ensure that state and federal funds are being allo-
cated where they will do the most good.
(5) States should understand when families
reach self-sufficiency, what programmatic invest-
ments help families toward economic independence,
and should be rewarded for putting programs in
place that will ensure the long-term success of wel-
fare leavers by helping them move toward economic
independence.
SEC. 3. SELF-SUFFICIENCY STANDARDS.
(a) IN GENERAL.—Section 402 of the Social Security
Act (42 U.S.C. 602) is amended—
(1) in subsection (a), by inserting ‘‘, subject to
subsection (b),’’ after ‘‘the Secretary has found’’;
and
(2) by redesignating subsections (b) and (c) as
subsections (c) and (d), respectively, and by insert-
ing after subsection (a) the following:
‘‘(b) SELF-SUFFICIENCY STANDARDS.—
‘‘(1) IN GENERAL.—The Secretary may not find
that a State plan includes the material described in
subsection (a) unless the plan includes a specifica-
tion of the income needs of families (in this part re-
ferred to as ‘self-sufficiency standards’), adopted or
developed by the State, based on family size, the
number and ages of children in the family, and sub-
State geographical considerations.
‘‘(2) 
CRITERIA.—The 
State 
self-sufficiency
standards shall separately specify the monthly costs
of housing, food, child care, transportation, health
care, other basic needs, and taxes (including tax
benefits), and shall be determined using national,
State, and local data on the cost of purchasing
goods and services in the marketplace.
‘‘(3) CATEGORIES
OF
FAMILIES.—The State
self-sufficiency standards shall categorize families—
‘‘(A) by whether there are 1 or 2 adults in
the family;
‘‘(B) by whether there are 0, 1, 2, 3, or
more than 3 children in the family; and
‘‘(C) by the age of each child in the family,
according to whether a child is an infant, of
pre-school age, of school age, or a teenager.
‘‘(4) REGULATIONS.—The Secretary shall pre-
scribe the protocols, criteria, cost categories, defini-
tions, and means of making inflation adjustments to
be used in developing self-sufficiency standards pur-
suant to this subsection, which shall be based on
commonly accepted definitions of adequacy, such as
those used for establishing fair market rents, and
that reflect, to the extent possible, consensus and
use among those calculating family budgets and self-
sufficiency standards.
‘‘(5) RECENCY OF DATA.—The self-sufficiency
standards developed pursuant to this subsection
shall—
‘‘(A) be recalculated on adoption if the
data on which the standards are based is more
than 3 years old;
‘‘(B) be recalculated every 5 years after
adoption; and
‘‘(C) be updated for inflation each year
after adoption in which the standards are not
being recalculated pursuant to subparagraph
(B).’’.
(b) REPORTS.—Section 411 of such Act (42 U.S.C.
611) is amended by adding at the end the following:
‘‘(c) SELF-SUFFICIENCY REPORTS.—
‘‘(1) COLLECTION OF INFORMATION ON INCOME
OF PERSONS LEAVING TANF.—With respect to each
family whose participation in the State program
funded under this part ends during a calendar quar-
ter in a fiscal year, the State shall collect informa-
tion on the monthly income of the family as of the
time the participation ends and during the same
quarter in each of the next 2 fiscal years, based on
data of the State unemployment insurance program
and benefit programs whose assistance, subsidies,
and services provided to the family by any agency of
government has the effect of reducing the cost of liv-
ing of the family.
‘‘(2) ANNUAL
REPORTS.—Each eligible State
shall submit to the Secretary annually a report that
contains the following information for the fiscal year
most recently ending before the date the report is
submitted:
‘‘(A) INCOME
INFORMATION.—The infor-
mation collected pursuant to paragraph (1) of
this subsection during the fiscal year as com-
pared with the State self-sufficiency standards
developed pursuant to section 402(b) for the
families involved.
‘‘(B) INFORMATION
ON
PROGRAMS
AND
SERVICES LEADING TO SELF-SUFFICIENCY.—A
description of the ways in which, during the fis-
cal year, the State program funded under this
part and support services provided by the State
to recipients of assistance from the program
moved families toward self-sufficiency, which
shall highlight programs and services that ap-
peared to have a particularly positive effect on
achieving self-sufficiency.
‘‘(C) USES OF SELF-SUFFICIENCY STAND-
ARDS.—A description of how the State used the
self-sufficiency standards during the fiscal year,
including whether the standards were used—
‘‘(i) in counseling recipients of assist-
ance from the State program funded under
this part about their income needs and ca-
reer options;
‘‘(ii) as a benchmark for program
evaluation;
‘‘(iii) to identify opportunities to im-
prove 
program 
performance, 
including
identifying sub-groups or geographic areas
in need of enhanced services;
‘‘(iv) to assess need of recipients of
assistance for vocational training, pre-ap-
prenticeship and apprenticeship activities,
post-secondary education, and basic lit-
eracy, English-as-a-second-language, men-
tal health, substance abuse, domestic vio-
lence, and homelessness services; and
‘‘(v) to identify programs or strategies
which are most promising in assisting
those who participate in the State program
to achieve self-sufficiency.
‘‘(3) SUMMARIES
OF
STATE
REPORTS.—The
Secretary shall annually submit to the Congress a
report that summarizes the reports submitted pursu-
ant to paragraph (2), and shall make the reports
available electronically to the general public in a
timely manner.’’.
(c) FUNDING.—Section 413 of such Act (42 U.S.C.
613) is amended by adding at the end the following:
‘‘(k) TECHNICAL ASSISTANCE IN DEVELOPING SELF-
SUFFICIENCY STANDARDS.—
‘‘(1) IN GENERAL.—The Secretary may provide
financial or technical assistance to an eligible State
to enable the State to develop or improve the State
self-sufficiency standards and produce State reports
required by section 402(b). The Secretary shall
carry out this paragraph by making a grant to or
entering into a contract with an organization or in-
stitution with substantial experience in calculating
and implementing on the State level family budgets
and self-sufficiency standards. An organization or
institution desiring to provide technical assistance
described in this paragraph shall submit to the Sec-
retary an application at such time, in such manner,
and accompanied by such information as the Sec-
retary may reasonably require.
‘‘(2) LIMITATIONS ON AUTHORIZATION OF AP-
PROPRIATIONS.—For the cost of carrying out para-
graph (1), there are authorized to be appropriated to
the Secretary not more than $1,000,000 for each
fiscal year.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect 1 year after the date of the
enactment of this Act.
SEC. 4. SELF-SUFFICIENCY BONUS.
(a) IN GENERAL.—Section 403(a) of the Social Secu-
rity Act (42 U.S.C. 603(a)) is amended by adding at the
end the following:
‘‘(6) BONUS TO ENCOURAGE STATES TO MOVE
FAMILIES TO SELF-SUFFICIENCY.—
‘‘(A) IN
GENERAL.—The Secretary shall
make a grant pursuant to this paragraph to an
eligible State for each fiscal year specified in
subparagraph (G) for which the State is a self-
sufficiency improvement State.
‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IN
GENERAL.—The amount of
the grant payable under this paragraph to
a self-sufficiency improvement State for a
fiscal year shall, subject to clause (ii), be
an amount equal to 1 percent of the State
family assistance grant.
‘‘(ii) PRO
RATA
INCREASE.—If the
dollar amount specified in subparagraph
(G) for a fiscal year exceeds the total
amount otherwise payable under this para-
graph for a fiscal year, the Secretary shall
increase the amount of the grant otherwise
payable to each State by such equal per-
centage as is necessary to ensure that such
dollar amount equals the total amount so
payable.
‘‘(C) 
SELF-SUFFICIENCY
IMPROVEMENT
STATE.—A State is a self-sufficiency improve-
ment State for a fiscal year for purposes of this
paragraph if the self-sufficiency score of the
State for the fiscal year is greater than the self-
sufficiency score of the State for the preceding
fiscal year.
‘‘(D) STATE SELF-SUFFICIENCY SCORE.—
The self-sufficiency score of a State for a fiscal
year for purposes of this paragraph shall be an
amount equal to the average of the self-suffi-
ciency scores of the qualified leaver families in
the State for the fiscal year.
‘‘(E) FAMILY SELF-SUFFICIENCY SCORE.—
‘‘(i) IN
GENERAL.—The self-suffi-
ciency score of a family for a fiscal year
for purposes of this paragraph shall be an
amount equal to the income of the family
for the fiscal year divided by the State self-
sufficiency standard for the family for the
fiscal year.
‘‘(ii) DETERMINATION OF INCOME.—
In determining the income of a family, the
State shall take into account as income
earnings, child support, and the value of
benefits, assistance, subsidies, and services
of any kind that are provided to the family
by any agency of government and the re-
ceipt of which has the effect of reducing
the cost of living of the family, net of any
premium, copayment, or fee required to ob-
tain the benefit, assistance, or service.
‘‘(F) DEFINITIONS.—In this paragraph:
‘‘(i) QUALIFIED LEAVER FAMILIES.—
The term ‘qualified leaver families’ means,
with respect to a State, the leaver families
in the State.
‘‘(ii) LEAVER
FAMILIES.—The term
‘leaver families’ means, with respect to a
State and a particular fiscal year, all fami-
lies that whose participation in the State
program funded under this part ended dur-
ing the period that begins with October 1
of the fiscal year in which this paragraph
is enacted, and ends with the end of the
particular fiscal year.
‘‘(G) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
each of fiscal years 2002 through 2006
$200,000,000 for grants under this para-
graph.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on October 1, 2002.
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