SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Responsible Fatherhood and Healthy Families Act of 
2007’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Findings. 
TITLE I—PROMOTING RESPONSIBLE FATHERHOOD AND 
STRENGTHENING LOW-INCOME FAMILIES 
Sec. 101. Healthy marriage promotion and responsible fatherhood programs. 
Sec. 102. Grants to healthy family partnerships for domestic violence preven-
tion, for services for families and individuals affected by do-
mestic violence, and for developing and implementing best 
practices. 
Sec. 103. Elimination of separate TANF work participation rate for 2-parent 
families. 
Sec. 104. Ban on recovery of Medicaid costs for births. 
Sec. 105. Improved collection and distribution of child support. 
Sec. 106. Grants to States to conduct demonstration projects to promote eco-
nomic opportunity for low-income parents. 
Sec. 107. State assessments of barriers to employment and financial support of 
children. 
Sec. 108. Collection of child support under the food stamp program. 
TITLE II—REVENUE PROVISIONS 
Sec. 201.
Expansion of earned income credit for eligible individuals with no 
qualifying children. 
Sec. 202. Broker reporting of customer’s basis in securities transactions. 
Sec. 203. Modification of effective date of leasing provisions of the American 
Jobs Creation Act of 2004. 
Sec. 204. Clarification of economic substance doctrine. 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) The most important factor in a child’s up-
bringing is whether the child is brought up in a lov-
ing, healthy, supportive environment. 
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(2) Children who grow up with two parents are, 
on average, more likely than their peers in single- 
parent homes to finish high school and be economi-
cally self-sufficient. 
(3) Father-child interaction, like mother-child 
interaction, has been shown to promote the positive 
physical, social, emotional, and mental development 
of children. 
(4) Children typically live without both parents 
when their parents are divorced or did not marry. 
More than 1⁄3 of all first marriages end in divorce, 
and 60 percent of divorcing couples have children. 
More than 1⁄3 of all births are to unmarried women. 
(5) More than 1 in 4 families with children 
have only 1 parent present, and more than 1 in 3 
children live absent their biological father. 
(6) Recent studies demonstrate that most 
unwed fathers in urban areas are highly involved 
with the mother of their child before and after the 
child’s birth, with 80 percent involved during the 
mother’s pregnancy, and 50 percent living with the 
child’s mother at the time of the child’s birth. How-
ever, the relationship between the parents often does 
not last, and many fathers do not maintain contact 
with their children as the children grow up. 
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(7) An estimated 40 percent of the children 
who live in households without their father have not 
seen their fathers in at least 1 year. 
(8) The inability of parents to sustain a healthy 
relationship with their child’s other parent and re-
main involved in their child’s life can have severe 
negative consequences for the parents, the child, 
their community, and taxpayers. 
(9) Single-parent families are 5 times as likely 
to be poor as married-couple families. 
(10) Children raised in single-parent families 
are more likely than children raised in 2-parent fam-
ilies to do poorly in school, have emotional and be-
havioral problems, become teenage parents, commit 
crimes, smoke cigarettes, abuse drugs and alcohol, 
and have poverty-level incomes as adults. 
(11) High rates of unemployment and low 
wages are primary reasons why parents do not 
marry, why 2-parent families break up, and why fa-
thers fail to remain involved with their children. 
(12) Domestic violence is also a significant 
problem leading to the non-formation or break-up of 
2-parent families. 
(13) A history of incarceration is a major bar-
rier to employment. Sixty percent of young African- 
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American men who dropped out of high school have 
served time. When these men leave prison, they 
often have difficulty finding a job and supporting 
their children. 
(14) Over 1⁄2 of State prison inmates are par-
ents. When noncustodial parents go to prison, their 
child support obligations continue, even though they 
have little ability to pay the support. When these 
parents leave prison, they typically owe more than 
$20,000 in child support debt. Noncustodial parents 
leaving prison often re-enter the underground econ-
omy because of financial pressures or to avoid the 
child support system, making it less likely that they 
will successfully rejoin society and reunite with their 
families. 
(15) Children should receive the child support 
paid by their parents, and the government should 
not keep the money to recover welfare costs. Regular 
child support income appears to have a greater posi-
tive impact on children dollar for dollar than other 
types of income. Researchers in Wisconsin found 
that when monthly child support was passed through 
to families receiving assistance under the Temporary 
Assistance for Needy Families program established 
under part A of title IV of the Social Security Act 
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(TANF) and disregarded 100 percent in determining 
assistance for the families, fathers paid more child 
support, established their legal relationship with 
their children more quickly, and worked less in the 
underground economy. Moreover, the State costs of 
a full pass-through and disregard of child support 
were fully offset by increased payments by fathers 
and decreased public assistance use by families. 
(16) The Department of Health and Human 
Services National Child Support Enforcement Stra-
tegic Plan for fiscal years 2005 through 2009 states 
that ‘‘child support is no longer a welfare reimburse-
ment, revenue-producing device for the Federal and 
State governments; it is a family-first program, in-
tended to ensure families’ self-sufficiency by making 
child support a more reliable source of income’’. 
(17) Current law permits States to apply the 
cost of passing through child support to families re-
ceiving assistance under the TANF program toward 
their maintenance of effort (MOE) requirements, 
but only to the extent that the State disregards the 
child support payments in determining the amount 
and type of TANF assistance. 
(18) Programs that increase employment oppor-
tunity and reduce barriers by increasing employment 
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opportunity and reducing recidivism will benefit chil-
dren and families. 
(19) Transitional jobs programs have shown 
promise in reducing unemployment among chron-
ically unemployed or underemployed population 
groups, including formerly incarcerated individuals, 
the homeless, and young African-American men. 
(20) To strengthen families it is important to 
improve the upward economic mobility of the custo-
dial and noncustodial parent wage-earners, as well 
as youth at risk of early parenthood or incarcer-
ation, by providing the skills and experience nec-
essary to access jobs with family-sustaining wages 
and benefits. In families in which all the members 
do not live together, this is important to enable the 
prompt and consistent payment of adequate child 
support. 
(21) It is important and useful to foster local 
and regional economic development and job advance-
ment for workers, especially young custodial and 
noncustodial parents, by funding local collaborations 
among business, education, and the community in 
the development of pathways for preparing disadvan-
taged citizens to meet the workforce needs of the 
local and regional economy. 
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(22) Employers benefit from working with and 
being supported by the local education, post-sec-
ondary and workforce systems in identifying the aca-
demic and occupational skill sets needed to fill the 
skilled jobs in the changing economy. Local eco-
nomic and community development is enhanced 
when residents have access to higher wage employ-
ment, thus increasing the tax base, fueling the econ-
omy, and contributing to greater family economic se-
curity. 
(23) Public-private career pathways partner-
ships are an important tool for linking employers 
and workers with the workforce education services 
they need and for integrating community economic 
development and workforce education services. Tran-
sitional jobs programs can serve as the first step in 
a career pathway by giving unemployed individuals 
with multiple barriers to employment, valuable work 
experience and related services. 
(24) The purpose of child support is to provide 
necessary income support for and increase the well- 
being of children living apart from a parent. To im-
prove the ability of low-income noncustodial parents 
to provide long-term support and care for their chil-
dren throughout their entire childhood, it is impor-
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tant that child support polices support parental ef-
forts to pursue education and employment and to 
stay involved with their children. 
(25) Responsible parenthood includes active 
participation in financial support and child-rearing, 
as well as the formation and maintenance of a posi-
tive, healthy, and nonviolent relationship between 
parent and child and a cooperative, healthy, and 
nonviolent relationship between parents. 
(26) States should be encouraged to implement 
voluntary programs that provide support for respon-
sible parenting, including by increasing the employ-
ment and financial security of parents, and the pa-
rental involvement of noncustodial parents. 
(27) Promoting responsible parenthood saves 
the government money by reducing the need for pub-
lic assistance, increasing the educational attainment 
of children, juvenile delinquency and crime, reducing 
substance abuse, and lowering rates of unemploy-
ment. 
(28) Programs to encourage responsible father-
hood or responsible motherhood should promote and 
provide support services for— 
(A) fostering loving and healthy relation-
ships between parents and children; 
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(B) increasing responsibility of noncusto-
dial parents for the long-term care and finan-
cial well-being of their children; 
(C) increasing employment of low-income, 
noncustodial parents and improving compliance 
with child support obligations; and 
(D) reducing barriers to active 2-parent in-
volvement and cooperative parenting. 
(29) The promotion of marriage and responsible 
parenthood should not denigrate the standing or 
parenting efforts of single parents or other care-
givers, lessen the protection of children from abusive 
parents, or compromise the safety or health of the 
custodial or noncustodial parent, but should increase 
the chance that children will have 2 caring parents 
to help them grow up healthy and secure. 
TITLE I—PROMOTING RESPON-
SIBLE 
FATHERHOOD 
AND 
STRENGTHENING 
LOW-IN-
COME FAMILIES 
SEC. 101. HEALTHY MARRIAGE PROMOTION AND RESPON-
SIBLE FATHERHOOD PROGRAMS. 
(a) ENSURING FUNDING
FOR RESPONSIBLE FA-
THERHOOD PROGRAMS.—Section 403(a)(2)(C) of the So-
cial Security Act (42 U.S.C. 603(a)(2)(C)) is amended— 
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(1) in the subparagraph heading, by striking 
‘‘LIMITATION ON USE OF’’ and inserting ‘‘REQUIRE-
MENT TO USE CERTAIN’’; and 
(2) in clause (i), by striking ‘‘may not award 
more than $50,000,000’’ and inserting ‘‘shall award 
at least $100,000,000’’. 
(b) REQUIREMENTS TO ENSURE PROCEDURES TO 
ADDRESS DOMESTIC VIOLENCE PREVENTION.— 
(1) IN GENERAL.—Section 403(a)(2) of the So-
cial Security Act (42 U.S.C. 603(a)(2)) is amend-
ed— 
(A) by redesignating subparagraph (D) as 
subparagraph (G); and 
(B) by inserting after subparagraph (C) 
the following new subparagraphs: 
‘‘(D) REQUIREMENTS
FOR
RECEIPT
OF 
FUNDS.—An entity may not be awarded a grant 
under this paragraph unless the entity, as a 
condition of receiving funds under such a 
grant— 
‘‘(i) consults with domestic violence 
organizations that have demonstrated ex-
pertise working with survivors of domestic 
violence in developing policies, procedures, 
programs and training necessary to appro-
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priately address domestic violence in fami-
lies served by programs and activities 
funded under such grant; 
‘‘(ii) describes in the application for a 
grant under this paragraph— 
‘‘(I) how the programs or activi-
ties proposed to be conducted will ap-
propriately address issues of domestic 
violence; and 
‘‘(II) what the entity will do, to 
the extent relevant, to ensure that 
participation in such programs or ac-
tivities is voluntary, and to inform po-
tential participants that their involve-
ment is voluntary; 
‘‘(iii) establishes a written protocol for 
providers and administrators of programs 
and activities relevant to the grant that— 
‘‘(I) provides for helping identify 
instances or risks of domestic violence; 
and 
‘‘(II) specifies the procedures for 
making service referrals and providing 
protections and appropriate assistance 
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graph, including an individual 
whose participation is specified in 
the individual responsibility plan 
developed for the individual in 
accordance with section 408(b), 
to transfer to another such pro-
gram or activity funded under 
this paragraph upon notification 
to the entity and the State agen-
cy responsible for administering 
the State program funded under 
this part.’’. 
(d) ACTIVITIES PROMOTING RESPONSIBLE FATHER-
HOOD.—Section 403(a)(2)(C)(ii) of the Social Security 
Act (42 U.S.C. 603(a)(2)(C)(ii)) is amended— 
(1) in subclause (I), by striking ‘‘marriage or 
sustain marriage’’ and insert ‘‘healthy relationships 
and marriages or to sustain healthy relationships or 
marriages’’; 
(2) in subclause (II), by inserting ‘‘educating 
youth who are not yet parents about the economic, 
social, and family consequences of early parenting, 
helping participants in fatherhood programs work 
with their own children to break the cycle of early 
parenthood,’’ after ‘‘child support payments,’’; and 
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(3) in subclause (III), by striking ‘‘fathers’’ and 
inserting ‘‘low-income fathers and other low-income 
noncustodial parents whom are not eligible for as-
sistance under the State program funded under this 
part’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2007. 
SEC. 102. GRANTS TO HEALTHY FAMILY PARTNERSHIPS 
FOR DOMESTIC VIOLENCE PREVENTION, FOR 
SERVICES FOR FAMILIES AND INDIVIDUALS 
AFFECTED BY DOMESTIC VIOLENCE, AND 
FOR DEVELOPING AND IMPLEMENTING BEST 
PRACTICES. 
Section 403(a) of the Social Security Act (42 U.S.C. 
603(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(6) GRANTS TO HEALTHY FAMILY PARTNER-
SHIPS FOR DOMESTIC VIOLENCE PREVENTION, FOR 
SERVICES
FOR
FAMILIES
AND
INDIVIDUALS
AF-
FECTED BY DOMESTIC VIOLENCE, AND FOR DEVEL-
OPING AND IMPLEMENTING BEST PRACTICES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
award grants on a competitive basis to healthy 
family partnerships to— 
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‘‘(i) conduct programs and activities 
that are designed to prevent domestic vio-
lence; 
‘‘(ii) provide services for victims of do-
mestic violence; and 
‘‘(iii) develop and implement best 
practices for preventing domestic violence, 
particularly as a barrier to economic secu-
rity, and for providing services to families 
and individuals affected by such violence 
including through caseworker training and 
the provision of technical assistance. 
‘‘(B) EDUCATION SERVICES.—In awarding 
grants under subparagraph (A), the Secretary 
shall ensure that 10 percent of the funds made 
available under such grants are used for high 
schools and other secondary educational institu-
tions and institutions of higher education to 
provide education services on the value of 
healthy relationships, responsible parenting, 
and healthy marriages characterized by mutual 
respect and non-violence, and the importance of 
building relationships skills such as communica-
tion, conflict resolution, and budgeting. 
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‘‘(C) APPLICATION.—The respective entity 
and organization of a healthy family partner-
ship entered into for purposes of receiving a 
grant under this paragraph shall submit a joint 
application to the Secretary, at such time and 
in such manner as the Secretary shall specify, 
containing— 
‘‘(i) a description of how the partner-
ship intends to carry out the activities de-
scribed in subparagraph (A); 
‘‘(ii) an assurance that funds made 
available under the grant shall be used to 
supplement, and not supplant, other funds 
used by the entity or organization to carry 
out programs, activities, or services de-
scribed in subparagraph (A) or (B); and 
‘‘(iii) such other information as the 
Secretary may require. 
‘‘(D) GENERAL RULES GOVERNING USE OF 
FUNDS.—The rules of section 404, other than 
subsection (b) of that section, shall not apply to 
a grant made under this paragraph. 
‘‘(E) DEFINITIONS.—In this paragraph: 
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‘‘(i) DOMESTIC VIOLENCE.—The term 
‘domestic violence’ has the meaning given 
that term in section 402(a)(7)(B). 
‘‘(ii) HEALTHY
FAMILY
PARTNER-
SHIP.—The term ‘healthy family partner-
ship’ means a partnership between— 
‘‘(I) an entity receiving funds 
under a grant made under paragraph 
(2) to promote healthy marriage or re-
sponsible fatherhood; and 
‘‘(II) an organization described 
in paragraph (2)(D)(i). 
‘‘(F) APPROPRIATION.—Out of any money 
in the Treasury of the United States not other-
wise appropriated, there are appropriated for 
each of fiscal years 2008 through 2010, 
$25,000,000 for purposes of awarding grants to 
healthy family partnerships under this para-
graph.’’. 
SEC. 103. ELIMINATION OF SEPARATE TANF WORK PAR-
TICIPATION RATE FOR 2-PARENT FAMILIES. 
(a) IN GENERAL.—Section 407 of the Social Security 
Act (42 U.S.C. 607) is amended— 
(1) in subsection (a)— 
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(A) beginning in the heading, by striking 
‘‘PARTICIPATION RATE REQUIREMENTS’’ and 
all that follows through ‘‘A State’’ in paragraph 
(1) and inserting ‘‘PARTICIPATION RATE RE-
QUIREMENTS.—A State’’; and 
(B) by striking paragraph (2); 
(2) in subsection (b)— 
(A) in paragraph (1)(A), by striking ‘‘sub-
section (a)(1)’’ and inserting ‘‘subsection (a)’’; 
(B) in paragraph (2), by striking the para-
graph heading and all that follows through ‘‘A 
family’’ and inserting ‘‘SPECIAL RULE.—A fam-
ily’’; 
(C) in paragraph (4), by striking ‘‘para-
graphs (1)(B) and (2)(B)’’ and inserting ‘‘de-
termining monthly participation rates under 
paragraph (1)(B)’’; and 
(D) in paragraph (5), by striking ‘‘rates’’ 
and inserting ‘‘rate’’; and 
(3) in subsection (c)— 
(A) in paragraph (1)(B), in the matter 
preceding clause (i), by striking ‘‘subsection 
(b)(2)(B)’’ 
and 
inserting 
‘‘subsection 
(b)(1)(B)(i)’’; and 
(B) in paragraph (2)(D)— 
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(i) by striking ‘‘paragraphs (1)(B)(i) 
and (2)(B) of subsection (b)’’ and insert-
ing ‘‘subsection (b)(1)(B)(i)’’; and 
(ii) by striking ‘‘and in 2-parent fami-
lies, respectively,’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
subsection (a) shall take effect on the date of enact-
ment of this Act and shall apply to the determina-
tion of minimum participation rates for months be-
ginning on or after that date. 
(2) LIMITATION
ON
PENALTY
IMPOSITION.— 
Notwithstanding section 409(a)(3) of the Social Se-
curity Act, the Secretary of Health and Human 
Services shall not impose a penalty against a State 
under that section on the basis of the State’s failure 
to satisfy the participation rate required for fiscal 
year 2006 and 2007 if the State demonstrates that 
the State would have met such requirement if, with 
respect to those months of fiscal year 2007 that 
began prior to or on the date of enactment of this 
Act, the State were permitted to count 2-parent 
families that met the requirements of section 
407(c)(1)(A) of the Social Security Act (42 U.S.C. 
607(c)(1)(A)) in the determination of monthly par-
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ticipation rates under section 407(b)(1)(B)(i) of 
such Act (42 U.S.C. 607(b)(1)(B)(i)). 
SEC. 104. BAN ON RECOVERY OF MEDICAID COSTS FOR 
BIRTHS. 
(a) BAN ON RECOVERY.— 
(1) IN GENERAL.—Section 454 of the Social 
Security Act (42 U.S.C. 654), is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (32); 
(B) by striking the period at the end of 
paragraph (33) and inserting a semicolon; and 
(C) by inserting after paragraph (33) the 
following: 
‘‘(34) provide that, except as provided in sec-
tion 1902(a)(25)(F)(ii), the State shall not use the 
State program operated under this part to collect 
any amount owed to the State by reason of costs in-
curred under the State plan approved under title 
XIX for the birth of a child for whom support rights 
have been assigned pursuant to section 471(a)(17) 
or 1912; and’’. 
(2) RULE OF CONSTRUCTION.—Nothing in sec-
tion 454(34) of the Social Security Act (42 U.S.C. 
654(34)), as added by paragraph (1), shall be con-
strued as affecting the application of section 
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1902(a)(25) of such Act (42 U.S.C. 1396a(a)(25)) 
with respect to a State (relating to the State Med-
icaid plan requirement for the State to take all rea-
sonable measures to ascertain the legal liability of 
third parties to pay for care and services available 
under the plan). 
(3) REPEAL OF CERTAIN DRA AMENDMENTS.— 
For provisions repealing amendments to section 454 
of the Social Security Act made by section 
7301(b)(1)(C) of the Deficit Reduction Act of 2005, 
see section 105(a)(3) of this Act. 
(b) CLARIFICATION THAT BAN ON RECOVERY DOES 
NOT APPLY WITH RESPECT TO INSURANCE OF A PARENT 
WITH AN OBLIGATION TO PAY CHILD SUPPORT.—Clause 
(ii) of section 1902(a)(25)(F) of the Social Security Act 
(42 U.S.C. 1396a(a)(25)(F)) is amended by inserting 
‘‘only if such third-party liability is derived through insur-
ance,’’ before ‘‘seek’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
take effect on October 1, 2007. 
(2) EXTENSION
OF
EFFECTIVE
DATE
FOR 
STATE LAW AMENDMENT.—In the case of a State 
plan under title XIX of the Social Security Act (42 
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U.S.C. 1396 et seq.) which the Secretary of Health 
and Human Services determines requires State legis-
lation in order for the plan to meet the additional 
requirements imposed by the amendments made by 
this section, the State plan shall not be regarded as 
failing to comply with the requirements of such title 
solely on the basis of its failure to meet these addi-
tional requirements before the first day of the first 
calendar quarter beginning after the close of the 
first regular session of the State legislature that be-
gins after the date of enactment of this Act. For 
purposes of the previous sentence, in the case of a 
State that has a 2-year legislative session, each year 
of the session is considered to be a separate regular 
session of the State legislature. 
SEC. 105. IMPROVED COLLECTION AND DISTRIBUTION OF 
CHILD SUPPORT. 
(a) DISTRIBUTION OF CHILD SUPPORT.— 
(1) FULL
DISTRIBUTION
OF
CHILD
SUPPORT 
COLLECTED; REFORM OF RULES FOR DISTRIBUTION 
OF
CHILD
SUPPORT
COLLECTED
ON
BEHALF
OF 
CHILDREN IN FOSTER CARE.— 
(A) IN GENERAL.—Section 457 of the So-
cial Security Act (42 U.S.C. 657) is amended— 
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(i) by striking subsection (a) and in-
serting the following: 
‘‘(a) FULL DISTRIBUTION OF AMOUNTS COLLECTED 
ON BEHALF OF ANY FAMILY.—Subject to subsection (c), 
the entire amount collected on behalf of any family as sup-
port by a State pursuant to a plan approved under this 
part shall be paid by the State to the family, and shall 
not be retained by the State to reimburse costs of assist-
ance provided under part A, part E, or any State-funded 
assistance or benefits.’’; and 
(ii) 
by 
striking 
subsections 
(c) 
through (e) and inserting the following: 
‘‘(c) AMOUNTS COLLECTED FOR CHILD FOR WHOM 
FOSTER CARE MAINTENANCE PAYMENTS ARE MADE.— 
Notwithstanding the preceding provisions of this section, 
amounts collected by a State as child support for months 
in any period on behalf of a child for whom a public agen-
cy is making foster care maintenance payments under part 
E shall be paid to the public agency responsible for super-
vising the placement of the child, which may use the pay-
ments in the manner it determines will serve the best in-
terests of the child, including setting such payments aside 
for the child’s future needs, depositing the funds in a child 
asset account, or making all or a part thereof available 
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(3) REPEAL OF CERTAIN DRA AMENDMENTS.— 
Effective on the date of enactment of this Act, sub-
sections (a) and (b) of section 7301 of the Deficit 
Reduction Act of 2005 (Public Law 109–171; 120 
Stat. 141) are repealed and parts A and D of title 
IV of the Social Security Act shall be applied as if 
the amendments made by such subsections had not 
been enacted. 
(b) PROHIBITION
ON CONDITIONING RECEIPT
OF 
TANF ON ASSIGNMENT OF SUPPORT.—Section 408(a)(3) 
of the Social Security Act (42 U.S.C. 608(a)(3)) is amend-
ed— 
(1) in the paragraph heading, by striking ‘‘NO 
ASSISTANCE
FOR
FAMILIES
NOT’’ and inserting 
‘‘PROHIBITION ON CONDITIONING ASSISTANCE FOR 
FAMILIES ON’’; 
(2) by inserting ‘‘not’’ after ‘‘shall’’; 
(3) by inserting ‘‘or under a program funded 
with qualified State expenditures (as defined in sec-
tion 409(a)(7)(B)(i))’’ after ‘‘this part’’; and 
(4) by striking ‘‘, not exceeding the total 
amount of assistance so paid to the family,’’. 
(c) REQUIREMENT TO DISREGARD PERCENTAGE OF 
CHILD SUPPORT COLLECTED IN DETERMINING AMOUNT 
AND TYPE OF TANF ASSISTANCE.—Section 408(a) of the 
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Social Security Act (42 U.S.C. 608(a)) is amended by add-
ing at the end the following new paragraph: 
‘‘(12) REQUIREMENT TO DISREGARD PERCENT-
AGE
OF
CHILD
SUPPORT
COLLECTED
IN
DETER-
MINING AMOUNT AND TYPE OF TANF ASSISTANCE.— 
A State to which a grant is made under section 403 
shall disregard at least the same percentage of 
amounts collected as support on behalf of a family 
as the percentage of earned income that the State 
disregards in determining the amount or type of as-
sistance provided to the family under the State pro-
gram funded under this part or under a program 
funded with qualified State expenditures (as defined 
in section 409(a)(7)(B)(i)).’’. 
(d) STATE OPTION TO DISCONTINUE OLDER SUP-
PORT ASSIGNMENTS.—Effective as if included in the 
amendment made by section 7301(c) of the Deficit Reduc-
tion Act of 2005, section 457(b) of the Social Security 
Act (42 U.S.C. 657(b)) is amended to read as follows: 
‘‘(b) CONTINUATION OF ASSIGNMENTS.— 
‘‘(1) IN GENERAL.—Any rights to support obli-
gations assigned to a State as a condition of receiv-
ing assistance from the State under parts A and E 
and in effect on September 30, 2009 (or such earlier 
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date as the State may choose), may be discontinued 
after such date. 
‘‘(2) DISTRIBUTION
OF
AMOUNTS
AFTER
AS-
SIGNMENT DISCONTINUATION.—If a State chooses to 
discontinue the assignment of a support obligation 
described in paragraph (1), the State may treat 
amounts collected pursuant to the assignment as if 
the amounts had never been assigned and may dis-
tribute the amounts to the family in accordance with 
subsections (a) and (c).’’. 
(e) RESTORATION OF FEDERAL FUNDING.—Effec-
tive on the date of enactment of this Act, section 7309 
of the Deficit Reduction Act of 2005 (Public Law 109– 
171; 120 Stat. 147) is repealed and part D of title IV 
of the Social Security Act shall be applied as if the amend-
ment made by subsection (a) of that section had not been 
enacted. 
(f) REPEAL OF MANDATORY FEE FOR CHILD SUP-
PORT COLLECTION.—Effective on the date of enactment 
of this Act, section 7310 of the Deficit Reduction Act of 
2005 (Public Law 109–171; 120 Stat. 147) is repealed 
and part D of title IV of the Social Security Act shall 
be applied as if the amendments made by that section had 
not been enacted. 
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(g) PROHIBITION ON CONSIDERING A PERIOD OF IN-
CARCERATION
VOLUNTARY
UNEMPLOYMENT.—Section 
466(a) of the Social Security Act (42 U.S.C. 666(a)) is 
amended by inserting after paragraph (19) the following 
new paragraph: 
‘‘(20) PROCEDURES RELATING TO PERIODS OF 
INCARCERATION OF NONCUSTODIAL PARENTS.— 
‘‘(A) IN GENERAL.—Procedures which re-
quire that, in determining or modifying the 
amount of, or terms and conditions of, any sup-
port obligation of a noncustodial parent, the 
State— 
‘‘(i) shall not consider any period of 
incarceration of such parent as a period of 
voluntary unemployment that disqualifies 
the parent from obtaining a modification 
of the support obligation consistent with 
the parent’s ability to pay child support; 
and 
‘‘(ii) subject to subparagraph (B) in 
the case of an incarcerated parent, may— 
‘‘(I) temporarily suspend any 
support obligation on the parent and 
the enforcement of any support obli-
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gation of the parent existing prior to 
the period of incarceration; and 
‘‘(II) temporarily prohibit the ac-
crual of any interest on any support 
obligation of the parent existing prior 
to the period of incarceration during 
any such period. 
‘‘(B) NOTICE AND OPPORTUNITY TO CHAL-
LENGE SUSPENSION.—Such procedures shall re-
quire the State to provide a custodial parent 
with— 
‘‘(i) notice of any suspension of re-
view, adjustment, or enforcement of a sup-
port obligation and of any prohibition on 
interest accrual on such obligation that is 
imposed in accordance with subparagraph 
(A)(ii); and 
‘‘(ii) an opportunity to request that 
the suspension or prohibition be termi-
nated or modified on the basis that the 
noncustodial parent has sufficient income 
or resources to continue payment of the 
support obligation during the noncustodial 
parent’s period of incarceration.’’. 
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(h) FORGIVING OR OTHER MODIFICATION OF CHILD 
SUPPORT ARREARAGES ASSIGNED TO THE STATE.—Sec-
tion 466(a)(9) of the Social Security Act (42 U.S.C. 
666(a)(9)) is amended in the flush matter following sub-
paragraph (C), by inserting the following new sentence at 
the end: ‘‘Nothing in this paragraph shall be construed 
as prohibiting a State from forgiving, compromising, re-
ducing or waiving arrearages permanently assigned to the 
State under part A or E or under title XIX.’’. 
(i) REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
ARREARAGES UPON REQUEST.—Section 466(a)(10) of 
the Social Security Act (42 U.S.C. 666(a)(10)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(D) REVIEW AND ADJUSTMENT OF AR-
REARAGES.—Procedures 
which 
require 
the 
State to review, and if appropriate, reduce the 
balance of arrearages permanently assigned to 
the State under part A or E, or under title 
XIX, pursuant to standards and procedures es-
tablished by the State, in cases where the obli-
gor lacks sufficient ability to pay the arrears, 
adjustment will promote timely payment of cur-
rent support, or barriers, such as incarceration, 
may have limited the ability of the obligor to 
timely seek a modification of the order, and it 
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is in the best interests of the child to make 
such reduction. Nothing in the preceding sen-
tence shall be construed as affecting arrearages 
that have not been permanently assigned to the 
State under such part or title.’’. 
(j) STUDY AND REPORT.—Not later than October 1, 
2008, the Secretary of Health and Human Services shall 
study and submit a report to Congress regarding the fol-
lowing: 
(1) The effect of age eligibility restrictions for 
the earned income tax credit established under sec-
tion 32 of the Internal Revenue Code of 1986 for in-
dividuals without qualifying children on— 
(A) the ability of young parents to pay 
child support; 
(B) compliance with child support orders; 
and 
(C) the relationship between young non-
custodial parents and their children. 
(2) The impact of State earned income tax 
credit programs, especially such programs with tar-
geted benefits for noncustodial parents, on— 
(A) the ability of noncustodial parents to 
pay child support; 
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(B) compliance with child support orders; 
and 
(C) the relationship between noncustodial 
parents and their children. 
(3) The challenges faced by legal immigrants 
and individuals for whom English is not their pri-
mary language in fulfilling child support and other 
noncustodial parenting obligations. 
(k) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this section, the amendments made by this 
section shall take effect on October 1, 2009, and 
shall apply to payments under parts A and D of title 
IV of the Social Security Act for calendar quarters 
beginning on or after that date, and without regard 
to whether regulations to implement the amend-
ments are promulgated by such date. 
(2) STATE OPTION TO ACCELERATE EFFECTIVE 
DATE.—Notwithstanding paragraph (1), a State 
may elect to have the amendments made by the pre-
ceding provisions of this section apply to the State 
and to amounts collected by the State (and to pay-
ments under parts A and D of title IV of such Act), 
on and after such date as the State may select that 
is not later than September 30, 2009. 
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SEC. 106. GRANTS TO STATES TO CONDUCT DEMONSTRA-
TION PROJECTS TO PROMOTE ECONOMIC OP-
PORTUNITY FOR LOW-INCOME PARENTS. 
(a) COURT–SUPERVISED OR IV–D AGENCY–SUPER-
VISED EMPLOYMENT PROGRAMS
FOR NONCUSTODIAL 
PARENTS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall award grants to States to con-
duct demonstration projects to establish, in coordi-
nation with counties and other local or tribal govern-
ments, court-supervised or IV–D agency supervised- 
employment programs for noncustodial parents who 
have barriers to employment and a history of non-
payment of child support obligations, as determined 
by a court or the IV–D agency, and who are deter-
mined by the court or agency to be in need of em-
ployment services or placement in order to pay such 
child support obligations. A noncustodial parent de-
scribed in the preceding sentence who is an ex-of-
fender shall be eligible to participate in a program 
established under this subsection. 
(2) REQUIREMENTS.— 
(A) OPTION
TO
PARTICIPATE
PRIOR
TO 
CONTEMPT FINDING.—A State shall not be eli-
gible to receive a grant under this subsection 
unless any program established with funds 
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made available under the grant provides non-
custodial parents described in paragraph (1) 
with an option to participate in the program 
prior to the court or agency entering a finding 
that the noncustodial parent is in contempt for 
failure to pay a child support obligation and, 
potentially subject to criminal penalties. 
(B) PROGRAM
GOALS.—An employment 
program established with funds made available 
under a grant awarded under this subsection 
shall be designed to do the following: 
(i) To assist noncustodial parents de-
scribed in paragraph (1) obtain and main-
tain unsubsidized employment. 
(ii) To increase the amount of finan-
cial support received by children. 
(iii) To help noncustodial parents de-
scribed in paragraph (1) improve relation-
ships with their children and their chil-
dren’s custodial parent. 
(C) 6 MONTHS OF CONTINUOUS, TIMELY 
PAYMENTS.—An employment program estab-
lished with funds made available under this 
subsection shall not permit a noncustodial par-
ent placed in the program to graduate from the 
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program and avoid penalties for failure to pay 
a child support obligation until the noncustodial 
parent completes at least 6 months of contin-
uous, timely payment of the parent’s child sup-
port obligations. 
(D) USE OF FUNDS.— 
(i) Services provided under an employ-
ment program established with funds made 
available under a grant made under this 
subsection must include the following: 
(I) Job placement, including job 
development and supervised job search 
as necessary. 
(II) Case management, including 
educational assessment and advising, 
vocational assessment and career ex-
ploration services, and court liaison 
services. 
(III) Counseling on responsible 
parenthood. 
(IV) Referral for support and 
educational services. 
(V) Employment retention serv-
ices. 
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(ii) Services provided under an em-
ployment program established with funds 
made available under a grant made under 
this subsection may include the following: 
(I) Remedial education services 
or educational referral. 
(II) Support funds for services 
such as transportation, child care, or 
short-term training. 
(III) Transitional jobs programs. 
(IV) Public-private career path-
way partnerships established in ac-
cordance with subsection (b)(2). 
(V) Occupational skill training, 
including college credit programs. 
(VI) Curricula development. 
(E) ADMINISTRATION.—A State that re-
ceives a grant under this subsection may con-
tract with a public or private nonprofit organi-
zation, including a faith-based or community- 
based organization, to administer (in conjunc-
tion with the court of jurisdiction or the IV–D 
agency) the court-supervised or IV–D agency- 
supervised employment program. 
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(b) TRANSITIONAL
JOBS
AND
PUBLIC-PRIVATE 
PARTNERSHIP GRANTS.—The Secretary of Labor shall 
award grant to States to conduct demonstration projects 
to carry out one or more of the projects described in para-
graphs (1) and (2). 
(1) TRANSITIONAL JOBS GRANTS.— 
(A) IN GENERAL.—The Secretary of Labor 
may award grants under this subsection to es-
tablish and expand transitional jobs programs 
for eligible individuals, including such programs 
conducted by local governments, State employ-
ment agencies, nonprofit organizations, and 
faith-based or community-based organizations 
or intermediaries, that— 
(i) combine time-limited employment 
in transitional jobs that may be subsidized 
with public funds, with activities that pro-
mote skill development and remove barriers 
to employment, such as case management 
services and education, training, child sup-
port-related services, and other activities, 
pursuant to individual plans; and 
(ii) provide such individuals with— 
(I) transitional jobs placements 
and job placement assistance, to help 
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the individuals make the transition 
from subsidized employment in transi-
tional jobs to stable unsubsidized em-
ployment; and 
(II) retention services after the 
transition to unsubsidized employ-
ment. 
(B) ELIGIBLE
INDIVIDUALS.—For pur-
poses of this paragraph, the term ‘‘eligible indi-
viduals’’ means individuals within any of the 
following categories of disproportionately chron-
ically unemployed individuals: 
(i) Individuals who have attained age 
16, but not attained age 36, and who have 
documented barriers to employment such 
as lack of a high school diploma, limited 
English proficiency, aging out of foster 
care, or offender status, particularly such 
individuals who are parents or expectant 
parents. 
(ii) Formerly incarcerated individuals. 
(iii) Homeless or formerly homeless 
individuals. 
(iv) Individuals with disabilities. 
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(v) Individuals designated by a court 
or the IV–D agency to participate in tran-
sitional jobs programs. 
(C) LIMITATIONS ON USE OF FUNDS.— 
(i) ALLOWABLE ACTIVITIES.—A State 
that receives a grant under this paragraph 
(or a subgrantee of such State) (referred 
to in this paragraph as the ‘‘program oper-
ator’’) shall use the funds made available 
under the grant to operate a transitional 
jobs program for eligible individuals con-
sistent with the following requirements: 
(I) JOBS.—The program oper-
ator shall place eligible individuals in 
temporary jobs, the incomes from 
which may be subsidized in whole or 
in part with public funds. An eligible 
individual placed in such a job (re-
ferred to in this paragraph as ‘‘a par-
ticipant’’) shall perform work directly 
for the program operator or another 
public, nonprofit, or private sector or-
ganization (which operator or organi-
zation may be referred to in this para-
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graph as a ‘‘worksite employer’’) with-
in the community involved. 
(II) HOURS.— 
(aa) IN GENERAL.—Subject 
to item (bb), the transitional jobs 
program shall provide a partici-
pant with not less than 30, and 
not more than 40, hours per 
week of a combination of paid 
employment and the services de-
scribed in subclauses (III), (IV), 
and (V). 
(bb) ACCOMMODATION
OF 
SPECIAL
CIRCUMSTANCES.—The 
number of hours per week re-
quired under item (aa) may be 
adjusted in the case of a partici-
pant who requires a modified 
work week to accommodate spe-
cial circumstances. 
(III) JOB
PREPARATION
AND 
SERVICES.—The 
program 
operator 
shall— 
(aa) develop an individual 
plan for each participant, which 
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shall contain a goal that focuses 
on preparation of the participant 
for unsubsidized jobs in demand 
in the local economy that offer 
the potential for advancement 
and growth (including increases 
in wages and benefits); 
(bb) 
develop 
transitional 
jobs placements for participants 
that will best prepare them for 
jobs described in item (aa) or 
participation in the public-private 
career pathway partnerships es-
tablished 
in 
accordance 
with 
paragraph (2); and 
(cc) provide case manage-
ment services and ensure that 
appropriate education, training, 
and other activities are available 
to participants, consistent with 
each 
participant’s 
individual 
plan. 
(IV) JOB
PLACEMENT
ASSIST-
ANCE
AND
RETENTION
SERVICES.— 
The program operator shall provide 
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job placement assistance to help par-
ticipants obtain unsubsidized employ-
ment and shall provide retention serv-
ices to the participants for a minimum 
of 6 months after entry into the un-
subsidized employment. 
(V) EDUCATION OR TRAINING.— 
In any workweek in which a partici-
pant is scheduled to work at least 30 
hours in the program, not less than 
20 percent of the scheduled hours and 
not more than 50 percent of the 
scheduled hours shall involve partici-
pation in— 
(aa) education or training 
activities designed to improve the 
participant’s employability and 
potential earnings; 
(bb) other activities designed 
to reduce or eliminate any bar-
riers that may impede the par-
ticipant’s ability to secure and 
advance in unsubsidized employ-
ment; or 
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(cc) activities designed to 
promote financial literacy and the 
use of products and services that 
increase personal savings and 
build financial assets for family 
support, education, homeowner-
ship, and retirement. 
(VI) DURATION.— 
(aa) IN GENERAL.—Subject 
to item (bb), the duration of any 
placement in the program shall 
be for a minimum period of 3 
consecutive months. 
(bb) 
MONTH
EXTEN-
SION.—A 
program 
placement 
may be extended for up to 2 ad-
ditional consecutive 3-month pe-
riods upon the conclusion of the 
original 3-month placement pe-
riod if such extension would be 
consistent with the individual’s 
plan for transition to unsub-
sidized employment. 
(VII) SUPERVISION.—The work-
site employer or program operator 
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(E) DEFINITIONS.—In this paragraph: 
(i) ADULT
EDUCATION.—The term 
‘‘adult education’’ has the meaning given 
that term in section 203 of the Workforce 
Investment Act of 1998 (20 U.S.C. 9202). 
(ii) CAREER
PATHWAY.—The term 
‘‘career pathway’’ means a linked set of 
workforce education and job opportunities 
within a specific industry sector, or for an 
occupational sector that cuts across mul-
tiple business and industry sectors, which 
begins at the lowest skill and English lan-
guage levels, and extends through for-cred-
it college opportunities such as earning rel-
evant associate or bachelor’s degrees, and 
prepares individuals for advancement in 
jobs in demand in the local or regional 
labor market. 
(iii) COMMUNITY-BASED PROVIDER.— 
The term ‘‘community-based provider’’ 
means a not-for-profit organization, with 
local boards of directors, that directly pro-
vides workforce education services. 
(iv) INSTITUTION
OF
HIGHER
EDU-
CATION.—The term ‘‘institution of higher 
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education’’ has the meaning given that 
term in section 101 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001). 
(v) CHARTER
SCHOOL.—The term 
‘‘charter school’’ has the meaning given 
that term in section 5210 of the Elemen-
tary and Secondary Education Act of 1965 
(20 U.S.C. 7221i). 
(vi) AREA
VOCATIONAL
EDUCATION 
SCHOOL.—The term ‘‘area vocational and 
technical education school’’ has the mean-
ing given that term in section 3 of the Carl 
D. Perkins Vocational and Technical Edu-
cation Act of 1998 (20 U.S.C. 2302). 
(vii) DISADVANTAGED
WORKERS.— 
The term ‘‘disadvantaged workers’’ means 
unemployed 
individuals 
in 
low-income 
households or employed individuals in low- 
income households with wages at or below 
2⁄3 of the median wage for the State or re-
gion applying for the grant. 
(viii) CAREER
PATHWAY
PARTNER-
SHIP.—The term ‘‘career pathway partner-
ship’’ means collaborations of 1 or more 
workforce education providers, 1 or more 
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employers, 1 or more labor organizations, 
where applicable, as a result of such orga-
nization’s representation of employees at 
the worksite who have skills in which the 
training or employment programs are pro-
posed, and may include optional additional 
entities as needed to provide a comprehen-
sive range of workforce education and an-
cillary support services. 
(ix) WORKFORCE
EDUCATION.—The 
term ‘‘workforce education’’ means a set of 
career guidance and exploration services, 
adult education and English language serv-
ices, job training, registered apprenticeship 
programs, and credit and non-credit post-
secondary education services aimed at pre-
paring individuals to enter and sustain em-
ployment in specific occupations and to 
have the sufficient skills to respond to 
shifting employment opportunities. 
(x) WORKFORCE
EDUCATION
PRO-
VIDER.—The term ‘‘workforce education 
provider’’ means community-based pro-
viders, institutions of higher education, 
area vocational and technical education 
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schools, charter schools, and other public 
nonprofit entities that have a demonstrated 
capacity to provide quality workforce edu-
cation services. 
(c) MATCHING REQUIREMENT.— 
(1) IN GENERAL .—The Secretary of Health 
and Human Services and the Secretary of Labor 
may not award a grant to a State under this section 
unless the State agrees that, with respect to the 
costs to be incurred by the State in conducting a 
demonstration project with funds provided under the 
grant, the State will make available non-Federal 
contributions in an amount equal to 10 percent of 
the amount of Federal funds paid to the State under 
such grant. 
(2) NON-FEDERAL
CONTRIBUTIONS.—In this 
subsection, the term ‘‘non-Federal contributions’’ in-
cludes contributions by the State and by public and 
private entities that may be in cash or in kind, but 
does not include any amounts provided by the Fed-
eral Government, or services assisted or subsidized 
to any significant extent by the Federal Government, 
or any amount expended by a State before October 
1, 2007. 
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(d) WORKER PROTECTIONS
AND LABOR STAND-
ARDS.— 
(1) RATE
OF
PAY; BENEFITS
AND
WORKING 
CONDITIONS.— 
(A) IN GENERAL.—A worksite employer of 
a participant in a program or activity funded 
under this section shall pay the participant at 
the rate paid to employees of the worksite em-
ployer who are not participants in such pro-
gram or activity and who perform comparable 
work at the worksite, including periodic in-
creases where appropriate. If no other employ-
ees of the worksite employer perform com-
parable work at the worksite, the worksite em-
ployer shall pay the participant not less than 
the applicable Federal or State minium wage, 
whichever is higher. 
(B) BENEFITS AND CONDITIONS.—An in-
dividual employed through participation in a 
program or activity funded under this section 
shall be provided with benefits and working 
conditions at the same level and to the same ex-
tent as such benefits and conditions are pro-
vided to other employees of the employer of the 
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individual who have worked a similar length of 
time and perform the same work 
(2) NONDUPLICATION.— 
(A) 
IN
GENERAL.—Funds 
provided 
through a grant made under this paragraph 
shall be used only for a program or activity that 
does not duplicate, and is in addition to, a pro-
gram or activity otherwise available in the local-
ity of the program or activity funded under this 
section. 
(B) PRIVATE, NONPROFIT ENTITY.—Funds 
provided through a grant made under this sec-
tion shall not be provided to a private nonprofit 
entity to conduct programs or activities that are 
the same as or substantially equivalent to ac-
tivities provided by a State or local government 
agency in the area in which such entity is lo-
cated, unless the requirements of paragraph (3) 
are met. 
(3) NONDISPLACEMENT.— 
(A) IN
GENERAL.—A worksite employer 
shall not displace an employee or position (in-
cluding partial displacement such as reduction 
in hours, wages, or employment benefits) or im-
pair contracts for services or collective bar-
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ployee who recently resigned or was dis-
charged, who is subject to a reduction in 
force, who has recall rights pursuant to a 
collective bargaining agreement or applica-
ble personnel procedures, who is on leave 
(such as terminal, temporary, vacation, 
emergency, or sick leave), who is on strike, 
or who is being locked out. 
(D) CONCURRENCE OF LOCAL LABOR OR-
GANIZATION.—No placement shall be made 
under a program or activity funded under this 
section until the entity conducting the program 
or activity has obtained the written concurrence 
of any local labor organization representing em-
ployees who are engaged in the same or sub-
stantially similar work as that proposed to be 
carried out for the worksite employer with 
whom a participant is to be placed under the 
program or activity. 
(4) NO
IMPACT
ON
UNION
ORGANIZING.—A 
State conducting a demonstration project funded 
under this section and any entity conducting a pro-
gram or activity funded under this section shall pro-
vide the Secretary with a certified assurance that 
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none of such funds shall be used to assist or deter 
union organizing. 
(5) ACCOUNTABILITY.— 
(A) IN GENERAL.—Funds provided under 
this section shall not be used to subsidize train-
ing or employment with an employer that has 
a demonstrable record of noncompliance with 
Federal labor, civil rights, workplace safety, or 
related laws. 
(B) CERTIFIED SATISFACTORY RECORD.— 
Employers who receive training or wage sub-
sidies under programs or activities funded 
under this section shall have a satisfactory 
record in labor relations and employment prac-
tices, as certified by the Secretary of Labor. 
(C) APPLICATION
OF
WORKER
PROTEC-
TION LAWS.—A participant in a program or ac-
tivity funded under this section shall be consid-
ered to be an employee of any employer that 
the participant is placed with for all purposes 
under Federal and State law, including laws re-
lating to health and safety, civil rights, and 
worker’s compensation. 
(D) OTHER JOB QUALITY STANDARDS.— 
Employers who receive training or wage sub-
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sidies under programs or activities funded 
under this section shall meet all applicable 
State or local job or employer quality standards 
regarding such issues as wages, benefits, ad-
vancement opportunities, and turnover rates es-
tablished for programs funded under the Work-
force Investment Act of 1998 (29 U.S.C. 2801 
et seq.). 
(6) GRIEVANCE PROCEDURE.—An entity con-
ducting a program or activity funded under this sec-
tion shall establish and maintain a procedure for the 
filing and adjudication of grievances by employees of 
worksite employers who are not participants in the 
program, or such employees’ representatives, or by 
participants in such a program or activity alleging a 
violation of a provision of this subsection that is 
similar to the grievance procedure established by a 
State for purposes of section 407(f)(3) of the Social 
Security Act (42 U.S.C. 607(f)(3)). 
(7) NONPREEMPTION
OF
STATE
LAW.—The 
provisions of this subsection shall not be construed 
to preempt any provision of State law that affords 
greater protections to employees or participants than 
are afforded by this subsection. 
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(8) TREATMENT OF AMOUNTS PAID TO PAR-
TICIPANTS.—Amounts paid to a participant in a 
program or activity funded under this section shall 
be— 
(A) considered earned income for purpose 
of determining the participant’s eligibility for 
the child tax credit established under section 24 
of the Internal Revenue Code of 1986, the 
earned income tax credit established under sec-
tion 32 of such Code, and any other tax benefit 
established under such Code the eligibility for 
which is based on earned income; and 
(B) disregarded for purposes of deter-
mining the participant’s, the participant’s fam-
ily’s, or the participant’s household’s eligibility 
for, or amount of, assistance or benefits pro-
vided under any means-tested program funded 
in whole or in part with Federal funds. 
(e) APPLICATION.— 
(1) REQUIREMENTS FOR ALL APPLICATIONS.— 
(A) IN GENERAL.—A State desiring to re-
ceive a grant to conduct a demonstration 
project under this section shall submit an appli-
cation— 
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(i) to the Secretary of Health and 
Human Services, in the case of a grant 
under subsection (a); or 
(ii) to the Secretary of Labor, in the 
case of a grant under subsection (b); 
at such time, in such manner, and containing 
such information or assurances as the Secretary 
of Health and Human Services or the Secretary 
of Labor, as appropriate, may require. 
(B) COMPLIANCE WITH WORKER PROTEC-
TIONS AND LABOR STANDARDS.—The applica-
tion shall include an assurance that the State 
and any entity conducting a program or activity 
under the project shall comply with the worker 
protections and labor standards established in 
accordance with such protections under sub-
section (d), 
(C) NONDISCRIMINATION.—The applica-
tion shall include an assurance that the State 
and any entity conducting a program or activity 
under the demonstration project shall comply 
with section 188(a)(2) of the Workforce Invest-
ment Act of 1998 (29 U.S.C. 2938(a)(2)) to 
the same extent that such section would apply 
to the entity if the program or activity con-
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ducted under the demonstration project was 
considered to be funded or otherwise financially 
assisted under that Act. 
(D) ASSURANCE
GRANT
WILL
SUPPLE-
MENT, NOT SUPPLANT, OTHER STATE FUND-
ING.—The application shall include an assur-
ance from the chief executive officer of the 
State that funds made available under the 
grant will supplement, and not supplant, other 
funds used by the State to establish or support 
employment placements for low-income parents. 
(2) SPECIFIC
DEMONSTRATION
PROJECT
RE-
QUIREMENTS.— 
(A) COURT–SUPERVISED OR IV–D AGENCY– 
SUPERVISED
EMPLOYMENT
PROGRAMS
FOR 
NONCUSTODIAL PARENTS.—In order to conduct 
a demonstration project described in subsection 
(a), a State shall include in the application sub-
mitted to the Secretary of Health and Human 
Services the following: 
(i) Evidence of an agreement between 
the State and 1 or more counties to estab-
lish an employment program that meets 
the requirements of subsection (a). 
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Labor determines would be inappropriate to apply to 
the Indian tribe or tribal organization, taking into 
account the resources, needs, and other cir-
cumstances of the Indian tribe or tribal organiza-
tion. 
(f) PRIORITIES AND REQUIREMENTS FOR AWARDING 
GRANTS.— 
(1) IN GENERAL.—Subject to paragraphs (2) 
and (3), the Secretary of Health and Human Serv-
ices (in the case of a grant under subsection (a)) 
and the Secretary of Labor (in the case of a grant 
under subsection (b)) shall give priority to making 
grants under this section to entities that— 
(A) demonstrate success with respect to 
meeting the goals of quality job placement, 
long-term unsubsidized job retention, and, 
where applicable, increasing child support pay-
ments, decreasing unpaid child support arrear-
ages, and increasing the involvement of low-in-
come noncustodial parents with their children 
through their participation in responsible fa-
therhood activities, including participation in 
programs that provide culturally-relevant cur-
ricula in core subjects including— 
(i) conducting activities with children; 
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(ii) improving communication skills; 
(iii) child support management; 
(iv) providing financially for the fam-
ily’s security and wellbeing; 
(v) managing stress and anger; 
(vi) maintaining physical and mental 
health; 
(vii) parenting and relationship skills; 
(viii) child development; and 
(ix) barriers to responsible parent-
hood, including substance abuse, unem-
ployment, criminal justice system involve-
ment, and inadequate housing; and 
(B) coordinate with, and link individuals 
as applicable to, other public and private bene-
fits and employment services for low-income 
adults among the different systems or programs 
in which such adults are involved, including the 
criminal justice system, the State programs 
funded under each part of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.) (including 
programs and activities funded under section 
403(a)(2) of the Social Security Act (42 U.S.C. 
603(a)(2)), educational assistance and student 
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aid programs, and job training or employment 
programs, including State employment agencies. 
(2) PERFORMANCE
MEASURES.—In making 
grants under this section, the Secretary of Health 
and Human Services (in the case of a grant under 
subsection (a)) and the Secretary of Labor (in the 
case of a grant under subsection (b)) shall ensure 
that grantees demonstrate a plan for implementing 
measures to track their performance with respect to 
meeting the goals of quality job placement, long- 
term unsubsidized job retention, and, where applica-
ble, increasing child support payments, decreasing 
child support arrearages, and increasing the involve-
ment of low-income noncustodial parents with their 
children. 
(3) REFLECTIVE OF TARGET POPULATIONS.— 
In making grants under this section, the Secretary 
of Health and Human Services (in the case of a 
grant under subsection (a)) and the Secretary of 
Labor (in the case of a grant under subsection (b)) 
shall give priority to States with proposed dem-
onstration projects that are designed to target low- 
income adults, including custodial and noncustodial 
parents, and low-income married couples. 
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(4) SUBSTANTIAL FUNDING FOR EACH OF THE 
PURPOSES.—In making grants under subsection (b), 
the Secretary of Labor shall ensure that a substan-
tial share of the amount appropriated under sub-
section (j) for a fiscal year is used for carrying out 
each of the projects described in paragraphs (1) and 
(2) of subsection (b). 
(g) REGULATORY AND POLICY FLEXIBILITY.—The 
Secretary of Labor and the Secretary of Health and 
Human Services, in coordination with the Secretary of 
Education and the Attorney General, shall work with 
grantees under this section to resolve policy barriers that 
may impede blending of federal resources to support these 
demonstration projects. 
(h) EVALUATION.—The Secretary of Health and 
Human Services (in the case of a grant under subsection 
(a)) and the Secretary of Labor (in the case of a grant 
under subsection (b)) shall provide for an independent and 
rigorous evaluation of the demonstration projects con-
ducted under this section that includes, to the maximum 
extent feasible, random assignment or other appropriate 
statistical techniques, in order to assess the effectiveness 
of the projects. 
(i) GENERAL DEFINITIONS.—In this section: 
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(1) STATE.—The term ‘‘State’’ means each of 
the 50 States, the District of Columbia, the Com-
monwealth of Puerto Rico, the United States Virgin 
Islands, Guam, American Samoa, and includes an 
Indian tribe or tribal organization. 
(2) IV–D AGENCY.—The term ‘‘IV–D agency’’ 
means the State or local agency responsible for ad-
ministering the State program established under 
part D of title IV of the Social Security Act (42 
U.S.C. 651 et seq.). 
(3) INDIAN
TRIBE; TRIBAL
ORGANIZATION.— 
The terms ‘‘Indian tribe’’ and ‘‘tribal organization’’ 
have the meaning given such terms in section 4 of 
the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b). 
(j) APPROPRIATION.—Out of any money in the 
Treasury of the United States not otherwise appropriated, 
there are appropriated to carry out this section— 
(1) for programs administered by the Secretary 
of Health and Human Services under subsection (a), 
$15,000,000 for each of fiscal years 2008 through 
2010; and 
(2) for programs administered by the Secretary 
of Labor under subsection (b), $35,000,000 for each 
of fiscal years 2008 through 2010. 
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SEC. 107. STATE ASSESSMENTS OF BARRIERS TO EMPLOY-
MENT AND FINANCIAL SUPPORT OF CHIL-
DREN. 
(a) STATE ASSESSMENTS AND REPORTS.—As a con-
dition of the continued approval of a State plan under part 
D of title IV of the Social Security Act (42 U.S.C. 651 
et seq.), each State with an approved such plan, acting 
through the appropriate State agencies, shall assess the 
State policies with respect to the issues described in sub-
section (b) and submit a report to the Secretary of Health 
and Human Services on the results of such assessment 
not later than March 15, 2008. 
(b) ISSUES DESCRIBED.—For purposes of subsection 
(a), the issues described in this subsection are the fol-
lowing: 
(1) The process of setting and modifying child 
support obligations, particularly with respect to low- 
income parents, including— 
(A) the role and criteria for using imputed 
income in determining child support obligations; 
(B) the process of modifying obligations; 
(C) the consideration of income and em-
ployment status, including efforts to identify 
unreported income; 
(D) the consideration of incarceration; 
(E) the consideration of disability; 
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(F) the treatment of arrearages, including 
interest charged, and laws or procedures that 
interfere with forgiveness, adjustment, waiver, 
or compromise of arrears owed to the State by 
low-income noncustodial parents who lack suffi-
cient ability to pay such arrearages; 
(G) the procedures related to retroactive 
support; and 
(H) State pass-through and disregard poli-
cies for recipients of means tested public bene-
fits. 
(2) The impact of state criminal laws and law 
enforcement practices on the employment acquisi-
tion, retention, and advancement prospects of indi-
viduals following arrest, conviction, or incarceration, 
including— 
(A) any efforts, including counseling or 
employment support, to assist ex-prisoners with 
reentry to a community and successful reunifi-
cation with their families; and 
(B) an assessment of any efforts to seal or 
expunge arrest and conviction records and any 
efforts to grant certificates or other acknowl-
edgments of rehabilitation to ex-prisoners, and 
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to examine State occupational licensing and cer-
tification procedures. 
(3) An assessment of the impact of debt on em-
ployment retention, including child support and non- 
child support debts imposed to recover costs related 
to welfare and criminal justice. 
(4) An assessment of State practices related to 
providing prisoners and ex-prisoners with valid iden-
tification documents upon release from prison. 
(5) Identification of any other barriers to 
healthy family formation or sustainable economic op-
portunity for custodial and noncustodial parents that 
are created or exacerbated by Federal or State laws, 
policies, or procedures, including an examination of 
the rules of Federal and State means-tested pro-
grams, the operation of the State workforce system, 
the availability of financial education services, and 
the availability of domestic violence services and 
child support procedures to help victims of domestic 
violence stay safe and obtain the child support they 
are owed. 
(c) GRANTS TO STATES FOR COMMISSIONS ON STATE 
LAW IMPROVEMENTS IN THE BEST INTEREST OF CHIL-
DREN
AND FAMILIES.—The Secretary of Health and 
Human Services shall award grants to States to establish 
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or support commissions to review the State assessment 
conducted in accordance with subsection (a) and to make 
recommendations on ways to improve State law in the best 
interest of children and families. 
(d) APPROPRIATIONS.—Out of any money in the 
Treasury of the United States not otherwise appropriated, 
there are appropriated to the Secretary of Health and 
Human Services for the period of fiscal years 2008 
through 2009, $3,000,000, to remain available until ex-
pended, for the purpose of making— 
(1) payments to States to offset all or a portion 
of the costs of conducting the State assessments and 
reports required under subsection (a); and 
(2) grants to States under subsection (c). 
SEC. 108. COLLECTION OF CHILD SUPPORT UNDER THE 
FOOD STAMP PROGRAM. 
(a) ENCOURAGEMENT OF COLLECTION OF CHILD 
SUPPORT.—Section 5 of the Food Stamp Act of 1977 (7 
U.S.C. 2014) is amended— 
(1) in subsection (e)— 
(A) by redesignating paragraphs (5) and 
(6) as paragraphs (6) and (7), respectively; 
(B) in paragraph (4)(B), by striking 
‘‘paragraph (6)’’ and inserting ‘‘paragraph 
(7)’’; and 
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(C) by inserting after paragraph (4) the 
following: 
‘‘(5) DEDUCTION
FOR
CHILD
SUPPORT
RE-
CEIVED.— 
‘‘(A) IN GENERAL.—A household shall be 
allowed a deduction of 20 percent of all legally 
obligated child support payments received from 
an identified or putative parent of a child in the 
household if that parent is not a household 
member. 
‘‘(B) ORDER
OF
DETERMINING
DEDUC-
TIONS.—A deduction under this paragraph shall 
be determined before the computation of the ex-
cess shelter deduction under paragraph (7).’’; 
and 
(2) in subsection (k)(4)(B), by striking ‘‘sub-
section (e)(6)’’ and inserting ‘‘subsection (e)(7)’’; 
(b) SIMPLIFIED VERIFICATION OF CHILD SUPPORT 
PAYMENTS.—Section 5(n) of the Food Stamp Act of 1977 
(7 U.S.C. 2014(n)) is amended— 
(1) in the subsection heading, by striking 
‘‘STATE
OPTIONS
TO
SIMPLIFY’’, and inserting 
‘‘SIMPLIFIED’’; and 
(2) by striking ‘‘Regardless of whether’’ and in-
serting the following: 
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‘‘(1) IN GENERAL.—A household that is paying 
legally obligated child support through the program 
under part D of title IV of the Social Security Act 
(42 U.S.C. 651 et seq.) shall receive— 
‘‘(A) a deduction under subsection (e)(4); 
or 
‘‘(B) an exclusion for paid child support 
under subsection (d)(3). 
‘‘(2) STATE OPTIONS.—Regardless of whether’’. 
(c) INCLUSION OF ECONOMIC OPPORTUNITIES PRO-
GRAMS
IN DEFINITION
OF WORK PROGRAM.—Section 
6(o)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(o)(2)) is amended— 
(1) in subparagraph (C), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (D), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(E) participate in and comply with the re-
quirements of a demonstration project under 
section 106 of the Responsible Fatherhood and 
Healthy Families Act of 2007;’’. 
(d) EFFECTIVE DATE.— 
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