I

104TH CONGRESS

1ST SESSION H. R. 1181

To strengthen families receiving aid to families with dependent children

through education, job training, savings, and investment opportunities,

and to provide States with greater flexibility in administering such aid

in order to help individuals make the transition from welfare to employment and economic independence.

IN THE HOUSE OF REPRESENTATIVES

MARCH 9, 1995

Mr. FLAKE introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To strengthen families receiving aid to families with dependent children through education, job training, savings,

and investment opportunities, and to provide States with

greater flexibility in administering such aid in order to

help individuals make the transition from welfare to employment and economic independence.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Family Investment and Self-Sufficiency Act of 1995’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. State option to increase AFDC income disregards and disregard all

child support payments.

Sec. 3. Tax credit for contributions by low-income individuals to qualified asset

accounts.

Sec. 4. State option to increase AFDC income disregard for certain stepparents.

Sec. 5. Elimination of rules that treat families differently based on number of

parents in the home.

Sec. 6. Extension of transitional child care benefits for employed AFDC recipients.

Sec. 7. Denial of AFDC for applicants who have abandoned a child.

Sec. 8. State option to deny AFDC for additional children.

Sec. 9. State option to deny AFDC benefits to parents whose children have not

received required immunizations.

Sec. 10. State option to disregard income and resources designated for education, training, employability, or self-employment.

Sec. 11. State option to increase limitation on disregard of equity in an automobile.

Sec. 12. Treatment of student earnings under the AFDC program.

Sec. 13. Effective date.

3 SEC. 2. STATE OPTION TO INCREASE AFDC INCOME DIS4 REGARDS AND DISREGARD ALL CHILD SUP5 PORT PAYMENTS.

6 Section 402(a)(8)(B) of the Social Security Act (42

7 U.S.C. 602(a)(8)(B)) is amended—

8 (1) by striking ‘‘and’’ at the end of clause (i);

9 and

10 (2) by adding at the end the following:

11 ‘‘(iii) may disregard—

12 ‘‘(I) earned income of any child or rel13 ative receiving aid to families with depend14 ent children, or of any other individual (liv15 ing in the same home as such relative and
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1 child) whose needs are taken into account

2 in making the determination under para3 graph (7), in accordance with any com4 bination of rules that is not less favorable

5 than the rules contained in clauses (ii) and

6 (iv) of subparagraph (A) and clause (ii) of

7 this subparagraph and not more favorable

8 than a disregard of the first $200 of the

9 total of such earned income for such

month plus 1 10 ⁄2 of the remainder thereof;

11 and

12 ‘‘(II) child support payments received

13 by any such child, relative, or other indi14 vidual, in accordance with any combination

15 of rules that is not less favorable than the

16 rules contained in subparagraph (A)(vi)

17 and not more favorable than a disregard of

18 all such child support payments received.’’.

19 SEC. 3. TAX CREDIT FOR CONTRIBUTIONS BY LOW-INCOME

20 INDIVIDUALS TO QUALIFIED ASSET AC21 COUNTS.

22 (a) IN GENERAL.—Subpart C of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of

24 1986 (relating to refundable credits) is amended by redes-
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1 ignating section 35 as section 36 and by inserting after

2 section 34 the following new section:

3 ‘‘SEC. 35. QUALIFIED ASSET ACCOUNT CONTRIBUTIONS.

4 ‘‘(a) ALLOWANCE OF CREDIT.—

5 ‘‘(1) IN GENERAL.—In the case of an eligible

6 individual, there shall be allowed as a credit against

7 the tax imposed by this subtitle for the taxable year

8 an amount equal to the applicable percentage of the

9 qualified asset account contributions of the individ10 ual for the taxable year.

11 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

12 of paragraph (1), the applicable percentage is—

13 ‘‘(A) 10 percent with respect to so much of

14 the aggregate qualified asset account contribu15 tions of the individual for the taxable year as

16 do not exceed $1,000, and

17 ‘‘(B) 20 percent with respect to so much of

18 such contributions as exceed $1,000 but do not

19 exceed $2,000.

20 ‘‘(b) LIMITATION.—

21 ‘‘(1) IN GENERAL.—The amount of qualified

22 asset account contributions by an eligible individual

23 which may be taken into account under subsection

24 (a) for any taxable year shall not exceed the lesser

25 of—
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1 ‘‘(A) $2,000, or

2 ‘‘(B) an amount equal to the compensation

3 (as defined in section 219(f)) includible in the

4 individual’s gross income for such taxable year.

5 ‘‘(2) PRORATION OF LIMITATION IF PART-YEAR

6 ELIGIBILITY.—In the case of an individual who is an

7 eligible individual only for a portion (but not all) of

8 the calendar year ending with or within the taxable

9 year, the limitation under this subsection for such

10 taxable year shall be an amount which bears the

11 same ratio to such limitation (determined without

12 regard to this paragraph) as such portion bears to

13 the entire calendar year.

14 ‘‘(c) DEFINITIONS.—For purposes of this section—

15 ‘‘(1) QUALIFIED ASSET ACCOUNT.—The term

16 ‘qualified asset account’ means a trust created or or17 ganized in the United States exclusively for the pur18 pose of paying the qualified expenses of the account

19 beneficiary, but only if the written governing instru20 ment creating the trust meets the following require21 ments:

22 ‘‘(A) No contribution will be accepted un23 less it is in cash, and contributions will not be

24 accepted during any calendar year in excess of

25 $2,000.
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1 ‘‘(B) The trustee is a bank (as defined in

2 section 408(n)) or another person who dem3 onstrates to the satisfaction of the Secretary

4 that the manner in which such person will ad5 minister the trust will be consistent with the re6 quirements of this section.

7 ‘‘(C) No part of the trust assets will be in8 vested in life insurance contracts.

9 ‘‘(D) The assets of the trust will not be

10 commingled with other property except in a

11 common trust fund or common investment

12 fund.

13 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

14 individual’ means any individual if any member of

15 such individual’s family is receiving aid under a

16 State plan approved under part A of title IV of the

17 Social Security Act.

18 ‘‘(3) QUALIFIED EXPENSES.—The term ‘quali19 fied expenses’ means, with respect to the account

20 beneficiary, the amount paid by such beneficiary

21 for—

22 ‘‘(A) the education of any member of such

23 beneficiary’s family,

24 ‘‘(B) training for employment of any such

25 member,
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1 ‘‘(C) improving the job skills of any such

2 member,

3 ‘‘(D) starting a business by any such mem4 ber,

5 ‘‘(E) purchasing a principal residence for

6 any such member, and

7 ‘‘(F) moving expenses for any such mem8 ber in moving to a new principal residence.

9 ‘‘(4) QUALIFIED ASSET ACCOUNT CONTRIBU10 TIONS.—The term ‘qualified asset account contribu11 tions’ means any amount paid in cash for the tax12 able year by or on behalf of an individual to a quali13 fied asset account for such individual’s benefit.

14 ‘‘(5) ACCOUNT BENEFICIARY.—The term ‘ac15 count beneficiary’ means the individual for whose

16 benefit the qualified asset account is established.

17 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—

18 ‘‘(1) TIME WHEN CONTRIBUTIONS DEEMED

19 MADE.—A contribution shall be deemed to be made

20 on the last day of the preceding taxable year if the

21 contribution is made on account of such taxable year

22 and is made not later than the time prescribed by

23 law for filing the return for such taxable year (not

24 including extensions thereof).
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1 ‘‘(2) MARRIED INDIVIDUALS.—The maximum

2 credit under subsection (b) shall be computed sepa3 rately for each individual.

4 ‘‘(3) EMPLOYER PAYMENTS.—For purposes of

5 this title, any amount paid by an employer to a

6 qualified asset account shall be treated as a payment

7 of compensation to the employee (other than a self8 employed individual who is an employee within the

9 meaning of section 401(c)(1)) includible in his gross

10 income for the taxable year for which the amount

11 was contributed, whether or not a credit for such

12 payment is allowable under this section to the em13 ployee.

14 ‘‘(e) TAX TREATMENT OF DISTRIBUTIONS.—

15 ‘‘(1) IN GENERAL.—Any amount paid or dis16 tributed out of a qualified asset account shall be in17 cluded in the gross income of the account beneficiary

18 unless such amount is used exclusively to pay the

19 qualified expenses of such beneficiary.

20 ‘‘(2) EXCESS CONTRIBUTIONS RETURNED BE21 FORE DUE DATE OF RETURN.—Paragraph (1) shall

22 not apply to the distribution of any contribution paid

23 during a taxable year to a qualified asset account to

24 the extent that such contribution exceeds the

25 amount excludable under subsection (a) if—
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1 ‘‘(A) such distribution is received by the

2 individual on or before the last day prescribed

3 by law (including extensions of time) for filing

4 such individual’s return for such taxable year,

5 and

6 ‘‘(B) such distribution is accompanied by

7 the amount of net income attributable to such

8 excess contribution.

9 Any net income described in subparagraph (B) shall

10 be included in the gross income of the individual for

11 the taxable year in which it is received.

12 ‘‘(3) PENALTY FOR DISTRIBUTIONS NOT USED

13 FOR QUALIFIED EXPENSES.—

14 ‘‘(A) IN GENERAL.—The tax imposed by

15 this chapter for any taxable year in which there

16 is a payment or distribution from a qualified

17 asset account which is not used to pay the

18 qualified expenses of the account beneficiary

19 shall be increased by 10 percent of the amount

20 of such payment or distribution which is includ21 ible in gross income under paragraph (1).

22 ‘‘(B) DISABILITY OR DEATH CASES.—Sub23 paragraph (A) shall not apply if the payment or

24 distribution is made after the account bene-
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1 ficiary becomes disabled within the meaning of

2 section 72(m)(7) or dies.

3 ‘‘(f) TAX TREATMENT OF ACCOUNTS.—

4 ‘‘(1) IN GENERAL.—A qualified asset account is

5 exempt from taxation under this subtitle, unless

6 such account has ceased to be a qualified asset ac7 count by reason of paragraph (2) or (3). Notwith8 standing the preceding sentence, any such account is

9 subject to the taxes imposed by section 511 (relating

10 to imposition of tax on unrelated business income of

11 charitable, etc., organizations).

12 ‘‘(2) ACCOUNT TERMINATES IF INDIVIDUAL EN13 GAGES IN PROHIBITED TRANSACTION.—

14 ‘‘(A) IN GENERAL.—If, during any taxable

15 year of the account beneficiary engages in any

16 transaction prohibited by section 4975 with re17 spect to the account, the account ceases to be

18 a qualified asset account as of the first day of

19 that taxable year.

20 ‘‘(B) ACCOUNT TREATED AS DISTRIBUTING

21 ALL ITS ASSETS.—In any case in which any ac22 count ceases to be a qualified asset account by

23 reason of subparagraph (A) on the first day of

24 any taxable year, paragraph (1) of subsection

25 (e) shall be applied as if there were a distribu-
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1 tion on such first day in an amount equal to

2 the fair market value (on such first day) of all

3 assets in the account (on such first day) and no

4 portion of such distribution were used to pay

5 qualified expenses.

6 ‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU7 RITY.—If, during any taxable year, the account ben8 eficiary uses the account or any portion thereof as

9 security for a loan, the portion so used is treated as

10 distributed and not used to pay qualified expenses.

11 ‘‘(g) CUSTODIAL ACCOUNTS.—For purposes of this

12 section, a custodial account shall be treated as a trust if—

13 ‘‘(1) the assets of such account are held by a

14 bank (as defined in section 408(n)) or another per15 son who demonstrates to the satisfaction of the Sec16 retary that the manner in which he will administer

17 the account will be consistent with the requirements

18 of this section, and

19 ‘‘(2) the custodial account would, except for the

20 fact that it is not a trust, constitute a qualified asset

21 account described in subsection (c).

22 For purposes of this title, in the case of a custodial ac23 count treated as a trust by reason of the preceding sen24 tence, the custodian of such account shall be treated as

25 the trustee thereof.
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1 ‘‘(h) REPORTS.—The trustee of a qualified asset ac2 count shall make such reports regarding such account to

3 the Secretary and to the account beneficiary with respect

4 to contributions, distributions, and such other matters as

5 the Secretary may require under regulations. The reports

6 required by this subsection shall be filed at such time and

7 in such manner and furnished to such individuals at such

8 time and in such manner as may be required by those reg9 ulations.’’

10 (b) TAX ON EXCESS CONTRIBUTIONS.—Section 4973

11 of such Code (relating to tax on excess contributions to

12 individual retirement accounts, certain section 403(b) con13 tracts, and certain individual retirement annuities) is

14 amended—

15 (1) by inserting ‘‘QUALIFIED ASSET AC16 COUNTS,’’ after ‘‘ACCOUNTS,’’ in the heading of

17 such section,

18 (2) by redesignating paragraph (2) of sub19 section (a) as paragraph (3) and by inserting after

20 paragraph (1) the following:

21 ‘‘(2) a qualified asset account (within the mean22 ing of section 35(c)),’’,

23 (3) by striking ‘‘or’’ at the end of paragraph

24 (1) of subsection (a), and
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1 (4) by adding at the end thereof the following

2 new subsection:

3 ‘‘(d) EXCESS CONTRIBUTIONS TO QUALIFIED ASSET

4 ACCOUNTS.—For purposes of this section, in the case of

5 a qualified asset account (within the meaning of section

6 35(c)), the term ‘excess contributions’ means the amount

7 by which the amount contributed for the taxable year to

8 the account exceeds the amount which may be taken into

9 account in determining the credit under section 35 for

10 such taxable year. For purposes of this subsection, any

11 contribution which is distributed out of the qualified asset

12 account in a distribution to which section 35(e)(2) applies

13 shall be treated as an amount not contributed.’’

14 (c) TAX ON PROHIBITED TRANSACTIONS.—Section

15 4975 of such Code (relating to prohibited transactions)

16 is amended—

17 (1) by adding at the end of subsection (c) the

18 following new paragraph:

19 ‘‘(4) SPECIAL RULE FOR QUALIFIED ASSET AC20 COUNTS.—An individual for whose benefit a quali21 fied asset account (within the meaning of section

22 35(c)) is established shall be exempt from the tax

23 imposed by this section with respect to any trans24 action concerning such account (which would other25 wise be taxable under this section) if, with respect
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1 to such transaction, the account ceases to be a quali2 fied asset account by reason of the application of

3 section 35(f)(2)(A) to such account.’’, and

4 (2) by inserting ‘‘or a qualified asset account

5 described in section 35(c)’’ in subsection (e)(1) after

6 ‘‘described in section 408(a)’’.

7 (d) FAILURE TO PROVIDE REPORTS ON QUALIFIED

8 ASSET ACCOUNTS.—Section 6693 of such Code (relating

9 to failure to provide reports on individual retirement ac10 count or annuities) is amended—

11 (1) by inserting ‘‘OR ON QUALIFIED ASSET

12 ACCOUNTS’’ after ‘‘ANNUITIES’’ in the heading of

13 such section, and

14 (2) by adding at the end of subsection (a) the

15 following: ‘‘The person required by section 35(h) to

16 file a report regarding a qualified asset account at

17 the time and in the manner required by such section

18 shall pay a penalty of $50 for each failure unless it

19 is shown that such failure is due to reasonable

20 cause.’’

21 (e) CLERICAL AMENDMENTS.—

22 (1) The table of sections for subpart C of part

23 IV of subchapter A of chapter 1 of such Code is

24 amended by striking the item relating to section 35

25 and inserting the following:

‘‘Sec. 35. Qualified asset account contributions.
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‘‘Sec. 36. Overpayments of tax.’’

1 (2) The table of sections for chapter 43 of such

2 Code is amended by striking the item relating to sec3 tion 4973 and inserting the following:

‘‘Sec. 4973. Tax on excess contributions to individual retirement

accounts, qualified asset accounts, certain 403(b)

contracts, and certain individual retirement annuities.’’

4 (3) The table of sections for subchapter B of

5 chapter 68 of such Code is amended by inserting ‘‘or

6 on qualified asset accounts’’ after ‘‘annuities’’ in the

7 item relating to section 6693.

8 (f) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to contributions made after De10 cember 31, 1995, in taxable years ending after such date.

11 SEC. 4. STATE OPTION TO INCREASE AFDC INCOME DIS12 REGARD FOR CERTAIN STEPPARENTS.

13 Section 402(a)(31) of the Social Security Act (42

14 U.S.C. 602(a)(31)) is amended—

15 (1) by striking ‘‘(A)’’ and all that follows

16 through ‘‘(C)’’ and inserting ‘‘(A) the first $120 of

17 the total of the stepparent’s earned income for the

month, plus 1 18 ⁄3 of the remainder of such earned in19 come, (B)’’; and

20 (2) by striking ‘‘(D)’’ and inserting ‘‘(C)’’.
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1 SEC. 5. ELIMINATION OF RULES THAT TREAT FAMILIES

2 DIFFERENTLY BASED ON NUMBER OF PAR3 ENTS IN THE HOME.

4 (a) IN GENERAL.—Section 402(a) of the Social Secu5 rity Act (42 U.S.C. 602(a)) is amended by striking para6 graph (41).

7 (b) CONFORMING AMENDMENTS.—

8 (1) Section 402(a)(19)(B)(i)(II) of such Act

9 (42 U.S.C. 602(a)(19)(B)(i)(II)) is amended by

10 striking ‘‘(and’’ and all that follows through

11 ‘‘407(b)(2)(B)(i))’’.

12 (2) Section 402(a)(19)(D) of such Act (42

13 U.S.C. 602(a)(19)(D)) is amended by striking ‘‘eligi14 ble’’ and all that follows through ‘‘earner’’ and in15 serting ‘‘in which both parents are living at home’’.

16 (3) Section 402(a)(19)(G)(i) of such Act (42

17 U.S.C. 602(a)(19)(G)(i)) is amended—

18 (A) in subclause (I), by striking ‘‘(whether

19 or not section 407 applies)’’; and

20 (B) in subclause (II), by striking ‘‘which is

21 eligible for aid to families with dependent chil22 dren by reason of section 407’’ and inserting

23 ‘‘in which both parents are living at home’’.

24 (4) Section 402(a)(38)(B) of such Act (42

25 U.S.C. 602(a)(38)(B)) is amended by striking ‘‘or in

26 section 407(a)’’.
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1 (5) Section 402(a) of such Act (42 U.S.C.

2 602(a)) is amended by striking paragraph (42).

3 (6) Section 403(l)(4)(A)(i) of such Act (42

4 U.S.C. 603(l)(4)(A)(i)) is amended by striking

5 ‘‘family eligible’’ and all that follows through ‘‘earn6 er’’ and inserting ‘‘2-parent family’’.

7 (7) Section 406(a)(1) of such Act (42 U.S.C.

8 606(a)(1)) is amended by striking ‘‘who has been

9 deprived’’ and all that follows through ‘‘incapacity of

10 a parent’’.

11 (8) Section 406(b)(1) of such Act (42 U.S.C.

12 606(b)(1)) is amended by striking ‘‘and if such rel13 ative’’ and all that follows through ‘‘section 407’’.

14 (9) Section 407 of such Act (42 U.S.C. 607) is

15 hereby repealed.

16 (10) Section 472(a) of such Act (42 U.S.C.

17 672(a)) is amended by striking ‘‘or of section 407’’.

18 (11) Section 473(a)(2)(A)(i) of such Act (42

19 U.S.C. 672(a)(2)(A)(i)) is amended by striking ‘‘or

20 section 407’’.

21 (12) Section 1115(b) of such Act (42 U.S.C.

22 1315(b)) is amended by striking paragraph (5).

23 (13) Section 1115 of such Act (42 U.S.C.

24 1315) is amended by striking subsection (d).
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1 (14) Section 1902(a)(10)(A)(i) of such Act (42

2 U.S.C. 1396a(a)(10)(A)(i)) is amended by striking

3 subclause (V) and by redesignating subclauses (VI)

4 and (VII) as subclauses (V) and (VI), respectively.

5 (15) Section 1905 of such Act (42 U.S.C.

6 1396d) is amended by striking subsection (m).

7 (16) Section 1905(n)(1) of such Act (42 U.S.C.

8 1396d(n)(1)) is amended—

9 (A) in subparagraph (A)—

10 (i) by striking ‘‘(or’’ and all that fol11 lows through ‘‘407)’’; and

12 (ii) by adding ‘‘or’’ at the end; and

13 (B) by striking subparagraph (B).

14 (17) Section 204(b)(2) of the Family Support

15 Act of 1988 (42 U.S.C. 681 note) is amended by

16 striking the semicolon and all that follows through

17 ‘‘1998’’.

18 SEC. 6. EXTENSION OF TRANSITIONAL CHILD CARE BENE19 FITS FOR EMPLOYED AFDC RECIPIENTS.

20 Section 402(g)(1)(A)(iii) of the Social Security Act

21 (42 U.S.C. 602(g)(1)(A)(iii)) is amended by inserting

22 ‘‘(or, if and for so long as the caretaker relative of the

23 family is employed, 24 months)’’ after ‘‘12 months’’.
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1 SEC. 7. DENIAL OF AFDC FOR APPLICANTS WHO HAVE

2 ABANDONED A CHILD.

3 Section 402(a) of the Social Security Act (42 U.S.C.

4 602(a)) is amended—

5 (1) by striking ‘‘and’’ at the end of paragraph

6 (44);

7 (2) by striking the period at the end of para8 graph (45) and inserting ‘‘; and’’; and

9 (3) by inserting after paragraph (45) the fol10 lowing:

11 ‘‘(46) notwithstanding any other provision of

12 this part, provide that an applicant for aid under the

13 State plan shall not be eligible for such aid if a court

14 has found that the applicant has abandoned a

15 child.’’.

16 SEC. 8. STATE OPTION TO DENY AFDC FOR ADDITIONAL

17 CHILDREN.

18 Section 402(a) of the Social Security Act (42 U.S.C.

19 602(a)), as amended by section 7 of this Act, is amend20 ed—

21 (1) by striking ‘‘and’’ at the end of paragraph

22 (45);

23 (2) by striking the period at the end of para24 graph (46) and inserting ‘‘; and’’; and

25 (3) by inserting after paragraph (46) the fol26 lowing:
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1 ‘‘(47) at the option of the State, provide that—

2 ‘‘(A) aid under the State plan shall not be

3 payable to a family with respect to a child born

4 to a family member—

5 ‘‘(i) while a recipient of aid under the

6 State plan; or

7 ‘‘(ii) who received aid under any State

8 plan approved under this part at any time

9 during the 10-month period that ends with

10 the birth of the child; and

11 ‘‘(B) a child with respect to whom aid is

12 not payable under the State plan under this

13 part solely by reason of subparagraph (A) shall

14 be considered to be receiving such aid for pur15 poses of eligibility for medical assistance under

16 the State plan approved under title XIX.’’.

17 SEC. 9. STATE OPTION TO DENY AFDC BENEFITS TO PAR18 ENTS WHOSE CHILDREN HAVE NOT RE19 CEIVED REQUIRED IMMUNIZATIONS.

20 (a) IN GENERAL.—Section 402(a) of the Social Secu21 rity Act (42 U.S.C. 602(a)), as amended by sections 7

22 and 8 of this Act, is amended—

23 (1) by striking ‘‘and’’ at the end of paragraph

24 (47);
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1 (2) by striking the period at the end of para2 graph (48) and inserting ‘‘; and’’; and

3 (3) by inserting after paragraph (48) the fol4 lowing:

5 ‘‘(49) at the option of the State, provide that—

6 ‘‘(A) the State will deduct and withhold

7 from the amount of aid otherwise payable under

8 the State plan to a family that is not in compli9 ance with this paragraph an amount equal to—

10 ‘‘(i) the amount of such aid otherwise

11 payable to the family; minus

12 ‘‘(ii) the amount of such aid that

13 would be payable to the family if, in mak14 ing the determination under paragraph (7)

15 with respect to a family, the needs of the

16 caretaker relative (and the spouse of such

17 relative, if section 407 applies) were not

18 taken into account;

19 ‘‘(B) the State will apply subparagraph (A)

20 to a noncompliant family for each month for

21 which such noncompliance continues;

22 ‘‘(C) the State will place into escrow all

23 amounts deducted and withheld from a family

24 pursuant to subparagraph (A);
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1 ‘‘(D) the State will pay in a lump sum to

2 a family eligible for aid under the State plan

3 that has ceased to be a noncompliant family an

4 amount equal to—

5 ‘‘(i) the total amount deducted and

6 withheld from the family pursuant to sub7 paragraph (A); divided by

8 ‘‘(ii) the number of months for which

9 amounts have been so withheld and de10 ducted;

11 ‘‘(E) the State shall consider a family to

12 be not in compliance with this paragraph if the

13 family includes a dependent child who has not

14 attained 6 years of age, and the State agency

15 has not received from 1 or more physicians

16 written verification (on a form prescribed by the

17 State) that the child has been immunized in ac18 cordance with recommendations issued by the

19 Surgeon General of the Public Health Service,

20 unless the child has not been so immunized for

21 good cause (as determined by the State in ac22 cordance with regulations prescribed by the

23 Secretary), including—
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1 ‘‘(i) medical contraindication, as evi2 denced by written notice from a physician

3 (on a form prescribed by the State);

4 ‘‘(ii) an excessive distance between the

5 residence of the child and the nearest loca6 tion at which the child could be so immu7 nized;

8 ‘‘(iii) the lack of reasonable access to

9 transportation to any location at which the

10 child could be so immunized;

11 ‘‘(iv) an excessive waiting period at

12 any such location before the child could be

13 so immunized;

14 ‘‘(v) religious objection to the child

15 being so immunized; and

16 ‘‘(vi) an illness of a member of the

17 family that has prevented the child from

18 being accompanied by a responsible adult

19 to any such location; and

20 ‘‘(F) the State will conduct appropriate

21 education and outreach activities designed to—

22 ‘‘(i) increase public awareness of the

23 importance of preventive health care and

24 immunizations for preschool children; and

25 ‘‘(ii) inform the public about—
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1 ‘‘(I) the availability of preventive

2 health care and immunization services

3 for preschool children;

4 ‘‘(II) any transportation, child

5 care, or other support services that

6 may be available to assist parents in

7 obtaining such services for their chil8 dren; and

9 ‘‘(III) the clinics at which any

10 child may receive immunizations free

11 or at a reduced charge.’’.

12 (b) ISSUANCE OF IMMUNIZATION RECOMMENDA13 TIONS BY THE SURGEON GENERAL OF THE PUBLIC

14 HEALTH SERVICE.—After taking into consideration the

15 then most recent report of the Committee on Infectious

16 Diseases of the American Academy of Pediatrics, the Sur17 geon General of the Public Health Service shall issue, and

18 revise from time to time, recommendations for the immu19 nization of children under 6 years of age. With respect

20 to each recommended immunization, such recommenda21 tion shall include—

22 (1) contraindications (if any) that should be

23 identified to exempt a child from receiving such im24 munization, and
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1 (2) remedial action that may be taken to mini2 mize the adverse effect of failure to administer such

3 immunization to a child at the recommended age.

4 SEC. 10. STATE OPTION TO DISREGARD INCOME AND RE5 SOURCES DESIGNATED FOR EDUCATION,

6 TRAINING, EMPLOYABILITY, OR SELF-EM7 PLOYMENT.

8 (a) RESOURCE DISREGARD.—Section 402(a)(7)(B)

9 of the Social Security Act (42 U.S.C. 602(a)(7)(B)) is

10 amended—

11 (1) by striking ‘‘or’’ at the end of clause (iii);

12 and

13 (2) by inserting ‘‘, or (v) at the option of the

14 State, in the case of the family, not more than

15 $9,000 in 1 qualified asset account (as defined in

16 section 406(i)) of the family’’ before the semicolon.

17 (b) DISREGARD OF INCOME FROM QUALIFIED ASSET

18 ACCOUNTS.—Section 402(a)(8)(A) of such Act (42 U.S.C.

19 602(a)(8)(A)) is amended—

20 (1) by striking ‘‘and’’ at the end of clause (vii);

21 and

22 (2) by inserting after clause (viii) the following:

23 ‘‘(ix) at the option of the State, may

24 disregard—
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1 ‘‘(I) any interest or income

2 earned on 1 qualified asset account

3 (as defined in section 406(i)), if not

4 more than $2,000 has been deposited

5 in the account during the immediately

6 preceding 12-month period, but only

7 to the extent that the total amount in

8 the account, after the payment of

9 such interest or income, does not ex10 ceed $9,000; and

11 ‘‘(II) any qualified distribution

12 (as defined in section 406(i)(2)) from

13 a qualified asset account (as defined

14 in section 406(i)(1)); and’’.

15 (c) NONRECURRING LUMP SUM EXEMPT FROM

16 LUMP SUM RULE.—Section 402(a)(17) of such Act (42

17 U.S.C. 602(a)(17)) is amended by adding at the end the

18 following: ‘‘; and, at the option of the State, that this para19 graph shall not apply to earned or unearned income re20 ceived in a month on a nonrecurring basis to the extent

21 that such income is deposited in a qualified asset account

22 (as defined in section 406(i)) in which not more than

23 $2,000 has been deposited during the immediately preced24 ing 12-month period and the total amounts in which, after

25 such placement, does not exceed $9,000;’’.
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1 (d) DEFINITIONS.—Section 406 of such Act (42

2 U.S.C. 606) is amended by adding at the end the follow3 ing:

4 ‘‘(i)(1) The term ‘qualified asset account’ means an

5 account established at a financial institution by a recipient

6 of aid to families with dependent children, in which not

7 more than $2,000 has been deposited during any period

8 of 12 consecutive months, for the purpose of saving money

9 to—

10 ‘‘(A) enable a member of the family of the re11 cipient to attend an education or training program;

12 ‘‘(B) enable a member of the family to improve

13 his or her employability (including self-employment),

14 including through the purchase of an automobile;

15 ‘‘(C) purchase a home for the family;

16 ‘‘(D) change the family residence; or

17 ‘‘(E) operate or establish a commercial enter18 prise which has 5 or fewer employees, 1 or more of

19 whom owns or would own the enterprise.

20 ‘‘(2) The term ‘qualified distribution’ means a dis21 tribution from a qualified asset account for expenses di22 rectly related to 1 or more of the purposes described in

23 paragraph (1).’’.
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1 SEC. 11. STATE OPTION TO INCREASE LIMITATION ON DIS2 REGARD OF EQUITY IN AN AUTOMOBILE.

3 Section 402(a)(7)(B)(i) of the Social Security Act

4 (42 U.S.C. 602(a)(7)(B)(i)) is amended by inserting ‘‘(or,

5 at the option of the State, $3,000)’’ before ‘‘, (ii)’’.

6 SEC. 12. TREATMENT OF STUDENT EARNINGS UNDER THE

7 AFDC PROGRAM.

8 (a) EXEMPTION FROM RESOURCES OF EXEMPT

9 EARNINGS OF A CHILD.—Section 402(a)(7)(B) of the So10 cial Security Act (42 U.S.C. 602(a)(7)(B)), as amended

11 by section 10(a) of this Act, is amended—

12 (1) by striking ‘‘or’’ at the end of clause (iv);

13 and

14 (2) by inserting ‘‘, or (vi) the earned income of

15 any child to the extent disregarded under paragraph

16 (8)’’ before the semicolon.

17 (b) EXEMPT EARNINGS OF A CHILD TO BE DIS18 REGARDED IN DETERMINING WHETHER FAMILY INCOME

19 EXCEEDS NEED STANDARD.—Section 402(a)(18) of such

20 Act (42 U.S.C. 602(a)(18)) is amended by striking ‘‘para21 graph (8)(A)(v) or 8(A)(viii)’’ and inserting ‘‘clause (i),

22 (v), or (viii) of paragraph (8)(A)’’.

23 (c) DISREGARD OF EARNINGS OF STUDENTS AND IN24 COME OF DEPENDENT CHILD FROM A JTPA PRO25 GRAM.—Section 402(a)(8)(A) of such Act (42 U.S.C.

26 602(a)(8)(A)) is amended—
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1 (1) in clause (i), by inserting ‘‘(including a

2 child (whether or not married) who has not attained

3 20 years of age)’’ after ‘‘dependent child’’; and

4 (2) in clause (v)—

5 (A) by inserting ‘‘that portion of’’ before

6 ‘‘the income’’;

7 (B) by inserting ‘‘(including any individual

8 (whether or not married) who has not attained

9 20 years of age)’’ after ‘‘dependent child’’; and

10 (C) by striking ‘‘in such amounts, and for

11 such period of time (not to exceed six months

12 with respect to earned income)’’ and inserting

13 ‘‘to the extent not exceeding the income official

14 poverty line (as defined by the Office of Man15 agement and Budget, and revised annually in

16 accordance with section 673(2) of the Omnibus

17 Budget Reconciliation Act of 1981) applicable

18 to the family, for such period of time’’.

19 SEC. 13. EFFECTIVE DATE.

20 Except as provided in section 3(f), the amendments

21 made by this Act shall apply to calendar quarters begin22 ning on or after January 1, 1996.

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