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‘‘(iv) 
for 
fiscal 
year 
2000,
$355,310,000.
‘‘(5) WELFARE PARTNERSHIP.—
‘‘(A) IN
GENERAL.—The amount of the
grant otherwise determined under paragraph (1)
for fiscal year 1997, 1998, 1999, or 2000 shall
be reduced by the amount by which State ex-
penditures under the State program funded
under this part for the preceding fiscal year is
less than 80 percent of historic State expendi-
tures.
‘‘(B) HISTORIC
STATE
EXPENDITURES.—
For purposes of this paragraph—
‘‘(i) IN GENERAL.—The term ‘historic
State expenditures’ means expenditures by a
State under parts A and F of title IV for
fiscal year 1994, as in effect during such
fiscal year.
‘‘(ii) HOLD HARMLESS.—In no event
shall the historic State expenditures appli-
cable to any fiscal year exceed the amount
which bears the same ratio to the amount
determined under clause (i) as—
‘‘(I) the grant amount otherwise
determined under paragraph (1) for
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the preceding fiscal year (without re-
gard to section 407), bears to
‘‘(II) the total amount of Federal
payments to the State under section
403 for fiscal year 1994 (as in effect
during such fiscal year).
‘‘(C) DETERMINATION OF STATE EXPENDI-
TURES FOR PRECEDING FISCAL YEAR.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, the expenditures of a State
under the State program funded under this
part for a preceding fiscal year shall be
equal to the sum of the State’s expenditures
under the program in the preceding fiscal
year for—
‘‘(I) cash assistance;
‘‘(II) child care assistance;
‘‘(III) education, job training,
and work;
‘‘(IV) administrative costs; and
‘‘(V) any other use of funds allow-
able under section 403(b)(1).
‘‘(ii) TRANSFERS FROM OTHER STATE
AND
LOCAL
PROGRAMS.—In determining
State expenditures under clause (i), such ex-
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penditures shall not include funding sup-
planted by transfers from other State and
local programs.
‘‘(D) EXCLUSION OF FEDERAL AMOUNTS.—
For purposes of this paragraph, State expendi-
tures shall not include any expenditures from
amounts made available by the Federal Govern-
ment, State funds expended for the medicaid pro-
gram under title XIX of this Act or any succes-
sor to such program, and any State funds which
are used to match Federal funds or are expended
as a condition of receiving Federal funds under
Federal programs other than under title I of this
Act.
‘‘(b) USE OF GRANT.—
‘‘(1) IN GENERAL.—Subject to this part, a State
to which a grant is made under this section may use
the grant—
‘‘(A) in any manner that is reasonably cal-
culated to accomplish the purpose of this part; or
‘‘(B) in any manner that such State used
amounts received under part A or F of this title,
as such parts were in effect before October 1,
1995;
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except that not more than 15 percent of the grant
may be used for administrative purposes.
‘‘(2) AUTHORITY TO TREAT INTERSTATE IMMI-
GRANTS UNDER RULES OF FORMER STATE.—A State
to which a grant is made under this section may
apply to a family some or all of the rules (including
benefit amounts) of the program operated under this
part of another State if the family has moved to the
State from the other State and has resided in the
State for less than 12 months.
‘‘(3) AUTHORITY TO RESERVE CERTAIN AMOUNTS
FOR
ASSISTANCE.—A State may reserve amounts
paid to the State under this part for any fiscal year
for the purpose of providing, without fiscal year limi-
tation, assistance under the State program operated
under this part. In the case of amounts paid to the
State that are set aside in accordance with section
419(a), the State may reserve such amounts for any
fiscal year only for the purpose of providing without
fiscal year limitation child care assistance under this
part.
‘‘(4) AUTHORITY
TO
OPERATE
EMPLOYMENT
PLACEMENT PROGRAM.—A State to which a grant is
made under this section may use a portion of the
grant to make payments (or provide job placement
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vouchers) to State-approved public and private job
placement agencies that provide employment place-
ment services to individuals who receive assistance
under the State program funded under this part.
‘‘(5) TRANSFERABILITY OF GRANT AMOUNTS.—A
State may use up to 30 percent of amounts received
from a grant under this part for a fiscal year to
carry out State activities under the Child Care and
Development Block Grant Act of 1990 (42 U.S.C.
9858 et seq.) (relating to child care block grants).
‘‘(c) TIMING OF PAYMENTS.—The Secretary shall pay
each grant payable to a State under this section in quar-
terly installments.
‘‘(d) FEDERAL LOAN FUND
FOR STATE WELFARE
PROGRAMS.—
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Treasury of the United States a revolv-
ing loan fund which shall be known as the ‘Federal
Loan Fund for State Welfare Programs’ (hereafter for
purposes of this section referred to as the ‘fund’).
‘‘(2) DEPOSITS INTO FUND.—
‘‘(A) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, $1,700,000,000 are hereby
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appropriated for fiscal year 1996 for payment to
the fund.
‘‘(B) LOAN
REPAYMENTS.—The Secretary
shall deposit into the fund any principal or in-
terest payment received with respect to a loan
made under this subsection.
‘‘(3) AVAILABILITY.—Amounts in the fund are
authorized to remain available without fiscal year
limitation for the purpose of making loans and re-
ceiving payments of principal and interest on such
loans, in accordance with this subsection.
‘‘(4) USE OF FUND.—
‘‘(A) LOANS
TO
STATES.—The Secretary
shall make loans from the fund to any loan-eligi-
ble State, as defined in subparagraph (D), for a
period to maturity of not more than 3 years.
‘‘(B) RATE OF INTEREST.—The Secretary
shall charge and collect interest on any loan
made under subparagraph (A) at a rate equal to
the current average market yield on outstanding
marketable obligations of the United States with
remaining periods to maturity comparable to the
period to maturity of the loan.
‘‘(C) MAXIMUM
LOAN.—The cumulative
amount of any loans made to a State under sub-
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paragraph (A) during fiscal years 1996 through
2000 shall not exceed 10 percent of the State
family assistance grant under subsection (a)(2)
for a fiscal year.
‘‘(D) LOAN-ELIGIBLE STATE.—For purposes
of subparagraph (A), a loan-eligible State is a
State which has not had a penalty described in
section 407(a)(1) imposed against it at any time
prior to the loan being made.
‘‘(5) LIMITATION
ON
USE
OF
LOAN.—A State
shall use a loan received under this subsection only
for any purpose for which grant amounts received by
the State under subsection (a) may be used includ-
ing—
‘‘(A) welfare anti-fraud activities; and
‘‘(B) the provision of assistance under the
State program to Indian families that have
moved from the service area of an Indian tribe
with a tribal family assistance plan approved
under section 414.
‘‘(e) SPECIAL RULE FOR INDIAN TRIBES THAT RE-
CEIVED JOBS FUNDS.—
‘‘(1) IN GENERAL.—The Secretary shall pay to
each eligible Indian tribe for each of fiscal years
1996, 1997, 1998, 1999, and 2000 a grant in an
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amount equal to the amount received by such Indian
tribe in fiscal year 1995 under section 482(i) (as in
effect during such fiscal year) for the purpose of oper-
ating a program to make work activities available to
members of the Indian tribe.
‘‘(2) ELIGIBLE INDIAN TRIBE.—For purposes of
paragraph (1), the term ‘eligible Indian tribe’ means
an Indian tribe or Alaska Native organization that
conducted a job opportunities and basic skills train-
ing program in fiscal year 1995 under section 482(i)
(as in effect during such fiscal year).
‘‘(3) APPROPRIATION.—There are authorized to
be appropriated and there are hereby appropriated
$7,638,474 for each fiscal year described in para-
graph (1) for the purpose of paying grants in accord-
ance with such paragraph.
‘‘(f) JOB PLACEMENT PERFORMANCE BONUS.—
‘‘(1) IN GENERAL.—The job placement perform-
ance bonus determined with respect to a State and a
fiscal year is an amount equal to the amount of the
State’s allocation of the job placement performance
fund determined in accordance with the formula de-
veloped under paragraph (2).
‘‘(2) ALLOCATION FORMULA; BONUS FUND.—
‘‘(A) ALLOCATION FORMULA.—
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‘‘(i) IN GENERAL.—Not later than Sep-
tember 30, 1996, the Secretary of Health
and Human Services shall develop and pub-
lish in the Federal Register a formula for
allocating amounts in the job placement
performance bonus fund to States based on
the number of families that received assist-
ance under a State program funded under
this part in the preceding fiscal year that
became ineligible for assistance under the
State program as a result of unsubsidized
employment during such year.
‘‘(ii) FACTORS TO CONSIDER.—In de-
veloping the allocation formula under clause
(i), the Secretary shall—
‘‘(I) provide a greater financial
bonus for individuals in families de-
scribed in clause (i) who remain em-
ployed for greater periods of time or
are at greater risk of long-term welfare
dependency; and
‘‘(II) take into account the unem-
ployment conditions of each State or
geographic area.
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‘‘(B) 
JOB
PLACEMENT
PERFORMANCE
BONUS FUND.—
‘‘(i) IN GENERAL.—The amount in the
job placement performance bonus fund for a
fiscal year shall be an amount equal to the
applicable percentage of the amount appro-
priated under section 403(a)(2)(A) for such
fiscal year.
‘‘(ii) APPLICABLE
PERCENTAGE.—For
purposes of clause (i)(I), the applicable per-
centage shall be determined in accordance
with the following table:
The applicable
‘‘For fiscal year:
percentage is:
1998 ................................................................................................
1999 ................................................................................................
4 .
‘‘(g) ADDITIONAL AMOUNT FOR STUDIES AND DEM-
ONSTRATIONS.—
‘‘(1) IN GENERAL.—There are authorized to be
appropriated and there are appropriated for each fis-
cal year described in subsection (a)(1) an additional
$20,000,000 for the purpose of paying—
‘‘(A) the Federal share of any State-initi-
ated study approved under section 410(g);
‘‘(B) an amount determined by the Sec-
retary to be necessary to operate and evaluate
demonstration projects, relating to part A of title
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IV of this Act, that are in effect or approved
under section 1115 as of October 1, 1995, and
are continued after such date;
‘‘(C) the cost of conducting the research de-
scribed in section 410(a); and
‘‘(D) the cost of developing and evaluating
innovative approaches for reducing welfare de-
pendency and increasing the well-being of minor
children under section 410(b).
‘‘(2) ALLOCATION.—Of the amount appropriated
under paragraph (1) for a fiscal year—
‘‘(A) 50 percent shall be allocated for the
purposes described in subparagraphs (A) and
(B) of paragraph (1), and
‘‘(B) 50 percent shall be allocated for the
purposes described in subparagraphs (C) and
(D) of paragraph (1).
‘‘(h) SECRETARY.—For purposes of this section, the
term ‘Secretary’ means the Secretary of the Treasury.
‘‘(i) CONTINGENCY FUND.—
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Treasury of the United States a fund
which shall be known as the ‘Contingency Fund for
State Welfare Programs’ (hereafter in this section re-
ferred to as the ‘Fund’).
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‘‘(2) DEPOSITS INTO FUND.—Out of any money
in the Treasury of the United States not otherwise
appropriated, there are hereby appropriated for fiscal
years 1996, 1997, 1998, 1999, 2000, 2001, and 2002
such sums as are necessary for payment to the Fund
in a total amount not to exceed $1,000,000,000.
‘‘(3) COMPUTATION OF GRANT.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary of the Treasury shall
pay to each eligible State in a fiscal year an
amount equal to the Federal medical assistance
percentage for such State for such fiscal year (as
defined in section 1905(b)) of so much of the ex-
penditures by the State in such year under the
State program funded under this part as exceed
the historic State expenditures for such State.
‘‘(B) LIMITATION.—The total amount paid
to a State under subparagraph (A) for any fiscal
year shall not exceed an amount equal to 20 per-
cent of the annual amount determined for such
State under the State program funded under this
part (without regard to this subsection) for such
fiscal year.
‘‘(C) METHOD OF COMPUTATION, PAYMENT,
AND RECONCILIATION.—
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‘‘(i) METHOD OF COMPUTATION.—The
method of computing and paying such
amounts shall be as follows:
‘‘(I) The Secretary of Health and
Human Services shall estimate the
amount to be paid to the State for each
quarter under the provisions of sub-
paragraph (A), such estimate to be
based on a report filed by the State
containing its estimate of the total sum
to be expended in such quarter and
such other information as the Sec-
retary may find necessary.
‘‘(II) The Secretary of Health and
Human Services shall then certify to
the Secretary of the Treasury the
amount so estimated by the Secretary
of Health and Human Services.
‘‘(ii) METHOD OF PAYMENT.—The Sec-
retary of the Treasury shall thereupon,
through the Fiscal Service of the Depart-
ment of the Treasury and prior to audit or
settlement by the General Accounting Office,
pay to the State, at the time or times fixed
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during the fiscal year shall be returned to the
Fund.
‘‘(5) ELIGIBLE STATE.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, a State is an eligible State with re-
spect to a fiscal year, if—
‘‘(i)(I) the average rate of total unem-
ployment in such State (seasonally ad-
justed) for the period consisting of the most
recent 3 months for which data for all
States are published equals or exceeds 6.5
percent, and
‘‘(II) the average rate of total unem-
ployment in such State (seasonally ad-
justed) for the 3-month period equals or ex-
ceeds 110 percent of such average rate for
either (or both) of the corresponding 3-
month periods ending in the 2 preceding
calendar years; and
‘‘(ii) has met the maintenance of effort
requirement under subparagraph (B) for the
State program funded under this part for
the fiscal year.
‘‘(B) 
MAINTENANCE
OF
EFFORT.—The
maintenance of effort requirement for any State
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under this subparagraph for any fiscal year is
the expenditure of an amount at least equal to
100 percent of the level of historic State expendi-
tures for such State (as determined under sub-
section (a)(5)).
‘‘(6) ANNUAL REPORTS.—The Secretary of the
Treasury shall annually report to the Congress on the
status of the Fund.
‘‘SEC. 404. MANDATORY WORK REQUIREMENTS.
‘‘(a) PARTICIPATION RATE REQUIREMENTS.—A State
to which a grant is made under section 403 for a fiscal
year shall achieve the minimum participation rate specified
in the following tables for the fiscal year with respect to—
‘‘(1) all families receiving assistance under the
State program funded under this part:
The minimum
participation
‘‘If the fiscal year is:
rate for all families is:
1996 ....................................................................
1997 ....................................................................
1998 ....................................................................
1999 ....................................................................
2000 or thereafter ..............................................
50; and
‘‘(2) with respect to 2-parent families receiving
such assistance:
The minimum
participation
‘‘If the fiscal year is:
rate is:
1996 ....................................................................
1997 or 1998 ......................................................
1999 or thereafter ..............................................
90.
‘‘(b) CALCULATION OF PARTICIPATION RATES.—
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‘‘(1) FOR ALL FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For pur-
poses of subsection (a)(1), the participation rate
for all families of a State for a fiscal year is the
average of the participation rates for all families
of the State for each month in the fiscal year.
‘‘(B) MONTHLY
PARTICIPATION
RATES.—
The participation rate of a State for all families
of the State for a month, expressed as a percent-
age, is—
‘‘(i) the sum of—
‘‘(I) the number of all families re-
ceiving assistance under the State pro-
gram funded under this part that in-
clude an adult who is engaged in work
for the month;
‘‘(II) the number of all families
receiving assistance under the State
program funded under this part that
are subject in such month to a penalty
described in paragraph (1)(A) or
(2)(A) of subsection (d) but have not
been subject to such penalty for more
than 3 months within the preceding
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12-month period (whether or not con-
secutive); and
‘‘(III) the number of all families
that received assistance under the State
program under this part during the
previous 6-month period that have be-
come ineligible to receive assistance
during such period because of employ-
ment and which include an adult who
is employed for the month; divided by
‘‘(ii) the total number of all families
receiving assistance under the State pro-
gram funded under this part during the
month that include an adult receiving as-
sistance.
‘‘(2) 2-PARENT FAMILIES.—
‘‘(A) AVERAGE MONTHLY RATE.—For pur-
poses of subsection (a)(2), the participation rate
for 2-parent families of a State for a fiscal year
is the average of the participation rates for 2-
parent families of the State for each month in
the fiscal year.
‘‘(B) MONTHLY
PARTICIPATION
RATES.—
The participation rate of a State for 2-parent
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families of the State for a month, expressed as a
percentage, is—
‘‘(i) the total number of 2-parent fami-
lies described in paragraph (1)(B)(i); di-
vided by
‘‘(ii) the total number of 2-parent fam-
ilies receiving assistance under the State
program funded under this part during the
month that include an adult.
‘‘(3) PRO RATA REDUCTION OF PARTICIPATION
RATE DUE
TO CASELOAD REDUCTIONS NOT RE-
QUIRED BY FEDERAL LAW.—
‘‘(A) IN
GENERAL.—The Secretary shall
prescribe regulations for reducing the minimum
participation rate otherwise required by this sec-
tion for a fiscal year by the number of percent-
age points equal to the number of percentage
points (if any) by which—
‘‘(i) the number of families receiving
assistance during the fiscal year under the
State program funded under this part is
less than
‘‘(ii) the number of families that re-
ceived aid under the State plan approved
under part A of this title (as in effect before
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October 1, 1995) during the fiscal year im-
mediately preceding such effective date.
The minimum participation rate shall not be re-
duced to the extent that the Secretary determines
that the reduction in the number of families re-
ceiving such assistance is required by Federal
law.
‘‘(B) ELIGIBILITY
CHANGES
NOT
COUNT-
ED.—The regulations described in subparagraph
(A) shall not take into account families that are
diverted from a State program funded under this
part as a result of differences in eligibility cri-
teria under a State program funded under this
part and eligibility criteria under such State’s
plan under the aid to families with dependent
children program, as such plan was in effect on
the day before the date of the enactment of the
Work Opportunity Act of 1995.
‘‘(4) STATE OPTION TO INCLUDE INDIVIDUALS
RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY AS-
SISTANCE PLAN.—For purposes of paragraphs (1)(B)
and (2)(B), a State may, at its option, include fami-
lies receiving assistance under a tribal family assist-
ance plan approved under section 414. For purposes
of the previous sentence, an individual who receives
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assistance under a tribal family assistance plan ap-
proved under section 414 shall be treated as being en-
gaged in work if the individual is participating in
work under standards that are comparable to State
standards for being engaged in work.
‘‘(5) STATE
OPTION
FOR
PARTICIPATION
RE-
QUIREMENT
EXEMPTIONS.—For any fiscal year, a
State may, at its option, not require an individual
who is the parent or caretaker relative of a minor
child who is less than 12 months of age to engage in
work and may exclude such an individual from the
determination of the minimum participation rate
specified for such fiscal year in subsection (a).
‘‘(c) ENGAGED IN WORK.—
‘‘(1) ALL FAMILIES.—For purposes of subsection
(b)(1)(B)(i)(I), an adult is engaged in work for a
month in a fiscal year if the adult is participating
in work for at least the minimum average number of
hours per week specified in the following table during
the month, not fewer than 20 hours per week of which
are attributable to a work activity:
The minimum
‘‘If the month is
average number of
in fiscal year:
hours per week is:
1996 ..........................................................
1997 ..........................................................
1998 ..........................................................
1999 ..........................................................
2000 ..........................................................
2001 ..........................................................
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2002 ..........................................................
2003 or thereafter ....................................
35.
‘‘(2) 2-PARENT FAMILIES.—For purposes of sub-
section (b)(2)(A), an adult is engaged in work for a
month in a fiscal year if the adult is participating
in work for at least 35 hours per week during the
month, not fewer than 30 hours per week of which are
attributable to work activities described in paragraph
(3).
‘‘(3) DEFINITION
OF
WORK
ACTIVITIES.—For
purposes of this subsection, the term ‘work activities’
means—
‘‘(A) unsubsidized employment;
‘‘(B) subsidized employment;
‘‘(C) on-the-job training;
‘‘(D) community service programs;
‘‘(E) job search (only for the first 4 weeks
in which an individual is required to participate
in work activities under this section); and
‘‘(F) vocational educational training (not to
exceed 12 months with respect to any individ-
ual).
‘‘(4) LIMITATION ON VOCATIONAL EDUCATION AC-
TIVITIES COUNTED AS WORK.—For purposes of deter-
mining monthly participation rates under para-
graphs (1)(B)(i)(I) and (2)(B)(i) of subsection (b),
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not more than 25 percent of adults in all families and
in 2-parent families determined to be engaged in
work in the State for a month may meet the work ac-
tivity requirement through participation in voca-
tional educational training.
‘‘(d) PENALTIES AGAINST INDIVIDUALS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if an adult in a family receiving assistance
under the State program funded under this part re-
fuses to engage in work required under subsection
(c)(1) or (c)(2), a State to which a grant is made
under section 403 shall—
‘‘(A) reduce the amount of assistance other-
wise payable to the family pro rata (or more, at
the option of the State) with respect to any pe-
riod during a month in which the adult so re-
fuses; or
‘‘(B) terminate such assistance,
subject to such good cause and other exceptions as the
State may establish.
‘‘(2) EXCEPTION.—Notwithstanding paragraph
(1), a State may not reduce or terminate assistance
under the State program based on a refusal of an
adult to work if such adult is a single custodial par-
ent caring for a child age 5 or under and has a dem-
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onstrated inability (as determined by the State) to ob-
tain needed child care, for one or more of the follow-
ing reasons:
‘‘(A) Unavailability of appropriate child
care within a reasonable distance of the individ-
ual’s home or work site.
‘‘(B) Unavailability or unsuitability of in-
formal child care by a relative or under other ar-
rangements.
‘‘(C) Unavailability of appropriate and af-
fordable formal child care arrangements.
‘‘(e) NONDISPLACEMENT IN WORK ACTIVITIES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), an
adult in a family receiving assistance under this part
may fill a vacant employment position in order to
engage in a work activity described in subsection
(c)(3).
‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No
adult in a work activity described in subsection (c)(3)
shall be employed or assigned—
‘‘(A) when any other individual is on layoff
from the same or any substantially equivalent
job; or
‘‘(B) when the employer has terminated the
employment of any regular employee or other-
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wise caused an involuntary reduction of its
workforce in order to fill the vacancy so created
with an adult described in paragraph (1).
‘‘(3) NO
PREEMPTION.—Nothing in this sub-
section shall preempt or supersede any provision of
State or local law that provides greater protection for
employees from displacement.
‘‘(f) SENSE OF THE CONGRESS.—It is the sense of the
Congress that in complying with this section, each State
that operates a program funded under this part is encour-
aged to assign the highest priority to requiring adults in
2-parent families and adults in single-parent families that
include older preschool or school-age children to be engaged
in work activities.
‘‘(g) DELIVERY THROUGH STATEWIDE SYSTEM.—
‘‘(1) IN GENERAL.—Each work program carried
out by the State to provide work activities in order
to comply with this section shall be delivered through
the statewide workforce development system estab-
lished in section 711 of the Work Opportunity Act of
1995 unless a required work activity is not available
locally through the statewide workforce development
system.
‘‘(2) EFFECTIVE DATE.—The provisions of para-
graph (1) shall take effect—