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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4667 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4667

 To allow State and local governments to design their own programs for 
moving welfare recipients from dependence to economic self-sufficiency, 
   and to allow low-income individuals to use personal savings as a 
                 foundation for achieving independence.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 1994

  Mr. Andrews of New Jersey (for himself, Mr. Weldon, and Mr. Kolbe) 
   introduced the following bill; which was referred jointly to the 
   Committees on Ways and Means, Banking, Finance and Urban Affairs, 
       Agriculture, Energy and Commerce, and Education and Labor

_______________________________________________________________________

                                 A BILL

 
 To allow State and local governments to design their own programs for 
moving welfare recipients from dependency to economic self-sufficiency, 
   and to allow low-income individuals to use personal savings as a 
                 foundation for achieving independence.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Welfare Innovation and Empowerment 
Act of 1994''.

    TITLE I--STATE AND LOCAL WELFARE-TO-WORK DEMONSTRATION PROJECTS

SEC. 101. INTERAGENCY WAIVER REQUEST BOARD.

    (a) Establishment and Purpose.--In order to streamline and expedite 
Federal Government approval of State requests to conduct demonstration 
projects under which eligible Federal programs may be consolidated into 
a single program or programs designed to move welfare recipients from 
welfare to work, there is established an Interagency Waiver Request 
Board.
    (b) Membership.--The Board shall consist of 8 members, as follows:
            (1) 1 individual appointed by the President from the White 
        House Domestic Policy Council.
            (2) The Secretary of Health and Human Services (or the 
        designee of the Secretary).
            (3) The Secretary of Agriculture (or the designee of the 
        Secretary).
            (4) The Secretary of Labor (or the designee of the 
        Secretary).
            (5) The Secretary of Housing and Urban Development (or the 
        designee of the Secretary).
            (6) The Secretary of Education (or the designee of the 
        Secretary).
            (7) The Secretary of the Interior (or the designee of the 
        Secretary).
            (8) The Director of the Office of Management and Budget (or 
        the designee of the Director).
    (c) Chairperson.--The member of the Board appointed under 
subsection (b)(1) shall serve as Chairperson of the Board.
    (d) Vacancies.--A vacancy in the position of Chairman shall be 
filled in the manner in which the original appointment was made.
    (e) No Additional Compensation.--The members of the Board may not 
be provided additional pay, allowances, or benefits by reason of their 
service on the Board.
    (f) Powers.--
            (1) Assistance of other federal entities.--A member of the 
        Board shall detail to the Chairperson, on a nonreimbursable 
        basis, such officers and employees of the department or agency 
        headed by the member, and shall make available to the 
        Chairperson such assistance, as the Chairperson may require to 
        carry out the activities of the Chairperson.
            (2) Use of united states mails.--The Chairperson may use 
        the United States mails in the same manner and under the same 
        conditions as other departments and agencies of the United 
        States.
    (g) Procedure.--
            (1) Meetings.--The Board shall meet at the call of the 
        Chairperson or of at least 3 members.
            (2) Notice of decisions.--The Chairperson shall provide the 
        Board with advance notice of any action that the Chairperson 
        intends to take under this title.
            (3) Power of board majority to overrule chairperson.--
        Notwithstanding any other provision of this title, a majority 
        of the members of the Board with respect to a matter may 
        overrule any decision or nullify any action of the Chairperson 
        under this title with respect to the matter.
    (h) Annual Reports.--The Chairperson shall transmit annually to the 
Congress a report containing a detailed statement of the activities of 
the Board during the year covered by the report.

SEC. 102. APPLICATION TO IMPLEMENT DEMONSTRATION PROJECTS.

    Any State desiring to implement a welfare-to-work demonstration 
project using funds or assistance from eligible Federal programs may 
submit to the Chairperson an application that contains the following:
            (1) Plan.--A plan that sets forth the following:
                    (A) Geographic area.--The geographic area in which 
                the demonstration project is to be conducted and the 
                rationale for so defining the area.
                    (B) Recipients.--The particular groups of 
                individuals, by age, service needs, economic 
                circumstances, or other defining factors, who are to 
                receive services and benefits under the plan.
                    (C) Objectives and performance criteria.--Specific 
                objectives and criteria for measuring levels of 
                performance, a description of how such objectives and 
                levels of performance are expected to be achieved, a 
                description of how such criteria are to be used to 
                measure performance, and a system for the comprehensive 
                evaluation of the impact of the demonstration project 
                on participants, the community, and the costs of 
                conducting the project.
                    (D) Covered programs.--
                            (i) In general.--The eligible Federal 
                        programs through which funds or assistance are 
                        to be provided to implement the plan, and the 
                        specific benefits that are to be provided under 
                        the plan pursuant to the program or programs, 
                        including criteria for determining eligibility 
                        for benefits under the plan, the services 
                        available, the amounts and form (such as cash, 
                        in-kind contributions, or financial 
                        instruments) of non-service benefits.
                            (ii) Time-limited afdc benefits.--If the 
                        plan includes the program specified in section 
                        106(4)(A), the plan may include a commitment to 
                        deny benefits under the program to any 
                        individual who has--
                                    (I) received cash assistance under 
                                the program for such period of not less 
                                than 1 year as the State deems 
                                appropriate, and participated in work 
                                activities under the program for such 
                                additional period of not less than 1 
                                year as the State deems appropriate; or
                                    (II) received cash assistance under 
                                the program for such period of not less 
                                than 2 years as the State deems 
                                appropriate.
                    (E) Provisions of law to be waived.--A list of the 
                provisions of law or regulation which prevent the State 
                from implementing the plan.
                    (F) Sources of non-federal funds.--A description of 
                the sources of all non-Federal funds that are to be 
                used to carry out the program or programs referred to 
                in subparagraph (D).
                    (G) Fiscal control and accountability.--Fiscal 
                control and related accountability procedures that are 
                to apply under the plan.
            (2) Assurances.--
                    (A) Provision of plan to affected organs of 
                government in the state.--Assurances that a copy of the 
                plan has been provided to all affected organs of 
                government in the geographic area referred to in 
                paragraph (1)(A).
                    (B) Consultation with potential participants.--
                Assurances that a committee established under section 
                105 has participated in the development of the plan.
            (3) Request for authority to implement plan.--A request 
        that the Chairperson authorize the applicant to implement the 
        plan, and waive the application of any Federal statutory or 
        regulatory requirement to the extent necessary to enable such 
        implementation.
            (4) Other information.--Any other information the 
        Chairperson may require to approve the application.

SEC. 103. REVIEW AND APPROVAL OF APPLICATIONS; WAIVERS.

    (a) Review.--Upon receipt of an application submitted in accordance 
with section 102, the Chairperson shall--
            (1) approve or disapprove the application within 90 days 
        after such receipt;
            (2) notify the applicant in writing of such approval or 
        disapproval; and
            (3) if the application is disapproved, include in the 
        notice of disapproval a written justification of the reasons 
        therefor.
    (b) Conditional Approval.--The Chairperson may condition approval 
of such an application on the acceptance by the applicant, and by any 
parties whose consent or approval is required under section 102, of 
specified modifications to the application.
    (c) Approval.--
            (1) Requirements.--The Chairperson shall approve such an 
        application, subject to paragraph (2), if the Chairperson 
        determines that--
                    (A) the plan contained in the application is 
                adequate to ensure that individuals and families who 
                receive benefits under the covered program or programs 
                included in the plan will continue to receive benefits 
                that meet the needs intended to be met under the 
                program or programs, to the extent consistent with a 
                commitment made pursuant to section 102(1)(D)(ii);
                    (B) implementation of the plan will not result in 
                an increase in the total amount of obligations or 
                outlays of discretionary appropriations or direct 
                spending under the covered program or programs included 
                in the plan, over the amounts of such obligations and 
                outlays that would occur under the program or programs 
                without implementation of the plan; and
                    (C) the applicant has designed an evaluation 
                process that is adequate for assessing performance of 
                the demonstration project once implemented.
            (3) Implementation period.--Subject to subsections (e)(2) 
        and (f)(1) of section 104(e), a demonstration project approved 
        by the Chairperson may be conducted for such period as is 
        specified in the application to conduct the project, or for 7 
        years, whichever is of lesser duration.
    (d) Waivers.--
            (1) In general.--Subject to this subsection, the 
        Chairperson may waive any requirement applicable under Federal 
        law to the administration of, or provision of benefits under, 
        any covered program included in an application approved under 
        this title, if the waiver is reasonably necessary for the 
        implementation of the plan contained in the approved 
        application.
            (2) Funding limitation.--This subsection shall not be 
        construed to authorize the Chairperson to waive the application 
        to any State of a provision of law or regulation applicable to 
        a program if the waiver would result in net payments by the 
        Federal Government to the State under the program for a fiscal 
        year in excess of the net payments which would otherwise be so 
        made to the State.
            (3) Civil rights laws excepted.--This subsection shall not 
        be construed to authorize the Chairperson to waive any 
        requirement established by statute or regulation under--
                    (A) title VI of the Civil Rights Act of 1964 (42 
                U.S.C. 2000d et seq.);
                    (B) section 504 of the Rehabilitation Act of 1973 
                (29 U.S.C. 701 et seq.);
                    (C) title IX of the Education Amendments of 1972 
                (86 Stat. 373 et seq.);
                    (D) the Age Discrimination Act of 1975 (42 U.S.C. 
                6101 et seq.); or
                    (E) the Americans With Disabilities Act of 1990.

SEC. 104. IMPLEMENTATION; EVALUATIONS.

    (a) In General.--Notwithstanding any other provision of law, 
benefits under any covered program included in an application approved 
under this title shall be paid and administered in the manner specified 
in the approved application.
    (b) State Evaluations.--
            (1) In general.--Any State whose application is approved 
        under this title shall, in accordance with regulations issued 
        by the Chairperson--
                    (A) submit such reports on, and cooperate in such 
                audits of, the implementation of the plan contained in 
                the application; and
                    (B) periodically evaluate the effects that 
                implementation of the plan has had on--
                            (i) individuals who receive benefits under 
                        a covered program included in the plan;
                            (ii) communities where such individuals 
                        live; and
                            (iii) costs of administering the covered 
                        program or programs included in the plan.
            (2) Annual reports.--Not later than 90 days after the end 
        of the 1-year period beginning on the date the application of a 
        State is approved under this title, and annually thereafter, 
        the State shall submit to the Chairperson a report on the 
        principal activities and achievements under the demonstration 
        project conducted under the plan contained in the application, 
        during the period covered by the report, and the report shall 
        compare those achievements to the objectives and performance 
        criteria included in the plan pursuant to section 102(1)(C).
    (c) Expansion of Successful Demonstration Projects After 2 Years.--
            (1) Application.--If, at any time after the first 2 years 
        of the period for which the Chairperson, under section 
        103(c)(3), has authorized a State to conduct a demonstration 
        project under this title, the State determines that the project 
        has demonstrated its worth and proven to be a superior way to 
        provide benefits under the covered program or programs included 
        in the plan under which the project has been conducted, and 
        that the project should be expanded geographically or should be 
        available to a larger population, the State may submit to the 
        Chairperson an application to amend the approved application to 
        conduct the project to provide for the expansion of the project 
        to such area or areas of the State, or the availability of the 
        project to such additional categories of persons in the State, 
        as the State may select with such modifications to the project 
        as the State may deem appropriate, which shall include a report 
        on the implementation of the project and a full evaluation of 
        the successes and shortcomings of the project and the effects 
        of the project on individuals who receive benefits under such 
        program or programs.
            (2) Evaluation and approval by the chairperson.--Upon 
        receipt of an application under paragraph (1) with respect to a 
        demonstration project, the Chairperson shall evaluate the 
        project based on the report included in the application, using 
        the evaluation criteria set forth in the approved application 
        to conduct the project, and may approve such amendments to the 
        application as the Chairperson deems appropriate.
    (d) Final Report.--Not later than 45 days after the end of the 
period for which the Chairperson, under section 103(c)(3), has 
authorized a State to conduct a demonstration project under this title, 
the State shall submit to the Chairperson a report on the 
implementation of the project, which shall include a full evaluation of 
the successes and shortcomings of the project and the effects of such 
implementation on individuals who receive benefits under such program 
or programs.
    (e) Authority To Temporarily or Permanently Extend Successful 
Demonstration Projects.--
            (1) Application.--Any State may submit to the Chairperson 
        an application to conduct a demonstration project under this 
        title after the period referred to in subsection (d), for such 
        additional period as the State deems appropriate or for an 
        indefinite period.
            (2) Evaluation and approval by the chairperson.--Upon 
        receipt of an application under paragraph (1) of this 
        subsection with respect to a demonstration project, the 
        Chairperson shall evaluate the project based on the report 
        submitted with respect to the project under subsection (d), 
        using the evaluation criteria set forth in the approved 
        application to conduct the project, and may authorize the State 
        to conduct the project for such additional definite or 
        indefinite period as the Chairperson deems appropriate.
    (f) Suspension and Termination.--
            (1) In general.--The Chairperson may require a State to 
        suspend or terminate implementation of part or all of a plan 
        under an application approved under this title if--
                    (A) the Chairperson finds that the applicant has 
                failed to carry out a covered program in accordance 
                with any applicable provision of law or regulation; or
                    (B) after consultation with the head of each 
                Federal agency responsible for administering a covered 
                program included in the approved application, the 
                Chairperson determines that the objectives and 
                performance criteria included in the plan pursuant to 
                section 102(1)(C) have not been met.
            (2) Timing.--In requiring the implementation of a plan to 
        be terminated under paragraph (1), the Chairperson shall allow 
        a reasonable period of time for appropriate Federal, State, and 
        local agencies to resume administration of the covered program 
        or programs included in the application that contains the plan.

SEC. 105. CONSULTATION REQUIREMENT.

    (a) In General.--A State desiring to submit an application under 
section 102 shall consult with potential participants in accordance 
with this section.
    (b) Purpose.--Any State submitting an application under this title 
shall seek the advice of potential participants in the development and 
implementation of the plan contained in the application, including with 
respect to--
            (1) conducting public hearings;
            (2) representing the interest of low-income individuals and 
        families; and
            (3) reviewing and commenting on all community policies, 
        programs, and actions under the plan which affect low-income 
        individuals and families, with the purpose of assuring maximum 
        coordination and responsiveness of the plan in providing 
        benefits under the plan to those individuals and families.
    (c) Participants.--The State shall select the participants in the 
consultation process, which shall include--
            (1) eligible welfare recipients, including minorities, who 
        are participants or who qualify to participate in eligible 
        Federal programs;
            (2) persons with leadership experience in the private and 
        voluntary sectors;
            (3) local elected officials;
            (4) members of the general public; and
            (5) individuals and representatives of community and 
        business organizations who will help to enhance the leadership 
        role of the State in developing a plan.

SEC. 106. DEFINITIONS.

    As used in this title:
            (1) Board.--The term ``Board'' means the Interagency Waiver 
        Review Board established by section 101.
            (2) Chairperson.--The term ``Chairperson'' means the 
        Chairperson of the Board.
            (3) Covered program.--The term ``covered program'' means, 
        with respect to a plan, the eligible Federal programs addressed 
        in the plan.
            (4) Eligible federal program.--The term ``eligible Federal 
        program'' means any of the following:
                    (A) The program of aid and services to needy 
                families with children under part A of title IV of the 
                Social Security Act.
                    (B) The food stamp program, as defined in section 
                3(h) of the Food Stamp Act of 1977.
                    (C) The supplemental security income program under 
                title XVI of the Social Security Act.
                    (D) Any program under the Job Training Partnership 
                Act.
                    (E) The program of rental assistance on behalf of 
                low-income families provided under section 8 of the 
                United States Housing Act of 1937 (42 U.S.C. 1437f).
                    (F) The program of assistance to public housing 
                under title I of the United States Housing Act of 1937 
                (42 U.S.C. 1437 et seq.).
                    (G) The program for assistance for affordable 
                housing under the HOME Investment Partnerships Act (42 
                U.S.C. 12721 et seq.).
                    (H) The program of assistance payments on behalf of 
                homeowners under section 235 of the National Housing 
                Act (12 U.S.C. 1715z).
                    (I) The program of interest reduction payments 
                pursuant to contracts entered into by the Secretary of 
                Housing and Urban Development under section 236 of the 
                National Housing Act (12 U.S.C. 1715z-1).
                    (J) The program of rent supplement payments on 
                behalf of qualified tenants pursuant to contracts 
                entered into under section 101 of the Housing and Urban 
                Development Act of 1965 (12 U.S.C. 1701s).
                    (K) The program for community development block 
                grants under title I of the Housing and Community 
                Development Act of 1974 (42 U.S.C. 5301 et seq.).
                    (L) The loan program under section 502 of the 
                Housing Act of 1949 (42 U.S.C. 1472).
                    (M) The program for grants for housing in remote 
                rural areas under section 502(f)(1) of the Housing Act 
                of 1949 (42 U.S.C. 1472(f)(1)).
                    (N) The loan and grant programs under section 504 
                of the Housing Act of 1949 (42 U.S.C. 1474) for repairs 
                and improvements to rural dwellings.
                    (O) The program for project preparation grants for 
                housing in underserved rural areas under section 
                509(f)(6) of the Housing Act of 1949 (42 U.S.C. 
                1479(f)(6)).
                    (P) The program of loans for rental and cooperative 
                housing under section 515 of the Housing Act of 1949 
                (42 U.S.C. 1485).
                    (Q) The loan and assistance programs under sections 
                514 and 516 of the Housing Act of 1949 (42 U.S.C. 1484, 
                1486) for housing for farm labor.
                    (R) The program of rental assistance payments 
                pursuant to contracts entered into under section 
                521(a)(2)(A) of the Housing Act of 1949 (42 U.S.C. 
                1490a(a)(2)(A)).
                    (S) The program of grants and loans for mutual and 
                self-help housing and technical assistance under 
                section 523 of the Housing Act of 1949 (42 U.S.C. 
                1490c).
                    (T) The program of site loans under section 524 of 
                the Housing Act of 1949 (42 U.S.C. 1490d).
                    (U) The program of grants for preservation and 
                rehabilitation of housing under section 533 of the 
                Housing Act of 1949 (42 U.S.C. 1490m).
                    (V) The program for rural housing voucher 
                assistance under section 542 of the Housing Act of 1949 
                (42 U.S.C. 1490r).
                    (W) The program under the Low-Income Energy 
                Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
                    (X) The program of block grants to State for social 
                services under title XX of the Social Security Act.
            (5) State.--
                    (A) In general.--The term ``State'' means the 50 
                States, the District of Columbia, Puerto Rico, American 
                Samoa, Guam, and the Virgin Islands.
                    (B) Indian tribes.--In the case of an eligible 
                Federal program under which assistance is provided with 
                respect to an Indian tribe, the Indian tribal 
                organization is deemed to be a State.

SEC. 107. REPORTS.

    (a) In General.--The Comptroller General of the United States shall 
submit to the Congress 2 reports that--
            (1) describe the extent to which plans for demonstration 
        projects have been implemented in accordance with this title;
            (2) evaluate the effectiveness of covered Federal 
        assistance programs included in such plans; and
            (3) include recommendations with respect to whether to 
        continue activities under this title.
    (b) Timing.--The Comptroller General shall submit a report under 
subsection (a) not later than 3 years after the date of the enactment 
of this Act, and another such report not later than 7 years after such 
date of enactment.

SEC. 108. PAYMENTS TO STATES FOR MOVING AFDC AND SSI RECIPIENTS TO 
              UNSUBSIDIZED PRIVATE EMPLOYMENT.

    (a) In General.--Subject to section 109, the Secretary of Health 
and Human Services shall make payments in accordance with subsection 
(b) of this section to each State with respect to each State resident 
who, as a result of participation in a demonstration project or 
projects conducted by the State under this title, ends the receipt of 
aid to families with dependent children under the State plan approved 
under part A of title IV of the Social Security Act, or supplemental 
security income benefits under title XVI of such Act, and becomes 
employed in an unsubsidized position in the private sector.
    (b) Amounts and Timing of Payments.--
            (1) 6-month payment.--The Secretary shall pay the State 
        $500 with respect to a State resident described in subsection 
        (a), on the first day after the resident has been employed for 
        6 months as described in subsection (a).
            (2) 1-year payment.--The Secretary shall pay the State $500 
        with respect to a State resident described in subsection (a), 
        on the first day after the resident has been employed for 1 
        year as described in subsection (a).
            (3) Subsequent payments.--The Secretary shall pay the State 
        $1,000 with respect to a State resident described in subsection 
        (a), on the first day after each of the 2nd, 3rd, 4th, and 5th 
        years that the resident has been employed as described in 
        subsection (a).

SEC. 109. SUNSET.

    Any authority provided under this title shall expire 7 years after 
the date of the enactment of this Act.

                 TITLE II--EXPANSION OF STATE AUTHORITY

SEC. 201. AUTHORITY TO CONTRACT WITH PRIVATE ENTITIES FOR CASE 
              MANAGEMENT.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (44);
            (2) by striking the period at the end of paragraph (45) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (45) the following:
            ``(46) at the option of the State, provide that the State 
        agency may enter into contracts with private parties approved 
        by the State under which such parties will provide case 
        management services for the State program operated under this 
        part.''.

SEC. 202. AUTHORITY TO DETERMINE BENEFITS PAYABLE WITH RESPECT TO 
              CHILDREN CONCEIVED BY AFDC RECIPIENT.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as 
amended by section 201 of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (45);
            (2) by striking the period at the end of paragraph (46) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (46) the following:
            ``(47) at the option of the State, provide that the State 
        may establish the amount (if any) of aid payable under the 
        State plan with respect to a child conceived by a recipient of 
        such aid, in accordance with such rules (and exceptions to such 
        rules) as the State considers appropriate.''.

SEC. 203. AUTHORITY TO NOT TREAT FAMILIES DIFFERENTLY BASED ON THE 
              NUMBER OF PARENTS IN THE HOME.

    (a) In General.--
            (1) Section 402(a)(41) of the Social Security Act (42 
        U.S.C. 602(a)(41)) is amended by inserting ``at the option of 
        the State,'' after ``(41)''.
            (2) Section 407(a) of such Act (42 U.S.C. 607(a)) is 
        amended by inserting ``at the option of the State,'' after 
        ``shall,''.
    (b) Conforming Amdendments.--
            (1) Section 402(a)(38)(B) of such Act (42 U.S.C. 
        602(a)(38)(B)) is amended by inserting ``, if the State 
        exerceises the option provided under paragraph (41),'' after 
        ``406(a) or''.
            (2) Section 406(a)(1) of such Act (42 U.S.C. 606(a)(1)) is 
        amended by inserting ``, if a resident of a State that has 
        exercised the option provided under section 402(a)(41),'' after 
        ``(1) who''.
            (3) Section 406(b)(1) of such Act (42 U.S.C. 606(b)(1)) is 
        amended by inserting ``, in the case of a State that has 
        exercised the option provided under section 402(a)(41), after 
        ``mental incapacity of a parent or''.
            (4) Section 472(a) of such Act (42 U.S.C. 672(a)) is 
        amended by inserting ``, in the case of a State that has 
        exercised the option provided under section 402(a)(41), after 
        ``406(a) or''.
            (5) Section 473(a)(2)(A)(i) of such Act (42 U.S.C. 
        672(a)(2)(A)(i)) is amended by inserting ``, in the case of a 
        State that has exercised the option provided under section 
        402(a)(41), after ``406(a) or''.

SEC. 204. AUTHORITY TO CONTRACT WITH PRIVATE ENTITIES FOR JOB TRAINING.

    Section 402(a) of the Social Security Act (42 U.S.C. 602(a)), as 
amended by sections 201 and 202 of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (46);
            (2) by striking the period at the end of paragraph (47) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (47) the following:
            ``(48) at the option of the State, provide that any entity 
        approved by the State may provide job training to recipients of 
        aid under the State plan who are--
                    ``(A) required or allowed to participate in the 
                program established by the State under part F; or
                    ``(B) eligible to participate in a program under 
                the Job Training Partnership Act.''.

               TITLE III--INDIVIDUAL DEVELOPMENT ACCOUNTS

SEC. 301. INDIVIDUAL DEVELOPMENT ACCOUNTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 137 as section 
138 and by inserting after section 136 the following new section:

``SEC. 137. INDIVIDUAL DEVELOPMENT ACCOUNTS.

    ``(a) Earnings Exempt From Tax.--Except as otherwise provided in 
this section, an individual development account is exempt from taxation 
under this subtitle.
    ``(b) Individual Development Account.--For purposes of this 
section, the term `individual development account' means a trust 
created or organized in the United States exclusively for the purpose 
of paying the qualified expenses of the individual for whom the trust 
is maintained, but only if the written governing instrument creating 
the trust meets the following requirements:
            ``(1) No contribution will be accepted unless--
                    ``(A) the contribution is made by--
                            ``(i) the individual for whom the trust is 
                        maintained, or
                            ``(ii) any entity approved by the State for 
                        purposes of making matching contributions to 
                        such account on behalf of such individual,
                    ``(B) such individual, for the taxable year for 
                which such contribution is made, is an eligible 
                individual,
                    ``(C) the contributions for such taxable year do 
                not exceed the contribution limitations of subsection 
                (d),
                    ``(D) the contribution is in cash, and
                    ``(E) the contribution is made before January 1, 
                2001.
            ``(2) The trustee is a bank (as defined in section 408(n)) 
        or another person who demonstrates to the satisfaction of the 
        Secretary that the manner in which such person will administer 
        the trust will be consistent with the requirements of this 
        section.
            ``(3) No part of the trust assets will be invested in life 
        insurance contracts.
            ``(4) The assets of the trust will not be commingled with 
        other property except in a common trust fund or common 
        investment fund.
            ``(5) Any balance in the account on the day after the date 
        on which the individual for whose benefit the trust is 
        established dies will be distributed within 30 days of such 
        date as directed by such individual to another individual 
        development account established for the benefit of an eligible 
        individual.
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means any 
        individual if the individual is a member of a household that 
        meets the following requirements:
                    ``(A) Income test.--The income of the household 
                (for the calendar year preceding the calendar year in 
                which the taxable year begins) is not more than 150 
                percent of the poverty threshold for such period.
                    ``(B) Net worth test.--The net worth of the 
                household, as of the close of such preceding calendar 
                year, is not more than $10,000.
            ``(2) Household.--The term `household' means all 
        individuals who share use of a dwelling unit as primary 
        quarters for living and eating separate from other individuals.
            ``(3) Household net worth.--
                    ``(A) In general.--The term `net worth' means, with 
                respect to a household, the aggregate market value of 
                all assets not excluded under subparagraph (B) that are 
                owned in whole or in part by any member of the 
                household, minus the obligations or debts of any member 
                of the household.
                    ``(B) Assets excluded.--The following assets (and 
                obligations or debts with respect thereto) shall be 
                excluded in determining the net worth of any household:
                            ``(i) $20,000 of home equity.--The lesser 
                        of--
                                    ``(I) the equity of the members of 
                                the household in the dwelling unit in 
                                which the members reside; or
                                    ``(II) $20,000.
                            ``(ii) Motor vehicle.--The most valuable 
                        motor vehicle owned by any member of the 
                        household.
                            ``(iii) Furniture; appliances; clothing.--
                        All furniture, appliances, and clothing used by 
                        any member of the household in the course of 
                        daily living.
                            ``(iv) Art objects.--All art objects 
                        displayed in the dwelling unit in which the 
                        members of the household reside.
                            ``(v) Jewelry.--All jewelry owned by any 
                        member of the household.
                            ``(vi) Individual development accounts.--
                        All individual development accounts of members 
                        of the household.
            ``(4) Poverty threshold.--The term `poverty threshold' 
        means, with respect to a calendar year, the Federal poverty 
        line for the calendar year for the relevant family size, as 
        defined annually by the Bureau of the Census.
    ``(d) Contribution Limitations.--
            ``(1) In general.--The contributions to an individual 
        development account do not exceed the limitations of this 
        subsection for any taxable year if the contributions for such 
        year do not exceed the lesser of--
                    ``(A) $2,000, or
                    ``(B) the excess (if any) of $10,000 over the 
                account balance as of the close of the preceding 
                taxable year.
            ``(2) Waiver of $2,000 limit in certain cases.--Paragraph 
        (1)(A) shall not apply to contributions of lump-sum gains such 
        as inheritances, proceeds from lotteries, insurance payments, 
        or payments resulting from court proceedings.
    ``(e) Tax Treatment of Distributions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount paid or distributed out of an individual 
        development account shall be included in the gross income of 
        the payee or distributee for the taxable year in which the 
        payment or distribution is received.
            ``(2) Distribution used to pay qualified expenses.--
        Paragraph (1) shall not apply to any payment or distribution 
        out of an individual development account to the extent such 
        payment or distribution is used exclusively to pay the 
        qualified expenses incurred by the eligible individual for 
        whose benefit the account is established.
            ``(3) Qualified expenses.--For purposes of this section, 
        the term `qualified expenses' means 1 or more of the following:
                    ``(A) Post-secondary education expenses.--Post-
                secondary educational expenses paid from an individual 
                development account directly to an eligible educational 
                institution. For purposes of this subparagraph--
                            ``(i) In general.--The term `post-secondary 
                        educational expenses' means--
                                    ``(I) tuition and fees required for 
                                the enrollment or attendance of a 
                                student at an eligible educational 
                                institution,
                                    ``(II) fees, books, supplies, and 
                                equipment required for courses of 
                                instruction at an eligible educational 
                                institution, and
                                    ``(III) a reasonable allowance for 
                                meals, lodging, transportation, and 
                                child care, while attending an eligible 
                                educational institution.
                            ``(ii) Eligible educational institution.--
                        The term `eligible educational institution' 
                        means the following:
                                    ``(I) Institution of higher 
                                education.--An institution described in 
                                section 481(a)(1) or 1201(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1088(a)(1) or 1141(a)), as such 
                                sections are in effect on the date of 
                                the enactment of this section.
                                    ``(II) Postsecondary vocational 
                                education school.--An area vocational 
                                education school (as defined in 
                                subparagraph (C) or (D) of section 
                                521(4) of the Carl D. Perkins 
                                Vocational and Applied Technology 
                                Education Act (20 U.S.C. 2471(4))) 
                                which is in any State (as defined in 
                                section 521(33) of such Act), as such 
                                sections are in effect on the date of 
                                the enactment of this section.
                    ``(B) First-home purchase.--Qualified acquisition 
                costs with respect to a qualified principal residence 
                for a qualified first-time homebuyer, if paid from an 
                individual development account directly to the persons 
                to whom the amounts are due. For purposes of this 
                subparagraph--
                            ``(i) Qualified acquisition costs.--The 
                        term `qualified acquisition costs' means the 
                        costs of acquiring, constructing, or 
                        reconstructing a residence. The term includes 
                        any usual or reasonable settlement, financing, 
                        or other closing costs.
                            ``(ii) Qualified principal residence.--The 
                        term `qualified principal residence' means a 
                        principal residence (within the meaning of 
                        section 1034), the qualified acquisition costs 
                        of which do not exceed 110 percent of the 
                        average area purchase price applicable to such 
                        residence (determined in accordance with 
                        paragraphs (2) and (3) of section 143(e)).
                            ``(iii) Qualified first-time homebuyer.--
                                    ``(I) In general.--The term 
                                `qualified first-time homebuyer' means 
                                a taxpayer (and, if married, the 
                                taxpayer's spouse) who has no present 
                                ownership interest in a principal 
                                residence during the 3-year period 
                                ending on the date of acquisition of 
                                the principal residence to which this 
                                subparagraph applies.
                                    ``(II) Date of acquisition.--The 
                                term `date of acquisition' means the 
                                date on which a binding contract to 
                                acquire, construct, or reconstruct the 
                                principal residence to which this 
                                subparagraph applies is entered into.
                    ``(C) Business capitalization.--Amounts paid from 
                an individual development account directly to a 
                business capitalization account which is established in 
                a federally insured financial institution and is 
                restricted to use solely for business capitalization 
                expenses. For purposes of this subparagraph--
                            ``(i) Qualified business capitalization 
                        expenses.--The term `qualified business 
                        capitalization expenses' means qualified 
                        expenses for the capitalization of a qualified 
                        business pursuant to a qualified plan.
                            ``(ii) Qualified expenses.--The term 
                        `qualified expenses' means expenses included in 
                        a qualified plan, including capital plant, 
                        equipment, working capital, and inventory 
                        expenses.
                            ``(iii) Qualified business.--The term 
                        `qualified business' means any business that 
                        does not contravene any law or public policy 
                        (as determined by the Secretary).
                            ``(iv) Qualified plan.--The term `qualified 
                        plan' means a business plan which--
                                    ``(I) is approved by a financial 
                                institution, or by a nonprofit loan 
                                fund having demonstrated fiduciary 
                                integrity,
                                    ``(II) includes a description of 
                                services or goods to be sold, a 
                                marketing plan, and projected financial 
                                statements, and
                                    ``(III) may require the eligible 
                                individual to obtain the assistance of 
                                an experienced entrepreneurial advisor.
                    ``(D) Retirement expenses.--Expenses for which 
                amounts may be distributed from an individual 
                retirement plan, subject to the same requirements and 
                limitations as apply to such amounts.
                    ``(E) Transfers to ida's of family members.--
                Amounts paid from an individual development account 
                directly into another such account established for the 
                benefit of an eligible individual who is--
                            ``(i) the taxpayers spouse, or
                            ``(ii) any dependent of the taxpayer with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151.
                    ``(F) Emergency needs.--Expenses associated with--
                            ``(i) job loss due to workforce reduction,
                            ``(ii) bankruptcy,
                            ``(iii) business closure,
                            ``(iv) death of a spouse or dependent, and
                            ``(v) medical care for a spouse or 
                        dependent who is not eligible to receive 
                        assistance under a State plan under title XIX 
                        of the Social Security Act (relating to 
                        Medicaid).
                Paragraph (2) shall apply to amounts paid from an 
                individual development account by reason of expenses 
                described in this subparagraph only to the extent that 
                the aggregate of such amounts does not exceed an amount 
                equal to 20 percent of the balance in such account as 
                of the close of the preceding calendar year.
    ``(f) Special Rules.--
            ``(1) Account may not be established for benefit of more 
        than 1 individual.--An individual development account may not 
        be established for the benefit of more than 1 individual.
            ``(2) Eligible individual treated as eligible individual 
        only with respect to 1 account.--If, at any time during a 
        calendar year, 2 or more individual development accounts are 
        maintained for the benefit of an eligible individual, such 
        individual shall be treated as an eligible individual for the 
        calendar year only with respect to the 1st of such accounts.
            ``(3) Time when contributions deemed made.--A taxpayer 
        shall be deemed to have made a contribution on the last day of 
        the preceding taxable year if the contribution is made on 
        account of such taxable year and is made not later than the 
        time prescribed by law for filing the return for such taxable 
        year (including extensions thereof).
            ``(4) Limitation on exemption from tax.--Notwithstanding 
        subsection (a), any individual development account is subject 
        to the taxes imposed by section 511 (relating to imposition of 
        tax on unrelated business income of charitable, etc. 
        organizations).
            ``(5) Loss of exemption of account where individual engages 
        in prohibited transaction.--
                    ``(A) In general.--If the individual for whose 
                benefit an individual development account is 
                established engages in any transaction prohibited by 
                section 4975 with respect to the account, the account 
                shall cease to be an individual development account as 
                of the 1st day of the taxable year (of the individual 
                so engaging in such transaction) during which such 
                transaction occurs.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                an individual development account by reason of 
                subparagraph (A) as of the 1st day of any taxable year, 
                paragraph (1) of subsection (e) shall apply as if there 
                were a distribution on such 1st day in an amount equal 
                to the fair market value of all assets in the account 
                on such 1st day.
            ``(6) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit an 
        individual development account is established uses the account 
        or any portion thereof as security for a loan, the portion so 
        used shall be treated as distributed to the individual so using 
        such portion.
    ``(g) Custodial Accounts.--For purposes of this section, a 
custodial account shall be treated as a trust if the assets of such 
account are held by a bank (as defined in section 408(n)) or another 
person who demonstrates, to the satisfaction of the Secretary, that the 
manner in which he will administer the account will be consistent with 
the requirements of this section, and if the custodial account would, 
except for the fact that it is not a trust, constitute an individual 
development account described in subsection (b). For purposes of this 
title, in the case of a custodial account treated as a trust by reason 
of the preceding sentence, the custodian of such account shall be 
treated as the trustee thereof.
    ``(h) Reports.--The trustee of an individual development account 
shall prepare reports regarding the account with respect to 
contributions, distributions, and any other matter required by the 
Secretary under regulations.''
    (b) Tax on Prohibited Transactions.--Section 4975 of such Code 
(relating to prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for individual development accounts.--An 
        individual for whose benefit an individual development account 
        is established and any contributor to such account shall be 
        exempt from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be an individual development 
        account by reason of the application of section 137(f)(5)(A) to 
        such account.'', and
            (2) by inserting ``, an individual development account 
        described in section 137(b),'' in subsection (e)(1) after 
        ``described in section 408(a)''.
    (c) Failure To Provide Reports on Individual Development 
Accounts.--Section 6693 of such Code (relating to failure to provide 
reports on individual retirement accounts or annuities) is amended--
            (1) by inserting ``or on individual development accounts'' 
        after ``annuities'' in the heading of such section, and
            (2) by adding at the end of subsection (a) the following 
        new sentence: ``The person required by section 137(h) to file a 
        report regarding an individual development account at the time 
        and in the manner required by such section shall pay a penalty 
        of $50 for each failure, unless it is shown that such failure 
        is due to reasonable cause.''
    (d) Special Rule for Determining Amounts of Support for 
Dependent.--Subsection (b) of section 152 of such Code (relating to 
definition of dependent) is amended by adding at the end the following 
new paragraph:
            ``(6) A distribution from an individual development account 
        described in section 137(b) to the individual for whose benefit 
        such account has been established shall not be taken into 
        account in determining support for purposes of this section to 
        the extent such distribution is excluded from gross income of 
        such individual under section 137(e)(2).''
    (g) Clerical Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 137 and inserting the following new items:

                              ``Sec. 137. Individual development 
                                        accounts.
                              ``Sec. 138. Cross references to other 
                                        Acts.''
            (2) The table of sections for subchapter B of chapter 68 of 
        such Code is amended by striking the item relating to section 
        6693 and inserting the following new item:

                              ``Sec. 6693. Failure to provide reports 
                                        on individual retirement 
                                        accounts or annuities or on 
                                        individual development 
                                        accounts.''
    (h) Effective Date.--The amendments made by this section shall 
apply to contributions made after December 31, 1994.

                     TITLE IV--OTHER ASSET REFORMS

SEC. 401. INCREASE IN ASSET LIMIT.

    (a) In General.--Section 402(a)(7)(B) of the Social Security Act 
(42 U.S.C. 602(a)(7)(B)) is amended by striking ``$1,000 or such lower 
amount as the State may determine'' and inserting ``the resource 
threshold (as defined in subsection (d)) for the calendar year in which 
the month occurs''.
    (b) Resource Threshold.--Section 402 of such Act (42 U.S.C. 602) is 
amended by inserting after subsection (c) the following:
    ``(d) As used in section 402(a)(7)(B), the term `resource 
threshold' means, with respect to a calendar year, $1,580, multiplied 
by the percentage (if any) by which--
            ``(1) the average of the Consumer Price Index (as defined 
        in section 1(f)(5) of the Internal Revenue Code of 1986) for 
        the 12-month period ending on December 31 of the immediately 
        preceding calendar year; exceeds
            ``(2) the average of the Consumer Price Index (as so 
        defined) for the 12-month period ending on December 31, 1994.

SEC. 402. NEW LIMIT ON EQUITY IN AUTOMOBILE.

    Section 402(a)(7)(B)(i) of the Social Security Act (42 U.S.C. 
602(a)(7)(B)(i)) is amended by striking ``such amount as the Secretary 
may prescribe'' and inserting ``$5,000''.

SEC. 403. EARNED INCOME AND INDIVIDUAL DEVELOPMENT ACCOUNTS OF 
              DEPENDENT CHILDREN TO BE DISREGARDED IN DETERMINING 
              ELIGIBILITY FOR AID TO FAMILIES WITH DEPENDENT CHILDREN.

    (a) Resource Disregards.--Section 402(a)(7)(B) of the Social 
Security Act (42 U.S.C. 602(a)(7)(B)) is amended--
            (1) by striking ``or'' at the end of clause (iii); and
            (2) by inserting ``(v) any earned income of such child, and 
        any amount in an individual development account established for 
        such child pursuant to section 137 of the Internal Revenue Code 
        of 1986'' before the semicolon.
    (b) Income Disregards.--Section 402(a)(8)(A) of the Social Security 
Act (42 U.S.C. 602(a)(8)(A)) is amended--
            (1) by striking ``and'' at the end of clause (vii); and
            (2) by adding at the end the following:
                    ``(viii) shall disregard all of the earned income 
                of each dependent child applying for aid under the 
                State plan, all interest earned on amounts deposited 
                in, and all distributions from, an individual 
                development account established for a dependent child 
                pursuant to section 137 of the Internal Revenue Code of 
                1986; and''.

SEC. 404. EXCLUSION OF CERTAIN INCOME FROM CONSIDERATION FOR PURPOSES 
              OF PUBLIC HOUSING RENT DETERMINATIONS.

    Section 3(b)(5) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)(5)) is amended--
            (1) in subparagraph (F), by striking ``and'' at the end;
            (2) in subparagraph (G), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(H) in the case of a family residing in public housing--
                    ``(i) any earned income of any dependent who is 
                less than 18 years of age; and
                    ``(ii) any interest earned on amounts deposited in 
                an individual development account established pursuant 
                to section 137 of the Internal Revenue Code of 1986.''.

SEC. 405. INDIVIDUAL DEVELOPMENT ACCOUNTS TO BE DISREGARDED IN 
              DETERMINING ELIGIBILITY FOR AND AMOUNT OF BENEFITS UNDER 
              WELFARE PROGRAMS.

    Amounts in individual development accounts established pursuant to 
section 137 of the Internal Revenue Code of 1986 shall be disregarded 
in determining eligibility for, and the amount of benefits or kinds of 
services to be provided under any Federal or federally assisted program 
eligibility for which is based, in whole or in part, on need.

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