I
105TH CONGRESS
2D SESSION
H. R. 4818
To provide that payments of the earned income tax credit are to be dis-
regarded for 12 months in determining eligibility for benefits under
the program of block grants to States for temporary assistance for
needy families, the supplemental security income program, the Medicaid
Program, and public housing programs.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 12, 1998
Mr. THOMPSON (for himself, Mr. TOWNS, Ms. MILLENDER-MCDONALD, Ms.
PELOSI, Ms. LEE, Ms. CHRISTIAN-GREEN, Mrs. MINK of Hawaii, Mrs.
MEEK of Florida, Ms. KILPATRICK, Ms. SLAUGHTER, Mr. HILLIARD, Mr.
SCOTT, and Mr. FROST) introduced the following bill; which was referred
to the Committee on Ways and Means, and in addition to the Committees
on Commerce, and Banking and Financial Services, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee con-
cerned
A BILL
To provide that payments of the earned income tax credit
are to be disregarded for 12 months in determining
eligibility for benefits under the program of block grants
to States for temporary assistance for needy families,
the supplemental security income program, the Medicaid
Program, and public housing programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Asset-Building for
Working Americans Act’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) The existing resource limitations affecting
eligibility for benefits under the program of block
grants to States for Temporary Assistance for
Needy Families, the Supplemental Security Income
program, the Medicaid program, and public housing
programs triggered by savings made through earned
income tax credits may encourage working families
to make unnecessary purchases in order to remain
eligible for public assistance rather than building the
long-term assets required for escaping poverty per-
manently, and may prevent low-income working fam-
ilies from obtaining the temporary public assistance
needed while they build the assets required for es-
caping poverty permanently;
(2) adjusting the resource limitations under
such programs to disregard savings made through
earned income tax credits for 12 months will enable
working families to make the necessary savings to
build long-term security through assets while still
obtaining temporary public assistance for living and
raising children in health and safety;
(3) 33 percent of all households in the United
States, and 60 percent of African-American house-
holds, have no or negative financial assets; and
(4) 46.9 percent of all children, including 40
percent of Caucasian children and 75 percent of Af-
rican-American children, in the United States live in
households with no financial assets.
SEC. 3. 12-MONTH DISREGARD OF PAYMENTS OF EARNED
INCOME TAX CREDIT UNDER THE PROGRAM
OF BLOCK GRANTS TO STATES FOR TEM-
PORARY ASSISTANCE FOR NEEDY FAMILIES.
(a) REQUIREMENT.—Section 408(a) of the Social Se-
curity Act (42 U.S.C. 608(a)) is amended by adding at
the end the following:
‘‘(12) 12-MONTH DISREGARD OF EITC PAYMENTS.—
A State to which a grant is made under section 403 of
this Act shall, in determining the eligibility of an individ-
ual for assistance, and the amount or type of assistance
to be provided to an individual, under the State program
funded under this part, disregard any refund of Federal
income taxes made to the individual by reason of section
32 of the Internal Revenue Code of 1986 (relating to
earned income tax credit), and any payment made to the
individual by an employer under section 3507 of such
Code (relating to advance payment of earned income cred-
it), for a period that begins with the month in which the
refund or payment is received and that is of a duration
of not less than 12 months.’’.
(b) PENALTY.—Section 409(a) of such Act (42
U.S.C. 609(a)) is amended by adding at the end the fol-
lowing:
‘‘(15) FAILURE TO DISREGARD EITC PAYMENTS FOR
12 MONTHS.—If the Secretary determines that a State to
which a grant is made under section 403 for a fiscal year
has violated section 408(a)(12) during the fiscal year, the
Secretary shall reduce the grant payable to the State
under section 403(a)(1) for the immediately succeeding
fiscal year by an amount equal to not more than 2 percent
of the State family assistance grant.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 1999.
SEC. 4. 12-MONTH DISREGARD OF PAYMENTS OF EARNED
INCOME TAX CREDIT UNDER THE SUPPLE-
MENTAL SECURITY INCOME PROGRAM.
(a) IN GENERAL.—Section 1613(a)(11) of the Social
Security Act (42 U.S.C. 1382b(a)(11)) is amended by
striking ‘‘for the month of receipt and the following
month’’ and inserting ‘‘for the 12-month period that be-
gins with the month of receipt’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to benefits for months beginning
on or after October 1, 1999.
SEC. 5. DISREGARD UNDER MEDICAID PROGRAM.
(a) IN GENERAL.—Section 1902 of the Social Secu-
rity Act (42 U.S.C. 1396a) is amended—
(1) in subsection (a)(17)—
(A) by striking ‘‘and’’ before ‘‘(D)’’; and
(B) by inserting before ‘‘; and’’ the follow-
ing: ‘‘, and (E) do not take into account for a
period of 12 months refunds and advance pay-
ments described in subsection (aa)’’;
(2) in subsection (f), by striking ‘‘subsection
(e)’’ and inserting ‘‘subsections (e) and (aa))’’; and
(3) by adding at the end the following new sub-
section:
‘‘(aa) Notwithstanding any other provision of this
title, in determining eligibility for, and the amount of,
medical assistance provided under this title, any refund
of Federal income taxes made to an individual by reason
of section 32 of the Internal Revenue Code of 1986 (relat-
ing to earned income tax credit), and any payment made
to such an individual by an employer under section 3507
of such Code (relating to advance payment of earned in-
come credit) shall not be taken into account as income
or resources for a period of 12 months.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to eligibility determinations
made on or after October 1, 1999.
SEC. 6. 12-MONTH DISREGARD OF PAYMENTS OF EARNED
INCOME TAX CREDIT UNDER PUBLIC HOUS-
ING AND SECTION 8 RENTAL ASSISTANCE
PROGRAMS.
Section 3(b)(4) of the United States Housing Act of
1937 (42 U.S.C. 1437a(b)(4)) is amended by adding at
the end the following new sentence: ‘‘In determining the
income of a household for purposes of this paragraph, the
Secretary shall disregard any refund of Federal income
taxes made to any member of the household by reason of
section 32 of the Internal Revenue Code of 1986 (relating
to earned income tax credit), and any payment made to
any member of the household by an employer under sec-
tion 3507 of such Code (relating to advance payment of
earned income credit), for the 12-month period that begins
with the month in which the refund or payment is re-
ceived.’’.
Æ