I
107TH CONGRESS
2D SESSION
H. R. 3625
To reauthorize and reform the program of block grants to States for
temporary assistance for needy families, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 24, 2002
Mr. CARDIN (for himself, Mr. STARK, Mr. LEVIN, Mr. MCDERMOTT, and Mr.
DOGGETT) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To reauthorize and reform the program of block grants to
States for temporary assistance for needy families, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Next Step in Reform-
ing Welfare Act’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Amendment of Social Security Act.
Sec. 702. Ban on using Federal TANF funds to replace State and local spend-
ing that does not meet the definition of qualified State expendi-
tures.
TITLE VIII—IMPROVING INFORMATION ABOUT TANF RECIPIENTS
AND PROGRAMS
Sec. 801. Extension of funding of studies and demonstrations.
Sec. 802. Longitudinal studies of employment and earnings of TANF leavers.
Sec. 803. Inclusion of disability status in information States report about
TANF families.
Sec. 804. Annual report to the Congress to include greater detail about State
programs funded under TANF.
Sec. 805. Enhancement of understanding of the reasons individuals leave State
TANF programs.
Sec. 806. Standardized State plans.
TITLE IX—EFFECTIVE DATE
Sec. 901. Effective date.
SEC. 3. AMENDMENT OF SOCIAL SECURITY ACT.
Except as otherwise expressly provided, wherever in
this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provi-
sion, the amendment or repeal shall be considered to be
made to a section or other provision of the Social Security
Act.
TITLE I—CONTINUATION OF
CERTAIN GRANTS
SEC. 101. FAMILY ASSISTANCE GRANTS.
(a) IN GENERAL.—Section 403(a)(1)(A) (42 U.S.C.
603(a)(1)(A)) is amended by striking ‘‘1996’’ and all that
follows through ‘‘2002’’ and inserting ‘‘2003 through
2007’’.
(b) INFLATION ADJUSTMENT.—Section 403(a)(1)
(42 U.S.C. 603(a)(1)) is amended—
(1) in subparagraph (B)—
(A) by striking ‘‘means the greatest of—’’
and inserting ‘‘means, with respect to a fiscal
year specified in subparagraph (A) of this
paragraph—
‘‘(i) the greatest of—’’;
(B) by redesignating each of clauses (i),
(ii)(I), (ii)(II), and (iii) as subclauses (I),
(II)(aa), (II)(bb), and (III), respectively;
(C) by indenting each of the provisions
specified in subparagraph (B) of this paragraph
2 additional ems to the right;
(D) by striking the period and inserting ‘‘;
multiplied by’’; and
(E) by adding at the end the following:
‘‘(ii) 1.00, plus the inflation percent-
age (as defined in subparagraph (F) of
this paragraph) in effect for the fiscal year
specified in subparagraph (A) of this para-
graph.’’; and
(2) by adding at the end the following:
‘‘(F) INFLATION PERCENTAGE.—For pur-
poses of subparagraph (B) of this paragraph,
the inflation percentage applicable to a fiscal
year is the percentage (if any) by which—
‘‘(i) the average of the Consumer
Price Index (as defined in section 1(f)(5)
of the Internal Revenue Code of 1986) for
the 12-month period ending on September
30 of the immediately preceding fiscal
year; exceeds
‘‘(ii) the average of the Consumer
Price Index (as so defined) for the 12-
month period ending on September 30,
2001.’’.
SEC. 
102. 
BONUS 
TO 
REWARD 
HIGH 
PERFORMANCE
STATES.
Section 
403(a)(4) 
(42 
U.S.C. 
603(a)(4)) 
is
amended—
(1) 
in 
subparagraph 
(D), 
by 
striking
‘‘$1,000,000,000’’ and inserting ‘‘$1,800,000,000’’;
(2) in subparagraph (E), by striking ‘‘and
2003’’ and inserting ‘‘2003, 2004, 2005, 2006, and
2007’’; and
(3) in subparagraph (F), by striking ‘‘2003
$1,000,000,000’’ 
and 
inserting 
‘‘2002
$800,000,000, and for fiscal years 2003 through
2007 $1,000,000,000,’’.
SEC. 103. EXTENSION OF SUPPLEMENTAL GRANTS.
Section 
403(a)(3) 
(42 
U.S.C. 
603(a)(3)) 
is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘and’’ at the end of clause
(i);
(B) by striking the period at the end of
clause (ii) and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(iii) for each of fiscal years 2003
through 2007, a grant in an amount equal
to the amount required to be paid to the
State under this paragraph in fiscal year
2001.’’;
(2) in subparagraph (E), by striking ‘‘1998’’
and all that follows and inserting ‘‘2003 through
2007 $1,597,250,000 for grants under this para-
graph.’’; and
(3) by striking subparagraph (G).
SEC. 104. ADDITIONAL GRANTS FOR STATES WITH LOW
FEDERAL FUNDING PER POOR CHILD.
Section 403(a) (42 U.S.C. 603(a)) is amended by
adding at the end the following:
‘‘(6) ADDITIONAL GRANTS FOR STATES WITH LOW
FEDERAL FUNDING PER POOR CHILD.—
‘‘(A) IN
GENERAL.—The Secretary shall
make a grant pursuant to this paragraph to a
State—
‘‘(i) for fiscal year 2003, if the State
is an inadequately poverty-funded State for
fiscal year 2002; and
‘‘(ii) for any of fiscal years 2004
through 2007, if the State is an inad-
equately poverty-funded State for any prior
fiscal year after fiscal year 2002.
‘‘(B) INADEQUATELY
POVERTY-FUNDED
STATE.—For purposes of this paragraph, a
State is an inadequately poverty-funded State
for a particular fiscal year if—
‘‘(i) the total amount of the grants
made to the State under paragraph (1),
paragraph (3), and this paragraph for the
particular fiscal year, divided by the num-
ber of children in poverty in the State with
respect to the particular fiscal year is less
than 75 percent of the total amount of
grants made to all eligible States under
paragraph (1), paragraph (3), and this
paragraph for the particular fiscal year, di-
vided by the total number of children living
in poverty in all eligible States with respect
to the particular fiscal year; and
‘‘(ii) the total of the amounts paid to
the State under this subsection for all
prior fiscal years that have not been ex-
pended by the State by the end of the pre-
ceding fiscal year is less than 50 percent of
State family assistance grant for the par-
ticular fiscal year.
‘‘(C) AMOUNT OF GRANT.—The amount of
the grant to be made under this paragraph to
a State for a particular fiscal year shall be—
‘‘(i) if the particular fiscal year is fis-
cal year 2003, an amount equal to—
‘‘(I) the number of children in
poverty in the State for the then pre-
ceding fiscal year, divided by the total
number of children in poverty in all
States that are inadequately poverty-
funded States for the then preceding
fiscal year; multiplied by
‘‘(II) the amount appropriated
pursuant to subparagraph (G) for the
particular fiscal year; or
‘‘(ii) if the particular fiscal year is any
of fiscal years 2004 through 2007, an
amount equal to—
‘‘(I) the amount required to be
paid to the State under this para-
graph for the then preceding fiscal
year; plus
‘‘(II) if the State is an inad-
equately poverty-funded State for the
then preceding fiscal year—
‘‘(aa) the number of children
in poverty in the State for the
then preceding fiscal year, di-
vided by the total number of chil-
dren in poverty in all States that
are inadequately poverty-funded
States for the then preceding fis-
cal year; multiplied by
‘‘(bb) the amount appro-
priated pursuant to subpara-
graph (G) for the particular fis-
cal year.
‘‘(D) USE OF GRANT.—A State to which a
grant is made under this paragraph shall use
the grant for any purpose for which a grant
made under this part may be used.
‘‘(E) DEFINITIONS.—In this paragraph:
‘‘(i) CHILDREN
IN
POVERTY.—The
term ‘children in poverty’ means, with re-
spect to a State and a fiscal year, the
number of children residing in the State
who had not attained 18 years of age and
whose family income was less than the pov-
erty line then applicable to the family, as
of the end of the fiscal year.
‘‘(ii) POVERTY LINE.—The term ‘pov-
erty line’ has the meaning given the term
in section 673(2) of the Omnibus Budget
Reconciliation Act of 1981, including any
revision required by such section.
‘‘(F) FAMILY INCOME DETERMINATIONS.—
For purposes of this paragraph, family income
includes cash income, except cash benefits from
means-tested public programs and child support
payments.
‘‘(G) APPROPRIATIONS.—
‘‘(i) IN GENERAL.—Out of any money
in the Treasury of the United States not
otherwise appropriated, there are appro-
priated for grants under this paragraph—
‘‘(I) $65,000,000 for fiscal year
2003;
‘‘(II) $130,000,000 for fiscal
year 2004;
‘‘(III) $195,000,000 for fiscal
year 2005;
‘‘(IV) $260,000,000 for fiscal
year 2006; and
‘‘(V) $325,000,000 for fiscal year
2007.
‘‘(ii) AVAILABILITY.—Amounts made
available under clause (i) shall remain
available until expended.’’.
SEC. 105. CONTINGENCY FUND.
(a) IN
GENERAL.—Section 403(b) (42 U.S.C.
603(b)) is amended—
(1) in paragraph (2), by striking ‘‘1997’’ and
all that follows and inserting ‘‘2003 through 2007
such sums as are necessary for payments under this
subsection’’; and
(2) in paragraph (3), by striking subparagraph
(C) and inserting the following:
‘‘(C) LIMITATION ON MONTHLY PAYMENT
TO A STATE.—The total amount paid to a sin-
gle State under subparagraph (A) during a fis-
cal year shall not exceed 20 percent of the
State family assistance grant.’’.
(b) APPLICATION OF REGULAR MAINTENANCE OF
EFFORT REQUIREMENT.—Section 409(a)(10) (42 U.S.C.
609(a)(10)) is amended by striking ‘‘100 percent of his-
toric State expenditures (as defined in paragraph
(7)(B)(iii) of this subsection)’’ and inserting ‘‘the applica-
ble percentage (as defined in paragraph (7)(B)(ii) of this
subsection) of inflation-adjusted historic State expendi-
tures (as defined in paragraph (7)(B)(vi) of this sub-
section)’’.
(c) MODIFICATION
OF UNEMPLOYMENT TEST TO
BECOME
NEEDY
STATE.—Section 403(b)(5)(A) (42
U.S.C. 603(b)(5)(A)) is amended to read as follows:
‘‘(A) the average rate of total unemploy-
ment in the State (seasonally adjusted) for the
period consisting of the most recent 3 months
for which data are available has increased by
the lesser of 1.5 percentage points or by 50 per-
cent over the corresponding 3-month period in
the preceding fiscal year; or’’.
(d) MODIFICATION OF FOOD STAMP TEST TO BE-
COME NEEDY STATE.—Section 403(b)(5)(B) (42 U.S.C.
603(b)(5)(B)) is amended to read as follows:
‘‘(B) as determined by the Secretary of
Agriculture, the monthly average number of
households (as of the last day of each month)
that participated in the food stamp program in
the State in the then most recently concluded 3-
month period for which data are available ex-
ceeds by at least 10 percent the monthly aver-
age number of households (as of the last day of
each month) in the State that participated in
the food stamp program in the corresponding 3-
month period in the preceding fiscal year.’’.
(e) SIMPLIFICATION
OF
RECONCILIATION
FOR-
MULA.—Section 403(b)(6) (42 U.S.C. 603(b)(6)) is
amended to read as follows:
‘‘(6) ANNUAL RECONCILIATION.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (3), if the Secretary makes a payment to
a State under this subsection in a fiscal year,
then the State shall remit to the Secretary,
within 1 year after the end of the first subse-
quent period of 3 consecutive months for which
the State is not a needy State, an amount equal
to the amount (if any) by which—
‘‘(i) the maintenance of effort level (as
defined in subparagraph (B)(i) of this
paragraph) for the fiscal year, plus the
State contribution (as defined in subpara-
graph (B)(ii) of this paragraph) in the fis-
cal year; exceeds
‘‘(ii) the qualified State expenditures
(as defined in section 409(a)(7)(B)(i)) in
the fiscal year.
‘‘(B) DEFINITIONS.—In subparagraph (A):
‘‘(i) 
MAINTENANCE
OF
EFFORT
LEVEL.—The term ‘‘maintenance of effort
level’’ means, with respect to a State and
a fiscal year, an amount equal to the appli-
cable percentage of historic State expendi-
tures (as defined in section 409(a)(7)(B))
for the fiscal year.
‘‘(ii) 
STATE
CONTRIBUTION.—The
term ‘State contribution’ means, with re-
spect to a fiscal year—
‘‘(I) the total amount paid to the
State under this subsection in the fis-
cal year; multiplied by
‘‘(II) 1 minus the greater of 75
percent or the Federal medical assist-
ance percentage for the State (as de-
fined in section 1905(b)), divided by
the greater of 75 percent or the Fed-
eral medical assistance percentage for
the State (as defined in section
1905(b)).’’.
(f) INCREASE IN NUMBER OF MONTHS FOR WHICH
STATE
MAY
QUALIFY
FOR
PAYMENTS.—Section
403(b)(4) (42 U.S.C. 603(b)(4)) is amended by striking
‘‘2-month’’ and inserting ‘‘3-month’’.
TITLE II—POVERTY REDUCTION
SEC. 201. ADDITIONAL PURPOSE OF TANF PROGRAM.
Section 401(a) (42 U.S.C. 601(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(3);
(2) by striking the period at the end of para-
graph (4) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(5) reduce the extent and severity of poverty
and promote self-sufficiency among families with
children.’’.
SEC. 202. CHILD POVERTY REDUCTION GRANTS.
Section 403(a) (42 U.S.C. 603(a)) is further amend-
ed by adding at the end the following:
‘‘(7) BONUS TO REWARD STATES THAT REDUCE
CHILD POVERTY.—
‘‘(A) IN GENERAL.—Beginning with fiscal
year 2003, the Secretary shall make a grant
pursuant to this paragraph to each State for
each fiscal year for which the State is a quali-
fied child poverty reduction State.
‘‘(B) AMOUNT OF GRANT.—
‘‘(i) IN
GENERAL.—Subject to this
subparagraph, the amount of the grant to
be made to a qualified child poverty reduc-
tion State for a fiscal year shall be an
amount equal to—
‘‘(I) the number of children who
had not attained 18 years of age by
the end of the then most recently
completed calendar year and who re-
sided in the State as of the end of
such calendar year, divided by the
number of such children who resided
in the United States as of the end of
such calendar year; multiplied by
‘‘(II) the amount appropriated
pursuant to subparagraph (F) for the
fiscal year.
‘‘(ii) LIMITATIONS.—
‘‘(I) 
MINIMUM
GRANT.—The
amount of the grant to be made to a
qualified child poverty reduction State
for a fiscal year shall be not less than
$1,000,000.
‘‘(II) 
MAXIMUM
GRANT.—The
amount of the grant to be made to a
qualified child poverty reduction State
for a fiscal year shall not exceed an
amount equal to 5 percent of the
State family assistance grant for the
fiscal year.
‘‘(iii) PRO
RATA
INCREASE.—If the
amount available for grants under this
paragraph for a fiscal year is greater than
the total amount of payments otherwise re-
quired to be made under this paragraph
for the fiscal year, then the amount other-
wise payable to any State for the fiscal
year under this paragraph shall, subject to
clause (ii)(II), be increased by such equal
percentage as may be necessary to ensure
that the total of the amounts payable for
the fiscal year under this paragraph equals
the amount available for the grants.
‘‘(iv) PRO RATA REDUCTION.—If the
amount available for grants under this
paragraph for a fiscal year is less than the
total amount of payments otherwise re-
quired to be made under this paragraph
for the fiscal year, then the amount other-
wise payable to any State for the fiscal
year under this paragraph shall, subject to
clause (ii)(I), be reduced by such equal
percentage as may be necessary to ensure
that the total of the amounts payable for
the fiscal year under this paragraph equals
the amount available for the grants.
‘‘(C) USE OF GRANT.—A State to which a
grant is made under this paragraph shall use
the grant for any purpose for which a grant
made under this part may be used.
‘‘(D) DEFINITIONS.—In this paragraph:
‘‘(i) QUALIFIED CHILD POVERTY RE-
DUCTION
STATE.—The term ‘qualified
child poverty reduction State’ means, with
respect to a fiscal year, a State if—
‘‘(I) 
the 
child 
poverty 
rate
achieved by the State for the then
most recently completed calendar year
for which such information is avail-
able is less than the lowest child pov-
erty rate achieved by the State during
the applicable period; and
‘‘(II) the average depth of child
poverty in the State for the then most
recently completed calendar year for
which such information is available is
not greater than the average depth of
child poverty in the State for the cal-
endar year that precedes such then
most 
recently 
completed 
calendar
year.
‘‘(ii) APPLICABLE PERIOD.—In clause
(i), the term ‘applicable period’ means,
with respect to a State and the calendar
year referred to in clause (i)(I), the period
that—
‘‘(I) begins with the calendar
year that, as of October 1, 2002, pre-
cedes the then most recently com-
pleted calendar year for which such
information is available; and
‘‘(II) ends with the calendar year
that precedes the calendar year re-
ferred to clause (i)(I).
‘‘(iii) CHILD
POVERTY
RATE.—The
term ‘child poverty rate’ means, with re-
spect to a State and a calendar year, the
percentage of children residing in the State
during the calendar year whose family in-
come for the calendar year is less than the
poverty line then applicable to the family.
‘‘(iv) AVERAGE DEPTH OF CHILD POV-
ERTY.—The term ‘average depth of child
poverty’ means with respect to a State and
a calendar year, the average dollar amount
by which family income is exceeded by the
poverty line, among children in the State
whose family income for the calendar year
is less than the applicable poverty line.
‘‘(v) POVERTY LINE.—The term ‘pov-
erty line’ has the meaning given the term
in section 673(2) of the Omnibus Budget
Reconciliation Act of 1981, including any
revision required by such section applicable
to a family of the size involved.
‘‘(E) FAMILY INCOME DETERMINATIONS.—
For purposes of this paragraph, family income
includes cash income, child support payments,
government cash payments, and benefits under
the Food Stamp Act of 1977 that are received
by any family member, and family income shall
be determined after payment of all taxes and
receipt of any tax refund or rebate by any fam-
ily member.
‘‘(F) APPROPRIATIONS.—
‘‘(i) IN GENERAL.—Out of any money
in the Treasury of the United States not
otherwise appropriated, there are appro-
priated for each of fiscal years 2003
through 2007 $150,000,000 for grants
under this paragraph.
‘‘(ii) AVAILABILITY.—Amounts made
available under clause (i) shall remain
available until expended.’’.
SEC. 203. REVIEW AND CONCILIATION PROCESS.
(a) REQUIREMENT.—Section 408(a) (42 U.S.C.
608(a)) is amended by adding at the end the following:
‘‘(12) REVIEW AND CONCILIATION PROCESS RE-
QUIREMENTS.—A State to which a grant is made
under section 403 shall not impose a sanction
against a person under the State program funded
under this part, unless the State—
‘‘(A) has attempted at least twice (using at
least 2 different methods) to notify the person
of the impending imposition of the sanction, the
reason for the proposed sanction, the amount of
the sanction, the length of time during which
the proposed sanction would be in effect, and
the steps required to come into compliance or to
show good cause for noncompliance;
‘‘(B) 
has 
afforded 
the 
person 
an
opportunity—
‘‘(i) to meet with the caseworker in-
volved or another individual who has au-
thority to determine whether to impose the
sanction; and
‘‘(ii) to explain why the person did not
comply with the requirement on the basis
of which the sanction is to be imposed;
‘‘(C) has considered and taken any such
explanation into account in determining to im-
pose the sanction;
‘‘(D) has specifically considered whether
certain conditions exist, such as a physical or
mental impairment, domestic violence, or lim-
ited proficiency in English, that contributed to
the noncompliance of the person; and
‘‘(E) in determining whether to impose the
sanction, has used screening tools developed in
consultation with individuals or groups with ex-
pertise in matters described in subparagraph
(D).’’.
(b) PENALTY.—Section 409(a) (42 U.S.C. 609(a)) is
amended by adding at the end the following:
‘‘(15) PENALTY
FOR
FAILURE
OF
STATE
TO
USE REVIEW AND CONCILIATION PROCESS.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 for a fiscal year has violated
section 408(a)(12) during the fiscal year, the
Secretary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to 5 percent of the State family assist-
ance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a
fiscal year based on the degree of noncompli-
ance.’’.
SEC. 204. REPLACEMENT OF CASELOAD REDUCTION CRED-
IT WITH EMPLOYMENT CREDIT.
(a) EMPLOYMENT CREDIT TO REWARD STATES IN
WHICH FAMILIES LEAVE WELFARE FOR WORK; ADDI-
TIONAL CREDIT FOR FAMILIES WITH HIGHER EARN-
INGS.—Section 407(a) (42 U.S.C. 607(a)) is amended by
adding at the end the following:
‘‘(3) EMPLOYMENT CREDIT.—
‘‘(A) IN GENERAL.—The minimum partici-
pation rate otherwise applicable to a State
under this subsection for a fiscal year shall be
reduced by the number of percentage points in
the employment credit for the State for the fis-
cal year.
‘‘(B) CALCULATION OF CREDIT.—
‘‘(i) IN
GENERAL.—The employment
credit for a State for a fiscal year is an
amount equal to—
‘‘(I) twice the number of families
that, during the estimating period,
ceased to receive cash payments under
the State program funded under this
part, and that, during the employment
period, had earnings; divided by
‘‘(II) the average monthly num-
ber of families that include an adult
who, during the estimating period, re-
ceived cash payments under the State
program funded under this part.
‘‘(ii) DEFINITIONS.—In clause (i):
‘‘(I) ESTIMATING
PERIOD.—The
term ‘estimating period’ means, with
respect to a fiscal year, the 1st quar-
ter of the preceding fiscal year.
‘‘(II) EMPLOYMENT
PERIOD.—
The term ‘employment period’ means,
with respect to a fiscal year, the 3rd
quarter of the preceding fiscal year.
‘‘(iii) SPECIAL RULE FOR FORMER RE-
CIPIENTS
WITH
HIGHER
EARNINGS.—In
caculating the employment credit for a
State for a fiscal year, a family that, dur-
ing the employment period, earned more
than 33 percent of the average wage in the
State (determined on the basis of State
unemployment data) shall be considered to
be 1.5 families.
‘‘(4) TRANSITION RULE.—Notwithstanding the
preceding provisions of this subsection, if the min-
imum participation rate applicable to a State under
this section for the preceding fiscal year (determined
as if paragraph (3) of subsection (b), as in effect im-
mediately before the effective date of this paragraph,
were still in effect) would be less than 50 percent,
the minimum participation rate applicable to the
State under this section for the fiscal year shall be
the lesser of—
‘‘(A) 10 percentage points greater than the
minimum participation rate applicable to the
State under this section for the preceding fiscal
year; or
‘‘(B) 50 percent.’’.
(b) ELIMINATION OF CASELOAD REDUCTION CRED-
IT.—Section 407(b) (42 U.S.C. 607(b)(3)) is amended by
striking paragraph (3) and redesignating paragraphs (4)
and (5) as paragraphs (3) and (4), respectively.
SEC. 205. RESTORATION OF FUNDING OF THE SOCIAL
SERVICES BLOCK GRANT.
Section 2003(c) (42 U.S.C. 1379b(c)) is amended—
(1) in paragraph (10), by striking ‘‘and’’;
(2) in paragraph (11), by striking ‘‘2001 and
each fiscal year thereafter.’’ and inserting ‘‘2001;
and’’; and
(3) by adding at the end the following:
‘‘(12) $2,800,000,000 for fiscal year 2003 and
each succeeding fiscal year.’’.
TITLE III—REQUIRING AND
REWARDING WORK
SEC. 301. EFFECT OF WAGE SUBSIDIES ON 5-YEAR LIMIT.
Section 408(a)(7) (42 U.S.C. 608(a)(7)) is amended
by adding at the end the following:
‘‘(H) LIMITATION
ON
MEANING
OF ‘AS-
SISTANCE’ FOR FAMILIES WITH INCOME FROM
EMPLOYMENT.—For purposes of this para-
graph, a benefit or service provided to a family
during a month under the State program fund-
ed under this part shall not be considered as-
sistance under the program if, during the
month, the family includes an adult or a minor
child head of household who has received at
least such amount of income from employment
as the State may establish.’’.
SEC. 302. CHILD CARE.
(a) INCREASE IN ENTITLEMENT FUNDING.—Section
418(a)(3) (42 U.S.C. 618(a)(3)) is amended—
(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 a semicolon; and
(3) by adding at the end the following:
‘‘(G) $3,967,000,000 for fiscal year 2003;
‘‘(H) $4,467,000,000 for fiscal year 2004;
‘‘(I) $4,967,000,000 for fiscal year 2005;
‘‘(J) $5,467,000,000 for fiscal year 2006;
and
‘‘(K) 
$5,967,000,000 
for 
fiscal 
year
2007.’’.
(b) INCREASE IN SET ASIDE FOR CHILD CARE QUAL-
ITY.—Section 658G of the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9858e) is amended
by striking ‘‘4 percent’’ and inserting ‘‘12 percent’’.
(c) APPLICABILITY OF STATE OR LOCAL HEALTH
AND SAFETY STANDARDS TO OTHER TANF CHILD CARE
SPENDING.—Section 402(a) (42 U.S.C. 602(a)) is amend-
ed by adding at the end the following:
‘‘(8) CERTIFICATION OF PROCEDURES TO EN-
SURE THAT CHILD CARE PROVIDERS COMPLY WITH
APPLICABLE STATE OR LOCAL HEALTH AND SAFETY
STANDARDS.—A certification by the chief executive
officer of the State that procedures are in effect to
ING TANF.—Section 408(a)(3) (42 U.S.C. 608(a)(3)) is
amended to read as follows:
‘‘(3) NO ASSISTANCE FOR FAMILIES NOT AS-
SIGNING
CERTAIN
SUPPORT
RIGHTS
TO
THE
STATE.—A State to which a grant is made under
section 403 shall require, as a condition of providing
assistance to a family under the State program
funded under this part, that a member of the family
assign to the State any rights the family member
may have (on behalf of the family member or of any
other person for whom the family member has ap-
plied for or is receiving such assistance) to support
from any other person, not exceeding the total
amount of assistance paid to the family under the
program, which accrues during the period that the
family receives assistance under the program.’’.
(b) INCREASING CHILD SUPPORT PAYMENTS
TO
FAMILIES AND SIMPLIFYING CHILD SUPPORT DISTRIBU-
TION RULES.—
(1) DISTRIBUTION RULES.—
(A) IN
GENERAL.—Section 457(a) (42
U.S.C. 657(a)) is amended to read as follows:
‘‘(a) IN GENERAL.—Subject to subsections (d) and
(e), the amounts collected on behalf of a family as support