under part H, or a job placement voucher under
the job placement voucher program established
by the State under part I to any individual who,
by reason of section 497(b), is prohibited from
participating in the work first program oper-
ated by the State, and shall not provide such a
position or such a voucher to any other individ-
ual; and
‘‘(D) shall provide to participants in such
programs such case management services as are
necessary to ensure the integrated provision of
benefits and services under such programs.’’.
(b) 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—Individual Responsibility Plan
‘‘SEC. 481. ASSESSMENT.
‘‘The State agency referred to in section 402(a)(3)
shall make an initial assessment of the skills, prior work
experience, and employability of each individual for whom
section 402(a)(50)(A) requires the State to develop an in-
dividual responsibility plan.
‘‘SEC. 482. INDIVIDUAL RESPONSIBILITY PLANS.
‘‘(a) IN GENERAL.—On the basis of the assessment
made under section 481 with respect to an individual, the
State agency, in consultation with the individual, shall de-
velop an individual responsibility plan for the individual,
which—
‘‘(1) shall provide that participation by the indi-
vidual in job search activities shall be a condition of
eligibility for aid under the State plan approved
under part A, except during any period for which
the 
individual 
is 
employed 
full-time 
in 
an
unsubsidized job in the private sector;
‘‘(2) sets forth an employment goal for the indi-
vidual and a plan for moving the individual imme-
diately into private sector employment;
‘‘(3) sets forth the obligations of the individual,
which may include a requirement that the individual
attend school, maintain certain grades and attend-
ance, keep school age children of the individual in
school, immunize children, attend parenting and
money management classes, or do other things that
will help the individual become and remain employed
in the private sector; and
‘‘(4) may require that the individual enter the
State program established under part G, if the case-
worker determines that the individual will need edu-
cation, training, job placement assistance, wage en-
hancement, or other services to become employed in
the private sector.
‘‘(b) TIMING.—The State agency shall comply with
subsection (a) with respect to an individual—
‘‘(1) within 90 days (or, at the option of the
State, 180 days) after the effective date of this part,
in the case of an individual who, as of such effective
date, is a recipient of aid under the State plan ap-
proved under part A; or
‘‘(2) within 30 days (or, at the option of the
State, 90 days) after the individual is determined to
be eligible for such aid, in the case of any other indi-
vidual.
‘‘SEC. 483. PROVISION OF PROGRAM AND EMPLOYMENT IN-
FORMATION.
‘‘The State shall inform all applicants for and recipi-
ents of aid under the State plan approved under part A
of all available services under the State plan for which
they are eligible.
‘‘SEC. 484. REQUIREMENT THAT RECIPIENTS ENTER THE
WORK FIRST PROGRAM.
‘‘(a) IN GENERAL.—Beginning with fiscal year 2004,
the State shall place recipients of aid under the State plan
approved under part A, who have not become employed
in the private sector within 1 year after signing an individ-
ual responsibility plan, in the first available slot in the
State program established under part G, except as pro-
vided in subsection (b).
‘‘(b) EXCEPTIONS.—A State may not be required to
place a recipient of such aid in the State program estab-
lished under part G if the recipient—
‘‘(1) is ill, incapacitated, or of advanced age;
‘‘(2) has not attained 18 years of age;
‘‘(3) is caring for a child or parent who is ill
or incapacitated; or
‘‘(4) is enrolled in school or in educational or
training programs that will lead to private sector
employment.
‘‘SEC. 485. PENALTIES.
‘‘(a) STATE NOT OPERATING A WORK FIRST PRO-
GRAM UNDER A STATE MODEL OR A WORKFARE PRO-
GRAM.—In the case of a State that is not operating a pro-
gram under subpart 2 of part G or under part H:
‘‘(1) FAILURE TO COMPLY WITH INDIVIDUAL
RESPONSIBILITY PLAN OR AGREEMENT OF MUTUAL
RESPONSIBILITY.—
‘‘(A) PROGRESSIVE
REDUCTIONS
IN
AID
FOR 1ST AND 2ND FAILURES.—The amount of
aid otherwise payable under the State plan ap-
proved under part A to a family that includes
an individual who fails without good cause to
comply with an individual responsibility plan
(or, if the State has established a program
under subpart 1 of part G and the individual is
required to participate in the program, an
agreement of mutual responsibility) signed by
the individual (other than by reason of conduct
described in paragraph (2)) shall be reduced
by—
‘‘(i) 33 percent for the 1st such act of
noncompliance; or
‘‘(ii) 66 percent for the 2nd such act
of noncompliance.
‘‘(B) DENIAL OF AID FOR 3RD FAILURE.—
In the case of the 3rd such act of noncompli-
ance, the family of which the individual is a
member shall not thereafter be eligible for aid
under the State plan approved under part A.
‘‘(C) ACTS OF NONCOMPLIANCE.—For pur-
poses of this paragraph, a 1st act of noncompli-
ance by an individual continues for more than
1 calendar month shall be considered a 2nd act
of noncompliance, and a 2nd act of noncompli-
ance that continues for more than 3 calendar
months shall be considered a 3rd act of non-
compliance.
‘‘(2) DENIAL OF AFDC TO ADULTS REFUSING
TO WORK, LOOK FOR WORK, OR ACCEPT A BONA
FIDE OFFER OF EMPLOYMENT.—
‘‘(A) REFUSAL
TO
WORK
OR
LOOK
FOR
WORK.—If an unemployed individual who has
attained 18 years of age refuses to work or look
for work—
‘‘(i) in the case of the 1st such re-
fusal, aid under the State plan approved
under part A shall not be payable with re-
spect to the individual until the later of—
‘‘(I) a period of not less than 6
months after the date of the first such
refusal; or
‘‘(II) the first date the individual
agrees to work or look for work.
‘‘(ii) in the case of the 2nd such re-
fusal, the family of which the individual is
a member shall not thereafter be eligible
for aid under the State plan approved
under part A.
‘‘(B) REFUSAL TO ACCEPT A BONA FIDE
OFFER
OF
EMPLOYMENT.—If an unemployed
individual who has attained 18 years of age re-
fuses to accept a bona fide offer of employment,
the family of which the individual is a member
shall not thereafter be eligible for aid under the
State plan approved under part A.
‘‘(b) OTHER STATES.—In the case of any other
State, the State shall reduce, by such amount as the State
considers appropriate, the amount of aid otherwise pay-
able under the State plan approved under part A to a fam-
ily that includes an individual who fails without good cause
to comply with an individual responsibility plan signed by
the individual.
‘‘Part G—Work First Program
‘‘Subpart 1—Federal Model
‘‘SEC. 491. ESTABLISHMENT AND OPERATION OF STATE
PROGRAMS.
‘‘A work first program meets the requirements of this
subpart if the program meets the following requirements:
‘‘(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 aid to families with depend-
ent children with the private sector labor market 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 permeated with
an emphasis on employment and with an under-
standing that minimum wage jobs are a stepping
stone to more highly paid 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) USE OF INCENTIVES.—The State shall use
incentives to change the culture of each State office
with responsibilities under the State plan approved
under part A, improve the performance of employ-
ees, and ensure that the objective of each employee
of each such State office is to find an unsubsidized
paid job for each program participant.
‘‘(5) CASEWORKER TRAINING.—The State may
provide such training to caseworkers and related
personnel (including through the use of incentives)
as may be necessary to ensure successful job place-
ments that result in full-time public or private em-
ployment (outside the State agencies with respon-
sibilities under part A) for program participants.
The State shall reward any caseworker who enters
an agreement of mutual responsibility with a pro-
gram participant that provides for education or
training activities as well as work.
‘‘(6) REPORTS.—Each office with responsibility
for operating the program shall make monthly sta-
tistical reports to the governing body of the State,
county, and city in which located, of job placements
and the number of program participants who are no
longer receiving aid under the State plan approved
under part A as a result of participation in the pro-
gram.
‘‘(7) CASE MANAGEMENT TEAMS.—
‘‘(A) DUTIES.—The program requires the
State to assign to each individual required or
allowed to participate in the program a case
management team that shall meet with the pro-
gram participant and develop an agreement of
mutual responsibility for the individual.
‘‘(B) DEADLINE.—
‘‘(i) IN GENERAL.—The case manage-
ment team shall comply with subparagraph
(A) with respect to a program participant
within 30 days (or, at the option of the
State, within a period not exceeding 90
days) after the later of—
‘‘(I) the date the application of
the program participant for aid under
the State plan approved under part A
was approved; or
‘‘(II) the date this subpart first
applies to the State.
‘‘(ii) REPEAT PARTICIPANTS.—Within
30 days after the State makes a deter-
mination under section 497(b)(2) to allow
an individual to participate in the pro-
gram, the case management team shall
meet with the individual and develop an
agreement of mutual responsibility for the
individual.
‘‘(8) AGREEMENTS OF MUTUAL RESPONSIBIL-
ITY.—The agreement of mutual responsibility for a
participant shall—
‘‘(A) contain an individualized comprehen-
sive plan, developed by the team and the partic-
ipant, to move the participant into a full-time
unsubsidized job, through activities under sec-
tion 492, 493, 494, 495, or 496;
‘‘(B) to the greatest extent possible, be de-
signed to move the participant as quickly as
possible into whatever type and amount of work
as the participant is capable of handling, and
increases the responsibility and amount of work
over time until the participant is able to work
full-time;
‘‘(C) where necessary, provide for edu-
cation or training of the participant;
‘‘(D) provide that aid under the State plan
is to be paid to the participant based on the
number of hours that the participant spends in
activities provided for in the agreement;
‘‘(E) provide that the participant shall
spend at least 30 hours per week (or, at State
option, at least 20 hours per week during fiscal
years 1997 and 1998, and at least 25 hours
per week during fiscal year 1999) in activities
provided for in the agreement;
‘‘(F) provide that the participant shall ac-
cept any bona fide offer of unsubsidized full-
time employment, unless the participant has
good cause for not doing so;
‘‘(G) at the option of the State, require the
participant to undergo appropriate substance
abuse treatment; and
‘‘(H) at the option of the State, require the
participant to have his or her children receive
appropriate immunizations against disease.
‘‘(9) OPTIONS
FOR
PARTICIPANTS.—The case
manager for a program participant shall present the
participant with each option offered under the State
program through which the participant will, over
time, be moved into full-time unsubsidized employ-
ment.
‘‘(10) ONE-STOP EMPLOYMENT SHOPS.—
‘‘(A) IN GENERAL.—In carrying out the
program, the State shall utilize and make avail-
able to each program participant, through the
establishment and operation or utilization of
appropriate Federal or State one-stop employ-
ment shops, services under programs carried
out under the following provisions of law:
‘‘(i) Part A of title II of the Job
Training Partnership Act (29 U.S.C. 1601
et seq.) (relating to the adult training pro-
gram).
‘‘(ii) Part B of title II of such Act (29
U.S.C. 1630 et seq.) (relating to the sum-
mer youth employment and training pro-
grams).
‘‘(iii) Part C of title II of such Act
(29 U.S.C. 1641 et seq.) (relating to the
youth training program).
‘‘(iv) Title III of such Act (29 U.S.C.
1651 et seq.) (relating to employment and
training assistance for dislocated workers).
‘‘(v) Part B of title IV of such Act
(29 U.S.C. 1691 et seq.) (relating to the
Job Corps).
‘‘(vi) The Carl D. Perkins Vocational
and Applied Technology Education Act (20
U.S.C. 2301 et seq.).
‘‘(vii) The Adult Education Act (20
U.S.C. 1201 et seq.).
‘‘(viii) Part B of chapter 1 of title I
of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 2741 et
seq.) (relating to Even Start family lit-
eracy programs).
‘‘(ix) Subtitle A of title VII of the
Stewart B. McKinney Homeless Assistance
Act (42 U.S.C. 11421) (relating to adult
education for the homeless).
‘‘(x) Subtitle B of title VII of such
Act (42 U.S.C. 11431 et seq.) (relating to
education 
for 
homeless 
children 
and
youth).
‘‘(xi) Subtitle C of title VII of such
Act (42 U.S.C. 11441) (relating to job
training for the homeless).
‘‘(xii) The School-to-Work Opportuni-
ties Act of 1994.
‘‘(xiii) The National and Community
Service Act of 1990 (42 U.S.C. 12501 et
seq.).
‘‘(xiv) The National Skill Standards
Act of 1994.
‘‘(B) COORDINATION.—In utilizing appro-
priate Federal or State one-stop employment
shops described in subparagraph (A), the State
shall ensure coordination between the case-
worker of each program participant and the ad-
ministrators of the programs carried out under
the provisions of law described in such subpara-
graph.
‘‘(11) NONDISPLACEMENT.—The program may
not be operated in a manner that results in—
‘‘(A) the displacement of a currently em-
ployed worker or position by a program partici-
pant;
‘‘(B) the replacement of an employee who
has been terminated with a program partici-
pant; or
‘‘(C) the replacement of an individual who
is on layoff from the same position given to a
program participant or any equivalent position.
‘‘SEC. 492. REVAMPED JOBS PROGRAM.
‘‘A State that establishes a program under this sub-
part may operate a program similar to the program known
as the ‘GAIN Program’ that has been operated by River-
side County, California, under Federal law in effect imme-
diately before the date this subpart first applies to the
State of California.
‘‘SEC. 493. USE OF PLACEMENT COMPANIES.
‘‘(a) IN GENERAL.—A State that establishes a pro-
gram under this subpart may enter into contracts with
private companies (whether operated for profit or not for
profit) for the placement of participants in the program
in positions of full-time employment, preferably in the pri-
vate 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).
‘‘(B) STRUCTURE.—The contract shall
provide for the majority of the amounts to be
paid under the contract with respect to a pro-
gram participant, to be paid after the company
has placed the participant in a position of full-
time employment and the participant has been
employed in the position for such period of not
less than 5 months as the State deems appro-
priate.
‘‘(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 agreement of mutual re-
sponsibility provides for the use of placement companies
under this section, indicating that the participant is eligi-
ble for the services of such a company.
‘‘SEC. 494. TEMPORARY SUBSIDIZED JOB CREATION.
‘‘A State that establishes a program under this sub-
part may establish a program similar to the program
known as ‘JOBS Plus’ that has been operated by the State
of Oregon under Federal law in effect immediately before
the date this subpart first applies to the State of Oregon.
‘‘SEC. 495. MICROENTERPRISE.
‘‘(a) GRANTS AND LOANS TO NONPROFIT ORGANIZA-
TIONS FOR THE PROVISION OF TECHNICAL ASSISTANCE,
TRAINING, AND
CREDIT
TO
LOW
INCOME
ENTRE-
PRENEURS.—A State that establishes a program under
this subpart may make grants and loans to nonprofit orga-
nizations to provide technical assistance, training, and
credit to low income entrepreneurs for the purpose of es-
tablishing microenterprises.
‘‘(b) MICROENTERPRISE DEFINED.—For purposes of
this subsection, the term ‘microenterprise’ means a com-
mercial enterprise which has 5 or fewer employees, 1 or
more of whom owns the enterprise.
‘‘SEC. 496. WORK SUPPLEMENTATION PROGRAM.
‘‘(a) IN GENERAL.—A State that establishes a pro-
gram under this subpart may institute a work
supplementation program under which the State, to the
extent it considers appropriate, may reserve the sums that
would otherwise be payable to participants in the program
as aid to families with dependent children and use the
sums instead for the purpose of providing and subsidizing
jobs for the participants (as described in subsection
(c)(3)(A) and (B)), as an alternative to the aid to families
with dependent children that would otherwise be so pay-
able to the participants.
‘‘(b) STATE FLEXIBILITY.—
‘‘(1) Nothing in this subpart, or in any State
plan approved under part A, shall be construed to
prevent a State from operating (on such terms and
conditions and in such cases as the State may find
to be necessary or appropriate) a work supple-
mentation program in accordance with this section
and section 494 (as in effect immediately before the
date this subpart first applies to the State).
‘‘(2) Notwithstanding section 402(a)(23) or any
other provision of law, a State may adjust the levels
of the standards of need under the State plan as the
State determines to be necessary and appropriate for
carrying out a work supplementation program under
this section.
‘‘(3) Notwithstanding section 402(a)(1) or any
other provision of law, a State operating a work
supplementation program under this section may
provide that the need standards in effect in those
areas of the State in which the program is in oper-
ation may be different from the need standards in
effect in the areas in which the program is not in
operation, and the State may provide that the need
standards for categories of recipients may vary
among such categories to the extent the State deter-
mines to be appropriate on the basis of ability to
participate in the work supplementation program.
‘‘(4) Notwithstanding any other provision of
law, a State may make such further adjustments in
the amounts of the aid to families with dependent
children paid under the plan to different categories
of recipients (as determined under paragraph (3)) in
order to offset increases in benefits from needs-relat-
ed programs (other than the State plan approved
under part A) as the State determines to be nec-
essary and appropriate to further the purposes of
the work supplementation program.
‘‘(5) In determining the amounts to be reserved
and used for providing and subsidizing jobs under
this section as described in subsection (a), the State
may use a sampling methodology.
‘‘(6) Notwithstanding section 402(a)(8) or any
other provision of law, a State operating a work
supplementation program under this section—
‘‘(A) may reduce or eliminate the amount
of earned income to be disregarded under the
State plan as the State determines to be nec-
essary and appropriate to further the purposes
of the work supplementation program; and
‘‘(B) during 1 or more of the first 9
months of an individual’s employment pursuant
to a program under this subpart, may apply to
the wages of the individual the provisions of
subparagraph (A)(iv) of section 402(a)(8) with-
out regard to the provisions of subparagraph
(B)(ii)(II) of such section.
‘‘(c) RULES RELATING TO SUPPLEMENTED JOBS.—
‘‘(1) A work supplementation program operated
by a State under this section may provide that any
individual who is an eligible individual (as deter-
mined under paragraph (2)) shall take a supple-
mented job (as defined in paragraph (3)) to the ex-
tent that supplemented jobs are available under the
program. Payments by the State to individuals or to
employers under the work supplementation program
shall be treated as expenditures incurred by the
State for aid to families with dependent children ex-
cept as limited by subsection (d).
‘‘(2) For purposes of this section, an eligible in-
dividual is an individual who is in a category which
the State determines should be eligible to participate
in the work supplementation program, and who
would, at the time of placement in the job involved,
be eligible for aid to families with dependent chil-
dren under an approved State plan if the State did
not have a work supplementation program in effect.
‘‘(3) For purposes of this subsection, a supple-
mented job is—
‘‘(A) a job provided to an eligible individ-
ual by the State or local agency administering
the State plan under part A; or
‘‘(B) a job provided to an eligible individ-
ual by any other employer for which all or part
of the wages are paid by the State or local
agency.
A State may provide or subsidize under the program
any job which the State determines to be appro-
priate.
‘‘(4) At the option of the State, individuals who
hold supplemented jobs under a State’s work
supplementation program shall be exempt from the
retrospective budgeting requirements imposed pursu-
ant to section 402(a)(13)(A)(ii) (and the amount of
the aid which is payable to the family of any such
individual for any month, or which would be so pay-
able but for the individual’s participation in the
work supplementation program, shall be determined
on the basis of the income and other relevant cir-
cumstances in that month).
‘‘(d) COST LIMITATION.—The amount of the Federal
payment to a State under section 403 for expenditures in-
curred in making payments to individuals and employers
under a work supplementation program under this sub-
section shall not exceed an amount equal to the amount
which would otherwise be payable under such section if
the family of each individual employed in the program es-
tablished in the State under this section had received the
maximum amount of aid to families with dependent chil-
dren payable under the State plan to such a family with
no income (without regard to adjustments under sub-
section (b)) for the lesser of—
‘‘(1) 9 months; or
‘‘(2) the number of months in which the indi-
vidual was employed in the program.
‘‘(e) RULES OF INTERPRETATION.—
‘‘(1) This section shall not be construed as re-
quiring the State or local agency administering the
State plan to provide employee status to an eligible
individual to whom the State or local agency pro-
vides a job under the work supplementation program
(or with respect to whom the State or local agency
provides all or part of the wages paid to the individ-
ual by another entity under the program), or as re-
quiring any State or local agency to provide that an
eligible individual filling a job position provided by
another entity under the program be provided em-
ployee status by the entity during the first 13 weeks
the individual fills the position.
‘‘(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 aid to families with dependent children under the State
plan approved under part A if the State did not have a
work supplementation program, shall be considered indi-
viduals receiving aid to families with dependent children
under the State plan approved under part A for purposes
of eligibility for medical assistance under the State plan
approved under title XIX.
‘‘SEC. 497. PARTICIPATION RULES.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), a State that establishes a program under this part
may require any individual receiving aid under the State
plan approved under part A to participate in the program.
‘‘(b) 2-YEAR LIMITATION ON PARTICIPATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an individual may not participate in a
State program established under this part if the in-
dividual has participated in the State program es-
tablished under this part for 24 months after the
date the individual first signed an agreement of mu-
tual responsibility under this part, excluding any
month during which the individual worked for an av-
erage of at least 25 hours per week in a private sec-
tor job.
‘‘(2) AUTHORITY TO ALLOW REPEAT PARTICI-
PATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) of this paragraph, a State may allow
an individual who, by reason of paragraph (1),
would be prohibited from participating in the
State program established under this part to
participate in the program for such additional
period or periods as the State determines ap-
propriate.
‘‘(B) LIMITATION ON PERCENTAGE OF RE-
PEAT PARTICIPANTS.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii) of this subparagraph,
the number of individuals allowed under
subparagraph (A) to participate during a
program year in a State program estab-
lished under this part shall not exceed—
‘‘(I) 10 percent of the total num-
ber of individuals who participated in
the State program established under
this part or the State program estab-
lished under part H during the imme-
diately preceding program year; or
‘‘(II) in the case of fiscal year
2004 or any succeeding fiscal year, 15
percent of such total number of indi-
viduals.
‘‘(ii) AUTHORITY TO INCREASE LIMI-
TATION.—
‘‘(I) PETITION.—A State may re-
quest the Secretary to increase to not
more than 15 percent the percentage
limitation imposed by clause (i)(I) for
a fiscal year before fiscal year 2004.
‘‘(II) AUTHORITY TO GRANT RE-
QUEST.—The Secretary may approve
a request made pursuant to subclause
(I) if the Secretary deems it appro-
priate. The Secretary shall develop
recommendations on the criteria that
should be applied in evaluating re-
quests under subclause (I).
‘‘SEC. 498. CASELOAD PARTICIPATION RATES; PERFORM-
ANCE MEASURES.
‘‘(a) PARTICIPATION RATES.—
‘‘(1) REQUIREMENT.—A State that operates a
program under this part shall achieve a participation
rate for the following fiscal years of not less than
the following percentage:
‘‘Fiscal year:
Percentage:
1997 .........................................................................................
1998 .........................................................................................
1999 .........................................................................................
2000 .........................................................................................
2001 .........................................................................................
2002 .........................................................................................
2003 or later ............................................................................
52.
‘‘(2) PARTICIPATION RATE DEFINED.—
‘‘(A) IN GENERAL.—As used in this sub-
section, the term ‘participation rate’ means,
with respect to a State and a fiscal year, an
amount equal to—
‘‘(i) the average monthly number of
individuals who, during the fiscal year,
participate in the State program estab-
lished under this part or the State pro-
gram (if any) established under part H; di-
vided by
‘‘(ii) the average monthly number of
individuals for whom an individual respon-
sibility plan is in effect under section 482
during the fiscal year.
‘‘(B) SPECIAL RULE.—For each of the 1st
12 months after an individual ceases to receive
aid under a State plan approved under part A
by reason of having become employed for more
than 25 hours per week in an unsubsidized job
in the private sector, the individual shall be
considered to be participating in the State pro-
gram established under this part, and to be an
adult recipient of such aid, for purposes of sub-
paragraph (A).
‘‘(3) STATE
COMPLIANCE
REPORTS.—Each
State that operates a program under this part for a
fiscal year shall submit to the Secretary a report on
the participation rate of the State for the fiscal year.
‘‘(4) EFFECT OF FAILURE TO MEET PARTICIPA-
TION RATES.—
‘‘(A) IN GENERAL.—If a State reports that
the State has failed to achieve the participation
rate required by paragraph (1) for the fiscal
year, the Secretary may make recommendations
for changes in the State program established
under this part and (if the State has estab-
lished a program under part H) the State pro-
gram established under part H. The State may
elect to follow such recommendations, and shall
demonstrate to the Secretary how the State will
achieve the required participation rates.
‘‘(B) SECOND
CONSECUTIVE
FAILURE.—
Notwithstanding subparagraph (A), if a State
fails to achieve the participation rate required
by paragraph (1) for 2 consecutive fiscal years,
the Secretary may—
‘‘(i) require the State to make
changes in the State program established
under this part and (if the State has estab-
lished a program under part H) the State
program established under part H; and
‘‘(ii) reduce by 5 percent the amount
otherwise payable to the State under para-
graph (1) or (2) (whichever applies to the
State) of section 403(a).
‘‘(b) PERFORMANCE STANDARDS.—The Secretary
shall develop standards to be used to measure the effec-
tiveness of the programs established under this part and
part H in moving recipients of aid under the State plan
approved under part A into full-time unsubsidized employ-
ment.
‘‘(c) PERFORMANCE-BASED MEASURES.—
‘‘(1) ESTABLISHMENT.—The Secretary shall, by
regulation, establish measures of the effectiveness of
the State programs established under this part and
under part H in moving recipients of aid under the
State plan approved under part A into full-time
unsubsidized employment, based on the performance
of such programs.
‘‘(2) ANNUAL
COMPLIANCE
REPORTS.—Each
State that operates a program under this part shall
submit to the Secretary annual reports that compare
the achievements of the program with the perform-
ance-based measures established under paragraph
(1).
‘‘Subpart 2—Optional State Plans
‘‘SEC. 499. STATE ROLE.
‘‘(a) PROGRAM REQUIREMENTS.—Any State may es-
tablish and operate a work first program that meets the
following requirements, unless the State is operating a
work first program under subpart 1:
‘‘(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 aid to families with depend-
ent children with the private sector labor market 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 permeated with
an emphasis on employment and with an under-
standing 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, wage supplementation, tem-
porary subsidized jobs, or such other services that
the State deems 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-
vide individuals with the support and skills necessary
to obtain and keep employment in the private sector.
‘‘(5) 2-YEAR LIMITATION ON PARTICIPATION.—
The program shall comply with section 497(b).
‘‘(6) AGREEMENTS OF MUTUAL RESPONSIBIL-
ITY.—
‘‘(A) IN
GENERAL.—The State agency
shall develop an agreement of mutual respon-
sibility for each program participant, which will
be an individualized comprehensive plan, devel-
oped by the team 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) HOURS OF PARTICIPATION REQUIRE-
MENT.—The agreement shall provide that the
individual shall participate in activities in ac-
cordance 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.
‘‘(7) CASELOAD
PARTICIPATION
RATES.—The
program shall comply with section 498.
‘‘(8) NONDISPLACEMENT.—The program shall
comply with section 491(11).
‘‘(b) ANNUAL REPORTS.—
‘‘(1) COMPLIANCE WITH PERFORMANCE MEAS-
URES.—Each State that operates a program under
this subpart shall submit to the Secretary annual re-
ports that compare the achievements of the program
with the performance-based measures established
under section 490(b).
‘‘(2) 
COMPLIANCE
WITH
PARTICIPATION
RATES.—Each State that operates a program under
this subpart for a fiscal year shall submit to the Sec-
retary a report on the participation rate of the State
for the fiscal year.
‘‘SEC. 500. FEDERAL ROLE.
‘‘(a) APPROVAL OF STATE PLANS.—
‘‘(1) IN GENERAL.—Within 60 days after the
date a State submits to the Secretary a plan that
provides for the establishment and operation of a
work first program that meets the requirements of
section 499, the Secretary shall approve the plan.
‘‘(2) AUTHORITY TO EXTEND APPROVAL DEAD-
LINE.—The 60-day deadline established in para-
graph (1) with respect to a State may be extended
in accordance with an agreement between the Sec-
retary and the State.
‘‘(b) PERFORMANCE-BASED MEASURES.—The Sec-
retary shall, by regulation, establish measures of the effec-
tiveness of the State program established under this sub-
part and (if the State has established a program under
part H) the State program established under part H in
moving recipients of aid under the State plan approved
under part A into full-time unsubsidized employment,
based on the performance of such programs.
‘‘(c) EFFECT OF FAILURE TO MEET PARTICIPATION
RATES.—
‘‘(1) IN GENERAL.—If a State reports that the
State has failed to achieve the participation rate re-
quired by section 499(a)(7) for the fiscal year, the
Secretary may make recommendations for changes
in the State program established under this subpart
and (if the State has established a program under
part H) the State program established under part
H. The State may elect to follow such recommenda-
tions, and shall demonstrate to the Secretary how
the State will achieve the required participation
rates.
‘‘(2) SECOND
CONSECUTIVE
FAILURE.—Not-
withstanding paragraph (1), if the State has failed
to achieve the participation rates required by section
499(a)(7) for 2 consecutive fiscal years, the Sec-
retary may require the State to make changes in the
State program established under this subpart and (if
the State has established a program under part H)
the State program established under part H.
‘‘Part H—Workfare Program
‘‘SEC. 500A. ESTABLISHMENT AND OPERATION OF PRO-
GRAM.
‘‘(a) IN GENERAL.—A State that establishes a work
first program under a subpart of part G may establish
and carry out a workfare program that meets the require-
ments of this part, unless the State has established a job
placement voucher program under part I.
‘‘(b) OBJECTIVE.—The objective of the workfare 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.
‘‘(c) CASE MANAGEMENT TEAMS.—The State shall
assign to each program participant a case management
team that shall meet with the participant and assist the
participant to choose the most suitable workfare job under
subsection (e), (f), or (g) and to eventually obtain a full-
time unsubsidized paid job.
‘‘(d) PROVISION OF JOBS.—The State shall provide
each participant in the program with a community service
job that meets the requirements of subsection (e) or a sub-
sidized job that meets the requirements of subsection (f)
or (g).
‘‘(e) COMMUNITY SERVICE JOBS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), each participant shall work for
not fewer than 30 hours per week (or, at the option
of the State, 20 hours per week during fiscal years
1997 and 1998, not fewer than 25 hours per week
during fiscal year 1999, not fewer than 30 hours per
week during fiscal years 2000 and 2001, and not
fewer than 35 hours per week thereafter) in a com-
munity service job, and be paid at a rate which is
not greater than 75 percent (or, at the option of the
State, 100 percent) of the maximum amount of aid
payable under the State plan approved under part A
to a family of the same size and composition with
no income.
‘‘(2) EXCEPTION.—(A) If the participant has
obtained unsubsidized part-time employment in the
private sector, the State shall provide the participant
with a part-time community service job.
‘‘(B) If the State provides a participant a part-
time community service job under subparagraph (A),
the State shall ensure that the participant works for
not fewer than 30 hours per week.
‘‘(3) WAGES
NOT
CONSIDERED
EARNED
IN-
COME.—Wages paid under a workfare program shall
not be considered to be earned income for purposes
of any provision of law.
‘‘(4) COMMUNITY SERVICE JOB DEFINED.—For
purposes of this section, the term ‘community serv-
ice job’ means—
‘‘(A) a job provided to a participant by the
State administering the State plan under part
A; or
‘‘(B) a job provided to a participant by any
other employer for which all or part of the
wages are paid by the State.
A State may provide or subsidize under the program
any job which the State determines to be appro-
priate.
‘‘(f) TEMPORARY SUBSIDIZED JOB CREATION.—A
State that establishes a workfare program under this part
may establish a program similar to the program operated
by the State of Oregon, which is known as ‘JOBS Plus’.
‘‘(g) WORK SUPPLEMENTATION PROGRAM.—
‘‘(1) IN GENERAL.—A State that establishes a
workfare program under this part may institute a
work supplementation program under which the
State, to the extent it considers appropriate, may re-
serve the sums that would otherwise be payable to
participants in the program as a community service
minimum wage and use the sums instead for the
purpose of providing and subsidizing private sector
jobs for the participants.
‘‘(2) EMPLOYER
AGREEMENT.—An employer
who provides a private sector job to a participant
under paragraph (1) shall agree to provide to the
participant an amount in wages equal to the poverty
threshold for a family of three.
‘‘(h) JOB SEARCH REQUIREMENT.—The State shall
require each participant to spend a minimum of 5 hours
per week on activities related to securing unsubsidized
full-time employment in the private sector.
‘‘(i) DURATION OF PARTICIPATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an individual may not participate for
more than 2 years in a workfare program under this
part.
‘‘(2) AUTHORITY
TO
ALLOW
REPEATED
PAR-
TICIPATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State may allow an individual
who, by reason of paragraph (1), would be pro-
hibited from participating in the State program
established under this part to participate in the
program for such additional period or periods
as the State determines appropriate.
‘‘(B) LIMITATION ON PERCENTAGE OF RE-
PEAT PARTICIPANTS.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the number of individ-
uals allowed under subparagraph (A) to
participate during a program year in a
State program established under this part
shall not exceed 10 percent of the total
number of individuals who participated in
the program during the immediately pre-
ceding program year.
‘‘(ii) AUTHORITY TO INCREASE LIMI-
TATION.—
‘‘(I) PETITION.—A State may re-
quest the Secretary to increase the
percentage 
limitation 
imposed 
by
clause (i) to not more than 15 per-
cent.
‘‘(II) AUTHORITY TO GRANT RE-
QUEST.—The Secretary may approve
a request made pursuant to subclause
(I) if the Secretary deems it appro-
priate. The Secretary shall develop
recommendations on the criteria that
should be applied in evaluating re-
quests under subclause (I).
‘‘(j) USE OF PLACEMENT COMPANIES.—A State that
establishes a workfare program under this part may enter
into contracts with private companies (whether operated
for profit or not for profit) for the placement of partici-
pants in the program in positions of full-time employment,
preferably in the private sector, for wages sufficient to
eliminate the need of such participants for cash assistance
in accordance with section 493.
‘‘(k) MAXIMUM OF 3 COMMUNITY SERVICE JOBS.—
A program participant may not receive more than 3 com-
munity service jobs under the program.
‘‘Part I—Job Placement Voucher Program
‘‘SEC. 500B. JOB PLACEMENT VOUCHER PROGRAM.
‘‘A State that is not operating a workfare program
under part H may establish a job placement voucher pro-
gram that meets the following requirements:
‘‘(1) The program shall offer each program par-
ticipant a voucher which the participant may use to
obtain employment in the private sector.
‘‘(2) An employer who receives a voucher issued
under the program from an individual may redeem
the voucher at any time after the individual has been
employed by the employer for 6 months, unless an-
other employee of the employer was displaced by the
employment of the individual.
‘‘(3) Upon presentation of a voucher by an em-
ployer to the State agency responsible for the admin-
istration of the program, the State agency shall pay
to the employer an amount equal to 50 percent of
the total amount of aid paid under the State plan
approved under part A to the family of which the in-
dividual is a member for the most recent 12 months
for which the family was eligible for such aid.’’.
(c) FUNDING.—Section 403 (42 U.S.C. 603) is
amended by inserting after subsection (b) the following:
‘‘(c)(1) Each State that is operating a program in
accordance with subpart 1 of part G (or in accordance
with a plan approved under subpart 2 of part G), and a
program in accordance with part H or I shall be entitled
to payments under subsection (d) for any fiscal year in
an amount equal to the sum of the applicable percentages
(specified in such subsection) of its expenditures to carry
out such programs (subject to limitations prescribed by
or pursuant to such parts or this section on expenditures
that may be included for purposes of determining payment
under subsection (d)), but such payments for any fiscal
year in the case of any State may not exceed the limitation
determined under paragraph (2) with respect to the State.
‘‘(2) The limitation determined under this paragraph
with respect to a State for any fiscal year is the amount
that bears the same ratio to the amount specified in para-
graph (3) for such fiscal year as the average monthly num-
ber of adult recipients (as defined in paragraph (4)) in
the State in the preceding fiscal year bears to the average
monthly number of such recipients in all the States for
such preceding year.
‘‘(3)(A) The amount specified in this paragraph is—
‘‘(i) $1,500,000,000 for fiscal year 1997;
‘‘(iii) $2,000,000,000 for fiscal year 1998;
‘‘(iv) $2,600,000,000 for fiscal year 1999;
‘‘(v) $3,100,000,000 for fiscal year 2000; and
‘‘(vi) the amount determined under subpara-
graph (B) for fiscal year 2001 and each succeeding
fiscal year.
‘‘(B) The amount determined under this subpara-
graph for a fiscal year is the product of the following:
‘‘(i) The amount specified in this paragraph for
the immediately preceding fiscal year.
‘‘(ii) 1.00 plus the percentage (if any) by
which—
‘‘(I) the average of the Consumer Price
Index (as defined in section 1(f)(5) of the Inter-
nal Revenue Code of 1986) for the most recent
12-month period for which such information is
available; exceeds
‘‘(II) the average of the Consumer Price
Index (as so defined) for the 12-month period
ending on June 30 of the 2nd preceding fiscal
year.
‘‘(iii) The amount that bears the same ratio to
the amount specified in this paragraph for the im-
mediately preceding fiscal year as the number of in-
dividuals whom the Secretary estimates will partici-
pate in programs operated under part G, H, or I
during the fiscal year bears to the total number of
individuals who participated in such programs dur-
ing such preceding fiscal year.
‘‘(4) For purposes of this subsection, the term ‘adult
recipient’ in the case of any State means an individual
other than a dependent child (unless such child is the cus-
todial parent of another dependent child) whose needs are
100
met (in whole or in part) with payments of aid to families
with dependent children.
‘‘(d)(1) In lieu of any payment under subsection (a),
the Secretary shall pay to each State that is operating a
program in accordance with subpart 1 of part G (or in
accordance with a plan approved under subpart 2 of part
G), and a program in accordance with part H or I, and
to which section 1108 does not apply, with respect to ex-
penditures by the State to carry out such programs, an
amount equal to 70 percent, or the Federal medical assist-
ance percentage (as defined in section 1905(b)) increased
by 10 percentage points, whichever is the greater, of the
total amount expended during the quarter for the oper-
ation and administration of such programs.
‘‘(2) In lieu of any payment under subsection (a), the
Secretary shall pay to each State that is operating a pro-
gram in accordance with subpart 1 of part G (or in accord-
ance with a plan approved under subpart 2 of part G),
and a program in accordance with part H or I, and to
which section 1108 applies, with respect to expenditures
by the State to carry out such programs (including ex-
penditures for child care under section 402(g)(1)(A)), an
amount equal to—
‘‘(A) with respect to so much of such expendi-
tures in a fiscal year as do not exceed the State’s
101
expenditures in the fiscal year 1987 with respect to
which payments were made to such State from its
allotment for such fiscal year pursuant to part C of
this title as then in effect, 90 percent; and
‘‘(B) with respect to so much of such expendi-
tures in a fiscal year as exceed the amount described
in subparagraph (A)—
‘‘(i) 50 percent, in the case of expenditures
for administrative costs made by a State in op-
erating such programs for such fiscal year
(other than the personnel costs for staff em-
ployed full-time in the operation of such pro-
gram) and the costs of transportation and other
work-related supportive services under section
402(g)(2); and
‘‘(ii) 70 percent or the Federal medical as-
sistance percentage (as defined in the last sen-
tence of section 1118) increased by 10 percent-
age points, whichever is the greater, in the case
of expenditures made by a State in operating
such programs for such fiscal year (other than
for costs described in clause (i)).
‘‘(3) With respect to the amount for which payment
is made to a State under paragraph (2)(A), the State’s
102
expenditures for the costs of operating such programs may
be in cash or in kind, fairly evaluated.
‘‘(4) Not more than 10 percent of the amount payable
to a State under this subsection for a quarter may be for
expenditures made during the quarter with respect to pro-
gram participants who are not eligible for aid under the
State plan approved under part A.’’.
(d) SECRETARY’S SPECIAL ADJUSTMENT FUND.—
Section 403 (42 U.S.C. 603) is amended by adding at the
end the following:
‘‘(p)(1) There shall be available to the Secretary from
the amount appropriated for payments under subsection
(c) for States’ programs under parts G and H for fiscal
year 1996, $300,000,000 for special adjustments to
States’ limitations on Federal payments for such pro-
grams.
‘‘(2) A State may, not later than March 1 and Sep-
tember 1 of each fiscal year, submit to the Secretary a
request to adjust the limitation on payments under this
section with respect to its program under part G (and,
in fiscal years after 1997) its program under part H for
the following fiscal year. The Secretary shall only consider
such a request from a State which has, or which dem-
onstrates convincingly on the basis of estimates that it
will, submit allowable claims for Federal payment in the
103
full amount available to it under subsection (c) in the cur-
rent fiscal year and obligated 95 percent of its full amount
in the prior fiscal year. The Secretary shall by regulation
prescribe criteria for the equitable allocation among the
States of Federal payments pursuant to adjustments of
the limitations referred to in the preceding sentence in the
case where the requests of all States that the Secretary
finds reasonable exceed the amount available, and, within
30 days following the dates specified in this paragraph,
will notify each State whether one or more of its limita-
tions will be adjusted in accordance with the State’s re-
quest and the amount of the adjustment (which may be
some or all of the amount requested).
‘‘(3) The Secretary may adjust the limitation on Fed-
eral payments to a State for a fiscal year under subsection
(c), and upon a determination by the Secretary that (and
the amount by which) a State’s limitation should be
raised, the amount specified in either such subsection, or
both, shall be considered to be so increased for the follow-
ing fiscal year.
‘‘(4) The amount made available under paragraph (1)
for special adjustments shall remain available to the Sec-
retary until expended. That amount shall be reduced by
the sum of the adjustments approved by the Secretary in
any fiscal year, and the amount shall be increased in a
104
fiscal year by the amount by which all States’ limitations
under subsection (c) of this section and section 2008 for
a fiscal year exceeded the sum of the Federal payments
under such provisions of law for such fiscal year, but for
fiscal years after 1997, such amount at the end of such
fiscal year shall not exceed $400,000,000.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 402(a) (42 U.S.C. 602(a)) is
amended by striking paragraph (19).
(2) Section 403 (42 U.S.C. 603) is amended by
striking subsections (k) and (l).
(3) 
Section 
407(b)(1)(B) 
(42 
U.S.C.
607(b)(1)(B)) is amended—
(A) by adding ‘‘and’’ at the end of clause
(iii);
(B) by striking ‘‘; and’’ at the end of
clause (iv) and inserting a period; and
(C) by striking clause (v).
(4) Section 407(b)(2)(B)(ii)(I) (42 U.S.C.
607(b)(2)(B)(ii)(I)) is amended by striking ‘‘under
section 402(a)(19) or’’.
(5) 
Section 
407(b)(2)(C) 
(42 
U.S.C.
607(b)(2)(C)) is amended by striking ‘‘section
402(a)(19) and’’.
105
(6) 
Section 
1115(b)(2)(A) 
(42 
U.S.C.
1315(b)(2)(A)) is amended by striking ‘‘, and
402(a)(19) (relating to the work incentive pro-
gram)’’.
(7) Section 1108 (42 U.S.C. 1308) is amend-
ed—
(A) in subsection (a), by striking ‘‘or, in
the case of part A of title IV, section 403(k)’’;
and
(B) in subsection (d), by striking ‘‘(exclu-
sive of any amounts on account of services and
items to which, in the case of part A of such
title, section 403(k) applies)’’.
(8) Section 1902(a)(19)(A)(i)(I) (42 U.S.C.
1396a(a)(19)(A)(i)(I)) 
is 
amended 
by 
striking
‘‘482(e)(6)’’ and inserting ‘‘486(f)’’.
(9) Section 1928(a)(1) (42 U.S.C. 1396s(a)(1))
is amended by striking ‘‘482(e)(6)’’ and inserting
‘‘486(f)’’.
(f) INTENT OF THE CONGRESS.—The Congress in-
tends for State activities under section 494 of the Social
Security Act (as added by the amendment made by section
301(b) of this Act) to emphasize the use of the funds that
would otherwise be used to provide individuals with aid
to families with dependent children under part A of title
106
IV of the Social Security Act and with food stamp benefits
under the Food Stamp Act of 1977, to subsidize the wages
of such individuals in temporary jobs.
(g) SENSE OF THE CONGRESS.—It is the sense of
the Congress that States should target individuals who
have not attained 25 years of age for participation in the
program established by the State under part G of title
IV of the Social Security Act (as added by the amendment
made by section 301(b) of this section) in order to break
the cycle of welfare dependency.
SEC. 302. REGULATIONS.
The Secretary of Health and Human Services shall
prescribe such regulations as may be necessary to imple-
ment the amendments made by this title.
SEC. 303. APPLICABILITY TO STATES.
(a) STATE OPTION TO ACCELERATE APPLICABIL-
ITY.—If a State formally notifies the Secretary of Health
and Human Services that the State desires to accelerate
the applicability to the State of the amendments made by
this title, the amendments shall apply to the State on and
after such earlier date as the State may select.
(b) STATE OPTION TO DELAY APPLICABILITY UNTIL
WAIVERS EXPIRE.—The amendments made by this title
shall not apply to a State with respect to which there is
in effect a waiver issued under section 1115 of the Social
107
Security Act for the State program established under part
G of title IV of such Act, until the waiver expires, if the
State formally notifies the Secretary of Health and
Human Services that the State desires to so delay such
effective date.
(c) AUTHORITY OF THE SECRETARY OF HEALTH
AND HUMAN SERVICES TO DELAY APPLICABILITY TO A
STATE.—If a State formally notifies the Secretary of
Health and Human Services that the State desires to
delay the applicability to the State of the amendments
made by this title, the amendments shall apply to the
State on and after any later date agreed upon by the Sec-
retary and the State.
SEC. 304. SENSE OF THE CONGRESS RELATING TO AVAIL-
ABILITY OF WORK FIRST PROGRAM IN RURAL
AREAS.
It is the sense of the Congress that the Secretary of
Health and Human Services and the States should con-
sider the needs of rural areas in designing State plans
under part G of title IV of the Social Security Act.
SEC. 305. GRANTS TO COMMUNITY-BASED ORGANIZATIONS.
(a) IN GENERAL.—The Secretary of Health and
Human Services may make grants in accordance with this
section to community-based organizations that move re-
cipients of aid to families with dependent children under
108
a State plan approved under part A of title IV of the So-
cial Security Act or under other public assistance pro-
grams into private sector work.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$25,000,000 for fiscal year 1996 and $50,000,000 for fis-
cal years 1997, 1998, 1999, and 2000.
(c) ELIGIBLE ORGANIZATIONS.—The Secretary of
Health and Human Services shall award grants to commu-
nity-based organizations that—
(1) receive at least 5 percent of their funding
from local government sources; and
(2) move recipients referred to in subsection (a)
in the direction of unsubsidized private employment
by integrating and co-locating at least 5 of the fol-
lowing services—
(A) case management;
(B) job training;
(C) child care;
(D) housing;
(E) health care services;
(F) nutrition programs;
(G) life skills training; and
(H) parenting skills.
(d) AWARDING OF GRANTS.—
109
(1) IN GENERAL.—The Secretary shall award
grants based on the quality of applications, subject
to paragraphs (2) and (3).
(2) PREFERENCE IN AWARDING GRANTS.—In
awarding grants under this section, the Secretary
shall give preference to organizations which receive
more than 50 percent of their funding from State
government, local government or private sources.
(3) DISTRIBUTION OF GRANT.—The Secretary
shall award at least 1 grant to each State from
which the Secretary received an application.
(4) LIMITATION ON SIZE OF GRANT.—The Sec-
retary shall not award any grants under this section
of more than $1,000,000.
(e) ISSUANCE OF REGULATIONS.—Not less than 6
months after the date of the enactment of this section,
the Secretary shall prescribe such regulations as may be
necessary to implement this section.
110
TITLE IV—FAMILY RESPONSIBIL-
ITY AND IMPROVED CHILD
SUPPORT ENFORCEMENT
Subtitle A—Eligibility and Other
Matters Concerning Title IV–D
Program Clients
SEC. 401. STATE OBLIGATION TO PROVIDE PATERNITY ES-
TABLISHMENT 
AND 
CHILD 
SUPPORT 
EN-
FORCEMENT SERVICES.
(a) STATE LAW REQUIREMENTS.—Section 466(a)
(42 U.S.C. 666(a)) is amended by inserting after para-
graph (11) the following:
‘‘(12) USE OF CENTRAL CASE REGISTRY AND
CENTRALIZED
COLLECTIONS
UNIT.—Procedures
under which—
‘‘(A) every child support order established
or modified in the State on or after October 1,
1998, is recorded in the central case registry
established in accordance with section 454A(e);
and
‘‘(B) child support payments are collected
through the centralized collections unit estab-
lished in accordance with section 454B—
111
‘‘(i) on and after October 1, 1998,
under each order subject to wage withhold-
ing under section 466(b); and
‘‘(ii) on and after October 1, 1999,
under each other order required to be re-
corded in such central case registry under
this paragraph or section 454A(e), except
as provided in subparagraph (C); and
‘‘(C)(i) parties subject to a child support
order described in subparagraph (B)(ii) may
opt out of the procedure for payment of support
through the centralized collections unit (but not
the procedure for inclusion in the central case
registry) by filing with the State agency a writ-
ten agreement, signed by both parties, to an
alternative payment procedure; and
‘‘(ii) an agreement described in clause (i)
becomes void whenever either party advises the
State agency of an intent to vacate the agree-
ment.’’.
(b) STATE PLAN REQUIREMENTS.—Section 454 (42
U.S.C. 654) is amended—
(1) by striking paragraph (4) and inserting the
following:
‘‘(4) provide that such State will undertake—
112
‘‘(A) to provide appropriate services under
this part to—
‘‘(i) each child with respect to whom
an assignment is effective under section
402(a)(26), 471(a)(17), or 1912 (except in
cases where the State agency determines,
in accordance with paragraph (25), that it
is against the best interests of the child to
do so); and
‘‘(ii) each child not described in clause
(i)—
‘‘(I) with respect to whom an in-
dividual applies for such services; and
‘‘(II) (on and after October 1,
1998) each child with respect to
whom a support order is recorded in
the central State case registry estab-
lished under section 454A, regardless
of whether application is made for
services under this part; and
‘‘(B) to enforce the support obligation es-
tablished with respect to the custodial parent of
a child described in subparagraph (A) unless
the parties to the order which establishes the
support obligation have opted, in accordance
113
with section 466(a)(12)(C), for an alternative
payment procedure.’’; and
(2) in paragraph (6)—
(A) by striking subparagraph (A) and in-
serting the following:
‘‘(A) services under the State plan shall be
made available to nonresidents on the same
terms as to residents;’’;
(B) in subparagraph (B)—
(i) by inserting ‘‘on individuals not re-
ceiving assistance under part A’’ after
‘‘such services shall be imposed’’; and
(ii) by inserting ‘‘but no fees or costs
shall be imposed on any absent or custo-
dial parent or other individual for inclusion
in the central State registry maintained
pursuant to section 454A(e)’’; and
(C) in each of subparagraphs (B), (C), and
(D)—
(i) by indenting such subparagraph
and aligning its left margin with the left
margin of subparagraph (A); and
(ii) by striking the final comma and
inserting a semicolon.
(c) CONFORMING AMENDMENTS.—
119
such arrearages (with appropriate reimbursement of
the Federal Government to the extent of its partici-
pation in the financing);
‘‘(4) fourth, from any remainder, amounts
equal to arrearages of such support obligations as-
signed to any other State pursuant to part A shall
be paid to such other State or States, and used to
pay such arrearages, in the order in which such ar-
rearages accrued (with appropriate reimbursement
of the Federal Government to the extent of its par-
ticipation in the financing).’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on October 1,
1999.
(d) DISTRIBUTION TO A CHILD RECEIVING ASSIST-
ANCE UNDER PART E.—Section 457(d) (42 U.S.C.
657(d)) is amended, in the matter preceding paragraph
(1), by striking ‘‘Notwithstanding the preceding provisions
of this section, amounts’’ and inserting the following:
‘‘(d) IN CASE OF A CHILD RECEIVING ASSISTANCE
UNDER PART E.—Amounts’’.
(e) SUSPENSION OR CANCELLATION OF DEBTS UPON
MARRIAGE OF PARENTS.—Section 457 (42 U.S.C. 657)
is amended by adding at the end the following:
138
‘‘(15) provide for—
‘‘(A) a process for annual reviews of and
reports to the Secretary on the State program
under this part, which shall include such infor-
mation as may be necessary to measure State
compliance with Federal requirements for expe-
dited procedures and timely case processing,
using such standards and procedures as are re-
quired by the Secretary, under which the State
agency will determine the extent to which such
program is in conformity with applicable re-
quirements with respect to the operation of
State programs under this part (including the
status of complaints filed under the procedure
required under paragraph (12)(B)); and
‘‘(B) a process of extracting from the
State automated data processing system and
transmitting to the Secretary data and calcula-
tions concerning the levels of accomplishment
(and rates of improvement) with respect to ap-
plicable performance indicators (including IV–D
paternity establishment percentages and overall
performance in child support enforcement) to
the extent necessary for purposes of sections
452(g) and 458.’’.