I

103D CONGRESS

1ST SESSION H. R. 1007

To amend title IV of the Social Security Act to eliminate disincentives

in the program of aid to families with dependent children that prevent

recipients of such aid from working toward self-sufficiency.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 18, 1993

Mr. SHAYS (for himself and Mr. MFUME) introduced the following bill; which

was referred jointly to the Committees on Ways and Means, and Energy

and Commerce

A BILL

To amend title IV of the Social Security Act to eliminate

disincentives in the program of aid to families with dependent children that prevent recipients of such aid from

working toward self-sufficiency.

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

3 SECTION. 1. WORK INCENTIVES.

4 (a) MEDICAID BENEFITS CONTINUED FOR 36

5 MONTHS FOR FAMILIES BECOMING INELIGIBLE FOR

6 AFDC DUE TO EXCESSIVE INCOME.—Section 402(a) of

7 the Social Security Act (42 U.S.C. 602(a)) is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (44);

3 (2) by striking the period at the end of para4 graph (45) and inserting ‘‘; and’’; and

5 (3) by inserting after paragraph (45) the fol6 lowing:

7 ‘‘(46) if a family becomes ineligible for aid

8 under the State plan under this part due to exces9 sive income, the family shall remain eligible for med10 ical assistance under the State plan under title XIX

11 for the 36-month period beginning with most recent

12 month in which the family becomes so ineligible.’’.

13 (b) INCREASE IN RESOURCE LIMIT.—Section

14 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)) is

15 amended by striking ‘‘$1,000 or such lower amount as the

16 State may determine’’ and inserting ‘‘$10,000’’.

17 (c) ENCOURAGEMENT OF MICROENTERPRISES.—

18 (1) STATE PLAN REQUIREMENT.—Section

19 402(a) of the Social Security Act (42 U.S.C.

20 602(a)), as amended by subsection (a) of this sec21 tion, is amended—

22 (A) by striking ‘‘and’’ at the end of para23 graph (45);

24 (B) by striking the period at the end of

25 paragraph (46) and inserting ‘‘; and’’; and
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1 (C) by inserting after paragraph (46) the

2 following:

3 ‘‘(47) must ensure that caseworkers are able to

4 properly advise recipients of aid under the State

5 plan of the option of microenterprise as a legitimate

6 route towards self-sufficiency, and that caseworkers

7 encourage recipients of such aid who are interested

8 in starting a microenterprise to participate in a pro9 gram designed to assist them in such effort.’’.

10 (2) DEFINITIONS.—Section 406 of such Act (42

11 U.S.C. 606) is amended by adding at the end the

12 following:

13 ‘‘(i)(1) The term ‘microenterprise’ means a commer14 cial enterprise which has 5 or fewer employees, 1 or more

15 of whom owns the enterprise.

16 ‘‘(2) The term ‘net profits’ means, with respect to

17 a microenterprise, the gross receipts of the business,

18 minus—

19 ‘‘(A) amounts paid as principal or interest on

20 a loan to the microenterprise;

21 ‘‘(B) transportation expenses;

22 ‘‘(C) inventory costs;

23 ‘‘(D) amounts expended to purchase capital

24 equipment;
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1 ‘‘(E) cash retained by the microenterprise for

2 future use by the business;

3 ‘‘(F) taxes paid by reason of the business;

4 ‘‘(G) if the business is covered under a policy

5 of insurance against loss—

6 ‘‘(i) the premiums paid for such insurance;

7 and

8 ‘‘(ii) the losses incurred by the business

9 that are not reimbursed by the insurer solely by

10 reason of the existence of a deductible with re11 spect to the insurance policy;

12 ‘‘(H) the reasonable costs of obtaining 1 motor

13 vehicle necessary for the conduct of the business;

14 and

15 ‘‘(I) the other expenses of the business.’’.

16 (3) INCLUSION OF MICROENTERPRISE TRAINING

17 AND ACTIVITIES IN THE JOBS PROGRAM.—

18 (A) IN GENERAL.—Section 482(d)(1) of

19 such Act (42 U.S.C. 682(d)(1)) is amended

20 adding at the end the following:

21 ‘‘(C) The services and activities referred to in sub22 paragraph (A)—

23 ‘‘(i) in the case that at least 3 percent of the

24 adult recipients of aid under the State plan approved

25 under part A (as of the close of the immediately pre-
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1 ceding fiscal year) elect to participate in

2 microenterprise activities, shall include programs de3 scribed in paragraph (4); or

4 ‘‘(ii) in the case that not more than 3 percent

5 of the adult recipients of such aid elect to partici6 pate in microenterprise activities, may include pro7 grams described in paragraph (4).’’.

8 (B) MICROENTERPRISE PROGRAMS.—Sec9 tion 482(d) of such Act (42 U.S.C. 682(d)) is

10 amended by adding at the end the following:

11 ‘‘(4) The programs described in this paragraph are

12 programs of public and private organizations, agencies,

13 and other entities (including nonprofit and for-profit enti14 ties) to enable such entities to facilitate economic develop15 ment by—

16 ‘‘(A) providing technical assistance, advice, and

17 business support services (including assistance, ad18 vice, and support relating to business planning, fi19 nancing, marketing, and other microenterprise devel20 opment activities) to owners of microenterprises and

21 persons developing microenterprises; and

22 ‘‘(B) providing general support (such as peer

23 support and self-esteem programs) to owners of

24 microenterprises and persons developing

25 microenterprises.’’.
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1 (4) ADJUSTMENT OF PERFORMANCE STAND2 ARDS FOR MICROENTERPRISES TO TAKE ACCOUNT

3 OF TIME REQUIRED FOR THEIR ESTABLISHMENT.—

4 Section 487(a)(2) of such Act (42 U.S.C. 687(a)(2))

5 is amended by inserting ‘‘shall be adjusted with re6 spect to microenterprises to reflect the time required

7 to establish, and develop a stable income from, such

8 an enterprise as part of a plan to move toward eco9 nomic self-sufficiency,’’ after ‘‘dependency,’’.

10 (5) STUDY TO IDENTIFY ADMINISTRATIVE BAR11 RIERS TO DEVELOPMENT OF MICROENTERPRISES

12 AMONG INTERESTED AFDC RECIPIENTS.—The Sec13 retary of Health and Human Services shall conduct

14 a study to identify the administrative and bureau15 cratic barriers that impede the development of

16 microenterprises by recipients of aid to families with

17 dependent children under the State plans approved

18 under part A of title IV of the Social Security Act

19 who desire to move toward self-sufficiency, and, not

20 later than 1 year after the date of the enactment of

21 this section, shall report the results of the study to

22 the Committee on Ways and Means of the House of

23 Representatives and the Committee on Finance of

24 the Senate.

25 (d) EARNED INCOME DISREGARD.—
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1 (1) IN GENERAL.—Section 402(a)(8) of such

2 Act (42 U.S.C. 602(a)(8)) is amended—

3 (A) in subparagraph (A)(iv)—

4 (i) by inserting ‘‘for each of the first

5 36 months beginning on or after the effec6 tive date of this clause for which such aid

7 is so received,’’ after ‘‘determination,’’; and

8 (ii) by striking all that follows ‘‘plus’’

9 and inserting ‘‘(II) for the first 12 months

10 of such 36-month period, 60 percent of the

11 remainder thereof, for the second 12

12 months of such 36-month period, 50 per13 cent of the remainder thereof, and for the

14 third 12 months of such 36-month period,

15 40 percent of the remainder thereof;’’; and

16 (B) in subparagraph (B), by striking

17 clause (ii).

18 (2) CONFORMING AMENDMENTS.—

19 (A) Section 402(a)(37) of such Act (42

20 U.S.C. 602(a)(37)) is amended by striking

21 ‘‘paragraph (8)(B)(ii)(II)’’ and inserting ‘‘the

22 inapplicability of paragraph (8)(A)(iv)’’.

23 (B) Section 402(g)(1)(A)(ii) of such Act

24 (42 U.S.C. 602(g)(1)(a)(II)) is amended by

25 striking ‘‘subsection (a)(8)(B)(ii)(II)’’ and in-
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1 serting ‘‘the inapplicability of subsection

2 (a)(8)(A)(iv)’’.

3 (C) Section 482(e)(2)(G)(ii) of such Act

4 (42 U.S.C. 682(e)(2)(G)(ii)) is amended by

5 striking ‘‘the provisions of subparagraph

6 (A)(iv)’’ and all that follows and inserting ‘‘sec7 tion 402(a)(8)(A)(iv) without regard to the time

8 limitation of such section’’.

9 (D) Section 1925(a)(1) of such Act (42

10 U.S.C. 1396r–6(a)(1)) is amended by striking

11 ‘‘section 402(a)(8)(B)(ii)(II)’’ and inserting

12 ‘‘the inapplicability of section

13 402(a)(8)(A)(iv)’’.

14 SEC. 2. EDUCATION.

15 (a) AFDC SUSPENDED FOR SO LONG AS DEPEND16 ENT CHILD IS NOT REGULARLY ATTENDING REQUIRED

17 SCHOOL.—Section 402(a) of the Social Security Act (42

18 U.S.C. 602(a)) is amended by inserting after paragraph

19 (28) the following:

20 ‘‘(29) provide that payments of aid that would

21 otherwise be payable under the plan to the family in

22 respect of a child required by State law to attend

23 school shall be suspended for so long as the child is

24 not enrolled in, and in regular attendance at, a

25 school;’’.
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1 (b) AFDC REDUCED FOR HIGH SCHOOL DROP2 OUTS.—Section 402(a) of such Act (42 U.S.C. 602(a)) is

3 amended by inserting after paragraph (34) the following:

4 ‘‘(35) provide that the amount of aid that

5 would otherwise be payable under the plan to a fam6 ily in which the relative claiming such aid has not

7 completed high school or been awarded a certificate

8 of high school equivalency, shall be reduced by $50

9 for so long as the relative is not enrolled in, and in

10 regular attendance at, a school;’’.

11 (c) CHILD CARE GUARANTEED TO PARENTS WHILE

12 COMPLETING HIGH SCHOOL OR THE EQUIVALENT.—Sec13 tion 402(g)(1)(A)(i) of such Act (42 U.S.C.

14 602(g)(1)(A)(i)) is amended—

15 (1) by striking ‘‘and’’ at the end of subclause

16 (I);

17 (2) by striking the period at the end of

18 subclause (II) and inserting ‘‘; and’’; and

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

20 ‘‘(III) for each recipient of aid under the State

21 plan under this part who has not completed high

22 school or been awarded a certificate of high school

23 equivalency, and who has a dependent child requir24 ing such care, but only for such months or parts
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1 thereof during which the recipient is enrolled in, and

2 in regular attendance at, a school.’’.

3 SEC. 3. FAMILY UNITY AND PATERNAL RESPONSIBILITY.

4 (a) AUTHORITY TO COLLECT OVERDUE CHILD SUP5 PORT THROUGH LEVY BY INTERNAL REVENUE SERVICE

6 ON WAGES.—

7 (1) IN GENERAL.—Subchapter D of chapter 64

8 of the Internal Revenue Code of 1986 (relating to

9 seizure of property for collection of taxes) is amend10 ed by redesignating section 6344 as section 6345

11 and by inserting after section 6343 the following

12 new section:

13 ‘‘SEC. 6344. COLLECTION OF OVERDUE CHILD SUPPORT

14 THROUGH LEVY ON WAGES.

15 ‘‘(a) IN GENERAL.—If the Secretary is notified by

16 a State under section 464 of the Social Security Act that

17 any person owes overdue support (as defined in section

18 466(e) of such Act) the payment of which is at least 2

19 months delinquent—

20 ‘‘(1) the amount of such overdue support shall

21 be treated as unpaid tax for purposes of permitting

22 the Secretary (subject to section 6334(a)(9)) to levy

23 upon the wages and salary payable to or received by

24 such person to collect such amount, and
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1 ‘‘(2) the collection of such amount shall be

2 treated as in jeopardy.

3 ‘‘(b) REMITTANCE TO STATE.—The Secretary shall

4 remit any amount collected under subsection (a) to the

5 State collecting such support.

6 ‘‘(c) LIMITATION ON REVIEW.—No court of the

7 United States shall have jurisdiction to hear any action,

8 whether legal or equitable, brought to restrain or review

9 a levy (and any collection thereunder) authorized by sub10 section (a). No such levy (or collection) shall be subject

11 to review by the Secretary in an administrative proceeding.

12 No action brought against the United States to recover

13 the amount of any such collection shall be considered to

14 be a suit for refund of tax. This subsection does not pre15 clude any legal, equitable, or administrative action against

16 the Department of Health and Human Services.’’

17 (2) CLERICAL AMENDMENT.—The table of sec18 tions for such subchapter D is amended by striking

19 the last item and inserting the following new items:

‘‘Sec. 6344. Collection of overdue child support through levy on

wages.

‘‘Sec. 6345. Cross references.’’

20 (3) EFFECTIVE DATE.—The amendments made

21 by this subsection shall take effect on the date of the

22 enactment of this Act.

23 (b) AFDC AVAILABLE FOR CERTAIN FAMILIES

24 THAT INCLUDE MARRIED COUPLES.—Part A of title IV
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1 of the Social Security Act (42 U.S.C. 601–617) is amend2 ed by inserting after section 410 the following:

3 ‘‘SEC. 411. BENEFITS AVAILABLE FOR NEEDY FAMILIES

4 WITH DEPENDENT CHILDREN WHOSE PAR5 ENTS ARE IN SCHOOL OR IN THE JOBS PRO6 GRAM.

7 ‘‘(a) Notwithstanding section 406(a), the term ‘de8 pendent child’ includes a needy child—

9 ‘‘(1) who meets the requirements of section

10 406(a)(2);

11 ‘‘(2) who is living with both parents of the child

12 in a place of residence maintained as their home;

13 and

14 ‘‘(3) both of whose parents are—

15 ‘‘(A) enrolled in, and in regular attendance

16 at, a school; or

17 ‘‘(B) participating in the program of the

18 State under section 402(a)(19) and part F.

19 ‘‘(b) Notwithstanding section 402(a)(7)(A), in deter20 mining need with respect to a child who meets the require21 ments of subsection (a) of this section, the income of the

22 parent whose income is less than the income of the other

23 parent shall be disregarded.’’.
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1 SEC. 4. EFFECTIVE DATE.

2 The amendments made by this Act shall take effect

3 at the end of the calendar month in which this Act is en4 acted, and shall apply to payments under part A of title

5 IV of the Social Security Act for calendar quarters ending

6 with or after such calendar month.

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