I
107TH CONGRESS
2D SESSION
H. R. 4092
To enhance the opportunities of needy families to achieve self-sufficiency
and access quality child care, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 9, 2002
Mr. MCKEON (for himself, Mr. BOEHNER, Mr. PETRI, Mr. HOEKSTRA, Mr.
GREENWOOD, Mr. UPTON, Mr. TANCREDO, Mr. DEMINT, Mr. ISAKSON,
Mr. KELLER, and Mr. CULBERSON) introduced the following bill; which
was referred to the Committee on Education and the Workforce, and in
addition to the Committee on Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To enhance the opportunities of needy families to achieve
self-sufficiency and access quality child care, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Working Toward Independence Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title.
TITLE I—TANF PROGRAM
Sec. 101. Work participation requirements.
Sec. 102. Universal engagement policy.
Sec. 103. Work-related performance objectives.
Sec. 104. Bonus to reward employment achievement.
TITLE II—AMENDMENTS TO THE CHILD CARE AND
DEVELOPMENT BLOCK GRANT ACT OF 1990
Sec. 201. Short title.
Sec. 202. Goals.
Sec. 203. Authorization of appropriations.
Sec. 204. Application and plan.
Sec. 205. Activities to improve the quality of child care.
Sec. 206. Definitions.
TITLE III—BROADENED WAIVER AUTHORITY
Sec. 301. State program demonstration projects.
TITLE VII—EFFECTIVE DATE
Sec. 401. Effective date.
TITLE I—TANF PROGRAM
SEC. 101. WORK PARTICIPATION REQUIREMENTS.
(a) IN GENERAL.—Section 407 of the Social Security
Act (42 U.S.C. 607) is amended by striking all that pre-
cedes subsection (b)(3) and inserting the following:
‘‘SEC. 407. WORK PARTICIPATION REQUIREMENTS.
‘‘(a) PARTICIPATION
RATE
REQUIREMENTS.—A
State to which a grant is made under section 403 for a
fiscal year shall achieve a minimum participation rate
equal to not less than—
‘‘(1) 50 percent for fiscal year 2003;
‘‘(2) 55 percent for fiscal year 2004;
‘‘(3) 60 percent for fiscal year 2005;
‘‘(4) 65 percent for fiscal year 2006; and
‘‘(5) 70 percent for fiscal year 2007 and each
succeeding fiscal year.
‘‘(b) CALCULATION OF PARTICIPATION RATES.—
‘‘(1) AVERAGE MONTHLY RATE.—For purposes
of subsection (a), the participation rate of a State
for a fiscal year is the average of the participation
rates of the State for each month in the fiscal year.
‘‘(2) MONTHLY PARTICIPATION RATES; INCOR-
PORATION OF 40-HOUR WORK WEEK STANDARD.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the participation rate of a State for
a month is—
‘‘(i) the total number of countable
hours (as defined in subsection (c)) with
respect to the counted families for the
State for the month; divided by
‘‘(ii) 160 multiplied by the number of
counted families for the State for the
month.
‘‘(B) COUNTED FAMILIES DEFINED.—
‘‘(i) IN GENERAL.—In subparagraph
(A), the term ‘counted family’ means, with
respect to a State and a month, a family
that includes a work-eligible individual and
that receives assistance in the month under
the State program funded under this part,
subject to clause (ii).
‘‘(ii) STATE
OPTION
TO
EXCLUDE
CERTAIN
FAMILIES.—At the option of a
State, the term ‘counted family’ shall not
include—
‘‘(I) a family in the first month
for which the family is a recipient of
assistance under the State program;
or
‘‘(II) a family in which the
youngest child has not attained 12
months of age, except to the extent
that the State, on a case-by-case
basis, has elected to permit or require
the family to engage in direct work
activities or other activities specified
by the State.
‘‘(iii) STATE OPTION TO INCLUDE IN-
DIVIDUALS RECEIVING ASSISTANCE UNDER
A
TRIBAL
FAMILY
ASSISTANCE
PLAN
OR
TRIBAL WORK PROGRAM.—At the option of
a State, the term ‘counted family’ may in-
clude families in the State that are receiv-
ing assistance under a tribal family assist-
ance plan approved under section 412 or
under a tribal work program to which
funds are provided under this part.
‘‘(C) WORK-ELIGIBLE
INDIVIDUAL
DE-
FINED.—In this section, the term ‘work-eligible
individual’ means an individual—
‘‘(i) who is married, or is a single
head of household; and
‘‘(ii) whose needs are (or, but for
sanctions under this part that have been in
effect for more than 3 months (whether or
not consecutive) in the preceding 12
months or under part D, would be) in-
cluded in determining the amount of cash
assistance to be provided to the family
under the State program funded under this
part.’’.
(b) REVISION OF CASELOAD REDUCTION CREDIT.—
Section 407(b)(3)(A)(ii) of such Act (42 U.S.C.
607(b)(3)(A)(ii)) is amended to read as follows:
‘‘(ii) the average monthly number of
families that received assistance under the
State program funded under this part
during—
‘‘(I) if the fiscal year is fiscal
year 2003, fiscal year 1996;
‘‘(II) if the fiscal year is fiscal
year 2004, fiscal year 1998;
‘‘(III) if the fiscal year is fiscal
year 2005, fiscal year 2001; or
‘‘(IV) if the fiscal year is fiscal
year 2006 or any succeeding fiscal
year, the then 4th preceding fiscal
year.’’.
(c) COUNTABLE HOURS.—Section 407 of such Act
(42 U.S.C. 607) is amended by striking subsections (c)
and (d) and inserting the following:
‘‘(c) COUNTABLE HOURS.—
‘‘(1) DEFINITION.—In subsection (b)(2), the
term ‘countable hours’ means, with respect to a fam-
ily for a month, the total number of hours in the
month in which any member of the family who is a
work-eligible individual is engaged in a direct work
activity or other activity specified by the State, sub-
ject to the other provisions of this subsection.
‘‘(2) LIMITATIONS.—Subject to such regula-
tions as the Secretary may prescribe:
‘‘(A) MINIMUM WEEKLY AVERAGE OF 24
HOURS
OF
DIRECT
WORK
ACTIVITIES
RE-
QUIRED.—If the work-eligible individuals in a
family are engaged in a direct work activity for
an average total of fewer than 24 hours per
week in a month, then the number of countable
hours with respect to the family for the month
shall be zero.
‘‘(B) MAXIMUM WEEKLY AVERAGE OF 16
HOURS OF OTHER ACTIVITIES.—An average of
not more than 16 hours per week of other ac-
tivities referred to in paragraph (1) may be
considered countable hours in a month with re-
spect to a family.
‘‘(3) SPECIAL RULES.—For purposes of para-
graph (1):
‘‘(A) PARTICIPATION
IN
QUALIFIED
AC-
TIVITIES.—
‘‘(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,
including a program meeting such stand-
ards and criteria as the State may specify
consistent with the purposes of this part,
such as—
‘‘(I) substance abuse counseling
or treatment;
‘‘(II) 
rehabilitation 
treatment
and services;
‘‘(III) work-related education or
training directed effectively at ena-
bling the family member to work; or
‘‘(IV) job search or job readiness
assistance.
‘‘(iii) LIMITATION.—Clause (i) may
not be applied to a family for more than
3 months in any period of 24 consecutive
months.
‘‘(B) SCHOOL
ATTENDANCE
BY
TEEN
HEAD OF HOUSEHOLD.—A family shall be con-
sidered 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 mar-
ried 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 ACTIVITIES.—In this section, the
term ‘direct work activities’ 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.
(d) PENALTIES
AGAINST
INDIVIDUALS.—Section
407(e) of such Act (42 U.S.C. 607(e)) is amended—
(1) in paragraph (1), in the matter that pre-
cedes subparagraph (A)—
(A) by striking ‘‘work’’ and inserting ‘‘ac-
tivities’’; and
(B) by inserting ‘‘and the family does not
otherwise engage in activities in accordance
with the self-sufficiency plan established for the
family pursuant to section 408(b) for the num-
ber of hours required by the self-sufficiency
plan,’’ before ‘‘the State shall’’; and
(2) in paragraph (2)—
(A) in the matter that precedes subpara-
graph (A), by striking ‘‘work’’ and inserting
‘‘activities’’; and
(B) in subparagraph (A), by striking
‘‘work’’ and inserting ‘‘activity’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 404(k)(1)(D) of such Act (42
U.S.C. 604(k)(1)(D)) is amended by striking ‘‘work
activities (as defined in section 407(d)’’ and insert-
ing ‘‘direct work activities’’.
(2) Section 407(b) of such Act (42 U.S.C.
607(b)) is amended by striking paragraphs (4) and
(5).
(3) Section 407(f) of such Act (42 U.S.C.
607(f)) is amended in each of paragraphs (1) and
(2) by striking ‘‘work activity described in subsection
(d)’’ and inserting ‘‘direct work activity’’.
(4) The heading of section 409(a)(14) of such
Act (42 U.S.C. 609(a)(14)) is amended by inserting
‘‘OR REFUSING TO ENGAGE IN ACTIVITIES UNDER A
FAMILY SELF-SUFFICIENCY PLAN’’ after ‘‘WORK’’.
SEC. 102. UNIVERSAL ENGAGEMENT POLICY.
(a) MODIFICATION
OF
STATE
PLAN
REQUIRE-
MENTS.—Section 402(a)(1)(A) of the Social Security Act
(42 U.S.C. 602(a)(1)(A)) is amended by striking clauses
(ii) and (iii) and inserting the following:
‘‘(ii) Require a parent or caretaker re-
ceiving assistance under the program to
engage in work and alternative self-suffi-
ciency activities (as defined by the State),
consistent with section 407(e)(2).
‘‘(iii) Require families receiving assist-
ance under the program to engage in ac-
tivities in accordance with family self-suffi-
ciency plans developed pursuant to section
408(b).’’.
(b) ESTABLISHMENT OF FAMILY SELF-SUFFICIENCY
PLANS.—Section 408(b) of such Act (42 U.S.C. 608(b))
is amended to read as follows:
‘‘(b) FAMILY SELF-SUFFICIENCY PLANS.—
‘‘(1) IN GENERAL.—A State to which a grant
is made under section 403 shall—
‘‘(A) establish for each family receiving as-
sistance under the State program funded under
this part a self-sufficiency plan that specifies
appropriate activities described in the State
plan submitted pursuant to section 402, includ-
ing direct work activities as appropriate de-
signed to assist the family in achieving their
maximum degree of self-sufficiency;
‘‘(B) require, at a minimum, each member
of the family who is a work eligible individual
(as defined in section 407(b)(2)(C)) to partici-
pate in activities in accordance with the self-
sufficiency plan;
‘‘(C) monitor the participation of such
family members in the activities and the
progress of the family toward self-sufficiency;
‘‘(D) regularly review the self-sufficiency
plan; and
‘‘(E) revise the self-sufficiency plan as ap-
propriate.
‘‘(2) TIMING.—The State shall comply with
paragraph (1) with respect to a family—
‘‘(A) in the case of a family that, as of Oc-
tober 1, 2002, is not receiving assistance from
the State program funded under this part, not
later than 60 days after the family first receives
assistance on the basis of the most recent appli-
cation for the assistance; or
‘‘(B) in the case of a family that, as of
such date, is receiving the assistance, not later
than 180 days after October 1, 2002.
‘‘(3) STATE DISCRETION.—A State shall have
sole discretion, consistent with section 407, to define
and design activities for families for purposes of this
subsection, and to develop methods for monitoring
and reviewing progress pursuant to this sub-
section.’’.
(c) PENALTY FOR FAILURE TO ESTABLISH FAMILY
SELF-SUFFICIENCY PLAN.—Section 409(a)(3) of such
Act (42 U.S.C. 609(a)(3)) is amended—
(1) in the paragraph heading, by inserting ‘‘OR
ESTABLISH FAMILY SELF-SUFFICIENCY PLAN’’ after
‘‘RATES’’; and
(2) in subparagraph (A), by inserting ‘‘or
408(b)’’ after ‘‘407(a)’’.
SEC. 103. WORK-RELATED PERFORMANCE OBJECTIVES.
(a) 
STATE
PLAN
MODIFICATIONS.—Section
402(a)(1) of the Social Security Act (42 U.S.C. 602(a)(1))
is amended—
(1) in subparagraph(A), by adding at the end
the following:
‘‘(vii) The document shall—
‘‘(I) describe how the State will
pursue ending dependence of needy
parents on government benefits by
promoting job preparation and work;
‘‘(II) include specific numerical
and measurable performance objec-
tives for accomplishing the purpose so
described, which shall include objec-
tives consistent with the criteria used
by the Secretary in establishing per-
formance 
targets 
under 
section
403(a)(4)(B) if available; and
‘‘(III) describe the methodology
that the State will use to measure
State performance in relation to each
such objective.
‘‘(viii) The document shall describe
any strategy and program the State may
be undertaking to address—
‘‘(I) employment retention and
advancement for recipients of assist-
ance under the State program funded
under this part, including placement
into high-demand jobs;
‘‘(II) services for struggling and
noncompliant families and clients with
special problems; and
‘‘(III) program integration, in-
cluding the extent to which TANF
employment and training services are
provided through the One-Stop Career
Center system created under the
Workforce Investment Act of 1998,
and the extent to which former recipi-
ents of such assistance have access to
additional core, intensive, or training
services funded through such Act.’’;
and
(2) in subparagraph (B), by striking clause (iv).
(b) REPORT ON ANNUAL ACHIEVEMENT OF PER-
FORMANCE GOALS.—Section 411 of such Act (42 U.S.C.
611) is amended by adding at the end the following:
‘‘(c) ANNUAL REPORT ON ACHIEVEMENT OF PER-
FORMANCE GOALS.—Beginning with fiscal year 2004, not
later than 3 months after the end of each fiscal year, each
eligible State shall submit to the Secretary a report on
achievement and improvement during the preceding fiscal
year under the numerical objectives referred to in section
402(a)(1)(A)(vii), using the measurement methodology de-
scribed in such section.’’.
(c) 
ANNUAL
RANKING
OF
STATES.—Section
413(d)(1) of such Act (42 U.S.C. 613(d)(1)) is amended
by striking ‘‘long-term private sector jobs’’ and inserting
‘‘private sector jobs, the success of the recipients in retain-
ing employment, the ability of the recipients to increase
their wages,’’.
(d) PERFORMANCE IMPROVEMENT.—Section 413 of
such Act (42 U.S.C. 613) is amended by adding at the
end the following:
‘‘(k) PERFORMANCE IMPROVEMENT.—The Secretary,
in consultation with States, shall develop uniform perform-
ance measures designed to assess the degree of effective-
ness, and the degree of improvement, of State programs
funded under this part in accomplishing the work-related
purposes of this part.’’.
SEC. 104. BONUS TO REWARD EMPLOYMENT ACHIEVE-
MENT.
Section 403(a)(4) of the Social Security Act (42
U.S.C. 603(a)(4)) is amended to read as follows:
‘‘(4) 
BONUS
TO
REWARD
EMPLOYMENT
ACHIEVEMENT.—
‘‘(A) IN
GENERAL.—The Secretary shall
make a grant in accordance with this paragraph
to each State for each bonus year for which the
State achieves or exceeds the employment per-
formance targets established for the State
under subparagraph (B) for the fiscal year that
precedes the bonus year.
‘‘(B) FORMULA
FOR
MEASURING
STATE
PERFORMANCE; 
EMPLOYMENT
PERFORMANCE
TARGETS.—
‘‘(i) Not later than 1 year after the
date of the enactment of this paragraph,
the Secretary, in consultation with States
and the Secretary of Labor, shall develop
a formula for measuring State perform-
ance with respect to employment entry, job
retention, and increased earnings from em-
ployment for families receiving assistance
under the State program funded under this
part.
‘‘(ii) The Secretary, in consultation
with a State, shall specify annual perform-
ance targets for each State with respect to
the objectives outlined in the formula de-
veloped under clause (i).
‘‘(C) AMOUNT OF GRANT.—
‘‘(i) IN GENERAL.—Subject to clause
(ii) of this subparagraph, the Secretary
shall determine the amount of the grant
payable under this paragraph to a State
for a bonus year referred to in subpara-
graph (A).
‘‘(ii) LIMITATIONS.—
‘‘(I) The amount payable to a
State under this paragraph for a
bonus year shall not exceed 5 percent
of the State family assistance grant.
‘‘(II) The average annual total
amount of grants made under this
paragraph for each bonus year shall
be $100,000,000.
‘‘(III) 
The 
total 
amount 
of
grants made under this paragraph for
all 
bonus 
years 
shall 
equal
$500,000,000.
‘‘(D) BONUS
YEAR
DEFINED.—In this
paragraph, the term ‘bonus year’ means each of
fiscal years 2004 through 2008.
‘‘(E) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
fiscal years 2004 through 2008 $500,000,000
for grants under this paragraph.
‘‘(F) SENSE OF THE CONGRESS.—It is the
sense of the Congress that in developing the
bonus to reward employment achievement under
this paragraph, the Secretary and States should
consult with the Secretary of Labor so that
measures for employment achievement under
State programs funded under this part are con-
sistent with the core indicators of performance
which States report under subclauses (I)
through (III) of section 136(b)(2)(A)(i) of the
Workforce Investment Act of 1998.’’.
TITLE II—AMENDMENTS TO THE
CHILD CARE AND DEVELOP-
MENT BLOCK GRANT ACT OF
1990
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Caring for Children
Act of 2002’’.
SEC. 202. GOALS.
Section 658A(b) of the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9801 note) is
amended—
(1) by amending subparagraph (D) to read as
follows:
‘‘(D) CONSUMER AND CHILD CARE PRO-
VIDER EDUCATION INFORMATION.—Certify that
the State will collect and disseminate, through
resource and referral services and other means
as determined by the State, to parents of eligi-
ble children, child care providers, and the gen-
eral public, information regarding—
‘‘(i) the promotion of informed child
care choices, including information about
the quality and availability of child care
services;
‘‘(ii) research and best practices on
children’s development, including early cog-
nitive development;
‘‘(iii) the availability of assistance to
obtain child care services; and
‘‘(iv) other programs for which fami-
lies that receive child care services for
which financial assistance is provided
under this subchapter may be eligible, in-
cluding the food stamp program, the WIC
program under section 17 of the Child Nu-
trition Act of 1966, the child and adult
care food program under section 17 of the
Richard B. Russell National School Lunch
Act, and the medicaid and CHIP programs
under titles XIX and XXI of the Social Se-
curity Act.’’, and
(2) by inserting after subparagraph (H) the fol-
lowing:
‘‘(I) COORDINATION WITH OTHER EARLY
CHILD CARE SERVICES AND EARLY CHILDHOOD
EDUCATION PROGRAMS.—Demonstrate how the
State is coordinating child care services pro-
vided under this subchapter with Head Start,
Early Reading First, Even Start, State pre-kin-
dergarten programs, and other early childhood
education programs to expand accessibility to
and continuity of care and early education.
‘‘(J) PUBLIC-PRIVATE
PARTNERSHIPS.—
Demonstrate how the State encourages partner-
ships with private and other public entities to
increase the supply and quality of child care
services.
‘‘(K) CHILD CARE SERVICE QUALITY.—
‘‘(i) CERTIFICATION.—For each fiscal
year after fiscal year 2003, certify that
during the then preceding fiscal year the
State was in compliance with section 658G
and describe how funds were used to com-
ply with such section during such pre-
ceding fiscal year.
‘‘(ii) STRATEGY.—For each fiscal year
after fiscal year 2003, contain an outline
of the strategy the State will implement
during such fiscal year for which the State
plan is submitted, to address the quality of
child care services in child care settings
that provide services for which assistance
is made available under this subchapter,
and include in such strategy—
‘‘(I) a statement specifying how
the State will address the activities
described in paragraphs (1), (2), and
(3) of section 658G;
‘‘(II) a description of quantifi-
able, objective measures for evaluating
the quality of child care services sepa-
rately with respect to the activities
listed in each of such paragraphs that
the State will use to evaluate its
progress in improving the quality of
such child care services;
‘‘(III) a list of State-developed
child care service quality targets for
such fiscal year quantified on the
basis of such measures; and
‘‘(IV) for each fiscal year after
fiscal year 2003, a report on the
progress made to achieve such targets
during the then preceding fiscal year.
‘‘(iii) RULE
OF
CONSTRUCTION.—
Nothing in this subparagraph shall be con-
strued to require that the State apply
measures for evaluating quality to specific
types of child care providers.
‘‘(L) ACCESS TO CARE FOR CERTAIN POPU-
LATIONS.—Demonstrate how the State is ad-
dressing the child care needs of parents eligible
for child care services for which financial assist-
ance is provided under this subchapter who
have children with special needs, work nontradi-
tional hours, or require child care services for
infants or toddlers.’’.
SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD
CARE.
Section 658G of the Child Care and Development
Block Grant Act of 1990 (42 U.S.C. 9858e) is amended
to read as follows:
‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF
CHILD CARE SERVICES.
‘‘A State that receives funds to carry out this sub-
chapter for a fiscal year, shall use not less than 4 percent
of the amount of such funds for activities provided
through resource and referral services or other means,
that are designed to improve the quality of child care serv-
ices for which financial assistance is made available under
this subchapter. Such activities include—
‘‘(1) programs that provide training, education,
and other professional development activities to en-
hance the skills of the child care workforce, includ-
ing training opportunities for caregivers in informal
care settings;
‘‘(2) activities within child care settings to en-
hance early learning for young children, to promote
early literacy, and to foster school readiness;
‘‘(3) initiatives to increase the retention and
compensation of child care providers, including
tiered reimbursement rates for providers that meet
quality standards as defined by the State; or
‘‘(4) other activities deemed by the State to im-
prove the quality of child care services provided in
such State.’’.
SEC. 206. DEFINITIONS.
Section 658P(4)(B) of the Child Care and Develop-
ment Block Grant Act of 1990 (42 U.S.C. 9858N(4)(B))
is amended by striking ‘‘85 percent of the State median
income’’ and inserting ‘‘income levels as established by the
State, prioritized by need,’’.
TITLE III—BROADENED WAIVER
AUTHORITY
SEC. 301. STATE PROGRAM DEMONSTRATION PROJECTS.
(a) PURPOSE.—The purpose of this section is to en-
able States to conduct demonstration projects involving in-
dividual programs, or integrating multiple public assist-
ance, workforce development, and other programs, for the
purpose of supporting working individuals and families,
helping families escape welfare dependency, promoting
child well-being, or helping build stronger families, using
innovative approaches to strengthen service systems and
provide more coordinated and effective service delivery.
(b) DEFINITIONS.—In this section:
(1) ADMINISTERING
SECRETARY.—The term
‘‘administering Secretary’’ means, with respect to a
program administered by a qualified agency, the
head of the agency.
(2) QUALIFIED AGENCY.—The term ‘‘qualified
agency’’ means—
(A) the Department of Labor; or
(B) the Department of Education.
(c) APPLICATION REQUIREMENTS.—A State desiring
to conduct a demonstration project under this section in-
volving 1 or more programs administered by 1 or more
qualified agencies shall submit to the administering Sec-
retary of each such program an application that contains
the following:
(1) PROGRAMS INCLUDED.—A statement identi-
fying each program to be included in the project,
and describing how the purposes of each such pro-
gram will be achieved by the project.
(2) POPULATION SERVED.—A statement identi-
fying the population to be served by the project and
specifying the eligibility criteria to be used.
(3) DESCRIPTION AND JUSTIFICATION.—A de-
tailed 
description 
of 
the 
proposed 
project,
including—
(A) a description of how the project is ex-
pected to improve or enhance achievement of
the purposes of the program or programs in-
volved, from the standpoint of quality, of cost-
effectiveness, or of both; and
(B) a description of the performance objec-
tives for the project, including any proposed
modifications to the performance measures and
reporting requirements used in the program or
programs involved.
(4) WAIVERS
REQUESTED.—A description of
the waivers requested of statutory and regulatory re-
quirements under the program or programs involved,
and a justification of the need for each waiver.
(5) COST NEUTRALITY.—Such information and
assurances as necessary to establish to the satisfac-
tion of each concerned administering Secretary that
the proposed project is reasonably expected to meet
the requirements of subsection (d)(3).
(6) EVALUATION AND REPORTS.—An assurance
that the State will conduct ongoing and final evalua-
tions of the project, and make interim and final re-
ports to each concerned administering Secretary, at
such times and in such manner as each such Sec-
retary may require.
(7) OTHER INFORMATION AND ASSURANCES.—
Such other information and assurances as each con-
cerned administering Secretary may require.
(d) APPROVAL OF STATE APPLICATIONS.—
(1) IN GENERAL.—The administering Secretary
with respect to a program that is identified in an ap-
plication submitted pursuant to subsection (c) and
that is proposed to be included in a demonstration
project to be conducted under this section may ap-
prove the project and waive any requirement applica-
ble to the program, to the extent consistent with this
section and necessary and appropriate for the con-
duct of the project, if the Secretary determines that
the project proposed in the application—
(A) has a reasonable likelihood of achieving
the objectives of the program or programs in-
volved; and
(B) may reasonably be expected to meet
the cost neutrality requirements of paragraph
(3).
(2) AGREEMENT OF EACH ADMINISTERING SEC-
RETARY
REQUIRED
FOR
PROPOSALS
INVOLVING
MORE THAN 1 QUALIFIED AGENCY.—
(A) IN GENERAL.—A State may not con-
duct a demonstration project under this section
unless each administering Secretary with re-
spect to any program proposed to be included
in the project has approved the application to
conduct the project.
(B) AGREEMENT WITH RESPECT TO FUND-
ING AND IMPLEMENTATION.—Before approving
a State proposal under this section, each ad-
ministering Secretary shall have in place an
agreement with respect to the payment of funds
and responsibilities required of the Secretary
with respect to the project.
(C) 90-DAY APPROVAL DEADLINE.—An ap-
plication to conduct a demonstration project
under this section is considered approved for
purposes of this section unless, within 90 days
after an administering Secretary with respect to
a program proposed to be included in the
project has received the application, the admin-
istering Secretary, in writing, notifies the State
that submitted the application that the applica-
tion is disapproved (and the reasons for dis-
approval) or that specified additional informa-
tion is needed.
(3) COST-NEUTRALITY REQUIREMENTS.—
(A) LIMIT ON TOTAL COSTS.—An applica-
tion to conduct a demonstration project under
this section shall not be approved unless it can
reasonably be expected that, for each fiscal year
in which the project is in effect, the total costs
of the project will not exceed the estimated
combined total Federal cost for the fiscal year
of the program or programs included in the
project if the program or programs had not
been included in the project.
(B) LIMIT ON FEDERAL PAYMENTS.—The
total amount of payments that may be made to
a State for a fiscal year with respect to a dem-
onstration project conducted under this section
that includes 1 or more programs in the juris-
diction of an administering Secretary shall not
exceed the estimated amount of the payments
that the Secretary would have made to the
State with respect to the program or programs
if not included in the project.
(e) DURATION
OF
PROJECTS.—A demonstration
project under this section may be approved for a term of
not more than 5 years, and may be renewed for 1 or more
additional terms of not more than 5 years.
(f) REPORTS
TO CONGRESS.—Each administering
Secretary shall provide annually to the Congress a report
concerning demonstration projects approved under this
section, including—