I

103D CONGRESS

2D SESSION H. R. 4126

To offer States a national welfare reform option and incentives to implement

the welfare reform option, to strengthen child support enforcement, to

provide all States with the flexibility and resources necessary to promote

work and self-sufficiency, to expand access to affordable child care,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 24, 1994

Mrs. LOWEY (for herself, Mr. LEWIS of Georgia, Mr. FROST, Mr. PARKER,

Mr. GENE GREEN of Texas, and Mr. FALEOMAVAEGA) introduced the following bill; which was referred jointly to the Committees on Ways and

Means and Education and Labor

A BILL

To offer States a national welfare reform option and incentives to implement the welfare reform option, to strengthen child support enforcement, to provide all States with

the flexibility and resources necessary to promote work

and self-sufficiency, to expand access to affordable child

care, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Work-First Welfare

5 Reform Act of 1994’’.
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1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—The Congress finds that—

3 (1) in 1991, fewer than 8 percent of households

4 receiving assistance under the program of aid to

5 families with dependent children (AFDC) included a

6 wage earner;

7 (2) half of all AFDC recipients leave welfare as

8 a result of finding employment, but many return to

9 welfare because of an inability to retain employment

10 or child care arrangements;

11 (3) expanded access to affordable child care is

12 essential if parents receiving AFDC are to increase

13 their participation in work, job search, education

14 and training, and other activities aimed at attaining

15 self-sufficiency;

16 (4) lack of affordable health insurance in many

17 low-wage jobs is a major barrier for AFDC recipi18 ents who are trying to leave welfare for work;

19 (5) more vigorous efforts to establish paternity

20 and tougher child support enforcement will be essen21 tial to the success of welfare reform;

22 (6) AFDC recipients should have the same fi23 nancial incentives to work that other Americans

24 enjoy;
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1 (7) AFDC rules which dramatically reduce ben2 efits for recipients who work are a major work dis3 incentive for AFDC recipients;

4 (8) welfare programs should be based on a re5 ciprocal obligation, under which recipients must take

6 steps toward independence and the Federal Govern7 ment and the States must provide services to assist

8 that transition;

9 (9) the Family Support Act of 1988 contained

10 landmark changes in Federal welfare policy designed

11 to make AFDC a transitional route to work, rather

12 than a long term alternative to work;

13 (10) despite a number of important exceptions,

14 implementation of welfare-to-work programs under

15 the Job Opportunities and Basic Skills Training

16 (JOBS) program, thus far, has not transformed the

17 basic message and administrative practice of welfare

18 from cash assistance to work promotion;

19 (11) barriers to effective implementation of the

20 JOBS program include—

21 (A) insufficient resources necessary for

22 States and localities to support effective pro23 grams that involve all mandatory participants

24 in the JOBS program;
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1 (B) excessive caseload burdens and inad2 equate automated systems that prevent JOBS

3 program staff from properly monitoring and re4 porting on participation and providing essential

5 case management and job development services;

6 (C) inadequate linkages between JOBS

7 program staff and welfare eligibility workers;

8 (D) insufficient emphasis on work pro9 motion and on the enforcement of work and

10 education requirements; and

11 (E) insufficient interaction by JOBS pro12 gram workers with private sector employers;

13 (12) effective implementation of the JOBS pro14 gram, or another program similar in its goals and

15 scope, is crucial to any attempt to implement more

16 far-reaching welfare reform proposals, especially ini17 tiatives involving time limits on AFDC cash assist18 ance and subsidized work; and

19 (13) welfare-to-work policies must build on suc20 cessful, rigorously evaluated approaches to imple21 menting the JOBS program, and encourage all

22 States to adopt similar strategies.

23 (b) PURPOSES.—The purposes of this Act are to—

24 (1) create a national model for welfare reform

25 that would require States which elect to pursue this
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1 approach to fundamentally reorient their welfare

2 programs toward getting all AFDC applicants and

3 recipients who are capable of working to work;

4 (2) help ensure the most effective use of the

5 Nation’s investments in welfare-to-work programs;

6 (3) provide enhanced Federal support and ad7 ministrative flexibility to States in order to enable

8 them to increase participation in their JOBS pro9 grams and to build the capacity to provide inte10 grated welfare-job development services;

11 (4) make a series of policy changes, applicable

12 to all States, which are designed to reward work and

13 reduce welfare dependency; and

14 (5) establish a national child support enforce15 ment registry which would serve as an information

16 clearinghouse for all child support orders in order to

17 facilitate enforcement, especially in interstate cases.

18 SEC. 3. TABLE OF CONTENTS.

19 The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Findings and purposes.

Sec. 3. Table of contents.

TITLE I—STATE WELFARE REFORM OPTION

Sec. 101. Welfare reform plan.

TITLE II—INCENTIVES FOR STATE PARTICIPATION IN WELFARE

REFORM

Sec. 201. Increased funding for the State JOBS program.

Sec. 202. Authority to adjust individual AFDC benefits quarterly.

Sec. 203. Grants to support welfare reform.
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TITLE III—POLICY CHANGES TO REWARD WORK

Sec. 301. Authority of States to establish enhanced earnings disregards for

AFDC recipients.

Sec. 302. Authority of States to define unemployment for purposes of the

AFDC-UP program.

Sec. 303. Dependent care credit to be refundable; advance payments of credit.

Sec. 304. Report on conflicting administrative requirements that inhibit coordination of the AFDC, food stamp, medicaid, and Job Training

Partnership Act programs.

Sec. 305. Outcome measures for the JOBS program.

Sec. 306. Enhance use of transitional child care and medicaid.

Sec. 307. Treatment of student earnings and income from programs under the

Job Training Partnership Act.

TITLE IV—CHILD SUPPORT ENFORCEMENT

Sec. 401. Federal child support order registry.

Sec. 402. Expansion of Federal parent locator systems.

Sec. 403. National reporting of employees and child support information.

Sec. 404. Reconciliation of child support obligation and payments on income

tax return.

Sec. 405. Uniform child support withholding order.

Sec. 406. State role.

Sec. 407. Consumer Credit Protection Act amendments.

Sec. 408. States required to enact the Uniform Interstate Family Support Act.

1 TITLE I—STATE WELFARE

2 REFORM OPTION

3 SEC. 101. WELFARE REFORM PLAN.

4 (a) STATE PLAN OPTION.—Section 402(a) of the

5 Social Security Act (42 U.S.C. 602(a)) is amended—

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

7 (44);

8 (2) by striking the period at the end of para9 graph (45) and inserting ‘‘; and’’; and

10 (3) by inserting after paragraph (45) the

11 following:
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1 ‘‘(46) at the option of the State, provide that

2 the State has in effect and operation a welfare re3 form plan approved under part G.’’.

4 (b) WELFARE REFORM PLAN.—Title IV of such Act

5 is amended by adding at the end the following:

6 ‘‘PART G—PLAN AMENDMENTS IMPLEMENTING

7 WELFARE REFORM

8 ‘‘SEC. 491. WELFARE REFORM PLAN.

9 ‘‘(a) PURPOSE.—Any State that desires to carry out

10 a program under this part may submit to the Secretary

11 a welfare reform plan for reorienting the mission of the

12 State agency in order to enable the State agency to—

13 ‘‘(1) integrate welfare and job development

14 services in the State and create linkages with public

15 and private employers, employment service agencies,

16 and other social service providers with the goal of fa17 cilitating access to job placement, skill training, and

18 other social services necessary for self-sufficiency;

19 ‘‘(2) assist low income individuals in obtaining

20 employment and skills training that will eliminate or

21 minimize the need for providing public assistance to

22 such individuals;

23 ‘‘(3) establish formal agreements between each

24 recipient of such aid and the State agency that
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1 specify their mutual obligations in working to attain

2 long-term self-sufficiency for such recipients; and

3 ‘‘(4) provide for the prompt involvement of each

4 such recipient, who is not exempt from participation

5 in the State program under part F, in employment,

6 job-search, self-sufficiency planning, and skills train7 ing that will lead to economic self-sufficiency.

8 ‘‘(b) CONTENTS OF PLAN.—A welfare reform plan

9 shall contain—

10 ‘‘(1) a welfare-job development integration plan

11 that meets the requirements of section 492; and

12 ‘‘(2) a plan for increasing employment among

13 the individuals participating in the State program

14 under part F that includes specific strategies and

15 cost estimates for increasing the capacity of the

16 State to deliver services to the individuals that will

17 increase the number of hours worked by, the earn18 ings of, and the total income of the individuals.

19 ‘‘(c) FORM OF PLAN.—A welfare reform plan shall

20 be in the form of amendments to the State plans under

21 parts A and F.

22 ‘‘(d) DEFINITIONS.—

23 ‘‘(1) GENERAL RULE.—The terms used in this

24 part shall have the meanings given such terms under

25 part A.
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1 ‘‘(2) OTHER TERMS.—As used in this part:

2 ‘‘(A) ADJUSTED INCOME.—The term ‘ad3 justed income’ means all income other than—

4 ‘‘(i) any refund made by reason of

5 section 32 of the Internal Revenue Code of

6 1986 (relating to earned income credit),

7 ‘‘(ii) any payment by an employer

8 under section 3507 of such Code (relating

9 to advance payment of earned income cred10 it), and

11 ‘‘(iii) any amount received through

12 the food stamp program under the Food

13 Stamp Act of 1977.

14 ‘‘(B) PARTICIPANT.—The term ‘partici15 pant’ means an individual who is participating

16 in activities under this part, or who has re17 quested such participation.

18 ‘‘(C) POVERTY LINE.—The term ‘poverty

19 line’ means the income official poverty line (as

20 defined by the Office of Management and

21 Budget, and revised annually in accordance

22 with section 673(2) of the Omnibus Budget

23 Reconciliation Act of 1981) applicable to a fam24 ily of the size involved.
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1 ‘‘SEC. 492. WELFARE-JOB DEVELOPMENT INTEGRATION

2 PLAN.

3 ‘‘(a) DESCRIPTION.—A welfare-job development inte4 gration plan is a plan designed to integrate welfare and

5 job development services and to improve and expand case

6 management services available to recipients of aid under

7 the State plan approved under part A.

8 ‘‘(b) CONTENTS.—A welfare-job development integra9 tion plan shall include strategies for—

10 ‘‘(1) integrating job development personnel into

11 the management and operation of the State agency

12 for the purposes of—

13 ‘‘(A) using such personnel in intake set14 tings in order to evaluate the earning capacity

15 and job development needs of applicants for

16 benefits that are based, in whole or in part, on

17 need and to provide the applicants with job

18 placement counseling in order to obviate or

19 minimize the need for obtaining such assist20 ance;

21 ‘‘(B) increasing significantly the use of

22 such personnel in providing case management

23 services to recipients of aid under the State

24 plan approved under part A with the goal of in25 creasing the number of such recipients that are
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1 engaged in employment or some form of work;

2 and

3 ‘‘(C) enhancing linkages between the State

4 agency and employers, job training and edu5 cation institutions, and other social service pro6 viders;

7 ‘‘(2) integrating information systems to provide

8 welfare and job development personnel with access

9 to relevant information about job openings, skill re10 quirements, and education and skill training oppor11 tunities;

12 ‘‘(3) co-locating (where practicable) welfare,

13 employment, and child support enforcement services;

14 ‘‘(4) establishing procedures for entering into

15 contracts with service providers under which pay16 ment levels are based on performance levels, and en17 tering into memoranda of understanding with job

18 training providers under which payment levels are

19 based on outcomes relating to job placement and

20 retention;

21 ‘‘(5) establishing training procedures for wel22 fare personnel that emphasize job-placement, coun23 seling, and case management;
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1 ‘‘(6) establishing performance incentives for in2 dividual welfare and job development personnel

3 based on such factors as—

4 ‘‘(A) the rate at which recipients of such

5 aid who are assisted by such personnel are

6 placed in jobs; and

7 ‘‘(B) the average earnings of recipients of

8 such aid who are placed in jobs;

9 ‘‘(7) modifying personnel plans and operating

10 and capital budgets to reduce the ratio within the

11 State agency of clients to case workers, with the

12 goals of limiting the ratio to not more than 100 cli13 ents per case worker, and improving the capacity of

14 the State to provide assistance to meet the needs of

15 minor parents; and

16 ‘‘(8) setting such aid at a level so that the sum

17 of the aid payable to a family of an aid recipient

18 who is employed full-time and has entered into a

19 work-support agreement under section 493(b)(1)

20 and the earned income of the family results in an

21 adjusted income for the family of not less than the

22 90 percent of the poverty line.

23 ‘‘(c) PERSONS REQUIRED TO PARTICIPATE OR TO BE

24 INCLUDED.—A welfare-job development integration plan

25 shall—
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1 ‘‘(1) provide that, as a continuing condition of

2 eligibility for aid under the State plan approved

3 under part A, an applicant or recipient of such aid

4 who is not exempt from participation in the program

5 of the State under part F must enter into an

6 Empowerment Compact with the State pursuant to

7 section 493; and

8 ‘‘(2) contain a commitment by the State to

9 enter into an Empowerment Compact pursuant to

10 section 493 with each applicant for such aid (if eligi11 ble for such aid), and each recipient of such aid,

12 who—

13 ‘‘(A) is not exempt from participation in

14 the program of the State under part F; or

15 ‘‘(B) if exempt from such participation,

16 has requested such participation.

17 ‘‘SEC. 493. EMPOWERMENT COMPACTS.

18 ‘‘(a) DESCRIPTION.—An Empowerment Compact is a

19 written agreement that—

20 ‘‘(1) specifies the obligations of the State and

21 of the participant in taking the steps necessary for

22 the participant to achieve long-term self-sufficiency;

23 and

24 ‘‘(2) includes specific goals, and timetables for

25 the attainment of such goals, that will enable the
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1 State and the participant to assess periodically the

2 progress of the participant toward self-sufficiency.

3 ‘‘(b) TYPES.—An Empowerment Compact shall be of

4 1 of the following types:

5 ‘‘(1) WORK-SUPPORT AGREEMENT.—A work6 support agreement that provides, at a minimum, the

7 following:

8 ‘‘(A) BENEFIT LEVELS.—

9 ‘‘(i) IN GENERAL.—The amount pay10 able as aid to the participant under the

11 State plan approved under part A shall be

12 set at a level so that the sum of such aid

13 and the earnings of the participant from

14 full-time employment results in an ad15 justed income for the family of the partici16 pant of not less than 90 percent of the

17 poverty line, except that a family with

18 more than 4 members shall be considered

19 to have only 4 members.

20 ‘‘(ii) REDUCTION OF EARNINGS DIS21 REGARDED.—If the adjusted income of the

22 family of the participant for a month ex23 ceeds the poverty line, the State may re24 duce the amount of earnings of the partici-
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1 pant that is disregarded in determining the

2 amount of such aid.

3 ‘‘(iii) MAXIMUM BENEFIT.—If the ad4 justed income of the family of the partici5 pant for a month (with such exclusions)

6 exceeds 150 percent of the poverty line, the

7 family shall not be eligible to receive aid

8 under the State plan approved under part

9 A.

10 ‘‘(B) CHILD SUPPORT ORDER REQUIRED

11 TO BE OBTAINED.—The participant must have

12 obtained a child support order for each child of

13 the participant who is living with the partici14 pant, and must cooperate with the State in ob15 taining support payments for the participant

16 and for any child with respect to whom aid

17 under the State plan is claimed unless the par18 ticipant is found to have good cause for refus19 ing to cooperate (as determined by the State

20 agency in accordance with the standards pre21 scribed by the Secretary under section

22 402(a)(26)(B)(ii)).

23 ‘‘(C) ASSESSMENT.—Not later than 1 year

24 after the work-support agreement has been en25 tered into, the State shall assess whether the
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1 participant has the capacity to earn more than

2 150 percent of the poverty line.

3 ‘‘(D) REVISION OF EMPLOYABILITY

4 PLAN.—If the State determines that the partici5 pant does not have the capacity to earn more

6 than 150 percent of the poverty line, the State

7 shall require the participant to revise the

8 Empowerment Compact to include specific

9 plans and timetables for enhancing the earning

10 capacity of the participant through skills train11 ing or other activities that the State determines

12 are appropriate.

13 ‘‘(E) MITIGATION OF REDUCED INCOME

14 DUE TO REQUIRED REMEDIAL ACTIVITIES.—If

15 the participant must work fewer hours in order

16 to undertake the activities referred to in sub17 paragraph (D), the amount of aid payable to

18 the participant under the State plan approved

19 under part A shall be an amount that results

20 in the adjusted income for the family of the

21 participant of not less than 90 percent of the

22 average of such adjusted income during the 3-

23 month period that ends with the commencement

24 of such activities, but only if the monthly earn25 ings or work hours of the participant are not
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1 less than 75 percent of the average of such

2 earnings or work hours during such 3-month

3 period.

4 ‘‘(F) CASE MANAGEMENT SERVICES.—The

5 State agency shall provide case management

6 services to the participant (including engaging

7 with the participant in self-sufficiency plan8 ning), and coordinate with local schools, em9 ployers, and community-based organizations in

10 assisting the participant in overcoming personal

11 barriers to self-sufficiency (including substance

12 abuse), obtaining education and job-training,

13 and securing employment.

14 ‘‘(G) TRANSITIONAL CASE MANAGEMENT

15 SERVICES.—The State agency shall provide case

16 management services to the participant for not

17 more than 12 months after aid to the partici18 pant under the State plan approved under part

19 A is terminated.

20 ‘‘(H) PLACEMENT OF LIMITED CHILD SUP21 PORT PAYMENTS IN INTEREST-BEARING AC22 COUNT.—

23 ‘‘(i) ESTABLISHMENT OF ACCOUNT.—

24 The State agency shall establish an inter25 est-bearing account for the participant if—
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1 ‘‘(I) the participant is entitled to

2 child support payments under a court

3 order or an order of an administrative

4 process established under State law;

5 and

6 ‘‘(II) during the past 12 months,

7 an account has not been established

8 under this clause for the participant.

9 ‘‘(ii) DEPOSITS INTO ACCOUNT.—Ex10 cept as provided in clause (iii), after receiv11 ing and paying to the participant the maxi12 mum amount of child support payments

13 payable to the participant under the State

14 plans approved under parts A and D, the

15 State agency shall deposit in the account

16 (if any) established under clause (i) the

17 first $50 of child support payments re18 ceived with respect to a child of the partici19 pant.

20 ‘‘(iii) LIMITATION.—The State agency

21 shall not under clause (ii) deposit more

22 than $500 into any account established

23 under clause (i).

24 ‘‘(iv) DISTRIBUTION.—The State

25 agency shall make the amounts contained
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1 in the account available to a participant to

2 whom aid under the State plan approved

3 under part A has been terminated—

4 ‘‘(I) within 14 days after such

5 termination, if such aid has been ter6 minated due to excessive earnings of

7 the participant; or

8 ‘‘(II) within 45 days after such

9 termination, in any other case.

10 ‘‘(2) SKILLS DEVELOPMENT AGREEMENT.—A

11 skills development agreement that provides, at a

12 minimum, the following:

13 ‘‘(A) INCREASE IN ASSET LIMITS; CASE

14 MANAGEMENT SERVICES; PLACEMENT OF LIM15 ITED CHILD SUPPORT PAYMENTS IN INTEREST16 BEARING ACCOUNT.—The same obligations set

17 forth in subparagraphs (F), (G), and (H) of

18 paragraph (1).

19 ‘‘(B) GOALS AND TIMETABLES.—If the

20 participant is required to participate in the

21 State program under part F, the participant

22 shall establish specific goals and timetables (as

23 part of the employability plan developed for the

24 participant under section 482(b)(1)(B)) for ob25 taining employment and, as necessary, for en-
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1 gaging in skills training and other activities in

2 order to increase the earning capacity of the

3 participant to at least 150 percent of the

4 poverty line.

5 ‘‘(C) ASSESSMENT.—Not later than 1 year

6 after the skills development agreement has been

7 entered into, the State shall assess whether the

8 participant has the capacity to earn more than

9 150 percent of the poverty line.

10 ‘‘(D) REVISION OF EMPLOYABILITY

11 PLAN.—If the State determines that the partici12 pant does not have the capacity to earn more

13 than 150 percent of the poverty line, the State

14 shall require the participant to revise the em15 ployability plan to include specific plans and

16 timetables for enhancing the earning capacity of

17 the participant through skills training or other

18 activities that the State determines are appro19 priate.

20 ‘‘(c) EMPOWERMENT COMPACT TO REFLECT PREF21 ERENCES OF THE PARTICIPANT.—The State agency

22 shall—

23 ‘‘(1) inform the participant of the availability of

24 each type of Empowerment Compact described in

25 subsection (b);
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1 ‘‘(2) consult with the participant in the develop2 ment of an Empowerment Compact for the partici3 pant;

4 ‘‘(3) inform the participant of the right of the

5 participant to suggest revisions in any

6 Empowerment Compact entered into with the partic7 ipant;

8 ‘‘(4) consult with the participant in any revision

9 of an Empowerment Compact entered into with the

10 participant; and

11 ‘‘(5) to the maximum extent possible and con12 sistent with this section, ensure that the

13 Empowerment Compact for a participant reflects the

14 preferences of the participant.

15 ‘‘(d) REASSESSMENT AND REVISION.—Not later than

16 6 months after the State and a participant enter into an

17 Empowerment Compact, and not less frequently than bi18 annually thereafter, the State—

19 ‘‘(1) shall assess the progress of the participant

20 toward achieving the goals for self-sufficiency set

21 forth in the Empowerment Compact; and

22 ‘‘(2) may revise the terms of the Empowerment

23 Compact in order to enhance the progress of the

24 participant toward self-sufficiency.
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1 ‘‘SEC. 494. APPROVAL AND IMPLEMENTATION OF WELFARE

2 REFORM PLAN.

3 ‘‘(a) APPROVAL.—Not later than 120 days after a

4 State submits to the Secretary a welfare reform plan that

5 meets the requirements of section 491, and after the Sec6 retary provides for public review of and public comment

7 on the plan, the Secretary shall approve the plan.

8 ‘‘(b) IMPLEMENTATION.—

9 ‘‘(1) IN GENERAL.—Upon approval by the Sec10 retary of the welfare reform plan of a State, the

11 State may implement the plan.

12 ‘‘(2) CERTIFICATION.—

13 ‘‘(A) AFDC APPLICANTS.—Not later than

14 6 months after the Secretary approves the wel15 fare reform plan of a State, the State shall cer16 tify that the State has entered into

17 Empowerment Compacts with a significant

18 number (as prescribed by the Secretary in regu19 lations) of the applicants for aid under the

20 State plan under part A with whom the State

21 is required to enter into Empowerment Com22 pacts.

23 ‘‘(B) AFDC RECIPIENTS.—Not later than

24 1 year after the Secretary approves the welfare

25 reform plan of a State, the State shall certify

26 to the Secretary that the State has entered into
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1 Empowerment Compacts with a significant

2 number (as prescribed by the Secretary in regu3 lations) of the recipients of aid under the State

4 plan under part A with whom the State is re5 quired to enter into Empowerment Compacts.

6 ‘‘SEC. 495. EVALUATION.

7 ‘‘Within 3 years after the Secretary approves the wel8 fare reform plan of a State and every 3 years thereafter,

9 the State shall submit to the Secretary a report that con10 tains the findings of an evaluation of the impacts of the

11 plan on, at a minimum, the following:

12 ‘‘(1) The earnings of, number of hours worked

13 by, and total income of recipients of aid under the

14 State plan approved under part A.

15 ‘‘(2) The rate at which such recipients obtain

16 child support orders.

17 ‘‘(3) The average duration of receipt of such

18 aid.

19 ‘‘(4) The rate at which former recipients of

20 such aid have resumed receipt of such aid.

21 ‘‘(5) The number of hours spent by such recipi22 ents in work programs and skill training pro23 grams.’’.

24 (c) INCREASED RESOURCE DISREGARDS FOR AFDC

25 RECIPIENTS WHO HAVE ENTERED INTO EMPOWERMENT
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1 COMPACTS.—Section 402(a)(7)(B) of such Act (42 U.S.C.

2 602(a)(7)(B)) is amended—

3 (1) by inserting (or, in the case of a family any

4 of whose members has entered into an

5 Empowerment Compact with the State, $5,000)’’

6 after ‘‘may determine’’; and

7 (2) by inserting ‘‘(or, in the case of a family

8 any of whose members has entered into an

9 Empowerment Compact with the State, $3,000 or

10 such lower amount that is not less than $2,000 as

11 the State may determine)’’ before ‘‘, (ii)’’.

12 (d) DEADLINE FOR RAPID ASSESSMENT AND REFER13 RAL.—Section 482(b) of such Act (42 U.S.C. 682(b)) is

14 amended by adding at the end the following:

15 ‘‘(4) Within 60 days after an individual becomes re16 quired to participate in the program of a State under this

17 part, the State agency shall conduct the assessment of the

18 individual, develop an employability plan for the individ19 ual, and refer the individual to a program component.’’.
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1 TITLE II—INCENTIVES FOR

2 STATE PARTICIPATION IN

3 WELFARE REFORM

4 SEC. 201. INCREASED FUNDING FOR THE STATE JOBS PRO5 GRAM.

6 Section 403(l) of the Social Security Act (42 U.S.C.

7 603(l)) is amended by adding at the end the following:

8 ‘‘(5)(A) Notwithstanding any other provision of this

9 subsection:

10 ‘‘(i) A welfare reform State shall not be subject

11 to any limitation on payments under this subsection

12 by reason of subsection (k).

13 ‘‘(ii) The Secretary shall pay to any welfare re14 form State for any fiscal year after fiscal year 1994

15 an amount equal to 90 percent of the amount (if

16 any) by which the cash expenditures of the State for

17 the costs of operating a program under part F (in18 cluding cash expenditures for the costs of providing

19 child care pursuant to section 402(g)(1)(A)) for the

20 fiscal year exceeds the total of such cash expendi21 tures for fiscal year 1994, in lieu of any payment for

22 such expenditures under subsection (a) of this

23 section.
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1 ‘‘(B) Subparagraph (A) shall not apply to a welfare

2 reform State for a fiscal year unless the State meets the

3 following requirements:

4 ‘‘(i) The expenditures of the State for the costs

5 of operating a program under part F (whether in

6 cash or in kind) for the fiscal year is not less than

7 the amount so expended during fiscal year 1994.

8 ‘‘(ii) Beginning 3 years after the Secretary ap9 proves the welfare reform plan of the State, the par10 ticipation rate of the State is not less than 50

11 percent.

12 ‘‘(iii) The expenditures of the State for the

13 costs of providing child care pursuant to section

14 402(g) (whether in cash or in kind) for the fiscal

15 year is not less than such expenditures for fiscal

16 year 1994.

17 ‘‘(C) The term ‘welfare reform State’ means a State

18 that has a plan approved under part G and has made any

19 certification required by section 494(b).’’.

20 SEC. 202. AUTHORITY TO ADJUST INDIVIDUAL AFDC BENE21 FITS QUARTERLY.

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

23 602(a)), as amended by section 101(a) of this Act, is

24 amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (45);

3 (2) by striking the period at the end of para4 graph (46) and inserting ‘‘; and’’; and

5 (3) by inserting after paragraph (46) the

6 following:

7 ‘‘(47) if the State is a welfare reform State (as

8 defined in section 403(l)(5)(C)), provide that if the

9 State elects to reduce to quarterly the frequency

10 with which the State adjusts the amount payable to

11 individuals participating in activities under the State

12 plan approved under part G, the State must modify

13 such amount (in accordance with regulations pre14 scribed by the Secretary) if such an individual pre15 sents documentation that—

16 ‘‘(A) the income of the individual during

17 the succeeding 3-month period will be less than

18 such income during the most recent 3-month

19 period; or

20 ‘‘(B) the income of the individual during

21 the succeeding 3-month period will be less than

22 the amount the State has determined will be

23 the income of the individual for such period.’’.
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1 SEC. 203. GRANTS TO SUPPORT WELFARE REFORM.

2 (a) WELFARE REFORM PLANNING GRANTS.—The

3 Secretary may make grants to States for the purpose of

4 developing welfare reform plans pursuant to part G of title

5 IV of the Social Security Act.

6 (b) LIMITATIONS ON AUTHORIZATION OF APPRO7 PRIATIONS.—The Secretary may expend in any of fiscal

8 years 1994, 1995, 1996, 1997, 1998, 1999, and 2000 for

9 grants under subsection (a) of this section not more than

10 1 percent of the amounts appropriated for payments under

11 section 403(l) of the Social Security Act for the fiscal year.

12 TITLE III—POLICY CHANGES TO

13 REWARD WORK

14 SEC. 301. AUTHORITY OF STATES TO ESTABLISH EN15 HANCED EARNINGS DISREGARDS FOR AFDC

16 RECIPIENTS.

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

18 U.S.C. 602(a)(8)(B)) is amended—

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

20 and

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

22 ‘‘(iii) notwithstanding clauses (ii) and (iv)

23 of subparagraph (A) and clause (ii) of this sub24 paragraph, may disregard earned income of any

25 child or relative receiving aid to families with

26 dependent children, or of any other individual
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1 (living in the same home as such relative and

2 child) whose needs as taken into account in

3 making the determination under paragraph (7),

4 in accordance with any combination of rules

5 which (as determined by the State in accord6 ance with regulations prescribed by the Sec7 retary) is at least as favorable to the recipient

8 of such aid as the combination of rules con9 tained in such clauses, but not more favorable

10 to the recipient than a rule providing for the

11 disregard of the first $200 of the total of such

earned income for such month plus 1 12 ⁄2 of the

13 remainder thereof; and’’.

14 SEC. 302. AUTHORITY OF STATES TO DEFINE UNEMPLOY15 MENT FOR PURPOSES OF THE AFDC–UP PRO16 GRAM.

17 Section 407(a) of the Social Security Act (42 U.S.C.

18 607(a)) is amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’;

20 (2) by striking ‘‘Secretary’’ and inserting

21 ‘‘State’’; and

22 (3) by adding at the end the following:

23 ‘‘(2) The standards prescribed pursuant to paragraph

24 (1) shall not impose a limit of less than 100 hours on
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1 the amount of time during which a parent who is the prin2 cipal earner may be employed during a month.’’.

3 SEC. 303. DEPENDENT CARE CREDIT TO BE REFUNDABLE;

4 ADVANCE PAYMENTS OF CREDIT.

5 (a) CREDIT TO BE REFUNDABLE.—

6 (1) IN GENERAL.—Section 21 of the Internal

7 Revenue Code of 1986 (relating to expenses for

8 household and dependent care services necessary for

9 gainful employment) is hereby moved to subpart C

10 of part IV of subchapter A of chapter 1 of such

11 Code (relating to refundable credits) and inserted

12 after section 34.

13 (2) TECHNICAL AMENDMENTS.—

14 (A) Section 35 of such Code is redesig15 nated as section 36.

16 (B) Section 21 of such Code is redesig17 nated as section 35.

18 (C) Paragraph (1) of section 35(a) of such

19 Code (as redesignated by subparagraph (B)) is

20 amended by striking ‘‘this chapter’’ and insert21 ing ‘‘this subtitle’’.

22 (D) Subparagraph (C) of section 129(a)(2)

23 of such Code is amended by striking ‘‘section

24 21(e)’’ and inserting ‘‘section 35(e)’’.
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1 (E) Paragraph (2) of section 129(b) of

2 such Code is amended by striking ‘‘section

3 21(d)(2)’’ and inserting ‘‘section 35(d)(2)’’.

4 (F) Paragraph (1) of section 129(e) of

5 such Code is amended by striking ‘‘section

6 21(b)(2)’’ and inserting ‘‘section 35(b)(2)’’.

7 (G) Subsection (e) of section 213 of such

8 Code is amended by striking ‘‘section 21’’ and

9 inserting ‘‘section 35’’.

10 (H) The table of sections for subpart C of

11 part IV of subchapter A of chapter 1 of such

12 Code is amended by striking the item relating

13 to section 35 and inserting the following:

‘‘Sec. 35. Expenses for household and dependent care services

necessary for gainful employment.

‘‘Sec. 36. Overpayments of tax.’’.

14 (I) The table of sections for subpart A of

15 such part IV is amended by striking the item

16 relating to section 21.

17 (3) EFFECTIVE DATE.—The amendments made

18 by this subsection shall apply to taxable years begin19 ning after the date of the enactment of this Act.

20 (b) ADVANCE PAYMENT OF CREDIT.—

21 (1) IN GENERAL.—Chapter 25 of such Code

22 (relating to general provisions relating to employ23 ment taxes) is amended by inserting after section

24 3507 the following new section:
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1 ‘‘SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE

2 CREDIT.

3 ‘‘(a) GENERAL RULE.—Except as otherwise provided

4 in this section, every employer making payment of wages

5 with respect to whom a dependent care credit eligibility

6 certificate is in effect shall, at the time of paying such

7 wages, make an additional payment equal to such employ8 ee’s dependent care credit advance amount.

9 ‘‘(b) DEPENDENT CARE CREDIT ELIGIBILITY CER10 TIFICATE.—For purposes of this title, a dependent care

11 credit eligibility certificate is a statement furnished by an

12 employee to the employer which—

13 ‘‘(1) certifies that the employee will be eligible

14 to receive the credit provided by section 35 for the

15 taxable year,

16 ‘‘(2) certifies that the employee does not have

17 a dependent care credit eligibility certificate in effect

18 for the calendar year with respect to the payment of

19 wages by another employer,

20 ‘‘(3) states whether or not the employee’s

21 spouse has a dependent care credit eligibility certifi22 cate in effect, and

23 ‘‘(4) estimates the amount of dependent care

24 credit of the employee for the calendar year.

25 For purposes of this section, a certificate shall be treated

26 as being in effect with respect to a spouse if such a certifi-
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1 cate will be in effect on the first status determination date

2 following the date on which the employee furnishes the

3 statement in question.

4 ‘‘(c) DEPENDENT CARE CREDIT ADVANCE

5 AMOUNT.—

6 ‘‘(1) IN GENERAL.—For purposes of this title,

7 the term ‘dependent care credit advance amount’

8 means, with respect to any payroll period, the

9 amount determined—

10 ‘‘(A) on the basis of the employee’s wages

11 from the employer for such period,

12 ‘‘(B) on the basis of the employee’s esti13 mated amount of dependent care credit included

14 in the dependent care credit eligibility certifi15 cate, and

16 ‘‘(C) in accordance with tables provided by

17 the Secretary.

18 ‘‘(2) ADVANCE AMOUNT TABLES.—The tables

19 referred to in paragraph (1)(C) shall be similar in

20 form to the tables prescribed under section 3402

21 and, to the maximum extent feasible, shall be coordi22 nated with such tables and the tables prescribed

23 under section 3507(c).
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1 ‘‘(d) DEPENDENT CARE CREDIT.—For purposes of

2 this section, the term ‘dependent care credit’ means the

3 credit allowable by section 35.

4 ‘‘(e) OTHER RULES.—For purposes of this section,

5 rules similar to the rules of subsections (d) and (e) of sec6 tion 3507 shall apply.

7 ‘‘(f) REGULATIONS.—The Secretary shall prescribe

8 such regulations as may be necessary to carry out the pur9 poses of this section.’’.

10 (2) CLERICAL AMENDMENT.—The table of sec11 tions for chapter 25 of such Code is amended by in12 serting after the item relating to section 3507 the

13 following new item:

‘‘Sec. 3507A. Advance payment of dependent care credit.’’.

14 (3) EFFECTIVE DATE.—The amendments made

15 by this subsection shall apply to taxable years begin16 ning more than 1 year after the date of the enact17 ment of this Act.

18 SEC. 304. REPORT ON CONFLICTING ADMINISTRATIVE RE19 QUIREMENTS THAT INHIBIT COORDINATION

20 OF THE AFDC, FOOD STAMP, MEDICAID, AND

21 JOB TRAINING PARTNERSHIP ACT PRO22 GRAMS.

23 Within 1 year after the date of the enactment of this

24 Act, and annually thereafter, the Secretaries of Agri25 culture, Health and Human Services, and Labor, in con-
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1 sultation with the States, shall jointly submit to the Con2 gress a detailed report describing any provision of title IV

3 of the Social Security Act, the Food Stamp Act of 1977,

4 the Job Training Partnership Act, or any other Federal

5 or State law or regulation that may inhibit implementation

6 of welfare reform plans (whether or not submitted for ap7 proval under part G of such title).

8 SEC. 305. OUTCOME MEASURES FOR THE JOBS PROGRAM.

9 (a) ESTABLISHMENT OF REQUIREMENTS BY REGU10 LATION.—Within 9 months after the date of the enact11 ment of this Act, the Secretary of Health and Human

12 Services shall establish the requirements to be followed by

13 each State in developing and applying outcome measures

14 and targets for assessing the effectiveness of the State

15 program under section 402(a)(19) and part F of title IV

16 of the Social Security Act. The outcome measures shall

17 consist of methods for assessing the success of a State’s

18 program under such part in increasing the average num19 ber of hours worked by, the average earnings of, and total

20 income of participants in the program. The methods shall

21 take into account macroeconomic factors in the State that

22 affect the ability of the program to increase the employ23 ment of its participants.

24 (b) EFFECT OF FAILURE TO SUBMIT PLAN FOR

25 MEETING REQUIREMENTS.—
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1 (1) REDUCTION OF JOBS MATCHING RATES.—

2 Section 403(l) of the Social Security Act (42 U.S.C.

3 603(l)), as amended by section 201 of this Act, is

4 amended by adding at the end the following:

5 ‘‘(6) The amount otherwise payable to the State

6 under this subsection shall be reduced by 5 percent if the

7 State has not submitted for the approval of the Secretary

8 a plan for meeting the requirements established pursuant

9 to 305(a) of the Work-First Welfare Reform Act of

10 1994.’’.

11 (2) EFFECTIVE DATE.—The amendment made

12 by paragraph (1) shall take effect 12 months after

13 the Secretary establishes the requirements required

14 by subsection (a).

15 SEC. 306. ENHANCE USE OF TRANSITIONAL CHILD CARE

16 AND MEDICAID.

17 (a) GAO REPORT ON METHODS OF DETERMINING

18 USE.—Within 6 months after the date of the enactment

19 of this Act, the Comptroller General of the United States

20 shall submit to the Congress a methodology for determin21 ing—

22 (1) the proportion of children eligible for child

23 care services under section 402(g) of the Social

24 Security Act who are receiving such services; and
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1 (2) the proportion of children eligible for ex2 tended medical assistance benefits under a State

3 plan approved under title XIX of such Act by reason

4 of section 1925 of such Act who are receiving such

5 benefits.

6 (b) IMPROVED STATE EFFORT TO ENCOURAGE PAR7 TICIPATION.—Section 402(g)(3)(A) of the Social Security

8 Act (42 U.S.C. 602(g)(3)(A)) is amended by adding at

9 the end the following:

10 ‘‘(iii) In the case of amounts expended for child care

11 pursuant to this subsection by a State which has not made

12 a good faith effort to develop clear and simple information

13 materials describing available child care assistance and

14 medical assistance under the State plan approved under

15 title XIX, the otherwise applicable rate for purposes of

16 section 403(a) shall be reduced by 5 percentage points.’’.

17 (c) OPTION TO PROVIDE FREE TRANSITIONAL

18 CHILD CARE TO FAMILIES BELOW THE POVERTY

19 LINE.—Section 402(g)(1)(A) of such Act (42 U.S.C.

20 602(g)(1)(A)) is amended by adding at the end the follow21 ing:

22 ‘‘(viii) Notwithstanding clause (vii), each State agen23 cy may elect not to require a family to contribute to child

24 care provided under clause (ii) if the income of the family

25 does not exceed the income official poverty line (as defined
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1 by the Office of Management and Budget, and revised an2 nually in accordance with section 673(2) of the Omnibus

3 Budget Reconciliation Act of 1981) applicable to a family

4 of the size involved.’’.

5 (d) OPTION TO PROVIDE TRANSITIONAL CHILD

6 CARE TO NONREQUESTING FAMILY THAT AGREES TO

7 ACCEPT IT.—Section 402(g)(1)(A) of such Act (42 U.S.C.

8 602(g)(1)(A)), as amended by subsection (c) of this sec9 tion, is amended by adding at the end the following:

10 ‘‘(ix) Each State agency may guarantee child care to

11 a family that has not requested such care if the family

12 is eligible for such care and agrees to receive such care.’’.

13 SEC. 307. TREATMENT OF STUDENT EARNINGS AND IN14 COME FROM PROGRAMS UNDER THE JOB

15 TRAINING PARTNERSHIP ACT.

16 (a) RESOURCE DISREGARDS.—Section 402(a)(7)(B)

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

18 amended—

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

20 and

21 (2) by inserting ‘‘, or (v) the earned income of

22 any child to the extent disregarded under paragraph

23 (8)’’ before the semicolon.

24 (b) INCOME DISREGARDS.—Section 402(a)(8)(A) of

25 such Act (42 U.S.C. 602(a)(8)(A)) is amended—
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1 (1) in clause (i)—

2 (A) by inserting ‘‘applying for or’’ before

3 ‘‘receiving’’; and

4 (B) by inserting ‘‘(including a child

5 (whether or not married) who has not attained

6 20 years of age)’’ after ‘‘dependent child’’; and

7 (2) in clause (v)—

8 (A) by striking ‘‘may’’ and inserting

9 ‘‘shall’’;

10 (B) by inserting ‘‘(including any child

11 (whether or not married) who has not attained

12 20 years of age)’’ after ‘‘dependent child’’; and

13 (C) by striking ‘‘time (not to exceed six

14 months with respect to earned income)’’ and in15 serting ‘‘time,’’.

16 (c) EXCLUSION FROM GROSS INCOME TEST.—Sec17 tion 402(a)(18) of such Act (42 U.S.C. 602(a)(18)) is

18 amended by striking ‘‘paragraph (8)(A)(v) or 8(A)(viii)’’

19 and inserting ‘‘clause (i), (v), or (viii) of paragraph

20 (8)(A)’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall take effect on October 1, 1994.
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1 TITLE IV—CHILD SUPPORT

2 ENFORCEMENT

3 SEC. 401. FEDERAL CHILD SUPPORT ORDER REGISTRY.

4 (a) ESTABLISHMENT.—Not later than October 1,

5 1995, the Secretary shall establish a Federal registry of

6 child support orders issued or modified by any State court

7 or administrative process established under State law.

8 (b) COMPARISON OF INFORMATION ON W–4 FORMS

9 WITH INFORMATION IN CHILD SUPPORT ORDERS.—With10 in 10 days after the registry established under subsection

11 (a) receives a W–4 form of an employee, the registry

12 shall—

13 (1) compare the information on the form with

14 the information in the registry on the child support

15 obligations of the employee; and

16 (2) transmit to the registry established under

17 section 466(a)(12) of the State in which the em18 ployee is employed a notice as to whether the

19 amount specified on the W–4 form as the monthly

20 child support obligation of the employee is accurate

21 or not.

22 (c) REGULATIONS.—The Secretary shall prescribe

23 such regulations as may be necessary to carry out this

24 section, especially in cases involving an employee who has

25 2 or more employers or child support obligations.
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1 (d) STATE ACCESS TO THE REGISTRY.—The Sec2 retary shall, upon request of any State, provide the State

3 with access to the information contained in the registry

4 established under subsection (a).

5 (e) DEFINITIONS.—As used in this section:

6 (1) CHILD SUPPORT ORDER.—The term ‘‘child

7 support order’’ means an order requiring payments

8 for support and maintenance of a child or of a child

9 and the parent with whom the child is living.

10 (2) SECRETARY.—The term ‘‘Secretary’’ means

11 the Secretary of Health and Human Services.

12 (3) STATE.—The term ‘‘State’’ includes the

13 several States, the District of Columbia, the Com14 monwealth of Puerto Rico, the Commonwealth of the

15 Northern Mariana Islands, the United States Virgin

16 Islands, Guam, American Samoa, and the Trust

17 Territory of the Pacific Islands.

18 SEC. 402. EXPANSION OF FEDERAL PARENT LOCATOR SYS19 TEMS.

20 (a) EXPANSION OF FUNCTIONS.—Section 453(a) of

21 the Social Security Act (42 U.S.C. 653(a)) is amended

22 by striking ‘‘enforcing support obligations against such

23 parent’’ and inserting ‘‘establishing parentage, establish24 ing, modifying, and enforcing child support obligations’’.
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1 (b) ACCESS TO ADDITIONAL DATA BASES.—Section

2 453 of such Act (42 U.S.C. 653) is amended—

3 (1) in subsection (b), by striking ‘‘the most re4 cent address and place of employment’’ and insert5 ing ‘‘the most recent residential address, employer

6 name and address, and amounts and nature of in7 come and assets’’;

8 (2) in subsection (c)(3), by striking ‘‘the resi9 dent parent’’ and inserting ‘‘either parent’’; and

10 (3) in subsection (e), by adding at the end the

11 following:

12 ‘‘(4) The Secretary of the Treasury shall enter into

13 an agreement with the Secretary to provide prompt access

14 by the Secretary (in accordance with this subsection and

15 section 6103(l)(6) of the Internal Revenue Code of 1986)

16 to all Federal income tax returns filed by individuals with

17 the Internal Revenue Service.’’.

18 (c) EXPANSION OF ACCESS TO THE NATIONAL PAR19 ENT LOCATOR NETWORK.—Section 453 of such Act (42

20 U.S.C. 653) is amended by adding at the end the

21 following:

22 ‘‘(g) The Secretary shall expand the Parent Locator

23 Service to establish a national network based on the com24 prehensive statewide child support enforcement systems

25 developed by the States, to—
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1 ‘‘(1) allow each State to—

2 ‘‘(A) locate any absent parent who owes

3 child support or for whom a child support obli4 gation is being established, by—

5 ‘‘(i) accessing the records of other

6 State agencies and sources of locate infor7 mation directly from one computer system

8 to another; and

9 ‘‘(ii) accessing Federal sources of lo10 cate information in the same fashion;

11 ‘‘(B) access the files of other States to de12 termine whether there are other child support

13 orders and obtain the details of those orders;

14 ‘‘(C) provide for both on-line and batch

15 processing of locate requests, with on-line ac16 cess restricted to cases in which the information

17 is needed immediately (for such reasons as

18 court appearances) and batch processing used

19 to ‘troll’ data bases to locate individuals or up20 date information periodically; and

21 ‘‘(D) direct locate requests to individual

22 States or Federal agencies, broadcast requests

23 to selected States, or broadcast cases to all

24 States when there is no indication of the source

25 of needed information;
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1 ‘‘(2) provide for a maximum of 48-hour turn2 around time for information to be broadcast and re3 turned to a requesting State;

4 ‘‘(3) provide ready access to courts and admin5 istrative agencies of the information on the network

6 by location of a computer terminal in each court;

7 and

8 ‘‘(4) access the registries of child support or9 ders maintained by States pursuant to section

10 466(a)(12).’’.

11 SEC. 403. NATIONAL REPORTING OF EMPLOYEES AND

12 CHILD SUPPORT INFORMATION.

13 (a) IN GENERAL.—The Secretary of the Treasury, in

14 consultation with the Secretary of Labor, shall establish

15 a system of reporting of employees by requiring employers

16 to provide a copy of every employee’s W–4 form to the

17 Federal child support order registry established pursuant

18 to section 401(a) of the Work-First Welfare Reform Act

19 of 1994 and to the child support order registry established

20 pursuant to section 466(a)(12) of the Social Security Act

21 by the State in which the employment is located—

22 (1) in the case of employees hired on or after

23 the effective date of this section, on the date the em24 ployee is hired; or
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1 (2) in the case of employees hired before such

2 effective date, within 10 days after such effective

3 date.

4 (b) INCLUSION OF CHILD SUPPORT INFORMATION

5 ON W–4 FORMS.—The Secretary of the Treasury shall

6 modify the W–4 form to enable the employee to indicate

7 on the form—

8 (A) whether the employee owes child sup9 port, and if so—

10 (i) to whom the support is payable

11 and the amount of the support payable;

12 and

13 (ii) whether the support is to be paid

14 through wage withholding; and

15 (B) whether health care insurance is avail16 able to the new employee, and, if so, whether

17 the employee has obtained such insurance for

18 the dependent children of the employee.

19 SEC. 404. RECONCILIATION OF CHILD SUPPORT OBLIGA20 TION AND PAYMENTS ON INCOME TAX RE21 TURN.

22 (a) IN GENERAL.—Chapter 77 of the Internal Reve23 nue Code of 1986 (relating to miscellaneous provisions)

24 is amended by adding at the end thereof the following new

25 section:
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1 ‘‘SEC. 7524. RECONCILIATION OF CHILD SUPPORT OBLIGA2 TION AND PAYMENTS ON INCOME TAX RE3 TURN.

4 ‘‘(a) IN GENERAL.—Each applicable child support

5 obligation of any individual for months ending with or

6 within any taxable year shall be paid—

7 ‘‘(1) not later than the last date (determined

8 without regard to extensions) prescribed for filing

9 the individual’s return of tax imposed by chapter 1

10 for such taxable year, and

11 ‘‘(2)(A) if such return is filed not later than

12 such date, with such return, or

13 ‘‘(B) in any case not described in subparagraph

14 (A), in such manner as the Secretary may by regula15 tions prescribe.

16 ‘‘(b) OFFSET FOR WITHHELD CHILD SUPPORT,

17 ETC.—There shall be allowed as a credit against the

18 amount required to be paid under subsection (a) by an

19 individual the sum of—

20 ‘‘(1) the amount (if any) deducted and withheld

21 pursuant to State law from the wages received by

22 such individual during the taxable year,

23 ‘‘(2) the amount (if any) paid by such individ24 ual under section 6654 by reason of subsection

25 (f)(3) thereof for such taxable year, and
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1 ‘‘(3) the amount paid by such individual di2 rectly to the person to whom the obligation is owed

3 (or, if such person has assigned to a State the right

4 to collect the obligation, the State).

5 ‘‘(c) CREDIT OR REFUND FOR PAYMENTS IN EXCESS

6 OF ACTUAL OBLIGATION.—There shall be allowed as a

7 credit against the tax imposed by subtitle A for the taxable

8 year an amount equal to the excess (if any) of—

9 ‘‘(1) the aggregate of the amounts described in

10 paragraphs (1), (2), and (3) of subsection (a) for

11 such taxable year, over

12 ‘‘(2) the aggregate of the child support obliga13 tions of the taxpayer for such taxable year.

14 The credit allowed by this subsection shall be treated for

15 purposes of this title as allowed by subpart C of part IV

16 of subchapter A of chapter 1.

17 ‘‘(d) FAILURE TO PAY AMOUNT OWING.—If an indi18 vidual fails to pay the full amount required to be paid

19 under subsection (a) on or before due date for such pay20 ment, the Secretary shall assess and collect the unpaid

21 amount in the same manner, with the same powers, and

22 subject to the same limitations applicable to a tax imposed

23 by subtitle C the collection of which would be jeopardized

24 by delay.
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1 ‘‘(e) APPLICABLE CHILD SUPPORT OBLIGATION.—

2 For purposes of this section, the term ‘applicable child

3 support obligation’ means a legal obligation to provide

4 child support (as defined in section 462(b) of the Social

5 Security Act).

6 ‘‘(f) AMOUNTS COLLECTED BY SECRETARY PAID TO

7 STATE REGISTRIES.—Amounts collected under this sec8 tion and section 6654 by reason of an applicable child sup9 port obligation shall be paid by the Secretary to the appro10 priate State registry established pursuant to section

11 466(a)(12)(A)(i) of the Social Security Act.’’

12 (b) WITHHELD CHILD SUPPORT TO BE SHOWN ON

13 W–2.—Subsection (a) of section 6051 of such Code is

14 amended by striking ‘‘and’’ at the end of paragraph (8),

15 by striking the period at the end of paragraph (9) and

16 inserting ‘‘, and’’, and by inserting after paragraph (9)

17 the following new paragraph:

18 ‘‘(10) the total amount of child support obliga19 tions withheld pursuant to State law.’’

20 (c) APPLICATION OF ESTIMATED TAX PENALTY.—

21 (1) Subsection (f) of section 6654 of such Code

22 (relating to failure by individual to pay estimated in23 come tax) is amended by striking ‘‘minus’’ at the

24 end of paragraph (2) and inserting ‘‘plus’’, by redes25 ignating paragraph (3) as paragraph (4), and by in-
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1 serting after paragraph (2) the following new para2 graph:

3 ‘‘(3) the aggregate applicable child support obli4 gation (as defined in section 7524(a)) of the tax5 payer for months ending with or within the taxable

6 year, minus’’.

7 (2) Paragraph (1) of section 6654(d) of such

8 Code is amended by adding at the end the following

9 new subparagraph:

10 ‘‘(D) DETERMINATION OF REQUIRED AN11 NUAL PAYMENT FOR TAXPAYERS REQUIRED TO

12 PAY CHILD SUPPORT.—In the case of a tax13 payer who is required under section 7524 to

14 pay an applicable child support obligation (as

15 defined in section 7524) for any month ending

16 with or within the taxable year, the required

17 annual payment shall be the sum of—

18 ‘‘(i) the amount determined under

19 subparagraph (B) without regard to sub20 section (f)(3), plus

21 ‘‘(ii) the aggregate amount of such

22 obligation for all months ending with or

23 within the taxable year.’’

24 (3) CREDIT FOR WITHHELD AMOUNTS, ETC.—

25 Subsection (g) of section 6654 of such Code is
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1 amended by adding at the end the following new

2 paragraph:

3 ‘‘(3) CHILD SUPPORT.—For purposes of apply4 ing this section, the sum of—

5 ‘‘(A) amounts deducted and withheld

6 under State law for applicable child support ob7 ligations, and

8 ‘‘(B) amounts paid by the individual di9 rectly to the person to whom the obligation is

10 owed (or, if such person has assigned to a State

11 the right to collect the obligation, the State),

12 shall be deemed to be a payment of the amount de13 scribed in subsection (f)(3) on the date such

14 amounts were actually withheld or paid, as the case

15 may be.’’.

16 (d) CLERICAL AMENDMENT.—The table of sections

17 for chapter 77 of such Code is amended by adding at the

18 end thereof the following new item:

‘‘Sec. 7524. Reconciliation of child support obligation and payments on income tax return.’’.

19 (e) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to taxable years beginning after

21 December 31, 1995.
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1 SEC. 405. UNIFORM CHILD SUPPORT WITHHOLDING

2 ORDER.

3 Section 452(a) of the Social Security Act (42 U.S.C.

4 652(a)) is amended—

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

6 (9);

7 (2) by striking the period at the end of para8 graph (10) and inserting ‘‘; and’’; and

9 (3) by inserting after paragraph (10) the fol10 lowing:

11 ‘‘(11) develop a uniform order to be used in all

12 cases in which income is to be withheld for the pay13 ment of child support, which shall contain the name

14 of the individual whose income is to be withheld, the

15 number of children covered by the order, and the in16 dividual or State to whom the withheld income is to

17 be paid, and be generic to allow for the service of

18 the order on all sources of income.’’.

19 SEC. 406. STATE ROLE.

20 (a) STATE CHILD SUPPORT ORDER REGISTRIES.—

21 Section 466(a) of the Social Security Act (42 U.S.C.

22 666(a)) is amended by inserting after paragraph (11) the

23 following:

24 ‘‘(12) Procedures under which the—

25 ‘‘(A) State child support enforcement

26 agency shall—
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1 ‘‘(i) establish and maintain a child

2 support order registry which shall in3 clude—

4 ‘‘(I) a copy of each child support

5 order issued or modified in the State

6 on or after the effective date of this

7 paragraph;

8 ‘‘(II) a copy of each child support

9 order issued or modified in the State

10 before the effective date of this para11 graph that is being enforced under the

12 State plan; and

13 ‘‘(III) a copy of each child sup14 port order issued or modified in the

15 State before the enactment of this

16 paragraph that the parties to the

17 order have requested be included in

18 the Federal child support order reg19 istry established pursuant to section

20 401(a) of the Work-First Welfare Re21 form Act of 1994;

22 ‘‘(ii)(I) immediately upon receipt of a

23 child support order referred to in subclause

24 (I) or (II) of clause (i), transmit a copy of

25 the order to the Federal registry; and
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1 ‘‘(II) beginning 2 years after such

2 date of enactment, transmit to the Federal

3 registry a copy of each child support order

4 referred to in clause (i)(III); and

5 ‘‘(iii) distribute in accordance with

6 section 457(b) all amounts received from

7 employers that have been deducted and

8 withheld from the wages of employees for

9 the payment of child support obligations,

10 and all amounts received from the Internal

11 Revenue Service pursuant to section

12 7524(f) of the Internal Revenue Code of

13 1986, within 10 days after receipt;

14 ‘‘(B) allow any individual owed support

15 pursuant to a child support order issued or

16 modified in the State who alleges that an em17 ployer has failed to comply subsection

18 (b)(11)(B)(ii) with respect to the order, or that

19 the State has failed to comply with subpara20 graph (A)(iii) of this paragraph with respect to

21 amounts withheld from wages pursuant to the

22 order and paid to the State, to bring an action

23 against the employer or the State, as the case

24 may be, in any State court and recover dam25 ages, including interest; and
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1 ‘‘(C) the State agency referred to in sec2 tion 402(a)(3) shall notify the State child sup3 port enforcement agency of the commencement

4 or termination of aid under the State plan ap5 proved under part A to any individual or fam6 ily, within 10 days after such commencement or

7 termination.’’.

8 (b) DIRECT WAGE WITHHOLDING.—Section 466(b)

9 of such Act (42 U.S.C. 666(b)) is amended by adding at

10 the end the following:

11 ‘‘(11)(A)(i) Upon the issuance or modification

12 by a State court or administrative agency of an

13 order imposing a child support obligation on an indi14 vidual, the State shall transmit to any employer of

15 the individual a wage withholding order developed

16 under section 452(a)(11) directing the employer to

17 withhold amounts from the wages of the individual

18 pursuant to the order, or such greater amount as

19 the State child support order registry established

20 pursuant to subsection (a)(12)(A) may determine is

21 the total amount of the child support obligations of

22 the individual.

23 ‘‘(ii) Clause (i) shall not apply to an order upon

24 agreement of the parties to the order and the court
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1 or administrative agency that issued or modified the

2 order.

3 ‘‘(iii) An agreement referred to in clause (ii)

4 may be unilaterally rescinded only by the individual

5 to whom child support is payable under the order.

6 ‘‘(B) Any individual or entity engaged in com7 merce, as a condition of doing business in the State,

8 shall, on receipt of a wage withholding order devel9 oped under section 452(a)(11) that is regular on its

10 face and has been issued by a court of any State—

11 ‘‘(i) immediately provide a copy of the

12 order to the employee subject to the order;

13 ‘‘(ii) comply with the order by forwarding

14 to the State registry established pursuant to

15 subsection (a)(12)(A) of this section, within 5

16 days after the end of each payroll period ending

17 after receipt of the order, the greater of—

18 ‘‘(I) the amount required to be with19 held pursuant to the order; or

20 ‘‘(II) the amount that the State reg21 istry has notified the employer is the

22 amount required to be withheld from the

23 wages of the employee for payment of child

24 support obligations of the employee; and
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1 ‘‘(iii) keep records of the amounts so with2 held.

3 ‘‘(C) Such an order may be served on the in4 come source directly or by first-class mail.

5 ‘‘(D) An individual or entity who complies with

6 subparagraph (B)(ii) with respect to such an order

7 may not be held liable for wrongful withholding of

8 income from the employee subject to the order.

9 ‘‘(E) The State shall impose a civil fine of

10 $1,000 on any individual or entity who receives such

11 an order for each failure to comply with subpara12 graph (B)(ii) with respect to the order.

13 ‘‘(F) The State shall have in effect procedures

14 for carrying out this paragraph in cases involving an

15 employee who has 2 or more employers or child sup16 port obligations.

17 ‘‘(12) If the State transmits to an individual or

18 entity engaged in commerce only outside the State

19 a wage withholding order issued by the State with

20 respect to an employee of the individual or entity,

21 and the individual or entity contests or refuses to

22 comply with the order, the State shall send an infor23 mational copy of the order to the registry established

24 under subsection (a)(12)(A) of any other State in
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1 which the individual or entity is engaged in

2 commerce.

3 ‘‘(13) If an employee requests a hearing to con4 test wage withholding based on claim of a mistake

5 of fact, the hearing may be held in the State from

6 which the income is paid or in which the employee

7 is employed, and, within 45 days after the income

8 source receives the withholding order, the entity con9 ducting the hearing must adjudicate the claim. The

10 State in which the hearing is held shall provide ap11 propriate services in cases enforced under the State

12 plan to ensure that the interests of the individual to

13 whom the withheld income is to be paid are ade14 quately represented.’’.

15 (c) PRIORITIES IN APPLICATION OF WITHHELD

16 WAGES.—Section 466(b) of such Act (42 U.S.C. 666(b)),

17 as amended by subsection (b) of this section, is amended

18 by inserting after paragraph (13) the following:

19 ‘‘(14) Procedures under which the amounts

20 withheld pursuant to a child support or wage with21 holding order are to be applied in the following

22 order:

23 ‘‘(A) To payments of support due during

24 the month of withholding.
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1 ‘‘(B) To payments of premiums for health

2 care insurance coverage for dependent children.

3 ‘‘(C) To payments of support due before

4 the month of withholding, and of unreimbursed

5 health-care expenses.’’.

6 (d) ACCESS TO VARIOUS DATA BASES.—Section

7 466(a) of such Act (42 U.S.C. 666(a)), as amended by

8 subsection (a) of this section, is amended by inserting

9 after paragraph (12) the following:

10 ‘‘(13) Procedures under which the State child

11 support enforcement agency shall have automated

12 on-line or batch access (or, if necessary,

13 nonautomated access) to information regarding resi14 dential addresses, employers and employer address15 es, income and assets, and medical insurance bene16 fits with respect to absent parents that is available

17 through any data base maintained by—

18 ‘‘(A) any agency of the State or any politi19 cal subdivision thereof, that contains informa20 tion on residential addresses, or on employers

21 and employer addresses, as the State deems ap22 propriate;

23 ‘‘(B) any publicly regulated utility com24 pany located in the State; and
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1 ‘‘(C) any credit reporting agency located in

2 the State.’’.

3 (e) EXPANDED INTERACTION WITH THE NATIONAL

4 PARENT LOCATOR NETWORK.—Section 454(16) of such

5 Act (42 U.S.C. 654(16)) is amended—

6 (1) by striking ‘‘and (E)’’ and inserting ‘‘(E)’’;

7 and

8 (2) by striking ‘‘enforcement;’’ and inserting

9 ‘‘enforcement, and (F) to provide access to the na10 tional network developed pursuant to section

11 453(g);’’.

12 (f) PRIVATE ACCESS TO LOCATE AND ENFORCE13 MENT SERVICES.—Section 466(a) of such Act (42 U.S.C.

14 666(a)), as amended by subsections (a) and (d) of this

15 section, is amended by inserting after paragraph (13) the

16 following:

17 ‘‘(14)(A) Procedures under which private attor18 neys and pro se obligees must be given access to

19 State locate resources and through enforcement

20 techniques of the State child support enforcement

21 agency, for the purpose of establishing, modifying,

22 and enforcing child support and parentage orders, in

23 accordance with safeguards established—
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1 ‘‘(i) to provide the custodial parent ad2 vance notice of any release of information with

3 respect to a noncustodial parent; and

4 ‘‘(ii) to prevent release of information with

5 respect to a noncustodial parent if the release

6 may jeopardize the safety of the noncustodial

7 parent, the custodial parent, or any child of ei8 ther parent; and

9 ‘‘(B) The procedures described in subparagraph

10 (A) must require the State—

11 ‘‘(i) to develop and publish guidelines im12 plementing the safeguards described in sub13 paragraph (A); and

14 ‘‘(ii) if the State provides for reasonable

15 fees for the access referred to in subparagraph

16 (A), to establish such fees in accordance with

17 guidelines developed and published by the State

18 that set schedules for such fees.’’.

19 SEC. 407. CONSUMER CREDIT PROTECTION ACT AMEND20 MENTS.

21 (a) PRIORITY OF DEBTS.—Title III of the Consumer

22 Credit Protection Act (15 U.S.C. 1671 et seq.) is amended

23 by adding at the end the following:
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1 ‘‘§ 308. Priority of debts

2 ‘‘If an individual’s disposable earnings are not suffi3 cient to pay—

4 ‘‘(1) a garnishment intended to satisfy a Fed5 eral debt; and

6 ‘‘(2) a garnishment intended to satisfy a debt

7 related to the support of any child,

8 the Federal debt shall be satisfied through garnishment

9 only after the debt related to support of a child has been

10 satisfied.’’.

11 (b) ADDITIONAL INDEBTEDNESS IN ANTI-DIS12 CHARGE SECTION.—Section 304 of such Act (15 U.S.C.

13 1674) is amended—

14 (1) by redesignating subsection (b) as sub15 section (c);

16 (2) in subsection (c) (as so redesignated) by

17 striking ‘‘subsection (a) of’’; and

18 (3) by inserting after subsection (a) the follow19 ing:

20 ‘‘(b) No employer may discharge any employee by

21 reason of the fact that the earnings of the employee have

22 been subjected to more than one indebtedness, if all but

23 one of the indebtedness arise from one or more orders for

24 the support of a child.’’.
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1 (c) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of title III of the Consumer Credit Pro3 tection Act is amended by adding at the end the following:

‘‘308. Priority of debts.’’.

4 SEC. 408. STATES REQUIRED TO ENACT THE UNIFORM

5 INTERSTATE FAMILY SUPPORT ACT.

6 (a) IN GENERAL.—Section 466 of the Social Security

7 Act (42 U.S.C. 666) is amended by adding at the end the

8 following:

9 ‘‘(f) In order to satisfy section 454(20)(A), each

10 State must have in effect laws which adopt the officially

11 approved version of the Uniform Interstate Family Sup12 port Act adopted by the National Conference of Commis13 sioners on Uniform State Laws in August 1992.’’.

14 (b) EFFECTIVE DATE.—The amendment made by

15 subsection (a) shall apply to payments under part D of

16 title IV of the Social Security Act for calendar quarters

17 ending 2 or more years after the date of the enactment

18 of this Act.

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