180
‘‘(ii) REQUIRED HOURS PER WEEK.—
For purposes of clause (i), subject to clause 
(iii), the number of hours per week are—
‘‘(I) 6 hours per week during the 
first 12-month period that an eligible 
participant participates in a program 
established under this subsection; 
‘‘(II) 8 hours per week during the 
second 12-month period of such par-
ticipation; 
‘‘(II) 10 hours per week during 
the third 12-month period of such par-
ticipation; and 
‘‘(II) 12 hours per week during 
the fourth or any other succeeding 12- 
month period of such participation. 
‘‘(iii) MODIFICATION
OF
REQUIRE-
MENTS
FOR
GOOD
CAUSE.—A State may 
modify the number of hours per week re-
quired under clause (ii) for good cause. For 
purposes of the preceding sentence, good 
cause includes the case of an eligible partic-
ipant with 1 or more significant barriers to 
normal participation, as determined by the
181
State, such as the need to care for a family 
member with special needs.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
407(d)(8) (42 U.S.C. 607(d)(8)) is amended by insert-
ing ‘‘other than an individual participating in a pro-
gram established under section 404(l)’’ after ‘‘indi-
vidual’’. 
SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE 
PROGRAMS. 
(a) REPEAL.—Section 406 (42 U.S.C. 606) is repealed. 
(b) CONFORMING AMENDMENTS.—
(1) Section 409 (42 U.S.C. 609), as amended by 
section 106(d)(2), is amended—
(A) in subsection (a), by striking paragraph 
(6); 
(B) in subsection (b)(2), by striking ‘‘(6),’’; 
and 
(C) in subsection (c)(4), by striking ‘‘(6),’’. 
(2) Section 412 (42 U.S.C. 612) is amended by 
striking subsection (f) and redesignating subsections 
(g) through (i) as subsections (f) through (h), respec-
tively. 
(3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is 
amended by striking ‘‘406,’’.
182
SEC. 109. WORK PARTICIPATION REQUIREMENTS. 
(a) ELIMINATION OF SEPARATE WORK PARTICIPATION 
RATE FOR 2-PARENT FAMILIES BEGINNING WITH FISCAL 
YEAR 2003.—
(1) IN GENERAL.—Section 407 (42 U.S.C. 607) 
is amended—
(A) in subsection (a)—
(i) in the heading, by striking ‘‘PAR-
TICIPATION RATE REQUIREMENTS’’ and all 
that follows through ‘‘A State’’ and insert-
ing 
‘‘PARTICIPATION
RATE
REQUIRE-
MENTS.—A State’’; and 
(ii) by striking paragraph (2); 
(B) in subsection (b)—
(i) by striking paragraph (2); 
(ii) in paragraph (4), by striking 
‘‘paragraphs (1)(B) and (2)(B)’’ and insert-
ing ‘‘determining monthly participation 
rates under paragraph (1)(B)’’; and 
(iii) in paragraph (5), by striking 
‘‘rates’’ and inserting ‘‘rate’’; and 
(C) in subsection (c)—
(i) in paragraph (1)—
(I) 
by 
striking 
‘‘GENERAL 
RULES.—’’ and all that follows through 
‘‘For purposes’’ in subparagraph (A)
183
and inserting ‘‘GENERAL RULE.—For 
purposes’’; and 
(II) by striking subparagraph 
(B); and 
(ii) in paragraph (2)(D)—
(I) 
by 
striking 
‘‘paragraphs 
(1)(B)(i) and (2)(B) of subsection (b)’’ 
and 
inserting 
‘‘subsection 
(b)(1)(B)(i)’’; and 
(II) by striking ‘‘and in 2-parent 
families, respectively,’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect as if enacted on Oc-
tober 1, 2002. 
(b) MINIMUM PARTICIPATION RATES.—Section 407(a) 
(42 U.S.C. 607(a)), as amended by subsection (a)(1)(A), is 
amended to read as follows: 
‘‘(a) PARTICIPATION RATE REQUIREMENTS.—
‘‘(1) IN GENERAL.—A State to which a grant is 
made under section 403 for a fiscal year shall achieve 
a minimum participation rate with respect to all 
families receiving assistance under the State program 
funded under this part that is equal to not less 
than—
‘‘(A) 50 percent for fiscal year 2004;
184
‘‘(B) 55 percent for fiscal year 2005; 
‘‘(C) 60 percent for fiscal year 2006; 
‘‘(D) 65 percent for fiscal year 2007; and 
‘‘(E) 70 percent for fiscal year 2008 and 
each succeeding fiscal year.’’. 
(c) LIMITATION
ON REDUCTION
OF PARTICIPATION 
RATE
THROUGH
APPLICATION
OF
CREDITS.—Section 
407(a) (42 U.S.C. 607(b)), as amended by subsection (b), 
is amended by adding at the end the following: 
‘‘(2) LIMITATION ON REDUCTION OF PARTICIPA-
TION
RATE
THROUGH
APPLICATION
OF
CREDITS.—
Notwithstanding any other provision of this part, the 
net effect of any percentage reduction in the min-
imum participation rate otherwise required under 
this section with respect to families receiving assist-
ance under the State program funded under this part 
as a result of the application of any employment 
credit, caseload reduction credit, or other credit 
against such rate for a fiscal year, shall not exceed—
‘‘(A) 40 percentage points, in the case of fis-
cal year 2004; 
‘‘(B) 35 percentage points, in the case of fis-
cal year 2005; 
‘‘(C) 30 percentage points, in the case of fis-
cal year 2006;
185
‘‘(D) 25 percentage points, in the case of fis-
cal year 2007; or 
‘‘(E) 20 percentage points, in the case of fis-
cal year 2008 or any fiscal year thereafter.’’. 
(d) REPLACEMENT OF CASELOAD REDUCTION CREDIT 
WITH EMPLOYMENT CREDIT.— 
(1) EMPLOYMENT CREDIT TO REWARD STATES IN 
WHICH FAMILIES LEAVE WELFARE FOR WORK; ADDI-
TIONAL CREDIT FOR FAMILIES WITH HIGHER EARN-
INGS.—
(A) IN
GENERAL.—Section 407(b) (42 
U.S.C. 607(b)), as amended by subsection 
(a)(1)(B)(i), is amended by inserting after para-
graph (1) the following: 
‘‘(2) EMPLOYMENT CREDIT.—
‘‘(A) IN
GENERAL.—Subject to subsection 
(a)(2), the Secretary shall, by regulation, reduce 
the minimum participation rate otherwise appli-
cable to a State under this subsection for a fiscal 
year by the number of percentage points in the 
employment credit for the State for the fiscal 
year, as determined by the Secretary—
‘‘(i) using information in the National 
Directory of New Hires;
186
‘‘(ii) with respect to a recipient of as-
sistance or former recipient of assistance 
under the State program funded under this 
part who is placed with an employer whose 
hiring information is not reported to the 
National Directory of New Hires, using 
quarterly wage information submitted by 
the State to the Secretary not later than 
such date as the Secretary shall prescribe in 
regulations; or 
‘‘(iii) with respect to families described 
in subclause (II) or (III) of subparagraph 
(B)(ii), using such other data as the Sec-
retary may require in order to determine 
the employment credit for a State under 
this paragraph. 
‘‘(B) CALCULATION OF CREDIT.—
‘‘(i) IN
GENERAL.—The employment 
credit for a State for a fiscal year is an 
amount equal to the sum of the amounts de-
termined under clause (ii), divided by the 
amount determined under clause (iii). 
‘‘(ii) NUMERATOR.—For purposes of 
clause (i), the amounts determined under 
this clause are the following:
187
‘‘(I) Twice the quarterly average 
unduplicated number of families that 
include an adult or minor child head 
of household recipient of assistance 
under the State program funded under 
this part, that ceased to receive such 
assistance for at least 2 consecutive 
months following the date of the case 
closure for the family during the appli-
cable period (as defined in clause (v)), 
that did not receive assistance under a 
separate State-funded program during 
such 2-month period, and that were 
employed during the calendar quarter 
immediately succeeding the quarter in 
which the assistance under the State 
program 
funded 
under 
this 
part 
ceased. 
‘‘(II) At the option of the State, 
twice the quarterly average number of 
families that received a nonrecurring 
short-term benefit under the State pro-
gram funded under this part during 
the applicable period (as so defined), 
that were employed during the cal-
188
endar quarter immediately succeeding 
the quarter in which the nonrecurring 
short-term benefit was so received, and 
that earned at least $1,000 during the 
applicable period (as so defined). 
‘‘(III) At the option of the State, 
twice the quarterly average number of 
families that includes an adult who is 
receiving substantial child care or 
transportation assistance (as defined 
by the Secretary, in consultation with 
directors of State programs funded 
under this part, which definition shall 
specify for each type of assistance a 
threshold which is a dollar value or a 
length of time over which the assistance 
is received, and which takes account of 
large one-time transition payments)) 
during the applicable period (as so de-
fined). 
‘‘(iii) DENOMINATOR.—For purposes of 
clause (i), the amount determined under 
this clause is the amount equal to the sum 
of the following:
189
‘‘(I) The average monthly number 
of families that include an adult or 
minor child head of household who re-
ceived assistance under the State pro-
gram funded under this part during 
the applicable period (as defined under 
clause (v)). 
‘‘(II) If the State elected the op-
tion under clause (ii)(II), twice the 
quarterly average number of families 
that received a nonrecurring short-term 
benefit under the State program funded 
under this part during the applicable 
period (as so defined). 
‘‘(III) If the State elected the op-
tion under clause (ii)(III), twice the 
quarterly average number of families 
that includes an adult who is receiving 
substantial child care or transpor-
tation assistance during the applicable 
period (as so defined). 
‘‘(iv) SPECIAL RULE FOR FORMER RE-
CIPIENTS WITH HIGHER EARNINGS.—In cal-
culating the employment credit for a State 
for a fiscal year, in the case of a family
190
that includes an adult or a minor child 
head of household that is to be included in 
the amount determined under clause (ii)(I) 
and that, with respect to the quarter in 
which the family’s earnings was examined 
during the applicable period, earned at 
least 33 percent of the average quarterly 
earnings in the State (determined on the 
basis of State unemployment data), the 
family shall be considered to be 1.5 families. 
‘‘(v) DEFINITION OF APPLICABLE PE-
RIOD.—For purposes of this paragraph, the 
term ‘applicable period’ means, with respect 
to a fiscal year, the most recent 4 quarters 
for which data are available to the Sec-
retary providing information on the work 
status of—
‘‘(I) individuals in the quarter 
after the individuals ceased receiving 
assistance under the State program 
funded under this part; 
‘‘(II) at State option, individuals 
in the quarter after the individuals re-
ceived a short-term, nonrecurring ben-
efit; and
191
‘‘(III) at State option, individuals 
in the quarter after the individuals 
ceased receiving substantial child care 
or transportation assistance. 
‘‘(C) NOTIFICATION TO STATE.—Not later 
than August 30 of each fiscal year, the Secretary 
shall—
‘‘(i) determine, on the basis of the ap-
plicable period, the amount of the employ-
ment credit that will be used in deter-
mining the minimum participation rate for 
a State under subsection (a) for the imme-
diately succeeding fiscal year; and 
‘‘(ii) notify each State conducting a 
State program funded under this part of the 
amount of the employment credit for such 
program for the succeeding fiscal year.’’. 
(B) AUTHORITY OF SECRETARY TO USE IN-
FORMATION
IN
NATIONAL
DIRECTORY
OF
NEW 
HIRES.—Section 453(i) (42 U.S.C. 653(i)) is 
amended by adding at the end the following:
‘‘(5) CALCULATION OF EMPLOYMENT CREDIT FOR 
PURPOSES OF DETERMINING STATE WORK PARTICIPA-
TION RATES UNDER TANF.—The Secretary may use 
the information in the National Directory of New
192
Hires for purposes of calculating State employment 
credits pursuant to section 407(b)(2).’’. 
(2) ELIMINATION
OF
CASELOAD
REDUCTION 
CREDIT.—Section 407(b) (42 U.S.C. 607(b)) is 
amended by striking paragraph (3) and redesignating 
paragraphs (4) and (5) as paragraphs (3) and (4), 
respectively. 
(3) EFFECTIVE DATES.—
(A) IN GENERAL.—Except as provided in 
subparagraphs (B) and (C), the amendments 
made by this subsection shall take effect on Octo-
ber 1, 2005. 
(B) STATE OPTION TO PHASE-IN REPLACE-
MENT OF CASELOAD REDUCTION CREDIT WITH 
EMPLOYMENT CREDIT AND DELAY APPLICABILITY 
OF OTHER PROVISIONS.—A State may elect to 
have the amendments made by this subsection 
not apply to the State program funded under 
part A of title IV of the Social Security Act until 
October 1, 2006, and if the State makes the elec-
tion, then, in determining the participation rate 
of the State for purposes of section 407 of the So-
cial Security Act for fiscal year 2006, the State 
shall be credited with 1⁄2 of the reduction in the 
rate that would otherwise result from applying
193
section 407(b)(2) of the Social Security Act (as 
added by paragraph (1)(A)) to the State for fis-
cal year 2006 and 1⁄2 of the reduction in the rate 
that would otherwise result from applying sec-
tion 407(b)(3) of the Social Security Act (as in 
effect with respect to fiscal year 2003) to the 
State for fiscal year 2006. 
(C) AUTHORITY TO USE INFORMATION IN 
THE NATIONAL DIRECTORY OF NEW HIRES.—The 
amendment made by paragraph (1)(B) shall take 
effect on October 1, 2003. 
(e) STATE OPTIONS FOR PARTICIPATION REQUIRE-
MENT
EXEMPTIONS.—Section 
407(b)(4) 
(42 
U.S.C. 
607(b)(4)), as amended by subsection (a)(1)(B)(iii) and re-
designated by subsection (d)(2), is amended to read as fol-
lows: 
‘‘(4) STATE
OPTIONS
FOR
PARTICIPATION
RE-
QUIREMENT EXEMPTIONS.—At the option of a State, 
a State may, on a case-by-case basis—
‘‘(A) not include a family in the determina-
tion of the monthly participation rate for the 
State in the first month for which the family re-
ceives assistance from the State program funded 
under this part on the basis of the most recent 
application for such assistance; or
194
‘‘(B) not require a family in which the 
youngest child has not attained 12 months of age 
to engage in work, and may disregard that fam-
ily in determining the minimum participation 
rate under subsection (a) for the State for not 
more than 12 months.’’. 
(f) DETERMINATION OF COUNTABLE HOURS ENGAGED 
IN WORK.—
(1) IN
GENERAL.—Section 407(c) (42 U.S.C. 
607(c)) is amended to read as follows: 
‘‘(c) DETERMINATION
OF COUNTABLE HOURS EN-
GAGED IN WORK.—
‘‘(1) SINGLE
PARENT
OR
RELATIVE
WITH
A 
CHILD OVER AGE 6.—
‘‘(A) 
MINIMUM
AVERAGE
NUMBER
OF 
HOURS PER WEEK.—Subject to the succeeding 
paragraphs of this subsection, a family in which 
an adult recipient or minor child head of house-
hold in the family is participating in work ac-
tivities described in subsection (d) shall be treat-
ed as engaged in work for purposes of deter-
mining monthly participation rates under sub-
section (b)(1)(B)(i) as follows: 
‘‘(i) In the case of a family in which 
the total number of hours in which any
195
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 20, but less than 24, hours per week in 
a month, as 0.675 of a family. 
‘‘(ii) In the case of a family in which 
the total number of hours in which any 
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 24, but less than 30, hours per week in 
a month, as 0.75 of a family. 
‘‘(iii) In the case of a family in which 
the total number of hours in which any 
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 30, but less than 34, hours per week in 
a month, as 0.875 of a family. 
‘‘(iv) In the case of a family in which 
the total number of hours in which any 
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at
196
least 34, but less than 35, hours per week in 
a month, as 1 family. 
‘‘(v) In the case of a family in which 
the total number of hours in which any 
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 35, but less than 38, hours per week in 
a month, as 1.05 families. 
‘‘(vi) In the case of a family in which 
the total number of hours in which any 
adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 38 hours per week in a month, as 1.08 
families. 
‘‘(B) DIRECT WORK ACTIVITIES REQUIRED 
FOR AN AVERAGE OF 24 HOURS PER WEEK.—Ex-
cept as provided in subparagraph (C)(i), a State 
may not count any hours of participation in 
work activities specified in paragraph (9), (10), 
or (11) of subsection (d) of any adult recipient 
or minor child head of household in a family be-
fore the total number of hours of participation 
by any adult recipient or minor child head of
197
household in the family in work activities de-
scribed in paragraph (1), (2), (3), (4), (5), (6), 
(7), (8), or (12) of subsection (d) for the family 
for the month averages at least 24 hours per 
week. 
‘‘(C) STATE FLEXIBILITY TO COUNT PAR-
TICIPATION IN CERTAIN ACTIVITIES.—
‘‘(i) QUALIFIED
ACTIVITIES
FOR
3-
MONTHS IN ANY 24-MONTH PERIOD.—
‘‘(I) 24-HOURS
PER
WEEK
RE-
QUIRED.—Subject to subclauses (III) 
and (IV), for purposes of determining 
hours under subparagraph (A), a State 
may count the total number of hours 
any adult recipient or minor child 
head of household in a family engages 
in qualified activities described in sub-
clause (II) as a work activity described 
in subsection (d), without regard to 
whether the recipient has satisfied the 
requirement of subparagraph (B), but 
only if—
‘‘(aa) the total number of 
hours of participation in such 
qualified activities for the family
198
for the month average at least 24 
hours per week; and 
‘‘(bb) engaging in such quali-
fied activities is a requirement of 
the family self-sufficiency plan. 
‘‘(II) QUALIFIED ACTIVITIES DE-
SCRIBED.—For purposes of subclause 
(I), qualified activities described in 
this subclause are any of the following: 
‘‘(aa) 
Postsecondary 
edu-
cation. 
‘‘(bb) Adult literacy pro-
grams or activities. 
‘‘(cc) Substance abuse coun-
seling or treatment. 
‘‘(dd) Programs or activities 
designed to remove barriers to 
work, as defined by the State. 
‘‘(ee) Work activities author-
ized under any waiver for any 
State that was continued under 
section 415 before the date of en-
actment of the Personal Responsi-
bility and Individual Develop-
ment for Everyone Act.
199
‘‘(III) LIMITATION.—Except as 
provided in clause (ii), subclause (I) 
shall not apply to a family for more 
than 3 months in any period of 24 
consecutive months. 
‘‘(IV) CERTAIN ACTIVITIES.—The 
Secretary may allow a State to count 
the total hours of participation in 
qualified activities described in sub-
clause (II) for an adult recipient or 
minor child head of household without 
regard to the minimum 24 hour aver-
age per week of participation require-
ment under subclause (I) if the State 
has demonstrated conclusively that 
such activity is part of a substantial 
and supervised program whose effec-
tiveness in moving families to self-suf-
ficiency is superior to any alternative 
activity and the effectiveness of the 
program in moving families to self-suf-
ficiency would be substantially im-
paired if participating individuals 
participated in additional, concurrent 
qualified activities that enabled the in-
200
dividuals to achieve an average of at 
least 24 hours per week of participa-
tion. 
‘‘(ii) ADDITIONAL
3-MONTH
PERIOD 
PERMITTED FOR CERTAIN ACTIVITIES.—
‘‘(I) SELF-SUFFICIENCY PLAN RE-
QUIREMENT COMBINED WITH MINIMUM 
NUMBER OF HOURS.—A State may ex-
tend the 3-month period under clause 
(i) for an additional 3 months in the 
same period of 24 consecutive months 
in the case of an adult recipient or 
minor child head of household who is 
receiving qualified rehabilitative serv-
ices described in subclause (II) if—
‘‘(aa) the total number of 
hours that the adult recipient or 
minor child head of household en-
gages in such qualified rehabilita-
tive services and, subject to sub-
clause (III), a work activity de-
scribed in paragraph (1), (2), (3), 
(4), (5), (6), (7), (8), or (12) of 
subsection (d) for the month aver-
201
age at least 24 hours per week; 
and 
‘‘(bb) engaging in such quali-
fied rehabilitative services is a re-
quirement of the family self-suffi-
ciency plan. 
‘‘(II) QUALIFIED REHABILITATIVE 
SERVICES
DESCRIBED.—For purposes 
of subclause (I), qualified rehabilitative 
services described in this subclause are 
any of the following: 
‘‘(aa) Adult literacy pro-
grams or activities. 
‘‘(bb) Participation in a pro-
gram designed to increase pro-
ficiency in the English language. 
‘‘(cc) In the case of an adult 
recipient or minor child head of 
household who has been certified 
by a qualified medical, mental 
health, or social services profes-
sional (as defined by the State) as 
having a physical or mental dis-
ability, substance abuse problem, 
or other problem that requires a
202
rehabilitative service, substance 
abuse treatment, or mental health 
treatment, the service or treatment 
determined necessary by the pro-
fessional. 
‘‘(III) NONAPPLICATION OF LIMI-
TATIONS ON JOB SEARCH AND VOCA-
TIONAL
EDUCATIONAL
TRAINING.—An 
adult recipient or minor child head of 
household who is receiving qualified re-
habilitative services described in sub-
clause (II) may engage in a work ac-
tivity described in paragraph (6) or 
(8) of subsection (d) for purposes of 
satisfying the minimum 24 hour aver-
age per week of participation require-
ment under subclause (I)(aa) without 
regard to any limit that otherwise ap-
plies to the activity (including the 30 
percent limitation on participation in 
vocational educational training under 
paragraph (6)(C)). 
‘‘(iii) HOURS IN EXCESS OF AN AVER-
AGE
OF
WORK
ACTIVITY
HOURS
PER 
WEEK.—If the total number of hours that
203
any adult recipient or minor child head of 
household in a family has participated in a 
work activity described in paragraph (1), 
(2), (3), (4), (5), (6), (7), (8), or (12) of 
subsection (d) averages at least 24 hours per 
week in a month, a State, for purposes of 
determining hours under subparagraph (A), 
may count any hours an adult recipient or 
minor child head of household in the family 
engages in—
‘‘(I) any work activity described 
in subsection (d), without regard to 
any limit that otherwise applies to the 
activity (including the 30 percent limi-
tation on participation in vocational 
educational training under paragraph 
(6)(C)); and 
‘‘(II) any qualified activity de-
scribed in clause (i)(II), as a work ac-
tivity described in subsection (d). 
‘‘(2) SINGLE
PARENT
OR
RELATIVE
WITH
A 
CHILD UNDER AGE 6.—
‘‘(A) IN GENERAL.—A family in which an 
adult recipient or minor child head of household 
in the family is the only parent or caretaker rel-
204
ative in the family of a child who has not at-
tained 6 years of age and who is participating 
in work activities described in subsection (d) 
shall be treated as engaged in work for purposes 
of determining monthly participation rates 
under subsection (b)(1)(B)(i) as follows: 
‘‘(i) In the case of such a family in 
which the total number of hours in which 
the adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 20, but less than 24, hours per week in 
a month, as 0.675 of a family. 
‘‘(ii) In the case of such a family in 
which the total number of hours in which 
the adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 24, but less than 35, hours per week in 
a month, as 1 family. 
‘‘(iii) In the case of such a family in 
which the total number of hours in which 
the adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at
205
least 35, but less than 38, hours per week in 
a month, as 1.05 families. 
‘‘(iv) In the case of such a family in 
which the total number of hours in which 
the adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 38 hours per week in a month, as 1.08 
families. 
‘‘(B) APPLICATION
OF
RULES
REGARDING 
DIRECT
WORK
ACTIVITIES
AND
STATE
FLEXI-
BILITY TO COUNT PARTICIPATION IN CERTAIN AC-
TIVITIES.—Subparagraphs (B) and (C) of para-
graph (1) apply to a family described in sub-
paragraph (A) in the same manner as such sub-
paragraphs apply to a family described in para-
graph (1)(A). 
‘‘(3) 2-PARENT FAMILIES.—
‘‘(A) IN GENERAL.—Subject to paragraph 
(6)(A), a 2-parent family in which an adult re-
cipient or minor child head of household in the 
family is participating in work activities de-
scribed in subsection (d) shall be treated as en-
gaged in work for purposes of determining
206
monthly participation rates under subsection 
(b)(1)(B)(i) as follows: 
‘‘(i) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 26, but less than 30, hours per week in 
a month, as 0.675 of a family. 
‘‘(ii) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 30, but less than 35, hours per week in 
a month, as 0.75 of a family. 
‘‘(iii) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 35, but less than 39, hours per week in 
a month, as 0.875 of a family. 
‘‘(iv) In the case of such a family in 
which the total number of hours in which
207
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 39, but less than 40, hours per week in 
a month, as 1 family. 
‘‘(v) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 40, but less than 43, hours per week in 
a month, as 1.05 families. 
‘‘(vi) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 43 hours per week in a month, as 1.08 
families. 
‘‘(B) APPLICATION
OF
RULES
REGARDING 
DIRECT
WORK
ACTIVITIES
AND
STATE
FLEXI-
BILITY TO COUNT PARTICIPATION IN CERTAIN AC-
TIVITIES.—Subparagraphs (B) and (C) of para-
graph (1) apply to a 2-parent family described 
in subparagraph (A) in the same manner as
208
such subparagraphs apply to a family described 
in paragraph (1)(A), except that subparagraph 
(B) of paragraph (1) shall be applied to a such 
a 2-parent family by substituting ‘34’ for ‘24’ 
each place it appears. 
‘‘(4) 2-PARENT FAMILIES THAT RECEIVE FEDER-
ALLY FUNDED CHILD CARE.—
‘‘(A) IN GENERAL.—Subject to paragraph 
(6)(A), if a 2-parent family receives federally 
funded child care assistance, an adult recipient 
or minor child head of household in the family 
participating in work activities described in sub-
section (d) shall be treated as engaged in work 
for purposes of determining monthly participa-
tion rates under subsection (b)(1)(B)(i) as fol-
lows: 
‘‘(i) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 40, but less than 45, hours per week in 
a month, as 0.675 of a family. 
‘‘(ii) In the case of such a family in 
which the total number of hours in which
209
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 45, but less than 51, hours per week in 
a month, as 0.75 of a family. 
‘‘(iii) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 51, but less than 55, hours per week in 
a month, as 0.875 of a family. 
‘‘(iv) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 55, but less than 56, hours per week in 
a month, as 1 family. 
‘‘(v) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at
210
least 56, but less than 59, hours per week in 
a month, as 1.05 families. 
‘‘(vi) In the case of such a family in 
which the total number of hours in which 
any adult recipient or minor child head of 
household in the family is participating in 
such work activities for an average of at 
least 59 hours per week in a month, as 1.08 
families. 
‘‘(B) APPLICATION
OF
RULES
REGARDING 
DIRECT
WORK
ACTIVITIES
AND
STATE
FLEXI-
BILITY TO COUNT PARTICIPATION IN CERTAIN AC-
TIVITIES.—Subparagraphs (B) and (C) of para-
graph (1) apply to a 2-parent family described 
in subparagraph (A) in the same manner as 
such subparagraphs apply to a family described 
in paragraph (1)(A), except that subparagraph 
(B) of paragraph (1) shall be applied to a such 
a 2-parent family by substituting ‘50’ for ‘24’ 
each place it appears. 
‘‘(5) CALCULATION OF HOURS PER WEEK.—The 
number of hours per week that a family is engaged 
in work is the quotient of—
‘‘(A) the total number of hours per month 
that the family is engaged in work; divided by
211
‘‘(B) 4. 
‘‘(6) SPECIAL RULES.—
‘‘(A) FAMILY
WITH
A
DISABLED
PARENT 
NOT TREATED AS A 2-PARENT FAMILY.—A family 
that includes a disabled parent shall not be con-
sidered a 2-parent family for purposes of para-
graph (3) or (4). 
‘‘(B) NUMBER OF WEEKS FOR WHICH JOB 
SEARCH COUNTS AS WORK.—An individual shall 
not be considered to be engaged in work for a 
month by virtue of participation in an activity 
described in subsection (d)(6) of a State program 
funded under this part, after the individual has 
participated in such an activity for 6 weeks (or, 
if the unemployment rate of the State is at least 
50 percent greater than the unemployment rate 
of the United States, or the State meets the cri-
teria of subclause (I), (II), or (III) of section 
403(b)(3)(A)(iii) or satisfies the applicable dura-
tion requirement of section 403(b)(3)(B)), 12 
weeks). 
‘‘(C) SINGLE TEEN HEAD OF HOUSEHOLD 
OR MARRIED TEEN WHO MAINTAINS SATISFAC-
TORY SCHOOL ATTENDANCE DEEMED TO COUNT 
AS
FAMILY.—For purposes of determining
212
hours under the preceding paragraphs of this 
subsection, with respect to a month, a State shall 
count a recipient who is married or a head of 
household and who has not attained 20 years of 
age as 1 family if the recipient—
‘‘(i) maintains satisfactory attendance 
at secondary school or the equivalent during 
the month; or 
‘‘(ii) participates in education directly 
related to employment for an average of at 
least 20 hours per week during the month. 
‘‘(D) LIMITATION ON NUMBER OF PERSONS 
WHO MAY BE TREATED AS ENGAGED IN WORK BY 
REASON OF PARTICIPATION IN EDUCATIONAL AC-
TIVITIES.—Except as provided in paragraph 
(1)(C)(ii)(I), 
for 
purposes 
of 
subsection 
(b)(1)(B)(i), not more than 30 percent of the 
number of individuals in all families in a State 
who are treated as engaged in work for a month 
may consist of individuals who are—
‘‘(i) determined (without regard to in-
dividuals participating in a program estab-
lished under section 404(l)) to be engaged in 
work for the month by reason of participa-
tion in vocational educational training (but
213
only with respect to such training that does 
not exceed 12 months with respect to any 
individual); or 
‘‘(ii) deemed to be engaged in work for 
the month by reason of subparagraph (C) of 
this paragraph. 
‘‘(E) STATE OPTION TO DEEM SINGLE PAR-
ENT CARING FOR A CHILD OR ADULT DEPENDENT 
FOR CARE WITH A PHYSICAL OR MENTAL IMPAIR-
MENT TO BE MEETING ALL OR PART OF A FAM-
ILY’S WORK PARTICIPATION REQUIREMENTS FOR 
A MONTH.—
‘‘(i) IN GENERAL.—A State may count 
the number of hours per week that an adult 
recipient or minor child head of household 
who is the only parent or caretaker relative 
for a child or adult dependent for care with 
a physical or mental impairment engages 
in providing substantial ongoing care for 
such child or adult dependent for care if the 
State determines that—
‘‘(I) the child or adult dependent 
for care has been verified through a 
medically acceptable clinical or diag-
nostic technique as having a signifi-