gaged in work for the month by reason of sub-
paragraph (C) of this paragraph’’ and inserting 
‘‘education and training (determined without 
regard to any individual described in subpara-
graph (C))’’. 
(B) CONFORMING AMENDMENTS.— 
(i) Section 407(c)(2)(C)(ii) (42 U.S.C. 
607(c)(2)(C)(ii) is amended by inserting ‘‘, 
including vocational education and train-
ing,’’ after ‘‘employment’’. 
(ii) Section 407(c)(2)(D) (42 U.S.C. 
607(c)(2)(D)) is amended in the heading, 
by striking ‘‘EDUCATIONAL’’ and inserting 
‘‘VOCATIONAL EDUCATION’’. 
(b) STATE OPTION TO TREAT LIMITED NUMBER OF 
PARTICIPANTS
IN POSTSECONDARY EDUCATIONAL AC-
TIVITIES AS ENGAGED IN WORK.— 
(1) 
IN
GENERAL.—Section 
407(c)(2) 
(42 
U.S.C. 607(c)(2)) is amended by adding at the end 
the following: 
‘‘(E) STATE OPTION TO TREAT LIMITED 
NUMBER OF PARTICIPANTS IN POSTSECONDARY 
EDUCATIONAL
ACTIVITIES
AS
ENGAGED
IN 
WORK.—
‘‘(i) IN
GENERAL.—For purposes of 
determining monthly participation rates 
under subsection (b)(1)(B)(i), a State may 
treat a recipient who has participated in 
postsecondary educational activities in con-
nection with a course of study, training, 
study time, employment, or work experi-
ence for an average of not less than 24 
hours (or, in the case of a recipient de-
scribed in subparagraph (B) of this para-
graph, 20 hours) per week in a month as 
engaged in work for the month, subject to 
clauses (ii) and (iii) of this subparagraph. 
‘‘(ii) LIMITATION.—The number of 
families that include a recipient treated as 
engaged in work for a month by reason of 
clause (i) may not exceed 10 percent of the 
average monthly number of families to 
which assistance is provided under the 
State program funded under this part dur-
ing the fiscal year. 
‘‘(iii) WORK
REQUIRED
AFTER
MONTHS.—A State may not treat a recipi-
ent as engaged in work for a month by 
reason of clause (i) after the first 24
months of such treatment, unless the re-
cipient works for an average of not less 
than 15 hours per week in the month. ’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 407(c)(2)(D) (42 U.S.C. 
607(c)(2)(D)), 
as 
amended 
by 
subsection 
(a)(2)(A) of this section, is amended— 
(i) in the heading, by inserting ‘‘cer-
tain’’ after ‘‘participation in’’; and 
(ii) by inserting ‘‘and without regard 
to individuals treated as engaged in work 
by reason of subparagraph (E)’’ before the 
last close parenthesis. 
(B) Section 407(d)(8), as amended by sub-
section (a)(1) of this section, is amended by in-
serting ‘‘, or such longer period as the State 
may allow for an individual who is treated as 
engaged in work by reason of subsection 
(c)(2)(E)’’ after ‘‘any individual’’. 
SEC. 302. REHABILITATIVE SERVICES. 
(a) ADDITIONAL WORK ACTIVITIES.—Section 407(d) 
(42 U.S.C. 607(d)) is amended— 
(1) in paragraph (11), by striking ‘‘and’’ at the 
end;
(2) in paragraph (12), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(13) rehabilitative services and employment-re-
lated services, such as adult basic education, partici-
pation in a program designed to increase proficiency 
in the English language, or, in the case of an indi-
vidual determined by a qualified medical, mental 
health, or social services professional as having a 
physical or mental disability, substance abuse prob-
lem, or other problem that requires rehabilitative 
services, substance abuse treatment, mental health 
treatment, or other rehabilitative services, if the ob-
taining of such services is a requirement of the indi-
vidual’s individual responsibility plan under section 
408(b) (not to exceed 6 months, or, if the obtaining 
of the services for a longer period is a requirement 
of the individual’s plan under section 408(b), not to 
exceed 18 months, but only if, during the last 12 of 
such 18 months, such services are combined with 
work or job-readiness activities), until an individual 
successfully completes obtaining the services.’’. 
(b) CONFORMING AMENDMENTS.—Section 407(c)(1) 
(42 U.S.C. 607(c)(1)) is amended by striking ‘‘or (12)’’ 
and inserting ‘‘(12), or (13)’’.
TITLE IV—REDUCING POVERTY 
SEC. 401. POVERTY REDUCTION. 
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. 402. EMPLOYMENT ENHANCEMENT. 
(a) IN GENERAL.—Section 402(a)(1)(A) (42 U.S.C. 
602(a)(1)(A)) is amended by adding at the end the fol-
lowing: 
‘‘(vii) Establish goals and take action 
to improve initial earnings, job advance-
ment, and employment retention for indi-
viduals in and individuals leaving the pro-
gram.’’. 
(b) INCLUSION IN ANNUAL REPORTS OF PROGRESS 
IN ACHIEVING EMPLOYMENT ADVANCEMENT GOALS.— 
Section 411(b) (42 U.S.C. 611(b)) 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) in each report submitted after fiscal year 
2005, the progress made by the State in achieving 
the goals referred to in section 402(a)(1)(A)(vii) in 
the most recent State plan submitted pursuant to 
section 402(a).’’. 
TITLE 
V—SUPPORTING 
FAMI-
LIES AND RESPONSIBLE PAR-
ENTING 
SEC. 501. FAMILY FORMATION FUND. 
Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amended 
to read as follows: 
‘‘(2) FAMILY FORMATION FUND.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
provide grants to States and localities for re-
search, technical assistance, and demonstration 
projects to promote and fund best practices in 
the following areas: 
‘‘(i) Promoting the formation of 2- 
parent families. 
‘‘(ii) Reducing teenage pregnancies.
‘‘(iii) Increasing the ability of non-
custodial parents to financially support 
and be involved with their children. 
‘‘(B) ALLOCATION OF FUNDS.—In making 
grants under this paragraph, the Secretary 
shall ensure that not less than 30 percent of 
the funds made available pursuant to this para-
graph for a fiscal year are used in each of the 
areas described in subparagraph (A). 
‘‘(C) CONSIDERATION OF DOMESTIC VIO-
LENCE IMPACT.—In making grants under this 
paragraph, the Secretary shall consider the po-
tential impact of a project on the incidence of 
domestic violence. 
‘‘(D) APPROPRIATION.—Out of any money 
in the Treasury of the United States not other-
wise appropriated, there are appropriated for 
each of fiscal years 2006 through 2010 
$100,000,000 for grants under this para-
graph.’’. 
SEC. 502. TWO-PARENT ELIGIBILITY. 
(a) BAN ON IMPOSITION OF STRICTER ELIGIBILITY 
CRITERIA FOR 2-PARENT FAMILIES.—
(1) PROHIBITION.—Section 408(a) (42 U.S.C. 
608(a)) is amended by adding at the end the fol-
lowing: 
‘‘(12) BAN ON IMPOSITION OF STRICTER ELIGI-
BILITY CRITERIA FOR 2-PARENT FAMILIES.—In de-
termining the eligibility of a 2-parent family for any 
benefit or service funded under this part or funded 
with non-Federal funds that are qualified expendi-
tures of the State under section 409(a)(7), the State 
shall not impose a requirement that does not apply 
in determining the eligibility of a 1-parent family for 
the benefit or service.’’. 
(2) PENALTY.—Section 409(a) (42 U.S.C. 
609(a)), as amended by section 707(b)(1) of this 
Act, is amended by inserting after paragraph (5) the 
following: 
‘‘(6) PENALTY FOR IMPOSITION OF STRICTER 
ELIGIBILITY CRITERIA FOR 2-PARENT FAMILIES.— 
‘‘(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
that does not exceed 5 percent of the State 
family assistance 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.’’. 
(3) ASSURANCE OF EQUAL TREATMENT.—Sec-
tion 402(a) (42 U.S.C. 602(a)), as amended by sec-
tion 108(b) of this Act, is amended by adding at the 
end the following: 
‘‘(9) CERTIFICATION OF EQUAL TREATMENT OF 
2-PARENT FAMILIES.—The chief executive officer of 
the State shall submit to the Secretary a certifi-
cation that in conducting the State program funded 
under this part, the State does not have rules or 
procedures that discriminate against 2-parent fami-
lies.’’. 
(b) ELIMINATION OF SEPARATE WORK PARTICIPA-
TION RATE FOR 2-PARENT FAMILIES.—Section 407 (42 
U.S.C. 607) is amended— 
(1) in subsection (a), by striking paragraph (2); 
and 
(2) in subsection (b)— 
(A) by striking paragraph (2);
(B) in paragraph (4), by striking ‘‘para-
graphs (1)(B) and (2)(B)’’ and inserting ‘‘para-
graph (1)(B)’’; 
(C) in paragraph (5), by striking ‘‘rates’’ 
and inserting ‘‘rate’’; and 
(D) by redesignating paragraphs (3), (4), 
and (5) as paragraphs (2), (3), and (4), respec-
tively. 
SEC. 503. CHILD SUPPORT. 
(a) MODIFICATION OF RULE REQUIRING ASSIGN-
MENT OF SUPPORT RIGHTS AS A CONDITION OF RECEIV-
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 paying 
assistance to a family under the State program 
funded under this part, that a member of the family 
assign to the State any right 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 so paid to the family, which ac-
crues during the period that the family receives as-
sistance 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 (e) and 
(f), the amounts collected on behalf of a family as support 
by a State pursuant to a plan approved under this part 
shall be distributed as follows: 
‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the 
case of a family receiving assistance from the State, 
the State shall— 
‘‘(A) pay to the Federal Government the 
Federal share of the amount collected, subject 
to paragraph (3)(A); 
‘‘(B) retain, or pay to the family, the State 
share of the amount collected, subject to para-
graph (3)(B); and 
‘‘(C) pay to the family any remaining 
amount.
‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS-
SISTANCE.—In the case of a family that formerly re-
ceived assistance from the State: 
‘‘(A) CURRENT SUPPORT.—To the extent 
that the amount collected does not exceed the 
current support amount, the State shall pay the 
amount to the family. 
‘‘(B) ARREARAGES.—Except as otherwise 
provided in an election made under section 
454(34), to the extent that the amount col-
lected exceeds the current support amount, the 
State— 
‘‘(i) shall first pay to the family the 
excess amount, to the extent necessary to 
satisfy support arrearages not assigned 
pursuant to section 408(a)(3); 
‘‘(ii) if the amount collected exceeds 
the amount required to be paid to the fam-
ily under clause (i), shall— 
‘‘(I) pay to the Federal Govern-
ment, the Federal share of the excess 
amount described in this clause, sub-
ject to paragraph (3)(A); and 
‘‘(II) retain, or pay to the family, 
the State share of the excess amount
described in this clause, subject to 
paragraph (3)(B); and 
‘‘(iii) shall pay to the family any re-
maining amount. 
‘‘(3) LIMITATIONS.— 
‘‘(A) FEDERAL
REIMBURSEMENTS.—The 
total of the amounts paid by the State to the 
Federal Government under paragraphs (1) and 
(2) of this subsection with respect to a family 
shall not exceed the Federal share of the 
amount assigned with respect to the family pur-
suant to section 408(a)(3). 
‘‘(B) 
STATE
REIMBURSEMENTS.—The 
total of the amounts retained by the State 
under paragraphs (1) and (2) of this subsection 
with respect to a family shall not exceed the 
State share of the amount assigned with respect 
to the family pursuant to section 408(a)(3). 
‘‘(4) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State 
shall pay the amount collected to the family. 
‘‘(5) 
FAMILIES
UNDER
CERTAIN
AGREE-
MENTS.—Notwithstanding paragraphs (1) through 
(3), in the case of an amount collected for a family 
in accordance with a cooperative agreement under
section 454(33), the State shall distribute the 
amount collected pursuant to the terms of the agree-
ment. 
‘‘(6) STATE FINANCING OPTIONS.—To the ex-
tent that the State’s share of the amount payable to 
a family pursuant to paragraph (2)(B) of this sub-
section exceeds the amount that the State estimates 
(under procedures approved by the Secretary) would 
have been payable to the family pursuant to former 
section 457(a)(2)(B) (as in effect for the State im-
mediately before the date this subsection first ap-
plies to the State) if such former section had re-
mained in effect, the State may elect to use the 
grant made to the State under section 403(a) to pay 
the amount, or to have the payment considered a 
qualified State expenditure for purposes of section 
409(a)(7)(B)(i), but not both. 
‘‘(7) STATE OPTION TO PASS THROUGH ADDI-
TIONAL SUPPORT WITH FEDERAL COST-SHARING.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2), a State shall not be required to pay 
to the Federal Government the Federal share of 
an amount collected on behalf of a family that 
formerly received assistance under the State
program funded under part A, to the extent 
that the State pays the amount to the family. 
‘‘(B) RECIPIENTS
OF
TANF
FOR
LESS 
THAN 5 YEARS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (1), a State shall not be re-
quired to pay to the Federal Government 
the Federal share of an amount collected 
on behalf of a family that is a recipient of 
assistance under the State program funded 
under part A and, if the family includes an 
adult, that has received the assistance for 
not more than 5 years after the date of en-
actment of this paragraph, to the extent 
that— 
‘‘(I) the State pays the amount 
to the family; and 
‘‘(II) subject to clause (ii), the 
amount is disregarded in determining 
the amount and type of the assistance 
provided to the family. 
‘‘(ii) LIMITATION.—Of the amount 
disregarded as described in clause (i)(II), 
the maximum amount that may be taken 
into account for purposes of clause (i) shall
not exceed $400 per month, except that, in 
the case of a family that includes 2 or 
more children, the State may elect to in-
crease the maximum amount to not more 
than $600 per month. 
‘‘(8) STATES
WITH
DEMONSTRATION
WAIV-
ERS.—Notwithstanding the preceding paragraphs, a 
State with a waiver under section 1115, effective on 
or before October 1, 1997, the terms of which allow 
pass-through of child support payments, may pass 
through payments in accordance with such terms 
with respect to families subject to the waiver.’’. 
(B) STATE PLAN TO INCLUDE ELECTION 
AS TO WHICH RULES TO APPLY IN DISTRIB-
UTING
CHILD
SUPPORT
ARREARAGES
COL-
LECTED ON BEHALF OF FAMILIES FORMERLY 
RECEIVING
ASSISTANCE.—Section 
454 
(42 
U.S.C. 654) is amended— 
(i) by striking ‘‘and’’ at the end of 
paragraph (32); 
(ii) by striking the period at the end 
of paragraph (33) and inserting ‘‘; and’’; 
and 
(iii) by inserting after paragraph (33) 
the following:
‘‘(34) include an election by the State to apply 
section 457(a)(2)(B) of this Act or former section 
457(a)(2)(B) of this Act (as in effect for the State 
immediately before the date this paragraph first ap-
plies to the State) to the distribution of the amounts 
which are the subject of such sections, and for so 
long as the State elects to so apply such former sec-
tion, the amendments made by subsection (e) of sec-
tion 503 of the Work, Family, and Opportunity Pro-
motion Act shall not apply with respect to the State, 
notwithstanding subsection (f)(1) of such section 
503.’’. 
(C) APPROVAL
OF
ESTIMATION
PROCE-
DURES.—Not later than October 1, 2006, the 
Secretary of Health and Human Services, in 
consultation with the States (as defined for 
purposes of part D of title IV of the Social Se-
curity Act), shall establish the procedures to be 
used to make the estimate described in section 
457(a)(6) of such Act. 
(2) CURRENT
SUPPORT
AMOUNT
DEFINED.— 
Section 457(c) (42 U.S.C. 657(c)) is amended by 
adding at the end the following: 
‘‘(5) CURRENT SUPPORT AMOUNT.—The term 
‘current support amount’ means, with respect to