29–010

Calendar No. 305

108TH CONGRESS REPORT " SENATE ! 1st Session 108–162

PERSONAL RESPONSIBILITY AND INDIVIDUAL 

DEVELOPMENT FOR EVERYONE ACT (PRIDE) 

OCTOBER 3, 2003.—Ordered to be printed 

Mr. GRASSLEY, from the Committee on Finance, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 4] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Finance, to which was referred the bill (H.R. 

4) to reauthorize and improve the program of block grants to States 

for temporary assistance for needy families, improve access to quality child care, and for other purposes, reports favorably thereon 

with an amendment and recommends that the bill, as amended, do 

pass. 

I. BACKGROUND 

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

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

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

The move to reform this system was prompted by soaring AFDC 

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

the states to undertake their own welfare reforms, frustration with 

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

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

Act). 

The welfare portion of the House Republicans’ Contract with 

America agenda was introduced as the Personal Responsibility Act 

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

the legislation. 

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

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

Excepting some small but controversial items, it contained the gist 

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

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

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

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

provisions. 

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

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

107TH CONGRESS

Programs authorized under PRWORA were scheduled to expire 

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

his reauthorization proposal. The House of Representatives passed 

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

In the 107th Congress, the Senate Finance Committee reported 

legislation based on a proposal crafted by a bipartisan group of 

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

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

108TH CONGRESS

The Finance Committee continued the work done in the 107th 

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

and advancement, work readiness, and family formation policies. 

The committee made a sustained effort to hear from stakeholders 

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

family groups, organizations representing the states, and officials 

from the Department of Health and Human Services. 

The full committee held one field hearing and one committee 

hearing. 

The field hearing was held on February 20, 2003 in Des Moines, 

Iowa, and was titled: ‘‘Welfare Reform: Past Successes, New Challenges.’’ The purpose of the hearing was to review the provisions 

of the 1996 welfare reform bill which are working in Iowa and to 

identify areas in need of strengthening and improvement. 

The committee heard testimony from: Ms. Donna Littrel, an Insurance Policy Specialist at Aegon Insurance, an Iowan who has 

successfully made the transition from welfare to work; Ms. Deb 

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Bingaman, Administrator, Division of Financial, Health and Work 

Supports at the Iowa Department of Human Services; Ms. Linda 

Anderson, a Human Resources Recruiter from Mercy Hospital, representing the business community to discuss successful strategies 

in Iowa to assist those receiving welfare make the transition from 

welfare to work. 

The committee heard additional testimony from Representative 

Dave Heaton from the Iowa State Legislature to discuss ways to 

build upon the success of the 1996 Act; Ms. Sonja Marquez from 

Boost 4 Families to discuss Iowa’s rural child care challenges and 

Ron Haskins, former White House policy lead on welfare reform to 

discuss ways to strengthen the family formation policies envisioned 

by the 1996 Act. 

The final full committee hearing on welfare reform was on March 

12, 2003 titled, ‘‘Welfare Reform: Building on Success.’’ The committee heard testimony from: The Honorable Tommy 

Thompson, Secretary, Department of Health and Human Services, 

on the Administration’s proposal for the reauthorization of the 

Temporary Assistance for Needy Families (TANF) program. 

The committee also heard testimony from Mr. Howard Hendrick, 

Oklahoma Secretary of Human Services on family formation policies; Ms. Marilyn Ray Smith, Deputy Commissioner and IV—D Director, Massachusetts Department of Revenue on child support; Mr. 

Larry Temple, Deputy Executive Director of the Texas Workforce 

Commission on a practitioner’s perspective on running a welfare to 

work program and Ms. Margy Waller, Fellow at the Brookings Institution on analysis of various welfare reform proposals. 

CURRENT LAW

The committee began its deliberations by agreeing to continue 

many of the reforms from the 1996 Act but working to improve it 

with priorities from members and the Administration. The committee bill reflects the analysis of Representative Dave Heaton, 

‘‘The work of welfare reform is not done. While caseloads have declined dramatically, many families struggle with barriers to selfsufficiency.’’ (Testimony before the Senate Finance Committee) 

Additionally, the committee considered the recommendations of 

Ron Haskins: ‘‘Given that the 1996 reforms have been so successful, 

we should leave intact the major features of the reforms. Thus, the 

block grant and state flexibility has proven its value and should be 

maintained.’’ (Testimony before the Senate Finance Committee) 

The following provisions in the committee bill are maintained 

from current law: 

• No individual entitlement; 

• Five year time limit on assistance; 

• Core work and work readiness activities; 

• Consistent funding level for TANF block grant; 

• Consistent supplemental grants at current level; 

• States can count up to 12 months of vocational education 

as meeting work requirement; and • Current sanction policies. 

CHANGES TO CURRENT LAW

A number of changes to current law in the committee bill are 

similar to provisions both in the bill reported out of the Senate FiVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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nance Committee in the 107th Congress and the President’s proposal. 

Highlights include: raising the participation rate; raising the 

standard hour for core activities; policies designed to address the 

needs of every family on assistance, otherwise known as ‘‘universal 

engagement’’; policies designed to address the needs of families 

who require additional time in barrier removal activities, otherwise 

known as the ‘‘3+3’’ provisions; child support improvements; and 

healthy family formations policies. 

Major themes of the changes to current law center on the following three principles and were informed by testimony presented 

to the committee as well as current research and analysis:

STRENGTHENS WORK

From Donna Littrel a welfare to work success story: ‘‘Becoming 

an Aegon employee was a turning point for my family and me. Our 

family still received assistance for our medical bills and some food 

stamps, but we no longer had to rely on FIP (case assistance) to provide us an income. I never imagined I would be working for such 

a wonderful company. It was a very liberating feeling.’’ (Testimony 

before the Senate Finance Committee) 

From Larry Temple: ‘‘What have we learned? Well, that work 

works. When you strengthen the work requirements, more people 

leave the rolls due to employment.’’ (Testimony before the Senate 

Finance Committee) 

From Secretary Tommy Thompson: ‘‘The most humane social program is a healthy and independent family that has the capacity and 

the ability to have a good, paying job. Federal and State welfare 

programs should recognize this fact by helping and encouraging 

Americans to build and maintain healthy and independent families. 

We can do better. The first step was excellent. The next step can be 

even better.’’ (Testimony before the Senate Finance Committee) 

The Committee bill: 

• Increases the work participation rate for States 5% each year, 

from 50% in 2004 to 70% in 2008. 

• Eliminates the caseload reduction credit, which has erased 

most states’ obligation to ensure that any TANF recipient is engaged in work, and replaces it with an employment credit which 

emphasizes good jobs. 

• Caps the credit so that states have a real participation rate. 

The value of the credit is phased down so that in fiscal year 2008, 

all states must have a real work participation rate of 50%. 

• Increases the minimum threshold for participation in core 

work activities from 20 to 24 hours. 

• Increases the standard weekly average number of hours from 

30 for a parent with a child six and over. Adopts a tiered approach 

assigning partial and extra credit for hours below and above the 

standard hour of 34. 

• Increases the standard weekly average of hours from 20 for a 

parent with a child under six. Adopts a tiered approach, assigning 

partial credit for hours below the standard hour of 24 and extra 

credit for hours above 34. 

• Ensures that every family has a plan for achieving self-sufficiency. States must prepare a plan for every family receiving asVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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sistance and in most cases that plan should involve some amount 

of work or work readiness activities. 

IMPROVES STATE FLEXIBILITY

From Deb Bingaman: ‘‘* * * policies must include the maximum 

possible flexibility so that each family’s uniqueness can be respected.’’ (Testimony before the Senate Finance Committee) 

From Howard Hendrick: ‘‘We are all for flexibility.’’ (Testimony 

before the Senate Finance Committee) 

The Committee bill: 

• Allows states to claim partial and extra credit for work hours 

below and above the standard hour. Currently, a recipient only 

counts toward the work participation requirement if the recipient 

meets the standard hour. 

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

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

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

in each 24 month period. 

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

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

months. 

• Includes a provision allowing adult recipients to attend longer 

duration vocational or post-secondary education. 

• Allows states to determine, on a case-by-case basis, whether or 

not to count families toward their participation rate in the first 

month of assistance. 

• Makes the contingency fund more accessible to States.

• Allows states to use unobligated balances, which currently can 

only be used for cash assistance, for any purpose under TANF, including funding for childcare. 

PROMOTES MARRIAGE AND FAMILY

From Marilyn Smith: ‘‘There is no longer any debate that responsible father involvement is good for children. The only question is 

how to achieve it.’’ (Testimony before the Senate Finance Committee) 

From Ron Haskins: ‘‘The President has called for $300 million 

per year in spending on programs that attempt to increase marriage 

rates among low-income families. There is little question that increased marriage rates among the poor would greatly reduce poverty 

and lead to improved school performance, improved social behavior 

and improved health among children.’’ (Testimony before the Senate Finance Committee) 

From Wade Horn and Isabel V. Sawhill, ‘‘The empirical literature 

clearly demonstrates that children do best when they grow up in a 

household with two parents who are married to each other.’’ (‘‘Father, Marriage and Welfare Reform’’ Chapter 16, The New World 

of Welfare) 

The Committee bill: 

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• Provides $100 million a year in matching grants for marriage 

promotion and $100 million a year for research, demonstration and 

technical assistance primarily related to marriage. 

• Adopts the Domenici/Bayh/Santorum bill to promote Responsible Fatherhood. 

• Includes a special rule relating to a single parent caring for a 

child or dependant with a physical or mental impairment. 

• Improves child support collection, assignment and distribution. 

• Increases child care spending for the current unmet need. 

CHILD CARE

Increased funding for child care is a critical issue for members 

on the Senate Finance Committee. 

On the issue of child care, the committee bill increases mandatory child care spending $1 billion over five years. The committee 

bill recognizes that since 1996, federal funding specifically appropriated for child care has increased more than five-fold from $935 

million in 1996 to $4.8 billion in 2002. In fiscal year 2001, an estimated 2.51 million children were receiving Child Care and Development Fund (CCDF), Temporary Assistance for Needy Families 

(TANF) or Social Services Block Grant (SSBG) funded child care 

services in an average month, compared to 1.2 million in 1996. 

Further, states can transfer up to 30% of their TANF funds to 

CCDF, or spend TANF directly on child care, without limit. To support spending on child care, the committee bill maintains TANF’s 

original funding level, even though the caseload is 54% of what it 

was prior to the 1996 act. 

In 2003, states transferred $1.9 billion from TANF to CCDF and 

spent $1.6 billion in TANF on direct child care. 

Additionally, the committee bill would allow states to use their 

unobligated TANF balances on services other than assistance, such 

as child care. 

CONCLUSION

Finally, the committee bill recognizes that all committee members share the common goal of implementing policies that will help 

move families from dependence to increasing independence. 

The committee bill reflects the view that enhancing work supports and providing additional assistance should be the focus of the 

next phase of welfare reform. The committee bill would enhance 

work supports by providing states with the option to serve families 

through barrier removal activities as well as substance abuse activities, post-secondary education and other activities. 

The committee bill reflects the view that the fact that 57% of 

adults receiving assistance who report zero hours of activity is an 

indication that states can do more to engage clients in meaningful 

activities. 

Additionally, the committee bill reflects the view that the fact 

that many states have an effective participation rate threshold of 

zero as a result of the caseload reduction credit represents a fundamental flaw in the 1996 act which should be corrected in this reauthorization. 

The committee bill adopts a blended approach, combining work 

supports and flexibility with increased work requirements on indiVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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viduals and states in advancement of the common goal of moving 

families out of deep and persistent poverty into self-sufficiency.

II. SECTION-BY-SECTION ANALYSIS 

TITLE I—TANF 

Section 101—State Plans 

CURRENT LAW

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

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

the 1st quarter of the fiscal year. This plan must include a description of the programs that the state will run to provide assistance 

to needy families and provide job preparation, work and support 

services to enable them to leave the program and describe how the 

state will ensure that parents and caretakers receiving assistance 

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

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

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

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

and establish numerical goals for reducing the illegitimacy ratio of 

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

educational systems, and it must include a number of certifications 

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

have the option of including a certification regarding the treatment 

of individuals with a history of domestic violence. 

THE COMMITTEE BILL

The Committee bill requires the state plan to establish specific 

measurable performance objectives for pursuing TANF purposes, 

and to describe the methodology the state will use to measure performance in relation to each objective. The Committee bill states 

that the performance objectives, as determined by the state, are to 

be consistent with criteria used by the Secretary in establishing 

performance measures for the employment achievement bonus 

(workforce attachment and advancement) and with such other criteria related to other (non-work) purposes of the program as the 

Secretary may establish, in consultation with the National Governors Association and the American Public Human Services Association. The performance measures determined by the states could 

include both process measures and outcome measures. The Committee bill specifies that the plan must describe any strategies and 

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

struggling and noncompliant families, and for clients with special 

problems; program integration, including provision of services 

through the One-Stop delivery system under WIA; and engagement 

of faith-based organizations in provision of services funded by 

TANF if the state is undertaking any strategies or programs to enVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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gage these organizations. It requires state plans to describe how 

the state intends to encourage equitable treatment of healthy, married, two-parent families under TANF. It deletes the requirement 

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

that community service be required from adults who fail to work 

after two months of aid, unless the governor opts out. It requires 

the plan to include a report detailing progress toward full engagement. It adds a requirement that tribal governments be consulted 

about the TANF plan and its service design. It requires governors 

of states that provide transportation aid under TANF to certify 

that state and local transportation agencies and planning bodies 

have been consulted in the development of the plan, The Committee bill directs the Secretary to develop a proposed Standard 

State Plan Form for use by states nine months from enactment and 

requires states, by October 1, 2004, to submit their fiscal year 2005 

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

the public through an appropriate State-maintained Internet 

website and through other means the state deems appropriate several documents: the proposed state plan (with at least 45 days for 

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

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

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

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

above. The Committee bill requires the Secretary, in consultation 

with states, to develop uniform performance measures designed to 

evaluate TANF state programs. The bill amends current law provisions requiring the Secretary to annually rank states by adding 

new ranking factors, namely: success of recipients in retaining employment, the ability of recipients to increase wages, and the degree to which recipients have workplace attachment and advancement. It also changes the job placement ranking factor by deleting 

the qualifier ‘‘long-term’’ from private sector job placement. 

Sections 107, 109 and 110 of the Committee bill contain other 

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

the option to establish an undergraduate postsecondary or vocational educational program to describe, in an addendum to its 

TANF plan, eligibility criteria that will restrict enrollment to persons whose past earnings indicate that they cannot qualify for employment that will make them self-sufficient and who, by enrollment in the program, will be prepared for higher-paying occupations in demand in the state. Section 109 requires plans to include 

criteria for deeming a single parent who provides care for a disabled child or dependent to be meeting all or part of the family’s 

work requirements. Section 109 permits a State, if it includes in its 

TANF plan a description of policies for areas of Indian country or 

an Alaskan native village with high joblessness, to define countable 

work activities for persons complying with individual responsibility 

plans and living in these areas. Section 110 requires state plans to 

outline how the State intends to require parent or caretaker recipients to engage in work or alternative self-sufficiency activities, as 

defined by the State, and to require recipient families to engage in 

activities in accordance with family self-sufficiency plans. 

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REASON FOR CHANGE

The Committee bill includes provisions to clarify what states are 

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

plans more meaningful. The Committee bill would require states to 

establish performance objectives and encourage an ongoing review 

of these objectives while maintaining state flexibility. 

Section 102—Family Assistance Grants

CURRENT LAW

The law appropriated $16.5 billion annually for family assistance 

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

FYs1997–2002. It also appropriated $77.9 million annually for family assistance grants to the territories (and, within overall ceilings, 

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

assistance grants have been continued at FY2002 funding levels 

through March 31, 2004 through a series of temporary extensions. 

Basic state grants are based on federal expenditures for TANF’s 

predecessor programs during FY1992 through FY1995. 

COMMITTEE BILL

The Committee bill appropriates family assistance grants, at current levels, for the states, the District of Columbia, and the territories for fiscal years 2004 through 2008. The Committee bill also 

appropriates matching grants for the territories for fiscal years 

2004 through 2008. 

REASON FOR CHANGE

(No Change). 

Section 103—Promotion of family formation and healthy marriage 

CURRENT LAW

The purposes of TANF include encouraging the formation and 

maintenance of two-parent families, ending the dependence of 

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

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

established a bonus (up to $100 million yearly for four years) for 

5 jurisdictions with the greatest percentage decease in nonmarital 

birth ratios and a decline from 1995 levels in abortion rates. 

COMMITTEE BILL

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

2004–2008) for competitive grants (50 percent matching rate) to 

states, territories, Indian tribes and tribal organizations to develop 

and implement innovative programs to promote and support 

healthy, married, two-parent families and to encourage responsible 

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

the skills needed to increase marital stability and health; education 

in high schools on the value of marriage, relationship skills, and 

budgeting; marriage education, marriage skills, and relationship 

skills programs, which may include parenting skills, financial manVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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agement, conflict resolution, and job and career advancement, for 

non-married expectant and recent mothers and fathers; pre-marital 

education and marriage skills training for engaged couples and for 

couples or persons interested in marriage; marriage enhancement 

and marriage skills training programs for married couples; divorce 

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

mentors; and programs to reduce the marriage disincentive in 

means-tested aid programs, if offered in conjunction with any activity described above. The Committee bill exempts marriage promotion grants from the general rules governing use of TANF funds 

(Section 404), but not from the percentage cap on administrative 

costs. To be eligible for a grant, applicants must consult with experts in domestic violence or with relevant community domestic violence coalitions and must describe in their applications how their 

proposed programs or activities will deal with issues of domestic violence and what they will do, to the extent relevant, to ensure that 

participation in the programs is voluntary and to inform potential 

participants that participation is voluntary. The Committee bill 

provides that marriage promotion funds appropriated for each of 

fiscal years 2004 through 2008 shall remain available to the Secretary until spent and that grantees may use marriage promotion 

funds without fiscal year limitation. The Committee bill provides 

that other TANF funds may be used by a state or Indian tribe with 

an approved tribal family assistance plan as all or part of the required state match for marriage promotion grants, but that these 

funds cannot count towards a state’s ‘‘Maintenance of Effort’’ or 

MOE. The Committee bill also includes conforming language relative to the fourth purpose of TANF, specifying that it is to encourage the formation and maintenance of healthy, two-parent married 

families and to encourage responsible fatherhood. The bill provides 

that all state spending (including funds spent on families ineligible 

for TANF) for the purpose of preventing and reducing the incidence 

of out-of-wedlock births, encouraging the formation and maintenance of healthy two-parent married families, or encouraging responsible fatherhood shall count toward required maintenance-ofeffort spending. 

REASON FOR CHANGE

Two of the four original purposes of TANF are directly related 

to ending out-of-wedlock births and encouraging the formation and 

maintenance of two-parent families. The bonus to reduce out of 

wedlock births was initially developed to enhance these purposes. 

This bonus has not proven to be an effective mechanism for motivating state action. A correlation between state action and a reduction in out of wedlock births and family formation has not been established. 

The Committee bill would redirect the funding to address the underlying purposes of TANF. The Committee bill would provide optional grants to states to explore innovative and creative approaches to promote healthy family formation activities. The Committee bill stipulates that participation in these programs is voluntary and that program development must be coordinated with 

domestic violence experts. 

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

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

family formation activities. These funds would be in addition to 

grants to states for healthy family formation activities. Currently 

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

welfare. The Committee bill would encourage a focus on research 

centered on marriage and family assistance so that states can learn 

from rigorous evaluations of activities to promote marriage and 

family formation. 

Section 104—Supplemental grant for population increases in certain states 

CURRENT LAW

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

lower than 35% of the national average, or a combination of aboveaverage growth and below-average AFDC benefits. Grants were authorized for a total of $800 million over FYs 1998 through 2001, 

and annual grants grew from $79 million to $319.5 million over 

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

making fiscal year 2002 and 2003 appropriations. 

COMMITTEE BILL

The Committee bill extends supplemental grants, at their FY 

2001 level, for FYs 2004 through 2007. 

REASON FOR CHANGE

The Committee bill extends the supplemental grant program for 

certain states. 

Section 105—Bonus to reward employment achievement 

CURRENT LAW

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

measuring state performance relative to block grant goals. Awards 

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

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

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

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

their improvement from the previous year, but the bonus cannot 

exceed 5% of the family assistance grant. $200 million per year was 

available for performance bonuses, for a total of $1 billion between 

FYs 1999 and 2003. 

COMMITTEE BILL

The Committee bill appropriates $600 million (for FYs 2004 

through 2009) for bonuses to states that qualify as ‘‘employment 

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

Secretary in consultation with the states. Bonuses are to average 

$100 million per year. The Committee bill specifies that the emVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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ployment achievement formula is to measure absolute and relative 

progress toward the goals of job entry, job retention, and increased 

earnings as well as attachment to the workforce. It caps a state’s 

bonus at 5% of its family assistance grant. For FY 2004 and FY 

2005, the employment achievement bonus may be based on three 

components of the repealed high performance bonus—job entry 

rate, job retention rate, and earnings gain rate. The Committee bill 

makes tribal organizations eligible for the bonus and directs the 

Secretary to consult with tribal organizations in determining criteria for awards to them. 

REASON FOR CHANGE

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

meaningful employment. The Committee bill would continue to provide incentives for states to focus on employment attachment and 

achievement and would continue the policy of rewarding states for 

doing so. The Committee bill would preserve the concept of the 

High Performance Bonus focused on employment attachment and 

achievement. 

Section 106—Contingency fund 

CURRENT LAW

The TANF law established a $2 billion contingency fund for 

matching grants at the Medicaid matching rate (which ranges from 

50% to 76.6% in 2003) to ‘‘needy’’ states that expect during the fiscal year to spend under the TANF program (not counting child 

care) 100% of their FY1994 level of spending on TANF-predecessor 

programs (not counting child care). States can access the contingency fund by meeting one of two ‘‘needy’’ state triggers: (1) an unemployment rate for a 3-month period that is at least 6.5% and 

110% of the rate for the corresponding period in either of the two 

preceding calendar years; or (2) a food stamp caseload increase of 

10% over the FY 1994–1995 level (adjusted for the impact of immigrant and food stamp constraints in the 1996 welfare law). Contingency fund payments for any fiscal year are limited to 20% of the 

state’s base grant, and a state can draw down no more than 1⁄12

of its maximum annual contingency fund amount in a given month. 

Under a final reconciliation process, a state’s federal match rate 

(for drawing down contingency funds) is reduced if it received funds 

for fewer than 12 months in any year. 

COMMITTEE BILL

The Committee bill appropriates such sums as are needed for 

contingency fund grants, up to $2 billion over 5 years, FYs 2004–

2008. It eliminates the requirement that states spent 100% of their 

historic level to qualify for contingency funds (instead applying the 

TANF MOE, 75%–80%). It entitles states to a contingency fund 

grant reflecting costs of TANF caseloads when they are ‘‘needy’’ 

under a revised definition. To trigger on as needy: (a) a state must 

have an increase of 5 percent in the monthly average unduplicated 

number of families receiving assistance under its TANF program in 

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

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with the corresponding period in either of the two most recent preceding fiscal years; (b) the TANF caseload increase must be due, 

in large measure, to economic conditions rather than state policy 

changes, and (c) for the most recent three-month period with data, 

the average rate of seasonally adjusted total unemployment must 

be at least 1.5 percentage points or 50 percent higher than in the 

corresponding period in either of the two most recent preceding fiscal years; or, for the most recent 13 weeks with data, the average 

rate of insured unemployment must be at least 1 percentage point 

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

recent fiscal years; or, for the most recently concluded 3-months 

with national data, the monthly average number of food stamp recipient households, as of the last day of each month, exceeds by at 

least 15 percent the corresponding caseload number in the comparable period in either of the two most recent preceding fiscal 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

a state that receives contingency funds to maintain 100% of its historic spending level (MOE), but provides that a state shall not be 

eligible for a contingency fund grant unless its MOE spending 

equals 75% (80%, if it fails work participation rates). 

REASON FOR CHANGE

Because state spending had to exceed 100% of the FY 1994 level 

in order for a state to access the contingency fund, states were unable to receive contingency funds during the recent economic downturn. The Committee bill would liberalize the contingency fund so 

that states are better able to draw down those dollars. 

14

Section 107—Use of funds 

CURRENT LAW

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

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

year limitation. Regulations define assistance as ongoing aid for 

basic needs, plus supportive services such as child care and transportation for families who are not employed. Federally funded assistance to a given family is time-limited (60 months, with some 

hardship extensions allowed). 

COMMITTEE BILL

The Committee bill permits carryover of TANF funds granted to 

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

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

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

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

authority (Section 404(c)) for differential treatment of families moving into a state (which was invalidated by the U.S. Supreme Court 

in 1999). The Committee bill exempts marriage promotion grant 

funds from general rules (but not the administrative percentage 

cap) on use of TANF funds. The Committee bill restores transferability of TANF funds to SSBG to 10%. 

The bill permits states to use TANF funds to establish an undergraduate 2- or 4-year degree postsecondary program or a vocational 

educational program for up to 10% of TANF families, under which 

the following services could be provided: child care, transportation, 

payment for books and supplies, other services provided under policies determined by the state to ensure coordination and lack of duplication. No TANF funds could be used for tuition under this program. Hours of participation in these programs would be countable 

toward meeting state work requirements. Students could also receive credit for hours spent in one of the nine ‘‘direct’’ work activities of current law or in work study, practicums, internships, clinical placements, laboratory or field work, or other activities that 

would enhance their employability, as determined by the state, or 

in study time (at the rate of not less than 1 hour for every hour 

of class time and not more than 2 hours for every hour of class 

time. Students’ total time in education, core work, work study, laboratory or field work, study time, etc. would be countable against 

hours requirements. Also, students could be credited as one working family if, in addition to complying with the full-time educational participation requirements of their educational program, 

they engaged in one of the countable work activities above for at 

least the following number of hours: 6 hours weekly in the first 

year, 8 hours in the second year, 10 hours in the third year, and 

12 hours in the fourth and any later year. For good cause, states 

could modify these hour requirements. To be eligible for these programs, recipients would be required to maintain satisfactory academic progress (as defined by the institution operating the program). With good cause exceptions, participants would be required 

to complete requirements of a degree or vocational educational 

15

training program within the normal time frame for full time students. 

REASON FOR CHANGE

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

for basic ongoing needs (and some services for the unemployed). 

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

any activity authorized under TANF, including child care. This provides additional flexibility for the states. 

Additionally, the Committee bill would permit states to designate 

an amount of unused dollars in a contingency reserve fund. This 

clarifies that, while unspent, these funds have been earmarked for 

purposes associated with the legislation. 

In addition, under an amendment offered by Senator Snowe, the 

bill allows states to create postsecondary education programs for 

TANF recipients, but caps the number of participants at 10 percent 

of the TANF caseload. The bill permits states to allow a subset of 

recipients to benefit from a postsecondary strategy while maintaining an overall work orientation. In doing so, the committee is using 

a Maine program (‘‘Parents as Scholars’’) as a model. 

Section 108—Repeal of federal loan for state welfare programs 

CURRENT LAW

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

federal loan fund for state TANF programs.

COMMITTEE BILL

The Committee bill repeals the loan fund. 

REASON FOR CHANGE

The fund did not function effectively. 

Section 109—Work participation requirements 

Participation standards 

CURRENT LAW

States must have a specified percentage of their adult recipients 

engaged in creditable work activities. Since FY 2002 the participation standard has been 50% for all families (and since FY 1999 it 

has been 90% for the two-parent component of the caseload). Participation standards are reduced by a caseload reduction credit 

(below). In tribal family assistance programs, work participation 

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

COMMITTEE BILL

The Committee bill increases the all-family standard from the 

current 50% level to the following levels: FY 2005, 55%; FY 2006, 

60%; FY 2007, 65%; and FY 2008 and thereafter, 70%. The Committee bill eliminates the separate rate for two parent families. 

16

REASON FOR CHANGE

Currently, many states have an effective participation rate requirement of 0%. The Committee bill increases work participation 

requirements to move towards universal engagement policies under 

which States actively engage all welfare recipients in moving towards self sufficiency. 

Calculation of participation rates 

CURRENT LAW

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

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

the number of recipient families with an adult recipient, but excluding families subject that month to a penalty for work refusal 

(provided they have not been penalized for more than 3 months), 

single-parent families with children under 1, if the state exempts 

them from work, and, at state option, families in tribal family assistance programs. 

COMMITTEE BILL

The Committee bill permits a state to exclude all families from 

work participation calculations during their first month of TANF 

assistance on a case by case basis and to exclude families with a 

child under age 1 (subject to a 12 month in a lifetime limit) from 

work requirements and calculations of work participation rates on 

a case-by-case basis. 

REASON FOR CHANGE

This language recognizes that the initial assessment and development of a family self sufficiency plan takes some time, during 

which the family may not be participating in countable activities. 

In addition, it ensures that states receive credit for families with 

young children who are engaged in countable activities. 

Caseload reduction credit 

CURRENT LAW

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

(not attributable to policy changes), the work participation standard is lowered by l percentage point). (In FY 2001, caseload reduction credits cut required work rates of 28 states to zero.) 

COMMITTEE BILL

The Committee bill replaces the current caseload reduction credit 

with an employment credit but permits states to phase in the replacement. In a separate provision, it places the same limits on the 

extent to which any employment, caseload reduction, or other credit could reduce a state’s required participation rate. Under these 

limitations, credits could not exceed 40 percentage points for fiscal 

year 2004; 35 percentage points for fiscal year 2005; 30 percentage 

points for fiscal year 2006; 25 percentage points for fiscal year 

2007; and 20 percentage points for fiscal year 2008 or thereafter. 

17

REASON FOR CHANGE

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

reduction. Because caseloads have fallen so dramatically, many 

states now have an effective participation threshold of 0. The cap 

on the employment credit ensures that while policy priorities relative to encouraging states to work to move clients into good paying jobs are achieved, participation rates are not undermined by 

the credit. 

Employment credit 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee bill establishes a percentage point credit against 

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

TANF families in a fiscal year who leave ongoing cash assistance 

with a job. It is calculated by dividing (a) twice the quarterly average unduplicated number of families (excluding child-only families) 

that received TANF assistance during the preceding fiscal year but 

who ceased to receive TANF—and did not receive cash assistance 

from a separate state-funded program—for at least two consecutive 

months following case closure during the applicable period (most 

recent 4 quarters with data) and were employed during the calendar quarter immediately after leaving TANF by (b) the average 

monthly number of families (again excluding child-only families) 

who received cash payments under TANF during the preceding fiscal year. At state option, calculations could include in the numerator: (1) twice the quarterly average number of families that received non-recurring short term benefits rather than ongoing cash 

and who earned at least $1,000 in the quarter after receiving the 

benefit, and (2) twice the quarterly average number of families that 

included an adult who received substantial child care or transportation assistance. If both these options were taken, the denominator would be increased by twice the quarterly number of families 

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

by twice the quarterly average number of families with an adult 

who received substantial child care or transportation assistance. In 

consultation with directors of state TANF programs, the Secretary 

is to define substantial child care or transportation assistance, 

specifying a threshold for each type of aid—a dollar value or a time 

duration. The definition is to take account of large one-time transition payments. 

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

earnings during the quarter after leaving the benefit rolls during 

the preceding fiscal year equaled at least 33 percent of the State’s 

average wage. 

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

2004; 35 percentage points for fiscal year 2005; 30 percentage 

points for fiscal year 2006; 25 percentage points for fiscal year 

18

2007; and 20 percentage points for fiscal year 2008 or thereafter. 

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

below these floors: 10 percent for fiscal year 2004, 20 percent for 

fiscal year 2005; 30 percent for fiscal year 2006; 40 percent for fiscal year 2007, and 50 percent for fiscal year 2008 and thereafter.) 

The Committee bill authorizes and requires the HHS Secretary 

to use information in the National Directory of New Hires to calculate State employment credits. If the TANF leaver’s employer is 

not required to report new hires, the Secretary must use quarterly 

wage information submitted by the state. To calculate employment 

credits for families who received non-recurring short term benefits 

and for those who received substantial child care and transportation assistance, the Secretary is to use other required data. The 

Committee bill requires the Secretary by August 30 each year to 

determine—and to notify each state of—the amount of the employment credit that will be used in calculating participation rates for 

the immediately succeeding fiscal year. 

The Committee bill sets October 1, 2005 as the effective date for 

replacement of the caseload reduction credit by the employment 

credit, but permits states to elect to have a one-year delay. If a 

state makes this choice, its adjusted work participation standard 

for fiscal year 2006 shall be determined by using both the caseload 

reduction credit and the employment credit (one-half credit for 

each). 

REASON FOR CHANGE

The current caseload reduction credit contains a flawed incentive 

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

credit for families that leave assistance for gainful employment. 

Work activities 

CURRENT LAW

The law lists 12 activities that can be credited toward meeting 

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

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

vocational educational training (12 month limit), and providing 

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

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

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

consist of persons engaged in vocational educational training and 

teen parents without high school diplomas who are deemed to be 

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

tribe’s participation. 

19

COMMITTEE BILL

The Committee bill lists 17 activities that can be credited toward 

meeting participation standards. It continues the current law list 

of 12 work activities (treating the 9 priority activities above as direct work activities) and lists five ‘‘qualified activities’’ that may be 

counted under certain conditions (see below). The qualified activities are postsecondary education, adult literacy programs or activities, substance abuse counseling or treatment, programs or activities designed to remove work barriers, as defined by the state, and 

work activities authorized under any waiver for any State that was 

continued under Section 415 before the date of enactment of 

PRIDE. The Committee bill deletes the requirement that only four 

consecutive weeks of job search can be counted within the normal 

6 week limit. It doubles the permissible length of job search if the 

state meets the unemployment rate or increased food stamp caseload criteria for a ‘‘needy state’’ under the contingency fund definition. The Committee bill permits a state to define countable work 

activities for persons complying with a family self sufficiency plan 

and living in areas of Indian country or an Alaskan native village 

with high ‘‘joblessness.’’ To qualify for this option, the state must 

include in its TANF plan a description of its policies for these 

areas. 

REASON FOR CHANGE

The Committee bill includes activities proposed to maintain all 

the flexibility of current law and adds new flexibility in countable 

activities. Expanding the list of allowable activities would permit 

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

specialized services. It would allow states to engage recipients in 

short-term ‘‘barrier removal’’ activities. Many states have such programs and some have done these under ‘‘waivers.’’ Hours in such 

activities would now count toward the federal participation standards. 

Required work hours 

CURRENT LAW

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

hours (20 hours in priority work activities) is required. For twoparent families the standard is 35 hours (30 in priority work activities), but increases to 55 hours (50 in priority activities) if the family receives federally-subsidized child care. For a single parent caring for a child under age 6, 20 hours of participation satisfies the 

standard. States may exempt single parents of children under age 

1 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. On one occasion per person, participation in job 

search for 3 or 4 days during a week must be treated as a week 

of participation.) In tribal family assistance programs, required 

work hours are set by the HHS Secretary, with the tribe’s participation. [Note: except for teen parents, single parents with a child 

20

under 6, and participants in a tribal program with different hour 

requirements, families must work an average of at least 30 hours 

weekly to be counted as working.] 

COMMITTEE BILL

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

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

hours for a two-parent family that receives federally funded child 

care). The calculation of weekly hour hours is made by dividing 

monthly hours of work by 4. Families meeting the standard are 

counted as 1.0 family in calculating the state’s work participation 

rate. Extra credit is given for work by a single parent family (with 

or without a preschooler) above 34 hours and by two-parent families above their 39- and 55-hour standards. All schedules provide 

partial credit—provided sufficient hours are spent on direct work—

for hours below the standard, as follows:

Partial/full/extra work credit 

Single-parent family Two-parent family 

Child under 6 No child under 6 With child care 

.675 of a family ............................ 20–23 hours .......... 20–13 hours .......... 26–29 hours .......... 40–44 hours. 

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

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

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

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

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

Generally, to receive any credit for hours at or below 24, a singleparent family must engage for all of these hours in one of the nine 

direct work activities—unsubsidized job, subsidized private job, 

subsidized public job, work experience, on-the-job training; job 

search and job readiness assistance, community service, vocational 

educational training, and providing child care for TANF recipients 

in community service. For work credit, a two-parent family generally must spend all hours at or below 34 weekly in a direct work 

activity (50 hours if the family receives federally funded child care 

and has no disabled member). However, for three months in any 

24-month period, a state may give work credit for any hours spent 

in one of the five ‘‘qualified activities’’—postsecondary education, 

adult literacy programs or activities, substance abuse counseling or 

treatment, programs or activities designed to remove work barriers, as defined by the state, and work activities authorized under 

any waiver for any state that was continued under section 415 before the date of enactment of PRIDE. In some cases a state may 

give work credit for a second three-month period (within the 24 

month limit). Eligible for this period of extended time are persons 

whose family self-sufficiency plan requires engagement in one of 

three qualified rehabilitative services, namely, adult literacy programs or activities, participation in a program designed to increase 

proficiency in the English language, and substance abuse or mental 

health treatment. Total hours of their activity, including any core 

activities, must average 24 hours weekly. Once a family has 

reached the direct work hours threshold, it may receive credit for 

unlimited job search or vocational educational training or any of 

the five ‘‘qualified activities.’’

21

Teen parents who maintain satisfactory secondary school attendance or participate in education directly related to work for an average of 20 hours weekly are deemed to count as 1 family. A single 

recipient caregiver who provides substantial ongoing care for a 

child or adult dependent with a physical or mental impairment 

may receive credit as engaged in work under certain conditions. 

Qualifying conditions include that the state must have determined 

that the child or adult dependent requires substantial ongoing care 

because of a verified impairment, that the parent or other caregiver 

is the most appropriate provider of the care, and that, in the month 

for which caregiving hours count as work, the recipient is in compliance with her self-sufficiency plan. Further, the state TANF plan 

must set forth criteria for deeming the single parent providing care 

for a disabled child or dependent to be meeting all or part of that 

family’s work requirements. The Committee bill retains the (30 

percent) limitation on persons who may be credited with work by 

virtue of vocational educational training (for no more than 12 

months) or (if teen parents) by high school attendance or work directly related to education. Excluded from the 30% cap are participants in the optional, limited 2- or 4-year post-secondary education 

program (Parents as Scholars), participants supplementing hours 

spent in core activities (e.g. for single parents, meeting the 24 hour 

per week in core activity requirement) with vocational education 

training and participation during the 3-month (or 6-month) period 

when states have the option to count expanded work activities 

under the bill. 

REASON FOR CHANGE

The Committee bill recognizes that the success achieved by 

TANF and Work First programs are a result of a sustained emphasis on adult attachment to the workforce. The Committee bill attempts to build on the success of the past by increasing work and 

reducing the welfare rolls. Successes thus far come primarily from 

experiments and initiatives undertaken at the state level under 

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

Committee bill establishes clearly defined goals and benchmarks 

for hours of participation. 

Under the Committee bill, states would have flexibility to engage 

single moms with pre-schoolers at fewer hours than the overall 

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

The Committee bill would expand the list of activities that count 

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

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

education and barrier removal activities. 

It would encourage states to provide post-employment activities, 

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

The Committee bill would provide a ‘‘Tiered Approach’’ to calculating hours of work activity counted towards meeting the participation rate. 

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

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

22

The Committee bill recognizes that parents who must engage in 

substantial, continuous care of a disabled child or family member 

are engaged in meaningful activity. States should work with these 

families to monitor their progress and development. 

Section 110—Universal engagement and family self sufficiency plan 

requirements; other prohibitions and requirements 

Universal engagement 

CURRENT LAW

State plan must require that a parent or caretaker engage in 

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

COMMITTEE BILL

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

It requires that state plans outline how they intend to require parents or minor child head of household to engage in work or alternative sufficiency activities, as defined by the state—while observing the prohibition against penalizing work refusal by a single parent of a preschool child if the parent has a demonstrated inability 

to obtain needed child care for specified reasons. States may not exempt partially sanctioned families from the requirements of this 

section. 

REASON FOR CHANGE

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

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

Family self-sufficiency plan requirements 

CURRENT LAW

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

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

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

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

COMMITTEE BILL

The Committee bill requires states to initiate screening and assessment, in a manner they deem appropriate, of the skills, work 

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

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

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

other assistance and family support services for which families are 

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

use of job search can be used as a form of assessment. Assessments 

and plans should be constantly updated and revised. States should 

use the experiences of participation to inform what future assessments and plan should include. The Committee bill requires states, 

23

in a manner they deem appropriate, to establish a self-sufficiency 

plan for each family. The Committee bill requires states to continually review and update a family’s self sufficiency plan. Required 

plan contents: activities designed to assist the family achieve their 

maximum degree of self-sufficiency, requirement that the recipient 

participate in activities in accordance with the plan, supportive 

services that the state intends to provide, steps to promote child 

well-being and, when appropriate, adolescent well-being, information about work support assistance for which the family may be eligible (such as food stamps, medicaid, SCHIP, federal or state funded child care, EITC, low-income home energy assistance, WIC, WIA 

program, and housing assistance). The state must monitor the participation of adults and minor child household heads in the self-sufficiency plans and regularly review the family’s progress, using 

methods it deems appropriate, and revise the plan when appropriate. Before imposing a sanction against a recipient for failure to 

comply with a TANF rule or a requirement of the self-sufficiency 

plan, the state must, to the extent deemed appropriate by the 

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

state) to consult with the family. States must comply with self-sufficiency plan requirements within 1 year after enactment (for families then receiving TANF). For families not enrolled on the date of 

enactment, the deadline for self-sufficiency plans is the later of: 60 

days after the family first receives assistance on the basis of its 

most recent application, or 1 year after enactment. The Committee 

bill provides that nothing in the self-sufficiency plan subsection or 

amendments made by it shall be construed to establish a private 

right or cause of action against a state for failure to comply with 

the provisions or to limit claims that might be available under 

other federal or state laws. The General Accounting Office is required to submit a report to the Ways and Means and Finance 

Committees evaluating the implementation of the universal engagement provisions of the bill. See Section 111 (Penalties) below 

for penalty on failure to comply with self-sufficiency plan requirements. 

REASON FOR CHANGE

States should provide a plan for every family on assistance and 

work with those families, even if the families are not able to participate fully in the work requirements. Additionally, the self sufficiency plan for each family should be a continually updated document as States monitor the progress of families receiving assistance. The Committee bill would require States to make families on 

assistance aware of additional work supports and assistance for 

which they are eligible. 

Prohibitions and requirements 

Transitional compliance for teen parents 

CURRENT LAW

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

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

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

24

an alternative educational or training program approved by the 

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

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

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

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

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

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

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

COMMITTEE BILL

The Committee bill would allow 60 days for a teen parent to comply with these requirements—permitting states to give federally 

funded TANF for up to 60 days to a teen parent not yet participating in education or training or not yet living in an adult-supervised arrangement. It also would add to allowable living arrangements transitional living youth projects funded under section 321 

of the Runaway and Homeless Youth Act. 

REASON FOR CHANGE

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

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

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

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

the requirements. 

Section 111—Penalties against states 

Failure to meet the fiscal maintenance of effort requirement 

CURRENT LAW

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

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

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

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

that qualify for maintenance-of-effort credit are cash aid, child 

care, educational activities designed to increase self-sufficiency, job 

training, and work (but not generally available to non-TANF families) administrative costs (15% limit), child support collection 

passed through to the family without benefit reduction, and any 

other use of funds reasonably calculated to accomplish a TANF 

purpose. 

COMMITTEE BILL

The Committee bill extends the requirement that states maintain 

their own funding at 75 percent of its historic level (80% in case 

of failure to satisfy work standards) to cover FYs 2003 through 

2009. It also specifies that a state’s required MOE percentage for 

25

a given year is to be based on its meeting or failing the work requirement for the preceding fiscal year. 

REASON FOR CHANGE

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

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

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

year. 

Penalties for failure to comply with self-sufficiency plan requirements 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee bill (in section 110) adds failure to comply with 

family self-sufficiency plan requirements to the penalty paragraph 

regarding failure to comply with minimum participation standards 

(see above for penalty schedule). For fiscal year 2005 and later, it 

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

such as the number or percentage of families for whom a plan is 

not established in a timely fashion, the duration of delays, whether 

the failure are isolated and nonrecurring, and the existence of systems to ensure establishment and monitoring of plans. The Secretary may reduce the penalty if the noncompliance is due to circumstances that made the state needy under the contingency fund 

definition or due to extraordinary circumstances such as a natural 

disaster or regional recession. 

REASON FOR CHANGE

The Committee bill adds a penalty provision to enforce the new 

requirement that states develop family self-sufficiency plans for recipients, while stipulating that states will not be subject to penalty 

unless they are in substantial noncompliance with the law. 

Section 112—Data collection and reporting 

CURRENT LAW

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

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

state TANF program (except for information relating to activities 

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

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

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

week that an adult participated in specified activities, information 

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

26

Quarterly reports also must include the percentage of funds used 

for administrative costs or overhead, the total amount spent on 

programs for needy families, the number of noncustodial parents 

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

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

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

and persons who received assistance each month and the total 

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

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

number of case closures attributed to employment, marriage, time 

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

submit annual reports to Congress that include state progress in 

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

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

COMMITTEE BILL

The Committee bill extends quarterly reporting requirements to 

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

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

programs. Annual state reports must include names of programs, 

their activities and purpose, eligibility criteria, funding sources, 

number of beneficiaries, sanction policies, and work requirements, 

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

disaggregated case record information, permitting the Secretary to 

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

The Committee bill also changes some of the data elements required in the quarterly reports. For instance, it adds the race and 

educational level of each minor parent, deletes the educational 

level of each child, and adds the reason for receipt of assistance for 

a total of more than 60 months. It specifies that reported work experience be supervised. It also requires information needed to calculate progress toward universal engagement of each family, the 

date the family first received TANF, whether a self-sufficiency plan 

is established for the family; the marital status of the parents at 

the birth of each child in the family, and whether paternity has 

been established for those who were unwed. Quarterly reports 

must include information on families that became ineligible for assistance during the month, broken down by reason (earnings, 

changes in family composition that result in increased earnings, 

sanctions, time limits, or other specified reasons). The Committee 

bill requires the Secretary to prescribe regulations needed to collect 

data and to consult with the NGA, APHSA, and the National Conference of State Legislatures (as well as the Secretary of Labor) in 

defining data elements for required reports. The Committee bill 

changes the requirements for the Secretary’s annual TANF reports 

to Congress by setting July 1 as the deadline, deleting the requirement for information about applicants and requiring that the report include information about separate state MOE programs. It requires states to report to the Secretary annually, beginning with 

FY2005, on achievement and improvement during the past fiscal 

year under the state’s performance goals and measures. 

27

REASON FOR CHANGE

The Committee bill extends quarterly reporting requirements to 

ensure consistent data reporting and monitoring of all qualified 

State programs. Annual reports on all TANF and MOE programs 

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

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

Designation of a few core data elements for universal reporting 

would facilitate performance measurement and accountability. 

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

Performance Bonus data collection. Data elements that have been 

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

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

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

compliance with universal engagement requirements. 

Section 113—Direct funding and administration by Indian tribes 

CURRENT LAW

The law earmarks some TANF funds—an amount equal to federal pre-TANF payments received by the state attributable to Indians—for administration by tribes with approved tribal family assistance plans. It deducts these sums ($115 million in FY2003) 

from state TANF grants. It also appropriates $7.6 million annually 

for work and training activities (now known as Native Employment 

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

COMMITTEE BILL

For FYs 2004–2008, the Committee bill reauthorizes tribal family 

assistance grants and grants for NEW programs. It establishes a 

tribal TANF improvement fund ($100 million authorized for each 

of 5 years) for the purpose of providing technical assistance to 

tribes and awarding competitive grants directly to tribes carrying 

out a tribal family assistance plan. 

REASON FOR CHANGE

The 1996 welfare law permitted Indian tribes to receive direct 

Federal funding to operate cash welfare programs. The Committee 

bill continues that authority and creates a tribal TANF improvement fund. The fund is intended to encourage more tribes to exercise their option to operate TANF programs and to improve administration of programs already operating. The bill also continues 

funding for the Indian job training program known as NEW. 

Section 114—Research, evaluations, and national studies 

CURRENT LAW

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

that the Secretary might help states develop innovative approaches 

to employing TANF recipients and increasing the well-being of 

their children and directed the Secretary to evaluate these innovative projects. For 6 years (FYs 1997 through 2002) it appropriated 

$15 million yearly, half for TANF research and novel approaches 

28

cited above and half for the federal share of state-initiated TANF 

studies and the completion and evaluation of pre-TANF waiver 

projects. (However, in subsequent appropriation acts, Congress has 

rescinded these provisions and appropriated research funds on a 

less prescriptive basis under Section 1110 of the Social Security 

Act—which deals with cooperative research and demonstration 

projects.) Section 413 of the Social Security Act also requires the 

Secretary to rank annually the states to which family assistance 

grants are paid, in the order of their placing recipients into longterm private sector jobs, reducing the overall welfare caseload, and 

(when a practicable calculation method becomes available) diverting persons from formally applying for TANF assistance. 

COMMITTEE BILL

The Committee bill appropriates $100 million yearly for FYs 

2004 through 2008, of which 80% must be spent on marriage promotion activities (described in the section establishing marriage 

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

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

assistance to states, Indian tribal organization, and such other 

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

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

for 5 years (FYs 2004 through 2008) it extends the current law annual appropriation of $15 million and its designated 50–50 allocation). 

The committee bill also would establish a demonstration program 

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

integration coordination and delivery across various workforce and 

public assistance programs. Programs covered in the bill (‘‘qualified 

programs’’) are TANF, Title XX social services block grant, and 

mandatory child care under Title IV of the Social Security Act. The 

head of a state entity or of a sub-state entity administering 2 or 

more qualified programs could apply to operate a demonstration. 

Provisions that could not be waived include any provision of law relating to civil rights or the prohibition of discrimination, purposes 

or goals of any program, maintenance of effort funding rules, 

health or safety, labor standards under the Fair Labor Standards 

Act, and environmental protection. A waiver could not be granted 

if it would waive any funding restriction or limitation in an appropriations Act, or if it would have the effect of transferring appropriated funds from one account to another. Child care funding can 

only be spent on child care. Applicants would be required to include 

a plan for evaluation to demonstrate the improved effectiveness of 

programs included. Approval would be required from the Secretary 

or Secretaries overseeing programs proposed under the demonstration. 

REASON FOR CHANGE

Healthy marriages are critically important to the well-being of 

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

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

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

29

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

them to form and sustain healthy marriages. 

There is much, however, that we do not yet know about how 

states and communities can effectively promote healthy marriages. 

The Secretary’s Fund for Research Demonstrations and Technical 

Assistance serves several purposes. Just as current welfare to work 

programs are built on the foundation of considerable research and 

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

base of research and examined experience. 

This section would fund research on the operation and impact of 

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

intended to examine how various comprehensive community based 

strategies and programs can help to promote the development and 

strength of healthy marriages. 

Funds would be available for HHS to make technical assistance 

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

tribes and local administrators learn from each other. 

Effective service delivery is often inhibited by poor coordination 

and inefficiencies inherent to providing complementary services 

through different programs. Through these demonstrations, limited 

to the following three programs under the jurisdiction of the Senate 

Finance Committee: the Social Services Block Grant, The Temporary Assistance for Needy Families program and the mandatory 

child care funding, states could begin to explore ways to improve 

the quality of services for families.

Section 115—Study by the Census Bureau 

CURRENT LAW

The 1996 welfare law appropriated $10 million annually for 7 

years (FYs 1996 through 2002) to expand the Survey of Income and 

Program Participation (SIPP) so as to obtain data with which to 

evaluate TANF’s impact on a random national sample of recipients 

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

COMMITTEE BILL

The Committee bill appropriates $10 million annually for FYs 

2004 through 2008 for continued and enhanced study by the Census Bureau of TANF and other low-income families with children. 

The bill requires the Bureau to implement or enhance a longitudinal survey of program participation. It also requires the Commerce Secretary, using data from the survey, to submit two reports 

to congressional committees (House Ways and Means and Senate 

Finance Committees) on the well-being of children and families. 

The first report is due not later than 24 months, and the second 

one, not later than 60 months, after enactment of PRIDE. The bill 

specifies that where comparable measures of well-being exist in 

previous Census Bureau surveys, the reports must make appropriate comparisons and assess changes in the measures. 

REASON FOR CHANGE

Reauthorization of TANF provides an opportunity to strengthen 

the SIPP and build upon the Census Bureau’s federal-state partVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00029 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
30

nership, linking state cross-program administrative data and survey data to meet the requirements in the enhanced SIPP to understand how low-income families are faring under TANF. 

Section 116—Funding for child care 

CURRENT LAW

The 1996 welfare law created a mandatory child care block grant 

and appropriated $13.9 billion for it over 6 years ($2.7 billion for 

FY2002, the final year) and authorized $1 billion annually through 

FY2002 in discretionary funding under an expanded Child Care 

and Development Block Grant (CCDBG). FY2003 appropriations totaled $4.8 billion—$2.7 billion in mandatory funds and $2.1 billion 

in discretionary funds. (In addition, the welfare law permits states 

to transfer some TANF funds to the CCDBG.) 

COMMITTEE BILL

The Committee bill increases mandatory child care funding by $1 

billion over five years, providing $2.9 billion annually. It also sets 

aside $10 million in mandatory child care funds for the Commonwealth of Puerto Rico. 

REASON FOR CHANGE

The need for additional childcare resources to assist families. 

Section 117—Definitions 

CURRENT LAW

The law does not define the term ‘‘assistance,’’ but regulations 

define it as cash, payments, vouchers, and other forms of benefits 

designed to meet a family’s ongoing basic needs (food, clothing, 

shelter, utilities, household goods, personal care items, and general 

incidental expenses) plus supportive services such as transportation and child care provided to families who are not employed. It 

does not include nonrecurrent, short-term benefits that are not intended to meet recurrent or ongoing needs and will not extend beyond four months. 

COMMITTEE BILL

The Committee bill defines assistance to mean payment, by cash, 

voucher, or other means, to or for a person or family for the purpose of meeting a subsistence need (including food, clothing, shelter, and related items, but not including costs of transportation or 

child care) and not including a payment for a subsistence need 

made on a short-term, nonrecurring basis, as defined by the state 

in accordance with regulations prescribed by the HHS Secretary. 

REASON FOR CHANGE

The Committee bill affirms the flexibility of states to provide assistance and services to low-income families, including temporarily 

unemployed families, and clarifies that rules tied to state spending 

on ‘‘assistance’’ will not apply to child care and other non-cash 

work support services provided to the unemployed. 

31

Section 118—Responsible Fatherhood Program 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Responsible Fatherhood Program would be added to the Social Security Act as a new Part C to Title IV. The Committee bill 

amends Title 1 of P.L. 104–193 which would make the responsible 

fatherhood program subject to the charitable choice provisions. The 

Committee bill also includes a list of findings with respect to the 

impact of fathers being absent from the home and the purposes of 

a responsible fatherhood program. 

The Committee bill establishes four components for the respon- sible fatherhood program. It authorizes (1) a $20 million grant program for up to 10 eligible states to conduct demonstration programs; (2) a $30 million grant for eligible entities to conduct demonstration programs; (3) $5 million for a nationally recognized nonprofit fatherhood promotion organization to develop and promote a 

responsible fatherhood media campaign; and (4) a $20 million block 

grant to states for states to conduct responsible fatherhood media 

campaigns.

Grants to states to conduct demonstration programs 

The Committee bill authorizes a $20 million appropriation that 

gives the HHS Secretary the authority to award grants to up to 10 

eligible states to conduct demonstration programs that carry out 

the purposes described below. An eligible state is a state that submits to the Secretary an application for a grant, at such time, in 

such manner, and containing the information required by the Secretary. An eligible state must give the Secretary a state plan that 

describes the types of programs or activities that the state will 

fund under the grant, including a good faith estimate of the number and characteristics of clients to be served under the projects 

and how the state intends to achieve at least two of the purposes 

described below. The state plan also must include a description of 

how the state will coordinate and cooperate with state and local entities responsible for carrying out other programs that relate to the 

purposes intended to be achieved under the demonstration program, including as appropriate, entities responsible for carrying out 

jobs programs and programs serving children and families. In addition, the state plan must include an agreement to maintain such 

records, submit such reports, and cooperate with such reviews and 

audits as the Secretary finds necessary to provide oversight of the 

demonstration program. 

The Committee bill requires the chief executive officer of the 

state to certify to the HHS Secretary that the state will use the 

demonstration funds to promote at least two of the purposes described below; the state will return any unused funds to the Secretary; and that the funds provided under the grant will be used 

for programs and activities that target low-income participants and 

that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 

24 months has been, a recipient of assistance or services under a 

state program funded under Title IV–D or Title IV–A, foster care 

32

(Title IV–E), Medicaid (Title XIX), or food stamps; or parents, including an expectant parent or a married parent, whose income 

(after adjustment for court-ordered child support paid or received) 

does not exceed 150% of the poverty line. In addition, the chief executive officer of the state must certify to the Secretary that programs or activities funded under the demonstration grant will be 

provided with information about the prevention of domestic violence and that the state will consult with representatives of state 

and local domestic violence centers. The state must also certify that 

funds provided to the state for demonstration grants must not be 

used to supplement or supplant other federal, state, or local funds 

that are used to support programs or activities that are related to 

the purposes of the demonstration grants. 

In determining which states to award responsible fatherhood 

demonstration grants, the HHS Secretary must attempt to achieve 

a balance among the eligible states with respect to the size, urban 

or rural location, and use of differing or unique methods of the entities that states intend to use to conduct the programs and activities funded by the demonstration grants. The Secretary must give 

priority to eligible states that have demonstrated progress in 

achieving at least one of the stated purposes through previous state 

initiatives or that have demonstrated need with respect to reducing 

the incidence of out-of-wedlock births or absent fathers in the state. 

The Committee bill stipulates the purposes of the demonstration 

grants are to promote responsible fatherhood through (1) marriage 

promotion (through counseling, mentoring, disseminating information about the advantages of marriage and two-parent involvement 

for children, enhancing relationship skills, teaching how to control 

aggressive behavior, disseminating information on the causes of domestic violence and child abuse, marriage preparation programs, 

premarital counseling, skills-based marriage education, financial 

planning seminars, and divorce education and reduction programs, 

including mediation and counseling); (2) parenting activities 

(through counseling, mentoring, mediation, disseminating information about good parenting practices, skills-based parenting education, encouraging child support payments, and other methods); 

and (3) fostering economic stability of fathers (through work first 

services, job search, job training, subsidized employment, education, including career-advancing education, job retention, job enhancement, dissemination of employment materials, coordination 

with existing employment services such as welfare-to-work programs, referrals to local employment training initiatives, and other 

methods). 

The Committee bill prohibits the use of responsible fatherhood 

demonstration grants for court proceedings on matters of child visitation or child custody, or legislative advocacy. 

The Committee bill prohibits a state from being awarded a grant 

unless the state consults with experts of domestic violence or with 

relevant community domestic violence coalitions in developing programs or activities funded by the grant. The state also must describe in the grant application how the proposed programs or activities will address, as appropriate, issues of domestic violence and 

what the state will do, to the extent relevant, to ensure that participation in such programs or activities is voluntary and to inform 

potential participants that their involvement is voluntary. 

33

The Committee bill requires that each eligible state that receives 

a grant must return any unused portion of the grant for a fiscal 

year back to the HHS Secretary not later than the last day of the 

second succeeding fiscal year, together with any earnings from interest on the unused portion. The Secretary is required to establish 

an appropriate procedure for redistributing to eligible states that 

have expended the entire amount of their grant for a fiscal year 

any amount that is returned to the Secretary by eligible states. The Committee bill authorizes a $20 million appropriation for 

each of the fiscal years 2004 through 2008 for responsible fatherhood demonstration grants. The Committee bill stipulates that the 

amount of each responsible fatherhood demonstration grant awarded must be an amount sufficient to implement the state plan submitted by the state, subject to a minimum amount of $1 million per 

fiscal year in the case of the 50 states and the District of Columbia, 

and $500,000 in the case of Puerto Rico, the Virgin Islands, Guam, 

American Samoa, and the Northern Mariana Islands. 

Grants to eligible entities to conduct demonstration programs 

The Committee bill authorizes a $30 million appropriation that 

gives the HHS Secretary the authority to award grants to eligible 

entities to conduct demonstration programs that carry out the purposes described above. An eligible entity is a local government, 

local private agency, community-based or nonprofit organization, or 

private entity, including any charitable or faith-based organization 

that submits to the Secretary an application for a grant, at such 

time, in such manner, and containing the information required by 

the Secretary. An eligible entity must give the Secretary a description of the programs and activities that the entity will fund under 

the grant, including a good faith estimate of the number and characteristics of clients to be served under the projects and how the 

entity intends to achieve at least two of the purposes described 

above. The project description also must include a description of 

how the entity will coordinate and cooperate with state and local 

entities responsible for carrying out other programs that relate to 

the purposes intended to be achieved under the demonstration program, including as appropriate, entities responsible for carrying out 

jobs programs and programs serving children and families. In addition, the project description must include an agreement to maintain 

such records, submit such reports, and cooperate with such reviews 

and audits as the Secretary finds necessary to provide oversight of 

the demonstration program. 

The Committee bill requires a certification that the entity will 

use the demonstration funds to promote at least two of the purposes described above; the entity will return any unused funds to 

the Secretary; and that the funds provided under the grant will be 

used for programs and activities that target low-income participants and that at least 50 percent of the participants in each program or activity funded must be parents of a child who is, or within the past 24 months has been, a recipient of assistance or services under a state program funded under Title IV–D or Title IV–

A, foster care (Title IV–E), Medicaid (Title XIX), or food stamps; or 

parents, including an expectant parent or a married parent, whose 

income (after adjustment for court-ordered child support paid or received) does not exceed 150% of the poverty line. In addition, the 

34

Committee bill requires a certification that the entity will consult 

with representatives of state and local domestic violence centers. 

The entity must also certify that funds provided to the state for 

demonstration grants must not be used to supplement or supplant 

other federal, state, or local funds provided to the entity that are 

used to support programs or activities that are related to the purposes of the demonstration grants. 

In determining which entities to which to award responsible fatherhood demonstration grants, the HHS Secretary must attempt 

to achieve a balance among the eligible entities with respect to the 

size, urban or rural location, and use of differing or unique methods of the entities. 

The Committee bill prohibits the use of responsible fatherhood 

demonstration grants awarded to entities for court proceedings on 

matters of child visitation or child custody, or legislative advocacy. 

The Committee bill stipulates that the HHS Secretary may not 

award a grant to an eligible entity unless the entity, as a condition 

of receiving the grant, consults with experts in domestic violence 

or with relevant community domestic violence coalitions in developing the programs or activities funded by the grant; and describes 

in the grant application how the programs or activities will address 

issues of domestic violence and what the entity will do to ensure 

that participation in the programs or activities funded is voluntary 

and to inform potential participants that their involvement is voluntary. 

The Committee bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a 

fiscal year back to the HHS Secretary not later than the last day 

of the second succeeding fiscal year, together with any earnings 

from interest on the unused portion. The Secretary is required to 

establish an appropriate procedure for redistributing to eligible entities that have expended the entire amount of their grant for a fiscal year any amount that is returned to the Secretary by eligible 

entities. 

The Committee bill authorizes a $30 million appropriation for 

each of the fiscal years 2004 through 2008 for responsible fatherhood demonstration grants to eligible entities. 

National clearinghouse for responsible fatherhood programs 

The Committee bill authorizes an appropriation of $5 million for 

the HHS Secretary to contract with a nationally recognized, nonprofit fatherhood promotion organization to (1) develop, promote 

and distribute to interested states, local governments, public agencies, and private entities a media campaign that encourages appropriate involvement of both parents in the life of their children (with 

an emphasis on responsible fatherhood); and (2) develop a national 

clearinghouse to assist states and communities in efforts to promote and support marriage and responsible fatherhood by collecting, evaluating, and making available (through the Internet 

and by other means) to other states information on state-sponsored 

media campaigns. 

The Committee bill requires the HHS Secretary to ensure that 

the selected nationally recognized nonprofit fatherhood promotion 

organization coordinate the media campaign and national clearingVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00034 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
35

house that are developed with grant funds with a national, state, 

or local domestic violence program. 

The nationally recognized nonprofit fatherhood promotion organization must have at least four years of experience in designing and 

disseminating a national public education campaign, and in providing consultation and training to community-based organizations 

interested in implementing fatherhood programs. 

The Committee bill authorizes a $5 million appropriation for 

each of the fiscal years 2004 through 2008 to establish a national 

clearinghouse for responsible fatherhood programs. 

Block grants to states to encourage media campaigns 

The Committee bill authorizes the HHS Secretary to provide a 

$20 million block grant to states for media campaigns for each of 

the fiscal years 2004 through 2008. 

Not later than October 1 of each of the fiscal years for which a 

state wants to receive an allotment of block grant funds, the Committee bill requires the chief executive officer of the state to certify 

to the HHS Secretary that the state will use grant funds to promote the formation and maintenance of married two-parent families, strengthen fragile families, and promote responsible fatherhood through media campaigns. The executive officer also must certify that the state will return any unused funds to the Secretary 

and comply with the stipulated reporting requirements. 

States have the option of establishing media campaigns via radio 

or television, air-time challenge programs (under which the state 

may purchase air time only if it obtains non-federal contributions 

to purchase additional similar air time), or through the distribution 

of printed or other advertisements. A state may administer media 

campaigns directly or through grants, contracts, or cooperative 

agreements with public agencies, local governments, or private entities (including charitable and faith-based organizations). In developing broadcast and printed advertisements for media campaigns, 

the state or other entity administering the campaign must consult 

with representative of state and local domestic violence centers. 

The Committee bill defines broadcast advertisement, child at risk, 

poverty line, printed or other advertisement, state, and young 

child.

Each state’s allotment is based on its proportion of poor children 

in the nation, and its portion of children under age 5 in the nation. 

Each state and the District of Columbia would receive no less than 

the minimum allotment of $200,000; Guam, Puerto Rico, the Virgin 

Islands, American Samoa, and the Northern Mariana Islands 

would receive no less than $100,000 per year for FY2004–2008. 

The Committee bill requires that each eligible entity that receives a grant must return any unused portion of the grant for a 

fiscal year back to the HHS Secretary not later than the last day 

of the second succeeding fiscal year, together with any earnings 

from interest on the unused portion. The Secretary is required to 

establish an appropriate procedure for redistributing to states that 

have expended the entire amount of their grant for a fiscal year 

any amount that is returned to the Secretary by states, or not allotted to states because the state did not submit a certification by 

October 1 of a fiscal year. 

36

The Committee bill requires each state that receives an allotment to monitor and evaluate the media campaigns conducted 

using the allotted grant funds and submit an annual report to the 

Secretary at such time, in such manner, and containing such information as the Secretary may require. 

The Committee bill authorizes the HHS Secretary to provide a 

$20 million block grant to states for media campaigns for each of 

the fiscal years 2004 through 2008. The Secretary must conduct an 

evaluation of the impact of the media campaigns and report to Congress the results of the evaluation no later than December 31, 

2006. The Committee bill authorizes a $1 million appropriation for 

FY2004 to conduct the evaluation (the evaluation funding is to remain available until expended). 

REASON FOR CHANGE

Children do better academically, emotionally and socially when 

raised by their married biological parents. This provision in the bill 

provides states and faith based and community organizations and 

local governments with resources to find innovative ways to promote responsible fatherhood through marriage promotion and divorce reduction, parenting skill building, and where appropriate, 

expanded opportunities for strengthening the employment opportunities of low-income fathers. The provision is targeted on families, 

many of whom are unmarried at the time of the birth of their child, 

who have received TANF, Food Stamps or Medicaid Services or 

who have incomes below 150% of poverty. The provision requires 

all grantees to ensure that program participation is voluntary and 

that domestic violence experts and coalitions are consulted. 

Section 119—Additional grants 

CURRENT LAW

No provision in TANF law. 

COMMITTEE BILL

The Committee bill authorizes appropriation of $40 million for 

each of FYs 2004–2008 for grants to be made by the HHS Secretary to entities for the purpose of capitalizing and developing the 

role of sustainable social services that are critical to the success of 

moving TANF recipients to work. Applicants would be required to 

describe the capitalization strategy they intend to follow to develop 

a program that generates its own source of on-going revenue while 

assisting TANF recipients. Administrative costs could not exceed 

15 percent (except for computerization and information technology 

needed for tracking or monitoring required by TANF), but none of 

the other statutory rules regarding use of TANF funds would 

apply. The Committee bill requires the Secretary to conduct an 

evaluation of the programs developed by these grants. 

The bill also authorizes appropriation of $25 million for each of 

FYs 2004–2009 for grants for low-income car ownership. The purposes are to improve employment opportunities of low-income families and provide incentives to states, Indian tribes, localities, and 

nonprofit groups to develop and administer programs that promote 

car ownership by low-income families. No more than 5% of the 

37

funds could be used for administrative costs of the Secretary in carrying out this program. 

REASON FOR CHANGE

These provisions would support efforts to develop the role of selfsustainable social services and would help families have reliable 

means of getting to and from employment. 

Section 120—Technical corrections 

TITLE II—ABSTINENCE EDUCATION 

Section 201—Extension of Abstinence Education Program 

CURRENT LAW

The law appropriated $50 million annually for FYs 1998–2002 

for matching grants to states to provide abstinence education and, 

at state option, mentoring, counseling, and adult supervision to 

promote abstinence from sexual activity, with a focus on groups 

that are most likely to bear children out-of-wedlock. Funding was 

extended through March 31, 2004 by continuing appropriations. 

Funds must be requested by states when they apply for Maternal 

and Child Health (MUCH) block grant funds and must be used exclusively for the teaching of abstinence. States must match every 

$4 in federal funds with $3 in state funds. 

COMMITTEE BILL

The Committee bill appropriates $50 million annually for the 

program through fiscal year 2008. Moreover, the Committee bill allows unrequested abstinence education funds to be reallocated 

among the states with abstinence education programs instead of 

being returned to the U.S. Treasury. 

REASON FOR CHANGE

The Committee bill continues the program with no change, but 

allows unrequested funds to be reallocated among the states with 

abstinence education programs. This will allow states that want to 

provide abstinence education with more access to funding. 

TITLE III—CHILD SUPPORT 

Section 301—Distribution of child support collected by states on behalf of children receiving certain welfare benefits 

Assignment of child support rights 

CURRENT LAW

In order to receive benefits TANF recipients must assign their 

child support rights to the state. The assignment covers any unpaid 

child support that accrues while the family receives TANF and any 

support that accrued before the family began receiving TANF. 

Any assignment of rights to unpaid child support that was in effect on Sept. 30, 1997 must remain in effect. This means that any 

child support collected as a result of the assignment must go the 

state and the federal government. 

38

COMMITTEE BILL

The Committee bill stipulates that the assignment covers only 

child support that accrues during the period that the family receives TANF. (In other words, pre-assistance arrearages would be 

eliminated). In addition, the Committee bill gives states the option 

to discontinue assignments in effect on Sept. 30, 1997. If a state 

chooses to discontinue the child support assignment, the state may 

distribute collections from such assignment to the family. States 

also would have the option to discontinue pre-assistance arrearage 

assignments in effect after September 30, 1997 and before the implementation date of this provision. If a state chooses to discontinue the child support assignment, the state may distribute collections from such assignment to the family. 

REASON FOR CHANGE

The Committee bill would support family self-sufficiency by allowing families to keep more of the child support collected on their 

behalf. It would also prevent TANF families from losing access to 

lump sum collections of past-due pre-assistance support that may 

help them exit TANF. 

Distribution of child support to TANF families 

CURRENT LAW

While the family receives TANF benefits, the state is permitted 

to retain any current child support payments and any assigned arrearages it collects up to the cumulative amount of TANF benefits 

which has been paid to the family. In other words, the state can 

decide how much, if any, of the state share (some, all, none) of the 

child support payment collected on behalf of TANF families to send 

to the family. The state is required to pay the federal government 

the federal share of the child support collected. 

Child support payments collected on behalf of TANF families 

that are passed through to the family and disregarded by the state 

count toward the TANF MOE (maintenance of effort) expenditure 

requirement. 

COMMITTEE BILL

For families who receive assistance from the State (which would 

include TANF or foster care) the Committee bill requires the federal government to waive its share of child support collections 

passed through to TANF families by the state and disregarded by 

the State up to an amount equal to $400 per month in the case of 

a family with one child, and up to $600 per month in the case of 

a family with two or more children. Like current law, disregarded 

pass through amounts count as TANF MOE expenditures. 

The Committee bill includes a provision that allows states with 

section 1115 demonstration waivers (on or before October 1, 1997) 

related to the child support pass-through provisions to continue to 

pass through payments to families in accordance with the terms of 

the waiver. 

39

REASON FOR CHANGE

The Committee bill promotes family self-sufficiency by providing 

an incentive for States to allow families to keep more of the child 

support collected on their behalf. No such incentive currently exists. This option would also allow noncustodial parents who pay 

child support to know that their support payments are being received by their children. 

Distribution of child support to former TANF families 

CURRENT LAW

With respect to former TANF families: Current child support 

payments must be paid to the family. Since October 1, 1997, child 

support arrearages that accrue after the family leaves TANF also 

are required to be paid to the family before any monies may be retained by the State. Further since October 1, 2000, child support 

arrearages that accrued before the family began receiving TANF 

also are required to be distributed to the family first. 

However, if child support arrearages are collected through the 

federal income tax refund offset program, the family does not have 

first claim on the arrearage payments. Such arrearage payments 

are retained by the state and the federal government. 

COMMITTEE BILL

As mentioned above, the Committee bill eliminates the assignment of pre-assistance arrearages. The Committee bill also eliminates the special treatment of child support arrearages collected 

through the federal income tax refund offset program. Such collections also would go the family first.

To the extent that the arrearage amount payable to a former 

TANF family in any given month under the Committee bill exceeds 

the amount that would have been payable to the family under current law, the state can elect to have the amount paid to the family 

considered an expenditure for Maintenance-of-Effort (MOE) purposes. In addition, the Committee bill amends the Child Support 

Enforcement State Plan to include an election by the state to include whether it is using the new option to pass through all arrearage payments to former TANF families without paying the federal 

government its share of such collections or whether it chooses to 

maintain the current law distribution method. Further, the Committee bill stipulates that no later than 6 months after the date of 

enactment of this legislation, the HHS Secretary, in consultation 

with the states, must establish the procedures to be used to make 

estimates of excess costs associated with the new funding option. 

REASON FOR CHANGE

The Committee bill supports self-sufficiency by providing former 

TANF families with more of the child support collected on their behalf, regardless of how it is collected. It allows states to use the 

federal tax refund offset remedy to get more collections to families. 

Providing MOE for additional money to families provides further 

incentive for states to exercise this option and is consistent with 

MOE policy on the pass through of child support collections to current TANF families. 

40

Distribution of child support to families that never received 

assistance 

CURRENT LAW

The entire amount of the child support collection is distributed 

to families that never received TANF assistance. 

COMMITTEE BILL

Same as current law. 

REASON FOR CHANGE

No change 

Distribution of child support to families under certain agreements 

CURRENT LAW

In the case of a family receiving TANF assistance from an Indian 

tribe or tribal organization, the child support collection is to be distributed according to the cooperative agreement specified in the 

Child Support Enforcement State Plan. 

COMMITTEE BILL

Same as current law. 

REASON FOR CHANGE

No change. 

Effective date 

CURRENT LAW

Not applicable. 

COMMITTEE BILL

The amendments made by this section of the bill would take effect on October 1, 2007, and would apply to payments under parts 

A and D of Title IV of the Social Security Act for calendar quarters 

beginning on or after such date. States could elect to have the 

amendments take effect earlier—at any date that is after enactment of the bill and before October 1, 2007. 

REASON FOR CHANGE

This effective date will allow states sufficient time to implement 

required and optional changes in child support distribution and assignment, while also allowing states to choose to proceed more 

quickly. 

Section 302—Mandatory review and adjustment of child support orders for families receiving TANF 

CURRENT LAW

Federal law requires that the state have procedures under which 

every 3 years the state review and adjust (if appropriate) child support orders at the request of either parent, and that in the case of 

41

TANF families, the State review and update (if appropriate) child 

support orders at the request of the state Child Support Enforcement (CSE) agency or of either parent. 

COMMITTEE BILL

The Committee bill requires states to review and, if appropriate, 

adjust child support orders in TANF cases every 3 years. The provision would take effect on October 1, 2005. 

REASON FOR CHANGE

The mandatory review and, if necessary, modification of child 

support orders will make award amounts more appropriate. In 

some cases this will increase the amount of payment required, 

which will in turn increase collections, and in other cases it will reduce the amount of payment required, therefore limiting the accumulation of uncollectible arrears. 

Section 303—Report on undistributed child support payments 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee bill requires that within 6 months of enactment, 

the HHS Secretary must submit to the House Ways and Means 

Committee and the Senate Finance Committee a report on the procedures states use to locate custodial parents for whom child support has been collected but not yet distributed. The report must include an estimate of the total amount of undistributed child support and the average length of time it takes undistributed child 

support to be distributed. To the extent that the HHS Secretary 

deems appropriate, the report would be required to include recommendations as to whether additional procedures should be established at the state or federal level to expedite the payment of 

undistributed child support. 

REASON FOR CHANGE

Undistributed collections are a significant new issue that merits 

further analysis and may require further state or federal action in 

order to ensure that families are receiving the support paid on 

their behalf, as appropriate. 

Section 304—Use of new hire information to assist in administration of unemployment compensation programs 

CURRENT LAW

Federal law requires all employers in the nation 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 to send a wage withholding order to 

their employer, and to (within 3 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 opVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00041 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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erates the State Unemployment Compensation program) to match 

against unemployment compensation records to determine whether 

people drawing unemployment compensation benefits are actually 

working. (Note that states currently have access to the new hire information only in their own state.) 

COMMITTEE BILL

The Committee bill authorizes State Employment Security Agencies (which are responsible for administering the Unemployment 

Compensation program) to request and receive information from 

the National Directory of New Hires (which includes information 

from all of the state directories as well as federal employers) via 

the HHS Secretary in order to help detect fraud in the unemployment compensation system. 

The Committee bill requires state agencies to have in effect data 

security and control policies that the HHS Secretary finds adequate 

to ensure the security of the information and to ensure that access 

to such information is restricted to authorized persons for purposes 

of authorized uses and disclosures. An officer or employee of a state 

agency who fails to comply with security requirements would be 

subject to current law penalties related to misuse of information. 

The Committee bill requires the Secretary to establish uniform procedures that govern information requests and data matching. The 

Committee bill requires the state agency to reimburse the HHS 

Secretary for cost incurred by the Secretary in furnishing requested 

information. 

The provision would take effect on October 1, 2004. 

REASON FOR CHANGE

The Committee bill will improve the Unemployment Compensation Program by allowing State Employment Security Agencies to 

determine whether people drawing unemployment compensation 

benefits are actually working in another state or for the federal 

government. Current data matches do not allow SESAs to identify 

this kind of employment. 

Section 305—Decrease in amount of child support arrearage triggering passport denial 

CURRENT LAW

Federal law stipulates that the HHS Secretary is required to 

submit to the Secretary of State the names of noncustodial parents 

who have been certified by the state CSE agency as owing more 

than $5,000 in past-due child support. The Secretary of State has 

authority to deny, revoke, restrict, or limit passports to noncustodial parents whose child support arrearages exceed $5,000. 

COMMITTEE BILL

The Committee bill authorizes the denial, revocation, or restriction of passports to noncustodial parents whose child support arrearages exceed $2,500, rather than $5,000 as under current law. 

The provision would take effect on October 1, 2004. 

43

REASON FOR CHANGE: 

This provision will increase the success of the passport denial 

program and provide more collections to families. Fewer arrears 

will have to build up before this effective enforcement tool can be 

utilized. 

Section 306—Use of tax refund intercept program to collect past-due 

child support on behalf of children who are not minors 

CURRENT LAW

Federal law prohibits the use of the federal income tax offset program to recover past-due child support on behalf of non-welfare 

cases in which the child is not a minor, unless the child was determined disabled while he or she was a minor and for whom the 

child support order is still in effect. (Since its enactment in 1981 

(P.L. 97–35), the federal income tax offset program has been used 

to collect child support arrearages on behalf of welfare families regardless of whether the children were still minors—as long as the 

child support order was in effect.) 

COMMITTEE BILL

The Committee bill permits the federal income tax refund offset 

program to be used to collect arrearages on behalf of non-welfare 

children who are no longer minors. The provision would take effect 

on October 1, 2005. 

REASON FOR CHANGE

This will increase support to families by removing a barrier to 

collecting past due child support on behalf of children who are no 

longer minors. 

Section 307—Garnishment of compensation paid to veterans for 

service-connected disabilities in order to enforce child support 

obligations 

CURRENT LAW

The disability compensation benefits of veterans are treated differently than most forms of government payment for purposes of 

paying child support. Whereas most government payments are subject to being automatically withheld to pay child support, veterans 

disability compensation is not subject to intercept. The only exception occurs when veterans have elected to forego some of their retirement pay in order to collect additional disability payments. The 

advantage of veterans replacing retirement pay with disability pay 

is that the disability pay is not subject to taxation. With this exception, which occurs rarely, the only way to obtain child support payments from veterans’ disability compensation is to request that the 

Secretary of the Veterans Administration intercept the disability 

compensation and make the child support payments. 

COMMITTEE BILL

The Committee bill allows veterans’ disability compensation benefits to be intercepted (withheld) and paid on a routine basis to the 

custodial parent if the veteran is in arrears on child support payVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00043 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
44

ments. This provision prohibits the garnishment of any veteran’s 

disability compensation in order to collect alimony, unless that disability compensation is being paid because retirement benefits are 

being waived. The provision would take effect on October 1, 2005. 

REASON FOR CHANGE

This proposal will provide more child support collections to families of veterans and make the child support intercept of veterans’s 

disability payments more consistent with other forms of government payment. 

Section 308—Improving federal debt collection practices 

CURRENT LAW

Federal law stipulates that any federal agency that is owed a 

nontax debt (that is more than 180 days past-due) may notify the 

Secretary of the Treasury to obtain an administrative offset of the 

debt. Currently, states have the authority to garnish Social Security benefits (but not Supplemental Security Income [SSI] benefits) 

for child support payments, but they cannot use the federal administrative offset process to do so. However, Social Security payments 

can only be offset for federal debt recovery. Federal law exempts 

$9,000 annually ($750 per month) from the administrative offset. 

COMMITTEE BILL

The Committee bill expands the federal administrative offset program by allowing certain Social Security benefits to be offset to collect past-due child support (on behalf of families receiving CSE 

[Title IV–D of the Social Security Act] services) in appropriate 

cases selected by the states. The provision would take effect on October 1, 2004. 

REASON FOR CHANGE

The Committee bill will increase child support collections to the 

families of benefit recipients by allowing offset of additional benefits, while maintaining an adequate benefit level for the recipient. 

Section 309—Maintenance of technical assistance funding 

CURRENT LAW

Federal law authorizes the HHS Secretary to use 1% of the federal share of child support collected on behalf of TANF families the 

preceding year to provide to the states—information dissemination 

and technical assistance, training of state and federal staff, staffing 

studies, and related activities needed to improve CSE programs (including technical assistance concerning state automated CSE systems), and research demonstration and special projects of regional 

or national significance relating to the operation of CSE programs. 

Such funds are available until they are expended. 

COMMITTEE BILL

The Committee bill authorizes the HHS Secretary to use 1% of 

the federal share of child support collected on behalf of TANF families the preceding year, or the amount appropriated for FY2002, 

whichever is greater, to provide to the states—information dissemiVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00044 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
45

nation and technical assistance, training of state and federal staff, 

staffing studies, and related activities needed to improve CSE programs (including technical assistance concerning state automated 

CSE systems), and research, demonstration and special projects of 

regional or national significance relating to the operation of CSE 

programs. Such funds are available until they are expended. 

REASON FOR CHANGE

Since the child support assignment and distribution changes in 

the Committee bill will allow TANF and former TANF families to 

keep more of the child support collected on their behalf, TANF collections retained by the federal government will be reduced. This 

provision freezes technical assistance funding at least at FY2002 

levels to ensure that sufficient funding is available for important 

child support technical assistance functions, even as the federal 

share of collections falls. 

Section 310—Maintenance of federal parent locator service funding 

CURRENT LAW

Federal law authorizes the HHS Secretary to use 2% of the federal share of child support collected on behalf of TANF families the 

preceding year for operation of the Federal Parent Locator Service 

to the extent that the costs of the Federal Parent Locator Service 

are not recovered by user fees. Federal law allows only such funds 

that were appropriated for FY1997–FY2001 to remain available 

until expended.

COMMITTEE BILL

The Committee bill authorizes the HHS Secretary to use 2% of 

the federal share of child support collected on behalf of TANF families the preceding year, or the amount appropriated for FY2002, 

whichever is greater, for operation of the Federal Parent Locator 

Service to the extent that the costs of the Federal Parent Locator 

Service are not recovered by user fees. Allows amounts appropriated for the Federal Parent Locator Service to remain available 

until they are expended. 

REASON FOR CHANGE

Since the child support assignment and distribution changes in 

the Committee bill will allow TANF and former TANF families to 

keep more of the child support collected on their behalf, TANF collections retained by the federal government will be reduced. This 

provision freezes Federal Parent Locator Service funding at least at 

FY2002 levels to ensure that sufficient funding is available for the 

operation of the Federal Parent Locator Service, which is a key 

child support enforcement tool, even as the federal share of collections falls. 

Section 311—Identification and seizure of assets held by multi-state 

financial institutions 

CURRENT LAW

The 1996 welfare reform law required states to enter into agreements with financial institutions conducting business within their 

46

state for the purpose of conducting a quarterly data match. The 

data match is intended to identify financial accounts (in banks, 

credit unions, money-market mutual funds, etc.) belonging to parents who are delinquent in the payment of their child support obligation. When a match is identified, state CSE agencies may issue 

liens or levies on the account(s) of the delinquent parent to collect 

the past-due child support. In some cases, state law prohibits the 

placement of liens or levies on accounts outside of the state and 

some financial institutions only accept liens and levies from the 

state where the account is located. In 1998, Congress made it easier for multi-state financial institutions to match records by permitting the Federal Parent Locator Service (FPLS) to help them coordinate their information. 

COMMITTEE BILL

The Committee bill authorizes the HHS Secretary, via the Federal Parent Locator Service, to assist states to perform data 

matches comparing information from states and participating 

multi-state financial institutions with respect to persons owing 

past-due child support. The Committee bill authorizes the Secretary via the Federal Parent Locator Service to seize assets, held 

by such financial institutions, of noncustodial parents who owe 

child support arrearage payments, by issuing a notice of a lien or 

levy and requiring the financial institution to freeze and seize assets in accounts in multi-state financial institutions to satisfy child 

support obligations. The Secretary would be required to transmit 

any assets seized under the procedure to the state for accounting 

and distribution. The Committee bill stipulates that the Secretary 

must inform affected account holders/ asset holders of their due 

process rights. 

REASON FOR CHANGE

After HHS identifies assets held in multi-state financial institutions by persons who owe past due support, many states cannot 

take action to seize financial assets when they are located in another state. Therefore, the Committee bill authorizes the Secretary 

to take administrative action on behalf of a state to freeze and 

seize assets in accounts in multi-state financial institutions, identified through the multi-state financial institution data match. This 

will make full use of this existing enforcement mechanism and increase the collection of past-due child support. 

Section 312—Information comparisons with insurance data 

CURRENT LAW

No provision. 

COMMITTEE BILL

The Committee bill authorizes the HHS Secretary, via the Federal Parent Locator Service, to compare information of noncustodial 

parents who owe past-due child support with information maintained by insurers (or their agents) concerning insurance claims, 

settlements, awards, and payments; and to furnish any information 

resulting from a match to the appropriate state CSE agency in 

order to secure settlements, awards, etc. for payment of past-due 

47

child support. The Committee bill stipulates that no insurer would 

be liable under federal or state law for disclosures made in good 

faith of this provision. 

REASON FOR CHANGE

States must have in effect laws requiring the use of procedures 

authorizing intercepting or seizing periodic or lump-sum payments 

from settlements to satisfy current support obligations. Often 

states are unable to access the databases that contain insurance 

and settlement information, especially when the information is related to an interstate case or when an insurance company is located in another state. In order to assist states, the Committee bill 

permits the Secretary to administer an insurance claims matching 

program. Under the proposal, the Federal Offset File (individuals 

who owe past-due support) would be matched against insurance 

databases to identify individuals who have pending insurance 

claims and settlements. The Secretary would notify states if delinquent obligors have pending insurance claims and settlements so 

that states could take enforcement actions to freeze and seize these 

payments. Participation by insurance companies would be voluntary. 

Section 313—Tribal access to the federal parent locator service 

CURRENT LAW

The Federal Parent Locator Service (FPLS) is a national location 

system operated by the federal Office of Child Support Enforcement 

to assist states in locating noncustodial parents, putative fathers, 

and custodial parties for the establishment of paternity and child 

support obligations, as well as the enforcement and modification of 

orders for child support, custody and visitation. It also identifies 

support orders or support cases involving the same parties in different states. The FPLS consists of the Federal Case Registry, Federal Offset Program, Multi-state Financial Institution Data Match, 

National Directory of New Hires, and the Passport Denial Program. Additionally, the FPLS has access to external locate sources 

such as the Internal Review Service (IRS), the Social Security Administration (SSA), Veterans Affairs (VA), the Department of Defense (DOD), and the Federal Bureau of Investigation (FBI). The 

FPLS is only allowed to transmit information in its databases to 

‘‘authorized persons,’’ which include (1) child support enforcement 

agencies (and their attorneys and agents); (2) courts, (3) the resident parent, legal guardian, attorney, or agent of a child owed child 

support; and (4) foster care and adoption agencies. 

COMMITTEE BILL

The Committee bill includes Indian tribes and tribal organizations that operate a child support enforcement program as ‘‘authorized persons.’’

REASON FOR CHANGE

The Committee bill will give tribal child support enforcement 

programs access to the Federal Parent Locator Service, to which 

state child support enforcement agencies currently have access, so 

that they can use it to locate noncustodial parents to establish paVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00047 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
48

ternity and collect child support. This will increase child support 

collections to families, especially tribal families. 

Section 314—Reimbursement of Secretary’s costs of information 

comparisons and disclosure for enforcement of obligations on 

higher education act loans and grants 

CURRENT LAW

Federal law (P.L. 106–113) authorized the Department of Education to have access to the National Directory of New Hires. The 

provisions were designed to improve the ability of the Department 

of Education to collect on defaulted loans and grant overpayments 

made to individuals under Title IV of the Higher Education Act of 

1965. The Federal Office of Child Support Enforcement (OCSE) and 

the Department of Education negotiated and implemented a Computer Matching Agreement in December 2000. Under the agreement, the Secretary of Education is required to reimburse the HHS 

Secretary for the additional costs incurred by the HHS Secretary 

in furnishing requested information. 

COMMITTEE BILL

The Committee bill amends the reimbursement of costs provision 

by eliminating the word additional. Thus, the Secretary of Education is to reimburse the HHS Secretary for any costs incurred by 

the HHS Secretary in providing requested new hires information. 

REASON FOR CHANGE

The Committee bill makes legislative language governing the Department of Education’s access to the National Directory of New 

Hires consistent with general reimbursement language that applies 

to other entities. 

Section 315—Technical amendment relating to cooperative agreements between states and Indian tribes 

CURRENT LAW

Federal law requires that any state that has a child welfare program and that has Indian country may enter into a cooperative 

agreement with an Indian tribe or tribal organization if the tribe 

demonstrates that it has an established tribal court system with 

several specific characteristics related to paternity establishment 

and the establishment and enforcement of child support obligations. The HHS Secretary may make direct payments to Indian 

tribes and tribal organizations that have approved child support 

enforcement plans. 

COMMITTEE BILL

The Committee bill deletes the reference to child welfare programs. 

REASON FOR CHANGE

This reference incorrectly refers to the child welfare program 

rather than the child support enforcement program. 

49

Section 316—Claims upon longshore and harbor workers’ compensation for child support 

CURRENT LAW

The Longshore and Harbor Worker’s Compensation Act is the 

federal worker’s compensation law for maritime workers and persons working in shipyards and on docks, ships, and offshore drilling platforms. The Act exempts benefits paid by longshore or harbor employers or their insurers from all claims of creditors. Thus, 

Longshore and Harbor Worker’s Compensation Act benefits that 

are paid by longshore or harbor employers or their insurers are not 

subject to attachment for payment of child support obligations. 

COMMITTEE BILL

The Committee bill amends the Longshore and Harbor Workers’

Compensation Act to ensure that longshore or harbor workers benefits that are provided by the federal government or by private insurers are subject to garnishment for purposes of paying child support obligations. 

REASON FOR CHANGE

The Federal Longshore and Harbor Worker’s Compensation Act 

(LHWCA) stipulates that benefits that are paid by a self-insured 

entity or private insurer are not subject to attachment for payment 

of child support obligations. The Committee bill would allow garnishment of all LHWCA benefits for purpose of child support enforcement, thereby increasing child support collections. 

Section 317—State option to use statewide automated data processing and information retrieval system for interstate cases 

CURRENT LAW

The 1996 welfare reform law mandated states to establish procedures under which the state would use high-volume automated administrative enforcement, to the same extent as used for intrastate 

cases, in response to a request from another state to enforce a child 

support order. This provision was designed to enable child support 

agencies to quickly locate and secure assets held by delinquent 

noncustodial parents in another state without opening a full-blown 

interstate child support enforcement case in the other state. The 

assisting state must use automatic data processing to search various state data bases including financial institutions, license 

records, employment service data, and state new hire registries, to 

determine whether information is available regarding a parent who 

owes a child support obligation, the assisting state is then required 

to seize any identified assets. This provision does not allow states 

to open/establish a child support interstate case. 

COMMITTEE BILL

The Committee bill allows an assisting state to establish a child 

support interstate case based on another state’s request for assistance; and thereby an assisting state may use the CSE statewide 

automated data processing and information retrieval system for 

interstate cases. 

50

REASON FOR CHANGE

The Committee bill allows states that cannot now use their automated systems to provide high-volume automated administrative 

enforcement services in interstate cases to choose to open a case in 

order to assist other states in collecting child support. This will increase interstate child support collections. 

Section 318—Interception of gambling winnings for child support 

CURRENT LAW

Federal law requires states to establish expedited processes within the state judicial system or under administrative processes for 

obtaining and enforcing child support orders and determining paternity. These expedited procedures include giving states authority 

to secure assets to satisfy payment of past-due support by seizing 

or attaching lumpsum payments from unemployment compensation, workers’ compensation, judgments, settlements, lotteries, assets held in financial institutions, and public and private retirement funds. 

COMMITTEE BILL

The Committee bill authorizes the HHS Secretary via the Federal Parent Locator Service to intercept gambling winnings of noncustodial parents who owe past-due child support and transmit 

those winnings to the appropriate state CSE agency for distribution. The Committee bill defines gambling winnings as the proceeds 

of a wager that are subject to federal tax (e.g., winnings from casinos, horse racing, dog racing, jai alai, sweepstakes, parimutuel 

pools, lotteries, etc.). The Secretary must compare information obtained from gambling establishments with information on persons 

who owe past-due support and direct the gambling establishment 

to withhold from the person’s net winnings (i.e., the amount left 

after withholding amounts for federal taxes) all amounts not exceeding the total amount owed in past-due child support. In addition to the child support arrearage, a processing fee (not to exceed 

2% of the child support arrearage amount withheld) would be deducted from the non-custodial parent’s winnings. These procedures 

would only affect persons who won enough so that an IRS Form 

W2–G must be issued to report their winnings to the IRS and who 

owe child support arrearage payments. 

The Committee bill stipulates that gambling establishments 

must not pay certain individuals any gambling winnings until the 

gambling establishment has furnished the HHS Secretary certain 

information so that a data match can be performed to determine 

if the individual owes past-due child support. If a data match occurs, the gambling establishment is to withhold specified winnings 

and transfer them to the Secretary at the same time and in the 

same manner as amounts withheld for federal income tax purposes 

would be transferred to the IRS. The Committee bill requires the 

Secretary to promptly transfer gambling winnings to the appropriate state CSE agency. 

The Committee bill requires gambling establishments to provide 

written notice to the gambler regarding the amount of the withholding, the reason and authority for the withholding, and an exVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00050 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
51

planation of the individual’s due process rights, including how the 

individual can appeal the withholding or the amount of the withholding to the state CSE agency. The Committee bill includes nonliability protections for gambling establishments who comply with 

the provisions related to the withholding of gambling winnings for 

child support purposes. Gambling establishments that do not comply with the aforementioned requirements would be liable for the 

amount that should have been withheld by the establishment. 

Indian tribes and tribal organizations would have to agree to 

comply with the aforementioned requirements in order to receive 

direct child support enforcement funding. 

REASON FOR CHANGE

The Committee bill requires the Secretary to provide the necessary information and assistance to state and tribal child support 

enforcement agencies in order to increase child support collections 

by withholding child support from gaming winnings while maintaining the security and privacy of child support data and ensuring 

that due process requirements are met. 

Section 319—State law requirement concerning the uniform interstate family support act (UIFSA) 

CURRENT LAW

The 1996 welfare reform law (P.L. 104–193) required that on and 

after January 1, 1998, each state must have in effect the Uniform 

Interstate Family Support Act (UIFSA), as approved by the American Bar Association on February 9, 1993, and as in effect on August 22, 1996, including any amendments officially adopted as of 

such date by the National Conference of Commissioners on Uniform State Laws. 

Federal law requires states to treat past-due child support obligations as final judgments that are entitled to full faith and credit 

in every state. This means that a person who has a child support 

order in one state does not have to obtain a second order in another 

state to obtain child support due should the noncustodial parent 

move from the issuing court’s jurisdiction. P.L. 103–383 restricts a 

state court’s ability to modify a child support order issued by another state unless the child and the custodial parent have moved 

to the state where the modification is sought or have agreed to the 

modification. The 1996 welfare reform law (P.L. 104–193) clarified 

the definition of a child’s home state, makes several revisions to ensure that the full faith and credit laws can be applied consistently 

with UIFSA, and clarifies the rules regarding which child support 

orders states must honor when there is more than one order.

COMMITTEE BILL

The Committee bill requires that each state’s Uniform Interstate 

Family Support Act (UIFSA) must include any amendments officially adopted as of August 2001 by the National Conference of 

Commissioners on Uniform State Laws. 

In addition, the Committee bill clarifies current law by stipulating that a court of a state that has established a child support 

order has continuing, exclusive jurisdiction to modify its order if 

the order is the controlling order and the state is the child’s state 

52

or the residence of any individual contestant; or if the state is not 

the residence of the child or an individual contestant, the contestant’s consent in a record or in open court that the court may continue to exercise jurisdiction to modify its order. It also modifies 

the current rules regarding the enforcement of modified orders. 

REASON FOR CHANGE

The Committee bill updates an outdated reference to an older 

version of UIFSA. 

Section 320—Grants to states for access and visitation programs 

CURRENT LAW

The 1996 welfare reform law (P.L. 104–193) authorized grants to 

states (via CSE funding) to establish and operate access and visitation programs. The purpose of the grants is to facilitate noncustodial parents’ access to and visitation of their children. An annual 

entitlement of $10 million from the federal CSE budget account is 

available to states for these grants. Eligible activities include but 

are not limited to mediation, counseling, education, development of 

parenting plans, visitation enforcement, and development of guidelines for visitation and alternative custody arrangements. The allotment formula is based on the ratio of the number of children in 

the state living with only one biological parent in relation to the 

total number of such children in all states. The amount of the allotment available to a state will be this same ratio to $10 million. The 

allotments are to be adjusted to ensure that there is a minimum 

allotment amount of $50,000 per state for FY1997 and FY1998, 

and a minimum of $100,000 for any year after FY1998. States may 

use the grants to create their own programs or to fund programs 

operated by courts, local public agencies, or nonprofit organizations. The programs do not need to be statewide. States must monitor, evaluate, and report on their programs in accord with regulations issued by the HHS Secretary. 

COMMITTEE BILL

The Committee bill increases funding for Access and Visitation 

grants from $10 million annually to $12 million in FY2004, $14 

million in FY2005, $16 million in FY2006, and $20 million annually in FY2007 and each succeeding fiscal year. The Committee bill 

extends the Access and Visitation program to Indian tribes and 

tribal organizations that have received direct child support enforcement payments from the federal government for at least one year. 

The Committee bill includes a specified amount to be set aside for 

Indian tribes and tribal organizations: $250,000 for FY2004; 

$600,000 for FY2005; $800,000 for FY2006; and $1.670 million for 

FY2007 or any succeeding fiscal year. 

The Committee bill increases the minimum allotment to states 

from $100,000 in fiscal years 1999–2003 to $120,000 in FY2004, 

$140,000 in FY2005, $160,000 in FY2006, and $180,000 in FY2007 

or any succeeding fiscal year. The minimum allotment for Indian 

tribes and tribal organizations is $10,000 for a fiscal year. The tribal allotment cannot exceed the minimum state allotment for any 

given fiscal year. 

53

The allotment formula for Indian tribes and tribal organizations 

that operate child support enforcement programs is based on the 

ratio of the number of children in the tribe or tribal organization 

living with only one parent in relation to the total number of children living with only one parent in all Indian tribes or tribal organizations. The amount of the allotment available to an Indian tribe 

or tribal organization would be this same ratio to the maximum allotment for Indian tribes and tribal organizations (i.e., $250,000 for 

FY2004; $600,000 for FY2005; $800,000 for FY2006; and $1.670 

million for FY2007 or any succeeding fiscal year). (Pro rata reductions are to be made if they are necessary.) 

REASON FOR CHANGE

The Committee bill provides additional funding for the Access 

and Visitation Grant Program so that more families can benefit 

from these services. Increasing a child’s access to both parents may 

improve child well-being and is associated with increased compliance in the payment of child support. 

Section 321—Timing of corrective action year for state noncompliance with child support enforcement program requirements 

CURRENT LAW

Federal law requires that audits be conducted at least every 3 

years to determine whether the standards and requirements prescribed by law and regulations have been met by the child support 

program of every state. If a state fails the audit, federal TANF 

funds must be reduced by an amount equal to at least 1 but not 

more than 2 percent for the first failure to comply, at least 2 but 

not more than 3 percent for the second failure, and at least 3 but 

not more than 5 percent for the third and subsequent failures. 

The HHS Secretary also must review state reports on compliance 

with federal requirements and provide states with recommendations for corrective action. The purpose of the audits is to assess 

the completeness, reliability, and security of data reported for use 

in calculating the performance indicators and to assess the adequacy of financial management of the state program. Federal law 

calls for penalties to be imposed against states that fail to comply 

with a corrective action plan in the succeeding fiscal year. 

COMMITTEE BILL

The Committee bill changes the timing of the corrective action 

year for states that are found to be in noncompliance of child support enforcement program requirements. The Committee bill 

changes the corrective action year to the fiscal year following the 

fiscal year in which the Secretary makes a finding of noncompliance and recommends a corrective action plan. The change is made 

retroactively in order to allow the Secretary to treat all findings of 

noncompliance consistently. 

REASON FOR CHANGE

Current language does not recognize the time necessary to conduct federal audits and that those audits now occur during what 

is, under current law, a state’s corrective action year. This techVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00053 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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nical correction will give states a full year to correct identified deficiencies. 

TITLE IV—CHILD WELFARE 

Section 401—Extension of authority to approve demonstration 

projects 

CURRENT LAW

The law permits the HHS Secretary to conduct demonstration 

projects that are likely to promote the objectives of the child welfare programs authorized under Title IV–B and Title IV–E. This 

authority is granted for FY1998 through FY2003. 

COMMITTEE BILL

The Committee bill extends this authority through FY2008. 

REASON FOR CHANGE

The existing waiver programs have allowed states to seek improvements and efficiencies in child protection programs. Much 

have been learned from these demonstrations, which require rigorous evaluations. Extending waiver authority would yield additional important information. 

Section 402—Removal of Commonwealth of Puerto Rico foster care 

funds from limitation on payments 

CURRENT LAW

Combined federal funding for public assistance programs for 

Puerto Rico is capped at $107,255,000 yearly. This ceiling covers 

grants for TANF, Aid to the Aged, Blind, or Disabled, and programs under Title IV–E of the Social Security Act (foster care, 

adoption assistance, and independent living programs. 

COMMITTEE BILL

The bill would remove from Puerto Rico’s overall funding ceiling 

foster care payments made to Puerto Rico for FY2005 or any later 

year that exceed the total amount of foster payments made to the 

Commonwealth for FY2002. However, the amount disregarded 

under this provision could not exceed $6,250,000 for each of FYs 

2005 through 2008. 

REASON FOR CHANGE

The Committee is concerned about the ability of Puerto Rico to 

operate its IV–E program effectively within the current limits that 

exist on its combined social services expenditures for IV–E, TANF, 

and Aid to the Aged, Blind, and Disabled programs. Therefore the 

Committee would allow Puerto Rico to claim up to $6.25 million in 

IV–E costs per year above its total social services cap (beginning 

in FY 2005), but only to the extent such costs exceed IV–E expenditures in FY2002. The Committee recognizes that budgetary constraints do not allow for the removal of the entire program from 

the cap, but acknowledges that this change will provide additional 

funding to allow Puerto Rico to better serve this population. 

55

TITLE V—SUPPLEMENTAL SECURITY INCOME 

Section 501—Review of state agency blindness and disability determinations 

CURRENT LAW

The law has no provision requiring review by the Social Security 

Commissioner of state agency determinations of SSI eligibility on 

grounds of blindness or disability. It does require review of blindness or disability determinations for Disability Insurance (DI). 

COMMITTEE BILL

The Committee bill requires the Social Security Commissioner to 

review state agency blindness and disability determinations for 

SSI. It calls for review of at least 20 percent of determinations 

made in FY2004; 40% in FY2005; and 50% in FY2006 or thereafter. 

TITLE VI—TRANSITIONAL MEDICAL ASSISTANCE 

Section 601—Transitional medical assistance 

CURRENT LAW

The law requires transitional medical assistance (TMA)—from 6 

to 12 months—for those whose lose Medicaid eligibility because of 

increased income arising from work (higher wages or more hours 

of work). Authorization for 6–12 months of TMA expired on September 30, 2002, but was extended by a series of measures through 

March 31, 2004. (Permanent provisions of law require 4 months of 

transitional medical benefits to families who lose Medicaid eligibility because of income from child or spousal support or from earnings.) 

COMMITTEE BILL

The Committee bill continues TMA until September 30, 2008. It 

also permits states to extend TMA for up to 24 months, allows continuous eligibility for 12 months by making reporting requirement 

optional, and eases access by permitting states to waive the requirement for previous receipt of Medicaid (for 3 of previous 6 

months). 

REASON FOR CHANGE

The Committee bill recognizes that Medicaid is an important 

part of the safety net for needy families, and that health care is 

a critical support for low-income families as they transition from 

welfare to work and self-sufficiency, particularly for families with 

entry-level employment. 

Section 602—Covering childless adults with SCHIP funds 

CURRENT LAW

In 1997, when the State Children Health Insurance Program 

(SCHIP) was created, Congress specified that SCHIP allocations 

only could be used, ‘‘to enable [States] to initiate and expand the 

provision of child health assistance to uninsured, low-income children in an effective and efficient manner.’’

56

COMMITTEE BILL

In the past, the Secretary of Health and Human Services has approved waivers that spend SCHIP dollars to cover childless adults. 

The proposal clarifies the intent of Congress: specifically stating 

that SCHIP funds cannot be spent on childless adults. It will no 

longer be legal for the Secretary to approve a waiver providing 

health insurance coverage through SCHIP to childless adults. 

REASON FOR CHANGE

The use of funds dedicated by Congress to low-income uninsured 

children or childless adults is an inappropriate implementation of 

the SCHIP statute. 

TITLE VII—EFFECTIVE DATE 

COMMITTEE BILL

Provisions take effect on the date of enactment. However, if the 

Secretary determines that state legislation is required for a State 

TANF or Child Support plan to conform with the Act, the effective 

date is delayed to three months after the first day of the first calendar quarter beginning after the close of the first regular session 

of the legislature that begins after enactment of this Act If the 

state has a 2-year legislative session, each year is to be considered 

a separate regular session. 

III. VOTE OF THE COMMITTEE 

A substitute to H.R. 4, entitled, Personal Responsibility and Individual Development for Everyone (PRIDE) Act. 

Bingaman No. 1, Amendment No. 48. Defeated by rollcall vote, 

9 ayes, 11 nays. 

Ayes: Baucus, Rockefeller (proxy), Breaux (proxy), Graham 

(proxy), Jeffords (proxy), Bingaman, Kerry (proxy), Lincoln. 

Nays: Grassley, Hatch (proxy), Nickles, Lott, Snowe, Kyl 

(proxy), Thomas, Santorum, Frist (proxy), Bunning, Conrad. 

Bingaman No. 10, Amendment No. 57. Defeated by voice vote. 

Lincoln No. 1, Amendment No. 62. Defeated by voice vote. 

Snowe No. 1, Amendment No. 5. Accepted by voice vote. 

Lincoln No. 3, Amendment No. 64. Defeated by voice vote. 

Jeffords No. 2, Amendment No. 43. Amendment accepted. 

Breaux No. 1, Amendment No. 35. Amendment accepted. 

Baucus No. 3, Amendment No. 13. Defeated by voice vote. 

Baucus No. 1, Amendment No. 11. Defeated by rollcall vote, 10 

ayes, 10 nays. 

Ayes: Baucus, Rockefeller (proxy), Daschle (proxy), Breaux 

(proxy), Conrad (proxy), Graham (proxy), Jeffords (proxy), 

Bingaman, Lincoln (proxy). 

Nays: Grassley, Hatch, Nickles (proxy), Lott (proxy), Snowe, 

Kyl (proxy), Thomas (proxy), Santorum, Frist (proxy), Bunning 

(proxy). 

H.R. 4, final passage, approved by recorded vote of Members 

present: 9 ayes, 8 nays. Including proxies: 10 ayes, 10 nays. 

Ayes: Grassley, Hatch, Nickles, Lott, Snowe, Kyl, Thomas 

(proxy), Santorum, Frist, Bunning. 

57

Nays: Baucus, Rockefeller, Daschle, Breaux, Conrad, 

Graham (proxy), Jeffords, Bingaman, Kerry (proxy), Lincoln.

IV. REGULATORY IMPACT STATEMENT AND RELATED 

MATTERS 

A. REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following statement 

concerning the regulatory impact of the Personal Responsibility 

and Individual Development for Everyone Act (PRIDE). 

IMPACT ON INDIVIDUALS AND BUSINESSES

In general, the bill provides grants to States and certain other 

entities to assist low-income families with children in moving toward self-sufficiency. Regulations are needed to implement these 

grants in specified areas but do not affect individuals or businesses, 

unless they choose to apply for such grants. 

IMPACT ON PERSONAL PRIVACY AND PAPERWORK

The bill provides grants to States and certain other entities to assist low-income families with children in moving toward self-sufficiency. In the context of seeking assistance, families may be asked 

about personal circumstances and to provide applications, including 

paperwork associated with their financial situation. The bill should 

not increase the amount of personal information and paperwork required. 

B. UNFUNDED MANDATES STATEMENT

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

The act would extend funding for a number of state programs, 

most notably TANF, and it also would establish new grants that 

target a variety of worker and family programs. The act also would 

place new requirements and limitations on state programs as conditions for receiving federal assistance. Preemptions and some 

other requirements in the act would be intergovernmental mandates as defined in UMRA, and the limit on amounts that states 

could retain for state child support enforcement programs also 

could be an intergovernmental mandate because of the narrow 

focus of and limited flexibility in that program. 

Mandates 

Generally, conditions of federal assistance are not considered 

intergovernmental mandates as defined in UMRA. However, 

UMRA makes special provisions for identifying intergovernmental 

mandates in large entitlement grant programs (those that provide 

more than $500 million annually to state, local, or tribal governments), including TANF, Medicaid, and child support enforcement. 

Specifically, if a legislative proposal would increase the stringency 

of conditions of assistance, or cap or decrease the amount of federal 

funding for the program, such a change would be considered an 

intergovernmental mandate only if the state, local, or tribal government lacks authority to amend its financial or programmatic reVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00057 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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sponsibilities to continue providing required services. The TANF 

and Medicaid programs allow states significant flexibility to alter 

their programs and accommodate new requirements. However, the 

child support enforcement program is narrower in scope, and its 

primary goal is to collect and redistribute child support payments. 

This narrower focus does not afford states as much flexibility as 

other large entitlement programs, so reductions in funding for the 

child support program could be intergovernmental mandates as defined in UMRA. CBO estimates, however, that the cost of the intergovernmental mandates would not exceed the threshold established 

in UMRA ($66 million in 2008, adjusted annually for inflation).

Child Support Enforcement. H.R. 4 would reduce the amounts 

that states may retain from child support collections to reimburse 

themselves for public assistance spending, in particular for TANF. 

As a result, states would lose a total of about $56 million in 2008 

and about $370 million over the 2008–2013 period. Retained child 

support collections are intended to reimburse states for their portion of spending for public assistance programs. Some states rely 

on these reimbursements for operating their child support enforcement program, and in those states a reduction in outside sources 

of revenue likely would result in the need for additional state funding. The extent of that need would determine the costs of the mandate, and if states are able to carry out their responsibilities more 

efficiently or to pare back their activities while maintaining a basic 

level of compliance, the aggregate costs of the mandate may be 

lower. States also would be required to conduct mandatory reviews 

of child support cases every three years, but this requirement is expected to result in net savings to states of about $62 million in 

child support program and $57 million in Medicaid over the 2006–

2013 period. 

Preemptions. The act contains three preemptions of state law 

that would be considered intergovernmental mandates as defined 

in UMRA. The act would preempt state laws that could prevent an 

individual from contesting liens or levies on property seized in an 

effort to collect past-due child support. The act also would protect 

insurers from state liability laws in cases where they have shared 

information with the Secretary of HHS for the purpose of identifying individuals that owe past-due child support. Similarly, both 

public and private gambling facilities that share information with 

the Secretary (as required by the act) would be protected from state 

liability laws. None of these preemptions would result in significant 

costs to state, local, or tribal governments. 

TANF and Medicaid. The TANF program affords states broad 

flexibility to determine eligibility for benefits and to structure the 

programs offered as part of the state’s family assistance program. 

Changes to the program as embodied in H.R. 4 could alter the way 

in which states administer the program and provide benefits, and 

such changes could increase costs to states. However, states could 

make other changes of their own, adjusting eligibility criteria or 

the structure of programs to avoid or offset such costs. Because the 

TANF program affords states such broad flexibility, new requirements general are not considered intergovernmental mandates as 

defined by UMRA. Similarly, a large component of the Medicaid 

program includes optional services that states may alter to accomVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00058 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
59

modate new requirements and to offset additional costs in that program.

Other impacts 

Benefits. Many provisions of the act would benefit state assistance programs by increasing funding, broadening flexibility, or providing new grants. 

TANF. The act would reauthorize family assistance grants 

through 2008 and continue supplemental grants for states that historically have had rising populations or that provided relatively low 

levels of benefits. It also would alter the Contingency Fund program and increase the likelihood that states would qualify for funding. In addition to $16.6 billion for family assistance that states 

will receive under current baseline assumptions, CBO estimates 

that states would receive $1.1 billion for supplemental grants and 

$285 million from the Contingency Fund over the 2004–2013 period. 

Increased Flexibility. The act would allow states to use unspent 

funds from prior years to pay for services in addition to benefits, 

and it would allow them to continue to use up to 10 percent of their 

TANF funds for SSBG purposes. States also could use a portion of 

TANF funds for projects that foster access to jobs or reverse commuting. 

Child Care. The act would extend child care grants through 2008 and increase funding for those grants by $200 million annually 

over the 2004–2013 period. 

Healthy Marriage Promotion. The act would repeal bonus grants 

for the reduction of illegitimacy, which were available to up to five 

states through 2003, and replace them with grants for developing 

and implementing innovative programs to promote and support 

healthy, two-parent married families. Grants could be used for a 

variety of education and media activities associated with the core 

goals, but they also must incorporate issues of domestic violence 

and ensure that participation in any related programs is voluntary. 

Grants of $100 million annually would be available from 2004 

through 2008. State spending on related programs for otherwise 

non-eligible families could be counted toward a state’s maintenance-of-effort requirements in TANF. 

Fatherhood Grants. The act would authorize the appropriation of 

$75 million annually over the 2004–2008 period for a variety of 

grant programs to promote fatherhood, responsible parenting, and 

marriage—either directly or through educational and media campaigns. 

Abstinence Education. The act would extend abstinence education 

grants and provide $50 million annually over the 2004–2008 period. Any unspent funds allocated to individual states would be periodically reallocated by the Secretary.

Tribal Family Assistance. The act would reauthorize direct funding for the tribal TANF programs through 2008. It also would authorize the appropriation of $100 million annually for a fund to 

support technical assistance, economic development activities, and 

research associated with family assistance programs administered 

by tribal organizations. 

Access and Visitation. The act would allow tribes to receive 

grants for access and visitation programs, and the act would inVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00059 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
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crease grants to state and tribes for such programs by $82 million 

over the 2004–2013 period. The act also would increase the min- imum state allotment, increasing from $120,000 in 2004 (up from 

$100,000 in current law) to $180,000 in 2007 and thereafter. 

Grants to Support Work Activities. The act would authorize and 

appropriate $40 million annually over the 2004–2008 period for 

grants to capitalize and develop sustainable social services that 

help move recipients of assistance into work activities. The act also 

would authorize $25 million annually over the same period for 

grants to state, local, tribal, and non-profit entities for programs 

that help low-income families with children acquire and maintain 

dependable cars and insurance. 

Other Costs and Additional Requirements. Some provisions of 

the act, while not intergovernmental mandates as defined in 

UMRA, would place additional conditions on state, local, and tribal 

governments or would result in additional spending as a result of 

meeting federal matching requirements. 

Medicaid. The act would require states to continue providing 

transitional medical assistance through fiscal year 2008. TMA provides benefits to certain individuals and their dependents who otherwise would lose coverage because of increased earnings. The act 

also would allow states to implement simplifications of the TMA 

system, enabling them to provide TMA for an additional year in 

some cases and easing the qualification requirements. Finally, the 

act would prohibit SCHIP coverage for childless adults. CBO estimates that the total net effect of these provisions would be additional state spending of $1.9 billion in Medicaid and savings of 

about $200 million in SCHIP over the 2004–2013 period. 

Bonus Grants Change to Employment Basis. Under current law, 

states are eligible to receive bonus grants totaling up to 5 percent 

of their family assistance grant if they are identified by the Secretary as a high performing state in terms of meeting the goals of 

the TANF program. The act would reduce those grants by half, 

from averages of $200 million to $100 million annually, and would 

change the basis of the grant from general performance to a focus 

on employment entry, retention, and increased earnings for beneficiaries. Grants also would be available to tribal organizations.

Work Participation Requirements. The act would increase workparticipation requirements in the TANF program, but CBO estimates that states would move nonworking families into separate 

state programs to effectively reduce the new requirements. The act 

would require states to have an increasing percentage of TANF recipients participate in work activities while receiving cash assistance. It would maintain current penalties for the failure to meet 

those requirements. Those penalties can total up to 5 percent of the 

TANF block grant amount for the first failure to meet work requirements and increase with each subsequent failure. CBO expects no state would be subject to financial penalty for failing to 

meet the new requirements. 

The bill would increase the minimum work participation rate 

from 50 percent to 70 percent over a five-year period. To meet 

those requirements, 70 percent of families would have to be engaged in work activities by 2008. The act would eliminate a separate requirement in current law that sets even higher participation 

rates for two-parent families. In addition to overall participation 

61

rates, the act would increase the minimum number of hours a family would need to participate to fully count toward the standard 

from 30 to 34 hours a week. However, it would allow partial credit 

for recipients who participate for between 20 and 33 hours. Twoparent families would be required to work more hours, but parents 

with children under the age of six would only have to work 24 

hours in order to meet the requirements. The increase in the number of hours of work per week could result in a modest spending 

increase by states and tribes for administration, worker support activities, and child care. As the overall participation rates increase, 

states and tribes would have to direct more resources toward programs such as administrative support, child care, and worker supervision to comply with the 70 percent requirement. 

The act would expand the types of activities that would count toward meeting the work participation requirements and the allowed 

exclusions from the calculation of the work participation rate. 

To the extent that states find the new work requirements difficult to meet, CBO expects states would employ strategies such as 

moving nonworking families into separate state programs 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 MOE requirement in TANF, but families served under those programs do not 

count in the work participation rate. 

Replacement of Caseload Reduction Credit. Under current law, a 

state’s minimum work participation rate may be reduced by the 

amount that the average number of families receiving assistance 

declines, assuming the reduction is not the result of changes in eligibility requirements. The act would replace the caseload reduction 

credit with an employment credit that would be based on the percentage of individuals who no longer receive assistance and who 

are actively working. Former recipients who are earning at comparably higher salaries would be weighted heavier in calculating 

the state’s employment credit. In total, however, the size of any 

credit would be limited to 40 percentage points in 2004, decreasing 

to 20 percentage points by 2008. States could opt to have the shift 

in the basis for the credit delayed until October 1, 2006. 

Individual Responsibility v. Family Self-Sufficiency. The act 

would change the requirement that states develop individual responsibility plans for beneficiaries to a requirement for family selfsufficiency plans. States that fail to implement family self-sufficiency plans would be subject to the same penalties as failing to 

meet work participation requirements. 

New Requirements. States would have to implement new performance measurement standards and comply with a standardized 

format for submitting amendments to their state plans for TANF 

programs. The act also would require states to collect and report 

additional data on families enrolled in TANF programs and on 

those who leave the rolls because of ineligibility. The act would require monthly reports on caseload levels and it would require an 

annual report on how states are achieving their performance goals. 

62

ESTIMATED IMPACT ON THE PRIVATE SECTOR

Section 318 would impose a mandate on gambling establishments 

by requiring them to withhold certain gambling winnings from individuals who owe past-due child support, to furnish written notice 

to those individuals, and to transfer the amount withheld to a federal agency. The gambling establishments may retain 2 percent of 

the amount withheld as a processing fee. CBO expects that the net 

direct cost of the mandate would fall well below the annual threshold established by UMRA ($117 million in 2003, adjusted annually 

for inflation). 

V. BUDGET EFFECTS 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, October 3, 2003.

Hon. CHARLES E. GRASSLEY, 

Chairman, Committee on Finance, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4, the Personal Responsibility and Individual Development for Everyone Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Sheila Dacey (for federal costs), Leo Lex (for the state and local impact), and Ralph 

Smith (for the private-sector impact). 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director.

Enclosure.

H.R. 4—Personal Responsibility and Individual Development for 

Everyone Act 

Summary: H.R. 4 would: 

• Reauthorize the Temporary Assistance for Needy Families 

(TANF) program at current funding levels (it would increase 

funding for some grants and establish several new grants, but 

also would eliminate funding for other related grants); 

• Continue funding abstinence education programs at $50 

million annually, and increase funding for child care programs 

by $200 million annually; 

• Make several changes to the child support enforcement 

program, including allowing the distribution to families of 

more collections from child support payments; 

• Require the Social Security Administration (SSA) to 

change its system of reviewing awards to certain disabled 

adults in the Supplemental Security Income (SSI) program; 

• Extend by five years the requirement that state Medicaid 

programs provide transitional medical assistance (TMA) to certain Medicaid beneficiaries; and 

• Allow states to simplify aspects of TMA administration 

and prohibit states from using State Children’s Health Insurance Program (SCHIP) funds to provide health coverage to 

childless adults. 

63

CBO estimates that enacting H.R. 4 as approved by the Senate 

Finance Committee would increase direct spending by $348 million 

in 2004, by $4.7 billion over the 2004–2008 period, and by $6.4 billion over the 2004–2013 period. It also would reduce revenues by 

$22 million over the 2004–2008 period, and by $128 million over 

the 2004–2013 period.

The act would authorize the appropriation of $200 million annually for new grant programs to promote fatherhood, improve tribal 

services, and encourage car ownership for families with low incomes. CBO estimates that appropriation of the authorized levels 

would result in $14 million in outlays in 2004, $715 million over 

the 2004–2008 period, and $1 billion over the 2004–2013 period. 

H.R. 4 would impose intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) by preempting state 

law, and would reduce the amount of child support collections that 

states could retain. The preemptions would impose no significant 

costs on state governments. However, the reduction in the amount 

of child support collections that states retain could impose significant costs. Those costs would depend on the degree to which states 

would be able to alter their responsibilities within their own child 

support enforcement programs to compensate for the loss of receipts. In total, states would face losses ranging from $56 million 

in 2008 growing to $67 million in 2013. These losses would not exceed the threshold established in UMRA ($66 million in 2008, adjusted annually for inflation). 

Other provisions of the act would significantly affect the way 

states administer their TANF and Medicaid programs, but because 

of the flexibility in those programs, the new requirements would 

not be intergovernmental mandates as defined in UMRA. In general, state, local, and tribal governments would benefit from the 

continuation of existing grants in TANF, the creation of new grant 

programs, and broader flexibility and options in some areas. 

The legislation would impose a private-sector mandate, as defined in UMRA, on gambling establishments by requiring them to 

withhold certain gambling winnings from individuals who owe 

past-due child support, to furnish written notice to those individuals, and to transfer the amount withheld to a federal agency. CBO 

estimates that the net direct cost of the mandate would fall well 

below the annual threshold established in UMRA ($117 million in 

2003, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 4 is shown in Table 1. For this estimate, CBO 

assumes that H.R. 4 will be enacted early in fiscal year 2004. The 

costs of this legislation fall within budget functions 500 (education, 

training, employment, and social services), 550 (health), and 600 

(income security).

64

TABLE 1.—ESTIMATED COSTS OF H.R. 4, THE PERSONAL RESPONSIBILITY AND INDIVIDUAL 

DEVELOPMENT FOR EVERYONE ACT, BY TITLE 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–

2008

2004–

2013

CHANGES IN DIRECT SPENDING

Title I: TANF: 

Estimated Budget Authority .................................. 913 496 500 502 186 185 285 284 283 281 2,597 3,915 

Estimated Outlays ............. 267 536 337 643 434 349 317 286 283 281 2,217 3,733 

Title II: Abstinence Education: 

Estimated Budget Authority .................................. 25 50 50 50 50 0 0 0 0 0 225 225 

Estimated Outlays ............. 7 25 38 44 49 37 16 10 5 0 162 228 

Title III: Child Support: 

Estimated Budget Authority .................................. 84 70 89 102 172 208 220 232 240 250 517 1,667 

Estimated Outlays ............. 64 65 94 115 184 204 218 233 240 250 522 1,667 

Title IV: Child Welfare: 

Estimated Budget Authority .................................. 0 6 6 6 6 20 21 21 22 22 25 131 

Estimated Outlays ............. 0 6 6 6 6 16 17 17 18 19 25 112 

Title V: Supplemental Security 

Income: 

Estimated Budget Authority .................................. ¥6 ¥24 ¥51 ¥81 ¥116 ¥152 ¥188 ¥229 ¥259 ¥307 ¥278 ¥1,413 

Estimated Outlays ............. ¥6 ¥24 ¥51 ¥81 ¥116 ¥152 ¥188 ¥229 ¥259 ¥307 ¥278 ¥1,413 

Title VI: Transitional Medical Assistance: 

Estimated Budget Authority .................................. 17 400 564 630 664 455 34 ¥36 ¥69 ¥92 2,275 2,567 

Estimated Outlays ............. 17 386 526 583 586 367 ¥43 ¥105 ¥114 ¥110 2,098 2,093 

Total Direct Spending: 

Estimated Budget 

Authority ............... 1,033 998 1,158 1,209 962 716 372 272 217 154 5,361 7,092 

Estimated Outlays .... 348 994 950 1,309 1,143 821 337 212 172 133 4,746 6,420 

CHANGES IN REVENUES

Title III: Child Support: 

Estimated Revenues .......... 0 0 ¥2 ¥7 ¥13 ¥17 ¥20 ¥22 ¥23 ¥24 ¥22 ¥128 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Title I: TANF: 

Authorized Level ................ 200 200 200 200 200 0 0 0 0 0 1,000 1,000 

Estimated Outlays ............. 14 95 191 218 197 186 90 9 0 0 715 1,000 

Notes.—Components may not sum to totals because of rounding. TANF = Temporary Assistance for Needy Families. 

Basis of estimate: Most of H.R. 4’s budgetary effects would stem 

from new direct spending. A portion of the new spending would be 

offset by some savings, resulting in a net increase in direct spending of about $6.4 billion over the next 10 years. The act also would 

reduce federal revenues by an estimated $128 million over the 10-

year period and increase discretionary spending by $1 billion over 

that period. 

Direct spending and revenues 

H.R. 4 would increase direct spending primarily for TANF, Child 

Care, and Medicaid TMA, but also for abstinence education and 

child welfare. Those increases would total nearly $9 billion over the 

2004–2013 period, but would be partially offset by $4.4 billion in 

savings from changes to the TANF, Medicaid, SSI, and other programs. In addition, H.R. 4 would make changes to the child support program that would result in a loss of federal collections of 

$1.9 billion over the 10-year period. Finally, a provision in title III 

would lead to a reduction in federal revenues of $128 million by allowing states to use a national directory of new hires to help detect 

fraud in the unemployment compensation system. (That provision 

65

would reduce spending for unemployment compensation, and as a 

result, lead to some reduced taxation for funding such compensation.) 

Title I: TANF. H.R. 4 would reauthorize basic TANF grants 

through 2008 at the current level of funding of $16.6 billion. That 

amount is assumed to continue in the current budget resolution 

baseline; thus, enacting H.R. 4 would not change basic TANF 

grants relative to that baseline. TANF and related grants were 

originally authorized through fiscal year 2002. They have been extended several times in subsequent legislation, most recently 

through March 31, 2004, by Public Law 108–89, which was enacted 

on October 1, 2003. 

The act would not alter current requirements on states to spend 

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. However, it would alter the funding of some grants related to TANF 

and make several other changes to program rules and reporting requirements. CBO estimates that enacting title I would increase direct spending by $267 million in 2004 and $3.7 billion over the 

2004–2013 period (see Table 2).

TABLE 2.—DIRECT SPENDING EFFECTS OF TITLE I: TANF 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004– 2008

2004– 2013

Eliminate Out-of-Wedlock 

Bonus: 

TANF: 

Estimated 

Budget Authority ........... ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥500 ¥1,000

Estimated Outlays .............. 0 ¥35 ¥79 ¥96 ¥163 ¥122 ¥100 ¥100 ¥100 ¥100 ¥373 ¥895

Food Stamps: 

Estimated 

Budget Authority ........... 0 0 1 1 211111 4 9

Estimated Outlays .............. 0 0 1 1 211111 4 9

Subtotal: 

Estimated 

Budget Authority ........... ¥100 ¥100 ¥99 ¥99 ¥98 ¥99 ¥99 ¥99 ¥99 ¥99 ¥496 ¥991

Estimated Outlays .............. 0 ¥35 ¥78 ¥95 ¥161 ¥121 ¥99 ¥99 ¥99 ¥99 ¥369 ¥886

Establish Healthy Marriage 

Promotion Grant: 

Budget Authority ....... 100 100 100 100 100 100 100 100 100 100 500 1,000

Estimated Outlays ..... 1 28 74 124 122 111 100 100 100 100 349 860

Continue Supplemental 

Grant at $319 Million 

Through 2007: 

TANF: 

Budget Authority 128 319 319 319 0 0 0000 1,085 1,085

Estimated Outlays .............. 64 217 284 340 109 48 24 0 0 0 1,013 1,085

Food Stamps: 

Estimated 

Budget Authority ........... ¥2 ¥3 ¥4 ¥4 ¥2 ¥10000 ¥15 ¥16

Estimated Outlays .............. ¥2 ¥3 ¥4 ¥4 ¥2 ¥10000 ¥15 ¥16

66

TABLE 2.—DIRECT SPENDING EFFECTS OF TITLE I: TANF—Continued

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–

2008

2004–

2013

Subtotal: 

Estimated 

Budget 

Authority ........ 126 316 315 315 ¥2 ¥1 0 0 0 0 1,070 1,069

Estimated 

Outlays 62 214 280 336 107 47 24 0 0 0 998 1,069

Reduce High-Performance 

Bonus: 

TANF: 

Budget Authority 400 ¥200 ¥200 ¥200 ¥200 ¥200 ¥100 ¥100 ¥100 ¥100 ¥400 1,000

Estimated Outlays .............. 0 ¥35 ¥79 ¥96 ¥163 ¥122 ¥100 ¥100 ¥100 ¥100 ¥373 ¥895

Food Stamps: 

Estimated 

Budget Authority ........... 0 0 1 1 211111 4 9

Estimated Outlays .............. 0 0 1 1 211111 4 9

Subtotal: 

Estimated 

Budget 

Authority ........ 400 ¥200 ¥199 ¥199 ¥198 ¥199 ¥99 ¥99 ¥99 ¥99 ¥396 ¥991

Estimated 

Outlays 0 ¥35 ¥78 ¥95 ¥161 ¥121 ¥99 ¥99 ¥99 ¥99 ¥369 ¥886

Modify Contingency Fund: 

TANF: 

Estimated 

Budget Authority ........... 40 25 28 30 29 29 28 27 26 24 152 286

Estimated Outlays .............. 28 25 32 32 33 30 28 27 26 24 150 285

Increase Transfer Authority 

to SSBG: 

TANF: 

Budget Authority 0 0 0 0 000000 0 0

Estimated Outlays .............. 37 98 ¥54 ¥34 ¥35 ¥12 0 0 0 0 12 0

Establish Secretary’s Fund 

for Research, Demonstration, and National 

Studies: 

Budget Authority ....... 100 100 100 100 100 100 100 100 100 100 500 1,000

Estimated Outlays ..... 10 60 108 115 109 101 100 100 100 100 402 903

Extend Funding of Studies 

and Demonstrations: 

Budget Authority ....... 7 15 15 15 15 15 15 15 15 15 67 142

Estimated Outlays ..... * 4 11 15 15 15 15 15 15 15 45 120

Increase Funding for Child 

Care: 

Child Care: 

Budget Authority 200 200 200 200 200 200 200 200 200 200 1,000 2,000

Estimated Outlays .............. 150 182 194 198 200 200 200 200 200 200 924 1,924

TANF: 

Budget Authority 0 05 0 0000000 0 0

Estimated Outlays .............. ¥21 ¥16 ¥7 6 20 8 8 2 0 0 ¥18 0

Subtotal: 

Budget 

Authority ........ 200 200 200 200 200 200 200 200 200 200 1,000 2,000

Estimated 

Outlays 129 166 187 204 220 208 208 202 200 200 906 1,924

Establish Grants to Capitalize and Develop Sustainable Social Services: 

Budget Authority ....... 40 40 40 40 40 40 40 40 40 40 200 400

Estimated Outlays ..... * 11 30 50 49 44 40 40 40 40 400 344

67

TABLE 2.—DIRECT SPENDING EFFECTS OF TITLE I: TANF—Continued

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004– 2008

2004– 2013

Effect of Title I Interactions 

on TANF: 

Budget Authority ....... 0 0 0 0 000000 0 0

Estimated Outlays ..... 0 0 ¥175 ¥9 137 47 0 0 0 0 ¥47 0

Total Changes: Title I: 

Estimated Budget Authority .................... 913 496 500 502 186 185 285 284 283 281 2,597 3,915

Estimated Outlays ..... 267 536 337 643 434 349 317 286 283 281 2,217 3,733

Notes.—Components may not sum to total because of rounding. TANF=Temporary Assistance for Needy Families. SSBG=Social Services Block Grant. *=Less than $500,000. 

State Family Assistance Grant. Section 102 would extend the 

state family assistance grant through 2008 at the current level of 

$16.6 billion. As noted above, CBO already assumes funding at 

that level in its baseline in accordance with rules for constructing 

baseline projections, as set forth in section 257 of the Balanced 

Budget and Emergency Deficit Control Act of 1985 (Deficit Control 

Act). Therefore, CBO estimates the provision would have no effect 

on direct spending over the 2004–2013 period, relative to the baseline. 

Healthy Marriage Promotion Grants. Section 103 would eliminate 

an out-or-wedlock birth grant program, but would create a new 

grant program to promote healthy marriages. CBO projects funding 

for out-of-wedlock birth grants at $100 million annually in accordance with the Deficit Control Act. We estimate that eliminating 

this program would reduce outlays by $895 million over the 2005–

2013 period. The impact of the reduction in funding on outlays is 

delayed (no effect in 2004) because the grants are awarded in the 

last days of a fiscal year. CBO expects the reduced funding would 

cause states to decrease benefits to families that also receive food 

stamps. The reduced TANF income would increase Food Stamp 

benefits, increasing spending in the Food Stamp program by $9 

million over the 2006–2013 period. 

Section 103 would establish a new competitive grant to states, 

territories, and Indian tribes for developing and implementing programs to promote and support marriage. The act would appropriate 

$100 million annually for grants that could be used for a variety 

of activities including public advertising campaigns, education and 

training programs on topics related to marriage, marriage mentoring programs, and programs to reduce disincentives to marriage 

in means-tested programs. The grants could be used to cover up to 

50 percent of the cost of the new programs. CBO expects grants 

would be spent slowly in the first few years because the Department of Health and Human Services (HHS) would need to set up 

a system for awarding grants, and states would need to set up programs to use the funds. CBO projects that the grants would continue as a provision of TANF in the baseline after 2008, in accordance with the Deficit Control Act. Estimated spending of these 

grants would total $1 million in 2004 and $860 million over the 

2004–2013 period. 

Supplemental Grants. Section 104 would extend the supplemental grants for population increases through 2007 at the 2003 

funding level of $319 million. Supplemental grants are currently 

68

funded for the first two quarters of fiscal year 2004 at $191 million, 

consistent with an annual level of funding of $319 million. Current 

law specifies that supplemental grants should not be assumed to 

continue in baseline projections after March 31, 2004, 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 rapidly 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 $64 million 

in 2004 and $1.1 billion over the 2004–2010 period. CBO expects 

some of the additional funding provided would be used to increase 

benefits to families that also receive food stamps. Additional TANF 

income would reduce Food Stamp benefits, lowering spending in 

the Food Stamp program by $16 million over the 2004–2009 period. 

Bonuses for High-Performing States. Section 105 would reduce 

funding for a bonus to high-performing states and refocus the 

bonus toward rewarding performance in improving job outcomes. 

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 marriedcouple families. Current law provided $1 billion for bonuses, averaging $200 million annually, over the 1999–2003 period. CBO as- sumes that funding will continue at $200 million annually in accordance with 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. The act would make $600 million available for bonuses 

averaging $100 million annually over the 2004–2009 period. Section 105 would make all the bonus funds immediately available to 

the Secretary of HHS, so CBO allocates the entire $600 million in 

budget authority to 2004 (a $400 million increase over what CBO 

assumes under current law). 

The net effect of section 105 would be a reduction in budget authority of $400 million over the 2004–2008 period and $1 billion 

over the 10-year period. Because the bonuses are usually granted 

in the following fiscal year, TANF spending would fall by only $895 

million over the 2005–2013 period. 

CBO expects the reduced funding would cause states to decrease 

benefits to families that also receive food stamps. The reduced 

TANF income would increase Food Stamp benefits, increasing 

spending in the Food Stamp program by $9 million over the 2006–

2013 period. 

Contingency Fund. Section 106 would significantly alter the Contingency Fund for State Welfare Programs. Under current law, the 

contingency fund provides additional federal funds to states with 

high and increasing unemployment rates or significant growth in 

Food Stamp participation. To be eligible, states are required to 

maintain state spending at 100 percent of their 1994 levels and to 

match federal payments. CBO estimates that states will draw federal funds totaling between $1 million and $4 million annually 

under current law. A major factor restraining spending in the current program is the requirement to maintain the 1994 level of state 

69

spending, because most states currently spend well below that 

level.

Section 106 would change the eligibility conditions, grant determination, and state spending requirements of the contingency fund. 

It would establish new thresholds of growth in the unemployment 

rate and Food Stamp participation for states to qualify for funds. 

The amount of funding a state would receive would be derived by 

multiplying the state’s caseload increase over the level in the two 

years prior to its qualification, its TANF benefit level for a family 

of three, and its Medicaid matching rate. A state with high unspent 

TANF balances from prior years would not be eligible for payments 

from the contingency fund. Unlike the current contingency fund, a 

state would not need to maintain a high level of historic spending 

or put up any matching funds in order to receive a contingency 

fund grant. 

Based on CBO’s projections of unemployment rates, Food Stamp 

participation, TANF caseloads and state TANF spending, CBO estimates that states would qualify for an additional $20 million to $40 

million annually from the fund. The revised program would increase outlays by $28 million in 2004 and $285 million over the 

2004–2013 period. 

Social Services Block Grant. Section 107 would allow states to 

maintain the authority to transfer up to 10 percent of TANF funds 

to SSBG. The 1996 welfare law that established the TANF program set the level of the transfer authority at 10 percent. Subsequent legislation permanently lowered the authority to 4.25 percent. However, the Congress has restored the authority to 10 percent every year since, most recently through March 31, 2004. In 

the absence of further legislation, the authority will fall to 4.25 percent after that date. 

In recent years, state shave 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 

tend to accelerate spending relative to current law. Based on recent 

state transfers, CBO expects that states would transfer an additional $130 million in the second half of 2004 ($400 million in later 

years) under the provision, but because some of this money would 

have been spent within the TANF program anyway, only $37 million of additional spending would occur in 2004. The provision also 

would increase net TANF spending by $98 million in 2005. Because 

states would have found alternate ways to spend the funds in later 

years, the increase in spending in 2004 and 2005 would be offset 

by decreased spending in subsequent years. Thus, there would be 

no net impact on TANF spending over the 2004–2013 period as a 

whole. 

Work Participation Requirements. Section 109 would require 

states to have an increasing percentage of TANF recipients participate in work activities while receiving cash assistance. It would 

maintain current penalties for the failure to meet those requirements. Those penalties can total up to 5 percent of the TANF block 

grant amount for the first failure to meet work requirements and 

increase with each subsequent failure. CBO assumes no state 

would be subject to financial penalty for failing to meet the new requirements.

70

Section 109 would require states to engage an increasing share 

of families receiving TANF in work activities. The required participation rate would rise by 5 percentage points a year from 50 percent in 2004 to 70 percent in 2008. The act would eliminate a separate requirement in current law that sets even higher participation 

rates for two-parent families. In addition, it would expand the 

types of activities that would count toward meeting the work participation requirements and the allowed exclusions from the calculation of the work participation rate. 

The act also would increase the minimum number of hours a 

family would need to participate to fully count toward the standard 

from 30 to 34 hours a week. However, it would allow partial credit 

for recipients who participate for between 20 and 33 hours and 

extra credit for recipients who participate more than 34 hours. 

Two-parent families would be required to work more hours and 

parents with children under the age of six could be fully counted 

at 24 hours. 

Finally, section 109 would reduce the required participation rate 

of a state based on the number of families in the state who leave 

assistance for work. That replaces a provision in current law that 

bases such reductions on TANF caseload declines since 1995. The 

credits are calculated as a percent of caseload. The caseload reduction credit has significantly lowered the required participation rate 

in all states and reduced it to zero in more than half the states. 

The new employment credit also would result in significant reductions in the required participation rates for some states. However, 

the act would limit the size of any credit to 40 percentage points 

in 2004, shrinking to 20 percentage points by 2008. So, in 2008, a 

state that earned a maximum credit would face a required participation rate of 50 percent (70 percent minus 20 percent). 

To the extent that states find the new work requirements difficult to meet, CBO expects states would employ strategies such as 

moving nonworking families into separate state programs to reduce 

the number of families subject to the requirements and increase 

the percentage of families remaining in the program that meet the 

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 (MOE) requirement in TANF, but families served under those programs do not 

count in the work participation rate. 

Research, Demonstrations, and Technical Assistance. Section 114 

would make funds available to the Secretary of Health and Human 

Services to conduct and support research and demonstration 

projects and provide technical assistance, primarily on the promotion of marriage. The program would be funded at $100 million 

annually over the 2004–2008 period. Based on rates of spending in 

other social service research and grant programs, CBO estimates 

that spending would increase by $10 million in 2004 and $903 million over the 2004–2013 period. 

Section 114 also would make annual grants of $15 million for research. Specifically, it would fund research on the effects, costs, 

and benefits of state TANF programs and innovative approaches 

for reducing welfare dependency and increasing the well-being of 

71

children. It also could fund evaluations of TANF programs initiated 

by the states and on-going demonstration projects approved before 

1996. (The 1996 welfare law provided funding for those purposes 

and at the same $15 million annual level, but each year in appropriation acts the Congress rescinded the funds and instead made 

appropriations for research under another authority.) Public Law 

108–89 (recently enacted) provided $8 million in funding for the first half of 2004. Section 114 would raise that to $15 million for 

the year. Based on recent spending patterns, CBO estimates that 

this provision would increase outlays by an insignificant amount in 

2004 and by $120 billion over the 2004–2013 period. 

Child Care. The child care entitlement to states program provides funding to states for child care subsidies to low-income families and for other activities. Section 116 would raise the annual 

funding level by $200 million to $2.917 billion over the 2004–2008 

period. CBO assumes funding would continue at the 2008 level in 

its baseline in accordance with the rules set forth in the Deficit 

Control Act. Based on recent spending patterns, CBO estimates 

that outlays would increase by $150 million in 2004 and by $1.9 

billion over the 10-year period. 

CBO expects the additional child care funding would induce some 

states to reduce the amount of TANF spending on child care (either 

directly or through transfers to the Child Care and Development 

Fund) and result in a temporary slowing of TANF spending. CBO 

estimates TANF spending would slow by $21 million in 2004 and 

a total of $44 million over the 2004–2006 period, but since states 

would fund alternative ways to spend any funds no longer transferred, spending would increase in later years. There would be no 

net impact on TANF spending over the 2004–2013 period. 

Grants to Capitalize and Develop Sustainable Social Services. Section 119 would appropriate $40 million each year over the 

2004–2008 period to make grants for the purpose of capitalizing 

and developing sustainable social services. CBO treats the grants 

as a provision of the TANF program and assumes they would continue in baseline after 2008 in accordance with the Deficit Control 

Act. Grantees would develop programs that would generate their 

own sources of revenue while assisting TANF recipients. CBO estimates that the grants would increase outlays by an insignificant 

amount in 2004, $11 million in 2005, and by $344 million over the 

2005–2013 period. 

Interactions. CBO estimates that several provisions on title I 

would accelerate the rate of spending of prior-year balances in the 

TANF program. Provisions that would increase the transfer authority to SSBG, eliminate the out-of-wedlock grant, and eliminate the 

high-performance bonus would induce states to spend uncommitted 

TANF funds from prior years sooner than under current law. However, those combined effects would exceed the amount of uncommitted TANF funds. Consequently, the budgetary effect of all the provisions enacted together would be smaller than the sum of the estimated effects for the individual provisions. CBO estimates that 

those interactions would lower TANF spending over the 2006–2007 

period by $184 million below the sum of the provisions estimated 

individually, but raise it by $184 million over the 2008–2009 period. Thus, there would be no net impact on TANF spending over 

the 10-year period as a whole. 

72

Title II: Abstinence Education. Public Law 108–89 authorized 

$25 million for the Abstinence Education program in 2004. H.R. 4 

would provide an additional $25 million in 2004 and extend the 

program through 2008 at a $50 million annual funding level. In addition, it would allow any unrequested funds under the program to 

be reallocated to states that require additional funds to carry out 

their Abstinence Education programs. Based on the program’s past 

spending patterns, CBO estimates that the act would increase outlays by $7 million in 2004 and by $228 million over the 2004–2013 

period (see Table 1). That increase includes $3 million in spending 

from 2004 funds that would have remained unrequested without 

the reallocation provision. 

Title III: Child Support. H.R. 4 would change many aspects of 

the operation and financing of the child support program. It would 

allow (and in one case, require) states to share more child support 

collections with current and former recipients of TANF, thereby reducing the amount the federal and state governments would recoup 

from previous TANF benefit payments. (The federal government’s 

share of child support collections is 55 percent, on average.) It 

would require states to periodically update child support orders 

and expand the use of certain enforcement tools. It would provide 

increases in funding for HHS and for grants that facilitate noncustodial parent access to their children. Overall, CBO estimates 

that enacting title III would increase direct spending by $64 million in 2004 and $1.7 billion over the 2004–2013 period. We also estimate that this title would reduce revenues by $128 million over 

the 2004–2013 period. We also estimate that this title would reduce revenues by $128 million over the 2004–2013 period (see Table 3). 

Distribute More Support to Current TANF Recipients. When a 

family applies for TANF, it assigns any rights the family has to 

child support collections to the state. While the family receives assistance, the state uses any collections it receives to reimburse 

itself and the federal government for TANF payments. Those reimbursements to the federal government are recorded as offsetting receipts (a credit against direct spending). States may choose to give 

some of the child support collected to families, but states must finance those payments out of their share of collections.

TABLE 3.—DIRECT SPENDING AND REVENUE EFFECTS OF TITLE III: CHILD SUPPORT 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004– 2008

2004– 2013

CHANGES IN DIRECT SPENDING

Distribute More Support to Current TANF 

Families: 

Child Support Collections: 

Estimated Budget Authority ... 52 57 66 75 85 96 99 103 106 110 335 848

Estimated Outlays .................. 52 57 66 75 85 96 99 103 106 110 335 848

Food Stamps: 

Estimated Budget Authority ... ¥1 ¥3 ¥6 ¥9 ¥13 ¥16 ¥17 ¥18 ¥18 ¥19 ¥32 ¥120

Estimated Outlays .................. ¥1 ¥3 ¥6 ¥9 ¥13 ¥16 ¥17 ¥18 ¥18 ¥19 ¥32 ¥120

TANF: 

Budget Authority .................... 0 0 0 0 000000 0 0

Estimated Outlays .................. ¥23 ¥9 ¥1 7 14 6 5 1 0 0 ¥12 0

Subtotal: 

Estimated Budget Authority ........................ 51 54 60 66 72 80 82 85 88 91 303 728

Estimated Outlays ......... 28 45 59 73 86 86 87 86 88 91 291 728

73

TABLE 3.—DIRECT SPENDING AND REVENUE EFFECTS OF TITLE III: CHILD SUPPORT—Continued

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004– 2008

2004– 2013

Distribute More Past-Due Support to 

Current and Former TANF Families: 

Child Support Families: 

Estimated Budget Authority ... 13 27 56 87 168 201 209 218 227 236 351 1,441

Estimated Outlays .................. 13 27 56 87 168 201 209 218 227 236 351 1,441

Food Stamps: 

Estimated Budget Authority ... ¥1 ¥1 ¥2 ¥4 ¥5 ¥6 ¥7 ¥7 ¥7 ¥7 ¥13 ¥47

Estimated Outlays .................. ¥1 ¥1 ¥2 ¥4 ¥5 ¥6 ¥7 ¥7 ¥7 ¥7 ¥13 ¥47

TANF: 

Estimated Budget Authority ... 0 0 0 0000000 0 0

Estimated Outlays .................. 3466 ¥2 ¥10 ¥7 0 0 0 17 0

Student Loans: 

Estimated Budget Authority ... 15 * * * * * * * * * 15 15

Estimated Outlays .................. 15 * * * * * * * * * 15 15

Subtotal: 

Estimated Budget Authority ........................ 27 26 54 84 163 194 202 211 220 229 353 1,409

Estimated Outlays .................. 30 30 60 90 161 184 195 211 220 229 370 1,409

Require Triennial Update of Child Support Orders: 

Administrative Costs: 

Estimated Budget Authority ... 0 0 14 15 12 12 12 13 13 13 41 104

Estimated Outlays .................. 0 0 14 15 12 12 12 13 13 13 41 104

Child Support Collections: 

Estimated Budget Authority ... 0 0 ¥6 ¥14 ¥20 ¥21 ¥20 ¥20 ¥20 ¥20 ¥40 ¥141

Estimated Outlays .................. 0 0 ¥6 ¥14 ¥20 ¥21 ¥20 ¥20 ¥20 ¥20 ¥40 ¥141

Food Stamps: 

Estimated Budget Authority ... 0 0 ¥1 ¥2 ¥3 ¥3 ¥3 ¥3 ¥3 ¥4 ¥6 ¥22

Estimated Outlays .................. 0 0 ¥1 ¥2 ¥3 ¥3 ¥3 ¥3 ¥3 ¥4 ¥6 ¥22

Medicaid: 

Estimated Budget Authority ... 0 0 ¥3 ¥8 ¥13 ¥13 ¥10 ¥8 ¥10 ¥10 ¥24 ¥75

Estimated Outlays .................. 0 0 ¥3 ¥8 ¥13 ¥13 ¥10 ¥8 ¥10 ¥10 ¥24 ¥75

Subtotal: 

Estimated Budget Authority ........................ 0 0 4 ¥9 ¥24 ¥25 ¥21 ¥18 ¥20 ¥21 ¥29 ¥134

Estimated Outlays ......... 0 0 4 ¥9 ¥24 ¥25 ¥21 ¥18 ¥20 ¥21 ¥29 ¥134

Use New Directory for Unemployment 

Compensation Program: 

Estimated Budget Authority ............ 0 ¥14 ¥17 ¥22 ¥22 ¥23 ¥24 ¥25 ¥25 ¥26 ¥75 ¥198

Estimated Outlays ........................... 0 ¥14 ¥17 ¥22 ¥22 ¥23 ¥24 ¥25 ¥25 ¥26 ¥75 ¥198

Reduce Threshold for Passport Denial to 

$2,500: 

Estimated Budget Authority ............ 0 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 ¥9

Estimated Outlays ........................... 0 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥4 ¥9

Withhold Child Support from Social Security Disability Payments: 

Estimated Budget Authority ............ 0 ¥3 ¥4 ¥4 ¥4 ¥5 ¥5 ¥5 ¥6 ¥6 ¥15 ¥42

Estimated Outlays ........................... 0 ¥3 ¥4 ¥4 ¥4 ¥5 ¥5 ¥5 ¥6 ¥6 ¥15 ¥42

Maintain Funding for Technical Assistance and Federal Parent Locator Service: 

Estimated Budget Authority ............ 1 0 0 0000000 1 1

Estimated Outlays ........................... 1000000000 1 1

Allow Federal Seizure of Accounts in 

Multi-State Financial Institutions: 

Administrative Costs: 

Estimated Budget Authority ... 1 2 * ******* 3 3

Estimated Outlays .................. 12******** 3 3

Child Support Collections: 

Estimated Budget Authority ... 0 ¥2 ¥6 ¥9 ¥9 ¥9 ¥9 ¥9 ¥10 ¥10 ¥26 ¥73

Estimated Outlays .................. 0 ¥2 ¥6 ¥9 ¥9 ¥9 ¥9 ¥9 ¥10 ¥10 ¥26 ¥73

Subtotal: 

Estimated Budget Authority ........................ 1 0 ¥6 ¥9 ¥9 ¥9 ¥9 ¥9 ¥10 ¥10 ¥23 ¥70

Estimated Outlays ......... 1 0 ¥6 ¥9 ¥9 ¥9 ¥9 ¥9 ¥10 ¥10 ¥23 ¥70

Match Databases of Insurance Claims: 

Administrative Costs: 

Estimated Budget Authority ... 1 2 * ******* 3 3

Estimated Outlays .................. 12******** 3 3

Child Support Collections: 

Estimated Budget Authority ... 0 0 ¥2 ¥4 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥9 ¥24

Estimated Outlays .................. 0 0 ¥2 ¥4 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥9 ¥24

74

TABLE 3.—DIRECT SPENDING AND REVENUE EFFECTS OF TITLE III: CHILD SUPPORT—Continued

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004– 2008

2004– 2013

Subtotal: 

Estimated Budget Authority ........................ 1 2 ¥2 ¥4 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥6 ¥21

Estimated Outlays ......... 1 2 ¥2 ¥4 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥6 ¥21

Intercept Gambling Proceeds: 

Administrative Costs: 

Estimated Budget Authority ... 1 2 * ******* 3 3

Estimated Outlays .................. 12******** 3 3

Child Support Collections: 

Estimated Budget Authority ... 0 0 ¥4 ¥9 ¥10 ¥10 ¥11 ¥12 ¥13 ¥13 ¥23 ¥82

Estimated Outlays .................. 0 0 ¥4 ¥9 ¥10 ¥10 ¥11 ¥12 ¥13 ¥13 ¥23 ¥82

Subtotal: 

Estimated Budget Authority ........................ 1 2 ¥4 ¥9 ¥10 ¥10 ¥11 ¥12 ¥13 ¥13 ¥20 ¥79

Estimated Outlays ......... 1 2 ¥4 ¥9 ¥10 ¥10 ¥11 ¥12 ¥13 ¥13 ¥20 ¥79

Increase Grants to States for Access and 

Visitation: 

Budget Authority ............................. 2 4 6 10 10 10 10 10 10 10 32 82

Estimated Outlays ........................... 2 4 6 10 10 10 10 10 10 10 32 82

Total Title III Changes in Direct Spending: 

Estimated Budget Authority ............ 84 70 89 101 172 208 220 232 240 250 517 1,667

Estimated Outlays ........................... 64 65 94 115 184 204 218 233 240 250 522 1,667

CHANGES IN REVENUES

Use of New Hire Directory for Unemployment Compensation Program: 

Estimated Revenues ........................ 0 0 ¥2 ¥7 ¥13 ¥17 ¥20 ¥22 ¥23 ¥24 ¥22 ¥128

Notes.—Components may not sum to totals because of rounding. TANF=Temporary Assistance for Needy Families. *=Less than $500,000. 

Section 301 would allow states to pay up to $400 each month of 

child support to a family (up to $600 to a family with two or more 

children) receiving assistance and would not require the state to 

pay the federal government’s share of those payments. The state 

could not count the child support as income in determining the 

families’ benefits under the TANF program. 

In recent years, states with about 60 percent of child support collections shared some of those collections with families receiving 

TANF. CBO expects states will continue to share at least that 

amount and the federal government would share that cost. In addition, based on conversations with state child-support officials and 

other policy experts, CBO expects that states with about one-third 

of collections would choose to institute a policy of sharing the first 

$50 collected, or, if they already have such a policy, to increase the 

amount of child support they share with families on assistance. 

CBO anticipates that states would put in place those increases 

slowly and that the increases would not be fully effective until 

2009. Based on administrative data for child support and information supplied by state officials, CBO expects that states would raise 

payments to families in 2009 from the $105 million anticipated 

under current practices to $175 million under the proposal. CBO 

estimates that federal offsetting receipts (from reimbursements) 

would fall by $52 million in 2004, $96 million in 2009, and $848 

million over the 2004–2013 period. 

Because additional child support income would reduce Food 

Stamp benefits, CBO estimates savings in the Food Stamp program 

totaling $1 million in 2004, $16 million in 2009, and $120 million 

over the 2004–2013 period. In addition, the provision would have 

a small effect on the rate of TANF spending. States can count payVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00074 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
75

ment of child support to families out of their share of collections 

toward the TANF maintenance of effort requirement (the requirement that states maintain funding at their 1994 level), if such payments are not counted as income in determining the TANF benefit. 

States that would spend less of their own funds because of the federal contribution would have less to count toward their MOE requirement. States that increased payments to families could count 

more toward the requirement. States that increased payments to 

families could count more toward the requirement. CBO estimates 

that the net effect would be smaller state contributions to child 

support payments, resulting in a deceleration in their use of federal 

TANF funds. CBO estimates that the provision would decrease estimated TANF outlays by $33 million over the 2004–2006 period, 

but, because states would find alternative ways to spend the funds 

in later years, it would have no net effect over the 2004–2013 period. 

Distribute More Past-Due Support to Current and Former TANF 

Recipients. Section 301 also would require states to share more 

child support with families through a change in assignment rules 

and allow states to share more support with families who used to 

receive welfare. 

Under current law, families assign to the state the right to any 

child support due before and during the period the families received assistance. The act would eliminate the requirement that 

families assign support due in the period before the families received assistance. H.R. 4 would require states to implement the 

new policy by October 1, 2007, but would give states the option of 

implementing the policy sooner. 

When a family ceases to receive public assistance, states continue to enforce the family’s child support order. All amounts of 

child support collected on time are sent directly to the family. However, both the government and the family have a claim on collections of past-due child support: the government claims the support 

owed for the period when the family was on assistance, up to the 

amount of the assistance paid, and the family claims the remainder. A set of distribution rules determines which claim is paid first 

when a collection is made. That order matters because, in many 

cases, past-due child support is never fully paid.

Section 301 would give states the option to change the order of 

the distribution rules so that all collections would be paid to families first before the government is reimbursed. In addition, it would 

allow states to pay any additional amount to families from support 

owed for the period the family was on assistance. 

CBO estimates that states with 40 percent of collections would 

implement optional policies by 2009. Based on conversations with 

state child-support officials and policy experts, and on administrative data, CBO estimates that families would receive an additional 

$24 million in 2004, rising to $365 million by 2009, and $2.6 billion 

over the 2004–2013 period, as a result of these changes. CBO estimates that those increased distributions to families would reduce 

the federal share of collections by $13 million in 2004, $201 million 

in 2009, and $1.4 billion over the 2004–2013 period. 

The new collections paid to former TANF recipients would affect 

spending in the Food Stamp program. CBO expects that one-third 

of the former TANF recipients with increased child support income 

76

would participate in the Food Stamp program, and that benefits 

would be reduced by 30 cents for every extra dollar of income. Increased income from the tax refund offset, which is paid as a lump 

sum, would not count as income for determining Food Stamp benefits. For purposes of calculating such benefits, incomes of former 

TANF recipients would increase by $6 million in 2004 and $474 

million over the 2004–2013 period. Food Stamps savings would be about $1 million in 2004 and $47 million over the 2004–2013 period. 

Section 301 would allow states to count increased state spending 

stemming from the new distribution policy towards their MOE requirement in the TANF program. Many states have unspent balances of federal TANF funds from prior years. Those states could 

reduce the amount of state money they spend on TANF by the 

amount that they pay to families under the new policy. To maintain TANF spending levels, those states then could accelerate 

spending of federal dollars. CBO estimates TANF spending would 

accelerate by $3 million in 2004 and $19 million over the 2004– 2007 period, but reduced spending in later years would result in no 

net effect on TANF spending over the 2004–2013 period. 

Finally, section 301 would affect federal collections in the student 

loan program. Under a program called the federal tax offset refund 

program, tax refund payments are withheld from individuals who 

owe over-due child support and certain federal debts, mainly related to student loans, and used to pay the debts. Beginning in 

2008, H.R. 4 would give child support debt priority over all federal 

debts. In current law, child support that is owed to the government 

is given such priority, but child support owed to families is paid off 

after all other federal debts. In cases where an individual owes 

both child support debt and other federal debt, the new priority 

order would decrease payments to the federal government in the 

student loan program. 

Currently one-half of one percent of tax filers are subject to a tax 

refund offset for child support owed to a family and one percent for 

student loan debt. Assuming people who owe student loan debt are 

neither more nor less likely to owe child support debt, 6,800 filers 

could be subject to an offset for either child support and student 

loan debt. CBO estimates that the provision would delay or reduce 

recoveries in the student loan program by $8 million annually beginning in 2008. 

The provisions affecting the student loan programs are assessed 

under the requirements of the federal credit reform act. As such, 

the budget records all the costs and collections associated with a 

new loan on a present-value basis in the year the loan is obligated 

and the costs of all changes (i.e., ‘‘modifications’’) affecting outstanding loans are displayed in the fiscal year the bill is enacted—

assumed to be 2004 for this estimate. This results in a federal cost 

of $15 million in 2004 and insignificant amounts each year for 2005 

through 2013. 

Mandatory Three-Year Update of Child Support Orders. Section 

302 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 reVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00076 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
77

view and the remainder apply a COLA. No state currently makes 

automated adjustments. The provision would take effect on October 

1, 2005, and CBO estimates that the net impact of this provision 

would be direct spending savings of $134 million over the 2004–

2013 period. 

CBO estimates that there are 700,000 TANF recipients with 

child support orders in states that do not periodically adjust orders 

and one-third 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 

form 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 estimates 40 percent of orders with a monetary 

adjustment also would be adjusted to include a requirement that 

the noncustodial parent provide health insurance for their child 

and that insurance would be provided in about half of those cases. 

After the first few years, we assume newly provided medical insurance would decline by half, because many families would have already had such insurance recently added to their order. Children 

who receive TANF are generally eligible for Medicaid, so the new 

coverage would reduce spending in that program. 

Cost-of-living adjustment. When a state makes a cost-of-living adjustment it applies a percentage increase reflecting the rise in the 

cost of living to every order, regardless of how the financial circumstances of the individuals may have changed. The process is 

considerably less cumbersome and expensive than a full review but 

also results in smaller adjustments on average. Based on recent research on COLA programs, CBO estimates that the average cost 

would be $11 per case modified, and the average adjustment to a 

support order would be $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 administrative costs 

for child support to rise by $14 million in 2006 and $104 million 

over the 2006–2013 period. Federal collections would increase by 

$6 million in 2006 and $141 million over the 2006–2013 period. FiVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00077 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
78

nally, Food Stamp and Medicaid savings would total $22 million 

and $75 million respectively over the 2006–2013 period. 

Use of New Hire Information. Section 304 would allow states, beginning in fiscal year 2005, 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 of the national information within the next few years. 

CBO estimates that this proposal would result in a reduction in 

spending for unemployment compensation of $14 million in 2005 

and $198 million over the 2005–2013 period. CBO assumes this reduction in spending would lead states to reduce their unemployment taxes. As a result, CBO estimates that revenues would fall 

by an insignificant amount in 2005 and $128 million over the 

2005–2013 period. Because state spending and tax collection for 

unemployment compensation are reflected on the federal budget, 

enactment of this section would result in a net deficit reduction of 

$70 million over the 10-year period. 

Denial of Passports. Under current law, the State Department 

denies a request for a passport for a noncustodial parent if he or 

she owes more than $5,000 in past-due child support. Beginning in 

fiscal year 2005, section 305 would lower that threshold and deny 

a passport to a noncustodial parent owing $2,500 or more. Generally, when a noncustodial parent seeks to restore eligibility for a 

passport, he or she will arrange to pay the past-due amount down 

to the threshold level. 

The State Department currently denies about 15,000 passport requests annually. Data from HHS 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 because of 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 

79

estimates the policy would result in new payments of child support 

of about $8 million annually. CBO assumes the same share of those 

payments would be on behalf of current and former welfare families as in the overall program—13 percent—and would be retained 

by the government as reimbursement for welfare benefits. The federal share of such collections would be about $1 million a year and 

$9 million over the 2005–2013 period. 

Improved Debt Collection: SSA Benefit Match. Section 308 would 

allow states to collect past-due child support by withholding Social 

Security, Black Lung, and Railroad Retirement Board payments. 

Because parents affected by the legislation are generally younger 

than 62, 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 out of three of those beneficiaries would potentially have their check offset. On average, the 

offsets could amount to about $1,800 by 2008 and could yield more 

than $60 million in collections for child support from Social Security payments. 

CBO estimates that the additional collections under section 308 

would be less than one-half of the potential $60 million 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. Some states consider these benefits in determining the amount of child support owed by the non-custodial parent. Fourth, in some cases the estimated offset would exceed the 

amount of arrears owed. Finally, CBO expects a small percentage 

of all non-custodial parents owing past-due support would slip 

through the administrative process. 

The estimated $24 million in child support would result in a net 

increase in federal offsetting receipts of about $4 million in 2008. 

The estimate assumes 33 percent of collections would be on behalf 

of current and former welfare families. 

The provision would be effective October 1, 2004, and CBO assumes that the program would take several months to establish, so 

that full savings would not be realized until 2006. As DI benefits 

rise over time, federal receipts under these provisions would climb 

from $3 million in 2005 to $6 million in 2013, and total $42 million 

over the 2005–2013 period. 

Maintenance of Technical Assistance and Federal Parent Locator 

Service Funding. Current law allows the Secretary to use 3 percent 

of the federal share of child support collections to fund technical assistance efforts and to operate the federal parent locator service. 

Sections 309 and 310 would set a minimum funding level for those 

purposes equal to the 2002 level of $37 million. Because CBO 

80

projects that such payments will fall to $36 million in 2004 under 

the current formula, this provision would increase payments by $1 

million in that year. CBO expects that the federal share of child 

support payments will continue to grow after 2004 such that the 

payment would not fall below $37 million after that year. 

Seizure of Assets held by Multi-State Financial Institutions.

Under current law, HHS, matches lists of noncustodial parents who 

owe child support arrears against data from financial institutions 

to identify assets that might be seized to pay overdue child support. HHS forwards any matches to states so that states can pursue collection. On average, states make a collection in 8 percent of 

cases with a match. The reported performance of states varies 

widely from 55 percent of cases to less than 1 percent. States’ collection rates are low on average for a variety of reasons. In some 

cases, multi-state financial institutions will not honor a seizure by 

a state unless the institution has branch offices in the state. Also, 

some states have policies of pursuing matches only when a large 

financial asset is identified or only when the arrearage is longstanding or no current payments are being made. 

Section 311 would give the federal government the authority to 

act on behalf of states to seize financial assets for the purpose of 

paying child support. The new authority would resolve problems of 

jurisdiction in cases where a state is pursuing an asset in a different state. Also, the federal government plans to pursue collections in a higher percent of cases. 

Currently, HHS compares a list of about 3 million cases with arrears with data from financial institutions and identifies potential 

financial assets in more than 1 million cases. Some of those cases 

are later found to be false matches or are uncollectible for other 

reasons. Based on conversations with child-support administrators 

and policy experts, CBO expects that, when fully effective, the federal government would seize assets 20 percent of the time a potential asset is identified, up from 8 percent. Based on administrative 

data from HHS, CBO expects the average collection would be $700 

per seizure down from $930 per seizure under current law. (The average seizure would go down because the federal government would 

be pursuing a broader set of cases, many of which would have 

lower levels of assets available.) CBO assumes the policy would 

take some time to implement and would not be fully effective until 

2007. The policy would result in new collections of $24 million in 

2005 and $974 million over the 2005–2013 period. CBO assumes 

the same share of those payments would be on behalf of current 

and former welfare families as in the overall program—13 percent—and would be retained by the government as reimbursement 

for welfare benefits. The federal share of such collections would be 

$73 million over the 2004–2013 period.

Information Comparison With Insurance Data. Section 312 would 

authorize the Secretary to compare information of noncustodial 

parents who owe past-due child support with information maintained by insurers concerning insurance payments and to furnish 

any information resulting from the match to state agencies to pursue payments to pay overdue child support. States representing 

about one-third of child support collections currently participate in 

an existing system operated by the Child Support Lien Network 

that performs a similar function. The number of participating 

81

states has been growing rapidly in the last several years and CBO 

expects that eventually, even without federal intervention, that 

about three-quarters of states would participate. Under the proposal, CBO expects all states would participate by 2007. Based on 

data for the existing program, CBO expects that collection would 

increase by more than $10 million annually when fully phased in 

and that half of those collections would be on behalf of current or 

former TANF families. The federal share of collections would be 

$24 million over the 2006–2013 period. 

Interception of Gambling Proceeds. Section 318 would authorize 

the Secretary of HHS to compare information obtained from gambling establishment with information on individuals who owe pastdue child support and direct the establishment to withhold from 

the individuals’ net winnings all amounts up to the child support 

owed. The procedures would apply whenever an individual won 

enough to be required to fill out an IRS form W2–G, generally $600. 

HHS would compare a list of more than 3 million noncustodial 

parents with overdue support to the information on winners reported by gambling establishments. CBO assumes that 3 percent of 

such parents will receive gambling winnings above the threshold 

level, in line with the rate of winning in the adult population and 

that percentage would increase to 5 percent by 2013. Based on data 

on average winnings, CBO assumes $2,800 would be collected, on 

average, per match. CBO expects it would take several years to establish a system of matching with the gambling establishments 

such that the program would not be fully operational until 2007. 

In that year, potential collections would total about $375 million. 

CBO assumes that several factors would result in only one-third 

of that amount actually collected. First, child support is already 

regularly withheld from lottery winnings which form a substantial 

percent of gambling winning. Second, Indian casinos are not required to withhold winnings. Third, CBO assumes administrative 

errors and imperfect enforcement would result in a further reduction in potential collections. 

CBO estimates that implementing the policy would result in increased collections of $57 million in 2006, $121 million in 2007, and 

$1.1 billion over the 2006–2013 period. CBO assumes the same 

share of those payments would be on behalf of current and former 

welfare families as in the overall program—13 percent—and would 

be retained by the government as reimbursement for welfare benefits. The federal share of such collections would be $82 million over 

the 2004–2013 period. 

Grants to States for Access Visitation. The 1996 welfare law authorized grants to states funded at $10 million annually to establish and operate access and visitation programs. The purpose of the 

grants is to facilitate noncustodial parents’ access to and visitation 

of their children. Section 320 would increase funding to $12 million 

in 2004, $14 million in 2005, $16 million in 2006, and $20 million 

in 2007 and in subsequent years. The new funding would result in 

increased of $82 million over the 2004–2013 period. 

Title IV: Child Welfare. Title IV would extend a program of demonstration projects related to child welfare programs. Currently, 18 

states are using waivers to test the efficiency of innovations in 

child welfare, such as subsidized guardianship, managed care, and 

82

substance abuse treatment. The demonstration projects are required to be cost-neutral to the federal government. However, it is 

possible that the demonstrations would lead to increased costs to 

the federal government because of measurement or methodological 

errors in the cost-neutrality calculation. CBO cannot estimate the 

likely level of such costs, but based on experience with the demonstrations, we expect the federal budget impact would not be significant. 

Beginning in fiscal year 2005, section 402 would allow Puerto 

Rico to claim more federal matching funds for foster care expenses 

by excluding amounts in excess of grants received in fiscal year 

2002 from the limitation specified in section 1108 of the Social Security Act. The amount of spending above the limitation would be 

capped at $6.25 million for fiscal years 2005 through 2008, but 

would be unconstrained beginning in 2009. 

The Social Security Act currently limits total federal spending in 

Puerto Rico on certain social service programs, including foster 

care, to $107 million in any year. In fiscal year 2002, foster care 

payments comprised $11 million of that total. Although Puerto Rico 

is eligible for federal matching funds for foster care administrative 

costs, it has not received any such payments because it does not 

yet have an approved cost allocation methodology. (Even if it had 

submitted claims for administrative costs, because Puerto Rico already is using all of the funds available under the section 1108 

limit, these claims would have either reduced funding for other social services, or would have been unpaid.) CBO estimates that reimbursements of administrative costs could equal or exceed the 

amount of matching funds Puerto Rico receives for foster care expenses. Moreover, if the constraints imposed by the section 1108 

limit were loosened, reimbursements for maintenance payments 

also could increase. Section 402 would effectively raise the limit on 

foster care reimbursements for the 2005–2008 period, and eliminate it after that. The act would constrain these additional costs 

at $6.25 million annually during the 2005–2008 period, after which 

time there would be no limit on claims above the 2002 amount. 

CBO estimates this provision would increase outlays by $25 million 

between fiscal years 2005 and 2008, and by $112 million from 2005 

through 2013 (see Table 1). 

Title V: Supplemental Security Income. Section 501 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 2004. Under the 

legislation, the agency would have to review at least 40 percent of 

the adult-disability awards made by DDS offices in 2005 and 50 

percent in 2006 and beyond. 

CBO anticipates state DDS offices will approve between 350,000 

and 400,000 adult disability applications for SSI benefits annually 

between 2004 and 2013. Based on recent data for comparable reviews in the Social Security Disability Insurance program, CBO 

projects that by 2013, more than 20,000 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 section 501 

83

would reduce SSI benefits by $2 million and Medicaid outlays by 

$4 million in 2004. Over the 2004–2013 period, CBO estimates this provision would lower SSI outlays by $405 million and Medicaid 

spending by $1 billion (see Table 4).

TABLE 4.—DIRECT SPENDING EFFECTS OF TITLE V: SUPPLEMENTAL SECURITY INCOME 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–08 2004–13

Pre-effectuation Reviews: 

SSI: 

Estimated 

Budget Authority ........... ¥2 ¥9 ¥17 ¥25 ¥37 ¥46 ¥55 ¥68 ¥66 ¥80 ¥90 ¥405

Estimated outlays .............. ¥2 ¥9 ¥17 ¥25 ¥37 ¥46 ¥55 ¥68 ¥66 ¥80 ¥90 ¥405

Medicaid: 

Estimated 

Budget Authority ........... ¥4 ¥15 ¥34 ¥56 ¥79 ¥106 ¥133 ¥161 ¥193 ¥227 ¥188 ¥1,008

Estimated Outlays .............. ¥4 ¥15 ¥34 ¥56 ¥79 ¥106 ¥133 ¥161 ¥193 ¥227 ¥188 ¥1,008

Total Changes in Title 

V: 

Estimated 

Budget Authority ........... ¥6 ¥24 ¥51 ¥81 ¥116 ¥152 ¥188 ¥229 ¥259 ¥307 ¥278 ¥1,413 

Estimated Outlays .............. ¥6 ¥24 ¥51 ¥81 ¥116 ¥152 ¥188 ¥229 ¥259 ¥307 ¥278 ¥1,413

Title VI: Transitional Medical Assistance. Title VI would make 

several changes to Medicaid and the State Children’s Health Insurance Program. The act would extend through 2008 the requirement 

that state Medicaid programs provide transitional medical assistance to certain Medicaid beneficiaries (usually former welfare recipients) who otherwise would be ineligible because they have returned to work and have increased earnings. Title VI also would 

allow states to simplify aspects of TMA administration. Finally, it 

would prohibit states from using SCHIP funds to provide health 

coverage to childless adults. 

Overall, CBO estimates that enacting title VI would increase direct spending by $17 million in 2004 and by $2.1 billion over the 

2004–2013 period (see Table 5). 

Extension of Transitional Medical Assistance. State Medicaid programs are required to temporarily provide Medicaid coverage, 

known as transitional medical assistance, for certain individuals 

(usually former TANF recipients) and their dependents who otherwise would lose coverage because of increase earnings. States currently are required to provide TMA to welfare-related beneficiaries 

who lose their eligibility prior to March 31, 2004. Section 601 of the 

act would extend the requirement through September 30, 2008. 

CBO estimates that this provision would increase Federal Medicaid outlays by $21 million in 2004 and by $2.6 billion over the 

2004–2013 period. The budgetary effects of the extension would 

continue beyond 2008 because families who qualify for TMA would 

be entitled to up to 12 months of additional eligibility, even if that 

eligibility runs beyond September 30, 2008. Moreover, some states 

provide more than 12 months of TMA through Medicaid waivers; 

families living in those states could remain eligible through 2011. 

Without H.R. 4, CBO anticipates that some of the families leaving welfare between 2004 and 2008 would have incomes high 

84

enough to make their children ineligible for Medicaid, and that 

some of the children in those families would enroll in SCHIP instead. By extending TMA, the act would make those children eligible for Medicaid. Since children who are eligible for Medicaid cannot receive SCHIP, the act would lead to savings in SCHIP. 

CBO estimates that the act would reduce Federal SCHIP outlays by a total of $47 million over the 2004–2008 period. Because states 

generally have 3 years to spend their SCHIP allotments, those savings would free-up funds that could be spent on benefits in later 

years, and CBO estimates that spending would increase by $20 

million over the 2009–2013 period. 

Optional TMA Simplification. Section 601 also would allow 

states to waive or relax various requirements that currently apply 

to TMA. In particular, the act would allow states to expand TMA 

eligibility to individuals who have not been eligible for Medicaid for 

at least three of the previous 6 months (a requirement under current law), provide up to 12 additional months of TMA eligibility, 

and eliminate some or all of the requirements for TMA recipients 

to report their incomes periodically.

TABLE 5.—DIRECT SPENDING EFFECTS OF TITLE VI: TRANSITIONAL MEDICAL ASSISTANCE 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–08 2004–13

CHANGES IN DIRECT SPENDING

Extension of TMA through 2008: 

Medicaid: 

Estimated Budget 

Authority ............... 21 385 515 575 625 417 65 13 ¥1 ¥6 2,121 2,609 

Estimated Outlays .... 21 385 515 575 625 417 65 13 ¥1 ¥6 2,121 2,609 

SCHIP: 

Budget Authority ...... 0 0 0 0 0 0 0 0 0 0 0 0 

Estimated Outlays .... 0 ¥15 ¥11 ¥8 ¥13 5 0 2 2 11 ¥47 ¥27 

Optional TMA Simplifications: 

Medicaid: 

Estimated Budget 

Authority ............... 0 21 55 63 68 63 9 1 0 ¥1 207 279 

Estimated Outlays .... 0 21 55 63 68 63 9 1 0 ¥1 207 279 

SCHIP: 

Budget Authority ...... 0 0 0 0 0 0 0 0 0 0 0 0 

Estimated Outlays .... 0 0 ¥2 ¥1 ¥1 0 0 0 0 1 ¥4 ¥3 

Prohibition on SCHIP Coverage 

for Childless Adults: 

Medicaid: 

Estimated Budget 

Authority ............... ¥4 ¥6 ¥6 ¥8 ¥29 ¥25 ¥40 ¥50 ¥68 ¥85 ¥53 ¥321 

Estimated Outlays .... ¥4 ¥6 ¥6 ¥8 ¥29 ¥25 ¥40 ¥50 ¥68 ¥85 ¥53 ¥321 

SCHIP: 

Budget Authority ...... 0 0 0 0 0 0 0 0 0 0 0 0 

Estimated Outlays .... 0 1 ¥25 ¥38 ¥64 ¥93 ¥77 ¥71 ¥47 ¥30 ¥126 ¥444 

Total Changes in Title VI: 

Estimated Budget Authority .................................. 17 400 564 630 664 455 34 ¥36 ¥69 ¥92 2,275 2,567 

Estimated Outlays ............. 17 386 526 583 586 367 ¥43 ¥105 ¥114 ¥110 2,098 2,093 

Notes.—SCHIP = State Children’s Health Insurance Program. TMA = Transitional Medical Assistance. 

CBO anticipates that those provisions would boost federal Med- icaid spending by $21 million in 2005 and by $279 million over the 

2005–2013 period. Most of those costs would stem from the elimination of the income-reporting requirements. States already have 

the flexibility under current law to effectively waive the three-outof-six months requirement or provide more than 12 months of TMA 

by disregarding some or all of an individual’s income when determining eligibility. CBO also estimates that the effect of those provisions would have a slight impact on SCHIP, decreasing outlays by 

85

$3 million over the 2004–2013 period. By relaxing TMA rules, the 

act would make some children newly eligible for Medicaid, and 

therefore ineligible for SCHIP. 

Prohibit SCHIP Coverage for Childless Adults. Section 602 of the 

act would prohibit the Secretary of Health and Human Services 

from allowing states to use SCHIP funds to provide health coverage 

to childless adults (including pregnant women who have no children). Several states currently provide such coverage through temporary waivers approved by the Secretary under section 1115 of the 

Social Security Act, and other states have applications for similar 

waivers pending or in the development stage. The provision would 

prohibit the Secretary from approving any new waivers to cover 

childless adults or renewing the existing waivers once they expire. 

CBO estimates that this provision would have no effect on 

SCHIP spending in 2004 and would decrease the program’s spend- ing by $444 million over the 2004–2013 period. Because state 

SCHIP programs would no longer be able to cover childless adults, 

they would have more funding available to cover children and their 

parents. CBO anticipates that states would use a portion of the 

freed-up funds to do so, with the remainder being spent after 2013. 

Under current law, CBO anticipates that the limited nature of 

SCHIP funding will restrict program spending in some states, and 

that states will partly offset these funding shortfalls by expanding 

Medicaid eligibility. The provision would lessen the funding shortfalls and reduce states’ use of Medicaid funding to offset them. As 

a result, CBO estimates that the provision would reduce Medicaid 

spending by $321 million over the 2004–2013 period. 

Spending subject to appropriation 

H.R. 4 would establish several new grant programs that would 

require annual appropriations. Assuming appropriation of the authorized amounts, CBO estimates that implementing the legislation would cost $14 million in 2004 and $1 billion over the 2004– 2011 period (see Table 6). Estimated outlays are based on historical 

spending patterns for social service grant programs. 

Tribal TANF Improvement Fund. Section 113 would authorize $100 million for each year through 2008 for the Secretary of HHS 

to carry out a program of technical assistance and competitive 

grants to Indian tribes operating TANF programs. CBO estimates 

implementing the program would cost $10 million in 2004 and 

$500 million over the 2004–2011 period, assuming appropriation of 

the authorized amounts. 

Fatherhood Grants. Section 118 would establish several new 

grant programs to promote fatherhood and would authorize appropriations totaling $75 million annually over the 2004–2008 period. 

Assuming appropriation of the authorized amounts, CBO estimates 

implementing section 118 would cost $1 million in 2004 and $375 

million over the 2004–2013 period.

TABLE 6.—ESTIMATED COSTS FOR NEW DISCRETIONARY SPENDING 

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–08 2004–13

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Tribal TANF Improvement Fund: 

Authorization Level ............................ 100 100 100 100 100 0 0 0 0 0 500 500

86

TABLE 6.—ESTIMATED COSTS FOR NEW DISCRETIONARY SPENDING—Continued

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004–08 2004–13

Estimated Outlays ............................. 10 60 108 100 84 88 45 5 0 0 362 500

Fatherhood Grants: 

Authorization Level ............................ 75 75 75 75 75 0 0 0 0 0 375 375

Estimated Outlays ............................. 1 20 56 93 92 76 34 3 0 0 262 375

Grants for Car Ownership: 

Authorization Level ............................ 25 25 25 25 25 0 0 0 0 0 125 125

Estimated Outlays ............................. 3 15 27 25 21 22 11 1 0 0 91 125

Total Changes: 

Authorization Level ............................ 200 200 200 200 200 0 0 0 0 0 1,000 1,000

Estimated Outlays ............................. 14 95 191 218 197 186 90 9 0 0 715 1,000

Section 118 would authorize the appropriation of $20 million per 

year during the 2004–2008 period for grants to up to 20 states to 

conduct demonstrations to promote responsible fatherhood through 

promoting marriage, responsible parenting, or economic stability. It 

also would authorize $30 million each year over the 2004–2008 period for grants to eligible entities for the same purposes. Eligible 

entities would include local governments, local private agencies, 

community-based or nonprofit organizations, Indian tribes, or private entities. 

Section 118 also would authorize $5 million annually through 

2008 for the Secretary of HHS to contract with a nationally recognized nonprofit organization to develop, promote, and distribute a 

media campaign promoting responsible fatherhood and to develop 

a national clearinghouse to assist states and communities in their 

effort to promote marriage and responsible fatherhood. Finally, it 

would authorize a program of formula grants to states to conduct 

media campaigns to promote marriage and responsible fatherhood 

funded at $20 million each year over the 2005–2008 period

Grants for Car Ownership. Section 119 would authorize the appropriation of $25 million each year through 2008 for a program of 

grants to states, Indian tribes, localities, and nonprofit organizations to assist low-income families with children in buying automobiles. The program is designed to facilitate employment opportunities and access to training by providing low-income families with 

more reliable transportation. CBO estimates that implementing 

this provision would cost $3 million in 2004 and $125 million over 

the 2004–2011 period, assuming the appropriation of the authorized amounts. 

Previous CBO estimate: On February 13, 2003, CBO transmitted 

a cost estimate for H.R. 4, the Personal Responsibility, Work, and 

Family Promotion Act of 2003, as introduced in the House of Representatives on February 4, 2003. 

H.R. 4, as approved by the Senate Committee on Finance, would 

increase direct spending by nearly $5 billion over the 2004–2008 

period compared to about $2 billion in the House version of the legislation. Both versions of H.R. 4 would reduce revenues by $22 million over those five years. The Senate version of H.R. 4 would increase authorizations of appropriations by $1 billion above the current baseline over the 2004–2008 period, whereas the House 

version would raise such authorizations by more than $2 billion. 

Both versions of H.R. 4 would extend TANF and related programs through 2008, increase direct spending on child care by $200 

million annually, and make changes to the child support enforceVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00086 Fmt 6659 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
87

ment, SSI, and Medicaid programs. The estimates for some identical provisions in the versions differ because CBO estimated the 

House version of the act under its January 2003 baseline assumptions and the Senate version under the baseline completed in 

March, and which underlies the 2004 budget resolution. The major 

difference relates to spending under the abstinence education program. Also, CBO assumed a later enactment date in its estimate 

of the Senate version. Differences in other estimated costs reflect 

differences in the legislation. 

Among the significant differences in the legislation, the Senate 

version of H.R. 4 would expand the contingency fund more than the 

House version. It would allow states to share more child support 

with current and former recipients of welfare and would forgive the 

federal share of collections on child support that states are currently sharing with families. The Senate version would establish 

several new enforcement tools in the child support program that 

were not included in the House version. It does not contain a provision in the House version that would institute a program of charging fees for certain child support clients. 

The Senate version of H.R. 4 would extend TMA for five years 

compared with one year in the House version, and it would allow 

states to adopt administrative simplifications. It also contains a 

provision not in the House version that would prohibit states from 

using SCHIP funds to provide health coverage for childless adults 

and does not include a provision to reduce the amount of reimbursement to states for Medicaid administrative costs. 

Estimate prepared by: Federal Costs: Sheila Dacey—TANF and 

Child Support; Christina Hawley Sadoti—Unemployment Compensation and Child Welfare; Donna Wong—Child Care; Geoffrey 

Gerhardt—Supplemental Security Income; Jeanne De Sa and Eric 

Rollins—Medicaid and SCHIP; Margaret Nowak—Abstinence Education. Impact on State, Local, and Tribal Governments: Leo Lex. 

Impact on the Private Sector: Ralph Smith. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

(88)

VI. MINORITY VIEWS 

Democratic members of the Committee support improving welfare reform to help more needy Americans escape poverty and to 

help their children have brighter futures. However, the Democratic 

members of the Committee are disappointed by the bill presented 

to the Committee. Despite the efforts of the Chairman to be collaborative, the bill inadequately funds child care, limits the ability 

of States to design effective welfare-to-work programs, and includes 

a potentially dangerous ‘‘super-waiver’’ provision likely to cede important Congressional authority to the Executive Branch. 

When this bill is considered by the full Senate, Democratic members of the Committee will seek to improve it and are hopeful of 

being able to support it if improvements are made. A significant 

concern is support for child care. While the bill increases child care 

funding by $1 billion the Congressional Budget Office estimates it 

will cost States more than $1 billion to implement the new work 

standards required by the bill. As a result, the bill is likely to result in fewer low-income working families receiving child care assistance in the United States. This is because States would be 

forced to shift funds currently used to assist low-income working 

families at risk of needing welfare and those who have left the 

rolls, to aiding only welfare recipients in meeting the work requirements. Already, according to the General Accounting Office, half of 

States are reporting that families eligible for child care assistance 

are not receiving it. This result is contrary to the spirit and substance of the 1996 welfare reform law which provided substantial 

child care assistance to low-income working families who do not 

currently receive welfare. This could cause significant hardship, 

particularly for those families who followed the rules and left welfare for work are still struggling to achieve self-sufficiency—without child care aid they are at risk of returning to welfare. The 

108th Congress should not turn its back on those families. 

The bill before the Committee also does not provide enough flexibility for States in operating TANF programs. It mandates higher 

hour standards for State programs without any assurance that 

such mandates will promote private sector employment. In fact, the 

Committee heard testimony suggesting these new mandates could 

promote ‘‘workfare’’ at the expense of private sector jobs. The hourly mandates are particularly troubling in light of its child care deficiencies. In addition, the bill does not provide as much flexibility 

as the substitute we offered in permitting States to incorporate 

longer-term training, education, and rehabilitative services in their 

welfare reform strategies. And it also fails to provide States the option of restoring eligibility for benefits for legal immigrants, including health care services for legal immigrant children. 

Finally, the bill before the Committee includes a 10 state ‘‘superwaiver’’ demonstration. The scope of this provision was not made 

89

clear in the initial Chairman’s Mark. While the final provision is 

scaled back, it remains an ill-considered attempt to cede Congressional authority to the Executive branch. 

The Democratic Members of the Committee will work to address 

these objections when the full Senate considers the bill. A society 

can be judged on how it assists those in need, and welfare reform 

is an important test of that principle. The Democratic Members of 

the Committee believe we can do better.

MAX BAUCUS. 

JOHN BREAUX. 

BLANCHE L. LINCOLN. 

JOHN F. KERRY. 

JAY ROCKEFELLER. 

JEFF BINGAMAN. 

TOM DASCHLE. 

KENT CONRAD. 

JAMES JEFFORDS. 

BOB GRAHAM.

(90)

VII. CHANGES IN EXISTING LAW

In compliance with paragraph 12 of Rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new matter is printed in 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 

PURPOSE

SEC. 401. (a) IN GENERAL.—The purpose of this part is to increase the flexibility of States in operating a program designed to—

(1) provide assistance to needy families so that children may 

be cared for in their own homes or in the homes of relatives; 

(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; 

(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing 

and reducing the incidence of these pregnancies; and 

(4) encourage the formation and maintenance of øtwo-parent 

families¿ healthy 2-parent married families, and encourage responsible fatherhood. 

(b) NO INDIVIDUAL ENTITLEMENT.—This part shall not be interpreted to entitle any individual or family to assistance under any 

State program funded under this part. 

ELIGIBLE STATES; STATE PLAN

SEC. 402. (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) Conduct a program, designed to serve all political 

subdivisions in the State (not necessarily in a uniform 

91

manner), that provides assistance to needy families 

with (or expecting) children and provides parents with 

job preparation, work and support services to enable 

them to leave the program and become self-sufficient. 

ø(ii) Require a parent or caretaker receiving assistance under the program to engage in work (as defined 

by the State) once the State determines the parent or 

caretaker is ready to engage in work, or once the parent or caretaker has received assistance under the 

program for 24 months (whether or not consecutive), 

whichever is earlier, consistent with section 407(e)(2). 

ø(iii) Ensure, that parents and caretakers receiving 

assistance under the program engage in work activities in accordance with section 407.¿

(ii) Require 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).

(iv) Take such reasonable steps as the State deems 

necessary to restrict the use and disclosure of information about individuals and families receiving assistance under the program attributable to funds provided 

by the Federal Government. 

ø(v) Establish goals and take action to prevent and 

reduce the incidence of out-of-wedlock pregnancies, 

with special emphasis on teenage pregnancies, and establish numerical goals for reducing the illegitimacy 

ratio of the State (as defined in section 

403(a)(2)(C)(iii)).¿

(v) Establish specific measurable performance objectives for pursuing the purposes of the program under 

this part as described in section 401(a), including by—

(I) establishing objectives consistent (as determined by the State) with the criteria used by the 

Secretary in establishing performance targets 

under section 403(a)(4)(C) (including with respect 

to workplace attachment and advancement), and 

with such additional criteria related to other purposes of the program under this part as described 

in section 401(a) as the Secretary, in consultation 

with the National Governors’ Association and the 

American Public Human Services Association, 

shall establish; and 

(II) describing the methodology that the State 

will use to measure State performance in relation 

to each such objective. 

(vi) Describe any strategies and programs the State 

plans to use to address—

(I) employment retention and advancement for 

recipients of assistance under the program, includVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00091 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
92

ing placement into high-demand jobs, and whether 

the jobs are identified using labor market information; 

(II) efforts to reduce teen pregnancy; 

(III) services for struggling and noncompliant 

families, and for clients with special problems; and 

(IV) program integration, including the extent to 

which employment and training services under the 

program are provided through the One-Stop delivery system created under the Workforce Investment 

Act of 1998, and the extent to which former recipients of such assistance have access to additional 

core, intensive, or training services funded through 

such Act.

ø(vi)¿ (vii) Conduct a program, designed to reach 

State and local law enforcement officials, the education system, and relevant counseling services, that 

provides education and training on the problem of 

statutory rape so that teenage pregnancy prevention 

programs may be expanded in scope to include men. 

(viii) encourage equitable treatment of healthy 2-parent married families under the program referred to in 

clause (i). 

(B) SPECIAL PROVISIONS.—

ø(i) The document shall indicate whether the State 

intends to treat families moving into the State from 

another State differently than other families under the 

program, and if so, how the State intends to treat such 

families under the program.¿

ø(ii)¿ (i) The document shall indicate whether the 

State intends to provide assistance under the program 

to individuals who are not citizens of the United 

States, and if so, shall include an overview of such assistance. 

ø(iii)¿ (ii) The document shall set forth objective criteria for the delivery of benefits and the determination 

of eligibility and for fair and equitable treatment, including an explanation of how the State will provide 

opportunities for recipients who have been adversely 

affected to be heard in a State administrative or appeal process.

(iii) If the State is undertaking any strategies or programs to engage faith-based organizations in the provision of services funded under this part, or that otherwise relate to section 104 of the Personal Responsibility 

and Work Opportunity Reconciliation Act of 1996, the 

document shall describe such strategies and programs. 

(iv) The document shall describe strategies to improve program management and performance. 

(v) The document shall include a performance report 

which details State progress toward full engagement 

for all adult or minor child head of household recipients of assistance.

93

ø(vi) 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.¿

(vi) The document shall set forth the criteria for applying section 407(c)(6)(E) to an adult recipient or 

minor child head of household who is the only parent 

or caretaker relative for a child or adult dependent for 

care.

* * * * * * *

(4) CERTIFICATION OF THE ADMINISTRATION OF THE PRO- GRAM.—A certification by the chief executive officer of the 

State specifying which State agency or agencies will administer 

and supervise the program referred to in paragraph (1) for the 

fiscal year, which shall include assurances that local and tribal

governments and private sector organizations—

* * * * * * *

(8) CERTIFICATION OF CONSULTATION ON PROVISION OF

TRANSPORTATION AID.—In the case of a State that provides 

transportation aid under the State program, a certification by 

the chief executive officer of the State and State and local transportation agencies and planning bodies have been consulted in 

the development of the plan.

ø(b) PLAN AMENDMENTS.—Within 30 days after a State amends 

a plan submitted pursuant to subsection (a), the State shall notify 

the Secretary of the amendment.¿

(b) PROCEDURES FOR SUBMITTING AND AMENDING STATE

PLANS.—

(1) STANDARD STATE PLAN FORMAT.—The Secretary shall, 

after notice and public comment, develop a proposed Standard 

State Plan Form to be used by States under subsection (a). 

Such form shall be finalized by the Secretary for use by States 

not later than 9 months after the date of enactment of the Personal Responsibility and Individual Development for Everyone 

Act. 

(2) REQUIREMENT FOR COMPLETED PLAN USING STANDARD

STATE PLAN FORMAT BY FISCAL YEAR 2005.—Notwithstanding 

any other provision of law, each State shall submit a complete 

State plan, using the Standard State Plan Form developed 

under paragraph (1), not later than October 1, 2004. 

(3) PUBLIC NOTICE AND COMMENT.—Prior to submitting a 

State plan to the Secretary under this section, the State shall— (A) make the proposed State plan available to the public 

through an appropriate State maintained Internet website 

94

and through other means as the State determines appropriate; 

(B) allow for a reasonable public comment period of not 

less than 45 days; and 

(C) make comments received concerning such plan or, at 

the discretion of the State, a summary of the comments received available to the public through such website and 

through other means as the State determines appropriate. 

(4) PUBLIC AVAILABILITY OF STATE PLAN.—A State shall ensure that the State plan that is in effect for any fiscal year is 

available to the public through an appropriate State maintained Internet website and through other means as the State 

determines appropriate. 

(5) AMENDING THE STATE PLAN.—A State shall file an amendment to the State plan with the Secretary if the State determines that there has been a material change in any information 

required to be included in the State plan or any other information that the State has included in the plan, including substantial changes in the use of funding. Prior to submitting an 

amendment to the State plan to the Secretary, the State shall— (A) make the proposed amendment available to the public 

as provided for in paragraph (3)(A); 

(B) allow for a reasonable public comment period of not 

less than 45 days; and 

(C) make the comments available as provided for in 

paragraph (3)(C).

ø(c) PUBLIC AVAILABILITY OF STATE PLAN SUMMARY.—The State 

shall make available to the public a summary of any plan or plan 

amendment section.¿

GRANTS TO STATES

SEC. 403. (a) GRANTS.— (1) FAMILY ASSISTANCE GRANT.— (A) IN GENERAL.—Each eligible State shall be entitled to 

receive from the Secretary, for each of fiscal years ø1996, 

1997, 1998, 1999, 2000, 2001, 2002, and 2003,¿ 2004 

through 2008 a grant in an amount equal to the State family assistance grant payable to the State for the fiscal year. 

(B) STATE FAMILY ASSISTANCE GRANT.—The State family 

assistance grant payable to a State for a fiscal year shall 

be the amount that bears the same ratio to the amount 

specified in subparagraph (C) of this paragraph as the 

amount required to be paid to the State under this paragraph for fiscal year 2002 (determined without regard to 

any reduction pursuant to section 409 or 412(a)(1)) bears 

to the total amount required to be paid under this paragraph for fiscal year 2002 (as so determined). 

(C) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated øfor fiscal year 2003 $16,566,542,000 for 

grants under this paragraph¿ for each of fiscal years 2004 

through 2008, $16,566,542,000 for grants under this paragraph. ø2001, and 2002 such sums as are necessary for 

grants under this paragraph. 

95

ø(2) BONUS TO REWARD DECREASE IN ILLEGITIMACY RATIO.— ø(A) IN GENERAL.—Each eligible State shall be entitled 

to receive from the Secretary a grant for each bonus year. 

ø(B) AMOUNT OF GRANT.— ø(i) IN GENERAL.—If, for a bonus year, none of the 

eligible States is Guam, the Virgin Islands, or American Samoa, then the amount of the grant shall be— ø(I) $20,000,000 if there are 5 eligible States; or 

ø(II) $25,000,000 if there are fewer than 5 eligible States. 

ø(ii) AMOUNT IF CERTAIN TERRITORIES ARE ELIGI- BLE.—If, for a bonus year, Guam, the Virgin Islands, 

or American Samoa is an eligible State, then the 

amount of the grant shall be— ø(I) in the case of such a territory, 25 percent of 

the mandatory ceiling amount (as defined in section 1108(c)(4)) with respect to the territory; and 

ø(II) in the case of a State that is not such a 

territory—

ø(aa) if there are 5 eligible States other than such territories, $20,000,000, minus 1⁄5

of the total amount of the grants payable 

under this paragraph to such territories for 

the bonus year; or 

ø(bb) if there are fewer than 5 such eligible States, $25,000,000, or such lesser amount as 

may be necessary to ensure that the total 

amount of grants payable under this paragraph for the bonus year does not exceed 

$100,000,000. 

ø(C) DEFINITIONS.—As used in this paragraph: 

ø(i) ELIGIBLE STATE.—

ø(I) IN GENERAL.—The term ‘‘eligible State’’ means a State that the Secretary determines 

meets the following requirements: 

ø(aa) The State demonstrates that the illegitimacy ratio of the State for the most recent 

2-year period for which such information is 

available decreased as compared to the illegitimacy ratio of the State for the previous 2-

year period, and the magnitude of the decrease for the State for the period is not exceeded by the magnitude of the corresponding 

decrease for 5 or more other States for the period. In the case of a State that is not a territory specified in subparagraph (B), the comparative magnitude of the decrease for the 

State shall be determined without regard to 

the magnitude of the corresponding decrease 

for any such territory. 

ø(bb) The rate of induced pregnancy terminations in the State for the calendar year for 

which the most recent data are available is 

less than the rate of induced pregnancy termiVerDate jul 14 2003 04:27 Oct 08, 2003 Jkt 029010 PO 00000 Frm 00095 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
96

nations in the State for the calendar year 

1995. 104–193, § 103(a). 

ø(II) DISREGARD OF CHANGES IN DATA DUE TO

CHANGED REPORTING METHODS.—In making the 

determination required by subclause (I), the Secretary shall disregard— ø(aa) any difference between the illegitimacy ratio of a State for a calendar year and 

the number of out-of-wedlock births that occurred in a State for fiscal year 1995 which is 

attributable to a change in State methods of 

reporting data used to calculate the illegitimacy ratio; and 

ø(bb) any difference between the rate of induced pregnancy terminations in a State for a 

calendar year and such rate for calendar year 

1995 which is attributable to a change in 

State methods of reporting data used to calculate such rate. 

ø(ii) BONUS YEAR.—The term ‘‘bonus year’’ means 

calendar years 1999, 2000, 2001, and 2002. 

ø(iii) ILLEGITIMACY RATIO.—The term ‘‘illegitimacy 

ratio’’ means, with respect to a State and a period— ø(I) the number of out-of-wedlock births to 

mothers residing in the State that occurred during 

the period; divided by 

ø(II) the number of births to mothers residing in 

the State that occurred during the period. 

ø(D) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated for fiscal years 1999 through 2002, such 

sums as are necessary for grants under this paragraph.¿

(2) HEALTHY MARRIAGE PROMOTION GRANTS.— (A) AUTHORITY.—

(i) IN GENERAL.—The Secretary shall award competitive grants to States, territories, and Indian tribes and 

tribal organizations for not more than 50 percent of the 

cost of developing and implementing innovative programs to promote and support healthy 2-parent married families. 

(ii) USE OF OTHER TANF FUNDS.—A State or Indian 

tribe with an approved tribal family assistance plan 

may use funds provided under other grants made 

under this part for all or part of the expenditures incurred for the remainder of the costs described in 

clause (i). In the case of a State, any such funds expended shall not be considered qualified State expenditures for purposes of section 409(a)(7). 

(B) HEALTHY MARRIAGE PROMOTION ACTIVITIES.—Funds 

provided under subparagraph (A) 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. 

97

(ii) Education in high schools on the value of marriage, relationship skills, and budgeting. 

(iii) Marriage education, marriage skills, and relationship skills programs, that may include parenting 

skills, financial management, conflict resolution, and 

job and career advancement, for non-married pregnant 

women, non-married expectant fathers, and non-married recent parents. 

(iv) Pre-marital education and marriage skills training for engaged couples and for couples or individuals 

interested in marriage. 

(v) Marriage enhancement and marriage skills training programs for married couples. 

(vi) Divorce reduction programs that teach relationship skills. 

(vii) Marriage mentoring programs which use married couples as role models and mentors. 

(viii) Programs to reduce the disincentives to marriage in means-tested aid programs, if offered in conjunction with any activity described in this subparagraph. 

(C) VOLUNTARY PARTICIPATION.—Participation in programs or activities described in any of clauses (iii) through 

(vii) shall be voluntary. 

(D) GENERAL RULES GOVERNING USE OF FUNDS.—The 

rules of section 404, other than subsection (b) of that section, shall not apply to a grant made under this paragraph. 

(E) REQUIREMENTS FOR RECEIPT OF FUNDS.—A State, territory, or Indian tribe or tribal organization may not be 

awarded a grant under this paragraph unless the State, 

territory, indian tribe or tribal organization, as a condition 

of receiving funds under such a grant—

(i) consults with experts in domestic violence or with 

relevant community domestic violence coalitions in developing such programs or activities; and 

(ii) describes in the application for a grant under 

this paragraph—

(I) how the programs or activities proposed to be 

conducted will address, as appropriate, issues of 

domestic violence; and 

(II) what the State, territory, or Indian tribe or 

tribal organization will do, to the extent relevant, 

to ensure that participation in such programs or 

activities is voluntary, and to inform potential participants that their involvement is voluntary. 

(F) APPROPRIATION.—

(i) IN GENERAL.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there 

are appropriated for each of fiscal years 2004 through 

2008, $100,000,000 for grants under this paragraph. 

(ii) EXTENDED AVAILABILITY OF FUNDS.—

(I) IN GENERAL.—Funds appropriated under 

clause (i) for each of fiscal years 2004 through 

98

2008 shall remain available to the Secretary until 

expended. 

(II) AUTHORITY FOR GRANT RECIPIENTS.—A 

State, territory, or Indian tribe or tribal organization may use funds made available under a grant 

awarded under this paragraph without fiscal year 

limitation pursuant to the terms of the grant.

* * * * * * *

(H) REAUTHORIZATION.—Notwithstanding any other provision of this paragraph—

(i) any State that was a qualifying State under this 

paragraph for fiscal year 2001 or any prior fiscal year 

shall be entitled to receive from the Secretary for each 

of fiscal years ø2002 and 2003¿ 2004 through 2007 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 ‘‘ø2003¿

2007’’ were substituted for ‘‘2001’’; and 

(iii) out of any money in the Treasury of the United 

States not otherwise appropriated, there are appropriated for each of fiscal years ø2002 and 2003¿ 2004 

through 2007 such sums as are necessary for grants 

under this subparagraph.

ø(4) BONUS TO REWARD HIGH PERFORMANCE STATES.—

ø(A) IN GENERAL.—The Secretary shall make a grant 

pursuant to this paragraph to each State for each bonus 

year for which the State is a high performing State. 

ø(B) AMOUNT OF GRANT.—

ø(i) IN GENERAL.—Subject to clause (ii) of this subparagraph, the Secretary shall determine the amount 

of the grant payable under this paragraph to a high 

performing State for a bonus year, which shall be 

based on the score assigned to the State under subparagraph (D)(i) for the fiscal year that immediately 

precedes the bonus year. 

ø(ii) LIMITATION.—The amount payable to a State 

under this paragraph for a bonus year shall not exceed 

5 percent of the State family assistance grant. 

ø(C) FORMULA FOR MEASURING STATE PERFORMANCE.—

Not after the date of the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 

1996 4, 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). 

ø(D) SCORING OF STATE PERFORMANCE; SETTING OF PERFORMANCE THRESHOLDS.—For each bonus year, the Secretary shall—

99

ø(i) use the formula developed under subparagraph 

(C) to assign a score to each eligible State for the fiscal 

year that immediately precedes the bonus year; and 

ø(ii) prescribe a performance threshold in such a 

manner so as to ensure that— ø(I) the average annual total amount of grants 

to be made under this paragraph for each bonus 

year equals $200,000,000; and 

ø(II) the total amount of grants to be made 

under this paragraph for all bonus years equals 

$1,000,000,000. 

ø(E) DEFINITIONS.—As used in this paragraph: 

ø(i) BONUS YEAR.—The term ‘‘bonus year’’ means fiscal years 1999, 2000, 2001, 2002, and 2003. 

ø(ii) HIGH PERFORMING STATE.—The term ‘‘high performing State’’ means, with respect to a bonus year, 

an eligible State whose score assigned pursuant to 

subparagraph (D)(i) for the fiscal year immediately 

preceding the bonus year equals or exceeds the performance threshold prescribed under subparagraph 

(D)(ii) for such preceding fiscal year. 

ø(F) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated for fiscal years 1999 through 2003 

$1,000,000,000 for grants under this paragraph.¿

(4) BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.— (A) IN GENERAL.—The Secretary shall make a grant pursuant to this paragraph to each State for each bonus year 

for which the State is an employment achievement State. 

(B) AMOUNT OF GRANT.— (i) IN GENERAL.—Subject to clause (ii), the Secretary 

shall determine the amount of the grant payable under 

this paragraph to an employment achievement State 

for a bonus year, which shall be based on the performance of the State as determined under subparagraph 

(D)(i) for the fiscal year that immediately precedes the 

bonus year. 

(ii) LIMITATION.—The amount payable to a State 

under this paragraph for a bonus year shall not exceed 

5 percent of the State family assistance grant. 

(C) FORMULA FOR MEASURING STATE PERFORMANCE.—

(i) IN GENERAL.—Subject to clause (ii), not later than 

October 1, 2004, the Secretary, in consultation with the 

States, shall develop a formula for measuring State 

performance in operating the State program funded 

under this part so as to achieve the goals of employment entry, job retention, increased earnings from employment, and workplace attachment and advancement 

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 YEARS 2004 AND 2005.— For the purposes of awarding a bonus under this paragraph for bonus year 2004 or 2005, the Secretary may 

100

measure the performance of a State in fiscal year 2003 

or 2004 (as the case may be) using the job entry rate, 

job retention rate, and earnings gain rate components 

of the formula developed under section 403(a)(4)(C) as 

in effect immediately before the effective date of this 

paragraph. 

(D) DETERMINATION OF STATE PERFORMANCE.—For each 

bonus year, the Secretary shall— (i) use the formula developed under subparagraph 

(C) to determine the performance of each eligible State 

for the fiscal year that precedes the bonus year; and 

(ii) prescribe performance standards in such a manner so as to ensure that— (I) the average annual total amount of grants to 

be made under this paragraph for 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 

$600,000,000. 

(E) DEFINITIONS.—In this paragraph: 

(i) BONUS YEAR.—The term ‘‘bonus year’’ means each 

of fiscal years 2004 through 2009. 

(ii) EMPLOYMENT ACHIEVEMENT STATE.—The term ‘‘employment achievement State’’ means, with respect to 

a bonus year, an eligible State whose performance determined pursuant to subparagraph (D)(i) for the fiscal 

year preceding the bonus year equals or exceeds the 

performance standards prescribed under subparagraph 

(D)(ii) for such preceding fiscal year. 

(F) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there are 

appropriated for the period of fiscal years 2004 through 

2009, $600,000,000 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) ENTITLEMENT.—A State shall be entitled to receive from the Secretary of Labor a grant for each fiscal year specified in subparagraph (H) of this paragraph for which the State is a welfare-to-work State, 

in an amount that does not exceed the lesser of—

* * * * * * * 

(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) The State has submitted to the Secretary of 

Labor and the Secretary of Health and Human 

101

Services (in the form of an addendum to the State 

plan submitted under section 402) a plan which—

* * * * * * * 

(III) The State has agreed to negotiate in good 

faith with the Secretary of Health and Human 

Services with respect to the substance and funding of any evaluation under section ø413(j)¿

413(i), and to cooperate with the conduct of any 

such evaluation. 

* * * * * * *

(F) FUNDING FOR EVALUATIONS OF WELFARE-TO-WORK

PROGRAMS.—0.6 percent $9,000,000 of the amount specified 

in subparagraph (H) for fiscal year 1998 and of the amount 

so specified for fiscal year 1999 shall be reserved for use 

by the Secretary to carry out section ø413(j)¿ 413(i). 

(G) FUNDING FOR EVALUATION OF ABSTINENCE EDUCATION PROGRAMS.—

(i) IN GENERAL.—0.2 percent $3,000,000 of the 

amount specified in subparagraph (H) for fiscal year 

1998 and of the amount so specified for fiscal year 

1999 shall be reserved for use by the Secretary to 

evaluate programs under section 510, directly or 

through grants, contracts, or interagency agreements. 

(ii) AUTHORITY TO USE FUNDS FOR EVALUATIONS OF

WELFARE-TO-WORK PROGRAMS.—Any such amount not 

required for such evaluations shall be available for use 

by the Secretary to carry out section ø413(j)¿ 413(i). 

* * * * * * *

(6) GRANTS TO CAPITALIZE AND DEVELOP SUSTAINABLE SOCIAL

SERVICES.—

(A) AUTHORITY TO AWARD GRANTS.—The Secretary may 

award grants to entities for the purpose of capitalizing and 

developing the role of sustainable social services that are 

critical to the success of moving recipients of assistance 

under a State program funded under this part to work. 

(B) APPLICATION.—

(i) IN GENERAL.—An entity desiring a grant under 

this paragraph shall submit an application to the Secretary, at such time, in such manner, and, subject to 

clause (ii), containing such information as the Secretary may require. 

(ii) STRATEGY FOR GENERATION OF REVENUE.—An 

application for a grant under this paragraph shall include a description of the capitalization strategy that 

the entity intends to follow to develop a program that 

generates its own source of on-going revenue while assisting recipients of assistance under a State program 

funded under this part. 

(C) USE OF FUNDS.—

(i) IN GENERAL.—Funds made available under a 

grant made under this paragraph may be used for 

102

the acquisition, construction, or renovation of facilities or buildings. 

(ii) GENERAL RULES GOVERNING USE OF

FUNDS.—The rules of section 404, other than subsection (b) of that section, shall not apply to a 

grant made under this paragraph. 

(D) EVALUATION AND REPORT.—The Secretary shall, by 

grant, contract, or interagency agreement, conduct an evaluation of the programs developed with grants awarded 

under this paragraph and shall submit a report to Congress on the results of such evaluation. 

(E) AUTHORIZATION OF APPROPRIATIONS.—Out of any 

money in the Treasury of the United States not otherwise 

appropriated, there is appropriated to the Secretary for the 

purpose of carrying out this paragraph, $40,000,000 for 

each of fiscal years 2004 through 2008. 

(7) GRANTS FOR LOW-INCOME CAR OWNERSHIP PROGRAMS.—

(A) PURPOSES.—The purposes of this paragraph are to—

(i) assist low-income families with children obtain 

dependable, affordable automobiles to improve their 

employment opportunities and access to training; and 

(ii) provide incentives to States, Indian tribes, localities, and nonprofit entities to develop and administer 

programs that provide assistance with automobile ownership for low-income families. 

(B) DEFINITIONS.—In this paragraph: 

(i) LOCALITY.—The term ‘‘locality’’ means a municipality that does not administer a State program funded under this part.

(ii) LOW-INCOME FAMILY WITH CHILDREN.—The term 

‘‘low-income family with children’’ means a household 

that is eligible for benefits or services funded under the 

State program funded under this part or under a program funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)). 

(iii) NONPROFIT ENTITY.—The term ‘‘nonprofit entity’’

means a school, local agency, organization, or institution owned and operated by 1 or more nonprofit corporations or associations, no part of the net earnings of 

which inures, or may lawfully inure, to the benefit of 

any private shareholder or individual. 

(C) AUTHORITY TO AWARD GRANTS.—The Secretary may 

award grants to States, counties, localities, Indian tribes, 

and nonprofit entities to promote improving access to dependable, affordable automobiles by low-income families 

with children. 

(D) GRANT APPROVAL CRITERIA.—The Secretary shall establish criteria for approval of an application for a grant 

under this paragraph that include consideration of—

(i) the extent to which the proposal, if funded, is likely to improve access to training and employment opportunities and child care services by low-income families 

with children by means of car ownership; 

103

(ii) the level of innovation in the applicant’s grant 

proposal; and 

(iii) any partnerships between the public and private 

sector in the applicant’s grant proposal. 

(E) USE OF FUNDS.— (i) IN GENERAL.—A grant awarded under this paragraph shall be used to administer programs that assist 

low-income families with children with dependable 

automobile ownership, and maintenance of, or insurance for, the purchased automobile. 

(ii) SUPPLEMENT NOT SUPPLANT.—Funds provided to 

a State, Indian tribe, county, or locality under a grant 

awarded under this paragraph shall be used to supplement and not supplant other State, county, or local 

public funds expended for car ownership programs. 

(iii) GENERAL RULES GOVERNING USE OF FUNDS.— The rules of section 404, other than subsection (b) of 

that section, shall not apply to a grant made under 

this paragraph. 

(F) APPLICATION.—Each applicant desiring a grant under 

this paragraph shall submit an application to the Secretary 

at such time, in such manner, and accompanied by such information as the Secretary may reasonably require. 

(G) REVERSION OF FUNDS.—Any funds not expended by a 

grantee within 3 years after the date the grant is awarded 

under this paragraph shall be available for redistribution 

among other grantees in such manner and amount as the 

Secretary may determine, unless the Secretary extends by 

regulation the time period to expend such funds. 

(H) LIMITATION ON ADMINISTRATIVE COSTS OF THE SEC- RETARY.—Not more than an amount equal to 5 percent of 

the funds appropriated to make grants under this paragraph for a fiscal year shall be expended for administrative 

costs of the Secretary in carrying out this paragraph. 

(I) EVALUATION.—The Secretary shall, by grant, contract, 

or interagency agreement, conduct an evaluation of the programs administered with grants awarded under this paragraph. 

(J) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Secretary to make grants 

under this paragraph, $25,000,000 for each of fiscal years 

2004 through 2008.

(b) CONTINGENCY FUND.—

ø(1) ESTABLISHMENT.—There is hereby established in the 

Treasury of the United States a fund which shall be known as 

the ‘‘Contingency Fund for State Welfare Programs’’ (in this 

section referred to as the ‘‘Fund’’). 

ø(2) DEPOSITS INTO FUND.—Out of any money in the Treasury of the United States not otherwise appropriated, there are 

appropriated for fiscal years 1997, 1998, 1999, 2000, 2001, and 

2002 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). 

(6)(C)(ii)’’, effective November 19, 1997. 

104

ø(3) GRANTS.— ø(A) PROVISIONAL PAYMENTS.—If an eligible State submits to the Secretary a request for funds under this paragraph during an eligible month, the Secretary shall, subject to this paragraph, pay to the State, from amounts appropriated pursuant to paragraph (2), an amount equal to 

the amount of funds so requested. 

ø(B) PAYMENT PRIORITY.—The Secretary shall make payments under subparagraph (A) in the order in which the 

Secretary receives requests for such payments. 

ø(C) LIMITATIONS.— ø(i) MONTHLY PAYMENT TO A STATE.—The total 

amount paid to a single State under subparagraph (A) 

during a month shall not exceed 1⁄12 of 20 percent of 

the State family assistance grant. 

ø(ii) PAYMENTS TO ALL STATES.—The total amount 

paid to all States under subparagraph (A) during fiscal 

years 1997 through 200214 shall not exceed the total 

amount appropriated pursuant to paragraph (2).¿

(1) CONTINGENCY FUND GRANTS.— (A) PAYMENTS.—Subject to subparagraph (C), and out of 

funds appropriated under subparagraph (E), each State 

shall receive a contingency fund grant for each eligible 

month in which the State is a needy State under paragraph 

(3). 

(B) MONTHLY CONTINGENCY FUND GRANT AMOUNT.—For 

each eligible month in which a State is a needy State, the 

State shall receive a contingency fund grant equal to the 

product of— (i) the applicable percentage (as defined under subparagraph (D)(i)) of the applicable benefit level (as defined in subparagraph (D)(ii)); and 

(ii) the amount by which the total number of families 

that received assistance under the State program funded under this part in the most recently concluded 3-

month period for which data are available from the 

State exceeds a 5 percent increase in the number of 

such families in the corresponding 3-month period in 

either of the 2 most recent preceding fiscal years and 

that was due, in large measure, to economic conditions 

rather than State policy changes. 

(C) LIMITATION.—The total amount paid to a single State 

under subparagraph (A) during a fiscal year shall not exceed the amount equal to 10 percent of the State family assistance grant (as defined under subparagraph (B) of subsection (a)(1)). 

(D) DEFINITIONS.—In this paragraph: 

(i) APPLICABLE PERCENTAGE.—The term ‘‘applicable 

percentage’’ means the Federal medical assistance percentage for the State (as defined in section 1905(b)). 

(ii) APPLICABLE BENEFIT LEVEL.—

(I) IN GENERAL.—Subject to subclause (II), the 

term ‘‘applicable benefit level’’ means the amount 

equal to the maximum cash assistance grant for a 

105

family consisting of 3 individuals under the State 

program funded under this part. 

(II) RULE FOR STATES WITH MORE THAN 1 MAX- IMUM LEVEL.—In the case of a State that has more 

than 1 maximum cash assistance grant level for 

families consisting of 3 individuals, the basic assistance cost shall be the amount equal to the maximum cash assistance grant level applicable to the 

largest number of families consisting of 3 individuals receiving assistance under the State program 

funded under this part. 

(E) APPROPRIATION.—Out of any money in the Treasury 

of the United States not otherwise appropriated, there is 

appropriated for the period of fiscal years 2004 through 

2008, such sums as are necessary for making contingency 

fund grants under this subsection in a total amount not to 

exceed $2,000,000,000.;

ø(4)¿ (2) ELIGIBLE MONTH.—As used in paragraph ø(3)(A)(1), 

the term ‘‘eligible month’’ means, with respect to a State, a 

month in the ø2-month period that begins with any¿ fiscal year 

quarter that includes a month for which the State is a needy 

State. 

ø(5) NEEDY STATE.—For purposes of paragraph (4), a State 

is a needy State for a month if— ø(A) the average rate of— ø(i) total unemployment in such State (seasonally 

adjusted) for the period consisting of the most recent 

3 months for which data for all States are published 

equals or exceeds 6.5 percent; and 

ø(ii) total unemployment in such State (seasonally 

adjusted) for the 3-month period equals or exceeds 110 

percent of such average rate for either (or both) of the 

corresponding 3-month periods ending in the 2 preceding calendar years; or 

ø(B) as determined by the Secretary of Agriculture (in 

the discretion of the Secretary of Agriculture), the monthly 

average number of individuals (as of the last day of each 

month) participating in the food stamp program in the 

State in the then most recently concluded 3-month period 

for which data are available exceeds by not less than 10 

percent the less or of—

ø(i) the monthly average number of individuals (as 

of the last day of each month) in the State that would 

have participated in the food stamp program in the 

corresponding 3-month period in fiscal year 1994 if the 

amendments made by titles IV and VIII of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had been in effect throughout fiscal 

year 1994; or 

ø(ii) the monthly average number of individuals (as 

of the last day of each month) in the State that would 

have participated in the food stamp program in the 

corresponding 3-month period in fiscal year 1995 if the 

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106

sonal Responsibility and Work Opportunity Reconciliation Act of 1996 had been in effect throughout fiscal 

year 1995. 

ø(6) ANNUAL RECONCILIATION.— ø(A) IN GENERAL.—Notwithstanding paragraph (3), if the 

Secretary makes a payment to a State under this subsection in a fiscal year, then the State shall remit to the 

Secretary, within 1 year after the end of the first subsequent period of 3 consecutive months for which the State

is not a needy State, an amount equal to the amount (if 

any) by which— ø(i) the total amount paid to the State under paragraph (3) of this subsection in the fiscal year; exceeds 

ø(ii) the product of— ø(I) the Federal medical assistance percentage 

for the State (as defined in section 1905(b), as 

such section was in effect on September 30, 1995); 

ø(II) the State’s reimbursable expenditures for 

the fiscal year; and 

ø(III) 1⁄12 times the number of months during 

the fiscal year for which the Secretary made a 

payment to the State under such paragraph (3). 

ø(B) DEFINITIONS.—As used in subparagraph (A); 

ø(i) REIMBURSABLE EXPENDITURES.—The term ‘‘reimbursable expenditures’’ means, with respect to a State 

and a fiscal year, the amount (if any) by which— ø(I) countable State expenditures for the fiscal 

year; exceeds 

ø(II) historic State expenditures (as defined in 

section 409(a)(7)(B)(iii)), excluding any amount expended by the State for child care under subsection (g) or (i) of section 402 (as in effect during 

fiscal year 1994) for fiscal year 1994. 

ø(ii) COUNTABLE STATE EXPENDITURES.—The term 

‘‘countable expenditures’’ means, with respect to a 

State and a fiscal year—

ø(I) the qualified State expenditures (as defined 

in section 409(a)(7)(B)(i) (other than the expenditures described in subclause (I)(bb) of such section)) under the State program funded under this 

part for the fiscal year; plus 

ø(II) any amount paid to the State under paragraph (3) during the fiscal year that is expended 

by the State under the State program funded 

under this part. 

ø(C) ADJUSTMENT OF STATE REMITTANCES.—

ø(i) IN GENERAL.—The amount otherwise required 

by subparagraph (A) to be remitted by a State for a 

fiscal year shall be increased by the lesser of— ø(I) the total adjustment for the fiscal year, 

multiplied by the adjustment percentage for the 

State for the fiscal year; or 

ø(II) the unadjusted net payment to the State 

for the fiscal year. 

107

ø(ii) TOTAL ADJUSTMENT.—As used in clause (i), the 

term ‘‘total adjustment’’ means— ø(I) in the case of fiscal year 1998, $2,000,000; 

ø(II) in the case of fiscal year 1999, $9,000,000; 

ø(III) in the case of fiscal year 2001, $13,000,000. 

ø(iii) ADJUSTMENT PERCENTAGE.—As used in clause 

(i), the term ‘‘adjustment percentage’’ means, with respect to a State and a fiscal year— ø(I) the unadjusted net payment to the State for 

the fiscal year; divided by 

ø(II) the sum of the unadjusted net payments to 

all States for the fiscal year. 

(iv) UNADJUSTED NET PAYMENT.—As used in this 

subparagraph, the term, ‘‘unadjusted net payment’’ means with respect to a State and a fiscal year— ø(I) the total amount paid to the State under 

paragraph (3) in the fiscal year; minus 

ø(II) the amount that, in the absence of this 

subparagraph, would be required by subparagraph 

(A) or by section 409(a)(10) to be remitted by the 

State in respect of the payment.¿

(3) INITIAL DETERMINATION OF WHETHER A STATE QUALIFIES

AS A NEEDY STATE.— (A) IN GENERAL.—For purposes of paragraph (1), subject 

to paragraph (4), a State will be initially determined to be 

a needy State for a month if, as determined by the Secretary—

(i) the monthly average of the unduplicated number 

of families that received assistance under the State program funded under this part in the most recently concluded 3-month period for which data are available 

from the State increased by at least 5 percent over the 

number of such families that received such benefits in 

the corresponding 3-month period in either of the 2 

most recent preceding fiscal years; 

(ii) the increase in the number of such families for 

the State was due, in large measure, to economic conditions rather than State policy changes; and 

(iii) the State satisfies any of the following criteria: 

(I) The average rate of total unemployment in 

the State (seasonally adjusted) for the period consisting of the most recent 3 months for which data 

are available has increased by the lesser of 1.5 percentage points or by 50 percent over the corresponding 3-month period in either of the 2 most 

recent preceding fiscal years. 

(II) The average insured unemployment rate for 

the most recent 13 weeks for which data are available has increased by 1 percentage point over the 

corresponding 13-week period in either of the 2 

most recent preceding fiscal years. 

(III) As determined by the Secretary of Agriculture, the monthly average number of households 

108

(as of the last day of each month) that participated 

in the food stamp program in the State in the then 

most recently concluded 3-month period for which 

data are available exceeds by at least 15 percent 

the monthly average number of households (as of 

the last day of each month) in the State that participated in the food stamp program in the corresponding 3-month period in either of the 2 most 

recent preceding fiscal years, but only if the Secretary and the Secretary of Agriculture concur in 

the determination that the State’s increased caseload was due, in large measure, to economic conditions rather than changes in Federal or State policies related to the food stamp program. 

(B) DURATION.—A State that qualifies as a needy State— (i) under subclause (I) or (II) of subparagraph 

(A)(iii), shall be considered a needy State until the 

State’s average rate of total unemployment or the 

State’s insured unemployment rate, respectively, falls 

below the level attained in the applicable period that 

was first used to determine that the State qualified as 

a needy State under that subparagraph (and in the 

case of the insured unemployment rate, without regard 

to any declines in the rate that are the result of seasonal variation); and 

(ii) under subclause (III) of subparagraph (A)(iii), 

shall be considered a needy State so long as the State 

meets the criteria for being considered a needy State 

under that subparagraph. 

(4) EXCEPTIONS.— (A) UNEXPENDED BALANCES.— (i) IN GENERAL.—Notwithstanding paragraph (3), a 

State that has unexpended TANF balances in an 

amount that exceeds 30 percent of the total amount of 

grants received by the State under subsection (a) for 

the most recently completed fiscal year (other than welfare-to-work grants made under paragraph (5) of that 

subsection prior to fiscal year 2000), shall not be a 

needy State under this subsection. 

(ii) DEFINITION OF UNEXPENDED TANF BALANCES.—In 

clause (i), the term ‘‘unexpended TANF balances’’

means the lessor of—

(I) the total amount of grants made to the State 

(regardless of the fiscal year in which such funds 

were awarded) under subsection (a) (other than 

welfare-to-work grants made under paragraph (5) 

of that subsection prior to fiscal year 2000) but not 

yet expended as of the end of the fiscal year preceding the fiscal year for which the State would, in 

the absence of this subparagraph, be considered a 

needy State under this subsection; and 

(II) the total amount of grants made to the State 

under subsection (a) (other than welfare-to-work 

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109

section prior to fiscal year 2000) but not yet expended as of the end of such preceding fiscal year, 

plus the difference between—

(aa) the pro rata share of the current fiscal 

year grant to be made under subsection (a) to 

the State; and 

(bb) current year expenditures of the total 

amount of grants made to the State under subsection (a) (regardless of the fiscal year in 

which such funds were awarded) (other than 

such welfare-to-work grants) through the end 

of the most recent calendar quarter. 

(B) FAILURE TO SATISFY MAINTENANCE OF EFFORT REQUIREMENT.—Notwithstanding paragraph (3), a State that 

fails to satisfy the requirement of section 409(a)(7) with respect to a fiscal year shall not be a needy State under this 

subsection for that fiscal year.

ø(7)¿ (5) OTHER TERMS DEFINED.—As used in this subsection: 

(A) STATE.—The term ‘‘State’’ means each of the 50 

States of the United States and the District of Columbia. 

(B) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury. 

ø(8)¿ (6) ANNUAL REPORTS.—The Secretary shall annually report to the Congress øon the status of the Fund¿ on the States 

that qualified for contingency funds and the amount of funding 

awarded under this subsection. 

* * * * * * *

SEC. 404. (a) GENERAL RULES.—Subject to this part, a State to 

which a grant is made under section 403 may use the grant—

(1) in any manner that is reasonably calculated to accomplish the purpose of this part, including to provide low income 

households with øassistance¿ aid in meeting home heating and 

cooling costs; or 

(2) in any manner that the State was authorized to use 

amounts received under part A or F, as such parts were in effect on September 30, 1995, or (as the option of the State) August 21, 1996. 

(b) LIMITATION ON USE OF GRANT FOR ADMINISTRATIVE PUR- POSES.—

(1) LIMITATION.—A State to which a grant is made under 

section 403 shall not expend more than 15 percent of the grant 

for administrative purposes. 

(2) EXCEPTION.—Paragraph (1) shall not apply to the use of 

a grant for information technology and computerization needed 

for tracking or monitoring required by or under this part. 

ø(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER

RULES OF FORMER STATE.—A State operating a program funded 

under this part may apply to a family the rules (including benefit 

amounts) of the program funded under this part of another State 

if the family has moved to the State from the other State and has 

resided in the State for less than 12 months.¿

(d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PURPOSES.—

110

(1) IN GENERAL.—Subject to paragraph (2), a State may use 

not more than 30 percent of the amount of any grant made to 

the State under section 403(a) for a fiscal year to carry out a 

State program pursuant to any or all of the following provisions of law: 

(A) Title XX of this Act. 

(B) The Child Care and Development Block Grant Act of 

1990.15

ø(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PRO- GRAMS.—

ø(A) IN GENERAL.—A State may use not more than the 

applicable percent of the amount of any grant made to the 

State under section 403(a) for a fiscal year to carry out 

State programs pursuant to title XX. 

ø(B) APPLICABLE PERCENT.—For purposes of subparagraph (A), the applicable percent is 4.25 percent in the 

case of fiscal year 2001 and each succeeding fiscal year.¿

(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX PROGRAMS.—A State may use not more than 10 percent of the 

amount of any grant made to the State under section 403(a) for 

a fiscal year to carry out State programs pursuant to title XX. 

* * * * * * *

ø(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS FOR ASSIST- ANCE.—A State or tribe may reserve amounts paid to the State or 

tribe under this part for any fiscal year for the purpose of providing, without fiscal year limitation, assistance under the State or 

tribal program funded under this part.¿

(e) AUTHORITY TO CARRYOVER OR RESERVE CERTAIN AMOUNTS

FOR BENEFITS OR SERVICES OR FOR FUTURE CONTINGENCIES.— (1) CARRYOVER.—A State or 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 or tribe shall include in its report under section 411(a) the amount so designated.

(f) AUTHORITY TO OPERATE EMPLOYMENT PLACEMENT PROGRAM.—A State to whcih a grant is made under section 403 may 

use the grant to make payments (or provide job placement vouchers) to State-approved public and private job placement agencies 

that provide employment placement services to individuals who receive øassistance¿ benefits or services under the State program 

funded under this part. 

* * * * * * *

(l) AUTHORITY TO ESTABLISH UNDERGRADUATE POST-SECONDARY

OR VOCATIONAL EDUCATIONAL PROGRAM.—

111

(1) IN GENERAL.—Subject to the succeeding paragraphs of 

this subsection, a State to which a grant is made under section 

403 may use the grant to establish a program under which an 

eligible participant (as defined in paragraph (5)) may be provided support services described in paragraph (7) and, subject 

to paragraph (8), may have hours of participation in such program counted as being engaged in work for purposes of determining monthly participation rates under section 

407(b)(1)(B)(i). 

(2) STATE PLAN REQUIREMENT.—In order to establish a program under this subsection, a State shall describe (in an addendum to the State plan submitted under section 402) the applicable eligibility criteria that is designed to limit participation 

in the program to only those individuals— (A) whose past earnings indicate that the individuals 

cannot qualify for employment that pays enough to allow 

them to obtain self-sufficiency (as determined by the State); 

and 

(B) for whom enrollment in the program will prepare the 

individuals for higher-paying occupations in demand in the 

State. 

(3) LIMITATION ON ENROLLMENT.—The number of eligible 

participants in a program established under this subsection 

may not exceed 10 percent of the total number of families receiving assistance under the State program funded under this part. 

(4) NO FEDERAL FUNDS FOR TUITION.—A State may not use 

Federal funds provided under a grant made under section 403 

to pay tuition for an eligible participant.

(5) DEFINITION OF ELIGIBLE PARTICIPANT.—In this subsection, 

the term ‘‘eligible participant’’ means an individual who receives assistance under the State program funded under this 

part and satisfies the following requirements: 

(A) The individual is enrolled in a postsecondary 2- or 4-

year degree program or in a vocational educational training program. 

(B) During the period the individual participates in the 

program, the individual maintains satisfactory academic 

progress, as defined by the institution operating the undergraduate post-secondary or vocational educational program 

in which the individual is enrolled. 

(6) REQUIRED TIME PERIODS FOR COMPLETION OF DEGREE OR

VOCATIONAL EDUCATIONAL TRAINING PROGRAM.—

(A) IN GENERAL.—Subject to subparagraph (B), an eligible participant participating in a program established 

under this subsection shall be required to complete the requirements of a degree or vocational educational training 

program within the normal time frame for full time students seeking the particular degree or completing the vocational educational training program. 

(B) EXCEPTION.—For good cause, the State may allow an 

eligible participant to complete their degree requirements or 

vocational educational training program within a period 

not to exceed 11⁄2 times the normal timeframe established 

under subparagraph (A) (unless further modification is reVerDate jul 14 2003 01:51 Oct 08, 2003 Jkt 029010 PO 00000 Frm 00111 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
112

quired by the Americans with Disabilities Act of 1990 (42 

U.S.C. 12101 et seq.), or section 504 of the Rehabilitation 

Act of 1973 (29 U.S.C. 794)) and may modify the requirements applicable to an individual participating in the program. For purposes of the preceding sentence, good cause 

includes the case of an eligible participant with 1 or more 

significant barriers to normal participation, as determined 

by the State, such as the need to care for a family member 

with special needs. 

(7) SUPPORT SERVICES DESCRIBED.—For purposes of paragraph (1), the support services described in this paragraph include any or all of the following during the period the eligible 

participant is in the program established under this subsection: 

(A) Child care. 

(B) Transportation services. 

(C) Payment for books and supplies. 

(D) Other services provided under policies determined by 

the State to ensure coordination and lack of duplication 

with other programs available to provide support services. 

(8) RULES FOR INCLUSION IN MONTHLY WORK PARTICIPATION

RATES.—

(A) FAMILIES COUNTED AS PARTICIPATING IF THEY MEET

THE REQUIREMENTS OF SUBPARAGRAPHS (B) OR (C).—For 

each eligible participant, a State may elect, for purposes of 

determining monthly participation rates under section 

407(b)(1)(B)(i), to include such participant in the determination of such rates in accordance with subparagraph 

(B) or (C). 

(B) FULL OR PARTIAL CREDIT FOR HOURS OF PARTICIPA- TION IN EDUCATIONAL OR RELATED ACTIVITIES.— (i) IN GENERAL.—Subject to clause (iv), an eligible 

participant who participates in educational or related 

activities (as determined by the State) under a program 

established under this subsection shall be given credit 

for the number of hours of such participation to the extent that an adult recipient or minor child head of 

household would be given credit under section 407(c) 

for being engaged in the same number of hours of work 

activities described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of section 407(d). 

(ii) RELATED ACTIVITIES.—For purposes of clause (i), 

related activities shall include—

(I) work activities described in paragraph (1), 

(2), (3), (4), (5), (6), (7), (8), or (12) of section 

407(d); 

(II) work study, practicums, internships, clinical 

placements, laboratory or field work, or such other 

activities as will enhance the eligible participant’s 

employability in the participant’s field of study, as 

determined by the State; or 

(III) subject to clause (iii), study time. 

(iii) LIMITATION ON INCLUSION OF STUDY TIME.—For 

purposes of determining hours per week of participation by an eligible participant under a program estabVerDate jul 14 2003 01:51 Oct 08, 2003 Jkt 029010 PO 00000 Frm 00112 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
113

lished under this subsection, a State may not count 

study time of less than 1 hour for every hour of class 

time or more than 2 hours for every hour of class time. 

(iv) TOTAL NUMBER OF HOURS LIMITED TO BEING

COUNTED AS 1 FAMILY.—In no event may hours per 

week of participation by an eligible participant under 

a program established under this subsection be counted 

as more than 1 family for purposes of determining 

monthly participation rates under section 

407(b)(1)(B)(i). 

(C) FULL CREDIT FOR BEING ENGAGED IN DIRECT WORK

ACTIVITIES FOR CERTAIN HOURS PER WEEK.—

(i) IN GENERAL.—A family that includes an eligible 

participant who, in addition to complying with the 

full-time educational participation requirements of the 

degree or vocational educational training program they 

are enrolled in, participates in an activity described in 

subclause (I), (II), or (III) of subparagraph (B)(ii) for 

not less than the number of hours required per week 

under clause (ii) shall be counted as 1 family. 

(ii) REQUIRED HOURS PER WEEK.—For purposes of 

clause (i), subject to clause (iii), the number of hours 

per week are—

(I) 6 hours per week during the first 12-month 

period that an eligible participant participates in 

a program established under this subsection; 

(II) 8 hours per week during the second 12-

month period of such participation; 

(II) 10 hours per week during the third 12-

month period of such participation; and 

(II) 12 hours per week during the fourth or any 

other succeeding 12-month period of such participation. 

(iii) MODIFICATION OF REQUIREMENTS FOR GOOD

CAUSE.—A State may modify the number of hours per 

week required under clause (ii) for good cause. For purposes of the preceding sentence, good cause includes the 

case of an eligible participant with 1 or more significant barriers to normal participation, as determined by 

the State, such as the need to care for a family member 

with special needs.

* * * * * * *

øFEDERAL LOANS FOR STATE WELFARE PROGRAMS

øSEC. 406. (a) LOAN AUTHORITY.—

ø(1) IN GENERAL.—The Secretary shall make loans to any 

loan-eligible State, for a period to maturity of not more than 

3 years. 

ø(2) LOAN-ELIGIBLE STATE.—As used in paragraph (1), the 

term ‘‘loan-eligible State’’ means a State against which a penalty has not been imposed under section 409(a)(1).

114

ø(b) RATE OF INTEREST.—The Secretary shall charge and collect 

interest on any loan made under this section at a rate equal to the 

current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the period to maturity of the loan. 

ø(c) USE OF LOAN.—A State shall use a loan made to the State 

under this section only for any purpose for which grant amounts 

received by the State under section 403(a) may be used, including—

ø(1) welfare anti-fraud activities, and 

ø(2) the provision of assistance under the State program to 

Indian families that have moved from the service area of an 

Indian tribe with a tribal family assistance plan approved 

under section 412. 

ø(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO A STATE.—The 

cumulative dollar amount of all loans made to a State under this 

section during fiscal years 1997 through 2002 shall not exceed 10 

percent of the State family assistance grant. 

ø(e) LIMITATION ON TOTAL AMOUNT OF OUTSTANDING LOANS.—

The total dollar amount of loans outstanding under this section 

may not exceed $1,700,000,000. 

ø(f) APPROPRIATION.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated 

such sums as may be necessary for the cost of loans under this section.¿

MANDATORY WORK REQUIREMENTS

SEC. 407. ø(a) PARTICIPATION RATE REQUIREMENTS.—

ø(1) ALL FAMILIES.—A State to which a grant is made under 

section 403 for a fiscal year shall achieve the minimum participation rate specified in the following table for the fiscal year 

with respect to all families receiving assistance under the 

State program funded under this part:

øIf the fiscal year is: The minimum participation rate is: 

ø1997 ................................................................................................. 25

ø1998 ................................................................................................. 30

ø1999 ................................................................................................. 35

ø2000 ................................................................................................. 40

ø2001 ................................................................................................. 45

ø2002 or thereafter ........................................................................... 50.

ø(2) 2-PARENT FAMILIES.—A State to which a grant is made 

under section 403 for a fiscal year shall achieve the minimum 

participation rate specified in the following table for the fiscal 

year with respect to 2-parent families receiving assistance 

under the State program funded under this part:

øIf the fiscal year is: The minimum participation rate is: 

ø1997 ................................................................................................. 75

ø1998 ................................................................................................. 75

ø1999 or thereafter ........................................................................... 90.¿

(a) PARTICIPATION RATE REQUIREMENTS.—

(1) IN GENERAL.—A State to which a grant is made under section 403 for a fiscal year shall achieve a minimum participation rate with respect to all families receiving assistance under 

115

the State program funded under this part that is equal to not 

less than—

(A) 50 percent for fiscal year 2004; 

(B) 55 percent for fiscal year 2005; 

(C) 60 percent for fiscal year 2006; 

(D) 65 percent for fiscal year 2007; and 

(E) 70 percent for fiscal year 2008 and each succeeding 

fiscal year. 

(2) LIMITATION ON REDUCTION OF PARTICIPATION RATE

THROUGH APPLICATION OF CREDITS.—Notwithstanding any 

other provision of this part, the net effect of any percentage reduction in the minimum participation rate otherwise required 

under this section with respect to families receiving assistance 

under the State program funded under this part as a result of 

the application of any employment credit, caseload reduction 

credit, or other credit against such rate for a fiscal year, shall 

not exceed—

(A) 40 percentage points, in the case of fiscal year 2004; 

(B) 35 percentage points, in the case of fiscal year 2005; 

(C) 30 percentage points, in the case of fiscal year 2006; 

(D) 25 percentage points, in the case of fiscal year 2007; 

or 

(E) 20 percentage points, in the case of fiscal year 2008 

or any fiscal year thereafter.

(b) CALCULATION OF PARTICIPATION RATES.—

(1) ALL FAMILIES.—

(A) AVERAGE MONTHLY RATE.—For purposes of subsection (a)(1), the participation rate for all families of a 

State for a fiscal year is the average of the participation 

rates for all families of the State for each month in the fiscal year. 

(B) MONTHLY PARTICIPATION RATES.—The participation 

rate of a State for all families of the State for a month, expressed as a percentage, is—

(i) the number of families receiving assistance under 

the State program funded under this part that include 

an adult or a minor child head of household who is engaged in work for the month; divided by 

(ii) the amount by which—

(I) the number of families receiving such assistance during the month that include an adult or a 

minor child head of household receiving such assistance; exceeds 

(II) the number of families receiving such assistance that are subject in such month to a penalty 

described in subsection (e)(1) but have not been 

subject to such penalty for more than 3 months 

within the preceding 12-month period (whether or 

not consecutive). 

ø(2) 2-PARENT FAMILIES.—

ø(A) AVERAGE MONTHLY RATE.—For purposes of subsection (a)(2), the participation rate for 2-parent families of 

a State for a fiscal year is the average of the participation 

116

rates for 2-parent families of the State for each month in 

the fiscal year. 

ø(B) MONTHLY PARTICIPATION RATES.—The participation 

rate of a State for 2-percent families of the State for a 

month shall be calculated by use of the formula set forth 

in paragraph (1)(B), except that in the formula the term 

‘‘number of 2-parent families’’ shall be substituted for the 

term ‘‘number of families’’ each place such latter term appears. 

ø(C) FAMILY WITH A DISABLED PARENT NOT TREATED AS

A 2-PARENT FAMILY.—A family that includes a disabled parent shall not be considered a 2-parent family for purposes 

of subsections (a) and (b) of this section.¿

(2) EMPLOYMENT CREDIT.— (A) IN GENERAL.—Subject to subsection (a)(2), the Secretary shall, by regulation, reduce the minimum participation rate otherwise applicable to a State under this subsection for a fiscal year by the number of percentage points 

in the employment credit for the State for the fiscal year, 

as determined by the Secretary— (i) using information in the National Directory of 

New Hires; 

(ii) with respect to a recipient of assistance or former 

recipient of assistance under the State program funded 

under this part who is placed with an employer whose 

hiring information is not reported to the National Directory of New Hires, using quarterly wage information 

submitted by the State to the Secretary not later than 

such date as the Secretary shall prescribe in regulations; or 

(iii) with respect to families described in subclause 

(II) or (III) of subparagraph (B)(ii), using such other 

data as the Secretary may require in order to determine the employment credit for a State under this 

paragraph. 

(B) CALCULATION OF CREDIT.— (i) IN GENERAL.—The employment credit for a State 

for a fiscal year is an amount equal to the sum of the 

amounts determined under clause (ii), divided by the 

amount determined under clause (iii). 

(ii) NUMERATOR.—For purposes of clause (i), the 

amounts determined under this clause are the following: 

(I) Twice the quarterly average unduplicated 

number of families that include an adult or minor 

child head of household recipient of assistance 

under the State program funded under this part, 

that ceased to receive such assistance for at least 

2 consecutive months following the date of the case 

closure for the family during the applicable period 

(as defined in clause (v)), that did not receive assistance under a separate State-funded program 

during such 2-month period, and that were employed during the calendar quarter immediately 

117

succeeding the quarter in which the assistance 

under the State program funded under this part 

ceased. 

(II) At the option of the State, twice the quarterly 

average number of families that received a nonrecurring short-term benefit under the State program funded under this part during the applicable 

period (as so defined), that were employed during 

the calendar quarter immediately succeeding the 

quarter in which the nonrecurring short-term benefit was so received, and that earned at least 

$1,000 during the applicable period (as so defined). 

(III) At the option of the State, twice the quarterly average number of families that includes an 

adult who is receiving substantial child care or 

transportation assistance (as defined by the Secretary, in consultation with directors of State programs funded under this part, which definition 

shall specify for each type of assistance a threshold 

which is a dollar value or a length of time over 

which the assistance is received, and which takes 

account of large one-time transition payments)) 

during the applicable period (as so defined).

(iii) DENOMINATOR.—For purposes of clause (i), the 

amount determined under this clause is the amount 

equal to the sum of the following: 

(I) The average monthly number of families that 

include an adult or minor child head of household 

who received assistance under the State program 

funded under this part during the applicable period (as defined under clause (v)). 

(II) If the State elected the option under clause 

(ii)(II), twice the quarterly average number of families that received a nonrecurring short-term benefit 

under the State program funded under this part 

during the applicable period (as so defined). 

(III) If the State elected the option under clause 

(ii)(III), twice the quarterly average number of 

families that includes an adult who is receiving 

substantial child care or transportation assistance 

during the applicable period (as so defined). 

(iv) SPECIAL RULE FOR FORMER RECIPIENTS WITH

HIGHER EARNINGS.—In calculating the employment 

credit for a State for a fiscal year, in the case of a family that includes an adult or a minor child head of 

household that is to be included in the amount determined under clause (ii)(I) and that, with respect to the 

quarter in which the family’s earnings was examined 

during the applicable period, earned at least 33 percent 

of the average quarterly earnings in the State (determined on the basis of State unemployment data), the 

family shall be considered to be 1.5 families. 

118

(v) DEFINITION OF APPLICABLE PERIOD.—For purposes of this paragraph, the term ‘applicable period’ means, with respect to a fiscal year, the most recent 4 

quarters for which data are available to the Secretary 

providing information on the work status of— (I) individuals in the quarter after the individuals ceased receiving assistance under the State 

program funded under this part; 

(II) at State option, individuals in the quarter 

after the individuals received a short-term, nonrecurring benefit; and 

(III) at State option, individuals in the quarter 

after the individuals ceased receiving substantial 

child care or transportation assistance. 

(C) NOTIFICATION TO STATE.—Not later than August 30 

of each fiscal year, the Secretary shall— (i) determine, on the basis of the applicable period, 

the amount of the employment credit that will be used 

in determining the minimum participation rate for a 

State under subsection (a) for the immediately succeeding fiscal year; and 

(ii) notify each State conducting a State program 

funded under this part of the amount of the employment credit for such program for the succeeding fiscal 

year.

ø(3) PRO RATA REDUCTION OF PARTICIPATION RATE DUE TO

CASELOAD REDUCTIONS NOT REQUIRED BY FEDERAL LAW AND

NOT RESULTING FROM CHANGES IN STATE ELIGIBILITY CRI- TERIA.—

ø(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—

ø(i) the average monthly number of families receiving assistance during the immediately preceding fiscal 

year under the State program funded under this part 

is less than 

ø(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. 

øThe minimum participation rate shall not be reduced to 

the extent that the Secretary determines that the reduction in the number of families receiving such assistance is 

required by Federal law. 

ø(B) ELIGIBILITY CHANGES NOT COUNTED.—The regulations required by subparagraph (A) shall not take into account families that are diverted from a State program 

funded under this part as a result of differences in eligibility criteria under a State program funded under this 

part and eligibility criteria under the State program operated under the State plan approved under part A (as such 

plan and such part were in effect on September 30, 1995). 

119

Such regulations shall place the burden on the Secretary 

to prove that such families were diverted as a direct result 

of differences in such eligibility criteria.¿

ø(4)¿ (3) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING

ASSISTANCE UNDER A TRIBAL FAMILY ASSISTANCE PLAN OR TRIB- AL WORK PROGRAM.—For purposes of øparagraph (a)(B) and 

(2)(B)¿ determining monthly participation rates under paragraph (a)(B), a State may,at its option, include families in the 

State that are receiving assistance under a tribal family assistance plan approved under section 412 or under a tribal work 

program to which funds are provided under this part. 

ø(5) STATE OPTION FOR PARTICIPATION REQUIREMENT EXEMP- TIONS.—For any fiscal year, a State may, at its option, not require an individual who is 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) STATE OPTIONS FOR PARTICIPATION REQUIREMENT EXEMP- TIONS.—At the option of a State, a State may, on a case-by-case 

basis—

(A) not include a family in the determination of the 

monthly participation rate for the State in the first month 

for which the family receives assistance from the State program funded under this part on the basis of the most recent 

application for such assistance; or 

(B) not require a family in which the youngest child has 

not attained 12 months of age to engage in work, and may 

disregard that family in determining the minimum participation rate under subsection (a) for the State for not more 

than 12 months.

ø(c) ENGAGED IN WORK.—

ø(1) GENERAL RULES.— ø(A) ALL FAMILIES.—For purposes of subsection 

(b)(1)(B)(i), a recipient is engaged in work for a month in 

a fiscal year if the recipient is participating in work activities for at least the minimum average 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:

øIf the month is in The minimum 

øfiscal year: average number 

of hours per 

week is: 

ø1997 20

ø1998 20

ø1999 25

ø2000 or thereafter 30.

ø(B) 2-PARENT FAMILIES.—For purposes of subsection 

(b)(2)(B), an individual is engaged in work for a month in 

a fiscal year if—

ø(i) the individual and the other parent in the family are participating in work activities for a total of at 

least 35 hours per week during the month, not fewer 

120

than 30 hours per week of which are attributable to 

an activity described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of subsection (d), subject to this 

subsection; and 

ø(2) LIMITATIONS AND SPECIAL RULES.— ø(A) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS

AS WORK.— ø(i) LIMITATION.—Notwithstanding paragraph (1) of 

this subsection, an individual shall not be considered 

to be engaged in work by virtue of participation in an 

activity described in subsection (d)(6) of a State 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. 

ø(ii) LIMITED AUTHORITY TO COUNT LESS THAN FULL

WEEK OF PARTICIPATION.—For purposes of clause (i) of 

this subparagraph, on not more than 1 occasion per individual, the State shall consider participation of the 

individual in an activity described in subsection (d)(6) 

for 3 or 4 days during a week as a week of participation in the activity by the individual.

ø(B) SINGLE PARENT OR RELATIVE WITH CHILD UNDER AGE

6 DEEMED TO BE MEETING WORK PARTICIPATION REQUIRE- MENTS IF PARENT OR RELATIVE IS ENGAGED IN WORK FOR 20

HOURS PER WEEK.—For purposes of determining monthly 

participation rates under subsection (b)(1)(B)(i), a recipient 

who is the only parent or caretaker relative in the family 

of a child who has not attained 6 years of age is deemed 

to be engaged in work for a month if the recipient is engaged in work for an average of at least 20 hours per week 

during the month. 

ø(C) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED

TEEN WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE

DEEMED TO BE MEETING WORK PARTICIPATION REQUIRE- MENT.—For purposes of determining monthly participation 

rates under subsection (b)(1)(B)(i), a recipient who is married or a head of household and has not attained 20 years 

of age is deemed to be engaged in work for a month in a 

fiscal year if the recipient—

ø(i) maintains satisfactory attendance at secondary 

school or the equivalent during the month; or 

ø(ii) participates in education directly related to employment for an average of at least 20 hours per week 

during the month. 

ø(D) LIMITATION ON NUMBER OF PERSONS WHO MAY BE

TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPATION IN EDUCATIONAL ACTIVITIES.—For purposes of determining monthly participation rates under paragraphs 

(1)(B)(i) and (2)(B) of subsection (b), not more than 30 perVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00120 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
121

cent of the number of individuals in all families and in 2-

parent families, respectively, in a State who are treated as 

engaged in work for a month may consist of individuals 

who are determined to be engaged in work for the month 

by reason of participation in vocational educational training, or (if the month is in fiscal year 2000 or thereafter) 

deemed to be engaged in work for the month by reason of 

subparagraph (c) of this paragraph.¿

(c) DETERMINATION OF COUNTABLE HOURS ENGAGED IN WORK.— (1) SINGLE PARENT OR RELATIVE WITH A CHILD OVER AGE 6.— (A) MINIMUM AVERAGE NUMBER OF HOURS PER WEEK.— Subject to the succeeding paragraphs of this subsection, a 

family in which an adult recipient or minor child head of 

household in the family is participating in work activities 

described in subsection (d) shall be treated as engaged in 

work for purposes of determining monthly participation 

rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 20, but 

less than 24, hours per week in a month, as 0.675 of 

a family. 

(ii) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 24, but 

less than 30, hours per week in a month, as 0.75 of a 

family. 

(iii) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 30, but 

less than 34, hours per week in a month, as 0.875 of 

a family. 

(iv) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 34, but 

less than 35, hours per week in a month, as 1 family. 

(v) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 35, but 

less than 38, hours per week in a month, as 1.05 families. 

(vi) In the case of a family in which the total number 

of hours in which any adult recipient or minor child 

head of household in the family is participating in 

such work activities for an average of at least 38 hours 

per week in a month, as 1.08 families. 

(B) DIRECT WORK ACTIVITIES REQUIRED FOR AN AVERAGE

OF 24 HOURS PER WEEK.—Except as provided in subparagraph (C)(i), a State may not count any hours of participaVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00121 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
122

tion in work activities specified in paragraph (9), (10), or 

(11) of subsection (d) of any adult recipient or minor child 

head of household in a family before the total number of 

hours of participation by any adult recipient or minor child 

head of household in the family in work activities described 

in paragraph (1), (2), (3), (4), (5), (6), (7), (8), or (12) of subsection (d) for the family for the month averages at least 24 

hours per week. 

(C) STATE FLEXIBILITY TO COUNT PARTICIPATION IN CER- TAIN ACTIVITIES.— (i) QUALIFIED ACTIVITIES FOR 3-MONTHS IN ANY 24- MONTH PERIOD.— (I) 24-HOURS PER WEEK REQUIRED.—Subject to 

subclauses (III) and (IV), for purposes of determining hours under subparagraph (A), a State 

may count the total number of hours any adult recipient or minor child head of household in a family engages in qualified activities described in subclause (II) as a work activity described in subsection (d), without regard to whether the recipient 

has satisfied the requirement of subparagraph (B), 

but only if— (aa) the total number of hours of participation in such qualified activities for the family 

for the month average at least 24 hours per 

week; and 

(bb) engaging in such qualified activities is 

a requirement of the family self-sufficiency 

plan. 

(II) QUALIFIED ACTIVITIES DESCRIBED.—For purposes of subclause (I), qualified activities described 

in this subclause are any of the following: 

(aa) Postsecondary education.

(bb) Adult literacy programs or activities. 

(cc) Substance abuse counseling or treatment. 

(dd) Programs or activities designed to remove barriers to work, as defined by the State. 

(ee) Work activities authorized under any 

waiver for any State that was continued under 

section 415 before the date of enactment of the 

Personal Responsibility and Individual Development for Everyone Act. 

(III) LIMITATION.—Except as provided in clause 

(ii), subclause (I) shall not apply to a family for 

more than 3 months in any period of 24 consecutive months. 

(IV) CERTAIN ACTIVITIES.—The Secretary may 

allow a State to count the total hours of participation in qualified activities described in subclause 

(II) for an adult recipient or minor child head of 

household without regard to the minimum 24 hour 

average per week of participation requirement 

under subclause (I) if the State has demonstrated 

123

conclusively that such activity is part of a substantial and supervised program whose effectiveness in 

moving families to self-sufficiency is superior to 

any alternative activity and the effectiveness of the 

program in moving families to self-sufficiency 

would be substantially impaired if participating 

individuals participated in additional, concurrent 

qualified activities that enabled the individuals to 

achieve an average of at least 24 hours per week 

of participation. 

(ii) ADDITIONAL 3-MONTH PERIOD PERMITTED FOR

CERTAIN ACTIVITIES.— (I) SELF-SUFFICIENCY PLAN REQUIREMENT COM- BINED WITH MINIMUM NUMBER OF HOURS.—A State 

may extend the 3-month period under clause (i) for 

an additional 3 months in the same period of 24 

consecutive months in the case of an adult recipient or minor child head of household who is receiving qualified rehabilitative services described in 

subclause (II) if— (aa) the total number of hours that the adult 

recipient or minor child head of household engages in such qualified rehabilitative services 

and, subject to subclause (III), a work activity 

described in paragraph (1), (2), (3), (4), (5), 

(6), (7), (8), or (12) of subsection (d) for the 

month average at least 24 hours per week; and 

(bb) engaging in such qualified rehabilitative services is a requirement of the family 

self-sufficiency plan. 

(II) QUALIFIED REHABILITATIVE SERVICES DESCRIBED.—For purposes of subclause (I), qualified 

rehabilitative services described in this subclause 

are any of the following:

(aa) Adult literacy programs or activities. 

(bb) Participation in a program designed to 

increase proficiency in the English language. 

(cc) In the case of an adult recipient or 

minor child head of household who has been 

certified by a qualified medical, mental health, 

or social services professional (as defined by 

the State) as having a physical or mental disability, substance abuse problem, or other 

problem that requires a rehabilitative service, 

substance abuse treatment, or mental health 

treatment, the service or treatment determined 

necessary by the professional. 

(III) NONAPPLICATION OF LIMITATIONS ON JOB

SEARCH AND VOCATIONAL EDUCATIONAL TRAIN- ING.—An adult recipient or minor child head of 

household who is receiving qualified rehabilitative 

services described in subclause (II) may engage in 

a work activity described in paragraph (6) or (8) of 

subsection (d) for purposes of satisfying the minVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00123 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
124

imum 24 hour average per week of participation 

requirement under subclause (I)(aa) without regard to any limit that otherwise applies to the activity (including the 30 percent limitation on participation in vocational educational training under 

paragraph (6)(C)). 

(iii) HOURS IN EXCESS OF AN AVERAGE OF 24 WORK

ACTIVITY HOURS PER WEEK.—If the total number of 

hours that any adult recipient or minor child head of 

household in a family has participated in a work activity described in paragraph (1), (2), (3), (4), (5), (6), (7), 

(8), or (12) of subsection (d) averages at least 24 hours 

per week in a month, a State, for purposes of determining hours under subparagraph (A), may count any 

hours an adult recipient or minor child head of household in the family engages in— (I) any work activity described in subsection (d), 

without regard to any limit that otherwise applies 

to the activity (including the 30 percent limitation 

on participation in vocational educational training 

under paragraph (6)(C)); and 

(II) any qualified activity described in clause 

(i)(II), as a work activity described in subsection 

(d). 

(2) SINGLE PARENT OR RELATIVE WITH A CHILD UNDER AGE

6.— (A) IN GENERAL.—A family in which an adult recipient 

or minor child head of household in the family is the only 

parent or caretaker relative in the family of a child who 

has not attained 6 years of age and who is participating in 

work activities described in subsection (d) shall be treated 

as engaged in work for purposes of determining monthly 

participation rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 20, 

but less than 24, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 24, 

but less than 35, hours per week in a month, as 1 family. 

(iii) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 35, 

but less than 38, hours per week in a month, as 1.05 

families.

(iv) In the case of such a family in which the total 

number of hours in which the adult recipient or minor 

child head of household in the family is participating 

125

in such work activities for an average of at least 38 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK AC- TIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a family described in subparagraph 

(A) in the same manner as such subparagraphs apply to a 

family described in paragraph (1)(A). 

(3) 2-PARENT FAMILIES.— (A) IN GENERAL.—Subject to paragraph (6)(A), a 2-parent 

family in which an adult recipient or minor child head of 

household in the family is participating in work activities 

described in subsection (d) shall be treated as engaged in 

work for purposes of determining monthly participation 

rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 26, 

but less than 30, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 30, 

but less than 35, hours per week in a month, as 0.75 

of a family. 

(iii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 35, 

but less than 39, hours per week in a month, as 0.875 

of a family. 

(iv) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 39, 

but less than 40, hours per week in a month, as 1 family. 

(v) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 40, 

but less than 43, hours per week in a month, as 1.05 

families. 

(vi) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 43 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK ACTIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a 2-parent family described in subVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00125 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
126

paragraph (A) in the same manner as such subparagraphs 

apply to a family described in paragraph (1)(A), except that 

subparagraph (B) of paragraph (1) shall be applied to a 

such a 2-parent family by substituting ‘‘34’’ for ‘‘24’’ each 

place it appears. 

(4) 2-PARENT FAMILIES THAT RECEIVE FEDERALLY-FUNDED

CHILD CARE.— (A) IN GENERAL.—Subject to paragraph (6)(A), if a 2-parent family receives federally-funded child care assistance, 

an adult recipient or minor child head of household in the 

family participating in work activities described in subsection (d) shall be treated as engaged in work for purposes 

of determining monthly participation rates under subsection (b)(1)(B)(i) as follows: 

(i) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 40, 

but less than 45, hours per week in a month, as 0.675 

of a family. 

(ii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 45, 

but less than 51, hours per week in a month, as 0.75 

of a family. 

(iii) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 51, 

but less than 55, hours per week in a month, as 0.875 

of a family. 

(iv) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 55, 

but less than 56, hours per week in a month, as 1 family. 

(v) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 56, 

but less than 59, hours per week in a month, as 1.05 

families.

(vi) In the case of such a family in which the total 

number of hours in which any adult recipient or minor 

child head of household in the family is participating 

in such work activities for an average of at least 59 

hours per week in a month, as 1.08 families. 

(B) APPLICATION OF RULES REGARDING DIRECT WORK AC- TIVITIES AND STATE FLEXIBILITY TO COUNT PARTICIPATION

IN CERTAIN ACTIVITIES.—Subparagraphs (B) and (C) of 

paragraph (1) apply to a 2-parent family described in subparagraph (A) in the same manner as such subparagraphs 

127

apply to a family described in paragraph (1)(A), except that 

subparagraph (B) of paragraph (1) shall be applied to such 

a 2-parent family by substituting ‘‘50’’ for ‘‘24’’ each place 

it appears. 

(5) CALCULATION OF HOURS PER WEEK.—The number of hours 

per week that a family is engaged in work is the quotient of—

(A) the total number of hours per month that the family 

is engaged in work; divided by 

(B) 4. 

(6) SPECIAL RULES.—

(A) FAMILY WITH A DISABLED PARENT NOT TREATED AS A

2-PARENT FAMILY.—A family that includes a disabled parent shall not be considered a 2-parent family for purposes 

of paragraph (3) or (4). 

(B) NUMBER OF WEEKS FOR WHICH JOB SEARCH COUNTS

AS WORK.—An individual shall not be considered to be engaged in work for a month by virtue of participation in an 

activity described in subsection (d)(6) of a State program 

funded under this part, after the individual has participated in such an activity for 6 weeks (or, if the unemployment rate of the State is at least 50 percent greater than 

the unemployment rate of the United States, or the State 

meets the criteria of subclause (I), (II), or (III) of section 

403(b)(3)(A)(iii) or satisfies the applicable duration requirement of section 403(b)(3)(B), 12 weeks). 

(C) SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED TEEN

WHO MAINTAINS SATISFACTORY SCHOOL ATTENDANCE

DEEMED TO COUNT AS 1 FAMILY.—For purposes of determining hours under the preceding paragraphs of this subsection, with respect to a month, a State shall count a recipient who is married or a head of household and who has 

not attained 20 years of age as 1 family if the recipient—

(i) maintains satisfactory attendance at 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.—Except as provided in 

paragraph (1)(C)(ii)(I), for purposes of subsection 

(b)(1)(B)(i), not more than 30 percent of the number of individuals in all families in a State who are treated as engaged in work for a month may consist of individuals who 

are—

(i) determined (without regard to individuals participating in a program established under section 404(l)) 

to be engaged in work for the month by reason of participation in vocational educational training (but only 

with respect to such training that does not exceed 12 

months with respect to any individual); or 

(ii) deemed to be engaged in work for the month by 

reason of subparagraph (C) of this paragraph. 

128

(E) STATE OPTION TO DEEM SINGLE PARENT CARING FOR

A CHILD OR ADULT DEPENDENT FOR CARE WITH A PHYSICAL

OR MENTAL IMPAIRMENT TO BE MEETING ALL OR PART OF A

FAMILY’S WORK PARTICIPATION REQUIREMENTS FOR A

MONTH.—

(i) IN GENERAL.—A State may count the number of 

hours per week that an adult recipient or minor child 

head of household who is the only parent or caretaker 

relative for a child or adult dependent for care with a 

physical or mental impairment engages in providing 

substantial ongoing care for such child or adult dependent for care if the State determines that— (I) the child or adult dependent for care has been 

verified through a medically acceptable clinical or 

diagnostic technique as having a significant physical or mental impairment or combination of impairments that require substantial ongoing care; 

(II) the adult recipient or minor child head of 

household providing such care is the most appropriate means, as determined by the State, by which 

such care can be provided to the child or adult dependent for care; 

(III) for each month in which this subparagraph 

applies to the adult recipient or minor child head 

of household, the adult recipient or minor child 

head of household is in compliance with the requirements of the family’s self-sufficiency plan; 

and 

(IV) the recipient is unable to participate fully in 

work activities, after consideration of whether 

there are supports accessible and available to the 

family for the care of the child or adult dependent 

for care. 

(ii) TOTAL NUMBER OF HOURS LIMITED TO BEING

COUNTED AS 1 FAMILY.—In no event may a family that 

includes a recipient to which clause (i) applies be 

counted as more than 1 family for purposes of determining monthly participation rates under subsection 

(b)(1)(B)(i). 

(iii) STATE REQUIREMENTS.—In the case of a recipient to which clause (i) applies, the State shall—

(I) conduct regular, periodic evaluations of the 

family of the adult recipient or minor child head 

of household; and 

(II) include as part of the family’s self-sufficiency 

plan, regular updates on what special needs of the 

child or the adult dependent for care, including 

substantial ongoing care, could be accommodated 

either by individuals other than the adult recipient 

or minor child head of household outside of the 

home. 

(iv) RULE OF CONSTRUCTION.—Nothing in this subparagraph shall be construed as prohibiting a State 

from including in a recipient’s self-sufficiency plan a 

129

requirement to engage in work activities described in 

subsection (d). 

(F) OPTIONAL MODIFICATION OF WORK REQUIREMENTS

FOR RECIPIENTS RESIDING IN AREAS OF INDIAN COUNTRY OR

AN ALASKAN NATIVE VILLAGE WITH HIGH JOBLESSNESS.—If 

a State has included in the State plan a description of the 

State’s policies in areas of Indian country or an Alaskan 

Native village described in section 408(a)(7)(D), the State 

may define the activities that the State will treat as being 

work activities described in subsection (d) that a recipient 

who resides in such an area and who is participating in 

such activities in accordance with a self-sufficiency plan 

under section 408(b) may engage in for purposes of satisfying work requirements under the State program and for 

purposes of determining monthly participation rates under 

subsection (b)(1)(B)(i). 

* * * * * * *

(d) WORK ACTIVITIES DEFINED.—As used in this section, the term 

‘‘work activities’’ means—

(1) unsubsidized employment; 

(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 other than an individual participating in a program established under section 404(l)); 

* * * * * * *

PROHIBITIONS; REQUIREMENTS

SEC. 408. (a) IN GENERAL.—

(1) NO ASSISTANCE FOR FAMILIES WITHOUT A MINOR CHILD.—

A State to which a grant is made under section 403 shall not 

use any part of the grant to provide assistance to a family unless the family includes a minor child who resides with the 

family (consistent with paragraph (10)) or a pregnant individual. 

* * * * * * *

ø(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN

SUPPORT RIGHTS TO THE STATE.—

ø(A) GENERAL.—A State to which a grant is made under 

section 403 shall require, as a condition of providing assistance to a family under the State program funded under 

this part, that a member of the family assign to the State 

any rights the family member may have (on behalf of the 

family member or of any other person for whom the family 

member has applied for or is receiving such assistance) to 

support from any other person, not exceeding the total 

130

amount of assistance so provided to the family, which accrue (or have accrued) before the date the family ceases to 

receive assistance under the program, which assignment, 

on and after such date, shall not apply with respect to any 

support (other than support collected pursuant to section 

464) which accrued before the family received such assistance and which the State has not collected by— ø(i)(I) September 30, 2000, if the assignment is executed on or after October 1, 1997, and before October 

1, 2000; or 

ø(II) the date the family ceases to receive assistance 

under the program, if the assignment is executed on 

or after October 1, 2000; or 

ø(ii) If the State elects to distribute collections under 

section 457(a)(6), the date the family ceases to receive 

assistance under the program, if the assignment is executed on or after October 1, 1998. 

ø(B) LIMITATION.—A State to which a grant is made 

under section 403 shall not require, as a condition of providing assistance to any family under the State program 

funded under this part, that a member of the family assign 

to the State any rights to support described in subparagraph (A) which accrue after the date the family ceases to 

receive assistance under the program.¿

(3) NO ASSISTANCE FOR FAMILIES NOT ASSIGNING CERTAIN

SUPPORT RIGHTS TO THE STATE.—A State to which a grant is 

made under section 403 shall require, as a condition of paying 

assistance to a family under the State program funded under 

this part, that a member of the family assign to the State any 

right the family member may have (on behalf of the family 

member or of any other person for whom the family member 

has applied for or is receiving such assistance) to support from 

any other person, not exceeding the total amount of assistance 

so paid to the family, which accrues during the period that the 

family receives assistance under the program.

(4) NO ASSISTANCE FOR TEENAGE PARENTS WHO DO NOT AT- TEND HIGH SCHOOL OR OTHER EQUIVALENT TRAINING PRO- GRAM.—A State to which a grant is made under section 403 

shall not use any part of the grant to provide assistance to an 

individual who has not attained 18 years of age, is not married, has a minor child at least 12 weeks of age in his or her 

care, and has not successfully completed a high-school education (or its equivalent), if the individual does not participate 

in— (A) educational activities directed toward the attainment 

of a high school diploma or its equivalent; or 

(B) an alternative educational or training program that 

has been approved by the State. 

(5) NO ASSISTANCE FOR TEENAGE PARENTS NOT LIVING IN

ADULT-SUPERVISED SETTINGS.— (A) IN GENERAL.—

(i) REQUIREMENT.—Except as provided in øsubparagraph (B)¿ subparagraphs (B) and (C), a State to 

which a grant is made under section 403 shall not use 

131

any part of the grant to provide assistance to an individual described in the minor child referred to in 

clause (ii) of this subparagraph if the individual and 

the minor child referred to in clause (ii)(II) ødo not reside in a place of¿ do not reside in a— (I) place of residence maintained by a parent, 

legal guardian, or other adult relative of the individual as such parent’s, guardian’s, or adult relative’s own homeø.¿; or

(II) transitional living youth project funded 

under a grant made under section 321 of the Runaway and Homeless Youth Act (42 U.S.C. 5714–1).

(ii) INDIVIDUAL DESCRIBED.—For purposes of clause 

(i), an individual described in this clause is an individual who— (I) has not attained 18 years of age; and 

(II) is not married, and has a minor child in his 

or her care.

(B) EXCEPTION.—

(i) PROVISION OF, OR øASSISTANCE¿ 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). 

* * * * * * *

(C) AUTHORITY TO PROVIDE TEMPORARY ASSISTANCE.—A 

State may use any part of a grant made under section 403 

to provide assistance to an individual described in clause 

(ii) of subparagraph (A) who would otherwise be prohibited 

from receiving such assistance under clause (i) of that subparagraph, subparagraph (B), or section 408(a)(4) for not 

more than a single 60-day period in order to assist the individual in meeting the requirement of clause (i) of subparagraph (A), subparagraph (B), or section 408(a)(4) for 

receipt of such assistance.

* * * * * * *

ø(b) INDIVIDUAL RESPONSIBILITY PLANS.— ø(1) ASSESSMENT.—The State agency responsible for administering the State program funded under this part shall make 

132

an initial assessment of the skills, prior work experience, and 

employability of each recipient of assistance under the program 

who—ø(A) has attained 18 years of age; or 

ø(B) has not completed high school or obtained a certificate of high school equivalency, and is not attending secondary school. 

ø(2) CONTENTS OF PLANS.— ø(A) IN GENERAL.—On the basis of the assessment made 

under subsection (a) with respect to an individual, the 

State agency, in consultation with the individual, may develop an individual responsibility plan for the individual, 

which—

ø(i) sets forth an employment goal for the individual 

and a plan for moving the individual immediately into 

private sector employment; 

ø(ii) sets forth the obligations of the individual, 

which may include a requirement that the individual 

attend school, maintain certain grades and attendance, keep school age children of the individual in 

school, immunize children, attend parenting and 

money management classes, or do other things that 

will help the individual become and remain employed 

in the private sector; 

ø(iii) to the greatest extent possible is designed to 

move the individual into whatever private sector employment the individual is capable of handling as 

quickly as possible, and to increase the responsibility 

and amount of work the individual is to handle over 

time; 

ø(iv) describes the services the State will provide the 

individual so that the individual will be able to obtain 

and keep employment in the private sector, and describe the job counseling and other services that will 

be provided by the State; and 

ø(v) may require the individual to undergo appropriate substance abuse treatment. 

ø(B) TIMING.—The State agency may comply with paragraph (1) with respect to an individual— ø(i) within 90 days (or, at the option of the State, 

180 days) after the effective date of this part, in the 

case of an individual who, as of such effective date, is 

a recipient of aid under the State plan approved under 

part A (as in effect immediately before such effective 

date); or 

ø(ii) within 30 days (or, at the option of the State, 

90 days) after the individual is determined to be eligible for such assistance, in the case of any other individual. 

ø(3) PENALTY FOR NONCOMPLIANCE BY INDIVIDUAL.—In addition to any other penalties required under the State program 

funded under this part, the State may reduce, by such amount 

as the State considers appropriate, the amount of assistance 

otherwise payable under the State program to a family that inVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00132 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
133

cludes an individual who fails without good cause to comply 

with a responsibility plan signed by the individual. 

ø(4) STATE DISCRETION.—The exercise of the authority of this 

subsection shall be within the sole discretion of the State.¿

(b) FAMILY SELF-SUFFICIENCY PLANS.—

(1) IN GENERAL.—A State to which a grant is made 

under section 403 shall—

(A) make an initial screening and assessment, in the 

manner deemed appropriate by the State, of the skills, prior 

work experience, education obtained, work readiness, barriers to work, and employability of each adult or minor 

child head of household recipient of assistance in the family who—

(i) has attained age 18; or 

(ii) has not completed high school or obtained a certificate of high school equivalency and is not attending 

secondary school; 

(B) assess, in the manner deemed appropriate by the 

State, the work support and other assistance and family 

support services for which each family receiving assistance 

is eligible; and 

(C) assess, in the manner deemed appropriate by the 

State, the well-being of the children in the family, and, 

where appropriate, activities or resources to improve the 

well-being of the children. 

(2) CONTENTS OF PLANS.—The State shall, in the manner 

deemed appropriate by the State—

(A) establish for each family that includes an individual 

described in paragraph (1)(A), in consultation as the State 

deems appropriate with the individual, a self-sufficiency 

plan that—

(i) specifies activities described in the State plan submitted pursuant to section 402, including work activities described in paragraph (1), (2), (3), (4), (5), (6), (7), 

(8), or (12) of section 407(d), as appropriate; 

(ii) is designed to assist the family in achieving their 

maximum degree of self-sufficiency, and 

(iii) provides for the ongoing participation of the individual in the activities specified in the plan; 

(B) requires, at a minimum, each such individual to participate in activities in accordance with the self-sufficiency 

plan; 

(C) sets forth the appropriate supportive services the 

State intends to provide for the family; 

(D) establishes for the family a plan that addresses the 

issue of child well-being and, when appropriate, adolescent 

well-being, and that may include services such as domestic 

violence counseling, mental health referrals, and parenting 

courses; and 

(E) includes a section designed to assist the family by informing the family, in such manner, of the work support 

and other assistance for which the family may be eligible 

including (but not limited to)—

134

(i) the food stamp program established under the 

Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.); 

(ii) the medicaid program funded under title XIX; 

(iii) the State children’s health insurance program 

funded under title XXI; 

(iv) Federal or State funded child care, including 

child care funded under the Child Care Development 

Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) and 

funds made available under this title or title XX; 

(v) the earned income tax credit under section 32 of 

the Internal Revenue Code of 1986; 

(vi) the low-income home energy assistance program 

established under the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.); 

(vii) the special supplemental nutrition program for 

women, infants, and children established under section 

17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786); 

(viii) programs conducted under the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.); and 

(ix) low-income housing assistance programs.

(3) REVIEW.—

(A) REGULAR REVIEW.—A State to which a grant is made 

under section 403 shall—

(i) monitor the participation of each adult recipient 

or minor child head of household in the activities specified in the self-sufficiency plan, and regularly review 

the progress of the family toward self-sufficiency; and 

(ii) upon such a review, revise the plan and activities 

required under the plan as the State deems appropriate 

in consultation with the family. 

(B) PRIOR TO THE IMPOSITION OF A SANCTION.—Prior to 

imposing a sanction against an adult recipient, minor child 

head of household, or a family for failure to comply with 

a requirement of the self-sufficiency plan or the State program funded under this part, the State shall, to the extent 

determined appropriate by the State—

(i) review the self-sufficiency plan; and 

(ii) make a good faith effort (as defined by the State) 

to consult with the family. 

(4) STATE DISCRETION.—A State shall have sole discretion, 

consistent with section 407, to define and design activities for 

families for purposes of this subsection, to develop methods for 

monitoring and reviewing progress pursuant to this subsection, 

and to make modifications to the plan as the State deems appropriate to assist the individual in increasing their degree of 

self-sufficiency. 

(5) APPLICATION TO PARTIALLY-SANCTIONED FAMILIES.—The 

requirements of this subsection shall apply in the case of a family that includes an adult or minor child head of household recipient of assistance who is subject to a partial sanction. 

(6) TIMING.—The State shall initiate screening and assessment and the establishment of a family self-sufficiency plan in 

accordance with the requirements of this subsection—

135

(A) in the case of a family that, as of the date of enactment of the Personal Responsibility and Individual Development for Everyone Act, is not receiving assistance from 

the State program funded under this part, not later than 

the later of— (i) 1 year after such date of enactment; or 

(ii) 60 days after the family first receives assistance 

on the basis of the most recent application for assistance; and 

(B) in the case of a family that, as of such date, is receiving assistance under the State program funded under this 

part, not later than 1 year after such date of enactment. 

(7) RULE OF INTERPRETATION.—Nothing in this subsection 

shall preclude a State from— (A) requiring participation in work and any other activities the State deems appropriate for helping families 

achieve self-sufficiency and improving child well-being; or 

(B) using job search or other appropriate job readiness or 

work activities to assess the employability of individuals 

and to determine appropriate future engagement activities. 

* * * * * * *

PENALTIES

SEC. 409. (a) IN GENERAL.—Subject to this section: 

(1) USE OF GRANT IN VIOLATION OF THIS PART.—

* * * * * * *

(3) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES OR

COMPLY WITH FAMILY SELF-SUFFICIENCY PLAN REQUIREMENTS.— (A) IN GENERAL.—If the Secretary determines that a 

State to which a grant is made under section 403 for a fiscal year has failed to comply with section 407(a) or 408(b)

for the fiscal year, the Secretary shall reduce the grant 

payable to the State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to the 

applicable percentage of the State family assistance grant. 

(B) APPLICABLE PERCENTAGE DEFINED.—As used in subparagraph (A), the term ‘‘applicable percentage’’ means, 

with respect to a State—

(i) if a penalty was not imposed on the State under 

subparagraph (A) for the immediately preceding fiscal 

year, 5 percent; or 

(ii) if a penalty was imposed on the State under subparagraph (A) for the immediately preceding fiscal 

year, the lesser of—

(I) the percentage by which the grant payable to 

the State under section 403(a)(1) was reduced for 

such preceding fiscal year, increased by 2 percentage points; or 

(II) 21 percent. 

ø(C) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) 

with respect to a fiscal year based on the degree of noncompliance, and may reduce the penalty if the noncompliVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00135 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
136

ance is due to circumstances that caused the State to become a needy State (as defined in section 403(b)(6)) during 

the fiscal year or if the noncompliance is due to extraordinary circumstances such as a natural disaster or regional recession. The Secretary shall provide a written report to Congress to justify any waiver or penalty reduction 

due to such extraordinary circumstances.¿

(C) PENALTY BASED ON SEVERITY OF FAILURE.— (i) FAILURE TO SATISFY MINIMUM PARTICIPATION

RATE.—If, with respect to fiscal year 2005 or any fiscal 

year thereafter, the Secretary finds that a State has 

failed or is failing to substantially comply with the requirements of section 407(a) for that fiscal year, the 

Secretary shall impose reductions under subparagraph 

(A) with respect to the immediately succeeding fiscal 

year based on the degree of substantial noncompliance. 

In assessing the degree of substantial noncompliance 

under section 407(a) for a fiscal year, the Secretary 

shall take into account factors such as— (I) the degree to which the State missed the minimum participation rate for that fiscal year; 

(II) the change in the number of individuals who 

are engaged in work in the State since the prior 

fiscal year; and 

(III) the number of consecutive fiscal years in 

which the State failed to reach the minimum participation rate. 

(ii) FAILURE TO COMPLY WITH SELF-SUFFICIENCY

PLAN REQUIREMENTS.—If, with respect to fiscal year 

2005 or any fiscal year thereafter, the Secretary finds 

that a State has failed or is failing to substantially 

comply with the requirements of section 408(b) for that 

fiscal year, the Secretary shall impose reductions under 

subparagraph (A) with respect to the immediately succeeding fiscal year based on the degree of substantial 

noncompliance. In assessing the degree of substantial 

noncompliance under section 408(b), the Secretary 

shall take into account factors such as—

(I) the number or percentage of families for 

which a self-sufficiency plan is not established in 

a timely fashion for that fiscal year; 

(II) the duration of the delays in establishing a 

self-sufficiency plan during that fiscal year; 

(III) whether the failures are isolated and nonrecurring; and 

(IV) the existence of systems designed to ensure 

that self-sufficiency plans are established for all 

families in a timely fashion and that families’

progress under such plans is monitored. 

(iii) AUTHORITY TO REDUCE THE PENALTY.—The Secretary may reduce the penalty that would otherwise 

apply under this paragraph if the substantial noncompliance is due to circumstances that caused the 

State to meet the criteria of subclause (I), (II), or (III) 

137

of section 403(b)(3)(A)(iii) or to satisfy the applicable 

duration requirement of section 403(b)(3)(B) during the 

fiscal year, or if the noncompliance is due to extraordinary circumstances such as a natural disaster or regional recession. The Secretary shall provide a written 

report to Congress to justify any waiver or penalty reduction due to such extraordinary circumstances.

* * * * * * *

ø(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 owned 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 

ø1998, 1999, 2000, 2001, 2002, 2003, or 2004¿ fiscal year 

2004, 2005, 2006, 2007, 2008, or 2009 by the amount (if 

any) by which qualified State expenditures for the then 

immediately preceding fiscal year are less that the applicable percentage of historic State expenditures with respect 

to such preceding fiscal year. 

(B) DEFINITIONS.—As used in this paragraph: 

(i) QUALIFIED STATE EXPENDITURES.— (I) IN GENERAL.—The term ‘‘qualified State expenditures’’ means, with respect to a State and a 

fiscal year, the total expenditures by the State 

during the fiscal year, under all State programs, 

for any of the following with respect to eligible 

families: 

(aa) Cash assistance, including any amount 

collected by the State as support pursuant to 

a plan approved under part D, on behalf of a 

family receiving assistance under the State 

program funded under this part, that is distributed to the family under section 

ø457(a)(1)(B)¿ 457(a)(1) and disregarded in 

determining the eligibility of the family for, 

and the amount of such assistance. 

* * * * * * *

(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 FATHERVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00137 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
138

HOOD.—Subject to subclauses (II) and (III), the 

term ‘‘qualified State expenditures’’ includes the 

total expenditures by the State during the fiscal 

year under all State programs for a purpose described in paragraph (3) or (4) of section 401(a). 

(VI) PORTIONS OF CERTAIN CHILD SUPPORT PAY- MENTS COLLECTED ON BEHALF OF AND DISTRIB- UTED TO FAMILIES NO LONGER RECEIVING ASSIST- ANCE.—Any amount paid by a State pursuant to 

clause (i) or (ii) of section 457(a)(2)(B), but only to 

the extent that the State properly elects under section 457(a)(6) to have the payment considered a 

qualified State expenditure.

(ii) APPLICABLE PERCENTAGE.—The term ‘‘applicable 

percentage’’ means øfor fiscal years 1997 through 

2003,¿ 80 percent (or, if the State meets the requirements of section 407(a) for the preceding fiscal year, 

75 percent). 

* * * * * * *

(8) NONCOMPLIANCE OF STATE CHILD SUPPORT ENFORCEMENT

PROGRAM WITH REQUIREMENTS OF PART D.— (A) IN GENERAL.—If the Secretary finds, with respect to 

a State’s program under part D, øin a fiscal year¿ for a fiscal year beginning on or after October 1, 1997— (i)(I) on the basis of data submitted by a State pursuant to section 454(15)(B), or on the basis of the results of a review conducted under section 452(a)(4), 

that the State program failed to achieve the paternity 

establishment percentages (as defined in section 

452(g)(2)), or to meet other performance measures that 

may be established by the Secretary; 

(II) on the basis of the results of an audit or audits 

conducted under section 452(a)(4)(C)(i) that the State 

data submitted pursuant to section 454(15)(B) is incomplete or unreliable; or 

(III) on the basis of the results of an audit or audits 

conducted under section 452(a)(4)(C) that a State 

failed to substantially comply with 1 or more of the requirements of part D (other than paragraph (24) or 

subparagraph (A) or (B)(i) of paragraph (27), of section 

454 and 

(ii) øthat, with respect to the succeeding fiscal 

year—¿ that with respect to the period described in 

subparagraph (D)— (I) the State failed to take sufficient corrective 

action to achieve the appropriate performance levels or compliance as described in subparagraph 

(A)(i); or 

(II) the data submitted by the State pursuant to 

section 454(15)(B) is incomplete or unreliable; the 

amounts otherwise payable to the State under this 

part for quarters following øthe end of such succeeding fiscal year¿ the end of the period described 

in subparagraph (D), prior to quarters following 

139

the end of the first quarter throughout which the 

State program has achieved the paternity establishment percentages or other performance measures as described in subparagraph (A)(i)(I), or is 

in substantial compliance with 1 or more of the requirements of part D as described in subparagraph (A)(i)(III), as appropriate, shall be reduced 

by the percentage specified in subparagraph (B). 

* * * * * * *

(D) PERIOD DESCRIBED.—Subject to subparagraph (E), 

for purposes of this paragraph, the period described in this 

subparagraph is the period that begins with the date on 

which the Secretary makes a finding described in subparagraph (A)(i) with respect to State performance in a fiscal 

year and ends on September 30 of the fiscal year following 

the fiscal year in which the Secretary makes such a finding. 

(E) NO PENALTY IF STATE CORRECTS NONCOMPLIANCE IN

FINDING YEAR.—The Secretary shall not take a reduction 

described in subparagraph (A) with respect to a noncompliance described in clause (i) of that subparagraph if the Secretary determines that the State has corrected the noncompliance in the fiscal year in which the Secretary makes 

the finding of the noncompliance.

(9) FAILURE TO COMPLY WITH 5-YEAR LIMIT ON ASSISTANCE.— If the Secretary determines that a State has not complied with 

section 408(a)(7) during a fiscal year, the Secretary shall reduce the grant payable to the State under section 403(a)(1) for 

the immediately succeeding fiscal year by an amount equal to 

5 percent of the State family assistance grant. 

ø10 FAILURE OF STATE RECEIVING AMOUNTS FROM CONTIN- GENCY FUND TO MAINTAIN 100 PERCENT OF HISTORIC EFFORT.— If, at the end of any fiscal year during which amounts from the 

Contingency Fund for State Welfare Programs have been paid 

to a State, the Secretary finds that the qualified State expenditures (as defined in paragraph (7)(B)(i) (other than the expenditures described in subclause (I)(bb) of that paragraph)) under 

the State program funded under this part for the fiscal year 

are less than 100 percent of historic State expenditures (as 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 

suceeding fiscal year by the totat of the amounts so paid to the 

State that the State has not remitted under section 403(b)(6).¿

ø11¿ (10) FAILURE TO MAINTAIN ASSISTANCE TO ADULT SINGLE

CUSTODIAL PARENT WHO CANNOT OBTAIN CHILD CARE FOR CHILD

UNDER AGE 6.— (A) IN GENERAL.—If the Secretary determines that a 

State to which a grant is made under section 403 for a fiscal year has violated section 407(e)(2) during the fiscal 

year, the Secretary shall reduce the grant payable to the 

State under section 403(a)(1) for the immediately sucVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00139 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
140

ceeding fiscal year by an amount equal to not more than 

5 percent of the State family assistance grant. 

(B) PENALTY BASED ON SEVERITY OF FAILURE.—The Secretary shall impose reductions under subparagraph (A) 

with respect to a fiscal year based on the degree of noncompliance. 

ø12¿ (11) REQUIREMENT TO EXPEND ADDITIONAL STATE FUNDS

TO REPLACE GRANT REDUCTIONS; PENALTY FOR FAILURE TO DO

SO.—If the grant payable to a State under section 403(a)(1) for 

a fiscal year is reduced by reason of this subsection, the State 

shall, during the immediately succeeding fiscal year, expend 

under the State program funded under this part an amount 

equal to the total amount of such reductions. If the State fails 

during such succeeding fiscal year to make the expenditure required by the preceding sentence from its own funds, the Secretary may reduce the grant payable to the State under section 

403(a)(1) for the fiscal year that follows such succeeding fiscal 

year by an amount equal to the sum of— (A) not more than 2 percent of the State family assistance grant; and 

(B) the amount of the expenditure required by the preceding sentence. 

ø13¿ (12) PENALTY FOR FAILURE OF STATE TO MAINTAIN HIS- TORIC EFFORT DURING YEAR IN WHICH WELFARE-TO-WORK GRANT

IS RECEIVED.—If a grant is made to a State under section 

403(a)(5)(A) for a fiscal year and paragraph (7) of this subsection requires the grant payable to the State under section 

403(a)(1) to be reduced for the immediately succeeding fiscal 

year, then the Secretary shall reduce the grant payable to the 

State under section 403(a)(1) for such succeeding fiscal year by 

the amount of the grant made to the State under section 

403(a)(5)(A) for the fiscal year. 

ø14¿ (13) PENALTY FOR FAILURE TO REDUCE ASSISTANCE FOR

RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO WORK.—

* * * * * * *

(c) CORRECTIVE COMPLIANCE PLAN.—

(1) IN GENERAL.—

* * * * * * *

(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. 

* * * * * * *

DATA COLLECTION AND REPORTING

SEC. 411. (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 inVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00140 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
141

formation 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)) and on families receiving assistance under State 

programs funded with other qualified State expenditures 

(as defined in section 409(a)(7)(B)(i)):

(i) The county of residence of the family. 

(ii) Whether a child receiving such assistance or an 

adult in the family is receiving— (I) Federal disability insurance benefits; 

(II) benefits based on Federal disability status; 

(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)ø)¿; 

(IV) aid or assistance under a State plan approved under title XVI (as in effect without regard 

to such amendment) by reason of being permanently and totally disabled; or 

(V) supplemental security income benefits under 

title XVI (as in effect pursuant to such amendment) by reason of disability. 

(iii) The ages of the members of such families. 

(iv) The number of individuals in the family, and the 

relation of each family member to the head of the family. 

(v) the employment status and earnings of the employed adult in the family. 

(vi) The marital status of the adults in the family, 

including whether such adults have never married, 

are widowed, or are divorced. 

(vii) The race and educational level of each adult 

and minor parent in the family. 

(viii) The race øand educational level¿ of each child 

in the family. 

(ix) Whether the family received subsidized housing, 

medical assistance under the State plan approved 

under title XIX, food stamps, or subsidized child careø, 

and if the latter 2, the amount received¿. 

(x) The number of months that the family has received øeach type of¿ assistance under the program 

and, if applicable, the reason for receipt of the assistance for a total of more than 60 months. 

(xi) If the adults participated in, and the number of 

hours per week of participation in, the following activities: 

ø(I) Education. 

ø(II) Subsidized private sector employment. 

ø(III) Unsubsidized employment. 

ø(IV) Public sector employment, work experience, or community service. 

ø(V) Job search. 

ø(VI) Job skills training or on-the-job training. 

ø(VII) Vocational education.¿

142

(xii) Information necessary to calculate participation 

rates and progress toward universal engagement under 

section 407.

(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.

(xiii) The øtype and¿ amount of assistance received 

under the program, including the amount of and reason for any reduction of assistance including sanctions). 

(xiv) Any amount of unearned income received by 

any member of the family. 

(xv) The citizenship of the members of the family. 

(xvi) From a sample of closed cases, whether the 

family left the program, and if so, whether the family 

left due to— (I) employment; 

ø(II) marriage;¿

ø(III)¿ (II) the prohibition set forth in section 

408(a)(7); 

ø(IV)¿ (III) sanction; or 

ø(V)¿ (IV) State policy. 

(xvii) With respect to each individual in the family 

who has not attained 20 years of age, whether the individual is a parent of a child in the family.

(xviii) The date the family first received assistance 

from the State program on the basis of the most recent 

application for such assistance. 

(xix) Whether a self-sufficiency plan is established for 

the family in accordance with section 408(b). 

(xx) With respect to any child in the family, the marital status of the parents at the birth of the child, and 

if the parents were not then married, whether the paternity of the child has been established.

(B) USE OF SAMPLES.—

(i) AUTHORITY.—A State may comply with subparagraph (A) by submitting disaggregated case record information on øa sample¿ samples of families selected 

through the use of scientifically acceptable sampling 

methods approved by the Secretary except that the Secretary may designate core data elements that must be 

reported on all families. (ii) SAMPLING AND OTHER METHODS.—The Secretary 

shall provide the States with such case sampling plans 

and data collection procedures as the Secretary deems 

necessary to produce statistically valid estimates of 

143

the performance of State programs øfunded under this 

part¿ described in subparagraph (A). The Secretary 

may develop and implement procedures for verifying 

the quality of data submitted by the States. 

(2) REPORT ON USE OF FEDERAL FUNDS TO COVER ADMINISTRATIVE COSTS AND OVERHEAD.—The report required by paragraph 

(1) for a fiscal quarter shall include a statement of the percentage of the funds paid to the State under this part for the quarter that are used to cover administrative costs or overhead, 

with a separate statement of the percentage of such funds that 

are used to cover administrative costs or overhead incurred for 

programs operated with funds provided under section 

403(a)(5). 

* * * * * * *

ø(5) REPORT ON TRANSITIONAL SERVICES.—The report required by paragraph (1) for a fiscal quarter shall include the 

total amount expended by the State during the quarter to provide transitional services to a family that has ceased to receive 

assistance under this part because of employment, along with 

a description of such services.¿

ø(6)¿ (5) REPORT ON FAMILIES RECEIVING ASSISTANCE.—The 

report required by paragraph (1) for a fiscal quarter shall include for each month in the quarter—

* * * * * * *

(6) REPORT ON FAMILIES THAT BECOME INELIGIBLE TO 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 øsubsection¿ section, and shall consult with 

the Secretary of Labor øin 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. 

144

(c) MONTHLY REPORTS ON CASELOAD.—Not later than 3 months 

after the end of each calendar month that begins 1 year or more 

after the date of enactment of this subsection, each eligible State 

shall submit to the Secretary a report on the number of families and 

total number of individuals receiving assistance in the calendar 

month under the State program funded under this part and under 

other State programs funded with qualified State expenditures (as 

defined in section 409(a)(7)(B)(i)). 

(d) ANNUAL REPORT ON PERFORMANCE IMPROVEMENT.—Beginning with fiscal year 2005, 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 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).

ø(b)¿ (e) ANNUAL REPORTS TO THE CONGRESS BY THE SEC- RETARY.—Not later than 6 months after the end of fiscal year 1997, 

øand each fiscal year thereafter¿ and not later than July 1 of each 

fiscal year thereafter, the Secretary shall transmit to the Congress 

a report describing— (1) whether the States are meeting— (A) the participation rates described in section 407(a); 

and 

(B) the objectives of— (i) increasing employment and earnings of needy 

families and child support collections ; and 

(ii) decreasing out-of-wedlock pregnancies and child 

poverty; 

(2) the demographic and financial characteristics of øfamilies 

applying for assistance,¿ families receiving assistanceø,¿ and 

families that become ineligible to receive assistance; 

(3) the characteristics of each State program funded under 

this part and other programs funded with qualified State expenditures (as defined in section 409(a)(7)(B)(i)); and 

(4) the trends in employment and earnings of needy families 

with minor children living at home. 

STATE REQUIRED TO PROVIDE CERTAIN INFORMATION

SEC. 411A. Each State to which a grant is made under section 

403 shall, at lease 4 times annually and upon request of the Immigration and Naturalization Service, furnish the Immigration and 

Naturalization Service with the name and address of, and other 

identifying information on, any individual who the State knows is 

unlawfully in the United States. 

DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES

SEC. 412. (a) GRANTS FOR INDIAN TRIBES.—

(1) TRIBAL FAMILY ASSISTANCE GRANT.—

(A) IN GENERAL.—For each of fiscal years ø1997, 1998, 

1999, 2000, 2001, 2002, and 2003¿, 2004 through 2008 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 

145

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. 

(B) AMOUNT DETERMINED.—

* * * * * * *

(3) WELFARE-TO WORK GRANTS.—

(A) IN GENERAL.—The Secretary of Labor shall award a 

grant in accordance with this paragraph to an Indian tribe 

for each fiscal year specified in section 403(a)(5)(H) for 

which the Indian tribe is a welfare-to-work tribe, in such 

amount as the Secretary of Labor deems appropriate subject to subparagraph (B) of this paragraph. 

(B) WELFARE-TO-WORK TRIBE.—An Indian tribe shall be 

considered a welfare-to-work tribe for a fiscal year for purposes for this paragraph if the Indian tribe meets the following requirement: 

(i) The Indian tribe has submitted to the Secretary 

of Labor a plan which describes how, consistent with 

section 403(a)(5), the Indian tribe will use any funds 

provided under this paragraph during the fiscal year. 

If the Indian tribe has a tribal family assistance plan, 

the plan referred to in the preceding sentence shall be 

in the form of an addendum to the tribal family assistance plan. 

* * * * * * * 

(iv) The Indian tribe has agreed to negotiate in good 

faith with the Secretary of Health and Human Services with respect to the substance and funding of any 

evaluation under section ø413(j)¿413(i), and to cooperate with the conduct of any such evaluation. 

* * * * * * *

(4) TRIBAL TANF IMPROVEMENT FUND.—

(A) ESTABLISHMENT.—The Secretary shall establish a 

fund for purposes of carrying out any of the following activities: 

(i) Providing technical assistance to Indian tribes 

considering applying to carry out, or that are carrying 

out, a tribal family assistance plan under this section 

in order to help such tribes establish and operate 

strong and effective tribal family assistance plans 

under this section that will allow families receiving assistance under such plans achieve the highest measure 

of self-sufficiency. 

(ii) Awarding competitive grants directly to Indian 

tribes carrying out a tribal family assistance plan 

under this section for purposes of conducting programs 

and activities that would substantially improve the opVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00145 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
146

eration and effectiveness of such plans and the ability 

of such tribes to achieve the purposes of the program 

under this part as described in section 401(a). 

(iii) Awarding competitive grants directly to Indian 

tribes carrying out a tribal family assistance plan 

under this section to support tribal economic development activities that would significantly assist families 

receiving assistance under the State program funded 

under this part or a tribal family assistance plan obtain employment and achieve self-sufficiency. 

(iv) Conducting, directly or through grants, contracts, or interagency agreements, research and development to improve knowledge about tribal family assistance programs conducted under this section and 

challenges faced by such programs in order to improve 

the effectiveness of such programs. 

(B) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary to carry out 

this paragraph, $100,000,000 for each of fiscal years 2004 

through 2008.

(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) outlines the Indian tribe’s approach to providing welfare-related services for the 3-year period, consistent with 

this section; 

* * * * * * *

(E) identifies the employment opportunities in or near 

the service area or areas of the Indian tribe and the manner in which the Indian tribe will cooperate and participate in enhancing such opportunities for recipients of assistance under the plan consistent with any applicable 

State standards; øand¿

(F) applies the fiscal accountability provisions of section 

5(f)(1) of the Indian Self-Determination and Education Assistance Act 26 (25 U.S.C. 450c(f)(1)), relating to the submission of a single-agency audit report required by chapter 

75 of title 31, United States Codeø.¿; and

(G) provides an assurance that the State in which the 

tribe is located has been consulted regarding the plan and 

its design.

(e) ACCOUNTABILITY.—Nothing in this section shall be construed 

to limit the ability of the Secretary to maintain program funding 

accountability consistent with— (1) generally accepted accounting principles; and 

(2) the requirements of the Indian Self-Determination and 

Education Assistance Act (25 U.S.C. 450 et seq.). 

ø(f) ELIGIBILITY FOR FEDERAL LOANS.—Section 406 shall apply to 

an Indian tribe with an approved tribal assistance plan in the 

same manner as such section applies to a State, except that section 

406(c) shall be applied by substituting ‘‘section 412(a)’’ for ‘‘section 

403(a)’’.¿

ø(g)¿ (f) PENALITIES.—

147

(1) Subsections (a)(1), (a)(6), (b), and (c) of section 409 shall 

apply to an Indian tribe with an approved tribal assistance 

plan in the same manner as such subsections apply to a State. 

(2) Section 409(a)(3) shall apply to an Indian tribe with an 

approved tribal assistance plan by substituting ‘‘meet minimum work participation requirements established under section 412(c)’’ for ‘‘comply with section 407(a)’’. ø(h)¿ (g) DATA COLLECTION AND REPORTING.—Section 411 shall 

apply to an Indian tribe with an approved tribal family assistance 

plan. 

ø(i)¿ (h) SPECIAL RULE FOR INDIAN TRIBES IN ALASKA.— (1) IN GENERAL.—Notwithstanding any other provision of 

this section, and except as provided in paragraph (2), an Indian tribe in the State of Alaska that receives a tribal family 

assistance grant under this section shall use the grant to operate a program in accordance with requirements comparable to 

the requirements applicable to the program of the State of 

Alaska funded under this part. Comparability of programs 

shall be established on the basis of program criteria developed 

by the Secretary in consultation with the State of Alaska and 

such Indian tribes. 

(2) WAIVER.—An Indian tribe described in paragraph (1) may 

apply to the appropriate State authority to receive a waiver of 

the requirement of paragraph (1). 

RESEARCH, EVALUATIONS, AND NATIONAL STUDIES

SEC. 413. (a) RESEARCH.—The Secretary, directly or through 

grants, contracts, or interagency agreements, shall conduct research on the benefits, effects, and costs of operating different 

State programs funded under this part, including time limits relating to eligibility for assistance. The research shall include studies 

on the effects of different programs and the operation of such programs on welfare dependency, illegitimacy, teen pregnancy, employment rates, child well-being, and any other area the Secretary 

deems appropriate. The Secretary shall also conduct research on 

the costs and benefits of State activities under section 407. 

* * * * * * *

(d) ANNUAL RANKING OF STATES AND REVIEW OF MOST AND

LEAST SUCCESSFUL WORK PROGRAMS.—

ø(1) ANNUAL RANKING OF STATES.—The Secretary shall rank 

annually the States to which grants are paid under section 403 

in the order of their success in placing recipients of assistance 

under the State program funded under this part into long-term 

private sector jobs, reducing the overall welfare caseload, and, 

when a practicable method of calculating this information becomes available, diverting individuals from formally applying 

to the State program and receiving assistance. In ranking 

States under this subsection, the Secretary shall take into account the average number of minor children living at home in 

families in the State that have incomes below the poverty line 

and the amount of funding provided each State for such families.¿

(1) ANNUAL RANKING OF STATES.—

148

(A) IN GENERAL.—The Secretary shall rank annually the 

States to which grants are paid under section 403 in the 

order of their success in— (i) placing recipients of assistance under the State 

program funded under this part into private sector 

jobs; 

(ii) the success of the recipients in retaining employment; 

(iii) the ability of the recipients to increase their 

wages; 

(iv) the degree to which recipients have workplace attachment and advancement; 

(v) reducing the overall welfare caseload; and 

(vi) when a practicable method for calculating this 

information becomes available, diverting individuals 

from formally applying to the State program and receiving assistance. 

(B) CONSIDERATION OF OTHER FACTORS.—In ranking 

States under this paragraph, the Secretary shall take into 

account the average number 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 

under this part for such families.

(2) ANNUAL REVIEW OF MOST AND LEAST SUCCESSFUL WORK

PROGRAMS.—The Secretary shall review the programs of the 3 

States most recently ranked highest under paragraph (1) and 

the 3 States most recently ranked lowest under paragraph (1) 

that provide parents with work experience, øassistance¿ aid in 

finding employment, and other work preparation activities and 

support services to enable the families of such parents to leave 

the program and become self-sufficient. 

(e) ANNUAL RANKING OF STATES AND REVIEW OF ISSUES RELAT- ING TO OUT-OF-WEDLOCK BIRTHS.—

* * * * * * *

ø(g) REPORT ON CIRCUMSTANCES OF CERTAIN CHILDREN AND FAM- ILIES.—

ø(1) IN GENERAL.—Beginning 3 years after the date of the 

enactment of this section, the Secretary of Health and Human 

Services shall prepare and submit to the Committees on Ways 

and Means and on Education and the Workforce of the House 

of Representatives and to the Committees on Finance and on 

Labor and Resources of the Senate annual reports that examine in detail the matters described in paragraph (2) with respect to each of the following groups for the period after such 

enactment: 

ø(A) Individuals who were children in families that have 

become ineligible for assistance under a State program 

funded under this part by reason of having reached a time 

limit on the provision of such assistance. 

ø(B) Children born after such date of enactment to parents who, at the time of such birth, had not attained 20 

years of age. 

ø(C) Individuals who, after such date of enactment, became parents before attaining 20 years of age. 

149

ø(2) MATTERS DESCRIBED.—The matters described in this 

paragraph are the following: 

ø(A) The percentage of each group that has dropped out 

of secondary school (or the equivalent), and the percentage 

of each group at each level of educational attainment. 

ø(B) The percentage of each group that is employed. 

ø(C) The percentage of each group that has been convicted of a crime or has been adjudicated as a delinquent. 

ø(D) The rate at which the members of each group are 

born, or have children, out-of-wedlock, and the percentage 

of each group that is married. 

ø(E) The percentage of each group that continues to participate in State programs funded under this part. 

ø(F) The percentage of each group that has health insurance provided by a private entity (broken down by whether 

the insurance is provided through an employer or otherwise), the percentage that has health insurance provided 

by an agency of government, and the percentage that does 

not have health insurance.

ø(G) The average income of the families of the members 

of each group. 

ø(H) Such other matters as the Secretary deems appropriate.¿

ø(h)¿ (g) FUNDING OF STUDIES AND DEMONSTRATIONS.—

(1) IN GENERAL.—Out of any money in the Treasury of the 

United States not otherwise appropriated, there are appropriated $15,000,000 for each of fiscal years ø1997 through 

2002¿ 2004 through 2008 for the purpose for paying—

* * * * * * *

ø(i)¿ (h) CHILD POVERTY RATES.—

(1) IN GENERAL.—Not later than May 31, 1998, and annually 

thereafter, the chief executive officer of each State shall submit 

to the Secretary a statement of the child poverty rate in the 

State as of such date of enactment or the date of the most recent prior statement under this paragraph. 

* * * * * * *

ø(j)¿ (i) EVALUATION OF WELFARE-TO-WORK PROGRAMS.— (1) EVALUATION.—The Secretary, in consultation with the 

Secretary of Labor and the Secretary of Housing and Urban 

Development—

* * * * * * *

(2) REPORTS TO THE CONGRESS.—

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

the Secretary, in consultation with the Secretary of Labor 

and the Secretary of Housing and Urban Development, 

shall submit to the Congress reports on the projects funded under øsection¿ sections 403(a)(5) and 412(a)(3) and on 

the evaluations of the projects. 

(B) INTERIM REPORT.—Not later than January 1, 1999, 

the Secretary shall submit an interim report on the matter 

described in subparagraph (A). 

150

(C) FINAL REPORT.—Not later than January 1, 2001, (or 

at a later date, if the Secretary informs the Committee of 

the Congress with jurisdiction over the subject matter of 

the report) the Secretary shall submit a final report on the 

matter described in subparagraph (A).

(j) PERFORMANCE IMPROVEMENT.—The Secretary, in consultation 

with the States, shall develop uniform performance measures designed to assess the degree of effectiveness, and the degree of improvement, of State programs funded under this part in accomplishing the purposes of this part. 

(k) FUNDING FOR RESEARCH, DEMONSTRATIONS, AND TECHNICAL

ASSISTANCE.— (1) APPROPRIATION.— (A) IN GENERAL.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated $100,000,000 for each of fiscal years 2004 

through 2008, which shall remain available to the Secretary until expended. 

(B) USE OF FUNDS.— (i) IN GENERAL.—Funds appropriated under subparagraph (A) shall be used for the purpose of—

(I) conducting or supporting research and demonstration projects by public or private entities; or 

(II) providing technical assistance in connection 

with a purpose of the program funded under this 

part, as described in section 401(a), to States, Indian tribal organizations, sub-State entities, and 

such other entities as the Secretary may specify. 

(ii) REQUIREMENT.—Not less than 80 percent of the 

funds appropriated under subparagraph (A) for a fiscal year shall be expended for the purpose of conducting or supporting research and demonstration 

projects, or for providing technical assistance, in connection with activities described in section 403(a)(2)(B). 

Funds appropriated under subparagraph (A) and expended in accordance with this clause shall be in addition to any other funds made available under this part 

for activities described in section 403(a)(2)(B). 

(2) SECRETARY’S AUTHORITY.—The Secretary may conduct activities authorized by this subsection directly or through grants, 

contracts, or interagency agreements with public or private entities. 

(3) REQUIREMENT FOR USE OF FUNDS.—The Secretary shall 

not pay any funds appropriated under paragraph (1)(A) to an 

entity for the purpose of conducting or supporting research and 

demonstration projects involving activities described in section 

403(a)(2)(B) unless the entity complies with the requirements of 

section 403(a)(2)(E).

STUDY BY THE CENSUS BUREAU

SEC. 414. ø(a) IN GENERAL.—The Bureau of the Census shall continue to collect data on the 1992 and 1993 panels of the Survey of 

Income and Program Participation as necessary to obtain such information as will enable interested persons to evaluate the impact 

151

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 is such 

panels.¿ (a) IN GENERAL.—The Bureau of the Census shall implement or enhance a longitudinal survey of program participation, developed in consultation with the Secretary and made available to 

interested parties, to allow for the assessment of the outcomes of 

continued welfare reform on the economic and child well-being of 

low-income families with children, including those who received assistance or services from a State program funded under this part, 

and, to the extent possible, shall provide State representative samples. The content of the survey should include such information as 

may be necessary to examine the issues of out-of-wedlock childbearing, marriage, welfare dependency and compliance with work 

requirements, the beginning and ending of spells of assistance, 

work, earnings and employment stability, and the well-being of children.

(b) REPORTS ON THE WELL-BEING OF CHILDREN AND FAMILIES.—

(1) IN GENERAL.—Not later than 24 months after the date of 

enactment of the Personal Responsibility and Individual Development for Everyone Act, the Secretary of Commerce shall prepare and submit to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the 

Senate a report on the well-being of children and families using 

data collected under subsection (a). 

(2) SECOND REPORT.—Not later than 60 months after such 

date of enactment, the Secretary of Commerce shall submit a 

second report to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the 

Senate on the well-being of children and families using data 

collected under subsection (a). 

(3) INCLUSION OF COMPARABLE MEASURES.—Where comparable measures for data collected under subsection (a) exist 

in surveys previously administered by the Bureau of the Census, 

appropriate comparisons shall be made and included in each 

report required under this subsection on the well-being of children and families to assess changes in such measures.

ø(b)¿ (c) APPROPRIATION.—Out of any money in the Treasury of 

the United States not otherwise appropriated, there are appropriated $10,000,000 for each of fiscal years ø1996, 1997, 1998, 

1999, 2000, 2001, 2002, and 2003¿ 2004 through 2008 for payment 

to the Bureau of the Census to carry out this section. Funds appropriated under this subsection for a fiscal year shall remain available through fiscal year 2008 to carry out this section for payment 

to the Bureau of the Census to carry out subsection (a). 

* * * * * * *

152

FUNDING FOR CHILD CARE

SEC. 418. (a) GENERAL CHILD CARE ENTITLEMENT.—

(1) GENERAL ENTITLEMENT.—Subject to the amount appropriated under paragraph (3), each State shall, for the purpose 

of providing child care assistance, be entitled to payments 

under a grant under this subsection for a fiscal year in an 

amount equal to the greater of—

* * * * * * *

(C) $2,167,000,000 for fiscal year 1999; 

(D) $2,367,000,000 for fiscal year 2000; 

(E) $2,567,000,000 for fiscal year 2001; øand¿

(F) $2,717,000,000 for fiscal year 2002ø.¿; and

(G) $2,917,000,000 for each of fiscal years 2004 through 

2008. 

(4) øINDIAN TRIBES¿ AMOUNTS RESERVED.—øThe Secretary¿

(A) INDIAN TRIBES.—The Secretary shall reserve not less than 

1 percent, and not more than 2 percent, of the aggregate 

amount appropriated to carry out this section in each fiscal 

year for payments to Indian tribes and tribal organizations. 

(B) PUERTO RICO.—The Secretary shall reserve $10,000,000 of 

the amount appropriated under paragraph (3) for each fiscal 

year for payments to the Commonwealth of Puerto Rico for each 

such fiscal year for the purpose of providing child care assistance.

* * * * * * *

DEFINITIONS

SEC. 419. As used in this part: 

(1) ADULT.—The term ‘‘adult’’ means an individual who is 

not a minor child. 

* * * * * * *

(6) ASSISTANCE.—

(A) IN GENERAL.—The term ‘‘assistance’’ means 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).

* * * * * * *

DUTIES OF THE SECRETARY

SEC. 452. (a) The Secretary shall establish, within the Department of Health and Human Services a separate organizational 

153

unit, under the direction of a designee of the Secretary, who shall 

report directly to the Secretary and who shall—

* * * * * * * 

(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—

* * * * * * *

(m) COMPARISONS WITH INSURANCE INFORMATION.— (1) IN GENERAL.—The Secretary, through the Federal Parent 

Locator Service, is authorized— (A) to compare information concerning individuals owing 

past-due support with information maintained by insurers 

(or their agents) concerning insurance claims, settlements, 

awards, and payments, and 

(B) to furnish information resulting from such data 

matches to the State agencies responsible for collecting 

child support from such individuals. 

(2) LIABILITY.—No insurer (including any agent of an insurer) shall be liable under any Federal or State law to any 

person for any disclosure provided for under this subsection, or 

for any other action taken in good faith in accordance with the 

provisions of this subsection. 

(n) INTERCEPTION OF GAMBLING WINNINGS FOR PAST-DUE SUPPORT.—

(1) IN GENERAL.—The Secretary, through the Federal Parent 

Locator Service, is authorized, in accordance with this subsection, to intercept gambling winnings of an individual owing 

past-due support being enforced by a State agency with a plan 

approved under this part, and to transmit such winnings to the 

State agency for distribution pursuant to section 457. 

(2) REQUIREMENTS FOR GAMBLING ESTABLISHMENTS.—A gambling establishment subject to this subsection shall not pay to 

any individual gambling winnings (as defined in paragraph 

(6)) meeting the criteria for reporting to the Internal Revenue 

Service pursuant to section 6041 of the Internal Revenue Code 

of 1986 until the establishment—

(A) has furnished to the Secretary—

(i) the information required to be so reported with respect to such individual and such winnings; and 

(ii) the net amount of such gambling winnings (hereafter in this subsection referred to as the ‘net gambling 

winnings’) after withholding of amounts for Federal 

taxes as required pursuant to section 3402(q) of the Internal Revenue Code of 1986; and 

154

(B) has complied with the Secretary’s instructions pursuant to paragraph (3). 

(3) DATA MATCH AND WITHHOLDING.—The Secretary shall—

(A) compare information furnished pursuant to paragraph (2)(A) with information on individuals who owe 

past-due support; 

(B) direct the gambling establishment to withhold from 

an individual’s net gambling winnings all amounts not exceeding the total past-due support owed by the individual; 

(C) authorize the gambling establishment, in reimbursement of its costs of complying with this subsection, to withhold and retain from such net gambling winnings an 

amount equal to 2 percent of the amount to be withheld 

pursuant to subparagraph (B), which amount shall be 

taken first from any excess of such net winnings above the 

amount withheld pursuant to subparagraph (B), with any 

balance to be taken from the amount so withheld; and 

(D) require the gambling establishment to furnish written 

notice to the individual whose gambling winnings are withheld pursuant to this subsection, that includes—

(i) the amounts withheld pursuant to subparagraphs 

(B) and (C); 

(ii) the reason and authority for the withholding; 

and

(iii) an explanation of the individual’s procedural 

due process rights, including the right to contest such 

withholding to the responsible State agency and information necessary to contact such State agency. 

(4) TRANSFER OF WITHHELD AMOUNTS.—Net amounts withheld for past-due support pursuant to subparagraphs (B) and 

(C) of paragraph (3) shall—

(A) be transferred by the gambling establishment to the 

Secretary at the same time and in the same manner as 

amounts withheld under section 3402(q) of the Internal 

Revenue Code of 1986 would be transferred to the Internal 

Revenue Service, together with the information described in 

paragraph (2)(A)(i) with respect to the individuals whose 

winnings were withheld under this subsection; and 

(B) be promptly transferred by the Secretary to the appropriate State agency. 

(5) NONLIABILITY OF GAMBLING ESTABLISHMENTS.—A gambling establishment shall not be liable under any Federal or 

State law to any person—

(A) for any disclosure of information to the Secretary 

under this subsection; 

(B) for withholding or surrendering gambling winnings 

in accordance with this subsection; or 

(C) for any other action taken in good faith to comply 

with this subsection. 

(6) DEFINITION OF GAMBLING WINNINGS.—In this subsection, 

the term ‘‘gambling winnings’’ means the proceeds of a wager 

that are subject to reporting under section 6041 of the Internal 

Revenue Code of 1986.

155

FEDERAL PARENT LOCATOR SERVICE

SEC. 453. (a) ESTABLISHMENT; PURPOSE.—

(1) The Secretary shall establish and conduct a Federal Parent Locator Service, under the direction of the designee of the 

Secretary referred to in section 652(a) of this title, which shall 

be used for the purposes specified in paragraphs (2) and (3). 

* * * * * * *

(c) As used in subsection (a), the term ‘‘authorized person’’

means—

(1) any agent or attorney of any State or Indian tribe or tribal organization having in effect a plan approved under this 

part, who has the duty or authority under such plans to seek 

to recover any amounts owed as child and spousal support or 

to seek to enforce orders providing child custody or visitation 

rights (including, when authorized under the State plan, any 

official of a political subdivision); 

* * * * * * *

(i) NATIONAL DIRECTOR OF NEW HIRES.—

(1) IN GENERAL.—In order to assist States in administering 

programs under State plans approved under this part and programs funded under part A, and for the other purposes specified in this section, the Secretary shall, not later than October 

1, 1997, establish and maintain in the Federal Parent Locator 

Service an automated directory to be known as the National 

Directory of New Hires, which shall contain the information 

supplied pursuant to section 453A(g)(2). 

* * * * * * *

(4) LIST OF MULTISTATE EMPLOYERS.—The Secretary shall 

maintain within the National Directory of New Hires a list of 

multistate employers that report information regarding newly 

hired employees pursuant to section 453A(b)(1)(B), and the 

State which each such employer has designated to receive such 

information.

(5) CALCULATION OF EMPLOYMENT CREDIT FOR PURPOSES OF

DETERMINING STATE WORK PARTICIPATION RATES UNDER

TANF.—The Secretary may use the information in the National 

Director of New Hires for purposes of calculating State employment credits pursuant to section 407(b)(2).

(j) INFORMATION COMPARISONS AND OTHER DISCLOSURES.—

(1) VERIFICATION BY SOCIAL SECURITY ADMINISTRATION.—

(A) IN GENERAL.—The Secretary shall transmit information on individuals and employers maintained under this 

section to the Social Security Administration to the extent 

necessary for verification accordance with subparagraph 

(B). 

* * * * * * *

(6) INFORMATION COMPARISONS AND DISCLOSURE FOR ENFORCEMENT OF OBLIGATIONS ON HIGHER EDUCATION ACT LOANS

AND GRANTS.—

(A) FURNISHING OF INFORMATION BY THE SECRETARY OF

EDUCATION.—The Secretary of Education shall furnish to 

156

the Secretary, on a quarterly basis or at such less frequent 

intervals as may be determined by the Secretary of Education, information in the custody of the Secretary of Education for comparison with information in the National Directory of New Hires, in order to obtain the information in 

such directory with respect to individuals who—

* * * * * * *

(F) REIMBURSEMENT OF HHS COSTS.—The Secretary of 

Education shall reimburse the Secretary, in accordance 

with subsection (k)(3), for the øadditional¿ costs incurred 

by the Secretary in furnishing the information requested 

under this subparagraph.

(7) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST IN

ADMINISTRATION OF UNEMPLOYMENT COMPENSATION PRO- GRAMS.—

(A) IN GENERAL.—If, for purposes of administering an 

unemployment compensation program under Federal or 

State law, a State agency responsible for the administration of such program transmits to the Secretary the name 

and social security account number of an individual, the 

Secretary shall disclose to the State agency information on 

the individual and the individual’s employer that is maintained in the National Directory of New Hires, subject to 

the succeeding provisions of this paragraph. 

(B) CONDITION ON DISCLOSURE BY THE SECRETARY.—The 

Secretary shall make a disclosure under subparagraph (A) 

only to the extent that the Secretary determines that the 

disclosure would not interfere with the effective operation of 

the program under this part. 

(C) USE AND DISCLOSURE OF INFORMATION BY STATE

AGENCIES.— (i) IN GENERAL.—A State agency may not use or disclose information provided under this paragraph except 

for purposes of administering a program referred to in 

subparagraph (A). 

(ii) INFORMATION SECURITY.—A State agency to 

which information is provided under this paragraph 

shall have in effect data security and control policies 

that the Secretary finds adequate to ensure the security 

of information obtained under this paragraph and to 

ensure that access to such information is restricted to 

authorized persons for purposes of authorized uses and 

disclosures. 

(iii) PENALTY FOR MISUSE OF INFORMATION.—An officer or employee of a State agency who fails to comply 

with this subparagraph shall be subject to the sanctions under subsection (l)(2) to the same extent as if 

such officer or employee was an officer or employee of 

the United States. 

(D) PROCEDURAL REQUIREMENTS.—A State agency requesting information under this paragraph shall adhere to 

uniform procedures established by the Secretary governing 

information requests and data matching under this paragraph. 

157

(E) REIMBURSEMENT OF COSTS.—A State agency shall reimburse the Secretary, in accordance with subsection (k)(3), 

for the costs incurred by the Secretary in furnishing the information requested under this paragraph.

(k) FEES.— (1) FOR SSA VERIFICATION.—The Secretary shall reimburse 

the Commissioner of Social Security, at a rate negotiated between the Secretary and the Commissioner, for the costs incurred by the Commissioner in performing the verification 

services described in subsection (j). 

(2) FOR INFORMATION FROM STATE DIRECTORIES OF NEW

HIRES.—The Secretary shall reimburse costs incurred by State 

directories of new hires in furnishing information as required 

by section 453A(g)(2), at rates which the Secretary determines 

to be reasonable (which rates shall not include payment for the 

costs of obtaining, compiling, or maintaining such information). 

(3) FOR INFORMATION AND ENFORCEMENT SERVICES FUR- NISHED TO STATE AND FEDERAL AGENCIES.—A State or Federal 

agency that receives information or enforcement services from 

the Secretary pursuant to this section or subsection (l), (m), or 

(n) shall reimburse the Secretary for costs incurred by the Secretary øin furnishing the information¿ in furnishing such information or enforcement services, at rates which the Secretary 

determines to be reasonable (which rates shall include payment for the costs of obtaining, verifying, maintaining, and 

comparing the information). 

ø(l) RESTRICTION ON DISCLOSURE AND USE.— ø(1) IN GENERAL.—Information in the Federal Parent Locator 

Service, and information resulting from comparisons using 

such information, shall not be used or disclosed except as expressly provided in this section, subject to section 6103 of the 

Internal Revenue Code of 1986. 

ø(2) PENALTY FOR MISUSE OF INFORMATION IN THE NATIONAL

DIRECTORY OF NEW HIRES.—The Secretary shall require the imposition of an administrative penalty (up to and including dismissal from employment), and a fine of $1,000, for each act of 

unauthorized access to, disclosure of, or use of, information in 

the National Directory of New Hires established under subsection (i) by any officer or employee of the United States who 

knowingly and willfully violates this paragraph.¿

(l) IDENTIFICATION AND SEIZURE OF ASSETS HELD BY MULTISTATE

FINANCIAL INSTITUTIONS.—

(1) IN GENERAL.—The Secretary, through the Federal Parent 

Locator Service, is authorized—

(A) to assist State agencies operating programs under 

this part and financial institutions doing business in 2 or 

more States in reaching agreements regarding the receipt 

from such institutions, and the transfer to the State agencies, of information that may be provided pursuant to section 466(a)(17)(A)(i) or 469A(a); 

(B) to perform data matches comparing information from 

such State agencies and financial institutions entering into 

such Agreements with respect to individuals owing pastdue support; and 

158

(C) to seize assets, held by such financial institutions, of 

individuals identified through such data matches who owe 

past-due support, by—

(i) issuing a notice of lien or levy to such financial 

institutions requiring them to encumber such assets for 

30 calendar days and to subsequently transfer such assets to the Secretary (except that the Secretary shall 

promptly release such lien or levy within such 30-day 

period upon request of the State agencies responsible 

for collecting past-due support from such individuals); 

and 

(ii) providing notice to such individuals of the lien or 

levy upon their assets and informing them—

(I) of their procedural due process rights, including the opportunity to contest such lien or levy to 

the appropriate State agency; and 

(II) in the case of jointly-owned assets, of the 

process by which other owners may secure their respective share of such assets, according to such 

policies and procedures as the Secretary may specify with respect to seizure of such assets. 

(2) TRANSFER OF FUNDS TO STATES.—Assets seized from individuals under paragraph (1)(C) shall be promptly transferred 

by the Secretary to the State agencies responsible for collecting 

past-due support from such individuals for distribution pursuant to section 457. 

(3) RELATIONSHIP TO STATE LAWS.—Notwithstanding any provision of State law, an individual receiving a notice under 

paragraph (1)(C) shall have 21 calendar days from the date of 

such notice to contest the lien or levy imposed under such paragraph by requesting an administrative review by the State 

agency responsible for collecting past-due support from such individual. 

(4) TREATMENT OF DISCLOSURES.—For purposes of section 

1113(d) of the Right to Financial Privacy Act of 1978, a disclosure pursuant to this subsection shall be considered a disclosure pursuant to a Federal statute.

* * * * * * *

(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 subVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00158 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
159

section øfor 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—

* * * * * * *

(C) provide that no applications will be required from, 

and no costs will be assessed for such services against, the 

foreign reciprocating country or foreign obligee (but costs 

may of State option be assessed against the obligor); øand¿

(33) provide that a State øthat receives funding pursuant to 

section 428 and¿ that has within its borders Indian country (as 

defined in section 1151 of title 18, United States Code) may 

enter into cooperative agreements with an Indian tribe or tribal organization (as defined in subsections (e) and (l) of section 

4 of the Indian Self-Determination and Education Assistance 

Act (25 U.S.C. 450b)), if the Indian tribe or tribal organization 

demonstrates that such tribe or organization has an established tribal court system or a Court of Indian Offenses with 

the authority to establish paternity, establish, modify, or enforce support orders or, and to enter support orders in accordance with child support guidelines established or adopted by 

such tribe or organization, under which the State and tribe or 

organization, under which the State and tribe or organization 

shall provide for the cooperative delivery of child support enforcement services in Indian country and for the forwarding of 

all collections pursuant to the functions performed by the tribe 

or organization to the State agency, or conversely, by the State 

agency to the tribe or organization, which shall distribute such 

collections in accordance with such agreementø.¿; and

(34) include an election by the State to apply section 

457(a)(2)(B) of this Act or former section 457(a)(2)(B) of this Act 

(as in effect for the State immediately before the date this paragraph first applies to the State) to the distribution of the 

amounts which are the subject of such sections and, for so long 

as the State elects to so apply such former section, the amendments made by section 301(b) of the Personal Responsibility 

and Individual Development for Everyone Act shall not apply 

with respect to the State, notwithstanding section 301(e) of that 

Act.

The State may allow the jurisdiction which makes the collection involved to retain any application fee under paragraph (6)(B) or any 

late payment fee under paragraph (21). Nothing in paragraph (33) 

shall void any provision of any cooperative agreement entered into 

before the date of the enactment of such paragraph, nor shall such 

paragraph deprive any State of jurisdiction over Indian country (as 

so defined) that is lawfully exercised under section 402 of the Act 

entitled ‘‘An act to prescribe penalties for certain acts of violence 

or intimidation, and for other purposes’’, approved April 11, 1968 

(25 U.S.C. 1322). 

* * * * * * *

160

PAYMENTS TO STATES

SEC. 455 (a)(1) From the sums appropriated therfor, the Secretary shall pay to each State for each quarter an amount—

* * * * * * *

(f) The Secretary may make direct payments under this part to 

an Indian tribe or tribal organization that demonstrates to the satisfaction of the Secretary that it has the capacity to operate a child 

support enforcement program meeting the objective of this part, including establishment of paternity, establishment, modification, 

and enforcement of support orders, øand location of absent parents¿ location of absent parents, and interception of gambling 

winnings consistent with the requirements of sections 452(n) and 

466(a)(20). The Secretary shall promulgate regulations establishing 

the requirements which must be met by an Indian tribe or tribal 

organization to be eligible for a grant under this subsection. 

* * * * * * *

DISTRIBUTION OF COLLECTED SUPPORT

SEC. 457. ø(a) IN GENERAL.—Subject to subsections (d) and (e), 

an amount collected on behalf of a family as support by a State 

pursuant to a plan approved under this part shall be distributed 

as follows: 

ø(1) FAMILIES RECEIVING ASSISTANCE.—In the case of a family receiving assistance from the State, the State shall— ø(A) pay to the Federal Government the Federal share 

of the amount so collected; and 

ø(B) retain, or distribute to the family, the State share 

of the amount so collected. 

øIn no event shall the total of the amounts paid to the 

Federal Government and retained by the State exceed the 

total of the amounts that have been paid to the family as 

assistance by the State. 

ø(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.—In the 

case of a family that formerly received assistance from the 

State: 

ø(A) CURRENT SUPPORT PAYMENTS.—To the extent that 

the amount so collected does not exceed the amount required to be paid to the family for the month in which collected, the State shall distribute the amount so collected to 

the family.

ø(B) PAYMENTS OF ARREARAGES.—To the extent that the 

amount so collected exceeds the amount required to be 

paid to the family for the month in which collected, the 

State shall distribute the amount so collected as follows: 

ø(i) DISTRIBUTION OF ARREARAGES THAT ACCRUED

AFTER THE FAMILY CEASED TO RECEIVE ASSISTANCE.—

ø(I) PRE-OCTOBER 1997.—Except as provided in 

subclause (II), the provisions of this section as in 

effect and applied on the day before the date of 

the enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation 

Act of 1996 (other than subsection (b)(1) (as so in 

161

effect))97 shall apply with respect to the distribution of support arrearages that— ø(aa) accrued after the family ceased to receive assistance, and 

ø(bb) are collected before October 1, 1997. 

ø(II) POST-SEPTEMBER 1997.—With respect to the 

amount so collected on or after October 1, 1997 (or 

before such date, at the option of the State— ø(aa) IN GENERAL.—The State shall first 

distribute the amount so collected (other than 

any amount described in clause (iv)) to the 

family to the extent necessary to satisfy any 

support arrearages with respect to the family 

that accrued after the family ceased to receive 

assistance from the State. 

ø(bb REIMBURSEMENT OF GOVERNMENTS FOR

ASSISTANCE PROVIDED TO THE FAMILY.—After 

the application of division (aa) and clause 

(ii)(II)(aa) with respect to the amount so collected, the State shall retain the State share 

of the amount so collected, and pay to the 

Federal Government the Federal share (as defined in subsection (c)(2)) of the amount so 

collected, but only to the extent necessary to 

reimburse amounts paid to the family as assistance by the State. 

ø(cc) DISTRIBUTION OF THE REMAINDER TO

THE FAMILY.—To the extent that neither division (aa) nor division (bb) applies to the 

amount so collected, the State shall distribute 

the amount to the family. 

ø(ii) DISTRIBUTION OF ARREARAGES THAT ACCRUED

BEFORE THE FAMILY RECEIVED ASSISTANCE.— ø(I) PRE-OCTOBER 2000.—Except as provided in 

subclause (II), the provisions of this section as in 

effect and applied on the day before the date of 

enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation Act of 

1996 (other than subsection (b)(1) (as so in effect)) 

shall apply with respect to the distribution of support arrearages that—

ø(aa) accrued before the family received assistance, and 

ø(bb) area collected before October 1, 2000. 

ø(II) POST-SEPTEMBER 2000.—Unless, based on 

the report required by paragraph (5), the Congress 

determines otherwise, with respect to the amount 

so collected on or after October 1, 2000 (or before 

such date, at the point of the State)— ø(aa) IN GENERAL.—The State shall first 

distribute the amount so collected (other than 

any amount described in clause (iv)) to the 

family to the extent necessary to satisfy any 

support arrearages with respect to the family 

162

that accrued before the family received assistance from the State. 

ø(bb) REIMBURSEMENT OF GOVERNMENT FOR

ASSISTANCE PROVIDED TO THE FAMILY.—After 

the application of clause (i)(II)(aa) and division (aa) with respect to the amount so collected, the State shall retain the State share 

of the amount so collected, and pay to the 

Federal Government the Federal share (as defined in subsection (c)(2)) of the amount so 

collected, but only to the extent necessary to 

reimburse amounts paid to the family as assistance by the State. 

ø(cc) DISTRIBUTION OF THE REMAINDER TO

THE FAMILY.—To the extent that neither division (aa) nor division (bb) applies to the 

amount so collected, the State shall distribute 

the amount to the family. 

ø(iii) DISTRIBUTION OF ARREARAGES THAT ACCRUED

WHILE THE FAMILY RECEIVED ASSISTANCE.—In the case 

of a family described in this subparagraph, the provisions of paragraph (1) shall apply with respect to the 

distribution of support arrearages that accrued while 

the family received assistance. 

ø(iv) AMOUNTS COLLECTED PURSUANT TO SECTION

464.—Notwithstanding any other provision of this section, any amount of support collected pursuant to section 464 shall be retained by the State to the extent 

past—due support has been assigned to the State as 

a condition of receiving assistance from the State, up 

to the amount necessary to reimburse the State for 

amounts paid to the family as assistance by the State. 

The State shall pay to the Federal Government the 

Federal share of the amounts so retained. To the extent the amount collected pursuant to section 464 exceeds the amount so retained, the State shall distribute the excess to the family. 

ø(v) ORDERING RULES FOR DISTRIBUTIONS.—For purposes of this subparagraph, unless an earlier effective 

date is required by this section, effective October 1, 

2000, the State shall treat any support arrearages collected, except for amounts collected pursuant to section 464, as accruing in the following order: 

ø(I) To the period after the family ceased to receive assistance. 

ø(II) To the period before the family received assistance. 

ø(III) To the period while the family was receiving assistance. 

ø(3) FAMILIES THAT NEVER RECEIVED ASSISTANCE.—In the 

case of any other family, the State shall distribute the amount 

so collected to the family. 

ø(4) FAMILIES UNDER CERTAIN AGREEMENTS.—In the case of 

an amount collected for a family in accordance with a cooperaVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00162 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
163

tive agreement under section 454(33), distribute the amount so 

collected pursuant to the terms of the agreement. 

ø(5) STUDY AND REPORT.—Not later than October 1, 1999, 

the Secretary shall report to the Congress the Secretary’s findings with respect to—

ø(A) whether the distribution of post-assistance arrearages to families has been effective in moving people off of 

welfare and keeping them off of welfare; 

ø(B) whether early implementation of a pre-assistance 

arrearages program by some States has been effective in 

moving people off of welfare and keeping them off of welfare; 

ø(C) what the overall impact has been of the amendments made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 with respect to child 

support enforcement in moving people off of welfare and 

keeping them off of welfare; and 

ø(D) based on the information and data the Secretary 

has obtained, what changes, if any, should be made in the 

policies related to the distribution of child support arrearages. 

ø(6) STATE OPTION FOR APPLICABILITY.—Notwithstanding any 

other provision of this subsection, a State may elect to apply 

the rules described in clauses (i)(II), (ii)(II), and (v) of paragraph (2)(B) to support arrearages collected on and after October 1, 1998, and, if the State makes such an election, shall 

apply the provisions of this section, as in effect and applied on 

the day before the date of enactment of section 302 of the Personal Responsibility and Work Opportunity Reconciliation Act 

of 1996 (Public Law 104–193, 110 Stat. 2200), other than subsection (b)(1) (as so in effect), to amounts collected before October 1, 1998.¿

(a) IN GENERAL.—Subject to subsections (d) and (e), the amounts 

collected on behalf of a family as support by a State pursuant to a 

plan approved under this part shall be distributed as follows: 

(1) FAMILIES RECEIVING ASSISTANCE.—In the case of a family 

receiving assistance from the State, the State shall—

(A) pay to the Federal Government the Federal share of 

the amount collected, subject to paragraph (3)(A); 

(B) retain, or pay to the family, the State share of the 

amount collected, subject to paragraph (3)(B); and 

(C) pay to the family any remaining amount. 

(2) FAMILIES THAT FORMERLY RECEIVED ASSISTANCE.—In the 

case of a family that formerly received assistance from the 

State: 

(A) CURRENT SUPPORT.—To the extent that the amount 

collected does not exceed the current support amount, the 

State shall pay the amount to the family. 

(B) ARREARAGES.—Except as otherwise provided in an 

election made under section 454(34), to the extent that the 

amount collected exceeds the current support amount, the 

State—

164

(i) shall first pay to the family the excess amount, to 

the extent necessary to satisfy support arrearages not 

assigned pursuant to section 408(a)(3); 

(ii) if the amount collected exceeds the amount required to be paid to the family under clause (i), shall—

(I) pay to the Federal Government the Federal 

share of the excess amount described in this clause, 

subject to paragraph (3)(A); and 

(II) retain, or pay to the family, the State share 

of the excess amount described in this clause, subject to paragraph (3)(B); and 

(iii) shall pay to the family any remaining amount. 

(3) LIMITATIONS.—

(A) FEDERAL REIMBURSEMENTS.—The total of the 

amounts paid by the State to the Federal Government 

under paragraphs (1) and (2) of this subsection with respect to a family shall not exceed the Federal share of the 

amount assigned with respect to the family pursuant to section 408(a)(3).

(B) STATE REIMBURSEMENTS.—The total of the amounts 

retained by the State under paragraphs (1) and (2) of this 

subsection with respect to a family shall not exceed the 

State share of the amount assigned with respect to the family pursuant to section 408(a)(3). 

(4) FAMILIES THAT NEVER RECEIVED ASSISTANCE.—In the case 

of any other family, the State shall pay the amount collected to 

the family. 

(5) FAMILIES UNDER CERTAIN AGREEMENTS.—Notwithstanding paragraphs (1) through (3), in the case of an amount 

collected for a family in accordance with a cooperative agreement under section 454(33), the State shall distribute the 

amount collected pursuant to the terms of the agreement. 

(6) STATE FINANCING OPTIONS.—To the extent that the State’s 

share of the amount payable to a family pursuant to paragraph 

(2)(B) of this subsection exceeds the amount that the State estimates (under procedures approved by the Secretary) would have 

been payable to the family pursuant to former section 

457(a)(2)(B) (as in effect for the State immediately before the 

date this subsection first applies to the State) if such former section had remained in effect, the State may elect to have the payment considered a qualified State expenditure for purposes of 

section 409(a)(7). 

(7) STATE OPTION TO PASS THROUGH ADDITIONAL SUPPORT

WITH FEDERAL FINANCIAL PARTICIPATION.—

(A) FAMILIES THAT ARE NOT TANF RECIPIENTS.—Notwithstanding paragraph (2), a State shall not be required to 

pay to the Federal Government the Federal share of an 

amount collected on behalf of a family that is a former recipient of assistance under the State program funded under 

part A, to the extent that the State pays the amount to the 

family. 

(B) FAMILIES THAT INCLUDE AN ADULT AND HAVE RECEIVED TANF FOR LESS THAN 5 YEARS.—

165

(i) IN GENERAL.—Notwithstanding paragraph (1), if 

a family that is a recipient of assistance under the 

State program funded under part A includes an adult 

and the family has received such assistance for not 

more than 5 years after the date of enactment of this 

paragraph, a State shall not be required to pay to the 

Federal Government the Federal share of the excepted 

portion (as defined in clause (ii)) of any amount collected on behalf of such family during a month to the 

extent that— (I) the State pays the excepted portion to the 

family; and 

(II) the excepted portion is disregarded in determining the amount and type of assistance provided 

to the family under such program. 

(ii) EXCEPTED PORTION DEFINED.—For purposes of 

this subparagraph, the term ‘‘excepted portion’’ means 

that portion of the amount collected on behalf of a family during a month that does not exceed $400 per 

month, or in the case of a family that includes 2 or 

more children, that does not exceed an amount established by the State that is at least $400, but not more 

than $600 per month. 

(8) STATES WITH DEMONSTRATION WAIVERS.—Notwithstanding the preceding paragraphs, a State with a waiver 

under section 1115 that was effective on or before October 1, 

1997, and the terms of which allow pass-through of child support payments, may pass through payments in accordance with 

such terms with respect to families subject to the waiver.

(B) foster care maintenance payments under the State 

plan approved under part E of this title. 

(2) FEDERAL SHARE.—The term ‘‘Federal share’’ means that 

portion of the amount collected resulting from the application 

of the Federal medical assistance percentage in effect for the 

fiscal year in which the amount is distributed. 

(3) FEDERAL MEDICAL ASSISTANCE PERCENTAGE.—The term ‘‘Federal medical assistance percentage’’ means— (A) 75 percent, in the case of Puerto Rico, the Virgin Islands, Guam, and American Samoa; or 

(B) the Federal medical assistance percentage (as defined in section 1905(b), as such section was in effect on 

September 30, 1995) in the case of any other State. 

(4) STATE SHARE.—The term ‘‘State share’’ means 100 percent minus the Federal share.

(5) CURRENT SUPPORT AMOUNT.—The term ‘‘current support 

amount’’ means, with respect to amounts collected as support on 

behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring 

the support.

ø(b) CONTINUATION OF ASSIGNMENTS.—Any rights to support obligations, assigned to a State as a condition of receiving assistance 

from the State under part A and in effect on September 30, 1997 

(or such earlier date, on or after August 22, 1996, as the State may 

choose), shall remain assigned after such date.¿

166

(b) CONTINUATION OF ASSIGNMENTS.— (1) STATE OPTION TO DISCONTINUE PRE-1997 SUPPORT ASSIGN- MENTS.—

(A) IN GENERAL.—Any rights to support obligations assigned to a State as a condition of receiving assistance from 

the State under part A and in effect on September 30, 1997 

(or such earlier date on or after August 22, 1996, as the 

State may choose), may remain assigned after such date. 

(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DIS- CONTINUATION.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant 

to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in 

accordance with subsection (a)(4). 

(2) STATE OPTION TO DISCONTINUE POST-1997 ASSIGNMENTS.— (A) IN GENERAL.—Any rights to support obligations accruing before the date on which a family first receives assistance under part A that are assigned to a State under 

that part and in effect before the implementation date of 

this section may remain assigned after such date. 

(B) DISTRIBUTION OF AMOUNTS AFTER ASSIGNMENT DIS- CONTINUATION.—If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected pursuant 

to such assignment as if such amounts had never been assigned and may distribute such amounts to the family in 

accordance with subsection (a)(4). 

* * * * * * *

CONSENT BY THE UNITED STATES TO INCOME WITHHOLDING, GARNISHMENT, AND SIMILAR PROCEEDINGS FOR ENFORCEMENT OF

CHILD SUPPORT AND ALIMONY OBLIGATIONS

SEC. 459. (a) CONSENT TO SUPPORT ENFORCEMENT.—***

* * * * * * *

(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) compensation payable for personal services of the 

individual, whether the compensation is denominated 

as wages, salary, commission, bonus, pay, allowances, 

or otherwise (including severance pay, sick pay, and 

incentive pay); 

(ii) periodic benefits (including a periodic benefit as 

defined in section 228(h)(3)) or other payments— (I) under the insurance system established by 

title II; 

* * * * * * *

(V) by the Secretary of Veterans Affairs as compensation for a service-connected disability paid 

167

by the Secretary to a former member of the Armed 

Forces øwho 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;¿ except that such compensation 

shall not subject to withholding pursuant 

* * * * * * *

COLLECTION OF PAST-DUE SUPPORT FROM FEDERAL TAX REFUNDS

SEC. 464. (a)(1) Upon receiving notice from a State agency administering a plan approved under this part that a named individual owes past-due support which has been assigned to such 

State pursuant to section 408(a)(3) or section 471(a)(17), 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 the past-due support, 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), and shall pay such amount to the State 

agency (together with notice of the individual’s home address) for 

distribution in accordance with section 457. This subsection may be 

executed by the disbursing official of the Department of the Treasury. 

(2)(A) Upon receiving notice from a State agency administering 

a plan approved under this part that a named individual owes 

past-due support øas 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 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 cost 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 subVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00167 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
168

section may be executed by the Secretary of the Department of the 

Treasury or his designee. 

* * * * * * *

(c) ø(1) Except as provided in paragraph (2), as used in¿ In this 

part the term ‘‘past-due support’’ means the amount of a delinquency, determined under a court order, or an order of an administrative process established under State law, for support and maintenance of a child (whether or not a minor), or of a child (whether 

or not a minor) and the parent with whom the child is living. 

ø(2) For purposes of subsection (a)(2), the term ‘‘past-due support’’ means only past-due support owed to or on behalf of a qualified child (or a qualified child and the parent with whom the child 

is living if the same support order includes support for the child 

and the parent). 

ø(3) For purposes of paragraph (2), the term ‘‘qualified child’’ means a child—¿

ø(A) who is a minor; or 

ø(B)(i) who, while a minor, was determined to be disabled under title II or XVI; and 

ø(ii) for whom an order of support is in force.¿

* * * * * * *

REQUIREMENT OF STATUTORILY PRESCRIBED PROCEDURES TO

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)(A) Procedures described in subsection (b) for the withholding from income of amounts payable as support in cases 

subject to enforcement under the State plan. 

* * * * * * *

(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 øparent, or,¿ parent 

or if there is an assignment under part A, øupon the 

request of the State agency under the State plan or of 

either parent,¿ the State shall with respect to a support order being enforced under this part, taking into 

account the best interests of the child involved—

* * * * * * *

(14) HIGH-VOLUME, AUTOMATED ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.—

(A) IN GENERAL.—Procedures under which—

(i) the State shall use high-volume automated administrative enforcement, to the same extent as used 

for intrastate cases, in response to a request made by 

another State to enforce support orders, and shall 

169

promptly report the results of such enforcement procedure to the requesting State; 

* * * * * * *

(iii) if the State provides assistance to another State 

pursuant to this paragraph with respect to a case, neither State shall consider the case to be transferred to 

the caseload of such other State (but the assisting 

State may establish a corresponding case based on 

such other State’s request for assistance); and 

(iv) the State shall maintain records of— (I) the number of such requests for assistance 

received by the State; 

* * * * * * *

(17) FINANCIAL INSTITUTION DATA MATCHES.— (A) IN GENERAL.—Procedures under which the State 

agency shall enter into agreements with financial institutions doing business in the State— (i) to develop and operate, in coordination with such 

financial institutions, and the Federal Parent Locator 

Service pursuant to section 452(l) in the case of financial institutions doing business in two or more States, 

a data match system, using automated data exchanges 

to the maximum extent feasible, in which each such financial institution is required to provide for each calendar quarter the name, record address, social security number or other taxpayer identification number, 

and other identifying information for each noncustodial parent who maintains an account at such institution and who owes past-due support, as identified by 

the State by name and social security number or other 

taxpayer identification number; and 

(ii) in response to a notice of lien or levy issued by 

the State agency or by the Secretary under section 

452(l), encumber or surrender, as the case may be, assets held by such institution on behalf of any noncustodial parent who is subject to a child support lien 

pursuant to paragraph (4). 

(B) REASONABLE FEES.—The State agency may pay a 

reasonable fee to a financial institution for conducting the 

data match provided for in subparagraph (A)(i), not to exceed the actual costs incurred by such financial institution. 

(C) LIABILITY.—A financial institution shall not be liable 

under any Federal or State law to any person—

(i) for any disclosure of information to the State 

agency or to the Federal Parent Locator Service under 

subparagraph (A)(i); 

(ii) for encumbering or surrendering any assets held 

by such financial institution in response to a notice of 

lien or levy øissued by the State agency¿ as provided 

for in subparagraph (A)(ii); or 

(iii) for any other action taken in good faith to comply with the requirements of subparagraph (A). 

(D) DEFINITIONS.—For purposes of this paragraph—

170

(i) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ has the meaning given to such term by section 469A(d)(1). 

(ii) ACCOUNT.—The term ‘‘account’’ means a demand 

deposit account, checking or negotiable withdrawal 

order account, savings account, time deposit account, 

or money-market mutual fund account. 

(18) ENFORCEMENT OF ORDERS AGAINST PATERNAL OR MATERNAL GRANDPARENTS.—Procedures under which, at the State’s 

option, any child support order enforced under this part with 

respect to a child of minor parents, if the custodial parent of 

such child is receiving assistance under the State program 

under part A, shall be enforceable, jointly and severally, 

against the parents of the noncustodial parent of such child. 

(19) HEALTH CARE COVERAGE.—Procedures under which all 

child support orders enforced pursuant to this part shall include a provision for the health care coverage of the child, and 

in the case in which a noncustodial parent provides such coverage and changes employment, and the new employer provides health care coverage, the State agency shall transfer notice of the provision to the employer, which notice shall operate 

to enroll the child in the noncustodial parent’s health plan, unless the noncustodial parent contests the notice.

(20) INTERCEPTION OF GAMBLING WINNINGS.—Procedures 

under which—

(A) gambling establishments subject to the laws of the 

State are required to comply with the provisions of section 

452(n), and are subject to sanctions for failure to comply, 

which shall include liability in an amount equal to the 

amount the establishment would have withheld if it so 

complied; 

(B) noncustodial parents owing past-due support are provided with written notice that gambling winnings may be 

subject to withholding for past-due support under section 

452(n); and 

(C) cases where such noncustodial parents contest the 

State’s determination with respect to past-due support are 

promptly resolved, and expedited refund is made of any 

amounts erroneously seized under such section 452(n). 

* * * * * * *

(f) UNIFORM INTERSTATE FAMILY SUPPORT ACT.—In order to satisfy section 454(20)(A), on any after January 1, 1998, each State 

must have in effect the Uniform Interstate Family Support Act, as 

approved by the American Bar Association on February 9, 1993, 

øand as in effect on August 22, 1996¿ including any amendments 

officially øadopted as of such date¿ adopted as of August, 2001 by 

the National Conference of Commissioners on Uniform State Laws. 

* * * * * * *

171

NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL

RECORDS TO STATE CHILD SUPPORT ENFORCEMENT AGENCIES IN

CHILD SUPPORT CASES

SEC. 469A (a) IN GENERAL.—Notwithstanding any other provision of Federal or State law, a financial institution shall not be liable under any Federal or State law to any person for disclosing any 

financial record of an individual to a State child support enforcement agency attempting to establish, modify, or enforce a child 

support obligation of such individual, or for disclosing any such 

record to the Federal Parent Locator Service pursuant to section 

452(l) or section 466(a)(17)(A). 

* * * * * * *

GRANTS TO STATES AND INDIAN TRIBES FOR ACCESS AND VISITATION

PROGRAMS

SEC. 469B. (a) IN GENERAL.—The Administration for Children 

and Families shall make grants under this section to enable States 

and Indian tribes or tribal organizations to establish and administer programs to support and facilitate noncustodial parents’ access to and visitation of their children, by means of activities including mediation (both voluntary and mandatory), counseling, 

education, development of parenting plans, visitation enforcement 

(including monitoring, supervision and neutral dropoff and pickup), 

and development of guidelines for visitation and alternative custody arrangements. 

ø(b) AMOUNT OF GRANT.—The amount of the grant to be made 

to a State under this section for a fiscal year shall be an amount 

equal to the lesser of— ø(1) 90 percent of State expenditures during the fiscal year 

for activities described in subsection (a); or 

ø(2) the allotment of the State under subsection (c) for the 

fiscal year.¿

(b) AMOUNT OF GRANTS.— (1) GRANTS TO STATES.—The amount of the grant to be made 

to a State under this section for a fiscal year shall be an 

amount equal to the lesser of—

(A) 90 percent of State expenditures during the fiscal year 

for activities described in subsection (a); or 

(B) the allotment of the State under subsection (c) for the 

fiscal year. 

(2) GRANTS TO INDIAN TRIBES.—An Indian tribe or tribal organization operating a program under section 455 that has operated such program throughout the preceding fiscal year and 

has an application under this section approved by the Secretary 

shall receive a grant under this section for a fiscal year in an 

amount equal to the allotment of such Indian tribe or tribal organization under subsection (c)(2) for the fiscal year.

ø(c) ALLOTMENTS TO STATES.—

ø(1) IN GENERAL.—The allotment of a State for a fiscal year 

is the amount that bears the same ratio to $10,000,000 for 

grants under this section for the fiscal year as the number of 

children in the State living with only 1 biological parent bears 

to the total number of such children in all States. 

172

ø(2) MINIMUM ALLOTMENT.—The Administration for Children 

and Families shall adjust allotments to States under paragraph (1) as necessary to ensure that no State is allotted less 

than—

ø(A) $50,000 for fiscal year 1997 or 1998; or 

ø(B) $100,000 for any succeeding fiscal year.¿

(c) ALLOTMENTS.— (1) ALLOTMENTS TO STATES.— (A) IN GENERAL.—Subject to the subparagraph (C), the 

allotment of a State for a fiscal year is the amount that 

bears the same ratio to the amount specified in subparagraph (B) for such fiscal year as the number of children in 

the State living with only 1 parent bears to the total number of such children in all States. 

(B) AMOUNT AVAILABLE FOR ALLOTMENT.—For purposes 

of subparagraph (A), the amount specified in this subparagraph is the following amount, reduced by the total allotments to Indian tribes or tribal organizations in accordance 

with paragraph (2): (i) $12,000,000 for fiscal year 2004. 

(ii) $14,000,000 for fiscal year 2005. 

(iii) $16,000,000 for fiscal year 2006. 

(iv) $20,000,000 for fiscal year 2007 and each succeeding fiscal year. 

(C) MINIMUM STATE ALLOTMENT.—The Secretary shall 

adjust allotments to States under subparagraph (A) as necessary to ensure that no State is allotted less than— (i) $120,000 for fiscal year 2004; 

(ii) $140,000 for fiscal year 2005; 

(iii) $160,000 for fiscal year 2006; and 

(iv) $180,000 for fiscal year 2007 and each succeeding fiscal year. 

(2) ALLOTMENTS TO INDIAN TRIBES.— (A) IN GENERAL.—Subject to subparagraph (C), the allotment of an Indian tribe or tribal organization described in 

subsection (b)(2) for a fiscal year is an amount that bears 

the same ratio to the amount specified in subparagraph (B) 

for such fiscal year as the number of children in the Indian 

tribe or tribal organization living with only 1 parent bears 

to the total number of such children in all Indian tribes 

and tribal organizations eligible to receive grants under 

this section for such year. 

(B) AMOUNT AVAILABLE FOR ALLOTMENT.—For purposes 

of subparagraph (A), the amount available under this subparagraph is an amount, deducted from the amount specified in paragraph (1)(B), not to exceed—

(i) $250,000 for fiscal year 2004; 

(ii) $600,000 for fiscal year 2005; 

(iii) $800,000 for fiscal year 2006; and 

(iv) $1,670,000 for fiscal year 2007 and each succeeding year. 

(C) MINIMUM AND MAXIMUM TRIBAL ALLOTMENT.—The 

Secretary shall adjust allotments to Indian tribes and tribal organizations under subparagraph (A) as necessary to 

173

ensure that no Indian tribe or tribal organization is allotted, for a fiscal year, an amount which is less than $10,000 

or more than the minimum State allotment for such fiscal 

year.

(d) NO SUPPLANTATION OF STATE EXPENDITURES FOR SIMILAR AC- TIVITIES.—A State to which a grant is made under this section may 

not use the grant to supplant expenditures by the State for activities specified in subsection (a), but shall use the grant to supplement such expenditures at a level at least equal to the level of such 

expenditures for fiscal year 1995. 

ø(e) STATE ADMINISTRATION.—Each State to which a grant is 

made under this section— ø(1) may administer State programs funded with the grant 

directly or through grants to or contracts with courts, local 

public agencies, or nonprofit private entities; 

ø(2) shall not be required to operate such programs on a 

statewide basis; and 

ø(3) shall monitor, evaluate, and report on such programs in 

accordance with regulations prescribed by the Secretary.¿

(e) ADMINISTRATION.—

(1) GRANTS TO STATES.—Each State to which a grant is made 

under this section—

(A) may administer State programs funded with the 

grant, directly or through grants to or contracts with 

courts, local public agencies, or nonprofit private entities; 

and 

(B) shall not be required to operate such programs on a 

statewide basis. 

(2) GRANTS TO STATES OR INDIAN TRIBES.—Each State or Indian tribe or tribal organization to which a grant is made 

under this section shall monitor, evaluate, and report on such 

programs in accordance with regulations prescribed by the Secretary. 

* * * * * * *

TITLE V—MATERNAL AND CHILD HEALTH SERVICES 

BLOCK GRANT 

* * * * * * *

SEPARATE PROGRAM FOR ABSTINENCE EDUCATION

SEC. 510. (a) For the purpose described in subsection (b), the Secretary shall, for fiscal year 1998 and each subsequent fiscal year, 

allot to each State which has transmitted øan application for the 

fiscal year under section 505(a)¿, for the fiscal year, an application 

under section 505(a), and an application under this section (in such 

form and meeting such terms and conditions as determined appropriate by the Secretary), an amount equal to the product of—

(1) the amount appropriated in subsection (d) for the fiscal 

year; and

ø(2) the percentage determined for the State under section 

502(c)(1)(B)(ii).¿

(2) the percentage described in section 502(c)(1)(B)(ii) that 

would be determined for the State under section 502(c) if such 

174

determination took into consideration only those States that 

transmitted both such applications for such fiscal year.

(b)(1) The purpose of an allotment under subsection(a) to a State 

is to enable the State to provide abstinence education, and at the 

option of the State, where appropriate, mentoring, counseling, and 

adult supervision to promote abstinence from sexual activity, with 

a focus on those groups which are most likely to bear children outof-wedlock. 

(2) For purposes of this section, the term ‘‘abstinence education’’ means an educational or motivational program which— (A) has as its exclusive purpose, teaching the social, psychological, and health gains to be realized by abstaining from sexual activity; 

(B) teaches abstinence from sexual activity outside marriage 

as the expected standard for all school age children; 

(C) teaches that abstinence from sexual activity is the only 

certain way to avoid out-of-wedlock pregnancy, sexually transmitted diseases, and other associated health problems; 

(D) teaches that a mutually faithful monogamous relationship in context of marriage is the expected standard of human 

sexual activity; 

(E) teaches that sexual activity outside of the context of marriage is likely to have harmful psychological and physical effects; 

(F) teaches that bearing children out-of-wedlock is likely to 

have harmful consequences for the child, the child’s parents, 

and society; 

(G) teaches young people how to reject sexual advances and 

how alcohol and drug use increases vulnerability to sexual advances; and 

(H) teaches the importance of attaining self-sufficiency before 

engaging in sexual activity. 

(c)(1) Sections 503, 507, and 508 apply to allotments under subsection (a) to the same extent and in the same manner as such sections apply to allotments under section 502(c). 

(2) Sections 505 and 506 apply to allotments under subsection (a) 

to the extent determined by the Secretary to be appropriate. 

(d) For the purpose of allotments under subsection (a), there is 

appropriated, out of any money in the Treasury not otherwise appropriated, an additional $50,000,000 for each of the fiscal years 

1998 through ø2003¿ 2008. The appropriation under the preceding 

sentence for a fiscal year is made on October 1 of the fiscal year.

(e)(1) With respect to allotments under subsection (a) for fiscal 

year 2004 and subsequent fiscal years, the amount of any allotment 

to a State for a fiscal year that the Secretary determines will not 

be required to carry out a program under this section during such 

fiscal year or the succeeding fiscal year shall be available for reallotment from time to time during such fiscal years on such dates as 

the Secretary may fix, to other States that the Secretary determines—

(A) require amounts in excess of amounts previously allotted 

under subsection (a) to carry out a program under this section; 

and 

(B) will use such excess amounts during such fiscal years. 

175

(2) Reallotments under paragraph (1) shall be made on the basis 

of such States’ applications under this section, after taking into consideration the population of low-income children in each such State 

as compared with the population of low-income children in all such 

States with respect to which a determination under paragraph (1) 

has been made by the Secretary. 

(3) Any amount reallotted under paragraph (1) to a State is 

deemed to be part of its allotment under subsection (a).

TITLE XI—GENERAL PROVISIONS, PEER REVIEW, AND 

ADMINISTRATIVE SIMPLIFICATION 

* * * * * * *

ADDITIONAL GRANTS TO PUERTO RICO, THE VIRGIN ISLANDS, GUAM, 

AND AMERICAN SAMOA; LIMITATION ON TOTAL PAYMENTS

SEC. 1108. (a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY.—

(1) IN GENERAL.—Notwithstanding any other provision of 

this Act (except for paragraph (2) of this subsection), the total 

amount certified by the Secretary of Health and Human Services under titles I, X, XIV, and XVI, under parts A and E of 

title IV, and under subsection (b) of this section, for payment 

to any territory for a fiscal year shall not exceed the ceiling 

amount for the territory for the fiscal year. 

(2) CERTAIN PAYMENTS DISREGARDED.—øParagraph (1)¿ (A) 

IN GENERAL.—Paragraph (1) of this subsection shall be applied 

without regard to any payment made under section 403(a)(2), 

403(a)(4), 403(a)(5), ø406, or¿ 413(f), 418(a)(4)(B), or subject to 

clause (ii) of subparagraph (B), payments to Puerto Rico described in clause (i) of that subparagraph.

(B) CERTAIN PAYMENTS TO PUERTO RICO.—

(i) PAYMENTS DESCRIBED.—For purposes of subparagraph 

(A), payments described in this subparagraph are payments 

made to Puerto Rico under part E of title IV with respect 

to the portion of foster care payments made to Puerto Rico 

for fiscal year 2005 or any fiscal year thereafter that exceed 

the total amount of such payments for fiscal year 2002. 

(ii) LIMITATION.—The total amount of payments to Puerto 

Rico described in clause (i) that are disregarded under subparagraph (A) may not exceed $6,250,000 for each of fiscal 

years 2005 through 2008. 

* * * * * * *

DEMONSTRATION PROJECTS

SEC. 1130. (a) AUTHORITY TO APPROVE DEMONSTRATION

PROJECTS.—

(1) IN GENERAL.—The Secretary may authorize States to conduct demonstration projects pursuant to this section which the 

Secretary finds are likely to promote the objectives of part B 

or E of title IV. 

176

(2) LIMITATION.—The Secretary may authorize not more than 

10 demonstration projects under paragraph (1) in each of fiscal 

years 1998 through ø2003¿ 2008. 

* * * * * * *

(b) WAIVER AUTHORITY.—The Secretary may waive compliance 

with any requirement of part B or E of title IV which (if applied) 

would prevent a State from carrying out a demonstration project 

under this section or prevent the State from effectively achieving 

the purpose of such a project, except that the Secretary may not 

waive—

(1) any provision of section 427 (as in effect before April 1, 

1996), section ø422(b)(9)¿ 422(b)(10) (as in effect after such 

date), or section 479; or 

(2) any provision of such part E, to the extent that the waiver would impair the entitlement of any qualified child or family 

to benefits under a State plan approved under such part E.

TITLE XVI—GRANTS TO STATES FOR AID TO THE AGED, 

BLIND, OR DISABLED 

* * * * * * *

ADMINISTRATION

SEC. 1633. (a) Subject to subsection (b), the Commissioner of Social Security may make such administrative and other arrangements (including arrangements for the determination of blindness 

and disability under section 1614(a)(2) and (3) in the same manner 

and subject to the same conditions as provided with respect to disability determinations under section 221) as may be necessary or 

appropriate to carry out the Commissioner’s functions under this 

title. 

* * * * * * *

(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 2004; 

(ii) at least 40 percent of all such determinations that are 

made in fiscal year 2005; and 

(iii) at least 50 percent of all such determinations that are 

made in fiscal year 2006 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. 

* * * * * * *

177

TITLE XIX—GRANTS TO STATES FOR MEDICAL 

ASSISTANCE PROGRAMS 

* * * * * * *

STATE PLANS FOR MEDICAL ASSISTANCE

SEC. 1902. (a) A State plan for medical assistance must—

(1) provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory 

upon them; 

* * * * * * *

(55) provide for receipt and initial processing of applications 

of individuals for medical assistance under subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX) and under section 1931—

* * * * * * *

(B) Subparagraph (A) shall not apply with respect to 

families that cease to be eligible for aid under part A of 

title IV during the period beginning on April 1, 1990, and 

ending on øSeptember 30, 2003¿ the last date (if any) on 

which section 1925 applies under subsection (f) of that section. During such period, for provisions relating to extension of eligibility for medical assistance for certain families 

who have received aid pursuant to a State plan approved 

under part A of title IV and have earned income, see section 1925. 

* * * * * * *

EXTENSION OF ELIGIBILITY FOR MEDICAL ASSISTANCE

SEC. 1925. (a) INITIAL 6-MONTH EXTENSION.—

(1) REQUIREMENT.—Notwithstanding any other provision of 

this title, but subject to subsection (n), each State plan approved under this title must provide that each family which 

was receiving aid pursuant to a plan of the State approved 

under part A of title IV in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative (as defined in subsection (e)) 

or because of section 402(a)(8)(B)(ii)(II) (providing for a timelimited earned income disregard), shall, subject to paragraph 

(3) and without any re-application for benefits under the plan, 

remain eligible for assistance under the plan approved under 

this title during the immediately succeeding 6-month period in 

accordance with this subsection. A State may, at its option, also 

apply the previous sentence in the case of a family that was receiving such aid for fewer than 3 months, or that had applied 

for and was eligible for such aid for fewer than 3 months, during the 6 immediately preceding months described in such sentence. 

(2) NOTICE OF BENEFITS.—Each State, in the notice of termination of aid under part A of title IV sent to a family meeting 

the requirements of paragraph (1)—

178

(A) shall notify the family of its right to extended medical assistance under this subsection and include in the notice a description of the reporting requirement of subsection (b)(2)(B)(i) and of the circumstances (described in 

paragraph (3)) under which such extension may be terminated; and 

(B) shall include a card or other evidence of the family’s 

entitlement to assistance under this title for the period 

provided in this subsection.

Each State shall provide, to families whose aid under part A 

or E of title IV has terminated but whose eligibility for medical 

assistance under this title continues, written notice of their ongoing eligibility for such medical assistance. If a State makes 

a determination that any member of a family whose aid under 

part A or E of title IV is being terminated is also no longer eligible for medical assistance under this title, the notice of such 

determination shall be supplemented by a 1-page notification 

form describing the different ways in which individuals and 

families may qualify for such medical assistance and explaining that individuals and families do not have to be receiving 

aid under part A or E of title IV in order to qualify for such 

medical assistance. Such notice shall further be supplemented 

by information on how to apply for child health assistance 

under the State children’s health insurance program under title 

XXI and how to apply for medical assistance under this title. 

* * * * * * *

(b) ADDITIONAL 6-MONTH EXTENSION.— (1) REQUIREMENT.—Notwithstanding any other provision of 

this title, but subject to subsection (h), each State plan approved under this title shall provide that the State shall offer 

to each family, which has received assistance during the entire 

6-month period under subsection (a) and which, at the option 

of a State meets the requirement of paragraph (2)(B)(i), in the 

last month of the period the option of extending coverage 

under this subsection for the succeeding 6-month period, subject to paragraph (3). 

(2) NOTICE AND REPORTING REQUIREMENTS.— (A) NOTICES.—Subject to subparagraph (C): 

(i) NOTICE DURING INITIAL EXTENSION PERIOD OF OP- TION AND REQUIREMENTS.—Each State, during the 3rd 

and 6th month of any extended assistance furnished to 

a family under subsection (a), shall notify the family 

of the family’s option for additional extended assistance under this subsection. Each such notice shall include (I) in the 3rd month notice, a statement of the 

reporting requirement under subparagraph (B)(i), and, 

in the 6th month notice, a statement of the reporting 

requirement under subparagraph (B)(ii), (II) a statement as to whether any premiums are required for 

such additional extended assistance, and (III) a description of other out-of-pocket expenses, benefits, reporting and payment procedures, and any pre-existing 

condition limitations, waiting periods, or other coverage limitations imposed under any alternative covVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00178 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
179

erage options offered under paragraph (4)(D). The 6th 

month notice under this subparagraph shall describe 

the amount of any premium required of a particular 

family for each of the first 3 months of additional extended assistance under this subsection. 

(ii) NOTICE DURING ADDITIONAL EXTENSION PERIOD

OF REPORTING REQUIREMENTS AND PREMIUMS.—Each 

State, during the 3rd month of any additional extended assistance furnished to a family under this 

subsection, shall notify the family of the reporting requirement under subparagraph (B)(ii) and a statement 

of the amount of any premium required for such extended assistance for the succeeding 3 months. 

(B) REPORTING REQUIREMENTS.—Subject to subparagraph (C): 

(i) DURING INITIAL EXTENSION PERIOD.—Each State 

shall require (as a condition for additional extended 

assistance under this subsection) that a family receiving assistance under subsection (a) report to the State, 

not later than the 21st day of the 4th month in the period of extended assistance under subsection (a), on 

the family’s gross monthly earnings and on the family’s costs for such child care as is necessary for the 

employment of the caretaker relative in each of the 

first 3 months of that period. A State may permit such 

additional extended assistance under this subsection 

notwithstanding a failure to report under this clause 

if the family has established, to the satisfaction of the 

State, good cause for the failure to report on a timely 

basis. 

(ii) DURING ADDITIONAL EXTENSION PERIOD.—Each 

State shall require that a family receiving extended 

assistance under this subsection report to the State, 

not later than the 21st day of the 1st month and of the 

4th month in the period of additional extended assistance under this subsection, on the family’s gross 

monthly earnings and on the family’s costs for such 

child care as is necessary for the employment of the 

caretaker relative in each of the 3 preceding months. 

(iii) CLARIFICATION ON FREQUENCY OF REPORTING.—

A State may not require that a family receiving extended assistance under this subsection or subsection 

(a) report more frequently than as required under 

clause (i) or (ii).

(C) STATE OPTION TO WAIVE NOTICE AND REPORTING REQUIREMENTS.—A State may waive some or all of the reporting requirements under clauses (i) and (ii) of subparagraph 

(B). Insofar as it waives such a reporting requirement, the 

State need not provide for a notice under subparagraph (A) 

relating to such requirement.

(3) TERMINATION OF EXTENSION.—

(A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

extension of assistance during the 6-month period deVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00179 Fmt 6604 Sfmt 6602 E:\HR\OC\SR162.XXX SR162
180

scribed in paragraph (1) to a family shall terminate (during the period) as follows: 

(i) NO DEPENDENT CHILD.—The extension shall terminate at the close of the first month in which the 

family ceases to include a child, whether or not the 

child is (or would if needy be) a dependent child under 

part A of title IV. 

(ii) FAILURE TO PAY ANY PREMIUM.—If the family 

fails to pay any premium for a month under paragraph (5) by the 21st day of the following month, the 

extension shall terminate at the close of that following 

month, unless the family has established, to the satisfaction of the State, good cause for the failure to pay 

such premium on a timely basis. 

(iii) QUARTERLY INCOME REPORTING AND TEST.—The 

extension under this subsection shall terminate at the 

close of the 1st or 4th month of the 6-month period if 

the State has not waived under paragraph (2)(C) the 

reporting requirement with respect to such month 

under paragraph (2)(B) and if—

* * * * * * *

(c) STATE OPTION OF UP TO 12 MONTHS OF ADDITIONAL ELIGIBILITY.—

(1) IN GENERAL.—Notwithstanding any other provision of this 

title, each State plan approved under this title may provide, at 

the option of the State, that the State shall offer to each family 

which received assistance during the entire 6-month period 

under subsection (b) and which meets the applicable requirement of paragraph (2), in the last month of the period the option of extending coverage under this subsection for the succeeding period not to exceed 12 months. 

(2) INCOME RESTRICTION.—The option under paragraph (1) 

shall not be made available to a family for a succeeding period 

unless the State determines that the family’s average gross 

monthly earnings (less such costs for such child care as is necessary for the employment of the caretaker relative) as of the 

end of the 6-month period under subsection (b) does not exceed 

185 percent of the official poverty line (as defined by the Office 

of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation 

Act of 1981) applicable to a family of the size involved. 

(3) APPLICATION OF EXTENSION RULES.—The provisions of 

paragraphs (2), (3), (4), and (5) of subsection (b) shall apply to 

the extension provided under this subsection in the same manner as they apply to the extension provided under subsection 

(b)(1), except that for purposes of this subsection—

(A) any reference to a 6-month period under subsection 

(b)(1) is deemed a reference to the extension period provided 

under paragraph (1) and any deadlines for any notices or 

reporting and the premium payment periods shall be modified to correspond to the appropriate calendar quarters of 

coverage provided under this subsection; and 

181

(B) any reference to a provision of subsection (a) or (b) is 

deemed a reference to the corresponding provision of subsection (b) or of this subsection, respectively.

ø(c)¿ (d) APPLICABILITY IN STATES AND TERRITORIES.— (1) STATES OPERATING UNDER DEMONSTRATION PROJECTS.—In 

the case of any State which is providing medical assistance to 

its residents under a waiver granted under section 1115(a), the 

Secretary shall require the State to meet the requirements of 

this section in the same manner as the State would be required to meet such requirement if the State had in effect a 

plan approved under this title. 

(2) INAPPLICABILITY IN COMMONWEALTHS AND TERRITORIES.— The provisions of this section shall only apply to the 50 States 

and the District of Columbia. 

ø(d)¿ (e) GENERAL DISQUALIFICATION FOR FRAUD.— (1) INELIGIBILITY FOR AID.—This section shall not apply to an 

individual who is a member of a family which has received aid 

under part A of title IV if the State makes a finding that, at 

any time during the last 6 months in which the family was receiving such aid before otherwise being provided extended eligibility under this section, the individual was ineligible for 

such aid because of fraud. 

(2) GENERAL DISQUALIFICATIONS.—For additional provisions 

relating to fraud and program abuse, see sections 1128, 1128A, 

and 1128B. 

ø(e)¿ (f) CARETAKER RELATIVE DEFINED.—In this section, the 

term ‘‘caretaker relative’’ has the meaning of such term as used in 

part A of title IV.

(g) ADDITIONAL PROVISIONS.— (1) COLLECTION AND REPORTING OF PARTICIPATION INFORMA- TION.—Each State shall— (A) collect and submit to the Secretary, in a format specified by the Secretary, information on average monthly enrollment and average monthly participation rates for adults 

and children under this section; and 

(B) make such information publicly available. 

Such information shall be submitted under subparagraph (A) at the 

same time and frequency in which other enrollment information 

under this title is submitted to the Secretary. Using such information, the Secretary shall submit to Congress annual reports concerning such rates. 

(2) COORDINATION WITH ADMINISTRATION FOR CHILDREN AND

FAMILIES.—The Administrator of the Centers for Medicare & 

Medicaid Services, in carrying out this section, shall work with 

the Assistant Secretary for the Administration for Children and 

Families to develop guidance or other technical assistance for 

States regarding best practices in guaranteeing access to transitional medical assistance under this section. 

(h) PROVISIONS OPTIONAL FOR STATES THAT EXTEND COVERAGE

TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY.— A State may meet (but is not required to meet) the requirements of 

subsections (a) and (b) if it provides for medical assistance under 

section 1931 to families (including both children and caretaker relatives) the average gross monthly earning of which (less such costs 

182

for such child care as is necessary for the employment of a caretaker 

relative) is at or below a level that is at least 185 percent of the official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the 

Omnibus Budget Reconciliation Act of 1981) applicable to a family 

of the size involved.

ø(f)¿ (i) SUNSET.—This section shall not apply with respect to 

families that cease to be eligible for aid under part A of title IV 

after September 30, ø2003¿ 2008. 

* * * * * * *

TITLE XXI—STATE CHILDREN’S HEALTH INSURANCE 

PROGRAM 

* * * * * * *

PAYMENTS TO STATES

SEC. 2105. (a) PAYMENTS.—***

* * * * * * *

(c) LIMITATION ON CERTAIN PAYMENTS FOR CERTAIN EXPENDITURES.—

(1) GENERAL LIMITATIONS.—Funds provided to a State under 

this title shall only be used to carry out the purposes of this 

title (as described in section 2101), and any health insurance 

coverage provided with such funds may include coverage of 

abortion only if necessary to save the life of the mother or if 

the pregnancy is the result of an act of rape or incest and may 

not include coverage of childless adults. For purposes of the preceding sentence, a caretaker relative (as such term is defined for 

purposes of carrying out section 1931) shall not be considered 

a childless adult.

* * * * * * *

STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN

ADMINISTRATION

SEC. 2107. (a) STATEGIC OBJECTIVES AND PERFORMANCE GOALS.—

* * * * * * *

(f) LIMITATION ON WAIVER AUTHORITY.—Notwithstanding subsection (e)(2)(A) and section 1115(a), the Secretary may not approve 

a waiver, experimental, pilot, or demonstration project, or an 

amendment to such a project that has been approved as of the date 

of enactment of this subsection, that would allow funds made available under this title to be used to provide child health assistance or 

other health benefits coverage to childless adults. For purposes of 

the preceding sentence, a caretaker relative (as such term is defined 

for purposes of carrying out section 1931) shall not be considered a 

childless adult.

PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY 

RECONCILIATION ACT OF 1966

* * * * * * *

183

TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY 

FAMILIES 

Sec. 101. Findings. 

* * * * * * *

SEC. 117. Responsible fatherhood program. 

* * * * * * *

TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE 

FOR NEEDY FAMILIES 

* * * * * * *

SEC. 116. EFFECTIVE DATE; TRANSITION RULE. 

(a) EFFECTIVE DATES.—***

* * * * * * *

SEC. 117. FATHERHOOD PROGRAM. 

(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) is amended by 

inserting after part B the following: 

‘‘PART C—RESPONSIBLE FATHERHOOD PROGRAM 

‘‘SEC. 441. RESPONSIBLE FATHERHOOD GRANTS. 

‘‘(a) GRANTS TO STATES TO CONDUCT DEMONSTRATION PRO- GRAMS.—

‘‘(1) AUTHORITY TO AWARD GRANTS.— ‘‘(A) IN GENERAL.—The Secretary shall award grants to 

up to 10 eligible States to conduct demonstration programs 

to carry out the purposes described in paragraph (2). 

‘‘(B) ELIGIBLE STATE.—For purposes of this subsection, an 

eligible State is a State that submits to the Secretary the 

following: 

‘‘(i) APPLICATION.—An application for a grant under 

this subsection, at such time, in such manner, and containing such information as the Secretary may require. 

‘‘(ii) STATE PLAN.—A State plan that includes the following: 

‘‘(I) PROJECT DESCRIPTION.—A description of the 

programs or activities the State will fund under 

the grant, including a good faith estimate of the 

number and characteristics of clients to be served 

under such projects and how the State intends to 

achieve at least 2 of the purposes described in 

paragraph (2). 

‘‘(II) COORDINATION EFFORTS.—A description of 

how the State will coordinate and cooperate with 

State and local entities responsible for carrying out 

other programs that relate to the purposes intended to be achieved under the demonstration 

program, including as appropriate, entities responsible for carrying out jobs programs and programs 

serving children and families. 

‘‘(III) RECORDS, REPORTS, AND AUDITS.—An 

agreement to maintain such records, submit such 

reports, and cooperate with such reviews and auVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00183 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
184

dits as the Secretary finds necessary for purposes 

of oversight of the demonstration program. ‘‘(iii) CERTIFICATIONS.—The following certifications 

from the chief executive officer of the State: ‘‘(I) A certification that the State will use funds 

provided under the grant to promote at least 2 of 

the purposes described in paragraph (2). ‘‘(II) A certification that the State will return any 

unused funds to the Secretary in accordance with 

the reconciliation process under paragraph (5). ‘‘(III) A certification that the funds provided 

under the grant will be used for programs and activities that target low-income participants and 

that not less than 50 percent of the participants in 

each program or activity funded under the grant 

shall be—

‘‘(aa) parents of a child who is, or within the 

past 24 months has been, a recipient of assistance or services under a State program funded 

under part A, D, or E of this title, title XIX, 

or the Food Stamp Act of 1977; or ‘‘(bb) parents, including an expectant parent 

or a married parent, whose income (after adjustment for court-ordered child support paid 

or received) does not exceed 150 percent of the 

poverty line. ‘‘(IV) A certification that the State has or will 

comply with the requirements of paragraph (4). ‘‘(V) A certification that funds provided to a 

State under this subsection shall not be used to 

supplement or supplant other Federal, State, or 

local funds that are used to support programs or 

activities that are related to the purposes described 

in paragraph (2). 

‘‘(C) PREFERENCES AND FACTORS OF CONSIDERATION.—In 

awarding grants under this subsection, the Secretary shall 

take into consideration the following: ‘‘(i) DIVERSITY OF ENTITIES USED TO CONDUCT PRO- GRAMS AND ACTIVITIES.—The Secretary shall, to the extent practicable, achieve a balance among the eligible 

States awarded grants under this subsection with respect to the size, urban or rural location, and employment of differing or unique methods of the entities that 

the eligible States intend to use to conduct the programs and activities funded under the grants. ‘‘(ii) PRIORITY FOR CERTAIN STATES.—The Secretary 

shall give priority to awarding grants to eligible States 

that have—

‘‘(I) demonstrated progress in achieving at least 

1 of the purposes described in paragraph (2) 

through previous State initiatives; or ‘‘(II) demonstrated need with respect to reducing 

the incidence of out-of-wedlock births or absent fathers in the State. 

185

‘‘(2) PURPOSES.—The purposes described in this paragraph 

are the following: ‘‘(A) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

MARRIAGE PROMOTION.—To promote marriage or sustain 

marriage through activities such as counseling, mentoring, 

disseminating information about the benefits of marriage 

and 2-parent involvement for children, enhancing relationship skills, education regarding how to control aggressive 

behavior, disseminating information on the causes of domestic violence and child abuse, marriage preparation programs, premarital counseling, marital inventories, skillsbased marriage education, financial planning seminars, including improving a family’s ability to effectively manage 

family business affairs by means such as education, counseling, or mentoring on matters related to family finances, 

including household management, budgeting, banking, and 

handling of financial transactions and home maintenance, 

and divorce education and reduction programs, including 

mediation and counseling. ‘‘(B) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

PARENTING PROMOTION.—To promote responsible parenting 

through activities such as counseling, mentoring, and mediation, disseminating information about good parenting 

practices, skills-based parenting education, encouraging 

child support payments, and other methods. ‘‘(C) PROMOTING RESPONSIBLE FATHERHOOD THROUGH

FOSTERING ECONOMIC STABILITY OF FATHERS.—To foster 

economic stability by helping fathers improve their economic status by providing activities such as work first services, job search, job training, subsidized employment, job 

retention, job enhancement, and encouraging education, including career-advancing education, dissemination of employment materials, coordination with existing employment 

services such as welfare-to-work programs, referrals to local 

employment training initiatives, and other methods. 

‘‘(3) RESTRICTION ON USE OF FUNDS.—No funds provided 

under this subsection may be used for costs attributable to court 

proceedings regarding matters of child visitation or custody, or 

for legislative advocacy. ‘‘(4) REQUIREMENTS FOR RECEIPT OF FUNDS.—A State may 

not be awarded a grant under this section unless the State, as 

a condition of receiving funds under such a grant—

‘‘(A) consults with experts in domestic violence or with 

relevant community domestic violence coalitions in developing such programs or activities; and 

‘‘(B) describes in the application for a grant under this 

section—

‘‘(i) how the programs or activities proposed to be 

conducted will address, as appropriate, issues of domestic violence; and ‘‘(ii) what the State will do, to the extent relevant, to 

ensure that participation in such programs or activities 

is voluntary, and to inform potential participants that 

their involvement is voluntary. 

186

‘‘(5) RECONCILIATION PROCESS.— ‘‘(A) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Each 

eligible State that receives a grant under this subsection for 

a fiscal year shall return to the Secretary any unused portion of the grant for such fiscal year not later than the last 

day of the second succeeding fiscal year, together with any 

earnings on such unused portion. ‘‘(B) PROCEDURE FOR REDISTRIBUTION.—The Secretary 

shall establish an appropriate procedure for redistributing 

to eligible States that have expended the entire amount of 

a grant made under this subsection for a fiscal year any 

amount that is returned to the Secretary by eligible States 

under subparagraph (A). ‘‘(6) AMOUNT OF GRANTS.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 

amount of each grant awarded under this subsection shall 

be an amount sufficient to implement the State plan submitted under paragraph (1)(B)(ii). ‘‘(B) MINIMUM AMOUNTS.—No eligible State shall— ‘‘(i) in the case of the District of Columbia or a State 

other than the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, 

and the Commonwealth of the Northern Mariana Islands, receive a grant for a fiscal year in an amount 

that is less than $1,000,000; and ‘‘(ii) in the case of the Commonwealth of Puerto Rico, 

the United States Virgin Islands, Guam, American 

Samoa, and the Commonwealth of the Northern Mariana Islands, receive a grant for a fiscal year in an 

amount that is less than $500,000. ‘‘(7) DEFINITION OF STATE.—In this subsection the term ‘State’ means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, 

Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. 

‘‘(8) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated $20,000,000 for each of fiscal years 

2004 through 2008 for purposes of making grants to eligible 

States under this subsection. ‘‘(b) GRANTS TO ELIGIBLE ENTITIES TO CONDUCT DEMONSTRATION

PROGRAMS.—

‘‘(1) AUTHORITY TO AWARD GRANTS.—

‘‘(A) IN GENERAL.—The Secretary shall award grants to 

eligible entities to conduct demonstration programs to carry 

out the purposes described in subsection (a)(2). 

‘‘(B) ELIGIBLE ENTITY.—For purposes of this subsection, 

an eligible entity is a local government, local public agency, 

community-based or nonprofit organization, or private entity, including any charitable or faith-based organization, or 

an Indian tribe (as defined in section 419(4)), that submits 

to the Secretary the following: ‘‘(i) APPLICATION.—An application for a grant under 

this subsection, at such time, in such manner, and containing such information as the Secretary may require. 

187

‘‘(ii) PROJECT DESCRIPTION.—A description of the 

programs or activities the entity intends to carry out 

with funds provided under the grant, including a good 

faith estimate of the number and characteristics of clients to be served under such programs or activities and 

how the entity intends to achieve at least 2 of the purposes described in subsection (a)(2). ‘‘(iii) COORDINATION EFFORTS.—A description of how 

the entity will coordinate and cooperate with State and 

local entities responsible for carrying out other programs that relate to the purposes intended to be 

achieved under the demonstration program, including 

as appropriate, entities responsible for carrying out 

jobs programs and programs serving children and 

families. ‘‘(iv) RECORDS, REPORTS, AND AUDITS.—An agreement to maintain such records, submit such reports, 

and cooperate with such reviews and audits as the Secretary finds necessary for purposes of oversight of the 

demonstration program. ‘‘(v) CERTIFICATIONS.—The following certifications: ‘‘(I) A certification that the entity will use funds 

provided under the grant to promote at least 2 of 

the purposes described in subsection (a)(2). ‘‘(II) A certification that the entity will return 

any unused funds to the Secretary in accordance 

with the reconciliation process under paragraph 

(3). ‘‘(III) A certification that the funds provided 

under the grant will be used for programs and activities that target low-income participants and 

that not less than 50 percent of the participants in 

each program or activity funded under the grant 

shall be—

‘‘(aa) parents of a child who is, or within the 

past 24 months has been, a recipient of assistance or services under a State program funded 

under part A, D, or E of this title, title XIX, 

or the Food Stamp Act of 1977; or

‘‘(bb) parents, including an expectant parent 

or a married parent, whose income (after adjustment for court-ordered child support paid 

or received) does not exceed 150 percent of the 

poverty line. 

‘‘(IV) A certification that the entity has or will 

comply with the requirements of paragraph (3). 

‘‘(V) A certification that funds provided to an entity under this subsection shall not be used to supplement or supplant other Federal, State, or local 

funds provided to the entity that are used to support programs or activities that are related to the 

purposes described in subsection (a)(2). 

‘‘(C) PREFERENCES AND FACTORS OF CONSIDERATION.—In 

awarding grants under this subsection, the Secretary shall, 

188

to the extent practicable, achieve a balance among the eligible entities awarded grants under this subsection with respect to the size, urban or rural location, and employment 

of differing or unique methods of the entities. ‘‘(2) RESTRICTION ON USE OF FUNDS.—No funds provided 

under this subsection may be used for costs attributable to court 

proceedings regarding matters of child visitation or custody, or 

for legislative advocacy. ‘‘(3) REQUIREMENTS FOR USE OF FUNDS.—The Secretary may 

not award a grant under this subsection to an eligible entity 

unless the entity, as a condition of receiving funds under such 

a grant—

‘‘(A) consults with experts in domestic violence or with 

relevant community domestic violence coalitions in developing the programs or activities to be conducted with such 

funds awarded under the grant; and ‘‘(B) describes in the application for a grant under this 

section—

‘‘(i) how the programs or activities proposed to be 

conducted will address, as appropriate, issues of domestic violence; and 

‘‘(ii) what the entity will do, to the extent relevant, to 

ensure that participation in such programs or activities 

is voluntary, and to inform potential participants that 

their involvement is voluntary. 

‘‘(4) RECONCILIATION PROCESS.—

‘‘(A) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Each 

eligible entity that receives a grant under this subsection 

for a fiscal year shall return to the Secretary any unused 

portion of the grant for such fiscal year not later than the 

last day of the second succeeding fiscal year, together with 

any earnings on such unused portion. 

‘‘(B) PROCEDURE FOR REDISTRIBUTION.—The Secretary 

shall establish an appropriate procedure for redistributing 

to eligible entities that have expended the entire amount of 

a grant made under this subsection for a fiscal year any 

amount that is returned to the Secretary by eligible entities 

under subparagraph (A). ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated $30,000,000 for each of fiscal years 

2004 through 2008 for purposes of making grants to eligible entities under this subsection. 

‘‘SEC. 442. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD PROGRAMS. 

‘‘(a) MEDIA CAMPAIGN NATIONAL CLEARINGHOUSE FOR RESPONSIBLE FATHERHOOD.—

‘‘(1) IN GENERAL.—From any funds appropriated under subsection (c), the Secretary shall contract with a nationally recognized, nonprofit fatherhood promotion organization described in 

subsection (b) to—

‘‘(A) develop, promote, and distribute to interested States, 

local governments, public agencies, and private entities a 

media campaign that encourages the appropriate involvement of parents in the life of any child, with a priority for 

189

programs that specifically address the issue of responsible 

fatherhood; and ‘‘(B) develop a national clearinghouse to assist States and 

communities in efforts to promote and support marriage 

and responsible fatherhood by collecting, evaluating, and 

making available (through the Internet and by other 

means) to other States information regarding the media 

campaigns established under section 443. ‘‘(2) COORDINATION WITH DOMESTIC VIOLENCE PROGRAMS.— The Secretary shall ensure that the nationally recognized nonprofit fatherhood promotion organization with a contract under 

paragraph (1) coordinates the media campaign developed under 

subparagraph (A) of such paragraph and the national clearinghouse developed under subparagraph (B) of such paragraph 

with national, State, or local domestic violence programs. ‘‘(b) NATIONALLY RECOGNIZED, NONPROFIT FATHERHOOD PRO- MOTION ORGANIZATION DESCRIBED.—The nationally recognized, 

nonprofit fatherhood promotion organization described in this subsection is an organization that has at least 4 years of experience 

in— ‘‘(1) designing and disseminating a national public education 

campaign, as evidenced by the production and successful placement of television, radio, and print public service announcements that promote the importance of responsible fatherhood, a 

track record of service to Spanish-speaking populations and historically underserved or minority populations, the capacity to 

fulfill requests for information and a proven history of fulfilling 

such requests, and a mechanism through which the public can 

request additional information about the campaign; and 

‘‘(2) providing consultation and training to community-based 

organizations interested in implementing fatherhood outreach, 

support, or skill development programs with an emphasis on 

promoting married fatherhood as the ideal. ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated $5,000,000 for each of fiscal years 2004 through 

2008 to carry out this section. 

‘‘SEC. 443. BLOCK GRANTS TO STATES TO ENCOURAGE MEDIA CAMPAIGNS. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) BROADCAST ADVERTISEMENT.—The term ‘broadcast advertisement’ means a communication intended to be aired by a 

television or radio broadcast station, including a communication intended to be transmitted through a cable channel. 

‘‘(2) CHILD AT RISK.—The term ‘child at risk’ means each 

young child whose family income does not exceed the poverty 

line. 

‘‘(3) POVERTY LINE.—The term ‘poverty line’ has the meaning 

given such term in section 673(2) of the Community Services 

Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section, that is applicable to a family of the size 

involved. 

‘‘(4) PRINTED OR OTHER ADVERTISEMENT.—The term ‘printed 

or other advertisement’ includes any communication intended to 

be distributed through a newspaper, magazine, outdoor adverVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00189 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
190

tising facility, mailing, or any other type of general public advertising, but does not include any broadcast advertisement. ‘‘(5) STATE.—The term ‘State’ means each of the 50 States, the 

District of Columbia, the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana Islands. ‘‘(6) YOUNG CHILD.—The term ‘young child’ means an individual under age 5. ‘‘(b) STATE CERTIFICATIONS.—Not later than October 1 of each of 

fiscal year for which a State desires to receive an allotment under 

this section, the chief executive officer of the State shall submit to 

the Secretary a certification that the State shall— ‘‘(1) use such funds to promote the formation and maintenance of healthy 2-parent married families, strengthen fragile 

families, and promote responsible fatherhood through media 

campaigns conducted in accordance with the requirements of 

subsection (d); ‘‘(2) return any unused funds to the Secretary in accordance 

with the reconciliation process under subsection (e); and ‘‘(3) comply with the reporting requirements under subsection 

(f). ‘‘(c) PAYMENTS TO STATES.—For each of fiscal years 2004 through 

2008, the Secretary shall pay to each State that submits a certification under subsection (b), from any funds appropriated under 

subsection (i), for the fiscal year an amount equal to the amount of 

the allotment determined for the fiscal year under subsection (g). ‘‘(d) ESTABLISHMENT OF MEDIA CAMPAIGNS.—Each State receiving 

an allotment under this section for a fiscal year shall use the allotment to conduct media campaigns as follows: ‘‘(1) CONDUCT OF MEDIA CAMPAIGNS.— ‘‘(A) RADIO AND TELEVISION MEDIA CAMPAIGNS.— ‘‘(i) PRODUCTION OF BROADCAST ADVERTISEMENTS.—

At the option of the State, to produce broadcast advertisements that promote the formation and maintenance 

of healthy 2-parent married families, strengthen fragile 

families, and promote responsible fatherhood. ‘‘(ii) AIR-TIME CHALLENGE PROGRAM.—At the option 

of the State, to establish an air-time challenge program 

under which the State may spend amounts allotted 

under this section to purchase time from a broadcast 

station to air a broadcast advertisement produced 

under clause (i), but only if the State obtains an 

amount of time of the same class and during a comparable period to air the advertisement using non-Federal contributions. ‘‘(B) OTHER MEDIA CAMPAIGNS.—At the option of the 

State, to conduct a media campaign that consists of the 

production and distribution of printed or other advertisements that promote the formation and maintenance of 

healthy 2-parent married families, strengthen fragile families, and promote responsible fatherhood. ‘‘(2) ADMINISTRATION OF MEDIA CAMPAIGNS.—A State may administer media campaigns funded under this section directly or 

through grants, contracts, or cooperative agreements with pubVerDate jul 14 2003 21:31 Oct 07, 2003 Jkt 029010 PO 00000 Frm 00190 Fmt 6604 Sfmt 6603 E:\HR\OC\SR162.XXX SR162
191

lic agencies, local governments, or private entities, including 

charitable and faith-based organizations. ‘‘(3) CONSULTATION WITH DOMESTIC VIOLENCE ASSISTANCE

CENTERS.—In developing broadcast and printed advertisements 

to be used in the media campaigns conducted under paragraph 

(1), the State or other entity administering the campaign shall 

consult with representatives of State and local domestic violence 

centers. ‘‘(4) NON-FEDERAL CONTRIBUTIONS.—In this section, the term ‘non-Federal contributions’ includes contributions by the State 

and by public and private entities. Such contributions may be 

in cash or in kind. Such term does not include any amounts 

provided by the Federal Government, or services assisted or 

subsidized to any significant extent by the Federal Government, 

or any amount expended by a State before October 1, 2003. ‘‘(e) RECONCILIATION PROCESS.— ‘‘(1) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Each State 

that receives an allotment under this section shall return to the 

Secretary any unused portion of the amount allotted to a State 

for a fiscal year not later than the last day of the second succeeding fiscal year together with any earnings on such unused 

portion. ‘‘(2) PROCEDURE FOR REDISTRIBUTION OF UNUSED ALLOT- MENTS.—The Secretary shall establish an appropriate procedure for redistributing to States that have expended the entire 

amount allotted under this section any amount that is— ‘‘(A) returned to the Secretary by States under paragraph 

(1); or ‘‘(B) not allotted to a State under this section because the 

State did not submit a certification under subsection (b) by 

October 1 of a fiscal year. ‘‘(f) REPORTING REQUIREMENTS.—

‘‘(1) MONITORING AND EVALUATION.—Each State receiving an 

allotment under this section for a fiscal year shall monitor and 

evaluate the media campaigns conducted using funds made 

available under this section in such manner as the Secretary, 

in consultation with the States, determines appropriate. 

‘‘(2) ANNUAL REPORTS.—Not less frequently than annually, 

each State receiving an allotment under this section for a fiscal 

year shall submit to the Secretary reports on the media campaigns conducted using funds made available under this section at such time, in such manner, and containing such information as the Secretary may require. ‘‘(g) AMOUNT OF ALLOTMENTS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), of the 

amount appropriated for the purpose of making allotments 

under this section for a fiscal year, the Secretary shall allot to 

each State that submits a certification under subsection (b) for 

the fiscal year an amount equal to the sum of— ‘‘(A) the amount that bears the same ratio to 50 percent 

of such funds as the number of young children in the State 

(as determined by the Secretary based on the most current 

reliable data available) bears to the number of such children in all States; and 

192

‘‘(B) the amount that bears the same ratio to 50 percent 

of such funds as the number of children at risk in the State 

(as determined by the Secretary based on the most current 

reliable data available) bears to the number of such children in all States. ‘‘(2) MINIMUM ALLOTMENTS.—No allotment for a fiscal year 

under this section shall be less than— ‘‘(A) in the case of the District of Columbia or a State 

other than the Commonwealth of Puerto Rico, the United 

States Virgin Islands, Guam, American Samoa, and the 

Commonwealth of the Northern Mariana Islands, 1 percent 

of the amount appropriated for the fiscal year under subsection (i); and ‘‘(B) in the case of the Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, American Samoa, 

and the Commonwealth of the Northern Mariana Islands, 

0.5 percent of such amount. ‘‘(3) PRO RATA REDUCTIONS.—The Secretary shall make such 

pro rata reductions to the allotments determined under this 

subsection as are necessary to comply with the requirements of 

paragraph (2). 

‘‘(h) EVALUATION.—

‘‘(1) IN GENERAL.—The Secretary shall conduct an evaluation 

of the impact of the media campaigns funded under this section. 

‘‘(2) REPORT.—Not later than December 31, 2006, the Secretary shall report to Congress the results of the evaluation 

under paragraph (1). 

‘‘(3) FUNDING.—Of the amount appropriated under subsection 

(i) for fiscal year 2004, $1,000,000 of such amount shall be 

transferred and made available for purposes of conducting the 

evaluation required under this subsection, and shall remain 

available until expended. ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated $20,000,000 for each of fiscal years 2004 through 

2008 for purposes of making allotments to States under this section.’’ (b) INAPPLICABILITY OF EFFECTIVE DATE PROVISIONS.—Section 

116 shall not apply to the amendment made by subsection (a) of this 

section. 

* * * * * * *

INTERNAL REVENUE CODE OF 1986

* * * * * * *

CHAPTER 65.—ABATEMENTS, CREDITS, AND REFUNDS 

* * * * * * *

SEC. 6402. Authority to make credits or refunds. 

* * * * * * *

(c) OFFSET OF PAST-DUE SUPPORT AGAINST OVERPAYMENTS.—The 

amount of any overpayment to be refunded to the person making 

the overpayment shall be reduced by the amount of any past-due 

support (as defined in section 464(c) of the Social Security Act) 

193

owed by that person of which the Secretary has been notified by 

a State in accordance with section 464 of øthe Social Security Act¿

such Act. The Secretary shall remit the amount by which the overpayment is so reduced to the State collecting such support and notify the person making the overpayment that so much of the overpayment was necessary to satisfy his obligation for past-due support has been paid to the State. øA reduction under this subsection 

shall be applied first to satisfy any past-due support which has 

been assigned to the State under section 402(a)(26) or 471(a)(17) of 

the Social Security Act, and shall be applied to satisfy any other 

past-due support after any other reductions allowed by law (but before a credit against future liability for an internal revenue tax) 

have been made.¿ The Secretary shall apply a reduction under this 

subsection first to an amount certified by the State as past due support under section 464 of the Social Security Act before any other 

reductions allowed by law. This subsection shall be applied to any 

overpayment prior to its being credited to a person’s future liability 

for an internal revenue tax. 

* * * * * * *

UNITED STATES CODE 

TITLE 28—JUDICIARY AND JUDICIAL 

PROCEDURE 

PART V—PROCEDURE 

CHAPTER 115—EVIDENCE; DOCUMENTARY 

SEC. 1738B. FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS. 

(a) GENERAL RULE.—The appropriate authorities of each State—

* * * * * * *

ø(d) CONTINUING JURISDICTION.—A court of a State that has 

made a child support order consistently with this section has continuing, exclusive jurisdiction over the order if the State is the 

child’s State or the residence of any individual contestant unless 

the court of another State, acting in accordance with subsections (e) 

and (f), has made a modification of the order.¿

(d) CONTINUING EXCLUSIVE JURISDICTION.—

(1) IN GENERAL.—Subject to paragraph (2), a court of a State 

that has made a child support order consistent with this section 

has continuing, exclusive jurisdiction to modify its order if the 

order is the controlling order and—

(A) the State is the child’s State or the residence of any 

individual contestant; or 

(B) if the State is not the residence of the child or an individual contestant, the contestants consent in a record or 

in open court that the court may continue to exercise jurisdiction to modify its order. 

(2) REQUIREMENT.—A court may not exercise its continuing, 

exclusive jurisdiction to modify the order if the court of another 

State, acting in accordance with subsections (e) and (f), has 

made a modification of the order.

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(e) AUTHORITY TO MODIFY ORDERS.—A court of a State may modify a child support order issued by a court of another state if—

(1) the court has jurisdiction to make such a child support 

order pursuant to subsection (i); and 

(2)(A) the court of the other State no longer has continuing, 

exclusive jurisdiction of the child support order øbecause that 

State no longer is the child’s State or the residence of any individual contestant;¿ pursuant to paragraph (1) or (2) of subsection (d); or 

(B) each individual contestant has filed written consent with 

the State of continuing, exclusive jurisdiction for a court of another State with jurisdiction over at least 1 of the individual 

contestants or that is located in the child’s State to modify the 

order and assume continuing, exclusive jurisdiction over the 

order. 

(f) øRECOGNITION OF¿ DETERMINATION OF CONTROLLING CHILD

SUPPORT ORDERS.—If 1 or more child support orders have been 

issued with regard to an obligor and a child, a court øshall apply 

the following rules in determining which order to recognize for purposes of continuing, exclusive jurisdiction and enforcement:¿ having personal jurisdiction over both individual contestants shall 

apply the following rules and by order shall determine which order 

controls:

(1) If only 1 court has issued a child support order, the order 

of that court ømust be¿ controls and must be so recognized. 

(2) If 2 or more courts have issued child support orders for 

the same obligor and child, and only 1 of the courts would have 

continuing, exclusive jurisdiction under this section, the order 

of that court ømust be recognized¿ controls. 

(3) If 2 or more courts have issued child support orders for 

the same obligor and child, and more than 1 of the courts 

would have continuing, exclusive jurisdiction under this section, an order issued by a court in the current home State of 

the child ømust be recognized¿ controls, but if an order has not 

been issued in the current home State of the child, the order 

most recently issued ømust be recognized¿ controls. 

(4) If 2 or more courts have issued child support orders for 

the same obligor and child, and none of the courts would have 

continuing, exclusive jurisdiction under this section, a court 

having jurisdiction over the parties shall issue a child support 

order, which ømust be recognized¿ controls. 

ø(5) The court that has issued an order recognized under this 

subsection is the court having continuing, exclusive jurisdiction 

under subsection (d).¿

ø(g) ENFORCEMENT OF MODIFIED ORDERS.—A court of a State 

that no longer has continuing, exclusive jurisdiction of a child support order may enforce the order with respect to nonmodifiable obligations and unsatisfied obligations that accrued before the date 

on which a modification of the order is made under subsections (e) 

and (f).¿

(g) ENFORCEMENT OF MODIFIED ORDERS.—If a child support 

order issued by a court of a State is modified by a court of another 

State which properly assumed jurisdiction, the issuing court—

195

(1) may enforce its order that was modified only as to arrears 

and interest accruing before the modification; 

(2) may provide appropriate relief for violations of its order 

which occurred before the effective date of the modification; and 

(3) shall recognize the modifying order of the other State for 

the purpose of enforcement.

(h) CHOICE OF LAW.—

(1) IN GENERAL.—In a proceeding to establish, modify or enforce a child support order, the forum State’s law shall apply 

except as provided in paragraphs (2) øand (3)¿, (3), and (4).

(2) LAW OF STATE OF ISSUANCE OF ORDER.—In interpreting a 

child support order including the duration of current payments 

and other obligations of support the computation and payment 

of arrearages, and the accrual of interest on the arrearages, a 

court shall apply the law of the State of the court that issued 

the order. 

* * * * * * *

(4) PROSPECTIVE APPLICATION.—After a court determines 

which is the controlling order and issues an order consolidating 

arrears, if any, a court shall prospectively apply the law of the 

State issuing the controlling order, including that State’s law 

with respect to interest on arrears, current and future support, 

and consolidated arrears. 

* * * * * * *

TITLE 31—MONEY AND FINANCE 

Subtitle III—Financial Management 

Chapter 37—Claims 

Subchapter II—Claims of the United States Government 

SEC. 3716. ADMINISTRATIVE OFFSET. 

* * * * * * *

(h)(1) The Secretary may, in the discretion of the Secretary, 

apply subsection (a) with respect to any past-due, legally-enforceable debt owed to a State if—

* * * * * * *

ø(3) In applying this section with respect to any debt owed to a 

State, subsection (c)(3)(A) shall not apply.¿

(3)(A) Except as provided in subparagraph (B), in applying this 

subsection with respect to any debt owed to a State, subsection 

(c)(3)(A) shall not apply. 

(B) Subparagraph (A) shall not apply with respect to payments 

owed to an individual under title II of the Social Security Act, for 

purposes of an offset under this section of such payments against 

past-due support (as defined in section 464(c) of the Social Security 

Act, without regard to paragraphs (2) and (3) of such section 464(c)) 

196

that is being enforced by a State agency administering a program 

under part D of title IV of that Act. 

* * * * * * *

LONGSHORE AND HARBOR WORKERS’ COMPENSATION 

ACT 

ASSIGNMENT AND EXEMPTION FROM CLAIMS OF CREDITORS

SEC. 16. øNo¿ Except as provided by this Act, no assignment, release, or commutation of compensation or benefits due or payable 

under this Actø, except as provided by this Act,¿ shall be valid, and 

such compensation and benefits shall be exempt from all claims of 

creditors and from levy, execution, and attachment or other remedy 

for recovery or collection of a debt, which exemption may not be 

waived. 

øLIEN AGAINST COMPENSATION

øSEC. 17. Where a trust fund which complies with section 186(c) 

of title 29 established pursuant to a collective-bargaining agreement in effect between an employer and an employee covered 

under this chapter has paid disability benefits to an employee 

which the employee is legally obligated to repay by reason of his 

entitlement to compensation under this chapter or under a settlement, the Secretary shall authorize a lien on such compensation in 

favor or the trust fund for the amount of such payments.¿

LIENS ON COMPENSATION; CHILD SUPPORT ENFORCEMENT

SEC. 17. (a) LIENS.—Where a trust fund which complies with section 302(c) of the Labor Management Relations Act, 1947 (29 U.S.C. 

186(c)) established pursuant to a collective-bargaining agreement in 

effect between an employer and an employee covered under this Act 

has paid disability benefits to an employee which the employee is legally obligated to repay by reason of the employee’s entitlement to 

compensation under this Act or under a settlement, the Secretary 

shall authorize a lien on such compensation in favor of the trust 

fund for the amount of such payments. 

(b) CHILD SUPPORT.—Compensation or benefits due or payable to 

an individual under this Act (other than medical benefits) shall be 

subject, in like manner and to the same extent as similar compensation or benefits under a workers’ compensation program if established under State law— (1) to withholding in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 466 of the Social 

Security Act and regulations under such subsections; and 

(2) to any other legal process brought, by a State agency administering a program under a State plan approved under part 

D of title IV of the Social Security Act or by an individual obligee, to enforce the legal obligation of the individual to provide 

child support or alimony. 

* * * * * * *

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