II 

★(Star Print) 

109TH CONGRESS 

1ST SESSION S. 6 

To amend the Internal Revenue Code of 1986 to provide permanent family 

tax relief, to reauthorize and improve the program of block grants to 

States for temporary assistance for needy families and to improve access 

to quality child care, and to provide incentives for charitable contributions 

by individuals and businesses, to improve the public disclosure of activities of exempt organizations, and to enhance the ability of low-income 

Americans to gain financial security by building assets, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2005 

Mr. SANTORUM (for himself, Mr. FRIST, Mrs. HUTCHISON, Mr. MCCONNELL, 

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

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

permanent family tax relief, to reauthorize and improve 

the program of block grants to States for temporary 

assistance for needy families and to improve access to 

quality child care, and to provide incentives for charitable 

contributions by individuals and businesses, to improve 

the public disclosure of activities of exempt organizations, 

and to enhance the ability of low-income Americans to 

gain financial security by building assets, and for other 

purposes. 
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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 ‘‘Marriage, Opportunity, Relief, and Empowerment Act of 

6 2005’’ or the ‘‘MORE Act’’. 

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

8 this Act is as follows: 

TITLE I—FAMILY TAX RELIEF 

Sec. 101. Tax benefits relating to children made permanent. 

Sec. 102. Marriage penalty relief made permanent. 

TITLE II—PERSONAL RESPONSIBILITY AND INDIVIDUAL 

DEVELOPMENT FOR EVERYONE 

Sec. 201. Short title of title. 

Sec. 202. References. 

Subtitle A—TANF 

Sec. 211. State plan. 

Sec. 212. Family assistance grants. 

Sec. 213. Promotion of family formation and healthy marriage. 

Sec. 214. Supplemental grant for population increases in certain States. 

Sec. 215. Bonus to reward employment achievement. 

Sec. 216. Contingency fund. 

Sec. 217. Use of funds. 

Sec. 218. Repeal of Federal loan for State welfare programs. 

Sec. 219. Work participation requirements. 

Sec. 220. Universal engagement and family self-sufficiency plan requirements; 

other prohibitions and requirements. 

Sec. 221. Penalties. 

Sec. 222. Data collection and reporting. 

Sec. 223. Direct funding and administration by Indian tribes. 

Sec. 224. Research, evaluations, and national studies. 

Sec. 225. Study by the Census Bureau. 

Sec. 226. Funding for child care. 

Sec. 227. Definitions. 

Sec. 228. Responsible fatherhood program. 

Sec. 229. Additional grants. 

Sec. 230. Technical corrections. 

Subtitle B—Abstinence Education 

Sec. 241. Extension of abstinence education program. 
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Subtitle C—Child Support 

Sec. 251. Distribution of child support collected by States on behalf of children 

receiving certain welfare benefits. 

Sec. 252. Mandatory review and adjustment of child support orders for families 

receiving TANF. 

Sec. 253. Report on undistributed child support payments. 

Sec. 254. Use of new hire information to assist in administration of unemployment compensation programs. 

Sec. 255. Decrease in amount of child support arrearage triggering passport 

denial. 

Sec. 256. Use of tax refund intercept program to collect past-due child support 

on behalf of children who are not minors. 

Sec. 257. Garnishment of compensation paid to veterans for service-connected 

disabilities in order to enforce obligations. 

Sec. 258. Improving Federal debt collection practices. 

Sec. 259. Maintenance of technical assistance funding. 

Sec. 260. Maintenance of Federal parent locator service funding. 

Sec. 261. Identification and seizure of assets held by multistate financial institutions. 

Sec. 262. Information comparisons with insurance data. 

Sec. 263. Tribal access to the Federal parent locator service. 

Sec. 264. Reimbursement of Secretary’s costs of information comparisons and 

disclosure for enforcement of obligations on Higher Education 

Act loans and grants. 

Sec. 265. Technical amendment relating to cooperative agreements between 

States and Indian tribes. 

Sec. 266. Claims upon longshore and harbor workers’ compensation for child 

support. 

Sec. 267. State option to use Statewide automated data processing and information retrieval system for interstate cases. 

Sec. 268. State law requirement concerning the Uniform Interstate Family 

Support Act (UIFSA). 

Sec. 269. Grants to States for access and visitation programs. 

Sec. 270. Timing of corrective action year for State noncompliance with child 

support enforcement program requirements. 

Subtitle D—Child Welfare 

Sec. 275. Extension of authority to approve demonstration projects. 

Sec. 276. Removal of Commonwealth of Puerto Rico foster care funds from 

limitation on payments. 

Sec. 277. Technical correction. 

Subtitle E—Supplemental Security Income 

Sec. 281. Review of State agency blindness and disability determinations. 

Subtitle F—Transitional Medical Assistance 

Sec. 285. Extension and simplification of the Transitional Medical Assistance 

Program (TMA). 

Sec. 286. Prohibition against covering childless adults with SCHIP funds. 

Subtitle G—Effective Date 

Sec. 291. Effective date. 
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Sec. 292. Extension through remainder of fiscal year 2005. 

TITLE III—CARE ACT 

Sec. 300. Short title; etc. 

Subtitle A—Charitable Giving Incentives 

Sec. 301. Deduction for portion of charitable contributions to be allowed to individuals who do not itemize deductions. 

Sec. 302. Tax-free distributions from individual retirement accounts for charitable purposes. 

Sec. 303. Charitable deduction for contributions of food inventories. 

Sec. 304. Charitable deduction for contributions of book inventories. 

Sec. 305. Expansion of charitable contribution allowed for scientific property 

used for research and for computer technology and equipment 

used for educational purposes. 

Sec. 306. Modifications to encourage contributions of capital gain real property 

made for conservation purposes. 

Sec. 307. Exclusion of 25 percent of gain on sales or exchanges of land or 

water interests to eligible entities for conservation purposes. 

Sec. 308. Tax exclusion for cost-sharing payments under Partners for Fish and 

Wildlife Program. 

Sec. 309. Adjustment to basis of S corporation stock for certain charitable contributions. 

Sec. 310. Enhanced deduction for charitable contribution of literary, musical, 

artistic, and scholarly compositions. 

Sec. 311. Mileage reimbursements to charitable volunteers excluded from gross 

income. 

Sec. 312. Extension of enhanced deduction for inventory to include public 

schools. 

Sec. 313. 10-year divestiture period for certain excess business holdings of private foundations 

Subtitle B—Proposals Improving the Oversight of Tax-Exempt Organizations 

Sec. 321. Disclosure of written determinations. 

Sec. 322. Disclosure of Internet web site and name under which organization 

does business. 

Sec. 323. Modification to reporting capital transactions. 

Sec. 324. Disclosure that Form 990 is publicly available. 

Sec. 325. Disclosure to State officials of proposed actions related to section 

501(c) organizations. 

Sec. 326. Expansion of penalties to preparers of Form 990. 

Sec. 327. Notification requirement for entities not currently required to file. 

Subtitle C—Other Charitable and Exempt Organization Provisions 

Sec. 331. Modification of excise tax on unrelated business taxable income of 

charitable remainder trusts. 

Sec. 332. Modifications to section 512(b)(13). 

Sec. 333. Simplification of lobbying expenditure limitation. 

Sec. 334. Expedited review process for certain tax-exemption applications. 

Sec. 335. Clarification of definition of church tax inquiry. 

Sec. 336. Expansion of declaratory judgment remedy to tax-exempt organizations. 

Sec. 337. Definition of convention or association of churches. 
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Sec. 338. Payments by charitable organizations to victims of war on terrorism 

and families of astronauts killed in the line of duty. 

Sec. 339. Modification of scholarship foundation rules. 

Sec. 340. Treatment of certain hospital support organizations as qualified organizations for purposes of determining acquisition indebtedness. 

Sec. 341. Matching grants to low-income taxpayer clinics for return preparation. 

Sec. 342. Exemption of qualified 501(c)(3) bonds for nursing homes from Federal guarantee prohibitions. 

Sec. 343. Excise taxes exemption for blood collector organizations. 

Sec. 344. Pilot project for forest conservation activities. 

Sec. 345. Clarification of treatment of Johnny Micheal Spann Patriot Trusts. 

Subtitle D—Social Services Block Grant 

Sec. 351. Restoration of funds for the Social Services Block Grant. 

Sec. 352. Requirement to submit annual report on State activities. 

Subtitle E—Individual Development Accounts 

Sec. 361. Short title. 

Sec. 362. Purposes. 

Sec. 363. Definitions. 

Sec. 364. Structure and administration of qualified individual development account programs. 

Sec. 365. Procedures for opening and maintaining an individual development 

account and qualifying for matching funds. 

Sec. 366. Deposits by qualified individual development account programs. 

Sec. 367. Withdrawal procedures. 

Sec. 368. Certification and termination of qualified individual development account programs. 

Sec. 369. Reporting, monitoring, and evaluation. 

Sec. 370. Authorization of appropriations. 

Sec. 371. Matching funds for individual development accounts provided through 

a tax credit for qualified financial institutions. 

Sec. 372. Account funds disregarded for purposes of certain means-tested Federal programs. 

Subtitle F—Management of Exempt Organizations 

Sec. 381. Authorization of appropriations. 

Subtitle G—Compassion Capital Fund 

Sec. 391. Support for nonprofit community-based organizations; Department of 

Health and Human Services. 

Sec. 392. Support for nonprofit community-based organizations; Corporation 

for National and Community Service. 

Sec. 393. Support for nonprofit community-based organizations; Department of 

Justice. 

Sec. 394. Support for nonprofit community-based organizations; Department of 

Housing and Urban Development. 

Sec. 395. Coordination. 

Subtitle H—Maternity Group Homes 

Sec. 399. Maternity group homes. 
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1 TITLE I—FAMILY TAX RELIEF 

2 SEC. 101. TAX BENEFITS RELATING TO CHILDREN MADE 

3 PERMANENT. 

4 Title IX of the Economic Growth and Tax Relief Rec5 onciliation Act of 2001 (relating to sunset provisions of 

6 such Act) shall not apply to title II of such Act (relating 

7 to tax benefits for children). 

8 SEC. 102. MARRIAGE PENALTY RELIEF MADE PERMANENT. 

9 Title IX of the Economic Growth and Tax Relief Rec10 onciliation Act of 2001 (relating to sunset provisions of 

11 such Act) shall not apply to title III of such Act (relating 

12 to marriage penalty relief). 

13 TITLE II—PERSONAL RESPONSI14 BILITY AND INDIVIDUAL DE15 VELOPMENT FOR EVERYONE 

16 SECTION 201. SHORT TITLE OF TITLE. 

17 This title may be cited as the ‘‘Personal Responsi18 bility and Individual Development for Everyone Act’’ or 

19 the ‘‘PRIDE Act’’. 

20 SEC. 202. REFERENCES. 

21 Except as otherwise expressly provided, wherever in 

22 this title an amendment or repeal is expressed in terms 

23 of an amendment to, or repeal of, a section or other provi24 sion, the amendment or repeal shall be considered to be 
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1 made to a section or other provision of the Social Security 

2 Act. 

3 Subtitle A—TANF 

4 SEC. 211. STATE PLAN. 

5 (a) PERFORMANCE IMPROVEMENT.—Section 402(a) 

6 (42 U.S.C. 602(a)) is amended— 

7 (1) in paragraph (1)— 

8 (A) in subparagraph (A)— 

9 (i) by redesignating clause (vi) as 

10 clause (vii); and 

11 (ii) by striking clause (v) and insert12 ing the following: 

13 ‘‘(v) Establish specific measurable 

14 performance objectives for pursuing the 

15 purposes of the program under this part as 

16 described in section 401(a), including by— 

17 ‘‘(I) establishing objectives con18 sistent (as determined by the State) 

19 with the criteria used by the Secretary 

20 in establishing performance targets 

21 under section 403(a)(4)(C) (including 

22 with respect to workplace attachment 

23 and advancement), and with such ad24 ditional criteria related to other pur25 poses of the program under this part 
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1 as described in section 401(a) as the 

2 Secretary, in consultation with the 

3 National Governors’ Association and 

4 the American Public Human Services 

5 Association, shall establish; and 

6 ‘‘(II) describing the methodology 

7 that the State will use to measure 

8 State performance in relation to each 

9 such objective. 

10 ‘‘(vi) Describe any strategies and pro11 grams the State plans to use to address— 

12 ‘‘(I) employment retention and 

13 advancement for recipients of assist14 ance under the program, including 

15 placement into high-demand jobs, and 

16 whether the jobs are identified using 

17 labor market information; 

18 ‘‘(II) efforts to reduce teen preg19 nancy; 

20 ‘‘(III) services for struggling and 

21 noncompliant families, and for clients 

22 with special problems; and 

23 ‘‘(IV) program integration, in24 cluding the extent to which employ25 ment and training services under the 
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1 program are provided through the 

2 One-Stop delivery system created 

3 under the Workforce Investment Act 

4 of 1998, and the extent to which 

5 former recipients of such assistance 

6 have access to additional core, inten7 sive, or training services funded 

8 through such Act.’’; and 

9 (B) in subparagraph (B)— 

10 (i) by striking clauses (i) and (iv); 

11 (ii) by redesignating clauses (ii) and 

12 (iii) as clauses (i) and (ii), respectively; 

13 and 

14 (iii) by inserting after clause (ii) (as 

15 so redesignated by clause (ii)) the fol16 lowing: 

17 ‘‘(iii) If the State is undertaking any 

18 strategies or programs to engage faith19 based organizations in the provision of 

20 services funded under this part, or that 

21 otherwise relate to section 104 of the Per22 sonal Responsibility and Work Opportunity 

23 Reconciliation Act of 1996, the document 

24 shall describe such strategies and pro25 grams. 
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1 ‘‘(iv) The document shall describe 

2 strategies to improve program manage3 ment and performance. 

4 ‘‘(v) The document shall include a 

5 performance report which details State 

6 progress toward full engagement for all 

7 adult or minor child head of household re8 cipients of assistance.’’; 

9 (2) in paragraph (4), by inserting ‘‘and tribal’’ 

10 after ‘‘that local’’; and 

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

12 ‘‘(8) CERTIFICATION OF CONSULTATION ON

13 PROVISION OF TRANSPORTATION AID.—In the case 

14 of a State that provides transportation aid under the 

15 State program, a certification by the chief executive 

16 officer of the State that State and local transpor17 tation agencies and planning bodies have been con18 sulted in the development of the plan.’’. 

19 (b) PROCEDURES FOR SUBMITTING AND AMENDING

20 STATE PLANS.— 

21 (1) IN GENERAL.—Subsection (b) of section 

22 402 (42 U.S.C. 602(b)) is amended to read as fol23 lows: 

24 ‘‘(b) PROCEDURES FOR SUBMITTING AND AMENDING

25 STATE PLANS.— 
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1 ‘‘(1) STANDARD STATE PLAN FORMAT.—The 

2 Secretary shall, after notice and public comment, de3 velop a proposed Standard State Plan Form to be 

4 used by States under subsection (a). Such form shall 

5 be finalized by the Secretary for use by States not 

6 later than 9 months after the date of enactment of 

7 the Personal Responsibility and Individual Develop8 ment for Everyone Act. 

9 ‘‘(2) REQUIREMENT FOR COMPLETED PLAN

10 USING STANDARD STATE PLAN FORMAT BY FISCAL

11 YEAR 2007.—Notwithstanding any other provision of 

12 law, each State shall submit a complete State plan, 

13 using the Standard State Plan Form developed 

14 under paragraph (1), not later than October 1, 

15 2006. 

16 ‘‘(3) PUBLIC NOTICE AND COMMENT.—Prior to 

17 submitting a State plan to the Secretary under this 

18 section, the State shall— 

19 ‘‘(A) make the proposed State plan avail20 able to the public through an appropriate State 

21 maintained Internet website and through other 

22 means as the State determines appropriate; 

23 ‘‘(B) allow for a reasonable public com24 ment period of not less than 45 days; and 
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1 ‘‘(C) make comments received concerning 

2 such plan or, at the discretion of the State, a 

3 summary of the comments received available to 

4 the public through such website and through 

5 other means as the State determines appro6 priate. 

7 ‘‘(4) PUBLIC AVAILABILITY OF STATE PLAN.— 

8 A State shall ensure that the State plan that is in 

9 effect for any fiscal year is available to the public 

10 through an appropriate State maintained Internet 

11 website and through other means as the State deter12 mines appropriate. 

13 ‘‘(5) AMENDING THE STATE PLAN.—A State 

14 shall file an amendment to the State plan with the 

15 Secretary if the State determines that there has 

16 been a material change in any information required 

17 to be included in the State plan or any other infor18 mation that the State has included in the plan, in19 cluding substantial changes in the use of funding. 

20 Prior to submitting an amendment to the State plan 

21 to the Secretary, the State shall— 

22 ‘‘(A) make the proposed amendment avail23 able to the public as provided for in paragraph 

24 (3)(A); 
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1 ‘‘(B) allow for a reasonable public com2 ment period of not less than 45 days; and 

3 ‘‘(C) make the comments available as pro4 vided for in paragraph (3)(C).’’. 

5 (2) CONFORMING AMENDMENT.—Section 402 

6 (42 U.S.C. 602) is amended by striking subsection 

7 (c). 

8 (c) CONSULTATION WITH STATE REGARDING PLAN

9 AND DESIGN OF TRIBAL PROGRAMS.—Section 412(b)(1) 

10 (42 U.S.C. 612(b)(1)) is amended— 

11 (1) in subparagraph (E), by striking ‘‘and’’ at 

12 the end; 

13 (2) in subparagraph (F), by striking the period 

14 at the end and inserting ‘‘; and’’; and 

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

16 ‘‘(G) provides an assurance that the State 

17 in which the tribe is located has been consulted 

18 regarding the plan and its design.’’. 

19 (d) PERFORMANCE MEASURES.—Section 413 (42 

20 U.S.C. 613) is amended by adding at the end the fol21 lowing: 

22 ‘‘(k) PERFORMANCE IMPROVEMENT.—The Secretary, 

23 in consultation with the States, shall develop uniform per24 formance measures designed to assess the degree of effec25 tiveness, and the degree of improvement, of State pro-
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1 grams funded under this part in accomplishing the pur2 poses of this part.’’. 

3 (e) ANNUAL RANKING OF STATES.—Section 

4 413(d)(1) (42 U.S.C. 613(d)(1)) is amended to read as 

5 follows: 

6 ‘‘(1) ANNUAL RANKING OF STATES.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall 

8 rank annually the States to which grants are 

9 paid under section 403 in the order of their 

10 success in— 

11 ‘‘(i) placing recipients of assistance 

12 under the State program funded under this 

13 part into private sector jobs; 

14 ‘‘(ii) the success of the recipients in 

15 retaining employment; 

16 ‘‘(iii) the ability of the recipients to 

17 increase their wages; 

18 ‘‘(iv) the degree to which recipients 

19 have workplace attachment and advance20 ment; 

21 ‘‘(v) reducing the overall welfare case22 load; and 

23 ‘‘(vi) when a practicable method for 

24 calculating this information becomes avail25 able, diverting individuals from formally 
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1 applying to the State program and receiv2 ing assistance. 

3 ‘‘(B) CONSIDERATION OF OTHER FAC4 TORS.—In ranking States under this para5 graph, the Secretary shall take into account the 

6 average number of minor children living at 

7 home in families in the State that have incomes 

8 below the poverty line and the amount of fund9 ing provided each State under this part for 

10 such families.’’. 

11 SEC. 212. FAMILY ASSISTANCE GRANTS. 

12 (a) EXTENSION OF AUTHORITY.—Section 403(a)(1) 

13 (42 U.S.C. 603(a)(1)(A)) is amended— 

14 (1) in subparagraph (A)— 

15 (A) by striking ‘‘1996, 1997, 1998, 1999, 

16 2000, 2001, 2002, and 2003’’ and inserting 

17 ‘‘2006 through 2010’’; and 

18 (B) by inserting ‘‘payable to the State for 

19 the fiscal year’’ before the period; and 

20 (2) in subparagraph (C), by striking ‘‘for fiscal 

21 year 2003’’ and all that follows through the period, 

22 and inserting ‘‘for each of fiscal years 2006 through 

23 2010, $16,566,542,000 for grants under this para24 graph.’’. 
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1 (b) MATCHING GRANTS FOR THE TERRITORIES.— 

2 Section 1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by 

3 striking ‘‘1997 through 2003’’ and inserting ‘‘2006 

4 through 2010’’. 

5 SEC. 213. PROMOTION OF FAMILY FORMATION AND 

6 HEALTHY MARRIAGE. 

7 (a) STATE PLANS.—Section 402(a)(1)(A) (42 U.S.C. 

8 602(a)(1)(A)), as amended by section 211(a), is amended 

9 by adding at the end the following: 

10 ‘‘(viii) Encourage equitable treatment 

11 of healthy 2-parent married families under 

12 the program referred to in clause (i).’’. 

13 (b) HEALTHY MARRIAGE PROMOTION GRANTS; RE14 PEAL OF BONUS FOR REDUCTION OF ILLEGITIMACY

15 RATIO.—Section 403(a)(2) (42 U.S.C. 603(a)(2)) is 

16 amended to read as follows: 

17 ‘‘(2) HEALTHY MARRIAGE PROMOTION

18 GRANTS.— 

19 ‘‘(A) AUTHORITY.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall award competitive grants to States, 

22 territories, and Indian tribes and tribal or23 ganizations for not more than 50 percent 

24 of the cost of developing and implementing 
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1 innovative programs to promote and sup2 port healthy 2-parent married families. 

3 ‘‘(ii) USE OF OTHER TANF FUNDS.— 

4 A State or Indian tribe with an approved 

5 tribal family assistance plan may use funds 

6 provided under other grants made under 

7 this part for all or part of the expenditures 

8 incurred for the remainder of the costs de9 scribed in clause (i). In the case of a State, 

10 any such funds expended shall not be con11 sidered qualified State expenditures for 

12 purposes of section 409(a)(7). 

13 ‘‘(B) HEALTHY MARRIAGE PROMOTION AC14 TIVITIES.—Funds provided under subparagraph 

15 (A) shall be used to support any of the fol16 lowing programs or activities: 

17 ‘‘(i) Public advertising campaigns on 

18 the value of marriage and the skills needed 

19 to increase marital stability and health. 

20 ‘‘(ii) Education in high schools on the 

21 value of marriage, relationship skills, and 

22 budgeting. 

23 ‘‘(iii) Marriage education, marriage 

24 skills, and relationship skills programs, 

25 that may include parenting skills, financial 
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1 management, conflict resolution, and job 

2 and career advancement, for non-married 

3 pregnant women, non-married expectant 

4 fathers, and non-married recent parents. 

5 ‘‘(iv) Pre-marital education and mar6 riage skills training for engaged couples 

7 and for couples or individuals interested in 

8 marriage. 

9 ‘‘(v) Marriage enhancement and mar10 riage skills training programs for married 

11 couples. 

12 ‘‘(vi) Divorce reduction programs that 

13 teach relationship skills. 

14 ‘‘(vii) Marriage mentoring programs 

15 which use married couples as role models 

16 and mentors. 

17 ‘‘(viii) Programs to reduce the dis18 incentives to marriage in means-tested aid 

19 programs, if offered in conjunction with 

20 any activity described in this subpara21 graph. 

22 ‘‘(C) VOLUNTARY PARTICIPATION.—Par23 ticipation in programs or activities described in 

24 any of clauses (iii) through (vii) shall be vol25 untary. 
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1 ‘‘(D) GENERAL RULES GOVERNING USE OF

2 FUNDS.—The rules of section 404, other than 

3 subsection (b) of that section, shall not apply to 

4 a grant made under this paragraph. 

5 ‘‘(E) REQUIREMENTS FOR RECEIPT OF

6 FUNDS.—A State, territory, or Indian tribe or 

7 tribal organization may not be awarded a grant 

8 under this paragraph unless the State, terri9 tory, Indian tribe or tribal organization, as a 

10 condition of receiving funds under such a 

11 grant— 

12 ‘‘(i) consults with experts in domestic 

13 violence or with relevant community do14 mestic violence coalitions in developing 

15 such programs or activities; and 

16 ‘‘(ii) describes in the application for a 

17 grant under this paragraph— 

18 ‘‘(I) how the programs or activi19 ties proposed to be conducted will ad20 dress, as appropriate, issues of domes21 tic violence; and 

22 ‘‘(II) what the State, territory, or 

23 Indian tribe or tribal organization, 

24 will do, to the extent relevant, to en25 sure that participation in such pro-
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1 grams or activities is voluntary, and 

2 to inform potential participants that 

3 their involvement is voluntary. 

4 ‘‘(F) APPROPRIATION.— 

5 ‘‘(i) IN GENERAL.—Out of any money 

6 in the Treasury of the United States not 

7 otherwise appropriated, there are appro8 priated for each of fiscal years 2006 

9 through 2010, $100,000,000 for grants 

10 under this paragraph. 

11 ‘‘(ii) EXTENDED AVAILABILITY OF

12 FUNDS.— 

13 ‘‘(I) IN GENERAL.—Funds ap14 propriated under clause (i) for each of 

15 fiscal years 2006 through 2010 shall 

16 remain available to the Secretary until 

17 expended. 

18 ‘‘(II) AUTHORITY FOR GRANT

19 RECIPIENTS.—A State, territory, or 

20 Indian tribe or tribal organization 

21 may use funds made available under a 

22 grant awarded under this paragraph 

23 without fiscal year limitation pursuant 

24 to the terms of the grant.’’. 
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1 (c) COUNTING OF SPENDING ON NON-ELIGIBLE

2 FAMILIES TO PREVENT AND REDUCE INCIDENCE OF

3 OUT-OF-WEDLOCK BIRTHS, ENCOURAGE FORMATION

4 AND MAINTENANCE OF HEALTHY 2-PARENT MARRIED

5 FAMILIES, OR ENCOURAGE RESPONSIBLE FATHER6 HOOD.—Section 409(a)(7)(B)(i) (42 U.S.C. 

7 609(a)(7)(B)(i)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(V) COUNTING OF SPENDING

10 ON NON-ELIGIBLE FAMILIES TO PRE11 VENT AND REDUCE INCIDENCE OF

12 OUT-OF-WEDLOCK BIRTHS, ENCOUR13 AGE FORMATION AND MAINTENANCE

14 OF HEALTHY 2-PARENT MARRIED

15 FAMILIES, OR ENCOURAGE RESPON16 SIBLE FATHERHOOD.—Subject to sub17 clauses (II) and (III), the term ‘quali18 fied State expenditures’ includes the 

19 total expenditures by the State during 

20 the fiscal year under all State pro21 grams for a purpose described in 

22 paragraph (3) or (4) of section 

23 401(a).’’. 

24 (d) PURPOSES.—Section 401(a)(4) (42 U.S.C. 

25 601(a)(4)) is amended by striking ‘‘two-parent families’’ 
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1 and inserting ‘‘healthy 2-parent married families, and en2 courage responsible fatherhood’’. 

3 SEC. 214. SUPPLEMENTAL GRANT FOR POPULATION IN4 CREASES IN CERTAIN STATES. 

5 Section 403(a)(3)(H) (42 U.S.C. 603(a)(3)(H)) is 

6 amended— 

7 (1) in clause (i), by striking ‘‘2002 and 2003’’ 

8 and inserting ‘‘2006 through 2009’’; 

9 (2) in clause (ii), by striking ‘‘March 31, 2005’’ 

10 and inserting ‘‘fiscal year 2009’’; and 

11 (3) in clause (iii), by striking ‘‘2002 and 2003’’ 

12 and inserting ‘‘2006 through 2009’’. 

13 SEC. 215. BONUS TO REWARD EMPLOYMENT ACHIEVE14 MENT. 

15 (a) BONUS TO REWARD EMPLOYMENT ACHIEVE16 MENT.—Section 403(a)(4) (42 U.S.C. 603(a)(4)) is 

17 amended to read as follows: 

18 ‘‘(4) BONUS TO REWARD EMPLOYMENT

19 ACHIEVEMENT.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 make a grant pursuant to this paragraph to 

22 each State for each bonus year for which the 

23 State is an employment achievement State. 

24 ‘‘(B) AMOUNT OF GRANT.— 
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1 ‘‘(i) IN GENERAL.—Subject to clause 

2 (ii), the Secretary shall determine the 

3 amount of the grant payable under this 

4 paragraph to an employment achievement 

5 State for a bonus year, which shall be 

6 based on the performance of the State as 

7 determined under subparagraph (D)(i) for 

8 the fiscal year that immediately precedes 

9 the bonus year. 

10 ‘‘(ii) LIMITATION.—The amount pay11 able to a State under this paragraph for a 

12 bonus year shall not exceed 5 percent of 

13 the State family assistance grant. 

14 ‘‘(C) FORMULA FOR MEASURING STATE

15 PERFORMANCE.— 

16 ‘‘(i) IN GENERAL.—Subject to clause 

17 (ii), not later than October 1, 2006, the 

18 Secretary, in consultation with the States, 

19 shall develop a formula for measuring 

20 State performance in operating the State 

21 program funded under this part so as to 

22 achieve the goals of employment entry, job 

23 retention, increased earnings from employ24 ment, and workplace attachment and ad25 vancement for families receiving assistance 
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•S 6 IS1S 

1 under the program, as measured on an ab2 solute basis and on the basis of improve3 ment in State performance. 

4 ‘‘(ii) SPECIAL RULE FOR BONUS

5 YEARS 2006 AND 2007.—For the purposes 

6 of awarding a bonus under this paragraph 

7 for bonus year 2006 or 2007, the Sec8 retary may measure the performance of a 

9 State in fiscal year 2005 or 2006 (as the 

10 case may be) using the job entry rate, job 

11 retention rate, and earnings gain rate com12 ponents of the formula developed under 

13 section 403(a)(4)(C) as in effect imme14 diately before the effective date of this 

15 paragraph. 

16 ‘‘(D) DETERMINATION OF STATE PER17 FORMANCE.—For each bonus year, the Sec18 retary shall— 

19 ‘‘(i) use the formula developed under 

20 subparagraph (C) to determine the per21 formance of each eligible State for the fis22 cal year that precedes the bonus year; and 

23 ‘‘(ii) prescribe performance standards 

24 in such a manner so as to ensure that— 
25 

•S 6 IS1S 

1 ‘‘(I) the average annual total 

2 amount of grants to be made under 

3 this paragraph for each bonus year 

4 equals $100,000,000; and 

5 ‘‘(II) the total amount of grants 

6 to be made under this paragraph for 

7 all bonus years equals $600,000,000. 

8 ‘‘(E) DEFINITIONS.—In this paragraph: 

9 ‘‘(i) BONUS YEAR.—The term ‘bonus 

10 year’ means each of fiscal years 2006 

11 through 2011. 

12 ‘‘(ii) EMPLOYMENT ACHIEVEMENT

13 STATE.—The term ‘employment achieve14 ment State’ means, with respect to a bonus 

15 year, an eligible State whose performance 

16 determined pursuant to subparagraph 

17 (D)(i) for the fiscal year preceding the 

18 bonus year equals or exceeds the perform19 ance standards prescribed under subpara20 graph (D)(ii) for such preceding fiscal 

21 year. 

22 ‘‘(F) APPROPRIATION.—Out of any money 

23 in the Treasury of the United States not other24 wise appropriated, there are appropriated for 
26 

•S 6 IS1S 

1 the period of fiscal years 2006 through 2011, 

2 $600,000,000 for grants under this paragraph. 

3 ‘‘(G) GRANTS FOR TRIBAL ORGANIZA4 TIONS.—This paragraph shall apply with re5 spect to tribal organizations in the same man6 ner in which this paragraph applies with re7 spect to States. In determining the criteria 

8 under which to make grants to tribal organiza9 tions under this paragraph, the Secretary shall 

10 consult with tribal organizations.’’. 

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

12 subsection (a) shall take effect on October 1, 2005. 

13 SEC. 216. CONTINGENCY FUND. 

14 (a) CONTINGENCY FUNDING AVAILABLE TO NEEDY

15 STATES.—Section 403(b) (42 U.S.C. 603(b)) is amend16 ed— 

17 (1) by striking paragraphs (1) through (3) and 

18 inserting the following: 

19 ‘‘(1) CONTINGENCY FUND GRANTS.— 

20 ‘‘(A) PAYMENTS.—Subject to subpara21 graph (C), and out of funds appropriated under 

22 subparagraph (E), each State shall receive a 

23 contingency fund grant for each eligible month 

24 in which the State is a needy State under para25 graph (3). 
27 

•S 6 IS1S 

1 ‘‘(B) MONTHLY CONTINGENCY FUND

2 GRANT AMOUNT.—For each eligible month in 

3 which a State is a needy State, the State shall 

4 receive a contingency fund grant equal to the 

5 product of— 

6 ‘‘(i) the applicable percentage (as de7 fined under subparagraph (D)(i)) of the 

8 applicable benefit level (as defined in sub9 paragraph (D)(ii)); and 

10 ‘‘(ii) the amount by which the total 

11 number of families that received assistance 

12 under the State program funded under this 

13 part in the most recently concluded 3- 

14 month period for which data are available 

15 from the State exceeds a 5-percent in16 crease in the number of such families in 

17 the corresponding 3-month period in either 

18 of the 2 most recent preceding fiscal years 

19 and that was due, in large measure, to eco20 nomic conditions rather than State policy 

21 changes. 

22 ‘‘(C) LIMITATION.—The total amount paid 

23 to a single State under subparagraph (A) dur24 ing a fiscal year shall not exceed the amount 

25 equal to 10 percent of the State family assist-
28 

•S 6 IS1S 

1 ance grant (as defined under subparagraph (B) 

2 of subsection (a)(1)). 

3 ‘‘(D) DEFINITIONS.—In this paragraph: 

4 ‘‘(i) APPLICABLE PERCENTAGE.—The 

5 term ‘applicable percentage’ means the 

6 Federal medical assistance percentage for 

7 the State (as defined in section 1905(b)). 

8 ‘‘(ii) APPLICABLE BENEFIT LEVEL.— 

9 ‘‘(I) IN GENERAL.—Subject to 

10 subclause (II), the term ‘applicable 

11 benefit level’ means the amount equal 

12 to the maximum cash assistance grant 

13 for a family consisting of 3 individuals 

14 under the State program funded 

15 under this part. 

16 ‘‘(II) RULE FOR STATES WITH

17 MORE THAN 1 MAXIMUM LEVEL.—In 

18 the case of a State that has more 

19 than 1 maximum cash assistance 

20 grant level for families consisting of 3 

21 individuals, the basic assistance cost 

22 shall be the amount equal to the max23 imum cash assistance grant level ap24 plicable to the largest number of fami25 lies consisting of 3 individuals receiv-
29 

•S 6 IS1S 

1 ing assistance under the State pro2 gram funded under this part. 

3 ‘‘(E) APPROPRIATION.—Out of any money 

4 in the Treasury of the United States not other5 wise appropriated, there is appropriated for the 

6 period of fiscal years 2006 through 2010, such 

7 sums as are necessary for making contingency 

8 fund grants under this subsection in a total 

9 amount not to exceed $2,000,000,000.’’; 

10 (2) by redesignating paragraph (4) as para11 graph (2); and 

12 (3) in paragraph (2), as so redesignated— 

13 (A) by striking ‘‘(3)(A)’’ and inserting 

14 ‘‘(1)’’; and 

15 (B) by striking ‘‘2-month period that be16 gins with any’’ and inserting ‘‘fiscal year quar17 ter that includes a’’. 

18 (b) MODIFICATION OF DEFINITION OF NEEDY

19 STATE.—Section 403(b), as amended by subsection (a), 

20 (42 U.S.C. 603(b)) is further amended— 

21 (1) by striking paragraphs (5) and (6); 

22 (2) by redesignating paragraphs (7) and (8) as 

23 paragraphs (5) and (6), respectively; and 

24 (3) by inserting after paragraph (2) (as redesig25 nated by subsection (a)(2)) the following: 
30 

•S 6 IS1S 

1 ‘‘(3) INITIAL DETERMINATION OF WHETHER A

2 STATE QUALIFIES AS A NEEDY STATE.— 

3 ‘‘(A) IN GENERAL.—For purposes of para4 graph (1), subject to paragraph (4), a State will 

5 be initially determined to be a needy State for 

6 a month if, as determined by the Secretary— 

7 ‘‘(i) the monthly average of the 

8 unduplicated number of families that re9 ceived assistance under the State program 

10 funded under this part in the most recently 

11 concluded 3-month period for which data 

12 are available from the State increased by 

13 at least 5 percent over the number of such 

14 families that received such benefits in the 

15 corresponding 3-month period in either of 

16 the 2 most recent preceding fiscal years; 

17 ‘‘(ii) the increase in the number of 

18 such families for the State was due, in 

19 large measure, to economic conditions 

20 rather than State policy changes; and 

21 ‘‘(iii) the State satisfies any of the fol22 lowing criteria: 

23 ‘‘(I) The average rate of total un24 employment in the State (seasonally 

25 adjusted) for the period consisting of 
31 

•S 6 IS1S 

1 the most recent 3 months for which 

2 data are available has increased by 

3 the lesser of 1.5 percentage points or 

4 by 50 percent over the corresponding 

5 3-month period in either of the 2 most 

6 recent preceding fiscal years. 

7 ‘‘(II) The average insured unem8 ployment rate for the most recent 13 

9 weeks for which data are available has 

10 increased by 1 percentage point over 

11 the corresponding 13-week period in 

12 either of the 2 most recent preceding 

13 fiscal years. 

14 ‘‘(III) As determined by the Sec15 retary of Agriculture, the monthly av16 erage number of households (as of the 

17 last day of each month) that partici18 pated in the food stamp program in 

19 the State in the then most recently 

20 concluded 3-month period for which 

21 data are available exceeds by at least 

22 15 percent the monthly average num23 ber of households (as of the last day 

24 of each month) in the State that par25 ticipated in the food stamp program 
32 

•S 6 IS1S 

1 in the corresponding 3-month period 

2 in either of the 2 most recent pre3 ceding fiscal years, but only if the 

4 Secretary and the Secretary of Agri5 culture concur in the determination 

6 that the State’s increased caseload 

7 was due, in large measure, to eco8 nomic conditions rather than changes 

9 in Federal or State policies related to 

10 the food stamp program. 

11 ‘‘(B) DURATION.—A State that qualifies 

12 as a needy State— 

13 ‘‘(i) under subclause (I) or (II) of 

14 subparagraph (A)(iii), shall be considered 

15 a needy State until the State’s average 

16 rate of total unemployment or the State’s 

17 insured unemployment rate, respectively, 

18 falls below the level attained in the applica19 ble period that was first used to determine 

20 that the State qualified as a needy State 

21 under that subparagraph (and in the case 

22 of the insured unemployment rate, without 

23 regard to any declines in the rate that are 

24 the result of seasonal variation); and 
33 

•S 6 IS1S 

1 ‘‘(ii) under subclause (III) of subpara2 graph (A)(iii), shall be considered a needy 

3 State so long as the State meets the cri4 teria for being considered a needy State 

5 under that subparagraph. 

6 ‘‘(4) EXCEPTIONS.— 

7 ‘‘(A) UNEXPENDED BALANCES.— 

8 ‘‘(i) IN GENERAL.—Notwithstanding 

9 paragraph (3), a State that has unex10 pended TANF balances in an amount that 

11 exceeds 30 percent of the total amount of 

12 grants received by the State under sub13 section (a) for the most recently completed 

14 fiscal year (other than welfare-to-work 

15 grants made under paragraph (5) of that 

16 subsection prior to fiscal year 2000), shall 

17 not be a needy State under this subsection. 

18 ‘‘(ii) DEFINITION OF UNEXPENDED

19 TANF BALANCES.—In clause (i), the term 

20 ‘unexpended TANF balances’ means the 

21 lessor of— 

22 ‘‘(I) the total amount of grants 

23 made to the State (regardless of the 

24 fiscal year in which such funds were 

25 awarded) under subsection (a) (other 
34 

•S 6 IS1S 

1 than welfare-to-work grants made 

2 under paragraph (5) of that sub3 section prior to fiscal year 2000) but 

4 not yet expended as of the end of the 

5 fiscal year preceding the fiscal year 

6 for which the State would, in the ab7 sence of this subparagraph, be consid8 ered a needy State under this sub9 section; and 

10 ‘‘(II) the total amount of grants 

11 made to the State under subsection 

12 (a) (other than welfare-to-work grants 

13 made under paragraph (5) of that 

14 subsection prior to fiscal year 2000) 

15 but not yet expended as of the end of 

16 such preceding fiscal year, plus the 

17 difference between— 

18 ‘‘(aa) the pro rata share of 

19 the current fiscal year grant to 

20 be made under subsection (a) to 

21 the State; and 

22 ‘‘(bb) current year expendi23 tures of the total amount of 

24 grants made to the State under 

25 subsection (a) (regardless of the 
35 

•S 6 IS1S 

1 fiscal year in which such funds 

2 were awarded) (other than such 

3 welfare-to-work grants) through 

4 the end of the most recent cal5 endar quarter. 

6 ‘‘(B) FAILURE TO SATISFY MAINTENANCE

7 OF EFFORT REQUIREMENT.—Notwithstanding 

8 paragraph (3), a State that fails to satisfy the 

9 requirement of section 409(a)(7) with respect to 

10 a fiscal year shall not be a needy State under 

11 this subsection for that fiscal year.’’. 

12 (c) CLARIFICATION OF REPORTING REQUIRE13 MENTS.—Paragraph (6) of section 403(b) (42 U.S.C. 

14 603(b)), as redesignated by subsection (b)(2), is amended 

15 by striking ‘‘on the status of the Fund’’ and inserting ‘‘on 

16 the States that qualified for contingency funds and the 

17 amount of funding awarded under this subsection’’. 

18 (d) ELIMINATION OF PENALTY FOR FAILURE TO

19 MAINTAIN 100 PERCENT MAINTENANCE OF EFFORT.— 

20 (1) IN GENERAL.—Section 409(a) (42 U.S.C. 

21 609(a)) is amended— 

22 (A) by striking paragraph (10); and 

23 (B) by redesignating paragraphs (11) 

24 through (14) as paragraphs (10) through (13), 

25 respectively. 
36 

•S 6 IS1S 

1 (2) CONFORMING AMENDMENTS.—Section 409 

2 (42 U.S.C. 609) is amended— 

3 (A) in subsection (a)(7)(B)(i)(III), by 

4 striking ‘‘(12)’’ and inserting ‘‘(11)’’; 

5 (B) in subsection (b)(2), by striking ‘‘(10), 

6 (12), or (13)’’ and inserting ‘‘(11), or (12)’’; 

7 and 

8 (C) in subsection (c)(4), by striking ‘‘(10), 

9 (12), or (13)’’ and inserting ‘‘(11), or (12)’’. 

10 SEC. 217. USE OF FUNDS. 

11 (a) TREATMENT OF INTERSTATE IMMIGRANTS.— 

12 Section 404 (42 U.S.C. 604) is amended by striking sub13 section (c). 

14 (b) RESTORATION OF AUTHORITY TO TRANSFER UP

15 TO 10 PERCENT OF TANF FUNDS TO THE SOCIAL SERV16 ICES BLOCK GRANT.—Section 404(d)(2) (42 U.S.C. 

17 604(d)(2)) is amended to read as follows: 

18 ‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE

19 TO TITLE XX PROGRAMS.—A State may use not 

20 more than 10 percent of the amount of any grant 

21 made to the State under section 403(a) for a fiscal 

22 year to carry out State programs pursuant to title 

23 XX.’’. 

24 (c) CLARIFICATION OF AUTHORITY OF STATES TO

25 USE TANF FUNDS CARRIED OVER FROM PRIOR YEARS
37 

•S 6 IS1S 

1 TO PROVIDE TANF BENEFITS AND SERVICES.—Section 

2 404(e) (42 U.S.C. 604(e)) is amended to read as follows: 

3 ‘‘(e) AUTHORITY TO CARRYOVER OR RESERVE CER4 TAIN AMOUNTS FOR BENEFITS OR SERVICES OR FOR FU5 TURE CONTINGENCIES.— 

6 ‘‘(1) CARRYOVER.—A State or tribe may use a 

7 grant made to the State or tribe under this part for 

8 any fiscal year to provide, without fiscal year limita9 tion, any benefit or service that may be provided 

10 under the State or tribal program funded under this 

11 part. 

12 ‘‘(2) CONTINGENCY RESERVE.—A State or tribe 

13 may designate any portion of a grant made to the 

14 State or tribe under this part as a contingency re15 serve for future needs, and may use any amount so 

16 designated to provide, without fiscal year limitation, 

17 any benefit or service that may be provided under 

18 the State or tribal program funded under this part. 

19 If a State or tribe so designates a portion of such 

20 a grant, the State or tribe shall include in its report 

21 under section 411(a) the amount so designated.’’. 

22 (d) STATE OPTION TO ESTABLISH UNDERGRADUATE

23 POSTSECONDARY OR VOCATIONAL EDUCATIONAL PRO24 GRAM.— 
38 

•S 6 IS1S 

1 (1) IN GENERAL.—Section 404 (42 U.S.C. 604) 

2 is amended by adding at the end the following: 

3 ‘‘(l) AUTHORITY TO ESTABLISH UNDERGRADUATE

4 POSTSECONDARY OR VOCATIONAL EDUCATIONAL PRO5 GRAM.— 

6 ‘‘(1) IN GENERAL.—Subject to the succeeding 

7 paragraphs of this subsection, a State to which a 

8 grant is made under section 403 may use the grant 

9 to establish a program under which an eligible par10 ticipant (as defined in paragraph (5)) may be pro11 vided support services described in paragraph (7) 

12 and, subject to paragraph (8), may have hours of 

13 participation in such program counted as being en14 gaged in work for purposes of determining monthly 

15 participation rates under section 407(b)(1)(B)(i). 

16 ‘‘(2) STATE PLAN REQUIREMENT.—In order to 

17 establish a program under this subsection, a State 

18 shall describe (in an addendum to the State plan 

19 submitted under section 402) the applicable eligi20 bility criteria that is designed to limit participation 

21 in the program to only those individuals— 

22 ‘‘(A) whose past earnings indicate that the 

23 individuals cannot qualify for employment that 

24 pays enough to allow them to obtain self-suffi25 ciency (as determined by the State); and 
39 

•S 6 IS1S 

1 ‘‘(B) for whom enrollment in the program 

2 will prepare the individuals for higher-paying 

3 occupations in demand in the State. 

4 ‘‘(3) LIMITATION ON ENROLLMENT.—The num5 ber of eligible participants in a program established 

6 under this subsection may not exceed 10 percent of 

7 the total number of families receiving assistance 

8 under the State program funded under this part. 

9 ‘‘(4) NO FEDERAL FUNDS FOR TUITION.—A 

10 State may not use Federal funds provided under a 

11 grant made under section 403 to pay tuition for an 

12 eligible participant. 

13 ‘‘(5) DEFINITION OF ELIGIBLE PARTICIPANT.— 

14 In this subsection, the term ‘eligible participant’ 

15 means an individual who receives assistance under 

16 the State program funded under this part and satis17 fies the following requirements: 

18 ‘‘(i) The individual is enrolled in a 

19 postsecondary 2- or 4-year degree program 

20 or in a vocational educational training pro21 gram. 

22 ‘‘(ii) During the period the individual 

23 participates in the program, the individual 

24 maintains satisfactory academic progress, 

25 as defined by the institution operating the 
40 

•S 6 IS1S 

1 undergraduate postsecondary or vocational 

2 educational program in which the indi3 vidual is enrolled. 

4 ‘‘(6) REQUIRED TIME PERIODS FOR COMPLE5 TION OF DEGREE OR VOCATIONAL EDUCATIONAL

6 TRAINING PROGRAM.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), an eligible participant participating 

9 in a program established under this subsection 

10 shall be required to complete the requirements 

11 of a degree or vocational educational training 

12 program within the normal timeframe for full13 time students seeking the particular degree or 

14 completing the vocational educational training 

15 program. 

16 ‘‘(B) EXCEPTION.—For good cause, the 

17 State may allow an eligible participant to com18 plete their degree requirements or vocational 

19 educational training program within a period 

not to exceed 11 20 ⁄2 times the normal timeframe 

21 established under subparagraph (A) (unless fur22 ther modification is required by the Americans 

23 with Disabilities Act of 1990 (42 U.S.C. 12101 

24 et seq.), or section 504 of the Rehabilitation 

25 Act of 1973 (29 U.S.C. 794)) and may modify 
41 

•S 6 IS1S 

1 the requirements applicable to an individual 

2 participating in the program. For purposes of 

3 the preceding sentence, good cause includes the 

4 case of an eligible participant with 1 or more 

5 significant barriers to normal participation, as 

6 determined by the State, such as the need to 

7 care for a family member with special needs. 

8 ‘‘(7) SUPPORT SERVICES DESCRIBED.—For 

9 purposes of paragraph (1), the support services de10 scribed in this paragraph include any or all of the 

11 following during the period the eligible participant is 

12 in the program established under this subsection: 

13 ‘‘(A) Child care. 

14 ‘‘(B) Transportation services. 

15 ‘‘(C) Payment for books and supplies. 

16 ‘‘(D) Other services provided under policies 

17 determined by the State to ensure coordination 

18 and lack of duplication with other programs 

19 available to provide support services. 

20 ‘‘(8) RULES FOR INCLUSION IN MONTHLY

21 WORK PARTICIPATION RATES.— 

22 ‘‘(A) FAMILIES COUNTED AS PARTICI23 PATING IF THEY MEET THE REQUIREMENTS OF

24 SUBPARAGRAPHS (B) OR (C).—For each eligible 

25 participant, a State may elect, for purposes of 
42 

•S 6 IS1S 

1 determining monthly participation rates under 

2 section 407(b)(1)(B)(i), to include such partici3 pant in the determination of such rates in ac4 cordance with subparagraph (B) or (C). 

5 ‘‘(B) FULL OR PARTIAL CREDIT FOR

6 HOURS OF PARTICIPATION IN EDUCATIONAL OR

7 RELATED ACTIVITIES.— 

8 ‘‘(i) IN GENERAL.—Subject to clause 

9 (iv), an eligible participant who partici10 pates in educational or related activities 

11 (as determined by the State) under a pro12 gram established under this subsection 

13 shall be given credit for the number of 

14 hours of such participation to the extent 

15 that an adult recipient or minor child head 

16 of household would be given credit under 

17 section 407(c) for being engaged in the 

18 same number of hours of work activities 

19 described in paragraph (1), (2), (3), (4), 

20 (5), (6), (7), (8), or (12) of section 407(d). 

21 ‘‘(ii) RELATED ACTIVITIES.—For pur22 poses of clause (i), related activities shall 

23 include— 
43 

•S 6 IS1S 

1 ‘‘(I) work activities described in 

2 paragraph (1), (2), (3), (4), (5), (6), 

3 (7), (8), or (12) of section 407(d); 

4 ‘‘(II) work study, practicums, in5 ternships, clinical placements, labora6 tory or field work, or such other ac7 tivities as will enhance the eligible 

8 participant’s employability in the par9 ticipant’s field of study, as determined 

10 by the State; or 

11 ‘‘(III) subject to clause (iii), 

12 study time. 

13 ‘‘(iii) LIMITATION ON INCLUSION OF

14 STUDY TIME.—For purposes of deter15 mining hours per week of participation by 

16 an eligible participant under a program es17 tablished under this subsection, a State 

18 may not count study time of less than 1 

19 hour for every hour of class time or more 

20 than 2 hours for every hour of class time. 

21 ‘‘(iv) TOTAL NUMBER OF HOURS LIM22 ITED TO BEING COUNTED AS 1 FAMILY.— 

23 In no event may hours per week of partici24 pation by an eligible participant under a 

25 program established under this subsection 
44 

•S 6 IS1S 

1 be counted as more than 1 family for pur2 poses of determining monthly participation 

3 rates under section 407(b)(1)(B)(i). 

4 ‘‘(C) FULL CREDIT FOR BEING ENGAGED

5 IN DIRECT WORK ACTIVITIES FOR CERTAIN

6 HOURS PER WEEK.— 

7 ‘‘(i) IN GENERAL.—A family that in8 cludes an eligible participant who, in addi9 tion to complying with the full-time edu10 cational participation requirements of the 

11 degree or vocational educational training 

12 program they are enrolled in, participates 

13 in an activity described in subclause (I), 

14 (II), or (III) of subparagraph (B)(ii) for 

15 not less than the number of hours required 

16 per week under clause (ii) shall be counted 

17 as 1 family. 

18 ‘‘(ii) REQUIRED HOURS PER WEEK.— 

19 For purposes of clause (i), subject to 

20 clause (iii), the number of hours per week 

21 are— 

22 ‘‘(I) 6 hours per week during the 

23 first 12-month period that an eligible 

24 participant participates in a program 

25 established under this subsection; 
45 

•S 6 IS1S 

1 ‘‘(II) 8 hours per week during 

2 the second 12-month period of such 

3 participation; 

4 ‘‘(II) 10 hours per week during 

5 the third 12-month period of such 

6 participation; and 

7 ‘‘(II) 12 hours per week during 

8 the fourth or any other succeeding 12- 

9 month period of such participation. 

10 ‘‘(iii) MODIFICATION OF REQUIRE11 MENTS FOR GOOD CAUSE.—A State may 

12 modify the number of hours per week re13 quired under clause (ii) for good cause. 

14 For purposes of the preceding sentence, 

15 good cause includes the case of an eligible 

16 participant with 1 or more significant bar17 riers to normal participation, as deter18 mined by the State, such as the need to 

19 care for a family member with special 

20 needs.’’. 

21 (2) CONFORMING AMENDMENT.—Section 

22 407(d)(8) (42 U.S.C. 607(d)(8)) is amended by in23 serting ‘‘other than an individual participating in a 

24 program established under section 404(l)’’ after ‘‘in25 dividual’’. 
46 

•S 6 IS1S 

1 SEC. 218. REPEAL OF FEDERAL LOAN FOR STATE WELFARE 

2 PROGRAMS. 

3 (a) REPEAL.—Section 406 (42 U.S.C. 606) is re4 pealed. 

5 (b) CONFORMING AMENDMENTS.— 

6 (1) Section 409 (42 U.S.C. 609), as amended 

7 by section 216(d)(2), is amended— 

8 (A) in subsection (a), by striking para9 graph (6); 

10 (B) in subsection (b)(2), by striking 

11 ‘‘(6),’’; and 

12 (C) in subsection (c)(4), by striking ‘‘(6),’’. 

13 (2) Section 412 (42 U.S.C. 612) is amended by 

14 striking subsection (f) and redesignating subsections 

15 (g) through (i) as subsections (f) through (h), re16 spectively. 

17 (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) 

18 is amended by striking ‘‘406,’’. 

19 SEC. 219. WORK PARTICIPATION REQUIREMENTS. 

20 (a) ELIMINATION OF SEPARATE WORK PARTICIPA21 TION RATE FOR 2-PARENT FAMILIES BEGINNING WITH

22 FISCAL YEAR 2003.— 

23 (1) IN GENERAL.—Section 407 (42 U.S.C. 607) 

24 is amended— 

25 (A) in subsection (a)— 
47 

•S 6 IS1S 

1 (i) in the heading, by striking ‘‘PAR2 TICIPATION RATE REQUIREMENTS’’ and all 

3 that follows through ‘‘A State’’ and insert4 ing ‘‘PARTICIPATION RATE REQUIRE5 MENTS.—A State’’; and 

6 (ii) by striking paragraph (2); 

7 (B) in subsection (b)— 

8 (i) by striking paragraph (2); 

9 (ii) in paragraph (4), by striking 

10 ‘‘paragraphs (1)(B) and (2)(B)’’ and in11 serting ‘‘determining monthly participation 

12 rates under paragraph (1)(B)’’; and 

13 (iii) in paragraph (5), by striking 

14 ‘‘rates’’ and inserting ‘‘rate’’; and 

15 (C) in subsection (c)— 

16 (i) in paragraph (1)— 

17 (I) by striking ‘‘GENERAL

18 RULES.—’’ and all that follows 

19 through ‘‘For purposes’’ in subpara20 graph (A) and inserting ‘‘GENERAL

21 RULE.—For purposes’’; and 

22 (II) by striking subparagraph 

23 (B); and 

24 (ii) in paragraph (2)(D)— 
48 

•S 6 IS1S 

1 (I) by striking ‘‘paragraphs 

2 (1)(B)(i) and (2)(B) of subsection 

3 (b)’’ and inserting ‘‘subsection 

4 (b)(1)(B)(i)’’; and 

5 (II) by striking ‘‘and in 2-parent 

6 families, respectively,’’. 

7 (2) EFFECTIVE DATE.—The amendments made 

8 by paragraph (1) shall take effect as if enacted on 

9 October 1, 2002. 

10 (b) MINIMUM PARTICIPATION RATES.—Section 

11 407(a) (42 U.S.C. 607(a)), as amended by subsection 

12 (a)(1)(A), is amended to read as follows: 

13 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.— 

14 ‘‘(1) IN GENERAL.—A State to which a grant 

15 is made under section 403 for a fiscal year shall 

16 achieve a minimum participation rate with respect to 

17 all families receiving assistance under the State pro18 gram funded under this part that is equal to not less 

19 than— 

20 ‘‘(A) 50 percent for fiscal year 2006; 

21 ‘‘(B) 55 percent for fiscal year 2007; 

22 ‘‘(C) 60 percent for fiscal year 2008; 

23 ‘‘(D) 65 percent for fiscal year 2009; and 

24 ‘‘(E) 70 percent for fiscal year 2010 and 

25 each succeeding fiscal year.’’. 
49 

•S 6 IS1S 

1 (c) LIMITATION ON REDUCTION OF PARTICIPATION

2 RATE THROUGH APPLICATION OF CREDITS.—Section 

3 407(a) (42 U.S.C. 607(b)), as amended by subsection (b), 

4 is amended by adding at the end the following: 

5 ‘‘(2) LIMITATION ON REDUCTION OF PARTICI6 PATION RATE THROUGH APPLICATION OF CRED7 ITS.—Notwithstanding any other provision of this 

8 part, the net effect of any percentage reduction in 

9 the minimum participation rate otherwise required 

10 under this section with respect to families receiving 

11 assistance under the State program funded under 

12 this part as a result of the application of any em13 ployment credit, caseload reduction credit, or other 

14 credit against such rate for a fiscal year, shall not 

15 exceed— 

16 ‘‘(A) 40 percentage points, in the case of 

17 fiscal year 2006; 

18 ‘‘(B) 35 percentage points, in the case of 

19 fiscal year 2007; 

20 ‘‘(C) 30 percentage points, in the case of 

21 fiscal year 2008; 

22 ‘‘(D) 25 percentage points, in the case of 

23 fiscal year 2009; or 

24 ‘‘(E) 20 percentage points, in the case of 

25 fiscal year 2010 or any fiscal year thereafter.’’. 
50 

•S 6 IS1S 

1 (d) REPLACEMENT OF CASELOAD REDUCTION CRED2 IT WITH EMPLOYMENT CREDIT.— 

3 (1) EMPLOYMENT CREDIT TO REWARD STATES

4 IN WHICH FAMILIES LEAVE WELFARE FOR WORK; 

5 ADDITIONAL CREDIT FOR FAMILIES WITH HIGHER

6 EARNINGS.— 

7 (A) IN GENERAL.—Section 407(b) (42 

8 U.S.C. 607(b)), as amended by subsection 

9 (a)(1)(B)(i), is amended by inserting after 

10 paragraph (1) the following: 

11 ‘‘(2) EMPLOYMENT CREDIT.— 

12 ‘‘(A) IN GENERAL.—Subject to subsection 

13 (a)(2), the Secretary shall, by regulation, re14 duce the minimum participation rate otherwise 

15 applicable to a State under this subsection for 

16 a fiscal year by the number of percentage 

17 points in the employment credit for the State 

18 for the fiscal year, as determined by the Sec19 retary— 

20 ‘‘(i) using information in the National 

21 Directory of New Hires; 

22 ‘‘(ii) with respect to a recipient of as23 sistance or former recipient of assistance 

24 under the State program funded under this 

25 part who is placed with an employer whose 
51 

•S 6 IS1S 

1 hiring information is not reported to the 

2 National Directory of New Hires, using 

3 quarterly wage information submitted by 

4 the State to the Secretary not later than 

5 such date as the Secretary shall prescribe 

6 in regulations; or 

7 ‘‘(iii) with respect to families de8 scribed in subclause (II) or (III) of sub9 paragraph (B)(ii), using such other data as 

10 the Secretary may require in order to de11 termine the employment credit for a State 

12 under this paragraph. 

13 ‘‘(B) CALCULATION OF CREDIT.— 

14 ‘‘(i) IN GENERAL.—The employment 

15 credit for a State for a fiscal year is an 

16 amount equal to the sum of the amounts 

17 determined under clause (ii), divided by 

18 the amount determined under clause (iii). 

19 ‘‘(ii) NUMERATOR.—For purposes of 

20 clause (i), the amounts determined under 

21 this clause are the following: 

22 ‘‘(I) Twice the quarterly average 

23 unduplicated number of families that 

24 include an adult or minor child head 

25 of household recipient of assistance 
52 

•S 6 IS1S 

1 under the State program funded 

2 under this part, that ceased to receive 

3 such assistance for at least 2 consecu4 tive months following the date of the 

5 case closure for the family during the 

6 applicable period (as defined in clause 

7 (v)), that did not receive assistance 

8 under a separate State-funded pro9 gram during such 2-month period, 

10 and that were employed during the 

11 calendar quarter immediately suc12 ceeding the quarter in which the as13 sistance under the State program 

14 funded under this part ceased. 

15 ‘‘(II) At the option of the State, 

16 twice the quarterly average number of 

17 families that received a nonrecurring 

18 short-term benefit under the State 

19 program funded under this part dur20 ing the applicable period (as so de21 fined), that were employed during the 

22 calendar quarter immediately suc23 ceeding the quarter in which the non24 recurring short-term benefit was so 

25 received, and that earned at least 
53 

•S 6 IS1S 

1 $1,000 during the applicable period 

2 (as so defined). 

3 ‘‘(III) At the option of the State, 

4 twice the quarterly average number of 

5 families that includes an adult who is 

6 receiving substantial child care or 

7 transportation assistance (as defined 

8 by the Secretary, in consultation with 

9 directors of State programs funded 

10 under this part, which definition shall 

11 specify for each type of assistance a 

12 threshold which is a dollar value or a 

13 length of time over which the assist14 ance is received, and which takes ac15 count of large one-time transition pay16 ments)) during the applicable period 

17 (as so defined). 

18 ‘‘(iii) DENOMINATOR.—For purposes 

19 of clause (i), the amount determined under 

20 this clause is the amount equal to the sum 

21 of the following: 

22 ‘‘(I) The average monthly num23 ber of families that include an adult 

24 or minor child head of household who 

25 received assistance under the State 
54 

•S 6 IS1S 

1 program funded under this part dur2 ing the applicable period (as defined 

3 under clause (v)). 

4 ‘‘(II) If the State elected the op5 tion under clause (ii)(II), twice the 

6 quarterly average number of families 

7 that received a nonrecurring short8 term benefit under the State program 

9 funded under this part during the ap10 plicable period (as so defined). 

11 ‘‘(III) If the State elected the op12 tion under clause (ii)(III), twice the 

13 quarterly average number of families 

14 that includes an adult who is receiving 

15 substantial child care or transpor16 tation assistance during the applicable 

17 period (as so defined). 

18 ‘‘(iv) SPECIAL RULE FOR FORMER RE19 CIPIENTS WITH HIGHER EARNINGS.—In 

20 calculating the employment credit for a 

21 State for a fiscal year, in the case of a 

22 family that includes an adult or a minor 

23 child head of household that is to be in24 cluded in the amount determined under 

25 clause (ii)(I) and that, with respect to the 
55 

•S 6 IS1S 

1 quarter in which the family’s earnings was 

2 examined during the applicable period, 

3 earned at least 33 percent of the average 

4 quarterly earnings in the State (deter5 mined on the basis of State unemployment 

6 data), the family shall be considered to be 

7 1.5 families. 

8 ‘‘(v) DEFINITION OF APPLICABLE PE9 RIOD.—For purposes of this paragraph, 

10 the term ‘applicable period’ means, with 

11 respect to a fiscal year, the most recent 4 

12 quarters for which data are available to the 

13 Secretary providing information on the 

14 work status of— 

15 ‘‘(I) individuals in the quarter 

16 after the individuals ceased receiving 

17 assistance under the State program 

18 funded under this part; 

19 ‘‘(II) at State option, individuals 

20 in the quarter after the individuals re21 ceived a short-term, nonrecurring ben22 efit; and 

23 ‘‘(III) at State option, individuals 

24 in the quarter after the individuals 
56 

•S 6 IS1S 

1 ceased receiving substantial child care 

2 or transportation assistance. 

3 ‘‘(C) NOTIFICATION TO STATE.—Not later 

4 than August 30 of each fiscal year, the Sec5 retary shall— 

6 ‘‘(i) determine, on the basis of the ap7 plicable period, the amount of the employ8 ment credit that will be used in deter9 mining the minimum participation rate for 

10 a State under subsection (a) for the imme11 diately succeeding fiscal year; and 

12 ‘‘(ii) notify each State conducting a 

13 State program funded under this part of 

14 the amount of the employment credit for 

15 such program for the succeeding fiscal 

16 year.’’. 

17 (B) AUTHORITY OF SECRETARY TO USE

18 INFORMATION IN NATIONAL DIRECTORY OF

19 NEW HIRES.—Section 453(i) (42 U.S.C. 653(i)) 

20 is amended by adding at the end the following: 

21 ‘‘(5) CALCULATION OF EMPLOYMENT CREDIT

22 FOR PURPOSES OF DETERMINING STATE WORK PAR23 TICIPATION RATES UNDER TANF.—The Secretary 

24 may use the information in the National Directory 
57 

•S 6 IS1S 

1 of New Hires for purposes of calculating State em2 ployment credits pursuant to section 407(b)(2).’’. 

3 (2) ELIMINATION OF CASELOAD REDUCTION

4 CREDIT.—Section 407(b) (42 U.S.C. 607(b)) is 

5 amended by striking paragraph (3) and redesig6 nating paragraphs (4) and (5) as paragraphs (3) 

7 and (4), respectively. 

8 (3) EFFECTIVE DATES.— 

9 (A) IN GENERAL.—Except as provided in 

10 subparagraphs (B) and (C), the amendments 

11 made by this subsection shall take effect on Oc12 tober 1, 2007. 

13 (B) STATE OPTION TO PHASE-IN REPLACE14 MENT OF CASELOAD REDUCTION CREDIT WITH

15 EMPLOYMENT CREDIT AND DELAY APPLICA16 BILITY OF OTHER PROVISIONS.—A State may 

17 elect to have the amendments made by this sub18 section not apply to the State program funded 

19 under part A of title IV of the Social Security 

20 Act until October 1, 2008, and if the State 

21 makes the election, then, in determining the 

22 participation rate of the State for purposes of 

23 section 407 of the Social Security Act for fiscal 

year 2008, the State shall be credited with 1 24 ⁄2

25 of the reduction in the rate that would other-
58 

•S 6 IS1S 

1 wise result from applying section 407(b)(2) of 

2 the Social Security Act (as added by paragraph 

(1)(A)) to the State for fiscal year 2008 and 1 3 ⁄2

4 of the reduction in the rate that would other5 wise result from applying section 407(b)(3) of 

6 the Social Security Act (as in effect with re7 spect to fiscal year 2005) to the State for fiscal 

8 year 2008. 

9 (C) AUTHORITY TO USE INFORMATION IN

10 THE NATIONAL DIRECTORY OF NEW HIRES.— 

11 The amendment made by paragraph (1)(B) 

12 shall take effect on October 1, 2005. 

13 (e) STATE OPTIONS FOR PARTICIPATION REQUIRE14 MENT EXEMPTIONS.—Section 407(b)(4) (42 U.S.C. 

15 607(b)(4)), as amended by subsection (a)(1)(B)(iii) and 

16 redesignated by subsection (d)(2), is amended to read as 

17 follows: 

18 ‘‘(4) STATE OPTIONS FOR PARTICIPATION RE19 QUIREMENT EXEMPTIONS.—At the option of a State, 

20 a State may, on a case-by-case basis— 

21 ‘‘(A) not include a family in the determina22 tion of the monthly participation rate for the 

23 State in the first month for which the family 

24 receives assistance from the State program 
59 

•S 6 IS1S 

1 funded under this part on the basis of the most 

2 recent application for such assistance; or 

3 ‘‘(B) not require a family in which the 

4 youngest child has not attained 12 months of 

5 age to engage in work, and may disregard that 

6 family in determining the minimum participa7 tion rate under subsection (a) for the State for 

8 not more than 12 months.’’. 

9 (f) DETERMINATION OF COUNTABLE HOURS EN10 GAGED IN WORK.— 

11 (1) IN GENERAL.—Section 407(c) (42 U.S.C. 

12 607(c)) is amended to read as follows: 

13 ‘‘(c) DETERMINATION OF COUNTABLE HOURS EN14 GAGED IN WORK.— 

15 ‘‘(1) SINGLE PARENT OR RELATIVE WITH A

16 CHILD OVER AGE 6.— 

17 ‘‘(A) MINIMUM AVERAGE NUMBER OF

18 HOURS PER WEEK.—Subject to the succeeding 

19 paragraphs of this subsection, a family in which 

20 an adult recipient or minor child head of house21 hold in the family is participating in work ac22 tivities described in subsection (d) shall be 

23 treated as engaged in work for purposes of de24 termining monthly participation rates under 

25 subsection (b)(1)(B)(i) as follows: 
60 

•S 6 IS1S 

1 ‘‘(i) In the case of a family in which 

2 the total number of hours in which any 

3 adult recipient or minor child head of 

4 household in the family is participating in 

5 such work activities for an average of at 

6 least 20, but less than 24, hours per week 

7 in a month, as 0.675 of a family. 

8 ‘‘(ii) In the case of a family in which 

9 the total number of hours in which any 

10 adult recipient or minor child head of 

11 household in the family is participating in 

12 such work activities for an average of at 

13 least 24, but less than 30, hours per week 

14 in a month, as 0.75 of a family. 

15 ‘‘(iii) In the case of a family in which 

16 the total number of hours in which any 

17 adult recipient or minor child head of 

18 household in the family is participating in 

19 such work activities for an average of at 

20 least 30, but less than 34, hours per week 

21 in a month, as 0.875 of a family. 

22 ‘‘(iv) In the case of a family in which 

23 the total number of hours in which any 

24 adult recipient or minor child head of 

25 household in the family is participating in 
61 

•S 6 IS1S 

1 such work activities for an average of at 

2 least 34, but less than 35, hours per week 

3 in a month, as 1 family. 

4 ‘‘(v) In the case of a family in which 

5 the total number of hours in which any 

6 adult recipient or minor child head of 

7 household in the family is participating in 

8 such work activities for an average of at 

9 least 35, but less than 38, hours per week 

10 in a month, as 1.05 families. 

11 ‘‘(vi) In the case of a family in which 

12 the total number of hours in which any 

13 adult recipient or minor child head of 

14 household in the family is participating in 

15 such work activities for an average of at 

16 least 38 hours per week in a month, as 

17 1.08 families. 

18 ‘‘(B) DIRECT WORK ACTIVITIES REQUIRED

19 FOR AN AVERAGE OF 24 HOURS PER WEEK.— 

20 Except as provided in subparagraph (C)(i), a 

21 State may not count any hours of participation 

22 in work activities specified in paragraph (9), 

23 (10), or (11) of subsection (d) of any adult re24 cipient or minor child head of household in a 

25 family before the total number of hours of par-
62 

•S 6 IS1S 

1 ticipation by any adult recipient or minor child 

2 head of household in the family in work activi3 ties described in paragraph (1), (2), (3), (4), 

4 (5), (6), (7), (8), or (12) of subsection (d) for 

5 the family for the month averages at least 24 

6 hours per week. 

7 ‘‘(C) STATE FLEXIBILITY TO COUNT PAR8 TICIPATION IN CERTAIN ACTIVITIES.— 

9 ‘‘(i) QUALIFIED ACTIVITIES FOR 3- 

10 MONTHS IN ANY 24-MONTH PERIOD.— 

11 ‘‘(I) 24-HOURS PER WEEK RE12 QUIRED.—Subject to subclauses (III) 

13 and (IV), for purposes of determining 

14 hours under subparagraph (A), a 

15 State may count the total number of 

16 hours any adult recipient or minor 

17 child head of household in a family 

18 engages in qualified activities de19 scribed in subclause (II) as a work ac20 tivity described in subsection (d), 

21 without regard to whether the recipi22 ent has satisfied the requirement of 

23 subparagraph (B), but only if— 

24 ‘‘(aa) the total number of 

25 hours of participation in such 
63 

•S 6 IS1S 

1 qualified activities for the family 

2 for the month average at least 24 

3 hours per week; and 

4 ‘‘(bb) engaging in such 

5 qualified activities is a require6 ment of the family self-suffi7 ciency plan. 

8 ‘‘(II) QUALIFIED ACTIVITIES DE9 SCRIBED.—For purposes of subclause 

10 (I), qualified activities described in 

11 this subclause are any of the fol12 lowing: 

13 ‘‘(aa) Postsecondary edu14 cation. 

15 ‘‘(bb) Adult literacy pro16 grams or activities. 

17 ‘‘(cc) Substance abuse coun18 seling or treatment. 

19 ‘‘(dd) Programs or activities 

20 designed to remove barriers to 

21 work, as defined by the State. 

22 ‘‘(ee) Work activities author23 ized under any waiver for any 

24 State that was continued under 

25 section 415 before the date of en-
64 

•S 6 IS1S 

1 actment of the Personal Respon2 sibility and Individual Develop3 ment for Everyone Act. 

4 ‘‘(III) LIMITATION.—Except as 

5 provided in clause (ii), subclause (I) 

6 shall not apply to a family for more 

7 than 3 months in any period of 24 

8 consecutive months. 

9 ‘‘(IV) CERTAIN ACTIVITIES.— 

10 The Secretary may allow a State to 

11 count the total hours of participation 

12 in qualified activities described in sub13 clause (II) for an adult recipient or 

14 minor child head of household without 

15 regard to the minimum 24 hour aver16 age per week of participation require17 ment under subclause (I) if the State 

18 has demonstrated conclusively that 

19 such activity is part of a substantial 

20 and supervised program whose effec21 tiveness in moving families to self-suf22 ficiency is superior to any alternative 

23 activity and the effectiveness of the 

24 program in moving families to self25 sufficiency would be substantially im-
65 

•S 6 IS1S 

1 paired if participating individuals par2 ticipated in additional, concurrent 

3 qualified activities that enabled the in4 dividuals to achieve an average of at 

5 least 24 hours per week of participa6 tion. 

7 ‘‘(ii) ADDITIONAL 3-MONTH PERIOD

8 PERMITTED FOR CERTAIN ACTIVITIES.— 

9 ‘‘(I) SELF-SUFFICIENCY PLAN

10 REQUIREMENT COMBINED WITH MIN11 IMUM NUMBER OF HOURS.—A State 

12 may extend the 3-month period under 

13 clause (i) for an additional 3 months 

14 in the same period of 24 consecutive 

15 months in the case of an adult recipi16 ent or minor child head of household 

17 who is receiving qualified rehabilita18 tive services described in subclause 

19 (II) if— 

20 ‘‘(aa) the total number of 

21 hours that the adult recipient or 

22 minor child head of household 

23 engages in such qualified reha24 bilitative services and, subject to 

25 subclause (III), a work activity 
66 

•S 6 IS1S 

1 described in paragraph (1), (2), 

2 (3), (4), (5), (6), (7), (8), or (12) 

3 of subsection (d) for the month 

4 average at least 24 hours per 

5 week; and 

6 ‘‘(bb) engaging in such 

7 qualified rehabilitative services is 

8 a requirement of the family self9 sufficiency plan. 

10 ‘‘(II) QUALIFIED REHABILITA11 TIVE SERVICES DESCRIBED.—For 

12 purposes of subclause (I), qualified re13 habilitative services described in this 

14 subclause are any of the following: 

15 ‘‘(aa) Adult literacy pro16 grams or activities. 

17 ‘‘(bb) Participation in a pro18 gram designed to increase pro19 ficiency in the English language. 

20 ‘‘(cc) In the case of an adult 

21 recipient or minor child head of 

22 household who has been certified 

23 by a qualified medical, mental 

24 health, or social services profes25 sional (as defined by the State) 
67 

•S 6 IS1S 

1 as having a physical or mental 

2 disability, substance abuse prob3 lem, or other problem that re4 quires a rehabilitative service, 

5 substance abuse treatment, or 

6 mental health treatment, the 

7 service or treatment determined 

8 necessary by the professional. 

9 ‘‘(III) NONAPPLICATION OF LIMI10 TATIONS ON JOB SEARCH AND VOCA11 TIONAL EDUCATIONAL TRAINING.—An 

12 adult recipient or minor child head of 

13 household who is receiving qualified 

14 rehabilitative services described in 

15 subclause (II) may engage in a work 

16 activity described in paragraph (6) or 

17 (8) of subsection (d) for purposes of 

18 satisfying the minimum 24 hour aver19 age per week of participation require20 ment under subclause (I)(aa) without 

21 regard to any limit that otherwise ap22 plies to the activity (including the 30 

23 percent limitation on participation in 

24 vocational educational training under 

25 paragraph (6)(C)). 
68 

•S 6 IS1S 

1 ‘‘(iii) HOURS IN EXCESS OF AN AVER2 AGE OF 24 WORK ACTIVITY HOURS PER

3 WEEK.—If the total number of hours that 

4 any adult recipient or minor child head of 

5 household in a family has participated in a 

6 work activity described in paragraph (1), 

7 (2), (3), (4), (5), (6), (7), (8), or (12) of 

8 subsection (d) averages at least 24 hours 

9 per week in a month, a State, for purposes 

10 of determining hours under subparagraph 

11 (A), may count any hours an adult recipi12 ent or minor child head of household in the 

13 family engages in— 

14 ‘‘(I) any work activity described 

15 in subsection (d), without regard to 

16 any limit that otherwise applies to the 

17 activity (including the 30 percent limi18 tation on participation in vocational 

19 educational training under paragraph 

20 (6)(C)); and 

21 ‘‘(II) any qualified activity de22 scribed in clause (i)(II), as a work ac23 tivity described in subsection (d). 

24 ‘‘(2) SINGLE PARENT OR RELATIVE WITH A

25 CHILD UNDER AGE 6.— 
69 

•S 6 IS1S 

1 ‘‘(A) IN GENERAL.—A family in which an 

2 adult recipient or minor child head of household 

3 in the family is the only parent or caretaker rel4 ative in the family of a child who has not at5 tained 6 years of age and who is participating 

6 in work activities described in subsection (d) 

7 shall be treated as engaged in work for pur8 poses of determining monthly participation 

9 rates under subsection (b)(1)(B)(i) as follows: 

10 ‘‘(i) In the case of such a family in 

11 which the total number of hours in which 

12 the adult recipient or minor child head of 

13 household in the family is participating in 

14 such work activities for an average of at 

15 least 20, but less than 24, hours per week 

16 in a month, as 0.675 of a family. 

17 ‘‘(ii) In the case of such a family in 

18 which the total number of hours in which 

19 the adult recipient or minor child head of 

20 household in the family is participating in 

21 such work activities for an average of at 

22 least 24, but less than 35, hours per week 

23 in a month, as 1 family. 

24 ‘‘(iii) In the case of such a family in 

25 which the total number of hours in which 
70 

•S 6 IS1S 

1 the adult recipient or minor child head of 

2 household in the family is participating in 

3 such work activities for an average of at 

4 least 35, but less than 38, hours per week 

5 in a month, as 1.05 families. 

6 ‘‘(iv) In the case of such a family in 

7 which the total number of hours in which 

8 the adult recipient or minor child head of 

9 household in the family is participating in 

10 such work activities for an average of at 

11 least 38 hours per week in a month, as 

12 1.08 families. 

13 ‘‘(B) APPLICATION OF RULES REGARDING

14 DIRECT WORK ACTIVITIES AND STATE FLEXI15 BILITY TO COUNT PARTICIPATION IN CERTAIN

16 ACTIVITIES.—Subparagraphs (B) and (C) of 

17 paragraph (1) apply to a family described in 

18 subparagraph (A) in the same manner as such 

19 subparagraphs apply to a family described in 

20 paragraph (1)(A). 

21 ‘‘(3) 2-PARENT FAMILIES.— 

22 ‘‘(A) IN GENERAL.—Subject to paragraph 

23 (6)(A), a 2-parent family in which an adult re24 cipient or minor child head of household in the 

25 family is participating in work activities de-
71 

•S 6 IS1S 

1 scribed in subsection (d) shall be treated as en2 gaged in work for purposes of determining 

3 monthly participation rates under subsection 

4 (b)(1)(B)(i) as follows: 

5 ‘‘(i) In the case of such a family in 

6 which the total number of hours in which 

7 any adult recipient or minor child head of 

8 household in the family is participating in 

9 such work activities for an average of at 

10 least 26, but less than 30, hours per week 

11 in a month, as 0.675 of a family. 

12 ‘‘(ii) In the case of such a family in 

13 which the total number of hours in which 

14 any adult recipient or minor child head of 

15 household in the family is participating in 

16 such work activities for an average of at 

17 least 30, but less than 35, hours per week 

18 in a month, as 0.75 of a family. 

19 ‘‘(iii) In the case of such a family in 

20 which the total number of hours in which 

21 any adult recipient or minor child head of 

22 household in the family is participating in 

23 such work activities for an average of at 

24 least 35, but less than 39, hours per week 

25 in a month, as 0.875 of a family. 
72 

•S 6 IS1S 

1 ‘‘(iv) In the case of such a family in 

2 which the total number of hours in which 

3 any adult recipient or minor child head of 

4 household in the family is participating in 

5 such work activities for an average of at 

6 least 39, but less than 40, hours per week 

7 in a month, as 1 family. 

8 ‘‘(v) In the case of such a family in 

9 which the total number of hours in which 

10 any adult recipient or minor child head of 

11 household in the family is participating in 

12 such work activities for an average of at 

13 least 40, but less than 43, hours per week 

14 in a month, as 1.05 families. 

15 ‘‘(vi) In the case of such a family in 

16 which the total number of hours in which 

17 any adult recipient or minor child head of 

18 household in the family is participating in 

19 such work activities for an average of at 

20 least 43 hours per week in a month, as 

21 1.08 families. 

22 ‘‘(B) APPLICATION OF RULES REGARDING

23 DIRECT WORK ACTIVITIES AND STATE FLEXI24 BILITY TO COUNT PARTICIPATION IN CERTAIN

25 ACTIVITIES.—Subparagraphs (B) and (C) of 
73 

•S 6 IS1S 

1 paragraph (1) apply to a 2-parent family de2 scribed in subparagraph (A) in the same man3 ner as such subparagraphs apply to a family 

4 described in paragraph (1)(A), except that sub5 paragraph (B) of paragraph (1) shall be applied 

6 to a such a 2-parent family by substituting ‘34’ 

7 for ‘24’ each place it appears. 

8 ‘‘(4) 2-PARENT FAMILIES THAT RECEIVE FED9 ERALLY FUNDED CHILD CARE.— 

10 ‘‘(A) IN GENERAL.—Subject to paragraph 

11 (6)(A), if a 2-parent family receives federally 

12 funded child care assistance, an adult recipient 

13 or minor child head of household in the family 

14 participating in work activities described in sub15 section (d) shall be treated as engaged in work 

16 for purposes of determining monthly participa17 tion rates under subsection (b)(1)(B)(i) as fol18 lows: 

19 ‘‘(i) In the case of such a family in 

20 which the total number of hours in which 

21 any adult recipient or minor child head of 

22 household in the family is participating in 

23 such work activities for an average of at 

24 least 40, but less than 45, hours per week 

25 in a month, as 0.675 of a family. 
74 

•S 6 IS1S 

1 ‘‘(ii) In the case of such a family in 

2 which the total number of hours in which 

3 any adult recipient or minor child head of 

4 household in the family is participating in 

5 such work activities for an average of at 

6 least 45, but less than 51, hours per week 

7 in a month, as 0.75 of a family. 

8 ‘‘(iii) In the case of such a family in 

9 which the total number of hours in which 

10 any adult recipient or minor child head of 

11 household in the family is participating in 

12 such work activities for an average of at 

13 least 51, but less than 55, hours per week 

14 in a month, as 0.875 of a family. 

15 ‘‘(iv) In the case of such a family in 

16 which the total number of hours in which 

17 any adult recipient or minor child head of 

18 household in the family is participating in 

19 such work activities for an average of at 

20 least 55, but less than 56, hours per week 

21 in a month, as 1 family. 

22 ‘‘(v) In the case of such a family in 

23 which the total number of hours in which 

24 any adult recipient or minor child head of 

25 household in the family is participating in 
75 

•S 6 IS1S 

1 such work activities for an average of at 

2 least 56, but less than 59, hours per week 

3 in a month, as 1.05 families. 

4 ‘‘(vi) In the case of such a family in 

5 which the total number of hours in which 

6 any adult recipient or minor child head of 

7 household in the family is participating in 

8 such work activities for an average of at 

9 least 59 hours per week in a month, as 

10 1.08 families. 

11 ‘‘(B) APPLICATION OF RULES REGARDING

12 DIRECT WORK ACTIVITIES AND STATE FLEXI13 BILITY TO COUNT PARTICIPATION IN CERTAIN

14 ACTIVITIES.—Subparagraphs (B) and (C) of 

15 paragraph (1) apply to a 2-parent family de16 scribed in subparagraph (A) in the same man17 ner as such subparagraphs apply to a family 

18 described in paragraph (1)(A), except that sub19 paragraph (B) of paragraph (1) shall be applied 

20 to a such a 2-parent family by substituting ‘50’ 

21 for ‘24’ each place it appears. 

22 ‘‘(5) CALCULATION OF HOURS PER WEEK.— 

23 The number of hours per week that a family is en24 gaged in work is the quotient of— 
76 

•S 6 IS1S 

1 ‘‘(A) the total number of hours per month 

2 that the family is engaged in work; divided by 

3 ‘‘(B) 4. 

4 ‘‘(6) SPECIAL RULES.— 

5 ‘‘(A) FAMILY WITH A DISABLED PARENT

6 NOT TREATED AS A 2-PARENT FAMILY.—A fam7 ily that includes a disabled parent shall not be 

8 considered a 2-parent family for purposes of 

9 paragraph (3) or (4). 

10 ‘‘(B) NUMBER OF WEEKS FOR WHICH JOB

11 SEARCH COUNTS AS WORK.—An individual shall 

12 not be considered to be engaged in work for a 

13 month by virtue of participation in an activity 

14 described in subsection (d)(6) of a State pro15 gram funded under this part, after the indi16 vidual has participated in such an activity for 

17 6 weeks (or, if the unemployment rate of the 

18 State is at least 50 percent greater than the 

19 unemployment rate of the United States, or the 

20 State meets the criteria of subclause (I), (II), 

21 or (III) of section 403(b)(3)(A)(iii) or satisfies 

22 the applicable duration requirement of section 

23 403(b)(3)(B)), 12 weeks). 

24 ‘‘(C) SINGLE TEEN HEAD OF HOUSEHOLD

25 OR MARRIED TEEN WHO MAINTAINS SATISFAC-
77 

•S 6 IS1S 

1 TORY SCHOOL ATTENDANCE DEEMED TO COUNT

2 AS 1 FAMILY.—For purposes of determining 

3 hours under the preceding paragraphs of this 

4 subsection, with respect to a month, a State 

5 shall count a recipient who is married or a head 

6 of household and who has not attained 20 years 

7 of age as 1 family if the recipient— 

8 ‘‘(i) maintains satisfactory attendance 

9 at secondary school or the equivalent dur10 ing the month; or 

11 ‘‘(ii) participates in education directly 

12 related to employment for an average of at 

13 least 20 hours per week during the month. 

14 ‘‘(D) LIMITATION ON NUMBER OF PER15 SONS WHO MAY BE TREATED AS ENGAGED IN

16 WORK BY REASON OF PARTICIPATION IN EDU17 CATIONAL ACTIVITIES.—Except as provided in 

18 paragraph (1)(C)(ii)(I), for purposes of sub19 section (b)(1)(B)(i), not more than 30 percent 

20 of the number of individuals in all families in 

21 a State who are treated as engaged in work for 

22 a month may consist of individuals who are— 

23 ‘‘(i) determined (without regard to in24 dividuals participating in a program estab25 lished under section 404(l)) to be engaged 
78 

•S 6 IS1S 

1 in work for the month by reason of partici2 pation in vocational educational training 

3 (but only with respect to such training that 

4 does not exceed 12 months with respect to 

5 any individual); or 

6 ‘‘(ii) deemed to be engaged in work 

7 for the month by reason of subparagraph 

8 (C) of this paragraph. 

9 ‘‘(E) STATE OPTION TO DEEM SINGLE

10 PARENT CARING FOR A CHILD OR ADULT DE11 PENDENT FOR CARE WITH A PHYSICAL OR

12 MENTAL IMPAIRMENT TO BE MEETING ALL OR

13 PART OF A FAMILY’S WORK PARTICIPATION RE14 QUIREMENTS FOR A MONTH.— 

15 ‘‘(i) IN GENERAL.—A State may 

16 count the number of hours per week that 

17 an adult recipient or minor child head of 

18 household who is the only parent or care19 taker relative for a child or adult depend20 ent for care with a physical or mental im21 pairment engages in providing substantial 

22 ongoing care for such child or adult de23 pendent for care if the State determines 

24 that— 
79 

•S 6 IS1S 

1 ‘‘(I) the child or adult dependent 

2 for care has been verified through a 

3 medically acceptable clinical or diag4 nostic technique as having a signifi5 cant physical or mental impairment or 

6 combination of impairments that re7 quire substantial ongoing care; 

8 ‘‘(II) the adult recipient or minor 

9 child head of household providing 

10 such care is the most appropriate 

11 means, as determined by the State, by 

12 which such care can be provided to 

13 the child or adult dependent for care; 

14 ‘‘(III) for each month in which 

15 this subparagraph applies to the adult 

16 recipient or minor child head of 

17 household, the adult recipient or 

18 minor child head of household is in 

19 compliance with the requirements of 

20 the family’s self-sufficiency plan; and 

21 ‘‘(IV) the recipient is unable to 

22 participate fully in work activities, 

23 after consideration of whether there 

24 are supports accessible and available 
80 

•S 6 IS1S 

1 to the family for the care of the child 

2 or adult dependent for care. 

3 ‘‘(ii) TOTAL NUMBER OF HOURS LIM4 ITED TO BEING COUNTED AS 1 FAMILY.— 

5 In no event may a family that includes a 

6 recipient to which clause (i) applies be 

7 counted as more than 1 family for pur8 poses of determining monthly participation 

9 rates under subsection (b)(1)(B)(i). 

10 ‘‘(iii) STATE REQUIREMENTS.—In the 

11 case of a recipient to which clause (i) ap12 plies, the State shall— 

13 ‘‘(I) conduct regular, periodic 

14 evaluations of the family of the adult 

15 recipient or minor child head of 

16 household; and 

17 ‘‘(II) include as part of the fam18 ily’s self-sufficiency plan, regular up19 dates on what special needs of the 

20 child or the adult dependent for care, 

21 including substantial ongoing care, 

22 could be accommodated either by indi23 viduals other than the adult recipient 

24 or minor child head of household out25 side of the home. 
81 

•S 6 IS1S 

1 ‘‘(iv) RULE OF CONSTRUCTION.— 

2 Nothing in this subparagraph shall be con3 strued as prohibiting a State from includ4 ing in a recipient’s self-sufficiency plan a 

5 requirement to engage in work activities 

6 described in subsection (d). 

7 ‘‘(F) OPTIONAL MODIFICATION OF WORK

8 REQUIREMENTS FOR RECIPIENTS RESIDING IN

9 AREAS OF INDIAN COUNTRY OR AN ALASKAN

10 NATIVE VILLAGE WITH HIGH JOBLESSNESS.—If 

11 a State has included in the State plan a de12 scription of the State’s policies in areas of In13 dian country or an Alaskan Native village de14 scribed in section 408(a)(7)(D), the State may 

15 define the activities that the State will treat as 

16 being work activities described in subsection (d) 

17 that a recipient who resides in such an area and 

18 who is participating in such activities in accord19 ance with a self-sufficiency plan under section 

20 408(b) may engage in for purposes of satisfying 

21 work requirements under the State program 

22 and for purposes of determining monthly par23 ticipation rates under subsection (b)(1)(B)(i).’’. 

24 (2) CONFORMING AMENDMENT RELATING TO

25 AUTHORITY TO DEEM SINGLE PARENT OF A CHILD
82 

•S 6 IS1S 

1 OR ADULT DEPENDENT FOR CARE WITH A PHYSICAL

2 OR MENTAL IMPAIRMENT DEEMED TO BE MEETING

3 ALL OR PART OF A FAMILY’S WORK PARTICIPATION

4 REQUIREMENTS FOR A MONTH.—Section 

5 402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as amended 

6 by section 211(a)(1)(B), is amended by adding at 

7 the end the following: 

8 ‘‘(vi) The document shall set forth the 

9 criteria for applying section 407(c)(6)(E) 

10 to an adult recipient or minor child head 

11 of household who is the only parent or 

12 caretaker relative for a child or adult de13 pendent for care.’’. 

14 SEC. 220. UNIVERSAL ENGAGEMENT AND FAMILY SELF15 SUFFICIENCY PLAN REQUIREMENTS; OTHER 

16 PROHIBITIONS AND REQUIREMENTS. 

17 (a) UNIVERSAL ENGAGEMENT AND FAMILY SELF18 SUFFICIENCY PLAN REQUIREMENTS.— 

19 (1) MODIFICATION OF STATE PLAN REQUIRE20 MENTS.—Section 402(a)(1)(A) (42 U.S.C. 

21 602(a)(1)(A)) is amended by striking clauses (ii) 

22 and (iii) and inserting the following: 

23 ‘‘(ii) Require a parent or caretaker re24 ceiving assistance under the program to 

25 engage in work or alternative self-suffi-
83 

•S 6 IS1S 

1 ciency activities (as defined by the State), 

2 consistent with section 407(e)(2). 

3 ‘‘(iii) Require families receiving assist4 ance under the program to engage in ac5 tivities in accordance with family self-suffi6 ciency plans developed pursuant to section 

7 408(b).’’. 

8 (2) ESTABLISHMENT OF FAMILY SELF-SUFFI9 CIENCY PLANS.— 

10 (A) IN GENERAL.—Section 408(b) (42 

11 U.S.C. 608(b)) is amended to read as follows: 

12 ‘‘(b) FAMILY SELF-SUFFICIENCY PLANS.— 

13 ‘‘(1) IN GENERAL.—A State to which a grant 

14 is made under section 403 shall— 

15 ‘‘(A) make an initial screening and assess16 ment, in the manner deemed appropriate by the 

17 State, of the skills, prior work experience, edu18 cation obtained, work readiness, barriers to 

19 work, and employability of each adult or minor 

20 child head of household recipient of assistance 

21 in the family who— 

22 ‘‘(i) has attained age 18; or 

23 ‘‘(ii) has not completed high school or 

24 obtained a certificate of high school equiva-
84 

•S 6 IS1S 

1 lency and is not attending secondary 

2 school; 

3 ‘‘(B) assess, in the manner deemed appro4 priate by the State, the work support and other 

5 assistance and family support services for which 

6 each family receiving assistance is eligible; and 

7 ‘‘(C) assess, in the manner deemed appro8 priate by the State, the well-being of the chil9 dren in the family, and, where appropriate, ac10 tivities or resources to improve the well-being of 

11 the children. 

12 ‘‘(2) CONTENTS OF PLANS.—The State shall, in 

13 the manner deemed appropriate by the State— 

14 ‘‘(A) establish for each family that includes 

15 an individual described in paragraph (1)(A), in 

16 consultation as the State deems appropriate 

17 with the individual, a self-sufficiency plan 

18 that— 

19 ‘‘(i) specifies activities described in 

20 the State plan submitted pursuant to sec21 tion 402, including work activities de22 scribed in paragraph (1), (2), (3), (4), (5), 

23 (6), (7), (8), or (12) of section 407(d), as 

24 appropriate; 
85 

•S 6 IS1S 

1 ‘‘(ii) is designed to assist the family in 

2 achieving their maximum degree of self3 sufficiency, and 

4 ‘‘(iii) provides for the ongoing partici5 pation of the individual in the activities 

6 specified in the plan; 

7 ‘‘(B) requires, at a minimum, each such 

8 individual to participate in activities in accord9 ance with the self-sufficiency plan; 

10 ‘‘(C) sets forth the appropriate supportive 

11 services the State intends to provide for the 

12 family; 

13 ‘‘(D) establishes for the family a plan that 

14 addresses the issue of child well-being and, 

15 when appropriate, adolescent well-being, and 

16 that may include services such as domestic vio17 lence counseling, mental health referrals, and 

18 parenting courses; and 

19 ‘‘(E) includes a section designed to assist 

20 the family by informing the family, in such 

21 manner as deemed appropriate by the State, of 

22 the work support and other assistance for which 

23 the family may be eligible including (but not 

24 limited to)— 
86 

•S 6 IS1S 

1 ‘‘(i) the food stamp program estab2 lished under the Food Stamp Act of 1977 

3 (7 U.S.C. 2011 et seq.); 

4 ‘‘(ii) the medicaid program funded 

5 under title XIX; 

6 ‘‘(iii) the State children’s health in7 surance program funded under title XXI; 

8 ‘‘(iv) Federal or State funded child 

9 care, including child care funded under the 

10 Child Care Development Block Grant Act 

11 of 1990 (42 U.S.C. 9858 et seq.) and 

12 funds made available under this title or 

13 title XX; 

14 ‘‘(v) the earned income tax credit 

15 under section 32 of the Internal Revenue 

16 Code of 1986; 

17 ‘‘(vi) the low-income home energy as18 sistance program established under the 

19 Low-Income Home Energy Assistance Act 

20 of 1981 (42 U.S.C. 8621 et seq.); 

21 ‘‘(vii) the special supplemental nutri22 tion program for women, infants, and chil23 dren established under section 17 of the 

24 Child Nutrition Act of 1966 (42 U.S.C. 

25 1786); 
87 

•S 6 IS1S 

1 ‘‘(viii) programs conducted under the 

2 Workforce Investment Act of 1998 (29 

3 U.S.C. 2801 et seq.); and 

4 ‘‘(ix) low-income housing assistance 

5 programs. 

6 ‘‘(3) REVIEW.— 

7 ‘‘(A) REGULAR REVIEW.—A State to which 

8 a grant is made under section 403 shall— 

9 ‘‘(i) monitor the participation of each 

10 adult recipient or minor child head of 

11 household in the activities specified in the 

12 self-sufficiency plan, and regularly review 

13 the progress of the family toward self-suffi14 ciency; and 

15 ‘‘(ii) upon such a review, revise the 

16 plan and activities required under the plan 

17 as the State deems appropriate in con18 sultation with the family. 

19 ‘‘(B) PRIOR TO THE IMPOSITION OF A

20 SANCTION.—Prior to imposing a sanction 

21 against an adult recipient, minor child head of 

22 household, or a family for failure to comply 

23 with a requirement of the self-sufficiency plan 

24 or the State program funded under this part, 
88 

•S 6 IS1S 

1 the State shall, to the extent determined appro2 priate by the State— 

3 ‘‘(i) review the self-sufficiency plan; 

4 and 

5 ‘‘(ii) make a good faith effort (as de6 fined by the State) to consult with the 

7 family. 

8 ‘‘(4) STATE DISCRETION.—A State shall have 

9 sole discretion, consistent with section 407, to define 

10 and design activities for families for purposes of this 

11 subsection, to develop methods for monitoring and 

12 reviewing progress pursuant to this subsection, and 

13 to make modifications to the plan as the State 

14 deems appropriate to assist the individual in increas15 ing their degree of self-sufficiency. 

16 ‘‘(5) APPLICATION TO PARTIALLY-SANCTIONED

17 FAMILIES.—The requirements of this subsection 

18 shall apply in the case of a family that includes an 

19 adult or minor child head of household recipient of 

20 assistance who is subject to a partial sanction. 

21 ‘‘(6) TIMING.—The State shall initiate screen22 ing and assessment and the establishment of a fam23 ily self-sufficiency plan in accordance with the re24 quirements of this subsection— 
89 

•S 6 IS1S 

1 ‘‘(A) in the case of a family that, as of the 

2 date of enactment of the Personal Responsi3 bility and Individual Development for Everyone 

4 Act, is not receiving assistance from the State 

5 program funded under this part, not later than 

6 the later of— 

7 ‘‘(i) 1 year after such date of enact8 ment; or 

9 ‘‘(ii) 60 days after the family first re10 ceives assistance on the basis of the most 

11 recent application for assistance; and 

12 ‘‘(B) in the case of a family that, as of 

13 such date, is receiving assistance under the 

14 State program funded under this part, not later 

15 than 1 year after such date of enactment. 

16 ‘‘(7) RULE OF INTERPRETATION.—Nothing in 

17 this subsection shall preclude a State from— 

18 ‘‘(A) requiring participation in work and 

19 any other activities the State deems appropriate 

20 for helping families achieve self-sufficiency and 

21 improving child well-being; or 

22 ‘‘(B) using job search or other appropriate 

23 job readiness or work activities to assess the 

24 employability of individuals and to determine 

25 appropriate future engagement activities.’’. 
90 

•S 6 IS1S 

1 (B) PENALTY FOR FAILURE TO COMPLY

2 WITH FAMILY SELF-SUFFICIENCY PLAN RE3 QUIREMENTS.— 

4 (i) IN GENERAL.—Section 409(a)(3) 

5 (42 U.S.C. 609(a)(3)) is amended— 

6 (I) in the paragraph heading, by 

7 inserting ‘‘OR COMPLY WITH FAMILY

8 SELF-SUFFICIENCY PLAN REQUIRE9 MENTS’’ after ‘‘RATES’’; 

10 (II) in subparagraph (A), by in11 serting ‘‘or 408(b)’’ after ‘‘407(a)’’; 

12 and 

13 (III) by striking subparagraph 

14 (C) and inserting the following: 

15 ‘‘(C) PENALTY BASED ON SEVERITY OF

16 FAILURE.— 

17 ‘‘(i) FAILURE TO SATISFY MINIMUM

18 PARTICIPATION RATE.—If, with respect to 

19 fiscal year 2007 or any fiscal year there20 after, the Secretary finds that a State has 

21 failed or is failing to substantially comply 

22 with the requirements of section 407(a) for 

23 that fiscal year, the Secretary shall impose 

24 reductions under subparagraph (A) with 

25 respect to the immediately succeeding fis-
91 

•S 6 IS1S 

1 cal year based on the degree of substantial 

2 noncompliance. In assessing the degree of 

3 substantial noncompliance under section 

4 407(a) for a fiscal year, the Secretary shall 

5 take into account factors such as— 

6 ‘‘(I) the degree to which the 

7 State missed the minimum participa8 tion rate for that fiscal year; 

9 ‘‘(II) the change in the number 

10 of individuals who are engaged in 

11 work in the State since the prior fiscal 

12 year; and 

13 ‘‘(III) the number of consecutive 

14 fiscal years in which the State failed 

15 to reach the minimum participation 

16 rate. 

17 ‘‘(ii) FAILURE TO COMPLY WITH

18 SELF-SUFFICIENCY PLAN REQUIRE19 MENTS.—If, with respect to fiscal year 

20 2007 or any fiscal year thereafter, the Sec21 retary finds that a State has failed or is 

22 failing to substantially comply with the re23 quirements of section 408(b) for that fiscal 

24 year, the Secretary shall impose reductions 

25 under subparagraph (A) with respect to 
92 

•S 6 IS1S 

1 the immediately succeeding fiscal year 

2 based on the degree of substantial non3 compliance. In assessing the degree of sub4 stantial noncompliance under section 

5 408(b), the Secretary shall take into ac6 count factors such as— 

7 ‘‘(I) the number or percentage of 

8 families for which a self-sufficiency 

9 plan is not established in a timely 

10 fashion for that fiscal year; 

11 ‘‘(II) the duration of the delays 

12 in establishing a self-sufficiency plan 

13 during that fiscal year; 

14 ‘‘(III) whether the failures are 

15 isolated and nonrecurring; and 

16 ‘‘(IV) the existence of systems 

17 designed to ensure that self-suffi18 ciency plans are established for all 

19 families in a timely fashion and that 

20 families’ progress under such plans is 

21 monitored. 

22 ‘‘(iii) AUTHORITY TO REDUCE THE

23 PENALTY.—The Secretary may reduce the 

24 penalty that would otherwise apply under 

25 this paragraph if the substantial non-
93 

•S 6 IS1S 

1 compliance is due to circumstances that 

2 caused the State to meet the criteria of 

3 subclause (I), (II), or (III) of section 

4 403(b)(3)(A)(iii) or to satisfy the applica5 ble duration requirement of section 

6 403(b)(3)(B) during the fiscal year, or if 

7 the noncompliance is due to extraordinary 

8 circumstances such as a natural disaster or 

9 regional recession. The Secretary shall pro10 vide a written report to Congress to justify 

11 any waiver or penalty reduction due to 

12 such extraordinary circumstances.’’. 

13 (ii) EFFECTIVE DATE.—The amend14 ments made by this subparagraph take ef15 fect on October 1, 2006. 

16 (3) GAO EVALUATION AND REPORT.—Not later 

17 than September 30, 2007, the Comptroller General 

18 of the United States shall submit a report to the 

19 Committee on Ways and Means of the House of 

20 Representatives and the Committee on Finance of 

21 the Senate evaluating the implementation of the uni22 versal engagement provisions under the temporary 

23 assistance to needy families program under part A 

24 of title IV of the Social Security Act (42 U.S.C. 601 
94 

•S 6 IS1S 

1 et seq.), as added by the amendments made by this 

2 subsection. 

3 (4) RULES OF CONSTRUCTION.—Nothing in 

4 this subsection or the amendments made by this 

5 subsection shall be construed— 

6 (A) as establishing a private right or cause 

7 of action against a State for failure to comply 

8 with the requirements imposed under this sub9 section or the amendments made by this sub10 section; or 

11 (B) as limiting claims that may be avail12 able under other Federal or State laws. 

13 (b) TRANSITIONAL COMPLIANCE FOR TEEN PAR14 ENTS.— 

15 (1) IN GENERAL.—Section 408(a)(5) (42 

16 U.S.C. 608(a)(5)) is amended— 

17 (A) in subparagraph (A)(i), by striking 

18 ‘‘subparagraph (B)’’ and inserting ‘‘subpara19 graphs (B) and (C)’’; and 

20 (B) by adding at the end the following: 

21 ‘‘(C) AUTHORITY TO PROVIDE TEMPORARY

22 ASSISTANCE.—A State may use any part of a 

23 grant made under section 403 to provide assist24 ance to an individual described in clause (ii) of 

25 subparagraph (A) who would otherwise be pro-
95 

•S 6 IS1S 

1 hibited from receiving such assistance under 

2 clause (i) of that subparagraph, subparagraph 

3 (B), or section 408(a)(4) for not more than a 

4 single 60-day period in order to assist the indi5 vidual in meeting the requirement of clause (i) 

6 of subparagraph (A), subparagraph (B), or sec7 tion 408(a)(4) for receipt of such assistance.’’. 

8 (2) INCLUSION OF TRANSITIONAL LIVING

9 YOUTH PROJECTS AS A FORM OF ADULT-SUPER10 VISED SETTING.—Clause (i) of section 408(a)(5)(A) 

11 (42 U.S.C. 608(a)(5)(A)(i)), as amended by para12 graph (1), is amended— 

13 (A) by striking ‘‘do not reside in a place 

14 of’’ and inserting ‘‘do not reside in a— 

15 ‘‘(I) place of’’; 

16 (B) by striking the period and inserting ‘‘; 

17 or’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(II) transitional living youth 

20 project funded under a grant made 

21 under section 321 of the Runaway 

22 and Homeless Youth Act (42 U.S.C. 

23 5714–1).’’. 
96 

•S 6 IS1S 

1 SEC. 221. PENALTIES. 

2 Section 409(a)(7) (42 U.S.C. 609(a)(7)) is amend3 ed— 

4 (1) in subparagraph (A) by striking ‘‘or 2006’’ 

5 and inserting ‘‘2006, 2007, 2008, 2009, 2010, or 

6 2011’’; and 

7 (2) in subparagraph (B)(ii)— 

8 (A) by inserting ‘‘preceding’’ before ‘‘fiscal 

9 year’’; and 

10 (B) by striking ‘‘for fiscal years 1997 

11 through 2005,’’. 

12 SEC. 222. DATA COLLECTION AND REPORTING. 

13 (a) CONTENTS OF REPORT.—Section 411(a)(1)(A) 

14 (42 U.S.C. 611(a)(1)(A)) is amended— 

15 (1) in the matter preceding clause (i), by insert16 ing ‘‘and on families receiving assistance under 

17 State programs funded with other qualified State ex18 penditures (as defined in section 409(a)(7)(B)(i))’’ 

19 before the colon; 

20 (2) in clause (vii), by inserting ‘‘and minor par21 ent’’ after ‘‘of each adult’’; 

22 (3) in clause (viii), by striking ‘‘and educational 

23 level’’; 

24 (4) in clause (ix), by striking ‘‘, and if the lat25 ter 2, the amount received’’; 

26 (5) in clause (x)— 
97 

•S 6 IS1S 

1 (A) by striking ‘‘each type of’’; and 

2 (B) by inserting before the period ‘‘and, if 

3 applicable, the reason for receipt of the assist4 ance for a total of more than 60 months’’; 

5 (6) in clause (xi), by striking subclauses (I) 

6 through (VII) and inserting the following: 

7 ‘‘(I) Subsidized private sector 

8 employment. 

9 ‘‘(II) Unsubsidized employment. 

10 ‘‘(III) Public sector employment, 

11 supervised work experience, or super12 vised community service. 

13 ‘‘(IV) On-the-job training. 

14 ‘‘(V) Job search and placement. 

15 ‘‘(VI) Training. 

16 ‘‘(VII) Education. 

17 ‘‘(VIII) Other activities directed 

18 at the purposes of this part, as speci19 fied in the State plan submitted pur20 suant to section 402.’’; 

21 (7) in clause (xii), by inserting ‘‘and progress 

22 toward universal engagement’’ after ‘‘participation 

23 rates’’; 

24 (8) in clause (xiii), by striking ‘‘type and’’ be25 fore ‘‘amount of assistance’’; 
98 

•S 6 IS1S 

1 (9) in clause (xvi), by striking subclause (II) 

2 and redesignating subclauses (III) through (V) as 

3 subclauses (II) through (IV), respectively; and 

4 (10) by adding at the end the following: 

5 ‘‘(xviii) The date the family first re6 ceived assistance from the State program 

7 on the basis of the most recent application 

8 for such assistance. 

9 ‘‘(xix) Whether a self-sufficiency plan 

10 is established for the family in accordance 

11 with section 408(b). 

12 ‘‘(xx) With respect to any child in the 

13 family, the marital status of the parents at 

14 the birth of the child, and if the parents 

15 were not then married, whether the pater16 nity of the child has been established.’’. 

17 (b) USE OF SAMPLES.—Section 411(a)(1)(B) (42 

18 U.S.C. 611(a)(1)(B)) is amended— 

19 (1) in clause (i)— 

20 (A) by striking ‘‘a sample’’ and inserting 

21 ‘‘samples’’; and 

22 (B) by inserting before the period ‘‘, except 

23 that the Secretary may designate core data ele24 ments that must be reported on all families’’; 

25 and 
99 

•S 6 IS1S 

1 (2) in clause (ii), by striking ‘‘funded under this 

2 part’’ and inserting ‘‘described in subparagraph 

3 (A)’’. 

4 (c) REPORT ON FAMILIES THAT BECOME INELI5 GIBLE TO RECEIVE ASSISTANCE.—Section 411(a) (42 

6 U.S.C. 611(a)) is amended— 

7 (1) by striking paragraph (5); 

8 (2) by redesignating paragraph (6) as para9 graph (5); and 

10 (3) by inserting after paragraph (5) (as so re11 designated) the following: 

12 ‘‘(6) REPORT ON FAMILIES THAT BECOME IN13 ELIGIBLE TO RECEIVE ASSISTANCE.—The report re14 quired by paragraph (1) for a fiscal quarter shall in15 clude for each month in the quarter the number of 

16 families and total number of individuals that, during 

17 the month, became ineligible to receive assistance 

18 under the State program funded under this part 

19 (broken down by the number of families that become 

20 so ineligible due to earnings, changes in family com21 position that result in increased earnings, sanctions, 

22 time limits, or other specified reasons).’’. 

23 (d) REGULATIONS.—Section 411(a)(7) (42 U.S.C. 

24 611(a)(7)) is amended— 
100 

•S 6 IS1S 

1 (1) by inserting ‘‘and to collect the necessary 

2 data’’ before ‘‘with respect to which reports’’; 

3 (2) by striking ‘‘subsection’’ and inserting ‘‘sec4 tion’’; and 

5 (3) by striking ‘‘in defining the data elements’’ 

6 and all that follows and inserting ‘‘, the National 

7 Governors’ Association, the American Public Human 

8 Services Association, the National Conference of 

9 State Legislatures, and others in defining the data 

10 elements.’’. 

11 (e) ADDITIONAL REPORTS BY STATES.—Section 411 

12 (42 U.S.C. 611) is amended— 

13 (1) by redesignating subsection (b) as sub14 section (e); and 

15 (2) by inserting after subsection (a) the fol16 lowing: 

17 ‘‘(b) ANNUAL REPORTS ON PROGRAM CHARACTERIS18 TICS.—Not later than 90 days after the end of fiscal year 

19 2006 and each succeeding fiscal year, each eligible State 

20 shall submit to the Secretary a report on the characteris21 tics of the State program funded under this part and other 

22 State programs funded with qualified State expenditures 

23 (as defined in section 409(a)(7)(B)(i)). The report shall 

24 include, with respect to each such program, the program 

25 name, a description of program activities, the program 
101 

•S 6 IS1S 

1 purpose, the program eligibility criteria, the sources of 

2 program funding, the number of program beneficiaries, 

3 sanction policies, and any program work requirements. 

4 ‘‘(c) MONTHLY REPORTS ON CASELOAD.—Not later 

5 than 3 months after the end of each calendar month that 

6 begins 1 year or more after the date of enactment of this 

7 subsection, each eligible State shall submit to the Sec8 retary a report on the number of families and total num9 ber of individuals receiving assistance in the calendar 

10 month under the State program funded under this part 

11 and under other State programs funded with qualified 

12 State expenditures (as defined in section 409(a)(7)(B)(i)). 

13 ‘‘(d) ANNUAL REPORT ON PERFORMANCE IMPROVE14 MENT.—Beginning with fiscal year 2007, not later than 

15 January 1 of each fiscal year, each eligible State shall sub16 mit to the Secretary a report on achievement and improve17 ment during the preceding fiscal year under the perform18 ance goals and measures under the State program funded 

19 under this part with respect to each of the matters de20 scribed in section 402(a)(1)(A)(v).’’. 

21 (f) ANNUAL REPORTS TO CONGRESS BY THE SEC22 RETARY.—Section 411(e) (42 U.S.C. 611(e)), as so redes23 ignated by subsection (e) of this section, is amended— 

24 (1) in the matter preceding paragraph (1), by 

25 striking ‘‘and each fiscal year thereafter’’ and insert-
102 

•S 6 IS1S 

1 ing ‘‘and not later than July 1 of each fiscal year 

2 thereafter’’; 

3 (2) in paragraph (2), by striking ‘‘families ap4 plying for assistance,’’ and by striking the last 

5 comma; and 

6 (3) in paragraph (3), by inserting ‘‘and other 

7 programs funded with qualified State expenditures 

8 (as defined in section 409(a)(7)(B)(i))’’ before the 

9 semicolon. 

10 SEC. 223. DIRECT FUNDING AND ADMINISTRATION BY IN11 DIAN TRIBES. 

12 (a) FUNDING FOR TRIBAL TANF PROGRAMS.— 

13 (1) REAUTHORIZATION OF TRIBAL FAMILY AS14 SISTANCE GRANTS.—Section 412(a)(1)(A) (42 

15 U.S.C. 612(a)(1)(A)) is amended by striking ‘‘1997, 

16 1998, 1999, 2000, 2001, 2002, and 2003’’ and in17 serting ‘‘2006 through 2010’’. 

18 (2) GRANTS FOR INDIAN TRIBES THAT RE19 CEIVED JOBS FUNDS.—Section 412(a)(2)(A) (42 

20 U.S.C. 612(a)(2)(A)) is amended by striking ‘‘1997, 

21 1998, 1999, 2000, 2001, 2002, and 2003’’ and in22 serting ‘‘2006 through 2010’’. 

23 (b) TRIBAL TANF IMPROVEMENT FUND.—Section 

24 412(a) (42 U.S.C. 612(a)) is amended by adding at the 

25 end the following: 
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1 ‘‘(4) TRIBAL TANF IMPROVEMENT FUND.— 

2 ‘‘(A) ESTABLISHMENT.—The Secretary 

3 shall establish a fund for purposes of carrying 

4 out any of the following activities: 

5 ‘‘(i) Providing technical assistance to 

6 Indian tribes considering applying to carry 

7 out, or that are carrying out, a tribal fam8 ily assistance plan under this section in 

9 order to help such tribes establish and op10 erate strong and effective tribal family as11 sistance plans under this section that will 

12 allow families receiving assistance under 

13 such plans achieve the highest measure of 

14 self-sufficiency. 

15 ‘‘(ii) Awarding competitive grants di16 rectly to Indian tribes carrying out a tribal 

17 family assistance plan under this section 

18 for purposes of conducting programs and 

19 activities that would substantially improve 

20 the operation and effectiveness of such 

21 plans and the ability of such tribes to 

22 achieve the purposes of the program under 

23 this part as described in section 401(a). 

24 ‘‘(iii) Awarding competitive grants di25 rectly to Indian tribes carrying out a tribal 
104 

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1 family assistance plan under this section to 

2 support tribal economic development activi3 ties that would significantly assist families 

4 receiving assistance under the State pro5 gram funded under this part or a tribal 

6 family assistance plan obtain employment 

7 and achieve self-sufficiency. 

8 ‘‘(iv) Conducting, directly or through 

9 grants, contracts, or interagency agree10 ments, research and development to im11 prove knowledge about tribal family assist12 ance programs conducted under this sec13 tion and challenges faced by such pro14 grams in order to improve the effectiveness 

15 of such programs. 

16 ‘‘(B) AUTHORIZATION OF APPROPRIA17 TIONS.—There are authorized to be appro18 priated to the Secretary to carry out this para19 graph, $100,000,000 for each of fiscal years 

20 2006 through 2010.’’. 

21 SEC. 224. RESEARCH, EVALUATIONS, AND NATIONAL STUD22 IES. 

23 (a) SECRETARY’S FUND FOR RESEARCH, DEM24 ONSTRATIONS, AND TECHNICAL ASSISTANCE.—Section 
105 

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1 413 (42 U.S.C. 613), as amended by section 211(d), is 

2 further amended by adding at the end the following: 

3 ‘‘(l) FUNDING FOR RESEARCH, DEMONSTRATIONS, 

4 AND TECHNICAL ASSISTANCE.— 

5 ‘‘(1) APPROPRIATION.— 

6 ‘‘(A) IN GENERAL.—Out of any money in 

7 the Treasury of the United States not otherwise 

8 appropriated, there are appropriated 

9 $100,000,000 for each of fiscal years 2006 

10 through 2010, which shall remain available to 

11 the Secretary until expended. 

12 ‘‘(B) USE OF FUNDS.— 

13 ‘‘(i) IN GENERAL.—Funds appro14 priated under subparagraph (A) shall be 

15 used for the purpose of— 

16 ‘‘(I) conducting or supporting re17 search and demonstration projects by 

18 public or private entities; or 

19 ‘‘(II) providing technical assist20 ance in connection with a purpose of 

21 the program funded under this part, 

22 as described in section 401(a), to 

23 States, Indian tribal organizations, 

24 sub-State entities, and such other en25 tities as the Secretary may specify. 
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1 ‘‘(ii) REQUIREMENT.—Not less than 

2 80 percent of the funds appropriated under 

3 subparagraph (A) for a fiscal year shall be 

4 expended for the purpose of conducting or 

5 supporting research and demonstration 

6 projects, or for providing technical assist7 ance, in connection with activities de8 scribed in section 403(a)(2)(B). Funds ap9 propriated under subparagraph (A) and ex10 pended in accordance with this clause shall 

11 be in addition to any other funds made 

12 available under this part for activities de13 scribed in section 403(a)(2)(B). 

14 ‘‘(2) SECRETARY’S AUTHORITY.—The Secretary 

15 may conduct activities authorized by this subsection 

16 directly or through grants, contracts, or interagency 

17 agreements with public or private entities. 

18 ‘‘(3) REQUIREMENT FOR USE OF FUNDS.—The 

19 Secretary shall not pay any funds appropriated 

20 under paragraph (1)(A) to an entity for the purpose 

21 of conducting or supporting research and demonstra22 tion projects involving activities described in section 

23 403(a)(2)(B) unless the entity complies with the re24 quirements of section 403(a)(2)(E).’’. 
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1 (b) FUNDING OF STUDIES AND DEMONSTRATIONS.— 

2 Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended in 

3 the matter preceding subparagraph (A) by striking ‘‘1997 

4 through 2002’’ and inserting ‘‘2006 through 2010’’. 

5 (c) PROGRAM COORDINATION DEMONSTRATION

6 PROJECTS.— 

7 (1) PURPOSE.—The purpose of this subsection 

8 is to establish a program of demonstration projects 

9 in a State or portion of a State to coordinate assist10 ance provided under qualified programs for the pur11 pose of supporting working individuals and families, 

12 helping families escape welfare dependency, pro13 moting child well-being, or helping build stronger 

14 families, using innovative approaches to strengthen 

15 service systems and provide more coordinated and 

16 effective service delivery. 

17 (2) DEFINITIONS.—In this subsection: 

18 (A) QUALIFIED PROGRAM.—The term 

19 ‘‘qualified program’’ means— 

20 (i) a program under part A of title IV 

21 of the Social Security Act (42 U.S.C. 601 

22 et seq.); 

23 (ii) the program under title XX of the 

24 Social Security Act (42 U.S.C. 1397 et 

25 seq.); and 
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1 (iii) child care assistance funded 

2 under section 418 of the Social Security 

3 Act (42 U.S.C. 618). 

4 (B) SECRETARY.—The term ‘‘Secretary’’ 

5 means the Secretary of Health and Human 

6 Services. 

7 (3) APPLICATION REQUIREMENTS.—The head 

8 of a State entity or of a sub-State entity admin9 istering 2 or more qualified programs proposed to be 

10 included in a demonstration project under this sub11 section shall (or, if the project is proposed to include 

12 qualified programs administered by 2 or more such 

13 entities, the heads of the administering entities 

14 (each of whom shall be considered an applicant for 

15 purposes of this subsection) shall jointly) submit to 

16 the Secretary an application that contains the fol17 lowing: 

18 (A) PROGRAMS INCLUDED.—A statement 

19 identifying each qualified program to be in20 cluded in the project, and describing how the 

21 purposes of each such program will be achieved 

22 by the project. 

23 (B) POPULATION SERVED.—A statement 

24 identifying the population to be served by the 
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1 project and specifying the eligibility criteria to 

2 be used. 

3 (C) DESCRIPTION AND JUSTIFICATION.—A 

4 detailed description of the project, including— 

5 (i) a description of how the project is 

6 expected to improve or enhance achieve7 ment of the purposes of the programs to 

8 be included in the project, from the stand9 point of quality, of cost-effectiveness, or of 

10 both; and 

11 (ii) a description of the performance 

12 objectives for the project, including any 

13 proposed modifications to the performance 

14 measures and reporting requirements used 

15 in the programs. 

16 (D) WAIVERS REQUESTED.—A description 

17 of the statutory and regulatory requirements 

18 with respect to which a waiver is requested in 

19 order to carry out the project, and a justifica20 tion of the need for each such waiver. 

21 (E) COST NEUTRALITY.—Such information 

22 and assurances as necessary to establish to the 

23 satisfaction of the Secretary, in consultation 

24 with the Director of the Office of Management 

25 and Budget, that the proposed project is rea-
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1 sonably expected to meet the applicable cost 

2 neutrality requirements of paragraph (4)(E). 

3 (F) EVALUATION AND REPORTS.—An as4 surance that the applicant will— 

5 (i) obtain an evaluation by an inde6 pendent contractor of the effectiveness of 

7 the project using an evaluation design that, 

8 to the maximum extent feasible, includes 

9 random assignment of clients (or entities 

10 serving such clients) to service delivery and 

11 control groups; and 

12 (ii) make interim and final reports to 

13 the Secretary, at such times and in such 

14 manner as the Secretary may require. 

15 (G) OTHER INFORMATION AND ASSUR16 ANCES.—Such other information and assur17 ances as the Secretary may require. 

18 (4) APPROVAL OF APPLICATIONS.— 

19 (A) IN GENERAL.—The Secretary with re20 spect to a qualified program that is identified 

21 in an application submitted pursuant to sub22 section (c) may approve the application and, ex23 cept as provided in subparagraph (B), waive 

24 any requirement applicable to the program, to 

25 the extent consistent with this subsection and 
111 

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1 necessary and appropriate for the conduct of 

2 the demonstration project proposed in the appli3 cation, if the Secretary determines that the 

4 project— 

5 (i) has a reasonable likelihood of 

6 achieving the objectives of the programs to 

7 be included in the project; 

8 (ii) may reasonably be expected to 

9 meet the applicable cost neutrality require10 ments of subparagraph (E), as determined 

11 by the Director of the Office of Manage12 ment and Budget; 

13 (iii) includes the coordination of 2 or 

14 more qualified programs; and 

15 (iv) provides for an independent eval16 uation that includes random assignment to 

17 the maximum extent feasible, as described 

18 in paragraph (3)(F), and which the Sec19 retary determines to be appropriate for as20 sessing the effectiveness of the project. 

21 (B) PROVISIONS EXCLUDED FROM WAIVER

22 AUTHORITY.—A waiver shall not be granted 

23 under subparagraph (A)— 

24 (i) with respect to any provision of 

25 law relating to— 
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1 (I) civil rights or prohibition of 

2 discrimination; 

3 (II) purposes or goals of any pro4 gram; 

5 (III) maintenance of effort re6 quirements; 

7 (IV) health or safety; 

8 (V) labor standards under the 

9 Fair Labor Standards Act of 1938; or 

10 (VI) environmental protection; 

11 (ii) in the case of child care assistance 

12 funded under section 418 of the Social Se13 curity Act (42 U.S.C. 618), with respect to 

14 the requirement under the first sentence of 

15 subsection (b)(1) of that section that funds 

16 received by a State under that section shall 

17 only be used to provide child care assist18 ance; 

19 (iii) with respect to any requirement 

20 that a State pass through to a sub-State 

21 entity part or all of an amount paid to the 

22 State; 

23 (iv) if the waiver would waive any 

24 funding restriction or limitation provided 

25 in an appropriations Act, or would have 
113 

•S 6 IS1S 

1 the effect of transferring appropriated 

2 funds from 1 appropriations account to an3 other; or 

4 (v) except as otherwise provided by 

5 statute, if the waiver would waive any 

6 funding restriction applicable to a program 

7 authorized under an Act which is not an 

8 appropriations Act (but not including pro9 gram requirements such as application 

10 procedures, performance standards, report11 ing requirements, or eligibility standards), 

12 or would have the effect of transferring 

13 funds from a program for which there is 

14 direct spending (as defined in section 

15 250(c)(8) of the Balanced Budget and 

16 Emergency Deficit Control Act of 1985) to 

17 another program. 

18 (C) 10 STATE LIMITATION.—The Director 

19 of the Office of Management and Budget shall 

20 establish a procedure for ensuring that not 

21 more than 10 States (including any portion of 

22 a State) conduct a demonstration project under 

23 this subsection. 

24 (D) AGREEMENT OF SECRETARY RE25 QUIRED.— 
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1 (i) IN GENERAL.—An applicant may 

2 not conduct a demonstration project under 

3 this subsection unless the Secretary, with 

4 respect to each qualified program proposed 

5 to be included in the project, has approved 

6 the application to conduct the project. 

7 (ii) AGREEMENT WITH RESPECT TO

8 FUNDING AND IMPLEMENTATION.—Before 

9 approving an application to conduct a dem10 onstration project under this subsection, 

11 the Secretary shall have in place an agree12 ment with the applicant with respect to the 

13 payment of funds and responsibilities re14 quired of the Secretary with respect to the 

15 project. 

16 (E) COST-NEUTRALITY REQUIREMENT.— 

17 (i) GENERAL RULE.—Notwithstanding 

18 any other provision of law (except as pro19 vided in clause (ii)), the total of the 

20 amounts that may be paid by the Federal 

21 Government for a fiscal year with respect 

22 to the programs in the State in which an 

23 entity conducting a demonstration project 

24 under this subsection is located that are 

25 affected by the project shall not exceed the 
115 

•S 6 IS1S 

1 estimated total amount that the Federal 

2 Government would have paid for the fiscal 

3 year with respect to the programs if the 

4 project had not been conducted, as deter5 mined by the Director of the Office of 

6 Management and Budget. 

7 (ii) SPECIAL RULE.—If an applicant 

8 submits to the Director of the Office of 

9 Management and Budget a request to 

10 apply the rules of this clause to the pro11 grams in the State in which the applicant 

12 is located that are affected by a dem13 onstration project proposed in an applica14 tion submitted by the applicant pursuant 

15 to this section, during such period of not 

16 more than 5 consecutive fiscal years in 

17 which the project is in effect, and the Di18 rector determines, on the basis of sup19 porting information provided by the appli20 cant, to grant the request, then, notwith21 standing any other provision of law, the 

22 total of the amounts that may be paid by 

23 the Federal Government for the period 

24 with respect to the programs shall not ex25 ceed the estimated total amount that the 
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1 Federal Government would have paid for 

2 the period with respect to the programs if 

3 the project had not been conducted. 

4 (F) 90-DAY APPROVAL DEADLINE.— 

5 (i) IN GENERAL.—If the Secretary re6 ceives an application to conduct a dem7 onstration project under this subsection 

8 and does not disapprove the application 

9 within 90 days after the receipt, then, sub10 ject to the 10 State limitation under para11 graph (3)— 

12 (I) the Secretary is deemed to 

13 have approved the application for such 

14 period as is requested in the applica15 tion, except to the extent inconsistent 

16 with paragraph (5); and 

17 (II) any waiver requested in the 

18 application which applies to a quali19 fied program that is identified in the 

20 application and is administered by the 

21 Secretary is deemed to be granted, ex22 cept to the extent inconsistent with 

23 subparagraph (B) or (E) of this para24 graph. 
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1 (ii) DEADLINE EXTENDED IF ADDI2 TIONAL INFORMATION IS SOUGHT.—The 

3 90-day period referred to in clause (i) shall 

4 not include any period that begins with the 

5 date the Secretary requests the applicant 

6 to provide additional information with re7 spect to the application and ends with the 

8 date the additional information is provided. 

9 (5) DURATION OF PROJECTS.—A demonstration 

10 project under this subsection may be approved for a 

11 term of not more than 5 years. 

12 (6) REPORTS TO CONGRESS.— 

13 (A) REPORT ON DISPOSITION OF APPLICA14 TIONS.—Within 90 days after the date the Sec15 retary receives an application submitted pursu16 ant to this subsection, the Secretary shall sub17 mit to the Committee on Finance of the Senate 

18 and the Committee on Ways and Means of the 

19 House of Representatives notice of the receipt, 

20 a description of the decision of the Secretary 

21 with respect to the application, and the reasons 

22 for approving or disapproving the application. 

23 (B) REPORTS ON PROJECTS.—The Sec24 retary shall provide annually to Congress a re-
118 

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1 port concerning demonstration projects ap2 proved under this subsection, including— 

3 (i) the projects approved for each ap4 plicant; 

5 (ii) the number of waivers granted 

6 under this subsection, and the specific 

7 statutory provisions waived; 

8 (iii) how well each project for which a 

9 waiver is granted is improving or enhanc10 ing program achievement from the stand11 point of quality, cost-effectiveness, or both; 

12 (iv) how well each project for which a 

13 waiver is granted is meeting the perform14 ance objectives specified in paragraph 

15 (3)(C)(ii); 

16 (v) how each project for which a waiv17 er is granted is conforming with the cost18 neutrality requirements of paragraph 

19 (4)(E); and 

20 (vi) to the extent the Secretary deems 

21 appropriate, recommendations for modi22 fication of programs based on outcomes of 

23 the projects. 
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1 SEC. 225. STUDY BY THE CENSUS BUREAU. 

2 (a) IN GENERAL.—Section 414(a) (42 U.S.C. 

3 614(a)) is amended to read as follows: 

4 ‘‘(a) IN GENERAL.—The Bureau of the Census shall 

5 implement or enhance a longitudinal survey of program 

6 participation, developed in consultation with the Secretary 

7 and made available to interested parties, to allow for the 

8 assessment of the outcomes of continued welfare reform 

9 on the economic and child well-being of low-income fami10 lies with children, including those who received assistance 

11 or services from a State program funded under this part, 

12 and, to the extent possible, shall provide State representa13 tive samples. The content of the survey should include 

14 such information as may be necessary to examine the 

15 issues of out-of-wedlock childbearing, marriage, welfare 

16 dependency and compliance with work requirements, the 

17 beginning and ending of spells of assistance, work, earn18 ings and employment stability, and the well-being of chil19 dren.’’. 

20 (b) REPORTS ON THE WELL-BEING OF CHILDREN

21 AND FAMILIES.—Section 414 (42 U.S.C. 614), as amend22 ed by subsection (a), is amended— 

23 (1) by redesignating subsection (b) as sub24 section (c); and 

25 (2) by inserting after subsection (a) the fol26 lowing: 
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•S 6 IS1S 

1 ‘‘(b) REPORTS ON THE WELL-BEING OF CHILDREN

2 AND FAMILIES.— 

3 ‘‘(1) IN GENERAL.—Not later than 24 months 

4 after the date of enactment of the Personal Respon5 sibility and Individual Development for Everyone 

6 Act, the Secretary of Commerce shall prepare and 

7 submit to the Committee on Ways and Means of the 

8 House of Representatives and the Committee on Fi9 nance of the Senate a report on the well-being of 

10 children and families using data collected under sub11 section (a). 

12 ‘‘(2) SECOND REPORT.—Not later than 60 

13 months after such date of enactment, the Secretary 

14 of Commerce shall submit a second report to the 

15 Committee on Ways and Means of the House of 

16 Representatives and the Committee on Finance of 

17 the Senate on the well-being of children and families 

18 using data collected under subsection (a). 

19 ‘‘(3) INCLUSION OF COMPARABLE MEASURES.— 

20 Where comparable measures for data collected under 

21 subsection (a) exist in surveys previously adminis22 tered by the Bureau of the Census, appropriate com23 parisons shall be made and included in each report 

24 required under this subsection on the well-being of 
121 

•S 6 IS1S 

1 children and families to assess changes in such 

2 measures.’’. 

3 (c) APPROPRIATION.—Section 414(c) (42 U.S.C. 

4 614(c)), as redesignated by subsection (b)(1), is amended 

5 by striking ‘‘1996,’’ and all that follows through the period 

6 and inserting ‘‘2006 through 2010 for payment to the Bu7 reau of the Census to carry out this section. Funds appro8 priated under this subsection for a fiscal year shall remain 

9 available through fiscal year 2010 to carry out this sec10 tion.’’. 

11 SEC. 226. FUNDING FOR CHILD CARE. 

12 (a) INCREASE IN MANDATORY FUNDING.—Section 

13 418(a)(3) (42 U.S.C. 618(a)(3)) is amended— 

14 (1) by striking ‘‘and’’ at the end of subpara15 graph (E); 

16 (2) by striking the period at the end of sub17 paragraph (F) and inserting ‘‘; and’’; and 

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

19 ‘‘(G) $2,917,000,000 for each of fiscal 

20 years 2006 through 2010.’’. 

21 (b) INCLUSION OF COMMONWEALTH OF PUERTO

22 RICO IN RESERVATION OF CHILD CARE FUNDS.— 

23 (1) IN GENERAL.—Section 418(a)(4) (42 

24 U.S.C. 618(a)(4)) is amended— 
122 

•S 6 IS1S 

1 (A) in the paragraph heading, by striking 

2 ‘‘INDIAN TRIBES’’ and inserting ‘‘AMOUNTS RE3 SERVED’’; 

4 (B) by striking ‘‘The Secretary’’ and in5 serting the following: 

6 ‘‘(A) INDIAN TRIBES.—The Secretary’’; 

7 and 

8 (C) by adding at the end the following: 

9 ‘‘(B) PUERTO RICO.—The Secretary shall 

10 reserve $10,000,000 of the amount appro11 priated under paragraph (3) for each fiscal year 

12 for payments to the Commonwealth of Puerto 

13 Rico for each such fiscal year for the purpose 

14 of providing child care assistance.’’. 

15 (2) CONFORMING AMENDMENT.—Section 

16 1108(a)(2) (42 U.S.C. 1308(a)(2)), as amended by 

17 section 218(b)(3), is amended by striking ‘‘or 

18 413(f)’’ and inserting ‘‘413(f), or 418(a)(4)(B)’’. 

19 SEC. 227. DEFINITIONS. 

20 (a) IN GENERAL.—Section 419 (42 U.S.C. 619) is 

21 amended by adding at the end the following: 

22 ‘‘(6) ASSISTANCE.— 

23 ‘‘(A) IN GENERAL.—The term ‘assistance’ 

24 means payment, by cash, voucher, or other 

25 means, to or for an individual or family for the 
123 

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1 purpose of meeting a subsistence need of the in2 dividual or family (including food, clothing, 

3 shelter, and related items, but not including 

4 costs of transportation or child care). 

5 ‘‘(B) EXCEPTION.—The term ‘assistance’ 

6 does not include a payment described in sub7 paragraph (A) to or for an individual or family 

8 on a short-term, nonrecurring basis (as defined 

9 by the State in accordance with regulations pre10 scribed by the Secretary).’’. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is 

13 amended by striking ‘‘assistance’’ and inserting 

14 ‘‘aid’’. 

15 (2) Section 404(f) (42 U.S.C. 604(f)) is amend16 ed by striking ‘‘assistance’’ and inserting ‘‘benefits 

17 or services’’. 

18 (3) Section 408(a)(5)(B)(i) (42 U.S.C. 

19 608(a)(5)(B)(i)) is amended in the heading by strik20 ing ‘‘ASSISTANCE’’ and inserting ‘‘AID’’. 

21 (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is 

22 amended by striking ‘‘assistance’’ and inserting 

23 ‘‘aid’’. 

24 (5) Section 5(g)(2)(D) of the Food Stamp Act 

25 of 1977 (7 U.S.C. 2014(g)(2)(D)) is amended— 
124 

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1 (A) by striking ‘‘If the vehicle allowance’’ 

2 and inserting the following: 

3 ‘‘(i) IN GENERAL.—If the vehicle al4 lowance’’; and 

5 (B) by adding at the end the following: 

6 ‘‘(ii) DEFINITION OF ASSISTANCE.— 

7 In clause (i), the term ‘assistance’ shall 

8 have the meaning given such term in sec9 tion 260.31 of title 45 of the Code of Fed10 eral Regulations, as in effect on June 1, 

11 2002.’’. 

12 SEC. 228. RESPONSIBLE FATHERHOOD PROGRAM. 

13 (a) RESPONSIBLE FATHERHOOD PROGRAM.— 

14 (1) FINDINGS.—Congress makes the following 

15 findings: 

16 (A) Nearly 24,000,000 children in the 

17 United States, or 34 percent of all such chil18 dren, live apart from their biological father. 

19 (B) Sixty percent of couples who divorce 

20 have at least 1 child. 

21 (C) The number of children living with 

22 only a mother increased from just over 

23 5,000,000 in 1960 to 17,000,000 in 1999, and 

24 between 1981 and 1991 the percentage of chil-
125 

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1 dren living with only 1 parent increased from 

2 19 percent to 25 percent. 

3 (D) Forty percent of children who live in 

4 households without a father have not seen their 

5 father in at least 1 year and 50 percent of such 

6 children have never visited their father’s home. 

7 (E) The most important factor in a child’s 

8 upbringing is whether the child is brought up in 

9 a loving, healthy, supportive environment. 

10 (F) Children who live without contact with 

11 their biological father are, in comparison to 

12 children who have such contact— 

13 (i) 5 times more likely to live in pov14 erty; 

15 (ii) more likely to bring weapons and 

16 drugs into the classroom; 

17 (iii) twice as likely to commit crime; 

18 (iv) twice as likely to drop out of 

19 school; 

20 (v) more likely to commit suicide; 

21 (vi) more than twice as likely to abuse 

22 alcohol or drugs; and 

23 (vii) more likely to become pregnant 

24 as teenagers. 
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1 (G) Violent criminals are overwhelmingly 

2 males who grew up without fathers. 

3 (H) Between 20 and 30 percent of families 

4 in poverty are headed by women who have suf5 fered domestic violence during the past year, 

6 and between 40 and 60 percent of women with 

7 children receiving welfare were abused some8 time during their life. 

9 (I) Responsible fatherhood includes active 

10 participation in financial support and child 

11 care, as well as the formation and maintenance 

12 of a positive, healthy, and nonviolent relation13 ship between father and child and a cooperative 

14 relationship between parents. 

15 (J) States should be encouraged to imple16 ment programs that provide support for respon17 sible fatherhood, promote marriage, and in18 crease the incidence of marriage, and should 

19 not be restricted from implementing such pro20 grams. 

21 (K) Fatherhood programs should promote 

22 and provide support services for— 

23 (i) loving and healthy relationships be24 tween parents and children; and 

25 (ii) cooperative parenting. 
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1 (L) There is a social need to reconnect 

2 children and fathers. 

3 (M) The promotion of responsible father4 hood and encouragement of healthy 2-parent 

5 married families should not— 

6 (i) denigrate the standing or par7 enting efforts of single mothers or other 

8 caregivers; 

9 (ii) lessen the protection of children 

10 from abusive parents; or 

11 (iii) compromise the safety or health 

12 of the custodial parent; 

13 but should increase the chance that children 

14 will have 2 caring parents to help them grow up 

15 healthy and secure. 

16 (N) The promotion of responsible father17 hood must always recognize and promote the 

18 values of nonviolence. 

19 (O) For the future of the United States 

20 and the future of our children, Congress, 

21 States, and local communities should assist par22 ents to become more actively involved in their 

23 children’s lives. 

24 (P) Child support is an important means 

25 by which a parent can take financial responsi-
128 

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1 bility for a child and emotional support is an 

2 important means by which a parent can take 

3 social responsibility for a child. 

4 (2) FATHERHOOD PROGRAM.—Title I of the 

5 Personal Responsibility and Work Opportunity Rec6 onciliation Act of 1996 (Public Law 104–193) is 

7 amended by adding at the end the following: 

8 ‘‘SEC. 117. FATHERHOOD PROGRAM. 

9 ‘‘(a) IN GENERAL.—Title IV (42 U.S.C. 601–679b) 

10 is amended by inserting after part B the following: 

11 ‘‘ ‘PART C—RESPONSIBLE FATHERHOOD 

12 PROGRAM 

13 ‘‘ ‘SEC. 441. RESPONSIBLE FATHERHOOD GRANTS. 

14 ‘‘ ‘(a) GRANTS TO STATES TO CONDUCT DEM15 ONSTRATION PROGRAMS.— 

16 ‘‘ ‘(1) AUTHORITY TO AWARD GRANTS.— 

17 ‘‘ ‘(A) IN GENERAL.—The Secretary shall 

18 award grants to up to 10 eligible States to con19 duct demonstration programs to carry out the 

20 purposes described in paragraph (2). 

21 ‘‘ ‘(B) ELIGIBLE STATE.—For purposes of 

22 this subsection, an eligible State is a State that 

23 submits to the Secretary the following: 

24 ‘‘ ‘(i) APPLICATION.—An application 

25 for a grant under this subsection, at such 
129 

•S 6 IS1S 

1 time, in such manner, and containing such 

2 information as the Secretary may require. 

3 ‘‘ ‘(ii) STATE PLAN.—A State plan 

4 that includes the following: 

5 ‘‘ ‘(I) PROJECT DESCRIPTION.—A 

6 description of the programs or activi7 ties the State will fund under the 

8 grant, including a good faith estimate 

9 of the number and characteristics of 

10 clients to be served under such 

11 projects and how the State intends to 

12 achieve at least 2 of the purposes de13 scribed in paragraph (2). 

14 ‘‘ ‘(II) COORDINATION EF15 FORTS.—A description of how the 

16 State will coordinate and cooperate 

17 with State and local entities respon18 sible for carrying out other programs 

19 that relate to the purposes intended to 

20 be achieved under the demonstration 

21 program, including as appropriate, en22 tities responsible for carrying out jobs 

23 programs and programs serving chil24 dren and families. 
130 

•S 6 IS1S 

1 ‘‘ ‘(III) RECORDS, REPORTS, AND

2 AUDITS.—An agreement to maintain 

3 such records, submit such reports, 

4 and cooperate with such reviews and 

5 audits as the Secretary finds nec6 essary for purposes of oversight of the 

7 demonstration program. 

8 ‘‘ ‘(iii) CERTIFICATIONS.—The fol9 lowing certifications from the chief execu10 tive officer of the State: 

11 ‘‘ ‘(I) A certification that the 

12 State will use funds provided under 

13 the grant to promote at least 2 of the 

14 purposes described in paragraph (2). 

15 ‘‘ ‘(II) A certification that the 

16 State will return any unused funds to 

17 the Secretary in accordance with the 

18 reconciliation process under para19 graph (5). 

20 ‘‘ ‘(III) A certification that the 

21 funds provided under the grant will be 

22 used for programs and activities that 

23 target low-income participants and 

24 that not less than 50 percent of the 
131 

•S 6 IS1S 

1 participants in each program or activ2 ity funded under the grant shall be— 

3 ‘‘ ‘(aa) parents of a child 

4 who is, or within the past 24 

5 months has been, a recipient of 

6 assistance or services under a 

7 State program funded under part 

8 A, D, or E of this title, title XIX, 

9 or the Food Stamp Act of 1977; 

10 or 

11 ‘‘ ‘(bb) parents, including an 

12 expectant parent or a married 

13 parent, whose income (after ad14 justment for court-ordered child 

15 support paid or received) does 

16 not exceed 150 percent of the 

17 poverty line. 

18 ‘‘ ‘(IV) A certification that the 

19 State has or will comply with the re20 quirements of paragraph (4). 

21 ‘‘ ‘(V) A certification that funds 

22 provided to a State under this sub23 section shall not be used to supple24 ment or supplant other Federal, 

25 State, or local funds that are used to 
132 

•S 6 IS1S 

1 support programs or activities that 

2 are related to the purposes described 

3 in paragraph (2). 

4 ‘‘ ‘(C) PREFERENCES AND FACTORS OF

5 CONSIDERATION.—In awarding grants under 

6 this subsection, the Secretary shall take into 

7 consideration the following: 

8 ‘‘ ‘(i) DIVERSITY OF ENTITIES USED

9 TO CONDUCT PROGRAMS AND ACTIVI10 TIES.—The Secretary shall, to the extent 

11 practicable, achieve a balance among the 

12 eligible States awarded grants under this 

13 subsection with respect to the size, urban 

14 or rural location, and employment of dif15 fering or unique methods of the entities 

16 that the eligible States intend to use to 

17 conduct the programs and activities funded 

18 under the grants. 

19 ‘‘ ‘(ii) PRIORITY FOR CERTAIN

20 STATES.—The Secretary shall give priority 

21 to awarding grants to eligible States that 

22 have— 

23 ‘‘ ‘(I) demonstrated progress in 

24 achieving at least 1 of the purposes 
133 

•S 6 IS1S 

1 described in paragraph (2) through 

2 previous State initiatives; or 

3 ‘‘ ‘(II) demonstrated need with 

4 respect to reducing the incidence of 

5 out-of-wedlock births or absent fa6 thers in the State. 

7 ‘‘ ‘(2) PURPOSES.—The purposes described in 

8 this paragraph are the following: 

9 ‘‘ ‘(A) PROMOTING RESPONSIBLE FATHER10 HOOD THROUGH MARRIAGE PROMOTION.—To 

11 promote marriage or sustain marriage through 

12 activities such as counseling, mentoring, dis13 seminating information about the benefits of 

14 marriage and 2-parent involvement for children, 

15 enhancing relationship skills, education regard16 ing how to control aggressive behavior, dissemi17 nating information on the causes of domestic vi18 olence and child abuse, marriage preparation 

19 programs, premarital counseling, marital inven20 tories, skills-based marriage education, financial 

21 planning seminars, including improving a fam22 ily’s ability to effectively manage family busi23 ness affairs by means such as education, coun24 seling, or mentoring on matters related to fam25 ily finances, including household management, 
134 

•S 6 IS1S 

1 budgeting, banking, and handling of financial 

2 transactions and home maintenance, and di3 vorce education and reduction programs, includ4 ing mediation and counseling. 

5 ‘‘ ‘(B) PROMOTING RESPONSIBLE FATHER6 HOOD THROUGH PARENTING PROMOTION.—To 

7 promote responsible parenting through activities 

8 such as counseling, mentoring, and mediation, 

9 disseminating information about good parenting 

10 practices, skills-based parenting education, en11 couraging child support payments, and other 

12 methods. 

13 ‘‘ ‘(C) PROMOTING RESPONSIBLE FATHER14 HOOD THROUGH FOSTERING ECONOMIC STA15 BILITY OF FATHERS.—To foster economic sta16 bility by helping fathers improve their economic 

17 status by providing activities such as work first 

18 services, job search, job training, subsidized em19 ployment, job retention, job enhancement, and 

20 encouraging education, including career-advanc21 ing education, dissemination of employment ma22 terials, coordination with existing employment 

23 services such as welfare-to-work programs, re24 ferrals to local employment training initiatives, 

25 and other methods. 
135 

•S 6 IS1S 

1 ‘‘ ‘(3) RESTRICTION ON USE OF FUNDS.—No 

2 funds provided under this subsection may be used 

3 for costs attributable to court proceedings regarding 

4 matters of child visitation or custody, or for legisla5 tive advocacy. 

6 ‘‘ ‘(4) REQUIREMENTS FOR RECEIPT OF

7 FUNDS.—A State may not be awarded a grant under 

8 this section unless the State, as a condition of re9 ceiving funds under such a grant— 

10 ‘‘ ‘(A) consults with experts in domestic vi11 olence or with relevant community domestic vio12 lence coalitions in developing such programs or 

13 activities; and 

14 ‘‘ ‘(B) describes in the application for a 

15 grant under this section— 

16 ‘‘ ‘(i) how the programs or activities 

17 proposed to be conducted will address, as 

18 appropriate, issues of domestic violence; 

19 and 

20 ‘‘ ‘(ii) what the State will do, to the 

21 extent relevant, to ensure that participa22 tion in such programs or activities is vol23 untary, and to inform potential partici24 pants that their involvement is voluntary. 

25 ‘‘ ‘(5) RECONCILIATION PROCESS.— 
136 

•S 6 IS1S 

1 ‘‘ ‘(A) 3-YEAR AVAILABILITY OF AMOUNTS

2 ALLOTTED.—Each eligible State that receives a 

3 grant under this subsection for a fiscal year 

4 shall return to the Secretary any unused por5 tion of the grant for such fiscal year not later 

6 than the last day of the second succeeding fiscal 

7 year, together with any earnings on such un8 used portion. 

9 ‘‘ ‘(B) PROCEDURE FOR REDISTRIBU10 TION.—The Secretary shall establish an appro11 priate procedure for redistributing to eligible 

12 States that have expended the entire amount of 

13 a grant made under this subsection for a fiscal 

14 year any amount that is returned to the Sec15 retary by eligible States under subparagraph 

16 (A). 

17 ‘‘ ‘(6) AMOUNT OF GRANTS.— 

18 ‘‘ ‘(A) IN GENERAL.—Subject to subpara19 graph (B), the amount of each grant awarded 

20 under this subsection shall be an amount suffi21 cient to implement the State plan submitted 

22 under paragraph (1)(B)(ii). 

23 ‘‘ ‘(B) MINIMUM AMOUNTS.—No eligible 

24 State shall— 
137 

•S 6 IS1S 

1 ‘‘ ‘(i) in the case of the District of Co2 lumbia or a State other than the Common3 wealth of Puerto Rico, the United States 

4 Virgin Islands, Guam, American Samoa, 

5 and the Commonwealth of the Northern 

6 Mariana Islands, receive a grant for a fis7 cal year in an amount that is less than 

8 $1,000,000; and 

9 ‘‘ ‘(ii) in the case of the Common10 wealth of Puerto Rico, the United States 

11 Virgin Islands, Guam, American Samoa, 

12 and the Commonwealth of the Northern 

13 Mariana Islands, receive a grant for a fis14 cal year in an amount that is less than 

15 $500,000. 

16 ‘‘ ‘(7) DEFINITION OF STATE.—In this sub17 section the term ‘State’ means each of the 50 

18 States, the District of Columbia, the Commonwealth 

19 of Puerto Rico, the United States Virgin Islands, 

20 Guam, American Samoa, and the Commonwealth of 

21 the Northern Mariana Islands. 

22 ‘‘ ‘(8) AUTHORIZATION OF APPROPRIATIONS.— 

23 There is authorized to be appropriated $20,000,000 

24 for each of fiscal years 2006 through 2010 for pur-
138 

•S 6 IS1S 

1 poses of making grants to eligible States under this 

2 subsection. 

3 ‘‘ ‘(b) GRANTS TO ELIGIBLE ENTITIES TO CONDUCT

4 DEMONSTRATION PROGRAMS.— 

5 ‘‘ ‘(1) AUTHORITY TO AWARD GRANTS.— 

6 ‘‘ ‘(A) IN GENERAL.—The Secretary shall 

7 award grants to eligible entities to conduct 

8 demonstration programs to carry out the pur9 poses described in subsection (a)(2). 

10 ‘‘ ‘(B) ELIGIBLE ENTITY.—For purposes of 

11 this subsection, an eligible entity is a local gov12 ernment, local public agency, community-based 

13 or nonprofit organization, or private entity, in14 cluding any charitable or faith-based organiza15 tion, or an Indian tribe (as defined in section 

16 419(4)), that submits to the Secretary the fol17 lowing: 

18 ‘‘ ‘(i) APPLICATION.—An application 

19 for a grant under this subsection, at such 

20 time, in such manner, and containing such 

21 information as the Secretary may require. 

22 ‘‘ ‘(ii) PROJECT DESCRIPTION.—A de23 scription of the programs or activities the 

24 entity intends to carry out with funds pro25 vided under the grant, including a good 
139 

•S 6 IS1S 

1 faith estimate of the number and charac2 teristics of clients to be served under such 

3 programs or activities and how the entity 

4 intends to achieve at least 2 of the pur5 poses described in subsection (a)(2). 

6 ‘‘ ‘(iii) COORDINATION EFFORTS.—A 

7 description of how the entity will coordi8 nate and cooperate with State and local 

9 entities responsible for carrying out other 

10 programs that relate to the purposes in11 tended to be achieved under the dem12 onstration program, including as appro13 priate, entities responsible for carrying out 

14 jobs programs and programs serving chil15 dren and families. 

16 ‘‘ ‘(iv) RECORDS, REPORTS, AND AU17 DITS.—An agreement to maintain such 

18 records, submit such reports, and cooper19 ate with such reviews and audits as the 

20 Secretary finds necessary for purposes of 

21 oversight of the demonstration program. 

22 ‘‘ ‘(v) CERTIFICATIONS.—The fol23 lowing certifications: 

24 ‘‘ ‘(I) A certification that the en25 tity will use funds provided under the 
140 

•S 6 IS1S 

1 grant to promote at least 2 of the 

2 purposes described in subsection 

3 (a)(2). 

4 ‘‘ ‘(II) A certification that the en5 tity will return any unused funds to 

6 the Secretary in accordance with the 

7 reconciliation process under para8 graph (3). 

9 ‘‘ ‘(III) A certification that the 

10 funds provided under the grant will be 

11 used for programs and activities that 

12 target low-income participants and 

13 that not less than 50 percent of the 

14 participants in each program or activ15 ity funded under the grant shall be— 

16 ‘‘ ‘(aa) parents of a child 

17 who is, or within the past 24 

18 months has been, a recipient of 

19 assistance or services under a 

20 State program funded under part 

21 A, D, or E of this title, title XIX, 

22 or the Food Stamp Act of 1977; 

23 or 

24 ‘‘ ‘(bb) parents, including an 

25 expectant parent or a married 
141 

•S 6 IS1S 

1 parent, whose income (after ad2 justment for court-ordered child 

3 support paid or received) does 

4 not exceed 150 percent of the 

5 poverty line. 

6 ‘‘ ‘(IV) A certification that the 

7 entity has or will comply with the re8 quirements of paragraph (3). 

9 ‘‘ ‘(V) A certification that funds 

10 provided to an entity under this sub11 section shall not be used to supple12 ment or supplant other Federal, 

13 State, or local funds provided to the 

14 entity that are used to support pro15 grams or activities that are related to 

16 the purposes described in subsection 

17 (a)(2). 

18 ‘‘ ‘(C) PREFERENCES AND FACTORS OF

19 CONSIDERATION.—In awarding grants under 

20 this subsection, the Secretary shall, to the ex21 tent practicable, achieve a balance among the 

22 eligible entities awarded grants under this sub23 section with respect to the size, urban or rural 

24 location, and employment of differing or unique 

25 methods of the entities. 
142 

•S 6 IS1S 

1 ‘‘ ‘(2) RESTRICTION ON USE OF FUNDS.—No 

2 funds provided under this subsection may be used 

3 for costs attributable to court proceedings regarding 

4 matters of child visitation or custody, or for legisla5 tive advocacy. 

6 ‘‘ ‘(3) REQUIREMENTS FOR USE OF FUNDS.— 

7 The Secretary may not award a grant under this 

8 subsection to an eligible entity unless the entity, as 

9 a condition of receiving funds under such a grant— 

10 ‘‘ ‘(A) consults with experts in domestic vi11 olence or with relevant community domestic vio12 lence coalitions in developing the programs or 

13 activities to be conducted with such funds 

14 awarded under the grant; and 

15 ‘‘ ‘(B) describes in the application for a 

16 grant under this section— 

17 ‘‘ ‘(i) how the programs or activities 

18 proposed to be conducted will address, as 

19 appropriate, issues of domestic violence; 

20 and 

21 ‘‘ ‘(ii) what the entity will do, to the 

22 extent relevant, to ensure that participa23 tion in such programs or activities is vol24 untary, and to inform potential partici25 pants that their involvement is voluntary. 
143 

•S 6 IS1S 

1 ‘‘ ‘(4) RECONCILIATION PROCESS.— 

2 ‘‘ ‘(A) 3-YEAR AVAILABILITY OF AMOUNTS

3 ALLOTTED.—Each eligible entity that receives a 

4 grant under this subsection for a fiscal year 

5 shall return to the Secretary any unused por6 tion of the grant for such fiscal year not later 

7 than the last day of the second succeeding fiscal 

8 year, together with any earnings on such un9 used portion. 

10 ‘‘ ‘(B) PROCEDURE FOR REDISTRIBU11 TION.—The Secretary shall establish an appro12 priate procedure for redistributing to eligible 

13 entities that have expended the entire amount 

14 of a grant made under this subsection for a fis15 cal year any amount that is returned to the 

16 Secretary by eligible entities under subpara17 graph (A). 

18 ‘‘ ‘(5) AUTHORIZATION OF APPROPRIATIONS.— 

19 There is authorized to be appropriated $30,000,000 

20 for each of fiscal years 2006 through 2010 for pur21 poses of making grants to eligible entities under this 

22 subsection. 
144 

•S 6 IS1S 

1 ‘‘ ‘SEC. 442. NATIONAL CLEARINGHOUSE FOR RESPONSIBLE 

2 FATHERHOOD PROGRAMS. 

3 ‘‘ ‘(a) MEDIA CAMPAIGN NATIONAL CLEARINGHOUSE

4 FOR RESPONSIBLE FATHERHOOD.— 

5 ‘‘ ‘(1) IN GENERAL.—From any funds appro6 priated under subsection (c), the Secretary shall con7 tract with a nationally recognized, nonprofit father8 hood promotion organization described in subsection 

9 (b) to— 

10 ‘‘ ‘(A) develop, promote, and distribute to 

11 interested States, local governments, public 

12 agencies, and private entities a media campaign 

13 that encourages the appropriate involvement of 

14 parents in the life of any child, with a priority 

15 for programs that specifically address the issue 

16 of responsible fatherhood; and 

17 ‘‘ ‘(B) develop a national clearinghouse to 

18 assist States and communities in efforts to pro19 mote and support marriage and responsible fa20 therhood by collecting, evaluating, and making 

21 available (through the Internet and by other 

22 means) to other States information regarding 

23 the media campaigns established under section 

24 443. 

25 ‘‘ ‘(2) COORDINATION WITH DOMESTIC VIO26 LENCE PROGRAMS.—The Secretary shall ensure that 
145 

•S 6 IS1S 

1 the nationally recognized nonprofit fatherhood pro2 motion organization with a contract under para3 graph (1) coordinates the media campaign developed 

4 under subparagraph (A) of such paragraph and the 

5 national clearinghouse developed under subpara6 graph (B) of such paragraph with national, State, or 

7 local domestic violence programs. 

8 ‘‘ ‘(b) NATIONALLY RECOGNIZED, NONPROFIT FA9 THERHOOD PROMOTION ORGANIZATION DESCRIBED.— 

10 The nationally recognized, nonprofit fatherhood promotion 

11 organization described in this subsection is an organiza12 tion that has at least 4 years of experience in— 

13 ‘‘ ‘(1) designing and disseminating a national 

14 public education campaign, as evidenced by the pro15 duction and successful placement of television, radio, 

16 and print public service announcements that pro17 mote the importance of responsible fatherhood, a 

18 track record of service to Spanish-speaking popu19 lations and historically underserved or minority pop20 ulations, the capacity to fulfill requests for informa21 tion and a proven history of fulfilling such requests, 

22 and a mechanism through which the public can re23 quest additional information about the campaign; 

24 and 
146 

•S 6 IS1S 

1 ‘‘ ‘(2) providing consultation and training to 

2 community-based organizations interested in imple3 menting fatherhood outreach, support, or skill devel4 opment programs with an emphasis on promoting 

5 married fatherhood as the ideal. 

6 ‘‘ ‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

7 is authorized to be appropriated $5,000,000 for each of 

8 fiscal years 2006 through 2010 to carry out this section. 

9 ‘‘ ‘SEC. 443. BLOCK GRANTS TO STATES TO ENCOURAGE 

10 MEDIA CAMPAIGNS. 

11 ‘‘ ‘(a) DEFINITIONS.—In this section: 

12 ‘‘ ‘(1) BROADCAST ADVERTISEMENT.—The term 

13 ‘broadcast advertisement’ means a communication 

14 intended to be aired by a television or radio broad15 cast station, including a communication intended to 

16 be transmitted through a cable channel. 

17 ‘‘ ‘(2) CHILD AT RISK.—The term ‘child at risk’ 

18 means each young child whose family income does 

19 not exceed the poverty line. 

20 ‘‘ ‘(3) POVERTY LINE.—The term ‘poverty line’ 

21 has the meaning given such term in section 673(2) 

22 of the Community Services Block Grant Act (42 

23 U.S.C. 9902(2)), including any revision required by 

24 such section, that is applicable to a family of the 

25 size involved. 
147 

•S 6 IS1S 

1 ‘‘ ‘(4) PRINTED OR OTHER ADVERTISEMENT.— 

2 The term ‘printed or other advertisement’ includes 

3 any communication intended to be distributed 

4 through a newspaper, magazine, outdoor advertising 

5 facility, mailing, or any other type of general public 

6 advertising, but does not include any broadcast ad7 vertisement. 

8 ‘‘ ‘(5) STATE.—The term ‘State’ means each of 

9 the 50 States, the District of Columbia, the Com10 monwealth of Puerto Rico, the United States Virgin 

11 Islands, Guam, American Samoa, and the Common12 wealth of the Northern Mariana Islands. 

13 ‘‘ ‘(6) YOUNG CHILD.—The term ‘young child’ 

14 means an individual under age 5. 

15 ‘‘ ‘(b) STATE CERTIFICATIONS.—Not later than Octo16 ber 1 of each of fiscal year for which a State desires to 

17 receive an allotment under this section, the chief executive 

18 officer of the State shall submit to the Secretary a certifi19 cation that the State shall— 

20 ‘‘ ‘(1) use such funds to promote the formation 

21 and maintenance of healthy 2-parent married fami22 lies, strengthen fragile families, and promote respon23 sible fatherhood through media campaigns conducted 

24 in accordance with the requirements of subsection 

25 (d); 
148 

•S 6 IS1S 

1 ‘‘ ‘(2) return any unused funds to the Secretary 

2 in accordance with the reconciliation process under 

3 subsection (e); and 

4 ‘‘ ‘(3) comply with the reporting requirements 

5 under subsection (f). 

6 ‘‘ ‘(c) PAYMENTS TO STATES.—For each of fiscal 

7 years 2006 through 2010, the Secretary shall pay to each 

8 State that submits a certification under subsection (b), 

9 from any funds appropriated under subsection (i), for the 

10 fiscal year an amount equal to the amount of the allotment 

11 determined for the fiscal year under subsection (g). 

12 ‘‘ ‘(d) ESTABLISHMENT OF MEDIA CAMPAIGNS.— 

13 Each State receiving an allotment under this section for 

14 a fiscal year shall use the allotment to conduct media cam15 paigns as follows: 

16 ‘‘ ‘(1) CONDUCT OF MEDIA CAMPAIGNS.— 

17 ‘‘ ‘(A) RADIO AND TELEVISION MEDIA CAM18 PAIGNS.— 

19 ‘‘ ‘(i) PRODUCTION OF BROADCAST

20 ADVERTISEMENTS.—At the option of the 

21 State, to produce broadcast advertisements 

22 that promote the formation and mainte23 nance of healthy 2-parent married families, 

24 strengthen fragile families, and promote 

25 responsible fatherhood. 
149 

•S 6 IS1S 

1 ‘‘ ‘(ii) AIRTIME CHALLENGE PRO2 GRAM.—At the option of the State, to es3 tablish an airtime challenge program under 

4 which the State may spend amounts allot5 ted under this section to purchase time 

6 from a broadcast station to air a broadcast 

7 advertisement produced under clause (i), 

8 but only if the State obtains an amount of 

9 time of the same class and during a com10 parable period to air the advertisement 

11 using non-Federal contributions. 

12 ‘‘ ‘(B) OTHER MEDIA CAMPAIGNS.—At the 

13 option of the State, to conduct a media cam14 paign that consists of the production and dis15 tribution of printed or other advertisements 

16 that promote the formation and maintenance of 

17 healthy 2-parent married families, strengthen 

18 fragile families, and promote responsible father19 hood. 

20 ‘‘ ‘(2) ADMINISTRATION OF MEDIA CAM21 PAIGNS.—A State may administer media campaigns 

22 funded under this section directly or through grants, 

23 contracts, or cooperative agreements with public 

24 agencies, local governments, or private entities, in25 cluding charitable and faith-based organizations. 
150 

•S 6 IS1S 

1 ‘‘ ‘(3) CONSULTATION WITH DOMESTIC VIO2 LENCE ASSISTANCE CENTERS.—In developing broad3 cast and printed advertisements to be used in the 

4 media campaigns conducted under paragraph (1), 

5 the State or other entity administering the campaign 

6 shall consult with representatives of State and local 

7 domestic violence centers. 

8 ‘‘ ‘(4) NON-FEDERAL CONTRIBUTIONS.—In this 

9 section, the term ‘non-Federal contributions’ in10 cludes contributions by the State and by public and 

11 private entities. Such contributions may be in cash 

12 or in kind. Such term does not include any amounts 

13 provided by the Federal Government, or services as14 sisted or subsidized to any significant extent by the 

15 Federal Government, or any amount expended by a 

16 State before October 1, 2005. 

17 ‘‘ ‘(e) RECONCILIATION PROCESS.— 

18 ‘‘ ‘(1) 3-YEAR AVAILABILITY OF AMOUNTS AL19 LOTTED.—Each State that receives an allotment 

20 under this section shall return to the Secretary any 

21 unused portion of the amount allotted to a State for 

22 a fiscal year not later than the last day of the sec23 ond succeeding fiscal year together with any earn24 ings on such unused portion. 
151 

•S 6 IS1S 

1 ‘‘ ‘(2) PROCEDURE FOR REDISTRIBUTION OF

2 UNUSED ALLOTMENTS.—The Secretary shall estab3 lish an appropriate procedure for redistributing to 

4 States that have expended the entire amount allotted 

5 under this section any amount that is— 

6 ‘‘ ‘(A) returned to the Secretary by States 

7 under paragraph (1); or 

8 ‘‘ ‘(B) not allotted to a State under this 

9 section because the State did not submit a cer10 tification under subsection (b) by October 1 of 

11 a fiscal year. 

12 ‘‘ ‘(f) REPORTING REQUIREMENTS.— 

13 ‘‘ ‘(1) MONITORING AND EVALUATION.—Each 

14 State receiving an allotment under this section for a 

15 fiscal year shall monitor and evaluate the media 

16 campaigns conducted using funds made available 

17 under this section in such manner as the Secretary, 

18 in consultation with the States, determines appro19 priate. 

20 ‘‘ ‘(2) ANNUAL REPORTS.—Not less frequently 

21 than annually, each State receiving an allotment 

22 under this section for a fiscal year shall submit to 

23 the Secretary reports on the media campaigns con24 ducted using funds made available under this section 
152 

•S 6 IS1S 

1 at such time, in such manner, and containing such 

2 information as the Secretary may require. 

3 ‘‘ ‘(g) AMOUNT OF ALLOTMENTS.— 

4 ‘‘ ‘(1) IN GENERAL.—Except as provided in 

5 paragraph (2), of the amount appropriated for the 

6 purpose of making allotments under this section for 

7 a fiscal year, the Secretary shall allot to each State 

8 that submits a certification under subsection (b) for 

9 the fiscal year an amount equal to the sum of— 

10 ‘‘ ‘(A) the amount that bears the same 

11 ratio to 50 percent of such funds as the number 

12 of young children in the State (as determined 

13 by the Secretary based on the most current reli14 able data available) bears to the number of 

15 such children in all States; and 

16 ‘‘ ‘(B) the amount that bears the same 

17 ratio to 50 percent of such funds as the number 

18 of children at risk in the State (as determined 

19 by the Secretary based on the most current reli20 able data available) bears to the number of 

21 such children in all States. 

22 ‘‘ ‘(2) MINIMUM ALLOTMENTS.—No allotment 

23 for a fiscal year under this section shall be less 

24 than— 
153 

•S 6 IS1S 

1 ‘‘ ‘(A) in the case of the District of Colum2 bia or a State other than the Commonwealth of 

3 Puerto Rico, the United States Virgin Islands, 

4 Guam, American Samoa, and the Common5 wealth of the Northern Mariana Islands, 1 per6 cent of the amount appropriated for the fiscal 

7 year under subsection (i); and 

8 ‘‘ ‘(B) in the case of the Commonwealth of 

9 Puerto Rico, the United States Virgin Islands, 

10 Guam, American Samoa, and the Common11 wealth of the Northern Mariana Islands, 0.5 

12 percent of such amount. 

13 ‘‘ ‘(3) PRO RATA REDUCTIONS.—The Secretary 

14 shall make such pro rata reductions to the allot15 ments determined under this subsection as are nec16 essary to comply with the requirements of paragraph 

17 (2). 

18 ‘‘ ‘(h) EVALUATION.— 

19 ‘‘ ‘(1) IN GENERAL.—The Secretary shall con20 duct an evaluation of the impact of the media cam21 paigns funded under this section. 

22 ‘‘ ‘(2) REPORT.—Not later than December 31, 

23 2008, the Secretary shall report to Congress the re24 sults of the evaluation under paragraph (1). 
154 

•S 6 IS1S 

1 ‘‘ ‘(3) FUNDING.—Of the amount appropriated 

2 under subsection (i) for fiscal year 2006, $1,000,000 

3 of such amount shall be transferred and made avail4 able for purposes of conducting the evaluation re5 quired under this subsection, and shall remain avail6 able until expended. 

7 ‘‘ ‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

8 is authorized to be appropriated $20,000,000 for each of 

9 fiscal years 2006 through 2010 for purposes of making 

10 allotments to States under this section.’. 

11 ‘‘(b) INAPPLICABILITY OF EFFECTIVE DATE PROVI12 SIONS.—Section 116 shall not apply to the amendment 

13 made by subsection (a) of this section.’’. 

14 (b) CLERICAL AMENDMENT.—Section 2 of such Act 

15 is amended in the table of contents by inserting after the 

16 item relating to section 116 the following new item: 

‘‘Sec. 117. Responsible fatherhood program.’’. 

17 SEC. 229. ADDITIONAL GRANTS. 

18 (a) GRANTS TO CAPITALIZE AND DEVELOP SUSTAIN19 ABLE SOCIAL SERVICES.—Section 403(a) (42 U.S.C. 

20 603(a)) is amended by adding at the end the following: 

21 ‘‘(6) GRANTS TO CAPITALIZE AND DEVELOP

22 SUSTAINABLE SOCIAL SERVICES.— 

23 ‘‘(A) AUTHORITY TO AWARD GRANTS.— 

24 The Secretary may award grants to entities for 

25 the purpose of capitalizing and developing the 
155 

•S 6 IS1S 

1 role of sustainable social services that are crit2 ical to the success of moving recipients of as3 sistance under a State program funded under 

4 this part to work. 

5 ‘‘(B) APPLICATION.— 

6 ‘‘(i) IN GENERAL.—An entity desiring 

7 a grant under this paragraph shall submit 

8 an application to the Secretary, at such 

9 time, in such manner, and, subject to 

10 clause (ii), containing such information as 

11 the Secretary may require. 

12 ‘‘(ii) STRATEGY FOR GENERATION OF

13 REVENUE.—An application for a grant 

14 under this paragraph shall include a de15 scription of the capitalization strategy that 

16 the entity intends to follow to develop a 

17 program that generates its own source of 

18 ongoing revenue while assisting recipients 

19 of assistance under a State program fund20 ed under this part. 

21 ‘‘(C) USE OF FUNDS.— 

22 ‘‘(i) IN GENERAL.—Funds made avail23 able under a grant made under this para24 graph may be used for the acquisition, con-
156 

•S 6 IS1S 

1 struction, or renovation of facilities or 

2 buildings. 

3 ‘‘(ii) GENERAL RULES GOVERNING

4 USE OF FUNDS.—The rules of section 404, 

5 other than subsection (b) of that section, 

6 shall not apply to a grant made under this 

7 paragraph. 

8 ‘‘(D) EVALUATION AND REPORT.—The 

9 Secretary shall, by grant, contract, or inter10 agency agreement, conduct an evaluation of the 

11 programs developed with grants awarded under 

12 this paragraph and shall submit a report to 

13 Congress on the results of such evaluation. 

14 ‘‘(E) AUTHORIZATION OF APPROPRIA15 TIONS.—Out of any money in the Treasury of 

16 the United States not otherwise appropriated, 

17 there is appropriated to the Secretary for the 

18 purpose of carrying out this paragraph, 

19 $40,000,000 for each of fiscal years 2006 

20 through 2010.’’. 

21 (b) GRANTS FOR LOW-INCOME CAR OWNERSHIP

22 PROGRAMS.—Section 403(a) (42 U.S.C. 603(a)), as 

23 amended by subsection (a), is further amended by adding 

24 at the end the following: 
157 

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1 ‘‘(7) GRANTS FOR LOW-INCOME CAR OWNER2 SHIP PROGRAMS.— 

3 ‘‘(A) PURPOSES.—The purposes of this 

4 paragraph are to— 

5 ‘‘(i) assist low-income families with 

6 children obtain dependable, affordable 

7 automobiles to improve their employment 

8 opportunities and access to training; and 

9 ‘‘(ii) provide incentives to States, In10 dian tribes, localities, and nonprofit enti11 ties to develop and administer programs 

12 that provide assistance with automobile 

13 ownership for low-income families. 

14 ‘‘(B) DEFINITIONS.—In this paragraph: 

15 ‘‘(i) LOCALITY.—The term ‘locality’ 

16 means a municipality that does not admin17 ister a State program funded under this 

18 part. 

19 ‘‘(ii) LOW-INCOME FAMILY WITH

20 CHILDREN.—The term ‘low-income family 

21 with children’ means a household that is 

22 eligible for benefits or services funded 

23 under the State program funded under this 

24 part or under a program funded with 
158 

•S 6 IS1S 

1 qualified State expenditures (as defined in 

2 section 409(a)(7)(B)(i)). 

3 ‘‘(iii) NONPROFIT ENTITY.—The term 

4 ‘nonprofit entity’ means a school, local 

5 agency, organization, or institution owned 

6 and operated by 1 or more nonprofit cor7 porations or associations, no part of the 

8 net earnings of which inures, or may law9 fully inure, to the benefit of any private 

10 shareholder or individual. 

11 ‘‘(C) AUTHORITY TO AWARD GRANTS.— 

12 The Secretary may award grants to States, 

13 counties, localities, Indian tribes, and nonprofit 

14 entities to promote improving access to depend15 able, affordable automobiles by low-income fam16 ilies with children. 

17 ‘‘(D) GRANT APPROVAL CRITERIA.—The 

18 Secretary shall establish criteria for approval of 

19 an application for a grant under this paragraph 

20 that include consideration of— 

21 ‘‘(i) the extent to which the proposal, 

22 if funded, is likely to improve access to 

23 training and employment opportunities and 

24 child care services by low-income families 

25 with children by means of car ownership; 
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•S 6 IS1S 

1 ‘‘(ii) the level of innovation in the ap2 plicant’s grant proposal; and 

3 ‘‘(iii) any partnerships between the 

4 public and private sector in the applicant’s 

5 grant proposal. 

6 ‘‘(E) USE OF FUNDS.— 

7 ‘‘(i) IN GENERAL.—A grant awarded 

8 under this paragraph shall be used to ad9 minister programs that assist low-income 

10 families with children with dependable 

11 automobile ownership, and maintenance of, 

12 or insurance for, the purchased auto13 mobile. 

14 ‘‘(ii) SUPPLEMENT NOT SUPPLANT.— 

15 Funds provided to a State, Indian tribe, 

16 county, or locality under a grant awarded 

17 under this paragraph shall be used to sup18 plement and not supplant other State, 

19 county, or local public funds expended for 

20 car ownership programs. 

21 ‘‘(iii) GENERAL RULES GOVERNING

22 USE OF FUNDS.—The rules of section 404, 

23 other than subsection (b) of that section, 

24 shall not apply to a grant made under this 

25 paragraph. 
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1 ‘‘(F) APPLICATION.—Each applicant desir2 ing a grant under this paragraph shall submit 

3 an application to the Secretary at such time, in 

4 such manner, and accompanied by such infor5 mation as the Secretary may reasonably re6 quire. 

7 ‘‘(G) REVERSION OF FUNDS.—Any funds 

8 not expended by a grantee within 3 years after 

9 the date the grant is awarded under this para10 graph shall be available for redistribution 

11 among other grantees in such manner and 

12 amount as the Secretary may determine, unless 

13 the Secretary extends by regulation the time pe14 riod to expend such funds. 

15 ‘‘(H) LIMITATION ON ADMINISTRATIVE

16 COSTS OF THE SECRETARY.—Not more than an 

17 amount equal to 5 percent of the funds appro18 priated to make grants under this paragraph 

19 for a fiscal year shall be expended for adminis20 trative costs of the Secretary in carrying out 

21 this paragraph. 

22 ‘‘(I) EVALUATION.—The Secretary shall, 

23 by grant, contract, or interagency agreement, 

24 conduct an evaluation of the programs adminis-
161 

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1 tered with grants awarded under this para2 graph. 

3 ‘‘(J) AUTHORIZATION OF APPROPRIA4 TIONS.—There is authorized to be appropriated 

5 to the Secretary to make grants under this 

6 paragraph, $25,000,000 for each of fiscal years 

7 2006 through 2010.’’. 

8 SEC. 230. TECHNICAL CORRECTIONS. 

9 (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is 

10 amended by inserting a comma after ‘‘appropriate’’. 

11 (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 

12 611(a)(1)(A)(ii)(III)) is amended by striking the last close 

13 parenthesis. 

14 (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 

15 amended by striking ‘‘section’’ and inserting ‘‘sections’’. 

16 (d)(1) Section 413 (42 U.S.C. 613) is amended by 

17 striking subsection (g) and redesignating subsections (h) 

18 through (j) and subsections (k) and (l) (as added by sec19 tions 211(d) and 224(a) of this Act, respectively) as sub20 sections (g) through (k), respectively. 

21 (2) Each of the following provisions is amended by 

22 striking ‘‘413(j)’’ and inserting ‘‘413(i)’’: 

23 (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 

24 603(a)(5)(A)(ii)(III)). 
162 

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1 (B) Section 403(a)(5)(F) (42 U.S.C. 

2 603(a)(5)(F)). 

3 (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 

4 603(a)(5)(G)(ii)). 

5 (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 

6 612(a)(3)(B)(iv)). 

7 Subtitle B—Abstinence Education 

8 SEC. 241. EXTENSION OF ABSTINENCE EDUCATION PRO9 GRAM. 

10 (a) EXTENSION OF APPROPRIATIONS.—Section 

11 510(d) (42 U.S.C. 710(d)) is amended by striking ‘‘2003’’ 

12 and inserting ‘‘2010’’. 

13 (b) ALLOTMENT OF FUNDS.—Section 510(a) (42 

14 U.S.C. 710(a)) is amended— 

15 (1) in the matter preceding paragraph (1), by 

16 striking ‘‘an application for the fiscal year under 

17 section 505(a)’’ and inserting ‘‘, for the fiscal year, 

18 an application under section 505(a), and an applica19 tion under this section (in such form and meeting 

20 such terms and conditions as determined appropriate 

21 by the Secretary),’’; and 

22 (2) in paragraph (2), to read as follows: 

23 ‘‘(2) the percentage described in section 

24 502(c)(1)(B)(ii) that would be determined for the 

25 State under section 502(c) if such determination 
163 

•S 6 IS1S 

1 took into consideration only those States that trans2 mitted both such applications for such fiscal year.’’. 

3 (c) REALLOTMENT OF FUNDS.—Section 510 (42 

4 U.S.C. 710(a)) is amended by adding at the end the fol5 lowing: 

6 ‘‘(e)(1) With respect to allotments under subsection 

7 (a) for fiscal year 2006 and subsequent fiscal years, the 

8 amount of any allotment to a State for a fiscal year that 

9 the Secretary determines will not be required to carry out 

10 a program under this section during such fiscal year or 

11 the succeeding fiscal year shall be available for reallotment 

12 from time to time during such fiscal years on such dates 

13 as the Secretary may fix, to other States that the Sec14 retary determines— 

15 ‘‘(A) require amounts in excess of amounts pre16 viously allotted under subsection (a) to carry out a 

17 program under this section; and 

18 ‘‘(B) will use such excess amounts during such 

19 fiscal years. 

20 ‘‘(2) Reallotments under paragraph (1) shall be made 

21 on the basis of such States’ applications under this sec22 tion, after taking into consideration the population of low23 income children in each such State as compared with the 

24 population of low-income children in all such States with 
164 

•S 6 IS1S 

1 respect to which a determination under paragraph (1) has 

2 been made by the Secretary. 

3 ‘‘(3) Any amount reallotted under paragraph (1) to 

4 a State is deemed to be part of its allotment under sub5 section (a).’’. 

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

7 this section shall be effective with respect to the program 

8 under section 510 for fiscal year 2006 and succeeding fis9 cal years. 

10 Subtitle C—Child Support 

11 SEC. 251. DISTRIBUTION OF CHILD SUPPORT COLLECTED 

12 BY STATES ON BEHALF OF CHILDREN RE13 CEIVING CERTAIN WELFARE BENEFITS. 

14 (a) MODIFICATION OF RULE REQUIRING ASSIGN15 MENT OF SUPPORT RIGHTS AS A CONDITION OF RECEIV16 ING TANF.—Section 408(a)(3) (42 U.S.C. 608(a)(3)) is 

17 amended to read as follows: 

18 ‘‘(3) NO ASSISTANCE FOR FAMILIES NOT AS19 SIGNING CERTAIN SUPPORT RIGHTS TO THE

20 STATE.—A State to which a grant is made under 

21 section 403 shall require, as a condition of paying 

22 assistance to a family under the State program 

23 funded under this part, that a member of the family 

24 assign to the State any right the family member 

25 may have (on behalf of the family member or of any 
165 

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1 other person for whom the family member has ap2 plied for or is receiving such assistance) to support 

3 from any other person, not exceeding the total 

4 amount of assistance so paid to the family, which ac5 crues during the period that the family receives as6 sistance under the program.’’. 

7 (b) INCREASING CHILD SUPPORT PAYMENTS TO

8 FAMILIES AND SIMPLIFYING CHILD SUPPORT DISTRIBU9 TION RULES.— 

10 (1) DISTRIBUTION RULES.— 

11 (A) IN GENERAL.—Section 457(a) (42 

12 U.S.C. 657(a)) is amended to read as follows: 

13 ‘‘(a) IN GENERAL.—Subject to subsections (d) and 

14 (e), the amounts collected on behalf of a family as support 

15 by a State pursuant to a plan approved under this part 

16 shall be distributed as follows: 

17 ‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the 

18 case of a family receiving assistance from the State, 

19 the State shall— 

20 ‘‘(A) pay to the Federal Government the 

21 Federal share of the amount collected, subject 

22 to paragraph (3)(A); 

23 ‘‘(B) retain, or pay to the family, the State 

24 share of the amount collected, subject to para25 graph (3)(B); and 
166 

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1 ‘‘(C) pay to the family any remaining 

2 amount. 

3 ‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS4 SISTANCE.—In the case of a family that formerly re5 ceived assistance from the State: 

6 ‘‘(A) CURRENT SUPPORT.—To the extent 

7 that the amount collected does not exceed the 

8 current support amount, the State shall pay the 

9 amount to the family. 

10 ‘‘(B) ARREARAGES.—Except as otherwise 

11 provided in an election made under section 

12 454(34), to the extent that the amount col13 lected exceeds the current support amount, the 

14 State— 

15 ‘‘(i) shall first pay to the family the 

16 excess amount, to the extent necessary to 

17 satisfy support arrearages not assigned 

18 pursuant to section 408(a)(3); 

19 ‘‘(ii) if the amount collected exceeds 

20 the amount required to be paid to the fam21 ily under clause (i), shall— 

22 ‘‘(I) pay to the Federal Govern23 ment the Federal share of the excess 

24 amount described in this clause, sub25 ject to paragraph (3)(A); and 
167 

•S 6 IS1S 

1 ‘‘(II) retain, or pay to the family, 

2 the State share of the excess amount 

3 described in this clause, subject to 

4 paragraph (3)(B); and 

5 ‘‘(iii) shall pay to the family any re6 maining amount. 

7 ‘‘(3) LIMITATIONS.— 

8 ‘‘(A) FEDERAL REIMBURSEMENTS.—The 

9 total of the amounts paid by the State to the 

10 Federal Government under paragraphs (1) and 

11 (2) of this subsection with respect to a family 

12 shall not exceed the Federal share of the 

13 amount assigned with respect to the family pur14 suant to section 408(a)(3). 

15 ‘‘(B) STATE REIMBURSEMENTS.—The 

16 total of the amounts retained by the State 

17 under paragraphs (1) and (2) of this subsection 

18 with respect to a family shall not exceed the 

19 State share of the amount assigned with respect 

20 to the family pursuant to section 408(a)(3). 

21 ‘‘(4) FAMILIES THAT NEVER RECEIVED ASSIST22 ANCE.—In the case of any other family, the State 

23 shall pay the amount collected to the family. 

24 ‘‘(5) FAMILIES UNDER CERTAIN AGREE25 MENTS.—Notwithstanding paragraphs (1) through 
168 

•S 6 IS1S 

1 (3), in the case of an amount collected for a family 

2 in accordance with a cooperative agreement under 

3 section 454(33), the State shall distribute the 

4 amount collected pursuant to the terms of the agree5 ment. 

6 ‘‘(6) STATE FINANCING OPTIONS.—To the ex7 tent that the State’s share of the amount payable to 

8 a family pursuant to paragraph (2)(B) of this sub9 section exceeds the amount that the State estimates 

10 (under procedures approved by the Secretary) would 

11 have been payable to the family pursuant to former 

12 section 457(a)(2)(B) (as in effect for the State im13 mediately before the date this subsection first ap14 plies to the State) if such former section had re15 mained in effect, the State may elect to have the 

16 payment considered a qualified State expenditure for 

17 purposes of section 409(a)(7). 

18 ‘‘(7) STATE OPTION TO PASS THROUGH ADDI19 TIONAL SUPPORT WITH FEDERAL FINANCIAL PAR20 TICIPATION.— 

21 ‘‘(A) FAMILIES THAT FORMERLY RE22 CEIVED ASSISTANCE.—Notwithstanding para23 graph (2), a State shall not be required to pay 

24 to the Federal Government the Federal share of 

25 an amount collected on behalf of a family that 
169 

•S 6 IS1S 

1 formerly received assistance from the State to 

2 the extent that the State pays the amount to 

3 the family. 

4 ‘‘(B) FAMILIES THAT CURRENTLY RE5 CEIVE ASSISTANCE.— 

6 ‘‘(i) IN GENERAL.—Notwithstanding 

7 paragraph (1), in the case of a family that 

8 receives assistance from the State, a State 

9 shall not be required to pay to the Federal 

10 Government the Federal share of the ex11 cepted portion (as defined in clause (ii)) of 

12 any amount collected on behalf of such 

13 family during a month to the extent that— 

14 ‘‘(I) the State pays the excepted 

15 portion to the family; and 

16 ‘‘(II) the excepted portion is dis17 regarded in determining the amount 

18 and type of assistance provided to the 

19 family under such program. 

20 ‘‘(ii) EXCEPTED PORTION DEFINED.— 

21 For purposes of this subparagraph, the 

22 term ‘excepted portion’ means that portion 

23 of the amount collected on behalf of a fam24 ily during a month that does not exceed 

25 $400 per month, or in the case of a family 
170 

•S 6 IS1S 

1 that includes 2 or more children, that does 

2 not exceed an amount established by the 

3 State that is not more than $600 per 

4 month. 

5 ‘‘(8) STATES WITH DEMONSTRATION WAIV6 ERS.—Notwithstanding the preceding paragraphs, in 

7 the case of a State that, on the date of enactment 

8 of this paragraph, has had in effect since October 1, 

9 1997, a waiver under section 1115 permitting pass10 through payments of child support collections— 

11 ‘‘(A) the State may continue to distribute 

12 such payments to families without regard to the 

13 expiration date of such waiver; and 

14 ‘‘(B) the requirement under paragraph (1) 

15 to pay to the Federal Government the Federal 

16 share of the amount collected on behalf of a 

17 family shall not apply to the extent that— 

18 ‘‘(i) the State distributes such amount 

19 to the family; and 

20 ‘‘(ii) such amount is disregarded in 

21 determining the amount and type of assist22 ance paid to the family.’’. 

23 (B) STATE PLAN TO INCLUDE ELECTION

24 AS TO WHICH RULES TO APPLY IN DISTRIB25 UTING CHILD SUPPORT ARREARAGES COL-
171 

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1 LECTED ON BEHALF OF FAMILIES FORMERLY

2 RECEIVING ASSISTANCE.—Section 454 (42 

3 U.S.C. 654) is amended— 

4 (i) by striking ‘‘and’’ at the end of 

5 paragraph (32); 

6 (ii) by striking the period at the end 

7 of paragraph (33) and inserting ‘‘; and’’; 

8 and 

9 (iii) by inserting after paragraph (33) 

10 the following: 

11 ‘‘(34) include an election by the State to apply 

12 section 457(a)(2)(B) of this Act or former section 

13 457(a)(2)(B) of this Act (as in effect for the State 

14 immediately before the date this paragraph first ap15 plies to the State) to the distribution of the amounts 

16 which are the subject of such sections and, for so 

17 long as the State elects to so apply such former sec18 tion, the amendments made by section ll51(d)(1) 

19 of the Personal Responsibility and Individual Devel20 opment for Everyone Act shall not apply with re21 spect to the State, notwithstanding section 

22 ll51(e) of that Act.’’. 

23 (C) APPROVAL OF ESTIMATION PROCE24 DURES.—Not later than the date that is 6 

25 months after the date of enactment of this Act, 
172 

•S 6 IS1S 

1 the Secretary of Health and Human Services, 

2 in consultation with the States (as defined for 

3 purposes of part D of title IV of the Social Se4 curity Act (42 U.S.C. 651 et seq.)), shall estab5 lish the procedures to be used to make the esti6 mate described in section 457(a)(6) of such Act 

7 (42 U.S.C. 657(a)(6)). 

8 (2) CURRENT SUPPORT AMOUNT DEFINED.— 

9 Section 457(c) (42 U.S.C. 657(c)) is amended by 

10 adding at the end the following: 

11 ‘‘(5) CURRENT SUPPORT AMOUNT.—The term 

12 ‘current support amount’ means, with respect to 

13 amounts collected as support on behalf of a family, 

14 the amount designated as the monthly support obli15 gation of the noncustodial parent in the order re16 quiring the support.’’. 

17 (c) STATE OPTION TO DISCONTINUE OLDER SUP18 PORT ASSIGNMENTS.—Section 457(b) (42 U.S.C. 657(b)) 

19 is amended to read as follows: 

20 ‘‘(b) CONTINUATION OF ASSIGNMENTS.— 

21 ‘‘(1) STATE OPTION TO DISCONTINUE PRE-1997

22 SUPPORT ASSIGNMENTS.— 

23 ‘‘(A) IN GENERAL.—Any rights to support 

24 obligations assigned to a State as a condition of 

25 receiving assistance from the State under part 
173 

•S 6 IS1S 

1 A and in effect on September 30, 1997 (or such 

2 earlier date on or after August 22, 1996, as the 

3 State may choose), may remain assigned after 

4 such date. 

5 ‘‘(B) DISTRIBUTION OF AMOUNTS AFTER

6 ASSIGNMENT DISCONTINUATION.—If a State 

7 chooses to discontinue the assignment of a sup8 port obligation described in subparagraph (A), 

9 the State may treat amounts collected pursuant 

10 to such assignment as if such amounts had 

11 never been assigned and may distribute such 

12 amounts to the family in accordance with sub13 section (a)(4). 

14 ‘‘(2) STATE OPTION TO DISCONTINUE POST-1997

15 ASSIGNMENTS.— 

16 ‘‘(A) IN GENERAL.—Any rights to support 

17 obligations accruing before the date on which a 

18 family first receives assistance under part A 

19 that are assigned to a State under that part 

20 and in effect before the implementation date of 

21 this section may remain assigned after such 

22 date. 

23 ‘‘(B) DISTRIBUTION OF AMOUNTS AFTER

24 ASSIGNMENT DISCONTINUATION.—If a State 

25 chooses to discontinue the assignment of a sup-
174 

•S 6 IS1S 

1 port obligation described in subparagraph (A), 

2 the State may treat amounts collected pursuant 

3 to such assignment as if such amounts had 

4 never been assigned and may distribute such 

5 amounts to the family in accordance with sub6 section (a)(4).’’. 

7 (d) CONFORMING AMENDMENTS.— 

8 (1) Section 409(a)(7)(B)(i) (42 U.S.C. 

9 609(a)(7)(B)(i)), as amended by section 213(c), is 

10 amended— 

11 (A) in subclause (I)(aa), by striking 

12 ‘‘457(a)(1)(B)’’ and inserting ‘‘457(a)(1)’’; and 

13 (B) by adding at the end the following: 

14 ‘‘(VI) PORTIONS OF CERTAIN

15 CHILD SUPPORT PAYMENTS COL16 LECTED ON BEHALF OF AND DISTRIB17 UTED TO FAMILIES NO LONGER RE18 CEIVING ASSISTANCE.—Any amount 

19 paid by a State pursuant to clause (i) 

20 or (ii) of section 457(a)(2)(B), but 

21 only to the extent that the State prop22 erly elects under section 457(a)(6) to 

23 have the payment considered a quali24 fied State expenditure.’’. 
175 

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1 (2) Section 6402(c) of the Internal Revenue 

2 Code of 1986 (relating to offset of past-due support 

3 against overpayments) is amended— 

4 (A) in the first sentence, by striking ‘‘the 

5 Social Security Act.’’ and inserting ‘‘of such 

6 Act.’’; and 

7 (B) by striking the third sentence and in8 serting the following: ‘‘The Secretary shall 

9 apply a reduction under this subsection first to 

10 an amount certified by the State as past due 

11 support under section 464 of the Social Secu12 rity Act before any other reductions allowed by 

13 law.’’. 

14 (e) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—The amendments made by 

16 this section shall take effect on October 1, 2009, 

17 and shall apply to payments under parts A and D 

18 of title IV of the Social Security Act for calendar 

19 quarters beginning on or after such date, and with20 out regard to whether regulations to implement such 

21 amendments (in the case of State programs operated 

22 under such part D) are promulgated by such date. 

23 (2) STATE OPTION TO ACCELERATE EFFECTIVE

24 DATE.—In addition, a State may elect to have the 

25 amendments made by this section apply to the State 
176 

•S 6 IS1S 

1 and to amounts collected by the State (and such 

2 payments under parts A and D), on and after such 

3 date as the State may select that is after the date 

4 of enactment of this Act and before October 1, 

5 2009. 

6 SEC. 252. MANDATORY REVIEW AND ADJUSTMENT OF 

7 CHILD SUPPORT ORDERS FOR FAMILIES RE8 CEIVING TANF. 

9 (a) IN GENERAL.—Section 466(a)(10)(A)(i) (42 

10 U.S.C. 666(a)(10)(A)(i)) is amended— 

11 (1) by striking ‘‘parent, or,’’ and inserting 

12 ‘‘parent or’’; and 

13 (2) by striking ‘‘upon the request of the State 

14 agency under the State plan or of either parent,’’. 

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

16 subsection (a) shall take effect on October 1, 2007. 

17 SEC. 253. REPORT ON UNDISTRIBUTED CHILD SUPPORT 

18 PAYMENTS. 

19 Not later than 6 months after the date of enactment 

20 of this Act, the Secretary of Health and Human Services 

21 shall submit to the Committee on Ways and Means of the 

22 House of Representatives and the Committee on Finance 

23 of the Senate a report on the procedures that the States 

24 use generally to locate custodial parents for whom child 

25 support has been collected but not yet distributed. The 
177 

•S 6 IS1S 

1 report shall include an estimate of the total amount of 

2 undistributed child support and the average length of time 

3 it takes undistributed child support to be distributed. To 

4 the extent the Secretary deems appropriate, the Secretary 

5 shall include in the report recommendations as to whether 

6 additional procedures should be established at the Federal 

7 or State level to expedite the payment of undistributed 

8 child support. 

9 SEC. 254. USE OF NEW HIRE INFORMATION TO ASSIST IN 

10 ADMINISTRATION OF UNEMPLOYMENT COM11 PENSATION PROGRAMS. 

12 (a) IN GENERAL.—Section 453(j) (42 U.S.C. 653(j)) 

13 is amended by adding at the end the following: 

14 ‘‘(7) INFORMATION COMPARISONS AND DISCLO15 SURE TO ASSIST IN ADMINISTRATION OF UNEMPLOY16 MENT COMPENSATION PROGRAMS.— 

17 ‘‘(A) IN GENERAL.—If, for purposes of ad18 ministering an unemployment compensation 

19 program under Federal or State law, a State 

20 agency responsible for the administration of 

21 such program transmits to the Secretary the 

22 name and social security account number of an 

23 individual, the Secretary shall disclose to the 

24 State agency information on the individual and 

25 the individual’s employer that is maintained in 
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•S 6 IS1S 

1 the National Directory of New Hires, subject to 

2 the succeeding provisions of this paragraph. 

3 ‘‘(B) CONDITION ON DISCLOSURE BY THE

4 SECRETARY.—The Secretary shall make a dis5 closure under subparagraph (A) only to the ex6 tent that the Secretary determines that the dis7 closure would not interfere with the effective 

8 operation of the program under this part. 

9 ‘‘(C) USE AND DISCLOSURE OF INFORMA10 TION BY STATE AGENCIES.— 

11 ‘‘(i) IN GENERAL.—A State agency 

12 may not use or disclose information pro13 vided under this paragraph except for pur14 poses of administering a program referred 

15 to in subparagraph (A). 

16 ‘‘(ii) INFORMATION SECURITY.—A 

17 State agency to which information is pro18 vided under this paragraph shall have in 

19 effect data security and control policies 

20 that the Secretary finds adequate to en21 sure the security of information obtained 

22 under this paragraph and to ensure that 

23 access to such information is restricted to 

24 authorized persons for purposes of author25 ized uses and disclosures. 
179 

•S 6 IS1S 

1 ‘‘(iii) PENALTY FOR MISUSE OF IN2 FORMATION.—An officer or employee of a 

3 State agency who fails to comply with this 

4 subparagraph shall be subject to the sanc5 tions under subsection (l)(2) to the same 

6 extent as if such officer or employee was 

7 an officer or employee of the United 

8 States. 

9 ‘‘(D) PROCEDURAL REQUIREMENTS.—A 

10 State agency requesting information under this 

11 paragraph shall adhere to uniform procedures 

12 established by the Secretary governing informa13 tion requests and data matching under this 

14 paragraph. 

15 ‘‘(E) REIMBURSEMENT OF COSTS.—A 

16 State agency shall reimburse the Secretary, in 

17 accordance with subsection (k)(3), for the costs 

18 incurred by the Secretary in furnishing the in19 formation requested under this paragraph.’’. 

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

21 subsection (a) shall take effect on October 1, 2006. 
180 

•S 6 IS1S 

1 SEC. 255. DECREASE IN AMOUNT OF CHILD SUPPORT AR2 REARAGE TRIGGERING PASSPORT DENIAL. 

3 (a) IN GENERAL.—Section 452(k)(1) (42 U.S.C. 

4 652(k)(1)) is amended by striking ‘‘$5,000’’ and inserting 

5 ‘‘$2,500’’. 

6 (b) CONFORMING AMENDMENT.—Section 454(31) 

7 (42 U.S.C. 654(31)) is amended by striking ‘‘$5,000’’ and 

8 inserting ‘‘$2,500’’. 

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

10 this section shall take effect on October 1, 2006. 

11 SEC. 256. USE OF TAX REFUND INTERCEPT PROGRAM TO 

12 COLLECT PAST-DUE CHILD SUPPORT ON BE13 HALF OF CHILDREN WHO ARE NOT MINORS. 

14 (a) IN GENERAL.—Section 464 (42 U.S.C. 664) is 

15 amended— 

16 (1) in subsection (a)(2)(A), by striking ‘‘(as 

17 that term is defined for purposes of this paragraph 

18 under subsection (c))’’; and 

19 (2) in subsection (c)— 

20 (A) in paragraph (1)— 

21 (i) by striking ‘‘(1) Except as pro22 vided in paragraph (2), as used in’’ and in23 serting ‘‘In’’; and 

24 (ii) by inserting ‘‘(whether or not a 

25 minor)’’ after ‘‘a child’’ each place it ap26 pears; and 
181 

•S 6 IS1S 

1 (B) by striking paragraphs (2) and (3). 

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

3 subsection (a) shall take effect on October 1, 2007. 

4 SEC. 257. GARNISHMENT OF COMPENSATION PAID TO VET5 ERANS FOR SERVICE-CONNECTED DISABIL6 ITIES IN ORDER TO ENFORCE OBLIGATIONS. 

7 (a) IN GENERAL.—Section 459(h)(1)(A)(ii)(V)) (42 

8 U.S.C. 659(h)(1)(A)(ii)(V)) is amended by striking all 

9 that follows ‘‘Armed Forces’’ and inserting ‘‘, except that 

10 such compensation shall not be subject to withholding pur11 suant to this section for payment of alimony unless the 

12 former member to whom it is payable is in receipt of re13 tired or retainer pay and has waived a portion of such 

14 pay in order to receive such compensation;’’. 

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

16 subsection (a) shall take effect on October 1, 2007. 

17 SEC. 258. IMPROVING FEDERAL DEBT COLLECTION PRAC18 TICES. 

19 (a) IN GENERAL.—Section 3716(h)(3) of title 31, 

20 United States Code, is amended to read as follows: 

21 ‘‘(3)(A) Except as provided in subparagraph (B), in 

22 applying this subsection with respect to any debt owed to 

23 a State, subsection (c)(3)(A) shall not apply. 

24 ‘‘(B) Subparagraph (A) shall not apply with respect 

25 to payments owed to an individual under title II of the 
182 

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1 Social Security Act, for purposes of an offset under this 

2 section of such payments against past-due support (as de3 fined in section 464(c) of the Social Security Act, without 

4 regard to paragraphs (2) and (3) of such section 464(c)) 

5 that is being enforced by a State agency administering a 

6 program under part D of title IV of that Act.’’. 

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

8 subsection (a) shall take effect on October 1, 2006. 

9 SEC. 259. MAINTENANCE OF TECHNICAL ASSISTANCE 

10 FUNDING. 

11 Section 452(j) (42 U.S.C. 652(j)) is amended by in12 serting ‘‘or the amount appropriated under this paragraph 

13 for fiscal year 2005, whichever is greater’’ before ‘‘, which 

14 shall be available’’. 

15 SEC. 260. MAINTENANCE OF FEDERAL PARENT LOCATOR 

16 SERVICE FUNDING. 

17 Section 453(o) (42 U.S.C. 653(o)) is amended— 

18 (1) in the first sentence, by inserting ‘‘or the 

19 amount appropriated under this paragraph for fiscal 

20 year 2005, whichever is greater’’ before ‘‘, which 

21 shall be available’’; and 

22 (2) in the second sentence, by striking ‘‘for 

23 each of fiscal years 1997 through 2001’’. 
183 

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1 SEC. 261. IDENTIFICATION AND SEIZURE OF ASSETS HELD 

2 BY MULTISTATE FINANCIAL INSTITUTIONS. 

3 (a) DUTIES OF THE SECRETARY.—Section 452(l) (42 

4 U.S.C. 652(l)) is amended to read as follows: 

5 ‘‘(l) IDENTIFICATION AND SEIZURE OF ASSETS HELD

6 BY MULTISTATE FINANCIAL INSTITUTIONS.— 

7 ‘‘(1) IN GENERAL.—The Secretary, through the 

8 Federal Parent Locator Service, is authorized— 

9 ‘‘(A) to assist State agencies operating 

10 programs under this part and financial institu11 tions doing business in 2 or more States in 

12 reaching agreements regarding the receipt from 

13 such institutions, and the transfer to the State 

14 agencies, of information that may be provided 

15 pursuant to section 466(a)(17)(A)(i) or 

16 469A(a); 

17 ‘‘(B) to perform data matches comparing 

18 information from such State agencies and fi19 nancial institutions entering into such Agree20 ments with respect to individuals owing past21 due support; and 

22 ‘‘(C) to seize assets, held by such financial 

23 institutions, of individuals identified through 

24 such data matches who owe past-due support, 

25 by— 
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1 ‘‘(i) issuing a notice of lien or levy to 

2 such financial institutions requiring them 

3 to encumber such assets for 30 calendar 

4 days and to subsequently transfer such as5 sets to the Secretary (except that the Sec6 retary shall promptly release such lien or 

7 levy within such 30-day period upon re8 quest of the State agencies responsible for 

9 collecting past-due support from such indi10 viduals); and 

11 ‘‘(ii) providing notice to such individ12 uals of the lien or levy upon their assets 

13 and informing them— 

14 ‘‘(I) of their procedural due proc15 ess rights, including the opportunity 

16 to contest such lien or levy to the ap17 propriate State agency; and 

18 ‘‘(II) in the case of jointly owned 

19 assets, of the process by which other 

20 owners may secure their respective 

21 share of such assets, according to 

22 such policies and procedures as the 

23 Secretary may specify with respect to 

24 seizure of such assets. 
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1 ‘‘(2) TRANSFER OF FUNDS TO STATES.—Assets 

2 seized from individuals under paragraph (1)(C) shall 

3 be promptly transferred by the Secretary to the 

4 State agencies responsible for collecting past-due 

5 support from such individuals for distribution pursu6 ant to section 457. 

7 ‘‘(3) RELATIONSHIP TO STATE LAWS.—Not8 withstanding any provision of State law, an indi9 vidual receiving a notice under paragraph (1)(C) 

10 shall have 21 calendar days from the date of such 

11 notice to contest the lien or levy imposed under such 

12 paragraph by requesting an administrative review by 

13 the State agency responsible for collecting past-due 

14 support from such individual. 

15 ‘‘(4) TREATMENT OF DISCLOSURES.—For pur16 poses of section 1113(d) of the Right to Financial 

17 Privacy Act of 1978, a disclosure pursuant to this 

18 subsection shall be considered a disclosure pursuant 

19 to a Federal statute.’’. 

20 (b) STATE DUTIES.— 

21 (1) INDIVIDUALS WITH ASSETS SUBJECT TO

22 FEDERAL SEIZURE.—Section 454 (42 U.S.C. 654), 

23 as amended by section 251(b)(1)(B)(iii), is amend24 ed— 
186 

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1 (A) in paragraph (33), by striking ‘‘and’’ 

2 at the end; 

3 (B) in paragraph (34), by striking the pe4 riod and inserting ‘‘; and’’; and 

5 (C) by inserting after paragraph (34), the 

6 following: 

7 ‘‘(35) provide that the State shall— 

8 ‘‘(A) upon furnishing the Secretary with 

9 information under section 452(l) with respect to 

10 individuals owing past-due support, provide no11 tice to such individuals that their assets held in 

12 financial institutions shall be subject to seizure 

13 to pay such past-due support, and shall— 

14 ‘‘(i) instruct such individuals of the 

15 steps which may be taken to contest the 

16 State’s determination that past-due sup17 port is owed or the amount of the past-due 

18 support; and 

19 ‘‘(ii) include, in the case of jointly 

20 owned assets, a description of the process 

21 by which other owners may secure their 

22 share of such assets, in accordance with 

23 such policies and procedures as the Sec24 retary may specify with respect to seizure 

25 of such assets; 
187 

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1 ‘‘(B) promptly resolve cases in which such 

2 individuals contest the State’s determination 

3 with respect to past-due support, and provide 

4 for expedited refund of any assets erroneously 

5 seized and transferred to the State under such 

6 section 452(l); and 

7 ‘‘(C) except as otherwise specified under 

8 this paragraph or by the Secretary, ensure that 

9 the due process protections afforded under this 

10 paragraph to individuals whose assets are sub11 ject to seizure under section 452(l) are gen12 erally consistent with, and to the extent prac13 ticable conform to, the due process protections 

14 afforded by the State to individuals subject to 

15 offset of tax refunds under section 464.’’. 

16 (2) REIMBURSEMENT OF FEDERAL COSTS.— 

17 Section 453(k)(3) (42 U.S.C. 653(k)(3)) is amend18 ed— 

19 (A) in the paragraph heading, by inserting 

20 ‘‘AND ENFORCEMENT SERVICES’’ after ‘‘INFOR21 MATION’’ 

22 (B) by inserting ‘‘or enforcement services’’ 

23 after ‘‘that receives information’’; 

24 (C) by inserting ‘‘or section 452(l)’’ after 

25 ‘‘pursuant to this section’’; and 
188 

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1 (D) by striking ‘‘in furnishing the informa2 tion’’ and inserting ‘‘in furnishing such infor3 mation or enforcement services’’. 

4 (c) CONFORMING AMENDMENTS.— 

5 (1) STATE LAW REQUIREMENTS.—Section 

6 466(a)(17) (42 U.S.C. 666(a)(17)) is amended— 

7 (A) in subparagraph (A)— 

8 (i) in clause (i), by inserting ‘‘pursu9 ant to section 452(l)’’ after ‘‘and the Fed10 eral Parent Locator Service’’; and 

11 (ii) in clause (ii), by inserting ‘‘issued 

12 by the State agency or by the Secretary 

13 under section 452(l)’’ after ‘‘in response to 

14 a notice of lien or levy’’; and 

15 (B) in subparagraph (C)— 

16 (i) in clause (i), by inserting ‘‘or to 

17 the Federal Parent Locator Service’’ after 

18 ‘‘to the State agency’’; and 

19 (ii) in clause (ii), by striking ‘‘issued 

20 by the State agency’’. 

21 (2) NON LIABILITY FOR FINANCIAL INSTITU22 TIONS.—Section 469A(a) (42 U.S.C. 669a(a)) is 

23 amended by inserting ‘‘section 452(l) or’’ before 

24 ‘‘section 466(a)(17)(A)’’. 
189 

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1 SEC. 262. INFORMATION COMPARISONS WITH INSURANCE 

2 DATA. 

3 (a) DUTIES OF THE SECRETARY.—Section 452 (42 

4 U.S.C. 652) is amended by adding at the end the fol5 lowing: 

6 ‘‘(m) COMPARISONS WITH INSURANCE INFORMA7 TION.— 

8 ‘‘(1) IN GENERAL.—The Secretary, through the 

9 Federal Parent Locator Service, is authorized— 

10 ‘‘(A) to compare information concerning 

11 individuals owing past-due support with infor12 mation maintained by insurers (or their agents) 

13 concerning insurance claims, settlements, 

14 awards, and payments, and 

15 ‘‘(B) to furnish information resulting from 

16 such data matches to the State agencies respon17 sible for collecting child support from such indi18 viduals. 

19 ‘‘(2) LIABILITY.—No insurer (including any 

20 agent of an insurer) shall be liable under any Fed21 eral or State law to any person for any disclosure 

22 provided for under this subsection, or for any other 

23 action taken in good faith in accordance with the 

24 provisions of this subsection.’’. 

25 (b) STATE REIMBURSEMENT OF FEDERAL COSTS.— 

26 Section 453(k)(3) (42 U.S.C. 653(k)(3)), as amended by 
190 

•S 6 IS1S 

1 section 262(b)(2), is amended by striking ‘‘section 452(l)’’ 

2 and inserting ‘‘subsection (l) or (m) of section 452’’. 

3 SEC. 263. TRIBAL ACCESS TO THE FEDERAL PARENT LOCA4 TOR SERVICE. 

5 Section 453(c)(1) (42 U.S.C. 653(c)(1)) is amended 

6 by inserting ‘‘or Indian tribe or tribal organization’’ after 

7 ‘‘any agent or attorney of any State’’. 

8 SEC. 264. REIMBURSEMENT OF SECRETARY’S COSTS OF IN9 FORMATION COMPARISONS AND DISCLO10 SURE FOR ENFORCEMENT OF OBLIGATIONS 

11 ON HIGHER EDUCATION ACT LOANS AND 

12 GRANTS. 

13 Section 453(j)(6)(F) (42 U.S.C. 653(j)(6)(F)) is 

14 amended by striking ‘‘additional’’. 

15 SEC. 265. TECHNICAL AMENDMENT RELATING TO COOPER16 ATIVE AGREEMENTS BETWEEN STATES AND 

17 INDIAN TRIBES. 

18 Section 454(33) (42 U.S.C. 654(33)) is amended by 

19 striking ‘‘that receives funding pursuant to section 428 

20 and’’. 

21 SEC. 266. CLAIMS UPON LONGSHORE AND HARBOR WORK22 ERS’ COMPENSATION FOR CHILD SUPPORT. 

23 (a) IN GENERAL.—Section 17 of the Longshore and 

24 Harbor Workers’ Compensation Act (33 U.S.C. 917) is 

25 amended to read as follows: 
191 

•S 6 IS1S 

1 ‘‘LIENS ON COMPENSATION; CHILD SUPPORT

2 ENFORCEMENT

3 ‘‘SEC. 17. (a) LIENS.—Where a trust fund which 

4 complies with section 302(c) of the Labor Management 

5 Relations Act, 1947 (29 U.S.C. 186(c)) established pursu6 ant to a collective-bargaining agreement in effect between 

7 an employer and an employee covered under this Act has 

8 paid disability benefits to an employee which the employee 

9 is legally obligated to repay by reason of the employee’s 

10 entitlement to compensation under this Act or under a set11 tlement, the Secretary shall authorize a lien on such com12 pensation in favor of the trust fund for the amount of 

13 such payments. 

14 ‘‘(b) CHILD SUPPORT.—Compensation or benefits 

15 due or payable to an individual under this Act (other than 

16 medical benefits) shall be subject, in like manner and to 

17 the same extent as similar compensation or benefits under 

18 a workers’ compensation program if established under 

19 State law— 

20 ‘‘(1) to withholding in accordance with State 

21 law enacted pursuant to subsections (a)(1) and (b) 

22 of section 466 of the Social Security Act and regula23 tions under such subsections; and 

24 ‘‘(2) to any other legal process brought, by a 

25 State agency administering a program under a State 
192 

•S 6 IS1S 

1 plan approved under part D of title IV of the Social 

2 Security Act or by an individual obligee, to enforce 

3 the legal obligation of the individual to provide child 

4 support or alimony.’’. 

5 (b) CONFORMING AMENDMENT.—Section 16 of the 

6 Longshore and Harbor Workers’ Compensation Act (33 

7 U.S.C. 916) is amended— 

8 (1) by striking ‘‘No’’ and inserting ‘‘Except as 

9 provided by this Act, no’’; and 

10 (2) by striking ‘‘, except as provided by this 

11 Act,’’ after ‘‘under this Act’’. 

12 SEC. 267. STATE OPTION TO USE STATEWIDE AUTOMATED 

13 DATA PROCESSING AND INFORMATION RE14 TRIEVAL SYSTEM FOR INTERSTATE CASES. 

15 Section 466(a)(14)(A)(iii) (42 U.S.C. 

16 666(a)(14)(A)(iii)) is amended by inserting before the 

17 semicolon the following: ‘‘(but the assisting State may es18 tablish a corresponding case based on such other State’s 

19 request for assistance)’’. 

20 SEC. 268. STATE LAW REQUIREMENT CONCERNING THE 

21 UNIFORM INTERSTATE FAMILY SUPPORT ACT 

22 (UIFSA). 

23 (a) IN GENERAL.—Section 466(f) (42 U.S.C. 666(f)) 

24 is amended— 
193 

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1 (1) by striking ‘‘and as in effect on August 22, 

2 1996,’’; and 

3 (2) by striking ‘‘adopted as of such date’’ and 

4 inserting ‘‘adopted as of August, 2001’’. 

5 (b) FULL FAITH AND CREDIT FOR CHILD SUPPORT

6 ORDERS.—Section 1738B of title 28, United States Code, 

7 is amended— 

8 (1) by striking subsection (d) and inserting the 

9 following: 

10 ‘‘(d) CONTINUING EXCLUSIVE JURISDICTION.— 

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

12 court of a State that has made a child support order 

13 consistent with this section has continuing, exclusive 

14 jurisdiction to modify its order if the order is the 

15 controlling order and— 

16 ‘‘(A) the State is the child’s State or the 

17 residence of any individual contestant; or 

18 ‘‘(B) if the State is not the residence of 

19 the child or an individual contestant, the con20 testants consent in a record or in open court 

21 that the court may continue to exercise jurisdic22 tion to modify its order. 

23 ‘‘(2) REQUIREMENT.—A court may not exercise 

24 its continuing, exclusive jurisdiction to modify the 

25 order if the court of another State, acting in accord-
194 

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1 ance with subsections (e) and (f), has made a modi2 fication of the order.’’; 

3 (2) in subsection (e)(2)— 

4 (A) in subparagraph (A), by striking ‘‘be5 cause’’ and all that follows through the semi6 colon and inserting ‘‘pursuant to paragraph (1) 

7 or (2) of subsection (d);’’ and 

8 (B) in subparagraph (B), by inserting 

9 ‘‘with jurisdiction over at least 1 of the indi10 vidual contestants or that is located in the 

11 child’s State’’ after ‘‘another State’’; 

12 (3) in subsection (f)— 

13 (A) in the subsection heading, by striking 

14 ‘‘RECOGNITION OF’’ and inserting ‘‘DETER15 MINATION OF CONTROLLING’’; 

16 (B) in the matter preceding paragraph (1), 

17 by striking ‘‘shall apply’’ and all that follows 

18 through the colon and inserting ‘‘having per19 sonal jurisdiction over both individual contest20 ants shall apply the following rules and by 

21 order shall determine which order controls:’’ 

22 (C) in paragraph (1), by striking ‘‘must 

23 be’’ and inserting ‘‘controls and must be so’’; 

24 (D) in paragraph (2), by striking ‘‘must be 

25 recognized’’ and inserting ‘‘controls’’; 
195 

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1 (E) in paragraph (3), by striking ‘‘must be 

2 recognized’’ each place it appears and inserting 

3 ‘‘controls’’; 

4 (F) in paragraph (4)— 

5 (i) by striking ‘‘may’’ and inserting 

6 ‘‘shall’’; and 

7 (ii) by striking ‘‘must be recognized’’ 

8 and inserting ‘‘controls’’; and 

9 (G) by striking paragraph (5); 

10 (4) by striking subsection (g) and inserting the 

11 following: 

12 ‘‘(g) ENFORCEMENT OF MODIFIED ORDERS.—If a 

13 child support order issued by a court of a State is modified 

14 by a court of another State which properly assumed juris15 diction, the issuing court— 

16 ‘‘(1) may enforce its order that was modified 

17 only as to arrears and interest accruing before the 

18 modification; 

19 ‘‘(2) may provide appropriate relief for viola20 tions of its order which occurred before the effective 

21 date of the modification; and 

22 ‘‘(3) shall recognize the modifying order of the 

23 other State for the purpose of enforcement.’’; 

24 (5) in subsection (h)— 
196 

•S 6 IS1S 

1 (A) in paragraph (1), by striking ‘‘and 

2 (3)’’ and inserting ‘‘, (3), and (4)’’; 

3 (B) in paragraph (2), by inserting ‘‘the 

4 computation and payment of arrearages, and 

5 the accrual of interest on the arrearages,’’ after 

6 ‘‘obligations of support,’’; and 

7 (C) by adding at the end the following: 

8 ‘‘(4) PROSPECTIVE APPLICATION.—After a 

9 court determines which is the controlling order and 

10 issues an order consolidating arrears, if any, a court 

11 shall prospectively apply the law of the State issuing 

12 the controlling order, including that State’s law with 

13 respect to interest on arrears, current and future 

14 support, and consolidated arrears.’’; and 

15 (6) in subsection (i), by inserting ‘‘and sub16 section (d)(2) does not apply’’ after ‘‘issuing State’’. 

17 SEC. 269. GRANTS TO STATES FOR ACCESS AND VISITATION 

18 PROGRAMS. 

19 (a) AUTHORITY TO MAKE GRANTS TO INDIAN

20 TRIBES.—Section 469B (42 U.S.C. 669b) is amended— 

21 (1) in the section heading, by inserting ‘‘AND

22 INDIAN TRIBES’’ after ‘‘STATES’’; and 

23 (2) in subsection (a), by inserting ‘‘and Indian 

24 tribes or tribal organizations’’ after ‘‘to enable 

25 States’’. 
197 

•S 6 IS1S 

1 (b) AMOUNT OF GRANTS.—Section 469B(b) (42 

2 U.S.C. 669b(b)) is amended to read as follows: 

3 ‘‘(b) AMOUNT OF GRANTS.— 

4 ‘‘(1) GRANTS TO STATES.—The amount of the 

5 grant to be made to a State under this section for 

6 a fiscal year shall be an amount equal to the lesser 

7 of— 

8 ‘‘(A) 90 percent of State expenditures dur9 ing the fiscal year for activities described in 

10 subsection (a); or 

11 ‘‘(B) the allotment of the State under sub12 section (c) for the fiscal year. 

13 ‘‘(2) GRANTS TO INDIAN TRIBES.—An Indian 

14 tribe or tribal organization operating a program 

15 under section 455 that has operated such program 

16 throughout the preceding fiscal year and has an ap17 plication under this section approved by the Sec18 retary shall receive a grant under this section for a 

19 fiscal year in an amount equal to the allotment of 

20 such Indian tribe or tribal organization under sub21 section (c)(2) for the fiscal year.’’. 

22 (c) ALLOTMENTS.—Section 469B(c) (42 U.S.C. 

23 669b(c)) is amended to read as follows: 

24 ‘‘(c) ALLOTMENTS.— 

25 ‘‘(1) ALLOTMENTS TO STATES.— 
198 

•S 6 IS1S 

1 ‘‘(A) IN GENERAL.—Subject to the sub2 paragraph (C), the allotment of a State for a 

3 fiscal year is the amount that bears the same 

4 ratio to the amount specified in subparagraph 

5 (B) for such fiscal year as the number of chil6 dren in the State living with only 1 parent 

7 bears to the total number of such children in all 

8 States. 

9 ‘‘(B) AMOUNT AVAILABLE FOR ALLOT10 MENT.—For purposes of subparagraph (A), the 

11 amount specified in this subparagraph is the 

12 following amount, reduced by the total allot13 ments to Indian tribes or tribal organizations in 

14 accordance with paragraph (2): 

15 ‘‘(i) $12,000,000 for fiscal year 2006. 

16 ‘‘(ii) $14,000,000 for fiscal year 2007. 

17 ‘‘(iii) $16,000,000 for fiscal year 

18 2008. 

19 ‘‘(iv) $20,000,000 for fiscal year 2009 

20 and each succeeding fiscal year. 

21 ‘‘(C) MINIMUM STATE ALLOTMENT.—The 

22 Secretary shall adjust allotments to States 

23 under subparagraph (A) as necessary to ensure 

24 that no State is allotted less than— 

25 ‘‘(i) $120,000 for fiscal year 2006; 
199 

•S 6 IS1S 

1 ‘‘(ii) $140,000 for fiscal year 2007; 

2 ‘‘(iii) $160,000 for fiscal year 2008; 

3 and 

4 ‘‘(iv) $180,000 for fiscal year 2009 

5 and each succeeding fiscal year. 

6 ‘‘(2) ALLOTMENTS TO INDIAN TRIBES.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (C), the allotment of an Indian tribe or 

9 tribal organization described in subsection 

10 (b)(2) for a fiscal year is an amount that bears 

11 the same ratio to the amount specified in sub12 paragraph (B) for such fiscal year as the num13 ber of children in the Indian tribe or tribal or14 ganization living with only 1 parent bears to the 

15 total number of such children in all Indian 

16 tribes and tribal organizations eligible to receive 

17 grants under this section for such year. 

18 ‘‘(B) AMOUNT AVAILABLE FOR ALLOT19 MENT.—For purposes of subparagraph (A), the 

20 amount available under this subparagraph is an 

21 amount, deducted from the amount specified in 

22 paragraph (1)(B), not to exceed— 

23 ‘‘(i) $250,000 for fiscal year 2006; 

24 ‘‘(ii) $600,000 for fiscal year 2007; 
200 

•S 6 IS1S 

1 ‘‘(iii) $800,000 for fiscal year 2008; 

2 and 

3 ‘‘(iv) $1,670,000 for fiscal year 2009 

4 and each succeeding year. 

5 ‘‘(C) MINIMUM AND MAXIMUM TRIBAL AL6 LOTMENT.—The Secretary shall adjust allot7 ments to Indian tribes and tribal organizations 

8 under subparagraph (A) as necessary to ensure 

9 that no Indian tribe or tribal organization is al10 lotted, for a fiscal year, an amount which is less 

11 than $10,000 or more than the minimum State 

12 allotment for such fiscal year.’’. 

13 (d) ADMINISTRATION.—Section 469B(e) (42 U.S.C. 

14 669b(e)) is amended to read as follows: 

15 ‘‘(e) ADMINISTRATION.— 

16 ‘‘(1) GRANTS TO STATES.—Each State to which 

17 a grant is made under this section— 

18 ‘‘(A) may administer State programs fund19 ed with the grant, directly or through grants to 

20 or contracts with courts, local public agencies, 

21 or nonprofit private entities; and 

22 ‘‘(B) shall not be required to operate such 

23 programs on a statewide basis. 

24 ‘‘(2) GRANTS TO STATES OR INDIAN TRIBES.— 

25 Each State or Indian tribe or tribal organization to 
201 

•S 6 IS1S 

1 which a grant is made under this section shall mon2 itor, evaluate, and report on such programs in ac3 cordance with regulations prescribed by the Sec4 retary.’’. 

5 SEC. 270. TIMING OF CORRECTIVE ACTION YEAR FOR 

6 STATE NONCOMPLIANCE WITH CHILD SUP7 PORT ENFORCEMENT PROGRAM REQUIRE8 MENTS. 

9 (a) IN GENERAL.—Section 409(a)(8) (42 U.S.C. 

10 609(a)(8)) is amended— 

11 (1) in subparagraph (A)— 

12 (A) in the matter preceding clause (i)(I), 

13 by striking ‘‘in a fiscal year’’ and inserting ‘‘for 

14 a fiscal year’’; and 

15 (B) in clause (ii)— 

16 (i) in the matter preceding subclause 

17 (I), by striking ‘‘that, with respect to the 

18 succeeding fiscal year—’’ and inserting 

19 ‘‘that, with respect to the period described 

20 in subparagraph (D)’’; and 

21 (ii) in the matter following subclause 

22 (II), by striking ‘‘the end of such suc23 ceeding fiscal year’’ and inserting ‘‘the end 

24 of the period described in subparagraph 

25 (D)’’; and 
202 

•S 6 IS1S 

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

2 ‘‘(D) PERIOD DESCRIBED.—Subject to 

3 subparagraph (E), for purposes of this para4 graph, the period described in this subpara5 graph is the period that begins with the date on 

6 which the Secretary makes a finding described 

7 in subparagraph (A)(i) with respect to State 

8 performance in a fiscal year and ends on Sep9 tember 30 of the fiscal year following the fiscal 

10 year in which the Secretary makes such a find11 ing. 

12 ‘‘(E) NO PENALTY IF STATE CORRECTS

13 NONCOMPLIANCE IN FINDING YEAR.—The Sec14 retary shall not take a reduction described in 

15 subparagraph (A) with respect to a noncompli16 ance described in clause (i) of that subpara17 graph if the Secretary determines that the 

18 State has corrected the noncompliance in the 

19 fiscal year in which the Secretary makes the 

20 finding of the noncompliance.’’. 

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

22 subsection (a) shall be effective with respect to determina23 tions of State compliance for fiscal year 2002 and suc24 ceeding fiscal years. 
203 

•S 6 IS1S 

1 (c) SPECIAL RULE FOR FISCAL YEAR 2001.—Not2 withstanding any other provision of law, the Secretary 

3 shall not take against amounts otherwise payable to a 

4 State, a reduction described in section 409(a)(8)(A) of the 

5 Social Security Act (42 U.S.C. 609(a)(8)(A)) with respect 

6 to a noncompliance described in such section occurring in 

7 fiscal year 2001 if the Secretary determines that the State 

8 has corrected such noncompliance in fiscal year 2002 or 

9 2003. 

10 Subtitle D—Child Welfare 

11 SEC. 275. EXTENSION OF AUTHORITY TO APPROVE DEM12 ONSTRATION PROJECTS. 

13 Section 1130(a)(2) (42 U.S.C. 1320a–9(a)(2)) is 

14 amended by striking ‘‘2003’’ and inserting ‘‘2010’’. 

15 SEC. 276. REMOVAL OF COMMONWEALTH OF PUERTO RICO 

16 FOSTER CARE FUNDS FROM LIMITATION ON 

17 PAYMENTS. 

18 Section 1108(a)(2) (42 U.S.C. 1308(a)(2)), as 

19 amended by section 226(b)(2), is amended— 

20 (1) by striking ‘‘Paragraph (1)’’ and inserting 

21 the following: 

22 ‘‘(A) IN GENERAL.—Paragraph (1)’’; 

23 (2) in subparagraph (A) (as added by para24 graph (1)), by striking ‘‘or 418(a)(4)(B)’’ and in25 serting ‘‘418(a)(4)(B), or, subject to clause (ii) of 
204 

•S 6 IS1S 

1 subparagraph (B), payments to Puerto Rico de2 scribed in clause (i) of that subparagraph’’ before 

3 the period; and 

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

5 ‘‘(B) CERTAIN PAYMENTS TO PUERTO

6 RICO.— 

7 ‘‘(i) PAYMENTS DESCRIBED.—For 

8 purposes of subparagraph (A), payments 

9 described in this subparagraph are pay10 ments made to Puerto Rico under part E 

11 of title IV with respect to the portion of 

12 foster care payments made to Puerto Rico 

13 for fiscal year 2007 or any fiscal year 

14 thereafter that exceed the total amount of 

15 such payments for fiscal year 2004. 

16 ‘‘(ii) LIMITATION.—The total amount 

17 of payments to Puerto Rico described in 

18 clause (i) that are disregarded under sub19 paragraph (A) may not exceed $6,250,000 

20 for each of fiscal years 2007 through 

21 2010.’’. 

22 SEC. 277. TECHNICAL CORRECTION. 

23 Section 1130(b)(1) (42 U.S.C. 1320a–9(b)(1)) is 

24 amended by striking ‘‘422(b)(9)’’ and inserting 

25 ‘‘422(b)(10)’’. 
205 

•S 6 IS1S 

1 Subtitle E—Supplemental Security 

2 Income 

3 SEC. 281. REVIEW OF STATE AGENCY BLINDNESS AND DIS4 ABILITY DETERMINATIONS. 

5 Section 1633 (42 U.S.C. 1383b) is amended by add6 ing at the end the following: 

7 ‘‘(e)(1) The Commissioner of Social Security shall re8 view determinations, made by State agencies pursuant to 

9 subsection (a) in connection with applications for benefits 

10 under this title on the basis of blindness or disability, that 

11 individuals who have attained 18 years of age are blind 

12 or disabled. Any review by the Commissioner of Social Se13 curity of a State agency determination under this para14 graph shall be made before any action is taken to imple15 ment the determination. 

16 ‘‘(2)(A) In carrying out paragraph (1), the Commis17 sioner of Social Security shall review— 

18 ‘‘(i) with respect to fiscal year 2006, at least 25 

19 percent of all determinations referred to in para20 graph (1) that are made in such fiscal year; and 

21 ‘‘(ii) with respect to fiscal years after fiscal year 

22 2006, at least 50 percent of all such determinations 

23 that are made in each such fiscal year. 

24 ‘‘(B) In conducting reviews pursuant to subpara25 graph (A), the Commissioner of Social Security shall, to 
206 

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1 the extent feasible, select for review those determinations 

2 which the Commissioner of Social Security identifies as 

3 being the most likely to be incorrect.’’. 

4 Subtitle F—Transitional Medical 

5 Assistance 

6 SEC. 285. EXTENSION AND SIMPLIFICATION OF THE TRAN7 SITIONAL MEDICAL ASSISTANCE PROGRAM 

8 (TMA). 

9 (a) OPTION OF CONTINUOUS ELIGIBILITY FOR 12 

10 MONTHS; OPTION OF CONTINUING COVERAGE FOR UP TO

11 AN ADDITIONAL YEAR.— 

12 (1) OPTION OF CONTINUOUS ELIGIBILITY FOR

13 12 MONTHS BY MAKING REPORTING REQUIREMENTS

14 OPTIONAL.—Section 1925(b) (42 U.S.C. 1396r– 

15 6(b)) is amended— 

16 (A) in paragraph (1), by inserting ‘‘, at the 

17 option of a State,’’ after ‘‘and which’’; 

18 (B) in paragraph (2)(A), by inserting 

19 ‘‘Subject to subparagraph (C):’’ after ‘‘(A) NO20 TICES.—’’; 

21 (C) in paragraph (2)(B), by inserting 

22 ‘‘Subject to subparagraph (C):’’ after ‘‘(B) RE23 PORTING REQUIREMENTS.—’’; 

24 (D) by adding at the end the following: 
207 

•S 6 IS1S 

1 ‘‘(C) STATE OPTION TO WAIVE NOTICE

2 AND REPORTING REQUIREMENTS.—A State 

3 may waive some or all of the reporting require4 ments under clauses (i) and (ii) of subpara5 graph (B). Insofar as it waives such a reporting 

6 requirement, the State need not provide for a 

7 notice under subparagraph (A) relating to such 

8 requirement.’’; and 

9 (E) in paragraph (3)(A)(iii), by inserting 

10 ‘‘the State has not waived under paragraph 

11 (2)(C) the reporting requirement with respect 

12 to such month under paragraph (2)(B) and if’’ 

13 after ‘‘6-month period if’’. 

14 (2) STATE OPTION TO EXTEND ELIGIBILITY

15 FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDI16 TIONAL MONTHS.—Section 1925 (42 U.S.C. 1396r– 

17 6) is further amended— 

18 (A) by redesignating subsections (c) 

19 through (f) as subsections (d) through (g), re20 spectively; and 

21 (B) by inserting after subsection (b) the 

22 following: 

23 ‘‘(c) STATE OPTION OF UP TO 12 MONTHS OF ADDI24 TIONAL ELIGIBILITY.— 
208 

•S 6 IS1S 

1 ‘‘(1) IN GENERAL.—Notwithstanding any other 

2 provision of this title, each State plan approved 

3 under this title may provide, at the option of the 

4 State, that the State shall offer to each family which 

5 received assistance during the entire 6-month period 

6 under subsection (b) and which meets the applicable 

7 requirement of paragraph (2), in the last month of 

8 the period the option of extending coverage under 

9 this subsection for the succeeding period not to ex10 ceed 12 months. 

11 ‘‘(2) INCOME RESTRICTION.—The option under 

12 paragraph (1) shall not be made available to a fam13 ily for a succeeding period unless the State deter14 mines that the family’s average gross monthly earn15 ings (less such costs for such child care as is nec16 essary for the employment of the caretaker relative) 

17 as of the end of the 6-month period under sub18 section (b) does not exceed 185 percent of the offi19 cial poverty line (as defined by the Office of Man20 agement and Budget, and revised annually in ac21 cordance with section 673(2) of the Omnibus Budget 

22 Reconciliation Act of 1981) applicable to a family of 

23 the size involved. 

24 ‘‘(3) APPLICATION OF EXTENSION RULES.— 

25 The provisions of paragraphs (2), (3), (4), and (5) 
209 

•S 6 IS1S 

1 of subsection (b) shall apply to the extension pro2 vided under this subsection in the same manner as 

3 they apply to the extension provided under sub4 section (b)(1), except that for purposes of this sub5 section— 

6 ‘‘(A) any reference to a 6-month period 

7 under subsection (b)(1) is deemed a reference 

8 to the extension period provided under para9 graph (1) and any deadlines for any notices or 

10 reporting and the premium payment periods 

11 shall be modified to correspond to the appro12 priate calendar quarters of coverage provided 

13 under this subsection; and 

14 ‘‘(B) any reference to a provision of sub15 section (a) or (b) is deemed a reference to the 

16 corresponding provision of subsection (b) or of 

17 this subsection, respectively.’’. 

18 (b) STATE OPTION TO WAIVE RECEIPT OF MED19 ICAID FOR 3 OF PREVIOUS 6 MONTHS TO QUALIFY FOR

20 TMA.—Section 1925(a)(1) (42 U.S.C. 1396r–6(a)(1)) is 

21 amended by adding at the end the following: ‘‘A State 

22 may, at its option, also apply the previous sentence in the 

23 case of a family that was receiving such aid for fewer than 

24 3 months, or that had applied for and was eligible for such 
210 

•S 6 IS1S 

1 aid for fewer than 3 months, during the 6 immediately 

2 preceding months described in such sentence.’’. 

3 (c) EXTENSION OF SUNSET FOR TMA.— 

4 (1) IN GENERAL.—Subsection (g) of section 

5 1925 (42 U.S.C. 1396r–6), as so redesignated under 

6 subsection (a)(2)(A), is further redesignated as sub7 section (i) and is amended by striking ‘‘2003’’ and 

8 inserting ‘‘2010’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)), as so 

11 amended, is amended by striking ‘‘September 30, 

12 2003’’ and inserting ‘‘the last date (if any) on which 

13 section 1925 applies under subsection (i) of that sec14 tion’’. 

15 (d) CMS REPORT ON ENROLLMENT AND PARTICIPA16 TION RATES UNDER TMA.—Section 1925 (42 U.S.C. 

17 1396r–6), as amended by subsections (a)(2)(A) and 

18 (c)(1), is amended by inserting after subsection (f) the fol19 lowing: 

20 ‘‘(g) ADDITIONAL PROVISIONS.— 

21 ‘‘(1) COLLECTION AND REPORTING OF PARTICI22 PATION INFORMATION.—Each State shall— 

23 ‘‘(A) collect and submit to the Secretary, 

24 in a format specified by the Secretary, informa25 tion on average monthly enrollment and average 
211 

•S 6 IS1S 

1 monthly participation rates for adults and chil2 dren under this section; and 

3 ‘‘(B) make such information publicly avail4 able. 

5 Such information shall be submitted under subpara6 graph (A) at the same time and frequency in which 

7 other enrollment information under this title is sub8 mitted to the Secretary. Using such information, the 

9 Secretary shall submit to Congress annual reports 

10 concerning such rates.’’. 

11 (e) COORDINATION OF WORK.—Section 1925(g) (42 

12 U.S.C. 1396r–6(g)), as added by subsection (d), is amend13 ed by adding at the end the following: 

14 ‘‘(2) COORDINATION WITH ADMINISTRATION

15 FOR CHILDREN AND FAMILIES.—The Administrator 

16 of the Centers for Medicare & Medicaid Services, in 

17 carrying out this section, shall work with the Assist18 ant Secretary for the Administration for Children 

19 and Families to develop guidance or other technical 

20 assistance for States regarding best practices in 

21 guaranteeing access to transitional medical assist22 ance under this section.’’. 

23 (f) ELIMINATION OF TMA REQUIREMENT FOR

24 STATES THAT EXTEND COVERAGE TO CHILDREN AND

25 PARENTS THROUGH 185 PERCENT OF POVERTY.— 
212 

•S 6 IS1S 

1 (1) IN GENERAL.—Section 1925 (42 U.S.C. 

2 1396r–6) is amended by inserting after subsection 

3 (g), as added by subsection (d), the following: 

4 ‘‘(h) PROVISIONS OPTIONAL FOR STATES THAT EX5 TEND COVERAGE TO CHILDREN AND PARENTS THROUGH

6 185 PERCENT OF POVERTY.—A State may meet (but is 

7 not required to meet) the requirements of subsections (a) 

8 and (b) if it provides for medical assistance under section 

9 1931 to families (including both children and caretaker 

10 relatives) the average gross monthly earning of which (less 

11 such costs for such child care as is necessary for the em12 ployment of a caretaker relative) is at or below a level that 

13 is at least 185 percent of the official poverty line (as de14 fined by the Office of Management and Budget, and re15 vised annually in accordance with section 673(2) of the 

16 Omnibus Budget Reconciliation Act of 1981) applicable 

17 to a family of the size involved.’’. 

18 (2) CONFORMING AMENDMENTS.—Section 1925 

19 (42 U.S.C. 1396r–6) is amended, in subsections 

20 (a)(1) and (b)(1), by inserting ‘‘, but subject to sub21 section (h),’’ after ‘‘Notwithstanding any other pro22 vision of this title,’’ each place it appears. 

23 (g) REQUIREMENT OF NOTICE FOR ALL FAMILIES

24 LOSING TANF.—Subsection (a)(2) of section 1925 (42 
213 

•S 6 IS1S 

1 U.S.C. 1396r–6) is amended by adding at the end the fol2 lowing flush sentences: 

3 ‘‘Each State shall provide, to families whose aid 

4 under part A or E of title IV has terminated but 

5 whose eligibility for medical assistance under this 

6 title continues, written notice of their ongoing eligi7 bility for such medical assistance. If a State makes 

8 a determination that any member of a family whose 

9 aid under part A or E of title IV is being terminated 

10 is also no longer eligible for medical assistance under 

11 this title, the notice of such determination shall be 

12 supplemented by a 1-page notification form describ13 ing the different ways in which individuals and fami14 lies may qualify for such medical assistance and ex15 plaining that individuals and families do not have to 

16 be receiving aid under part A or E of title IV in 

17 order to qualify for such medical assistance. Such 

18 notice shall further be supplemented by information 

19 on how to apply for child health assistance under the 

20 State children’s health insurance program under 

21 title XXI and how to apply for medical assistance 

22 under this title.’’. 

23 (h) EXTENDING USE OF OUTSTATIONED WORKERS

24 TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL

25 ASSISTANCE.—Section 1902(a)(55) (42 U.S.C. 
214 

•S 6 IS1S 

1 1396a(a)(55)) is amended by inserting ‘‘and under section 

2 1931’’ after ‘‘(a)(10)(A)(ii)(IX)’’. 

3 (i) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—Except as provided in this 

5 subsection, the amendments made by this section 

6 shall apply to calendar quarters beginning on or 

7 after October 1, 2005, without regard to whether or 

8 not final regulations to carry out such amendments 

9 have been promulgated by such date. 

10 (2) NOTICE.—The amendment made by sub11 section (g) shall take effect 6 months after the date 

12 of enactment of this Act. 

13 (3) DELAY PERMITTED FOR STATE PLAN

14 AMENDMENT.—In the case of a State plan for med15 ical assistance under title XIX of the Social Security 

16 Act which the Secretary of Health and Human Serv17 ices determines requires State legislation (other than 

18 legislation appropriating funds) in order for the plan 

19 to meet the additional requirements imposed by the 

20 amendments made by this section, the State plan 

21 shall not be regarded as failing to comply with the 

22 requirements of such title solely on the basis of its 

23 failure to meet these additional requirements before 

24 the first day of the first calendar quarter beginning 

25 after the close of the first regular session of the 
215 

•S 6 IS1S 

1 State legislature that begins after the date of enact2 ment of this Act. For purposes of the previous sen3 tence, in the case of a State that has a 2-year legis4 lative session, each year of such session shall be 

5 deemed to be a separate regular session of the State 

6 legislature. 

7 SEC. 286. PROHIBITION AGAINST COVERING CHILDLESS 

8 ADULTS WITH SCHIP FUNDS. 

9 (a) PROHIBITION ON USE OF SCHIP FUNDS.— 

10 (1) IN GENERAL.—Section 2107 (42 U.S.C. 

11 1397gg) is amended by adding at the end the fol12 lowing: 

13 ‘‘(f) LIMITATION ON WAIVER AUTHORITY.—Notwith14 standing subsection (e)(2)(A) and section 1115(a), the 

15 Secretary may not approve a waiver, experimental, pilot, 

16 or demonstration project, or an amendment to such a 

17 project that has been approved as of the date of enactment 

18 of this subsection, that would allow funds made available 

19 under this title to be used to provide child health assist20 ance or other health benefits coverage to childless adults. 

21 For purposes of the preceding sentence, a caretaker rel22 ative (as such term is defined for purposes of carrying out 

23 section 1931) shall not be considered a childless adult.’’. 

24 (2) CONFORMING AMENDMENT.—Section 

25 2105(c)(1) (42 U.S.C. 1397ee(c)(1)) is amended by 
216 

•S 6 IS1S 

1 inserting before the period the following: ‘‘and may 

2 not include coverage of childless adults. For pur3 poses of the preceding sentence, a caretaker relative 

4 (as such term is defined for purposes of carrying out 

5 section 1931) shall not be considered a childless 

6 adult.’’. 

7 (b) RULE OF CONSTRUCTION.—Nothing in this sec8 tion or the amendments made by this section shall be con9 strued to— 

10 (1) authorize the waiver of any provision of title 

11 XIX or XXI of the Social Security Act (42 U.S.C. 

12 1396 et seq., 1397aa et seq.) that is not otherwise 

13 authorized to be waived under such titles or under 

14 title XI of such Act (42 U.S.C. 1301 et seq.) as of 

15 the date of enactment of this Act; or 

16 (2) imply congressional approval of any waiver, 

17 experimental, pilot, or demonstration project affect18 ing the medicaid program under title XIX of the So19 cial Security Act or the State children’s health in20 surance program under title XXI of such Act that 

21 has been approved as of such date of enactment. 

22 (c) EFFECTIVE DATE.—This section and the amend23 ments made by this section take effect on the date of en24 actment of this Act and apply to proposals to conduct a 

25 waiver, experimental, pilot, or demonstration project af-
217 

•S 6 IS1S 

1 fecting the medicaid program under title XIX of the Social 

2 Security Act or the State children’s health insurance pro3 gram under title XXI of such Act, and to any proposals 

4 to amend such projects, that are approved or extended on 

5 or after such date of enactment. 

6 Subtitle G—Effective Date 

7 SEC. 291. EFFECTIVE DATE. 

8 (a) IN GENERAL.—Subject to subsection (b) and ex9 cept as otherwise provided, the amendments made by this 

10 Act take effect on the date of enactment of this Act. 

11 (b) EXCEPTION.—In the case of a State plan under 

12 part A or D of title IV of the Social Security Act which 

13 the Secretary determines requires State legislation in 

14 order for the plan to meet the additional requirements im15 posed by the amendments made by this Act, the effective 

16 date of the amendments imposing the additional require17 ments shall be 3 months after the first day of the first 

18 calendar quarter beginning after the close of the first reg19 ular session of the State legislature that begins after the 

20 date of enactment of this Act. For purposes of the pre21 ceding sentence, in the case of a State that has a 2-year 

22 legislative session, each year of the session shall be consid23 ered to be a separate regular session of the State legisla24 ture. 
218 

•S 6 IS1S 

1 SEC. 292. EXTENSION THROUGH REMAINDER OF FISCAL 

2 YEAR 2005. 

3 Except as otherwise provided in this Act and the 

4 amendments made by this Act, activities authorized by 

5 part A of title IV of the Social Security Act, and by sec6 tions 429A, 510, 1108(b), and 1925 of such Act, shall 

7 continue through September 30, 2005, in the manner au8 thorized for fiscal year 2004, notwithstanding section 

9 1902(e)(1)(A) of such Act, and out of any money in the 

10 Treasury of the United States not otherwise appropriated, 

11 there are hereby appropriated such sums as may be nec12 essary for such purpose. Grants and payments may be 

13 made pursuant to this authority through the fourth quar14 ter of fiscal year 2005 at the level provided for such activi15 ties through the fourth quarter of fiscal year 2004. 

16 TITLE III—CARE ACT 

17 SEC. 300. SHORT TITLE; ETC. 

18 (a) SHORT TITLE.—This title may be cited as the 

19 ‘‘CARE Act of 2005’’. 

20 (b) AMENDMENT OF 1986 CODE.—Except as other21 wise expressly provided, whenever in this title an amend22 ment or repeal is expressed in terms of an amendment 

23 to, or repeal of, a section or other provision, the reference 

24 shall be considered to be made to a section or other provi25 sion of the Internal Revenue Code of 1986. 
219 

•S 6 IS1S 

1 Subtitle A—Charitable Giving 

2 Incentives 

3 SEC. 301. DEDUCTION FOR PORTION OF CHARITABLE CON4 TRIBUTIONS TO BE ALLOWED TO INDIVID5 UALS WHO DO NOT ITEMIZE DEDUCTIONS. 

6 (a) IN GENERAL.—Section 170 (relating to chari7 table, etc., contributions and gifts) is amended by redesig8 nating subsection (o) as subsection (p) and by inserting 

9 after subsection (n) the following new subsection: 

10 ‘‘(o) DEDUCTION FOR INDIVIDUALS NOT ITEMIZING

11 DEDUCTIONS.—In the case of an individual who does not 

12 itemize deductions for any taxable year, there shall be 

13 taken into account as a direct charitable deduction under 

14 section 63 an amount equal to the amount allowable under 

15 subsection (a) for the taxable year for cash contributions, 

16 to the extent that such contributions exceed $250 ($500 

17 in the case of a joint return) but do not exceed $500 

18 ($1,000 in the case of a joint return).’’. 

19 (b) DIRECT CHARITABLE DEDUCTION.— 

20 (1) IN GENERAL.—Subsection (b) of section 63 

21 (defining taxable income) is amended by striking 

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

23 period at the end of paragraph (2) and inserting ‘‘, 

24 and’’, and by adding at the end the following new 

25 paragraph: 
220 

•S 6 IS1S 

1 ‘‘(3) the direct charitable deduction.’’. 

2 (2) DEFINITION.—Section 63 is amended by re3 designating subsection (g) as subsection (h) and by 

4 inserting after subsection (f) the following new sub5 section: 

6 ‘‘(g) DIRECT CHARITABLE DEDUCTION.—For pur7 poses of this section, the term ‘direct charitable deduction’ 

8 means that portion of the amount allowable under section 

9 170(a) which is taken as a direct charitable deduction for 

10 the taxable year under section 170(o).’’. 

11 (3) CONFORMING AMENDMENT.—Subsection (d) 

12 of section 63 is amended by striking ‘‘and’’ at the 

13 end of paragraph (1), by striking the period at the 

14 end of paragraph (2) and inserting ‘‘, and’’, and by 

15 adding at the end the following new paragraph: 

16 ‘‘(3) the direct charitable deduction.’’. 

17 (c) STUDY.— 

18 (1) IN GENERAL.—The Secretary of the Treas19 ury shall study the effect of the amendments made 

20 by this section on increased charitable giving and 

21 taxpayer compliance, including a comparison of tax22 payer compliance between taxpayers who itemize 

23 their charitable contributions and taxpayers who 

24 claim a direct charitable deduction. 
221 

•S 6 IS1S 

1 (2) REPORT.—By not later than December 31, 

2 2006, the Secretary of the Treasury shall report on 

3 the study required under paragraph (1) to the Com4 mittee on Finance of the Senate and the Committee 

5 on Ways and Means of the House of Representa6 tives. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2004, and before January 1, 2007. 

10 SEC. 302. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE11 TIREMENT ACCOUNTS FOR CHARITABLE 

12 PURPOSES. 

13 (a) IN GENERAL.—Subsection (d) of section 408 (re14 lating to individual retirement accounts) is amended by 

15 adding at the end the following new paragraph: 

16 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR17 POSES.— 

18 ‘‘(A) IN GENERAL.—No amount shall be 

19 includible in gross income by reason of a quali20 fied charitable distribution. 

21 ‘‘(B) QUALIFIED CHARITABLE DISTRIBU22 TION.—For purposes of this paragraph, the 

23 term ‘qualified charitable distribution’ means 

24 any distribution from an individual retirement 

25 account— 
222 

•S 6 IS1S 

1 ‘‘(i) which is made directly by the 

2 trustee— 

3 ‘‘(I) to an organization described 

4 in section 170(c), or 

5 ‘‘(II) to a split-interest entity, 

6 and 

7 ‘‘(ii) which is made on or after— 

8 ‘‘(I) in the case of any distribu9 tion described in clause (i)(I), the 

10 date that the individual for whose 

11 benefit the account is maintained has 

attained age 701 12 ⁄2, and 

13 ‘‘(II) in the case of any distribu14 tion described in clause (i)(II), the 

15 date that such individual has attained 

age 591 16 ⁄2. 

17 A distribution shall be treated as a qualified 

18 charitable distribution only to the extent that 

19 the distribution would be includible in gross in20 come without regard to subparagraph (A) and, 

21 in the case of a distribution to a split-interest 

22 entity, only if no person holds an income inter23 est in the amounts in the split-interest entity 

24 attributable to such distribution other than one 

25 or more of the following: the individual for 
223 

•S 6 IS1S 

1 whose benefit such account is maintained, the 

2 spouse of such individual, or any organization 

3 described in section 170(c). 

4 ‘‘(C) CONTRIBUTIONS MUST BE OTHER5 WISE DEDUCTIBLE.—For purposes of this para6 graph— 

7 ‘‘(i) DIRECT CONTRIBUTIONS.—A dis8 tribution to an organization described in 

9 section 170(c) shall be treated as a quali10 fied charitable distribution only if a deduc11 tion for the entire distribution would be al12 lowable under section 170 (determined 

13 without regard to subsection (b) thereof 

14 and this paragraph). 

15 ‘‘(ii) SPLIT-INTEREST GIFTS.—A dis16 tribution to a split-interest entity shall be 

17 treated as a qualified charitable distribu18 tion only if a deduction for the entire value 

19 of the interest in the distribution for the 

20 use of an organization described in section 

21 170(c) would be allowable under section 

22 170 (determined without regard to sub23 section (b) thereof and this paragraph). 

24 ‘‘(D) APPLICATION OF SECTION 72.—Not25 withstanding section 72, in determining the ex-
224 

•S 6 IS1S 

1 tent to which a distribution is a qualified chari2 table distribution, the entire amount of the dis3 tribution shall be treated as includible in gross 

4 income without regard to subparagraph (A) to 

5 the extent that such amount does not exceed 

6 the aggregate amount which would have been so 

7 includible if all amounts were distributed from 

8 all individual retirement accounts treated as 1 

9 contract under paragraph (2)(A) for purposes 

10 of determining the inclusion on such distribu11 tion under section 72. Proper adjustments shall 

12 be made in applying section 72 to other dis13 tributions in such taxable year and subsequent 

14 taxable years. 

15 ‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST

16 ENTITIES.— 

17 ‘‘(i) CHARITABLE REMAINDER

18 TRUSTS.—Notwithstanding section 664(b), 

19 distributions made from a trust described 

20 in subparagraph (G)(i) shall be treated as 

21 ordinary income in the hands of the bene22 ficiary to whom is paid the annuity de23 scribed in section 664(d)(1)(A) or the pay24 ment described in section 664(d)(2)(A). 
225 

•S 6 IS1S 

1 ‘‘(ii) POOLED INCOME FUNDS.—No 

2 amount shall be includible in the gross in3 come of a pooled income fund (as defined 

4 in subparagraph (G)(ii)) by reason of a 

5 qualified charitable distribution to such 

6 fund, and all distributions from the fund 

7 which are attributable to qualified chari8 table distributions shall be treated as ordi9 nary income to the beneficiary. 

10 ‘‘(iii) CHARITABLE GIFT ANNU11 ITIES.—Qualified charitable distributions 

12 made for a charitable gift annuity shall not 

13 be treated as an investment in the con14 tract. 

15 ‘‘(F) DENIAL OF DEDUCTION.—Qualified 

16 charitable distributions shall not be taken into 

17 account in determining the deduction under sec18 tion 170. 

19 ‘‘(G) SPLIT-INTEREST ENTITY DEFINED.— 

20 For purposes of this paragraph, the term ‘split21 interest entity’ means— 

22 ‘‘(i) a charitable remainder annuity 

23 trust or a charitable remainder unitrust 

24 (as such terms are defined in section 
226 

•S 6 IS1S 

1 664(d)) which must be funded exclusively 

2 by qualified charitable distributions, 

3 ‘‘(ii) a pooled income fund (as defined 

4 in section 642(c)(5)), but only if the fund 

5 accounts separately for amounts attrib6 utable to qualified charitable distributions, 

7 and 

8 ‘‘(iii) a charitable gift annuity (as de9 fined in section 501(m)(5)).’’. 

10 (b) MODIFICATIONS RELATING TO INFORMATION RE11 TURNS BY CERTAIN TRUSTS.— 

12 (1) RETURNS.—Section 6034 (relating to re13 turns by trusts described in section 4947(a)(2) or 

14 claiming charitable deductions under section 642(c)) 

15 is amended to read as follows: 

16 ‘‘SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 

17 4947(a)(2) OR CLAIMING CHARITABLE DEDUC18 TIONS UNDER SECTION 642(c). 

19 ‘‘(a) TRUSTS DESCRIBED IN SECTION 4947(a)(2).— 

20 Every trust described in section 4947(a)(2) shall furnish 

21 such information with respect to the taxable year as the 

22 Secretary may by forms or regulations require. 

23 ‘‘(b) TRUSTS CLAIMING A CHARITABLE DEDUCTION

24 UNDER SECTION 642(c).— 
227 

•S 6 IS1S 

1 ‘‘(1) IN GENERAL.—Every trust not required to 

2 file a return under subsection (a) but claiming a de3 duction under section 642(c) for the taxable year 

4 shall furnish such information with respect to such 

5 taxable year as the Secretary may by forms or regu6 lations prescribe, including— 

7 ‘‘(A) the amount of the deduction taken 

8 under section 642(c) within such year, 

9 ‘‘(B) the amount paid out within such year 

10 which represents amounts for which deductions 

11 under section 642(c) have been taken in prior 

12 years, 

13 ‘‘(C) the amount for which such deductions 

14 have been taken in prior years but which has 

15 not been paid out at the beginning of such year, 

16 ‘‘(D) the amount paid out of principal in 

17 the current and prior years for the purposes de18 scribed in section 642(c), 

19 ‘‘(E) the total income of the trust within 

20 such year and the expenses attributable thereto, 

21 and 

22 ‘‘(F) a balance sheet showing the assets, li23 abilities, and net worth of the trust as of the 

24 beginning of such year. 
228 

•S 6 IS1S 

1 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 

2 apply to a trust for any taxable year if— 

3 ‘‘(A) all the net income for such year, de4 termined under the applicable principles of the 

5 law of trusts, is required to be distributed cur6 rently to the beneficiaries, or 

7 ‘‘(B) the trust is described in section 

8 4947(a)(1).’’. 

9 (2) INCREASE IN PENALTY RELATING TO FIL10 ING OF INFORMATION RETURN BY SPLIT-INTEREST

11 TRUSTS.—Paragraph (2) of section 6652(c) (relating 

12 to returns by exempt organizations and by certain 

13 trusts) is amended by adding at the end the fol14 lowing new subparagraph: 

15 ‘‘(C) SPLIT-INTEREST TRUSTS.—In the 

16 case of a trust which is required to file a return 

17 under section 6034(a), subparagraphs (A) and 

18 (B) of this paragraph shall not apply and para19 graph (1) shall apply in the same manner as if 

20 such return were required under section 6033, 

21 except that— 

22 ‘‘(i) the 5 percent limitation in the 

23 second sentence of paragraph (1)(A) shall 

24 not apply, 
229 

•S 6 IS1S 

1 ‘‘(ii) in the case of any trust with 

2 gross income in excess of $250,000, the 

3 first sentence of paragraph (1)(A) shall be 

4 applied by substituting ‘$100’ for ‘$20’, 

5 and the second sentence thereof shall be 

6 applied by substituting ‘$50,000’ for 

7 ‘$10,000’, and 

8 ‘‘(iii) the third sentence of paragraph 

9 (1)(A) shall be disregarded. 

10 In addition to any penalty imposed on the trust 

11 pursuant to this subparagraph, if the person re12 quired to file such return knowingly fails to file 

13 the return, such penalty shall also be imposed 

14 on such person who shall be personally liable 

15 for such penalty.’’. 

16 (3) CONFIDENTIALITY OF NONCHARITABLE

17 BENEFICIARIES.—Subsection (b) of section 6104 

18 (relating to inspection of annual information re19 turns) is amended by adding at the end the fol20 lowing new sentence: ‘‘In the case of a trust which 

21 is required to file a return under section 6034(a), 

22 this subsection shall not apply to information re23 garding beneficiaries which are not organizations de24 scribed in section 170(c).’’. 

25 (c) EFFECTIVE DATES.— 
230 

•S 6 IS1S 

1 (1) SUBSECTION (a).—The amendment made 

2 by subsection (a) shall apply to distributions— 

3 (A) described in section 408(d)(8)(B)(i)(I) 

4 of the Internal Revenue Code of 1986, as added 

5 by this section, made after the date of the en6 actment of this Act, and 

7 (B) described in section 

8 408(d)(8)(B)(i)(II) of such Code, as so added, 

9 made after December 31, 2004. 

10 (2) SUBSECTION (b).—The amendments made 

11 by subsection (b) shall apply to returns for taxable 

12 years beginning after December 31, 2004. 

13 SEC. 303. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 

14 OF FOOD INVENTORIES. 

15 (a) IN GENERAL.—Subsection (e) of section 170 (re16 lating to certain contributions of ordinary income and cap17 ital gain property) is amended by adding at the end the 

18 following new paragraph: 

19 ‘‘(7) APPLICATION OF PARAGRAPH (3) TO CER20 TAIN CONTRIBUTIONS OF FOOD INVENTORY.—For 

21 purposes of this section— 

22 ‘‘(A) EXTENSION TO INDIVIDUALS.—In the 

23 case of a charitable contribution of apparently 

24 wholesome food— 
231 

•S 6 IS1S 

1 ‘‘(i) paragraph (3)(A) shall be applied 

2 without regard to whether the contribution 

3 is made by a C corporation, and 

4 ‘‘(ii) in the case of a taxpayer other 

5 than a C corporation, the aggregate 

6 amount of such contributions from any 

7 trade or business (or interest therein) of 

8 the taxpayer for any taxable year which 

9 may be taken into account under this sec10 tion shall not exceed 10 percent of the tax11 payer’s net income from any such trade or 

12 business, computed without regard to this 

13 section, for such taxable year. 

14 ‘‘(B) LIMITATION ON REDUCTION.—In the 

15 case of a charitable contribution of apparently 

16 wholesome food, notwithstanding paragraph 

17 (3)(B), the amount of the reduction determined 

18 under paragraph (1)(A) shall not exceed the 

19 amount by which the fair market value of such 

20 property exceeds twice the basis of such prop21 erty. 

22 ‘‘(C) DETERMINATION OF BASIS.—If a 

23 taxpayer— 

24 ‘‘(i) does not account for inventories 

25 under section 471, and 
232 

•S 6 IS1S 

1 ‘‘(ii) is not required to capitalize indi2 rect costs under section 263A, 

3 the taxpayer may elect, solely for purposes of 

4 paragraph (3)(B), to treat the basis of any ap5 parently wholesome food as being equal to 25 

6 percent of the fair market value of such food. 

7 ‘‘(D) DETERMINATION OF FAIR MARKET

8 VALUE.—In the case of a charitable contribu9 tion of apparently wholesome food which is a 

10 qualified contribution (within the meaning of 

11 paragraph (3), as modified by subparagraph 

12 (A) of this paragraph) and which, solely by rea13 son of internal standards of the taxpayer or 

14 lack of market, cannot or will not be sold, the 

15 fair market value of such contribution shall be 

16 determined— 

17 ‘‘(i) without regard to such internal 

18 standards or such lack of market and 

19 ‘‘(ii) by taking into account the price 

20 at which the same or substantially the 

21 same food items (as to both type and qual22 ity) are sold by the taxpayer at the time of 

23 the contribution (or, if not so sold at such 

24 time, in the recent past). 
233 

•S 6 IS1S 

1 ‘‘(E) APPARENTLY WHOLESOME FOOD.— 

2 For purposes of this paragraph, the term ‘ap3 parently wholesome food’ has the meaning given 

4 such term by section 22(b)(2) of the Bill Emer5 son Good Samaritan Food Donation Act (42 

6 U.S.C. 1791(b)(2)), as in effect on the date of 

7 the enactment of this paragraph.’’. 

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

9 this section shall apply to contributions made after the 

10 date of the enactment of this Act. 

11 SEC. 304. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 

12 OF BOOK INVENTORIES. 

13 (a) IN GENERAL.—Section 170(e)(3) (relating to cer14 tain contributions of ordinary income and capital gain 

15 property) is amended by redesignating subparagraph (C) 

16 as subparagraph (D) and by inserting after subparagraph 

17 (B) the following new subparagraph: 

18 ‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS

19 OF BOOK INVENTORY FOR EDUCATIONAL PUR20 POSES.— 

21 ‘‘(i) CONTRIBUTIONS OF BOOK INVEN22 TORY.—In determining whether a qualified 

23 book contribution is a qualified contribu24 tion, subparagraph (A) shall be applied 

25 without regard to whether— 
234 

•S 6 IS1S 

1 ‘‘(I) the donee is an organization 

2 described in the matter preceding 

3 clause (i) of subparagraph (A), and 

4 ‘‘(II) the property is to be used 

5 by the donee solely for the care of the 

6 ill, the needy, or infants. 

7 ‘‘(ii) AMOUNT OF REDUCTION.—Not8 withstanding subparagraph (B), the 

9 amount of the reduction determined under 

10 paragraph (1)(A) shall not exceed the 

11 amount by which the fair market value of 

12 the contributed property (as determined by 

13 the taxpayer using a bona fide published 

14 market price for such book) exceeds twice 

15 the basis of such property. 

16 ‘‘(iii) QUALIFIED BOOK CONTRIBU17 TION.—For purposes of this paragraph, 

18 the term ‘qualified book contribution’ 

19 means a charitable contribution of books, 

20 but only if the requirements of clauses (iv) 

21 and (v) are met. 

22 ‘‘(iv) IDENTITY OF DONEE.—The re23 quirement of this clause is met if the con24 tribution is to an organization— 
235 

•S 6 IS1S 

1 ‘‘(I) described in subclause (I) or 

2 (III) of paragraph (6)(B)(i), or 

3 ‘‘(II) described in section 

4 501(c)(3) and exempt from tax under 

5 section 501(a) (other than a private 

6 foundation, as defined in section 

7 509(a), which is not an operating 

8 foundation, as defined in section 

9 4942(j)(3)), which is organized pri10 marily to make books available to the 

11 general public at no cost or to operate 

12 a literacy program. 

13 ‘‘(v) CERTIFICATION BY DONEE.—The 

14 requirement of this clause is met if, in ad15 dition to the certifications required by sub16 paragraph (A) (as modified by this sub17 paragraph), the donee certifies in writing 

18 that— 

19 ‘‘(I) the books are suitable, in 

20 terms of currency, content, and quan21 tity, for use in the donee’s educational 

22 programs, and 

23 ‘‘(II) the donee will use the books 

24 in its educational programs. 
236 

•S 6 IS1S 

1 ‘‘(vi) BONA FIDE PUBLISHED MARKET

2 PRICE.—For purposes of this subpara3 graph, the term ‘bona fide published mar4 ket price’ means, with respect to any book, 

5 a price— 

6 ‘‘(I) determined using the same 

7 printing and edition, 

8 ‘‘(II) determined in the usual 

9 market in which such a book has been 

10 customarily sold by the taxpayer, and 

11 ‘‘(III) for which the taxpayer can 

12 demonstrate to the satisfaction of the 

13 Secretary that the taxpayer custom14 arily sold such books in arm’s length 

15 transactions within 7 years preceding 

16 the contribution of such a book.’’. 

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

18 this section shall apply to contributions made after the 

19 date of the enactment of this Act 

20 SEC. 305. EXPANSION OF CHARITABLE CONTRIBUTION AL21 LOWED FOR SCIENTIFIC PROPERTY USED 

22 FOR RESEARCH AND FOR COMPUTER TECH23 NOLOGY AND EQUIPMENT USED FOR EDU24 CATIONAL PURPOSES. 

25 (a) SCIENTIFIC PROPERTY USED FOR RESEARCH.— 
237 

•S 6 IS1S 

1 (1) IN GENERAL.—Clause (ii) of section 

2 170(e)(4)(B) (defining qualified research contribu3 tions) is amended by inserting ‘‘or assembled’’ after 

4 ‘‘constructed’’. 

5 (2) CONFORMING AMENDMENT.—Clause (iii) of 

6 section 170(e)(4)(B) is amended by inserting ‘‘or as7 sembling’’ after ‘‘construction’’. 

8 (b) COMPUTER TECHNOLOGY AND EQUIPMENT FOR

9 EDUCATIONAL PURPOSES.— 

10 (1) IN GENERAL.—Clause (ii) of section 

11 170(e)(6)(B) is amended by inserting ‘‘or assem12 bled’’ after ‘‘constructed’’ and ‘‘or assembling’’ after 

13 ‘‘construction’’. 

14 (2) CONFORMING AMENDMENTS.—Subpara15 graph (D) of section 170(e)(6) is amended by insert16 ing ‘‘or assembled’’ after ‘‘constructed’’ and ‘‘or as17 sembling’’ after ‘‘construction’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2004. 
238 

•S 6 IS1S 

1 SEC. 306. MODIFICATIONS TO ENCOURAGE CONTRIBU2 TIONS OF CAPITAL GAIN REAL PROPERTY 

3 MADE FOR CONSERVATION PURPOSES. 

4 (a) IN GENERAL.—Section 170(h) (relating to quali5 fied conservation contribution) is amended by adding at 

6 the end the following new paragraph: 

7 ‘‘(7) ADDITIONAL INCENTIVES FOR QUALIFIED

8 CONSERVATION CONTRIBUTIONS.— 

9 ‘‘(A) IN GENERAL.—In the case of any 

10 qualified conservation contribution (as defined 

11 in paragraph (1)) made by an individual— 

12 ‘‘(i) subparagraph (C) of subsection 

13 (b)(1) shall not apply, 

14 ‘‘(ii) except as provided in subpara15 graph (B)(i), subsections (b)(1)(A) and 

16 (d)(1) shall be applied separately with re17 spect to such contributions by treating ref18 erences to 50 percent of the taxpayer’s 

19 contribution base as references to the 

20 amount of such base reduced by the 

21 amount of other contributions allowable 

22 under subsection (b)(1)(A), and 

23 ‘‘(iii) subparagraph (A) of subsection 

24 (d)(1) shall be applied— 
239 

•S 6 IS1S 

1 ‘‘(I) by substituting ‘15 suc2 ceeding taxable years’ for ‘5 suc3 ceeding taxable years’, and 

4 ‘‘(II) by applying clause (ii) to 

5 each of the 15 succeeding taxable 

6 years. 

7 ‘‘(B) SPECIAL RULES FOR ELIGIBLE FARM8 ERS AND RANCHERS.— 

9 ‘‘(i) IN GENERAL.—In the case of any 

10 such contributions by a taxpayer who is an 

11 eligible farmer or rancher for the taxable 

12 year in which such contributions are 

13 made— 

14 ‘‘(I) if the taxpayer is an indi15 vidual, subsections (b)(1)(A) and 

16 (d)(1) shall be applied separately with 

17 respect to such contributions by sub18 stituting ‘the taxpayer’s contribution 

19 base reduced by the amount of other 

20 contributions allowable under sub21 section (b)(1)(A)’ for ‘50 percent of 

22 the taxpayer’s contribution base’ each 

23 place it appears, and 

24 ‘‘(II) if the taxpayer is a corpora25 tion, subsections (b)(2) and (d)(2) 
240 

•S 6 IS1S 

1 shall be applied separately with re2 spect to such contributions, subsection 

3 (b)(2) shall be applied with respect to 

4 such contributions as if such sub5 section did not contain the words ‘10 

6 percent of’ and as if subparagraph 

7 (A) thereof read ‘the deduction under 

8 this section for qualified conservation 

9 contributions’, and rules similar to the 

10 rules of subparagraph (A)(iii) shall 

11 apply for purposes of subsection 

12 (d)(2). 

13 ‘‘(ii) DEFINITION.—For purposes of 

14 clause (i), the term ‘eligible farmer or 

15 rancher’ means a taxpayer whose gross in16 come from the trade or business of farm17 ing (within the meaning of section 

18 2032A(e)(5)) is at least 51 percent of the 

19 taxpayer’s gross income for the taxable 

20 year, and, in the case of a C corporation, 

21 the stock of which is not publicly traded on 

22 a recognized exchange.’’. 

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

24 this section shall apply to contributions made after the 

25 date of the enactment of this Act. 
241 

•S 6 IS1S 

1 SEC. 307. EXCLUSION OF 25 PERCENT OF GAIN ON SALES 

2 OR EXCHANGES OF LAND OR WATER INTER3 ESTS TO ELIGIBLE ENTITIES FOR CONSERVA4 TION PURPOSES. 

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 (relating to items specifically excluded from gross 

7 income) is amended by inserting after section 121 the fol8 lowing new section: 

9 ‘‘SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON SALES OR 

10 EXCHANGES OF LAND OR WATER INTERESTS 

11 TO ELIGIBLE ENTITIES FOR CONSERVATION 

12 PURPOSES. 

13 ‘‘(a) EXCLUSION.—Gross income shall not include 25 

14 percent of the qualifying gain from a conservation sale of 

15 a long-held qualifying land or water interest. 

16 ‘‘(b) QUALIFYING GAIN.—For purposes of this sec17 tion— 

18 ‘‘(1) IN GENERAL.—The term ‘qualifying gain’ 

19 means any gain which would be recognized as long20 term capital gain, reduced by the amount of any 

21 long-term capital gain attributable to disqualified 

22 improvements. 

23 ‘‘(2) DISQUALIFIED IMPROVEMENT.—For pur24 poses of paragraph (1), the term ‘disqualified im25 provement’ means any building, structure, or other 

26 improvement, other than— 
242 

•S 6 IS1S 

1 ‘‘(A) any improvement which is described 

2 in section 175(c)(1), determined— 

3 ‘‘(i) without regard to the require4 ments that the taxpayer be engaged in 

5 farming, and 

6 ‘‘(ii) without taking into account sub7 paragraphs (A) and (B) thereof, or 

8 ‘‘(B) any improvement which the Secretary 

9 determines directly furthers conservation pur10 poses. 

11 ‘‘(3) SPECIAL RULE FOR SALES OF STOCK.—If 

12 the long-held qualifying land or water interest is 1 

13 or more shares of stock in a qualifying land or water 

14 corporation, the qualifying gain is equal to the lesser 

15 of— 

16 ‘‘(A) the qualifying gain determined under 

17 paragraph (1), or 

18 ‘‘(B) the product of— 

19 ‘‘(i) the percentage of such corpora20 tion’s stock which is transferred by the 

21 taxpayer, times 

22 ‘‘(ii) the amount which would have 

23 been the qualifying gain (determined under 

24 paragraph (1)) if there had been a con25 servation sale by such corporation of all of 
243 

•S 6 IS1S 

1 its interests in the land and water for a 

2 price equal to the product of the fair mar3 ket value of such interests times the ratio 

4 of— 

5 ‘‘(I) the proceeds of the conserva6 tion sale of the stock, to 

7 ‘‘(II) the fair market value of the 

8 stock which was the subject of the 

9 conservation sale. 

10 ‘‘(c) CONSERVATION SALE.—For purposes of this 

11 section, the term ‘conservation sale’ means a sale or ex12 change which meets the following requirements: 

13 ‘‘(1) TRANSFEREE IS AN ELIGIBLE ENTITY.— 

14 The transferee of the long-held qualifying land or 

15 water interest is an eligible entity. 

16 ‘‘(2) QUALIFYING LETTER OF INTENT RE17 QUIRED.—At the time of the sale or exchange, such 

18 transferee provides the taxpayer with a qualifying 

19 letter of intent. 

20 ‘‘(3) NONAPPLICATION TO CERTAIN SALES.— 

21 The sale or exchange is not made pursuant to an 

22 order of condemnation or eminent domain. 

23 ‘‘(4) CONTROLLING INTEREST IN STOCK SALE

24 REQUIRED.—In the case of the sale or exchange of 

25 stock in a qualifying land or water corporation, at 
244 

•S 6 IS1S 

1 the end of the taxpayer’s taxable year in which such 

2 sale or exchange occurs, the transferee’s ownership 

3 of stock in such corporation meets the requirements 

4 of section 1504(a)(2) (determined by substituting 

5 ‘90 percent’ for ‘80 percent’ each place it appears). 

6 ‘‘(d) LONG-HELD QUALIFYING LAND OR WATER IN7 TEREST.—For purposes of this section— 

8 ‘‘(1) IN GENERAL.—The term ‘long-held quali9 fying land or water interest’ means any qualifying 

10 land or water interest owned by the taxpayer or a 

11 member of the taxpayer’s family (as defined in sec12 tion 2032A(e)(2)) at all times during the 5-year pe13 riod ending on the date of the sale. 

14 ‘‘(2) QUALIFYING LAND OR WATER INTER15 EST.— 

16 ‘‘(A) IN GENERAL.—The term ‘qualifying 

17 land or water interest’ means a real property 

18 interest which constitutes— 

19 ‘‘(i) a taxpayer’s entire interest in 

20 land, 

21 ‘‘(ii) a taxpayer’s entire interest in 

22 water rights, 

23 ‘‘(iii) a qualified real property interest 

24 (as defined in section 170(h)(2)), or 
245 

•S 6 IS1S 

1 ‘‘(iv) stock in a qualifying land or 

2 water corporation. 

3 ‘‘(B) ENTIRE INTEREST.—For purposes of 

4 clause (i) or (ii) of subparagraph (A)— 

5 ‘‘(i) a partial interest in land or water 

6 is not a taxpayer’s entire interest if an in7 terest in land or water was divided in order 

8 to create such partial interest in order to 

9 avoid the requirements of such clause or 

10 section 170(f)(3)(A), and 

11 ‘‘(ii) a taxpayer’s entire interest in 

12 certain land does not fail to satisfy sub13 paragraph (A)(i) solely because the tax14 payer has retained an interest in other 

15 land, even if the other land is contiguous 

16 with such certain land and was acquired by 

17 the taxpayer along with such certain land 

18 in a single conveyance. 

19 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

20 section— 

21 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en22 tity’ means— 

23 ‘‘(A) a governmental unit referred to in 

24 section 170(c)(1), or an agency or department 

25 thereof operated primarily for 1 or more of the 
246 

•S 6 IS1S 

1 conservation purposes specified in clause (i), 

2 (ii), or (iii) of section 170(h)(4)(A), or 

3 ‘‘(B) an entity which is— 

4 ‘‘(i) described in section 

5 170(b)(1)(A)(vi) or section 170(h)(3)(B), 

6 and 

7 ‘‘(ii) organized and at all times oper8 ated primarily for 1 or more of the con9 servation purposes specified in clause (i), 

10 (ii), or (iii) of section 170(h)(4)(A). 

11 ‘‘(2) QUALIFYING LETTER OF INTENT.—The 

12 term ‘qualifying letter of intent’ means a written let13 ter of intent which includes the following statement: 

14 ‘The transferee’s intent is that this acquisition will 

15 serve 1 or more of the conservation purposes speci16 fied in clause (i), (ii), or (iii) of section 170(h)(4)(A) 

17 of the Internal Revenue Code of 1986, that the 

18 transferee’s use of the property so acquired will be 

19 consistent with section 170(h)(5) of such Code, and 

20 that the use of the property will continue to be con21 sistent with such section, even if ownership or pos22 session of such property is subsequently transferred 

23 to another person.’ 

24 ‘‘(3) QUALIFYING LAND OR WATER CORPORA25 TION.—The term ‘qualifying land or water corpora-
247 

•S 6 IS1S 

1 tion’ means a C corporation (as defined in section 

2 1361(a)(2)) if, as of the date of the conservation 

3 sale— 

4 ‘‘(A) the fair market value of the corpora5 tion’s interests in land or water held by the cor6 poration at all times during the preceding 5 

7 years equals or exceeds 90 percent of the fair 

8 market value of all of such corporation’s assets, 

9 and 

10 ‘‘(B) not more than 50 percent of the total 

11 fair market value of such corporation’s assets 

12 consists of water rights or infrastructure re13 lated to the delivery of water, or both. 

14 ‘‘(f) TAX ON SUBSEQUENT TRANSFERS OR REMOV15 ALS OF CONSERVATION RESTRICTIONS.— 

16 ‘‘(1) IN GENERAL.—A tax is hereby imposed on 

17 any subsequent— 

18 ‘‘(A) transfer by an eligible entity of own19 ership or possession, whether by sale, exchange, 

20 or lease, of property acquired directly or indi21 rectly in— 

22 ‘‘(i) a conservation sale described in 

23 subsection (a), or 

24 ‘‘(ii) a transfer described in clause (i), 

25 (ii), or (iii) of paragraph (4)(A), or 
248 

•S 6 IS1S 

1 ‘‘(B) removal of a conservation restriction 

2 contained in an instrument of conveyance of 

3 such property. 

4 ‘‘(2) AMOUNT OF TAX.—The amount of tax im5 posed by paragraph (1) on any transfer or removal 

6 shall be equal to the sum of— 

7 ‘‘(A) either— 

8 ‘‘(i) 20 percent of the fair market 

9 value (determined at the time of the trans10 fer) of the property the ownership or pos11 session of which is transferred, or 

12 ‘‘(ii) 20 percent of the fair market 

13 value (determined at the time immediately 

14 after the removal) of the property upon 

15 which the conservation restriction was re16 moved, plus 

17 ‘‘(B) the product of— 

18 ‘‘(i) the highest rate of tax specified 

19 in section 11, times 

20 ‘‘(ii) any gain or income realized by 

21 the transferor or person removing such re22 striction as a result of the transfer or re23 moval. 

24 ‘‘(3) LIABILITY.—The tax imposed by para25 graph (1) shall be paid— 
249 

•S 6 IS1S 

1 ‘‘(A) on any transfer, by the transferor, 

2 and 

3 ‘‘(B) on any removal of a conservation re4 striction contained in an instrument of convey5 ance, by the person removing such restriction. 

6 ‘‘(4) RELIEF FROM LIABILITY.—The person 

7 (otherwise liable for any tax imposed by paragraph 

8 (1)) shall be relieved of liability for the tax imposed 

9 by paragraph (1)— 

10 ‘‘(A) with respect to any transfer if— 

11 ‘‘(i) the transferee is an eligible entity 

12 which provides such person, at the time of 

13 transfer, a qualifying letter of intent, 

14 ‘‘(ii) in any case where the transferee 

15 is not an eligible entity, it is established to 

16 the satisfaction of the Secretary, that the 

17 transfer of ownership or possession, as the 

18 case may be, will be consistent with section 

19 170(h)(5), and the transferee provides 

20 such person, at the time of transfer, a 

21 qualifying letter of intent, or 

22 ‘‘(iii) tax has previously been paid 

23 under this subsection as a result of a prior 

24 transfer of ownership or possession of the 

25 same property, or 
250 

•S 6 IS1S 

1 ‘‘(B) with respect to any removal of a con2 servation restriction contained in an instrument 

3 of conveyance, if it is established to the satis4 faction of the Secretary that the retention of 

5 the restriction was impracticable or impossible 

6 and the proceeds continue to be used in a man7 ner consistent with 1 or more of the conserva8 tion purposes specified in clause (i), (ii), or (iii) 

9 of section 170(h)(4)(A). 

10 ‘‘(5) ADMINISTRATIVE PROVISIONS.—For pur11 poses of subtitle F, the taxes imposed by this sub12 section shall be treated as excise taxes with respect 

13 to which the deficiency procedures of such subtitle 

14 apply. 

15 ‘‘(6) REPORTING.—The Secretary may require 

16 such reporting as may be necessary or appropriate 

17 to further the purpose under this section that any 

18 conservation use be in perpetuity.’’. 

19 (b) CLERICAL AMENDMENT.—The table of sections 

20 for part III of subchapter B of chapter 1 is amended by 

21 inserting after the item relating to section 121 the fol22 lowing new item: 

‘‘Sec. 121A. 25-percent exclusion of gain on sales or exchanges 

of land or water interests to eligible entities for 

conservation purposes.’’. 
251 

•S 6 IS1S 

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

2 this section shall apply to sales or exchanges occurring 

3 after the date of the enactment of this Act. 

4 SEC. 308. TAX EXCLUSION FOR COST-SHARING PAYMENTS 

5 UNDER PARTNERS FOR FISH AND WILDLIFE 

6 PROGRAM. 

7 (a) IN GENERAL.—Section 126(a) (relating to cer8 tain cost-sharing payments) is amended by redesignating 

9 paragraph (10) as paragraph (11) and by inserting after 

10 paragraph (9) the following: 

11 ‘‘(10) The Partners for Fish and Wildlife Pro12 gram authorized by the Fish and Wildlife Act of 

13 1956 (16 U.S.C. 742a et seq.).’’. 

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

15 this section shall apply to payments received after the date 

16 of the enactment of this Act. 

17 SEC. 309. ADJUSTMENT TO BASIS OF S CORPORATION 

18 STOCK FOR CERTAIN CHARITABLE CON19 TRIBUTIONS. 

20 (a) IN GENERAL.—Paragraph (2) of section 1367(a) 

21 (relating to adjustments to basis of stock of shareholders, 

22 etc.) is amended by adding at the end the following new 

23 flush sentence: 

24 ‘‘The decrease under subparagraph (B) by reason of 

25 a charitable contribution (as defined in section 
252 

•S 6 IS1S 

1 170(c)) of property shall be the amount equal to the 

2 shareholder’s pro rata share of the adjusted basis of 

3 such property.’’. 

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

5 this section shall apply to contributions made after the 

6 date of the enactment of this Act. 

7 SEC. 310. ENHANCED DEDUCTION FOR CHARITABLE CON8 TRIBUTION OF LITERARY, MUSICAL, ARTIS9 TIC, AND SCHOLARLY COMPOSITIONS. 

10 (a) IN GENERAL.—Subsection (e) of section 170 (re11 lating to certain contributions of ordinary income and cap12 ital gain property), as amended by this Act, is amended 

13 by adding at the end the following new paragraph: 

14 ‘‘(8) SPECIAL RULE FOR CERTAIN CONTRIBU15 TIONS OF LITERARY, MUSICAL, ARTISTIC, OR SCHOL16 ARLY COMPOSITIONS.— 

17 ‘‘(A) IN GENERAL.—In the case of a quali18 fied artistic charitable contribution— 

19 ‘‘(i) the amount of such contribution 

20 taken into account under this section shall 

21 be the fair market value of the property 

22 contributed (determined at the time of 

23 such contribution), and 
253 

•S 6 IS1S 

1 ‘‘(ii) no reduction in the amount of 

2 such contribution shall be made under 

3 paragraph (1). 

4 ‘‘(B) QUALIFIED ARTISTIC CHARITABLE

5 CONTRIBUTION.—For purposes of this para6 graph, the term ‘qualified artistic charitable 

7 contribution’ means a charitable contribution of 

8 any literary, musical, artistic, or scholarly com9 position, or similar property, or the copyright 

10 thereon (or both), but only if— 

11 ‘‘(i) such property was created by the 

12 personal efforts of the taxpayer making 

13 such contribution no less than 18 months 

14 prior to such contribution, 

15 ‘‘(ii) the taxpayer— 

16 ‘‘(I) has received a qualified ap17 praisal of the fair market value of 

18 such property in accordance with the 

19 regulations under this section, and 

20 ‘‘(II) attaches to the taxpayer’s 

21 income tax return for the taxable year 

22 in which such contribution was made 

23 a copy of such appraisal, 

24 ‘‘(iii) the donee is an organization de25 scribed in subsection (b)(1)(A), 
254 

•S 6 IS1S 

1 ‘‘(iv) the use of such property by the 

2 donee is related to the purpose or function 

3 constituting the basis for the donee’s ex4 emption under section 501 (or, in the case 

5 of a governmental unit, to any purpose or 

6 function described under section 501(c)), 

7 ‘‘(v) the taxpayer receives from the 

8 donee a written statement representing 

9 that the donee’s use of the property will be 

10 in accordance with the provisions of clause 

11 (iv), and 

12 ‘‘(vi) the written appraisal referred to 

13 in clause (ii) includes evidence of the ex14 tent (if any) to which property created by 

15 the personal efforts of the taxpayer and of 

16 the same type as the donated property is 

17 or has been— 

18 ‘‘(I) owned, maintained, and dis19 played by organizations described in 

20 subsection (b)(1)(A), and 

21 ‘‘(II) sold to or exchanged by 

22 persons other than the taxpayer, 

23 donee, or any related person (as de24 fined in section 465(b)(3)(C)). 
255 

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1 ‘‘(C) MAXIMUM DOLLAR LIMITATION; NO

2 CARRYOVER OF INCREASED DEDUCTION.—The 

3 increase in the deduction under this section by 

4 reason of this paragraph for any taxable year— 

5 ‘‘(i) shall not exceed the artistic ad6 justed gross income of the taxpayer for 

7 such taxable year, and 

8 ‘‘(ii) shall not be taken into account in 

9 determining the amount which may be car10 ried from such taxable year under sub11 section (d). 

12 ‘‘(D) ARTISTIC ADJUSTED GROSS IN13 COME.—For purposes of this paragraph, the 

14 term ‘artistic adjusted gross income’ means 

15 that portion of the adjusted gross income of the 

16 taxpayer for the taxable year attributable to— 

17 ‘‘(i) income from the sale or use of 

18 property created by the personal efforts of 

19 the taxpayer which is of the same type as 

20 the donated property, and 

21 ‘‘(ii) income from teaching, lecturing, 

22 performing, or similar activity with respect 

23 to property described in clause (i). 

24 ‘‘(E) PARAGRAPH NOT TO APPLY TO CER25 TAIN CONTRIBUTIONS.—Subparagraph (A) shall 
256 

•S 6 IS1S 

1 not apply to any charitable contribution of any 

2 letter, memorandum, or similar property which 

3 was written, prepared, or produced by or for an 

4 individual while the individual is an officer or 

5 employee of any person (including any govern6 ment agency or instrumentality) unless such 

7 letter, memorandum, or similar property is en8 tirely personal. 

9 ‘‘(F) COPYRIGHT TREATED AS SEPARATE

10 PROPERTY FOR PARTIAL INTEREST RULE.—In 

11 the case of a qualified artistic charitable con12 tribution, the tangible literary, musical, artistic, 

13 or scholarly composition, or similar property 

14 and the copyright on such work shall be treated 

15 as separate properties for purposes of this para16 graph and subsection (f)(3).’’. 

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

18 this section shall apply to contributions made after the 

19 date of the enactment of this Act. 

20 SEC. 311. MILEAGE REIMBURSEMENTS TO CHARITABLE 

21 VOLUNTEERS EXCLUDED FROM GROSS IN22 COME. 

23 (a) IN GENERAL.—Part III of subchapter B of chap24 ter 1 is amended by inserting after section 139A the fol25 lowing new section: 
257 

•S 6 IS1S 

1 ‘‘SEC. 139B. MILEAGE REIMBURSEMENTS TO CHARITABLE 

2 VOLUNTEERS. 

3 ‘‘(a) IN GENERAL.—Gross income of an individual 

4 does not include amounts received, from an organization 

5 described in section 170(c), as reimbursement of operating 

6 expenses with respect to use of a passenger automobile 

7 for the benefit of such organization. The preceding sen8 tence shall apply only to the extent that the expenses 

9 which are reimbursed would be deductible under this chap10 ter if section 274(d) were applied— 

11 ‘‘(1) by using the standard business mileage 

12 rate established under such section, and 

13 ‘‘(2) as if the individual were an employee of an 

14 organization not described in section 170(c). 

15 ‘‘(b) APPLICATION TO VOLUNTEER SERVICES

16 ONLY.—Subsection (a) shall not apply with respect to any 

17 expenses relating to the performance of services for com18 pensation. 

19 ‘‘(c) NO DOUBLE BENEFIT.—A taxpayer may not 

20 claim a deduction or credit under any other provision of 

21 this title with respect to the expenses under subsection (a). 

22 ‘‘(d) EXEMPTION FROM REPORTING REQUIRE23 MENTS.—Section 6041 shall not apply with respect to re24 imbursements excluded from income under subsection 

25 (a).’’. 
258 

•S 6 IS1S 

1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for part III of subchapter B of chapter 1 is amended by 

3 inserting after the item relating to section 139A the fol4 lowing new item: 

‘‘Sec. 139B. Mileage reimbursements to charitable volunteers.’’. 

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

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 312. EXTENSION OF ENHANCED DEDUCTION FOR IN9 VENTORY TO INCLUDE PUBLIC SCHOOLS. 

10 (a) IN GENERAL.—Subparagraph (A) of section 

11 170(e)(3) (relating to special rule for certain contributions 

12 of inventory and other property) is amended by striking 

13 ‘‘to an organization which is described in’’ and all that 

14 follows through the end of clause (i) and inserting ‘‘to a 

15 qualified organization, but only if— 

16 ‘‘(i) the property is to be used by the 

17 donee solely for the care of the ill, the 

18 needy, or infants and, in the case of— 

19 ‘‘(I) an organization described in 

20 section 501(c)(3) (other than an orga21 nization described in subclause (II)), 

22 the use of the property by the donee 

23 is related to the purpose or function 

24 constituting the basis for its exemp25 tion under section 501, and 
259 

•S 6 IS1S 

1 ‘‘(II) an organization described 

2 in subsection (b)(1)(A)(ii), the use of 

3 the property by the donee is related to 

4 educational purposes and such prop5 erty is not computer technology or 

6 equipment (as defined in paragraph 

7 (6)(F)(i));’’. 

8 (b) QUALIFIED ORGANIZATION.—Paragraph (3) of 

9 section 170(e) of such Code, as amended by this Act, is 

10 amended by redesignating subparagraph (D) as subpara11 graph (E) and by inserting after subparagraph (C) the 

12 following new subparagraph: 

13 ‘‘(D) QUALIFIED ORGANIZATION.—For 

14 purposes of this paragraph, the term ‘qualified 

15 organization’ means— 

16 ‘‘(i) an organization which is de17 scribed in section 501(c)(3) and is exempt 

18 under section 501(a) (other than a private 

19 foundation, as defined in section 509(a), 

20 which is not an operating foundation, as 

21 defined in section 4942(j)(3)), and 

22 ‘‘(ii) an educational organization de23 scribed in subsection (b)(1)(A)(ii).’’. 
260 

•S 6 IS1S 

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

2 this section shall apply to contributions made after De3 cember 31, 2004. 

4 SEC. 313. 10-YEAR DIVESTITURE PERIOD FOR CERTAIN EX5 CESS BUSINESS HOLDINGS OF PRIVATE 

6 FOUNDATIONS. 

7 (a) IN GENERAL.—Section 4943(c) (relating to ex8 cess business holdings) is amended by redesignating para9 graph (7) as paragraph (8) and by inserting after para10 graph (6) the following new paragraph: 

11 ‘‘(7) 10-YEAR PERIOD TO DISPOSE OF CERTAIN

12 LARGE GIFTS AND BEQUESTS.— 

13 ‘‘(A) IN GENERAL.—Paragraph (6) shall 

14 be applied by substituting ‘10-year period’ for 

15 ‘5-year period’ if— 

16 ‘‘(i) upon the election of a private 

17 foundation, it is established to the satisfac18 tion of the Secretary that— 

19 ‘‘(I) the excess business holdings 

20 (or increase in excess business hold21 ings) in a business enterprise by the 

22 private foundation in an amount 

23 which is not less than $1,000,000,000 

24 is the result of a gift or bequest the 
261 

•S 6 IS1S 

1 fair market value of which is not less 

2 than $1,000,000,000, and 

3 ‘‘(II) after such gift or bequest, 

4 the private foundation does not have 

5 effective control of such business en6 terprise to which such gift or bequest 

7 relates, 

8 ‘‘(ii) subject to subparagraph (C), the 

9 private foundation submits to the Sec10 retary with such election a reasonable plan 

11 for disposing of all of the excess business 

12 holdings related to such gift or bequest, 

13 and 

14 ‘‘(iii) the private foundation certifies 

15 annually to the Secretary that the private 

16 foundation is complying with the plan sub17 mitted under this paragraph, the require18 ment under clause (i)(II), and the rules 

19 under subparagraph (D). 

20 ‘‘(B) ELECTION.—Any election under sub21 paragraph (A)(i) shall be made not later than 

22 6 months after the date of such gift or bequest 

23 and shall— 

24 ‘‘(i) establish the fair market value of 

25 such gift or bequest, and 
262 

•S 6 IS1S 

1 ‘‘(ii) include a certification that the 

2 requirement of subparagraph (A)(i)(II) is 

3 met. 

4 ‘‘(C) REASONABLENESS OF PLAN.— 

5 ‘‘(i) IN GENERAL.—Any plan sub6 mitted under subparagraph (A)(ii) shall be 

7 presumed reasonable unless the Secretary 

8 notifies the private foundation to the con9 trary not later than 6 months after the 

10 submission of such plan. 

11 ‘‘(ii) RESUBMISSION.—Upon notice by 

12 the Secretary under clause (i), the private 

13 foundation may resubmit a plan and shall 

14 have the burden of establishing the reason15 ableness of such plan to the Secretary. 

16 ‘‘(D) SPECIAL RULES.—During any period 

17 in which an election under this paragraph is in 

18 effect— 

19 ‘‘(i) section 4941(d)(2) (other than 

20 subparagraph (A) thereof) shall apply only 

21 with respect to any disqualified person de22 scribed in section 4941(a)(1)(B), 

23 ‘‘(ii) section 4942(a) shall be applied 

24 by substituting ‘third’ for ‘second’ both 

25 places it appears, 
263 

•S 6 IS1S 

1 ‘‘(iii) section 4942(e)(1) shall be ap2 plied by substituting ‘12 percent’ for ‘5 

3 percent’, and 

4 ‘‘(iv) section 4942(g)(1)(A) shall be 

5 applied without regard to any portion of 

6 reasonable and necessary administrative 

7 expenses. 

8 ‘‘(E) INFLATION ADJUSTMENT.—In the 

9 case of any taxable year beginning in a calendar 

10 year after 2004, the $1,000,000,000 amount 

11 under subparagraph (A)(i)(I) shall be increased 

12 by an amount equal to such dollar amount, 

13 multiplied by the cost-of-living adjustment de14 termined under section 1(f)(3) for such cal15 endar year, determined by substituting ‘2003’ 

16 for ‘1992’ in subparagraph (B) thereof. If the 

17 $1,000,000,000 amount as increased under this 

18 subparagraph is not a multiple of 

19 $100,000,000, such amount shall be rounded to 

20 the next lowest multiple of $100,000,000.’’. 

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

22 this section shall apply to gifts and bequests made after 

23 the date of the enactment of this Act. 
264 

•S 6 IS1S 

1 Subtitle B—Proposals Improving 

2 the Oversight of Tax-Exempt Or3 ganizations 

4 SEC. 321. DISCLOSURE OF WRITTEN DETERMINATIONS. 

5 (a) IN GENERAL.—Section 6110(l) (relating to sec6 tion not to apply) is amended by striking all matter before 

7 subparagraph (A) of paragraph (2) and inserting the fol8 lowing: 

9 ‘‘(l) SECTION NOT TO APPLY.— 

10 ‘‘(1) IN GENERAL.—This section shall not apply 

11 to any matter to which section 6104 or 6105 ap12 plies, except that this section shall apply to any writ13 ten determination and related background file docu14 ment relating to an organization described under 

15 subsection (c) or (d) of section 501 (including any 

16 written determination denying an organization tax17 exempt status under such subsection) or a political 

18 organization described in section 527 which is not 

19 required to be disclosed by section 6104(a)(1)(A). 

20 ‘‘(2) ADDITIONAL MATTERS.—This section shall 

21 not apply to any—’’. 

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

23 this section shall apply to written determinations issued 

24 after the date of the enactment of this Act. 
265 

•S 6 IS1S 

1 SEC. 322. DISCLOSURE OF INTERNET WEB SITE AND NAME 

2 UNDER WHICH ORGANIZATION DOES BUSI3 NESS. 

4 (a) IN GENERAL.—Section 6033 (relating to returns 

5 by exempt organizations) is amended by redesignating 

6 subsection (h) as subsection (i) and by inserting after sub7 section (g) the following new subsection: 

8 ‘‘(h) DISCLOSURE OF NAME UNDER WHICH ORGANI9 ZATION DOES BUSINESS AND ITS INTERNET WEB

10 SITE.—Any organization which is subject to the require11 ments of subsection (a) shall include on the return re12 quired under subsection (a)— 

13 ‘‘(1) any name under which such organization 

14 operates or does business, and 

15 ‘‘(2) the Internet web site address (if any) of 

16 such organization.’’. 

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

18 this section shall apply to returns filed after December 31, 

19 2004. 

20 SEC. 323. MODIFICATION TO REPORTING CAPITAL TRANS21 ACTIONS. 

22 (a) REQUIREMENT OF SUMMARY REPORT.—Section 

23 6033(c) (relating to additional provisions relating to pri24 vate foundations) is amended by adding at the end the 

25 following new sentence: ‘‘Any information included in an 

26 annual return regarding the gain or loss from the sale or 
266 

•S 6 IS1S 

1 other disposition of stock or securities which are listed on 

2 an established securities market which is required to be 

3 furnished in order to calculate the tax on net investment 

4 income shall also be reported in summary form with a no5 tice that detailed information is available upon request by 

6 the public.’’. 

7 (b) DISCLOSURE REQUIREMENT.—Section 6104(b) 

8 (relating to inspection of annual information returns), as 

9 amended by this Act, is amended by adding at the end 

10 the following new sentence: ‘‘With respect to any private 

11 foundation (as defined in section 509(a)), any information 

12 regarding the gain or loss from the sale or other disposi13 tion of stock or securities which are listed on an estab14 lished securities market which is required to be furnished 

15 in order to calculate the tax on net investment income but 

16 which is not in summary form is not required to be made 

17 available to the public under this subsection except upon 

18 the explicit request by a member of the public to the Sec19 retary.’’. 

20 (c) PUBLIC INSPECTION REQUIREMENT.—Section 

21 6104(d) (relating to public inspection of certain annual 

22 returns, applications for exemptions, and notices of sta23 tus) is amended— 
267 

•S 6 IS1S 

1 (1) by redesignating paragraph (6) (relating to 

2 disclosure of reports by Internal Revenue Service) as 

3 paragraph (7), 

4 (2) by redesignating paragraph (6) (relating to 

5 application to nonexempt charitable trusts and non6 exempt private foundations) as paragraph (8), and 

7 (3) by adding at the end the following new 

8 paragraph: 

9 ‘‘(9) APPLICATION TO PRIVATE FOUNDATION

10 CAPITAL TRANSACTION INFORMATION.—With re11 spect to any private foundation (as defined in sec12 tion 509(a)), any information regarding the gain or 

13 loss from the sale or other disposition of stock or se14 curities which are listed on an established securities 

15 market which is required to be furnished in order to 

16 calculate the tax on net investment income but 

17 which is not in summary form is not required to be 

18 made available to the public under this subsection 

19 except upon the explicit request by a member of the 

20 public to the private foundation in the form and 

21 manner of a request described in paragraph 

22 (1)(B).’’. 

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

24 this section shall apply to returns filed after December 31, 

25 2004. 
268 

•S 6 IS1S 

1 SEC. 324. DISCLOSURE THAT FORM 990 IS PUBLICLY AVAIL2 ABLE. 

3 (a) IN GENERAL.—The Commissioner of the Internal 

4 Revenue shall notify the public in appropriate publications 

5 or other materials of the extent to which an exempt orga6 nization’s Form 990, Form 990–EZ, or Form 990–PF is 

7 publicly available. 

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

9 this section shall apply to publications or other materials 

10 issued or revised after the date of the enactment of this 

11 Act. 

12 SEC. 325. DISCLOSURE TO STATE OFFICIALS OF PROPOSED 

13 ACTIONS RELATED TO SECTION 501(c) ORGA14 NIZATIONS. 

15 (a) IN GENERAL.—Subsection (c) of section 6104 is 

16 amended by striking paragraph (2) and inserting the fol17 lowing new paragraphs: 

18 ‘‘(2) DISCLOSURE OF PROPOSED ACTIONS RE19 LATED TO CHARITABLE ORGANIZATIONS.— 

20 ‘‘(A) SPECIFIC NOTIFICATIONS.—In the 

21 case of an organization to which paragraph (1) 

22 applies, the Secretary may disclose to the ap23 propriate State officer— 

24 ‘‘(i) a notice of proposed refusal to 

25 recognize such organization as an organi26 zation described in section 501(c)(3) or a 
269 

•S 6 IS1S 

1 notice of proposed revocation of such orga2 nization’s recognition as an organization 

3 exempt from taxation, 

4 ‘‘(ii) the issuance of a letter of pro5 posed deficiency of tax imposed under sec6 tion 507 or chapter 41 or 42, and 

7 ‘‘(iii) the names, addresses, and tax8 payer identification numbers of organiza9 tions which have applied for recognition as 

10 organizations described in section 

11 501(c)(3). 

12 ‘‘(B) ADDITIONAL DISCLOSURES.—Returns 

13 and return information of organizations with 

14 respect to which information is disclosed under 

15 subparagraph (A) may be made available for in16 spection by or disclosed to an appropriate State 

17 officer. 

18 ‘‘(C) PROCEDURES FOR DISCLOSURE.—In19 formation may be inspected or disclosed under 

20 subparagraph (A) or (B) only— 

21 ‘‘(i) upon written request by an ap22 propriate State officer, and 

23 ‘‘(ii) for the purpose of, and only to 

24 the extent necessary in, the administration 
270 

•S 6 IS1S 

1 of State laws regulating such organiza2 tions. 

3 Such information may only be inspected by or 

4 disclosed to representatives of the appropriate 

5 State officer designated as the individuals who 

6 are to inspect or to receive the returns or re7 turn information under this paragraph on be8 half of such officer. Such representatives shall 

9 not include any contractor or agent. 

10 ‘‘(D) DISCLOSURES OTHER THAN BY RE11 QUEST.—The Secretary may make available for 

12 inspection or disclose returns and return infor13 mation of an organization to which paragraph 

14 (1) applies to an appropriate State officer of 

15 any State if the Secretary determines that such 

16 inspection or disclosure may facilitate the reso17 lution of Federal or State issues relating to the 

18 tax-exempt status of such organization. 

19 ‘‘(3) DISCLOSURE WITH RESPECT TO CERTAIN

20 OTHER EXEMPT ORGANIZATIONS.—Upon written re21 quest by an appropriate State officer, the Secretary 

22 may make available for inspection or disclosure re23 turns and return information of an organization de24 scribed in paragraph (2), (4), (6), (7), (8), (10), or 

25 (13) of section 501(c) for the purpose of, and to the 
271 

•S 6 IS1S 

1 extent necessary in, the administration of State laws 

2 regulating the solicitation or administration of the 

3 charitable funds or charitable assets of such organi4 zations. Such information may be inspected only by 

5 or disclosed only to representatives of the appro6 priate State officer designated as the individuals who 

7 are to inspect or to receive the returns or return in8 formation under this paragraph on behalf of such of9 ficer. Such representatives shall not include any con10 tractor or agent. 

11 ‘‘(4) USE IN CIVIL JUDICIAL AND ADMINISTRA12 TIVE PROCEEDINGS.—Returns and return informa13 tion disclosed pursuant to this subsection may be 

14 disclosed in civil administrative and civil judicial pro15 ceedings pertaining to the enforcement of State laws 

16 regulating such organizations in a manner pre17 scribed by the Secretary similar to that for tax ad18 ministration proceedings under section 6103(h)(4). 

19 ‘‘(5) NO DISCLOSURE IF IMPAIRMENT.—Re20 turns and return information shall not be disclosed 

21 under this subsection, or in any proceeding described 

22 in paragraph (4), to the extent that the Secretary 

23 determines that such disclosure would seriously im24 pair Federal tax administration. 
272 

•S 6 IS1S 

1 ‘‘(6) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) RETURN AND RETURN INFORMA4 TION.—The terms ‘return’ and ‘return informa5 tion’ have the respective meanings given to such 

6 terms by section 6103(b). 

7 ‘‘(B) APPROPRIATE STATE OFFICER.—The 

8 term ‘appropriate State officer’ means— 

9 ‘‘(i) the State attorney general, 

10 ‘‘(ii) in the case of an organization to 

11 which paragraph (1) applies, any other 

12 State official charged with overseeing orga13 nizations of the type described in section 

14 501(c)(3), and 

15 ‘‘(iii) in the case of an organization to 

16 which paragraph (3) applies, the head of 

17 an agency designated by the State attorney 

18 general as having primary responsibility 

19 for overseeing the solicitation of funds for 

20 charitable purposes.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Subsection (a) of section 6103 is amend23 ed— 

24 (A) by inserting ‘‘or any appropriate State 

25 officer who has or had access to returns or re-
273 

•S 6 IS1S 

1 turn information under section 6104(c)’’ after 

2 ‘‘this section’’ in paragraph (2), and 

3 (B) by striking ‘‘or subsection (n)’’ in 

4 paragraph (3) and inserting ‘‘subsection (n), or 

5 section 6104(c)’’. 

6 (2) Subparagraph (A) of section 6103(p)(3) is 

7 amended by inserting ‘‘and section 6104(c)’’ after 

8 ‘‘section’’ in the first sentence. 

9 (3)(A) Paragraph (4) of section 6103(p) is 

10 amended by striking ‘‘(l)(16), (17), (19), or (20)’’ 

11 each place it appears and inserting ‘‘(l)(16), (18), 

12 (19), or (20) or any appropriate State officer (as de13 fined in section 6104(c))’’. 

14 (B) The Internal Revenue Code of 1986 shall 

15 be applied and administered as if the amendments 

16 made by section 408(a)(24) of the Working Families 

17 Tax Relief Act of 2004 had never been enacted. 

18 (4) The heading for paragraph (1) of section 

19 6104(c) is amended by inserting ‘‘FOR CHARITABLE

20 ORGANIZATIONS’’ after ‘‘RULE’’. 

21 (5) Paragraph (2) of section 7213(a) is amend22 ed by inserting ‘‘or under section 6104(c)’’ after 

23 ‘‘6103’’. 

24 (6) Paragraph (2) of section 7213A(a) is 

25 amended by inserting ‘‘or 6104(c)’’ after ‘‘6103’’. 
274 

•S 6 IS1S 

1 (7) Paragraph (2) of section 7431(a) is amend2 ed by inserting ‘‘(including any disclosure in viola3 tion of section 6104(c))’’ after ‘‘6103’’. 

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

5 this section shall take effect on the date of the enactment 

6 of this Act but shall not apply to requests made before 

7 such date. 

8 SEC. 326. EXPANSION OF PENALTIES TO PREPARERS OF 

9 FORM 990. 

10 (a) IN GENERAL.—Section 6695 (relating to other 

11 assessable penalties with respect to the preparation of in12 come tax returns for other persons) is amended by adding 

13 at the end the following new subsections: 

14 ‘‘(h) CERTAIN OMISSIONS AND MISREPRESENTA15 TIONS.— 

16 ‘‘(1) IN GENERAL.—Any person who prepares 

17 for compensation any return under section 6033 who 

18 omits or misrepresents any information with respect 

19 to such return which was known or should have been 

20 known by such person shall pay a penalty of $250 

21 with respect to such return. 

22 ‘‘(2) EXCEPTION FOR MINOR, INADVERTENT

23 OMISSIONS.—Paragraph (1) shall not apply to 

24 minor, inadvertent omissions. 
275 

•S 6 IS1S 

1 ‘‘(3) RULES FOR DETERMINING RETURN PRE2 PARER.—For purposes of this subsection and sub3 section (i), any reference to a person who prepares 

4 for compensation a return under section 6033— 

5 ‘‘(A) shall include any person who employs 

6 1 or more persons to prepare for compensation 

7 a return under section 6033, and 

8 ‘‘(B) shall not include any person who 

9 would be described in clause (i), (ii), (iii), or 

10 (iv) of section 7701(a)(36)(B) if such section 

11 referred to a return under section 6033. 

12 ‘‘(i) WILLFUL OR RECKLESS CONDUCT.— 

13 ‘‘(1) IN GENERAL.—Any person who prepares 

14 for compensation any return under section 6033 who 

15 recklessly or intentionally misrepresents any infor16 mation or recklessly or intentionally disregards any 

17 rule or regulation with respect to such return shall 

18 pay a penalty of $1,000 with respect to such return. 

19 ‘‘(2) COORDINATION WITH OTHER PEN20 ALTIES.—With respect to any return, the amount of 

21 the penalty payable by any person by reason of para22 graph (1) shall be reduced by the amount of the 

23 penalty paid by such person by reason of subsection 

24 (h) or section 6694.’’. 

25 (b) CONFORMING AMENDMENTS.— 
276 

•S 6 IS1S 

1 (1) The heading for section 6695 is amended by 

2 inserting ‘‘AND OTHER’’ after ‘‘INCOME TAX’’. 

3 (2) The item relating to section 6695 in the 

4 table of sections for part I of subchapter B of chap5 ter 68 is amended by inserting ‘‘and other’’ after 

6 ‘‘income tax’’. 

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

8 this section shall apply with respect to documents pre9 pared after the date of the enactment of this Act. 

10 SEC. 327. NOTIFICATION REQUIREMENT FOR ENTITIES NOT 

11 CURRENTLY REQUIRED TO FILE. 

12 (a) IN GENERAL.—Section 6033 (relating to returns 

13 by exempt organizations), as amended by this Act, is 

14 amended by redesignating subsection (i) as subsection (j) 

15 and by inserting after subsection (h) the following new 

16 subsection: 

17 ‘‘(i) ADDITIONAL NOTIFICATION REQUIREMENTS.— 

18 Any organization the gross receipts of which in any tax19 able year result in such organization being referred to in 

20 subsection (a)(2)(A)(ii) or (a)(2)(B)— 

21 ‘‘(1) shall furnish annually, at such time and in 

22 such manner as the Secretary may by forms or regu23 lations prescribe, information setting forth— 

24 ‘‘(A) the legal name of the organization, 
277 

•S 6 IS1S 

1 ‘‘(B) any name under which such organiza2 tion operates or does business, 

3 ‘‘(C) the organization’s mailing address 

4 and Internet web site address (if any), 

5 ‘‘(D) the organization’s taxpayer identifica6 tion number, 

7 ‘‘(E) the name and address of a principal 

8 officer, and 

9 ‘‘(F) evidence of the continuing basis for 

10 the organization’s exemption from the filing re11 quirements under subsection (a)(1), and 

12 ‘‘(2) upon the termination of the existence of 

13 the organization, shall furnish notice of such termi14 nation.’’. 

15 (b) LOSS OF EXEMPT STATUS FOR FAILURE TO

16 FILE RETURN OR NOTICE.—Section 6033 (relating to re17 turns by exempt organizations), as amended by subsection 

18 (a), is amended by redesignating subsection (j) as sub19 section (k) and by inserting after subsection (i) the fol20 lowing new subsection: 

21 ‘‘(j) LOSS OF EXEMPT STATUS FOR FAILURE TO

22 FILE RETURN OR NOTICE.— 

23 ‘‘(1) IN GENERAL.—If an organization de24 scribed in subsection (a)(1) or (i) fails to file an an25 nual return or notice required under either sub-
278 

•S 6 IS1S 

1 section for 3 consecutive years, such organization’s 

2 status as an organization exempt from tax under 

3 section 501(a) shall be considered revoked on and 

4 after the date set by the Secretary for the filing of 

5 the third annual return or notice. The Secretary 

6 shall publish and maintain a list of any organization 

7 the status of which is so revoked. 

8 ‘‘(2) APPLICATION NECESSARY FOR REINSTATE9 MENT.—Any organization the tax-exempt status of 

10 which is revoked under paragraph (1) must apply in 

11 order to obtain reinstatement of such status regard12 less of whether such organization was originally re13 quired to make such an application. 

14 ‘‘(3) RETROACTIVE REINSTATEMENT IF REA15 SONABLE CAUSE SHOWN FOR FAILURE.—If upon ap16 plication for reinstatement of status as an organiza17 tion exempt from tax under section 501(a), an orga18 nization described in paragraph (1) can show to the 

19 satisfaction of the Secretary evidence of reasonable 

20 cause for the failure described in such paragraph, 

21 the organization’s exempt status may, in the discre22 tion of the Secretary, be reinstated effective from 

23 the date of the revocation under such paragraph.’’. 
279 

•S 6 IS1S 

1 (c) NO DECLARATORY JUDGMENT RELIEF.—Section 

2 7428(b) (relating to limitations) is amended by adding at 

3 the end the following new paragraph: 

4 ‘‘(4) NONAPPLICATION FOR CERTAIN REVOCA5 TIONS.—No action may be brought under this sec6 tion with respect to any revocation of status de7 scribed in section 6033(j)(1).’’. 

8 (d) NO INSPECTION REQUIREMENT.—Section 

9 6104(b) (relating to inspection of annual information re10 turns) is amended by inserting ‘‘(other than subsection (i) 

11 thereof)’’ after ‘‘6033’’. 

12 (e) NO DISCLOSURE REQUIREMENT.—Section 

13 6104(d)(3) (relating to exceptions from disclosure require14 ments) is amended by redesignating subparagraph (B) as 

15 subparagraph (C) and by inserting after subparagraph (A) 

16 the following new subparagraph: 

17 ‘‘(B) NONDISCLOSURE OF ANNUAL NO18 TICES.—Paragraph (1) shall not require the 

19 disclosure of any notice required under section 

20 6033(i).’’. 

21 (f) NO MONETARY PENALTY FOR FAILURE TO NO22 TIFY.—Section 6652(c)(1) (relating to annual returns 

23 under section 6033 or 6012(a)(6)) is amended by adding 

24 at the end the following new subparagraph: 
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1 ‘‘(E) NO PENALTY FOR CERTAIN ANNUAL

2 NOTICES.—This paragraph shall not apply with 

3 respect to any notice required under section 

4 6033(i).’’. 

5 (g) SECRETARIAL OUTREACH REQUIREMENTS.— 

6 (1) NOTICE REQUIREMENT.—The Secretary of 

7 the Treasury shall notify in a timely manner every 

8 organization described in section 6033(i) of the In9 ternal Revenue Code of 1986 (as added by this sec10 tion) of the requirement under such section 6033(i) 

11 and of the penalty established under section 

12 6033(j)— 

13 (A) by mail, in the case of any organiza14 tion the identity and address of which is in15 cluded in the list of exempt organizations main16 tained by the Secretary, and 

17 (B) by Internet or other means of out18 reach, in the case of any other organization. 

19 (2) LOSS OF STATUS PENALTY FOR FAILURE TO

20 FILE RETURN.—The Secretary of the Treasury shall 

21 publicize in a timely manner in appropriate forms 

22 and instructions and through other appropriate 

23 means, the penalty established under section 6033(j) 

24 of such Code for the failure to file a return under 

25 section 6033(a)(1) of such Code. 
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1 (h) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to notices and returns with respect 

3 to annual periods beginning after 2004. 

4 Subtitle C—Other Charitable and 

5 Exempt Organization Provisions 

6 SEC. 331. MODIFICATION OF EXCISE TAX ON UNRELATED 

7 BUSINESS TAXABLE INCOME OF CHARITABLE 

8 REMAINDER TRUSTS. 

9 (a) IN GENERAL.—Subsection (c) of section 664 (re10 lating to exemption from income taxes) is amended to read 

11 as follows: 

12 ‘‘(c) TAXATION OF TRUSTS.— 

13 ‘‘(1) INCOME TAX.—A charitable remainder an14 nuity trust and a charitable remainder unitrust 

15 shall, for any taxable year, not be subject to any tax 

16 imposed by this subtitle. 

17 ‘‘(2) EXCISE TAX.— 

18 ‘‘(A) IN GENERAL.—In the case of a chari19 table remainder annuity trust or a charitable 

20 remainder unitrust which has unrelated busi21 ness taxable income (within the meaning of sec22 tion 512, determined as if part III of sub23 chapter F applied to such trust) for a taxable 

24 year, there is hereby imposed on such trust or 
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1 unitrust an excise tax equal to the amount of 

2 such unrelated business taxable income. 

3 ‘‘(B) CERTAIN RULES TO APPLY.—The tax 

4 imposed by subparagraph (A) shall be treated 

5 as imposed by chapter 42 for purposes of this 

6 title other than subchapter E of chapter 42. 

7 ‘‘(C) TAX COURT PROCEEDINGS.—For pur8 poses of this paragraph, the references in sec9 tion 6212(c)(1) to section 4940 shall be deemed 

10 to include references to this paragraph.’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2004. 

14 SEC. 332. MODIFICATIONS TO SECTION 512(b)(13). 

15 (a) IN GENERAL.—Paragraph (13) of section 512(b) 

16 (relating to special rules for certain amounts received from 

17 controlled entities) is amended by redesignating subpara18 graph (E) as subparagraph (F) and by inserting after sub19 paragraph (D) the following new subparagraph: 

20 ‘‘(E) PARAGRAPH TO APPLY ONLY TO EX21 CESS PAYMENTS.— 

22 ‘‘(i) IN GENERAL.—Subparagraph (A) 

23 shall apply only to the portion of a speci24 fied payment received or accrued by the 

25 controlling organization that exceeds the 
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1 amount which would have been paid or ac2 crued if such payment met the require3 ments prescribed under section 482. 

4 ‘‘(ii) ADDITION TO TAX FOR VALU5 ATION MISSTATEMENTS.—The tax imposed 

6 by this chapter on the controlling organiza7 tion shall be increased by an amount equal 

8 to 20 percent of the larger of— 

9 ‘‘(I) such excess determined with10 out regard to any amendment or sup11 plement to a return of tax, or 

12 ‘‘(II) such excess determined 

13 with regard to all such amendments 

14 and supplements.’’. 

15 (b) EFFECTIVE DATE.— 

16 (1) IN GENERAL.—The amendment made by 

17 this section shall apply to payments received or ac18 crued after December 31, 2000. 

19 (2) PAYMENTS SUBJECT TO BINDING CONTRACT

20 TRANSITION RULE.—If the amendments made by 

21 section 1041 of the Taxpayer Relief Act of 1997 did 

22 not apply to any amount received or accrued in the 

23 first 2 taxable years beginning on or after the date 

24 of the enactment of the Taxpayer Relief Act of 1997 

25 under any contract described in subsection (b)(2) of 
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1 such section, such amendments also shall not apply 

2 to amounts received or accrued under such contract 

3 before January 1, 2001. 

4 SEC. 333. SIMPLIFICATION OF LOBBYING EXPENDITURE 

5 LIMITATION. 

6 (a) REPEAL OF GRASSROOTS EXPENDITURE

7 LIMIT.—Paragraph (1) of section 501(h) (relating to ex8 penditures by public charities to influence legislation) is 

9 amended to read as follows: 

10 ‘‘(1) GENERAL RULE.—In the case of an orga11 nization to which this subsection applies, exemption 

12 from taxation under subsection (a) shall be denied 

13 because a substantial part of the activities of such 

14 organization consists of carrying on propaganda, or 

15 otherwise attempting, to influence legislation, but 

16 only if such organization normally makes lobbying 

17 expenditures in excess of the lobbying ceiling amount 

18 for such organization for each taxable year.’’. 

19 (b) EXCESS LOBBYING EXPENDITURES.—Section 

20 4911(b) is amended to read as follows: 

21 ‘‘(b) EXCESS LOBBYING EXPENDITURES.—For pur22 poses of this section, the term ‘excess lobbying expendi23 tures’ means, for a taxable year, the amount by which the 

24 lobbying expenditures made by the organization during the 
285 

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1 taxable year exceed the lobbying nontaxable amount for 

2 such organization for such taxable year.’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) Section 501(h)(2) is amended by striking 

5 subparagraphs (C) and (D). 

6 (2) Section 4911(c) is amended by striking 

7 paragraphs (3) and (4). 

8 (3) Paragraph (1)(A) of section 4911(f) is 

9 amended by striking ‘‘limits of section 501(h)(1) 

10 have’’ and inserting ‘‘limit of section 501(h)(1) 

11 has’’. 

12 (4) Paragraph (1)(C) of section 4911(f) is 

13 amended by striking ‘‘limits of section 501(h)(1) 

14 are’’ and inserting ‘‘limit of section 501(h)(1) is’’. 

15 (5) Paragraphs (4)(A) and (4)(B) of section 

16 4911(f) are each amended by striking ‘‘limits of sec17 tion 501(h)(1)’’ and inserting ‘‘limit of section 

18 501(h)(1)’’. 

19 (6) Paragraph (8) of section 6033(b) (relating 

20 to certain organizations described in section 

21 501(c)(3)) is amended by inserting ‘‘and’’ at the end 

22 of subparagraph (A) and by striking subparagraphs 

23 (C) and (D). 
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2004. 

4 SEC. 334. EXPEDITED REVIEW PROCESS FOR CERTAIN TAX5 EXEMPTION APPLICATIONS. 

6 (a) IN GENERAL.—The Secretary of the Treasury or 

7 the Secretary’s delegate (in this section, referred to as the 

8 ‘‘Secretary’’) shall adopt procedures to expedite the con9 sideration of applications for exempt status under section 

10 501(c)(3) of the Internal Revenue Code of 1986 filed after 

11 December 31, 2004, by any organization that— 

12 (1) is organized and operated for the primary 

13 purpose of providing social services; 

14 (2) is seeking a contract or grant under a Fed15 eral, State, or local program that provides funding 

16 for social services programs; 

17 (3) establishes that, under the terms and condi18 tions of the contract or grant program, an organiza19 tion is required to obtain such exempt status before 

20 the organization is eligible to apply for a contract or 

21 grant; 

22 (4) includes with its exemption application a 

23 copy of its completed Federal, State, or local con24 tract or grant application; and 
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1 (5) meets such other criteria as the Secretary 

2 deems appropriate for expedited consideration. 

3 The Secretary may prescribe other similar circumstances 

4 in which such organizations may be entitled to expedited 

5 consideration. 

6 (b) WAIVER OF APPLICATION FEE FOR EXEMPT

7 STATUS.—Any organization that meets the conditions de8 scribed in subsection (a) (without regard to paragraph (3) 

9 of that subsection) is entitled to a waiver of any fee for 

10 an application for exempt status under section 501(c)(3) 

11 of the Internal Revenue Code of 1986 if the organization 

12 certifies that the organization has had (or expects to have) 

13 average annual gross receipts of not more than $50,000 

14 during the preceding 4 years (or, in the case of an organi15 zation not in existence throughout the preceding 4 years, 

16 during such organization’s first 4 years). 

17 (c) SOCIAL SERVICES DEFINED.—For purposes of 

18 this section— 

19 (1) IN GENERAL.—The term ‘‘social services’’ 

20 means services directed at helping people in need, 

21 reducing poverty, improving outcomes of low-income 

22 children, revitalizing low-income communities, and 

23 empowering low-income families and low-income in24 dividuals to become self-sufficient, including— 
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1 (A) child care services, protective services 

2 for children and adults, services for children 

3 and adults in foster care, adoption services, 

4 services related to the management and mainte5 nance of the home, day care services for adults, 

6 and services to meet the special needs of chil7 dren, older individuals, and individuals with dis8 abilities (including physical, mental, or emo9 tional disabilities); 

10 (B) transportation services; 

11 (C) job training and related services, and 

12 employment services; 

13 (D) information, referral, and counseling 

14 services; 

15 (E) the preparation and delivery of meals, 

16 and services related to soup kitchens or food 

17 banks; 

18 (F) health support services; 

19 (G) literacy and mentoring programs; 

20 (H) services for the prevention and treat21 ment of juvenile delinquency and substance 

22 abuse, services for the prevention of crime and 

23 the provision of assistance to the victims and 

24 the families of criminal offenders, and services 
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1 related to the intervention in, and prevention of, 

2 domestic violence; and 

3 (I) services related to the provision of as4 sistance for housing under Federal law. 

5 (2) EXCLUSIONS.—The term does not include a 

6 program having the purpose of delivering edu7 cational assistance under the Elementary and Sec8 ondary Education Act of 1965 (20 U.S.C. 6301 et 

9 seq.) or under the Higher Education Act of 1965 

10 (20 U.S.C. 1001 et seq.). 

11 SEC. 335. CLARIFICATION OF DEFINITION OF CHURCH TAX 

12 INQUIRY. 

13 Subsection (i) of section 7611 (relating to section not 

14 to apply to criminal investigations, etc.) is amended by 

15 striking ‘‘or’’ at the end of paragraph (4), by striking the 

16 period at the end of paragraph (5) and inserting ‘‘, or’’, 

17 and by inserting after paragraph (5) the following: 

18 ‘‘(6) information provided by the Secretary re19 lated to the standards for exemption from tax under 

20 this title and the requirements under this title relat21 ing to unrelated business taxable income.’’. 

22 SEC. 336. EXPANSION OF DECLARATORY JUDGMENT REM23 EDY TO TAX-EXEMPT ORGANIZATIONS. 

24 (a) IN GENERAL.—Paragraph (1) of section 7428(a) 

25 (relating to creation of remedy) is amended— 
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1 (1) in subparagraph (B) by inserting after 

2 ‘‘509(a))’’ the following: ‘‘or as a private operating 

3 foundation (as defined in section 4942(j)(3))’’; and 

4 (2) by amending subparagraph (C) to read as 

5 follows: 

6 ‘‘(C) with respect to the initial qualifica7 tion or continuing qualification of an organiza8 tion as an organization described in section 

9 501(c) (other than paragraph (3)) or 501(d) 

10 which is exempt from tax under section 501(a), 

11 or’’. 

12 (b) COURT JURISDICTION.—Subsection (a) of section 

13 7428 is amended in the material following paragraph (2) 

14 by striking ‘‘United States Tax Court, the United States 

15 Claims Court, or the district court of the United States 

16 for the District of Columbia’’ and inserting the following: 

17 ‘‘United States Tax Court (in the case of any such deter18 mination or failure) or the United States Claims Court 

19 or the district court of the United States for the District 

20 of Columbia (in the case of a determination or failure with 

21 respect to an issue referred to in subparagraph (A) or (B) 

22 of paragraph (1)),’’. 

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

24 this section shall apply to pleadings filed with respect to 
291 

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1 determinations (or requests for determinations) made 

2 after December 31, 2004. 

3 SEC. 337. DEFINITION OF CONVENTION OR ASSOCIATION 

4 OF CHURCHES. 

5 Section 7701 (relating to definitions) is amended by 

6 redesignating subsection (o) as subsection (p) and by in7 serting after subsection (n) the following new subsection: 

8 ‘‘(o) CONVENTION OR ASSOCIATION OF CHURCHES.— 

9 For purposes of this title, any organization which is other10 wise a convention or association of churches shall not fail 

11 to so qualify merely because the membership of such orga12 nization includes individuals as well as churches or be13 cause individuals have voting rights in such organiza14 tion.’’. 

15 SEC. 338. PAYMENTS BY CHARITABLE ORGANIZATIONS TO 

16 VICTIMS OF WAR ON TERRORISM AND FAMI17 LIES OF ASTRONAUTS KILLED IN THE LINE 

18 OF DUTY. 

19 (a) IN GENERAL.—For purposes of the Internal Rev20 enue Code of 1986— 

21 (1) any payment made by an organization de22 scribed in section 501(c)(3) of such Code to— 

23 (A) a member of the Armed Forces of the 

24 United States, or to an individual of such mem25 ber’s immediate family, by reason of the death, 
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1 injury, wounding, or illness of such member in2 curred as the result of the military response of 

3 the United States to the terrorist attacks 

4 against the United States on September 11, 

5 2001, or 

6 (B) an individual of an astronaut’s imme7 diate family by reason of the death of such as8 tronaut occurring in the line of duty after De9 cember 31, 2002, 

10 shall be treated as related to the purpose or function 

11 constituting the basis for such organization’s exemp12 tion under section 501 of such Code if such payment 

13 is made using an objective formula which is consist14 ently applied, and 

15 (2) in the case of a private foundation (as de16 fined in section 509 of such Code), any payment de17 scribed in paragraph (1) shall not be treated as 

18 made to a disqualified person for purposes of section 

19 4941 of such Code. 

20 (b) EFFECTIVE DATES.—This section shall apply 

21 to— 

22 (1) payments described in subsection (a)(1)(A) 

23 made after the date of the enactment of this Act and 

24 before September 11, 2005, and 
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1 (2) payments described in subsection (a)(1)(B) 

2 made after December 31, 2002. 

3 SEC. 339. MODIFICATION OF SCHOLARSHIP FOUNDATION 

4 RULES. 

5 In applying the limitations on the percentage of 

6 scholarship grants which may be awarded after the date 

7 of the enactment of this Act, to children of current or 

8 former employees under Revenue Procedure 76–47, such 

9 percentage shall be increased to 35 percent of the eligible 

10 applicants to be considered by the selection committee and 

11 to 20 percent of individuals eligible for the grants, but 

12 only if the foundation awarding the grants demonstrates 

13 that, in addition to meeting the other requirements of Rev14 enue Procedure 76–47, it provides a comparable number 

15 and aggregate amount of grants during the same program 

16 year to individuals who are not such employees, children 

17 or dependents of such employees, or affiliated with the em18 ployer of such employees. 

19 SEC. 340. TREATMENT OF CERTAIN HOSPITAL SUPPORT 

20 ORGANIZATIONS AS QUALIFIED ORGANIZA21 TIONS FOR PURPOSES OF DETERMINING AC22 QUISITION INDEBTEDNESS. 

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

24 514(c)(9) (relating to real property acquired by a qualified 

25 organization) is amended by striking ‘‘or’’ at the end of 
294 

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1 clause (ii), by striking the period at the end of clause (iii) 

2 and inserting ‘‘; or’’, and by adding at the end the fol3 lowing new clause: 

4 ‘‘(iv) a qualified hospital support 

5 organization (as defined in subpara6 graph (I)).’’. 

7 (b) QUALIFIED HOSPITAL SUPPORT ORGANIZA8 TIONS.—Paragraph (9) of section 514(c) is amended by 

9 adding at the end the following new subparagraph: 

10 ‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGA11 NIZATIONS.—For purposes of subparagraph 

12 (C)(iv), the term ‘qualified hospital support or13 ganization’ means, with respect to any eligible 

14 indebtedness (including any qualified refi15 nancing of such eligible indebtedness), a sup16 port organization (as defined in section 

17 509(a)(3)) which supports a hospital described 

18 in section 119(d)(4)(B) and with respect to 

19 which— 

20 ‘‘(i) more than half of the organi21 zation’s assets (by value) at any time 

22 since its organization— 

23 ‘‘(I) were acquired, directly 

24 or indirectly, by testamentary gift 

25 or devise, and 
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1 ‘‘(II) consisted of real prop2 erty, and 

3 ‘‘(ii) the fair market value of the 

4 organization’s real estate acquired, di5 rectly or indirectly, by gift or devise, 

6 exceeded 25 percent of the fair mar7 ket value of all investment assets held 

8 by the organization immediately prior 

9 to the time that the eligible indebted10 ness was incurred. 

11 For purposes of this subparagraph, the term 

12 ‘eligible indebtedness’ means indebtedness se13 cured by real property acquired by the organi14 zation, directly or indirectly, by gift or devise, 

15 the proceeds of which are used exclusively to ac16 quire any leasehold interest in such real prop17 erty or for improvements on, or repairs to, such 

18 real property. A determination under clauses (i) 

19 and (ii) of this subparagraph shall be made 

20 each time such an eligible indebtedness (or the 

21 qualified refinancing of such an eligible indebt22 edness) is incurred. For purposes of this sub23 paragraph, a refinancing of such an eligible in24 debtedness shall be considered qualified if such 

25 refinancing does not exceed the amount of the 
296 

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1 refinanced eligible indebtedness immediately be2 fore the refinancing.’’. 

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

4 this section shall apply to indebtedness incurred after De5 cember 31, 2004. 

6 SEC. 341. MATCHING GRANTS TO LOW-INCOME TAXPAYER 

7 CLINICS FOR RETURN PREPARATION. 

8 (a) IN GENERAL.—Chapter 77 (relating to miscella9 neous provisions) is amended by inserting after section 

10 7526 the following new section: 

11 ‘‘SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-IN12 COME TAXPAYERS. 

13 ‘‘(a) IN GENERAL.—The Secretary may, subject to 

14 the availability of appropriated funds, make grants to pro15 vide matching funds for the development, expansion, or 

16 continuation of qualified return preparation clinics. 

17 ‘‘(b) DEFINITIONS.—For purposes of this section— 

18 ‘‘(1) QUALIFIED RETURN PREPARATION CLIN19 IC.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualified 

21 return preparation clinic’ means a clinic 

22 which— 

23 ‘‘(i) does not charge more than a 

24 nominal fee for its services (except for re25 imbursement of actual costs incurred), and 
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1 ‘‘(ii) operates programs which assist 

2 low-income taxpayers in preparing and fil3 ing their Federal income tax returns, in4 cluding schedules reporting sole proprietor5 ship or farm income. 

6 ‘‘(B) ASSISTANCE TO LOW-INCOME TAX7 PAYERS.—A clinic is treated as assisting low-in8 come taxpayers under subparagraph (A)(ii) if 

9 at least 90 percent of the taxpayers assisted by 

10 the clinic have incomes which do not exceed 250 

11 percent of the poverty level, as determined in 

12 accordance with criteria established by the Di13 rector of the Office of Management and Budg14 et. 

15 ‘‘(2) CLINIC.—The term ‘clinic’ includes— 

16 ‘‘(A) a clinical program at an eligible edu17 cational institution (as defined in section 

18 529(e)(5)) which satisfies the requirements of 

19 paragraph (1) through student assistance of 

20 taxpayers in return preparation and filing, and 

21 ‘‘(B) an organization described in section 

22 501(c) and exempt from tax under section 

23 501(a) which satisfies the requirements of para24 graph (1). 

25 ‘‘(c) SPECIAL RULES AND LIMITATIONS.— 
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1 ‘‘(1) AGGREGATE LIMITATION.—Unless other2 wise provided by specific appropriation, the Sec3 retary shall not allocate more than $10,000,000 per 

4 year (exclusive of costs of administering the pro5 gram) to grants under this section. 

6 ‘‘(2) OTHER APPLICABLE RULES.—Rules simi7 lar to the rules under paragraphs (2) through (5) of 

8 section 7526(c) shall apply with respect to the 

9 awarding of grants to qualified return preparation 

10 clinics.’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for chapter 77 is amended by inserting after the item re13 lating to section 7526 the following new item: 

‘‘Sec. 7526A. Return preparation clinics for low-income taxpayers.’’. 

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

15 this section shall apply to grants made after the date of 

16 the enactment of this Act. 

17 SEC. 342. EXEMPTION OF QUALIFIED 501(c)(3) BONDS FOR 

18 NURSING HOMES FROM FEDERAL GUAR19 ANTEE PROHIBITIONS. 

20 (a) IN GENERAL.—Section 149(b)(3) (relating to ex21 ceptions) is amended by adding at the end the following 

22 new subparagraph: 

23 ‘‘(E) EXCEPTION FOR QUALIFIED 501(c)(3)

24 BONDS FOR NURSING HOMES.— 
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1 ‘‘(i) IN GENERAL.—Paragraph (1) 

2 shall not apply to any qualified 501(c)(3) 

3 bond issued before the date which is 1 year 

4 after the date of the enactment of this sub5 paragraph for the benefit of an organiza6 tion described in section 501(c)(3), if such 

7 bond is part of an issue the proceeds of 

8 which are used to finance 1 or more of the 

9 following facilities primarily for the benefit 

10 of the elderly: 

11 ‘‘(I) Licensed nursing home facil12 ity. 

13 ‘‘(II) Licensed or certified as14 sisted living facility. 

15 ‘‘(III) Licensed personal care fa16 cility. 

17 ‘‘(IV) Continuing care retirement 

18 community. 

19 ‘‘(ii) LIMITATION.—With respect to 

20 any calendar year, clause (i) shall not 

21 apply to any bond described in such clause 

22 if the aggregate authorized face amount of 

23 the issue of which such bond is a part 

24 when increased by the outstanding amount 
300 

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1 of such bonds issued by the issuer for such 

2 calendar year exceeds $15,000,000. 

3 ‘‘(iii) CONTINUING CARE RETIREMENT

4 COMMUNITY.—For purposes of this sub5 paragraph, the term ‘continuing care re6 tirement community’ means a community 

7 which provides, on the same campus, a 

8 continuum of residential living options and 

9 support services to persons at least 60 

10 years of age under a written agreement. 

11 For purposes of the preceding sentence, 

12 the residential living options shall include 

13 independent living units, nursing home 

14 beds, and either assisted living units or 

15 personal care beds.’’. 

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

17 this section shall apply to bonds issued after the date of 

18 the enactment of this Act. 

19 SEC. 343. EXCISE TAXES EXEMPTION FOR BLOOD COL20 LECTOR ORGANIZATIONS. 

21 (a) EXEMPTION FROM IMPOSITION OF SPECIAL

22 FUELS TAX.—Section 4041(g) (relating to other exemp23 tions) is amended by striking ‘‘and’’ at the end of para24 graph (3), by striking the period in paragraph (4) and 
301 

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1 inserting ‘‘; and’’, and by inserting after paragraph (4) 

2 the following new paragraph: 

3 ‘‘(5) with respect to the sale of any liquid to a 

4 qualified blood collector organization (as defined in 

5 section 7701(a)(49)) for such organization’s exclu6 sive use, or with respect to the use by a qualified 

7 blood collector organization of any liquid as a fuel.’’. 

8 (b) EXEMPTION FROM MANUFACTURERS EXCISE

9 TAX.— 

10 (1) IN GENERAL.—Section 4221(a) (relating to 

11 certain tax-free sales) is amended by striking ‘‘or’’ 

12 at the end of paragraph (4), by adding ‘‘or’’ at the 

13 end of paragraph (5), and by inserting after para14 graph (5) the following new paragraph: 

15 ‘‘(6) to a qualified blood collector organization 

16 (as defined in section 7701(a)(49)) for such organi17 zation’s exclusive use,’’. 

18 (2) CONFORMING AMENDMENTS.— 

19 (A) The second sentence of section 

20 4221(a) is amended by striking ‘‘Paragraphs 

21 (4) and (5)’’ and inserting ‘‘Paragraphs (4), 

22 (5), and (6)’’. 

23 (B) Section 6421(c) is amended by strik24 ing ‘‘or (5)’’ and inserting ‘‘(5), or (6)’’. 
302 

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1 (c) EXEMPTION FROM COMMUNICATION EXCISE

2 TAX.— 

3 (1) IN GENERAL.—Section 4253 (relating to ex4 emptions) is amended by redesignating subsection 

5 (k) as subsection (l) and inserting after subsection 

6 (j) the following new subsection: 

7 ‘‘(k) EXEMPTION FOR QUALIFIED BLOOD COL8 LECTOR ORGANIZATIONS.—Under regulations provided by 

9 the Secretary, no tax shall be imposed under section 4251 

10 on any amount paid by a qualified blood collector organi11 zation (as defined in section 7701(a)) for services or facili12 ties furnished to such organization.’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 4253(l), as redesignated by paragraph (1), is 

15 amended by striking ‘‘or (j)’’ and inserting ‘‘(j), or 

16 (k)’’. 

17 (d) CREDIT FOR REFUND FOR CERTAIN TAXES ON

18 SALES AND SERVICES.— 

19 (1) DEEMED OVERPAYMENT.— 

20 (A) IN GENERAL.—Section 6416(b)(2) is 

21 amended by redesignating subparagraphs (E) 

22 and (F) as subparagraphs (F) and (G), respec23 tively, and by inserting after subparagraph (D) 

24 the following new subparagraph: 
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1 ‘‘(E) sold to a qualified blood collector or2 ganization’s (as defined in section 7701(a)(49)) 

3 for such organization’s exclusive use;’’. 

4 (B) CONFORMING AMENDMENTS.—Section 

5 6416(b)(2) is amended— 

6 (i) by striking ‘‘Subparagraphs (C) 

7 and (D)’’ and inserting ‘‘Subparagraphs 

8 (C), (D), and (E)’’, and 

9 (ii) by striking ‘‘(C), and (D)’’ and in10 serting ‘‘(C), (D), and (E)’’. 

11 (2) SALES OF TIRES.—Clause (ii) of section 

12 6416(b)(4)(B) is amended by inserting ‘‘sold to a 

13 qualified blood collector organization (as defined in 

14 section 7701(a)(49)),’’ after ‘‘for its exclusive use,’’. 

15 (e) DEFINITION OF QUALIFIED BLOOD COLLECTOR

16 ORGANIZATION.—Section 7701(a) is amended by inserting 

17 at the end the following new paragraph: 

18 ‘‘(49) QUALIFIED BLOOD COLLECTOR ORGANI19 ZATION.—For purposes of this title, the term ‘quali20 fied blood collector organization’ means an organiza21 tion which is— 

22 ‘‘(A) described in section 501(c)(3) and ex23 empt from tax under section 501(a), 

24 ‘‘(B) registered by the Food and Drug Ad25 ministration to collect blood, and 
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1 ‘‘(C) primarily engaged in the activity of 

2 the collection of blood.’’. 

3 (f) EFFECTIVE DATE.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section 

6 shall apply with respect to excise taxes imposed on 

7 sales or uses occurring on or after October 1, 2004. 

8 (2) REFUND OF GASOLINE TAX.—For purposes 

9 of section 6421(c) of the Internal Revenue Code of 

10 1986 and any other provision that allows for a re11 fund or a payment in respect of an excise tax pay12 able at a level before the sale to a qualified blood 

13 collector organization, the amendments made by this 

14 section shall apply with respect to sales to a quali15 fied collector organization on or after October 1, 

16 2004. 

17 SEC. 344. PILOT PROJECT FOR FOREST CONSERVATION AC18 TIVITIES. 

19 (a) TAX-EXEMPT BOND FINANCING.— 

20 (1) IN GENERAL.—For purposes of the Internal 

21 Revenue Code of 1986, any qualified forest con22 servation bond shall be treated as an exempt facility 

23 bond under section 142 of such Code. 

24 (2) QUALIFIED FOREST CONSERVATION

25 BOND.—For purposes of this section, the term 
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•S 6 IS1S 

1 ‘‘qualified forest conservation bond’’ means any bond 

2 issued as part of an issue if— 

3 (A) 95 percent or more of the net proceeds 

4 (as defined in section 150(a)(3) of such Code) 

5 of such issue are to be used for qualified project 

6 costs, 

7 (B) such bond is issued for a qualified or8 ganization, and 

9 (C) such bond is issued before December 

10 31, 2008. 

11 (3) LIMITATION ON AGGREGATE AMOUNT

12 ISSUED.— 

13 (A) IN GENERAL.—The maximum aggre14 gate face amount of bonds which may be issued 

15 under this subsection shall not exceed 

16 $2,000,000,000 for all projects (excluding re17 funding bonds). 

18 (B) ALLOCATION OF LIMITATION.—The 

19 limitation described in subparagraph (A) shall 

20 be allocated by the Secretary of the Treasury 

21 among qualified organizations based on criteria 

22 established by the Secretary not later than 180 

23 days after the date of the enactment of this sec24 tion, after consultation with the Chief of the 

25 Forest Service. 
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1 (4) QUALIFIED PROJECT COSTS.—For purposes 

2 of this subsection, the term ‘‘qualified project costs’’ 

3 means the sum of— 

4 (A) the cost of acquisition by the qualified 

5 organization from an unrelated person of for6 ests and forest land which at the time of acqui7 sition or immediately thereafter are subject to 

8 a conservation restriction described in sub9 section (c)(2), 

10 (B) capitalized interest on the qualified 

11 forest conservation bonds for the 3-year period 

12 beginning on the date of issuance of such 

13 bonds, and 

14 (C) credit enhancement fees which con15 stitute qualified guarantee fees (within the 

16 meaning of section 148 of such Code). 

17 (5) SPECIAL RULES.—In applying the Internal 

18 Revenue Code of 1986 to any qualified forest con19 servation bond, the following modifications shall 

20 apply: 

21 (A) Section 146 of such Code (relating to 

22 volume cap) shall not apply. 

23 (B) For purposes of section 147(b) of such 

24 Code (relating to maturity may not exceed 120 

25 percent of economic life), the land and standing 
307 

•S 6 IS1S 

1 timber acquired with proceeds of qualified for2 est conservation bonds shall have an economic 

3 life of 35 years. 

4 (C) Subsections (c) and (d) of section 147 

5 of such Code (relating to limitations on acquisi6 tion of land and existing property) shall not 

7 apply. 

8 (D) Section 57(a)(5) of such Code (relat9 ing to tax-exempt interest) shall not apply to 

10 interest on qualified forest conservation bonds. 

11 (6) TREATMENT OF CURRENT REFUNDING

12 BONDS.—Paragraphs (2)(C) and (3) shall not apply 

13 to any bond (or series of bonds) issued to refund a 

14 qualified forest conservation bond issued before De15 cember 31, 2008, if— 

16 (A) the average maturity date of the issue 

17 of which the refunding bond is a part is not 

18 later than the average maturity date of the 

19 bonds to be refunded by such issue, 

20 (B) the amount of the refunding bond does 

21 not exceed the outstanding amount of the re22 funded bond, and 

23 (C) the net proceeds of the refunding bond 

24 are used to redeem the refunded bond not later 
308 

•S 6 IS1S 

1 than 90 days after the date of the issuance of 

2 the refunding bond. 

3 For purposes of subparagraph (A), average maturity 

4 shall be determined in accordance with section 

5 147(b)(2)(A) of such Code. 

6 (7) EFFECTIVE DATE.—This subsection shall 

7 apply to obligations issued on or after the date 

8 which is 180 days after the enactment of this Act. 

9 (b) ITEMS FROM QUALIFIED HARVESTING ACTIVI10 TIES NOT SUBJECT TO TAX OR TAKEN INTO ACCOUNT.— 

11 (1) IN GENERAL.—Income, gains, deductions, 

12 losses, or credits from a qualified harvesting activity 

13 conducted by a qualified organization shall not be 

14 subject to tax or taken into account under subtitle 

15 A of the Internal Revenue Code of 1986. 

16 (2) LIMITATION.—The amount of income ex17 cluded from gross income under paragraph (1) for 

18 any taxable year shall not exceed the amount used 

19 by the qualified organization to make debt service 

20 payments during such taxable year for qualified for21 est conservation bonds. 

22 (3) QUALIFIED HARVESTING ACTIVITY.—For 

23 purposes of paragraph (1)— 
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1 (A) IN GENERAL.—The term ‘‘qualified 

2 harvesting activity’’ means the sale, lease, or 

3 harvesting, of standing timber— 

4 (i) on land owned by a qualified orga5 nization which was acquired with proceeds 

6 of qualified forest conservation bonds, 

7 (ii) with respect to which a written ac8 knowledgement has been obtained by the 

9 qualified organization from the State or 

10 local governments with jurisdiction over 

11 such land that the acquisition lessens the 

12 burdens of such government with respect 

13 to such land, and 

14 (iii) pursuant to a qualified conserva15 tion plan adopted by the qualified organi16 zation. 

17 (B) EXCEPTIONS.— 

18 (i) CESSATION AS QUALIFIED ORGANI19 ZATION.—The term ‘‘qualified harvesting 

20 activity’’ shall not include any sale, lease, 

21 or harvesting for any period during which 

22 the organization ceases to qualify as a 

23 qualified organization. 

24 (ii) EXCEEDING LIMITS ON HAR25 VESTING.—The term ‘‘qualified harvesting 
310 

•S 6 IS1S 

1 activity’’ shall not include any sale, lease, 

2 or harvesting of standing timber on land 

3 acquired with proceeds of qualified forest 

4 conservation bonds to the extent that— 

5 (I) the average annual area of 

6 timber harvested from such land ex7 ceeds 2.5 percent of the total area of 

8 such land or, 

9 (II) the quantity of timber re10 moved from such land exceeds the 

11 quantity which can be removed from 

12 such land annually in perpetuity on a 

13 sustained-yield basis with respect to 

14 such land. 

15 The limitations under subclauses (I) and 

16 (II) shall not apply to post-fire restoration 

17 and rehabilitation or sanitation harvesting 

18 of timber stands which are substantially 

19 damaged by fire, windthrow, or other ca20 tastrophes, or which are in imminent dan21 ger from insect or disease attack. 

22 (4) TERMINATION.—This subsection shall not 

23 apply to any qualified harvesting activity of a quali24 fied organization occurring after the date on which 

25 there is no outstanding qualified forest conservation 
311 

•S 6 IS1S 

1 bond with respect to such qualified organization or 

2 any such bond ceases to be a tax-exempt bond. 

3 (5) PARTIAL RECAPTURE OF BENEFITS IF HAR4 VESTING LIMIT EXCEEDED.—If, as of the date that 

5 this subsection ceases to apply under paragraph (3), 

6 the average annual area of timber harvested from 

7 the land exceeds the requirement of paragraph 

8 (3)(B)(ii)(I), the tax imposed by chapter 1 of the In9 ternal Revenue Code of 1986 shall be increased, 

10 under rules prescribed by the Secretary of the 

11 Treasury, by the sum of the tax benefits attributable 

12 to such excess and interest at the underpayment 

13 rate under section 6621 of such Code for the period 

14 of the underpayment. 

15 (c) DEFINITIONS.—For purposes of this section— 

16 (1) QUALIFIED CONSERVATION PLAN.—The 

17 term ‘‘qualified conservation plan’’ means a multiple 

18 land use program or plan which— 

19 (A) is designed and administered primarily 

20 for the purposes of protecting and enhancing 

21 wildlife and fish, timber, scenic attributes, 

22 recreation, and soil and water quality of the 

23 forest and forest land, 
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•S 6 IS1S 

1 (B) mandates that conservation of forest 

2 and forest land is the single-most significant 

3 use of the forest and forest land, and 

4 (C) requires that timber harvesting be con5 sistent with— 

6 (i) restoring and maintaining ref7 erence conditions for the region’s ecotype, 

8 (ii) restoring and maintaining a rep9 resentative sample of young, mid, and late 

10 successional forest age classes, 

11 (iii) maintaining or restoring the re12 sources’ ecological health for purposes of 

13 preventing damage from fire, insect, or dis14 ease, 

15 (iv) maintaining or enhancing wildlife 

16 or fish habitat, or 

17 (v) enhancing research opportunities 

18 in sustainable renewable resource uses. 

19 (2) CONSERVATION RESTRICTION.—The con20 servation restriction described in this paragraph is a 

21 restriction which— 

22 (A) is granted in perpetuity to an unre23 lated person which is described in section 

24 170(h)(3) of such Code and which, in the case 
313 

•S 6 IS1S 

1 of a nongovernmental unit, is organized and op2 erated for conservation purposes, 

3 (B) meets the requirements of clause (ii) 

4 or (iii)(II) of section 170(h)(4)(A) of such 

5 Code, 

6 (C) obligates the qualified organization to 

7 pay the costs incurred by the holder of the con8 servation restriction in monitoring compliance 

9 with such restriction, and 

10 (D) requires an increasing level of con11 servation benefits to be provided whenever cir12 cumstances allow it. 

13 (3) QUALIFIED ORGANIZATION.—The term 

14 ‘‘qualified organization’’ means an organization— 

15 (A) which is a nonprofit organization sub16 stantially all the activities of which are chari17 table, scientific, or educational, including ac18 quiring, protecting, restoring, managing, and 

19 developing forest lands and other renewable re20 sources for the long-term charitable, edu21 cational, scientific and public benefit, 

22 (B) more than half of the value of the 

23 property of which consists of forests and forest 

24 land acquired with the proceeds from qualified 

25 forest conservation bonds, 
314 

•S 6 IS1S 

1 (C) which periodically conducts educational 

2 programs designed to inform the public of envi3 ronmentally sensitive forestry management and 

4 conservation techniques, 

5 (D) which has at all times a board of di6 rectors— 

7 (i) at least 20 percent of the members 

8 of which represent the holders of the con9 servation restriction described in para10 graph (2), 

11 (ii) at least 20 percent of the mem12 bers of which are public officials, and 

13 (iii) not more than one-third of the 

14 members of which are individuals who are 

15 or were at any time within 5 years before 

16 the beginning of a term of membership on 

17 the board, an employee of, independent 

18 contractor with respect to, officer of, direc19 tor of, or held a material financial interest 

20 in, a commercial forest products enterprise 

21 with which the qualified organization has a 

22 contractual or other financial arrangement, 

23 (E) the bylaws of which require at least 

24 two-thirds of the members of the board of direc25 tors to vote affirmatively to approve the quali-
315 

•S 6 IS1S 

1 fied conservation plan and any change thereto, 

2 and 

3 (F) upon dissolution, is required to dedi4 cate its assets to— 

5 (i) an organization described in sec6 tion 501(c)(3) of such Code which is orga7 nized and operated for conservation pur8 poses, or 

9 (ii) a governmental unit described in 

10 section 170(c)(1) of such Code. 

11 (4) UNRELATED PERSON.—The term ‘‘unre12 lated person’’ means a person who is not a related 

13 person. 

14 (5) RELATED PERSON.—A person shall be 

15 treated as related to another person if— 

16 (A) such person bears a relationship to 

17 such other person described in section 267(b) 

18 (determined without regard to paragraph (9) 

19 thereof), or 707(b)(1), of such Code, deter20 mined by substituting ‘‘25 percent’’ for ‘‘50 

21 percent’’ each place it appears therein, and 

22 (B) in the case such other person is a non23 profit organization, if such person controls di24 rectly or indirectly more than 25 percent of the 

25 governing body of such organization. 
316 

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1 SEC. 345. CLARIFICATION OF TREATMENT OF JOHNNY 

2 MICHEAL SPANN PATRIOT TRUSTS. 

3 (a) CLARIFICATION OF TAX-EXEMPT STATUS OF

4 TRUSTS.— 

5 (1) IN GENERAL.—Subsection (b) of section 

6 601 of the Homeland Security Act of 2002 is 

7 amended to read as follows: 

8 ‘‘(b) DESIGNATION OF JOHNNY MICHEAL SPANN PA9 TRIOT TRUSTS.—Any charitable corporation, fund, foun10 dation, or trust (or separate fund or account thereof) 

11 which is described in section 501(c)(3) of the Internal 

12 Revenue Code of 1986 and exempt from tax under section 

13 501(a) of such Code and meets the requirements described 

14 in subsection (c) shall be eligible to designate itself as a 

15 ‘Johnny Micheal Spann Patriot trust’.’’. 

16 (2) CONFORMING AMENDMENT.—Section 

17 601(c)(3) of such Act is amended by striking 

18 ‘‘based’’ and all that follows through ‘‘Trust’’. 

19 (b) PUBLICLY AVAILABLE AUDITS.—Section 

20 601(c)(7) of the Homeland Security Act of 2002 is amend21 ed by striking ‘‘shall be filed with the Internal Revenue 

22 Service, and shall be open to public inspection’’ and insert23 ing ‘‘shall be open to public inspection consistent with sec24 tion 6104(d)(1) of the Internal Revenue Code of 1986’’. 

25 (c) CLARIFICATION OF REQUIRED DISTRIBUTIONS

26 TO PRIVATE FOUNDATION.— 
317 

•S 6 IS1S 

1 (1) IN GENERAL.—Section 601(c)(8) of the 

2 Homeland Security Act of 2002 is amended by strik3 ing ‘‘not placed’’ and all that follows and inserting 

4 ‘‘not so distributed shall be contributed to a private 

5 foundation which is described in section 509(a) of 

6 the Internal Revenue Code of 1986 and exempt from 

7 tax under section 501(a) of such Code and which is 

8 dedicated to such beneficiaries not later than 36 

9 months after the end of the fiscal year in which such 

10 funds, donations, or earnings are received.’’. 

11 (2) CONFORMING AMENDMENTS.—Section 

12 601(c) of such Act is amended— 

13 (A) by striking ‘‘(or, if placed in a private 

14 foundation, held in trust for)’’ in paragraph (1) 

15 and inserting ‘‘(or contributed to a private 

16 foundation described in paragraph (8) for the 

17 benefit of)’’, and 

18 (B) by striking ‘‘invested in a private foun19 dation’’ in paragraph (2) and inserting ‘‘con20 tributed to a private foundation described in 

21 paragraph (8)’’. 

22 (d) REQUIREMENTS FOR DISTRIBUTIONS FROM

23 TRUSTS.—Section 601(c)(9)(A) of the Homeland Security 

24 Act of 2002 is amended by striking ‘‘should’’ and inserting 

25 ‘‘shall’’. 
318 

•S 6 IS1S 

1 (e) REGULATIONS REGARDING NOTIFICATION OF

2 TRUST BENEFICIARIES.—Section 601(f) of the Homeland 

3 Security Act of 2002 is amended by striking ‘‘this section’’ 

4 and inserting ‘‘subsection (e)’’. 

5 (f) EFFECTIVE DATE.—The amendments made by 

6 this section shall take effect as if included in the enact7 ment of section 601 of the Homeland Security Act of 

8 2002. 

9 Subtitle D—Social Services Block 

10 Grant 

11 SEC. 351. RESTORATION OF FUNDS FOR THE SOCIAL SERV12 ICES BLOCK GRANT. 

13 (a) FINDINGS.—Congress makes the following find14 ings: 

15 (1) On August 22, 1996, the Personal Respon16 sibility and Work Opportunity Reconciliation Act of 

17 1996 (Public Law 104–193; 110 Stat. 2105) was 

18 signed into law. 

19 (2) In enacting that law, Congress authorized 

20 $2,800,000,000 for fiscal year 2003 and each fiscal 

21 year thereafter to carry out the Social Services 

22 Block Grant program established under title XX of 

23 the Social Security Act (42 U.S.C. 1397 et seq.). 

24 (b) RESTORATION OF FUNDS.—Section 2003(c)(11) 

25 of the Social Security Act (42 U.S.C. 1397b(c)(11)) is 
319 

•S 6 IS1S 

1 amended by inserting ‘‘, except that, with respect to fiscal 

2 year 2006, the amount shall be $1,975,000,000, and with 

3 respect to fiscal year 2007, the amount shall be 

4 $2,800,000,000’’ after ‘‘thereafter’’. 

5 SEC. 352. REQUIREMENT TO SUBMIT ANNUAL REPORT ON 

6 STATE ACTIVITIES. 

7 (a) IN GENERAL.—Section 2006(c) of the Social Se8 curity Act (42 U.S.C. 1397e(c)) is amended by adding at 

9 the end the following: ‘‘The Secretary shall compile the 

10 information submitted by the States and submit that in11 formation to Congress on an annual basis.’’. 

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

13 subsection (a) applies to information submitted by States 

14 under section 2006 of the Social Security Act (42 U.S.C. 

15 1397e) with respect to fiscal year 2005 and each fiscal 

16 year thereafter. 

17 Subtitle E—Individual 

18 Development Accounts 

19 SEC. 361. SHORT TITLE. 

20 This subtitle may be cited as the ‘‘Savings for Work21 ing Families Act of 2005’’. 

22 SEC. 362. PURPOSES. 

23 The purposes of this subtitle are to provide for the 

24 establishment of individual development account programs 

25 that will— 
320 

•S 6 IS1S 

1 (1) provide individuals and families with limited 

2 means an opportunity to accumulate assets and to 

3 enter the financial mainstream, 

4 (2) promote education, homeownership, and the 

5 development of small businesses, 

6 (3) stabilize families and build communities, 

7 and 

8 (4) support continued United States economic 

9 expansion. 

10 SEC. 363. DEFINITIONS. 

11 As used in this subtitle: 

12 (1) ELIGIBLE INDIVIDUAL.— 

13 (A) IN GENERAL.—The term ‘‘eligible indi14 vidual’’ means, with respect to any taxable year, 

15 an individual who— 

16 (i) has attained the age of 18 but not 

17 the age of 61 as of the last day of such 

18 taxable year, 

19 (ii) is a citizen or lawful permanent 

20 resident (within the meaning of section 

21 7701(b)(6) of the Internal Revenue Code 

22 of 1986) of the United States as of the 

23 last day of such taxable year, 
321 

•S 6 IS1S 

1 (iii) was not a student (as defined in 

2 section 151(c)(4) of such Code) for the im3 mediately preceding taxable year, 

4 (iv) is not an individual with respect 

5 to whom a deduction under section 151 of 

6 such Code is allowable to another taxpayer 

7 for a taxable year of the other taxpayer 

8 ending during the immediately preceding 

9 taxable year of the individual, 

10 (v) is not a taxpayer described in sub11 section (c), (d), or (e) of section 6402 of 

12 such Code for the immediately preceding 

13 taxable year, 

14 (vi) is not a taxpayer described in sec15 tion 1(d) of such Code for the immediately 

16 preceding taxable year, and 

17 (vii) is a taxpayer the modified ad18 justed gross income of whom for the imme19 diately preceding taxable year does not ex20 ceed— 

21 (I) $18,000, in the case of a tax22 payer described in section 1(c) of such 

23 Code, 
322 

•S 6 IS1S 

1 (II) $30,000, in the case of a 

2 taxpayer described in section 1(b) of 

3 such Code, and 

4 (III) $38,000, in the case of a 

5 taxpayer described in section 1(a) of 

6 such Code. 

7 (B) INFLATION ADJUSTMENT.— 

8 (i) IN GENERAL.—In the case of any 

9 taxable year beginning after 2005, each 

10 dollar amount referred to in subparagraph 

11 (A)(vii) shall be increased by an amount 

12 equal to— 

13 (I) such dollar amount, multi14 plied by 

15 (II) the cost-of-living adjustment 

16 determined under section (1)(f)(3) of 

17 the Internal Revenue Code of 1986 

18 for the calendar year in which the tax19 able year begins, by substituting 

20 ‘‘2004’’ for ‘‘1992’’. 

21 (ii) ROUNDING.—If any amount as 

22 adjusted under clause (i) is not a multiple 

23 of $50, such amount shall be rounded to 

24 the nearest multiple of $50. 
323 

•S 6 IS1S 

1 (C) MODIFIED ADJUSTED GROSS IN2 COME.—For purposes of subparagraph (A)(v), 

3 the term ‘‘modified adjusted gross income’’ 

4 means adjusted gross income— 

5 (i) determined without regard to sec6 tions 86, 893, 911, 931, and 933 of the 

7 Internal Revenue Code of 1986, and 

8 (ii) increased by the amount of inter9 est received or accrued by the taxpayer 

10 during the taxable year which is exempt 

11 from tax. 

12 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.— 

13 The term ‘‘Individual Development Account’’ means 

14 an account established for an eligible individual as 

15 part of a qualified individual development account 

16 program, but only if the written governing instru17 ment creating the account meets the following re18 quirements: 

19 (A) The owner of the account is the indi20 vidual for whom the account was established. 

21 (B) No contribution will be accepted unless 

22 it is in cash, and, except in the case of any 

23 qualified rollover, contributions will not be ac24 cepted for the taxable year in excess of $1,500 

25 on behalf of any individual. 
324 

•S 6 IS1S 

1 (C) The trustee of the account is a quali2 fied financial institution. 

3 (D) The assets of the account will not be 

4 commingled with other property except in a 

5 common trust fund or common investment 

6 fund. 

7 (E) Except as provided in section 367(b), 

8 any amount in the account may be paid out 

9 only for the purpose of paying the qualified ex10 penses of the account owner. 

11 (3) PARALLEL ACCOUNT.—The term ‘‘parallel 

12 account’’ means a separate, parallel individual or 

13 pooled account for all matching funds and earnings 

14 dedicated to an Individual Development Account 

15 owner as part of a qualified individual development 

16 account program, the trustee of which is a qualified 

17 financial institution. 

18 (4) QUALIFIED FINANCIAL INSTITUTION.—The 

19 term ‘‘qualified financial institution’’ means any per20 son authorized to be a trustee of any individual re21 tirement account under section 408(a)(2) of the In22 ternal Revenue Code of 1986. 

23 (5) QUALIFIED INDIVIDUAL DEVELOPMENT AC24 COUNT PROGRAM.—The term ‘‘qualified individual 

25 development account program’’ means a program es-
325 

•S 6 IS1S 

1 tablished upon approval of the Secretary under sec2 tion 364 after December 31, 2004, under which— 

3 (A) Individual Development Accounts and 

4 parallel accounts are held in trust by a qualified 

5 financial institution, and 

6 (B) additional activities determined by the 

7 Secretary, in consultation with the Secretary of 

8 Health and Human Services, as necessary to re9 sponsibly develop and administer accounts, in10 cluding recruiting, providing financial education 

11 and other training to Account owners, and reg12 ular program monitoring, are carried out by the 

13 qualified financial institution. 

14 (6) QUALIFIED EXPENSE DISTRIBUTION.— 

15 (A) IN GENERAL.—The term ‘‘qualified ex16 pense distribution’’ means any amount paid (in17 cluding through electronic payments) or distrib18 uted out of an Individual Development Account 

19 or a parallel account established for an eligible 

20 individual if such amount— 

21 (i) is used exclusively to pay the quali22 fied expenses of the Individual Develop23 ment Account owner or such owner’s 

24 spouse or dependents, 
326 

•S 6 IS1S 

1 (ii) is paid by the qualified financial 

2 institution— 

3 (I) except as otherwise provided 

4 in this clause, directly to the unre5 lated third party to whom the amount 

6 is due, 

7 (II) in the case of any qualified 

8 rollover, directly to another Individual 

9 Development Account and parallel ac10 count, or 

11 (III) in the case of a qualified 

12 final distribution, directly to the 

13 spouse, dependent, or other named 

14 beneficiary of the deceased Account 

15 owner, and 

16 (iii) is paid after the Account owner 

17 has completed a financial education course 

18 if required under section 365(b). 

19 (B) QUALIFIED EXPENSES.— 

20 (i) IN GENERAL.—The term ‘‘qualified 

21 expenses’’ means any of the following ex22 penses approved by the qualified financial 

23 institution: 

24 (I) Qualified higher education ex25 penses. 
327 

•S 6 IS1S 

1 (II) Qualified first-time home2 buyer costs. 

3 (III) Qualified business capital4 ization or expansion costs. 

5 (IV) Qualified rollovers. 

6 (V) Qualified final distribution. 

7 (ii) QUALIFIED HIGHER EDUCATION

8 EXPENSES.— 

9 (I) IN GENERAL.—The term 

10 ‘‘qualified higher education expenses’’ 

11 has the meaning given such term by 

12 section 529(e)(3) of the Internal Rev13 enue Code of 1986, determined by 

14 treating the Account owner, the own15 er’s spouse, or one or more of the 

16 owner’s dependents as a designated 

17 beneficiary, and reduced as provided 

18 in section 25A(g)(2) of such Code. 

19 (II) COORDINATION WITH OTHER

20 BENEFITS.—The amount of expenses 

21 which may be taken into account for 

22 purposes of section 135, 529, or 530 

23 of such Code for any taxable year 

24 shall be reduced by the amount of any 

25 qualified higher education expenses 
328 

•S 6 IS1S 

1 taken into account as qualified ex2 pense distributions during such tax3 able year. 

4 (iii) QUALIFIED FIRST-TIME HOME5 BUYER COSTS.—The term ‘‘qualified first6 time homebuyer costs’’ means qualified ac7 quisition costs (as defined in section 

8 72(t)(8)(C) of the Internal Revenue Code 

9 of 1986) with respect to a principal resi10 dence (within the meaning of section 121 

11 of such Code) for a qualified first-time 

12 homebuyer (as defined in section 

13 72(t)(8)(D)(i) of such Code). 

14 (iv) QUALIFIED BUSINESS CAPITAL15 IZATION OR EXPANSION COSTS.— 

16 (I) IN GENERAL.—The term 

17 ‘‘qualified business capitalization or 

18 expansion costs’’ means qualified ex19 penditures for the capitalization or ex20 pansion of a qualified business pursu21 ant to a qualified business plan. 

22 (II) QUALIFIED EXPENDI23 TURES.—The term ‘‘qualified expendi24 tures’’ means expenditures normally 

25 associated with starting or expanding 
329 

•S 6 IS1S 

1 a business and included in a qualified 

2 business plan, including costs for cap3 ital, plant, and equipment, inventory 

4 expenses, and attorney and accounting 

5 fees. 

6 (III) QUALIFIED BUSINESS.— 

7 The term ‘‘qualified business’’ means 

8 any business that does not contravene 

9 any law. 

10 (IV) QUALIFIED BUSINESS

11 PLAN.—The term ‘‘qualified business 

12 plan’’ means a business plan which 

13 has been approved by the qualified fi14 nancial institution and which meets 

15 such requirements as the Secretary 

16 may specify. 

17 (v) QUALIFIED ROLLOVERS.—The 

18 term ‘‘qualified rollover’’ means the com19 plete distribution of the amounts in an In20 dividual Development Account and parallel 

21 account to another Individual Development 

22 Account and parallel account established in 

23 another qualified financial institution for 

24 the benefit of the Account owner. 
330 

•S 6 IS1S 

1 (vi) QUALIFIED FINAL DISTRIBU2 TION.—The term ‘‘qualified final distribu3 tion’’ means, in the case of a deceased Ac4 count owner, the complete distribution of 

5 the amounts in the Individual Development 

6 Account and parallel account directly to 

7 the spouse, any dependent, or other named 

8 beneficiary of the deceased. 

9 (7) SECRETARY.—The term ‘‘Secretary’’ means 

10 the Secretary of the Treasury. 

11 SEC. 364. STRUCTURE AND ADMINISTRATION OF QUALI12 FIED INDIVIDUAL DEVELOPMENT ACCOUNT 

13 PROGRAMS. 

14 (a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE15 VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan16 cial institution may apply to the Secretary for approval 

17 to establish 1 or more qualified individual development ac18 count programs which meet the requirements of this sub19 title and for an allocation of the Individual Development 

20 Account limitation under section 45G(i)(3) of the Internal 

21 Revenue Code of 1986 with respect to such programs. 

22 (b) BASIC PROGRAM STRUCTURE.— 

23 (1) IN GENERAL.—All qualified individual de24 velopment account programs shall consist of the fol25 lowing 2 components for each participant: 
331 

•S 6 IS1S 

1 (A) An Individual Development Account to 

2 which an eligible individual may contribute cash 

3 in accordance with section 365. 

4 (B) A parallel account to which all match5 ing funds shall be deposited in accordance with 

6 section 366. 

7 (2) TAILORED IDA PROGRAMS.—A qualified fi8 nancial institution may tailor its qualified individual 

9 development account program to allow matching 

10 funds to be spent on 1 or more of the categories of 

11 qualified expenses. 

12 (3) NO FEES MAY BE CHARGED TO IDAS.—A 

13 qualified financial institution may not charge any 

14 fees to any Individual Development Account or par15 allel account under a qualified individual develop16 ment account program. 

17 (c) COORDINATION WITH PUBLIC HOUSING AGENCY

18 INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the 

19 United States Housing Act of 1937 (42 U.S.C. 

20 1437a(e)(2)) is amended by inserting ‘‘or in any Indi21 vidual Development Account established under the Sav22 ings for Working Families Act of 2005’’ after ‘‘sub23 section’’. 

24 (d) TAX TREATMENT OF PARALLEL ACCOUNTS.— 
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•S 6 IS1S 

1 (1) IN GENERAL.—Chapter 77 (relating to mis2 cellaneous provisions) is amended by adding at the 

3 end the following new section: 

4 ‘‘SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOP5 MENT PARALLEL ACCOUNTS. 

6 ‘‘For purposes of this title— 

7 ‘‘(1) any account described in section 

8 364(b)(1)(B) of the Savings for Working Families 

9 Act of 2005 shall be exempt from taxation, 

10 ‘‘(2) except as provided in section 45G, no item 

11 of income, expense, basis, gain, or loss with respect 

12 to such an account may be taken into account, and 

13 ‘‘(3) any amount withdrawn from such an ac14 count shall not be includible in gross income.’’. 

15 (2) CONFORMING AMENDMENT.—The table of 

16 sections for chapter 77 is amended by adding at the 

17 end the following new item: 

‘‘Sec. 7529. Tax incentives for individual development parallel accounts.’’. 

18 (e) COORDINATION OF CERTAIN EXPENSES.—Section 

19 25A(g)(2) is amended by striking ‘‘and’’ at the end of sub20 paragraph (C), by striking the period at the end of sub21 paragraph (D) and inserting ‘‘, and’’, and by adding at 

22 the end the following new subparagraph: 

23 ‘‘(D) a qualified expense distribution with 

24 respect to qualified higher education expenses 
333 

•S 6 IS1S 

1 from an Individual Development Account or a 

2 parallel account under section 367(a) of the 

3 Savings for Working Families Act of 2005.’’. 

4 SEC. 365. PROCEDURES FOR OPENING AND MAINTAINING 

5 AN INDIVIDUAL DEVELOPMENT ACCOUNT 

6 AND QUALIFYING FOR MATCHING FUNDS. 

7 (a) OPENING AN ACCOUNT.—An eligible individual 

8 may open an Individual Development Account with a 

9 qualified financial institution upon certification that such 

10 individual has never maintained any other Individual De11 velopment Account (other than an Individual Development 

12 Account to be terminated by a qualified rollover). 

13 (b) REQUIRED COMPLETION OF FINANCIAL EDU14 CATION COURSE.— 

15 (1) IN GENERAL.—Before becoming eligible to 

16 withdraw funds to pay for qualified expenses, owners 

17 of Individual Development Accounts must complete 

18 1 or more financial education courses specified in 

19 the qualified individual development account pro20 gram. 

21 (2) STANDARD AND APPLICABILITY OF

22 COURSE.—The Secretary, in consultation with rep23 resentatives of qualified individual development ac24 count programs and financial educators, shall not 

25 later than January 1, 2006, establish minimum 
334 

•S 6 IS1S 

1 quality standards for the contents of financial edu2 cation courses and providers of such courses de3 scribed in paragraph (1) and a protocol to exempt 

4 individuals from the requirement under paragraph 

5 (1) in the case of hardship, lack of need, the attain6 ment of age 65, or a qualified final distribution. 

7 (c) PROOF OF STATUS AS AN ELIGIBLE INDI8 VIDUAL.—Federal income tax forms for the immediately 

9 preceding taxable year and any other evidence of eligibility 

10 which may be required by a qualified financial institution 

11 shall be presented to such institution at the time of the 

12 establishment of the Individual Development Account and 

13 in any taxable year in which contributions are made to 

14 the Account to qualify for matching funds under section 

15 366(b)(1)(A). 

16 (d) SPECIAL RULE IN THE CASE OF MARRIED INDI17 VIDUALS.—For purposes of this subtitle, if, with respect 

18 to any taxable year, 2 married individuals file a Federal 

19 joint income tax return, then not more than 1 of such indi20 viduals may be treated as an eligible individual with re21 spect to the succeeding taxable year. 

22 SEC. 366. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP23 MENT ACCOUNT PROGRAMS. 

24 (a) PARALLEL ACCOUNTS.—The qualified financial 

25 institution shall deposit all matching funds for each Indi-
335 

•S 6 IS1S 

1 vidual Development Account into a parallel account at a 

2 qualified financial institution. 

3 (b) REGULAR DEPOSITS OF MATCHING FUNDS.— 

4 (1) IN GENERAL.—Subject to paragraph (2), 

5 the qualified financial institution shall deposit into 

6 the parallel account with respect to each eligible in7 dividual the following amounts: 

8 (A) A dollar-for-dollar match for the first 

9 $500 contributed by the eligible individual into 

10 an Individual Development Account with re11 spect to any taxable year of such individual. 

12 (B) Any matching funds provided by State, 

13 local, or private sources in accordance with the 

14 matching ratio set by those sources. 

15 (2) TIMING OF DEPOSITS.—A deposit of the 

16 amounts described in paragraph (1) shall be made 

17 into a parallel account— 

18 (A) in the case of amounts described in 

19 paragraph (1)(A), not later than 30 days after 

20 the end of the calendar quarter during which 

21 the contribution described in such paragraph 

22 was made, and 

23 (B) in the case of amounts described in 

24 paragraph (1)(B), not later than 2 business 

25 days after such amounts were provided. 
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•S 6 IS1S 

1 (3) CROSS REFERENCE.— 

For allowance of tax credit for Individual Development Account subsidies, including matching 

funds, see section 45J of the Internal Revenue Code 

of 1986. 

2 (c) DEPOSIT OF MATCHING FUNDS INTO INDI3 VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO

4 HAS ATTAINED AGE 65.—In the case of an Individual De5 velopment Account owner who attains the age of 65, the 

6 qualified financial institution shall deposit the funds in the 

7 parallel account with respect to such individual into the 

8 Individual Development Account of such individual on the 

9 later of— 

10 (1) the day which is the 1-year anniversary of 

11 the deposit of such funds in the parallel account, or 

12 (2) the first business day of the taxable year of 

13 such individual following the taxable year in which 

14 such individual attained age 65. 

15 (d) UNIFORM ACCOUNTING REGULATIONS.—To en16 sure proper recordkeeping and determination of the tax 

17 credit under section 45J of the Internal Revenue Code of 

18 1986, the Secretary shall prescribe regulations with re19 spect to accounting for matching funds in the parallel ac20 counts. 

21 (e) REGULAR REPORTING OF ACCOUNTS.—Any 

22 qualified financial institution shall report the balances in 

23 any Individual Development Account and parallel account 
337 

•S 6 IS1S 

1 of an individual on not less than an annual basis to such 

2 individual. 

3 SEC. 367. WITHDRAWAL PROCEDURES. 

4 (a) WITHDRAWALS FOR QUALIFIED EXPENSES.— 

5 (1) IN GENERAL.—An Individual Development 

6 Account owner may withdraw funds in order to pay 

7 qualified expense distributions from such individ8 ual’s— 

9 (A) Individual Development Account, but 

10 only from funds which have been on deposit in 

11 such Account for at least 1 year, and 

12 (B) parallel account, but only— 

13 (i) from matching funds which have 

14 been on deposit in such parallel account 

15 for at least 1 year, 

16 (ii) from earnings in such parallel ac17 count, after all matching funds described 

18 in clause (i) have been withdrawn, and 

19 (iii) to the extent such withdrawal 

20 does not result in a remaining balance in 

21 such parallel account which is less than the 

22 remaining balance in the Individual Devel23 opment Account after such withdrawal. 

24 (2) PROCEDURE.—Upon receipt of a with25 drawal request which meets the requirements of 
338 

•S 6 IS1S 

1 paragraph (1), the qualified financial institution 

2 shall directly transfer the funds electronically to the 

3 distributees described in section 363(6)(A)(ii). If a 

4 distributee is not equipped to receive funds electroni5 cally, the qualified financial institution may issue 

6 such funds by paper check to the distributee. 

7 (b) WITHDRAWALS FOR NONQUALIFIED EX8 PENSES.—An Individual Development Account owner may 

9 withdraw any amount of funds from the Individual Devel10 opment Account for purposes other than to pay qualified 

11 expense distributions, but if, after such withdrawal, the 

12 amount in the parallel account of such owner (excluding 

13 earnings on matching funds) exceeds the amount remain14 ing in such Individual Development Account, then such 

15 owner shall forfeit from the parallel account the lesser of 

16 such excess or the amount withdrawn. 

17 (c) WITHDRAWALS FROM ACCOUNTS OF NON18 ELIGIBLE INDIVIDUALS.—If the individual for whose ben19 efit an Individual Development Account is established 

20 ceases to be an eligible individual, such account shall re21 main an Individual Development Account, but such indi22 vidual shall not be eligible for any further matching funds 

23 under section 366(b)(1)(A) for contributions which are 

24 made to the Account during any taxable year when such 

25 individual is not an eligible individual. 
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•S 6 IS1S 

1 (d) EFFECT OF PLEDGING ACCOUNT AS SECU2 RITY.—If, during any taxable year of the individual for 

3 whose benefit an Individual Development Account is es4 tablished, that individual uses the Account, the individ5 ual’s parallel account, or any portion thereof as security 

6 for a loan, the portion so used shall be treated as a with7 drawal of such portion from the Individual Development 

8 Account for purposes other than to pay qualified expenses. 

9 SEC. 368. CERTIFICATION AND TERMINATION OF QUALI10 FIED INDIVIDUAL DEVELOPMENT ACCOUNT 

11 PROGRAMS. 

12 (a) CERTIFICATION PROCEDURES.—Upon estab13 lishing a qualified individual development account pro14 gram under section 364, a qualified financial institution 

15 shall certify to the Secretary at such time and in such 

16 manner as may be prescribed by the Secretary and accom17 panied by any documentation required by the Secretary, 

18 that— 

19 (1) the accounts described in subparagraphs 

20 (A) and (B) of section 364(b)(1) are operating pur21 suant to all the provisions of this subtitle, and 

22 (2) the qualified financial institution agrees to 

23 implement an information system necessary to mon24 itor the cost and outcomes of the qualified individual 

25 development account program. 
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•S 6 IS1S 

1 (b) AUTHORITY TO TERMINATE QUALIFIED IDA 

2 PROGRAM.—If the Secretary determines that a qualified 

3 financial institution under this subtitle is not operating 

4 a qualified individual development account program in ac5 cordance with the requirements of this subtitle (and has 

6 not implemented any corrective recommendations directed 

7 by the Secretary), the Secretary shall terminate such insti8 tution’s authority to conduct the program. If the Secretary 

9 is unable to identify a qualified financial institution to as10 sume the authority to conduct such program, then any 

11 funds in a parallel account established for the benefit of 

12 any individual under such program shall be deposited into 

13 the Individual Development Account of such individual as 

14 of the first day of such termination. 

15 SEC. 369. REPORTING, MONITORING, AND EVALUATION. 

16 (a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN17 STITUTIONS.— 

18 (1) IN GENERAL.—Each qualified financial in19 stitution that operates a qualified individual develop20 ment account program under section 364 shall re21 port annually to the Secretary within 90 days after 

22 the end of each calendar year on— 

23 (A) the number of individuals making con24 tributions into Individual Development Ac25 counts and the amounts contributed, 
341 

•S 6 IS1S 

1 (B) the amounts contributed into Indi2 vidual Development Accounts by eligible individ3 uals and the amounts deposited into parallel ac4 counts for matching funds, 

5 (C) the amounts withdrawn from Indi6 vidual Development Accounts and parallel ac7 counts, and the purposes for which such 

8 amounts were withdrawn, 

9 (D) the balances remaining in Individual 

10 Development Accounts and parallel accounts, 

11 and 

12 (E) such other information needed to help 

13 the Secretary monitor the effectiveness of the 

14 qualified individual development account pro15 gram (provided in a non-individually-identifiable 

16 manner). 

17 (2) ADDITIONAL REPORTING REQUIREMENTS.— 

18 Each qualified financial institution that operates a 

19 qualified individual development account program 

20 under section 364 shall report at such time and in 

21 such manner as the Secretary may prescribe any ad22 ditional information that the Secretary requires to 

23 be provided for purposes of administering and super24 vising the qualified individual development account 

25 program. This additional data may include, without 
342 

•S 6 IS1S 

1 limitation, identifying information about Individual 

2 Development Account owners, their Accounts, addi3 tions to the Accounts, and withdrawals from the Ac4 counts. 

5 (b) RESPONSIBILITIES OF THE SECRETARY.— 

6 (1) MONITORING PROTOCOL.—Not later than 

7 12 months after the date of the enactment of this 

8 Act, the Secretary, in consultation with the Sec9 retary of Health and Human Services, shall develop 

10 and implement a protocol and process to monitor the 

11 cost and outcomes of the qualified individual devel12 opment account programs established under section 

13 364. 

14 (2) ANNUAL REPORTS.—For each year after 

15 2005, the Secretary shall submit a progress report 

16 to Congress on the status of such qualified indi17 vidual development account programs. Such report 

18 shall, to the extent data are available, include from 

19 a representative sample of qualified individual devel20 opment account programs information on— 

21 (A) the characteristics of participants, in22 cluding age, gender, race or ethnicity, marital 

23 status, number of children, employment status, 

24 and monthly income, 
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•S 6 IS1S 

1 (B) deposits, withdrawals, balances, uses 

2 of Individual Development Accounts, and par3 ticipant characteristics, 

4 (C) the characteristics of qualified indi5 vidual development account programs, including 

6 match rate, economic education requirements, 

7 permissible uses of accounts, staffing of pro8 grams in full time employees, and the total 

9 costs of programs, and 

10 (D) process information on program imple11 mentation and administration, especially on 

12 problems encountered and how problems were 

13 solved. 

14 (3) REAUTHORIZATION REPORT ON COST AND

15 OUTCOMES OF IDAS.— 

16 (A) IN GENERAL.—Not later than July 1, 

17 2008, the Secretary of the Treasury shall sub18 mit a report to Congress and the chairmen and 

19 ranking members of the Committee on Finance, 

20 the Committee on Banking, Housing, and 

21 Urban Affairs, and the Committee on Health, 

22 Education, Labor, and Pensions of the Senate 

23 and the Committee on Ways and Means, the 

24 Committee on Banking and Financial Services, 

25 and the Committee on Education and the 
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•S 6 IS1S 

1 Workforce of the House of Representatives, in 

2 which the Secretary shall— 

3 (i) summarize the previously sub4 mitted annual reports required under para5 graph (2), 

6 (ii) from a representative sample of 

7 qualified individual development account 

8 programs, include an analysis of— 

9 (I) the economic, social, and be10 havioral outcomes, 

11 (II) the changes in savings rates, 

12 asset holdings, and household debt, 

13 and overall changes in economic sta14 bility, 

15 (III) the changes in outlooks, at16 titudes, and behavior regarding sav17 ings strategies, investment, education, 

18 and family, 

19 (IV) the integration into the fi20 nancial mainstream, including de21 creased reliance on alternative finan22 cial services, and increase in acquisi23 tion of mainstream financial products, 

24 and 
345 

•S 6 IS1S 

1 (V) the involvement in civic af2 fairs, including neighborhood schools 

3 and associations, 

4 associated with participation in qualified 

5 individual development account programs, 

6 (iii) from a representative sample of 

7 qualified individual development account 

8 programs, include a comparison of out9 comes associated with such programs with 

10 outcomes associated with other Federal 

11 Government social and economic develop12 ment programs, including asset building 

13 programs, and 

14 (iv) make recommendations regarding 

15 the reauthorization of the qualified indi16 vidual development account programs, in17 cluding— 

18 (I) recommendations regarding 

19 reforms that will improve the cost and 

20 outcomes of the such programs, in21 cluding the ability to help low income 

22 families save and accumulate produc23 tive assets, 

24 (II) recommendations regarding 

25 the appropriate levels of subsidies to 
346 

•S 6 IS1S 

1 provide effective incentives to financial 

2 institutions and Account owners under 

3 such programs, and 

4 (III) recommendations regarding 

5 how such programs should be inte6 grated into other Federal poverty re7 duction, asset building, and commu8 nity development policies and pro9 grams. 

10 (B) AUTHORIZATION.—There is authorized 

11 to be appropriated $2,500,000, for carrying out 

12 the purposes of this paragraph. 

13 (4) USE OF ACCOUNTS IN RURAL AREAS EN14 COURAGED.—The Secretary shall develop methods to 

15 encourage the use of Individual Development Ac16 counts in rural areas. 

17 SEC. 370. AUTHORIZATION OF APPROPRIATIONS. 

18 There is authorized to be appropriated to the Sec19 retary $1,000,000 for fiscal year 2005 and for each fiscal 

20 year through 2013, for the purposes of implementing this 

21 subtitle, including the reporting, monitoring, and evalua22 tion required under section 369, to remain available until 

23 expended. 
347 

•S 6 IS1S 

1 SEC. 371. MATCHING FUNDS FOR INDIVIDUAL DEVELOP2 MENT ACCOUNTS PROVIDED THROUGH A TAX 

3 CREDIT FOR QUALIFIED FINANCIAL INSTITU4 TIONS. 

5 (a) IN GENERAL.—Subpart D of part IV of sub6 chapter A of chapter 1 (relating to business related cred7 its) is amended by adding at the end the following new 

8 section: 

9 ‘‘SEC. 45J. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST10 MENT CREDIT. 

11 ‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 

12 section 38, the individual development account investment 

13 credit determined under this section with respect to any 

14 eligible entity for any taxable year is an amount equal to 

15 the individual development account investment provided 

16 by such eligible entity during the taxable year under an 

17 individual development account program established under 

18 section 364 of the Savings for Working Families Act of 

19 2005. 

20 ‘‘(b) APPLICABLE TAX.—For the purposes of this 

21 section, the term ‘applicable tax’ means the excess (if any) 

22 of— 

23 ‘‘(1) the tax imposed under this chapter (other 

24 than the taxes imposed under the provisions de25 scribed in subparagraphs (C) through (Q) of section 

26 26(b)(2)), over 
348 

•S 6 IS1S 

1 ‘‘(2) the credits allowable under subpart B 

2 (other than this section) and subpart D of this part. 

3 ‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT INVEST4 MENT.—For purposes of this section, the term ‘individual 

5 development account investment’ means, with respect to 

6 an individual development account program in any taxable 

7 year, an amount equal to the sum of— 

8 ‘‘(1) the aggregate amount of dollar-for-dollar 

9 matches under such program under section 

10 366(b)(1)(A) of the Savings for Working Families 

11 Act of 2005 for such taxable year, plus 

12 ‘‘(2) $50 with respect to each Individual Devel13 opment Account maintained— 

14 ‘‘(A) as of the end of such taxable year, 

15 but only if such taxable year is within the 7- 

16 taxable-year period beginning with the taxable 

17 year in which such Account is opened, and 

18 ‘‘(B) with a balance of not less than $100 

19 (other than the taxable year in which such Ac20 count is opened). 

21 ‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec22 tion, except as provided in regulations, the term ‘eligible 

23 entity’ means a qualified financial institution. 

24 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

25 section, any term used in this section and also in the Sav-
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•S 6 IS1S 

1 ings for Working Families Act of 2005 shall have the 

2 meaning given such term by such Act. 

3 ‘‘(f) DENIAL OF DOUBLE BENEFIT.— 

4 ‘‘(1) IN GENERAL.—No deduction or credit 

5 (other than under this section) shall be allowed 

6 under this chapter with respect to any expense 

7 which— 

8 ‘‘(A) is taken into account under sub9 section (c)(1)(A) in determining the credit 

10 under this section, or 

11 ‘‘(B) is attributable to the maintenance of 

12 an Individual Development Account. 

13 ‘‘(2) DETERMINATION OF AMOUNT.—Solely for 

14 purposes of paragraph (1)(B), the amount attrib15 utable to the maintenance of an Individual Develop16 ment Account shall be deemed to be the dollar 

17 amount of the credit allowed under subsection 

18 (c)(l)(B) for each taxable year such Individual De19 velopment Account is maintained. 

20 ‘‘(g) CREDIT MAY BE TRANSFERRED.— 

21 ‘‘(1) IN GENERAL.—An eligible entity may 

22 transfer any credit allowable to the eligible entity 

23 under subsection (a) to any person other than to an24 other eligible entity which is exempt from tax under 

25 this title. The determination as to whether a credit 
350 

•S 6 IS1S 

1 is allowable shall be made without regard to the tax2 exempt status of the eligible entity. 

3 ‘‘(2) CONSENT REQUIRED FOR REVOCATION.— 

4 Any transfer under paragraph (1) may be revoked 

5 only with the consent of the Secretary. 

6 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

7 such regulations as may be necessary or appropriate to 

8 carry out this section, including 

9 ‘‘(1) such regulations as necessary to insure 

10 that any credit described in subsection (g)(1) is 

11 claimed once and not retransferred by a transferee, 

12 and 

13 ‘‘(2) regulations providing for a recapture of 

14 the credit allowed under this section (notwith15 standing any termination date described in sub16 section (i)) in cases where there is a forfeiture under 

17 section 367(b) of the Savings for Working Families 

18 Act of 2005 in a subsequent taxable year of any 

19 amount which was taken into account in determining 

20 the amount of such credit. 

21 ‘‘(i) APPLICATION OF SECTION.— 

22 ‘‘(1) IN GENERAL.—This section shall apply to 

23 any expenditure made in any taxable year ending 

24 after December 31, 2005, and beginning on or be-
351 

•S 6 IS1S 

1 fore January 1, 2013, with respect to any Individual 

2 Development Account which— 

3 ‘‘(A) is opened before January 1, 2013, 

4 and 

5 ‘‘(B) as determined by the Secretary, when 

6 added to all of the previously opened Individual 

7 Development Accounts, does not exceed— 

8 ‘‘(i) 100,000 Accounts if opened after 

9 December 31, 2005, and before January 1, 

10 2007, 

11 ‘‘(ii) an additional 100,000 Accounts 

12 if opened after December 31, 2006, and 

13 before January 1, 2009, but only if, except 

14 as provided in paragraph (4), the total 

15 number of Accounts described in clause (i) 

16 are opened and the Secretary determines 

17 that such Accounts are being reasonably 

18 and responsibly administered, and 

19 ‘‘(iii) an additional 100,000 Accounts 

20 if opened after December 31, 2008, and 

21 before January 1, 2013, but only if the 

22 total number of Accounts described in 

23 clauses (i) and (ii) are opened and the Sec24 retary makes a determination described in 

25 paragraph (2). 
352 

•S 6 IS1S 

1 Notwithstanding the preceding sentence, this section 

2 shall apply to amounts which are described in sub3 section (c)(1)(A) and which are timely deposited into 

4 a parallel account during the 30-day period following 

5 the end of last taxable year beginning before Janu6 ary 1, 2013. 

7 ‘‘(2) DETERMINATION WITH RESPECT TO

8 THIRD GROUP OF ACCOUNTS.—A determination is 

9 described in this paragraph if the Secretary deter10 mines that— 

11 ‘‘(A) substantially all of the previously 

12 opened Accounts have been reasonably and re13 sponsibly administered prior to the date of the 

14 determination, 

15 ‘‘(B) the individual development account 

16 programs have increased net savings of partici17 pants in the programs, 

18 ‘‘(C) participants in the individual develop19 ment account programs have increased Federal 

20 income tax liability and decreased utilization of 

21 Federal assistance programs relative to simi22 larly situated individuals that did not partici23 pate in the individual development account pro24 grams, and 
353 

•S 6 IS1S 

1 ‘‘(D) the sum of the estimated increased 

2 Federal tax liability and reduction of Federal 

3 assistance program benefits to participants in 

4 the individual development account programs is 

5 greater than the cost of the individual develop6 ment account programs to the Federal govern7 ment. 

8 ‘‘(3) DETERMINATION OF LIMITATION.—The 

9 limitation on the number of Individual Development 

10 Accounts under paragraph (1)(B) shall be allocated 

11 by the Secretary among qualified individual develop12 ment account programs selected by the Secretary 

13 and, in the case of the limitation under clause (iii) 

14 of such paragraph, shall be equally divided among 

15 the States. 

16 ‘‘(4) SPECIAL RULE IF SMALLER NUMBER OF

17 ACCOUNTS ARE OPENED.—For purposes of para18 graph (1)(B)(ii)— 

19 ‘‘(i) IN GENERAL.—If less than 

20 100,000 Accounts are opened before Janu21 ary 1, 2007, such paragraph shall be ap22 plied by substituting ‘‘applicable number of 

23 Accounts’ for ‘100,000 Accounts’. 
354 

•S 6 IS1S 

1 ‘‘(ii) APPLICABLE NUMBER.—For pur2 poses of clause (i), the applicable number 

3 equals the lesser of— 

4 ‘‘(I) 75,000, or 

5 ‘‘(II) 3 times the number of Ac6 counts opened before January 1, 

7 2007.’’. 

8 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec9 tion 38(b) (relating to current year business credit) is 

10 amended by striking ‘‘plus’’ at the end of paragraph (18), 

11 by striking the period at the end of paragraph (19) and 

12 inserting ‘‘, plus’’, and by adding at the end the following 

13 new paragraph: 

14 ‘‘(20) the individual development account in15 vestment credit determined under section 45J(a).’’. 

16 (c) CONFORMING AMENDMENT.—The table of sec17 tions for subpart C of part IV of subchapter A of chapter 

18 1 is amended by adding at the end the following new item: 

‘‘Sec. 45J. Individual development account investment credit.’’. 

19 (d) REPORT REGARDING ACCOUNT MAINTENANCE

20 FEES.—The Secretary of the Treasury shall study the 

21 adequacy of the amount specified in section 45J(c)(2) of 

22 the Internal Revenue Code of 1986 (as added by this sec23 tion). Not later than December 31, 2009, the Secretary 

24 of the Treasury shall report the findings of the study de25 scribed in the preceding sentence to Congress. 
355 

•S 6 IS1S 

1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years ending after De3 cember 31, 2004. 

4 SEC. 372. ACCOUNT FUNDS DISREGARDED FOR PURPOSES 

5 OF CERTAIN MEANS-TESTED FEDERAL PRO6 GRAMS. 

7 Notwithstanding any other provision of Federal law 

8 (other than the Internal Revenue Code of 1986) that re9 quires consideration of 1 or more financial circumstances 

10 of an individual, for the purpose of determining eligibility 

11 to receive, or the amount of, any assistance or benefit au12 thorized by such provision to be provided to or for the 

13 benefit of such individual, any amount (including earnings 

14 thereon) in any Individual Development Account of such 

15 individual and any matching deposit made on behalf of 

16 such individual (including earnings thereon) in any par17 allel account shall be disregarded for such purpose with 

18 respect to any period during which such individual main19 tains or makes contributions into such Individual Develop20 ment Account. 

21 Subtitle F—Management of Exempt 

22 Organizations 

23 SEC. 381. AUTHORIZATION OF APPROPRIATIONS. 

24 (a) IN GENERAL.—There is authorized to be appro25 priated to the Secretary of the Treasury $80,000,000 for 
356 

•S 6 IS1S 

1 each fiscal year to carry out the administration of exempt 

2 organizations by the Internal Revenue Service. 

3 (b) IMPLEMENTATION OF SECTION 527.—There is 

4 authorized to be appropriated to the Secretary of the 

5 Treasury $3,000,000 to carry out the provisions of Public 

6 Laws 106–230 and 107–276 relating to section 527 of the 

7 Internal Revenue Code of 1986. 

8 Subtitle G—Compassion Capital 

9 Fund 

10 SEC. 391. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

11 ORGANIZATIONS; DEPARTMENT OF HEALTH 

12 AND HUMAN SERVICES. 

13 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA14 TIONS.—The Secretary of Health and Human Services 

15 (referred to in this section as ‘‘the Secretary’’) may award 

16 grants to and enter into cooperative agreements with non17 governmental organizations, to— 

18 (1) provide technical assistance for community19 based organizations, which may include— 

20 (A) grant writing and grant management 

21 assistance, which may include assistance pro22 vided through workshops and other guidance; 

23 (B) legal assistance with incorporation; 

24 (C) legal assistance to obtain tax-exempt 

25 status; and 
357 

•S 6 IS1S 

1 (D) information on, and referrals to, other 

2 nongovernmental organizations that provide ex3 pertise in accounting, on legal issues, on tax 

4 issues, in program development, and on a vari5 ety of other organizational topics; 

6 (2) provide information and assistance for com7 munity-based organizations on capacity building; 

8 (3) provide for community-based organizations 

9 information on and assistance in identifying and 

10 using best practices for delivering assistance to per11 sons, families, and communities in need; 

12 (4) provide information on and assistance in 

13 utilizing regional intermediary organizations to in14 crease and strengthen the capabilities of nonprofit 

15 community-based organizations; 

16 (5) assist community-based organizations in 

17 replicating social service programs of demonstrated 

18 effectiveness; and 

19 (6) encourage research on the best practices of 

20 social service organizations. 

21 (b) SUPPORT FOR STATES.—The Secretary— 

22 (1) may award grants to and enter into cooper23 ative agreements with States and political subdivi24 sions of States to provide seed money to establish 
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1 State and local offices of faith-based and community 

2 initiatives; and 

3 (2) shall provide technical assistance to States 

4 and political subdivisions of States in administering 

5 the provisions of this Act. 

6 (c) APPLICATIONS.—To be eligible to receive a grant 

7 or enter into a cooperative agreement under this section, 

8 a nongovernmental organization, State, or political sub9 division shall submit an application to the Secretary at 

10 such time, in such manner, and containing such informa11 tion as the Secretary may require. 

12 (d) LIMITATION.—In order to widely disburse limited 

13 resources, no community-based organization (other than 

14 a direct recipient of a grant or cooperative agreement from 

15 the Secretary) may receive more than 1 grant or coopera16 tive agreement under this section for the same purpose. 

17 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 $85,000,000 for fiscal year 2006, and such sums as may 

20 be necessary for each of fiscal years 2007 through 2009. 

21 (f) DEFINITION.—In this section, the term ‘‘commu22 nity-based organization’’ means a nonprofit corporation or 

23 association that has— 
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1 (1) not more than 6 full-time equivalent em2 ployees who are engaged in the provision of social 

3 services; or 

4 (2) a current annual budget (current as of the 

5 date the entity seeks assistance under this section) 

6 for the provision of social services, compiled and 

7 adopted in good faith, of less than $450,000. 

8 SEC. 392. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

9 ORGANIZATIONS; CORPORATION FOR NA10 TIONAL AND COMMUNITY SERVICE. 

11 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA12 TIONS.—The Corporation for National and Community 

13 Service (referred to in this section as ‘‘the Corporation’’) 

14 may award grants to and enter into cooperative agree15 ments with nongovernmental organizations and State 

16 Commissions on National and Community Service estab17 lished under section 178 of the National and Community 

18 Service Act of 1990 (42 U.S.C. 12638), to— 

19 (1) provide technical assistance for community20 based organizations, which may include— 

21 (A) grant writing and grant management 

22 assistance, which may include assistance pro23 vided through workshops and other guidance; 

24 (B) legal assistance with incorporation; 
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1 (C) legal assistance to obtain tax-exempt 

2 status; and 

3 (D) information on, and referrals to, other 

4 nongovernmental organizations that provide ex5 pertise in accounting, on legal issues, on tax 

6 issues, in program development, and on a vari7 ety of other organizational topics; 

8 (2) provide information and assistance for com9 munity-based organizations on capacity building; 

10 (3) provide for community-based organizations 

11 information on and assistance in identifying and 

12 using best practices for delivering assistance to per13 sons, families, and communities in need; 

14 (4) provide information on and assistance in 

15 utilizing regional intermediary organizations to in16 crease and strengthen the capabilities of community17 based organizations; 

18 (5) assist community-based organizations in 

19 replicating social service programs of demonstrated 

20 effectiveness; and 

21 (6) encourage research on the best practices of 

22 social service organizations. 

23 (b) APPLICATIONS.—To be eligible to receive a grant 

24 or enter into a cooperative agreement under this section, 

25 a nongovernmental organization, State Commission, 
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1 State, or political subdivision shall submit an application 

2 to the Corporation at such time, in such manner, and con3 taining such information as the Corporation may require. 

4 (c) LIMITATION.—In order to widely disburse limited 

5 resources, no community-based organization (other than 

6 a direct recipient of a grant or cooperative agreement from 

7 the Secretary) may receive more than 1 grant or coopera8 tive agreement under this section for the same purpose. 

9 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this section 

11 $15,000,000 for fiscal year 2006, and such sums as may 

12 be necessary for each of fiscal years 2007 through 2009. 

13 (e) DEFINITION.—In this section, the term ‘‘commu14 nity-based organization’’ means a nonprofit corporation or 

15 association that has— 

16 (1) not more than 6 full-time equivalent em17 ployees who are engaged in the provision of social 

18 services; or 

19 (2) a current annual budget (current as of the 

20 date the entity seeks assistance under this section) 

21 for the provision of social services, compiled and 

22 adopted in good faith, of less than $450,000. 
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1 SEC. 393. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

2 ORGANIZATIONS; DEPARTMENT OF JUSTICE. 

3 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA4 TIONS.—The Attorney General may award grants to and 

5 enter into cooperative agreements with nongovernmental 

6 organizations, to— 

7 (1) provide technical assistance for community8 based organizations, which may include— 

9 (A) grant writing and grant management 

10 assistance, which may include assistance pro11 vided through workshops and other guidance; 

12 (B) legal assistance with incorporation; 

13 (C) legal assistance to obtain tax-exempt 

14 status; and 

15 (D) information on, and referrals to, other 

16 nongovernmental organizations that provide ex17 pertise in accounting, on legal issues, on tax 

18 issues, in program development, and on a vari19 ety of other organizational topics; 

20 (2) provide information and assistance for com21 munity-based organizations on capacity building; 

22 (3) provide for community-based organizations 

23 information on and assistance in identifying and 

24 using best practices for delivering assistance to per25 sons, families, and communities in need; 
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•S 6 IS1S 

1 (4) provide information on and assistance in 

2 utilizing regional intermediary organizations to in3 crease and strengthen the capabilities of nonprofit 

4 community-based organizations; 

5 (5) assist community-based organizations in 

6 replicating social service programs of demonstrated 

7 effectiveness; and 

8 (6) encourage research on the best practices of 

9 social service organizations. 

10 (b) APPLICATIONS.—To be eligible to receive a grant 

11 or enter into a cooperative agreement under this section, 

12 a nongovernmental organization, State, or political sub13 division shall submit an application to the Attorney Gen14 eral at such time, in such manner, and containing such 

15 information as the Attorney General may require. 

16 (c) LIMITATION.—In order to widely disburse limited 

17 resources, no community-based organization (other than 

18 a direct recipient of a grant or cooperative agreement from 

19 the Attorney General) may receive more than 1 grant or 

20 cooperative agreement under this section for the same pur21 pose. 

22 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized to be appropriated to carry out this section 

24 $35,000,000 for fiscal year 2006, and such sums as may 

25 be necessary for each of fiscal years 2007 through 2009. 
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1 (e) DEFINITION.—In this section, the term ‘‘commu2 nity-based organization’’ means a nonprofit corporation or 

3 association that has— 

4 (1) not more than 6 full-time equivalent em5 ployees who are engaged in the provision of social 

6 services; or 

7 (2) a current annual budget (current as of the 

8 date the entity seeks assistance under this section) 

9 for the provision of social services, compiled and 

10 adopted in good faith, of less than $450,000. 

11 SEC. 394. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

12 ORGANIZATIONS; DEPARTMENT OF HOUSING 

13 AND URBAN DEVELOPMENT. 

14 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA15 TIONS.—The Secretary of Housing and Urban Develop16 ment (referred to in this section ‘‘the Secretary’’) may 

17 award grants to and enter into cooperative agreements 

18 with nongovernmental organizations, to— 

19 (1) provide technical assistance for community20 based organizations, which may include— 

21 (A) grant writing and grant management 

22 assistance, which may include assistance pro23 vided through workshops and other guidance; 

24 (B) legal assistance with incorporation; 
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1 (C) legal assistance to obtain tax-exempt 

2 status; and 

3 (D) information on, and referrals to, other 

4 nongovernmental organizations that provide ex5 pertise in accounting, on legal issues, on tax 

6 issues, in program development, and on a vari7 ety of other organizational topics; 

8 (2) provide information and assistance for com9 munity-based organizations on capacity building; 

10 (3) provide for community-based organizations 

11 information on and assistance in identifying and 

12 using best practices for delivering assistance to per13 sons, families, and communities in need; 

14 (4) provide information on and assistance in 

15 utilizing regional intermediary organizations to in16 crease and strengthen the capabilities of community17 based organizations; 

18 (5) assist community-based organizations in 

19 replicating social service programs of demonstrated 

20 effectiveness; and 

21 (6) encourage research on the best practices of 

22 social service organizations. 

23 (b) APPLICATIONS.—To be eligible to receive a grant 

24 or enter into a cooperative agreement under this section, 

25 a nongovernmental organization, State, or political sub-
366 

•S 6 IS1S 

1 division shall submit an application to the Secretary at 

2 such time, in such manner, and containing such informa3 tion as the Secretary may require. 

4 (c) LIMITATION.—In order to widely disburse limited 

5 resources, no community-based organization (other than 

6 a direct recipient of a grant or cooperative agreement from 

7 the Secretary) may receive more than 1 grant or coopera8 tive agreement under this section for the same purpose. 

9 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this section 

11 $15,000,000 for fiscal year 2006, and such sums as may 

12 be necessary for each of fiscal years 2007 through 2009. 

13 (e) DEFINITION.—In this section, the term ‘‘commu14 nity-based organization’’ means a nonprofit corporation or 

15 association that has— 

16 (1) not more than 6 full-time equivalent em17 ployees who are engaged in the provision of social 

18 services; or 

19 (2) a current annual budget (current as of the 

20 date the entity seeks assistance under this section) 

21 for the provision of social services, compiled and 

22 adopted in good faith, of less than $450,000. 

23 SEC. 395. COORDINATION. 

24 The Secretary of Health and Human Services, the 

25 Corporation for National and Community Service, the At-
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1 torney General, and the Secretary of Housing and Urban 

2 Development shall coordinate their activities under this 

3 subtitle to ensure— 

4 (1) nonduplication of activities under this sub5 title; and 

6 (2) an equitable distribution of resources under 

7 this subtitle. 

8 Subtitle H—Maternity Group 

9 Homes 

10 SEC. 399. MATERNITY GROUP HOMES. 

11 (a) CONTRACT FOR EVALUATION.—Part B of the 

12 Runaway and Homeless Youth Act (42 U.S.C. 5701 et 

13 seq.) is amended by adding at the end the following: 

14 ‘‘SEC. 323. CONTRACT FOR EVALUATION. 

15 ‘‘(a) IN GENERAL.—The Secretary shall enter into 

16 a contract with a public or private entity for an evaluation 

17 of the maternity group homes that are supported by grant 

18 funds under this Act. 

19 ‘‘(b) INFORMATION.—The evaluation described in 

20 subsection (a) shall include the collection of information 

21 about the relevant characteristics of individuals who ben22 efit from maternity group homes such as those that are 

23 supported by grant funds under this Act and what services 

24 provided by those maternity group homes are most bene25 ficial to such individuals. 
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1 ‘‘(c) REPORT.—Not later than 2 years after the date 

2 on which the Secretary enters into a contract for an eval3 uation under subsection (a), and biennially thereafter, the 

4 entity conducting the evaluation under this section shall 

5 submit to Congress a report on the status, activities, and 

6 accomplishments of maternity group homes that are sup7 ported by grant funds under this Act.’’. 

8 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

9 388 of the Runaway and Homeless Youth Act (42 U.S.C. 

10 5751) is amended— 

11 (1) in subsection (a)(1)— 

12 (A) by striking ‘‘There’’ and inserting the 

13 following: 

14 ‘‘(A) IN GENERAL.—There’’; 

15 (B) in subparagraph (A), as redesignated, 

16 by inserting ‘‘and the purpose described in sub17 paragraph (B)’’ after ‘‘other than part E’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(B) MATERNITY GROUP HOMES.—There 

20 is authorized to be appropriated, for maternity 

21 group homes eligible for assistance under sec22 tion 322(a)(1)— 

23 ‘‘(i) $33,000,000 for fiscal year 2006; 

24 and 
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1 ‘‘(ii) such sums as may be necessary 

2 for fiscal year 2007.’’; and 

3 (2) in subsection (a)(2)(A), by striking ‘‘para4 graph (1)’’ and inserting ‘‘paragraph (1)(A)’’. 

Æ