during the immediately succeeding fiscal year an amount
equal to 1⁄2 of the amount (if any) by which—
‘‘(A) the total amount paid to the State under
this part for the immediately preceding fiscal year,
adjusted in accordance with paragraph (2); exceeds
‘‘(B) the total amount paid to the State under
this part for the fiscal year.
‘‘(2) The Director of the Office of Management and
Budget shall adjust the amount described in paragraph
(1)(A) for a State with respect to a fiscal year, in direct
proportion to—
‘‘(A) the net change (if any) during the fiscal
year in the Consumer Price Index for All Urban
Consumers; and
‘‘(B) the net change (if any) during the fiscal
year in the number of individuals eligible for aid
under the State plan approved under this part, with-
out regard to whether such individuals have applied
for such aid.
‘‘(3) Each State to which funds are paid under this
subsection may not use such funds for any purpose other
than the purposes for which funds may be used under this
part.’’.
(e) REGULATIONS.—
(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Labor and with the re-
sponsible 
State 
agencies 
described 
in 
section
492(a)(2) of the Social Security Act, shall prescribe
such regulations as may be necessary to implement
the amendments made by this section, including reg-
ulations establishing uniform data collection require-
ments.
(2) DEADLINE
FOR
ISSUANCE
OF
PROPOSED
REGULATIONS.—Not later than 3 months after the
date of the enactment of this Act, the Secretary of
Health and Human Services shall issue proposed
regulations pursuant to paragraph (1).
(3) DEADLINE FOR ISSUANCE OF FINAL REGU-
LATIONS.—Not later than 9 months after the date
of the enactment of this Act, the Secretary shall
issue final regulations pursuant to paragraph (1).
SEC. 102. CHILD CARE GUARANTEED TO PARTICIPANTS IN
STATE SELF-SUFFICIENCY PROGRAMS.
Section 402(g)(1)(A)(i) of the Social Security Act (42
U.S.C. 602(g)(1)(A)(i)) is amended—
(1) by striking ‘‘and’’ at the end of subclause
(I);
(2) by striking the period at the end and insert-
ing ‘‘; and’’; and
(3) by adding after and below the end the fol-
lowing:
‘‘(III) for each individual who is participating
in the State program established under part G in ac-
cordance with the self-sufficiency plan established
for the individual under section 492.’’.
SEC. 103. INCREASED FEDERAL MATCHING RATES FOR
CHILD CARE PROVIDED BY STATES WITH
SELF-SUFFICIENCY PROGRAMS.
(a) AFDC AND TRANSITIONAL CHILD CARE.—Sec-
tion 402(g)(3)(A) of such Act (42 U.S.C. 602(g)(3)(A))
is amended by adding at the end the following:
‘‘(iii) In the case of a State with a plan approved
under part G for the fiscal year, the applicable rate for
purposes of section 403(a) shall be the rate otherwise de-
termined under this subparagraph, increased by 10 per-
centage points.’’.
(b) AT-RISK CHILD CARE.—Section 403(n)(1)(A) of
such Act (42 U.S.C. 603(n)(1)(A)) is amended by insert-
ing ‘‘(increased by 10 percentage points, in the case of
a State with a plan approved under part G)’’ before ‘‘of
the expenditures’’.
SEC. 104. ELIMINATION OF REQUIREMENT THAT FAMILIES
IN STATES WITH SELF-SUFFICIENCY PRO-
GRAMS HAVE RECEIVED AFDC FOR A MINI-
MUM PERIOD BEFORE BECOMING ELIGIBLE
FOR TRANSITIONAL MEDICAID BENEFITS OR
TRANSITIONAL CHILD CARE BENEFITS.
(a) MEDICAID.—Section 1925(a)(1) of the Social Se-
curity Act (42 U.S.C. 1396r–6(a)(1)) is amended by in-
serting ‘‘(or, in a State with an approved plan under part
G of title IV, during any of the 6 months)’’ after ‘‘6
months’’.
(b) 
TRANSITIONAL
CHILD
CARE.—Section
402(g)(1)(A)(iv) of such Act (42 U.S.C. 602(g)(1)(A)(iv))
is amended by inserting ‘‘in a State that does not have
a plan approved under part G’’ after ‘‘A family’’.
SEC. 105. ELIGIBILITY FOR TRANSITIONAL MEDICAID BEN-
EFITS AND TRANSITIONAL CHILD CARE BEN-
EFITS IN STATES WITH SELF-SUFFICIENCY
PROGRAMS WITHOUT REGARD TO TYPE OF
INCOME THAT WOULD OTHERWISE RESULT
IN INELIGIBILITY FOR BENEFITS.
(a) MEDICAID.—Section 1925(a)(1) of the Social Se-
curity Act (42 U.S.C. 1396r–6(a)(1)) is amended by in-
serting ‘‘, the receipt of any income of the caretaker rel-
ative (in the case of a State with an approved plan under
part G of title IV),’’ after ‘‘subsection (e))’’.
(b) 
TRANSITIONAL
CHILD
CARE.—Section
402(g)(1)(A)(ii) of such Act (42 U.S.C. 602(g)(1)(A)(ii))
is amended by striking ‘‘, or increased income from, such
employment or by reason of subsection (a)(8)(B)(ii)(II)’’
and inserting ‘‘such employment, by reason of subsection
(a)(8)(B)(ii)(II), increased income from such employment
if the State does not have a plan approved under part G,
or excessive income if the State has such a plan’’.
SEC. 106. ELIMINATION OF CERTAIN EXCEPTIONS FROM
REQUIREMENT THAT MINOR PARENTS AND
PREGNANT 
MINORS 
WITHOUT 
CHILDREN
LIVE WITH RESPONSIBLE ADULT IN STATES
WITH SELF-SUFFICIENCY PROGRAMS.
Clauses (iv) and (v) of section 402(a)(43)(B) of the
Social Security Act (42 U.S.C. 602(a)(43)(B) (iv) and (v))
are each amended by inserting ‘‘, and the State does not
have a plan approved under part G’’ before the semicolon.
TITLE II—OTHER PROVISIONS
SEC. 201. DISREGARD OF PERSONS WHO BECOME FAMILY
MEMBERS AFTER INITIAL RECEIPT OF AFDC.
Section 402(a) of the Social Security Act (42 U.S.C.
602(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(44);