I 

111TH CONGRESS 

1ST SESSION H. R. 2979 

To amend title IV of the Social Security Act to ensure funding for grants 

to promote responsible fatherhood and strengthen low-income families, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 19, 2009 

Mr. DAVIS of Illinois (for himself, Mr. MEEKS of New York, Mr. WATT, Mr. 

FATTAH, Mr. CLEAVER, Mrs. CHRISTENSEN, Mr. DAVIS of Alabama, Ms. 

LEE of California, Ms. JACKSON-LEE of Texas, Ms. CORRINE BROWN of 

Florida, Ms. RICHARDSON, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. 

KILPATRICK of Michigan, Mr. CUMMINGS, Ms. WATERS, Mr. RANGEL, 

Mr. PAYNE, Mr. JOHNSON of Georgia, Mr. CLAY, Mr. AL GREEN of 

Texas, Mr. TOWNS, Mr. SCOTT of Virginia, Mr. RUSH, Mr. 

BUTTERFIELD, Mr. BISHOP of Georgia, Ms. MOORE of Wisconsin, Mr. 

CARSON of Indiana, and Mr. THOMPSON of Mississippi) introduced the 

following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committees on Education and Labor, Energy and 

Commerce, and Agriculture, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To amend title IV of the Social Security Act to ensure 

funding for grants to promote responsible fatherhood 

and strengthen low-income families, and for other purposes. 

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


jlentini on PROD1PC65 with BILLS
2 

•HR 2979 IH

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Julia Carson Responsible Fatherhood and Healthy Fami4 lies Act of 2009’’. 

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

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—PROMOTING RESPONSIBLE FATHERHOOD AND 

STRENGTHENING LOW-INCOME FAMILIES 

Sec. 101. State assessments of barriers to employment and financial support of 

children. 

Sec. 102. Grants to States to conduct demonstration projects to promote economic opportunity for low-income parents. 

Sec. 103. Healthy marriage promotion and responsible fatherhood programs. 

Sec. 104. Elimination of separate TANF work participation rate for 2-parent 

families. 

Sec. 105. Ban on recovery of Medicaid costs for births. 

Sec. 106. Improved collection and distribution of child support. 

Sec. 107. Collection of child support under the supplemental nutrition assistance program. 

Sec. 108. Grants supporting healthy family partnerships for domestic violence 

intervention and preventions. 

Sec. 109. Procedures to address domestic violence. 

TITLE II—REVENUE PROVISIONS 

Sec. 201. Increase in credit percentage under earned income tax credit for eligible individuals with no qualifying children. 

Sec. 202. Broker reporting of customer’s basis in securities transactions. 

Sec. 203. Modification of effective date of leasing provisions of the American 

Jobs Creation Act of 2004. 

Sec. 204. Clarification of economic substance doctrine. 

7 SEC. 2. FINDINGS. 

8 Congress makes the following findings: 

9 (1) The most important factor in a child’s up10 bringing is whether the child is brought up in a lov11 ing, healthy, supportive environment. 


jlentini on PROD1PC65 with BILLS
3 

•HR 2979 IH

1 (2) Children who grow up with two parents are, 

2 on average, more likely than their peers in single3 parent homes to finish high school and be economi4 cally self-sufficient. 

5 (3) Father-child interaction, like mother-child 

6 interaction, has been shown to promote the positive 

7 physical, social, emotional, and mental development 

8 of children. 

9 (4) Children typically live without both parents 

10 when their parents are divorced or did not marry. 

More than 1 11 ⁄3 of all first marriages end in divorce, 

12 and 60 percent of divorcing couples have children. 

More than 1 13 ⁄3 of all births are to unmarried women. 

14 (5) More than 1 in 4 families with children 

15 have only 1 parent present, and more than 1 in 3 

16 children live absent their biological father. 

17 (6) Recent studies demonstrate that most 

18 unwed fathers in urban areas are highly involved 

19 with the mother of their child before and after the 

20 child’s birth, with 80 percent involved during the 

21 mother’s pregnancy, and 50 percent living with the 

22 child’s mother at the time of the child’s birth. How23 ever, the relationship between the parents often does 

24 not last, and many fathers do not maintain contact 

25 with their children as the children grow up. 


jlentini on PROD1PC65 with BILLS
4 

•HR 2979 IH

1 (7) An estimated 25 percent of the children 

2 who live in households without their father have not 

3 seen their fathers in at least 1 year. 

4 (8) The inability of parents to sustain a healthy 

5 relationship with their child’s other parent and re6 main involved in their child’s life can have severe 

7 negative consequences for the parents, the child, 

8 their community, and taxpayers. 

9 (9) Single-parent families are 5 times as likely 

10 to be poor as married-couple families. 

11 (10) Children raised in single-parent families 

12 are more likely than children raised in 2-parent fam13 ilies to do poorly in school, have emotional and be14 havioral problems, become teenage parents, commit 

15 crimes, smoke cigarettes, abuse drugs and alcohol, 

16 and have poverty-level incomes as adults. 

17 (11) High rates of unemployment and low 

18 wages are primary reasons why parents do not 

19 marry and why 2-parent families break up. 

20 (12) Domestic violence is also a significant 

21 problem leading to the nonformation or breakup of 

22 2-parent families. 

23 (13) A history of incarceration is a major bar24 rier to employment. Sixty percent of young African25 American men who dropped out of high school have 


jlentini on PROD1PC65 with BILLS
5 

•HR 2979 IH

1 served time. When these men leave prison, they 

2 often have difficulty finding a job and supporting 

3 their children. 

(14) Over 1 4 ⁄2 of State prison inmates are par5 ents. When noncustodial parents go to prison, most 

6 of them are required to pay their child support obli7 gation, even though they have little ability to pay the 

8 support. When these parents leave prison, they typi9 cally owe more than $20,000 in child support debt. 

10 Noncustodial parents leaving prison often re-enter 

11 the underground economy because of financial pres12 sures or to avoid the child support system, making 

13 it less likely that they will successfully rejoin society 

14 and reunite with their families. 

15 (15) Children should receive the child support 

16 paid by their parents, and the government should 

17 not keep the money to recover welfare costs. Regular 

18 child support income appears to have a greater posi19 tive impact on children dollar for dollar than other 

20 types of income. Researchers in Wisconsin found 

21 that when monthly child support was passed through 

22 to families receiving assistance under the Temporary 

23 Assistance for Needy Families program established 

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

25 (TANF) and disregarded 100 percent in determining 


jlentini on PROD1PC65 with BILLS
6 

•HR 2979 IH

1 assistance for the families, fathers paid more child 

2 support, established their legal relationship with 

3 their children more quickly, and worked less in the 

4 underground economy. Moreover, the State costs of 

5 a full pass-through and disregard of child support 

6 were fully offset by increased payments by fathers 

7 and decreased public assistance use by families. 

8 (16) The Department of Health and Human 

9 Services National Child Support Enforcement Stra10 tegic Plan for fiscal years 2005 through 2009 states 

11 that ‘‘child support is no longer a welfare reimburse12 ment, revenue-producing device for the Federal and 

13 State governments; it is a family-first program, in14 tended to ensure families’ self-sufficiency by making 

15 child support a more reliable source of income’’. 

16 (17) Current law permits States to apply the 

17 cost of passing through child support to families re18 ceiving assistance under the TANF program toward 

19 their maintenance of effort (MOE) requirements, 

20 but only to the extent that the State disregards the 

21 child support payments in determining the amount 

22 and type of TANF assistance. 

23 (18) Programs that increase employment oppor24 tunity and reduce barriers by increasing employment 


jlentini on PROD1PC65 with BILLS
7 

•HR 2979 IH

1 opportunity and reducing recidivism will benefit chil2 dren and families. 

3 (19) Transitional jobs programs have shown 

4 promise in reducing unemployment among chron5 ically unemployed or underemployed population 

6 groups, including formerly incarcerated individuals, 

7 the homeless, and young African-American men. 

8 (20) To strengthen families it is important to 

9 improve the upward economic mobility of the custo10 dial and noncustodial parent wage-earners, as well 

11 as youth at risk of early parenthood or incarcer12 ation, by providing the skills and experience nec13 essary to access jobs with family sustaining wages 

14 and benefits. In families in which all the members 

15 do not live together, this is important to enable the 

16 prompt and consistent payment of adequate child 

17 support. 

18 (21) It is important and useful to foster local 

19 and regional economic development and job advance20 ment for workers, especially young custodial and 

21 noncustodial parents, by funding local collaborations 

22 among business, education, and the community in 

23 the development of pathways for preparing disadvan24 taged citizens to meet the workforce needs of the 

25 local and regional economy. 


jlentini on PROD1PC65 with BILLS
8 

•HR 2979 IH

1 (22) Employers benefit from working with and 

2 being supported by the local education, postsec3 ondary, and workforce systems in identifying the 

4 academic and occupational skill sets needed to fill 

5 the skilled jobs in the changing economy. Local eco6 nomic and community development is enhanced 

7 when residents have access to higher wage employ8 ment, thus increasing the tax base, fueling the econ9 omy, and contributing to greater family economic se10 curity. 

11 (23) Public-private career pathways partner12 ships are an important tool for linking employers 

13 and workers with the workforce education services 

14 they need and for integrating community economic 

15 development and workforce education services. Tran16 sitional jobs programs can serve as the first step in 

17 a career pathway by giving unemployed individuals 

18 with multiple barriers to employment, valuable work 

19 experience and related services. 

20 (24) The purpose of child support is to provide 

21 necessary income support for and increase the well22 being of children living apart from a parent. To im23 prove the ability of low-income noncustodial parents 

24 to provide long-term support and care for their chil25 dren throughout their entire childhood, it is imporVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
9 

•HR 2979 IH

1 tant that child support polices support parental ef2 forts to pursue education and employment and to 

3 stay involved with their children. 

4 (25) Responsible parenthood includes active 

5 participation in financial support and child-rearing, 

6 as well as the formation and maintenance of a posi7 tive, healthy, and nonviolent relationship between 

8 parent and child and a cooperative, healthy, and 

9 nonviolent relationship between parents. 

10 (26) States should be encouraged to implement 

11 voluntary programs that provide support for respon12 sible parenting, including by increasing the employ13 ment and financial security of parents, and the pa14 rental involvement of noncustodial parents. 

15 (27) Promoting responsible parenthood saves 

16 the government money by reducing the need for pub17 lic assistance, increasing the educational attainment 

18 of children, reducing juvenile delinquency and crime, 

19 reducing substance abuse, and lowering rates of un20 employment. 

21 (28) Programs to encourage responsible father22 hood or responsible motherhood should promote and 

23 provide support services for— 

24 (A) fostering loving and healthy relation25 ships between parents and children; 


jlentini on PROD1PC65 with BILLS
10 

•HR 2979 IH

1 (B) increasing responsibility of noncusto2 dial parents for the long-term care and finan3 cial well-being of their children; 

4 (C) increasing employment of low-income, 

5 noncustodial parents and improving compliance 

6 with child support obligations; and 

7 (D) reducing barriers to active 2-parent in8 volvement and cooperative parenting. 

9 (29) The promotion of marriage and responsible 

10 parenthood should not denigrate the standing or 

11 parenting efforts of single parents or other care12 givers, lessen the protection of children from abusive 

13 parents, or compromise the safety or health of the 

14 custodial or noncustodial parent, but should increase 

15 the chance that children will have 2 caring parents 

16 to help them grow up healthy and secure. 

17 TITLE I—PROMOTING RESPON18 SIBLE FATHERHOOD AND 

19 STRENGTHENING LOW-IN20 COME FAMILIES 

21 SEC. 101. STATE ASSESSMENTS OF BARRIERS TO EMPLOY22 MENT AND FINANCIAL SUPPORT OF CHIL23 DREN. 

24 (a) STATE ASSESSMENTS AND REPORTS.—As a con25 dition of the continued approval of a State plan under part 


jlentini on PROD1PC65 with BILLS
11 

•HR 2979 IH

1 D of title IV of the Social Security Act (42 U.S.C. 651 

2 et seq.), each State with an approved such plan, acting 

3 through the appropriate State agencies, shall assess the 

4 State policies with respect to the issues described in sub5 section (b) and submit a report to the Secretary of Health 

6 and Human Services on the results of such assessment 

7 not later than October 1, 2012. 

8 (b) ISSUES DESCRIBED.—For purposes of subsection 

9 (a), the issues described in this subsection are the fol10 lowing: 

11 (1) The process of setting and modifying child 

12 support obligations, particularly with respect to low13 income parents, including— 

14 (A) the role and criteria for using imputed 

15 income in determining child support obligations; 

16 (B) the process of modifying obligations; 

17 (C) the consideration of income and em18 ployment status, including efforts to identify 

19 unreported income; 

20 (D) the consideration of incarceration; 

21 (E) the consideration of disability; 

22 (F) the treatment of arrearages, including 

23 interest charged, and laws or procedures that 

24 interfere with forgiveness, adjustment, waiver, 

25 or compromise of arrears owed to the State by 


jlentini on PROD1PC65 with BILLS
12 

•HR 2979 IH

1 low-income noncustodial parents who lack suffi2 cient ability to pay such arrearages; 

3 (G) the procedures related to retroactive 

4 support; and 

5 (H) State pass-through and disregard poli6 cies for recipients of means-tested public bene7 fits. 

8 (2) The impact of State criminal laws and law 

9 enforcement practices on the employment acquisi10 tion, retention, and advancement prospects of indi11 viduals following arrest, conviction, or incarceration, 

12 including— 

13 (A) any efforts, including counseling or 

14 employment support, to assist ex-prisoners with 

15 reentry to a community and successful reunifi16 cation with their families; and 

17 (B) an assessment of any efforts to seal or 

18 expunge arrest and conviction records and any 

19 efforts to grant certificates or other acknowl20 edgments of rehabilitation to ex-prisoners, and 

21 to examine State occupational licensing and cer22 tification procedures. 

23 (3) An assessment of the impact of debt on em24 ployment retention, including child support and nonVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
13 

•HR 2979 IH

1 child support debts imposed to recover costs related 

2 to welfare and criminal justice. 

3 (4) An assessment of State practices related to 

4 providing prisoners and ex-prisoners with valid iden5 tification documents upon release from prison. 

6 (5) Identification of any other barriers to 

7 healthy family formation or sustainable economic op8 portunity for custodial and noncustodial parents that 

9 are created or exacerbated by Federal or State laws, 

10 policies, or procedures, including an examination of 

11 the rules of Federal and State means-tested pro12 grams, the operation of the State workforce system, 

13 the availability of financial education services, and 

14 the availability of domestic violence services and 

15 child support procedures to help victims of domestic 

16 violence stay safe and obtain the child support they 

17 are owed. 

18 (c) GRANTS TO STATES FOR COMMISSIONS ON STATE

19 LAW IMPROVEMENTS IN THE BEST INTEREST OF CHIL20 DREN AND FAMILIES.—The Secretary of Health and 

21 Human Services shall award grants to States to establish 

22 or support commissions to review the State assessment 

23 conducted in accordance with subsection (a) and to make 

24 recommendations on ways to improve State law in the best 

25 interest of children and families. 


jlentini on PROD1PC65 with BILLS
14 

•HR 2979 IH

1 (d) APPROPRIATIONS.—Out of any money in the 

2 Treasury of the United States not otherwise appropriated, 

3 there are appropriated to the Secretary of Health and 

4 Human Services for each of fiscal years 2011 through 

5 2015, $3,000,000, to remain available until expended, for 

6 the purpose of making— 

7 (1) payments to States to offset all or a portion 

8 of the costs of conducting the State assessments and 

9 reports required under subsection (a); and 

10 (2) grants to States under subsection (c). 

11 SEC. 102. GRANTS TO STATES TO CONDUCT DEMONSTRA12 TION PROJECTS TO PROMOTE ECONOMIC OP13 PORTUNITY FOR LOW-INCOME PARENTS. 

14 (a) COURT-SUPERVISED OR IV–D AGENCY-SUPER15 VISED EMPLOYMENT PROGRAMS FOR NONCUSTODIAL

16 PARENTS.— 

17 (1) IN GENERAL.—To assist States in imple18 menting section 466(a)(15) of the Social Security 

19 Act, the Secretary of Health and Human Services 

20 shall award grants to States to conduct demonstra21 tion projects to establish, in coordination with coun22 ties and other local or tribal governments, court-su23 pervised or IV–D agency supervised-employment 

24 programs for noncustodial parents who have barriers 

25 to employment and a history of nonpayment of child 


jlentini on PROD1PC65 with BILLS
15 

•HR 2979 IH

1 support obligations, as determined by a court or the 

2 IV–D agency, and who are determined by the court 

3 or agency to be in need of employment services or 

4 placement in order to pay such child support obliga5 tions. A noncustodial parent described in the pre6 ceding sentence who is an ex-offender shall be eligi7 ble to participate in a program established under 

8 this subsection. 

9 (2) REQUIREMENTS.— 

10 (A) OPTION TO PARTICIPATE PRIOR TO

11 CONTEMPT FINDING.—A State shall not be eli12 gible to receive a grant under this subsection 

13 unless any program established with funds 

14 made available under the grant provides non15 custodial parents described in paragraph (1) 

16 with an option to participate in the program 

17 prior to the court or agency entering a finding 

18 that the noncustodial parent is in contempt for 

19 failure to pay a child support obligation and, 

20 potentially subject to criminal penalties. 

21 (B) PROGRAM GOALS.—An employment 

22 program established with funds made available 

23 under a grant awarded under this subsection 

24 shall be designed to do the following: 


jlentini on PROD1PC65 with BILLS
16 

•HR 2979 IH

1 (i) To assist noncustodial parents de2 scribed in paragraph (1) obtain and main3 tain unsubsidized employment. 

4 (ii) To increase the amount of finan5 cial support received by children. 

6 (iii) To help noncustodial parents de7 scribed in paragraph (1) improve relation8 ships with their children and their chil9 dren’s custodial parent. 

10 (C) 6 MONTHS OF CONTINUOUS, TIMELY

11 PAYMENTS.—An employment program estab12 lished with funds made available under this 

13 subsection shall not permit a noncustodial par14 ent placed in the program to graduate from the 

15 program and avoid penalties for failure to pay 

16 a child support obligation until the noncustodial 

17 parent completes at least 6 months of contin18 uous, timely payment of the parent’s child sup19 port obligations. 

20 (D) USE OF FUNDS.— 

21 (i) Services provided under an employ22 ment program established with funds made 

23 available under a grant made under this 

24 subsection must include the following: 


jlentini on PROD1PC65 with BILLS
17 

•HR 2979 IH

1 (I) Job placement, including job 

2 development and supervised job search 

3 as necessary. 

4 (II) Case management, including 

5 educational assessment and advising, 

6 vocational assessment and career ex7 ploration services, and court liaison 

8 services. 

9 (III) Counseling on responsible 

10 parenthood. 

11 (IV) Referral for support and 

12 educational services. 

13 (V) Employment retention serv14 ices. 

15 (ii) Services provided under an em16 ployment program established with funds 

17 made available under a grant made under 

18 this subsection may include the following: 

19 (I) Remedial education services 

20 or educational referral. 

21 (II) Support funds for services 

22 such as transportation, child care, or 

23 short-term training. 

24 (III) Transitional jobs programs. 


jlentini on PROD1PC65 with BILLS
18 

•HR 2979 IH

1 (IV) Public-private career path2 way partnerships established in ac3 cordance with subsection (b)(2). 

4 (V) Occupational skill training, 

5 including college credit programs. 

6 (VI) Curricula development. 

7 (E) ADMINISTRATION.—A State that re8 ceives a grant under this subsection may con9 tract with a public or private nonprofit organi10 zation, including a faith-based or community11 based organization, to administer (in conjunc12 tion with the court of jurisdiction or the IV–D 

13 agency) the court-supervised or IV–D agency14 supervised employment program. 

15 (b) TRANSITIONAL JOBS AND PUBLIC-PRIVATE

16 PARTNERSHIP GRANTS.—The Secretary of Labor shall 

17 award grants to States to conduct demonstration projects 

18 to carry out one or more of the projects described in para19 graphs (1) and (2). 

20 (1) TRANSITIONAL JOBS GRANTS.— 

21 (A) IN GENERAL.—To establish and ex22 pand transitional jobs programs for eligible in23 dividuals, including such programs conducted 

24 by local governments, State employment agen25 cies, nonprofit organizations, and faith-based or 


jlentini on PROD1PC65 with BILLS
19 

•HR 2979 IH

1 community-based organizations or inter2 mediaries, that— 

3 (i) combine time-limited employment 

4 in transitional jobs that may be subsidized 

5 with public funds, with activities that pro6 mote skill development and remove barriers 

7 to employment, such as case management 

8 services and education, training, child sup9 port-related services, and other activities, 

10 pursuant to individual plans; and 

11 (ii) provide such individuals with— 

12 (I) transitional jobs placements 

13 and job placement assistance, to help 

14 the individuals make the transition 

15 from subsidized employment in transi16 tional jobs to stable unsubsidized em17 ployment; and 

18 (II) retention services after the 

19 transition to unsubsidized employ20 ment. 

21 (B) ELIGIBLE INDIVIDUALS.—For pur22 poses of this paragraph, the term ‘‘eligible indi23 viduals’’ means individuals within any of the 

24 following categories of disproportionately chron25 ically unemployed individuals: 


jlentini on PROD1PC65 with BILLS
20 

•HR 2979 IH

1 (i) Individuals who have attained age 

2 16, but not attained age 36, and who have 

3 documented barriers to employment such 

4 as lack of a high school diploma, limited 

5 English proficiency, aging out of foster 

6 care, or offender status, particularly such 

7 individuals who are parents or expectant 

8 parents. 

9 (ii) Formerly incarcerated individuals. 

10 (iii) Homeless or formerly homeless 

11 individuals. 

12 (iv) Individuals with disabilities. 

13 (v) Individuals designated by a court 

14 or the IV–D agency to participate in tran15 sitional jobs programs. 

16 (C) LIMITATIONS ON USE OF FUNDS.— 

17 (i) ALLOWABLE ACTIVITIES.—A State 

18 that receives a grant under this paragraph 

19 (or a subgrantee of such State) (referred 

20 to in this paragraph as the ‘‘program oper21 ator’’) shall use the funds made available 

22 under the grant to operate a transitional 

23 jobs program for eligible individuals con24 sistent with the following requirements: 


jlentini on PROD1PC65 with BILLS
21 

•HR 2979 IH

1 (I) JOBS.—The program oper2 ator shall place eligible individuals in 

3 temporary jobs, the incomes from 

4 which may be subsidized in whole or 

5 in part with public funds. An eligible 

6 individual placed in such a job (re7 ferred to in this paragraph as ‘‘a par8 ticipant’’) shall perform work directly 

9 for the program operator or another 

10 public, nonprofit, or private sector or11 ganization (which operator or organi12 zation may be referred to in this para13 graph as a ‘‘worksite employer’’) with14 in the community involved. 

15 (II) HOURS.— 

16 (aa) IN GENERAL.—Subject 

17 to item (bb), the transitional jobs 

18 program shall provide a partici19 pant with not less than 30, and 

20 not more than 40, hours per 

21 week of a combination of paid 

22 employment and the services de23 scribed in subclauses (III), (IV), 

24 and (V). 


jlentini on PROD1PC65 with BILLS
22 

•HR 2979 IH

1 (bb) ACCOMMODATION OF

2 SPECIAL CIRCUMSTANCES.—The 

3 number of hours per week re4 quired under item (aa) may be 

5 adjusted in the case of a partici6 pant who requires a modified 

7 work week to accommodate spe8 cial circumstances. 

9 (III) JOB PREPARATION AND

10 SERVICES.—The program operator 

11 shall— 

12 (aa) develop an individual 

13 plan for each participant, which 

14 shall contain a goal that focuses 

15 on preparation of the participant 

16 for unsubsidized jobs in demand 

17 in the local economy that offer 

18 the potential for advancement 

19 and growth (including increases 

20 in wages and benefits); 

21 (bb) develop transitional 

22 jobs placements for participants 

23 that will best prepare them for 

24 jobs described in item (aa) or 

25 participation in the public-private 


jlentini on PROD1PC65 with BILLS
23 

•HR 2979 IH

1 career pathway partnerships es2 tablished in accordance with 

3 paragraph (2); and 

4 (cc) provide case manage5 ment services and ensure that 

6 appropriate education, training, 

7 and other activities are available 

8 to participants, consistent with 

9 each participant’s individual 

10 plan. 

11 (IV) JOB PLACEMENT ASSIST12 ANCE AND RETENTION SERVICES.— 

13 The program operator shall provide 

14 job placement assistance to help par15 ticipants obtain unsubsidized employ16 ment and shall provide retention serv17 ices to the participants for a minimum 

18 of 6 months after entry into the un19 subsidized employment. 

20 (V) EDUCATION OR TRAINING.— 

21 In any workweek in which a partici22 pant is scheduled to work at least 30 

23 hours in the program, not less than 

24 20 percent of the scheduled hours and 

25 not more than 50 percent of the 


jlentini on PROD1PC65 with BILLS
24 

•HR 2979 IH

1 scheduled hours shall involve partici2 pation in— 

3 (aa) education or training 

4 activities designed to improve the 

5 participant’s employability and 

6 potential earnings; 

7 (bb) other activities designed 

8 to reduce or eliminate any bar9 riers that may impede the par10 ticipant’s ability to secure and 

11 advance in unsubsidized employ12 ment; or 

13 (cc) activities designed to 

14 promote financial literacy and the 

15 use of products and services that 

16 increase personal savings and 

17 build financial assets for family 

18 support, education, homeowner19 ship, and retirement. 

20 (VI) DURATION.— 

21 (aa) IN GENERAL.—Subject 

22 to item (bb), the duration of any 

23 placement in the program shall 

24 be for a minimum period of 3 

25 consecutive months. 


jlentini on PROD1PC65 with BILLS
25 

•HR 2979 IH

1 (bb) 3 MONTH EXTEN2 SION.—A program placement 

3 may be extended for up to 2 ad4 ditional consecutive 3-month pe5 riods upon the conclusion of the 

6 original 3-month placement pe7 riod if such extension would be 

8 consistent with the individual’s 

9 plan for transition to unsub10 sidized employment. 

11 (VII) SUPERVISION.—The work12 site employer or program operator 

13 shall supervise program participants, 

14 consistent with the goal of addressing 

15 the limited work experience and skills 

16 of the participants. 

17 (D) REPORTS.—Not later than 120 days 

18 after the end of the grant period, the State 

19 shall submit a report to the Secretary of Labor 

20 that contains information on the number of 

21 participants in the program who have entered 

22 unsubsidized employment, the percentage of 

23 program participants who are employed during 

24 the second quarter after exit, the percentage of 

25 program participants who are employed during 


jlentini on PROD1PC65 with BILLS
26 

•HR 2979 IH

1 the fourth quarter after exit, the median earn2 ings of program participants during the second 

3 quarter after exit, the percentage of program 

4 participants who obtain an education or train5 ing credential during participation or within one 

6 year of exit, and demographic information re7 garding the participants. 

8 (E) TECHNICAL ASSISTANCE.—The Sec9 retary of Labor shall enter into contracts with 

10 entities with demonstrated experience in the 

11 provision of transitional jobs to provide tech12 nical assistance to the program operators and 

13 worksite employers for the programs assisted 

14 under this paragraph. 

15 (2) PUBLIC-PRIVATE CAREER PATHWAYS PART16 NERSHIPS.— 

17 (A) IN GENERAL.—To allow workforce 

18 education providers representing career path19 way partnerships— 

20 (i) to create or expand career path21 ways, with groups of employers in specific 

22 industry or occupational sectors, for dis23 advantaged workers, which may include 

24 any mix of such employers’ existing lower 


jlentini on PROD1PC65 with BILLS
27 

•HR 2979 IH

1 wage employees, new hires or potential 

2 hires; or 

3 (ii) to fill in gaps in career pathways 

4 in particular localities or regions as needed 

5 to ensure that career pathways are acces6 sible to unemployed disadvantaged workers 

7 and at risk youth who have lower skills or 

8 limited English proficiency, including 

9 through the creation of workforce edu10 cation services, such as ‘‘bridge’’ programs 

11 that contextualize basic skills, English lan12 guage, or college remedial education serv13 ices to specific career pathways, and ef14 forts to create opportunities for gaining 

15 work experience in a career pathway. 

16 (B) USE OF FUNDS.—Funds made avail17 able under a grant under this paragraph may 

18 be used by career pathways partnerships for 

19 any expense reasonably related to the accom20 plishment of the specific objectives of the part21 nership and the purpose described in this para22 graph, including any of the activities described 

23 in subsection (a)(2)(D). 

24 (C) LIMITATIONS.— 


jlentini on PROD1PC65 with BILLS
28 

•HR 2979 IH

1 (i) IN GENERAL.—Of the funds made 

2 available to a career pathway partnership 

3 to carry out the purpose described in this 

4 paragraph— 

5 (I) not more than 30 percent of 

6 such funds may be used to pay or 

7 subsidize wages during a period of 

8 work experience or internship, not to 

9 exceed 90 days; and 

10 (II) not more than 10 percent of 

11 such funds may be used for adminis12 trative purposes, but this limitation 

13 shall not apply to activities related to 

14 building and maintaining partner15 ships, including such activities as con16 ducting workforce needs assessments, 

17 brokering public-private and inter18 agency agreements, creating cus19 tomized curricula, and developing 

20 work experience opportunities. 

21 (ii) PROHIBITION ON SUBSIDIZING

22 WAGES OF CURRENT EMPLOYEES.—No 

23 funds made available to carry out this 

24 paragraph shall be used to subsidize the 

25 wages of any individual who, as of the date 


jlentini on PROD1PC65 with BILLS
29 

•HR 2979 IH

1 of the establishment of the career pathway 

2 partnership, is an employee of any em3 ployer participating in the partnership. 

4 (D) REQUIREMENTS FOR AWARDING OF

5 SUBGRANTS.— 

6 (i) IN GENERAL.—Funds shall be 

7 made available to career pathway partner8 ships to carry out the purpose described in 

9 this paragraph based on a performance10 based accountability system that includes 

11 the following measures of performance: 

12 (I) The number of individuals to 

13 be trained. 

14 (II) The percentage of such indi15 viduals who complete the program. 

16 (III) The percentage of such in17 dividuals who enter or advance in em18 ployment. 

19 (IV) The wage and benefit gains 

20 of individuals who complete the pro21 gram before and within 6 months 

22 after their program completion, in23 cluding the extent to which the indi24 viduals achieved economic self-suffi25 ciency. 


jlentini on PROD1PC65 with BILLS
30 

•HR 2979 IH

1 (V) The percentage of individuals 

2 who complete the program and enter 

3 employment who retain employment 

4 for at least 6 months. 

5 (VI) Where applicable, the per6 centage of individuals who owe child 

7 support and complete the program 

8 who improve in their payment of child 

9 support within 6 months after their 

10 program completion. 

11 In establishing goals for such measures, 

12 due consideration shall be given to the edu13 cation, work experience, and job readiness 

14 of the individuals expected to participate in 

15 the program, the barriers of such individ16 uals to employment, and the local job mar17 ket. 

18 (ii) CONSIDERATIONS FOR FUNDING

19 RENEWALS.—A subgrantee’s level of suc20 cess in achieving employment, advance21 ment, wage, and employment retention 

22 goals shall be a primary consideration for 

23 determining whether to renew a grant 

24 made to such entity and the funding level 

25 for such grant. 


jlentini on PROD1PC65 with BILLS
31 

•HR 2979 IH

1 (iii) PRIORITIES FOR AWARDS OF SUB2 GRANTS.—In awarding subgrants under 

3 this paragraph, a State shall give priority 

4 to applications that— 

5 (I) propose to serve areas of high 

6 poverty, high youth unemployment, 

7 high dropout rates, or high rates of 

8 low-income single-parent families; 

9 (II) include a substantial cash or 

10 in-kind match by all employers, in11 cluding joint labor-management pro12 grams where applicable, in the part13 nerships, such as paid release time for 

14 employed workforce education partici15 pants; 

16 (III) use instructional materials 

17 and instructors directly used in the 

18 specific business or industry sectors of 

19 the partnership employers; 

20 (IV) link successful completion of 

21 workforce education services to wage 

22 increases, promotions or job hires; 

23 (V) will result in attainment of 

24 employer-recognized occupational and 

25 educational credentials; 


jlentini on PROD1PC65 with BILLS
32 

•HR 2979 IH

1 (VI) address career guidance and 

2 adult basic education and English lan3 guage needs as well as job-specific 

4 skills; 

5 (VII) demonstrate a blending of 

6 resources from partner agencies in the 

7 workforce system and other sectors 

8 and Federal programs, including su9 perior procedures for coordinating re10 sponsible fatherhood promotion activi11 ties, where appropriate, to support the 

12 development of high quality pathways; 

13 (VIII) identify how the sub14 grantee will maximize services to un15 employed disadvantaged workers who 

16 also face other barriers in the labor 

17 market, such as high school dropout, 

18 offender status, aging out of foster 

19 care, low basic skill level, including 

20 limited English proficiency, learning 

21 disabilities, physical, emotional or be22 havior disabilities, or substance abuse 

23 recovery, which may be through direct 

24 relationships with local providers of 

25 transitional jobs programs under 


jlentini on PROD1PC65 with BILLS
33 

•HR 2979 IH

1 which in appropriate circumstances 

2 transitional jobs participants may ac3 cess career pathways programs upon 

4 completion of the transitional jobs 

5 program; and 

6 (IX) support collaboration, as ap7 propriate, between employers and 

8 labor organizations and other work9 force development professionals, in10 cluding joint labor management train11 ing and education programs where ap12 propriate. 

13 (E) DEFINITIONS.—In this paragraph: 

14 (i) ADULT EDUCATION.—The term 

15 ‘‘adult education’’ has the meaning given 

16 that term in section 203 of the Workforce 

17 Investment Act of 1998 (20 U.S.C. 9202). 

18 (ii) CAREER PATHWAY.—The term 

19 ‘‘career pathway’’ means a linked set of 

20 workforce education and job opportunities 

21 within a specific industry sector, or for an 

22 occupational sector that cuts across mul23 tiple business and industry sectors, which 

24 begins at the lowest skill and English lan25 guage levels, and extends through for-credVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
34 

•HR 2979 IH

1 it college opportunities such as earning rel2 evant associate or bachelor’s degrees, and 

3 prepares individuals for advancement in 

4 jobs in demand in the local or regional 

5 labor market. 

6 (iii) COMMUNITY-BASED PROVIDER.— 

7 The term ‘‘community-based provider’’ 

8 means a not-for-profit organization, with 

9 local boards of directors, that directly pro10 vides workforce education services. 

11 (iv) INSTITUTION OF HIGHER EDU12 CATION.—The term ‘‘institution of higher 

13 education’’ has the meaning given that 

14 term in section 101 of the Higher Edu15 cation Act of 1965 (20 U.S.C. 1001). 

16 (v) CHARTER SCHOOL.—The term 

17 ‘‘charter school’’ has the meaning given 

18 that term in section 5210 of the Elemen19 tary and Secondary Education Act of 1965 

20 (20 U.S.C. 7221i). 

21 (vi) AREA VOCATIONAL EDUCATION

22 SCHOOL.—The term ‘‘area vocational and 

23 technical education school’’ has the mean24 ing given that term in section 3 of the Carl 


jlentini on PROD1PC65 with BILLS
35 

•HR 2979 IH

1 D. Perkins Vocational and Technical Edu2 cation Act of 1998 (20 U.S.C. 2302). 

3 (vii) DISADVANTAGED WORKERS.— 

4 The term ‘‘disadvantaged workers’’ means 

5 unemployed individuals in low-income 

6 households or employed individuals in low7 income households with wages at or below 

2 8 ⁄3 of the median wage for the State or re9 gion applying for the grant. 

10 (viii) CAREER PATHWAY PARTNER11 SHIP.—The term ‘‘career pathway partner12 ship’’ means collaborations of 1 or more 

13 workforce education providers, 1 or more 

14 employers, 1 or more labor organizations, 

15 where applicable, as a result of such orga16 nization’s representation of employees at 

17 the worksite who have skills in which the 

18 training or employment programs are pro19 posed, and may include optional additional 

20 entities as needed to provide a comprehen21 sive range of workforce education and an22 cillary support services. 

23 (ix) WORKFORCE EDUCATION.—The 

24 term ‘‘workforce education’’ means a set of 

25 career guidance and exploration services, 


jlentini on PROD1PC65 with BILLS
36 

•HR 2979 IH

1 adult education and English language serv2 ices, job training, registered apprenticeship 

3 programs, and credit and noncredit post4 secondary education services aimed at pre5 paring individuals to enter and sustain em6 ployment in specific occupations and to 

7 have the sufficient skills to respond to 

8 shifting employment opportunities. 

9 (x) WORKFORCE EDUCATION PRO10 VIDER.—The term ‘‘workforce education 

11 provider’’ means community-based pro12 viders, institutions of higher education, 

13 area vocational and technical education 

14 schools, charter schools, and other public 

15 nonprofit entities that have a demonstrated 

16 capacity to provide quality workforce edu17 cation services. 

18 (c) MATCHING REQUIREMENT.— 

19 (1) IN GENERAL .—The Secretary of Health 

20 and Human Services and the Secretary of Labor 

21 may not award a grant to a State under this section 

22 unless the State agrees that, with respect to the 

23 costs to be incurred by the State in conducting a 

24 demonstration project with funds provided under the 

25 grant, the State will make available non-Federal 


jlentini on PROD1PC65 with BILLS
37 

•HR 2979 IH

1 contributions in an amount equal to 10 percent of 

2 the amount of Federal funds paid to the State under 

3 such grant. 

4 (2) NON-FEDERAL CONTRIBUTIONS.—In this 

5 subsection, the term ‘‘non-Federal contributions’’ in6 cludes contributions by the State and by public and 

7 private entities that may be in cash or in kind, but 

8 does not include any amounts provided by the Fed9 eral Government, or services assisted or subsidized 

10 to any significant extent by the Federal Government, 

11 or any amount expended by a State before October 

12 1, 2007. 

13 (d) WORKER PROTECTIONS AND LABOR STAND14 ARDS.— 

15 (1) RATE OF PAY; BENEFITS AND WORKING

16 CONDITIONS.— 

17 (A) IN GENERAL.—A worksite employer of 

18 a participant in a program or activity funded 

19 under this section shall pay the participant at 

20 the rate paid to employees of the worksite em21 ployer who are not participants in such pro22 gram or activity and who perform comparable 

23 work at the worksite, including periodic in24 creases where appropriate. If no other employ25 ees of the worksite employer perform comVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
38 

•HR 2979 IH

1 parable work at the worksite, the worksite em2 ployer shall pay the participant not less than 

3 the applicable Federal or State minimum wage, 

4 whichever is higher. 

5 (B) BENEFITS AND CONDITIONS.—An in6 dividual employed through participation in a 

7 program or activity funded under this section 

8 shall be provided with benefits and working 

9 conditions at the same level and to the same ex10 tent as such benefits and conditions are pro11 vided to other employees of the employer of the 

12 individual who have worked a similar length of 

13 time and perform the same work. 

14 (2) NONDUPLICATION.— 

15 (A) IN GENERAL.—Funds provided 

16 through a grant made under this paragraph 

17 shall be used only for a program or activity that 

18 does not duplicate, and is in addition to, a pro19 gram or activity otherwise available in the local20 ity of the program or activity funded under this 

21 section. 

22 (B) PRIVATE, NONPROFIT ENTITY.—Funds 

23 provided through a grant made under this sec24 tion shall not be provided to a private nonprofit 

25 entity to conduct programs or activities that are 


jlentini on PROD1PC65 with BILLS
39 

•HR 2979 IH

1 the same as or substantially equivalent to ac2 tivities provided by a State or local government 

3 agency in the area in which such entity is lo4 cated, unless the requirements of paragraph (3) 

5 are met. 

6 (3) NONDISPLACEMENT.— 

7 (A) IN GENERAL.—A worksite employer 

8 shall not displace an employee or position (in9 cluding partial displacement such as reduction 

10 in hours, wages, or employment benefits) or im11 pair contracts for services or collective bar12 gaining agreements, as a result of the use by 

13 such employer of a participant in a program or 

14 activity funded under this section, and no par15 ticipant in the program or activity shall be as16 signed to fill any established unfilled position 

17 vacancy. 

18 (B) JOB OPPORTUNITIES.—A job oppor19 tunity shall not be created under this paragraph 

20 that will infringe in any manner on the pro21 motional opportunity of an employed individual. 

22 (C) LIMITATION ON SERVICES.— 

23 (i) SUPPLANTATION OF HIRING.—A 

24 participant in any program or activity 

25 funded under this section shall not perform 


jlentini on PROD1PC65 with BILLS
40 

•HR 2979 IH

1 any services or duties, or engage in activi2 ties, that will supplant the hiring of em3 ployees that are not participants in the 

4 program or activity. 

5 (ii) DUTIES FORMERLY PERFORMED

6 BY ANOTHER EMPLOYEE.—A participant 

7 in any program or activity funded under 

8 this section shall not perform services or 

9 duties, or engage in activities, that are 

10 services, duties, or activities that had been 

11 performed by or were assigned to any em12 ployee who recently resigned or was dis13 charged, who is subject to a reduction in 

14 force, who has recall rights pursuant to a 

15 collective bargaining agreement or applica16 ble personnel procedures, who is on leave 

17 (such as terminal, temporary, vacation, 

18 emergency, or sick leave), who is on strike, 

19 or who is being locked out. 

20 (D) CONCURRENCE OF LOCAL LABOR OR21 GANIZATION.—No placement shall be made 

22 under a program or activity funded under this 

23 section until the entity conducting the program 

24 or activity has obtained the written concurrence 

25 of any local labor organization representing emVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
41 

•HR 2979 IH

1 ployees who are engaged in the same or sub2 stantially similar work as that proposed to be 

3 carried out for the worksite employer with 

4 whom a participant is to be placed under the 

5 program or activity. 

6 (4) NO IMPACT ON UNION ORGANIZING.—A 

7 State conducting a demonstration project funded 

8 under this section and any entity conducting a pro9 gram or activity funded under this section shall pro10 vide the Secretary with a certified assurance that 

11 none of such funds shall be used to assist or deter 

12 union organizing. 

13 (5) ACCOUNTABILITY.— 

14 (A) IN GENERAL.—Funds provided under 

15 this section shall not be used to subsidize train16 ing or employment with an employer that has 

17 a demonstrable record of noncompliance with 

18 Federal labor, civil rights, workplace safety, or 

19 related laws. 

20 (B) CERTIFIED SATISFACTORY RECORD.— 

21 Employers who receive training or wage sub22 sidies under programs or activities funded 

23 under this section shall have a satisfactory 

24 record in labor relations and employment prac25 tices, as certified by the Secretary of Labor. 


jlentini on PROD1PC65 with BILLS
42 

•HR 2979 IH

1 (C) APPLICATION OF WORKER PROTEC2 TION LAWS.—A participant in a program or ac3 tivity funded under this section shall be consid4 ered to be an employee of any employer that 

5 the participant is placed with for all purposes 

6 under Federal and State law, including laws re7 lating to health and safety, civil rights, and 

8 worker’s compensation. 

9 (D) OTHER JOB QUALITY STANDARDS.— 

10 Employers who receive training or wage sub11 sidies under programs or activities funded 

12 under this section shall meet all applicable 

13 State or local job or employer quality standards 

14 regarding such issues as wages, benefits, ad15 vancement opportunities, and turnover rates es16 tablished for programs funded under the Work17 force Investment Act of 1998 (29 U.S.C. 2801 

18 et seq.). 

19 (6) GRIEVANCE PROCEDURE.—An entity con20 ducting a program or activity funded under this sec21 tion shall establish and maintain a procedure for the 

22 filing and adjudication of grievances by employees of 

23 worksite employers who are not participants in the 

24 program, or such employees’ representatives, or by 

25 participants in such a program or activity alleging a 


jlentini on PROD1PC65 with BILLS
43 

•HR 2979 IH

1 violation of a provision of this subsection that is 

2 similar to the grievance procedure established by a 

3 State for purposes of section 407(f)(3) of the Social 

4 Security Act (42 U.S.C. 607(f)(3)). 

5 (7) NONPREEMPTION OF STATE LAW.—The 

6 provisions of this subsection shall not be construed 

7 to preempt any provision of State law that affords 

8 greater protections to employees or participants than 

9 are afforded by this subsection. 

10 (8) TREATMENT OF AMOUNTS PAID TO PAR11 TICIPANTS.—Amounts paid to a participant in a 

12 program or activity funded under this section shall 

13 be— 

14 (A) considered earned income for purpose 

15 of determining the participant’s eligibility for 

16 the child tax credit established under section 24 

17 of the Internal Revenue Code of 1986, the 

18 earned income tax credit established under sec19 tion 32 of such Code, and any other tax benefit 

20 established under such Code the eligibility for 

21 which is based on earned income; and 

22 (B) disregarded for purposes of deter23 mining the participant’s, the participant’s fam24 ily’s, or the participant’s household’s eligibility 

25 for, or amount of, assistance or benefits proVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
44 

•HR 2979 IH

1 vided under any means-tested program funded 

2 in whole or in part with Federal funds. 

3 (e) APPLICATION.— 

4 (1) REQUIREMENTS FOR ALL APPLICATIONS.— 

5 (A) IN GENERAL.—A State desiring to re6 ceive a grant to conduct a demonstration 

7 project under this section shall submit an appli8 cation— 

9 (i) to the Secretary of Health and 

10 Human Services, in the case of a grant 

11 under subsection (a); or 

12 (ii) to the Secretary of Labor, in the 

13 case of a grant under subsection (b); 

14 at such time, in such manner, and containing 

15 such information or assurances as the Secretary 

16 of Health and Human Services or the Secretary 

17 of Labor, as appropriate, may require. 

18 (B) COMPLIANCE WITH WORKER PROTEC19 TIONS AND LABOR STANDARDS.—The applica20 tion shall include an assurance that the State 

21 and any entity conducting a program or activity 

22 under the project shall comply with the worker 

23 protections and labor standards established in 

24 accordance with such protections under sub25 section (d). 


jlentini on PROD1PC65 with BILLS
45 

•HR 2979 IH

1 (C) NONDISCRIMINATION.—The applica2 tion shall include an assurance that the State 

3 and any entity conducting a program or activity 

4 under the demonstration project shall comply 

5 with section 188(a)(2) of the Workforce Invest6 ment Act of 1998 (29 U.S.C. 2938(a)(2)) to 

7 the same extent that such section would apply 

8 to the entity if the program or activity con9 ducted under the demonstration project was 

10 considered to be funded or otherwise financially 

11 assisted under that Act. 

12 (D) ASSURANCE GRANT WILL SUPPLE13 MENT, NOT SUPPLANT, OTHER STATE FUND14 ING.—The application shall include an assur15 ance from the chief executive officer of the 

16 State that funds made available under the 

17 grant will supplement, and not supplant, other 

18 funds used by the State to establish or support 

19 employment placements for low-income parents. 

20 (2) SPECIFIC DEMONSTRATION PROJECT RE21 QUIREMENTS.— 

22 (A) COURT-SUPERVISED OR IV–D AGENCY23 SUPERVISED EMPLOYMENT PROGRAMS FOR

24 NONCUSTODIAL PARENTS.—In order to conduct 

25 a demonstration project described in subsection 


jlentini on PROD1PC65 with BILLS
46 

•HR 2979 IH

1 (a), a State shall include in the application sub2 mitted to the Secretary of Health and Human 

3 Services the following: 

4 (i) Evidence of an agreement between 

5 the State and 1 or more counties to estab6 lish an employment program that meets 

7 the requirements of subsection (a). 

8 (ii) The number of potential noncusto9 dial parents to be served by the program. 

10 (iii) The purposes specific to that 

11 State’s program. 

12 (iv) The median income of the target 

13 population. 

14 (B) PUBLIC-PRIVATE CAREER PATHWAYS

15 PARTNERSHIPS.—In order to conduct a dem16 onstration project described in paragraph (2) of 

17 subsection (b), a State shall include in the ap18 plication submitted to the Secretary of Labor a 

19 description of— 

20 (i) the number, characteristics, and 

21 employment and earnings status of dis22 advantaged individuals in the State or ap23 plicable region where the program is to be 

24 conducted; 


jlentini on PROD1PC65 with BILLS
47 

•HR 2979 IH

1 (ii) which business and industry sec2 tors, or occupational clusters that cut 

3 across sectors, will be targeted by the ca4 reer pathways partnership, based on over5 all economic benefit to the community, the 

6 current and future demand for workers, 

7 the advancement opportunities for workers, 

8 the wages at each step of the career path9 way, and availability of worker benefits; 

10 (iii) the interventions that will be put 

11 in place to address any educational defi12 cits, limited English proficiency, or learn13 ing disabilities of individuals who partici14 pate in the program and to ensure that 

15 such individuals have the academic, tech16 nical, communications, and other job skills 

17 to function in the jobs targeted by the 

18 partnership; 

19 (iv) how the members of the partner20 ship will collaborate on the development of 

21 curriculum and delivery of training that 

22 will provide the necessary occupational, 

23 academic and other work-related skills and 

24 credentialing needed for the specific labor 

25 market areas; 


jlentini on PROD1PC65 with BILLS
48 

•HR 2979 IH

1 (v) the supports that will be used to 

2 provide counseling, mentoring or other 

3 support to individuals while in training or 

4 to assist them in navigating in complicated 

5 work environments; 

6 (vi) the set of career exposure activi7 ties that will be put in place to provide 

8 hands-on experience such as work experi9 ence, on the job training, internships, or 

10 work-study; 

11 (vii) the agreements that are in place 

12 with employers, industry groups, and labor 

13 organizations, where applicable, to ensure 

14 access to jobs and advancement opportuni15 ties in the targeted businesses, industry, or 

16 occupations; 

17 (viii) how the workforce education 

18 providers in the partnership will assess the 

19 employment barriers and needs of local 

20 disadvantaged individuals who participate 

21 in the program and will identify resources 

22 for meeting those needs; 

23 (ix) how the workforce education pro24 viders will work with partnership employ25 ers, business and industry groups, labor 


jlentini on PROD1PC65 with BILLS
49 

•HR 2979 IH

1 organizations, where applicable, and local 

2 economic development organizations to 

3 identify the priority workforce needs of the 

4 local industry; 

5 (x) how the partnerships will ensure 

6 that the appropriate program delivery 

7 models and formal agreements are in place 

8 to ensure maximum benefits to the individ9 uals receiving career pathway partnership 

10 services and to the employers and labor or11 ganizations, where applicable, in the part12 nership and the industries or businesses 

13 they represent; 

14 (xi) how partnership employers and 

15 labor organizations, where applicable, will 

16 be actively involved in identifying specific 

17 workforce education needs, planning the 

18 curriculum, assisting in training activities, 

19 providing job opportunities, and coordi20 nating job retention for individuals hired 

21 after training through the program and 

22 followup support; and 

23 (xii) how the partnership will build on 

24 existing career pathways programs, where 


jlentini on PROD1PC65 with BILLS
50 

•HR 2979 IH

1 applicable, to serve the targeted popu2 lation. 

3 (3) APPLICATIONS BY INDIAN TRIBES OR TRIB4 AL ORGANIZATIONS.—The Secretary of Health and 

5 Human Services and the Secretary of Labor may ex6 empt an Indian tribe or tribal organization from any 

7 requirement of this section that the Secretary of 

8 Health and Human Services or the Secretary of 

9 Labor determines would be inappropriate to apply to 

10 the Indian tribe or tribal organization, taking into 

11 account the resources, needs, and other cir12 cumstances of the Indian tribe or tribal organiza13 tion. 

14 (f) PRIORITIES AND REQUIREMENTS FOR AWARDING

15 GRANTS.— 

16 (1) IN GENERAL.—Subject to paragraphs (2) 

17 and (3), the Secretary of Health and Human Serv18 ices (in the case of a grant under subsection (a)) 

19 and the Secretary of Labor (in the case of a grant 

20 under subsection (b)) shall give priority to making 

21 grants under this section to entities that— 

22 (A) demonstrate success with respect to 

23 meeting the goals of quality job placement, 

24 long-term unsubsidized job retention, and, 

25 where applicable, increasing child support payVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
51 

•HR 2979 IH

1 ments, decreasing unpaid child support arrear2 ages, and increasing the involvement of low-in3 come noncustodial parents with their children 

4 through their participation in responsible fa5 therhood activities, including participation in 

6 programs that provide culturally relevant cur7 ricula in core subjects including— 

8 (i) conducting activities with children; 

9 (ii) improving communication skills; 

10 (iii) child support management; 

11 (iv) providing financially for the fam12 ily’s security and well-being; 

13 (v) managing stress and anger; 

14 (vi) maintaining physical and mental 

15 health; 

16 (vii) parenting and relationship skills; 

17 (viii) child development; and 

18 (ix) barriers to responsible parent19 hood, including substance abuse, unem20 ployment, criminal justice system involve21 ment, and inadequate housing; and 

22 (B) coordinate with, and link individuals 

23 as applicable to, other public and private bene24 fits and employment services for low-income 

25 adults among the different systems or programs 


jlentini on PROD1PC65 with BILLS
52 

•HR 2979 IH

1 in which such adults are involved, including the 

2 criminal justice system, the State programs 

3 funded under each part of title IV of the Social 

4 Security Act (42 U.S.C. 601 et seq.) (including 

5 programs and activities funded under section 

6 403(a)(2) of the Social Security Act (42 U.S.C. 

7 603(a)(2)), educational assistance and student 

8 aid programs, and job training or employment 

9 programs, including State employment agencies. 

10 (2) PERFORMANCE MEASURES.—In making 

11 grants under this section, the Secretary of Health 

12 and Human Services (in the case of a grant under 

13 subsection (a)) and the Secretary of Labor (in the 

14 case of a grant under subsection (b)) shall ensure 

15 that grantees demonstrate a plan for implementing 

16 measures to track their performance with respect to 

17 meeting the goals of quality job placement, long18 term unsubsidized job retention, and, where applica19 ble, increasing child support payments, decreasing 

20 child support arrearages, and increasing the involve21 ment of low-income noncustodial parents with their 

22 children. 

23 (3) REFLECTIVE OF TARGET POPULATIONS.— 

24 In making grants under this section, the Secretary 

25 of Health and Human Services (in the case of a 


jlentini on PROD1PC65 with BILLS
53 

•HR 2979 IH

1 grant under subsection (a)) and the Secretary of 

2 Labor (in the case of a grant under subsection (b)) 

3 shall give priority to States with proposed dem4 onstration projects that are designed to target low5 income adults, including custodial and noncustodial 

6 parents, and low-income married couples. 

7 (4) SUBSTANTIAL FUNDING FOR EACH OF THE

8 PURPOSES.—In making grants under subsection (b), 

9 the Secretary of Labor shall ensure that a substan10 tial share of the amount appropriated under sub11 section (j) for a fiscal year is used for carrying out 

12 each of the projects described in paragraphs (1) and 

13 (2) of subsection (b). 

14 (g) REGULATORY AND POLICY FLEXIBILITY.—The 

15 Secretary of Labor and the Secretary of Health and 

16 Human Services, in coordination with the Secretary of 

17 Education and the Attorney General, shall work with 

18 grantees under this section to resolve policy barriers that 

19 may impede blending of Federal resources to support 

20 these demonstration projects. 

21 (h) EVALUATION.—The Secretary of Health and 

22 Human Services (in the case of a grant under subsection 

23 (a)) and the Secretary of Labor (in the case of a grant 

24 under subsection (b)) shall provide for an independent and 

25 rigorous evaluation of the demonstration projects conVerDate Nov 24 2008 23:03 Jun 21, 2009 Jkt 079200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\H2979.IH H2979

jlentini on PROD1PC65 with BILLS
54 

•HR 2979 IH

1 ducted under this section that includes, to the maximum 

2 extent feasible, random assignment or other appropriate 

3 statistical techniques, in order to assess the effectiveness 

4 of the projects. 

5 (i) GENERAL DEFINITIONS.—In this section: 

6 (1) STATE.—The term ‘‘State’’ means each of 

7 the 50 States, the District of Columbia, the Com8 monwealth of Puerto Rico, the United States Virgin 

9 Islands, Guam, American Samoa, and includes an 

10 Indian tribe or tribal organization. 

11 (2) IV–D AGENCY.—The term ‘‘IV–D agency’’ 

12 means the State or local agency responsible for ad13 ministering the State program established under 

14 part D of title IV of the Social Security Act (42 

15 U.S.C. 651 et seq.). 

16 (3) INDIAN TRIBE; TRIBAL ORGANIZATION.— 

17 The terms ‘‘Indian tribe’’ and ‘‘tribal organization’’ 

18 have the meaning given such terms in section 4 of 

19 the Indian Self-Determination and Education Assist20 ance Act (25 U.S.C. 450b). 

21 (j) APPROPRIATION.—Out of any money in the 

22 Treasury of the United States not otherwise appropriated, 

23 there are appropriated to carry out this section— 

24 (1) for programs administered by the Secretary 

25 of Health and Human Services under subsection (a), 


jlentini on PROD1PC65 with BILLS
55 

•HR 2979 IH

1 $15,000,000 for each of fiscal years 2011 through 

2 2015; and 

3 (2) for programs administered by the Secretary 

4 of Labor under subsection (b), $35,000,000 for each 

5 of fiscal years 2011 through 2015. 

6 SEC. 103. HEALTHY MARRIAGE PROMOTION AND RESPON7 SIBLE FATHERHOOD PROGRAMS. 

8 (a) ENSURING FUNDING FOR RESPONSIBLE FA9 THERHOOD PROGRAMS.—Section 403(a)(2)(C) of the So10 cial Security Act (42 U.S.C. 603(a)(2)(C)) is amended— 

11 (1) in the subparagraph heading, by striking 

12 ‘‘LIMITATION ON USE OF’’ and inserting ‘‘REQUIRE13 MENT TO USE CERTAIN’’; and 

14 (2) in clause (i), by striking ‘‘may not award 

15 more than $50,000,000’’ and inserting ‘‘shall award 

at least 1 16 ⁄2 of the amounts’’. 

17 (b) VOLUNTARY PARTICIPATION.— 

18 (1) ASSURANCE.—Section 403(a)(2)(A)(ii)(II) 

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

20 603(a)(2)(A)(ii)(II)) is amended— 

21 (A) in item (aa), by striking ‘‘and’’ at the 

22 end; 

23 (B) in item (bb), by striking the period at 

24 the end and inserting a semicolon; and 


jlentini on PROD1PC65 with BILLS
56 

•HR 2979 IH

1 (C) by adding at the end the following new 

2 items: 

3 ‘‘(cc) if the entity is a State 

4 or an Indian tribe or tribal orga5 nization, to not condition the re6 ceipt of assistance under the pro7 gram funded under this part, 

8 under a program funded with 

9 qualified State expenditures (as 

10 defined in section 

11 409(a)(7)(B)(i)), or under any 

12 other program funded under this 

13 title on enrollment in any such 

14 programs or activities; and 

15 ‘‘(dd) to permit any indi16 vidual who has begun to partici17 pate in a particular program or 

18 activity funded under this para19 graph, including an individual 

20 whose participation is specified in 

21 the individual responsibility plan 

22 developed for the individual in 

23 accordance with section 408(b), 

24 to transfer to another such pro25 gram or activity funded under 


jlentini on PROD1PC65 with BILLS
57 

•HR 2979 IH

1 this paragraph upon notification 

2 to the entity and the State agen3 cy responsible for administering 

4 the State program funded under 

5 this part.’’. 

6 (2) PROHIBITION.—Section 408(a) of such Act 

7 (42 U.S.C. 608(a)) is amended by adding at the end 

8 the following: 

9 ‘‘(12) BAN ON CONDITIONING RECEIPT OF

10 TANF OR CERTAIN OTHER BENEFITS ON PARTICIPA11 TION IN A HEALTHY MARRIAGE OR RESPONSIBLE

12 FATHERHOOD PROGRAM.—A State to which a grant 

13 is made under section 403 shall not condition the re14 ceipt of assistance under the State program funded 

15 under this part, under a program funded with quali16 fied State expenditures (as defined in section 

17 409(a)(7)(B)(i)), or under any other program fund18 ed under this title, on participation in a healthy 

19 marriage promotion activity (as defined in section 

20 403(a)(2)(A)(iii)) or in an activity promoting re21 sponsible fatherhood (as defined in section 

22 403(a)(2)(C)(ii)).’’. 

23 (3) PENALTY.—Section 409(a) of such Act (42 

24 U.S.C. 609(a)) is amended by adding at the end the 

25 following: 


jlentini on PROD1PC65 with BILLS
58 

•HR 2979 IH

1 ‘‘(16) PENALTY FOR CONDITIONING RECEIPT

2 OF TANF OR CERTAIN OTHER BENEFITS ON PARTICI3 PATION IN A HEALTHY MARRIAGE OR RESPONSIBLE

4 FATHERHOOD PROGRAM.—If the Secretary deter5 mines that a State has violated section 408(a)(12) 

6 during a fiscal year, the Secretary shall reduce the 

7 grant payable to the State under section 403(a)(1) 

8 for the immediately succeeding fiscal year by an 

9 amount equal to 5 percent of the State family assist10 ance grant.’’. 

11 (c) ACTIVITIES PROMOTING RESPONSIBLE FATHER12 HOOD.—Section 403(a)(2)(C)(ii) of the Social Security 

13 Act (42 U.S.C. 603(a)(2)(C)(ii)) is amended— 

14 (1) in subclause (I), by striking ‘‘marriage or 

15 sustain marriage’’ and insert ‘‘healthy relationships 

16 and marriages or to sustain healthy relationships or 

17 marriages’’; 

18 (2) in subclause (II), by inserting ‘‘educating 

19 youth who are not yet parents about the economic, 

20 social, and family consequences of early parenting, 

21 helping participants in fatherhood programs work 

22 with their own children to break the cycle of early 

23 parenthood,’’ after ‘‘child support payments,’’; and 

24 (3) in subclause (III), by striking ‘‘fathers’’ and 

25 inserting ‘‘low-income fathers and other low-income 


jlentini on PROD1PC65 with BILLS
59 

•HR 2979 IH

1 noncustodial parents who are not eligible for assist2 ance under the State program funded under this 

3 part’’. 

4 (d) REAUTHORIZATION.—Section 403(a)(2)(D) of 

5 such Act (42 U.S.C. 603(a)(2)(D)) is amended by striking 

6 ‘‘2006 through 2010’’ and inserting ‘‘2011 through 

7 2015’’. 

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

9 this section shall take effect on October 1, 2010. 

10 SEC. 104. ELIMINATION OF SEPARATE TANF WORK PAR11 TICIPATION RATE FOR 2-PARENT FAMILIES. 

12 (a) IN GENERAL.—Section 407 of the Social Security 

13 Act (42 U.S.C. 607) is amended— 

14 (1) in subsection (a)— 

15 (A) beginning in the heading, by striking 

16 ‘‘PARTICIPATION RATE REQUIREMENTS’’ and 

17 all that follows through ‘‘A State’’ in paragraph 

18 (1) and inserting ‘‘PARTICIPATION RATE RE19 QUIREMENTS.—A State’’; and 

20 (B) by striking paragraph (2); 

21 (2) in subsection (b)— 

22 (A) in paragraph (1)(A), by striking ‘‘sub23 section (a)(1)’’ and inserting ‘‘subsection (a)’’; 

24 (B) in paragraph (2), by striking the para25 graph heading and all that follows through ‘‘A 


jlentini on PROD1PC65 with BILLS
60 

•HR 2979 IH

1 family’’ and inserting ‘‘SPECIAL RULE.—A fam2 ily’’; 

3 (C) in paragraph (4), by striking ‘‘para4 graphs (1)(B) and (2)(B)’’ and inserting ‘‘de5 termining monthly participation rates under 

6 paragraph (1)(B)’’; and 

7 (D) in paragraph (5), by striking ‘‘rates’’ 

8 and inserting ‘‘rate’’; and 

9 (3) in subsection (c)— 

10 (A) in paragraph (1)(B), in the matter 

11 preceding clause (i), by striking ‘‘subsection 

12 (b)(2)(B)’’ and inserting ‘‘subsection 

13 (b)(1)(B)(i)’’; and 

14 (B) in paragraph (2)(D)— 

15 (i) by striking ‘‘paragraphs (1)(B)(i) 

16 and (2)(B) of subsection (b)’’ and insert17 ing ‘‘subsection (b)(1)(B)(i)’’; and 

18 (ii) by striking ‘‘and in 2-parent fami19 lies, respectively,’’. 

20 (b) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—The amendments made by 

22 subsection (a) shall take effect on the date of enact23 ment of this Act and shall apply to the determina24 tion of minimum participation rates for months be25 ginning on or after that date. 


jlentini on PROD1PC65 with BILLS
61 

•HR 2979 IH

1 (2) LIMITATION ON PENALTY IMPOSITION.— 

2 Notwithstanding section 409(a)(3) of the Social Se3 curity Act, the Secretary of Health and Human 

4 Services shall not impose a penalty against a State 

5 under that section on the basis of the State’s failure 

6 to satisfy the participation rate required for any of 

7 fiscal years 2006 through 2009 if the State dem8 onstrates that the State would have met such re9 quirement if, with respect to those months of any of 

10 such fiscal years that began prior to or on the date 

11 of enactment of this Act, the State were permitted 

12 to count 2-parent families that met the requirements 

13 of section 407(c)(1)(A) of the Social Security Act 

14 (42 U.S.C. 607(c)(1)(A)) in the determination of 

15 monthly participation rates under section 

16 407(b)(1)(B)(i) of such Act (42 U.S.C. 

17 607(b)(1)(B)(i)). 

18 SEC. 105. BAN ON RECOVERY OF MEDICAID COSTS FOR 

19 BIRTHS. 

20 (a) BAN ON RECOVERY.— 

21 (1) IN GENERAL.—Section 454 of the Social 

22 Security Act (42 U.S.C. 654), is amended— 

23 (A) by striking ‘‘and’’ at the end of para24 graph (32); 


jlentini on PROD1PC65 with BILLS
62 

•HR 2979 IH

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

2 paragraph (33) and inserting a semicolon; and 

3 (C) by inserting after paragraph (33) the 

4 following: 

5 ‘‘(34) provide that, except as provided in sec6 tion 1902(a)(25)(F)(ii), the State shall not use the 

7 State program operated under this part to collect 

8 any amount owed to the State by reason of costs in9 curred under the State plan approved under title 

10 XIX for the birth of a child for whom support rights 

11 have been assigned pursuant to section 471(a)(17) 

12 or 1912; and’’. 

13 (2) RULE OF CONSTRUCTION.—Nothing in sec14 tion 454(34) of the Social Security Act (42 U.S.C. 

15 654(34)), as added by paragraph (1), shall be con16 strued as affecting the application of section 

17 1902(a)(25) of such Act (42 U.S.C. 1396a(a)(25)) 

18 with respect to a State (relating to the State Med19 icaid plan requirement for the State to take all rea20 sonable measures to ascertain the legal liability of 

21 third parties to pay for care and services available 

22 under the plan). 

23 (3) REPEAL OF CERTAIN DRA AMENDMENTS.— 

24 For provisions repealing amendments to section 454 

25 of the Social Security Act made by section 


jlentini on PROD1PC65 with BILLS
63 

•HR 2979 IH

1 7301(b)(1)(C) of the Deficit Reduction Act of 2005, 

2 see section 106(a)(3) of this Act. 

3 (b) CLARIFICATION THAT BAN ON RECOVERY DOES

4 NOT APPLY WITH RESPECT TO INSURANCE OF A PARENT

5 WITH AN OBLIGATION TO PAY CHILD SUPPORT.—Clause 

6 (ii) of section 1902(a)(25)(F) of the Social Security Act 

7 (42 U.S.C. 1396a(a)(25)(F)) is amended by inserting 

8 ‘‘only if such third-party liability is derived through insur9 ance,’’ before ‘‘seek’’. 

10 (c) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section 

13 take effect on October 1, 2009. 

14 (2) EXTENSION OF EFFECTIVE DATE FOR

15 STATE LAW AMENDMENT.—In the case of a State 

16 plan under title XIX of the Social Security Act (42 

17 U.S.C. 1396 et seq.) which the Secretary of Health 

18 and Human Services determines requires State legis19 lation in order for the plan to meet the additional 

20 requirements imposed by the amendments made by 

21 this section, the State plan shall not be regarded as 

22 failing to comply with the requirements of such title 

23 solely on the basis of its failure to meet these addi24 tional requirements before the first day of the first 

25 calendar quarter beginning after the close of the 


jlentini on PROD1PC65 with BILLS
64 

•HR 2979 IH

1 first regular session of the State legislature that be2 gins after the date of enactment of this Act. For 

3 purposes of the previous sentence, in the case of a 

4 State that has a 2-year legislative session, each year 

5 of the session is considered to be a separate regular 

6 session of the State legislature. 

7 SEC. 106. IMPROVED COLLECTION AND DISTRIBUTION OF 

8 CHILD SUPPORT. 

9 (a) DISTRIBUTION OF CHILD SUPPORT.— 

10 (1) FULL DISTRIBUTION OF CHILD SUPPORT

11 COLLECTED; REFORM OF RULES FOR DISTRIBUTION

12 OF CHILD SUPPORT COLLECTED ON BEHALF OF

13 CHILDREN IN FOSTER CARE.— 

14 (A) IN GENERAL.—Section 457 of the So15 cial Security Act (42 U.S.C. 657) is amended— 

16 (i) by striking subsection (a) and in17 serting the following: 

18 ‘‘(a) FULL DISTRIBUTION OF AMOUNTS COLLECTED

19 ON BEHALF OF ANY FAMILY.—Subject to subsection (c), 

20 the entire amount collected on behalf of any family as sup21 port by a State pursuant to a plan approved under this 

22 part shall be paid by the State to the family.’’; and 

23 (ii) by striking subsections (c) 

24 through (e) and inserting the following: 


jlentini on PROD1PC65 with BILLS
65 

•HR 2979 IH

1 ‘‘(c) AMOUNTS COLLECTED FOR CHILD FOR WHOM

2 FOSTER CARE MAINTENANCE PAYMENTS ARE MADE.— 

3 Notwithstanding the preceding provisions of this section, 

4 amounts collected by a State as child support for months 

5 in any period on behalf of a child for whom a public agen6 cy is making foster care maintenance payments under part 

7 E shall be paid to the public agency responsible for super8 vising the placement of the child, which may use the pay9 ments in the manner it determines will serve the best in10 terests of the child, including setting such payments aside 

11 for the child’s future needs or use.’’. 

12 (B) FOSTER CARE STATE PLAN AMEND13 MENT.—Section 471(a)(17) of the Social Secu14 rity Act (42 U.S.C. 671(a)(17)) is amended— 

15 (i) by inserting ‘‘and consistent with 

16 the child’s case plan’’ after ‘‘where appro17 priate’’; and 

18 (ii) by striking ‘‘secure an assignment 

19 to the State of any rights to support’’ and 

20 inserting ‘‘establish paternity and estab21 lish, modify, and enforce child support ob22 ligations’’. 

23 (C) SOCIAL SECURITY ACT AMEND24 MENTS.— 


jlentini on PROD1PC65 with BILLS
66 

•HR 2979 IH

1 (i) CHILD SUPPORT STATE PLAN

2 AMENDMENT.—Section 454 of the Social 

3 Security Act (42 U.S.C. 654), as amended 

4 by section 104(a)(1) of this Act, is amend5 ed by inserting after paragraph (34) the 

6 following: 

7 ‘‘(35) provide that a State shall pay all col8 lected child support to the payee, except as provided 

9 in section 457(c).’’. 

10 (ii) DISBURSEMENT OF SUPPORT PAY11 MENTS.—Section 454B(c) of the Social Se12 curity Act (42 U.S.C. 654b(c)) is amended 

13 by adding at the end the following new 

14 paragraph: 

15 ‘‘(3) DISBURSEMENT TO FAMILIES.—The State 

16 disbursement unit shall pay all collected child sup17 port to the payee, except as otherwise provided in 

18 section 457.’’. 

19 (2) CONFORMING AMENDMENTS.— 

20 (A) Section 409(a)(7)(B)(i)(I)(aa) of such 

21 Act (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is 

22 amended by striking ‘‘457(a)(1)(B)’’ and in23 serting ‘‘457(a)’’. 


jlentini on PROD1PC65 with BILLS
67 

•HR 2979 IH

1 (B) Section 454(5) of such Act (42 U.S.C. 

2 654(5)) is amended by striking ‘‘(A) in any 

3 case’’ and all that follows through ‘‘(B)’’. 

4 (C) Section 466(a)(3)(B) of such Act (42 

5 U.S.C. 666(a)(3)(B)) is amended— 

6 (i) by striking ‘‘shall be distributed in 

7 accordance with section 457 in the case of 

8 overdue support assigned to a State pursu9 ant to section 408(a)(3) or 471(a)(17), or, 

10 in any other case,’’; and 

11 (ii) and inserting ‘‘or to the public 

12 agency responsible for supervising the 

13 placement of the child, which may use the 

14 payments in the manner the public agency 

15 determines will serve the best interest of 

16 the child’’ before the semicolon. 

17 (3) REPEAL OF CERTAIN DRA AMENDMENTS.— 

18 Effective on the date of enactment of this Act, sub19 sections (a) and (b) of section 7301 of the Deficit 

20 Reduction Act of 2005 (Public Law 109–171; 120 

21 Stat. 141) are repealed and parts A and D of title 

22 IV of the Social Security Act shall be applied as if 

23 the amendments made by such subsections had not 

24 been enacted. 


jlentini on PROD1PC65 with BILLS
68 

•HR 2979 IH

1 (b) PROHIBITION ON CONDITIONING RECEIPT OF

2 TANF ON ASSIGNMENT OF SUPPORT.—Section 408(a)(3) 

3 of the Social Security Act (42 U.S.C. 608(a)(3)) is amend4 ed— 

5 (1) in the paragraph heading, by striking ‘‘NO

6 ASSISTANCE FOR FAMILIES NOT’’ and inserting 

7 ‘‘PROHIBITION ON CONDITIONING ASSISTANCE FOR

8 FAMILIES ON’’; 

9 (2) by inserting ‘‘not’’ after ‘‘shall’’; 

10 (3) by inserting ‘‘or under a program funded 

11 with qualified State expenditures (as defined in sec12 tion 409(a)(7)(B)(i))’’ after ‘‘this part’’; and 

13 (4) by striking ‘‘, not exceeding the total 

14 amount of assistance so paid to the family,’’. 

15 (c) REQUIREMENT TO DISREGARD PERCENTAGE OF

16 CHILD SUPPORT COLLECTED IN DETERMINING AMOUNT

17 AND TYPE OF TANF ASSISTANCE.—Section 408(a) of the 

18 Social Security Act (42 U.S.C. 608(a)) is amended by add19 ing at the end the following new paragraph: 

20 ‘‘(12) REQUIREMENT TO DISREGARD PERCENT21 AGE OF CHILD SUPPORT COLLECTED IN DETER22 MINING AMOUNT AND TYPE OF TANF ASSISTANCE.— 

23 A State to which a grant is made under section 403 

24 shall disregard at least the same percentage of 

25 amounts collected as support on behalf of a family 


jlentini on PROD1PC65 with BILLS
69 

•HR 2979 IH

1 as the percentage of earned income that the State 

2 disregards, in determining the amount or type of as3 sistance provided to the family under the State pro4 gram funded under this part or under a program 

5 funded with qualified State expenditures (as defined 

6 in section 409(a)(7)(B)(i)).’’. 

7 (d) RESTORATION OF FEDERAL FUNDING.—Effec8 tive on the date of enactment of this Act, section 7309 

9 of the Deficit Reduction Act of 2005 (Public Law 109– 

10 171; 120 Stat. 147) is repealed and part D of title IV 

11 of the Social Security Act shall be applied as if the amend12 ment made by subsection (a) of that section had not been 

13 enacted. 

14 (e) REPEAL OF MANDATORY FEE FOR CHILD SUP15 PORT COLLECTION.—Effective on the date of enactment 

16 of this Act, section 7310 of the Deficit Reduction Act of 

17 2005 (Public Law 109–171; 120 Stat. 147) is repealed 

18 and part D of title IV of the Social Security Act shall 

19 be applied as if the amendments made by that section had 

20 not been enacted. 

21 (f) PROHIBITION ON CONSIDERING A PERIOD OF IN22 CARCERATION VOLUNTARY UNEMPLOYMENT.—Section 

23 466(a) of the Social Security Act (42 U.S.C. 666(a)) is 

24 amended by inserting after paragraph (19) the following: 


jlentini on PROD1PC65 with BILLS
70 

•HR 2979 IH

1 ‘‘(20) PROCEDURES RELATING TO PERIODS OF

2 INCARCERATION OF NONCUSTODIAL PARENTS.— 

3 ‘‘(A) IN GENERAL.—Procedures which re4 quire that, in determining or modifying the 

5 amount of, or terms and conditions of, any sup6 port obligation of a noncustodial parent, the 

7 State— 

8 ‘‘(i) shall not consider any period of 

9 incarceration of such parent as a period of 

10 voluntary unemployment that disqualifies 

11 the parent from obtaining a modification 

12 of the support obligation consistent with 

13 the parent’s ability to pay child support; 

14 and 

15 ‘‘(ii) subject to subparagraph (B) in 

16 the case of an incarcerated parent, may— 

17 ‘‘(I) temporarily suspend any 

18 support obligation on the parent and 

19 the enforcement of any support obli20 gation of the parent existing prior to 

21 the period of incarceration; and 

22 ‘‘(II) temporarily prohibit the ac23 crual of any interest on any support 

24 obligation of the parent existing prior 


jlentini on PROD1PC65 with BILLS
71 

•HR 2979 IH

1 to the period of incarceration during 

2 any such period. 

3 ‘‘(B) NOTICE AND OPPORTUNITY TO CHAL4 LENGE SUSPENSION.—Such procedures shall re5 quire the State to provide a custodial parent 

6 with— 

7 ‘‘(i) notice of any suspension of re8 view, adjustment, or enforcement of a sup9 port obligation and of any prohibition on 

10 interest accrual on such obligation that is 

11 imposed in accordance with subparagraph 

12 (A)(ii); and 

13 ‘‘(ii) an opportunity to request that 

14 the suspension or prohibition be termi15 nated or modified on the basis that the 

16 noncustodial parent has sufficient income 

17 or resources to continue payment of the 

18 support obligation during the noncustodial 

19 parent’s period of incarceration.’’. 

20 (g) REVIEW AND ADJUSTMENT OF CHILD SUPPORT

21 ARREARAGES UPON REQUEST.—Section 466(a)(10) of 

22 the Social Security Act (42 U.S.C. 666(a)(10)) is amend23 ed by adding at the end the following: 

24 ‘‘(D) REVIEW AND ADJUSTMENT OF AR25 REARAGES.—Procedures which require the 


jlentini on PROD1PC65 with BILLS
72 

•HR 2979 IH

1 State to review, and if appropriate, reduce the 

2 balance of arrearages permanently assigned to 

3 the State under part A or E of this title, or 

4 under title XIX, pursuant to standards and 

5 procedures established by the State, in cases 

6 where the obligor lacks sufficient ability to pay 

7 the arrears, adjustment will promote timely 

8 payment of current support, or barriers, such 

9 as incarceration, may have limited the ability of 

10 the obligor to timely seek a modification of the 

11 order, and it is in the best interests of the child 

12 to make such reduction. Nothing in the pre13 ceding sentence shall be construed as affecting 

14 arrearages that have not been permanently as15 signed to the State under any such part or 

16 title.’’. 

17 (h) STUDY AND REPORT.—Not later than October 1, 

18 2012, the Secretary of Health and Human Services shall 

19 study and submit a report to Congress regarding the fol20 lowing: 

21 (1) The effect of age eligibility restrictions for 

22 the earned income tax credit established under sec23 tion 32 of the Internal Revenue Code of 1986 for in24 dividuals without qualifying children on— 


jlentini on PROD1PC65 with BILLS
73 

•HR 2979 IH

1 (A) the ability of young parents to pay 

2 child support; 

3 (B) compliance with child support orders; 

4 and 

5 (C) the relationship between young non6 custodial parents and their children. 

7 (2) The impact of State earned income tax 

8 credit programs, especially such programs with tar9 geted benefits for noncustodial parents, on— 

10 (A) the ability of noncustodial parents to 

11 pay child support; 

12 (B) compliance with child support orders; 

13 and 

14 (C) the relationship between noncustodial 

15 parents and their children. 

16 (3) The challenges faced by legal immigrants 

17 and individuals for whom English is not their pri18 mary language in fulfilling child support and other 

19 noncustodial parenting obligations. 

20 (i) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as otherwise pro22 vided in this section, the amendments made by this 

23 section shall take effect on October 1, 2009, and 

24 shall apply to payments under parts A and D of title 

25 IV of the Social Security Act for calendar quarters 


jlentini on PROD1PC65 with BILLS
74 

•HR 2979 IH

1 beginning on or after that date, and without regard 

2 to whether regulations to implement the amend3 ments are promulgated by such date. 

4 (2) STATE OPTION TO ACCELERATE EFFECTIVE

5 DATE.—Notwithstanding paragraph (1), a State 

6 may elect to have the amendments made by the pre7 ceding provisions of this section apply to the State 

8 and to amounts collected by the State (and to pay9 ments under parts A and D of title IV of such Act), 

10 on and after such date as the State may select that 

11 is not later than September 30, 2009. 

12 SEC. 107. COLLECTION OF CHILD SUPPORT UNDER THE 

13 SUPPLEMENTAL NUTRITION ASSISTANCE 

14 PROGRAM. 

15 (a) ENCOURAGEMENT OF COLLECTION OF CHILD

16 SUPPORT.—Section 5 of the Food and Nutrition Act of 

17 2008 (7 U.S.C. 2014) is amended— 

18 (1) in subsection (e)— 

19 (A) by redesignating paragraphs (5) and 

20 (6) as paragraphs (6) and (7), respectively; 

21 (B) in paragraph (4)(B), by striking 

22 ‘‘paragraph (6)’’ and inserting ‘‘paragraph 

23 (7)’’; and 

24 (C) by inserting after paragraph (4) the 

25 following: 


jlentini on PROD1PC65 with BILLS
75 

•HR 2979 IH

1 ‘‘(5) DEDUCTION FOR CHILD SUPPORT RE2 CEIVED.— 

3 ‘‘(A) IN GENERAL.—A household shall be 

4 allowed a deduction of 20 percent of all legally 

5 obligated child support payments received from 

6 an identified or putative parent of a child in the 

7 household if that parent is not a household 

8 member. 

9 ‘‘(B) ORDER OF DETERMINING DEDUC10 TIONS.—A deduction under this paragraph shall 

11 be determined before the computation of the ex12 cess shelter deduction under paragraph (7).’’; 

13 and 

14 (2) in subsection (k)(4)(B), by striking ‘‘sub15 section (e)(6)’’ and inserting ‘‘subsection (e)(7)’’; 

16 (b) SIMPLIFIED VERIFICATION OF CHILD SUPPORT

17 PAYMENTS.—Section 5(n) of the Food and Nutrition Act 

18 of 2008 (7 U.S.C. 2014(n)) is amended— 

19 (1) in the subsection heading, by striking 

20 ‘‘STATE OPTIONS TO SIMPLIFY’’, and inserting 

21 ‘‘SIMPLIFIED’’; and 

22 (2) by striking ‘‘Regardless of whether’’ and in23 serting the following: 

24 ‘‘(1) IN GENERAL.—A household that is paying 

25 legally obligated child support through the program 


jlentini on PROD1PC65 with BILLS
76 

•HR 2979 IH

1 under part D of title IV of the Social Security Act 

2 (42 U.S.C. 651 et seq.) shall receive— 

3 ‘‘(A) a deduction under subsection (e)(4); 

4 or 

5 ‘‘(B) an exclusion for paid child support 

6 under subsection (d)(3). 

7 ‘‘(2) STATE OPTIONS.—Regardless of whether’’. 

8 (c) INCLUSION OF ECONOMIC OPPORTUNITIES PRO9 GRAMS IN DEFINITION OF WORK PROGRAM.—Section 

10 6(o)(2) of the Food and Nutrition Act of 2008 (7 U.S.C. 

11 2015(o)(2)) is amended— 

12 (1) in subparagraph (C), by striking ‘‘or’’ at 

13 the end; 

14 (2) in subparagraph (D), by striking the period 

15 at the end and inserting ‘‘; or’’; and 

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

17 ‘‘(E) participate in and comply with the re18 quirements of a demonstration project under 

19 section 106 of the Julia Carson Responsible Fa20 therhood and Healthy Families Act of 2009;’’. 

21 (d) EFFECTIVE DATE.— 

22 (1) IN GENERAL.—This section and the amend23 ments made by this section take effect on October 

24 1, 2009. 


jlentini on PROD1PC65 with BILLS
77 

•HR 2979 IH

1 (2) STATE OPTION.—A State may implement 

2 the amendments made by subsections (a) and (b) for 

3 participating households at the first recertification of 

4 the households that occurs on or after October 1, 

5 2009. 

6 SEC. 108. GRANTS SUPPORTING HEALTHY FAMILY PART7 NERSHIPS FOR DOMESTIC VIOLENCE INTER8 VENTION AND PREVENTIONS. 

9 Section 403(a) of the Social Security Act (42 U.S.C. 

10 603(a)) is amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(6) GRANTS SUPPORTING HEALTHY FAMILY

13 PARTNERSHIPS FOR DOMESTIC VIOLENCE INTER14 VENTION AND PREVENTION.— 

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

16 award grants on a competitive basis to healthy 

17 family partnerships to develop and implement 

18 promising practices for— 

19 ‘‘(i) assessing and providing services 

20 to individuals and families affected by do21 mestic violence, including through case22 worker training, the provision of technical 

23 assistance to community partners, and the 

24 implementation of safe visitation and ex25 change programs; or 


jlentini on PROD1PC65 with BILLS
78 

•HR 2979 IH

1 ‘‘(ii) preventing domestic violence, 

2 particularly as a barrier to economic secu3 rity, and fostering healthy relationships. 

4 ‘‘(B) EDUCATION SERVICES.—In awarding 

5 grants under subparagraph (A), the Secretary 

6 shall ensure that 10 percent of the funds made 

7 available under such grants are used for high 

8 schools and other secondary educational institu9 tions and institutions of higher education to 

10 provide education services on the value of 

11 healthy relationships, responsible parenting, 

12 and healthy marriages characterized by mutual 

13 respect and nonviolence, and the importance of 

14 building relationships skills such as communica15 tion, conflict resolution, and budgeting. 

16 ‘‘(C) APPLICATION.—The respective entity 

17 and organization of a healthy family partner18 ship entered into for purposes of receiving a 

19 grant under this paragraph shall submit a joint 

20 application to the Secretary, at such time and 

21 in such manner as the Secretary shall specify, 

22 containing— 

23 ‘‘(i) a description of how the partner24 ship intends to carry out the activities de25 scribed in subparagraph (A); 


jlentini on PROD1PC65 with BILLS
79 

•HR 2979 IH

1 ‘‘(ii) an assurance that funds made 

2 available under the grant shall be used to 

3 supplement, and not supplant, other funds 

4 used by the entity or organization to carry 

5 out programs, activities, or services de6 scribed in subparagraph (A) or (B); and 

7 ‘‘(iii) such other information as the 

8 Secretary may require. 

9 ‘‘(D) GENERAL RULES GOVERNING USE OF

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

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

12 a grant made under this paragraph. 

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

14 ‘‘(i) DOMESTIC VIOLENCE.—The term 

15 ‘domestic violence’ has the meaning given 

16 that term in section 402(a)(7)(B). 

17 ‘‘(ii) HEALTHY FAMILY PARTNER18 SHIP.—The term ‘healthy family partner19 ship’ means a partnership between— 

20 ‘‘(I) an entity receiving funds 

21 under a grant made under paragraph 

22 (2) to promote healthy marriage or re23 sponsible fatherhood; and 


jlentini on PROD1PC65 with BILLS
80 

•HR 2979 IH

1 ‘‘(II) an organization with dem2 onstrated expertise working with sur3 vivors of domestic violence. 

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

5 in the Treasury of the United States not other6 wise appropriated, there are appropriated for 

7 each of fiscal years 2011 through 2015, 

8 $25,000,000 for purposes of awarding grants to 

9 healthy family partnerships under this para10 graph.’’. 

11 SEC. 109. PROCEDURES TO ADDRESS DOMESTIC VIOLENCE. 

12 (a) IN GENERAL.—Section 403(a)(2) of the Social 

13 Security Act (42 U.S.C. 603(a)(2)) is amended— 

14 (1) by redesignating subparagraph (D) as sub15 paragraph (F); and 

16 (2) by inserting after subparagraph (C) the fol17 lowing: 

18 ‘‘(D) REQUIREMENTS FOR RECEIPT OF

19 FUNDS.—An entity may not be awarded a grant 

20 under this paragraph unless the entity, as a 

21 condition of receiving funds under such a 

22 grant— 

23 ‘‘(i) identifies in its application for the 

24 grant the domestic violence experts at the 

25 local, State, or national level with whom 


jlentini on PROD1PC65 with BILLS
81 

•HR 2979 IH

1 the entity will consult in the development 

2 and implementation of the programs and 

3 activities of the entity; 

4 ‘‘(ii) on award of the grant, and in 

5 consultation with such domestic violence 

6 experts, develops a written protocol which 

7 describes— 

8 ‘‘(I) how the entity will identify 

9 instances or risks of domestic violence; 

10 ‘‘(II) the procedures for respond11 ing to such instances or risk, includ12 ing making service referrals and pro13 viding protections and appropriate as14 sistance for identified individuals and 

15 families; 

16 ‘‘(III) how confidentiality issues 

17 will be addressed; and 

18 ‘‘(IV) the domestic violence train19 ing that will be provided to ensure ef20 fective and consistent implementation 

21 of the protocol; and 

22 ‘‘(iii) in an annual report to the Sec23 retary, includes a description of the domes24 tic violence protocols, and a description of 

25 any implementation issues identified with 


jlentini on PROD1PC65 with BILLS
82 

•HR 2979 IH

1 respect to domestic violence and how the 

2 issues were addressed. 

3 ‘‘(E) DOMESTIC VIOLENCE DEFINED.—In 

4 this paragraph, the term ‘domestic violence’ has 

5 the meaning given that term in section 

6 402(a)(7)(B).’’. 

7 (b) CONFORMING AMENDMENTS.—Section 403(a)(2) 

8 of such Act (42 U.S.C. 603(a)(2)), as amended by section 

9 103(d) of this Act and subsection (a)(1) of this section, 

10 is amended— 

11 (1) in subparagraph (A)(i)— 

12 (A) by striking ‘‘(B) and (C)’’ and insert13 ing ‘‘(B), (C), and (D)’’; and 

14 (B) by striking ‘‘subparagraph (D)’’ and 

15 inserting ‘‘subparagraph (F)’’; 

16 (2) in subparagraphs (B)(i) and (C)(i), by 

17 striking ‘‘(D)’’ each place it appears and inserting 

18 ‘‘(F)’’; and 

19 (3) in subparagraph (F) (as so redesignated by 

20 subsection (a)(1) of this section), by striking 

21 ‘‘$150,000,000 for each of fiscal years 2011 through 

22 2015’’ and inserting ‘‘$150,000,000 for each of fis23 cal years 2011 and 2012 and $200,000,000 for each 

24 of fiscal years 2013 through 2015’’. 


jlentini on PROD1PC65 with BILLS
83 

•HR 2979 IH

1 TITLE II—REVENUE PROVISIONS 

2 SEC. 201. INCREASE IN CREDIT PERCENTAGE UNDER 

3 EARNED INCOME TAX CREDIT FOR ELIGIBLE 

4 INDIVIDUALS WITH NO QUALIFYING CHIL5 DREN. 

6 (a) IN GENERAL.—The row in the table in subpara7 graph (A) of section 32(b)(1) of the Internal Revenue 

8 Code of 1986 relating to no qualifying children is amended 

9 to read as follows: 

‘‘No qualifying children .......................................... 20 7.65’’. 

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

11 subsection (a) shall apply to taxable years beginning after 

12 December 31, 2009. 

13 SEC. 202. BROKER REPORTING OF CUSTOMER’S BASIS IN 

14 SECURITIES TRANSACTIONS. 

15 (a) IN GENERAL.—Section 6045 of the Internal Rev16 enue Code of 1986 (relating to returns of brokers) is 

17 amended to read as follows: 

18 ‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE

19 CASE OF SECURITIES TRANSACTIONS.— 

20 ‘‘(1) IN GENERAL.—If a broker is otherwise re21 quired to make a return under subsection (a) with 

22 respect to any applicable security, the broker shall 


jlentini on PROD1PC65 with BILLS
84 

•HR 2979 IH

1 include in such return the information described in 

2 paragraph (2). 

3 ‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 

4 ‘‘(A) IN GENERAL.—The information re5 quired under paragraph (1) to be shown on a 

6 return with respect to an applicable security of 

7 a customer shall include for each reported ap8 plicable security the customer’s adjusted basis 

9 in such security. 

10 ‘‘(B) EXEMPTION FROM REQUIREMENT.— 

11 The Secretary shall issue such regulations or 

12 guidance as necessary concerning the applica13 tion of the requirement under subparagraph (A) 

14 in cases in which a broker in making a return 

15 does not have sufficient information to meet 

16 such requirement with respect to the reported 

17 applicable security. Such regulations or guid18 ance may— 

19 ‘‘(i) require such other information re20 lated to such adjusted basis as the Sec21 retary may prescribe, and 

22 ‘‘(ii) exempt classes of cases in which 

23 the broker does not have sufficient infor24 mation to meet either the requirement 


jlentini on PROD1PC65 with BILLS
85 

•HR 2979 IH

1 under subparagraph (A) or the require2 ment under clause (i). 

3 ‘‘(3) INFORMATION TRANSFERS.—To the extent 

4 provided in regulations, there shall be such ex5 changes of information between brokers as such reg6 ulations may require for purposes of enabling such 

7 brokers to meet the requirements of this subsection. 

8 ‘‘(4) DEFINITIONS.—For purposes of this sub9 section, the term ‘applicable security’ means any— 

10 ‘‘(A) security described in subparagraph 

11 (A) or (C) of section 475(c)(2), 

12 ‘‘(B) interest in a regulated investment 

13 company (as defined in section 851), or 

14 ‘‘(C) other financial instrument designated 

15 in regulations prescribed by the Secretary.’’. 

16 (b) CONFORMING AMENDMENT.—Section 6045(h)(4) 

17 of such Code is amended by inserting ‘‘(as in effect on 

18 the date of the enactment of the Julia Carson Responsible 

19 Fatherhood and Healthy Families Act of 2009)’’ after 

20 ‘‘subsection (g)(3)’’. 

21 (c) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to returns the due date for which 

23 (determined without regard to extensions) is after Decem24 ber 31, 2009, with respect to securities acquired after De25 cember 31, 2008. 


jlentini on PROD1PC65 with BILLS
86 

•HR 2979 IH

1 SEC. 203. MODIFICATION OF EFFECTIVE DATE OF LEASING 

2 PROVISIONS OF THE AMERICAN JOBS CRE3 ATION ACT OF 2004. 

4 (a) LEASES TO FOREIGN ENTITIES.—Section 849(b) 

5 of the American Jobs Creation Act of 2004 is amended 

6 by adding at the end the following new paragraph: 

7 ‘‘(5) LEASES TO FOREIGN ENTITIES.—In the 

8 case of tax-exempt use property leased to a tax-ex9 empt entity which is a foreign person or entity, the 

10 amendments made by this part shall apply to taxable 

11 years beginning after December 31, 2006, with re12 spect to leases entered into on or before March 12, 

13 2004.’’. 

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

15 this section shall take effect as if included in the enact16 ment of the American Jobs Creation Act of 2004. 

17 SEC. 204. CLARIFICATION OF ECONOMIC SUBSTANCE DOC18 TRINE. 

19 (a) IN GENERAL.—Section 7701 of the Internal Rev20 enue Code of 1986 is amended by redesignating subsection 

21 (o) as subsection (p) and by inserting after subsection (n) 

22 the following new subsection: 

23 ‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE

24 DOCTRINE; ETC.— 

25 ‘‘(1) GENERAL RULES.— 


jlentini on PROD1PC65 with BILLS
87 

•HR 2979 IH

1 ‘‘(A) IN GENERAL.—In any case in which 

2 a court determines that the economic substance 

3 doctrine is relevant for purposes of this title to 

4 a transaction (or series of transactions), such 

5 transaction (or series of transactions) shall have 

6 economic substance only if the requirements of 

7 this paragraph are met. 

8 ‘‘(B) DEFINITION OF ECONOMIC SUB9 STANCE.—For purposes of subparagraph (A)— 

10 ‘‘(i) IN GENERAL.—A transaction has 

11 economic substance only if— 

12 ‘‘(I) the transaction changes in a 

13 meaningful way (apart from Federal 

14 tax effects) the taxpayer’s economic 

15 position, and 

16 ‘‘(II) the taxpayer has a substan17 tial nontax purpose for entering into 

18 such transaction and the transaction 

19 is a reasonable means of accom20 plishing such purpose. 

21 In applying subclause (II), a purpose of 

22 achieving a financial accounting benefit 

23 shall not be taken into account in deter24 mining whether a transaction has a sub25 stantial nontax purpose if the origin of 


jlentini on PROD1PC65 with BILLS
88 

•HR 2979 IH

1 such financial accounting benefit is a re2 duction of income tax. 

3 ‘‘(ii) SPECIAL RULE WHERE TAX4 PAYER RELIES ON PROFIT POTENTIAL.—A 

5 transaction shall not be treated as having 

6 economic substance by reason of having a 

7 potential for profit unless— 

8 ‘‘(I) the present value of the rea9 sonably expected pre-tax profit from 

10 the transaction is substantial in rela11 tion to the present value of the ex12 pected net tax benefits that would be 

13 allowed if the transaction were re14 spected, and 

15 ‘‘(II) the reasonably expected 

16 pre-tax profit from the transaction ex17 ceeds a risk-free rate of return. 

18 ‘‘(C) TREATMENT OF FEES AND FOREIGN

19 TAXES.—Fees and other transaction expenses 

20 and foreign taxes shall be taken into account as 

21 expenses in determining pre-tax profit under 

22 subparagraph (B)(ii). 

23 ‘‘(2) SPECIAL RULES FOR TRANSACTIONS WITH

24 TAX-INDIFFERENT PARTIES.— 


jlentini on PROD1PC65 with BILLS
89 

•HR 2979 IH

1 ‘‘(A) SPECIAL RULES FOR FINANCING

2 TRANSACTIONS.—The form of a transaction 

3 which is in substance the borrowing of money 

4 or the acquisition of financial capital directly or 

5 indirectly from a tax-indifferent party shall not 

6 be respected if the present value of the deduc7 tions to be claimed with respect to the trans8 action is substantially in excess of the present 

9 value of the anticipated economic returns of the 

10 person lending the money or providing the fi11 nancial capital. A public offering shall be treat12 ed as a borrowing, or an acquisition of financial 

13 capital, from a tax-indifferent party if it is rea14 sonably expected that at least 50 percent of the 

15 offering will be placed with tax-indifferent par16 ties. 

17 ‘‘(B) ARTIFICIAL INCOME SHIFTING AND

18 BASIS ADJUSTMENTS.—The form of a trans19 action with a tax-indifferent party shall not be 

20 respected if— 

21 ‘‘(i) it results in an allocation of in22 come or gain to the tax-indifferent party in 

23 excess of such party’s economic income or 

24 gain, or 


jlentini on PROD1PC65 with BILLS
90 

•HR 2979 IH

1 ‘‘(ii) it results in a basis adjustment 

2 or shifting of basis on account of over3 stating the income or gain of the tax-indif4 ferent party. 

5 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 

6 purposes of this subsection— 

7 ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.— 

8 The term ‘economic substance doctrine’ means 

9 the common law doctrine under which tax bene10 fits under subtitle A with respect to a trans11 action are not allowable if the transaction does 

12 not have economic substance or lacks a business 

13 purpose. 

14 ‘‘(B) TAX-INDIFFERENT PARTY.—The 

15 term ‘tax-indifferent party’ means any person 

16 or entity not subject to tax imposed by subtitle 

17 A. A person shall be treated as a tax-indifferent 

18 party with respect to a transaction if the items 

19 taken into account with respect to the trans20 action have no substantial impact on such per21 son’s liability under subtitle A. 

22 ‘‘(C) EXCEPTION FOR PERSONAL TRANS23 ACTIONS OF INDIVIDUALS.—In the case of an 

24 individual, this subsection shall apply only to 

25 transactions entered into in connection with a 


jlentini on PROD1PC65 with BILLS
91 

•HR 2979 IH

1 trade or business or an activity engaged in for 

2 the production of income. 

3 ‘‘(D) TREATMENT OF LESSORS.—In apply4 ing paragraph (1)(B)(ii) to the lessor of tan5 gible property subject to a lease— 

6 ‘‘(i) the expected net tax benefits with 

7 respect to the leased property shall not in8 clude the benefits of— 

9 ‘‘(I) depreciation, 

10 ‘‘(II) any tax credit, or 

11 ‘‘(III) any other deduction as 

12 provided in guidance by the Secretary, 

13 and 

14 ‘‘(ii) subclause (II) of paragraph 

15 (1)(B)(ii) shall be disregarded in deter16 mining whether any of such benefits are al17 lowable. 

18 ‘‘(4) OTHER COMMON LAW DOCTRINES NOT AF19 FECTED.—Except as specifically provided in this 

20 subsection, the provisions of this subsection shall not 

21 be construed as altering or supplanting any other 

22 rule of law, and the requirements of this subsection 

23 shall be construed as being in addition to any such 

24 other rule of law. 


jlentini on PROD1PC65 with BILLS
92 

•HR 2979 IH

1 ‘‘(5) REGULATIONS.—The Secretary shall pre2 scribe such regulations as may be necessary or ap3 propriate to carry out the purposes of this sub4 section. Such regulations may include exemptions 

5 from the application of this subsection.’’. 

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

7 this section shall apply to transactions entered into after 

8 the date of the enactment of this Act. 

Æ 


jlentini on PROD1PC65 with BILLS