ensure that any child care provider in the State that
provides services for which assistance is provided
under the State program funded under this part
complies with all applicable State or local health and
safety 
requirements 
as 
described 
in 
section
658E(c)(2)(F) of the Child Care and Development
Block Grant Act of 1990.’’.
(d) AVAILABILITY OF CHILD CARE FOR PARENTS
REQUIRED
TO WORK.—Section 407(e)(2) (42 U.S.C.
607(e)(2)) is amended by striking ‘‘6’’ and inserting ‘‘13’’.
SEC. 303. COMPETITIVE GRANTS TO IMPROVE ACCESS TO
VARIOUS BENEFIT PROGRAMS.
(a) PURPOSES.—The purposes of this section are
to—
(1) inform low-income families with children
about programs available to families leaving welfare
and other programs to support low-income families
with children;
(2) provide incentives to States and counties to
improve and coordinate application and renewal pro-
cedures for low-income family with children support
programs; and
(3) track the extent to which low-income fami-
lies with children receive the benefits and services
for which they are eligible.
(b) DEFINITIONS.—In this section:
(1) LOCALITY.—The term locality means a mu-
nicipality that does not administer a temporary as-
sistance for needy families program funded under
part A of title IV of the Social Security Act (42
U.S.C. 601 et seq.) (in this section referred to as
‘‘TANF’’).
(2) LOW-INCOME FAMILY WITH CHILDREN SUP-
PORT PROGRAM.—The term ‘‘low-income family with
children support program’’ means a program de-
signed to provide low-income families with assistance
or benefits to enable the family to become self-suffi-
cient and includes—
(A) TANF;
(B) the food stamp program established
under the Food Stamp Act of 1977 (7 U.S.C.
2011 et seq.) (in this section referred to as
‘‘food stamps’’);
(C) the medicaid program funded under
title XIX of the Social Security Act (42 U.S.C.
1396 et seq.);
(D) the State children’s health insurance
program (SCHIP) funded under title XXI of
the Social Security Act (42 U.S.C. 1397aa et
seq.);
(E) the child care program funded under
the Child Care Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.);
(F) the child support program funded
under part D of title IV of the Social Security
Act (42 U.S.C. 651 et seq.);
(G) the earned income tax credit under
section 32 of the Internal Revenue Code of
1986;
(H) the low-income home energy assistance
program (LIHEAP) established under the Low-
Income Home Energy Assistance Act of 1981
(42 U.S.C 8621 et seq.);
(I) the special supplemental nutrition pro-
gram for women, infants, and children (WIC)
established under section 17 of the Child Nutri-
tion Act of 1966 (42 U.S.C. 1786);
(J) programs under the Workforce Invest-
ment Act of 1998 (29 U.S.C. 2801 et seq.); and
(K) any other Federal or State funded pro-
gram designed to provide family and work sup-
port to low-income families with children.
(3) NONPROFIT.—The term ‘‘nonprofit’’, as ap-
plied to a school, agency, organization, or institution
means a school, agency, organization, or institution
owned and operated by 1 or more nonprofit corpora-
tions or associations, no part of the net earnings of
which inures, or may lawfully inure, to the benefit
of any private shareholder or individual.
(4) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
(5) STATE.—The term ‘‘State’’ means each of
the several States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico,
American Samoa, Guam, and the United States Vir-
gin Islands.
(c) AUTHORIZATION OF GRANTS.—
(1) STATES AND COUNTIES.—
(A) IN GENERAL.—The Secretary is au-
thorized to award grants to States and counties
to pay the Federal share of the costs involved
in improving the administration of low-income
family with children support programs, includ-
ing simplifying application, recertification, re-
porting, and verification rules, and promoting
participation in such programs.
(B) FEDERAL SHARE.—The Federal share
shall be 80 percent.
(2) NONPROFITS AND LOCALITIES.—The Sec-
retary is authorized to award grants to nonprofits
and localities to promote participation in low-income
family with children support programs, and dis-
tribute information about and develop service centers
for low-income family with children support pro-
grams.
(d) GRANT APPROVAL CRITERIA.—
(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Agriculture, shall establish
criteria for approval of an application for a grant
under this section that include consideration of—
(A) the extent to which the proposal, if
funded, is likely to result in improved service
and higher participation rates in low-income
children’s support programs;
(B) an applicant’s ability to reach hard-to-
serve populations;
(C) the level of innovation in the appli-
cant’s grant proposal; and
(D) any partnerships between the public
and private sector in the applicant’s grant pro-
posal.
(2) SEPARATE
CRITERIA.—Separate criteria
shall be established for the grants authorized under
paragraphs (1) and (2) of subsection (c).
(e) USES OF FUNDS.—
(1) STATES AND COUNTIES.—
(A) 
IMPROVEMENTS
IN
PROGRAMS.—
Grants awarded to States and counties under
subsection (c)(1) shall be used to—
(i) simplify low-income family with
children support program application, re-
certification, reporting, and verification
rules;
(ii) create uniformity in eligibility cri-
teria for low-income family with children
support programs;
(iii) develop options for families to
apply for low-income family with children
support programs through the telephone,
mail, facsimile, Internet, or electronic mail,
and submit any recertifications or reports
required for such families through these
options;
(iv) co-locate eligibility workers for
various low-income family with children
support programs at strategically located
sites;
(v) develop or enhance one-stop serv-
ice centers for low-income family with chil-
dren support programs, including estab-
lishing evening and weekend hours at these
centers; and
(vi) improve training of staff in low-
income families with children support pro-
grams to enhance their ability to enroll eli-
gible applicants in low-income family with
children support programs, provide case
management, and refer eligible applicants
to other appropriate programs.
(B) CUSTOMER SURVEYS.—
(i) IN GENERAL.—A grant awarded to
a State or county under subsection (c)(1)
shall be used to carry out a customer sur-
vey.
(ii) MODEL SURVEYS.—The customer
survey under clause (i) of this subpara-
graph shall be modeled after a form devel-
oped by the Secretary under subsection
(g).
(iii) REPORTS
TO
SECRETARY.—Not
later than 1 year after a State or county
is awarded a grant under subsection (c)(1),
and annually thereafter, the State or coun-
ty shall submit a report to the Secretary
detailing the results of the customer survey
carried out under clause (i) of this sub-
paragraph.
(iv) REPORTS TO PUBLIC.—A State or
county receiving a grant under subsection
(c)(1) and the Secretary shall make the re-
port required under clause (iii) of this sub-
paragraph available to the public.
(v) PUBLIC
COMMENT.—A State or
county receiving a grant under subsection
(c)(1) shall accept public comments and
hold public hearings on the report made
available under clause (iv) of this subpara-
graph.
(C) TRACKING SYSTEMS.—
(i) IN GENERAL.—A grant awarded to
a State or county under subsection (c)(1)
shall be used to implement a tracking sys-
tem to determine the level of participation
in low-income family with children support
programs of the eligible population.
(ii) REPORTS.—Not later than 1 year
after a State or county is awarded a grant
under subsection (c)(1), and annually
thereafter, the State or county shall submit
a report to the Secretary detailing the ef-
fectiveness of the tracking system imple-
mented under clause (i) of this subpara-
graph.
(D) IN-PERSON INTERVIEWS.—A State or
county awarded a grant under subsection (c)(1)
may expend funds made available under the
grant to provide for reporting and recertifi-
cation procedures through the telephone, mail,
facsimile, Internet, or electronic mail.
(E) 
JURISDICTION-WIDE
IMPLEMENTA-
TION.—
(i) IN GENERAL.—A grant awarded to
a State or county under subsection (c)(1)
shall be used for activities throughout the
jurisdiction.
(ii) EXCEPTION.—A State or county
awarded a grant under subsection (c)(1)
may use grant funds to develop one-stop
service centers and telephone, mail, fac-
simile, Internet, or electronic mail applica-
tion and renewal procedures for low-income
family with children support programs
without regard to the requirements of
clause (i) of this subparagraph.
(F) SUPPLEMENT NOT SUPPLANT.—Funds
provided to a State or county under a grant
awarded under subsection (c)(1) shall be used
to supplement and not supplant other State or
county public funds expended to provide sup-
port services for low-income families.
(2) NONPROFITS
AND
LOCALITIES.—A grant
awarded to a nonprofit or locality under subsection
(c)(2) shall be used to—
(A) develop one-stop service centers for
low-income family with children support pro-
grams in cooperation with States and counties;
or
(B) provide information about and refer-
rals to low-income family with children support
programs through the dissemination of mate-
rials at strategic locations, including schools,
clinics, and shopping locations.
(f) APPLICATION.—
(1) IN GENERAL.—Each applicant desiring a
grant under paragraph (1) or (2) of subsection (c)
shall submit an application to the Secretary at such
time, in such manner, and accompanied by such in-
formation as the Secretary may reasonably require.
(2) STATES AND COUNTIES.—
(A) NON-FEDERAL SHARE.—Each State or
county applicant shall provide assurances that
the applicant will pay the non-Federal share of
the activities for which a grant is sought.
(B) PARTNERSHIPS.—Each State or coun-
ty applicant shall submit a memorandum of un-
derstanding demonstrating that the applicant
has entered into a partnership to coordinate its
efforts under the grant with the efforts of other
State and county agencies that have responsi-
bility for providing low-income families with as-
sistance or benefits.
(g) DUTIES OF THE SECRETARY.—
(1) SURVEY FORM.—The Secretary, in coopera-
tion with other relevant agencies, shall develop a
customer survey form to determine whether low-in-
come families—
(A) encounter any impediments in applying
for or renewing their participation in low-in-
come family with children support programs;
and
(B) are unaware of low-income family with
children support programs for which they are
eligible.
(2) REPORTS.—
(A) ANNUAL REPORTS.—Not later than 1
year after the date of enactment of this Act,
and annually thereafter, the Secretary shall
submit a report to Congress describing the uses
of grant funds awarded under this section.
(B) RESULTS OF TRACKING SYSTEMS AND
SURVEYS.—The Secretary shall submit a report
to Congress detailing the results of the tracking
systems implemented and customer surveys car-
ried out by States and counties under sub-
section (e) as the information becomes avail-
able.
(h) MISCELLANEOUS.—
(1) MATCHING
FUNDS.—Matching funds re-
quired from a State or county awarded a grant
under subsection (c)(1) of this section may—
(A) include in-kind services and expendi-
tures by municipalities and private entities; and
(B) be considered a qualified State expend-
iture for purposes of determining whether the
State has satisfied the maintenance of effort re-
quirements of the temporary assistance for
needy families program under section 409(a)(7)
of 
the 
Social 
Security 
Act 
(42 
U.S.C.
609(a)(7)).
(2) LIMITATION
ON
EXPENDITURES.—Subject
to paragraph (3) of this subsection, not more than
20 percent of a grant awarded under subsection (c)
shall be expended on customer surveys or tracking
systems.
(3) REVERSION OF FUNDS.—Any funds not ex-
pended by a grantee within 2 years after awarded a
grant shall be available for redistribution among
other grantees in such manner and amount as the
Secretary may determine, unless the Secretary ex-
tends by regulation the 2-year time period to expend
funds.
(4) 
NONAPPORTIONMENT.—Notwithstanding
any other provision of law, a State, county, locality,
or nonprofit awarded a grant under subsection (c) is
not required to apportion the costs of providing in-
formation about low-income family with children
support programs among all low-income family with
children support programs.
(5) ADMINISTRATIVE
COSTS
OF
THE
SEC-
RETARY.—Not more than 5 percent of the funds ap-
propriated to carry out this section shall be ex-
pended on administrative costs of the Secretary.
(i) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$500,000,000 for the period of fiscal years 2003 through
2007.
SEC. 304. ASSESSMENTS FOR TANF RECIPIENTS.
Section 408(b) (42 U.S.C. 608(b)) is amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(1) ASSESSMENT.—The State agency respon-
sible for administering the State program funded
under this part shall, for each recipient of assistance
under the program who is a head of household,
make an initial assessment of the skills, prior work
experience, and circumstances related to the employ-
ability of the recipient, including physical or mental
impairments, proficiency in English, child care
needs, and whether the recipient is a victim of do-
mestic violence.’’; and
(2) by striking paragraph (4).
TITLE 
IV—HELPING 
WELFARE
LEAVERS 
CLIMB 
THE 
EM-
PLOYMENT LADDER
SEC. 401. STATE PLAN REQUIREMENT ON EMPLOYMENT
ADVANCEMENT.
(a) IN GENERAL.—Section 402(a)(1)(A) (42 U.S.C.
602(a)(1)(A)) is amended by adding at the end the fol-
lowing:
‘‘(vii) Establish goals and take action
to improve initial earnings, job advance-
ment, and employment retention for indi-
viduals in and individuals leaving the pro-
gram.’’.
(b) INCLUSION IN ANNUAL REPORTS OF PROGRESS
IN ACHIEVING EMPLOYMENT ADVANCEMENT GOALS.—
Section 411(b) (42 U.S.C. 611(b)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(3);
(2) by striking the period at the end of para-
graph (4) and inserting ‘‘; and’’ ; and
(3) by adding at the end the following:
‘‘(5) in each report submitted after fiscal year
2003, the progress made by the State in achieving
the goals referred to in section 402(a)(1)(A)(vii) in
the most recent State plan submitted pursuant to
section 402(a).’’.
SEC. 402. EMPLOYMENT ADVANCEMENT FUND.
Section 403(a) (42 U.S.C. 603(a)) is further amend-
ed by adding at the end the following:
‘‘(8) EMPLOYMENT ADVANCEMENT FUND.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide grants to States and localities for re-
search, evaluation, technical assistance, and
demonstration projects that focus on—
‘‘(i) improving wages for low-income
workers, regardless of whether such work-
ers are recipients of assistance under a
State program funded under this part,
through training and other services; and
‘‘(ii) enhancing employment prospects
for recipients of such assistance with bar-
riers to employment, such as a physical or
mental impairment, a substance abuse
problem, or limited proficiency in English.
‘‘(B) ADMINISTRATION.—
‘‘(i) ALLOCATION
OF
FUNDS.—The
Secretary shall allocate at least 40 percent
of the funds made available pursuant to
this paragraph for projects that focus on
the matters described in subparagraph
(A)(i), and at least 40 percent of the funds
for projects that focus on the matters de-
scribed in subparagraph (A)(ii).
‘‘(ii) DIVERSITY OF PROJECTS.—The
Secretary shall attempt to provide funds
under this paragraph for diverse projects
from geographically different areas.
‘‘(C) AID
UNDER
THIS
PARAGRAPH
NOT
‘ASSISTANCE’.—A benefit or service provided
with funds made available under this paragraph
shall not, for any purpose, be considered assist-
ance under a State program funded under this
part.
‘‘(D) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
each of fiscal years 2003 through 2007
$150,000,000 for grants under this para-
graph.’’.
SEC. 403. ELIMINATION OF LIMIT ON NUMBER OF TANF RE-
CIPIENTS ENROLLED IN VOCATIONAL EDU-
CATION OR HIGH SCHOOL WHO MAY BE
COUNTED TOWARDS THE WORK PARTICIPA-
TION REQUIREMENT.
Section 407(c)(2) (42 U.S.C. 607(c)(2)) is amended
by striking subparagraph (D).
SEC. 404. COUNTING OF UP TO 2 YEARS OF VOCATIONAL
AND EDUCATIONAL TRAINING AS WORK AC-
TIVITY.
Section 
407(d)(8) 
(42 
U.S.C. 
607(d)(8)) 
is
amended—
(1) by striking ‘‘vocational educational train-
ing’’ and inserting ‘‘vocational and educational train-
ing (including postsecondary education)’’; and
(2) by striking ‘‘12’’ and inserting ‘‘24’’.
SEC. 405. LIMITED COUNTING OF CERTAIN ACTIVITIES
LEADING TO EMPLOYMENT AS WORK ACTIV-
ITY.
(a) IN
GENERAL.—Section 407(d) (42 U.S.C.
607(d)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(11);
(2) by striking the period at the end of para-
graph (12) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(13) Up to 6 months of participation (as de-
termined by the State) in services designed to im-
prove future employment opportunities, including
substance abuse treatment services, services to ad-
dress sexual or domestic violence, and physical reha-
bilitation and mental health services.’’.
(b) CONFORMING AMENDMENT.—Section 407(c)(1)
(42 U.S.C. 607(c)(1)) is amended by striking ‘‘and (12)’’
each place it appears and inserting ‘‘(12), and (13)’’.
SEC. 406. CLARIFICATION OF AUTHORITY OF STATES TO
USE TANF FUNDS CARRIED OVER FROM
PRIOR YEARS TO PROVIDE TANF BENEFITS
AND SERVICES.
Section 404(e) (42 U.S.C. 604(e)) is amended—
(1) in the subsection heading, by striking ‘‘AS-
SISTANCE’’ and inserting ‘‘BENEFITS OR SERVICES’’;
and
(2) after the heading, by striking ‘‘assistance’’
and inserting ‘‘any benefit or service that may be
provided’’.
TITLE V—PROMOTING FAMILY
FORMATION 
AND 
RESPON-
SIBLE PARENTING
SEC. 501. FAMILY FORMATION FUND.
Section 403(a)(2) (42 U.S.C. 603(a)(2)) is amended
to read as follows:
‘‘(2) FAMILY FORMATION FUND.—
‘‘(A) IN
GENERAL.—The Secretary shall
provide grants to States and localities for re-
search, technical assistance, and demonstration
projects to promote and fund best practices in
the following areas:
‘‘(i) Promoting the formation of 2-
parent families.
‘‘(ii) Reducing teenage pregnancies.
‘‘(iii) Increasing the ability of non-
custodial parents to financially support
and be involved with their children.
‘‘(B) ALLOCATION OF FUNDS.—In making
grants under this paragraph, the Secretary
shall ensure that not less than 30 percent of
the funds made available pursuant to this para-
graph for a fiscal year are used in each of the
areas described in subparagraph (A).
‘‘(C) CONSIDERATION OF DOMESTIC VIO-
LENCE IMPACT.—In making grants under this
paragraph, the Secretary shall consider the po-
tential impact of a project on the incidence of
domestic violence.
‘‘(D) APPROPRIATION.—Out of any money
in the Treasury of the United States not other-
wise appropriated, there are appropriated for
each of fiscal years 2003 through 2007
$100,000,000 for grants under this para-
graph.’’.
SEC. 502. DISTRIBUTION OF CHILD SUPPORT COLLECTED
BY STATES ON BEHALF OF CHILDREN RE-
CEIVING CERTAIN WELFARE BENEFITS.
(a) MODIFICATION OF RULE REQUIRING ASSIGN-
MENT OF SUPPORT RIGHTS AS A CONDITION OF RECEIV-
by a State pursuant to a plan approved under this part
shall be distributed as follows:
‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the
case of a family receiving assistance from the State,
the State shall—
‘‘(A) pay to the Federal Government the
Federal share of the amount collected, subject
to paragraph (3)(A);
‘‘(B) retain, or pay to the family, the State
share of the amount collected, subject to para-
graph (3)(B); and
‘‘(C) pay to the family any remaining
amount.
‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS-
SISTANCE.—In the case of a family that formerly re-
ceived assistance from the State:
‘‘(A) CURRENT SUPPORT.—To the extent
that the amount collected does not exceed the
current support amount, the State shall pay the
amount to the family.
‘‘(B) ARREARAGES.—To the extent that
the amount collected exceeds the current sup-
port amount, the State—
‘‘(i) shall first pay to the family the
excess amount, to the extent necessary to
satisfy support arrearages not assigned
pursuant to section 408(a)(3);
‘‘(ii) if the amount collected exceeds
the amount required to be paid to the fam-
ily under clause (i), shall—
‘‘(I) pay to the Federal Govern-
ment, the Federal share of the excess
amount described in this clause, sub-
ject to paragraph (3)(A); and
‘‘(II) retain, or pay to the family,
the State share of the excess amount
described in this clause, subject to
paragraph (3)(B); and
‘‘(iii) shall pay to the family any re-
maining amount.
‘‘(3) LIMITATIONS.—
‘‘(A) FEDERAL
REIMBURSEMENTS.—The
total of the amounts paid by the State to the
Federal Government under paragraphs (1) and
(2) of this subsection with respect to a family
shall not exceed the Federal share of the
amount assigned with respect to the family pur-
suant to section 408(a)(3).
‘‘(B) 
STATE
REIMBURSEMENTS.—The
total of the amounts retained by the State
under paragraphs (1) and (2) of this subsection
with respect to a family shall not exceed the
State share of the amount assigned with respect
to the family pursuant to section 408(a)(3).
‘‘(4) FAMILIES THAT NEVER RECEIVED ASSIST-
ANCE.—In the case of any other family, the State
shall pay the amount collected to the family.
‘‘(5) 
FAMILIES
UNDER
CERTAIN
AGREE-
MENTS.—Notwithstanding paragraphs (1) through
(4), in the case of an amount collected for a family
in accordance with a cooperative agreement under
section 454(33), the State shall distribute the
amount collected pursuant to the terms of the agree-
ment.
‘‘(6) STATE FINANCING OPTIONS.—To the ex-
tent that the State share of the amount payable to
a family for a month pursuant to paragraph (2)(B)
of this subsection exceeds the amount that the State
estimates (under procedures approved by the Sec-
retary) would have been payable to the family for
the month pursuant to former section 457(a)(2) (as
in effect for the State immediately before the date
this subsection first applies to the State) if such
former section had remained in effect, the State may
elect to use the grant made to the State under sec-
tion 403(a) to pay the amount, or to have the pay-
ment considered a qualified State expenditure for
purposes of section 409(a)(7), but not both.
‘‘(7) STATE OPTION TO PASS THROUGH ADDI-
TIONAL SUPPORT WITH FEDERAL FINANCIAL PAR-
TICIPATION.—
‘‘(A) 
IN
GENERAL.—Notwithstanding
paragraphs (1) and (2), a State shall not be re-
quired to pay to the Federal Government the
Federal share of an amount collected on behalf
of a family that is not a recipient of assistance
under the State program funded under part A,
to the extent that the State pays the amount to
the family.
‘‘(B) RECIPIENTS
OF
TANF
FOR
LESS
THAN
YEARS.—Notwithstanding paragraphs
(1) and (2), a State shall not be required to pay
to the Federal Government the Federal share of
an amount collected on behalf of a family that
is a recipient of assistance under the State pro-
gram funded under part A and that has re-
ceived the assistance for not more than 5 years
after the date of the enactment of this para-
graph, to the extent that the State pays the
amount to the family.’’.
(B) APPROVAL
OF
ESTIMATION
PROCE-
DURES.—Not later than October 1, 2002, the
Secretary of Health and Human Services, in
consultation with the States (as defined for
purposes of part D of title IV of the Social Se-
curity Act), shall establish the procedures to be
used to make the estimate described in section
457(a)(6) of such Act.
(2) CURRENT
SUPPORT
AMOUNT
DEFINED.—
Section 457(c) (42 U.S.C. 657(c)) is amended by
adding at the end the following:
‘‘(5) CURRENT SUPPORT AMOUNT.—The term
‘current support amount’ means, with respect to
amounts collected as support on behalf of a family,
the amount designated as the monthly support obli-
gation of the noncustodial parent in the order re-
quiring the support.’’.
(c) BAN ON RECOVERY OF MEDICAID COSTS FOR
CERTAIN BIRTHS.—Section 454 (42 U.S.C. 654) is
amended—
(1) by striking ‘‘and’’ at the end of paragraph
(32);
(2) by striking the period at the end of para-
graph (33) and inserting ‘‘; and’’; and
(3) by inserting after paragraph (33) the fol-
lowing:
‘‘(34) provide that 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 408(a)(3),
471(a)(17), or 1912.’’.
(d) STATE OPTION TO DISCONTINUE CERTAIN SUP-
PORT ASSIGNMENTS.—Section 457(b) (42 U.S.C. 657(b))
is amended by striking ‘‘shall’’ and inserting ‘‘may’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 409(a)(7)(B)(i)(I)(aa) (42 U.S.C.
609(a)(7)(B)(i)(I)(aa)) is amended by striking
‘‘457(a)(1)(B)’’ and inserting ‘‘457(a)(1)’’.
(2) Section 404(a) (42 U.S.C. 604(a)) is
amended—
(A) by striking ‘‘or’’ at the end of para-
graph (1);
(B) by striking the period at the end of
paragraph (2) and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(3) to fund payment of an amount pursuant to
clause (i) or (ii) of section 457(a)(2)(B), but only to
the extent that the State properly elects under sec-
tion 457(a)(6) to use the grant to fund the pay-
ment.’’.
(3) 
Section 
409(a)(7)(B)(i) 
(42 
U.S.C.
609(a)(7)(B)(i)) is amended by adding at the end
the following:
‘‘(V) 
PORTIONS
OF
CERTAIN
CHILD
SUPPORT
PAYMENTS
COL-
LECTED ON BEHALF OF AND DISTRIB-
UTED TO FAMILIES NO LONGER RE-
CEIVING
ASSISTANCE.—Any amount
paid by a State pursuant to clause (i)
or (ii) of section 457(a)(2)(B), but
only to the extent that the State prop-
erly elects under section 457(a)(6) to
have the payment considered a quali-
fied State expenditure.’’.
(f) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2) of this subsection and section 901(b) of
this Act, the amendments made by this section shall
take effect on October 1, 2006, and shall apply to
payments under parts A and D of title IV of the So-
cial Security Act for calendar quarters beginning on
or after such date, without regard to whether regula-
tions to implement the amendments are promulgated
by such date.
(2) STATE OPTION TO ACCELERATE EFFECTIVE
DATE.—A State may elect to have the amendments
made by this section apply to the State and to
amounts collected by the State, on and after such
date as the State may select that is after the date
of the enactment of this Act and before the effective
date provided in paragraph (1).
SEC. 503. ELIMINATION OF SEPARATE WORK PARTICIPA-
TION RATE FOR 2-PARENT FAMILIES.
Section 407 (42 U.S.C. 607) is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a) PARTICIPATION RATE
REQUIREMENTS.—’’ 
and 
all 
that 
follows
through ‘‘A State’’ in paragraph (1) and insert-
ing the following:
‘‘(a) 
PARTICIPATION
RATE
REQUIREMENT.—A
State’’; and
(B) by striking paragraph (2); and
(2) in subsection (b)—
(A) by striking paragraphs (2) and (3);
(B) in paragraph (4), by striking ‘‘para-
graphs (1)(B) and (2)(B)’’ and inserting ‘‘para-
graph (1)(B)’’;
(C) in paragraph (5), by striking ‘‘rates’’
and inserting ‘‘rate’’; and
(D) by redesignating paragraphs (4) and
(5) as paragraphs (2) and (3), respectively.
SEC. 504. BAN ON IMPOSITION OF STRICTER ELIGIBILITY
CRITERIA FOR 2-PARENT FAMILIES; STATE
OPT-OUT.
(a) PROHIBITION.—Section 408(a) (42 U.S.C.
608(a)) is further amended by adding at the end the fol-
lowing:
‘‘(13) BAN ON IMPOSITION OF STRICTER ELIGI-
BILITY CRITERIA FOR 2-PARENT FAMILIES.—
‘‘(A) IN
GENERAL.—In determining the
eligibility of a 2-parent family for assistance
under a State program funded under this part,
the State shall not impose a requirement that
does not apply in determining the eligibility of
a 1-parent family for such assistance.
‘‘(B) STATE OPT-OUT.—Subparagraph (A)
shall not apply to a State if the State legisla-
ture, by law, has elected to make subparagraph
(A) inapplicable to the State.’’.
(b) PENALTY.—Section 409(a) (42 U.S.C. 609(a)) is
further amended by adding at the end the following:
‘‘(16) PENALTY FOR IMPOSITION OF STRICTER
ELIGIBILITY CRITERIA FOR 2-PARENT FAMILIES.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 for a fiscal year has violated
section 408(a)(13) during the fiscal year, the
Secretary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to 5 percent of the State family assist-
ance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a
fiscal year based on the degree of noncompli-
ance.’’.
TITLE VI—RESTORING FAIRNESS
FOR IMMIGRANT FAMILIES
SEC. 601. TREATMENT OF ALIENS UNDER THE TANF PRO-
GRAM.
(a) EXCEPTION TO 5-YEAR BAN FOR QUALIFIED
ALIENS.—Section 403(c)(2) of the Personal Responsi-
bility and Work Opportunity Reconciliation Act of 1996
(8 U.S.C. 1613(c)(2)) is amended by adding at the end
the following:
‘‘(L) Benefits under the Temporary Assist-
ance for Needy Families program described in
section 402(b)(3)(A).’’.
(b) BENEFITS
NOT
SUBJECT
TO
REIMBURSE-
MENT.—Section 423(d) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1138a note) is amended by adding at the end the fol-
lowing:
‘‘(12) Benefits under part A of title IV of the
Social Security Act except for cash assistance pro-
vided to a sponsored alien who is subject to deeming
pursuant to section 408(h) of the Social Security
Act.’’.
(c) TREATMENT
OF
ALIENS.—Section 408 (42
U.S.C. 608) is amended by adding at the end the fol-
lowing:
‘‘(h) SPECIAL RULES RELATING TO THE TREAT-
MENT OF 213A ALIENS.—
‘‘(1) IN GENERAL.—In determining whether a
213A alien is eligible for cash assistance under a
State program funded under this part, and in deter-
mining the amount or types of such assistance to be
provided to the alien, the State shall apply the rules
of paragraphs (1), (2), (3), (5), and (6) of sub-
section (f) of this section by substituting ‘213A’ for
‘non-213A’ each place it appears, subject to section
421(e) of the Personal Responsibility and Work Op-
portunity Reconcilation Act of 1996, and subject to
section 421(f) of such Act (which shall be applied by
substituting ‘section 408(h) of the Social Security
Act’ for ‘subsection (a)’).
‘‘(2) 213A ALIEN
DEFINED.—An alien is a
213A alien for purposes of this subsection if the affi-
davit of support or similar agreement with respect to
the alien that was executed by the sponsor of the
alien’s entry into the United States was executed
pursuant to section 213A of the Immigration and
Nationality Act.’’.
(d) INCLUSION OF PARTICIPATION IN ENGLISH-AS-
A-SECOND-LANGUAGE PROGRAM AMONG PERMISSIBLE
WORK ACTIVITIES.—Section 407(d) (42 U.S.C. 607(d))
is further amended—
(1) by striking ‘‘and’’ at the end of paragraph
(11);
(2) by striking the period at the end of para-
graph (12) and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(14) participation in an English-as-a-second-
language program.’’.
SEC. 602. TREATMENT OF ALIENS UNDER THE SSI PRO-
GRAM.
(a) ELIGIBILITY OF QUALIFIED ALIENS FOR BENE-
FITS.—
(1) ELIMINATION
OF
PROHIBITION.—Section
402(a) of the Personal Responsibility and Work Op-
portunity Reconciliation Act of 1996 (8 U.S.C.
1612(a)) is amended—
(A) by striking paragraph (3)(A); and
(B) in paragraph (2) by striking subpara-
graphs (D)(i), (E), and (H).
(2) EXCEPTION
TO
5-YEAR
BAN.—Section
403(c)(2) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (8 U.S.C.
1613(c)(2)) is amended by adding at the end the fol-
lowing:
‘‘(M) Assistance or benefits under the sup-
plemental security income program under title
XVI of the Social Security Act, including sup-
plementary payments pursuant to an agreement
for 
Federal 
administration 
under 
section
1616(a) of the Social Security Act and pay-
ments pursuant to an agreement entered into
under section 212(b) of Public Law 93–66
(commonly known as SSI).’’.
(b) BENEFITS
NOT
SUBJECT
TO
REIMBURSE-
MENT.—Section 423(d) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1138a note) is further amended by adding at the end the
following:
‘‘(13) Assistance under the supplemental secu-
rity income program under title XVI of the Social
Security Act, except assistance provided to a spon-
sored alien who is subject to deeming pursuant to
section 1621 of the Social Security Act.’’.
(c) 
CONFORMING
AMENDMENTS.—Section
402(b)(2)(F) of the Personal Responsibility and Work Op-
portunity 
Reconciliation 
Act 
of 
1996 
(8 
U.S.C.
1612(b)(2)(F)) is amended by striking ‘‘program defined
in subsection (a)(3)(A) (relating to the supplemental secu-
rity income program)’’ and inserting ‘‘supplemental secu-
rity income program under title XVI of the Social Security
Act, including supplementary payments pursuant to an
agreement for Federal administration under section
1616(a) of the Social Security Act and payments pursuant
to an agreement entered into under section 212(b) of Pub-
lic Law 93–66’’.
(d) PERIOD FOR ATTRIBUTION OF SPONSOR’S IN-
COME AND RESOURCES.—Section 1621 (42 U.S.C. 1382j)
is amended in each of subsections (a), (c), (d), and (e),
by striking ‘‘3’’ and inserting ‘‘5’’.
SEC. 603. EFFECTIVE DATE AND APPLICABILITY.
(a) EFFECTIVE DATE.—The amendments made by
this title shall take effect October 1, 2002.
(b) APPLICABILITY.—The amendments made by the
provisions of this title apply to benefits provided on or
after the effective date of this title.
TITLE VII—ENSURING STATE
ACCOUNTABILITY
SEC. 701. INFLATION ADJUSTMENT OF MAINTENANCE-OF-
EFFORT REQUIREMENT.
Section 
409(a)(7) 
(42 
U.S.C. 
609(a)(7)) 
is
amended—
(1) in subparagraph (A), by inserting ‘‘infla-
tion-adjusted’’ before ‘‘historic State expenditures’’;
and
(2) in subparagraph (B), by adding at the end
the following:
‘‘(vi) INFLATION-ADJUSTED HISTORIC
STATE EXPENDITURES.—The term ‘infla-
tion-adjusted historic State expenditures’
means, with respect to a fiscal year, his-
toric State expenditures with respect to the
fiscal year, multiplied by the sum of 1.00
plus the inflation percentage (as defined in
section 403(a)(2)(F)) in effect for the fis-
cal year.’’.
SEC. 702. BAN ON USING FEDERAL TANF FUNDS TO RE-
PLACE STATE AND LOCAL SPENDING THAT
DOES NOT MEET THE DEFINITION OF QUALI-
FIED STATE EXPENDITURES.
(a) PROHIBITION.—Section 408(a) (42 U.S.C.
608(a)) is further amended by adding at the end the fol-
lowing:
‘‘(14) BAN ON USING FEDERAL TANF FUNDS
TO
REPLACE
STATE
OR
LOCAL
SPENDING
THAT
DOES NOT MEET THE DEFINITION OF QUALIFIED
STATE EXPENDITURES.—A State to which a grant is
made under section 403 and a sub-State entity that
receives funds from such a grant shall not expend
any part of the grant funds to supplant State or
local spending for benefits or services which are not
qualified State expenditures (within the meaning of
section 409(a)(7)(B)(i)).’’.
(b) PENALTY.—Section 409(a) (42 U.S.C. 609(a)) is
further amended by adding at the end the following:
‘‘(17) PENALTY
FOR
USING
FEDERAL
TANF
FUNDS
TO
REPLACE
STATE
OR
LOCAL
SPENDING
THAT DOES NOT MEET THE DEFINITION OF QUALI-
FIED STATE EXPENDITURES.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that a State to which a grant is made
under section 403 for a fiscal year has violated
section 408(a)(14) during the fiscal year, the
Secretary shall reduce the grant payable to the
State under section 403(a)(1) for the imme-
diately succeeding fiscal year by an amount
equal to 5 percent of the State family assist-
ance grant.
‘‘(B) PENALTY
BASED
ON
SEVERITY
OF
FAILURE.—The Secretary shall impose reduc-
tions under subparagraph (A) with respect to a
fiscal year based on the degree of noncompli-
ance.’’.
TITLE VIII—IMPROVING INFOR-
MATION ABOUT TANF RECIPI-
ENTS AND PROGRAMS
SEC. 801. EXTENSION OF FUNDING OF STUDIES AND DEM-
ONSTRATIONS.
Section 413(h)(1) (42 U.S.C. 613(h)(1)) is amended
by striking ‘‘2002’’ and inserting ‘‘2007’’.
SEC. 802. LONGITUDINAL STUDIES OF EMPLOYMENT AND
EARNINGS OF TANF LEAVERS.
Section 413 (42 U.S.C. 613) is amended—
(1) in subsection (h)(1)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (C);
(B) by striking the period and inserting ‘‘;
and’’; and
(C) by adding at the end the following:
‘‘(E) the cost of conducting the studies de-
scribed in subsection (k).’’; and
(2) by adding at the end the following:
‘‘(k) LONGITUDINAL STUDIES OF EMPLOYMENT AND
EARNINGS OF TANF LEAVERS.—
‘‘(1) IN GENERAL.—The Secretary, directly or
through grants, contracts, or interagency agree-
ments shall conduct a study in each eligible State of
a statistically relevant cohort of individuals who
leave the State program funded under this part dur-
ing fiscal year 2003 and individuals who leave the
program during fiscal year 2005, which uses State
unemployment insurance data to track the employ-
ment and earnings status of the individuals during
the 3-year period beginning at the time the individ-
uals leave the program.
‘‘(2) REPORTS.—The Secretary shall annually
publish the findings of the studies conducted pursu-
ant to paragraph (1) of this subsection, and shall
annually publish the earnings data used in making
determinations under section 407(b).’’.
SEC. 803. INCLUSION OF DISABILITY STATUS IN INFORMA-
TION STATES REPORT ABOUT TANF FAMI-
LIES.
Section 411(a)(1)(A) (42 U.S.C. 611(a)(1)(A)) is
amended by adding at the end the following:
‘‘(xviii) Whether the head of the fam-
ily has a significant physical or mental im-
pairment.
SEC. 804. ANNUAL REPORT TO THE CONGRESS TO INCLUDE
GREATER DETAIL ABOUT STATE PROGRAMS
FUNDED UNDER TANF.
Section 411(b)(3) (42 U.S.C. 611(b)(3)), as amended
by section 401(b)(1) of this Act, is amended to read as
follows:
‘‘(3) the characteristics of each State program
funded under this part, including, with respect to
each program funded with amounts provided under
this part or with amounts the expenditure of which
is counted as a qualified State expenditure for pur-
poses of section 409(a)(7)—
‘‘(A) the name of the program;
‘‘(B) whether the program is authorized at
a sub-State level (such as at the county level);
‘‘(C) the purpose of the program;
‘‘(D) the main activities of the program;
‘‘(E) the total amount received by the pro-
gram from amounts provided under this part;
‘‘(F) the total of the amounts received by
the program that are amounts the expenditure
of which are counted as qualified State expendi-
tures for purposes of section 409(a)(7);
‘‘(G) the total funding level of the pro-
gram;
‘‘(H) the total number of individuals
served by the program, and the number of such
individuals served specifically with funds pro-
vided under this part or with amounts the ex-
penditure of which are counted as qualified
State expenditures for purposes of section
409(a)(7); and
‘‘(I) the eligibility criteria for participation
in the program;’’.
SEC. 805. ENHANCEMENT OF UNDERSTANDING OF THE
REASONS INDIVIDUALS LEAVE STATE TANF
PROGRAMS.
(a) DEVELOPMENT
OF COMPREHENSIVE LIST
OF
CASE CLOSURE REASONS.—The Secretary of Health and
Human Services shall develop, in consultation with States
and policy experts, a comprehensive list of reasons why
individuals leave State programs funded under this part.
The list shall be aimed at substantially reducing the num-
ber of case closures under the programs for which a reason
is not known.
(b) INCLUSION IN QUARTERLY STATE REPORTS.—
Section 411(a)(1)(A)(xvi) (42 U.S.C. 611(a)(1)(A)(xvi)) is
amended—
(1) by striking ‘‘or’’ at the end of subclause
(IV);
(2) by striking the period at the end and insert-
ing ‘‘; or’’; or
(3) by adding at the end the following:
‘‘(VI) a reason specified in the
list developed under section 805(a) of
the Next Step in Reforming Welfare
Act.’’.
SEC. 806. STANDARDIZED STATE PLANS.
Within 6 months after the date of the enactment of
this Act, the Secretary of Health and Human Services,
after consulting with the States, shall establish a stand-
ardized format which States shall use to submit plans
under section 402(a) of the Social Security Act for fiscal
year 2004 and thereafter.
TITLE IX—EFFECTIVE DATE
SEC. 901. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in section
502(f) and in subsection (b) of this section, the amend-
ments made by this Act shall take effect on October 1,
2002, 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 such date, without regard to whether
regulations to implement the amendments are promul-
gated by such date.
(b) DELAY PERMITTED IF STATE LEGISLATION RE-
QUIRED.—In the case of a State plan under section 402(a)
or 454 of the Social Security Act which the Secretary of
Health and Human Services determines requires State
legislation (other than legislation appropriating funds) in
order for the plan to meet the additional requirements im-
posed by the amendments made by this Act, the State plan
shall not be regarded as failing to comply with the require-
ments of such section 402(a) or 454 solely on the basis
of the failure of the plan to meet such additional require-
ments before the 1st day of the 1st calendar quarter be-
ginning after the close of the 1st regular session of the
State legislature that begins after the date of the enact-
ment 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 such session shall be deemed to be a separate
regular session of the State legislature.
Æ