II

103D CONGRESS

2D SESSION S. 1932

To establish demonstration projects to expand innovations in State administration of the aid to families with dependent children program under

title IV of the Social Security Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 15 (legislative day, FEBRUARY 22), 1994

Mr. LIEBERMAN introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

To establish demonstration projects to expand innovations

in State administration of the aid to families with dependent children program under title IV of the Social

Security Act, 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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Welfare Reform Through State Innovation Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Purpose.

Sec. 3. Definitions.
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Sec. 4. General provisions relating to demonstration projects.

Sec. 5. Authorization of appropriations.

TITLE I—INITIATIVES TO MOVE WELFARE RECIPIENTS INTO

THE WORK FORCE

Sec. 101. Demonstration projects which condition AFDC benefits for certain individuals on school attendance or job training, limit the time

period for receipt of such benefits, and require teenage parents

to live at home.

Sec. 102. Pilot Job Corps program for recipients of aid to families with dependent children.

Sec. 103. Demonstration projects requiring up-front 30-day assisted job search,

or substance abuse treatment before receiving AFDC benefits.

Sec. 104. Disregard of education and employment training savings for AFDC

eligibility.

Sec. 105. Incentives and assistance in starting a small business.

Sec. 106. Increased emphasis in JOBS program on moving people into the

work force.

Sec. 107. Additional demonstration projects to move AFDC recipients into the

work force.

TITLE II—INITIATIVES TO STRENGTHEN FAMILIES AND BREAK

THE CYCLE OF WELFARE DEPENDENCY

Sec. 201. Demonstration projects to establish child centered programs through

conversion of certain AFDC and JOBS payments into block

grants.

Sec. 202. Demonstration projects providing no additional benefits with respect

to children born while a family is receiving AFDC and allowing

increases in the earned income disregard.

Sec. 203. Demonstration projects providing incentives to marry.

Sec. 204. Demonstration projects reducing AFDC benefits if school attendance

is irregular or preventive health care for dependent children is

not obtained.

Sec. 205. Demonstration projects to increase child support collection.

Sec. 206. Demonstration projects to develop community-based programs for

teenage pregnancy prevention and family planning.

Sec. 207. Additional demonstration projects to strengthen families and break

the cycle of welfare dependency.

TITLE III—INITIATIVES TO DIVERSIFY AND IMPROVE THE

PERFORMANCE OF WELFARE SERVICES

Sec. 301. Demonstration projects for providing placement of AFDC recipients

in private sector jobs.

Sec. 302. Demonstration projects providing performance-based incentives for

State public welfare providers.

TITLE IV—OFFSETTING EXPENDITURE REDUCTIONS

Sec. 401. Offsetting expenditure reductions.
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1 SEC. 2. PURPOSE.

2 It is the purpose of this Act to implement the dem3 onstration projects established under this Act as part of

4 a comprehensive national program which would—

5 (1) terminate aid to families with dependent

6 children after 2 years; and

7 (2) make employment available to such families

8 where necessary.

9 SEC. 3. DEFINITIONS.

10 For purposes of this Act:

11 (1) AID TO FAMILIES WITH DEPENDENT CHIL12 DREN.—The term ‘‘aid to families with dependent

13 children’’ has the meaning given to such term by

14 section 406(b) of the Social Security Act (42 U.S.C.

15 606(b)).

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

17 the Secretary of Health and Human Services.

18 SEC. 4. GENERAL PROVISIONS RELATING TO DEMONSTRA19 TION PROJECTS.

20 (a) APPLICATIONS.—

21 (1) IN GENERAL.—Each State desiring to con22 duct a demonstration project under this Act shall

23 prepare and submit to the Secretary an application

24 in such manner and containing such information as

25 the Secretary may require. The Secretary shall ac26 tively encourage States to submit such applications.
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1 (2) APPROVAL.—The Secretary shall consider

2 all applications received from States desiring to con3 duct demonstration projects under this Act and shall

4 approve such applications in a number of States to

5 be determined by the Secretary, taking into account

6 the overall funding levels available under section 5.

7 (b) DURATION.—A demonstration project under this

8 Act shall be conducted for not more than 3 years plus

9 an additional time period of up to 12 months for final

10 evaluation and reporting. The Secretary may terminate a

11 project if the Secretary determines that the State conduct12 ing the project is not in substantial compliance with the

13 terms of the application approved by the Secretary under

14 this Act.

15 (c) EVALUATION PLAN.—

16 (1) IN GENERAL.—Each State conducting a

17 demonstration project under this Act shall submit an

18 evaluation plan (meeting the standards developed by

19 the Secretary under paragraph (2)) to the Secretary

20 not later than 90 days after the State is notified of

21 the Secretary’s approval for such project. A State

22 shall not receive any Federal funds for the operation

23 of the demonstration project or be granted any waiv24 ers of the Social Security Act necessary for oper-
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1 ation of the demonstration project until the Sec2 retary approves such evaluation plan.

3 (2) STANDARDS.—Not later than 3 months

4 after the date of the enactment of this Act, the Sec5 retary shall develop standards for the evaluation

6 plan required under paragraph (1) which shall in7 clude the requirement that an independent expert

8 entity provide an evaluation of each demonstration

9 project to be included in the State’s annual and final

10 reports to the Secretary under subsection (d)(1).

11 (d) REPORTS.—

12 (1) STATE.—A State that conducts a dem13 onstration project under this Act shall prepare and

14 submit to the Secretary annual and final reports in

15 accordance with the State’s evaluation plan under

16 subsection (c)(1) for such demonstration project.

17 (2) SECRETARY.—The Secretary shall prepare

18 and submit to Congress annual reports concerning

19 each demonstration project under this Act.

20 (e) LEGISLATIVE PROPOSAL.—Within 6 months after

21 the date that the Secretary has received the last final re22 port due under subsection (d)(1), the Secretary shall sub23 mit proposed legislation to Congress which would nation24 ally implement (taking into account factors important in

25 determining implementation of a demonstration project on
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1 a national scale, including population density and poverty)

2 those demonstration projects—

3 (1) which are established under this Act; and

4 (2) for which the Secretary has made a deter5 mination of effectiveness in breaking the cycle of

6 welfare dependency, unemployment, and poverty

7 after evaluation of the final report for such project.

8 (f) PROVISIONS SUBJECT TO WAIVER.—The Sec9 retary may waive such requirements of title IV of the So10 cial Security Act (42 U.S.C. 601 et seq.) as the Secretary

11 determines to be necessary to carry out the purposes of

12 the demonstration projects established under this Act.

13 (g) EXPENDITURES OTHERWISE INCLUDED UNDER

14 THE STATE PLAN.—The costs of a demonstration project

15 under this Act which would not otherwise be included as

16 expenditures under the applicable State plan under title

17 IV of the Social Security Act (42 U.S.C. 601 et seq.) shall

18 to the extent and for the period prescribed by the Sec19 retary, be regarded as expenditures under the applicable

20 State plan under such title, or for administration of such

21 State plan or plans, as may be appropriate.

22 SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

23 (a) IN GENERAL.—There is authorized to be appro24 priated $150,000,000 for each of fiscal years 1995 and

25 1996, and $200,000,000 for fiscal year 1997 to carry out
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1 the provisions of sections 101, 103, 105(b), 105(c),

2 105(d), 107, 201, 202, 203, 204, 205, 206, 207, 301, and

3 302.

4 (b) ALLOCATION OF FUNDS.—Of the amount appro5 priated pursuant to subsection (a), the Secretary shall ob6 ligate—

7 (1) 75 percent of such amount to—

8 (A) offset any increase in the amount of

9 the Federal share resulting from any dem10 onstration project established under a section

11 described in subsection (a) (other than dem12 onstration projects established under sections

13 107 and 207 of this Act); and

14 (B) to the extent such amount remains

15 after any such offset—

16 (i) increase the otherwise applicable

17 Federal share rate under a State plan

18 under title IV of the Social Security Act

19 (42 U.S.C. 601 et seq.) for such dem20 onstration projects; and

21 (ii) increase the amount of a State’s

22 block grant under the demonstration

23 project under section 201 of this Act; and

24 (2) 25 percent of such amount to—
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1 (A) offset any increase in the amount of

2 the Federal share resulting from any dem3 onstration project established under sections

4 107 and 207 of this Act; and

5 (B) to the extent such amount remains

6 after any such offset increase the otherwise ap7 plicable Federal share rate under a State plan

8 under title IV of the Social Security Act (42

9 U.S.C. 601 et seq.) for such demonstration

10 projects.

11 (c) RESERVATION OF CERTAIN AMOUNTS UNTIL

12 FINAL REPORT SUBMITTED.—The Secretary shall reserve

13 10 percent of any amounts obligated to a State for a dem14 onstration project under subsection (b), and shall not pay

15 such reserved amounts until such State has submitted a

16 final report on such demonstration project.
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1 TITLE I—INITIATIVES TO MOVE

2 WELFARE RECIPIENTS INTO

3 THE WORK FORCE

4 SEC. 101. DEMONSTRATION PROJECTS WHICH CONDITION

5 AFDC BENEFITS FOR CERTAIN INDIVIDUALS

6 ON SCHOOL ATTENDANCE OR JOB TRAINING,

7 LIMIT THE TIME PERIOD FOR RECEIPT OF

8 SUCH BENEFITS, AND REQUIRE TEENAGE

9 PARENTS TO LIVE AT HOME.

10 (a) ESTABLISHMENT.—The Secretary shall provide

11 for demonstration projects described in subsection (b) in

12 States with applications approved under this Act.

13 (b) PROJECT DESCRIBED.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), each State conducting a demonstration

16 project under this section shall provide that—

17 (A) a family described in paragraph (3)

18 shall not receive aid to families with dependent

19 children—

20 (i) unless the individual described in

21 paragraph (3)(A) is, for a minimum of 35

22 hours a week—

23 (I) attending school,

24 (II) studying for a general

25 equivalency diploma, or
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1 (III) participating in a job, job

2 training, or job placement program;

3 and

4 (ii) except in the case of a situation

5 described in clause (i) through (v) of sec6 tion 402(a)(43)(B) of the Social Security

7 Act (42 U.S.C. 602(a)(43)(B))—

8 (I) such individual is residing in

9 a place of residence maintained by a

10 parent, legal guardian, or other adult

11 relative of such individual as such

12 parent’s, guardian’s, or adult rel13 ative’s own home, or residing in a fos14 ter home, maternity home, or other

15 adult-supervised supportive living ar16 rangement, and

17 (II) such aid (where possible)

18 shall be provided to the individual’s

19 parent, legal guardian, or other adult

20 relative on behalf of such individual

21 and the individual’s dependent child;

22 and

23 (B) such family shall be entitled to receive

24 such aid for a time period determined appro25 priate by the State which shall, at a minimum,
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1 permit such individual to complete the activities

2 described in subparagraph (A)(i).

3 (2) LIMITATION.—A State conducting a dem4 onstration project under this section shall not apply

5 the provisions of paragraph (1) to a family unless—

6 (A) the State has made adequate child

7 care available to such family;

8 (B) the State has paid all tuition and fees

9 applicable to the activities described in para10 graph (1)(A); and

11 (C) such application does not endanger the

12 welfare and safety of a dependent child who is

13 a member of such family.

14 (3) FAMILY DESCRIBED.—A family described in

15 this paragraph is a family which—

16 (A) includes a parent under 20 years of

17 age;

18 (B) includes at least 1 dependent child of

19 such parent; and

20 (C) does not include a child under 6

21 months of age.
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1 SEC. 102. PILOT JOB CORPS PROGRAM FOR RECIPIENTS OF

2 AID TO FAMILIES WITH DEPENDENT CHIL3 DREN.

4 Section 433 of the Job Training Partnership Act (29

5 U.S.C. 1703) is amended by adding at the end the follow6 ing new subsection:

7 ‘‘(f)(1) The Secretary may enter into appropriate

8 agreements with agencies as described in section

9 427(a)(1) for the development of pilot projects to provide

10 services at Job Corps centers to eligible individuals—

11 ‘‘(A) who are eligible youth described in section

12 423;

13 ‘‘(B) whose families receive aid to families with

14 dependent children under part A of title IV of the

15 Social Security Act (42 U.S.C. 601 et seq.); and

16 ‘‘(C) who are mothers of children who have not

17 reached the age of compulsory school attendance in

18 the State in which the children reside.

19 ‘‘(2) A Job Corps center serving the eligible individ20 uals shall—

21 ‘‘(A) provide child care at or near the Job

22 Corps center for the individuals;

23 ‘‘(B) provide the activities described in section

24 428 for the individuals; and
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1 ‘‘(C) provide for the individuals, and require

2 that each such individual participate in, activities

3 through a parents as teachers program that—

4 ‘‘(i) establishes and operates parent edu5 cation programs, including programs of devel6 opmental screening of the children of the eligi7 ble individuals;

8 ‘‘(ii) provides group meetings and home

9 visits for the family of each such individual by

10 parent educators who have had supervised expe11 rience in the care and education of children and

12 have had training; and

13 ‘‘(iii) provides periodic screening, by such

14 parent educators, of the educational, hearing,

15 and visual development of the children of such

16 individuals.

17 ‘‘(3) The Secretary shall prescribe specific standards

18 and procedures under section 424 for the screening and

19 selection of applicants to participate in pilot projects car20 ried out under this subsection. In addition to the agencies

21 described in the second sentence of such section, such

22 standards and procedures may be implemented through

23 arrangements with welfare agencies.

24 ‘‘(4) As used in this subsection:
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1 ‘‘(A) The term ‘developmental screening’ means

2 the process of measuring the progress of children to

3 determine if there are problems or potential prob4 lems or advanced abilities in the areas of under5 standing and use of language, perception through

6 sight, perception through hearing, motor develop7 ment and hand-eye coordination, health, and phys8 ical development.

9 ‘‘(B) The term ‘parent education’ includes par10 ent support activities, the provision of resource ma11 terials on child development and parent-child learn12 ing activities, private and group educational guid13 ance, individual and group learning experiences for

14 the eligible individual and child, and other activities

15 that enable the eligible individual to improve learn16 ing in the home.’’.

17 SEC. 103. DEMONSTRATION PROJECTS REQUIRING UP18 FRONT 30-DAY ASSISTED JOB SEARCH, OR

19 SUBSTANCE ABUSE TREATMENT BEFORE RE20 CEIVING AFDC BENEFITS.

21 (a) ESTABLISHMENT.—The Secretary shall provide

22 for demonstration projects described in subsection (b) in

23 States with applications approved under this Act.

24 (b) PROJECT DESCRIBED.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), each State conducting a demonstration

3 project under this section shall require a parent or

4 other relative of a dependent child to undergo 30

5 days of assisted job search or substance abuse treat6 ment (or both) before the family may receive aid to

7 families with dependent children as part of the ap8 plication process for the receipt of such aid.

9 (2) LIMITATION.—A State conducting a dem10 onstration project under this section shall not apply

11 the provisions of paragraph (1) to a family unless—

12 (A) all of the dependent children in the

13 family are over 6 months of age;

14 (B) the State has made adequate child

15 care available to such family;

16 (C) the State has paid all fees applicable

17 to the activities described in paragraph (1); and

18 (D) such application does not endanger the

19 welfare and safety of a dependent child who is

20 a member of such family.

21 SEC. 104. DISREGARD OF EDUCATION AND EMPLOYMENT

22 TRAINING SAVINGS FOR AFDC ELIGIBILITY.

23 (a) DISREGARD AS RESOURCE.—Subparagraph (B)

24 of section 402(a)(7) of the Social Security Act (42 U.S.C.

25 602(a)(7)) is amended—
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1 (1) by striking ‘‘or’’ before ‘‘(iv)’’, and

2 (2) by inserting ‘‘, or (v) except in the case of

3 the family’s initial determination of eligibility for aid

4 to families with dependent children, any amount up

5 to $10,000 in a qualified education and employment

6 account (as defined in section 406(i)(1))’’ before ‘‘;

7 and’’.

8 (b) DISREGARD AS INCOME.—

9 (1) IN GENERAL.—Subparagraph (A) of section

10 402(a)(8) of such Act (42 U.S.C. 602(a)(8)) is

11 amended—

12 (A) by striking ‘‘and’’ at the end of clause

13 (vii), and

14 (B) by inserting after clause (viii) the fol15 lowing new clause:

16 ‘‘(ix) shall disregard any qualified dis17 tributions (as defined in section 406(i)(2))

18 made from any qualified education and

19 employment account (as defined in section

20 406(i)(1)) while the family is receiving aid

21 to families with dependent children; and’’.

22 (2) NONRECURRING LUMP SUM EXEMPT FROM

23 LUMP SUM RULE.—Section 402(a)(17) (42 U.S.C.

24 602(a)(17)) is amended by adding at the end the

25 following: ‘‘; and that this paragraph shall not apply
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1 to earned and unearned income received in a month

2 on a nonrecurring basis to the extent that such in3 come is placed in a qualified education and employ4 ment account (as defined in section 406(i)(1)) the

5 total amount which, after such placement, does not

6 exceed $10,000.’’.

7 (c) QUALIFIED EDUCATION AND EMPLOYMENT AC8 COUNTS.—Section 406 of such Act (42 U.S.C. 606) is

9 amended by adding at the end the following:

10 ‘‘(i)(1) The term ‘qualified education and employ11 ment account’ means a mechanism established by the

12 State (such as escrow accounts or education savings

13 bonds) that allows savings from the earned income of a

14 dependent child or parent of such child in a family receiv15 ing aid to families with dependent children to be used for

16 qualified distributions.

17 ‘‘(2) The term ‘qualified distributions’ means dis18 tributions from a qualified education and employment ac19 count for expenses directly related to the attendance at

20 an eligible postsecondary or secondary institution or di21 rectly related to improving the employability (as deter22 mined by the State) of a member of a family receiving

23 aid to families with dependent children.

24 ‘‘(3) The term ‘eligible postsecondary or secondary

25 institution’ means a postsecondary or secondary institu-
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1 tion determined to be eligible by the State under guide2 lines established by the Secretary.’’.

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

4 this section shall apply to payments under part A of title

5 IV of the Social Security Act (42 U.S.C. 601 et seq.) for

6 calendar quarters beginning on or after January 1, 1995.

7 SEC. 105. INCENTIVES AND ASSISTANCE IN STARTING A

8 SMALL BUSINESS.

9 (a) AUTHORITY FOR STATES TO PERMIT CERTAIN

10 SELF-EMPLOYMENT PROGRAM PARTICIPANTS A ONE11 TIME ELECTION TO PURCHASE CAPITAL EQUIPMENT

12 FOR A SMALL BUSINESS IN LIEU OF DEPRECIATION; RE13 PAYMENTS BY SUCH PERSONS OF THE PRINCIPAL POR14 TION OF SMALL BUSINESS LOANS TREATED AS BUSINESS

15 EXPENSES FOR PURPOSES OF AFDC.—

16 (1) AMENDMENTS TO THE SOCIAL SECURITY

17 ACT.—Section 402(a)(8) of the Social Security Act

18 (42 U.S.C. 602(a)(8)) is amended—

19 (A) in subparagraph (B)(ii)(II), by striking

20 ‘‘and’’ after the semicolon;

21 (B) by redesignating subparagraph (C) as

22 subparagraph (D); and

23 (C) by inserting after subparagraph (B)

24 the following new subparagraph:
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1 ‘‘(C) provide that, in determining the earned in2 come of a family any of the members of which owns

3 a small business and is a participant in a self-em4 ployment program offered by a State in accordance

5 with section 482(d)(1)(B)(ii), the State may—

6 ‘‘(i)(I) during the 1-year period beginning

7 on the date the family makes an election under

8 this clause, treat as an offset against the gross

9 receipts of the business the sum of the capital

10 expenditures for the business by any member of

11 the family during such 1-year period; and

12 ‘‘(II) allow each such family eligible for aid

13 under this part not more than 1 election under

14 this clause; and

15 ‘‘(ii) treat as an offset against the gross

16 receipts of the business—

17 ‘‘(I) the amounts paid by any member

18 of the family as repayment of the principal

19 portion of a loan made for the business;

20 and

21 ‘‘(II) cash retained by the business for

22 future use by the business; and’’.

23 (2) AMENDMENT TO THE INTERNAL REVENUE

24 CODE OF 1986.—Section 167 of the Internal Revenue

25 Code of 1986 (relating to depreciation), as amended
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1 by section 13261(b) of the Omnibus Budget Rec2 onciliation Act of 1993, is amended by redesignating

3 subsection (g) as subsection (h) and by inserting

4 after subsection (f) the following new subsection:

5 ‘‘(g) CERTAIN PROPERTY OF AFDC RECIPIENTS

6 NOT DEPRECIABLE.—No depreciation deduction shall be

7 allowed under this section (and no depreciation or amorti8 zation deduction shall be allowed under any other provi9 sion of this subtitle) with respect to the portion of the

10 adjusted basis of any property which is attributable to ex11 penditures treated as an offset against gross receipts

12 under section 402(a)(8)(C)(i) of the Social Security Act.’’.

13 (3) EFFECTIVE DATE.—

14 (A) SOCIAL SECURITY ACT AMEND15 MENTS.—The amendments made by paragraph

16 (1) shall apply to payments made under part A

17 of title IV of the Social Security Act (42 U.S.C.

18 601 et seq.) on or after January 1, 1995.

19 (B) INTERNAL REVENUE CODE AMEND20 MENT.—The amendments made by paragraph

21 (2) shall apply to property placed in service on

22 or after January 1, 1995.

23 (b) DEMONSTRATION PROJECTS ESTABLISHING

24 PUBLIC-PRIVATE PARTNERSHIPS FOR TECHNICAL AS25 SISTANCE TO SELF-EMPLOYED AFDC RECIPIENTS.—
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1 (1) IN GENERAL.—The Secretary shall provide

2 for demonstration projects to be conducted in States

3 with applications approved under this Act under

4 which one or more partnerships are developed be5 tween State agencies and community businesses or

6 educational institutions to provide assistance to eligi7 ble participants.

8 (2) ELIGIBLE PARTICIPANTS.—For purposes of

9 this subsection, the term ‘‘eligible participants’’

10 means—

11 (A) individuals who are receiving aid to

12 families with dependent children; and

13 (B) individuals who cease to be eligible to

14 receive such aid who have been participating in

15 a demonstration project conducted by a State

16 under this subsection.

17 (3) PERMISSIBLE EXPENDITURES.—Funds

18 from any demonstration project conducted under

19 this subsection may be used to pay the costs associ20 ated with developing and implementing a process

21 through which businesses or educational institutions

22 would work with the State agency to provide assist23 ance to eligible participants seeking to start or oper24 ate small businesses, including—

25 (A) mentoring;
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1 (B) training for eligible participants in ad2 ministering a business;

3 (C) technical assistance in preparing busi4 ness plans; and

5 (D) technical assistance in the process of

6 applying for business loans, marketing services,

7 and other activities related to conducting such

8 small businesses.

9 (c) DEMONSTRATION PROJECTS FOR TRAINING

10 AFDC RECIPIENTS AS SELF-EMPLOYED PROVIDERS OF

11 CHILD CARE SERVICES.—

12 (1) IN GENERAL.—The Secretary shall provide

13 for demonstration projects to be conducted in States

14 with applications approved under this Act under

15 which one or more partnerships are developed be16 tween State agencies and community businesses or

17 educational institutions to provide assistance to eligi18 ble participants in the establishment and operation

19 of child care centers in the home or in the commu20 nity which would provide child care services.

21 (2) ELIGIBLE PARTICIPANTS.—For purposes of

22 this subsection, the term ‘‘eligible participants’’

23 means—

24 (A) individuals who are receiving aid to

25 families with dependent children; and
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1 (B) individuals who cease to be eligible to

2 receive such aid who have been participating in

3 a demonstration project conducted by a State

4 under this subsection.

5 (3) PERMISSIBLE EXPENDITURES.—Funds

6 from any demonstration project conducted under

7 this subsection may be used to pay the costs associ8 ated with developing and implementing a process

9 through which businesses or educational institutions

10 would work with the State agency to provide assist11 ance to train eligible participants to provide licensed

12 child care services, including—

13 (A) mentoring;

14 (B) training in the provision of child care

15 services;

16 (C) training for eligible participants in ad17 ministering a business;

18 (D) training in early childhood education;

19 (E) technical assistance in preparing busi20 ness plans;

21 (F) technical assistance in the process of

22 applying for loans, marketing services, qualify23 ing for Federal and State programs, and other

24 activities related to the provision of child care

25 services; and
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1 (G) technical assistance in obtaining a li2 cense and complying with Federal, State, and

3 local regulations regarding the provision of

4 child care.

5 (d) DEMONSTRATION PROJECT TO PROMOTE OWN6 ERSHIP OF FAMILY-OWNED BUSINESSES BY AFDC

7 RECIPIENTS.—

8 (1) ESTABLISHMENT.—The Secretary shall pro9 vide for demonstration projects described in para10 graph (2) in States with applications approved under

11 this Act.

12 (2) PROJECT DESCRIBED.—Each State con13 ducting a demonstration project under this sub14 section shall develop a program under which the

15 State shall—

16 (A) encourage incentives for families re17 ceiving aid to families with dependent children

18 to work together as managers and employees in

19 family-owned businesses;

20 (B) develop State and private partnerships

21 for making or guaranteeing small business

22 loans, including seed money, available to such

23 families;
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1 (C) provide such families with technical

2 training in small business management, ac3 counting, and bookkeeping;

4 (D) regularly evaluate the status of the re5 cipients of assistance under the project; and

6 (E) continue a transitional period of bene7 fits under title IV and title XIX of the Social

8 Security Act for recipients of assistance under

9 the project until such time as the State deter10 mines such family is self-sufficient.

11 For purposes of this paragraph, a family-owned

12 business may include other relatives of the family re13 ceiving aid to families with dependent children re14 gardless if such relatives are also receiving aid to

15 families with dependent children.

16 SEC. 106. INCREASED EMPHASIS IN JOBS PROGRAM ON

17 MOVING PEOPLE INTO THE WORK FORCE.

18 Section 481(a) of the Social Security Act (42 U.S.C.

19 681(a)) is amended by adding at the end the following

20 new sentence: ‘‘It is further the purpose of this part to

21 encourage individuals receiving education and training to

22 enter the permanent work force by developing programs

23 through which such individuals enter the work force and

24 then receive post-employment education and training.’’.
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1 SEC. 107. ADDITIONAL DEMONSTRATION PROJECTS TO

2 MOVE AFDC RECIPIENTS INTO THE WORK

3 FORCE.

4 (a) ESTABLISHMENT.—The Secretary shall provide

5 for additional demonstration projects described in sub6 section (b) in States with applications approved under this

7 Act.

8 (b) PROJECT DESCRIBED.—Each State conducting a

9 demonstration project under this section shall develop a

10 program or programs to better move recipients of aid to

11 families with dependent children into the work force.

12 TITLE II—INITIATIVES TO

13 STRENGTHEN FAMILIES AND

14 BREAK THE CYCLE OF WEL15 FARE DEPENDENCY

16 SEC. 201. DEMONSTRATION PROJECTS TO ESTABLISH

17 CHILD CENTERED PROGRAMS THROUGH

18 CONVERSION OF CERTAIN AFDC AND JOBS

19 PAYMENTS INTO BLOCK GRANTS.

20 (a) ESTABLISHMENT.—The Secretary shall provide

21 for demonstration projects described in subsection (b) in

22 States with applications approved under this Act.

23 (b) PROJECT DESCRIBED.—

24 (1) IN GENERAL.—Each State conducting a

25 demonstration project under this section shall elect

26 to receive payments under paragraph (2) in lieu of—
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1 (A) all payments to which the State would

2 otherwise be entitled to under section 403 of

3 the Social Security Act (42 U.S.C. 603) for aid

4 to families with dependent children under part

5 A of title IV of such Act or the job opportuni6 ties and basic skills training program under

7 part F of such title; or

8 (B) any portion of the payment described

9 in subparagraph (A) to which the State would

10 otherwise be entitled under such section for

11 benefits (identified by the State) under part A

12 or part F of such title for populations (identi13 fied by the State) who receive such benefits.

14 (2) PAYMENT.—The Secretary shall make pay15 ment under this paragraph for each year of the

16 project in an amount equal to—

17 (A) during fiscal year 1995—

18 (i) 100 percent of the total amount to

19 which the State was entitled under section

20 403 of the Social Security Act (42 U.S.C.

21 603) for aid to families with dependent

22 children under part A of title IV of such

23 Act or the job opportunities and basic

24 skills training program under part F of

25 such title; or
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1 (ii) the amount to which the State

2 was entitled to under such section for

3 those benefits and populations identified by

4 the State in paragraph (1)(B),

5 for fiscal year 1994 plus the product of such

6 amount and the percentage increase in the

7 consumer price index for all urban consumers

8 (U.S. city average) during fiscal year 1995; and

9 (B) during each subsequent fiscal year, the

10 amount determined under this paragraph in the

11 previous fiscal year plus the product of such

12 amount and the percentage increase in such

13 consumer price index during such previous fis14 cal year.

15 (3) DESCRIPTION OF ACTIVITIES.—

16 (A) IN GENERAL.—Each State which is

17 paid under paragraph (2) shall expend the

18 amount received under such paragraph and the

19 amount, if any, made available to such State

20 under section 5(b)(1)(B)(ii) for one or more of

21 the following purposes:

22 (i)(I) Establish residential programs

23 for teenage mothers with dependent chil24 dren where education, job training, com-
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1 munity service, or other employment is

2 provided.

3 (II) Support the pilot project de4 scribed in section 433(f) of the Jobs Train5 ing Partnership Act, as added by section

6 102 of this Act, to provide such services to

7 teenage mothers with dependent children.

8 (ii) Establish programs to promote,

9 expedite, and ensure adoption of children,

10 particularly neglected or abused children.

11 (iii) Expand child care assistance for

12 the children of needy working parents (as

13 determined by the State).

14 (iv) Establish residential schooling

15 with appropriate support services for chil16 dren from needy families (as determined

17 by the State) enrolled at the request of the

18 parents of such children.

19 (v) Establish other services which will

20 be provided directly to children from needy

21 families (as determined by the State).

22 (vi) Implement other reforms consist23 ent with this Act.
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1 (4) COMMUNITY-BASED ACTIVITIES.—The Sec2 retary shall ensure that each State receiving a grant

3 under this section—

4 (A) takes adequate steps to assure the

5 well-being of the children affected by the

6 State’s receipt of the grant; and

7 (B) to the fullest extent possible, utilizes

8 the grant under this section to support commu9 nity-based services in communities affected by

10 the State’s receipt of the grant.

11 SEC. 202. DEMONSTRATION PROJECTS PROVIDING NO AD12 DITIONAL BENEFITS WITH RESPECT TO CHIL13 DREN BORN WHILE A FAMILY IS RECEIVING

14 AFDC AND ALLOWING INCREASES IN THE

15 EARNED INCOME DISREGARD.

16 (a) ESTABLISHMENT.—The Secretary shall provide

17 for demonstration projects described in subsection (b) in

18 States with applications approved under this Act.

19 (b) PROJECT DESCRIBED.—If a child is born to a

20 family after the date on which such family begins receiving

21 aid to families with dependent children, a State conducting

22 a demonstration project under this section—

23 (1) shall not take such child into account in de24 termining the need of such family for such aid; and
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1 (2) shall increase the amounts disregarded from

2 earned income under section 402(a)(8)(A) of such

3 Act (42 U.S.C. 602(a)(8)(A)).

4 SEC. 203. DEMONSTRATION PROJECTS PROVIDING INCEN5 TIVES TO MARRY.

6 (a) AID TO TWO-PARENT FAMILIES.—

7 (1) ESTABLISHMENT.—The Secretary shall pro8 vide for demonstration projects described in para9 graph (2) in States with applications approved under

10 this Act.

11 (2) PROJECT DESCRIBED.—

12 (A) IN GENERAL.—Each State conducting

13 a demonstration project under this subsection

14 shall not apply the requirements described in

15 subparagraph (B) to a parent of a dependent

16 child who is married to the natural parent of

17 such child.

18 (B) REQUIREMENTS WAIVED.—The re19 quirements described in this subparagraph are:

20 (i) The work history requirement de21 scribed in section 407(b)(1)(A)(iii) of such

22 Act (42 U.S.C. 607(b)(1)(A)(iii)).

23 (ii) The 100-hour rule under section

24 233.100(a)(1)(i) of title 45, Code of Fed25 eral Regulations.
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1 (b) INCREASE IN STEPPARENT EARNED INCOME

2 DISREGARD.—

3 (1) ESTABLISHMENT.—The Secretary shall pro4 vide for demonstration projects described in para5 graph (2) in States with applications approved under

6 this Act.

7 (2) PROJECT DESCRIBED.—For purposes of

8 making determinations for any month under section

9 402(a)(7) of the Social Security Act (42 U.S.C.

10 602(a)(7)), each State conducting a demonstration

11 project under this subsection shall modify the in12 come disregards provided in subparagraphs (A)

13 through (D) of section 402(a)(31) of such Act (42

14 U.S.C. 602(a)(31)) in order to decrease the amount

15 of income determined under such section with re16 spect to a dependent child’s stepparent.

17 SEC. 204. DEMONSTRATION PROJECTS REDUCING AFDC

18 BENEFITS IF SCHOOL ATTENDANCE IS IR19 REGULAR OR PREVENTIVE HEALTH CARE

20 FOR DEPENDENT CHILDREN IS NOT OB21 TAINED.

22 (a) ESTABLISHMENT.—The Secretary shall provide

23 for demonstration projects described in subsection (b) in

24 States with applications approved under this Act.

25 (b) PROJECT DESCRIBED.—
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1 (1) IN GENERAL.—Each State conducting a

2 demonstration project under this section shall reduce

3 the amount of aid to families with dependent chil4 dren received by a family if the State agency deter5 mines that one or both (at the State’s option) of the

6 following conditions exist:

7 (A) A member of such family is attending

8 school or participating in a course of vocational

9 or technical training and such family member is

10 absent from such school or training with no ex11 cuse for more than a number of days per month

12 determined appropriate by the State.

13 (B) A member of such family is a child

14 under the age of 6 who has not received appro15 priate immunizations (as determined by the

16 State).

17 (2) LIMITATION.—Each State conducting a

18 demonstration project under this section shall estab19 lish procedures which ensure that no reduction in

20 aid to families with dependent children under para21 graph (1) will endanger the welfare and safety of

22 any dependent child.
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1 SEC. 205. DEMONSTRATION PROJECTS TO INCREASE CHILD

2 SUPPORT COLLECTION.

3 (a) ESTABLISHMENT.—The Secretary shall provide

4 for demonstration projects described in subsection (b) in

5 States with applications approved under this Act.

6 (b) PROJECT DESCRIBED.—Each State conducting a

7 demonstration project under this section shall increase the

8 State’s child support collection efforts through one or

9 more of the following methods:

10 (1) Enhanced child support enforcement and

11 collection, including holding a parent accountable for

12 supporting any children of the parent’s minor chil13 dren.

14 (2) Applying section 402(a)(8)(vi) of the Social

15 Security Act (42 U.S.C. 602(a)(8)(vi)) by substitut16 ing an amount greater than $50 (to be determined

17 by the State) for ‘‘$50’’ each place such dollar

18 amount appears.

19 (3) Any other method that the State deems ap20 propriate.
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1 SEC. 206. DEMONSTRATION PROJECTS TO DEVELOP COM2 MUNITY-BASED PROGRAMS FOR TEENAGE

3 PREGNANCY PREVENTION AND FAMILY

4 PLANNING

5 (a) ESTABLISHMENT.—The Secretary shall provide

6 for demonstration projects described in subsection (b) in

7 States with applications approved under this Act.

8 (b) PROJECT DESCRIBED.—Each State conducting a

9 demonstration project under this section shall develop a

10 community-based program for teenage pregnancy preven11 tion and family planning.

12 SEC. 207. ADDITIONAL DEMONSTRATION PROJECTS TO

13 STRENGTHEN FAMILIES AND BREAK THE

14 CYCLE OF WELFARE DEPENDENCY.

15 (a) ESTABLISHMENT.—The Secretary shall provide

16 for additional demonstration projects described in sub17 section (b) in States with applications approved under this

18 Act.

19 (b) PROJECT DESCRIBED.—Each State conducting a

20 demonstration project under this section shall develop a

21 program or programs to strengthen families and break the

22 cycle of welfare dependency.
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1 TITLE III—INITIATIVES TO DI2 VERSIFY AND IMPROVE THE

3 PERFORMANCE OF WELFARE

4 SERVICES

5 SEC. 301. DEMONSTRATION PROJECTS FOR PROVIDING

6 PLACEMENT OF AFDC RECIPIENTS IN PRI7 VATE SECTOR JOBS.

8 (a) ESTABLISHMENT.—The Secretary shall provide

9 for demonstration projects described in subsection (b) in

10 States with applications approved under this Act.

11 (b) PROJECT DESCRIBED.—Each State conducting a

12 demonstration project under this section shall—

13 (1) contract with private for-profit and non14 profit groups to provide any individual receiving aid

15 to families with dependent children with training,

16 support services, and placement in a private sector

17 job which permits such individual to cease receiving

18 aid to families with dependent children; and

19 (2) upon employment of such individual, pay

20 such groups a negotiated portion of the total amount

21 that such individual’s family would have received

22 over the course of the year in which such individual

23 began such employment in the form of aid to fami24 lies with dependent children.
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1 SEC. 302. DEMONSTRATION PROJECTS PROVIDING PER2 FORMANCE-BASED INCENTIVES FOR STATE

3 PUBLIC WELFARE PROVIDERS.

4 (a) ESTABLISHMENT.—The Secretary shall provide

5 for demonstration projects to establish performance-based

6 incentives for State public welfare providers in States with

7 applications described in subsection (b)(1) which are ap8 proved under this Act.

9 (b) APPLICATIONS.—

10 (1) APPLICATION DESCRIBED.—An application

11 described under this paragraph is an application

12 which—

13 (A) identifies the State offices or adminis14 trative units which will participate in the dem15 onstration project;

16 (B) describes indicators of employee or

17 program performance based on outcome meas18 ures for—

19 (i) training and education;

20 (ii) job search and placement assist21 ance;

22 (iii) child support collection;

23 (iv) teen pregnancy prevention pro24 grams; and

25 (v) any other program objective that

26 the State finds appropriate;
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1 (C) describes budgetary incentives for pro2 gram performance, including direct financial in3 centives for employees where appropriate;

4 (D) describes a process for developing, in

5 cooperation with employees of participating of6 fices or units, a job evaluation system based on

7 performance measures; and

8 (E) describes the way in which State pub9 lic welfare providers, private providers, welfare

10 clients, and members of the community have

11 been or shall be involved in the planning and

12 implementation of a performance based welfare

13 delivery system.

14 (2) TECHNICAL ASSISTANCE.—The Secretary

15 shall provide a State desiring to submit an applica16 tion for a demonstration project under this section

17 with technical assistance in preparing an application

18 described under paragraph (1).

19 TITLE IV—OFFSETTING

20 EXPENDITURE REDUCTIONS

21 SEC. 401. OFFSETTING EXPENDITURE REDUCTIONS.

22 (a) IN GENERAL.—Subparagraph (C) of section

23 1001(5) of the Food Security Act of 1985 (7 U.S.C.

24 1308(5)(C)) is amended to read as follows:
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1 ‘‘(C) In the case of corporations and other entities

2 included in subparagraph (B) and partnerships, the Sec3 retary shall attribute payments to natural persons in pro4 portion to their ownership interests in an entity and in

5 any other entity, or partnership, that owns or controls the

6 entity, or partnership, receiving the payments.’’.

7 (b) REMOVAL OF 3-ENTITY RULE.—Section

8 1001A(a)(1) of the Food Security Act of 1985 (7 U.S.C.

9 1308–1(a)(1)) is amended—

10 (1) in the first sentence—

11 (A) by striking ‘‘substantial beneficial in12 terests in more than two entities’’ and inserting

13 ‘‘a substantial beneficial interest in any other

14 entity’’; and

15 (B) by striking ‘‘receive such payments as

16 separate persons’’ and inserting ‘‘receives the

17 payments as a separate person’’; and

18 (2) by striking the second sentence.

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

20 this section shall take effect on October 1, 1994.

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