(3) participating residents report accurately the
amount of the advance earned income payments
made to them by the responsible State agency dur-
ing the year, and
(4) recipients of excessive advance earned in-
come payments repay those amounts.
The report shall also contain an estimate of the amount
of advance earned income payments made by each respon-
sible State agency but not reported on the tax returns of
a participating resident and the amount of excessive ad-
vance earned income payments.
(d) AUTHORIZATION OF APPROPRIATIONS.—For pur-
poses of providing technical assistance described in sub-
section (b), preparing the reports described in subsection
(c), and providing grants to States in support of des-
ignated State Advance Payment Programs, there are au-
thorized to be appropriated in advance to the Secretary
of the Treasury and the Secretary of Health and Human
Services a total of $1,400,000 for fiscal years 1999
through 2001.
SEC. 114. CONSOLIDATED CHILD CARE AND DEVELOPMENT
BLOCK GRANT.
(a) PURPOSE.—It is the purpose of this section to
amend the Child Care and Development Block Grant Act
of 1990 (referred to in this section as the ‘‘CCDBG Act’’)
and to consolidate other child care programs into the pro-
gram under that Act, in order to—
(1) eliminate program fragmentation and create
a seamless system of high quality child care that al-
lows for continuity of care for children as parents
move from welfare to work;
(2) provide for parental choice among high
quality child care programs; and
(3) increase the availability of high quality af-
fordable child care in order to promote self-suffi-
ciency and support working families.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section
658B of the CCDBG Act (42 U.S.C. 9858) is amended
to read as follows:
‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) AUTHORIZATION
OF DISCRETIONARY APPRO-
PRIATIONS OF BLOCK GRANT FUNDS.—For the purpose
of providing child care services for eligible children
through the awarding of grants to States under this sub-
chapter (other than the grants awarded under subsection
(b)) by the Secretary, there are authorized to be appro-
priated $2,000,000,000 for fiscal year 1996 and such
sums as may be necessary for fiscal years 1997 through
2002.
‘‘(b) ENTITLEMENT TO STATES.—For the purpose of
providing child care services for eligible children, in addi-
tion to grants from appropriations authorized under sub-
section (a), there are authorized to be appropriated and
States shall be entitled to receive matching grants under
section 658Ob in amounts not to exceed in total
$1,555,000,000 for fiscal year 1997, $1,615,000,000 for
fiscal year 1998, $1,800,000,000 for fiscal year 1999,
$2,200,000,000 for fiscal year 2000, $2,475,000,000 for
fiscal year 2001, and $2,525,000,000 for fiscal year
2002.’’.
(c) USE OF BLOCK GRANT FUNDS.—
(1) SERVICES
TO
FAMILIES
IN
WELFARE-TO-
WORK TRANSITION.—Section 658E(c)(3)(B) of the
CCDBG Act (42 U.S.C. 9858c(c)(3)(B)) is amend-
ed—
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II), respectively, and re-
aligning the margins accordingly;
(B) by striking ‘‘Subject’’ and inserting
the following:
‘‘(i) IN GENERAL.—Subject’’; and
(C) by adding at the end the following new
clause:
‘‘(ii) SPECIAL
RULES
FOR
FAMILIES
SEEKING TO BECOME OR BECOMING INDE-
PENDENT
OF
TEMPORARY
EMPLOYMENT
ASSISTANCE.—
‘‘(I) IN
GENERAL.—Each State
agency referred to in section 658D
shall guarantee child care in accord-
ance with this Act—
‘‘(aa) for any individual who
is participating in an education
or training activity (including
participation in a program estab-
lished under part F, G, or H of
title IV of the Social Security
Act) if the State agency admin-
istering the program under part
F of that title approves the activ-
ity and determines that the indi-
vidual is participating satisfac-
torily in the activity;
‘‘(bb) for each family with a
needy child (as defined in section
402(a)(1) of the Social Security
Act) requiring such care, to the
extent that such care is deter-
mined by the State agency to be
necessary to permit an individual
in the family to accept employ-
ment or remain employed, includ-
ing in a community service job
under part F, G, or H of title IV
of the Social Security Act; and
‘‘(cc) to the extent that the
State agency determines that
such care is necessary for the
employment of an individual, if
the family of which the individual
is a member has ceased to receive
assistance under the State plan
approved under part A of title IV
of the Social Security Act by rea-
son of increased hours of, or in-
come from, such employment, for
12 months after the last month
for which the family received as-
sistance described in such para-
graph.’’.
(2) SET-ASIDES
FOR
QUALITY
AND
EXPAN-
SION.—Section 658E(c)(3)(C) of the CCDBG Act
(42 U.S.C. 9858c(c)(3)(C)) is amended by striking
‘‘25 percent’’ and inserting ‘‘10 percent’’.
(3) SUPPORT OF WELFARE-TO-WORK.—
(A) IN GENERAL.—Section 658E(c) of the
CCDBG Act (42 U.S.C. 9858c(c)) is amended
by adding the following:
‘‘(6) SIGNIFICANT EXPENDITURES TO SUPPORT
WELFARE-TO-WORK
TRANSITION.—The State plan
shall provide that the State will use significant por-
tions of amounts provided for child care services for
each of the following:
‘‘(A) Families containing an individual re-
ceiving assistance under a State plan approved
under part A of title IV of the Social Security
Act and participating in education, job search,
job training, work, or workforce programs;
‘‘(B) Families containing an individual
who—
‘‘(i) has ceased to receive assistance
under the temporary employment assist-
ance program under part A of title IV of
the Social Security Act as a result of in-
creased hours of, or increased income
from, employment, and no longer qualifies
for child care assistance on the basis of re-
ceiving such assistance under part A of
title IV of the Social Security Act; and
‘‘(ii) the State determines requires
such child care assistance in order to con-
tinue such employment.
‘‘(C) Families containing an individual
who—
‘‘(i) is not described in subparagraph
(A) or (B); and
‘‘(ii) has an annual income for a fiscal
year below 75 percent of the State median
income.’’.
(B) CONFORMING AMENDMENTS.—
(i) Section 658E(c)(3)(B)(i)(I) of the
CCDBG Act, as redesignated by paragraph
(1), is amended by inserting ‘‘consistent
with paragraph (6)’’ after ‘‘child care serv-
ices’’.
(ii) Subsection 658F(a) is amended by
striking ‘‘Nothing’’ and inserting ‘‘Except
as provided in section 658E(c)(B)(ii),
nothing’’.
(4) SLIDING FEE SCALE.—Section 658E(c)(5)
of the CCDBG Act (42 U.S.C. 9858c(c)(5)) is
amended by inserting ‘‘described in subparagraphs
(B) and (C) of paragraph (6)’’ after ‘‘families’’.
(d) LIMITED ENTITLEMENT; ALLOCATION.—
(1) IN GENERAL.—The CCDBG Act (42 U.S.C.
9858) is amended by adding after section 6580 the
following new section:
‘‘SEC. 6580B. ALLOCATION OF LIMITATION ON ENTITLE-
MENT.
‘‘(a) Each State shall be entitled to payment from
the Secretary of an amount equal to the lesser of:
‘‘(1) the Federal medical assistance percentage
(as defined in section 1905(b) or, as applicable, in
section 1118 of the Social Security Act) of the
amount of expenditures made by the State in provid-
ing child care services pursuant to this subchapter,
other than expenditures of funds appropriated under
subsection 658B(a); or
‘‘(2) the limitation determined under subsection
(b).
‘‘(b) LIMITATION ON ENTITLEMENT.—Subject to the
redistribution procedures under subsection (c), the limita-
tion for a State for a fiscal year under this paragraph shall
be an amount equal to the product of—
‘‘(1) the sum of the total amounts of Federal
payments for fiscal year 1994 to the State under—
‘‘(A) section 402(g)(3)(A) of the Social Se-
curity Act (as that section was in effect before
October 1, 1995) for amounts expended for
child care pursuant to paragraph (1) of such
subsection;
‘‘(B) section 403(l)(1)(A) of that Act (as
so in effect) for amounts expended for child
care pursuant to section 402(g)(1)(A) of that
Act (as so in effect), in the case of a State with
respect to which section 1108 of that Act ap-
plies; and
‘‘(C) section 403(n) of that Act (as so in
effect) for child care services pursuant to sec-
tion 402(i) of that Act;
divided by the total amount of such Federal pay-
ments to all States for fiscal year 1994; and
‘‘(2) the total limitation for all States under
subsection 658B(b) for such fiscal year, reduced by
the amount reserved under subsection (d).
‘‘(c) ADJUSTMENT
OF
LIMITATION; REALLOT-
MENT.—
‘‘(1) AVAILABILITY OF UNUSED AMOUNTS FOR
REALLOTMENT.—If the Secretary determines that a
State will not use the full limitation amount avail-
able to it for a fiscal year (as calculated under sub-
section (b)), the Secretary shall—
‘‘(A) reduce that State’s limitation under
subsection (b) by the amount the Secretary de-
termines the State will not use; and
‘‘(B) increase by no more than the amount
of reductions under subparagraph (A) the limi-
tations available to States under subsection (b)
that have requested an increase in their limita-
tions.
‘‘(2) REALLOTMENT FORMULA.—Limitation in-
creases available under paragraph (1) shall be made
available to each State requesting an increase in its
limitation amount that bears the same ratio to the
total available increase in limitations as the State’s
historical expenditures described in subsection (b)(1)
bear to the sum of such historical expenditures for
all States requesting an increase in their limitations.
‘‘(d) AMOUNTS RESERVED FOR INDIAN TRIBES.—
The Secretary shall reserve not more than 3 percent of
the amount appropriated under section 658B(b) each fis-
cal year for payments to Indian tribes and tribal organiza-
tions with applications approved under section 658Oa(c).
The amounts reserved under the prior sentence shall be
available to make grants to or enter into contracts with
Indian tribes or tribal organizations consistent with sec-
tion 6580a(c), without a requirement of matching funds
by the Indian tribes or tribal organizations.
‘‘(e) SAME TREATMENT AS ALLOTMENTS.—Amounts
paid to a State or Indian tribe under subsections (a) and
(d) shall be subject to the same requirements under this
subchapter as amounts paid from the allotment under sec-
tion 658Oa, except that section 658J(c) shall not apply.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 658O of the CCDBG Act (42
U.S.C. 9858m) is amended—
(i) by striking ‘‘SEC. 6580.’’ and in-
serting ‘‘SEC. 6580a. Discretionary Appro-
priations;’’;
(ii) in subsection (a)—
(I) in paragraph (1), by striking
‘‘this subchapter’’ and inserting ‘‘sec-
tion 658B(a)’’; and
(II) in paragraph (2), by striking
658B’’ and inserting ‘‘658B(a)’’; and
(iii) in subsection (b)(1), by striking
‘‘section 658B’’ and inserting ‘‘section
658B(a)’’.
(B) Subsection 658J(c) of the CCDBG Act
(42 U.S.C. 9858m) is amended by striking
‘‘658O’’ and inserting ‘‘658Oa’’.
(e) IMPROVING QUALITY.—
(1) INCREASE IN REQUIRED FUNDING.—Section
658G of the CCDBG Act (42 U.S.C. 9858e) is
amended by striking ‘‘not less than 20 percent of
the’’.
(2) QUALITY IMPROVEMENT INCENTIVE INITIA-
TIVE.—Section 658G of the CCDBG Act (42 U.S.C.
9858e) is further amended—
(A) by adding at the end the following new
paragraphs:
‘‘(6) BEFORE- AND
AFTER-SCHOOL
ACTIVI-
TIES.—Increasing the availability of before- and
after-school care.
‘‘(7) INFANT CARE.—Increasing the availability
of child care for infants under the age of 18 months.
‘‘(8) NONTRADITIONAL WORK HOURS.—Increas-
ing the availability of child care between the hours
of 5:00 p.m. and 8:00 a.m.’’;
(B) by striking ‘‘A State’’ and inserting
‘‘(a) IN GENERAL.—A State’’; and
(C) by adding at the end the following new
subsection:
100
‘‘(b) QUALITY IMPROVEMENT INCENTIVE INITIA-
TIVE.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a child care quality improvement incentive ini-
tiative to make funds available to States that dem-
onstrate progress in the implementation of—
‘‘(A) innovative teacher training programs
such as the Department of Defense staff devel-
opment and compensation program for child
care personnel; or
‘‘(B) enhanced child care quality standards
and licensing and monitoring procedures.
‘‘(2) FUNDING.—From the amounts made
available for each fiscal year under subsection (a),
the 
Secretary 
shall 
reserve 
not 
to 
exceed
$25,000,000 for each such fiscal year to carry out
this subsection.’’.
(f) PAYMENTS.—
(1) Section 658H of the CCDBG Act (42
U.S.C. 9858f) is repealed.
(2) Section 658J(a) of the CCDBG Act (42
U.S.C. 9858h) is amended to read as follows:
‘‘(a) IN GENERAL.—Subject to the availability of ap-
propriations under Section 658B(a) and the limitations
and other requirements under 658Ob, a State that has
101
an application approved by the Secretary under section
658E shall be entitled to a payment in a fiscal year in
an amount equal to the sum of its allotment under section
658Oa for that year and the amount determined for that
State for that fiscal year under 658Ob(a).’’.
(g) ANNUAL
REPORT.—Section 658K(a) of the
CCDBG Act (42 U.S.C. 9858i) is amended by adding
after paragraph (6) the following new paragraph:
‘‘(7) specifying the total amount expended by
the 
State 
for 
child 
care 
under 
part
658E(c)(3)(B)(ii), and describing the types of child
care provided, such as child care provided in the
case of a family that has ceased to receive assistance
under part A of title IV of the Social Security Act
because of increased hours of, or increased income
from, employment; or child care provided in the case
of a family that is not receiving assistance under
that part but would be at risk of becoming eligible
for such assistance if child care was not provided.’’.
(h) PROGRAM REPEALS.—
(1) STATE DEPENDENT CARE GRANTS.—Sub-
chapter E of chapter 8 of subtitle A of title VI of
the Omnibus Budget Reconciliation Act of 1981 (42
U.S.C. 9871 et seq.) is repealed.
102
(2) CHILD DEVELOPMENT ASSOCIATE SCHOLAR-
SHIP ASSISTANCE ACT.—The Child Development As-
sociate Scholarship Assistance Act of 1985 (42
U.S.C. 10901 et seq.) is repealed.
SEC. 115. EFFECTIVE DATES.
The amendments made by this subtitle are effective
with respect to calendar quarters beginning on or after
October 1, 1996.
Subtitle C—Work First
SEC. 121. WORK FIRST PROGRAM.
(a) ESTABLISHMENT
AND
OPERATION
OF
PRO-
GRAM.—Title IV (42 U.S.C. 601 et seq.) is amended by
striking part F and inserting the following:
‘‘PART F—WORK FIRST PROGRAM
‘‘SEC. 481. STATE ROLE.
‘‘(a) PROGRAM REQUIREMENTS.—Each State that
operates a program under part A shall establish and oper-
ate a Work First program that meets the following re-
quirements:
‘‘(1) OBJECTIVE.—The objective of the pro-
gram is for each program participant to find and
hold a full-time unsubsidized paid job, and for this
goal to be achieved in a cost-effective fashion.
‘‘(2) METHOD.—The method of the program is
to connect recipients of assistance under the State
103
plan under part A with the private sector labor mar-
ket as soon as possible and offer them the support
and skills necessary to remain in the labor market.
Each component of the program should be per-
meated with an emphasis on employment and with
an understanding that minimum wage jobs are a
stepping stone to more highly paid employment. The
program shall provide recipients with education,
training, 
job 
search 
and 
placement, 
work
supplementation, temporary subsidized jobs, or such
other services as the State considers necessary to
help a recipient obtain private sector employment.
‘‘(3) JOB
CREATION.—The creation of jobs,
with an emphasis on private sector jobs, shall be a
component of the program and shall be a priority for
each State office with responsibilities under the pro-
gram.
‘‘(4) FORMS OF ASSISTANCE.—The State shall
provide assistance to participants in the program in
the form of education, training, job placement serv-
ices (including vouchers for job placement services),
work supplementation programs, temporary sub-
sidized job creation, job counseling, assistance in es-
tablishing microenterprises, or other services to pro-
104
vide individuals with the support and skills necessary
to obtain and keep employment in the private sector.
‘‘(5) MUTUAL RESPONSIBILITY PLANS.—
‘‘(A) IN
GENERAL.—The State agency
shall develop a mutual responsibility plan for
each program participant, which will be an indi-
vidualized comprehensive plan, developed by the
State agency and the participant, to move the
participant into a full-time unsubsidized job.
The agreement should detail the education,
training, or skills that the individual will be re-
ceiving to obtain a full-time unsubsidized job,
and the obligations of the individual.
‘‘(B)(i) HOURS
OF
PARTICIPATION
RE-
QUIREMENT.—The agreement shall provide that
the individual, except as provided in clause (ii),
shall participate in activities in accordance with
the agreement for—
‘‘(I) not fewer than 20 hours per week
during fiscal years 1997 and 1998;
‘‘(II) not fewer than 25 hours per
week during fiscal year 1999; and
‘‘(III) not fewer than 30 hours per
week thereafter.
105
‘‘(ii) At the option of the State, a parent
of a child under age 6 may be required to par-
ticipate in such activities for fewer hours than
specified in clause (i) (but not fewer than 20
hours per week).
‘‘(6) CASELOAD
PARTICIPATION
RATES.—The
program shall comply with section 488.
‘‘(7) COMMUNITY SERVICE.—On and after the
date which is two years after the date of enactment
of this part, (unless the State plan under part A
specifically opts out of this provision) the State
agency shall require a parent or caretaker who—
‘‘(A) is receiving assistance under part A,
and has received that assistance for three
months;
‘‘(B) is not exempt from work require-
ments; and
‘‘(C) is not participating in the programs
established under parts F, G, and H as deter-
mined under section 488, in community service
employment,
to participate in community service, with minimum
hours per week and tasks to be determined by the
State (and the State shall offer such employment to
the parent or caretaker).
106
‘‘(8) NONDISPLACEMENT
IN
WORK
ACTIVI-
TIES.—
‘‘(A) IN
GENERAL.—A State program
under this part or under part G or H may not
be operated in a manner that results in—
‘‘(i) the displacement of any currently
employed worker or position (including
partial displacement such as a reduction in
the hours of nonovertime work, wages, or
employment benefits), or the impairment
of an existing contract for services or a col-
lective bargaining agreement;
‘‘(ii) the employment or assignment of
a participant or the filling of a position
when
‘‘(I) any other individual is on
layoff from the same or an equivalent
position, or
‘‘(II) the employer has termi-
nated the employment of a regular
employee or otherwise reduced its
workforce with the effect of filling the
vacancy so created with a participant
subsidized under the program under
this part or under part G or H; or
107
‘‘(iii) an infringement of the pro-
motional opportunity of a currently em-
ployed individual.
Funds available to carry out the program under
this part or under part G or H may not be used
to assist, promote, or deter union organizing.
‘‘(B) ENFORCING NONDISPLACEMENT PRO-
TECTIONS.—
‘‘(i) GRIEVANCE
PROCEDURE.—Each
State shall establish and maintain a griev-
ance procedure for resolving complaints al-
leging violation of a prohibition or require-
ment of subparagraph (A). Such a proce-
dure shall include an opportunity for a
hearing. The procedure’s remedies shall in-
clude, but are not limited to, termination
or suspension of payments to the employer,
prohibition of the placement of the pro-
gram participant, reinstatement of an em-
ployee, and other relief to make an ag-
grieved employee whole.
‘‘(ii) OTHER LAWS OR CONTRACTS.—
Nothing in clause (i) shall be construed to
prohibit a complainant from pursuing a
remedy authorized under another Federal,
108
State, or local law or a contract or collec-
tive bargaining agreement for a violation of
a prohibition or requirement of subpara-
graph (A).
‘‘(b) ANNUAL REPORTS.—
‘‘(1) COMPLIANCE WITH PERFORMANCE MEAS-
URES.—Each State that operates a program under
this part shall submit to the Secretary annual re-
ports on its performance relative to the performance-
based measures established under section 413(a)(4).
‘‘(2) 
COMPLIANCE
WITH
PARTICIPATION
RATES.—Each State that operates a program under
this part for a fiscal year shall submit to the Sec-
retary a report on the participation rate achieved by
the State for the fiscal year.
‘‘SEC. 482. REVAMPED JOBS PROGRAM.
‘‘A State that establishes a program under this part
may operate a program similar to the program known as
the ‘GAIN Program’ that has been operated by Riverside
County, California, under this Act in effect immediately
before the date this part (as amended by the Work First
and Personal Responsibility Act of 1996) first applies to
the State of California.
109
‘‘SEC. 483. USE OF PLACEMENT COMPANIES.
‘‘(a) IN GENERAL.—A State that establishes a pro-
gram under this part may enter into contracts with private
companies (whether operated for profit or not for profit)
for the placement of participants in the program in posi-
tions of full-time employment, preferably in the private
sector, for wages sufficient to eliminate the need of such
participants for cash assistance.
‘‘(b) REQUIRED CONTRACT TERMS.—Each contract
entered into under this section with a company shall meet
the following requirements:
‘‘(1) PROVISION OF JOB READINESS AND SUP-
PORT
SERVICES.—The contract shall require the
company to provide, to any program participant who
presents to the company a voucher issued under sub-
section (d), intensive personalized support and job
readiness services designed to prepare the individual
for employment and ensure the continued success of
the individual in employment.
‘‘(2) PAYMENTS.—
‘‘(A) IN
GENERAL.—The contract shall
provide for payments to be made to the com-
pany with respect to each program participant
who presents to the company a voucher issued
under subsection (d).
110
‘‘(B) STRUCTURE.—The contract shall
provide for payment of the majority of the
amounts under the contract with respect to a
program participant after the company has
placed the participant in a position of full-time
employment and the participant has been em-
ployed in the position for such period of not less
than 5 months as the State deems appropriate.
‘‘(c) COMPETITIVE BIDDING REQUIRED.—Contracts
under this section shall be awarded only after competitive
bidding.
‘‘(d) VOUCHERS.—The State shall issue a voucher to
each program participant whose mutual responsibility plan
provides for the use of placement companies under this
section, indicating that the participant is eligible for the
services of such a company.
‘‘SEC. 484. TEMPORARY SUBSIDIZED JOB CREATION.
‘‘A State that establishes a program under this part
may establish a program similar to the program known
as ‘JOBS Plus’ that has been operated by the State of
Oregon under this Act in effect immediately before the
date this part (as amended by the Work First and Per-
sonal Responsibility Act of 1996) first applies to the State
of Oregon.
116
the program), or as requiring any State or local
agency to require that an eligible individual filling a
job position provided by another entity under the
program be provided employee status by the entity
during the first 13 weeks the individual fills the po-
sition.
‘‘(2) Wages paid under a work supplementation
program shall be considered to be earned income for
purposes of any provision of law.
‘‘(f) PRESERVATION OF MEDICAID ELIGIBILITY.—
Any State that chooses to operate a work supplementation
program under this section shall provide that any individ-
ual who participates in the program, and any child or rel-
ative of the individual (or other individual) living in the
same household as the individual who would be eligible for
assistance under the State plan under part A if the State
did not have a work supplementation program, shall be
considered individuals receiving assistance under the State
plan under part A for purposes of eligibility for medical
assistance under the State plan approved under title XIX.
‘‘SEC. 487. PARTICIPATION RULES.
A State that establishes a program under this part
may require any individual receiving assistance under the
State plan under part A to participate in the program,