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[House Report 107-460]
[From the U.S. Government Publishing Office]

107th Congress                                            Rept. 107-460
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================

 
    PERSONAL RESPONSIBILITY, WORK, AND FAMILY PROMOTION ACT OF 2002

                                _______
                                

  May 14, 2002.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4090]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 4090) to reauthorize and improve the program of 
block grants to States for temporary assistance for needy 
families, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Introduction....................................................27
          A. Purpose and Scope...................................    27
          B. Background and Need for Legislation.................    28
          C. Legislative History.................................    28
 II. Explanation of Provisions.......................................29
III. Votes of the Committee..........................................68
 IV. Budget Effects of the Bill......................................72
          A. Committee Estimate of Budgetary Effects.............    72
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures.......................................    87
  V. Other Matters Required To Be Discussed Under the Rules of the 
     House...........................................................88
          A. Committee Matters Required To Be Discussed Under the 
              Rules of the House.................................    88
          B. Summary of General Performance Goals and Objectives.    88
          C. Constitutional Authority Statement..................    89
          D. Information Relating to Unfunded Mandates...........    89
 VI. Changes in Existing Law Made by the Bill, as Reported...........89
VII. Minority Views.................................................149
    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Personal Responsibility, Work, and 
Family Promotion Act of 2002''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. Findings.

                             TITLE I--TANF

Sec. 101. Purposes.
Sec. 102. Family assistance grants.
Sec. 103. Promotion of family formation and healthy marriage.
Sec. 104. Supplemental grant for population increases in certain 
States.
Sec. 105. Bonus to reward employment achievement.
Sec. 106. Contingency fund.
Sec. 107. Use of funds.
Sec. 108. Repeal of Federal loan for State welfare programs.
Sec. 109. Universal engagement and family self-sufficiency plan 
requirements.
Sec. 110. Work participation requirements.
Sec. 111. Maintenance of effort.
Sec. 112. Performance improvement.
Sec. 113. Data collection and reporting.
Sec. 114. Direct funding and administration by Indian tribes.
Sec. 115. Research, evaluations, and national studies.
Sec. 116. Study by the Census Bureau.
Sec. 117. Definition of assistance.
Sec. 118. Technical corrections.
Sec. 119. Fatherhood program.

                          TITLE II--CHILD CARE

Sec. 201. Entitlement funding.

                        TITLE III--CHILD SUPPORT

Sec. 301. Federal matching funds for limited pass through of child 
support payments to families receiving TANF.
Sec. 302. State option to pass through all child support payments to 
families that formerly received TANF.
Sec. 303. Mandatory review and adjustment of child support orders for 
families receiving TANF.
Sec. 304. Mandatory fee for successful child support collection for 
family that has never received TANF.
Sec. 305. Report on undistributed child support payments.
Sec. 306. Use of new hire information to assist in administration of 
unemployment compensation programs.
Sec. 307. Decrease in amount of child support arrearage triggering 
passport denial.
Sec. 308. Use of tax refund intercept program to collect past-due child 
support on behalf of children who are not minors.
Sec. 309. Garnishment of compensation paid to veterans for service-
connected disabilities in order to enforce child support obligations.
Sec. 310. Improving Federal debt collection practices.
Sec. 311. Maintenance of technical assistance funding.
Sec. 312. Maintenance of Federal Parent Locator Service funding.

                        TITLE IV--CHILD WELFARE

Sec. 401. Extension of authority to approve demonstration projects.
Sec. 402. Elimination of limitation on number of waivers.
Sec. 403. Elimination of limitation on number of States that may be 
granted waivers to conduct demonstration projects on same topic.
Sec. 404. Elimination of limitation on number of waivers that may be 
granted to a single State for demonstration projects.
Sec. 405. Streamlined process for consideration of amendments to and 
extensions of demonstration projects requiring waivers.
Sec. 406. Availability of reports.
Sec. 407. Technical correction.

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

Sec. 501. Review of State agency blindness and disability 
determinations.

                  TITLE VI--BROADENED WAIVER AUTHORITY

Sec. 601. Program integration demonstration projects.

                       TITLE VII--EFFECTIVE DATE

Sec. 701. Effective date.

SEC. 3. REFERENCES.

  Except as otherwise expressly provided, wherever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the amendment or repeal shall be 
considered to be made to a section or other provision of the Social 
Security Act.

SEC. 4. FINDINGS.

  The Congress makes the following findings:
          (1) The Temporary Assistance for Needy Families (TANF) 
        Program established by the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (Public Law 104-193) has 
        succeeded in moving families from welfare to work and reducing 
        child poverty.
                  (A) There has been a dramatic increase in the 
                employment of current and former welfare recipients. 
                The percentage of working recipients reached an all-
                time high in fiscal years 1999 and 2000. In fiscal year 
                1999, 33 percent of adult recipients were working, 
                compared to less than 7 percent in fiscal year 1992, 
                and 11 percent in fiscal year 1996. All States met the 
                overall participation rate standard in fiscal year 
                2000, as did the District of Columbia and Puerto Rico.
                  (B) Earnings for welfare recipients remaining on the 
                rolls have also increased significantly, as have 
                earnings for female-headed households. The increases 
                have been particularly large for the bottom 2 income 
                quintiles, that is, those women who are most likely to 
                be former or present welfare recipients.
                  (C) Welfare dependency has plummeted. As of September 
                2001, 2,103,000 families and 5,333,000 individuals were 
                receiving assistance. Accordingly, the number of 
                families in the welfare caseload and the number of 
                individuals receiving cash assistance declined 52 
                percent and 56 percent, respectively, since the 
                enactment of TANF. These declines have persisted even 
                as unemployment rates have increased: unemployment 
                rates nationwide rose 25 percent, from 3.9 percent in 
                September 2000 to 4.9 percent in September 2001, while 
                welfare caseloads continued to drop by 7 percent.
                  (D) The child poverty rate continued to decline 
                between 1996 and 2000, falling 21 percent from 20.5 to 
                16.2 percent. The 2000 child poverty rate is the lowest 
                since 1979. Child poverty rates for African-American 
                and Hispanic children have also fallen dramatically 
                during the past 6 years. African-American child poverty 
                is at the lowest rate on record and Hispanic child 
                poverty has had the largest 4-year decrease on record.
                  (E) Despite these gains, States have had mixed 
                success in fully engaging welfare recipients in work 
                activities. While all States have met the overall work 
                participation rates required by law, in 2000, in an 
                average month, only about \1/3\ of all families with an 
                adult participated in work activities that were 
                countable toward the State's participation rate. Eight 
                jurisdictions failed to meet the more rigorous 2-parent 
                work requirements, and about 20 States are not subject 
                to the 2-parent requirements, most because they moved 
                their 2-parent cases to separate State programs where 
                they are not subject to a penalty for failing the 2-
                parent rates.
          (2) As a Nation, we have made substantial progress in 
        reducing teen pregnancies and births, slowing increases in 
        nonmarital childbearing, and improving child support 
        collections and paternity establishment.
                  (A) The teen birth rate has fallen continuously since 
                1991, down a dramatic 22 percent by 2000. During the 
                period of 1991-2000, teenage birth rates fell in all 
                States and the District of Columbia, Puerto Rico, and 
                the Virgin Islands. Declines also have spanned age, 
                racial, and ethnic groups. There has been success in 
                lowering the birth rate for both younger and older 
                teens. The birth rate for those 15-17 years of age is 
                down 29 percent since 1991, and the rate for those 18 
                and 19 is down 16 percent. Between 1991 and 2000, teen 
                birth rates declined for all women ages 15-19--white, 
                African American, American Indian, Asian or Pacific 
                Islander, and Hispanic women ages 15-19. The rate for 
                African American teens--until recently the highest--
                experienced the largest decline, down 31 percent from 
                1991 to 2000, to reach the lowest rate ever reported 
                for this group. Most births to teens are nonmarital; in 
                2000, about 73 percent of the births to teens aged 15-
                19 occurred outside of marriage.
                  (B) Nonmarital childbearing continued to increase 
                slightly in 2000, however not at the sharp rates of 
                increase seen in recent decades. The birth rate among 
                unmarried women in 2000 was 3.5 percent lower than its 
                peak reached in 1994, while the proportion of births 
                occurring outside of marriage has remained at 
                approximately 33 percent since 1998.
                  (C) The negative consequences of out-of-wedlock birth 
                on the mother, the child, the family, and society are 
                well documented. These include increased likelihood of 
                welfare dependency, increased risks of low birth 
                weight, poor cognitive development, child abuse and 
                neglect, and teen parenthood, and decreased likelihood 
                of having an intact marriage during adulthood.
                  (D) An estimated 23,900,000 children do not live with 
                their biological father. 16,000,000 children live with 
                their mother only. These facts are attributable largely 
                to declining marriage rates, increasing divorce rates, 
                and increasing rates of nonmarital births during the 
                latter part of the 20th century.
                  (E) There has been a dramatic rise in cohabitation as 
                marriages have declined. Only 40 percent of children of 
                cohabiting couples will see their parents marry. Those 
                who do marry experience a 50 percent higher divorce 
                rate. Children in single-parent households and 
                cohabiting households are at much higher risk of child 
                abuse than children in intact married and stepparent 
                families.
                  (F) Children who live apart from their biological 
                fathers, on average, are more likely to be poor, 
                experience educational, health, emotional, and 
                psychological problems, be victims of child abuse, 
                engage in criminal behavior, and become involved with 
                the juvenile justice system than their peers who live 
                with their married, biological mother and father. A 
                child living in a single-parent family is nearly 5 
                times as likely to be poor as a child living in a 
                married-couple family. In married-couple families, the 
                child poverty rate is 8.1 percent, in households headed 
                by a single mother, the poverty rate is 39.7 percent.
                  (G) Since the enactment of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996, child support collections within the child 
                support enforcement system have grown every year, 
                increasing from $12,000,000,000 in fiscal year 1996 to 
                nearly $19,000,000,000 in fiscal year 2001. The number 
                of paternities established or acknowledged in fiscal 
                year 2002 reached an historic high of over 1,500,000--
                which includes a nearly 100 percent increase through 
                in-hospital acknowledgement programs to 688,510 in 2000 
                from 349,356 in 1996. Child support collections were 
                made in over 7,000,000 cases in fiscal year 2000, 
                significantly more than the almost 4,000,000 cases 
                having a collection in 1996.
          (3) The Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 gave States great flexibility in the 
        use of Federal funds to develop innovative programs to help 
        families leave welfare and begin employment and to encourage 
        the formation of 2-parent families.
                  (A) Total Federal and State TANF expenditures in 
                fiscal year 2000 were $24,000,000,000, up from 
                $22,600,000,000 for the previous year. This increased 
                spending is attributable to significant new investments 
                in supportive services in the TANF program, such as 
                child care and activities to support work.
                  (B) Since the welfare reform effort began there has 
                been a dramatic increase in work participation 
                (including employment, community service, and work 
                experience) among welfare recipients, as well as an 
                unprecedented reduction in the caseload because 
                recipients have left welfare for work.
                  (C) States are making policy choices and investment 
                decisions best suited to the needs of their citizens.
                          (i) To expand aid to working families, all 
                        States disregard a portion of a family's earned 
                        income when determining benefit levels.
                          (ii) Most States increased the limits on 
                        countable assets above the former Aid to 
                        Families with Dependent Children (AFDC) 
                        program. Every State has increased the vehicle 
                        asset level above the prior AFDC limit for a 
                        family's primary automobile.
                          (iii) States are experimenting with programs 
                        to promote marriage and father involvement. 
                        Over half the States have eliminated 
                        restrictions on 2-parent families. Many States 
                        use TANF, child support, or State funds to 
                        support community-based activities to help 
                        fathers become more involved in their 
                        children's lives or strengthen relationships 
                        between mothers and fathers.
          (4) Therefore, it is the sense of the Congress that 
        increasing success in moving families from welfare to work, as 
        well as in promoting healthy marriage and other means of 
        improving child well-being, are very important Government 
        interests and the policy contained in part A of title IV of the 
        Social Security Act (as amended by this Act) is intended to 
        serve these ends.

                             TITLE I--TANF

SEC. 101. PURPOSES.

  Section 401(a) (42 U.S.C. 601(a)) is amended--
          (1) in the matter preceding paragraph (1), by striking 
        ``increase'' and inserting ``improve child well-being by 
        increasing'';
          (2) in paragraph (1), by inserting ``and services'' after 
        ``assistance'';
          (3) in paragraph (2), by striking ``parents on government 
        benefits'' and inserting ``families on government benefits and 
        reduce poverty''; and
          (4) in paragraph (4), by striking ``two-parent families'' and 
        inserting ``healthy, 2-parent married families, and encourage 
        responsible fatherhood''.

SEC. 102. FAMILY ASSISTANCE GRANTS.

  (a) Extension of Authority.--Section 403(a)(1)(A) (42 U.S.C. 
603(a)(1)(A)) is amended--
          (1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, and 
        2002'' and inserting ``2003 through 2007''; and
          (2) by inserting ``payable to the State for the fiscal year'' 
        before the period.
  (b) State Family Assistance Grant.--Section 403(a)(1) (42 U.S.C. 
603(a)(1)) is amended by striking subparagraphs (B) through (E) and 
inserting the following:
                  ``(B) State family assistance grant.--The State 
                family assistance grant payable to a State for a fiscal 
                year shall be the amount that bears the same ratio to 
                the amount specified in subparagraph (C) of this 
                paragraph as the amount required to be paid to the 
                State under this paragraph for fiscal year 2002 
                (determined without regard to any reduction pursuant to 
                section 412(a)(1)) bears to the total amount required 
                to be paid under this paragraph for fiscal year 2002.
                  ``(C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2003 through 2007 $16,566,542,000 for grants 
                under this paragraph.''.
  (c) Matching Grants for the Territories.--Section 1108(b)(2) (42 
U.S.C. 1308(b)(2)) is amended by striking ``1997 through 2002'' and 
inserting ``2003 through 2007''.

SEC. 103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

  (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is 
amended by adding at the end the following:
                          ``(vii) Encourage equitable treatment of 
                        married, 2-parent families under the program 
                        referred to in clause (i).''.
  (b) Healthy Marriage Promotion Grants; Repeal of Bonus for Reduction 
of Illegitimacy Ratio.--Section 403(a)(2) (42 U.S.C. 603(a)(2)) is 
amended to read as follows:
          ``(2) Healthy marriage promotion grants.--
                  ``(A) Authority.--The Secretary shall award 
                competitive grants to States, territories, and tribal 
                organizations for not more than 50 percent of the cost 
                of developing and implementing innovative programs to 
                promote and support healthy, married, 2-parent 
                families.
                  ``(B) Healthy marriage promotion activities.--Funds 
                provided under subparagraph (A) shall be used to 
                support any of the following programs or activities:
                          ``(i) Public advertising campaigns on the 
                        value of marriage and the skills needed to 
                        increase marital stability and health.
                          ``(ii) Education in high schools on the value 
                        of marriage, relationship skills, and 
                        budgeting.
                          ``(iii) Marriage education, marriage skills, 
                        and relationship skills programs, including 
                        parenting skills, financial management, 
                        conflict resolution, and job and career 
                        advancement, for non-married pregnant women and 
                        non-married expectant fathers.
                          ``(iv) Pre-marital education and marriage 
                        skills training for engaged couples and for 
                        couples interested in marriage.
                          ``(v) Marriage enhancement and marriage 
                        skills training programs for married couples.
                          ``(vi) Divorce reduction programs that teach 
                        relationship skills.
                          ``(vii) Marriage mentoring programs which use 
                        married couples as role models and mentors in 
                        at-risk communities.
                          ``(viii) Programs to reduce the disincentives 
                        to marriage in means-tested aid programs, if 
                        offered in conjunction with any activity 
                        described in this subparagraph.
                  ``(C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each of fiscal 
                years 2003 through 2007 $100,000,000 for grants under 
                this paragraph.''.
  (c) Counting of Spending on Non-Eligible Families to Prevent and 
Reduce Incidence of Out-of-Wedlock Births, Encourage Formation and 
Maintenance of Healthy, 2-Parent Married Families, or Encourage 
Responsible Fatherhood.--Section 409(a)(7)(B)(i) (42 U.S.C. 
609(a)(7)(B)(i)) is amended by adding at the end the following:
                                  ``(V) Counting of spending on non-
                                eligible families to prevent and reduce 
                                incidence of out-of-wedlock births, 
                                encourage formation and maintenance of 
                                healthy, 2-parent married families, or 
                                encourage responsible fatherhood.--The 
                                term `qualified State expenditures' 
                                includes the total expenditures by the 
                                State during the fiscal year under all 
                                State programs for a purpose described 
                                in paragraph (3) or (4) of section 
                                401(a).''.

SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN CERTAIN 
                    STATES.

  Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is amended--
          (1) in the subparagraph heading, by striking ``of grants for 
        fiscal year 2002'';
          (2) in clause (i), by striking ``fiscal year 2002'' and 
        inserting ``each of fiscal years 2002 through 2006'';
          (3) in clause (ii), by striking ``2002'' and inserting 
        ``2006''; and
          (4) in clause (iii), by striking ``fiscal year 2002'' and 
        inserting ``each of fiscal years 2002 through 2006''.

SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

  (a) Reallocation of Funding.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) 
is amended--
          (1) in the paragraph heading, by striking ``high performance 
        states'' and inserting ``employment achievement'';
          (2) in subparagraph (D)(ii)--
                  (A) in subclause (I), by striking ``equals 
                $200,000,000'' and inserting ``(other than 2003) equals 
                $200,000,000, and for bonus year 2003 equals 
                $100,000,000''; and
                  (B) in subclause (II), by striking ``$1,000,000,000'' 
                and inserting ``$900,000,000''; and
          (3) in subparagraph (F), by striking ``$1,000,000,000'' and 
        inserting ``$900,000,000''.
  (b) Bonus to Reward Employment Achievement.--
          (1) In general.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) is 
        amended by striking subparagraphs (A) through (F) and inserting 
        the following:
                  ``(A) In general.--The Secretary shall make a grant 
                pursuant to this paragraph to each State for each bonus 
                year for which the State is an employment achievement 
                State.
                  ``(B) Amount of grant.--
                          ``(i) In general.--Subject to clause (ii) of 
                        this subparagraph, the Secretary shall 
                        determine the amount of the grant payable under 
                        this paragraph to an employment achievement 
                        State for a bonus year, which shall be based on 
                        the performance of the State as determined 
                        under subparagraph (D)(i) for the fiscal year 
                        that immediately precedes the bonus year.
                          ``(ii) Limitation.--The amount payable to a 
                        State under this paragraph for a bonus year 
                        shall not exceed 5 percent of the State family 
                        assistance grant.
                  ``(C) Formula for measuring state performance.--
                          ``(i) In general.--Subject to clause (ii), 
                        not later than October 1, 2003, the Secretary, 
                        in consultation with the National Governors 
                        Association, the American Public Human Services 
                        Association, and the National Conference of 
                        State Legislatures, shall develop a formula for 
                        measuring State performance in operating the 
                        State program funded under this part so as to 
                        achieve the goals of employment entry, job 
                        retention, and increased earnings from 
                        employment for families receiving assistance 
                        under the program, as measured on an absolute 
                        basis and on the basis of improvement in State 
                        performance.
                          ``(ii) Special rule for bonus year 2004.--For 
                        the purposes of awarding a bonus under this 
                        paragraph for bonus year 2004, the Secretary 
                        may measure the performance of a State in 
                        fiscal year 2003 using the job entry rate, job 
                        retention rate, and earnings gain rate 
                        components of the formula developed under 
                        section 403(a)(4)(C) as in effect immediately 
                        before the effective date of this paragraph.
                  ``(D) Determination of state performance.--For each 
                bonus year, the Secretary shall--
                          ``(i) use the formula developed under 
                        subparagraph (C) to determine the performance 
                        of each eligible State for the fiscal year that 
                        precedes the bonus year; and
                          ``(ii) prescribe performance standards in 
                        such a manner so as to ensure that--
                                  ``(I) the average annual total amount 
                                of grants to be made under this 
                                paragraph for each bonus year equals 
                                $100,000,000; and
                                  ``(II) the total amount of grants to 
                                be made under this paragraph for all 
                                bonus years equals $500,000,000.
                  ``(E) Definitions.--In this paragraph:
                          ``(i) Bonus year.--The term `bonus year' 
                        means each of fiscal years 2004 through 2008.
                          ``(ii) Employment achievement state.--The 
                        term `employment achievement State' means, with 
                        respect to a bonus year, an eligible State 
                        whose performance determined pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        preceding the bonus year equals or exceeds the 
                        performance standards prescribed under 
                        subparagraph (D)(ii) for such preceding fiscal 
                        year.
                  ``(F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal years 
                2004 through 2008 $500,000,000 for grants under this 
                paragraph.
                  ``(G) Grants for tribal organizations.--This 
                paragraph shall apply with respect to tribal 
                organizations in the same manner in which this 
                paragraph applies with respect to States. In 
                determining the criteria under which to make grants to 
                tribal organizations under this paragraph, the 
                Secretary shall consult with tribal organizations.''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 2003.

SEC. 106. CONTINGENCY FUND.

  (a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 603(b)(2)) is 
amended--
          (1) by striking ``1997, 1998, 1999, 2000, 2001, and 2002'' 
        and inserting ``2003 through 2007''; and
          (2) by striking all that follows ``$2,000,000,000'' and 
        inserting a period.
  (b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 603(b)(3)(C)(ii)) is 
amended by striking ``fiscal years 1997 through 2002'' and inserting 
``fiscal years 2003 through 2007''.
  (c) Definition of Needy State.--Clauses (i) and (ii) of section 
403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by inserting after 
``1996'' the following: ``, and the Food Stamp Act of 1977 as in effect 
during the corresponding 3-month period in the fiscal year preceding 
such most recently concluded 3-month period,''.
  (d) Annual Reconciliation: Federal Matching of State Expenditures 
Above ``Maintenance of Effort'' Level.--Section 403(b)(6) (42 U.S.C. 
603(b)(6)) is amended--
          (1) in subparagraph (A)(ii)--
                  (A) by adding ``and'' at the end of subclause (I);
                  (B) by striking ``; and'' at the end of subclause 
                (II) and inserting a period; and
                  (C) by striking subclause (III);
          (2) in subparagraph (B)(i)(II), by striking all that follows 
        ``section 409(a)(7)(B)(iii))'' and inserting a period;
          (3) by amending subparagraph (B)(ii)(I) to read as follows:
                                  ``(I) the qualified State 
                                expenditures (as defined in section 
                                409(a)(7)(B)(i)) for the fiscal year; 
                                plus''; and
          (4) by striking subparagraph (C).
  (e) Consideration of Certain Child Care Expenditures in Determining 
State Compliance With Contingency Fund Maintenance of Effort 
Requirement.--Section 409(a)(10) (42 U.S.C. 609(a)(10)) is amended--
          (1) by striking ``(other than the expenditures described in 
        subclause (I)(bb) of that paragraph)) under the State program 
        funded under this part'' and inserting a close parenthesis; and
          (2) by striking ``excluding any amount expended by the State 
        for child care under subsection (g) or (i) of section 402 (as 
        in effect during fiscal year 1994) for fiscal year 1994,''.

SEC. 107. USE OF FUNDS.

  (a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2)) is 
amended by striking ``in any manner that'' and inserting ``for any 
purposes or activities for which''.
  (b) Treatment of Interstate Immigrants.--
          (1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C. 
        602(a)(1)(B)) is amended by striking clause (i) and 
        redesignating clauses (ii) through (iv) as clauses (i) through 
        (iii), respectively.
          (2) Use of funds.--Section 404 (42 U.S.C. 604) is amended by 
        striking subsection (c).
  (c) Increase in Amount Transferable to Child Care.--Section 404(d)(1) 
(42 U.S.C. 604(d)(1)) is amended by striking ``30'' and inserting 
``50''.
  (d) Increase in Amount Transferable to Title XX Programs.--Section 
404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to read as follows:
                  ``(B) Applicable percent.--For purposes of 
                subparagraph (A), the applicable percent is 10 percent 
                for fiscal year 2003 and each succeeding fiscal 
                year.''.
  (e) Clarification of Authority of States to Use TANF Funds Carried 
Over From Prior Years to Provide TANF Benefits and Services.--Section 
404(e) (42 U.S.C. 604(e)) is amended to read as follows:
  ``(e) Authority To Carryover or Reserve Certain Amounts for Benefits 
or Services or for Future Contingencies.--
          ``(1) Carryover.--A State or tribe may use a grant made to 
        the State or tribe under this part for any fiscal year to 
        provide, without fiscal year limitation, any benefit or service 
        that may be provided under the State or tribal program funded 
        under this part.
          ``(2) Contingency reserve.--A State or tribe may designate 
        any portion of a grant made to the State or tribe under this 
        part as a contingency reserve for future needs, and may use any 
        amount so designated to provide, without fiscal year 
        limitation, any benefit or service that may be provided under 
        the State or tribal program funded under this part. If a State 
        or tribe so designates a portion of such a grant, the State 
        shall, on an annual basis, include in its report under section 
        411(a) the amount so designated.''.

SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

  (a) Repeal.--Section 406 (42 U.S.C. 606) is repealed.
  (b) Conforming Amendments.--
          (1) Section 409(a) (42 U.S.C. 609(a)) is amended by striking 
        paragraph (6).
          (2) Section 412 (42 U.S.C. 612) is amended by striking 
        subsection (f) and redesignating subsections (g) through (i) as 
        subsections (f) through (h), respectively.
          (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
        striking ``406,''.

SEC. 109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY PLAN 
                    REQUIREMENTS.

  (a) Modification of State Plan Requirements.--Section 402(a)(1)(A) 
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses (ii) and (iii) 
and inserting the following:
                          ``(ii) Require a parent or caretaker 
                        receiving assistance under the program to 
                        engage in work or alternative self-sufficiency 
                        activities (as defined by the State), 
                        consistent with section 407(e)(2).
                          ``(iii) Require families receiving assistance 
                        under the program to engage in activities in 
                        accordance with family self-sufficiency plans 
                        developed pursuant to section 408(b).''.
  (b) Establishment of Family Self-Sufficiency Plans.--
          (1) In general.--Section 408(b) (42 U.S.C. 608(b)) is amended 
        to read as follows:
  ``(b) Family Self-Sufficiency Plans.--
          ``(1) In general.--A State to which a grant is made under 
        section 403 shall--
                  ``(A) make an initial assessment, in the manner 
                deemed appropriate by the State, of the skills, prior 
                work experience, and employability of each recipient of 
                assistance under the program;
                  ``(B) establish for each family that includes a work-
                eligible individual receiving assistance under the 
                State program funded under this part a self-sufficiency 
                plan that specifies appropriate activities described in 
                the State plan submitted pursuant to section 402, 
                including direct work activities as appropriate 
                designed to assist the family in achieving their 
                maximum degree of self-sufficiency, and that provides 
                for the ongoing participation of the individual in the 
                activities;
                  ``(C) require, at a minimum, each member of the 
                family who is a work-eligible individual (as defined in 
                section 407(b)(2)(C)) to participate in activities in 
                accordance with the self-sufficiency plan;
                  ``(D) monitor the participation of such family 
                members in the activities and the progress of the 
                family toward self-sufficiency;
                  ``(E) regularly review the self-sufficiency plan; and
                  ``(F) revise the self-sufficiency plan as 
                appropriate.
          ``(2) Timing.--The State shall comply with paragraph (1) with 
        respect to a family--
                  ``(A) in the case of a family that, as of October 1, 
                2002, is not receiving assistance from the State 
                program funded under this part, not later than 60 days 
                after the family first receives assistance on the basis 
                of the most recent application for the assistance; or
                  ``(B) in the case of a family that, as of such date, 
                is receiving the assistance, not later than 12 months 
                after the date of the enactment of this subsection.''.
          (2) Penalty for failure to establish family self-sufficiency 
        plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is amended--
                  (A) in the paragraph heading, by inserting ``or 
                establish family self-sufficiency plan'' after 
                ``rates''; and
                  (B) in subparagraph (A), by inserting ``or 408(b)'' 
                after ``407(a)''.

SEC. 110. WORK PARTICIPATION REQUIREMENTS.

  (a) In General.--Section 407 (42 U.S.C. 607) is amended by striking 
all that precedes subsection (b)(3) and inserting the following:

``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

  ``(a) Participation Rate Requirements.--A State to which a grant is 
made under section 403 for a fiscal year shall achieve a minimum 
participation rate equal to not less than--
          ``(1) 50 percent for fiscal year 2003;
          ``(2) 55 percent for fiscal year 2004;
          ``(3) 60 percent for fiscal year 2005;
          ``(4) 65 percent for fiscal year 2006; and
          ``(5) 70 percent for fiscal year 2007 and each succeeding 
        fiscal year.
  ``(b) Calculation of Participation Rates.--
          ``(1) Average monthly rate.--For purposes of subsection (a), 
        the participation rate of a State for a fiscal year is the 
        average of the participation rates of the State for each month 
        in the fiscal year.
          ``(2) Monthly participation rates; incorporation of 40-hour 
        work week standard.--
                  ``(A) In general.--For purposes of paragraph (1), the 
                participation rate of a State for a month is--
                          ``(i) the total number of countable hours (as 
                        defined in subsection (c)) with respect to the 
                        counted families for the State for the month; 
                        divided by
                          ``(ii) 160 multiplied by the number of 
                        counted families for the State for the month.
                  ``(B) Counted families defined.--
                          ``(i) In general.--In subparagraph (A), the 
                        term `counted family' means, with respect to a 
                        State and a month, a family that includes a 
                        work-eligible individual and that receives 
                        assistance in the month under the State program 
                        funded under this part, subject to clause (ii).
                          ``(ii) State option to exclude certain 
                        families.--At the option of a State, the term 
                        `counted family' shall not include--
                                  ``(I) a family in the first month for 
                                which the family receives assistance 
                                from a State program funded under this 
                                part on the basis of the most recent 
                                application for such assistance; or
                                  ``(II) on a case-by-case basis, a 
                                family in which the youngest child has 
                                not attained 12 months of age.
                          ``(iii) State option to include individuals 
                        receiving assistance under a tribal family 
                        assistance plan or tribal work program.--At the 
                        option of a State, the term `counted family' 
                        may include families in the State that are 
                        receiving assistance under a tribal family 
                        assistance plan approved under section 412 or 
                        under a tribal work program to which funds are 
                        provided under this part.
                  ``(C) Work-eligible individual defined.--In this 
                section, the term `work-eligible individual' means an 
                individual--
                          ``(i) who is married or a single head of 
                        household; and
                          ``(ii) whose needs are (or, but for sanctions 
                        under this part that have been in effect for 
                        more than 3 months (whether or not consecutive) 
                        in the preceding 12 months or under part D, 
                        would be) included in determining the amount of 
                        cash assistance to be provided to the family 
                        under the State program funded under this 
                        part.''.
  (b) Recalibration of Caseload Reduction Credit.--Section 
407(b)(3)(A)(ii) (42 U.S.C. 607(b)(3)(A)(ii)) is amended to read as 
follows:
                          ``(ii) the average monthly number of families 
                        that received assistance under the State 
                        program funded under this part during--
                                  ``(I) if the fiscal year is fiscal 
                                year 2003, fiscal year 1996;
                                  ``(II) if the fiscal year is fiscal 
                                year 2004, fiscal year 1998;
                                  ``(III) if the fiscal year is fiscal 
                                year 2005, fiscal year 2001;
                                  ``(IV) if the fiscal year is fiscal 
                                year 2006, fiscal year 2002; or
                                  ``(V) if the fiscal year is fiscal 
                                year 2007, fiscal year 2003.''.
  (c) Superachiever Credit.--Section 407(b) (42 U.S.C. 607(b)) is 
amended by striking paragraphs (4) and (5) and inserting the following:
          ``(4) Superachiever credit.--
                  ``(A) In general.--The participation rate, determined 
                under paragraphs (1) and (2) of this subsection, of a 
                superachiever State for a fiscal year shall be 
                increased by the lesser of--
                          ``(i) the amount (if any) of the 
                        superachiever credit applicable to the State; 
                        or
                          ``(ii) the number of percentage points (if 
                        any) by which the minimum participation rate 
                        required by subsection (a) for the fiscal year 
                        exceeds 50 percent.
                  ``(B) Superachiever state.--For purposes of 
                subparagraph (A), a State is a superachiever State if 
                the State caseload for fiscal year 2001 has declined by 
                at least 60 percent from the State caseload for fiscal 
                year 1995.
                  ``(C) Amount of credit.--The superachiever credit 
                applicable to a State is the number of percentage 
                points (if any) by which the decline referred to in 
                subparagraph (B) exceeds 60 percent.
                  ``(D) Definitions.--In this paragraph:
                          ``(i) State caseload for fiscal year 2001.--
                        The term `State caseload for fiscal year 2001' 
                        means the average monthly number of families 
                        that received assistance during fiscal year 
                        2001 under the State program funded under this 
                        part.
                          ``(ii) State caseload for fiscal year 1995.--
                        The term `State caseload for fiscal year 1995' 
                        means the average monthly number of families 
                        that received aid under the State plan approved 
                        under part A (as in effect on September 30, 
                        1995) during fiscal year 1995.''.
  (d) Countable Hours.--Section 407 of such Act (42 U.S.C. 607) is 
amended by striking subsections (c) and (d) and inserting the 
following:
  ``(c) Countable Hours.--
          ``(1) Definition.--In subsection (b)(2), the term `countable 
        hours' means, with respect to a family for a month, the total 
        number of hours in the month in which any member of the family 
        who is a work-eligible individual is engaged in a direct work 
        activity or other activities specified by the State (excluding 
        an activity that does not address a purpose specified in 
        section 401(a)), subject to the other provisions of this 
        subsection.
          ``(2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                  ``(A) Minimum weekly average of 24 hours of direct 
                work activities required.--If the work-eligible 
                individuals in a family are engaged in a direct work 
                activity for an average total of fewer than 24 hours 
                per week in a month, then the number of countable hours 
                with respect to the family for the month shall be zero.
                  ``(B) Maximum weekly average of 16 hours of other 
                activities.--An average of not more than 16 hours per 
                week of activities specified by the State (subject to 
                the exclusion described in paragraph (1)) may be 
                considered countable hours in a month with respect to a 
                family.
          ``(3) Special rules.--For purposes of paragraph (1):
                  ``(A) Participation in qualified activities.--
                          ``(i) In general.--If, with the approval of 
                        the State, the work-eligible individuals in a 
                        family are engaged in 1 or more qualified 
                        activities for an average total of at least 24 
                        hours per week in a month, then all such 
                        engagement in the month shall be considered 
                        engagement in a direct work activity, subject 
                        to clause (iii).
                          ``(ii) Qualified activity defined.--The term 
                        `qualified activity' means an activity 
                        specified by the State (subject to the 
                        exclusion described in paragraph (1)) that 
                        meets such standards and criteria as the State 
                        may specify, including--
                                  ``(I) substance abuse counseling or 
                                treatment;
                                  ``(II) rehabilitation treatment and 
                                services;
                                  ``(III) work-related education or 
                                training directed effectively at 
                                enabling the family member to work; or
                                  ``(IV) job search or job readiness 
                                assistance.
                          ``(iii) Limitation.--
                                  ``(I) In general.--Except as provided 
                                in subclause (II), clause (i) shall not 
                                apply to a family for more than 3 
                                months in any period of 24 consecutive 
                                months.
                                  ``(II) Special rule applicable to 
                                education and training.--A State may, 
                                on a case-by-case basis, apply clause 
                                (i) to a work-eligible individual so 
                                that participation by the individual in 
                                education or training, if needed to 
                                permit the individual to complete a 
                                certificate program or other specific 
                                course of education in preparation for 
                                specific employment to fill a known job 
                                need in a local area, may be considered 
                                countable hours with respect to the 
                                family of the individual for not more 
                                than 4 months.
                  ``(B) School attendance by teen head of household.--
                The work-eligible members of a family shall be 
                considered to be engaged in a direct work activity for 
                an average of 40 hours per week in a month if the 
                family includes an individual who is married, or is a 
                single head of household, who has not attained 20 years 
                of age, and the individual--
                          ``(i) maintains satisfactory attendance at 
                        secondary school or the equivalent in the 
                        month; or
                          ``(ii) participates in education directly 
                        related to employment for an average of at 
                        least 20 hours per week in the month.
  ``(d) Direct Work Activity.--In this section, the term `direct work 
activity' means--
          ``(1) unsubsidized employment;
          ``(2) subsidized private sector employment;
          ``(3) subsidized public sector employment;
          ``(4) on-the-job training;
          ``(5) supervised work experience; or
          ``(6) supervised community service.''.
  (e) Penalties Against Individuals.--Section 407(e)(1) (42 U.S.C. 
607(e)(1)) is amended to read as follows:
          ``(1) Reduction or termination of assistance.--
                  ``(A) In general.--Except as provided in paragraph 
                (2), if an individual in a family receiving assistance 
                under a State program funded under this part fails to 
                engage in activities required in accordance with this 
                section, or other activities required by the State 
                under the program, and the family does not otherwise 
                engage in activities in accordance with the self-
                sufficiency plan established for the family pursuant to 
                section 408(b), the State shall--
                          ``(i) if the failure is partial or persists 
                        for not more than 1 month--
                                  ``(I) reduce the amount of assistance 
                                otherwise payable to the family pro 
                                rata (or more, at the option of the 
                                State) with respect to any period 
                                during a month in which the failure 
                                occurs; or
                                  ``(II) terminate all assistance to 
                                the family, subject to such good cause 
                                exceptions as the State may establish; 
                                or
                          ``(ii) if the failure is total and persists 
                        for at least 2 consecutive months, terminate 
                        all cash payments to the family including 
                        qualified State expenditures (as defined in 
                        section 409(a)(7)(B)(i)) for at least 1 month 
                        and thereafter until the individual resumes 
                        full participation in the activities, subject 
                        to such good cause exceptions as the State may 
                        establish.
                  ``(B) Special rule.--In the event of a conflict 
                between a requirement of clause (i)(II) or (ii) of 
                subparagraph (A) and a requirement of a State 
                constitution to provide assistance to needy parents and 
                children, the State constitutional requirement shall 
                control.''.
  (f) Conforming Amendments.--
          (1) Section 404(k)(1)(D) (42 U.S.C. 604(k)(1)(D)) is amended 
        by striking ``work activities (as defined in section 407(d)'' 
        and inserting ``direct work activities''.
          (2) Section 407(f) (42 U.S.C. 607(f)) is amended in each of 
        paragraphs (1) and (2) by striking ``work activity described in 
        subsection (d)'' and inserting ``direct work activity''.
          (3) The heading of section 409(a)(14) (42 U.S.C. 609(a)(14)) 
        is amended by inserting ``or refusing to engage in activities 
        under a family self-sufficiency plan'' after ``work''.

SEC. 111. MAINTENANCE OF EFFORT.

  (a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is amended--
          (1) in subparagraph (A) by striking ``fiscal year 1998, 1999, 
        2000, 2001, 2002, or 2003'' and inserting ``fiscal year 2003, 
        2004, 2005, 2006, 2007 or 2008''; and
          (2) in subparagraph (B)(ii)--
                  (A) by inserting ``preceding'' before ``fiscal 
                year''; and
                  (B) by striking ``for fiscal years 1997 through 
                2002,''.
  (b) State Spending on Promoting Healthy Marriage.--
          (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
        adding at the end the following:
  ``(l) Marriage Promotion.--A State, territory, or tribal organization 
to which a grant is made under section 403(a)(2) may use a grant made 
to the State, territory, or tribal organization under any other 
provision of section 403 for marriage promotion activities, and the 
amount of any such grant so used shall be considered State funds for 
purposes of section 403(a)(2).''.
          (2) Federal tanf funds used for marriage promotion 
        disregarded for purposes of maintenance of effort 
        requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 
        609(a)(7)(B)(i)), as amended by section 103(c) of this Act, is 
        amended by adding at the end the following:
                                  ``(VI) Exclusion of federal tanf 
                                funds used for marriage promotion 
                                activities.--Such term does not include 
                                the amount of any grant made to the 
                                State under section 403 that is 
                                expended for a marriage promotion 
                                activity.''.

SEC. 112. PERFORMANCE IMPROVEMENT.

  (a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is amended--
          (1) in paragraph (1)--
                  (A) in subparagraph (A)--
                          (i) by redesignating clauses (vi) and (vii) 
                        (as added by section 103(a) of this Act) as 
                        clauses (vii) and (viii); and
                          (ii) by striking clause (v) and inserting the 
                        following:
                          ``(v) Establish annual, specific numerical 
                        performance goals, measures, measurement 
                        methodology, and plans to improve outcomes with 
                        respect to each of the 4 program purposes 
                        described in section 401(a).
                          ``(vi) Describe any strategies the State may 
                        be undertaking to address--
                                  ``(I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, including 
                                placement into high-demand jobs, 
                                consistent with the criteria used by 
                                the Secretary in establishing 
                                performance targets in regulations 
                                prescribed under section 403(a)(4)(B);
                                  ``(II) efforts to reduce teen 
                                pregnancy;
                                  ``(III) services for struggling and 
                                noncompliant families, and for clients 
                                with special problems; and
                                  ``(IV) program integration, including 
                                the extent to which employment and 
                                training services under the program are 
                                provided through the One-Stop Career 
                                Center System created under the 
                                Workforce Investment Act of 1998, and 
                                the extent to which former recipients 
                                of such assistance have access to 
                                additional core, intensive, or training 
                                services funded through such Act.''; 
                                and
                  (B) in subparagraph (B), by striking clause (iii) (as 
                so redesignated by section 107(b)(1) of this Act) and 
                inserting the following:
                          ``(iii) The document shall describe 
                        strategies and programs the State is 
                        undertaking to engage religious organizations 
                        in the provision of services funded under this 
                        part and efforts related to section 104 of the 
                        Personal Responsibility and Work Opportunity 
                        Reconcilation Act of 1996.
                          ``(iv) The document shall describe strategies 
                        to improve program management and 
                        performance.''; and
          (2) in paragraph (4), by inserting ``and tribal'' after 
        ``that local''.
  (b) Consultation With State Regarding Plan and Design of Tribal 
Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is amended--
          (1) by striking ``and'' at the end of subparagraph (E);
          (2) by striking the period at the end of subparagraph (F) and 
        inserting ``; and''; and
          (3) by adding at the end the following:
                  ``(G) provides an assurance that the State in which 
                the tribe is located has been consulted regarding the 
                plan and its design.''.
  (c) Performance Measures.--Section 413 (42 U.S.C. 613) is amended by 
adding at the end the following:
  ``(k) Performance Improvement.--The Secretary, in consultation with 
the National Governors' Association, the National Conference of State 
Legislatures, and the American Public Human Services Association, shall 
develop uniform performance measures designed to assess the degree of 
effectiveness, and the degree of improvement, of State programs funded 
under this part in accomplishing the purposes of this part.''.
  (d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
613(d)(1)) is amended by striking ``long-term private sector jobs'' and 
inserting ``private sector jobs, the success of the recipients in 
retaining employment, the ability of the recipients to increase their 
wages''.

SEC. 113. DATA COLLECTION AND REPORTING.

  (a) Contents of Report.-- Section 411(a)(1)(A) (42 U.S.C. 
611(a)(1)(A)) is amended--
          (1) in clause (vii), by inserting ``and minor parent'' after 
        ``of each adult'';
          (2) in clause (viii), by striking ``and educational level'';
          (3) in clause (ix), by striking ``, and if the latter 2, the 
        amount received'';
          (4) in clause (x)--
                  (A) by striking ``each type of''; and
                  (B) by inserting before the period ``and, if 
                applicable, the reason for receipt of the assistance 
                for a total of more than 60 months'';
          (5) in clause (xi), by striking the subclauses and inserting 
        the following:
                                  ``(I) Subsidized private sector 
                                employment.
                                  ``(II) Unsubsidized employment.
                                  ``(III) Public sector employment, 
                                supervised work experience, or 
                                supervised community service.
                                  ``(IV) On-the-job training.
                                  ``(V) Job search and placement.
                                  ``(VI) Training.
                                  ``(VII) Education.
                                  ``(VIII) Other activities directed at 
                                the purposes of this part, as specified 
                                in the State plan submitted pursuant to 
                                section 402.'';
          (6) in clause (xii), by inserting ``and progress toward 
        universal engagement'' after ``participation rates'';
          (7) in clause (xiii), by striking ``type and'' before 
        ``amount of assistance'';
          (8) in clause (xvi), by striking subclause (II) and 
        redesignating subclauses (III) through (V) as subclauses (II) 
        through (IV), respectively; and
          (9) by adding at the end the following:
                          ``(xviii) The date the family first received 
                        assistance from the State program on the basis 
                        of the most recent application for such 
                        assistance.
                          ``(xix) Whether a self-sufficiency plan is 
                        established for the family in accordance with 
                        section 408(b).
                          ``(xx) With respect to any child in the 
                        family, the marital status of the parents at 
                        the birth of the child, and if the parents were 
                        not then married, whether the paternity of the 
                        child has been established.''.
  (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 611(a)(1)(B)) is 
amended--
          (1) in clause (i)--
                  (A) by striking ``a sample'' and inserting 
                ``samples''; and
                  (B) by inserting before the period ``, except that 
                the Secretary may designate core data elements that 
                must be reported on all families''; and
          (2) in clause (ii), by striking ``funded under this part'' 
        and inserting ``described in subparagraph (A)''.
  (c) Report on Families That Become Ineligible To Receive 
Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
          (1) by striking paragraph (5);
          (2) by redesignating paragraph (6) as paragraph (5); and
          (3) by inserting after paragraph (5) (as so redesignated) the 
        following:
          ``(6) Report on families that become ineligible to receive 
        assistance.--The report required by paragraph (1) for a fiscal 
        quarter shall include for each month in the quarter the number 
        of families and total number of individuals that, during the 
        month, became ineligible to receive assistance under the State 
        program funded under this part (broken down by the number of 
        families that become so ineligible due to earnings, changes in 
        family composition that result in increased earnings, 
        sanctions, time limits, or other specified reasons).''.
  (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) is 
amended--
          (1) by inserting ``and to collect the necessary data'' before 
        ``with respect to which reports'';
          (2) by striking ``subsection'' and inserting ``section''; and
          (3) by striking ``in defining the data elements'' and all 
        that follows and inserting ``, the National Governors' 
        Association, the American Public Human Services Association, 
        the National Conference of State Legislatures, and others in 
        defining the data elements.''.
  (e) Additional Reports by States.--Section 411 (42 U.S.C. 611) is 
amended--
          (1) by redesignating subsection (b) as subsection (e); and
          (2) by inserting after subsection (a) the following:
  ``(b) Annual Reports on Program Characteristics.--Not later than 90 
days after the end of fiscal year 2004 and each succeeding fiscal year, 
each eligible State shall submit to the Secretary a report on the 
characteristics of the State program funded under this part and other 
State programs funded with qualified State expenditures (as defined in 
section 409(a)(7)(B)(i)). The report shall include, with respect to 
each such program, the program name, a description of program 
activities, the program purpose, the program eligibility criteria, the 
sources of program funding, the number of program beneficiaries, 
sanction policies, and any program work requirements.
  ``(c) Monthly Reports on Caseload.--Not later than 3 months after the 
end of a calendar month that begins 1 year or more after the enactment 
of this subsection, each eligible State shall submit to the Secretary 
report on the number of families and total number of individuals 
receiving assistance in the calendar month under the State program 
funded under this part.
  ``(d) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2004, not later than January 1 of each fiscal year, each 
eligible State shall submit to the Secretary a report on achievement 
and improvement during the preceding fiscal year under the numerical 
performance goals and measures under the State program funded under 
this part with respect to each of the matters described in section 
402(a)(1)(A)(v).''.
  (f) Annual Reports to Congress by the Secretary.--Section 411(e), as 
so redesignated by subsection (e) of this section, is amended--
          (1) in the matter preceding paragraph (1), by striking ``and 
        each fiscal year thereafter'' and inserting ``and by July 1 of 
        each fiscal year thereafter'';
          (2) in paragraph (2), by striking ``families applying for 
        assistance,'' and by striking the last comma; and
          (3) in paragraph (3), by inserting ``and other programs 
        funded with qualified State expenditures (as defined in section 
        409(a)(7)(B)(i))'' before the semicolon.
  (g) Increased Analysis of State Single Audit Reports.--Section 411 
(42 U.S.C. 611) is amended by adding at the end the following:
  ``(f) Increased Analysis of State Single Audit Reports.--
          ``(1) In general.--Within 3 months after a State submits to 
        the Secretary a report pursuant to section 7502(a)(1)(A) of 
        title 31, United States Code, the Secretary shall analyze the 
        report for the purpose of identifying the extent and nature of 
        problems related to the oversight by the State of 
        nongovernmental entities with respect to contracts entered into 
        by such entities with the State program funded under this part, 
        and determining what additional actions may be appropriate to 
        help prevent and correct the problems.
          ``(2) Inclusion of program oversight section in annual report 
        to the congress.--The Secretary shall include in each report 
        under subsection (a) a section on oversight of State programs 
        funded under this part, including findings on the extent and 
        nature of the problems referred to in paragraph (1), actions 
        taken to resolve the problems, and to the extent the Secretary 
        deems appropriate make recommendations on changes needed to 
        resolve the problems.''.

SEC. 114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

  (a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) (42 U.S.C. 
612(a)(1)(A)) is amended by striking ``1997, 1998, 1999, 2000, 2001, 
and 2002'' and inserting ``2003 through 2007''.
  (b) Grants for Indian Tribes That Received JOBS funds.--Section 
412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking ``1997, 
1998, 1999, 2000, 2001, and 2002'' and inserting ``2003 through 2007''.

SEC. 115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

  (a) Secretary's Fund for Research, Demonstrations, and Technical 
Assistance.--Section 413 (42 U.S.C. 613), as amended by section 112(c) 
of this Act, is further amended by adding at the end the following:
  ``(l) Funding for Research, Demonstrations, and Technical 
Assistance.--
          ``(1) In general.--Out of any money in the Treasury of the 
        United States not otherwise appropriated, there are 
        appropriated $102,000,000 for each of fiscal years 2003 through 
        2007, which shall be available to the Secretary for the purpose 
        of conducting and supporting research and demonstration 
        projects by public or private entities, and providing technical 
        assistance to States, Indian tribal organizations, and such 
        other entities as the Secretary may specify that are receiving 
        a grant under this part, which shall be expended primarily on 
        activities described in section 403(a)(2)(B), and which shall 
        be in addition to any other funds made available under this 
        part.
          ``(2) Set aside for demonstration projects for coordination 
        of provision of child welfare and tanf services to tribal 
        families at risk of child abuse or neglect.--
                  ``(A) In general.--Of the amounts made available 
                under paragraph (1) for a fiscal year, $2,000,000 shall 
                be awarded on a competitive basis to fund demonstration 
                projects designed to test the effectiveness of tribal 
                governments or tribal consortia in coordinating the 
                provision to tribal families at risk of child abuse or 
                neglect of child welfare services and services under 
                tribal programs funded under this part.
                  ``(B) Use of funds.--A grant made to such a project 
                shall be used--
                          ``(i) to improve case management for families 
                        eligible for assistance from such a tribal 
                        program;
                          ``(ii) for supportive services and assistance 
                        to tribal children in out-of-home placements 
                        and the tribal families caring for such 
                        children, including families who adopt such 
                        children; and
                          ``(iii) for prevention services and 
                        assistance to tribal families at risk of child 
                        abuse and neglect.
                  ``(C) Reports.--The Secretary may require a recipient 
                of funds awarded under this paragraph to provide the 
                Secretary with such information as the Secretary deems 
                relevant to enable the Secretary to facilitate and 
                oversee the administration of any project for which 
                funds are provided under this paragraph.''.
  (b) Funding of Studies and Demonstrations.--Section 413(h)(1) (42 
U.S.C. 613(h)(1)) is amended in the matter preceding subparagraph (A) 
by striking ``1997 through 2002'' and inserting ``2003 through 2007''.
  (c) Report on Enforcement of Certain Affidavits of Support and 
Sponsor Deeming.--Not later than March 31, 2004, the Secretary of 
Health and Human Services, in consultation with the Attorney General, 
shall submit to the Congress a report on the enforcement of affidavits 
of support and sponsor deeming as required by section 421, 422, and 432 
of the Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996.

SEC. 116. STUDY BY THE CENSUS BUREAU.

  (a) In General.--Section 414(a) (42 U.S.C. 614(a)) is amended to read 
as follows:
  ``(a) In General.--The Bureau of the Census shall implement a new 
longitudinal survey of program dynamics, developed in consultation with 
the Secretary and made available to interested parties, to allow for 
the assessment of the outcomes of continued welfare reform on the 
economic and child well-being of low-income families with children, 
including those who received assistance or services from a State 
program funded under this part, and, to the extent possible, shall 
provide State representative samples. The content of the survey should 
include such information as may be necessary to examine the issues of 
out-of-wedlock childbearing, marriage, welfare dependency, the 
beginning and ending of spells of assistance, work, earnings and 
employment stability, and the well-being of children.''.
  (b) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is amended by 
striking ``1996,'' and all that follows through ``2002'' and inserting 
``2003 through 2007''.

SEC. 117. DEFINITION OF ASSISTANCE.

  (a) In General.--Section 419 (42 U.S.C. 619) is amended by adding at 
the end the following:
          ``(6) Assistance.--
                  ``(A) In general.--The term `assistance' means 
                payment, by cash, voucher, or other means, to or for an 
                individual or family for the purpose of meeting a 
                subsistence need of the individual or family (including 
                food, clothing, shelter, and related items, but not 
                including costs of transportation or child care).
                  ``(B) Exception.--The term `assistance' does not 
                include a payment described in subparagraph (A) to or 
                for an individual or family on a short-term, 
                nonrecurring basis (as defined by the State in 
                accordance with regulations prescribed by the 
                Secretary).''.
  (b) Conforming Amendments.--
          (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
        striking ``assistance'' and inserting ``aid''.
          (2) Section 404(f) (42 U.S.C. 604(f)) is amended by striking 
        ``assistance'' and inserting ``benefits or services''.
          (3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
        amended in the heading by striking ``assistance'' and inserting 
        ``aid''.
          (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
        striking ``assistance'' and inserting ``aid''.

SEC. 118. TECHNICAL CORRECTIONS.

  (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by inserting a 
comma after ``appropriate''.
  (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 611(a)(1)(A)(ii)(III)) 
is amended by striking the last close parenthesis.
  (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is amended by 
striking ``section'' and inserting ``sections''.
  (d)(1) Section 413 (42 U.S.C. 613) is amended by striking subsection 
(g) and redesignating subsections (h) through (j) and subsections (k) 
and (l) (as added by sections 112(c) and 115(a) of this Act, 
respectively) as subsections (g) through (k), respectively.
  (2) Each of the following provisions is amended by striking 
``413(j)'' and inserting ``413(i)'':
          (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
        603(a)(5)(A)(ii)(III)).
          (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
          (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
          (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

SEC. 119. FATHERHOOD PROGRAM.

  (a) Short Title.--This section may be cited as the ``Promotion and 
Support of Responsible Fatherhood and Healthy Marriage Act of 2002''.
  (b) Fatherhood Program.--
          (1) In general.--Title I of the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193) is amended by adding at the end the following:

``SEC. 117. FATHERHOOD PROGRAM.

  ``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended by 
inserting after part B the following:

                      `PART C--FATHERHOOD PROGRAM

`SEC. 441. FINDINGS AND PURPOSES.

  `(a) Findings.--The Congress finds that there is substantial evidence 
strongly indicating the urgent need to promote and support involved, 
committed, and responsible fatherhood, and to encourage and support 
healthy marriages between parents raising children, including data 
demonstrating the following:
          `(1) In approximately 90 percent of cases where a parent is 
        absent, that parent is the father.
          `(2) By some estimates, 60 percent of children born in the 
        1990's will spend a significant portion of their childhood in a 
        home without a father.
          `(3) Nearly 75 percent of children in single-parent homes 
        will experience poverty before they are 11 years old, compared 
        with only 20 percent of children in 2-parent families.
          `(4) Low income is positively correlated with children's 
        difficulties with education, social adjustment, and 
        delinquency, and single-parent households constitute a 
        disproportionate share of low-income households.
          `(5) Where families (whether intact or with a parent absent) 
        are living in poverty, a significant factor is the father's 
        lack of job skills.
          `(6) Children raised in 2-parent married families, on 
        average, fare better as a group in key areas, including better 
        school performance, reduced rates of substance abuse, crime, 
        and delinquency, fewer health, emotional, and behavioral 
        problems, lower rates of teenage sexual activity, less risk of 
        abuse or neglect, and lower risk of teen suicide.
          `(7) Committed and responsible fathering during infancy and 
        early childhood contributes to the development of emotional 
        security, curiosity, and math and verbal skills.
          `(8) An estimated 24,000,000 children (33.5 percent) live 
        apart from their biological father.
          `(9) A recent national survey indicates that of all children 
        under age 18 not living with their biological father, 29 
        percent had not seen their father even once in the last 12 
        months.
  `(b) Purposes.--The purposes of this part are:
          `(1) To provide for projects and activities by public 
        entities and by nonprofit community entities, including 
        religious organizations, designed to test promising approaches 
        to accomplishing the following objectives:
                  `(A) Promoting responsible, caring, and effective 
                parenting through counseling, mentoring, and parenting 
                education, dissemination of educational materials and 
                information on parenting skills, encouragement of 
                positive father involvement, including the positive 
                involvement of nonresident fathers, and other methods.
                  `(B) Enhancing the abilities and commitment of 
                unemployed or low-income fathers to provide material 
                support for their families and to avoid or leave 
                welfare programs by assisting them to take full 
                advantage of education, job training, and job search 
                programs, to improve work habits and work skills, to 
                secure career advancement by activities such as 
                outreach and information dissemination, coordination, 
                as appropriate, with employment services and job 
                training programs, including the One-Stop delivery 
                system established under title I of the Workforce 
                Investment Act of 1998, encouragement and support of 
                timely payment of current child support and regular 
                payment toward past due child support obligations in 
                appropriate cases, and other methods.
                  `(C) Improving fathers' ability to effectively manage 
                family business affairs by means such as education, 
                counseling, and mentoring in matters including 
                household management, budgeting, banking, and handling 
                of financial transactions, time management, and home 
                maintenance.
                  `(D) Encouraging and supporting healthy marriages and 
                married fatherhood through such activities as 
                premarital education, including the use of premarital 
                inventories, marriage preparation programs, skills-
                based marriage education programs, marital therapy, 
                couples counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, including 
                those designed to reduce child abuse and domestic 
                violence, and dissemination of information about the 
                benefits of marriage for both parents and children.
          `(2) Through the projects and activities described in 
        paragraph (1), to improve outcomes for children with respect to 
        measures such as increased family income and economic security, 
        improved school performance, better health, improved emotional 
        and behavioral stability and social adjustment, and reduced 
        risk of delinquency, crime, substance abuse, child abuse and 
        neglect, teen sexual activity, and teen suicide.
          `(3) To evaluate the effectiveness of various approaches and 
        to disseminate findings concerning outcomes and other 
        information in order to encourage and facilitate the 
        replication of effective approaches to accomplishing these 
        objectives.

`SEC. 442. DEFINITIONS.

  `In this part, the terms ``Indian tribe'' and ``tribal organization'' 
have the meanings given them in subsections (e) and (l), respectively, 
of section 4 of the Indian Self-Determination and Education Assistance 
Act.

`SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

  `(a) In General.--The Secretary may make grants for fiscal years 2003 
through 2007 to public and nonprofit community entities, including 
religious organizations, and to Indian tribes and tribal organizations, 
for demonstration service projects and activities designed to test the 
effectiveness of various approaches to accomplish the objectives 
specified in section 441(b)(1).
  `(b) Eligibility Criteria for Full Service Grants.--In order to be 
eligible for a grant under this section, except as specified in 
subsection (c), an entity shall submit an application to the Secretary 
containing the following:
          `(1) Project description.--A statement including--
                  `(A) a description of the project and how it will be 
                carried out, including the geographical area to be 
                covered and the number and characteristics of clients 
                to be served, and how it will address each of the 4 
                objectives specified in section 441(b)(1); and
                  `(B) a description of the methods to be used by the 
                entity or its contractor to assess the extent to which 
                the project was successful in accomplishing its 
                specific objectives and the general objectives 
                specified in section 441(b)(1).
          `(2) Experience and qualifications.--A demonstration of 
        ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying out 
        projects of similar design and scope, and such other 
        information as the Secretary may find necessary to demonstrate 
        the entity's capacity to carry out the project, including the 
        entity's ability to provide the non-Federal share of project 
        resources.
          `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
          `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
          `(5) Coordination with specified programs.--An undertaking to 
        coordinate, as appropriate, with State and local entities 
        responsible for the programs under parts A, B, and D of this 
        title, including programs under title I of the Workforce 
        Investment Act of 1998 (including the One-Stop delivery 
        system), and such other programs as the Secretary may require.
          `(6) Records, reports, and audits.--An agreement to maintain 
        such records, make such reports, and cooperate with such 
        reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
          `(7) Self-initiated evaluation.--If the entity elects to 
        contract for independent evaluation of the project (part or all 
        of the cost of which may be paid for using grant funds), a 
        commitment to submit to the Secretary a copy of the evaluation 
        report within 30 days after completion of the report and not 
        more than 1 year after completion of the project.
          `(8) Cooperation with secretary's oversight and evaluation.--
        An agreement to cooperate with the Secretary's evaluation of 
        projects assisted under this section, by means including random 
        assignment of clients to service recipient and control groups, 
        if determined by the Secretary to be appropriate, and affording 
        the Secretary access to the project and to project-related 
        records and documents, staff, and clients.
  `(c) Eligibility Criteria for Limited Purpose Grants.--In order to be 
eligible for a grant under this section in an amount under $25,000 per 
fiscal year, an entity shall submit an application to the Secretary 
containing the following:
          `(1) Project description.--A description of the project and 
        how it will be carried out, including the number and 
        characteristics of clients to be served, the proposed duration 
        of the project, and how it will address at least 1 of the 4 
        objectives specified in section 441(b)(1).
          `(2) Qualifications.--Such information as the Secretary may 
        require as to the capacity of the entity to carry out the 
        project, including any previous experience with similar 
        activities.
          `(3) Coordination with related programs.--As required by the 
        Secretary in appropriate cases, an undertaking to coordinate 
        and cooperate with State and local entities responsible for 
        specific programs relating to the objectives of the project 
        including, as appropriate, jobs programs and programs serving 
        children and families.
          `(4) Records, reports, and audits.--An agreement to maintain 
        such records, make such reports, and cooperate with such 
        reviews or audits as the Secretary may find necessary for 
        purposes of oversight of project activities and expenditures.
          `(5) Cooperation with secretary's oversight and evaluation.--
        An agreement to cooperate with the Secretary's evaluation of 
        projects assisted under this section, by means including 
        affording the Secretary access to the project and to project-
        related records and documents, staff, and clients.
  `(d) Considerations in Awarding Grants.--
          `(1) Diversity of projects.--In awarding grants under this 
        section, the Secretary shall seek to achieve a balance among 
        entities of differing sizes, entities in differing geographic 
        areas, entities in urban and in rural areas, and entities 
        employing differing methods of achieving the purposes of this 
        section, including working with the State agency responsible 
        for the administration of part D to help fathers satisfy child 
        support arrearage obligations.
          `(2) Preference for projects serving low-income fathers.--In 
        awarding grants under this section, the Secretary may give 
        preference to applications for projects in which a majority of 
        the clients to be served are low-income fathers.
  `(e) Federal Share.--
          `(1) In general.--Grants for a project under this section for 
        a fiscal year shall be available for a share of the cost of 
        such project in such fiscal year equal to--
                  `(A) up to 80 percent (or up to 90 percent, if the 
                entity demonstrates to the Secretary's satisfaction 
                circumstances limiting the entity's ability to secure 
                non-Federal resources) in the case of a project under 
                subsection (b); and
                  `(B) up to 100 percent, in the case of a project 
                under subsection (c).
          `(2) Non-federal share.--The non-Federal share may be in cash 
        or in kind. In determining the amount of the non-Federal share, 
        the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

  `(a) In General.--The Secretary may make grants under this section 
for fiscal years 2003 through 2007 to eligible entities (as specified 
in subsection (b)) for 2 multicity, multistate projects demonstrating 
approaches to achieving the objectives specified in section 441(b)(1). 
One of the projects shall test the use of married couples to deliver 
program services.
  `(b) Eligible Entities.--An entity eligible for a grant under this 
section must be a national nonprofit fatherhood promotion organization 
that meets the following requirements:
          `(1) Experience with fatherhood programs.--The organization 
        must have substantial experience in designing and successfully 
        conducting programs that meet the purposes described in section 
        441.
          `(2) Experience with multicity, multistate programs and 
        government coordination.--The organization must have experience 
        in simultaneously conducting such programs in more than 1 major 
        metropolitan area in more than 1 State and in coordinating such 
        programs, where appropriate, with State and local government 
        agencies and private, nonprofit agencies (including community-
        based and religious organizations), including State or local 
        agencies responsible for child support enforcement and 
        workforce development.
  `(c) Application Requirements.--In order to be eligible for a grant 
under this section, an entity must submit to the Secretary an 
application that includes the following:
          `(1) Qualifications.--
                  `(A) Eligible entity.--A demonstration that the 
                entity meets the requirements of subsection (b).
                  `(B) Other.--Such other information as the Secretary 
                may find necessary to demonstrate the entity's capacity 
                to carry out the project, including the entity's 
                ability to provide the non-Federal share of project 
                resources.
          `(2) Project description.--A description of and commitments 
        concerning the project design, including the following:
                  `(A) In general.--A detailed description of the 
                proposed project design and how it will be carried out, 
                which shall--
                          `(i) provide for the project to be conducted 
                        in at least 3 major metropolitan areas;
                          `(ii) state how it will address each of the 4 
                        objectives specified in section 441(b)(1);
                          `(iii) demonstrate that there is a sufficient 
                        number of potential clients to allow for the 
                        random selection of individuals to participate 
                        in the project and for comparisons with 
                        appropriate control groups composed of 
                        individuals who have not participated in such 
                        projects; and
                          `(iv) demonstrate that the project is 
                        designed to direct a majority of project 
                        resources to activities serving low-income 
                        fathers (but the project need not make services 
                        available on a means-tested basis).
                  `(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                          `(i) in consultation with the evaluator 
                        selected pursuant to section 445, and as 
                        required by the Secretary, will modify the 
                        project design, initially and (if necessary) 
                        subsequently throughout the duration of the 
                        project, in order to facilitate ongoing and 
                        final oversight and evaluation of project 
                        operation and outcomes (by means including, to 
                        the maximum extent feasible, random assignment 
                        of clients to service recipient and control 
                        groups), and to provide for mid-course 
                        adjustments in project design indicated by 
                        interim evaluations;
                          `(ii) will submit to the Secretary revised 
                        descriptions of the project design as modified 
                        in accordance with clause (i); and
                          `(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and ongoing and 
                        final evaluation of the project, by means 
                        including affording the Secretary access to the 
                        project and to project-related records and 
                        documents, staff, and clients.
          `(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess for the 
        presence of, and intervene to resolve, domestic violence and 
        child abuse and neglect, including how the entity will 
        coordinate with State and local child protective service and 
        domestic violence programs.
          `(4) Addressing concerns relating to substance abuse and 
        sexual activity.--A commitment to make available to each 
        individual participating in the project education about 
        alcohol, tobacco, and other drugs, and about the health risks 
        associated with abusing such substances, and information about 
        diseases and conditions transmitted through substance abuse and 
        sexual contact, including HIV/AIDS, and to coordinate with 
        providers of services addressing such problems, as appropriate.
          `(5) Coordination with specified programs.--An undertaking to 
        coordinate, as appropriate, with State and local entities 
        responsible for the programs funded under parts A, B, and D of 
        this title, programs under title I of the Workforce Investment 
        Act of 1998 (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
          `(6) Records, reports, and audits.--An agreement to maintain 
        such records, make such reports, and cooperate with such 
        reviews or audits (in addition to those required under the 
        preceding provisions of paragraph (2)) as the Secretary may 
        find necessary for purposes of oversight of project activities 
        and expenditures.
  `(d) Federal Share.--
          `(1) In general.--Grants for a project under this section for 
        a fiscal year shall be available for up to 80 percent of the 
        cost of such project in such fiscal year.
          `(2) Non-federal share.--The non-Federal share may be in cash 
        or in kind. In determining the amount of the non-Federal share, 
        the Secretary may attribute fair market value to goods, 
        services, and facilities contributed from non-Federal sources.

`SEC. 445. EVALUATION.

  `(a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of service 
projects funded under sections 443 and 444 from the standpoint of the 
purposes specified in section 441(b)(1).
  `(b) Evaluation Methodology.--Evaluations under this section shall--
          `(1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control groups 
        and other appropriate comparisons of groups of individuals 
        receiving and not receiving services;
          `(2) describe and measure the effectiveness of the projects 
        in achieving their specific project goals; and
          `(3) describe and assess, as appropriate, the impact of such 
        projects on marriage, parenting, domestic violence, child abuse 
        and neglect, money management, employment and earnings, payment 
        of child support, and child well-being, health, and education.
  `(c) Evaluation Reports.--The Secretary shall publish the following 
reports on the results of the evaluation:
          `(1) An implementation evaluation report covering the first 
        24 months of the activities under this part to be completed by 
        36 months after initiation of such activities.
          `(2) A final report on the evaluation to be completed by 
        September 30, 2010.

`SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

  `The Secretary is authorized, by grant, contract, or cooperative 
agreement, to carry out projects and activities of national 
significance relating to fatherhood promotion, including--
          `(1) Collection and dissemination of information.--Assisting 
        States, communities, and private entities, including religious 
        organizations, in efforts to promote and support marriage and 
        responsible fatherhood by collecting, evaluating, developing, 
        and making available (through the Internet and by other means) 
        to all interested parties information regarding approaches to 
        accomplishing the objectives specified in section 441(b)(1).
          `(2) Media campaign.--Developing, promoting, and distributing 
        to interested States, local governments, public agencies, and 
        private nonprofit organizations, including charitable and 
        religious organizations, a media campaign that promotes and 
        encourages involved, committed, and responsible fatherhood and 
        married fatherhood.
          `(3) Technical assistance.--Providing technical assistance, 
        including consultation and training, to public and private 
        entities, including community organizations and faith-based 
        organizations, in the implementation of local fatherhood 
        promotion programs.
          `(4) Research.--Conducting research related to the purposes 
        of this part.

`SEC. 447. NONDISCRIMINATION.

  `The projects and activities assisted under this part shall be 
available on the same basis to all fathers and expectant fathers able 
to benefit from such projects and activities, including married and 
unmarried fathers and custodial and noncustodial fathers, with 
particular attention to low-income fathers, and to mothers and 
expectant mothers on the same basis as to fathers.

`SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN 
                    PURPOSE.

  `(a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2003 through 2007 to carry out the 
provisions of this part.
  `(b) Reservation.--Of the amount appropriated under this section for 
each fiscal year, not more than 15 percent shall be available for the 
costs of the multicity, multicounty, multistate demonstration projects 
under section 444, evaluations under section 445, and projects of 
national significance under section 446.'.
  ``(b) Inapplicability of Effective Date Provisions.--Section 116 
shall not apply to the amendment made by subsection (a) of this 
section.''.
          (2) Clerical amendment.--Section 2 of such Act is amended in 
        the table of contents by inserting after the item relating to 
        section 116 the following new item:

``Sec. 117.Fatherhood program.''.

                          TITLE II--CHILD CARE

SEC. 201. ENTITLEMENT FUNDING.

  Section 418(a)(3)(F) (42 U.S.C. 618(a)(3)(F)) is amended to read as 
follows:
                  ``(F) $2,717,000,000 for each of fiscal years 2002 
                through 2007.''.

                        TITLE III--CHILD SUPPORT

SEC. 301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF CHILD 
                    SUPPORT PAYMENTS TO FAMILIES RECEIVING TANF.

  (a) In General.--Section 457(a) (42 U.S.C. 657(a)) is amended--
          (1) in paragraph (1)(A), by inserting ``subject to paragraph 
        (7)'' before the semicolon; and
          (2) by adding at the end the following:
          ``(7) Federal matching funds for limited pass through of 
        child support payments to families receiving tanf.--
        Notwithstanding paragraph (1), a State shall not be required to 
        pay to the Federal Government the Federal share of an amount 
        collected during a month on behalf of a family that is a 
        recipient of assistance under the State program funded under 
        part A, to the extent that--
                  ``(A) the State distributes the amount to the family;
                  ``(B) the total of the amounts so distributed to the 
                family during the month--
                          ``(i) exceeds the amount (if any) that, as of 
                        December 31, 2001, was required under State law 
                        to be distributed to a family under paragraph 
                        (1)(B); and
                          ``(ii) does not exceed the greater of--
                                  ``(I) $100; or
                                  ``(II) $50 plus the amount described 
                                in clause (i); and
                  ``(C) the amount is disregarded in determining the 
                amount and type of assistance provided to the family 
                under the State program funded under part A.''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2004.

SEC. 302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT PAYMENTS TO 
                    FAMILIES THAT FORMERLY RECEIVED TANF.

  (a) In General.--Section 457(a) (42 U.S.C. 657(a)), as amended by 
section 301 of this Act, is amended--
          (1) in paragraph (2)(B), in the matter preceding clause (i), 
        by inserting ``, except as provided in paragraph (8),'' after 
        ``shall''; and
          (2) by adding at the end the following:
          ``(8) State option to pass through all child support payments 
        to families that formerly received tanf.--In lieu of applying 
        paragraph (2) to any family described in paragraph (2), a State 
        may distribute to the family any amount collected during a 
        month on behalf of the family.''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts distributed on or after October 1, 2004.

SEC. 303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT ORDERS FOR 
                    FAMILIES RECEIVING TANF.

  (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
666(a)(10)(A)(i)) is amended--
          (1) by striking ``parent, or,'' and inserting ``parent or''; 
        and
          (2) by striking ``upon the request of the State agency under 
        the State plan or of either parent,''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on October 1, 2004.

SEC. 304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT COLLECTION FOR 
                    FAMILY THAT HAS NEVER RECEIVED TANF.

  (a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is amended--
          (1) by inserting ``(i)'' after ``(B)'';
          (2) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively;
          (3) by adding ``and'' after the semicolon; and
          (4) by adding after and below the end the following new 
        clause:
                  ``(ii) in the case of an individual who has never 
                received assistance under a State program funded under 
                part A and for whom the State has collected at least 
                $500 of support, the State shall impose an annual fee 
                of $25 for each case in which services are furnished, 
                which shall be retained by the State from support 
                collected on behalf of the individual (but not from the 
                1st $500 so collected), paid by the individual applying 
                for the services, recovered from the absent parent, or 
                paid by the State out of its own funds (the payment of 
                which from State funds shall not be considered as an 
                administrative cost of the State for the operation of 
                the plan, and shall be considered income to the 
                program);''.
  (b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 657(a)(3)) is 
amended to read as follows:
          ``(3) Families that never received assistance.--In the case 
        of any other family, the State shall distribute to the family 
        the portion of the amount so collected that remains after 
        withholding any fee pursuant to section 454(6)(B)(ii).''.
  (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003.

SEC. 305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

  Not later than 6 months after the date of the enactment of this Act, 
the Secretary of Health and Human Services shall submit to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report on the procedures that the 
States use generally to locate custodial parents for whom child support 
has been collected but not yet distributed. The report shall include an 
estimate of the total amount of such undistributed child support and 
the average length of time it takes for such child support to be 
distributed. To the extent the Secretary deems appropriate, the 
Secretary shall include in the report recommendations as to whether 
additional procedures should be established at the State or Federal 
level to expedite the payment of undistributed child support.

SEC. 306. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF 
                    UNEMPLOYMENT COMPENSATION PROGRAMS.

  (a) In General.--Section 453(j) (42 U.S.C. 653(j)) is amended by 
adding at the end the following:
          ``(7) Information comparisons and disclosure to assist in 
        administration of unemployment compensation programs.--
                  ``(A) In general.--If a State agency responsible for 
                the administration of an unemployment compensation 
                program under Federal or State law transmits to the 
                Secretary the name and social security account number 
                of an individual, the Secretary shall, if the 
                information in the National Directory of New Hires 
                indicates that the individual may be employed, disclose 
                to the State agency the name, address, and employer 
                identification number of any putative employer of the 
                individual, subject to this paragraph.
                  ``(B) Condition on disclosure.--The Secretary shall 
                make a disclosure under subparagraph (A) only to the 
                extent that the Secretary determines that the 
                disclosure would not interfere with the effective 
                operation of the program under this part.
                  ``(C) Use of information.--A State agency may use 
                information provided under this paragraph only for 
                purposes of administering a program referred to in 
                subparagraph (A).''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on October 1, 2003.

SEC. 307. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE TRIGGERING 
                    PASSPORT DENIAL.

  (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is amended 
by striking ``$5,000'' and inserting ``$2,500''.
  (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 654(31)) is 
amended by striking ``$5,000'' and inserting ``$2,500''.
  (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2003.

SEC. 308. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT PAST-DUE CHILD 
                    SUPPORT ON BEHALF OF CHILDREN WHO ARE NOT MINORS.

  (a) In General.--Section 464 (42 U.S.C. 664) is amended--
          (1) in subsection (a)(2)(A), by striking ``(as that term is 
        defined for purposes of this paragraph under subsection (c))''; 
        and
          (2) in subsection (c)--
                  (A) in paragraph (1)--
                          (i) by striking ``(1) Except as provided in 
                        paragraph (2), as used in'' and inserting 
                        ``In''; and
                          (ii) by inserting ``(whether or not a 
                        minor)'' after ``a child'' each place it 
                        appears; and
                  (B) by striking paragraphs (2) and (3).
  (b) Effective Date.--The amendments made by subsection (a) shall take 
effect on October 1, 2004.

SEC. 309. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR SERVICE-
                    CONNECTED DISABILITIES IN ORDER TO ENFORCE CHILD 
                    SUPPORT OBLIGATIONS.

  (a) In General.--Section 459(h) (42 U.S.C. 659(h)) is amended--
          (1) in paragraph (1)(A)(ii)(V), by striking all that follows 
        ``Armed Forces'' and inserting a semicolon; and
          (2) by adding at the end the following:
          ``(3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--Notwithstanding 
        any other provision of this section:
                  ``(A) Compensation described in paragraph 
                (1)(A)(ii)(V) shall not be subject to withholding 
                pursuant to this section--
                          ``(i) for payment of alimony; or
                          ``(ii) for payment of child support if the 
                        individual is fewer than 60 days in arrears in 
                        payment of the support.
                  ``(B) Not more than 50 percent of any payment of 
                compensation described in paragraph (1)(A)(ii)(V) may 
                be withheld pursuant to this section.''.
  (b) Effective Date.--The amendments made by subsection (a) shall take 
effect on October 1, 2004.

SEC. 310. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

  Section 3716(h)(3) of title 31, United States Code, is amended to 
read as follows:
  ``(3) In applying this subsection with respect to any debt owed to a 
State, other than past due support being enforced by the State, 
subsection (c)(3)(A) shall not apply. Subsection (c)(3)(A) shall apply 
with respect to past due support being enforced by the State 
notwithstanding any other provision of law, including sections 207 and 
1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), 
section 413(b) of Public law 91-173 (30 U.S.C. 923(b)), and section 14 
of the Act of August 29, 1935 (45 U.S.C. 231m).''.

SEC. 311. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

  Section 452(j) (42 U.S.C. 652(j)) is amended by inserting ``or the 
amount appropriated under this paragraph for fiscal year 2002, 
whichever is greater,'' before ``which shall be available''.

SEC. 312. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE FUNDING.

  Section 453(o) (42 U.S.C. 653(o)) is amended--
          (1) in the 1st sentence, by inserting ``or the amount 
        appropriated under this paragraph for fiscal year 2002, 
        whichever is greater,'' before ``which shall be available''; 
        and
          (2) in the 2nd sentence, by striking ``for each of fiscal 
        years 1997 through 2001''.

                        TITLE IV--CHILD WELFARE

SEC. 401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION PROJECTS.

  Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking 
``2002'' and inserting ``2007''.

SEC. 402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.

  Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by striking 
``not more than 10''.

SEC. 403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT MAY BE 
                    GRANTED WAIVERS TO CONDUCT DEMONSTRATION PROJECTS 
                    ON SAME TOPIC.

  Section 1130 (42 U.S.C. 1320a-9) is amended by adding at the end the 
following:
  ``(h) No Limit on Number of States That May Be Granted Waivers To 
Conduct Same or Similar Demonstration Projects.--The Secretary shall 
not refuse to grant a waiver to a State under this section on the 
grounds that a purpose of the waiver or of the demonstration project 
for which the waiver is necessary would be the same as or similar to a 
purpose of another waiver or project that is or may be conducted under 
this section.''.

SEC. 404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS THAT MAY BE 
                    GRANTED TO A SINGLE STATE FOR DEMONSTRATION 
                    PROJECTS.

  Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the 
end the following:
  ``(i) No Limit on Number of Waivers Granted to, or Demonstration 
Projects That May Be Conducted by, a Single State.--The Secretary shall 
not impose any limit on the number of waivers that may be granted to a 
State, or the number of demonstration projects that a State may be 
authorized to conduct, under this section.''.

SEC. 405. STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS TO AND 
                    EXTENSIONS OF DEMONSTRATION PROJECTS REQUIRING 
                    WAIVERS.

  Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the 
end the following:
  ``(j) Streamlined Process for Consideration of Amendments and 
Extensions.--The Secretary shall develop a streamlined process for 
consideration of amendments and extensions proposed by States to 
demonstration projects conducted under this section.''.

SEC. 406. AVAILABILITY OF REPORTS.

  Section 1130 (42 U.S.C. 1320a-9) is further amended by adding at the 
end the following:
  ``(k) Availability of Reports.--The Secretary shall make available to 
any State or other interested party any report provided to the 
Secretary under subsection (f)(2), and any evaluation or report made by 
the Secretary with respect to a demonstration project conducted under 
this section, with a focus on information that may promote best 
practices and program improvements.''.

SEC. 407. TECHNICAL CORRECTION.

  Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by striking 
``422(b)(9)'' and inserting ``422(b)(10)''.

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

SEC. 501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
                    DETERMINATIONS.

  Section 1633 (42 U.S.C. 1383b) is amended by adding at the end the 
following:
  ``(e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection (a) in 
connection with applications for benefits under this title on the basis 
of blindness or disability, that individuals who have attained 18 years 
of age are blind or disabled as of a specified onset date. The 
Commissioner of Social Security shall review such a determination 
before any action is taken to implement the determination.
  ``(2)(A) In carrying out paragraph (1), the Commissioner of Social 
Security shall review--
          ``(i) at least 20 percent of all determinations referred to 
        in paragraph (1) that are made in fiscal year 2003;
          ``(ii) at least 40 percent of all such determinations that 
        are made in fiscal year 2004; and
          ``(iii) at least 50 percent of all such determinations that 
        are made in fiscal year 2005 or thereafter.
  ``(B) In carrying out subparagraph (A), the Commissioner of Social 
Security shall, to the extent feasible, select for review the 
determinations which the Commissioner of Social Security identifies as 
being the most likely to be incorrect.''.

                  TITLE VI--BROADENED WAIVER AUTHORITY

SEC. 601. PROGRAM INTEGRATION DEMONSTRATION PROJECTS.

  (a) Purpose.--The purpose of this section is to establish a program 
of demonstration projects in a State or portion of a State to integrate 
multiple public assistance, workforce development, and other programs, 
for the purpose of supporting working individuals and families, helping 
families escape welfare dependency, promoting child well-being, or 
helping build stronger families, using innovative approaches to 
strengthen service systems and provide more coordinated and effective 
service delivery.
  (b) Definitions.--In this section:
          (1) Administering secretary.--The term ``administering 
        Secretary'' means, with respect to a qualified program, the 
        head of the Federal agency responsible for administering the 
        program.
          (2) Qualified program.--The term ``qualified program'' 
        means--
                  (A) a program under part A of title IV of the Social 
                Security Act; or
                  (B) the program under title XX of such Act.
  (c) Application Requirements.--The head of a State entity or of a 
sub-State entity administering 2 or more qualified programs proposed to 
be included in a demonstration project under this section shall (or, if 
the project is proposed to include qualified programs administered by 2 
or more such entities, the heads of the administering entities (each of 
whom shall be considered an applicant for purposes of this section) 
shall jointly) submit to the administering Secretary of each such 
program an application that contains the following:
          (1) Programs included.--A statement identifying each 
        qualified program to be included in the project, and describing 
        how the purposes of each such program will be achieved by the 
        project.
          (2) Population served.--A statement identifying the 
        population to be served by the project and specifying the 
        eligibility criteria to be used.
          (3) Description and justification.--A detailed description of 
        the project, including--
                  (A) a description of how the project is expected to 
                improve or enhance achievement of the purposes of the 
                programs to be included in the project, from the 
                standpoint of quality, of cost-effectiveness, or of 
                both; and
                  (B) a description of the performance objectives for 
                the project, including any proposed modifications to 
                the performance measures and reporting requirements 
                used in the programs.
          (4) Waivers requested.--A description of the statutory and 
        regulatory requirements with respect to which a waiver is 
        requested in order to carry out the project, and a 
        justification of the need for each such waiver.
          (5) Cost neutrality.--Such information and assurances as 
        necessary to establish to the satisfaction of the administering 
        Secretary, in consultation with the Director of the Office of 
        Management and Budget, that the proposed project is reasonably 
        expected to meet the applicable cost neutrality requirements of 
        subsection (d)(4).
          (6) Evaluation and reports.--An assurance that the applicant 
        will conduct ongoing and final evaluations of the project, and 
        make interim and final reports to the administering Secretary, 
        at such times and in such manner as the administering Secretary 
        may require.
          (7) Other information and assurances.--Such other information 
        and assurances as the administering Secretary may require.
  (d) Approval of Applications.--
          (1) In general.--The administering Secretary with respect to 
        a qualified program that is identified in an application 
        submitted pursuant to subsection (c) may approve the 
        application and, except as provided in paragraph (2), waive any 
        requirement applicable to the program, to the extent consistent 
        with this section and necessary and appropriate for the conduct 
        of the demonstration project proposed in the application, if 
        the administering Secretary and the Director of the Office of 
        Management and Budget determine that the project--
                  (A) has a reasonable likelihood of achieving the 
                objectives of the programs to be included in the 
                project;
                  (B) may reasonably be expected to meet the applicable 
                cost neutrality requirements of paragraph (4), as 
                determined by the Director of the Office of Management 
                and Budget; and
                  (C) includes the integration of 2 or more qualified 
                programs.
          (2) Provisions excluded from waiver authority.--
                  (A) In general.--Except as provided in subparagraph 
                (B), a waiver shall not be granted under paragraph (1) 
                with respect to any provision of law relating to--
                          (i) civil rights or prohibition of 
                        discrimination;
                          (ii) purposes or goals of any program;
                          (iii) maintenance of effort requirements;
                          (iv) health or safety;
                          (v) labor standards under the Fair Labor 
                        Standards Act of 1938; or
                          (vi) environmental protection.
                  (B) Exception for consolidation and uniformity of 
                state administrative procedures for addressing certain 
                complaints or grievances.--Subparagraph (A) shall not 
                be construed to prevent a waiver from being granted to 
                enable an applicant that is or includes State to 
                consolidate and provide for uniform State 
                administrative procedures for addressing complaints or 
                grievances regarding public health or safety, labor 
                standards, civil rights, occupational health or safety, 
                or environmental protection.
          (3) Agreement of each administering secretary required.--
                  (A) In general.--An applicant may not conduct a 
                demonstration project under this section unless each 
                administering Secretary with respect to any program 
                proposed to be included in the project has approved the 
                application to conduct the project.
                  (B) Agreement with respect to funding and 
                implementation.--Before approving an application to 
                conduct a demonstration project under this section, an 
                administering Secretary shall have in place an 
                agreement with the applicant with respect to the 
                payment of funds and responsibilities required of the 
                administering Secretary with respect to the project.
          (4) Cost-neutrality requirement.--
                  (A) General rule.--Notwithstanding any other 
                provision of law (except subparagraph (B)), the total 
                of the amounts that may be paid by the Federal 
                Government for a fiscal year with respect to the 
                programs in the State in which an entity conducting a 
                demonstration project under this section is located 
                that are affected by the project shall not exceed the 
                estimated total amount that the Federal Government 
                would have paid for the fiscal year with respect to the 
                programs if the project had not been conducted, as 
                determined by the Director of the Office of Management 
                and Budget.
                  (B) Special rule.--If an applicant submits to the 
                Director of the Office of Management and Budget a 
                request to apply the rules of this subparagraph to the 
                programs in the State in which the applicant is located 
                that are affected by a demonstration project proposed 
                in an application submitted by the applicant pursuant 
                to this section, during such period of not more than 5 
                consecutive fiscal years in which the project is in 
                effect, and the Director determines, on the basis of 
                supporting information provided by the applicant, to 
                grant the request, then, notwithstanding any other 
                provision of law, the total of the amounts that may be 
                paid by the Federal Government for the period with 
                respect to the programs shall not exceed the estimated 
                total amount that the Federal Government would have 
                paid for the period with respect to the programs if the 
                project had not been conducted.
          (5) 90-day approval deadline.--
                  (A) In general.--If an administering Secretary 
                receives an application to conduct a demonstration 
                project under this section and does not disapprove the 
                application within 90 days after the receipt, then--
                          (i) the administering Secretary is deemed to 
                        have approved the application for such period 
                        as is requested in the application, except to 
                        the extent inconsistent with subsection (e); 
                        and
                          (ii) any waiver requested in the application 
                        which applies to a qualified program that is 
                        identified in the application and is 
                        administered by the administering Secretary is 
                        deemed to be granted, except to the extent 
                        inconsistent with paragraph (2) or (4) of this 
                        subsection.
                  (B) Deadline extended if additional information is 
                sought.--The 90-day period referred to in subparagraph 
                (A) shall not include any period that begins with the 
                date the Secretary requests the applicant to provide 
                additional information with respect to the application 
                and ends with the date the additional information is 
                provided.
  (e) Duration of Projects.--A demonstration project under this section 
may be approved for a term of not more than 5 years, and may be renewed 
for 1 or more additional terms of not more than 5 years.
  (f) Reports to Congress.--Each administering Secretary shall provide 
annually to the Congress a report concerning demonstration projects 
approved under this section, including--
          (1) the projects approved for each applicant;
          (2) the number of waivers granted under this section, and the 
        specific statutory provisions waived;
          (3) how well each project for which a waiver is granted is 
        improving or enhancing program achievement from the standpoint 
        of quality, cost-effectiveness, or both;
          (4) how well each project for which a waiver is granted is 
        meeting the performance objectives specified in subsection 
        (c)(3)(B);
          (5) how each project for which a waiver is granted is 
        conforming with the cost-neutrality requirements of subsection 
        (d)(4); and
          (6) to the extent the administering Secretary deems 
        appropriate, recommendations for modification of programs based 
        on outcomes of the projects.

                       TITLE VII--EFFECTIVE DATE

SEC. 701. EFFECTIVE DATE.

  (a) In General.--Except as otherwise provided, the amendments made by 
this Act shall take effect on October 1, 2002.
  (b) Exception.--In the case of a State plan under part A or D of 
title IV of the Social Security Act which the Secretary determines 
requires State legislation in order for the plan to meet the additional 
requirements imposed by the amendments made by this Act, the effective 
date of the amendments imposing the additional requirements shall be 3 
months after the first day of the first calendar quarter beginning 
after the close of the first regular session of the State legislature 
that begins after the date of the enactment of this Act. For purposes 
of the preceding sentence, in the case of a State that has a 2-year 
legislative session, each year of the session shall be considered to be 
a separate regular session of the State legislature.

                            I. INTRODUCTION

                          A. Purpose and Scope

    The ``Personal Responsibility, Work, and Family Promotion 
Act of 2002,'' (H.R. 4090) reauthorizes and makes improvements 
to the Temporary Assistance for Needy Families (TANF) block 
grant program created under P.L. 104-193, the ``Personal 
Responsibility and Work Opportunity Reconciliation Act of 
1996'' (the 1996 welfare reform law), among other purposes. 
TANF is the primary Federal program of cash assistance for 
needy families.
    The primary changes reflected in H.R. 4090 include: (1) 
maintaining current record Federal funding for TANF and Child 
Care and Development Block Grant (CCDBG) programs; (2) 
increasing individual and State work requirements while adding 
flexibility for States to satisfy these requirements; (3) 
increasing States' flexibility in providing child care for low-
income working families; (4) encouraging healthy marriage and 
two-parent married families by directing $300 million in 
Federal and State funds to encourage strong families and 
healthy marriages, among other provisions; (5) specifying 
reducing poverty through job preparation, work, and marriage as 
a key program purpose; (6) strengthening child support 
enforcement; and (7) reinforcing the importance of fathers in 
the lives of children and families by providing $20 million in 
new grant funding to promote responsible fatherhood, among 
other changes.

                 B. Background and Need for Legislation

    In the 1996 Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (P.L. 104-193), dramatic changes 
were made in the Federal-State welfare system designed to aid 
low-income American families. The law repealed the former Aid 
to Families with Dependent Children program, and with it the 
individual entitlement to cash welfare benefits. In its place, 
the 1996 legislation created a new Temporary Assistance for 
Needy Families (TANF) block grant. The legislation provided 
fixed funding to States to operate programs designed to achieve 
several purposes: (1) provide assistance to needy families, (2) 
end the dependence of needy parents on government benefits by 
promoting job preparation, work, and marriage, (3) prevent and 
reduce the incidence of out-of-wedlock pregnancies, and (4) 
encourage the formation and maintenance of two-parent families. 
In exchange for the broad flexibility and fixed funding granted 
States, the 1996 law imposed certain key program requirements, 
notably work requirements and time limits on Federal benefits. 
To ensure that the Committee and the Congress review the 
effects of the fundamental changes made in the 1996 law, the 
TANF program was authorized for five fiscal years, 1997 through 
2002.
    Remarkable progress has been made in combating welfare 
dependence, encouraging work, and reducing poverty since TANF 
was enacted in 1996. The number of children living in poverty 
has dropped by nearly 3 million and the African-American child 
poverty rate has fallen to a record low; welfare caseloads have 
fallen by 60 percent nationwide, as nearly 3 million families 
and 9 million recipients have left welfare; and record numbers 
of current and former welfare recipients are working. Today the 
TANF program continues to provide an important safety net to 
more than 2 million low-income families through temporary cash 
benefits, work supports, and other services.
    Yet despite outstanding results over the past few years, 
far too many individuals receiving assistance are not making 
progress toward self-sufficiency. Troubling social trends such 
as out-of-wedlock birthrates, teen pregnancy, and divorce 
remain at or near record levels, exacerbating challenges faced 
by low-income families to achieve self-sufficiency.
    To address these problems and enable the TANF program to 
help even more individuals, this legislation extends the TANF 
program for five years and makes improvements to the TANF 
program and to related programs under the Committee's 
jurisdiction.

                         C. Legislative History

    On April 18, 2002, the Committee on Ways and Means ordered 
favorably reported, with amendment, to the House H.R. 4090, the 
``Personal Responsibility, Work, and Family Promotion Act of 
2002,'' by a 23-16 vote with a quorum present.
    The Committee on Ways and Means held a hearing on March 12, 
2002 to receive comments on the President's Plan to Build on 
the Successes of Welfare Reform. Testimony at the hearing was 
presented by Tommy Thompson, Secretary of the U.S. Department 
of Health and Human Services. Secretary Thompson also testified 
before the Committee on February 6, 2002 on the President's 
2003 Budget Proposals, with a focus on welfare issues. On March 
14, 2002, the Committee also held a hearing on the 
Administration's Health and Welfare Priorities (Serial 107-2).
    The Subcommittee on Human Resources held a hearing on April 
11, 2002 to receive comments on the welfare reform 
reauthorization proposals. Testimony at the hearing was 
presented by the Administration and a total of 48 other program 
administrators, advocates, researchers, and Members of the U.S. 
House of Representatives. On April 2, 2002, the Committee 
conducted a field hearing in University Center, Michigan on 
Welfare Reform Success, which included testimony from Michigan 
Governor John Engler, a welfare program administrator, former 
welfare recipients, and an employer who has hired a number of 
former recipients to work for his company. On March 7, 2002, 
the Committee held a hearing on Implementation of Welfare 
Reform Work Requirements and Time Limits. Several hearings also 
were held earlier in the 107th Congress on welfare reform 
topics including Teen Pregnancy Prevention, Child Support and 
Fatherhood Proposals (Serial 107-38), Welfare and Marriage 
Issues (Serial 107-28), and Effects of the 1996 Welfare Reform 
Law (Serial 107-5). In the 106th Congress, the Committee held a 
number of hearings on welfare issues: April 27, 1999 on 
Fatherhood (Serial 106-41); May 27, 1999 on the Effects of 
Welfare Reform (Serial 106-9); November 15, 1999 field hearing 
in Erie, Pennsylvaniaon Welfare Reform (Serial 106-47); 
February 14, 2000 field hearing in Baltimore, Maryland on Welfare 
Reform (Serial 106-87); February 27, 2000 on the Child Protection 
Review System (Serial 106-84); March 23, 2000 on Child Protection 
Issues (Serial 106-63); and July 20, 2000 on Increasing State 
Flexibility in Use of Federal Child Protection Funds (Serial 106-98). 
Throughout the hearings, testimony was presented by Administration 
officials, academic witnesses, researchers, program administrators, and 
advocacy groups.

                     II. EXPLANATION OF PROVISIONS

                                Findings

                              Present Law

    P.L. 104-193, the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (PRWORA), made a series 
of findings related to marriage, responsible parenthood, trends 
in welfare receipt and the relationship between welfare receipt 
and nonmarital parenthood, and trends in and negative 
consequences of nonmarital and teen births.

                        Explanation of Provision

    The Committee bill includes a series of findings related 
to: (1) the success of the 1996 law in moving families from 
welfare to work and reducing child poverty, and need for 
continued efforts in these areas; (2) the progress made by the 
Nation in reducing teen pregnancy and births, in slowing 
increases in nonmarital births, and in improving child support 
collections and paternity establishment; (3) the flexibility 
provided by the 1996 law for States to develop innovative 
programs to encourage work over welfare and the formation of 
two-parent families; and (4) establishing the sense of Congress 
that increasing success in moving families from welfare to work 
and promoting healthy marriage and other means of improving 
child well-being are important government interests and the 
policies in Federal TANF law (as amended by the Committee bill) 
are intended to serve those ends.

                           Reason for Change

    The findings highlight noteworthy achievements of the 
landmark 1996 welfare reform law to be strengthened through 
various provisions of the Committee bill. The findings focus on 
the bill's provisions related to promoting work, reducing 
poverty, discouraging out-of-wedlock childbearing with a 
particular focus on teen pregnancy often associated with long 
welfare dependence, and promoting State flexibility in 
operating programs designed to promote healthy marriage among 
other means of improving child well-being.

            TITLE I. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Section 101. Purposes

                              Present Law

    The purpose of TANF is to increase State flexibility in 
operating a program designed to: (1) assist needy families so 
that children may live in their homes or those of relatives; 
(2) end dependence of needy parents on government benefits; (3) 
reduce out-of-wedlock pregnancies; and (4) encourage the 
formation and maintenance of two-parent families.

                        Explanation of Provision

    Modifies the purposes of the TANF program as follows: The 
purpose of TANF is to improve child well-being by increasing 
State flexibility in operating a program designed to: (1) 
provide assistance and services to needy families so that 
children may live in their homes or those of relatives; (2) end 
dependence of needy families on government benefits and reduce 
poverty by promoting job preparation, work and marriage; (3) 
reduce out-of-wedlock pregnancies; and (4) encourage the 
formation and maintenance of healthy, two-parent married 
families and encourage responsible fatherhood.

                           Reason for Change

    The Committee bill provides an overarching TANF program 
purpose of improving child well-being, supported by current law 
purposes of providing assistance to children, ending dependence 
on welfare benefits, reducing births outside marriage, and 
encouraging the formation and maintenance of healthy married 
families. The Committee bill also highlights that a key purpose 
of the TANF program is ending dependence on government benefits 
and reducing poverty through job preparation, work, and 
marriage. The Committee notes that the concepts of child well-
being and reducing poverty through increased work and improved 
family stability are closely intertwined. In these respects the 
1996 welfare reform law has achieved remarkable results, 
contributing to the lifting of nearly three million children 
from poverty since the law's enactment. Directing TANF programs 
and other efforts to be oriented toward further improving child 
well-being is designed in part to continue and amplify this 
record of success in removing children from poverty, among 
other purposes.
    The legislation modifies the fourth program purpose to 
clarify the goal of encouraging the formation and maintenance 
of healthy, married two-parent families. Current research 
clearly reflects that children do best across a range of 
measures when raised by two married parents, especially by 
their own biological parents: Children raised by single parents 
are five times more likely to live in poverty, five times more 
likely to depend on welfare, two to three times more likely to 
show behavioral problems, and twotimes as likely to commit 
crimes or go to jail, children raised by single parents also are more 
likely to suffer from abuse and neglect, commit suicide, take drugs, 
and drop out of school. The purposes of TANF should reflect such 
research, especially in keeping with the overall program interest in 
promoting child well-being.
    Finally, the legislation reinforces that a key TANF program 
purpose includes encouraging responsible fatherhood, which is 
essential to the healthy upbringing of children. (Section 120 
of the legislation also provides for a new ``responsible 
fatherhood'' program authorizing grants of up to $20 million 
per year for this purpose.)

Section 102. Family Assistance Grants

                              Present Law

    Provides capped grants (entitlements to States). Basic 
grants are computed from Federal expenditures for TANF's 
predecessor programs during fiscal years 1992 through 1995. 
Basic grants were frozen for fiscal years 1997 through 2002. 
Nationally, annual grants total $16.5 billion for the States 
and the District of Columbia (D.C.). Additional amounts are 
provided for the territories.

                        Explanation of Provision

    Retains basic block grants, and extends current funding 
levels for each of fiscal years 2003 through 2007. Appropriates 
$16.5 billion annually for block grants to the States and D.C. 
and additional amounts for the territories (plus some matching 
grants for the territories).

                           Reason for Change

    The Committee legislation reauthorizes the TANF block grant 
at its current level, providing States, D.C., and territories 
with a continuation of the record Federal funds made available 
in each fiscal year since 1996 despite unprecedented caseload 
declines during that period. Since 1994/95 (when national 
caseloads and Federal funds peaked, and which funding levels 
serve as the basis for the TANF block grant amount), caseloads 
have fallen by nearly 60 percent. A number of States 
individually and collectively continue to have significant 
unspent TANF balances, totaling $7.4 billion as of September 
2001, according to a March 21, 2002 report by the Center on 
Budget and Policy Priorities. States may use such unspent 
balances for additional needs in the years ahead, and other 
provisions in the Committee legislation (see Section 107, on 
use of funds) provide States significant new flexibility in the 
use of such unspent or ``carryover'' funds, including to 
provide additional child care and other work supports as 
appropriate.

Section 103. Promotion of Family Formation and Healthy Marriage

                              Present Law

    No provision for special marriage promotion grants, but law 
provides bonuses totaling $100 million per year to a maximum of 
five States each year for reduction in out-of-wedlock births.

                        Explanation of Provision

    Requires States to express in their annual State plans how 
they would operate programs to encourage equitable treatment of 
married, two-parent families. Appropriates $100 million 
annually for each of fiscal years 2003 through 2007 for 50 
percent competitive matching grants to States, territories, and 
tribal organizations for programs to promote healthy, married 
two-parent families and reduce out-of-wedlock births. Grants 
may be used for advertising campaigns; education in high 
schools; marriage education, marriage skills, and relationship 
skills programs for non-married pregnant women and expectant 
fathers; pre-marital education; marriage and relationship 
skills enhancement programs for married couples; divorce 
reduction programs; marriage mentoring programs; and programs 
to reduce marriage disincentives in means-tested programs, if 
offered in conjunction with any other listed activity. These 
grants replace current law out-of-wedlock bonus (maximum of 
$100 million annually) grants, which are repealed.
    Provides that State expenditures on non-TANF-eligible 
families to reduce out-of-wedlock births and promote marriage 
and responsible fatherhood (that is, on TANF purposes 3 and 4) 
may be counted toward required ``maintenance-of-effort'' State 
spending. In a related section, the bill further provides that 
Federal TANF funds used for marriage promotion may be treated 
as State matching funds for marriage promotion grants (See 
Section 111, Maintenance of Effort).

                           Reason for Change

    In keeping with the TANF program purpose of encouraging the 
formation and maintenance of healthy, two-parent married 
families, the Committee legislation refocuses current out-of-
wedlock birth reduction ``bonus'' funds on programs and 
activities designed to encourage the formation of healthy 
marriages and strengthen and maintain existing marriages, for 
several reasons. The awarding of current bonus funds, while in 
name designed to encourage the operation of State programs and 
efforts to reduce out-of-wedlock childbearing, has not been 
associated with specific State efforts in this area. Further, 
under current law there is no requirement that States awarded 
such funds use the money for efforts to reduce out-of-wedlock 
births or otherwise strengthen families. Thus there has been 
interest in converting this current stream of funding to 
support more specific efforts to strengthen families. Given the 
limited number of States using Federal or State TANF program 
funds for activities and programs designed to promote healthy 
marriage and strong families and in keeping with the overall 
TANF program purposes, the Committee legislation seeks to 
encourage more innovation in this area by making available 
additional funds to States interested in operating such 
programs.

Section 104. Supplemental Grant for Population Increases in Certain 
        States

                              Present Law

    Supplemental grants are provided to up to 17 States with 
low historic Federal grants per poor person and/or high 
population growth for fiscal years 1998 through 2001 (extended 
through September 30, 2002 at fiscal year 2001 funding level by 
P.L. 107-147). Grants grew each year, from $79 million in 
fiscal year 1998 to $319 million in each of fiscal years 2001 
and 2002.

                        Explanation of Provision

    Annual supplemental grants are reauthorized for each year 
through fiscal year 2006, at the fiscal year 2001/2002 level of 
$319 million per year.

                           Reason for Change

    The Committee legislation provides for the continuation of 
the current TANF supplemental grants program, with funds 
remaining at the current (fiscal year 2001 and 2002) level and 
for each currently-eligible State for each of the next four 
fiscal years, 2003 through 2006. As under the 1996 welfare 
reform law, which authorized the TANF block grant through 
fiscal year 2002 yet provided for supplemental grants through 
only fiscal year 2001, the authority for supplemental grants 
under the Committee legislation would expire one year prior to 
that of the TANF block grant. This decision does not reflect on 
the underlying merits of TANF supplemental grants, but simply 
replicates the 1996 law treatment of supplemental grants in the 
final year of the block grant authorization period. The 
Committee notes that Congress recently passed legislation (P.L. 
107-147) extending supplemental grants for fiscal year 2002, 
and that a future Congress may make a similar decision to 
extend supplemental grants for fiscal year 2007.

Section 105. Bonus to Reward Employment Achievement

                              Present Law

    A ``high performance bonus'' of $200 million per year is 
provided to States. The bonus is awarded to States that have 
achieved key TANF goals, based on a formula developed by the 
Secretary of Health and Human Services (HHS) in consultation 
with the States. For fiscal year 2002 performance, the formula 
includes employment and family formation outcomes, child care 
affordability, and coverage in certain government programs.

                        Explanation of Provision

    The high performance bonus is replaced with a bonus to 
reward employment achievement (annual average of $100 million 
appropriated for five years). The bonus is to be based on 
absolute and relative progress towards goals of job entry, job 
retention, and increased earnings. The formula for providing 
these bonus funds is to be developed by HHS in consultation 
with the National Governors Association and the American Public 
Human Services Association. Tribal organizations are allowed 
access to employment bonus funds.

                           Reason for Change

    The Committee legislation includes changes that would focus 
current high performance bonus funds more closely on State and 
Tribal success in helping welfare recipients achieve employment 
entry, job retention, and increased earnings. Performance would 
be measured both on an absolute basis and relative to prior 
performance, permitting all States and Tribal organizations to 
qualify for funds provided their performance has improved in 
these areas. This fund also highlights the Committee's interest 
in encouraging welfare reform policies that assist recipients 
not only in leaving welfare and entering employment, but also 
in staying on the job and moving up the employment ladder.

Section 106. Contingency Fund

                              Present Law

    Up to $2 billion over fiscal years 1997 through 2001 
(extended through September 30, 2002 by P.L. 107-147) is 
authorized to assist States in the event of a serious economic 
downturn. To qualify for contingency funds, States must spend 
under the TANF program a sum of their own dollars equal to 
their pre-TANF spending (i.e. satisfy a 100 percent 
``Maintenance of Effort'' [MOE] requirement).

                        Explanation of Provision

    The Committee bill reestablishes a $2 billion contingency 
fund in fiscal years 2003 through 2007 and permits States to 
count child care spending and all spending in separate State 
programs toward the MOE requirement for accessing the 
contingency fund. The bill also simplifies the annual 
reconciliation process under current law and adjusts the food 
stamp ``needy State'' trigger based on any policy changes made 
after passage of the 1996 welfare reform law.

                           Reason for Change

    In order to assist States demonstrating increased needs 
during difficult economic times, the Committee legislation 
extends and improves the current $2 billion Federal TANF 
contingency fund program created under the 1996 welfare reform 
law. This fund,whose authorization would currently expire at 
the end of fiscal year 2002, would be extended through fiscal year 
2007.
    Before permitting access to money from this fund, current 
law expects States to satisfy a 100 percent MOE requirement 
comparing recent with pre-TANF welfare-related spending. 
However, neither former nor recent child care spending is 
included in performing this calculation. Thus a provision is 
included in the Committee legislation to add State spending on 
child care--which has risen since the 1996 welfare reform law--
which increases the likelihood that States would satisfy the 
100 percent MOE requirement and access Federal contingency 
funds.
    The Committee legislation also includes several technical 
and conforming amendments simplifying the annual reconciliation 
process for ensuring that States receive the correct amount of 
contingency funds, and ensuring that Federal policy changes 
affecting food stamp eligibility made since the 1996 welfare 
reform law do not inadvertently affect States' ability to 
qualify for Federal contingency funds.

Section 107. Use of Funds

                              Present Law

    States may use funds in any manner reasonably calculated to 
accomplish the TANF purpose (or in any manner that they were 
authorized to use pre-TANF funds).
    The State plan must indicate whether the State intends to 
treat families moving into the State differently from others.
    States may transfer up to 30 percent of TANF funds to the 
Child Care and Development Block Grant (CCDBG) and the Title XX 
Social Services Block Grant (SSBG). Specifies that a maximum of 
10 percent of total transfers may go to SSBG in fiscal year 
2002, and 4.25 percent per fiscal years thereafter. Also, 
States may use TANF funds, within the overall 30 percent 
transfer limit, as matching funds for the Job Access 
transportation program for TANF recipients, ex-recipients, and 
persons at risk of becoming income-eligible for TANF.
    Amounts may be spent without fiscal year limit for 
``assistance'' (chiefly ongoing cash aid). For other benefits 
and services (i.e. ``non-assistance''), amounts must be 
obligated in the year of award and spent in the following year.

                        Explanation of Provision

    States may use funds for any purposes or activities 
reasonably calculated to accomplish the purpose of TANF (or 
permitted under pre-TANF rules).
    The Committee bill strikes a provision about treatment of 
families migrating into the State, which subsequent to the 1996 
welfare reform law was found unconstitutional by the Supreme 
Court.
    The overall ceiling on transfers from the TANF block grant 
is increased to 50 percent. The limit on TANF transfers to SSBG 
is increased to 10 percent (the original limit established in 
the 1996 law) in each of fiscal years 2003 through 2007.
    The Committee bill also allows States to use carry-over 
funds for any benefit or service without fiscal year limitation 
and permits a State or tribe to designate some unspent TANF 
funds as a contingency reserve.

                           Reason for Change

    Several provisions to increase States' flexibility in 
designing TANF programs are included in the Committee bill. The 
increase in TANF funds that may be transferred to the child 
care and Social Services Block Grants would allow States to use 
TANF funds to support more working families outside of the 
welfare system as these programs are not limited to TANF-
eligible families. Transfer authority has become increasingly 
important as States shift more resources to support working 
families using TANF funds available due to the dramatic 
caseload declines in recent years.
    Currently, regulations implementing the TANF program limit 
States to spending carryover funds only on cash assistance. 
This legislation clarifies that carryover funds may be spent on 
any of the States' TANF programs, including child care and 
other services as well as cash assistance.
    The provision to allow States to designate unspent TANF 
funds as contingency reserves is intended to improve the 
reliability of the TANF block grant in future years. In the 
past, unspent TANF balances have led to confusion over how much 
TANF funds were unneeded versus specifically set-aside for 
future needs. The Committee expects the Secretary of HHS to 
provide additional guidance to States for purposes of their 
reporting contingency reserves in a uniform manner.

Section 108. Repeal of Federal Loan for State Welfare Programs

                              Present Law

    A $1.7 billion revolving and interest-bearing Federal loan 
fund for State welfare programs is authorized.

                        Explanation of Provision

    The Committee legislation repeals loan fund and makes 
conforming amendments to reflect the repeal in related program 
provisions.

                           Reason for Change

    The loan authority is eliminated given a lack of support 
for or interest in the program from the States.

Section 109. Universal Engagement and Family Self-Sufficiency Plan 
        Requirements

                              Present Law

    State plans must require that a parent or caretaker engage 
in work (as defined by the State) after, at most, 24 months of 
assistance. However, this requirement is not enforced by a 
specific penalty.
    States, at their own option, may develop individual 
responsibility plans providing for an initial assessment of the 
skills, prior work experience, and employability of each 
recipient 18 or older or within 30 days of initial receipt of 
welfare benefits.
    TANF work participation rates are enforced by a penalty on 
States of the loss of five percent of the State's TANF block 
grant for first year of violation; the penalty may be reduced 
for the degree of violation. Increasing penalties are specified 
for subsequent years of violation. The State must replace the 
amount of Federal penalty funds lost with its own funds.

                        Explanation of Provision

    The current State plan provision expecting engagement in 
work within 24 months of initial welfare receipt is repealed 
and replaced with a provision requiring parents in families 
receiving assistance to participate in work or alternative 
self-sufficiency activities, as described below.
    The current State option to develop individual 
responsibility plans is eliminated. Instead, States are 
required to make an initial assessment, in the manner deemed 
appropriate by the States, of the employability of each 
recipient of assistance and to develop family self-sufficiency 
plans for each family with a work-eligible individual within 60 
days of opening a case (within 12 months for families enrolled 
at the time of enactment). The plans are to provide for ongoing 
participation of the individual in activities. States face a 
penalty for failure to establish self-sufficiency plans as part 
of the current penalty for failure to satisfy State work 
participation rates. These penalties may be reduced based on 
the severity of the violation, as under current law. Self-
sufficiency plans are to specify work and other activities 
designed to assist the family in achieving their maximum degree 
of self-sufficiency, among other purposes. States are to 
monitor participation in such activities and family progress, 
and revise plans as appropriate.

                           Reason for Change

    Universal engagement is a centerpiece of the Committee's 
legislation. Currently, 14 States do not require recipients to 
engage in any activities during their first 24 to 30 months of 
receiving benefits. The Committee believes this is unfair to 
beneficiaries given time limits on benefits that mean up to 
half of their available Federal benefits could expire before 
they begin preparing for self-sufficiency. Early and constant 
activity is the best path out of poverty, which is provided for 
under the self-sufficiency plan and related provisions of the 
legislation.
    In keeping with the major changes made in the 1996 law, it 
is the intent of the Committee that States continue to have 
flexibility to set conditions for receipt of benefits or 
assistance, such as mandatory substance abuse testing similar 
to that used by public or private sector employers and other 
testing or screening, either as part of an eligibility 
determination process, an individual planning process, or as a 
condition of ongoing receipt of benefits. The Committee 
recognizes that early detection of impediments such as 
substance abuse and addiction can help improve the prospects of 
employment and self-sufficiency, and better preserve families 
and protect children from abuse and neglect.
    The Committee recognizes that public assistance recipients 
required to engage in Federally mandated work and training 
activities may experience difficulty in attending meetings or 
other appointments with welfare offices which conflict with 
recipients' work/training. The Committee encourages States and 
localities to review this issue and, as appropriate, consider 
alternatives such as expanded evening and weekend hours, field 
visits, or telephonic, electronic, or other communication means 
to enhance their flexibility in scheduling such meetings and 
further aid welfare recipients in their transition from welfare 
to work.

Section 110. Work Participation Requirements

                              Present Law

    States must have a specified percentage of their adult 
recipients engaged in creditable work activities. In fiscal 
year 2002 the participation standard is 50 percent for all 
families (90 percent for the two-parent component of the 
caseload).
    Standards are reduced by a caseload reduction credit. For 
each percent decline in the caseload from the fiscal year 1995 
level (not attributable to policy changes), the work 
participation standard is reduced by one percentage point.
    Federal law lists 12 activities that count toward meeting 
the participation standards. Nine activities have priority 
status: unsubsidized jobs, subsidized private jobs, subsidized 
public jobs, work experience, on-the-job training, job search 
(6 weeks usual maximum), community service, vocational 
educational training (12 month limit), and providing child care 
for certain TANF recipients. There are three other 
creditableactivities: job skills training directly related to 
employment, and (for high-school dropouts only) education directly 
related to work and completion of secondary school.
    Participation in education (including vocational 
educational training) may account for no more than 30 percent 
of persons credited with work for purposes of satisfying the 
State work participation rate.
    Generally, to count toward the all-family rate, 
participation of 30 hours (20 hours in priority work 
activities) is required. For two-parent families the standard 
is 35 hours (30 in priority work activity), but increases to 55 
hours (50 in priority activities) if the family receives 
Federally-subsidized child care.
    For a single parent caring for a child under age 6, 20 
hours of participation satisfies the standard.
    States may exempt the parent of a child under age one from 
work and exclude them from the calculation of work 
participation rates.
    Teen parents are deemed to meet the weekly hour 
participation standard by maintaining satisfactory attendance 
in secondary school (or the equivalent in the month) or by 
participating in education directly related to employment for 
an average of 20 hours weekly.
    The monthly participation rate, expressed as a percentage, 
equals (a) the number of all recipient families in which an 
individual is engaged in work activities for the month, divided 
by (b) the number of recipient families with an adult recipient 
(but excluding families subject that month to a penalty for 
work refusal, provided they have not been penalized for more 
than three months) and excluding families with children under 
one, if the State exempts them from work. Except for teen 
parents, single parents with a child under six, and 
participants in a tribal program with different hour 
requirements, families must work an average of at least 30 
hours weekly to be counted as working.
    States are prohibited from sanctioning a single parent 
caring for a child under age 6 based on refusal to participate 
in work because of the unavailability of appropriate, suitable 
and affordable child care.

                        Explanation of Provision

    States must have a specified percentage of families 
containing adult recipients engaged in direct work or 
alternative self-sufficiency activities chosen by the State. In 
fiscal year 2003 the standard is 50 percent, and it raises by 5 
percentage points each subsequent fiscal year until reaching 70 
percent in fiscal year 2007.
    The separate standard for two-parent families is 
eliminated.
    The Committee bill updates the current credit for net 
caseload reduction (thus reducing the effective State work 
participation rate target for States with falling caseloads) by 
measuring caseload reduction from a moving base year rather 
than from fiscal year 1995. For fiscal year 2003, the credit is 
based on the percent decline in the caseload from fiscal year 
1996; for fiscal year 2004, the base is fiscal year 1998; for 
fiscal year 2005, fiscal year 2001. Thereafter, the base rises 
each year by one year (thus, the credit for fiscal year 2007 is 
based on the caseload decline from fiscal year 2003).
    To receive full credit towards the work participation rate, 
States must engage families with adult recipients in a direct 
work activity or alternative self-sufficiency activity for an 
average of 40 hours weekly-of which 24 hours must be in one of 
the ``direct work'' activities listed in the law, which 
include: unsubsidized jobs, subsidized private jobs, subsidized 
public jobs, on-the-job training, supervised work experience, 
and supervised community service. Once a family achieves 24 
hours of direct work, States may define any other activity as 
countable (up to 16 hours per week) so long as it leads to 
self-sufficiency and is consistent with the purposes of TANF.
    States may qualify for a ``superachiever'' credit if the 
State has reduced its caseloads by more than 60 percent since 
1995. The value of the credit is equal to the number of points 
above 60 percent in caseload reduction that occurred between 
1995 and 2001. The superachiever credit may reduce a State's 
work participation rate only to 50 percent, although any future 
caseload declines captured by the updated credit for net 
caseload reduction also may be applied after calculating the 
superachiever credit to further reduce the effective work 
participation rate the State must achieve.
    For any three months within a 24 month period, persons may 
be deemed to meet the 24-hour weekly direct work requirement by 
engaging in short-term activities chosen by the State to 
promote self-sufficiency (examples listed in the bill are 
substance abuse counseling or treatment, rehabilitation 
treatment and services, work-related education or training 
directly at enabling the family member for work, and job search 
or job readiness assistance).
    States may exclude from the calculation of work 
participation rates families in which the youngest child is 
under age 1. They also may exclude from work participation 
rates all families during their first month of assistance and 
families in a tribal program.
    Teen parents are deemed to satisfy the 40-hour weekly work 
rule by virtue of satisfactory school attendance (or the 
equivalent in the month) or by participating in education 
directly related to employment for an average of 20 hours 
weekly.
    As under current law, certain sanctioned families are 
excluded from counted families used to determine participation 
rates. In addition, as noted above, States have the option to 
exclude families in the first month of assistance, tribal 
families, and single parents with an infant. The monthly 
participation rate is (a) the total number of countable hours, 
divided by (b) 160 times the number of counted families for the 
month. This means that a State would receive full credit for a 
family participating in work and otheractivities for 40 hours 
per week for four weeks per month, or on an annual basis, for 48 weeks 
per year.
    In general, States must reduce the amount of assistance 
payable to the family pro-rata or terminate assistance if the 
individual refuses, without good cause, to engage in work or in 
activities under a family sufficiency plan. If the individual 
refuses to engage in work or otherwise participate in 
activities expected in accordance with their self-sufficiency 
plan for at least two consecutive months, the State must end 
all cash payments to the family for at least one month and 
until the individual complies with work and related self-
sufficiency activities. State constitutional requirements to 
provide assistance to needy parents and children supercede this 
provision.

                           Reason for Change

    As has been noted above, the Committee believes that too 
many recipients remain on welfare without engaging in 
activities to prepare them for work. The legislation provides 
increases in the work requirements expected of States with 
important areas of increased flexibility in activities that may 
be counted towards satisfying those requirements. Overall, 
States are required, when fully phased in, to have an average 
of 70 percent of adult recipients in 40 hours of activities, 
including 24 hours of direct work and 16 hours of other 
activities, for 48 weeks each year.
    There are many ways that vocational education and training 
may be combined under H.R. 4090 in ways that will greatly 
improve individual's long-term prospects for self-sufficiency. 
Following are specific examples of allowable combinations of 
work and training.
    Example No. 1. A participant is taking classes to become a 
certified nurse assistant. She goes to class four hours each 
morning from Monday through Thursday. Each afternoon, she works 
four hours in a practicum assignment, practicing the skills she 
is learning in class. On Friday, she has a part-time job for 
eight hours. The practicum hours and the part-time job would 
count towards the direct work requirement (total 24 hours). The 
16 hours of class would count towards the overall participation 
requirement for a total of 40 hours of participation. Because 
the participant is meeting her direct work requirement, there 
would be no limit on how long she could continue this 
arrangement (other than the overall 5-year lifetime limit on 
receipt of Federal benefits). She could continue for whatever 
time it took to complete her certificate.
    Example No. 2. A new participant is currently enrolled in a 
vocational education program that will take 12 to 18 months to 
complete. Her self-sufficiency plans calls for her to complete 
the current semester (about 4 months). Thereafter, she plans to 
work 3 days a week and continue her vocational training on the 
other two days. The educational activity can substitute for the 
direct work requirement for up to four months. Thereafter, the 
part-time work will count towards the direct work requirement 
and the vocational education will count towards the additional 
hours, for a total of 40. Subject to the overall 5-year limit 
on receipt of Federal benefits, she can continue in this 
arrangement until she completes her vocational education 
program.
    Example No. 3. A recipient with low basic educational 
skills who is having difficulty obtaining employment 
participates in a comprehensive work experience and skills 
building program. The recipient participates in a full-time, 40 
hours per week program that includes actual work activities 
(perhaps in an industrial or even an office setting) 
familiarizing the client with a job setting and job-specific 
skills, and integrates that experience with basic educational 
skills training, all at the same site. The work activities and 
trainings might be blended to enhance the client's experience, 
but about five hours of each day would involve work activities.
    Under the Committee bill, States are provided partial 
credit toward their work participation rate requirement for 
individuals who perform as few as 24 hours per week of work, 
and receive full credit for families who perform 40 or more 
hours per week of work and other activities designed to promote 
self-sufficiency. The legislation would eliminate the separate 
and higher State work participation rate requirement that 
currently applies to two-parent families, making them subject 
to the same rate and hours of work rules as single-parent 
families receiving assistance, enhancing the chances that these 
or other families might be able to participate in ``extra'' 
hours that could balance families whose maximum hours of work 
and other activities might fall short of 40 hours per week 
standard.
    The Secretary is expected to issue regulations that specify 
how the 24-hour direct work requirement may be applied in 
certain low-benefit States. The Committee is aware that certain 
States may face special challenges in meeting the 24-hour 
direct work requirement in cases where unsubsidized or 
subsidized private sector employment is limited and the State 
may only enroll individuals in a certain number of hours of 
work experience or community service activities due to minimum 
wage constraints. The Committee notes that modifying 
regulations, which currently limit the value of government 
benefits to only cash welfare and food stamps, to include 
additional benefits families receive also would facilitate 
participation in additional work experience or community 
service.
    Under the Committee bill, States have the flexibility to 
make accommodations in the work requirements for individuals 
with special circumstances, for example, caring for a disabled 
child. The maximum work requirement a State must meet, assuming 
the State receives no credit for future caseload declines, 
would be 70 percent in fiscal year 2007. Even at this high work 
rate, the State can exempt up to 30 percent of its caseload 
from the work requirement. Further, many States have created 
separate State programs to avoid penalties for failure to meet 
the higher work requirements for 2-parent families. Under the 
Committee bill, these separate 2-parent work requirements are 
eliminated, allowing States to use these State funds for 
assistance to parents caring for disabled relatives, subject to 
separate State work requirements.
    The legislation would update the current credit for net 
caseload reduction. As under current law, this credit reduces 
the State work participation rate requirement by the percentage 
decline, if any, in the State's welfare caseload relative to a 
prior year. Under the legislation, States would continue to be 
given credit for caseload declines, but the baseline year for 
determining the percentage decline and thus the credit would be 
recalibrated as follows: in fiscal year 2002, States would be 
given credit for the percentage of caseload decline between 
fiscal years 1995 and 2001 (current law); in 2003, States would 
be credited for declines between 1996 and 2002; in 2004, 
between 1998 and 2003; in 2005, between 2001 and 2004; in 2006, 
between 2002 and 2005; and in 2007, between 2003 and 2006. Thus 
if the State's welfare caseload declined by 30 percent between 
fiscal years 2003 and 2006, its real work participation rate 
requirement for the remaining caseload in fiscal year 2007 
would be 40 percent, given the updated credit for net caseload 
reduction.
    In addition to the credit for net caseload reduction, 17 
States that achieved caseload declines of more than 60 percent 
between fiscal years 1995 and 2001 will receive an additional 
superachiever credit. Given their large past caseload declines, 
these States will receive a percentage reduction in future work 
requirements based on the percentage decline above 60 percent 
(Colorado is eligible for a maximum 12% credit against future 
rates, FL 15%, GA 4%, ID 20%, IL 14%, LA 9%, MD 5%, MI 4%, MS 
10%, NJ 2%, NC 6%, OH 3%, OK 9%, SC 5%, WV 2%, WI 16%, and WY 
20%). The credit takes into consideration the difficulty these 
States might have in further reducing caseloads, which would 
otherwise reduce the rising work rate requirements. The 
superachiever credit in any year may not reduce the target work 
participation rate to less than 50 percent in any future year. 
For a number of superachiever States, this will maintain the 
effective work rate requirement at the current 50 percent level 
for several or all of the next five fiscal years. All States, 
including those receiving superachiever credits, may receive 
additional credits under the recalibrated net caseload 
reduction credit provision also included in the legislation and 
described above.
    To illustrate how the superachiever credit works, consider 
the State of Wisconsin. Wisconsin experienced a 76 percent 
caseload decline in the 1995-2001 period, earning a 
superachiever credit of 16 percent (76 percent decline minus 60 
percent threshold equals 16 percent credit). As State work 
rates rise under the legislation from 50 percent in fiscal year 
2003 to 55 percent in 2004, 60 percent in 2005, and 65 percent 
in 2006, this credit would maintain Wisconsin's work rate 
requirement at the current 50 percent level. In fiscal year 
2007 when the rate rises to 70 percent, Wisconsin's effective 
work rate requirement would be 54 percent (70 percent work rate 
minus 16 percent credit equals 54 percent effective work rate).
    In order to stress the importance of work, the legislation 
would specify certain conditions under which States must 
provide for a ``full check sanction'' if a parent refuses to 
participate in work and other activities as required by the 
State and as expressed in the self-sufficiency plan to which 
the parent has agreed, but adds that this condition does not 
apply in a State with a Constitutional requirement to provide 
benefits.

Section 111. Maintenance of Effort

                              Present Law

    Establishes a maintenance-of-effort (MOE) requirement that 
States spend at least 75 percent of what was spent from State 
funding in fiscal year1994 on programs replaced by TANF. 
Nationally, this 75 percent level equals $10.4 billion. MOE 
rises to 80 percent if State fails a work participation 
standard.

                        Explanation of Provision

    Continues existing MOE requirement through fiscal year 
2007. Provides that Federal TANF funds used for marriage 
promotion may be treated as State matching funds for marriage 
promotion grants, but that any such funds so used may not be 
counted towards State MOE requirements.

                           Reason for Change

    The Committee legislation includes a conforming change 
related to State spending on activities to prevent out-of-
wedlock childbearing and promote healthy marriages. Regulations 
have interpreted that State MOE funds may only be spent for 
such purposes on TANF-eligible families, even though Federal 
TANF funds may be spent on a broader range of families. 
Activities aimed at preventing dependence that cannot 
reasonably be limited to low-income families since they 
frequently consist of public awareness campaigns or education 
programs broadly available in the community. This provision 
makes clear that States may use State and Federal TANF funds 
for these purposes for both needy families and others, 
including those who might become eligible in the absence of 
such interventions.

Section 112. Performance Improvement

                              Present Law

    Each State must outline, in a 27-month plan, how it intends 
to: conduct a program providing cash assistance to needy 
families with children and providing parents with work and 
support services, require caretaker recipients to engage in 
work (at State definition) after 24 months of aid or sooner, if 
judged work-ready, ensure that caretakers engage in work in 
accordance with the law, take steps deemed necessary by the 
State to restrict use and disclosure of information about 
recipients, establish goals and take action to prevent/reduce 
the incidence of out-of-wedlock pregnancies, and conduct a 
program providing education and training on the problem of 
statutory rape. In addition, the plan must indicate whether the 
State intends to treat families moving into the State 
differently from others, indicate whether the State intends to 
aid noncitizens, set forth objective criteria for benefit 
delivery and for fair and equitable treatment, and provide 
that, unlessthe governor opts out by notice to HHS, the State 
would require a parent who has received TANF for two months and is not 
work-exempt to participate in community service employment. In the plan 
the State must certify that it will operate a child support enforcement 
program and a foster care and adoption assistance program and provide 
equitable access to Indians ineligible for aid under a tribal plan. It 
must certify that it has established standards against program fraud 
and abuse. It must specify which State agency or agencies would 
administer and supervise TANF. Further, the State may opt to certify 
that it has established and is enforcing procedures to screen and 
identify recipients with a history of domestic violence, to refer them 
to services, and to waive program rules when appropriate.
    The law also authorizes States to administer and provide 
TANF services through contracts with charitable, religious, or 
private organizations and to pay recipients by means of 
certificates, vouchers, or other disbursement forms redeemable 
with these organizations. This provision stipulates that any 
religious organization with a contract to provide welfare 
services shall retain independence from government and requires 
States to provide an alternative provider for a beneficiary who 
objects to the religious character of the designated 
organization.
    Finally, the law directs the Secretary of HHS to rank 
States in order of success in moving recipients into long-term 
private jobs and reducing the proportion of out-of-wedlock 
births. In both cases, the Secretary is directed to review 
programs in the three States with the highest and lowest 
ratings.

                        Explanation of Provision

    The legislation adds a requirement that each State outline 
how it would encourage equitable treatment of married, two-
parent families and describe any strategies the State is 
undertaking to deal with: (1) employment retention and 
advancement for recipients; (2) efforts to reduce teen 
pregnancy; (3) services for struggling and noncompliant 
families and for clients with special problems; and (4) program 
integration, including the extent to which employment and 
training services are provided through the One-Stop Career 
Center System created under the Workforce Investment Act of 
1998.
    The legislation strikes a provision requiring community 
service after two months of benefits.
    The legislation strikes a provision requiring goals to 
reduce out-of-wedlock pregnancies and replaces it with a 
requirement that States establish specific numerical 
performance goals, measures, measurement methodology, and plans 
to improve outcomes regarding each of TANF's four goals.
    States are required to describe in their State plans what 
strategies the State has in place to engage faith-based 
organizations in the provision of services funded by TANF, as 
well as strategies to improve program management and 
performance.
    A provision is included to assure that Tribes and States 
have consulted each other regarding TANF program planning.
    The legislation requires the Secretary of HHS, in 
consultation with the National Governors Association, the 
National Conference of State Legislatures, and the American 
Public Human Services Association, to develop uniform 
performance measures to judge the effectiveness and improvement 
of State programs in accomplishing TANF purposes. Finally, the 
legislation deletes a ``long-term'' qualifier measure used in 
ranking State performance and adds an employment retention and 
advancement ranking factor.

                           Reason for Change

    The Committee bill removes certain State plan requirements 
in current law that do not conform to proposed changes in the 
TANF program. The bill also adds certain State plan 
requirements that reflect the legislation's increased focus on 
engaging more recipients in work and other self-sufficiency 
activities, and the proposal's focus on promoting healthy 
marriages and preventing out-of-wedlock births. Finally, the 
new plan requirements reflect growing interest among program 
administrators in helping recipients move from employment to 
better jobs leading finally to long-term self-sufficiency by 
requiring States to report on what strategies they are 
employing to address this issue.
    The legislation eliminates a State plan requirement related 
to differential treatment of beneficiaries based on previous 
State residency. This revision is in response to a 1999 Supreme 
Court Case (Saenz v. Roe) that held such differential treatment 
was unconstitutional.
    The uniform performance improvement measures are intended 
to help States quickly identify program weaknesses so they may 
correct them in a timely manner and to facilitate States' 
sharing of best practices.
    The Committee bill requires eligible States to submit 
documents to the Secretary describing their strategies for 
engaging faith-based organizations in the provision of services 
funded under the provisions in Section 104 of the 1996 welfare 
reform law. The principles set out in Section 104 allow for the 
funding of faith-based organizations on the same basis as other 
nongovernmental organizations; permit them to maintain their 
religious character by choosing board members, symbols, and 
staff in accord with their faith; and protect beneficiaries 
from discrimination while safeguarding their rights of 
conscience by ensuring that alternative providers that are 
unobjectionable to them on religious grounds are made 
available. While Section 104's provisions save from Federal 
preemption a State constitution or statute that expressly 
singles out religious organizations as subject to limits on 
State funding, they do not save local laws or general laws that 
merely have a disparate impact on some religious organizations.
    The provisions in Section 104 also prohibit the use of 
Federal funds for sectarian worship, instruction, or 
proselytization when religious organizations receive such funds 
directly. Accordingly, when a faith-based organization's 
program receives direct funding,such as through grants or 
contracts, beneficiaries also have the right to opt out of such 
program's sectarian components, offered separate from the funded 
program, because under the provisions of Section 104 these 
beneficiaries may refuse to actively participate in a religious 
practice. However, when the method of funding a program is indirect, 
the Establishment Clause, under Supreme Court precedent, allows faith-
based organizations to offer an integrated social service program. The 
Supreme Court has described indirect funding as a funding method by 
which the ``genuinely independent and private choice'' of the 
beneficiary determines ultimately whether the assistance is directed to 
a secular or religious provider. Witters v. Washington Department 
Services for the Blind, 474 U.S. 481, 487 (1986).

Section 113. Data Collection and Reporting

                              Present Law

    States are required to collect monthly, and report 
quarterly, disaggregated case record information about 
recipient families (but may use sample case record information 
for this purpose). Required family information includes county 
of residence, whether a member received disability benefits, 
ages of members, size of family and the relation of each member 
to the family head, employment status and earnings of the 
employed adult, marital status of adults, race and educational 
level of each adult, and race and educational level of each 
child, and whether the family received subsidized housing, 
Medicaid, food stamps, or subsidized child care (and if the 
latter two, the amount). In addition, required information 
includes number of months that the family received each type of 
aid under the program, number of hours per week, if any, that 
adults participated in specified activities (education, 
subsidized private jobs, unsubsidized jobs, public sector jobs, 
work experience, community service, job search, job skills 
training or on-the-job training, vocational education), 
information needed to calculate participation rates, and type 
and amount of assistance received under the program, including 
the amount of and reason for any reduction of assistance. 
Further information required is unearned income, citizenship of 
family members, number of families and persons receiving aid 
under TANF (including the number of two-parent and one-parent 
families), total dollar value of assistance given, total number 
of families and persons aided by welfare-to-work grants (and 
the number whose participation ended during a month), number of 
noncustodial parents who participated in work activities, and 
for each teenager, whether he/she is the parent of a child in 
the family. From a sample of closed cases, the quarterly report 
is to give the number of case closures because of employment, 
marriage, time limit, sanction, or State policy.

                        Explanation of Provision

    The legislation permits the Secretary of HHS to limit the 
use of sampling by designating core elements that must be 
reported for all families and adds race and educational level 
of each minor parent to the core reporting elements. States are 
no longer required to report on the education level of each 
child. Under the Committee legislation, States would be 
required to report on ``each type'' of aid a family receives 
and the reason for extending aid beyond 60 months when 
applicable.
    The legislation also would require States to report on 
whether adults receiving assistance participated in training or 
other activities directed at TANF purposes, but not 
specifically listed under current law. States now reporting on 
participants engaged in job search also would have to report on 
those participating in job placement activities. States no 
longer would have to report on participants involved in job 
skills training. The legislation adds that work experience and 
community service activities are ``supervised.''
    States would be required to report additional information 
related to progress toward universal engagement, as well as 
participation rates, and in the quarterly reports States must 
identify whether self-sufficiency plans have been established 
for all families receiving assistance, and the date the family 
first received assistance. The quarterly reports also must 
provide information on the marital status of the parents or 
guardians of any child in the family and whether the parents or 
guardians are living.
    States would no longer be required to report on the type of 
assistance a family receives. However, States would be required 
to report on the number of families and persons who become 
ineligible to receive TANF during a month (broken down by the 
number that lose eligibility because of earnings, changes in 
family composition that result in higher earnings, sanctions, 
time limits, or other specified reasons).
    The legislation proposes that regulations defining 
additional data elements be developed by the Secretary of HHS 
in consultation with the National Governors Association, 
American Public Human Services Association, and National 
Conference of State Legislatures.
    Beginning in fiscal year 2005, States would be required to 
submit annual reports to the Secretary of HHS on the 
characteristics of all TANF programs funded with qualified 
State expenditures (that is, which are countable toward State 
maintenance of effort requirements), including the program's 
eligibility, program name, description of activities and 
program purposes, the number of beneficiaries, and any sanction 
policies or work requirements imposed.
    Other new reporting requirements under the proposal include 
an annual report on performance improvement based on measures 
developed by the State in its State plan, and a requirement 
that States provide the Secretary of HHS with monthly caseload 
data no more than three months after each current month. 
Finally, the Secretary of HHS must provide an annual report to 
Congress by July 1 of each subsequent fiscal year, which is to 
include information provided by the States in their annual 
reports to the Secretary on program characteristics.

                           Reason for Change

    Since the 1996 welfare reform law was enacted, data 
reported to the Secretary has been critical in evaluating the 
impacts of various State and local programs. The legislation 
conforms data reporting elements with the proposal's increased 
emphasis on work among current recipients. Based on the 
information provided to the Congress in the Secretary's Annual 
Report, there appear to be several areas on which additional 
information is needed to improve Congressional oversight of the 
program. For example, Congress does not have complete 
information on what State programs are funded with TANF 
dollars, and whether and what benefits are provided to families 
beyond the 60 month time limit. Another area in which 
additional information is needed relates to the changing nature 
of TANF programs in the direction of providing improved 
supports. While it is unreasonable to expect States to provide 
information on individuals receiving work supports, additional 
information on the types of supports provided to those 
receiving cash benefits and aggregate data on those receiving 
work supports in lieu of cash benefits would provide a better 
picture of State welfare programs.
    Finally, the legislation's requirement that States provide 
information on all activities performed by adults on assistance 
and their fulfillment of self-sufficiency plan requirements 
would provide a clearer picture of the work and other 
activities in which recipients are engaged. Current data 
reflects that as of fiscal year 2000, a full 58 percent of work 
eligible adults were participating in no hours of work or other 
activities, making this an area in which the Congress is 
interested in receiving additional data in accordance with the 
strengthened work requirements provided under the Committee 
legislation.

Section 114. Direct Funding and Administration by Indian Tribes

                              Present Law

    In cases in which an Indian tribe applies to administer a 
Tribal family assistance program, the State's TANF block grant 
is reduced by an amount equal to the Federal pre-TANF payments 
to the State attributable to Indians. A separate appropriation 
of $7.6 million annually is provided for work and training 
activities (now known as Native Employment Works [NEW]) to 
tribes that operated a pre-TANF work and training program.

                        Explanation of Provision

    Continues Indian tribal assistance grants and NEW work/
training grants through fiscal year 2007.

                           Reason for Change

    Makes conforming amendment.

Section 115. Research, Evaluations, and National Studies

                              Present Law

    The law authorizes the Secretary to conduct a series of 
research studies, demonstration projects, and evaluations and 
appropriates $15 million annually for such activities.

                        Explanation of Provision

    The legislation extends the annual appropriation for 
research of $15 million for each of fiscal years 2003 through 
2007. Additionally, the Secretary is provided with an 
additional $102 million fund for research and demonstration 
projects and for technical assistance to States, tribal 
organizations, and other entities chosen by the Secretary for 
each fiscal year through 2007. These additional funds shall be 
spent primarily on activities described under the marriage 
promotion grants as provided in section 103 above. Of this $102 
million fund, $2 million per year shall be used for 
demonstration projects conducted by the Secretary of HHS to 
allow eligible Indian tribes to coordinate child welfare and 
TANF services and assistance.
    Finally, the Secretary, in consultation with the Attorney 
General, is required to report to Congress on the enforcement 
of affidavits of support and sponsor deeming as required under 
relevant provisions of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996.

                           Reason for Change

    Research, demonstrations, and technical assistance are a 
critical feature of the TANF program. Given the flexible nature 
of the block grant program, States have broad latitude to 
develop innovative programs that may be replicated by other 
States. The new $100 million fund authorized by the Committee 
bill would help answer important questions about what types of 
interventions may prevent divorce, increase and strengthen 
healthy marriages, and prevent and reduce the incidence of out-
of-wedlock births. As scarce resources have been devoted to 
these important purposes of the TANF program, this new fund 
would play a critical role in developing and promoting best 
practices across the country. In addition, this new fund will 
provide much needed funding for technical assistance to tribal 
organizations as they work to create and develop TANF programs 
to meet the unique needs of their members.
    The new demonstration authority for Indian tribes is 
intended to support tribes that receive funds under the Title 
IV-B Child Welfare Services or Promoting Safe and Stable 
Families programs but do not have access to the Title IV-E 
Adoption and Foster Care program. Parents seeking temporary 
assistance through the TANF program and those caring for 
children who have been subject to abuse and neglect or at-risk 
of such maltreatment often face similar and complex service 
needs. The demonstration authority will help tribes improve 
coordination between these two programs; strengthen families 
byproviding assistance and services necessary to prevent family 
disruption; and, when necessary, support out-of-home placements to 
safely care for children.
    The Committee seeks information from HHS and the U.S. 
Department of Justice to verify that affidavit of support and 
sponsor deeming provisions are being implemented as the 1996 
law intended. The Committee is concerned that the appropriate 
procedures and guidance to State and local governments have not 
been put in place in order to ensure these provisions are 
implemented.
    The Committee finds that Goodwill Industries is one of many 
examples of organizations that have contributed significantly 
to the success of welfare reform across the country, and that 
State and local governments may consider expanding or 
establishing future partnerships with such outstanding 
community groups when developing strategies to support 
individuals with special challenges in making the transition to 
work.

Section 116. Study by the Census Bureau

                              Present Law

    The Census Bureau is directed to expand the Survey of 
Income and Program Participation (SIPP) to obtain data with 
which to evaluate TANF's impact on a random national sample of 
recipients. Appropriations are authorized at $10 million 
annually for seven fiscal years.

                        Explanation of Provision

    The legislation directs the Census Bureau to expand the 
Survey of Income and Program Participation (SIPP) to obtain 
data with which to evaluate TANF's impact on the economic and 
child well-being of low-income families with children. The 
legislation directs that the survey include information 
necessary to examine issues of out-of-wedlock childbearing, 
marriage, welfare dependency, the beginning and ending of 
spells of assistance, work, earnings and employment stability, 
and the well-being of children. Appropriations are authorized 
at $10 million annually for fiscal years 2003 through 2007.

                           Reason for Change

    The SIPP has been used widely by public and private 
researchers to assess impacts of the TANF program. This 
provision reauthorizes and refocuses future data collection 
efforts on areas of particular interest to the Committee, 
including out-of-wedlock childbearing, length of stay on 
welfare, earnings and employment stability, and child well-
being.

Section 117. Definitions of Assistance

                              Present Law

    Receipt of assistance by a parent or other caretaker 
relative triggers work and time limit rules. Current law does 
not define the term ``assistance,'' however. By regulation, 
assistance is defined as ongoing aid to meet basic needs, plus 
support services such as child care and transportation 
subsidies, for unemployed recipients. It excludes non-recurring 
short-term benefits.

                        Explanation of Provision

    The legislation specifically defines ``assistance'' to mean 
payment, by cash, voucher, or other means, to or for an 
individual or family to meet a subsistence need, but not 
including costs of transportation or child care. It excludes 
non-recurring short-term benefits.

                           Reason for Change

    This provision codifies regulations important in 
determining how long individuals may receive cash benefits and 
when work requirements and penalties should be imposed. 
Clarifying that child care and transportation subsidies should 
never be considered assistance would provide States additional 
flexibility in supporting individuals who have left welfare and 
prevent welfare dependence for others.

Section 118. Technical Corrections

                              Present Law

    Not applicable.

                        Explanation of Provision

    Makes a number of technical corrections in keeping with 
various legislative changes.

                           Reason for Change

    Technical corrections.

Section 119. Fatherhood Program

    Section 120 of the Committee legislation amends Title I of 
the Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996 (Public Law 104-193)to add a new Fatherhood program 
to the Social Security Act as a new Part C of Title IV, as follows:

                       Part C--Fatherhood Program

Section 441 of Part C--Findings

                              Present Law

    No provision.

                        Explanation of Provision

    Details evidence of the need to promote and support 
involved, committed, and responsible fatherhood, and to 
encourage and support healthy marriages between parents raising 
children.

                           Reason for Change

    The Committee is very interested in finding ways to reverse 
the negative impacts of single-parent families on both adults 
and children. One solution is to increase, in appropriate 
situations, the incidence of marriage. Whether or not marriage 
occurs, a second approach is to promote the involvement of 
single fathers in the lives of their children. Even when 
fathers do not live with their children, they still have a 
responsibility to participate in the child's rearing and to 
work with the mother to provide a solid foundation for the 
child's development. Economic support is another important part 
of the father's role in the family. Since many poor fathers 
have a weak and sporadic connection to the workforce, 
fatherhood projects would work to increase the number of 
employed fathers and improve the work skills of employed 
fathers to help them increase their income and be better able 
to provide economic support, including child support, to the 
family. The purposes selected by the Committee would help 
define projects that would contribute to addressing the 
problems associated with single-parent families.

Section 441 of Part C--Purposes

                              Present Law

    No provision.

                        Explanation of Provision

    The first of the three purposes is to provide for projects 
and activities by public entities and nonprofit community 
entities, including religious organizations, to test promising 
approaches to accomplishing the following four objectives: (1) 
promoting responsible, caring, and effective parenting and 
encouraging positive father involvement, including the positive 
involvement of non-resident fathers; (2) enhancing the 
abilities and commitment of unemployed or low-income fathers to 
provide support for their families and to avoid or leave 
welfare; (3) improving fathers' ability to effectively manage 
family business affairs; and (4) encouraging and supporting 
healthy marriages and married fatherhood.
    The second purpose is to improve outcomes for children such 
as increased family income and economic security, improved 
school performance, better health, improved emotional and 
behavioral stability and social adjustment, and reduced risk of 
delinquency, crime, substance abuse, child abuse and neglect, 
teen sexual activity, and teen suicide.
    The third purpose is to evaluate approaches and disseminate 
findings to encourage replication of effective approaches to 
achieving the desired outcomes for both parents and children.

                           Reason for Change

    Children reared in female-headed families are more likely 
to live in poverty, fail in school, be arrested, have children 
outside marriage, and go on welfare themselves. To help address 
these problems, the Committee legislation would implement a 
fatherhood grant program to provide funding for projects to 
work directly with fathers, especially those in poverty. The 
fatherhood projects would emphasize healthy marriage, 
parenting, and employment and may be able to have an impact on 
both the number of children being reared in single-parent 
families and, where marriage is not a possibility, to 
strengthen the relationship between single fathers and their 
children. Most Federal and State social programs, including 
welfare, are aimed primarily at helping single mothers. The 
fatherhood grant program acknowledges that Congress is 
interested in helping fathers improve their financial 
independence, manage their financial affairs, and strengthen 
their ability to support a family.

Section 442 of Part C--Definitions

                              Present Law

    No provision.

                        Explanation of Provision

    Declares the terms ``Indian tribe'' and ``tribal 
organization'' to have the meanings given them in subsections 
(e) and (l), respectively, of Section 4 of the Indian Self-
Determination and Education Assistance Act.

                           Reason for Change

    Clarifies the definition of ``Indian tribe'' and ``tribal 
organization'' as they relate to the fatherhood grant program.

Section 443 of Part C--Competitive Grants for Service Projects

                              Present Law

    No provision.

                        Explanation of Provision

    The Secretary of HHS is authorized to make grants for 
fiscal year 2003 through fiscal year 2007 to public and 
nonprofit community entities, including religious 
organizations, and to Indian tribes and tribal organizations, 
for demonstration service projects and activities designed to 
test the effectiveness of various approaches to accomplish four 
objectives.
    Full service grant projects require an applying entity to 
submit an application to the Secretary. The application must 
contain: (1) a description of the project and how it will be 
carried out; (2) information about the applicant's ability to 
carry out the project, and such other qualifications as the 
Secretary may require; (3) a description of how the applicant 
will address child abuse and domestic violence, including how 
the applicant will coordinate with State and local child 
protective service and domestic violence programs; (4) a 
commitment to make available to each individual participating 
in the project education about alcohol, tobacco, and other 
drugs, and about the health risks associated with abusing such 
substances, and information about diseases and conditions 
transmitted through substance abuse and sexual contact, 
including HIV/AIDS, and to coordinate with providers of 
services addressing such problems, as appropriate; and (5) a 
description of how the project would coordinate, as 
appropriate, with State and local entities responsible for 
Welfare-to-Work, Child Support Enforcement, and Child Welfare 
Service programs under Title IV of the Social Security Act, 
programs under Title I of the Workforce Investment Act of 1998 
(including the One-Stop delivery system), and such other 
programs as the Secretary may require. In addition, the 
application would include an agreement to maintain records, 
make reports, and cooperate with reviews or audits as required 
by the Secretary and an agreement to cooperate with the 
Secretary's evaluation of the project.
    An application for a limited purpose grant of less than 
$25,000 per fiscal year must contain similar but more limited 
information and descriptions than those required for full 
service grants as provided above.
    In awarding grants, the Secretary must seek to achieve a 
balance among entities of differing sizes, entities in 
differing geographic areas, entities in urban and in rural 
areas, and entities employing differing methods of achieving 
the four specified objectives. Also, the Secretary may give 
preference to projects in which a majority of the clients to be 
served are low-income fathers.
    Federal grant funds may be used for up to 80 percent of the 
annual costs of full-service projects (or up to 90 percent if 
the entity demonstrates circumstances limiting the entity's 
ability to secure non-Federal resources), and for up to 100 
percent of annual costs for limited-purpose projects. The non-
Federal share may be in cash or in kind.

                           Reason for Change

    Funding both full service grant and limited purpose grant 
projects would enable the Secretary to collect valuable 
information about the effectiveness of using different 
approaches to meet the goals of the fatherhood grant program. 
During Committee hearings on fatherhood issues in the 106th and 
107th Congress, Members expressed interest in a variety of 
fatherhood programs--from those addressing the needs of inner 
city populations to those run by a rural faith-based group 
working to address specific problems in a small community. Of 
particular interest are programs that help young low-income 
fathers meet their child support obligations, both current and 
past due. One approach, that has been used on a limited basis 
in Maryland, Iowa, and Montana, is to consider compromising 
arrearages owed to the State when the non-custodial parent has 
kept current on a child support payment plan for a specific 
period of time or has enrolled and completed a responsible 
fatherhood project where they go to work and complete certain 
activities.

Section 444 of Part C--Multicity, Multistate Demonstration Projects

                              Present Law

    No provision.

                        Explanation of Provision

    The Secretary will award grants for fiscal year 2003 
through fiscal year 2007 for two multi-city, multi-State 
fatherhood projects demonstrating approaches to achieving the 
four specified objectives. One of the projects is required to 
test the use of married couples to deliver program services. 
The legislation specifies conditions for an entity eligible for 
such grants.
    Federal grant funds for multi-city, multi-State 
demonstration projects may be used for up to 80 percent of the 
annual costs of the demonstration projects. The non-Federal 
share may be in cash or in kind.

                           Reason for Change

    It is important that some experienced fatherhood 
organizations develop grant projects in major cities. The 
Committee is aware of a number of these organizations that have 
sponsored fatherhood programs in inner-city areas, have 
experience working with State and local agencies, and have the 
capacity to design projects that would improve outcomes for 
fathers. The Committee expects the selected projects to provide 
project information with the Secretary that can be shared with 
other programs.

Section 445 of Part C--Evaluation

                              Present Law

    No provision.

                        Explanation of Provision

    The Secretary would evaluate the effectiveness of the 
selected competitive grants for service projects and selected 
multi-city, multi-State demonstration projects from the 
standpoint of the four specified objectives.
    Evaluations under this section must use assessment methods 
including random assignment of clients to service delivery and 
control groups, a description and measurement of the 
effectiveness of the projects in achieving their goals, and a 
description and assessment of their impact on marriage, 
parenting, domestic violence, child abuse, money management, 
employment and earnings, payment of child support, and child 
well-being, health, and education.
    The Secretary must publish an implementation evaluation 
report covering the first 24 months of the activities within 36 
months of the initiation of such activities. A final report on 
the evaluation is to be completed by September 30, 2010.

                           Reason for Change

    Carefully evaluating the fatherhood projects and their 
outcomes would help the Secretary determine the best approaches 
to meet program objectives. The Committee is interested in 
maximizing information for Congress and others to review 
whether a project has been effective.

Section 446 of Part C--Projects of National Significance

                              Present Law

    No provision.

                        Explanation of Provision

    The Secretary is authorized, by grant, contract or 
cooperative agreement, to carry out projects and activities of 
national significance relating to fatherhood promotion. These 
projects and activities may include: collection and 
dissemination of information to interested parties information 
regarding approaches to accomplishing the four specified 
objectives; development, promotion, and distribution of a media 
campaign that promotes and encourages involved, committed, and 
responsible fatherhood and married fatherhood; technical 
assistance in the implementation of local fatherhood promotion 
programs, and conducting research related to the purposes of 
the fatherhood program.

                           Reason for Change

    To assist State and local projects that are working to help 
young and especially poor fathers become better husbands, 
parents, and providers, fatherhood projects of national 
significance will produce, collect, and distribute information 
about accomplishing the goals of the fatherhood program. Other 
allowable activities such as a media campaign, technical 
assistance, and research would help encourage involved, 
committed, and responsible fatherhood and married fatherhood.

Section 447 of Part C--Nondiscrimination

                              Present Law

    No provision.

                        Explanation of Provision

    The projects and activities assisted must be made available 
on the same basis to all fathers and expectant fathers able to 
benefit from such projects and activities, including married 
and unmarried fathers and custodial and non-custodial fathers, 
with particular attention to low-income fathers, and to mothers 
and expectant mothers.

                           Reason for Change

    This provision clarifies the intent of the Committee 
regarding nondiscrimination.

Section 448 of Part C--Authorization Of Appropriations; Reservation For 
        Certain Purposes

                              Present Law

    No provision.

                        Explanation of Provision

    Authorizes $20 million for each of fiscal years 2003 
through 2007. Not more than 15 percent of the annual 
appropriations shall be available for the costs of the multi-
city, multi-State demonstration projects under Section 444, 
evaluations under Section 445, and projects of national 
significance under Section 446.

                           Reason for Change

    This level of funding is appropriate for initiating the 
program so it can provide valuable information about effective 
approaches that help young men become better fathers and play a 
more significant role in family life.

Section 120. Increased Analysis of State Single Audit Reports

                              Present Law

    No provision.

                        Explanation of Provision

    The Secretary is required to analyze State Single Audit 
Reports within 3 months of receipt by the Secretary, and to 
identify the extent and nature of problems related to the 
oversight by the State of non-governmental entities under 
contract to operate State welfare programs. The Secretary is 
also required to determine what additional actions are needed 
for the State to help prevent and correct any problems. The 
information from this additional review is to be incorporated 
in the Secretary's Annual Report to Congress.

                           Reason for Change

    This provision responds to findings from a recent GAO 
report on the Single Audit process and HHS' oversight of the 
audits.

                          TITLE II. CHILD CARE

Section 201. Entitlement Funding

                              Present Law

    States are entitled to child care block grant funding based 
on fiscal years 1992 through 1995 expenditures in welfare-
related child care. Mandatory funds above this amount are 
provided to States on a matching basis. Appropriations for the 
entitlement (mandatory) funds are set forth for each year, 
rising to $2.717 billion in fiscal year 2002.

                        Explanation of Provision

    The legislation provides $2.717 billion in mandatory 
funding for the child care block grant (continuing fiscal year 
2002 levels) in each of fiscal years 2003 through 2007.

                           Reason for Change

    The record high Federal funding levels for the mandatory 
portion of the Child Care and Development Block Grant are 
continued each year through 2007, totaling well over $13 
billion over five years.
    In addition to maintaining the current record funding level 
for child care and providing additional State flexibility in 
use of TANF funds for child care, the Committee anticipates 
that, provided appropriate offsets for additional mandatory 
funding are located, more funds will be added to the Child Care 
and Development Block Grant as the Committee bill moves through 
the legislative process. Should such increases be provided, the 
Committee urges States to consider giving priority to the need 
for increased infant and after-hour care.

                        TITLE III. CHILD SUPPORT

Section 301. Federal Matching Funds for Limited Pass Through of Child 
        Support Payments to Families Receiving TANF

                              Present Law

    While a family receives TANF benefits, the State is 
permitted to retain any current child support payments and any 
assigned arrearages it collected up to the cumulative amount of 
TANF benefits which have been paid to the family. The State may 
share some, all, or none of the child support collected on 
behalf of a TANF family with the family. The State is required 
to pay the Federal government the Federal share of the child 
support collected, even if the State shares its collections 
with the family.

                        Explanation of Provision

    For families receiving TANF benefits, if the State passes 
through to the family up to the greater of $100 per month or 
$50 over the State's stipulated pass through as of December 31, 
2001, Federal matching funds would be available. To obtain the 
Federal match, the State has to disregard the amount passed 
through in determining the TANF benefit amount. This provision 
would take effect beginning October 1, 2004.

                           Reason for Change

    The Committee legislation provides that current and former 
welfare families receive more of the child support collected 
from noncustodial parents. By providing a Federal match for 
child support collections of up to $100 (or if greater, $50 
more than the recent level) that are passed through to current 
TANF families, States would be given an incentive to enact such 
a policy. These additional funds for current TANF families 
would help the family by encouraging a stronger connection 
between the family and the absent parent, providing additional 
regular income for the family, and allowing the paying parent 
to see that at least part of their child support payments are 
actually going to the family, rather than being retained by the 
government.

Section 302. State Option to Pass Through All Child Support Payments to 
        Families That Formerly Received TANF

                              Present Law

    Current child support payments must be paid to the family 
if the family is no longer on TANF. With respect to former TANF 
families, since October 1, 1997, child support arrearages that 
accrue after the family leaves TANF are required to be paid to 
the family before any monies may be retained by the State. 
Since October 1, 2000, child support arrearages that accrued 
before the family began receiving TANF also are required to be 
distributed to the family first. If child support arrearages 
are collected through the Federal income tax refund offset 
program, the family does not have first claim on the arrearage 
payments, the State and the Federal government retain such 
arrearage payments.

                        Explanation of Provision

    If the family has left TANF, States may distribute to the 
family the full amount of child support collected on their 
behalf (i.e., both current child support and child support 
arrearages). The Federal government would share with the States 
the costs of paying child support arrearages accrued while the 
family received TANF. This provision would take effect 
beginning October 1, 2004.

                           Reason for Change

    Providing additional funds to single-parent families 
leaving welfare would increase the parents' incentive to leave 
welfare, improve the chances that they will be able to sustain 
themselves and their children without falling back on welfare, 
and contribute to strengthening the bond between children and 
non-custodial parents.

Section 303. Mandatory Review and Adjustment of Child Support Orders 
        for Families Receiving TANF

                              Present Law

    States are required to have procedures under which every 
three years the State reviews and adjusts (if appropriate) 
child support orders at the request of either parent. In 
addition, in the case of TANF families, the State is required 
to review and update (if appropriate) child support orders at 
the request of the State Child Support Enforcement agency or of 
either parent.

                        Explanation of Provision

    States are required to review and, if appropriate, adjust 
child support orders in both TANF and non-TANF cases every 
three years, at the request of either parent or the State CSE 
agency (in the case of a TANF family). This provision would 
take effect on October 1, 2004.

                           Reason for Change

    Factors such as inflation, unemployment, promotion, job 
change, marriage, or disability can cause child support orders 
to become outdated and in need of adjustment. Although 
requiring regular review of child support orders would involve 
the investment of time and money by States, according to the 
Congressional Budget Office, both States and the Federal 
government would save money if child support orders were 
updated every 3 years. In addition to this cost saving, a 
regular review and modification of child support orders would 
promote fairness for both custodial and non-custodial parents. 
For custodial parents, positive changes in the financial 
condition of the non-custodial parent can result in higher 
child support payments for families. For non-custodial parents 
experiencing economic difficulties, proper adjustment of a 
child support order would help prevent them from accumulating 
unnecessary debt while allowing for continued, though perhaps 
lower, regular financial contribution to the monthly income 
needs of the child.

Section 304. Mandatory Fee for Successful Child Support Collection for 
        Family That Has Never Received TANF

                              Present Law

    Non-welfare families applying for child support enforcement 
program services must be charged an application fee that cannot 
exceed $25. States have the option of recovering costs in 
excess of the application fee. Such recovery may be from either 
the custodial parent or the noncustodial parent.

                        Explanation of Provision

    Families that have never been on TANF are required to pay a 
$25 annual user fee in cases where child support enforcement 
efforts are successful in collecting at least $500. This 
provision would take effect October 1, 2003.

                           Reason for Change

    The implementation of user fees in certain non-welfare 
cases contributes to offsetting the costs of the program and is 
a reasonable expectation, especially with the added provision 
limiting the fee collection to only those cases in which at 
least $500 is collected. In addition, this action represents a 
step away from the perception that the purpose of the child 
support enforcement program is to recoup welfare benefits, and 
toward a focus on families and a strengthened child support 
enforcement program.

Section 305. Report on Undistributed Child Support Payments

                              Present Law

    No provision.

                        Explanation of Provision

    Within six months of enactment, the Secretary of HHS must 
submit to Congress a report on the procedures States use to 
locate custodial parents for whom child support has been 
collected but not yet distributed. The report would be required 
to include recommendations on actions to expedite the payment 
of undistributed child support.

                           Reason for Change

    The Committee is interested in learning more about the 
problem of collected child support payments that are being held 
by the State rather than being distributed to families because 
of problems such as an incorrect address. The Secretary is 
directed to examine this problem and its causes, estimate the 
amount of money that is undistributed and the length of time 
for which it is undistributed, and make recommendations on 
State or Federal policy changes that would effectively address 
this problem.

Section 306. Use of New Hire Information to Assist in Administration of 
        Unemployment Compensation Programs

                              Present Law

    All employers are required to report basic information on 
every newly hired employee to the State. States are then 
required to collect all this information in the State Directory 
of New Hires, to use this information to locate noncustodial 
parents who owe child support and send a wage withholding order 
to their employer, and to (within three business days) report 
all information in their State Directory of New Hires to the 
National Directory of New Hires. Information in the State 
Directory of New Hires is used by State Employment Security 
Agencies (the agency that operates the State Unemployment 
Compensation program) to match against unemployment 
compensation records to determine whether people are actually 
working and fraudulently drawing unemployment compensation 
benefits.

                        Explanation of Provision

    State Employment Security Agencies are authorized to 
request and receive information from the National Directory of 
New Hires in order to help detect fraud in the unemployment 
compensation system. This provision would take effect on 
October 1, 2003.

                           Reason for Change

    States have successfully used matches between their State 
Directory of New Hires and unemployment compensation records to 
identify individuals who are inappropriately drawing 
unemployment compensation benefits while working. Unemployment 
compensation payments to these individuals are stopped quickly, 
saving money and reducing fraud. However, if an individual is 
working in a different State than the one in which unemployment 
compensation benefits are being drawn, the State paying 
unemployment benefits is not able to detect this fraud because 
they do not have access to Federal Directory of New Hires for 
comparison. According to the Congressional Budget Office, 
allowing States access to the National Directory of New Hires 
would reduce fraud by $66 million over five years.

Section 307. Decrease in Amount of Child Support Arrearage Triggering 
        Passport Denial

                              Present Law

    The Secretary of HHS is required to submit to the Secretary 
of State the names of noncustodial parents who have been 
certified by the State Child Support Enforcement agency as 
owing more than $5,000 in past-due child support. The Secretary 
of State has authority to deny, revoke, restrict, or limit 
passports to noncustodial parents whose child support 
arrearages exceed $5,000.

                        Explanation of Provision

    The amount of past-due child support that triggers passport 
denial, revocation, or restriction to noncustodial parents is 
reduced from $5,000 to $2,500. This provision would take effect 
on October 1, 2003.

                           Reason for Change

    The passport denial program has proved to be an effective 
method for collecting past-due child support payments. In 
fiscal year 2000, individuals with child support arrearages 
paid $3.6 million in lump sum child support payments to avoid 
losing their passports. By lowering the amount that triggers 
passport revocation, even more child support would be collected 
to help more families.

Section 308. Use of Tax Refund Intercept Program to Collect Past-Due 
        Child Support on Behalf of Children Who are Not Minors

                              Present Law

    Federal law prohibits the use of the Federal income tax 
offset program to recover past-due child support on behalf of 
non-welfare cases in which the child is not a minor.

                        Explanation of Provision

    The Federal income tax refund offset program may be used to 
collect arrearages on behalf of non-welfare cases in which the 
child is no longer a minor. This provision would take effect on 
October 1, 2004.

                           Reason for Change

    Originally proposed as part of H.R. 4071 in the 106th 
Congress, this provision promotes equal treatment of all child 
support debts, increases collections, and strengthens the 
important message that child support debts cannot be avoided by 
withholding payment until the child is no longer a minor.

Section 309. Garnishment of Compensation Paid to Veterans for Service-
        Connected Disabilities in Order to Enforce Child Support 
        Obligations

                              Present Law

    The disability compensation benefits of veterans are 
treated differently than most forms of government payment for 
purposes of paying child support. Whereas most government 
payments are subject to being automatically withheld to pay 
child support, veteran's disability compensation is not subject 
to intercept. The only exception occurs when veterans have 
elected to forego some of their retirement pay in order to 
collect additional disability payments. The advantage of 
veterans replacing retirement pay with disability pay is that 
the disability pay is not subject to taxation. With this 
exception, which occurs rarely, the only way to obtain child 
support payments from veterans' disability compensation is to 
request that the Secretary of the U.S. Department of Veterans 
Affairs intercept the disability compensation and make the 
child support payments.

                        Explanation of Provision

    Veterans' disability compensation benefits are allowed to 
be intercepted and paid on a routine basis to the custodial 
parent if the veteran is 60 days or more in arrears on child 
support payments. This provision cannot be used to collect 
alimony and no more than 50 percent of any particular 
disability payment can be withheld. This provision would take 
effect on October 1, 2004.

                           Reason for Change

    The Ways and Means Committee has been supportive of 
allowing veterans' disability payments to be subject to 
withholding to enforce child support obligations. Nonetheless, 
by allowing withholding only after the veteran has been 60 days 
in arrears on child support obligations, veterans' disability 
payments would continue to be treated differently than most 
other government payments; the Committee believes the fact that 
veterans are receiving the payments because they were injured 
in the line of duty justifies this continued differential 
treatment.

Section 310. Improving Federal Debt Collection Practices

                              Present Law

    Any Federal agency that is owed a nontax debt that is more 
than 180 days past-due must notify the Secretary of the 
Treasury to obtain an administrative offset of the debt. 
Currently, Social Security payments can only be offset for 
Federal debt recovery.

                        Explanation of Provision

    The Federal administrative offset program is expanded to 
allow certain Social Security benefits to be offset to collect 
unpaid child support on behalf of families receiving Child 
Support Enforcement program services in appropriate cases 
selected by the States.

                           Reason for Change

    To further increase the amount of child support collected, 
this provision adds another enforcement tool to achieve that 
goal. While maintaining current safeguards such as offset 
thresholds, this provision provides a limited expansion that 
would help collect unpaid child support obligations and assist 
additional families with children in avoiding unnecessary 
dependence on welfare.

Section 31. Maintenance of Technical Assistance Funding

                              Present Law

    The Secretary is authorized to use one percent of the 
Federal share of child support collected on behalf of TANF 
families the preceding year to provide for information 
dissemination and technical assistance, training of State and 
Federal staff, staffing studies, and related activities needed 
to improve Child Support Enforcement programs (including 
technical assistance concerning State automated systems), and 
research, demonstration and special projects of regional or 
national significance relating to the operation of child 
support programs.

                        Explanation of Provision

    The Secretary is authorized to use one percent of the 
Federal share of child support collected on behalf of TANF 
families the preceding year, or the amount appropriated for 
fiscal year 2002, whichever is greater, to provide for 
activities described under current law.

                           Reason for Change

    Funding authorized under this provision is an important 
element of the Federal government's oversight of the 
development of State automated child support program systems. 
This provision would help maintain an adequate funding stream 
for much needed technical assistance as HHS works to bring all 
States into compliance with the automated system requirements 
of the 1996 welfare reform law.

Section 312. Maintenance of Federal Parent Locator Service Funding

                              Present Law

    The Secretary of HHS is authorized to use two percent of 
the Federal share of child support collected on behalf of TANF 
families the preceding year for operation of the Federal Parent 
Locator Service to the extent that the costs of the Federal 
Parent Locator Service are not recovered by user fees.

                        Explanation of Provision

    The Secretary is authorized to use two percent of the 
Federal share of child support collected on behalf of TANF 
families the preceding year, or the amount appropriated for 
fiscal year 2002, whichever is greater, for operation of the 
Federal Parent Locator Service to the extent that the costs of 
the Federal Parent Locator Service are not recovered by user 
fees.

                           Reason for Change

    The Federal Parent Locator Service processes millions of 
requests for information to help find absent parents in order 
to secure and enforce child support obligations. This provision 
would help maintain an adequate funding stream for this 
important service.

                        TITLE IV. CHILD WELFARE

Section 401. Extension of Authority to Approve Demonstration Projects

                              Present Law

    Section 1130(a)(1) and (2) of the Social Security Acts 
permits the Secretary of HHS to approve State demonstration 
projects that are likely to promote the objectives of the child 
welfare programs authorized under Title IV-B and Title IV-E of 
that Act. This authority is granted for fiscal years 1998 
through 2002.

                        Explanation of Provision

    Extends the Secretary's authorization to permit child 
welfare demonstration projects through fiscal year 2007.

                           Reason for Change

    Waivers of Federal Foster Care, Adoption Assistance, and 
child welfare services programs allow States to seek 
improvements and efficiencies in child protection programs. For 
example, managed care approaches to service provision approved 
under Title IV-E waivers have allowed States to provide 
increased and support services to a broader range of families 
than could be accomplished under the restrictive guidelines 
that govern existing Federal funding streams.
    Much has been learned from the existing demonstration 
projects, particularly as a result of the requirement that 
projects be rigorously evaluated. Continuation of this activity 
would yield additional important information on ways to improve 
the provision of services to children and families in need.

Section 402. Elimination of Limitation on Number of Waivers

                              Present Law

    Section 1130(a)(2) of the Social Security Act limits to ten 
the number of demonstration projects the Secretary may grant in 
a single fiscal year.

                        Explanation of Provision

    Removes the restriction on the number of demonstration 
projects the Secretary may approve in each fiscal year.

                           Reason for Change

    The Secretary's authority to approve child welfare waivers 
has been increased over time and many States currently operate 
demonstration projects. Existing waivers have shown that 
enhanced flexibility can free States and localities to expand 
and improve services and supports to families without 
jeopardizing program integrity. Any and all States should have 
the opportunity to seek out approaches designed to improve 
child protection services that match local needs. Lifting the 
cap on the number of waivers that may be approved would ensure 
that every State has this option.

Section 403. Elimination of Limitation on Number of States That May Be 
        Granted Waivers to Conduct Demonstration Projects on Same Topic

                              Present Law

    No provision.

                        Explanation of Provision

    Asserts that the Secretary may not refuse to grant a 
particular waiver of child welfare program rules on the grounds 
that the purpose of the waiver or demonstration project is 
similar to another waiver or demonstration project.

                           Reason for Change

    In the past, the Secretary has narrowly interpreted the 
agency's waiver authority. States were denied waiver 
applications on the grounds that the approach had already been 
tested, despite the fact that there were no such restrictions 
imposed in statute. The Committee finds that lessons learned 
from existing or previous demonstration projects ought to 
inform future applications on similar topics. Thus, if one 
State's waiver would benefit children in other States, that 
waiver should be allowed to apply in those other States.

Section 404. Elimination of Limitation on Number of Waivers That May Be 
        Granted to a Single State for Demonstration Projects

                              Present Law

    No provision.

                        Explanation of Provision

    Asserts that the Secretary may not impose a limit on the 
number of waivers or demonstration projects that a single State 
is granted.

                           Reason for Change

    In the past, the Secretary has narrowly interpreted waiver 
authority. The Committee legislation makes clear that States 
have the authority to operate more than one waiver at a time. 
As many waivers are narrowly focused on a particular service 
need, eligibility category, or local area, it is important that 
the number of waivers or demonstration projects granted a 
single State not be arbitrarily limited.

Section 405. Streamlined Process for Consideration of Amendments to and 
        Extensions of Demonstration Projects Requiring Waivers

                              Present Law

    No provision.

                        Explanation of Provision

    Requires the Secretary to develop a ``streamlined process'' 
for considering amendments or extensions that States propose to 
their demonstration projects.

                           Reason for Change

    The process for making adjustments or extensions to child 
welfare demonstration projects in the past has been lengthy and 
overly bureaucratic. While the Committee finds that the current 
Administration has made dramatic improvements to the waiver 
approval process, particularly as it affects waivers of health 
care provisions, the legislation would ensure there is an 
expedited process for child welfare waiver extensions and 
amendments in the future. The legislation would not in any way 
diminish the authority of the Secretary to raise and require 
States to address any issues that may affect children's health 
and safety.

Section 406. Availability of Reports

                              Present Law

    Section 1130(f)(1) and (2) of the Social Security Act 
provides that States conducting demonstration projects under a 
waiver granted by the Secretary must obtainan evaluation of the 
project's effectiveness and must provide interim and final evaluation 
reports to the Secretary when and in the manner, that the Secretary 
requests.

                        Explanation of Provision

    Requires the Secretary to make available to States or other 
interested parties any of the demonstration project evaluation 
reports that it requests and any demonstration project 
evaluation or report made by the Secretary which may promote 
best practices and program improvements.

                           Reason for Change

    The child welfare waiver authority requires rigorous 
evaluation and studies of each project. This information can 
provide important guidance to other States as they consider 
waiver applications or other improvements to child protection 
programs. The legislation requires the Secretary to ensure that 
the findings from these demonstration reviews are made 
available to other States and interested parties.

Section 407. Technical Correction

                              Present Law

    Section 1130(b)(1) of the Social Security Act specifies 
States that the Secretary of HHS may not waive compliance with 
certain provisions under Title IV-B and IV-E, including those 
provisions under ``Section 422(b)(9).''

                        Explanation of Provision

    Changes this reference to Section 422(b)(10). This 
technical correction is necessary because the cited language 
was renumbered in 1997 (P.L. 105-33) without the necessary 
conforming amendment to Section 1130 of the Social Security 
Act.

                           Reason for Change

    This is a technical change to correct a cross-reference.

                 TITLE V. SUPPLEMENTAL SECURITY INCOME

Section 501. Review of State Agency Blindness and Disability 
        Determinations

                              Present Law

    No provision.

                        Explanation of Provision

    The Commissioner of Social Security is required to review 
determinations made by State agencies that adult applicants 
became blind or disabled as of a specified onset date. Review 
is required of at least 20 percent of determinations made in 
fiscal year 2003, 40 percent of those made in fiscal year 2004, 
and 50 percent of those made in fiscal year 2005 and subsequent 
years.

                           Reason for Change

    Under current law, the Commissioner of Social Security is 
required to review certain eligibility determinations made for 
Social Security disability insurance program claims that are 
made by State agencies. This practice ensures consistent and 
uniform application of SSA policies. By expanding this review 
provision to selected Supplemental Security Income adult 
disability cases, the practice would be extended to help ensure 
that only beneficiaries disabled under the law receive 
Supplemental Security Income benefits.

                  TITLE VI. BROADENED WAIVER AUTHORITY

Section 601. State Program Demonstration Projects

                              Present Law

    No provision.

                        Explanation of Provision

    Establishes new waiver authority that would allow the 
Secretaries of HHS and Labor, upon request of a State or 
substate entity, to waive rules in part A of Title IV of the 
Social Security Act, and Title XX of the Social Security Act. 
Waiver projects must not increase Federal costs over one or 
five years. The purpose would be to integrate programs designed 
to support working individuals and families, helping families 
escape welfare dependency, promoting child well-being, or 
helping build stronger families, using innovative approaches to 
strengthen service systems, and provide more coordinated and 
effective service delivery.
    Waivers may not be granted that affect laws relating to 
nondiscrimination and civil rights, the purposes or goals of 
any program, maintenance of effort requirements, health or 
safety standards, labor standards under the Fair Labor 
Standards Act of 1938, or environmental protection.

                           Reason for Change

    Waivers under the Aid to Families with Dependent Children 
(AFDC) program led to important information about how cash 
welfare programs could be operated in more efficient and 
effective ways that benefited low-income families. H.R. 4090 as 
well as related legislation considered by other committees 
seeks to offer added opportunities for States to integrate 
other programs that serve similar populations, but frequently 
have conflicting or incongruous requirements. Sufficient 
protections are included in the legislation to ensure that 
fundamental program purposes are not compromised by 
demonstration projects, and that various civil rights, health 
and safety, and labor protections may not be waived. These 
demonstrations could yield important information for other 
States and the Nation on how programs serving low-income 
families may be improved in the future.

                       TITLE VII. EFFECTIVE DATE

Section 701. Effective Date

                              Present Law

    No provision.

                        Explanation of Provision

    Unless otherwise specified, provisions take effect on 
October 1, 2002. If the Secretary determines that State 
legislation is required, more time is allowed (three months 
after the first regular session of the legislature).

                           Reason for Change

    Provides for the effective date of changes while allowing 
States ample time to make any necessary changes to State laws 
to comply with the Committee bill.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 4090.

                       motion to report the bill

    The bill, H.R. 4090, as amended, was ordered favorably 
reported by a roll call vote of 23 yeas to 16 nays (with a 
quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................        X   ........  .........  Mr. Rangel.......  ........        X   .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........  ........        X   .........
Mr. Shaw.......................        X   ........  .........  Mr. Matsui.......  ........        X   .........
Mrs. Johnson...................  ........  ........  .........  Mr. Coyne........  ........        X   .........
Mr. Houghton...................        X   ........  .........  Mr. Levin........  ........        X   .........
Mr. Herger.....................        X   ........  .........  Mr. Cardin.......  ........        X   .........
Mr. McCrery....................        X   ........  .........  Mr. McDermott....  ........        X   .........
Mr. Camp.......................        X   ........  .........  Mr. Kleczka......  ........        X   .........
Mr. Ramstad....................        X   ........  .........  Mr. Lewis (GA)...  ........        X   .........
Mr. Nussle.....................        X   ........  .........  Mr. Neal.........  ........        X   .........
Mr. Johnson....................        X   ........  .........  Mr. McNulty......  ........        X   .........
Ms. Dunn.......................        X   ........  .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................        X   ........  .........  Mr. Tanner.......  ........        X   .........
Mr. Portman....................        X   ........  .........  Mr. Becerra......  ........        X   .........
Mr. English....................        X   ........  .........  Mrs. Thurman.....  ........        X   .........
Mr. Watkins....................        X   ........  .........  Mr. Doggett......  ........        X   .........
Mr. Hayworth...................        X   ........  .........  Mr. Pomeroy......  ........        X   .........
Mr. Weller.....................        X   ........  .........  Mr. Hulshof......  ........        X   .........
Mr. McInnis....................        X   ........  .........  Mr. Lewis (KY)...  ........        X   .........
Mr. Foley......................        X   ........  .........  Mr. Brady........  ........        X   .........
Mr. Ryan.......................        X   ........  .........  .................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

                          votes on amendments

    A roll call vote was conducted on the following amendment 
to the Chairman's amendment in the nature of a substitute.
    An amendment by Mr. Rangel, which would allow States to do 
the following: immediately pass-through child support, receive 
TANF contingency funds, count individuals who have left welfare 
for employment toward their work participation requirement for 
six months, count individuals with disabilities toward the 
participation requirement if they are in work or related 
activities for at least 20 hours a week, maintain current-law 
participation requirements for mothers with children under the 
age of 6, count vocational training toward the work 
participation requirements for up to 12 months; and spend 
Federal TANF funds to provide assistance and service to legal 
immigrants, was defeated by a roll call vote of 14 yeas to 22 
nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........   Mr. Stark.......        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........  ........  ........  .........
Mr. Houghton...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......  ........  ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......  ........  ........  .........
Mr. Weller.....................  ........        X
Mr. Hulshof....................  ........        X
Mr. McInnis....................  ........        X
Mr. Lewis (KY).................  ........        X
Mr. Foley......................  ........        X
Mr. Brady......................  ........        X
Mr. Ryan.......................  ........        X
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Cardin, which would add limited 
participation in vocational or educational training (including 
postsecondary education) to the list of allowable work 
activities, was defeated by a roll call vote of 16 yeas to 21 
nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........  ........  ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................        X   ........  .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......  ........  ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Stark, which would increase funding of 
the child care development bock grant by $11.25 billion over 5 
years, was defeated by a roll call vote of 13 yeas to 22 nays. 
The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....  ........  ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...  ........  ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........  ........  .........  Mr. McNulty......        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Levin, which would replace the case-
load reduction credit with an enhanced employment credit, was 
defeated by a roll call vote of 15 yeas to 20 nays. The vote 
was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........  ........  .........  Mr. Coyne........        X   ........  .........
Mr. Houghton...................  ........  ........  .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........  ........  .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......  ........  ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Becerra, which would remove the five-
year ban from current law that prevents States from using 
Federal TANF funds to serve legal immigrants of the United 
States, was defeated by a roll call vote of 15 yeas to 22 nays. 
The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......  ........  ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Hayworth...................  ........  ........  .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Rangel, which would make Puerto Rico, 
the Virgin Islands, and Guam eligible for the supplemental 
grants, contingency funds, and mandatory child care under TANF, 
was defeated by a roll call vote of 16 yeas to 23 nays. The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................  ........        X   .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Kleczka, which would prohibit the use 
of Federal TANF funds for contracting with entities that employ 
workers located outside the United States, was defeated by a 
roll call vote of 16 yeas to 22 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................  ........        X   .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Shaw.......................  ........        X   .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Coyne........        X   ........  .........
Mr. Houghton...................  ........        X   .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. McCrery....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Nussle.....................  ........        X   .........  Mr. Neal.........        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. McNulty......        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Jefferson....  ........  ........  .........
Mr. Collins....................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. English....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. Watkins....................  ........        X   .........  Mr. Doggett......  ........  ........  .........
Mr. Hayworth...................  ........        X   .........  Mr. Pomeroy......        X   ........  .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
Mr. Brady......................  ........        X   .........
Mr. Ryan.......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL

               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made:
    The Committee agrees with the estimate prepared by the 
Congressional Budget office (CBO), which is included below.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 13, 2002.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4090, the Personal 
Responsibility, Work, and Family Promotion Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Sheila 
Dacey and Leo Lex.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 4090--Personal Responsibility, Work, and Family Promotion Act of 
        2002

    Summary: H.R. 4090 would reauthorize the Temporary 
Assistance for Needy Families (TANF) and child care entitlement 
to state programs at current funding levels. It would increase 
funding for some grants related to TANF and establish two new 
grants, but also would reduce funding for other related grants. 
It would make several changes to the child support enforcement 
program, including allowing the distribution to families of 
more collections from child support payments and establishing a 
new program of fees. Another provision would require the Social 
Security Administration (SSA) to change its system of reviewing 
awards to certain disabled adults in the Supplemental Security 
Income (SSI) program. Finally, it would provide states with new 
authority to run demonstration projects, providing that the 
projects may not increase federal spending.
    CBO estimates that H.R. 4090 would increase federal 
spending by $320 million in 2003 and by $1.2 billion over the 
2003-2007 period. It also would reduce revenues by $20 million 
over the 2005-2007 period. Because the bill would affect direct 
spending and revenues, pay-as-you-go procedures would apply.
    The bill would authorize $20 million in 2003 and $100 
million over the 2003-2007 period for a new program of grants 
promoting fatherhood. CBO estimates that appropriations of the 
authorized levels would result in insignificant outlays in 2003 
and $70 million over the 2003-2007 period.
    The TANF grant program affords states broad flexibility to 
determine eligibility for benefits and to structure the 
programs offered as part of a state's family assistance 
program. Consequently, any new requirements to the program as 
proposed by H.R. 4090 would not be intergovernmental mandates 
as defined in the Unfunded Mandates Reform Act (UMRA). However, 
the bill could significantly affect the way states administer 
the program and provide benefits to beneficiaries and thus 
could increase costs in some areas relative to whatstates would 
have spent if current law were to be continued unchanged. H.R. 4090 
contains no private-sector mandates as defined in UMRA.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 4090 is shown in Table 1. The costs of 
this legislation fall within budget functions 600 (income 
security) and 550 (health).

 TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 4090, THE PERSONAL RESPONSIBILITY, WORK, AND FAMILY PROMOTION ACT
                                                     OF 2002
----------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars
                                                                    --------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Title I: TANF:
    Authorization level............................................       20       20       20       20       20
    Estimated outlays..............................................      \1\        6       15       25       24

                                           CHANGES IN DIRECT SPENDING

Title I: TANF:
    Estimated budget authority.....................................      335      730      228      229      -84
    Estimated outlays..............................................      324      347      262      220       94
Title III: Child support:
    Estimated budget authority.....................................       -1      -60       20       45       78
    Estimated outlays..............................................       -1      -60       25       54       78
Title V: Supplemental Security Income:
    Estimated budget authority.....................................       -3      -14      -30      -48      -65
    Estimated outlays..............................................       -3      -14      -30      -48      -65
Total, direct spending
    Estimated budget authority.....................................      331      656      218      226      -71
    Estimated outlays..............................................      320      273      257      226      107

                                               CHANGES IN REVENUES

Title III: Child support
    Estimated revenues.............................................        0        0       -2       -6     -12
----------------------------------------------------------------------------------------------------------------
\1\ Note.--Less than $500,000.

    Basis of Estimate: For this estimate, CBO assumes that the 
bill will be enacted by the end of fiscal year 2002, and that 
the amounts authorized in title I will be appropriated for each 
year. Most of the bill's budgetary effects, however, would come 
from changes in direct spending. In addition, enacting the bill 
would reduce revenues (beginning in 2005).

Spending subject to appropriation

    Section 119 would establish several new programs designed 
to promote fatherhood including activities to improve parenting 
skills, promote marriage, and improve outcomes for children. It 
would authorize $20 million to be appropriated in each of 
fiscal years 2003 through 2007, and at least 85 percent of the 
funds would have to be used for a program of competitive 
grants.
    Section 119 would establish a program of competitive grants 
to public and nonprofit community entities for projects 
designed to promote fatherhood. Grantees would be required to 
put up 10 percent or 20 percent of the costs of the program, 
although exceptions would be made for certain smaller grants. 
In addition, it would allow the Secretary of Health and Human 
Services to carry out projects to promote fatherhood including 
collecting and disseminating information, developing, promoting 
and distributing media campaigns, providing technical 
assistance, and conducting research; to make grants to national 
fatherhood promotion organizations to establish two multicity, 
multistate projects; and to conduct evaluations of fatherhood 
projects.
    CBO estimates that spending would initially be slow until 
programs are established, but would speed up gradually in 
succeeding years. We estimate that outlays would total $70 
million over the 2003-2007 period.

Direct spending and revenues

    Title I: Temporary Assistance for Needy Families. H.R. 4090 
would reauthorize TANF through 2007 at the current level of 
funding of $16.6 billion. The bill would not alter current 
requirements on states to spend at a certain percentage of 
their historic spending level (80 percent, or 75 percent if the 
state meets the work participation requirements) and to limit 
assistance paid with federal funds to five years. It would 
significantly alter the work participation requirements and the 
funding of some grants related to TANF. In addition, it would 
make several other changes to program rules and reporting 
requirements (see Table 2).

  TABLE 2.--DETAILED EFFECTS OF H.R. 4090, THE PERSONAL RESPONSIBILITY, WORK, AND FAMILY PROMOTION ACT OF 2002,
                                                     TITLE I
----------------------------------------------------------------------------------------------------------------
                                                          By fiscal year, in millions of dollars
                                                   ----------------------------------------------------
                                                    2003-2004    2005      2006      2007    2003-2007
-------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING

Section 103:
    Eliminate out-of-wedlock grants:
        Estimated budget authority................       -100      -100      -100      -100       -100      -500
        Estimated outlays.........................          0       -42       -57       -94       -103      -296
    Healthy marriage promotion grant:
        Budget authority:.........................        100       100       100       100        100       500
        Estimated outlays.........................          1        28        74       124        122       349
Section 104:
    Continue supplemental grant at $319 million
     through 2006:
        Budget authority..........................        319       319       319       319          0     1,276
        Estimated outlays.........................        128       191       287       351        144     1,101
Section 105:
    Reduce bonuses for high-performing states:
        Estimated budget authority................       -100       300      -200      -200       -200      -400
        Estimated outlays.........................          0       -42       -57       -94       -103      -296
Section 106:
    Modify Contingency Fund:
        Estimated budget authority................         16        10         9        10         13        58
        Estimated outlays.........................          6         7         9        11         14        47
Section 107:
    Increase transfer authority to SSBG:
        Budget authority..........................          0         0         0         0          0         0
        Estimated outlays.........................        181       145        89      -172        -96       146
Section 115:
    Secretary's fund for research, demonstration,
     and national studies:
        Budget authority..........................        102       102       102       102        102       510
        Estimated outlays.........................         10        61       110       117        111       410
Effect of title I on food stamps:
    Estimated budget authority....................         -2        -1        -2        -2          1        -6
    Estimated outlays.............................         -2        -1        -2        -2          1        -6
Interactions, title I:
    Budget authority..............................          0         0         0         0          0         0
    Estimated outlays.............................          0         0      -190       -21          4      -207
Total, title I:
    Temporary assistance for needy families:
        Estimated budget authority................        337       731       230       231        -85     1,444
        Estimated outlays.........................        326       348       264       222         93     1,254
    Effect on food stamps:
        Estimated budget authority................         -2        -1        -2        -2          1        -6
        Estimated outlays.........................         -2        -1        -2        -2          1        -6
    Net effect, title I:
        Estimated budget authority................        335       730       228       229        -84     1,438
        Estimated outlays.........................        324       347       262       220         94    1,248
----------------------------------------------------------------------------------------------------------------
Note.--Components may not sum to totals because of rounding.

    State Family Assistance Grant. Section 102 would extend the 
state family assistance grant through 2007 at the current 
funding level of $16.6 billion. CBO already assumes funding at 
that level in its baseline in accordance with rules for 
constructing baseline projections, as set forth in section 257 
of the Balanced Budget and Emergency Deficit Control Act of 
1985 (Deficit Control Act).
    Promotion of Family Formation and Healthy Marriage. Section 
103 would eliminate one grant program related to out-of-wedlock 
birth rates and replace it with another directed at promoting 
marriage. CBO projects funding for out-of-wedlock birth grants 
at $100 million annually in accordance with section 257 of the 
Deficit Control Act. CBO estimates that eliminating the grant 
program would reduce outlays by $296 million over the 2004-2007 
period. The impact of the reduction in funding on outlays is 
delayed (no effect in 2003) because the grants are awarded in 
the last days of the fiscal year.
    Section 103 also would establish a new competitive grant to 
states, territories, and tribes for the development and 
implementation of programs to promote and support married, two-
parent families. The bill appropriates $100 million annually 
for grants that could be used for a variety of activities 
including public advertising campaigns, education programs on 
topics related to marriage, and programs to reduce 
disincentives to marriage in means-tested assistance programs. 
The grants could be used to cover up to half the cost of the 
newprograms. CBO expects grants would be spent slowly in the 
first few years because the Department of Health and Human Services 
would need to set up a system for awarding grants and states would need 
to set up programs to use the funds. CBO estimates states would spend 
$1 million in 2003 and $349 million over the 2003-2007 period.
    Supplemental Grants. Section 104 would extend the 
supplemental grants for population increases through 2006 at 
the 2002 funding level of $319 million. Current law specifies 
that these grants should not be assumed to continue in baseline 
projections after 2002, overriding the continuation rules 
specified in section 257 of the Deficit Control Act. Seventeen 
states that had lower-than-average TANF grants per poor person 
or had increasing populations would be eligible for 
supplemental grants. Because many states have unspent balances 
from prior-year TANF grants, CBO assumes that states would not 
spend the new funds quickly. CBO estimates that states would 
spend $128 million in 2003 and $1.1 billion over the 2003-2007 
period.
    Bonuses for High-Performing States. Section 105 would 
reduce funding for a bonus to high-performing states in 2003 
and refocus the bonus toward rewarding performance in improving 
job outcomes in 2004. The bonus in current law rewards states 
for moving TANF recipients into jobs, providing support for 
low-income working families, and increasing the percentage of 
children who reside in married-couple families. Current law 
provides $1 billion for bonuses, averaging $200 million 
annually, over the 1999-2003 period. CBO assumes in its 
baseline projections that funding will continue at $200 million 
annually in accordance with section 257 of the Deficit Control 
Act. The revised bonus--the Bonus to Reward Employment 
Achievement--would be focused on rewarding success in 
employment entry, job retention, and increased earnings for 
families receiving assistance.
    Section 105 would lower projected budget authority by $100 
million in 2003 and $200 million each year from 2004 through 
2007, but provide $500 million in new budget authority in 2004, 
for a net reduction of $400 million over the five-year period. 
Because the bonuses are usually granted in the following fiscal 
year and many states have prior-year balances of TANF funds 
that they can use to replace any grant reductions, TANF 
spending would fall by only $296 million over the 2005-2007 
period.
    Contingency Fund. Section 106 would expand the Contingency 
Fund for State Welfare Programs. The contingency fund provides 
additional federal funds to states with high and increasing 
unemployment rates or significant growth in Food Stamp 
caseloads. States are required to maintain state spending at 
100 percent of their historical level and to match federal 
payments. The bill would allow states to count more of their 
spending toward meeting the state spending requirement and 
lower the matching requirements of states that qualify for the 
fund for only part of a year. Based on CBO's projections of 
unemployment, Food Stamp participation, and state TANF 
spending, CBO estimates that states would use an additional $6 
million from the contingency fund for 2003 and $47 million over 
the 2003-2007 period.
    Increased Transfer Authority to Social Services Block Grant 
(SSBG). Section 107 would raise the percentage of the TANF 
grant that states could transfer to SSBG from 4.25 percent to 
10 percent. States have had the authority to transfer up to 10 
percent from 1996 to 2002, but that is assumed to fall to 4.25 
percent in 2003 and after. In recent years, states have 
transferred about $1 billion annually. Maintaining the transfer 
authority at the higher level would make it easier for states 
to spend their TANF grants and would speed up spending relative 
to current law. Based on recent state transfers, CBO expects 
that states would transfer an additional $600 million under the 
provision, but because some of this money would have been spent 
within the TANF program anyway, only $181 million of additional 
spending would occur in 2003. The accelerated spending would be 
offset by reduced spending in later years, starting in 2006. 
Overall, we estimate that the provision would increase spending 
by $146 million over the 2003-2007 period.
    Work Participation Requirements. Section 110 would require 
states to have an increasing percentage of TANF recipients 
participate in work activities while receiving cash assistance. 
The bill would maintain current penalties for the failure to 
meet those requirements. These penalties can total up to 5 
percent of the TANF block grant amount for the first failure to 
meet work requirements and increase for each subsequent 
failure. CBO assumes that no state would be subject to 
financial penalty for failing to meet the new requirements.
    The bill would require states to engage an increasing share 
of families receiving TANF in activities for 40 hours a week 
with at least 24 of those hours in a work activity. Work 
activities would be limited to employment (subsidized or 
unsubsidized), on-the-job training, supervised work experience 
(including entrepreneurship or microenterprise activities), or 
supervised community service. The required participation rate 
would rise by 5 percentage points a year from 50 percent in 
2003 to 70 percent in 2007. Certain families would not be 
included in the calculation: families without an adult or teen 
head of household, under sanction for three months or less, 
with a child under age one (at state option), or in the first 
month of assistance (at state option). The bill would eliminate 
a requirement in current law that sets even higher 
participation rates for two-parent families and would allow a 
broader range of activities to count as work for up to three or 
four months. Finally, the bill would alter a provision that 
reduces the participation rates of states that have experienced 
caseload reductions since 1995.
    Because the new requirements would be difficult for states 
to meet, CBO expects states would need to employ strategies 
such as moving nonworking families into separate stateprograms 
to effectively reduce the new requirements. For example, under current 
law, states that fail to meet work requirements, particularly the 
higher requirements applying to two-parent families, set up separate 
state programs to serve those families. States can count funds they 
spend in separate state programs toward their maintenance of effort 
requirement in TANF, but families served under those programs do not 
count in the work participation rate.
    Secretary's Fund for Research, Demonstration, and National 
Studies. Section 115 would make funds available to the 
Secretary of Health and Human Services to conduct and support 
research and demonstration projects and provide technical 
assistance. The funds would be primarily spent on activities to 
promote marriage. The program would be funded at $102 million 
annually over the 2003-2007 period with $2 million set aside 
each year to fund demonstration projects on child welfare 
services to tribal families. Based on rates of spending in 
similar programs, CBO estimates that spending would increase by 
$10 million in 2003 and $410 million over the 2003-2007 period.
    Effect of title 1 provisions on the Food Stamp Program. 
Four provisions of title I would affect the level of funding 
for the TANF program, which in turn could affect the level of 
cash benefits provided under that program. Provisions to 
eliminate the out-of-wedlock birth bonus and reduce the bonus 
for high-performing states would lower funding while provisions 
to extend the supplemental grant and expand the contingency 
fund would increase funding. On balance, those provisions would 
increase funding from 2003 through 2006 and decrease funding in 
2007. CBO expects some of the additional (or reduced) funding 
provided would be used to increase (or decrease) benefits to 
families that also receive food stamps. Additional TANF income 
would reduce Food Stamp benefits, so we expect small savings in 
the Food Stamp program during the 2003-2006 period and small 
costs in 2007, with total savings of $6 million over the five 
years.
    Title II: Child Care. H.R. 4090 would amend the child care 
entitlements to states program by appropriating $2.717 billion 
each year over the 2003-2007 period. CBO already assumes 
funding at that level in its baseline, as required by section 
257 of the Deficit Control Act.
    The child care entitlements to states program provides 
funding to states for child care subsidies to low-income 
families and other activities. This is one of the two federal 
funding programs for child care subsidies within a program 
grouping often referred to as the Child Care and Development 
Fund. Spending for the child care entitlements to states 
program is categorized as mandatory spending. The other 
program, the child care development block grant program, is 
classified as discretionary spending (i.e., subject to annual 
appropriation), but that program is not affected by H.R. 4090.
    Title III: Child Support. H.R. 4090 would change many 
aspects of the operation and financing of the child support 
program (see Table 3). It would allow the distribution to 
families of more collections from child support payments and 
establish a new program of fees. It also would require states 
to periodically update child support orders and expand the use 
of certain enforcement tools.
    Distribution of More Child Support to Families. Sections 
301 and 302 would allow states to share more child support 
collections with current and former recipients of TANF, 
reducing the amount the federal and state governments would 
recoup from previous TANF benefit payments. The bill would 
allow states to implement the new policies beginning in October 
2004.
    Collections for Current TANF Recipients. When a family 
applies for TANF, it assigns to the state any rights the family 
has to child support collections. While the family receives 
assistance, the state uses any collections it receives to 
reimburse itself and the federal government for TANF payments. 
States may choose to give some of the child support collected 
to families, but states must finance those payments out of 
their share of collections.
    Section 301 would allow states to increase the amount of 
child support they pay to families receiving assistance and 
would not require the state to pay the federal government share 
on the increased payments. The payments would be in addition to 
any payments the state was making as of December 31, 2001. The 
bill limits the new payments to the greater of $100 or $50 more 
than the state shares with families now. The state could not 
count the child support as income in determining the families' 
benefit under the TANF program.
    States with about 60 percent of child support collections 
shared some of those collections with the family as of December 
31, 2001. Based on conversations with state child support 
officials and other policy experts, CBO expects that about 20 
percent of those states would choose to increase the amount of 
child support they share with families on assistance. In 
addition, we expect about half of states that currently share 
nothing would institute a policy of sharing the first $50 
collected. Those changes would be instituted slowly and would 
not be fully effective until 2007. Based on administrative data 
for child support, CBO expects that states eventually would 
share about $100 million more with families annually. Using an 
estimated federal share of collections of 55 percent, CBO 
estimates that federal offsetting receipts would fall by $30 
million in 2005 and $135 million over the 2005-2007 period.

  TABLE 3.--DETAILED EFFECTS OF H.R. 4090, THE PERSONAL RESPONSIBILITY, WORK, AND FAMILY PROMOTION ACT OF 2002,
                                                    TITLE III
----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars
                                                    ------------------------------------------------------------
                                                       2003      2004      2005      2006      2007    2003-2007
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING

Section 301:
    Distribute more support to current TANF
     families:
        Estimated budget authority.................         0         0        30        45        60        135
        Estimated outlays..........................         0         0        30        45        60        135
    Effect on food stamps:
        Estimated budget authority.................         0         0       -15       -20       -25        -60
        Estimated outlays..........................         0         0       -15       -20       -25        -60
    Effect on TANF:
        Estimated budget authority.................         0         0         0         0         0          0
        Estimated outlays..........................         0         0         5         9         0         14
    Subtotal, section 301:
        Estimated budget authority.................         0         0        15        25         3         75
        Estimated outlays..........................         0         0        20        34        35         89
Section 302:
    Distribute more support to former TANF famlies:
        Estimated budget authority.................         0         0        75       115       160        350
        Estimated outlays..........................         0         0        75       115       160        350
    Effect on food stamps:
        Estimated budget authority.................         0         0        -5       -10       -15        -30
        Estimated outlays..........................         0         0        -5       -10       -15        -30
    Subtotal, section 302:
        Estimated budget authority.................         0         0        70       105       145        320
        Estimated outlays..........................         0         0        70       105       145        320
Section 303:
    Mandatory 3-year update of child support
     orders:
        Estimated budget authority.................         0         2        14        14        12         42
        Estimated outlays..........................         0         2        14        14        12         42
    Child support collections:
        Estimated budget authority.................         0         0        -6       -14       -20        -40
        Estimated outlays..........................         0         0        -6       -14       -20        -40
    Effect on food stamps:
        Estimated budget authority.................         0         0        -1        -2        -3         -6
        Estimated outlays..........................         0         0        -1        -2        -3         -6
    Effect on Medicaid:
        Estimated budget authority.................         0         0        -3        -8       -13        -24
        Estimated outlays..........................         0         0        -3        -8       -13        -24
        Subtotal, section 303:.....................
        Estimated budget authority.................         0         2         4       -10       -24        -28
        Estimated outlays..........................         0         2         4       -10       -24        -28
Section 304:
    $25 annual fee for never-TANF cases with a
     collection:
        Estimated budget authority.................         2       -42       -45       -47       -48       -180
Estimated outlays                                           2       -42       -45       -47       -48       -180
Section 306:
    Use of new hire directory for unemployment
     compensation:
        Estimated budget authority.................         0       -12       -15       -19       -20        -66
        Estimated outlays..........................         0       -12       -15       -19       -20        -66
Section 308:
    Reduced threshold for passport denial
     collections:
        Estimated budget authority.................         0        -2        -2        -2        -2         -8
                 Estimated outlays                          0        -2        -2        -2        -2         -8
Section 311:
    SSA benefit match:
        Estimated budget authority.................        -3        -6        -7        -7        -8        -31
        Estimated outlays..........................        -3        -6        -7        -7        -8        -31
    Title III total, direct spending:
        Estimated budget authority.................        -1       -60        20        45        78         82
        Estimated outlays..........................        -1       -60        25        54        78         96

                                                    REVENUES
Use of new hire directory for unemployment
 compensation program:
    Estimated revenues.............................         0         0        -2        -6       -12        -20
----------------------------------------------------------------------------------------------------------------

    Because additional child support income would reduce Food 
Stamp benefits, CBO estimates savings in the Food Stamp program 
totaling $15 million in 2005 and $60 million over the 2005-2007 
period. In addition, the provision would have a small effect on 
the rate of TANF spending. States could count new payments of 
child support to families toward their maintenance of effort 
requirement in TANF enabling them to accelerate their use of 
federal TANF funds. Overall, the provision would increase 
estimated TANF outlays by $14 million over the 2003-2007 
period.
    Collections for Former TANF Recipients. When a family 
ceases to receive public assistance, states continue to enforce 
the family's child support order. All amounts of child support 
collected on time are sent directly to the family. However, 
both the government and the family have a claim on collections 
of past-due child support: The government claims the support 
owed for the period when the family was on assistance, up to 
the amount of the assistance paid, and the family claims the 
remainder.
    Under section 302, the state would have the option of 
renouncing its claim on any support collected on behalf of a 
former recipient of TANF. Based on conversations with state 
child support officials and other policy experts, CBO expects 
states with 20 percent of child support collections would be 
interested in sharing all collections with former TANF 
recipients. Those changes would be instituted slowly and would 
not be fully effective until 2007. Based on administrative data 
for child support, CBO expects that states would eventually 
share about $300 million more with families annually. CBO 
estimates that federal offsetting receipts would fall by $75 
million in 2005 and $350 million over the 2005-2007 period. CBO 
expects that one-third of the former TANF recipients with 
increased child support income would participate in the Food 
Stamp program, and that Food Stamp savings would be $5 million 
in 2005 and $30 million over the 2005-2007 period.
    Adjustment of Child Support Orders. Section 303 would 
require states to adjust child support orders of families on 
TANF every three years. States could use one of three methods 
to adjust orders: Full review and adjustment, cost-of-living 
adjustment (COLA), or automated adjustment. Under current law, 
nearly half of states perform periodic adjustments. Most 
perform a full review and the remainder apply a COLA. No state 
currently makes automated adjustments.
    CBO estimates that there are 700,000 TANF recipients with 
child support orders in states that do not periodically adjust 
orders and one-third of those orders would be adjusted each 
year. CBO assumes half the states not already adjusting orders 
would choose to perform full reviews and half would apply a 
COLA.
    Full Review and Adjustment. When a state performs a full 
review of a child support order, it obtains current financial 
information from the custodial and noncustodial parents and 
determines whether any adjustment in the amount of ordered 
child support is indicated. The state also may revise an order 
to require the noncustodial parent to provide health insurance.
    Based on evaluations of review and modification programs, 
CBO estimates the average cost of a review would be about $180 
with the federal government paying 66 percent of such 
administrative costs. The average adjustment to a child support 
order of a family on TANF would be $90 a month and about 18 
percent of the orders reviewed would be adjusted.
    In addition, CBO expects some children would receive health 
insurance coverage from the noncustodial parent as a result of 
the new reviews. CBO estimates 40 percent of orders with a 
monetary adjustment would also be adjusted to include a 
requirement that the noncustodial parent provide health 
insurance for their child and that, in about half of those 
cases, such insurance would be provided. After the first few 
years, we assume newly provided medical insurance would decline 
by half, because many families would have already had such 
insurance recently added to their order.
    Cost-of-Living Adjustment. When a state makes a cost-of-
living adjustment it applies a percentage increase reflecting 
the rise in the cost of living to every order, regardless of 
how the financial circumstances of the individuals may have 
changed. The process is considerably less cumbersome and 
expensive than a full review but also results in smaller 
adjustments on average. Based on recent research on COLA 
programs, CBO estimates that the average cost would be $11 per 
case modified, and the average adjustment to a support order 
would be $6 per month. There would be no additional health 
insurance coverage.
    Summary. Under either method of adjustment, CBO expects any 
increased collections for a family would continue for up to 
three years. While a family remains on TANF, the state would 
keep all the increased collections to reimburse itself and the 
federal government for welfare payments. The states would pay 
any increased collections stemming from reviews of child 
support orders to families once they leave assistance. That 
additional child support income for former recipients would 
result in savings in the Food Stamp program.
    Overall, CBO expects the federal share of child support 
administrative costs to rise by $2 million in 2004, $14 million 
in 2005, and $42 million over the 2004-2007 period. Federal 
collections would increase by $6 million in 2005 and $40 
million over the 2005-2007 period. Finally Food Stamp and 
Medicaid savings would total $6 million and $24 million 
respectively over the 2005-2007 period.
    Fee for Never-TANF Cases. Section 304 would establish a $25 
annual fee for individuals who receive child support services 
and who had at least $500 of collections in a year. The fee 
would be imposed only if the family had never received TANF and 
would be retained out of the child support collected. The 
provision would be effective beginning October 1, 2003.
    Based on administrative data and information from state 
child support officials, CBO assumes three million cases could 
be subject to a fee in 2004 resulting in collections of $75 
million, with the federal government retaining 66 percent. CBO 
reduced those expected collections by 15 percent to account for 
small administrative inefficiencies and fees that are already 
being collected. Based on recent growth levels and trends in 
the program, CBO estimates the federal share of collections 
would total $42 million in 2004 and $182 million over the 2004-
2007 period. In addition, CBO estimates the administrative 
costs to implement a fee system would be $3 million in 2003 and 
the federal government would pay $2 million.
    Use of New Hire Information. Section 306 would allow 
states, beginning in fiscal year 2004, to access information in 
the national database of new hires to help detect fraud in the 
unemployment compensation system. Currently, most states may 
access the information that they send to the national registry. 
However, without access to the national information, a state 
may not receive important data regarding recent hires by 
national corporations that may report in other states. Only a 
few states have examined potential savings that could be 
realized if they had access to the national data, and their 
estimates are small--less than 0.1 percent of total outlays. 
Nevertheless, states generally believe that access to the 
national data would be a valuable tool in detecting fraud 
earlier, as the information on new hires is more current than 
that contained in quarterly wage reports on which many states 
now rely.
    Based on information provided by the National Association 
of State Workforce Agencies, CBO estimates that about 40 
percent of the states would make use of the national 
information in the year that it became available, and that 
another 40 percent would take advantage the national 
information within the next few years. CBO estimates that this 
proposal would result in a reduction of $66 million in spending 
for unemployment compensation over the 2004-2007 period. CBO 
assumes this reduction in spending would lead states to reduce 
their unemployment taxes. CBO estimates that such revenues 
would fall by $20 million over the 2004-2007 period, so the net 
deficit reduction would amount to $46 million over that period.
    Denial of Passports. Under current law, the State 
Department denies a request for a passport for a non-custodial 
parent if he or she owes more than $5,000 in past-due child 
support. Section 307 would lower that threshold and deny a 
passport to a noncustodial parent owing $2,500 or more. 
Generally, when a noncustodial parent seeks to restore 
eligibility for a passport, he or she will arrange to pay the 
past-due amount down to the threshold level.
    The State Department currently denies about 15,000 passport 
requests annually. Data from the Department of Health and Human 
Services shows there are 4.2 million noncustodial parents owing 
more than $5,000 in past-due child support and an additional 
1.0 million owing between $2,500 and $5,000. If noncustodial 
parents owing between $2,500 and $5,000 apply for passports at 
the same rate as those owing more than $5,000, then the 
proposal would generate an additional 3,400 denials annually.
    CBO assumes that 20 percent of noncustodial parents who 
have a passport request denied would make a payment to get 
their passport rather than just doing without one. (In a study 
by the State Department, for 85 percent of applications that 
were denied due to child support arrears, passports were not 
issued within the next three months.) A noncustodial parent 
owing more than $5,000 would have to pay an additional $2,500 
to receive a passport. On average, a noncustodial parent owing 
between $2,500 and $5,000 would have to pay $1,250 to receive a 
passport. As a result, CBO estimates the policy would result in 
new payments of child support of about $8 million annually. 
About one-third of those payments would be on behalf of current 
and former welfare families and would be retained by the 
government as reimbursement for welfare benefits. The federal 
share of such collections would be $2 million a year, beginning 
in fiscal year 2004, and $8 million over the 2004-2007 period.
    Improved Debt Collection: SSA Benefit Match. Section 310 
would allow states to collect past-due child support by 
withholding Social Security, Black Lung, and Railroad 
Retirement payments. Because parents affected by the 
legislation are generally younger than 62, we assume that most 
of them receive benefits under the Disability Insurance (DI) 
program rather than the retirement or survivors programs. The 
Debt Collection Improvement Act of 1996 limits the amount that 
can be withheld annually from an individual's Social Security 
check to the lesser of any amount over $9,000 or 15 percent of 
benefits.
    Based on an analysis done by the Treasury Department, CBO 
estimates that 50,000 beneficiaries a month could be subject to 
an offset. Based on states' current use of administrative 
offsets of other federal programs, we estimate two-thirds of 
those beneficiaries would potentially have their checks offset. 
On average, CBO estimates that the offsets would amount 
annually to $1,700 by 2007 and could potentially yield an 
estimated $57 million in collections for child support from 
Social Security payments.
    CBO estimates that the additional collections under section 
310 would be only 40 percent of the potential collections 
because of several factors. First, some of this money may have 
been collected anyway through other enforcement tools, such as 
offsets currently applied to federal tax refunds. Second, 
noncustodial parents are younger than average DI recipients, 
and younger men receive lower DI benefits than older men. 
Third, children of DI recipients are entitled to a benefit from 
Social Security that averages more than $2,000 annually, and 
somestates consider those benefits in determining the amount of 
child support owed by the noncustodial parent. Fourth, in some cases, 
the estimated offset will exceed the amount of arrears owed. Finally, 
CBO expects a small percentage of all noncustodial parents owing past-
due support would slip through the administrative process.
    The estimated $23 million in child support in 2007 would 
result in a net increase in federal offsetting receipts of 
about $8 million. The estimate assumes 60 percent of 
collections would be on behalf of families that received or 
formerly received cash assistance from TANF. The federal share 
of TANF collections is 55 percent.
    The provision would be effective October 1, 2002, but CBO 
assumes that the program would take several months to 
establish. Increases in DI benefits would result in higher 
offsetting receipts over time, rising from $6 million in 2004 
to $8 million in 2007, totaling $31 million over the 2003-2007 
period. Receipts from offsets of Black Lung and Railroad 
Retirement benefits would be insignificant.
    Title V: Supplemental Security Income. Title V would 
require the Social Security Administration to conduct reviews 
of initial decisions to award SSI benefits to certain disabled 
adults. The legislation mandates that the agency review at 
least 20 percent of all favorable adult disability 
determinations made by state-level Disability Determination 
Service (DDS) offices in 2003. Under the legislation, the 
agency must review at least 40 percent of the adult disability 
awards made in 2004 and at least half of the awards granted in 
2005 and beyond.
    CBO anticipates state DDS offices will approve between 
350,000 and 400,000 adult disability applications for SSI 
benefits annually between 2003 and 2007. Based on recent data 
for comparable reviews in the Social Security Disability 
Insurance program. CBO projects that, by 2007, nearly 6,000 DDS 
awards will have been ultimately overturned, resulting in lower 
outlays for SSI and Medicaid (in most states, SSI eligibility 
automatically confers entitlement to Medicaid benefits). CBO 
estimates that title V would reduce SSI benefits by $1 million 
and Medicaid outlays by $2 million in 2003. Over the 2003-2007 
period, CBO estimates this provision would lower outlays by $53 
million and $107 million for SSI and Medicaid, respectively.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays and governmental receipts that are subject 
to pay-as-you-go procedures are shown in the following table. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects through fiscal year 2006 are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          By fiscal year, in millions of dollars
                                                                 ---------------------------------------------------------------------------------------
                                                                   2002    2003    2004    2005    2006    2007    2008    2009    2010    2011    2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays..............................................       0     320     273     257     226     107      16      31      29      -1     -12
Changes in receipts.............................................       0       0       0      -2      -6     -12     -15     -17     -20     -20     -21
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
Generally, conditions of federal assistance are not considered 
intergovernmental mandates as defined in the Unfunded Mandates 
Reform Act. However, UMRA makes special provisions for 
identifying intergovernmental mandates in large entitlement 
grant programs (those that provide more than $500 million 
annually to state, local, or tribal governments), including 
TANF. Specifically, if a legislative proposal would increase 
the stringency of conditions of assistance, or cap or decrease 
the amount of federal funding for the program, such a change 
would be considered an intergovernmental mandate only if the 
state, local or tribal government lacks authority to amend its 
financial or programmatic responsibilities to continue 
providing required services.
    The TANF program affords states broad flexibility to 
determine eligibility for benefits and to structure the 
programs offered as part of the state's family assistance 
program. Changes to the program as embodied in H.R. 4090 could 
alter the way in which states administer the program and 
provide benefits. However, states would continue to be able to 
make changes, for example adjusting eligibility criteria or the 
structure of programs, to avoid or offset any additional costs. 
Because the TANF program affords states such broad flexibility, 
new requirements would not be considered intergovernmental 
mandates as defined by UMRA.
    The bill would provide additional funding and flexibility 
to states and tribes, but it also would impose stricter 
requirements and decrease grants in some areas. The bill would 
maintain TANF funding at the fiscal year 2002 level through 
fiscal year 2007 and increase the amount of TANF funding that 
could be used for other social services and child care and 
broaden the ability of states and tribes to spend unused TANF 
funds in future years. At the same time, however, it would 
increase work participation requirements, change the basis for 
caseload reduction credits, and reduce bonus grants.
    TANF Grants and Program Flexibility. The bill would 
continue TANF funding at the 2002 level. It also would continue 
a supplemental grant totaling $319 million annuallythrough 
fiscal year 2006 for states with relatively low welfare spending per 
poor person and relatively high population growth.
    The bill would make it easier for states to qualify for 
assistance from the TANF Contingency fund during recessions and 
allow them to receive reimbursement for certain child care 
expenditures. The bill also would increase from 30 percent to 
50 percent the amount of TANF funds that could be transferred 
for Social Services Block Grant or Child Care and Development 
Block Grant purposes and would increase the limit of funds that 
may be specifically used for SSBG purposes from 4.25 percent to 
10 percent. Finally, the bill would allow states and tribes to 
use excess TANF funds for services, not just benefits, provided 
under the TANF program in future years.
    Child Support. The bill would require states to conduct a 
mandatory review of child support cases every three years, 
resulting in some level of net savings to states as a result of 
identifying noncustodial parents who owe child support. If 
states distribute to families the portion of child support 
collections that they otherwise would retain as reimbursement 
for benefits and services, this bill would allow them to 
similarly distribute the federal portion.
    Demonstration Projects and Waivers. The bill would extend 
demonstration projects related to children and family services 
and foster care, and it also would eliminate the limit on the 
number of states that may receive grants for such demonstration 
projects. The bill would authorize state demonstration projects 
for integrating TANF and other social service programs and 
allow waivers to be granted by the appropriate Secretary and 
the Director of the Office of Management and Budget.
    Work Participation. The bill would increase the minimum 
work participation rate from 50 percent to 70 percent over a 
five-year period. To meet those requirements, 70 percent of 
families would have to be engaged in work activities for at 
least 24 hours a week by 2007. Current law requires a recipient 
to be engaged in work activities for at least 20 hours per 
week, and there is a 50 percent participation requirement. The 
increase of 4 hours per week could require a modest increase in 
spending by states and tribes for administration, worker 
support activities, and child care. As the participation rates 
increase, states and tribes would have to direct more resources 
toward programs such as administrative support, transportation 
assistance, child care, and worker supervision to comply with 
the 70 percent requirement. CBO estimates that the costs of the 
work participation requirements would total about $3 billion in 
2007 (and about $8 billion over the 2003-2007 period), assuming 
that caseloads remain around the current level.
    While the bill would require a participant to engage in 
work activities for an average of 24 hours per week, it also 
would require 16 additional hours of participation in other 
qualified activities. The bill does not specify the activities 
that could count for the final 16 hours, but the Secretary 
could limit these allowed activities in future regulation. If 
states were required to support activities in the 16 hours that 
are comparable in intensity to those in the first 24 hours, the 
estimated cost would rise to about $4 billion in 2007 (and 
about $10 billion over the 2003-2007 period), assuming that 
caseloads remain around the current level.
    Costs of this magnitude would result if states do not act 
to avoid the tougher requirements by moving families to 
separate state programs or averting the requirements by some 
other means. In fact, CBO expects that states will move many 
nonworking families into separate state programs to reduce the 
work requirements and avoid financial penalties.
    The bill also would change the calculation of worker 
participation credits for states whose caseload levels have 
declined significantly, assuming the reduction is not the 
result of changing eligibility requirements. The base year for 
comparison of caseloads would shift forward over time, rather 
than remaining static at the 1995 level. States that have 
experienced caseload reductions of 60 percent or more between 
1995 and 2001 may qualify for a superachiever state credit that 
would further reduce their minimum participation levels. This 
credit could offset the impact of stricter work requirements 
for qualified states.
    Bonus Grants. The bill would eliminate an authorization for 
bonus grants to states that decrease out-of-wedlock births (up 
to $100 million authorized through 2002), but it also would 
appropriate $100 million annually for Healthy Marriage 
Promotion grants. The bill would reduce by half (from $200 
million to $100 million annually) bonus performance grants and 
refocus the basis of their award after 2003 to employment 
entry, retention, and increased earnings.
    Estimated impact on the private sector: H.R. 4090 contains 
no private-sector mandates as defined in UMRA.
    Previous CBO Estimate: On May 9, 2002, CBO transmitted a 
cost estimate for H.R. 4092, as ordered reported by the House 
Committee on Education and the Workforce on May 2, 2002. That 
bill contains similar provisions on work participation 
requirements in TANF and the Bonus to Reward Employment 
Achievement. The difference in CBO's estimates of those 
provisions reflect slight differences in the two bills.
    Estimate prepared by: Federal costs: Sheila Dacey--TANF and 
Child Support; Christina Sadoti--Unemployment Compensation and 
Child Welfare; Donna Wong--Child Care; Geoffrey Gerhardt--
Supplemental Security Income.
    Impact on State, local, and tribal governments: Leo Lex.
    Impact on the private sector: Kate Bloniarz.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
Committee bill results in direct spending of $1.2 billion over 
5 years and a decrease in revenues of $20 million over 5 years. 
This amount is accommodated by the allocation to the Committee 
under the Budget Resolution.

 V. OTHER MATTERS REQUIRED TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

 A. Committee Matters Required To Be Discussed Under the Rules of the 
                                 House

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
need for this legislation was confirmed by the oversight 
hearings of the Subcommittee on Human Resources. The hearings 
were as follows:
    The Committee on Ways and Means held a hearing on March 12, 
2002 to receive comments on the President's Plan to Build on 
the Successes of Welfare Reform. Testimony at the hearing was 
presented by Tommy Thompson, Secretary of the U.S. Department 
of Health and Human Services. Secretary Thompson also testified 
before the Committee on February 6, 2002 on the President's 
2003 Budget Proposals, with a focus on welfare issues. On March 
14, 2002, the Committee also held a hearing on the 
Administration's Health and Welfare Priorities (Serial 107-2)
    The Subcommittee on Human Resources held a hearing on April 
11, 2002 to receive comments on the welfare reform 
reauthorization proposals. Testimony at the hearing was 
presented by the Administration and a total of 48 other program 
administrators, advocates, researchers, and Members of the U.S. 
House of Representatives. On April 2, 2002, the Committee 
conducted a field hearing in University Center, Michigan on 
Welfare Reform Success, which included testimony from Michigan 
Governor John Engler, a welfare program administrator, former 
welfare recipients, and an employer who has hired a number of 
former recipients to work for his company. On March 7, 2002, 
the Committee held a hearing on Implementation of Welfare 
Reform Work Requirements and Time Limits. Several hearings also 
were held earlier in the 107th Congress on welfare reform 
topics including Teen Pregnancy Prevention, Child Support and 
Fatherhood Proposals, Welfare and Marriage Issues, and Effects 
of the 1996 Welfare Reform Law. In the 106th Congress, the 
Committee held a number of hearings on welfare issues: April 
27, 1999 on Fatherhood (Serial 106-41); May 27, 1999 on the 
Effects of Welfare Reform (Serial 106-9); November 15, 1999 
field hearing in Erie, Pennsylvania on Welfare Reform (Serial 
106-47); February 14, 2000 field hearing in Baltimore, Maryland 
on Welfare Reform (Serial 106-87); February 27, 2000 on the 
Child Protection Review System (Serial 106-84); March 23, 2000 
on Child Protection Issues (Serial 106-63); and July 20, 2000 
on Increasing State Flexibility in Use of Federal Child 
Protection Funds (Serial 106-98). Throughout the hearings, 
testimony was presented by Administration officials, academic 
witnesses, researchers, program administrators, and advocacy 
groups.

         B. Summary of General Performance Goals and Objectives

    In compliance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee states that H.R. 
4090 reauthorizes and makes improvements to the Temporary 
Assistance for Needy Families program and other programs within 
the Committee's jurisdiction. Through reporting requirements in 
the legislation, Congress and the Administration will be able 
to assess State achievement of specified TANF program goals of: 
(1) providing assistance and services to needy families so that 
children may live in their homes or those of relatives; (2) 
ending dependence of needy families on government benefits and 
reducing poverty by promoting job preparation, work and 
marriage; (3) reducing out-of-wedlock pregnancies; and (4) 
encouraging the formation and maintenance of healthy, two-
parent married families and encourage responsible fatherhood.

                 C. Constitutional Authority Statement

    In compliance with clause 3(d)(1) of rule XIII of the Rules 
of the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * * '').

              D. Information Relating to Unfunded Mandates

    This information is provided in accordance with Section 423 
of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4). 
According to the report of the Congressional Budget Office 
dated May 13, 2002: ``The TANF grant program affords states 
broad flexibility to determine eligibility for benefits and to 
structure the programs offered as part of a state's family 
assistance program. Consequently, any new requirements to the 
program as proposed by H.R. 4090 would not be intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act 
(UMRA).'' (Page 1)

       VI. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

SOCIAL SECURITY ACT

           *       *       *       *       *       *       *

TITLE IV--GRANTS TO STATES FOR AID AND SERVICES TO NEEDY FAMILIES WITH 
                CHILDREN AND FOR CHILD-WELFARE SERVICES

   PART A--BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY 
                                FAMILIES

SEC. 401. PURPOSE.

  (a) In General.--The purpose of this part is to [increase] 
improve child well-being by increasing the flexibility of 
States in operating a program designed to--
          (1) provide assistance and services to needy families 
        so that children may be cared for in their own homes or 
        in the homes of relatives;
          (2) end the dependence of needy [parents on 
        government benefits] families on government benefits 
        and reduce poverty by promoting job preparation, work, 
        and marriage;

           *       *       *       *       *       *       *

          (4) encourage the formation and maintenance of [two-
        parent families] healthy, 2-parent married families, 
        and encourage responsible fatherhood.

           *       *       *       *       *       *       *

SEC. 402. ELIGIBLE STATES; STATE PLAN.

  (a) In General.--As used in this part, the term ``eligible 
State'' means, with respect to a fiscal year, a State that, 
during the 27-month period ending with the close of the 1st 
quarter of the fiscal year, has submitted to the Secretary a 
plan that the Secretary has found includes the following:
          (1) Outline of family assistance program.--
                  (A) General provisions.--A written document 
                that outlines how the State intends to do the 
                following:
                          (i) * * *
                          [(ii) Require a parent or caretaker 
                        receiving assistance under the program 
                        to engage in work (as defined by the 
                        State) once the State determines the 
                        parent or caretaker is ready to engage 
                        in work, or once the parent or 
                        caretaker has received assistance under 
                        the program for 24 months (whether or 
                        not consecutive), whichever is earlier, 
                        consistent with section 407(e)(2).
                          [(iii) Ensure that parents and 
                        caretakers receiving assistance under 
                        the program engage in work activities 
                        in accordance with section 407.]
                          (ii) Require a parent or caretaker 
                        receiving assistance under the program 
                        to engage in work or alternative self-
                        sufficiency activities (as defined by 
                        the State), consistent with section 
                        407(e)(2).
                          (iii) Require families receiving 
                        assistance under the program to engage 
                        in activities in accordance with family 
                        self-sufficiency plans developed 
                        pursuant to section 408(b).

           *       *       *       *       *       *       *

                          [(v) Establish goals and take action 
                        to prevent and reduce the incidence of 
                        out-of-wedlock pregnancies, with 
                        special emphasis on teenage 
                        pregnancies, and establish numerical 
                        goals for reducing the illegitimacy 
                        ratio of the State (as defined in 
                        section 403(a)(2)(C)(iii)) for calendar 
                        years 1996 through 2005.]
                          (v) Establish annual, specific 
                        numerical performance goals, measures, 
                        measurement methodology, and plans to 
                        improve outcomes with respect to each 
                        of the 4 program purposes described in 
                        section 401(a).
                          (vi) Describe any strategies the 
                        State may be undertaking to address--
                                  (I) employment retention and 
                                advancement for recipients of 
                                assistance under the program, 
                                including placement into high-
                                demand jobs, consistent with 
                                the criteria used by the 
                                Secretary in establishing 
                                performance targets in 
                                regulations prescribed under 
                                section 403(a)(4)(B);
                                  (II) efforts to reduce teen 
                                pregnancy;
                                  (III) services for struggling 
                                and noncompliant families, and 
                                for clients with special 
                                problems; and
                                  (IV) program integration, 
                                including the extent to which 
                                employment and training 
                                services under the program are 
                                provided through the One-Stop 
                                Career Center System created 
                                under the Workforce Investment 
                                Act of 1998, and the extent to 
                                which former recipients of such 
                                assistance have access to 
                                additional core, intensive, or 
                                training services funded 
                                through such Act.
                          [(vi)] (vii) Conduct a program, 
                        designed to reach State and local law 
                        enforcement officials, the education 
                        system, and relevant counseling 
                        services, that provides education and 
                        training on the problem of statutory 
                        rape so that teenage pregnancy 
                        prevention programs may be expanded in 
                        scope to include men.
                          (viii) Encourage equitable treatment 
                        of married, 2-parent families under the 
                        program referred to in clause (i).
                  (B) Special provisions.--
                          [(i) The document shall indicate 
                        whether the State intends to treat 
                        families moving into the State from 
                        another State differently than other 
                        families under the program, and if so, 
                        how the State intends to treat such 
                        families under the program.]
                          [(ii)] (i) The document shall 
                        indicate whether the State intends to 
                        provide assistance under the program to 
                        individuals who are not citizens of the 
                        United States, and if so, shall include 
                        an overview of such assistance.
                          [(iii)] (ii) The document shall set 
                        forth objective criteria for the 
                        delivery of benefits and the 
                        determination of eligibility and for 
                        fair and equitable treatment, including 
                        an explanation of how the State will 
                        provide opportunities for recipients 
                        who have been adversely affected to be 
                        heard in a State administrative or 
                        appeal process.
                          [(iv) Not later than 1 year after the 
                        date of enactment of this section, 
                        unless the chief executive officer of 
                        the State opts out of this provision by 
                        notifying the Secretary, a State shall, 
                        consistent with the exception provided 
                        in section 407(e)(2), require a parent 
                        or caretaker receiving assistance under 
                        the program who, after receiving such 
                        assistance for 2 months is not exempt 
                        from work requirements and is not 
                        engaged in work, as determined under 
                        section 407(c), to participate in 
                        community service employment, with 
                        minimum hours per week and tasks to be 
                        determined by the State.]
                          (iii) The document shall describe 
                        strategies and programs the State is 
                        undertaking to engage religious 
                        organizations in the provision of 
                        services funded under this part and 
                        efforts related to section 104 of the 
                        Personal Responsibility and Work 
                        Opportunity Reconcilation Act of 1996.
                          (iv) The document shall describe 
                        strategies to improve program 
                        management and performance.

           *       *       *       *       *       *       *

          (4) Certification of the administration of the 
        program.--A certification by the chief executive 
        officer of the State specifying which State agency or 
        agencies will administer and supervise the program 
        referred to in paragraph (1) for the fiscal year, which 
        shall include assurances that local and tribal 
        governments and private sector organizations--
                  (A) * * *

           *       *       *       *       *       *       *

SEC. 403. GRANTS TO STATES.

  (a) Grants.--
          (1) Family assistance grant.--
                  (A) In general.--Each eligible State shall be 
                entitled to receive from the Secretary, for 
                each of fiscal years [1996, 1997, 1998, 1999, 
                2000, 2001, and 2002] 2003 through 2007, a 
                grant in an amount equal to the State family 
                assistance grant payable to the State for the 
                fiscal year.
                  [(B) State family assistance grant defined.--
                As used in this part, the term ``State family 
                assistance grant'' means the greatest of--
                          [(i) \1/3\ of the total amount 
                        required to be paid to the State under 
                        former section 403 (as in effect on 
                        September 30, 1995) for fiscal years 
                        1992, 1993, and 1994 (other than with 
                        respect to amounts expended by the 
                        State for child care under subsection 
                        (g) or (i) of former section 402 (as so 
                        in effect));
                          [(ii)(I) the total amount required to 
                        be paid to the State under former 
                        section 403 for fiscal year 1994 (other 
                        than with respect to amounts expended 
                        by the State for child care under 
                        subsection (g) or (i) of former section 
                        402 (as so in effect)); plus
                          [(II) an amount equal to 85 percent 
                        of the amount (if any) by which the 
                        total amount required to be paid to the 
                        State under former section 403(a)(5) 
                        for emergency assistance for fiscal 
                        year 1995 exceeds the total amount 
                        required to be paid to the State under 
                        former section 403(a)(5) for fiscal 
                        year 1994, if, during fiscal year 1994 
                        or 1995, the Secretary approved under 
                        former section 402 an amendment to the 
                        former State plan with respect to the 
                        provision of emergency assistance; or
                          [(iii) \4/3\ of the total amount 
                        required to be paid to the State under 
                        former section 403 (as in effect on 
                        September 30, 1995) for the 1st 3 
                        quarters of fiscal year 1995 (other 
                        than with respect to amounts expended 
                        by the State under the State plan 
                        approved under part F (as so in effect) 
                        or for child care under subsection (g) 
                        or (i) of former section 402 (as so in 
                        effect)), plus the total amount 
                        required to be paid to the State for 
                        fiscal year 1995 under former section 
                        403(l) (as so in effect).
                  [(C) Total amount required to be paid to the 
                state under former section 403 defined.--As 
                used in this part, the term ``total amount 
                required to be paid to the State under former 
                section 403'' means, with respect to a fiscal 
                year--
                          [(i) in the case of a State to which 
                        section 1108 does not apply, the sum 
                        of--
                                  [(I) the Federal share of 
                                maintenance assistance 
                                expenditures for the fiscal 
                                year, before reduction pursuant 
                                to subparagraph (B) or (C) of 
                                section 403(b)(2) (as in effect 
                                on September 30, 1995), as 
                                reported by the State on ACF 
                                Form 231;
                                  [(II) the Federal share of 
                                administrative expenditures 
                                (including administrative 
                                expenditures for the 
                                development of management 
                                information systems) for the 
                                fiscal year, as reported by the 
                                State on ACF Form 231;
                                  [(III) the Federal share of 
                                emergency assistance 
                                expenditures for the fiscal 
                                year, as reported by the State 
                                on ACF Form 231;
                                  [(IV) the Federal share of 
                                expenditures for the fiscal 
                                year with respect to child care 
                                pursuant to subsections (g) and 
                                (i) of former section 402 (as 
                                in effect on September 30, 
                                1995), as reported by the State 
                                on ACF Form 231; and
                                  [(V) the Federal obligations 
                                made to the State under section 
                                403 for the fiscal year with 
                                respect to the State program 
                                operated under part F (as in 
                                effect on September 30, 1995), 
                                as determined by the Secretary, 
                                including additional 
                                obligations or reductions in 
                                obligations made after the 
                                close of the fiscal year; and
                          [(ii) in the case of a State to which 
                        section 1108 applies, the lesser of--
                                  [(I) the sum described in 
                                clause (i); or
                                  [(II) the total amount 
                                certified by the Secretary 
                                under former section 403 (as in 
                                effect during the fiscal year) 
                                with respect to the territory.
                  [(D) Information to be used in determining 
                amounts.--
                          [(i) For fiscal years 1992 and 
                        1993.--
                                  [(I) In determining the 
                                amounts described in subclauses 
                                (I) through (IV) of 
                                subparagraph (C)(i) for any 
                                State for each of fiscal years 
                                1992 and 1993, the Secretary 
                                shall use information available 
                                as of April 28, 1995.
                                  [(II) In determining the 
                                amount described in 
                                subparagraph (C)(i)(V) for any 
                                State for each of fiscal years 
                                1992 and 1993, the Secretary 
                                shall use information available 
                                as of January 6, 1995.
                          [(ii) For fiscal year 1994.--In 
                        determining the amounts described in 
                        subparagraph (C)(i) for any State for 
                        fiscal year 1994, the Secretary shall 
                        use information available as of April 
                        28, 1995.
                          [(iii) For fiscal year 1995.--
                                  [(I) In determining the 
                                amount described in 
                                subparagraph (B)(ii)(II) for 
                                any State for fiscal year 1995, 
                                the Secretary shall use the 
                                information which was reported 
                                by the States and estimates 
                                made by the States with respect 
                                to emergency assistance 
                                expenditures and was available 
                                as of August 11, 1995.
                                  [(II) In determining the 
                                amounts described in subclauses 
                                (I) through (III) of 
                                subparagraph (C)(i) for any 
                                State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of October 2, 
                                1995.
                                  [(III) In determining the 
                                amount described in 
                                subparagraph (C)(i)(IV) for any 
                                State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of February 28, 
                                1996.
                                  [(IV) In determining the 
                                amount described in 
                                subparagraph (C)(i)(V) for any 
                                State for fiscal year 1995, the 
                                Secretary shall use information 
                                available as of October 5, 
                                1995.
                  [(E) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1996, 1997, 1998, 1999, 2000, 2001, and 
                2002 such sums as are necessary for grants 
                under this paragraph.
          [(2) Bonus to reward decrease in illegitimacy 
        ratio.--
                  [(A) In general.--Each eligible State shall 
                be entitled to receive from the Secretary a 
                grant for each bonus year.
                  [(B) Amount of grant.--
                          [(i) In general.--If, for a bonus 
                        year, none of the eligible States is 
                        Guam, the Virgin Islands, or American 
                        Samoa, then the amount of the grant 
                        shall be--
                                  [(I) $20,000,000 if there are 
                                5 eligible States; or
                                  [(II) $25,000,000 if there 
                                are fewer than 5 eligible 
                                States.
                          [(ii) Amount if certain territories 
                        are eligible.--If, for a bonus year, 
                        Guam, the Virgin Islands, or American 
                        Samoa is an eligible State, then the 
                        amount of the grant shall be--
                                  [(I) in the case of such a 
                                territory, 25 percent of the 
                                mandatory ceiling amount (as 
                                defined in section 1108(c)(4)) 
                                with respect to the territory; 
                                and
                                  [(II) in the case of a State 
                                that is not such a territory--
                                          [(aa) if there are 5 
                                        eligible States other 
                                        than such territories, 
                                        $20,000,000, minus \1/
                                        5\ of the total amount 
                                        of the grants payable 
                                        under this paragraph to 
                                        such territories for 
                                        the bonus year; or
                                          [(bb) if there are 
                                        fewer than 5 such 
                                        eligible States, 
                                        $25,000,000, or such 
                                        lesser amount as may be 
                                        necessary to ensure 
                                        that the total amount 
                                        of grants payable under 
                                        this paragraph for the 
                                        bonus year does not 
                                        exceed $100,000,000.
                  [(C) Definitions.--As used in this paragraph:
                          [(i) Eligible state.--
                                  [(I) In general.--The term 
                                ``eligible State'' means a 
                                State that the Secretary 
                                determines meets the following 
                                requirements:
                                          [(aa) The State 
                                        demonstrates that the 
                                        illegitimacy ratio of 
                                        the State for the most 
                                        recent 2-year period 
                                        for which such 
                                        information is 
                                        available decreased as 
                                        compared to the 
                                        illegitimacy ratio of 
                                        the State for the 
                                        previous 2-year period, 
                                        and the magnitude of 
                                        the decrease for the 
                                        State for the period is 
                                        not exceeded by the 
                                        magnitude of the 
                                        corresponding decrease 
                                        for 5 or more other 
                                        States for the period. 
                                        In the case of a State 
                                        that is not a territory 
                                        specified in 
                                        subparagraph (B), the 
                                        comparative magnitude 
                                        of the decrease for the 
                                        State shall be 
                                        determined without 
                                        regard to the magnitude 
                                        of the corresponding 
                                        decrease for any such 
                                        territory.
                                          [(bb) The rate of 
                                        induced pregnancy 
                                        terminations in the 
                                        State for the calendar 
                                        year for which the most 
                                        recent data are 
                                        available is less than 
                                        the rate of induced 
                                        pregnancy terminations 
                                        in the State for 
                                        calendar year 1995.
                                  [(II) Disregard of changes in 
                                data due to changed reporting 
                                methods.--In making the 
                                determination required by 
                                subclause (I), the Secretary 
                                shall disregard--
                                          [(aa) any difference 
                                        between the 
                                        illegitimacy ratio of a 
                                        State for a fiscal year 
                                        and the illegitimacy 
                                        ratio of a State for 
                                        fiscal year 1995 which 
                                        is attributable to a 
                                        change in State methods 
                                        of reporting data used 
                                        to calculate the 
                                        illegitimacy ratio; and
                                          [(bb) any difference 
                                        between the rate of 
                                        induced pregnancy 
                                        terminations in a State 
                                        for a calendar year and 
                                        such rate for calendar 
                                        year 1995 which is 
                                        attributable to a 
                                        change in State methods 
                                        of reporting data used 
                                        to calculate such rate.
                          [(ii) Bonus year.--The term ``bonus 
                        year'' means calendar years 1999, 2000, 
                        2001, and 2002.
                          [(iii) Illegitimacy ratio.--The term 
                        ``illegitimacy ratio'' means, with 
                        respect to a State and a period--
                                  [(I) the number of out-of-
                                wedlock births to mothers 
                                residing in the State that 
                                occurred during the period; 
                                divided by
                                  [(II) the number of births to 
                                mothers residing in the State 
                                that occurred during the 
                                period.
                  [(D) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1999 through 2002, such sums as are 
                necessary for grants under this paragraph.]
                  (B) State family assistance grant.--The State 
                family assistance grant payable to a State for 
                a fiscal year shall be the amount that bears 
                the same ratio to the amount specified in 
                subparagraph (C) of this paragraph as the 
                amount required to be paid to the State under 
                this paragraph for fiscal year 2002 (determined 
                without regard to any reduction pursuant to 
                section 412(a)(1)) bears to the total amount 
                required to be paid under this paragraph for 
                fiscal year 2002.
                  (C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each 
                of fiscal years 2003 through 2007 
                $16,566,542,000 for grants under this 
                paragraph.
          (2) Healthy marriage promotion grants.--
                  (A) Authority.--The Secretary shall award 
                competitive grants to States, territories, and 
                tribal organizations for not more than 50 
                percent of the cost of developing and 
                implementing innovative programs to promote and 
                support healthy, married, 2-parent families.
                  (B) Healthy marriage promotion activities.--
                Funds provided under subparagraph (A) shall be 
                used to support any of the following programs 
                or activities:
                          (i) Public advertising campaigns on 
                        the value of marriage and the skills 
                        needed to increase marital stability 
                        and health.
                          (ii) Education in high schools on the 
                        value of marriage, relationship skills, 
                        and budgeting.
                          (iii) Marriage education, marriage 
                        skills, and relationship skills 
                        programs, including parenting skills, 
                        financial management, conflict 
                        resolution, and job and career 
                        advancement, for non-married pregnant 
                        women and non-married expectant 
                        fathers.
                          (iv) Pre-marital education and 
                        marriage skills training for engaged 
                        couples and for couples interested in 
                        marriage.
                          (v) Marriage enhancement and marriage 
                        skills training programs for married 
                        couples.
                          (vi) Divorce reduction programs that 
                        teach relationship skills.
                          (vii) Marriage mentoring programs 
                        which use married couples as role 
                        models and mentors in at-risk 
                        communities.
                          (viii) Programs to reduce the 
                        disincentives to marriage in means-
                        tested aid programs, if offered in 
                        conjunction with any activity described 
                        in this subparagraph.
                  (C) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for each 
                of fiscal years 2003 through 2007 $100,000,000 
                for grants under this paragraph.
          (3) Supplemental grant for population increases in 
        certain states.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) Reauthorization [of grants for fiscal 
                year 2002].--Notwithstanding any other 
                provision of this paragraph--
                          (i) any State that was a qualifying 
                        State under this paragraph for fiscal 
                        year 2001 or any prior fiscal year 
                        shall be entitled to receive from the 
                        Secretary for [fiscal year 2002] each 
                        of fiscal years 2002 through 2006 a 
                        grant in an amount equal to the amount 
                        required to be paid to the State under 
                        this paragraph for the most recent 
                        fiscal year in which the State was a 
                        qualifying State;
                          (ii) subparagraph (G) shall be 
                        applied as if ``[2002] 2006'' were 
                        substituted for ``2001''; and
                          (iii) out of any money in the 
                        Treasury of the United States not 
                        otherwise appropriated, there are 
                        appropriated for [fiscal year 2002] 
                        each of fiscal years 2002 through 2006 
                        such sums as are necessary for grants 
                        under this subparagraph.
          (4) Bonus to reward [high performance states] 
        employment achievement.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) Scoring of state performance; setting of 
                performance thresholds.--For each bonus year, 
                the Secretary shall--
                          (i) * * *
                          (ii) prescribe a performance 
                        threshold in such a manner so as to 
                        ensure that--
                                  (I) the average annual total 
                                amount of grants to be made 
                                under this paragraph for each 
                                bonus year [equals 
                                $200,000,000] (other than 2003) 
                                equals $200,000,000, and for 
                                bonus year 2003 equals 
                                $100,000,000; and
                                  (II) the total amount of 
                                grants to be made under this 
                                paragraph for all bonus years 
                                equals [$1,000,000,000] 
                                $900,000,000.

           *       *       *       *       *       *       *

                  (F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1999 through 2003 [$1,000,000,000] 
                $900,000,000 for grants under this paragraph.

           *       *       *       *       *       *       *

 [Effective on October 1, 2003, section 105(b)(1) of H.R. 4090 strikes 
subparagraphs (A) through (F) and inserts subparagraphs (A) through (G) 
     of section 403(a)(4) of the Social Security Act, shown below.]

                  [(A) In general.--The Secretary shall make a 
                grant pursuant to this paragraph to each State 
                for each bonus year for which the State is a 
                high performing State.
                  [(B) Amount of grant.--
                          [(i) In general.--Subject to clause 
                        (ii) of this subparagraph, the 
                        Secretary shall determine the amount of 
                        the grant payable under this paragraph 
                        to a high performing State for a bonus 
                        year, which shall be based on the score 
                        assigned to the State under 
                        subparagraph (D)(i) for the fiscal year 
                        that immediately precedes the bonus 
                        year.
                          [(ii) Limitation.--The amount payable 
                        to a State under this paragraph for a 
                        bonus year shall not exceed 5 percent 
                        of the State family assistance grant.
                  [(C) Formula for measuring state 
                performance.--Not later than 1 year after the 
                date of the enactment of the Personal 
                Responsibility and Work Opportunity 
                Reconciliation Act of 1996, the Secretary, in 
                consultation with the National Governors' 
                Association and the American Public Welfare 
                Association, shall develop a formula for 
                measuring State performance in operating the 
                State program funded under this part so as to 
                achieve the goals set forth in section 401(a).
                  [(D) Scoring of state performance; setting of 
                performance thresholds.--For each bonus year, 
                the Secretary shall--
                          [(i) use the formula developed under 
                        subparagraph (C) to assign a score to 
                        each eligible State for the fiscal year 
                        that immediately precedes the bonus 
                        year; and
                          [(ii) prescribe a performance 
                        threshold in such a manner so as to 
                        ensure that--
                                  [(I) the average annual total 
                                amount of grants to be made 
                                under this paragraph for each 
                                bonus year equals $200,000,000; 
                                and
                                  [(II) the total amount of 
                                grants to be made under this 
                                paragraph for all bonus years 
                                equals $1,000,000,000.
                  [(E) Definitions.--As used in this paragraph:
                          [(i) Bonus year.--The term ``bonus 
                        year'' means fiscal years 1999, 2000, 
                        2001, 2002, and 2003.
                          [(ii) High performing state.--The 
                        term ``high performing State'' means, 
                        with respect to a bonus year, an 
                        eligible State whose score assigned 
                        pursuant to subparagraph (D)(i) for the 
                        fiscal year immediately preceding the 
                        bonus year equals or exceeds the 
                        performance threshold prescribed under 
                        subparagraph (D)(ii) for such preceding 
                        fiscal year.
                  [(F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 1999 through 2003 $1,000,000,000 for 
                grants under this paragraph.]
                  (A) In general.--The Secretary shall make a 
                grant pursuant to this paragraph to each State 
                for each bonus year for which the State is an 
                employment achievement State.
                  (B) Amount of grant.--
                          (i) In general.--Subject to clause 
                        (ii) of this subparagraph, the 
                        Secretary shall determine the amount of 
                        the grant payable under this paragraph 
                        to an employment achievement State for 
                        a bonus year, which shall be based on 
                        the performance of the State as 
                        determined under subparagraph (D)(i) 
                        for the fiscal year that immediately 
                        precedes the bonus year.
                          (ii) Limitation.--The amount payable 
                        to a State under this paragraph for a 
                        bonus year shall not exceed 5 percent 
                        of the State family assistance grant.
                  (C) Formula for measuring state 
                performance.--
                          (i) In general.--Subject to clause 
                        (ii), not later than October 1, 2003, 
                        the Secretary, in consultation with the 
                        National Governors Association, the 
                        American Public Human Services 
                        Association, and the National 
                        Conference of State Legislatures, shall 
                        develop a formula for measuring State 
                        performance in operating the State 
                        program funded under this part so as to 
                        achieve the goals of employment entry, 
                        job retention, and increased earnings 
                        from employment for families receiving 
                        assistance under the program, as 
                        measured on an absolute basis and on 
                        the basis of improvement in State 
                        performance.
                          (ii) Special rule for bonus year 
                        2004.--For the purposes of awarding a 
                        bonus under this paragraph for bonus 
                        year 2004, the Secretary may measure 
                        the performance of a State in fiscal 
                        year 2003 using the job entry rate, job 
                        retention rate, and earnings gain rate 
                        components of the formula developed 
                        under section 403(a)(4)(C) as in effect 
                        immediately before the effective date 
                        of this paragraph.
                  (D) Determination of state performance.--For 
                each bonus year, the Secretary shall--
                          (i) use the formula developed under 
                        subparagraph (C) to determine the 
                        performance of each eligible State for 
                        the fiscal year that precedes the bonus 
                        year; and
                          (ii) prescribe performance standards 
                        in such a manner so as to ensure that--
                                  (I) the average annual total 
                                amount of grants to be made 
                                under this paragraph for each 
                                bonus year equals $100,000,000; 
                                and
                                  (II) the total amount of 
                                grants to be made under this 
                                paragraph for all bonus years 
                                equals $500,000,000.
                  (E) Definitions.--In this paragraph:
                          (i) Bonus year.--The term ``bonus 
                        year'' means each of fiscal years 2004 
                        through 2008.
                          (ii) Employment achievement state.--
                        The term ``employment achievement 
                        State'' means, with respect to a bonus 
                        year, an eligible State whose 
                        performance determined pursuant to 
                        subparagraph (D)(i) for the fiscal year 
                        preceding the bonus year equals or 
                        exceeds the performance standards 
                        prescribed under subparagraph (D)(ii) 
                        for such preceding fiscal year.
                  (F) Appropriation.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                years 2004 through 2008 $500,000,000 for grants 
                under this paragraph.
                  (G) Grants for tribal organizations.--This 
                paragraph shall apply with respect to tribal 
                organizations in the same manner in which this 
                paragraph applies with respect to States. In 
                determining the criteria under which to make 
                grants to tribal organizations under this 
                paragraph, the Secretary shall consult with 
                tribal organizations.
          (5) Welfare-to-work grants.--
                  (A) Formula grants.--
                          (i) * * *
                          (ii) Welfare-to-work state.--A State 
                        shall be considered a welfare-to-work 
                        State for a fiscal year for purposes of 
                        this paragraph if the Secretary of 
                        Labor determines that the State meets 
                        the following requirements:
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (III) The State has agreed to 
                                negotiate in good faith with 
                                the Secretary of Health and 
                                Human Services with respect to 
                                the substance and funding of 
                                any evaluation under section 
                                [413(j)] 413(i), and to 
                                cooperate with the conduct of 
                                any such evaluation.

           *       *       *       *       *       *       *

                  (F) Funding for evaluations of welfare-to-
                work programs.--0.6 percent of the amount 
                specified in subparagraph (H) for fiscal year 
                1998 and $9,000,000 of the amount so specified 
                for fiscal year 1999 shall be reserved for use 
                by the Secretary to carry out section [413(j)] 
                413(i).
                  (G) Funding for evaluation of abstinence 
                education programs.--
                          (i) * * *
                          (ii) Authority to use funds for 
                        evaluations of welfare-to-work 
                        programs.--Any such amount not required 
                        for such evaluations shall be available 
                        for use by the Secretary to carry out 
                        section [413(j)] 413(i).

           *       *       *       *       *       *       *

  (b) Contingency Fund.--
          (1) * * *
          (2) Deposits into fund.--Out of any money in the 
        Treasury of the United States not otherwise 
        appropriated, there are appropriated for fiscal years 
        [1997, 1998, 1999, 2000, 2001, and 2002] 2003 through 
        2007 such sums as are necessary for payment to the Fund 
        in a total amount not to exceed $2,000,000,000[, 
        reduced by the sum of the dollar amounts specified in 
        paragraph (6)(C)(ii)].
          (3) Grants.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Limitations.--
                          (i) * * *
                          (ii) Payments to all states.--The 
                        total amount paid to all States under 
                        subparagraph (A) during fiscal years 
                        [1997 through 2002] 2003 through 2007 
                        shall not exceed the total amount 
                        appropriated pursuant to paragraph (2).

           *       *       *       *       *       *       *

          (5) Needy state.--For purposes of paragraph (4), a 
        State is a needy State for a month if--
                  (A) * * *
                  (B) as determined by the Secretary of 
                Agriculture (in the discretion of the Secretary 
                of Agriculture), the monthly average number of 
                individuals (as of the last day of each month) 
                participating in the food stamp program in the 
                State in the then most recently concluded 3-
                month period for which data are available 
                exceeds by not less than 10 percent the lesser 
                of--
                          (i) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the food stamp program 
                        in the corresponding 3-month period in 
                        fiscal year 1994 if the amendments made 
                        by titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996, and the 
                        Food Stamp Act of 1977 as in effect 
                        during the corresponding 3-month period 
                        in the fiscal year preceding such most 
                        recently concluded 3-month period, had 
                        been in effect throughout fiscal year 
                        1994; or
                          (ii) the monthly average number of 
                        individuals (as of the last day of each 
                        month) in the State that would have 
                        participated in the food stamp program 
                        in the corresponding 3-month period in 
                        fiscal year 1995 if the amendments made 
                        by titles IV and VIII of the Personal 
                        Responsibility and Work Opportunity 
                        Reconciliation Act of 1996, and the 
                        Food Stamp Act of 1977 as in effect 
                        during the corresponding 3-month period 
                        in the fiscal year preceding such most 
                        recently concluded 3-month period, had 
                        been in effect throughout fiscal year 
                        1995.
          (6) Annual reconciliation.--
                  (A) In general.--Notwithstanding paragraph 
                (3), if the Secretary makes a payment to a 
                State under this subsection in a fiscal year, 
                then the State shall remit to the Secretary, 
                within 1 year after the end of the first 
                subsequent period of 3 consecutive months for 
                which the State is not a needy State, an amount 
                equal to the amount (if any) by which--
                          (i) * * *
                          (ii) the product of--
                                  (I) the Federal medical 
                                assistance percentage for the 
                                State (as defined in section 
                                1905(b), as such section was in 
                                effect on September 30, 1995); 
                                and
                                  (II) the State's reimbursable 
                                expenditures for the fiscal 
                                year[; and].
                                  [(III) \1/12\ times the 
                                number of months during the 
                                fiscal year for which the 
                                Secretary made a payment to the 
                                State under such paragraph 
                                (3).]
                  (B) Definitions.--As used in subparagraph 
                (A):
                          (i) Reimbursable expenditures.--The 
                        term ``reimbursable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year, the amount (if any) by 
                        which--
                                  (I) * * *
                                  (II) historic State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(iii))[, 
                                excluding any amount expended 
                                by the State for child care 
                                under subsection (g) or (i) of 
                                section 402 (as in effect 
                                during fiscal year 1994) for 
                                fiscal year 1994].
                          (ii) Countable state expenditures.--
                        The term ``countable expenditures'' 
                        means, with respect to a State and a 
                        fiscal year--
                                  [(I) the qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i) (other 
                                than the expenditures described 
                                in subclause (I)(bb) of such 
                                section)) under the State 
                                program funded under this part 
                                for the fiscal year; plus]
                                  (I) the qualified State 
                                expenditures (as defined in 
                                section 409(a)(7)(B)(i)) for 
                                the fiscal year; plus

           *       *       *       *       *       *       *

                  [(C) Adjustment of state remittances.--
                          [(i) In general.--The amount 
                        otherwise required by subparagraph (A) 
                        to be remitted by a State for a fiscal 
                        year shall be increased by the lesser 
                        of--
                                  [(I) the total adjustment for 
                                the fiscal year, multiplied by 
                                the adjustment percentage for 
                                the State for the fiscal year; 
                                or
                                  [(II) the unadjusted net 
                                payment to the State for the 
                                fiscal year.
                          [(ii) Total adjustment.--As used in 
                        clause (i), the term ``total 
                        adjustment'' means--
                                  [(I) in the case of fiscal 
                                year 1998, $2,000,000;
                                  [(II) in the case of fiscal 
                                year 1999, $9,000,000;
                                  [(III) in the case of fiscal 
                                year 2000, $16,000,000; and
                                  [(IV) in the case of fiscal 
                                year 2001, $13,000,000.
                          [(iii) Adjustment percentage.--As 
                        used in clause (i), the term 
                        ``adjustment percentage'' means, with 
                        respect to a State and a fiscal year--
                                  [(I) the unadjusted net 
                                payment to the State for the 
                                fiscal year; divided by
                                  [(II) the sum of the 
                                unadjusted net payments to all 
                                States for the fiscal year.
                          [(iv) Unadjusted net payment.--As 
                        used in this subparagraph, the term, 
                        ``unadjusted net payment'' means with 
                        respect to a State and a fiscal year--
                                  [(I) the total amount paid to 
                                the State under paragraph (3) 
                                in the fiscal year; minus
                                  [(II) the amount that, in the 
                                absence of this subparagraph, 
                                would be required by 
                                subparagraph (A) or by section 
                                409(a)(10) to be remitted by 
                                the State in respect of the 
                                payment.]

           *       *       *       *       *       *       *

SEC. 404. USE OF GRANTS.

  (a) General Rules.--Subject to this part, a State to which a 
grant is made under section 403 may use the grant--
          (1) in any manner that is reasonably calculated to 
        accomplish the purpose of this part, including to 
        provide low income households with [assistance] aid in 
        meeting home heating and cooling costs; or
          (2) [in any manner that] for any purposes or 
        activities for which the State was authorized to use 
        amounts received under part A or F, as such parts were 
        in effect on September 30, 1995, or (at the option of 
        the State) August 21, 1996.

           *       *       *       *       *       *       *

  [(c) Authority To Treat Interstate Immigrants Under Rules of 
Former State.--A State operating a program funded under this 
part may apply to a family the rules (including benefit 
amounts) of the program funded under this part of another State 
if the family has moved to the State from the other State and 
has resided in the State for less than 12 months.]
  (d) Authority To Use Portion of Grant for Other Purposes.--
          (1) In general.--Subject to paragraph (2), a State 
        may use not more than [30] 50 percent of the amount of 
        any grant made to the State under section 403(a) for a 
        fiscal year to carry out a State program pursuant to 
        any or all of the following provisions of law:
                  (A) Title XX of this Act.
                  (B) The Child Care and Development Block 
                Grant Act of 1990.
          (2) Limitation on amount transferable to title xx 
        programs.--
                  (A) * * *
                  [(B) Applicable percent.--For purposes of 
                subparagraph (A), the applicable percent is 
                4.25 percent in the case of fiscal year 2001 
                and each succeeding fiscal year.]
                  (B) Applicable percent.--For purposes of 
                subparagraph (A), the applicable percent is 10 
                percent for fiscal year 2003 and each 
                succeeding fiscal year.

           *       *       *       *       *       *       *

  [(e) Authority To Reserve Certain Amounts for Assistance.--A 
State or tribe may reserve amounts paid to the State or tribe 
under this part for any fiscal year for the purpose of 
providing, without fiscal year limitation, assistance under the 
State or tribal program funded under this part.]
  (e) Authority To Carryover or Reserve Certain Amounts for 
Benefits or Services or for Future Contingencies.--
          (1) Carryover.--A State or tribe may use a grant made 
        to the State or tribe under this part for any fiscal 
        year to provide, without fiscal year limitation, any 
        benefit or service that may be provided under the State 
        or tribal program funded under this part.
          (2) Contingency reserve.--A State or tribe may 
        designate any portion of a grant made to the State or 
        tribe under this part as a contingency reserve for 
        future needs, and may use any amount so designated to 
        provide, without fiscal year limitation, any benefit or 
        service that may be provided under the State or tribal 
        program funded under this part. If a State or tribe so 
        designates a portion of such a grant, the State shall, 
        on an annual basis, include in its report under section 
        411(a) the amount so designated.
  (f) Authority To Operate Employment Placement Program.--A 
State to which a grant is made under section 403 may use the 
grant to make payments (or provide job placement vouchers) to 
State-approved public and private job placement agencies that 
provide employment placement services to individuals who 
receive [assistance] benefits or services under the State 
program funded under this part.

           *       *       *       *       *       *       *

  (k) Limitations on Use of Grant for Matching Under Certain 
Federal Transportation Program.--
          (1) Use limitations.--A State to which a grant is 
        made under section 403 may not use any part of the 
        grant to match funds made available under section 3037 
        of the Transportation Equity Act for the 21st Century, 
        unless--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the services provided through such use of 
                the grant promote the ability of such 
                recipients to engage in [work activities (as 
                defined in section 407(d))] direct work 
                activities.

           *       *       *       *       *       *       *

  (l) Marriage Promotion.--A State, territory, or tribal 
organization to which a grant is made under section 403(a)(2) 
may use a grant made to the State, territory, or tribal 
organization under any other provision of section 403 for 
marriage promotion activities, and the amount of any such grant 
so used shall be considered State funds for purposes of section 
403(a)(2).

           *       *       *       *       *       *       *

[SEC. 406. FEDERAL LOANS FOR STATE WELFARE PROGRAMS.

  [(a) Loan Authority.--
          [(1) In general.--The Secretary shall make loans to 
        any loan-eligible State, for a period to maturity of 
        not more than 3 years.
          [(2) Loan-eligible state.--As used in paragraph (1), 
        the term ``loan-eligible State'' means a State against 
        which a penalty has not been imposed under section 
        409(a)(1).
  [(b) Rate of Interest.--The Secretary shall charge and 
collect interest on any loan made under this section at a rate 
equal to the current average market yield on outstanding 
marketable obligations of the United States with remaining 
periods to maturity comparable to the period to maturity of the 
loan.
  [(c) Use of Loan.--A State shall use a loan made to the State 
under this section only for any purpose for which grant amounts 
received by the State under section 403(a) may be used, 
including--
          [(1) welfare anti-fraud activities; and
          [(2) the provision of assistance under the State 
        program to Indian families that have moved from the 
        service area of an Indian tribe with a tribal family 
        assistance plan approved under section 412.
  [(d) Limitation on Total Amount of Loans to a State.--The 
cumulative dollar amount of all loans made to a State under 
this section during fiscal years 1997 through 2002 shall not 
exceed 10 percent of the State family assistance grant.
  [(e) Limitation on Total Amount of Outstanding Loans.--The 
total dollar amount of loans outstanding under this section may 
not exceed $1,700,000,000.
  [(f) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are 
appropriated such sums as may be necessary for the cost of 
loans under this section.

[SEC. 407. MANDATORY WORK REQUIREMENTS.

  [(a) Participation Rate Requirements.--
          [(1) All families.--A State to which a grant is made 
        under section 403 for a fiscal year shall achieve the 
        minimum participation rate specified in the following 
        table for the fiscal year with respect to all families 
        receiving assistance under the State program funded 
        under this part:

                                                             The minimum
                                                           participation
        [If the fiscal year is:                                 rate is:
            1997........................................           25   
            1998........................................           30   
            1999........................................           35   
            2000........................................           40   
            2001........................................           45   
            2002 or thereafter..........................           50.  

          [(2) 2-parent families.--A State to which a grant is 
        made under section 403 for a fiscal year shall achieve 
        the minimum participation rate specified in the 
        following table for the fiscal year with respect to 2-
        parent families receiving assistance under the State 
        program funded under this part:

                                                             The minimum
                                                           participation
        [If the fiscal year is:                                 rate is:
            1997........................................           75   
            1998........................................           75   
            1999 or thereafter..........................           90.  

  [(b) Calculation of Participation Rates.--
          [(1) All families.--
                  [(A) Average monthly rate.--For purposes of 
                subsection (a)(1), the participation rate for 
                all families of a State for a fiscal year is 
                the average of the participation rates for all 
                families of the State for each month in the 
                fiscal year.
                  [(B) Monthly participation rates.--The 
                participation rate of a State for all families 
                of the State for a month, expressed as a 
                percentage, is--
                          [(i) the number of families receiving 
                        assistance under the State program 
                        funded under this part that include an 
                        adult or a minor child head of 
                        household who is engaged in work for 
                        the month; divided by
                          [(ii) the amount by which--
                                  [(I) the number of families 
                                receiving such assistance 
                                during the month that include 
                                an adult or a minor child head 
                                of household receiving such 
                                assistance; exceeds
                                  [(II) the number of families 
                                receiving such assistance that 
                                are subject in such month to a 
                                penalty described in subsection 
                                (e)(1) but have not been 
                                subject to such penalty for 
                                more than 3 months within the 
                                preceding 12-month period 
                                (whether or not consecutive).
          [(2) 2-parent families.--
                  [(A) Average monthly rate.--For purposes of 
                subsection (a)(2), the participation rate for 
                2-parent families of a State for a fiscal year 
                is the average of the participation rates for 
                2-parent families of the State for each month 
                in the fiscal year.
                  [(B) Monthly participation rates.--The 
                participation rate of a State for 2-parent 
                families of the State for a month shall be 
                calculated by use of the formula set forth in 
                paragraph (1)(B), except that in the formula 
                the term ``number of 2-parent families'' shall 
                be substituted for the term ``number of 
                families'' each place such latter term appears.
                  [(C) Family with a disabled parent not 
                treated as a 2-parent family.--A family that 
                includes a disabled parent shall not be 
                considered a 2-parent family for purposes of 
                subsections (a) and (b) of this section.]

SEC. 407. WORK PARTICIPATION REQUIREMENTS.

  (a) Participation Rate Requirements.--A State to which a 
grant is made under section 403 for a fiscal year shall achieve 
a minimum participation rate equal to not less than--
          (1) 50 percent for fiscal year 2003;
          (2) 55 percent for fiscal year 2004;
          (3) 60 percent for fiscal year 2005;
          (4) 65 percent for fiscal year 2006; and
          (5) 70 percent for fiscal year 2007 and each 
        succeeding fiscal year.
  (b) Calculation of Participation Rates.--
          (1) Average monthly rate.--For purposes of subsection 
        (a), the participation rate of a State for a fiscal 
        year is the average of the participation rates of the 
        State for each month in the fiscal year.
          (2) Monthly participation rates; incorporation of 40-
        hour work week standard.--
                  (A) In general.--For purposes of paragraph 
                (1), the participation rate of a State for a 
                month is--
                          (i) the total number of countable 
                        hours (as defined in subsection (c)) 
                        with respect to the counted families 
                        for the State for the month; divided by
                          (ii) 160 multiplied by the number of 
                        counted families for the State for the 
                        month.
                  (B) Counted families defined.--
                          (i) In general.--In subparagraph (A), 
                        the term ``counted family'' means, with 
                        respect to a State and a month, a 
                        family that includes a work-eligible 
                        individual and that receives assistance 
                        in the month under the State program 
                        funded under this part, subject to 
                        clause (ii).
                          (ii) State option to exclude certain 
                        families.--At the option of a State, 
                        the term ``counted family'' shall not 
                        include--
                                  (I) a family in the first 
                                month for which the family 
                                receives assistance from a 
                                State program funded under this 
                                part on the basis of the most 
                                recent application for such 
                                assistance; or
                                  (II) on a case-by-case basis, 
                                a family in which the youngest 
                                child has not attained 12 
                                months of age.
                          (iii) State option to include 
                        individuals receiving assistance under 
                        a tribal family assistance plan or 
                        tribal work program.--At the option of 
                        a State, the term ``counted family'' 
                        may include families in the State that 
                        are receiving assistance under a tribal 
                        family assistance plan approved under 
                        section 412 or under a tribal work 
                        program to which funds are provided 
                        under this part.
                  (C) Work-eligible individual defined.--In 
                this section, the term ``work-eligible 
                individual'' means an individual--
                          (i) who is married or a single head 
                        of household; and
                          (ii) whose needs are (or, but for 
                        sanctions under this part that have 
                        been in effect for more than 3 months 
                        (whether or not consecutive) in the 
                        preceding 12 months or under part D, 
                        would be) included in determining the 
                        amount of cash assistance to be 
                        provided to the family under the State 
                        program funded under this part.
          (3) Pro rata reduction of participation rate due to 
        caseload reductions not required by federal law and not 
        resulting from changes in state eligibility criteria.--
                  (A) In general.--The Secretary shall 
                prescribe regulations for reducing the minimum 
                participation rate otherwise required by this 
                section for a fiscal year by the number of 
                percentage points equal to the number of 
                percentage points (if any) by which--
                          (i) * * *
                          [(ii) the average monthly number of 
                        families that received aid under the 
                        State plan approved under part A (as in 
                        effect on September 30, 1995) during 
                        fiscal year 1995.]
                          (ii) the average monthly number of 
                        families that received assistance under 
                        the State program funded under this 
                        part during--
                                  (I) if the fiscal year is 
                                fiscal year 2003, fiscal year 
                                1996;
                                  (II) if the fiscal year is 
                                fiscal year 2004, fiscal year 
                                1998;
                                  (III) if the fiscal year is 
                                fiscal year 2005, fiscal year 
                                2001;
                                  (IV) if the fiscal year is 
                                fiscal year 2006, fiscal year 
                                2002; or
                                  (V) if the fiscal year is 
                                fiscal year 2007, fiscal year 
                                2003.

           *       *       *       *       *       *       *

          [(4) State option to include individuals receiving 
        assistance under a tribal family assistance plan or 
        tribal work program.--For purposes of paragraphs (1)(B) 
        and (2)(B), a State may, at its option, include 
        families in the State that are receiving assistance 
        under a tribal family assistance plan approved under 
        section 412 or under a tribal work program to which 
        funds are provided under this part.
          [(5) State option for participation requirement 
        exemptions.--For any fiscal year, a State may, at its 
        option, not require an individual who is a single 
        custodial parent caring for a child who has not 
        attained 12 months of age to engage in work, and may 
        disregard such an individual in determining the 
        participation rates under subsection (a) for not more 
        than 12 months.]
          (4) Superachiever credit.--
                  (A) In general.--The participation rate, 
                determined under paragraphs (1) and (2) of this 
                subsection, of a superachiever State for a 
                fiscal year shall be increased by the lesser 
                of--
                          (i) the amount (if any) of the 
                        superachiever credit applicable to the 
                        State; or
                          (ii) the number of percentage points 
                        (if any) by which the minimum 
                        participation rate required by 
                        subsection (a) for the fiscal year 
                        exceeds 50 percent.
                  (B) Superachiever state.--For purposes of 
                subparagraph (A), a State is a superachiever 
                State if the State caseload for fiscal year 
                2001 has declined by at least 60 percent from 
                the State caseload for fiscal year 1995.
                  (C) Amount of credit.--The superachiever 
                credit applicable to a State is the number of 
                percentage points (if any) by which the decline 
                referred to in subparagraph (B) exceeds 60 
                percent.
                  (D) Definitions.--In this paragraph:
                          (i) State caseload for fiscal year 
                        2001.--The term ``State caseload for 
                        fiscal year 2001'' means the average 
                        monthly number of families that 
                        received assistance during fiscal year 
                        2001 under the State program funded 
                        under this part.
                          (ii) State caseload for fiscal year 
                        1995.--The term ``State caseload for 
                        fiscal year 1995'' means the average 
                        monthly number of families that 
                        received aid under the State plan 
                        approved under part A (as in effect on 
                        September 30, 1995) during fiscal year 
                        1995.
  [(c) Engaged in Work.--
          [(1) General rules.--
                  [(A) All families.--For purposes of 
                subsection (b)(1)(B)(i), a recipient is engaged 
                in work for a month in a fiscal year if the 
                recipient is participating in work activities 
                for at least the minimum average number of 
                hours per week specified in the following table 
                during the month, not fewer than 20 hours per 
                week of which are attributable to an activity 
                described in paragraph (1), (2), (3), (4), (5), 
                (6), (7), (8), or (12) of subsection (d), 
                subject to this subsection:

                                                             The minimum
          [If the month is                             average number of
          in fiscal year:                             hours per week is:
              1997......................................           20   
              1998......................................           20   
              1999......................................           25   
              2000 or thereafter........................           30.  

                  [(B) 2-parent families.--For purposes of 
                subsection (b)(2)(B), an individual is engaged 
                in work for a month in a fiscal year if--
                          [(i) the individual and the other 
                        parent in the family are participating 
                        in work activities for a total of at 
                        least 35 hours per week during the 
                        month, not fewer than 30 hours per week 
                        of which are attributable to an 
                        activity described in paragraph (1), 
                        (2), (3), (4), (5), (6), (7), (8), or 
                        (12) of subsection (d), subject to this 
                        subsection; and
                          [(ii) if the family of the individual 
                        receives federally-funded child care 
                        assistance and an adult in the family 
                        is not disabled or caring for a 
                        severely disabled child, the individual 
                        and the other parent in the family are 
                        participating in work activities for a 
                        total of at least 55 hours per week 
                        during the month, not fewer than 50 
                        hours per week of which are 
                        attributable to an activity described 
                        in paragraph (1), (2), (3), (4), (5), 
                        (6), (7), (8), or (12) of subsection 
                        (d).
          [(2) Limitations and special rules.--
                  [(A) Number of weeks for which job search 
                counts as work.--
                          [(i) Limitation.--Notwithstanding 
                        paragraph (1) of this subsection, an 
                        individual shall not be considered to 
                        be engaged in work by virtue of 
                        participation in an activity described 
                        in subsection (d)(6) of a State program 
                        funded under this part, after the 
                        individual has participated in such an 
                        activity for 6 weeks (or, if the 
                        unemployment rate of the State is at 
                        least 50 percent greater than the 
                        unemployment rate of the United States 
                        or the State is a needy State (within 
                        the meaning of section 403(b)(6)), 12 
                        weeks), or if the participation is for 
                        a week that immediately follows 4 
                        consecutive weeks of such 
                        participation.
                          [(ii) Limited authority to count less 
                        than full week of participation.--For 
                        purposes of clause (i) of this 
                        subparagraph, on not more than 1 
                        occasion per individual, the State 
                        shall consider participation of the 
                        individual in an activity described in 
                        subsection (d)(6) for 3 or 4 days 
                        during a week as a week of 
                        participation in the activity by the 
                        individual.
                  [(B) Single parent or relative with child 
                under age 6 deemed to be meeting work 
                participation requirements if parent or 
                relative is engaged in work for 20 hours per 
                week.--For purposes of determining monthly 
                participation rates under subsection 
                (b)(1)(B)(i), a recipient who is the only 
                parent or caretaker relative in the family of a 
                child who has not attained 6 years of age is 
                deemed to be engaged in work for a month if the 
                recipient is engaged in work for an average of 
                at least 20 hours per week during the month.
                  [(C) Single teen head of household or married 
                teen who maintains satisfactory school 
                attendance deemed to be meeting work 
                participation requirements.--For purposes of 
                determining monthly participation rates under 
                sub-section (b)(1)(B)(i), a recipient who is 
                married or a head of household and has not 
                attained 20 years of age is deemed to be 
                engaged in work for a month in a fiscal year if 
                the recipient--
                          [(i) maintains satisfactory 
                        attendance at secondary school or the 
                        equivalent during the month; or
                          [(ii) participates in education 
                        directly related to employment for an 
                        average of at least 20 hours per week 
                        during the month.
                  [(D) Limitation on number of persons who may 
                be treated as engaged in work by reason of 
                participation in educational activities.--For 
                purposes of determining monthly participation 
                rates under paragraphs (1)(B)(i) and (2)(B) of 
                subsection (b), not more than 30 percent of the 
                number of individuals in all families and in 2-
                parent families, respectively, in a State who 
                are treated as engaged in work for a month may 
                consist of individuals who are determined to be 
                engaged in work for the month by reason of 
                participation in vocational educational 
                training, or (if the month is in fiscal year 
                2000 or thereafter) deemed to be engaged in 
                work for the month by reason of subparagraph 
                (C) of this paragraph.
  [(d) Work Activities Defined.--As used in this section, the 
term ``work activities'' means--
          [(1) unsubsidized employment;
          [(2) subsidized private sector employment;
          [(3) subsidized public sector employment;
          [(4) work experience (including work associated with 
        the refurbishing of publicly assisted housing) if 
        sufficient private sector employment is not available;
          [(5) on-the-job training;
          [(6) job search and job readiness assistance;
          [(7) community service programs;
          [(8) vocational educational training (not to exceed 
        12 months with respect to any individual);
          [(9) job skills training directly related to 
        employment;
          [(10) education directly related to employment, in 
        the case of a recipient who has not received a high 
        school diploma or a certificate of high school 
        equivalency;
          [(11) satisfactory attendance at secondary school or 
        in a course of study leading to a certificate of 
        general equivalence, in the case of a recipient who has 
        not completed secondary school or received such a 
        certificate; and
          [(12) the provision of child care services to an 
        individual who is participating in a community service 
        program.]
  (c) Countable Hours.--
          (1) Definition.--In subsection (b)(2), the term 
        ``countable hours'' means, with respect to a family for 
        a month, the total number of hours in the month in 
        which any member of the family who is a work-eligible 
        individual is engaged in a direct work activity or 
        other activities specified by the State (excluding an 
        activity that does not address a purpose specified in 
        section 401(a)), subject to the other provisions of 
        this subsection.
          (2) Limitations.--Subject to such regulations as the 
        Secretary may prescribe:
                  (A) Minimum weekly average of 24 hours of 
                direct work activities required.--If the work-
                eligible individuals in a family are engaged in 
                a direct work activity for an average total of 
                fewer than 24 hours per week in a month, then 
                the number of countable hours with respect to 
                the family for the month shall be zero.
                  (B) Maximum weekly average of 16 hours of 
                other activities.--An average of not more than 
                16 hours per week of activities specified by 
                the State (subject to the exclusion described 
                in paragraph (1)) may be considered countable 
                hours in a month with respect to a family.
          (3) Special rules.--For purposes of paragraph (1):
                  (A) Participation in qualified activities.--
                          (i) In general.--If, with the 
                        approval of the State, the work-
                        eligible individuals in a family are 
                        engaged in 1 or more qualified 
                        activities for an average total of at 
                        least 24 hours per week in a month, 
                        then all such engagement in the month 
                        shall be considered engagement in a 
                        direct work activity, subject to clause 
                        (iii).
                          (ii) Qualified activity defined.--The 
                        term ``qualified activity'' means an 
                        activity specified by the State 
                        (subject to the exclusion described in 
                        paragraph (1)) that meets such 
                        standards and criteria as the State may 
                        specify, including--
                                  (I) substance abuse 
                                counseling or treatment;
                                  (II) rehabilitation treatment 
                                and services;
                                  (III) work-related education 
                                or training directed 
                                effectively at enabling the 
                                family member to work; or
                                  (IV) job search or job 
                                readiness assistance.
                          (iii) Limitation.--
                                  (I) In general.--Except as 
                                provided in subclause (II), 
                                clause (i) shall not apply to a 
                                family for more than 3 months 
                                in any period of 24 consecutive 
                                months.
                                  (II) Special rule applicable 
                                to education and training.--A 
                                State may, on a case-by-case 
                                basis, apply clause (i) to a 
                                work-eligible individual so 
                                that participation by the 
                                individual in education or 
                                training, if needed to permit 
                                the individual to complete a 
                                certificate program or other 
                                specific course of education in 
                                preparation for specific 
                                employment to fill a known job 
                                need in a local area, may be 
                                considered countable hours with 
                                respect to the family of the 
                                individual for not more than 4 
                                months.
                  (B) School attendance by teen head of 
                household.--The work-eligible members of a 
                family shall be considered to be engaged in a 
                direct work activity for an average of 40 hours 
                per week in a month if the family includes an 
                individual who is married, or is a single head 
                of household, who has not attained 20 years of 
                age, and the individual--
                          (i) maintains satisfactory attendance 
                        at secondary school or the equivalent 
                        in the month; or
                          (ii) participates in education 
                        directly related to employment for an 
                        average of at least 20 hours per week 
                        in the month.
  (d) Direct Work Activity.--In this section, the term ``direct 
work activity'' means--
          (1) unsubsidized employment;
          (2) subsidized private sector employment;
          (3) subsidized public sector employment;
          (4) on-the-job training;
          (5) supervised work experience; or
          (6) supervised community service.
  (e) Penalties Against Individuals.--
          [(1) In general.--Except as provided in paragraph 
        (2), if an individual in a family receiving assistance 
        under the State program funded under this part refuses 
        to engage in work required in accordance with this 
        section, the State shall--
                  [(A) reduce the amount of assistance 
                otherwise payable to the family pro rata (or 
                more, at the option of the State) with respect 
                to any period during a month in which the 
                individual so refuses; or
                  [(B) terminate such assistance,
        subject to such good cause and other exceptions as the 
        State may establish.]
          (1) Reduction or termination of assistance.--
                  (A) In general.--Except as provided in 
                paragraph (2), if an individual in a family 
                receiving assistance under a State program 
                funded under this part fails to engage in 
                activities required in accordance with this 
                section, or other activities required by the 
                State under the program, and the family does 
                not otherwise engage in activities in 
                accordance with the self-sufficiency plan 
                established for the family pursuant to section 
                408(b), the State shall--
                          (i) if the failure is partial or 
                        persists for not more than 1 month--
                                  (I) reduce the amount of 
                                assistance otherwise payable to 
                                the family pro rata (or more, 
                                at the option of the State) 
                                with respect to any period 
                                during a month in which the 
                                failure occurs; or
                                  (II) terminate all assistance 
                                to the family, subject to such 
                                good cause exceptions as the 
                                State may establish; or
                          (ii) if the failure is total and 
                        persists for at least 2 consecutive 
                        months, terminate all cash payments to 
                        the family including qualified State 
                        expenditures (as defined in section 
                        409(a)(7)(B)(i)) for at least 1 month 
                        and thereafter until the individual 
                        resumes full participation in the 
                        activities, subject to such good cause 
                        exceptions as the State may establish.
                  (B) Special rule.--In the event of a conflict 
                between a requirement of clause (i)(II) or (ii) 
                of subparagraph (A) and a requirement of a 
                State constitution to provide assistance to 
                needy parents and children, the State 
                constitutional requirement shall control.

           *       *       *       *       *       *       *

  (f) Nondisplacement in Work Activities.--
          (1) In general.--Subject to paragraph (2), an adult 
        in a family receiving assistance under a State program 
        funded under this part attributable to funds provided 
        by the Federal Government may fill a vacant employment 
        position in order to engage in a [work activity 
        described in subsection (d)] direct work activity.
          (2) No filling of certain vacancies.--No adult in a 
        [work activity described in subsection (d)] direct work 
        activity which is funded, in whole or in part, by funds 
        provided by the Federal Government shall be employed or 
        assigned--
                  (A) * * *

           *       *       *       *       *       *       *

SEC. 408. PROHIBITIONS; REQUIREMENTS.

  (a) In General.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) No assistance for teenage parents not living in 
        adult-supervised settings.--
                  (A) * * *
                  (B) Exception.--
                          (i) Provision of, or [assistance] aid 
                        in locating, adult-supervised living 
                        arrangement.--In the case of an 
                        individual who is described in clause 
                        (ii), the State agency referred to in 
                        section 402(a)(4) shall provide, or 
                        assist the individual in locating, a 
                        second chance home, maternity home, or 
                        other appropriate adult-supervised 
                        supportive living arrangement, taking 
                        into consideration the needs and 
                        concerns of the individual, unless the 
                        State agency determines that the 
                        individual's current living arrangement 
                        is appropriate, and thereafter shall 
                        require that the individual and the 
                        minor child referred to in subparagraph 
                        (A)(ii)(II) reside in such living 
                        arrangement as a condition of the 
                        continued receipt of assistance under 
                        the State program funded under this 
                        part attributable to funds provided by 
                        the Federal Government (or in an 
                        alternative appropriate arrangement, 
                        should circumstances change and the 
                        current arrangement cease to be 
                        appropriate).

           *       *       *       *       *       *       *

  [(b) Individual Responsibility Plans.--
          [(1) Assessment.--The State agency responsible for 
        administering the State program funded under this part 
        shall make an initial assessment of the skills, prior 
        work experience, and employability of each recipient of 
        assistance under the program who--
                  [(A) has attained 18 years of age; or
                  [(B) has not completed high school or 
                obtained a certificate of high school 
                equivalency, and is not attending secondary 
                school.
          [(2) Contents of plans.--
                  [(A) In general.--On the basis of the 
                assessment made under subsection (a) with 
                respect to an individual, the State agency, in 
                consultation with the individual, may develop 
                an individual responsibility plan for the 
                individual, which--
                          [(i) sets forth an employment goal 
                        for the individual and a plan for 
                        moving the individual immediately into 
                        private sector employment;
                          [(ii) sets forth the obligations of 
                        the individual, which may include a 
                        requirement that the individual attend 
                        school, maintain certain grades and 
                        attendance, keep school age children of 
                        the individual in school, immunize 
                        children, attend parenting and money 
                        management classes, or do other things 
                        that will help the individual become 
                        and remain employed in the private 
                        sector;
                          [(iii) to the greatest extent 
                        possible is designed to move the 
                        individual into whatever private sector 
                        employment the individual is capable of 
                        handling as quickly as possible, and to 
                        increase the responsibility and amount 
                        of work the individual is to handle 
                        over time;
                          [(iv) describes the services the 
                        State will provide the individual so 
                        that the individual will be able to 
                        obtain and keep employment in the 
                        private sector, and describe the job 
                        counseling and other services that will 
                        be provided by the State; and
                          [(v) may require the individual to 
                        undergo appropriate substance abuse 
                        treatment.
                  [(B) Timing.--The State agency may comply 
                with paragraph (1) with respect to an 
                individual--
                          [(i) within 90 days (or, at the 
                        option of the State, 180 days) after 
                        the effective date of this part, in the 
                        case of an individual who, as of such 
                        effective date, is a recipient of aid 
                        under the State plan approved under 
                        part A (as in effect immediately before 
                        such effective date); or
                          [(ii) within 30 days (or, at the 
                        option of the State, 90 days) after the 
                        individual is determined to be eligible 
                        for such assistance, in the case of any 
                        other individual.
          [(3) Penalty for noncompliance by individual.--In 
        addition to any other penalties required under the 
        State program funded under this part, the State may 
        reduce, by such amount as the State considers 
        appropriate, the amount of assistance otherwise payable 
        under the State program to a family that includes an 
        individual who fails without good cause to comply with 
        an individual responsibility plan signed by the 
        individual.
          [(4) State discretion.--The exercise of the authority 
        of this subsection shall be within the sole discretion 
        of the State.]
  (b) Family Self-Sufficiency Plans.--
          (1) In general.--A State to which a grant is made 
        under section 403 shall--
                  (A) make an initial assessment, in the manner 
                deemed appropriate by the State, of the skills, 
                prior work experience, and employability of 
                each recipient of assistance under the program;
                  (B) establish for each family that includes a 
                work-eligible individual receiving assistance 
                under the State program funded under this part 
                a self-sufficiency plan that specifies 
                appropriate activities described in the State 
                plan submitted pursuant to section 402, 
                including direct work activities as appropriate 
                designed to assist the family in achieving 
                their maximum degree of self-sufficiency, and 
                that provides for the ongoing participation of 
                the individual in the activities;
                  (C) require, at a minimum, each member of the 
                family who is a work-eligible individual (as 
                defined in section 407(b)(2)(C)) to participate 
                in activities in accordance with the self-
                sufficiency plan;
                  (D) monitor the participation of such family 
                members in the activities and the progress of 
                the family toward self-sufficiency;
                  (E) regularly review the self-sufficiency 
                plan; and
                  (F) revise the self-sufficiency plan as 
                appropriate.
          (2) Timing.--The State shall comply with paragraph 
        (1) with respect to a family--
                  (A) in the case of a family that, as of 
                October 1, 2002, is not receiving assistance 
                from the State program funded under this part, 
                not later than 60 days after the family first 
                receives assistance on the basis of the most 
                recent application for the assistance; or
                  (B) in the case of a family that, as of such 
                date, is receiving the assistance, not later 
                than 12 months after the date of the enactment 
                of this subsection.

           *       *       *       *       *       *       *

SEC. 409. PENALTIES.

  (a) In General.--Subject to this section:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Failure to satisfy minimum participation rates or 
        establish family self-sufficiency plan.--
                  (A) In general.--If the Secretary determines 
                that a State to which a grant is made under 
                section 403 for a fiscal year has failed to 
                comply with section 407(a) or 408(b) for the 
                fiscal year, the Secretary shall reduce the 
                grant payable to the State under section 
                403(a)(1) for the immediately succeeding fiscal 
                year by an amount equal to the applicable 
                percentage of the State family assistance 
                grant.

           *       *       *       *       *       *       *

          [(6) Failure to timely repay a federal loan fund for 
        state welfare programs.--If the Secretary determines 
        that a State has failed to repay any amount borrowed 
        from the Federal Loan Fund for State Welfare Programs 
        established under section 406 within the period of 
        maturity applicable to the loan, plus any interest owed 
        on the loan, the Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year quarter (without 
        regard to this section) by the outstanding loan amount, 
        plus the interest owed on the outstanding amount. The 
        Secretary shall not forgive any outstanding loan amount 
        or interest owed on the outstanding amount.]
          (7) Failure of any state to maintain certain level of 
        historic effort.--
                  (A) In general.--The Secretary shall reduce 
                the grant payable to the State under section 
                403(a)(1) for [fiscal year 1998, 1999, 2000, 
                2001, 2002, or 2003] fiscal year 2003, 2004, 
                2005, 2006, 2007 or 2008 by the amount (if any) 
                by which qualified State expenditures for the 
                then immediately preceding fiscal year are less 
                than the applicable percentage of historic 
                State expenditures with respect to such 
                preceding fiscal year.
                  (B) Definitions.--As used in this paragraph:
                          (i) Qualified state expenditures.--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (V) Counting of spending on 
                                non-eligible families to 
                                prevent and reduce incidence of 
                                out-of-wedlock births, 
                                encourage formation and 
                                maintenance of healthy, 2-
                                parent married families, or 
                                encourage responsible 
                                fatherhood.--The term 
                                ``qualified State 
                                expenditures'' includes the 
                                total expenditures by the State 
                                during the fiscal year under 
                                all State programs for a 
                                purpose described in paragraph 
                                (3) or (4) of section 401(a).
                                  (VI) Exclusion of federal 
                                tanf funds used for marriage 
                                promotion activities.--Such 
                                term does not include the 
                                amount of any grant made to the 
                                State under section 403 that is 
                                expended for a marriage 
                                promotion activity.
                          (ii) Applicable percentage.--The term 
                        ``applicable percentage'' means [for 
                        fiscal years 1997 through 2002,] 80 
                        percent (or, if the State meets the 
                        requirements of section 407(a) for the 
                        preceding fiscal year, 75 percent).

           *       *       *       *       *       *       *

          (10) Failure of state receiving amounts from 
        contingency fund to maintain 100 percent of historic 
        effort.--If, at the end of any fiscal year during which 
        amounts from the Contingency Fund for State Welfare 
        Programs have been paid to a State, the Secretary finds 
        that the qualified State expenditures (as defined in 
        paragraph (7)(B)(i) [(other than the expenditures 
        described in subclause (I)(bb) of that paragraph)) 
        under the State program funded under this part]) for 
        the fiscal year are less than 100 percent of historic 
        State expenditures (as defined in paragraph (7)(B)(iii) 
        of this subsection), [excluding any amount expended by 
        the State for child care under subsection (g) or (i) of 
        section 402 (as in effect during fiscal year 1994) for 
        fiscal year 1994,] the Secretary shall reduce the grant 
        payable to the State under section 403(a)(1) for the 
        immediately succeeding fiscal year by the total of the 
        amounts so paid to the State that the State has not 
        remitted under section 403(b)(6).

           *       *       *       *       *       *       *

          (14) Penalty for failure to reduce assistance for 
        recipients refusing without good cause to work or 
        refusing to engage in activities under a family self-
        sufficiency plan.--
                  (A) * * *

           *       *       *       *       *       *       *

  (c) Corrective Compliance Plan.--
          (1) * * *
          (2) Effect of correcting or discontinuing 
        violation.--The Secretary may not impose any penalty 
        under subsection (a) with respect to any violation 
        covered by a State corrective compliance plan accepted 
        by the Secretary if the State corrects or discontinues, 
        as appropriate, the violation pursuant to the plan.

           *       *       *       *       *       *       *

SEC. 411. DATA COLLECTION AND REPORTING.

  (a) Quarterly Reports by States.--
          (1) General reporting requirement.--
                  (A) Contents of report.--Each eligible State 
                shall collect on a monthly basis, and report to 
                the Secretary on a quarterly basis, the 
                following disaggregated case record information 
                on the families receiving assistance under the 
                State program funded under this part (except 
                for information relating to activities carried 
                out under section 403(a)(5)):
                          (i) * * *
                          (ii) Whether a child receiving such 
                        assistance or an adult in the family is 
                        receiving--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (III) aid under a State plan 
                                approved under title XIV (as in 
                                effect without regard to the 
                                amendment made by section 301 
                                of the Social Security 
                                Amendments of 1972)[)];

           *       *       *       *       *       *       *

                          (vii) The race and educational level 
                        of each adult and minor parent in the 
                        family.
                          (viii) The race [and educational 
                        level] of each child in the family.
                          (ix) Whether the family received 
                        subsidized housing, medical assistance 
                        under the State plan approved under 
                        title XIX, food stamps, or subsidized 
                        child care[, and if the latter 2, the 
                        amount received].
                          (x) The number of months that the 
                        family has received [each type of] 
                        assistance under the program and, if 
                        applicable, the reason for receipt of 
                        the assistance for a total of more than 
                        60 months.
                          (xi) If the adults participated in, 
                        and the number of hours per week of 
                        participation in, the following 
                        activities:
                                  [(I) Education.
                                  [(II) Subsidized private 
                                sector employment.
                                  [(III) Unsubsidized 
                                employment.
                                  [(IV) Public sector 
                                employment, work experience, or 
                                community service.
                                  [(V) Job search.
                                  [(VI) Job skills training or 
                                on-the-job training.
                                  [(VII) Vocational education.]
                                  (I) Subsidized private sector 
                                employment.
                                  (II) Unsubsidized employment.
                                  (III) Public sector 
                                employment, supervised work 
                                experience, or supervised 
                                community service.
                                  (IV) On-the-job training.
                                  (V) Job search and placement.
                                  (VI) Training.
                                  (VII) Education.
                                  (VIII) Other activities 
                                directed at the purposes of 
                                this part, as specified in the 
                                State plan submitted pursuant 
                                to section 402.
                          (xii) Information necessary to 
                        calculate participation rates and 
                        progress toward universal engagement 
                        under section 407.
                          (xiii) The [type and] amount of 
                        assistance received under the program, 
                        including the amount of and reason for 
                        any reduction of assistance (including 
                        sanctions).

           *       *       *       *       *       *       *

                          (xvi) From a sample of closed cases, 
                        whether the family left the program, 
                        and if so, whether the family left due 
                        to--
                                  (I) employment;
                                  [(II) marriage;]
                                  [(III)] (II) the prohibition 
                                set forth in section 408(a)(7);
                                  [(IV)] (III) sanction; or
                                  [(V)] (IV) State policy.

           *       *       *       *       *       *       *

                          (xviii) The date the family first 
                        received assistance from the State 
                        program on the basis of the most recent 
                        application for such assistance.
                          (xix) Whether a self-sufficiency plan 
                        is established for the family in 
                        accordance with section 408(b).
                          (xx) With respect to any child in the 
                        family, the marital status of the 
                        parents at the birth of the child, and 
                        if the parents were not then married, 
                        whether the paternity of the child has 
                        been established.
                  (B) Use of samples.--
                          (i) Authority.--A State may comply 
                        with subparagraph (A) by submitting 
                        disaggregated case record information 
                        on [a sample] samples of families 
                        selected through the use of 
                        scientifically acceptable sampling 
                        methods approved by the Secretary, 
                        except that the Secretary may designate 
                        core data elements that must be 
                        reported on all families.
                          (ii) Sampling and other methods.--The 
                        Secretary shall provide the States with 
                        such case sampling plans and data 
                        collection procedures as the Secretary 
                        deems necessary to produce 
                        statistically valid estimates of the 
                        performance of State programs [funded 
                        under this part] described in 
                        subparagraph (A). The Secretary may 
                        develop and implement procedures for 
                        verifying the quality of data submitted 
                        by the States.

           *       *       *       *       *       *       *

          [(5) Report on transitional services.--The report 
        required by paragraph (1) for a fiscal quarter shall 
        include the total amount expended by the State during 
        the quarter to provide transitional services to a 
        family that has ceased to receive assistance under this 
        part because of employment, along with a description of 
        such services.]
          [(6)] (5) Report on families receiving assistance.--
        The report required by paragraph (1) for a fiscal 
        quarter shall include for each month in the quarter--
                  (A) * * *

           *       *       *       *       *       *       *

          (6) Report on families that become ineligible to 
        receive assistance.--The report required by paragraph 
        (1) for a fiscal quarter shall include for each month 
        in the quarter the number of families and total number 
        of individuals that, during the month, became 
        ineligible to receive assistance under the State 
        program funded under this part (broken down by the 
        number of families that become so ineligible due to 
        earnings, changes in family composition that result in 
        increased earnings, sanctions, time limits, or other 
        specified reasons).
          (7) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to define the data 
        elements and to collect the necessary data with respect 
        to which reports are required by this [subsection] 
        section, and shall consult with the Secretary of Labor 
        [in defining the data elements with respect to programs 
        operated with funds provided under section 403(a)(5).], 
        the National Governors' Association, the American 
        Public Human Services Association, the National 
        Conference of State Legislatures, and others in 
        defining the data elements.
  (b) Annual Reports on Program Characteristics.--Not later 
than 90 days after the end of fiscal year 2004 and each 
succeeding fiscal year, each eligible State shall submit to the 
Secretary a report on the characteristics of the State program 
funded under this part and other State programs funded with 
qualified State expenditures (as defined in section 
409(a)(7)(B)(i)). The report shall include, with respect to 
each such program, the program name, a description of program 
activities, the program purpose, the program eligibility 
criteria, the sources of program funding, the number of program 
beneficiaries, sanction policies, and any program work 
requirements.
  (c) Monthly Reports on Caseload.--Not later than 3 months 
after the end of a calendar month that begins 1 year or more 
after the enactment of this subsection, each eligible State 
shall submit to the Secretary report on the number of families 
and total number of individuals receiving assistance in the 
calendar month under the State program funded under this part.
  (d) Annual Report on Performance Improvement.--Beginning with 
fiscal year 2004, not later than January 1 of each fiscal year, 
each eligible State shall submit to the Secretary a report on 
achievement and improvement during the preceding fiscal year 
under the numerical performance goals and measures under the 
State program funded under this part with respect to each of 
the matters described in section 402(a)(1)(A)(v).
  [(b)] (e) Annual Reports to the Congress by the Secretary.--
Not later than 6 months after the end of fiscal year 1997, [and 
each fiscal year thereafter] and by July 1 of each fiscal year 
thereafter, the Secretary shall transmit to the Congress a 
report describing--
          (1) * * *
          (2) the demographic and financial characteristics of 
        [families applying for assistance,] families receiving 
        assistance[,] and families that become ineligible to 
        receive assistance;
          (3) the characteristics of each State program funded 
        under this part and other programs funded with 
        qualified State expenditures (as defined in section 
        409(a)(7)(B)(i)); and

           *       *       *       *       *       *       *

  (f) Increased Analysis of State Single Audit Reports.--
          (1) In general.--Within 3 months after a State 
        submits to the Secretary a report pursuant to section 
        7502(a)(1)(A) of title 31, United States Code, the 
        Secretary shall analyze the report for the purpose of 
        identifying the extent and nature of problems related 
        to the oversight by the State of nongovernmental 
        entities with respect to contracts entered into by such 
        entities with the State program funded under this part, 
        and determining what additional actions may be 
        appropriate to help prevent and correct the problems.
          (2) Inclusion of program oversight section in annual 
        report to the congress.--The Secretary shall include in 
        each report under subsection (a) a section on oversight 
        of State programs funded under this part, including 
        findings on the extent and nature of the problems 
        referred to in paragraph (1), actions taken to resolve 
        the problems, and to the extent the Secretary deems 
        appropriate make recommendations on changes needed to 
        resolve the problems.

SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

  (a) Grants for Indian Tribes.--
          (1) Tribal family assistance grant.--
                  (A) In general.--For each of fiscal years 
                [1997, 1998, 1999, 2000, 2001, and 2002] 2003 
                through 2007, the Secretary shall pay to each 
                Indian tribe that has an approved tribal family 
                assistance plan a tribal family assistance 
                grant for the fiscal year in an amount equal to 
                the amount determined under subparagraph (B), 
                which shall be reduced for a fiscal year, on a 
                pro rata basis for each quarter, in the case of 
                a tribal family assistance plan approved during 
                a fiscal year for which the plan is to be in 
                effect, and shall reduce the grant payable 
                under section 403(a)(1) to any State in which 
                lies the service area or areas of the Indian 
                tribe by that portion of the amount so 
                determined that is attributable to expenditures 
                by the State.

           *       *       *       *       *       *       *

          (2) Grants for indian tribes that received jobs 
        funds.--
                  (A) In general.--For each of fiscal years 
                [1997, 1998, 1999, 2000, 2001, and 2002] 2003 
                through 2007, the Secretary shall pay to each 
                eligible Indian tribe that proposes to operate 
                a program described in subparagraph (C) a grant 
                in an amount equal to the amount received by 
                the Indian tribe in fiscal year 1994 under 
                section 482(i) (as in effect during fiscal year 
                1994).

           *       *       *       *       *       *       *

          (3) Welfare-to-work grants.--
                  (A) * * *
                  (B) Welfare-to-work tribe.--An Indian tribe 
                shall be considered a welfare-to-work tribe for 
                a fiscal year for purposes of this paragraph if 
                the Indian tribe meets the following 
                requirements:
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) The Indian tribe has agreed to 
                        negotiate in good faith with the 
                        Secretary of Health and Human Services 
                        with respect to the substance and 
                        funding of any evaluation under section 
                        [413(j)] 413(i), and to cooperate with 
                        the conduct of any such evaluation.
  (b) 3-Year Tribal Family Assistance Plan.--
          (1) In general.--Any Indian tribe that desires to 
        receive a tribal family assistance grant shall submit 
        to the Secretary a 3-year tribal family assistance plan 
        that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) identifies the employment opportunities 
                in or near the service area or areas of the 
                Indian tribe and the manner in which the Indian 
                tribe will cooperate and participate in 
                enhancing such opportunities for recipients of 
                assistance under the plan consistent with any 
                applicable State standards; [and]
                  (F) applies the fiscal accountability 
                provisions of section 5(f)(1) of the Indian 
                Self-Determination and Education Assistance Act 
                (25 U.S.C. 450c(f)(1)), relating to the 
                submission of a single-agency audit report 
                required by chapter 75 of title 31, United 
                States Code[.]; and
                  (G) provides an assurance that the State in 
                which the tribe is located has been consulted 
                regarding the plan and its design.

           *       *       *       *       *       *       *

  [(f) Eligibility for Federal Loans.--Section 406 shall apply 
to an Indian tribe with an approved tribal assistance plan in 
the same manner as such section applies to a State, except that 
section 406(c) shall be applied by substituting ``section 
412(a)'' for ``section 403(a)''.]
  [(g)] (f) Penalties.--
          (1) * * *

           *       *       *       *       *       *       *

  [(h)] (g) Data Collection and Reporting.--Section 411 shall 
apply to an Indian tribe with an approved tribal family 
assistance plan.
  [(i)] (h) Special Rule for Indian Tribes in Alaska.--
          (1) * * *

           *       *       *       *       *       *       *

SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Annual Ranking of States and Review of Most and Least 
Successful Work Programs.--
          (1) Annual ranking of states.--The Secretary shall 
        rank annually the States to which grants are paid under 
        section 403 in the order of their success in placing 
        recipients of assistance under the State program funded 
        under this part into [long-term private sector jobs] 
        private sector jobs, the success of the recipients in 
        retaining employment, the ability of the recipients to 
        increase their wages, reducing the overall welfare 
        caseload, and, when a practicable method for 
        calculating this information becomes available, 
        diverting individuals from formally applying to the 
        State program and receiving assistance. In ranking 
        States under this subsection, the Secretary shall take 
        into account the average number of minor children 
        living at home in families in the State that have 
        incomes below the poverty line and the amount of 
        funding provided each State for such families.
          (2) Annual review of most and least successful work 
        programs.--The Secretary shall review the programs of 
        the 3 States most recently ranked highest under 
        paragraph (1) and the 3 States most recently ranked 
        lowest under paragraph (1) that provide parents with 
        work experience, [assistance] aid in finding 
        employment, and other work preparation activities and 
        support services to enable the families of such parents 
        to leave the program and become self-sufficient.

           *       *       *       *       *       *       *

  [(g) Report on Circumstances of Certain Children and 
Families.--
          [(1) In general.--Beginning 3 years after the date of 
        the enactment of this section, the Secretary of Health 
        and Human Services shall prepare and submit to the 
        Committees on Ways and Means and on Education and the 
        Workforce of the House of Representatives and to the 
        Committees on Finance and on Labor and Resources of the 
        Senate annual reports that examine in detail the 
        matters described in paragraph (2) with respect to each 
        of the following groups for the period after such 
        enactment:
                  [(A) Individuals who were children in 
                families that have become ineligible for 
                assistance under a State program funded under 
                this part by reason of having reached a time 
                limit on the provision of such assistance.
                  [(B) Children born after such date of 
                enactment to parents who, at the time of such 
                birth, had not attained 20 years of age.
                  [(C) Individuals who, after such date of 
                enactment, became parents before attaining 20 
                years of age.
          [(2) Matters described.--The matters described in 
        this paragraph are the following:
                  [(A) The percentage of each group that has 
                dropped out of secondary school (or the 
                equivalent), and the percentage of each group 
                at each level of educational attainment.
                  [(B) The percentage of each group that is 
                employed.
                  [(C) The percentage of each group that has 
                been convicted of a crime or has been 
                adjudicated as a delinquent.
                  [(D) The rate at which the members of each 
                group are born, or have children, out-of-
                wedlock, and the percentage of each group that 
                is married.
                  [(E) The percentage of each group that 
                continues to participate in State programs 
                funded under this part.
                  [(F) The percentage of each group that has 
                health insurance provided by a private entity 
                (broken down by whether the insurance is 
                provided through an employer or otherwise), the 
                percentage that has health insurance provided 
                by an agency of government, and the percentage 
                that does not have health insurance.
                  [(G) The average income of the families of 
                the members of each group.
                  [(H) Such other matters as the Secretary 
                deems appropriate.]
  [(h)] (g) Funding of Studies and Demonstrations.--
          (1) In general.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated $15,000,000 for each of fiscal years [1997 
        through 2002] 2003 through 2007 for the purpose of 
        paying--
                  (A) * * *

           *       *       *       *       *       *       *

  [(i)] (h) Child Poverty Rates.--
          (1) * * *

           *       *       *       *       *       *       *

  [(j)] (i) Evaluation of Welfare-To-Work Programs.--
          (1) * * *
          (2) Reports to the congress.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), the Secretary, in consultation with 
                the Secretary of Labor and the Secretary of 
                Housing and Urban Development, shall submit to 
                the Congress reports on the projects funded 
                under [section] sections 403(a)(5) and 
                412(a)(3) and on the evaluations of the 
                projects.

           *       *       *       *       *       *       *

  (j) Performance Improvement.--The Secretary, in consultation 
with the National Governors' Association, the National 
Conference of State Legislatures, and the American Public Human 
Services Association, shall develop uniform performance 
measures designed to assess the degree of effectiveness, and 
the degree of improvement, of State programs funded under this 
part in accomplishing the purposes of this part.
  (k) Funding for Research, Demonstrations, and Technical 
Assistance.--
          (1) In general.--Out of any money in the Treasury of 
        the United States not otherwise appropriated, there are 
        appropriated $102,000,000 for each of fiscal years 2003 
        through 2007, which shall be available to the Secretary 
        for the purpose of conducting and supporting research 
        and demonstration projects by public or private 
        entities, and providing technical assistance to States, 
        Indian tribal organizations, and such other entities as 
        the Secretary may specify that are receiving a grant 
        under this part, which shall be expended primarily on 
        activities described in section 403(a)(2)(B), and which 
        shall be in addition to any other funds made available 
        under this part.
          (2) Set aside for demonstration projects for 
        coordination of provision of child welfare and tanf 
        services to tribal families at risk of child abuse or 
        neglect.--
                  (A) In general.--Of the amounts made 
                available under paragraph (1) for a fiscal 
                year, $2,000,000 shall be awarded on a 
                competitive basis to fund demonstration 
                projects designed to test the effectiveness of 
                tribal governments or tribal consortia in 
                coordinating the provision to tribal families 
                at risk of child abuse or neglect of child 
                welfare services and services under tribal 
                programs funded under this part.
                  (B) Use of funds.--A grant made to such a 
                project shall be used--
                          (i) to improve case management for 
                        families eligible for assistance from 
                        such a tribal program;
                          (ii) for supportive services and 
                        assistance to tribal children in out-
                        of-home placements and the tribal 
                        families caring for such children, 
                        including families who adopt such 
                        children; and
                          (iii) for prevention services and 
                        assistance to tribal families at risk 
                        of child abuse and neglect.
                  (C) Reports.--The Secretary may require a 
                recipient of funds awarded under this paragraph 
                to provide the Secretary with such information 
                as the Secretary deems relevant to enable the 
                Secretary to facilitate and oversee the 
                administration of any project for which funds 
                are provided under this paragraph.

           *       *       *       *       *       *       *

SEC. 414. STUDY BY THE CENSUS BUREAU.

  [(a) In General.--The Bureau of the Census shall continue to 
collect data on the 1992 and 1993 panels of the Survey of 
Income and Program Participation as necessary to obtain such 
information as will enable interested persons to evaluate the 
impact of the amendments made by title I of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
on a random national sample of recipients of assistance under 
State programs funded under this part and (as appropriate) 
other low-income families, and in doing so, shall pay 
particular attention to the issues of out-of-wedlock birth, 
welfare dependency, the beginning and end of welfare spells, 
and the causes of repeat welfare spells, and shall obtain 
information about the status of children participating in such 
panels.]
  (a) In General.--The Bureau of the Census shall implement a 
new longitudinal survey of program dynamics, developed in 
consultation with the Secretary and made available to 
interested parties, to allow for the assessment of the outcomes 
of continued welfare reform on the economic and child well-
being of low-income families with children, including those who 
received assistance or services from a State program funded 
under this part, and, to the extent possible, shall provide 
State representative samples. The content of the survey should 
include such information as may be necessary to examine the 
issues of out-of-wedlock childbearing, marriage, welfare 
dependency, the beginning and ending of spells of assistance, 
work, earnings and employment stability, and the well-being of 
children.
  (b) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are 
appropriated $10,000,000 for each of fiscal years [1996, 1997, 
1998, 1999, 2000, 2001, and 2002] 2003 through 2007 for payment 
to the Bureau of the Census to carry out subsection (a).

           *       *       *       *       *       *       *

SEC. 418. FUNDING FOR CHILD CARE.

  (a) General Child Care Entitlement.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Appropriation.--For grants under this section, 
        there are appropriated--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(F) $2,717,000,000 for fiscal year 2002.]
                  (F) $2,717,000,000 for each of fiscal years 
                2002 through 2007.

           *       *       *       *       *       *       *

SEC. 419. DEFINITIONS.

  As used in this part:
          (1) * * *

           *       *       *       *       *       *       *

          (6) Assistance.--
                  (A) In general.--The term ``assistance'' 
                means payment, by cash, voucher, or other 
                means, to or for an individual or family for 
                the purpose of meeting a subsistence need of 
                the individual or family (including food, 
                clothing, shelter, and related items, but not 
                including costs of transportation or child 
                care).
                  (B) Exception.--The term ``assistance'' does 
                not include a payment described in subparagraph 
                (A) to or for an individual or family on a 
                short-term, nonrecurring basis (as defined by 
                the State in accordance with regulations 
                prescribed by the Secretary).

           *       *       *       *       *       *       *

                       PART C--FATHERHOOD PROGRAM

SEC. 441. FINDINGS AND PURPOSES.

  (a) Findings.--The Congress finds that there is substantial 
evidence strongly indicating the urgent need to promote and 
support involved, committed, and responsible fatherhood, and to 
encourage and support healthy marriages between parents raising 
children, including data demonstrating the following:
          (1) In approximately 90 percent of cases where a 
        parent is absent, that parent is the father.
          (2) By some estimates, 60 percent of children born in 
        the 1990's will spend a significant portion of their 
        childhood in a home without a father.
          (3) Nearly 75 percent of children in single-parent 
        homes will experience poverty before they are 11 years 
        old, compared with only 20 percent of children in 2-
        parent families.
          (4) Low income is positively correlated with 
        children's difficulties with education, social 
        adjustment, and delinquency, and single-parent 
        households constitute a disproportionate share of low-
        income households.
          (5) Where families (whether intact or with a parent 
        absent) are living in poverty, a significant factor is 
        the father's lack of job skills.
          (6) Children raised in 2-parent married families, on 
        average, fare better as a group in key areas, including 
        better school performance, reduced rates of substance 
        abuse, crime, and delinquency, fewer health, emotional, 
        and behavioral problems, lower rates of teenage sexual 
        activity, less risk of abuse or neglect, and lower risk 
        of teen suicide.
          (7) Committed and responsible fathering during 
        infancy and early childhood contributes to the 
        development of emotional security, curiosity, and math 
        and verbal skills.
          (8) An estimated 24,000,000 children (33.5 percent) 
        live apart from their biological father.
          (9) A recent national survey indicates that of all 
        children under age 18 not living with their biological 
        father, 29 percent had not seen their father even once 
        in the last 12 months.
  (b) Purposes.--The purposes of this part are:
          (1) To provide for projects and activities by public 
        entities and by nonprofit community entities, including 
        religious organizations, designed to test promising 
        approaches to accomplishing the following objectives:
                  (A) Promoting responsible, caring, and 
                effective parenting through counseling, 
                mentoring, and parenting education, 
                dissemination of educational materials and 
                information on parenting skills, encouragement 
                of positive father involvement, including the 
                positive involvement of nonresident fathers, 
                and other methods.
                  (B) Enhancing the abilities and commitment of 
                unemployed or low-income fathers to provide 
                material support for their families and to 
                avoid or leave welfare programs by assisting 
                them to take full advantage of education, job 
                training, and job search programs, to improve 
                work habits and work skills, to secure career 
                advancement by activities such as outreach and 
                information dissemination, coordination, as 
                appropriate, with employment services and job 
                training programs, including the One-Stop 
                delivery system established under title I of 
                the Workforce Investment Act of 1998, 
                encouragement and support of timely payment of 
                current child support and regular payment 
                toward past due child support obligations in 
                appropriate cases, and other methods.
                  (C) Improving fathers' ability to effectively 
                manage family business affairs by means such as 
                education, counseling, and mentoring in matters 
                including household management, budgeting, 
                banking, and handling of financial 
                transactions, time management, and home 
                maintenance.
                  (D) Encouraging and supporting healthy 
                marriages and married fatherhood through such 
                activities as premarital education, including 
                the use of premarital inventories, marriage 
                preparation programs, skills-based marriage 
                education programs, marital therapy, couples 
                counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, 
                including those designed to reduce child abuse 
                and domestic violence, and dissemination of 
                information about the benefits of marriage for 
                both parents and children.
          (2) Through the projects and activities described in 
        paragraph (1), to improve outcomes for children with 
        respect to measures such as increased family income and 
        economic security, improved school performance, better 
        health, improved emotional and behavioral stability and 
        social adjustment, and reduced risk of delinquency, 
        crime, substance abuse, child abuse and neglect, teen 
        sexual activity, and teen suicide.
          (3) To evaluate the effectiveness of various 
        approaches and to disseminate findings concerning 
        outcomes and other information in order to encourage 
        and facilitate the replication of effective approaches 
        to accomplishing these objectives.

SEC. 442. DEFINITIONS.

  In this part, the terms ``Indian tribe'' and ``tribal 
organization'' have the meanings given them in subsections (e) 
and (l), respectively, of section 4 of the Indian Self-
Determination and Education Assistance Act.

SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

  (a) In General.--The Secretary may make grants for fiscal 
years 2003 through 2007 to public and nonprofit community 
entities, including religious organizations, and to Indian 
tribes and tribal organizations, for demonstration service 
projects and activities designed to test the effectiveness of 
various approaches to accomplish the objectives specified in 
section 441(b)(1).
  (b) Eligibility Criteria for Full Service Grants.--In order 
to be eligible for a grant under this section, except as 
specified in subsection (c), an entity shall submit an 
application to the Secretary containing the following:
          (1) Project description.--A statement including--
                  (A) a description of the project and how it 
                will be carried out, including the geographical 
                area to be covered and the number and 
                characteristics of clients to be served, and 
                how it will address each of the 4 objectives 
                specified in section 441(b)(1); and
                  (B) a description of the methods to be used 
                by the entity or its contractor to assess the 
                extent to which the project was successful in 
                accomplishing its specific objectives and the 
                general objectives specified in section 
                441(b)(1).
          (2) Experience and qualifications.--A demonstration 
        of ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying 
        out projects of similar design and scope, and such 
        other information as the Secretary may find necessary 
        to demonstrate the entity's capacity to carry out the 
        project, including the entity's ability to provide the 
        non-Federal share of project resources.
          (3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess 
        for the presence of, and intervene to resolve, domestic 
        violence and child abuse and neglect, including how the 
        entity will coordinate with State and local child 
        protective service and domestic violence programs.
          (4) Addressing concerns relating to substance abuse 
        and sexual activity.--A commitment to make available to 
        each individual participating in the project education 
        about alcohol, tobacco, and other drugs, and about the 
        health risks associated with abusing such substances, 
        and information about diseases and conditions 
        transmitted through substance abuse and sexual contact, 
        including HIV/AIDS, and to coordinate with providers of 
        services addressing such problems, as appropriate.
          (5) Coordination with specified programs.--An 
        undertaking to coordinate, as appropriate, with State 
        and local entities responsible for the programs under 
        parts A, B, and D of this title, including programs 
        under title I of the Workforce Investment Act of 1998 
        (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
          (6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits as the Secretary may find 
        necessary for purposes of oversight of project 
        activities and expenditures.
          (7) Self-initiated evaluation.--If the entity elects 
        to contract for independent evaluation of the project 
        (part or all of the cost of which may be paid for using 
        grant funds), a commitment to submit to the Secretary a 
        copy of the evaluation report within 30 days after 
        completion of the report and not more than 1 year after 
        completion of the project.
          (8) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the 
        Secretary's evaluation of projects assisted under this 
        section, by means including random assignment of 
        clients to service recipient and control groups, if 
        determined by the Secretary to be appropriate, and 
        affording the Secretary access to the project and to 
        project-related records and documents, staff, and 
        clients.
  (c) Eligibility Criteria for Limited Purpose Grants.--In 
order to be eligible for a grant under this section in an 
amount under $25,000 per fiscal year, an entity shall submit an 
application to the Secretary containing the following:
          (1) Project description.--A description of the 
        project and how it will be carried out, including the 
        number and characteristics of clients to be served, the 
        proposed duration of the project, and how it will 
        address at least 1 of the 4 objectives specified in 
        section 441(b)(1).
          (2) Qualifications.--Such information as the 
        Secretary may require as to the capacity of the entity 
        to carry out the project, including any previous 
        experience with similar activities.
          (3) Coordination with related programs.--As required 
        by the Secretary in appropriate cases, an undertaking 
        to coordinate and cooperate with State and local 
        entities responsible for specific programs relating to 
        the objectives of the project including, as 
        appropriate, jobs programs and programs serving 
        children and families.
          (4) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits as the Secretary may find 
        necessary for purposes of oversight of project 
        activities and expenditures.
          (5) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the 
        Secretary's evaluation of projects assisted under this 
        section, by means including affording the Secretary 
        access to the project and to project-related records 
        and documents, staff, and clients.
  (d) Considerations in Awarding Grants.--
          (1) Diversity of projects.--In awarding grants under 
        this section, the Secretary shall seek to achieve a 
        balance among entities of differing sizes, entities in 
        differing geographic areas, entities in urban and in 
        rural areas, and entities employing differing methods 
        of achieving the purposes of this section, including 
        working with the State agency responsible for the 
        administration of part D to help fathers satisfy child 
        support arrearage obligations.
          (2) Preference for projects serving low-income 
        fathers.--In awarding grants under this section, the 
        Secretary may give preference to applications for 
        projects in which a majority of the clients to be 
        served are low-income fathers.
  (e) Federal Share.--
          (1) In general.--Grants for a project under this 
        section for a fiscal year shall be available for a 
        share of the cost of such project in such fiscal year 
        equal to--
                  (A) up to 80 percent (or up to 90 percent, if 
                the entity demonstrates to the Secretary's 
                satisfaction circumstances limiting the 
                entity's ability to secure non-Federal 
                resources) in the case of a project under 
                subsection (b); and
                  (B) up to 100 percent, in the case of a 
                project under subsection (c).
          (2) Non-federal share.--The non-Federal share may be 
        in cash or in kind. In determining the amount of the 
        non-Federal share, the Secretary may attribute fair 
        market value to goods, services, and facilities 
        contributed from non-Federal sources.

SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

  (a) In General.--The Secretary may make grants under this 
section for fiscal years 2003 through 2007 to eligible entities 
(as specified in subsection (b)) for 2 multicity, multistate 
projects demonstrating approaches to achieving the objectives 
specified in section 441(b)(1). One of the projects shall test 
the use of married couples to deliver program services.
  (b) Eligible Entities.--An entity eligible for a grant under 
this section must be a national nonprofit fatherhood promotion 
organization that meets the following requirements:
          (1) Experience with fatherhood programs.--The 
        organization must have substantial experience in 
        designing and successfully conducting programs that 
        meet the purposes described in section 441.
          (2) Experience with multicity, multistate programs 
        and government coordination.--The organization must 
        have experience in simultaneously conducting such 
        programs in more than 1 major metropolitan area in more 
        than 1 State and in coordinating such programs, where 
        appropriate, with State and local government agencies 
        and private, nonprofit agencies (including community-
        based and religious organizations), including State or 
        local agencies responsible for child support 
        enforcement and workforce development.
  (c) Application Requirements.--In order to be eligible for a 
grant under this section, an entity must submit to the 
Secretary an application that includes the following:
          (1) Qualifications.--
                  (A) Eligible entity.--A demonstration that 
                the entity meets the requirements of subsection 
                (b).
                  (B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, 
                including the entity's ability to provide the 
                non-Federal share of project resources.
          (2) Project description.--A description of and 
        commitments concerning the project design, including 
        the following:
                  (A) In general.--A detailed description of 
                the proposed project design and how it will be 
                carried out, which shall--
                          (i) provide for the project to be 
                        conducted in at least 3 major 
                        metropolitan areas;
                          (ii) state how it will address each 
                        of the 4 objectives specified in 
                        section 441(b)(1);
                          (iii) demonstrate that there is a 
                        sufficient number of potential clients 
                        to allow for the random selection of 
                        individuals to participate in the 
                        project and for comparisons with 
                        appropriate control groups composed of 
                        individuals who have not participated 
                        in such projects; and
                          (iv) demonstrate that the project is 
                        designed to direct a majority of 
                        project resources to activities serving 
                        low-income fathers (but the project 
                        need not make services available on a 
                        means-tested basis).
                  (B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                          (i) in consultation with the 
                        evaluator selected pursuant to section 
                        445, and as required by the Secretary, 
                        will modify the project design, 
                        initially and (if necessary) 
                        subsequently throughout the duration of 
                        the project, in order to facilitate 
                        ongoing and final oversight and 
                        evaluation of project operation and 
                        outcomes (by means including, to the 
                        maximum extent feasible, random 
                        assignment of clients to service 
                        recipient and control groups), and to 
                        provide for mid-course adjustments in 
                        project design indicated by interim 
                        evaluations;
                          (ii) will submit to the Secretary 
                        revised descriptions of the project 
                        design as modified in accordance with 
                        clause (i); and
                          (iii) will cooperate fully with the 
                        Secretary's ongoing oversight and 
                        ongoing and final evaluation of the 
                        project, by means including affording 
                        the Secretary access to the project and 
                        to project-related records and 
                        documents, staff, and clients.
          (3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess 
        for the presence of, and intervene to resolve, domestic 
        violence and child abuse and neglect, including how the 
        entity will coordinate with State and local child 
        protective service and domestic violence programs.
          (4) Addressing concerns relating to substance abuse 
        and sexual activity.--A commitment to make available to 
        each individual participating in the project education 
        about alcohol, tobacco, and other drugs, and about the 
        health risks associated with abusing such substances, 
        and information about diseases and conditions 
        transmitted through substance abuse and sexual contact, 
        including HIV/AIDS, and to coordinate with providers of 
        services addressing such problems, as appropriate.
          (5) Coordination with specified programs.--An 
        undertaking to coordinate, as appropriate, with State 
        and local entities responsible for the programs funded 
        under parts A, B, and D of this title, programs under 
        title I of the Workforce Investment Act of 1998 
        (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
          (6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits (in addition to those 
        required under the preceding provisions of paragraph 
        (2)) as the Secretary may find necessary for purposes 
        of oversight of project activities and expenditures.
  (d) Federal Share.--
          (1) In general.--Grants for a project under this 
        section for a fiscal year shall be available for up to 
        80 percent of the cost of such project in such fiscal 
        year.
          (2) Non-federal share.--The non-Federal share may be 
        in cash or in kind. In determining the amount of the 
        non-Federal share, the Secretary may attribute fair 
        market value to goods, services, and facilities 
        contributed from non-Federal sources.

SEC. 445. EVALUATION.

  (a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of 
service projects funded under sections 443 and 444 from the 
standpoint of the purposes specified in section 441(b)(1).
  (b) Evaluation Methodology.--Evaluations under this section 
shall--
          (1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control 
        groups and other appropriate comparisons of groups of 
        individuals receiving and not receiving services;
          (2) describe and measure the effectiveness of the 
        projects in achieving their specific project goals; and
          (3) describe and assess, as appropriate, the impact 
        of such projects on marriage, parenting, domestic 
        violence, child abuse and neglect, money management, 
        employment and earnings, payment of child support, and 
        child well-being, health, and education.
  (c) Evaluation Reports.--The Secretary shall publish the 
following reports on the results of the evaluation:
          (1) An implementation evaluation report covering the 
        first 24 months of the activities under this part to be 
        completed by 36 months after initiation of such 
        activities.
          (2) A final report on the evaluation to be completed 
        by September 30, 2010.

SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

  The Secretary is authorized, by grant, contract, or 
cooperative agreement, to carry out projects and activities of 
national significance relating to fatherhood promotion, 
including--
          (1) Collection and dissemination of information.--
        Assisting States, communities, and private entities, 
        including religious organizations, in efforts to 
        promote and support marriage and responsible fatherhood 
        by collecting, evaluating, developing, and making 
        available (through the Internet and by other means) to 
        all interested parties information regarding approaches 
        to accomplishing the objectives specified in section 
        441(b)(1).
          (2) Media campaign.--Developing, promoting, and 
        distributing to interested States, local governments, 
        public agencies, and private nonprofit organizations, 
        including charitable and religious organizations, a 
        media campaign that promotes and encourages involved, 
        committed, and responsible fatherhood and married 
        fatherhood.
          (3) Technical assistance.--Providing technical 
        assistance, including consultation and training, to 
        public and private entities, including community 
        organizations and faith-based organizations, in the 
        implementation of local fatherhood promotion programs.
          (4) Research.--Conducting research related to the 
        purposes of this part.

SEC. 447. NONDISCRIMINATION.

  The projects and activities assisted under this part shall be 
available on the same basis to all fathers and expectant 
fathers able to benefit from such projects and activities, 
including married and unmarried fathers and custodial and 
noncustodial fathers, with particular attention to low-income 
fathers, and to mothers and expectant mothers on the same basis 
as to fathers.

SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN 
                    PURPOSE.

  (a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2003 through 2007 to carry 
out the provisions of this part.
  (b) Reservation.--Of the amount appropriated under this 
section for each fiscal year, not more than 15 percent shall be 
available for the costs of the multicity, multicounty, 
multistate demonstration projects under section 444, 
evaluations under section 445, and projects of national 
significance under section 446.

Part D--Child Support and Establishment of Paternity

           *       *       *       *       *       *       *

                        DUTIES OF THE SECRETARY

  Sec. 452. (a) * * *

           *       *       *       *       *       *       *

  (j) Out of any money in the Treasury of the United States not 
otherwise appropriated, there is hereby appropriated to the 
Secretary for each fiscal year an amount equal to 1 percent of 
the total amount paid to the Federal Government pursuant to a 
plan approved under this part during the immediately preceding 
fiscal year (as determined on the basis of the most recent 
reliable data available to the Secretary as of the end of the 
third calendar quarter following the end of such preceding 
fiscal year), or the amount appropriated under this paragraph 
for fiscal year 2002, whichever is greater, which shall be 
available for use by the Secretary, either directly or through 
grants, contracts, or interagency agreements, for--
          (1) * * *

           *       *       *       *       *       *       *

  (k)(1) If the Secretary receives a certification by a State 
agency in accordance with the requirements of section 454(31) 
that an individual owes arrearages of child support in an 
amount exceeding [$5,000] $2,500, the Secretary shall transmit 
such certification to the Secretary of State for action (with 
respect to denial, revocation, or limitation of passports) 
pursuant to paragraph (2).

           *       *       *       *       *       *       *

                     FEDERAL PARENT LOCATOR SERVICE

  Sec. 453. (a) * * *

           *       *       *       *       *       *       *

  (j) Information Comparisons and Other Disclosures.--
          (1) * * *

           *       *       *       *       *       *       *

          (7) Information comparisons and disclosure to assist 
        in administration of unemployment compensation 
        programs.--
                  (A) In general.--If a State agency 
                responsible for the administration of an 
                unemployment compensation program under Federal 
                or State law transmits to the Secretary the 
                name and social security account number of an 
                individual, the Secretary shall, if the 
                information in the National Directory of New 
                Hires indicates that the individual may be 
                employed, disclose to the State agency the 
                name, address, and employer identification 
                number of any putative employer of the 
                individual, subject to this paragraph.
                  (B) Condition on disclosure.--The Secretary 
                shall make a disclosure under subparagraph (A) 
                only to the extent that the Secretary 
                determines that the disclosure would not 
                interfere with the effective operation of the 
                program under this part.
                  (C) Use of information.--A State agency may 
                use information provided under this paragraph 
                only for purposes of administering a program 
                referred to in subparagraph (A).

           *       *       *       *       *       *       *

  (o) Use of Set-Aside Funds.--Out of any money in the Treasury 
of the United States not otherwise appropriated, there is 
hereby appropriated to the Secretary for each fiscal year an 
amount equal to 2 percent of the total amount paid to the 
Federal Government pursuant to a plan approved under this part 
during the immediately preceding fiscal year (as determined on 
the basis of the most recent reliable data available to the 
Secretary as of the end of the third calendar quarter following 
the end of such preceding fiscal year), or the amount 
appropriated under this paragraph for fiscal year 2002, 
whichever is greater, which shall be available for use by the 
Secretary, either directly or through grants, contracts, or 
interagency agreements, for operation of the Federal Parent 
Locator Service under this section, to the extent such costs 
are not recovered through user fees. Amounts appropriated under 
this subsection [for each of fiscal years 1997 through 2001] 
shall remain available until expended.

           *       *       *       *       *       *       *

                STATE PLAN FOR CHILD AND SPOUSAL SUPPORT

  Sec. 454. A State plan for child and spousal support must--
          (1) * * *

           *       *       *       *       *       *       *

          (6) provide that--
                  (A) * * *
                  (B)(i) an application fee for furnishing such 
                services shall be imposed on an individual, 
                other than an individual receiving assistance 
                under a State program funded under part A or E, 
                or under a State plan approved under title XIX, 
                or who is required by the State to cooperate 
                with the State agency administering the program 
                under this part pursuant to subsection (l) or 
                (m) of section 6 of the Food Stamp Act of 1977, 
                and shall be paid by the individual applying 
                for such services, or recovered from the absent 
                parent, or paid by the State out of its own 
                funds (the payment of which from State funds 
                shall not be considered as an administrative 
                cost of the State for the operation of the 
                plan, and shall be considered income to the 
                program), the amount of which [(i)] (I) will 
                not exceed $25 (or such higher or lower amount 
                (which shall be uniform for all States) as the 
                Secretary may determine to be appropriate for 
                any fiscal year to reflect increases or 
                decreases in administrative costs), and [(ii)] 
                (II) may vary among such individuals on the 
                basis of ability to pay (as determined by the 
                State); and
                  (ii) in the case of an individual who has 
                never received assistance under a State program 
                funded under part A and for whom the State has 
                collected at least $500 of support, the State 
                shall impose an annual fee of $25 for each case 
                in which services are furnished, which shall be 
                retained by the State from support collected on 
                behalf of the individual (but not from the 1st 
                $500 so collected), paid by the individual 
                applying for the services, recovered from the 
                absent parent, or paid by the State out of its 
                own funds (the payment of which from State 
                funds shall not be considered as an 
                administrative cost of the State for the 
                operation of the plan, and shall be considered 
                income to the program);

           *       *       *       *       *       *       *

          (31) provide that the State agency will have in 
        effect a procedure for certifying to the Secretary, for 
        purposes of the procedure under section 452(k), 
        determinations that individuals owe arrearages of child 
        support in an amount exceeding [$5,000] $2,500, under 
        which procedure--
                  (A) * * *

           *       *       *       *       *       *       *

SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

  (a) In General.--Subject to subsections (d) and (e), an 
amount collected on behalf of a family as support by a State 
pursuant to a plan approved under this part shall be 
distributed as follows:
          (1) Families receiving assistance.--In the case of a 
        family receiving assistance from the State, the State 
        shall--
                  (A) pay to the Federal Government the Federal 
                share of the amount so collected subject to 
                paragraph (7); and
          (2) Families that formerly received assistance.--In 
        the case of a family that formerly received assistance 
        from the State:
                  (A) * * *
                  (B) Payments of arrearages.--To the extent 
                that the amount so collected exceeds the amount 
                required to be paid to the family for the month 
                in which collected, the State shall, except as 
                provided in paragraph (8), distribute the 
                amount so collected as follows:
                          (i) * * *

           *       *       *       *       *       *       *

          [(3) Families that never received assistance.--In the 
        case of any other family, the State shall distribute 
        the amount so collected to the family.]
          (3) Families that never received assistance.--In the 
        case of any other family, the State shall distribute to 
        the family the portion of the amount so collected that 
        remains after withholding any fee pursuant to section 
        454(6)(B)(ii).

           *       *       *       *       *       *       *

          (7) Federal matching funds for limited pass through 
        of child support payments to families receiving tanf.--
        Notwithstanding paragraph (1), a State shall not be 
        required to pay to the Federal Government the Federal 
        share of an amount collected during a month on behalf 
        of a family that is a recipient of assistance under the 
        State program funded under part A, to the extent that--
                  (A) the State distributes the amount to the 
                family;
                  (B) the total of the amounts so distributed 
                to the family during the month--
                          (i) exceeds the amount (if any) that, 
                        as of December 31, 2001, was required 
                        under State law to be distributed to a 
                        family under paragraph (1)(B); and
                          (ii) does not exceed the greater of--
                                  (I) $100; or
                                  (II) $50 plus the amount 
                                described in clause (i); and
                  (C) the amount is disregarded in determining 
                the amount and type of assistance provided to 
                the family under the State program funded under 
                part A.
          (8) State option to pass through all child support 
        payments to families that formerly received tanf.--In 
        lieu of applying paragraph (2) to any family described 
        in paragraph (2), a State may distribute to the family 
        any amount collected during a month on behalf of the 
        family.

           *       *       *       *       *       *       *

SEC. 459. CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, 
                    GARNISHMENT, AND SIMILAR PROCEEDINGS FOR 
                    ENFORCEMENT OF CHILD SUPPORT AND ALIMONY 
                    OBLIGATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (h) Moneys Subject to Process.--
          (1) In general.--Subject to paragraph (2), moneys 
        payable to an individual which are considered to be 
        based upon remuneration for employment, for purposes of 
        this section--
                  (A) consist of--
                          (i) * * *
                          (ii) periodic benefits (including a 
                        periodic benefit as defined in section 
                        228(h)(3)) or other payments--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (V) by the Secretary of 
                                Veterans Affairs as 
                                compensation for a service-
                                connected disability paid by 
                                the Secretary to a former 
                                member of the Armed Forces [who 
                                is in receipt of retired or 
                                retainer pay if the former 
                                member has waived a portion of 
                                the retired or retainer pay in 
                                order to receive such 
                                compensation];

           *       *       *       *       *       *       *

          (3) Limitations with respect to compensation paid to 
        veterans for service-connected disabilities.--
        Notwithstanding any other provision of this section:
                  (A) Compensation described in paragraph 
                (1)(A)(ii)(V) shall not be subject to 
                withholding pursuant to this section--
                          (i) for payment of alimony; or
                          (ii) for payment of child support if 
                        the individual is fewer than 60 days in 
                        arrears in payment of the support.
                  (B) Not more than 50 percent of any payment 
                of compensation described in paragraph 
                (1)(A)(ii)(V) may be withheld pursuant to this 
                section.

           *       *       *       *       *       *       *

        COLLECTION OF PAST-DUE SUPPORT FROM FEDERAL TAX REFUNDS

  Sec. 464. (a)(1) * * *
  (2)(A) Upon receiving notice from a State agency 
administering a plan approved under this part that a named 
individual owes past-due support [(as that term is defined for 
purposes of this paragraph under subsection (c))] which such 
State has agreed to collect under section 454(4)(A)(ii), and 
that the State agency has sent notice to such individual in 
accordance with paragraph (3)(A), the Secretary of the Treasury 
shall determine whether any amounts, as refunds of Federal 
taxes paid, are payable to such individual (regardless of 
whether such individual filed a tax return as a married or 
unmarried individual). If the Secretary of the Treasury finds 
that any such amount is payable, he shall withhold from such 
refunds an amount equal to such past-due support, and shall 
concurrently send notice to such individual that the 
withholding has been made, including in or with such notice a 
notification to any other person who may have filed a joint 
return with such individual of the steps which such other 
person may take in order to secure his or her proper share of 
the refund. The Secretary of the Treasury shall pay the amount 
withheld to the State agency, and the State shall pay to the 
Secretary of the Treasury any fee imposed by the Secretary of 
the Treasury to cover the costs of the withholding and any 
required notification. The State agency shall, subject to 
paragraph (3)(B), distribute such amount to or on behalf of the 
child to whom the support was owed in accordance with section 
457. This subsection may be executed by the Secretary of the 
Department of the Treasury or his designee.

           *       *       *       *       *       *       *

  (c)[(1) Except as provided in paragraph (2), as used in] In 
this part the term ``past-due support'' means the amount of a 
delinquency, determined under a court order, or an order of an 
administrative process established under State law, for support 
and maintenance of a child (whether or not a minor), or of a 
child (whether or not a minor) and the parent with whom the 
child is living.
  [(2) For purposes of subsection (a)(2), the term ``past-due 
support'' means only past-due support owed to or on behalf of a 
qualified child (or a qualified child and the parent with whom 
the child is living if the same support order includes support 
for the child and the parent).
  [(3) For purposes of paragraph (2), the term ``qualified 
child'' means a child--
          [(A) who is a minor; or
          [(B)(i) who, while a minor, was determined to be 
        disabled under title II or XVI; and
          [(ii) for whom an order of support is in force.]

           *       *       *       *       *       *       *

      REQUIREMENT OF STATUTORILY PRESCRIBED PROCEDURES TO IMPROVE 
               EFFECTIVENESS OF CHILD SUPPORT ENFORCEMENT

  Sec. 466. (a) In order to satisfy section 454(20)(A), each 
State must have in effect laws requiring the use of the 
following procedures, consistent with this section and with 
regulations of the Secretary, to increase the effectiveness of 
the program which the State administers under this part:
          (1) * * *

           *       *       *       *       *       *       *

          (10) Review and adjustment of support orders upon 
        request.--
                  (A) 3-year cycle.--
                          (i) In general.--Procedures under 
                        which every 3 years (or such shorter 
                        cycle as the State may determine), upon 
                        the request of either [parent, or,] 
                        parent or if there is an assignment 
                        under part A, [upon the request of the 
                        State agency under the State plan or of 
                        either parent,] the State shall with 
                        respect to a support order being 
                        enforced under this part, taking into 
                        account the best interests of the child 
                        involved--
                                  (I) * * *

           *       *       *       *       *       *       *

     TITLE XI--GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE 
SIMPLIFICATION

           *       *       *       *       *       *       *

Part A--General Provisions

           *       *       *       *       *       *       *

SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, GUAM, 
                    AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS.

  (a) Limitation on Total Payments to Each Territory.--
          (1) * * *
          (2) Certain payments disregarded.--Paragraph (1) of 
        this subsection shall be applied without regard to any 
        payment made under section 403(a)(2), 403(a)(4), 
        403(a)(5), [406,] or 413(f).
  (b) Entitlement to Matching Grant.--
          (1) * * *
          (2) Appropriation.--Out of any money in the Treasury 
        of the United States not otherwise appropriated, there 
        are appropriated for fiscal years [1997 through 2002] 
        2003 through 2007, such sums as are necessary for 
        grants under this paragraph.

           *       *       *       *       *       *       *

                         demonstration projects

  Sec. 1130. (a) Authority To Approve Demonstration Projects.--
          (1) * * *
          (2) Limitation.--The Secretary may authorize [not 
        more than 10] demonstration projects under paragraph 
        (1) in each of fiscal years 1998 through [2002] 2007.

           *       *       *       *       *       *       *

  (b) Waiver Authority.--The Secretary may waive compliance 
with any requirement of part B or E of title IV which (if 
applied) would prevent a State from carrying out a 
demonstration project under this section or prevent the State 
from effectively achieving the purpose of such a project, 
except that the Secretary may not waive--
          (1) any provision of section 427 (as in effect before 
        April 1, 1996), section [422(b)(9)] 422(b)(10) (as in 
        effect after such date), or section 479; or

           *       *       *       *       *       *       *

  (h) No Limit on Number of States That May Be Granted Waivers 
To Conduct Same or Similar Demonstration Projects.--The 
Secretary shall not refuse to grant a waiver to a State under 
this section on the grounds that a purpose of the waiver or of 
the demonstration project for which the waiver is necessary 
would be the same as or similar to a purpose of another waiver 
or project that is or may be conducted under this section.
  (i) No Limit on Number of Waivers Granted to, or 
Demonstration Projects That May Be Conducted by, a Single 
State.--The Secretary shall not impose any limit on the number 
of waivers that may be granted to a State, or the number of 
demonstration projects that a State may be authorized to 
conduct, under this section.
  (j) Streamlined Process for Consideration of Amendments and 
Extensions.--The Secretary shall develop a streamlined process 
for consideration of amendments and extensions proposed by 
States to demonstration projects conducted under this section.
  (k) Availability of Reports.--The Secretary shall make 
available to any State or other interested party any report 
provided to the Secretary under subsection (f)(2), and any 
evaluation or report made by the Secretary with respect to a 
demonstration project conducted under this section, with a 
focus on information that may promote best practices and 
program improvements.

           *       *       *       *       *       *       *

   TITLE XVI--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

           *       *       *       *       *       *       *

               Part B--Procedural and General Provisions

                             ADMINISTRATION

  Sec. 1633. (a) * * *

           *       *       *       *       *       *       *

  (e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection 
(a) in connection with applications for benefits under this 
title on the basis of blindness or disability, that individuals 
who have attained 18 years of age are blind or disabled as of a 
specified onset date. The Commissioner of Social Security shall 
review such a determination before any action is taken to 
implement the determination.
  (2)(A) In carrying out paragraph (1), the Commissioner of 
Social Security shall review--
          (i) at least 20 percent of all determinations 
        referred to in paragraph (1) that are made in fiscal 
        year 2003;
          (ii) at least 40 percent of all such determinations 
        that are made in fiscal year 2004; and
          (iii) at least 50 percent of all such determinations 
        that are made in fiscal year 2005 or thereafter.
  (B) In carrying out subparagraph (A), the Commissioner of 
Social Security shall, to the extent feasible, select for 
review the determinations which the Commissioner of Social 
Security identifies as being the most likely to be incorrect.

           *       *       *       *       *       *       *

                              ----------                              

PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

           *       *       *       *       *       *       *

SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is as follows:

    TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Sec. 101. Findings.
     * * * * * * *
Sec. 117. Fatherhood program.
     * * * * * * *

TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

           *       *       *       *       *       *       *

SEC. 117. FATHERHOOD PROGRAM.

  (a) In General.--Title IV (42 U.S.C. 601-679b) is amended by 
inserting after part B the following:

                      ``PART C--FATHERHOOD PROGRAM

``SEC. 441. FINDINGS AND PURPOSES.

  ``(a) Findings.--The Congress finds that there is substantial 
evidence strongly indicating the urgent need to promote and 
support involved, committed, and responsible fatherhood, and to 
encourage and support healthy marriages between parents raising 
children, including data demonstrating the following:
          ``(1) In approximately 90 percent of cases where a 
        parent is absent, that parent is the father.
          ``(2) By some estimates, 60 percent of children born 
        in the 1990's will spend a significant portion of their 
        childhood in a home without a father.
          ``(3) Nearly 75 percent of children in single-parent 
        homes will experience poverty before they are 11 years 
        old, compared with only 20 percent of children in 2-
        parent families.
          ``(4) Low income is positively correlated with 
        children's difficulties with education, social 
        adjustment, and delinquency, and single-parent 
        households constitute a disproportionate share of low-
        income households.
          ``(5) Where families (whether intact or with a parent 
        absent) are living in poverty, a significant factor is 
        the father's lack of job skills.
          ``(6) Children raised in 2-parent married families, 
        on average, fare better as a group in key areas, 
        including better school performance, reduced rates of 
        substance abuse, crime, and delinquency, fewer health, 
        emotional, and behavioral problems, lower rates of 
        teenage sexual activity, less risk of abuse or neglect, 
        and lower risk of teen suicide.
          ``(7) Committed and responsible fathering during 
        infancy and early childhood contributes to the 
        development of emotional security, curiosity, and math 
        and verbal skills.
          ``(8) An estimated 24,000,000 children (33.5 percent) 
        live apart from their biological father.
          ``(9) A recent national survey indicates that of all 
        children under age 18 not living with their biological 
        father, 29 percent had not seen their father even once 
        in the last 12 months.
  ``(b) Purposes.--The purposes of this part are:
          ``(1) To provide for projects and activities by 
        public entities and by nonprofit community entities, 
        including religious organizations, designed to test 
        promising approaches to accomplishing the following 
        objectives:
                  ``(A) Promoting responsible, caring, and 
                effective parenting through counseling, 
                mentoring, and parenting education, 
                dissemination of educational materials and 
                information on parenting skills, encouragement 
                of positive father involvement, including the 
                positive involvement of nonresident fathers, 
                and other methods.
                  ``(B) Enhancing the abilities and commitment 
                of unemployed or low-income fathers to provide 
                material support for their families and to 
                avoid or leave welfare programs by assisting 
                them to take full advantage of education, job 
                training, and job search programs, to improve 
                work habits and work skills, to secure career 
                advancement by activities such as outreach and 
                information dissemination, coordination, as 
                appropriate, with employment services and job 
                training programs, including the One-Stop 
                delivery system established under title I of 
                the Workforce Investment Act of 1998, 
                encouragement and support of timely payment of 
                current child support and regular payment 
                toward past due child support obligations in 
                appropriate cases, and other methods.
                  ``(C) Improving fathers' ability to 
                effectively manage family business affairs by 
                means such as education, counseling, and 
                mentoring in matters including household 
                management, budgeting, banking, and handling of 
                financial transactions, time management, and 
                home maintenance.
                  ``(D) Encouraging and supporting healthy 
                marriages and married fatherhood through such 
                activities as premarital education, including 
                the use of premarital inventories, marriage 
                preparation programs, skills-based marriage 
                education programs, marital therapy, couples 
                counseling, divorce education and reduction 
                programs, divorce mediation and counseling, 
                relationship skills enhancement programs, 
                including those designed to reduce child abuse 
                and domestic violence, and dissemination of 
                information about the benefits of marriage for 
                both parents and children.
          ``(2) Through the projects and activities described 
        in paragraph (1), to improve outcomes for children with 
        respect to measures such as increased family income and 
        economic security, improved school performance, better 
        health, improved emotional and behavioral stability and 
        social adjustment, and reduced risk of delinquency, 
        crime, substance abuse, child abuse and neglect, teen 
        sexual activity, and teen suicide.
          ``(3) To evaluate the effectiveness of various 
        approaches and to disseminate findings concerning 
        outcomes and other information in order to encourage 
        and facilitate the replication of effective approaches 
        to accomplishing these objectives.

``SEC. 442. DEFINITIONS.

  ``In this part, the terms `Indian tribe' and `tribal 
organization' have the meanings given them in subsections (e) 
and (l), respectively, of section 4 of the Indian Self-
Determination and Education Assistance Act.

``SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

  ``(a) In General.--The Secretary may make grants for fiscal 
years 2003 through 2007 to public and nonprofit community 
entities, including religious organizations, and to Indian 
tribes and tribal organizations, for demonstration service 
projects and activities designed to test the effectiveness of 
various approaches to accomplish the objectives specified in 
section 441(b)(1).
  ``(b) Eligibility Criteria for Full Service Grants.--In order 
to be eligible for a grant under this section, except as 
specified in subsection (c), an entity shall submit an 
application to the Secretary containing the following:
          ``(1) Project description.--A statement including--
                  ``(A) a description of the project and how it 
                will be carried out, including the geographical 
                area to be covered and the number and 
                characteristics of clients to be served, and 
                how it will address each of the 4 objectives 
                specified in section 441(b)(1); and
                  ``(B) a description of the methods to be used 
                by the entity or its contractor to assess the 
                extent to which the project was successful in 
                accomplishing its specific objectives and the 
                general objectives specified in section 
                441(b)(1).
          ``(2) Experience and qualifications.--A demonstration 
        of ability to carry out the project, by means such as 
        demonstration of experience in successfully carrying 
        out projects of similar design and scope, and such 
        other information as the Secretary may find necessary 
        to demonstrate the entity's capacity to carry out the 
        project, including the entity's ability to provide the 
        non-Federal share of project resources.
          ``(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess 
        for the presence of, and intervene to resolve, domestic 
        violence and child abuse and neglect, including how the 
        entity will coordinate with State and local child 
        protective service and domestic violence programs.
          ``(4) Addressing concerns relating to substance abuse 
        and sexual activity.--A commitment to make available to 
        each individual participating in the project education 
        about alcohol, tobacco, and other drugs, and about the 
        health risks associated with abusing such substances, 
        and information about diseases and conditions 
        transmitted through substance abuse and sexual contact, 
        including HIV/AIDS, and to coordinate with providers of 
        services addressing such problems, as appropriate.
          ``(5) Coordination with specified programs.--An 
        undertaking to coordinate, as appropriate, with State 
        and local entities responsible for the programs under 
        parts A, B, and D of this title, including programs 
        under title I of the Workforce Investment Act of 1998 
        (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
          ``(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits as the Secretary may find 
        necessary for purposes of oversight of project 
        activities and expenditures.
          ``(7) Self-initiated evaluation.--If the entity 
        elects to contract for independent evaluation of the 
        project (part or all of the cost of which may be paid 
        for using grant funds), a commitment to submit to the 
        Secretary a copy of the evaluation report within 30 
        days after completion of the report and not more than 1 
        year after completion of the project.
          ``(8) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the 
        Secretary's evaluation of projects assisted under this 
        section, by means including random assignment of 
        clients to service recipient and control groups, if 
        determined by the Secretary to be appropriate, and 
        affording the Secretary access to the project and to 
        project-related records and documents, staff, and 
        clients.
  ``(c) Eligibility Criteria for Limited Purpose Grants.--In 
order to be eligible for a grant under this section in an 
amount under $25,000 per fiscal year, an entity shall submit an 
application to the Secretary containing the following:
          ``(1) Project description.--A description of the 
        project and how it will be carried out, including the 
        number and characteristics of clients to be served, the 
        proposed duration of the project, and how it will 
        address at least 1 of the 4 objectives specified in 
        section 441(b)(1).
          ``(2) Qualifications.--Such information as the 
        Secretary may require as to the capacity of the entity 
        to carry out the project, including any previous 
        experience with similar activities.
          ``(3) Coordination with related programs.--As 
        required by the Secretary in appropriate cases, an 
        undertaking to coordinate and cooperate with State and 
        local entities responsible for specific programs 
        relating to the objectives of the project including, as 
        appropriate, jobs programs and programs serving 
        children and families.
          ``(4) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits as the Secretary may find 
        necessary for purposes of oversight of project 
        activities and expenditures.
          ``(5) Cooperation with secretary's oversight and 
        evaluation.--An agreement to cooperate with the 
        Secretary's evaluation of projects assisted under this 
        section, by means including affording the Secretary 
        access to the project and to project-related records 
        and documents, staff, and clients.
  ``(d) Considerations in Awarding Grants.--
          ``(1) Diversity of projects.--In awarding grants 
        under this section, the Secretary shall seek to achieve 
        a balance among entities of differing sizes, entities 
        in differing geographic areas, entities in urban and in 
        rural areas, and entities employing differing methods 
        of achieving the purposes of this section, including 
        working with the State agency responsible for the 
        administration of part D to help fathers satisfy child 
        support arrearage obligations.
          ``(2) Preference for projects serving low-income 
        fathers.--In awarding grants under this section, the 
        Secretary may give preference to applications for 
        projects in which a majority of the clients to be 
        served are low-income fathers.
  ``(e) Federal Share.--
          ``(1) In general.--Grants for a project under this 
        section for a fiscal year shall be available for a 
        share of the cost of such project in such fiscal year 
        equal to--
                  ``(A) up to 80 percent (or up to 90 percent, 
                if the entity demonstrates to the Secretary's 
                satisfaction circumstances limiting the 
                entity's ability to secure non-Federal 
                resources) in the case of a project under 
                subsection (b); and
                  ``(B) up to 100 percent, in the case of a 
                project under subsection (c).
          ``(2) Non-federal share.--The non-Federal share may 
        be in cash or in kind. In determining the amount of the 
        non-Federal share, the Secretary may attribute fair 
        market value to goods, services, and facilities 
        contributed from non-Federal sources.

``SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

  ``(a) In General.--The Secretary may make grants under this 
section for fiscal years 2003 through 2007 to eligible entities 
(as specified in subsection (b)) for 2 multicity, multistate 
projects demonstrating approaches to achieving the objectives 
specified in section 441(b)(1). One of the projects shall test 
the use of married couples to deliver program services.
  ``(b) Eligible Entities.--An entity eligible for a grant 
under this section must be a national nonprofit fatherhood 
promotion organization that meets the following requirements:
          ``(1) Experience with fatherhood programs.--The 
        organization must have substantial experience in 
        designing and successfully conducting programs that 
        meet the purposes described in section 441.
          ``(2) Experience with multicity, multistate programs 
        and government coordination.--The organization must 
        have experience in simultaneously conducting such 
        programs in more than 1 major metropolitan area in more 
        than 1 State and in coordinating such programs, where 
        appropriate, with State and local government agencies 
        and private, nonprofit agencies (including community-
        based and religious organizations), including State or 
        local agencies responsible for child support 
        enforcement and workforce development.
  ``(c) Application Requirements.--In order to be eligible for 
a grant under this section, an entity must submit to the 
Secretary an application that includes the following:
          ``(1) Qualifications.--
                  ``(A) Eligible entity.--A demonstration that 
                the entity meets the requirements of subsection 
                (b).
                  ``(B) Other.--Such other information as the 
                Secretary may find necessary to demonstrate the 
                entity's capacity to carry out the project, 
                including the entity's ability to provide the 
                non-Federal share of project resources.
          ``(2) Project description.--A description of and 
        commitments concerning the project design, including 
        the following:
                  ``(A) In general.--A detailed description of 
                the proposed project design and how it will be 
                carried out, which shall--
                          ``(i) provide for the project to be 
                        conducted in at least 3 major 
                        metropolitan areas;
                          ``(ii) state how it will address each 
                        of the 4 objectives specified in 
                        section 441(b)(1);
                          ``(iii) demonstrate that there is a 
                        sufficient number of potential clients 
                        to allow for the random selection of 
                        individuals to participate in the 
                        project and for comparisons with 
                        appropriate control groups composed of 
                        individuals who have not participated 
                        in such projects; and
                          ``(iv) demonstrate that the project 
                        is designed to direct a majority of 
                        project resources to activities serving 
                        low-income fathers (but the project 
                        need not make services available on a 
                        means-tested basis).
                  ``(B) Oversight, evaluation, and adjustment 
                component.--An agreement that the entity--
                          ``(i) in consultation with the 
                        evaluator selected pursuant to section 
                        445, and as required by the Secretary, 
                        will modify the project design, 
                        initially and (if necessary) 
                        subsequently throughout the duration of 
                        the project, in order to facilitate 
                        ongoing and final oversight and 
                        evaluation of project operation and 
                        outcomes (by means including, to the 
                        maximum extent feasible, random 
                        assignment of clients to service 
                        recipient and control groups), and to 
                        provide for mid-course adjustments in 
                        project design indicated by interim 
                        evaluations;
                          ``(ii) will submit to the Secretary 
                        revised descriptions of the project 
                        design as modified in accordance with 
                        clause (i); and
                          ``(iii) will cooperate fully with the 
                        Secretary's ongoing oversight and 
                        ongoing and final evaluation of the 
                        project, by means including affording 
                        the Secretary access to the project and 
                        to project-related records and 
                        documents, staff, and clients.
          ``(3) Addressing child abuse and neglect and domestic 
        violence.--A description of how the entity will assess 
        for the presence of, and intervene to resolve, domestic 
        violence and child abuse and neglect, including how the 
        entity will coordinate with State and local child 
        protective service and domestic violence programs.
          ``(4) Addressing concerns relating to substance abuse 
        and sexual activity.--A commitment to make available to 
        each individual participating in the project education 
        about alcohol, tobacco, and other drugs, and about the 
        health risks associated with abusing such substances, 
        and information about diseases and conditions 
        transmitted through substance abuse and sexual contact, 
        including HIV/AIDS, and to coordinate with providers of 
        services addressing such problems, as appropriate.
          ``(5) Coordination with specified programs.--An 
        undertaking to coordinate, as appropriate, with State 
        and local entities responsible for the programs funded 
        under parts A, B, and D of this title, programs under 
        title I of the Workforce Investment Act of 1998 
        (including the One-Stop delivery system), and such 
        other programs as the Secretary may require.
          ``(6) Records, reports, and audits.--An agreement to 
        maintain such records, make such reports, and cooperate 
        with such reviews or audits (in addition to those 
        required under the preceding provisions of paragraph 
        (2)) as the Secretary may find necessary for purposes 
        of oversight of project activities and expenditures.
  ``(d) Federal Share.--
          ``(1) In general.--Grants for a project under this 
        section for a fiscal year shall be available for up to 
        80 percent of the cost of such project in such fiscal 
        year.
          ``(2) Non-federal share.--The non-Federal share may 
        be in cash or in kind. In determining the amount of the 
        non-Federal share, the Secretary may attribute fair 
        market value to goods, services, and facilities 
        contributed from non-Federal sources.

``SEC. 445. EVALUATION.

  ``(a) In General.--The Secretary, directly or by contract or 
cooperative agreement, shall evaluate the effectiveness of 
service projects funded under sections 443 and 444 from the 
standpoint of the purposes specified in section 441(b)(1).
  ``(b) Evaluation Methodology.--Evaluations under this section 
shall--
          ``(1) include, to the maximum extent feasible, random 
        assignment of clients to service delivery and control 
        groups and other appropriate comparisons of groups of 
        individuals receiving and not receiving services;
          ``(2) describe and measure the effectiveness of the 
        projects in achieving their specific project goals; and
          ``(3) describe and assess, as appropriate, the impact 
        of such projects on marriage, parenting, domestic 
        violence, child abuse and neglect, money management, 
        employment and earnings, payment of child support, and 
        child well-being, health, and education.
  ``(c) Evaluation Reports.--The Secretary shall publish the 
following reports on the results of the evaluation:
          ``(1) An implementation evaluation report covering 
        the first 24 months of the activities under this part 
        to be completed by 36 months after initiation of such 
        activities.
          ``(2) A final report on the evaluation to be 
        completed by September 30, 2010.

``SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

  ``The Secretary is authorized, by grant, contract, or 
cooperative agreement, to carry out projects and activities of 
national significance relating to fatherhood promotion, 
including--
          ``(1) Collection and dissemination of information.--
        Assisting States, communities, and private entities, 
        including religious organizations, in efforts to 
        promote and support marriage and responsible fatherhood 
        by collecting, evaluating, developing, and making 
        available (through the Internet and by other means) to 
        all interested parties information regarding approaches 
        to accomplishing the objectives specified in section 
        441(b)(1).
          ``(2) Media campaign.--Developing, promoting, and 
        distributing to interested States, local governments, 
        public agencies, and private nonprofit organizations, 
        including charitable and religious organizations, a 
        media campaign that promotes and encourages involved, 
        committed, and responsible fatherhood and married 
        fatherhood.
          ``(3) Technical assistance.--Providing technical 
        assistance, including consultation and training, to 
        public and private entities, including community 
        organizations and faith-based organizations, in the 
        implementation of local fatherhood promotion programs.
          ``(4) Research.--Conducting research related to the 
        purposes of this part.

``SEC. 447. NONDISCRIMINATION.

  ``The projects and activities assisted under this part shall 
be available on the same basis to all fathers and expectant 
fathers able to benefit from such projects and activities, 
including married and unmarried fathers and custodial and 
noncustodial fathers, with particular attention to low-income 
fathers, and to mothers and expectant mothers on the same basis 
as to fathers.

``SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR CERTAIN 
                    PURPOSE.

  ``(a) Authorization.--There are authorized to be appropriated 
$20,000,000 for each of fiscal years 2003 through 2007 to carry 
out the provisions of this part.
  ``(b) Reservation.--Of the amount appropriated under this 
section for each fiscal year, not more than 15 percent shall be 
available for the costs of the multicity, multicounty, 
multistate demonstration projects under section 444, 
evaluations under section 445, and projects of national 
significance under section 446.''.
  (b) Inapplicability of Effective Date Provisions.--Section 
116 shall not apply to the amendment made by subsection (a) of 
this section.

           *       *       *       *       *       *       *

                              ----------                              

              SECTION 3716 OF TITLE 31, UNITED STATES CODE

Sec. 3716. Administrative offset

  (a) * * *

           *       *       *       *       *       *       *

  (h)(1) * * *

           *       *       *       *       *       *       *

  [(3) In applying this section with respect to any debt owed 
to a State, subsection (c)(3)(A) shall not apply.]
  (3) In applying this subsection with respect to any debt owed 
to a State, other than past due support being enforced by the 
State, subsection (c)(3)(A) shall not apply. Subsection 
(c)(3)(A) shall apply with respect to past due support being 
enforced by the State notwithstanding any other provision of 
law, including sections 207 and 1631(d)(1) of the Social 
Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of 
Public law 91-173 (30 U.S.C. 923(b)), and section 14 of the Act 
of August 29, 1935 (45 U.S.C. 231m).

                          VII. MINORITY VIEWS

    We oppose the legislation (HR 4090) reported by the 
Committee to reauthorize and modify the Temporary Assistance 
for Needy Families (TANF) program because it fails to address 
the most fundamental goal of welfare reform--moving recipients 
into real jobs and out of poverty. The bill promotes make-work 
at the expense of wage-paying employment, replaces State 
flexibility with unfunded mandates, and does nothing to help 
families escape poverty when they leave welfare.

    We have heard from Governors, Mayors, State legislators, 
welfare directors and poverty experts that HR 4090 is a step in 
the wrong direction. We agree. We have heard from a bipartisan 
group of Senators, lead by Senators Breaux and Hatch, that we 
should expand access to vocational education, give States 
credit for placing people in real jobs, maintain State 
flexibility on how to engage TANF recipients, increase child 
care funding, and remove restrictions on serving legal 
immigrants. We agree. Unfortunately, none of those proposals 
are contained in HR 4090. In fact, the legislation eliminates 
vocational education from the list of activities that count as 
a work-related activity. Apparently, education is the key to 
every American's future, except for poor single-mothers with 
children.

    We are particularly concerned that the cumulative effect of 
three provisions in the bill could force States to establish 
large unpaid work experience programs: (1) requiring 70% of 
welfare recipients to be enrolled in federally-defined work 
activities (without providing States with an employment credit 
for recipients leaving welfare for work), (2) increasing to 40 
hours a week the amount of time recipients must be 
participating in work activities (double the number of hours 
now required for mothers with children under the age of six), 
and (3) reducing State discretion to count vocational training 
and job search toward the work requirement.

    These new requirements would dramatically limit State 
flexibility to tailor services and activities to the individual 
needs of welfare recipients, and they will focus States on 
placing recipients in make-work activities, rather than in real 
jobs. In fact, 41 out of 47 States surveyed by the National 
Governors Association indicated that the proposal would require 
them to make ``fundamental'' changes to their welfare programs. 
Many States expressed concerns about being forced to shift 
attention and resources away from helping welfare recipients 
get jobs and move up the employment ladder in order to 
establish new workfare programs.
    The available research on welfare recipients participating 
in work experience programs has not found that such 
arrangements improve employment outcomes compared to other 
activities, such as vocational training or job search. Almost a 
decade ago, a comprehensive study by the Manpower Demonstration 
Research Corporation (MDRC) found ``little evidence that unpaid 
work experience leads to consistent employment or earnings 
effects.'' More recently, a study by the University of 
Washington found that State's workfare program (which is now 
being terminated) had much less impact on the wages of former 
welfare recipients than pre-employment training.

    Perhaps this research is one of the reasons that very few 
States have implemented large workfare programs over the last 
six years. Some jurisdictions that did create work experience 
programs are now beginning to scale back those efforts. For 
example, New York City enrolled less than 10% of its adult TANF 
caseload in work experience programs at the end of last year 
compared to 15% two years ago.

    We are also concerned that despite assurances from the 
Administration about maintaining existing minimum wage 
protections for welfare recipients in workfare programs, the 
Republican bill fails to include such protections. In fact, 
more than half of the States could not fulfill the bill's work 
requirement without violating the current minimum wage 
protection (in the case of a two-person family).

    The Congressional Budget Office (CBO) has informed us that 
implementing the new work requirements in the bill would cost 
States between $8 and $11 billion over the next five years. In 
addition, CBO has indicated that maintaining the current 
purchasing power of the TANF and child care block grants will 
cost States another $7 billion over five years. And yet, HR 
4090 does not contain a single dime of new funding. This 
unfunded mandate could force States to cut child care funding 
for the working poor in order to finance the additional day 
care costs for TANF recipients in workfare programs.

    We believe there is a better way--one that maintains State 
flexibility, one that focuses on real work, and one that seeks 
to help families escape poverty. We support strong work 
requirements that seek to move people into real jobs. We 
believe that States should have the flexibility to determine 
the best mix of services and activities to move welfare 
recipients towards self-sufficiency. We think States should 
receive a credit based on employment, not caseload

reduction. We want to end discrimination against legal 
immigrants and provide welfare recipients with access to 
vocational training so they can find good jobs. And we support 
providing the necessary resources, especially for quality child 
care, to help families leave welfare for work. HR 4090 falls 
short in all of these critical areas, and therefore we have no 
choice but to opposed the bill.

                                   Ben Cardin.
                                   Robert T. Matsui.
                                   Xavier Becerra.
                                   Jim McDermott.
                                   Michael R. McNulty.
                                   Earl Pomeroy.
                                   Wm. J. Jefferson.
                                   Charles B. Rangel.
                                   Jerry Kleczka.
                                   Sander Levin.
                                   William J. Coyne.
                                   Pete Stark.
                                   Richard E. Neal.

                                
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