I

105TH CONGRESS

2D SESSION H. R. 4818

To provide that payments of the earned income tax credit are to be disregarded for 12 months in determining eligibility for benefits under

the program of block grants to States for temporary assistance for

needy families, the supplemental security income program, the Medicaid

Program, and public housing programs.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 12, 1998

Mr. THOMPSON (for himself, Mr. TOWNS, Ms. MILLENDER-MCDONALD, Ms.

PELOSI, Ms. LEE, Ms. CHRISTIAN-GREEN, Mrs. MINK of Hawaii, Mrs.

MEEK of Florida, Ms. KILPATRICK, Ms. SLAUGHTER, Mr. HILLIARD, Mr.

SCOTT, and Mr. FROST) introduced the following bill; which was referred

to the Committee on Ways and Means, and in addition to the Committees

on Commerce, and Banking and Financial Services, for a period to be

subsequently determined by the Speaker, in each case for consideration

of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide that payments of the earned income tax credit

are to be disregarded for 12 months in determining

eligibility for benefits under the program of block grants

to States for temporary assistance for needy families,

the supplemental security income program, the Medicaid

Program, and public housing programs.

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

2 This Act may be cited as the ‘‘Asset-Building for

3 Working Americans Act’’.

4 SEC. 2. FINDINGS.

5 The Congress finds that—

6 (1) The existing resource limitations affecting

7 eligibility for benefits under the program of block

8 grants to States for Temporary Assistance for

9 Needy Families, the Supplemental Security Income

10 program, the Medicaid program, and public housing

11 programs triggered by savings made through earned

12 income tax credits may encourage working families

13 to make unnecessary purchases in order to remain

14 eligible for public assistance rather than building the

15 long-term assets required for escaping poverty per16 manently, and may prevent low-income working fam17 ilies from obtaining the temporary public assistance

18 needed while they build the assets required for es19 caping poverty permanently;

20 (2) adjusting the resource limitations under

21 such programs to disregard savings made through

22 earned income tax credits for 12 months will enable

23 working families to make the necessary savings to

24 build long-term security through assets while still

25 obtaining temporary public assistance for living and

26 raising children in health and safety;
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1 (3) 33 percent of all households in the United

2 States, and 60 percent of African-American house3 holds, have no or negative financial assets; and

4 (4) 46.9 percent of all children, including 40

5 percent of Caucasian children and 75 percent of Af6 rican-American children, in the United States live in

7 households with no financial assets.

8 SEC. 3. 12-MONTH DISREGARD OF PAYMENTS OF EARNED

9 INCOME TAX CREDIT UNDER THE PROGRAM

10 OF BLOCK GRANTS TO STATES FOR TEM11 PORARY ASSISTANCE FOR NEEDY FAMILIES.

12 (a) REQUIREMENT.—Section 408(a) of the Social Se13 curity Act (42 U.S.C. 608(a)) is amended by adding at

14 the end the following:

15 ‘‘(12) 12-MONTH DISREGARD OF EITC PAYMENTS.—

16 A State to which a grant is made under section 403 of

17 this Act shall, in determining the eligibility of an individ18 ual for assistance, and the amount or type of assistance

19 to be provided to an individual, under the State program

20 funded under this part, disregard any refund of Federal

21 income taxes made to the individual by reason of section

22 32 of the Internal Revenue Code of 1986 (relating to

23 earned income tax credit), and any payment made to the

24 individual by an employer under section 3507 of such

25 Code (relating to advance payment of earned income cred-
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1 it), for a period that begins with the month in which the

2 refund or payment is received and that is of a duration

3 of not less than 12 months.’’.

4 (b) PENALTY.—Section 409(a) of such Act (42

5 U.S.C. 609(a)) is amended by adding at the end the fol6 lowing:

7 ‘‘(15) FAILURE TO DISREGARD EITC PAYMENTS FOR

8 12 MONTHS.—If the Secretary determines that a State to

9 which a grant is made under section 403 for a fiscal year

10 has violated section 408(a)(12) during the fiscal year, the

11 Secretary shall reduce the grant payable to the State

12 under section 403(a)(1) for the immediately succeeding

13 fiscal year by an amount equal to not more than 2 percent

14 of the State family assistance grant.’’.

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

16 this section shall take effect on October 1, 1999.

17 SEC. 4. 12-MONTH DISREGARD OF PAYMENTS OF EARNED

18 INCOME TAX CREDIT UNDER THE SUPPLE19 MENTAL SECURITY INCOME PROGRAM.

20 (a) IN GENERAL.—Section 1613(a)(11) of the Social

21 Security Act (42 U.S.C. 1382b(a)(11)) is amended by

22 striking ‘‘for the month of receipt and the following

23 month’’ and inserting ‘‘for the 12-month period that be24 gins with the month of receipt’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to benefits for months beginning

3 on or after October 1, 1999.

4 SEC. 5. DISREGARD UNDER MEDICAID PROGRAM.

5 (a) IN GENERAL.—Section 1902 of the Social Secu6 rity Act (42 U.S.C. 1396a) is amended—

7 (1) in subsection (a)(17)—

8 (A) by striking ‘‘and’’ before ‘‘(D)’’; and

9 (B) by inserting before ‘‘; and’’ the follow10 ing: ‘‘, and (E) do not take into account for a

11 period of 12 months refunds and advance pay12 ments described in subsection (aa)’’;

13 (2) in subsection (f), by striking ‘‘subsection

14 (e)’’ and inserting ‘‘subsections (e) and (aa))’’; and

15 (3) by adding at the end the following new sub16 section:

17 ‘‘(aa) Notwithstanding any other provision of this

18 title, in determining eligibility for, and the amount of,

19 medical assistance provided under this title, any refund

20 of Federal income taxes made to an individual by reason

21 of section 32 of the Internal Revenue Code of 1986 (relat22 ing to earned income tax credit), and any payment made

23 to such an individual by an employer under section 3507

24 of such Code (relating to advance payment of earned in-
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1 come credit) shall not be taken into account as income

2 or resources for a period of 12 months.’’.

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

4 subsection (a) shall apply to eligibility determinations

5 made on or after October 1, 1999.

6 SEC. 6. 12-MONTH DISREGARD OF PAYMENTS OF EARNED

7 INCOME TAX CREDIT UNDER PUBLIC HOUS8 ING AND SECTION 8 RENTAL ASSISTANCE

9 PROGRAMS.

10 Section 3(b)(4) of the United States Housing Act of

11 1937 (42 U.S.C. 1437a(b)(4)) is amended by adding at

12 the end the following new sentence: ‘‘In determining the

13 income of a household for purposes of this paragraph, the

14 Secretary shall disregard any refund of Federal income

15 taxes made to any member of the household by reason of

16 section 32 of the Internal Revenue Code of 1986 (relating

17 to earned income tax credit), and any payment made to

18 any member of the household by an employer under sec19 tion 3507 of such Code (relating to advance payment of

20 earned income credit), for the 12-month period that begins

21 with the month in which the refund or payment is re22 ceived.’’.

Æ