‘‘(i) IN GENERAL.—If, with the ap-
proval of the State, the work-eligible indi-
viduals in a family are engaged in 1 or 
more qualified activities for an average 
total of at least 24 hours per week in a 
month, then all such engagement in the 
month shall be considered engagement in a 
direct work activity, subject to clause (iii). 
‘‘(ii) 
QUALIFIED
ACTIVITY
DE-
FINED.—The 
term 
‘qualified 
activity’ 
means an activity specified by the State 
(subject to the exclusion described in para-
graph (1)) that meets such standards and 
criteria as the State may specify, includ-
ing—
‘‘(I) substance abuse counseling 
or treatment; 
‘‘(II) 
rehabilitation 
treatment 
and services; 
‘‘(III) work-related education or 
training directed at enabling the fam-
ily member to work; 
‘‘(IV) job search or job readiness 
assistance; and
‘‘(V) any other activity that ad-
dresses a purpose specified in section 
401(a). 
‘‘(iii) LIMITATION.—
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), clause (i) 
shall not apply to a family for more 
than 3 months in any period of 24 
consecutive months. 
‘‘(II) SPECIAL RULE APPLICABLE 
TO
EDUCATION
AND
TRAINING.—A 
State may, on a case-by-case basis, 
apply clause (i) to a work-eligible indi-
vidual so that participation by the in-
dividual in education or training, if 
needed to permit the individual to 
complete a certificate program or 
other work-related education or train-
ing directed at enabling the individual 
to fill a known job need in a local 
area, may be considered countable 
hours with respect to the family of the 
individual for not more than 4 months 
in any period of 24 consecutive 
months.
‘‘(B) SCHOOL
ATTENDANCE
BY
TEEN 
HEAD
OF
HOUSEHOLD.—The 
work-eligible 
members of a family shall be considered to be 
engaged in a direct work activity for an average 
of 40 hours per week in a month if the family 
includes an individual who is married, or is a 
single head of household, who has not attained 
20 years of age, and the individual—
‘‘(i) maintains satisfactory attendance 
at secondary school or the equivalent in 
the month; or 
‘‘(ii) participates in education directly 
related to employment for an average of at 
least 20 hours per week in the month. 
‘‘(d) DIRECT WORK ACTIVITY.—In this section, the 
term ‘direct work activity’ means—
‘‘(1) unsubsidized employment; 
‘‘(2) subsidized private sector employment; 
‘‘(3) subsidized public sector employment; 
‘‘(4) on-the-job training; 
‘‘(5) supervised work experience; or 
‘‘(6) supervised community service.’’. 
(f) PENALTIES
AGAINST
INDIVIDUALS.—Section 
407(e)(1) (42 U.S.C. 607(e)(1)) is amended to read as 
follows:
‘‘(1) REDUCTION OR TERMINATION OF ASSIST-
ANCE.—
‘‘(A) IN GENERAL.—Except as provided in 
paragraph (2), if an individual in a family re-
ceiving assistance under a State program fund-
ed under this part fails to engage in activities 
required in accordance with this section, or 
other activities required by the State under the 
program, and the family does not otherwise en-
gage in activities in accordance with the self-
sufficiency plan established for the family pur-
suant to section 408(b), the State shall—
‘‘(i) if the failure is partial or persists 
for not more than 1 month—
‘‘(I) reduce the amount of assist-
ance otherwise payable to the family 
pro rata (or more, at the option of the 
State) with respect to any period dur-
ing a month in which the failure oc-
curs; or 
‘‘(II) terminate all assistance to 
the family, subject to such good cause 
exceptions as the State may establish; 
or
‘‘(ii) if the failure is total and persists 
for at least 2 consecutive months, termi-
nate all cash payments to the family in-
cluding qualified State expenditures (as de-
fined in section 409(a)(7)(B)(i)) for at 
least 1 month and thereafter until the 
State determines that the individual has 
resumed full participation in the activities, 
subject to such good cause exceptions as 
the State may establish. 
‘‘(B) SPECIAL RULE.—
‘‘(i) IN GENERAL.—In the event of a 
conflict between a requirement of clause 
(i)(II) or (ii) of subparagraph (A) and a 
requirement of a State constitution, or of 
a State statute that, before 1966, obligated 
local government to provide assistance to 
needy parents and children, the State con-
stitutional or statutory requirement shall 
control. 
‘‘(ii) LIMITATION.—Clause (i) of this 
subparagraph shall not apply after the 1-
year period that begins with the date of 
the enactment of this subparagraph.’’. 
(g) CONFORMING AMENDMENTS.—
(1) Section 407(f) (42 U.S.C. 607(f)) is amend-
ed in each of paragraphs (1) and (2) by striking 
‘‘work activity described in subsection (d)’’ and in-
serting ‘‘direct work activity’’. 
(2) The heading of section 409(a)(14) (42 
U.S.C. 609(a)(14)) is amended by inserting ‘‘OR RE-
FUSING TO ENGAGE IN ACTIVITIES UNDER A FAMILY 
SELF-SUFFICIENCY PLAN’’ after ‘‘WORK’’. 
(h) EFFECTIVE DATE.—The amendments made by 
this section (other than subsection (a)) shall take effect 
on October 1, 2003. 
SEC. 111. MAINTENANCE OF EFFORT. 
(a) IN GENERAL.—Section 409(a)(7) (42 U.S.C. 
609(a)(7)) is amended—
(1) in subparagraph (A) by striking ‘‘fiscal year 
1998, 1999, 2000, 2001, 2002, or 2003’’ and insert-
ing ‘‘fiscal year 2003, 2004, 2005, 2006, 2007, 
2008, or 2009’’; and 
(2) in subparagraph (B)(ii)—
(A) by inserting ‘‘preceding’’ before ‘‘fiscal 
year’’; and 
(B) by striking ‘‘for fiscal years 1997 
through 2002,’’. 
(b) STATE SPENDING
ON PROMOTING HEALTHY 
MARRIAGE.—