(v) subclauses (I) through (V) of 
clause (xvi) as clauses (i) through (v), re-
spectively; and 
(B) moving each such redesignated provi-
sion 2 ems to the left. 
(b) REPORT ON PARTICIPATION IN WORK ACTIVI-
TIES.—Section 411(a)(1) (42 U.S.C. 611(a)(1)), as 
amended by subsection (a)(3) of this section, is amended 
by striking subparagraphs (K) and (L) and inserting the 
following: 
‘‘(K) The work eligibility status of each in-
dividual in the family, and— 
‘‘(i) in the case of each work-eligible 
individual (as defined in the regulations 
promulgated 
pursuant 
to 
section 
407(i)(1)(A)(i)) in the family— 
‘‘(I) the number of hours (includ-
ing zero hours) per month of partici-
pation in— 
‘‘(aa) work activities (as de-
fined in section 407(d)); and 
‘‘(bb) any other activity re-
quired by the State to remove a 
barrier to employment; and 
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‘‘(ii) in the case of each individual in 
the family who is not a work-eligible indi-
vidual (as so defined), the reason for that 
status. 
‘‘(L) For each work-eligible individual (as 
so defined) and each adult in the family who 
did not participate in work activities (as so de-
fined) during a month, the reason for the lack 
of participation.’’. 
(c) REPORTING OF INFORMATION ON EMPLOYMENT 
AND EARNINGS OUTCOMES.—Section 411(c) (42 U.S.C. 
611(c)) is amended to read as follows: 
‘‘(c) REPORTING OF INFORMATION ON EMPLOYMENT 
AND EARNINGS OUTCOMES.—The Secretary, in consulta-
tion with the Secretary of Labor, shall determine the in-
formation that is necessary to compute the employment 
and earnings outcomes and the statistical adjustment 
model for the employment and earnings outcomes required 
under section 407, and each eligible State shall collect and 
report that information to the Secretary.’’. 
SEC. 16. TECHNICAL CORRECTIONS TO DATA EXCHANGE 
STANDARDS TO IMPROVE PROGRAM COORDI-
NATION. 
(a) IN
GENERAL.—Section 411(d) (42 U.S.C. 
611(d)) is amended to read as follows: 
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‘‘(d) DATA EXCHANGE STANDARDS FOR IMPROVED 
INTEROPERABILITY.— 
‘‘(1) DESIGNATION.—The Secretary shall, in 
consultation with an interagency work group estab-
lished by the Office of Management and Budget and 
considering State government perspectives, by rule, 
designate data exchange standards to govern, under 
this part— 
‘‘(A) necessary categories of information 
that State agencies operating programs under 
State plans approved under this part are re-
quired under applicable Federal law to elec-
tronically exchange with another State agency; 
and 
‘‘(B) Federal reporting and data exchange 
required under applicable Federal law. 
‘‘(2) 
REQUIREMENTS.—The 
data 
exchange 
standards required by paragraph (1) shall, to the ex-
tent practicable— 
‘‘(A) incorporate a widely accepted, non- 
proprietary, searchable, computer-readable for-
mat, such as the eXtensible Markup Language; 
‘‘(B) contain interoperable standards devel-
oped and maintained by intergovernmental 
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partnerships, such as the National Information 
Exchange Model; 
‘‘(C) incorporate interoperable standards 
developed and maintained by Federal entities 
with authority over contracting and financial 
assistance; 
‘‘(D) be consistent with and implement ap-
plicable accounting principles; 
‘‘(E) be implemented in a manner that is 
cost-effective and improves program efficiency 
and effectiveness; and 
‘‘(F) be capable of being continually up-
graded as necessary. 
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed to require a 
change to existing data exchange standards found to 
be effective and efficient.’’. 
(b) EFFECTIVE DATE.—Not later than the date that 
is 24 months after the date of the enactment of this sec-
tion, the Secretary of Health and Human Services shall 
issue a proposed rule that— 
(1) identifies federally required data exchanges, 
include specification and timing of exchanges to be 
standardized, and address the factors used in deter-
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mining whether and when to standardize data ex-
changes; and 
(2) specifies State implementation options and 
describes future milestones. 
SEC. 17. SET-ASIDE FOR ECONOMIC DOWNTURNS. 
Section 404(e) (42 U.S.C. 604(e)) is amended to read 
as follows: 
‘‘(e) DEADLINES FOR OBLIGATION AND EXPENDI-
TURES OF FUNDS BY STATES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a State to which a grant is made under 
section 403(a)(1) shall obligate the funds within 2 
years after the date the funds are made available, 
and shall expend the funds within 3 years after such 
date. 
‘‘(2) EXCEPTION
FOR
LIMITED
AMOUNT
OF 
FUNDS SET ASIDE FOR FUTURE USE.— 
‘‘(A) IN
GENERAL.—A State to which 
funds are paid under section 403(a)(1) may re-
serve not more than 15 percent of the funds for 
use in the State program funded under this 
part without fiscal year limitation. 
‘‘(B) NOTICE
OF
INTENT
TO
RESERVE 
FUNDS.—A State that intends to reserve funds 
paid to the State under section 402(a)(1) shall 
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notify the Secretary of the intention not later 
than the end of the period in which the funds 
are available for obligation without regard to 
subparagraph (A) of this paragraph.’’. 
SEC. 18. DEFINITIONS RELATED TO USE OF FUNDS. 
Section 419 (42 U.S.C. 619) is amended by adding 
at the end the following: 
‘‘(6) 
ASSISTANCE.—The 
term 
‘assistance’ 
means cash, payments, vouchers, and other forms of 
benefits designed to meet a family’s ongoing basic 
needs (such as for food, clothing, shelter, utilities, 
household goods, personal care items, and general 
incidental expenses). 
‘‘(7) WORK SUPPORTS.—The term ‘work sup-
ports’ means assistance and non-assistance transpor-
tation benefits (such as the value of allowances, bus 
tokens, car payments, auto repair, auto insurance 
reimbursement, and van services) provided in order 
to help families obtain, retain, or advance in employ-
ment, participate in work activities (as defined in 
section 407(d)), or as a non-recurrent, short-term 
benefit, including goods provided to individuals in 
order to help them obtain or maintain employment 
(such as tools, uniforms, fees to obtain special li-
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censes, bonuses, incentives, and work support allow-
ances and expenditures for job access). 
‘‘(8) SUPPORTIVE SERVICES.—The term ‘sup-
portive services’ means services such as domestic vio-
lence services, and mental health, substance abuse 
and disability services, housing counseling services, 
and other family supports, except to the extent that 
the provision of the service would violate section 
408(a)(6). 
‘‘(9) JOBS BENEFIT.—The term ‘JOBS ben-
efit’ means— 
‘‘(A) assistance; or 
‘‘(B) wage subsidies that are paid, with 
funds provided under section 403(a) or with 
qualified State expenditures, with respect to a 
person who— 
‘‘(i) was a work-eligible individual (as 
defined in the regulations promulgated 
pursuant to section 407(i)(1)(A)(i)) at the 
time of entry into subsidized employment, 
such as on-the-job training or apprentice-
ship; and 
‘‘(ii) is not receiving assistance.’’. 
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SEC. 19. ELIMINATION OF OBSOLETE PROVISIONS. 
(a) ELIMINATION OF SUPPLEMENTAL GRANTS TO 
STATES.—Section 403(a) (42 U.S.C. 603(a)) is amended 
by striking paragraph (3). 
(b) ELIMINATION OF BONUS TO REWARD HIGH PER-
FORMANCE STATES.— 
(1) IN GENERAL.—Section 403(a) (42 U.S.C. 
603(a)) is amended by striking paragraph (4). 
(2) 
CONFORMING
AMENDMENT.—Section 
1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
striking ‘‘403(a)(4),’’. 
(c) ELIMINATION OF WELFARE-TO-WORK GRANTS.— 
(1) IN GENERAL.—Section 403(a) (42 U.S.C. 
603(a)) is amended by striking paragraph (5). 
(2) CONFORMING AMENDMENTS.— 
(A) ELIMINATION
OF
EXCLUSION
FROM 
TIME
LIMIT.—Section 408(a)(7) (42 U.S.C. 
608(a)(7)) is amended by striking subpara-
graph (G). 
(B) ELIMINATION OF PENALTY FOR MIS-
USE
OF
COMPETITIVE
WELFARE-TO-WORK 
FUNDS.—Section 
409(a)(1) 
(42 
U.S.C. 
609(a)(1)) is amended by striking subpara-
graph (C). 
(C) ELIMINATION
OF
EXCLUSION
FROM 
QUALIFIED
STATE
EXPENDITURES
OF
STATE 
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FUNDS
USED
TO
MATCH
WELFARE-TO-WORK 
GRANT
FUNDS.—Section 409(a)(7)(B)(iv) (42 
U.S.C. 609(a)(7)(B)(iv)) is amended in the 1st 
sentence— 
(i) by adding ‘‘or’’ at the end of sub-
clause (II); and 
(ii) by striking subclause (III) and re-
designating subclause (IV) as subclause 
(III). 
(D) ELIMINATION OF PENALTY FOR FAIL-
URE OF STATE TO MAINTAIN HISTORIC EFFORT 
DURING
YEAR
IN
WHICH
WELFARE-TO-WORK 
GRANT
IS
RECEIVED.—Section 409(a) (42 
U.S.C. 609(a)) is amended by striking para-
graph (13). 
(E) ELIMINATION OF REQUIREMENTS RE-
LATING
TO
WELFARE-TO-WORK
GRANTS
IN 
QUARTERLY STATE REPORTS.—Section 411(a) 
(42 U.S.C. 611(a)), as amended by section 
15(a) of this Act, is amended— 
(i) in paragraph (1), by striking ‘‘(ex-
cept for information relating to activities 
carried out under section 403(a)(5))’’; and 
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(ii) in each of paragraphs (2) through 
(4), by striking the comma and all that fol-
lows and inserting a period. 
(F) INDIAN
TRIBAL
PROGRAMS.—Section 
412(a) (42 U.S.C. 612(a)) is amended by strik-
ing paragraph (3). 
(G) ELIMINATION
OF
REQUIREMENT
TO 
DISCLOSE CERTAIN INFORMATION TO PRIVATE 
INDUSTRY
COUNCIL
RECEIVING
WELFARE-TO- 
WORK
FUNDS.—Section 454A(f) (42 U.S.C. 
654a(f)) is amended by striking paragraph (5). 
(H) GRANTS
TO
TERRITORIES.—Section 
1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended 
by striking ‘‘403(a)(5),’’. 
(d) ELIMINATION OF CONTINGENCY FUND.— 
(1) IN GENERAL.—Section 403 (42 U.S.C. 603) 
is amended by striking all of subsection (b) except 
paragraph (5). 
(2) CONFORMING AMENDMENTS.— 
(A) TRANSFER OF NEEDY STATE DEFINI-
TION.— 
(i) IN
GENERAL.—Paragraph (5) of 
section 403(b) (42 U.S.C. 603(b)(5)) is— 
(I) amended— 
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(aa) in the matter preceding 
subparagraph (A), by striking 
‘‘paragraph (4)’’ and inserting 
‘‘subparagraph (C)’’; 
(bb) in each of subpara-
graphs (A) and (B), by redesig-
nating clauses (i) and (ii) as sub-
clauses (I) and (II), respectively; 
(cc) by redesignating sub-
paragraphs (A) and (B) as 
clauses (i) and (ii), respectively; 
(dd) by redesignating such 
paragraph as subparagraph (D); 
and 
(ee) by moving each provi-
sion 2 ems to the right; and 
(II) as so amended, hereby trans-
ferred into section 409(a)(3) (42 
U.S.C. 609(a)(3)) and added to the 
end of such section. 
(ii) CONFORMING AMENDMENT.—Sec-
tion 
409(a)(3)(C) 
(42 
U.S.C. 
609(a)(3)(C)) is amended by striking ‘‘(as 
defined in section 403(b)(5))’’. 
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(B) ELIMINATION OF PENALTY FOR FAIL-
URE
OF
STATE
RECEIVING
AMOUNTS
FROM 
CONTINGENCY
FUND
TO
MAINTAIN
100
PER-
CENT
OF
HISTORIC
EFFORT.—Section 409(a) 
(42 U.S.C. 609(a)) is amended by striking 
paragraph (10). 
(e) CONFORMING AMENDMENTS RELATED TO ELIMI-
NATION OF FEDERAL LOANS FOR STATE WELFARE PRO-
GRAMS.— 
(1) ELIMINATION
OF
ASSOCIATED
PENALTY 
PROVISION.— 
(A) IN
GENERAL.—Section 409(a) (42 
U.S.C. 609(a)) is amended by striking para-
graph (6). 
(B) CONFORMING AMENDMENTS.—Section 
412(g)(1) (42 U.S.C. 612(g)(1)) is amended by 
striking ‘‘(a)(6),’’. 
(2) ELIMINATION
OF
PROVISION
PROVIDING 
FOR TRIBAL ELIGIBILITY.—Section 412 (42 U.S.C. 
612) is amended by striking subsection (f). 
(3) ELIMINATION OF DISREGARD OF LOAN IN 
APPLYING
LIMIT
ON
PAYMENTS
TO
THE
TERRI-
TORIES.—Section 
1108(a)(2) 
(42 
U.S.C. 
1308(a)(2)) is amended by striking ‘‘406,’’. 
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(f) ELIMINATION OF LIMITATIONS ON OTHER STATE 
PROGRAMS FUNDED WITH QUALIFIED STATE EXPENDI-
TURES.— 
(1) The following provisions are each amended 
by striking ‘‘or any other State program funded with 
qualified State expenditures (as defined in section 
409(a)(7)(B)(i))’’: 
(A) Paragraphs (1) and (2) of section 
407(e) (42 U.S.C. 607(e)(1) and (2)). 
(B) 
Section 
411(a)(1) 
(42 
U.S.C. 
611(a)(1)), 
as 
amended 
by 
section 
15(a)(3)(A)(i) of this Act. 
(C) Subsections (d) and (e)(1) of section 
413 (42 U.S.C. 613(d) and (e)(1)). 
(2) Section 413(a) (42 U.S.C. 613(a)) is 
amended by striking ‘‘and any other State program 
funded with qualified State expenditures (as defined 
in section 409(a)(7)(B)(i))’’. 
(g) CONFORMING AMENDMENTS RELATED TO ELIMI-
NATION OF REPORT.— 
(1) 
IN
GENERAL.—Section 
409(a)(2) 
(42 
U.S.C. 609(a)(2)) is amended— 
(A) in the paragraph heading, by inserting 
‘‘QUARTERLY’’ before ‘‘REPORT’’; 
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