651
(1) in paragraph (21), by striking ‘‘and’’ at the 
end; 
(2) by redesignating paragraph (22) as para-
graph (23); and 
(3) by inserting after paragraph (21) the fol-
lowing new paragraph: 
‘‘(22) if any individual leaves employment be-
cause of loss of adequate child care for a dependent 
child under the age of 12, for purposes of deter-
mining such individual’s eligibility for compensation 
for any subsequent week for which such individual 
meets the State law requirements relating to avail-
ability for work and active search for work—
‘‘(A) such individual shall be treated as 
having left such employment for good cause; 
and 
‘‘(B) any failure to return to such employ-
ment or to otherwise meet such State law re-
quirements, while the lack of such child care 
continues, shall be disregarded; and’’. 
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by subsection (a) 
shall take effect on November 1, 2003.
652
(2) EXCEPTION.—In the case of any State the 
legislature of which has not been in session for at 
least 30 calendar days (whether or not successive) 
between the date of enactment of this Act and No-
vember 1, 2003, the amendments made by sub-
section (a) shall take effect 30 calendar days after 
the first day on which such legislature is in session 
on or after November 1, 2003. 
Subtitle D—Jobs for Low-Income 
Parents 
SEC. 5301. DISREGARD OF MONTHS ENGAGED IN WORK 
FOR PURPOSES OF 5-YEAR TANF ASSISTANCE 
LIMIT. 
Section 408(a)(7) of the Social Security Act (42 
U.S.C. 608(a)(7)) is amended—
(1) by redesignating subparagraphs (E), (F), 
and (G) as subparagraphs (G), (H), and (I), respec-
tively; and 
(2) by inserting after subparagraph (D), the 
following: 
‘‘(E) DISREGARD OF MONTHS OF ASSIST-
ANCE RECEIVED BY ADULT WHILE ENGAGED IN 
WORK.—In determining the number of months 
for which an adult has received assistance 
under a State or tribal program funded under
653
this part, the State or tribe shall disregard any 
month during which the adult is engaged in a 
work activity described in paragraph (1), (2), 
(3), (4), (5), (6), (7), (8), or (12) of section 
407(d) in accordance with the requirements of 
section 407(c).’’. 
SEC. 5302. REPLACEMENT OF CASELOAD REDUCTION 
CREDIT WITH EMPLOYMENT CREDIT. 
(a) EMPLOYMENT CREDIT TO REWARD STATES IN 
WHICH FAMILIES LEAVE WELFARE FOR WORK; ADDI-
TIONAL CREDIT FOR FAMILIES WITH HIGHER EARN-
INGS.—
(1) IN GENERAL.—Section 407(a) of the Social 
Security Act (42 U.S.C. 607(a)), as amended by sec-
tion 5308 of this Act, is amended by adding at the 
end the following: 
‘‘(2) EMPLOYMENT CREDIT.—
‘‘(A) IN GENERAL.—The minimum partici-
pation rate otherwise applicable to a State 
under this subsection for a fiscal year shall be 
reduced by the number of percentage points in 
the employment credit for the State for the fis-
cal year, as determined by the Secretary—
‘‘(i) using information in the National 
Directory of New Hires, or
654
‘‘(ii) with respect to a recipient of as-
sistance under the State program funded 
under this part who is placed with an em-
ployer whose hiring information is not re-
ported to the National Directory of New 
Hires, using quarterly wage information 
submitted by the State to the Secretary 
not later than such date as the Secretary 
shall prescribe in regulations. 
‘‘(B) CALCULATION OF CREDIT.—
‘‘(i) IN
GENERAL.—The employment 
credit for a State for a fiscal year is an 
amount equal to—
‘‘(I) twice the average quarterly 
number of families that ceased to re-
ceive cash payments under the State 
program funded under this part dur-
ing the most recent 4 quarters for 
which data is available and that were 
employed during the calendar quarter 
immediately succeeding the quarter in 
which the payments ceased, plus, at 
State option, the number of families 
that received a non-recurring short-
term benefit under the State program
655
funded under this part during the 
preceding fiscal year and that were 
employed in during the calendar quar-
ter immediately succeeding the quar-
ter in which the non-recurring short-
term benefit was so received; divided 
by 
‘‘(II) the average monthly num-
ber of families that include an adult 
who received cash payments under the 
State program funded under this part 
during the preceding fiscal year, plus, 
if the State elected the option under 
subclause (I), the number of families 
that received a non-recurring short-
term benefit under the State program 
funded under this part during the 
preceding fiscal year. 
‘‘(ii) SPECIAL RULE FOR FORMER RE-
CIPIENTS
WITH
HIGHER
EARNINGS.—In 
calculating the employment credit for a 
State for a fiscal year, a family that, dur-
ing the preceding fiscal year, earned at 
least 33 percent of the average wage in the 
State (determined on the basis of State
656
unemployment data) shall be considered to 
be 1.5 families. 
‘‘(C) PUBLICATION OF AMOUNT OF CRED-
IT.—Not later than August 30 of each fiscal 
year, the Secretary shall cause to be published 
in the Federal Register the amount of the em-
ployment credit that will be used in determining 
the minimum participation rate applicable to a 
State under this subsection for the immediately 
succeeding fiscal year.’’. 
(2) AUTHORITY OF SECRETARY TO USE INFOR-
MATION IN NATIONAL DIRECTORY OF NEW HIRES.—
Section 453(i) of the Social Security Act (42 U.S.C. 
653(i)) is amended by adding at the end the fol-
lowing: 
‘‘(5) CALCULATION
OF
EMPLOYMENT
CREDIT 
FOR PURPOSES OF DETERMINING STATE WORK PAR-
TICIPATION
RATES
UNDER
TANF.—The Secretary 
may use the information in the National Directory 
of New Hires for purposes of calculating State em-
ployment credits pursuant to section 407(a)(2).’’. 
(b) ELIMINATION OF CASELOAD REDUCTION CRED-
IT.—Section 407(b) of the Social Security Act (42 U.S.C. 
607(b)) is amended by striking paragraph (3) and redesig-
657
nating paragraphs (4) and (5) as paragraphs (3) and (4), 
respectively. 
SEC. 5303. STATES TO RECEIVE PARTIAL CREDIT TOWARD 
WORK PARTICIPATION RATE FOR RECIPI-
ENTS ENGAGED IN PART-TIME WORK. 
Section 407(c)(1)(A) of the Social Security Act (42 
U.S.C. 607(c)(1)(A)) is amended by adding at the end the 
following flush sentence: 
‘‘For purposes of subsection (b)(1)(B)(i), a 
family that does not include a recipient who is 
participating in work activities for an average 
of 30 hours per week during a month but in-
cludes a recipient who is participating in such 
activities during the month for an average of at 
least 50 percent of the minimum average num-
ber of hours per week specified for the month 
in the table set forth in this subparagraph shall 
be counted as a percentage of a family that in-
cludes an adult or minor child head of house-
hold who is engaged in work for the month, 
which percentage shall be the number of hours 
for which the recipient participated in such ac-
tivities during the month divided by the number 
of hours of such participation required of the 
recipient under this section for the month.’’.
658
SEC. 5304. TANF RECIPIENTS WHO QUALIFY FOR SUPPLE-
MENTAL SECURITY INCOME BENEFITS RE-
MOVED FROM WORK PARTICIPATION RATE 
CALCULATION FOR ENTIRE YEAR. 
Section 407(b)(1)(B)(ii) of the Social Security Act 
(42 U.S.C. 607(b)(1)(B)(ii)) is amended—
(1) in subclause (I), by inserting ‘‘who has not 
become eligible for supplemental security income 
benefits under title XVI during the fiscal year’’ be-
fore the semicolon; and 
(2) in subclause (II), by inserting ‘‘, and that 
do not include an adult or minor child head of 
household who has become eligible for supplemental 
security income benefits under title XVI during the 
fiscal year’’ before the period. 
SEC. 5305. ELIMINATION OF LIMIT ON NUMBER OF TANF 
RECIPIENTS 
ENROLLED 
IN 
VOCATIONAL 
EDUCATION OR HIGH SCHOOL WHO MAY BE 
COUNTED TOWARDS THE WORK PARTICIPA-
TION REQUIREMENT. 
Section 407(c)(2) of the Social Security Act (42 
U.S.C. 607(c)(2)) is amended by striking subparagraph 
(D).
659
SEC. 5306. COUNTING OF UP TO 2 YEARS OF VOCATIONAL 
OR 
EDUCATIONAL 
TRAINING 
(INCLUDING 
POSTSECONDARY EDUCATION), WORK-STUDY, 
AND RELATED INTERNSHIPS AS WORK AC-
TIVITIES. 
Section 407(d)(8) of the Social Security Act (42 
U.S.C. 607(d)(8)) is amended to read as follows: 
‘‘(8) not more than 24 months of participation 
by an individual in—
‘‘(A) vocational or educational training (in-
cluding postsecondary education), at an eligible 
educational institution (as defined in section 
404(h)(5)(A)) leading to attainment of a cre-
dential from the institution related to employ-
ment or a job skill; 
‘‘(B) a State or Federal work-study pro-
gram under part C of title IV of the Higher 
Education Act of 1965 or an internship related 
to vocational or postsecondary education, super-
vised by an eligible educational institution (as 
defined in section 404(h)(5)(A)); or 
‘‘(C) a course of study leading to adult lit-
eracy, in which English is taught as a second 
language, or leading to a certificate of high 
school equivalency, if the State considers the 
activities important to improving the ability of
660
the individual to find and maintain employ-
ment.’’. 
SEC. 5307. LIMITED COUNTING OF CERTAIN ACTIVITIES 
LEADING TO EMPLOYMENT AS WORK ACTIV-
ITY. 
(a) IN GENERAL.—Section 407(d) of the Social Secu-
rity Act (42 U.S.C. 607(d)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(11); 
(2) by striking the period at the end of para-
graph (12) and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(13) Up to 6 months of participation (as de-
termined by the State) in services designed to im-
prove future employment opportunities, including 
substance abuse treatment services, services to ad-
dress sexual or domestic violence, and physical reha-
bilitation and mental health services.’’. 
(b) CONFORMING AMENDMENT.—Section 407(c)(1) 
of such Act (42 U.S.C. 607(c)(1)) is amended by striking 
‘‘and (12)’’ each place it appears and inserting ‘‘(12), and 
(13)’’.
661
SEC. 5308. ELIMINATION OF SEPARATE WORK PARTICIPA-
TION RATE FOR 2-PARENT FAMILIES. 
Section 407 of the Social Security Act (42 U.S.C. 
607) is amended—
(1) in subsection (a), by striking paragraph (2); 
and 
(2) in subsection (b)—
(A) by striking paragraphs (2) and (3); 
(B) in paragraph (4), by striking ‘‘para-
graphs (1)(B) and (2)(B)’’ and inserting ‘‘para-
graph (1)(B)’’; 
(C) in paragraph (5), by striking ‘‘rates’’ 
and inserting ‘‘rate’’; and 
(D) by redesignating paragraphs (4) and 
(5) as paragraphs (2) and (3), respectively. 
SEC. 5309. ADDITION OF POVERTY REDUCTION BONUS TO 
TANF. 
Section 403(a) of the Social Security Act (42 U.S.C. 
603(a)), is amended by adding at the end the following: 
‘‘(6) BONUS TO REWARD STATES THAT REDUCE 
POVERTY.—
‘‘(A) IN
GENERAL.—The Secretary shall 
make a grant pursuant to this paragraph to 
each State for each fiscal year beginning with 
fiscal year 2005 for which the State is a quali-
662
fied poverty reduction State, as determined 
under subparagraph (C). 
‘‘(B) AMOUNT OF GRANT.—With respect 
to a fiscal year, each State that the Secretary 
determines is a qualified poverty reduction 
State for that fiscal year shall receive a grant 
in an amount equal to the ratio of the amount 
appropriated under subparagraph (D) for that 
fiscal year to the total number of all such 
States for that fiscal year. 
‘‘(C) DETERMINATION OF QUALIFIED POV-
ERTY
REDUCTION
STATES.—For purposes of 
subparagraph (A), a State shall be considered a 
qualified poverty reduction State for a fiscal 
year if the State satisfies the following: 
‘‘(i) PROVISION OF CERTAIN ASSIST-
ANCE.—The State demonstrates to the 
Secretary that the State program funded 
under this part provides in each local polit-
ical subdivision of the State for at least 3 
of the following: 
‘‘(I) A work expense or transpor-
tation allowance for any low-income 
family that is not receiving assistance 
under the State program.
663
‘‘(II) The use of income dis-
regards sufficient to allow a family to 
remain eligible for at least partial as-
sistance under the State program 
until the sum of the family’s earned 
income and cash assistance exceed the 
poverty line applicable to such family. 
‘‘(III) On-the-job training or 
work/study programs in occupations 
likely to provide a livable wage. For 
purposes of this subclause, the term 
‘livable wage’ means such hourly wage 
as is necessary for an employee to 
earn, while working 40 hours a week 
on a full-year basis, an amount equal 
to the amount of the Federal poverty 
level for a family of 4 for that year 
(as published in the Federal Register 
by the Department of Health and 
Human Services under the authority 
of section 673(2) of the Omnibus 
Budget Reconciliation Act of 1981). 
‘‘(IV) Temporary subsidized em-
ployment that provides at least the 
minimum wage applicable under sec-
664
tion 6 of the Fair Labor Standards 
Act for parents or caregivers who are 
unable to find other employment. 
‘‘(V) Non-recurrent assistance to 
help pay for the repair of a vehicle or 
appliance, past-due rent, a utility or 
fuel bill, vehicle licensing or insurance 
costs, or for other purposes deemed 
necessary by the State to enable eligi-
ble families with children to maintain 
stable work and living situations. 
‘‘(VI) A minimum monthly child 
support payment paid by the State to 
a low-income family with at least 1 
child support order if the noncustodial 
parent does not pay the minimum 
payment required under the order. 
‘‘(VII) With respect to families 
that have assigned to the State in ac-
cordance with section 408(a)(3) any 
child support rights a family member 
may have (on behalf of the family 
member or of any other person for 
whom the family member has applied 
for or is receiving such assistance), a
665
pass through of child support collec-
tions to the family, with at least $100 
per month of the pass-through pay-
ment disregarded for purposes of cal-
culating assistance for the family 
under the State program funded 
under this part. 
‘‘(VIII) 
An 
increase 
in 
the 
State’s minimum wage to at least 
$6.15 per hour or a State minimum 
wage indexed to inflation. 
‘‘(ii) DEMONSTRATION OF IMPROVED 
OUTCOMES
FOR
CURRENT
AND
FORMER 
RECIPIENTS OF ASSISTANCE.—
‘‘(I) IN GENERAL.—With respect 
to a fiscal year, the State is one of the 
10 States with the greatest year-to-
year decline or, in the absence of 10 
such States, the least year-to-year in-
crease, in the child poverty rate ad-
justed by the severity of poverty. For 
purposes of this subclause, the child 
poverty rate adjusted by the severity 
of poverty shall be determined with 
respect to a State for a fiscal year by
666
multiplying the State’s percentage of 
children with family income below the 
poverty line for that fiscal year by the 
average difference per poor child in 
the State between the child’s family 
income and the poverty line. 
‘‘(II) DETERMINATION
OF
IN-
COME.—For purposes of subclause 
(I), the Secretary shall, to the extent 
feasible, consider the following in cal-
culating a family’s income: 
‘‘(aa) Cash income, such as 
earnings, child support received 
by the family, and government 
cash payments. 
‘‘(bb) 
Benefits 
received 
under the Food Stamp Act of 
1977. 
‘‘(cc) Federal, State, or local 
income taxes paid by the family 
for the preceding taxable year 
and the refundable portion of any 
tax credits received. 
‘‘(D) APPROPRIATION.—Out of any money 
in the Treasury of the United States not other-
667
wise appropriated, there is appropriated for fis-
cal year 2005 and each fiscal year thereafter, 
$200,000,000 to make the grants required 
under this paragraph.’’. 
SEC. 5310. PARTICIPATION IN WORKFORCE INVESTMENT 
BOARDS. 
(a) STATE WORKFORCE INVESTMENT BOARDS.—
Section 111(b)(1)(C) of the Workforce Investment Act of 
1998 (29 U.S.C. 2821(b)(1)(C)) is amended—
(1) by redesignating clause (vii) as clause (viii); 
(2) in clause (vi), by striking ‘‘and’’ at the end; 
and 
(3) by inserting after clause (vi) the following: 
‘‘(vii) a representative of a lead State 
agency with responsibility for the State 
program funded under part A of title IV of 
the Social Security Act (42 U.S.C. 601 et 
seq.); and’’. 
(b) LOCAL WORKFORCE INVESTMENT BOARDS.—
Section 117(b)(2)(A) of the Workforce Investment Act of 
1998 (29 U.S.C. 2832(b)(2)(A)) is amended—
(1) in clause (v), by striking ‘‘and’’ at the end; 
and 
(2) by adding at the end the following:
668
‘‘(vii) a representative of the local 
agency, if any, with responsibility for the 
program funded under part A of title IV of 
the Social Security Act (42 U.S.C. 601 et 
seq.); and’’. 
SEC. 5311. CLARIFICATION OF TANF PURPOSE. 
Section 401(a) of the Social Security Act (42 U.S.C. 
601(a)) is amended—
(1) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; and 
(2) by inserting after paragraph (2), the fol-
lowing: 
‘‘(3) reduce poverty among families with chil-
dren;’’.
SEC. 5312. EFFECTIVE DATE. 
(a) IN GENERAL.—Except as provided in subsection 
(b), the amendments made by this subtitle take effect on 
October 1, 2003. 
(b) STATE OPTION TO PHASE-IN REPLACEMENT OF 
CASELOAD
REDUCTION
CREDIT
WITH
EMPLOYMENT 
CREDIT AND DELAY APPLICABILITY OF OTHER PROVI-
SIONS.—A State may elect to have the amendments made 
by sections 5302(b), 5303, and 5304 of this Act not apply 
to the State program funded under part A of title IV of 
the Social Security Act until October 1, 2005, and if the
669
State makes the election, then, in determining the partici-
pation rate of the State for purposes of sections 407 and 
409(a)(3) of the Social Security Act for fiscal year 2005, 
the State shall be credited with 1⁄2 of the reduction in the 
rate that would otherwise result from applying section 
407(a)(2) of the Social Security Act (as added by section 
5302(a)(1) of this Act) to the State for fiscal year 2004 
and 1⁄2 of the reduction in the rate that would otherwise 
result from applying such section 407(b)(2) to the State 
for fiscal year 2005. 
Subtitle E—Incentives to Serve 
Families 
SEC. 5401. DEVELOPMENT OF MODEL CASEWORKER TRAIN-
ING MATERIALS. 
(a) DEVELOPMENT OF MODEL CASEWORKER TRAIN-
ING MATERIALS.—The Secretary of Health and Human 
Services shall develop model training materials (including 
guidebooks and other resources) for caseworkers assigned 
to administer the provision of assistance to a family under 
the State program funded under part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.). The model 
training materials shall be designed to train the case-
workers to improve the access of the family to other serv-
ices and benefits that the family, or individuals within the 
family, may be eligible for, including—
670
(1) benefits under the food stamp program, as 
defined in section 3(h) of the Food Stamp Act of 
1977 (7 U.S.C. 2012(h)); 
(2) medical assistance under the medicaid pro-
gram under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.); 
(3) child health assistance under the State chil-
dren’s health insurance program under title XXI of 
the Social Security Act (42 U.S.C. 1397aa et seq.); 
(4) the special supplemental nutrition program 
for women, infants, and children (WIC) under sec-
tion 17 of the Child Nutrition Act of 1966 (42 
U.S.C. 1786); 
(5) child care assistance; 
(6) transportation assistance; 
(7) education or training assistance; 
(8) job placement activities; 
(9) the earned income tax credit under section 
32 of the Internal Revenue Code of 1986; and 
(10) services to treat or alleviate substance 
abuse, mental illness, or family violence. 
(b) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary of Health 
and Human Services to carry out this section such sums
671
as may be necessary for fiscal year 2004 and each fiscal 
year thereafter. 
SEC. 5402. EXCEPTION TO LIMIT ON TANF ADMINISTRATIVE 
EXPENDITURES FOR CASEWORKER BONUSES 
AND OTHER STATE INITIATIVES TO ELIMI-
NATE BARRIERS TO WORK. 
Section 404(b)(2) of the Social Security Act (42 
U.S.C. 604(b)(2)) is amended—
(1) in the heading, by striking ‘‘EXCEPTION’’; 
and inserting ‘‘EXCEPTIONS’’; 
(2) by striking ‘‘Paragraph (1)’’ and inserting 
the following: 
‘‘(A) INFORMATION
TECHNOLOGY
AND 
COMPUTERIZATION.—Paragraph (1)’’; and 
(3) by adding at the end the following: 
‘‘(B) CASEWORKER BONUSES AND OTHER 
STATE
INITIATIVES
TO
ELIMINATE
BARRIERS 
TO WORK.—
‘‘(i) IN
GENERAL.—Paragraph (1) 
shall not apply to the use of a grant to 
provide a cash bonus to a caseworker for 
a family receiving assistance under the 
State program funded under this part 
based on the number of such families that 
the State determines the caseworker as-
672
sists achieve a goal described in clause (ii), 
or for expenditures incurred for other 
State initiatives designed to eliminate bar-
riers to work for families receiving assist-
ance under the State program funded 
under this part. 
‘‘(ii) CASEWORKER GOALS.—For pur-
poses of clause (i), the goals described in 
this clause are the following: 
‘‘(I) Obtain employment that 
provides wages and benefits that en-
able the family to have income that 
exceeds the poverty line applicable to 
a family of the size involved. 
‘‘(II) Obtain supportive services 
and benefits for which the family is el-
igible. 
‘‘(III) With respect to an indi-
vidual within a family, overcome a 
barrier to the individual’s employ-
ment, including a barrier resulting 
from a lack of transportation or child 
care, a life crisis due to family vio-
lence, substance abuse, or a mental or 
physical disability.
673
‘‘(IV) With respect to an indi-
vidual within a family, retain employ-
ment for at least 6 months.’’. 
SEC. 5403. STRENGTHENING OF TANF INDIVIDUAL RESPON-
SIBILITY PLANS. 
Section 408(b) of the Social Security Act (42 U.S.C. 
608(b)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)—
(i) in the matter preceding clause (i), 
by striking ‘‘may’’ and inserting ‘‘shall’’; 
and 
(ii) in clause (i), by striking ‘‘imme-
diately into private sector employment’’ 
and inserting ‘‘into a job leading to stable 
employment with earnings above the pov-
erty line applicable to a family of the size 
involved (based on 35 hours of work per 
week) and health care benefits for the em-
ployee and the employee’s dependents’’; 
and 
(B) in subparagraph (B)—
(i) in the matter preceding clause (i), 
by striking ‘‘may’’ and inserting ‘‘shall’’;
674
(ii) in clause (i), by striking ‘‘(or, at 
the option of the State, 180 days)’’; 
(iii) in clause (ii), by striking ‘‘(or, at 
the option of the State, 90 days)’’; and
(2) by striking paragraph (4) and inserting the 
following: 
‘‘(4) PENALTY FOR NONCOMPLIANCE BY THE 
STATE.—In addition to any other penalties that may 
be imposed against a State for failure to comply 
with the requirements of this part, the Secretary 
may reduce the grant payable to a State under sec-
tion 403(a)(1) if the Secretary determines that the 
State has failed, without good cause, to comply with 
the requirements of this subsection.’’. 
SEC. 5404. EFFECTIVE DATE. 
The amendments made by this subtitle take effect on 
October 1, 2003. 
Subtitle F—Addressing Work 
Barriers 
SEC. 5501. FUNDING FOR ACCESS TO JOBS PROGRAM. 
Section 3037 of the Transportation Equity Act for 
the 21st Century (49 U.S.C. 5309 note) is amended in 
subsection (l)(1)—
(1) in subparagraph (A), by striking clauses 
(iv) and (v) and inserting the following:
675
‘‘(iv) $150,000,000 for fiscal year 
2004; 
‘‘(v) $170,000,000 for fiscal year 
2005; 
‘‘(vi) $190,000,000 for fiscal year 
2006; 
‘‘(vii) $200,000,000 for fiscal year 
2007; and 
‘‘(viii) $225,000,000 for fiscal year 
2008.’’; 
(2) in subparagraph (B), by striking clauses 
(iv) and (v) and inserting the following: 
‘‘(iv) $50,000,000 for each of fiscal 
years 2004 through 2008.’’; and 
(3) in subparagraph (C)—
(A) by inserting ‘‘and’’ after the semicolon 
in clause (ii); 
(B) by striking ‘‘; and’’ in clause (iii) and 
inserting a period; and 
(C) by striking clause (iv). 
SEC. 5502. REQUIREMENT TO IDENTIFY AND PROVIDE 
SERVICES TO ADDRESS BARRIERS TO EM-
PLOYMENT OF TANF RECIPIENTS. 
(a) REQUIREMENT TO IDENTIFY AS PART OF INDI-
VIDUAL RESPONSIBILITY PLAN.—Section 408(b) of the
676
Social Security Act (42 U.S.C. 608(b)), as amended by 
section 5403, is amended—
(1) in paragraph (1), by striking ‘‘who—’’ and 
all that follows and inserting ‘‘has attained 18 years 
of age, using caseworkers who are trained to utilize 
assessment methods approved by the State to iden-
tify recipients with severe barriers to employment, 
such as being subjected to domestic violence, having 
mental health, substance or alcohol abuse problems, 
homelessness, a physical or mental disability, or illit-
eracy problems.’’; and 
(2) in paragraph (2)(A)(iv), by inserting ‘‘over-
come any severe barriers to employment identified 
by the State under paragraph (1), and to’’ after 
‘‘will be able to’’. 
(b) EXEMPTION FROM WORK REQUIREMENT
IF 
STATE FAILS TO PROVIDE SERVICES.—Section 407(e) of 
the Social Security Act (42 U.S.C. 607(e)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraphs (2) and (3)’’; 
(2) in paragraph (2), in the heading, by strik-
ing ‘‘EXCEPTION’’; and inserting ‘‘SINGLE CUSTO-
DIAL PARENT WITH A YOUNG CHILD’’; and 
(3) by adding at the end the following:
677
‘‘(3) INDIVIDUAL WITH A SEVERE BARRIER TO 
EMPLOYMENT TO WHOM THE STATE FAILS TO PRO-
VIDE SERVICES.—Notwithstanding paragraph (1), a 
State may not reduce assistance under the State 
program funded under this part based on a refusal 
of an individual to engage in work required in ac-
cordance with this section if, as part of the assess-
ment required under section 408(b)(1), the indi-
vidual has been identified as having a severe barrier 
to employment and the State fails to provide services 
necessary to overcome the barrier.’’. 
SEC. 5503. STATE OPTION TO ESTABLISH EXCEPTIONS 
FROM TIME LIMIT FOR RECEIPT OF TANF AS-
SISTANCE BASED ON SEVERE BARRIERS TO 
EMPLOYMENT. 
Section 408(a)(7)(C) of the Social Security Act (42 
U.S.C. 608(a)(7)(C)) is amended—
(1) in clause (ii), by striking ‘‘The average’’ 
and inserting ‘‘Subject to clause (iv), the average’’; 
and 
(2) by adding at the end the following: 
‘‘(iv) STATE OPTION FOR EXCEPTIONS 
BASED ON SEVERE BARRIERS TO EMPLOY-
MENT.—At State option, the limit de-
scribed in clause (ii) shall not apply with
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respect to each category of exception based 
on severe barriers to employment as the 
State may determine.’’. 
SEC. 5504. EFFECTIVE DATE. 
The amendments made by this subtitle take effect on 
October 1, 2003. 
Subtitle G—Protection for Families 
in Need 
SEC. 5601. EARN-BACK OF MONTHS OF TANF ASSISTANCE. 
Section 408(a)(7) of the Social Security Act (42 
U.S.C. 608(a)(7)), as amended by section 5301, is amend-
ed by inserting after subparagraph (E) the following: 
‘‘(F) EARN-BACK OF MONTHS OF ASSIST-
ANCE.—In determining the number of months 
for which an adult has received assistance 
under a State or tribal program funded under 
this part, the State or tribe shall disregard 1 
month for every 3 months that the adult is en-
gaged in a work activity defined in paragraph 
(1), (2), or (3) of section 407(d) in accordance 
with the requirements of section 407(c) and 
during which the individual is not receiving as-
sistance under the State program funded under 
this part.’’.
679
SEC. 5602. ESTABLISHMENT OF A FAIR CONCILIATION 
PROCESS FOR FAMILIES UNDER TANF. 
Section 408 of the Social Security Act (42 U.S.C. 
608) is amended by adding at the end the following: 
‘‘(h) FAIR CONCILIATION PROCEDURES.—
‘‘(1) IN GENERAL.—Any case closed under the 
State program funded under this part shall be sub-
ject to a customer service review in accordance with 
the requirements of this subsection to ensure that a 
case is not erroneously terminated and to give a 
family another opportunity to participate in the pro-
gram. 
‘‘(2) REQUIREMENTS.—
‘‘(A) INITIAL REVIEW.—A customer service 
reviewer shall examine the case record for each 
case closed to determine—
‘‘(i) whether the caseworker respon-
sible for the case has attempted to make 
personal contact with the parent or care-
giver before recommending closure of the 
case; and 
‘‘(ii) whether sufficient documentation 
exists in the case record to establish both 
a factual and policy basis for closure of the 
case, including documentation of written
680
notice of the closure to the parent or care-
giver. 
‘‘(B) RETURN
TO
CASEWORKER.—Any 
case in which a customer service reviewer deter-
mines that no personal contact has been at-
tempted before closure of the case, or that in-
sufficient documentation exists, shall be re-
turned to the caseworker for the provision of 
such attempted contact or documentation. 
‘‘(C) ADDITIONAL ATTEMPTED PERSONAL 
CONTACT.—If a case is not returned to a case-
worker under subparagraph (A), the customer 
service reviewer shall attempt to make personal 
contact with the parent or caregiver involved, 
including, if 3 attempts are required, an at-
tempt outside of normal business hours. A case 
shall be closed after 3 unsuccessful attempts. 
‘‘(D) DETERMINATION
OF
GOOD
CAUSE 
FOR EXCEPTION TO CLOSURE.—
‘‘(i) IN GENERAL.—With respect to a 
case in which a caseworker or a customer 
service reviewer has made personal contact 
with the parent or caregiver, the customer 
service reviewer shall determine whether 
barriers to participation in the program
681
exist, whether there are grounds for ex-
emption from the time limits or any other 
program requirements, or whether there 
was an error in the application of the facts 
or policy. 
‘‘(ii) MODIFICATION
OF
INDIVIDUAL 
RESPONSIBILITY
PLAN.—If a customer 
service reviewer determines under clause 
(i) that a case should not be closed, the 
customer service reviewer shall work with 
the parent or caregiver to modify the par-
ent’s or caregiver’s individual responsibility 
plan developed under subsection (b) as ap-
propriate, including with respect to the 
provision of any additional services needed 
to assist the individual in becoming work-
ready. 
‘‘(E) PLAN FOR COMPLIANCE.—If a cus-
tomer service reviewer determines that subpara-
graph (D) does not apply and a parent or care-
giver is not subject to the time limit for receipt 
of assistance under subsection (a)(7), the re-
viewer shall ask the parent or caregiver if the 
parent or caregiver is now willing to comply 
with program requirements, and establish a
682
plan with the parent or caregiver for compli-
ance. If the parent or caregiver does not comply 
with such plan, the case shall be closed without 
regard to the preceding subparagraphs of this 
paragraph. 
‘‘(F) WRITTEN NOTICE.—With respect to 
a case closed by a customer service reviewer 
under this subsection, the reviewer shall send 
the family involved a final written notice of the 
case closure that informs the family of—
‘‘(i) the specific factual basis of the 
closure; 
‘‘(ii) the steps that the family can 
take to maintain eligibility for assistance 
under the State program; and 
‘‘(iii) the procedure for appealing the 
closure decision.’’. 
SEC. 5603. TREATMENT OF ALIENS UNDER THE TANF PRO-
GRAM. 
(a) EXCEPTION TO 5-YEAR BAN FOR QUALIFIED 
ALIENS.—Section 403(c)(2) of the Personal Responsi-
bility and Work Opportunity Reconciliation Act of 1996 
(8 U.S.C. 1613(c)(2)) is amended by adding at the end 
the following:
683
‘‘(L) Benefits under the Temporary Assist-
ance for Needy Families program described in 
section 402(b)(3)(A).’’. 
(b) BENEFITS
NOT
SUBJECT
TO
REIMBURSE-
MENT.—Section 423(d) of the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 
1138a note) is amended by adding at the end the fol-
lowing: 
‘‘(12) Benefits under part A of title IV of the 
Social Security Act except for cash assistance pro-
vided to a sponsored alien who is subject to deeming 
pursuant to section 408(i) of the Social Security 
Act.’’. 
(c) TREATMENT OF ALIENS.—Section 408 of the So-
cial Security Act (42 U.S.C. 608), as amended by section 
5602, is amended by adding at the end the following: 
‘‘(i) SPECIAL RULES RELATING TO THE TREATMENT 
OF 213A ALIENS.—
‘‘(1) IN GENERAL.—In determining whether a 
213A alien is eligible for cash assistance under a 
State program funded under this part, and in deter-
mining the amount or types of such assistance to be 
provided to the alien, the State shall apply the rules 
of paragraphs (1), (2), (3), (5), and (6) of sub-
section (f) of this section by substituting ‘213A’ for
684
‘non-213A’ each place it appears, subject to section 
421(e) of the Personal Responsibility and Work Op-
portunity Reconciliation Act of 1996, and subject to 
section 421(f) of such Act (which shall be applied by 
substituting ‘section 408(i) of the Social Security 
Act’ for ‘subsection (a)’). 
‘‘(2) 213A ALIEN
DEFINED.—An alien is a 
213A alien for purposes of this subsection if the affi-
davit of support or similar agreement with respect to 
the alien that was executed by the sponsor of the 
alien’s entry into the United States was executed 
pursuant to section 213A of the Immigration and 
Nationality Act.’’. 
SEC. 5604. EFFECTIVE DATE. 
The amendments made by this subtitle take effect on 
October 1, 2003. 
Subtitle H—TANF Reauthorization 
SEC. 5701. REAUTHORIZATION OF TANF STATE FAMILY AS-
SISTANCE GRANTS. 
Section 403(a)(1) of the Social Security Act (42 
U.S.C. 603(a)(1)) is amended—
(1) in subparagraph (A), by striking ‘‘fiscal 
years 1996, 1997, 1998, 1999, 2000, 2001, and 
2002’’ and inserting ‘‘the fiscal years during the pe-
685
riod beginning with fiscal year 1996 and ending with 
fiscal year 2009’’; and 
(2) in subparagraph (E), by striking ‘‘fiscal 
years 1996, 1997, 1998, 1999, 2000, 2001, and 
2002’’ and inserting ‘‘each of the fiscal years during 
the period beginning with fiscal year 1996 and end-
ing with fiscal year 2009’’. 
SEC. 5702. PROHIBITION ON SUPPLANTATION OF TANF 
FUNDS. 
Section 408(a) of the Social Security Act (42 U.S.C. 
608(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(12) SUPPLEMENT
NOT
SUPPLANT.—Funds 
made available under this part shall be used to sup-
plement, not supplant, other Federal, State, or local 
funds that are used for existing services and activi-
ties that promote the purposes of this part.’’.
TITLE VI—FAIR START 
Subtitle A—Child and Adult Care 
Food Program 
SEC. 6001. PARTICIPATION OF FOR-PROFIT CARE CENTERS 
IN CHILD AND ADULT CARE FOOD PROGRAM. 
Section 17(a)(2)(B) of the Richard B. Russell Na-
tional School Lunch Act (42 U.S.C. 1766(a)(2)(B)) is 
amended—
686
(1) by striking ‘‘if—’’ and all that follows 
through ‘‘2002, at’’ and inserting ‘‘if at’’; and 
(2) by striking ‘‘meals; or’’ and all that follows 
and inserting ‘‘meals;’’. 
SEC. 6002. CATEGORICAL ELIGIBILITY REQUIREMENTS. 
Section 17(f)(3)(A)(ii) of the Richard B. Russell Na-
tional School Lunch Act (42 U.S.C. 1766(f)(3)(A)(ii)) is 
amended by adding at the end the following: 
‘‘(V) 
CATEGORICAL
ELIGI-
BILITY.—In making a determination 
of income eligibility under subclauses 
(I)(cc) and (II), a family or group day 
care home sponsoring organization 
may consider a provider participating 
in or subsidized under, or a provider 
with a child participating in or sub-
sidized under, a federally or State 
supported child care or other benefit 
program with an income eligibility 
limit that does not exceed the eligi-
bility standard for free or reduced 
price meals under section 9 to be a 
provider whose household meets the 
income eligibility guidelines under sec-
tion 9.’’.