the quality of child care services sepa-
rately with respect to the activities 
listed in each of such paragraphs that 
the State will use to evaluate its 
progress in improving the quality of 
such child care services; 
‘‘(III) a list of State-developed 
child care service quality targets for 
such fiscal year quantified on the 
basis of such measures; and 
‘‘(IV) for each fiscal year after 
fiscal year 2004, a report on the 
progress made to achieve such targets 
during the then preceding fiscal year. 
‘‘(iii)
RULE
OF
CONSTRUCTION.—
Nothing in this subparagraph shall be con-
strued to require that the State apply 
measures for evaluating quality to specific 
types of child care providers. 
‘‘(L) ACCESS TO CARE FOR CERTAIN POPU-
LATIONS.—Demonstrate how the State is ad-
dressing the child care needs of parents eligible 
for child care services for which financial assist-
ance is provided under this subchapter who 
have children with special needs, work nontradi-
tional hours, or require child care services for 
infants or toddlers.’’. 
SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD 
CARE. 
Section 658G of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858e) is amended 
to read as follows: 
‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF 
CHILD CARE SERVICES. 
‘‘A State that receives funds to carry out this sub-
chapter for a fiscal year, shall use not less than 6 percent 
of the amount of such funds for activities provided 
through resource and referral services or other means, 
that are designed to improve the quality of child care serv-
ices in the State available to low-income parents from eli-
gible child care providers. Such activities include—
‘‘(1) programs that provide training, education, 
and other professional development activities to en-
hance the skills of the child care workforce, includ-
ing training opportunities for caregivers in informal 
care settings; 
‘‘(2) activities within child care settings to en-
hance early learning for young children, to promote 
early literacy, and to foster school readiness;
‘‘(3) initiatives to increase the retention and 
compensation
of
child
care
providers,
including 
tiered reimbursement rates for providers that meet 
quality standards as defined by the State; or 
‘‘(4) other activities deemed by the State to im-
prove the quality of child care services provided in 
such State.’’. 
SEC. 206. REPORT BY SECRETARY. 
Section 658L of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858j) is amended 
to read as follows: 
‘‘SEC. 658L. REPORT BY SECRETARY. 
‘‘(a) REPORT REQUIRED.—Not later than October 1, 
2005, and biennially thereafter, the Secretary shall pre-
pare and submit to the Committee on Education and the 
Workforce of the House of Representatives and the Com-
mittee on Health, Education, Labor and Pensions of the 
Senate a report that contains the following: 
‘‘(1) A summary and analysis of the data and 
information provided to the Secretary in the State 
reports submitted under section 658K. 
‘‘(2) Aggregated statistics on the supply of, de-
mand for, and quality of child care, early education, 
and non-school-hours programs.
‘‘(3) An assessment, and where appropriate, 
recommendations for the Congress concerning ef-
forts that should be undertaken to improve the ac-
cess of the public to quality and affordable child care 
in the United States. 
‘‘(b) COLLECTION OF INFORMATION.—The Secretary 
may utilize the national child care data system available 
through resource and referral organizations at the local, 
State, and national level to collect the information re-
quired by subsection (a)(2). 
SEC. 207. DEFINITIONS. 
Section 658P(4)(B) of the Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) 
is amended by striking ‘‘85 percent of the State median 
income’’ and inserting ‘‘income levels as established by the 
State, prioritized by need,’’. 
SEC. 208. ENTITLEMENT FUNDING. 
Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amend-
ed—
(1) by striking ‘‘and’’ at the end of subpara-
graph (E); 
(2) by striking the period at the end of sub-
paragraph (F) and inserting ‘‘; and’’; and 
(3) by adding at the end the following:
‘‘(G) $2,917,000,000 for each of fiscal 
years 2004 through 2008.’’. 
TITLE III—CHILD SUPPORT 
SEC. 301. FEDERAL MATCHING FUNDS FOR LIMITED PASS 
THROUGH OF CHILD SUPPORT PAYMENTS TO 
FAMILIES RECEIVING TANF. 
(a)
IN
GENERAL.—Section
457(a)
(42
U.S.C. 
657(a)) is amended—
(1) in paragraph (1)(A), by inserting ‘‘subject 
to paragraph (7)’’ before the semicolon; and 
(2) by adding at the end the following: 
‘‘(7) FEDERAL MATCHING FUNDS FOR LIMITED 
PASS THROUGH OF CHILD SUPPORT PAYMENTS TO 
FAMILIES RECEIVING TANF.—Notwithstanding para-
graph (1), a State shall not be required to pay to 
the Federal Government the Federal share of an 
amount collected during a month on behalf of a fam-
ily that is a recipient of assistance under the State 
program funded under part A, to the extent that—
‘‘(A) the State distributes the amount to 
the family; 
‘‘(B) the total of the amounts so distrib-
uted to the family during the month—
‘‘(i) exceeds the amount (if any) that, 
as of December 31, 2001, was required
under State law to be distributed to a fam-
ily under paragraph (1)(B); and 
‘‘(ii) does not exceed the greater of—
‘‘(I) $100; or 
‘‘(II) $50 plus the amount de-
scribed in clause (i); and 
‘‘(C) the amount is disregarded in deter-
mining the amount and type of assistance pro-
vided to the family under the State program 
funded under part A.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to amounts distributed on or 
after October 1, 2005. 
SEC. 302. STATE OPTION TO PASS THROUGH ALL CHILD 
SUPPORT
PAYMENTS
TO
FAMILIES
THAT 
FORMERLY RECEIVED TANF. 
(a)
IN
GENERAL.—Section
457(a)
(42
U.S.C. 
657(a)), as amended by section 301(a) of this Act, is 
amended—
(1) in paragraph (2)(B), in the matter pre-
ceding clause (i), by inserting ‘‘, except as provided 
in paragraph (8),’’ after ‘‘shall’’; and 
(2) by adding at the end the following: 
‘‘(8) STATE
OPTION
TO
PASS
THROUGH
ALL 
CHILD SUPPORT PAYMENTS TO FAMILIES THAT FOR-
MERLY RECEIVED TANF.—In lieu of applying para-
graph (2) to any family described in paragraph (2), 
a State may distribute to the family any amount col-
lected during a month on behalf of the family.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to amounts distributed on or 
after October 1, 2005. 
SEC.
303.
MANDATORY
REVIEW
AND
ADJUSTMENT
OF 
CHILD SUPPORT ORDERS FOR FAMILIES RE-
CEIVING TANF. 
(a)
IN
GENERAL.—Section
466(a)(10)(A)(i)
(42 
U.S.C. 666(a)(10)(A)(i)) is amended—
(1) by striking ‘‘parent, or,’’ and inserting 
‘‘parent or’’; and 
(2) by striking ‘‘upon the request of the State 
agency under the State plan or of either parent,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on October 1, 2005. 
SEC. 304. MANDATORY FEE FOR SUCCESSFUL CHILD SUP-
PORT COLLECTION FOR FAMILY THAT HAS 
NEVER RECEIVED TANF. 
(a) IN GENERAL.—Section 454(6)(B) (42 U.S.C. 
654(6)(B)) is amended—
(1) by inserting ‘‘(i)’’ after ‘‘(B)’’;
(2) by redesignating clauses (i) and (ii) as sub-
clauses (I) and (II), respectively; 
(3) by adding ‘‘and’’ after the semicolon; and 
(4) by adding after and below the end the fol-
lowing new clause: 
‘‘(ii) in the case of an individual who has 
never received assistance under a State pro-
gram funded under part A and for whom the 
State has collected at least $500 of support, the 
State shall impose an annual fee of $25 for 
each case in which services are furnished, which 
shall be retained by the State from support col-
lected on behalf of the individual (but not from 
the 1st $500 so collected), paid by the indi-
vidual applying for the services, recovered from 
the absent parent, or paid by the State out of 
its own funds (the payment of which from State 
funds shall not be considered as an administra-
tive cost of the State for the operation of the 
plan, and such fees shall be considered income 
to the program);’’. 
(b) CONFORMING AMENDMENT.—Section 457(a)(3) 
(42 U.S.C. 657(a)(3)) is amended to read as follows: 
‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State
100
shall distribute to the family the portion of the 
amount so collected that remains after withholding 
any fee pursuant to section 454(6)(B)(ii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2004. 
SEC. 305. REPORT ON UNDISTRIBUTED CHILD SUPPORT 
PAYMENTS. 
Not later than 6 months after the date of the enact-
ment of this Act, the Secretary of Health and Human 
Services shall submit to the Committee on Ways and 
Means of the House of Representatives and the Committee 
on Finance of the Senate a report on the procedures that 
the States use generally to locate custodial parents for 
whom child support has been collected but not yet distrib-
uted. The report shall include an estimate of the total 
amount of undistributed child support and the average 
length of time it takes undistributed child support to be 
distributed. To the extent the Secretary deems appro-
priate, the Secretary shall include in the report rec-
ommendations as to whether additional procedures should 
be established at the State or Federal level to expedite 
the payment of undistributed child support.
101
SEC. 306. USE OF NEW HIRE INFORMATION TO ASSIST IN 
ADMINISTRATION OF UNEMPLOYMENT COM-
PENSATION PROGRAMS. 
(a) IN GENERAL.—Section 453(j) (42 U.S.C. 653(j)) 
is amended by adding at the end the following: 
‘‘(7) INFORMATION COMPARISONS AND DISCLO-
SURE TO ASSIST IN ADMINISTRATION OF UNEMPLOY-
MENT COMPENSATION PROGRAMS.—
‘‘(A) IN GENERAL.—If a State agency re-
sponsible for the administration of an unem-
ployment compensation program under Federal 
or State law transmits to the Secretary the 
name and social security account number of an 
individual, the Secretary shall, if the informa-
tion in the National Directory of New Hires in-
dicates that the individual may be employed, 
disclose to the State agency the name, address, 
and employer identification number of any pu-
tative employer of the individual, subject to this 
paragraph. 
‘‘(B) CONDITION
ON
DISCLOSURE.—The 
Secretary shall make a disclosure under sub-
paragraph (A) only to the extent that the Sec-
retary determines that the disclosure would not 
interfere with the effective operation of the pro-
gram under this part.
102
‘‘(C)
USE
OF
INFORMATION.—A
State 
agency may use information provided under this 
paragraph only for purposes of administering a 
program referred to in subparagraph (A).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on October 1, 2004. 
SEC. 307. DECREASE IN AMOUNT OF CHILD SUPPORT AR-
REARAGE TRIGGERING PASSPORT DENIAL. 
(a) IN GENERAL.—Section 452(k)(1) (42 U.S.C. 
652(k)(1)) is amended by striking ‘‘$5,000’’ and inserting 
‘‘$2,500’’. 
(b) CONFORMING AMENDMENT.—Section 454(31) 
(42 U.S.C. 654(31)) is amended by striking ‘‘$5,000’’ and 
inserting ‘‘$2,500’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2004. 
SEC. 308. USE OF TAX REFUND INTERCEPT PROGRAM TO 
COLLECT PAST-DUE CHILD SUPPORT ON BE-
HALF OF CHILDREN WHO ARE NOT MINORS. 
(a) IN GENERAL.—Section 464 (42 U.S.C. 664) is 
amended—
(1) in subsection (a)(2)(A), by striking ‘‘(as 
that term is defined for purposes of this paragraph 
under subsection (c))’’; and 
(2) in subsection (c)—
103
(A) in paragraph (1)—
(i) by striking ‘‘(1) Except as pro-
vided in paragraph (2), as used in’’ and in-
serting ‘‘In’’; and 
(ii) by inserting ‘‘(whether or not a 
minor)’’ after ‘‘a child’’ each place it ap-
pears; and 
(B) by striking paragraphs (2) and (3). 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on October 1, 2005. 
SEC. 309. GARNISHMENT OF COMPENSATION PAID TO VET-
ERANS FOR SERVICE-CONNECTED DISABIL-
ITIES IN ORDER TO ENFORCE CHILD SUP-
PORT OBLIGATIONS. 
(a)
IN
GENERAL.—Section
459(h)
(42
U.S.C. 
659(h)) is amended—
(1) in paragraph (1)(A)(ii)(V), by striking all 
that follows ‘‘Armed Forces’’ and inserting a semi-
colon; and 
(2) by adding at the end the following: 
‘‘(3) LIMITATIONS
WITH
RESPECT
TO
COM-
PENSATION PAID TO VETERANS FOR SERVICE-CON-
NECTED DISABILITIES.—Notwithstanding any other 
provision of this section: