The program 

may provide the following services: child care, transportation, payment for books and supplies, and other services provided by the 

state to ensure coordination and lack of duplication. 

The Committee Bill requires states that opt to run a postsecondary education program to file an addendum with their TANF 

state plan with the applicable eligibility requirements of the program. Eligibility requirements must be designed to limit the program to individuals whose past earnings indicate that they cannot 

qualify for employment that pays enough to allow them to obtain 

self-sufficiency (as defined by the state) and for whom enrollment 

in the program will prepare individuals for higher paying occupations in demand in the state. 

19

The Committee Bill would permit states to count the participation of TANF assistance recipients in the post-secondary program, 

with participation capped at 10 percent of a state’s TANF caseload. 

There are two options for counting hours of participation for students in the post-secondary education program. Under the first option, total hours would be the sum of those in the priority activities 

in current law; in work-study, practicums, internships, clinical 

placement, laboratory or field work, or other activities that would 

enhance employability in the recipient’s field of study; and study 

time. These hours would be counted toward the participation 

standards (e.g. the 34-hour requirement), and the state would be 

given either full (maximum counted as 1 family) or partial credit 

for that family’s participation. Under the second option, a student’s 

family would be counted as a fully participating (one family) if, in 

addition to complying with the full-time educational participation 

requirement of the program, the student is participating in TANF 

priority work activities and work study, practicums, etc. for at least 

the following number of hours: 6 hours in the first year, 8 hours 

in the second year, 10 hours in the third year, and 12 hours in the 

fourth and later years. 

The rules for this program apply only for states that opt to operate it and only for students participating in the program. These 

rules do not limit the discretion states otherwise have under TANF 

to support postsecondary or vocational education for needy parents. 

REASON FOR CHANGE

The Committee Bill permits a subset of recipients to benefit from 

a postsecondary education strategy while maintaining an overall 

work orientation. The option is modeled on a Maine program 

known as ‘‘Parents as Scholars.’’ 

SECTION 108—REPEAL OF FEDERAL LOAN FOR STATE WELFARE

PROGRAMS

CURRENT LAW

The law provides a $1.7 billion revolving and interest-bearing 

federal loan fund for state TANF programs. 

COMMITTEE BILL

The Committee Bill repeals the loan fund. 

REASON FOR CHANGE

The fund did not function effectively. 

SECTION 109—WORK PARTICIPATION REQUIREMENTS

Participation standards 

CURRENT LAW

States must have a specified percentage of their adult recipients 

engaged in creditable work activities. Since FY 2002 the participation standard has been 50 percent for all families (and since FY 

1999 it has been 90 percent for the two-parent component of the 

caseload). Participation standards are reduced by a caseload reduction credit (below). In tribal family assistance programs, work parVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00023 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
20

ticipation standards are set by the HHS Secretary, with the tribe’s 

participation.

COMMITTEE BILL

The Committee Bill increases the all-family standard from the 

current 50 percent level to the following levels: FY 2007, 55 percent; FY 2008, 60 percent; FY 2009, 65 percent; and FY 2010 and 

thereafter, 70 percent. The Committee Bill eliminates the separate 

rate for two parent families. The Committee Bill also forgives penalties for states’ failure to meet the two-parent work requirement 

in FY2002 through FY2004. 

REASON FOR CHANGE

PRWORA included a credit states could take for purposes of establishing their work participation rate based on a state’s caseload 

reduction. Because caseloads have fallen so dramatically, the effect 

of the caseload reduction credit has been to diminish states’ work 

participation rates. The Committee Bill increases work participation requirements to move towards universal engagement policies 

under which states actively engage all welfare recipients in moving 

towards self sufficiency. 

Calculation of participation rates 

CURRENT LAW

A state’s monthly participation rate, expressed as a percentage, 

equals (a) the number of all recipient families in which an individual is engaged in work activities for the month, divided by (b) 

the number of recipient families with a recipient who is an adult 

or minor head of household, but excluding families subject that 

month to a penalty for work refusal (provided they have not been 

penalized for more than 3 months), single-parent families with children under 1 (limited to 12 months in a lifetime) and, at state option, families in tribal family assistance programs. 

COMMITTEE BILL

The Committee Bill permits a state to exclude all families from 

work participation calculations during their first month of TANF 

assistance and to exclude families with a child under age 1 (subject 

to a 12 month in a lifetime limit) from work requirements and calculations of work participation rates on a case-by-case basis. 

REASON FOR CHANGE

The initial assessment and development of a family self sufficiency plan may take some time, during which the family may not 

be participating in countable activities. In addition, the Committee 

Bill would ensure that states receive credit for families with young 

children who are engaged in countable activities. 

Caseload reduction credit 

CURRENT LAW

For each percent decline in the caseload from the FY 1995 level 

(not attributable to policy changes), the work participation standVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00024 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
21

ard is lowered by 1 percentage point. (In FY 2003, caseload reduction credits cut required work rates of 20 states to zero.) 

COMMITTEE BILL

The Committee Bill replaces the current caseload reduction credit with an employment credit. In a separate provision, it places the 

same limits on the extent to which any employment, caseload reduction, or other credit could reduce a state’s required participation 

rate. Under these limitations, credits could not exceed 40 percentage points for fiscal year 2006; 35 percentage points for fiscal year 

2007; 30 percentage points for fiscal year 2008; 25 percentage 

points for fiscal year 2009; and 20 percentage points for fiscal year 

2010 or thereafter. 

REASON FOR CHANGE

PRWORA included a credit states could take for purposes of establishing their work participation rate based on a state’s caseload 

reduction. Because caseloads have fallen so dramatically, the effect 

of the caseload reduction credit has been to diminish states’ work 

participation rates. The cap on the employment credit ensures that 

while policy priorities relative to encouraging states to work to 

move clients into good paying jobs are achieved, participation rates 

are not undermined by the credit. 

Employment credit 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill establishes a percentage point credit against 

the work participation standard (subject to the limits described immediately below). Essentially, the credit equals the percentage of 

TANF families who leave ongoing cash assistance with a job. It is 

calculated by dividing (a) twice the quarterly average unduplicated 

number of families (excluding child-only families) that received 

TANF assistance during the preceding fiscal year but who ceased 

to receive TANF—and did not receive cash assistance from a separate state-funded program—for at least two consecutive months following case closure during the applicable period (most recent 4 

quarters with data) and were employed during the calendar quarter immediately after leaving TANF by (b) the average monthly 

number of families (again excluding child-only families) who received cash payments under TANF during the preceding fiscal 

year. At state option, calculations could include in the numerator: 

(1) twice the quarterly average number of families that received 

non-recurring short term benefits rather than ongoing cash and 

who earned at least $1,000 in the quarter after receiving the benefit, and (2) twice the quarterly average number of working families (earned at least $1,000 in the quarter) that included an adult 

who received TANF-funded substantial child care or transportation 

assistance. TANF-funded child care includes child care funded 

through transfers from TANF to the Child Care and Development 

Block Grant (CCDBG). If both these options were taken, the denominator would be increased by twice the number of families that 

22

received non-recurring short-term benefits during the year and by 

twice the quarterly average number of families with an adult who 

received substantial child care or transportation assistance. In consultation with directors of state TANF programs, the Secretary is 

to define substantial child care or transportation assistance, specifying a threshold for each type of aid a dollar value or a time duration. The definition is to take account of large one-time transition 

payments.

Extra credit—as 1.5 families—would be given to a family whose 

earnings during the preceding fiscal year equaled at least 33 percent of the state’s average wage. 

Employment credits or caseload reduction credits or a combination of the two could not exceed 40 percentage points for fiscal year 

2006; 35 percentage points for fiscal year 2007; 30 percentage 

points for fiscal year 2008; 25 percentage points for fiscal year 

2009; and 20 percentage points for fiscal year 2010 or thereafter. 

(As a result, credits could not cut effective work participation rates 

below these floors: 10 percent for fiscal year 2006, 20 percent for 

fiscal year 2007; 30 percent for fiscal year 2008; 40 percent for fiscal year 2009, and 50 percent for fiscal year 2010 and thereafter.) 

The Committee Bill requires the Secretary to issue regulations to 

implement the employment credit. It also requires the HHS Secretary to use information in the National Directory of New Hires 

to calculate state employment credits. If the TANF leaver’s employer is not required to report new hires, the Secretary must use 

quarterly wage information submitted by the state. To calculate 

employment credits for families who received non-recurring short 

term benefits and for those who received substantial child care and 

transportation assistance, the Secretary is to use other required 

data. The Committee Bill requires the Secretary by August 31 each 

year to determine—and to notify each state of—the amount of the 

employment credit that will be used in calculating participation 

rates for the immediately succeeding fiscal year. 

States would continue to receive the current law caseload reduction credit through FY2007 (subject to the cap, described above). In 

FY2008, states would be given the option to either take the employment credit or have their participation standard reduced by a 

credit based 1⁄2 on the current law caseload reduction credit and 1⁄2

based on the employment credit. The employment credit would 

apply to all states beginning in FY2009. 

‘‘The Senator Blanche L. Lincoln Employment Credit Study.’’ The 

Committee Bill also provides that the Secretary of HHS will report 

to the Senate Finance and House Ways and Means Committees 

findings from a study, known as ‘‘The Senator Blanche L. Lincoln 

Employment Credit Study’’ examining the policy implications of 

modifying the design of the employment credit. ‘‘The Senator 

Blanche L. Lincoln Employment Credit Study’’ will include a discussion of the implications of crediting the states for families receiving TANF-funded work supports (child care and transportation 

aid), crediting families diverted from the rolls who become employed, and potential different thresholds for the ‘‘good jobs’’ bonus. 

‘‘The Senator Blanche L. Lincoln Employment Credit Study’’ is due 

July, 2009. 

23

REASON FOR CHANGE

The current caseload reduction credit contains a flawed incentive 

under which a state may receive credit toward the work participation requirements for families who leave assistance but do not become employed. The Committee Bill substitutes an employment 

credit for families that leave assistance for gainful employment. 

Work activities 

CURRENT LAW

The law lists 12 activities that can be credited toward meeting 

participation standards. Nine activities have priority status: unsubsidized jobs, subsidized private jobs, subsidized public jobs, work 

experience, on-the-job training; job search (6 weeks usual maximum, with no more than 4 consecutive weeks), community service, 

vocational educational training (12 month limit), and providing 

child care for TANF recipients in community service. Three nonpriority activities are countable: job skills training directly related 

to employment; and (for high-school dropouts only) education directly related to work and completion of secondary school. The 6–

week time limit on countable job search is doubled during high unemployment. No more than 30% of persons credited with work may 

consist of persons engaged in vocational educational training and 

teen parents without high school diplomas who are deemed to be 

engaged in work through education. In tribal family assistance programs, work activities are set by the HHS Secretary, with the 

tribe’s participation. 

COMMITTEE BILL

The Committee Bill lists 20 activities that can be credited toward 

meeting participation standards. It retains the 12 work activities 

in current law, with the 9 priority activities considered ‘‘direct 

work’’ activities, adds one new nonpriority activity, and lists seven 

additional ‘‘qualified activities’’ that may be counted under certain 

conditions (see below). The new nonpriority activity (countable 

after the family meets minimum hours requirements in direct work 

activities, see below) is marriage education, training, and conflict 

resolution. The qualified activities are postsecondary education; 

adult literacy programs or activities, including participation in a 

program to increase proficiency in the English language; substance 

abuse counseling or treatment (including drug or alcohol abuse 

counseling or treatment); programs or activities designed to remove 

work barriers, as defined by the state; programs or activities authorized under a waiver approved for any state after August 22, 

1996 (regardless of the expiration date of the waiver); financial literacy training (limited to 5 hours per week); and programs or activities designed to develop parenting skills. The Committee Bill 

deletes the requirement that only four consecutive weeks of job 

search can be counted within the normal 6 week limit. The Committee Bill permits a state to define countable work activities for 

persons complying with a family self sufficiency plan and living in 

areas of Indian country or an Alaskan native village with high ‘‘joblessness.’’ To qualify for this option, the state must include in its 

TANF plan a description of its policies for these areas. 

24

REASON FOR CHANGE

The Committee Bill includes activities proposed to maintain all 

the flexibility of current law and adds new flexibility in countable 

activities. Expanding the list of allowable activities would permit 

states to provide up-front job preparedness for families who need 

specialized services. It would allow states to engage recipients in 

short-term ‘‘barrier removal’’ activities. Many states have such programs and some have done these under waivers. Hours in such activities would now count toward the federal participation standards. 

Required work hours 

CURRENT LAW

Generally, to count toward the all-family rate, participation of 30 

hours (20 hours in priority work activities) is required. For twoparent families the standard is 35 hours (30 in priority work activities), but increases to 55 hours (50 in priority activities) if the family receives federally subsidized child care. Teen parents are 

deemed to meet the weekly hour participation standard by maintaining satisfactory attendance in secondary school (or the equivalent in the month) or by participating in education directly related 

to employment for an average of 20 hours weekly. In tribal family 

assistance programs, required work hours are set by the HHS Secretary, with the tribe’s participation. [Note: except for teen parents, 

single parents with a child under 6, and participants in a tribal 

program with different hour requirements, families must work an 

average of at least 30 hours weekly to be counted as working.] 

COMMITTEE BILL

The Committee Bill adopts a standard work week of 24 hours for 

a single parent with a child under age 6; 34 hours for a single parent with a child over 6; 39 hours for a two-parent family (but 55 

hours for a two-parent family that receives child care. The calculation of weekly work hours is made by dividing monthly hours of 

work by 4. Families meeting the standard are counted as 1.0 family 

in calculating the state’s work participation rate. Extra credit is 

given for work by a single parent family (with or without a preschooler) above 34 hours, and by two-parent families above their 

39- and 55-hour standards. All schedules provide partial credit—

provided sufficient hours are spent in direct work activities—for 

hours below the standard, as follows:

Partial/full/extra work credit 

Single-parent family Two-parent family 

Child under 6 No child under 6 With child care 

.675 of a family .......... 20–23 hours .............. 20–23 hours .............. 26–29 hours .............. 40–44 hours. 

.75 of a family ............ .................................... 24–29 hours .............. 30–34 hours .............. 45–50 hours. 

.875 of a family .......... .................................... 30–33 hours .............. 35–38 hours .............. 51–54 hours. 

1.0 family .................... 24–34 hours .............. 34 hours ..................... 39 hours ..................... 55+ hours. 

1.05 family .................. 35–37 hours .............. 35–37 hours .............. 40–42 hours .............. 56–58 hours. 

1.08 family .................. 38 + hours ................ 38+ hours .................. 43 + hours ................ 59+ hours. 

Generally, to receive any credit for hours at or below 24, a singleparent family must engage for all of these hours in direct work activities—unsubsidized job, subsidized private job, subsidized public 

25

job, work experience, on-the-job training; job search and job readiness assistance, community service, vocational educational training, and providing child care for TANF recipients in community 

service. For work credit, a two-parent family generally must spend 

all hours at or below 34 weekly in direct work activities (50 hours 

if the family receives federally funded child care and has no disabled member). Once a family has reached the work hours threshold in direct work activities, additional hours in unlimited job 

search or vocational educational training or any of the six ‘‘qualified activities’’ would be counted. 

However, for three months in any 24-month period, a state may 

give work credit for any hours spent in one of the six ‘‘qualified activities’’—(1) postsecondary education; (2) adult literacy programs 

or activities, including those to increase proficiency in the English 

language; (3) substance abuse counseling or treatment; (4) programs or activities designed to remove work barriers, as defined by 

the state; (5) programs or activities authorized under a waiver approved for any state after August 22, 1996; and (6) financial literacy training (for up to 5 hours per week). These ‘‘qualified activities’’ may be combined with direct work activities to meet hours requirements. An additional 3 months (within the 24 month period) 

would also be counted for recipients participating in adult literacy 

programs (including programs to increase proficiency in the 

English language) or recipients participating in a service if the recipient is certified by a qualified medical, mental health, or social 

services professional as having a physical or mental disability, substance abuse problem, or other problem that requires a rehabilitative service. 

A parent who provides continuous care for a child or dependent 

with a physical or mental impairment may receive credit as engaged in work under certain conditions. The qualifying conditions 

include: the state must determine that the child or dependent has 

an impairment that requires that he/she have substantial continuous care, that the parent is the only reasonable provider of the 

care, that the recipient is in compliance with her self-sufficiency 

plan. The state must conduct regular periodic evaluations of the recipient’s family and regularly update her self-sufficiency plan. (Section 101 requires state TANF plans to set forth criteria for deeming 

the parent providing care for a disabled child or dependent to be 

meeting all or part of that family’s work requirements.) 

The Committee Bill retains the (30 percent) limitation on persons 

who may be credited with work by virtue of vocational educational 

training (countable toward the direct work hours requirement) or 

(if teen parents) by high school attendance or work directly related 

to education. As discussed above, vocational education done as a 

supplementary activity for families meeting the priority hours 

threshold is not subject to the 30 percent limitation. Teen parents 

who maintain satisfactory secondary school attendance or participate in education directly related to work for an average of 20 

hours weekly are deemed to count as one family. 

REASON FOR CHANGE

The Committee Bill recognizes that the success achieved by 

TANF and Work First programs are a result of a sustained emphasis on adult attachment to the workforce. The Committee Bill atVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00029 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
26

tempts to the build on the success of the past by increasing work 

and reducing the welfare rolls. Successes thus far come primarily 

from experiments and initiatives undertaken at the state level 

under waivers or TANF to move recipients from welfare-to-work. 

The Committee Bill establishes clearly defined goals and benchmarks for hours of participation. 

Under the Committee Bill, states would have flexibility to engage 

single moms with preschoolers at fewer hours than the overall 

‘‘standard’’ and to offset this by engaging others full time. 

The Committee Bill would expand the list of activities that count 

after a recipient has engaged in core work activities for 24 hours—

allowing states to count ‘‘supplemental’’ hours spent in post-secondary education, vocational education beyond 1 year; and other 

education and barrier removal activities. 

It would encourage states to provide post-employment activities, 

particularly education or additional job search, for working recipients to help recipients enhance their job skills and training to advance and leave welfare. 

The Committee Bill provides a ‘‘Tiered Approach’’ to calculating 

hours of work activity counted towards meeting the participation 

rate. 

‘‘Partial credit’’ recognizes that some recipients might not meet 

the full-time standard; for example, persons in unsubsidized employment might be employed part-time or part of the month. 

The Committee Bill recognizes that parents who must engage in 

substantial, continuous care of a disabled child or family member 

are engaged in meaningful activity. States should work with these 

families to monitor their progress and development. 

SECTION 110—UNIVERSAL ENGAGEMENT AND FAMILY SELF SUFFICIENCY PLAN REQUIREMENTS; OTHER PROHIBITIONS AND REQUIREMENTS

Universal Engagement 

CURRENT LAW

State plan must require that a parent or caretaker engage in 

work (as defined by the state) after, at most, 24 months of assistance. (This requirement is not enforced by a specific penalty.) 

COMMITTEE BILL

The Committee Bill deletes the 24-month work trigger provision. 

It requires that state plans outline how they intend to require 

adult or minor heads of households to engage in work or alternative sufficiency activities, as defined by the state—while observing the prohibition against penalizing work refusal by a single parent of a preschool child if she has a demonstrated inability to obtain needed child care for specified reasons. It also requires state 

plans to outline how they intend to require families to engage in 

activities according to their self-sufficiency plans. The Committee 

Bill allows, but does not require, states to develop self-sufficiency 

plans for child-only cases. 

27

REASON FOR CHANGE

By requiring states to outline how they intend to engage in selfsufficiency efforts all TANF families—not just those included in the 

work participation rate—the Committee Bill would promote movement of all families from dependence to self-sufficiency. 

Family Self-Sufficiency Plan Requirements 

CURRENT LAW

Within 30 days, states must make an initial assessment of the 

skills, work experience, and employability of each recipient 18 or 

older or those who have not completed high school. States may, but 

need not, establish an individual responsibility plan for each family. 

COMMITTEE BILL

The Committee Bill requires states to make an initial screening 

and assessment, in a manner they deem appropriate, of the skills, 

work experience, education, work readiness, work barriers and employability of each adult or minor head of household recipient who 

has attained age 18 or who has not completed high school and to 

assess, in a manner they deem appropriate, the work support and 

other assistance and family support services for which families are 

eligible and the well-being of the family’s children and, where appropriate, activities or resources to improve their well being. The 

Committee Bill requires states, in a manner they deem appropriate, to establish a self-sufficiency plan for each family with an 

adult recipient or minor head of household recipient. (States may 

establish self-sufficiency plans describing services only for childonly cases.) Required plan contents: activities designed to assist the 

family to achieve their maximum degree of self-sufficiency; requirement that the recipient participate in activities in accordance with 

the plan; supportive services that the state intends to provide; 

steps to promote child well-being and, when appropriate, adolescent well-being; and information about work support assistance for 

which the family may be eligible (such as food stamps, Medicaid, 

SCRIP, federal or state funded child care—including that provided 

under the Child Care and Development Block Grant and the Social 

Services Block Grant), EITC, low-income home energy assistance, 

WIC, WIA program, and housing assistance). The state must monitor the participation of adults and minor child household heads in 

the self-sufficiency plans and, using methods it determines appropriate, regularly review the family’s progress and revise the plan 

when appropriate. Before imposing a sanction against a family for 

failing to comply with a TANF rule or requirement of the self-sufficiency plan, the state must, to the extent deemed appropriate by 

the state, review the plan and make a good faith effort (defined by 

the state) to consult with the family. 

States must comply with self-sufficiency plan requirement within 

one year after enactment (for families then receiving TANF). For 

families not enrolled on the date of enactment, the deadline for 

self-sufficiency plans is the later of: 60 days after the family first 

receives assistance on the basis of its most recent application, or 

1 year after enactment. The Committee Bill provides that nothing 

28

in the self-sufficiency plan subsection or amendments made shall 

be construed to establish a private right or cause of action against 

a state for failure to comply with the provisions or to limit claims 

that might be available under other federal or state laws. The Government Accountability Office is required to submit a report to the 

Ways and Means and Finance Committees evaluating the implementation of the universal engagement provisions of the bill. 

The Committee Bill adds failure to comply with family self-sufficiency plan requirements to the penalty paragraph regarding failure to comply with minimum participation standards (see above for 

penalty schedule). For fiscal year 2007 and later, it provides that 

the penalty shall be based on the degree of substantial noncompliance. The Secretary must take into account factors such as the 

number or percentage of families for whom a plan is not established in a timely fashion, the duration of delays, whether the failure is isolated and nonrecurring, and the existence of systems to 

ensure establishment and monitoring of plans. The Secretary may 

reduce the penalty if the noncompliance is due to circumstances 

that made the state needy under the contingency fund definition or 

due to extraordinary circumstances such as a natural disaster or 

regional recession. 

REASON FOR CHANGE

The Committee Bill would require states to make families on assistance aware of additional work supports and assistance for 

which they are eligible. The Committee Bill adds a penalty provision to enforce the new requirement that states develop family selfsufficiency plans for recipients, while stipulating that states will 

not be subject to penalty unless they are in substantial noncompliance with the law. 

State Option To Receive Work Credit for Individual With Continuing Need for Rehabilitative Services

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill permits states the option of continuing to 

provide rehabilitative services, if needed, beyond 6 months. To be 

counted as working, recipients must be engaged in additional work 

activities for at least half the time required to count recipients 

without disabilities. Eligible individuals must be determined, using 

a medically acceptable clinical or diagnostic technique, as having a 

disability that impedes the individual’s ability to function in a work 

setting. To be eligible for the state option state agencies must work 

collaboratively in assisting the person with disabilities. 

REASON FOR CHANGE

To provide states with the option to receive work participation 

rate credit for a recipient whose self-sufficiency plan specifies that 

they have a continuing need for rehabilitative services in order to 

engage in direct work activities. 

29

Transitional Compliance for Teen Parents 

CURRENT LAW

The law makes an unmarried teenage parent (under age 18) ineligible for federally funded TANF assistance if she has a minor 

child at least 12 weeks old and no high school diploma unless she 

participates in a high school diploma program (or equivalent) or in 

an alternative educational or training program approved by the 

state. To receive TANF, she also must live with her child in an 

adult-supervised setting (a residence maintained by her parent, 

legal guardian, or other adult relative). If the teen parent has no 

available relative or guardian with whom to live, or if the state determines that the relative’s home might be harmful, the state must 

provide, or assist the teen mother in locating, a second chance 

home, maternity home, or other appropriate adult-supervised living 

arrangement. TANF funds may be used to help operate secondchance homes. 

COMMITTEE BILL

The Committee Bill would allow 60 days for a teen parent to 

comply with these requirements—permitting states to give federally funded TANF for up to 60 days to a teen parent not yet participating in education or training or not yet living in an adult-supervised arrangement. It also would add to allowable living arrangements transitional living youth projects funded under section 

321 of the Runaway and Homeless Youth Act. 

REASON FOR CHANGE

The Committee Bill includes a ‘‘transitional compliance’’ period 

for minor parents, so that income-eligible minor parents who at the 

time of application are having trouble meeting the rules and eligibility conditions related to education and living arrangements (such 

as school dropouts and homeless youth) are brought into the program where they can get the case management they need to meet 

the requirements. 

TANF Time Limit in Areas of Indian Country With High Joblessness 

CURRENT LAW

In applying TANF’s 60-month limit on the use of Federal funds 

for assistance to a family with an adult, the law requires disregard 

of months of assistance provided to adults living in Indian country 

in which at least 50 percent of the adults are unemployed. 

COMMITTEE BILL

For the purposes of TANF’s 60 month time limit, the Committee 

Bill requires disregard of months of assistance received by an adult 

living in Indian country if at least 40 percent of adult recipients 

are jobless. The 40 percent threshold is reduced to 35 percent if the 

adult is in a state that meets the TANF contingency fund ‘‘needy 

state’’ criteria or the tribe meets criteria for access to the contingency fund. 

30

REASON FOR CHANGE

Many areas of Indian Country face substantial challenges to sustainable employment. Further, areas of Indian Country have significant differences with what constitutes work and how much 

work is available. The provision to change the threshold and continue flexibility in applying time limits in Indian Country is intended to better serve the needs of tribes so they can effectively operate tribal TANF programs. 

SECTION 111—PENALTIES AGAINST STATES

Maintenance of Effort Requirement 

CURRENT LAW

To receive a full TANF grant, state spending under all state programs in the previous year on behalf of TANF-eligible families (defined to include those ineligible because of the 5-year time limit or 

the federal ban on benefits to new immigrants) must equal at least 

75 percent of the state’s historic level (sum spent in FY1994 on 

AFDC and related programs). If a state fails work participation requirements, the required spending level rises to 80 percent. State 

expenditures that qualify for maintenance-of-effort credit are cash 

aid, child care, educational activities designed to increase self-sufficiency, job training, and work (but not generally available to nonTANF families) administrative costs (15 percent limit), child support collection passed through to the family without benefit reduction, and any other use of funds reasonably calculated to accomplish a TANF purpose. 

COMMITTEE BILL

The Committee Bill extends the requirement that states maintain their own funding at 75 percent of its historic level (80 percent 

in case of failure to satisfy work standards) to cover FYs 2006 

through 2011. It also specifies that a state’s required MOE percentage for a given year is to be based on its meeting or failing the 

work requirement for the preceding fiscal year. 

REASON FOR CHANGE

By basing the MOE requirement on the state’s work performance 

in the preceding year, the Committee Bill ensures that states know 

the MOE requirement they will need to meet at the start of the 

year. 

States With Work Program Improvement 

CURRENT LAW

States are penalized for failure to meet work participation standards through a reduction in their block grant. States that fail the 

TANF work standards may enter into a corrective compliance plan 

with HHS which outlines how the state will come into compliance 

with the standards. 

31

COMMITTEE BILL

The Committee Bill provides that a state with a corrective compliance plan accepted by the Secretary that also has had a 5 percentage point improvement in its work participation rate from the 

previous year will not be assessed a financial penalty for failure to 

meet TANF work participation standards. 

REASON FOR CHANGE

To ensure that states that are making improvement towards increasing their participation rate are not penalized. 

SECTION 112—DATA COLLECTION AND REPORTING

CURRENT LAW

The law requires states to collect monthly, and report quarterly, 

disaggregated case record information (sample case record information may be used) about families who receive assistance under the 

state TANF program (except for information relating to activities 

carried out with welfare-to-work grants from the Department of 

Labor [DOL]). Required information includes ages of family members, size of family, employment status and earnings of the employed adult, marital status of adults, race and educational level of 

each adult and child, whether the family received subsidized housing, Medicaid, food stamps, or subsidized child care (and if the latter two, the amount). Also required are the number of hours per 

week that an adult participated in specified activities, information 

needed to calculate participation rates, type and amount of assistance received under TANF, unearned income received, and citizenship of family members. 

Quarterly reports also must include the percentage of funds used 

for administrative costs or overhead, the total amount spent on 

programs for needy families, the number of noncustodial parents 

who participated in work activities, and the total amount spent on 

transitional services (with separate accounting for welfare-to-work 

grants). Quarterly reports also must provide the number of families 

and persons who received assistance each month and the total 

value of this assistance (with a breakdown for welfare-to-work 

grants). From a sample of closed cases, the report must provide the 

number of case closures attributed to employment, marriage, time 

limit sanction or state policy. The law requires the Secretary to 

submit annual reports to Congress that include state progress in 

meeting TANF objectives, demographic and financial characteristics of applicants, recipients, and ex-recipients, characteristics of 

each TANF-funded program, and trends in employment and earnings of needy families with children. 

COMMITTEE BILL

The Committee Bill extends quarterly reporting requirements to 

cover families in MOE-funded separate state programs. It requires 

monthly reports from states on the TANF and separate state program caseload and annual reports from states on the characteristics of their state TANF program and their MOE separate state 

programs. Annual state reports must include names of programs, 

their activities and purpose, eligibility criteria, funding sources, 

32

number of beneficiaries, sanction policies, and work requirements, 

if any. The Committee Bill qualifies the use of samples to provide 

disaggregated case record information, permitting the Secretary to 

designate core data elements that must be reported for all families. 

The Committee Bill also changes some of the data elements required in the quarterly reports. It adds the race and educational 

level of each minor parent, deletes the educational level of each 

child, and adds the reason for receipt of assistance for a total of 

more than 60 months. It conforms the reporting of hours in work 

activities to the expanded definition of activities that count toward 

the work participation standards. It also requires information needed to calculate progress toward universal engagement of each family, the date the family first received TANF, whether a self-sufficiency plan is established for the family; the marital status of the 

parents at the birth of each child in the family, and whether paternity has been established for those who were unwed. Quarterly reports must include information on families that became ineligible 

for assistance from TANF- or MOE-funded separate state programs 

during the month, broken down by reason (earnings, changes in 

family composition that result in increased earnings, sanctions, 

time limits, or other specified reasons). The Committee Bill requires the Secretary to prescribe regulations needed to collect data 

and to consult with the NGA, APHSA, and the National Conference 

of State Legislatures (as well as the Secretary of Labor) in defining 

data elements for required reports. The Committee Bill changes the 

requirements for the Secretary’s annual TANF reports to Congress 

by setting July 1 as the deadline, deleting the requirement for information about applicants and requiring that the report include 

information about separate state MOE programs. 

The Committee Bill requires states to report to the Secretary annually, beginning with FY2005, on achievement and improvement 

in TANF and MOE-funded separate state programs during the past 

fiscal year under the state’s performance goals and measures. It 

also requires states to file annual reports on their progress toward 

the achievement of ‘‘universal engagement.’’ 

The Committee Bill also extends CCDBG case-level reporting to 

TANF-funded child care. It requires the Secretary to coordinate reporting so that states are not required to submit duplicate information to meet both TANF and CCDBG reporting and allows the Secretary to permit a state to fulfill reporting requirements with a 

consolidated TANF/CCDBG report on families receiving child care. 

It also allows the Secretary to waive this requirement if the Secretary determines that it would be administratively or financially 

burdensome to a state, but states granted such waivers must post 

data on TANF-funded child care on a web site. The Committee Bill 

provides 2 years for states to comply with this requirement. 

REASON FOR CHANGE

The Committee Bill extends quarterly reporting requirements to 

ensure consistent data reporting and monitoring of all qualified 

state programs. Annual reports on all TANF and MOE programs 

are needed to provide information (e.g., number of beneficiaries) 

that is not otherwise available on non-cash assistance programs. 

Designation of a few core data elements for universal reporting 

would facilitate performance measurement and accountability. 

33

These elements are already submitted by states as part of the High 

Performance Bonus data collection. Data elements that have been 

difficult for the TANF agency to collect and report, or are not used 

to any significant extent, would be dropped to reduce burden on 

state agencies. A few data elements would be added to monitor 

compliance with universal engagement requirements. 

SECTION 113—DIRECT FUNDING AND ADMINISTRATION BY INDIAN

TRIBES

CURRENT LAW

The allows Indian tribes to operate their own tribal family assistance plans. Tribes that opt to operate their own programs receive 

an amount equal to federal pre-TANF payments received by the 

state attributable to Indians for administration of the programs. 

These sums ($115 million in FY2003) are deducted from state 

TANF grants. It also appropriates $7.6 million annually for work 

and training activities (now known as Native Employment Works 

[NEW]) to tribes that operated a pre-TANF work and training program. 

COMMITTEE BILL

The Committee Bill reauthorizes tribal family assistance grants 

for FY2006–FY2010. It reauthorizes and increases funding for the 

NEW work program to $12.6 million annually for FY2006 through 

FY2010. Each NEW program will receive the same percent of the 

$12.6 million appropriation as it received of the $7.6 million appropriation under current law. The Committee Bill also provides that 

if a tribe elects to incorporate its TANF program into a job training, tribal work experience, employment opportunities and skill development demonstration project, it would be subject to the requirements of the Indian Employment, Training, and Related Services Demonstration Act of 1992. 

The Committee Bill establishes tribal improvement grants and 

appropriates $80 million for them to support: 

• Tribal capacity grants for tribal human services infrastructure 

($40 million). The Secretary of HHS shall award grants to Indian 

tribes for improving human services infrastructure, including management information systems, management information system-related training, equipping offices, and renovating (but not constructing) buildings. The Secretary is to give first priority to tribes 

that have applied for approval to run tribal family assistance programs; second priority to tribes that have an approved tribal family 

assistance plan; and third priority for tribes with approved foster 

care and adoption assistance programs (see Title IV). 

• Tribal development grants to provided technical assistance in 

improving reservation economies ($35 million). The Secretary of 

HHS, through the Commissioner of the Administration for Native 

Americans, shall award grants to nonprofit organizations, Indian 

tribes, and tribal organizations to enable grantees to provide technical assistance to tribes and tribal organizations in the following 

areas: the development of uniform commercial codes; creation or 

expansion of small business or microenterprise programs; the development of tort liability codes; creation or expansion of tribal 

marketing efforts; creation or expansion of for-profit collaborative 

34

business networks; development of innovative uses of telecommunications to help with distance learning or telecommuting; and development of economic opportunities in areas of high joblessness (with 

30 percent of the grants awarded in this area). • Technical assistance ($5 million). Of this amount, at least $2.5 

million is for peer-learning programs among tribal administrators; 

and at least $1 million is for making grants to Indian tribes for feasibility studies of their capacity to operate tribal family assistance 

programs. 

The Committee Bill also enhances the information reported by 

HHS on Indians in the TANF annual report; increases requirements for consultation and coordination among states and tribes in 

developing TANF state plans; requires States to describe how they 

will provide equitable access to members of Indian tribes or tribal 

organizations not in a tribal TANF program; and requires a Government Accountability Office (GAO) report on the demographic, 

economic, and health characteristics of Indians who reside in Indian Country, Alaska, or receive assistance under a tribal TANF 

program (due January 1, 2007). Other provisions that affect tribal 

TANF programs include: making tribal organizations eligible for 

the Employment Achievement Bonus (Section 105); giving tribes 

access to the Contingency Fund (Section 106); modification to time 

limit rules for persons living in Indian country or Alaskan Native 

villages with high rates of joblessness (Section 110); setting aside 

$2 million to study Indian welfare programs (Section 114); increasing the tribal set aside for mandatory child care funds to a minimum of 2 percent of the appropriation (Section 116); and providing 

tribes the authority to receive Federal foster care and adoption assistance funds (Section 403).

REASON FOR CHANGE

The 1996 welfare law permitted Indian tribes to operate their 

own welfare programs for the first time. Since 1996, 47 tribal 

TANF plans, serving 232 tribes, have been approved by HHS. 

These tribes and intertribal consortia have taken advantage of the 

flexibility allowed under TANF to design culturally appropriate 

programs to support low-income American Indians. This important 

policy, allowing for tribal administration of programs to tribal citizens, is consistent with the value of tribal sovereignty. Although 

tribes have shown enthusiasm for taking on TANF administration, 

there is more work to be done. Less than 1⁄3 of tribes are served 

by tribal TANF programs, largely due to prohibitive start-up costs 

and insufficient administrative support. Tribes that are administering TANF have had to supplement the funding they receive to 

implement TANF. Moreover, according to the Census Bureau, 25.7 

percent of American Indians live in poverty, more than twice the 

national poverty rate. The average household income for American 

Indians is only 72.9 percent of that of the rest of Americans. 

The Committee Bill contains critical provisions to support tribes 

in setting up and improving tribal TANF programs while exercising 

their sovereignty to adapt their programs to better fit the needs of 

American Indians residing in tribal communities. The Committee 

Bill includes provisions to support economic development and job 

creation in Indian Country, better facilitating opportunities for 

tribal citizens to move from welfare (whether served by state or 

35

tribal programs) to work. Provisions supporting tribal capacity 

building, technical assistance, and infrastructure development for 

tribal human service programs bring much-needed resources to 

tribes operating their own welfare programs. Funding to expand 

job training programs and lock in tribal child care funding at the 

current rate is also included. Another provision allows tribes with 

high joblessness rates the continued flexibility to determine how 

best to approach work requirements and terms of assistance. The 

addition of a GAO study to identify barriers for urban Indians accessing benefits and the new requirements for HHS to collect more 

comprehensive data on receipt of benefits among American Indians 

will contribute to the data needed to address poverty and work 

supports in Indian Country. 

SECTION 114—RESEARCH, EVALUATIONS, AND NATIONAL STUDIES

CURRENT LAW

The 1996 welfare law required the HHS Secretary to conduct research on effects, costs, and benefits of state programs. It provides 

that the Secretary might help states develop innovative approaches 

to employing TANF recipients and increasing the well-being of 

their children and directed the Secretary to evaluate these innovative projects. It appropriates $15 million yearly, half for TANF research and novel approaches cited above and half for the federal 

share of state-initiated TANF studies and the completion and evaluation of pre-TANF waiver projects. (Section 413 of the Social Security Act also requires the Secretary to rank annually the states 

to which family assistance grants are paid, in the order of their 

placing recipients into long-term private sector jobs, reducing the 

overall welfare caseload, and, when a practicable calculation method becomes available, diverting persons from formally applying for 

TANF assistance.) 

COMMITTEE BILL

The Committee Bill appropriates $100 million yearly for FYs 

2005 through 2010, of which 80 percent must be spent-on marriage 

promotion activities (described in the section establishing marriage 

grants). It makes these funds available to the HHS Secretary for 

the purpose of conducting and supporting research and demonstration projects by public or private entities, and providing technical 

assistance to states, Indian tribal organization, and such other 

TANF grantees as the Secretary may specify. It authorizes the Secretary to conduct these studies and demonstrations directly or 

through grants, contracts, or interagency agreements. In addition, 

for 5 years (FYs 2006 through 2010) it extends the current law annual appropriation of $15 million and it designates a 50–50 allocation. 

The Committee Bill establishes a limited demonstration program 

for up to 10 states to enhance or to provide for improved program 

integration coordination and delivery of public assistance. The only 

programs eligible for inclusion in the demonstration are: TANF, the 

Social Services Block Grant, and child care funded from mandatory 

child care funds. States would need to include a plan for evaluation 

to demonstrate the improved effectiveness of programs included. 

The Secretary would need to approve the state’s plan. The folVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00039 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
36

lowing are provisions excluded from waiver authority: civil rights 

or prohibition of discrimination; the purposes or goals of any program; maintenance of effort requirements; health, safety or 

licencing requirements; requirements relating to the use of financial assistance for activities to improve the quality and availability 

of child care; report and audit requirements of the Child Care and 

Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.); requirements of that Act that limit what financial assistance shall be 

expended for; the State plan and State applications requirements 

specified in section 658E of that Act (42 US.C. 9858c); labor standards under the Fair Labor Standards Act of 1938; or environmental 

protection. Additional provisions include: in the case of child care 

assistance funded under section 418 of the Social Security Act (42 

US.C. 618), with respect to the requirement under the first sentence of subsection (b)(1) of that section that funds received by a 

State under that section shall only be used to provide child care assistance; with respect to any requirement that a State pass through 

to a sub-State entity part of all of an amount paid to the State; if 

the waiver would waive any funding restriction or limitation provided in an appropriations Act, or would have the effect of transferring appropriated funds from one appropriations account to another; or, except as otherwise provided by statute, if the waiver 

would waiver any funding restriction applicable to a program authorized under an Act which is not an appropriations Act (but not 

including program requirements such as application procedures, 

performance standards, reporting requirements, or eligibility standards), or would have the effect of transferring funds from a program for which there is direct spending (as defined in section 250 

(c)(8) of the Balanced Budget and Emergency Deficit Control Act of 

1985) to another program. Additionally, The Director of the Office 

of Management and Budget shall establish a procedure for ensuring that not more than 10 states (including any portion of a state) 

conduct a demonstration project. The Committee Bill appropriates $10 million annually for the development of comprehensive indicators of child well-being. The indicators shall include measures related to education; social and 

emotional development; health and safety; and family well-being, 

such as family structure, income, employment, child care arrangements, and family relationships. Among the requirements for the 

indicators is that they be statistically representative at the State 

level, consistent across states, and over-sampled with respect to 

low-income children and families. The Secretary is to consult with 

the Federal Interagency Forum on Child and Family Statistics. It 

also requires the establishment of an advisory panel, appointed by 

the Secretary of HHS; the chairman and ranking members of the 

House Ways and Means and Senate Finance Committees; the 

Chairman of the National Governors Association; the President of 

the National Conference of State Legislatures; and the Director of 

the National Academy of Science. 

The Committee Bill authorizes $20 million for each of the FY 

2006–2010 for Domestic Violence Prevention Grants. The Committee Bill provides that the Secretary of Health and Human Services shall award grants to eligible entities to enable such entities 

to carry out domestic violence prevention activities. These activities 

include: developing and disseminating best practices for addressing 

37

domestic and sexual violence; implementing voluntary skills programs on domestic violence as a barrier to economic security, including providing caseworker training, technical assistance and voluntary services for victims of domestic violence; providing broadbased income support and supplementation strategies that provide 

increased assistance to low-income working adults, such as housing, transportation, and transitional benefits as a means to reduce 

domestic violence, or, carrying out programs to enhance relationship skills and financial management skills, teaching individuals 

how to control aggressive behavior, and to disseminating information on the causes of domestic violence and child abuse. 

The Committee Bill appropriates $2 million for FY2006 to fund 

research on tribal welfare programs and efforts to reduce poverty 

among Indians. 

The Committee Bill requires the Secretary of HHS, in consultation with the Attorney General, to submit a report to Congress on 

the enforcement of affidavits of support and sponsor deeming required by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104–193). The report is due March 31, 

2006. 

REASON FOR CHANGE

Healthy marriages are critically important to the well-being of 

children, a point recognized in the purposes of the original TANF 

law. The TANF program works with families to help them overcome great difficulties and barriers, so they can become stronger 

and self-sufficient. One important way we can help many families 

is to help them build the skills and knowledge that will enable 

them to form and sustain healthy marriages. 

However, there is much that we do not yet know about how 

states and communities can effectively promote healthy marriages. 

The Secretary’s Fund for Research Demonstrations and Technical 

Assistance serves several purposes. Just as current welfare to work 

programs are built on the foundation of considerable research and 

experience, the ability of states and communities to provide effective assistance to families in the future will depend on a strong 

base of research and examined experience. 

This section would fund research on the operation and impact of 

various promising healthy marriage promotion services and strategies. Funds would also be used to support demonstration projects 

intended to examine how various comprehensive community based 

strategies and programs can help to promote the development and 

strength of healthy marriages. 

Funds would be available for HHS to make technical assistance 

available to program operators, in particular, by helping states, 

tribes and local administrators learn from each other. 

Effective service delivery is often inhibited by poor coordination 

and inefficiencies inherent to providing complementary services 

through different programs. Through these demonstrations, states 

could explore ways to build truly seamless services and improve 

the quality of services for families and enhance child well-being. 

The domestic violence prevention grants can be used to support 

activities to reduce incidence of domestic and sexual violence and 

child abuse. 

38

SECTION 115—STUDY BY THE CENSUS BUREAU

CURRENT LAW

Appropriates $10 million annually to expand the Survey of Income and Program Participation (SIPP) so as to obtain data with 

which to evaluate TANF’s impact on a random national sample of 

recipients and, as appropriate, other low-income working families. 

COMMITTEE BILL

The Committee Bill appropriates $10 million annually for FYs 

2006 through 2010 for the Census Bureau for a new enhancement 

to the SIPP to allow for an assessment of the outcomes of continued welfare reform on the economic and child well-being of low income families with children. 

REASON FOR CHANGE

Reauthorization of TANF provides an opportunity to strengthen 

the SIPP and build upon the Census Bureau’s federal-state partnership, linking state cross-program administrative data and survey data to meet the requirements in the enhanced SIPP to understand how low-income families are faring under TANF. 

SECTION 116—FUNDING FOR CHILD CARE

CURRENT LAW

Current law provides $2.7 billion per year for mandatory child 

care funds. These mandatory funds are combined with discretionary funds under an expanded Child Care and Development 

Block Grant (CCDBG).

COMMITTEE BILL

The Committee Bill included additional child care funding and 

three revenue provisions. According to the Congressional Budget 

Office (‘‘CBO’’), the additional child care funding that was added 

during the Committee’s consideration of the bill scores as an increase in outlays of approximately $4.516 billion over the period of 

2005–2010 and $4.980 billion over the period of 2005–2015 while 

the three revenue provisions produce a net change in the baseline 

of $2.859 billion over the period of 2005–2010 and $5.662 billion 

over the period of 2005–2015. According to the Joint Committee on 

Taxation (‘‘JCT’’), the three revenue provisions are estimated to increase budget receipts by the following amounts over five and ten 

years: (1) a modification to the required Social Security number for 

purposes of the earned income credit ($0 over five and ten years), 

(2) the uniform definition of a qualifying child ($576 million over 

five years and $1.253 billion over ten years), and (3) the availability of the refundable child credit to taxpayers excluding income 

under section 911 of the Internal Revenue Code ($322 million over 

five years and $440 million over ten years), for an estimated total 

increase in budget receipts of $898 million over five years and 

$1.693 billion over ten years. CBO recognizes the modification to 

the earned income credit relating to Social Security Numbers provision produces a net change in the baseline of $1.654 billion over 

the period of 2005–2010 and $3.534 billion over the period of 2005–

39

1Specifically, the 1996 Act permitted the Internal Revenue Service for earned income credit 

purposes to accept all social security numbers issued by the Social Security Administration except those issued pursuant to clause II (or that portion of clause III that relates to clause II) 

of section 205(c)(2)(B)(i) of the Social Security Act, which relates to social security numbers 

issued to applicants for or recipients of benefits from federally financed programs. However, not 

every social security number issued under other provisions of the Social Security Act constitutes 

a valid-for-work social security number. 

2015. Because this item is a technical correction of an earlier legislative action, the budget effect of which has already been taken 

into account in the legislative process, the JCT does not score this 

change. Since this change is an amendment to the Internal Revenue Code, the JCT position controls for purposes of the Budget 

Act. 

A. CLARIFICATION OF EARNED INCOME CREDIT RULE REGARDING

TAXPAYER IDENTIFICATION NUMBERS

(Sec. 116(d) of the bill and sec. 32 of the Code) 

PRESENT LAW

The earned income credit is a refundable tax credit available to 

certain lower-income individuals. Generally, the amount of an individual’s allowable earned income credit is dependent on the individual’s earned income, adjusted gross income, and number of 

qualifying children. Individuals are ineligible for the credit if they 

do not include on their tax return their taxpayer identification 

numbers, along with that of their spouse (if married) and of each 

qualifying child. 

If an individual fails to provide the required taxpayer identification number, then the earned income credit is denied. Such omission is treated as a mathematical and clerical error by the Internal 

Revenue Code, which allows the Internal Revenue Service to use 

certain expedited assessment and collection procedures. 

The rule requiring the inclusion of valid taxpayer identification 

numbers for purposes of the earned income credit was intended to 

deny the credit with respect to individuals not authorized to work 

in the United States. Enacted in the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996 (the ‘‘1996 Act’’), the 

rule was intended to operate by narrowly defining the term ‘‘taxpayer identification number’’ for purposes of the earned income 

credit to include only social security numbers issued by the Social 

Security Administration that permit their recipients to work in the 

United States (‘‘valid-for-work’’ social security numbers). However, 

the provision in the 1996 Act included an incorrect reference to the 

Social Security Act with respect to taxpayer identification numbers.1 As a result, present law permits certain taxpayers to claim 

the earned income credit using taxpayer identification numbers 

that are not valid-for-work social security numbers. 

REASON FOR CHANGE

The Committee seeks to correct the earned income credit rules 

to properly reflect the intent of Congress to allow an earned income 

credit only to individuals authorized to work in the United States.

40

2The credit reverts to $500 in taxable years beginning after December 31, 2010, under the 

sunset provision of the Economic Growth and Tax Relief Reconciliation Act. 

EXPLANATION OF PROVISION

The bill makes a technical correction to revise the cross-reference 

to the Social Security Act in order to limit qualifying taxpayer 

identification numbers to valid-for-work social security numbers. 

EFFECTIVE DATE

The provision is effective for taxable years beginning after the 

date of enactment. 

B. DENY THE REFUNDABLE CHILD CREDIT WHEN SECTION 911 

EXCLUSION IS ELECTED

(Sec. 116(e) of the bill and sec. 24 of the Internal Revenue Code) 

PRESENT LAW

Child credit 

In general 

An individual may claim a $1,000 tax credit for each qualifying 

child under the age of 17.2 In general, a child is a qualifying child 

of a taxpayer for this purpose if the child: (1) has the same principal place of abode as the taxpayer for more than one half the taxable year; (2) has a specified relationship to the taxpayer; and (3) 

has not provided over one-half of his or her own support. A tiebreaking rule applies if more than one taxpayer claims a child as 

a qualifying child. 

The child tax credit is phased-out for individuals with income 

over certain thresholds. Specifically, the otherwise allowable child 

tax credit is reduced by $50 for each $1,000 (or fraction thereof) of 

modified adjusted gross income over $75,000 for single individuals 

or heads of households, $110,000 for married individuals filing joint 

returns, and $55,000 for married individuals filing separate returns. For this purpose, modified adjusted gross income is computed by increasing the individual’s adjusted gross income by the 

amount otherwise excluded from gross income under Internal Revenue Code sections 911, 931, and 933 (relating to the exclusion of 

income of U.S. citizens or residents living abroad; residents of certain U.S. possessions; and residents of Puerto Rico; respectively). 

The length of the phase-out range depends on the number of qualifying children. For example, the phase-out range for a single individual with one qualifying child is between $75,000 and $95,000 of 

modified adjusted gross income. The phase-out range for a single 

individual with two qualifying children is between $75,000 and 

$115,000. 

The amount of the child tax credit and the phase-out ranges are 

not adjusted annually for inflation. 

Refundability 

For 2005, the child credit is refundable to the extent of 15 percent of the taxpayer’s earned income in excess of $11,000 (this 

amount is indexed for inflation). Families with three or more children are allowed a refundable credit for the amount by which the 

41

taxpayer’s social security taxes exceed the taxpayer’s earned income credit, if that amount is greater than the refundable credit 

based on the taxpayer’s earned income in excess of $11,000 (for 

2005). The amount by which the refundable portion of the child 

credit exceeds the taxpayer’s Federal income tax liability is payable 

to the taxpayer as a direct transfer payment. The refundable portion of the child credit does not constitute income and is not treated as resources for purposes of determining eligibility or the 

amount or nature of benefits or assistance under any Federal program or any State or local program financed with Federal funds. 

The definition of ‘‘earned income’’ for purposes of the refundable 

child credit generally follows that for the earned income credit, 

which includes (1) wages, salaries, tips and other employee compensation to the extent includible in gross income, plus (2) net 

earnings from self-employment. Earned income must be taken into 

account in computing taxable income in order to be considered 

earned income for calculating the refundable child credit. 

Earned income credit 

In general 

Low and moderate-income workers may be eligible for the refundable earned income credit (‘‘EIC’’). Eligibility for the EIC is 

based on earned income, adjusted gross income, investment income, 

filing status, and immigration and work status in the United 

States. The amount of the EIC is based on the presence and number of qualifying children in the worker’s family, as well as on adjusted gross income and earned income. 

The earned income credit generally equals a specified percentage 

of earned income up to a maximum dollar amount. Earned income 

that is not included in gross income is not considered earned income for purposes of determining the earned income credit. The 

maximum amount applies over a certain income range and then diminishes to zero over a specified phaseout range. For taxpayers 

with earned income (or adjusted gross income (‘‘AGI’’), if greater) 

in excess of the beginning of the phaseout range, the maximum 

EIC amount is reduced by the phaseout rate multiplied by the 

amount of earned income (or AGI, if greater) in excess of the beginning of the phaseout range. For taxpayers with earned income (or 

AGI, if greater) in excess of the end of the phaseout range, no credit is allowed. 

The EIC is a refundable credit, meaning that if the amount of 

the credit exceeds the taxpayer’s Federal income tax liability, the 

excess is payable to the taxpayer as a direct transfer payment. 

Interaction of EIC and section 911 

An individual electing to exclude foreign earned income under 

the provisions of section 911 of the Internal Revenue Code is not 

eligible for the EIC. 

Foreign earned income and housing cost exclusion (section 911) 

U.S. citizens generally are subject to U.S. income tax on all their 

income, whether derived in the United States or elsewhere. U.S. 

citizens living abroad may be eligible to elect to exclude from their 

income for U.S. tax purposes certain foreign earned income and forVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00045 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
42

eign housing costs, in which case no residual U.S. tax is imposed 

to the extent of such exclusion. 

The maximum exclusion amount for foreign earned income is 

$80,000 per taxable year for 2005–2007. For taxable years beginning after 2007, the maximum foreign earned income exclusion 

amount is indexed for inflation. The amount of the employer-provided housing exclusion is equal to the excess of the taxpayer’s 

‘‘housing expenses’’ over a base housing amount. The term ‘‘housing 

expenses’’ means the reasonable expenses paid or incurred during 

the taxable year with respect to the taxpayer’s housing in the foreign country. In the case of housing costs that are not paid or reimbursed by the taxpayer’s employer, the amount that would be excludible is treated instead as a deduction. The combined foreign 

earned income exclusion and housing cost exclusion may not exceed 

the taxpayer’s total foreign earned income for the taxable year. 

In order to qualify for the exclusions for foreign earned income 

and housing costs, an individual must be either: (1) a U.S. citizen 

who is a bona fide resident of a foreign country for an uninterrupted period that includes an entire taxable year, or (2) a U.S. citizen or resident present overseas for 330 days out of any 12-consecutive-month period. In addition, the taxpayer must have his or 

her tax home in a foreign country. 

REASONS FOR CHANGE

The child credit is generally intended to be refundable only to 

working families of sufficiently low economic income. Under 

present law, however, because refundability is a function of only 

that portion of earned income that is taken into account in computing taxable income, taxpayers working abroad and claiming an 

exclusion under section 911 are generally potentially eligible for a 

refundable child credit only if their income is sufficiently high. For 

example, a married taxpayer with two qualifying children who 

works abroad and earns $100,000, of which $80,000 is excluded 

under section 911, would be eligible for a refundable child credit of 

$1,350. This occurs because after the section 911 exclusion of 

$80,000, the taxpayer’s gross income is only $20,000, $9,000 of 

which exceeds the refundable child credit earned income threshold 

of $11,000 for 2005 (15 percent of $9,000 equals the $1,350 refundable credit). In contrast, a taxpayer with $20,000 less income, or 

$80,000, all of which is excluded under section 911, would not be 

eligible for any refundable child credit because the taxpayer’s gross 

income would be zero after the section 911 exclusion is taken into 

account. Thus, the first taxpayer with more income could receive 

up to a $1,350 transfer payment from the government whereas the 

second taxpayer could not receive any transfer payment at all. 

Under present law, the EIC is denied to taxpayers who claim 

benefits under section 911 of the Internal Revenue Code. In general, this rule ensures that the EIC is granted only to low and moderate income taxpayers, the intended beneficiaries of the EIC. For 

the same reason, refundability of the child credit, which is intended 

to benefit lower-income taxpayers, should not be available to taxpayers who claim benefits under section 911. The committee observes that the Joint Committee on Taxation staff has recommended that taxpayers be ineligible for refundability of the child 

43

3See Joint Committee on Taxation, Options to Improve Tax Compliance and Reform Tax Expenditures (JCS–02–05), January 27, 2005, at 47. 

credit if they claim benefits under section 911 of the Internal Revenue Code.3

EXPLANATION OF PROVISION

The bill denies the refundable portion of the child credit to anyone claiming benefits under section 911 of the Internal Revenue 

Code. 

EFFECTIVE DATE

The provision is effective with respect to taxable years beginning 

after the date of enactment.

C. CLARIFY ELIGIBILITY OF SIBLINGS AND OTHER FAMILY MEMBERS

FOR CHILD RELATED TAX BENEFITS

(Sec. 116(f) of the bill and secs. 24 and 32 of the Code) 

PRESENT LAW

Uniform definition of qualifying child 

In general 

The Working Families Tax Relief Act of 2004 generally established a uniform definition of qualifying child for purposes of the 

dependency exemption, the child credit, the earned income credit, 

the dependent care credit, and head of household filing status. 

Under the uniform definition, in general, a child is a qualifying 

child of a taxpayer if the child satisfies each of three tests: (1) the 

child has the same principal place of abode as the taxpayer for 

more than one half the taxable year; (2) the child has a specified 

relationship to the taxpayer; and (3) the child has not yet attained 

a specified age. A tie-breaking rule applies if more than one taxpayer claims a child as a qualifying child. 

Tie-breaking rules 

If a child would be a qualifying child with respect to more than 

one individual (e.g., a child lives with his or her mother and grandmother in the same residence) and more than one person claims a 

benefit with respect to that child, then the following ‘‘tie-breaking’’ 

rules apply. First, if only one of the individuals claiming the child 

as a qualifying child is the child’s parent, the child is deemed the 

qualifying child of the parent. Second, if both parents claim the 

child and the parents do not file a joint return, then the child is 

deemed a qualifying child first with respect to the parent with 

whom the child resides for the longest period of time, and second 

with respect to the parent with the highest adjusted gross income. 

Third, if the child’s parents do not claim the child, then the child 

is deemed a qualifying child with respect to the claimant with the 

highest adjusted gross income. 

Earned income credit 

The earned income credit is a refundable tax credit available to 

certain lower-income individuals. Generally, the amount of an indiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00047 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
44

vidual’s allowable earned income credit is dependent on the individual’s earned income, adjusted gross income, and the number of 

qualifying children. 

An individual who is a qualifying child of another individual is 

not eligible to claim the earned income credit. Thus, in certain 

cases, a taxpayer caring for a sibling in a home with no parents 

is ineligible to claim the earned income credit based solely on the 

fact that the taxpayer is a qualifying child of the sibling (assuming 

the taxpayer meets the age, relationship and residency tests). 

REASONS FOR CHANGE

Present law provides tax planning opportunities for certain more 

affluent families with respect to the child-related tax benefits while 

denying the earned income credit to certain lower income siblings. 

The committee seeks to limit the tax planning opportunities while 

restoring eligibility for the earned income credit to certain lowerincome siblings. The committee also seeks to make certain technical corrections to the uniform definition of qualifying child. 

As an example of the present-law tax planning opportunities the 

committee seeks to eliminate, where more than one taxpayer within a family can claim a qualifying child for certain tax benefits (e.g. 

in certain multi-generational families), the members of the family 

may arrange to maximize their tax benefits. Thus, if a grandparent, parent, and child share the same household, under present 

law the grandparent and parent can decide which of them should 

claim the qualifying child in order to maximize tax benefits. If the 

parent earns $60,000 a year and the grandparent $20,000, it may 

be more advantageous for the grandparent to claim the qualifying 

child in order to receive the earned income credit, for which the 

parent is ineligible due to his level of earnings. 

Similarly, it may be possible in certain circumstances, and financially advantageous for a family as a whole, for parents to forgo 

claiming a child as a qualifying child so that an older child or other 

family member living at home may claim such child as a qualifying 

child. This would be most advantageous in circumstances in which 

the parents have income above the phaseout limits for the child 

credit or where the older sibling or other family member becomes 

eligible for the earned income credit by claiming the child as a 

qualifying child. The committee seeks to eliminate both of these 

planning opportunities by narrowing the uniform definition of 

qualifying child to limit the ability of a non-parent to claim an individual as a qualifying child when the individual lives with his or 

her parents for over half the year. 

Regarding lower income siblings, present law limits the availability of the earned income credit where two or more siblings meet 

the uniform definition of qualifying child with respect to each 

other. For example, assume that a 20-year-old woman works 30 

hours a week earning minimum wage while attending school full 

time. Her parents are dead, and she lives with her 15-year-old 

brother, for whom she acts as legal guardian. Under these facts, 

while the woman’s younger brother is her qualifying child, she is 

also her younger brother’s qualifying child. Thus, under present 

law, the woman is not eligible for the earned income credit. The 

committee seeks to restore eligibility for the earned income credit 

under this and similar circumstances. 

45

4For these purposes, the term ‘‘siblings’’ includes brothers, sisters, stepbrothers and stepsisters. 

EXPLANATION OF PROVISION

Uniform definition of qualifying child 

Under the bill, if an individual satisfies the qualifying child test 

with respect to one or more parents then generally no other taxpayer may claim the child as a qualifying child. An exception is 

provided if: (1) no eligible parent claims the individual as a qualifying child; and (2) the taxpayer has a higher adjusted gross income than any of the eligible parents.

The bill retains the following present-law tie-breaker rules when 

a child is a qualifying child with respect to more than one individual and more than one individual claims a benefit with respect 

to that child: 

First, if only one of the individuals claiming the child as a qualifying child is the child’s parent, the child is deemed the qualifying 

child of the parent. 

Second, if both parents claim the child and the parents do not 

file a joint return, then the child is deemed a qualifying child first 

with respect to the parent with whom the child resides for the longest period of time, and second with respect to the parent with the 

highest adjusted gross income. 

Earned income credit 

The bill expands eligibility for the earned income credit by modifying the rule that prohibits anyone who is a qualifying child of another individual from claiming the earned income credit. The bill 

provides that, with respect to two or more siblings 4 who are qualifying children with respect to each other, the sibling with the highest adjusted gross income may claim the earned income credit if 

otherwise eligible. 

Technical corrections to the uniform definition of qualifying child 

The bill makes conforming amendments, consistent with those 

enacted with respect to various other provisions, for purposes of 

health savings accounts, the dependent care credit, and the dependent care assistance programs. Under these conforming amendments, an individual may qualify as a dependent for these limited 

purposes without regard to whether the individual has gross income that exceeds an otherwise applicable gross income limitation 

or is married and files a joint return. In addition, such an individual who is treated as a dependent under these conforming 

amendments is not subject to the general rule that a dependent of 

a taxpayer shall be treated as having no dependents for the taxable 

year of such individual beginning in such taxable year. 

EFFECTIVE DATES

The provision generally is effective for taxable years beginning 

after December 31, 2004. The technical corrections to the uniform 

definition of qualifying child are effective as if included in the provisions of the Working Families Tax Relief Act of 2004 to which 

they relate. 

46

REASON FOR CHANGE

The need for additional child care resources to assist families. 

SECTION 117—DEFINITIONS AND GENERAL PROVISIONS

CURRENT LAW

The law does not define the term ‘‘assistance,’’ but regulations 

define it as cash, payments, vouchers, and other forms of benefits 

designed to meet a family’s ongoing basic needs (food, clothing, 

shelter, utilities, household goods, personal care items, and general 

incidental expenses) plus supportive services such as transportation and child care provided to families who are not employed. It 

does not include nonrecurrent, short-term benefits that are not intended to meet recurrent or ongoing needs and will not extend beyond four months. 

COMMITTEE BILL

The Committee Bill places in statute a modified version of the 

current regulatory definition of assistance. The current definition is 

modified to exclude child care and transportation aid for families 

without a worker (making all child care and transportation aid 

‘‘nonassistance’’). 

The Committee Bill also limits to recipients of TANF assistance 

the application of requirements that the state participate in the Income Eligibility and Verification system (IEVS). That is, the state 

need not participate in IEVS for families receiving only TANFfunded benefits and services. 

REASON FOR CHANGE

The Committee Bill affirms the flexibility of states to provide assistance and services to low-income families, including temporarily 

unemployed families, and clarifies that rules tied to state spending 

on ‘‘assistance’’ will not apply to child care and other non-cash 

work support services provided to the unemployed. 

SECTION 118—RESPONSIBLE FATHERHOOD PROGRAM

CURRENT LAW

No provision. 

COMMITTEE BILL

The Responsible Fatherhood Program would be added to the Social Security Act as a new Part C to Title IV. The Committee Bill 

amends Title 1 of P.L. 104–193 which would make the responsible 

fatherhood program subject to the charitable choice provisions. The 

Committee Bill also includes a list of findings with respect to the 

impact of fathers being absent from the home and the purposes of 

a responsible fatherhood program.

The Committee Bill establishes four components for the responsible fatherhood program. It (1) appropriates $20 million for a 

grant program for up to 10 eligible states to conduct demonstration 

programs; (2) appropriates $30 million for grants for eligible entities to conduct demonstration programs; (3) authorizes $5 million 

for a nationally recognized nonprofit fatherhood promotion organiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00050 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
47

zation to develop and promote a responsible fatherhood media campaign; (4) authorizes a $20 million block grant for states to conduct 

responsible fatherhood media campaigns; and (5) authorizes $1 million for a nationally recognized nonprofit research and education 

fatherhood organization to establish a national resource center for 

responsible fatherhood. 

Grants to States To Conduct Demonstration Programs 

The Committee Bill appropriates $20 million per year for the 

HHS Secretary to award grants to up to 10 eligible states to conduct demonstration programs that carry out the purposes described 

below. An eligible state is a state that submits to the Secretary an 

application for a grant, at such time, in such manner, and containing the information required by the Secretary. An eligible state 

must give the Secretary a state plan that describes the types of 

programs or activities that the state will fund under the grant, including a good faith estimate of the number and characteristics of 

clients to be served under the projects and how the state intends 

to achieve at least two of the purposes described below. The state 

plan also must include a description of how the state will coordinate and cooperate with state and local entities responsible for carrying out other programs that relate to the purposes intended to 

be achieved under the demonstration program, including as appropriate, entities responsible for carrying out jobs programs and programs serving children and families. In addition, the state plan 

must include an agreement to maintain such records, submit such 

reports, and cooperate with such reviews and audits as the Secretary finds necessary to provide oversight of the demonstration 

program. 

The Committee Bill requires the chief executive officer of the 

state to certify to the HHS Secretary that the state will use the 

demonstration funds to promote at least two of the purposes described below; the state will return any unused funds to the Secretary; and that the funds provided under the grant will be used 

for programs and activities that target low-income participants and 

that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 

24 months has been, a recipient of assistance or services under a 

state program funded under Title IV–D or Title IV–A, foster care 

(Title IV–E), Medicaid (Title XIX), or food stamps; or parents, including an expectant parent or a married parent, whose income 

(after adjustment for court-ordered child support paid or received) 

does not exceed 150% of the poverty line. In addition, the chief executive officer of the state must certify to the Secretary that programs or activities funded under the demonstration grant will be 

provided with information about the prevention of domestic violence and that the state will consult with representatives of state 

and local domestic violence centers. The state must also certify that 

funds provided to the state for demonstration grants must not be 

used to supplement or supplant other federal, state, or local funds 

that are used to support programs or activities that are related to 

the purposes of the demonstration grants. 

In determining which states to award responsible fatherhood 

demonstration grants, the HHS Secretary must attempt to achieve 

a balance among the eligible states with respect to the size, urban 

48

or rural location, and use of differing or unique methods of the entities that states intend to use to conduct the programs and activities funded by the demonstration grants. The Secretary must give 

priority to eligible states that have demonstrated progress in 

achieving at least one of the stated purposes through previous state 

initiatives or that have demonstrated need with respect to reducing 

the incidence of out-of-wedlock births or absent fathers in the state. 

The Committee Bill stipulates the purposes of the demonstration 

grants are to promote responsible fatherhood through (1) marriage 

promotion (through counseling, mentoring, disseminating information about the advantages of marriage and two-parent involvement 

for children, enhancing relationship skills, teaching how to control 

aggressive behavior, disseminating information on the causes of domestic violence and child abuse, marriage preparation programs, 

premarital counseling, skills-based marriage education, financial 

planning seminars, and divorce education and reduction programs, 

including mediation and counseling); (2) parenting activities 

(through counseling, mentoring, mediation, disseminating information about good parenting practices, skills-based parenting education, encouraging child support payments, and other methods); 

and (3) fostering economic stability of fathers (through work first 

services, job search, job training, subsidized employment, education, including career-advancing education, job retention, job enhancement, dissemination of employment materials, coordination 

with existing employment services such as welfare-to-work programs, referrals to local employment training initiatives, and other 

methods). 

The Committee Bill prohibits the use of responsible fatherhood 

demonstration grants for court proceedings on matters of child visitation or child custody, or legislative advocacy. 

The Committee Bill prohibits a state from being awarded a grant 

unless the state consults with experts of domestic violence or with 

relevant community domestic violence coalitions in developing programs or activities funded by the grant. The state also must describe in the grant application how the proposed programs or activities will address, as appropriate, issues of domestic violence and 

what the state will do, to the extent relevant, to ensure that participation in such programs or activities is voluntary and to inform 

potential participants that their involvement is voluntary. 

The Committee Bill requires that each eligible state that receives 

a grant must return any unused portion of the grant for a fiscal 

year back to the HHS Secretary not later than the last day of the 

second succeeding fiscal year, together with any earnings from interest on the unused portion. The Secretary is required to establish 

an appropriate procedure for redistributing to eligible states that 

have expended the entire amount of their grant for a fiscal year 

any amount that is returned to the Secretary by eligible states. 

The Committee Bill appropriates $20 million for each of the fiscal 

years 2006 through 2010 for responsible fatherhood demonstration 

grants. The Committee Bill stipulates that the amount of each responsible fatherhood demonstration grant awarded must be an 

amount sufficient to implement the state plan submitted by the 

state, subject to a minimum amount of $1 million per fiscal year 

in the case of the 50 states and the District of Columbia, and 

49

$500,000 in the case of Puerto Rico, the Virgin Islands, Guam, 

American Samoa, and the Northern Mariana Islands. 

Grants to Eligible Entities To Conduct Demonstration Programs 

The Committee Bill appropriates $30 million per year for FY2006 

through FY2010 for the HHS Secretary to award grants to eligible 

entities to conduct demonstration programs that carry out the purposes described above. An eligible entity is a local government, 

local public agency, community-based or nonprofit organization, or 

private entity, including any charitable or faith-based organization, 

an Indian tribe or a tribal organization that submits to the Secretary an application for a grant, at such time, in such manner, 

and containing the information required by the Secretary. An eligible entity must give the Secretary a description of the programs 

and activities that the entity will fund under the grant, including 

a good faith estimate of the number and characteristics of clients 

to be served under the projects and how the entity intends to 

achieve at least two of the purposes described above. The project 

description also must include a description of how the entity will 

coordinate and cooperate with state and local entities responsible 

for carrying out other programs that relate to the purposes intended to be achieved under the demonstration program, including 

as appropriate, entities responsible for carrying out jobs programs 

and programs serving children and families. In addition, the 

project description must include an agreement to maintain such 

records, submit such reports, and cooperate with such reviews and 

audits as the Secretary finds necessary to provide oversight of the 

demonstration program. 

The Committee Bill requires a certification that the entity will 

use the demonstration funds to promote at least two of the purposes described above; the entity will return any unused funds to 

the Secretary; and that the funds provided under the grant will be 

used for programs and activities that target low-income participants and that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 24 months has been, a recipient of assistance or services under a state program funded under Title IV–D or Title IV–

A, foster care (Title IV–E), Medicaid (Title XIX), or food stamps; or 

parents, including an expectant parent or a married parent, whose 

income (after adjustment for court-ordered child support paid or received) does not exceed 150 percent of the poverty line. In addition, 

the Committee Bill requires a certification that the entity will consult with representatives of state and local domestic violence centers. The entity must also certify that funds provided to the state 

for demonstration grants must not be used to supplement or supplant other federal, state, or local funds provided to the entity that 

are used to support programs or activities that are related to the 

purposes of the demonstration grants. 

In determining which entities to which to award responsible fatherhood demonstration grants, the HHS Secretary must attempt 

to achieve a balance among the eligible entities with respect to the 

size, urban or rural location, and use of differing or unique methods of the entities. 

50

The Committee Bill prohibits the use of responsible fatherhood 

demonstration grants awarded to entities for court proceedings on 

matters of child visitation or child custody, or legislative advocacy. 

The Committee Bill stipulates that the HHS Secretary may not 

award a grant to an eligible entity unless the entity, as a condition 

of receiving the grant, consults with experts in domestic violence 

or with relevant community domestic violence coalitions in developing the programs or activities funded by the grant; and describes 

in the grant application how the programs or activities will address 

issues of domestic violence and what the entity will do to ensure 

that participation in the programs or activities funded is voluntary 

and to inform potential participants that their involvement is voluntary. 

The Committee Bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a 

fiscal year back to the HHS Secretary not later than the last day 

of the second succeeding fiscal year, together with any earnings 

from interest on the unused portion. The Secretary is required to 

establish an appropriate procedure for redistributing to eligible entities that have expended the entire amount of their grant for a fiscal year any amount that is returned to the Secretary by eligible 

entities. 

The Committee Bill appropriates $30 million for each of the fiscal 

years 2006 through 2010 for responsible fatherhood demonstration 

grants to eligible entities. 

National Clearinghouse for Responsible Fatherhood Programs 

The Committee Bill authorizes an appropriation of $5 million for 

the HHS Secretary to contract with a nationally recognized, nonprofit fatherhood promotion organization to (1) develop, promote 

and distribute to interested states, local governments, public agencies, and private entities a media campaign that encourages appropriate involvement of both parents in the life of their children (with 

an emphasis on responsible fatherhood); and (2) develop a national 

clearinghouse to assist states and communities in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, and making available (through the Internet 

and by other means) to other states information on state-sponsored 

media campaigns. 

The Committee Bill requires the HHS Secretary to ensure that 

the selected nationally recognized nonprofit fatherhood promotion 

organization coordinate the media campaign and national clearinghouse that are developed with grant funds with national, state, or 

local domestic violence programs.

The nationally recognized nonprofit fatherhood promotion organization must have at least four years of experience in designing and 

disseminating a national public education campaign, and in providing consultation and training to community-based organizations 

interested in implementing fatherhood programs. 

The Committee Bill authorizes a $5 million appropriation for 

each of the fiscal years 2006 through 2010 to establish a national 

clearinghouse for responsible fatherhood programs. 

51

Block Grants to States To Encourage Media Campaigns 

The Committee Bill authorizes the HHS Secretary to provide a 

$20 million block grant to states for media campaigns for each of 

the fiscal years 2006 through 2010. 

Not later than October 1 of each of the fiscal years for which a 

state wants to receive an allotment of block grant funds, the Committee Bill requires the chief executive officer of the state to certify 

to the HHS Secretary that the state will use grant funds to promote the formation and maintenance of married two-parent families, strengthen fragile families, and promote responsible fatherhood through media campaigns. The executive officer also must certify that the state will return any unused funds to the Secretary 

and comply with the stipulated reporting requirements. 

States have the option of establishing media campaigns via radio 

or television, air-time challenge programs (under which the state 

may purchase air time only if it obtains non-federal contributions 

to purchase additional similar air time), or through the distribution 

of printed or other advertisements. A state may administer media 

campaigns directly or through grants, contracts, or cooperative 

agreements with public agencies, local governments, or private entities (including charitable and faith-based organizations). In developing broadcast and printed advertisements for media campaigns, 

the state or other entity administering the campaign must consult 

with representative of state and local domestic violence centers. 

The Committee Bill defines broadcast advertisement, child at risk, 

poverty line, printed or other advertisement, state, and young 

child. 

Each state’s allotment is based on its proportion of poor children 

in the nation, and its portion of children under age 5 in the nation. 

Each state and the District of Columbia would receive no less than 

the minimum allotment of $200,000; Guam, Puerto Rico, the Virgin 

Islands, American Samoa, and the Northern Mariana Islands 

would receive no less than $100,000 per year for FY2004–2008. 

The Committee Bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a 

fiscal year back to the HHS Secretary not later than the last day 

of the second succeeding fiscal year, together with any earnings 

from interest on the unused portion. The Secretary is required to 

establish an appropriate procedure for redistributing to states that 

have expended the entire amount of their grant for a fiscal year 

any amount that is returned to the Secretary by states, or not allotted to states because the state did not submit a certification by 

October 1 of a fiscal year. 

The Committee Bill requires each state that receives an allotment to monitor and evaluate media campaigns conducted using 

the allotted grant funds and to submit an annual report to the Secretary at such time, in such manner, and containing such information as the Secretary may require. 

The Committee Bill authorizes the HHS Secretary to provide a 

$20 million block grant to states for media campaigns for each of 

the fiscal years 2006 through 2010. The Secretary must conduct an 

evaluation of the impact of the media campaigns and report to Congress the results of the evaluation no later than December 31, 

2008. The Committee Bill authorizes a $1 million appropriation for 

52

FY2006 to conduct the evaluation (the evaluation funding is to remain available until expended). 

National Resource Center for Responsible Fatherhood 

The Committee Bill authorizes an appropriation of $1 million for 

the HHS Secretary to contract with a nationally recognized, nonprofit research and education fatherhood organization to (1) provide 

technical assistance and training to public and private agencies 

and grass roots organizations that promote responsible fatherhood 

and healthy marriage; and (2) develop a clearinghouse of resource 

materials to assist community-based organizations in developing 

local responsible fatherhood programs, with an emphasis on training and outcome evaluation. 

The nationally recognized nonprofit research and education fatherhood organization must have at least 12 years of experience in 

(1) developing and distributing research-based curriculum that promotes responsible fatherhood and healthy marriage with an emphasis on low-income and noncustodial fathers; (2) providing consultation and training to community-based organizations with a 

track record of working with social service, government, and faithbased organizations; and (3) providing direct training to fathers, father figures, and mothers using research-based curriculum in a variety of economic, cultural and family situations. 

The Committee Bill authorizes the HHS Secretary to provide $1 

million for a national resource center for responsible fatherhood for 

each of the fiscal years 2006 through 2010. 

Nondiscrimination Clause

The Committee Bill requires that the responsible fatherhood programs and activities be made available to all fathers and expectant 

fathers, including married and unmarried fathers and custodial 

and non-custodial fathers, with a special focus on low-income fathers, on the same basis; and that mothers and expectant mothers 

be able to participate in such programs and activities on the same 

basis as the fathers. 

REASON FOR CHANGE

Children do better academically, emotionally and socially when 

raised by their married biological parents. This provision in the bill 

provides states and faith based and community organizations and 

local governments with resources to find innovative ways to promote responsible fatherhood through marriage promotion and divorce reduction, parenting skill building, and where appropriate, 

expanded opportunities for strengthening the employment opportunities of low-income fathers. The provision is targeted on families, 

many of whom are unmarried at the time of the birth of their child, 

who have received TANF, Food Stamps or Medicaid Services or 

who have incomes below 150 percent of poverty. The provision requires all grantees to ensure that program participation is voluntary and that domestic violence experts and coalitions are consulted. 

53

SECTION 119—ADDITIONAL GRANTS

Social Services Capitalization Grants 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill authorizes $40 million for each of FYs 2006–

2010 for grants to be made by the HHS Secretary to entities for 

the purpose of capitalizing and developing the role of sustainable 

social services that are critical to the success of moving TANF recipients to work. Applicants would be required to describe the capitalization strategy they intend to follow to develop a program that 

generates its own source of on-going revenue while assisting TANF 

recipients. Administrative costs could not exceed 15 percent (except 

for computerization and information technology needed for tracking 

or monitoring required by TANF), but none of the other statutory 

rules regarding use of TANF funds would apply. The Committee 

Bill requires the Secretary to conduct an evaluation of the programs developed by these grants. 

REASON FOR CHANGE

The provision would support efforts to develop the role of selfsustainable social services which are critical in the success of moving welfare recipients into work. 

Transportation Ownership Demonstration Grants 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill authorizes $25 million for each of FYs 2006–

FY2010 for grants for low-income car ownership. The purposes are 

to improve employment opportunities for low-income families and 

provide incentives to states, Indian tribes, localities and nonprofit 

groups to develop and administer programs that promote car ownership by low-income families. No more than 5 percent could be 

used for administrative costs of the Secretary in carrying out this 

program. 

REASON FOR CHANGE

State TANF agencies cite a lack of reliable transportation as a 

major barrier to employment. This demonstration will promote innovative approaches to solving this problem. Certain State agencies 

and non-profit organizations have begun experimenting with car 

donation programs, in which donated vehicles are refurbished and 

ownership is transferred to families on TANF demonstrating need. 

Outcome studies have shown that beneficiaries reduce dependence 

on public cash-assistance by as much as 70 percent. The demonstration provides funds to encourage further study and dissemination of this promising approach to moving families to independence. 

54

Transitional Jobs/Business Links Grants 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill authorizes $200 million per year for FY2006 

through FY2010 for business links and transitional jobs programs. 

Grants are to be jointly awarded by the Secretaries of HHS and 

Labor to fund programs: 

(1) to promote ‘‘business linkages.’’ These are programs designed to improve the wages of eligible individuals by improving jobs skills in partnership with employers and providing 

supports and services at or near the worksite. Eligible grantees 

are private organizations, local workforce investment boards, 

States, localities, Indian tribes, tribal organizations and employers. Individuals eligible to be served by these programs are 

TANF recipients, former recipients, individuals with a disability, or noncustodial parents having difficulty in paying 

child support obligations who also have limited proficiency in 

the English language or other barriers to employment. 

(2) for ‘‘transitional jobs.’’ These programs combine subsidized, time-limited, wage-paying supported work in the public or nonprofit sectors with skill development and activities to 

remove barriers to employment. Eligible grantees are private 

organizations, local workforce investment boards, States, localities, Indian tribes, and tribal organizations. Individuals eligible to be served by these programs are TANF recipients, 

former recipients, individuals with a disability, or noncustodial 

parents having difficulty in paying child support obligations 

who also have limited proficiency in the English language or 

other barriers to employment. 

The Committee Bill requires a minimum of 40 percent of funds 

appropriated be used for businesses linkages and also a minimum 

of 40 percent be used for transitional jobs. Benefits and services 

provided under these programs are not considered assistance. The 

Committee Bill also requires an assessment by HHS and DoL of 

them, and sets aside $3 million per year for that assessment. The 

Committee Bill provides an additional set-aside of 1.5 percent for 

evaluation. 

REASON FOR CHANGE

Transitional jobs programs have been done in some States and 

have proven to be effective work-based programs where other programs have failed. By combining wage-paying subsidized jobs that 

combine real work, skill development and support services, these 

programs provide participants with the opportunity for skill development that has long-term impacts. Research shows that 

completers of transitional jobs program have high success rates in 

the labor market—an 81–94 percent employment rate for program 

completers. Partnership programs funded during the first round on 

welfare reform were successful in placing TANF parents with 

major employers ranging from airlines to regional and national retailers. This authorization is a targeted authorization to provide inVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00058 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
55

centive to place TANF parents in jobs where they will stay off welfare rolls. 

Nondisplacement of Regular Employees 

CURRENT LAW

Under TANF law, a recipient may fill a vacant employment position. However, no adult in a work activity that is funded in whole 

or in part by Federal funds may be employed or assigned when another person is on layoff from the same or any substantially equivalent job, or if the employer has ended the employment of any regular employee or otherwise caused an involuntary reduction in its 

workforce in order to fill a vacancy with a TANF recipient. These 

provisions do not preempt any provision of State or local law that 

provides greater protection against displacement. States are required to have a grievance procedure to resolve complaints of displacement of permanent employees. 

COMMITTEE BILL

The Committee Bill replaces the current nondisplacement provisions of TANF law. It provides that an adult recipient cannot displace any employee or position (including partial displacement), fill 

any unfilled vacancy, or perform work when any individual is on 

layoff from the same job or substantially equivalent job. TANF 

work activities cannot impair existing contracts or services; be inconsistent with any law, regulation, collective bargaining agreement; or infringe on the recall rights or promotional opportunities 

of any worker. TANF work activities must be in addition to any activity that would otherwise be available and not supplant the hiring of a non-TANF worker. 

The Committee Bill also requires states to have a grievance procedure for resolving complaints, including the opportunity for a 

hearing, and sets time standards for the process. It provides remedies for a violation of the non-displacement provisions, including 

termination and suspension of payments, prohibition on placement 

of the participant, reinstatement of the employee, or other relief to 

make the aggrieved employee whole. These provisions do not preempt or supercede any State or local law that provides greater protection. 

REASON FOR CHANGE

The Committee Bill improves protections against displacement 

and strengthens the grievance procedure. 

Teen Pregnancy Prevention Resource Center 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill appropriates $5 million for FY2006 (to be 

available through FY2010) for the Secretary of HHS to award a 

grant to a nationally recognized, nonpartisan, nonprofit organization (that meets stipulated requirements) to establish and operate 

a national teen pregnancy prevention resource center. The purpose 

56

of the resource center is to improve the well-being of children and 

families and encourage young people to delay pregnancy until marriage. The resource center will provide information and technical 

assistance to States, Indian tribes, local communities, and other 

private or public organizations seeking to reduce rates of teen pregnancy; support parents in their role in preventing teen pregnancy; 

and assist the entertainment media industry by encouraging them 

to develop content and messages for teens and adults that can help 

prevent teen pregnancy. The activities of the resource center are: 

synthesizing and disseminating research and information regarding 

effective and promising practices, and providing information on 

how to design and implement effective strategies to prevent teen 

pregnancy; providing information and reaching out to diverse populations, with particular attention to populations with the highest 

rates of teen pregnancy; helping States, local communities, and 

other organizations increase their knowledge of existing resources 

and build capacity to advance teen pregnancy prevention efforts; 

raising awareness of the importance of increasing the proportion of 

children born to, and raised in, healthy, adult marriages; linking 

organizations working to reduce teen pregnancy with experts and 

peer groups, including the creation of technical assistance networks; providing consultation and resources to teachers, coaches, 

mentors and other adults on how to reduce teen pregnancies 

through a broad array of strategies; assisting organizations seeking 

to reduce teen pregnancies to communicate effective messages with 

a variety of audiences; providing resources for parents and other 

adults; and working with individuals and organizations in the entertainment industry. 

REASON FOR CHANGE

The Committee recognizes the significant declines in reducing 

teen pregnancy over the past decade. However, teen pregnancy remains a serious problem with one-third of girls in the U.S. still getting pregnant at least once by age 20. Making additional progress 

on this issue is closely linked to the goals of welfare reform. Consequently, the Committee appropriates funds for a national teen 

pregnancy prevention resource center to provide technical assistance to state, tribal, local, community and faith-based organizations seeking to reduce rates of teen pregnancy, support parents by 

equipping them with information and resources to promote and 

strengthen communication with their children, and assist the entertainment media industry to develop messages that can help prevent teen pregnancy.

SECTION 120—TECHNICAL CORRECTIONS

COMMITTEE BILL

The Committee bill makes a number of corrections to punctuation, grammar, and legal references in the law. 

57

TITLE II—ABSTINENCE EDUCATION 

SECTION 201—EXTENSION OF ABSTINENCE EDUCATION PROGRAM

CURRENT LAW

The law appropriated $50 million annually for each of the fiscal 

years 1998–2002 for matching grants to states to provide abstinence education and, at state option, mentoring, counseling, and 

adult supervision to promote abstinence from sexual activity, with 

a focus on groups that are most likely to bear children out-of-wedlock. Funding has been extended through March 31, 2005 by continuing appropriations extension measures. Funds must be requested by states when they apply for Maternal and Child Health 

(MCH) block grant funds and must be used exclusively for the 

teaching of abstinence. States must match every $4 in federal 

funds with $3 in state funds. 

COMMITTEE BILL

The Committee Bill extends the $50 million annually appropriation for the abstinence education block grant program for each of 

the fiscal years 2006–2010. The Committee Bill continues funding 

for the program through September 30, 2005 in the same manner 

authorized for fiscal year 2004. The Committee Bill bases a state’s 

funding allotment on the proportion of low-income children in the 

state compared to the total number of low-income children in the 

states that apply for abstinence education block grants. Also (beginning with fiscal year 2006), the Committee Bill permits the 

HHS Secretary to reallocate abstinence education funds that he or 

she deems unnecessary to carry out a state’s program to other 

states that the Secretary determines need additional funding to 

carry out their abstinence education block grant programs. 

REASON FOR CHANGE

The Committee Bill continues the program with no change, but 

allows unrequested funds to be reallocated among the states with 

abstinence education programs. This will allow states that want to 

provide abstinence education with more access to funding. 

TITLE III—CHILD SUPPORT 

SECTION 301—DISTRIBUTION OF CHILD SUPPORT COLLECT BY STATE

ON BEHALF OF CHILDREN RECEIVING CERTAIN WELFARE BENEFITS

Assignment of child support rights 

CURRENT LAW

In order to receive benefits TANF recipients must assign their 

child support rights to the state. The assignment covers any unpaid 

child support that accrues while the family receives TANF and any 

support that accrued before the family began receiving TANF. 

Any assignment of rights to unpaid child support that was in effect on Sept. 30, 1997 must remain in effect. This means that any 

child support collected as a result of the assignment must go the 

state and the federal government. 

58

COMMITTEE BILL

The Committee Bill stipulates that the assignment covers only 

child support that accrues during the period that the family receives TANF. (In other words, pre-assistance arrearages would be 

eliminated). In addition, the Committee Bill gives states the option 

to discontinue pre-assistance assignments in effect on Sept. 30, 

1997. If a state chooses to discontinue the child support assignment, the state may distribute collections from such assignment to 

the family. States also would have the option to discontinue preassistance arrearage assignments in effect before 2003. If a state 

chooses to discontinue the child support assignment, the state may 

distribute collections from such assignment to the family. 

REASON FOR CHANGE

The Committee Bill would support family self-sufficiency by allowing families to keep more of the child support collected on their 

behalf. It would also prevent TANF families from losing access to 

lump sum collections of past-due pre-assistance support that may 

help them exit TANF. 

Distribution of child support to TANF families 

CURRENT LAW

While the family receives TANF benefits, the state is permitted 

to retain any current child support payments and any assigned arrearages it collects up to the cumulative amount of TANF benefits 

which has been paid to the family. In other words, the state can 

decide how much, if any, of the state share (some, all, none) of the 

child support payment collected on behalf of TANF families to send 

to the family. The state is required to pay the federal government 

the federal share of the child support collected. 

Child support payments collected on behalf of TANF families 

that are passed through to the family and disregarded by the state 

count toward the TANF MOE (maintenance of effort) expenditure 

requirement. 

COMMITTEE BILL

For families that receive TANF benefits, the Committee Bill requires the federal government to waive its share of child support 

collections passed through to TANF families by the state and disregarded by the state-up to an amount equal to $400 per month in 

the case of a family with one child, and up to $600 per month in 

the case of a family with two or more children. Like current law, 

disregarded pass through amounts count as TANF MOE expenditures. 

The Committee Bill includes a provision that allows states with 

section 1115 demonstration waivers (on or before October 1, 1997) 

related to the child support pass-through provisions to continue to 

pass through payments to families in accordance with the terms of 

the Waiver. 

REASON FOR CHANGE

The Committee Bill promotes family self-sufficiency by providing 

an incentive for states to allow families to keep more of the child 

59

support collected on their behalf. No such incentive currently exist. 

This option would also allow noncustodial parents who pay child 

support to know that their support payments are being received by 

their children. 

Distribution of child support to former TANF families 

CURRENT LAW

With respect to former TANF families: Current child support 

payments must be paid to the family. Since October 1, 1997, child 

support arrearages that accrue after the family leaves TANF also 

are required to be paid to the family before any monies may be retained by the state. Further since October 1, 2000, child support 

arrearages that accrued before the family began receiving TANF 

also are required to be distributed to the family first. 

However, if child support arrearages are collected through the 

federal income tax refund offset program, the family does not have 

first claim on the arrearage payments. Such arrearage payments 

are retained by the state and the federal government. 

COMMITTEE BILL

As mentioned above, the Committee Bill eliminates the assignment of pre-assistance arrearages. The Committee Bill also eliminates the special treatment of child support arrearages collected 

through the federal income tax refund offset program. Such collections also would go to the family first. 

To the extent that the arrearage amount payable to a former 

TANF family in any given month under the Committee Bill exceeds 

the amount that would have been payable to the family under current law, the state can elect to have the amount paid to the family 

considered an expenditure for Maintenance-of-Effort (MOE) purposes. In addition, the Committee Bill amends the Child Support 

Enforcement State Plan to include an election by the state to include whether it is using the new option to pass through all arrearage payments to former TANF families without paying the federal 

government its share of such collections or whether it chooses to 

maintain the current law distribution method. Further, the Committee Bill stipulates that no later than 6 months after the date 

of enactment of this legislation, the HHS Secretary, in consultation 

with the states, must establish the procedures to be used to make 

estimates of excess costs associated with new funding option. 

REASON FOR CHANGE

The Committee Bill supports self-sufficiency by providing former 

TANF families with more of the child support collected on their behalf, regardless of how it is collected. It allows states to use the 

federal tax refund offset remedy to get more collections to families. 

Providing MOE for additional money to families provides further 

incentive for states to exercise this option and is consistent with 

MOE policy on the pass through of child support collections to current TANF families. 

60

Distribution of child support to families that never received assistance 

CURRENT LAW

The entire amount of the child support collection is distributed 

to families that never received TANF assistance. 

COMMITTEE BILL

Same as current law. 

REASON FOR CHANGE

No change. 

Distribution of child support to families under certain agreements 

CURRENT LAW

In the case of a family receiving TANF assistance from an Indian 

tribe or tribal organization, the child support collection is to be distributed according to the cooperative agreement specified in the 

Child Support Enforcement State Plan. 

COMMITTEE BILL

Same as current law. 

REASON FOR CHANGE

No change. 

Effective date 

CURRENT LAW

Not applicable. 

COMMITTEE BILL

The amendments made by this section of the bill would take effect on October 1, 2009, and would apply to payments under parts 

A and D of Title IV of the Social Security Act for calendar quarters 

beginning on or after such date. States could elect to have the 

amendments take effect earlier-at any date that is 18 months after 

the date of enactment of the bill but not later than September 30, 

2009. 

REASON FOR CHANGE

This effective date will allow states sufficient time to implement 

required and optional changes in child support distribution and assignment, while also allowing states to choose to proceed more 

quickly. 

SECTION 302—MANDATORY REVIEW AND ADJUSTMENT OF CHILD

SUPPORT ORDERS FOR FAMILIES RECEIVING TANF 

CURRENT LAW

Federal law requires that the state have procedures under which 

every 3 years the state review and adjust (if appropriate) child support orders at the request of either parent, and that in the case of 

61

TANF families, the state review and update (if appropriate) child 

support orders at the request of the state Child Support Enforcement (CSE) agency or of either parent. 

COMMITTEE BILL

The Committee Bill requires states to review and, if appropriate, 

adjust child support orders in TANF cases every 3 years. The provision would take effect on October 1, 2007. 

REASON FOR CHANGE

The mandatory review and, if necessary, modification of child 

support orders will make award amounts more appropriate. In 

some cases this will increase the amount of payment required, 

which will in turn increase collections, and in other cases it will reduce the amount of payment required, therefore limiting the accumulation of uncollectible arrears.

SECTION 303—REPORT ON UNDISTRIBUTED CHILD SUPPORT

PAYMENTS

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill requires that within 6 months of enactment, 

the HHS Secretary must submit to the House Ways and Means 

Committee and the Senate Finance Committee a report on the procedures states use to locate custodial parents for whom child support has been collected but not yet distributed. The report must include an estimate of the total amount of undistributed child support and the average length of time it takes undistributed child 

support to be distributed. To the extent that the HHS Secretary 

deems appropriate, the report would be required to include recommendations as to whether additional procedures should be established at the state or federal level to expedite the payment of 

undistributed child support. 

REASON FOR CHANGE

Undistributed collections are a significant new issue that merits 

further analysis and may require further state or federal action in 

order to ensure that families are receiving the support paid on 

their behalf, as appropriate. 

SECTION 304—DECREASE IN AMOUNT OF CHILD SUPPORT

ARREARAGE TRIGGERING PASSPORT DENIAL

CURRENT LAW

Federal law stipulates that the HHS Secretary is required to 

submit to the Secretary of State the names of noncustodial parents 

who have been certified by the state CSE agency as owing more 

than $5,000 in past-due child support. The Secretary of State has 

authority to deny, revoke, restrict, or limit passports to noncustodial parents whose child support arrearages exceed $5,000. 

62

COMMITTEE BILL

The Committee Bill authorizes the denial, revocation, or restriction of passports to noncustodial parents whose child support arrearages exceed $2,500, rather than $5,000 as under current law. 

The provision would take effect on October 1, 2006. 

REASON FOR CHANGE

This provision will increase the success of the passport denial 

program and provide more collections to families. Fewer arrears 

will have to build up before this effective enforcement tool can be 

utilized. 

SECTION 305—USE OF TAX REFUND INTERCEPT PROGRAM TO COL- LECT PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN WHO

ARE NOT MINORS

CURRENT LAW

Federal law prohibits the use of the federal income tax offset program to recover past-due child support on behalf of non-welfare 

cases in which the child is not a minor, unless the child was determined disabled while he or she was a minor and for whom the 

child support order is still in effect. (Since its enactment in 1981 

(P.L. 97–35), the federal income tax offset program has been used 

to collect child support arrearages on behalf of welfare families regardless of whether the children were still minors-as long as the 

child support order was in effect.) 

COMMITTEE BILL

The Committee Bill permits the federal income tax refund offset 

program to be used to collect arrearages on behalf of non-welfare 

children who are no longer minors. The provision would take effect 

on October 1, 2007. 

REASON FOR CHANGE

This will increase support to families by removing a barrier to 

collecting past due child support on behalf of children who are no 

longer minors. 

SECTION 306—GARNISHMENT OF COMPENSATION PAID TO VETERANS

FOR SERVICE-CONNECTED DISABILITIES IN ORDER TO ENFORCE

CHILD SUPPORT OBLIGATIONS

CURRENT LAW

The disability compensation benefits of veterans are treated differently than most forms of government payment for purposes of 

paying child support. Whereas most government payments are subject to being automatically withheld to pay child support, veterans 

disability compensation is not subject to intercept. The only exception occurs when veterans have elected to forego some of their retirement pay in order to collect additional disability payments. The 

advantage of veterans replacing retirement pay with disability pay 

is that the disability pay is not subject to taxation. With this exception, which occurs rarely, the only way to obtain child support payments from veterans’ disability compensation is to request that the 

63

Secretary of the Veterans Administration intercept the disability 

compensation and make the child support payments. 

COMMITTEE BILL

The Committee Bill allows veterans’ disability compensation benefits to be intercepted (withheld) and paid on a routine basis to the 

custodial parent. The Committee Bill prohibits the garnishment of 

any veteran’s disability compensation in order to collect alimony, 

unless that disability compensation is being paid because retirement benefits were waived. The provision would take effect on October 1, 2007. 

REASON FOR CHANGE

This proposal will provide more child support collections to families of veterans and make the child support intercept of veterans’s 

disability payments more consistent with other forms of government payment. 

SECTION 307—IMPROVING FEDERAL DEBT COLLECTION PRACTICES

CURRENT LAW

Federal law stipulates that any federal agency that is owed a 

nontax debt (that is more than 180 days past-due) may notify the 

Secretary of the Treasury to obtain an administrative offset of the 

debt. Currently, states have the authority to garnish Social Security benefits (except SSI) for child support payments,—but they 

cannot use the federal administrative offset process to do so. However, Social Security payments can only be offset for federal debt 

recovery. (Federal law exempts $9,000 annually ($750 per month) 

from the administrative offset. 

COMMITTEE BILL

The Committee Bill expands the federal administrative offset 

program by allowing certain Social Security benefits to be offset to 

collect past-due child support (on behalf of families receiving CSE 

[Title IV–D of the Social Security Act] services) in appropriate 

cases selected by the states. Moreover, it specifically overrules section 207 of the Social Security Act 52 which states that Social Security benefits are not transferable by garnishment. The provision 

would take effect on a date that is 18 months after the date of enactment. 

REASON FOR CHANGE

The Committee Bill will increase child support collections to the 

families of benefit recipients by allowing offset of additional benefits, while maintaining an adequate benefit level for the recipient. 

SECTION 308—MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING

CURRENT LAW

Federal law authorizes the HHS Secretary to use 1 percent of the 

federal share of child support collected on behalf of TANF families 

the preceding year to provide to the states—information dissemination and technical assistance, training of state and federal staff, 

64

staffing studies, and related activities needed to improve CSE programs (including technical assistance concerning state automated 

CSE systems), and research demonstration and special projects of 

regional or national significance relating to the operation of CSE 

programs. Such funds are available until they are expended. 

COMMITTEE BILL

The Committee Bill authorizes the HHS Secretary to use 1 percent of the federal share of child support collected on behalf of 

TANF families the preceding year, or the amount appropriated for 

FY2002, whichever is greater, to provide to the states—information 

dissemination and technical assistance, training of state and federal staff, staffing studies, and related activities needed to improve 

CSE programs (including technical assistance concerning state 

automated CSE systems), and research demonstration and special 

projects of regional or national significance relating to the operation of CSE programs. Such funds are available until they are expended. 

REASON FOR CHANGE

Since the child support assignment and distribution changes in 

the Committee Bill will allow TANF and former TANF families to 

keep more of the child support collected on their behalf, TANF collections retained by the federal government will be reduced. This 

provision freezes technical assistance funding at least at FY2002 

levels to ensure that sufficient funding is available for important 

child support technical assistance functions, even as the federal 

share of collections falls.

SECTION 309—MAINTENANCE OF FEDERAL PARENT LOCATOR

SERVICE FUNDING

CURRENT LAW

Federal law authorizes the HHS Secretary to use 2 percent of the 

federal share of child support collected on behalf of TANF families 

the preceding year for operation of the Federal Parent Locator 

Service to the extent that the costs of the Federal Parent Locator 

Service are not recovered by user fees. Federal law allows only 

such funds that were appropriated for FY1997–FY2001 to remain 

available until expended. 

COMMITTEE BILL

The Committee Bill authorizes the HHS Secretary to use 2 percent of the federal share of child support collected on behalf of 

TANF families the preceding year, or the amount appropriated for 

FY2002, whichever is greater, for operation of the Federal Parent 

Locator Service to the extent that the costs of the Federal Parent 

Locator Service are not recovered by user fees. Allows amounts appropriated for the Federal Parent Locator Service to remain available until they are expended. 

REASON FOR CHANGE

Since the child support assignment and distribution changes in 

the Committee Bill will allow TANF and former TANF families to 

65

keep more of the child support collected on their behalf, TANF collections retained by the federal government will be reduced. This 

provision freezes Federal Parent Locator Service funding at least at 

FY2002 levels to ensure that sufficient funding is available for the 

operation of the Federal Parent Locator Service, which is a key 

child support enforcement tool, even as the federal share of collections falls. 

SECTION 310—IDENTIFICATION AND SEIZURE OF ASSETS HELD BY

MULTI-STATE FINANCIAL INSTITUTIONS

CURRENT LAW

The 1996 welfare reform law required states to enter into agreements with financial institutions conducting business within their 

state for the purpose of conducting a quarterly data match. The 

data match is intended to identify financial accounts (in banks, 

credit unions, money-market mutual funds, etc.) belonging to parents who are delinquent in the payment of their child support obligation. When a match is identified, state CSE agencies may issue 

liens or levies on the account(s) of the delinquent parent to collect 

the past-due child support. In some cases, state law prohibits the 

placement of liens or levies on accounts outside of the state and 

some financial institutions only accept liens and levies from the 

state where the account is located. In 1998, Congress made it easier for multi-state financial institutions to match records by permitting the Federal Parent Locator Service (FPLS) to help them coordinate their information. 

COMMITTEE BILL

The Committee Bill authorizes the HHS Secretary, via the Federal Parent Locator Service, to assist states to perform data 

matches comparing information from states and participating 

multi-state financial institutions with respect to persons owing 

past-due child support. The Committee Bill authorizes the Secretary via the Federal Parent Locator Service to seize assets, held 

by such financial institutions, of noncustodial parents who owe 

child support arrearage payments, by issuing a notice of a lien or 

levy and requiring the financial institution to freeze and seize assets in accounts in multi-state financial institutions to satisfy child 

support obligations. The Secretary would be required to transmit 

any assets seized under the procedure to the state for accounting 

and distribution. The Committee Bill stipulates that the Secretary 

must inform affected account holders/asset holders of their due 

process rights. 

REASON FOR CHANGE

After HHS identifies assets held in multi-state financial institutions by persons who owe past due support, many states cannot 

take action to seize financial assets when they are located in another state. Therefore, the Committee Bill authorizes the Secretary 

to take administrative action on behalf of a state to freeze and 

seize assets in accounts in multi-state financial institutions, identified through the multi-state financial institution data match. This 

will make full use of this existing enforcement mechanism and increase the collection of past-due child support. 

66

SECTION 311—INFORMATION COMPARISONS WITH INSURANCE DATA

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee Bill authorizes the HHS Secretary, via the Federal Parent Locator Service, to compare information of noncustodial 

parents who owe past-due child support with information maintained by insurers (or their agents) concerning insurance claims, 

settlements, awards, and payments; and to furnish any information 

resulting from a match to the appropriate state CSE agency in 

order to secure settlements, awards, etc. for payment of past-due 

child support. 

REASON FOR CHANGE

States must have in effect laws requiring the use of procedures 

authorizing intercepting or seizing periodic or lump-sum payments 

from settlements to satisfy current support obligations. Often 

states are unable to access the databases that contain insurance 

and settlement information, especially when the information is related to an interstate case or when an insurance company is located in another state. In order to assist states, the Committee Bill 

permits the Secretary to administer an insurance claims matching 

program. Under the proposal, the Federal Offset File (individuals 

who owe past-due support) would be matched against insurance 

databases to identify individuals who have pending insurance 

claims and settlements. The Secretary would notify states if delinquent obligors have pending insurance claims and settlements so 

that states could take enforcement actions to freeze and seize these 

payments. Participation by insurance companies would be voluntary. 

SECTION 312—TRIBAL ACCESS TO THE FEDERAL PARENT LOCATOR

SERVICE

CURRENT LAW

The Federal Parent Locator Service (FPLS) is a national location 

system operated by the federal Office of Child Support Enforcement 

to assist states in locating noncustodial parents, putative fathers, 

and custodial parties for the establishment of paternity and child 

support obligations, as well as the enforcement and modification of 

orders for child support, custody and visitation. It also identifies 

support orders or support cases involving the same parties in different states. The FPLS consists of the Federal Case Registry, Federal Offset Program, Multi-state Financial Institution Data Match, 

National Directory of New Hires, and the Passport Denial Program. Additionally, the FPLS has access to external locate sources 

such as the Internal Revenue Service (IRS), the Social Security Administration (SSA), Veterans Affairs (VA), the Department of Defense (DOD), and the Federal Bureau of Investigation (FBI). The 

FPLS is only allowed to transmit information in its databases to 

‘‘authorized persons,’’ which include (1) child support enforcement 

agencies (and their attorneys and agents); (2) courts; (3) the resiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00070 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
67

dent parent, legal guardian, attorney, or agent of a child owed child 

support; and (4) foster care and adoption agencies. 

COMMITTEE BILL

The Committee Bill includes Indian tribes and tribal organizations that operate a child support enforcement program as ‘‘authorized persons.’’

REASON FOR CHANGE

The Committee Bill will give tribal child support enforcement 

programs access to the Federal Parent Locator Service, to which 

state child support enforcement agencies currently have access, so 

that they can use it to locate noncustodial parents to establish paternity and collect child support. This will increase child support 

collections to families, especially tribal families. 

SECTION 313—REIMBURSEMENT OF SECRETARY’S COSTS OF INFORMATION COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF

OBLIGATIONS ON HIGHER EDUCATION ACT LOANS AND GRANTS

CURRENT LAW

Federal law (P.L. 106–113) authorized the Department of Education to have access to the National Directory of New Hires. The 

provisions were designed to improve the ability of the Department 

of Education to collect on defaulted loans and grant overpayments 

made to individuals under Title IV of the Higher Education Act of 

1965. The Federal Office of Child Support Enforcement (OCSE) and 

the Department of Education negotiated and implemented a Computer Matching Agreement in December 2000. Under the agreement, the Secretary of Education is required to reimburse the HHS 

Secretary for the additional costs incurred by the HHS Secretary 

in furnishing requested information. 

COMMITTEE BILL

The Committee Bill amends the reimbursement of costs provision 

by eliminating the word additional. Thus, the Secretary of Education is to reimburse the HHS Secretary for any costs incurred by 

the HHS Secretary in providing requested new hires information. 

REASON FOR CHANGE

The Committee Bill makes legislative language governing the 

Department of Education’s access to the National Directory of New 

Hires consistent with general reimbursement language that applies 

to other entities. 

SECTION 314—TECHNICAL AMENDMENT RELATING TO COOPERATIVE

AGREEMENTS BETWEEN STATES AND INDIAN TRIBES

CURRENT LAW

Federal law requires that any state that has a child welfare program and that has Indian country may enter into a cooperative 

agreement with an Indian tribe or tribal organization if the tribe 

demonstrates that it has an established tribal court system with 

several specific characteristics related to paternity establishment 

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and the establishment and enforcement of child support obligations. The HHS Secretary may make direct payments to Indian 

tribes and tribal organizations that have approved child support 

enforcement plans. 

COMMITTEE BILL

The Committee Bill deletes the reference to child welfare programs. 

REASON FOR CHANGE

This reference incorrectly refers to the child welfare program 

rather than the child support enforcement program. 

SECTION 315—CLAIMS UPON LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION FOR CHILD SUPPORT

CURRENT LAW

The Longshore and Harbor Worker’s Compensation Act is the 

federal worker’s compensation law for maritime workers and persons working in shipyards and on docks, ships, and offshore drilling platforms. The Act exempts benefits paid by longshore or harbor employers or their insurers from all claims of creditors. Thus, 

Longshore and Harbor Worker’s Compensation Act benefits that 

are paid by longshore or harbor employers or their insurers are not 

subject to attachment for payment of child support obligations. 

COMMITTEE BILL

The Committee Bill amends the Longshore and Harbor Workers’ 

Compensation Act to ensure that longshore or harbor workers benefits that are provided by the federal government or by private insurers are subject to garnishment for purposes of paying child support obligations. 

REASON FOR CHANGE

The Federal Longshore and Harbor Worker’s Compensation Act 

(LHWCA) benefits that are paid by a self-insured entity or private 

insurer are not subject to attachment for payment of child support 

obligations. The Committee Bill would allow garnishment of all 

LHWCA benefits for purpose of child support enforcement, thereby 

increasing child support collections. 

SECTION 316—STATE OPTION TO USE STATEWIDE AUTOMATED DATA

PROCESSING AND INFORMATION RETRIEVAL SYSTEM FOR INTERSTATE CASES

CURRENT LAW

The 1996 welfare reform law mandated states to establish procedures under which the state would use high-volume automated administrative enforcement, to the same extent as used for intrastate 

cases, in response to a request from another state to enforce a child 

support order. This provision was designed to enable child support 

agencies to quickly locate and secure assets held by delinquent 

noncustodial parents in another state without opening a full-blown 

interstate child support enforcement case in the other state. The 

69

assisting state must use automatic data processing to search various state data bases including financial institutions, license 

records, employment service data, and state new hire registries, to 

determine whether information is available regarding a parent who 

owes a child support obligation, the assisting state is then required 

to seize any identified assets. This provision does not allow states 

to open/establish a child support interstate case. 

COMMITTEE BILL

The Committee Bill allows an assisting state to establish a child 

support interstate case based on another state’s request for assistance; and thereby an assisting state may use the CSE statewide 

automated data processing and information retrieval system for 

interstate cases. 

REASON FOR CHANGE

The Committee Bill allows states that cannot now use their automated systems to provide high-volume automated administrative 

enforcement services in interstate cases to choose to open a case in 

order to assist other states in collecting child support. This will increase interstate child support collections. 

SECTION 317—STATE LAW REQUIREMENT CONCERNING THE

UNIFORM INTERSTATE FAMILY SUPPORT ACT (UIFSA) 

CURRENT LAW

The 1996 welfare reform law (P.L. 104–193) required that on and 

after January 1, 1998, each state must have in effect the Uniform 

Interstate Family Support Act (UIFSA), as approved by the American Bar Association on February 9, 1993, and as in effect on August 22, 1996, including any amendments officially adopted as of 

such date by the National Conference of Commissioners on Uniform State Laws. 

Federal law requires states to treat past-due child support obligations as final judgments that are entitled to full faith and credit 

in every state. This means that a person who has a child support 

order in one state does not have to obtain a second order in another 

state to obtain child support due should the noncustodial parent 

move from the issuing court’s jurisdiction. P.L. 103–383 restricts a 

state court’s ability to modify a child support order issued by another state unless the child and the custodial parent have moved 

to the state where the modification is sought or have agreed to the 

modification. The 1996 welfare reform law (P.L. 104–193) clarified 

the definition of a child’s home state, makes several revisions to ensure that the full faith and credit laws can be applied consistently 

with UIFSA, and clarifies the rules regarding which child support 

orders states must honor when there is more than one order. 

COMMITTEE BILL

The Committee Bill requires that each state’s Uniform Interstate 

Family Support Act (UIFSA) must include any amendments officially adopted as of August 2001 by the National Conference of 

Commissioners on Uniform State Laws. 

70

In addition, the Committee Bill clarifies current law by stipulating that a court of a state that has established a child support 

order has continuing, exclusive jurisdiction to modify its order if 

the order is the controlling order and the state is the child’s state 

or the residence of any individual contestant; or if the state is not 

the residence of the child or an individual contestant, the court has 

the contestant’s consent in a record or in open court that the court 

may continue to exercise jurisdiction to modify its order. It also 

modifies the current rules regarding the enforcement of modified 

orders. 

REASON FOR CHANGE

The Committee Bill updates an outdated reference to an older 

version of UIFSA. 

SECTION 318—GRANTS TO STATES FOR ACCESS AND VISITATION

PROGRAMS

CURRENT LAW

The 1996 welfare reform law (P.L. 104–193) authorized grants to 

states (via CSE funding) to establish and operate access and visitation programs. The purpose of the grants is to facilitate noncustodial parents’ access to and visitation of their children. An annual 

entitlement of $10 million from the federal CSE budget account is 

available to states for these grants. Eligible activities include but 

are not limited to mediation, counseling, education, development of 

parenting plans, visitation enforcement, and development of guidelines for visitation and alternative custody arrangements. The allotment formula is based on the ratio of the number of children in 

the state living with only one biological parent in relation to the 

total number of such children in all states. The amount of the allotment available to a state will be this same ratio to $10 million. The 

allotments are to be adjusted to ensure that there is a minimum 

allotment amount of $50,000 per state for FY1997 and FY1998, 

and a minimum of $100,000 for any year after FY1998. States may 

use the grants to create their own programs or to fund programs 

operated by courts, local public agencies, or nonprofit organizations. The programs do not need to be statewide. States must monitor, evaluate, and report on their programs in accord with regulations issued by the HHS Secretary. 

COMMITTEE BILL

The Committee Bill increases funding for Access and Visitation grants from $10 million annually to $12 million in FY2006, $14 

million in FY2007, $16 million in FY2008, and $20 million annually in FY2009 and each succeeding fiscal year. The Committee Bill 

extends the Access and Visitation program to Indian tribes and 

tribal organizations that have received direct child support enforcement payments from the federal government for at least one year. 

The Committee Bill includes a specified amount to be set aside for 

Indian tribes and tribal organizations: $250,000 for FY2006; 

$600,000 for FY2007; $800,000 for FY2008; and $1.670 million for 

FY2009 or any succeeding fiscal year. 

The Committee Bill increases the minimum allotment to states 

to $120,000 in FY2006, $140,000 in FY2007, $160,000 in FY2008, 

71

and $180,000 in FY2009 or any succeeding fiscal year. The minimum allotment for Indian tribes and tribal organizations is 

$10,000 for a fiscal year. The tribal allotment cannot exceed the 

minimum state allotment for any given fiscal year. 

The allotment formula for Indian tribes and tribal organizations 

that operate child support enforcement programs is based on the 

ratio of the number of children in the tribe or tribal organization 

living with only one parent in relation to the total number of children living with only one parent in all Indian tribes or tribal organizations. The amount of the allotment available to an Indian tribe 

or tribal organization would be this same ratio to the maximum allotment for Indian tribes and tribal organizations (i.e., $250,000 for 

FY2006; $600,000 for FY2007; $800,000 for FY2008; and $1.670 

million for FY2009 or any succeeding fiscal year). (Pro rata reductions are to be made if they are necessary.) 

REASON FOR CHANGE

The Committee Bill provides additional funding for the Access 

and Visitation Grant Program so that more families can benefit 

from these services. Increasing a child’s access to both parents may 

improve child well-being and is associated with increased compliance in the payment of child support. 

SECTION 319—TIMING OF CORRECTIVE ACTION YEAR FOR STATE

NONCOMPLIANCE WITH CHILD SUPPORT ENFORCEMENT PROGRAM

REQUIREMENTS

CURRENT LAW

Federal law requires that audits be conducted at least every 3 

years to determine whether the standards and requirements prescribed by law and regulations have been met by the child support 

program of every state. If a state fails the audit, federal TANF 

funds must be reduced by an amount equal to at least 1 but not 

more than 2 percent for the first failure to comply, at least 2 but 

not more than 3 percent for the second failure, and at least 3 but 

not more than 5 percent for the third and subsequent failures. 

The HHS Secretary also must review state reports on compliance 

with federal requirements and provide states with recommendations for corrective action. The purpose of the audits is to assess 

the completeness, reliability, and security of data reported for use 

in calculating the performance indicators and to assess the adequacy of financial management of the state program. Federal law 

calls for penalties to be imposed against states that fail to comply 

with a corrective action plan in the succeeding fiscal year. 

COMMITTEE BILL

The Committee Bill changes the timing of the corrective action 

year for states that are found to be in noncompliance of child support enforcement program requirements. The Committee Bill 

changes the corrective action year in which the sanction is imposed 

to the fiscal year following the fiscal year in which the Secretary 

makes a finding of noncompliance and recommends a corrective action plan. The change is made retroactively in order to allow the 

Secretary to treat all findings of noncompliance consistently. The 

Committee Bill also makes a special exception for noncompliances 

72

that occur in fiscal year 2001. If the HHS Secretary finds that the 

state has corrected such a noncompliance in fiscal year 2002 or fiscal year 2003, then the penalty is forgiven and no sanction is levied 

against the state for that noncompliance. 

REASON FOR CHANGE

Current language does not recognize the time necessary to conduct federal audits and that those audits now occur during what 

is, under current law, a state’s corrective action year. This technical correction will give states a full year to correct identified deficiencies. 

SECTION 320—REQUIREMENT THAT STATE CHILD SUPPORT ENFORCEMENT AGENCIES SEEK MEDICAL SUPPORT FOR CHILDREN

FROM EITHER PARENT

CURRENT LAW

Federal law requires that a state CSE agency issue a notice to 

the employer of a noncustodial parent, who is subject to a child 

support order issued by a court or administrative agency, informing 

the employer of the parent’s obligation to provide health care coverage for the child(ren). The employer must then determine whether family health care coverage is available for which the dependent 

child(ren) may be eligible, and if so, the employer must notify the 

plan administrator of each plan covered by the National Medical 

Support Notice. If the dependent child(ren) is eligible for coverage 

under a plan, the plan administrator is required to enroll the dependent child(ren) in an appropriate plan. The plan administrator 

also must notify the noncustodial parent’s employer of the premium 

amount to be withheld from the employee’s paycheck. 

COMMITTEE BILL

The Committee Bill requires that medical support for a child be 

provided by either or both parents and that it must be enforced. 

The Committee Bill includes language that authorizes the state 

CSE agency to enforce medical support against a custodial parent 

whenever health care coverage is available to the custodial parent 

at reasonable cost. It stipulates that medical support may include 

health care coverage (including payment of costs of premiums, copayments, and deductibles) and payment of medical expenses incurred on behalf of a child. 

REASON FOR CHANGE

To improve enforcement of medical support. 

SECTION 321—NOTICE TO STATE CHILD SUPPORT ENFORCEMENT

AGENCY FROM HEALTH CARE PLAN ADMINISTRATOR UNDER CERTAIN CIRCUMSTANCE WHEN A CHILD LOSES HEALTH CARE COV- ERAGE

CURRENT LAW

Federal law requires the health care plan administrator to notify 

qualified beneficiaries of their beneficiary rights with regard to 

health care coverage when or if one of the following events occurs: 

73

(1) the noncustodial parent with the health care coverage dies; (2) 

the noncustodial parent with the health care coverage loses his or 

her job or starts working fewer hours; (3) the noncustodial parent 

with the health care coverage becomes eligible for Medicaid benefits; (4) the noncustodial parent with the health care coverage becomes involved in a bankruptcy proceeding pertaining to his or her 

former employer; (5) the noncustodial parent with the health care 

coverage gets divorced or obtains a legal separation; or (6) the child 

of the noncustodial parent with the health care coverage ceases to 

be a dependent child. (With respect to (5) and (6), the noncustodial 

parent (i.e., the covered employee) is required to notify the health 

care plan administrator of such an event.) 

COMMITTEE BILL

The Committee Bill requires the health care plan administrator 

to notify the state CSE agency if the noncustodial parent with the 

health care coverage dies, loses his or her job or is working fewer 

hours, becomes eligible for Medicaid benefits, or is involved in a 

bankruptcy proceeding pertaining to the noncustodial parent’s 

former employer. In addition, the Committee Bill requires the 

health care plan administrator to notify the state CSE agency if 

the noncustodial parent with the health care coverage gets divorced 

or obtains a legal separation, or if the noncustodial parent’s child 

ceases to be a dependent child (in cases where the noncustodial 

parent has notified the plan administrator of such an occurrence). 

REASON FOR CHANGE

To improve notification of a state CSE agency. 

SECTION 322—AUTHORITY TO CONTINUE STATE PROGRAM FOR

MONITORING AND ENFORCEMENT OF CHILD SUPPORT ORDERS

CURRENT LAW

Federal law stipulates that the following families automatically 

qualify for Child Support Enforcement (CSE) services: families receiving Temporary Assistance to Needy Families (TANF) benefits 

(Title IV–A), foster care payments (Title IV–E), Medicaid coverage 

(Title XIX), or food stamps (if cooperation is required by the state). 

Other families (i.e., nonwelfare families) must apply for CSE services. The state of Texas currently has a waiver of the requirement 

for a written application for CSE services for nonwelfare families 

(Section 1115 of the Social Security Act). In participating counties, 

these nonwelfare families are automatically a part of the CSE caseload. Texas’ five-year waiver is scheduled to expire in 2006. 

COMMITTEE BILL

The Committee Bill allows the state of Texas to continue to operate its CSE program for monitoring and enforcement of court orders on behalf of a nonwelfare families without applying for a federal waiver. Currently the state of Texas does not require these 

families to apply for CSE services. 

REASON FOR CHANGE

To continue the improvements to CSE in the state of Texas. 

74

SECTION 323—TECHNICAL AMENDMENT RELATING TO INFORMATION

COMPARISONS AND DISCLOSURE TO ASSIST IN FEDERAL DEBT COLLECTION

CURRENT LAW

P.L. 108–447, the Consolidated Appropriations Act of 2005, 

added provisions related to the comparison of data from the Secretary of the Treasury with data in the National Directory of New 

Hires for the purpose of collecting nontax debt owed to the federal 

government. 

COMMITTEE BILL

The Committee Bill makes technical changes to the Consolidated 

Appropriations Act of 2005 with respect to references to Title IV–

D provisions related to information comparisons and other disclosures. 

TITLE IV—CHILD WELFARE 

SECTION 401—EXTENSION OF AUTHORITY TO APPROVE

DEMONSTRATION PROJECTS

CURRENT LAW

Permits the HHS Secretary to approve waivers (state demonstration projects) that are likely to promote the objectives of the child 

welfare programs authorized under Title IV–B and Title IV–E. This 

authority is granted through March, 31, 2005. 

COMMITTEE BILL

Extends this authority through FY2010. 

SECTION 402—REMOVAL OF COMMONWEALTH OF PUERTO RICO IV–

E FUNDS FROM LIMITATION ON PAYMENTS

CURRENT LAW

Provides that, with the exception of certain bonus, loan and evaluation funding under Title IV–A, the total amount of funds Puerto 

Rico may receive under Title IV–A (TANF), Title IV–E (Foster 

Care, Adoption Assistance, Adoption Incentives, and independent 

living programs), and several other Titles (providing assistance to 

aged, disabled and blind) may not exceed a certain sum specified 

in the law. 

COMMITTEE BILL

The Committee Bill would exempt Title IV–E funding from this 

cap but never more than $6,250,000 in a given fiscal year and only 

if the amount of the Title IV–E funds claimed in the given year exceed funding for the same purposes in a given previous year. It also 

would provide the adoption incentive bonuses would not count 

against a territories’ overall cap. 

REASON FOR CHANGE

To provide Puerto Rico flexibility in their Title IV–E program. 

75

SECTION 403—AUTHORITY OF INDIAN TRIBES TO RECEIVE FEDERAL

FUNDS FOR FOSTER CARE AND ADOPTION ASSISTANCE

CURRENT LAW

Title IV–E foster care and adoption assistance programs may be 

operated by ‘‘states,’’ which are defined as each of the 50 United 

States, the District of Columbia, Puerto Rico, the Virgin Islands, 

Guam, and American Samoa. These plans must be in effect in all 

political subdivisions of the state and standards established for approving foster care homes must be ‘‘reasonably’’ in accord with recommended standards of national organizations concerned with foster care placement. States are reimbursed for foster care maintenance and adoption assistance payments made on behalf of eligible 

children at the applicable federal medical assistance percentage 

(ranging from 50 percent–83 percent); this percentage is based on 

the state’s per capita income. Administrative expenditures related 

to serving children eligible for federally reimbursed maintenance 

payments and adoption assistance are generally at 50 percent, with 

75 percent reimbursement for certain training costs. 

States that operate a foster care program must make foster care 

maintenance payments on behalf of eligible children removed from 

their homes if the child’s placement and care are the responsibility 

of the state child welfare agency or the responsibility of another 

public agency with whom the state child welfare agency has a currently effective agreement. 

COMMITTEE BILL

The bill allows, beginning in FY 2006, an Indian tribe or intertribal consortium to operate Title IV–E foster care and adoption assistance programs under the same provisions as those applying to 

states (with certain specified exceptions). Tribal plans will be allowed to define service areas where a plan is in effect and to grant 

approval of foster homes based on tribal standards that ensure the 

safety of, and accountability for, children placed in foster care. To 

establish the applicable federal reimbursement rate for eligible foster care maintenance and adoption assistance payments made 

under a tribal plan, the HHS Secretary is required to determine a 

tribe’s federal medical assistance percentage based on the per capita income of the service population defined in the Title IV–E tribal 

plan. 

The bill also permits an Indian tribe or intertribal consortium 

and a state to enter into a cooperative agreement for administering 

or paying funds under Title IV–E. Any cooperative agreement in effect prior to the enactment of this law remains in effect unless either party to the agreement chooses to revoke or modify the agreement, according to the terms of that agreement. 

The bill requires a state to make foster care payments on behalf 

of an eligible child whose placement and care is the responsibility 

of an Indian tribe or intertribal consortium if that tribe or consortium is not operating its own Title IV–E foster care program and 

it has a cooperative agreement with the state or it has submitted 

to the HHS Secretary a description of the arrangements made between the tribe or consortium and state for provision of child welfare services and protections required under Title IV–E. 

76

The HHS Secretary is required to issue regulations to carry out 

provisions related to the tribal IV–E plan within 1 year after enactment. Current TANF provisions concerning eligible entities in Alaska are applied for this program. 

REASON FOR CHANGE

Currently, tribes are able to operate child welfare programs and 

remain ineligible for direct federal funding to do so. The provisions 

in the Committee Bill provide tribes with direct access to IV–E 

funding and opportunities to create culturally relative foster care 

programs while respecting the importance of sovereignty. 

SECTION 404—TECHNICAL CORRECTIONS

CURRENT LAW

Provides that the HHS Secretary may not waive compliance with 

certain provisions under Title IV–B and IV–E, including those provisions under ‘‘Section 422(b)(9)’’. 

COMMITTEE BILL

Changes this reference to Section 422(b)(10). This technical correction is necessary because the cited language was renumbered in 

1997 (P.L. 105–33) without the necessary conforming amendment 

to this section. 

TITLE V—SUPPLEMENTAL SECURITY INCOME 

SECTION 501—REVIEW OF STATE AGENCY BLINDNESS AND

DISABILITY DETERMINATIONS

CURRENT LAW

The law has no provision requiring review by the Social Security 

Commissioner of state agency determinations of SSI eligibility on 

grounds of blindness or disability. It does require review of blindness or disability determinations for Disability Insurance (DI). 

COMMITTEE BILL

The Committee Bill requires the Social Security Commissioner to 

review state agency blindness and disability determinations for 

SSI. It calls for review of at least 25 percent of determinations 

made in FY2006 and 50 percent in FY2007 or thereafter. 

REASON FOR CHANGE

Supplemental Security Income (SSI) is designed to help aged, 

blind and disabled. The Committee finds that it helps people who 

have little or no income; and it provides cash to meet basic needs 

for food, clothing and shelter. SSI should be for those who qualify; 

not those who are ineligible. 

77

SECTION 502—TEMPORARY EXPANSION OF LENGTH OF TIME-LIMITED

ELIGIBILITY FOR QUALIFIED ALIENS FOR SUPPLEMENTAL SECURITY

INCOME BENEFITS

CURRENT LAW

Asylees and refugees (as well as Cuban/Haitian entrants, certain 

aliens whose deportation/removal is being withheld for humanitarian reasons, and Vietnam-born Amerasians fathered by U.S. citizens) are eligible for SSI for 7 years after entry/grant of such status. Under current law, such aliens are ineligible after 7 years unless they become naturalized citizens. 

COMMITTEE BILL

The Committee Bill extends the period of SSI eligibility for 7 to 

9 years for the period beginning with the date of enactment 

through September 30, 2008. 

REASON FOR CHANGE

The Committee Bill recognizes that some elderly and disabled 

refugees have been unable to obtain U.S. citizenship within 7 years 

due to a combination of processing delay, and, for asylees statutory 

caps on the number who can become permanent residents each 

year. 

TITLE VI—TRANSITIONAL MEDICAL ASSISTANCE 

SECTION 601—TRANSITIONAL MEDICAL ASSISTANCE

CURRENT LAW

The law requires transitional medical assistance (TMA)—from 6 

to 12 months—for those whose lose Medicaid eligibility because of 

increased income arising from work (higher wages or more hours 

of work). Authorization for 6–12 months of TMA expired on September 30, 2002, but was extended through March 31, 2005. (Permanent provisions of law require 4 months of transitional medical 

benefits to families who lose Medicaid eligibility because of income 

from child or spousal support or from earnings.) 

COMMITTEE BILL

The Committee Bill provides for the extension and simplification 

of the Transitional Medical Assistance Program (TMA). The Committee Bill provides for the option of continuous eligibility for 12 

months and the option of continuing coverage for up to an additional year. The Committee Bill provides for a state option to waive 

receipt of Medicaid for 3 of previous 6 months to qualify for TMA. 

The Committee Bill provides for additional provisions dealing with 

the collection and reporting of information, coordination and other 

improvements. 

REASON FOR CHANGE

The Committee Bill recognizes that Medicaid is an important 

part of the safety net for needy families, and that health care is 

a critical support for low-income families as they transition from 

78

welfare to work and self-sufficiency, particularly for families with 

entry-level employment. 

TITLE VII—EFFECTIVE DATE 

CURRENT LAW

Funding for TANF, mandatory child care, and abstinence education, along with the authority for Transitional Medicaid, expire 

on March 31, 2005. 

COMMITTEE BILL

Funding for TANF, mandatory child care, and abstinence education, along with the authority for Transitional Medicaid, is extended on current terms through September 30, 2005, except where 

explicitly provided for by this act. FY2005 funding for the High 

Performance Bonus is eliminated. 

Unless otherwise specified, provisions take effect on October 1, 

2005. However, if the Secretary determines that state legislation is 

required for a State TANF or Child Support plan to conform with 

the Act, the effective date is delayed to three months after the first 

day of the first calendar quarter beginning after the close of the 

first regular session of the legislature that begins after enactment 

of this Act. If the state has a 2-year legislative session, each year 

is to be considered a separate regular session.

III. VOTES OF THE COMMITTEE 

In compliance with paragraph 7(b) of Rule XXVI of the Standing 

Rules of the Senate, the following statements are made concerning 

the rollcall votes of the Committee’s consideration of the bill. 

Motion To Report the Bill 

The bill was ordered favorably reported by voice vote on March 

9, 2005. A quorum was present. No amendments were voted on. 

IV. REGULATORY IMPACT STATEMENT AND RELATED 

MATTERS 

A. REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following statement 

concerning the regulatory impact of the Personal Responsibility 

and Individual Development for Everyone Act (PRIDE). 

IMPACT ON INDIVIDUALS AND BUSINESS

In general, the bill provides grants to States and certain other 

entities to assist low-income families with children in moving toward self-sufficiency. Regulations are needed to implement these 

grants in specified areas but do not affect individuals or businesses, 

unless they choose to apply for such grants. 

IMPACT ON PERSONAL PRIVACY AND PAPERWORK

The bill provides grants to States and certain other entities to assist low-income families with children in moving toward self-sufficiency. In the context of seeking assistance, families may be asked 

79

about personal circumstances and to provide applications, including 

paperwork associated with their financial situation. The bill should 

not increase the amount of personal information and paperwork required.

V. BUDGET EFFECTS 

MARCH 25, 2005. 

Hon. CHARLES E. GRASSLEY, 

Chairman, Committee on Finance, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 667, the Personal Responsibility and Individual Development for Everyone Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Sheila Dacey (for federal costs), Leo Lex (for the state and local impact) and Molly Dahl 

(for the private-sector impact). 

Sincerely, 

DOUGLAS HOLTZ-EAKIN. 

Enclosure. 

S. 667—Personal Responsibility and Individual Development for 

Everyone Act 

Summary: S. 667, the Personal Responsibility and Individual Development for Everyone (PRIDE) Act would: • Reauthorize the Temporary Assistance for Needy Families 

(TANF) program at current funding levels (it would increase funding for some grants and establish several new grants, but also 

would eliminate funding for other related grants); • Increase funding for child care programs and the Social Services Block Grant (SSBG), and continue funding abstinence education programs at $50 million annually; • Make several changes to eligibility rules relating to the earned 

income credit and various child-related tax benefits. 

• Make several changes to the child support enforcement program, including allowing the distribution to families of more collections from child support payments; 

• Increase funding for the foster care program for Puerto Rico 

and for Indian tribes; 

• Require the Social Security Administration (SSA) to change its 

system of reviewing awards to certain disabled adults in the Supplemental Security Income (SSI) program and extend the eligibility 

of certain refugees for benefits in the SSI program; and 

• Extend by five years the requirement that state Medicaid programs provide transitional medical assistance (TMA) to certain 

Medicaid beneficiaries and allow states to simplify aspects of TMA 

administration.

S. 667 would extend the TANF and child care programs through 

2010. Those programs are scheduled to expire on June 30, 2005. 

Continuing the programs at their current funding levels would provide $88 billion for TANF and $14 billion for child care over the 

2005–2010 period. However, CBO already assumes that level of 

funding in its baseline for those programs, as specified in section 

257 of the Balanced Budget and Emergency Deficit Control Act of 

80

1985 (Deficit Control Act). Therefore the bill’s extension of those 

programs would have no cost relative to CBO’s baseline. 

CBO estimates that other provisions of S. 667 would increase di- rect spending by $45 million in 2005, by $10.8 billion over the 

2005–2010 period, and by $11.5 billion over the 2005–2015 period, 

relative to CBO’s baseline projections. It also would increase revenues by $606 million over the 2005–2010 period and by $1.2 billion 

over the 2005–2015 period. 

S. 667 also would authorize appropriations for new grant programs and for the administration of new functions in the SSI program. CBO estimates that appropriation of the authorized levels 

would result in outlays of $41 million in 2006, $1.2 billion over the 

2006–2010 period, and $1.7 billion over the 2006–2015 period. 

S. 667 would impose intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) by preempting state 

laws and by reducing the amount of child support collections that 

states could retain. The preemptions would impose no significant 

costs on state governments. The reduction in the amount of child 

support collections that states retain would be a mandate, and its 

cost would depend on the degree to which states could alter responsibilities within their child support enforcement programs to make 

up for that reduction. In total, states would face costs ranging from 

$50 million to $60 million per year from 2010 through 2015. The 

increased costs from all mandates in the bill would be below the 

threshold established in UMRA ($62 million in 2005, adjusted annually for inflation). 

Other provisions of the bill would significantly affect the way 

states administer their TANF and Medicaid programs, but because 

of the flexibility in those programs, the new requirements would 

not be intergovernmental mandates as defined in UMRA. In general, state, local, and tribal governments would benefit from the 

continuation of existing TANF grants, the creation of new grant 

programs, and broader flexibility and options in some areas. 

The bill contains a private-sector mandate as defined in UMRA. 

Section 321 would require the administrator of a group health plan 

to notify a state child support enforcement agency under certain 

circumstances when a child loses health care coverage. The cost of 

this mandate would not exceed the threshold established by UMRA 

($123 million in 2005, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 667 is shown in Table 1. For this estimate, CBO 

assumes that it will be enacted in fiscal year 2005. The costs of this 

legislation fall within budget functions 500 (education, training, 

employment, and social services), 550 (health), and 600 (income security). 

Basis of estimate: Most of PRIDE’s budgetary effects would stem 

from new direct spending. A portion of the new spending would be 

offset by savings, resulting in a net increase in direct spending of 

about $11.5 billion over the 2005–2015 period. The bill also would 

reduce federal revenues by an estimated $1.2 billion and increase 

discretionary spending by $1.7 billion over that period, assuming 

appropriation of the authorized amounts. 

S. 667 would extend the authorization for several programs, including the TANF and child care programs, through 2010. The Deficit Control Act directs CBO, in constructing its baseline projecVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00084 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
81

tions, to assume that such programs continue beyond their final 

year of authorization. In accordance, we assume that the TANF 

and child care programs and several provisions of the TANF program (such as healthy marriage grants, the contingency fund, and 

various research grants) continue beyond 2010. The legislation 

specifies that two provisions, supplemental grants for TANF and 

child care, should not be assumed to continue in the baseline after 

their final year of authorization, overriding the Deficit Control Act. 

DIRECT SPENDING AND REVENUES

Title I: TANF. S. 667 would reauthorize basic TANF grants 

through 2010 at the current funding level of $16.6 billion. By law, 

that amount is assumed to continue in CBO’s current baseline; 

thus, enacting S. 667 would not change basic TANF grants relative 

to that baseline. The TANF program and related grants were originally authorized through fiscal year 2002. They have been extended several times in subsequent legislation, most recently 

through June 30, 2005, by HR. 1160, which cleared the Congress 

on March 15, 2005. 

Title I would alter the funding of some grants related to TANF 

and make several other changes to program rules and reporting requirements. That title would also increase funding for the child 

care and SSBG programs and would alter eligibility rules relating 

to the earned income credit and various child-related tax benefits. 

CBO estimates that enacting title I would decrease direct spending 

by $5 million in 2005 and increase direct spending by $5.1 billion 

over the 2005–2015 period, relative to CBO’s baseline projections. 

In addition, title I would increase revenues by $1.2 billion over that 

period (see Table 2).

82

TABLE 1.—ESTIMATED COSTS OF S. 667, THE PERSONAL RESPONSIBILITY AND INDIVIDUAL DEVELOPMENT FOR EVERYONE ACT 

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015

CHANGES IN DIRECT SPENDING 

Increase Funding for Child Care: 

Budget Authority ........................................................................................................ 0 900 1,000 1,200 1,300 1,600 200 200 200 200 200 7,000 Estimated Outlays ..................................................................................................... 0 494 917 1,198 1,341 1,496 569 280 215 200 200 6,910 

Modify Tax Credits: 

Estimated Budget Authority ...................................................................................... ¥5 ¥97 ¥563 ¥541 ¥530 ¥517 ¥470 ¥415 ¥424 ¥432 ¥451 ¥4,445 

Estimated Outlays ..................................................................................................... ¥5 ¥97 ¥563 ¥541 ¥530 ¥517 ¥470 ¥415 ¥424 ¥432 ¥451 ¥4,445 

Extend and Simplify Transitional Medicaid: 

Estimated Budget Authority ...................................................................................... 0 433 791 906 1,015 1,120 757 41 ¥2 ¥13 ¥2 5,046 

Estimated Outlays ..................................................................................................... 0 422 774 898 1,012 1,116 756 42 3 13 3 5,039 

Other Changes to Direct Spending: 

Estimated Budget Authority ...................................................................................... ¥15 808 760 803 751 475 141 125 82 50 10 3,992 

Estimated Outlays ..................................................................................................... 50 593 624 807 762 564 262 144 83 49 10 3,946 

Total Direct Spending: 

Estimated Budget Authority ...................................................................................... ¥20 2,044 1,988 2,368 2,536 2,678 628 ¥49 ¥144 ¥195 ¥243 11,593 

Estimated Outlays ..................................................................................................... 45 1,412 1,752 2,362 2,585 2,659 1,117 51 ¥124 ¥170 ¥238 11,450

CHANGES IN REVENUES 

Estimated Revenues ........................................................................................................... 1 32 146 144 142 141 162 107 111 111 120 1,217

NET CHANGES IN DIRECT SPENDING AND REVENUES (EFFECT ON DEFICITS) 

Estimated Increase or Decrease (¥) in Deficit ............................................................... 44 1,380 1,606 2,218 2,443 2,518 955 ¥57 ¥235 ¥281 ¥358 10,233

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Additional Spending Subject to Appropriations: 

Estimated Authorization Level ................................................................................... 0 329 332 335 336 336 16 16 17 17 18 1,752Estimated Outlays ..................................................................................................... 0 41 205 361 338 288 296 155 30 17 18 1,749

Memorandum: Changes in Direct Spending from Program Extensions in S. 667 That Are Already Assumed in CBO’s Baseline 

TANF: 

Estimated Budget Authority Estimated Outlays ....................................................... 3,588 16,870 16,875 16,875 16,875 16,875 0 0 0 0 0 87,958 Estimated Outlays ..................................................................................................... 2,230 14,530 16,930 17,300 17,000 16,875 3,038 55 0 0 0 87,958 

Child Care: 

Estimated Budget Authority ...................................................................................... 398 2,717 2,717 2,717 2,717 2,717 0 0 0 0 0 13,983 Estimated Outlays ..................................................................................................... 287 2,044 2,574 2,694 2,717 2,717 761 163 26 0 0 13,983 

TANF = Temporary Assistance for Needy Families. 

83

State Family Assistance Grant. Section 102 would extend the 

state family assistance grant program through 2010 at the current 

funding level of $16.6 billion. The extension would provide more 

than $80 billion in additional direct spending over the 2006–2010 

period. As noted above, CBO already assumes funding at that level 

in its baseline in accordance with rules for constructing baseline 

projections, as set forth in section 257 of the Deficit Control Act. 

Therefore, CBO estimates this provision would have no effect on direct spending over the 2006–2015 period, relative to the baseline 

projections.

84

TABLE 2.—DIRECT SPENDING EFFECTS OF TITLE I: TANF 

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015

Eliminate Out-of-Wedlock Bonus: 

TANF: 

Estimated Budget Authority ............................................................................. 0 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥1,000 

Estimated Outlays ............................................................................................ 0 0 ¥57 ¥119 ¥105 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥881 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 0 1 1 1 1 1 1 1 1 1 9 Estimated Outlays ............................................................................................ 0 0 1 1 1 1 1 1 1 1 1 9 

Subtotal: 

Estimated Budget Authority .................................................................... 0 ¥100 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥991 

Estimated Outlays ................................................................................... 0 0 ¥56 ¥118 ¥104 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥872 

Establish Healthy Marriage Promotion Grant: 

Budget Authority ............................................................................................... 0 100 100 100 100 100 100 100 100 100 100 1,000 Estimated Outlays ............................................................................................ 0 1 28 74 124 122 111 100 100 100 100 860 

Continue Supplemental Grant at $319 Million Through 2009: 

TANF: 

Budget Authority ............................................................................................... 0 319 319 319 319 0 0 0 0 0 0 1,276 Estimated Outlays ............................................................................................ 0 262 311 326 319 57 1 0 0 0 0 1,276 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 ¥3 ¥4 4 ¥4 ¥1 0 0 0 0 0 ¥16 

Estimated Outlays ............................................................................................ 0 ¥3 ¥4 4 ¥4 ¥1 0 0 0 0 0 ¥16 

Subtotal: 

Estimated Budget Authority .................................................................... 0 316 315 315 315 ¥1 0 0 0 0 0 1,260 Estimated Outlays ................................................................................... 0 259 307 322 315 56 1 0 0 0 0 1,260 

Reduce High-Performance Bonus: 

TANF: 

Budget Authority ............................................................................................... ¥200 ¥150 ¥150 ¥150 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥1,350 

Estimated Outlays ............................................................................................ 0 ¥82 ¥168 ¥211 ¥161 ¥109 ¥100 ¥100 ¥100 ¥100 ¥100 ¥1,231 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 1 2 3 2 1 1 1 1 1 1 14Estimated Outlays ............................................................................................ 0 1 2 3 2 1 1 1 1 1 1 14 

Subtotal: 

Estimated Budget Authority .................................................................... ¥200 ¥149 ¥148 ¥147 ¥98 ¥99 ¥99 ¥99 ¥99 ¥99 ¥99 ¥1,336 

Estimated Outlays ................................................................................... 0 ¥81 ¥166 ¥208 ¥159 ¥108 ¥99 ¥99 ¥99 ¥99 ¥99 ¥1,217 

Modify Contingency Fund: 

Estimated Budget Authority ...................................................................................... 0 13 ¥11 ¥8 ¥2 ¥4 ¥7 ¥7 ¥9 ¥9 ¥10 ¥54 

85

Estimated Outlays ..................................................................................................... 0 13 ¥11 ¥8 ¥2 ¥4 ¥7 ¥7 ¥9 ¥9 ¥10 ¥54 

Reserve Contingency Funding for Tribes: 

Budget Authority ........................................................................................................ 0 25 0 0 0 0 5 5 5 5 5 50 Estimated Outlays ..................................................................................................... 0 4 5 5 5 5 5 5 5 5 5 49 

Increase Transfer Authority from TANF to SSBG: 

Budget Authority ........................................................................................................ 0 0 0 0 0 0 0 0 0 0 0 0 Estimated Outlays ..................................................................................................... 0 70 ¥2 ¥56 ¥12 0 0 0 0 0 0 0 

Increase SSBG Funding: 

Budget Authority ........................................................................................................ 0 200 200 200 200 200 0 0 0 0 0 1,000 Estimated Outlays ..................................................................................................... 0 164 196 200 200 200 36 4 0 0 0 1,000 

Increase Tribal JOBS Funding: 

Budget Authority ........................................................................................................ 0 5 5 5 5 5 5 5 5 5 5 50 Estimated Outlays ..................................................................................................... 0 1 4 5 5 5 5 5 5 5 5 45 

Establish Tribal TANF Improvement Grants: 

Budget Authority ........................................................................................................ 0 80 0 0 0 0 0 0 0 0 0 80 Estimated Outlays ..................................................................................................... 0 8 26 27 13 5 1 0 0 0 0 80 

Establish Secretary’s Fund for Research, Demonstration, and National Studies: 

Budget Authority ........................................................................................................ 100 100 100 100 100 100 100 100 100 100 100 1,100 Estimated Outlays ..................................................................................................... 0 20 105 148 120 109 101 100 100 100 100 1,003 

Extend Funding of Studies and Demonstrations: 

Budget Authority ........................................................................................................ 0 15 15 15 15 15 15 15 15 15 15 150 Estimated Outlays ..................................................................................................... 0 1 10 15 15 15 15 15 15 15 15 131 

Fund Indicators of Child Well-being: 

Budget Authority ........................................................................................................ 0 10 10 10 10 10 10 10 10 10 10 100 Estimated Outlays ..................................................................................................... 0 1 6 11 12 11 10 10 10 10 10 91 

Fund Research in Tribal Welfare Programs: 

Budget Authority ........................................................................................................ 0 2 0 0 0 0 0 0 0 0 0 2 Estimated Outlays ..................................................................................................... 0 * 1 1 0 0 0 0 0 0 0 2 

Increase Funding for Child Care: 

Budget Authority ........................................................................................................ 0 200 200 200 200 200 200 200 200 200 200 2,000 Estimated Outlays ..................................................................................................... 0 144 188 198 200 200 200 200 200 200 200 1,930 

Establish Supplemental Grant for Child Care: 

Budget Authority ........................................................................................................ 0 700 800 1,000 1,100 1,400 0 0 0 0 0 5,000 Estimated Outlays ..................................................................................................... 0 350 729 1,000 1,141 1,296 369 80 15 0 0 4,980 

Change EIC Identification Requirements: 

Estimated Budget Authority ...................................................................................... 0 0 ¥399 ¥377 ¥365 ¥352 ¥310 ¥295 ¥302 ¥312 ¥326 ¥3,038 

Estimated Outlays ..................................................................................................... 0 0 ¥399 ¥377 ¥365 ¥352 ¥310 ¥295 ¥302 ¥312 ¥326 ¥3,038 

Change Eligibility for the Child Tax Credit: 

Estimated Budget Authority ...................................................................................... 0 0 ¥65 ¥63 ¥62 ¥60 ¥60 ¥8 ¥9 ¥8 ¥11 ¥346 

Estimated Outlays ..................................................................................................... 0 0 ¥65 ¥63 ¥62 ¥60 ¥60 ¥8 ¥9 ¥8 ¥11 ¥346 

86

TABLE 2.—DIRECT SPENDING EFFECTS OF TITLE I: TANF—Continued

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015

Clarify Eligibility for Child-Related Tax Benefits: 

Estimated Budget Authority ...................................................................................... ¥5 ¥97 ¥99 ¥101 ¥103 ¥105 ¥100 ¥112 ¥113 ¥112 ¥114 ¥1,061 

Estimated Outlays ..................................................................................................... ¥5 ¥97 ¥99 ¥101 ¥103 ¥105 ¥100 ¥112 ¥113 ¥112 ¥114 ¥1,061 

Establish Fatherhood Grants: 

Budget Authority ........................................................................................................ 0 50 50 50 50 50 0 0 0 0 0 250 Estimated Outlays ..................................................................................................... 0 8 35 55 55 50 38 9 0 0 0 250 

Create Resource Center for Teen Pregancy Prevention: 

Budget Authority ........................................................................................................ 0 5 0 0 0 0 0 0 0 0 0 5 Estimated Outlays ..................................................................................................... 0 1 1 1 1 1 0 0 0 0 0 5 

Effects of Title I Interactions on TANF: 

Budget Authority ........................................................................................................ 0 0 0 0 0 0 0 0 0 0 0 0 Estimated Outlays ..................................................................................................... 0 0 ¥91 71 20 0 0 0 0 0 0 0 

Total Changes in Direct Spending: Title I: 

Estimated Budget Authority ...................................................................................... ¥105 1,475 974 1,200 1,366 1,360 ¥240 ¥185 ¥196 ¥204 ¥224 5,221 

Estimated Outlays ..................................................................................................... ¥5 867 752 1,202 1,419 1,347 217 ¥92 ¥181 ¥204 ¥224 5,098

CHANGES IN REVENUES 

Change EIC Identification Requirements 0 4 40 40 38 39 66 64 67 66 72 496 Change Eligibility for the Child Tax Credit 0 0 14 14 14 14 13 5 5 5 5 89 Clarity Eligibility for Child-Related Tax Benefits 1 28 92 90 90 88 83 38 39 40 43 632

Total Changes to Estimated Revenues ..................................................................... 1 32 146 144 142 141 162 107 111 111 120 1,217 

TANF = Temporary Assistance for Needy Families. SSBG = Social Services Block Grant. * = costs or savings of less than $500,000.Notes.—Components may not sum to total because of rounding. 

87

Healthy Marriage Promotion Grants. Section 103 would eliminate 

an out-of-wedlock birth grant program, but would create a new 

grant program to promote healthy marriages. CBO projects $1 billion in funding for out-of-wedlock birth grants, $100 million annually over the 2006–2015 period, in accordance with the Deficit Control Act. We estimate that eliminating this program would reduce 

outlays by $881 million over the 2007–2015 period, relative to 

CBO’s baseline projections. The impact on outlays of the reduction 

in funding is delayed (no effect in 2006) because the grants are 

awarded in the last days of a fiscal year. CBO expects the reduced 

funding would cause states to decrease benefits for families that 

also receive food stamps. As a result, the Food Stamp payment to 

those families would rise, and the cost of Food Stamp benefits 

would grow by an estimated $9 million over the 2007–2015 period. 

Section 103 would establish a new competitive grant to states 

and Indian tribes for developing and implementing programs to 

promote and support marriage. The bill would appropriate $100 

million annually for grants that could be used for a variety of activities, including public advertising campaigns, education and 

training programs on topics related to marriage, marriage mentoring programs, and programs to reduce disincentives to marriage 

in means-tested programs. The grants could be used to cover up to 

50 percent of the cost of the new programs. CBO expects that the 

grants would be spent slowly in the first few years because the Department of Health and Human Services (HHS) would need to set 

up a system for awarding grants, and states would need to set up 

programs to use the funds. Estimated outlays would total $1 million in 2006 and $860 million over the 2006–2015 period. 

Supplemental Grants. Section 104 would provide $319 million annually for the supplemental grants for population increases over 

the 2006–2009 period. (These grants are awarded to states that 

have lower-than-average TANF grants per poor person or rapidly 

increasing populations.) Supplemental grants are currently funded 

for the first three quarters of fiscal year 2005 at $255 million, consistent with an annual level of $319 million. (Section 702 of the bill 

would fund the grants for the final quarter of 2005.) Current law 

specifies that supplemental grants should not be assumed to continue in baseline projections after June 30, 2005, overriding the 

continuation rules specified in section 257 of the Deficit Control 

Act. 

CBO estimates that states would spend $262 million in 2006 and 

$1.3 billion over the 2006–2011 period. We expect that some of the 

additional funding would be used to increase benefits to families 

that also receive food stamps. As a result, the Food Stamp payment 

to those families would fall and the cost of Food Stamp benefits 

would decline by an estimated $16 million over the 2006–2010 period. 

Bonuses for High-Performing States. Section 105 would reduce 

funding for a bonus to high-performing states and refocus the 

bonus toward rewarding performance in improving job outcomes for 

TANF recipients. The bonus in current law rewards states for moving TANF recipients into jobs, providing support for low-income 

working families, and increasing the percentage of children who reside in married-couple families. 

88

The Secretary would develop criteria for the new bonus—the 

Bonus to Reward Employment Achievement—in consultation with 

the states. The criteria would measure workplace attachment and 

advancement. The bill would make $450 million available for bonuses averaging $50 million annually over the 2006–2008 period 

and $100 million annually over the 2009–2011 period. Pursuant to 

the Deficit Control Act, CBO’s baseline projections include $200 

million a year in funding for bonuses. Therefore, the net effect of 

section 105 would be a reduction in budget authority of $1.35 billion over the 2005–2015 period. Because the bonuses are usually 

granted in the last days of a fiscal year, TANF spending would fall 

by only $1.2 billion over the 10-year period. 

CBO expects the reduced TANF funding would cause states to 

decrease benefits to families that also receive food stamps. As a result, the Food Stamp payment to those families would rise and the 

cost of Food Stamp benefits would grow, by an estimated $14 million over the 10-year period. 

Contingency Fund. Section 106 would significantly alter the Contingency Fund for State Welfare Programs. Under current law, the 

contingency fund provides additional federal funds to states with 

high and increasing unemployment rates or significant growth in 

Food Stamp participation. To be eligible, states are required to 

maintain their spending at 100 percent of their 1994 levels and to 

match federal payments. CBO estimates that states will draw federal funds totaling between $30 million and $40 million annually 

under current law. 

Section 106 would change the eligibility conditions, grant determination, and state spending requirements for the contingency 

fund. It would establish new thresholds of growth in the unemployment rate and Food Stamp participation for states to qualify for 

funds. The amount of funding a state would receive would be derived by multiplying the state’s caseload increase over the level two 

years prior to its qualification, its TANF benefit level for a family 

of three, and its Medicaid matching rate. A state with high unspent 

TANF balances from prior years would not be eligible for payments 

from the contingency fund. In contrast to current law, a state 

would not need to maintain a high level of historic spending or put 

up any matching funds in order to receive a contingency fund 

grant. 

Based on CBO’s projections of unemployment rates, Food Stamp 

participation, TANF caseloads, and state TANF spending, CBO estimates that states would qualify for $13 million more from the 

contingency fund in 2006, but between $2 million and $11 million 

per year less over the 2007–2015 period. The net effect of the 

changes would be a reduction in outlays of $54 million over the 10-

year period. Section 106 would also appropriate $25 million over 

the 2006–2010 period for making payments to Indian tribes that 

experience increased economic hardship. Those payments would increase outlays by $5 million annually. 

Social Services Block Grant. Section 107 would allow states to 

continue to transfer up to 10 percent of TANF funds to SSBG. The 

1996 welfare law that established the TANF program set the level 

of the transfer authority at 10 percent. Subsequent legislation permanently lowered the authority to 4.25 percent. However, the Congress has restored the authority to 10 percent every year since, 

89

most recently through September 30, 2005. In the absence of further legislation, the authority will fall to 4.25 percent after that 

date. 

In recent years, states have transferred about $1 billion annually. Maintaining the transfer authority at the higher level would 

make it easier for states to spend their TANF grants and would accelerate spending relative to current law. Based on recent state 

transfers, CBO expects that states would transfer an additional 

$340 million annually under this provision, but because some of 

this money would have been spent within the TANF program anyway, only $70 million of additional spending would occur in 2006. 

Because states would have found alternate ways to spend the funds 

in later years, the increase in spending in 2006 would be offset by 

decreased spending in subsequent years. Thus, this provision would 

have no net impact on TANF spending over the 2006–2015 period 

as a whole. 

Section 107 would also increase the amount of funding for the so- cial services block grant by $200 million annually over the 2006–

2010 period, adding $1.0 billion to outlays over the 2006–2012 period. 

Work Participation Requirements. Section 109 would require 

states to have an increasing percentage of TANF recipients participate in work activities while receiving cash assistance. It would 

generally maintain current penalties for the failure to meet those 

requirements. Those penalties can total up to 5 percent of the 

TANF block grant amount for the first failure to meet work requirements and increase with each subsequent failure. CBO estimates that any penalties for failing to meet the new requirements 

would total less than $500,000 annually. 

Direct Funding and Administration by Indian Tribes. Section 113 

would increase grants to tribes to operate employment programs 

from the current $7.6 million level to $12.6 million annually. The 

new funding would raise outlays by $45 million over the 2006–2015 

period. 

Section 113 would also appropriate $80 million in 2006 for tribal 

improvement grants. The Secretary of HHS would carry out a program of technical assistance and competitive grants to Indian 

tribes focused on improving tribes’ capacity to deliver human services and promote economic development. CBO estimates implementing the program would cost $8 million in 2006 and $80 million 

over the 2006–2011 period. 

Research, Demonstrations, and Technical Assistance. Section 114 

would make funds available to the Secretary of Health and Human 

Services to conduct and support research and demonstration 

projects and provide technical assistance, primarily on the promotion of marriage. The program would be funded at $100 million 

annually. Because the 2005 grant would not be available until late 

in the year, CBO expects an insignificant amount would be spent 

in 2005. Implementing the provision would boost spending by $20 

million in 2006 and $1.0 billion over the 2006–2015 period. 

Section 114 also would continue annual grants of $15 million for 

research. Specifically, it would fund research on the effects, costs, 

and benefits of state TANF programs and innovative approaches 

for reducing welfare dependency and increasing the well-being of 

children. It also could fund evaluations of TANF programs initiated 

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by the states and ongoing demonstration projects approved before 

1996. Based on recent spending patterns, CBO estimates that this 

provision would increase outlays by $1 million in 2006 and by $131 

million over the 2006–2015 period. Section 114 also would provide $10 million annually to the Secretary of HHS to develop comprehensive indicators to assess the 

well-being of children in each state. CBO estimates that this provision would increase outlays by $1 million in 2006 and by $91 million over the 2006–2015 period. Finally, the bill would provide $2 

million in 2006 for research on tribal welfare programs. 

Child Care. The child care entitlement to states provides funding 

to states for child care subsidies to low-income families and for 

other activities. Section 116 would extend the grant program 

through 2010, providing funding of $14 billion over the 2006–2010 

period. CBO already assumes funding of $2.717 billion annually in 

its baseline in accordance with the Deficit Control Act, so the extension would have no effect on direct spending relative to the 

baseline projection. Section 116 would also raise annual funding by 

$200 million to $2.917 billion. CBO estimates that, as a result, outlays would increase by $144 million in 2006 and by $1.9 billion 

over the 10-year period relative to its baseline projections. 

Section 116 would also create a new supplemental grant for child care, with funding of $700 million in 2006, rising to $1.4 billion in 

2010. States would be required to put up some matching funds in 

2009 and 2010. Based on current spending patterns, CBO expects 

that some states would not put up the full state match, so that a 

small amount would lapse. The bill specifies that the supplemental 

grants should not be assumed to continue in baseline projections 

after 2010, overriding the continuation rules specified in section 

257 of the Deficit Control Act. Under that assumption, CBO estimates that outlays would increase by $350 million in 2006 and by 

nearly $5.0 billion over the 10-year period.

Tax Credits. The bill would make several changes to eligibility 

rules relating to the earned income tax credit and various child-related tax benefits. In total, JCT and CBO estimate those changes 

would increase revenues by $606 million over the 2005–2010 period 

and by about $1.2 billion over the 2005–2015 period. Because some 

or all of each of those changes applies to refundable tax credits, 

which are recorded in the budget as outlays, CBO also estimate 

that enacting the bill would reduce direct spending by about $4.4 

billion over the 2005–2015 period. 

Change Identification Requirements for the Earned Income Tax 

Credit. The bill would change the type of identification that taxpayers must possess in order to claim the earned income tax credit. 

To receive the credit, taxpayers would be required to possess a Social Security number that authorizes them to work in the United 

States. CBO estimates that the change would reduce outlays for 

the earned income tax credit by about $3.0 billion over the 2005–

2015 period and increase revenues by nearly $500 million over the 

same period. 

This provision was enacted in the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996, but the legislative 

language contained a drafting oversight that negated its effect. For 

scorekeeping purposes, JCT concluded that the provision should 

not be credited with reducing outlays and increasing revenues beVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00094 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
91

cause it is a technical correction necessary to carry out the original 

intent of the enacted provision and the original estimate reflected 

the intent of the legislation. However, CBO’s baseline budget projections reflect current law as enacted and implemented, and the 

change made by S. 667 would affect future outlays and receipts relative to CBO’s baseline projections. Therefore, CBO estimates a 

budgetary effect from the provision in S. 667, using an estimate of 

the resulting baseline change provided by JCT. 

Change Eligibility for the Child Tax Credit. The bill would prohibit certain taxpayers from claiming the child tax credit. Currently, taxpayers living abroad may elect to exclude foreign earned 

income and qualifying housing expenses from their gross income 

and still receive the child credit. Under S. 667, taxpayers who 

choose to exclude such income would no longer be eligible to receive 

the credit. According to JCT, federal revenues would increase by an 

estimated $89 million over the 2007–2015 period as a result. Outlays from the refundable portion ofthe credit would decrease by an 

estimated $346 million over the same period. 

Clarify Eligibility Rules for Child-Related Tax Benefits. S. 667 

would clarify the rules of eligibility of siblings and other family 

members for child-related tax benefits. For example, the bill would 

clarify that if a parent resides with a child for more than half of 

the year, then generally only that parent could claim the child for 

child-related tax benefits. If no parent were able to claim the child 

for such purposes, another taxpayer would be allowed to claim the 

child, provided all other criteria are met. JCT estimates that making those changes would increase federal revenues by $1 million in 

2005 and by $632 million over the 2005–2015 period. JCT also estimates that outlays for the refundable credits would decrease by 

about $1.1 billion between 2005 and 2015. 

Fatherhood Grants. Section 118 would establish two new grant 

programs to promote responsible fatherhood and would appropriate 

$50 million annually over the 2006–2010 period. (Section 118 

would also authorize appropriations of an additional $26 million 

annually.) CBO estimates that implementing the programs would 

increase direct spending by $8 million in 2006 and $250 million 

over the 2006–2015 period. 

Teen Pregnancy Prevention Resource Center. Section 119 would 

appropriate $5 million for 2006 to establish a resource center to 

provide information and technical assistance on reducing teen pregnancy. CBO estimates implementing the program would cost $1 

million annually over the 2006–2010 period. 

Interactions. CBO estimates that several provisions in title I 

would accelerate the rate of spending of prior-year balances in the 

TANF program. Provisions that would increase the transfer authority to SSBG, eliminate the out-of-wedlock grant, and reduce the 

high-performance bonus would each induce states to spend uncommitted TANF funds from prior years sooner than under current 

law. However, those combined effects would exceed the amount of 

uncommitted TANF funds. Consequently, the budgetary effect of 

all the provisions enacted together would be smaller than the sum 

of the estimated effects for the individual provisions. CBO estimates that those interactions would lower projected TANF spending in 2007 by $91 million, relative to the sum of the provisions estimated individually, but raise it by the same amount over the 

92

2008–2009 period. Thus, there would be no net impact on TANF 

spending over the 10-year period as a whole. 

Title II: Abstinence Education. S. 667 would extend the authorization for abstinence education grants and provide $50 million annually over the 2006–2010 period. It would make a slight change 

to the formula for determining state allotments. Under the bill, 

funds would be divided only among those states that applied for 

them. Current allotments are determined by dividing available 

funds among all states and territories, regardless of whether they 

submit an application. In addition, any unspent funds allocated to 

individual states could be periodically reallocated by the Secretary. 

Because projected spending in 2010 does not exceed $50 million, 

CBO does not assume that this program would be extended beyond 

its specific authorization. 

Title III: Child Support. S. 667 would change many aspects of the 

operation and financing of the child support program. It would 

allow (and in one case, require) states to share more child support 

collections with current and former recipients of TANF, thereby reducing the amount the federal and state governments would recoup 

from previous TANF benefit payments. (The federal government’s 

share of child support collections is 55 percent, on average.) It 

would require states to periodically update child support orders 

and expand the use of certain enforcement tools. It would provide 

increases in funding for HHS and for grants that facilitate noncustodial parent access to their children. Finally, title III would require states to change the way they seek health coverage for children, forgive certain penalties on states, and allow Texas to continue to operate under a waiver of program rules. Overall, CBO estimates that enacting title III would increase direct spending by $5 

million in 2005 and $1.8 billion over the 2005–2015 period (see 

Table 3). 

Distribute More Collections to Current TANF Recipients. When a 

family applies for TANF, it assigns to the state any rights the family has to child support collections. While the family receives assistance, the state uses any collections it receives to reimburse itself 

and the federal government for TANF payments. Those reimbursements to the federal government are recorded as offsetting receipts 

(a credit against direct spending). States may choose to give some 

ofthe child support collected to families, but states must finance 

those payments out of their share of collections. 

Section 301 would allow states to pay up to $400 each month of 

child support to a family receiving assistance (up to $600 to a family with two or more children), without turning over to the federal 

government its share of those payments, beginning 18 months after 

enactment of the bill. The state could not count the child support 

as income in determining the families’ benefits under the TANF 

program. 

In recent years, states with about two-thirds of child support collections shared some of those collections with families receiving 

TANF. CBO expects states would continue to share at least that 

amount, and under S. 667 the federal government would bear part 

of that cost. In addition, based on information from state child-support officials and other policy experts, CBO expects that states with 

about one-third of collections would choose to institute a policy of 

sharing the first $50 per month collected, or, if they already have 

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such a policy, to increase the amount of child support they share 

with families on assistance. CBO anticipates that states would institute those increases slowly and that the increases would not be 

fully effective until 2010. Based on HHS data for child support and 

information supplied by state officials, CBO expects that states 

would raise payments to families in 2010 from the $104 million anticipated under current practices to $161 million under S. 667. 

CBO estimates that federal offsetting receipts (from reimbursements) would fall by $45 million in 2007, $88 million in 2010, and 

$753 million over the 2007–2015 period.

94

TABLE 3.—DIRECT SPENDING EFFECTS OF TITLE III: CHILD SUPPORT 

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015 

Distribute More Collections to Current TANF Families: 

Child Support Collections: 

Estimated Budget Authority ............................................................................. 0 0 45 69 79 88 90 92 94 97 99 753 Estimated Outlays ............................................................................................ 0 0 45 69 79 88 90 92 94 97 99 753 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 0 ¥2 ¥6 ¥10 ¥14 ¥14 ¥14 ¥15 ¥15 ¥15 ¥105 

Estimated Outlays ............................................................................................ 0 0 ¥2 ¥6 ¥10 ¥14 ¥14 ¥14 ¥15 ¥15 ¥15 ¥105 

Subtotal: 

Estimated Budget Authority .................................................................... 0 0 43 63 69 74 76 78 79 82 84 648 Estimated Outlays ................................................................................... 0 0 43 63 69 74 76 78 79 82 84 648 

Distribute More Past-Due Support to Current and Former TANF Families: 

Child Support Collections: 

Estimated Budget Authority ............................................................................. 0 0 34 70 106 183 187 191 195 200 204 1,370Estimated Outlays ............................................................................................ 0 0 34 70 106 183 187 191 195 200 204 1,370 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 0 ¥I ¥3 ¥5 ¥6 ¥7 ¥7 ¥7 ¥7 ¥7 ¥50 

Estimated Outlays ............................................................................................ 0 0 ¥I ¥3 ¥5 ¥6 ¥7 ¥7 ¥7 ¥7 ¥7 ¥50 

Student Loans: 

Estimated Budget Authority ............................................................................. 5 * * * * * * * * * * 5 Estimated Outlays ............................................................................................ 5 * * * * * * * * * * 5 

Subtotal: 

Estimated Budget Authority .................................................................... 5 0 33 67 101 177 180 184 188 193 197 1,325 

Estimated Outlays ................................................................................... 5 0 33 67 101 177 180 184 188 193 197 1,325 

Require Triennial Update of Child Support Orders: 

Administrative Costs: 

Estimated Budget Authority ............................................................................. 0 0 0 15 15 12 12 13 13 13 13 106 

Estimated Outlays ............................................................................................ 0 0 0 15 15 12 12 13 13 13 13 106 

Child Support Collections: 

Estimated Budget Authority ............................................................................. 0 0 0 ¥5 ¥14 ¥20 ¥20 ¥19 ¥19 ¥19 ¥20 ¥136 

Estimated Outlays ............................................................................................ 0 0 0 ¥5 ¥14 ¥20 ¥20 ¥19 ¥19 ¥19 ¥20 ¥136 

Food Stamps: 

Estimated Budget Authority ............................................................................. 0 0 0 ¥I ¥2 ¥2 ¥2 ¥2 ¥2 ¥3 ¥3 ¥17 

Estimated Outlays ............................................................................................ 0 0 0 ¥I ¥2 ¥2 ¥2 ¥2 ¥2 ¥3 ¥3 ¥17 

Medicaid: 

Estimated Budget Authority ............................................................................. 0 0 0 ¥2 ¥6 ¥10 ¥10 ¥8 ¥7 ¥7 ¥8 ¥58 

95

Estimated Outlays ............................................................................................ 0 0 0 ¥2 ¥6 ¥10 ¥10 ¥8 ¥7 ¥7 ¥8 ¥58 

Subtotal: 

Estimated Budget Authority .................................................................... 0 0 0 7 ¥7 ¥20 ¥20 ¥16 ¥15 ¥16 ¥18 ¥105 Estimated Outlays ................................................................................... 0 0 0 7 ¥7 ¥20 ¥20 ¥16 ¥15 ¥16 ¥18 ¥105 

Reduce Threshold for Passport Denial to $2,500: 

Estimated Budget Authority ...................................................................................... 0 0 ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥9 

Estimated Outlays ..................................................................................................... 0 0 ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥I ¥9 

Withhold Child Support from Social Security Disability Payments: 

Estimated Budget Authority ...................................................................................... 0 0 ¥3 ¥4 ¥4 ¥4 ¥5 ¥5 ¥6 ¥6 ¥6 ¥43 

Estimated Outlays ..................................................................................................... 0 0 ¥3 ¥4 ¥4 ¥4 ¥5 ¥5 ¥6 ¥6 ¥6 ¥43 

Maintain Funding for Technical Assistance and Federal Parent-Locator Service: 

Estimated Budget Authority ...................................................................................... 0 2 2 I 0 0 0 0 0 0 0 5 Estimated Outlays ..................................................................................................... 0 2 2 I 0 0 0 0 0 0 0 5

Allow Federal Seizure of Accounts in Multi-State Financial Institutions: 

Administrative Costs: 

Estimated Budget Authority ............................................................................. 0 2 2 0 0 0 0 0 0 0 0 4 Estimated Outlays ............................................................................................ 0 2 2 0 0 0 0 0 0 0 0 4 

Child Support Collections: 

Estimated Budget Authority ............................................................................. 0 0 ¥I ¥3 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥39 

Estimated Outlays ............................................................................................ 0 0 ¥I ¥3 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥39 

Subtotal: 

Estimated Budget Authority .................................................................... 0 2 I ¥3 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥35 

Estimated Outlays ................................................................................... 0 2 I ¥3 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥5 ¥35 

Match Databases of Insurance Claims: 

Administrative Costs: 

Estimated Budget Authority ............................................................................. 0 2 2 0 0 0 0 0 0 0 0 4 Estimated Outlays ............................................................................................ 0 2 2 0 0 0 0 0 0 0 0 4 

Child Support Collections: 

Estimated Budget Authority ............................................................................. 0 0 0 ¥2 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥30 

Estimated Outlays ............................................................................................ 0 0 0 ¥2 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥30 

Subtotal: 

Estimated Budget Authority .................................................................... 0 2 2 ¥2 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥26 

Estimated Outlays ................................................................................... 0 2 2 ¥2 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥4 ¥26 

Increase Grants to States for Access and Visitation: 

Budget Authority ........................................................................................................ 0 2 4 6 10 10 10 10 10 10 10 82 Estimated Outlays ..................................................................................................... 0 2 4 6 10 10 10 10 10 10 10 82 

Forgive Penalties for Noncompliance in 2001: 

Budget Authority ........................................................................................................ 0 4 0 0 0 0 0 0 0 0 0 4 Estimated Outlays ..................................................................................................... 0 4 0 0 0 0 0 0 0 0 0 4 

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TABLE 3.—DIRECT SPENDING EFFECTS OF TITLE III: CHILD SUPPORT—Continued

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015 

Require Health Insurance from Either Parent: 

Estimated Budget Authority ...................................................................................... 0 * ¥I ¥I ¥I ¥3 ¥5 ¥7 ¥10 ¥13 ¥16 ¥57 

Estimated Outlays ..................................................................................................... 0 * ¥I ¥I ¥I ¥3 ¥5 ¥7 ¥10 ¥13 ¥16 ¥57 

Send Notices to Child Support Agency: 

Estimated Budget Authority ...................................................................................... 0 I 1 I I 2 2 2 2 2 2 16 Estimated Outlays ..................................................................................................... 0 I I I I 2 2 2 2 2 2 16 

Make Texas Waiver Permanent: 

Estimated Budget Authority ...................................................................................... 0 I 3 3 4 5 6 7 8 9 11 57 Estimated Outlays ..................................................................................................... 0 I 3 3 4 5 6 7 8 9 11 57 

Effect of Title III Provisions on Technical Assistance Funding: 

Estimated Budget Authority ...................................................................................... 0 0 0 0 0 ¥I ¥2 ¥3 ¥4 ¥5 ¥6 ¥21 

Estimated Outlays ..................................................................................................... 0 0 0 0 0 ¥I ¥2 ¥3 ¥4 ¥5 ¥6 ¥21 

Total Changes in Title III: 

Estimated Budget Authority ...................................................................................... 5 14 84 137 163 230 232 240 242 246 248 1,841 Estimated Outlays ..................................................................................................... 5 14 84 137 163 230 232 240 242 246 248 1,841 

* = costs or savings of less than $500,000. NOTES.—Components may not sum to totals because of rounding. TANF = Temporary Assistance for Needy Families. 

97

Because additional child support income in many cases would reduce the Food Stamp benefits a family receives, CBO estimates 

savings in the Food Stamp program totaling $2 million in 2007 and 

$105 million over the 2007–2015 period. 

Distribute More Past-Due Support to Current and Former TANF 

Recipients. Section 301 also would require states to share more 

child support collections with families through a change in assignment rules and would allow states to share more of such collections 

with families who used to receive welfare benefits. 

Under current law, families assign to the state the right to any 

child support payments due before and during the period the families receive assistance. The bill would eliminate the requirement 

that families assign support due in the period before the families 

receive assistance. S. 667 would require states to implement the 

new policy by September 30, 2009, but would give them the option 

of implementing it as soon as 18 months after the date of enactment. 

When a family ceases to receive public assistance, states continue to enforce the family’s child support order. All amounts of 

child support collected on time are sent directly to the family. However, both the government and the family have a claim on collections of past-due child support: the government claims the support 

owed for the period when the family was on assistance, up to the 

amount of the assistance paid, and the family claims the remainder. A set of distribution rules determines which claim is paid first 

when a collection is made. That order matters because, in many 

cases, past-due child support is never fully paid. 

Section 301 would give states the option to change the order of 

the distribution so that all collections would be paid to families 

first before the government is reimbursed. In addition, it would 

allow states to pay to families part of the government’s share of 

support payments. 

CBO estimates that states with 40 percent of collections would 

implement the optional policies by 2010. Based on information from 

state child-support officials and policy experts, and on HHS data, 

CBO estimates that families would receive an additional $61 million in 2007, rising to $333 million by 2010, and $2.5 billion over 

the 2007–2015 period, as a result of these changes. CBO estimates 

that those increased distributions to families would reduce the federal share of collections by $34 million in 2007, $183 million in 

2010, and $1.4 billion over the 2007–2015 period. 

Section 301 would affect federal collections in the student loan 

program. Under a program called the federal tax offset refund program, tax refund payments are withheld from individuals who owe 

over-due child support and certain federal debts, mainly related to 

student loans, and used to pay the debts. Beginning in 2010, S. 667 

would give child support debt priority over all other federal debts. 

In current law, child support that is owed to the government is 

given such priority, but child support owed to families is paid after 

all other federal debts. In cases where an individual owes both 

child support debt and other federal debt, the new priority order 

would decrease payments to the federal government in the student 

loan program. 

Currently 0.5 percent of tax filers are subject to a tax refund offset for child support owed to a family and 0.5 percent for student 

98

loan debt. Assuming people who owe student loan debt are neither 

more nor less likely to owe child support debt, 3,300 filers could be 

subject to an offset for both child support and student loan debt. 

CBO estimates that the provision would reduce recoveries in the 

student loan program by $4 million annually beginning in 2010. 

However, much of the resulting losses in recoveries in the student 

loan program would be subsequently recouped through various collecting methods. 

The provisions affecting the student loan programs are assessed 

under the requirements of the Federal Credit Reform Act. As such, 

the budget records all the costs and collections associated with a 

new loan on a present-value basis in the year the loan is obligated, 

and the costs of all changes (i.e., ‘‘modifications’’) affecting outstanding loans are displayed in the fiscal year the bill is enacted—

assumed to be 2005 for this estimate. This results in a federal cost 

of $5 million in 2005 and insignificant amounts each year from 

2006 through 2015. 

Finally, the new collections paid to former TANF recipients 

would affect spending for the Food Stamp program. CBO expects 

that one-third of the former TANF recipients with increased child 

support income would participate in the Food Stamp program, and 

that benefits would be reduced by 30 cents for every extra dollar 

of income. Increased income from the tax refund offset, which is 

paid as a lump sum, would not count as income for determining 

Food Stamp benefits. For purposes of calculating such benefits, incomes of former TANF recipients would increase by $14 million in 

2007 and $480 million over the 2007–2015 period. Food Stamp savings would be $1 million in 2007 and $50 million over the 2007–

2015 period. 

Mandatory Three-Year Update of Child Support Orders. Section 

302 would require states to adjust child support orders offamilies 

on TANF every three years. States could use one of three methods 

to adjust orders: full review and adjustment, cost-of-living adjustment (COLA), or automated adjustment. Under current law, nearly 

half of the states perform periodic adjustments. Most perform a full 

review, and the remainder apply a COLA. No state currently 

makes automated adjustments. The provision would take effect on 

October 1, 2007, and CBO estimates that it would result in direct 

spending savings of $105 million over the 2008–2015 period. 

CBO estimates that there are 700,000 TANF recipients with 

child support orders in states that do not periodically adjust orders 

and one-third ofthose orders would be adjusted each year. We assume that half of the states not already adjusting orders would 

choose to perform full reviews and half would apply a COLA. 

Full review and adjustment. When a state performs a full review 

of a child support order, it obtains current financial information 

from the custodial and noncustodial parents and determines whether any adjustment in the amount of ordered child support is indicated. The state also may revise an order to require the noncustodial parent to provide health insurance. 

Based on evaluations of review and modification programs, CBO 

estimates the average cost of a review would be about $200, with 

the federal government paying 66 percent of such administrative 

costs. The average adjustment to a child support order of a family 

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on TANF would be $95 a month, and about 18 percent of the orders 

reviewed would be adjusted. 

In addition, CBO estimates that 40 percent of orders with a monetary adjustment also would be adjusted to include a requirement 

that the noncustodial parent provide health insurance for his or 

her child and that insurance would be provided in about half of 

those cases. After the first few years, we assume newly provided 

medical insurance would decline by half, because many families 

would have already had such insurance recently added to their 

order. Children who receive TANF are generally eligible for Medicaid, so the new coverage would reduce spending for that program. 

Cost-of-living adjustment. When a state makes a cost-of-living adjustment it applies a percentage increase reflecting the rise in the 

cost of living to every order, regardless of how the financial circumstances of the individuals may have changed. The process is 

considerably less cumbersome and expensive than a full review but 

also results in smaller adjustments on average. Based on recent research on COLA programs, CBO estimates that the average cost 

would be $11 per case modified, and the average adjustment to a 

support order would be $5 per month. There would be no additional 

health insurance coverage. 

Summary. Under either method of adjustment, CBO expects any 

increased collections for a family would continue for up to three 

years. While a family remains on TANF, the state would keep all 

the increased collections to reimburse itself and the federal government for welfare payments. The states would pay any increased 

collections stemming from reviews of child support orders to families once they leave assistance. That additional child support income for former recipients would result in savings in the Food 

Stamp program. 

Overall, CBO expects the federal share of administrative costs for child support to rise by $15 million in 2008 and $106 million 

over the 2008–2015 period. Federal collections would increase by 

$5 million in 2008 and $136 million over the 2008–2015 period. Finally, Food Stamp and Medicaid savings would total $17 million 

and $58 million respectively over the 2008–2015 period. 

Denial of Passports. Under current law, the State Department 

denies a request for a passport for a noncustodial parent if he or 

she owes more than $5,000 in past-due child support. Beginning in 

fiscal year 2007, section 304 would lower that threshold and deny 

a passport to a noncustodial parent owing $2,500 or more. Generally, when a noncustodial parent seeks to restore eligibility for a 

passport, he or she will arrange to pay the past-due amount down 

to the threshold level. 

The State Department currently denies about 15,000 passport requests annually. Data from HHS show there are 3.2 million noncustodial parents owing more than $5,000 in past-due child support 

and an additional 760,000 owing between $2,500 and $5,000. If 

noncustodial parents owing between $2,500 and $5,000 apply for 

passports at the same rate as those owing more than $5,000, the 

proposal would generate an additional 3,600 denials annually. 

CBO estimates that 25 percent of noncustodial parents who have 

a passport request denied would make a payment to get their passport rather than just doing without one. If the threshold is lowered, 

a noncustodial parent owing more than $5,000 would have to pay 

100

an additional $2,500 to receive a passport. On average, a noncustodial parent owing between $2,500 and $5,000 would have to pay 

$1,250 to receive a passport. As a result, CBO estimates the policy 

would result in new payments of child support of about $11 million 

annually. CBO assumes the same share of those payments would 

be on behalf of current and former welfare families as in the overall program—10 percent—and that amount would be retained by 

the government as reimbursement for welfare benefits. The federal 

share of such collections would be about $1 million a year and $9 

million over the 2007–2015 period. 

Improved Debt Collection: SSA Benefit Match. Section 307 would 

allow states to collect past-due child support by withholding Social 

Security, Black Lung, and Railroad Retirement Board payments. 

Because parents affected by the legislation are generally younger 

than 62, most of them are likely to receive benefits under the Disability Insurance (DI) program rather than the retirement or survivors programs. The Debt Collection Improvement Act of 1996 limits the amount that can be withheld annually from an individual’s 

Social Security check to the lesser of any amount over $9,000 or 

15 percent of benefits. 

Based on an analysis done by the Treasury Department, CBO estimates that 50,000 beneficiaries a month could be subject to an 

offset. Based on states’ current use of administrative offsets for 

other federal programs, we estimate two out of three of those beneficiaries could potentially have their checks offset. On average, the 

offsets could amount to about $2,000 by 2010 and could yield $65 

million in collections for child support from Social Security payments. 

CBO estimates that the additional collections under section 308 

would be only one-half of the potential $65 million because of several factors. First, some of this money might be collected anyway 

through other enforcement tools, such as offsets currently applied 

to federal tax refunds. Second, noncustodial parents are younger 

than average DI recipients, and younger men receive lower DI benefits than older men. Third, children of DI recipients are entitled 

to a benefit from Social Security that averages more than $2,000 

annually. Some states consider these benefits in determining the 

amount of child support owed by the noncustodial parent. Fourth, 

in some cases the estimated offset would exceed the amount of arrears owed. Finally, CBO expects a small percentage of all non-custodial parents owing past-due support would slip through the administrative process.

The provision would be effective 18 months after enactment, so 

that full savings would not be realized until 2008. As DI benefits 

rise over time, federal receipts under these provisions would climb 

from $3 million in 2007 to $6 million in 2015, totaling $43 million 

over the 2007–2015 period. 

Maintenance of Technical Assistance and Federal Parent Locator 

Service Funding. Current law allows the Secretary to use 3 percent 

of the federal share of child support collections to fund technical assistance efforts and to operate the federal parent-locator service. 

Sections 308 and 309 would set a minimum funding level for those 

purposes equal to the 2002 level of $37 million. Because CBO 

projects that such payments will fall below $37 million in 2005–

101

2007 under the current formula, this provision would increase payments by $5 million over that period. 

Seizure of Assets Held by Multistate Financial Institutions. Undercurrent law, HHS matches lists of noncustodial parents who 

owe child support arrears against data from financial institutions 

to identify assets that might be seized to pay overdue child support. HHS forwards any matches to states so that states can pursue collection. On average, states make a collection in 7 percent of 

cases with a match. The reported performance of states varies 

widely, from 50 percent of cases to less than 1 percent. States’ collection rates are low on average for a variety of reasons. In some 

cases, multistate financial institutions will not honor a seizure by 

a state unless the institution has branch offices in the state. Also, 

some states have policies of pursuing matches only when a large 

financial asset is identified or only when the arrearage is longstanding or no current payments are being made. 

Section 310 would give the federal government the authority to 

act on behalf of states to seize financial assets for the purpose of 

paying child support. The new authority would resolve problems of 

jurisdiction in cases where a state is pursuing an asset in a different state. Also, the federal government plans to pursue collections in a higher percentage of cases. 

Currently, HHS compares a list of about 5 million cases with arrears with data from financial institutions and identifies potential 

financial assets in more than 1.7 million cases. Some of those cases 

are later found to be false matches or are uncollectible for other 

reasons. Based on information from child-support administrators 

and policy experts, CBO expects that, when this provision is fully 

implemented, the federal government would seize assets 20 percent 

of the time a potential asset is identified, up from 7 percent. Based 

on data from HHS, CBO expects the average collection would be 

$500 per seizure, down from $730 per seizure under current law. 

(The average seizure would go down because the federal government would be pursuing a broader set of cases, many of which 

would have lower amounts of assets available.) CBO expects that 

the policy would take some time to implement and would not be 

fully effective until 2009. We estimate that the policy would result 

in new collections of $26 million in 2007 and $742 million over the 

2007–2015 period. CBO assumes the same share of those payments 

would be on behalf of current and former welfare families as in the 

overall program—10 percent—and that amount would be retained 

by the government as reimbursement for welfare benefits. The federal share of such collections would be $39 million over the 2006–

2015 period. CBO estimates that implementing the program would 

raise administrative costs by about $3 million in each of years 2006 

and 2007. The federal share of those costs would total $4 million 

over the two years. 

Comparison With Insurance Data. Section 311 would authorize 

the Secretary to compare information on noncustodial parents who 

owe past-due child support with information maintained by insurers concerning insurance payments and to furnish any information 

resulting from the match to state agencies to pursue payments to 

pay overdue child support. States representing about one-third of 

child support collections currently participate in an existing system 

operated by the Child Support Lien Network that performs a simiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00105 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
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lar function. CBO expects that eventually, even without federal 

intervention, about half of the states would participate. Under the 

proposal, CBO expects all states would participate by 2009. Based 

on data for the existing program, CBO expects that collections 

would increase by $15 million annually when fully phased in and 

that half of those collections would be on behalf of current or 

former TANF families. The federal share of collections would be 

$30 million over the 2008–2015 period. CBO estimates that implementing the program would raise administrative costs by about $3 

million in each of years 2006 and 2007. The federal share of those 

costs would total $4 million over the two years. 

Grants to States for Access and Visitation. The 1996 welfare law 

authorized grants to states of $10 million annually to facilitate 

noncustodial parents’ access to and visitation of their children. Section 318 would increase funding to $12 million in 2006, $14 million 

in 2007, $16 million in 2008, and $20 million in 2009 and in subsequent years. The new funding would result in increased outlays of 

$82 million over the 2006–2015 period. 

Penalties for Noncompliance. Section 319 would change the statutory requirements concerning when states pay penalties for failure 

to meet performance standards in the child support program. It 

also would forgive penalties for certain states that failed to meet 

such standards in 2001, but did so in 2002 or 2003. CBO expects 

that the change in timing of penalties would not affect the federal 

budget; the Secretary of HHS is generally already operating on the 

revised schedule. CBO estimates that half a dozen states would 

qualify for penalty forgiveness totaling $4 million in 2006. 

Requirement To Seek Medical Support From Either Parent. Currently, about half the states explore both parents’ ability to provide 

health insurance when setting a child support order. Section 320 

would require all states to look to either parent or both parents to 

provide health insurance for their child. The policy would apply to 

child support orders that are issued or amended after enactment, 

so it would take effect gradually. Based on national survey data, 

CBO expects that the policy would result in additional private 

health insurance coverage for children and that without that coverage some of those children would receive Medicaid benefits. CBO 

estimates that private health coverage would be provided to nearly 

300 children who would otherwise receive Medicaid benefits in 

2006. That number would grow to more than 9,000 by 2015. Based 

on spending per child in the Medicaid program, CBO estimates 

that implementing this provision would reduce costs in the Medicaid program by an insignificant amount in 2006 and by $57 million over the 2006–2015 period. 

Notice of Loss of Health Coverage. Section 321 would require administrators of health plans to notify the child support agency 

when a noncustodial parent providing health coverage for a child 

loses that coverage. CBO expects that the child support agency 

would handle 30,000–50,000 such notices each year and that in 

some cases the child support agency would take action to secure 

new health coverage for the children. CBO estimates that implementing the provision would raise administrative costs in the child 

support program by $1 million to $2 million annually. 

Make Texas Waiver Permanent. Under current law, families who 

receive government assistance may automatically receive services 

103

from the child support agency, while other families must apply for 

services. The state of Texas currently has a waiver of the requirement for a written application for child support services for families not receiving assistance. Texas’ waiver is scheduled to expire 

in mid-2006, but could be renewed by the Secretary. Section 322 

would extend the waiver permanently. 

Texas currently operates under the waiver in four counties and 

plans to expand to additional counties. In general, new cases are 

added as new orders are issued, so that the child support caseload 

grows gradually in the participating counties. CBO estimates that 

each new case would increase the federal share of administrative 

costs by about $150 in 2010 and that under this provision, services 

would be provided for 65,000 cases in that year. CBO estimates 

that extending the waiver would result in a higher federal share 

of administrative costs totaling $2 million in 2006 and $112 million 

over the 2006–2012 period. 

For its baseline projections, CBO estimates that there is a 50 

percent chance that the Secretary will allow the waiver to continue, 

even without this legislation. So, relative to CBO’s baseline, the 

cost of implementing this provision is only half of the total cost of 

extending the waiver. CBO estimates that implementing this provision would increase outlays by $1 million in 2006 and by $57 million over the 2006–2015 period. 

Effect of Title III Provisions on Technical Assistance Funds. Several provisions of Title III would affect the amount of child support 

collections the federal government retains. Provisions allowing 

states to share more of those collections with families lower the 

federal share of collections. New enforcement mechanisms, such as 

seizing more financial assets or insurance payments, would boost 

the federal share. The net effect of all the provisions of title III 

would be to lower the federal share of collections by an increasing 

amount each year. 

Current law allows the Secretary to use 3 percent of the federal 

share of child support collections for technical assistance efforts 

and to operate the federal parent-locator service. A lower federal 

share of collections would reduce funding for those activities. Because a separate provision of title III provides that such funding 

cannot fall below the 2002 level of $37 million, the lower collections 

would not affect funding until 2010. CBO estimates that implementing title III of the bill would lower funding for technical assistance by $1 million in 2010 and $21 million over the 2010–2015 period. 

Title IV: Child Welfare. Provisions in Title IV would increase 

spending for federally subsidized foster care by $448 million from 

2007–2015, CBO estimates. (see Table 4).

104

TABLE 4.—DIRECT SPENDING EFFECTS OF TITLE IV: CHILD WELFARE 

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015 

Disregard of Certain Payments to Puerto Rico: 

Estimated Budget Authority ...................................................................................... 0 0 6 6 6 6 0 0 0 0 0 25 Estimated Outlays ..................................................................................................... 0 0 6 6 6 6 0 0 0 0 0 25 

Tribal Foster Care: 

Estimated Budget Authority ..................................................................................... 0 0 16 26 37 49 56 59 61 64 66 434 Estimated Outlays ..................................................................................................... 0 0 13 25 35 47 55 58 61 63 66 423 

Total, Title IV: 

Estimated Budget Authority ...................................................................................... 0 0 22 32 43 55 56 59 61 64 66 459 Estimated Outlays ..................................................................................................... 0 0 19 31 41 53 55 58 61 63 66 448 

Note.—Components may not sum to totals because of rounding. 

105

This title would extend a program of demonstration projects related to child welfare programs. As of May 2004, 12 states had active demonstration projects testing the efficiency of innovations in 

child welfare, such as subsidized guardianship. The demonstration 

projects are required to be cost-neutral to the federal government. 

However, it is possible that the demonstrations would lead to increased costs to the federal government because of measurement or 

methodological errors in the cost-neutrality calculation. CBO cannot estimate the likely amount of such costs, but based on experience with the demonstrations, we expect the impact on the federal 

budget would not be significant. 

Beginning in fiscal year 2007, section 402 would allow Puerto 

Rico to claim more federal matching funds for foster care expenses 

by excluding certain amounts from the limitation specified in section 1108 of the Social Security Act. The Social Security Act limits 

total federal spending in Puerto Rico on certain social service programs, including foster care, to $107 million in any year. The 

amount of spending above the limitation would be capped at $6.25 

million for fiscal years 2007 through 2010. CBO estimates this provision would increase outlays by $25 million between fiscal years 

2007 and 2010. 

Section 403 of the bill would permit tribal entities to participate 

in foster care and adoption assistance programs authorized under 

title IV–E of the Social Security Act, effective as of October 1, 2006. 

Based on information from the Indian Child Welfare Association, 

CBO estimates that this provision could allow coverage of between 

2,000 and 3,000 children per year. CBO estimates that this section 

would increase costs to the IV–E programs by $423 million over fiscal years 2007 through 2015. 

Title V: Supplemental Security Income. Title V would make several changes to the Supplemental Security Income (SSI) program. 

It would require that a portion of adult disability determinations 

receive an additional level of review before benefits are awarded. 

In addition, it would extend the period of time that refugees and 

asylees are eligible to collect benefits. Together, these proposals 

would increase direct spending by $72 million in 2006 and decrease 

direct spending by $1.3 billion over the 2006–2015 period, CBO estimates (see Table 5). 

Section 501 would require the Social Security Administration to 

conduct reviews of initial decisions to award SSI benefits to certain 

disabled adults. The legislation would direct the agency to review 

at least 25 percent of all favorable adult-disability determinations 

made by state-level Disability Determination Service (DDS) offices 

in 2006. Under the legislation, the agency would have to review at 

least 50 percent of the adult-disability awards made by DDS offices 

from 2007 through 2015. 

CBO anticipates state DDS offices will approve between 350,000 

and 400,000 adult disability applications for SSI benefits annually 

between 2006 and 2015. Based on recent data for comparable reviews in the Social Security Disability Insurance program, CBO 

projects that by 2015, more than 20,000 DDS awards would be 

overturned as a result of this provision, resulting in lower outlays 

for SSI and Medicaid (in most states SSI eligibility automatically 

confers entitlement to Medicaid benefits). CBO estimates that section 501 would reduce SSI benefits by $3 million and Medicaid outVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00109 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
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lays by $5 million in 2006. Over the 2006–2015 period, CBO estimates this provision would lower SSI outlays by $461 million and 

Medicaid spending by $1.1 billion. (The administrative costs for 

these changes are discussed later in the section on spending subject 

to appropriation.)

107

TABLE 5.—DIRECT SPENDING EFFECTS OF TITLE V: SUPPLEMENTAL SECURITY INCOME 

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015 

Pre-effectuation Reviews: 

SSI: 

Estimated Budget Authority ............................................................................. 0 ¥3 ¥11 ¥22 ¥33 ¥43 ¥57 ¥56 ¥70 ¥79 ¥87 ¥461

Estimated Outlays ............................................................................................ 0 ¥3 ¥11 ¥22 ¥33 ¥43 ¥57 ¥56 ¥70 ¥79 ¥87 ¥461

Medicaid: 

Estimated Budget Authority ............................................................................. 0 ¥5 ¥22 ¥44 ¥68 ¥94 ¥120 ¥148 ¥179 ¥209 ¥244 ¥1,133Estimated Outlays ............................................................................................ 0 ¥5 ¥22 ¥44 ¥68 ¥94 ¥120 ¥148 ¥179 ¥209 ¥244 ¥1,133

Extended Time Limits for SSI Refugees: 

SSI: 

Estimated Budget Authority ............................................................................. 0 41 49 55 0 0 0 0 0 0 0 145Estimated Outlays ............................................................................................ 0 41 49 55 0 0 0 0 0 0 0 145

Medicaid: 

Estimated Budget Authority ............................................................................. 0 39 51 54 0 0 0 0 0 0 0 144 Estimated Outlays ............................................................................................ 0 39 51 54 0 0 0 0 0 0 0 144

Total Changes in Title V: 

Estimated Budget Authority ...................................................................................... 0 72 67 43 ¥101 ¥137 ¥177 ¥204 ¥249 ¥288 ¥331 ¥1,305

Estimated Outlays ..................................................................................................... 0 72 67 43 ¥101 ¥137 ¥177 ¥204 ¥249 ¥288 ¥331 ¥1,305 

108

Section 502 would allow refugees and asylees who are receiving 

SSI benefits and lawfully entered the country after August 22, 

1996, to continue receiving benefits for an additional two years. 

Under current law, refugees and asylees who entered the country 

after that date are eligible to receive SSI benefits for a period of 

up to seven years from the date they entered the United States. 

The additional period of benefits would begin immediately after the 

bill is enacted and would last through September 30, 2008, at 

which point the seven-year time limit would again apply to all recipients. 

Based on information from SSA, CBO estimates that about 4,600 

refugees and asylees lose SSI eligibility each year because they exceed the seven-year time limit. Extending the time limit would provide up to nine years of eligibility for these beneficiaries through 

the end of 2008. Taking into account the rates at which people become naturalized citizens (and are no longer subject to the time 

limit) or exit the program for other reasons, CBO estimates section 

502 would increase outlays for SSI benefits by $41 million and 

Medicaid outlays by $39 million in 2006. Over the 2006–2008 period, spending on SSI would increase by $145 million and Medicaid 

spending would increase by $144. 

Title VI: Transitional Medical Assistance. Title VI would make 

several changes to Medicaid and the State Children’s Health Insurance Program (SCHIP). Effective October 1, 2005, the bill would 

extend through 2010 the requirement that state Medicaid programs provide transitional medical assistance (TMA) to certain 

Medicaid beneficiaries (usually former welfare recipients) who otherwise would be ineligible because they have returned to work and 

have increased earnings. Title VI also would allow states to simplify aspects of TMA administration. Overall, CBO estimates that 

enacting title VI would increase direct spending by $278 million in 

2006 and by $4.9 billion over the 2006–2015 period (see Table 6). 

Extension of Transitional Medical Assistance. State Medicaid programs are required to provide temporary Medicaid coverage, known 

as transitional medical assistance, for certain individuals (usually 

former TANF recipients) and their dependents who otherwise 

would lose coverage because of increased earnings. States currently 

are required to provide TMA to welfare-related beneficiaries who 

lose their eligibility prior to June 30, 2005. Section 601 of the bill 

would extend the requirement from September 30, 2005, through 

September 30, 2010. (Section 702 of the bill would extend the requirement through September 30, 2005.) 

CBO estimates that this provision would increase federal Medicaid outlays by $267 million in 2006 and by $4.1 billion over the 

2006–2015 period. The budgetary effects of the extension would 

continue beyond 2010 because families who qualify for TMA would 

be entitled to up to 12 months of additional eligibility, even if that 

eligibility runs beyond September 30, 2010. Moreover, some states 

provide more than 12 months of TMA through Medicaid waivers; 

families living in those states could remain eligible through 2012. 

Without S. 667, CBO anticipates that some of the families leaving welfare between 2006 and 2010 would have incomes high 

enough to make their children ineligible for Medicaid, and that 

some of the children in those families would enroll in SCHIP instead. By extending TMA, the bill would make those children eligiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00112 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
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ble for Medicaid. Because children who are eligible for Medicaid 

cannot receive SCHIP benefits, the bill would lead to savings in the 

SCHIP program. 

CBO estimates that the bill would reduce federal SCHIP outlays by a total of $36 million over the 2006–2010 period. Because states 

generally have three years to spend their SCHIP allotments, those 

savings would free up funds that could be spent on benefits in later 

years. CBO estimates that such spending would amount to $31 million over the 2011–2015 period. 

Optional TMA Simplifications. Section 601 also would allow 

states to waive or relax various requirements that currently apply 

to TMA. In particular, the bill would allow states to expand TMA 

eligibility to individuals who have not been eligible for Medicaid for 

at least three of the previous six months (a requirement under current law), provide up to 12 additional months of TMA eligibility, 

and eliminate some or all of the requirements for TMA recipients 

to report their incomes periodically.

110

TABLE 6.—DIRECT SPENDING EFFECTS OF TITLE VI: TRANSITIONAL MEDICAL ASSISTANCE 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006–2015 

CHANGES IN DIRECT SPENDING

Extension of TMA through 2010: 

Medicaid: 

Estimated Budget Authority .............................................................................................. 267 696 776 833 892 576 36 ¥2 ¥11 ¥2 4,061 

Estimated Outlays ............................................................................................................. 267 696 776 833 892 576 36 ¥2 ¥11 ¥2 4,061 

SCHIP: 

Budget Authority ............................................................................................................... 0 0 0 0 0 0 0 0 0 0 0 Estimated Outlays ............................................................................................................. ¥7 ¥15 ¥8 ¥3 ¥3 1 * 5 21 4 ¥5 

Optional TMA Simplifications: 

Medicaid: 

Estimated Budget Authority .............................................................................................. 19 82 130 182 228 181 6 * ¥2 * 826 Estimated Outlays ............................................................................................................. 19 82 130 182 228 181 6 * ¥2 * 826 

SCHIP: 

Budget Authority ............................................................................................................... 0 0 0 0 0 0 0 0 0 0 0 Estimated Outlays ............................................................................................................. 0 ¥2 ¥2 ¥1 ¥1 ¥1 1 * 4 1 ¥1 

Total Changes in Title VI: 

Estimated Budget Authority ....................................................................................................... 285 778 906 1,015 1,120 757 41 ¥2 ¥13 ¥2 4,885Estimated Outlays ...................................................................................................................... 278 761 897 1,011 1,116 756 42 3 12 3 4,879

* = costs or savings of less than $500,000. Notes.—TMA = transitional medical assistance, SCHIP = State Children’s Health Insurance Program 

111

CBO anticipates that those provisions would boost federal Med- icaid spending by $19 million in 2006 and by $826 million over the 

2006–2015 period. Most of those costs would stem from the elimination of the income-reporting requirements. States already have 

the flexibility under current law to effectively waive the three-outof-six months requirement or to provide more than 12 months of 

TMA by disregarding some or all of an individual’s income when 

determining eligibility. 

CBO also estimates that the effect of those provisions would have a slight impact on SCHIP, decreasing outlays by $1 million over 

the 2006–2015 period. By relaxing TMA rules, the bill would make 

some children newly eligible for Medicaid and therefore ineligible 

for SCHIP. 

Title VII: Effective Date. Title VII would extend several provisions of law through September 30, 2005, including authorizations 

of the Temporary Assistance for Needy Families (TANF), child care 

entitlement, and abstinence education programs, and eligibility for 

transitional medical assistance (TMA) under Medicaid. CBO estimates that Title VII would increase direct spending, relative to the 

baseline, by $45 million in 2005, by $238 million over the 2005–

2010 and by $239 million over the 2005–2015 periods (see Table 7).

112

TABLE 7.—DIRECT SPENDING EFFECTS OF TITLE VII: EFFECTIVE DATE 

By fiscal year, in millions of dollars— 

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015 

TANF Supplemental Grants: 

Budget Authority ........................................................................................................ 64 0 0 0 0 0 0 0 0 0 0 64 Estimated Outlays ..................................................................................................... 41 15 8 0 0 0 0 0 0 0 0 64 

Abstinence Education Grants: 

Budget Authority ........................................................................................................ 13 0 0 0 0 0 0 0 0 0 0 13 Estimated Outlays ..................................................................................................... 4 5 2 1 1 0 0 0 0 0 0 11 

TANF Research Funding: 

Budget Authority ........................................................................................................ 3 0 0 0 0 0 0 0 0 0 0 3 Estimated Outlays ..................................................................................................... * 1 2 0 0 0 0 0 0 0 0 3 

Child Welfare Research Funding: 

Budget Authority ........................................................................................................ 1 0 0 0 0 0 0 0 0 0 0 1 Estimated Outlays ..................................................................................................... * * 1 0 0 0 0 0 0 0 0 1 

TMA: 

Medicaid: 

Estimated Budget Authority ............................................................................. 0 148 13 * * * * * * * * 161 Estimated Outlays ............................................................................................ 0 148 13 * * * * * * * * 161 

SCHIP: 

Estimated Budget Authority ............................................................................. 0 0 0 0 0 0 0 0 0 0 0 0 Estimated Outlays ............................................................................................ 0 ¥4 * 1 1 * * * * 1 * ¥1 

Total Changes in Title VII: 

Estimated Budget Authority ...................................................................................... 81 148 13 * * * * * * * * 242 Estimated Outlays ..................................................................................................... 45 165 28 2 2 * * * * * * 239 

* = costs or savings of less than $500,000. Notes.—Components may not sum to total because of rounding 

113

TANF, Child Care, and Abstinence Education. The bill would extend the TANF and child care entitlement programs through September 30, 2005. Those programs are scheduled to expire on June 

30, 2005. The extension would provide funding at the 2004 level—

totaling about $3.3 billion for TANF and $400 million for child care 

under the procedures the Office of Management and Budget uses 

for allocating funds for those programs. The extension would have 

no cost relative to CBO’s baseline because it already assumes annual funding for those programs at the 2004 level in accordance 

with the rules set forth in the Deficit Control Act.

The bill would also fund TANF supplemental grants at their 2004 level of $64 million and would extend funding for two research grants totaling $4 million through September 30, 2005. It 

would appropriate $12.5 million for the abstinence education program. 

Transitional Medical Assistance. Title VII also would extend 

through September 30, 2005, the requirement that state Medicaid 

programs provide transitional medical assistance to certain beneficiaries—usually former TANF recipients—who would otherwise 

lose eligibility because of increased earnings. This requirement is 

set to expire on June 30, 2005. 

CBO estimates that the extension of TMA would have no budgetary impact in 2005, but would increase federal Medicaid spending 

by $148 million in 2006 and $161 million over the 2006–2015 period. The extension would not affect spending in 2005 because families who qualify for TMA are already eligible for four months of 

additional eligibility under a separate provision of Medicaid law. 

The extension also would decrease spending in the State Children’s 

Health Insurance Program by $1 million over the 2005–2015 period. 

SPENDING SUBJECT TO APPROPRIATION

S. 667 would establish several new grant programs that would 

be funded through annual appropriations. Further, it would increase the cost of administering the SSI program by requiring the 

Social Security Administration to conduct additional reviews of SSI 

applications. Assuming appropriation of the authorized amounts, 

CBO estimates that implementing the legislation would cost $41 

million in 2006 and $1.7 billion over the 2006–2015 period (see 

Table 8). Estimated outlays are based on historical spending patterns for social service grant programs, unless otherwise noted. 

Domestic Violence Prevention Grants. Section 103 would authorize appropriations of $10 million annually through 2010 for the 

Secretary of HHS to develop and implement a program to address 

domestic violence as a barrier to healthy relationships, marriage, 

and economic security. CBO estimates implementing the program 

would cost $1 million in 2006 and $50 million over the 2006–2012 

period. Section 114 would authorize an additional $20 million annually through 2010 for the Secretary to award matching grants to 

states, tribes, and nonprofit organizations to operate programs to 

reduce domestic violence. CBO estimates implementing the program would cost $2 million in 2006 and $100 million over the 10-

year period. 

Fatherhood Grants. Section 118 would establish new grant programs to promote responsible fatherhood and would authorize apVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00117 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
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propriations of $26 million annually over the 2006–2010 period. 

(Section 118 appropriates an additional $50 million annually in direct spending.) CBO estimates implementing the programs would 

cost $4 million in 2006 and $130 million over the 2006–2012 period. 

Grants To Capitalize and Develop Sustainable Social Services. Section 119 would authorize appropriations of $40 million each 

year over the 2006–2010 period to make grants for the purpose of 

capitalizing and developing sustainable social services. Grantees 

would develop programs that would generate their own sources of 

revenue while assisting TANF recipients. CBO estimates that implementing this provision would increase outlays by $4 million in 

2006 and by $200 million over the 2006–2013 period.

115

TABLE 8.—ESTIMATED COSTS FOR NEW DISCRETIONARY SPENDING 

By fiscal year, in millions of dollars—

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005–2015

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Title I: TANF: 

Best Practices for Addressing Domestic Violence Grants: 

Authorization Level ........................................................................................... 0 10 10 10 10 10 0 0 0 0 0 50Estimated Outlays ............................................................................................ 0 1 6 11 10 8 9 5 0 0 0 50

Domestic Violence Prevention Grants: 

Authorization Level ........................................................................................... 0 20 20 20 20 20 0 0 0 0 0 100Estimated Outlays ............................................................................................ 0 2 12 22 20 16 18 10 0 0 0 100

Fatherhood Grants: 

Authorization Level ........................................................................................... 0 26 26 26 26 26 0 0 0 0 0 130Estimated Outlays ............................................................................................ 0 4 18 29 28 26 20 5 0 0 0 130

Social Services Capitalization Grants: 

Authorization Level ........................................................................................... 0 40 40 40 40 40 0 0 0 0 0 200Estimated Outlays ............................................................................................ 0 4 24 43 40 34 35 18 2 0 0 200

Car Ownership Grants: 

Authorization Level ........................................................................................... 0 25 25 25 25 25 0 0 0 0 0 125Estimated Outlays ............................................................................................ 0 3 15 27 25 21 22 11 1 0 0 125 

Transitional Jobs Grants: 

Authorization Level ........................................................................................... 0 200 200 200 200 200 0 0 0 0 0 1,000Estimated Outlays ............................................................................................ 0 20 120 216 200 168 176 90 10 0 0 1,000

Subtotal Title I: 

Authorization Level .................................................................................. 0 321 321 321 321 321 0 0 0 0 0 1,605Estimated Outlays ................................................................................... 0 34 195 348 323 273 280 139 13 0 0 1,605

Title V: Supplemental Security Income: 

Administrative Costs of SSI Pre-effectuation Revenues: 

Estimated Authorization Level ......................................................................... 0 8 II 14 15 15 16 16 17 17 18 147Estimated Outlays ............................................................................................ 0 7 10 13 15 15 16 16 17 17 18 144

Total Changes: 

Estimated Authorization Level ................................................................ 0 329 332 335 336 336 16 16 17 17 18 1,752 Estimated Outlays ................................................................................... 0 41 205 361 338 288 296 155 30 17 18 1,749 

116

Grants for Car Ownership. Section 119 would authorize the ap- propriation of $25 million each year through 2010 for a program of 

grants to states, Indian tribes, localities, and nonprofit organizations to assist low-income families with children in buying automobiles. 

The program is designed to facilitate employment opportunities 

and access to training by providing low-income families with more 

reliable transportation. CBO estimates that the program would 

cost $3 million in 2006 and $125 million over the 2006–2013 period. 

Transitional Jobs Grants. Section 119 would authorize the appro- priation of $200 million each year through 2010 for a program of 

grants to states, Indian tribes, localities, private organizations, and 

employers to promote job advancement and wage growth for lowwage workers. The program would primarily serve current and 

former recipients of TANF benefits, individuals at risk of needing 

TANF benefits, individuals with disabilities and noncustodial parents who have difficulty in paying child support. CBO estimates 

that implementing this program would cost $20 million in 2006 

and $1 billion over the 2006–2013 period. 

SSI Pre-effectuation Reviews. Section 501 would require the Social Security Administration to conduct reviews on initial decisions 

to award SSI benefits to certain disabled adults. CBO estimates the 

provision would increase the number of non-concurrent SSI determinations reviewed each year by SSA by about 135,000. Based on 

SSA’s costs for conducting similar reviews in the Disability Insurance program, we estimate this would cause SSA’s administrative 

costs, which are subject to appropriation, to increase by $8 million 

in 2006 and $147 million over the next 10 years. 

Estimated impact on state, local, and tribal governments: The 

bill would extend funding for a number of state programs, most notably TANF, and establish new grants that target a variety of 

worker and family programs. The bill also would place new requirements and limitations on state programs as conditions for receiving 

federal assistance. Preemptions and some other requirements in 

the bill would be intergovernmental mandates as defined in 

UMRA. The limit on amounts that states could retain for state 

child support enforcement programs also could be an intergovernmental mandate because of the narrow focus of and limited flexibility in that program. 

MANDATES

Generally, conditions of federal assistance are not considered 

intergovernmental mandates as defined in UMRA. However, 

UMRA makes special provisions for identifying intergovernmental 

mandates in provisions affecting large entitlement grant programs 

(those that provide more than $500 million annually to state, local, 

or tribal governments), including TANF, Medicaid, and child support enforcement. Specifically, if a legislative proposal would increase the stringency of conditions of assistance, or cap or decrease 

the amount of federal funding for the program, such a change 

would be considered an intergovernmental mandate if the state, 

local, or tribal government lacks authority to amend its financial 

or programmatic responsibilities to continue providing required 

services. The TANF and Medicaid programs allow states significant 

117

flexibility to alter their programs and accommodate new requirements. However, the child support enforcement program is narrower in scope; its primary goal is to collect and redistribute child 

support payments. This narrower focus does not afford states as 

much flexibility as other large entitlement programs, so reducing 

the amounts that states may retain from child support collections 

would be an intergovernmental mandate, as defined in UMRA, for 

some states. CBO estimates, however, that the cost of the intergovernmental mandates would not exceed the threshold established in 

UMRA ($62 million in 2005, adjusted annually for inflation). 

Child Support Enforcement. S. 667 would reduce the amounts 

that states may retain from child support collections in order to reimburse themselves for public assistance spending, in particular for 

TANF. As a result, states would lose a total of about $50 million 

in 2010 and about $325 million over the 2010–2015 period, CBO 

estimates. Retained child support collections are intended to reimburse states for their portion of spending for public assistance programs. If states are able to carry out their responsibilities more efficiently or pare back their child support activities while maintaining a basic level of compliance, the aggregate costs of the mandate 

could be reduced. 

States also would be required to conduct mandatory reviews of 

child support cases every three years, but this requirement is expected to result in net savings to states of about $56 million in the 

child support program and $44 million in Medicaid over the 2006–

2015 period. 

Preemptions. The bill contains two preemptions of state law that 

are intergovernmental mandates as defined in UMRA. The bill 

would preempt state laws that could prevent an individual from 

contesting liens or levies on property seized in an effort to collect 

past-due child support. The bill also would protect insurers from 

state liability laws in cases where they have shared information 

with the Secretary of HHS for the purpose of identifying individuals that owe past-due child support. Neither of these preemptions 

would result in significant costs to state, local, or tribal governments. 

TANF and Medicaid. The TANF program affords states broad 

flexibility to determine eligibility for benefits and to structure the 

programs offered as part of the state’s family assistance program. 

Changes to the program embodied in S. 667 could alter the way in 

which states administer the program and provide benefits and 

could increase costs to states. However, states could make other 

changes of their own, adjusting eligibility criteria or the structure 

of programs to avoid or offset such costs. Because the TANF program affords states such broad flexibility, new requirements generally are not considered intergovernmental mandates as defined 

by UMRA. Similarly, a large component of the Medicaid program 

includes optional services that states may alter to accommodate 

new requirements and to offset additional costs in that program. 

OTHER IMPACTS

Benefits. Many provisions of the bill would benefit state assistance programs by increasing funding, broadening flexibility, or providing new grants. 

118

TANF. S. 667 would reauthorize family assistance grants 

through 2010 and continue supplemental grants for states that historically have had rising populations or that provided relatively low 

levels of benefits. The bill would provide more than $80 billion over 

the 2006–2010 period for family assistance. In addition, CBO estimates that state and tribal governments would receive a total of 

$1.3 billion for supplemental grants over the 2006–2011 period.

Increased Flexibility. The bill would allow states to use unspent 

funds from prior years to pay for services in addition to benefits, 

and it would increase the portion of TANF funds that may be specifically used for SSBG purposes from 4.25 percent to 10 percent. 

States also could use a portion of TANF funds for projects that foster access to jobs or reverse commuting. 

Child Care. S. 667 would provide nearly $14 billion over the 

2005–2010 period by extending the current child care grant program, and would increase funding for child care grants by an additional $1 billion over that period. It also would appropriate $5 billion in supplemental child care grants over the 2006–2010 period. 

Social Services Block Grant. S. 667 would increase funding for Social Services Block Grants by $1 billion over the 2006–2010 period. 

Healthy Marriage Promotion. S. 667 would repeal bonus grants 

for the reduction of illegitimacy, which were available to up to five 

states through 2003, and replace them with grants of $100 million 

annually over the 2006–2010 period for developing and implementing innovative programs to promote and support healthy, twoparent married families. The new grants would be available to 

states, Indian tribes, and tribal organizations. Grants could be used 

for a variety of education and media activities associated with the 

core goals, but they also would have to address domestic violence 

and ensure that participation in any related programs is voluntary. 

State spending on related programs for otherwise non-eligible families could be counted toward a state’s maintenance-of-effort requirements in TANF. 

Domestic Violence Prevention and Child Well-Being Grants. The 

bill would authorize appropriations totaling $30 million a year over 

the 2006–2010 period for two new grant programs aimed at developing strategies and best practices and providing training related 

to the prevention of domestic violence. The bill would appropriate 

$10 million annually over the same period for contracts, interagency agreements or grants for the development of comprehensive 

indicators of the well-being of children. 

Fatherhood Grants. S. 667 would authorize appropriations of $76 

million annually over the 2006–2010 period (of which $50 million 

would also be appropriated) for a variety of grant programs to promote fatherhood, responsible parenting, and marriage, either directly or through educational and media campaigns. 

Abstinence Education. The bill would provide $50 million annually for abstinence education grants over the 2006–2010 period. 

Any unspent funds allocated to individual states would be periodically reallocated by the Secretary. 

Tribal Assistance. S. 667 would reauthorize a program that currently provides $7.6 million annually for grants to Indian tribes 

and tribal organizations for increasing work opportunities. It also 

would increase appropriations for those grants to $12.6 million anVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00122 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
119

nually over the 2006–2010 period. Finally, the bill would appropriate $80 million over the 2006–2010 period for grants that could 

be used for improving the infrastructure of human services facilities, developing economic programs, and acquiring technical assistance. 

Access and Visitation. Current law provides $10 million annually 

for access and visitation program grants. S. 667 would increase 

grants to states and Indian tribes for such programs by $32 million 

over the 2006–2010 period. The bill also would increase the minimum state allotment, increasing it from $120,000 in 2006 (up from 

$100,000 in current law) to $180,000 in 2009 and thereafter. 

Grants To Support Work Activities. The bill would authorize ap- propriations of $40 million annually over the 2006–2010 period for 

grants to capitalize and develop sustainable social services that 

help move recipients of assistance into work activities. The bill also 

would authorize appropriations of $25 million annually over the 

same period for grants to state, local, tribal, and non-profit entities 

for programs that help low-income families with children acquire 

and maintain dependable cars and insurance. Finally, the bill 

would authorize appropriations of $200 million annually over the 

2006–2010 period for grants to public and private entities that promote links among businesses to provide training, create transitional work opportunities, and increase the wages of individuals 

who have limited English proficiency or other barriers to employment. 

Extension of Texas Waiver. The bill would extend a waiver that 

allows Texas to automatically enroll people with child support orders in the child support enforcement program. CBO estimates that 

the state would receive about $16 million over the 2006–2010 period for administrative expenses. 

Foster Care Funds for Puerto Rico. S. 667 also would allow Puerto Rico to claim more federal matching funds for foster care expenses. As a result, CBO estimates that Puerto Rico would receive 

an additional $25 million over the 2007–2010 period. 

Other Costs and Additional Requirements. Some provisions of 

the bill, while not intergovernmental mandates as defined in 

UMRA, would place additional conditions on state, local, and tribal 

governments or would result in additional spending in order to 

meet federal matching requirements. 

Medicaid. The bill would require states to continue providing 

transitional medical assistance through fiscal year 2010. TMA provides benefits to certain individuals and their dependents who otherwise would lose coverage because of increased earnings. The bill 

also would allow states to implement simplifications of the TMA 

system, enabling them to provide TMA for an additional year in 

some cases and easing the qualification requirements. CBO estimates that the total net effect of these provisions would be additional state spending of $3.8 billion for Medicaid and savings of 

about $5 million for SCHIP over the 2006–2010 period. 

Bonus Grants Change to Employment Basis. Under current law, 

states are eligible to receive bonus grants totaling up to 5 percent 

of their family assistance grant if they are identified by the Secretary as a high-performing state in terms of meeting the goals of 

the TANF program. The bill would reduce those grants from an average of $200 million annually to $50 million annually in each of 

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the years 2006–2008 and to $100 million in each of the years 2009–

2011. The bill also would change the basis of the grant from general performance to a focus on workplace attachment and advancement. Of the total amount appropriated, 2 percent would be reserved for Indian tribes. 

Work Participation Requirements. The bill would increase work 

participation requirements in the TANF program by requiring 

states to have an increasing percentage of TANF recipients participating in work activities while receiving cash assistance. It would 

maintain current penalties for the failure to meet those requirements. Those penalties can total up to 5 percent of the TANF block 

grant amount for the first failure to meet work requirements and 

increase with each subsequent failure. CBO expects no state would 

be subject to significant financial penalty for failing to meet the 

new requirements. 

The bill would increase the minimum work participation rate 

from 50 percent to 70 percent over a five-year period. To meet 

those requirements, 70 percent of families would have to be engaged in work activities by 2010. The bill would eliminate a separate requirement in current law that sets even higher participation 

rates for two-parent families. In addition to overall participation 

rates, the bill would increase the minimum number of hours a family would need to participate to fully count toward the standard 

from 30 to 34 hours a week. However, it would allow partial credit 

for recipients who participate for between 20 and 33 hours. Twoparent families would be required to work more hours, but parents 

with children under the age of six would only have to work 24 

hours in order to meet the requirements. The increase in the number of hours of work per week could result in a modest spending 

increase by states and Indian tribes for administration, worker 

support activities, and child care. As the overall participation rates 

increase, states and Indian tribes would have to direct more resources toward programs, such as administrative support, child 

care, and worker supervision to comply with the 70 percent requirement. 

The bill would expand the types of activities that would count toward meeting the work participation requirements and the allowed 

exclusions from the calculation of the work participation rate. 

To the extent that states find the new work requirements difficult to meet, CBO expects they would employ strategies such as 

moving non-working families into separate state programs to effectively reduce the new requirements. For example, under current 

law, some states that fail to meet work requirements, particularly 

the higher requirements applying to two-parent families, set up 

separate state programs to serve those families. States can count 

funds they spend in separate state programs toward their maintenance-of-effort requirement in TANF, but families served under 

those programs do not count in the work participation rate. 

Replacement of Caseload Reduction Credit. Under current law, a 

state’s minimum worker participation rate may be reduced by the 

amount that the average number of families receiving assistance 

declines, assuming the reduction is not the result of changes in eligibility requirements. The bill would replace the caseload reduction 

credit with an employment credit that would be based on the percentage of individuals who no longer receive assistance and who 

121

are actively working. Former recipients who are earning comparably higher salaries would be weighted more heavily in calculating the state’s employment credit. In total, however, the size of 

any credit would be limited to 40 percentage points in 2006, decreasing to 20 percentage points by 2010. States could opt to have 

the shift in the basis for the credit delayed until October 1, 2008. 

Contingency Fund. S. 667 would alter the formula for contingency funds available to states. CBO estimates that those changes 

would result in a loss of funds to states of $12 million over the 

2006–2010 period. The bill also would reserve a portion of contingency funds for tribal governments. CBO estimates that they would 

receive an additional $24 million over the same period. 

Family Self Sufficiency Plans. The bill would change the requirement that states develop individual responsibility plans for beneficiaries to a requirement for family self-sufficiency plans. States 

that fail to implement family self-sufficiency plans would be subject 

to the same penalties that currently apply to work participation requirements. 

New Requirements. States would have to implement new performance targets and comply with a standardized format for submitting amendments to state plans and any subsequent state plan 

submissions for TANF programs. Prior to submitting such plans or 

amendments, a state would have to make the proposals publicly 

available and gather public comments. S. 667 also would require 

states to collect and report additional data on families enrolled in 

TANF programs and on those who leave the rolls because of ineligibility. The bill would require monthly reports on caseload levels 

and child care, and it would require an annual report on how 

states are achieving their performance goals. 

Child Welfare and Foster Care. The bill would allow Indian tribes 

and tribal organizations to operate their own foster care programs, 

with direct reimbursement from the federal government. As a result, CBO estimates that more children would be covered by foster 

care and that on a net basis, states and Indian tribes would spend 

about $60 million over the 2006–2010 period as a result of this option. 

Supplemental Security Income. The bill would extend from seven 

years to nine years the amount of time that an asylee and refugee 

could remain eligible for SSI benefits. Most states provide optional 

supplemental benefits to SSI recipients. Assuming they make no 

changes to their benefit packages, costs would increase. CBO has 

not estimated these additional costs, but they would be incurred at 

the option of the state and would only result from benefits provided 

to an estimated 4,600 people over a two-year period. CBO also estimates that Medicaid spending would increase; the state portion of 

those additional costs would total about $110 million over the 

2006–2010 period. 

States that provide supplemental benefits to SSI recipients 

would realize net savings as a result of additional eligibility reviews required by the bill. States would also save about $175 million over the 2006–2010 period as a result of lower Medicaid spending. 

Estimated impact on the private sector: The bill contains a private-sector mandate as defined in the Unfunded Mandates Reform 

Act. Section 321 would require the administrator of a group health 

122

plan to notify a State child support enforcement agency under certain circumstances when a child loses health care coverage. The 

cost of this mandate would not exceed the threshold established by 

UMRA ($123 million in 2005, adjusted annually for inflation). 

Estimate prepared by: Federal costs: Sheila Dacey—TANF, Child 

Support, and Child Care; Christina Hawley Sadoti—Child Welfare; 

Geoffrey Gerhardt—Supplemental Security Income; Jeanne De Sa 

and Eric Rollins—Medicaid and SCHIP; Kathleen FitzGerald—Abstinence Education. Impact on State, Local, and Tribal Governments: Leo Lex. Impact on the Private Sector: Molly Dahl. 

Estimate approved by: Robert A. Sunshine, Assistant Director for 

Budget Analysis.

VI. CHANGES IN EXISTING LAW 

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman): 

SOCIAL SECURITY ACT 

* * * * * * *

TITLE IV—GRANTS TO STATES FOR AID AND SERVICES 

TO NEEDY FAMILIES WITH CHILDREN AND FOR 

CHILD-WELFARE SERVICES 

* * * * * * *

PART A—BLOCK GRANTS TO STATES FOR TEMPORARY 

ASSISTANCE FOR NEEDY FAMILIES

SEC. 401. PURPOSE. 

(a) IN GENERAL.—The purpose of this part is to increase the 

flexibility of States in operating a program designed to—

(1) provide assistance to needy families so that children may 

be cared for in their own homes or in the homes of relatives; 

(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 

(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing 

and reducing the incidence of these pregnancies; and 

(4) encourage the formation and maintenance of øtwo-parent 

families¿ healthy 2-parent married families, and encourage responsible fatherhood. 

(b) NO INDIVIDUAL ENTITLEMENT.—This part shall not be interpreted to entitle any individual or family to assistance under any 

State program funded under this part. 

SEC. 402. ELIGIBLE STATES; STATE PLAN. 

(a) IN GENERAL.—As used in this part, the term ‘‘eligible State’’ 

means, with respect to a fiscal year, a State that, during the 27-

month period ending with the close of the 1st quarter of the fiscal 

year, has submitted to the Secretary a plan that the Secretary has 

found includes the following: 

(1) OUTLINE OF FAMILY ASSISTANCE PROGRAM.—

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(A) GENERAL PROVISIONS.—A written document that outlines how the State intends to do the following: 

(i) Conduct a program, designed to serve all political 

subdivisions in the State (not necessarily in a uniform 

manner), that provides assistance to needy families 

with (or expecting) children and provides parents with 

job preparation, work, and support services to enable 

them to leave the program and become self-sufficient. 

ø(ii) Require a parent or caretaker receiving assistance under the program to engage in work (as defined 

by the State) once the State determines the parent or 

caretaker is ready to engage in work, or once the parent or caretaker has received assistance under the 

program for 24 months (whether or not consecutive), 

whichever is earlier, consistent with section 407(e)(2).¿

ø(iii) Ensure that parents and caretakers receiving 

assistance under the program engage in work activities in accordance with section 407.¿

(ii) Require an adult or minor child head of household receiving assistance under the program to engage 

in work or alternative self-sufficiency activities (as defined by the State), consistent with section 407(e)(2). 

(iii)(I) Require families receiving assistance under 

the program that—

(I) include an adult or minor child head of 

household to engage in activities in accordance 

with family self-sufficiency plans developed pursuant to section 408(b); and 

(II) at State option, only consist of a child or 

children, to engage in activities in accordance with 

such plans that specify the supportive services the 

State intends to provide for such families and provide for regular interaction with the families but 

do not require participation in a work activity described in section 407(d) (other than paragraph 

(11) of such section).

(iv) Take such reasonable steps as the State deems 

necessary to restrict the use and disclosure of information about individuals and families receiving assistance under the program attributable to funds provided 

by the Federal Government. 

ø(v) Establish goals and take action to prevent and 

reduce the incidence of out-of-wedlock pregnancies, 

with special emphasis on teenage pregnancies, and establish numerical goals for reducing the illegitimacy 

ratio of the State (as defined in section 

403(a)(2)(C)(iii)) for calendar years 1996 through 

2005.¿

(v) Establish specific measurable performance objectives for pursuing the purposes of the program funded 

under this part or with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)) as described in section 401(a), including by—

(I) establishing objectives (as determined by the 

State) after giving consideration to the criteria 

124

used by the Secretary in establishing performance 

targets under section 403(a)(4)(C) (with respect to 

workplace attachment and advancement), and 

such additional criteria related to other purposes 

of the program under this part as described in section 401(a) as the Secretary, in consultation with 

the National Governors’ Association, the National 

Conference of State Legislatures, and the American 

Public Human Services Association, shall establish; and 

(II) describing the methodology that the State 

will use to measure State performance in relation 

to each such objective. 

(vi) Describe any strategies and programs the State 

is using or plans to use to address—

(I) employment retention and advancement for 

recipients of assistance under the program, including placement into high-demand jobs, and whether 

the jobs are identified using labor market information; 

(II) efforts to reduce teen pregnancy; 

(III) services for struggling and noncompliant 

families, and for clients with special problems; and 

(IV) program integration, including the extent to 

which employment and training services under the 

program are provided through the One-Stop delivery system created under the Workforce Investment 

Act of 1998, and the extent to which former recipients of such assistance have access to additional 

core, intensive, or training services funded through 

such Act.

ø(vi)¿ (vii) Conduct a program, designed to reach 

State and local law enforcement officials, the education system, and relevant counseling services, that 

provides education and training on the problem of 

statutory rape so that teenage pregnancy prevention 

programs may be expanded in scope to include men.

‘‘(viii) Encourage equitable treatment of healthy 2-

parent married families under the program referred to 

in clause (i).

(B) SPECIAL PROVISIONS.—

ø(i) The document shall indicate whether the State 

intends to treat families moving into the State from 

another State differently than other families under the 

program, and if so, how the State intends to treat such 

families under the program.¿

ø(ii)¿ (i) The document shall indicate whether the 

State intends to provide assistance under the program 

to individuals who are not citizens of the United 

States, and if so, shall include an overview of such assistance. 

ø(iii)¿ (ii) The document shall set forth objective criteria for the delivery of benefits and the determination 

of eligibility and for fair and equitable treatment, including an explanation of how the State will provide 

125

opportunities for recipients who have been adversely 

affected to be heard in a State administrative or appeal process.

(iii) If the State is undertaking any strategies or programs to engage faith-based organizations in the delivery of services funded under this part, or that otherwise 

relate to section 104 of the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996, the document shall describe such strategies and programs. 

(iv) The document shall describe strategies to improve program management and performance. 

(v) The document shall include, to the extent applicable with respect to each program that provides assistance that will be funded under this part or with qualified State expenditures (as defined in section 

409(a)(7)(B)(i)), a description of—

(I) the applicable financial and nonfinancial eligibility rules for assistance provided under the 

program, including income eligibility thresholds, 

the treatment of earnings, asset eligibility rules, 

and excluded forms of income; 

(II) the amount of assistance provided to needy 

families, and the methodology for determining assistance amounts; and 

(III) the applicable time limit policies, including 

the length of the time limit, exemption and extension policies, and procedures for providing services 

to families reaching the time limit and who have 

lost assistance due to time limits. 

(vi) The document shall set forth the criteria for applying section 407(c)(6)(E) to an adult recipient or 

minor child head of household who is the parent or 

caretaker relative for a child or adult dependent for 

care. 

(vii) The document shall describe how the State informs families receiving assistance under the State program funded under this part that do not include an 

adult or minor child head of household of the information required to be provided to other families under 

section 408(b)(2)(G) (relating to work support and other 

assistance for which the family may be eligible). 

(viii) The document shall describe how the State will 

ensure equitable access to benefits and services provided under the program for each member of an Indian 

tribe or tribal organization, who is domiciled in the 

State and is not eligible for assistance under a tribal 

family assistance plan approved under section 412.

ø(iv) Not later than 1 year after the date of enactment of this section, unless the chief executive officer 

of the State opts out of this provision by notifying the 

Secretary, a State shall, consistent with the exception 

provided in section 407(e)(2), require a parent or caretaker receiving assistance under the program who, 

after receiving such assistance for 2 months is not exempt from work requirements and is not engaged in 

126

work, as determined under section 407(c), to participate in community service employment, with minimum hours per week and tasks to be determined by 

the State.¿

(2) CERTIFICATION THAT THE STATE WILL OPERATE A CHILD

SUPPORT ENFORCEMENT PROGRAM.—A certification by the chief 

executive officer of the State that, during the fiscal year, the 

State will operate a child support enforcement program under 

the State plan approved under part D. 

(3) CERTIFICATION THAT THE STATE WILL OPERATE A FOSTER

CARE AND ADOPTION ASSISTANCE PROGRAM.—A certification by 

the chief executive officer of the State that, during the fiscal 

year, the State will operate a foster care and adoption assistance program under the State plan approved under part E, 

and that the State will take such actions as are necessary to 

ensure that children receiving assistance under such part are 

eligible for medical assistance under the State plan under title 

XIX. 

(4) CERTIFICATION OF THE ADMINISTRATION OF THE PRO- GRAM.—A certification by the chief executive officer of the 

State specifying which State agency or agencies will administer 

and supervise the program referred to in paragraph (1) for the 

fiscal year, which shall include assurances that local and tribal

governments and private sector organizations—

(A) have been consulted regarding the plan and design 

of welfare services in the State so that services are provided in a manner appropriate to local and tribal populations; and 

(B) have had at least 45 days to submit comments on the 

plan and the design of such services. 

(5) CERTIFICATION THAT THE STATE WILL PROVIDE INDIANS

WITH EQUITABLE ACCESS TO ASSISTANCE.—A certification by the 

chief executive officer of the State that, during the fiscal year, 

the State øwill provide each member of an Indian tribe, who 

is domiciled in the State and is not eligible for assistance 

under a tribal family assistance plan approved under section 

412, with equitable access to assistance under the State program funded under this part attributable to funds provided by 

the Federal Government.¿

(A) consult with each Indian tribe and tribal organization located within the State regarding the State plan in 

order to ensure equitable access to benefits and services provided under the plan for any member of such a tribe or organization who is not eligible for assistance under a tribal 

family assistance plan approved under section 412; and 

(B) provide each member of an Indian tribe or tribal organization, who is domiciled in the State and is not eligible 

for assistance under a tribal family assistance plan approved under section 412, with equitable access to assistance under the State program funded under this part attributable to funds provided by the Federal Government. 

* * * * * * *

ø(b) PLAN AMENDMENTS.—Within 30 days after a State amends 

a plan submitted pursuant to subsection (a), the State shall notify 

the Secretary of the amendment.¿

127

(b) PROCEDURES FOR SUBMITTING AND AMENDING STATE

PLANS.—

(1) STANDARD STATE PLAN FORMAT.—The Secretary shall, 

after notice and public comment, develop a proposed Standard 

State Plan Form to be used by States under subsection (a) and 

for purposes of filing an amendment to the State plan in accordance with paragraph (5). Such form shall be finalized by 

the Secretary for use by States not later than 9 months after the 

date of enactment of the Personal Responsibility and Individual 

Development for Everyone Act. 

(2) REQUIREMENT FOR COMPLETED PLAN USING STANDARD

STATE PLAN FORMAT BY FISCAL YEAR 2007.—Notwithstanding 

any other provision of law, each State shall submit a complete 

State plan, using the Standard State Plan Form developed 

under paragraph (1), not later than October 1, 2006, and all 

subsequent State plan submissions, including any State plan 

amendments, shall be made using such form. 

(3) PUBLIC NOTICE AND COMMENT.—Prior to submitting a 

State plan to the Secretary under this section, the State shall—

(A) make the proposed State plan available to the public 

through an appropriate State maintained Internet website 

and through other means as the State determines appropriate; 

(B) allow for a reasonable public comment period of not 

less than 45 days; and 

(C) make comments received concerning such plan or, at 

the discretion of the State, a summary of the comments received available to the public through such website and 

through other means as the State determines appropriate. 

(4) PUBLIC AVAILABILITY OF STATE PLAN.—A State shall ensure that the State plan that is in effect for any fiscal year is 

available to the public through an appropriate State maintained Internet website and through other means as the State 

determines appropriate. 

(5) AMENDING THE STATE PLAN.—A State shall file an amendment to the State plan with the Secretary if the State determines that there has been a material change in any information 

required to be included in the State plan or any other information that the State has included in the plan, including substantial changes in the use of funding. Prior to submitting an 

amendment to the State plan to the Secretary, the State shall—

(A) make the proposed amendment available to the public 

as provided for in paragraph (3)(A); 

(B) allow for a reasonable public comment period of not 

less than 45 days; and 

(C) make the comments available as provided for in 

paragraph (3)(C). 

(6) STATE OPTION TO DELAY SUBMISSION OF PLAN.—A State 

required to submit a State plan under this part during the period that begins on the date of enactment of the Personal Responsibility and Individual Development for Everyone Act and 

ends on September 30, 2006, may wait until October 1, 2006, 

to submit such plan using the Standard State Plan Form developed under paragraph (1).

128

ø(c) PUBLIC AVAILABILITY OF STATE PLAN SUMMARY.—The State 

shall make available to the public a summary of any plan or plan 

amendment submitted by the State under this section.¿

SEC. 403. GRANTS TO STATES. 

(a) GRANTS.— (1) FAMILY ASSISTANCE GRANT.— (A) IN GENERAL.—Each eligible State shall be entitled to 

receive from the Secretary, for each of fiscal years ø1996, 

1997, 1998, 1999, 2000, 2001, 2002, and 2003¿ 2006 

through 2010, a grant in an amount equal to the State 

family assistance grant payable to the State for the fiscal 

year.

(B) STATE FAMILY ASSISTANCE GRANT.—The State family 

assistance grant payable to a State for a fiscal year shall 

be the amount that bears the same ratio to the amount 

specified in subparagraph (C) of this paragraph as the 

amount required to be paid to the State under this paragraph for fiscal year 2002 (determined without regard to 

any reduction pursuant to section 409 or 412(a)(1)) bears 

to the total amount required to be paid under this paragraph for fiscal year 2002 (as so determined). 

(C) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated øfor fiscal year 2003 $16,566,542,000 for 

grants under this paragraph¿ for each of fiscal years 2006 through 2010, $16,566,542,000 for grants under this paragraph.

ø(2) BONUS TO REWARD DECREASE IN ILLEGITIMACY RATIO.— ø(A) IN GENERAL.—Each eligible State shall be entitled 

to receive from the Secretary a grant for each bonus year. 

ø(B) AMOUNT OF GRANT.— ø(i) IN GENERAL.—If, for a bonus year, none of the 

eligible States is Guam, the Virgin Islands, or American Samoa, then the amount of the grant shall be—

ø(I) $20,000,000 if there are 5 eligible States; or 

ø(II) $25,000,000 if there are fewer than 5 eligible States. 

ø(ii) AMOUNT IF CERTAIN TERRITORIES ARE ELIGI- BLE.—If, for a bonus year, Guam, the Virgin Islands, 

or American Samoa is an eligible State, then the 

amount of the grant shall be—

ø(I) in the case of such a territory, 25 percent of 

the mandatory ceiling amount (as defined in section 1108(c)(4)) with respect to the territory; and 

ø(II) in the case of a State that is not such a 

territory—

ø(aa) if there are 5 eligible States other than such territories, $20,000,000, minus 1⁄5

of the total amount of the grants payable 

under this paragraph to such territories for 

the bonus year; or 

ø(bb) if there are fewer than 5 such eligible 

States, $25,000,000, or such lesser amount as 

may be necessary to ensure that the total 

amount of grants payable under this paraVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00132 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
129

graph for the bonus year does not exceed 

$100,000,000. 

ø(C) DEFINITIONS.—As used in this paragraph: 

ø(i) ELIGIBLE STATE.—

ø(I) IN GENERAL.—The term ‘‘eligible State’’ 

means a State that the Secretary determines 

meets the following requirements: 

ø(aa) The State demonstrates that the illegitimacy ratio of the State for the most recent 

2-year period for which such information is 

available decreased as compared to the illegitimacy ratio of the State for the previous 2-

year period, and the magnitude of the decrease for the State for the period is not exceeded by the magnitude of the corresponding 

decrease for 5 or more other States for the period. In the case of a State that is not a territory specified in subparagraph (B), the comparative magnitude of the decrease for the 

State shall be determined without regard to 

the magnitude of the corresponding decrease 

for any such territory. 

ø(bb) The rate of induced pregnancy terminations in the State for the calendar year for 

which the most recent data are available is 

less than the rate of induced pregnancy terminations in the State for calendar year 1995. 

ø(II) DISREGARD OF CHANGES IN DATA DUE TO

CHANGED REPORTING METHODS.—In making the 

determination required by subclause (I), the Secretary shall disregard—

ø(aa) any difference between the illegitimacy ratio of a State for a fiscal year and the 

illegitimacy ratio of a State for fiscal year 

1995 which is attributable to a change in 

State methods of reporting data used to calculate the illegitimacy ratio; and 

ø(bb) any difference between the rate of induced pregnancy terminations in a State for a 

calendar year and such rate for calendar year 

1995 which is attributable to a change in 

State methods of reporting data used to calculate such rate. 

ø(ii) BONUS YEAR.—The term ‘‘bonus year’’ means 

calendar years 1999, 2000, 2001, 2002, and 2003. 

ø(iii) ILLEGITIMACY RATIO.—The term ‘‘illegitimacy 

ratio’’ means, with respect to a State and a period—

ø(I) the number of out-of-wedlock births to 

mothers residing in the State that occurred during 

the period; divided by 

ø(II) the number of births to mothers residing in 

the State that occurred during the period. 

ø(D) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

130

appropriated for fiscal years 1999 through 2003, such 

sums as are necessary for grants under this paragraph.¿

(2) HEALTHY MARRIAGE PROMOTION GRANTS.— (A) AUTHORITY.— (i) IN GENERAL.—The Secretary shall award competitive grants to States and Indian tribes and tribal organizations for not more than 50 percent of the cost of developing and implementing innovative programs to 

promote and support healthy 2-parent married families. 

(ii) USE OF OTHER TANF FUNDS.—A State or Indian 

tribe or tribal organization with an approved tribal 

family assistance plan may use funds provided under 

other grants made under this part for all or part of the 

expenditures incurred for the remainder of the costs described in clause (i). In the case of a State, any such 

funds expended shall not be considered qualified State 

expenditures for purposes of section 409(a)(7). 

(B) HEALTHY MARRIAGE PROMOTION ACTIVITIES.—Funds 

provided under subparagraph (A) and corresponding State 

matching funds shall be used to support any of the following programs or activities: 

(i) Public advertising campaigns on the value of 

marriage and the skills needed to increase marital stability and health. 

(ii) Education in high schools on the importance of 

healthy marriages and the characteristics of other 

healthy relationships experienced throughout life, including education on the importance of grounding all 

relationships in mutual respect and how earlier 

healthy relationships are the building blocks for later 

healthy marital relationships. 

(iii) Marriage education, marriage skills, and relationship skills programs, that may include parenting 

skills, financial management, conflict resolution, and 

job and career advancement, for non-married pregnant 

women, non-married expectant fathers, and non-married recent parents. 

(iv) Pre-marital education and marriage skills training for engaged couples and for couples or individuals 

interested in marriage. 

(v) Marriage enhancement and marriage skills training programs for married couples. 

(vi) Divorce reduction programs that teach relationship skills. 

(vii) Marriage mentoring programs which use married couples as role models and mentors. 

(viii) Programs to reduce the disincentives to marriage in means-tested aid programs, if offered in conjunction with any activity described in this subparagraph. 

(C) VOLUNTARY PARTICIPATION.— (i) IN GENERAL.—Participation in programs or activities described in any of clauses (iii) through (vii) of 

subparagraph (B) shall be voluntary. 

131

(ii) ASSURANCE OF INFORMED CONSENT AND OPTION

TO DISENROLL.—Each State or Indian tribe or tribal 

organization that carries out programs or activities described in any of clauses (iii) through (vii) of subparagraph (B) shall provide the Secretary with an assurance that each recipient of assistance under the State 

program funded under this part who elects to participate in such programs or activities shall be informed, 

prior to making such election—

(I) that such participation is voluntary; 

(II) that the recipient may elect at any time to 

disenroll from such programs or activities by notifying the State or Indian tribe or tribal organization that the recipient no longer wants to participate in such programs or activities; 

(III) of the process, if any, by which a recipient 

who chooses to withdraw from, or fails to participate in, such programs or activities may be required to follow to become engaged in other programs or activities that are not programs or activities described in clauses (iii) through (vii) of subparagraph (B); and 

(IV) that the State may reassign a recipient at 

any time, in accordance with the requirements of 

section 408(b), to other activities that are not programs or activities described in clauses (iii) 

through (vii) of subparagraph (B). 

(iii) NO SANCTION FOR REFUSAL OR FAILURE TO PARTICIPATE.—

(I) IN GENERAL.—No State or Indian tribe or 

tribal organization shall deny or reduce assistance 

to a recipient of assistance under the State program funded under this part solely on the basis of 

the recipient’s withdrawal from, or failure to, participate in programs or activities described in 

clauses (iii) through (vii) of subparagraph (B). 

(II) RULE OF CONSTRUCTION.—Nothing in this 

subparagraph shall be construed as precluding a 

State or Indian tribe or tribal organization from 

requiring a recipient of assistance under the State 

program funded under this part to engage in programs or activities that are not programs or activities described in clauses (iii) through (vii) of subparagraph (B) or to sanction a recipient for failure 

to engage in such programs or activities or to follow any such procedures the State may establish to 

enroll a recipient in such other programs or activities. 

(D) GENERAL RULES GOVERNING USE OF FUNDS.—The 

rules of section 404, other than subsection (b) of that section, shall not apply to a grant made under this paragraph. 

(E) REQUIREMENTS FOR RECEIPT OF FUNDS.—A State or 

Indian tribe or tribal organization may not be awarded a 

grant under this paragraph unless the State or Indian tribe 

132

or tribal organization, as a condition of receiving funds 

under such a grant—

(i) consults with domestic violence organizations that 

have demonstrated expertise working with survivors of 

domestic violence in developing policies, procedures, 

programs and training necessary to appropriately address domestic violence in families served by programs 

and activities funded under such grant; 

(ii) describes in the application for a grant under 

this paragraph—

(I) how the programs or activities proposed to be 

conducted will appropriately address issues of domestic violence; and 

(II) what the State or Indian tribe or tribal organization, will do, to the extent relevant, to ensure 

that participation in such programs or activities is 

voluntary, and to inform potential participants 

that their involvement is voluntary; 

(iii) establishes a written protocol for providers and 

administrators of programs and activities relevant to 

the grant that—

(I) provides for helping identify instances or 

risks of domestic violence; and 

(II) specifies the procedures for making service 

referrals and providing protections and appropriate assistance for identified individuals and 

families; 

(iv) establishes performance goals for funded programs and activities that clarify the primary objective 

of such funded programs and activities is to increase 

the incidence and quality of healthy marriages and not 

solely to expand the number or percentage of married 

couples; and 

(v) submits the annual reports required under subparagraph (F). 

(F) ANNUAL REPORTS TO THE SECRETARY.—Each State 

and Indian tribe or tribal organization awarded a grant 

under this paragraph shall submit to the Secretary an annual report on the programs and activities funded under 

the grant that includes the following: 

(i) A description of the written protocols developed in 

accordance with the requirements of subparagraph 

(E)(iii) for each program or activity funded under the 

grant and how such protocols are used, including specific policies and procedures for addressing domestic 

violence issues within each program or activity funded 

under the grant and how confidentiality issues are addressed. 

(ii) The name of each individual, organization, or entity that was consulted in the development of such protocols. 

(iii) A description of each individual, organization, 

or entity (if any) that provided training on domestic violence for the State, Indian tribe or tribal organization, 

or for any subgrantees. 

133

(iv) A description of any implementation issues identified with respect to domestic violence and how such 

issues were addressed. 

(G) BIANNUAL REPORTS TO CONGRESS.—Not later than 24 

months after the date of enactment of the Personal Responsibility and Individual Development for Everyone Act, and 

every 6 months thereafter, the Secretary shall submit to 

Congress a report regarding the programs and activities 

funded with grants awarded under this paragraph. Each 

report submitted in accordance with this subparagraph 

shall include the following: 

(i) The name of each program or activity funded with 

such grants and the name of each grantee and subgrantee. 

(ii) The total number of individuals served under 

programs or activities funded under the grant. 

(iii) The total number of individuals who—

(I) completed a program or activity funded under 

the grant, including the number of such individuals who received assistance under the State program funded under this part or with qualified 

State expenditures (as defined in section 

409(a)(7)(B)(i)) while participating in such program or activity; and 

(II) did not complete such a program or activity, 

including due to ceasing to receive assistance 

under the State program funded under this part or 

with qualified State expenditures (as defined in 

section 409(a)(7)(B)(i)) or for other reasons. 

(iv) A description of the types of services offered 

under such programs or activities. 

(v) The criteria for selection of programs or activities 

to be funded under such grant with respect to the 

award of grants by the Secretary and the awarding of 

funds to subgrantees. 

(vi) A description of the activities carried out by the 

Secretary to support grantees and subgrantees in responding to domestic violence issues. 

(v) A summary of the written domestic violence protocols used by grantees and subgrantees. 

(vii) A summary of who the grantees and subgrantees 

consulted with in developing such protocols. 

(viii) A summary of the training provided to grantees 

and subgrantees on domestic violence. 

(ix) A list of the organizations, entities, and activities 

funded under sections 103(c) and 114(e) of the Personal 

Responsibility and Individual Development for Everyone Act. 

(H) DOMESTIC VIOLENCE DEFINED.—In this paragraph, 

the term ‘domestic violence’ has the meaning given that 

term in section 402(a)(7)(B). 

(I) APPROPRIATION.—

(i) IN GENERAL.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there 

134

are appropriated for each of fiscal years 2005 through 

2010, $100,000,000 for grants under this paragraph.

(ii) EXTENDED AVAILABILITY OF FUNDS.— (I) IN GENERAL.—Funds appropriated under 

clause (i) for each of fiscal years 2006 through 

2010 shall remain available to the Secretary until 

expended. 

(II) AUTHORITY FOR GRANT RECIPIENTS.—A State 

or Indian tribe or tribal organization may use 

funds made available under a grant awarded 

under this paragraph without fiscal year limitation pursuant to the terms of the grant.

(3) SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN

CERTAIN STATES.— (A) IN GENERAL.—Each qualifying State shall, subject to 

subparagraph (F), be entitled to receive from the Secretary—

* * * * * * *

(H) REAUTHORIZATION.—Notwithstanding any other provision of this paragraph—

(i) any State that was a qualifying State under this 

paragraph for fiscal year 2001 or any prior fiscal year 

shall be entitled to receive from the Secretary for each 

of fiscal years ø2002 and 2003¿ 2006 through 2009 a 

grant in an amount equal to the amount required to 

be paid to the State under this paragraph for the most 

recent fiscal year in which the State was a qualifying 

State; 

(ii) subparagraph (G) shall be applied as if ø‘‘March 

31, 2005’’¿ fiscal year 2009 were substituted for ‘‘fiscal 

year 2001’’; and 

(iii) out of any money in the Treasury of the United 

States not otherwise appropriated, there are appropriated for each of fiscal years ø2002 and 2003¿ 2006 

through 2009 such sums as are necessary for grants 

under this subparagraph. 

ø(4) BONUS TO REWARD HIGH PERFORMANCE STATES.— ø(A) IN GENERAL.—The Secretary shall make a grant 

pursuant to this paragraph to each State for each bonus 

year for which the State is a high performing State. 

ø(B) AMOUNT OF GRANT.— ø(i) IN GENERAL.—Subject to clause (ii) of this subparagraph, the Secretary shall determine the amount 

of the grant payable under this paragraph to a high 

performing State for a bonus year, which shall be 

based on the score assigned to the State under subparagraph (D)(i) for the fiscal year that immediately 

precedes the bonus year. 

ø(ii) LIMITATION.—The amount payable to a State 

under this paragraph for a bonus year shall not exceed 

5 percent of the State family assistance grant. 

ø(C) FORMULA FOR MEASURING STATE PERFORMANCE.— Not later than 1 year after the date of the enactment of 

the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the Secretary, in consultation with 

135

the National Governors’ Association and the American 

Public Welfare Association, shall develop a formula for 

measuring State performance in operating the State program funded under this part so as to achieve the goals set 

forth in section 401(a). 

ø(D) SCORING OF STATE PERFORMANCE; SETTING OF PER- FORMANCE THRESHOLDS.—For each bonus year, the Secretary shall—

ø(i) use the formula developed under subparagraph 

(C) to assign a score to each eligible State for the fiscal 

year that immediately precedes the bonus year; and 

ø(ii) prescribe a performance threshold in such a 

manner so as to ensure that—

ø(I) the average annual total amount of grants 

to be made under this paragraph for each bonus 

year equals $200,000,000; and 

ø(II) the total amount of grants to be made 

under this paragraph for all bonus years equals 

$1,000,000,000. 

ø(E) DEFINITIONS.—As used in this paragraph: 

ø(i) BONUS YEAR.—The term ‘‘bonus year’’ means fiscal years 1999, 2000, 2001, 2002, and 2003. 

ø(ii) HIGH PERFORMING STATE.—The term ‘‘high performing State’’ means, with respect to a bonus year, 

an eligible State whose score assigned pursuant to 

subparagraph (D)(i) for the fiscal year immediately 

preceding the bonus year equals or exceeds the performance threshold prescribed under subparagraph 

(D)(ii) for such preceding fiscal year. 

ø(F) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated for fiscal years 1999 through 2003 

$1,000,000,000 for grants under this paragraph.¿

(4) BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.—

(A) IN GENERAL.—The Secretary shall make a grant pursuant to this paragraph to each State for each bonus year 

for which the State is an employment achievement State. 

(B) AMOUNT OF GRANT.— (i) IN GENERAL.—Subject to clause (ii), the Secretary 

shall determine the amount of the grant payable under 

this paragraph to an employment achievement State 

for a bonus year, which shall be based on the performance of the State as determined under subparagraph 

(D)(i) for the fiscal year that immediately precedes the 

bonus year. 

(ii) LIMITATION.—The amount payable to a State 

under this paragraph for a bonus year shall not exceed 

5 percent of the State family assistance grant. 

(C) FORMULA FOR MEASURING STATE PERFORMANCE.— (i) IN GENERAL.—Subject to clause (ii), not later than 

October 1, 2006, the Secretary, in consultation with the 

States, shall develop a formula for measuring State 

performance in operating the State program funded 

under this part so as to achieve the goal of workplace 

attachment and advancement for families receiving asVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00139 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
136

sistance under the program (and for families diverted 

from receiving such assistance if, and only to the extent 

that, the Secretary determines that it is possible to 

measure State performance with respect to such families), as measured on an absolute basis and on the 

basis of improvement in State performance. 

(ii) SPECIAL RULE FOR BONUS YEARS 2006 AND 2007.— For the purposes of awarding a bonus under this paragraph for bonus year 2006 or 2007, the Secretary may 

measure the performance of a State in fiscal year 2005 

or 2006 (as the case may be) using the job entry rate, 

job retention rate, and earnings gain rate components 

of the formula developed under section 403(a)(4)(C) as 

in effect immediately before the effective date of this 

paragraph. 

(D) DETERMINATION OF STATE PERFORMANCE.—For each 

bonus year, the Secretary shall—

(i) use the formula developed under subparagraph 

(C) to determine the performance of each eligible State 

for the fiscal year that precedes the bonus year; and 

(ii) prescribe performance standards in such a manner so as to ensure that—

(I) the average annual total amount of grants to 

be made under this paragraph for—

(aa) each of bonus years 2006 through 2008 

equals $50,000,000; and 

(bb) each of bonus years 2009 through 2011 

equals $100,000,000; and 

(II) the total amount of grants to be made under 

this paragraph for all bonus years equals 

$450,000,000. 

(E) DEFINITIONS.—In this paragraph: 

(i) BONUS YEAR.—The term ‘‘bonus year’’ means each 

of fiscal years 2006 through 2011. 

(ii) EMPLOYMENT ACHIEVEMENT STATE.—The term 

‘‘employment achievement State’’ means, with respect to 

a bonus year, an eligible State whose performance determined pursuant to subparagraph (D)(i) for the fiscal 

year preceding the bonus year equals or exceeds the 

performance standards prescribed under subparagraph 

(D)(ii) for such preceding fiscal year. 

(F) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated for the period of fiscal years 2006 through 

2011, $450,000,000 for grants under this paragraph. 

(G) GRANTS FOR INDIAN TRIBES.—

(i) RESERVATION OF FUNDS.—Of the amount appropriated under subparagraph (F), the Secretary shall reserve an amount equal to 2 percent of such amount for 

making grants to Indian tribes. 

(ii) APPLICATION.—This paragraph shall apply with 

respect to Indian tribes in the same manner in which 

this paragraph applies with respect to States. 

(iii) CONSULTATION.—The Secretary shall consult 

with Indian tribes in determining the criteria under 

137

which to make grants to Indian tribes and tribal organizations under this paragraph.

(5) WELFARE-TO-WORK GRANTS.—

(A) FORMULA GRANTS.—

* * * * * * *

(III) The State has agreed to negotiate in good 

faith with the Secretary of Health and Human 

Services with respect to the substance and funding of any evaluation under section ø413(j)¿

413(i), and to cooperate with the conduct of any 

such evaluation. 

* * * * * * *

(F) FUNDING FOR EVALUATIONS OF WELFARE-TO-WORK

PROGRAMS.—0.6 percent of the amount specified in subparagraph (H) for fiscal year 1998 and $9,000,000 of the 

amount so specified for fiscal year 1999 shall be reserved 

for use by the Secretary to carry out section ø413(j)¿

413(i). 

(G) FUNDING FOR EVALUATION OF ABSTINENCE EDUCATION PROGRAMS.—

(i) IN GENERAL.—0.2 percent of the amount specified 

in subparagraph (H) for fiscal year 1998 and 

$3,000,000 of the amount so specified for fiscal year 

1999 shall be reserved for use by the Secretary to 

evaluate programs under section 510, directly or 

through grants, contracts, or interagency agreements. 

(ii) AUTHORITY TO USE FUNDS FOR EVALUATIONS OF

WELFARE-TO-WORK PROGRAMS.—Any such amount not 

required for such evaluations shall be available for use 

by the Secretary to carry out section ø413(j)¿ 413(i). 

* * * * * * *

(6) GRANTS TO CAPITALIZE AND DEVELOP SUSTAINABLE SOCIAL

SERVICES.—

(A) AUTHORITY TO AWARD GRANTS.—The Secretary may 

award grants to entities for the purpose of capitalizing and 

developing the role of sustainable social services that are 

critical to the success of moving recipients of assistance 

under a State program funded under this part to work. 

(B) APPLICATION.— (i) IN GENERAL.—An entity desiring a grant under 

this paragraph shall submit an application to the Secretary, at such time, in such manner, and, subject to 

clause (ii), containing such information as the Secretary may require. 

(ii) STRATEGY FOR GENERATION OF REVENUE.—An 

application for a grant under this paragraph shall include a description of the capitalization strategy that 

the entity intends to follow to develop a program that 

generates its own source of ongoing revenue while assisting recipients of assistance under a State program 

funded under this part. 

(C) USE OF FUNDS.—

138

(i) IN GENERAL.—Funds made available under a 

grant made under this paragraph may be used for the 

acquisition, construction, or renovation of facilities or 

buildings. 

(ii) GENERAL RULES GOVERNING USE OF FUNDS.—The 

rules of section 404, other than subsection (b) of that 

section, shall not apply to a grant made under this 

paragraph. 

(D) EVALUATION AND REPORT.—The Secretary shall, by 

grant, contract, or interagency agreement, conduct an evaluation of the programs developed with grants awarded 

under this paragraph and shall submit a report to Congress on the results of such evaluation. 

(E) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Secretary for the purpose 

of carrying out this paragraph, $40,000,000 for each of fiscal years 2006 through 2010. 

(7) GRANTS FOR LOW-INCOME CAR OWNERSHIP PROGRAMS.—

(A) PURPOSES.—The purposes of this paragraph are to—

(i) assist low-income families with children obtain 

dependable, affordable automobiles to improve their 

employment opportunities and access to training; and 

(ii) provide incentives to States, Indian tribes or tribal organizations, localities, and nonprofit entities to develop and administer programs that provide assistance 

with automobile ownership for low-income families. 

(B) DEFINITIONS.—In this paragraph: 

(i) LOCALITY.—The term ‘‘locality’’ means a municipality that does not administer a State program funded under this part. 

(ii) LOW-INCOME FAMILY WITH CHILDREN.—The term 

‘‘low-income family with children’’ means a household 

that is eligible for benefits or services funded under the 

State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)). 

(iii) NONPROFIT ENTITY.—The term ‘‘nonprofit entity’’ 

means a school, local agency, organization, or institution owned and operated by 1 or more nonprofit corporations or associations, no part of the net earnings of 

which inures, or may lawfully inure, to the benefit of 

any private shareholder or individual. 

(C) AUTHORITY TO AWARD GRANTS.—The Secretary may 

award grants to States, counties, localities, Indian tribes or 

tribal organizations, and nonprofit entities to promote improving access to dependable, affordable automobiles by 

low-income families with children. 

(D) GRANT APPROVAL CRITERIA.—The Secretary shall establish criteria for approval of an application for a grant 

under this paragraph that include consideration of—

(i) the extent to which the proposal, if funded, is likely to improve access to training and employment opportunities and child care services by low-income families 

with children by means of car ownership; 

139

(ii) the level of innovation in the applicant’s grant 

proposal; and 

(iii) any partnerships between the public and private 

sector in the applicant’s grant proposal. 

(E) USE OF FUNDS.—

(i) IN GENERAL.—A grant awarded under this paragraph shall be used to administer programs that assist 

low-income families with children with dependable 

automobile ownership, and maintenance of, or insurance for, the purchased automobile. 

(ii) SUPPLEMENT NOT SUPPLANT.—Funds provided to 

a State, Indian tribe or tribal organization, county, or 

locality under a grant awarded under this paragraph 

shall be used to supplement and not supplant other 

State, county, or local public funds expended for car 

ownership programs. 

(iii) GENERAL RULES GOVERNING USE OF FUNDS.—

The rules of section 404, other than subsection (b) of 

that section, shall not apply to a grant made under 

this paragraph. 

(F) APPLICATION.—Each applicant desiring a grant under 

this paragraph shall submit an application to the Secretary 

at such time, in such manner, and accompanied by such information as the Secretary may reasonably require. 

(G) REVERSION OF FUNDS.—Any funds not expended by a 

grantee within 3 years after the date the grant is awarded 

under this paragraph shall be available for redistribution 

among other grantees in such manner and amount as the 

Secretary may determine, unless the Secretary extends by 

regulation the time period to expend such funds. 

(H) LIMITATION ON ADMINISTRATIVE COSTS OF THE SECRETARY.—Not more than an amount equal to 5 percent of 

the funds appropriated to make grants under this paragraph for a fiscal year shall be expended for administrative 

costs of the Secretary in carrying out this paragraph. 

(I) EVALUATION.—The Secretary shall, by grant, contract, 

or interagency agreement, conduct an evaluation of the programs administered with grants awarded under this paragraph. 

(J) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Secretary to make grants 

under this paragraph, $25,000,000 for each of fiscal years 

2006 through 2010.

(8) INNOVATIVE BUSINESS LINK PARTNERSHIP GRANTS.—

(A) IN GENERAL.—The Secretary and the Secretary of 

Labor (in this paragraph referred to as the ‘‘Secretaries’’) 

jointly shall award grants in accordance with this paragraph for projects proposed by eligible applicants based on 

the following: 

(i) The potential effectiveness of the proposed project 

in carrying out the activities described in subparagraph (E). 

(ii) Evidence of the ability of the eligible applicant to 

leverage private, State, or local resources. 

140

(iii) Evidence of the ability of the eligible applicant 

to coordinate with other organizations at the State or 

local level. 

(B) DEFINITION OF ELIGIBLE APPLICANT.— (i) IN GENERAL.—In this paragraph, the term ‘‘eligible applicant’’ means a private organization, a local 

workforce investment board established under section 

117 of the Workforce Investment Act of 1998 (29 U.S.C. 

2832), a State, a political subdivision of a State, or an 

Indian tribe or tribal organization. 

(ii) GRANTS TO PROMOTE BUSINESS LINKAGES.— (I) ADDITIONAL ELIGIBLE APPLICANT.—Only for 

purposes of grants to carry out the activities described in subparagraph (E)(i), the term ‘‘eligible 

applicant’’ includes an employer. 

(II) ADDITIONAL REQUIREMENT.—In order to 

qualify as an eligible applicant for purposes of 

subparagraph (E)(i), the applicant must demonstrate that the application has been developed by 

and will be implemented by a local or regional 

consortium that includes, at minimum, employers 

or employer associations, and education and training providers, in consultation with local labor organizations and social service providers that work 

with low-income families or individuals with disabilities. 

(C) REQUIREMENTS.— (i) IN GENERAL.—In awarding grants under this 

paragraph, the Secretaries shall—

(I) consider the needs of rural areas and cities 

with large concentrations of residents with an income that is less than 150 percent of the poverty 

line; and 

(II) ensure that—

(aa) all of the funds made available under 

this paragraph (other than funds reserved for 

use by the Secretaries under subparagraph 

(J)) shall be used for activities described in 

subparagraph (E); 

(bb) not less than 40 percent of the funds 

made available under this paragraph (other 

than funds so reserved) shall be used for activities described in subparagraph (E)(i); and 

(cc) not less than 40 percent of the funds 

made available under this paragraph (other 

than funds so reserved) shall be used for the 

activities described in subparagraph (E)(ii). 

(ii) CONTINUATION OF AVAILABILITY.—If any portion 

of the funds required to be used for activities referred 

to in item (bb) or (cc) of clause (i)(II) are not awarded 

in a fiscal year, such portion shall continue to be available in the subsequent fiscal year for the same activity, 

in addition to other amounts that may be available for 

such activities for that subsequent fiscal year. 

(D) DETERMINATION OF GRANT AMOUNT.—

141

(i) IN GENERAL.—Subject to clause (ii), in determining the amount of a grant to be awarded under 

this paragraph for a project proposed by an eligible applicant, the Secretaries shall take into account—

(I) the number and characteristics of the individuals to be served by the project; 

(II) the level of unemployment in the area to be 

served by the project; 

(III) the job opportunities and job growth in 

such area; 

(IV) the poverty rate for such area; and 

(V) such other factors as the Secretary deems appropriate in such area. 

(ii) MAXIMUM AWARD FOR GRANTS TO PROMOTE BUSINESS LINKAGES OR PROVIDE TRANSITIONAL JOBS PROGRAMS.—

(I) IN GENERAL.—In the case of a grant to carry 

out activities described in clause (i) or (ii) of subparagraph (E), an eligible applicant awarded a 

grant under this paragraph may not receive more 

than $10,000,000 per fiscal year under the grant. 

(II) RULE OF CONSTRUCTION.—Nothing in subclause (I) shall be construed as precluding an otherwise eligible applicant from receiving separate 

grants to carry out activities described in clause (i) 

or (ii) of subparagraph (E). 

(iii) GRANT PERIOD.—The period in which a grant 

awarded under this paragraph may be used shall be 

specified for a period of not less than 36 months and 

not more than 60 months. 

(E) ALLOWABLE ACTIVITIES.—An eligible applicant 

awarded a grant under this paragraph shall use funds provided under the grant to do the following: 

(i) PROMOTE BUSINESS LINKAGES.—

(I) IN GENERAL.—To promote business linkages 

in which funds shall be used to fund new or expanded programs that are designed to—

(aa) substantially increase the wages of eligible individuals (as defined in subparagraph 

(F)), whether employed or unemployed, who 

have limited English proficiency or other barriers to employment by creating or upgrading 

job and related skills in partnership with employers, especially by providing supports and 

services at or near worksites; and 

(bb) identify and strengthen career pathways 

by expanding and linking work and training 

opportunities for such individuals in collaboration with employers. 

(II) CONSIDERATION OF IN-KIND, IN-CASH RE- SOURCES.—In determining which programs to 

fund under this clause, an eligible applicant 

awarded a grant under this paragraph shall consider the ability of a consortium to provide funds 

in-kind or in-cash (including employer-provided, 

142

paid release time) to help support the programs for 

which funding is sought. 

(III) PRIORITY.—In determining which programs 

to fund under this clause, an eligible applicant 

awarded a grant under this paragraph shall give 

priority to programs that include education or 

training for which participants receive credit toward a recognized credential, such as an occupational certificate or license. 

(IV) USE OF FUNDS.— (aa) IN GENERAL.—Funds provided to a program under this clause may be used for a 

comprehensive set of employment and training 

benefits and services, including job development, job placement, workplace supports and 

accommodations, curricula development, wage 

subsidies, retention services, and such other 

benefits or services as the program deems necessary to achieve the overall objectives of this 

clause. 

(bb) PROVISION OF SERVICES.—So long as a 

program is principally designed to assist eligible individuals (as defined in subparagraph 

(F)), funds may be provided to a program 

under this clause that also serves low-earning 

employees of 1 or more employers even if such 

individuals are not within the definition of eligible individual (as so defined). 

(ii) PROVIDE FOR TRANSITIONAL JOBS PROGRAMS.—

(I) IN GENERAL.—To provide for wage-paying 

transitional jobs programs which combine timelimited employment in the public or nonprofit private sector that is subsidized with public funds 

with skill development and activities to remove 

barriers to employment, pursuant to an individualized plan (or, in the case of an eligible individual 

described in subparagraph (F)(i), an individual responsibility plan developed for an individual 

under section 408(b)). Such programs also shall 

provide job development and placement assistance 

to individual participants to help them move from 

subsidized employment in transitional jobs into 

unsubsidized employment, as well as retention 

services after the transition to unsubsidized employment. 

(II) ELIGIBLE PARTICIPANTS.—The Secretary 

shall ensure that individuals who participate in 

transitional jobs programs funded under a grant 

made under this paragraph shall be individuals 

who have been unemployed because of limited 

skills, experience, or other barriers to employment, 

and who are eligible individuals (as defined in 

subparagraph (F)), provided that so long as a program is designed to, and principally serves, eligible individuals (as so defined), a limited number 

143

of individuals who are unemployed because of limited skills, experience, or other barriers to employment, and who have an income below 100 percent 

of the Federal poverty line but who do not satisfy 

the definition of eligible individual (as so defined) 

may be served in the program to the extent the Secretaries determine that the inclusion of such individuals in the program is appropriate. 

(III) USE OF FUNDS.—Funds provided to a program under this clause may only be used in accordance with the following: 

(aa) To create subsidized transitional jobs in 

which work shall be performed directly for the 

program operator or at other public and nonprofit organizations (in this subclause referred 

to as ‘‘worksite employers’’) in the community, 

and in which 100 percent of the wages shall be 

subsidized, except as described in item (ff) regarding placements in the private, for-profit 

sector. 

(bb) Participants shall be paid at the rate 

paid to unsubsidized employees of the worksite 

employer who perform comparable work at the 

worksite where the individual is placed. If no 

other employees perform the same or comparable work then wages shall be set, at a 

minimum, at 50 percent of the Lower Living 

Standard Income Level (commonly referred to 

as the ‘‘LLSIL’’), as determined under section 

101(24) of the Workforce Investment Act of 

1998 (29 U.S.C. 2801(24)), for a family of 3 

based on 35 hours per week. 

(cc) Transitional jobs shall be limited to not 

less than 6 months and not more than 24 

months, however, nothing shall preclude a 

participant from moving into unsubsidized 

employment at a point prior to the maximum 

duration of the transitional job placement. 

Participants shall be paid wages based on a 

workweek of not less than 30 hours per week 

or more than 40 hours per week, except that a 

parent of a child under the age of 6, a child 

who is disabled, or a child with other special 

needs, or an individual who for other reasons 

cannot successfully participate for 30 to 40 

hours per week, may be allowed to participate 

for more limited hours, but not less than 20 

hours per week. In any work week, 50 percent 

to 80 percent of hours shall be spent in the 

transitional job and 20 percent to 50 percent of 

hours shall be spent in education or training, 

or other services designed to reduce or eliminate any barriers. 

(dd) Program operators shall provide case 

management services and ensure access to apVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00147 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
144

propriate education, training, and other services, including job accommodation, work supports, and supported employment, as appropriate and consistent with an individual employment plan (unless the individual already 

has an employment plan developed by the appropriate State agency with responsibility for 

the administration of the State program funded under this part or the State workforce investment board established under section 111 

of the Workforce Investment Act of 1998 (29 

U.S.C. 2821)) that is based on the individual’s 

strengths, resources, priorities, concerns, abilities, capabilities, career interests, and informed choice and that is developed with each 

participant. The goal of each participant’s 

plan shall focus on preparation for unsubsidized jobs in demand in the local economy 

which offer the potential for advancement and 

growth. Services shall also include job placement assistance and retention services for 12 

months after entry into unsubsidized placement. Participants shall also receive support 

services such as subsidized child care and 

transportation, on the same basis as those 

services are made available to recipients of assistance under the State program funded 

under this part who are engaged in work-related activities. 

(ee) Providers shall work with individual recipients to determine eligibility for other employment-related supports which may include 

(but are not limited to) supported employment, 

other vocational rehabilitation services, and 

programs or services available under the 

Workforce Investment Act of 1998 (29 U.S.C. 

2801 et seq.), or the ticket to work and self-sufficiency program established under section 

1148, and, to the extent possible, shall provide 

transitional employment in collaboration with 

entities providing, or arranging for the provision of, such other supports. 

(ff) Not more than 1⁄3 of the placements for 

a grantee shall be with a private for-profit 

company, except that such 1⁄3 limit may be 

waived by the Secretary for programs in rural 

areas when the grantee can demonstrate insufficient public and non-profit worksites. When 

a placement is made at a private for-profit 

company, the company shall pay 50 percent of 

program costs (including wages) for each participant, and the company shall agree, in writing, to hire each participant into an unsubsidized position at the completion of the agreed 

upon subsidized placement, or sooner, proVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00148 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
145

vided that the participant’s job performance 

has been satisfactory. 

(gg) Subject to item (hh), not more than 15 

percent of the workforce of a private for-profit 

company may be composed of transitional jobs 

participants. 

(hh) Notwithstanding item (gg), no employer 

shall be precluded from employing up to 2 

transitional jobs participants. 

(IV) DEFINITION OF TRANSITIONAL JOBS PRO- GRAM.—In this clause, the term ‘‘transitional jobs 

program’’ means a program that is intended to 

serve current and former recipients of assistance 

under a State or tribal program funded under this 

part and other low-income individuals who have 

been unable to secure employment through job 

search or other employment-related services because of limited skills, experience, or other barriers 

to employment. 

(iii) LIMITATION ON ADMINISTRATIVE EXPENDI- TURES.—Not more than 5 percent of the funds awarded 

to an eligible applicant under clause (i) or (ii) may be 

used for administrative expenditures incurred in carrying out the activities described in clause (i) or (ii) or 

for expenditures related to carrying out the assessments 

and reports required under subparagraph (H). 

(F) DEFINITION OF ELIGIBLE INDIVIDUAL.—In this paragraph, the term ‘‘eligible individual’’ means—

(i) an individual who is a parent who is a recipient 

of assistance under a State or tribal program funded 

under this part; 

(ii) an individual who is a parent who has ceased to 

receive assistance under such a State or tribal program; 

(iii) an individual who is at risk of receiving assistance under a State or tribal program funded under 

this part; 

(iv) an individual with a disability; or 

(v) a noncustodial parent who is unemployed, or is 

having difficulty in paying child support obligations, 

including such a parent who is a former criminal offender. 

(G) APPLICATION.—Each eligible applicant desiring a 

grant under this paragraph shall submit an application to 

the Secretaries at such time, in such manner, and accompanied by such information as the Secretaries may require. 

(H) ASSESSMENTS AND REPORTS BY GRANTEES.—

(i) IN GENERAL.—An eligible applicant that receives 

a grant under this paragraph shall assess and report 

on the outcomes of programs funded under the grant, 

including the identity of each program operator, demographic information about each participant, including 

education level, literacy level, prior work experience 

and identified barriers to employment, the nature of 

education, training, or other services received by the 

146

participant, the reason for the participant’s leaving the 

program, and outcomes related to the placement of the 

participant in an unsubsidized job, including 1-year 

employment retention, wage at placement, benefits, and 

earnings progression, as specified by the Secretaries. 

(ii) ASSISTANCE.—The Secretaries shall—

(I) assist grantees in conducting the assessment 

required under clause (i) by making available 

where practicable low-cost means of tracking the 

labor market outcomes of participants; and 

(II) encourage States to provide such assistance. 

(I) APPLICATION TO REQUIREMENTS OF THE STATE PROGRAM.—

(i) PARTICIPATION NOT CONSIDERED ASSISTANCE.—A 

benefit or service provided with funds made available 

under a grant made under this paragraph shall not be 

considered assistance for any purpose under a State or 

tribal program funded under this part. 

(ii) GENERAL RULES GOVERNING USE OF FUNDS.—The 

rules of section 404, other than subsection (b) of that 

section, shall not apply to a grant made under this 

paragraph. 

(J) ASSESSMENTS BY THE SECRETARIES.—

(i) RESERVATION OF FUNDS.—Of the amount appropriated to carry out this paragraph for each of fiscal 

years 2006 and 2007, $3,000,000 of such amount for 

each such fiscal year is reserved for use by the Secretaries to prepare an interim and final report summarizing and synthesizing outcomes and lessons learned 

from the programs funded through grants awarded 

under this paragraph. 

(ii) INTERIM AND FINAL ASSESSMENTS.—With respect 

to the reports prepared under clause (i), the Secretaries 

shall submit—

(I) the interim report not later than 4 years after 

the date of enactment of the Personal Responsibility and Individual Development for Everyone 

Act; and

(II) the final report not later than 6 years after 

such date of enactment. 

(K) EVALUATIONS.—

(i) RESERVATION OF FUNDS.—Of the amount appropriated to carry out this paragraph for a fiscal year, an 

amount equal to 1.5 percent of such amount for each 

such fiscal year shall be reserved for use by the Secretaries to conduct evaluations in accordance with the requirements of clause (ii). 

(ii) REQUIREMENTS.—The Secretaries—

(I) shall develop a plan to evaluate the extent to 

which programs funded under grants made under 

this paragraph have been effective in promoting 

sustained, unsubsidized employment for each 

group of eligible participants, and in improving 

the skills and wages of participants in comparison 

147

to the participants’ skills and wages prior to participation in the programs; 

(II) may evaluate the use of such a grant by a 

grantee, as the Secretaries deem appropriate, in accordance with an agreement entered into with the 

grantee after good-faith negotiations; and 

(III) shall include, as appropriate, the following 

outcome measures in the evaluation plan developed 

under subclause (I): 

(aa) Placements in unsubsidized employment. 

(bb) Retention in unsubsidized employment 

6 months and 12 months after initial placement. 

(cc) Earnings of individuals at the time of 

placement in unsubsidized employment. 

(dd) Earnings of individuals 12 months 

after placement in unsubsidized employment. 

(ee) The extent to which unsubsidized job 

placements include access to affordable employer-sponsored health insurance and paid 

leave benefits. 

(ff) Comparison of pre- and post-program 

wage rates of participants. 

(gg) Comparison of pre- and post-program 

skill levels of participants. 

(hh) Wage growth and employment retention 

in relation to occupations and industries at 

initial placement in unsubsidized employment 

and over the first 12 months after initial 

placement. 

(ii) Recipient of cash assistance under the 

State program funded under this part. 

(jj) Average expenditures per participant. 

(iii) REPORTS TO CONGRESS.—The Secretaries shall 

submit to Congress the following reports on the evaluations of programs funded under grants made under 

this paragraph: 

(I) INTERIM REPORT.—An interim report not later 

than 4 years after the date of enactment of the Personal Responsibility and Individual Development 

for Everyone Act. 

(II) FINAL REPORT.—A final report not later than 

6 years after such date of enactment. 

(L) AUTHORIZATION OF APPROPRIATIONS.— (i) IN GENERAL.—There is authorized to be appropriated for the purpose of carrying out this paragraph, 

$200,000,000 for each of fiscal years 2006 through 

2010. 

(ii) AVAILABILITY.—Amounts appropriated in accordance with clause (i) for a fiscal year shall remain 

available for obligation for 5 fiscal years after the fiscal year in which the amount is appropriated. 

* * * * * * *

(b) CONTINGENCY FUND.—

148

ø(1) ESTABLISHMENT.—There is hereby established in the 

Treasury of the United States a fund which shall be known as 

the ‘‘Contingency Fund for State Welfare Programs’’ (in this 

section referred to as the ‘‘Fund’’). 

ø(2) DEPOSITS INTO FUND.—Out of any money in the Treasury of the United States not otherwise appropriated, there are 

appropriated for fiscal years 1997, 1998, 1999, 2000, 2001, 

2002, and 2003 such sums as are necessary for payment to the 

Fund in a total amount not to exceed $2,000,000,000, reduced 

by the sum of the dollar amounts specified in paragraph 

(6)(C)(ii). 

ø(3) GRANTS.—

ø(A) PROVISIONAL PAYMENTS.—If an eligible State submits to the Secretary a request for funds under this paragraph during an eligible month, the Secretary shall, subject to this paragraph, pay to the State, from amounts appropriated pursuant to paragraph (2), an amount equal to 

the amount of funds so requested. 

ø(B) PAYMENT PRIORITY.—The Secretary shall make payments under subparagraph (A) in the order in which the 

Secretary receives requests for such payments. 

ø(C) LIMITATIONS.— ø(i) MONTHLY PAYMENT TO A STATE.—The total 

amount paid to a single State under subparagraph (A) 

during a month shall not exceed 1⁄12 of 20 percent of 

the State family assistance grant. 

ø(ii) PAYMENTS TO ALL STATES.—The total amount 

paid to all States under subparagraph (A) during fiscal 

years 1997 through 2005 shall not exceed the total 

amount appropriated pursuant to paragraph (2).¿

(1) CONTINGENCY FUND GRANTS.— (A) PAYMENTS.—Subject to subparagraphs (C) and (D), 

and out of funds appropriated under subparagraph (F), 

each State shall receive a contingency fund grant for each 

eligible month in which the State is a needy State under 

paragraph (3). 

(B) MONTHLY CONTINGENCY FUND GRANT AMOUNT.—For 

each eligible month in which a State is a needy State, the 

State shall receive a contingency fund grant equal to the 

product of—

(i) the applicable percentage (as defined under subparagraph (E)(i)) of the applicable benefit level (as defined in subparagraph (E)(ii)); and 

(ii) the amount by which the total number of families 

that received assistance under the State program funded under this part in the most recently concluded 3-

month period for which data are available from the 

State exceeds a 5-percent increase in the number of 

such families in the corresponding 3-month period in 

either of the 2 most recent preceding fiscal years and 

that was due, in large measure, to economic conditions 

rather than State policy changes. 

(C) LIMITATION.—The total amount paid to a single State 

under subparagraph (A) during a fiscal year shall not exceed the amount equal to 10 percent of the State family asVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00152 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
149

sistance grant (as defined under subparagraph (B) of subsection (a)(1)). 

(D) PAYMENTS TO INDIAN TRIBES.—

(i) IN GENERAL.—Of the total amount appropriated 

pursuant to subparagraph (F), $25,000,000 of such 

amount shall be reserved for making payments to Indian tribes with approved tribal family assistance 

plans that are operating in situations of increased economic hardship. 

(ii) DETERMINATION OF CRITERIA FOR TRIBAL ACCESS.—

(I) IN GENERAL.—Subject to subclause (II), the 

Secretary, in consultation with Indian tribes with 

approved tribal family assistance plans, shall determine the criteria for access by such tribes to the 

amount reserved under clause (i). 

(II) INCLUSION OF CERTAIN FACTORS.—Such criteria shall include factors related to increases in 

unemployment and loss of employers. 

(iii) APPLICATION OF REQUIREMENTS FOR PAYMENTS

TO STATES.—The Secretary, in consultation with Indian tribes with approved tribal family assistance 

plans located throughout the United States, shall determine the extent to which requirements of States for 

payments from the contingency fund established under 

this subsection shall apply to Indian tribes receiving 

payments under this subparagraph. 

(E) DEFINITIONS.—In this paragraph: 

(i) APPLICABLE PERCENTAGE.—The term ‘‘applicable 

percentage’’ means the Federal medical assistance percentage for the State (as defined in section 1905(b)). 

(ii) APPLICABLE BENEFIT LEVEL.—

(I) IN GENERAL.—Subject to subclause (II), the 

term ‘‘applicable benefit level’’ means the amount 

equal to the maximum cash assistance grant for a 

family consisting of 3 individuals under the State 

program funded under this part. 

(II) RULE FOR STATES WITH MORE THAN 1 MAXIMUM LEVEL.—In the case of a State that has more 

than 1 maximum cash assistance grant level for 

families consisting of 3 individuals, the basic assistance cost shall be the amount equal to the maximum cash assistance grant level applicable to the 

largest number of families consisting of 3 individuals receiving assistance under the State program 

funded under this part. 

(F) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there is 

appropriated for the period of fiscal years 2006 through 

2010, such sums as are necessary for making contingency 

fund grants under this subsection in a total amount not to 

exceed $2,000,000,000.

(3) INITIAL DETERMINATION OF WHETHER A STATE QUALIFIES

AS A NEEDY STATE.—

150

(A) IN GENERAL.—For purposes of paragraph (1), subject 

to paragraph (4), a State will be initially determined to be 

a needy State for a month if, as determined by the Secretary—

(i) the monthly average of the unduplicated number 

of families that received assistance under the State program funded under this part in the most recently concluded 3-month period for which data are available 

from the State increased by at least 5 percent over the 

number of such families that received such benefits in 

the corresponding 3-month period in either of the 2 

most recent preceding fiscal years; 

(ii) the increase in the number of such families for 

the State was due, in large measure, to economic conditions rather than State policy changes; and 

(iii) the State satisfies any of the following criteria: 

(I) The average rate of total unemployment in 

the State (seasonally adjusted) for the period consisting of the most recent 3 months for which data 

are available has increased by the lesser of 1.5 percentage points or by 50 percent over the corresponding 3-month period in either of the 2 most 

recent preceding fiscal years. 

(II) The average insured unemployment rate for 

the most recent 13 weeks for which data are available has increased by 1 percentage point over the 

corresponding 13-week period in either of the 2 

most recent preceding fiscal years. 

(III) As determined by the Secretary of Agriculture, the monthly average number of households 

(as of the last day of each month) that participated 

in the food stamp program in the State in the then 

most recently concluded 3-month period for which 

data are available exceeds by at least 15 percent 

the monthly average number of households (as of 

the last day of each month) in the State that participated in the food stamp program in the corresponding 3-month period in either of the 2 most 

recent preceding fiscal years, but only if the Secretary and the Secretary of Agriculture concur in 

the determination that the State’s increased caseload was due, in large measure, to economic conditions rather than changes in Federal or State policies related to the food stamp program. 

(B) DURATION.—A State that qualifies as a needy State—

(i) under subclause (I) or (II) of subparagraph 

(A)(iii), shall be considered a needy State until the 

State’s average rate of total unemployment or the 

State’s insured unemployment rate, respectively, falls 

below the level attained in the applicable period that 

was first used to determine that the State qualified as 

a needy State under that subparagraph (and in the 

case of the insured unemployment rate, without regard 

to any declines in the rate that are the result of seasonal variation); and 

151

(ii) under subclause (III) of subparagraph (A)(iii), 

shall be considered a needy State so long as the State 

meets the criteria for being considered a needy State 

under that subparagraph. 

(4) EXCEPTIONS.—

(A) UNEXPENDED BALANCES.—

(i) IN GENERAL.—Notwithstanding paragraph (3), a 

State that has unexpended TANF balances in an 

amount that exceeds 30 percent of the total amount of 

grants received by the State under subsection (a) for 

the most recently completed fiscal year (other than welfare-to-work grants made under paragraph (5) of that 

subsection prior to fiscal year 2000), shall not be a 

needy State under this subsection. 

(ii) DEFINITION OF UNEXPENDED TANF BALANCES.—In 

clause (i), the term ‘‘unexpended TANF balances’’ 

means the lesser of—

(I) the total amount of grants made to the State 

(regardless of the fiscal year in which such funds 

were awarded) under subsection (a) (other than 

welfare-to-work grants made under paragraph (5) 

of that subsection prior to fiscal year 2000) but not 

yet expended as of the end of the fiscal year preceding the fiscal year for which the State would, in 

the absence of this subparagraph, be considered a 

needy State under this subsection; and 

(II) the total amount of grants made to the State 

under subsection (a) (other than welfare-to-work 

grants made under paragraph (5) of that subsection prior to fiscal year 2000) but not yet expended as of the end of such preceding fiscal year, 

plus the difference between—

(aa) the pro rata share of the current fiscal 

year grant to be made under subsection (a) to 

the State; and 

(bb) current year expenditures of the total 

amount of grants made to the State under subsection (a) (regardless of the fiscal year in 

which such funds were awarded) (other than 

such welfare-to-work grants) through the end 

of the most recent calendar quarter. 

(B) FAILURE TO SATISFY MAINTENANCE OF EFFORT REQUIREMENT.—Notwithstanding paragraph (3), a State that 

fails to satisfy the requirement of section 409(a)(7) with respect to a fiscal year shall not be a needy State under this 

subsection for that fiscal year.

ø(4)¿ (2) ELIGIBLE MONTH.—As used in paragraph ø(3)(A)¿

(1), the term ‘‘eligible month’’ means, with respect to a State, 

a month in the ø2-month period that begins with any¿ fiscal 

year quarter that includes a month for which the State is a 

needy State. 

ø(5) NEEDY STATE.—For purposes of paragraph (4), a State 

is a needy State for a month if—

ø(A) the average rate of—

152

ø(i) total unemployment in such State (seasonally 

adjusted) for the period consisting of the most recent 

3 months for which data for all States are published 

equals or exceeds 6.5 percent; and 

ø(ii) total unemployment in such State (seasonally 

adjusted) for the 3-month period equals or exceeds 110 

percent of such average rate for either (or both) of the 

corresponding 3-month periods ending in the 2 preceding calendar years; or 

ø(B) as determined by the Secretary of Agriculture (in 

the discretion of the Secretary of Agriculture), the monthly 

average number of individuals (as of the last day of each 

month) participating in the food stamp program in the 

State in the then most recently concluded 3-month period 

for which data are available exceeds by not less than 10 

percent the lesser of—

ø(i) the monthly average number of individuals (as 

of the last day of each month) in the State that would 

have participated in the food stamp program in the 

corresponding 3-month period in fiscal year 1994 if the 

amendments made by titles IV and VIII of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had been in effect throughout fiscal 

year 1994; or 

ø(ii) the monthly average number of individuals (as 

of the last day of each month) in the State that would 

have participated in the food stamp program in the 

corresponding 3-month period in fiscal year 1995 if the 

amendments made by titles IV and VIII of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had been in effect throughout fiscal 

year 1995. 

ø(6) ANNUAL RECONCILIATION.— ø(A) IN GENERAL.—Notwithstanding paragraph (3), if the 

Secretary makes a payment to a State under this subsection in a fiscal year, then the State shall remit to the 

Secretary, within 1 year after the end of the first subsequent period of 3 consecutive months for which the State 

is not a needy State, an amount equal to the amount (if 

any) by which—

ø(i) the total amount paid to the State under paragraph (3) of this subsection in the fiscal year; exceeds 

ø(ii) the product of—

ø(I) the Federal medical assistance percentage 

for the State (as defined in section 1905(b), as 

such section was in effect on September 30, 1995); 

ø(II) the State’s reimbursable expenditures for 

the fiscal year; and 

ø(III) 1⁄12 times the number of months during 

the fiscal year for which the Secretary made a 

payment to the State under such paragraph (3). 

ø(B) DEFINITIONS.—As used in subparagraph (A): 

ø(i) REIMBURSABLE EXPENDITURES.—The term ‘‘reimbursable expenditures’’ means, with respect to a State 

and a fiscal year, the amount (if any) by which—

153

ø(I) countable State expenditures for the fiscal 

year; exceeds 

ø(II) historic State expenditures (as defined in 

section 409(a)(7)(B)(iii)), excluding any amount expended by the State for child care under subsection (g) or (i) of section 402 (as in effect during 

fiscal year 1994) for fiscal year 1994. 

ø(ii) COUNTABLE STATE EXPENDITURES.—The term 

‘‘countable expenditures’’ means, with respect to a 

State and a fiscal year—

ø(I) the qualified State expenditures (as defined 

in section 409(a)(7)(B)(i) (other than the expenditures described in subclause (I)(bb) of such section)) under the State program funded under this 

part for the fiscal year; plus 

ø(II) any amount paid to the State under paragraph (3) during the fiscal year that is expended 

by the State under the State program funded 

under this part. 

ø(C) ADJUSTMENT OF STATE REMITTANCES.—

ø(i) IN GENERAL.—The amount otherwise required 

by subparagraph (A) to be remitted by a State for a 

fiscal year shall be increased by the lesser of—

ø(I) the total adjustment for the fiscal year, 

multiplied by the adjustment percentage for the 

State for the fiscal year; or 

ø(II) the unadjusted net payment to the State 

for the fiscal year. 

ø(ii) TOTAL ADJUSTMENT.—As used in clause (i), the 

term ‘‘total adjustment’’ means—

ø(I) in the case of fiscal year 1998, $2,000,000; 

ø(II) in the case of fiscal year 1999, $9,000,000; 

ø(III) in the case of fiscal year 2000, $16,000,000; and 

ø(IV) in the case of fiscal year 2001, $13,000,000. 

ø(iii) ADJUSTMENT PERCENTAGE.—As used in clause 

(i), the term ‘‘adjustment percentage’’ means, with respect to a State and a fiscal year—

ø(I) the unadjusted net payment to the State for 

the fiscal year; divided by 

ø(II) the sum of the unadjusted net payments to 

all States for the fiscal year. 

ø(iv) UNADJUSTED NET PAYMENT.—As used in this 

subparagraph, the term, ‘‘unadjusted net payment’’ 

means with respect to a State and a fiscal year—

ø(I) the total amount paid to the State under 

paragraph (3) in the fiscal year; minus 

ø(II) the amount that, in the absence of this 

subparagraph, would be required by subparagraph 

(A) or by section 409(a)(10) to be remitted by the 

State in respect of the payment.¿

ø(7)¿ (5) STATE DEFINED.—As used in this subsection, the 

term ‘‘State’’ means each of the 50 States and the District of 

Columbia. 

154

ø(8)¿ (6) ANNUAL REPORTS.—The Secretary shall annually report to the Congress øon the status of the Fund¿ on the States 

that qualified for contingency funds and the amount of funding 

awarded under this subsection.

SEC. 404. ø42 U.S.C. 604¿ USE OF GRANTS. 

(a) GENERAL RULES.—Subject to this part, a State to which a 

grant is made under section 403 may use the grant—

(1) in any manner that is reasonably calculated to accomplish the purpose of this part, including to provide low income 

households with øassistance¿ aid in meeting home heating and 

cooling costs; or 

(2) in any manner that the State was authorized to use 

amounts received under part A or F, as such parts were in effect on September 30, 1995, or (at the option of the State) August 21, 1996. 

(b) LIMITATION ON USE OF GRANT FOR ADMINISTRATIVE PUR- POSES.—

(1) LIMITATION.—A State to which a grant is made under 

section 403 shall not expend more than 15 percent of the grant 

for administrative purposes.

(2) EXCEPTION.—Paragraph (1) shall not apply to the use of 

a grant for information technology and computerization needed 

for tracking or monitoring required by or under this part. 

ø(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER

RULES OF FORMER STATE.—A State operating a program funded 

under this part may apply to a family the rules (including benefit 

amounts) of the program funded under this part of another State 

if the family has moved to the State from the other State and has 

resided in the State for less than 12 months.¿

(c) ƒReserved¿. (d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PUR- POSES.—

(1) IN GENERAL.—Subject to paragraph (2), a State may use 

not more than 30 percent of the amount of any grant made to 

the State under section 403(a) for a fiscal year to carry out a 

State program pursuant to any or all of the following provisions of law: 

(A) Title XX of this Act. 

(B) The Child Care and Development Block Grant Act of 

1990. 

ø(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PROGRAMS.—

ø(A) IN GENERAL.—A State may use not more than the 

applicable percent of the amount of any grant made to the 

State under section 403(a) for a fiscal year to carry out 

State programs pursuant to title XX. 

ø(B) APPLICABLE PERCENT.—For purposes of subparagraph (A), the applicable percent is 4.25 percent in the 

case of fiscal year 2001 and each succeeding fiscal year. 

(3) APPLICABLE RULES.—

ø(A) IN GENERAL.—Except as provided in subparagraph 

(B) of this paragraph, any amount paid to a State under 

this part that is used to carry out a State program pursuant to a provision of law specified in paragraph (1) shall 

not be subject to the requirements of this part, but shall 

155

be subject to the requirements that apply to Federal funds 

provided directly under the provision of law to carry out 

the program, and the expenditure of any amount so used 

shall not be considered to be an expenditure under this 

part. 

ø(B) EXCEPTION RELATING TO TITLE XX PROGRAMS.—All 

amounts paid to a State under this part that are used to 

carry out State programs pursuant to title XX shall be 

used only for programs and services to children or their 

families whose income is less than 200 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance 

with section 673(2) of the Omnibus Budget Reconciliation 

Act of 1981) applicable to a family of the size involved.¿

(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PRO- GRAMS.—A State may use not more than 10 percent of the 

amount of any grant made to the State under section 403(a) for 

a fiscal year to carry out State programs pursuant to title XX.

ø(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS FOR ASSIST- ANCE.—A State or tribe may reserve amounts paid to the State or 

tribe under this part for any fiscal year for the purpose of providing, without fiscal year limitation, assistance under the State or 

tribal program funded under this part.¿

(e) AUTHORITY TO CARRYOVER OR RESERVE CERTAIN AMOUNTS

FOR BENEFITS OR SERVICES OR FOR FUTURE CONTINGENCIES.— (1) CARRYOVER.—A State or Indian tribe may use a grant 

made to the State or Indian tribe under this part for any fiscal 

year to provide, without fiscal year limitation, any benefit or 

service that may be provided under the State or tribal program 

funded under this part. 

(2) CONTINGENCY RESERVE.—A State or Indian tribe may designate any portion of a grant made to the State or Indian tribe 

under this part as a contingency reserve for future needs, and 

may use any amount so designated to provide, without fiscal 

year limitation, any benefit or service that may be provided 

under the State or tribal program funded under this part. If a 

State or Indian tribe so designates a portion of such a grant, 

the State or Indian tribe shall include in its report under section 411(a) the amount so designated.

(f) AUTHORITY TO OPERATE EMPLOYMENT PLACEMENT PRO- GRAM.—A State to which a grant is made under section 403 may 

use the grant to make payments (or provide job placement vouchers) to State-approved public and private job placement agencies 

that provide employment placement services to individuals who receive øassistance¿ benefits or services under the State program 

funded under this part. 

* * * * * * *

(l) AUTHORITY TO ESTABLISH UNDERGRADUATE POSTSECONDARY

OR VOCATIONAL EDUCATIONAL PROGRAM.— (1) IN GENERAL.—Subject to the succeeding paragraphs of 

this subsection, a State to which a grant is made under section 

403 may use the grant or State funds that are qualified State 

expenditures (as defined in section 409(a)(7)(B)(i)) to establish 

a program under which an eligible participant (as defined in 

paragraph (3)) may be provided support services described in 

156

paragraph (5) and, subject to paragraph (6), may have hours of 

participation in such program counted as being engaged in 

work for purposes of determining monthly participation rates 

under section 407(b)(1)(B)(i). 

(2) STATE PLAN REQUIREMENT.—In order to establish a program under this subsection, a State shall describe (in an addendum to the State plan submitted under section 402) the applicable eligibility criteria that is designed to limit participation 

in the program to only those individuals—

(A) whose past earnings indicate that the individuals 

cannot qualify for employment that pays enough to allow 

them to obtain self-sufficiency (as determined by the State); 

and 

(B) for whom enrollment in the program will prepare the 

individuals for higher-paying occupations that are in demand in the State. 

(3) DEFINITION OF ELIGIBLE PARTICIPANT.—In this subsection, 

the term ‘eligible participant’ means an individual—

(A) who—

(i) receives assistance under the State program funded under this part; 

(ii) is a former recipient of assistance under the State 

program funded under this part; or 

(iii) is a needy parent in a family with children eligible for benefits or services funded under a grant made 

under section 403 or with State funds that are qualified State expenditures (as defined in section 

409(a)(7)(B)(i)); and 

(B) who—

(i) is enrolled in a postsecondary 2- or 4-year degree 

program or a vocational educational training program; 

and 

(ii) during the period the individual participates in 

the program established under this subsection, maintains satisfactory academic progress, as defined by the 

institution operating the postsecondary 2- or 4-year degree program or vocational educational training program in which the individual is enrolled. 

(4) REQUIRED TIME PERIODS FOR COMPLETION OF DEGREE OR

VOCATIONAL EDUCATIONAL TRAINING PROGRAM.—

(A) IN GENERAL.—Subject to subparagraph (B), an eligible participant participating in a program established 

under this subsection shall be required to complete the requirements of a postsecondary 2- or 4-year degree program 

or a vocational educational training program within the 

normal timeframe (as determined by the institution operating the 2- or 4-year degree program or a vocational educational training program) for full-time students seeking 

the particular degree or completing the vocational educational training program. 

(B) EXCEPTION.— (i) IN GENERAL.—For good cause, the State may 

allow an eligible participant to complete their degree 

requirements or vocational educational training program within a period not to exceed 11⁄2 times the norVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00160 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
157

mal timeframe established under subparagraph (A) 

(unless further modification is required by the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 

seq.), or section 504 of the Rehabilitation Act of 1973 

(29 U.S.C. 794)) and may modify the requirements applicable to an individual participating in the program. 

For purposes of the preceding sentence, good cause includes, with respect to an eligible participant, the presence of 1 or more significant barriers, as determined by 

the State, to normal participation by the participant, 

such as the need to care for a family member with special needs. 

(ii) INCLUSION OF BARRIERS IN STATE PLAN ADDENDUM.—A State shall identify and define in the addendum to the State plan under paragraph (2) the barriers 

that make an eligible participant eligible for the good 

cause exception permitted under clause (i). 

(5) SUPPORT SERVICES DESCRIBED.—For purposes of paragraph (1), the support services described in this paragraph include any or all of the following during the period the eligible 

participant is participating in the program established under 

this subsection: 

(A) Child care. 

(B) Transportation services. 

(C) Payment for books and supplies. 

(D) Other services provided under policies determined by 

the State to ensure coordination and lack of duplication 

with other programs available to provide support services. 

(6) RULES FOR INCLUSION IN MONTHLY WORK PARTICIPATION

RATES.—

(A) FAMILIES COUNTED AS PARTICIPATING IF THEY MEET

THE REQUIREMENTS OF SUBPARAGRAPH (B) OR (C).—Subject 

to subparagraph (D), for each eligible participant who receives assistance under the State program funded under 

this part, a State may elect, for purposes of determining 

monthly participation rates under section 407(b)(1)(B)(i), to 

include such participant in the determination of such rates 

in accordance with subparagraph (B) or (C). 

(B) FULL OR PARTIAL CREDIT FOR HOURS OF PARTICIPATION IN EDUCATIONAL OR RELATED ACTIVITIES.—

(i) IN GENERAL.—Subject to clause (iv), an eligible 

participant who participates in educational or related 

activities (as determined by the State in accordance 

with clause (ii)) under a program established under 

this subsection shall be given credit for the number of 

hours of such participation to the extent that an adult 

recipient or minor child head of household would be 

given credit under section 407(c) for being engaged in 

the same number of hours of work activities described 

in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) 

of section 407(d).

(ii) RELATED ACTIVITIES.—For purposes of clause (i), 

related activities shall include—

158

(I) work activities described in paragraph (1), 

(2), (3), (4), (5), (6), (7), (8), or (12) of section 

407(d); 

(II) work study, practicums, internships, clinical 

placements, laboratory or field work, or such other 

activities that will enhance the eligible participant’s employability in the participant’s field of 

study, as determined by the State; or 

(III) subject to clause (iii), study time. 

(iii) LIMITATION ON INCLUSION OF STUDY TIME.—For 

purposes of determining hours per week of participation by an eligible participant under a program established under this subsection, a State may not count 

study time of less than 1 hour for every hour of class 

time or more than 2 hours for every hour of class time. 

(iv) TOTAL NUMBER OF HOURS LIMITED TO BEING

COUNTED AS 1 FAMILY.—In no event may hours per 

week of participation by an eligible participant under 

a program established under this subsection result in 

the participant’s family being counted as more than 1 

family for purposes of determining monthly participation rates under section 407(b)(1)(B)(i). 

(C) FULL CREDIT FOR BEING ENGAGED IN DIRECT WORK

ACTIVITIES FOR CERTAIN HOURS PER WEEK.— (i) IN GENERAL.—A family that includes an eligible 

participant who, in addition to complying with the 

full-time educational participation requirements of the 

postsecondary 2- or 4-year degree program or vocational educational training program that the participant is enrolled in, participates in an activity described 

in subclause (I) or (II) of subparagraph (B)(ii) for not 

less than the number of hours required per week under 

clause (ii) shall be counted as 1 family. 

(ii) REQUIRED HOURS PER WEEK.—For purposes of 

clause (i), subject to clause (iii), the number of hours 

per week are—

(I) 6 hours per week during the first 12-month 

period that an eligible participant participates in 

a program established under this subsection; 

(II) 8 hours per week during the second 12-

month period of such participation; 

(III) 10 hours per week during the third 12-

month period of such participation; and 

(IV) 12 hours per week during the fourth or any 

other succeeding 12-month period of such participation. 

(iii) MODIFICATION OF REQUIREMENTS FOR GOOD

CAUSE.—A State may modify the number of hours per 

week required under clause (ii) for good cause. For purposes of the preceding sentence, good cause includes, 

with respect to an eligible participant, the presence of 

1 or more significant barriers, as determined by the 

State, to normal participation by the participant, such 

as the need to care for a family member with special 

needs. 

159

(D) CAP ON NUMBER OF PARTICIPANTS THAT MAY BE INCLUDED IN MONTHLY WORK PARTICIPATION RATES.—The 

monthly number of families that include an eligible participant and that are treated as being engaged in work may 

not exceed an amount equal to 10 percent of the families to 

which assistance is provided under the State program 

funded under this part for such month. 

(7) APPLICABILITY.—Nothing in this subsection shall be construed as restricting the authority or discretion of a State in the 

use of grants provided under section 403 or the expenditure of 

qualified State expenditures (as defined in section 

409(a)(7)(B)(i)) for programs or activities other than the program established under this subsection.

øSEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS. 

ø(a) LOAN AUTHORITY.—

ø(1) IN GENERAL.—The Secretary shall make loans to any 

loan-eligible State, for a period to maturity of not more than 

3 years. 

ø(2) LOAN-ELIGIBLE STATE.—As used in paragraph (1), the 

term ‘‘loan-eligible State’’ means a State against which a penalty has not been imposed under section 409(a)(1). 

ø(b) RATE OF INTEREST.—The Secretary shall charge and collect 

interest on any loan made under this section at a rate equal to the 

current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the period to maturity of the loan. 

ø(c) USE OF LOAN.—A State shall use a loan made to the State 

under this section only for any purpose for which grant amounts 

received by the State under section 403(a) may be used, including—

ø(1) welfare anti-fraud activities; and 

ø(2) the provision of assistance under the State program to 

Indian families that have moved from the service area of an 

Indian tribe with a tribal family assistance plan approved 

under section 412. 

ø(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO A STATE.—The 

cumulative dollar amount of all loans made to a State under this 

section during fiscal years 1997 through 2003 shall not exceed 10 

percent of the State family assistance grant. 

ø(e) LIMITATION ON TOTAL AMOUNT OF OUTSTANDING LOANS.—

The total dollar amount of loans outstanding under this section 

may not exceed $1,700,000,000. 

ø(f) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated 

such sums as may be necessary for the cost of loans under this section.¿

SEC. 407. MANDATORY WORK REQUIREMENTS. 

ø(a) PARTICIPATION RATE REQUIREMENTS.—

ø(1) ALL FAMILIES.—A State to which a grant is made under 

section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year 

with respect to all families receiving assistance under the 

State program funded under this part:

160

øThe minimum 

participation 

øIf the fiscal year is: rate is: 

ø1997 ................................................................................. 25

ø1998 ................................................................................. 30

ø1999 ................................................................................. 35

ø2000 ................................................................................. 40

ø2001 ................................................................................. 45

ø2002 or thereafter .......................................................... 50.

ø(2) 2-PARENT FAMILIES.—A State to which a grant is made 

under section 403 for a fiscal year shall achieve the minimum 

participation rate specified in the following table for the fiscal 

year with respect to 2-parent families receiving assistance 

under the State program funded under this part:

øThe minimum 

participation 

øIf the fiscal year is: rate is: 

ø1997 ................................................................................. 75

ø1998 ................................................................................. 75

ø1999 or thereafter .......................................................... 90. ¿

(a) PARTICIPATION RATE REQUIREMENTS.—

(1) IN GENERAL.—A State to which a grant is made under section 403 for a fiscal year shall achieve a minimum participation rate with respect to all families receiving assistance under 

the State program funded under this part that is equal to not 

less than—

(A) 50 percent for fiscal year 2006; 

(B) 55 percent for fiscal year 2007; 

(C) 60 percent for fiscal year 2008; 

(D) 65 percent for fiscal year 2009; and 

(E) 70 percent for fiscal year 2010 and each succeeding 

fiscal year. 

(2) LIMITATION ON REDUCTION OF PARTICIPATION RATE

THROUGH APPLICATION OF CREDITS.—Notwithstanding any 

other provision of this part, the net effect of any percentage reduction in the minimum participation rate otherwise required 

under this section with respect to families receiving assistance 

under the State program funded under this part as a result of 

the application of any employment credit, caseload reduction 

credit, or other credit against such rate for a fiscal year, shall 

not exceed—

(A) 40 percentage points, in the case of fiscal year 2006; 

(B) 35 percentage points, in the case of fiscal year 2007; 

(C) 30 percentage points, in the case of fiscal year 2008; 

(D) 25 percentage points, in the case of fiscal year 2009; 

or 

(E) 20 percentage points, in the case of fiscal year 2010 

or any fiscal year thereafter.

(b) CALCULATION OF PARTICIPATION RATES.—

(1) ALL FAMILIES.—

(A) AVERAGE MONTHLY RATE.—For purposes of subsection (a)(1), the participation rate for all families of a 

State for a fiscal year is the average of the participation 

rates for all families of the State for each month in the fiscal year. 

161

(B) MONTHLY PARTICIPATION RATES.—The participation 

rate of a State for all families of the State for a month, expressed as a percentage, is—

(i) the number of families receiving assistance under 

the State program funded under this part that include 

an adult or a minor child head of household who is engaged in work for the month; divided by 

(ii) the amount by which—

(I) the number of families receiving such assistance during the month that include an adult or a 

minor child head of household receiving such assistance; exceeds 

(II) the number of families receiving such assistance that are subject in such month to a penalty 

described in subsection (e)(1) but have not been 

subject to such penalty for more than 3 months 

within the preceding 12-month period (whether or 

not consecutive). 

ø(2) 2-PARENT FAMILIES.—

ø(A) AVERAGE MONTHLY RATE.—For purposes of subsection (a)(2), the participation rate for 2-parent families of 

a State for a fiscal year is the average of the participation 

rates for 2-parent families of the State for each month in 

the fiscal year. 

ø(B) MONTHLY PARTICIPATION RATES.—The participation 

rate of a State for 2-parent families of the State for a 

month shall be calculated by use of the formula set forth 

in paragraph (1)(B), except that in the formula the term 

‘‘number of 2-parent families’’ shall be substituted for the 

term ‘‘number of families’’ each place such latter term appears. 

ø(C) FAMILY WITH A DISABLED PARENT NOT TREATED AS

A 2-PARENT FAMILY.—A family that includes a disabled parent shall not be considered a 2-parent family for purposes 

of subsections (a) and (b) of this section.¿

(2) EMPLOYMENT CREDIT.— (A) IN GENERAL.—Subject to subsection (a)(2), beginning 

with fiscal year 2008, the Secretary shall, by regulation, reduce the minimum participation rate otherwise applicable 

to a State under this subsection for a fiscal year by the 

number of percentage points in the employment credit for 

the State for the fiscal year, as determined by the Secretary—

(i) using information in the National Directory of 

New Hires; 

(ii) with respect to a recipient of assistance or former 

recipient of assistance under the State program funded 

under this part who is placed with an employer whose 

hiring information is not reported to the National Directory of New Hires, using quarterly wage information 

submitted by the State to the Secretary not later than 

such date as the Secretary shall prescribe in regulations; or 

(iii) with respect to families described in subclause 

(II) or (III) of subparagraph (B)(ii), using such other 

162

data (including data relating to qualified State expenditures (as defined in section 409(a)(7)(B)(i)) or any 

other State programs that are used to provide nonrecurring short-term benefits or substantial child care 

or transportation assistance to such families) as the 

Secretary may require in order to determine the employment credit for a State under this paragraph. 

(B) CALCULATION OF CREDIT.—

(i) IN GENERAL.—The employment credit for a State 

for a fiscal year is an amount equal to the sum of the 

amounts determined under clause (ii), divided by the 

amount determined under clause (iii). 

(ii) NUMERATOR.—For purposes of clause (i), the 

amounts determined under this clause are the following: 

(I) Twice the quarterly average unduplicated 

number of families that include an adult or minor 

child head of household recipient of assistance 

under the State program funded under this part, 

that ceased to receive such assistance for at least 

2 consecutive months following case closure for the 

family during the applicable period (as defined in 

clause (v)), that did not receive assistance under a 

separate State-funded program during such 2-

month period, and that were employed during the 

calendar quarter immediately succeeding the quarter in which the assistance under the State program funded under this part ceased. 

(II) At the option of the State, twice the quarterly 

average number of families that received a nonrecurring short-term benefit under the State program funded under this part during the applicable 

period (as defined in clause (v)), that were employed during the calendar quarter immediately 

succeeding the quarter in which the nonrecurring 

short-term benefit was so received, and that earned 

at least $1,000 during such succeeding calendar 

quarter. 

(III) At the option of the State, twice the quarterly average number of families that include an 

adult who is receiving substantial child care (including child care funded by transfers under section 404(d) to the Child Care and Development 

Block Grant Act of 1990) or transportation assistance (as defined by the Secretary, in consultation 

with directors of State programs funded under this 

part, which definition shall specify for each type of 

assistance a threshold which is a dollar value or 

a length of time over which the assistance is received and which takes into account large one-time 

transition payments) during the applicable period 

(as defined in clause (v)) and that were employed 

during the calendar quarter in which the substantial child care or transportation assistance was so 

163

received and earned at least $1,000 during such 

calendar quarter. 

(iii) DENOMINATOR.—For purposes of clause (i), the 

amount determined under this clause is the amount 

equal to the sum of the following: 

(I) The average monthly number of families that 

include an adult or minor child head of household 

who received assistance under the State program 

funded under this part during the applicable period (as defined in clause (v)). 

(II) If the State elected the option under clause 

(ii)(II), twice the quarterly average number of families that received a nonrecurring short-term benefit 

under the State program funded under this part 

during the applicable period (as defined in clause 

(v)). 

(III) If the State elected the option under clause 

(ii)(III), twice the quarterly average number of 

families that includes an adult who is receiving 

substantial child care (including child care funded 

by transfers under section 404(d) to the Child Care 

and Development Block Grant Act of 1990) or 

transportation assistance during the applicable period (as defined in clause (v)). 

(iv) SPECIAL RULE FOR FORMER RECIPIENTS WITH

HIGHER EARNINGS.—In calculating the employment 

credit for a State for a fiscal year, in the case of a family that includes an adult or a minor child head of 

household that is to be included in the amount determined under clause (ii)(I) and that, with respect to the 

quarter in which the family’s earnings was examined 

during the applicable period, earned at least 33 percent 

of the average quarterly earnings in the State (determined on the basis of State unemployment data), the 

family shall be considered to be 1.5 families. 

(v) DEFINITION OF APPLICABLE PERIOD.—For purposes of this paragraph, the term ‘applicable period’ 

means, with respect to a fiscal year, the most recent 4 

quarters for which data are available to the Secretary 

providing information on the work status of—

(I) individuals in the quarter after the individuals ceased receiving assistance under the State 

program funded under this part; 

(II) at State option, individuals in the quarter 

after the individuals received a short-term, nonrecurring benefit; and 

(III) at State option, individuals in the quarter 

in which the individuals received substantial child 

care or transportation assistance. 

(C) NOTIFICATION TO STATE.—Not later than August 31 

of each fiscal year, the Secretary shall—

(i) determine, on the basis of the applicable period, 

the amount of the employment credit that will be used 

in determining the minimum participation rate for a 

164

State under subsection (a) for the immediately succeeding fiscal year; and 

(ii) notify each State conducting a State program 

funded under this part of the amount of the employment credit for such program for the succeeding fiscal 

year.

(3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO

CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW AND

NOT RESULTING FROM CHANGES IN STATE ELIGIBILITY CRITERIA.—

(A) IN GENERAL.—The Secretary shall prescribe regulations for reducing the minimum participation rate otherwise required by this section for a fiscal year by the number of percentage points equal to the number of percentage 

points (if any) by which—

(i) the average monthly number of families receiving 

assistance during the immediately preceding fiscal 

year under the State program funded under this part 

is less than 

(ii) the average monthly number of families that received aid under the State plan approved under part 

A (as in effect on September 30, 1995) during fiscal 

year 1995. 

The minimum participation rate shall not be reduced to 

the extent that the Secretary determines that the reduction in the number of families receiving such assistance is 

required by Federal law. 

(B) ELIGIBILITY CHANGES NOT COUNTED.—The regulations required by subparagraph (A) shall not take into account families that are diverted from a State program 

funded under this part as a result of differences in eligibility criteria under a State program funded under this 

part and eligibility criteria under the State program operated under the State plan approved under part A (as such 

plan and such part were in effect on September 30, 1995). 

Such regulations shall place the burden on the Secretary 

to prove that such families were diverted as a direct result 

of differences in such eligibility criteria. 

(4) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN OR TRIBAL

WORK PROGRAM.—For purposes of øparagraphs (1)(B) and 

(2)(B)¿ determining monthly participation rates under paragraph (1)(B), a State may, at its option, include families in the 

State that are receiving assistance under a tribal family assistance plan approved under section 412 or under a tribal work 

program to which funds are provided under this part. 

ø(5) STATE OPTION FOR PARTICIPATION REQUIREMENT EXEMPTIONS.—For any fiscal year, a State may, at its option, not require an individual who is a single custodial parent caring for 

a child who has not attained 12 months of age to engage in 

work, and may disregard such an individual in determining 

the participation rates under subsection (a) for not more than 

12 months.¿

165

(5) STATE OPTIONS FOR PARTICIPATION REQUIREMENT EXEMP- TIONS.—At the option of a State, a State may, on a case-by-case 

basis—

(A) not include a family in the determination of the 

monthly participation rate for the State in the first month 

for which the family receives assistance from the State program funded under this part on the basis of the most recent 

application for such assistance; or 

(B) not require a family in which the youngest child has 

not attained 12 months of age to engage in work, and may 

disregard that family in determining the minimum participation rate under subsection (a) for the State for not more 

than 12 months.

ø(c) ENGAGED IN WORK.— ø(1) GENERAL RULES.— ø(A) ALL FAMILIES.—For purposes of subsection 

(b)(1)(B)(i), a recipient is engaged in work for a month in 

a fiscal year if the recipient is participating in work activities for at least the minimum average number of hours per 

week specified in the following table during the month, not 

fewer than 20 hours per week of which are attributable to 

an activity described in paragraph (1), (2), (3), (4), (5), (6), 

(7), (8), or (12) of subsection (d), subject to this subsection:

øThe minimum 

øIf the month is average number of 

in fiscal year: hours per week is: 

ø1997 ............................................................................. 20

ø1998 ............................................................................. 20

ø1999 ............................................................................. 25

ø2000 or thereafter ....................................................... 30.

ø(B) 2-PARENT FAMILIES.—For purposes of subsection 

(b)(2)(B), an individual is engaged in work for a month in 

a fiscal year if—

ø(i) the individual and the other parent in the family are participating in work activities for a total of at 

least 35 hours per week during the month, not fewer 

than 30 hours per week of which are attributable to 

an activity described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of subsection (d), subject to this 

subsection; and 

ø(ii) if the family of the individual receives federallyfunded child care assistance and an adult in the family is not disabled or caring for a severely disabled 

child, the individual and the other parent in the family are participating in work activities for a total of at 

least 55 hours per week during the month, not fewer 

than 50 hours per week of which are attributable to 

an activity described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of subsection (d). 

ø(2) LIMITATIONS AND SPECIAL RULES.— ø(A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS

AS WORK.— ø(i) LIMITATION.—Notwithstanding paragraph (1) of 

this subsection, an individual shall not be considered 

to be engaged in work by virtue of participation in an 

activity described in subsection (d)(6) of a State proVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00169 Fmt 6659 Sfmt 6601 E:\HR\OC\SR051.XXX SR051
166

gram funded under this part, after the individual has 

participated in such an activity for 6 weeks (or, if the 

unemployment rate of the State is at least 50 percent 

greater than the unemployment rate of the United 

States or the State is a needy State (within the meaning of section 403(b)(6)), 12 weeks), or if the participation is for a week that immediately follows 4 consecutive weeks of such participation. 

ø(ii) LIMITED AUTHORITY TO COUNT LESS THAN FULL

WEEK OF PARTICIPATION.—For purposes of clause (i) of 

this subparagraph, on not more than 1 occasion per individual, the State shall consider participation of the 

individual in an activity described in subsection (d)(6) 

for 3 or 4 days during a week as a week of participation in the activity by the individual. 

ø(B) SINGLE PARENT OR RELATIVE WITH CHILD UNDER AGE

6 DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS IF PARENT OR RELATIVE IS ENGAGED IN WORK FOR 20

HOURS PER WEEK.—For purposes of determining monthly 

participation rates under subsection (b)(1)(B)(i), a recipient 

who is the only parent or caretaker relative in the family 

of a child who has not attained 6 years of age is deemed 

to be engaged in work for a month if the recipient is engaged in work for an average of at least 20 hours per week 

during the month. 

ø(C) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED

TEEN WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE

DEEMED TO BE MEETING WORK PARTICIPATION REQUIREMENTS.—For purposes of determining monthly participation rates under sub-section (b)(1)(B)(i), a recipient who is 

married or a head of household and has not attained 20 

years of age is deemed to be engaged in work for a month 

in a fiscal year if the recipient—

ø(i) maintains satisfactory attendance at secondary 

school or the equivalent during the month; or 

ø(ii) participates in education directly related to employment for an average of at least 20 hours per week 

during the month. 

ø(D) LIMITATION ON NUMBER OF PERSONS WHO MAY BE

TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPATION IN EDUCATIONAL ACTIVITIES.—For purposes of determining monthly participation rates under paragraphs 

(1)(B)(i) and (2)(B) of subsection (b), not more than 30 percent of the number of individuals in all families and in 2-

parent families, respectively, in a State who are treated as 

engaged in work for a month may consist of individuals 

who are determined to be engaged in work for the month 

by reason of participation in vocational educational training, or (if the month is in fiscal year 2000 or thereafter) 

deemed to be engaged in work for the month by reason of 

subparagraph (C) of this paragraph.¿

(c) DETERMINATION OF COUNTABLE HOURS ENGAGED IN WORK.—

(1) SINGLE PARENT OR RELATIVE WHOSE YOUNGEST CHILD HAS

ATTAINED AGE 6.—

167

(A) MINIMUM AVERAGE NUMBER OF HOURS PER WEEK.—

Subject to the succeeding paragraphs of this subsection, a 

family in which an adult recipient or minor child head of 

household in the family is participating in work activities 

described in subsection (d) shall be treated as engaged in 

work for purposes of determining monthly participation 

rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 20, but 

less than 24, hours per week in a month, as 0.675 of 

a family. 

(ii) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 24, but 

less than 30, hours per week in a month, as 0.75 of a 

family. 

(iii) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 30, but 

less than 34, hours per week in a month, as 0.875 of 

a family. 

(iv) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 34, but 

less than 35, hours per week in a month, as 1 family. 

(v) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 35, but 

less than 38, hours per week in a month, as 1.05 families. 

(vi) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 38 hours 

per week in a month, as 1.08 families. 

(B) DIRECT WORK ACTIVITIES REQUIRED FOR AN AVERAGE

OF 24 HOURS PER WEEK.—Except as provided in subparagraph (C)(i), a State may not count any hours of participation in work activities specified in paragraph (9), (10), or 

(11) of subsection (d) of any adult recipient or minor child 

head of household in a family before the total number of 

hours of participation by any adult recipient or minor child 

head of household in the family in work activities described 

in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d) for the family for the month averages at least 24 

hours per week. 

(C) STATE FLEXIBILITY TO COUNT PARTICIPATION IN CERTAIN ACTIVITIES.—

168

(i) QUALIFIED ACTIVITIES FOR 3-MONTHS IN ANY 24- MONTH PERIOD.— (I) 24-HOURS PER WEEK REQUIRED.—Subject to 

subclauses (III) and (IV), for purposes of determining hours under subparagraph (A), a State 

may count the total number of hours any adult recipient or minor child head of household in a family engages in qualified activities described in subclause (II) as a work activity described in subsection (d), without regard to whether the recipient 

has satisfied the requirement of subparagraph (B), 

but only if—

(aa) the total number of hours of participation in such qualified activities and in any 

work activities described in paragraph (1), (2), 

(3), (4), (5), (6), (7), (8), or (12) of subsection 

(d) for the family for the month average at 

least 24 hours per week (except that if such 

hours average at least 20, but less than 24, 

hours per week, the State may count that family in accordance with subparagraph (A)(i)); 

and 

(bb) engaging in such qualified activities is 

a requirement of the family self-sufficiency 

plan. 

(II) QUALIFIED ACTIVITIES DESCRIBED.—For purposes of subclause (I), qualified activities described 

in this subclause are any of the following: 

(aa) Postsecondary education. 

(bb) Adult literacy programs or activities, 

including participation in a program designed 

to increase proficiency in the English language. 

(cc) Substance abuse counseling or treatment (including drug or alcohol abuse counseling or treatment). 

(dd) Programs or activities designed to remove barriers to work, as defined by the State. 

(ee) Work activities authorized under any 

waiver for any State that was continued under 

section 415 before the date of enactment of the 

Personal Responsibility and Individual Development for Everyone Act (without regard to 

whether the waiver expired prior to such date 

of enactment). 

(ff) Financial literacy training that is not 

otherwise countable under items (aa) through 

(ee), except that the State may not count more 

than an average of 5 hours per week of such 

training. 

(gg) Programs or activities design to develop 

parenting skills. 

(III) LIMITATION.—Except as provided in clause 

(ii), in any period of 24 consecutive months, subclause (I) shall not apply to a family for more than 

169

3 months (no more than 1 month of which may be 

attributable to activities described in subclause 

(II)(ff)). 

(IV) CERTAIN ACTIVITIES.—The Secretary may 

allow a State to count the total hours of participation in qualified activities described in subclause 

(II) for an adult recipient or minor child head of 

household without regard to the minimum 24 hour 

average per week of participation requirement 

under subclause (I) if the State has demonstrated 

conclusively that such activities are part of a substantial and supervised program whose effectiveness in moving families to self-sufficiency is superior to any alternative activities and the effectiveness of the program in moving families to self-sufficiency would be substantially impaired if participating individuals participated in additional, concurrent qualified activities that enabled the individuals to achieve an average of at least 24 hours 

per week of participation. 

(ii) ADDITIONAL 3-MONTH PERIOD PERMITTED FOR

CERTAIN ACTIVITIES.— (I) SELF-SUFFICIENCY PLAN REQUIREMENT COM- BINED WITH MINIMUM NUMBER OF HOURS.—A State 

may extend the 3-month period under clause (i) for 

an additional 3 months in the same period of 24 

consecutive months in the case of an adult recipient or minor child head of household who is receiving qualified rehabilitative services described in 

subclause (II) if—

(aa) the total number of hours that the adult 

recipient or minor child head of household engages in such qualified rehabilitative services 

and, subject to subclause (III), a work activity 

described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of subsection (d) for the 

month average at least 24 hours per week; and 

(bb) engaging in such qualified rehabilitative services is a requirement of the family 

self-sufficiency plan. 

(II) QUALIFIED REHABILITATIVE SERVICES DESCRIBED.—For purposes of subclause (I), qualified 

rehabilitative services described in this subclause 

are any of the following: 

(aa) Adult literacy programs or activities, 

including participation in a program designed 

to increase proficiency in the English language.

(bb) In the case of an adult recipient or 

minor child head of household who has been 

certified by a qualified medical, mental health, 

or social services professional (as defined by 

the State) as having a physical or mental disability, substance abuse problem (including a 

drug or alcohol abuse problem), or other probVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00173 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
170

lem that requires a rehabilitative service, substance abuse treatment (including drug or alcohol abuse treatment), or mental health treatment, the service or treatment determined necessary by a professional. 

(iii) NONAPPLICATION OF LIMITATIONS ON JOB

SEARCH AND VOCATIONAL EDUCATIONAL TRAINING.—An 

adult recipient or minor child head of household who 

is participating in qualified activities described in subclause (II) of clause (i) during a 3-month period under 

that clause, or receiving qualified rehabilitative services described in subclause (II) of clause (ii) during an 

additional period under that clause, may engage in a 

work activity described in paragraph (6) or (8) of subsection (d) for purposes of satisfying the minimum 24 

hour average per week of participation requirement 

under clause (i)(I)(aa) or clause (ii)(I)(aa), respectively, 

without regard to any limit that otherwise applies to 

the activity (including the 30 percent limitation on participation in vocational educational training under 

paragraph (6)(C)). 

(iv) HOURS IN EXCESS OF AN AVERAGE OF 24 WORK

ACTIVITY HOURS PER WEEK.—If the total number of 

hours that any adult recipient or minor child head of 

household in a family has participated in a work activity described in paragraph (1), (2), (3), (4), (5), (6), (7), 

(8), or (12) of subsection (d) averages at least 24 hours 

per week in a month, a State, for purposes of determining hours under subparagraph (A), may count any 

additional hours an adult recipient or minor child 

head of household in the family engages in—

(I) any work activity described in subsection (d), 

without regard to any limit that otherwise applies 

to the activity (including the 6-week limitation on 

job search and job readiness assistance under 

paragraph (6)(B) and the 30 percent limitation on 

participation in vocational educational training 

under paragraph (6)(C)); and 

(II) any qualified activity described in clause 

(i)(II), as a work activity described in subsection 

(d). 

(2) SINGLE PARENT OR RELATIVE WITH A CHILD UNDER AGE

6.—

(A) IN GENERAL.—A family in which an adult recipient 

or minor child head of household in the family is the only 

parent or caretaker relative in the family of a child who 

has not attained 6 years of age and who is participating in 

work activities described in subsection (d) shall be treated 

as engaged in work for purposes of determining monthly 

participation rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 20, 

171

but less than 24, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 24, 

but less than 35, hours per week in a month, as 1 family. 

(iii) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 35, 

but less than 38, hours per week in a month, as 1.05 

families. 

(iv) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 38 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK ACTIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a family described in subparagraph 

(A) in the same manner as such subparagraphs apply to a 

family described in paragraph (1)(A). 

(3) 2-PARENT FAMILIES.—

(A) IN GENERAL.—Subject to paragraph (6)(A), a 2-parent 

family in which an adult recipient or minor child head of 

household in the family is participating in work activities 

described in subsection (d) shall be treated as engaged in 

work for purposes of determining monthly participation 

rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 26, 

but less than 30, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 30, 

but less than 35, hours per week in a month, as 0.75 

of a family. 

(iii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 35, 

but less than 39, hours per week in a month, as 0.875 

of a family. 

(iv) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 39, 

172

but less than 40, hours per week in a month, as 1 family. 

(v) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 40, 

but less than 43, hours per week in a month, as 1.05 

families. 

(vi) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 43 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK ACTIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a 2-parent family described in subparagraph (A) in the same manner as such subparagraphs 

apply to a family described in paragraph (1)(A), except that 

subparagraph (B) of paragraph (1) shall be applied to such 

a 2-parent family by substituting ‘‘34’’ for ‘‘24’’ each place 

it appears. 

(4) 2-PARENT FAMILIES THAT RECEIVE FEDERALLY FUNDED

CHILD CARE.— (A) IN GENERAL.—Subject to paragraph (6)(A), if a 2-parent family receives federally funded child care assistance, 

an adult recipient or minor child head of household in the 

family participating in work activities described in subsection (d) shall be treated as engaged in work for purposes 

of determining monthly participation rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 40, 

but less than 45, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 45, 

but less than 51, hours per week in a month, as 0.75 

of a family. 

(iii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 51, 

but less than 55, hours per week in a month, as 0.875 

of a family. 

(iv) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 55, 

but less than 56, hours per week in a month, as 1 family. 

173

(v) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 56, 

but less than 59, hours per week in a month, as 1.05 

families. 

(vi) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 59 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK ACTIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a 2-parent family described in subparagraph (A) in the same manner as such subparagraphs 

apply to a family described in paragraph (1)(A), except that 

subparagraph (B) of paragraph (1) shall be applied to such 

a 2-parent family by substituting ‘‘50’’ for ‘‘24’’ each place 

it appears. 

(5) CALCULATION OF HOURS PER WEEK.—

(A) IN GENERAL.—The number of hours per week that a 

family is engaged in work is the quotient of—

(i) the total number of hours per month that the family is engaged in work; divided by 

(ii) 4. 

(B) DETERMINATION OF TOTAL NUMBER OF HOURS PER

MONTH.—The total number of hours per month in which a 

family is engaged in work is equal to the sum of the number of hours of participation in work activities described in 

subsection (d) for all adults and minor child head of households in the family for the month. 

(6) SPECIAL RULES.—

(A) FAMILY WITH A DISABLED PARENT NOT TREATED AS A

2-PARENT FAMILY.—A family that includes a disabled parent shall not be considered a 2-parent family for purposes 

of paragraph (3) or (4). 

(B) NUMBER OF WEEKS FOR WHICH JOB SEARCH AND JOB

READINESS ASSISTANCE COUNTS AS WORK.—An individual 

shall not be considered to be engaged in work for a month 

by virtue of participation in an activity described in subsection (d)(6) of a State program funded under this part, 

after the individual has participated in such an activity for 

6 weeks per fiscal year (or, if the unemployment rate of the 

State is at least 50 percent greater than the unemployment 

rate of the United States, or the State meets the criteria of 

subclause (I), (II), or (III) of section 403(b)(3)(A)(iii) or satisfies the applicable duration requirement of section 

403(b)(3)(B), 12 weeks per fiscal year).

(C) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED TEEN

WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE

DEEMED TO COUNT AS 1 FAMILY.—For purposes of determining hours under the preceding paragraphs of this subsection, with respect to a month, a State shall count a reVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00177 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
174

cipient who is married or a head of household and who has 

not attained 20 years of age as 1 family if the recipient—

(i) maintains satisfactory attendance at a secondary 

school or the equivalent during the month; or 

(ii) participates in education directly related to employment for an average of at least 20 hours per week 

during the month. 

(D) LIMITATION ON NUMBER OF PERSONS WHO MAY BE

TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPA- TION IN EDUCATIONAL ACTIVITIES.—Except as provided in 

paragraph (1)(C)(ii)(I), for purposes of subsection 

(b)(1)(B)(i), not more than 30 percent of the number of individuals in all families in a State who are treated as engaged in work for a month may consist of individuals who 

are—

(i) determined (without regard to individuals participating in a program established under section 404(l)) 

to be engaged in work for the month by reason of participation in vocational educational training (but only 

with respect to such training that is used to meet the 

requirements of paragraph (1)(B)); or 

(ii) deemed to be engaged in work for the month by 

reason of subparagraph (C) of this paragraph. 

(E) STATE OPTION TO DEEM PARENT CARING FOR A CHILD

OR ADULT DEPENDENT FOR CARE WITH A PHYSICAL OR MEN- TAL IMPAIRMENT TO BE MEETING ALL OR PART OF A FAMILY’S

WORK PARTICIPATION REQUIREMENTS FOR A MONTH.— (i) IN GENERAL.—A State may count the number of 

hours per week that an adult recipient or minor child 

head of household who is the parent or caretaker relative for a child or adult dependent for care with a 

physical or mental impairment engages in providing 

substantial ongoing care for such child or adult dependent for care if the State determines that—

(I) the child or adult dependent for care has been 

verified through a medically acceptable clinical or 

diagnostic technique as having a significant physical or mental impairment or combination of impairments that require substantial ongoing care; 

(II) the adult recipient or minor child head of 

household providing such care is the most appropriate means, as determined by the State, by which 

such care can be provided to the child or adult dependent for care; 

(III) for each month in which this subparagraph 

applies to the adult recipient or minor child head 

of household, the adult recipient or minor child 

head of household is in compliance with the requirements of the family’s self-sufficiency plan; 

and 

(IV) the recipient is unable to participate fully in 

work activities, after consideration of whether 

there are supports accessible and available to the 

family for the care of the child or adult dependent 

for care. 

175

(ii) TOTAL NUMBER OF HOURS LIMITED TO BEING

COUNTED AS 1 FAMILY.—In no event may a family that 

includes a recipient to which clause (i) applies be 

counted as more than 1 family for purposes of determining monthly participation rates under subsection 

(b)(1)(B)(i). 

(iii) STATE REQUIREMENTS.—In the case of a recipient to which clause (i) applies, the State shall—

(I) conduct regular, periodic evaluations of the 

family of the adult recipient or minor child head 

of household; and 

(II) include as part of the family’s self-sufficiency 

plan, regular updates on what special needs of the 

child or the adult dependent for care, including 

substantial ongoing care, could be accommodated 

either by individuals other than the adult recipient 

or minor child head of household outside of the 

home. 

(iv) RULE OF CONSTRUCTION.—Nothing in this subparagraph shall be construed as prohibiting a State 

from including in a recipient’s self-sufficiency plan a 

requirement to engage in work activities described in 

subsection (d). 

(F) OPTIONAL MODIFICATION OF WORK REQUIREMENTS

FOR RECIPIENTS RESIDING IN AREAS OF INDIAN COUNTRY OR

AN ALASKAN NATIVE VILLAGE WITH HIGH JOBLESSNESS.—If 

a State has included in the State plan a description of the 

State’s policies in areas of Indian country or an Alaskan 

Native village described in section 408(a)(7)(D), the State 

may define the activities that the State will treat as being 

work activities described in subsection (d) that a recipient 

who resides in such an area and who is participating in 

such activities in accordance with a self-sufficiency plan 

under section 408(b) may engage in for purposes of satisfying work requirements under the State program and for 

purposes of determining monthly participation rates under 

subsection (b)(1)(B)(i).

(d) WORK ACTIVITIES DEFINED.—As used in this section, the term 

‘‘work activities’’ means—

(1) unsubsidized employment; 

* * * * * * *

(8) vocational educational training (not to exceed 12 months 

with respect to any individual other than an individual participating in a program established under section 404(l)); 

(9) job skills training directly related to employment; 

(10) education directly related to employment, in the case of 

a recipient who has not received a high school diploma or a 

certificate of high school equivalency; 

(11) satisfactory attendance at secondary school or in a 

course of study leading to a certificate of general equivalence, 

in the case of a recipient who has not completed secondary 

school or received such a certificate; øand¿

(12) the provision of child care services to an individual who 

is participating in a community service programø.¿; and

176

(13) marriage education, marriage skills training, conflict 

resolution counseling in the context of marriage, and participation in programs that promote marriage.

* * * * * * *

ø(f) NONDISPLACEMENT IN WORK ACTIVITIES.— ø(1) IN GENERAL.—Subject to paragraph (2), an adult in a 

family receiving assistance under a State program funded 

under this part attributable to funds provided by the Federal 

Government may fill a vacant employment position in order to 

engage in a work activity described in subsection (d). 

ø(2) NO FILLING OF CERTAIN VACANCIES.—No adult in a work 

activity described in subsection (d) which is funded, in whole 

or in part, by funds provided by the Federal Government shall 

be employed or assigned—

ø(A) when any other individual is on layoff from the 

same or any substantially equivalent job; or 

ø(B) if the employer has terminated the employment of 

any regular employee or otherwise caused an involuntary 

reduction of its workforce in order to fill the vacancy so 

created with an adult described in paragraph (1). 

ø(3) GRIEVANCE PROCEDURE.—A State with a program funded under this part shall establish and maintain a grievance 

procedure for resolving complaints of alleged violations of paragraph (2). 

ø(4) NO PREEMPTION.—Nothing in this subsection shall preempt or supersede any provision of State or local law that provides greater protection for employees from displacement.¿

(f) NONDISPLACEMENT.— (1) IN GENERAL.—An adult in a family receiving assistance 

under a State program funded under this part, in order to engage in a work activity, shall not displace any employee or position (including partial displacement, such as a reduction in the 

hours of nonovertime work, wages, or employment benefits), fill 

any unfilled vacancy, or perform work when any individual is 

on layoff from the same or substantially equivalent job. 

(2) PROHIBITIONS.—A work activity engaged in under a program operated with funds provided under this part shall not 

impair any existing contract for services, be inconsistent with 

any existing law, regulation, or collective bargaining agreement, 

or infringe upon the recall rights or promotional opportunities 

of any worker. 

(3) NO SUPPLANTING OF OTHER HIRES.—A work activity engaged in under a program operated with funds provided under 

this part shall be in addition to any activity that otherwise 

would be available and shall not supplant the hiring of an employed worker not funded under such program. 

(4) ENFORCING ANTIDISPLACEMENT PROTECTIONS.— (A) IN GENERAL.—The State shall establish and maintain 

an impartial grievance procedure, which shall include the 

opportunity for a hearing, to resolve any complaints alleging violations of the requirements of paragraph (1), (2), or 

(3) within 60 days of receipt of the complaint and, if a decision is adverse to the party who filed such grievance or no 

decision has been reached, provide for the completion of an 

arbitration procedure within 75 days of receipt of the comVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00180 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
177

plaint or the adverse decision or conclusion of the 60-day 

period, whichever is earlier. 

(B) APPEALS.—Appeals may be made to the Secretary 

who shall make a decision within 75 days of receipt of an 

appeal. 

(C) REMEDIES.—Remedies for a violation of the requirements of paragraph (1), (2), or (3) shall include—

(i) suspension or termination of payments from funds 

provided under this part; 

(ii) prohibition of placement of a participant with an 

employer that has violated paragraph (1), (2), or (3); 

(iii) where applicable, reinstatement of an employee, 

payment of lost wages and benefits, and reestablishment of other relevant terms, conditions and privileges 

of employment; and 

(iv) where appropriate, other equitable relief. 

(D) LIMITATION ON PLACEMENT.—If a grievance is filed 

regarding a proposed placement of a participant, such 

placement shall not be made unless such placement is consistent with the resolution of the grievance pursuant to this 

paragraph. 

(E) NON-EXCLUSIVE PROCEDURES.—The grievance procedures specified in this paragraph are not exclusive, and an 

aggrieved employee or participant in a program funded 

under a grant made under this part may pursue other remedies or procedures available under applicable contracts, 

collective bargaining agreements, or Federal, State, or local 

laws. 

(E) NO PREEMPTION.—The provisions of this subsection 

shall not be construed to preempt any provision of State or 

local law that affords greater protections to employees or to 

other participants engaged in work activities under a program funded under this part than is afforded by the provisions of this subsection.

* * * * * * *

SEC. 408. PROHIBITIONS; REQUIREMENTS. 

(a) IN GENERAL.—

* * * * * * *

ø(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN

SUPPORT RIGHTS TO THE STATE.—

ø(A) IN GENERAL.—A State to which a grant is made 

under section 403 shall require, as a condition of providing 

assistance to a family under the State program funded 

under this part, that a member of the family assign to the 

State any rights the family member may have (on behalf 

of the family member or of any other person for whom the 

family member has applied for or is receiving such assistance) to support from any other person, not exceeding the 

total amount of assistance so provided to the family, which 

accrue (or have accrued) before the date the family ceases 

to receive assistance under the program, which assignment, on and after such date, shall not apply with respect 

to any support (other than support collected pursuant to 

178

section 464) which accrued before the family received such 

assistance and which the State has not collected by—

ø(i)(I) September 30, 2000, if the assignment is executed on or after October 1, 1997, and before October 

1, 2000; or 

ø(II) the date the family ceases to receive assistance 

under the program, if the assignment is executed on 

or after October 1, 2000; or 

ø(ii) if the State elects to distribute collections under 

section 457(a)(6), the date the family ceases to receive 

assistance under the program, if the assignment is executed on or after October 1, 1998. 

ø(B) LIMITATION.—A State to which a grant is made 

under section 403 shall not require, as a condition of providing assistance to any family under the State program 

funded under this part, that a member of the family assign 

to the State any rights to support described in subparagraph (A) which accrue after the date the family ceases to 

receive assistance under the program.¿

(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN

SUPPORT RIGHTS TO THE STATE.—A State to which a grant is 

made under section 403 shall require, as a condition of paying 

assistance to a family under the State program funded under 

this part, that a member of the family assign to the State any 

right the family member may have (on behalf of the family 

member or of any other person for whom the family member 

has applied for or is receiving such assistance) to support from 

any other person, not exceeding the total amount of assistance 

so paid to the family, which accrues during the period that the 

family receives assistance under the program.

(4) NO ASSISTANCE FOR TEENAGE PARENTS WHO DO NOT ATTEND HIGH SCHOOL OR OTHER EQUIVALENT TRAINING PROGRAM.—A State to which a grant is made under section 403 

shall not use any part of the grant to provide assistance to an 

individual who has not attained 18 years of age, is not married, has a minor child at least 12 weeks of age in his or her 

care, and has not successfully completed a high-school education (or its equivalent), if the individual does not participate 

in—

(A) educational activities directed toward the attainment 

of a high school diploma or its equivalent; or 

(B) an alternative educational or training program that 

has been approved by the State. 

(5) NO ASSISTANCE FOR TEENAGE PARENTS NOT LIVING IN

ADULT-SUPERVISED SETTINGS.—

(A) IN GENERAL.—

(i) REQUIREMENT.—Except as provided in øsubparagraph (B)¿ subparagraphs (B) and (C), a State to 

which a grant is made under section 403 shall not use 

any part of the grant to provide assistance to an individual described in clause (ii) of this subparagraph if 

the individual and the minor child referred to in 

clause (ii)(II) ødo not reside in a¿ do not reside in a— (I) place of residence maintained by a parent, 

legal guardian, or other adult relative of the indiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00182 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
179

vidual as such parent’s, guardian’s, or adult relative’s own homeƒ.≈; and

(II) transitional living youth project funded 

under a grant made under section 321 of the Runaway and Homeless Youth Act (42 U.S.C. 5714–1). 

(ii) INDIVIDUAL DESCRIBED.—For purposes of clause 

(i), an individual described in this clause is an individual who—

* * * * * * *

(C) AUTHORITY TO PROVIDE TEMPORARY ASSISTANCE.—A 

State may use any part of a grant made under section 403 

to provide assistance to an individual described in clause 

(ii) of subparagraph (A) who would otherwise be prohibited 

from receiving such assistance under clause (i) of that subparagraph, subparagraph (B), or section 408(a)(4) for not 

more than a single 60-day period in order to assist the individual in meeting the requirement of clause (i) of subparagraph (A), subparagraph (B), or section 408(a)(4) for 

receipt of such assistance.

* * * * * * *

(6) NO MEDICAL SERVICES.—

(A) IN GENERAL.—A State to which a grant is made 

under section 403 shall not use any part of the grant to 

provide medical services. 

* * * * * * *

(D) DISREGARD OF MONTHS OF ASSISTANCE RECEIVED BY

ADULT WHILE LIVING IN INDIAN øCOUNTRY OR AN ALASKAN

NATIVE VILLAGE WITH 50 PERCENT UNEMPLOYMENT¿ country 

with high joblessness or in an alaskan native village with 

50 percent unemployment.

(i) øIN GENERAL.—In determining the number of 

months for which an adult has received assistance 

under a State or tribal program funded under this 

part, the State or tribe shall disregard any month during which the adult lived in Indian country or an Alaskan Native village if the most reliable data available 

with respect to the month (or a period including the 

month) indicate that at least 50 percent of the adults 

living in Indian country or in the village were not employed.¿

(i) IN GENERAL.—Subject to clauses (ii), (iii), and (iv), 

in determining the number of months for which an 

adult has received assistance under a State or tribal 

program funded under this part, the State or Indian 

tribe shall disregard any month during which the 

adult lived in Indian country if the most reliable data 

available (or such other data submitted by a State or 

tribal program as the Secretary may approve) with respect to the month (or a period including the month) 

indicate that at least 40 percent of the adult recipients, 

who were living in Indian country were jobless. 

(ii) ECONOMIC DOWNTURN.—If—

180

(I) in the case of a State program funded under 

this part—

(aa) the unemployment rate of the State is at 

least 50 percent greater than the unemployment rate of the United States; and 

(bb) the State meets the criteria of subclause 

(I), (II), or (III) of section 403(b)(3)(A)(iii) and 

satisfies the applicable duration requirement 

of section 403(b)(3)(B): or 

(II) in the case of a tribal program funded under 

this part, the Indian tribe satisfies the criteria 

specified under section 403(b)(1)(D)(ii), 

clause (i) shall be applied by substituting ‘‘35 percent’’ 

for ‘‘40 percent’’. 

(iii) REQUIREMENT.—A month may only be disregarded under clause (i) with respect to an adult recipient described in that clause if the adult is in compliance with program requirements. 

(iv) CONTINUATION OF 50 PERCENT UNEMPLOYMENT

REQUIREMENT FOR AN ALASKAN NATIVE VILLAGE.—In 

the case of an Alaskan Native village, this subparagraph shall be applied without regard to the amendments made by the Personal Responsibility and Individual Development for Everyone Act.

ø(ii)¿ (v) INDIAN COUNTRY DEFINED.—As used in 

clause (i), the term ‘‘Indian country’’ has the meaning 

given such term in section 1151 of title 18, United 

States Code. 

* * * * * * *

ø(b) INDIVIDUAL RESPONSIBILITY PLANS.—

ø(1) ASSESSMENT.—The State agency responsible for administering the State program funded under this part shall make 

an initial assessment of the skills, prior work experience, and 

employability of each recipient of assistance under the program 

who—

ø(A) has attained 18 years of age; or 

ø(B) has not completed high school or obtained a certificate of high school equivalency, and is not attending secondary school. 

ø(2) CONTENTS OF PLANS.— ø(A) IN GENERAL.—On the basis of the assessment made 

under subsection (a) with respect to an individual, the 

State agency, in consultation with the individual, may develop an individual responsibility plan for the individual, 

which—

ø(i) sets forth an employment goal for the individual 

and a plan for moving the individual immediately into 

private sector employment; 

ø(ii) sets forth the obligations of the individual, 

which may include a requirement that the individual 

attend school, maintain certain grades and attendance, keep school age children of the individual in 

school, immunize children, attend parenting and 

money management classes, or do other things that 

181

will help the individual become and remain employed 

in the private sector; 

ø(iii) to the greatest extent possible is designed to 

move the individual into whatever private sector employment the individual is capable of handling as 

quickly as possible, and to increase the responsibility 

and amount of work the individual is to handle over 

time; 

ø(iv) describes the services the State will provide the 

individual so that the individual will be able to obtain 

and keep employment in the private sector, and describe the job counseling and other services that will 

be provided by the State; and 

ø(v) may require the individual to undergo appropriate substance abuse treatment. 

ø(B) TIMING.—The State agency may comply with paragraph (1) with respect to an individual—

ø(i) within 90 days (or, at the option of the State, 

180 days) after the effective date of this part, in the 

case of an individual who, as of such effective date, is 

a recipient of aid under the State plan approved under 

part A (as in effect immediately before such effective 

date); or 

ø(ii) within 30 days (or, at the option of the State, 

90 days) after the individual is determined to be eligible for such assistance, in the case of any other individual. 

ø(3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL.—In addition to any other penalties required under the State program 

funded under this part, the State may reduce, by such amount 

as the State considers appropriate, the amount of assistance 

otherwise payable under the State program to a family that includes an individual who fails without good cause to comply 

with an individual responsibility plan signed by the individual. 

ø(4) STATE DISCRETION.—The exercise of the authority of this 

subsection shall be within the sole discretion of the State.¿

(b) FAMILY SELF-SUFFICIENCY PLANS.— (1) IN GENERAL.—A State to which a grant is made under section 403 shall—

(A) make an initial screening and assessment, in the 

manner deemed appropriate by the State, of the skills, prior 

work experience, education obtained, work readiness, barriers to work, and employability of each adult or minor 

child head of household recipient of assistance in the family who—

(i) has attained age 18; or 

(ii) has not completed high school or obtained a certificate of high school equivalency and is not attending 

secondary school; 

(B) assess, in the manner deemed appropriate by the 

State, the work support and other assistance and family 

support services for which each family receiving assistance 

is eligible; and 

(C) assess, in the manner deemed appropriate by the 

State, the well-being of the children in the family, and, 

182

where appropriate, activities or resources to improve the 

well-being of the children. 

(2) CONTENTS OF PLANS.—The State shall, in the manner 

deemed appropriate by the State establish for each family that 

includes an individual described in paragraph (1)(A) (and, if 

the State elects, each family that only consists of a child or children), in consultation as the State deems appropriate with the 

individual, a self-sufficiency plan that—

(A) specifies activities described in the State plan submitted pursuant to section 402, including work activities 

described in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or 

(12) of section 407(d), as appropriate; 

(B) is designed to assist the family in achieving their 

maximum degree of self-sufficiency; 

(C) provides for the ongoing participation of the individual in the activities specified in the plan; 

(D) requires, at a minimum, each such individual to participate in activities in accordance with the self-sufficiency 

plan; 

(E) sets forth the appropriate supportive services the 

State intends to provide for the family; 

(F) establishes for the family a plan that addresses the 

issue of child well-being and, when appropriate, adolescent 

well-being, and that may include services such as domestic 

violence counseling, mental health referrals, and parenting 

courses; and 

(G) includes a section designed to assist the family by informing the family, in such manner as deemed appropriate 

by the State, of the work support and other assistance for 

which the family may be eligible including (but not limited 

to)—

(i) the food stamp program established under the 

Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.); 

(ii) the medicaid program funded under title XIX; 

‘‘(iii) the State children’s health insurance program 

funded under title XXI; 

(iv) Federal or State funded child care, including 

child care funded under the Child Care Development 

Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) and 

funds made available under this title or title XX; 

(v) the earned income tax credit under section 32 of 

the Internal Revenue Code of 1986; 

(vi) the low-income home energy assistance program 

established under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.); 

(vii) the special supplemental nutrition program for 

women, infants, and children established under section 

17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786); 

(viii) programs conducted under the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.); and 

(ix) low-income housing assistance programs. 

(3) STATE OPTION TO RECEIVE WORK PARTICIPATION RATE

CREDIT FOR AN INDIVIDUAL WHOSE PLAN SPECIFIES THAT THEY

HAVE A CONTINUING NEED FOR REHABILITATIVE SERVICES IN

ORDER TO ENGAGE IN DIRECT WORK ACTIVITIES.—

183

(A) IN GENERAL.—A State may elect, on a case-by-case 

basis, to include direct work activities by an individual described in subparagraph (B) that are combined with rehabilitative services in the determination of monthly participation rates under section 407(b)(1)(B)(i). 

(B) INDIVIDUAL DESCRIBED.—For purposes of this paragraph, an individual described in this subparagraph is an 

individual who—

‘‘(i) is an adult or minor child head of household recipient of assistance; 

(ii) was treated as being engaged in work during 

each of the 3-month periods applicable under clauses 

(i) and (ii) of section 407(c)(1)(C); and 

(iii) the State determines—

(I) has been verified through a medically acceptable clinical or diagnostic technique as having a 

disability that impedes the individual’s ability to 

function in a work setting; and 

(II) continues to need rehabilitative services in 

order to engage in direct work activities. 

(C) REQUIREMENTS.—A State shall not include activities 

of an individual described in subparagraph (B) in the determination of monthly participation rates under section 

407(b)(1)(B)(i) unless the following requirements are met: 

(i) DEVELOPMENT AND MAINTENANCE OF COLLABORATIVE RELATIONSHIPS.—

(I) IN GENERAL.—The State agency responsible 

for administering the State program funded under 

this part has or is developing collaborative and referral relationships with other governmental and 

private agencies with expertise in disability determinations, or the development of appropriate services plans for individuals with disabilities, to address the needs of adult or minor child head of 

household recipients of assistance who have a disability and require such services plans in order to 

engage in direct work activities. 

(II) INCLUSION OF RELATIONSHIPS WITH AGENCIES FUNDED UNDER THIS PART.—The governmental and private agencies referred to in subclause (I) include agencies that may be receiving 

funds under this part, such as State and local 

mental health agencies, substance abuse treatment 

providers (including drug or alcohol abuse treatment providers), disability service agencies, and 

providers of vocational rehabilitation services. 

(ii) SELF-SUFFICIENCY PLAN SPECIFIES THE INDIVIDUAL’S CONTINUING NEED FOR SERVICES AND COORDINATION PROCESS WITH PROVIDERS.—The plan established 

under paragraph (2) for an individual described in 

subparagraph (B)—

(I) specifies the individual’s continuing need for 

rehabilitative services in order to engage in direct 

work activities; and 

184

(II) describes how the State will coordinate with 

each provider of such services. 

(iii) STATE PLAN DESCRIPTION AND ASSURANCES.— The State includes in an addendum to the State plan 

submitted under section 402 the following: 

(I) DESCRIPTION OF PROCESS FOR DEVELOPING

AND MAINTAINING COLLABORATIVE RELATION- SHIPS.—A description of the process the State shall 

use to develop and maintain the collaborative and 

referral relationships with other governmental and 

private agencies required under clause (i). 

(II) ASSURANCE OF REGULAR CONTACT WITH

SERVICE PROVIDERS, REEVALUATION, AND MODIFICATION OF PLAN.—An assurance that the State 

shall—

(aa) ensure that each provider of rehabilitative services for an individual described in 

subparagraph (B) is in regular contact with 

the individual and that the provider will inform the State if the individual is no longer 

participating in the rehabilitation services; 

(bb) reevaluate the individual’s continuing 

need for such services not less than once each 

fiscal year quarter; and 

(cc) make appropriate modifications to the 

individual’s self-sufficiency plan on the basis 

of such information and reevaluations. 

(iv) NO DETERMINATION THAT THE STATE HAS FAILED

TO COMPLY WITH THE REQUIREMENT TO DEVELOP AND

MAINTAIN COLLABORATIVE RELATIONSHIPS.—The Secretary has not made a determination that the State has 

failed to comply with the requirement to develop and 

maintain the collaborative and referral relationships 

with other governmental and private agencies required 

under clause (i). 

(D) CREDIT FOR HOURS OF PARTICIPATION IN DIRECT

WORK ACTIVITIES AND REHABILITATION SERVICES.— (i) IN GENERAL.—A State may include in the determination of monthly participation rates under section 

407(b)(1)(B)(i) the sum of the total number of hours 

that an individual described in subparagraph (B) participates for a month in—

(I) direct work activities; and 

(II) rehabilitative services (but only up to the 

number of hours of such services that do not exceed 

the total number of hours that the individual participated in direct work activities for that month). 

(ii) APPLICATION OF RULES FOR DETERMINATION OF

COUNTABLE HOURS OF WORK.—The sum of hours of 

participation by such an individual shall be treated 

under section 407(c) in the same manner as a family 

participating in work activities described in section 

407(d) is treated as engaged in work under section 

407(c). 

(E) DEFINITIONS.—In this paragraph: 

185

(i) DISABILITY.—The term ‘disability’ means a physical or mental impairment, including substance abuse 

and drug or alcohol abuse, that—

(I) constitutes or results in a substantial impediment to employment; or 

(II) substantially limits 1 or more major life activities. 

(ii) DIRECT WORK ACTIVITY.—The term ‘direct work 

activity’ means an activity described in paragraph (1), 

(2), (3), (4), (5), (6), (7), (8), or (12) of section 407(d). 

(4) REVIEW.— (A) REGULAR REVIEW.—A State to which a grant is made 

under section 403 shall—

(i) monitor the participation of each adult recipient or 

minor child head of household in the activities specified in the self-sufficiency plan, and regularly review 

the progress of the family toward self-sufficiency; and 

(ii) upon such a review, revise the plan and activities 

required under the plan as the State deems appropriate 

in consultation with the family. 

(B) PRIOR TO THE IMPOSITION OF A SANCTION.—Prior to imposing a sanction against an adult recipient, minor child 

head of household, or a family for failure to comply with 

a requirement of the self-sufficiency plan or the State program funded under this part, the State shall, in the manner determined appropriate by the State—

(i) review the self-sufficiency plan; and 

(ii) make a good faith effort (as defined by the State) 

to consult with the family. 

(5) STATE DISCRETION.—Subject to paragraph (3), a State shall 

have sole discretion, consistent with section 407, to define and 

design activities for families for purposes of this subsection, to 

develop methods for monitoring and reviewing progress pursuant to this subsection, and to make modifications to the plan 

as the State deems appropriate to assist the individual in increasing their degree of self-sufficiency. 

(6) APPLICATION TO PARTIALLY SANCTIONED FAMILIES.—The requirements of this subsection shall apply in the case of a family 

that includes an adult or minor child head of household recipient of assistance who is subject to a partial sanction. 

(7) TIMING.—The State shall initiate screening and assessment 

and the establishment of a family self-sufficiency plan in accordance with the requirements of this subsection— 

(A) in the case of a family that, as of the date of enactment 

of the Personal Responsibility and Individual Development 

for Everyone Act, is not receiving assistance from the State 

program funded under this part, not later than the later 

of—

(i) 1 year after such date of enactment; or 

(ii) 60 days after the family first receives assistance on 

the basis of the most recent application for assistance; 

and 

(B) in the case of a family that, as of such date, is receiving 

assistance under the State program funded under this part, 

not later than 1 year after such date of enactment. 

186

(8) RULE OF INTERPRETATION.—Nothing in this subsection shall 

preclude a State from—

(A) requiring participation in work and any other activities 

the State deems appropriate for helping families achieve 

self-sufficiency and improving child well-being; or 

(B) using job search or other appropriate job readiness or 

work activities to assess the employability of individuals 

and to determine appropriate future engagement activities.

* * * * * * *

SEC. 409. PENALTIES. 

(a) IN GENERAL.—Subject to this section: 

(1) USE OF GRANT IN VIOLATION OF THIS PART.—

* * * * * * *

(2) FAILURE TO SUBMIT REQUIRED REPORT.—

* * * * * * *

(3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES or comply with family self-sufficiency plan requirements.— (A) IN GENERAL.—If the secretary determines that a State 

to which a grant is made under section 403 for a fiscal 

year has failed to comply with section 407(a) or 408(b) for 

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 the 

applicable percentage of the State family assistance grant. 

* * * * * * *

ø(C) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) 

with respect to a fiscal year based on the degree of noncompliance, and may reduce the penalty if the noncompliance is due to circumstances that caused the State to become a needy State (as defined in section 403(b)(6)) during 

the fiscal year or if the noncompliance is due to extraordinary circumstances such as a natural disaster or regional recession. The Secretary shall provide a written report to Congress to justify any waiver or penalty reduction 

due to such extraordinary circumstances.¿

(C) PENALTY BASED ON SEVERITY OF FAILURE.— (i) FAILURE TO SATISFY MINIMUM PARTICIPATION

RATE.—If, with respect to fiscal year 2007 or any fiscal 

year thereafter, the Secretary finds that a State has 

failed or is failing to substantially comply with the requirements of section 407(a) for that fiscal year, the 

Secretary shall impose reductions under subparagraph 

(A) with respect to the immediately succeeding fiscal 

year based on the degree of substantial noncompliance. 

In assessing the degree of substantial noncompliance 

under section 407(a) for a fiscal year, the Secretary 

shall take into account factors such as—

(I) the degree to which the State missed the minimum participation rate for that fiscal year; 

(II) the change in the number of individuals who 

are engaged in work in the State since the prior 

fiscal year; and 

187

(III) the number of consecutive fiscal years in 

which the State failed to reach the minimum participation rate. 

(ii) FAILURE TO COMPLY WITH SELF-SUFFICIENCY

PLAN REQUIREMENTS.—If, with respect to fiscal year 

2007 or any fiscal year thereafter, the Secretary finds 

that a State has failed or is failing to substantially 

comply with the requirements of section 408(b) for that 

fiscal year, the Secretary shall impose reductions under 

subparagraph (A) with respect to the immediately succeeding fiscal year based on the degree of substantial 

noncompliance. In assessing the degree of substantial 

noncompliance under section 408(b), the Secretary 

shall take into account factors such as—

(I) the number or percentage of families for 

which a self-sufficiency plan is not established in 

a timely fashion for that fiscal year; 

(II) the duration of the delays in establishing a 

self-sufficiency plan during that fiscal year; 

(III) whether the failures are isolated and nonrecurring; and 

(IV) the existence of systems designed to ensure 

that self-sufficiency plans are established for all 

families in a timely fashion and that families’ 

progress under such plans is monitored. 

(iii) AUTHORITY TO REDUCE THE PENALTY.—The Secretary may reduce the penalty that would otherwise 

apply under this paragraph if the substantial noncompliance is due to circumstances that caused the 

State to meet the criteria of subclause (I), (II), or (III) 

of section 403(b)(3)(A)(iii) or to satisfy the applicable 

duration requirement of section 403(b)(3)(B) during the 

fiscal year, or if the noncompliance is due to extraordinary circumstances such as a natural disaster or regional recession. The Secretary shall provide a written 

report to Congress to justify any waiver or penalty reduction due to such extraordinary circumstances.

* * * * * * *

(7) FAILURE OF ANY STATE TO MAINTAIN CERTAIN LEVEL OF

HISTORIC EFFORT.— (A) IN GENERAL.—The Secretary shall reduce the grant 

payable to the State under section 403(a)(1) for fiscal year 

1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, øor 2006¿

2006, 2007, 2008, 2009, 2010, or 2011 by the amount (if 

any) by which qualified State expenditures for the then immediately preceding fiscal year are less than the applicable 

percentage of historic State expenditures with respect to 

such preceding fiscal year. 

(B) DEFINITIONS.—As used in this paragraph: 

(i) QUALIFIED STATE EXPENDITURES.—

(I) IN GENERAL.—The term ‘‘qualified State expenditures’’ means, with respect to a State and a 

fiscal year, the total expenditures by the State 

during the fiscal year, under all State programs, 

188

for any of the following with respect to eligible 

families: 

(aa) Cash assistance, including any amount 

collected by the State as support pursuant to 

a plan approved under part D, on behalf of a 

family receiving assistance under the State 

program funded under this part, that is distributed to the family under section 

ø457(a)(1)(B)¿ 457(a)(1) and disregarded in 

determining the eligibility of the family for, 

and the amount of, such assistance. 

(bb) Child care assistance. 

* * * * * * *

(III) EXCLUSION OF AMOUNTS EXPENDED TO RE- PLACE PENALTY GRANT REDUCTIONS.—Such term 

does not include any amount expended in order to 

comply with paragraph ø(12)¿ (11). 

* * * * * * *

(V) COUNTING OF SPENDING ON NON-ELIGIBLE

FAMILIES TO PREVENT AND REDUCE INCIDENCE OF

OUT-OF-WEDLOCK BIRTHS, ENCOURAGE FORMATION

AND MAINTENANCE OF HEALTHY 2-PARENT MARRIED

FAMILIES, OR ENCOURAGE RESPONSIBLE FATHER- HOOD.—Subject to subclauses (II) and (III), the 

term ‘‘qualified State expenditures’’ includes the 

total expenditures by the State during the fiscal 

year under all State programs for a purpose described in paragraph (3) or (4) of section 401(a). 

(VI) PORTIONS OF CERTAIN CHILD SUPPORT PAYMENTS COLLECTED ON BEHALF OF AND DISTRIB- UTED TO FAMILIES NO LONGER RECEIVING ASSIST- ANCE.—Any amount paid by a State pursuant to 

clause (i) or (ii) of section 457(a)(2)(B), but only to 

the extent that the State properly elects under section 457(a)(6) to have the payment considered a 

qualified State expenditure.

(ii) APPLICABLE PERCENTAGE.—The term ‘‘applicable 

percentage’’ means øfor fiscal years 1997 through 

2005,¿ 80 percent (or, if the State meets the requirements of section 407(a) for the preceding fiscal year, 

75 percent). 

* * * * * * *

(III) any State funds which are used to match 

Federal funds provided under section 403(a)(5); or 

(IV) any State funds which are expended as a 

condition of receiving Federal funds other than 

under this part. 

Notwithstanding subclause (IV) of the preceding sentence, such term includes expenditures by a State for 

child care in a fiscal year to the extent that the total 

amount of the expenditures does not exceed the 

amount of State expenditures in fiscal year 1994 or 

1995 (whichever is the greater) that equal the nonVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00192 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
189

Federal share for the programs described in section 

418(a)(1)(A). 

(v) SOURCE OF DATA.—In determining expenditures 

by a State for fiscal years 1994 and 1995, the Secretary shall use information which was reported by 

the State on ACF Form 231 or (in the case of expenditures under part F) ACF Form 331, available as of the 

dates specified in clauses (ii) and (iii) of section 

403(a)(1)(D). 

(8) NONCOMPLIANCE OF STATE CHILD SUPPORT ENFORCEMENT

PROGRAM WITH REQUIREMENTS OF PART D.— (A) IN GENERAL.—If the Secretary finds, with respect to 

a State’s program under part D, øin a fiscal year¿ for a fiscal year beginning on or after October 1, 1997—

(i)(I) on the basis of data submitted by a State pursuant to section 454(15)(B), or on the basis of the results of a review conducted under section 452(a)(4), 

that the State program failed to achieve the paternity 

establishment percentages (as defined in section 

452(g)(2)), or to meet other performance measures that 

may be established by the Secretary; 

(II) on the basis of the results of an audit or audits 

conducted under section 452(a)(4)(C)(i) that the State 

data submitted pursuant to section 454(15)(B) is incomplete or unreliable; or 

(III) on the basis of the results of an audit or audits 

conducted under section 452(a)(4)(C) that a State 

failed to substantially comply with 1 or more of the requirements of part D (other than paragraph (24), or 

subparagraph (A) or (B)(i) of paragraph (27), of section 

454); and 

(ii) øthat, with respect to the succeeding fiscal 

year—¿ that, with respect to the period described in 

subparagraph (D)—

(I) the State failed to take sufficient corrective 

action to achieve the appropriate performance levels or compliance as described in subparagraph 

(A)(i); or 

(II) the data submitted by the State pursuant to 

section 454(15)(B) is incomplete or unreliable; the 

amounts otherwise payable to the State under this 

part for quarters following øthe end of such succeeding fiscal year¿ the end of the period in subparagraph (D), prior to quarters following the end 

of the first quarter throughout which the State 

program has achieved the paternity establishment 

percentages or other performance measures as described in subparagraph (A)(i)(I), or is in substantial compliance with 1 or more of the requirements of part D as described in subparagraph 

(A)(i)(III), as appropriate, shall be reduced by the 

percentage specified in subparagraph (B). 

(B) AMOUNT OF REDUCTIONS.—The reductions required 

under subparagraph (A) shall be—

(i) not less than 1 nor more than 2 percent; 

190

(ii) not less than 2 nor more than 3 percent, if the 

finding is the 2nd consecutive finding made pursuant 

to subparagraph (A); or 

(iii) not less than 3 nor more than 5 percent, if the 

finding is the 3rd or a subsequent consecutive such 

finding. 

(C) DISREGARD OF NONCOMPLIANCE WHICH IS OF A TECH- NICAL NATURE.—For purposes of this section and section 

452(a)(4), a State determined as a result of an audit—

(i) to have failed to have substantially complied with 

1 or more of the requirements of part D shall be determined to have achieved substantial compliance only if 

the Secretary determines that the extent of the noncompliance is of a technical nature which does not adversely affect the performance of the State’s program 

under part D; or 

(ii) to have submitted incomplete or unreliable data 

pursuant to section 454(15)(B) shall be determined to 

have submitted adequate data only if the Secretary 

determines that the extent of the incompleteness or 

unreliability of the data is of a technical nature which 

does not adversely affect the determination of the level 

of the State’s paternity establishment percentages (as 

defined under section 452(g)(2)) or other performance 

measures that may be established by the Secretary.

(D) PERIOD DESCRIBED.—Subject to subparagraph (E), 

for purposes of this paragraph, the period described in this 

subparagraph is the period that begins with the date on 

which the Secretary makes a finding described in subparagraph (A)(i) with respect to State performance in a fiscal 

year and ends on September 30 of the fiscal year following 

the fiscal year in which the Secretary makes such a finding. 

(E) NO PENALTY IF STATE CORRECTS NONCOMPLIANCE IN

FINDING YEAR.—The Secretary shall not take a reduction 

described in subparagraph (A) with respect to a noncompliance described in clause (i) of that subparagraph if the Secretary determines that the State has corrected the noncompliance in the fiscal year in which the Secretary makes 

the finding of the noncompliance.

(9) FAILURE TO COMPLY WITH 5-YEAR LIMIT ON ASSISTANCE.—

If the Secretary determines that a State has not complied with 

section 408(a)(7) during a 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 

5 percent of the State family assistance grant. 

ø(10) FAILURE OF STATE RECEIVING AMOUNTS FROM CONTIN- GENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT.—

If, at the end of any fiscal year during which amounts from the 

Contingency Fund for State Welfare Programs have been paid 

to a State, the Secretary finds that the qualified State expenditures (as defined in paragraph (7)(B)(i) (other than the expenditures described in subclause (I)(bb) of that paragraph)) under 

the State program funded under this part for the fiscal year 

are less than 100 percent of historic State expenditures (as deVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00194 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
191

fined in paragraph (7)(B)(iii) of this subsection), excluding any 

amount expended by the State for child care under subsection 

(g) or (i) of section 402 (as in effect during fiscal year 1994) for 

fiscal year 1994, the Secretary shall reduce the grant payable 

to the State under section 403(a)(1) for the immediately succeeding fiscal year by the total of the amounts so paid to the 

State that the State has not remitted under section 403(b)(6).¿

ø(11)¿ (10) FAILURE TO MAINTAIN ASSISTANCE TO ADULT SIN- GLE CUSTODIAL PARENT WHO CANNOT OBTAIN CHILD CARE FOR

CHILD UNDER AGE 6.— (A) IN GENERAL.—If the Secretary determines that a 

State to which a grant is made under section 403 for a fiscal year has violated section 407(e)(2) 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 

5 percent of the State family assistance grant. 

(B) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) 

with respect to a fiscal year based on the degree of noncompliance. 

ø(12)¿ (11) REQUIREMENT TO EXPEND ADDITIONAL STATE

FUNDS TO REPLACE GRANT REDUCTIONS; PENALTY FOR FAILURE

TO DO SO.—If the grant payable to a State under section 

403(a)(1) for a fiscal year is reduced by reason of this subsection, the State shall, during the immediately succeeding fiscal year, expend under the State program funded under this 

part an amount equal to the total amount of such reductions. 

If the State fails during such succeeding fiscal year to make 

the expenditure required by the preceding sentence from its 

own funds, the Secretary may reduce the grant payable to the 

State under section 403(a)(1) for the fiscal year that follows 

such succeeding fiscal year by an amount equal to the sum of—

(A) not more than 2 percent of the State family assistance grant; and 

(B) the amount of the expenditure required by the preceding sentence. 

ø(13)¿ (12) PENALTY FOR FAILURE OF STATE TO MAINTAIN HIS- TORIC EFFORT DURING YEAR IN WHICH WELFARE-TO-WORK GRANT

IS RECEIVED.—If a grant is made to a State under section 

403(a)(5)(A) for a fiscal year and paragraph (7) of this subsection requires the grant payable to the State under section 

403(a)(1) to be reduced for the immediately succeeding fiscal 

year, then the Secretary shall reduce the grant payable to the 

State under section 403(a)(1) for such succeeding fiscal year by 

the amount of the grant made to the State under section 

403(a)(5)(A) for the fiscal year. 

ø(14)¿ (13) PENALTY FOR FAILURE TO REDUCE ASSISTANCE FOR

RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO WORK.—

* * * * * * *

(b) REASONABLE CAUSE EXCEPTION.— (1) IN GENERAL.—The Secretary may not impose a penalty on 

a State under subsection (a) with respect to a requirement if 

the Secretary determines that the State has reasonable cause 

for failing to comply with the requirement. 

192

(2) EXCEPTION.—Paragraph (1) of this subsection shall not 

apply to any penalty under paragraph ø(6),¿ (7), (8), ø(10), (12), 

or (13)¿ (11), or (12) of subsection (a). 

(c) CORRECTIVE COMPLIANCE PLAN.— (1) IN GENERAL.—

* * * * * * *

(2) EFFECT OF CORRECTING OR DISCONTINUING VIOLATION.—

øThe Secretary¿

(A) In General.—The Secretary may not impose any penalty under subsection (a) with respect to any violation covered by a State corrective compliance plan accepted by the 

Secretary if the State corrects or discontinues, as appropriate, the violation pursuant to the plan.

(B) NO PENALTY IF WORK PROGRAM IMPROVEMENT.—The 

Secretary shall not impose any penalty under subsection 

(a)(3) for a State’s failure to comply with section 407(a) for 

a fiscal year if the Secretary determines that the participation rate determined for the State under section 407(b)(1) 

for that fiscal year increased by at least 5 percentage points 

above the participation rate for the State for the preceding 

fiscal year and a State corrective compliance plan accepted 

by the Secretary specifies how the State will correct the violation. 

* * * * * * *

(3) EFFECT OF FAILING TO CORRECT OR DISCONTINUE VIOLATION.—The Secretary shall assess some or all of a penalty imposed on a State under subsection (a) with respect to a violation if the State does not, in a timely manner, correct or discontinue, as appropriate, the violation pursuant to a State corrective compliance plan accepted by the Secretary. 

(4) INAPPLICABILITY TO CERTAIN PENALTIES.—This subsection 

shall not apply to the imposition of a penalty against a State 

under paragraph ø(6),¿ (7), (8), (10), (12), or (13) of subsection 

(a). 

* * * * * * *

SEC. 411. DATA COLLECTION AND REPORTING. 

(a) QUARTERLY REPORTS BY STATES.—

(1) GENERAL REPORTING REQUIREMENT.—

(A) CONTENTS OF REPORT.—Each eligible State shall collect on a monthly basis, and report to the Secretary on a 

quarterly basis, the following disaggregated case record information on the families receiving assistance under the 

State program funded under this part (except for information relating to activities carried out under section 

403(a)(5)ø)¿: and on families receiving assistance under 

State programs funded with other qualified State expenditures (as defined in section 409(a)(7)(B)(i)); 

* * * * * * *

(vii) The race and educational level of each adult 

and minor parent in the family. 

(viii) The race øand educational level¿ of each child 

in the family. 

193

(ix) Whether the family received subsidized housing, 

medical assistance under the State plan approved 

under title XIX, food stamps, or subsidized child careø, and if the latter 2, the amount received¿. (x) The number of months that the family has received øeach type of¿ assistance under the program 

and, if applicable, the reason for receipt of the assistance for a total of more than 60 months.

ø(xi) If the adults participated in, and the number 

of hours per week of participation in, the following activities: 

ø(I) Education. 

ø(II) Subsidized private sector employment. 

ø(III) Unsubsidized employment. 

ø(IV) Public sector employment, work experience, or community service. 

ø(V) Job search. 

ø(VI) Job skills training or on-the-job training. 

ø(VII) Vocational education.¿

(xi) If the adult or minor child head of household 

participated in, and the average number of hours per 

week of participation in, each activity listed in subsections (c)(1)(i)(II) (including average hours per week 

in each different type of rehabilitative activity as prescribed by the Secretary) and (d) of section 407 and 

other work or self-sufficiency activities.

(xii) Information necessary to calculate participation 

rates and progress toward universal engagement under 

section 407. 

(xiii) The øtype and¿ amount of assistance received 

under the program, including the amount of and reason for any reduction of assistance (including sanctions). 

(xiv) Any amount of unearned income received by 

any member of the family. 

(xv) The citizenship of the members of the family. 

(xvi) From a sample of closed cases, whether the 

family left the program, and if so, whether the family 

left due to—

ø(I) employment; 

ø(II) marriage;¿

ø(III)¿ (II) the prohibition set forth in section 

408(a)(7); 

ø(IV)¿ (III) sanction; or 

ø(V)¿ (IV) State policy. 

(xvii) With respect to each individual in the family 

who has not attained 20 years of age, whether the individual is a parent of a child in the family.

(xviii) The date the family first received assistance 

from the State program on the basis of the most recent 

application for such assistance. 

(xix) Whether a self-sufficiency plan is established for 

the family in accordance with section 408(b). 

(xx) With respect to any child in the family, the marital status of the parents at the birth of the child, and 

194

if the parents were not then married, whether the paternity of the child has been established.

(B) USE OF SAMPLES.— (i) AUTHORITY.—A State may comply with subparagraph (A) by submitting disaggregated case record information on øa sample¿ samples of families selected 

through the use of scientifically acceptable sampling 

methods approved by the Secretary, except that the 

Secretary may designate core data elements that must 

be reported on all families.

(ii) SAMPLING AND OTHER METHODS.—The Secretary 

shall provide the States with such case sampling plans 

and data collection procedures as the Secretary deems 

necessary to produce statistically valid estimates of 

the performance of State programs øfunded under this 

part¿ described in subparagraph (A). The Secretary 

may develop and implement procedures for verifying 

the quality of data submitted by the States. 

* * * * * * *

ø(5) REPORT ON TRANSITIONAL SERVICES.—The report required by paragraph (1) for a fiscal quarter shall include the 

total amount expended by the State during the quarter to provide transitional services to a family that has ceased to receive 

assistance under this part because of employment, along with 

a description of such services.¿

ø(6)¿ (5) REPORT ON FAMILIES RECEIVING ASSISTANCE.—The 

report required by paragraph (1) for a fiscal quarter shall include for each month in the quarter—

* * * * * * *

(6) REPORT ON FAMILIES THAT BECOME INELIGIBLE TO RE- CEIVE ASSISTANCE.— (A) IN GENERAL.—The report required by paragraph (1) 

for a fiscal quarter shall include for each month in the 

quarter the number of families and total number of individuals that, during the month, became ineligible to receive 

assistance under the State program funded under this part 

(broken down by the number of families that become so ineligible due to earnings, changes in family composition that 

result in increased earnings, sanctions, time limits, or other 

specified reasons). 

(B) INFORMATION REGARDING FAMILIES IN SEPARATE

STATE PROGRAMS.—The report required by paragraph (1) 

for a fiscal quarter shall include for each month in the 

quarter the number of families and total number of individuals that, during the month, received assistance under 

State programs funded with qualified State expenditures 

(as defined in section 409(a)(7)(B)(i)). 

(7) REPORT ON TANF-FUNDED CHILD CARE.—

(A) IN GENERAL.—Subject to subparagraphs (B), (C), and 

(D), the report required by paragraph (1) for a fiscal quarter shall include for each month in the quarter the information described in section 658K(a) of the Child Care and Development Block Grant Act of 1990 with respect to each 

family that received child care that was funded in whole or 

195

in part with funds provided under section 403 (other than 

funds transferred under section 404(d)) or with qualified 

State expenditures (as defined in section 409(a)(7)(B)(i)), 

without regard to whether the family is a recipient or 

former recipient of assistance under the State program 

funded under this part. A State may comply with the requirement of this subparagraph through the use of scientifically acceptable sampling methods approved by the Secretary. 

(B) COORDINATION WITH OTHER REPORTING REQUIRE- MENTS.—

(i) IN GENERAL.—The Secretary shall coordinate the 

reporting required under subparagraph (A) with the reporting required under the Child Care and Development Block Grant Act of 1990 to ensure that States are 

not required to report duplicate information on the 

same families in order to satisfy both requirements. 

(ii) CONSOLIDATED REPORTING.—Notwithstanding 

section 658K(a) of the Child Care and Development 

Block Grant Act of 1990, the Secretary may permit a 

State to submit a consolidated report to satisfy the reporting required under subparagraph (A) and the reporting required under section 658K(a) of the Child 

Care and Development Block Grant Act of 1990, so 

long as the State identifies in the consolidated report 

the funding source for the child care provided to each 

family. 

(C) WAIVER OF REPORTING REQUIREMENT.—The Secretary 

may grant a State a waiver from the requirement to comply 

with subparagraph (A) if—

(i) the Secretary determines that the State has demonstrated that it would be administratively or financially burdensome for the State to comply with such 

subparagraph; and 

(ii) in the case of a State, the State agrees to post on 

a quarterly basis on the website of the State such information as the State may have regarding the characteristics of the families that received child care that was 

funded in whole or in part with funds provided under 

this part. 

(D) APPLICABILITY.—Subparagraph (A) shall apply to a 

State on and after the first fiscal quarter that begins on or 

after 2 years after the date of enactment of the Personal Responsibility and Individual Development for Everyone Act. 

(8) REPORT ON INDIANS SERVED BY THE STATE PROGRAM.—

The report required by paragraph (1) for a fiscal quarter shall 

include information on the demographics and caseload characteristics of Indians served by each State program funded under 

this part or with qualified State expenditures (as defined in section 409(a)(7)(B)(i)) during the quarter.

ø(7)¿ (9) REGULATIONS.—The Secretary shall prescribe such 

regulations as may be necessary to define the data elements 

and to collect the necessary data with respect to which reports 

are required by this øsubsection¿ section, and shall consult 

with the Secretary of Labor øin defining the data elements 

196

with respect to programs operated with funds provided under 

section 403(a)(5).¿

* * * * * * *

(3) the National Governors’ Association, the American Public 

Human Services Association, the National Conference of State 

Legislatures, and others in defining the data elements.

(b) ANNUAL REPORTS ON PROGRAM CHARACTERISTICS.—Not later 

than 90 days after the end of fiscal year 2006 and each succeeding 

fiscal year, each eligible State shall submit to the Secretary a report 

on the characteristics of State programs funded under this part and 

other State programs funded with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)). The report shall include, with respect to each such program, the program name, a description of program activities, the program purpose, the program eligibility criteria, the sources of program funding, the number of program beneficiaries, sanction policies, and any program work requirements. 

(c) MONTHLY REPORTS ON CASELOAD.—Not later than 3 months 

after the end of each calendar month that begins 1 year or more 

after the date of enactment of this subsection, each eligible State 

shall submit to the Secretary a report on the number of families and 

total number of individuals receiving assistance in the calendar 

month under the State program funded under this part and under 

other State programs funded with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)). 

(d) ANNUAL REPORT ON PERFORMANCE IMPROVEMENT AND

PROGRESS TOWARD UNIVERSAL ENGAGEMENT.—Beginning with fiscal year 2007, not later than January 1 of each fiscal year, each eligible State shall submit to the Secretary a report—

(1) on achievement and improvement during the preceding 

fiscal year under the performance goals and measures under 

the State program funded under this part or with qualified 

State expenditures (as defined in section 409(a)(7)(B)(i)) with respect to each of the matters described in section 402(a)(1)(A)(v); 

and 

(2) that details State progress toward full engagement for all 

adult or minor child head of household recipients of assistance.

(a) FUNDING FOR TRIBAL TANF PROGRAMS.—

ø(b)¿ (e) ANNUAL REPORTS TO THE CONGRESS BY THE SECRETARY.—Not later than 6 months after the end of fiscal year 1997, 

øand each fiscal year thereafter¿ and not later than July 1 of each 

fiscal year thereafter, the Secretary shall transmit to the Congress 

a report describing—

* * * * * * *

(2) the demographic and financial characteristics of øfamilies 

applying for assistance,¿ families receiving assistanceø,¿ and 

families that become ineligible to receive assistance; 

(3) the characteristics of each State program funded under 

this part and other programs funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)); øand¿

(4) the trends in employment and earnings of needy families 

with minor children living at homeø.¿; and

(5) State specific information on the demographics and caseload characteristics of Indians served by each State program 

197

funded under this part or with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)).

SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES. 

(a) GRANTS FOR INDIAN TRIBES.—

(1) TRIBAL FAMILY ASSISTANCE GRANT.—

(A) IN GENERAL.—For each of fiscal years ø1997, 1998, 

1999, 2000, 2001, 2002, and 2003¿ 2006 through 2010, the 

Secretary shall pay to each Indian tribe that has an approved tribal family assistance plan a tribal family assistance grant for the fiscal year in an amount equal to the 

amount determined under subparagraph (B), which shall 

be reduced for a fiscal year, on a pro rata basis for each 

quarter, in the case of a tribal family assistance plan approved during a fiscal year for which the plan is to be in 

effect, and shall reduce the grant payable under section 

403(a)(1) to any State in which lies the service area or 

areas of the Indian tribe by that portion of the amount so 

determined that is attributable to expenditures by the 

State. 

* * * * * * *

(2) GRANTS FOR INDIAN TRIBES THAT RECEIVED JOBS FUNDS.—

ø(A) IN GENERAL.—For each of fiscal years 1997, 1998, 

1999, 2000, 2001, 2002, and 2003, the Secretary shall pay 

to each eligible Indian tribe that proposes to operate a program described in subparagraph (C) a grant in an amount 

equal to the amount received by the Indian tribe in fiscal 

year 1994 under section 482(i) (as in effect during fiscal 

year 1994).¿

(A) GRANT AUTHORITY.—For each of fiscal years 2006 

through 2010, the Secretary shall pay to each eligible Indian tribe that proposes to operate a program described in 

subparagraph (C), a grant in an amount that bears the 

same ratio to the amount specified in subparagraph (D) of 

this paragraph as the amount required to be paid to the 

tribe under this paragraph for fiscal year 2004 bears to the 

total amount required to be paid under this paragraph for 

such fiscal year.

* * * * * * *

(D) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated ø$7,633,287¿ $12,633,287 for each fiscal year 

specified in subparagraph (A) for grants under subparagraph (A). 

(3) WELFARE-TO-WORK GRANTS.—

(A) IN GENERAL.—The Secretary of Labor shall award a 

grant in accordance with this paragraph to an Indian tribe 

for each fiscal year specified in section 403(a)(5)(H) for 

which the Indian tribe is a welfare-to-work tribe, in such 

amount as the Secretary of Labor deems appropriate, subject to subparagraph (B) of this paragraph. 

(B) WELFARE-TO-WORK TRIBE.—An Indian tribe shall be 

considered a welfare-to-work tribe for a fiscal year for purVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00201 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
198

poses of this paragraph if the Indian tribe meets the following requirements: 

* * * * * * *

(iv) The Indian tribe has agreed to negotiate in good 

faith with the Secretary of Health and Human Services with respect to the substance and funding of any 

evaluation under section ø413(j)¿ 413(i), and to cooperate with the conduct of any such evaluation. 

(C) LIMITATIONS ON USE OF FUNDS.—

* * * * * * *

(4) TRIBAL IMPROVEMENT GRANTS.—

(A) TRIBAL CAPACITY GRANTS.—

(i) IN GENERAL.—Of the amount appropriated under 

subparagraph (D) for the period of fiscal years 2006 

through 2010, $40,000,000 shall be used by the Secretary to award grants for tribal human services program infrastructure improvement (as defined in clause 

(v)) to—

(I) Indian tribes that have applied for approval 

of a tribal family assistance plan and that meet 

the requirements of clause (ii)(I); 

(II) Indian tribes with an approved tribal family 

assistance plan and that meet the requirements of 

clause (ii)(II); and 

(III) Indian tribes that have applied for approval 

of a foster care and adoption assistance program 

under section 479B or that plan to enter into, or 

have in place, a tribal-State cooperative agreement 

under section 479B(c) and that meet the requirements of clause (ii)(III). 

(ii) PRIORITIES FOR AWARDING OF GRANTS.—The Secretary shall give priority in awarding grants under 

this subparagraph as follows: 

(I) First, for grants to Indian tribes that have 

applied for approval of a tribal family assistance 

plan, that have not operated such a plan as of the 

date of enactment of the Personal Responsibility 

and Individual Development for Everyone Act that 

will have such plan approved, and that include in 

the plan submission provisions for tribal human 

services program infrastructure improvement (as 

so defined) and related management information 

systems training. 

(II) Second, for Indian tribes with an approved 

tribal family assistance plan that are not described 

in subclause (I) and that submit an addendum to 

such plan that includes provisions for tribal 

human services program infrastructure improvement that includes implementing or improving 

management information systems of the tribe (including management information systems training), as such systems relate to the operation of the 

tribal family assistance plan. 

199

(III) Third, for Indian tribes that have applied 

for approval of a foster care and adoption assistance program under section 479B or that plan to 

enter into, or have in place, a tribal-State cooperative agreement under section 479B(c) and that include in the plan submission under section 471 (or 

in an addendum to such plan) provisions for tribal 

human services program infrastructure improvement (as so defined) and related management information systems training. 

(iii) OTHER REQUIREMENTS FOR AWARDING GRANTS.—

In awarding grants under this subparagraph, the Secretary—

(I) may not award an Indian tribe more than 1 

grant under this subparagraph per fiscal year; 

(II) shall award grants in such a manner as to 

maximize the number of Indian tribes that receive 

grants under this subparagraph; and 

(III) shall consult with Indian tribes located 

throughout the United States. 

(iv) APPLICATION.—An Indian tribe desiring a grant 

under this subparagraph shall submit an application 

to the Secretary, at such time, in such manner, and 

containing such information as the Secretary may require. 

(v) DEFINITION OF HUMAN SERVICES PROGRAM INFRASTRUCTURE IMPROVEMENT.—In this subparagraph, the 

term ‘‘human services program infrastructure improvement’’ includes (but is not limited to) improvement of 

management information systems, management information systems-related training, equipping offices, and 

renovating, but not constructing, buildings, as described in an application for a grant under this subparagraph, and subject to approval by the Secretary. 

(B) TRIBAL DEVELOPMENT GRANTS.—

(i) IN GENERAL.—Of the amount appropriated under 

subparagraph (D) for the period of fiscal years 2006 

through 2010, $35,000,000 shall be used by the Secretary to award, through the Commissioner of the Administration for Native Americans, grants to nonprofit 

organizations, Indian tribes, and tribal organizations 

to enable such organizations and tribes to provide technical assistance to Indian tribes and tribal organizations in any or all of the following areas: 

(I) The development and improvement of uniform commercial codes. 

(II) The creation or expansion of small business 

or microenterprise programs. 

(III) The development and improvement of tort 

liability codes. 

(IV) The creation or expansion of tribal marketing efforts. 

(V) The creation or expansion of for-profit collaborative business networks. 

200

(VI) The development of innovative uses of telecommunications to assist with distance learning or 

telecommuting. 

(VII) The development of economic opportunities 

and job creation in areas of high joblessness (as 

defined in section 408(a)(7)(D)). 

(ii) REQUIREMENTS.— (I) IN GENERAL.—At least an amount equal to 30 

percent of the total amount of grants awarded 

under this subparagraph shall be awarded to 

carry out clause (i)(VII). 

(II) CONSULTATION.—In awarding grants under 

this subparagraph the Secretary shall consult with 

other Federal agencies with expertise in the areas 

described in clause (i). 

(iii) APPLICATION.—A nonprofit organization, Indian 

tribe, or tribal organization desiring a grant under this 

subparagraph shall submit an application to the Secretary at such time, in such manner, and containing 

such information as the Secretary may require. 

(C) TECHNICAL ASSISTANCE.— (i) IN GENERAL.—Of the amount appropriated under 

subparagraph (D) for the period of fiscal years 2006 

through 2010, $5,000,000 shall be used by the Secretary for making grants, or entering into contracts, to 

provide technical assistance to Indian tribes—

(I) in applying for or carrying out a grant made 

under this paragraph; 

(II) in applying for or carrying out a tribal family assistance plan under this section; or 

(III) related to best practices and approaches for 

State and tribal coordination on the transfer of the 

administration of social services programs to Indian tribes. 

(ii) RESERVATION OF FUNDS.—Not less than—

(I) $2,500,000 of the amount described in clause 

(i) shall be used by the Secretary to support, 

through grants or contracts, peer-learning programs among tribal administrators; and (II) $1,000,000 of such amount shall be used by 

the Secretary for making grants to Indian tribes to 

conduct feasibility studies of the capacity of Indian 

tribes to operate tribal family assistance plans 

under this part or foster care and adoption assistance programs under section 479B. 

(D) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there is 

appropriated $80,000,000 for the period of fiscal years 2006 

through 2010 to carry out this paragraph. Amounts appropriated under this subparagraph shall remain available 

until expended.

(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.— (1) IN GENERAL.—Any Indian tribe that desires to receive a 

tribal family assistance grant shall submit to the Secretary a 

3-year tribal family assistance plan that—

201

(A) outlines the Indian tribe’s approach to providing welfare-related services for the 3-year period, consistent with 

this section; 

* * * * * * *

(E) identifies the employment opportunities in or near 

the service area or areas of the Indian tribe and the manner in which the Indian tribe will cooperate and participate in enhancing such opportunities for recipients of assistance under the plan consistent with any applicable 

State standards; øand¿

(F) applies the fiscal accountability provisions of section 

5(f)(1) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to the submission of a single-agency audit report required by chapter 75 

of title 31, United States Codeø.¿; and

(G) describes how the Indian tribe will ensure equitable 

access to benefits and services provided under the plan for 

each member of the population to be served by the plan.

(2) APPROVAL.—The Secretary shall approve each tribal family assistance plan submitted in accordance with paragraph (1). 

(3) CONSORTIUM OF TRIBES.—Nothing in this section shall 

preclude the development and submission of a single tribal 

family assistance plan by the participating Indian tribes of an 

intertribal consortium. 

* * * * * * *

ø(f) ELIGIBILITY FOR FEDERAL LOANS.—Section 406 shall apply to 

an Indian tribe with an approved tribal assistance plan in the 

same manner as such section applies to a State, except that section 

406(c) shall be applied by substituting ‘‘section 412(a)’’ for ‘‘section 

403(a)’’.¿

ø(g)¿ (f) PENALTIES.—

(1) Subsections (a)(1), (a)(6), (b), and (c) of section 409, shall 

apply to an Indian tribe with an approved tribal assistance 

plan in the same manner as such subsections apply to a State. 

(2) Section 409(a)(3) shall apply to an Indian tribe with an 

approved tribal assistance plan by substituting ‘‘meet minimum work participation requirements established under section 412(c)’’ for ‘‘comply with section 407(a)’’. 

ø(h)¿ (g) DATA COLLECTION AND REPORTING.—Section 411 shall 

apply to an Indian tribe with an approved tribal family assistance 

plan. 

ø(i)¿ (h) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.—

(1) IN GENERAL.—Notwithstanding any other provision of 

this section, and except as provided in paragraph (2), an Indian tribe in the State of Alaska that receives a tribal family 

assistance grant under this section shall use the grant to operate a program in accordance with requirements comparable to 

the requirements applicable to the program of the State of 

Alaska funded under this part. Comparability of programs 

shall be established on the basis of program criteria developed 

by the Secretary in consultation with the State of Alaska and 

such Indian tribes. 

202

(2) WAIVER.—An Indian tribe described in paragraph (1) may 

apply to the appropriate State authority to receive a waiver of 

the requirement of paragraph (1).

(j) APPLICATION OF INDIAN EMPLOYMENT, TRAINING AND RELATED

SERVICES DEMONSTRATION ACT OF 1992.—Notwithstanding any 

other provision of law, if an Indian tribe elects to incorporate the 

services it provides using funds made available under this part into 

a plan under section 6 of the Indian Employment, Training and Related Services Demonstration Act of 1992 (25 U.S.C. 3405), the programs authorized to be conducted with such funds shall be—

(1) considered to be programs subject to section 5 of the Indian Employment, Training and Related Services Demonstration Act of 1992 (25 U.S.C. 3404); and 

(2) subject to the single plan and single budget requirements 

of section 6 of that Act (25 U.S.C. 3505) and the single report 

format required under section 11 of that Act (25 U.S.C. 3410).

SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES. 

* * * * * * *

(d) ANNUAL RANKING OF STATES AND REVIEW OF MOST AND

LEAST SUCCESSFUL WORK PROGRAMS.— ø(1) ANNUAL RANKING OF STATES.—The Secretary shall rank 

annually the States to which grants are paid under section 403 

in the order of their success in placing recipients of assistance 

under the State program funded under this part into long-term 

private sector jobs, reducing the overall welfare caseload, and, 

when a practicable method for calculating this information becomes available, diverting individuals from formally applying 

to the State program and receiving assistance. In ranking 

States under this subsection, the Secretary shall take into account the average number of minor children living at home in 

families in the State that have incomes below the poverty line 

and the amount of funding provided each State for such families.¿

(1) ANNUAL RANKING OF STATES.— (A) IN GENERAL.—The Secretary shall rank annually the 

States to which grants are paid under section 403 in the 

order of their success in—

(i) placing recipients of assistance under the State 

program funded under this part into unsubsidized 

jobs; 

(ii) the success of the recipients in retaining employment; 

(iii) the ability of the recipients to increase their 

wages; 

(iv) the degree to which recipients have workplace attachment and advancement; 

(v) reducing the overall welfare caseload; and 

(vi) when a practicable method for calculating this 

information becomes available, diverting individuals 

from formally applying to the State program and receiving assistance. 

(B) CONSIDERATION OF OTHER FACTORS.—In ranking 

States under this paragraph, the Secretary shall take into 

account the average number, and the average proportion, of 

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minor children living at home in families in the State that 

have incomes below the poverty line and the amount of 

funding provided each State under this part for such families.

(2) ANNUAL REVIEW OF MOST AND LEAST SUCCESSFUL WORK

PROGRAMS.—The Secretary shall review the programs of the 3 

States most recently ranked highest under paragraph (1) and 

the 3 States most recently ranked lowest under paragraph (1) 

that provide parents with work experience, øassistance¿ aid in 

finding employment, and other work preparation activities and 

support services to enable the families of such parents to leave 

the program and become self-sufficient. 

* * * * * * *

ø(g) REPORT ON CIRCUMSTANCES OF CERTAIN CHILDREN AND FAMILIES.—

ø(1) IN GENERAL.—Beginning 3 years after the date of the 

enactment of this section, the Secretary of Health and Human 

Services shall prepare and submit to the Committees on Ways 

and Means and on Education and the Workforce of the House 

of Representatives and to the Committees on Finance and on 

Labor and Resources of the Senate annual reports that examine in detail the matters described in paragraph (2) with respect to each of the following groups for the period after such 

enactment: 

ø(A) Individuals who were children in families that have 

become ineligible for assistance under a State program 

funded under this part by reason of having reached a time 

limit on the provision of such assistance. 

ø(B) Children born after such date of enactment to parents who, at the time of such birth, had not attained 20 

years of age. 

ø(C) Individuals who, after such date of enactment, became parents before attaining 20 years of age. 

ø(2) MATTERS DESCRIBED.—The matters described in this 

paragraph are the following: 

ø(A) The percentage of each group that has dropped out 

of secondary school (or the equivalent), and the percentage 

of each group at each level of educational attainment. 

ø(B) The percentage of each group that is employed. 

ø(C) The percentage of each group that has been convicted of a crime or has been adjudicated as a delinquent. 

ø(D) The rate at which the members of each group are 

born, or have children, out-of-wedlock, and the percentage 

of each group that is married. 

ø(E) The percentage of each group that continues to participate in State programs funded under this part. 

ø(F) The percentage of each group that has health insurance provided by a private entity (broken down by whether 

the insurance is provided through an employer or otherwise), the percentage that has health insurance provided 

by an agency of government, and the percentage that does 

not have health insurance. 

ø(G) The average income of the families of the members 

of each group. 

204

ø(H) Such other matters as the Secretary deems appropriate.¿

ø(h)¿ (g) FUNDING OF STUDIES AND DEMONSTRATIONS.— (1) IN GENERAL.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated $15,000,000 for each of fiscal years 1997 through 2002 

for the purpose of paying—

* * * * * * *

ø(i)¿ (h) CHILD POVERTY RATES.—

(1) IN GENERAL.—Not later than May 31, 1998, and annually 

thereafter, the chief executive officer of each State shall submit 

to the Secretary a statement of the child poverty rate in the 

State as of such date of enactment or the date of the most recent prior statement under this paragraph. 

* * * * * * *

ø(j)¿ (i) EVALUATION OF WELFARE-TO-WORK PROGRAMS.— (1) EVALUATION.—The Secretary, in consultation with the 

Secretary of Labor and the Secretary of Housing and Urban 

Development—

(2) REPORTS TO THE CONGRESS.— (A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

the Secretary, in consultation with the Secretary of Labor 

and the Secretary of Housing and Urban Development, 

shall submit to the Congress reports on the projects funded under øsection¿ sections 403(a)(5) and 412(a)(3) and on 

the evaluations of the projects. 

* * * * * * *

(j) PERFORMANCE IMPROVEMENT.—The Secretary, in consultation 

with the States, shall develop uniform performance measures designed to assess the degree of effectiveness, and the degree of improvement, of State programs funded under this part in accomplishing the purposes of this part. 

(k) BEST PRACTICES FOR ADDRESSING DOMESTIC VIOLENCE.—

(1) IN GENERAL.—The Secretary shall, by grant, contract, or 

interagency agreement, develop and implement programs that 

are designed to address domestic violence as a barrier to 

healthy relationships, marriage, and economic security. Programs developed and implemented under this subsection shall 

include—

(A) training for caseworkers administering the State program funded under this part; 

(B) technical assistance; 

(C) the provision of voluntary services for victims of such 

violence; and 

(D) activities related to the prevention of domestic violence. 

(2) DOMESTIC VIOLENCE DEFINED.—In this subsection, the 

term ‘‘domestic violence’’ has the meaning given that term in 

section 402(a)(7)(B). 

(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this subsection, $10,000,000 for 

each of fiscal years 2006 through 2010. Amounts appropriated 

to carry out this subsection shall be in addition to and not in 

205

lieu of amounts otherwise appropriated to carry out programs 

to address domestic violence. 

(l) FUNDING FOR RESEARCH, DEMONSTRATIONS, AND TECHNICAL

ASSISTANCE.—

(1) APPROPRIATION.—

(A) IN GENERAL.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated $100,000,000 for each of fiscal years 2005 

through 2010, which shall remain available to the Secretary until expended. 

(B) USE OF FUNDS.—

(i) IN GENERAL.—Funds appropriated under subparagraph (A) shall be used for the purpose of—

(I) conducting or supporting research and demonstration projects by public or private entities; or 

(II) providing technical assistance in connection 

with a purpose of the program funded under this 

part, as described in section 401(a), to States, Indian tribal organizations, sub-State entities, and 

such other entities as the Secretary may specify. 

(ii) REQUIREMENT.—Not less than 80 percent of the 

funds appropriated under subparagraph (A) for a fiscal year shall be expended for the purpose of conducting or supporting research and demonstration 

projects, or for providing technical assistance, in connection with activities described in section 403(a)(2)(B). 

Funds appropriated under subparagraph (A) and expended in accordance with this clause shall be in addition to any other funds made available under this part 

for activities described in section 403(a)(2)(B). 

(2) SECRETARY’S AUTHORITY.—The Secretary may conduct activities authorized by this subsection directly or through grants, 

contracts, or interagency agreements with public or private entities. 

(3) REQUIREMENT FOR USE OF FUNDS.—The Secretary shall 

not pay any funds appropriated under paragraph (1)(A) to an 

entity for the purpose of conducting or supporting research and 

demonstration projects involving activities described in section 

403(a)(2)(B) unless the entity complies with the requirements of 

section 403(a)(2)(E). 

(m) INDICATORS OF CHILD WELL-BEING.— 

(1) IN GENERAL.—The Secretary, through grants, contracts, or 

interagency agreements shall develop comprehensive indicators 

to assess child well-being in each State. 

(2) REQUIREMENTS.— 

(A) IN GENERAL.—The indicators developed under paragraph (1) shall include measures related to the following: 

(i) Education. 

(ii) Social and emotional development. 

(iii) Health and safety. 

(iv) Family well-being, such as family structure, income, employment, child care arrangements, and family relationships. 

206

(B) OTHER REQUIREMENTS.—The data collected with respect to the indicators developed under paragraph (1) shall 

be— 

(i) statistically representative at the State level; 

(ii) consistent across States; 

(iii) collected on an annual basis for at least the 5 

years following the first year of collection; 

(iv) expressed in terms of rates or percentages; 

(v) statistically representative at the national level; 

(vi) measured with reliability; 

(vii) current; 

(viii) over-sampled, with respect to low-income children and families; and 

(ix) made publicly available. 

(C) CONSULTATION.—In developing the indicators required under paragraph (1) and the means to collect the 

data required with respect to the indicators, the Secretary 

shall consult and collaborate with the Federal Interagency 

Forum on Child and Family Statistics. 

(3) ADVISORY PANEL.— 

(A) ESTABLISHMENT.—The Secretary shall establish an 

advisory panel to make recommendations regarding the appropriate measures and statistical tools necessary for making the assessment required under paragraph (1) based on 

the indicators developed under that paragraph and the 

data collected with respect to the indicators. 

(B) MEMBERSHIP.— 

(i) IN GENERAL.—The advisory panel established 

under subparagraph (A) shall consist of the following: 

(I) One member appointed by the Secretary of 

Health and Human Services. 

(II) One member appointed by the Chairman of 

the Committee on Ways and Means of the House of 

Representatives. 

(III) One member appointed by the Ranking 

Member of the Committee on Ways and Means of 

the House of Representatives. 

(IV) One member appointed by the Chairman of 

the Committee on Finance of the Senate. 

(V) One member appointed by the Ranking Member of the Committee on Finance of the Senate. 

(VI) One member appointed by the Chairman of 

the National Governors Association, or the Chairman’s designee. 

(VII) One member appointed by the President of 

the National Conference of State Legislatures or 

the President’s designee. 

(VIII) One member appointed by the Director of 

the National Academy of Sciences, or the Director’s 

designee. 

(ii) DEADLINE.—The members of the advisory panel 

shall be appointed not later than 2 months after the 

date of enactment of the Personal Responsibility and 

Individual Development for Everyone Act. 

207

(C) MEETINGS.—The advisory panel established under 

subparagraph (A) shall meet— 

(i) at least 3 times during the first year after the date 

of enactment of the Personal Responsibility and Individual Development for Everyone Act; and 

(ii) annually thereafter for the 3 succeeding years. 

(4) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated for each of fiscal years 2006 through 2010, $10,000,000 

for the purpose of carrying out this subsection. 

(n) DOMESTIC VIOLENCE PREVENTION GRANTS.—

(1) IN GENERAL.—The Secretary shall award grants to eligible 

entities to enable such entities to carry out domestic violence 

prevention activities. In carrying out this subsection, the Secretary shall make public the criteria to be used by the Secretary 

for awarding such grants. 

(2) ELIGIBILITY.—To be eligible to receive a grant under this 

subsection, an entity shall—

(A) be a State, Indian tribe or tribal organization, or 

nonprofit domestic violence prevention organization; and 

(B) submit to the Secretary an application at such time, 

in such manner, and containing such information as the 

Secretary may require. 

(3) ACTIVITIES.—An entity shall use amounts received under 

a grant awarded under this subsection to—

(A) develop and disseminate best practices for addressing 

domestic violence (as defined in section 402(a)(7)(B)); 

(B) implement voluntary skills programs on domestic violence as a barrier to economic security, including providing 

caseworker training, technical assistance, and voluntary 

services for victims of domestic violence; 

(C) provide broad-based income support and supplementation strategies that provide increased assistance to low-income working adults, such as housing, transportation, and 

transitional benefits as a means to reduce domestic violence; or 

(D) carry out programs to enhance relationship skills and 

financial management skills, to teach individuals how to 

control aggressive behavior, and to disseminate information 

on the causes of domestic violence and child abuse. 

(4) MATCHING REQUIREMENT.—The Secretary may not award 

a grant to an entity under this subsection unless the entity 

agrees that, with respect to the costs to be incurred by the entity 

in carrying out the program for which the grant was awarded, 

the entity will make available (directly or through donations 

from public or private entities) non-Federal contributions toward such costs in an amount equal to not less than 25 percent 

of such costs ($1 for each $3 of Federal funds provided under 

the grant). 

(5) REQUIRED CONSULTATION.—The Secretary may not award 

a grant to a State or an Indian tribe or tribal organization 

under this subsection unless such State, tribe, or tribal organization agrees, in carrying out activities under the grant, to consult with National, State, local, or tribal organizations with 

208

demonstrated expertise in providing aid to victims of domestic 

violence. 

(6) EVALUATION AND REPORT.—The Secretary shall, by grant, 

contract, or interagency agreement, conduct an evaluation of the 

activities carried out with grants awarded under this subsection 

and shall submit a report to Congress on the results of such 

evaluation. 

(7) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this subsection, $20,000,000 for 

each of fiscal years 2006 through 2010. 

(o) TRIBAL WELFARE PROGRAMS AND EFFORTS TO REDUCE POVERTY AMONG INDIANS.— 

(1) IN GENERAL.—The Secretary, directly or through grants, 

contracts, or interagency agreements, shall conduct research on 

tribal family assistance programs conducted under section 412 

and other tribal welfare programs and on efforts to reduce poverty among Indians. 

(2) PRIORITY FOR CERTAIN APPLICATIONS.—With respect to applications for grants under paragraph (1), the Secretary shall 

give priority to applications to conduct research in cooperation 

with tribal governments or tribally controlled colleges or universities. 

(3) TECHNICAL ASSISTANCE.—The Secretary may use funds 

appropriated under paragraph (4) to provide technical assistance concerning data reporting and collection with respect to research conducted under this subsection. 

(4) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated $2,000,000 for fiscal year 2006 for the purpose of carrying out this subsection. Funds appropriated under this paragraph shall remain available to the Secretary until expended.

(p) TEEN PREGNANCY PREVENTION RESOURCE CENTER.—

(1) AUTHORITY.—

(A) IN GENERAL.—The Secretary shall make a grant to 1 

nationally recognized, nonpartisan, nonprofit organization 

that meets the requirements described in subparagraph (B) 

to establish and operate a national teen pregnancy prevention resource center (in this subsection referred to as the 

‘‘Resource Center’’) to carry out the purposes and activities 

described in paragraph (2). 

(B) REQUIREMENTS.—The requirements described in this 

subparagraph are the following: 

(i) The organization focuses exclusively on preventing 

teen pregnancy and has at least 9 years of experience 

in working with diverse sectors of society to reduce teen 

pregnancy. 

(ii) The organization has a demonstrated ability to 

work with, and provide assistance to, a broad range of 

individuals and entities with a variety of perspectives, 

including teens and youth leaders, parents, the entertainment and news media, State, tribal, and local organizations, networks of teen pregnancy prevention 

practitioners, businesses, faith and community leaders, 

and researchers. 

209

(iii) The organization is research-based and has capabilities in scientific analysis and evaluation. 

(iv) The organization has comprehensive knowledge 

and data about teen pregnancy prevention strategies. 

(v) The organization has experience carrying out activities similar to the activities described in paragraph 

(2)(B). 

(2) PURPOSES AND ACTIVITIES.— (A) PURPOSES.—The purposes of the Resource Center are 

to improve the well-being of children and families and encourage young people to delay pregnancy until marriage. 

Specifically, the Resource Center shall—

(i) provide information and technical assistance to 

States, Indian tribes, local communities, and other 

public or private organizations seeking to reduce rates 

of teen pregnancy; 

(ii) support parents in their essential role in preventing teen pregnancy by equipping them with information and resources to promote and strengthen communication with their children about sex, values, and 

positive relationships, including healthy marriage; and 

(iii) assist the entertainment media industry by providing information and encouraging the industry to develop content and messages for teens and adults that 

can help prevent teen pregnancy. 

(B) ACTIVITIES.—The Resource Center shall carry out the 

purposes described in subparagraph (A) through the following activities: 

(i) Synthesizing and disseminating research and information regarding effective and promising practices, 

and providing information on how to design and implement effective strategies to prevent teen pregnancy. 

(ii) Providing information and reaching out to diverse populations, with particular attention to areas 

and populations with the highest rates of teen pregnancy. 

(iii) Helping States, local communities, and other organizations increase their knowledge of existing resources that can be used to advance teen pregnancy 

prevention efforts, and build their capacity to access 

such resources and develop partnerships with other 

programs and funding streams. 

(iv) Raising awareness of the importance of increasing the proportion of children born to, and raised in, 

healthy, adult marriages. 

(v) Linking organizations working to reduce teen 

pregnancy with experts and peers, including the creation of technical assistance networks that use cost-effective and efficient communication tools (such as the 

Internet). 

(vi) Providing consultation and resources about how 

to reduce teen pregnancy to various sectors of society 

including parents, other adults (such as teachers, 

coaches, and mentors), community and faith-based 

groups, the entertainment and news media, businesses, 

210

and teens themselves, through a broad array of strategies and messages, including a focus on abstinence, responsible behavior, family communication, relationships, and values. 

(vii) Assisting organizations seeking to reduce teen 

pregnancy in their efforts to communicate effective messages about preventing teen pregnancy with a variety of 

audiences (including teens, parents, and ethnically diverse groups). 

(viii) Providing resources for parents and other 

adults that help to foster strong relationships with children, a strategy that research has shown is effective in 

reducing sexual activity and teen pregnancy, including 

online access to research, parent guides, tips, advice 

from experts, and information about the media environment of teens. 

(ix) Working directly with individuals and organizations in the entertainment industry to provide consultation and serve as a source of factual information on 

issues related to teen pregnancy prevention. 

(3) COLLABORATION WITH OTHER ORGANIZATIONS.—The organization operating the Resource Center shall collaborate with 

other organizations that have expertise and interest in teen 

pregnancy prevention, and that can help reach out to diverse 

audiences. 

(4) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there is appropriated 

to carry out this subsection, $5,000,000 for fiscal year 2006. 

Funds appropriated under this subparagraph shall remain 

available for expenditure through fiscal year 2010.

* * * * * * *

SEC. 414. STUDY BY THE CENSUS BUREAU. 

ø(a) IN GENERAL.—The Bureau of the Census shall continue to 

collect data on the 1992 and 1993 panels of the Survey of Income 

and Program Participation as necessary to obtain such information 

as will enable interested persons to evaluate the impact of the 

amendments made by title I of the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996 on a random national 

sample of recipients of assistance under State programs funded 

under this part and (as appropriate) other low-income families, and 

in doing so, shall pay particular attention to the issues of out-ofwedlock birth, welfare dependency, the beginning and end of welfare spells, and the causes of repeat welfare spells, and shall obtain 

information about the status of children participating in such panels.¿

(a) IN GENERAL.—The Bureau of the Census shall implement or 

enhance a longitudinal survey of program participation, developed 

in consultation with the Secretary and made available to interested 

parties, to allow for the assessment of the outcomes of continued 

welfare reform on the economic and child well-being of low-income 

families with children, including those who received assistance or 

services from a State program funded under this part, and, to the 

extent possible, shall provide State representative samples. The content of the survey should include such information as may be necVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00214 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
211

essary to examine the issues of out-of-wedlock childbearing, marriage, welfare dependency and compliance with work requirements, 

the beginning and ending of spells of assistance, work, earnings and 

employment stability, and the well-being of children. 

(b) REPORTS ON THE WELL-BEING OF CHILDREN AND FAMILIES.— (1) IN GENERAL.—Not later than 24 months after the date of 

enactment of the Personal Responsibility and Individual Development for Everyone Act, the Secretary of Commerce shall prepare and submit to the Committee on Finance of the Senate and 

the Committee on Ways and Means of the House of Representatives a report on the well-being of children and families using 

data collected under subsection (a). 

(2) SECOND REPORT.—Not later than 60 months after such 

date of enactment, the Secretary of Commerce shall submit a 

second report to the Committee on Finance of the Senate and 

the Committee on Ways and Means of the House of Representatives on the well-being of children and families using data collected under subsection (a). 

(3) INCLUSION OF COMPARABLE MEASURES.—Where comparable measures for data collected under subsection (a) exist 

in surveys previously administered by the Bureau of the Census, 

appropriate comparisons shall be made and included in each 

report required under this subsection on the well-being of children and families to assess changes in such measures.

ø(b)¿ (c) APPROPRIATION.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated $10,000,000 for each of fiscal years ø1996, 1997, 1998, 

1999, 2000, 2001, 2002, and 2003 for payment to the Bureau of the 

Census to carry out subsection (a).¿ 2006 through 2010 for payment 

to the Bureau of the Census to carry out this section. Funds appropriated under this subsection for a fiscal year shall remain available through fiscal year 2010 to carry out this section.

* * * * * * *

SEC. 418. FUNDING FOR CHILD CARE. 

(a) GENERAL CHILD CARE ENTITLEMENT.— (1) GENERAL ENTITLEMENT.—Subject to the amount appropriated under paragraph (3), each State shall, for the purpose 

of providing child care assistance, be entitled to payments 

under a grant under this subsection for a fiscal year in an 

amount equal to the greater of—

* * * * * * *

(3) APPROPRIATION.—For grants under this section, there are 

appropriated— (A) $1,967,000,000 for fiscal year 1997; 

(B) $2,067,000,000 for fiscal year 1998; 

(C) $2,167,000,000 for fiscal year 1999; 

(D) $2,367,000,000 for fiscal year 2000; 

(E) $2,567,000,000 for fiscal year 2001; øand¿

(F) $2,717,000,000 for each of fiscal years 2002 and 

2003ø.¿ and

(G) $2,917,000,000 for each of fiscal years 2006 through 

2010.

ø(4) INDIAN TRIBES.—The Secretary shall reserve not less 

than 1 percent, and not more than 2 percent, of the aggregate 

212

amount appropriated to carry out this section in each fiscal 

year for payments to Indian tribes and tribal organizations.¿

(4) AMOUNTS RESERVED.— (A) INDIAN TRIBES AND TRIBAL ORGANIZATIONS.— (i) IN GENERAL.—The Secretary shall reserve 2 percent of the aggregate amount appropriated to carry out 

this section for a fiscal year for payments to Indian 

tribes and tribal organizations for such fiscal year for 

the purpose of providing child care assistance. 

(ii) APPLICATION OF CCDBG REQUIREMENTS.—Payments made under this subparagraph shall be subject 

to the requirements that apply to payments made to Indian tribes and tribal organizations under the Child 

Care and Development Block Grant Act of 1990. 

(B) TERRITORIES.—

(i) PUERTO RICO.—The Secretary shall reserve 1.5 

percent of the amount appropriated under paragraph 

(5)(A)(i) for a fiscal year for payments to the Commonwealth of Puerto Rico for such fiscal year for the purpose of providing child care assistance. 

(ii) OTHER TERRITORIES.—The Secretary shall reserve 

0.5 percent of the amount appropriated under paragraph (5)(A)(i) for a fiscal year for payments to Guam, 

American Samoa, the Virgin Islands of the United 

States, and the Commonwealth of the Northern Mariana Islands in amounts which bear the same ratio to 

such amount as the amounts allotted to such territories 

under section 658O of the Child Care and Development 

Block Grant Act of 1990 for the fiscal year bear to the 

total amount reserved under such section for that fiscal 

year. 

(iii) APPLICATION OF CCDBG REQUIREMENTS.—Payments made under this subparagraph shall be subject 

to the requirements that apply to payments made to 

territories under the Child Care and Development 

Block Grant Act of 1990.

(5) SUPPLEMENTAL GRANTS.— (A) APPROPRIATION.— (i) IN GENERAL.—For supplemental grants under this 

section, there are appropriated— (I) $700,000,000 for fiscal year 2006; 

(II) $800,000,000 for fiscal year 2007; 

(III) $1,000,000,000 for fiscal year 2008; 

(IV) $1,100,000,000 for fiscal year 2009; and 

(V) $1,400,000,000 for fiscal year 2010. 

(ii) AVAILABILITY.—Amounts appropriated under 

clause (i) for a fiscal year shall be in addition to 

amounts appropriated under paragraph (3) for such 

fiscal year and shall remain available for expenditure 

through fiscal year 2010. 

(B) SUPPLEMENTAL GRANT.—In addition to the grants 

paid to a State under paragraphs (1) and (2) for each of 

fiscal years 2006 through 2010, the Secretary, after reserving the amounts described in subparagraphs (A) and (B) of 

paragraph (4) and subject to the requirements described in 

213

paragraph (6), shall pay each State an amount which bears 

the same ratio to the amount specified in subparagraph 

(A)(i) for the fiscal year (after such reservations), as the 

amount allotted to the State under paragraph (2)(B) for fiscal year 2003 bears to the amount allotted to all States 

under that paragraph for such fiscal year. 

(C) BUDGET SCORING.—Notwithstanding section 257(b)(2) 

of the Balanced Budget and Emergency Deficit Control Act 

of 1985, the baseline shall assume that no grant shall be 

made under this paragraph after fiscal year 2010. 

(6) REQUIREMENTS.— (A) MAINTENANCE OF EFFORT.—A State may not be paid 

a supplemental grant under paragraph (5) for a fiscal year 

unless the State ensures that the level of State expenditures 

for child care for such fiscal year is not less than the sum 

of—

(i) the level of State expenditures for child care that 

were matched under a grant made to the State under 

paragraph (2) for fiscal year 2003; and 

(ii) the level of State expenditures for child care that 

the State reported as maintenance of effort expenditures for purposes of paragraph (2) for fiscal year 2003. 

(B) MATCHING REQUIREMENT FOR FISCAL YEARS 2009 AND

2010.—With respect to the amount of the supplemental grant 

made to a State under paragraph (5) for each of fiscal 

years 2009 and 2010 that is in excess of the amount of the 

grant made to the State under paragraph (5) for fiscal year 

2008, subparagraph (C) of paragraph (2) shall apply to 

such excess amount in the same manner as such subparagraph applies to grants made under subparagraph (A) of 

paragraph (2) for each of fiscal years 2009 and 2010, respectively. 

(C) REDISTRIBUTION.—In the case of a State that fails to 

satisfy the requirement of subparagraph (A) for a fiscal 

year, the supplemental grant determined under paragraph 

(5) for the State for that fiscal year shall be redistributed 

in accordance with paragraph (2)(D).

ø(5)¿ (7) DATA USED TO DETERMINE STATE AND FEDERAL

SHARES OF EXPENDITURES.—In making the determinations concerning expenditures required under paragraphs (1) and (2)(C), 

the Secretary shall use information that was reported by the 

State on ACF Form 231 and available as of the applicable 

dates specified in clauses (i)(I), (ii), and (iii)(III) of section 

403(a)(1)(D). 

* * * * * * *

SEC. 419. DEFINITIONS. 

As used in this part: 

(1) ADULT.—The term ‘‘adult’’ means an individual who is 

not a minor child. 

* * * * * * *

(6) ASSISTANCE.— (A) IN GENERAL.—The term ‘‘assistance’’ means cash, payments, vouchers, and other forms of benefits designed to 

meet a family’s ongoing basic needs (including for food, 

214

clothing, shelter, utilities, household goods, personal care 

items and general incidental expenses). 

(B) INCLUSION OF CERTAIN BENEFITS.—Such term includes benefits even when they are—

(i) provided in the form of payments by a State agency responsible for administering the State program 

funded under this part, or other agency on its behalf, 

to individual recipients; and 

(ii) conditioned on participation in work experience 

or community service (or any other work activity under 

the State program funded under this part or with 

qualified State expenditures (as defined in section 

409(a)(7)(B)(i)). 

(C) EXCLUSION OF CERTAIN BENEFITS.—Such term does 

not include—

(i) nonrecurrent, short-term benefits that—

(I) are designed to deal with a specific crisis situation or episode of need; 

(II) are not intended to meet recurrent or ongoing needs; and 

(III) will not extend beyond 4 months; 

(ii) work subsidies (such as payments to employers or 

third parties to help cover the costs of employee wages, 

benefits, supervision, and training); 

(iii) supportive services such as child care and transportation; 

(iv) refundable earned income tax credits; 

(v) contributions to, and distributions from, Individual Development Accounts; 

(vi) services such as counseling, case management, 

peer support, child care information and referral, transitional services, job retention, job advancement, and 

other employment-related services that do not provide 

basic income support; and 

(v) transportation benefits provided under a Job Access or Reverse Commute project, pursuant to section 

404(k), to an individual who is not otherwise receiving 

assistance. 

(D) APPLICABILITY.—Unless otherwise provided, the definition of ‘‘assistance’’ under this paragraph—

(i) only applies for purposes of the State program 

funded under this part or a program funded with 

qualified State expenditures (as defined in section 

409(a)(7)(B)(i)); and 

(ii) does not preclude a State from providing other 

types of benefits and services in support of the purposes 

of the State program funded under this part or a program funded with qualified State expenditures (as so 

defined).

PART D—CHILD SUPPORT AND ESTABLISHMENT OF PATERNITY

* * * * * * *

215

DUTIES OF THE SECRETARY

SEC. 452. (a) The Secretary shall establish, within the Department of Health and Human Services a separate organizational 

unit, under the direction of a designee of the Secretary, who shall 

report directly to the Secretary and who shall—

* * * * * * *

(II) whether collections and disbursements of support payments are carried out correctly and are fully 

accounted for; and 

(iii) for such other purposes as the Secretary may find 

necessary; 

(5) assist States in establishing adequate reporting procedures and maintain records of the operations of programs established pursuant to this part in each State, and establish 

procedures to be followed by States for collecting and reporting 

information required to be provided under this part, and establish uniform definitions (including those necessary to enable 

the measurement of State compliance with the requirements of 

this part relating to expedited processes) to be applied in following such procedures; 

(6) maintain records of all amounts collected and disbursed 

under programs established pursuant to the provisions of this 

part and of the costs incurred in collecting such amounts; 

(7) provide technical assistance to the States to help them establish effective systems for collecting child and spousal support and establishing paternity, and specify the minimum requirements of an affidavit to be used for the voluntary acknowledgment of paternity which shall include the social security number of each parent and, after consultation with the 

States, other common elements as determined by such designee; 

(8) receive applications from States for permission to utilize 

the courts of the United States to enforce court orders for support against noncustodial parents and, upon a finding that (A) 

another State has not undertaken to enforce the court order of 

the originating State against the noncustodial parent within a 

reasonable time, and (B) that utilization of the Federal courts 

is the only reasonable method of enforcing such order, approve 

such applications; 

(9) operate the Federal Parent Locator Service established by 

section 453; 

(10) not later than three months after the end of each fiscal 

year, beginning with the year 1977, submit to the Congress a 

full and complete report on all activities undertaken pursuant 

to the provisions of this part, which report shall include, but 

not be limited to, the following: 

(A) total program costs and collections set forth in sufficient detail to show the cost to the States and the Federal 

Government, the distribution of collections to families, 

State and local governmental units, and the Federal Government; and an identification of the financial impact of 

the provisions of this part, including—

(i) the total amount of child support payments collected as a result of services furnished during the fisVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00219 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
216

cal year to individuals receiving services under this 

part; 

(ii) the cost to the States and to the Federal Government of so furnishing the services; and 

(iii) the number of cases involving families—

(I) who became ineligible for assistance under 

State programs funded under part A during a 

month in the fiscal year; and 

(II) with respect to whom a child support payment was received in the month; 

(B) costs and staff associated with the Office of Child 

Support Enforcement; 

(C) the following data, separately stated for cases where 

the child is receiving assistance under a State program 

funded under part A (or foster care maintenance payments 

under part E), or formerly received such assistance or payments and the State is continuing to collect support assigned to it pursuant to section 408(a)(3) or under section 

471(a)(17) or 1912, and for all other cases under this part: 

(i) the total number of cases in which a support obligation has been established in the fiscal year for 

which the report is submitted; 

(ii) the total number of cases in which a support obligation has been established; 

(iii) the number of cases in which support was collected during the fiscal year; 

(iv) the total amount of support collected during 

such fiscal year and distributed as current support; 

(v) the total amount of support collected during such 

fiscal year and distributed as arrearages; 

(vi) the total amount of support due and unpaid for 

all fiscal years; and 

(vii) the number of child support cases filed in each 

State in such fiscal year, and the amount of the collections made in each State in such fiscal year, on behalf 

of children residing in another State or against parents residing in another State; 

(D) the status of all State plans under this part as of the 

end of the fiscal year last ending before the report is submitted, together with an explanation of any problems 

which are delaying or preventing approval of State plans 

under this part; 

(E) data, by State, on the use of the Federal Parent Locator Service, and the number of locate requests submitted 

without the noncustodial parent’s social security account 

number; 

(F) the number of cases, by State, in which an applicant 

for or recipient of assistance under a State program funded 

under part A has refused to cooperate in identifying and 

locating the noncustodial parent and the number of cases 

in which refusal so to cooperate is based on good cause (as 

determined by the State); 

(G) data, by State, on use of the Internal Revenue Service for collections, the number of court orders on which collections were made, the number of paternity determinaVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00220 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
217

tions made and the number of parents located, in sufficient 

detail to show the cost and benefits to the States and to 

the Federal Government; 

(H) the major problems encountered which have delayed 

or prevented implementation of the provisions of this part 

during the fiscal year last ending prior to the submission 

of such report; and 

(I) compliance, by State, with the standards established 

pursuant to subsections (h) and (i); and 

(11) not later than October 1, 1996, after consulting with the 

State directors of programs under this part, promulgate forms 

to be used by States in interstate cases for—

(A) collection of child support through income withholding; 

(B) imposition of liens; and 

(C) administrative subpoenas. 

(b) The Secretary shall, upon the request of any State having in 

effect a State plan approved under this part, certify to the Secretary of the Treasury for collection pursuant to the provisions of 

section 6305 of the Internal Revenue Code of 1954 the amount of 

any child support obligation (including any support obligation with 

respect to the parent who is living with the child and receiving assistance under the State program funded under part A) which is 

assigned to such State or is undertaken to be collected by such 

State pursuant to section 454(4). No amount may be certified for 

collection under this subsection except the amount of the delinquency under a court or administrative order for support and upon 

a showing by the State that such State has made diligent and reasonable efforts to collect such amounts utilizing its own collection 

mechanisms, and upon an agreement that the State will reimburse 

the Secretary of the Treasury for any costs involved in making the 

collection. All reimbursements shall be credited to the appropriation accounts which bore all or part of the costs involved in making 

the collections. The Secretary after consultation with the Secretary 

of the Treasury may, by regulation, establish criteria for accepting 

amounts for collection and for making certification under this subsection including imposing such limitations on the frequency of 

making such certifications under this subsection. 

(c) The Secretary of the Treasury shall from time to time pay to 

each State for distribution in accordance with the provisions of section 457 the amount of each collection made on behalf of such State 

pursuant to subsection (b). 

(d)(1) Except as provided in paragraph (3), the Secretary shall 

not approve the initial and annually updated advance automated 

data processing planning document, referred to in section 454(16), 

unless he finds that such document, when implemented, will generally carry out the objectives of the management system referred 

to in such subsection, and such document—

(A) provides for the conduct of, and reflects the results of, requirements analysis studies, which include consideration of the 

program mission, functions, organization, services, constraints, 

and current support, of, in, or relating to, such system, 

(B) contains a description of the proposed management system referred to in section 454(16), including a description of information flows, input data, and output reports and uses, 

218

(C) sets forth the security and interface requirements to be 

employed in such management system, 

(D) describes the projected resource requirements for staff 

and other needs, and the resources available or expected to be 

available to meet such requirements, 

(E) contains an implementation plan and backup procedures 

to handle possible failures, 

(F) contains a summary of proposed improvement of such 

management system in terms of qualitative and quantitative 

benefits, and 

(G) provides such other information as the Secretary determines under regulation is necessary. 

(2)(A) The Secretary shall through the separate organizational 

unit established pursuant to subsection (a), on a continuing basis, 

review, assess, and inspect the planning, design, and operation of, 

management information systems referred to in section 454(16), 

with a view to determining whether, and to what extent, such systems meet and continue to meet requirements imposed under paragraph (1) and the conditions specified under section 454(16). 

(B) If the Secretary finds with respect to any statewide management information system referred to in section 454(16) that there 

is a failure substantially to comply with criteria, requirements, and 

other undertakings, prescribed by the advance automated data 

processing planning document theretofore approved by the Secretary with respect to such system, then the Secretary shall suspend his approval of such document until there is no longer any 

such failure of such system to comply with such criteria, requirements, and other undertakings so prescribed. 

(3) The Secretary may waive any requirement of paragraph (1) 

or any condition specified under section 454(16), and shall waive 

the single statewide system requirement under sections 454(16) 

and 454A, with respect to a State if—

(A) the State demonstrates to the satisfaction of the

Secretary that the State has or can develop an alternative system or systems that enable the State—

(i) for purposes of section 409(a)(8), to achieve the paternity establishment percentages (as defined in section 

452(g)(2)) and other performance measures that may be established by the Secretary; 

(ii) to submit data under section 454(15)(B) that is complete and reliable; 

(iii) to substantially comply with the requirements of 

this part; and 

(iv) in the case of a request to waive the single statewide 

system requirement, to—

(I) meet all functional requirements of sections 

454(16) and 454A; 

(II) ensure that calculation of distributions meets 

the requirements of section 457 and accounts for

distributions to children in different families or in

different States or sub-State jurisdictions, and for distributions to other States; 

(III) ensure that there is only one point of contact in 

the State which provides seamless case processing for 

219

all interstate case processing and coordinated, automated intrastate case management; 

(IV) ensure that standardized data elements, forms, 

and definitions are used throughout the State; 

(V) complete the alternative system in no more time 

than it would take to complete a single statewide system that meets such requirement; and 

(VI) process child support cases as quickly,

efficiently, and effectively as such cases would be processed through a single statewide system that meets 

such requirement; 

(B)(i) the waiver meets the criteria of paragraphs (1), (2), 

and (3) of section 1115(c); or 

(ii) the State provides assurances to the Secretary that steps 

will be taken to otherwise improve the State’s child support enforcement program; and 

(C) in the case of a request to waive the single statewide system requirement, the State has submitted to the Secretary separate estimates of the total cost of a single statewide system 

that meets such requirement, and of any such alternative system or systems, which shall include estimates of the cost of developing and completing the system and of operating and 

maintaining the system for 5 years, and the Secretary has 

agreed with the estimates. 

(e) The Secretary shall provide such technical assistance to 

States as he determines necessary to assist States to plan, design, 

develop, or install and provide for the security of, the management 

information systems referred to in section 454(16). 

(f) The Secretary shall issue regulations to require that State 

agencies administering the child support enforcement program 

under this part øinclude medical support as part of any child support order whenever and enforce medical support¿ enforce medical 

support included as part of a child support order health care coverage is available to the noncustodial parent at a reasonable cost.

A State agency administering the program under this part is authorized to enforce medical support against a custodial parent 

whenever health care coverage is available to the custodial parent 

at a reasonable cost, notwithstanding any provision of this part 

(other than this sentence) that might be construed to limit or bar 

such enforcement actions. 

Such regulation shall also provide for improved information exchange between such State agencies and the State agencies administering the State medicaid programs under title XIX with respect 

to the availability of health insurance coverage.

For purposes of this part, the term ‘‘medical support’’ may include 

health care coverage, such as coverage under a health insurance 

plan (including payment of costs of premiums, co-payments, and 

deductibles) and payment for medical expenses incurred on behalf 

of a child.

(g)(1) A State’s program under this part shall be found, for purposes of section 409(a)(8), not to have complied substantially with 

the requirements of this part unless, for any fiscal year beginning 

on or after October 1, 1994, its paternity establishment percentage 

for such fiscal year is based on reliable data and (rounded to the 

nearest whole percentage point) equals or exceeds—

220

(A) 90 percent; 

(B) for a State with a paternity establishment percentage of 

not less than 75 percent but less than 90 percent for such fiscal year, the paternity establishment percentage of the State 

for the immediately preceding fiscal year plus 2 percentage 

points; 

(C) for a State with a paternity establishment percentage of 

not less than 50 percent but less than 75 percent for such fiscal year, the paternity establishment percentage of the State 

for the immediately preceding fiscal year plus 3 percentage 

points; 

(D) for a State with a paternity establishment percentage of 

not less than 45 percent but less than 50 percent for such fiscal year, the paternity establishment percentage of the State 

for the immediately preceding fiscal year plus 4 percentage 

points; 

(E) for a State with a paternity establishment percentage of 

not less than 40 percent but less than 45 percent for such fiscal year, the paternity establishment percentage of the State 

for the immediately preceding fiscal year plus 5 percentage 

points; or 

(F) for a State with a paternity establishment percentage of 

less than 40 percent for such fiscal year, the paternity establishment percentage of the State for the immediately preceding 

fiscal year plus 6 percentage points. 

In determining compliance under this section, a State may use as 

its paternity establishment percentage either the State’s IV–D paternity establishment percentage (as defined in paragraph (2)(A)) 

or the State’s statewide paternity establishment percentage (as defined in paragraph (2)(B)). 

(2) For purposes of this section—

(A) the term ‘‘IV–D paternity establishment percentage’’ 

means, with respect to a State for a fiscal year, the ratio (expressed as a percentage) that the total number of children—

(i) who have been born out of wedlock, 

(ii)(I) except as provided in the last sentence of this 

paragraph, with respect to whom assistance is being provided under the State program funded under part A in the 

fiscal year or, at the option of the State, as of the end of 

such year, or (II) with respect to whom services are being 

provided under the State’s plan approved under this part 

in the fiscal year or, at the option of the State, as of the 

end of such year pursuant to an application submitted 

under section 454(4)(A)(ii), and 

(iii) the paternity of whom has been established or acknowledged, 

bears to the total number of children born out of wedlock and 

(except as provided in such last sentence) with respect to 

whom assistance was being provided under the State program 

funded under part A as of the end of the preceding fiscal year 

or with respect to whom services were being provided under 

the State’s plan approved under this part as of the end of the 

preceding fiscal year pursuant to an application submitted 

under section 454(4)(A)(ii); 

221

(B) the term ‘‘statewide paternity establishment percentage’’ 

means, with respect to a State for a fiscal year, the ratio (expressed as a percentage) that the total number of minor children—

(i) who have been born out of wedlock, and 

(ii) the paternity of whom has been established or acknowledged during the fiscal year, 

bears to the total number of children born out of wedlock during the preceding fiscal year; and 

(C) the term ‘‘reliable data’’ means the most recent data 

available which are found by the Secretary to be reliable for 

purposes of this section. 

For purposes of subparagraphs (A) and (B), the total number of 

children shall not include any child with respect to whom assistance is being provided under the State program funded under part 

A by reason of the death of a parent unless paternity is established 

for such child or any child with respect to whom an applicant or 

recipient is found by the State to qualify for a good cause or other 

exception to cooperation pursuant to section 454(29).

(3)(A) The Secretary may modify the requirements of this subsection to take into account such additional variables as the Secretary identifies (including the percentage of children in a State 

who are born out of wedlock or for whom support has not been established) that affect the ability of a State to meet the requirements of this subsection. 

(B) The Secretary shall submit an annual report to the Congress 

that sets forth the data upon which the paternity establishment 

percentages for States for a fiscal year are based, lists any additional variables the Secretary has identified under subparagraph 

(A), and describes State performance in establishing paternity. 

(h) The standards required by subsection (a)(1) shall include 

standards establishing time limits governing the period or periods 

within which a State must accept and respond to requests (from 

States, jurisdictions thereof, or individuals who apply for services 

furnished by the State agency under this part or with respect to 

whom an assignment pursuant to section 408(a)(3) is in effect) for 

assistance in establishing and enforcing support orders, including 

requests to locate noncustodial parents, establish paternity, and 

initiate proceedings to establish and collect child support awards. 

(i) The standards required by subsection (a)(1) shall include 

standards establishing time limits governing the period or periods 

within which a State must distribute, in accordance with section 

457, amounts collected as child support pursuant to the State’s 

plan approved under this part. 

(j) Out of any money in the Treasury of the United States not 

otherwise appropriated, there is hereby appropriated to the Secretary for each fiscal year an amount equal to 1 percent of the total 

amount paid to the Federal Government pursuant to a plan approved under this part during the immediately preceding fiscal 

year (as determined on the basis of the most recent reliable data 

available to the Secretary as of the end of the third calendar quarter following the end of such preceding fiscal year) or the amount 

appropriated under this paragraph for fiscal year 2002, whichever 

is greater, which shall be available for use by the Secretary, either 

222

directly or through grants, contracts, or interagency agreements, 

for—

(1) information dissemination and technical assistance to 

States, training of State and Federal staff, staffing studies, and 

related activities needed to improve programs under this part 

(including technical assistance concerning State automated 

systems required by this part); and 

(2) research, demonstration, and special projects of regional 

or national significance relating to the operation of State programs under this part. 

The amount appropriated under this subsection shall remain available until expended. 

(k)(1) If the Secretary receives a certification by a State agency 

in accordance with the requirements of section 454(31) that an individual owes arrearages of child support in an amount exceeding 

ø$5,000,¿ $2,500 the Secretary shall transmit such certification to 

the Secretary of State for action (with respect to denial, revocation, 

or limitation of passports) pursuant to paragraph (2). 

(2) The Secretary of State shall, upon certification by the Secretary transmitted under paragraph (1), refuse to issue a passport 

to such individual, and may revoke, restrict, or limit a passport 

issued previously to such individual. 

(3) The Secretary and the Secretary of State shall not be liable 

to an individual for any action with respect to a certification by a 

State agency under this section. 

ø(l) The Secretary, through the Federal Parent Locator Service, 

may aid State agencies providing services under State programs 

operated pursuant to this part and financial institutions doing 

business in two or more States in reaching agreements regarding 

the receipt from such institutions, and the transfer to the State 

agencies, of information that may be provided pursuant to section 

466(a)(17)(A)(i), except that any State that, as of the date of the enactment of this subsection, is conducting data matches pursuant to 

section 466(a)(17)(A)(i) shall have until January 1, 2000, to allow 

the Secretary to obtain such information from such institutions 

that are operating in the State. For purposes of section 1113(d) of 

the Right to Financial Privacy Act of 1978, a disclosure pursuant 

to this subsection shall be considered a disclosure pursuant to a 

Federal statute.¿

(l) IDENTIFICATION AND SEIZURE OF ASSETS HELD BY MULTISTATE

FINANCIAL INSTITUTIONS.—

(1) IN GENERAL.—The Secretary, through the Federal Parent 

Locator Service, is authorized—

(A) to assist State agencies operating programs under 

this part and financial institutions doing business in 2 or 

more States in reaching agreements regarding the receipt 

from such institutions, and the transfer to the State agencies, of information that may be provided pursuant to section 466(a)(17)(A)(i) or 469A(a); 

(B) to perform data matches comparing information from 

such State agencies and financial institutions entering into 

such agreements with respect to individuals owing past-due 

support; and 

223

(C) to seize assets, held by such financial institutions, of 

individuals identified through such data matches who owe 

past-due support, by—

(i) issuing a notice of lien or levy to such financial 

institutions requiring them to encumber such assets for 

30 calendar days and to subsequently transfer such assets to the Secretary (except that the Secretary shall 

promptly release such lien or levy within such 30-day 

period upon request of the State agencies responsible 

for collecting past-due support from such individuals); 

and 

(ii) providing notice to such individuals of the lien or 

levy upon their assets and informing them—

(I) of their procedural due process rights, including the opportunity to contest such lien or levy to 

the appropriate State agency; and 

(II) in the case of jointly owned assets, of the 

process by which other owners may secure their respective share of such assets, according to such 

policies and procedures as the Secretary may specify with respect to seizure of such assets. 

(2) TRANSFER OF FUNDS TO STATES.—Assets seized from individuals under paragraph (1)(C) shall be promptly transferred 

by the Secretary to the State agencies responsible for collecting 

past-due support from such individuals for distribution pursuant to section 457. 

(3) RELATIONSHIP TO STATE LAWS.—Notwithstanding any provision of State law, an individual receiving a notice under 

paragraph (1)(C) shall have 21 calendar days from the date of 

such notice to contest the lien or levy imposed under such paragraph by requesting an administrative review by the State 

agency responsible for collecting past-due support from such individual. 

(4) TREATMENT OF DISCLOSURES.—For purposes of section 

1113(d) of the Right to Financial Privacy Act of 1978, a disclosure pursuant to this subsection shall be considered a disclosure pursuant to a Federal statute. 

(m) COMPARISONS WITH INSURANCE INFORMATION.—

(1) IN GENERAL.—The Secretary, through the Federal Parent 

Locator Service, is authorized—

(A) to compare information concerning individuals owing 

past-due support with information maintained by insurers 

(or their agents) concerning insurance claims, settlements, 

awards, and payments; and 

(B) to furnish information resulting from such data 

matches to the State agencies responsible for collecting 

child support from such individuals. 

(2) LIABILITY.—No insurer (including any agent of an insurer) shall be liable under any Federal or State law to any 

person for any disclosure provided for under this subsection, or 

for any other action taken in good faith in accordance with the 

provisions of this subsection.

224

FEDERAL PARENT LOCATOR SERVICE

SEC. 453. (a)(1) The Secretary shall establish and conduct a Federal Parent Locator Service, under the direction of the designee of 

the Secretary referred to in section 452(a), which shall be used for 

the purposes specified in paragraphs (2) and (3). 

(2) For the purpose of establishing parentage or establishing, setting the amount of, modifying, or enforcing child support obligations, the Federal Parent Locator Service shall obtain and transmit 

to any authorized person specified in subsection (c)—

(A) information on, or facilitating the discovery of, the location of any individual—

(i) who is under an obligation to pay child support; 

(ii) against whom such an obligation is sought; 

(iii) to whom such an obligation is owed; or 

(iv) who has or may have parental rights with respect to 

a child, 

including the individual’s social security number (or numbers), 

most recent address, and the name, address, and employer 

identification number of the individual’s employer; 

(B) information on the individual’s wages (or other income) 

from, and benefits of, employment (including rights to or enrollment in group health care coverage); and 

(C) information on the type, status, location, and amount of 

any assets of, or debts owed by or to, any such individual. 

(3) For the purpose of enforcing any Federal or State law with 

respect to the unlawful taking or restraint of a child, or making or 

enforcing a child custody or visitation determination, as defined in 

section 463(d)(1), the Federal Parent Locator Service shall be used 

to obtain and transmit the information specified in section 463(c) 

to the authorized persons specified in section 463(d)(2). 

(b)(1) Upon request, filed in accordance with subsection (d), of 

any authorized person, as defined in subsection (c) for the information described in subsection (a)(2), or of any authorized person, as 

defined in section 463(d)(2) for the information described in section 

463(c), the Secretary shall, notwithstanding any other provision of 

law, provide through the Federal Parent Locator Service such information to such person, if such information—

(A) is contained in any files or records maintained by the 

Secretary or by the Department of Health and Human Services; or 

(B) is not contained in such files or records, but can be obtained by the Secretary, under the authority conferred by subsection (e), from any other department, agency, or instrumentality of the United States or of any State, 

and is not prohibited from disclosure under paragraph (2). 

(2) No information shall be disclosed to any person if the disclosure of such information would contravene the national policy or 

security interests of the United States or the confidentiality of census data. The Secretary shall give priority to requests made by any 

authorized person described in subsection (c)(1). No information 

shall be disclosed to any person if the State has notified the Secretary that the State has reasonable evidence of domestic violence 

or child abuse and the disclosure of such information could be 

225

harmful to the custodial parent or the child of such parent, provided that—

(A) in response to a request from an authorized person (as 

defined in subsection (c) of this section and section 463(d)(2)), 

the Secretary shall advise the authorized person that the Secretary has been notified that there is reasonable evidence of 

domestic violence or child abuse and that information can only 

be disclosed to a court or an agent of a court pursuant to subparagraph (B); and 

(B) information may be disclosed to a court or an agent of 

a court described in subsection (c)(2) of this section or section 

463(d)(2)(B), if—

(i) upon receipt of information from the Secretary, the 

court determines whether disclosure to any other person of 

that information could be harmful to the parent or the 

child; and 

(ii) if the court determines that disclosure of such information to any other person could be harmful, the court 

and its agents shall not make any such disclosure. 

(3) Information received or transmitted pursuant to this section 

shall be subject to the safeguard provisions contained in section 

454(26). 

(c) As used in subsection (a), the term ‘‘authorized person’’ 

means—

(1) any agent or attorney of any State or Indian tribe or tribal organization having in effect a plan approved under this 

part, who has the duty or authority under such plans to seek 

to recover any amounts owed as child and spousal support (including, when authorized under the State plan, any official of 

a political subdivision); 

(2) the court which has authority to issue an order or to 

serve as the initiating court in an action to seek an order 

against a noncustodial parent for the support and maintenance 

of a child, or any agent of such court; 

(3) the resident parent, legal guardian, attorney, or agent of 

a child (other than a child receiving assistance under a State 

program funded under part A (as determined by regulations 

prescribed by the Secretary) without regard to the existence of 

a court order against a noncustodial parent who has a duty to 

support and maintain any such child; and 

(4) a State agency that is administering a program operated 

under a State plan under subpart 1 of part B, or a State plan 

approved under subpart 2 of part B or under part E. 

(d) A request for information under this section shall be filed in 

such manner and form as the Secretary shall by regulation prescribe and shall be accompanied or supported by such documents 

as the Secretary may determine to be necessary. 

(e)(1) Whenever the Secretary receives a request submitted 

under subsection (b) which he is reasonably satisfied meets the criteria established by subsections (a), (b), and (c), he shall promptly 

undertake to provide the information requested from the files and 

records maintained by any of the departments, agencies, or instrumentalities of the United States or of any State. 

(2) Notwithstanding any other provision of law, whenever the individual who is the head of any department, agency, or instrumenVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00229 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
226

tality of the United States receives a request from the Secretary for 

information authorized to be provided by the Secretary under this 

section, such individual shall promptly cause a search to be made 

of the files and records maintained by such department, agency, or 

instrumentality with a view to determining whether the information requested is contained in any such files or records. If such 

search discloses the information requested, such individual shall 

immediately transmit such information to the Secretary, except 

that if any information is obtained the disclosure of which would 

contravene national policy or security interests of the United States 

or the confidentiality of census data, such information shall not be 

transmitted and such individual shall immediately notify the Secretary. If such search fails to disclose the information requested, 

such individual shall immediately so notify the Secretary. The costs 

incurred by any such department, agency, or instrumentality of the 

United States or of any State in providing such information to the 

Secretary shall be reimbursed by him in an amount which the Secretary determines to be reasonable payment for the information exchange (which amount shall not include payment for the costs of 

obtaining, compiling, or maintaining the information). Whenever 

such services are furnished to an individual specified in subsection 

(c)(3), a fee shall be charged such individual. The fee so charged 

shall be used to reimburse the Secretary or his delegate for the expense of providing such services. 

(3) The Secretary of Labor shall enter into an agreement with 

the Secretary to provide prompt access for the Secretary (in accordance with this subsection) to the wage and unemployment compensation claims information and data maintained by or for the 

Department of Labor or State employment security agencies. 

(f) The Secretary, in carrying out his duties and functions under 

this section, shall enter into arrangements with State agencies administering State plans approved under this part for such State 

agencies to accept from resident parents, legal guardians, or agents 

of a child described in subsection (c)(3) and to transmit to the Secretary requests for information with regard to the whereabouts of 

noncustodial parents and otherwise to cooperate with the Secretary 

in carrying out the purposes of this section. 

(g) REIMBURSEMENT FOR REPORTS BY STATE AGENCIES.—The Secretary may reimburse Federal and State agencies for the costs incurred by such entities in furnishing information requested by the 

Secretary under this section in an amount which the Secretary determines to be reasonable payment for the information exchange 

(which amount shall not include payment for the costs of obtaining, 

compiling, or maintaining the information). 

(h) FEDERAL CASE REGISTRY OF CHILD SUPPORT ORDERS.—

(1) IN GENERAL.—Not later than October 1, 1998, in order to 

assist States in administering programs under State plans approved under this part and programs funded under part A, and 

for the other purposes specified in this section, the Secretary 

shall establish and maintain in the Federal Parent Locator 

Service an automated registry (which shall be known as the 

‘‘Federal Case Registry of Child Support Orders’’), which shall 

contain abstracts of support orders and other information described in paragraph (2) with respect to each case and order 

in each State case registry maintained pursuant to section 

227

454A(e), as furnished (and regularly updated), pursuant to section 454A(f), by State agencies administering programs under 

this part. 

(2) CASE AND ORDER INFORMATION.—The information referred to in paragraph (1) with respect to a case or an order 

shall be such information as the Secretary may specify in regulations (including the names, social security numbers or other 

uniform identification numbers, and State case identification 

numbers) to identify the individuals who owe or are owed support (or with respect to or on behalf of whom support obligations are sought to be established), and the State or States 

which have the case or order. Beginning not later than October 

1, 1999, the information referred to in paragraph (1) shall include the names and social security numbers of the children of 

such individuals. 

(3) ADMINISTRATION OF FEDERAL TAX LAWS.—The Secretary 

of the Treasury shall have access to the information described 

in paragraph (2) for the purpose of administering those sections of the Internal Revenue Code of 1986 which grant tax 

benefits based on support or residence of children. 

(i) NATIONAL DIRECTORY OF NEW HIRES.—

(1) IN GENERAL.—In order to assist States in administering 

programs under State plans approved under this part and programs funded under part A, and for the other purposes specified in this section, the Secretary shall, not later than October 

1, 1997, establish and maintain in the Federal Parent Locator 

Service an automated directory to be known as the National 

Directory of New Hires, which shall contain the information 

supplied pursuant to section 453A(g)(2).

(2) DATA ENTRY AND DELETION REQUIREMENTS.—

(A) IN GENERAL.—Information provided pursuant to section 453A(g)(2) shall be entered into the data base maintained by the National Directory of New Hires within two 

business days after receipt, and shall be deleted from the 

data base 24 months after the date of entry. 

(B) 12-MONTH limit on access to wage and unemployment compensation information.—The Secretary shall not 

have access for child support enforcement purposes to information in the National Directory of New Hires that is 

provided pursuant to section 453A(g)(2)(B), if 12 months 

has elapsed since the date the information is so provided 

and there has not been a match resulting from the use of 

such information in any information comparison under 

this subsection. 

(C) RETENTION OF DATA FOR RESEARCH PURPOSES.—Notwithstanding subparagraphs (A) and (B), the Secretary 

may retain such samples of data entered in the National 

Directory of New Hires as the Secretary may find necessary to assist in carrying out subsection ( j)(5).

(3) ADMINISTRATION OF FEDERAL TAX LAWS.—The Secretary 

of the Treasury shall have access to the information in the National Directory of New Hires for purposes of administering 

section 32 of the Internal Revenue Code of 1986, or the advance payment of the earned income tax credit under section 

228

3507 of such Code, and verifying a claim with respect to employment in a tax return. 

(4) LIST OF MULTISTATE EMPLOYERS.—The Secretary shall 

maintain within the National Directory of New Hires a list of 

multistate employers that report information regarding newly 

hired employees pursuant to section 453A(b)(1)(B), and the 

State which each such employer has designated to receive such 

information.

‘‘(5) CALCULATION OF EMPLOYMENT CREDIT FOR PURPOSES OF

DETERMINING STATE WORK PARTICIPATION RATES UNDER TANF.—

The Secretary may use the information in the National Directory of New Hires for purposes of calculating State employment 

credits pursuant to section 407(b)(2).’’. 

* * * * * * *

(j) INFORMATION COMPARISONS AND OTHER DISCLOSURES.—

(1) VERIFICATION BY SOCIAL SECURITY ADMINISTRATION.—

(A) IN GENERAL.—The Secretary shall transmit information on individuals and employers maintained under this 

section to the Social Security Administration to the extent 

necessary for verification in accordance with subparagraph 

(B). 

(B) VERIFICATION BY SSA.—The Social Security Administration shall verify the accuracy of, correct, or supply to 

the extent possible, and report to the Secretary, the following information supplied by the Secretary pursuant to 

subparagraph (A): 

(i) The name, social security number, and birth date 

of each such individual. 

(ii) The employer identification number of each such 

employer. 

(2) INFORMATION COMPARISONS.—For the purpose of locating 

individuals in a paternity establishment case or a case involving the establishment, modification, or enforcement of a support order, the Secretary shall—

(A) compare information in the National Directory of 

New Hires against information in the support case abstracts in the Federal Case Registry of Child Support Orders not less often than every 2 business days; and 

(B) within 2 business days after such a comparison reveals a match with respect to an individual, report the information to the State agency responsible for the case. 

(3) INFORMATION COMPARISONS AND DISCLOSURES OF INFOR- MATION IN ALL REGISTRIES FOR TITLE IV PROGRAM PURPOSES.— To the extent and with the frequency that the Secretary determines to be effective in assisting States to carry out their responsibilities under programs operated under this part and 

programs funded under part A, the Secretary shall— 

(A) compare the information in each component of the 

Federal Parent Locator Service maintained under this section against the information in each other such component 

(other than the comparison required by paragraph (2)), 

and report instances in which such a comparison reveals 

a match with respect to an individual to State agencies operating such programs; and 

229

(B) disclose information in such components to such 

State agencies. 

(4) PROVISION OF NEW HIRE INFORMATION TO THE SOCIAL SE- CURITY ADMINISTRATION.—The National Directory of New Hires 

shall provide the Commissioner of Social Security with all information in the National Directory. 

(5) RESEARCH.—The Secretary may provide access to data in 

each component of the Federal Parent Locator Service maintained under this section and to information reported by employers pursuant to section 453A(b) for research purposes 

found by the Secretary to be likely to contribute to achieving 

the purposes of part A or this part, but without personal identifiers. 

(6) INFORMATION COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF OBLIGATIONS ON HIGHER EDUCATION ACT LOANS

AND GRANTS.—

(A) FURNISHING OF INFORMATION BY THE SECRETARY OF

EDUCATION.—The Secretary of Education shall furnish to 

the Secretary, on a quarterly basis or at such less frequent 

intervals as may be determined by the Secretary of Education, information in the custody of the Secretary of Education for comparison with information in the National Directory of New Hires, in order to obtain the information in 

such directory with respect to individuals who—

(i) are borrowers of loans made under title IV of the 

Higher Education Act of 1965 that are in default; or 

(ii) owe an obligation to refund an overpayment of a 

grant awarded under such title. 

(B) REQUIREMENT TO SEEK MINIMUM INFORMATION NECESSARY.—The Secretary of Education shall seek information pursuant to this section only to the extent essential to 

improving collection of the debt described in subparagraph 

(A). 

(C) DUTIES OF THE SECRETARY.—

(i) INFORMATION COMPARISON; DISCLOSURE TO THE

SECRETARY OF EDUCATION.—The Secretary, in cooperation with the Secretary of Education, shall compare information in the National Directory of New Hires with 

information in the custody of the Secretary of Education, and disclose information in that Directory to 

the Secretary of Education, in accordance with this 

paragraph, for the purposes specified in this paragraph. 

(ii) CONDITION ON DISCLOSURE.—The Secretary shall 

make disclosures in accordance with clause (i) only to 

the extent that the Secretary determines that such 

disclosures do not interfere with the effective operation of the program under this part. Support collection under section 466(b) shall be given priority over 

collection of any defaulted student loan or grant overpayment against the same income. 

(D) USE OF INFORMATION BY THE SECRETARY OF EDU- CATION.—The Secretary of Education may use information 

resulting from a data match pursuant to this paragraph 

only—

230

(i) for the purpose of collection of the debt described 

in subparagraph (A) owed by an individual whose 

annualized wage level (determined by taking into consideration information from the National Directory of 

New Hires) exceeds $16,000; and 

(ii) after removal of personal identifiers, to conduct 

analyses of student loan defaults. 

(E) DISCLOSURE OF INFORMATION BY THE SECRETARY OF

EDUCATION.—

(i) DISCLOSURES PERMITTED.—The Secretary of Education may disclose information resulting from a data 

match pursuant to this paragraph only to—

(I) a guaranty agency holding a loan made 

under part B of title IV of the Higher Education 

Act of 1965 on which the individual is obligated; 

(II) a contractor or agent of the guaranty agency 

described in subclause (I); 

(III) a contractor or agent of the Secretary; and 

(IV) the Attorney General. 

(ii) PURPOSE OF DISCLOSURE.—The Secretary of Education may make a disclosure under clause (i) only for 

the purpose of collection of the debts owed on defaulted student loans, or overpayments of grants, 

made under title IV of the Higher Education Act of 

1965. 

(iii) RESTRICTION ON REDISCLOSURE.—An entity to 

which information is disclosed under clause (i) may 

use or disclose such information only as needed for the 

purpose of collecting on defaulted student loans, or 

overpayments of grants, made under title IV of the 

Higher Education Act of 1965. 

(F) REIMBURSEMENT OF HHS COSTS.—The Secretary of 

Education shall reimburse the Secretary, in accordance 

with subsection (k)(3), for the øadditional¿ costs incurred 

by the Secretary in furnishing the information requested 

under this subparagraph. 

(7) INFORMATION COMPARISONS FOR HOUSING ASSISTANCE

PROGRAMS.—

(A) FURNISHING OF INFORMATION BY HUD.—Subject to 

subparagraph (G), the Secretary of Housing and Urban 

Development shall furnish to the Secretary, on such periodic basis as determined by the Secretary of Housing and 

Urban Development in consultation with the Secretary, information in the custody of the Secretary of Housing and 

Urban Development for comparison with information in 

the National Directory of New Hires, in order to obtain information in such Directory with respect to individuals 

who are participating in any program under—

(i) the United States Housing Act of 1937 (42 U.S.C. 

1437 et seq.); 

(ii) section 202 of the Housing Act of 1959 (12 U.S.C. 

1701q); 

(iii) section 221(d)(3), 221(d)(5), or 236 of the National Housing Act (12 U.S.C. 1715l(d) and 1715z–1); 

231

(iv) section 811 of the Cranston-Gonzalez National 

Affordable Housing Act (42 U.S.C. 8013); or 

(v) section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s). 

(B) REQUIREMENT TO SEEK MINIMUM INFORMATION.—The 

Secretary of Housing and Urban Development shall seek 

information pursuant to this section only to the extent necessary to verify the employment and income of individuals 

described in subparagraph (A). 

(C) DUTIES OF THE SECRETARY.—

(i) INFORMATION DISCLOSURE.—The Secretary, in cooperation with the Secretary of Housing and Urban 

Development, shall compare information in the National Directory of New Hires with information provided by the Secretary of Housing and Urban Development with respect to individuals described in subparagraph (A), and shall disclose information in such Directory regarding such individuals to the Secretary of 

Housing and Urban Development, in accordance with 

this paragraph, for the purposes specified in this paragraph.

(ii) CONDITION ON DISCLOSURE.—The Secretary shall 

make disclosures in accordance with clause (i) only to 

the extent that the Secretary determines that such 

disclosures do not interfere with the effective operation of the program under this part. 

(D) USE OF INFORMATION BY HUD.—The Secretary of 

Housing and Urban Development may use information resulting from a data match pursuant to this paragraph 

only—

(i) for the purpose of verifying the employment and 

income of individuals described in subparagraph (A); 

and 

(ii) after removal of personal identifiers, to conduct 

analyses of the employment and income reporting of 

individuals described in subparagraph (A). 

(E) DISCLOSURE OF INFORMATION BY HUD.—

(i) PURPOSE OF DISCLOSURE.—The Secretary of 

Housing and Urban Development may make a disclosure under this subparagraph only for the purpose of 

verifying the employment and income of individuals 

described in subparagraph (A). 

(ii) DISCLOSURES PERMITTED.—Subject to clause (iii), 

the Secretary of Housing and Urban Development may 

disclose information resulting from a data match pursuant to this paragraph only to a public housing agency, the Inspector General of the Department of Housing and Urban Development, and the Attorney General in connection with the administration of a program described in subparagraph (A). Information obtained by the Secretary of Housing and Urban Development pursuant to this paragraph shall not be made 

available under section 552 of title 5, United States 

Code. 

232

(iii) CONDITIONS ON DISCLOSURE.—Disclosures under 

this paragraph shall be—

(I) made in accordance with data security and 

control policies established by the Secretary of 

Housing and Urban Development and approved by 

the Secretary; 

(II) subject to audit in a manner satisfactory to 

the Secretary; and 

(III) subject to the sanctions under subsection 

(l)(2). 

(iv) ADDITIONAL DISCLOSURES.— (I) DETERMINATION BY SECRETARIES.—The Secretary of Housing and Urban Development and 

the Secretary shall determine whether to permit 

disclosure of information under this paragraph to 

persons or entities described in subclause (II), 

based on an evaluation made by the Secretary of 

Housing and Urban Development (in consultation 

with and approved by the Secretary), of the costs 

and benefits of disclosures made under clause (ii) 

and the adequacy of measures used to safeguard 

the security and confidentiality of information so 

disclosed. 

(II) PERMITTED PERSONS OR ENTITIES.—If the 

Secretary of Housing and Urban Development and 

the Secretary determine pursuant to subclause (I) 

that disclosures to additional persons or entities 

shall be permitted, information under this paragraph may be disclosed by the Secretary of Housing and Urban Development to a private owner, a 

management agent, and a contract administrator 

in connection with the administration of a program described in subparagraph (A), subject to 

the conditions in clause (iii) and such additional 

conditions as agreed to by the Secretaries. 

(v) RESTRICTIONS ON REDISCLOSURE.—A person or 

entity to which information is disclosed under this 

subparagraph may use or disclose such information 

only as needed for verifying the employment and income of individuals described in subparagraph (A), 

subject to the conditions in clause (iii) and such additional conditions as agreed to by the Secretaries. 

(F) REIMBURSEMENT OF HHS COSTS.—The Secretary of 

Housing and Urban Development shall reimburse the Secretary, in accordance with subsection (k)(3), for the costs 

incurred by the Secretary in furnishing the information requested under this paragraph. 

(G) CONSENT.—The Secretary of Housing and Urban Development shall not seek, use, or disclose information 

under this paragraph relating to an individual without the 

prior written consent of such individual (or of a person legally authorized to consent on behalf of such individual). 

(8) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST IN

ADMINISTRATION OF UNEMPLOYMENT COMPENSATION PROGRAMS.—

233

(A) IN GENERAL.—If, for purposes of administering an 

unemployment compensation program under Federal or 

State law, a State agency responsible for the administration of such program transmits to the Secretary the names 

and social security account numbers of individuals, the 

Secretary shall disclose to such State agency information 

on such individuals and their employers maintained in the 

National Directory of New Hires, subject to this paragraph. 

(B) CONDITION ON DISCLOSURE BY THE SECRETARY.—The 

Secretary shall make a disclosure under subparagraph (A) 

only to the extent that the Secretary determines that the 

disclosure would not interfere with the effective operation 

of the program under this part. 

(C) USE AND DISCLOSURE OF INFORMATION BY STATE

AGENCIES.—

(i) IN GENERAL.—A State agency may not use or disclose information provided under this paragraph except for purposes of administering a program referred 

to in subparagraph (A). 

(ii) INFORMATION SECURITY.—The State agency shall 

have in effect data security and control policies that 

the Secretary finds adequate to ensure the security of 

information obtained under this paragraph and to ensure that access to such information is restricted to 

authorized persons for purposes of authorized uses 

and disclosures. 

(iii) PENALTY FOR MISUSE OF INFORMATION.—An officer or employee of the State agency who fails to comply with this subparagraph shall be subject to the 

sanctions under subsection (l)(2) to the same extent as 

if such officer or employee was an officer or employee 

of the United States. 

(D) PROCEDURAL REQUIREMENTS.—State agencies requesting information under this paragraph shall adhere to 

uniform procedures established by the Secretary governing 

information requests and data matching under this paragraph. 

(E) REIMBURSEMENT OF COSTS.—The State agency shall 

reimburse the Secretary, in accordance with subsection 

(k)(3), for the costs incurred by the Secretary in furnishing 

the information requested under this paragraph. 

ø(7)¿ (9) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST IN FEDERAL DEBT COLLECTION.—

(A) FURNISHING OF INFORMATION BY THE SECRETARY OF

THE TREASURY.—The Secretary of the Treasury shall furnish to the Secretary, on such periodic basis as determined 

by the Secretary of the Treasury in consultation with the 

Secretary, information in the custody of the Secretary of 

the Treasury for comparison with information in the National Directory of New Hires, in order to obtain information in such Directory with respect to persons—

(i) who owe delinquent nontax debt to the United 

States; and 

234

(ii) whose debt has been referred to the Secretary of 

the Treasury in accordance with 31 U.S.C. 3711(g). 

(B) REQUIREMENT TO SEEK MINIMUM INFORMATION.—The 

Secretary of the Treasury shall seek information pursuant 

to this section only to the extent necessary to improve collection of the debt described in subparagraph (A). 

(C) DUTIES OF THE SECRETARY.— (i) INFORMATION DISCLOSURE.—The Secretary, in cooperation with the Secretary of the Treasury, shall 

compare information in the National Directory of New 

Hires with information provided by the Secretary of 

the Treasury with respect to persons described in subparagraph (A) and shall disclose information in such 

Directory regarding such persons to the Secretary of 

the Treasury in accordance with this paragraph, for 

the purposes specified in this paragraph. Such comparison of information shall not be considered a 

matching program as defined in 5 U.S.C. 552a. 

(ii) CONDITION ON DISCLOSURE.—The Secretary shall 

make disclosures in accordance with clause (i) only to 

the extent that the Secretary determines that such 

disclosures do not interfere with the effective operation of the program under this part. Support collection under section 466(b) of this title shall be given 

priority over collection of any delinquent Federal 

nontax debt against the same income. 

(D) USE OF INFORMATION BY THE SECRETARY OF THE

TREASURY.—The Secretary of the Treasury may use information provided under this paragraph only for purposes of 

collecting the debt described in subparagraph (A). 

(E) DISCLOSURE OF INFORMATION BY THE SECRETARY OF

THE TREASURY.—

(i) PURPOSE OF DISCLOSURE.—The Secretary of the 

Treasury may make a disclosure under this subparagraph only for purposes of collecting the debt described in subparagraph (A). 

(ii) DISCLOSURES PERMITTED.—Subject to clauses (iii) 

and (iv), the Secretary of the Treasury may disclose 

information resulting from a data match pursuant to 

this paragraph only to the Attorney General in connection with collecting the debt described in subparagraph (A). 

(iii) CONDITIONS ON DISCLOSURE.—Disclosures under 

this subparagraph shall be—

(I) made in accordance with data security and 

control policies established by the Secretary of the 

Treasury and approved by the Secretary; 

(II) subject to audit in a manner satisfactory to 

the Secretary; and 

(III) subject to the sanctions under subsection 

(l)(2). 

(iv) ADDITIONAL DISCLOSURES.— (I) DETERMINATION BY SECRETARIES.—The Secretary of the Treasury and the Secretary shall determine whether to permit disclosure of informaVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00238 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
235

tion under this paragraph to persons or entities 

described in subclause (II), based on an evaluation 

made by the Secretary of the Treasury (in consultation with and approved by the Secretary), of 

the costs and benefits of such disclosures and the 

adequacy of measures used to safeguard the security and confidentiality of information so disclosed. 

(II) PERMITTED PERSONS OR ENTITIES.—If the 

Secretary of the Treasury and the Secretary determine pursuant to subclause (I) that disclosures to 

additional persons or entities shall be permitted, 

information under this paragraph may be disclosed by the Secretary of the Treasury, in connection with collecting the debt described in subparagraph (A), to a contractor or agent of either Secretary and to the Federal agency that referred 

such debt to the Secretary of the Treasury for collection, subject to the conditions in clause (iii) and 

such additional conditions as agreed to by the Secretaries. 

(v) RESTRICTIONS ON REDISCLOSURE.—A person or 

entity to which information is disclosed under this 

subparagraph may use or disclose such information 

only as needed for collecting the debt described in subparagraph (A), subject to the conditions in clause (iii) 

and such additional conditions as agreed to by the Secretaries. 

(F) REIMBURSEMENT OF HHS COSTS.—The Secretary of 

the Treasury shall reimburse the Secretary, in accordance 

with subsection (k)(3), for the costs incurred by the Secretary in furnishing the information requested under this 

paragraph. Any such costs paid by the Secretary of the 

Treasury shall be considered costs of implementing 31 

U.S.C. 3711(g) in accordance with 31 U.S.C. 3711(g)(6) and 

may be paid from the account established pursuant to 31 

U.S.C. 3711(g)(7). 

(k) FEES.— (1) FOR SSA VERIFICATION.—The Secretary shall reimburse 

the Commissioner of Social Security, at a rate negotiated between the Secretary and the Commissioner, for the costs incurred by the Commissioner in performing the verification 

services described in subsection (j). 

(2) FOR INFORMATION FROM STATE DIRECTORIES OF NEW

HIRES.—The Secretary shall reimburse costs incurred by State 

directories of new hires in furnishing information as required 

by section 453A(g)(2), at rates which the Secretary determines 

to be reasonable (which rates shall not include payment for the 

costs of obtaining, compiling, or maintaining such information). 

(3) FOR INFORMATION AND ENFORCEMENT SERVICES FUR- NISHED TO STATE AND FEDERAL AGENCIES.—A State or Federal 

agency that receives information or enforcement services from 

the Secretary pursuant to this section or subsection (l) or (m) 

of section 452 shall reimburse the Secretary for costs incurred 

by the Secretary øin furnishing the information¿ in furnishing 

such information or enforcement services, at rates which the 

236

Secretary determines to be reasonable (which rates shall include payment for the costs of obtaining, verifying, maintaining, and comparing the information).

(l) RESTRICTION ON DISCLOSURE AND USE.— (1) IN GENERAL.—Information in the Federal Parent Locator 

Service, and information resulting from comparisons using 

such information, shall not be used or disclosed except as expressly provided in this section, subject to section 6103 of the 

Internal Revenue Code of 1986. 

(2) PENALTY FOR MISUSE OF INFORMATION IN THE NATIONAL

DIRECTORY OF NEW HIRES.—The Secretary shall require the imposition of an administrative penalty (up to and including dismissal from employment), and a fine of $1,000, for each act of 

unauthorized access to, disclosure of, or use of, information in 

the National Directory of New Hires established under subsection (i) by any officer or employee of the United States or 

any other person who knowingly and willfully violates this 

paragraph.

(m) INFORMATION INTEGRITY AND SECURITY.—The Secretary shall 

establish and implement safeguards with respect to the entities established under this section designed to—

(1) ensure the accuracy and completeness of information in 

the Federal Parent Locator Service; and 

(2) restrict access to confidential information in the Federal 

Parent Locator Service to authorized persons, and restrict use 

of such information to authorized purposes. 

(n) FEDERAL GOVERNMENT REPORTING.—Each department, agency, and instrumentality of the United States shall on a quarterly 

basis report to the Federal Parent Locator Service the name and 

social security number of each employee and the wages paid to the 

employee during the previous quarter, except that such a report 

shall not be filed with respect to an employee of a department, 

agency, or instrumentality performing intelligence or counterintelligence functions, if the head of such department, agency, or instrumentality has determined that filing such a report could endanger 

the safety of the employee or compromise an ongoing investigation 

or intelligence mission. 

(o) USE OF SET-ASIDE FUNDS.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there is hereby 

appropriated to the Secretary for each fiscal year an amount equal 

to 2 percent of the total amount paid to the Federal Government 

pursuant to a plan approved under this part during the immediately preceding fiscal year (as determined on the basis of the 

most recent reliable data available to the Secretary as of the end 

of the third calendar quarter following the end of such preceding 

fiscal year), or the amount appropriated under this paragraph for 

fiscal year 2002, whichever is greater which shall be available for 

use by the Secretary, either directly or through grants, contracts, 

or interagency agreements, for operation of the Federal Parent Locator Service under this section, to the extent such costs are not 

recovered through user fees. Amounts appropriated under this subsection øfor each of fiscal years 1997 through 2001¿ shall remain 

available until expended. 

(p) SUPPORT ORDER DEFINED.—As used in this part, the term 

‘‘support order’’ means a judgment, decree, or order, whether temVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00240 Fmt 6659 Sfmt 6601 E:\HR\OC\SR051.XXX SR051
237

porary, final, or subject to modification, issued by a court or an administrative agency of competent jurisdiction, for the support and 

maintenance of a child, including a child who has attained the age 

of majority under the law of the issuing State, or of the parent with 

whom the child is living, which provides for monetary support, 

health care, arrearages, or reimbursement, and which may include 

related costs and fees, interest and penalties, income withholding, 

attorneys’ fees, and other relief. 

SEC. 453A. ø42 U.S.C. 653a¿ STATE DIRECTORY OF NEW HIRES. 

(a) ESTABLISHMENT.— (1) IN GENERAL.— (A) REQUIREMENT FOR STATES THAT HAVE NO DIREC- TORY.—Except as provided in subparagraph (B), not later 

than October 1, 1997, each State shall establish an automated directory (to be known as the ‘‘State Directory of 

New Hires’’) which shall contain information supplied in 

accordance with subsection (b) by employers on each newly 

hired employee. 

(B) STATES WITH NEW HIRE REPORTING LAW IN EXIST- ENCE.—A State which has a new hire reporting law in existence on the date of the enactment of this section may 

continue to operate under the State law, but the State 

must meet the requirements of subsection (g)(2) not later 

than October 1, 1997, and the requirements of this section 

(other than subsection (g)(2)) not later than October 1, 

1998. 

(2) DEFINITIONS.—As used in this section: 

(A) EMPLOYEE.—The term ‘‘employee’’—

(i) means an individual who is an employee within 

the meaning of chapter 24 of the Internal Revenue 

Code of 1986; and 

(ii) does not include an employee of a Federal or 

State agency performing intelligence or counterintelligence functions, if the head of such agency has determined that reporting pursuant to paragraph (1) with 

respect to the employee could endanger the safety of 

the employee or compromise an ongoing investigation 

or intelligence mission. 

(B) EMPLOYER.— (i) IN GENERAL.—The term ‘‘employer’’ has the 

meaning given such term in section 3401(d) of the Internal Revenue Code of 1986 and includes any governmental entity and any labor organization. 

(ii) LABOR ORGANIZATION.—The term ‘‘labor organization’’ shall have the meaning given such term in section 2(5) of the National Labor Relations Act, and includes any entity (also known as a ‘‘hiring hall’’) which 

is used by the organization and an employer to carry 

out requirements described in section 8(f)(3) of such 

Act of an agreement between the organization and the 

employer. 

(b) EMPLOYER INFORMATION.—

(1) REPORTING REQUIREMENT.—

(A) IN GENERAL.—Except as provided in subparagraphs 

(B) and (C), each employer shall furnish to the Directory 

238

of New Hires of the State in which a newly hired employee 

works, a report that contains the name, address, and social 

security number of the employee, and the name and address of, and identifying number assigned under section 

6109 of the Internal Revenue Code of 1986 to, the employer. 

(B) MULTISTATE EMPLOYERS.—An employer that has employees who are employed in 2 or more States and that 

transmits reports magnetically or electronically may comply with subparagraph (A) by designating 1 State in which 

such employer has employees to which the employer will 

transmit the report described in subparagraph (A), and 

transmitting such report to such State. Any employer that 

transmits reports pursuant to this subparagraph shall notify the Secretary in writing as to which State such employer designates for the purpose of sending reports. 

(C) FEDERAL GOVERNMENT EMPLOYERS.—Any department, agency, or instrumentality of the United States shall 

comply with subparagraph (A) by transmitting the report 

described in subparagraph (A) to the National Directory of 

New Hires established pursuant to section 453. 

(2) TIMING OF REPORT.—Each State may provide the time 

within which the report required by paragraph (1) shall be 

made with respect to an employee, but such report shall be 

made—

(A) not later than 20 days after the date the employer 

hires the employee; or 

(B) in the case of an employer transmitting reports magnetically or electronically, by 2 monthly transmissions (if 

necessary) not less than 12 days nor more than 16 days 

apart. 

(c) REPORTING FORMAT AND METHOD.—Each report required by 

subsection (b) shall be made on a W–4 form or, at the option of the 

employer, an equivalent form, and may be transmitted by 1st class 

mail, magnetically, or electronically. 

(d) CIVIL MONEY PENALTIES ON NONCOMPLYING EMPLOYERS.—

The State shall have the option to set a State civil money penalty 

which shall not exceed—

(1) $25 per failure to meet the requirements of this section 

with respect to a newly hired employee; or 

(2) $500 if, under State law, the failure is the result of a conspiracy between the employer and the employee to not supply 

the required report or to supply a false or incomplete report. 

(e) ENTRY OF EMPLOYER INFORMATION.—Information shall be entered into the data base maintained by the State Directory of New 

Hires within 5 business days of receipt from an employer pursuant 

to subsection (b). 

(f) INFORMATION COMPARISONS.—

(1) IN GENERAL.—Not later than May 1, 1998, an agency designated by the State shall, directly or by contract, conduct 

automated comparisons of the social security numbers reported 

by employers pursuant to subsection (b) and the social security 

numbers appearing in the records of the State case registry for 

cases being enforced under the State plan. 

239

(2) NOTICE OF MATCH.—When an information comparison 

conducted under paragraph (1) reveals a match with respect to 

the social security number of an individual required to provide 

support under a support order, the State Directory of New 

Hires shall provide the agency administering the State plan 

approved under this part of the appropriate State with the 

name, address, and social security number of the employee to 

whom the social security number is assigned, and the name 

* * * * * * *

STATE PLAN FOR CHILD AND SPOUSAL SUPPORT

SEC. 454. A State plan for child and spousal support must—

* * * * * * *

(31) provide that the State agency will have in effect a procedure for certifying to the Secretary, for purposes of the procedure under section 452(k), determinations that individuals owe 

arrearages of child support in an amount exceeding ø$5,000¿

$2,500, under which procedure—

* * * * * * *

(C) provide that no applications will be required from, and 

no costs will be assessed for such services against, the foreign 

reciprocating country or foreign obligee (but costs may at State 

option be assessed against the obligor); øand¿

(33) provide that a State øthat receives funding pursuant to 

section 428 and¿ that has within its borders Indian country (as 

defined in section 1151 of title 18, United States Code) may 

enter into cooperative agreements with an Indian tribe or tribal organization (as defined in subsections (e) and (l) of section 

4 of the Indian Self-Determination and Education Assistance 

Act (25 U.S.C. 450b)), if the Indian tribe or tribal organization 

demonstrates that such tribe or organization has an established tribal court system or a Court of Indian Offenses with 

the authority to establish paternity, establish, modify, or enforce support orders, or to enter support orders in accordance 

with child support guidelines established or adopted by such 

tribe or organization, under which the State and tribe or organization shall provide for the cooperative delivery of child support enforcement services in Indian country and for the forwarding of all collections pursuant to the functions performed 

by the tribe or organization to the State agency, or conversely, 

by the State agency to the tribe or organization, which shall 

distribute such collections in accordance with such agreement. 

The State may allow the jurisdiction which makes the collection involved to retain any application fee under paragraph (6)(B) or any 

late payment fee under paragraph (21). Nothing in paragraph (33) 

shall void any provision of any cooperative agreement entered into 

before the date of the enactment of such paragraph, nor shall such 

paragraph deprive any State of jurisdiction over Indian country (as 

so defined) that is lawfully exercised under section 402 of the Act 

entitled ‘‘An Act to prescribe penalties for certain acts of violence 

or intimidation, and for other purposes’’, approved April 11, 1968 

(25 U.S.C. 1322)ø.¿;

240

(34) include an election by the State to apply section 

457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this Act 

(as in effect for the State immediately before the date this paragraph first applies to the State) to the distribution of the 

amounts which are the subject of such sections and, for so long 

as the State elects to so apply such former section, the amendments made by section 301(d)(1) of the Personal Responsibility 

and Individual Development for Everyone Act shall not apply 

with respect to the State, notwithstanding section 301(e) of that 

Act; and 

* * * * * * *

(35) provide that the State shall—

(A) upon furnishing the Secretary with information 

under section 452(l) with respect to individuals owing pastdue support, provide notice to such individuals that their 

assets held in financial institutions shall be subject to seizure to pay such past-due support, and shall— 

(i) instruct such individuals of the steps which may 

be taken to contest the State’s determination that pastdue support is owed or the amount of the past-due support; and 

(ii) include, in the case of jointly owned assets, a description of the process by which other owners may secure their share of such assets, in accordance with such 

policies and procedures as the Secretary may specify 

with respect to seizure of such assets; 

(B) promptly resolve cases in which such individuals contest the State’s determination with respect to past-due support, and provide for expedited refund of any assets erroneously seized and transferred to the State under such section 452(l); and 

(C) except as otherwise specified under this paragraph or 

by the Secretary, ensure that the due process protections afforded under this paragraph to individuals whose assets 

are subject to seizure under section 452(l) are generally consistent with, and to the extent practicable conform to, the 

due process protections afforded by the State to individuals 

subject to offset of tax refunds under section 464.

SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT. 

ø(a) IN GENERAL.—Subject to subsections (d) and (e), an amount 

collected on behalf of a family as support by a State pursuant to 

a plan approved under this part shall be distributed as follows: 

ø(1) FAMILIES RECEIVING ASSISTANCE.—In the case of a family receiving assistance from the State, the State shall— 

ø(A) pay to the Federal Government the Federal share 

of the amount so collected; and 

ø(B) retain, or distribute to the family, the State share 

of the amount so collected. 

In no event shall the total of the amounts paid to the Federal 

Government and retained by the State exceed the total of the 

amounts that have been paid to the family as assistance by the 

State. 

241

ø(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.—In the 

case of a family that formerly received assistance from the 

State: 

ø(A) CURRENT SUPPORT PAYMENTS.—To the extent that 

the amount so collected does not exceed the amount required to be paid to the family for the month in which collected, the State shall distribute the amount so collected to 

the family. 

ø(B) PAYMENTS OF ARREARAGES.—To the extent that the 

amount so collected exceeds the amount required to be 

paid to the family for the month in which collected, the 

State shall distribute the amount so collected as follows: 

ø(i) DISTRIBUTION OF ARREARAGES THAT ACCRUED

AFTER THE FAMILY CEASED TO RECEIVE ASSISTANCE.— 

ø(I) PRE-OCTOBER 1997.—Except as provided in 

subclause (II), the provisions of this section as in 

effect and applied on the day before the date of 

the enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation 

Act of 1996 (other than subsection (b)(1) (as so in 

effect)) shall apply with respect to the distribution 

of support arrearages that— 

ø(aa) accrued after the family ceased to receive assistance, and 

ø(bb) are collected before October 1, 1997. 

ø(II) POST-SEPTEMBER 1997.—With respect to the 

amount so collected on or after October 1, 1997 (or 

before such date, at the option of the State)— 

ø(aa) IN GENERAL.—The State shall first 

distribute the amount so collected (other than 

any amount described in clause (iv)) to the 

family to the extent necessary to satisfy any 

support arrearages with respect to the family 

that accrued after the family ceased to receive 

assistance from the State. 

ø(bb) REIMBURSEMENT OF GOVERNMENTS

FOR ASSISTANCE PROVIDED TO THE FAMILY.— After the application of division (aa) and 

clause (ii)(II)(aa) with respect to the amount 

so collected, the State shall retain the State 

share of the amount so collected, and pay to 

the Federal Government the Federal share (as 

defined in subsection (c)(2)) of the amount so 

collected, but only to the extent necessary to 

reimburse amounts paid to the family as assistance by the State. 

ø(cc) DISTRIBUTION OF THE REMAINDER TO

THE FAMILY.—To the extent that neither division (aa) nor division (bb) applies to the 

amount so collected, the State shall distribute 

the amount to the family. 

ø(ii) DISTRIBUTION OF ARREARAGES THAT ACCRUED

BEFORE THE FAMILY RECEIVED ASSISTANCE.— 

ø(I) PRE-OCTOBER 2000.—Except as provided in 

subclause (II), the provisions of this section as in 

242

effect and applied on the day before the date of 

the enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation 

Act of 1996 (other than subsection (b)(1) (as so in 

effect)) shall apply with respect to the distribution 

of support arrearages that— 

ø(aa) accrued before the family received assistance, and 

ø(bb) are collected before October 1, 2000. 

ø(II) POST-SEPTEMBER 2000.—Unless, based on 

the report required by paragraph (5), the Congress 

determines otherwise, with respect to the amount 

so collected on or after October 1, 2000 (or before 

such date, at the option of the State)— 

ø(aa) IN GENERAL.—The State shall first 

distribute the amount so collected (other than 

any amount described in clause (iv)) to the 

family to the extent necessary to satisfy any 

support arrearages with respect to the family 

that accrued before the family received assistance from the State. 

ø(bb) REIMBURSEMENT OF GOVERNMENTS

FOR ASSISTANCE PROVIDED TO THE FAMILY.—

After the application of clause (i)(II)(aa) and 

division (aa) with respect to the amount so 

collected, the State shall retain the State 

share of the amount so collected, and pay to 

the Federal Government the Federal share (as 

defined in subsection (c)(2)) of the amount so 

collected, but only to the extent necessary to 

reimburse amounts paid to the family as assistance by the State. 

ø(cc) DISTRIBUTION OF THE REMAINDER TO

THE FAMILY.—To the extent that neither division (aa) nor division (bb) applies to the 

amount so collected, the State shall distribute 

the amount to the family. 

ø(iii) DISTRIBUTION OF ARREARAGES THAT ACCRUED

WHILE THE FAMILY RECEIVED ASSISTANCE.—In the case 

of a family described in this subparagraph, the provisions of paragraph (1) shall apply with respect to the 

distribution of support arrearages that accrued while 

the family received assistance. 

ø(iv) AMOUNTS COLLECTED PURSUANT TO SECTION

464.—Notwithstanding any other provision of this section, any amount of support collected pursuant to section 464 shall be retained by the State to the extent 

past-due support has been assigned to the State as a 

condition of receiving assistance from the State, up to 

the amount necessary to reimburse the State for 

amounts paid to the family as assistance by the State. 

The State shall pay to the Federal Government the 

Federal share of the amounts so retained. To the extent the amount collected pursuant to section 464 exVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00246 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
243

ceeds the amount so retained, the State shall distribute the excess to the family. 

ø(v) ORDERING RULES FOR DISTRIBUTIONS.—For purposes of this subparagraph, unless an earlier effective 

date is required by this section, effective October 1, 

2000, the State shall treat any support arrearages collected, except for amounts collected pursuant to section 464, as accruing in the following order: 

ø(I) To the period after the family ceased to receive assistance. 

ø(II) To the period before the family received assistance. 

ø(III) To the period while the family was receiving assistance. 

ø(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE.—In the 

case of any other family, the State shall distribute the amount 

so collected to the family. 

ø(4) FAMILIES UNDER CERTAIN AGREEMENTS.—In the case of 

an amount collected for a family in accordance with a cooperative agreement under section 454(33), distribute the amount so 

collected pursuant to the terms of the agreement. 

ø(5) STUDY AND REPORT.—Not later than October 1, 1999, 

the Secretary shall report to the Congress the Secretary’s findings with respect to— 

ø(A) whether the distribution of post-assistance arrearages to families has been effective in moving people off of 

welfare and keeping them off of welfare; 

ø(B) whether early implementation of a pre-assistance 

arrearage program by some States has been effective in 

moving people off of welfare and keeping them off of welfare; 

ø(C) what the overall impact has been of the amendments made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 with respect to child 

support enforcement in moving people off of welfare and 

keeping them off of welfare; and 

ø(D) based on the information and data the Secretary 

has obtained, what changes, if any, should be made in the 

policies related to the distribution of child support arrearages. 

ø(6) STATE OPTION FOR APPLICABILITY.—Notwithstanding any 

other provision of this subsection, a State may elect to apply 

the rules described in clauses (i)(II), (ii)(II), and (v) of paragraph (2)(B) to support arrearages collected on and after October 1, 1998, and, if the State makes such an election, shall 

apply the provisions of this section, as in effect and applied on 

the day before the date of enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation Act 

of 1996 (Public Law 104–193, 110 Stat. 2200), other than subsection (b)(1) (as so in effect), to amounts collected before October 1, 1998.¿

(a) IN GENERAL.—Subject to subsections (d) and (e), the amounts 

collected on behalf of a family as support by a State pursuant to a 

plan approved under this part shall be distributed as follows: 

244

(1) FAMILIES RECEIVING ASSISTANCE.—In the case of a family 

receiving assistance from the State, the State shall—

(A) pay to the Federal Government the Federal share of 

the amount collected, subject to paragraph (3)(A); 

(B) retain, or pay to the family, the State share of the 

amount collected, subject to paragraph (3)(B); and 

(C) pay to the family any remaining amount. 

(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.—In the 

case of a family that formerly received assistance from the 

State: 

(A) CURRENT SUPPORT.—To the extent that the amount 

collected does not exceed the current support amount, the 

State shall pay the amount to the family. 

(B) ARREARAGES.—Except as otherwise provided in an 

election made under section 454(34), to the extent that the 

amount collected exceeds the current support amount, the 

State—

(i) shall first pay to the family the excess amount, to 

the extent necessary to satisfy support arrearages not 

assigned pursuant to section 408(a)(3); 

(ii) if the amount collected exceeds the amount required to be paid to the family under clause (i), shall—

(I) pay to the Federal Government the Federal 

share of the excess amount described in this clause, 

subject to paragraph (3)(A); and 

(II) retain, or pay to the family, the State share 

of the excess amount described in this clause, subject to paragraph (3)(B); and 

(iii) shall pay to the family any remaining amount. 

(3) LIMITATIONS.—

(A) FEDERAL REIMBURSEMENTS.—The total of the 

amounts paid by the State to the Federal Government 

under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the Federal share of the 

amount assigned with respect to the family pursuant to section 408(a)(3). 

(B) STATE REIMBURSEMENTS.—The total of the amounts 

retained by the State under paragraphs (1) and (2) of this 

subsection with respect to a family shall not exceed the 

State share of the amount assigned with respect to the family pursuant to section 408(a)(3). 

(4) FAMILIES THAT NEVER RECEIVED ASSISTANCE.—In the case 

of any other family, the State shall pay the amount collected to 

the family. 

(5) FAMILIES UNDER CERTAIN AGREEMENTS.—Notwithstanding paragraphs (1) through (3), in the case of an amount 

collected for a family in accordance with a cooperative agreement under section 454(33), the State shall distribute the 

amount collected pursuant to the terms of the agreement. 

(6) STATE FINANCING OPTIONS.—To the extent that the State’s 

share of the amount payable to a family pursuant to paragraph 

(2)(B) of this subsection exceeds the amount that the State estimates (under procedures approved by the Secretary) would have 

been payable to the family pursuant to former section 

457(a)(2)(B) (as in effect for the State immediately before the 

245

date this subsection first applies to the State) if such former section had remained in effect, the State may elect to have the payment considered a qualified State expenditure for purposes of 

section 409(a)(7). 

(7) STATE OPTION TO PASS THROUGH ADDITIONAL SUPPORT

WITH FEDERAL FINANCIAL PARTICIPATION.— (A) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.— Notwithstanding paragraph (2), a State shall not be required to pay to the Federal Government the Federal share 

of an amount collected on behalf of a family that formerly 

received assistance from the State to the extent that the 

State pays the amount to the family. 

(B) FAMILIES THAT CURRENTLY RECEIVE ASSISTANCE.—

(i) IN GENERAL.—Notwithstanding paragraph (1), in 

the case of a family that receives assistance from the 

State, a State shall not be required to pay to the Federal Government the Federal share of the excepted portion (as defined in clause (ii)) of any amount collected 

on behalf of such family during a month to the extent 

that—

(I) the State pays the excepted portion to the 

family; and 

(II) the excepted portion is disregarded in determining the amount and type of assistance provided 

to the family under such program. 

(ii) EXCEPTED PORTION DEFINED.—For purposes of 

this subparagraph, the term ‘‘excepted portion’’ means 

that portion of the amount collected on behalf of a family during a month that does not exceed $400 per 

month, or in the case of a family that includes 2 or 

more children, that does not exceed an amount established by the State that is not more than $600 per 

month. 

(8) STATES WITH DEMONSTRATION WAIVERS.—Notwithstanding the preceding paragraphs, in the case of a State that, 

on the date of enactment of this paragraph, has had in effect 

since October 1, 1997, a waiver under section 1115 permitting 

pass-through payments of child support collections—

(A) the State may continue to distribute such payments 

to families without regard to the expiration date of such 

waiver; and 

(B) the requirement under paragraph (1) to pay to the 

Federal Government the Federal share of the amount collected on behalf of a family shall not apply to the extent 

that—

(i) the State distributes such amount to the family; 

and 

(ii) such amount is disregarded in determining the 

amount and type of assistance paid to the family.ƒ(b) 

(b) CONTINUATION OF ASSIGNMENTS.—Any rights to support obligations, assigned to a State as a condition of receiving assistance 

from the State under part A and in effect on September 30, 1997 

(or such earlier date, on or after August 22, 1996, as the State may 

choose). shall remain assigned after such date.¿

(b) CONTINUATION OF ASSIGNMENTS.—

246

(1) STATE OPTION TO DISCONTINUE PRE-1997 SUPPORT ASSIGN- MENTS.—

(A) IN GENERAL.—Any rights to support obligations assigned to a State as a condition of receiving assistance from 

the State under part A and in effect on September 30, 1997 

(or such earlier date on or after August 22, 1996, as the 

State may choose), may remain assigned after such date. 

(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DIS- CONTINUATION.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant 

to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in 

accordance with subsection (a)(4). 

(2) STATE OPTION TO DISCONTINUE POST-1997 ASSIGNMENTS.—

(A) IN GENERAL.—Any rights to support obligations accruing before the date on which a family first receives assistance under part A that are assigned to a State under 

that part and in effect before the implementation date of 

this section may remain assigned after such date. 

(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DIS- CONTINUATION.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant 

to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in 

accordance with subsection (a)(4).

(c) DEFINITIONS.—As used in subsection (a): 

(1) ASSISTANCE.—The term ‘‘assistance from the State’’ 

means—

* * * * * * *

‘‘(5) CURRENT SUPPORT AMOUNT.—The term ‘‘current support 

amount’’ means, with respect to amounts collected as support on 

behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring 

the support or calculated by the State based on such order. 

* * * * * * *

SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, GARNISHMENT, AND SIMILAR PROCEEDINGS 

FOR ENFORCEMENT OF CHILD SUPPORT AND ALIMONY 

OBLIGATIONS. 

(a) * * *

* * * * * * *

(h) MONEYS SUBJECT TO PROCESS.—

(1) IN GENERAL.—Subject to paragraph (2), moneys payable 

to an individual which are considered to be based upon remuneration for employment, for purposes of this section—

(A) consist of—

* * * * * * *

(V) by the Secretary of Veterans Affairs as compensation for a service-connected disability paid 

by the Secretary to a former member of the Armed 

Forces øwho is in receipt of retired or retainer pay 

247

if the former member has waived a portion of the 

retired or retainer pay in order to receive such 

compensation;¿ , except that such compensation 

shall not be subject to withholding pursuant to 

this section for payment of alimony unless the 

former member to whom it is payable is in receipt 

of retired or retainer pay and has waived a portion 

of such pay in order to receive such compensation;

* * * * * * *

COLLECTION OF PAST-DUE SUPPORT FROM FEDERAL TAX REFUNDS

SEC. 464. (a)(1) * * * 

(2)(A) Upon receiving notice from a State agency administering 

a plan approved under this part that a named individual owes 

past-due support ø(as that term is defined for purposes of this 

paragraph under subsection (c))¿ which such State has agreed to 

collect under section 454(4)(A)(ii), and that the State agency has 

sent notice to such individual in accordance with paragraph (3)(A), 

the Secretary of the Treasury shall determine whether any 

amounts, as refunds of Federal taxes paid, are payable to such individual (regardless of whether such individual filed a tax return 

as a married or unmarried individual). If the Secretary of the 

Treasury finds that any such amount is payable, he shall withhold 

from such refunds an amount equal to such past-due support, and 

shall concurrently send notice to such individual that the withholding has been made, including in or with such notice a notification to any other person who may have filed a joint return with 

such individual of the steps which such other person may take in 

order to secure his or her proper share of the refund. The Secretary 

of the Treasury shall pay the amount withheld to the State agency, 

and the State shall pay to the Secretary of the Treasury any fee 

imposed by the Secretary of the Treasury to cover the costs of the 

withholding and any required notification. The State agency shall, 

subject to paragraph (3)(B), distribute such amount to or on behalf 

of the child to whom the support was owed in accordance with section 457. This subsection may be executed by the Secretary of the 

Department of the Treasury or his designee. 

* * * * * * * 

(B) The fee which the Secretary of the Treasury may impose 

to cover the costs of the withholding and notification may not 

exceed $25 per case submitted. 

(c)ø(1) Except as provided in paragraph (2), as used in¿ In this 

part the term ‘‘past-due support’’ means the amount of a delinquency, determined under a court order, or an order of an administrative process established under State law, for support and maintenance of a child (whether or not a minor), or of a child (whether 

or not a minor) and the parent with whom the child is living. 

ø(2) For purposes of subsection (a)(2), the term ‘‘past-due support’’ means only past-due support owed to or on behalf of a qualified child (or a qualified child and the parent with whom the child 

is living if the same support order includes support for the child 

and the parent). 

ø(3) For purposes of paragraph (2), the term ‘‘qualified child’’ 

means a child—

248

ø(A) who is a minor; or 

ø(B)(i) who, while a minor, was determined to be disabled 

under title II or XVI; and 

ø(ii) for whom an order of support is in force.¿

* * * * * * *

REQUIREMENT OF STATUTORILY PRESCRIBED PROCEDURES TO IM- PROVE EFFECTIVENESS OF CHILD SUPPORT ENFORCEMENT

SEC. 466. (a) In order to satisfy section 454(20)(A), each State 

must have in effect laws requiring the use of the following procedures, consistent with this section and with regulations of the Secretary, to increase the effectiveness of the program which the State 

administers under this part: 

* * * * * * *

(10) REVIEW AND ADJUSTMENT OF SUPPORT ORDERS UPON RE- QUEST.—

(A) 3-YEAR CYCLE.—

(i) IN GENERAL.—Procedures under which every 3 

years (or such shorter cycle as the State may determine), upon the request of either øparent, or,¿ parent 

or if there is an assignment under part A, øupon the 

request of the State agency under the State plan or of 

either parent,¿ the State shall with respect to a support order being enforced under this part, taking into 

account the best interests of the child involved—

* * * * * * *

(14) HIGH-VOLUME, AUTOMATED ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.—

(A) IN GENERAL.—Procedures under which—

(i) the State shall use high-volume automated administrative enforcement, to the same extent as used 

for intrastate cases, in response to a request made by 

another State to enforce support orders, and shall 

promptly report the results of such enforcement procedure to the requesting State; 

* * * * * * *

(iii) if the State provides assistance to another State 

pursuant to this paragraph with respect to a case, neither State shall consider the case to be transferred to 

the caseload of such other State (but the assisting 

State may establish a corresponding case based on 

such other State’s request for assistance); and 

(iv) the State shall maintain records of—

* * * * * * *

(17) FINANCIAL INSTITUTION DATA MATCHES.—

(A) IN GENERAL.—Procedures under which the State 

agency shall enter into agreements with financial institutions doing business in the State—

(i) to develop and operate, in coordination with such 

financial institutions, and the Federal Parent Locator 

Service pursuant to section 452(l) in the case of financial institutions doing business in two or more States, 

249

a data match system, using automated data exchanges 

to the maximum extent feasible, in which each such financial institution is required to provide for each calendar quarter the name, record address, social security number or other taxpayer identification number, 

and other identifying information for each noncustodial parent who maintains an account at such institution and who owes past-due support, as identified by 

the State by name and social security number or other 

taxpayer identification number; and 

(ii) in response to a notice of lien or levy issued by 

the State agency or by the Secretary under section 

452(l), encumber or surrender, as the case may be, assets held by such institution on behalf of any noncustodial parent who is subject to a child support lien 

pursuant to paragraph (4). 

(B) REASONABLE FEES.—The State agency may pay a 

reasonable fee to a financial institution for conducting the 

data match provided for in subparagraph (A)(i), not to exceed the actual costs incurred by such financial institution. 

(C) LIABILITY.—A financial institution shall not be liable 

under any Federal or State law to any person—

(i) for any disclosure of information to the State 

agency or to the Federal Parent Locator Service under 

subparagraph (A)(i); 

(ii) for encumbering or surrendering any assets held 

by such financial institution in response to a notice of 

lien or levy øissued by the State agency¿ as provided 

for in subparagraph (A)(ii); or

* * * * * * *

(19) HEALTH CARE COVERAGE.—Procedures under which—

(A) effective as provided in øsection 401(c)(3)¿ section 

401(e) of the Child Support Performance and Incentive Act 

of 1998, all child support orders enforced pursuant to this 

part øwhich include a provision for the health care coverage of the child are enforced¿ shall include a provision 

for medical support for the child to be provided by either 

or both parents, and shall be enforced, where appropriate, 

through the use of the National Medical Support Notice 

promulgated pursuant to section 401(b) of the Child Support Performance and Incentive Act of 1998 (and referred 

to in section 609(a)(5)(C) of the Employee Retirement Income Security Act of 1974 in connection with group health 

plans covered under title I of such Act, in section 

401(e)(3)(C) of the Child Support Performance and Incentive Act of 1998 in connection with State or local group 

health plans, and in section ø401(f )(5)(C)¿ section 401(f) of 

such Act in connection with church group health plans); 

(B) unless alternative coverage is allowed for in any 

order of the court (or other entity issuing the child support 

order), in any case in which a ønoncustodial¿ parent is required under the child support order to provide such 

health care coverage and the employer of such ønoncustodial¿ parent is known to the State agency—

250

(i) the State agency uses the National Medical Support Notice to transfer notice of the provision for the 

health care coverage of the child to the employer; 

(ii) within 20 business days after the date of the National Medical Support Notice, the employer is required to transfer the Notice, excluding the severable 

employer withholding notice described in section 

401(b)(2)(C) of the Child Support Performance and Incentive Act of 1998, to the appropriate plan providing 

any such health care coverage for which the child is eligible;

(iii) in any case in which the noncustodial parent is 

a newly hired employee entered in the State Directory 

of New Hires pursuant to section 453A(e), the State 

agency provides, where appropriate, the National Medical Support Notice, together with an income withholding notice issued pursuant to øsection 466(b)¿ subsection (b), within two days after the date of the entry 

of such employee in such Directory; and 

(iv) in any case in which the employment of the noncustodial parent with any employer who has received 

a National Medical Support Notice is terminated, such 

employer is required to notify the State agency of such 

termination; and 

(C) any liability of the ønoncustodial¿ obligated parent 

to such plan for employee contributions which are required 

under such plan for enrollment of the child is effectively 

subject to appropriate enforcement, unless the ønoncustodial¿ obligated parent contests such enforcement based on 

a mistake of fact. 

* * * * * * *

(f) UNIFORM INTERSTATE FAMILY SUPPORT ACT.—In order to satisfy section 454(20)(A), on and after January 1, 1998, each State 

must have in effect the Uniform Interstate Family Support Act, as 

approved by the American Bar Association on February 9, 1993, 

øand as in effect on August 22, 1996,¿ including any amendments 

officially øadopted as of such date¿ adopted as of August, 2001 by 

the National Conference of Commissioners on Uniform State Laws. 

* * * * * * *

SEC. 469A. ø42 U.S.C. 669a¿ NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL RECORDS TO STATE CHILD 

SUPPORT ENFORCEMENT AGENCIES IN CHILD SUPPORT 

CASES. 

(a) IN GENERAL.—Notwithstanding any other provision of Federal 

or State law, a financial institution shall not be liable under any 

Federal or State law to any person for disclosing any financial 

record of an individual to a State child support enforcement agency 

attempting to establish, modify, or enforce a child support obligation of such individual, or for disclosing any such record to the Federal Parent Locator Service pursuant to section 452(l) or section 

466(a)(17)(A). 

* * * * * * *

251

SEC. 469B. GRANTS TO STATES AND INDIAN TRIBES FOR ACCESS AND 

VISITATION PROGRAMS. 

(a) IN GENERAL.—The Administration for Children and Families 

shall make grants under this section to enable States and Indian 

tribes or tribal organizations to establish and administer programs 

to support and facilitate noncustodial parents’ access to and visitation of their children, by means of activities including mediation 

(both voluntary and mandatory), counseling, education, development of parenting plans, visitation enforcement (including monitoring, supervision and neutral drop-off and pickup), and development of guidelines for visitation and alternative custody arrangements. 

ø(b) AMOUNT OF GRANT.—The amount of the grant to be made 

to a State under this section for a fiscal year shall be an amount 

equal to the lesser of—

ø(1) 90 percent of State expenditures during the fiscal year 

for activities described in subsection (a); or 

ø(2) the allotment of the State under subsection (c) for the 

fiscal year.¿

(b) AMOUNT OF GRANTS.— 

(1) GRANTS TO STATES.—The amount of the grant to be made 

to a State under this section for a fiscal year shall be an 

amount equal to the lesser of— 

(A) 90 percent of State expenditures during the fiscal year 

for activities described in subsection (a); or 

(B) the allotment of the State under subsection (c) for the 

fiscal year. 

(2) GRANTS TO INDIAN TRIBES.—An Indian tribe or tribal organization operating a program under section 455 that has operated such program throughout the preceding fiscal year and 

has an application under this section approved by the Secretary 

shall receive a grant under this section for a fiscal year in an 

amount equal to the allotment of such Indian tribe or tribal organization under subsection (c)(2) for the fiscal year.

ø(c) ALLOTMENTS TO STATES.— 

ø(1) IN GENERAL.—The allotment of a State for a fiscal year 

is the amount that bears the same ratio to $10,000,000 for 

grants under this section for the fiscal year as the number of 

children in the State living with only 1 biological parent bears 

to the total number of such children in all States. 

ø(2) MINIMUM ALLOTMENT.—The Administration for Children 

and Families shall adjust allotments to States under paragraph (1) as necessary to ensure that no State is allotted less 

than— 

ø(A) $50,000 for fiscal year 1997 or 1998; or 

ø(B) $100,000 for any succeeding fiscal year.¿

(c) ALLOTMENTS.— 

(1) ALLOTMENTS TO STATES.— 

(A) IN GENERAL.—Subject to the subparagraph (C), the 

allotment of a State for a fiscal year is the amount that 

bears the same ratio to the amount specified in subparagraph (B) for such fiscal year as the number of children in 

the State living with only 1 parent bears to the total number of such children in all States. 

252

(B) AMOUNT AVAILABLE FOR ALLOTMENT.—For purposes 

of subparagraph (A), the amount specified in this subparagraph is the following amount, reduced by the total allotments to Indian tribes or tribal organizations in accordance 

with paragraph (2): (i) $12,000,000 for fiscal year 2006. 

(ii) $14,000,000 for fiscal year 2007. 

(iii) $16,000,000 for fiscal year 2008. 

(iv) $20,000,000 for fiscal year 2009 and each succeeding fiscal year. 

(C) MINIMUM STATE ALLOTMENT.—The Secretary shall 

adjust allotments to States under subparagraph (A) as necessary to ensure that no State is allotted less than— (i) $120,000 for fiscal year 2006; 

(ii) $140,000 for fiscal year 2007; 

(iii) $160,000 for fiscal year 2008; and 

(iv) $180,000 for fiscal year 2009 and each succeeding fiscal year. 

(2) ALLOTMENTS TO INDIAN TRIBES.— 

(A) IN GENERAL.—Subject to subparagraph (C), the allotment of an Indian tribe or tribal organization described in 

subsection (b)(2) for a fiscal year is an amount that bears 

the same ratio to the amount specified in subparagraph (B) 

for such fiscal year as the number of children in the Indian 

tribe or tribal organization living with only 1 parent bears 

to the total number of such children in all Indian tribes 

and tribal organizations eligible to receive grants under 

this section for such year. 

(B) AMOUNT AVAILABLE FOR ALLOTMENT.—For purposes 

of subparagraph (A), the amount available under this subparagraph is an amount, deducted from the amount specified in paragraph (1)(B), not to exceed— 

(i) $250,000 for fiscal year 2006; 

(ii) $600,000 for fiscal year 2007; 

(iii) $800,000 for fiscal year 2008; and 

(iv) $1,670,000 for fiscal year 2009 and each succeeding year. 

(C) MINIMUM AND MAXIMUM TRIBAL ALLOTMENT.—The 

Secretary shall adjust allotments to Indian tribes and tribal organizations under subparagraph (A) as necessary to 

ensure that no Indian tribe or tribal organization is allotted, for a fiscal year, an amount which is less than $10,000 

or more than the minimum State allotment for such fiscal 

year.

(d) NO SUPPLANTATION OF STATE EXPENDITURES FOR SIMILAR ACTIVITIES.—A State to which a grant is made under this section may 

not use the grant to supplant expenditures by the State for activities specified in subsection (a), but shall use the grant to supplement such expenditures at a level at least equal to the level of such 

expenditures for fiscal year 1995. 

ø(e) STATE ADMINISTRATION.—Each State to which a grant is 

made under this section—

ø(1) may administer State programs funded with the grant, 

directly or through grants to or contracts with courts, local 

public agencies, or nonprofit private entities; 

253

ø(2) shall not be required to operate such programs on a 

statewide basis; and 

ø(3) shall monitor, evaluate, and report on such programs in 

accordance with regulations prescribed by the Secretary.¿

(e) ADMINISTRATION.— (1) GRANTS TO STATES.—Each State to which a grant is made 

under this section—

(A) may administer State programs funded with the 

grant, directly or through grants to or contracts with 

courts, local public agencies, or nonprofit private entities; 

and 

(B) shall not be required to operate such programs on a 

statewide basis. 

(2) GRANTS TO STATES OR INDIAN TRIBES.—Each State or Indian tribe or tribal organization to which a grant is made 

under this section shall monitor, evaluate, and report on such 

programs in accordance with regulations prescribed by the Secretary.

PART E—FEDERAL PAYMENTS FOR FOSTER CARE AND ADOPTION

ASSISTANCE

PURPOSE: APPROPRIATION

SEC. 470. * * *

* * * * * * *

FOSTER CARE MAINTENANCE PAYMENTS PROGRAM

SEC. 472. (a) Each State with a plan approved under this part 

shall make foster care maintenance payments (as defined in section 

475(4)) under this part with respect to a child who would have met 

the requirements of section 406(a) or of section 407 (as such sections were in effect on July 16, 1996) but for his removal from the 

home of a relative (specified in section 406(a)), if—

(1) the removal from the home occurred pursuant to a voluntary placement agreement entered into by the child’s parent 

or legal guardian, or was the result of a judicial determination 

to the effect that continuation therein would be contrary to the 

welfare of such child and (effective October 1, 1983) that reasonable efforts of the type described in section 471(a)(15) for a 

child have been made; 

(2) such child’s placement and care are the responsibility of 

(A) the State agency administering the State plan approved 

under section 471, øor (B)¿ (B) any other public agency with 

whom the State agency administering or supervising the administration of the State plan approved under section 471 has 

made an agreement which is still in effect, or (C) an Indian 

tribe or tribal organization (as defined in section 479B(e)) or an 

intertribal consortium if the Indian tribe, tribal organization, 

or consortium (i) is operating a program pursuant to section 

479B, (ii) has a cooperative agreement with a State pursuant to 

section 479B(c), or (iii) submits to the Secretary a description 

of the arrangements (jointly developed or developed in consultation with the State) made by the Indian tribe, tribal organization, or consortium for the payment of funds and the provision 

254

of the child welfare services and protections required by this 

title 

* * * * * * *

TITLE V—MATERNAL AND CHILD 

HEALTH SERVICES BLOCK GRANT 

* * * * * * *

SEPARATE PROGRAM FOR ABSTINENCE EDUCATION

SEC. 510. (a) For the purpose described in subsection (b), the Secretary shall, for fiscal year 1998 and each subsequent fiscal year, 

allot to each State which has transmitted øan application for the 

fiscal year under section 505(a)¿, for the fiscal year, an application 

under section 505(a), and an application under this section (in such 

form and meeting such terms and conditions as determined appropriate by the Secretary), an amount equal to the product of—

(1) the amount appropriated in subsection (d) for the fiscal 

year; and

ƒ(2) the percentage determined for the State under section 

502(c)(1)(B)(ii).≈

(2) the percentage described in section 502(c)(1)(B)(ii) that 

would be determined for the State under section 502(c) if such 

determination took into consideration only those States that 

transmitted both such applications for such fiscal year.

(b)(1) The purpose of an allotment under subsection (a) to a State 

is to enable the State to provide abstinence education, and at the 

option of the State, where appropriate, mentoring, counseling, and 

adult supervision to promote abstinence from sexual activity, with 

a focus on those groups which are most likely to bear children outof-wedlock. 

* * * * * * *

(d) For the purpose of allotments under subsection (a), there is 

appropriated, out of any money in the Treasury not otherwise appropriated, an additional $50,000,000 for each of the fiscal years 

1998 through ø2002¿ 2010. The appropriation under the preceding 

sentence for a fiscal year is made on October 1 of the fiscal year.

(e)(1) With respect to allotments under subsection (a) for fiscal 

year 2006 and subsequent fiscal years, the amount of any allotment 

to a State for a fiscal year that the Secretary determines will not 

be expended to carry out a program under this section during such 

fiscal year or the succeeding fiscal year shall be available for reallotment from time to time during such fiscal years on such dates as 

the Secretary may fix, to other States that the Secretary determines—

(A) require amounts in excess of amounts previously allotted 

under subsection (a) to carry out a program under this section; 

and 

(B) will expend such excess amounts during such fiscal years. 

(2) Reallotments under paragraph (1) shall be made on the basis 

of such States’ applications under this section, after taking into consideration the population of low-income children in each such State 

as compared with the population of low-income children in all such 

255

States with respect to which a determination under paragraph (1) 

has been made by the Secretary. 

(3) Any amount reallotted under paragraph (1) to a State is 

deemed to be part of its allotment under subsection (a).

TITLE XI—GENERAL PROVISIONS, PEER 

REVIEW, AND ADMINISTRATIVE SIMPLIFICATION 

PART A—GENERAL PROVISIONS

* * * * * * * 

ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, GUAM, 

AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS

SEC. 1108. (a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY.—

(1) IN GENERAL.—Notwithstanding any other provision of 

this Act (except for paragraph (2) of this subsection), the total 

amount certified by the Secretary of Health and Human Services under titles I, X, XIV, and XVI, under parts A and E of 

title IV, and under subsection (b) of this section, for payment 

to any territory for a fiscal year shall not exceed the ceiling 

amount for the territory for the fiscal year. 

(2) CERTAIN PAYMENTS DISREGARDED.—øParagraph (1)¿

(A) IN GENERAL.—Paragraph (1) of this subsection shall 

be applied without regard to any payment made under section 403(a)(2), 403(a)(4), 403(a)(5), ø406, or 413(f)¿

‘‘418(a)(4)(B), 473A, or, subject to clause (ii) of subparagraph (B), payments to Puerto Rico described in clause (i) 

of that subparagraph’’ before the period; and

(B) CERTAIN PAYMENTS TO PUERTO RICO.—

(i) PAYMENTS DESCRIBED.—For purposes of subparagraph 

(A), payments described in this subparagraph are payments 

made to Puerto Rico under section 474 for each of fiscal 

years 2007 through 2010 that exceed the total amount of 

payments made to Puerto Rico under that section for fiscal 

year 2003. 

(ii) LIMITATION.—The total amount of payments to Puerto 

Rico described in clause (i) that are disregarded under subparagraph (A) may not exceed $6,250,000 for each of fiscal 

years 2007 through 2010.

(b) ENTITLEMENT TO MATCHING GRANT.—

(1) IN GENERAL.—Each territory shall be entitled to receive 

from the Secretary for each fiscal year a grant in an amount 

equal to 75 percent of the amount (if any) by which—

(A) the total expenditures of the territory during the fiscal year under the territory programs funded under parts 

A and E of title IV, including any amount paid to the State 

under part A of title IV that is transferred in accordance 

with section 404(d) and expended under the program to 

which transferred; exceeds 

(B) the sum of—

256

(i) the amount of the family assistance grant payable to the territory without regard to section 409; and 

(ii) the total amount expended by the territory during fiscal year 1995 pursuant to parts A and F of title 

IV (as so in effect), other than for child care. 

(2) APPROPRIATION.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated for fiscal years ø1997 through 2003¿ 2006 through 

2010, such sums as are necessary for grants under this paragraph. 

* * * * * * *

DEMONSTRATION PROJECTS

SEC. 1130. (a) AUTHORITY TO APPROVE DEMONSTRATION

PROJECTS.—

(1) IN GENERAL.—The Secretary may authorize States to conduct demonstration projects pursuant to this section which the 

Secretary finds are likely to promote the objectives of part B 

or E of title IV. 

(2) LIMITATION.—The Secretary may authorize not more than 

10 demonstration projects under paragraph (1) in each of fiscal 

years 1998 through ø2003¿ 2010. 

(3) CERTAIN TYPES OF PROPOSALS REQUIRED TO BE CONSIDERED.—

* * * * * * *

(b) WAIVER AUTHORITY.—The Secretary may waive compliance 

with any requirement of part B or E of title IV which (if applied) 

would prevent a State from carrying out a demonstration project 

under this section or prevent the State from effectively achieving 

the purpose of such a project, except that the Secretary may not 

waive—

(1) any provision of section 427 (as in effect before April 1, 

1996), section ø422(b)(9)¿ 422(b)(10) (as in effect after such 

date), or section 479; or 

* * * * * * *

INCOME AND ELIGIBILITY VERIFICATION SYSTEM 60

SEC. 1137 * * *

* * * * * * *

(b) The programs which must participate in the income and eligibility verification system are—

(1) any State program funded under part A of title IV of this 

Act but only with respect to applicants for, or recipients of, assistance (as defined in section 419(6)) under such program; 

* * * * * * *

TITLE XVI—GRANTS TO STATES FOR 

AID TO THE AGED, BLIND, OR DISABLED 

* * * * * * *

257

ADMINISTRATION

SEC. 1633. (a) Subject to subsection (b), the Commissioner of Social Security may make such administrative and other arrangements (including arrangements for the determination of blindness 

and disability under section 1614(a)(2) and (3) in the same manner 

and subject to the same conditions as provided with respect to disability determinations under section 221) as may be necessary or 

appropriate to carry out the Commissioner’s functions under this 

title. 

(b) In determining, for purposes of this title, whether an individual is blind, there shall be an examination of such individual by 

a physician skilled in the diseases of the eye or by an optometrist, 

whichever the individual may select. 

* * * * * * *

(e)(1) The Commissioner of Social Security shall review determinations, made by State agencies pursuant to subsection (a) in 

connection with applications for benefits under this title on the 

basis of blindness or disability, that individuals who have attained 

18 years of age are blind or disabled. Any review by the Commissioner of Social Security of a State agency determination under this 

paragraph shall be made before any action is taken to implement 

the determination. 

(2)(A) In carrying out paragraph (1), the Commissioner of Social 

Security shall review—

(i) with respect to fiscal year 2006, at least 25 percent of all 

determinations referred to in paragraph (1) that are made in 

such fiscal year; and 

(ii) with respect to each of fiscal years 2006 through 2015, at 

least 50 percent of all such determinations that are made in 

each such fiscal year. 

(B) In conducting reviews pursuant to subparagraph (A), the 

Commissioner of Social Security shall, to the extent feasible, select 

for review those determinations which the Commissioner of Social 

Security identifies as being the most likely to be incorrect. 

* * * * * * *

TITLE XIX—GRANTS TO STATES FOR 

MEDICAL ASSISTANCE PROGRAMS 

* * * * * * *

STATE PLANS FOR MEDICAL ASSISTANCE

SEC. 1902. (a) A State plan for medical assistance must—

* * * * * * *

(e)(1)(A) Notwithstanding any other provision of this title, effective January 1, 1974, subject to subparagraph (B) each State plan 

approved under this title must provide that each family which was 

receiving aid pursuant to a plan of the State approved under part 

A of title IV in at least 3 of the 6 months immediately preceding 

the month in which such family became ineligible for such aid because of increased hours of, or increased income from, employment, 

shall, while a member of such family is employed, remain eligible 

258

for assistance under the plan approved under this title (as though 

the family was receiving aid under the plan approved under part 

A of title IV) for 4 calendar months beginning with the month in 

which such family became ineligible for aid under the plan approved under part A of title IV because of income and resources or 

hours of work limitations contained in such plan. 

(B) Subparagraph (A) shall not apply with respect to families 

that cease to be eligible for aid under part A of title IV during the 

period beginning on April 1, 1990, and ending on øSeptember 30, 

2003¿, the last date (if any) on which section 1925 applies under 

subsection (i) of that section. During such period, for provisions relating to extension of eligibility for medical assistance for certain 

families who have received aid pursuant to a State plan approved 

under part A of title IV and have earned income, see section 1925. 

* * * * * * *

(55) provide for receipt and initial processing of applications 

of individuals for medical assistance under subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX) and under section 1931—

* * * * * * *

EXTENSION OF ELIGIBILITY FOR MEDICAL ASSISTANCE

SEC. 1925. (a) INITIAL 6-MONTH EXTENSION.—

(1) REQUIREMENT.—Notwithstanding any other provision of 

this title, but subject to subsection (h), each State plan approved under this title must provide that each family which 

was receiving aid pursuant to a plan of the State approved 

under part A of title IV in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative (as defined in subsection (e)) 

or because of section 402(a)(8)(B)(ii)(II) (providing for a timelimited earned income disregard), shall, subject to paragraph 

(3) and without any re-application for benefits under the plan, 

remain eligible for assistance under the plan approved under 

this title during the immediately succeeding 6-month period in 

accordance with this subsection. 

(2) NOTICE OF BENEFITS.—Each State, in the notice of termination of aid under part A of title IV sent to a family meeting 

the requirements of paragraph (1)—

(A) shall notify the family of its right to extended medical assistance under this subsection and include in the notice a description of the reporting requirement of subsection (b)(2)(B)(i) and of the circumstances (described in 

paragraph (3)) under which such extension may be terminated; and 

(B) shall include a card or other evidence of the family’s 

entitlement to assistance under this title for the period 

provided in this subsection. 

* * * * * * *

Each State shall provide, to families whose aid under part A 

or E of title IV has terminated but whose eligibility for medical 

assistance under this title continues, written notice of their onVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00262 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
259

going eligibility for such medical assistance. If a State makes 

a determination that any member of a family whose aid under 

part A or E of title IV is being terminated is also no longer eligible for medical assistance under this title, the notice of such 

determination shall be supplemented by a 1-page notification 

form describing the different ways in which individuals and 

families may qualify for such medical assistance and explaining that individuals and families do not have to be receiving 

aid under part A or E of title IV in order to qualify for such 

medical assistance. Such notice shall further be supplemented 

by information on how to apply for child health assistance 

under the State children’s health insurance program under title 

XXI and how to apply for medical assistance under this title. 

* * * * * * *

(b) ADDITIONAL 6-MONTH EXTENSION.—

(1) REQUIREMENT.—Notwithstanding any other provision of 

this title, but subject to subsection (h), each State plan approved under this title shall provide that the State shall offer 

to each family, which has received assistance during the entire 

6-month period under subsection (a) and which, at the option 

of a State, meets the requirement of paragraph (2)(B)(i), in the 

last month of the period the option of extending coverage 

under this subsection for the succeeding 6-month period, subject to paragraph (3). 

(2) NOTICE AND REPORTING REQUIREMENTS.—

(A) NOTICES.—Subject to subparagraph (c)

* * * * * * *

(B) REPORTING REQUIREMENTS.—Subject to subparagraph (c)

(i) DURING INITIAL EXTENSION PERIOD.—Each State 

shall require (as a condition for additional extended 

assistance under this subjection) that a family receiving extended assistance under subsection (a) report to 

the State, not later than the 21st day of the 4th month 

in the period of extended assistance under subsection 

(a), on the family’s gross monthly earnings and on the 

family’s costs for such child care as is necessary for 

the employment of the caretaker relative in each of 

the first 3 months of that period. A State may permit 

such additional extended assistance under this subsection notwithstanding a failure to report under this 

clause if the family has established, to the satisfaction 

of the State, good cause for the failure to report on a 

timely basis. 

* * * * * * *

(C) STATE OPTION TO WAIVE NOTICE AND REPORTING REQUIREMENTS.—A State may waive some or all of the reporting requirements under clauses (i) and (ii) of subparagraph 

(B). Insofar as it waives such a reporting requirement, the 

State need not provide for a notice under subparagraph (A) 

relating to such requirement.

(3) TERMINATION OF EXTENSION.—

260

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

extension of assistance during the 6-month period described in paragraph (1) to a family shall terminate (during the period) as follows: 

(i) NO DEPENDENT CHILD.—The extension shall terminate at the close of the first month in which the 

family ceases to include a child, whether or not the 

child is (or would if need be) a dependent child under 

part A of title IV. 

* * * * * * *

(iii) QUARTERLY INCOME REPORTING AND TEST.—The 

extension under this subsection shall terminate at the 

close of the 1st or 4th month of the 6-month period if 

the State has not waived under paragraph (2)(C) the 

reporting requirement with respect to such month 

under paragraph (2)(B) and if—

* * * * * * *

(c) STATE OPTION OF UP TO 12 MONTHS OF ADDITIONAL ELIGI- BILITY.—

(1) IN GENERAL.—Notwithstanding any other provision of this 

title, each State plan approved under this title may provide, at 

the option of the State, that the State shall offer to each family 

which received assistance during the entire 6-month period 

under subsection (b) and which meets the applicable requirement of paragraph (2), in the last month of the period the option of extending coverage under this subsection for the succeeding period not to exceed 12 months. 

(2) INCOME RESTRICTION.—The option under paragraph (1) 

shall not be made available to a family for a succeeding period 

unless the State determines that the family’s average gross 

monthly earnings (less such costs for such child care as is necessary for the employment of the caretaker relative) as of the 

end of the 6-month period under subsection (b) does not exceed 

185 percent of the official poverty line (as defined by the Office 

of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation 

Act of 1981) applicable to a family of the size involved. 

(3) APPLICATION OF EXTENSION RULES.—The provisions of 

paragraphs (2), (3), (4), and (5) of subsection (b) shall apply to 

the extension provided under this subsection in the same manner as they apply to the extension provided under subsection 

(b)(1), except that for purposes of this subsection—

(A) any reference to a 6-month period under subsection 

(b)(1) is deemed a reference to the extension period provided 

under paragraph (1) and any deadlines for any notices or 

reporting and the premium payment periods shall be modified to correspond to the appropriate calendar quarters of 

coverage provided under this subsection; and 

(B) any reference to a provision of subsection (a) or (b) is 

deemed a reference to the corresponding provision of subsection (b) or of this subsection, respectively.

ø(c)¿ (d) APPLICABILITY IN STATES AND TERRITORIES.—

(1) STATES OPERATING UNDER DEMONSTRATION PROJECTS.—In 

the case of any State which is providing medical assistance to 

261

its residents under a waiver granted under section 1115(a), the 

Secretary shall require the State to meet the requirements of 

this section in the same manner as the State would be required to meet such requirement if the State had in effect a 

plan approved under this title. 

(2) INAPPLICABILITY IN COMMONWEALTHS AND TERRITORIES.—

The provisions of this section shall only apply to the 50 States 

and the District of Columbia. 

ø(d)¿ (e) GENERAL DISQUALIFICATION FOR FRAUD.—

(1) INELIGIBILITY FOR AID.—This section shall not apply to an 

individual who is a member of a family which has received aid 

under part A of title IV if the State makes a finding that, at 

any time during the last 6 months in which the family was receiving such aid before otherwise being provided extended eligibility under this section, the individual was ineligible for 

such aid because of fraud. 

(2) GENERAL DISQUALIFICATIONS.—For additional provisions 

relating to fraud and program abuse, see sections 1128, 1128A, 

and 1128B. 

ø(e)¿ (f) CARETAKER RELATIVE DEFINED.—In this section, the 

term ‘‘caretaker relative’’ has the meaning of such term as used in 

part A of title IV.

(g) ADDITIONAL PROVISIONS.—

(1) COLLECTION AND REPORTING OF PARTICIPATION INFORMATION.—Each State shall—

(A) collect and submit to the Secretary, in a format specified by the Secretary, information on average monthly enrollment and average monthly participation rates for adults 

and children under this section; and 

(B) make such information publicly available. 

Such information shall be submitted under subparagraph (A) 

at the same time and frequency in which other enrollment information under this title is submitted to the Secretary. Using 

such information, the Secretary shall submit to Congress annual reports concerning such rates. 

(2) COORDINATION WITH ADMINISTRATION FOR CHILDREN AND

FAMILIES.—The Administrator of the Centers for Medicare & 

Medicaid Services, in carrying out this section, shall work with 

the Assistant Secretary for the Administration for Children and 

Families to develop guidance or other technical assistance for 

States regarding best practices in guaranteeing access to transitional medical assistance under this section. 

‘‘(h) PROVISIONS OPTIONAL FOR STATES THAT EXTEND COVERAGE

TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY.—

A State may meet (but is not required to meet) the requirements of 

subsections (a) and (b) if it provides for medical assistance under 

section 1931 to families (including both children and caretaker relatives) the average gross monthly earning of which (less such costs 

for such child care as is necessary for the employment of a caretaker 

relative) is at or below a level that is at least 185 percent of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the 

Omnibus Budget Reconciliation Act of 1981) applicable to a family 

of the size involved.

262

ø(f)¿ (i) SUNSET.—This section shall not apply with respect to 

families that cease to be eligible for aid under part A of title IV 

after September 30, ø2003¿ 2010. 

* * * * * * *

TITLE XX—BLOCK GRANTS TO STATES 

FOR SOCIAL SERVICES 

* * * * * * *

PURPOSES OF TITLE; AUTHORIZATION OF APPROPRIATIONS

SEC. 2001. For the purposes of consolidating Federal assistance 

to States for social services into a single grant, increasing State 

flexibility in using social services grants, and encouraging each 

state, as far as practicable under the conditions in that State, to 

furnish services directed at the goals of—

* * * * * * *

ALLOTMENTS

SEC. 2003. * * * 

* * * * * * *

(c) The amount specified for purposes of subsections (a) and (b) 

shall be—

(1) $2,400,000,000 for the fiscal year 1982; 

(2) $2,450,000,000 for the fiscal year 1983; 

(3) $2,700,000,000 for the fiscal years 1984, 1985, 1986, 

1987, and 1989; 

(4) $2,750,000,000 for the fiscal year 1988; 

(5) $2,800,000,000 for each of the fiscal years 1990 through 

1995; 

(6) $2,381,000,000 for the fiscal year 1996; 

(7) $2,380,000,000 for the fiscal year 1997; 

(8) $2,299,000,000 for the fiscal year 1998; 

(9) $2,380,000,000 for the fiscal year 1999; 

(10) $2,380,000,000 for the fiscal year 2000; and 

(11) $1,700,000,000 for the fiscal year 2001 and each fiscal 

year thereafter, except that with respect to each of fiscal years 2006 through 2010, the amount shall be $1,900,000,000’’ after 

‘‘thereafter’’. 

* * * * * * *

CONSOLIDATED APPROPRIATIONS ACT, 2005

* * * * * * *

DIVISION H—TRANSPORTATION, TREASURY, INDEPENDENT 

AGENCIES, AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2005

* * * * * * *

263

Title VI—General Provisions 

* * * * * * *

SEC. 643. øSection 653(j) of title 42, United States Code, is 

amended by adding at the end the following new paragraph¿ Section 453(j) of the Social Security Act (42 U.S.C. 653(j) is amended 

by adding at the end the following new paragraph: 

* * * * * * *

‘‘(7) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST

IN FEDERAL DEBT COLLECTION.—

* * * * * * *

A State may, at its option, also apply the previous sentence in the 

case of a family that was receiving such aid for fewer than 3 

months, or that had applied for and was eligible for such aid for 

fewer than 3 months, during the 6 immediately preceding months 

described in such sentence.

FOOD STAMP ACT OF 1977

* * * * * * *

ELIGIBLE HOUSEHOLDS

SEC. 5. * * *

(g)(1) The Secretary shall prescribe the types and allowable 

amounts of financial resources (liquid and nonliquid assets) an eligible household may own, and shall, in so doing, assure that a 

household otherwise eligible to participate in the food stamp program will not be eligible to participate if its resources exceed 

$2,000, or, in the case of a household which consists of or includes 

an elderly or disabled member, if its resources exceed $3,000. 

(2) INCLUDED ASSETS.—

(D) ALTERNATIVE VEHICLE ALLOWANCE.—øIf the vehicle 

allowance¿

(i) IN GENERAL.—If the vehicle allowance standards 

that a State agency uses to determine eligibility for assistance under the State program funded under part A 

of title IV of the Social Security Act (42 U.S.C. 601 et 

seq.) would result in a lower attribution of resources 

to certain households than under subparagraph 

(B)(iv), in lieu of applying subparagraph (B)(iv), the 

State agency may elect to apply the State vehicle allowance standards. 

(ii) DEFINITION OF ASSISTANCE.—In clause (i), the 

term ‘‘assistance’’ shall have the meaning given such 

term in section 260.31 of title 45 of the Code of Federal Regulations, as in effect on June 1, 2002. 

* * * * * * *

INTERNAL REVENUE CODE OF 1986

* * * * * * *

264

CHAPTER 1—NORMAL TAXES AND SURTAXES 

* * * * * * *

Sec. 21. Expenses for household and dependent care services necessary for gainful employment. 

(a) Allowance of credit. 

* * * * * * *

(b) Definitions of qualifying individual and employment-related expenses. 

For purposes of this section—

* * * * * * *

(1) Qualifying individual. The term ‘‘qualifying individual’’ 

means—

(A) a dependent of the taxpayer (as defined in section 

152(a)(1)) who has not attained age 13, 

(B) a dependent of the taxpayer (as defined in section 152, 

determined without regard to subsections (b)(1), (b)(2), and 

(d)(1)(B)) who is physically or mentally incapable of caring for 

himself or herself and who has the same principal place of 

abode as the taxpayer for more than one-half of such taxable 

year, or 

(C) the spouse of the taxpayer, if the spouse is physically or 

mentally incapable of caring for himself or herself and who has 

the same principal place of abode as the taxpayer for more 

than one-half of such taxable year. 

* * * * * * *

Sec. 24. Child tax credit. 

(a) Allowance of credit. 

* * * * * * *

(b) Limitation based on adjusted gross income. 

(1) In general. The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each 

$1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of 

the preceding sentence, the term ‘‘modified adjusted gross income’’ 

means adjusted gross income increased by any amount excluded 

from gross income under øsection 911, 931, or 933¿ section 931 or 

933.

* * * * * * *

(f) TAXABLE YEAR MUST BE FULL TAXABLE YEAR.—

* * * * * * *

(g) Denial of Credit for Individuals Electing Section 911. 

No credit shall be allowed under this section for any taxable year 

to a taxpayer who claims the benefits of section 911 (relating to citizens or residents living abroad) for such taxable year.

* * * * * * *

Sec. 32. Earned income. 

(a) Allowance of credit. 

* * * * * * *

(c) Definitions and special rules. 

For purposes of this section—

265

(1) Eligible individual. 

(A) In general. The term ‘‘eligible individual’’ means—

* * * * * * *

(B) Qualifying child ineligible. If an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer 

beginning in a calendar year, such individual shall not be 

treated as an eligible individual for any taxable year of such 

individual beginning in such calendar year. The preceding sentence shall not apply with respect to any individual who is a 

qualifying child of 1 or more brothers, sisters, stepbrothers, and 

stepsisters who are also qualifying children of such individual 

if among all such qualifying children, such individual has the 

highest adjusted gross income.

ø(m) Identification numbers. 

øSolely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number issued 

to an individual by the Social Security Administration (other than 

a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates to clause (II) of section 

205(c)(2)(B)(i) of the Social Security Act).¿

(m) Identification numbers.

Solely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number assigned by the Social Security Administration—

(1) to a citizen of the United States, or 

(2) to an individual pursuant to subclause (I) (or that portion 

of subclause (III) that relates to subclause (I)) of section 

205(c)(2)(B)(i) of the Social Security Act. 

* * * * * * *

Sec. 152. Dependent defined. 

(a) In general. 

* * * * * * *

(c) Qualifying child. 

For purposes of this section—

(1) In general. The term ‘‘qualifying child’’ means, with respect 

to any taxpayer for any taxable year, an individual—

* * * * * * *

ø(4) Special rule relating to 2 or more claiming qualifying 

child. 

ø(A) In general. Except as provided in subparagraph (B), if 

(but for this paragraph) an individual may be and is claimed 

as a qualifying child by 2 or more taxpayers for a taxable year 

beginning in the same calendar year, such individual shall be 

treated as the qualifying child of the taxpayer who is—

ø(i) a parent of the individual, or 

ø(ii) if clause (i) does not apply, the taxpayer with the 

highest adjusted gross income for such taxable year. 

ø(B) More than 1 parent claiming qualifying child. If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—

ø(i) the parent with whom the child resided for the longest period of time during the taxable year, or 

266

ø(ii) if the child resides with both parents for the same 

amount of time during such taxable year, the parent with 

the highest adjusted gross income.¿

(4) Special rules for claiming qualifying child. 

(A) Rules involving parents. 

(i) In general. A taxpayer other than a parent of an individual may not claim such individual as a qualifying child 

for any taxable year beginning in a calendar year if—

(I) a parent is eligible to claim and claims such individual as a qualifying child for any taxable year beginning in such calendar year, or 

(II) the taxpayer has a lower adjusted gross income 

than any parent who may claim such individual as a 

qualifying child for any taxable year beginning in such 

calendar year. 

(ii) More than 1 parent claiming qualifying child. If the 

parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying 

child of—

(I) the parent with whom the child resided for the 

longest period of time during the taxable year, or 

(II) if the child resides with both parents for the 

same amount of time during such taxable year, the 

parent with the highest adjusted gross income. 

(B) Rule for 2 or more nonparents claiming qualifying child. 

If an individual may be and is claimed as a qualifying 

child by 2 or more taxpayers, neither of whom is a parent 

of the individual, for a taxable year beginning in the same 

calendar year, such individual shall be treated as the 

qualifying child of the taxpayer with the highest adjusted 

gross income for such taxable year.

* * * * * * *

Sec. 223. Health savings accounts. 

(a) Deduction allowed. 

* * * * * * *

(d) Health savings account. 

For purposes of this section—

(1) In general. The term ‘‘health savings account’’ means a trust 

created or organized in the United States as a health savings account exclusively for the purpose of paying the qualified medical 

expenses of the account beneficiary, but only if the written governing instrument creating the trust meets the following requirements: 

* * * * * * *

(2) Qualified medical expenses. 

(A) In general. The term ‘‘qualified medical expenses’’ means, 

with respect to an account beneficiary, amounts paid by such 

beneficiary for medical care (as defined in section 213(d) for 

such individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to 

subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such indiVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00270 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
267

vidual, but only to the extent such amounts are not compensated for by insurance or otherwise. 

* * * * * * *

CHAPTER 43—QUALIFIED PENSION, ETC., PLANS 

* * * * * * *

Sec. 4980B. Failure to satisfy continuation coverage requirements of group 

health plans. 

(a) General rule. 

* * * * * * *

(f) Continuation coverage requirements of group health 

plans. 

(1) In general. * * *

* * * * * * *

(6) Notice requirement. In accordance with regulations prescribed by the Secretary—

(A) * * *

* * * * * * *

(D) The plan administrator shall notify—

(i) in the case of a qualifying event described in subparagraph (A), (B), (D), or (F) of paragraph (3), any qualified 

beneficiary with respect to such event, øand¿

(ii) in the case of a qualifying event described in subparagraph (C) or (E) of paragraph (3) where the covered 

employee notifies the plan administrator under subparagraph (C), any qualified beneficiary with respect to such 

event, and

(iii) in any case in which the qualifying event with respect to which notice to a qualified beneficiary is required 

by clause (i) or (ii) is a qualifying event with respect to the 

parent of a qualified beneficiary who is an alternative recipient under a qualified medical child support order (as 

such terms are defined in section 609(a)(2) of the Employee 

Retirement Income Security Act of 1974), the State agency 

administering the program under part D of title IV of the 

Social Security Act which issued, or is authorized to enforce, such order,

of such beneficiary’s rights under this subsection. 

* * * * * * *

CHAPTER 65.—ABATEMENTS, CREDITS, AND REFUNDS 

* * * * * * *

Sec. 6402. Authority to make credits or refunds. 

* * * * * * *

(C) OFFSET OF PAST-DUE SUPPORT AGAINST OVERPAYMENTS.—

The amount of any overpayment to be refunded to the person making the overpayment shall be reduced by the amount of any pastdue support (as defined in section 464(c) of the Social Security Act) 

owed by that person of which the Secretary has been notified by 

a State in accordance with section 464 of øthe Social Security Act¿

such Act. The Secretary shall remit the amount by which the overVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00271 Fmt 6659 Sfmt 6602 E:\HR\OC\SR051.XXX SR051
268

payment is so reduced to the State collecting such support and notify the person making the overpayment that so much of the overpayment was necessary to satisfy his obligation for past-due support has been paid to the State. øA reduction under this subsection 

shall be applied first to satisfy any past-due support which has 

been assigned to the State under section 402(a)(26) or 471(a)(17) of 

the Social Security Act, and shall be applied to satisfy any other 

past-due support after any other reductions allowed by law (but before a credit against future liability for an internal revenue tax) 

have been made.¿ The Secretary shall apply a reduction under this 

subsection first to an amount certified by the State as past due support under section 464 of the Social Security Act before any other 

reductions allowed by law. This subsection shall be applied to any 

overpayment prior to its being credited to a person’s future liability 

for an internal revenue tax. 

* * * * * * *

PERSONAL RESPONSIBILITY AND WORK 

OPPORTUNITY RECONCILIATION ACT 

OF 1966

* * * * * * *

TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE 

FOR NEEDY FAMILIES 

SEC. 101. Findings. 

* * * * * * *

SEC. 117. RESPONSIBLE FATHERHOOD PROGRAM. 

* * * * * * *

TITLE I—BLOCK GRANTS FOR TEMPORARY 

ASSISTANCE FOR NEEDY FAMILIES 

* * * * * * *

SEC. 116. EFFECTIVE DATE; TRANSITION RULE. 

(a) EFFECTIVE DATES.—* * *

* * * * * * *

SEC. 117. FATHERHOOD PROGRAM. 

(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) is amended by 

inserting after part B the following: 

‘‘PART C—RESPONSIBLE FATHERHOOD PROGRAM 

‘‘SEC. 441. RESPONSIBLE FATHERHOOD GRANTS. 

‘‘(a) GRANTS TO STATES TO CONDUCT DEMONSTRATION PRO- GRAMS.—

‘‘(1) AUTHORITY TO AWARD GRANTS.— ‘‘(A) IN GENERAL.—The Secretary shall award grants to 

up to 10 eligible States to conduct demonstration programs 

to carry out the purposes described in paragraph (2). 

269

‘‘(B) ELIGIBLE STATE.—For purposes of this subsection, 

an eligible State is a State that submits to the Secretary the 

following: 

‘‘(i) APPLICATION.—An application for a grant under 

this subsection, at such time, in such manner, and containing such information as the Secretary may require. 

(ii) STATE PLAN.—A State plan that includes the following: 

‘‘(I) PROJECT DESCRIPTION.—A description of 

the programs or activities the State will fund 

under the grant, including a good faith estimate of 

the number and characteristics of clients to be 

served under such projects and how the State intends to achieve at least 2 of the purposes described in paragraph (2). 

‘‘(II) COORDINATION EFFORTS.—A description of 

how the State will coordinate and cooperate with 

State and local entities responsible for carrying out 

other programs that relate to the purposes intended to be achieved under the demonstration 

program, including as appropriate, entities responsible for carrying out jobs programs and programs 

serving children and families. 

‘‘(III) RECORDS, REPORTS, AND AUDITS.—An 

agreement to maintain such records, submit such 

reports, and cooperate with such reviews and audits as the Secretary finds necessary for purposes 

of oversight of the demonstration program. 

‘‘(iii) CERTIFICATIONS.—The following certifications 

from the chief executive officer of the State: 

‘‘(I) A certification that the State will use funds 

provided under the grant to promote at least 2 of 

the purposes described in paragraph (2). 

‘‘(II) A certification that the State will return any 

unused funds to the Secretary in accordance with 

the reconciliation process under paragraph (5). 

‘‘(III) A certification that the funds provided 

under the grant will be used for programs and activities that target low-income participants and 

that not less than 50 percent of the participants in 

each program or activity funded under the grant 

shall be—

‘‘(aa) parents of a child who is, or within the 

past 24 months has been, a recipient of assistance or services under a State program funded 

under part A, D, or E of this title, title XIX, 

or the Food Stamp Act of 1977; or 

‘‘(bb) parents, including an expectant parent 

or a married parent, whose income (after adjustment for court-ordered child support paid 

or received) does not exceed 150 percent of the 

poverty line. 

‘‘(IV) A certification that the State has or will 

comply with the requirements of paragraph (4). 

270

‘‘(V) A certification that funds provided to a 

State under this subsection shall not be used to 

supplement or supplant other Federal, State, or 

local funds that are used to support programs or 

activities that are related to the purposes described 

in paragraph (2). 

‘‘(C) PREFERENCES AND FACTORS OF CONSIDERATION.— In awarding grants under this subsection, the Secretary 

shall take into consideration the following: 

‘‘(i) DIVERSITY OF ENTITIES USED TO CONDUCT PRO- GRAMS AND ACTIVITIES.—The Secretary shall, to the 

extent practicable, achieve a balance among the eligible 

States awarded grants under this subsection with respect to the size, urban or rural location, and employment of differing or unique methods of the entities that 

the eligible States intend to use to conduct the programs and activities funded under the grants. 

‘‘(ii) PRIORITY FOR CERTAIN STATES.—The Secretary 

shall give priority to awarding grants to eligible States 

that have—

‘‘(I) demonstrated progress in achieving at least 

1 of the purposes described in paragraph (2) 

through previous State initiatives; or 

‘‘(II) demonstrated need with respect to reducing 

the incidence of out-of-wedlock births or absent fathers in the State.

‘‘(2) PURPOSES.—The purposes described in this paragraph 

are the following: 

‘‘(A) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

MARRIAGE PROMOTION.—To promote marriage or sustain 

marriage through activities such as counseling, mentoring, 

disseminating information about the benefits of marriage 

and 2-parent involvement for children, enhancing relationship skills, education regarding how to control aggressive 

behavior, disseminating information on the causes of domestic violence and child abuse, marriage preparation programs, premarital counseling, marital inventories, skillsbased marriage education, financial planning seminars, including improving a family’s ability to effectively manage 

family business affairs by means such as education, counseling, or mentoring on matters related to family finances, 

including household management, budgeting, banking, and 

handling of financial transactions and home maintenance, 

and divorce education and reduction programs, including 

mediation and counseling. 

‘‘(B) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

PARENTING PROMOTION.—To promote responsible parenting 

through activities such as counseling, mentoring, and mediation, disseminating information about good parenting 

practices, skills-based parenting education, encouraging 

child support payments, and other methods. 

‘‘(C) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

FOSTERING THROUGH FOSTERING ECONOMIC STABILITY OF

FATHERS.—To foster economic stability by helping fathers 

improve their economic status by providing activities such 

271

as work for services, job search, job training, subsidized 

employment, job retention, job enhancement, and encouraging education, including career-advancing education, 

dissemination of employment materials, coordination with 

existing employment services such as welfare-to-work programs, referrals to local employment training initiatives, 

and other methods. 

‘‘(3) RESTRICTION ON USE OF FUNDS.—No funds provided 

under this subsection may be used for costs attributable to court 

proceedings regarding matters of child visitation or custody, or 

for legislative advocacy. 

‘‘(4) REQUIREMENTS FOR RECEIPT OF FUNDS.—A State may 

not be awarded a grant under this section unless the State, as 

a condition of receiving funds under such a grant—

‘‘(A) consults with experts in domestic violence or with 

relevant community domestic violence coalitions in 

dveloping such programs or activities; and 

‘‘(B) describes in the application for a grant under this 

section—

‘‘(i) how the programs or activities proposed to be 

conducted will address, as appropriate, issues of domestic violence; and 

‘‘(ii) what the State will do, to the extent relevant, to 

ensure that participation in such programs or activities 

is voluntary, and to inform potential participants that 

their involvement is voluntary. 

‘‘(5) RECONCILIATION PROCESS.—

‘‘(A) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTED.—Each 

eligible State that receives a grant under this subsection for 

a fiscal year shall return to the Secretary any unused portion of the grant for such fiscal year not later than the last 

day of the second succeeding fiscal year, together with any 

earnings on such unused portion. 

‘‘(B) PROCEDURE FOR REDISTRIBUTION.—The Secretary 

shall establish an appropriate procedure for the redistributing to eligible States that have expended the entire 

amount of a grant made under this subsection for a fiscal 

year any amount that is returned to the Secretary by eligible States under subparagraph (A). 

‘‘(6) AMOUNT OF GRANTS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 

amount of each grant awarded under this subsection shall 

be an amount sufficient to implement the State plan submitted under paragraph (1)(B)(ii). 

‘‘(B) MINIMUM AMOUNTS.—No eligible State shall—

‘‘(i) in the case of the District of Columbia or a State 

other than the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, 

and the Commonwealth of the Northern Mariana Islands, receive a grant for a fiscal year in an amount 

that is less than $1,000,000; and 

‘‘(ii) in the case of the Commonwealth of Puerto Rico, 

the United States Virgin Islands, Guam, American 

Samoa, and the Commonwealth of the Northern MarVerDate jul 14 2003 06:12 Apr 01, 2005 Jkt 020263 PO 00000 Frm 00275 Fmt 6659 Sfmt 6603 E:\HR\OC\SR051.XXX SR051
272

iana Islands, receive a grant for a fiscal year in an 

amount that is less than $500,000. 

‘‘(7) DEFINITION OF STATE.—In this subsection the term ‘State’ 

means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United State Virgin Islands, 

Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. 

‘‘(8) APPROPRIATION.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated for each of fiscal years 2006 through 2010, $20,000,000 

for purposes of making grants to eligible States under this 

subseciton. 

‘‘(b) GRANTS TO ELIGIBLE ENTITIES TO CONDUCT DEMONSTRATION

PROGRAMS.—

‘‘(1) AUTHORITY TO AWARD GRANTS.—

‘‘(A) IN GENERAL.—The Secretary shall award grants to 

eligible entities to conduct demonstration programs to carry 

out the purposes described in subsection (a)(2). 

‘‘(B) ELIGIBILITY ENTITY.—For purposes of this subsection, an eligible entity is a local government, local public 

agency, community-based or nonprofit organization, or private entity, including any charitable or faith-based organization, or an Indian tribe or tribal organization (as defined 

in sectin 419(4)), that submits to the Secretary the following: 

‘‘(i) APPLICATION.—An application for a grant under 

this subsection, at such time, in such manner, and containing such information as the Secretary may require. 

‘‘(ii) PROJECT DESCRIPTION.—A description of the 

programs or activities the entity intends to carry out 

with funds provided under the grant, including a good 

faith estimate of the number and chracteristics of clients tob e served under such programs or activities and 

how the entity intends to achieve at least 20 of the purposes described in subsection (a)(2). 

‘‘(iii) COORDINATION EFFORTS.—A description of how 

the entity will coordinate and cooperate with State and 

local entities responsible for carrying out other programs that relate to the purposes intended to be 

achieved under the demonstration program, including 

as appropriate, entities responsible for carrying out 

jobs programs and programs serving children and 

families. 

‘‘(iv) RECORDS, REPORTS, AND AUDITS.—An agreement to maintain such records, submit such reports, 

and cooperate with such reviews and audits as the Secretary finds necessary for purposes of oversight of the 

demonstration program. 

‘‘(v) CERTIFICATIONS.—The following certifications: 

‘‘(I) A certification that the entity will use funds 

provided udner the grant to promote at least 2 of 

the purposes described in subsection (a)(2). 

‘‘(II) A certification that the entity will return 

any unused funds to the Secretary in accordance 

273

with the reconcilation process under paragraph 

(3). 

(III) A certification that the funds provided 

under the grant will be used for programs and activities that target low-income participants in each 

program or activity funded under the grant shall 

be—

‘‘(aa) parents of a child who is, or within the 

past 24 months has been, a recipient of assistance or services under a State program funded 

under part A, D, or E of this title, title XIX, 

or the Food Stamp Act of 1977; or 

‘‘(bb) parents, including an expectant parent 

or a married parent, whose income (after adjustment for court-ordered child support paid 

or received) does not exceed 150 percent of the 

poverty line. 

‘‘(IV) A certification that the entity has or will 

comply with the requirements of paragraph (3). 

‘‘(V) A certification that funds provided to an entity under this subsection shall not be used to supplement or supplant other Federal, State, or local 

fundsprovided to the entity that are used to support programs or activities that are related to the 

purposes described in subsection (a)(2). 

‘‘(C) PREFERENCES AND FACTORS OF CONSIDERATION.—In 

awarding grants under this subsection, the Secretary shall, 

to the extent practicable, achieve a balance mong the eligible entities awarded grants under this subsectinw ith respect to the size, urban or rural location, and employment 

of differing or unique methods of the entities. 

‘‘(2) RESTRICTION ON USE OF FUNDS.— No funds provded 

under this subsection may be used for costs attributable to court 

proceedings regarding matters of child visitation or custody, or 

for legislative advocacy. 

‘‘(3) REQUIREMENTS FOR USE OF FUNDS.—The Secretary may 

not award a grant under this subsection to an eligible entity 

unless the entity, as a condition of receiving funds under such 

a grant—

‘‘(A) consults with experts in domestic violence or with 

relevant community domestic violence coalitions in developing the programs or activities to be conducted with such 

funds awarded under the grant; and 

‘‘(B) describes in the application for a grant under this 

section—

‘‘(i) how the programs or activities proposed to be 

conducted will address, as appropriate, issues of domestic violence; and 

‘‘(ii) what the entity will do, to the extent relevant, to 

ensure that participation in such programs or activities 

is voluntary, and to inform potential participants that 

their involvement is voluntary. 

‘‘(4) RECONCILITATION PROCESS.—

‘‘(A) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Each 

eligible entity that receives a grant under this subseciton 

274

for a fiscal year shll return tot he Secretary any unused 

portion of the grant for such fiscal year not later than the 

last day of the second succeeding fiscal year, together with 

any earnings on such unused portion. 

‘‘(B) PROCEDURE FOR REDISTRIBUTION.—The Secretary 

shall establish an appropriate procedure for redistributing 

to eligible entities that have expended the entire amount of 

a grant made under this subsection for fiscal year any 

amount that is returned to the Secretary by eligible entities 

amount that is returned to the Secretary by eligible entities 

under subparagraph (A). 

‘‘(5) APPROPRIATION.—Out of any money in the Treasury oft 

he United States not otherwise appropriated, there are appropriated for each of fiscal years 2006 through 2010, $30,000,000 

for purposes of making grant to eligible entities under this subsection. 

‘‘SEC. 442. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD PROGRAMS. 

‘‘(a) MEDIA CAMPAIGN NATIONAL CLEARINGHOUSE FOR RESPON- SIBLE FATHERHOOD.— ‘‘(1) IN GENERAL.—From any funds appropriated under subsection (c), the Secretary shall contract with a nationally recognized, nonprofit fatherhood promotion organization described in 

subsection (b) to—

‘‘(A) develop, promote, and distribute to interested States, 

local governments, public agencies, and private entities a 

media campaign that encourages the appropriate involvement of parents in the life of any child, with a priority for

programs that specifically address the issue of responsible 

fatherhood; and 

‘‘(B) develop a national clearinghouse to assist States and 

communities in efforts to promote and support marriage 

and responsible fatherhood by collecting, evaluating, and 

making available (through the Internet and by other 

means) to other States information regarding the media 

campaigns established under section 443. 

‘‘(2) COORDINATION WITH DOMESTIC VIOLENCE PROGRAMS.—

The Secretary shall ensure that the nationally recognized nonprofit fatherhood promotion organization with a contract under 

paragraph (1) coordinates the media campaign developed under 

subparagraph (A) of such paragraph and the national clearinghouse developed under subparagraph (B) of such paragraph 

with national, State, or local domestic violence programs. 

‘‘(b) NATIONALLY RECOGNIZED, NONPROFIT FATHERHOOD PROMOTION ORGANIZATION DESCRIBED.—The nationally recognized, 

nonprofit fatherhood promotion organization described in this subsection is an organization that has at least 4 years of experience 

in—

‘‘(1) designing and disseminating a national public education 

campaign, as evidenced by the production and successful placement of television, radio, and print public service announcements that promote the importance of responsible fatherhood, a 

track record of service to Spanish-speaking populations and historically underserved or minority populations, the capacity to 

fulfill requests for information and a proven history of fulfilling 

275

such requests, and a mechanism through which the public can 

request additional information about the campaign; and 

‘‘(2) providing consultation and training to community-based 

organizations interested in implementing fatherhood outreach, 

support, or skill development programs with an emphasis on 

promoting married fatherhood as the ideal. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated $5,000,000 for each of fiscal years 2006 through 

2010 to carry out this section. 

‘‘SEC. 443. BLOCK GRANTS TO STATES TO ENCOURAGE MEDIA CAMPAIGNS. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) BROADCAST ADVERTISEMENT.—The term ‘broadcast advertisement’ means a communication intended to be aired by a 

television or radio broadcast station, including a communication intended to be transmitted through a cable channel. 

‘‘(2) CHILD AT RISK.—The term ‘child at risk’ means each 

young child whose family income does not exceed the poverty 

line. 

‘‘(3) POVERTY LINE.—The term ‘poverty line’ has the meaning 

given such term in section 673(2) of the Community Services 

Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section, that is applicable to a family of the size 

involved. 

‘‘(4) PRINTED OR OTHER ADVERTISEMENT.—The term ‘printed 

or other advertisement’ includes any communication intended to 

be distributed through a newspaper, magazine, outdoor advertising facility, mailing, or any other type of general public advertising, but does not include any broadcast advertisement. 

‘‘(5) STATE.—The term ‘State’ means each of the 50 States, the 

District of Columbia, the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana Islands. 

‘‘(6) YOUNG CHILD.—The term ‘young child’ means an individual under age 5. 

‘‘(b) STATE CERTIFICATIONS.—Not later than October 1 of each of 

fiscal year for which a State desires to receive an allotment under 

this section, the chief executive officer of the State shall submit to 

the Secretary a certification that the State shall—

‘‘(1) use such funds to promote the formation and maintenance of healthy 2-parent married families, strengthen fragile 

families, and promote responsible fatherhood through media 

campaigns conducted in accordance with the requirements of 

subsection (d); 

‘‘(2) return any unused funds to the Secretary in accordance 

with the reconciliation process under subsection (e); and 

‘‘(3) comply with the reporting requirements under subsection 

(f). 

‘‘(c) PAYMENTS TO STATES.—For each of fiscal years 2006 through 

2010, the Secretary shall pay to each State that submits a certification under subsection (b), from any funds appropriated under 

subsection (i), for the fiscal year an amount equal to the amount of 

the allotment determined for the fiscal year under subsection (g). 

276

‘‘(d) ESTABLISHMENT OF MEDIA CAMPAIGNS.—Each State receiving 

an allotment under this section for a fiscal year shall use the allotment to conduct media campaigns as follows: 

‘‘(1) CONDUCT OF MEDIA CAMPAIGNS.—

‘‘(A) RADIO AND TELEVISION MEDIA CAMPAIGNS.—

‘‘(i) PRODUCTION OF BROADCAST ADVERTISEMENTS.—

At the option of the State, to produce broadcast advertisements that promote the formation and maintenance 

of healthy 2-parent married families, strengthen fragile 

families, and promote responsible fatherhood. 

‘‘(ii) AIRTIME CHALLENGE PROGRAM.—At the option of 

the State, to establish an airtime challenge program 

under which the State may spend amounts allotted 

under this section to purchase time from a broadcast 

station to air a broadcast advertisement produced 

under clause (i), but only if the State obtains an 

amount of time of the same class and during a comparable period to air the advertisement using non-Federal contributions. 

‘‘(B) OTHER MEDIA CAMPAIGNS.—At the option of the 

State, to conduct a media campaign that consists of the 

production and distribution of printed or other advertisements that promote the formation and maintenance of 

healthy 2-parent married families, strengthen fragile families, and promote responsible fatherhood. 

‘‘(2) ADMINISTRATION OF MEDIA CAMPAIGNS.—A State may administer media campaigns funded under this section directly or 

through grants, contracts, or cooperative agreements with public agencies, local governments, or private entities, including 

charitable and faith-based organizations. 

‘‘(3) CONSULTATION WITH DOMESTIC VIOLENCE ASSISTANCE

CENTERS.—In developing broadcast and printed advertisements 

to be used in the media campaigns conducted under paragraph 

(1), the State or other entity administering the campaign shall 

consult with representatives of State and local domestic violence 

centers. 

‘‘(4) NON-FEDERAL CONTRIBUTIONS.—In this section, the term 

‘non-Federal contributions’ includes contributions by the State 

and by public and private entities. Such contributions may be 

in cash or in kind. Such term does not include any amounts 

provided by the Federal Government, or services assisted or 

subsidized to any significant extent by the Federal Government, 

or any amount expended by a State before October 1, 2005. 

‘‘(e) RECONCILIATION PROCESS.—

‘‘(1) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Each Stated that receives an allotment under this section shall return to 

the Secretary any unused portion of the amount allotted to a 

State for a fiscal year not later than the last day of the second 

succeeding fiscal year together with any earnings on such unused portion. 

‘‘(2) PROCEDURE FOR REDISTRIBUTION OF UNUSED ALLOTMENTS.—The Secretary shall establish an appropriate procedure for redistributing to States that have expended the entire 

amount allotted under this section any amount that is—

277

‘‘(A) returned to the Secretary by States under paragraph 

(1); or 

‘‘(B) not allotted to a State under this section because the 

State did not submit a certification under subsection (b) by 

October 1 of a fiscal year. 

‘‘(f) REPORTING REQUIREMENTS.—

‘‘(1) MONITORING AND EVALUATION.—Each State receiving an 

allotment under this section for a fiscal year shall monitor and 

evaluate the media campaigns conducted using funds made 

available under this section in such manner as the Secretary, 

in consultation with the States, determines appropriate. 

‘‘(2) ANNUAL REPORTS.—Not less frequently than annually, 

each State receiving an allotment under this section for a fiscal 

year shall submit to the Secretary reports on the media campaigns conducted using funds made available under this section at such time, in such manner, and containing such information as the Secretary may require. 

‘‘(g) AMOUNT OF ALLOTMENTS.—

‘‘() IN GENERAL.—Except as provided in paragraph (2), of the 

amount appropriated for the purpose of making allotments 

under this section for a fiscal year, the Secretary shall allot to 

each State that submits a certification under subsection (b) for 

the fiscal year an amount equal to the sum of—

‘‘(A) the amount that bears the same ratio to 50 percent 

of such funds as the number of young children in the State 

(as determined by the Secretary based on the most current 

reliable data available) bears to the number of such children in all States; and

‘‘(B) the amount that bears the same ratio to 50 percent 

of such funds as the number of children at risk in the State 

(as determined by the Secretary based on the most current 

reliable data available) bears to the number of such children in all States. 

‘‘(2) MINIMUM ALLOTMENTS.—No allotment for a fiscal year 

under this section shall be less than—

‘‘(A) in the case of the District of Columbia or a State 

other than the Commonwealth of Puerto Rico, the United 

States Virgin Islands, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana Islands, 1 percent 

of the amount appropriated for the fiscal year under subsection (i); and 

‘‘(B) in the case of the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, 

and the Commonwealth of the Northern Mariana Islands, 

0.5 percent of such amount. 

‘‘(3) PRO RATA REDUCTIONS.—The Secretary shall make such 

pro rata reductions to the allotments determined under this 

subsection as are necessary to comply with the requirements of 

paragraph (2). 

‘‘(h) EVALUATION.—

‘‘(1) IN GENERAL.—The Secretary shall conduct an evaluation 

of the impact of the media campaigns funded under this section. 

278

‘‘(2) REPORT.—Not later than December 31, 2008, the Secretary shall report to Congress the results of the evaluation 

under paragraph (1). 

‘‘(3) FUNDING.—Of the amount appropriated under subsection 

(i) for fiscal year 2006, $1,000,000 of such amount shall be 

transferred and made available for purposes of conducting the 

evaluation required under this subsection, and shall remain 

available until expended. 

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated $20,000,000 for each of fiscal years 2006 through 

2010 for purposes of making allotments to States under this section. 

‘‘SEC. 444. NATIONAL RESOURCE CENTER FOR RESPONSIBLE FATHERHOOD 

‘‘(a) IN GENERAL.—The Secretary shall contract with a nationally 

recognized, nonprofit research and education fatherhood organization described in subsection (b) to—

‘‘(1) provide technical assistance and training to public and 

private agencies and grass roots organizations that promote responsible fatherhood and healthy marriage; and 

‘‘(2) develop a clearinghouse of resource materials to assist 

community-based organizations in developing local responsible 

fatherhood programs, with an emphasis on training and outcome evaluation. 

‘‘(b) NATIONALLY RECOGNIZED NONPROFIT RESEARCH AND EDUCATION FATHERHOOD ORGANIZATION DESCRIBED.—A nationally recognized nonprofit research and education fatherhood organization 

described in this subsection is an organization that has been in existence for at least 12 years with experience in—

‘‘(1) developing and distributing research-based curriculum 

that promotes responsible fatherhood and healthy marriage 

with an emphasis on low-income and noncustodial fathers; 

‘‘(2) providing consultation and training to community-based 

organizations with a track record of working with social service, 

government, and faith-based organizations; and 

‘‘(3) providing direct training to fathers, father figures, and 

mothers using research-based curriculum in a variety of economic, cultural and family situations. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated to the Secretary to carry out this section, $1,000,000 

for each of fiscal years 2006 through 2010. 

‘‘SEC. 445. NONDISCRIMINATION. 

‘‘The projects and activities assisted under this part shall be 

available on the same basis to all fathers and expectant fathers able 

to benefit from such projects and activities, including married and 

unmarried fathers and custodial and noncustodial fathers, with 

particular attention to low-income fathers, and to mothers and expectant mothers on the same basis as to fathers. 

‘‘(b) INAPPLICABILITY OF EFFECTIVE DATE PROVISIONS.—Section 

116 shall not apply to the amendment made by subsection (a) of this 

section.’’.

* * * * * * * 

279

TITLE 28—JUDICIARY AND JUDICIAL 

PROCEDURE 

PART V—PROCEDURE 

CHAPTER 115—EVIDENCE; DOCUMENTARY 

SEC. 1738B. FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS. 

(a) GENERAL RULE.—The appropriate authorities of each State—

* * * * * * * 

ø(d) CONTINUING JURISDICTION.—A court of a State that has 

made a child support order consistently with this section has continuing, exclusive jurisdiction over the order if the State is the 

child’s State or the residence of any individual contestant unless 

the court of another State, acting in accordance with subsections (e) 

and (f), has made a modification of the order.¿

(d) CONTINUING EXCLUSIVE JURISDICTION.— (1) IN GENERAL.—Subject to paragraph (2), a court of a State 

that has made a child support order consistent with this section 

has continuing, exclusive jurisdiction to modify its order if the 

order is the controlling order and—

(A) the State is the child’s State or the residence of any 

individual contestant; or 

(B) if the State is not the residence of the child or an individual contestant, the contestants consent in a record or 

in open court that the court may continue to exercise jurisdiction to modify its order. 

(2) REQUIREMENT.—A court may not exercise its continuing, 

exclusive jurisdiction to modify the order if the court of another 

State, acting in accordance with subsections (e) and (f), has 

made a modification of the order.

(e) AUTHORITY TO MODIFY ORDERS.—A court of a State may modify a child support order issued by a court of another state if—

(1) the court has jurisdiction to make such a child support 

order pursuant to subsection (i); and 

(2)(A) the court of the other State no longer has continuing, 

exclusive jurisdiction of the child support order øbecause that 

State no longer is the child’s State or the residence of any individual contestant;¿ pursuant to paragraph (1) or (2) of subsection (d); or 

(B) each individual contestant has filed written consent with 

the State of continuing, exclusive jurisdiction for a court of another State with jurisdiction over at least 1 of the individual 

contestants or that is located in the child’s State to modify the 

order and assume continuing, exclusive jurisdiction over the 

order. 

(f) øRECOGNITION OF¿ DETERMINATION OF CONTROLLING CHILD

SUPPORT ORDERS.—If 1 or more child support orders have been 

issued with regard to an obligor and a child, a court øshall apply 

the following rules in determining which order to recognize for purposes of continuing, exclusive jurisdiction and enforcement:¿ having personal jurisdiction over both individual contestants shall 

apply the following rules and by order shall determine which order 

controls:

280

(1) If only 1 court has issued a child support order, the order 

of that court ømust be¿ controls and must be so recognized. 

(2) If 2 or more courts have issued child support orders for 

the same obligor and child, and only 1 of the courts would have 

continuing, exclusive jurisdiction under this section, the order 

of that court ømust be recognized¿ controls. (3) If 2 or more courts have issued child support orders for 

the same obligor and child, and more than 1 of the courts 

would have continuing, exclusive jurisdiction under this section, an order issued by a court in the current home State of 

the child ømust be recognized¿ controls, but if an order has not 

been issued in the current home State of the child, the order 

most recently issued ømust be recognized¿ controls. 

(4) If 2 or more courts have issued child support orders for 

the same obligor and child, and none of the courts would have 

continuing, exclusive jurisdiction under this section, a court 

having jurisdiction over the parties ømay¿ shall issue a child 

support order, which ømust be recognized¿ controls. ø(5) The court that has issued an order recognized under this 

subsection is the court having continuing, exclusive jurisdiction 

under subsection (d).¿

ø(g) ENFORCEMENT OF MODIFIED ORDERS.—A court of a State 

that no longer has continuing, exclusive jurisdiction of a child support order may enforce the order with respect to nonmodifiable obligations and unsatisfied obligations that accrued before the date 

on which a modification of the order is made under subsections (e) 

and (f).¿

(g) ENFORCEMENT OF MODIFIED ORDERS.—If a child support 

order issued by a court of a State modified by a court of another 

State which properly assumed jurisdiction, the issuing court—

(1) may enforce its order that was modified only as to arrears 

and interest accruing before the modification; 

(2) may provide appropriate relief for violations of its order 

which occurred before the effective date of the modification; and 

(3) shall recognize the modifying order of the other State for 

the purpose of enforcement.

(h) CHOICE OF LAW—

(1) IN GENERAL.—In a proceeding to establish, modify or enforce a child support order, the forum State’s law shall apply 

except as provided in paragraphs (2) øand (3)¿, (3), and (4). 

(2) LAW OF STATE OF ISSUANCE OF ORDER.—In interpreting a 

child support order including the duration of current payments 

and other obligations of support the computation and payment 

of arrearages, and the accrual of interest on the arrearages, a 

court shall apply the law of the State of the court that issued 

the order. 

* * * * * * * 

(4) PROSPECTIVE APPLICATION.—After a court determines 

which is the controlling order and issues an order consolidating 

arrears, if any, a court shall prospectively apply the law of the 

State issuing the controlling order, including that State’s law 

with respect to interest on arrears, current and future support, 

and consolidated arrears. 

* * * * * * * 

281

(i) REGISTRTION FOR MODIFICATION.—If there is no individual 

contestant or child residing in the issuing State and subsection 

(d)(2) does not apply, the party or support enforcement agency 

seeking to modify, or to modify and enforce, a child support order 

issued in another State shall register that order in a State with jurisdiction over the nonmovant for the purpose of modification.

* * * * * * *

TITLE 29—LABOR 

Subtitle B—Regulatory Provisions 

CHAPTER 18—EMPLOYEE RETIREMENT INCOME 

SECURITY PROGRAM 

Subchapter I—Protection of employee benefit rights 

SEC. 1166. NOTICE REQUIREMENTS 

(a) In general 

In accordance with regulations prescribed by the Secretary—

(1) * * * 

* * * * * * *

(4) the administrator shall notify—

(A) in the case of a qualifying event described in paragraph (1), (2), (4), or (6) of section 1163 of this title, any 

qualified beneficiary with respect to such event, øand¿

(B) in the case of a qualifying event described in paragraph (3) or (5) of section 1163 of this title where the covered employee notifies the administrator under paragraph 

(3), any qualified beneficiary with respect to such event, 

and

(C) in any case in which the qualifying event with respect 

to which notice to a qualified beneficiary is required by 

subparagraph (A) or (B) is a qualifying event with respect 

to the parent of a qualified beneficiary who is an alternative recipient under a qualified medical child support 

order (as such terms are defined in section 609(a)(2)), the 

State agency administering the program under part D of 

title IV of the Social Security Act that issued, or is authorized to enforce, such order, of such beneficiary’s rights 

under this subsection. 

* * * * * * *

SEC. 1169. ADDITIONAL STANDARDS FOR GROUP HEALTH PLANS 

(a) Group health plan coverage pursuant to medical child support 

orders 

(1) In general 

* * * * * * *

(5) Procedural requirements 

(A) Timely notifications and determinations 

* * * * * * *

282

(C) National Medical Support Notice deemed to be a 

qualified medical child support order 

(i) In general 

If the plan administrator of a group health plan which is 

maintained by the employer of a ønoncustodial¿ parent of a 

child or to which such an employer contributes receives an appropriately completed National Medical Support Notice promulgated pursuant to section 401(b) of the Child Support Performance and Incentive Act of 1998 is the case of such child, 

and the Notice meets the requirements of paragraphs (3) and 

(4), the Notice shall be deemed to be a qualified medical child 

support order in the case of such child. 

(ii) Enrollment of child in plan 

In any case in which an appropriately completed National 

Medical Support Notice is issued in the case of a child of a participant under a group health plan who is a ønoncustodial¿

parent of the child and the Notice is deemed under clause (i) 

to be a qualified medical child support order, the plan administrator, within 40 business days after the date of the Notice, 

shall—

* * * * * * *

29 § 1169. Note. 

* * * * * * *

National Medical Support Notices for State or Local 

Governmental Group Health Plans 

Pub. L. 105–200, title IV § 401(e), July 16, 1998, 112 Stat. 663, 

provided that: 

‘‘(1) In general.—Each State or local governmental group health 

plan shall provide benefits in accordance with the applicable requirements of any National Medical Support Notice. 

‘‘(2) Enrollment of child in plan.—In any case in which an appropriately completed National Medical Support Notice is issued in 

the case of a child of a participant under a State or local governmental group health plan øwho is a noncustodial parent of the 

child¿ the plan administrator, within 40 business days after the 

date of the Notice, shall—

Qualified Medical Child Support Orders and National 

Medical Support Notices for Church Plans 

Pub. L. 105–200, Title IV, § 401(f), July 16, 1998, 112 Stat. 664, 

provided that: 

‘‘(1) * * *

‘‘(5) Procedural requirements.—

‘‘(A) * * *

‘‘(C) National Medical Support Notice deemed to be a qualified 

medical child support order.—

‘‘(i) In general.—If the plan administrator of any church 

group health plan which is maintained by the employer of a 

ønoncustodial¿ parent of a child or to which such an employer 

contributes receives an appropriately completed National Medical Support Notice promulgated pursuant to subsection (b) of 

this section [Pub.L. 105–200, Title IV, § 401(b), July 16, 1998, 

283

112 Stat. 660, which is classified as a note under section 651 

of Title 42] in the case of such child, and the Notice meets the 

requirements of paragraphs (3) and (4) of this subsection [this 

note], the Notice shall be deemed to be a qualified medical 

child support order in the case of such child. ‘‘(ii) Enrollment of child in plan.—In any case in which 

an appropriately completed National Medical Support Notice is 

issued in the case of a child of a participant under a church 

group health plan who is a ønoncustodial¿ parent of the child, 

and the Notice is deemed under clause (i) to be a qualified 

medical child support order, the plan administrator, within 40 

business days after the date of the Notice, shall—

* * * * * * *

TITLE 31—MONEY AND FINANCE 

Subtitle III—Financial Management 

CHAPTER 37—CLAIMS 

Subchapter II—Claims of the United States Government 

* * * * * * *

SEC. 3701. DEFINITIONS AND APPLICATION. 

(a) * * *

(d) Sections 3711(e) and 3716–3719 of this title do not apply to a 

claim or debt under, or to an amount payable under—

(1) the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.), 

(2) the Social Security Act (42 U.S.C. 301 et seq.), except to the 

extent provided under sections 204(f) and 1631(b)(4) of such Act 

and øsection 3716(c) of this title¿ subsections (c) and (h)(3) of section 3716 of this title, or 

* * * * * * *

SEC. 3716. ADMINISTRATIVE OFFSET. 

* * * * * * *

(h)(1) The Secretary may, in the discretion of the Secretary, 

apply subsection (a) with respect to any past-due, legally-enforceable debt owed to a State if—

* * * * * * *

ø(3) In applying this section with respect to any debt owed to a 

State, subsection (c)(3)(A) shall not apply.¿

(3)(A) Except as provided in subparagraph (B), in applying this 

section with respect to any debt owed to a State, subsection (c)(3)(A) 

shall not apply. 

(B) Subsection (c)(3)(A) shall apply with respect to payments owed 

to an individual under title II of the Social Security Act (notwithstanding any other provision of law, including section 207 of the Social Security Act (42 U.S.C. 407)) for purposes of offset under this 

section of such payments to collect past-due support being enforced 

by a State. 

* * * * * * *

284

LONGSHORE AND HARBOR WORKERS’ 

COMPENSATION ACT 

ASSIGNMENT AND EXEMPTION FROM CLAIMS OF CREDITORS

SEC. 16. øNo¿ Except as provided by this Act, no assignment, release, or commutation of compensation or benefits due or payable 

under this Actø, except as provided by this Act,¿ shall be valid, and 

such compensation and benefits shall be exempt from all claims of 

creditors and from levy, execution, and attachment or other remedy 

for recovery or collection of a debt, which exemption may not be 

waived. 

øLIEN AGAINST COMPENSATION

øSEC. 17. Where a trust fund which complies with section 186(c) 

of title 29 established pursuant to a collective-bargaining agreement in effect between an employer and an employee covered 

under this chapter has paid disability benefits to an employee 

which the employee is legally obligated to repay by reason of his 

entitlement to compensation under this chapter or under a settlement, the Secretary shall authorize a lien on such compensation in 

favor or the trust fund for the amount of such payments.¿

LIENS ON COMPENSATION; CHILD SUPPORT ENFORCEMENT

SEC. 17. (a) LIENS.—Where a trust fund which complies with section 302(c) of the Labor Management Relations Act, 1947 (29 U.S.C. 

186(c) established pursuant to a collective-bargaining agreement in 

effect between an employer and an employee covered under this Act 

has paid disability benefits to an employee which the employee is legally obligated to repay by reason of the employee’s entitlement to 

compensation under this Act or under a settlement, the Secretary 

shall authorize a lien on such compensation in favor of the trust 

fund for the amount of such payments. 

(b) CHILD SUPPORT.—Compensation or benefits due or payable to 

an individual under this Act (other than medical benefits) shall be 

subject, in like manner and to the same extent as similar compensation or benefits under a workers’ compensation program if established under State law—

(1) to withholding in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 466 of the Social 

Security Act and regulations under such subsections; and 

(2) to any other legal process brought, by a State agency administering a program under a State plan approved under part 

D of title IV of the Social Security Act or by an individual obligee, to enforce the legal obligation of the individual to provide 

child support or alimony. 

* * * * * * *

Æ