SEC. 2. DEMONSTRATION PROJECTS TO SUPPORT SUB-
SIDIZED EMPLOYMENT FOR TANF RECIPI-
ENTS. 
Section 403 of the Social Security Act (42 U.S.C. 
603) is amended by adding at the end the following: 
‘‘(c) SUBSIDIZED EMPLOYMENT DEMONSTRATION 
PROJECTS.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
grants to States to conduct demonstration projects 
designed to implement and evaluate strategies that 
provide wage subsidies to enable low-income individ-
uals to enter into and retain employment. 
‘‘(2) APPLICATION REQUIREMENTS.—The Sec-
retary shall require each State that applies for a 
grant under this subsection to do the following: 
‘‘(A) Describe how wage subsidies will be 
provided (such as whether paid directly to the 
employer or the individual), the duration of the 
subsidies, the amount of the subsidies, the 
structure of the subsidies, and how employers 
will be recruited to participate in the subsidized 
employment program. 
‘‘(B) Describe how the State expects those 
participating in subsidized employment to be 
able to retain employment after the subsidy 
ends. 
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‘‘(C) Describe how the State will coordi-
nate subsidized employment funded under this 
subsection with other efforts to help low-income 
individuals enter work as conducted by the 
State. 
‘‘(3) USE OF FUNDS.— 
‘‘(A) IN GENERAL.—A State to which a 
grant is made under this subsection may use 
the grant to subsidize the wages of an eligible 
recipient for a period not exceeding 12 months, 
and only to the extent that the total of the 
funds paid under this project and any other 
Federal funds so used with respect to the re-
cipient does not exceed 50 percent of the 
amount of the wages received by the recipient 
during the period. 
‘‘(B) ELIGIBLE RECIPIENT.—For purposes 
of subparagraph (A), an eligible recipient is— 
‘‘(i)(I) a recipient of assistance under 
the State program funded under this part 
or any other State program funded with 
qualified State expenditures (as defined in 
section 409(a)(7)(B)(i)); or 
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‘‘(II) a noncustodial parent of a minor 
child who is receiving assistance referred to 
in subclause (I); 
‘‘(ii) who, at the time the subsidy be-
gins, is unemployed; and 
‘‘(iii) whose income, at that time, is 
less than 200 percent of the poverty line 
(as defined by the Office of Management 
and Budget, and revised annually in ac-
cordance with section 673(2) of the Omni-
bus Budget Reconciliation Act of 1981 (42 
U.S.C. 9902(2))). 
‘‘(4) LIMITATIONS.— 
‘‘(A) NONDISPLACEMENT.—A State to 
which a grant is made under this subsection 
shall ensure that no participant in a subsidized 
job program funded in whole or in part under 
this subsection is employed or assigned to a job 
under the program— 
‘‘(i) when any other individual is on 
layoff from the same or any substantially 
equivalent job; or 
‘‘(ii) if the employer has terminated 
the employment of any regular employee or 
otherwise caused an involuntary reduction 
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of its workforce in order to fill the vacancy 
so created with an adult described in para-
graph (1). 
‘‘(B) GRIEVANCE
PROCEDURE.—A State 
with a program funded under this subsection 
shall establish and maintain a grievance proce-
dure for resolving complaints of alleged viola-
tions of subparagraph (A). 
‘‘(C) NO
PREEMPTION.—Nothing in this 
paragraph shall preempt or supersede any pro-
vision of State or local law that provides greater 
protection for employees from displacement. 
‘‘(5) REPORTS.—As a condition of receiving 
funds under this subsection for a fiscal year, a State 
shall submit to the Secretary, within 6 months after 
the end of the fiscal year, a report that— 
‘‘(A) specifies, for each month of the fiscal 
year, the number of individuals whose employ-
ment is subsidized with these funds; 
‘‘(B) describes the structure of the State 
activities to use the funds to subsidize employ-
ment, including the amount and duration of the 
subsidies provided; 
‘‘(C) specifies the percentage of eligible re-
cipients who received a subsidy who are in un-
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subsidized employment during the second quar-
ter after the subsidy ended; 
‘‘(D) specifies the percentage of eligible re-
cipients who received a subsidy who are in un-
subsidized employment during the fourth quar-
ter after the subsidy ended; and 
‘‘(E) specifies the median earnings of eligi-
ble recipients who received a subsidy who are in 
unsubsidized employment during the second 
quarter after the subsidy ended. 
‘‘(6) EVALUATION.—The Secretary, in consulta-
tion with each State conducting a demonstration 
project, shall conduct a high-quality evaluation of 
the demonstration project, and may reserve funds 
made available under this subsection to conduct the 
evaluation in accordance with the following: 
‘‘(A) EVALUATOR
QUALIFICATIONS.—The 
Secretary may not enter into a contract with an 
evaluator unless the evaluator has demonstrated 
experience in conducting rigorous evaluations of 
program effectiveness including, where available 
and appropriate, well-implemented randomized 
controlled trials. 
‘‘(B) METHODOLOGIES TO BE USED.—The 
evaluation of a demonstration project shall use 
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experimental designs using random assignment 
or other reliable, evidence-based research meth-
odologies that allow for the strongest possible 
causal inferences when random assignment is 
not feasible. 
‘‘(C) PUBLIC DISCLOSURE.—The Secretary 
shall publish the results of the evaluation on the 
website of the Department of Health and 
Human Services in a location easily accessible 
by the public. 
‘‘(7) RECOMMENDATIONS TO CONGRESS.—The 
Secretary shall submit recommendations to the Con-
gress on how to increase the employment, retention, 
and advancement of individuals currently or for-
merly receiving assistance under a State program 
funded under this part or any other State program 
funded with qualified State expenditures (as defined 
in section 409(a)(7)(B)(i)). 
‘‘(8) FUNDING.—Of the amounts made avail-
able to carry out subsection (b) for fiscal year 2018, 
the Secretary shall reserve $100,000,000 to carry 
out this subsection. 
‘‘(9) USE
OF
CERTAIN
FUNDS
FOR
CAREER 
PATHWAYS PROGRAMS.—The Secretary shall use 15 
percent of the amounts reserved to carry out this 
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subsection, to fund programs that offer career path-
way (as defined in section 3(7) of the Workforce In-
novation and Opportunity Act) services. 
‘‘(10) AVAILABILITY OF FUNDS.—Funds pro-
vided to a State under this subsection in a fiscal 
year shall be expended by the State in the fiscal year 
or in the succeeding fiscal year.’’. 
SEC. 3. EFFECTIVE DATE. 
The amendment made by this Act shall take effect 
on October 1, 2017. 
Æ 
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