‘‘(1) 
PERSONAL
RESPONSIBILITY
AGREE-
MENT.—The State plan shall provide that not later
than 30 days after the approval of an application for
temporary employment assistance, a parent qualify-
ing for assistance shall execute a personal respon-
sibility agreement as described in section 403. If a
child otherwise eligible for assistance under this part
is residing with a needy relative other than a parent,
the State plan may require the relative to execute
such a plan as a condition of the family receiving
such assistance.
‘‘(2) WORK
WITHIN
TWO
YEARS.—The State
plan shall provide that a parent or caretaker receiv-
ing assistance under the program will engage in
work (as defined by the State) when the State deter-
mines the parent or caretaker is ready to engage in
work, or after 24 months (whether or not consecu-
tive) of receiving assistance under the program,
whichever is earlier.
‘‘(c) LIMITATIONS ON ELIGIBILITY.—
‘‘(1) REQUIREMENTS TO WORK AND LOOK FOR
WORK.—Except as otherwise provided in paragraph
(2), the State plan shall limit eligibility of individ-
uals and families as follows:
‘‘(A) REFUSAL TO LOOK FOR WORK.—If
an unemployed individual who has attained 18
years of age (or at State option, 19) refuses
without good cause to look for work—
‘‘(i) in the case of the first such re-
fusal, assistance shall not be payable with
respect to such individual until the date
the individual begins to look for work; and
‘‘(ii) in the case of a second or subse-
quent refusal, assistance shall not be pay-
able with respect to the family of such in-
dividual until the later of—
‘‘(I) 6 months after the date of
such refusal; or
‘‘(II) the date the individual be-
gins to look for work.
‘‘(B) REFUSAL TO ACCEPT A BONA FIDE
OFFER
OF
EMPLOYMENT.—If an unemployed
individual who has attained 18 years of age (or
at State option, 19) refuses without good cause
to accept a bona fide offer of employment—
‘‘(i) in the case of the first such re-
fusal, assistance shall not be payable with
respect to such individual until the date
the individual begins to work; and
‘‘(ii) in the case of a second or subse-
quent refusal, assistance shall not be pay-
able with respect to the family of such in-
dividual until the later of—
‘‘(I) 6 months after the date of
such refusal; or
‘‘(II) the date the individual be-
gins to work.
‘‘(C) FAILURE
TO
COMPLY
WITH
PER-
SONAL
RESPONSIBILITY
AGREEMENT
OR
MU-
TUAL RESPONSIBILITY PLANS.—The State plan
shall describe sanctions determined by the State
for those circumstances when the individual
fails without good cause to comply with a per-
sonal responsibility agreement (or, if the State
has established a program under subpart 1 of
part F and the individual is required to partici-
pate in the program, a mutual responsibility
plan) signed by the individual.
‘‘(i) In the case of the first such fail-
ure, the State shall impose on the individ-
ual a sanction determined by the State
which is no more severe than the sanction
provided for under subparagraph (A)(i).
‘‘(ii) In the case of a second or subse-
quent failure, the State shall impose on the
family of the individual a sanction deter-
mined by the State which is no more se-
vere than the sanction provided for under
subparagraph (A)(ii).
‘‘(2) TIME LIMIT ON ASSISTANCE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraphs (B) and (C), the State plan
shall provide that the family of an individual
who, after attaining age 18 years (or age 19
years, at State option), has received assistance
under the plan for 60 months, shall no longer
be eligible for assistance under the plan.
‘‘(B) HARDSHIP EXCEPTION AFTER EXPI-
RATION OF 60-MONTH PERIOD.—The State plan
shall provide for hardship exceptions from the
application of subparagraph (A) in accordance
with clause (i) (or alternatively, at State option,
in accordance with clause (ii)).
‘‘(i) GENERAL EXCEPTION FORMULA-
TION.—Except as provided in clause (ii),
the State plan shall provide that eligibility
shall not be denied to any family under
subparagraph (A) if—
‘‘(I) at the option of the State,
the family includes an individual
working 20 hours per week (or more,
at the option of the State);
‘‘(II) the family resides in an
area with an unemployment rate ex-
ceeding 8 percent; or
‘‘(III) the family is experiencing
other special hardship circumstances
which make it appropriate for the
State to provide an exemption for
such month, except that the total
number of exemptions under this
clause for any month shall not exceed
15 percent of the number of families
to which the State is providing assist-
ance under the plan.
‘‘(ii) ALTERNATIVE HARDSHIP EXCEP-
TION FORMULATION.—A State may elect,
as an alternative to clause (i), to define
hardship circumstances, in which case the
total number of exemptions under this
clause for any month shall not exceed 20
percent of the number of families to which
age 6 months, at the option of the
State), or
‘‘(bb) in the case of a second or
subsequent child born during such pe-
riod, is responsible for a child under
age 3 months;
‘‘(III) is pregnant in the 3rd tri-
mester;
‘‘(IV) is caring for a family mem-
ber who is ill or incapacitated; or
‘‘(V) (in the case of a single cus-
todial parent), has a demonstrated in-
ability to obtain needed child care, as
determined by the State, for one or
more of the following reasons:
‘‘(aa) unavailability of ap-
propriate child care within a rea-
sonable distance of the individ-
ual’s home or work site;
‘‘(bb) 
unavailability 
or
unsuitability of informal child
care by a relative or under other
arrangements; or
‘‘(cc) unavailability of appro-
priate and affordable formal child
care arrangements.
‘‘(D) CHILD-ONLY
CASES.—With respect
to any child who has not attained age 18 (or
age 19, at the option of the State) and who is
eligible for assistance under this part, but not
as a member of a family otherwise eligible for
assistance under this part (determined without
regard to this paragraph), the State plan shall
not include in the determination of the 60-
month period under subparagraph (A) any
month in which such child has not attained
such age.
‘‘(3) TREATMENT OF FAMILY INELIGIBLE FOR
CASH
ASSISTANCE.—The State plan shall provide
that if a family is no longer eligible for cash assist-
ance under the plan due to the application of para-
graph (1) or (2)—
‘‘(A) for purposes of determining eligibility
for any other Federal or federally assisted pro-
gram based on need, the family shall continue
to be considered eligible for such assistance;
‘‘(B) in the case of a family ineligible for
such assistance due solely to the application of
paragraph (2), the State shall, after having as-
sessed the needs of the child or children of the
family, provide for such needs with vouchers for
such family—
‘‘(i) determined on the same basis as
the State would provide assistance under
the State plan to such a family with one
less individual or two less individuals, as
applicable, in the case of a two-parent fam-
ily,
‘‘(ii) designed appropriately to pay
third parties for shelter, goods, and serv-
ices received by the child or children, and
‘‘(iii) payable directly to the third par-
ties.
‘‘(4) INDIVIDUALS ON OLD-AGE ASSISTANCE OR
SSI INELIGIBLE FOR TEMPORARY EMPLOYMENT AS-
SISTANCE.—The State plan shall provide that no as-
sistance shall be furnished any individual under the
plan with respect to any period with respect to which
the individual is receiving old-age assistance under
the State plan under title I or supplemental security
income under title XVI, and the individual’s income
and resources attributable to such sources shall be
disregarded in determining the eligibility of the fam-
ily of the individual for temporary employment as-
sistance.
‘‘(5) CHILDREN FOR WHOM FEDERAL, STATE,
OR LOCAL FOSTER CARE MAINTENANCE OR ADOP-
TION ASSISTANCE PAYMENTS ARE MADE.—A child
with respect to whom foster care maintenance pay-
ments or adoption assistance payments are made
under part E or under State or local law shall not,
for the period for which such payments are made, be
regarded as a needy child under this part, and such
child’s income and resources shall be disregarded in
determining the eligibility of the family of such child
for temporary employment assistance.
‘‘(6) DENIAL OF ASSISTANCE FOR 10 YEARS TO
A PERSON FOUND TO HAVE FRAUDULENTLY MIS-
REPRESENTED RESIDENCE IN ORDER TO OBTAIN AS-
SISTANCE IN 2 OR MORE STATES.—The State plan
shall provide that no assistance will be furnished any
individual under the plan during the 10-year period
that begins on the date the individual is convicted in
Federal or State court of having made a fraudulent
statement or representation with respect to the place
of residence of the individual in order to receive ben-
efits or services simultaneously from 2 or more
States under programs that are funded under this
part or title XIX, or benefits in 2 or more States
under the supplemental security income program
under title XVI.
‘‘(7) DENIAL
OF
ASSISTANCE
FOR
FUGITIVE
FELONS
AND
PROBATION
AND
PAROLE
VIOLA-
TORS.—
‘‘(A) IN GENERAL.—The State plan shall
provide that no assistance will be furnished any
individual under the plan for any period if dur-
ing such period the State agency has knowledge
that such individual is—
‘‘(i) fleeing to avoid prosecution, or
custody or confinement after conviction,
under the laws of the place from which the
individual flees, for a crime, or an attempt
to commit a crime, which is a felony under
the laws of the place from which the indi-
vidual flees, or which, in the case of the
State of New Jersey, is a high mis-
demeanor under the laws of such State; or
‘‘(ii) violating a condition of probation
or parole imposed under Federal or State
law.
‘‘(B) EXCHANGE OF INFORMATION WITH
LAW ENFORCEMENT AGENCIES.—Notwithstand-
ing any other provision of law, the State plan
shall provide that the State shall furnish any
Federal, State, or local law enforcement officer,
upon the request of the officer, with the current
address of any recipient of assistance under the
plan, if the officer furnishes the agency with the
name of the recipient and notifies the agency
that—
‘‘(i) the recipient is described in
clause (i) or (ii) of subparagraph (A); and
‘‘(ii) the location or apprehension of
the recipient is within such officer’s official
duties.
‘‘(d) DETERMINATION OF ELIGIBILITY AND BENE-
FITS.—
‘‘(1) DETERMINATION
OF
NEED.—The State
plan shall provide that the State agency will take
into consideration any income and resources—
‘‘(A) which are legally or actually available
to meet the needs of the child or relative claim-
ing temporary employment assistance; and
‘‘(B) which the State determines should be
considered in determining the need of such
child or relative.
‘‘(2) OPTIONAL
DENIAL
OF
ASSISTANCE
TO
FAMILIES
HAVING
ADDITIONAL
CHILDREN
WHILE
RECEIVING ASSISTANCE.—At the option of the State,
the State plan may provide that—
‘‘(A)(i) the amount of temporary employ-
ment assistance paid to a family under the plan
will not be increased by reason of the birth of
a child (other than as a result of rape or incest)
to an individual included in such family if—
‘‘(I) when the individual is a custodial
parent of a needy child, the child was con-
ceived in a month for which the individual
received aid under the plan, or
‘‘(II) when the individual is a needy
child, the individual is the parent of an-
other child who is a member of the same
family and whose needs are included for
purposes of making such determination;
‘‘(ii) if the value of assistance to a family
under the State plan approved under this part
is reduced by reason of subclause (I), each
member of the family shall be considered to be
receiving such assistance for purposes of Fed-
eral law including but not limited to eligibility
for medical assistance under the State plan ap-
proved under title XIX for so long as assistance
to the family under the State plan approved
under this part would otherwise not be so re-
duced; and
‘‘(B) if the State exercises the option, the
State may provide the family with vouchers, in
amounts not exceeding the amount of any such
reduction in assistance, that may be used only
to pay for particular goods and services speci-
fied by the State as suitable for the care of the
child of the parent (such as diapers, clothing, or
school supplies). In addition, the State may
allow an additional earned income disregard, or
disregard of child support received on behalf of
a child described by this subsection, in amounts
that do not exceed in total the reduction in as-
sistance that occurs as a result of a State exer-
cising the option.
‘‘(C) A family may be subjected to this
subparagraph as long as application of this sub-
paragraph, whether alone or together with other
provisions of the State plan, does not reduce to
zero the maximum assistance level for such a
family.
‘‘(3) RESOURCE
AND
INCOME
DETERMINA-
TION.—With respect to the determination of the
total resources and income of the family of any
needy child, the State plan shall provide the follow-
ing:
‘‘(A) RESOURCES.—The plan shall specify
the resource limit, and describe the policy deter-
mined by the State regarding any exclusion al-
lowed for vehicles owned by family members, re-
sources set aside for future needs of a child, in-
dividual development accounts, or other policies
established by the State to encourage savings.
‘‘(B) FAMILY
INCOME.—The plan shall
specify the extent to which earned or unearned
income is disregarded in determining eligibility
for, and amount of, assistance.
‘‘(C) CHILD
SUPPORT.—The plan shall
specify whether (and if so, the extent to which)
current child support received in excess of $50
per month on behalf of a member of the family
is disregarded in determining eligibility for, and
the amount of, assistance.
‘‘(D) CHILD’S EARNINGS.—The plan shall
describe the treatment of earnings of a child liv-
ing in the home.
‘‘(E) EARNED INCOME TAX CREDIT.—The
plan shall provide for disregard of any refund
of Federal income taxes made to a family re-
ceiving temporary employment assistance by
reason of section 32 of the Internal Revenue
Code of 1986 (relating to earned income tax
credit) and any payment made to such a family
by an employer under section 3507 of such
Code (relating to advance payment of earned
income credit).
‘‘(4) VERIFICATION SYSTEM.—The State plan
shall provide that information is requested and ex-
changed for purposes of income and eligibility ver-
ification in accordance with a State system which
meets the requirements of section 1137.
‘‘(e) SERVICES TO NATIVE AMERICANS.—The State
plan shall specify the steps that will be taken to ensure
that an appropriate share of assistance and services under
the plan (and under part F and part G or H) are fur-
nished to eligible Native Americans (including, as applica-
ble, Indians, Alaskan Natives, and Native Hawaiians) liv-
ing in the State.
‘‘(f) SERVICES TO REFUGEES.—The State plan shall
provide assurances that assistance and services furnished
to refugees under the plan (and under part F and part
G or H) shall be furnished in a manner that promotes
their economic self-sufficiency and adjustment.
‘‘SEC. 403. PERSONAL RESPONSIBILITY AGREEMENT.
‘‘(a) ASSESSMENT.—The State agency responsible
for administering the State plan shall make an initial as-
sessment of the skills, prior work experience, and employ-
ability of each caretaker who applies for, or receives assist-
ance under the State plan who—
‘‘(1) has attained 18 years of age (or at State
option, 19); or
‘‘(2) has not attained the age specified in para-
graph (1), has not completed high school or obtained
a certificate of high school equivalency, and is not
attending secondary school.
‘‘(b) PERSONAL RESPONSIBILITY AGREEMENTS.—
‘‘(1) IN GENERAL.—On the basis of the assess-
ment made under subsection (a) with respect to an
individual, the State agency, in consultation with the
individual, shall develop an appropriate personal re-
sponsibility agreement for the individual, which—
‘‘(A) provides that participation by the in-
dividual in job search activities is a condition of
eligibility for assistance under the State plan
approved under part A, except during any pe-
riod for which the individual is employed full-
time in an unsubsidized job;
‘‘(B) sets forth an employment goal for the
individual and a plan for moving the individual
immediately into private sector employment;
‘‘(C) sets forth the obligations of the indi-
vidual, which may include a requirement that
the individual attend school, maintain certain
grades and attendance, keep school age children
of the individual in school, immunize children,
attend parenting and money management class-
es, or do other things that will help the individ-
ual become and remain employed in the private
sector;
‘‘(D) may require that the individual enter
the State program established under part F, if
the caseworker determines that the individual
will need education, training, job placement as-
sistance, wage enhancement, or other services
to become employed in the private sector;
‘‘(E) provides that the individual must—
‘‘(i) assign to the State any rights to
support (including, but not limited to,
amounts which have accrued at the time
such assignment is executed) from any
other person the individual may have in
such individual’s own behalf or in behalf of
any other family member for whom the in-
dividual is applying for or receiving assist-
ance or any other family member who is
deemed to be receiving assistance for the
purposes of title XIX; provided that the
assignment of arrearages that accrued in
a month in which the family did not re-
ceive assistance under this part shall cease
to be effective for any family no longer re-
ceiving assistance under this part to which
the State applies the amendments made by
the Work First and Personal Responsibil-
ity Act of 1996 to section 457(c); and
‘‘(ii) cooperate with the State—
‘‘(I) in establishing the paternity
of a child born out of wedlock with re-
spect to whom assistance is claimed,
and
‘‘(II) in obtaining support pay-
ments for the individual and for a
child with respect to whom such as-
sistance is claimed, or in obtaining
any other payments or property due
the individual or the child, unless (in
either case) the individual is found to
have good cause for refusing to co-
operate as determined by the State
agency administering the program
under part D in accordance with
standards prescribed by the Secretary,
which standards shall take into con-
sideration the best interests of the
child on whose behalf assistance is
claimed.
‘‘(F) to the greatest extent possible is de-
signed to move the individual into whatever pri-
vate sector employment the individual is capable
of handling as quickly as possible, and to in-
crease the responsibility and amount of work
the individual is to handle over time;
‘‘(G) describes the services the State will
provide the individual so that the individual can
obtain and keep employment in the private sec-
tor, and describes the job counseling and other
services that will be provided by the State; and
‘‘(H) at the option of the State, may re-
quire the individual to undergo appropriate sub-
stance abuse treatment.
‘‘(2) TIMING.—The State agency shall comply
with paragraph (1) with respect to an individual—
‘‘(A) within 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
assistance under the State plan approved under
this part; or
‘‘(B) within 90 days after the individual is
determined to be eligible for such assistance, in
the case of any other individual.
‘‘(c) PROVISION OF PROGRAM AND EMPLOYMENT IN-
FORMATION.—The State shall inform all applicants for
and recipients of assistance under the State plan approved
under this part of all available services under the State
plan for which they are eligible.
‘‘(d) REQUIREMENT THAT RECIPIENTS ENTER THE
WORK FIRST PROGRAM.—
‘‘(1) IN GENERAL.—On and after October 1,
2003, the State shall place recipients of assistance
under the State plan under this part, who have not
become employed within 1 year after signing an per-
sonal responsibility agreement, in the first available
slot in the State program under part F, except as
provided in paragraph (2).
‘‘(2) EXCEPTIONS.—A state shall not require a
recipient of such assistance to participate in the pro-
gram if the recipient—
‘‘(A) is ill, incapacitated, or of advanced
age;
‘‘(B) except for a child described in sub-
paragraph (C), is responsible for a child under
age 1 year (or age 6 months, at the option of
the State);
‘‘(C) in the case of a second or subsequent
child born since the recipient signed the agree-
ment, is responsible for a child under age 3
months;
‘‘(D) is pregnant in the third trimester;
‘‘(E) is caring for a family member who is
ill or incapacitated; or
‘‘(F) is a single custodial parent and has
a demonstrated inability to obtain needed child
care, as determined by the State, for one or
more of the following reasons:
‘‘(i) unavailability of appropriate child
care within a reasonable distance of the in-
dividual’s home or work site;
‘‘(ii) unavailability or unsuitability of
informal child care by a relative or under
other arrangements; or
‘‘(iii) unavailability of appropriate and
affordable formal child care arrangements.
‘‘SEC. 404. PAYMENT OF ASSISTANCE.
‘‘(a) STANDARDS OF ASSISTANCE.—The State plan
shall specify standards of assistance, including—
‘‘(1) the composition of the family unit for
which assistance will be provided;
‘‘(2) a standard or standards, expressed in a
dollar amount or amounts, to be used in determining
the need of applicants and recipients;
‘‘(3) a standard or standards, expressed in a
dollar amount or amounts, to be used in determining
the amount of the assistance payment; and
‘‘(4) the methodology to be used in determining
the payment amount received by an assistance unit.
‘‘(b) LEVEL OF ASSISTANCE.—Except as otherwise
provided in this title, the State plan shall provide that—
‘‘(1) the determination of need and the amount
of assistance for all applicants and recipients shall
be made on an objective and equitable basis; and
‘‘(2) families of similar composition with similar
needs and circumstances shall be treated similarly.
‘‘(c) FAIR HEARING
AND CORRECTION
OF PAY-
MENTS.—The State plan shall provide that the State
agency shall—
‘‘(1) grant an opportunity for a fair hearing be-
fore the State agency to any individual whose re-
quest for assistance under such plan is denied or is
not acted upon with reasonable promptness; and
‘‘(2) promptly take all necessary steps to cor-
rect any overpayment or underpayment of assistance
under such plan, including the request for withhold-
ing from Federal tax refunds as provided under sec-
tion 416.
‘‘(d) 
OPTIONAL
VOLUNTARY
DIVERSION
PRO-
GRAM.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
and (3), the State plan may provide, with respect to
the geographic area or areas of the State that the
State may select, that upon the recommendation of
the caseworker responsible, the State may offer to
an eligible family one-time assistance for a period of
not more than three months (which assistance, if ac-
cepted by the family, shall be in lieu of any other
assistance under the State plan for such period) in
an amount not to exceed—
‘‘(A) the value of the monthly benefits that
would otherwise be provided to the family under
the State plan; multiplied by
‘‘(B) the number of months in the time pe-
riod.
‘‘(2) ONE-TIME
LIMITATION.—Assistance pur-
suant to paragraph (1) shall not be made more than
once to any family; and
‘‘(3) ADJUSTMENT
OF
ALTERNATIVE
BENE-
FITS.—If, during the period with respect to which
the State has provided one-time assistance to a fam-
ily pursuant to paragraph (1), the family applies for
and (but for the one-time assistance) would be eligi-
ble under the State plan for a monthly benefit great-
er than the value of the amount used in the calcula-
tion under paragraph (1), then, notwithstanding
paragraph (1), the State shall, for that part of the
time period that remains after the family becomes
eligible for the greater monthly benefit, provide
monthly benefits to the family in an amount not to
exceed—
‘‘(A) the amount by which the value of the
greater monthly benefit exceeds the value of the
former monthly benefit, multiplied by the num-
ber of months in the time period; divided by
determine the extent to which the expenditures were
made in accordance with the provisions of this part
and parts F, G, and H.
‘‘(2) AUDIT REPORTS.—Not later than 30 days
following the completion of an audit under this sub-
section, a State shall submit a copy of the audit to
the State legislature and to the Secretary of Health
and Human Services.
‘‘(3) SINGLE AUDITS.—To the extent they are
not inconsistent with this section, the provisions of
chapter 75 of title 31, United States Code, apply to
audit requirements of this section.
‘‘Subpart 2—Administrative Provisions
‘‘SEC. 411. APPROVAL OF PLAN.
‘‘(a) IN GENERAL.—The Secretary shall approve a
State plan which fulfills the requirements under subpart
1 within 120 days of the submission of the plan by the
State to the Secretary.
‘‘(b) DEEMED APPROVAL.—If a State plan has not
been rejected by the Secretary during the period specified
in subsection (a), the plan is considered to have been ap-
proved.
‘‘SEC. 412. COMPLIANCE.
‘‘In the case of any State plan for temporary employ-
ment assistance which has been approved under section