156 
‘‘(B) the number of families residing in the 
State that include a work-eligible individual.’’. 
(b) 
PARTICIPATION
REQUIREMENTS.—Section 
407(c) (42 U.S.C. 607(c)) is amended to read as follows: 
‘‘(c) ENGAGED
IN WORK.—For purposes of sub-
section (b): 
‘‘(1) GENERAL
RULE.—An individual is en-
gaged in work for a month in a fiscal year if the re-
cipient is participating in work activities for an aver-
age of at least 20 hours per week during the month. 
‘‘(2) INDIVIDUALS COMPLYING WITH A MODI-
FIED
EMPLOYABILITY
PLAN
DEEMED
TO
BE
EN-
GAGED IN WORK.—An individual is deemed to be en-
gaged in work for a month if the State determines 
that the individual is in substantial compliance with 
the activities and hourly participation requirements 
of a modified employability plan developed for the 
individual in accordance with section 408(h). 
‘‘(3) SINGLE TEEN HEAD OF HOUSEHOLD OR 
MARRIED
TEEN
WHO
MAINTAINS
SATISFACTORY 
SCHOOL ATTENDANCE DEEMED TO BE ENGAGED IN 
WORK.—An individual who is married or a head of 
household and has not attained 20 years of age is 
deemed to be engaged in work for a month if the re-
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157 
cipient maintains satisfactory attendance at sec-
ondary school or the equivalent during the month.’’. 
(c) ELIMINATION OF 12-MONTH LIMIT ON COUNTING 
VOCATIONAL EDUCATIONAL TRAINING AS A WORK ACTIV-
ITY.—Section 407(d)(8) (42 U.S.C. 607(d)(8)) is amend-
ed by striking ‘‘(not to exceed 12 months with respect to 
any individual)’’. 
SEC. 905. WORK RULES. 
(a) OPTION OF RECIPIENT TO HAVE TRAINED PER-
SONNEL ASSESS CERTAIN BARRIERS TO EMPLOYMENT; 
ADDITIONAL MATTERS REQUIRED TO BE ASSESSED.— 
Section 408(b)(1) (42 U.S.C. 608(b)(1)) is amended— 
(1) by inserting ‘‘(which, at the option of the 
recipient, shall be conducted by trained personnel 
with respect to barriers to employment specified by 
the recipient)’’ after ‘‘assessment’’; and 
(2) by striking ‘‘and employability’’ and insert-
ing ‘‘employability, physical and mental impair-
ments, English proficiency, child care needs, and 
whether the recipient is a victim of domestic or sex-
ual violence,’’. 
(b) INDIVIDUAL RESPONSIBILITY PLANS.— 
(1) PLANS
REQUIRED; PLANS
TO
INCLUDE 
WELL-BEING
PLANS
FOR
CHILDREN.—Section 
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158 
408(b)(2)(A) (42 U.S.C. 608(b)(2)(A)) is amend-
ed— 
(A) in the matter preceding clause (i), by 
striking ‘‘may’’ and inserting ‘‘shall’’; 
(B) in clause (iv)— 
(i) by inserting ‘‘, supports,’’ after 
‘‘counseling’’; and 
(ii) by striking ‘‘and’’ at the end; 
(C) in clause (v), by striking the period 
and inserting ‘‘; and’’; and 
(D) by adding at the end the following: 
‘‘(vi) describe a well-being plan for 
each child in the family.’’. 
(2) DEADLINE FOR COMPLETION OF PLAN.— 
Section 408(b)(2)(B) (42 U.S.C. 608(b)(2)(B)) is 
amended by striking ‘‘individual—’’ and all that fol-
lows and inserting ‘‘individual within 90 days after 
the individual is determined eligible for the assist-
ance.’’. 
(3) SANCTION FOR FAILURE OF STATE TO DE-
VELOP PLAN.—Section 409(a) (42 U.S.C. 609(a)), 
as amended by section 903(c)(2)(A) of this title, is 
amended by adding at the end the following: 
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159 
‘‘(16) PENALTY FOR FAILURE OF STATE TO DE-
VELOP
REQUIRED
INDIVIDUAL
RESPONSIBILITY 
PLAN.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made 
under section 403 in a fiscal year has violated 
section 408(b)(2) during the fiscal year, the 
Secretary shall reduce the grant payable to the 
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount 
equal to not more than 5 percent of the State 
family assistance grant. 
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF 
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a 
fiscal year based on the degree of noncompli-
ance.’’. 
(4) 
CONFORMING
AMENDMENT.—Section 
408(b) (42 U.S.C. 608(b)) is amended by striking 
paragraph (4). 
(c) MODIFIED EMPLOYABILITY PLANS FOR CERTAIN 
INDIVIDUALS
WITH
DISABILITIES.—Section 408 (42 
U.S.C. 608) is amended by adding at the end the fol-
lowing: 
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160 
‘‘(h) AUTHORITY TO DEVELOP MODIFIED EMPLOY-
ABILITY PLAN FOR A RECIPIENT OF ASSISTANCE WITH, 
OR CARING
FOR
A FAMILY MEMBER WITH, A DIS-
ABILITY.— 
‘‘(1) IN
GENERAL.—A State may develop a 
modified employability plan for a recipient of assist-
ance under the State program funded under this 
part— 
‘‘(A) who— 
‘‘(i) is a work-eligible individual (as 
defined in section 407(a)(2)); and 
‘‘(ii) has been determined by a quali-
fied medical, mental health, addiction, or 
social services professional (as determined 
by the State) to have a disability; or 
‘‘(B) who is caring for a family member 
with a disability (as so determined). 
‘‘(2) CONTENTS OF PLAN.—The modified em-
ployability plan shall— 
‘‘(A) include a determination that, because 
of the disability of the recipient or the indi-
vidual for whom the recipient is caring, reason-
able modification of work activities, hourly par-
ticipation requirements, or both, is needed in 
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161 
order for the recipient to participate in the ac-
tivities; 
‘‘(B) describe the modified work activities 
in which the recipient is required to participate; 
‘‘(C) specify the number of hours per week 
for which the recipient is required to participate 
in the modified work activities, based on an 
evaluation by the State of the circumstances of 
the family; 
‘‘(D) describe the services, supports, and 
modifications that the State will provide to the 
recipient or the family of the recipient; 
‘‘(E) be developed in cooperation with the 
recipient; and 
‘‘(F) be reviewed not less often than every 
6 months. 
‘‘(3) DEFINITIONS.—In this subsection: 
‘‘(A) DISABILITY.—The term ‘disability’ 
means a mental or physical impairment, includ-
ing substance abuse or addiction, that— 
‘‘(i) constitutes or results in a sub-
stantial impediment to employment; or 
‘‘(ii) substantially limits 1 or more 
major life activities. 
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162 
‘‘(B) MODIFIED
WORK
ACTIVITIES.—The 
term ‘modified work activities’ means activities 
which the State has determined will help the re-
cipient become employable.’’. 
(d) SANCTIONS.— 
(1) GENERAL SANCTION PROVISIONS.— 
(A) PROHIBITION ON IMPOSING LIFETIME 
OR FULL FAMILY SANCTION.— 
(i) PROHIBITION.—Section 408(a) (42 
U.S.C. 608(a)) is amended by adding at 
the end the following: 
‘‘(13) PROHIBITION ON IMPOSING LIFETIME OR 
FULL FAMILY SANCTION.—A State to which a grant 
is made under section 403 shall not impose a life-
time prohibition on the provision of assistance to 
any individual or family under the State program 
funded under this part or under a program funded 
with qualified State expenditures (as defined in sec-
tion 409(a)(7)(B)(i)) on the basis of the failure of 
a member of the family to comply with a program 
requirement.’’. 
(ii) PENALTY.—Section 409(a) (42 
U.S.C. 609), as amended by section 
903(c)(2)(A) of this title and subsection 
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163 
(b)(3) of this section, is amended by add-
ing at the end the following: 
‘‘(17) PENALTY
FOR
IMPOSING
LIFETIME
OR 
FULL FAMILY SANCTION.—If the Secretary deter-
mines that a State to which a grant is made under 
section 403 in a fiscal year has violated section 
408(a)(13) during the fiscal year, the Secretary 
shall reduce the grant payable to the State under 
section 403(a)(1) for the immediately succeeding fis-
cal year by an amount equal to 5 percent of the 
State family assistance grant.’’. 
(B) DUE PROCESS PROTECTIONS.— 
(i) IN GENERAL.—Section 408(a) (42 
U.S.C. 608(a)), as amended by subpara-
graph (A)(i) of this paragraph, is amended 
by adding at the end the following: 
‘‘(14) SANCTION PROCEDURES.— 
‘‘(A) PRE-SANCTION
REVIEW
PROCESS.— 
Before imposing a sanction against an indi-
vidual or family receiving assistance under the 
State program funded under this part or under 
a program funded with qualified State expendi-
tures (as defined in section 409(a)(7)(B)(i)) for 
failure to comply with program requirements, 
the State shall take the following steps: 
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164 
‘‘(i) Provide or send notice to the indi-
vidual or family, and, if the recipient’s na-
tive language is not English, through a 
culturally competent written or verbal 
translation, of the following information: 
‘‘(I) The specific reason for the 
proposed sanction. 
‘‘(II) The amount of the pro-
posed sanction. 
‘‘(III) The length of time during 
which the proposed sanction would be 
in effect. 
‘‘(IV) The steps required to come 
into compliance or to show good cause 
for noncompliance. 
‘‘(V) That the agency will provide 
assistance to help the individual dem-
onstrate good cause for noncompli-
ance, or come into compliance with 
program requirements. 
‘‘(VI) That the individual may 
appeal the determination to impose a 
sanction, and the steps that the indi-
vidual must take to pursue such an 
appeal. 
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165 
‘‘(ii)(I) Ensure that, subject to clause 
(iii)— 
‘‘(aa) an individual, other than 
the individual who determined that a 
sanction be imposed, will review the 
determination and have the authority 
to take the actions described in sub-
clause (II); and 
‘‘(bb) the individual or family 
against whom the sanction is to be 
imposed shall be afforded the oppor-
tunity to meet with the individual who 
is reviewing the determination to im-
pose the sanction. 
‘‘(II) The action described in this sub-
clause are the following: 
‘‘(aa) Modify the determination 
to impose a sanction. 
‘‘(bb) Determine that there was 
good cause for the failure to comply. 
‘‘(cc) Recommend modifications 
to the individual responsibility or em-
ployment plan of an individual. 
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166 
‘‘(dd) Make such other deter-
minations and take such other actions 
as may be appropriate. 
‘‘(iii) The review required under 
clause (ii) shall include consideration of the 
following: 
‘‘(I) To the extent applicable, 
whether barriers to compliance exist, 
such as a physical or mental impair-
ment (including mental illness, sub-
stance abuse, mental retardation, or a 
learning disability), domestic or sexual 
violence, 
limited 
proficiency 
in 
English, limited literacy, homeless-
ness, or the need to care for a child 
with a disability or health condition, 
that contributed to the noncompli-
ance. 
‘‘(II) Whether the noncompliance 
resulted from failure to receive or 
have access to services identified as 
necessary in an individual responsi-
bility or employment plan. 
‘‘(III) Whether changes to the in-
dividual responsibility or employment 
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167 
plan of an individual should be made 
in order for the individual to come 
into compliance. 
‘‘(IV) Whether there is good 
cause for any noncompliance. 
‘‘(V) Whether the sanction poli-
cies of the State have been applied 
properly. 
‘‘(B) SANCTION
FOLLOW-UP
REQUIRE-
MENTS.—If a State imposes a sanction on a 
family or individual for failing to comply with 
program requirements, the State shall— 
‘‘(i) provide or send notice to the indi-
vidual or family, in language calculated to 
be understood by the individual or family, 
and, if the individual’s or family’s native 
language is not English, through a cul-
turally competent translation, of the reason 
for the sanction and the steps the indi-
vidual or family must take to end the sanc-
tion; 
‘‘(ii) resume full assistance, services, 
or benefits to the individual or family 
under the program (if the individual or 
family is otherwise eligible for the assist-
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168 
ance, services, or benefits) once the indi-
vidual who was not in compliance with pro-
gram requirements that led to the sanction 
complies with the requirements for a rea-
sonable period of time, as determined by 
the State and subject to State discretion to 
reduce the period; and 
‘‘(iii) if the State has not resumed 
providing the assistance, services, or bene-
fits as of the end of the 120-day period 
that begins on the date that is 60 days 
after the date on which the sanction was 
imposed, provide notice to the individual or 
family, in language calculated to be under-
stood by the individual or family, of the 
steps the individual or family must take to 
end the sanction, and of the availability of 
assistance to come into compliance or dem-
onstrate good cause for noncompliance. 
‘‘(C) NOTICE TO EVICTED PERSONS.—The 
State shall make a reasonable effort to provide 
to an individual or family that has been evicted 
from a residence for failure to pay rent or as 
a result of another problem related to poverty, 
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169 
any notice required by this paragraph to be 
provided to the individual or family.’’. 
(ii) PENALTY.—Section 409(a) (42 
U.S.C. 609(a)), as amended by section 
903(c)(2)(A) of this title, subsection (b)(3) 
of this section, and subparagraph (A)(ii) of 
this paragraph, is amended by adding at 
the end the following: 
‘‘(18) PENALTY
FOR
FAILURE
TO
FOLLOW 
SANCTION PROCEDURES.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made 
under section 403 in a fiscal year has violated 
section 408(a)(14) during the fiscal year, the 
Secretary shall reduce the grant payable to the 
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount 
equal to not more than 5 percent of the State 
family assistance grant. 
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF 
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a 
fiscal year based on the degree of noncompli-
ance.’’. 
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170 
(iii) STATE
PLAN
REQUIREMENT
TO 
DESCRIBE HOW STATES WILL NOTIFY AP-
PLICANTS
AND
RECIPIENTS
OF
THEIR 
RIGHTS UNDER THE PROGRAM AND OF PO-
TENTIAL BENEFITS AND SERVICES AVAIL-
ABLE
UNDER
THE
PROGRAM.—Section 
402(a)(1)(B)(iii) 
(42 
U.S.C. 
602(a)(1)(B)(iii)) is amended by inserting 
‘‘, and will notify applicants and recipients 
of assistance under the program of the 
rights of individuals under all laws applica-
ble to program activities and of all poten-
tial benefits and services available under 
the program’’ before the period. 
(2) MODIFICATIONS TO WORK SANCTION.— 
(A) ELIMINATION OF FULL FAMILY SANC-
TION; STATE
REQUIRED
TO
ESTABLISH
CER-
TAIN
GOOD
CAUSE
EXCEPTIONS.—Section 
407(e)(1) (42 U.S.C. 607(e)(1)) is amended— 
(i) by striking ‘‘shall—’’ and all that 
follows through subparagraph (B) and in-
serting ‘‘shall reduce the amount of assist-
ance otherwise payable to the family pro 
rata with respect to any period during a 
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171 
month in which the individual so refuses,’’; 
and 
(ii) by striking ‘‘may establish’’ and 
inserting the following ‘‘shall establish, 
which shall include the decline of an offer 
of employment at a wage less than the 
greater of the applicable Federal or State 
minimum wage, or 80 percent of the wage 
that would have governed had the min-
imum hourly rate under the Fair Labor 
Standards Act been applicable to the offer 
of employment, at a site subject to a strike 
or lockout at the time of refusal, or for 
medical reasons or a lack of sufficient 
physical strength or stamina’’. 
(B) PROHIBITION ON SANCTIONING INDI-
VIDUAL FOR FAILURE TO ENGAGE IN WORK IF 
INDIVIDUAL
HAS
A
CHILD
UNDER
AGE
MONTHS
OR
IF
FAILURE
RESULTS
FROM
IN-
ABILITY TO SECURE CHILD CARE OR AFTER- 
SCHOOL ARRANGEMENTS FOR A CHILD UNDER 
AGE
13.—Section 
407(e)(2) 
(42 
U.S.C. 
607(e)(2)) is amended by striking ‘‘refusal’’ 
and all that follows and inserting ‘‘failure of an 
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172 
individual to engage in work required in accord-
ance with this section if— 
‘‘(A) the individual is a single custodial 
parent caring for a child who has not attained 
6 months of age; or 
‘‘(B) the individual is the single custodial 
parent caring for a child who has not attained 
13 years of age, and the failure resulted from 
the inability of the individual to secure child 
care or after-school arrangements for the 
child’’. 
(3) MODIFICATIONS TO CHILD SUPPORT SANC-
TION.—Section 408(a)(2) (42 U.S.C. 608(a)(2)) is 
amended by striking ‘‘State—’’ and all that follows 
and inserting ‘‘State shall deduct from the assist-
ance that would otherwise be provided to the family 
of the individual under the State program funded 
under this part an amount equal to 25 percent of 
the amount of the assistance.’’. 
(e) RELATED STATE PLAN REQUIREMENT.—Section 
402(a) (42 U.S.C. 602(a)) is amended by adding at the 
end the following: 
‘‘(8) CERTIFICATION
THAT
EMPLOYMENT
AS-
SESSMENTS AND SANCTION REVIEWS WILL BE CON-
DUCTED
BY
COMPETENT
PERSONNEL.—A certifi-
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173 
cation by the chief executive officer of the State that 
the employment assessments conducted pursuant to 
section 408(b)(1) and the sanction reviews con-
ducted pursuant to section 408(a)(14)(A) will be 
conducted by personnel who have sufficient edu-
cation, training, and professional competence to do 
so, which shall include information on the education, 
training, and professional competence that State will 
require of the personnel.’’. 
SEC. 906. PROHIBITION ON IMPOSING LIMIT OF LESS THAN 
60 MONTHS ON DURATION OF ASSISTANCE. 
(a) PROHIBITION.— 
(1) 
IN
GENERAL.—Section 
408(a)(7) 
(42 
U.S.C. 608(a)(7)) is amended— 
(A) in the paragraph heading, by striking 
‘‘NO ASSISTANCE FOR MORE THAN 5 YEARS’’ 
and inserting ‘‘DURATIONAL LIMITS ON ASSIST-
ANCE’’; 
(B) in the heading for subparagraph (A), 
by striking ‘‘IN GENERAL’’ and inserting ‘‘NO 
ASSISTANCE FOR MORE THAN 5 YEARS’’; and 
(C) by adding at the end the following: 
‘‘(H) PROHIBITION
ON
LIMITING
DURA-
TION
OF
ASSISTANCE
TO
LESS
THAN
MONTHS.—A State to which a grant is made 
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174 
under section 403 shall not impose a limit of 
less than 60 months on the duration for which 
a family may be provided assistance from Fed-
eral or State funds under the State program 
funded under this part or under a program 
funded with qualified State expenditures (as de-
fined in section 409(a)(7)(B)(i)).’’. 
(2) CONFORMING AMENDMENT.—The heading 
of section 409(a)(9) (42 U.S.C. 609(a)(9)) is 
amended by striking ‘‘5-YEAR LIMIT’’ and inserting 
‘‘RULES GOVERNING DURATIONAL LIMITS’’. 
(b) REQUIREMENT TO CONDUCT OUTREACH TO IN-
FORM POTENTIALLY ELIGIBLE FAMILIES
OF ELIMI-
NATION OF DURATIONAL LIMIT ON ASSISTANCE OF LESS 
THAN 60 MONTHS.— 
(1) IN GENERAL.—Section 408(a) (42 U.S.C. 
608(a)), as amended by section 905(d)(1) of this 
title, is amended by adding at the end the following: 
‘‘(15) REQUIREMENT TO CONDUCT OUTREACH 
TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF 
ASSISTANCE OF ELIMINATION OF DURATIONAL LIMIT 
ON
ASSISTANCE
OF
LESS
THAN
MONTHS.—A 
State to which a grant is made under section 403 
for a fiscal year that, before the effective date of this 
paragraph, denied assistance under the State pro-
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175 
gram funded under this part or any other State pro-
gram funded by qualified State expenditures (as de-
fined in section 409(a)(7)(B)(i)) to an individual or 
family on the basis of a durational limit on the as-
sistance that was imposed other than under section 
408(a)(7) shall conduct outreach to inform individ-
uals and families who were so denied that they may 
be eligible for additional months of the assistance.’’. 
(2) PENALTY.—Section 409(a) (42 U.S.C. 
609(a)), as amended by sections 903(c)(2)(A) and 
905(d)(1) of this title, is amended by adding at the 
end the following: 
‘‘(19) FAILURE TO CONDUCT OUTREACH TO IN-
FORM POTENTIALLY ELIGIBLE RECIPIENTS OF AS-
SISTANCE OF ELIMINATION OF DURATIONAL LIMIT 
ON ASSISTANCE OF LESS THAN 60 MONTHS.—If the 
Secretary determines that a State to which a grant 
is made under section 403 in a fiscal year has vio-
lated section 408(a)(15) during the fiscal year, the 
Secretary shall reduce the grant payable to the State 
under section 403(a)(1) for the immediately suc-
ceeding fiscal year by an amount equal to 5 percent 
of the State family assistance grant.’’. 
(c) STATE PLAN REQUIRED TO INCLUDE DESCRIP-
TION OF HOW POTENTIALLY ELIGIBLE RECIPIENTS WILL 
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176 
BE INFORMED OF ELIMINATION OF DURATIONAL LIMIT 
ON ASSISTANCE OF LESS THAN 60 MONTHS.—Section 
402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)) is amended by 
adding at the end the following: 
‘‘(vi) In the case of a State that, be-
fore the date this clause takes effect, de-
nied assistance under the program to an 
individual or family on the basis of a 
durational limit on the assistance that was 
imposed 
other 
than 
under 
section 
408(a)(7), the document shall describe how 
the State intends to inform the individuals 
and families who were so denied that they 
may be eligible for additional months of 
the assistance.’’. 
SEC. 907. RESPONSE OF TANF PROGRAM TO ECONOMIC RE-
CESSIONS. 
(a) INAPPLICABILITY OF DURATIONAL LIMIT ON AS-
SISTANCE.—Section 408(a)(7) (42 U.S.C. 608(a)(7)), as 
amended by section 906(a)(1)(C) of this title, is amended 
by adding at the end the following: 
‘‘(I) INAPPLICABILITY
OF
DURATIONAL 
LIMIT DURING RECESSION.—Subparagraph (A) 
shall not apply in a State during any month 
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177 
which is in a high unemployment period with 
respect to the State. 
‘‘(J) DISREGARD
OF
ASSISTANCE
PRO-
VIDED
DURING
RECESSION.—In determining 
the number of months for which an adult has 
received assistance under a State or tribal pro-
gram funded under this part or any other State 
program funded by qualified State expenditures 
(as defined in section 409(a)(7)(B)(i)), the 
State or tribe shall disregard any month which 
is in a high unemployment period with respect 
to the State. 
‘‘(K) 6-MONTH GRACE PERIOD REQUIRED 
AFTER
RECESSION.—Subparagraph (A) shall 
not apply to a recipient of assistance under the 
State program funded under this part or any 
other State program funded by qualified State 
expenditures 
(as 
defined 
in 
section 
409(a)(7)(B)(i)) during the 6-month period 
that begins with the month immediately fol-
lowing a high unemployment period with re-
spect to the State if the recipient received the 
assistance for the last month of the period.’’. 
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178 
(b) REQUIREMENT TO CONDUCT OUTREACH TO IN-
FORM POTENTIALLY ELIGIBLE FAMILIES OF SUSPENSION 
OF DURATIONAL LIMIT ON ASSISTANCE.— 
(1) IN GENERAL.—Section 408(a) (42 U.S.C. 
608(a)), as amended by sections 905(d)(1) and 
906(b)(1) of this title, is amended by adding at the 
end the following: 
‘‘(16) REQUIREMENT TO CONDUCT OUTREACH 
TO INFORM POTENTIALLY ELIGIBLE RECIPIENTS OF 
ASSISTANCE OF SUSPENSION OF DURATIONAL LIMIT 
ON ASSISTANCE.—In each month which is a high un-
employment period with respect to a State to which 
a grant is made under section 403 for a fiscal year, 
the State shall conduct outreach to inform individ-
uals and families who are potentially eligible for as-
sistance under the State program funded under this 
part or any other State program funded by qualified 
State 
expenditures 
(as 
defined 
in 
section 
409(a)(7)(B)(i)) of the suspension of any durational 
limit on assistance under the program.’’. 
(2) PENALTY.—Section 409(a) (42 U.S.C. 
609(a)), as amended by sections 903(c)(2)(A), 
905(d)(1), and 906(b)(2), is amended by adding at 
the end the following: 
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179 
‘‘(20) FAILURE TO CONDUCT OUTREACH TO IN-
FORM POTENTIALLY ELIGIBLE RECIPIENTS OF AS-
SISTANCE OF SUSPENSION OF DURATIONAL LIMIT 
ON ASSISTANCE.—If the Secretary determines that a 
State to which a grant is made under section 403 
in a fiscal year has violated section 408(a)(16) dur-
ing 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 5 percent of the State family assist-
ance grant.’’. 
(c) STATE PLAN REQUIRED TO INCLUDE DESCRIP-
TION OF HOW POTENTIALLY ELIGIBLE RECIPIENTS WILL 
BE INFORMED OF SUSPENSION OF TIME LIMITS DURING 
RECESSION.—Section 
402(a)(1)(B) 
(42 
U.S.C. 
602(a)(1)(B)), as amended by section 906(c) of this title, 
is amended by adding at the end the following: 
‘‘(vii) The document shall describe 
how the State intends to inform potentially 
eligible recipients of assistance under the 
program of the suspension of durational 
limits on the assistance during a high un-
employment period with respect to the 
State.’’. 
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180 
(d) HIGH UNEMPLOYMENT PERIOD DEFINED.—Sec-
tion 419 (42 U.S.C. 619) is amended by adding at the 
end the following: 
‘‘(6) 
HIGH
UNEMPLOYMENT
PERIOD
DE-
FINED.—The term ‘high unemployment period’ 
means, with respect to a State, a period of 1 or 
more consecutive months if the average rate of total 
unemployment in the State (seasonally adjusted) for 
the period consisting of the then most recent 3 
months for which data for all States are published 
equals or exceeds 6.5 percent.’’. 
SEC. 908. REQUIREMENT THAT STATES USE MERIT-BASED 
SYSTEM IN ADMINISTRATION OF TANF PRO-
GRAMS. 
(a) PROGRAM REQUIREMENT.—Section 408(a) (42 
U.S.C. 608(a)), as amended by sections 905(d)(1), 
906(b)(1), and 907(b)(1) of this title, is amended by add-
ing at the end the following: 
‘‘(17) REQUIREMENT
TO
USE
MERIT-BASED 
SYSTEM IN ADMINISTERING PROGRAM.—A State to 
which a grant is made under section 403 shall estab-
lish and maintain personnel standards through a 
merit-based system, in administering the State pro-
gram funded under this part and any other State 
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181 
program funded by qualified State expenditures (as 
defined in section 409(a)(7)(B)(i)).’’. 
(b) PENALTY.—Section 409(a) (42 U.S.C. 609), as 
amended by sections 903(c)(2)(A), 905(d)(1), 906(b)(2), 
and 907(b)(2) of this title, is amended by adding at the 
end the following: 
‘‘(21) PENALTY FOR FAILURE TO USE MERIT- 
BASED
SYSTEM
IN
ADMINISTERING
PROGRAM.—If 
the Secretary determines that a State to which a 
grant is made under section 403 in a fiscal year has 
violated section 408(a)(17) 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 5 per-
cent of the State family assistance grant.’’. 
SEC. 909. BAN ON USING FEDERAL TANF FUNDS TO RE-
PLACE STATE AND LOCAL SPENDING THAT 
DOES NOT MEET THE DEFINITION OF QUALI-
FIED STATE EXPENDITURES. 
(a) PROHIBITION.—Section 408(a) (42 U.S.C. 
608(a)), as amended by sections 905(d)(1), 906(b)(1), 
907(b)(1), and 908(a) of this title, is amended by adding 
at the end the following: 
‘‘(18) BAN ON USING FEDERAL TANF FUNDS 
TO REPLACE STATE OR LOCAL SPENDING THAT IS 
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182 
NOT A QUALIFIED STATE EXPENDITURE.—A State 
to which a grant is made under section 403, and a 
sub-State entity that receives funds from such a 
grant, shall not expend any part of the grant funds 
to supplant State or local spending for benefits or 
services which are not qualified State expenditures 
(within the meaning of section 409(a)(7)(B)(i)).’’. 
(b) PENALTY.—Section 409(a) (42 U.S.C. 609), as 
amended by sections 903(c)(2)(A), 905(d)(1), 906(b)(2), 
907(b)(2), and 908(b) of this title, is amended by adding 
at the end the following: 
‘‘(22) USE OF FEDERAL TANF FUNDS TO RE-
PLACE STATE OR LOCAL SPENDING THAT IS NOT A 
QUALIFIED STATE EXPENDITURE.—If the Secretary 
determines that a State to which a grant is made 
under section 403 in a fiscal year has violated sec-
tion 408(a)(18) during the fiscal year, the Secretary 
shall reduce the grant payable to the State under 
section 403(a)(1) for the immediately succeeding fis-
cal year by an amount equal to 5 percent of the 
State family assistance grant.’’. 
SEC. 910. TANF ASSISTANCE TO MEET BASIC FAMILY ECO-
NOMIC NEEDS. 
(a) 
STATE
PLAN
REQUIREMENT.—Section 
402(a)(1)(B) (42 U.S.C. 602(a)(1)(B)), as amended by 
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183 
sections 906(c) and 907(d) of this title, is amended by 
adding at the end the following: 
‘‘(viii) 
FAMILY
BUDGET
PROVI-
SIONS.—The document shall set forth a 
family budget of a dollar amount sufficient 
to meet the basic economic needs (includ-
ing food, clothing, shelter, utilities, house-
hold goods, personal care items, and gen-
eral incidental expenses) of a family, how 
the family budget is adjusted for family 
size, the method used to estimate the fam-
ily budget (including a statement of the re-
lationship between shelter and utility costs 
and the fair market rents in localities in 
the State), and the relationship between 
the amount of assistance provided to each 
family under the program and the amount 
of the family budget for the family.’’. 
(b) PROGRAM REQUIREMENT.—Section 408(a) (42 
U.S.C. 608(a)), as amended by sections 905(d)(1), 
906(b)(1), 907(b)(1), 908(a), and 909(a) of this title, is 
amended by adding at the end the following: 
‘‘(19) REQUIREMENT THAT AMOUNT OF ASSIST-
ANCE MEET BASIC ECONOMIC NEEDS.—A State to 
which a grant is made under section 403 shall en-
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190 
of participation that were included in the modi-
fied employability plans. 
‘‘(F) A description of the qualifications of 
the staff who determined whether individuals 
had a disability, of the staff who determined 
that individuals needed modifications to their 
work requirements, and of the staff who devel-
oped the modified employability plans. 
‘‘(4) The effectiveness of the benefits and serv-
ices provided under the State program in reducing 
the number of children removed from their homes 
because of abuse and neglect. This part of the report 
shall include an analysis which includes the fol-
lowing: 
‘‘(A) The number of families provided the 
benefits or services that were at risk of having 
their children removed from the home. 
‘‘(B) The number of families served by the 
program that had 1 or more children removed 
from the home because of abuse or neglect. 
‘‘(5) An analysis of the extent to which the ben-
efits and services under the State program were pro-
vided to noncustodial parents. 
‘‘(6) How funds provided to the State under 
this part, with a separate accounting for funds pro-
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